On April 15, 2014 (79 FR 21121), the NRC published in the Federal Register a direct final rule amending its regulations in part 72 of Title 10 of the Code of Federal Regulations to include Amendment No. 3 to CoC No. 1029, Transnuclear, Inc. Standardized Advanced NUHOMS® Horizontal Modular Storage System listing within the “List of approved spent fuel storage casks.” The direct final rule was to become effective on June 30, 2014. The NRC also concurrently published a companion proposed rule on April 15, 2014 (79 FR 21156).

In the April 15, 2014, proposed rule, the NRC stated that if any significant adverse comments were received, a document that withdraws the direct final rule would be published in the Federal Register . As a result, the direct final rule would not take effect. The NRC received 12 comments from private citizens and one comment letter from two attorneys representing 20 environmental organizations and individuals. The NRC also received one comment from a private citizen after the public comment period ended. The public comments are available at www.regulations.gov by searching on Docket ID NRC-2013-0271. The NRC determined that at least one of the comments is significant and adverse. The comment, submitted by two attorneys on behalf of 20 environmental organizations and individuals, raises a concern that the direct final rule approves “a significant and unprecedented change to the permissible uses of the 32PTH2 DSC: the transportation of high burnup fuel.” Although this amendment does not approve the transportation of high burnup fuel, in this instance the NRC considers this comment to be a significant adverse comment as defined in Section I, Procedural Background, of the direct final rule because the comment raises an issue serious enough to warrant a substantive response to clarify or complete the record. Therefore, the NRC is withdrawing the direct final rule.

As stated in the April 15, 2014, proposed rule, the NRC will address the comments in a subsequent final rule. The NRC will not initiate a second comment period on this action.

147 FERC ¶ 61,209 Before Commissioners: Cheryl A. LaFleur, Acting Chairman; Philip D. Moeller, John R. Norris, and Tony Clark. Final Rule (Issued June 19, 2014)

1. Pursuant to section 215 of the Federal Power Act (FPA), 1 the Commission approves Reliability Standard EOP-010-1 (Geomagnetic Disturbance Operations). The North American Electric Reliability Corporation (NERC), the Commission-certified Electric Reliability Organization (ERO), submitted the Reliability Standard for Commission approval in response to a Commission directive in Order No. 779. 2 The Reliability Standard is designed to mitigate the effects of geomagnetic disturbances (GMD) on the Bulk-Power System by requiring responsible entities to implement Operating Plans and Operating Procedures or Processes. The Commission also approves the associated violation risk factors and violation severity levels, implementation plan, and effective dates proposed by NERC.

2. Section 215 of the FPA requires the Commission to certify an ERO to develop mandatory and enforceable Reliability Standards, subject to Commission review and approval. 3 Once approved, the Reliability Standards may be enforced in the United States by the ERO, subject to Commission oversight, or by the Commission independently. 4

3. In Order No. 779, the Commission directed NERC, pursuant to FPA section 215(d)(5), to develop and submit for approval proposed Reliability Standards that address the impact of GMDs on the reliable operation of the Bulk-Power System. The Commission based its directive on the potentially severe, wide-spread impact on the reliable operation of the Bulk-Power System that can be caused by GMD events and the absence of existing Reliability Standards to address GMD events. 5

4. The Commission directed NERC to implement the directive in two stages. In the first stage, the Commission directed NERC to submit, within six months of the effective date of Order No. 779, one or more Reliability Standards (First Stage GMD Reliability Standards) that require owners and operators of the Bulk-Power System to develop and implement operational procedures to mitigate the effects of GMDs consistent with the reliable operation of the Bulk-Power System. 6

5. In the second stage, the Commission directed NERC to submit, within 18 months of the effective date of Order No. 779, one or more Reliability Standards (Second Stage GMD Reliability Standards) that require owners and operators of the Bulk-Power System to conduct initial and on-going assessments of the potential impact of benchmark GMD events on Bulk-Power System equipment and the Bulk-Power System as a whole. Order No. 779 directed that the Second Stage GMD Reliability Standards must identify benchmark GMD events that specify what severity GMD events a responsible entity must assess for potential impacts on the Bulk-Power System. 7 Order No. 779 explained that, if the assessments identify potential impacts from benchmark GMD events, the Reliability Standards should require owners and operators to develop and implement a plan to protect against instability, uncontrolled separation, or cascading failures of the Bulk-Power System, caused by damage to critical or vulnerable Bulk-Power System equipment, or otherwise, as a result of a benchmark GMD event. The Commission directed that the development of this plan could not be limited to considering operational procedures or enhanced training alone, but should, subject to the potential impacts of the benchmark GMD events identified in the assessments, contain strategies for protecting against the potential impact of GMDs based on factors such as the age, condition, technical specifications, system configuration, or location of specific equipment. 8 Order No. 779 observed that these strategies could, for example, include automatically blocking geomagnetically-induced currents (GIC) from entering the Bulk-Power System, instituting specification requirements for new equipment, inventory management, isolating certain equipment that is not cost effective to retrofit, or a combination thereof.

6. On November 13, 2013, NERC petitioned the Commission to approve Reliability Standard EOP-010-1 and its associated violation risk factors and violation severity levels, implementation plan, and effective dates. In the petition, NERC states that the Reliability Standard is just, reasonable, not unduly discriminatory or preferential, and in the public interest. NERC maintains that the Reliability Standard satisfies the Commission's directive in Order No. 779 corresponding to the development and submission of the First Stage GMD Reliability Standards.

7. NERC states that, consistent with Order No. 779 and the NERC Functional Model, Reliability Standard EOP-010-1 applies to reliability coordinators and transmission operators with a “Transmission Operator Area that includes a power transformer with a high side wye-grounded winding with terminal voltage greater than 200 kV.”  9 NERC explains that the Reliability Standard has three requirements: (1) Requirement R1 addresses coordination by reliability coordinators within their areas; (2) Requirement R2 addresses the dissemination of space weather information by reliability coordinators to ensure that entities within a reliability coordinator area have the appropriate information necessary to take action and that the same information is available to all entities; and (3) Requirement R3 requires transmission operators to develop GMD Operating Procedures or Processes.

8. NERC states that Requirement R1 requires each reliability coordinator to develop, maintain, and implement a GMD Operating Plan that coordinates the GMD Operating Procedures or Operating Processes within its reliability coordinator area. 10 NERC explains that each reliability coordinator is required to ensure that GMD Operating Procedures and Operating Processes in its reliability coordinator area are not in conflict, but a reliability coordinator will not review the technical aspects of the GMD Operating Procedures and Operating Processes. 11 Instead, according to NERC, each transmission operator will be responsible for the technical aspects of its Operating Procedures and Operating Processes. NERC further states that Requirement R1 requires each reliability coordinator to describe the activities that must be undertaken in order to mitigate the effects of a GMD event. NERC explains that, pursuant to Reliability Standard IRO-001-1.1, each reliability coordinator has decision-making authority to act and to direct actions to be taken by transmission operators, balancing authorities, generator operators, transmission service providers, load-serving entities, and purchasing-selling entities within its reliability coordinator area to preserve the reliability of the bulk electric system.

9. NERC states that Requirement R2 requires each reliability coordinator to disseminate space weather information to ensure coordination and consistent awareness in its reliability coordinator area. NERC maintains that entrusting this responsibility to reliability coordinators is appropriate given the reliability coordinator's wide-area view. NERC also explains that Requirement R2 replaces existing Requirement R3 of Reliability Standard IRO-005-3.1a, which currently addresses dissemination of information regarding GMD forecasts. 12

10. NERC states that Requirement R3 requires each transmission operator to develop GMD Operating Procedures or Operating Processes to address GMD events. NERC explains that Requirement R3 is not prescriptive and allows each transmission operator to tailor its Operating Procedures or Operating Processes based on the transmission operator's assessment of entity-specific factors, such as geography, geology, and system topology. According to NERC, Requirement R3 requires each transmission operator to specify: (1) Steps or tasks that must be conducted to receive space weather information; (2) what actions must be taken under what conditions, and such conditions must be predetermined; and (3) when and under what conditions the Operating Procedure or Operating Process is exited. NERC maintains that Reliability Standard EOP-010-1 does not prescribe specific actions that must be taken by responsible entities because “a `one-size fits all' approach to crafting GMD Reliability Standards would fail to recognize the important role of locational differences.”  13

11. NERC proposes that Reliability Standard EOP-010-1 become effective the “first day of the first calendar quarter that is six months after the date that this standard is approved by an applicable governmental authority.”  14 However, NERC states that Requirement R2 of Reliability Standard EOP-010-1, pertaining to reliability coordinator dissemination of space weather information, is meant to replace existing Requirement R3 of Reliability Standard IRO-005-3.1a, which includes similar language. Therefore, to avoid duplicative requirements being enforced at the same time, NERC proposes that, if Reliability Standard EOP-010-1 becomes effective prior to the retirement of Reliability Standard IRO-005-3.1a, then Requirement R2 of Reliability Standard EOP-010-1 will not become effective until the first day following retirement of Reliability Standard IRO-005-3.1a.

12. On January 16, 2014, the Commission issued a Notice of Proposed Rulemaking that proposed to approve Reliability Standard EOP-010-1 as just, reasonable, not unduly discriminatory or preferential, and in the public interest based on the Commission's review of NERC's petition and supporting exhibits. 15 The NOPR stated that the Reliability Standard satisfies the directive in Order No. 779 that NERC submit one or more Reliability Standards that require owners and operators of the Bulk-Power System to develop and implement operational procedures to mitigate the effects of GMDs consistent with the reliable operation of the Bulk-Power System. The NOPR also stated that the Reliability Standard is consistent with the guidance in Order No. 779 that NERC develop Reliability Standards that, rather than require specific operational procedures, require responsible entities to develop and implement entity-specific operational procedures because owners and operators of the Bulk-Power System are most familiar with their own equipment and system configurations. 16 The NOPR further stated that the Reliability Standard requires coordination of operational procedures and processes, overseen by a functional entity with a wide-area perspective (i.e., reliability coordinators), which is consistent with the guidance in Order No. 779. 17

13. In response to the NOPR, the Commission received 20 sets of comments. We address below the issues raised in the comments. The Appendix to this Final Rule lists the entities that filed comments in response to the NOPR.

14. Pursuant to FPA section 215(d)(2), we approve Reliability Standard EOP-010-1 as just, reasonable, not unduly discriminatory or preferential, and in the public interest. As the Commission stated in Order No. 779, “operational procedures, while not a complete solution, constitute an important first step to addressing the GMD reliability gap because they can be implemented relatively quickly . . . [and] [o]perational procedures may help alleviate abnormal system conditions due to transformer absorption of reactive power during GMD events, helping to stabilize system voltage swings, and may potentially isolate some equipment from being damaged or misoperated.”  18 We determine that Reliability Standard EOP-010-1 addresses the directive in Order No. 779 that NERC submit one or more Reliability Standards that require owners and operators of the Bulk-Power System to develop and implement operational procedures to mitigate the effects of GMDs consistent with the reliable operation of the Bulk-Power System. 19 We also determine that the Reliability Standard is consistent with the guidance in Order No. 779 that NERC develop Reliability Standards that, rather than require specific operational procedures, require responsible entities to develop and implement entity-specific operational procedures because owners and operators of the Bulk-Power System are most familiar with their own equipment and system configurations. 20 Further, we determine that the Reliability Standard requires coordination of operational procedures and processes, overseen by a functional entity with a wide-area perspective (i.e., reliability coordinators), which is also consistent with the guidance in Order No. 779. 21

15. Several commenters support approval of Reliability Standard EOP-010-1 without modification. 22 We address below the following issues raised by other commenters: (A) the applicability section of Reliability Standard EOP-010-1; (B) effectiveness of GMD operational procedures; (C) implementation plan; and (D) other issues. We also address below the violation risk factors and violation severity levels associated with Reliability Standard EOP-010-1.

16. NERC submitted a white paper as part of its petition explaining the technical justification for applying Reliability Standard EOP-010-1 only to transmission operators that operate a power transformer with a high side wye-grounded winding with terminal voltage greater than 200 kV in their transmission operator areas. 23 In another white paper, NERC explains its proposal regarding the applicability of the Reliability Standard to reliability coordinators and transmission operators only. 24 The White Paper Supporting Functional Entity Applicability explains that the reliability coordinator has “responsibility and authority for reliable operation within the Reliability Coordinator Area (RCA) . . . and includes a wide-area view with situational awareness of neighboring RCAs.”  25 NERC states that including reliability coordinators as applicable entities “provides the necessary coordination for planning and real-time actions.”  26 With respect to transmission operators, NERC explains that “[l]ike the [reliability coordinator], the [transmission operator] has responsibility and authority for the reliable operation of the transmission system within a specified area.”  27 In addition, NERC justifies omitting balancing authorities and generator operators from the scope of the Reliability Standard. NERC explains that balancing authorities “can be expected to address GMD impacts through use of generation . . . [but] the [balancing authority] would not initiate actions unilaterally during a GMD event and would instead respond to the direction of the [transmission operator] and [reliability coordinator].”  28 As for generator operators, NERC states that some generator operators “would not have the technical basis for taking steps [to mitigate GMDs] on [their] own and would instead take steps based on the [reliability coordinator's] or [transmission operator's] Operating Plans, Processes, or Procedures.”  29 NERC also notes that generator owners and generator operators will be considered for inclusion in the Second Stage GMD Reliability Standards, “which will require applicable entities to conduct vulnerability assessment and develop appropriate mitigation strategies . . . [and that] [s]uch mitigation strategies could include the development of Operating Procedures for applicable [generator owners] and [generator operators].”  30

17. The NOPR stated that the applicability designations in Reliability Standard EOP-010-1 are appropriate, based on the justifications set forth in the white papers in Exhibits D and E of NERC's petition.

18. Foundation, SmartSense, AFS, and Baker maintain that Reliability Standard EOP-010-1 should be applicable to more entities than transmission operators having a power transformer with a high side wye-grounded winding with terminal voltage greater than 200 kV in the transmission operator area.

19. Foundation states that during the March 1989 solar storm discussed in Order No. 779, electric utilities reported effects on static VAR compensators and other reactive power equipment operating between 100 kV and 200 kV. Foundation notes that such equipment is “designed to provide reactive power and to stabilize transmission networks during GMD.”  31 Foundation states that Reliability Standard EOP-010-1 “would exempt Transmission Operators with equipment operating between 100 kV and 200 kV.”  32 Foundation requests that the Commission remand Reliability Standard EOP-010-1 to include “owners and operators of all stabilizing and reactive power equipment operating between 100 kV and 200 kV.”  33

20. Foundation and SmartSense assert that the 200 kV threshold for transmission operators is inconsistent with the Commission-approved definition of bulk electric system, which generally includes assets operating at voltages of 100 kV and higher. SmartSense asserts that there is evidence that elements of the Bulk-Power System operating between 100 kV and 200kV would be substantially affected by a GMD event. In support, SmartSense cites to an Oak Ridge National Laboratory GMD Study and an article from the Idaho National Laboratory, which SmartSense states tested sub-200 kV transformers. 34 SmartSense further claims that NERC improperly relied on a cost-benefit analysis to exclude networks operating at 200 kV and below.

21. Foundation, AFS, EMP Coalition, Kappenman, and Baker maintain that Reliability Standard EOP-010-1 should be applicable to generator operators and/or balancing authorities.

22. Foundation states that balancing authorities have real-time responsibilities that would be essential during a GMD event. Foundation asserts that excluding balancing authorities from the applicability section of Reliability Standard EOP-010-1 is “operationally unworkable” because it “assumes that the real time responsibilities of Balancing Authorities under fast-moving GMD conditions could be assumed by Reliability Coordinators.”  35 Foundation states that the NOAA Space Weather Prediction Center would only provide 15-60 minutes warning of a severe solar storm. Foundation asserts that, given the 15-60 minute limitation, there would be insufficient time for reliability coordinators to communicate with balancing authorities, transmission operators, and generator operators following a solar storm warning because the NERC Reliability Standards require three-part communications when engaging in oral, two-party communications.

23. Foundation and Kappenman also maintain that Reliability Standard EOP-010-1 does not address generator step up (GSU) transformers, which they assert are vulnerable to GMDs. Foundation contends that generator operators have been installing GIC monitors for their GSU transformers and have taken actions to downrate their GSU transformers during solar storms. Foundation also notes that the NERC GMD Task Force developed an Operating Procedure Template for generator operators.

24. We determine that the applicability section of Reliability Standard EOP-010-1 is technically justified and consistent with Order No. 779, both in terms of using a 200 kV threshold for determining applicable transmission operators and not including balancing authorities and generator operators as applicable entities.

25. We reject the argument that the applicability threshold in Reliability Standard EOP-010-1 is inconsistent with the definition of bulk electric system because it excludes transmission operators with only 200 kV transformers and below. Instead, we determine that the applicability section of Reliability Standard EOP-010-1 complies with the directive in Order No. 779 that the First Stage GMD Reliability Standards should mitigate the effects of GMDs consistent with the reliable operation of the Bulk-Power System. 36 The NERC petition and White Paper Supporting Network Applicability provide an adequate technical basis to conclude that transformers operating at 200 kV and below are likely to have a limited impact on the Bulk-Power System during a GMD event. We are not persuaded by the Foundation comments, discussed above, which do not refute this conclusion, or the materials cited by SmartSense. SmartSense cites a table in the Oak Ridge Laboratory GMD Study identifying at-risk transformers operating at 345 kV, which fall within the applicability criteria. 37 Moreover, the Oak Ridge Laboratory GMD Study found that significantly higher GIC flows occur at higher operating voltages. 38

26. The applicability criteria for Reliability Standard EOP-010-1 determine which transmission operators must comply with the Reliability Standard (i.e., those with a power transformer with a high side wye-grounded winding with terminal voltage greater than 200 kV in the transmission operator area). While this criterion excludes transmission operators operating transformers 200 kV and below, the 200 kV threshold does not mean that applicable transmission operators will ignore reactive power supplies operating at 200 kV or below on their systems when developing the required GMD Operating Procedures or Operating Processes. Reliability Standard EOP-010-1, Requirement R3 supports this conclusion because it directs each applicable transmission operator to “develop, maintain, and implement a GMD Operating Procedure or Operating Process to mitigate the effects of GMD events on the reliable operation of its respective system.” Accordingly, because Requirement R3 addresses an applicable transmission operator's entire system, the requirement is not limited to transformers operating above 200 kV for the purposes of developing GMD Operating Procedures or Operating Processes by applicable transmission operators. 39

27. The Idaho National Laboratory article cited by SmartSense stated that a simulated solar event affected “a pair of 138kV core form, 2 winding substation transformers, which had been in-service at [Idaho National Laboratory] since the 1950s,” through increased losses and generation of harmonics that resulted in loss of excitation. 40 The Idaho National Laboratory article does not contradict NERC's technical analysis, however. NERC does not contend that GMD events will have no effect on networks operating at 200 kV and below. Rather, the standard drafting team found that geomagnetically-induced currents generated on networks operated at 200 kV and below would be significantly less than those operated at higher voltages, a finding that is consistent with the Oak Ridge Laboratory GMD Study. Specifically, NERC's modeling of a portion of the Eastern Interconnection showed only a small change in system impact from a GMD event when 115 kV and 161 kV circuits were excluded from the model. 41 The materials cited in the comments do not rebut NERC's technical analysis. In sum, we determine that there is adequate technical justification for the 200 kV threshold for transmission operators. 42

28. We also determine that NERC provided adequate justification not to include balancing authorities and generator operators in the applicability section of Reliability Standard EOP- 010-1. We disagree with Foundation's assertion that balancing authorities should be included in the applicability section because reliability coordinators are incapable of communicating quickly with transmission operators, generator operators, and balancing authorities due to the three-part communications requirement in Reliability Standard COM-002-2. We are not persuaded that GMD events pose unique communication problems for reliability coordinators because a reliability coordinator may only have 15-60 minutes warning of a severe solar storm. Reliability coordinators are responsible for real-time system reliability and often must respond quickly or even immediately to Bulk-Power System events with little or no warning. 43 Reliability Standard COM-002-2, Requirement R1 recognizes this responsibility by stating that “[e]ach Transmission Operator, Balancing Authority, and Generator Operator shall have communications (voice and data links) with appropriate Reliability Coordinators, Balancing Authorities, and Transmission Operators . . . [and] [s]uch communications shall be staffed and available for addressing a real-time emergency condition.”

29. With respect to generator operators, there is no dispute that GSU transformers are susceptible to geomagnetically-induced currents. While generator operators are not listed as applicable entities in Reliability Standard EOP-010-1, NERC explains that generator operators will have to act during a GMD event when directed by a reliability coordinator, in accordance with its reliability coordiantor's GMD Operating Plan, or by a transmission operator, in accordance with its transmission operator's GMD Operating Procedures or Operating Processes. 44 We are not persuaded that generator operators should be required to act independently under Reliability Standard EOP-010-1. While generator operators might be, as Foundation asserts, increasingly installing GIC monitoring equipment, there is no evidence in the record regarding the proportion of generator operators with GIC monitoring capabilities. Accordingly, we agree with NERC that at least some generator operators would not have the technical basis to address a GMD event and would instead need to rely on reliability coordinators and transmission operators for direction. 45 We also note that the Geomagnetic Disturbance Operating Procedure Template for generator operators developed by the NERC GMD Task Force, which the Foundation's comments reference, conditions some of its suggested actions on the generator operator having adequate monitoring systems. 46 In sum, we are not persuaded by Foundation's comments and, rather, determine that there is adequate justification in the record for not including balancing authorities and generator operators in the applicability section of Reliability Standard EOP-010-1. 47

30. NERC states, quoting Order No. 779, that “[o]perational procedures may help alleviate abnormal system conditions due to transformer absorption of reactive power during GMD events, helping to stabilize system voltage swings, and may potentially isolate some equipment from being damaged or misoperated.”  48 NERC explains that Reliability Standard EOP-010-1 “is an important first step in addressing the issue of GMDs and can be implemented relatively quickly. While responsible entities will develop and implement Operational Procedures or Operational Processes, NERC will continue to support those efforts through the GMD Task Force, for example, by identifying and sharing Operating Plans, Processes, and Procedures found to be the most effective.”  49

31. The NOPR stated that Reliability Standard EOP-010-1 satisfies the directive in Order No. 779 that NERC submit one or more Reliability Standards that require owners and operators of the Bulk-Power System to develop and implement operational procedures to mitigate the effects of GMDs consistent with the reliable operation of the Bulk-Power System. The NOPR also stated that operational procedures, while not a complete solution, constitute an important first step to addressing the GMD reliability gap.

32. SmartSense and Orquin state that GMD operational procedures depend on the limited ability to predict GMD events. SmartSense states that space weather information is the “default trigger” for implementing operating procedures under Reliability Standard EOP-010-1 but that space weather forecasts have a high error rate. SmartSense contends that relying on space weather forecasts alone will result in false alarms or missed GMD event forecasts. SmartSense maintains that real-time or near real-time monitoring data should be used in conjunction with space weather forecasts to trigger GMD operational procedures.

33. Baker states that operational procedures will be ineffective because: (1) Grid operators will be reluctant to take action during a GMD event (e.g., shed load); (2) the warning period for solar storms does not allow enough time for grid operators to take action; (3) grid operators will not have enough situational awareness to know how to take action during a GMD event; (4) there is no capacity to address GMD events on a national scale; (5) operational procedures have been shown to be inadequate in other contexts; (6) equipment failure may undermine the grid operators' ability to respond; (7) GMD events will disrupt communication networks used by grid operators; (8) the potential effects of a GMD event on the Bulk-Power System are too complex to anticipate; and (9) Regional Transmission Organizations and Independent System Operators do not have the authority to shut down the grid in neighboring Regions. Foundation states that grid operators will have to act blindly during a GMD event because Reliability Standard EOP-010-1 does not require GIC monitoring or mandatory sharing of GIC monitoring data. Foundation also states that Reliability Standard EOP-010-1 is ineffective because it does not require “quantified contingency planning.” Orquin maintains that operational procedures are of limited value and recommends using monitoring equipment and blocking devices at least as a back-up measure.

34. As the Commission stated in Order No. 779, operational procedures are not a complete solution to the risks posed by a GMD event to the Bulk-Power System. Order No. 779 directed NERC to develop Reliability Standards that require operational procedures because such Reliability Standards could be developed and implemented relatively quickly. While we recognize the concerns in the comments of Baker and others regarding the efficacy of operational procedures, Order No. 779 weighed those concerns in ultimately directing NERC to develop operational procedures in the First Stage GMD Reliability Standards and more comprehensive protections in the Second Stage GMD Reliability Standards. 50 We affirm the determination in Order No. 779 that operational procedures constitute “an important first step to addressing the GMD reliability gap because they can be implemented relatively quickly . . . [and] may help alleviate abnormal system conditions due to transformer absorption of reactive power during GMD events, helping to stabilize system voltage swings, and may potentially isolate some equipment from being damaged or misoperated.”  51

35. With respect to the concerns raised by SmartSense regarding overreliance on space weather forecasts to trigger GMD operational procedures, Reliability Standard EOP-010-1 does not mandate the use of space weather to trigger the GMD operational procedures. While Requirement R2 requires reliability coordinators to disseminate current and forecasted space weather conditions to the appropriate functional entities, Requirement R3 requires transmission operators to develop Operating Procedures or Operating Processes that, at a minimum, include “System Operator actions to be initiated based on predetermined conditions.” Those “predetermined conditions” might include space weather information or other data, including GIC monitoring data, if available. Requirement R3 ultimately leaves it to the transmission operator to define the predetermined conditions in its Operating Procedure or Operating Process. Accordingly, we disagree that Reliability Standard EOP-010-1 requires that initiation of GMD operating procedures be based upon space weather only.

36. We are not persuaded that the First Stage GMD Reliability Standards should require all responsible entities to monitor GICs or mandate sharing GIC monitoring data with reliability coordinators, as Foundation contends. As explained above, we directed NERC to develop only operational procedures in the First Stage GMD Reliability Standards, and to develop more comprehensive protections in the Second Stage GMD Reliability Standards. The issue of monitoring requirements properly belongs in the Second Stage GMD Reliability Standards. 52

37. In terms of real-time sharing of GIC information with reliability coordinators, we note that Reliability Standard COM-002-2, Requirement R1.1 states that “[e]ach Balancing Authority and Transmission Operator shall notify its Reliability Coordinator, and all other potentially affected Balancing Authorities and Transmission Operators through predetermined communication paths of any condition that could threaten the reliability of its area or when firm load shedding is anticipated.” Accordingly, if a transmission operator monitors GIC levels that could threaten the reliability of its area of the Bulk-Power System, the transmission operator would have to communicate that information to its reliability coordinator. 53 With respect to Foundation's comment that Reliability Standard EOP-010-1 should include “quantified contingency planning,” Foundation does not explain the meaning of this term. In any case, we note that Reliability Standard EOP-010-1, Requirement R3 requires applicable transmission operators to “develop, maintain, and implement a GMD Operating Procedure or Operating Process to mitigate the effects of GMD events on the reliable operation of its respective system.”

38. The NERC petition proposes that Reliability Standard EOP-010-1 become effective the “first day of the first calendar quarter that is six months after the date that this standard is approved by an applicable governmental authority.”  54 However, NERC states that Requirement R2 of Reliability Standard EOP-010-1, pertaining to reliability coordinator dissemination of space weather information, is meant to replace existing Requirement R3 of Reliability Standard IRO-005-3.1a, which includes similar language. Therefore, to avoid duplicative requirements being enforced at the same time, NERC proposes that, if Reliability Standard EOP-010-1 becomes effective prior to the retirement of Reliability Standard IRO-005-3.1a, then Requirement R2 of Reliability Standard EOP-010-1 will not become effective until the first day following retirement of Reliability Standard IRO-005-3.1a. 55 According to NERC's petition, Requirements R1 and R3 of Reliability Standard EOP-010-1 are not affected by the possible retirement of IRO-05-3.1a and, thus, will be effective the first day of the first calendar quarter that is six months after the date that the Reliability Standard is approved by an applicable governmental authority. 56

39. The NOPR proposed to approve NERC's implementation plan and effective dates for Reliability Standard EOP-010-1.

40. APS states that a six-month implementation period is not a sufficient amount of time to create a new Operating Process or Operating Procedure. APS explains that it will develop an Operation Process or Operating Procedure after its reliability coordinator develops an Operating Plan that identifies the activities designed to mitigate the effects of GMD events on the Bulk-Power System. APS states that its Operating Process or Operating Procedure will then be reviewed by the reliability coordinator, and that it is unrealistic to expect all this to be done in six months. APS proposes allowing the reliability coordinator six months to develop its Operating Plan and then allowing transmission operators a further six months to develop their Operating Processes or Operating Procedures.

41. We determine that a six-month implementation period, as proposed by NERC, allows enough time for reliability coordinators and transmission operators to implement the requirements of Reliability Standard EOP-010-1. Only APS indicates that a six-month period does not afford applicable entities enough time to implement the Reliability Standard. No other commenter expresses similar concerns. Further, we see no reason why, as APS contends, a transmission operator must wait until its reliability coordinator has completed its Operating Plan before the transmission operator begins work on its Operating Process or Operating Procedure. Reliability coordinators and transmission operators should be able to work largely in parallel and coordinate their efforts to implement the requirements of the Reliability Standard. Accordingly, we approve the implementation plan and effective dates proposed by NERC.

42. Commenters express concern that Reliability Standard EOP-010-1 does not address electromagnetic pulses (EMPs). 57 However, Order No. 779 explicitly stated that EMPs were not within the scope of that rulemaking, which led to NERC's petition here. 58 Likewise, Reliability Standard EOP-010-1 is responsive to the Commission directive, and comments critiquing the Reliability Standard for not addressing EMPs are outside the scope of the immediate proceeding.

43. Other commenters criticize the NERC Board of Trustees' approval of Reliability Standard EOP-010-1 because “no substantive discussion occurred at the November 7 meeting [at which the NERC Board of Trustees approved the Reliability Standard] and, as a result, the public was deprived of its right for due process under Section 215 of the Federal Power Act.”  59 We find no basis to conclude that the NERC Board of Trustees either violated the NERC Rules of Procedure or otherwise acted improperly in approving Reliability Standard EOP-010-1. Foundation does not identify any rule or other provision that, it claims, the NERC Board of Trustees violated in allegedly failing to conduct a “substantive discussion” at the November 7 meeting. Moreover, in considering whether to approve Reliability Standard EOP-010-1, the Commission established this rulemaking docket to provide the public with an opportunity to comment; thus the public has been afforded adequate due process under FPA section 215. This is in addition to opportunities to participate in NERC's standard development process, by submitting comments or otherwise.

44. In response to a comment that Reliability Standard EOP-010-1 could interfere with the development of state-level efforts to address GMD events, 60 we note that FPA section 215(j)(3) provides in relevant part that section 215 does not “preempt any authority of any State to take action to ensure the safety, adequacy, and reliability of electric service within that State, as long as such action is not inconsistent with any reliability standard.” We also observe that Reliability Standard EOP-010-1 does not preclude users, owners and operators of the Bulk-Power System from taking additional steps that are designed to mitigate the effects of GMD events, provided those additional steps are not inconsistent with the Commission-approved Reliability Standards.

45. Each requirement of proposed Reliability Standard EOP-010-1 includes one violation risk factor and has an associated set of at least one violation severity level. The ranges of ERO penalties for violations will be based on the sanctions table and supporting penalty determination process described in the Commission-approved NERC Sanction Guidelines, according to the NERC petition. The NOPR proposed to approve the proposed violation risk factors and violation severity levels for the requirements proposed in Reliability Standard EOP-010-1 as consistent with the Commission's established guidelines. 61 The Commission did not receive any comments regarding this aspect of the NOPR. Accordingly, the Commission approves the violation risk factors and violation severity levels for the requirements in Reliability Standard EOP-010-1.

46. The Office of Management and Budget (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 an agency 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. The Paperwork Reduction Act (PRA) requires each federal agency to seek and obtain OMB approval before undertaking a collection of information directed to ten or more persons, or contained in a rule of general applicability.

47. The Commission is submitting these reporting requirements to OMB for its review and approval under section 3507(d) of the PRA. The Commission solicited comments on the need for and the purpose of the information contained in Reliability Standard EOP-010-1 and the corresponding burden to implement the Reliability Standard. The Commission received comments on specific requirements in the Reliability Standard, which we address in this Final Rule. However, the Commission did not receive any comments on our reporting burden estimates or on the need for and the purpose of the information collection requirements.

48. The Commission based its paperwork burden estimates on the NERC compliance registry as of November 27, 2013. According to the registry, there are 16 reliability coordinators and 183 transmission operators.

49. The Commission estimates an increased burden for each requirement, as explained in the chart below, for a total estimated burden of $238,800. The Commission based the burden estimates on staff experience, knowledge, and expertise:

50. The above chart does not include Reliability Standard EOP-010-1, Requirement R2 because, as NERC states, that requirement replaces IRO-005-3.1a, Requirement R3 and has no change in overall burden. In addition, while our burden estimate with respect to Reliability Standard EOP-010-1, Requirement R3 assumes that all 183 transmission operators are subject to that requirement, we note that not all 183 transmission operators are likely to be subject to Requirement R3 because that requirement only applies to transmission operators with a Transmission Operator Area that includes a power transformer with a high side, wye-grounded winding with terminal voltage greater than 200 kV.

Title: FERC-725S, Mandatory Reliability Standards: Reliability Standard EOP-010-1.

Action: Proposed Collection of Information.

OMB Control No: 1902-0270.

Respondents: Business or other for profit, and not for profit institutions.

Frequency of Responses: One-time and ongoing.

Necessity of the Information: Reliability Standard EOP-010-1 implements the Congressional mandate of the Energy Policy Act of 2005 to develop mandatory and enforceable Reliability Standards to better ensure the reliability of the nation's Bulk-Power System. Specifically, the Reliability Standard ensures that responsible entities have Operating Plans and Operating Procedures or Processes in place to mitigate the effects of geomagnetic disturbances on the Bulk-Power System.

Internal review: The Commission has reviewed Reliability Standard EOP-010-1 and has determined that the Reliability Standard is necessary to ensure the reliability and integrity of the Nation's Bulk-Power System.

51. Interested persons may obtain information on the reporting requirements by contacting: Federal Energy Regulatory Commission, 888 First Street NE., Washington, DC 20426 [Attention: Ellen Brown, Office of the Executive Director, email: DataClearance@ferc.gov , Phone: (202) 502-8663, fax: (202) 273-0873]. Comments on the requirements of this rule may also be sent to the Office of Information and Regulatory Affairs, Office of Management and Budget, Washington, DC 20503 [Attention: Desk Officer for the Federal Energy Regulatory Commission]. For security reasons, comments should be sent by email to OMB at oira_submission@omb.eop.gov . Comments submitted to OMB should include Docket Number RM14-1-000.

52. 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. 63 The Commission has categorically excluded certain actions from this requirement as not having a significant effect on the human environment. Included in the exclusion are rules that are clarifying, corrective, or procedural or that do not substantially change the effect of the regulations being amended. 64 The actions here fall within this categorical exclusion in the Commission's regulations.

53. The Regulatory Flexibility Act of 1980 (RFA)  65 generally requires a description and analysis of proposed rules that will have significant economic impact on a substantial number of small entities.

54. The NOPR compared the NERC compliance registry with data submitted to the Energy Information Administration on Form EIA-861, which indicated that perhaps as many as 34 small entities were registered as transmission operators and no small entities were registered as reliability coordinators. However, the Commission estimated in the NOPR that there will be no material change in burden for the 34 transmission operators that qualified as small entities because they will likely not be subject to Reliability Standard EOP-010-1. Reliability Standard EOP-010-1 applies to transmission operators with a Transmission Operator Area that includes a power transformer with a high side, wye-grounded winding with terminal voltage greater than 200 kV. The NOPR stated that transmission operators with Transmission Operator Areas that include a power transformer with a high side, wye-grounded winding with terminal voltage greater than 200 kV are generally large entities serving substantial geographical areas with significant energy output. The Commission did not receive any comments regarding this aspect of the NOPR.

55. Since the issuance of the NOPR, the Small Business Administration changed the small business size standard applicable to reliability coordinators and transmission operators. The Commission currently does not have an estimate of the number of small reliability coordinators and transmission operators using the new size standard. However, the Commission still estimates that the specific applicability of Reliability Standard EOP-010-1 means that generally only large entities will have to meet the new requirements.

56. Based on the above, the Commission certifies that Reliability Standard EOP-010-1 will not have a significant impact on a substantial number of small entities. Accordingly, no initial regulatory flexibility analysis is required.

57. In addition to publishing the full text of this document in the Federal Register , the Commission provides all interested persons an opportunity to view and/or print the contents of this document via the Internet through the Commission's Home Page ( http://www.ferc.gov ) and in the Commission's Public Reference Room during normal business hours (8:30 a.m. to 5:00 p.m. Eastern time) at 888 First Street NE., Room 2A, Washington, DC 20426.

58. From the Commission'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.

59. User assistance is available for eLibrary and the Commission's Web site during normal business hours from the Commission's Online Support at (202) 502-6652 (toll free at 1-866-208-3676) or email at ferconlinesupport@ferc.gov , or the Public Reference Room at (202) 502-8371, TTY (202) 502-8659. Email the Public Reference Room at public.referenceroom@ferc.gov .

60. These regulations are effective August 25, 2014. 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.

Section 335 of the Tariff Act of 1930 (19 U.S.C. 1335) authorizes the Commission to adopt such reasonable procedures, rules, and regulations as it deems necessary to carry out its functions and duties. This rulemaking seeks to improve provisions of the Commission's existing Rules of Practice and Procedure. The Commission is amending Part 201 of its rules, which are rules of general application. The Commission also is amending Part 207 of its rules covering proceedings such as investigations and reviews conducted under title VII of the Tariff Act of 1930 (“title VII proceedings”). The Commission published a notice of proposed rulemaking (NOPR) in the Federal Register at 78 FR 36446-36449 (June 18, 2013), proposing to amend the Commission's Rules of Practice and Procedure to make certain changes to rules of general application and provisions concerning the conduct of antidumping and countervailing duty investigations and reviews.

Although the Commission considers these rules to be procedural, which are excepted from notice-and-comment under 5 U.S.C. 553(b)(3)(A), the Commission invited the public to comment on all the proposed rules amendments. The NOPR requested public comment on the proposed rules within 60 days of publication of the NOPR. Three law firms which regularly appear before the Commission in Title VII proceedings filed comments: (1) Wiley Rein LLP, (2) Stewart and Stewart LLP, and (3) Cassidy Levy Kent LLP. Wiley Rein LLP filed its comments on behalf of Nucor Corporation, a domestic producer of steel products that frequently appears before the Commission in Title VII proceedings. Stewart and Stewart LLP and Cassidy Levy Kent LLP each filed comments on its own behalf.

The Commission carefully considered all comments received. The Commission's response is provided below in a section-by-section analysis. The Commission appreciates the time and effort the commentators devoted to provide comments on the NOPR.

The Regulatory Flexibility Act (5 U.S.C. 601 et seq.) is inapplicable to this rulemaking because it is not one for which a notice of final rulemaking is required under 5 U.S.C. 553(b) or any other statute. Although the Commission chose to publish a notice of proposed rulemaking, these regulations are “agency rules of procedure and practice,” and thus are exempt from the notice requirement imposed by 5 U.S.C. 553(b). Moreover, the rules are certified as not having a significant economic impact on a substantial number of small entities under the Regulatory Flexibility Act (5 U.S.C. 601 et seq.).

The rules do not impose an information collection burden under the provisions of the Paperwork Reduction Act (44 U.S.C. 3501 et seq.).

The rules do not contain any unfunded mandate or significantly or uniquely affect small governments, as described in the Unfunded Mandates Reform Act of 1995 (Pub. L. 104-4).

The rules do not constitute a “significant regulatory action” under Executive Order 12866 (58 FR 51735, October 4, 1993).

The rules do not have Federalism implications as specified in Executive Order 13132 (64 FR 43255, October 7, 1999).

The amendments are not major rules as defined by section 804 of the Small Business Regulatory Enforcement Fairness Act of 1996 (5 U.S.C. 801 et. seq.). Moreover, they are exempt from the reporting requirements of the Act because they concern rules of agency organization, procedure, or practice that do not substantially affect the rights or obligations of non-agency parties.

Most of the final rules set forth in this document are identical to the correspondingly numbered proposed rules published on June 18, 2013. For two of the proposed rules (§§ 207.10 and 207.45), no comments were submitted. The Commission found no reason to change those proposed rules on its own before adopting them as final rules. Thus, the preamble to those unchanged final rules is as set forth in the section-by-section analysis of the proposed rules found at 78 FR 36446-36449 (June 18, 2013).

The Commission did receive comments with suggestions for modifications pertaining to the other proposed rules. Those suggestions and the views of the Commission are summarized in the section-by-section analysis of this final rule. The commentary in the June 18, 2013, notice is considered part of the preamble to these final rules, to the extent that such commentary is not inconsistent with the discussion below.

The final rules differ from the proposed rules in two respects. First, with respect to § 201.8, relating to the filing of documents, the Commission has not adopted the proposed securely bound provision in paragraph (d). Second, the Commission has determined to amend its rules to require filing of nine confidential and two non-confidential copies of briefs and other written submissions (rather than eight confidential and four non-confidential copies as required under the current rules) in preliminary and final phase investigations and five-year reviews as reflected in the amendments to §§ 201.8(f), 207.15, 207.23, 207.25, 207.28, 207.30, 207.61(e), 207.62(b)(2), 207.65, 207.67(a), and 207.68(b). These amendments simply change the apportionment of confidential and nonconfidential copies of these written submissions in order to better meet the needs of Commission staff and reduce internal photocopying expenses and will result in a reduction of the overall number of copies that need to be filed. While the amendments to these provisions were not included in the proposed rules and therefore the Commission did not receive comments on them, there is no advance notice requirement for procedural changes to rules such as these under the Administrative Procedure Act. See 5 U.S.C. 553(b)(A). Moreover, in the proposed rulemaking, the Commission received comments with respect to the Commission's retention of paper filing requirements in § 201.8, and those comments are addressed below.

The NOPR proposed to amend paragraph (d) of § 201.8 by requiring that all paper copies of electronic submissions exceeding fifty (50) pages in length be securely bound and have a divider page and an identifying tab preceding each exhibit and/or attachment. Wiley Rein LLP objected to the proposed amendment as “duplicative,” emphasizing that parties are already required to supply searchable electronic versions of documents to the Commission. Wiley Rein LLP also asserted that preparing bound paper copies imposes an additional burden on the parties appearing before the Commission. Cassidy Levy Kent LLP urged the Commission to “abolish” all paper filing requirements, emphasizing that many other federal agencies and the U.S. Court of International Trade have transitioned from paper to electronic filing.

We adopt the proposed amendments to the rule as drafted in the NOPR, except for the bound copy requirement. We find the commenters' suggestion that the proposed bound copy requirement not be adopted to be persuasive. We also acknowledge that there is a trend toward greater electronic filing in agency and court proceedings. For now, however, the Commission and its staff will need to continue to rely on receiving paper copies of documents in light of the tight deadlines and voluminous factual records entailed by AD/CVD investigations and reviews, as well as the constraints of current technology and the Commission's ability to adopt new technology given budgetary restrictions. Requiring divider pages and tabs for exhibits and attachments will facilitate review of lengthy, multi-part documents by Commission staff. The Commission will continue to monitor requirements pertaining to filing of documents as technology develops.

The Commission has amended paragraph (f) of § 201.8 to require that two copies of nonconfidential documents be filed. As explained above, this is one of several changes that will result in an overall reduction in the number of paper copies of certain submissions to the Commission.

The NOPR proposed to amend paragraph (a) of § 207.10 to require one unbound copy of petitions. None of the comments addressed this specific proposal. Accordingly, we adopt the proposed amendment to the rule as drafted in the NOPR.

The NOPR proposed to amend § 207.11(b)(2)(ii) and (iii) by requiring petitioners to provide email addresses for all U.S. producers and U.S. importers identified in the petition. Although the current rules specify that petitioners are required to provide contact information for U.S. producers and U.S. importers, the information required includes street addresses, phone numbers, and contact person(s), but not email addresses. Wiley Rein LLP objected to the proposed amendments as impracticable, particularly in instances where petitioning firms and U.S. importers are competitors. While acknowledging that the proposed amendments are generally sensible, Stewart and Stewart LLP urged the Commission to require parties to provide such information only when it is “reasonably available.”

We adopt the proposed amendments to § 207.11(b)(2)(ii) and (iii) as drafted in the NOPR. We are mindful that the objective of the proposals is to facilitate the electronic distribution of questionnaires. Under the proposed amendments, email addresses for individual contact persons are required only for domestic producers, which petitioners should be readily able to obtain. For importers, there is no requirement to provide email addresses for an individual contact person; instead, a general corporate email account is sufficient, which petitioners should be readily able to obtain. Moreover, as under § 207.11(b)(3), petitioners need not provide information that they can certify is not reasonably available to them.

The NOPR proposed to amend § 207.11(b)(2)(v) by requiring that petitioners provide the email address, street address, city, state, and 5-digit zip code for each purchaser/contact with respect to each lost sales or lost revenue allegation. Only Wiley Rein LLP commented on this proposal. It asserted that the Commission's current approach to investigating lost sales and lost revenues allegations is overly rigid and that the proposed amendment will only further increase the number of lost sales or lost revenue allegations that go uninvestigated.

We adopt the proposed amendment as drafted in the NOPR. It is not true that Commission staff will not investigate lost sales/lost revenues investigations unless each element of the requested contact information is provided. If no contact information is provided for a purchaser, Commission staff will be unable to investigate the allegation. If some information is provided, Commission staff will make reasonable efforts to investigate the allegation in light of available resources. While there may be valid concerns with easing the burden of the process by which lost sales and lost revenue allegations are actually verified by the Commission, it is important to keep in mind that this amendment is designed to facilitate the Commission staff's ability to contact purchasers concerning transmission of lost sales and lost revenue allegations in the first instance. Since email is now the most common means of corporate contact, requiring petitioners to provide email addresses for purchasers is no more burdensome than requiring petitioners to provide phone contact information. Also, under § 207.11(b)(3), petitioners currently are not required to provide information that they can certify is not reasonably available to them. Consequently, contact information that is not reasonably available need not be furnished by petitioners if the required certification is provided.

The NOPR also proposed to amend § 207.11(b)(2)(v) by requiring that petitioners file any lost sales or revenue allegation(s) identified in the petition via a separate electronic data entry process in a manner to be specified in the Commission's Handbook on Filing Procedures. Only Wiley Rein LLP commented on this proposal. While it did not specifically object to the proposed amendment, it cautioned that any electronic filing system for cataloguing lost sales and lost revenue allegations must be secure and flexible enough to permit petitioners to update lost sales and lost revenue allegations throughout the investigation.

We adopt the proposed amendment as drafted in the NOPR. Commission staff is still in the process of examining possible methods for electronic entry of data pertaining to lost sales and lost revenues allegations. Some basic requirements will be specified in the Commission's Handbook on Filing Procedures. As the technology available to the Commission staff evolves, these requirements may be modified.

The Commission has amended the rule to require that nine copies of confidential briefs and witness testimony be filed in preliminary phase investigations. As explained above, this is one of several changes that will better facilitate work by Commission staff while resulting in an overall reduction in the number of paper copies of certain submissions to the Commission. The Commission has considered comments submitted in response to the NOPR objecting to the retention of requirements for filing of paper copies, but as indicated in the adopted amendments to § 201.8, believes retention of these requirements is necessary at this time.

The NOPR proposed to amend paragraph (b) of § 207.20 by requiring that all requests for collecting new information be presented at the draft questionnaire stage in final phase investigations. Wiley Rein LLP objected to the proposed amendment, claiming that the need to collect information may not be apparent until after comments on the draft questionnaires are submitted. While acknowledging that the proposed amendment is sensible, Stewart and Stewart nevertheless argued that where a party comes across some new development or information after comments on the draft questionnaires have been filed and can demonstrate the relevance of this information, the Commission should accept a request to collect the information to ensure it has a complete record.

We adopt the proposed amendment to the rule as drafted in the NOPR. Prior to the final phase questionnaires being issued for comment, there already has been a preliminary phase investigation. With this in mind, parties should be able to ascertain, either from their participation in the preliminary phase investigation or their review of the record, what the contested issues in a final phase investigation are likely to be and the types of additional data that should be gathered. While we appreciate the concerns expressed by the commenters, it is important to remember that the rule is not an absolute bar from making subsequent information requests, but permits such requests to be made when there is a compelling need for the information and when the information could not have been requested in the comments on draft questionnaires.

The Commission has amended the rule to require that nine copies of confidential prehearing briefs be filed in final phase investigations. As explained above, this is one of several changes that will facilitate work by Commission staff while resulting in an overall reduction in the number of paper copies of certain submissions to the Commission. The Commission has considered comments submitted in response to the NOPR objecting to the retention of requirements for filing of paper copies, but as indicated in the adopted amendments to § 201.8, believes retention of these requirements is necessary at this time.

The Commission has amended the rule to require that nine copies of posthearing briefs be filed in final phase investigations. As explained above, this is one of several changes that will facilitate work by Commission staff while resulting in an overall reduction in the number of paper copies of certain submissions to the Commission. The Commission has considered comments submitted in response to the NOPR objecting to the retention of requirements for filing of paper copies, but as indicated in the adopted amendments to § 201.8, believes retention of these requirements is necessary at this time.

The Commission has amended the rule to require that nine copies of written submissions concerning anticircumvention matters be filed in final phase investigations. As explained above, this is one of several changes that will facilitate work by Commission staff while resulting in an overall reduction in the number of paper copies of certain submissions to the Commission. The Commission has considered comments submitted in response to the NOPR objecting to the retention of requirements for filing of paper copies, but as indicated in the adopted amendments to § 201.8, believes retention of these requirements is necessary at this time.

The Commission has amended the rule to require the filing of nine copies of comments on information disclosed to the parties after they have filed their posthearing brief pursuant to § 207.25. As explained above, this is one of several changes that will facilitate work by Commission staff while resulting in an overall reduction in the number of paper copies of certain submissions to the Commission. The Commission has considered comments submitted in response to the NOPR objecting to the retention of requirements for filing of paper copies, but as indicated in the adopted amendments to § 201.8, believes retention of these requirements is necessary at this time.

The NOPR proposed to amend paragraph (d) of § 207.45 by extending the deadline currently specified in the rule for instituting changed circumstance reviews from 30 days to 45 days, and extending the deadline from 120 days to 180 days for completing changed circumstance reviews. None of the comments addressed this specific proposal. Accordingly, we adopt the proposed amendment to the rule as drafted in the NOPR.

The Commission has amended the rule to require that nine copies of responses to the notice of institution be filed in five-year reviews. As explained above, this is one of several changes that will facilitate work by Commission staff while resulting in an overall reduction in the number of paper copies of certain submissions to the Commission. The Commission has considered comments submitted in response to the NOPR objecting to the retention of requirements for filing of paper copies, but as indicated in the adopted amendments to § 201.8, believes retention of these requirements is necessary at this time.

The Commission has amended the rule to require that nine copies of comments on adequacy be filed in five-year reviews. As explained above, this is one of several changes that will facilitate work by Commission staff while resulting in an overall reduction in the number of paper copies of certain submissions to the Commission. The Commission has considered comments submitted in response to the NOPR objecting to the retention of requirements for filing of paper copies, but as indicated in the adopted amendments to § 201.8, believes retention of these requirements is necessary at this time.

The Commission has amended the rule to require that nine copies of prehearing briefs be filed in five-year reviews. As explained above, this is one of several changes that will facilitate work by Commission staff while resulting in an overall reduction in the number of paper copies of certain submissions to the Commission. The Commission has considered comments submitted in response to the NOPR objecting to the retention of requirements for filing of paper copies, but as indicated in the adopted amendments to § 201.8, believes retention of these requirements is necessary at this time.

The Commission has amended the rule to require that nine copies of posthearing briefs and statements be filed in five-year reviews. As explained above, this is one of several changes that will facilitate work by Commission staff while resulting in an overall reduction in the number of paper copies of certain submissions to the Commission. The Commission has considered comments submitted in response to the NOPR objecting to the retention of requirements for filing of paper copies, but as indicated in the adopted amendments to § 201.8, believes retention of these requirements is necessary at this time.

The Commission has amended the rule to require that nine copies of final comments be filed in five-year reviews. As explained above, this is one of several changes that will facilitate work by Commission staff while resulting in an overall reduction in the number of paper copies of certain submissions to the Commission. The Commission has considered comments submitted in response to the NOPR objecting to the retention of requirements for filing of paper copies, but as indicated in the adopted amendments to § 201.8, believes retention of these requirements is necessary at this time.

For the reasons stated in the preamble, 19 CFR parts 201 and 207 are amended as set forth below:

We are making final, with further clarification regarding our good cause exception, the proposed NPRM that we published in the Federal Register on June 27, 2013. 1 As we discussed in the preamble to the NPRM, our workloads at the administrative law judge (ALJ) hearing level continue to grow, and we are implementing final rules that will help us provide better service by allowing us to conduct hearings and issue decisions more expeditiously.

As we explained in the NPRM, we have conducted hearings by video teleconferencing since 2003. Over the last decade, we found that hearings held by video teleconferencing help reduce our average processing time, reduce travel expenses, and allow us to better serve the public. Therefore, we have continued to improve our video teleconferencing capabilities, added five National Hearing Centers that hold hearings exclusively by video teleconferencing, and increased the number of ALJs in traditional hearing offices who hold hearings by video teleconferencing.

However, we reiterate in these final rules that while we have taken significant strides in increasing our video teleconferencing capacity, we remain concerned that some individuals are manipulating our rules in order to obtain a hearing with an ALJ with a higher allowance rate. As we previously noted, this may be an unintended consequence of our commitment to transparency as we make more information, such as an ALJ's allowance rates, available to claimants and their representatives. Until the effective date of this final rule, these types of efforts to undermine the random assignment of ALJs have generally been successful. Our business process has been to reschedule a hearing if the claimant, or a representative on a claimant's behalf, objected to appearing by video teleconferencing at any time before or at the hearing, or to transfer a case if a claimant indicated he or she moved closer to another hearing office.

Our continued concerns about efforts to undermine our rules are not merely anecdotal. At the time of this final rule, we brought and pursued sanction actions against an appointed representative for misrepresenting facts in order to have cases transferred to a hearing office with a higher allowance rate. We have observed some individuals decline hearings by video teleconferencing after learning that the claimant is scheduled to appear before an ALJ with a lower allowance rate. We have observed other questionable conduct that, while not necessarily constituting misconduct often delays the processing of cases and prevents the use of video teleconferencing technology in certain offices. We continue to receive declinations less than 20 days  2 before the date the hearing, resulting in the loss of the hearing slot that we could have used to hold a hearing for another claimant. Finally, when we receive a declination for a hearing by video teleconferencing after the hearing has been scheduled; we must use additional administrative resources to reschedule a hearing at a time and place amenable to all hearing participants. For these types of reasons, a change to our current process was necessary.

In this final rule, before we assign an ALJ to the case or before we schedule a hearing, we will notify a claimant that he or she has the right to object to appearing at the hearing by video teleconferencing. If the claimant objects to appearing at the hearing by video teleconferencing, the claimant must tell us in writing within 30 days after the date he or she receives the notice, unless he or she shows good cause for missing the deadline. If we receive a timely objection, or we find there was good cause for missing the deadline, we will schedule the claimant for an in person hearing, with one limited exception. If a claimant moves to a different residence while his or her request for a hearing is pending, we will determine whether the claimant will appear in person or by video teleconferencing, even if the claimant previously objected to appearing by video teleconferencing. In addition, in order for us to consider a change in residence when scheduling a hearing, the claimant must submit evidence verifying a new residence. After we receive evidence regarding the claimant's new residence, we will decide how the claimant's appearance will be made. This limited exception to the rule allows us to protect the integrity of our programs while providing us with the flexibility to transfer cases when there is a legitimate change in residence and we can process the case more efficiently.

In these final rules, we also specified the time period for objecting to the time and place of a hearing. To ensure that we have adequate time to prepare for the hearing, we require that a claimant notify us of an objection in writing at the earliest possible opportunity, but not later than 5 days before the date set for the hearing or, if earlier, 30 days after receiving notice of the hearing. If the claimant objects to the time and place of the hearing outside of the specified time period and fails to attend the hearing, the ALJ will follow existing sub-regulatory authority to develop good cause for failure to appear. We also adopted other minor revisions in the final rules to clarify when we will reschedule a hearing for good cause. For instance, we removed the example that a claimant might offer living closer to another hearing site as a good cause reason to object to the time and place of the hearing.

To further reduce the need to reschedule hearings and to improve our efficiency, we provide that the ALJ may determine that extraordinary circumstances exist to schedule the claimant, or any other party to the hearing, to appear at the hearing by telephone. For example, an ALJ will direct a claimant or other party to the hearing to appear by telephone when the person's appearance in person is not possible, such as when the person is incarcerated, the correctional facility will not allow a hearing to be held at the facility, and video teleconferencing is not available. The flexibility in the final rule allows us to continue the practice of scheduling a hearing by telephone when the claimant specifically requests a hearing in this manner, and the ALJ determines that extraordinary circumstances prevent the claimant or other party who makes the request from appearing at the hearing in person or by video teleconferencing.

As we noted in the NPRM, we spend significant administrative resources arranging in person hearings with officials of correctional facilities. It also reduces our productivity when an ALJ travels to a confinement facility to hold one or two hearings rather than conducting a full hearing docket. These final rules will save administrative resources and allow us to provide more timely hearings to all claimants because the ALJ will be present in the hearing office to conduct a full hearing docket.

In the final rule, we adopted several changes to Part 405 for consistency with the rules in Parts 404 and 416. We adopted changes relating to video teleconferencing and hearing appearances by telephone in extraordinary circumstances, as described above. For consistency with our pilot program  3 in all regions except Boston, we also adopted changes allowing the agency, rather than the ALJ, to set the time and place for hearing.

In the NPRM, we provided a 60-day comment period, which ended on August 26, 2013. We carefully considered the 13 public comments we received. Because some of the comments were lengthy, we summarize them below. We present the commenters' concerns and suggestions and respond to the significant issues relevant to this rulemaking. We do not respond to comments, or portions of comments, that are outside the scope of this rulemaking proceeding.

Comment: One commenter indicated that ALJs will not be able to adequately see and observe claimants if they were scheduled to appear via video teleconferencing. Another commenter argued that it is unfair if claimants have to wait longer for in-person hearings. Both commenters essentially argued that hearings held by video teleconferencing violate claimants' due process rights.

Response: We disagree with the concerns raised in these comments. First, it is important to reiterate that under these final rules claimants will generally continue to have the right to appear in person at a scheduled hearing if they timely object to appearing via video teleconferencing. Furthermore, our regulations have allowed claimants to appear via video teleconferencing at our hearings since 2003. 4 In our experience holding hearings by video teleconference, we have found that ALJs are able to observe a claimant adequately. As our resources permit, we continue to improve our video teleconferencing equipment for hearings, and we manage cases as effectively as possible to provide claimants hearings in the timeliest method available.

We also disagree with the commenters' concerns that a hearing held by video teleconferencing can adversely affect a claimant's right to due process. A number of Federal courts have held that hearings conducted via video teleconferencing adequately protect a claimant's due process rights. 5 Thus, claimants who appear at the hearing by video teleconferencing receive due process, regardless of the wait time for an in-person hearing or the use of video teleconferencing equipment.

Comment: Two commenters recommended that the first option should be to schedule in person hearings. If the claimant cannot attend the scheduled hearing, then the commenters suggested that, rather than opting out, the claimant should be able to request to appear via telephone or video teleconferencing. One commenter noted this was a concern for claimants who are homeless.

Response: As discussed above, under these final rules claimants will continue to have the right to appear in person at a scheduled hearing if they timely object to appearing via video teleconferencing, unless an exception exists. Since our agency began using the video teleconferencing process for hearings, claimants have been required to opt out of appearing at a hearing via video teleconferencing, and this process has operated efficiently for us over the last 10 years. Requiring claimants to opt into appearing at a hearing via video teleconferencing could potentially delay scheduled hearings, create additional staff work, and cost us valuable resources. This would likely result in diminished overall public service, especially to claimants who have critical cases, including homeless claimants. Furthermore, we anticipate holding a small number of hearings via telephone because our final rules provide that we will schedule a claimant to appear via telephone only when the claimant's appearance in person is not possible, or if the ALJ determines that extraordinary circumstances prevent the claimant or another party from appearing at the hearing in person or by video teleconferencing. Therefore, these final rules continue to give the claimant the option to appear in person, except in limited circumstances, while balancing our needs for administrative efficiency.

Comment: Several commenters raised a concern about the limited exception to the right to decline a hearing by video teleconferencing. Under the proposed rules, we retained the right to schedule claimants to appear at the hearing via video teleconferencing if they change residence while the case is pending, even if they have timely objected to appearing by video teleconferencing. The commenters noted that many claimants have legitimate reasons to move, often involving financial hardships, and the reason a claimant requests an in-person hearing does not change when they move.

Response: We agree that most claimants have legitimate reasons for changing residences; however, as noted in the preamble of the NPRM (78 FR at 38611), and reiterated in this final rule, we are concerned that some claimants or their appointed representatives may be misusing our procedures regarding a change in residence to undermine the random assignment of cases to our ALJs. We are aware of situations in which a representative instructed claimants to report a change of address, which was not a change of residence, so that cases would be reassigned to a different hearing office with higher allowance rates. As a result of such practices, we must have a means to ensure the integrity of our program.

We anticipate that we will apply this exception infrequently. For example, one of the commenters expressed concern that we should not apply the exception if a claimant moves within the same servicing area after an in-person hearing is scheduled. These final rules give us discretion to address this concern. Since the claimant would not be trying to gain an advantage by changing residence address, and the same hearing office would process the case, we would not expect the ALJ assigned to the case to apply the exception. In another example, if a claimant changes residences to a different servicing area, there is no additional delay to schedule the claimant to appear in person at the hearing, and we have no indication that the claimant is attempting to manipulate the assignment of the case to another ALJ, then we would use our discretion to schedule the hearing in person, in accordance with the claimant's initial objection. Therefore, we have not deleted the exception we proposed, as some of the commenters requested. Under these final rules, we continue to include a limited exception that would allow us to schedule claimants to appear at the hearing via video teleconferencing if they change residence while the case is pending, even if they have timely objected to appearing by video teleconferencing.

Comment: One commenter indicated that the proposed regulations allowing a claimant to opt out of a hearing held by video teleconferencing within 30 days of a notice, in most instances, should be more aggressive. The commenter suggested that claimants should not have the right to object to appearing at hearings via video teleconferencing.

Response: We disagree with this comment. As explained above, we have allowed claimants to request an in-person hearing since we began the video teleconferencing program in 2003. The commenter's suggestion to eliminate any possibility for opting out of appearing at a hearing via video teleconferencing would not be consistent with our prior practice or, even further, allow us to accommodate an in-person hearing when it would result in more timely and efficient case adjudication. Therefore, we have determined that we will continue to allow claimants to opt out of appearing at a hearing via video teleconferencing if they timely object to appearing by video teleconferencing. The change we are making in these rules allows us to balance claimants' needs for adequate time to make an informed decision about how to appear at hearing with our needs for program integrity and administrative efficiency.

Comment: Another commenter suggested that appointed representatives should be able to appear via telephone or video teleconferencing and in a different location than the claimants they represent. The commenter also indicated that representatives should be allowed to have video teleconferencing equipment in their offices.

Response: We do not need to revise these rules in response to the commenter's suggestion because we already have in place a mechanism similar to what the commenter requested. In 2008, we developed and began using an agency initiative, the Representative Video Project (RVP) that authorizes representatives to use their own video teleconferencing equipment for video hearings under certain circumstances. The RVP provides efficient and cost effective methods for conducting hearings. Under the RVP initiative, the claimant and his or her representative must both appear from the same representative-owned video teleconferencing site except in instances where the ALJ determines that it is in the best interest of the claimant to permit the claimant and his or her appointed representative to appear from separate locations.

Comment: One commenter recommended a handout guide of the agency's business process when claimants opt out of appearing at a hearing via video teleconferencing. A sample guide was included with the comment. The commenter agreed with the proposed regulations regarding the time period to object to a hearing by video teleconferencing and suggested business process revisions to implement the final rules.

Response: We considered the comment and the work the commenter put into creating the guide. Once these final rules are published, we will update our sub-regulatory authority and business processes to be consistent with the rules, and we will consider whether any other resource for the public may be necessary.

Comment: One commenter questioned whether the specific hearing office would be listed on the notice sent to claimants indicating that they have 30 days to object to a hearing held via video teleconferencing. The commenter, who was a representative, indicated concern about practicing before unfamiliar hearing offices.

Response: We considered this concern, and we may or may not include specific hearing office addresses on notices to claimants about their right to request an in-person hearing within the required time period. Regardless of whether hearing office addresses are included, we operate a nationwide program at the hearing level, and all hearing offices follow the same regulations, policies, and procedures. 6 Therefore, representatives can effectively represent claimants at any hearing office. We note that ALJs have some limited variances in how they manage their cases, including requesting pre-hearing briefs. Under this process, we will continue to provide representatives with prior notice of the name of the ALJ assigned to a hearing and will continue to provide in advance any specific instructions from the ALJ that may affect how a representative prepares his or her case. We note that this same potential for minor variances among ALJs currently exists in individual hearing offices. Thus, the final rules do not significantly affect how a representative practices before us.

Comment: Multiple commenters raised the concern that there was no “good cause” exception for extending the 30-day time period to object to appearing at the hearing via video teleconferencing or to object to the time and place of the hearing.

Response: We agree with these commenters. There may be legitimate instances when a claimant may not be able to object to appearing at a hearing via video teleconferencing or to the time or place of hearing within the stated time period, including, but not limited to, serious illness or death in the family. Consistent with our other regulations that provide a good cause exception to filing deadlines, we revised the final rules to allow the ALJ to determine whether the claimant had good cause to file an objection outside the time period specified to object to appearing at a hearing via video teleconferencing or to the time and place of a hearing. The final rules state that ALJs will use the standard for good cause set forth in our current regulations at 20 CFR 404.911, 405.20, and 416.1411 to evaluate these late filings.

Comment: One commenter suggested that the proposed regulation allowing for a 5-day time period for objecting to the time and place of the hearing was too short. The commenter suggested the period should be longer.

Response: We considered this comment, but we disagree with it. The final rules provide that claimants must notify us in writing that they object to the time and place of the hearing at the earliest possible opportunity, but not later than 5 days before the date set for the hearing or 30 days after receiving notice of the hearing, whichever is earlier. In fiscal year 2012, we averaged scheduling hearings nationwide at least 60 days in advance. With this advance scheduling, most claimants will be required to object 30 days after receiving notice of the hearing, which allows us sufficient time to reschedule the hearing. In the limited circumstances where we schedule claimants' hearing between 20 to 35 days prior to the hearing, we need to allow claimants adequate time to consider whether they will object to the time and place of the hearing that may cause the hearing to be rescheduled at a later time. The final rules address both scenarios and give claimants adequate time to decide if they are going to object to the time and place of their hearing.

Comment: Several commenters recommended that we should retain living closer to another hearing site as a reason for to find good cause to change the time and place of a hearing. The commenters noted that it might be more difficult for a claimant to travel to another office that is further away from his or her residence.

Response: We disagree with the concerns raised in these comments. As noted previously, we are concerned that claimants or their appointed representatives may be misusing our procedures regarding a change in residence to undermine the random assignment of cases to our ALJs. We need to protect the integrity of our program and ensure that ALJs only reschedule a hearing for good cause. It may be appropriate, in some instances, for ALJs to determine that good cause exists to change the time and place of a hearing based on the claimant's residence. However, removing this reason makes the final rules more consistent and protects the integrity of our programs.

Comment: Multiple commenters noted that more limits were necessary on the use of telephone hearings. Specifically, commenters recommended that claimants should be able to object to appearing by telephone. They raised concerns about claimants or representatives who have hearing impairments and whether we will make reasonable accommodations in these situations.

Response: We considered these concerns. However, the final rules make clear that an ALJ will direct a claimant's appearance by telephone under two limited circumstances. First, an ALJ will direct a claimant to appear by telephone when the claimant's appearance in person is not possible, such as if the claimant is incarcerated, the facility will not allow a hearing to be held at the facility, and video teleconferencing is not available. Second, an ALJ will direct a claimant to appear by telephone if the ALJ determines, either on his or her own initiative, or at the request of the claimant or another party, that extraordinary circumstances prevent the claimant from appearing in person or by video teleconferencing.

Since an ALJ will direct a claimant's appearance by telephone only under certain limited circumstances, we do not believe it is necessary or appropriate to provide the claimant with an opportunity to object to the mode of this appearance. However, we will use this provision on a limited basis, and its goal is to promote efficiency of hearings. We believe the policy is consistent with our goal of making the hearing process more efficient for claimants because appearing by telephone will allow claimants to have their hearings before an ALJ in the shortest possible time period.

Claimants who are scheduled to appear by telephone will receive the same due process rights currently available to all claimants. This includes the right to object to the time or place of hearing under 20 CFR 404.936(d), 405.317, and 416.1436(d), which have been revised accordingly. Regardless of the mode of appearance, we will also continue to make reasonable accommodations for all claimants and representatives. Therefore, we will adequately protect a claimants' rights without placing additional limitations on our ability to schedule a claimant's appearance at a hearing by telephone.

We consulted with the Office of Management and Budget (OMB) and determined that these final rules meet the requirements for a significant regulatory action under Executive Order 12866 as supplemented by Executive Order 13563. Thus, OMB reviewed these final rules.

We certify that these final rules will not have a significant economic impact on a substantial number of small entities because they only affect individuals. Accordingly, a regulatory flexibility analysis as provided in the Regulatory Flexibility Act, as amended, is not required.

These final rules contain public reporting requirements in the regulation sections listed below. We are seeking approval for these regulation sections and for a new SSA form, which we will use to collect the information required by these sections. Below we provide burden estimates for the public reporting requirements.

SSA submitted an Information Collection Request for clearance to OMB. We are soliciting comments on the burden estimate; the need for the information; its practical utility; ways to enhance its quality, utility, and clarity; and ways to minimize the burden on respondents, including the use of automated techniques or other forms of information technology. If you would like to submit comments, please send them to the following locations:

You can submit comments until July 25, 2014, which is 30 days after the publication of this rule. To receive a copy of the OMB clearance package, contact the SSA Reports Clearance Officer using any of the above contact methods. We prefer to receive comments by email or fax.

For the reasons set out in the preamble, we are amending 20 CFR chapter III, parts 404, 405, and 416, as set forth below:

The executive order governing classification of national security information, E.O. 12958, has been superseded by E.O. 13526, effective December 29, 2009. In Section 1.4, the new order makes some minor changes in classification categories, such as eliminating reference to transnational terrorism and adding a qualifier to the term “weapons of mass destruction.” That section also requires that the damage to national security be identifiable and describable. These changes are reflected in Section 9.4 of the rule.

While the basis for classification and the classification levels in E.O. 13526 are basically the same as those in predecessor orders, the new executive order contains several provisions not present in its immediate predecessors, such as the training of classifiers, particularly derivative classifiers (not covered in this rule); and, in Section 4.1(i)(1), the sharing with another agency, with certain U.S. entities, or with foreign governments of classified information that was originated by another agency after the effective date of the executive order (covered in Section 9.12 of the rule). Section 4.4 of the new executive order changes a limitation in E.O. 12958 on access to classified information by former government personnel but adds a limitation that the positions that they held be senior government positions. These changes are included in Section 9.13 of this rule. This section is among several from 22 CFR Part 171 pertaining to declassification that have been transferred to Part 9 and revised.

Administrative Procedure Act. The Department of State is publishing this rulemaking as a final rule. 5 U.S.C. 553(b)(B) provides that a “general notice of proposed rulemaking” need not be published in the Federal Register “when the agency for good cause finds (and incorporates the finding and a brief statement of reasons therefor in the rules issued) that notice and public procedure thereon are impracticable, unnecessary, or contrary to the public interest.” The Department of State finds good cause to issue this rule without advance notice and public comment because it has determined such procedures are unnecessary. As we note above, this rulemaking incorporates into existing Department regulations the provisions of Executive Order 13526. The Executive Order is a directive that must be implemented throughout the executive branch without significant modification; otherwise, there could be significant confusion among the public, when different agencies adopt different classification standards. Because of this, the Department determined that soliciting public comment was unnecessary.

In addition, this rulemaking involves matters of internal Department management and organization; specifically, the internal procedures for the classification and handling of classified national security information; therefore, the Department has determined that this rulemaking is exempt from notice-and-comment requirements under 5 U.S.C. 553(a)(2). Finally, the Department has determined that this final rule should be effective immediately pursuant to 5 U.S.C. 553(d)(3). The Department finds “good cause” in the need to immediately align the Department's national security regulations with those of the White House and other agencies, thus eliminating the confusion that might be caused by conflicting regulations in such a sensitive area.

Regulatory Flexibility Act. Since the Department is not required to publish a general notice of proposed rulemaking for this rulemaking, a Regulatory Flexibility Analysis is not required.

Unfunded Mandates Act of 1995. This rule will not result in the expenditure by State, local, and tribal governments, in the aggregate, or by the private sector, of $100 million or more in any year and it will not significantly or uniquely affect small governments. Therefore, no actions were deemed necessary under the provisions of the Unfunded Mandates Reform Act of 1995.

Information Quality Act. The Department intends to disseminate information under this rulemaking in compliance with the Information Quality Act, Public Law 106-554, and the Department of State Information Quality Guidelines, dated October 1, 2002, located at http://www.state.gov/misc/13864.htm .

Congressional Review Act. This rule is not a major rule as defined by the Congressional Review Act, 5 U.S.C. 804. This rule will not result in an annual effect on the economy of $100 million or more; a major increase in costs or prices; or significant adverse effects on competition, employment, investment, productivity, innovation, or on the ability of United States-based companies to compete with foreign based companies in domestic and import markets. The rule is being submitted to both Houses of Congress and the Comptroller General. Since it is not a major rule, the proposed effective date is the date of publication.

Executive Orders 12866 and 13563. Executive Order 12866 directs agencies to assess the costs and benefits of available regulatory alternatives and, if regulation is necessary, to select regulatory approaches that maximize net benefits (including potential economic, environmental, public health and safety effects, distributive impacts, and equity). Executive Order 13563 emphasizes the importance of quantifying both costs and benefits, of reducing costs, of harmonizing rules, and of promoting flexibility. This rule has been designated a “significant regulatory action” although not economically significant, under section 3(f) of Executive Order 12866. Accordingly, the rule has been reviewed by the Office of Management and Budget. This rule imposes no additional costs on the public or on the Department of State, and provides the benefit of providing additional clarity for the public and Department personnel with respect to Executive Order 13526 and its effect on Department regulations, thus eliminating the confusion that might be caused by conflicting regulations in such a sensitive area.

Executive Order 12988—Civil Justice Reform. The Department has reviewed this regulation in light of sections 3(a) and 3(b)(2) of Executive Order 12988 to eliminate ambiguity, minimize litigation, establish clear legal standards, and reduce burden.

Executive Order 13563—Periodic Review of Existing Significant Regulations. The Department has considered this rule in light of Executive Order 13563, dated January 18, 2011, and affirms that this regulation is consistent with the guidance therein.

Executive Orders 12372 and 13132—Federalism. This regulation will not have substantial direct effects on the States, on the relationship between the national government and the States, or on the distribution of power and responsibilities among the various levels of government. Therefore, in accordance with section 6 of Executive Order 13132, it is determined that this rule does not have sufficient federalism implications to require consultations or warrant the preparation of a federalism summary impact statement. The regulations implementing Executive Order 12372 regarding intergovernmental consultation on Federal programs and activities do not apply to this regulation.

Executive Order 13175—Consultation and Coordination With Indian Tribal Governments. The Department has determined that this rulemaking will not have tribal implications, will not impose substantial direct compliance costs on Indian tribal governments, and will not pre-empt tribal law. Accordingly, the requirements of Executive Order 13175 do not apply to this rulemaking.

National Environmental Policy Act. The Department has analyzed this regulation for the purpose of the National Environmental Policy Act of 1969 (42 U.S.C. 4321-4347) and has determined that it will not have any effect on the quality of the environment.

Paperwork Reduction Act. This rule does not impose or revise any reporting or record-keeping requirements subject to the Paperwork Reduction Act, 44 U.S.C. Chapter 35.

The general provisions of the 2014 Appropriations Act  1 include five statutory changes to the United States Housing Act of 1937 (42 U.S.C. 1437 et seq. ) (1937 Act) that are designed to reduce administrative burdens on PHAs, enable PHAs to better target assistance to families in need of such assistance, and reduce Federal costs. 2 Expediting the implementation of these provisions through notice will help PHAs to benefit from the changes in the law sooner than if implementation was accomplished solely through public rulemaking. The only statutory change that is applicable to multifamily project-based section 8 programs is the added definition of “extremely low-income” in section 238. For all other statutory changes, the changes provided in this notice apply only to the public housing and section 8 voucher programs.

Section 212 of the 2014 Appropriations Act amends the definition of a PHA to include a consortium of such entities.

Section 220 allows PHAs to comply with the requirement to inspect assisted dwelling units during the term of a housing assistance payment (HAP) contract by conducting biennial housing quality inspections instead of annual inspections. PHAs are also able to utilize alternative inspection methods to demonstrate that housing meets the housing quality requirements under the voucher program.

Section 238 creates a statutory definition of “extremely low-income families,” which is defined as very low-income families whose incomes do not exceed the higher of the Federal poverty level or 30 percent of Area Median Income.

Section 242 establishes a cap on the utility allowance for families leasing oversized units. The cap is set at an amount based on family size rather than the size of the unit leased, with the ability to set a higher amount to provide a reasonable accommodation to the family of a person with disabilities, harmonizing the utility allowance standard with the payment standard requirement.

In order to allow PHAs to receive, as quickly as possible, the benefit of the reduced burden that these provisions are designed to achieve, the 2014 Appropriations Act authorizes HUD to implement the changes through notice, provided that HUD follows with notice and comment rulemaking within six months of the issuance of the notice.

Section 212 of the 2014 Appropriations Act amends the definition of “public housing agency” at subparagraph (A) of section 3(b)(6) of the 1937 Act (42 U.S.C. 1437a(b)(6)(A)) to include in its general definition “a consortium of such entities or bodies as approved by the Secretary.” PHAs may follow 24 CFR part 943 to form, participate in, and utilize consortia. PHAs may request a waiver of any current provision related to consortium organization, elements of the agreement, the relationship between HUD and the consortium, and the responsibilities of the consortium.

The Secretary will not approve any consortium of PHAs for administration of multifamily project-based section 8 program contracts.

Section 220 of the 2014 Appropriations Act allows PHAs to comply with the requirement to inspect assisted dwelling units during the term of a HAP contract by inspecting such units not less than biennially instead of annually and to rely upon alternative inspection methods to meet this requirement. However, a PHA may not use the alternative inspection method in lieu of the initial unit or any interim inspection. PHAs are still required to conduct an initial inspection, prior to entering into a HAP contract, and interim inspections, if a family or government official notifies the PHA of a unit's failure to comply with housing quality standards, in accordance with the housing quality standards (HQS) of the HCV program.

In order to bring relief to PHAs and owners as expeditiously as possible, HUD is implementing certain elements of section 220 through this notice in a somewhat limited fashion. HUD recognizes that fuller implementation of these elements (e.g., the use of alternative inspection methodologies and the treatment of mixed-finance properties) may necessitate additional complexity and certain trade-offs, and that HUD will greatly benefit from stakeholder input on how best to effectuate these statutory changes through the rulemaking process.

Section 220 will be immediately effective for any unit under HAP contract where the PHA has conducted an HQS inspection within the 12 months preceding the effective date of this notice. If a PHA has conducted an HQS inspection in that time period, the PHA will not be required to re-inspect until the lapse of 24 months following their last inspection. If the most recent inspection occurred prior to the 12 months preceding the effective date of this notice, then the PHA is required to conduct an annual HQS inspection for that unit and is afforded no relief from that annual inspection responsibility as a result of the change in the law. However, once that unit has been inspected, the PHA will then have the option to wait up until two years before the next inspection is required.

This notice does not require a PHA to wait two years from the last inspection before conducting an inspection. If a PHA desires to make inspections on a more frequent basis, it may do so.

Currently, HUD's Section 8 Management Assessment Program (SEMAP) evaluates PHAs on the frequency with which they conduct inspections. HUD will score PHAs based on their compliance with the statutory requirement that they conduct inspections at least biennially.

A PHA may comply with the biennial inspection requirement through reliance upon an inspection conducted for another housing assistance program. If a PHA relies on an alternative inspection to fulfill the biennial inspection requirement for a particular unit, then the PHA must identify the alternative standard in its administrative plan. Such a change may be a significant amendment to the plan, in which case the PHA must follow its PHA plan amendment and public notice requirements before utilizing the alternative inspection method.

Compliance with the biennial inspection requirement may be met by reliance upon an inspection of housing assisted under the HOME Investment Partnerships (HOME) program (under Title II of the Cranston-Gonzalez National Affordable Housing Act, 42 U.S.C. 12701 note) or housing financed via the Treasury Department's Low-Income Housing Tax Credit program (LIHTC), taking into account the standards employed by those programs. A PHA may also comply with the biennial inspection requirement by relying upon an inspection performed by HUD, for example an inspection performed by HUD's Real Estate Assessment Center. A PHA is permitted to rely upon inspections conducted for the HOME or LIHTC program or performed by HUD with no action other than amending its administrative plan.

If a PHA wishes to rely upon an inspection conducted to a standard other than a standard listed above, then it must first submit to its local HUD Field Office a certification affirming, under penalty of perjury, that the standard “provides the same or greater protection to occupants of dwelling units meeting such standard or requirement” as would HQS. Once this certification has been submitted, the PHA must amend its administrative plan to formalize its adoption of the standard. A PHA that has chosen to rely upon an alternative inspection method must monitor any changes to the standards and requirements applicable to such method so that the PHA is made aware of any weakening of the method that would cause it to no longer meet or exceed HQS, in which case the PHA may not rely upon such method to comply with the biennial inspection requirement.

The statute makes clear that, in order for an inspection to qualify as an “alternative inspection method,” a property inspected pursuant to such method must “meet the standards or requirements regarding housing quality or safety” applicable to properties assisted under the program that employs the alternative inspection method (e.g., HOME, LIHTC). For purposes of this notice, HUD is implementing this statutory element as follows:

• If a property is inspected under an alternative inspection method, and the property receives a “pass” score, then the PHA may rely on that inspection to demonstrate compliance with the biennial inspection requirement.

• If a property is inspected under an alternative inspection method, and the property receives a “fail” score, then the PHA may not rely on that inspection to demonstrate compliance with the biennial inspection requirement.

• If a property is inspected under an alternative inspection method that does not employ a pass/fail determination—for example, in the case of the LIHTC program, where deficiencies are simply noted—then the PHA must review the list of deficiencies to determine whether any cited deficiency would have resulted in a “fail” score under HQS. If no such deficiency exists, then the PHA may rely on the inspection to demonstrate compliance with the biennial inspection requirements; if such a deficiency does exist, then the PHA may not rely on the inspection to demonstrate such compliance.

Under any circumstance described above in which a PHA is prohibited from relying on an alternative inspection methodology, the PHA must conduct an HQS inspection of any units in the property occupied by voucher program participants and follow HQS procedures to remedy any noted deficiencies. The HQS inspection must take place within a reasonable period of time. HUD will solicit input through rulemaking on circumstances under which a PHA could rely upon corrective actions taken under an alternative inspection method to assure that the property is brought into compliance with the standards or requirements regarding housing quality or safety applicable to the alternative inspection method.

As with all other inspection reports, and as required by 24 CFR 982.158(f)(4), reports for inspections conducted pursuant to an alternative inspection method must be retained for at least three years.

If a family or government official reports a condition that is life-threatening (i.e., the PHA would require the owner to make the repair within no more than 24 hours in accordance with 24 CFR 982.404(a)(3)), then the PHA must inspect the housing unit within 24 hours of when the PHA received the notification. If the reported condition is not life-threatening (i.e., the PHA would require the owner to make the repair within no more than 30 calendar days), then the PHA must inspect the unit within 15 days of when the PHA received the notification. In the event of extraordinary circumstances, such as if a unit is within a Presidentially declared disaster area, HUD may waive the 24-hour or the 15-day inspection requirement until such time as an inspection is feasible.

Section 220 gives HUD the authority to alter the frequency of inspections for mixed-finance properties assisted with project-based vouchers to facilitate the use of an alternative inspection method. HUD intends to exercise this authority through the rulemaking process as opposed to this implementation notice. In the interim, a unit under HAP contract must be re-inspected at least biennially, through either the regular inspection process or the alternative inspection method.

Section 238 of the 2014 Appropriations Act amends section 3 of the 1937 Act (42 U.S.C. 1437a) to add a definition of extremely low-income (ELI) families. ELI families are defined as very low-income families whose incomes do not exceed the higher of the Federal poverty level or 30 percent of Area Median Income. This provision affects the ELI targeting requirements in section 16 of the 1937 Act (42 U.S.C. 1437n) for the public housing, housing choice voucher (HCV), project-based voucher (PBV), and multifamily project-based section 8 programs. As of the effective date of this notice, compliance with the targeting requirements under each of these programs must take into account the new definition of ELI.

Beginning with the effective date of this notice, a PHA or HUD, if HUD is the contract administrator, shall meet its targeting requirements through a combination of ELI admissions prior to the effective date (using the old definition) and ELI admissions after the effective date (using the new statutory definition). Neither a PHA nor HUD may skip over a family on the waiting list if that family meets the new definition of ELI as enacted by this section.

For the public housing program, not less than 40 percent of the units that become available per PHA fiscal year must be made available for occupancy by ELI families.

For the HCV and PBV programs, compliance with targeting requirements is determined for each of the PHA's fiscal years based on new admissions to both programs (i.e., a single, combined total). Not less than 75 percent of such admissions shall be ELI families.

For the multifamily project-based section 8 programs, the contract administrator (i.e., HUD or a PHA under an Annual Contributions Contract with HUD) must make available for occupancy by ELI families not less than 40 percent of the section 8-assisted dwelling units that become available for occupancy in any fiscal year.

The following example clarifies how a PHA administering the HCV and PBV programs would comply with this provision: A PHA with a fiscal year end of December 31 shall consider admissions to the HCV and PBV programs from January 1 up until the effective date of this notice using the old definition; from the effective date of this notice through December 31, it shall consider admissions using the new definition. To further illustrate, assume the PHA admitted 50 families into their HCV program between January 1 and the effective date of this notice. Forty families were ELI (under the old definition), 6 families did not meet the old definition of ELI but would have met the new definition of ELI had it been implemented at the time of their admission, and 4 did not meet either definition of ELI. In terms of calculating the ELI targeting requirement for the period of the PHA fiscal year prior to implementation of the change in the ELI definition, only 40 families met the ELI definition with regard to the targeting requirement (not 46). Assume the PHA admitted another 50 families before the end of the PHA fiscal year and 45 of those families met the new definition of ELI. The total number of families that met the ELI requirement for the PHA fiscal year would be 85 (40 plus 45), or 85 percent.

In some communities, the extremely low-income and very low-income levels will be identical for some or all household sizes, in which case PHAs meet their ELI targeting requirements by serving VLI households, since those families meet the new definition of ELI. To reduce the work a PHA or contract administrator must do to determine which standard it should be using, HUD's Office of Policy Development and Research has calculated the new income limits for extremely low-income families, taking the previous sentence into account, and has made the new area income limits available online at http://www.huduser.org/portal/datasets/il/il14/index.html .

Section 242 of the 2014 Appropriations Act limits the utility allowance payment for tenant-based vouchers to the family unit size for which the voucher is issued, irrespective of the size of the unit rented by the family, with an exemption for families with a person with disabilities.

Under section 242, the utility allowance for a family shall be the lower of: (1) The utility allowance amount for the family unit size; or (2) the utility allowance amount for the unit size of the unit rented by the family. However, upon the request of a family that includes a person with disabilities, the PHA must approve a utility allowance higher than the applicable amount if such a higher utility allowance is needed as a reasonable accommodation in accordance with HUD's regulations in 24 CFR part 8 to make the program accessible to and usable by the family member with a disability. This provision applies only to vouchers issued after the effective date of this notice and to current program participants. For current program participants, a PHA must implement the new allowance at the family's next annual reexamination, provided that the PHA is able to provide a family with at least 60 days' notice prior to the reexamination.

The Patient Protection and Affordable Care Act, Public Law 111-148, was enacted on March 23, 2010, and the Health Care and Education Reconciliation Act, Public Law 111-152, was enacted on March 30, 2010. (They are collectively known as the “Affordable Care Act”.) The Affordable Care Act reorganizes, amends, and adds to the provisions of part A of title XXVII of the Public Health Service Act (PHS Act) relating to group health plans and health insurance issuers in the group and individual markets. The term “group health plan” includes both insured and self-insured group health plans. 1 The Affordable Care Act adds section 715(a)(1) to the Employee Retirement Income Security Act (ERISA) and section 9815(a)(1) to the Internal Revenue Code (the Code) to incorporate the provisions of part A of title XXVII of the PHS Act into ERISA and the Code, and to make them applicable to group health plans and health insurance issuers providing health insurance coverage in connection with group health plans. The PHS Act sections incorporated by these references are sections 2701 through 2728.

PHS Act section 2708, as added by the Affordable Care Act and incorporated into ERISA and the Code, provides that a group health plan or health insurance issuer offering group health insurance coverage shall not apply any waiting period (as defined in PHS Act section 2704(b)(4)) that exceeds 90 days. PHS Act section 2704(b)(4), ERISA section 701(b)(4), and Code section 9801(b)(4) define a waiting period to be the period that must pass with respect to an individual before the individual is eligible to be covered for benefits under the terms of the plan. In 2004 regulations implementing the Health Insurance Portability and Accountability Act of 1996 (HIPAA) portability provisions (2004 HIPAA regulations), the Departments of Labor, Health and Human Services (HHS), and the Treasury (the Departments  2 ) defined a waiting period to mean the period that must pass before coverage for an employee or dependent who is otherwise eligible to enroll under the terms of a group health plan can become effective. 3 PHS Act section 2708 does not require an employer to offer coverage to any particular individual or class of individuals, including part-time employees. PHS Act section 2708 prevents an otherwise eligible individual from being required to wait more than 90 days before coverage becomes effective. PHS Act section 2708 applies to both grandfathered and non-grandfathered group health plans and group health insurance coverage for plan years beginning on or after January 1, 2014.

On February 9, 2012, the Departments issued guidance  4 outlining various approaches under consideration with respect to both the 90-day waiting period limitation and the employer shared responsibility provisions under Code section 4980H (February 2012 guidance) and requested public comment. On August 31, 2012, following their review of the comments on the February 2012 guidance, the Departments provided temporary guidance, 5 to remain in effect at least through the end of 2014, regarding the 90-day waiting period limitation, and described the approach they intended to propose in future rulemaking (August 2012 guidance). After consideration of all of the comments received in response to the February 2012 guidance and August 2012 guidance, the Departments issued proposed regulations on March 21, 2013 (78 FR 17313). After consideration of comments on the proposed regulations, the Departments published final regulations on February 24, 2014 (79 FR 10295).

Under the final regulations, a group health plan and a health insurance issuer offering group health insurance coverage may not apply any waiting period that exceeds 90 days. The regulations define “waiting period” as the period that must pass before coverage for an employee or dependent who is otherwise eligible to enroll under the terms of a group health plan can become effective. Being otherwise eligible to enroll in a plan means having met the plan's substantive eligibility conditions (such as, for example, being in an eligible job classification, achieving job-related licensure requirements specified in the plan's terms, or satisfying a reasonable and bona fide employment-based orientation period).

Contemporaneous with the publication of the final regulations, the Departments published proposed regulations (79 FR 10319) to address orientation periods under the 90-day waiting period limitation of PHS Act section 2708 and solicit comment before promulgation of final regulations on this specific issue. The proposed regulations provided that one month would be the maximum allowed length of any reasonable and bona fide employment-based orientation period. The Departments stated that, during an orientation period, they envisioned that an employer and employee could evaluate whether the employment situation was satisfactory for each party, and standard orientation and training processes would begin. Under the proposed regulations, if a group health plan conditions eligibility on an employee's having completed a reasonable and bona fide employment-based orientation period, the eligibility condition would not be considered to be designed to avoid compliance with the 90-day waiting period limitation if the orientation period did not exceed one month and the maximum 90-day waiting period would begin on the first day after the orientation period.

Many commenters were generally supportive of the proposed rule. Commenters agreed that a limitation on the length of an orientation period of one month was appropriate and also agreed with the proposal that determining whether an orientation period is “reasonable” and “bona fide” should be a facts and circumstances analysis. Some commenters urged the Departments to clarify the interplay between the 90-day waiting period provision and the employer shared responsibility provisions.

After consideration of the comments and feedback received from stakeholders, the Departments are publishing these final regulations that incorporate the proposed regulations without any substantive changes.

The final regulations implementing PHS Act section 2708 set forth rules governing the relationship between a plan's eligibility criteria and the 90-day waiting period limitation. Specifically, the final regulations provide that being otherwise eligible to enroll in a plan means having met the plan's substantive eligibility conditions (for example, being in an eligible job classification, achieving job-related licensure requirements specified in the plan's terms, or satisfying a reasonable and bona fide employment-based orientation period). Under the final regulations, after an individual is determined to be otherwise eligible for coverage under the terms of the plan, any waiting period may not extend beyond 90 days, and all calendar days are counted beginning on the enrollment date, including weekends and holidays. 6

Orientation periods are commonplace and the Departments do not intend to call into question the reasonableness of short, bona fide orientation periods. The danger of abuse increases, however, as the length of the period expands. Accordingly, the final regulations provide that one month is the maximum allowed length of an employment-based orientation period. The creation of a clear maximum prevents abuse and facilitates compliance.

During an orientation period, the Departments envision that an employer and employee will evaluate whether the employment situation is satisfactory for each party, and standard orientation and training processes will begin. For any period longer than one month that precedes a waiting period, the Departments refer back to the general rule, which provides that the 90-day period begins after an individual is otherwise eligible to enroll under the terms of a group health plan. While a plan may impose substantive eligibility criteria, such as requiring the worker to fit within an eligible job classification or to achieve job-related licensure requirements, it may not impose conditions that are mere subterfuges for the passage of time.

Under these final regulations, one month would be determined by adding one calendar month and subtracting one calendar day, measured from an employee's start date in a position that is otherwise eligible for coverage. For example, if an employee's start date in an otherwise eligible position is May 3, the last permitted day of the orientation period is June 2. Similarly, if an employee's start date in an otherwise eligible position is October 1, the last permitted day of the orientation period is October 31. If there is not a corresponding date in the next calendar month upon adding a calendar month, the last permitted day of the orientation period is the last day of the next calendar month. For example, if the employee's start date is January 30, the last permitted day of the orientation period is February 28 (or February 29 in a leap year). Similarly, if the employee's start date is August 31, the last permitted day of the orientation period is September 30. If a group health plan conditions eligibility on an employee's having completed a reasonable and bona fide employment-based orientation period, the eligibility condition is not considered to be designed to avoid compliance with the 90-day waiting period limitation if the orientation period does not exceed one month and the maximum 90-day waiting period begins on the first day after the orientation period.

Compliance with these final regulations is not determinative of compliance with section 4980H of the Code, under which an applicable large employer may be subject to an assessable payment if it fails to offer affordable minimum value coverage to certain newly-hired full-time employees by the first day of the fourth full calendar month of employment. For example, an applicable large employer that has a one-month orientation period may comply with both PHS Act section 2708 and Code section 4980H by offering coverage no later than the first day of the fourth full calendar month of employment. However, an applicable large employer plan may not be able to impose the full one-month orientation period and the full 90-day waiting period without potentially becoming subject to an assessable payment under Code section 4980H. For example, if an employee is hired as a full-time employee on January 6, a plan may offer coverage May 1 and comply with both provisions. However, if the employer is an applicable large employer and starts coverage May 6, which is one month plus 90 days after date of hire, the employer may be subject to an assessable payment under Code section 4980H.

These final regulations apply to group health plans and health insurance issuers for plan years beginning on or after January 1, 2015. Until these final rules are applicable, as stated in the preamble to the proposed rules, the Departments will consider compliance with the proposed regulations to constitute compliance with PHS Act section 2708. See 79 FR 10320, 10321 (February 24, 2014).

Executive Order 13563 emphasizes the importance of quantifying both costs and benefits, of reducing costs, of harmonizing and streamlining rules, and of promoting flexibility. It also requires Federal agencies to develop a plan under which the agencies will periodically review their existing significant regulations to make the agencies' regulatory programs more effective or less burdensome in achieving their regulatory objectives.

Under Executive Order 12866, a regulatory action deemed “significant” is subject to the requirements of the Executive Order and review by the Office of Management and Budget (OMB). Section 3(f) of the Executive Order defines a “significant regulatory action” as an action that is likely to result in a rule (1) having an annual effect on the economy of $100 million or more, or adversely and materially affecting a sector of the economy, productivity, competition, jobs, the environment, public health or safety, or State, local or tribal governments or communities (also referred to as “economically significant”); (2) creating serious inconsistency or otherwise interfering with an action taken or planned by another agency; (3) materially altering the budgetary impacts of entitlement grants, user fees, or loan programs or the rights and obligations of recipients thereof; or (4) raising novel legal or policy issues arising out of legal mandates, the President's priorities, or the principles set forth in the Executive Order.

These final regulations are not economically significant within the meaning of section 3(f)(1) of the Executive Order. However, OMB has determined that the actions are significant within the meaning of section 3(f)(4) of the Executive Order. Therefore, OMB has reviewed these final regulations, and the Departments  7 have provided the following assessment of their impact.

As stated earlier in this preamble, these final regulations provide that one month is the maximum allowed length of any reasonable and bona fide employment-based orientation period. The final regulations generally apply to group health plans and group health insurance issuers for plan years beginning on or after January 1, 2015.

The Departments have crafted these final regulations to secure the protections intended by Congress in an economically efficient manner. The Departments lack sufficient data to quantify the regulations' economic cost or benefits. The preamble to the proposed rules implementing PHS Act section 2708, published  8 in the Federal Register on February 24, 2014 provided a qualitative discussion of economic impacts of clarifying the maximum allowed length of any reasonable and bona fide orientation period and requested detailed comment and data that would allow for quantification of the costs, benefits, and transfers associated with the term. The Departments received no comments providing additional data that would help it estimate the economic impacts of the final regulations.

The Departments estimate that 4.1 million new employees receive group health insurance coverage through private sector employers and 1.0 million new employees receive group health insurance coverage through public sector employers annually. 9 The 2013 Kaiser Family Foundation and Health Research and Education Trust Employer Health Benefits Annual Survey (the “2013 Kaiser Survey”) finds that 30 percent of covered workers were subject to waiting periods of three months or more. 10 If 30 percent of new employees receiving health care coverage from their employers are subject to a waiting period of three months or more, then 1.5 million new employees (5.1 million × 0.30) would potentially be affected by these regulations. 11 However, it is unlikely that the survey defines the term “waiting period” in the same manner as the final regulations. For example, the term “waiting period” may have been defined by reference to an employee's start date, not matching the definition in the final regulations.

The final regulations implementing PHS Act section 2708  12 set forth rules governing the relationship between a plan's eligibility criteria and the 90-day waiting period limitation. Specifically, the final regulations provide that being otherwise eligible to enroll in a plan means having met the plan's substantive eligibility conditions (such as, for example, being in an eligible job classification, achieving job-related licensure requirements specified in the plan's terms, or satisfying a reasonable and bona fide employment-based orientation period). These final regulations provide that one month is the maximum allowed length of any reasonable and bona fide employment-based orientation period. This period of no longer than one month is intended to provide plan sponsors with flexibility to continue the common practice of utilizing a probationary or trial period to determine whether a new employee will be able to handle the duties and challenges of the job, while providing protections against excessive waiting periods for such employees. Under these final regulations, the plan's waiting period must begin once the new employee satisfies the maximum one month orientation period requirement and the waiting period may not exceed 90 days.

These final regulations extend the maximum amount of time between an employee beginning work and obtaining health care coverage relative to the time before the issuance of the final regulations implementing PHS Act section 2708 and these final regulations. If employees delay health care treatment until the expiration of the orientation period and waiting period, detrimental health effects could result, especially for low-wage employees and their dependents and those requiring higher levels of health care, such as those with chronic conditions. This could lead to lower work productivity and missed school days. However, the Departments anticipate that such effects may be limited because few employees are likely to be affected and it is anticipated that the inclusion of an orientation period will not result in most employees facing a full additional month between being hired and obtaining coverage.

The possible transfers associated with these final regulations would arise when employers begin to pay their portion of premiums or contributions later than they did before the issuance of these final regulations. Recipients of the transfer would be employers who implement an orientation period in addition to the 90-day waiting period, thus delaying having to pay premiums. The source of the transfers would be covered employees who, after these final regulations become applicable, would have to wait longer between being employed and obtaining health coverage. During this period, affected employees might obtain an individual health insurance policy, purchase COBRA continuation coverage, or forgo health coverage—which could, depending on the policy, have higher out-of-pocket costs for their healthcare expenditures.

The Departments expect these transfers to be minimal because under these final regulations, only a small number of employers would further effectively extend start date for coverage to their employees. That is because a relatively small fraction of workers have waiting periods that exceed three months; this rule does not create an incentive that is not in the system already.

The Regulatory Flexibility Act (5 U.S.C. 601 et seq.) (RFA) applies to most Federal rules that are subject to the notice and comment requirements of section 553(b) of the Administrative Procedure Act (5 U.S.C. 551 et seq.). Unless an agency certifies that such a rule will not have a significant economic impact on a substantial number of small entities, section 603 of the RFA requires the agency to present an initial regulatory flexibility analysis at the time of the publication of the notice of proposed rulemaking describing the impact of the rule on small entities. Small entities include small businesses, organizations and governmental jurisdictions. In accordance with the RFA, the Departments prepared an initial regulatory flexibility analysis at the proposed rule stage and requested comments on the analysis. No comments were received. Below is the Department's final regulatory flexibility analysis and its certification that these final regulations do not have a significant economic impact on a substantial number of small entities.

The Departments carefully considered the likely impact of the rule on small entities in connection with their assessment under Executive Order 12866. The Departments lack data to focus only on the impacts on small business. However, the Departments believe that by providing small businesses with flexibility to design reasonable and bona fide employment-based orientation periods, consistent with the 90-day waiting period limitation set forth in PHS Act section 2708, the final regulations reduce the burden on such businesses to comply with the provision. Based on the foregoing, the Departments hereby certify that these final regulations will not have a significant economic impact on a substantial number of small entities.

For purposes of the Department of the Treasury, it has been determined that this final rule is not a significant regulatory action as defined in Executive Order 12866, as supplemented by Executive Order 13563. Therefore, a regulatory assessment is not required. It has also been determined that section 553(b) of the Administrative Procedure Act (5 U.S.C. chapter 5) does not apply to these final regulations, and, because these final regulations do not impose a collection of information requirement on small entities, a regulatory flexibility analysis under the Regulatory Flexibility Act (5 U.S.C. chapter 6) is not required. Pursuant to Code section 7805(f), the proposed rule was submitted to the Small Business Administration for comment on its impact on small business.

This final rule is not subject to the requirements of the Paperwork Reduction Act of 1995 (PRA 95) (44 U.S.C. 3501 et seq.), because it does not contain a collection of information as defined in 44 U.S.C. 3502(3).

These final regulations are subject to the Congressional Review Act provisions of the Small Business Regulatory Enforcement Fairness Act of 1996 (5 U.S.C. 801 et seq.) and will be transmitted to the Congress and the Comptroller General for review.

For purposes of the Unfunded Mandates Reform Act of 1995 (Pub. L. 104-4), as well as Executive Order 12875, these final regulations do not include any Federal mandate that may result in expenditures by State, local, or tribal governments, or by the private sector, of $100 million or more adjusted for inflation.

Executive Order 13132 outlines fundamental principles of federalism, and requires the adherence to specific criteria by Federal agencies in the process of their formulation and implementation of policies that have “substantial direct effects” on the States, the relationship between the national government and States, or on the distribution of power and responsibilities among the various levels of government. Federal agencies promulgating regulations that have these federalism implications must consult with State and local officials, and describe the extent of their consultation and the nature of the concerns of State and local officials in the preamble to the regulation.

In the Departments' view, these final regulations have federalism implications, because they have direct effects on the States, the relationship between the national government and States, or on the distribution of power and responsibilities among various levels of government. In general, through section 514, ERISA supersedes State laws to the extent that they relate to any covered employee benefit plan, and preserves State laws that regulate insurance, banking, or securities. While ERISA prohibits States from regulating a plan as an insurance or investment company or bank, the preemption provisions of ERISA section 731 and PHS Act section 2724 (implemented in 29 CFR 2590.731(a) and 45 CFR 146.143(a)) apply so that the HIPAA requirements (including those of the Affordable Care Act) are not to be “construed to supersede any provision of State law which establishes, implements, or continues in effect any standard or requirement solely relating to health insurance issuers in connection with group health insurance coverage except to the extent that such standard or requirement prevents the application of a requirement” of a Federal standard. The conference report accompanying HIPAA indicates that this is intended to be the “narrowest” preemption of State laws. (See House Conf. Rep. No. 104-736, at 205, reprinted in 1996 U.S. Code Cong. & Admin. News 2018.)

States may continue to apply State law requirements except to the extent that such requirements prevent the application of the Affordable Care Act requirements that are the subject of this rulemaking. State insurance laws that are more stringent than the Federal requirements are unlikely to “prevent the application of” the Affordable Care Act, and be preempted. Accordingly, States have significant latitude to impose requirements on health insurance issuers that are more restrictive than the Federal law.

Guidance conveying this interpretation was published in the Federal Register on April 8, 1997 (62 FR 16904), and December 30, 2004 (69 FR 78720), and these final rules would clarify and implement the statute's minimum standards and would not significantly reduce the discretion given the States by the statute.

In compliance with the requirement of Executive Order 13132 that agencies examine closely any policies that may have federalism implications or limit the policy making discretion of the States, the Departments have engaged in efforts to consult with and work cooperatively with affected State and local officials, including attending conferences of the National Association of Insurance Commissioners and consulting with State insurance officials on an individual basis.

Table of Acronyms DHS Department of Homeland Security FR  Federal Register NPRM Notice of Proposed Rulemaking A. Regulatory History and Information

The Coast Guard published a NPRM on March 18, 2014. No comments were received. No public meeting has been requested.

The Administrative Procedure Act (APA) ( 5 U.S.C. 553(d)(3) ) authorizes an agency to publish a rule less than 30 days before its effective date when the agency for good cause finds that waiting 30 days would be “impracticable, unnecessary, or contrary to the public interest.” The Coast Guard finds that good cause exists for making this rule effective less than 30 days after publication in the Federal Register . As stated above, we published the NPRM on these special local regulations on March 18, 2014 (78 FR 33221), and we received no comments on the proposed rule. Delaying this regulation's effective date for 30 days would be impracticable and would be contrary to the public interest as immediate action is needed to ensure the safety of the event participants, spectator craft, and other vessels transiting the event area. A special local regulation is in the public interest in making this a safe event. The Coast Guard will provide advance notice of the special local regulation by Local Notice to Mariners, Broadcast Notice to Mariners, and on-scene designated representatives.

The legal basis for the rule is the Coast Guard's authority to establish special local regulations: 33 U.S.C. 1233. The purpose of the rule is to ensure safety of life and property on navigable waters of the United States during the Annual Swim around Key West, FL.

The special local regulation encompasses certain waters of the Atlantic Ocean and Gulf of Mexico. The special local regulation will be enforced on Saturday, June 28, 2014 from 7:30 a.m. until 3:30 p.m. The special local regulation consists of a moving race area where all persons and vessels, except those participating in the race nor serving as safety vessels, are prohibited from entering, transiting through, anchoring in, or remaining within these areas unless authorized by the Captain of the Port Key West or a designated representative. The race area will commence at Smather's Beach at 7:30 a.m., transit West to the area offshore of Fort Zach State Park, North through Key West Harbor, East through Fleming Cut, South on Cow Key Channel and West back to origin. Safety vessels will precede the first participating swimmers and follow the last participating swimmers. This event poses significant risks to participants, spectators, and the boating public because of the large number of swimmers and recreational vessels that are expected in the area of the event. The special local regulation is necessary to ensure the safety of participants, spectators, and vessels from the hazards associated with the event.

The special local regulation will be enforced from 7:30 a.m. to 3:30 p.m. on June 28, 2014. Persons and vessels who are neither participating in the race or serving as safety vessels may not enter, transit through, anchor in, or remain within the regulated area unless authorized by the Captain of the Port Key West or a designated representative.

Persons and vessels desiring to enter, transit through, anchor in, or remain within the regulated area may contact the Captain of the Port Key West by telephone at (305) 292-8727, or a designated representative via VHF radio on channel 16, to request authorization. If authorization to enter transit through, anchor in, or remain within regulated area is granted by the Captain of the Port Key West or a designated representative, all persons and vessels receiving such authorization must comply with the instructions of the Captain of the Port Key West or the designated representative. The Coast Guard will provide notice of the special local regulation by Local Notice to Mariners, Broadcast Notice to Mariners, and on-scene designated representatives.

We developed this rule after considering numerous statutes and executive orders related to rulemaking. Below we summarize our analyses based on a number of these statutes or executive orders.

This rule is not a significant regulatory action under section 3(f) of Executive Order 12866, Regulatory Planning and Review, as supplemented by Executive Order 13563, Improving Regulation and Regulatory Review, and does not require an assessment of potential costs and benefits under section 6(a)(3) of Executive Order 12866 or under section 1 of Executive Order 13563. The Office of Management and Budget has not reviewed it under those Orders.

The economic impact of this rule is not significant for the following reasons: (1) The rule will be enforced for a total of only 8 hours; (2) Non-participant persons and vessels may enter, transit through, anchor in, or remain within the regulated area during the enforcement period if authorized by the Captain of the Port Key West or a designated representative; (3) vessels not able to enter, transit through, anchor in, or remain within the regulated area without authorization from the Captain of the Port Key West or a designated representative may operate in the surrounding areas during the enforcement period; and (4) advance notification of the event will be made to the local maritime community via local notice to mariners, marine safety information bulletins, and broadcast notice to mariners.

The Regulatory Flexibility Act of 1980 (RFA), 5 U.S.C. 601-612, as amended, requires federal agencies to consider the potential impact of regulations on small entities during rulemaking. The term “small entities” comprises small businesses, not-for-profit organizations that are independently owned and operated and are not dominant in their fields, and governmental jurisdictions with populations of less than 50,000. The Coast Guard certifies under 5 U.S.C. 605(b) that this rule will not have a significant economic impact on a substantial number of small entities. This rule may affect the following entities, some of which may be small entities: Owners or operators of vessels intending to enter, transit through, anchor in, or remain within the regulated are during the enforcement period. For the reasons discussed in Regulatory Planning and Review section above, this rule will not have a significant economic impact on a substantial number of small entities. If you think that your business, organization, or governmental jurisdiction qualifies as a small entity and that this rule would have a significant economic impact on it, please submit a comment (see ADDRESSES ) explaining why you think it qualifies and how and to what degree this rule would economically affect it.

Under section 213(a) of the Small Business Regulatory Enforcement Fairness Act of 1996 (Pub. L. 104-121), we want to assist small entities in understanding this rule. If the rule would affect your small business, organization, or governmental jurisdiction and you have questions concerning its provisions or options for compliance, please contact the person listed in the FOR FURTHER INFORMATION CONTACT , above.

Small businesses may send comments on the actions of Federal employees who enforce, or otherwise determine compliance with, Federal regulations to the Small Business and Agriculture Regulatory Enforcement Ombudsman and the Regional Small Business Regulatory Fairness Boards. The Ombudsman evaluates these actions annually and rates each agency's responsiveness to small business. If you wish to comment on actions by employees of the Coast Guard, call 1-888-REG-FAIR (1-888-734-3247). The Coast Guard will not retaliate against small entities that question or complain about this rule or any policy or action of the Coast Guard.

This rule will not call for a new collection of information under the Paperwork Reduction Act of 1995 (44 U.S.C. 3501-3520.).

A rule has implications for federalism under Executive Order 13132, Federalism, if it has a substantial direct effect on the States, on the relationship between the national government and the States, or on the distribution of power and responsibilities among the various levels of government. We have analyzed this rule under that Order and determined that this rule does not have implications for federalism.

The Coast Guard respects the First Amendment rights of protesters. Protesters are asked to contact the person listed in the For Further Information Contact section to coordinate protest activities so that your message can be received without jeopardizing the safety or security of people, places or vessels.

The Unfunded Mandates Reform Act of 1995 (2 U.S.C. 1531-1538) requires Federal agencies to assess the effects of their discretionary regulatory actions. In particular, the Act addresses actions that may result in the expenditure by a State, local, or tribal government, in the aggregate, or by the private sector of $100,000,000 (adjusted for inflation) or more in any one year. Though this rule would not result in such an expenditure, we do discuss the effects of this rule elsewhere in this preamble.

This rule would not cause a taking of private property or otherwise have taking implications under Executive Order 12630, Governmental Actions and Interference with Constitutionally Protected Property Rights.

This rule meets applicable standards in sections 3(a) and 3(b)(2) of Executive Order 12988, Civil Justice Reform, to minimize litigation, eliminate ambiguity, and reduce burden.

We have analyzed this rule under Executive Order 13045, Protection of Children from Environmental Health Risks and Safety Risks. This rule is not an economically significant rule and would not create an environmental risk to health or risk to safety that might disproportionately affect children.

This rule does not have tribal implications under Executive Order 13175, Consultation and Coordination with Indian Tribal Governments, because it would not have a substantial direct effect on one or more Indian tribes, on the relationship between the Federal Government and Indian tribes, or on the distribution of power and responsibilities between the Federal Government and Indian tribes.

This rule is not a “significant energy action” under Executive Order 13211, Actions Concerning Regulations That Significantly Affect Energy Supply, Distribution, or Use.

This rule does not use technical standards. Therefore, we did not consider the use of voluntary consensus standards.

We have analyzed this rule under Department of Homeland Security Management Directive 023-01 and Commandant Instruction M16475.lD, which guide the Coast Guard in complying with the National Environmental Policy Act of 1969 (NEPA) (42 U.S.C. 4321-4370f), and have determined that this action is one of a category of actions that do not individually or cumulatively have a significant effect on the human environment. This rule involves a special local regulation issued in conjunction with a regatta or marine parade. This rule is categorically excluded from further review under paragraph 34(h) of Figure 2-1 of the Commandant Instruction. An environmental analysis checklist supporting this determination and a Categorical Exclusion Determination are available in the docket where indicated under ADDRESSES . We seek any comments or information that may lead to the discovery of a significant environmental impact from this rule.

For the reasons discussed in the preamble, the Coast Guard amends 33 CFR part 100 as follows:

Purpose of Program: The purpose of the Disability and Rehabilitation Research Projects and Centers Program is to plan and conduct research, demonstration projects, training, and related activities, including international activities, to develop methods, procedures, and rehabilitation technology that maximize the full inclusion and integration into society, employment, independent living, family support, and economic and social self-sufficiency of individuals with disabilities, especially individuals with the most severe disabilities, and to improve the effectiveness of services authorized under the Rehabilitation Act of 1973, as amended (Rehabilitation Act).

The purpose of the RRTCs, which are funded through the Disability and Rehabilitation Research Projects and Centers Program, is to achieve the goals of, and improve the effectiveness of, services authorized under the Rehabilitation Act through well-designed research, training, technical assistance, and dissemination activities in important topical areas. These activities are designed to benefit rehabilitation service providers, individuals with disabilities, family members, policymakers, and other research stakeholders. Additional information on the RRTC program can be found at: http://www2.ed.gov/programs/rrtc/index.html.

Applicable Program Regulations: 34 CFR part 350.

We published a notice of proposed priority (NPP) for this program in the Federal Register on March 3, 2014 (79 FR 11742). That notice contained background information and our reasons for proposing the particular priority.

Except for one revision explained in the Analysis of Comments and Changes section, there are no differences between the proposed priority and this final priority.

Public Comment: In response to our invitation in the NPP, three parties submitted comments on the proposed priority.

Generally, we do not address technical and other minor changes.

Analysis of Comments and Changes: An analysis of the comments and of any changes in the priority since publication of the notice of proposed priority follows.

Comment: One commenter questioned the need for this priority. Specifically, the commenter believed that with the current Federal budget restraints, we should not be spending money on any type of research.

Discussion: The proposed RRTC on Employment for Individuals with Intellectual and Developmental Disabilities is consistent with the research agenda outlined in NIDRR's Long-Range Plan for Fiscal Years 2013-2017 (Plan), which was published in the Federal Register on April 4, 2013 (78 FR 20299). One of the goals of the Plan is to establish a balanced distribution of priorities focused on improved outcomes in the domains of employment, community living and participation, and health and function that address the needs of individuals with different disabilities, personal characteristics, and social circumstances. NIDRR believes that the proposed RRTC on Employment for Individuals with Intellectual and Developmental Disabilities is consistent with that goal and will help to improve outcomes for this population.

More specifically, as we discussed in the NPP, there is a need to increase knowledge about effective ways to prepare persons with intellectual and developmental disabilities in their homes, schools, and communities for competitive integrated work; effectively bundle individual practices and experiences associated with desirable employment outcomes into more effective programs of employment supports; and scale up effective practices and programs to provide substantially increased opportunities for individuals with intellectual and developmental disabilities to experience well-developed, effective employment support. We believe this priority will focus research attention on this area of national need.

Changes: None.

Comment: One commenter stated that individuals with the most severe intellectual and developmental disabilities are often assumed to be unable to work, and therefore not included in research that could impact future employment supports and outcomes for this population. The commenter also suggested that “customized employment”  1 could hold promise for improving employment outcomes for individuals with the most severe intellectual and developmental disabilities. The commenter recommended that we revise the priority to encourage RRTCs to include individuals with the most severe intellectual and developmental disabilities in its activities.

Discussion: NIDRR agrees with the commenter that research and related activities are needed to improve employment outcomes for individuals with disabilities, especially individuals with the most severe disabilities. However, we do not want to limit applicants' choices by specifying or recommending the severity of disability for their target population. The priority language allows applicants to focus their research and related activities on individuals with intellectual and developmental disabilities as a group, or on specific subpopulations. With this field-initiated priority, we purposefully allow researchers to specify and justify their target population.

Changes: None.

Comment: One commenter suggested that NIDRR modify the priority to require the involvement of directors of State vocational rehabilitation agencies in the RRTC's activities.

Discussion: Paragraph (c)(iv) of the priority requires the RRTC to contribute to improving employment outcomes by involving key stakeholder groups in its research activities. The priority does not require that any particular stakeholder group be involved in its activities because the most critical stakeholders may vary depending on the specific activity proposed. However, representatives of State VR agencies are listed as an example of a key stakeholder. In addition, nothing in the priority precludes an applicant from proposing the participation and involvement of State VR agency directors in their RRTC activities. The peer review process will determine the merits of each proposal.

Changes: None.

Comment: None.

Discussion: After further review, we believe that it would strengthen this priority to highlight in this priority the importance of employment of individuals with intellectual and developmental disabilities in integrated competitive settings. This concept is introduced in the background section of the NPP, published in the Federal Register on March 3, 2014 (79 FR 11742). Specifically, the NPP introduced data showing that, of 566,188 individuals with intellectual and developmental disabilities in integrated employment, sheltered employment, and non-work settings in 2010, only 19 percent were in integrated, competitive employment. For this reason, we want to make even clearer our belief that individuals with intellectual and developmental disabilities have a right to earn a real wage (at least minimum wage) in an environment where there are people with and without disability.

Changes: We have added integrated, competitive employment to the overarching purpose statement in the introductory language of the priority.

The Assistant Secretary for Special Education and Rehabilitative Services establishes a priority for an RRTC on Employment for Individuals with Intellectual and Developmental Disabilities.

The RRTC must contribute to improving the employment outcomes, particularly in integrated, competitive employment settings, of individuals with intellectual and developmental disabilities by:

(a) Conducting well-designed research activities in one or more of the following priority areas, focusing on individuals with intellectual and developmental disabilities as a group or on individuals in specific disability or demographic subpopulations of individuals with intellectual and developmental disabilities:

(i) Technology to improve employment outcomes for individuals with intellectual and developmental disabilities.

(ii) Individual, work environment, or employer factors associated with improved employment opportunities or outcomes for individuals with intellectual and developmental disabilities.

(iii) Interventions that contribute to improved employment outcomes for individuals with intellectual and developmental disabilities. Interventions include any one or combination of the following: Strategies, practices, programs, policies, or tools that, when implemented as intended, contribute to improvements in opportunities or outcomes for individuals with disabilities, and may include interventions focused on individuals, families, employers, or service providers.

(iv) Effects of current or modified government practices, policies, and programs on employment outcomes for individuals with intellectual and developmental disabilities.

(v) Practices and policies that contribute to improved employment outcomes for transition-aged youth with intellectual and developmental disabilities.

(b) Identifying and focusing its research on one or more specific stages of research, including specifically at least one significant evaluation project focused on scaling up existing validated employment interventions or programs to multiple employment settings. If the RRTC is to conduct research that can be categorized under more than one of the research stages, or research that progresses from one stage to another, those stages should be clearly specified. These stages and their definitions are in the notice of final priorities and definitions published in the Federal Register on May 7, 2013 (78 FR 26513).

(c) Serving as a national resource center related to employment for individuals with intellectual and developmental disabilities, their families, and other stakeholders by conducting knowledge translation activities that include, but are not limited to:

(i) Providing information and technical assistance on job development and placement, job training and support, customized employment, and other aspects of supported employment to school-based transition programs, employment service providers, employers, individuals with intellectual and developmental disabilities and their representatives, and other key stakeholders.

(ii) Providing training, including graduate, pre-service, and in-service training, to vocational rehabilitation, school-based transition programs, and other employment service providers, to achieve integrated, competitive employment outcomes for individuals with intellectual and developmental disabilities. This training may be provided through conferences, workshops, public education programs, in-service training programs, and similar activities.

(iii) Disseminating, in accessible formats, research-based information and materials related to employment for individuals with intellectual and developmental disabilities.

(iv) Involving key stakeholder groups in the activities conducted under paragraph (a) in order to maximize the relevance and usability of the new knowledge generated by the RRTC. Such stakeholder groups may vary depending on the specific activity proposed, but could include representatives of agencies such as the State Developmental Disabilities program/service agencies, State Developmental Disability Planning Councils, State Protection and Advocacy Agencies, State vocational rehabilitation agencies, and State Employment First coalitions, as well as consumer advocacy agencies such as The Arc, UCP, TASH, and People First.

When inviting applications for a competition using one or more priorities, we designate the type of each priority as absolute, competitive preference, or invitational through a notice in the Federal Register . The effect of each type of priority follows:

Absolute priority: Under an absolute priority, we consider only applications that meet the priority (34 CFR 75.105(c)(3)).

Competitive preference priority: Under a competitive preference priority, we give competitive preference to an application by (1) awarding additional points, depending on the extent to which the application meets the priority (34 CFR 75.105(c)(2)(i)); or (2) selecting an application that meets the priority over an application of comparable merit that does not meet the priority (34 CFR 75.105(c)(2)(ii)).

Invitational priority: Under an invitational priority, we are particularly interested in applications that meet the priority. However, we do not give an application that meets the priority a preference over other applications (34 CFR 75.105(c)(1)).

This notice does not preclude us from proposing additional priorities, requirements, definitions, or selection criteria, subject to meeting applicable rulemaking requirements.

Under Executive Order 12866, the Secretary must determine whether this regulatory action is “significant” and, therefore, subject to the requirements of the Executive order and subject to review by the Office of Management and Budget (OMB). Section 3(f) of Executive Order 12866 defines a “significant regulatory action” as an action likely to result in a rule that may—

(1) Have an annual effect on the economy of $100 million or more, or adversely affect a sector of the economy, productivity, competition, jobs, the environment, public health or safety, or State, local, or tribal governments or communities in a material way (also referred to as an “economically significant” rule);

(2) Create serious inconsistency or otherwise interfere with an action taken or planned by another agency;

(3) Materially alter the budgetary impacts of entitlement grants, user fees, or loan programs or the rights and obligations of recipients thereof; or

(4) Raise novel legal or policy issues arising out of legal mandates, the President's priorities, or the principles stated in the Executive order.

This final regulatory action is not a significant regulatory action subject to review by OMB under section 3(f) of Executive Order 12866.

We have also reviewed this final regulatory action under Executive Order 13563, which supplements and explicitly reaffirms the principles, structures, and definitions governing regulatory review established in Executive Order 12866. To the extent permitted by law, Executive Order 13563 requires that an agency—

(1) Propose or adopt regulations only upon a reasoned determination that their benefits justify their costs (recognizing that some benefits and costs are difficult to quantify);

(2) Tailor its regulations to impose the least burden on society, consistent with obtaining regulatory objectives and taking into account—among other things and to the extent practicable—the costs of cumulative regulations;

(3) In choosing among alternative regulatory approaches, select those approaches that maximize net benefits (including potential economic, environmental, public health and safety, and other advantages; distributive impacts; and equity);

(4) To the extent feasible, specify performance objectives, rather than the behavior or manner of compliance a regulated entity must adopt; and

(5) Identify and assess available alternatives to direct regulation, including economic incentives—such as user fees or marketable permits—to encourage the desired behavior, or provide information that enables the public to make choices.

Executive Order 13563 also requires an agency “to use the best available techniques to quantify anticipated present and future benefits and costs as accurately as possible.” The Office of Information and Regulatory Affairs of OMB has emphasized that these techniques may include “identifying changing future compliance costs that might result from technological innovation or anticipated behavioral changes.”

We are issuing this final priority only on a reasoned determination that its benefits justify its costs. In choosing among alternative regulatory approaches, we selected those approaches that maximize net benefits. Based on the analysis that follows, the Department believes that this regulatory action is consistent with the principles in Executive Order 13563.

We also have determined that this regulatory action does not unduly interfere with State, local, and tribal governments in the exercise of their governmental functions.

In accordance with both Executive orders, the Department has assessed the potential costs and benefits, both quantitative and qualitative, of this regulatory action. The potential costs are those resulting from statutory requirements and those we have determined as necessary for administering the Department's programs and activities.

The benefits of the Disability and Rehabilitation Research Projects and Centers Program have been well established over the years, as projects similar to the one envisioned by the final priority have been completed successfully. The new RRTC will generate and promote the use of new knowledge that likely will improve the employment outcomes for individuals with disabilities.

Accessible Format: Individuals with disabilities can obtain this document in an accessible format (e.g., braille, large print, audiotape, or compact disc) on request to the program contact person listed under FOR FURTHER INFORMATION CONTACT .

Electronic Access to This Document: The official version of this document is the document published in the Federal Register . Free Internet access to the official edition of the Federal Register and the Code of Federal Regulations is available via the Federal Digital System at: www.gpo.gov/fdsys . At this site you can view this document, as well as all other documents of this Department published in the Federal Register , in text or Adobe Portable Document Format (PDF). To use PDF you must have Adobe Acrobat Reader, which is available free at the site.

You may also access documents of the Department published in the Federal Register by using the article search feature at: www.federalregister.gov . Specifically, through the advanced search feature at this site, you can limit your search to documents published by the Department.

Purpose of Program: The purpose of the Disability and Rehabilitation Research Projects and Centers Program is to plan and conduct research, demonstration projects, training, and related activities, including international activities, to develop methods, procedures, and rehabilitation technology that maximize the full inclusion and integration into society, employment, independent living, family support, and economic and social self-sufficiency of individuals with disabilities, especially individuals with the most severe disabilities, and to improve the effectiveness of services authorized under the Rehabilitation Act of 1973, as amended (Rehabilitation Act).

The purpose of the RRTCs, which are funded through the Disability and Rehabilitation Research Projects and Centers Program, is to achieve the goals of, and improve the effectiveness of, services authorized under the Rehabilitation Act through well-designed research, training, technical assistance, and dissemination activities in important topical areas, as specified by NIDRR. These activities are designed to benefit rehabilitation service providers, individuals with disabilities, family members, policymakers, and other research stakeholders. Additional information on the RRTC program can be found at: http://www2.ed.gov/programs/rrtc/index.html#types.

Applicable Program Regulations: 34 CFR part 350.

We published a notice of proposed priority for this program in the Federal Register on Wednesday, March 26, 2014 (79 FR 16707). That notice contained background information and our reasons for proposing the particular priority.

There are no differences between the proposed priority and this final priority as discussed in the Analysis of Comments and Changes section elsewhere in this notice.

Public Comment: In response to our invitation in the notice of proposed priority, four parties submitted comments on the proposed priority.

Generally, we do not address technical and other minor changes. In addition, we do not address the general comments we received that raised concerns not directly related to the proposed priority.

Analysis of Comments and Changes: An analysis of the comments and of any changes in the priority since publication of the notice of proposed priority follows.

Comment: Two commenters suggested that NIDRR modify the priority to require a focus on promising practices that could enhance employment outcomes for individuals with psychiatric disabilities and serve as the basis for research by the RRTC. One commenter suggested that NIDRR modify the priority to focus on psychiatric treatment programs that emphasize timely intervention following an initial psychiatric episode, as well as supported education programs for youth and young adults with psychiatric disabilities. The other commenter suggested that NIDRR modify the priority to focus on educational and supported housing interventions for adults with psychiatric disabilities, as well as early screening and assessment programs to identify children with psychiatric disabilities while they are in school.

Discussion: Nothing in the priority precludes applicants from focusing on the topics described by the commenters. However, we do not wish to preclude applicants from proposing other areas of research by requiring all applicants to address the topics presented by the commenters. The peer review process will determine the merits of each proposal.

Changes: None.

The Assistant Secretary for Special Education and Rehabilitative Services establishes a priority for an RRTC on Improving Employment Outcomes for Individuals with Psychiatric Disabilities. This priority will be jointly funded by NIDRR and the Substance Abuse and Mental Health Services Administration (SAMHSA). For the purposes of this priority, “employment outcomes” may refer to, but are not limited to, obtaining employment, job retention, job advancement, or compensation.

The RRTC must contribute to improving the employment outcomes of individuals with psychiatric disabilities by:

(a) Conducting well-designed research activities, with an emphasis on promising practices with currently limited evidence bases, in one or more of the following priority areas, focusing on individuals with psychiatric disabilities as a group or on individuals with a specific disability or on demographic subpopulations of individuals with psychiatric disabilities:

(1) Technology to improve employment outcomes for individuals with psychiatric disabilities.

(2) Individual, work environment, or employer factors associated with improved employment outcomes for individuals with psychiatric disabilities.

(3) Interventions that contribute to improved employment outcomes for individuals with psychiatric disabilities. Interventions include any strategy, practice, program, policy, or tool that, when implemented as intended, contributes to improvements in employment outcomes for individuals with psychiatric disabilities, and may include interventions focused on individuals, families, employers, or service providers.

(4) Effects of current or modified government practices, policies, and programs on employment outcomes for individuals with psychiatric disabilities;

(b) Focusing its research on one or more specific stages of research. If the RRTC is to conduct research that can be categorized under more than one of the research stages, or research that progresses from one stage to another, those stages should be clearly specified.

(c) Serving as a national resource center related to employment for individuals with psychiatric disabilities, their families, and other stakeholders by conducting knowledge translation activities that include, but are not limited to:

(1) Providing information and technical assistance to employment service providers, mental health service providers, employers, individuals with psychiatric disabilities and their representatives, and other key stakeholders. These activities will include providing technical assistance on evidence-based, supported employment to SAMHSA grantees that are awarded funds in FY 2014 to enhance State and community capacity to provide supported employment programs targeting adults with serious mental illnesses, including persons with co-occurring mental illness and substance abuse disorders.

(2) Providing training, including graduate, pre-service, and in-service training, to vocational rehabilitation and other employment service providers, to facilitate more effective delivery of employment services to individuals with psychiatric disabilities. This training may be provided through conferences, workshops, public education programs, in-service training programs, and similar activities.

(3) Disseminating research-based information and materials related to increasing employment levels for individuals with psychiatric disabilities.

(4) Involving key stakeholder groups in the activities conducted under paragraph (a) of this priority to promote the new knowledge generated by the RRTC.

When inviting applications for a competition using one or more priorities, we designate the type of each priority as absolute, competitive preference, or invitational through a notice in the Federal Register . The effect of each type of priority follows:

Absolute priority: Under an absolute priority, we consider only applications that meet the priority (34 CFR 75.105(c)(3)).

Competitive preference priority: Under a competitive preference priority, we give competitive preference to an application by (1) awarding additional points, depending on the extent to which the application meets the priority (34 CFR 75.105(c)(2)(i)); or (2) selecting an application that meets the priority over an application of comparable merit that does not meet the priority (34 CFR 75.105(c)(2)(ii)).

Invitational priority: Under an invitational priority, we are particularly interested in applications that meet the priority. However, we do not give an application that meets the priority a preference over other applications (34 CFR 75.105(c)(1)).

This notice does not preclude us from proposing additional priorities, requirements, definitions, or selection criteria, subject to meeting applicable rulemaking requirements.

Under Executive Order 12866, the Secretary must determine whether this regulatory action is “significant” and, therefore, subject to the requirements of the Executive order and subject to review by the Office of Management and Budget (OMB). Section 3(f) of Executive Order 12866 defines a “significant regulatory action” as an action likely to result in a rule that may—

(1) Have an annual effect on the economy of $100 million or more, or adversely affect a sector of the economy, productivity, competition, jobs, the environment, public health or safety, or State, local, or tribal governments or communities in a material way (also referred to as an “economically significant” rule);

(2) Create serious inconsistency or otherwise interfere with an action taken or planned by another agency;

(3) Materially alter the budgetary impacts of entitlement grants, user fees, or loan programs or the rights and obligations of recipients thereof; or

(4) Raise novel legal or policy issues arising out of legal mandates, the President's priorities, or the principles stated in the Executive order.

This final regulatory action is not a significant regulatory action subject to review by OMB under section 3(f) of Executive Order 12866.

We have also reviewed this final regulatory action under Executive Order 13563, which supplements and explicitly reaffirms the principles, structures, and definitions governing regulatory review established in Executive Order 12866. To the extent permitted by law, Executive Order 13563 requires that an agency—

(1) Propose or adopt regulations only upon a reasoned determination that their benefits justify their costs (recognizing that some benefits and costs are difficult to quantify);

(2) Tailor its regulations to impose the least burden on society, consistent with obtaining regulatory objectives and taking into account—among other things and to the extent practicable—the costs of cumulative regulations;

(3) In choosing among alternative regulatory approaches, select those approaches that maximize net benefits (including potential economic, environmental, public health and safety, and other advantages; distributive impacts; and equity);

(4) To the extent feasible, specify performance objectives, rather than the behavior or manner of compliance a regulated entity must adopt; and

(5) Identify and assess available alternatives to direct regulation, including economic incentives—such as user fees or marketable permits—to encourage the desired behavior, or provide information that enables the public to make choices.

Executive Order 13563 also requires an agency “to use the best available techniques to quantify anticipated present and future benefits and costs as accurately as possible.” The Office of Information and Regulatory Affairs of OMB has emphasized that these techniques may include “identifying changing future compliance costs that might result from technological innovation or anticipated behavioral changes.”

We are issuing this final priority only on a reasoned determination that its benefits justify its costs. In choosing among alternative regulatory approaches, we selected those approaches that maximize net benefits. Based on the analysis that follows, the Department believes that this regulatory action is consistent with the principles in Executive Order 13563.

We also have determined that this regulatory action does not unduly interfere with State, local, and tribal governments in the exercise of their governmental functions.

In accordance with both Executive orders, the Department has assessed the potential costs and benefits, both quantitative and qualitative, of this regulatory action. The potential costs are those resulting from statutory requirements and those we have determined as necessary for administering the Department's programs and activities.

The benefits of the Disability and Rehabilitation Research Projects and Centers Program have been well established over the years. Projects similar to the one envisioned by the final priority have been completed successfully, and the proposed priority would generate new knowledge through research. The new RRTC would generate, disseminate, and promote the use of new information that would improve outcomes for individuals with disabilities in the areas of community living and participation, employment, and health and function.

Accessible Format: Individuals with disabilities can obtain this document in an accessible format (e.g., braille, large print, audiotape, or compact disc) on request to the program contact person listed under FOR FURTHER INFORMATION CONTACT .

Electronic Access to This Document: The official version of this document is the document published in the Federal Register . Free Internet access to the official edition of the Federal Register and the Code of Federal Regulations is available via the Federal Digital System at: www.gpo.gov/fdsys. At this site you can view this document, as well as all other documents of this Department published in the Federal Register , in text or Adobe Portable Document Format (PDF). To use PDF you must have Adobe Acrobat Reader, which is available free at the site.

You may also access documents of the Department published in the Federal Register by using the article search feature at: www.federalregister.gov. Specifically, through the advanced search feature at this site, you can limit your search to documents published by the Department.

EPA is withdrawing the April 30, 2014 (79 FR 24337), direct final rule approving a revision to the Wisconsin nitrogen oxide combustion turbine rule for the Milwaukee-Racine former nonattainment area. In the direct final rule, EPA stated that if adverse comments were received by May 30, 2014, the rule would be withdrawn and not take effect. On May 30, 2014, EPA received a comment, which it interprets as adverse and, therefore, EPA is withdrawing the direct final rule. EPA will address the comment in a subsequent final action based upon the proposed rulemaking action, also published on April 30, 2014 (79 FR 24359). EPA will not institute a second comment period on this action.

The information collection requirement in Section III.I of the Report and Order, published at 78 FR 67956, was approved by the Office of Management and Budget on June 2, 2014. The notices of Paperwork Reduction Act approval and information collection effective date were published at 79 FR 33709 on June 12, 2014. This allows the Commission to collect from all ICS providers data related to the costs of providing ICS as outlined in Section III.I of the Report and Order. The required data are due July 17, 2014.

To assist ICS providers and to allow for uniform data filing, the Commission has developed a template form and related instructions for ICS providers to use to file the required data. These documents may be found at www.fcc.gov/encyclopedia/ICS-mandatory-data-collection. The required data may be filed pursuant to the Protective Order adopted in this proceeding. The Commission requires ICS provider data to be filed electronically. Additional information related to filing data, including how to file confidential data, may be found in the instructions on the above-referenced Web site.

Background

Under the High Seas Driftnet Fishing Moratorium Protection Act (Moratorium Protection Act), as amended by the Magnuson-Stevens Reauthorization Act (Pub. L. 109-479) and the Shark Conservation Act (Pub. L. 111-348), the Secretary of Commerce is authorized to identify nations whose vessels are engaged in, or have been engaged in: Illegal, unreported and unregulated (IUU) fishing; fishing activities that have bycatch of protected living marine resources (PLMR); and fishing for sharks on the high seas without adopting a regulatory program for the conservation of sharks comparable to that of the United States. Nations identified for IUU fishing, PLMR bycatch, or unsustainable shark fishing that do not take corrective action and do not subsequently receive a positive certification from the Secretary of Commerce may be subject to measures imposed by the Secretary of the Treasury under the High Seas Driftnet Fisheries Enforcement Act (16 U.S.C. 1826a). Such measures include the denial of port privileges for fishing vessels of those nations, and, as directed by the President, may include a prohibition on the importation into the United States of certain fish and fish products caught by the vessels engaged in the relevant activity for which the nations were identified, or other measures.

NMFS published a final rule to specify the procedures for identification and certification of nations under the Highs Seas Driftnet Moratorium Protection Act on January 12, 2011 (76 FR 2011). That final rule contained collection-of-information requirements specified in §§ 300.205(b)(2), 300.206(c), and 300.207(c). These regulations required documentation of admissibility for fishery products exported to the United States from nations that were not positively certified subsequent to identification by the United States for having vessels engaged in illegal, unreported and unregulated (IUU) fishing and/or bycatch of protected living marine resources. These collection-of-information requirements were not made effective in that final rule, pending approval of these requirements by OMB.

In a subsequent rulemaking, published on January 16, 2013 (78 FR 3338), § 300.205 was redesignated as § 300.206; § 300.206 was redesignated as § 300.207, § 300.207 was redesignated as § 300.208 and § 300.209 was added. The redesignated sections contained the original documentation requirements for exports of fishery products to the United States and the new section contained documentation requirements for exports of fishery products to the United States from nations that were not positively certified subsequent to identification by the United States for having vessels engaged in fishing for sharks on the high seas in a manner not comparable in effectiveness to the regulatory program of the United States. These revised collection-of-information requirements contained in §§ 300.206(b)(2), 300.207(c), 300.208(c), and 300.209(c) were approved by OMB on January 16, 2013 (78 FR 3345, 3346).

This final rule notifies the public that the collection-of-information requirements contained in §§ 300.206, 300.207, 300.208, and 300.209 have been approved by OMB and are effective. In addition, this final rule will update the table on NOAA information collections approved by OMB that appears under 15 CFR part 902.

This final rule contains a collection-of-information requirement subject to the Paperwork Reduction Act (PRA). The collection of this information has been approved by the Office of Management and Budget under OMB Control Number 0648-0651. The information collection consists of documentation requirements for exports of fishery products to the United States from nations that were not positively certified subsequent to identification by the United States under the procedures of the High Seas Driftnet Moratorium Protection Act (50 CFR part 300, subpart N).

Notwithstanding any other provision of the law, no person is required to respond to, and no person shall be subject to 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.

Pursuant to 5 U.S.C. 553(b)(B), the Assistant Administrator for Fisheries finds that there is good cause to waive prior notice and an opportunity for public comment on this action, as notice and comment would be unnecessary. Notice and comment are unnecessary for this current action because an opportunity for public comment was previously provided during the rulemaking to establish the collection-of-information requirement (78 FR 3338) and this current action makes only minor, non-substantive changes to the table on NOAA information collections approved by OMB that appears under 15 CFR part 902. No aspect of this required action is controversial. NMFS therefore determines that APA requirements for public notice and comment are unnecessary for this action and determines that this rule is not subject to the 30-day delay in effectiveness requirement at 5 U.S.C. 553(d).

For reasons stated in the preamble, 15 CFR part 902 is amended as follows:

NMFS manages the groundfish fishery in the BSAI exclusive economic zone according to the Fishery Management Plan for Groundfish of the Bering Sea and Aleutian Islands Management Area (FMP) prepared by the North Pacific Fishery Management Council (Council) under authority of the Magnuson-Stevens Fishery Conservation and Management Act. Regulations governing fishing by U.S. vessels in accordance with the FMP appear at subpart H of 50 CFR part 600 and 50 CFR part 679.

In the BSAI, the halibut PSC limit apportioned as a bycatch allowance for the BSAI trawl limited access sector's Pacific cod fishery is 453 metric tons (mt) as established by the final 2014 and 2015 harvest specifications for groundfish in the BSAI (79 FR 12108, March 4, 2014).

As of June 12, 2014, the Administrator, Alaska Region, NMFS, (Regional Administrator), has determined that 60 mt of the 2014 halibut bycatch allowance for the BSAI trawl limited access sector's Pacific cod fishery will not be used. Therefore, after consultation with the Council, and in accordance with § 679.21(e)(3)(i)(B), NMFS reapportions 60 mt of halibut bycatch allowance from the BSAI trawl limited access sector's Pacific cod fishery, to the BSAI trawl limited access sector's yellowfin sole fishery. The revised 2014 halibut bycatch allowances are 393 mt for the BSAI trawl limited access sector's Pacific cod fishery and 227 mt for the BSAI trawl limited access sector's yellowfin sole fishery. Table 12 of the final 2014 and 2015 harvest specifications for groundfish in the BSAI (79 FR 12108, March 4, 2014) is revised consistent with this reapportionment.

This action responds to the best available information recently obtained from the fishery and consultation with the Council. The Assistant Administrator for Fisheries, NOAA (AA), finds good cause to waive the requirement to provide prior notice and opportunity for public comment pursuant to the authority set forth at 5 U.S.C. 553(b)(B) as such requirement is impracticable and contrary to the public interest. This requirement is impracticable and contrary to the public interest as it would prevent NMFS from responding to the most recent fisheries data in a timely fashion and would delay the reapportionment of the BSAI trawl limited access sector's halibut PSC limit. It is important to immediately inform the industry as to the reapportionment of the BSAI trawl limited access sector's halibut PSC limit. Immediate notification is necessary to allow for the orderly conduct and efficient operation of this fishery; allow the industry to plan for the fishing season and avoid potential disruption to the fishing fleet and processors. NMFS was unable to publish a notice providing time for public comment because the most recent, relevant data only became available as of June 12, 2014.

The AA also finds good cause to waive the 30-day delay in the effective date of this action under 5 U.S.C. 553(d)(3). This finding is based upon the reasons provided above for waiver of prior notice and opportunity for public comment.

This action is required by § 679.20 and is exempt from review under Executive Order 12866.