Agricultural Marketing Service
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National Nuclear Security Administration
Food and Drug Administration
National Institutes of Health
Fish and Wildlife Service
Ocean Energy Management Bureau
Drug Enforcement Administration
Mine Safety and Health Administration
Federal Aviation Administration
National Highway Traffic Safety Administration
Comptroller of the Currency
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Consult the Reader Aids section at the end of this issue for phone numbers, online resources, finding aids, and notice of recently enacted public laws.
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Federal Aviation Administration (FAA), DOT.
Final rule; request for comments.
The FAA is adopting a new airworthiness directive (AD) for all Embraer S.A. Model ERJ 170-100 STD, -100 LR, -100 SU, and -100 SE; ERJ 170-200 STD, -200 LR, -200 SU; ERJ 190-100 STD, -100 LR, -100 IGW, and -100 ECJ; and ERJ 190-200 STD, -200 LR, and -200 IGW airplanes. This AD was prompted by a report of the failure of the inner pane of certain passenger windows to meet maximum operating pressure and lack of fail-safe design. This AD requires determining if certain NORDAM passenger windows are installed, and performing corrective actions if any affected part is installed. This AD also prohibits the installation of affected parts. The FAA is issuing this AD to address the unsafe condition on these products.
This AD is effective April 26, 2022.
The FAA must receive comments on this AD by May 26, 2022.
You may send comments, using the procedures found in 14 CFR 11.43 and 11.45, by any of the following methods:
•
•
•
•
You may examine the AD docket at
Jacob Fitch, Aerospace Engineer, COS Program Management Section, Operational Safety Branch, Compliance & Airworthiness Division, FAA, 10101 Hillwood Pkwy., Fort Worth, TX 76177; telephone (817) 222-4130; email
The FAA received a voluntary self-disclosure report indicating possible failure of the inner pane of certain passenger windows to meet fail-safe loads in the event of the complete failure of the outer pane. Manufacturer testing was performed to confirm the inadequacy of the inner window pane design. The results of the testing revealed that the inner pane of the passenger window failed to meet maximum operating pressure. The root cause was determined to be an inner window pane dimensional thickness that is inadequate to support cabin pressurization loads. As a result, the design was found to not be fail safe, meaning that the window assembly does not retain the required residual strength to maintain safe flight and landing of the aircraft after a failure or partial failure of the outer window pane. This affects any Nordam Group Inc. Transparency Division (NORDAM) passenger window having part number (P/N) NP00038-3. Failure of the window's inner pane to meet maximum operating pressure and lack of fail-safe design, if not addressed, could result in possible serious injury to a passenger near the window due to rapid decompression, and consequent reduced ability of the flightcrew to maintain the safe flight and landing of the airplane. The FAA is issuing this AD to address the unsafe condition on these products.
The FAA is issuing this AD because the agency has determined the unsafe condition described previously is likely to exist or develop in other products of the same type design.
This AD requires determining if any affected part, the NORDAM passenger window having P/N NP00038-3, is installed; repetitively inspecting the outer pane of affected parts for cracking; immediately replacing cracked affected parts with serviceable windows; and eventually replacing all affected parts, within 90 days, which eliminates the need for the repetitive inspections. This AD also prohibits the installation of affected parts.
Section 553(b)(3)(B) of the Administrative Procedure Act (APA) (5 U.S.C. 551
An unsafe condition exists that requires the immediate adoption of this AD without providing an opportunity for public comments prior to adoption. The FAA has found that the risk to the flying public justifies forgoing notice and comment prior to adoption of this rule because due to the lack of a fail-safe design and failure of the window's inner pane to meet maximum operating pressure, a complete failure of the outer window pane could result in possible serious injury to a passenger near the window due to rapid decompression, and consequent reduced ability of the flightcrew to maintain the safe flight
In addition, the FAA finds that good cause exists pursuant to 5 U.S.C. 553(d) for making this amendment effective in less than 30 days, for the same reasons the FAA found good cause to forgo notice and comment.
The FAA invites you to send any written data, views, or arguments about this final rule. Send your comments to an address listed under
Except for Confidential Business Information (CBI) as described in the following paragraph, and other information as described in 14 CFR 11.35, the FAA will post all comments received, without change, to
CBI is commercial or financial information that is both customarily and actually treated as private by its owner. Under the Freedom of Information Act (FOIA) (5 U.S.C. 552), CBI is exempt from public disclosure. If your comments responsive to this AD contain commercial or financial information that is customarily treated as private, that you actually treat as private, and that is relevant or responsive to this AD, it is important that you clearly designate the submitted comments as CBI. Please mark each page of your submission containing CBI as “PROPIN.” The FAA will treat such marked submissions as confidential under the FOIA, and they will not be placed in the public docket of this AD. Submissions containing CBI should be sent to Jacob Fitch, Aerospace Engineer, COS Program Management Section, Operational Safety Branch, Compliance & Airworthiness Division, FAA, 10101 Hillwood Pkwy., Fort Worth, TX 76177; telephone (817) 222-4130; email
The requirements of the Regulatory Flexibility Act (RFA) do not apply when an agency finds good cause pursuant to 5 U.S.C. 553 to adopt a rule without prior notice and comment. Because the FAA has determined that it has good cause to adopt this rule without notice and comment, RFA analysis is not required.
The FAA estimates that this AD affects up to 65 airplanes of U.S. registry. (A total of 65 affected parts were produced.) The FAA estimates the following costs to comply with this AD:
The FAA estimates the following costs to do any necessary actions that would be required based on the results of the part number inspection. The FAA has no way of determining the number of aircraft that might need these actions:
The FAA has included all known costs in its cost estimate. According to the manufacturer, however, some or all of the costs of this AD may be covered under warranty, thereby reducing the cost impact on affected operators.
Title 49 of the United States Code specifies the FAA's authority to issue rules on aviation safety. Subtitle I, section 106, describes the authority of the FAA Administrator. Subtitle VII: Aviation Programs describes in more detail the scope of the Agency's authority.
The FAA is issuing this rulemaking under the authority described in Subtitle VII, Part A, Subpart III, Section 44701: General requirements. Under that section, Congress charges the FAA with promoting safe flight of civil aircraft in air commerce by prescribing regulations for practices, methods, and procedures the Administrator finds necessary for safety in air commerce. This regulation is within the scope of that authority because it addresses an unsafe condition that is likely to exist or develop on products identified in this rulemaking action.
This AD will not have federalism implications under Executive Order 13132. This AD will not have a substantial direct effect on the States, on the relationship between the national government and the States, or on the distribution of power and responsibilities among the various levels of government.
For the reasons discussed above, I certify that this AD:
(1) Is not a “significant regulatory action” under Executive Order 12866, and
(2) Will not affect intrastate aviation in Alaska.
Air transportation, Aircraft, Aviation safety, Incorporation by reference, Safety.
Accordingly, under the authority delegated to me by the Administrator, the FAA amends 14 CFR part 39 as follows:
49 U.S.C. 106(g), 40113, 44701.
This airworthiness directive (AD) is effective April 26, 2022.
None.
This AD applies to all Embraer S.A. airplanes identified in paragraphs (c)(1) through (4) of this AD, certificated in any category.
(1) Model ERJ 170-100 STD, -100 LR, -100 SU, and -100 SE airplanes.
(2) Model ERJ 170-200 STD, -200 LR, and -200 SU airplanes.
(3) Model ERJ 190-100 STD, -100 LR, -100 IGW, and -100 ECJ airplanes.
(4) Model ERJ 190-200 STD, -200 LR, and -200 IGW airplanes.
Air Transport Association (ATA) of America Code 56, Windows.
This AD was prompted by a report of the failure of the inner pane of the passenger window to meet maximum operating pressure and lack of fail-safe design. The FAA is issuing this AD to address this condition, which could result in possible serious injury to a passenger near the window due to rapid decompression, and consequent reduced ability of the flightcrew to maintain the safe flight and landing of the airplane.
Comply with this AD within the compliance times specified, unless already done.
Affected parts are NORDAM passenger windows having part number NP00038-3.
Before further flight, determine whether any affected part is installed on the airplane. A review of the airplane maintenance records is acceptable, if the manufacturer and part number of the installed windows can be conclusively determined from that review.
(1)
(i) If any cracking is found, before further flight, replace the affected part with a serviceable window.
(ii) If no cracking is found, repeat the inspection thereafter before each flight, until the affected part is replaced, as specified in paragraph (h)(2) of this AD.
(2) Within 90 days after the effective date of this AD: Replace all affected parts installed on the airplane with serviceable windows.
Replacement of an affected part, as specified in paragraph (h)(2) of this AD, terminates the repetitive inspection requirements specified in paragraph (h)(1)(ii) of this AD for that part.
As of the effective date of this AD, no person may install a NORDAM passenger window, part number (P/N) NP00038-3, on any airplane.
(1) The Manager, Large Aircraft Section, International Validation Branch, FAA, has the authority to approve AMOCs for this AD, if requested using the procedures found in 14 CFR 39.19. In accordance with 14 CFR 39.19, send your request to your principal inspector or responsible Flight Standards Office, as appropriate. If sending information directly to the Large Aircraft Section, International Validation Branch, send it to the attention of the person identified in paragraph (l) of this AD. Information may be emailed to:
(2) Before using any approved AMOC, notify your appropriate principal inspector, or lacking a principal inspector, the manager of the responsible Flight Standards Office.
For more information about this AD, contact Jacob Fitch, Aerospace Engineer, COS Program Management Section, Operational Safety Branch, Compliance & Airworthiness Division, FAA, 10101 Hillwood Pkwy., Fort Worth, TX 76177; telephone (817) 222-4130; email
None.
Federal Aviation Administration (FAA), DOT.
Final rule.
This action amends the Class E airspace at Hallock, MN. This action due to an airspace review conducted as part of the decommissioning of the Humbolt very high frequency (VHF) omnidirectional range (VOR) as part of the VOR Minimal Operational Network (MON) Program.
Effective 0901 UTC, July 14, 2022. The Director of the Federal Register approves this incorporation by reference action under 1 CFR part 51, subject to the annual revision of FAA Order JO 7400.11 and publication of conforming amendments.
FAA Order JO 7400.11F, Airspace Designations and Reporting Points, and subsequent amendments can be viewed online at
Jeffrey Claypool, Federal Aviation Administration, Operations Support Group, Central Service Center, 10101 Hillwood Parkway, Fort Worth, TX 76177; telephone (817) 222-5711.
The FAA's authority to issue rules regarding aviation safety is found in Title 49 of the United States Code. Subtitle I, Section 106 describes the authority of the FAA Administrator. Subtitle VII, Aviation Programs, describes in more detail the scope of the agency's authority. This rulemaking is promulgated under the authority described in Subtitle VII, Part A, Subpart I, Section 40103. Under that section, the FAA is charged with prescribing regulations to assign the use of airspace necessary to ensure the safety of aircraft and the efficient use of airspace. This regulation is within the scope of that authority as it amends the Class E airspace extending upward from
The FAA published a notice of proposed rulemaking (NPRM) in the
Class E airspace designations are published in paragraph 6005 of FAA Order JO 7400.11F, dated August 10, 2021, and effective September 15, 2021, which is incorporated by reference in 14 CFR 71.1. The Class E airspace designations listed in this document will be published subsequently in FAA Order JO 7400.11.
This document amends FAA Order JO 7400.11F, Airspace Designations and Reporting Points, dated August 10, 2021, and effective September 15, 2021. FAA Order JO 7400.11F is publicly available as listed in the
Subsequent to publication, the FAA discovered a typographical error in the title of the NPRM, “Proposed Establishment of Class E Airspace; Hallock, MN” should have been “Proposed Amendment of Class E Airspace; Hallock, MN”. As this error was only in the title and does not impact the actual airspace being amended, it has been corrected in this action.
This amendment to 14 CFR part 71 amends the Class E airspace extending upward from 700 feet above the surface at Hallock Municipal Airport, Hallock, MN, by removing the extension to the southeast of the airport as it is no longer needed.
This action is due to an airspace review conducted as part of the decommissioning of the Humbolt VOR, which provided navigation information for the instrument procedures at these airports, as part of the VOR MON Program.
FAA Order JO 7400.11, Airspace Designations and Reporting Points, is published yearly and effective on September 15.
The FAA has determined that this regulation only involves an established body of technical regulations for which frequent and routine amendments are necessary to keep them operationally current, is non-controversial and unlikely to result in adverse or negative comments. It, therefore: (1) Is not a “significant regulatory action” under Executive Order 12866; (2) is not a “significant rule” under DOT Regulatory Policies and Procedures (44 FR 11034; February 26, 1979); and (3) does not warrant preparation of a regulatory evaluation as the anticipated impact is so minimal. Since this is a routine matter that only affects air traffic procedures and air navigation, it is certified that this rule, when promulgated, does not have a significant economic impact on a substantial number of small entities under the criteria of the Regulatory Flexibility Act.
The FAA has determined that this action qualifies for categorical exclusion under the National Environmental Policy Act in accordance with FAA Order 1050.1F, “Environmental Impacts: Policies and Procedures,” paragraph 5-6.5.a. This airspace action is not expected to cause any potentially significant environmental impacts, and no extraordinary circumstances exist that warrant preparation of an environmental assessment.
Airspace, Incorporation by reference, Navigation (air).
In consideration of the foregoing, the Federal Aviation Administration amends 14 CFR part 71 as follows:
49 U.S.C. 106(f), 106(g); 40103, 40113, 40120; E.O. 10854, 24 FR 9565, 3 CFR, 1959-1963 Comp., p. 389.
That airspace extending upward from 700 feet above the surface within a 6.4-mile radius of the Hallock Municipal Airport.
Federal Aviation Administration (FAA), DOT.
Final rule.
This action amends the Class E airspace at Pembina, ND. This action is due to an airspace review conducted as part of the decommissioning of the Humbolt very high frequency (VHF) omnidirectional range (VOR) as part of the VOR Minimal Operational Network (MON) Program. The geographic coordinates of the airport are also being updated to coincide with the FAA's aeronautical database.
Effective 0901 UTC, July 14, 2022. The Director of the Federal Register approves this incorporation by reference action under 1 CFR part 51, subject to the annual revision of FAA Order JO 7400.11 and publication of conforming amendments.
FAA Order JO 7400.11F, Airspace Designations and Reporting Points, and subsequent amendments can be viewed online at
Jeffrey Claypool, Federal Aviation
The FAA's authority to issue rules regarding aviation safety is found in Title 49 of the United States Code. Subtitle I, Section 106 describes the authority of the FAA Administrator. Subtitle VII, Aviation Programs, describes in more detail the scope of the agency's authority. This rulemaking is promulgated under the authority described in Subtitle VII, Part A, Subpart I, Section 40103. Under that section, the FAA is charged with prescribing regulations to assign the use of airspace necessary to ensure the safety of aircraft and the efficient use of airspace. This regulation is within the scope of that authority as it amends the Class E airspace extending upward from 700 feet above the surface at Pembina Municipal Airport, Pembina, ND, to support instrument flight rule operations at this airport.
The FAA published a notice of proposed rulemaking (NPRM) in the
Class E airspace designations are published in paragraph 6005 of FAA Order JO 7400.11F, dated August 10, 2021, and effective September 15, 2021, which is incorporated by reference in 14 CFR 71.1. The Class E airspace designations listed in this document will be published subsequently in FAA Order JO 7400.11.
This document amends FAA Order JO 7400.11F, Airspace Designations and Reporting Points, dated August 10, 2021, and effective September 15, 2021. FAA Order JO 7400.11F is publicly available as listed in the
Subsequent to publication, the FAA discovered a typographical error in the title of the NPRM, “Proposed Establishment of Class E Airspace; Pembina, ND” should have been “Proposed Amendment of Class E Airspace; Pembina, ND”. As this error was only in the title and does not impact the actual airspace being amended, it has been corrected in this action.
This amendment to 14 CFR part 71 amends the Class E airspace extending upward from 700 feet above the surface to within a 6.4-mile (increased from a 6.2-mile) radius of Pembina Municipal Airport, Pembina, ND; removes the Humbolt VORTAC and associated extension from the airspace legal description; removes Grand Forks AFB, Devils Lake VOR/DME, and the airspace extending upward from 1,200 feet above the surface from the airspace legal description as it is covered by the Class E airspace extending upward from 1,200 feet above the surface over the State of North Dakota, is redundant, and no longer needed; adds exclusionary language north of latitude 49°00′00″ N. that prevents the airspace from extending into Canadian airspace; and updates the geographic coordinates of the airport to coincide with the FAA's aeronautical database.
This action is due to an airspace review conducted as part of the decommissioning of the Humbolt VOR, which provided navigation information for the instrument procedures at this airport, as part of the VOR MON Program.
FAA Order JO 7400.11, Airspace Designations and Reporting Points, is published yearly and effective on September 15.
The FAA has determined that this regulation only involves an established body of technical regulations for which frequent and routine amendments are necessary to keep them operationally current, is non-controversial and unlikely to result in adverse or negative comments. It, therefore: (1) Is not a “significant regulatory action” under Executive Order 12866; (2) is not a “significant rule” under DOT Regulatory Policies and Procedures (44 FR 11034; February 26, 1979); and (3) does not warrant preparation of a regulatory evaluation as the anticipated impact is so minimal. Since this is a routine matter that only affects air traffic procedures and air navigation, it is certified that this rule, when promulgated, does not have a significant economic impact on a substantial number of small entities under the criteria of the Regulatory Flexibility Act.
The FAA has determined that this action qualifies for categorical exclusion under the National Environmental Policy Act in accordance with FAA Order 1050.1F, “Environmental Impacts: Policies and Procedures,” paragraph 5-6.5.a. This airspace action is not expected to cause any potentially significant environmental impacts, and no extraordinary circumstances exist that warrant preparation of an environmental assessment.
Airspace, Incorporation by reference, Navigation (air).
In consideration of the foregoing, the Federal Aviation Administration amends 14 CFR part 71 as follows:
49 U.S.C. 106(f), 106(g); 40103, 40113, 40120; E.O. 10854, 24 FR 9565, 3 CFR, 1959-1963 Comp., p. 389.
That airspace extending upward from 700 feet above the surface within a 6.4-mile radius of Pembina Municipal Airport, excluding that airspace north of lat. 49°00′00″ N.
Federal Aviation Administration (FAA), DOT.
Final rule.
This action amends the Class E airspace at Springfield, OH. This action is due to an airspace review conducted as part of the decommissioning of the Springfield very high frequency (VHF) omnidirectional range (VOR) as part of the VOR Minimal Operational Network (MON) Program.
Effective 0901 UTC, July 14, 2022. The Director of the Federal Register approves this incorporation by reference action under 1 CFR part 51, subject to the annual revision of FAA Order JO 7400.11 and publication of conforming amendments.
FAA Order JO 7400.11F, Airspace Designations and Reporting Points, and subsequent amendments can be viewed online at
Jeffrey Claypool, Federal Aviation Administration, Operations Support Group, Central Service Center, 10101 Hillwood Parkway, Fort Worth, TX 76177; telephone (817) 222-5711.
The FAA's authority to issue rules regarding aviation safety is found in Title 49 of the United States Code. Subtitle I, Section 106 describes the authority of the FAA Administrator. Subtitle VII, Aviation Programs, describes in more detail the scope of the agency's authority. This rulemaking is promulgated under the authority described in Subtitle VII, Part A, Subpart I, Section 40103. Under that section, the FAA is charged with prescribing regulations to assign the use of airspace necessary to ensure the safety of aircraft and the efficient use of airspace. This regulation is within the scope of that authority as it amends the Class E airspace extending upward from 700 feet above the surface at Springfield-Beckley Municipal Airport, Springfield, OH, to support instrument flight rule operations at this airport.
The FAA published a notice of proposed rulemaking in the
This document amends FAA Order JO 7400.11F, Airspace Designations and Reporting Points, dated August 10, 2021, and effective September 15, 2021. FAA Order JO 7400.11F is publicly available as listed in the
This amendment to 14 CFR part 71 amends the Class E airspace extending upward from 700 feet above the surface at Springfield-Beckley Municipal Airport, Springfield, OH, by removing the Clark County NDB and associated extension from the airspace legal description as they are no longer needed.
This action is due to an airspace review conducted as part of the decommissioning of the Springfield VOR, which provided navigation information for the instrument procedures at this airport, as part of the VOR MON Program.
FAA Order JO 7400.11, Airspace Designations and Reporting Points, is published yearly and effective on September 15.
The FAA has determined that this regulation only involves an established body of technical regulations for which frequent and routine amendments are necessary to keep them operationally current, is non-controversial and unlikely to result in adverse or negative comments. It, therefore: (1) Is not a “significant regulatory action” under Executive Order 12866; (2) is not a “significant rule” under DOT Regulatory Policies and Procedures (44 FR 11034; February 26, 1979); and (3) does not warrant preparation of a regulatory evaluation as the anticipated impact is so minimal. Since this is a routine matter that only affects air traffic procedures and air navigation, it is certified that this rule, when promulgated, does not have a significant economic impact on a substantial number of small entities under the criteria of the Regulatory Flexibility Act.
The FAA has determined that this action qualifies for categorical exclusion under the National Environmental Policy Act in accordance with FAA Order 1050.1F, “Environmental Impacts: Policies and Procedures,” paragraph 5-6.5.a. This airspace action is not expected to cause any potentially significant environmental impacts, and no extraordinary circumstances exist that warrant preparation of an environmental assessment.
Airspace, Incorporation by reference, Navigation (air).
In consideration of the foregoing, the Federal Aviation Administration amends 14 CFR part 71 as follows:
49 U.S.C. 106(f), 106(g); 40103, 40113, 40120; E.O. 10854, 24 FR 9565, 3 CFR, 1959-1963 Comp., p. 389.
That airspace extending upward from 700 feet above the surface within a 6.9-mile
Federal Aviation Administration (FAA), DOT.
Final rule.
This action amends the Class E airspace at Cadillac, MI; Ludington, MI; and Manistee, MI. This action due to airspace reviews conducted as part of the decommissioning of the Manistee very high frequency (VHF) omnidirectional range (VOR) as part of the VOR Minimal Operational Network (MON) Program. The names and geographic coordinates of various airports are also being updated to coincide with the FAA's aeronautical database.
Effective 0901 UTC, July 14, 2022. The Director of the Federal Register approves this incorporation by reference action under 1 CFR part 51, subject to the annual revision of FAA Order JO 7400.11 and publication of conforming amendments.
FAA Order JO 7400.11F, Airspace Designations and Reporting Points, and subsequent amendments can be viewed online at
Jeffrey Claypool, Federal Aviation Administration, Operations Support Group, Central Service Center, 10101 Hillwood Parkway, Fort Worth, TX 76177; telephone (817) 222-5711.
The FAA's authority to issue rules regarding aviation safety is found in Title 49 of the United States Code. Subtitle I, Section 106 describes the authority of the FAA Administrator. Subtitle VII, Aviation Programs, describes in more detail the scope of the agency's authority. This rulemaking is promulgated under the authority described in Subtitle VII, Part A, Subpart I, Section 40103. Under that section, the FAA is charged with prescribing regulations to assign the use of airspace necessary to ensure the safety of aircraft and the efficient use of airspace. This regulation is within the scope of that authority as it amends the Class E airspace extending upward from 700 feet above the surface at Wexford County Airport, Cadillac, MI; Mason County Airport, Ludington, MI; and Manistee County/Blacker Airport, Manistee, MI, to support instrument flight rule operations at these airports.
The FAA published a notice of proposed rulemaking (NPRM) in the
Class E airspace designations are published in paragraph 6005 of FAA Order JO 7400.11F, dated August 10, 2021, and effective September 15, 2021, which is incorporated by reference in 14 CFR 71.1. The Class E airspace designations listed in this document will be published subsequently in FAA Order JO 7400.11.
This document amends FAA Order JO 7400.11F, Airspace Designations and Reporting Points, dated August 10, 2021, and effective September 15, 2021. FAA Order JO 7400.11F is publicly available as listed in the
Subsequent to publication, the FAA discovered a typographical error in the title of the NPRM, “Proposed Establishment of Class E Airspace; Multiple Michigan Towns” should have been “Proposed Amendment of Class E Airspace; Multiple Michigan Towns”. As this error was only in the title and does not impact the actual airspace being amended, it has been corrected in this action.
This amendment to 14 CFR part 71:
Amends the Class E airspace extending upward from 700 feet above the surface to within a 6.6-mile (decreased from a 6.7-mile) radius of Wexford County Airport, Cadillac, MI; and removes the city associated with the airport in the header to comply with changes to FAA Order JO 7400.2N, Procedures for Handling Airspace Matters;
Amends the Class E airspace extending upward from 700 feet above the surface to within a 6.6-mile (decreased from a 7-mile) radius of Mason County Airport, Ludington, MI; removes the city associated with the airport in the header to comply with changes to FAA Order JO 7400.2N; and updates the geographic coordinates of the airport to coincide with the FAA's aeronautical database;
And amends the Class E airspace extending upward from 700 feet above the surface to within a 6.6-mile (decreased from a 7-mile) radius of Manistee County/Blacker Airport, Manistee, MI; removes the Manistee VOR/DME and associated extensions from the airspace legal description; adds an extension 6.5 miles north and 5.3 miles south of the 091° bearing from the Manistee County/Blacker Airport: RWY 28-LOC extending from the 6.6-mile radius of the airport to 16.5 miles east of the Manistee County/Blacker Airport: RWY 28-LOC; adds an extension 2.2 miles each side of the 271° bearing from the airport extending from the 6.6-mile radius of the airport to 10 miles west of the airport; and updates the airport name (previously Manistee County—Blacker Airport) to coincide with the FAA's aeronautical database.
This action is due to airspace reviews conducted as part of the decommissioning of the Manistee VOR, which provided navigation information for the instrument procedures at these airports, as part of the VOR MON Program.
FAA Order JO 7400.11, Airspace Designations and Reporting Points, is published yearly and effective on September 15.
The FAA has determined that this regulation only involves an established body of technical regulations for which frequent and routine amendments are necessary to keep them operationally current, is non-controversial and unlikely to result in adverse or negative comments. It, therefore: (1) Is not a
The FAA has determined that this action qualifies for categorical exclusion under the National Environmental Policy Act in accordance with FAA Order 1050.1F, “Environmental Impacts: Policies and Procedures,” paragraph 5-6.5.a. This airspace action is not expected to cause any potentially significant environmental impacts, and no extraordinary circumstances exist that warrant preparation of an environmental assessment.
Airspace, Incorporation by reference, Navigation (air).
In consideration of the foregoing, the Federal Aviation Administration amends 14 CFR part 71 as follows:
49 U.S.C. 106(f), 106(g); 40103, 40113, 40120; E.O. 10854, 24 FR 9565, 3 CFR, 1959-1963 Comp., p. 389.
That airspace extending upward from 700 feet above the surface within a 6.6-mile radius of the Wexford County Airport.
That airspace extending upward from 700 feet above the surface within a 6.6-mile radius of Mason County Airport.
That airspace extending upward from 700 feet above the surface within a 6.6-mile radius of the Manistee County/Blacker Airport, and within 6.5 miles north and 5.3 miles south of the 091° bearing from the Manistee County/Blacker Airport: RWY 28-LOC extending from the 6.6-mile radius of the airport to 16.5 miles east of the Manistee County/Blacker Airport: RWY 28-LOC, and within 2.2 miles each side of the 271° bearing from the airport extending from the 6.6-mile radius of the airport to 10 miles west of the airport.
Federal Aviation Administration (FAA), DOT.
Final rule.
This action amends the Class E airspace at Watonga, OK. This action is due to an airspace review conducted as part of the decommissioning of the Kingfisher very high frequency (VHF) omnidirectional range (VOR) as part of the VOR Minimal Operational Network (MON) Program. The name and geographic coordinates of the airport are also being updated to coincide with the FAA's aeronautical database.
Effective 0901 UTC, July 14, 2022. The Director of the Federal Register approves this incorporation by reference action under 1 CFR part 51, subject to the annual revision of FAA Order JO 7400.11 and publication of conforming amendments.
FAA Order JO 7400.11F, Airspace Designations and Reporting Points, and subsequent amendments can be viewed online at
Jeffrey Claypool, Federal Aviation Administration, Operations Support Group, Central Service Center, 10101 Hillwood Parkway, Fort Worth, TX 76177; telephone (817) 222-5711.
The FAA's authority to issue rules regarding aviation safety is found in Title 49 of the United States Code. Subtitle I, Section 106 describes the authority of the FAA Administrator. Subtitle VII, Aviation Programs, describes in more detail the scope of the agency's authority. This rulemaking is promulgated under the authority described in Subtitle VII, Part A, Subpart I, Section 40103. Under that section, the FAA is charged with prescribing regulations to assign the use of airspace necessary to ensure the safety of aircraft and the efficient use of airspace. This regulation is within the scope of that authority as it amends the Class E airspace extending upward from 700 feet above the surface at Watonga Regional Airport, Watonga, OK, to support instrument flight rule operations at this airport.
The FAA published a notice of proposed rulemaking in the
Class E airspace designations are published in paragraph 6005 of FAA Order JO 7400.11F, dated August 10, 2021, and effective September 15, 2021, which is incorporated by reference in 14 CFR 71.1. The Class E airspace designations listed in this document will be published subsequently in FAA Order JO 7400.11.
This document amends FAA Order JO 7400.11F, Airspace Designations and Reporting Points, dated August 10,
This amendment to 14 CFR part 71 amends the Class E airspace extending upward from 700 feet above the surface to within a 6.4-mile (decreased from a 6.5-mile) radius of Watonga Regional Airport, Watonga, OK; and updating the name (previously Watonga Airport) and geographic coordinates of the airport to coincide with the FAA's aeronautical database. This action is the result of an airspace review conducted as part of the decommissioning of the Kingfisher VOR, which provided navigation information for the instrument procedures at this airport, as part of the VOR MON Program.
FAA Order JO 7400.11, Airspace Designations and Reporting Points, is published yearly and effective on September 15.
The FAA has determined that this regulation only involves an established body of technical regulations for which frequent and routine amendments are necessary to keep them operationally current, is non-controversial and unlikely to result in adverse or negative comments. It, therefore: (1) Is not a “significant regulatory action” under Executive Order 12866; (2) is not a “significant rule” under DOT Regulatory Policies and Procedures (44 FR 11034; February 26, 1979); and (3) does not warrant preparation of a regulatory evaluation as the anticipated impact is so minimal. Since this is a routine matter that only affects air traffic procedures and air navigation, it is certified that this rule, when promulgated, does not have a significant economic impact on a substantial number of small entities under the criteria of the Regulatory Flexibility Act.
The FAA has determined that this action qualifies for categorical exclusion under the National Environmental Policy Act in accordance with FAA Order 1050.1F, “Environmental Impacts: Policies and Procedures,” paragraph 5-6.5.a. This airspace action is not expected to cause any potentially significant environmental impacts, and no extraordinary circumstances exist that warrant preparation of an environmental assessment.
Airspace, Incorporation by reference, Navigation (air).
In consideration of the foregoing, the Federal Aviation Administration amends 14 CFR part 71 as follows:
49 U.S.C. 106(f), 106(g); 40103, 40113, 40120; E.O. 10854, 24 FR 9565, 3 CFR, 1959-1963 Comp., p. 389.
That airspace extending upward from 700 feet above the surface within a 6.4-mile radius of Watonga Regional Airport.
Bureau of Industry and Security, Commerce.
Correcting amendments.
The Bureau of Industry and Security (BIS) publishes these amendments to correct three errors contained in the revisions to the Entity List that were published in a final rule on February 14, 2022. That final rule amended the Export Administration Regulations (EAR) by revising the Entity List entry for “Huawei Cloud Brazil” (under Brazil) and by adding a new entry for “Huawei Technologies Co., Ltd.” (under China, People's Republic of). However, the references to the foreign direct product provisions in the EAR that apply to these two entities were incorrect. This rule amends the entries for the two entities to include the correct references to these EAR provisions and also corrects a typographical error in one of these entries.
This rule is effective April 11, 2022. This rule is applicable as of February 14, 2022.
Chair, End-User Review Committee, Office of the Assistant Secretary for Export Administration, Bureau of Industry and Security, Department of Commerce, Phone: 202-482-5991; Email:
The Entity List in supplement no. 4 to part 744 of the Export Administration Regulations (EAR) (15 CFR parts 730-774) identifies entities for which there is reasonable cause to believe, based on specific and articulable facts, that the entities have been involved, are involved, or pose a significant risk of being or becoming involved in activities contrary to the national security or foreign policy interests of the United States. The EAR impose additional license requirements on, and limit the availability of most license exceptions for, exports, reexports and transfers (in-country) to listed entities. These additional license requirements are referenced, together with other relevant EAR provisions, in the “License requirement” column for each entity. The license review policy for each listed entity is identified in the “License review policy” column for that entity on the Entity List, and the impact on the availability of license exceptions is described in the relevant
The End-User Review Committee (ERC), composed of representatives of the Departments of Commerce (Chair), State, Defense, Energy and, where appropriate, the Treasury, makes all decisions regarding additions to, removals from, or other modifications to the Entity List. The ERC makes all decisions to add an entry to the Entity List by majority vote and makes all
On February 14, 2022 (87 FR 8180), BIS published a final rule titled “Addition of Certain Entities to the Entity List,” which amended the Entity List by,
The references to § 734.9(e) of the EAR were added to a number of entities on the Entity List, replacing previous references to § 736.2(b)(3)(vi) of the EAR, by a final rule that BIS published in the
Although the February 14, 2022, Entity List rule included a revision of the entry for “Huawei Cloud Brazil” (under Brazil), the rule inadvertently failed to change the reference in the “License requirement” column for this entity from § 736.2(b)(3) to § 734.9(e). Furthermore, the addition of a new entry for “Huawei Technologies Co., Ltd.” (under China, People's Republic of) to the Entity List, also incorrectly referenced § 736.2(b)(3), instead of § 734.9(e), in the “License requirement” column for the entity.
These correcting amendments revise the “License requirement” column in each of the aforementioned Entity List entries to correctly reference § 734.9(e), instead of § 736.2(b)(3). These amendments also correct a typographical error, in the “License requirement” column for “Huawei Technologies Co., Ltd.” (under China, People's Republic of), by revising the phrase “except for” to read “EXCEPT
Exports, Reporting and recordkeeping requirements, Terrorism.
For the reasons stated in the preamble, part 744 of the Export Administration Regulations (15 CFR parts 730-774) is corrected by making the following correcting amendments:
50 U.S.C. 4801-4852; 50 U.S.C. 4601
The revisions read as follows:
Securities and Exchange Commission.
Publication of staff accounting bulletin.
This staff accounting bulletin expresses the views of the staff regarding the accounting for obligations to safeguard crypto-assets an entity holds for platform users.
Karmen Ward, Professional Accounting Fellow, Office of the Chief Accountant at (202) 551-5300, or Todd E. Hardiman, Associate Chief Accountant, Division of Corporation Finance at (202) 551-3400, Securities and Exchange Commission, 100 F Street NE, Washington, DC 20549.
The statements in staff accounting bulletins are not rules or interpretations of the Commission, nor are they published as bearing the Commission's official approval. They represent staff interpretations and practices followed by the staff in the Division of Corporation Finance and the Office of the Chief Accountant in administering the disclosure requirements of the federal securities laws.
Accordingly, Part 211 of Title 17 of the Code of Federal Regulations is amended as follows:
15 U.S.C. 77g, 15 U.S.C. 77s(a), 15 U.S.C. 77aa(25) and (26), 15 U.S.C. 78c(b), 15 U.S.C. 78l(b), 15 U.S.C. 78m(b), 15 U.S.C. 80a-8, 15 U.S.C. 80a-29(e), 15 U.S.C. 80a-30, and 15 U.S.C. 80a-37(a).
The text of Staff Accounting Bulletin No. 121 will not appear in the Code of Federal Regulations.
The staff hereby adds Section FF to Topic 5 of the Staff Accounting Bulletin Series. This staff accounting bulletin (“SAB”) adds interpretive guidance for entities to consider when they have obligations to safeguard crypto-assets held for their platform users. This SAB is applicable to entities that file reports pursuant to Sections 13(a) or 15(d) of the Securities Exchange Act of 1934 (“Exchange Act”) and entities that have submitted or filed a registration statement under the Securities Act of 1933 (“Securities Act”) or the Exchange Act that is not yet effective. The SAB is also applicable to entities submitting or filing an offering statement or post-qualification amendment thereto under Regulation A, entities subject to the periodic and the current reporting requirements of Regulation A, and private operating companies whose financial statements are included in filings with the SEC in connection with a business combination involving a shell company, including a special purpose acquisition company. Accordingly, the staff hereby amends the Staff Accounting Bulletin Series as follows:
The interpretations in this SAB express views of the staff regarding the accounting for entities that have obligations to safeguard crypto-assets held for their platform users.
•
•
•
These risks can have a significant impact on the entity's operations and financial condition. The staff believes that the recognition, measurement, and disclosure guidance in this SAB will enhance the information received by investors and other users of financial statements about these risks, thereby assisting them in making investment and other capital allocation decisions.
As Entity A's loss exposure is based on the significant risks associated with safeguarding the crypto-assets held for its platform users, the staff believes it would be appropriate to measure this safeguarding liability at initial recognition and each reporting date at the fair value
Disclosures regarding the significant risks and uncertainties associated with the entity holding crypto-assets for its platform users may also be required outside the financial statements under existing Commission rules, such as in the description of business, risk factors, or management's discussion and analysis of financial condition and results of operation.
The staff expects all other entities, including but not limited to entities conducting an initial registration of securities under the Securities Act or Exchange Act, entities conducting an offering of securities under Regulation A, and private operating companies entering into a business combination transaction with a shell company, including a special purpose acquisition company, to apply the guidance in Topic 5.FF beginning with their next submission or filing with the SEC (
For all entities, in the financial statements that reflect the initial application of this guidance, the effect of the initial application should be reported in the carrying amounts of assets and liabilities as of the beginning of the annual period specified above. Entities should include clear disclosure of the effects of the initial application of this guidance.
Food and Drug Administration, HHS.
Final rule.
The Food and Drug Administration (FDA, we, or the Agency) is amending the regulations for food additives permitted in feed and drinking water of animals to provide for the safe use of methyl esters of conjugated linoleic acid for early lactation dairy cows to reduce the energy concentration in milk. This action is in response to a food additive petition filed by BASF Corp.
This rule is effective April 11, 2022. See section V of this document for further information on the filing of objections. Submit either electronic or written objections and requests for a hearing on the final rule by May 11, 2022.
You may submit objections and requests for a hearing as follows. Please note that late, untimely filed objections will not be considered. Electronic objections must be submitted on or before May 11, 2022. The
Submit electronic objections in the following way:
•
• If you want to submit an objection with confidential information that you do not wish to be made available to the public, submit the objection as a written/paper submission and in the manner detailed (see “Written/Paper Submissions” and “Instructions”).
Submit written/paper submissions as follows:
•
• For written/paper objections submitted to the Dockets Management Staff, FDA will post your objection, as well as any attachments, except for information submitted, marked and identified, as confidential, if submitted as detailed in “Instructions.”
• Confidential Submissions—To submit an objection with confidential information that you do not wish to be made publicly available, submit your objections only as a written/paper submission. You should submit two copies in total. One copy will include the information you claim to be confidential with a heading or cover note that states “THIS DOCUMENT CONTAINS CONFIDENTIAL INFORMATION.” The Agency will review this copy, including the claimed confidential information, in its consideration of objections. The second copy, which will have the claimed confidential information redacted/blacked out, will be available for public viewing and posted on
Megan Hall, Center for Veterinary Medicine, Food and Drug Administration, 7519 Standish Pl. (HFV-221), Rockville, MD 20855, 301-796-3801,
In a document published in the
In 2020, 21 CFR 573.940 was amended to provide for the safe use of silicon dioxide as an anticaking agent, grinding aid, antifoaming agent, or carrier in animal feed components (ingredients, intermediate premixes, premixes, supplements, or concentrates) across food substances under FAP 2308 (85 FR 33539, June 2, 2020).
FDA concludes that the data establish the safety and utility of methyl esters of conjugated linoleic acid (cis-9, trans-11 and trans-10, cis-12 octadecadienoic acids) for early lactation dairy cows to reduce the energy concentration in milk, and that the food additive regulations should be amended as set forth in this document.
In accordance with § 571.1(h) (21 CFR 571.1(h)), the petition and documents we considered and relied upon in reaching our decision to approve the petition will be made available for public disclosure (see
We have determined under 21 CFR 25.32(r) that this action is of a type that does not individually or cumulatively have a significant effect on the human environment. Therefore, neither an environmental assessment nor an environmental impact statement is required.
Any person who will be adversely affected by this regulation may file with the Dockets Management Staff (see
Animal feeds, Food additives.
Therefore, under the Federal Food, Drug, and Cosmetic Act and under authority delegated to the Commissioner of Food and Drugs, 21 CFR part 573 is amended as follows:
21 U.S.C. 321, 342, 348.
The food additive, methyl esters of conjugated linoleic acid (cis-9, trans-11 and trans-10, cis-12-octadecadienoic acids) may be safely used in swine feed and feed for early lactation dairy cows (less than 100 days in milk) in accordance with the prescribed conditions:
(b) The additive is used or intended for use in the feed of:
(1) Growing and finishing swine as a source of fatty acids at levels not to exceed 0.6% in the finished feed.
(2) Early lactation dairy cows to reduce the energy concentration in milk when fed at levels not to exceed 33 grams per cow per day.
Drug Enforcement Administration, Department of Justice.
Final rule.
This rulemaking amends the Drug Enforcement Administration's (DEA) regulations to now require all applications for DEA registrations, and renewal of those registrations, to be submitted online.
This final rule is effective May 11, 2022.
Scott A. Brinks, Diversion Control Division, Drug Enforcement Administration; Mailing Address: 8701 Morrissette Drive, Springfield, VA 22152, Telephone: (571) 776-2265.
The Drug Enforcement Administration (DEA) has the legal authority to amend its regulations to require online applications pursuant to the Controlled Substances Act (CSA). The CSA grants the Attorney General authority to promulgate rules and regulations relating to: The registration and control of the manufacture, distribution, and dispensing of controlled substances and listed chemicals; reporting changes to professional or business addresses; and the efficient execution of his statutory functions. 21 U.S.C. 821, 822(a), 827(h), 871(b), 957(a). The Attorney General is further authorized by the CSA to promulgate rules and regulations relating to the registration and control of importers and exporters of controlled substances and listed chemicals. 21 U.S.C. 958(f). The Attorney General has delegated this authority to the Administrator of DEA. 28 CFR 0.100(b).
Regulatory changes are needed to modernize DEA's approach to registration and renewal applications. The proposed changes require online submission and eliminate inefficient paper applications. Typographical errors or missing pieces of information routinely resulted in delayed or rejected applications. DEA has determined the
This rule mitigates issues created by paper applications by simplifying the process by which registrants submit new applications for registration, or renew current registrations. Previously, DEA regulations permitted the aforementioned DEA Registration Forms (224/224a, 225/225a, 363/363a, and 510/510a) to be submitted either through a secure online portal or via delivery to DEA Headquarters.
This rule amends DEA regulations by revising current sections to clarify how registrants must apply, by adding new instructions, and by removing obsolete instructions. The rule amends existing DEA regulations in seven sections.
This rule affects DEA Forms relating to applications for registration and renewal of registrations, namely DEA Forms 224, 224a, 225, 225a, 363, 363a, 510, and 510a. DEA Form 224 applies to new registration applications for practitioners, hospitals and clinics, retail pharmacies, online pharmacies, central fill pharmacies, and teaching institutions.
On January 7, 2021, DEA published a notice of proposed rulemaking (“NPRM”) that proposed requiring that all applications for DEA registrations, and renewal of those registrations, be submitted online. 86 FR 1030 (Jan. 7, 2021). DEA received four comments from the public on this NPRM, three from individuals and one from the National Association of Chain Drug Stores (NACDS). After closely analyzing each comment, DEA is promulgating this rule as proposed in the NPRM with one exception: DEA is clarifying that Automated Clearing House (ACH) fund transfers will be accepted as payment for registrations and renewals.
DEA received a comment from NACDS on March 8, 2021, about problems that may arise once paper applications and payments are no longer accepted. In particular, NACDS expressed concern about ambiguity surrounding whether DEA will accept “batch” renewals, whether the whole batch will be denied if one application is denied, and whether alternative payment options will be accepted. DEA has reviewed these comments and revised § 1309.12(b) to specify that ACH funds transfer will be accepted as a payment option, in addition to credit cards and other forms of payment that may become available.
First, NACDS observed that DEA neither proposes to modify nor to address “batch” submissions, a process by which companies seek to renew their registrations for multiple locations with a single packet covering a number of DEA registrations and licenses. The packet usually contains a single signed affidavit as well as a single payment. NACDS believes this process allows corporations to manage the licensing and registration process of thousands of sites efficiently. Thus, NACDS expressed its desire that DEA continue to permit registrants to submit batch applications.
NACDS argued, and DEA agrees, that this process streamlines the renewal process for both companies and DEA. Accordingly, DEA's online portal will accept online batch applications and single payments for batch renewals. After careful consideration, however, DEA has determined that it is not necessary to amend the proposed regulations on this point.
Next, NACDS asserted that, “[c]larity is needed regarding the rejection of an application submitted in a batch submission.” In particular, NACDS argued it is unclear whether individual applications in a batch could be rejected, or whether a single faulty application would cause its entire batch to be rejected. NACDS therefore proposes that DEA create an electronic means for registrants to correct issues with individual applications in a batch, rather than having to resubmit a batch or otherwise inhibit the application process.
Amending DEA regulations is unnecessary, as this comment displays a fundamental misunderstanding of the online application process itself. Step
Last, NACDS noted that in § 1309.12(b), the only payment option listed is “credit card.” NACDS thus assumed that the only form of payment DEA accepts is a credit card. NACDS noted that this would be troublesome for payments made in batch renewals (which can cost in excess of $1 million), as strict corporate policies and procedures often demand that large financial transactions be conducted via certified bank check.
DEA understands and appreciates the concerns expressed by NACDS, and has therefore amended § 1309.12(b) to provide that payment shall be made online by Automated Clearing House (ACH) funds transfer, by credit card, or by any other means made available at the time of submission using the secure application portal at
One commenter supported the proposed amendments, stating the rule would be beneficial given the utilization of modern technology to submit documents electronically, as is common among other agencies. Moreover, the commenter noted that processes that were traditionally done via mail, such as fingerprints and verification of payment, can easily be verified and submitted electronically. Last, the commenter noted that the rule would be beneficial given the “current situation and restrictions given in-person interaction.”
Another commenter supported the rule as a “good change for the DEA,” noting that it will prove better for the environment, more efficient, and that “online is the future.” The commenter does note, however, that there is a privacy concern given the potential for this information to be accessed via hacking. DEA routinely evaluates the security mechanisms of all of its electronic processes, and expends considerable time and resources to protect the privacy of all registrants and applicants.
Last, one citizen requested information as to where to locate DEA Form 225. Given the nature of the rulemaking process, DEA considers this comment to be a mistake, but nevertheless refers the commenter to
DEA has reviewed closely all comments, and decided to promulgate the regulations as written with the exception of permitting ACH funds transfers as a payment option. DEA appreciates the public's participation in the rulemaking process, and encourages the public to continue submitting comments in the future for all proposed rules.
This rule was promulgated in accordance with the principles of Executive Orders (E.O.) 12866 and 13563. E.O. 12866 directs agencies to assess all costs and benefits of available regulatory alternatives and, if regulation is necessary, to select regulatory approaches that maximize net benefits (including potential economic, environmental, public health, and safety effects; distributive impacts; and equity). E.O. 13563 is supplemental to and reaffirms the principles, structures, and definitions governing regulatory review established in E.O. 12866.
E.O. 12866 classifies a “significant regulatory action,” requiring review by the Office of Management and Budget (OMB), as any regulatory action that is likely to result in a rule that may: (1) Have an annual effect on the economy of $100 million or more or adversely affect in a material way the economy, a sector of the economy, productivity, competition, jobs, the environment, public health or safety, or State, local, or tribal governments or communities; (2) create a serious inconsistency or otherwise interfere with an action taken or planned by another agency; (3) materially alter the budgetary impact of entitlements, grants, user fees, or loan programs or the rights and obligations of recipients thereof; or (4) raise novel legal or policy issues arising out of legal mandates, the President's priorities, or the principles set forth in the E.O.
This final rule implements all of the changes discussed in the NPRM, and thus imposes no additional costs on registrants. OMB has determined that this final rule is not a “significant regulatory action” under E.O. 12866, section 3(f), Regulatory Planning and Review, and accordingly this rule has not been reviewed by OMB.
This rule meets the applicable standards set forth in sections 3(a) and 3(b)(2) of E.O. 12988, Civil Justice Reform to eliminate ambiguity, minimize litigation, establish clear legal standards, and reduce burdens. DEA expects the instant validation of online registration applications to reduce ambiguity and reduce the number of errors in submissions and reduce burdens on both DEA and registrants.
This rule does not have federalism implications warranting the application of E.O. 13132. The rule does not have substantial direct effects on the States, on the relationship between the National Government and the States, or on the distribution of power and responsibilities among the various levels of government.
The rule does not have substantial direct effects on one or more Indian tribes, on the relationship between the Federal Government and Indian tribes, or on the distribution of power and responsibilities between the Federal Government and Indian tribes.
The Regulatory Flexibility Act (RFA) requires an agency to analyze options for regulatory relief of small entities unless it can certify that the rule will not have a significant impact on substantial number of small entities. DEA has analyzed the economic impact of each provision of this rule and estimates that it will have minimal economic impact on affected entities, including small businesses, nonprofit
In accordance with the RFA, DEA reviewed the economic impact of this rule on small entities and evaluated the impact in the NPRM. DEA's economic impact evaluation indicated that the rule proposed in the NPRM would not have a significant economic impact on a substantial number of small entities. This conclusion applies equally to the final rule, which implements all of the changes discussed in the NPRM.
In accordance with the Unfunded Mandates Reform Act of 1995 (UMRA),
This rule modifies existing collection(s) of information required under the Paperwork Reduction Act (PRA).
DEA is amending its regulations for all new and renewal registration applications to implement the requirement of online submission through the DEA Diversion Control Division website. This amendment will improve the submission process by aligning it with the Administration's current requirements for other online form submissions. The online submission of DEA Forms 224/224a, 225/225a, 363/363a, 510/510a are now filed with DEA through the DEA Diversion Control Division secure network (available on the DEA Diversion Control Division website). The online submission of new and renewal applications will ensure the Administration's receipt of applications in a more timely and organized manner.
DEA solicited comments from the public regarding the following:
• Whether the proposed collection of information is necessary for the proper performance of the functions of DEA, including whether the information will have practical utility.
• The accuracy of DEA's estimate of the burden of the proposed collection of information, including the validity of the methodology and assumptions used.
• Recommendations to enhance the quality, utility, and clarity of the information to be collected.
• Recommendations to minimize the burden of the collection of information on those who are to respond, including through the use of automated collection techniques or other forms of information technology.
DEA solicited comments on the aforementioned subjects and received no comments. As a result, DEA is finalizing the collection with no changes.
This rulemaking is a “rule” pursuant to the Congressional Review Act, 5 U.S.C. 801
Administrative practice and procedure, Drug traffic control, Security measures.
Administrative practice and procedure, Drug traffic control, Exports, Imports, Security measures.
Administrative practice and procedure.
For the reasons stated in the preamble, DEA amends 21 CFR parts 1301, 1309, and 1321 as follows:
21 U.S.C. 821, 822, 823, 824, 831, 871(b), 875, 877, 886a, 951, 952, 956, 957, 958, 965 unless otherwise noted.
(e) * * *
(2) DEA Forms 224, 225, and 363 may be obtained online at
(3) DEA will send renewal notifications via email to registrants approximately 60 calendar days prior to their registration expiration date. Registrants are responsible for maintaining a current email address in application portal on DEA's website. DEA Forms 224a, 225a, and 363a may be obtained online at
The revisions read as follows:
(a) All applications for registration shall be submitted for filing online using the secure application portal at
(b) Application submitted for filing are dated by the system upon receipt. If found to be complete, the application will be accepted for filing. Applications failing to comply with the requirements of this part will be rejected by the system, with the applicate receiving error messages at the time of application.
21 U.S.C. 802, 821, 822, 823, 824, 830, 871(b), 875, 877, 886a, 952, 953, 957, 958.
(a) For each application for registration or reregistration to manufacture, distribute, import, or export the applicant shall pay the fee when the application for registration or reregistration is submitted for filing online using the secure application portal at
(b) Payment shall be made online by Automated Clearing House funds transfer, by credit card, or by any other means made available at the time of submission using the secure application portal at
(a) Any person who is required to be registered pursuant to § 1309.21 and is not so registered, shall apply on DEA Form 510 using the secure application portal at
(b) Any person who is registered pursuant to § 1309.21, shall apply for reregistration on DEA Form 510a using the secure application portal at
(c) DEA Forms 510 and 510a may be obtained online at
All applications for registration shall be submitted online at
(a) Applications submitted for filing are dated upon receipt. If the application is found to be complete, the application will be accepted for filing. Applications failing to comply with the requirements of this part will not be accepted for filing.
21 U.S.C. 871(b).
National Archives and Records Administration (NARA).
Final rule.
We are amending our regulations on general procedures applying to guidance documents NARA and its components issue. We are removing provisions added to comply with requirements in the Executive order of October 9, 2019, “Promoting the Rule of Law through Improved Agency Guidance Documents,” which was revoked by the Executive order of January 20, 2021, “Revocation of Certain Executive Orders Concerning Federal Regulation.”
This rule is effective on May 11, 2022.
Regulatory and External Policy Program (MP), Suite 4100, National Archives and Records Administration, 8601 Adelphi Road, College Park, MD 20740-6001.
Kimberly Keravuori, Regulatory and External Policy Program Manager, by
The Office of Management and Budget (OMB) has reviewed this rulemaking and determined it is not “significant” under section 3(f) of Executive Order 12866. It is not significant because it involves agency internal procedures and is minor and administrative in nature and the changes are being made to align with the executive order. There is also not a public comment period on this revision, for good cause.
This review requires an agency to prepare an initial regulatory flexibility analysis and publish it when the agency publishes the proposed rule. This requirement does not apply if the agency certifies that the rulemaking will not, if promulgated, have a significant economic impact on a substantial number of small entities (5 U.S.C. 603). We certify, after review and analysis, that this rulemaking will not have a significant adverse economic impact on small entities.
The Paperwork Reduction Act of 1995 (PRA) (44 U.S.C. 3501,
Executive Order 13132 requires agencies to ensure state and local officials have the opportunity for meaningful and timely input when developing regulatory policies that may have a substantial, direct effect on the states, on the relationship between the Federal Government and the states, or on the distribution of power and responsibilities among the various levels of government. If the effects of the rule on state and local governments are sufficiently substantial, the agency must prepare a Federal assessment to assist senior policy makers. This rulemaking will not have any effects on state and local governments within the meaning of the E.O. Therefore, no federalism assessment is required.
The Unfunded Mandates Reform Act requires that agencies determine whether any Federal mandate in the rulemaking may result in state, local, and tribal governments, in the aggregate, or the private sector, expending $100 million in any one year. NARA certifies that this rulemaking does not contain a Federal mandate that may result in such an expenditure.
Administrative practice and procedure.
For the reasons discussed in the preamble, NARA amends 36 CFR part 1213 as follows:
44 U.S.C. 2104(a).
Environmental Protection Agency (EPA).
Direct final rule.
With this direct final rule, the Environmental Protection Agency (EPA or the “Agency”) is promulgating approval of South Dakota's submittal requesting that EPA recognize the merger of South Dakota's Department of Agriculture (DOA) with the Department of Environment and Natural Resources (DENR) to form the new Department of Agriculture and Natural Resources (DANR) and incorporate corresponding non-substantive revisions to the South Dakota Codified Law (SDCL) and the Administrative Rules of South Dakota (ARSD) into South Dakota's Implementation Plan. Accordingly, EPA is taking this final action in accordance with Clean Air Act (CAA).
This direct final rule is effective on June 10, 2022 without further notice, unless EPA receives adverse written comments on or before May 11, 2022. If adverse comments are received, EPA will publish a timely withdrawal of the direct final rule in the
EPA has established a docket for this action under Docket ID No. EPA-R08-OAR-2021-0807. All documents in the docket are listed in the
Kate Gregory, Air and Radiation Division, U.S. Environmental Protection Agency (EPA), Region 8, Mail Code 8P-ARD-QP, 1595 Wynkoop Street, Denver, Colorado 80202-1129, telephone number: (303) 312-6175, email address:
Throughout this document “we,” “us,” and “our” means EPA.
EPA is publishing this rule without prior proposal because the Agency views this as a noncontroversial action and anticipates no adverse comments. However, in the Proposed Rules section of this issue of the
On April 16, 2021, South Dakota's Office of Attorney General submitted a letter notifying EPA of the establishment of the South Dakota DANR. The letter stated that on January 19, 2021, South Dakota Governor, Kristi Noem, executed Executive Order 2021-03, which provided for the merger of the South Dakota DOA and the South Dakota DENR into one department—the DANR. According to the South Dakota Constitution, executive reorganization orders become effective “within ninety days after submission” of the executive order to the South Dakota Legislature (Legislature) unless one of the two houses of the Legislature disapproves of the executive reorganization (S.D. Constitution, Article IV, Section 8).
In the letter submitted by the South Dakota Office of Attorney General, Assistant Attorney General Steven R. Blair stated that all State programs previously authorized to carry out EPA programs would continue to function in the same manner and all current environmental protection activities conducted under existing EPA approved or delegated programs under the DOA and/or the DENR would continue intact under the newly established DANR. Further, Mr. Blair stated that the merger caused no substantive budgetary or personnel changes, that the new DANR has all the authorities, powers, and duties of the previous DOA and DENR, and that the laws in effect at the time EPA approved or delegated authority to DOA and/or DENR continue to be fully effective and enforceable. Mr. Blair explained that the merger did not require any substantive changes to state law or administrative rules; the statutes and rules were merely updated to reflect the name of the new department.
On January 21, 2022, pursuant to 40 CFR part 51, South Dakota submitted a request that EPA recognize the merger of South Dakota's DOA with the DENR to form the new DANR and incorporate corresponding revisions to the SDCL and the ARSD into South Dakota's Implementation Plan at 40 CFR 52.2170. The January 21, 2022 submission included a letter from the Secretary of the DANR, Hunter Roberts, as the Governor's designee.
South Dakota's submittal included clean and redlined copies of the revised SDCL and ARSD, which are available in the docket for this action. The non-substantive revisions became effective on April 19, 2021.
The SDCL and ARSD approved into South Dakota's SIP as revised are listed in Table 1 below.
South Dakota submitted the necessary information for EPA to review the non-substantive revisions to South Dakota's statutes and administrative rules to reflect the merger of South Dakota's DOA with the DENR to form the new DANR. With the exception of 74:37:01:08, which is part of South Dakota's approved CAA title V program rather than part of South Dakota's approved SIP, EPA is now acting to approve the non-substantive revisions to the SDCL and ARSD air pollution control rules into the SIP at 40 CFR 52.2170.
In this document, EPA is finalizing regulatory text in an EPA final rule that includes incorporation by reference. In accordance with the requirements of 1 CFR 5.15, EPA is finalizing the incorporation by reference of the regulations described in section III of
Under the CAA, the Administrator is required to approve a SIP submission that complies with the provisions of the Act and applicable Federal regulations. 42 U.S.C. 7410(k); 40 CFR 52.02(a). Thus, in reviewing SIP submissions, EPA's role is to approve state choices, provided that they meet the criteria of the CAA. Accordingly, this action merely proposes to approve state law as meeting Federal requirements and does not impose additional requirements beyond those imposed by state law. For that reason, this action:
• Is not a “significant regulatory action” subject to review by the Office of Management and Budget under Executive Orders 12866 (58 FR 51735, October 4, 1993) and 13563 (76 FR 3821, January 21, 2011);
• Does not impose an information collection burden under the provisions of the Paperwork Reduction Act (44 U.S.C. 3501
• Is certified as not having a significant economic impact on a substantial number of small entities under the Regulatory Flexibility Act (5 U.S.C. 601
• Does not contain any unfunded mandate or significantly or uniquely affect small governments, as described in the Unfunded Mandates Reform Act of 1995 (Pub. L. 104-4);
• Does not have Federalism implications as specified in Executive Order 13132 (64 FR 43255, August 10, 1999);
• Is not an economically significant regulatory action based on health or safety risks subject to Executive Order 13045 (62 FR 19885, April 23, 1997);
• Is not a significant regulatory action subject to Executive Order 13211 (66 FR 28355, May 22, 2001);
• Is not subject to requirements of section 12(d) of the National Technology Transfer and Advancement Act of 1995 (15 U.S.C. 272 note) because application of those requirements would be inconsistent with the CAA; and
• Does not provide EPA with the discretionary authority to address, as appropriate, disproportionate human health or environmental effects, using practicable and legally permissible methods, under Executive Order 12898 (59 FR 7629, February 16, 1994).
In addition, the SIP is not approved to apply on any Indian reservation land or in any other area where EPA or an Indian tribe has demonstrated that a tribe has jurisdiction. In those areas of Indian country, the proposed rule does not have tribal implications and will not impose substantial direct costs on tribal governments or preempt tribal law as specified by Executive Order 13175 (65 FR 67249, November 9, 2000).
The Congressional Review Act, 5 U.S.C. 801
Under section 307(b)(1) of the Clean Air Act, petitions for judicial review of this action must be filed in the United States Court of Appeals for the appropriate circuit by June 10, 2022. Filing a petition for reconsideration by the Administrator of this final rule does not affect the finality of this action for the purposes of judicial review nor does it extend the time within which a petition for judicial review may be filed, and shall not postpone the effectiveness of such rule or action. This action may not be challenged later in proceedings to enforce its requirements (see section 307(b)(2)).
Environmental protection, Air pollution control, Carbon monoxide, Greenhouse gases, Incorporation by reference, Intergovernmental relations, Lead, Nitrogen dioxide, Ozone, Particulate matter, Reporting and recordkeeping requirements, Sulfur oxides, Volatile organic compounds.
42 U.S.C. 7401
40 CFR part 52 is amended as follows:
42 U.S.C. 7401
The revision and addition read as follows:
(c) * * *
(e) * * *
Environmental Protection Agency (EPA).
Final rule.
The Environmental Protection Agency (EPA) finds that the Chicago-Naperville, IL-IN-WI area (Chicago area) is attaining the 2008 ozone National Ambient Air Quality Standard (NAAQS or standard) and, in response to a request from the Wisconsin Department of Natural Resources (Wisconsin or the State), is redesignating the Wisconsin portion of the area to attainment for the 2008 ozone NAAQS, because the State has met the statutory requirements for redesignation under the Clean Air Act (CAA). EPA is approving, as a revision to the Wisconsin State Implementation Plan (SIP), the State's plan for maintaining the 2008 ozone NAAQS through 2035 for the Wisconsin portion of the Chicago area. EPA finds adequate and is approving Wisconsin's 2030 and 2035 volatile organic compound (VOC) and oxides of nitrogen (NO
This final rule is effective on April 11, 2022.
EPA has established a docket for this action under Docket ID No. EPA-R05-OAR-2021-0885. All documents in the docket are listed on the
Michael Leslie, Environmental Engineer, Control Strategies Section, Air Programs Branch (AR18J), Environmental Protection Agency, Region 5, 77 West Jackson Boulevard, Chicago, Illinois 60604, (312) 353-6680,
Throughout this document whenever “we,” “us,” or “our” is used, we mean EPA.
On February 7, 2022 (87 FR 6006), EPA proposed to find that the Chicago area is attaining the 2008 ozone NAAQS, in response to a request from the Wisconsin, and is redesignating the Wisconsin portion of the area to attainment for the 2008 ozone NAAQS, because the State has met the statutory requirements for redesignation under the CAA. The Wisconsin portion of the Chicago 2008 ozone area consists of the portion of Kenosha County bounded by the I-94 corridor and the area east to Lake Michigan (Wisconsin portion). Wisconsin submitted this request on December 3, 2021. EPA proposed to approve, as a revision to the Wisconsin SIP, the State's plan for maintaining the 2008 ozone NAAQS through 2035 for the Wisconsin portion. EPA also proposed to approve and find adequate Wisconsin's 2030 and 2035 VOC and NO
EPA is determining that the Chicago area is attaining the 2008 ozone NAAQS, based on quality-assured and certified monitoring data for the 2019-2021 period. EPA is approving enhanced I/M revision included in Wisconsin's December 3, 2021 submittal because Wisconsin demonstrated that its current I/M program meets the applicable enhanced I/M performance standard requirements in 40 CFR part 51, subpart S, for the 2008 ozone NAAQS. EPA has determined that the Wisconsin portion of the Chicago area has met the requirements for redesignation under section 107(d)(3)(E) of the CAA. EPA is thus changing the legal designation for the Wisconsin portion of the Chicago-Naperville, IL-IN-WI area from nonattainment to attainment for the 2008 ozone NAAQS. EPA is also approving, as a revision to the Wisconsin SIP, the State's maintenance plan for the area. The maintenance plan is designed to keep the Wisconsin portion of the Chicago area in attainment of the 2008 ozone NAAQS through 2035. Finally, EPA is finding adequate and approving the newly established 2030 and 2035 Budgets for the Wisconsin portion of the Chicago area.
In accordance with 5 U.S.C. 553(d) of the Administrative Procedure Act (APA), EPA finds there is good cause for this action to become effective immediately upon publication. The immediate effective date for this action is authorized under 5 U.S.C. 553(d)(1).
Section 553(d)(1) of the APA provides that final rules shall not become effective until 30 days after publication in the
Under the CAA, redesignation of an area to attainment and the accompanying approval of a maintenance plan under section 107(d)(3)(E) are actions that affect the status of a geographical area and do not impose any additional regulatory requirements on sources beyond those imposed by state law. A redesignation to attainment does not in and of itself create any new requirements, but rather results in the applicability of requirements contained in the CAA for areas that have been redesignated to attainment. Moreover, the Administrator is required to approve a SIP submission that complies with the provisions of the CAA and applicable Federal regulations. 42 U.S.C. 7410(k); 40 CFR 52.02(a). Thus, in reviewing SIP submissions, EPA's role is to approve state choices, provided that they meet the criteria of the CAA. Accordingly, this action merely approves state law as meeting Federal requirements and does not impose additional requirements beyond those imposed by state law. For that reason, this action:
• Is not a significant regulatory action subject to review by the Office of Management and Budget under Executive Orders 12866 (58 FR 51735, October 4, 1993) and 13563 (76 FR 3821, January 21, 2011);
• Does not impose an information collection burden under the provisions of the Paperwork Reduction Act (44 U.S.C. 3501
• Is certified as not having a significant economic impact on a substantial number of small entities under the Regulatory Flexibility Act (5 U.S.C. 601
• Does not contain any unfunded mandate or significantly or uniquely affect small governments, as described in the Unfunded Mandates Reform Act of 1995 (Pub. L. 104-4);
• Does not have federalism implications as specified in Executive Order 13132 (64 FR 43255, August 10, 1999);
• Is not an economically significant regulatory action based on health or safety risks subject to Executive Order 13045 (62 FR 19885, April 23, 1997);
• Is not a significant regulatory action subject to Executive Order 13211 (66 FR 28355, May 22, 2001);
• Is not subject to requirements of Section 12(d) of the National Technology Transfer and Advancement Act of 1995 (15 U.S.C. 272 note) because application of those requirements would be inconsistent with the CAA; and
• Does not provide EPA with the discretionary authority to address, as appropriate, disproportionate human health or environmental effects, using practicable and legally permissible methods, under Executive Order 12898 (59 FR 7629, February 16, 1994).
In addition, the SIP is not approved to apply on any Indian reservation land or in any other area where EPA or an Indian tribe has demonstrated that a tribe has jurisdiction. In those areas of Indian country, the rule does not have tribal implications and will not impose substantial direct costs on tribal governments or preempt tribal law as specified by Executive Order 13175 (65 FR 67249, November 9, 2000).
This action is subject to the Congressional Review Act, and EPA will submit a rule report to each House of the Congress and to the Comptroller General of the United States. This action is not a “major rule” as defined by 5 U.S.C. 804(2).
Under section 307(b)(1) of the CAA, petitions for judicial review of this action must be filed in the United States Court of Appeals for the appropriate circuit by June 10, 2022. Filing a petition for reconsideration by the Administrator of this final rule does not affect the finality of this action for the purposes of judicial review nor does it extend the time within which a petition for judicial review may be filed, and shall not postpone the effectiveness of such rule or action. This action may not be challenged later in proceedings to enforce its requirements. (
Environmental protection, Air pollution control, Incorporation by reference, Intergovernmental relations, Ozone, Reporting and recordkeeping requirements, Volatile organic compounds.
Environmental protection, Air pollution control, National parks, Wilderness areas.
For the reasons stated in the preamble, 40 CFR parts 52 and 81 are amended as follows:
42 U.S.C. 7401
(ss)
42 U.S.C. 7401,
Federal Communications Commission.
Final rule.
On January 11, 2022, the Media Bureau, Video Division (Bureau) issued a
Effective April 11, 2022.
Joyce Bernstein, Media Bureau, at (202) 418-1647 or
The proposed rule was published at 87 FR 3489 on January 24, 2022. The Petitioner filed comments in support of the petition reaffirming its commitment to apply for channel 24. No other comments were filed. In support of its channel substitution request, the Petitioner states that the Station has a long history of significant reception problems given the local terrain, specifically the proximity of the Green, Berkshire, Catskill, and Adirondack mountain ranges and that these problems were exacerbated by the station's conversion from analog to digital operations on VHF channel 12, when it received numerous complaints from viewers about the station's over-the-air signal. In response to these complaints, the Petitioner applied for and received modification authorizations to increase the Station's effective radiated power (ERP) from 9.1 kW to 30 kW. According to the Petitioner, its proposal will result in a net gain in service to 289,588 persons within the Station's predicted noise limited service contour. While the proposal will result in a loss population of 210 persons within the predicted noise limited contour, the Petitioner demonstrated that the population within the loss area is currently served by at least five over-the-air television services. In addition, the Station is an NBC affiliate, and the Petitioner submitted an analysis, using the Commission's
This is a synopsis of the Commission's
This document does not contain information collection requirements subject to the Paperwork Reduction Act of 1995, Public Law 104-13. In addition, therefore, it does not contain any proposed information collection burden “for small business concerns with fewer than 25 employees,” pursuant to the Small Business Paperwork Relief Act of 2002, Public Law 107-198,
The Commission will send a copy of the
Television.
For the reasons discussed in the preamble, the Federal Communications Commission amends 47 CFR part 73 as follows:
47 U.S.C. 154, 155, 301, 303, 307, 309, 310, 334, 336, 339.
(j) * * *
Federal Communications Commission.
Final rule.
On January 26, 2022, the Media Bureau, Video Division (Bureau) issued a
Effective April 11, 2022.
Joyce Bernstein, Media Bureau, at (202) 418-1647 or
The proposed rule was published at 87 FR 6473 on February 4, 2022. The Petitioner filed comments in support of the petition reaffirming its commitment to apply for channel 20. No other comments were filed. In support of its channel substitution request, the Petitioner states that the Commission has recognized that VHF channels have certain characteristics that pose challenges for their use in providing digital television service, including propagation characteristics that allow undesired signals and noise to be receivable at relatively far distances, and that the Station has received many complaints from viewers unable to receive a reliable signal on channel 10. An analysis using the Commission's
This is a synopsis of the Commission's
This document does not contain information collection requirements subject to the Paperwork Reduction Act of 1995, Public Law 104-13. In addition, therefore, it does not contain any proposed information collection burden “for small business concerns with fewer than 25 employees,” pursuant to the Small Business Paperwork Relief Act of 2002, Public Law 107-198,
The Commission will send a copy of the
Television.
For the reasons discussed in the preamble, the Federal Communications Commission amends 47 CFR part 73 as follows:
47 U.S.C. 154, 155, 301, 303, 307, 309, 310, 334, 336, 339.
(j) * * *
National Marine Fisheries Service (NMFS), National Oceanic and Atmospheric Administration (NOAA), Commerce.
Temporary rule; closure.
NMFS is prohibiting directed fishing for Pacific cod by catcher vessels using trawl gear in the Western Regulatory Area of the Gulf of Alaska (GOA). This action is necessary to prevent exceeding the A season allowance of the 2022 total allowable catch of Pacific cod by catcher vessels using trawl gear in the Western Regulatory Area of the GOA.
Effective 1200 hours, Alaska local time (A.l.t.), April 6, 2022, through 1200 hours, A.l.t., June 10, 2022.
Krista Milani, 907-581-2062.
NMFS manages the groundfish fishery in the GOA exclusive economic zone according to the Fishery Management Plan for Groundfish of the Gulf of Alaska (FMP) prepared by the North Pacific Fishery Management 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.
The A season allowance of the 2022 Pacific cod total allowable catch (TAC) apportioned to catcher vessels using trawl gear in the Western Regulatory Area of the GOA is 2,118 metric tons (mt) as established by the final 2022 and 2023 harvest specifications for groundfish in the GOA (87 FR 11599, March 2, 2022).
In accordance with § 679.20(d)(1)(i), the Regional Administrator has determined that the A season allowance of the 2022 Pacific cod TAC apportioned to catcher vessels using trawl gear in the Western Regulatory Area of the GOA will soon be reached. Therefore, the Regional Administrator is establishing a directed fishing allowance of 2,018 mt and is setting aside the remaining 100 mt as bycatch to support other anticipated groundfish fisheries. In accordance with § 679.20(d)(1)(iii), the Regional Administrator finds that this directed fishing allowance has been reached. Consequently, NMFS is prohibiting directed fishing for Pacific cod by catcher vessels using trawl gear in the Western Regulatory Area of the GOA.
While this closure is effective the maximum retainable amounts at § 679.20(e) and (f) apply at any time during a trip.
NMFS issues this action pursuant to section 305(d) of the Magnuson-Stevens Act. This action is required by 50 CFR part 679, which was issued pursuant to section 304(b), and is exempt from review under Executive Order 12866.
Pursuant to 5 U.S.C. 553(b)(B), there is good cause to waive prior notice and an opportunity for public comment on this action, as notice and comment would be 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 closure of Pacific cod by catcher vessels using trawl gear in the Western Regulatory Area of the GOA. NMFS was unable to publish a notice providing time for public comment because the most recent, relevant data only became available as of April 5, 2022.
The Assistant Administrator for Fisheries, NOAA 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.
16 U.S.C. 1801
Federal Aviation Administration (FAA), DOT.
Notice of proposed rulemaking (NPRM).
The FAA proposes to adopt a new airworthiness directive (AD) for all The Boeing Company Model 757 airplanes. This proposed AD was prompted by a report of cracks found in the fastener holes at a certain location on the center wing box rear spar, lower skin. This proposed AD would require repetitive inspections for cracking of certain areas of the center wing box rear spar, lower skin and lower chord; and repair. The FAA is proposing this AD to address the unsafe condition on these products.
The FAA must receive comments on this proposed AD by May 26, 2022.
You may send comments, using the procedures found in 14 CFR 11.43 and 11.45, by any of the following methods:
•
•
•
•
For service information identified in this NPRM, contact Boeing Commercial Airplanes, Attention: Contractual & Data Services (C&DS), 2600 Westminster Blvd., MC 110-SK57, Seal Beach, CA 90740-5600; telephone 562-797-1717; internet
You may examine the AD docket at
Peter Jarzomb, Aerospace Engineer, Airframe Section, FAA, Los Angeles ACO Branch, 3960 Paramount Boulevard, Lakewood, CA 90712-4137; phone: 562-627-5234; email:
The FAA invites you to send any written relevant data, views, or arguments about this proposal. Send your comments to an address listed under
Except for Confidential Business Information (CBI) as described in the following paragraph, and other information as described in 14 CFR 11.35, the FAA will post all comments received, without change, to
CBI is commercial or financial information that is both customarily and actually treated as private by its owner. Under the Freedom of Information Act (FOIA) (5 U.S.C. 552), CBI is exempt from public disclosure. If your comments responsive to this NPRM contain commercial or financial information that is customarily treated as private, that you actually treat as private, and that is relevant or responsive to this NPRM, it is important that you clearly designate the submitted comments as CBI. Please mark each page of your submission containing CBI as “PROPIN.” The FAA will treat such marked submissions as confidential under the FOIA, and they will not be placed in the public docket of this NPRM. Submissions containing CBI should be sent to Peter Jarzomb, Aerospace Engineer, Airframe Section, FAA, Los Angeles ACO Branch, 3960 Paramount Boulevard, Lakewood, CA 90712-4137; phone: 562-627-5234; email:
The FAA has received a report of cracks found in the fastener holes at the center wing box rear spar, lower skin, located at left body buttock line (LBBL) 6.50, on a Model 737-300 airplane. The lower skin cracks were hidden between the center wing box lower chord on the upper surface and the keel beam upper chord on the lower surface. An analysis by Boeing showed the same condition can occur on Model 757 airplanes. This condition, if not addressed, could result in the inability of a principal structural element to sustain limit load, which could adversely affect the structural integrity of the airplane.
The FAA is issuing this NPRM after determining that the unsafe condition described previously is likely to exist or develop on other products of the same type design.
The FAA reviewed Boeing Alert Requirements Bulletin 757-57A0075 RB, dated August 25, 2021. This service information specifies procedures for repetitive external high-frequency eddy current (HFEC) or internal detailed inspections for cracking in the center wing box rear spar, lower skin, and lower chord between LBBL 9.5 and 39.0 and right body buttock line (RBBL) 9.5 and 39.0; repetitive internal ultrasonic inspection of the center wing box lower chord and detailed inspections of the lower skin at the rear spar between LBBL 5.5 and LBBL 9.5, and between RBBL 5.5 and RBBL 9.5 for cracking; repetitive internal detailed inspection of the center wing box lower skin and rear spar lower chord between LBBL 5.5 and RBBL 5.5 for any cracking; and repair. This service information is reasonably available because the interested parties have access to it through their normal course of business or by the means identified in
This proposed AD would require accomplishing the actions specified in the service information already described except for any differences identified as exceptions in the regulatory text of this proposed AD. For information on the procedures and compliance times, see this service information at
The FAA estimates that this AD, if adopted as proposed, would affect 477 airplanes of U.S. registry. The FAA estimates the following costs to comply with this proposed AD:
The FAA has received no definitive data on which to base the cost estimates for the on-condition repairs specified in this proposed AD.
Title 49 of the United States Code specifies the FAA's authority to issue rules on aviation safety. Subtitle I, section 106, describes the authority of the FAA Administrator. Subtitle VII: Aviation Programs, describes in more detail the scope of the Agency's authority.
The FAA is issuing this rulemaking under the authority described in Subtitle VII, Part A, Subpart III, Section 44701: General requirements. Under that section, Congress charges the FAA with promoting safe flight of civil aircraft in air commerce by prescribing regulations for practices, methods, and procedures the Administrator finds necessary for safety in air commerce. This regulation is within the scope of that authority because it addresses an unsafe condition that is likely to exist or develop on products identified in this rulemaking action.
The FAA determined that this proposed AD would not have federalism implications under Executive Order 13132. This proposed AD would not have a substantial direct effect on the States, on the relationship between the national Government and the States, or on the distribution of power and responsibilities among the various levels of government.
For the reasons discussed above, I certify this proposed regulation:
(1) Is not a “significant regulatory action” under Executive Order 12866,
(2) Would not affect intrastate aviation in Alaska, and
(3) Would not have a significant economic impact, positive or negative, on a substantial number of small entities under the criteria of the Regulatory Flexibility Act.
Air transportation, Aircraft, Aviation safety, Incorporation by reference, Safety.
Accordingly, under the authority delegated to me by the Administrator, the FAA proposes to amend 14 CFR part 39 as follows:
49 U.S.C. 106(g), 40113, 44701.
The FAA must receive comments on this airworthiness directive (AD) by May 26, 2022.
None.
This AD applies to all The Boeing Company Model 757-200, -200PF, -200CB, and -300 series airplanes, certificated in any category.
Air Transport Association (ATA) of America Code 57, Wings.
This AD was prompted by a report of cracks found in the fastener holes at a certain location on the center wing box rear spar, lower skin. The FAA is issuing this AD to detect and correct cracking that, if undetected, could result in the inability of a principal structural element to sustain limit load, which could adversely affect the structural integrity of the airplane.
Comply with this AD within the compliance times specified, unless already done.
Except as specified by paragraph (h) of this AD: At the applicable times specified in the “Compliance” paragraph of Boeing Alert Requirements Bulletin 757-57A0075 RB, dated August 25, 2021, do all applicable actions identified in, and in accordance with, the Accomplishment Instructions of Boeing Alert Requirements Bulletin 757-57A0075 RB, dated August 25, 2021.
(1) Where the Compliance Time columns of the tables in the “Compliance” paragraph of Boeing Alert Requirements Bulletin 757-57A0075 RB, dated August 25, 2021, use the phrase “the original issue date of Requirements Bulletin 757-57A0075 RB,” this AD requires using “the effective date of this AD.”
(2) Where Boeing Alert Requirements Bulletin 757-57A0075 RB, dated August 25, 2021, specifies contacting Boeing for repair instructions: This AD requires doing the repair before further flight using a method approved in accordance with the procedures specified in paragraph (i) of this AD.
(1) The Manager, Los Angeles ACO Branch, FAA, has the authority to approve AMOCs for this AD, if requested using the procedures found in 14 CFR 39.19. In accordance with 14 CFR 39.19, send your request to your principal inspector or responsible Flight Standards Office, as appropriate. If sending information directly to the manager of the certification office, send it to the attention of the person identified in paragraph (j) of this AD. Information may be emailed to:
(2) Before using any approved AMOC, notify your appropriate principal inspector, or lacking a principal inspector, the manager of the responsible Flight Standards Office.
(3) An AMOC that provides an acceptable level of safety may be used for any repair, modification, or alteration required by this AD if it is approved by The Boeing Company Organization Designation Authorization (ODA) that has been authorized by the Manager, Los Angeles ACO Branch, FAA, to make those findings. To be approved, the repair method, modification deviation, or alteration deviation must meet the certification basis of the airplane, and the approval must specifically refer to this AD.
(1) For more information about this AD, contact Peter Jarzomb, Aerospace Engineer, Airframe Section, FAA, Los Angeles ACO Branch, 3960 Paramount Boulevard, Lakewood, CA 90712-4137; phone: 562-627-5234; email:
(2) For service information identified in this AD, contact Boeing Commercial Airplanes, Attention: Contractual & Data Services (C&DS), 2600 Westminster Blvd., MC 110-SK57, Seal Beach, CA 90740-5600; telephone 562-797-1717; internet
Federal Aviation Administration (FAA), DOT.
Notice of proposed rulemaking (NPRM).
The FAA proposes to adopt a new airworthiness directive (AD) for certain Piaggio Aero Industries S.p.A (Piaggio) Model P-180 airplanes. This proposed AD results from mandatory continuing airworthiness information (MCAI) originated by an aviation authority of another country to identify and correct an unsafe condition on an aviation product. The MCAI identifies the unsafe condition as accumulation of water and subsequent freezing in the pitot-tube, which results in pitot-tube blockage. This proposed AD would require modifying the total air temperature (TAT) probe heater electrical circuit and revising your existing airplane flight manual (AFM). The FAA is proposing this AD to address the unsafe condition on these products.
The FAA must receive comments on this proposed AD by May 26, 2022.
You may send comments, using the procedures found in 14 CFR 11.43 and 11.45, by any of the following methods:
•
•
•
•
For service information identified in this NPRM, contact Piaggio Aero Industries S.p.A, P-180 Customer Support, Via Pioieri e Aviatori d'Italia snc, 16154 Genoa, Italy; phone: +39 010 099 8400; email:
You may examine the AD docket at
Mike Kiesov, Aviation Safety Engineer, General Aviation & Rotorcraft Section, International Validation Branch, FAA, 901 Locust, Room 301, Kansas City, MO 64106; phone: (816) 329-4144; email:
The FAA invites you to send any written relevant data, views, or arguments about this proposal. Send your comments to an address listed under
Except for Confidential Business Information (CBI) as described in the
CBI is commercial or financial information that is both customarily and actually treated as private by its owner. Under the Freedom of Information Act (FOIA) (5 U.S.C. 552), CBI is exempt from public disclosure. If your comments responsive to this NPRM contain commercial or financial information that is customarily treated as private, that you actually treat as private, and that is relevant or responsive to this NPRM, it is important that you clearly designate the submitted comments as CBI. Please mark each page of your submission containing CBI as “PROPIN.” The FAA will treat such marked submissions as confidential under the FOIA, and they will not be placed in the public docket of this NPRM. Submissions containing CBI should be sent to Mike Kiesov, Aviation Safety Engineer, General Aviation & Rotorcraft Section, International Validation Branch, FAA, 901 Locust, Room 301, Kansas City, MO 64106. Any commentary that the FAA receives which is not specifically designated as CBI will be placed in the public docket for this rulemaking.
The European Union Aviation Safety Agency (EASA), which is the Technical Agent for the Member States of the European Union, has issued EASA AD 2019-0144, dated June 19, 2019 (referred to after this as “the MCAI”), to address an unsafe condition on all Piaggio Model P.180 Avanti and Avanti II airplanes. The MCAI states:
Occurrences of pitot-tube blockage were reported, leading to in-flight air data loss. Investigation results indicated that accumulation of water and subsequent freezing was the failure cause.
This condition, if not corrected, could lead to unreliable indication or loss of in-flight air data provided by systems deriving their data from measuring air pressure, possibly resulting in loss of control of the aeroplane.
To address this potentially unsafe condition, Piaggio issued the applicable AFM TC [Piaggio Aviation P.180 AVANTI II/EVO Temporary Change 79, dated September 17, 2018; and Piaggio Aviation P.180 AVANTI Temporary Change No. 36 and No. 79], providing instructions to switch on pitot-tube heater before taxi if operation in heavy rain, snow or icing condition is expected. To prevent concurrent activation of TAT probe heater on ground, which could lead to temporary air data indications failure, Piaggio issued the applicable SBs [Piaggio Service Bulletin No. 80-0430 Revision 1 and Piaggio Service Bulletin No. 80-0457, original issue], providing modification instructions to inhibit on-ground power supply to TAT probe heater, when the pitot-tube heater is activated.
For the reasons described above, this [EASA] AD requires amendment of the applicable AFM and, for certain aeroplanes, modification of the TAT probe heater electrical circuit.
You may examine the MCAI in the AD docket at
The FAA reviewed Piaggio Aviation S.p.A. Service Bulletin No. 80-0430, Revision 1, dated April 30, 2019; and Piaggio Aero Industries S.p.A. Service Bulletin No. 80-0457, Revision 1, dated February 12, 2020. These service bulletins specify procedures for modifying the TAT heater circuit in order to inhibit its engagement on the ground when the pitot heater is turned on. These documents are distinct because they apply to airplanes in different configurations.
The FAA reviewed Piaggio Aviation P.180 AVANTI II/EVO Temporary Change No. 79, dated September 17, 2018. Temporary Change (TC) 79 revises the Limitations and Normal Procedures sections of the existing AFM to include updated procedures for airplane operation when the modification for inhibition of the TAT heater (on ground) has been installed.
The FAA also reviewed Piaggio Aviation P.180 AVANTI Temporary Change No. 36, dated April 11, 2019. TC 36 revises the Emergency and Normal Procedures sections of the existing AFM to include additional procedures to avoid air data computer (ADC) failure due to water trapped and frozen in pitot lines.
This service information is reasonably available because the interested parties have access to it through their normal course of business or by the means identified in the
The FAA reviewed Piaggio Aero Industries Service Bulletin No. 80-0454, Revision 0, dated March 6, 2017; Piaggio Aero Industries S.p.A. Service Bulletin No. 80-0425, Revision 0, dated May 30, 2017; and Piaggio Aero Industries S.p.A. Service Bulletin No. 80-0425, Revision 2, dated June 4, 2018. This service information specifies procedures for replacing the Messier-Dowty nose and main landing gear and steering system with a Magnaghi nose and main landing gear and Eaton steering system.
The FAA also reviewed Piaggio Aero Industries S.p.A. Service Bulletin No. 80-0430, Revision 0, dated August 10, 2017. This service information specifies procedures for modifying the TAT heater circuit in order to inhibit its engagement on the ground when the pitot heater is turned on.
This product has been approved by the aviation authority of another country and is approved for operation in the United States. Pursuant to the FAA's bilateral agreement with this State of Design Authority, it has notified the FAA of the unsafe condition described in the MCAI and service information referenced above. The FAA is issuing this NPRM after determining the unsafe condition described previously is likely to exist or develop on other products of the same type design.
This proposed AD would require accomplishing the actions specified in the service information already described.
The MCAI requires informing all flight crews of the AFM revisions and operating accordingly thereafter, and this proposed AD would not because those actions are already required by FAA operating regulations.
The FAA estimates that this AD, if adopted as proposed, would affect 101 airplanes of U.S. registry. The FAA estimates the following costs to comply with this proposed AD:
Title 49 of the United States Code specifies the FAA's authority to issue rules on aviation safety. Subtitle I, section 106, describes the authority of the FAA Administrator. Subtitle VII: Aviation Programs, describes in more detail the scope of the Agency's authority.
The FAA is issuing this rulemaking under the authority described in Subtitle VII, Part A, Subpart III, Section 44701: General requirements. Under that section, Congress charges the FAA with promoting safe flight of civil aircraft in air commerce by prescribing regulations for practices, methods, and procedures the Administrator finds necessary for safety in air commerce. This regulation is within the scope of that authority because it addresses an unsafe condition that is likely to exist or develop on products identified in this rulemaking action.
The FAA determined that this proposed AD would not have federalism implications under Executive Order 13132. This proposed AD would not have a substantial direct effect on the States, on the relationship between the national government and the States, or on the distribution of power and responsibilities among the various levels of government.
For the reasons discussed above, I certify this proposed regulation:
(1) Is not a “significant regulatory action” under Executive Order 12866,
(2) Would not affect intrastate aviation in Alaska, and
(3) Would not have a significant economic impact, positive or negative, on a substantial number of small entities under the criteria of the Regulatory Flexibility Act.
Air transportation, Aircraft, Aviation safety, Incorporation by reference, Safety.
Accordingly, under the authority delegated to me by the Administrator, the FAA proposes to amend 14 CFR part 39 as follows:
49 U.S.C. 106(g), 40113, 44701.
The FAA must receive comments on this airworthiness directive (AD) by May 26, 2022.
None.
This AD applies to Piaggio Aero Industries S.p.A Model P-180 airplanes, all serial numbers (S/Ns), certificated in any category.
Joint Aircraft System Component (JASC) Code 3411, Pitot/Static System.
This AD was prompted by mandatory continuing airworthiness information (MCAI) originated by an aviation authority of another country to identify and correct an unsafe condition on an aviation product. The MCAI identifies the unsafe condition as accumulation of water and subsequent freezing in the pitot-tube. The FAA is issuing this AD to prevent blockage of the pitot-tube. The unsafe condition, if not addressed, could result in temporary air data indications failure, which could result in loss of control of the airplane.
Comply with this AD within the compliance times specified, unless already done.
(1) For all airplanes: Within 30 days after the effective date of this AD, revise the existing airplane flight manual (AFM) for your airplane by adding into the Emergency Procedures and Normal Procedures sections the information in Piaggio Aviation P.180 AVANTI Temporary Change No. 36, dated April 11, 2019; or by incorporating into the Limitations and Normal Procedures sections the information in Piaggio Aviation P.180 Avanti II/EVO Temporary Change No. 79, dated September 17, 2018; as applicable to your airplane S/N. Using a different document with language identical to that in Piaggio Aviation P.180 AVANTI Temporary Change No. 36, dated April 11, 2019; or Piaggio Aviation P.180 Avanti II/EVO Temporary Change No. 79, dated September 17, 2018, is acceptable for compliance with this requirement.
(2) For airplanes identified in paragraph (g)(2)(i) and (ii) of this AD: Within 660 hours time-in-service (TIS) after the effective date of this AD or 24 months after the effective date of this AD, whichever occurs first, modify the total air temperature (TAT) probe heater electrical circuit by following the Accomplishment Instructions, paragraphs (6) through (27), in Piaggio Aero Industries S.p.A. Service Bulletin No. 80-0457, Revision 1, dated February 12, 2020.
(i) S/N 1105, if Piaggio Aero Industries Service Bulletin No. 80-0454, Revision 0, dated March 6, 2017, is not incorporated; and
(ii) S/Ns 1106 through 1234 inclusive, if Piaggio Aero Industries S.p.A. Service Bulletin No. 80-0425, Revision 2, dated June 4, 2018, is not incorporated.
(3) For airplanes identified in paragraphs (g)(3)(i) through (iii) of this AD: Within 660 hours TIS after the effective date of this AD or 24 months after the effective date of this AD, whichever occurs first, modify the TAT probe heater electrical circuit by following the Accomplishment Instructions, paragraphs (6) through (21), in Piaggio Aviation S.p.A. Service Bulletin No. 80-0430, Revision 1, dated April 30, 2019.
(i) S/Ns 1002, 3001, 3003, 3004, 3006, and 3007;
(ii) S/N 1105, if Piaggio Aero Industries Service Bulletin No. 80-0454, Revision 0, dated March 6, 2017, is incorporated; and
(iii) S/Ns 1106 through 1234 inclusive, if Piaggio Aero Industries S.p.A. Service Bulletin No. 80-0425, Revision 2, dated June 4, 2018, is incorporated.
This paragraph provides credit for the modification required by paragraph (g)(3) of this AD, if the modification was done before the effective date of this AD using Piaggio Aviation Service Bulletin No. 80-0430, Revision 0, dated August 10, 2017.
(1) The Manager, International Validation Branch, FAA, has the authority to approve AMOCs for this AD, if requested using the procedures found in 14 CFR 39.19. In accordance with 14 CFR 39.19, send your request to your principal inspector or local Flight Standards District Office, as appropriate. If sending information directly to the manager of the certification office, send it to the attention of the person identified in paragraph (j)(1) of this AD and email to:
(2) Before using any approved AMOC, notify your appropriate principal inspector, or lacking a principal inspector, the manager of the local flight standards district office/certificate holding district office.
(1) For more information about this AD, contact Mike Kiesov, Aviation Safety Engineer, General Aviation & Rotorcraft Section, International Validation Branch, FAA, 901 Locust, Room 301, Kansas City, MO 64106; phone: (816) 329-4144; email:
(2) Refer to European Union Aviation Safety Agency (EASA) AD 2019-0144, dated June 19, 2019, for more information. You may examine the EASA AD in the AD docket at
(3) For service information identified in this AD, contact Piaggio Aero Industries S.p.A, P-180 Customer Support, Via Pioieri e Aviatori d'Italia snc, 16154 Genoa, Italy; phone: +39 010 099 8400; email:
Federal Aviation Administration (FAA), DOT.
Notice of proposed rulemaking (NPRM).
The FAA proposes to adopt a new airworthiness directive (AD) for certain Bombardier, Inc., Model CL-600-1A11 (600), CL-600-2A12 (601), and CL-600-2B16 (601-3A, 601-3R, and 604 Variants) airplanes. This proposed AD was prompted by reports that during certain operating modes, the flight guidance/autopilot does not account for engine failure while capturing an altitude. This proposed AD would require revising the existing airplane flight manual (AFM) to provide the flightcrew with a new limitation and procedure for operation during certain flight modes. The FAA is proposing this AD to address the unsafe condition on these products.
The FAA must receive comments on this proposed AD by May 26, 2022.
You may send comments, using the procedures found in 14 CFR 11.43 and 11.45, by any of the following methods:
•
•
•
•
For service information identified in this NPRM, contact Bombardier Business Aircraft Customer Response Center, 400 Côte-Vertu Road West, Dorval, Québec H4S 1Y9, Canada; telephone 514-855-2999; email
You may examine the AD docket on the internet at
Steven Dzierzynski, Aerospace Engineer, Avionics and Electrical Systems Section, FAA, New York ACO Branch, 1600 Stewart Avenue, Suite 410, Westbury, NY 11590; telephone 516-228-7367; email
The FAA invites you to send any written relevant data, views, or arguments about this proposal. Send your comments to an address listed under
Except for Confidential Business Information (CBI) as described in the following paragraph, and other information as described in 14 CFR 11.35, the FAA will post all comments received, without change, to
CBI is commercial or financial information that is both customarily and actually treated as private by its owner. Under the Freedom of Information Act (FOIA) (5 U.S.C. 552), CBI is exempt from public disclosure. If your comments responsive to this NPRM contain commercial or financial information that is customarily treated as private, that you actually treat as private, and that is relevant or responsive to this NPRM, it is important that you clearly designate the submitted comments as CBI. Please mark each page of your submission containing CBI as “PROPIN.” The FAA will treat such marked submissions as confidential under the FOIA, and they will not be placed in the public docket of this NPRM. Submissions containing CBI should be sent to Steven Dzierzynski, Aerospace Engineer, Avionics and Electrical Systems Section, FAA, New York ACO Branch, 1600 Stewart Avenue, Suite 410, Westbury, NY 11590; telephone 516-228-7367; email
Transport Canada Civil Aviation (TCCA), which is the aviation authority for Canada, has issued TCCA AD CF-2020-02, dated February 13, 2020 (TCCA AD CF-2020-02) (also referred to as the MCAI), to correct an unsafe condition for certain Bombardier, Inc., Model CL-600-1A11 (600), CL-600-2A12 (601), and CL-600-2B16 (601-3A,
This proposed AD was prompted by reports that during ALTSEL, ASEL, or ALTS CAP mode, the flight guidance/autopilot does not account for engine failure while capturing an altitude. The FAA is proposing this AD to address a possible engine failure during or before a climb while in ALTSEL, ASEL or ALTS CAP mode, which could cause the airspeed to drop significantly below the safe operating speed. Prompt crew intervention may be required to maintain a safe operating speed. See the MCAI for additional background information.
Bombardier has issued the following service information. This service information contains a new AFM limitation and procedure for operation during certain flight modes. These documents are distinct since they apply to different airplane configurations. These configurations may include the presence or absence of winglets, incorporation of service bulletin 601-0300 which introduces an airspeed limitation placard, and the type of engine installed on the airplane.
• Automatic Flight Control System limitation in the Systems Limitations in the Limitations section and Engine Failure in Climb During ALTSEL procedure in the Airplane Handling Procedures Following Engine Failure procedures in the Normal Procedures section of the Canadair Challenger AFM, Product Publication No. 600, Revision A115, dated June 16, 2021.
• Automatic Flight Control System limitation in the Systems Limitations in the Limitations section and Engine Failure in Climb During ALTSEL procedure in the Airplane Handling Procedures Following Engine Failure procedures in the Abnormal Procedures section of the Canadair Challenger AFM, Product Support Publication (PSP) No. 600-1, Revision 107, dated June 16, 2021.
• Automatic Flight Control System limitation in the Systems Limitations in the Limitations section and Engine Failure in Climb During ALTSEL procedure in the Airplane Handling Procedures Following Engine Failure procedures in the Abnormal Procedures section of the Canadair Challenger AFM, PSP No. 601-1A, Revision 129, dated June 16, 2021.
• Automatic Flight Control System limitation in the Systems Limitations in the Limitations section and Engine Failure in Climb During ALTSEL procedure in the Airplane Handling Procedures Following Engine Failure procedures in the Abnormal Procedures section of the Canadair Challenger AFM, PSP No. 601-1A-1, Revision 83, dated June 16, 2021.
• Automatic Flight Control System limitation in the Systems Limitations in the Limitations section and Engine Failure in Climb During ALTSEL procedure in the Airplane Handling Procedures Following Engine Failure procedures in the Abnormal Procedures section of the Canadair Challenger AFM, PSP No. 601-1B, Revision 87, dated June 16, 2021.
• Automatic Flight Control System limitation in the Systems Limitations in the Limitations section and Engine Failure in Climb During ALTSEL procedure in the Airplane Handling Procedures Following Engine Failure procedures in the Abnormal Procedures section of the Bombardier Canadair Challenger AFM, PSP No. 601-1B-1, Revision 85, dated June 16, 2021.
• Automatic Flight Control System limitation in the Systems Limitations in the Limitations section and Engine Failure in Climb During ASEL procedure in the Airplane Handling Procedures Following Engine Failure procedures in the Abnormal Procedures section of the Canadair Challenger AFM, PSP No. 601A-1, Revision 107, dated June 16, 2021.
• Automatic Flight Control System limitation in the Systems Limitations in the Limitations section and Engine Failure in Climb During ASEL procedure in the Airplane Handling Procedures Following Engine Failure procedures in the Abnormal Procedures section of the Bombardier Canadair Challenger AFM, PSP No. 601A-1-1, Revision 96, dated June16, 2021.
• Automatic Flight Control Systems limitation specified in Section 02-08, Systems Limitations, of Chapter 2—Limitations; and the Engine Failure in Climb During (V) ALTS CAP or (V) ALTV CAP procedure in Section 05-03, Single Engine Procedures, of Chapter 5—Abnormal Procedures of the Bombardier Challenger 604 AFM, Publication No. PSP 604-1, Revision 124, dated November 24, 2021. (For obtaining the limitation and procedure for the Bombardier Challenger 604 AFM, Publication No. PSP 604-1, use Document Identification No. CH 604 AFM.)
• Automatic Flight Control Systems limitation specified in Section 02-08, Systems Limitations, of Chapter 2—Limitations; and the Engine Failure in Climb During (V) ALTS CAP or (V) ALTV CAP procedure in Section 05-03, Single Engine Procedures, of Chapter 5—Abnormal Procedures of the Bombardier Challenger 605 AFM, Publication No. PSP 605-1, Revision 62, dated November 24, 2021. (For obtaining the limitation and procedure for the Bombardier Challenger 605 AFM, Publication No. PSP 605-1, use Document Identification No. CH 605 AFM.)
• Automatic Flight Control Systems limitation specified in Section 02-08, Systems Limitations, of Chapter 2—Limitations; and the Engine Failure in Climb During (V) ALTS CAP or (V) ALTV CAP procedure in Section 05-03, Single Engine Procedures, of Chapter 5—Abnormal Procedures of the Bombardier Challenger 650 AFM, Publication No. PSP 650-1, Revision 27, dated November 24, 2021. (For obtaining the limitation and procedure for the Bombardier Challenger 650 AFM, Publication No. PSP 650-1, use Document Identification No. CH 650 AFM.)
This service information is reasonably available because the interested parties have access to it through their normal course of business or by the means identified in the
These products have been approved by the aviation authority of another country, and are approved for operation in the United States. Pursuant to the FAA's bilateral agreement with the State of Design Authority, the FAA has been notified of the unsafe condition described in the MCAI and service information referenced above. The FAA is proposing this AD because the FAA evaluated all the relevant information and determined the unsafe condition described previously is likely to exist or develop on other products of these same type designs.
This proposed AD would require revising the existing AFM to provide the flightcrew with a new limitation and procedure for operation during flight in certain flight modes.
This NPRM updates certain AFM revision levels identified in TCCA AD CF-2020-02, and therefore identifies the complete, most recent service information that will be incorporated by reference in the final rule. Operators should note that Bombardier revised the ALTS CAP mode to (V) ALTS CAP or
The FAA estimates that this proposed AD affects 133 airplanes of U.S. registry. The FAA estimates the following costs to comply with this proposed AD:
Title 49 of the United States Code specifies the FAA's authority to issue rules on aviation safety. Subtitle I, section 106, describes the authority of the FAA Administrator. Subtitle VII: Aviation Programs, describes in more detail the scope of the Agency's authority.
The FAA is issuing this rulemaking under the authority described in Subtitle VII, Part A, Subpart III, Section 44701: General requirements. Under that section, Congress charges the FAA with promoting safe flight of civil aircraft in air commerce by prescribing regulations for practices, methods, and procedures the Administrator finds necessary for safety in air commerce. This regulation is within the scope of that authority because it addresses an unsafe condition that is likely to exist or develop on products identified in this rulemaking action.
The FAA determined that this proposed AD would not have federalism implications under Executive Order 13132. This proposed AD would not have a substantial direct effect on the States, on the relationship between the national Government and the States, or on the distribution of power and responsibilities among the various levels of government.
For the reasons discussed above, I certify this proposed regulation:
(1) Is not a “significant regulatory action” under Executive Order 12866,
(2) Would not affect intrastate aviation in Alaska, and
(3) Would not have a significant economic impact, positive or negative, on a substantial number of small entities under the criteria of the Regulatory Flexibility Act.
Air transportation, Aircraft, Aviation safety, Incorporation by reference, Safety.
Accordingly, under the authority delegated to me by the Administrator, the FAA proposes to amend 14 CFR part 39 as follows:
49 U.S.C. 106(g), 40113, 44701.
The FAA must receive comments by May 26, 2022.
None.
This AD applies to the Bombardier, Inc., airplanes, certificated in any category, identified in paragraphs (c)(1) through (6) of this AD.
(1) Model CL-600-1A11 (600), serial numbers 1001 through 1085 inclusive.
(2) Model CL-600-2A12 (601), serial numbers 3001 through 3066 inclusive.
(3) Model CL-600-2B16 (601-3A and 601-3R Variants), serial numbers 5001 through 5194 inclusive.
(4) Model CL-600-2B16 (604 Variant), serial numbers 5301 through 5665 inclusive.
(5) Model CL-600-2B16 (604 Variant), serial numbers 5701 through 5988 inclusive.
(6) Model CL-600-2B16 (604 Variant), serial numbers 6050 through 6999 inclusive.
Air Transport Association (ATA) of America Code 22, Auto flight.
This AD was prompted by reports that during certain operating modes, the flight guidance/autopilot does not account for engine failure while capturing an altitude. The FAA is issuing this AD to address a possible engine failure during or before a climb while in ALTSEL, ASEL or ALTS CAP mode, which could cause the airspeed to drop significantly below the safe operating speed. Prompt crew intervention may be required to maintain a safe operating speed.
Comply with this AD within the compliance times specified, unless already done.
Within 30 days after the effective date of this AD: Revise the existing AFM to incorporate the information specified in the limitation and procedure specified in the applicable AFM specified in figure 1 to paragraph (g) of this AD.
The following provisions also apply to this AD:
(1)
(2)
(1) Refer to Mandatory Continuing Airworthiness Information (MCAI) TCCA AD CF-2020-02, dated February 13, 2020, for related information. This MCAI may be found in the AD docket on the internet at
(2) For more information about this AD, contact Steven Dzierzynski, Aerospace Engineer, Avionics and Electrical Systems Section, FAA, New York ACO Branch, 1600 Stewart Avenue, Suite 410, Westbury, NY 11590; telephone 516-228-7367; email
(3) For service information identified in this AD, contact Bombardier Business Aircraft Customer Response Center, 400 Côte-Vertu Road West, Dorval, Québec H4S 1Y9, Canada; telephone 514-855-2999; email
Federal Aviation Administration (FAA), DOT.
Notice of proposed rulemaking (NPRM).
The FAA proposes to supersede Airworthiness Directive (AD) 2019-03-25, which applies to certain Airbus SAS Model A318 series airplanes; Model A319-111, -112, -113, -114, -115, -131, -132, and -133 airplanes; Model A320-211, -212, -214, -216, -231, -232, and -233 airplanes; and Model A321-111, -112, -131, -211, -212, -213, -231, and -232 airplanes. AD 2019-03-25 requires repetitive inspections of the center and outer wing box lower stiffeners and panels at a certain junction on the left- and right-hand sides for any cracking, and repair if necessary. AD 2019-03-25 also provides an optional modification, which would terminate the repetitive inspections. Since the FAA issued AD 2019-03-25, it has been determined that, for certain airplanes, the compliance time for the initial inspection is inadequate and must be revised. This proposed AD continues to require the actions specified in AD 2019-03-25 with revised compliance times for certain airplanes and additional actions for certain airplanes, and expands the applicability, as specified in a European Aviation Safety Agency (EASA) AD, which is proposed for incorporation by reference. The FAA is proposing this AD to address the unsafe condition on these products.
The FAA must receive comments on this proposed AD by May 26, 2022.
You may send comments, using the procedures found in 14 CFR 11.43 and 11.45, by any of the following methods:
•
•
•
•
For material that will be incorporated by reference (IBR) in this AD, contact EASA, Konrad-Adenauer-Ufer 3, 50668 Cologne, Germany; telephone +49 221 8999 000; email
You may examine the AD docket at
Vladimir Ulyanov, Aerospace Engineer, Large Aircraft Section, FAA, International Validation Branch, 2200 South 216th St., Des Moines, WA 98198; telephone and fax 206-231-3223; email
The FAA invites you to send any written relevant data, views, or arguments about this proposal. Send your comments to an address listed under
Except for Confidential Business Information (CBI) as described in the following paragraph, and other information as described in 14 CFR 11.35, the FAA will post all comments received, without change, to
CBI is commercial or financial information that is both customarily and actually treated as private by its owner. Under the Freedom of Information Act (FOIA) (5 U.S.C. 552), CBI is exempt from public disclosure. If your comments responsive to this NPRM contain commercial or financial information that is customarily treated as private, that you actually treat as private, and that is relevant or responsive to this NPRM, it is important that you clearly designate the submitted comments as CBI. Please mark each page of your submission containing CBI as “PROPIN.” The FAA will treat such marked submissions as confidential under the FOIA, and they will not be placed in the public docket of this NPRM. Submissions containing CBI should be sent to Vladimir Ulyanov, Aerospace Engineer, Large Aircraft Section, FAA, International Validation Branch, 2200 South 216th St., Des Moines, WA 98198; telephone and fax
The FAA issued AD 2019-03-25, Amendment 39-19577 (84 FR 8805, March 12, 2019) (AD 2019-03-25), which applies to certain Airbus SAS Model A318 series airplanes; Model A319-111, -112, -113, -114, -115, -131, -132, and -133 airplanes; Model A320-211, -212, -214, -216, -231, -232, and -233 airplanes; and Model A321-111, -112, -131, -211, -212, -213, -231, and -232 airplanes. AD 2019-03-25 requires repetitive special detailed inspections (SDIs) of the center and outer wing box lower stiffeners and panels at a certain junction on the left- and right-hand sides for any cracking, and repair if necessary. AD 2019-03-25 also provides an optional modification, which would terminate the repetitive inspections. The FAA issued AD 2019-03-25 to address the loss of pre-tension in the fasteners, which could affect the structural integrity of the airplane.
Since the FAA issued AD 2019-03-25, it has been determined that, for certain airplanes, the compliance time for the initial inspection is inadequate and must be revised and additional actions are required. Additionally, the applicability is expanded.
EASA, which is the Technical Agent for the Member States of the European Union, has issued EASA AD 2021-0228, dated October 12, 2021 (EASA AD 2021-0228) (also referred to as the MCAI), to correct an unsafe condition for certain Airbus SAS Model A318 series airplanes; Model A319-111, -112, -113, -114, -115, -131, -132, and -133 airplanes; Model A320-211, -212, -214, -215, -216, -231, -232, and -233 airplanes; and Model A321-111, -112, -131, -211, -212, -213, -231, and -232 airplanes. Model A320-215 airplanes are not certificated by the FAA and are not included on the U.S. type certificate data sheet; this AD therefore does not include those airplanes in the applicability.
EASA AD 2021-0228 superseded EASA AD 2018-0218, dated October 11, 2018; corrected October 26, 2018 (which corresponds to FAA AD 2019-03-25).
This proposed AD was prompted by a report that taperloks used in the wing-to-fuselage junction at rib 1 were found to be noncompliant with the applicable specification, resulting in a loss of pre-tension in the fasteners; and a determination that, for certain airplanes, the compliance time for the initial inspection is inadequate and must be revised. The FAA is proposing this AD to address the loss of pre-tension in the fasteners, which could affect the structural integrity of the airplane. See the MCAI for additional background information.
Although this proposed AD does not explicitly restate the requirements of AD 2019-03-25, this proposed AD would retain the requirements of AD 2019-03-25. Those requirements are referenced in EASA AD 2021-0228, which, in turn, is referenced in paragraph (g) of this proposed AD.
EASA AD 2021-0228 specifies procedures for repetitive internal and external SDIs (ultrasonic inspections) of the center and outer wing box lower stiffeners and panels at the level of rib 1 junction on the left- and right-hand sides for any cracking, and repair if necessary; and additional actions (re-protection of the inspected area at the lower panel at rib1 junction at the left- and right-hand sides) for airplanes on which certain service information was used. EASA AD 2021-0228 also specifies procedures for an optional modification, which would terminate the repetitive inspections. This material is reasonably available because the interested parties have access to it through their normal course of business or by the means identified in the
These products have been approved by the aviation authority of another country and are approved for operation in the United States. Pursuant to the FAA's bilateral agreement with the State of Design Authority, it has notified the FAA of the unsafe condition described in the MCAI referenced above. The FAA is issuing this NPRM after determining that the unsafe condition described previously is likely to exist or develop in other products of these same type designs.
This proposed AD would require accomplishing the actions specified in EASA AD 2021-0228 described previously, except for any differences identified as exceptions in the regulatory text of this proposed AD.
In the FAA's ongoing efforts to improve the efficiency of the AD process, the FAA developed a process to use some civil aviation authority (CAA) ADs as the primary source of information for compliance with requirements for corresponding FAA ADs. The FAA has been coordinating this process with manufacturers and CAAs. As a result, the FAA proposes to incorporate EASA AD 2021-0228 by reference in the FAA final rule. This proposed AD would, therefore, require compliance with EASA AD 2021-0228 in its entirety through that incorporation, except for any differences identified as exceptions in the regulatory text of this proposed AD. Using common terms that are the same as the heading of a particular section in EASA AD 2021-0228 does not mean that operators need comply only with that section. For example, where the AD requirement refers to “all required actions and compliance times,” compliance with this AD requirement is not limited to the section titled “Required Action(s) and Compliance Time(s)” in EASA AD 2021-0228. Service information required by EASA AD 2021-0228 for compliance will be available at
The FAA estimates that this proposed AD affects 765 airplanes of U.S. registry. The FAA estimates the following costs to comply with this proposed AD:
The FAA has received no definitive data that would enable the agency to provide cost estimates for the repair specified in this proposed AD.
A federal agency may not conduct or sponsor, and a person is not required to respond to, nor shall a person be subject to a penalty for failure to comply with a collection of information subject to the requirements of the Paperwork Reduction Act unless that collection of information displays a current valid OMB Control Number. The OMB Control Number for this information collection is 2120-0056. Public reporting for this collection of information is estimated to take approximately 1 hour per response, including the time for reviewing instructions, searching existing data sources, gathering and maintaining the data needed, and completing and reviewing the collection of information. All responses to this collection of information are mandatory. Send comments regarding this burden estimate or any other aspect of this collection of information, including suggestions for reducing this burden, to: Information Collection Clearance Officer, Federal Aviation Administration, 10101 Hillwood Parkway, Fort Worth, TX 76177-1524.
Title 49 of the United States Code specifies the FAA's authority to issue rules on aviation safety. Subtitle I, section 106, describes the authority of the FAA Administrator. Subtitle VII: Aviation Programs, describes in more detail the scope of the Agency's authority.
The FAA is issuing this rulemaking under the authority described in Subtitle VII, Part A, Subpart III, Section 44701: General requirements. Under that section, Congress charges the FAA with promoting safe flight of civil aircraft in air commerce by prescribing regulations for practices, methods, and procedures the Administrator finds necessary for safety in air commerce. This regulation is within the scope of that authority because it addresses an unsafe condition that is likely to exist or develop on products identified in this rulemaking action.
The FAA determined that this proposed AD would not have federalism implications under Executive Order 13132. This proposed AD would not have a substantial direct effect on the States, on the relationship between the national Government and the States, or on the distribution of power and responsibilities among the various levels of government.
For the reasons discussed above, I certify this proposed regulation:
(1) Is not a “significant regulatory action” under Executive Order 12866,
(2) Would not affect intrastate aviation in Alaska, and
(3) Would not have a significant economic impact, positive or negative, on a substantial number of small entities under the criteria of the Regulatory Flexibility Act.
Air transportation, Aircraft, Aviation safety, Incorporation by reference, Safety.
Accordingly, under the authority delegated to me by the Administrator, the FAA proposes to amend 14 CFR part 39 as follows:
49 U.S.C. 106(g), 40113, 44701.
The FAA must receive comments on this airworthiness directive (AD) by May 26, 2022.
This AD replaces AD 2019-03-25, Amendment 39-19577 (84 FR 8805, March 12, 2019) (AD 2019-03-25).
This AD applies to Airbus SAS Model A318-111, -112, -121, and -122 airplanes; Model A319-111, -112, -113, -114, -115, -131, -132, and -133 airplanes; Model A320-211, -212, -214, -216, -231, -232, and -233 airplanes; and Model A321-111, -112, -131, -211, -212, -213, -231, and -232 airplanes; certificated in any category; as identified in European Aviation Safety Agency (EASA) AD 2021-0228, dated October 12, 2021 (EASA AD 2021-0228).
Air Transport Association (ATA) of America Code 57, Wings.
This AD was prompted by a report that taperloks used in the wing-to-fuselage junction at rib 1 were found to be non-compliant with the applicable specification, resulting in a loss of pre-tension in the fasteners; and a determination that, for certain airplanes, the compliance time for the initial inspection is inadequate and must be revised and additional actions are required. The FAA is issuing this AD to address the loss of pre-tension in the fasteners, which could affect the structural integrity of the airplane.
Comply with this AD within the compliance times specified, unless already done.
Except as specified in paragraph (h) of this AD: Comply with all required actions and compliance times specified in, and in accordance with, EASA AD 2021-0228.
(1) Where EASA AD 2021-0228 refers to its effective date, this AD requires using the effective date of this AD.
(2) Where paragraph (3) of EASA AD 2021-0228 specifies to “contact Airbus for approved repair instructions” if any damage (cracking) is found, for this AD, if any cracking is found, the cracking must be repaired before further flight using a method approved by the Manager, Large Aircraft Section, International Validation Branch, FAA; or EASA; or Airbus SAS's EASA Design Organization Approval (DOA). If approved by the DOA, the approval must include the DOA-authorized signature.
(3) The “Remarks” section of EASA AD 2021-0228 does not apply to this AD.
The following provisions also apply to this AD:
(1)
(2)
(3)
(1) For EASA AD 2021-0228 contact EASA, Konrad-Adenauer-Ufer 3, 50668 Cologne, Germany; telephone +49 221 8999 000; email
(2) For more information about this AD, contact Vladimir Ulyanov, Aerospace Engineer, Large Aircraft Section, FAA, International Validation Branch, 2200 South 216th St., Des Moines, WA 98198; telephone and fax 206-231-3223; email
Federal Aviation Administration (FAA), DOT.
Notice of proposed rulemaking (NPRM).
The FAA proposes to adopt a new airworthiness directive (AD) for certain Bombardier, Inc., Model BD-700-1A10 and BD-700-1A11 airplanes. This proposed AD was prompted by reports of the loss of all air data system information provided to the flightcrew during flight; the air data system information was recovered as the airplane descended to lower altitudes. This proposed AD would require revising the existing airplane flight manual (AFM) to update the Unreliable Airspeed and Landing Distance Factor emergency procedures, which provide instructions for the flightcrew to stabilize the airspeed and altitude. The FAA is proposing this AD to address the unsafe condition on these products.
The FAA must receive comments on this proposed AD by May 26, 2022.
You may send comments, using the procedures found in 14 CFR 11.43 and 11.45, by any of the following methods:
•
•
•
•
For service information identified in this NPRM, contact Bombardier Business Aircraft Customer Response Center, 400 Côte-Vertu Road West, Dorval, Québec H4S 1Y9, Canada; telephone 1-514-855-2999; email
You may examine the AD docket at
Chirayu Gupta, Aerospace Engineer, Mechanical Systems and Administrative Services Section, FAA, New York ACO Branch, 1600 Stewart Avenue, Suite 410, Westbury, NY 11590; telephone 516-228-7300; email
The FAA invites you to send any written relevant data, views, or arguments about this proposal. Send your comments to an address listed under
Except for Confidential Business Information (CBI) as described in the following paragraph, and other information as described in 14 CFR 11.35, the FAA will post all comments received, without change, to
CBI is commercial or financial information that is both customarily and actually treated as private by its owner. Under the Freedom of Information Act (FOIA) (5 U.S.C. 552), CBI is exempt from public disclosure. If your comments responsive to this NPRM contain commercial or financial information that is customarily treated as private, that you actually treat as private, and that is relevant or responsive to this NPRM, it is important that you clearly designate the submitted comments as CBI. Please mark each page of your submission containing CBI as “PROPIN.” The FAA will treat such marked submissions as confidential under the FOIA, and they will not be
Transport Canada Civil Aviation (TCCA), which is the aviation authority for Canada, has issued TCCA AD CF-2020-50, dated November 20, 2020 (TCCA AD CF-2020-50) (also referred to after this as the Mandatory Continuing Airworthiness Information, or the MCAI), to correct an unsafe condition for certain Bombardier, Inc., Model BD-700-1A10 and BD-700-1A11 airplanes. You may examine the MCAI in the AD docket at
This proposed AD was prompted by reports of the loss of all air data system information provided to the flightcrew during flight; the air data system information was recovered as the airplane descended to lower altitude. An investigation determined that the root cause was usually high altitude icing (ice crystal contamination). The FAA is proposing this AD to address loss of all air data system information, which could lead to loss of continued safe flight and landing of the airplane. See the MCAI for additional background information.
Bombardier, Inc., has issued the following service information. This service information describes procedures for stabilizing the airspeed and altitude of the airplane. These documents are distinct since they apply to different airplane models.
• Unreliable Airspeed procedure, Section 03-12, Primary Flight Displays, Chapter 3—Emergency Procedures; and Instruments procedure, Landing Distance Factors section, of the Emergency Procedures section of Supplement 20—Operations at Airport Elevations Above 10,000 Feet, Chapter 7—Supplements; of the Bombardier Global Express AFM, Publication No. CSP 700-1, Revision 107, dated February 22, 2021. (For obtaining the procedures for Bombardier Global Express AFM, Publication No. CSP 700-1, use Document Identification No. GL 700 AFM-1.)
• Unreliable Airspeed procedure, Section 03-12, Primary Flight Displays, Chapter 3—Emergency Procedures; and Instruments procedure, Landing Distance Factors section, of the Emergency Procedures section of Supplement 20—Operations at Airport Elevations Above 10,000 Feet, Chapter 7—Supplements; of the Bombardier Global Express AFM, Publication No. CSP 700-1A, Revision 107, dated February 22, 2021. (For obtaining the procedures for Bombardier Global Express AFM, Publication No. CSP 700-1A, use Document Identification No. GL 700 AFM-1A.)
• Unreliable Airspeed procedure, Section 03-12, Primary Flight Displays, Chapter 3—Emergency Procedures; and Instruments procedure, Landing Distance Factors section, of the Emergency Procedures section of Supplement 20—Operations at Airport Elevations Above 10,000 Feet, Chapter 7—Supplements; of the Bombardier Global 5000 AFM, Publication No. CSP 700-5000-1, Revision 68, dated February 22, 2021. (For obtaining the procedures for Bombardier Global 5000 AFM, Publication No. CSP 700-5000-1, use Document Identification No. GL 5000 AFM.)
• Unreliable Airspeed procedure, Section 03-12, Primary Flight Displays, Chapter 3—Emergency Procedures; and Instruments procedure, Landing Distance Factors section, of the Emergency Procedures section of Supplement 20—Operations at Airport Elevations Above 10,000 Feet, Chapter 7—Supplements; of the Bombardier Global 5000 Featuring Global Vision Flight Deck AFM, Publication No. CSP 700-5000-1V, Revision 37, dated February 22, 2021. (For obtaining the procedures for Bombardier Global 5000 Featuring Global Vision Flight Deck AFM, Publication No. CSP 700-5000-1V, use Document Identification No. GL 5000 GVFD AFM.)
• Unreliable Airspeed procedure, Section 03-12, Primary Flight Displays, Chapter 3—Emergency Procedures, of the Bombardier Global 5500 AFM, Publication No. CSP 700-5500-1, Revision 8, dated November 11, 2020. (For obtaining the procedures for Bombardier Global 5500 AFM, Publication No. CSP 700-5500-1, use Document Identification No. GL 5500 AFM.)
• Unreliable Airspeed procedure, Section 03-12, Primary Flight Displays, Chapter 3—Emergency Procedures; and Instruments procedure, Landing Distance Factors section, of the Emergency Procedures section of Supplement 20—Operations at Airport Elevations Above 10,000 Feet, Chapter 7—Supplements; of the Bombardier Global 6000 AFM, Publication No. CSP 700-1V, Revision 37, dated February 22, 2021. (For obtaining the procedures for Bombardier Global 6000 AFM, Publication No. CSP 700-1V, use Document Identification No. GL 6000 AFM.)
• Unreliable Airspeed procedure, Section 03-12, Primary Flight Displays, Chapter 3—Emergency Procedures of the Bombardier Global 6500 AFM, Publication No. CSP 700-6500-1, Revision 8, dated November 11, 2020. (For obtaining the procedures for Bombardier Global 6500 AFM, Publication No. CSP 700-6500-1, use Document Identification No. GL 6500 AFM.)
This service information is reasonably available because the interested parties have access to it through their normal course of business or by the means identified in the
This product has been approved by the aviation authority of another country, and is approved for operation in the United States. Pursuant to the FAA's bilateral agreement with the State of Design Authority, the FAA has been notified of the unsafe condition described in the MCAI and service information referenced above. The FAA is proposing this AD because the FAA evaluated all the relevant information and determined the unsafe condition described previously is likely to exist or develop on other products of the same type design.
This proposed AD would require revising the existing AFM to update the Unreliable Airspeed and Landing Distance Factor emergency procedures, which provide instructions for the flightcrew to stabilize the airspeed and altitude.
TCCA AD CF-2020-50 requires operators to “inform all flight crews” of revisions to the AFM, and thereafter to “operate the aeroplane accordingly.” However, this proposed AD would not specifically require those actions as those actions are already required by FAA regulations. FAA regulations require operators furnish to pilots any changes to the AFM (for example, 14 CFR 121.137), and to ensure the pilots are familiar with the AFM (for example, 14 CFR 91.505). As with any other flightcrew training requirement, training on the updated AFM content is tracked by the operators and recorded in each
The FAA estimates that this AD, if adopted as proposed, would affect 395 airplanes of U.S. registry. The FAA estimates the following costs to comply with this proposed AD:
Title 49 of the United States Code specifies the FAA's authority to issue rules on aviation safety. Subtitle I, section 106, describes the authority of the FAA Administrator. Subtitle VII: Aviation Programs, describes in more detail the scope of the Agency's authority.
The FAA is issuing this rulemaking under the authority described in Subtitle VII, Part A, Subpart III, Section 44701: General requirements. Under that section, Congress charges the FAA with promoting safe flight of civil aircraft in air commerce by prescribing regulations for practices, methods, and procedures the Administrator finds necessary for safety in air commerce. This regulation is within the scope of that authority because it addresses an unsafe condition that is likely to exist or develop on products identified in this rulemaking action.
The FAA determined that this proposed AD would not have federalism implications under Executive Order 13132. This proposed AD would not have a substantial direct effect on the States, on the relationship between the national Government and the States, or on the distribution of power and responsibilities among the various levels of government.
For the reasons discussed above, I certify this proposed regulation:
(1) Is not a “significant regulatory action” under Executive Order 12866,
(2) Would not affect intrastate aviation in Alaska, and
(3) Would not have a significant economic impact, positive or negative, on a substantial number of small entities under the criteria of the Regulatory Flexibility Act.
Air transportation, Aircraft, Aviation safety, Incorporation by reference, Safety.
Accordingly, under the authority delegated to me by the Administrator, the FAA proposes to amend 14 CFR part 39 as follows:
49 U.S.C. 106(g), 40113, 44701.
The FAA must receive comments on this airworthiness directive (AD) by May 26, 2022.
None.
This AD applies to Bombardier, Inc., Model BD-700-1A10 and BD-700-1A11 airplanes, certificated in any category, serial numbers (S/Ns) 9002 through 9998 inclusive, and S/Ns 60001 through 60027 inclusive.
Air Transport Association (ATA) of America Code 34, Navigation.
This AD was prompted by reports of the loss of all air data system information provided to the flightcrew during flight; the air data system information was recovered as the airplanes descended to lower altitudes. The FAA is issuing this AD to address loss of all air data system information, which could lead to loss of continued safe flight and landing of the airplane.
Comply with this AD within the compliance times specified, unless already done.
Within 30 days after the effective date of this AD: Revise the existing AFM to incorporate the information specified in the AFM sections and supplements, as applicable, of the AFM revisions specified in figure 1 to paragraph (g) of this AD.
The following provisions also apply to this AD:
(1)
(2)
(1) Refer to Mandatory Continuing Airworthiness Information (MCAI) TCCA AD CF-2020-50, dated November 20, 2020, for related information. This MCAI may be found in the AD docket at
(2) For more information about this AD, contact Chirayu Gupta, Aerospace Engineer, Mechanical Systems and Administrative Services Section, FAA, New York ACO Branch, 1600 Stewart Avenue, Suite 410, Westbury, NY 11590; telephone 516-228-7300; email
(3) For service information identified in this AD, contact Bombardier Business Aircraft Customer Response Center, 400 Côte-Vertu Road West, Dorval, Québec H4S 1Y9, Canada; telephone 1-514-855-2999; email
Federal Aviation Administration (FAA), DOT.
Notice of proposed rulemaking (NPRM).
The FAA proposes to adopt a new airworthiness directive (AD) for all Airbus Helicopters Model AS-365N2, AS 365 N3, EC 155B, EC155B1, and SA-365N1 helicopters. This proposed AD was prompted by a large amount of critical scale particles found on the tail rotor gearbox (TGB) chip detector magnetic plug during an unscheduled check of the TGB. The particles belonged to the double bearing (pitch control rod bearing) installed inside the TGB. This proposed AD would require repetitive inspections of the TGB chip detector for particles, analyzing any particles collected, performing a double bearing washing, repetitive replacements of certain part-numbered
The FAA must receive comments on this proposed AD by May 26, 2022.
You may send comments, using the procedures found in 14 CFR 11.43 and 11.45, by any of the following methods:
•
•
•
•
For EASA material that is proposed for IBR in this AD, contact EASA, Konrad-Adenauer-Ufer 3, 50668 Cologne, Germany; telephone +49 221 8999 000; email
You may examine the AD docket at
Andrea Jimenez, Aerospace Engineer, COS Program Management Section, Operational Safety Branch, Compliance & Airworthiness Division, FAA, 1600 Stewart Ave., Suite 410, Westbury, NY 11590; telephone (516) 228-7330; email
The FAA invites you to send any written relevant data, views, or arguments about this proposal. Send your comments to an address listed under
Except for Confidential Business Information (CBI) as described in the following paragraph, and other information as described in 14 CFR 11.35, the FAA will post all comments received, without change, to
CBI is commercial or financial information that is both customarily and actually treated as private by its owner. Under the Freedom of Information Act (FOIA) (5 U.S.C. 552), CBI is exempt from public disclosure. If your comments responsive to this NPRM contain commercial or financial information that is customarily treated as private, that you actually treat as private, and that is relevant or responsive to this NPRM, it is important that you clearly designate the submitted comments as CBI. Please mark each page of your submission containing CBI as “PROPIN.” The FAA will treat such marked submissions as confidential under the FOIA, and they will not be placed in the public docket of this NPRM. Submissions containing CBI should be sent to Andrea Jimenez, Aerospace Engineer, COS Program Management Section, Operational Safety Branch, Compliance & Airworthiness Division, FAA, 1600 Stewart Ave., Suite 410, Westbury, NY 11590; telephone (516) 228-7330; email
EASA, which is the Technical Agent for the Member States of the European Union, has issued EASA AD 2021-0170, dated July 19, 2021 (EASA AD 2021-0170), to correct an unsafe condition for all Airbus Helicopters (AH), formerly Eurocopter, Eurocopter France, Aerospatiale, Sud Aviation, Model AS 365 N2, AS 365 N3, EC 155 B, EC 155 B1 and SA 365 N1 helicopters.
This proposed AD was prompted by a large amount of critical scale particles found on the TGB chip detector magnetic plug during an unscheduled check of a Model AS 365 N2 helicopter. EASA advises the particles belonged to the double bearing (pitch control rod bearing) installed inside the TGB and further advises the reported event showed a speed of degradation faster than expected. The FAA is proposing this AD to prevent bearing degradation and subsequent failure, which could result in loss of yaw control. See EASA AD 2021-0170 for additional background information.
EASA AD 2021-0170 requires analyzing any particles collected during close monitoring or during any required inspections, repetitive inspections of the TGB chip detector for particles, performing a double bearing washing, and corrective actions. Corrective actions include removing an affected TGB and repairing or replacing that TGB, sending affected parts and certain information to the manufacturer, replacing a TGB chip detector or TGB electrical magnetic plug, and replacing an affected O-ring and double bearing. EASA AD 2021-0170 also requires performing a double bearing washing or performing a metallurgical analysis based on inspection results.
EASA AD 2021-0170 also requires for any double bearing part number (P/N) 704A33-651-245 or 704A33-651-246, installed on any TGB P/N 365A33-6005-09, before exceeding 610 flight hours (FH) since first installation, or within 110 FH after October 28, 2019 (the effective date of EASA AD 2019-0267-E, dated October 25, 2019), whichever occurs later, and thereafter at intervals not to exceed 500 FH, replacing the affected double bearing with a serviceable one. EASA AD 2021-0170 allows double bearing part number P/N 704A33-651-245 or 704A33-651-246 to be installed, provided it has never been installed on a helicopter and it is inspected as required by EASA AD 2021-0170. Finally, EASA AD 2021-0170 allows TGB P/N 365A33-6005-09 to be installed, provided it has a serviceable double bearing installed that is inspected as required by the EASA AD.
This material is reasonably available because the interested parties have access to it through their normal course
The FAA reviewed Airbus Helicopters Emergency Alert Service Bulletin (EASB) No. 01.00.24 for non FAA-type certificated military Model AS565MA, MB, MBe, SA, SB, and UB helicopters; EASB No. 01.00.71 for Model AS365N1, N2, and N3 helicopters, and non FAA-type certificated military Model AS365F, Fi, K, and K2 helicopters; EASB No. 01.31 for non FAA-type certificated military Model SA366GA helicopters; and EASB No. 04A016 for Model EC155B and B1 helicopters, each Revision 3 and dated June 14, 2021 (co-published as one document).
This service information specifies procedures to inspect the TGB chip detector for particles, analyze and define the particles by performing a metallurgical analysis, perform a washing of the double bearing, replace the double bearing, and send certain information and affected parts to the manufacturer.
These helicopters have been approved by EASA and are approved for operation in the United States. Pursuant to the FAA's bilateral agreement with the European Union, EASA has notified the FAA about the unsafe condition described in its AD. The FAA is proposing this AD after evaluating all known relevant information and determining that the unsafe condition described previously is likely to exist or develop on other helicopters of the same type design.
This proposed AD would require accomplishing the actions specified in EASA AD 2021-0170, described previously, as incorporated by reference, except for any differences identified as exceptions in the regulatory text of this proposed AD and except as discussed under “Differences Between this Proposed AD and EASA AD 2021-0170.”
In the FAA's ongoing efforts to improve the efficiency of the AD process, the FAA developed a process to use some civil aviation authority (CAA) ADs as the primary source of information for compliance with requirements for corresponding FAA ADs. The FAA has been coordinating this process with manufacturers and CAAs. As a result, the FAA proposes to incorporate EASA AD 2021-0170 by reference in the FAA final rule. This proposed AD would, therefore, require compliance with EASA AD 2021-0170 in its entirety through that incorporation, except for any differences identified as exceptions in the regulatory text of this proposed AD. Using common terms that are the same as the heading of a particular section in EASA AD 2021-0170 does not mean that operators need comply only with that section. For example, where the AD requirement refers to “all required actions and compliance times,” compliance with this AD requirement is not limited to the section titled “Required Action(s) and Compliance Time(s)” in EASA AD 2021-0170. Service information referenced in EASA AD 2021-0170 for compliance will be available at
Service information referenced in EASA AD 2021-0170 specifies sending compliance forms, and certain parts to the manufacturer; this proposed AD would not. Service information referenced in EASA AD 2021-0170 specifies contacting Airbus Helicopters for approved repairs or corrective actions if certain discrepancies are found, whereas this proposed AD would require accomplishing repairs or corrective actions using a method approved by the Manager, General Aviation and Rotorcraft Section, International Validation Branch, FAA; or EASA; or Airbus Helicopters' EASA Design Organization Approval (DOA). If approved by the DOA, the approval must include the DOA-authorized signature.
The FAA considers this proposed AD would be an interim action. If final action is later identified, the FAA might consider further rulemaking.
The FAA estimates that this AD, if adopted as proposed, would affect 53 helicopters of U.S. Registry. Labor rates are estimated at $85 per work-hour. Based on these numbers, the FAA estimates the following costs to comply with this proposed AD.
Analyzing any particles collected during close monitoring would take about 1 work-hour for an estimated cost of $85 per inspection and up to $4,505 for the U.S. fleet.
Replacing a double bearing would take about 16 work-hours and parts cost about $1,620 for an estimated cost of 2,980 per replacement and $157,940 for the U.S. fleet.
Inspecting the TGB chip detector for particles would take about 1 work-hour for an estimated cost of $85 per inspection and $4,505 for the U.S. fleet.
Performing a double bearing washing would take about 8 work-hours for an estimated cost of $680 per helicopter.
The FAA estimates the following costs to do any necessary on-condition replacements that would be required based on the results of the inspection. The agency has no way of determining the number of aircraft that might need these on-condition replacements:
Analyzing collected particles would take about 1 work-hour for an estimated cost of $85 per helicopter.
Replacing a double bearing would take about 16 work-hours and parts would cost about $1,620 for an estimated cost of $2,980 per bearing.
Replacing a TGB chip detector or TGB electrical magnetic plug would take about 1 work-hour and parts would cost about $900 for an estimated cost of $985 per part replacement.
Replacing an O-ring would take about 1 work-hour and parts would cost about $100 for an estimated cost of $185 per O-ring.
Replacing a TGB would take about 8 work-hours and parts would cost about $155,302 for an estimated cost of $155,982 per replacement.
The FAA has received no definitive data for the repair cost of a TGB.
Title 49 of the United States Code specifies the FAA's authority to issue rules on aviation safety. Subtitle I, section 106, describes the authority of the FAA Administrator. Subtitle VII: Aviation Programs, describes in more detail the scope of the Agency's authority.
The FAA is issuing this rulemaking under the authority described in Subtitle VII, Part A, Subpart III, Section 44701: General requirements. Under that section, Congress charges the FAA with promoting safe flight of civil aircraft in air commerce by prescribing regulations for practices, methods, and procedures the Administrator finds necessary for safety in air commerce. This regulation is within the scope of that authority because it addresses an unsafe condition that is likely to exist or develop on products identified in this rulemaking action.
The FAA determined that this proposed AD would not have federalism implications under Executive Order 13132. This proposed AD would not have a substantial direct effect on the States, on the relationship between the national Government and the States, or on the distribution of power and responsibilities among the various levels of government.
For the reasons discussed above, I certify this proposed regulation:
(1) Is not a “significant regulatory action” under Executive Order 12866,
(2) Would not affect intrastate aviation in Alaska, and
(3) Would not have a significant economic impact, positive or negative, on a substantial number of small entities under the criteria of the Regulatory Flexibility Act.
Air transportation, Aircraft, Aviation safety, Incorporation by reference, Safety.
Accordingly, under the authority delegated to me by the Administrator, the FAA proposes to amend 14 CFR part 39 as follows:
49 U.S.C. 106(g), 40113, 44701.
The FAA must receive comments on this airworthiness directive (AD) by May 26, 2022.
None.
This AD applies to all Airbus Helicopters Model AS-365N2, AS 365 N3, EC 155B, EC155B1, and SA-365N1 helicopters, certificated in any category.
Joint Aircraft Service Component (JASC) Code 6500, Tail Rotor Drive System.
This AD was prompted by a large amount of critical scale particles found on the tail rotor gearbox (TGB) chip detector magnetic plug during an unscheduled check of the TGB. The particles belonged to the double bearing (pitch control rod bearing) installed inside the TGB. The FAA is issuing this AD to prevent bearing degradation and subsequent failure. The unsafe condition, if not addressed, could result in loss of yaw control of the helicopter.
Comply with this AD within the compliance times specified, unless already done.
Except as specified in paragraph (h) of this AD: Comply with all required actions and compliance times specified in, and in accordance with, European Union Aviation Safety Agency (EASA) AD 2021-0170, dated July 19, 2021 (EASA AD 2021-0170).
(1) Where EASA AD 2021-0170 requires compliance in terms of flight hours (FH), this AD requires using hours time-in-service (TIS).
(2) Where EASA AD 2021-0170 refers to the effective dates specified in paragraphs (h)(2)(i) through (iii) of this AD, this AD requires using the effective date of this AD.
(i) October 28, 2019 (the effective date of EASA AD 2019-0267-E, dated October 25, 2019).
(ii) November 19, 2019 (the effective date of EASA AD 2019-0267R1, dated November 12, 2019 and corrected November 13, 2019).
(iii) The effective date of EASA AD 2021-0170.
(3) Where EASA AD 2021-0170 requires actions during each “after last flight (ALF) of the day inspection” or “ALF,” this AD requires those actions before the first flight of each day.
(4) Where paragraph (7) of EASA AD 2021-0170 specifies “any discrepancy,” for this AD discrepancies include the presence of particles and other conditions such as abrasions, particles that consist of any scale, chip, flake, splinter, M50 particles, magnetic abrasion dust, or other particles other than cotter pin fragments, pieces of lock wire, swarf, or miscellaneous non-metallic waste.
(5) Where paragraph (8) of EASA AD 2021-0170 specifies for Group 2 helicopters, the first replacement of the affected part must be accomplished not later than December 31, 2021, this AD requires, for Group 2 helicopters, the first replacement of the affected part as defined in EASA AD 2021-0170 must be accomplished within 5 months after the effective date of this AD.
(6) Where any work card referenced in the service information referenced in EASA AD 2021-0170 specifies “if there is an anomaly, replace the chip detector,” or “if there is an anomaly, replace the TGB electrical magnetic plug,” for this AD an anomaly may be indicated by the magnetic component of the TGB chip detector or the TGB electrical magnetic plug not being magnetized. If there is an anomaly, this AD requires before further flight, removing from service the TGB chip detector or the TGB electrical magnetic plug as applicable to your model helicopter.
(7) Where any work card referenced in the service information referenced in EASA AD 2021-0170 specifies “make sure that the chip detector is in good condition,” or “make sure that the TGB electrical magnetic plug is in good condition,” as applicable to your model helicopter, for this AD “good condition” is indicated when there are no signs of wear on the locking systems (including wear on the bayonets, and slotted tubes). If there are any signs of wear on the locking systems, this AD requires before further flight, removing from service the TGB chip detector or the TGB magnetic electrical magnetic plug as applicable to your model helicopter.
(8) Where any work card referenced in the service information referenced in EASA AD 2021-0170 specifies “if necessary, replace the O-rings,” this AD requires before further flight, removing any affected O-ring from service.
(9) Where the service information referenced in EASA AD 2021-0170 specifies to return certain parts to the manufacturer, including for repair, this AD does not require returning parts to the manufacturer, however, this AD does require before further flight, repair done in accordance with a method approved by the Manager, General Aviation and Rotorcraft Section, International Validation Branch, FAA; or EASA; or Airbus Helicopters' EASA Design Organization Approval (DOA). If approved by the DOA, the approval must include the DOA-authorized signature.
(10) Where the service information referenced in EASA AD 2021-0170 specifies to remove the TGB as per technical documentation, or remove the concerned module(s), this AD requires before further flight, removing the TGB and replacing it with an airworthy part, or repairing the TGB in accordance with a method approved by the Manager, General Aviation & Rotorcraft Section, International Validation Branch, FAA; or EASA; or Airbus Helicopters' EASA DOA. If approved by the DOA, the approval must include the DOA-authorized signature.
(11) Where the service information referenced in EASA AD 2021-0170 specifies if the collected particles cannot be clearly defined, perform a metallurgical analysis and contact Airbus Helicopters, before continuing flights, this AD does require before further flight, characterization of the particles collected, and performing a metallurgical analysis for any particles collected using a method in accordance with FAA-approved procedures. However, this AD does not require contacting the manufacturer to determine the characterization of the particles collected.
(12) Where the service information or any work card referenced in EASA AD 2021-0170 specifies to do the actions identified in paragraphs (h)(12)(i) through (v) of this AD, this AD does not include those requirements.
(i) Complete Appendix 4.A and 4.B.
(ii) Comply with paragraph 2.D.
(iii) Send all collected particles and metallurgical analysis report to depot level maintenance facility with the concerned module.
(iv) Inform EST using chip detection tracking sheet.
(v) Complete the “Particle Detection” follow up sheet.
(13) Where a work card referenced in the service information referenced in EASA AD
(14) This AD does not mandate compliance with the “Remarks” section of EASA AD 2021-0170.
(15) Where paragraph (7) of EASA AD 2021-0170 specifies to accomplish the applicable corrective actions “within the compliance time as identified in the applicable ASB,” this AD requires accomplishing corrective actions before further flight.
(16) Where paragraph (1) of EASA AD 2021-0170 specifies “within the applicable compliance time as identified in the close monitoring and until completion of the close monitoring,” this AD requires a close monitoring compliance time of a total of 25 hours TIS.
Although the service information referenced in EASA AD 2021-0170 specifies to submit certain information to the manufacturer, this AD does not include that requirement.
Special flight permits may be issued in accordance with 14 CFR 21.197 and 21.199, provided no passengers are onboard.
(1) The Manager, International Validation Branch, FAA, has the authority to approve AMOCs for this AD, if requested using the procedures found in 14 CFR 39.19. In accordance with 14 CFR 39.19, send your request to your principal inspector or local Flight Standards District Office, as appropriate. If sending information directly to the manager of the International Validation Branch, send it to the attention of the person identified in paragraph (l)(2) of this AD. Information may be emailed to:
(2) Before using any approved AMOC, notify your appropriate principal inspector, or lacking a principal inspector, the manager of the local flight standards district office/certificate holding district office.
(1) For EASA AD 2021-0170, contact EASA, Konrad-Adenauer-Ufer 3, 50668 Cologne, Germany; telephone +49 221 8999 000; email
(2) For more information about this AD, contact Andrea Jimenez, Aerospace Engineer, COS Program Management Section, Operational Safety Branch, Compliance & Airworthiness Division, FAA, 1600 Stewart Ave., Suite 410, Westbury, NY 11590; telephone (516) 228-7330; email
Federal Aviation Administration (FAA), DOT.
Notice of proposed rulemaking (NPRM).
This action proposes to remove the Class E airspace, designated as an extension to a Class D or Class E surface area. Additionally, this action proposes to establish Class E airspace extending upward from 700 feet above the surface. Lastly, this action proposes administrative updates to the Class D airspace legal description. These actions will ensure the safety and management of instrument flight rules (IFR) at the airport.
Comments must be received on or before May 26, 2022.
Send comments on this proposal to the U.S. Department of Transportation, Docket Operations, 1200 New Jersey Avenue SE, West Building Ground Floor, Room W12-140, Washington, DC 20590; telephone: 1-800-647-5527, or (202) 366-9826. You must identify FAA Docket No. FAA-2021-0243; Airspace Docket No. 20-AWP-10, at the beginning of your comments. You may also submit comments through the internet at
FAA Order JO 7400.11F, Airspace Designations and Reporting Points, and subsequent amendments can be viewed online at
Nathan A. Chaffman, Federal Aviation Administration, Western Service Center, Operations Support Group, 2200 S 216th Street, Des Moines, WA 98198; telephone (206) 231-3460.
The FAA's authority to issue rules regarding aviation safety is found in Title 49 of the United States Code. Subtitle I, Section 106 describes the authority of the FAA Administrator. Subtitle VII, Aviation Programs, describes in more detail the scope of the agency's authority. This rulemaking is promulgated under the authority described in Subtitle VII, Part A, Subpart I, Section 40103. Under that section, the FAA is charged with prescribing regulations to assign the use of airspace necessary to ensure the safety of aircraft and the efficient use of airspace. This regulation is within the scope of that authority, as it would modify Class D and Class E airspace, and establish Class E airspace at Oxnard Airport, to support IFR operations at the airport.
Interested parties are invited to participate in this proposed rulemaking by submitting such written data, views, or arguments, as they may desire. Comments that provide the factual basis supporting the views and suggestions presented are particularly helpful in developing reasoned regulatory decisions on the proposal. Comments are specifically invited on the overall regulatory, aeronautical, economic, environmental, and energy-related aspects of the proposal. Communications should identify both docket numbers and be submitted in triplicate to the address listed above. Persons wishing the FAA to acknowledge receipt of their comments on this notice must submit with those comments a self-addressed, stamped postcard on which the following statement is made: “Comments to Docket No. FAA-2021-0243; Airspace Docket No. 20-AWP-10”. The postcard will be date/time stamped and returned to the commenter.
All communications received before the specified closing date for comments will be considered before taking action on the proposed rule. The proposal contained in this notice may be changed in light of the comments received. A report summarizing each substantive public contact with FAA personnel concerned with this rulemaking will be filed in the docket.
An electronic copy of this document may be downloaded through the internet at
You may review the public docket containing the proposal, any comments received, and any final disposition in person in the Dockets Office (see the
This document proposes to amend FAA Order JO 7400.11F, Airspace Designations and Reporting Points, dated August 10, 2021, and effective September 15, 2021. FAA Order JO 7400.11F is publicly available as listed in the
The FAA is proposing an amendment to 14 CFR part 71 by removing the Class E airspace, designated as an extension to a Class D or Class E surface area. This airspace is west of the airport and is no longer required to contain IFR arrivals descending below 1,000 feet above the surface.
This action also proposes to establish Class E airspace extending upward from 700 feet above the surface. This airspace is designated to contain arriving IFR aircraft descending below 1,500 feet above the surface, and departing IFR aircraft until they reach 1,200 feet above the surface.
Finally, the FAA proposes several administrative updates to the Class D legal description. The current description requires modification to replace the use of the phrases “Notice to Airmen” and “Airport/Facility Directive.” These phrases should read “Notice to Air Missions” and “Chart Supplement,” respectively, in the Oxnard Class D airspace legal description. Additionally, the Oxnard Airport's Class D airspace abuts the Class D areas of Point Mugu Naval Air Station Airport and Camarillo Airport. The geographic coordinates in the Oxnard Airport Class D legal description should be updated to more accurately define the common borders of the three Class D surface areas, which would not represent a change to the current boundaries.
Class D, Class E4 and Class E5 airspace designations are published in paragraphs 5000, 6004, and 6005, respectively, of FAA Order JO 7400.11F, dated August 10, 2021, and effective September 15, 2021, which is incorporated by reference in 14 CFR 71.1. The Class E airspace designations listed in this document will be published subsequently in FAA Order JO 7400.11.
FAA Order JO 7400.11, Airspace Designations and Reporting Points, is published yearly and effective on September 15.
The FAA has determined that this regulation only involves an established body of technical regulations for which frequent and routine amendments are necessary to keep them operationally current, is non-controversial, and unlikely to result in adverse or negative comments. It, therefore: (1) Is not a “significant regulatory action” under Executive Order 12866; (2) is not a “significant rule” under DOT Regulatory Policies and Procedures (44 FR 11034; February 26, 1979); and (3) does not warrant preparation of a regulatory evaluation as the anticipated impact is so minimal. Since this is a routine matter that will only affect air traffic procedures and air navigation, it is certified that this rule, when promulgated, would not have a significant economic impact on a substantial number of small entities under the criteria of the Regulatory Flexibility Act.
This proposal will be subject to an environmental analysis in accordance with FAA Order 1050.1F, “Environmental Impacts: Policies and Procedures” prior to any FAA final regulatory action.
Airspace, Incorporation by reference, Navigation (air).
Accordingly, pursuant to the authority delegated to me, the Federal Aviation Administration proposes to amend 14 CFR part 71 as follows:
49 U.S.C. 106(f), 106(g), 40103, 40113, 40120; E.O. 10854, 24 FR 9565, 3 CFR, 1959-1963 Comp., p. 389.
That airspace extending upward from the surface to and including 2,000 feet MSL within a 4.3-mile radius of the airport, excluding that portion east and southeast of a line beginning at lat. 34°15′38.75″ N, long. 119°09′34.88″ W, to lat. 34°10′22″ N, long. 119°09′27″ W, to lat. 34°07′44.53″ N, long. 119°12′18.39″ W. This Class D airspace area is effective during the specific dates and times established in advance by a Notice to Air Missions. The effective date and time will thereafter be continuously published in the Chart Supplement.
That airspace extending upward from 700 feet above the surface within a 4.8-mile radius of the airport, and within 2 miles each side of the 091° bearing from the airport, extending from the 4.8-mile radius to 12.4 miles east of the airport, and within 1.8 miles each side of the 265° bearing from the airport, extending from the 4.8-mile radius to 6.5 miles west of Oxnard Airport.
Federal Aviation Administration (FAA), DOT.
Notice of proposed rulemaking (NPRM).
This action proposes to amend the Class E airspace at Milbank, SD, and the State of South Dakota. The FAA is proposing this action due to an airspace review conducted as part of the decommissioning of the Watertown very high frequency (VHF) omnidirectional range (VOR) as part of the VOR Minimal Operational Network (MON) Program. The geographic coordinates of the airport would also be updated to coincide with the FAA's aeronautical database.
Comments must be received on or before May 26, 2022.
Send comments on this proposal to the U.S. Department of Transportation, Docket Operations, West Building Ground Floor, Room W12-140, 1200 New Jersey Avenue SE, Washington, DC 20590; telephone (202) 366-9826, or (800) 647-5527. You must identify FAA Docket No. FAA-2022-0307/Airspace Docket No. 22-AGL-17 at the beginning of your comments. You may also submit comments through the internet at
FAA Order JO 7400.11F, Airspace Designations and Reporting Points, and subsequent amendments can be viewed online at
Jeffrey Claypool, Federal Aviation Administration, Operations Support Group, Central Service Center, 10101 Hillwood Parkway, Fort Worth, TX 76177; telephone (817) 222-5711.
The FAA's authority to issue rules regarding aviation safety is found in Title 49 of the United States Code. Subtitle I, Section 106 describes the authority of the FAA Administrator. Subtitle VII, Aviation Programs, describes in more detail the scope of the agency's authority. This rulemaking is promulgated under the authority described in Subtitle VII, Part A, Subpart I, Section 40103. Under that section, the FAA is charged with prescribing regulations to assign the use of airspace necessary to ensure the safety of aircraft and the efficient use of airspace. This regulation is within the scope of that authority as it would amend the Class E airspace extending upward from 700 feet above the surface at Milbank Municipal Airport, Milbank, SD, to support instrument flight rule operations at this airport, and amend the Class E airspace extending upward from 700 feet above the surface over the State of South Dakota to clarify, simplify, standardize the airspace over the state, and close any gaps in the Class E airspace to support instrument flight rule operation over the state.
Interested parties are invited to participate in this proposed rulemaking by submitting such written data, views, or arguments, as they may desire. Comments that provide the factual basis supporting the views and suggestions presented are particularly helpful in developing reasoned regulatory decisions on the proposal. Comments are specifically invited on the overall regulatory, aeronautical, economic, environmental, and energy-related aspects of the proposal. Communications should identify both docket numbers and be submitted in triplicate to the address listed above. Commenters wishing the FAA to acknowledge receipt of their comments on this notice must submit with those comments a self-addressed, stamped postcard on which the following statement is made: “Comments to Docket No. FAA-2022-0307/Airspace Docket No. 22-AGL-17.” The postcard will be date/time stamped and returned to the commenter.
All communications received before the specified closing date for comments will be considered before taking action on the proposed rule. The proposal contained in this notice may be changed in light of the comments received. A report summarizing each substantive public contact with FAA personnel concerned with this rulemaking will be filed in the docket.
An electronic copy of this document may be downloaded through the internet at
You may review the public docket containing the proposal, any comments received, and any final disposition in person in the Dockets Office (see the
This document proposes to amend FAA Order JO 7400.11F, Airspace Designations and Reporting Points, dated August 10, 2021, and effective September 15, 2021. FAA Order JO 7400.11F is publicly available as listed in the
The FAA is proposing an amendment to 14 CFR part 71 by:
Amending the Class E airspace extending upward from 700 feet above the surface at Milbank Municipal Airport, Milbank, SD, by removing the Watertown VOR from the airspace legal description; updating the geographic coordinates of the airport to coincide with the FAA's aeronautical database; and removing the airspace extending upward from 1,200 feet above the surface as it will become redundant with the amendment of the Class E airspace over the State of South Dakota;
And amending the Class E airspace extending upward from 1,200 feet above the surface at South Dakota, SD, from “. . . an area bounded on the north by lat. 43°40′00″ N, on the east by long. 100°05′00″ W, on the south by the South Dakota, Nebraska border, and on the west by long. 102°00′02″ W” to “. . . the boundary of the State of South Dakota” to clarify, simply, standardize the airspace over the state, and close any gaps in the Class E airspace.
This action is due to an airspace review conducted as part of the decommissioning of the Watertown VOR, which provided navigation information for the instrument procedures at this airport, as part of the VOR MON Program.
Class E airspace designations are published in paragraph 6005 of FAA Order JO 7400.11F, dated August 10, 2021, and effective September 15, 2021, which is incorporated by reference in 14 CFR 71.1. The Class E airspace designations listed in this document will be published subsequently in FAA Order JO 7400.11.
FAA Order JO 7400.11, Airspace Designations and Reporting Points, is published yearly and effective on September 15.
The FAA has determined that this regulation only involves an established body of technical regulations for which frequent and routine amendments are necessary to keep them operationally current, is non-controversial and unlikely to result in adverse or negative comments. It, therefore: (1) Is not a “significant regulatory action” under Executive Order 12866; (2) is not a “significant rule” under DOT Regulatory Policies and Procedures (44 FR 11034; February 26, 1979); and (3) does not warrant preparation of a regulatory evaluation as the anticipated impact is so minimal. Since this is a routine matter that will only affect air traffic procedures and air navigation, it is certified that this rule, when promulgated, would not have a significant economic impact on a substantial number of small entities under the criteria of the Regulatory Flexibility Act.
This proposal will be subject to an environmental analysis in accordance with FAA Order 1050.1F, “Environmental Impacts: Policies and Procedures” prior to any FAA final regulatory action.
Airspace, Incorporation by reference, Navigation (air).
Accordingly, pursuant to the authority delegated to me, the Federal Aviation Administration proposes to amend 14 CFR part 71 as follows:
49 U.S.C. 106(f), 106(g); 40103, 40113, 40120; E.O. 10854, 24 FR 9565, 3 CFR, 1959-1963 Comp., p. 389.
That airspace extending upward from 700 feet or more above the surface within a 6.4-mile radius of the Milbank Municipal Airport.
That airspace extending upward from 1,200 feet above the surface within the boundary of the State of South Dakota.
Federal Aviation Administration (FAA), DOT.
Notice of proposed rulemaking (NPRM).
This action proposes to establish Class E airspace at Fertile, MN. The FAA is proposing this action to support the establishment of public instrument procedures at Fertile Municipal Airport, Fertile, MN.
Comments must be received on or before May 26, 2022.
Send comments on this proposal to the U.S. Department of Transportation, Docket Operations, West Building Ground Floor, Room W12-140, 1200 New Jersey Avenue SE, Washington, DC 20590; telephone (202) 366-9826, or (800) 647-5527. You must identify FAA Docket No. FAA-2022-0352/Airspace Docket No. 22-AGL-15 at the beginning of your comments. You may also submit comments through the internet at
FAA Order JO 7400.11F, Airspace Designations and Reporting Points, and subsequent amendments can be viewed online at
Jeffrey Claypool, Federal Aviation Administration, Operations Support Group, Central Service Center, 10101 Hillwood Parkway, Fort Worth, TX 76177; telephone (817) 222-5711.
The FAA's authority to issue rules regarding aviation safety is found in Title 49 of the United States Code. Subtitle I, Section 106 describes the authority of the FAA Administrator. Subtitle VII, Aviation Programs, describes in more detail the scope of the agency's authority. This rulemaking is promulgated under the authority described in Subtitle VII, Part A, Subpart I, Section 40103. Under that section, the FAA is charged with prescribing regulations to assign the use of airspace necessary to ensure the safety of aircraft and the efficient use of airspace. This regulation is within the scope of that authority as it would establish Class E airspace extending upward form 700 feet above the surface at Fertile Municipal Airport, Fertile, MN, to support instrument flight rule operations at this airport.
Interested parties are invited to participate in this proposed rulemaking by submitting such written data, views, or arguments, as they may desire. Comments that provide the factual basis
All communications received before the specified closing date for comments will be considered before taking action on the proposed rule. The proposal contained in this notice may be changed in light of the comments received. A report summarizing each substantive public contact with FAA personnel concerned with this rulemaking will be filed in the docket.
An electronic copy of this document may be downloaded through the internet at
You may review the public docket containing the proposal, any comments received, and any final disposition in person in the Dockets Office (see the
This document proposes to amend FAA Order JO 7400.11F, Airspace Designations and Reporting Points, dated August 10, 2021, and effective September 15, 2021. FAA Order JO 7400.11F is publicly available as listed in the
The FAA is proposing an amendment to 14 CFR part 71 by establishing Class E airspace extending upward form 700 feet above the surface within a 6.3-mile radius of Fertile Municipal Airport, Fertile, MN.
This action supports the establishment of public instrument procedures at Fertile Municipal Airport.
Class E airspace designations are published in paragraph 6005 of FAA Order JO 7400.11F, dated August 10, 2021, and effective September 15, 2021, which is incorporated by reference in 14 CFR 71.1. The Class E airspace designations listed in this document will be published subsequently in FAA Order JO 7400.11.
FAA Order JO 7400.11, Airspace Designations and Reporting Points, is published yearly and effective on September 15.
The FAA has determined that this regulation only involves an established body of technical regulations for which frequent and routine amendments are necessary to keep them operationally current, is non-controversial and unlikely to result in adverse or negative comments. It, therefore: (1) Is not a “significant regulatory action” under Executive Order 12866; (2) is not a “significant rule” under DOT Regulatory Policies and Procedures (44 FR 11034; February 26, 1979); and (3) does not warrant preparation of a regulatory evaluation as the anticipated impact is so minimal. Since this is a routine matter that will only affect air traffic procedures and air navigation, it is certified that this rule, when promulgated, would not have a significant economic impact on a substantial number of small entities under the criteria of the Regulatory Flexibility Act.
This proposal will be subject to an environmental analysis in accordance with FAA Order 1050.1F, “Environmental Impacts: Policies and Procedures” prior to any FAA final regulatory action.
Airspace, Incorporation by reference, Navigation (air).
Accordingly, pursuant to the authority delegated to me, the Federal Aviation Administration proposes to amend 14 CFR part 71 as follows:
49 U.S.C. 106(f), 106(g); 40103, 40113, 40120; E.O. 10854, 24 FR 9565, 3 CFR, 1959-1963 Comp., p. 389.
That airspace extending upward from 700 feet above the surface within a 6.3-mile radius of Fertile Municipal Airport.
Federal Aviation Administration (FAA), DOT.
Notice of proposed rulemaking (NPRM).
This action proposes to amend the Class E airspace at Oakwood, TX. The FAA is proposing this action due to an airspace review conducted as part of the decommissioning of the Leona very high frequency (VHF) omnidirectional range (VOR) as part of the VOR Minimal Operational Network (MON) Program.
Comments must be received on or before May 26, 2022.
Send comments on this proposal to the U.S. Department of Transportation, Docket Operations, West Building Ground Floor, Room W12-140, 1200 New Jersey Avenue SE, Washington, DC 20590; telephone (202) 366-9826, or (800) 647-5527. You must identify FAA Docket No. FAA-2022-0310/Airspace Docket No. 22-ASW-6, at the beginning of your comments. You may also submit comments through the internet at
FAA Order JO 7400.11F, Airspace Designations and Reporting Points, and subsequent amendments can be viewed online at
Jeffrey Claypool, Federal Aviation Administration, Operations Support Group, Central Service Center, 10101 Hillwood Parkway, Fort Worth, TX 76177; telephone (817) 222-5711.
The FAA's authority to issue rules regarding aviation safety is found in Title 49 of the United States Code. Subtitle I, Section 106 describes the authority of the FAA Administrator. Subtitle VII, Aviation Programs, describes in more detail the scope of the agency's authority. This rulemaking is promulgated under the authority described in Subtitle VII, Part A, Subpart I, Section 40103. Under that section, the FAA is charged with prescribing regulations to assign the use of airspace necessary to ensure the safety of aircraft and the efficient use of airspace. This regulation is within the scope of that authority as it would amend the Class E airspace extending upward from 700 feet above the surface at Carter Ranch Airport, Oakwood, TX, to support instrument flight rule operations at this airport.
Interested parties are invited to participate in this proposed rulemaking by submitting such written data, views, or arguments, as they may desire. Comments that provide the factual basis supporting the views and suggestions presented are particularly helpful in developing reasoned regulatory decisions on the proposal. Comments are specifically invited on the overall regulatory, aeronautical, economic, environmental, and energy-related aspects of the proposal. Communications should identify both docket numbers and be submitted in triplicate to the address listed above. Commenters wishing the FAA to acknowledge receipt of their comments on this notice must submit with those comments a self-addressed, stamped postcard on which the following statement is made: “Comments to Docket No. FAA-2022-0310/Airspace Docket No. 22-ASW-6.” The postcard will be date/time stamped and returned to the commenter.
All communications received before the specified closing date for comments will be considered before taking action on the proposed rule. The proposal contained in this notice may be changed in light of the comments received. A report summarizing each substantive public contact with FAA personnel concerned with this rulemaking will be filed in the docket.
An electronic copy of this document may be downloaded through the internet at
You may review the public docket containing the proposal, any comments received, and any final disposition in person in the Dockets Office (see the
This document proposes to amend FAA Order JO 7400.11F, Airspace Designations and Reporting Points, dated August 10, 2021, and effective September 15, 2021. FAA Order JO 7400.11F is publicly available as listed in the
The FAA is proposing an amendment to 14 CFR part 71 by amending the Class E airspace extending upward from 700 feet above the surface at Carter Ranch Airport, Oakwood, TX, by removing the Leona VORTAC and associated extension from the airspace legal description; removing the exclusionary language from the airspace legal description as it is not required; and removing the city associated with the airport to comply with changes to FAA Order JO 7400.2N, Procedures for Handling Airspace Matters.
This action is the result of an airspace review conducted as part of the decommissioning of the Leona VOR, which provided navigation information for the instrument procedures at this airport, as part of the VOR MON Program.
Class E airspace designations are published in paragraph 6005 of FAA Order JO 7400.11F, dated August 10, 2021, and effective September 15, 2021, which is incorporated by reference in 14 CFR 71.1. The Class E airspace designations listed in this document will be published subsequently in FAA Order JO 7400.11.
FAA Order JO 7400.11, Airspace Designations and Reporting Points, is published yearly and effective on September 15.
The FAA has determined that this regulation only involves an established body of technical regulations for which frequent and routine amendments are necessary to keep them operationally current, is non-controversial and unlikely to result in adverse or negative comments. It, therefore: (1) Is not a “significant regulatory action” under Executive Order 12866; (2) is not a “significant rule” under DOT Regulatory Policies and Procedures (44 FR 11034; February 26, 1979); and (3) does not warrant preparation of a regulatory evaluation as the anticipated impact is so minimal. Since this is a routine matter that will only affect air traffic procedures and air navigation, it is certified that this rule, when promulgated, would not have a significant economic impact on a substantial number of small entities under the criteria of the Regulatory Flexibility Act.
This proposal will be subject to an environmental analysis in accordance with FAA Order 1050.1F, “Environmental Impacts: Policies and Procedures” prior to any FAA final regulatory action.
Airspace, Incorporation by reference, Navigation (air).
Accordingly, pursuant to the authority delegated to me, the Federal Aviation Administration proposes to amend 14 CFR part 71 as follows:
49 U.S.C. 106(f), 106(g); 40103, 40113, 40120; E.O. 10854, 24 FR 9565, 3 CFR, 1959-1963 Comp., p. 389.
That airspace extending upward from 700 feet above the surface within a 6.5-mile radius of Carter Ranch Airport.
Federal Aviation Administration (FAA), DOT.
Notice of proposed rulemaking (NPRM).
This action proposes to amend the Class E airspace at Baldwin, MI. The FAA is proposing this action due to an airspace review conducted as part of the decommissioning of the White Cloud very high frequency (VHF) omnidirectional range (VOR) as part of the VOR Minimal Operational Network (MON) Program. The geographic coordinates of the airport would also be updated to coincide with the FAA's aeronautical database.
Comments must be received on or before May 26, 2022.
Send comments on this proposal to the U.S. Department of Transportation, Docket Operations, West Building Ground Floor, Room W12-140, 1200 New Jersey Avenue SE, Washington, DC 20590; telephone (202) 366-9826, or (800) 647-5527. You must identify FAA Docket No. FAA-2022-0306/Airspace Docket No. 22-AGL-16 at the beginning of your comments. You may also submit comments through the internet at
FAA Order JO 7400.11F, Airspace Designations and Reporting Points, and subsequent amendments can be viewed online at
Jeffrey Claypool, Federal Aviation Administration, Operations Support Group, Central Service Center, 10101 Hillwood Parkway, Fort Worth, TX 76177; telephone (817) 222-5711.
The FAA's authority to issue rules regarding aviation safety is found in Title 49 of the United States Code. Subtitle I, Section 106 describes the authority of the FAA Administrator. Subtitle VII, Aviation Programs, describes in more detail the scope of the agency's authority. This rulemaking is promulgated under the authority described in Subtitle VII, Part A, Subpart I, Section 40103. Under that section, the FAA is charged with prescribing regulations to assign the use of airspace necessary to ensure the safety of aircraft and the efficient use of airspace. This regulation is within the scope of that authority as it would amend the Class E airspace extending upward from 700 feet above the surface at Baldwin Municipal Airport, Baldwin, MI, to support instrument flight rule operations at this airport.
Interested parties are invited to participate in this proposed rulemaking by submitting such written data, views, or arguments, as they may desire. Comments that provide the factual basis supporting the views and suggestions presented are particularly helpful in developing reasoned regulatory decisions on the proposal. Comments are specifically invited on the overall regulatory, aeronautical, economic, environmental, and energy-related aspects of the proposal. Communications should identify both docket numbers and be submitted in triplicate to the address listed above. Commenters wishing the FAA to acknowledge receipt of their comments on this notice must submit with those comments a self-addressed, stamped postcard on which the following statement is made: “Comments to Docket No. FAA-2022-0306/Airspace Docket No. 22-AGL-16.” The postcard will be date/time stamped and returned to the commenter.
All communications received before the specified closing date for comments will be considered before taking action on the proposed rule. The proposal contained in this notice may be changed in light of the comments received. A report summarizing each substantive public contact with FAA personnel concerned with this rulemaking will be filed in the docket.
An electronic copy of this document may be downloaded through the internet at
You may review the public docket containing the proposal, any comments received, and any final disposition in person in the Dockets Office (see the
This document proposes to amend FAA Order JO 7400.11F, Airspace Designations and Reporting Points, dated August 10, 2021, and effective September 15, 2021. FAA Order JO 7400.11F is publicly available as listed in the
The FAA is proposing an amendment to 14 CFR part 71 by amending the Class E airspace extending upward from 700 feet above the surface at Baldwin Municipal Airport, Baldwin, MI, by removing the White Cloud VOR and associated extension from the airspace legal description; and updating the geographic coordinates of the airport to coincide with the FAA's aeronautical database.
This action is due to an airspace review conducted as part of the decommissioning of the White Cloud VOR, which provided navigation information for the instrument procedures at this airport, as part of the VOR MON Program.
Class E airspace designations are published in paragraph 6005 of FAA Order JO 7400.11F, dated August 10, 2021, and effective September 15, 2021, which is incorporated by reference in 14 CFR 71.1. The Class E airspace designations listed in this document will be published subsequently in FAA Order JO 7400.11.
FAA Order JO 7400.11, Airspace Designations and Reporting Points, is published yearly and effective on September 15.
The FAA has determined that this regulation only involves an established body of technical regulations for which frequent and routine amendments are necessary to keep them operationally current, is non-controversial and unlikely to result in adverse or negative comments. It, therefore: (1) Is not a “significant regulatory action” under Executive Order 12866; (2) is not a “significant rule” under DOT Regulatory Policies and Procedures (44 FR 11034; February 26, 1979); and (3) does not warrant preparation of a regulatory evaluation as the anticipated impact is so minimal. Since this is a routine matter that will only affect air traffic procedures and air navigation, it is certified that this rule, when promulgated, would not have a significant economic impact on a substantial number of small entities under the criteria of the Regulatory Flexibility Act.
This proposal will be subject to an environmental analysis in accordance with FAA Order 1050.1F, “Environmental Impacts: Policies and Procedures” prior to any FAA final regulatory action.
Airspace, Incorporation by reference, Navigation (air).
Accordingly, pursuant to the authority delegated to me, the Federal Aviation Administration proposes to amend 14 CFR part 71 as follows:
49 U.S.C. 106(f), 106(g); 40103, 40113, 40120; E.O. 10854, 24 FR 9565, 3 CFR, 1959-1963 Comp., p. 389.
That airspace extending upward from 700 feet above the surface within a 6.5-mile radius of the Baldwin Municipal Airport.
Federal Aviation Administration (FAA), DOT.
Notice of proposed rulemaking (NPRM).
This action proposes to amend the Class E airspace at Connellsville, PA. The FAA is proposing this action as the result of an airspace review caused by the decommissioning of the Indian Head VHF omnidirectional range (VOR) navigation aids as part of the VOR Minimum Operational Network (MON) Program. The name and geographic coordinates of the airport would also be updated to coincide with the FAA's aeronautical database.
Comments must be received on or before May 26, 2022.
Send comments on this proposal to the U.S. Department of Transportation, Docket Operations, West Building Ground Floor, Room W12-140, 1200 New Jersey Avenue SE, Washington, DC 20590; telephone (202) 366-9826, or (800) 647-5527. You must identify FAA Docket No. FAA-2022-0309/Airspace Docket No. 22-AEA-3, at the beginning of your comments. You may also submit comments through the internet at
FAA Order JO 7400.11F, Airspace Designations and Reporting Points, and subsequent amendments can be viewed online at
Jeffrey Claypool, Federal Aviation Administration, Operations Support Group, Central Service Center, 10101 Hillwood Parkway, Fort Worth, TX 76177; telephone (817) 222-5711.
The FAA's authority to issue rules regarding aviation safety is found in Title 49 of the United States Code. Subtitle I, Section 106 describes the authority of the FAA Administrator. Subtitle VII, Aviation Programs, describes in more detail the scope of the agency's authority. This rulemaking is promulgated under the authority described in Subtitle VII, Part A, Subpart I, Section 40103. Under that section, the FAA is charged with prescribing regulations to assign the use of airspace necessary to ensure the safety of aircraft and the efficient use of airspace. This regulation is within the scope of that authority as it would amend the Class E airspace extending upward from 700 feet above the surface at Joseph A. Hardy Connellsville Airport, Connellsville, PA, to support instrument flight rule operations at this airport.
Interested parties are invited to participate in this proposed rulemaking by submitting such written data, views, or arguments, as they may desire. Comments that provide the factual basis supporting the views and suggestions presented are particularly helpful in developing reasoned regulatory decisions on the proposal. Comments are specifically invited on the overall regulatory, aeronautical, economic, environmental, and energy-related aspects of the proposal. Communications should identify both docket numbers and be submitted in triplicate to the address listed above. Commenters wishing the FAA to acknowledge receipt of their comments on this notice must submit with those comments a self-addressed, stamped postcard on which the following statement is made: “Comments to Docket No. FAA-2022-0309/Airspace Docket No. 22-AEA-3.” The postcard will be date/time stamped and returned to the commenter.
All communications received before the specified closing date for comments will be considered before taking action on the proposed rule. The proposal contained in this notice may be changed in light of the comments received. A report summarizing each substantive public contact with FAA personnel concerned with this rulemaking will be filed in the docket.
An electronic copy of this document may be downloaded through the internet at
You may review the public docket containing the proposal, any comments received, and any final disposition in person in the Dockets Office (see the
This document proposes to amend FAA Order JO 7400.11F, Airspace Designations and Reporting Points, dated August 10, 2021, and effective September 15, 2021. FAA Order JO 7400.11F is publicly available as listed in the
The FAA is proposing an amendment to 14 CFR part 71 by amending the Class E airspace extending upward from 700 feet above the surface within a 6.4-mile (decreased from a 6.5-mile) radius of Joseph A. Hardy Connellsville Airport, Connellsville, PA; removing the CAMOR LOM/NDB and associated extension from the airspace legal description as it is no longer needed; removing the Indian Head VORTAC and associated extension from the airspace legal description; and updating the name (previously Connellsville Airport) and geographic coordinates of the airport to coincide with the FAA's aeronautical database.
This action is the result of an airspace review caused by the decommissioning of the Indian Head VOR, which provided navigation information for the instrument procedures at this airport, as part of the VOR MON Program.
Class E airspace designations are published in paragraph 6005 of FAA Order JO 7400.11F, dated August 10, 2021, and effective September 15, 2021, which is incorporated by reference in 14 CFR 71.1. The Class E airspace designations listed in this document will be published subsequently in FAA Order JO 7400.11.
FAA Order JO 7400.11, Airspace Designations and Reporting Points, is published yearly and effective on September 15.
The FAA has determined that this regulation only involves an established body of technical regulations for which frequent and routine amendments are necessary to keep them operationally current, is non-controversial and unlikely to result in adverse or negative comments. It, therefore: (1) Is not a “significant regulatory action” under Executive Order 12866; (2) is not a “significant rule” under DOT Regulatory Policies and Procedures (44 FR 11034; February 26, 1979); and (3) does not warrant preparation of a regulatory evaluation as the anticipated impact is so minimal. Since this is a routine matter that will only affect air traffic procedures and air navigation, it is certified that this rule, when promulgated, would not have a significant economic impact on a substantial number of small entities under the criteria of the Regulatory Flexibility Act.
This proposal will be subject to an environmental analysis in accordance with FAA Order 1050.1F, “Environmental Impacts: Policies and Procedures” prior to any FAA final regulatory action.
Airspace, Incorporation by reference, Navigation (air).
Accordingly, pursuant to the authority delegated to me, the Federal Aviation Administration proposes to amend 14 CFR 71 as follows:
49 U.S.C. 106(f), 106(g); 40103, 40113, 40120; E.O. 10854, 24 FR 9565, 3 CFR, 1959-1963 Comp., p. 389.
That airspace extending upward from 700 feet above the surface within a 6.4-mile radius of Joseph A. Hardy Connellsville Airport.
Federal Aviation Administration (FAA), DOT.
Notice of proposed rulemaking (NPRM).
This action proposes to amend the Class E airspace at Mexia, TX. The FAA is proposing this action due to an airspace review conducted as part of the decommissioning of the Mexia non-directional beacon (NDB). The geographic coordinates of the airport would also be updated to coincide with the FAA's aeronautical database.
Comments must be received on or before May 26, 2022.
Send comments on this proposal to the U.S. Department of Transportation, Docket Operations, West Building Ground Floor, Room W12-140, 1200 New Jersey Avenue SE, Washington, DC 20590; telephone (202) 366-9826, or (800) 647-5527. You must identify FAA Docket No. FAA-2022-0346/Airspace Docket No. 22-ASW-8, at the beginning of your comments. You may also submit comments through the internet at
FAA Order JO 7400.11F, Airspace Designations and Reporting Points, and subsequent amendments can be viewed online at
Jeffrey Claypool, Federal Aviation Administration, Operations Support Group, Central Service Center, 10101 Hillwood Parkway, Fort Worth, TX 76177; telephone (817) 222-5711.
The FAA's authority to issue rules regarding aviation safety is found in Title 49 of the United States Code. Subtitle I, Section 106 describes the authority of the FAA Administrator. Subtitle VII, Aviation Programs, describes in more detail the scope of the agency's authority. This rulemaking is promulgated under the authority described in Subtitle VII, Part A, Subpart I, Section 40103. Under that section, the FAA is charged with prescribing regulations to assign the use of airspace necessary to ensure the safety of aircraft and the efficient use of airspace. This regulation is within the scope of that authority as it would amend the Class E airspace extending upward from 700 feet above the surface at Mexia-Limestone County Airport, Mexia, TX, to support instrument flight rule operations at this airport.
Interested parties are invited to participate in this proposed rulemaking by submitting such written data, views, or arguments, as they may desire. Comments that provide the factual basis supporting the views and suggestions presented are particularly helpful in developing reasoned regulatory decisions on the proposal. Comments are specifically invited on the overall regulatory, aeronautical, economic, environmental, and energy-related aspects of the proposal. Communications should identify both docket numbers and be submitted in triplicate to the address listed above. Commenters wishing the FAA to acknowledge receipt of their comments on this notice must submit with those comments a self-addressed, stamped postcard on which the following statement is made: “Comments to Docket No. FAA-2022-0346/Airspace Docket No. 22-ASW-8.” The postcard will be date/time stamped and returned to the commenter.
All communications received before the specified closing date for comments will be considered before taking action on the proposed rule. The proposal contained in this notice may be changed in light of the comments received. A report summarizing each substantive public contact with FAA personnel concerned with this rulemaking will be filed in the docket.
An electronic copy of this document may be downloaded through the internet at
You may review the public docket containing the proposal, any comments received, and any final disposition in person in the Dockets Office (see the
This document proposes to amend FAA Order JO 7400.11F, Airspace Designations and Reporting Points, dated August 10, 2021, and effective September 15, 2021. FAA Order JO 7400.11F is publicly available as listed in the
The FAA is proposing an amendment to 14 CFR part 71 by amending the Class E airspace extending upward from 700 feet above the surface to within a 6.5-mile (increased from a 6.4-mile) radius at Mexia-Limestone County Airport, Mexia, TX; removing the Mexia RBN and the associated extension from the airspace legal description; and updating the geographic coordinates of the airport to coincide with the FAA's aeronautical database.
This action is the result of an airspace review conducted as part of the decommissioning of the Mexia NDB
Class E airspace designations are published in paragraph 6005 of FAA Order JO 7400.11F, dated August 10, 2021, and effective September 15, 2021, which is incorporated by reference in 14 CFR 71.1. The Class E airspace designations listed in this document will be published subsequently in FAA Order JO 7400.11.
FAA Order JO 7400.11, Airspace Designations and Reporting Points, is published yearly and effective on September 15.
The FAA has determined that this regulation only involves an established body of technical regulations for which frequent and routine amendments are necessary to keep them operationally current, is non-controversial and unlikely to result in adverse or negative comments. It, therefore: (1) Is not a “significant regulatory action” under Executive Order 12866; (2) is not a “significant rule” under DOT Regulatory Policies and Procedures (44 FR 11034; February 26, 1979); and (3) does not warrant preparation of a regulatory evaluation as the anticipated impact is so minimal. Since this is a routine matter that will only affect air traffic procedures and air navigation, it is certified that this rule, when promulgated, would not have a significant economic impact on a substantial number of small entities under the criteria of the Regulatory Flexibility Act.
This proposal will be subject to an environmental analysis in accordance with FAA Order 1050.1F, “Environmental Impacts: Policies and Procedures” prior to any FAA final regulatory action.
Airspace, Incorporation by reference, Navigation (air).
Accordingly, pursuant to the authority delegated to me, the Federal Aviation Administration proposes to amend 14 CFR part 71 as follows:
49 U.S.C. 106(f), 106(g); 40103, 40113, 40120; E.O. 10854, 24 FR 9565, 3 CFR, 1959-1963 Comp., p. 389.
That airspace extending from 700 feet above the surface within a 6.5-mile radius of Mexia-Limestone County Airport.
Federal Aviation Administration (FAA), DOT.
Notice of proposed rulemaking (NPRM).
This action proposes to amend the Class E airspace at Graham, TX. The FAA is proposing this action due to an airspace review conducted as part of the decommissioning of the Graham non-directional beacon (NDB). The geographic coordinates of the airport would also be updated to coincide with the FAA's aeronautical database.
Comments must be received on or before May 26, 2022.
Send comments on this proposal to the U.S. Department of Transportation, Docket Operations, West Building Ground Floor, Room W12-140, 1200 New Jersey Avenue SE, Washington, DC 20590; telephone (202) 366-9826, or (800) 647-5527. You must identify FAA Docket No. FAA-2022-0311/Airspace Docket No. 22-ASW-7, at the beginning of your comments. You may also submit comments through the internet at
FAA Order JO 7400.11F, Airspace Designations and Reporting Points, and subsequent amendments can be viewed online at
Jeffrey Claypool, Federal Aviation Administration, Operations Support Group, Central Service Center, 10101 Hillwood Parkway, Fort Worth, TX 76177; telephone (817) 222-5711.
The FAA's authority to issue rules regarding aviation safety is found in Title 49 of the United States Code. Subtitle I, Section 106 describes the authority of the FAA Administrator. Subtitle VII, Aviation Programs, describes in more detail the scope of the agency's authority. This rulemaking is promulgated under the authority described in Subtitle VII, Part A, Subpart I, Section 40103. Under that section, the FAA is charged with prescribing regulations to assign the use of airspace necessary to ensure the safety of aircraft and the efficient use of airspace. This regulation is within the scope of that authority as it would amend the Class E airspace extending upward from 700 feet above the surface at Graham Municipal Airport, Graham, TX, to support instrument flight rule operations at this airport.
Interested parties are invited to participate in this proposed rulemaking by submitting such written data, views, or arguments, as they may desire. Comments that provide the factual basis supporting the views and suggestions presented are particularly helpful in developing reasoned regulatory decisions on the proposal. Comments are specifically invited on the overall regulatory, aeronautical, economic, environmental, and energy-related aspects of the proposal. Communications should identify both docket numbers and be submitted in
All communications received before the specified closing date for comments will be considered before taking action on the proposed rule. The proposal contained in this notice may be changed in light of the comments received. A report summarizing each substantive public contact with FAA personnel concerned with this rulemaking will be filed in the docket.
An electronic copy of this document may be downloaded through the internet at
You may review the public docket containing the proposal, any comments received, and any final disposition in person in the Dockets Office (see the
This document proposes to amend FAA Order JO 7400.11F, Airspace Designations and Reporting Points, dated August 10, 2021, and effective September 15, 2021. FAA Order JO 7400.11F is publicly available as listed in the
The FAA is proposing an amendment to 14 CFR part 71 by amending the Class E airspace extending upward from 700 feet above the surface to within a 6.5-mile (increased from a 6.4-mile) radius of Graham Municipal Airport, Graham, TX; removing the Graham RBN and the associated extension from the airspace legal description; and updating the geographic coordinates of the airport to coincide with the FAA's aeronautical database.
This action is the result of an airspace review conducted as part of the decommissioning of the Graham NDB which provided navigation information for the instrument procedures at this airport.
Class E airspace designations are published in paragraph 6005 of FAA Order JO 7400.11F, dated August 10, 2021, and effective September 15, 2021, which is incorporated by reference in 14 CFR 71.1. The Class E airspace designations listed in this document will be published subsequently in FAA Order JO 7400.11.
FAA Order JO 7400.11, Airspace Designations and Reporting Points, is published yearly and effective on September 15.
The FAA has determined that this regulation only involves an established body of technical regulations for which frequent and routine amendments are necessary to keep them operationally current, is non-controversial and unlikely to result in adverse or negative comments. It, therefore: (1) Is not a “significant regulatory action” under Executive Order 12866; (2) is not a “significant rule” under DOT Regulatory Policies and Procedures (44 FR 11034; February 26, 1979); and (3) does not warrant preparation of a regulatory evaluation as the anticipated impact is so minimal. Since this is a routine matter that will only affect air traffic procedures and air navigation, it is certified that this rule, when promulgated, would not have a significant economic impact on a substantial number of small entities under the criteria of the Regulatory Flexibility Act.
This proposal will be subject to an environmental analysis in accordance with FAA Order 1050.1F, “Environmental Impacts: Policies and Procedures” prior to any FAA final regulatory action.
Airspace, Incorporation by reference, Navigation (air).
Accordingly, pursuant to the authority delegated to me, the Federal Aviation Administration proposes to amend 14 CFR part 71 as follows:
49 U.S.C. 106(f), 106(g); 40103, 40113, 40120; E.O. 10854, 24 FR 9565, 3 CFR, 1959-1963 Comp., p. 389.
That airspace extending upward from 700 feet above the surface within a 6.5-mile radius of Graham Municipal Airport.
Federal Aviation Administration (FAA), DOT.
Notice of proposed rulemaking (NPRM).
This action proposes to amend the Class E airspace at Mosinee, WI. The FAA is proposing this action due to an airspace review conducted as part of the decommissioning of the Wausau very high frequency (VHF) omnidirectional range (VOR) as part of the VOR Minimal Operational Network (MON) Program.
Comments must be received on or before May 26, 2022.
Send comments on this proposal to the U.S. Department of
FAA Order JO 7400.11F, Airspace Designations and Reporting Points, and subsequent amendments can be viewed online at
Jeffrey Claypool, Federal Aviation Administration, Operations Support Group, Central Service Center, 10101 Hillwood Parkway, Fort Worth, TX 76177; telephone (817) 222-5711.
The FAA's authority to issue rules regarding aviation safety is found in Title 49 of the United States Code. Subtitle I, Section 106 describes the authority of the FAA Administrator. Subtitle VII, Aviation Programs, describes in more detail the scope of the agency's authority. This rulemaking is promulgated under the authority described in Subtitle VII, Part A, Subpart I, Section 40103. Under that section, the FAA is charged with prescribing regulations to assign the use of airspace necessary to ensure the safety of aircraft and the efficient use of airspace. This regulation is within the scope of that authority as it would amend the Class E airspace extending upward from 700 feet above the surface at Central Wisconsin Airport, Mosinee, WI, to support instrument flight rule operations at this airport.
Interested parties are invited to participate in this proposed rulemaking by submitting such written data, views, or arguments, as they may desire. Comments that provide the factual basis supporting the views and suggestions presented are particularly helpful in developing reasoned regulatory decisions on the proposal. Comments are specifically invited on the overall regulatory, aeronautical, economic, environmental, and energy-related aspects of the proposal. Communications should identify both docket numbers and be submitted in triplicate to the address listed above. Commenters wishing the FAA to acknowledge receipt of their comments on this notice must submit with those comments a self-addressed, stamped postcard on which the following statement is made: “Comments to Docket No. FAA-2022-0308/Airspace Docket No. 22-AGL-18.” The postcard will be date/time stamped and returned to the commenter.
All communications received before the specified closing date for comments will be considered before taking action on the proposed rule. The proposal contained in this notice may be changed in light of the comments received. A report summarizing each substantive public contact with FAA personnel concerned with this rulemaking will be filed in the docket.
An electronic copy of this document may be downloaded through the internet at
You may review the public docket containing the proposal, any comments received, and any final disposition in person in the Dockets Office (see the
This document proposes to amend FAA Order JO 7400.11F, Airspace Designations and Reporting Points, dated August 10, 2021, and effective September 15, 2021. FAA Order JO 7400.11F is publicly available as listed in the
The FAA is proposing an amendment to 14 CFR part 71 by amending the Class E airspace extending upward from 700 feet above the surface at Central Wisconsin Airport, Mosinee, WI, by removing the Wausau VORTAC from the airspace legal description; adding an extension 1 mile each side of the 170° bearing from the Central Wisconsin: RWY 35-LOC extending from the 7-mile radius from the airport to 11.2 miles south of the airport; adding an extension 1 mile each side of the 257° bearing from the airport extending from the 7-mile radius of the airport to 11.5 miles west of the airport; and removing the extension north of the airport as the amended extension would be contained within the Wausau, WI, Class E airspace so would be redundant.
This action is due to an airspace review conducted as part of the decommissioning of the Wausau VOR, which provided navigation information for the instrument procedures at this airport, as part of the VOR MON Program.
Class E airspace designations are published in paragraph 6005 of FAA Order JO 7400.11F, dated August 10, 2021, and effective September 15, 2021, which is incorporated by reference in 14 CFR 71.1. The Class E airspace designations listed in this document will be published subsequently in FAA Order JO 7400.11.
FAA Order JO 7400.11, Airspace Designations and Reporting Points, is published yearly and effective on September 15.
The FAA has determined that this regulation only involves an established body of technical regulations for which frequent and routine amendments are necessary to keep them operationally current, is non-controversial and unlikely to result in adverse or negative comments. It, therefore: (1) Is not a “significant regulatory action” under Executive Order 12866; (2) is not a “significant rule” under DOT Regulatory Policies and Procedures (44 FR 11034; February 26, 1979); and (3) does not warrant preparation of a regulatory evaluation as the anticipated impact is so minimal. Since this is a routine matter that will only affect air traffic procedures and air navigation, it is certified that this rule, when promulgated, would not have a significant economic impact on a substantial number of small entities under the criteria of the Regulatory Flexibility Act.
This proposal will be subject to an environmental analysis in accordance with FAA Order 1050.1F, “Environmental Impacts: Policies and Procedures” prior to any FAA final regulatory action.
Airspace, Incorporation by reference, Navigation (air).
Accordingly, pursuant to the authority delegated to me, the Federal Aviation Administration proposes to amend 14 CFR part 71 as follows:
49 U.S.C. 106(f), 106(g); 40103, 40113, 40120; E.O. 10854, 24 FR 9565, 3 CFR, 1959-1963 Comp., p. 389.
That airspace extending upward from 700 feet above the surface within a 7-mile radius of the Central Wisconsin Airport, and within 1 mile each side of the 170° bearing from the Central Wisconsin: RWY 35-LOC extending from the 7-mile radius of the airport to 11.2 miles south of the airport, and within 1 mile each side of the 257° bearing from the Central Wisconsin: RWY 08-LOC extending from the 7-mile radius of the airport to 11.5 miles west of the airport.
Food and Drug Administration, HHS.
Notification of petition.
The Food and Drug Administration (FDA or we) is announcing that we have filed a petition, submitted by Anitox Corporation, proposing that the food additive regulations be amended to provide for the safe use of trans-2-hexenal as a preservative in food for poultry and swine.
The food additive petition was filed on March 8, 2022.
For access to the docket to read background documents or comments received, go to
Carissa Adams, Center for Veterinary Medicine (HFV-221), Food and Drug Administration, 7519 Standish Pl., Rockville, MD 20855, 240-402-6283,
Under section 409(b)(5) of the Federal Food, Drug, and Cosmetic Act (21 U.S.C. 348(b)(5)), we are giving notice that we have filed a food additive petition (FAP 2315), submitted by Anitox Corporation, 1055 Progress Circle, Lawrenceville, GA 30043-4646. The petition proposes to amend 21 CFR part 573—Food Additives Permitted in Feed and Drinking Water of Animals to provide for the safe use of trans-2-hexenal as a preservative in food for poultry and swine.
The petitioner has claimed that this action is categorically excluded under 21 CFR 25.32(r) because it is of a type that does not individually or cumulatively have a significant effect on the human environment. In addition, the petitioner has stated that, to their knowledge, no extraordinary circumstances exist that may significantly affect the quality of the human environment. If FDA determines a categorical exclusion applies, neither an environmental assessment nor an environmental impact statement is required. If FDA determines a categorical exclusion does not apply, we will request an environmental assessment and make it available for public inspection.
Drug Enforcement Administration, Department of Justice.
Notice of proposed rulemaking.
The Drug Enforcement Administration proposes placing two phenethylamine hallucinogens, as identified in this proposed rule, in schedule I of the Controlled Substances Act. This action is being taken, in part, to enable the United States to meet its obligations under the 1971 Convention on Psychotropic Substances for one of these substances. If finalized, this action would impose the regulatory controls and administrative, civil, and criminal sanctions applicable to schedule I controlled substances on persons who handle (manufacture, distribute, reverse distribute, import, export, engage in research, conduct instructional activities or chemical analysis with, or possess), or propose to handle these two specific controlled substances.
Comments must be submitted electronically or postmarked on or before June 10, 2022.
Interested persons may file a request for hearing or waiver of hearing pursuant to 21 CFR 1308.44 and in accordance with 21 CFR 1316.45 and/or 1316.47, as applicable. Requests for hearing and waivers of an opportunity for a hearing or to participate in a hearing, together with a written statement of position on the matters of fact and law asserted in the hearing, must be received on or before May 11, 2022.
Interested persons may file written comments on this proposal in
•
•
•
Terrence L. Boos, Drug and Chemical Evaluation Section, Diversion Control Division, Drug Enforcement Administration; Telephone: (571) 362-3249.
In this proposed rule, the Drug Enforcement Administration (DEA) proposes to schedule the following two controlled substances in schedule I of the Controlled Substances Act (CSA), including their salts, isomers, and salts of isomers whenever the existence of such salts, isomers, and salts of isomers is possible within the specific chemical designation:
All comments received in response to this docket are considered part of the public record. DEA will make comments available, unless reasonable cause is given, for public inspection online at
If you want to submit confidential business information as part of your comment, but do not want it to be made publicly available, you must include the phrase “CONFIDENTIAL BUSINESS INFORMATION” in the first paragraph of your comment. You must also prominently identify the confidential business information to be redacted within the comment.
DEA will generally make available in publicly redacted form comments containing personal identifying information and confidential business information identified, as directed above. If a comment has so much confidential business information that DEA cannot effectively redact it, DEA may not make available publicly all or part of that comment. Comments posted to
An electronic copy of this document and supplemental information to this proposed rule are available at
Pursuant to 21 U.S.C. 811(a), this action is a formal rulemaking “on the record after opportunity for a hearing.” Such proceedings are conducted pursuant to the provisions of the Administrative Procedure Act, 5 U.S.C. 551-559. 21 CFR 1308.41-1308.45; 21 CFR part 1316, subpart D. Interested persons may file requests for a hearing or notices of intent to participate in a hearing in conformity with the requirements of 21 CFR 1308.44(a) or (b), and such requests must include a statement of interest in the proceeding and the objections or issues, if any, concerning which the person desires to be heard. 21 CFR 1316.47(a). Any interested person may file a waiver of an opportunity for a hearing or to participate in a hearing together with a written statement regarding the interested person's position on the matters of fact and law involved in any hearing as set forth in 21 CFR 1308.44(c).
All requests for a hearing and waivers of participation, together with a written statement of position on the matters of fact and law involved in such hearing, must be sent to DEA using the address information provided above.
The CSA provides that proceedings for the issuance, amendment, or repeal of the scheduling of any drug or other substance may be initiated by the Attorney General on his own motion. 21 U.S.C. 811(a). This proposed action is supported by a recommendation from the then-Assistant Secretary for Health of the Department of Health and Human Services (HHS).
In addition, the United States is a party to the 1971 United Nations Convention on Psychotropic Substances (1971 Convention), February 21, 1971, 32 U.S.T. 543, 1019 U.N.T.S. 175, as amended. Procedures respecting changes in drug schedules under the 1971 Convention are governed domestically by 21 U.S.C. 811(d)(2)-(4). When the United States receives notification of a scheduling decision pursuant to Article 2 of the 1971 Convention indicating that a drug or other substance has been added to a schedule specified in the notification, the Secretary of HHS (Secretary),
DOI and DOC belong to the phenethylamine class of drugs with hallucinogenic properties, similar to 2,5-dimethoxy-4-methamphetamine (DOM), a schedule I hallucinogen. DOI and DOC have no approved medical use in the United States.
On September 26, 2018, DEA, in accordance with the provisions of 21 U.S.C. 811(b), requested HHS provide a scientific and medical evaluation as well as a scheduling recommendation for DOI and DOC. Additionally, on May 7, 2020, the Secretary-General of the United Nations advised the Secretary of State of the United States that the Commission on Narcotic Drugs (CND), during its 63rd Session in March 2020, voted to place DOC in Schedule I of the 1971 Convention (CND Dec/63/4). As a signatory to this international treaty, the United States is required, by scheduling under the CSA, to place appropriate controls on DOC to meet the minimum requirements of the treaty.
Article 2, paragraph 7(a), of the 1971 Convention sets forth the minimum requirements that the United States must meet when a substance has been added to Schedule I of the 1971 Convention. The United States must adhere to specific export and import provisions that are provided in the 1971 Convention. This requirement is accomplished by the CSA with the export and import provisions established in 21 U.S.C. 952, 953, 957, and 958, and in accordance with 21 CFR part 1312. Under Article 16, paragraph 4, of the 1971 Convention, the United States is required to provide annual statistical reports to the International Narcotics Control Board (INCB). Using INCB Form P, the United States shall provide the following information: (1) In regard to each substance in Schedule I and II of the 1971 Convention, quantities manufactured, exported to and imported from each country or region as well as stocks held by manufacturers; (2) in regard to each substance in Schedule III and IV of the 1971 Convention, quantities manufactured, as well as quantities exported and imported; (3) in regard to each substance in Schedule II and III of the 1971 Convention, quantities used in the manufacture of exempt preparations; and (4) in regard to each substance in Schedule II-IV of the 1971 Convention, quantities used for the manufacture of non-psychotropic substances or products. Lastly, under Article 2, paragraph 7(a)(vi) of the 1971 Convention, the United States must adopt measures in accordance with Article 22 to address violations of any statutes or regulations that are adopted pursuant to its obligations under the 1971 Convention. The United States complies with this provision as persons acting outside the legal framework established by the CSA are subject to administrative, civil, and/or criminal action.
Pursuant to 21 U.S.C. 811(b), DEA gathered the necessary data on DOI and DOC and on September 26, 2018, submitted it to the then-Assistant Secretary for Health of HHS with a request for a scientific and medical evaluation of available information and a scheduling recommendation for DOI and DOC. On September 28, 2020, HHS provided to DEA a scientific and medical evaluation entitled “Basis for the Recommendation to Control 2,5-dimethoxy-4-iodoamphetamine (DOI) and 2,5-dimethoxy-4-chloroamphetamine (DOC) and their Salts in Schedule I of the Controlled Substances Act (CSA)” and a scheduling recommendation. Following consideration of the eight factors and findings related to these substances' abuse potential, legitimate medical use, and dependence liability, HHS recommended that DOI and DOC and their salts be controlled in schedule I of the CSA under 21 U.S.C. 812(b). In response, DEA reviewed the scientific and medical evaluation and scheduling recommendation provided by HHS and all other relevant data, and completed its own eight-factor review pursuant to 21 U.S.C. 811(c). Included below is a brief summary of each factor as analyzed by HHS and DEA in their respective eight-factor analyses, and as considered by DEA in this proposed scheduling determination. Please note that both DEA and HHS analyses are available in their entirety under “Supporting Documents” of the public docket for this proposed rule at
In addition to considering the information HHS provided in its scientific and medical evaluation document for DOI and DOC, DEA also considered all other relevant data regarding actual or relative potential for abuse of DOI and DOC. The term “abuse” is not defined in the CSA; however, the legislative history of the CSA suggests the following four prongs in determining whether a particular drug or substance has a potential for abuse:
DEA reviewed the scientific and medical evaluation provided by HHS
a.
Data show that DOI and DOC have been encountered by law enforcement in the United States (see Factor 5), indicating DOI and DOC availability for abuse. According to HHS, individuals are using DOI and DOC for their hallucinogenic effects and taking them in amounts sufficient to create a hazard to their health.
b.
HHS states that DOI and DOC are not Food and Drug Administration (FDA)-approved drugs for treatment in the United States and is unaware of any country in which their use is legal. DOI and DOC are available for purchase from legitimate chemical synthesis companies because they are used in scientific research. There is no evidence of diversion from these companies.
c.
DOI and DOC are not found in FDA-approved drug products and practitioners may neither legally prescribe nor dispense these substances. Therefore, individuals are taking DOI and DOC on their own initiative, rather than based on medical advice from practitioners licensed by law to administer drugs. This is consistent with the data from law enforcement seizures and case reports indicating that individuals are taking DOI and DOC on their own initiative rather than on the medical advice of licensed practitioners.
d.
Chemically, DOI and DOC are analogs of the schedule I hallucinogen DOM. The effects and pharmacological action of DOI and DOC are similar to those of other schedule I hallucinogens, such as DOM and lysergic acid diethylamide (LSD), which have no accepted medical use and a high abuse potential.
In drug discrimination studies (an
Due to the psychological and cognitive disturbances associated with DOI and DOC, as with other schedule I hallucinogens, it is reasonable to assume that DOI and DOC have substantial capability to be a hazard to the health of the user and to the safety of the community.
In humans, HHS reported that anecdotal reports of hallucinogenic experiences with DOI and DOC are available on online drug forums such as
Additionally, a World Health Organization (WHO) critical review of DOC
DOI and DOC are centrally-acting hallucinogens and part of the phenethylamine hallucinogen family and share structural similarities with schedule I phenethylamine hallucinogens such as DOM. DOI (CAS 42203-78-1) has a molecular formula of C
The history and current pattern of abuse of DOI and DOC are described in law enforcement reports and anecdotal reports by drug abusers. In the United States, law enforcement entities initially encountered DOI and DOC in 2005, according to the National Forensic Laboratory Information System (NFLIS).
Anecdotal reports on the internet indicate that individuals are using substances they identified as DOI and DOC for their hallucinogenic effects. Importantly, it is impossible to know if the street drugs sold to an individual as DOI or DOC are actually the substances they are marketed as in the absence of chemical analysis or evaluation of biological fluids following ingestion. However, in animal drug discrimination studies, DOI and DOC produced effects that are similar to the effects elicited by schedule I hallucinogens such as DOM, LSD, and DMT.
A July 2019 report from the European Monitoring Centre for Drugs and Drug Addiction included data from their
Data from NFLIS indicate that DOI and DOC were found in samples starting in 2005, in the United States. Specifically, there were 40 NFLIS reports for DOI from 2005 through February 2021, and 785 NFLIS reports for DOC during the same period. DOI has been encountered in 14 states, whereas DOC has been encountered in 38 states. In response to abuse and safety concerns, DOI has been controlled in Florida.
Abuse of DOI and DOC has been characterized as causing acute public health and safety issues worldwide. WHO reports that DOC has been available in Europe since 2001. Based on available abuse data, public health risk, and drug trafficking data, the WHO recommended to the United Nations (UN) that DOC be controlled internationally. In March 2020, the UN Commission on Narcotic Drugs voted to place DOC into Schedule I of the 1971 Convention.
6.
DOI and DOC share similar mechanisms of action with and produce similar physiological and subjective effects (see Factor 2 for more information) as other schedule I hallucinogens, such as DOM, DMT, and LSD. Thus, DOI and DOC pose the same risks to public health as similar hallucinogens. Predominantly, the risks to public health are borne by users (
According to HHS, the physiological dependence liability of DOI and DOC in animals and humans is not reported in scientific and medical literature. Thus, it is not possible to determine whether DOI and DOC produce physiological dependence following acute or chronic administration.
According to HHS, DOI, DOC, and other related phenethylamine hallucinogens (such as the schedule I substance DOM) are highly abusable substances. Drug discrimination studies in animals indicate that DOI and DOC fully substitute to the discriminative stimulus effects of schedule I hallucinogens DOM, LSD, and DMT. HHS notes that hallucinogens are not usually associated with physical dependence, likely due to the rapid development of tolerance precluding daily administration. Hallucinogen abusers may develop psychological dependence as evidenced by the continued use of these substances despite knowledge of their potential toxic and adverse effects.
DOI and DOC are not immediate precursors of any controlled substance of the CSA as defined by 21 U.S.C. 802(23).
Based on consideration of the scientific and medical evaluation and accompanying recommendation of HHS, and on DEA's own eight-factor analysis, DEA finds that these facts and all relevant data constitute substantial evidence of potential for abuse of DOI and DOC. As such, DEA proposes to schedule DOI and DOC as controlled substances under the CSA.
The CSA establishes five schedules of controlled substances known as schedules I, II, III, IV, and V. The CSA also outlines the findings required to place a drug or other substance in any particular schedule, per 21 U.S.C. 812(b). After consideration of the analysis and recommendation of the then-Assistant Secretary for Health of HHS and review of all other available data, the Administrator of DEA, pursuant to 21 U.S.C. 812(b)(1), finds that:
(1) DOI and DOC have a high potential for abuse that is comparable to other schedule I substances, such as the phenethylamine hallucinogen DOM;
(2) FDA has not approved a marketing application for a drug product containing DOI or DOC for any therapeutic indication. In addition, DEA and HHS know of no clinical studies or petitioners claiming an accepted medical use in the United States. Therefore, DOI and DOC have no currently accepted medical use in treatment in the United States.
(3) There is a lack of accepted safety for use of DOI and DOC under medical supervision. The use of DOC is associated with serious adverse consequences including deaths. Since DOI is structurally similar to DOC and produces effects similar to DOC, it is likely that DOI may produce serious adverse events similar to DOC. Because DOI and DOC have no approved medical use and have not been investigated as new drugs, their safety for use under medical supervision has not been determined. Therefore, there is a lack of accepted safety for use of DOI and DOC under medical supervision.
Based on these findings, the Administrator of DEA concludes that DOI and DOC warrant control in schedule I of the CSA. More precisely, because of their hallucinogenic effects, and because they may produce hallucinogenic-like tolerance and dependence in humans, DEA proposes to place DOI and DOC, including their salts, isomers, and salts of isomers whenever the existence of such salts, isomers, and salts of isomers is possible within the specific chemical description, in 21 CFR 1308.11(d) (the hallucinogenic substances category of schedule I).
If this rule is finalized as proposed, DOI and DOC would be subject to the CSA's schedule I regulatory controls and administrative, civil, and criminal
1.
3.
4.
5.
6.
Any person who registers with DEA on or after the effective date of the final scheduling action would be required to take an initial inventory of all stocks of controlled substances (including DOI and DOC) on hand on the date the registrant first engages in the handling of controlled substances, pursuant to 21 U.S.C. 827 and in accordance with 21 CFR 1304.03, 1304.04, and 1304.11(a) and (b).
After the initial inventory, every DEA registrant would be required to take a new inventory of all controlled substances (including DOI and DOC) on hand every two years, pursuant to 21 U.S.C. 827, and in accordance with 21 CFR 1304.03, 1304.04, and 1304.11.
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10.
In accordance with 21 U.S.C. 811(a), this proposed scheduling action is subject to formal rulemaking procedures performed “on the record after opportunity for a hearing,” which are conducted pursuant to the provisions of 5 U.S.C. 556 and 557. The CSA sets forth the procedures and criteria for scheduling a drug or other substance. Such actions are exempt from review by the Office of Management and Budget pursuant to section 3(d)(1) of Executive Order (E.O.) 12866 and the principles reaffirmed in E.O. 13563.
This proposed regulation meets the applicable standards set forth in sections 3(a) and 3(b)(2) of E.O. 12988 to eliminate drafting errors and ambiguity, minimize litigation, provide a clear legal standard for affected conduct, and promote simplification and burden reduction.
This proposed rulemaking does not have federalism implications warranting the application of E.O. 13132. The proposed rule does not have substantial direct effects on the States, on the relationship between the National Government and the States, or on the distribution of power and responsibilities among the various levels of government.
This proposed rule does not have tribal implications warranting the application of E.O. 13175. It does not have substantial direct effects on one or more Indian tribes, on the relationship between the Federal Government and Indian tribes, or on the distribution of power and responsibilities between the Federal Government and Indian tribes.
This proposed action does not impose a new collection of information requirement under the Paperwork Reduction Act, 44 U.S.C. 3501-3521.
The Administrator of DEA, in accordance with the Regulatory Flexibility Act, 5 U.S.C. 601-612, has reviewed this proposed rule, and by approving it, certifies that it will not
DEA proposes placing the substances DOI and DOC (chemical names: 2,5-dimethoxy-4-iodoamphetamine [DOI] and 2,5-dimethoxy-4-chloroamphetamine [DOC]), including their salts, isomers, and salts of isomers whenever the existence of such salts, isomers, and salts of isomers is possible within the specific chemical designation, in schedule I of the CSA. This action is being taken, in part, to enable the United States to meet its obligations under the 1971 Convention for DOC. If finalized, this action would impose the regulatory controls and administrative, civil, and criminal sanctions applicable to schedule I controlled substances on persons who handle (manufacture, distribute, reverse distribute, import, export, engage in research, conduct instructional activities or chemical analysis with, or possess), or propose to handle DOI and DOC.
According to HHS, and also by DEA's findings in this proposed rule, DOI and DOC have a high potential for abuse, have no currently accepted medical use in treatment in the United States, and lack accepted safety for use under medical supervision. There appear to be no legitimate sources for DOI and DOC as marketed drugs in the United States, but DEA notes that these substances are available for purchase from legitimate suppliers for scientific research. There is no evidence of significant diversion of DOI and DOC from legitimate suppliers. As such, the proposed rule will not, if promulgated, result in a significant effect on a substantial number of small entities.
On the basis of information contained in the “Regulatory Flexibility Act” section above, DEA has determined pursuant to the Unfunded Mandates Reform Act (UMRA) of 1995 (2 U.S.C. 1501
Administrative practice and procedure, Drug traffic control, Reporting and recordkeeping requirements.
For the reasons set out above, 21 CFR part 1308 is proposed to be amended to read as follows:
21 U.S.C. 811, 812, 871(b), 956(b), unless otherwise noted.
(d) * * *
Postal Regulatory Commission.
Proposed rulemaking.
The Commission is proposing to add rules which revise the Commission's rules of practice and procedure regarding notices, motions, and information requests. The Commission invites public comment on the proposed rules.
For additional information, Order No. 6141 can be accessed electronically through the Commission's website at
David A. Trissell, General Counsel, at 202-789-6820.
Pursuant to 39 U.S.C. 503, the Commission establishes this rulemaking docket to propose amendments to the Commission's rules of practice and procedure regarding notices, motions, and information requests.
The proposed amendments provide rules relating to motions for reconsideration of final Commission orders.
The proposed amendments revise the Commission's rules on notices, motions, and information requests, within its rules of practice and procedure, to provide rules specific to motions for reconsideration. The proposed amendments reflect the Commission's current practice of hearing timely motions for reconsideration of its final orders.
Under the proposed rules, any party may file a motion for reconsideration of a Commission final order within 15 days of the issuance of the order subject to the motion. All motions for reconsideration must briefly and specifically allege material errors of fact or law, and the relief sought, and must be confined to new questions raised by the determination or action ordered and upon which the moving party had no prior opportunity to submit arguments. Finally, no motion for reconsideration shall stay the effect of an order of the Commission unless the Commission orders otherwise.
Administrative practice and procedure, Confidential business information, Freedom of information, Sunshine Act.
For the reasons stated in the preamble, the Commission proposes to amend chapter III of title 39 of the Code of Federal Regulations as follows:
39 U.S.C. 404(d); 503; 504; 3661.
(a) Any person may file a motion requesting reconsideration of a final order by the Commission.
(b) The motion shall be filed within 15 days of the issuance of the final order that is the subject of the motion and must:
(1) Briefly and specifically allege material errors of fact or law and the relief sought; and
(2) Be confined to new questions raised by the determination or action ordered and upon which the moving party had no prior opportunity to submit arguments.
(c) Unless the Commission orders otherwise, the filing of a motion for reconsideration shall not stay the effect of an order of the Commission.
Environmental Protection Agency (EPA).
Proposed rule.
The Environmental Protection Agency (EPA or the “Agency”) is proposing approval of South Dakota's submittal requesting that EPA recognize the merger of South Dakota's Department of Agriculture (DOA) with the Department of Environment and Natural Resources (DENR) to form the new Department of Agriculture and Natural Resources (DANR) and incorporate corresponding non-substantive revisions to the South Dakota Codified Law (SDCL) and the Administrative Rules of South Dakota (ARSD) into South Dakota's State Implementation Plan. Accordingly, EPA is proposing to approve South Dakota's submittal in accordance with the Clean Air Act (CAA).
Written comments must be received on or before May 11, 2022.
Submit your comments, identified by Docket ID No. EPA-R08-OAR-2021-0807, to the Federal Rulemaking Portal:
Kate Gregory, Air and Radiation Division, U.S. Environmental Protection Agency (EPA), Region 8, Mail Code 8P-ARD-QP, 1595 Wynkoop Street, Denver, Colorado 80202-1129, telephone number: (303) 312-6175, email address:
Throughout this document “we,” “us,” and “our” means EPA. In the Final Rules section of this
Environmental protection, Air pollution control, Carbon monoxide, Greenhouse gases, Incorporation by reference, Intergovernmental relations, Lead, Nitrogen dioxide, Ozone,
42 U.S.C. 7401
National Marine Fisheries Service (NMFS), National Oceanic and Atmospheric Administration (NOAA), Commerce.
Proposed rule; request for comments.
NMFS is proposing to implement a flexible shortfin mako shark retention limit with a default limit of zero in commercial and recreational Atlantic highly migratory species (HMS) fisheries. NMFS proposes to leave the default limit of zero in place unless and until changed. Changes to the retention limit could only be made based on regulatory criteria and only if consistent with an allowable retention determination made by the International Commission for the Conservation of Atlantic Tunas (ICCAT) pursuant to Recommendation 21-09. This action is necessary to implement the binding recommendation of ICCAT adopted in 2021, as authorized under the Atlantic Tunas Convention Act (ATCA), and to achieve domestic management objectives under the Magnuson-Stevens Fishery Conservation and Management Act (Magnuson-Stevens Act).
Written comments must be received by May 11, 2022. NMFS will hold a public hearing via conference call and webinar for this proposed rule on April 27, 2022, from 2 p.m. to 5 p.m. EDT. For webinar registration information, see the
Electronic copies of this proposed rule and supporting documents are available from the HMS Management Division website at
You may submit comments on this document, identified by NOAA-NMFS-2022-0015, by electronic submission. Submit all electronic public comments via the Federal e-Rulemaking Portal. Go to
Carrie Soltanoff (
North Atlantic shortfin mako sharks are managed primarily under the authority of the Magnuson-Stevens Act (16 U.S.C. 1801
NMFS has prepared an Environmental Assessment (EA), Regulatory Impact Review (RIR), and an Initial Regulatory Flexibility Analysis (IRFA), which analyze the anticipated environmental, social, and economic impacts of several alternatives for each of the major issues contained in this proposed rule. A brief summary of the alternatives considered and the background of this proposed rule are provided below. Additional information regarding this rule and overall Atlantic shark management can be found in the draft EA/RIR/IRFA, the 2006 Consolidated HMS FMP and its amendments, the annual HMS Stock Assessment and Fishery Evaluation (SAFE) Reports, and online at
A copy of the draft EA/RIR/IRFA prepared for this proposed rule is available from NMFS (see
The North Atlantic shortfin mako shark (
In 2017, ICCAT's scientific body, the Standing Committee on Research and Statistics (SCRS), conducted a benchmark stock assessment for North Atlantic shortfin mako sharks. ICCAT accepted the assessment and adopted new management measures for the stock in ICCAT fisheries (Recommendation 17-08). These measures largely focused on maximizing live releases of North Atlantic shortfin mako sharks, allowing retention only in certain limited circumstances, increasing minimum size limits, and improving data collection. Further details are available in Amendment 11 to the 2006 Consolidated HMS FMP (Amendment 11; 84 FR 5358, February 21, 2019). Following the SCRS assessment, NMFS applied domestic stock status determination criteria in 2017 and determined the stock to be overfished and experiencing overfishing.
In 2019, the SCRS completed a North Atlantic shortfin mako shark stock assessment update and provided additional rebuilding information that reflected rebuilding timeframes of two mean generation times (through 2070). Following the update, ICCAT adopted Recommendation 19-06, which maintained the shortfin mako shark management measures in Recommendation 17-08 and called for the development of additional measures in order to establish a rebuilding plan with a high probability of avoiding overfishing and rebuilding the stock to biomass at maximum sustainable yield (B
Given that Recommendation 19-06 called for the development of additional measures in order to establish a rebuilding plan, ICCAT at the November
Recommendation 21-09 also includes minimum standards for safe handling and release procedures and enhanced reporting and compliance requirements, which are consistent with existing HMS regulations and do not require additional rulemaking for U.S. implementation. The recommendation calls on the SCRS to continue to prioritize research such as identifying mating, pupping and nursery grounds, and other high concentration areas of North Atlantic shortfin mako sharks, options for spatial-temporal measures, and mitigation measures. By 2024, the SCRS will advise ICCAT on whether size restrictions are effective tools to meet required mortality reductions. Future North Atlantic shortfin mako shark stock assessments are called for in 2024, 2029, and 2034.
Following the adoption of ICCAT Recommendation 17-08 and NMFS' determination that the North Atlantic shortfin mako shark stock is overfished with overfishing occurring, NMFS took action to implement the binding ICCAT recommendation to immediately address overfishing and begin to rebuild the shortfin mako shark stock. NMFS first published an emergency rule in 2018 (83 FR 8946, March 2, 2018; measures extended through March 2019, 83 FR 42452, August 22, 2018) followed by Amendment 11, with a final rule issued in 2019 (84 FR 5358, February 21, 2019), to reduce fishing mortality of shortfin mako sharks in HMS commercial and recreational fisheries. These rules allowed retention only in certain limited circumstances, increased minimum size limits for retention in the recreational fisheries, and improved data collection. In commercial fisheries, Amendment 11 allowed retention of shortfin mako sharks with pelagic longline gear only if the shark is dead at haulback and there is a functional electronic monitoring system on board the vessel, consistent with the ICCAT requirement. Amendment 11 also allowed retention of shortfin mako sharks caught with bottom longline or gillnet gear by persons issued a Directed or Incidental shark limited access permit (LAP) if the shark is dead at haulback, without an electronic monitoring requirement, given the small number of shortfin mako sharks that are caught in those fisheries and NMFS' determination that additional monitoring was not necessary. In recreational fisheries, Amendment 11 implemented an increase in the minimum size limit for the retention of shortfin mako sharks from 54 inches fork length (FL) (137 cm FL) to 71 inches FL (180 cm FL) for male shortfin mako sharks and 83 inches FL (210 cm FL) for female shortfin mako sharks. Amendment 11 also expanded the requirement for the use of circle hooks to all recreational shark fisheries in order to reduce post-release mortality of shortfin mako sharks (the use of circle hooks was already required in recreational shark fisheries south of Chatham, MA, and for all pelagic longline and bottom longline vessels).
At the time of the 2017 shortfin mako shark stock assessment and adoption of Recommendation 17-08, U.S. catches represented approximately 14 percent, on average, of total North Atlantic shortfin mako catch. The measures in the emergency rule and Amendment 11 were successful at reducing overall U.S. shortfin mako shark catch by 90 percent from 2013-2017 average levels, to approximately 3 percent of total North Atlantic shortfin mako shark catch in 2020.
In order to meet domestic management objectives, implement Recommendation 21-09, and acknowledge the possibility of future retention, NMFS is proposing to implement a flexible shortfin mako shark retention limit with a default limit of zero in commercial and recreational HMS fisheries. Consistent with current ICCAT provisions, the retention limit would be established as zero until Atlantic-wide catch levels are below 250 mt, a level that has a high probability of ending overfishing and starting to rebuild the stock. ICCAT determined that this measure was needed to bring catch levels down to or below that amount by all ICCAT parties, and thus was an important measure contributing to conservation and management of the stock. The shortfin mako shark retention limit per trip of zero would be in place unless and until changed after consideration of regulatory criteria and consistent with any ICCAT retention allowances pursuant to Recommendation 21-09. The retention limit per trip would apply to commercial vessels issued a Directed or Incidental shark LAP using pelagic longline, bottom longline, or gillnet gear, and to recreational HMS permit holders (those who hold HMS Angling or Charter/Headboat permits, and Atlantic Tunas General category and Swordfish General Commercial permits when participating in a registered HMS tournament). Under the default limit of zero and existing prohibitions for other gear types (see §§ 635.21(a)(4) and 635.24(a)(4)(i) and (iii)), all commercial and recreational fishermen would be required to release all shortfin mako sharks, whether dead or alive at haulback.
During the fishing year, based on consideration of the inseason trip limit adjustment criteria (§ 635.24(a)(8)) and to the extent any future retention is allowable as determined by ICCAT consistent with Recommendation 21-09, NMFS could increase the shortfin mako shark retention limit from the default, or subsequently decrease the retention limit, for the commercial fishery, the recreational fishery, or both. If a retention limit greater than zero is implemented for the commercial fishery, the current commercial shortfin mako shark restrictions would apply,
The flexible retention limit as proposed would apply in the HMS bottom longline and gillnet fisheries for sharks, although those fisheries are not considered to be ICCAT fisheries, which are defined as fisheries for tuna or tuna-like species under the current ICCAT Convention. This approach is consistent with the approach taken in Amendment 11, where NMFS determined it was appropriate to implement parallel management measures in the non-ICCAT shark fisheries given that the stock remained overfished with overfishing occurring. This approach would ensure consistency in HMS regulations, which will provide clarity for both the regulated community and for enforcement purposes and thus ensure more effective implementation. NMFS did not, however, implement the ICCAT requirement that electronic monitoring be onboard in these fisheries, because bottom longline and gillnet fisheries have minimal interactions with this species, and electronic monitoring was unnecessary to track such interactions effectively. Under this rule, after considering the measures implemented under Amendment 11 that considered the requirements of the Magnuson-Stevens Act, the status of shortfin mako sharks, and the need for consistency, NMFS is proposing to apply a flexible retention limit with a default of zero to these gears.
Under this proposed rule, research and sampling of shortfin mako sharks would continue to be allowed under exempted fishing permits (EFPs) and scientific research permits (SRPs) (see §§ 635.27(b)(4) and 635.32). Collection of shortfin mako sharks under display permits would not be allowed, and collection of shortfin mako sharks for research under EFPs and/or SRPs would be considered on a case-by-case basis. Collection of shortfin mako sharks under EFPs and/or SRPs could include sampling or limited retention where needed for scientific research. Only non-lethal sampling would be permitted on shortfin mako sharks that are alive at haulback. NMFS intends to limit any EFPs and/or SRPs to closely monitored studies and to limit the number of such permits and the number of sharks that may be sampled and/or retained. In recent years (2018-2021), NMFS has issued eight EFPs and related permits per year on average that include shortfin mako sharks, and zero to one shortfin mako sharks were retained per year under those permits. When retention is otherwise prohibited, any retention pursuant to an EFP and/or SRP would be accounted for under the applicable shark research and display quota. If retention is otherwise permitted consistent with ICCAT recommendations, NMFS would count any retention under EFPs and/or SRPs against the applicable ICCAT retention allowance. Research on shortfin mako sharks is critical to gathering scientific information about the stock and to help ensure that stock assessments have sufficient data. Permitted collection of shortfin mako sharks for scientific research would be consistent with the biological sampling and research needs described in Recommendation 21-09 and other relevant ICCAT recommendations, as well as research needs identified by the SCRS, including to provide data for future shortfin mako shark stock assessments. For example, Recommendations 21-09 and 13-10 provide for collection of biological samples of shortfin mako and other sharks that are dead at haulback during commercial fishing operations by scientific observers or individuals duly permitted by the ICCAT party. If NMFS receives EFP or SRP applications that are outside the scope described in this action, NMFS would provide notice to the public and solicit comments through the annual EFP notice of intent.
NMFS is also proposing a minor modification to the pelagic longline gear restrictions at § 635.21(c)(1)(iv) to further clarify the shortfin mako shark live release requirements.
In addition to the proposed measures, in the EA for this action, NMFS analyzed a no action alternative that would maintain the current commercial and recreational shortfin mako shark regulations as implemented under Amendment 11, and an alternative to place shortfin mako sharks on the prohibited sharks list in the HMS regulations (see §§ 635.24(a)(5), 635.34(c), and Table 1, section D, in appendix A to 50 CFR part 635). The EA for this action describes the impacts of those two alternatives and the preferred alternative proposed here.
NMFS is requesting comments on this proposed rule which may be submitted via
During the comment period, NMFS will hold a public hearing via conference call and webinar for this proposed action. Information on the conference call and webinar will be posted at:
The public is reminded that NMFS expects participants at a public webinar to conduct themselves appropriately. At the beginning of the webinar, the moderator will explain how the webinar will be conducted and how and when participants can provide comments. NMFS representative(s) will structure the conference call and webinars so that all members of the public will be able to comment, if they so choose, regardless of the controversial nature of the subject(s). Participants are expected to respect the ground rules, and those that do not may be asked to leave the webinar.
The NMFS Assistant Administrator has determined that the proposed rule is consistent with the 2006 Consolidated HMS FMP and its amendments, other provisions of the Magnuson-Stevens Act, ATCA, and other applicable law, subject to further consideration after public comment.
This proposed rule has been determined to be not significant for purposes of Executive Order 12866.
This proposed rule contains no information collection requirements under the Paperwork Reduction Act of 1995.
An IRFA was prepared, as required by section 603 of the Regulatory Flexibility Act (RFA). The IRFA describes the economic impact this proposed rule, if adopted, would have on small entities. A description of the action, why it is being considered, and the legal basis for this action are contained at the beginning of this section in the preamble and in the
Section 603(b)(1) requires agencies to describe the reasons why the action is being considered. In compliance with section 603(b)(1) of the RFA, the purpose of this proposed rulemaking is, consistent with the 2006 Consolidated HMS FMP objectives, the Magnuson-Stevens Act, ATCA, and other applicable law, to analyze the impacts of the alternatives for implementing the ICCAT-recommended limit on retention of North Atlantic shortfin mako sharks.
Section 603(b)(2) of the RFA requires agencies to state the objectives of, and legal basis for, the proposed action. In compliance with section 603(b)(2) of the RFA, the objective of this proposed rulemaking is to implement ICCAT recommendation consistent with ATCA and achieve domestic management objectives under the Magnuson-Stevens Act.
Section 603(b)(3) of the RFA requires agencies to provide an estimate of the number of small entities to which the rule would apply. NMFS established a small business size standard of $11 million in annual gross receipts for all businesses in the commercial fishing industry (NAICS 11411) for RFA compliance purposes. The Small Business Administration (SBA) has established size standards for all other major industry sectors in the United States, including the scenic and sightseeing transportation (water) sector (NAICS code 487210), which includes for-hire (charter/party boat) fishing entities. The SBA has defined a small entity under the scenic and sightseeing transportation (water) sector as one with average annual receipts (revenue) of less than $8.0 million.
NMFS considers all HMS permit holders, both commercial and for-hire, to be small entities because they had average annual receipts of less than their respective sector's standard of $11 million and $8 million. Regarding those entities that would be directly affected by the proposed measures, the average annual revenue per active pelagic longline vessel is estimated to be $202,000, based on approximately 90 active vessels that produced an estimated $18.2 million in revenue in 2020, well below the NMFS small business size standard for commercial fishing businesses of $11 million. No single pelagic longline vessel has exceeded $11 million in revenue in recent years. Other non-longline HMS commercial fishing vessels typically earn less revenue than pelagic longline vessels and, thus, would also be considered small entities.
The proposed rule would apply to the 213 Shark Directed LAP holders, 256 Shark Incidental LAP holders, and 4,055 HMS Charter/Headboat permit holders, based on 2021 data. Of those HMS Charter/Headboat permit holders, 3,021 obtained shark endorsements. In 2018 and 2019, 800 HMS for-hire trips targeting shortfin mako sharks were taken per year on average (7 percent on average of total HMS for-hire trips), from Maine to Virginia as captured in Large Pelagics Survey data. These trips were taken by, on average, 10 percent of HMS for-hire charter/headboat vessels. On average, there were 44 Atlantic HMS tournaments that targeted pelagic sharks (primarily shortfin mako sharks) in 2018 through 2021. There were approximately 1,555 directed shortfin mako shark trips in registered HMS tournaments on average in 2018 through 2021. On average, 26 federally-permitted dealers per year purchased shortfin mako sharks in 2018 through 2020. NMFS has determined that the preferred alternative would not likely directly affect any small organizations or small government jurisdictions defined under RFA, nor would there be disproportionate economic impacts between large and small entities.
Section 603(b)(4) of the RFA requires agencies to describe any new reporting, record-keeping, and other compliance requirements. This proposed rule does not contain any new collection of information, reporting, or record-keeping requirements.
Under section 603(b)(5) of the RFA, agencies must identify, to the extent practicable, relevant Federal rules which duplicate, overlap, or conflict with the proposed action. Fishermen, dealers, and managers in these fisheries must comply with a number of international agreements, domestic laws, and other fishery management measures. These include, but are not limited to, the Magnuson-Stevens Act, ATCA, the High Seas Fishing Compliance Act, the Marine Mammal Protection Act, the Endangered Species Act, the National Environmental Policy Act, the Paperwork Reduction Act, and the Coastal Zone Management Act. This proposed action has been determined not to duplicate, overlap, or conflict with any Federal rules.
Under section 603(c) of the RFA, agencies must describe any significant alternatives to the proposed rule which accomplish the stated objectives of applicable statutes and which minimize any significant economic impact of the proposed rule on small entities. Specifically, the RFA (5 U.S.C. 603(c)(1)-(4)) lists four general categories of significant alternatives to assist an agency in the development of significant alternatives. These categories of alternatives are: (1) Establishment of differing compliance or reporting requirements or timetables that take into account the resources available to small entities; (2) clarification, consolidation, or simplification of compliance and reporting requirements under the rule for such small entities; (3) use of performance rather than design standards; and, (4) exemptions from coverage of the rule, or any part thereof, for small entities.
NMFS examined each of these categories of alternatives. Regarding the first, second, and fourth categories, NMFS cannot establish differing compliance or reporting requirements for small entities or exempt small entities from coverage of the rule or parts of it because all of the businesses impacted by this rule are considered small entities and thus the requirements are already designed for small entities. NMFS does not know of any performance or design standards that would satisfy the aforementioned objectives of this rulemaking while, concurrently, complying with the Magnuson-Stevens Act. As described below, NMFS analyzed several different alternatives in this proposed rulemaking, and provides rationales for identifying the preferred alternative to achieve the desired objectives.
The alternatives considered and analyzed are described below. The IRFA assumes that each vessel will have similar catch and gross revenues to show the relative impact of the proposed action on vessels.
Alternative 1, the no action alternative, would not implement any new management measures in the commercial or for-hire shark fisheries to decrease mortality of shortfin mako sharks. In recent years, about 49,000 pounds dressed weight (dw) (22,000 kilograms dw) of shortfin mako sharks have been landed commercially on average from 2018 through 2020 and the commercial revenues from shortfin mako sharks have averaged
Alternative 2, the preferred alternative, would implement a flexible shortfin mako shark retention limit with a default limit of zero. The limit of zero would be in place unless and until changed after considering inseason trip limit adjustment criteria (§ 635.24(a)(8)) and when consistent with ICCAT retention allowances pursuant to Recommendation 21-09. This would apply to commercial vessels issued a Directed or Incidental shark LAP and to HMS Charter/Headboat permit holders. Under a retention limit of zero, HMS for-hire fishermen and commercial vessels would be required to release all shortfin mako sharks that are alive at haulback and discard all shortfin mako sharks that are dead at haulback. In recent years, about 49,000 pounds dw (22,000 kilograms dw) of shortfin mako sharks have been landed commercially on average from 2018 through 2020, and the commercial revenues from shortfin mako sharks have averaged approximately $96,000 fishery-wide per year. Almost all of the shortfin mako shark commercial landings, based on dealer reports, were made by pelagic longline vessels. An average of 49 pelagic longline vessels landed shortfin mako sharks from 2018 through 2020. Therefore, the average loss in annual revenue from shortfin mako shark landings per pelagic longline vessel that landed shortfin mako sharks would be approximately $1,960 per year ($96,000/49). However, the overall economic impacts associated with these reductions in revenue are not expected to be substantial, as shortfin mako sharks comprise less than one percent of total HMS ex-vessel revenues on average. Additionally, the magnitude of shortfin mako landings by other commercial gear types (bottom longline and gillnet) is very small. This alternative would have minor economic costs on small entities in those commercial fisheries compared to the no action alternative because these measures would reduce the number of shortfin mako sharks landed and sold by these fishing vessels. Shortfin mako sharks are rarely a target species, however, and generate much less revenue overall than other more valuable target species. In for-hire fisheries and tournaments, retention would be prohibited, and fishermen would only be authorized to catch and release shortfin mako sharks. A retention limit of zero for shortfin mako sharks is likely to be a disincentive to fishing by some portion of the for-hire shark fishery, particularly those individuals that would otherwise have planned to target and retain shortfin mako sharks. Charter/headboat operators may experience some decline in demand if shortfin mako sharks may not be retained, resulting in minor adverse economic impacts. For Atlantic HMS tournaments, the 1,555 directed shortfin mako shark trips, on average, that take place in HMS tournaments would likely no longer take place, resulting in a loss of approximately $1.1 million in expenditures, out of an estimated $85.6 million in total HMS tournament expenditures by participating teams. Overall, this alternative would have minor economic costs on small entities in the short-term compared to the no action alternative.
During the fishing year, based on the inseason trip limit adjustment criteria (§ 635.24(a)(8)), and to the extent consistent with any future retention allowance that is determined by ICCAT pursuant to Recommendation 21-09, NMFS could increase the shortfin mako shark retention limit for the commercial fishery, the recreational fishery, or both, as appropriate. If the retention limit for the commercial and recreational fisheries is greater than zero, the current shortfin mako shark regulatory requirements, described under Alternative 1, would apply. This would result in no additional economic impacts on small entities associated with this fishery in the long-term compared to the no action alternative.
Alternative 3 would place shortfin mako on the prohibited sharks list to prohibit any catch or retention of shortfin mako sharks in commercial and recreational HMS fisheries.
Fisheries, Fishing, Fishing vessels, Foreign relations, Imports, Penalties, Reporting and recordkeeping requirements, Statistics, Treaties.
For the reasons set out in the preamble, 50 CFR part 635 is proposed to be amended as follows:
16 U.S.C. 971
(e) * * *
(6) For shortfin mako sharks landed when the recreational retention limit specified at § 635.22(c)(8) is greater than zero, males must be at least 71 inches (180 cm) fork length, and females must be at least 83 inches (210 cm) fork length.
(c) * * *
(1) * * *
(iv) Has pelagic longline gear on board, persons aboard that vessel are required to promptly release in a manner that causes the least harm any shortfin mako shark that is alive at the time of haulback, consistent with the requirements specified at paragraphs (a)(1) and (c)(6)(i) of this section. When the commercial retention limit specified at § 635.24(a)(4)(v) is greater than zero, any shortfin mako shark that is dead at the time of haulback may be retained provided the electronic monitoring system is installed and functioning in compliance with the requirements at § 635.9.
(c) * * *
(2) Only one shark from the following list may be retained per vessel per trip, subject to the size limits described in § 635.20(e)(2) and (4): Atlantic blacktip, Gulf of Mexico blacktip, bull, great hammerhead, scalloped hammerhead, smooth hammerhead, lemon, nurse, spinner, tiger, blue, common thresher, oceanic whitetip, porbeagle, Atlantic sharpnose, finetooth, Atlantic blacknose, Gulf of Mexico blacknose, and bonnethead.
(8) At the start of each fishing year, the default shortfin mako shark retention limit of zero sharks per vessel per trip will apply. During the fishing year, NMFS may adjust the default shortfin mako shark trip limit per the inseason trip limit adjustment criteria listed in § 635.24(a)(8). Any retention within the trip limit is subject to the size limits described in § 635.20(e)(6).
The additions and revisions read as follows:
(a) * * *
(4)
(iii) Consistent with paragraph (a)(4)(ii) of this section, a person who owns or operates a vessel that has been issued an incidental shark LAP may retain, possess, land, or sell no more than 16 SCS and pelagic sharks, combined, per vessel per trip, if the respective fishery is open per §§ 635.27 and 635.28. Of those 16 SCS and pelagic sharks per vessel per trip, no more than 8 shall be blacknose sharks. Shortfin mako sharks may only be retained under the commercial retention limits by persons using pelagic longline, bottom longline, or gillnet gear only if NMFS has adjusted the commercial retention limit above zero pursuant to paragraph (a)(4)(v) of this section and only if the shark is dead at the time of haulback and consistent with the provisions at § 635.21(c)(1), (d)(5), and (g)(6). If the vessel has also been issued a permit with a shark endorsement and retains a shortfin mako shark, recreational retention limits apply to all sharks retained and none may be sold, per § 635.22(c)(7).
(v) At the start of each fishing year, the default shortfin mako shark retention limit of zero sharks will apply. During the fishing year, NMFS may adjust the default shortfin mako shark trip limit per the inseason trip limit adjustment criteria listed in paragraph (a)(8) of this section.
(8) * * *
(v) Variations in seasonal distribution, abundance, or migratory patterns of the relevant shark species based on scientific and fishery-based knowledge;
(vi) Effects of catch rates in one part of a region or sub-region precluding vessels in another part of that region or sub-region from having a reasonable opportunity to harvest a portion of the relevant quota; and/or
(vii) Any shark retention allowance set by ICCAT, the amount of remaining allowance, and the expected or reported catch rates of the relevant shark species, based on dealer and other harvest reports.
(b) * * *
(4) * * *
(i) The base annual quota for persons who collect LCS other than sandbar, SCS, pelagic sharks other than shortfin mako, blue sharks, porbeagle sharks, or prohibited species under a display permit or EFP is 57.2 mt ww (41.2 mt dw).
(v) No persons may collect shortfin mako sharks under a display permit. Collection of shortfin mako sharks for research under EFPs and/or scientific research permits (SRPs) may be considered on a case-by-case basis and any associated mortality would be deducted from the shark research and display quota if shortfin mako shark retention is otherwise prohibited or counted against U.S. allowable retention levels established at ICCAT when retention is allowed.
Agricultural Marketing Service, USDA.
Notice and request for comments.
In accordance with the Paperwork Reduction Act of 1995 (PRA), this notice announces the Agricultural Marketing Service's (AMS) intention to request approval, from the Office of Management and Budget, for an information collection package for the web form to be used for the collection of complaints and tips from the public through the
Comments on this notice must be received by June 10, 2022 to be assured of consideration.
Interested persons are invited to submit comments concerning this notice by using the electronic process available at
S. Brett Offutt, Chief Legal Officer/Policy Advisor, Packers and Stockyards Division, USDA AMS Fair Trade Practices Program, 1400 Independence Ave. SW, stop 3601, Washington, DC 20250; Phone: (202) 690-4355; or Email:
Comments are invited on: (1) Whether the proposed collection of information is necessary for the proper performance of the functions of the agency, including whether the information will have practical utility; (2) the accuracy of the agency's estimate of the burden of the proposed collection of information including the validity of the methodology and assumptions used; (3) ways to enhance the quality, utility, and clarity of the information to be collected; and (4) ways to minimize the burden of the collection of information on those who are to respond, including the use of appropriate automated, electronic, mechanical, or other technological collection techniques or other forms of information technology.
All responses to this notice will be summarized and included in the request for OMB approval. All comments will become a matter of public record.
The Department of Agriculture has submitted the following information collection requirement(s) to OMB for review and clearance under the Paperwork Reduction Act of 1995, Public Law 104-13. Comments are requested regarding; whether the collection of information is necessary for the proper performance of the functions of the agency, including whether the information will have practical utility; the accuracy of the agency's estimate of burden including the validity of the methodology and assumptions used; ways to enhance the quality, utility and clarity of the information to be collected; and ways to
Comments regarding this information collection received by May 11, 2022 will be considered. Written comments and recommendations for the proposed information collection should be submitted within 30 days of the publication of this notice on the following website
An agency may not conduct or sponsor a collection of information unless the collection of information displays a currently valid OMB control number, and the agency informs potential persons who are to respond to the collection of information that such persons are not required to respond to the collection of information unless it displays a currently valid OMB control number.
The special needs request are submitted with the required information and cover letter from a requesting State to the Deputy Administrator of Plant Protection and Quarantine (PPQ). The required information includes: Survey. The results of a scientifically sound survey that shows that the pest of concern is not in the State or subdivision of the State, or that shows the distribution of the pest, Risk of entry. A pest risk assessment or scientific data that shows that the pest could enter the area, Harm, or injury. Information that shows that if the pest entered or spread in the State, it would harm agricultural or environmental resources. Quantitative estimates of the potential injury are preferred, Special basis. Evidence that the area has special or unique characteristics that make it more vulnerable to harm or injury, such as unique fauna or flora, special historical or cultural interest, etc., Requested restrictions; and Details about what specifically is requested, why it is necessary, why it will work and how it will help.
The administrator's determination would be based upon his or her review of the information submitted by the State or political subdivision in support of its request and would consider any comments received. If this information was not collected or collected less frequently, it would create vulnerabilities which would cripple APHIS' ability to prevent the introduction or spread of plant pests and diseases in the United States.
The Department of Agriculture has submitted the following information collection requirement(s) to OMB for review and clearance under the Paperwork Reduction Act of 1995, Public Law 104-13. Comments are requested regarding: Whether the collection of information is necessary for the proper performance of the functions of the agency, including whether the information will have practical utility; the accuracy of the agency's estimate of burden including the validity of the methodology and assumptions used; ways to enhance the quality, utility and clarity of the information to be collected; and ways to minimize the burden of the collection of information on those who are to respond, including through the use of appropriate automated, electronic, mechanical, or other technological collection techniques and other forms of information technology.
Comments regarding this information collection received by May 11, 2022 will be considered. Written comments and recommendations for the proposed information collection should be submitted within 30 days of the publication of this notice on the following website
An agency may not conduct or sponsor a collection of information unless the collection of information displays a currently valid OMB control number and the agency informs potential persons who are to respond to the collection of information that such persons are not required to respond to the collection of information unless it displays a currently valid OMB control number.
The equal opportunity laws require agencies to conduct compliance reviews to ensure that entities receiving Federal Financial Assistance from the government are adhering to the nondiscrimination statues. The statutes require that prior to awarding support or issuing permits, the Federal government shall conduct pre-award reviews to ensure that potential recipients understand their responsibilities to provide services equitable pursuant to the law. Thereafter, during the partnership with the agency, ongoing monitoring will take place to ensure the public is being served without any barriers or discrimination.
Collection will occur during face-to-face meetings or telephone interviews conducted by Forest Service employees as part of the pre-award and post award process. The pre-award interview will take place prior to the award of a grant, signing of a cooperative agreement, letting of commercial special use permit, or similar activity. The post award interview will take place once every 5 years, or upon report/discovery of discrimination.
The information collected will only be shared with other Federal agencies who share in the financial assistance activities with the Forest Service. Monitoring reviews have been a responsibility of the Federal government since 1964. Without the ability to monitor recipients of Federal financial assistance, the Forest Service would not be able to ensure compliance with laws and statutes. The Agency would not be aware of potential violations, thereby resulting in potential discriminatory practices.
Forest Service, Agriculture (USDA).
Notice of meeting.
The North Wisconsin Resource Advisory Committee (RAC) will hold a virtual meeting by phone and/or video conference. The committee is authorized under the Secure Rural Schools and Community Self-Determination Act (the Act) and operates in compliance with the Federal Advisory Committee Act. The purpose of the committee is to improve collaborative relationships and to provide advice and recommendations to the Forest Service concerning projects and funding consistent with Title II of the Act as well as to make recommendations on recreation fee proposals for sites on the Chequamegon-Nicolet National Forest within Ashland, Bayfield, Florence, Forest, Oconto, Price, Sawyer, and Taylor Counties, consistent with the Federal Lands Recreation Enhancement Act. RAC information and virtual meeting information can be found at the following website:
The meeting will be held on May 4, 2022, 9:00 a.m.-3:00 p.m., Central Daylight Time.
All RAC meetings are subject to cancellation. For status of the meeting prior to attendance, please contact the person listed under
The meeting is open to the public and will be held virtually via telephone and/or video conference. Virtual meeting participation details can be found on the website listed under
Written comments may be submitted as described under
Adam Felts, Designated Federal Officer (DFO), by phone at 715-362-1335 or email at
Individuals who use telecommunication devices for the deaf and hard of hearing (TDD) may call the Federal Relay Service (FRS) at 1-800-877-8339, 24 hours a day, every day of the year, including holidays.
The purpose of the meeting is to:
1. Hear from Title II project proponents and discuss Title II project proposals;
2. Make funding recommendations on Title II projects; and
3. Schedule additional meeting(s).
The meeting is open to the public. The agenda will include time for people to make oral statements of three minutes or less. Individuals wishing to make an oral statement should make a request in writing by April 15, 2022, to be scheduled on the agenda. Anyone who would like to bring related matters to the attention of the committee may file written statements with the committee staff before or after the meeting. Written comments and requests for time for oral comments must be sent to Penny McLaughlin, 500 Hanson Lake Road, Rhinelander, WI, 54501 or by email to
Equal opportunity practices, in line with USDA policies, will be followed in all membership appointments to the RAC. To help ensure that recommendations of the RAC have taken into account the needs of the diverse groups served by the Department, membership shall include, to the extent practicable, individuals with demonstrated ability to represent minorities, women, and persons with disabilities.
The USDA prohibits discrimination in all of its programs and activities on the basis of race, color, national origin, religion, sex, gender identity (including gender expression), sexual orientation, disability, age, marital status, family/parental status, political beliefs, income derived from a public assistance program, or reprisal or retaliation for prior civil rights activity in any program or activity conducted or funded by USDA (not all bases apply to all programs).
Forest Service, Agriculture (USDA).
Notice of meeting.
The Shasta County Resource Advisory Committee (RAC) will hold a virtual meeting by phone and/or video conference. The committee is authorized under the Secure Rural Schools and Community Self-Determination Act (the Act) and operates in compliance with the Federal Advisory Committee Act. The purpose of the committee is to improve collaborative relationships and to provide advice and recommendations to the Forest Service concerning projects and funding consistent with Title II of the Act as well as make recommendations on recreation fee proposals for sites on the Shasta-Trinity National Forest within Shasta County. RAC information can be found at the following website:
The meeting will be held on April 27, 2022, 9:00 a.m.-12:00 p.m., Pacific Daylight Time.
All RAC meetings are subject to cancellation. For status of the meeting prior to attendance, please contact the person listed under
The meeting is open to the public and will be held virtually via telephone and/or video conference. Virtual meeting participation details can be found on the website listed under
Written comments may be submitted as described under
Lejon Hamann, RAC Coordinator, by phone at 530-410-1935 or via email at
Individuals who use telecommunication devices for the deaf and hard of hearing (TDD) may call the Federal Relay Service (FRS) at 1-800-877-8339, 24 hours per day, every day of the year, including holidays.
The purpose of the meetings are to cover the following:
The meeting is open to the public. The agenda will include time for people to make oral statements of three minutes or less. Individuals wishing to make an oral statement should request in writing by the Friday before the meeting, to be scheduled on the agenda. Anyone who would like to bring related matters to the attention of the committee may file written statements with the committee staff before or after the meeting. Written comments and requests for time for oral comments must be sent to Lejon Hamann, RAC Coordinator, 3644 Avtech Parkway, Redding, California 96002 or by email to
Equal opportunity practices, in line with USDA policies, will be followed in all membership appointments to the RAC. To help ensure that recommendations of the RAC have taken into account the needs of the diverse groups served by the Department, membership shall include, to the extent practicable, individuals with demonstrated ability to represent minorities, women, and persons with disabilities.
The USDA prohibits discrimination in all of its programs and activities on the basis of race, color, national origin, religion, sex, gender identity (including gender expression), sexual orientation, disability, age, marital status, family/parental status, political beliefs, income derived from a public assistance program, or reprisal or retaliation for prior civil rights activity in any program or activity conducted or funded by USDA (not all bases apply to all programs).
Forest Service, (Agriculture), USDA.
Notice of meeting.
The Shasta County Resource Advisory Committee (RAC) will hold two virtual meetings by phone and/or video conference. The committee is authorized under the Secure Rural Schools and Community Self-Determination Act (the Act) and operates in compliance with the Federal Advisory Committee Act. The purpose of the committee is to improve collaborative relationships and to provide advice and recommendations to the Forest Service concerning projects and funding consistent with Title II of the Act as well as to make recommendations on recreation fee proposals for sites on the Shasta-Trinity National Forest within Shasta County. RAC information can be found at the following website:
The meetings will be held on:
• Wednesday, May 11, 2022, 9:00 a.m.-12:00p.m., Pacific Daylight Time; and
• Wednesday, May 25, 2022, 9:00 a.m.-12:00p.m., Pacific Daylight Time.
All RAC meetings are subject to cancellation. For status of the meetings prior to attendance, please contact the person listed under
The meetings are open to the public and will be held virtually via telephone and/or video conference.
Written comments may be submitted as described under
Lejon Hamann, RAC Coordinator, by phone at 530-410-1935 or via email at
Individuals who use telecommunication devices for the deaf and hard of hearing (TDD) may call the Federal Relay Service (FRS) at 1-800-877-8339, 24 hours per day, every day of the year, including holidays.
The purpose of the meetings are to review the following:
1. Comments from the Designated Federal Officer (DFO);
2. Approve minutes from last meeting;
3. Discuss, recommend, approve Title II projects;
4. Public comment period; and
5. Closing comments from the DFO.
The meetings are open to the public. The agenda will include time for people to make oral statements of three minutes or less. Individuals wishing to make an oral statement should request in writing by the Friday before the scheduled meeting(s) to be scheduled on the agenda for a particular meeting. Anyone who would like to bring related matters to the attention of the committee may file written statements with the committee staff before or after the meeting. Written comments and requests for time for oral comments must be sent to Lejon Hamann, RAC Coordinator, 3644 Avtech Parkway, Redding, California 96002 or by email to
Equal opportunity practices, in line with USDA policies, will be followed in all membership appointments to the RAC. To help ensure that recommendations of the RAC have taken into account the needs of the diverse groups served by the Department, membership shall include, to the extent practicable, individuals with demonstrated ability to represent minorities, women, and persons with disabilities.
The USDA prohibits discrimination in all of its programs and activities on the basis of race, color, national origin, religion, sex, gender identity (including gender expression), sexual orientation, disability, age, marital status, family/parental status, political beliefs, income derived from a public assistance program, or reprisal or retaliation for prior civil rights activity in any program or activity conducted or funded by USDA (not all bases apply to all programs).
Forest Service, Agriculture (USDA).
Notice of meeting.
The Fremont and Winema Resource Advisory Committee (RAC) will hold a virtual meeting by phone and/or video conference. The committee is authorized under the Secure Rural Schools and Community Self-Determination Act (the Act) and operates in compliance with the Federal Advisory Committee Act. The purpose of the committee is to improve collaborative relationships and to provide advice and recommendations to the Forest Service concerning projects and funding consistent with Title II of the Act as well as make recommendations on recreation fee proposals for sites on the Fremont—Winema National Forest within Klamath and Lake Counties, consistent with the Federal Lands Recreation Enhancement Act. RAC information and virtual meeting information can be found at the following website:
The meeting will be held on May 5, 2022, 9:00 a.m.-4:00 p.m., Pacific Daylight Time.
All RAC meetings are subject to cancellation. For status of the meeting prior to attendance, please contact the person listed under
The meeting is open to the public and will be held virtually via telephone and/or video conference. Virtual meeting participation details can be found on the website listed under
Written comments may be submitted as described under
Mike Ramsey, Designated Federal Officer (DFO), by phone at 541-219-2062 or email at
Individuals who use telecommunication devices for the deaf and hard of hearing (TDD) may call the Federal Relay Service (FRS) at 1-800-877-8339, 24 hours a day, every day of the year, including holidays.
The purpose of the meeting is to:
The meeting is open to the public. The agenda will include time for people to make oral statements of three minutes or less. Individuals wishing to make an oral statement should make a request in writing by May 4, 2022, to be scheduled on the agenda. Anyone who would like to bring related matters to the attention of the committee may file written statements with the committee staff before or after the meeting. Written comments and requests for time for oral comments must be sent to Avery Kool, Fremont-Winema National Forest, 303 OR-31, Paisley, OR 97636; or by email to
Equal opportunity practices, in line with USDA policies, will be followed in all membership appointments to the RAC. To help ensure that recommendations of the RAC have taken into account the needs of the diverse groups served by the Department, membership shall include, to the extent practicable, individuals with demonstrated ability to represent minorities, women, and persons with disabilities.
The USDA prohibits discrimination in all of its programs and activities on the basis of race, color, national origin, religion, sex, gender identity (including gender expression), sexual orientation, disability, age, marital status, family/parental status, political beliefs, income derived from a public assistance program, or reprisal or retaliation for prior civil rights activity in any program or activity conducted or funded by USDA (not all bases apply to all programs).
Forest Service, Agriculture (USDA).
Notice of meeting.
The Dixie Resource Advisory Committee (RAC) will hold a virtual meeting by phone and/or video conference. The committee is authorized under the Secure Rural Schools and Community Self-Determination Act (the Act) and operates in compliance with the Federal Advisory Committee Act. The purpose of the committee is to improve collaborative relationships and to provide advice and recommendations to the Forest Service concerning projects and funding consistent with Title II of the Act as well as to make recommendations on recreation fee proposals for sites on the Dixie National Forest within Garfield, Iron, Kane, and Washington Counties, consistent with the Federal Lands Recreation Enhancement Act. RAC information and virtual meeting information can be found at the following website:
The meeting will be held on May 26, 2022, 9:00 a.m.-12:00 p.m., Mountain Daylight Time.
All RAC meetings are subject to cancellation. For status of the meeting prior to attendance, please contact the person listed under
The meeting will be held virtually via telephone and/or video conference. Details on how members of the public can join the meeting can be found at the website link in the above
Written comments may be submitted as described under
Steven O'Neil, Designated Federal Officer (DFO), by phone at 435-865-3753 or email at
Individuals who use telecommunication devices for the deaf and hard of hearing (TDD) may call the Federal Relay Service (FRS) at 1-800-877-8339, 24 hours a day, every day of the year, including holidays.
The purpose of the meeting is to:
The meeting is open to the public. The agenda will include time for people to make oral statements of three minutes or less. Individuals wishing to make an oral statement should make a request in writing by May 10, 2022, to be scheduled on the agenda. Anyone who would like to bring related matters to the attention of the committee may file written statements with the committee staff before or after the meeting. Written comments and requests for time for oral comments must be sent to Steven O'Neil, Dixie National Forest, 820 N. Main, Cedar City UT 84721 or by email to
Equal opportunity practices, in line with USDA policies, will be followed in all membership appointments to the RAC. To help ensure that recommendations of the RAC have taken into account the needs of the diverse groups served by the Department, membership shall include, to the extent practicable, individuals with demonstrated ability to represent minorities, women, and persons with disabilities.
The USDA prohibits discrimination in all of its programs and activities on the basis of race, color, national origin, religion, sex, gender identity (including gender expression), sexual orientation, disability, age, marital status, family/parental status, political beliefs, income derived from a public assistance program, or reprisal or retaliation for prior civil rights activity in any program or activity conducted or funded by USDA (not all bases apply to all programs).
Forest Service, Agriculture (USDA).
Notice of meeting.
The North Wisconsin Resource Advisory Committee (RAC) will hold a virtual meeting by phone and/or video conference. The committee is authorized under the Secure Rural Schools and Community Self-Determination Act (the Act) and operates in compliance with the Federal Advisory Committee Act. The purpose of the committee is to improve collaborative relationships and to provide advice and recommendations to the Forest Service concerning projects and funding consistent with Title II of the Act as well as to make recommendations on recreation fee proposals for sites on the Chequamegon-Nicolet National Forest within Ashland, Bayfield, Florence, Forest, Oconto, Price, Sawyer, and Taylor Counties, consistent with the Federal Lands Recreation Enhancement Act. RAC information and virtual meeting information can be found at the
The meeting will be held on April 27, 2022, 9:00 a.m.-3:00 p.m., Central Daylight Time.
All RAC meetings are subject to cancellation. For status of the meeting prior to attendance, please contact the person listed under
The meeting is open to the public and will be held virtually via telephone and/or video conference. Virtual meeting participation details can be found on the website listed under
Written comments may be submitted as described under
Adam Felts, Designated Federal Officer (DFO), by phone at 715-362-1335 or email at
Individuals who use telecommunication devices for the deaf and hard of hearing (TDD) may call the Federal Relay Service (FRS) at 1-800-877-8339, 24 hours a day, every day of the year, including holidays.
The purpose of the meeting is to:
The meeting is open to the public. The agenda will include time for people to make oral statements of three minutes or less. Individuals wishing to make an oral statement should make a request in writing by April 15, 2022, to be scheduled on the agenda. Anyone who would like to bring related matters to the attention of the committee may file written statements with the committee staff before or after the meeting. Written comments and requests for time for oral comments must be sent to Penny McLaughlin, 500 Hanson Lake Road, Rhinelander, WI, 54501 or by email to
Equal opportunity practices, in line with USDA policies, will be followed in all membership appointments to the RAC. To help ensure that recommendations of the RAC have taken into account the needs of the diverse groups served by the Department, membership shall include, to the extent practicable, individuals with demonstrated ability to represent minorities, women, and persons with disabilities.
The USDA prohibits discrimination in all of its programs and activities on the basis of race, color, national origin, religion, sex, gender identity (including gender expression), sexual orientation, disability, age, marital status, family/parental status, political beliefs, income derived from a public assistance program, or reprisal or retaliation for prior civil rights activity in any program or activity conducted or funded by USDA (not all bases apply to all programs).
Architectural and Transportation Barriers Compliance Board.
Notice of public meeting.
The Architectural and Transportation Barriers Compliance Board (Access Board or Board) is hosting a virtual public meeting to obtain further information on the appropriate low-height specification for transfer surfaces for medical diagnostic equipment.
The public meeting will take place May 12, 2022, 2:00 to 4:00 p.m. Eastern Time.
The virtual meeting will be open to the public and held via the Zoom Webinar Platform (
To register to attend this virtual meeting, visit:
Section 510 of the Rehabilitation Act charges the Access Board with developing and maintaining accessibility standards for medical equipment used by health care providers for diagnostic purposes, including examination tables and chairs, weight scales, and imaging equipment. 29 U.S.C. 794f. In January 2017, the Board issued a final rule establishing accessibility standards for medical diagnostic equipment (MDE Standards). 82 FR 2810 (codified at 36 CFR part 1195). The MDE Standards set forth minimum technical criteria to ensure that medical diagnostic equipment in physician's offices, clinics, emergency rooms, hospitals, and other medical settings is independently accessible to, and usable by, individuals with disabilities.
The MDE Standards address the height and adjustability of MDE equipment that patients who use wheelchairs must transfer onto, including examination tables and chairs, procedure tables, and imaging equipment with tables. It is important that the height of these transfer surfaces align with a patient's wheelchair seat height to facilitate a safe transfer between diagnostic equipment and mobility devices. Transfer surfaces that align with the seat heights of mobility devices reduce the effort needed by patients to transfer since they do not have to lift their body weight to make up the difference between the two surfaces.
In the Notice of Proposed Rulemaking for the MDE Standards, the Board sought public comment on whether the
Findings from this project indicated that the occupied seat heights for people who use wheeled mobility devices vary considerably. Seat heights ranged from 16.3 inches to 23.9 inches for manual wheelchair users, 16.2 inches to 28.9 inches for power wheelchair users, and 18.8 inches to 25.3 inches for scooter users. Based on this data, researchers concluded that a transfer surface that is adjustable from a height of 17 inches minimum to 25 inches maximum would accommodate the 5th to the 95th percentile range of those who used wheeled mobility aids (
In an analysis of the data on seat height, researchers further determined that a low transfer height of 17 inches would exclude 6% of manual wheelchairs in the project database. According to this analysis, “[i]ncreasing the minimum above 17 in. even two inches . . . would exclude a significant proportion of the manual wheelchair group, in particular, over 30% of the females in the sample.” D'Souza, C., Steinfeld, E., “Analysis of Seat Height for Wheeled Mobility Devices” (July 19, 2011),
In the Notice for Proposed Rulemaking, the Board sought comment on the height and adjustability of transfer surfaces and whether transfer surface heights should be adjustable from a low transfer position of 17 inches to a high transfer position of 25 inches. 77 FR at 6922-6933. Most commenters supported a requirement for adjustability and a high transfer surface height of 25 inches but disagreed on what the low transfer height should be.
On July 5, 2012, the Access Board organized an advisory committee representing stakeholders to provide recommendations on how the MDE Standards should be finalized based on the public comments received. 77 FR 39656. The MDE Accessibility Standards Advisory Committee, like the public commenters, was divided on the low transfer surface height and was unable to reach consensus regarding a minimum low transfer surface height specification. MDE Accessibility Standards Advisory Committee Report, 70,
Minority reports submitted by the disability advocates and academics supported a minimum low height of 17 inches to ensure as many independent transfers as possible. They noted that a 17-inch low height provides the greatest number of individuals the opportunity to transfer independently.
The minority reports submitted by manufacturers supported a minimum low height of 19 inches. They asserted that examination tables and chairs that can meet the 19-inch height are available but that there were no products on the market that met the 17-inch height.
On January 9, 2017, the Access Board issued the MDE final rule, in which the Board specified that transfer surfaces be adjustable from a low transfer position at a height of 17-19 inches to a high transfer position at a height of 25 inches. It also required that the transfer surface be adjustable to four unspecified heights between the high and low transfer height separated by a minimum of one inch. 36 CFR part 1195, Appendix, M301.2.1 & M302.2.2. The 17-19 inch low transfer height was set as a temporary range with a five-year sunset provision.
During the five-year sunset period, the Board said it would further study this issue and collect additional information.
In 2021, the Board commissioned a secondary analysis of the Anthropometry of Wheeled Mobility database and wheelchair seat height. This analysis was undertaken because some segments of the population in the Anthropometry of Wheeled Mobility Project test sample were over- or under-represented. Specifically, the test population was younger in age and included more men than women compared to the estimated U.S. population. In addition, the researchers intentionally oversampled powered wheelchair users, which tend to have seat heights higher than manual wheelchairs, in order to capture the sizes and space requirements of this group. (“Anthropometry of Wheeled Mobility: Final Report,” Section 3.1, pp. 36-37).
In this 2021 study, researchers statistically resampled data on occupied seat heights for manual and powered wheelchair users to create virtual samples that were proportionally representative of the total population of wheelchair users in the United States in terms of device type (manual wheelchairs or powered wheelchairs), gender, and age category (18 to 64 years or 65 years and older). Based on demographically representative sampling, the study estimates that 4.5% of wheelchair users have a seat height equal to or less than 17 inches, 21% had a seat height equal to or less than 18 inches, and 42% had a seat height equal to or less than 19 inches. (D'Souza, C.,
In light of these latest findings from the resampling analysis, the Access Board has decided to hold a public hearing to gather additional information on the low transfer height for MDE transfer surfaces from disability advocates, manufacturers of MDE, researchers and other stakeholders and interested parties. The Board is particularly interested in information on what the low height is for adjustable MDE products that are currently on the market and any changes or innovations in their design and engineering that may have occurred since the Board issued the MDE standards in 2017. The Board is aware of at least some examination tables and chairs that can adjust to a height of 17 inches or less. The Board is also interested in updated information on the incremental costs for the design or redesign and manufacture of examination tables and chairs and diagnostic imaging medical equipment with tables that can provide a low transfer height of 17 inches.
U.S. Commission on Civil Rights.
Announcement of virtual business meeting.
Notice is hereby given, pursuant to the provisions of the rules and regulations of the U.S. Commission on Civil Rights (Commission) and the Federal Advisory Committee Act, that the Wyoming Advisory Committee (Committee) to the U.S. Commission on Civil Rights will hold a virtual business meeting via Webex at 1 p.m. MT on Monday, May 9, 2022, to discuss civil rights concerns in the state.
The meeting will take place on Monday, May 9, 2022, from 1 p.m.-2:30 p.m. MT.
Kayla Fajota, DFO, at
Committee meetings are available to the public through the conference link above. Any interested member of the public may listen to the meeting. An open comment period will be provided to allow members of the public to make a statement as time allows. If joining via phone, callers can expect to incur regular charges for calls they initiate over wireless lines, according to their wireless plan. The Commission will not refund any incurred charges. Individuals who are deaf, deafblind, and hard of hearing may also follow the proceedings by first calling the Federal Relay Service at (800) 877-8339 and providing the Service with the conference details found through registering at the web link above. To request additional accommodations, please email
Members of the public are also entitled to submit written comments; the comments must be received in the regional office within 30 days following the meeting. Written comments may be emailed to Liliana Schiller at
Records generated from this meeting may be inspected and reproduced at the Regional Programs Coordination Unit Office, as they become available, both before and after the meeting. Records of the meeting will be available via
U.S. Commission on Civil Rights.
Announcement of meeting.
Notice is hereby given, pursuant to the provisions of the rules and regulations of the U.S. Commission on Civil Rights (Commission) and the Federal Advisory Committee Act that the West Virginia Advisory Committee (Committee) to the U.S. Commission on Civil Rights will hold project planning meetings at the times identified in the
Tuesday, May 3, at 11:30 a.m. ET; Tuesday, June 7, at 11:30 a.m. ET; Tuesday, July 5, at 11:30 a.m. ET; Tuesday, August 2, at 11:30 a.m. ET; and Tuesday, September 6, at 11:30 a.m. ET
Ivy Davis, DFO, and Director of the Eastern Regional Office (ERO, at
Members of the public can listen to these discussions. Committee meetings are available to the public through the above call-in number. Any interested member of the public may call this number and listen to the meeting. An open comment period will be provided to allow members of the public to make a statement as time allows. Callers can expect to incur regular charges for calls they initiate over wireless lines, according to their wireless plan. The Commission will not refund any incurred charges. Callers will incur no charge for calls they initiate over land-line connections to the toll-free telephone number. Individuals who are deaf, deafblind and hard of hearing may follow the proceedings by first calling the Federal Relay Service at 1-800-877-8339 and providing the Service with the conference call number and conference ID number.
Members of the public are also entitled to submit written comments via
Records generated from this meeting may be inspected and reproduced at the Eastern Regional Programs, as they become available, both before and after the meeting. Records of the meeting will be available via
An application has been submitted to the Foreign-Trade Zones (FTZ) Board by the Port of Houston Authority, grantee of FTZ 84, requesting subzone status for the facility of Coreworks Heat Exchangers, LLC (Coreworks), located in Waller (Waller County), Texas. The application was submitted pursuant to the provisions of the Foreign-Trade Zones Act, as amended (19 U.S.C. 81a-81u), and the regulations of the FTZ Board (15 CFR part 400). It was formally docketed on April 5, 2022.
The proposed subzone (10.82 acres) is located at 1300 Alegacy Place in Waller (Waller County), Texas. At the proposed subzone, Coreworks would be able to conduct the production activity already authorized for the company for its existing facility in Katy, Texas. No additional authorization for production activity has been requested at this time. The proposed subzone would be subject to the existing activation limit of FTZ 84.
In accordance with the FTZ Board's regulations, Camille Evans of the FTZ Staff is designated examiner to review the application and make recommendations to the Executive Secretary.
Public comment is invited from interested parties. Submissions shall be addressed to the FTZ Board's Executive Secretary and sent to:
A copy of the application will be available for public inspection in the “Online FTZ Information Section” section of the FTZ Board's website, which is accessible via
For further information, contact Camille Evans at
Enforcement and Compliance, International Trade Administration, Department of Commerce.
As a result of the determinations by the Department of Commerce (Commerce) and the U.S. International Trade Commission (ITC) that revocation of the countervailing duty (CVD) orders on polyethylene terephthalate (PET) resin from the People's Republic of China (China) and India would likely lead to continuation or recurrence of net countervailable subsidies and material injury to an industry in the United States, Commerce is publishing this notice of continuation of the CVD orders.
Applicable April 11, 2022.
Emily Bradshaw or Yang Jin Chun, AD/CVD Operations, Office IV, Enforcement and Compliance, International Trade Administration, U.S. Department of Commerce, 1401 Constitution Avenue NW, Washington, DC 20230; telephone: (202) 482-3896 or (202) 482-5760, respectively.
On May 6, 2016, Commerce published in the
As a result of its reviews, Commerce determined, pursuant to sections 751(c)(1) and 752(c) of the Act, that revocation of the
The merchandise covered by these
As a result of the determinations by Commerce and the ITC that revocation of the
These five-year (sunset) reviews and this notice are in accordance with sections 751(c) and 751(d)(2) of the Act and published pursuant to section 777(i)(1) of the Act and 19 CFR 351.218(f)(4).
Enforcement and Compliance, International Trade Administration, Department of Commerce.
The Department of Commerce (Commerce) continues to determine that the sole respondent under review, Hui Zhou Tian Mei Investment Co., Ltd. (aka Hui Zhou Tian Mei Furniture Co., Ltd.) (Tian Mei), is not eligible for a separate rate and is therefore a part of the China-wide entity. The period of review (POR) is January 1, 2020 through December 31, 2020.
Applicable April 11, 2022.
Krisha Hill, AD/CVD Operations, Office IV, Enforcement and Compliance, International Trade Administration, U.S. Department of Commerce, 1401 Constitution Avenue NW, Washington, DC 20230; telephone: (202) 482-4037.
On October 7, 2021, Commerce published in the
The product covered by the
Commerce conducted this review in accordance with section 751(a)(1)(B) of the Tariff Act of 1930, as amended (the Act). For a discussion of the comment received,
Consistent with the
Pursuant to section 751(a)(2)(C) of the Act and 19 CFR 351.212(b), Commerce has determined, and U.S. Customs and Border Protection (CBP) shall assess, antidumping duties on all appropriate entries of subject merchandise in accordance with the final results of this
The following cash deposit requirements will be effective upon publication of this notice in the
This notice serves as a final reminder to importers of their responsibility under 19 CFR 351.402(f)(2) to file a certificate regarding the reimbursement of antidumping duties/and or countervailing duties prior to liquidation of the relevant entries during the POR. Failure to comply with this requirement could result in Commerce's presumption that reimbursement of antidumping duties occurred and the subsequent assessment of double antidumping duties.
This notice also serves as a final reminder to parties subject to an administrative protective order (APO) of their responsibility concerning the return or destruction of proprietary information disclosed under the APO in accordance with 19 CFR 351.305(a)(3), which continues to govern business proprietary information in this segment of the proceeding. Timely written notification of the return/destruction of APO materials or conversion to judicial protective order is hereby requested. Failure to comply with the regulations and terms of an APO is a violation which is subject to sanction.
We are issuing and publishing these final results of administrative review in accordance with sections 751(a)(1) and 777(i)(1) of the Act and 19 CFR 351.221(b)(5) and 19 CFR 351.213(h)(1).
Enforcement and Compliance, International Trade Administration, Department of Commerce.
The Department of Commerce (Commerce) finds that certain oil country tubular goods (OCTG) from the Socialist Republic of Vietnam (Vietnam) were sold in the United States at less than normal value for the period of review (POR) September 1, 2019, through August 31, 2020.
Applicable April 11, 2022.
Fred Baker, AD/CVD Operations, Office VI, Enforcement and Compliance, International Trade Administration, U.S. Department of Commerce, 1401 Constitution Avenue NW, Washington, DC 20230; telephone: (202) 482-2924.
On January 28, 2021, Commerce published the
For a complete description of the events that followed the
The merchandise covered by the
Commerce addressed all issues raised in the case and rebuttal briefs in the Issues and Decision Memorandum. A list of the issues that parties raised and to which we responded in the Issues and Decision Memorandum is attached to this notice as the appendix. The Issues and Decision Memorandum is a public document and is on file electronically via Enforcement and Compliance's Antidumping and Countervailing Duty Centralized Electronic Service System (ACCESS). ACCESS is available to registered users at
Based on our review of the record and comments received from interested parties regarding the
No parties commented on our preliminary separate rate findings. Therefore, we have continued to grant SSV separate rate status.
Commerce determines that the following weighted-average dumping margin exists for the period September 1, 2019, through August 31, 2020:
Commerce intends to disclose the calculations performed for these final results of review within five days of the date of publication of this notice in the
Pursuant to section 751(a)(2)(C) of the Act and 19 CFR 351.212(b)(1), Commerce has determined, and U.S. Customs and Border Protection (CBP) shall assess, antidumping duties on all appropriate entries of subject merchandise in accordance with the final results of this review.
Consistent with its recent notice,
Where the respondent's weighted-average dumping margin is zero or
For the individually-examined respondent whose weighted-average dumping margin is above
Additionally, if Commerce determines that an exporter under review had no shipments of subject merchandise, any suspended entries that entered under the exporter's case number (
The following cash deposit requirements will be effective upon publication of the final results of this administrative review for all shipments of the subject merchandise from Vietnam entered, or withdrawn from warehouse, for consumption on or after the publication date, as provided for by section 751(a)(2)(C) of the Act: (1) For SeAH VINA, a cash deposit rate of 1.49 percent; (2) for previously investigated or reviewed Vietnamese and non-Vietnamese exporters not listed above that received a separate rate in a prior segment of this proceeding, the cash deposit rate will continue to be the exporter-specific rate published for the most-recently completed segment of this proceeding in which the exporter was reviewed; (3) for all Vietnamese exporters of subject merchandise which have not been found to be entitled to a separate rate, the cash deposit rate will be the rate established for the Vietnam-wide entity, which is 111.47 percent;
This notice serves as a final reminder to importers of their responsibility under 19 CFR 351.402(f)(2) to file a certificate regarding the reimbursement of antidumping duties prior to liquidation of the relevant entries during the review period. Failure to comply with this requirement could result in Commerce's presumption that reimbursement of antidumping duties occurred and the subsequent assessment of doubled antidumping duties.
This notice also serves as the only reminder to parties subject to administrative protective order (APO) of their responsibility concerning the disposition of proprietary information disclosed under APO in accordance with 19 CFR 351.305(a)(3), which continues to govern business proprietary information in this segment of the proceeding. Timely written notification of the return or destruction of APO materials, or conversion to judicial protective order, is hereby requested. Failure to comply with the regulations and the terms of an APO is a sanctionable violation.
We are issuing and publishing this notice in accordance with sections 751(a)(1) and 777(i)(1) of the Act, 19 CFR 351.213, and 19 CFR 351.221(b)(5).
Enforcement and Compliance, International Trade Administration, Department of Commerce.
Notice; correction.
On February 7, 2022, the Department of Commerce (Commerce) published a notice in the
Faris Montgomery, AD/CVD Operations, Office VIII, Enforcement and Compliance, International Trade Administration, U.S. Department of Commerce, 1401 Constitution Avenue NW, Washington, DC 20230; telephone: (202) 482-1537.
In the
On February 7, 2022, Commerce inadvertently published an incorrect rate in the final results of the 2019 administrative review of the CVD order on CTL plate from Korea.
This notice is issued and published in accordance with sections 751(a)(1) and 777(i) of the Tariff Act of 1930, as amended, and 19 CFR 351.221(b)(5).
International Trade Administration, Department of Commerce.
Notice of an open meeting.
The United States Travel and Tourism Advisory Board (Board or TTAB) will hold a meeting on Monday, April 25, 2022. The Board advises the Secretary of Commerce on matters relating to the U.S. travel and tourism industry. The purpose of the meeting is for Board members to discuss the current state of the travel and tourism industry in the United States and priority issues for the industry, and for the Secretary of Commerce to charge the Board with developing recommendations in key areas. The final agenda will be posted on the Department of Commerce website for the Board at
Monday, April 25, 2022, 4:00 p.m.-5:30 p.m. EDT. The deadline for members of the public to register for the meeting or to submit written comments for dissemination prior to the meeting is 5:00 p.m. EDT on Wednesday, April 20, 2022.
The meeting will be held virtually. The access information will be provided by email to registrants. Requests to register (including to speak or for auxiliary aids) and any written comments should be submitted by email to
Jennifer Aguinaga, the United States Travel and Tourism Advisory Board, National Travel and Tourism Office, U.S. Department of Commerce; telephone: 202-482-2404; email:
In addition, any member of the public may submit pertinent written comments concerning the Board's affairs at any time before or after the meeting. Comments may be submitted to Jennifer Aguinaga at the contact information indicated above. EDT on Wednesday, April 20, 2022, to ensure transmission to the Board prior to the meeting. Comments received after that date and time will be transmitted to the Board but may not be considered during the meeting. Copies of Board meeting minutes will be available within 90 days of the meeting.
This Notice is published pursuant to the Federal Advisory Committee Act, as amended (FACA), 5 U.S.C., app., 9(c). It has been determined that the Committee is necessary and in the public interest. The Committee was established pursuant to Commerce's authority under 15 U.S.C. 1512, established under the FACA, as amended, 5 U.S.C. app., and with the concurrence of the General Services Administration.
National Marine Fisheries Service (NMFS), National Oceanic and Atmospheric Administration (NOAA), Commerce.
Notice; public meetings and request for comments.
The Mid-Atlantic Fishery Management Council (Council) will hold five public hearings (including one webinar) and accept written comments regarding an action intended to rebuild the Atlantic mackerel stock.
The hearings will be held between April 25, 2022 and May 2, 2022. Written comments must be received by May 9, 2022. See
See
Written comments may be submitted to:
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Christopher M. Moore, Ph.D., Executive Director, Mid-Atlantic Fishery Management Council, telephone: (302) 526-5255.
The Council will hold five public hearings and accept written comments regarding an action intended to rebuild the Atlantic mackerel stock. Potential management measures include commercial quotas, recreational bag limits, a 3-inch commercial minimum mesh requirement, and permitting clarifications. The action would also continue to set a river herring and shad catch cap for the mackerel fishery. A public hearing document with additional details can be found at
Written comments are accepted at the hearings or via the submission methods described above, by May 9, 2022.
These meetings are physically accessible to people with disabilities. Requests for sign language interpretation or other auxiliary aid should be directed to Shelley Spedden, (302) 526-5251, at least 5 days prior to the meeting date.
National Marine Fisheries Service (NMFS), National Oceanic and Atmospheric Administration (NOAA), Commerce.
Notice; request for comments on proposed Renewal incidental harassment authorization (IHA).
NMFS received a request from Ocean Wind LLC (Ocean Wind) for the Renewal of their currently active incidental harassment authorization (IHA) to take marine mammals incidental to marine site characterization survey activities off the coast of New Jersey in the areas of the Bureau of Ocean Energy Management (BOEM) Commercial Lease of Submerged Lands for Renewable Energy Development on the Outer Continental Shelf (OCS)-A 0498 (Lease Area) and federal and state waters along potential export cable routes (ECRs) to landfall locations between Raritan Bay (part of the New York Bight) and Delaware Bay. These activities are identical to those covered in the current authorization, which expires on May 9, 2022. Pursuant to the Marine Mammal Protection Act, prior to issuing the currently active IHA, NMFS requested comments on both the proposed IHA and the potential for renewing the initial authorization if certain requirements were satisfied. The Renewal requirements have been satisfied, and NMFS is now providing an additional 15-day comment period to allow for any additional comments on the proposed Renewal not previously provided during the initial 30-day comment period.
Comments and information must be received no later than April 26, 2022.
Comments should be addressed to Jolie Harrison, Chief, Permits and Conservation Division, Office of Protected Resources, National Marine Fisheries Service and should be submitted via email to
Jenna Harlacher, Office of Protected Resources, NMFS, (301) 427-8401. Electronic copies of the original application, Renewal request, and supporting documents (including NMFS
The Marine Mammal Protection Act (MMPA) prohibits the “take” of marine mammals, with certain exceptions. Sections 101(a)(5)(A) and (D) of the MMPA (16 U.S.C. 1361
Authorization for incidental takings shall be granted if NMFS finds that the taking will have a negligible impact on the species or stock(s) and will not have an unmitigable adverse impact on the availability of the species or stock(s) for taking for subsistence uses (where relevant). Further, NMFS must prescribe the permissible methods of taking and other “means of effecting the least practicable adverse impact” on the affected species or stocks and their habitat, paying particular attention to rookeries, mating grounds, and areas of similar significance, and on the availability of such species or stocks for taking for certain subsistence uses (referred to here as “mitigation measures”). Monitoring and reporting of such takings are also required. The meaning of key terms such as “take,” “harassment,” and “negligible impact” can be found in section 3 of the MMPA (16 U.S.C. 1362) and the agency's regulations at 50 CFR 216.103.
NMFS' regulations implementing the MMPA at 50 CFR 216.107(e) indicate that IHAs may be renewed for additional periods of time not to exceed one year for each reauthorization. In the notice of proposed IHA for the initial authorization (86 FR 17783; April 06, 2021), NMFS described the circumstances under which we would consider issuing a Renewal for this activity, and requested public comment on a potential Renewal under those circumstances. Specifically, on a case-by-case basis, NMFS may issue a one-time one-year Renewal IHA following notice to the public providing an additional 15 days for public comments when (1) up to another year of identical, or nearly identical, activities as described in the Detailed Description of Specified Activities section of the initial IHA issuance notice is planned or (2) the activities as described in the Description of the Specified Activities and Anticipated Impacts section of this notice would not be completed by the time the initial IHA expires and a Renewal would allow for completion of the activities beyond that described in the
1. A request for renewal is received no later than 60 days prior to the needed Renewal IHA effective date (recognizing that the Renewal IHA expiration date cannot extend beyond one year from expiration of the initial IHA).
2. The request for renewal must include the following:
• An explanation that the activities to be conducted under the requested Renewal IHA are identical to the activities analyzed under the initial IHA, are a subset of the activities, or include changes so minor (
• A preliminary monitoring report showing the results of the required monitoring to date and an explanation showing that the monitoring results do not indicate impacts of a scale or nature not previously analyzed or authorized.
3. Upon review of the request for Renewal, the status of the affected species or stocks, and any other pertinent information, NMFS determines that there are no more than minor changes in the activities, the mitigation and monitoring measures will remain the same and appropriate, and the findings in the initial IHA remain valid.
An additional public comment period of 15 days (for a total of 45 days), with direct notice by email, phone, or postal service to commenters on the initial IHA, is provided to allow for any additional comments on the proposed Renewal. A description of the Renewal process may be found on our website at:
To comply with the National Environmental Policy Act of 1969 (NEPA; 42 U.S.C. 4321
This action is consistent with categories of activities identified in Categorical Exclusion B4 (IHAs with no anticipated serious injury or mortality) of the Companion Manual for NOAA Administrative Order 216-6A, which do not individually or cumulatively have the potential for significant impacts on the quality of the human environment and for which we have not identified any extraordinary circumstances that would preclude this categorical exclusion. Accordingly, NMFS has preliminarily determined that the issuance of the proposed IHA Renewal qualifies to be categorically excluded from further NEPA review.
We will review all comments submitted in response to this notice prior to concluding our NEPA process or making a final decision on the IHA Renewal request.
On May 10, 2021, NMFS issued an IHA to Ocean Wind to take marine mammals incidental to marine site characterization survey activities off the coast of New Jersey in the areas of the Commercial Lease of Submerged Lands for Renewable Energy Development on the Outer Continental Shelf (OCS-A 0498) and along potential submarine cable routes to landfall locations in New Jersey (86 FR 6465), effective from May 10, 2021 through May 09, 2022. On February 18, 2022, NMFS received an application for the Renewal of that initial IHA. As described in the application for Renewal IHA, the activities for which incidental take is requested are identical to those covered in the initial authorization. As required, the applicant also provided a preliminary monitoring report (available at
Ocean Wind proposes to conduct a second year of high-resolution geophysical (HRG) marine site characterization surveys in the Lease Area and along potential ECRs to landfall locations in New Jersey, between Raritan Bay (part of the New York Bight) and Delaware Bay. The location, timing, and nature of the activities, including the types of equipment planned for use, are identical to those described in the original IHA. The purpose of the marine site characterization surveys are to obtain an assessment of seabed (geophysical, geotechnical, and geohazard), ecological, and archeological conditions within the footprint of a planned offshore wind facility development. Surveys are also conducted to support engineering design and to map unexploded ordnance. Underwater sound resulting from Ocean Wind's site characterization survey activities, specifically HRG surveys, has the potential to result in incidental take of marine mammals in the form of Level B harassment.
In their 2020 IHA application, Ocean Wind estimated it would conduct surveys at a rate of 70 kilometers (km) per survey day. Ocean Wind defined a survey day as a 24-hour activity day. Based on the planned 24-hours operations, the number of estimated survey days varies between the Lease Area and ECR area, with 142 vessel survey days expected in the Lease Area and 133 vessel survey days in the ECR area, with a total of 275 survey days. A maximum of 2 vessels would operate concurrently in areas where 24-hr operations would be conducted, with an additional third vessel potentially conducting daylight-only survey effort in shallow-water areas. The Renewal IHA would authorize harassment of marine mammals for a second year of identical survey activities to be completed in one year, in the same area, using survey methods identical to those described in the initial IHA application; therefore, the anticipated impacts on marine mammals and the affected stocks also remain the same.
Accordingly, the amount of take requested for the Renewal IHA is also identical to that authorized in the initial IHA. All active acoustic sources and mitigation and monitoring measures would remain exactly as described in the
The following documents are referenced in this notice and include important supporting information:
• Initial final IHA (86 FR 26465; May 14, 2021);
• Initial proposed IHA (86 FR 17783; April 06, 2021); and
• 2021 IHA application, references cited, and previous public comments received (available at
A detailed description of the marine site characterization survey activities for which incidental take is proposed here may be found in the
A description of the marine mammals in the area of the activities for which authorization of take is proposed here, including information on abundance, status, distribution, and hearing, may be found in the
The draft 2021 Stock Assessment Reports (SARs, available online at:
Roberts
NMFS has preliminarily determined that neither this nor any other new information affects which species or stocks have the potential to be affected or the pertinent information contained in the supporting documents for the initial IHA.
A description of the potential effects of the specified activity on marine mammals and their habitat for the activities for which the authorization of take is proposed here may be found in the
A detailed description of the methods and inputs used to estimate take for the specified activity are found in the notices of the proposed (86 FR 17783; April 06, 2021) and final (86 FR 26465; May 14, 2021) initial IHAs. The acoustic source types, as well as source levels applicable to this renewal authorization, methods of take, and methodology of estimating take remain unchanged from the initial IHA. Accordingly, the stocks taken, type of take (
The proposed mitigation, monitoring, and reporting measures included as requirements in this authorization are identical to those included in the
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As noted previously, NMFS published a notice of a proposed IHA (86 FR 17783; April 06, 2021) and solicited public comments on both our proposal to issue the initial IHA for marine site characterization surveys and on the potential for a Renewal IHA, should certain requirements be met.
During the 30-day comment period, NMFS did not receive any substantive public comments on the proposed IHA (86 FR 17783; April 06, 2021). However, NMFS was later notified that a group of environmental non-governmental organizations (ENGOs) had submitted a comment letter during the comment period for the proposed initial IHA. NMFS did not receive that letter prior to issuance of the initial IHA due to an email quarantine issue. Below, we describe how we have addressed, with updated information where appropriate, any comments contained in that letter that specifically pertain to the Renewal of the 2021 IHA.
While there are additional documents submitted with a Renewal request, for a qualifying Renewal these are limited to documentation that NMFS will make available and use to verify that the activities are identical to those in the initial IHA, are nearly identical such that the changes would have either no effect on impacts to marine mammals or decrease those impacts, or are a subset of activities already analyzed and authorized but not completed under the initial IHA. NMFS will also confirm, among other things, that the activities will occur in the same location; involve the same species and stocks; provide for continuation of the same mitigation, monitoring, and reporting requirements; and that no new information has been received that would alter the prior analysis. The renewal request also contains a preliminary monitoring report, but that is to verify that effects from the activities do not indicate impacts of a scale or nature not previously analyzed. The additional 15-day public comment period provides the public an opportunity to review these few documents, provide any additional pertinent information and comment on whether they think the criteria for a renewal have been met. NMFS also will provide direct notice of the proposed Renewal to those who commented on the initial IHA, to provide an opportunity to submit any additional comments. Between the initial 30-day comment period on these same activities and the additional 15 days, the total comment period for a renewal is 45 days.
In addition to the IHA Renewal process being consistent with all requirements under section 101(a)(5)(D), it is also consistent with Congress's intent for issuance of IHAs to the extent reflected in statements in the legislative history of the MMPA. Through the provision for Renewals in the regulations, description of the process and express invitation to comment on specific potential Renewals in the Request for Public Comments section of each proposed IHA, the description of the process on NMFS' website, further elaboration on the process through responses to comments such as these, posting of substantive documents on the agency's website, and provision of 30 or 45 days for public review and comment on all proposed initial IHAs and Renewals respectively, NMFS has ensured that the public “is invited and encouraged to participate fully in the agency decision-making process.”
For more information, NMFS has published a description of the Renewal process on our website (available at
The survey activities proposed by Ocean Wind are identical to those analyzed in the initial IHA, including the planned number of days and general
NMFS has preliminarily concluded that there is no new information suggesting that our analysis or findings should change from those reached for the initial IHA. Based on the information and analysis contained here and in the referenced documents, NMFS has preliminarily determined the following: (1) The proposed mitigation measures will affect the least practicable impact on marine mammal species or stocks and their habitat; (2) the proposed authorized takes will have a negligible impact on the affected marine mammal species or stocks; (3) the proposed authorized takes represent small numbers of marine mammals relative to the affected stock abundances; (4) Ocean Wind activities would not have an unmitigable adverse impact on taking for subsistence purposes as no relevant subsistence uses of marine mammals are implicated by this action, and; (5) appropriate monitoring and reporting requirements are proposed for inclusion.
Section 7(a)(2) of the Endangered Species Act of 1973 (16 U.S.C. 1531
The NMFS Office of Protected Resources is proposing to authorize the incidental take of four species of marine mammals that are listed under the ESA: The North Atlantic right, fin, sei and sperm whales. We requested initiation of consultation under Section 7 of the ESA with NMFS GARFO on February 04, 2021, for the issuance of the initial IHA. NMFS GARFO determined that issuance of the IHA to Ocean Wind is not likely to adversely affect the North Atlantic right, fin, sei, and sperm whale or the critical habitat of any ESA-listed species or result in the take of any marine mammals in violation of the ESA, and at this time considered the potential for a renewal. The proposed Renewal IHA provides no new information about the effects of the action, nor does it change the extent of effects of the action, or any other basis to require re-initiation of the Opinion; therefore, the incidental take statement issued for the initial IHA remains valid.
As a result of these preliminary determinations, NMFS proposes to issue a Renewal IHA to Ocean Wind for conducting marine site characterization surveys offshore of New Jersey and along potential submarine cable routes to a landfall location in New Jersey, provided the previously described mitigation, monitoring, and reporting requirements are incorporated. A draft of the proposed and final initial IHA can be found at
National Marine Fisheries Service (NMFS), National Oceanic and Atmospheric Administration (NOAA), Commerce.
Notice of SEDAR 74 Data Workshop for Gulf of Mexico Red Snapper.
The SEDAR 74 assessment process of Gulf of Mexico red snapper will consist of a Data Workshop, and a series of assessment webinars, and a Review Workshop. See
The SEDAR 74 Data Workshop will be held from 1 p.m. on May 2, 2022, until 1 p.m. on May 6, 2022. The established times may be adjusted as necessary to accommodate the timely completion of discussion relevant to the assessment process. Such adjustments may result in the meeting being extended from or completed prior to the time established by this notice.
Julie A. Neer, SEDAR Coordinator; (843) 571-4366; email:
The Gulf of Mexico, South Atlantic, and Caribbean Fishery Management Councils, in conjunction with NOAA Fisheries and the Atlantic and Gulf States Marine Fisheries Commissions have implemented the Southeast Data, Assessment and Review (SEDAR) process, a multi-step method for determining the status of fish stocks in the Southeast Region. SEDAR is a multi-step process including: (1) Data/Assessment Workshop, and (2) a series of webinars. The product of the Data/Assessment Workshop is a report which compiles and evaluates potential datasets and recommends which datasets are appropriate for assessment analyses, and describes the fisheries, evaluates the status of the stock, estimates biological benchmarks, projects future population conditions, and recommends research and monitoring needs. Participants for SEDAR Workshops are appointed by the Gulf of Mexico, South Atlantic, and Caribbean Fishery Management Councils and NOAA Fisheries Southeast Regional Office, HMS Management Division, and Southeast Fisheries Science Center. Participants include data collectors and database managers; stock assessment scientists, biologists, and researchers; constituency
The items of discussion in the Data Workshop are as follows:
1. An assessment data set and associated documentation will be developed during the workshop.
2. Participants will evaluate proposed data and select appropriate sources for providing information on life history characteristics, catch statistics, discard estimates, length and age composition, and fishery dependent and fishery independent measures of stock abundance.
Although non-emergency issues not contained in this agenda may come before this group for discussion, those issues may not be the subject of formal action during this meeting. Action will be restricted to those issues specifically identified in this notice and any issues arising after publication of this notice that require emergency action under section 305(c) of the Magnuson-Stevens Fishery Conservation and Management Act, provided the public has been notified of the intent to take final action to address the emergency.
These meetings are physically accessible to people with disabilities. Requests for sign language interpretation or other auxiliary aids should be directed to the Council office (see
The times and sequence specified in this agenda are subject to change.
National Marine Fisheries Service (NMFS), National Oceanic and Atmospheric Administration (NOAA), Commerce.
Notice of availability; of a proposed evaluation for a Tribal Resource Management Plan and request for comment.
Notice is hereby given that the Northwest Indian Fisheries Commission (NWIFC) has submitted a Tribal Resource Management Plan (Tribal Plan) for NMFS to evaluate. It was presented by the Bureau of Indian Affairs (BIA) on behalf of the Northwest Indian Tribes; the submission fulfills the Tribes' obligations under the protective regulations promulgated for Puget Sound (PS) Chinook salmon, Hood Canal summer-run (HCS) chum salmon, PS steelhead, and Southern (S) eulachon under the Endangered Species Act (ESA). The Tribal Plan describes research and assessment activities that may affect listed PS Chinook salmon, HCS chum salmon, PS steelhead, and S eulachon in Washington State. The proposed research is intended to increase knowledge of species listed under the Endangered Species Act (ESA) and to help guide management and conservation efforts. NMFS has completed a proposed evaluation of how well the Tribal Plan fulfills ESA criteria, and the Secretary of Commerce (Secretary) is making that proposed evaluation available for public comment.
Comments or requests for a public hearing on the applications must be received no later than 5 p.m. Pacific standard time on May 11, 2022.
Because all West Coast NMFS offices are currently closed, all written comments on the document should be sent by email to
Shivonne Nesbit, Portland, OR (Ph: 503-231-6741, email:
The following listed species are covered in this notice:
Chinook salmon (
Chum salmon (
Steelhead (
Eulachon (
Under section 4 of the ESA, the Secretary is required to adopt such regulations as he deems necessary and advisable for the conservation of the species listed as threatened. The ESA Tribal 4(d) rule (70 FR 37160; June 28, 2005) states that the ESA section 9 take prohibitions do not apply to Tribal Plans that will not appreciably reduce the likelihood of survival and recovery for the listed species.
The NWIFC—through the BIA and on behalf of the Northwest Indian Tribes—has submitted a Tribal Plan for scientific research and assessment activities within the range of the PS Chinook salmon, HCS chum salmon, PS steelhead, and SDPS eulachon. The Northwest Indian Tribes conduct, independently and in cooperation with other agencies, a variety of research and assessment projects. These projects provide the technical basis for managing fisheries and conserving and restoring salmon stocks and their habitat. The need for an improved understanding of salmonid survival in the freshwater and early marine life stages drives much of the current research. The Tribal Plan includes implementation, monitoring, and evaluation procedures designed to ensure that the research is consistent with the objectives of the ESA. The research activities described in the Tribal Plan would take place over a 5 year period starting in 2022.
As 50 CFR 223.209 requires, the Secretary must determine whether the activities proposed in the Tribal Plan would appreciably reduce the likelihood of survival and recovery for PS Chinook salmon, HCS chum salmon, PS steelhead, and SDPS eulachon. The Secretary must take comments on how NMFS's evaluation of the Tribal Plan fulfills the criteria in 50 CFR 223.209 when making that portion of the determination.
U.S. Integrated Ocean Observing System (IOOS®), National Ocean Service (NOS), National Oceanic and Atmospheric Administration (NOAA), Department of Commerce (DOC).
Notice of open meeting.
Notice is hereby given of a virtual meeting of the U.S. Integrated Ocean Observing System (IOOS®) Advisory Committee (Committee). The meeting is open to the public and an opportunity for oral and written comments will be provided.
The meeting will be held May 11, 2022, and May 13, 2022. Written public comments should be received by the Designated Federal Official by May 6, 2022.
The meeting will be held virtually. To register for the meeting and/or submit public comments, use this link
Krisa Arzayus, Designated Federal Official, U.S. IOOS Advisory Committee, U.S. IOOS Program, 1315 East-West Highway, Silver Spring, MD 20910; Phone 240-533-9455; Fax 301-713-3281; email
The Committee was established by the NOAA Administrator as directed by section 12304 of the Integrated Coastal and Ocean Observation System Act, part of the Omnibus Public Land Management Act of 2009 (Pub. L. 111-11), and reauthorized under the Coordinated Ocean Observations and Research Act of 2020 (Pub. L. 116-271). The Committee advises the NOAA Administrator and the Interagency Ocean Observation Committee (IOOC) on matters related to the responsibilities and authorities set forth in section 12302 of the Integrated Coastal and Ocean Observation System Act of 2009 and other appropriate matters as the Under Secretary refers to the Committee for review and advice.
The Committee will provide advice on:
(a) Administration, operation, management, and maintenance of the Integrated Coastal and Ocean Observation System (the System);
(b) expansion and periodic modernization and upgrade of technology components of the System;
(c) identification of end-user communities, their needs for information provided by the System, and the System's effectiveness in disseminating information to end-user communities and to the general public; and
(d) additional priorities, including—
(1) a national surface current mapping network designed to improve fine scale sea surface mapping using high frequency radar technology and other emerging technologies to address national priorities, including Coast Guard search and rescue operation planning and harmful algal bloom forecasting and detection that—
(i) is comprised of existing high frequency radar and other sea surface current mapping infrastructure operated by national programs and regional coastal observing systems;
(ii) incorporates new high frequency radar assets or other fine scale sea surface mapping technology assets, and other assets needed to fill gaps in coverage on United States coastlines; and
(iii) follows a deployment plan that prioritizes closing gaps in high frequency radar infrastructure in the United States, starting with areas demonstrating significant sea surface current data needs, especially in areas where additional data will improve Coast Guard search and rescue models;
(2) fleet acquisition for unmanned maritime systems for deployment and data integration to fulfill the purposes of this subtitle;
(3) an integrative survey program for application of unmanned maritime systems to the real-time or near real-time collection and transmission of sea floor, water column, and sea surface data on biology, chemistry, geology, physics, and hydrography;
(4) remote sensing and data assimilation to develop new analytical methodologies to assimilate data from the System into hydrodynamic models;
(5) integrated, multi-State monitoring to assess sources, movement, and fate of sediments in coastal regions;
(6) a multi-region marine sound monitoring system to be—
(i) planned in consultation with the IOOC, NOAA on, the Department of the Navy, and academic research institutions; and
(ii) developed, installed, and operated in coordination with NOAA, the Department of the Navy, and academic research institutions; and
(e) any other purpose identified by the Administrator or the Council.
National Marine Fisheries Service (NMFS), National Oceanic and Atmospheric Administration (NOAA), Commerce.
Notice of public meetings.
The New England Fishery Management Council's is convening several Scoping Meetings for Limited
These meetings and webinars will be held between the dates of Wednesday, April 27, 2022 and Friday, June 24, 2022. See
Thomas A. Nies, Executive Director, New England Fishery Management Council; telephone: (978) 465-0492.
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Council staff will brief the public on Limited Access Leasing before receiving comments. The hearing will begin promptly at the time indicated above. If all attendees who wish to do so have provided their comments prior to the end time indicated, the hearing may conclude early. To the extent possible, the Council may extend hearings beyond the end time indicated above to accommodate all attendees who wish to speak.
Although non-emergency issues not contained on the agenda may come before this Council for discussion, those issues may not be the subject of formal action during this meeting. Council action will be restricted to those issues specifically listed in this notice and any issues arising after publication of this notice that require emergency action under section 305(c) of the Magnuson-Stevens Act, provided the public has been notified of the Council's intent to take final action to address the emergency. The public also should be aware that the meeting will be recorded. Consistent with 16 U.S.C. 1852, a copy of the recording is available upon request.
These meetings are physically accessible to people with disabilities. Requests for sign language interpretation or other auxiliary aids should be directed to Thomas A. Nies, Executive Director, at (978) 465-0492, at least 5 days prior to the meeting date.
Office of the Under Secretary of Defense for Personnel and Readiness (OUSD(P&R)), Department of Defense (DoD).
60-Day information collection notice.
In compliance with the
Consideration will be given to all comments received by June 10, 2022.
You may submit comments, identified by docket number and title, by any of the following methods:
To request more information on this proposed information collection or to obtain a copy of the proposal and associated collection instruments, please write to Defense Human Resources Activity, 4800 Mark Center Drive, Suite 08F05, Alexandria, VA 22350, LaTarsha Yeargins, 571-372-2089.
In March 2019, Acting Secretary of Defense, Patrick Shanahan, requested the DoD to form a team of experts to “take a fresh look” at issues involving the sexual assault investigative and accountability process. The DoD established the Sexual Assault Accountability and Investigation Task Force (SAAITF) to identify, evaluate, and make
Any Service member (Active or Reserve component) who has experienced sexual assault since joining the military will be eligible to participate in the study. Recruitment for the SVSES will include proactive outreach to Service members who previously filed an unrestricted report for sexual assault and Service members who requested to learn more about the study. The Office of People Analytics (OPA) will administer the SVSES via the web. The survey will be administered online via proprietary software developed by OPA's operations contractor. To reduce respondent burden, these online surveys will use “smart skip” technology to ensure respondents only answer questions that are applicable to them.
The study will not produce generalizable statistics or findings; rather, it will inform policy and program offices within the DoD about Service member satisfaction with sexual assault response resources and processes and the sexual assault accountability system. OPA will provide interim reports regarding the findings of the study to OUSD(P&R) policy offices on a biannual basis and a full report on a biennial basis. Data from the SVSES will also be used in future analyses.
Office of the Under Secretary of Defense for Personnel and Readiness (OUSD(P&R)), Department of Defense (DoD).
60-Day information collection notice.
In compliance with the
Consideration will be given to all comments received by June 10, 2022.
You may submit comments, identified by docket number and title, by any of the following methods:
To request more information on this proposed information collection or to obtain a copy of the proposal and associated collection instruments, please write to Department of Defense Education Activity, Research, Accountability & Evaluation Division, ATTN: Research Requests, 4800 Mark Center Drive, Alexandria, VA 22350-1400, Sam Gotti, 571-372-1891.
Office of the Under Secretary of Defense for Personnel and Readiness (OUSD(P&R)), Department of Defense (DoD).
30-Day information collection notice.
The Department of Defense has submitted to OMB for clearance the following proposal for collection of information under the provisions of the Paperwork Reduction Act.
Consideration will be given to all comments received by May 11, 2022.
Written comments and recommendations for the proposed information collection should be sent within 30 days of publication of this notice to
Angela Duncan, 571-372-7574,
• Indicators of positive and negative trends for professional and personal relationships among members of all racial and ethnic groups.
• The effectiveness of DoD policies designed to improve relationships among all racial and ethnic groups.
• The effectiveness of current processes for complaints on, and investigations into, racial and ethnic discrimination.
Moreover, in the 2020 National Defense Authorization Act (NDAA) as modified by the 2021 NDAA, the DoD was further directed to conduct a survey to assess whether or not military members witnessed or experienced extremism in their workplace, as well as whether or not those experiences were reported. To reduce survey burden, the Department identified the Workplace and Equal Opportunity (WEO) survey as the most appropriate existing survey vehicle to collect this information. As such, the 2022 WEO survey will be the first survey to collect and report on this new statutory requirement. Prior to including the new exposure to extremism metric on the 2022 WEO, the Department engaged in a year-long robust metric development and validation study to ensure results are collected consistently, and also to ensure results accurately measure the experiences required by law and IAW DoDI 1325.06 which define prohibited extremist activities for military members. The statutory and policy requirements for the WEO can be found in the following:
Overall, the results of the survey will assess progress, identify shortfalls, and revise policies and programs as needed, related to issues directly affecting military members. Data from this survey will be presented to the OUSD(P&R), Congress, and DoD policy and program offices to assess and improve policies, programs, practices, and training related to racial/ethnic relations in the Armed Forces informed by current and statistically reliable information. Analysis will include the Office of People Analytics' standard products: An executive report highlighting key findings, a trends/tabulations report (a set of relative frequency distributions of each question, and cross-tabulations of survey questions by key stratifying variables), briefing slides, and a statistical methodology report. Ad hoc analyses requested by the policy office sponsors and other approved organizations may be conducted and published as needed and based on available staff.
You may also submit comments and recommendations, identified by Docket ID number and title, by the following method:
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Requests for copies of the information collection proposal should be sent to Ms. Duncan at
Office of the Secretary (OS), Department of Education (ED).
Notice.
In accordance with the Paperwork Reduction Act of 1995, ED is proposing an extension without change of a currently approved collection.
Interested persons are invited to submit comments on or before May 11, 2022.
Written comments and recommendations for proposed information collection requests should be sent within 30 days of publication of this notice to
For specific questions related to collection activities, please contact Alfreida Pettiford, 202-453-7718.
The Department of Education (ED), in accordance with the Paperwork Reduction Act of 1995 (PRA) (44 U.S.C. 3506(c)(2)(A)), provides the general public and Federal agencies with an opportunity to comment on proposed, revised, and continuing collections of information. This helps the Department assess the impact of its information collection requirements and minimize the public's reporting burden. It also helps the public understand the Department's information collection requirements and provide the requested data in the desired format. ED is soliciting comments on the proposed information collection request (ICR) that is described below. The Department of Education is especially interested in public comment addressing the following issues: (1) Is this collection necessary to the proper functions of the Department; (2) will this information be processed and used in a timely manner; (3) is the estimate of burden accurate; (4) how might the Department enhance the quality, utility, and clarity of the information to be collected; and (5) how might the Department minimize the burden of this collection on the respondents, including through the use of information technology. Please note that written comments received in response to this notice will be considered public records.
Office of Environmental Management, Department of Energy.
Notice of open meeting.
This notice announces an in-person/virtual hybrid meeting of the Environmental Management Site-Specific Advisory Board (EM SSAB) Chairs. The Federal Advisory Committee Act requires that public notice of this online virtual meeting be announced in the
Tuesday, May 3, 2022; 1:00 p.m.-5:00 p.m. CDT; Wednesday, May 4, 2022; 10:00 a.m.-3:00 p.m. CDT.
This hybrid meeting will be open to the public in-person and virtually (observation only). To attend, please contact Alyssa Harris by email,
Those participating in-person will meet at: The Carson Center—Myre River Room, 100 Kentucky Avenue, Paducah, KY 42003.
Alyssa Harris, EM SSAB Federal Coordinator. U.S. Department of Energy, 1000 Independence Avenue SW, Washington, DC 20585. Email:
Office of Energy Efficiency and Renewable Energy, Department of Energy.
Notification of extension of interim waiver.
The U.S. Department of Energy (“DOE”) is granting an interim waiver extension (Case No. 2022-002) to AHT Cooling Systems GmbH and AHT Cooling Systems USA Inc. (“AHT”) from specified portions of the DOE Commercial Refrigerators, Freezers, and Refrigerator-Freezers (collectively “commercial refrigeration equipment” or “CRE”) test procedure for determining the energy consumption of the specified AHT CRE basic models. Under this extension, AHT is required to test and rate the specified basic models in accordance with the alternate test procedure specified in the interim waiver.
The Extension of Interim Waiver is effective on April 11, 2022.
Ms. Julia Hegarty, U.S. Department of Energy, Office of Energy Efficiency and Renewable Energy, Building Technologies Office, EE-5B, 1000 Independence Avenue SW, Washington, DC 20585-0121. Email:
Mr. Pete Cochran, U.S. Department of Energy, Office of the General Counsel, Mail Stop GC-33, Forrestal Building, 1000 Independence Avenue SW, Washington, DC 20585-0103. Telephone: (202) 586-9496. Email:
In accordance with Title 10 of the Code of Federal Regulations (10 CFR 431.401(g)), DOE gives notice of the issuance of an Extension of Interim Waiver as set forth below. The Extension of Interim Waiver extends the Interim Waiver granted to AHT on May 26, 2017 (82 FR 24330, “May 2017 Interim Waiver”) to include the AHT basic models specified in this interim waiver extension, as requested by AHT on January 20, 2022.
DOE makes decisions on waiver extensions, including interim waiver extensions, for only those basic models specifically set out in the request, not future models that may be manufactured by the petitioner. AHT may submit a new or amended petition for waiver and request for grant of interim waiver, as appropriate, for additional basic models of CRE. Alternatively, if appropriate, AHT may request that DOE extend the scope of a waiver or interim waiver to include additional basic models employing the same technology as the basic models set forth in the original petition consistent with 10 CFR 431.401(g).
The Energy Policy and Conservation Act, as amended (“EPCA”),
The energy conservation program under EPCA consists essentially of four parts: (1) Testing, (2) labeling, (3) Federal energy conservation standards, and (4) certification and enforcement procedures. Relevant provisions of EPCA include definitions (42 U.S.C. 6311), energy conservation standards (42 U.S.C. 6313), test procedures (42 U.S.C. 6314), labeling provisions (42 U.S.C. 6315), and the authority to require information and reports from manufacturers (42 U.S.C. 6316).
The Federal testing requirements consist of test procedures that manufacturers of covered equipment must use as the basis for: (1) Certifying to DOE that their equipment complies with the applicable energy conservation standards adopted pursuant to EPCA (42 U.S.C. 6316(a); 42 U.S.C. 6295(s)), and (2) making representations about the efficiency of that equipment (42 U.S.C. 6314(d)). Similarly, DOE must use these test procedures to determine whether the equipment complies with relevant standards promulgated under EPCA. (42 U.S.C. 6316(a); 42 U.S.C. 6295(s))
Under 42 U.S.C. 6314, EPCA sets forth the criteria and procedures DOE is required to follow when prescribing or amending test procedures for covered equipment. EPCA requires that any test procedures prescribed or amended under this section must be reasonably designed to produce test results which reflect the energy efficiency, energy use or estimated annual operating cost of covered equipment during a representative average use cycle and requires that test procedures not be unduly burdensome to conduct. (42 U.S.C. 6314(a)(2)) The test procedure for CRE is contained in 10 CFR part 431, subpart C, appendix B—
Any interested person may submit a petition for waiver from DOE's test procedure requirements. 10 CFR 431.401(a)(1). DOE will grant a waiver from the test procedure requirements if DOE determines either that the basic model for which the waiver was requested contains a design characteristic that prevents testing of the basic model according to the prescribed test procedures, or that the prescribed test procedures evaluate the basic model in a manner so unrepresentative of its true energy or water consumption characteristics as to provide materially
A petitioner may request that DOE extend the scope of a waiver or an interim waiver to include additional basic models employing the same technology as the basic model(s) set forth in the original petition. 10 CFR 431.401(g). DOE will publish any such extension in the
On May 26, 2017, DOE issued an Interim Waiver in Case Number CR-006 granting AHT an interim waiver to test its AHT basic models specified in that interim waiver using an alternate test procedure. 82 FR 24330 (“May 2017 Interim Waiver”).
Based on its review, including the information provided by AHT, DOE initially determined that the current test procedure at Appendix B would evaluate the CRE basic models specified in the May 2017 Interim Waiver in a manner so unrepresentative of their true energy consumption characteristics as to provide materially inaccurate comparative data.
On January 20, 2022, AHT submitted a request to extend the scope of the interim waiver, Case Number 2022-002, to the specified additional AHT basic models.
DOE has reviewed AHT's interim waiver extension request and operating instructions for the subject basic models and determined that the CRE basic models identified in AHT's request incorporate the same design characteristics as those basic models covered under the interim waiver in Case Number CR-006 such that the test procedure evaluates these basic models in a manner that is unrepresentative of their actual energy use. For the same reasons set forth in the May 2017 Interim Waiver, DOE understands that the model lines identified in AHT's request are not capable of defrosting once every 24 hours as simulated by the DOE test procedure.
After careful consideration of all the material submitted by AHT in this matter, it is
(1) AHT must, as of the date of publication of this Extension of Interim Waiver in the
(2) The alternate test procedure for the AHT basic models referenced in paragraph (1) of this Order is the test procedure for CRE prescribed by DOE at 10 CFR part 431, subpart C, appendix B, except the test period shall be selected as follows:
The first part of the test shall be a 24-hour test starting in steady-state conditions and including eight hours of door opening (according to ASHRAE Standard 72). The energy consumed in this test,
The second part of the test shall be a defrost cycle, including any operation associated with a defrost. The start and end points of the defrost cycle test period shall be determined according to the instructions for consumer refrigerators and refrigerator-freezers outlined in 10 CFR part 430, subpart B, appendix A, section 4.2.1.1 (for cycling compressor systems) or section 4.2.1.2 (for non-cycling compressor systems). The energy consumed in this test,
Based on the measured energy consumption in these two tests, the daily energy consumption (DEC) in kWh shall be calculated as:
(3)
(4) This Extension of Interim Waiver shall remain in effect according to the provisions of 10 CFR 431.401.
(5) This Extension of Interim Waiver is issued on the condition that the statements, representations, and documentation provided by AHT are valid. If AHT makes any modifications to the defrost controls of these basic models, the interim waiver will no longer be valid and AHT will either be required to use the current Federal test method or submit a new application for a test procedure waiver. DOE may rescind or modify this Extension of Interim Waiver (and/or the underlying Order issued in Case Number CR-006) at any time if it determines the factual basis underlying the petition for extension of interim waiver (and/or the underlying Order issued in Case Number CR-006) is incorrect, or the results from the alternate test procedure are unrepresentative of a basic model's true energy consumption characteristics. 10 CFR 431.401(k)(1). Likewise, AHT may request that DOE rescind or modify the Extension of Interim Waiver (and/or the underlying Order issued in Case Number CR-006) if AHT discovers an error in the information provided to DOE as part of its petition, determines that the interim waiver is no longer needed, or for other appropriate reasons. 10 CFR 431.401(k)(2).
(6) AHT remains obligated to fulfill all applicable requirements set forth at 10 CFR part 429.
This document of the Department of Energy was signed on April 5, 2022, by Kelly J. Speakes-Backman, Principal Deputy Assistant Secretary for Energy Efficiency and Renewable Energy, pursuant to delegated authority from the Secretary of Energy. That document with the original signature and date is maintained by DOE. For administrative purposes only, and in compliance with requirements of the Office of the Federal Register, the undersigned DOE Federal Register Liaison Officer has been authorized to sign and submit the document in electronic format for publication, as an official document of the Department of Energy. This administrative process in no way alters the legal effect of this document upon publication in the
Office of Energy Efficiency and Renewable Energy, Department of Energy.
Notice of decision and order: Extension of waiver.
The U.S. Department of Energy (“DOE”) gives notice of a Decision and Order (Case No. 2022-001) that grants AHT Cooling Systems GmbH and AHT Cooling Systems USA Inc. (“AHT”) a waiver extension from specified portions of the DOE Commercial Refrigerators, Freezers, and Refrigerator-Freezers (collectively “commercial refrigeration equipment” or “CRE”) test procedure for determining the energy consumption of the specified AHT CRE basic models. AHT is required to test and rate the specified basic models in accordance with the alternate test procedure specified in this Decision and Order.
The Decision and Order is effective on April 11, 2022. The Decision and Order will terminate upon the compliance date of any future amendment to the test procedure for CRE located in 10 CFR part 431, subpart C, appendix B that addresses the issues presented in this waiver. At such time, AHT must use the relevant test procedure for the specified basic models of CRE for any testing to demonstrate compliance with standards, and any other representations of energy use.
Ms. Julia Hegarty, U.S. Department of Energy, Office of Energy Efficiency and Renewable Energy, Building Technologies Office, EE-5B, 1000 Independence Avenue SW, Washington, DC 20585-0121. Email:
Mr. Pete Cochran, U.S. Department of Energy, Office of the General Counsel, Mail Stop GC-33, Forrestal Building, 1000 Independence Avenue SW, Washington, DC 20585-0103. Telephone: (202) 586-9496. Email:
In accordance with Title 10 of the Code of Federal Regulations (10 CFR 431.401(g)), DOE gives notice of the Decision and Order as set forth below. The Decision and Order extends the waiver that was granted to AHT on October 30, 2018 (83 FR 54581, “October 2018 Decision and Order”) to include the AHT basic models specified in this waiver, as requested by AHT on January 20, 2022.
DOE makes decisions on waiver extensions for only those basic models specifically set out in the request, not future models that may be manufactured by the petitioner. AHT may submit a new or amended petition for waiver and request for grant of interim waiver, as appropriate, for additional basic models of CRE. Alternatively, if appropriate, AHT may request that DOE extend the scope of a waiver to include additional basic models employing the same technology as the basic models set forth in the original petition consistent with 10 CFR 431.401(g).
The Energy Policy and Conservation Act, as amended (“EPCA”),
Under 42 U.S.C. 6314, EPCA sets forth the criteria and procedures DOE is required to follow when prescribing or amending test procedures for covered equipment. EPCA requires that any test procedures prescribed or amended under this section must be reasonably designed to produce test results which reflect the energy efficiency, energy use or estimated annual operating cost of covered equipment during a representative average use cycle and requires that test procedures not be unduly burdensome to conduct. (42 U.S.C. 6314(a)(2)) The test procedure for CRE is contained in 10 CFR part 431, subpart C, appendix B—
Any interested person may submit a petition for waiver from DOE's test procedure requirements. 10 CFR 431.401(a)(1). DOE will grant a waiver from the test procedure requirements if DOE determines either that the basic model for which the waiver was requested contains a design characteristic that prevents testing of the basic model according to the prescribed test procedures, or that the prescribed test procedures evaluate the basic model in a manner so unrepresentative of its true energy or water consumption characteristics as to provide materially inaccurate comparative data. 10 CFR 431.401(f)(2). DOE may grant the waiver subject to conditions, including adherence to alternate test procedures.
A petitioner may request that DOE extend the scope of a waiver or an interim waiver to include additional basic models employing the same technology as the basic model(s) set forth in the original petition. 10 CFR 431.401(g). DOE will publish any such extension in the
On October 30, 2018, DOE issued a Decision and Order in Case Number 2017-007 granting AHT a waiver to test its AHT basic models specified in that Order using an alternate test procedure. 83 FR 54581 (“October 2018 Decision and Order”). AHT stated that the basic models listed in the petition do not have a defrost cycle when operated in freezer mode, and therefore cannot be tested under Appendix B, which references defrosts for the start of the test period and door-opening period.
Based on its review, including the information provided by AHT, DOE determined that the CRE basic models specified in the October 2018 Decision and Order contain a design characteristic that prevents testing the basic models according to the prescribed test procedure at Appendix B. 83 FR 54581, 54582. The October 2018 Decision and Order specifies that AHT must test and rate the subject basic models according to Appendix B, but with the test period starting after the unit achieves steady state conditions and the door-opening period starting 3 hours after the start of the test period.
On January 20, 2022, AHT submitted a request to extend the scope of the waiver, Case Number 2022-001, to specified additional AHT basic models.
DOE has reviewed AHT's waiver extension request and operating instructions for the subject basic models and determined that the CRE basic models identified in AHT's request incorporate the same design characteristics as those basic models covered under the waiver in Case Number 2017-007 (
After careful consideration of all the material submitted by AHT in this matter, it is
(1) AHT must, as of the date of publication of this Extension of Waiver in the
(2) The alternate test procedure for the AHT basic models referenced in paragraph (1) of this Order is the test procedure for CRE prescribed by DOE at 10 CFR part 431, subpart C, appendix B, except that the test period shall be selected as detailed below. All other requirements of Appendix B and DOE's regulations remain applicable.
The test shall begin when steady state conditions occur (per ASHRAE Standard 72-2005, Section 3, definitions, which defines steady state as “the condition where the average temperature of all test simulators changes less than 0.2 °C (0.4 °F) from one 24-hour period or refrigeration cycle to the next”). Additionally, the door-opening requirements shall be as defined in ASHRAE 72-2005 Section 7.2, with the exception that the eight-hour period of door openings shall begin three hours after the start of the test. Ambient temperature, test simulator temperatures, and all other data shall be recorded at three-minute intervals beginning at the start of the test and throughout the 24-hour testing period.
(3)
(4) This Extension of Waiver shall remain in effect according to the provisions of 10 CFR 431.401.
(5) This Extension of Waiver is issued on the condition that the statements, representations, and documentation provided by AHT are valid. If AHT makes any modifications to the controls or capabilities (
(6) AHT remains obligated to fulfill all applicable requirements set forth at 10 CFR part 429.
This document of the Department of Energy was signed on April 5, 2022, by Kelly J. Speakes-Backman, Principal Deputy Assistant Secretary for Energy Efficiency and Renewable Energy, pursuant to delegated authority from the Secretary of Energy. That document with the original signature and date is maintained by DOE. For administrative purposes only, and in compliance with requirements of the Office of the Federal Register, the undersigned DOE Federal Register Liaison Officer has been authorized to sign and submit the document in electronic format for publication, as an official document of the Department of Energy. This administrative process in no way alters the legal effect of this document upon publication in the
National Nuclear Security Administration (NNSA), Department of Energy (DOE).
Notice.
On November 24, 2021, the Secretary of Energy issued a determination (“Secretarial Determination”) covering the sale, lease, or transfer of up to 750 kilograms uranium (kgU) of high-assay low enriched uranium (HALEU) (above 5 but less than 20 wt. percent uranium-235) per calendar year to support the development and establishment of molybdenum-99 (Mo-99) production capabilities. For the reasons set forth in the Department's “Analysis of Potential Impacts of Certain Uranium Transactions on the Domestic Uranium Mining, Conversion, and Enrichment Industries,” which is incorporated into the Secretarial Determination, the Secretary determined that these transactions will not have an adverse material impact on the domestic uranium mining, conversion, or enrichment industry.
Requests for additional information may be sent to Brett Cox:
The Department of Energy (“the Department”) holds limited inventories of uranium in various forms and quantities that have been declared as excess and are not dedicated to U.S. national security missions. Within DOE, the National Nuclear Security Administration (NNSA) manages these inventories. NNSA down-blends excess highly-enriched uranium (HEU) to high-assay low-enriched uranium (HALEU)— a subset of low enriched uranium (LEU), enriched above the commercial level of 5 wt-% and below 20 wt-% of the isotope U-235. Common applications of such high-assay materials are as fuels for domestic and foreign research reactors and as target materials for the production of medical isotopes.
This notice involves the sale, lease, or transfer of HALEU to support domestic molybdenum-99 (Mo-99) producers. These sales, leases, and transfers fulfill a directive in the American Medical Isotopes Production Act of 2012 (Pub. L. 112-239, Division C, Title XXXI, Subtitle F, 42 U.S.C. 2065) for the Department to establish a program to make HALEU available, through lease contracts, for the production of Mo-99 for medical uses. These sales, leases, and transfers also support U.S. nuclear nonproliferation initiatives, by down-blending HEU and encouraging the use of LEU in civilian applications in lieu of HEU.
These sales, leases or transfers are conducted in accordance with the Atomic Energy Act of 1954 (42 U.S.C. 2011
On November 23, 2021, the Secretary of Energy issued a determination covering the sale, lease, or transfer of up to 750 kgU of HALEU per calendar year to support the development and establishment of Mo-99 production capabilities. For the reasons set forth in the Department's “Analysis of Potential Impacts of Certain Uranium Transactions on the Domestic Uranium Mining, Conversion, and Enrichment Industries,” which is incorporated into the Secretarial Determination, the Secretary determined that these transactions will not have an adverse material impact on the domestic uranium mining, conversion, or enrichment industry. In accordance with section 306(a) of Division D, Title III of the
This document of the Department of Energy was signed on April 5, 2022, by Corey Hinderstein, Deputy Administrator for Defense Nuclear Nonproliferation, pursuant to delegated authority from the Secretary of Energy. The document with the original signature and date is maintained by DOE. For administrative purposes only, and in compliance with requirements of the Office of the Federal Register, the undersigned DOE Federal Register Liaison Officer has been authorized to sign and submit the document in electronic format for publication, as an official document of the Department of Energy. This administrative process in no way alters the legal effect of this document upon publication in the
Set forth below is the full text of the Secretarial Determination.
I determine that the sale, lease, or transfer of up to 750 kgU of high-assay low enriched uranium (above 5 but less than 20 wt. percent uranium-235) per calendar year to support the development and establishment of molybdenum-99 production capabilities will not have an adverse material impact on the domestic uranium mining, conversion, or enrichment industry. I base my conclusions on the Department's
Set forth below is the full text of the “
The Department of Energy (DOE) manages its excess uranium inventory in accordance with the
The
Two types of potential transactions are considered in this analysis: (1) The lease of certain high-assay low enriched uranium (HALEU) (LEU enriched above 5 weight (wt.) % U-235, but less than 20 wt. % U-235) for the production of molybdenum-99 (Mo-99); and (2) the sale or transfer of HALEU to producers for use in medical isotope research, development, and production.
The first type of transaction is authorized under the
The second type of transaction considered in this analysis is a sale or transfer of HALEU to producers for use in medical isotope research and production processes that are not under the ULTB program and do not meet the criteria of section 3112(e)(3) of the
The materials considered in this analysis would be transferred during calendar years 2021 through 2023 and consist of no more than 750 kg of HALEU in any calendar year. Based on semi-annual LEU demand surveys conducted to determine domestic producers' material needs, DOE's National Nuclear Security Administration (DOE/NNSA) increased the amount being assessed in this Determination from 500 kg per calendar year for the last Determination (2019 to 2021), to 750 kg of HALEU per calendar year during this Determination period. Assuming a tails assay of 0.20 wt. % U-235, this quantity would be equivalent to approximately 28,700 kgU of natural uranium hexafluoride and approximately 33,850 separative work units (“SWU”) to produce 750 kg of HALEU at 19.75 wt. % U-235.
The analytical approach relied on for previous Secretarial Determinations covering the sale, transfer, or lease of excess uranium for Mo-99 research and production (80 FR 65728, Oct. 27, 2015), the ULTB program (81 FR 1409, Jan. 12, 2016), and the Secretarial Determination for the Sale, Lease or Transfer of Uranium (signed and dated November 26, 2019) is repeated here and updated to the extent necessary.
This analysis evaluates the state of the domestic uranium industries and the relevant impacts if DOE goes forward with these potential transactions. DOE has developed a set of factors that this analysis considers in assessing whether DOE's uranium sales and transfers will have an “adverse material impact” on the domestic uranium mining, conversion, or enrichment industry:
While no single factor is dispositive of the issue, DOE believes that these factors are representative of the types of impacts that the proposed sale, lease, or transfer may have on the domestic uranium industries. Not every factor will necessarily be relevant on a given occasion or to a particular industry; DOE intends this list of factors only as a guide to its analysis.
There is currently no commercial supplier for HALEU. Therefore, there is no established market price for HALEU. DOE sets a price for HALEU based on a combination of commercial market price components for LEU, plus a charge for the separative work above the 5% LEU limit reflecting the historical cost to DOE to produce this material.
The market value of 4.95% enriched LEU has risen 64% from its low point in October 2017. Industry analysts forecast a continued increase in the market value of LEU.
Further, with no commercial provider for HALEU, the DOE sales and leases of HALEU would not displace production or affect prices among the commercial domestic uranium mining, conversion, or enrichment industries, and even if it did, the amount would be so small that the effects would be minimal.
An analysis of the impact of the proposed sales and leases based on an assessment of production at existing facilities is straightforward. There is currently no commercial supplier of HALEU in the United States. Due to the lack of a sufficient near-term market, owners and operators of enrichment facilities have not developed commercial HALEU enrichment capability to produce uranium enriched to 19.75 wt. % U-235. With the closing of the Paducah Gaseous Diffusion Plant in 2013, the only operational uranium enrichment facility in the United States is the URENCO USA facility operated by Louisiana Energy Services, LLC, in Eunice, New Mexico, which is currently licensed by the Nuclear Regulatory Commission to possess uranium only up to 5.5 wt. % U-235.
Further, it is not feasible for commercial Mo-99 producers to use commercially available assays of LEU (
Although the DOE sales and leases of HALEU would not displace production among the commercial domestic uranium mining, conversion, or enrichment industries, even if it did, the amount would be so small that the effects would be minimal. With respect to these industries, to produce the amount of HALEU in the proposed sales and leases from primary production would require approximately 75,000 pounds of uranium concentrates (U
The domestic conversion industry consists of only one facility that historically produced between 10 million kgU and 12 million kgU per year and reduced its capability to 7 million kgU in 2017. Honeywell, the owner of the sole domestic conversion facility, suspended operation in 2018, but recently announced that the plant would be restarted and projected that production would begin in early 2023.
As mentioned above, there is only one currently operating commercial enrichment facility, URENCO USA's subsidiary, Louisiana Energy Services (LES), LLC in the United States. The total capacity of that facility is 4.9 million SWU.
As stated above, DOE sales and leases of HALEU would not displace production among the commercial domestic uranium mining, conversion, or enrichment industries, and therefore will not affect employment levels in these industries.
Although there is currently no domestic uranium enrichment capability to produce HALEU, there have been recent noteworthy developments. In 2019, the Department entered into a cost-shared contract for a HALEU Demonstration Program with American Centrifuge Operating, LLC (ACO), a subsidiary of the U.S. company, Centrus Energy Corp. (“Centrus”). The Program has objectives to deploy a 16-machine cascade of AC-100 M centrifuges in Piketon, Ohio to produce 19.75 wt. % U-235 with US-origin enrichment technology that will result in a small quantity of HALEU for use in research and development. In June 2021, the Nuclear Regulatory Commission (NRC) approved ACO's license amendment request to produce HALEU with an enrichment assay of up to 20 wt. % U-235 at the Piketon facility.
In another recent development, URENCO USA provided a notice to the NRC in April 2021 of its intent to amend the URENCO USA license to increase the enrichment level up to 10 wt. % U-235. Submittal of the initial license amendment request is expected later in 2021. URENCO USA expects to have capability to deliver HALEU up to 10 wt. % U-235 in 2024. URENCO USA also has longer term plans to produce up to 19.75 wt. % U-235.
However, the relatively small amounts of material covered by this Determination have no impact on capital improvement plans and development of future facilities including mines, conversion facilities, and enrichment plants.
There is currently no commercial supplier of HALEU in the United States. Therefore, there is no long-term industry impact to assess. As noted above, DOE is working with Centrus to establish a technology base which could provide greater amounts of HALEU if commercialized. Long term impacts of DOE material provided to the market will be assessable when Centrus or another HALEU enricher are closer to entering the nuclear fuel market.
The
With respect to the six factors listed above to assess market impacts:
1. The relatively small amounts of material covered by this Determination have no impact on the price of HALEU, for which there is currently no commercial market price.
2. There are new developments in the industry, but licensing and production timelines will not be impacted in the timeframe for this Determination.
3. The relatively small amounts of material covered by this Determination have no impact on employment levels in the mining, conversion, or enrichment industries.
4. New market developments will not mature during this Determination period to a point where the market could be impacted by DOE sales or leases.
5. The relatively small amounts of material covered by this Determination have no impact on the long-term viability and health of the mining, conversion, and enrichment industries.
6. The Russian HEU Agreement and Russian Suspension Agreement are not factors because there is no HALEU currently being imported from Russia to the United States.
Thus, DOE concludes that the sale, lease, or transfer of up to 750 kg of HALEU per calendar year to support the research, development, and production of Mo-99 and other isotopes will not have an adverse material impact on the domestic uranium mining, conversion, or enrichment industry, taking into account the ended
Take notice that the Commission has received the following Natural Gas Pipeline Rate and Refund Report filings:
Any person desiring to protest in any the above proceedings must file in accordance with Rule 211 of the Commission's Regulations (18 CFR 385.211) on or before 5:00 p.m. Eastern time on the specified comment date.
Any person desiring to intervene or protest in any of the above proceedings must file in accordance with Rules 211 and 214 of the Commission's Regulations (18 CFR 385.211 and 385.214) on or before 5:00 p.m. Eastern time on the specified comment date. Protests may be considered, but intervention is necessary to become a party to the proceeding.
The filings are accessible in the Commission's eLibrary system (
eFiling is encouraged. More detailed information relating to filing requirements, interventions, protests, service, and qualifying facilities filings can be found at:
This is a supplemental notice in the above-referenced proceeding of Guernsey Power Station LLC's application for market-based rate authority, with an accompanying rate tariff, noting that such application includes a request for blanket authorization, under 18 CFR part 34, of future issuances of securities and assumptions of liability.
Any person desiring to intervene or to protest should file with the Federal Energy Regulatory Commission, 888 First Street NE, Washington, DC 20426, in accordance with Rules 211 and 214 of the Commission's Rules of Practice and Procedure (18 CFR 385.211 and 385.214). Anyone filing a motion to intervene or protest must serve a copy of that document on the Applicant.
Notice is hereby given that the deadline for filing protests with regard to the applicant's request for blanket authorization, under 18 CFR part 34, of future issuances of securities and assumptions of liability, is April 25, 2022.
The Commission encourages electronic submission of protests and interventions in lieu of paper, using the FERC Online links at
Persons unable to file electronically may mail similar pleadings to the Federal Energy Regulatory Commission, 888 First Street NE, Washington, DC 20426. Hand delivered submissions in docketed proceedings should be delivered to Health and Human Services, 12225 Wilkins Avenue, Rockville, Maryland 20852.
In addition to publishing the full text of this document in the
Take notice that the Commission received the following exempt wholesale generator filings:
Take notice that the Commission received the following electric rate filings:
The filings are accessible in the Commission's eLibrary system (
Any person desiring to intervene or protest in any of the above proceedings must file in accordance with Rules 211 and 214 of the Commission's Regulations (18 CFR 385.211 and 385.214) on or before 5:00 p.m. Eastern time on the specified comment date. Protests may be considered, but intervention is necessary to become a party to the proceeding.
eFiling is encouraged. More detailed information relating to filing requirements, interventions, protests, service, and qualifying facilities filings can be found at:
Environmental Protection Agency (EPA).
Notice of proposed consent decree; request for public comment.
In accordance with the Clean Air Act, as amended (CAA or the Act), notice is given of a proposed consent decree in
Written comments on the proposed consent decree must be received by May 11, 2022.
Submit your comments, identified by Docket ID No. EPA-HQ-OGC-2022-0175, online at
EPA continues to carefully and continuously monitor information from the CDC, local area health departments, and our Federal partners so that we can respond rapidly as conditions change regarding COVID-19.
Seth Buchsbaum, Air and Radiation Law Office (mail code), Office of General Counsel, U.S. Environmental Protection Agency, 1200 Pennsylvania Ave. NW, Washington, DC 20460; telephone (202) 564-2484; email address
The official public docket for this action (identified by Docket ID No. EPA-HQ-OGC-2022-0175) contains a copy of the proposed consent decree.
The electronic version of the public docket for this action contains a copy of the proposed consent decree and is available through
On June 15, 2015, EPA issued findings of substantial inadequacy pursuant to CAA section 110(k)(5) for SIP provisions applying to excess emissions during startup, shutdown, and malfunction (“SSM”) periods for 45 states and air districts. State Implementation Plans: Response to Petition for Rulemaking; Restatement and Update of EPA's SSM Policy Applicable to SIPs; Findings of Substantial Inadequacy; and SIP Calls to Amend Provisions Applying to Excess Emissions During Periods of Startup, Shutdown, and Malfunction, 80 FR 33840 (June 12, 2015). EPA accordingly issued a SIP Call requiring those 45 states and air districts to submit plan revisions to correct SSM-related deficiencies in their SIPs within 18 months,
The proposed consent decree would establish deadlines for EPA to take action pursuant to CAA section 110(k) on certain SIP revisions that were submitted by the following states and air districts in response to the 2015 SSM SIP Call: Alaska, Arizona—Arizona Department of Environmental Quality, Arizona—Maricopa County Air Quality Department, California—Eastern Kern Air Pollution Control District, California—Imperial County Air Pollution Control District, Colorado, Delaware, Florida, Georgia, Indiana, Kansas, Kentucky, Louisiana, Maine, Michigan, Minnesota, Missouri, Mississippi, Montana, New Jersey, New Mexico, North Dakota, New Mexico—Albuquerque-Bernalillo County, Oklahoma, South Carolina, Tennessee, Virginia, Washington, and West Virginia. Plaintiffs also alleged that EPA had failed to take action on SIP revisions submitted by Texas and North Carolina in response to the SIP call; however, EPA has withdrawn the SIP Calls submitted to those states, mooting that portion of the litigation. SIP Call Withdrawal and Air Plan Approval; NC: Large Internal Combustion Engines NO
CAA section 110(k) sets forth the process by which EPA reviews SIP submissions and revisions. 42 U.S.C. 7410(k). According to that process, EPA must determine no later than 6 months after the date by which a state is required to submit a SIP submittal whether a state has made a submission that meets the minimum completeness criteria.
Additionally, during the pendency of this litigation, in the ordinary course of its administrative action, EPA has taken final action on some of the SIP submissions originally at issue in the litigation.
Under the terms of the proposed consent decree, EPA shall sign a notice or notices approving, disapproving, conditionally approving, or approving in part and conditionally approving or disapproving in part the SIP revisions as listed and identified in the proposed consent decree by the established deadlines. The proposed consent decree provides that if any State withdraws one of the listed SIP revisions, EPA's obligation to take such an action is terminated.
In accordance with section 113(g) of the CAA, for a period of thirty (30) days following the date of publication of this document, the Agency will accept written comments relating to the proposed consent decree. EPA or the Department of Justice may withdraw or withhold consent to the proposed consent decree if the comments disclose facts or considerations that indicate that such consent is inappropriate, improper, inadequate, or inconsistent with the requirements of the Act.
Submit your comments, identified by Docket ID No. EPA-HQ-OGC-2022-0175, via
If you submit an electronic comment, EPA recommends that you include your name, mailing address, and an email address or other contact information in the body of your comment. This ensures that you can be identified as the submitter of the comment and allows EPA to contact you in case EPA cannot read your comment due to technical difficulties or needs further information on the substance of your comment. Any identifying or contact information provided in the body of a comment will be included as part of the comment that is placed in the official public docket and made available in EPA's electronic public docket. If EPA cannot read your comment due to technical difficulties and cannot contact you for clarification, EPA may not be able to consider your comment.
Use of the
Please ensure that your comments are submitted within the specified comment period. Comments received after the close of the comment period will be marked “late.” EPA is not required to consider these late comments.
Federal Communications Commission.
Notice and request for comments.
As part of its continuing effort to reduce paperwork burdens, and as required by the Paperwork Reduction Act (PRA) of 1995, the Federal Communications Commission (FCC or the Commission) invites the general public and other Federal agencies to take this opportunity to comment on the following information collection. Comments are requested concerning: Whether the proposed collection of information is necessary for the proper performance of the functions of the Commission, including whether the information shall have practical utility; the accuracy of the Commission's burden estimate; ways to enhance the quality, utility, and clarity of the information collected; ways to minimize the burden of the collection of information on the respondents, including the use of automated collection techniques or other forms of information technology; and ways to further reduce the information collection burden on small business concerns with fewer than 25 employees. The FCC may not conduct or sponsor a collection of information unless it displays a currently valid control number. No person shall be subject to any penalty for failing to comply with a collection of information subject to the PRA that does not display a valid Office of Management and Budget (OMB) control number.
Written PRA comments should be submitted on or before June 10, 2022. If you anticipate that you will be submitting comments, but find it difficult to do so within the period of time allowed by this notice, you should advise the contact listed below as soon as possible.
Direct all PRA comments to Nicole Ongele, FCC, via email
For additional information about the information collection, contact Nicole Ongele, (202) 418-2991.
The Commission has adopted procedures allowing state, federal, local,
In a Second Report and Order adopted on March 18, 2021, as FCC 21-34, the Commission adopted rules allowing certain federal, state, and Tribal Nation agencies 10 (Participating Agencies) to access to certain geographically relevant outage reports filed in the Commission's Network Outage Reporting System (NORS). The information collections and record keeping provisions adopted will allow federal, state and Tribal Nation agencies (Participating Agencies) to apply for, and receive access to, NORS report in the areas where they have jurisdiction. The collection will further enable these Participating Agencies, at their election, to share NORS reports with qualified local agencies whose jurisdiction is affected by an outage, while still maintaining the confidentiality of the substantive data. The changes to the data collections fields in the NORS filings made by service providers will further facilitate the ability of Participating Agencies to access those reports relevant to their specific geographies. Finally, the changes to the information collection and associated recordkeeping requirements, including retention by participating agencies of qualification forms submitted by local agency seeking access to NORS data, as well as a list of which local agencies receive information from the Participating Agency, training materials setting clear parameters for the use of NORS data, and a list of those persons granted NORS account access, will enable auditing functions to ensure accountability in the use of NORS information and immediate reporting of breaches of access or confidentiality protocols.
In accordance with 47 CFR 4.2, reports and information contained in the underlying DIRS filings are presumed confidential. The filings are shared with the Department of Homeland Security through password-protected real time access to NORS. Other persons seeking disclosure must follow the procedure delineated in 47 CFR 0.457 and 0.459 of the Commission's Rules for requests for and disclosure of information. The modified collection proposed here will allow “need to know” agencies acting on behalf of the federal government, the 50 states, the District of Columbia, Tribal Nations, and the U.S. territories access to confidential information derived from DIRS filings based on events occurring within an agency's jurisdiction, provided those agencies maintain the confidentiality of the information and report any breach of that confidentiality.
The Commission has adopted procedures allowing state, federal, local, and Tribal agencies with a demonstrated “need to know” to apply for “read-only” access to DIRS reports impacting locations where the agency has jurisdiction. To protect the confidentiality of the NORS and DIRS information disclosed to these Participating Agencies, the Commission limited the access to only those agencies who complete the registration process and then limits by geographic area the reports available to each Participating Agency. The Commission also adopted safeguards to protect the data accessed by Participating Agencies from manipulation and from distribution to unauthorized recipients.
The Commission notes that the information sharing framework established in the Second Report and Order allows for access to be granted not only for DIRS, but also to the Commission's Network Outage Reporting System (NORS). We note that the process and requirements for Participating Agencies under this framework is identical, regardless of whether they seek access to NORS, DIRS, or both. Because the Commission anticipates that NORS and DIRS access will be requested together in most cases, it believes that the estimated burden hours and costs for Participating Agencies associated with DIRS access are fully included in the estimates that it has separately submitted as part of its collection on Part 4 of the Commission's Rules Concerning Disruptions to Communications, OMB Control No. 3060-0484. To avoid double-counting the estimated burden hours and costs associated with both collections, the Commission estimates the marginal cost of the Participating Agency aspect of this collection to be zero.
Federal Communications Commission.
Notice and request for comments.
As part of its continuing effort to reduce paperwork burdens, and as required by the Paperwork Reduction Act (PRA) of 1995, the Federal Communications Commission (FCC or the Commission) invites the general public and other Federal agencies to take this opportunity to comment on the following information collection. Comments are requested concerning: Whether the proposed collection of information is necessary for the proper performance of the functions of the Commission, including whether the information shall have practical utility; the accuracy of the Commission's burden estimate; ways to enhance the quality, utility, and clarity of the information collected; ways to minimize the burden of the collection of information on the respondents, including the use of automated collection techniques or other forms of information technology; and ways to further reduce the information collection burden on small business concerns with fewer than 25 employees. The FCC may not conduct or sponsor a collection of information unless it displays a currently valid control number. No person shall be subject to any penalty for failing to comply with a collection of information subject to the PRA that does not display a valid Office of Management and Budget (OMB) control number.
Written PRA comments should be submitted on or before June 10, 2022. If you anticipate that you will be submitting comments, but find it difficult to do so within the period of time allowed by this notice, you should advise the contact listed below as soon as possible.
Direct all PRA comments to Nicole Ongele, FCC, via email
For additional information about the information collection, contact Nicole Ongele, (202) 418-2991.
Federal Deposit Insurance Corporation (FDIC).
Notice and request for comment.
The FDIC, as part of its obligations under the Paperwork Reduction Act of 1995 (PRA), invites the general public and other Federal agencies to take this opportunity to comment on the renewal of the existing information collection described below (OMB Control No. 3064-0207).
Comments must be submitted on or before June 10, 2022.
Interested parties are invited to submit written comments to the FDIC by any of the following methods:
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•
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All comments should refer to the relevant OMB control number. A copy of the comments may also be submitted to the OMB desk officer for the FDIC: Office of Information and Regulatory Affairs, Office of Management and Budget, New Executive Office Building, Washington, DC 20503.
Manny Cabeza, Regulatory Counsel, 202-898-3767,
1.
The FDIC has reviewed its previous submission related to the PRA and has updated its methodology to align with the Office of the Comptroller of the Currency's corresponding information collection (1557-0326). The decrease in the estimated annual burden of 409,935 hours is the result of this change in methodology.
Food and Drug Administration, HHS.
Notice of availability.
The Food and Drug Administration (FDA or Agency) is announcing the availability of two final device-specific guidance documents for the Safety and Performance Based Pathway—specifically, “Surgical Sutures—Performance Criteria for Safety and Performance Based Pathway” and “Orthopedic Fracture Fixation Plates—Performance Criteria for Safety and Performance Based Pathway.” The device-specific guidances identified in this notice were developed in accordance with the finalized guidance entitled “Safety and Performance Based Pathway.”
The announcement of the guidances is published in the
You may submit either electronic or written comments on Agency guidances at any time as follows:
Submit electronic comments in the following way:
•
• If you want to submit a comment with confidential information that you do not wish to be made available to the public, submit the comment as a written/paper submission and in the manner detailed (see “Written/Paper Submissions” and “Instructions”).
Submit written/paper submissions as follows:
•
• For written/paper comments submitted to the Dockets Management Staff, FDA will post your comment, as well as any attachments, except for information submitted, marked and identified, as confidential, if submitted as detailed in “Instructions.”
• Confidential Submissions—To submit a comment with confidential information that you do not wish to be made publicly available, submit your comments only as a written/paper submission. You should submit two copies total. One copy will include the information you claim to be confidential with a heading or cover note that states “THIS DOCUMENT CONTAINS CONFIDENTIAL INFORMATION.” The Agency will review this copy, including the claimed confidential information, in its consideration of comments. The second copy, which will have the claimed confidential information redacted/blacked out, will be available for public viewing and posted on
You may submit comments on any guidance at any time (see 21 CFR 10.115(g)(5)).
An electronic copy of the guidance documents are available for download from the internet. See the
Jason Ryans, Center for Devices and Radiological Health, Food and Drug Administration, 10903 New Hampshire Ave., Bldg. 66, Rm. 1613, Silver Spring, MD 20993-0002, 301-796-4908.
The FDA is announcing the availability of two final device-specific guidance documents for the Safety and Performance Based Pathway—specifically, “Surgical Sutures—Performance Criteria for Safety and Performance Based Pathway” and “Orthopedic Fracture Fixation Plates—Performance Criteria for Safety and Performance Based Pathway.” These device-specific guidance documents provide performance criteria for premarket notification (510(k)) submissions to support the optional Safety and Performance Based Pathway, as described in the guidance entitled “Safety and Performance Based Pathway.”
These guidances are being implemented without prior public comment because the Agency has determined that prior public participation is not feasible or appropriate (see section 701(h)(1)(C) of the FD&C Act (21 U.S.C. 371(h)(1)(C)) and 21 CFR 10.115(g)(2)). FDA has determined that these guidance documents present less burdensome policies that are consistent with public health. Although these guidances are being implemented immediately, FDA will consider all comments received and revise the guidance documents as appropriate.
These guidances are being issued consistent with FDA's good guidance practices regulation (21 CFR 10.115). These guidances represent the current thinking of FDA on “Surgical Sutures—Performance Criteria for Safety and Performance Based Pathway” and “Orthopedic Fracture Fixation Plates—Performance Criteria for Safety and Performance Based Pathway.” They do not establish any rights for any person and are not binding on FDA or the public. You can use an alternative approach if it satisfies the requirements of the applicable statutes and regulations.
Persons interested in obtaining a copy of the guidances may do so by downloading an electronic copy from the internet. A search capability for all Center for Devices and Radiological Health guidance documents is available at
While these guidances contain no new collection of information, they do refer to previously approved FDA collections of information. Therefore, clearance by the Office of Management and Budget (OMB) under the Paperwork Reduction Act of 1995 (44 U.S.C. 3501-3521) is not required for these guidances. The previously approved collections of information are subject to review by OMB under the PRA. The collections of information in the following FDA regulation and guidance have been approved by OMB as listed in the following table:
Food and Drug Administration, HHS.
Notice.
The Food and Drug Administration (FDA) is announcing that a proposed collection of information has been submitted to the Office of Management and Budget (OMB) for review and clearance under the Paperwork Reduction Act of 1995.
Fax written comments on the collection of information by May 11, 2022.
To ensure that comments on the information collection are received, OMB recommends that written comments be faxed to the Office of Information and Regulatory Affairs, OMB, Attn: FDA Desk Officer, Fax: 202-395-7285, or emailed to
Domini Bean, Office of Operations, Food and Drug Administration, Three White Flint North, 10A-45, 11601 Landsdown St., North Bethesda, MD 20852, 301-796-5733,
In compliance with 44 U.S.C. 3507, FDA has submitted the following proposed collection of information to OMB for review and clearance.
This information collection supports FDA regulations in 21 CFR part 1, subpart L (21 CFR 1.500 through 1.514 (§§ 1.500 through (§§ 1.514)), which help to implement section 805 of the Federal Food, Drug, and Cosmetic Act (FD&C Act) (21 U.S.C. 384a). Section 805 authorizes the Agency's FSVP and establishes requirements applicable to imported food. Respondents to the information collection are importers, as defined in section 805(a)(1) of the FD&C Act. The regulations are intended to provide verification that imported food is produced in compliance with statutory requirements that include the implementation of appropriate risk-based preventive controls. The regulations also establish that importers of foods must develop, maintain, and follow an FSVP that provides adequate assurances a foreign supplier is producing the food in compliance with processes and procedures that provide at least the same level of public health protection as those required under section 418 of the FD&C Act (21 U.S.C. 350g) (regarding hazard analysis and risk-based preventive controls for certain foods) or 419 (21 U.S.C. 350h) (regarding standards for produce safety), if either is applicable, and the implementing regulations, and is producing the food in compliance with sections 402 (21 U.S.C. 342) (regarding adulteration) and 403(w) (21 U.S.C. 343(w)) (if applicable) (regarding misbranding with respect to labeling for the presence of major food allergens) of the FD&C Act. The regulations also provide for certain exemptions. To assist respondents with understanding the requirements we have developed Agency guidance, available at:
Specifically, regulations in § 1.501 set forth the applicability of requirements for FSVP, while regulations in §§ 1.502 through 1.508, prescribe specific activities for developing, maintaining, and following an FSVP; as well as for evaluating compliance and for identifying and correcting hazards. Finally, regulations in § 1.509 identify required data elements applicable to food products offered for importation into the United States, while regulations in § 1.510 govern required records, providing that records be made available to FDA upon request and that records be maintained electronically. On May 10, 2021, FDA launched the FSVP Importer Portal for FSVP Records Submission as a means for importers to upload FSVP records electronically and submit them to the Agency, after receiving a request for records from FDA. The portal may be found at
In the
We estimate the burden of this collection of information as follows:
Upon evaluation of the information collection, we are retaining the currently approved burden estimates.
Food and Drug Administration, HHS.
Notice of availability.
The Food and Drug Administration (FDA or Agency) is announcing the availability of a final guidance for industry entitled “E8(R1) General Considerations for Clinical Studies.” The guidance was prepared under the auspices of the International Council for Harmonisation (ICH), formerly the International Conference on Harmonisation. The guidance describes internationally accepted principles and practices for the design and conduct of clinical studies of drug and biological products. In addition, the guidance provides an overview of the types of clinical studies that may be performed and data sources used during the product's life cycle. The guidance is intended to promote the quality of the studies submitted to regulatory authorities, while allowing for flexibility. This guidance revises the guidance for industry “E8 General Considerations for Clinical Trials” issued in December 1997.
The announcement of the guidance is published in the
You may submit either electronic or written comments on Agency guidances at any time as follows:
Submit electronic comments in the following way:
•
• If you want to submit a comment with confidential information that you do not wish to be made available to the public, submit the comment as a written/paper submission and in the manner detailed (see “Written/Paper Submissions” and “Instructions”).
Submit written/paper submissions as follows:
•
• For written/paper comments submitted to the Dockets Management Staff, FDA will post your comment, as well as any attachments, except for information submitted, marked and identified, as confidential, if submitted as detailed in “Instructions.”
• Confidential Submissions—To submit a comment with confidential information that you do not wish to be made publicly available, submit your comments only as a written/paper submission. You should submit two copies total. One copy will include the information you claim to be confidential with a heading or cover note that states “THIS DOCUMENT CONTAINS CONFIDENTIAL INFORMATION.” The Agency will review this copy, including the claimed confidential information, in its consideration of comments. The second copy, which will have the claimed confidential information redacted/blacked out, will be available for public viewing and posted on
You may submit comments on any guidance at any time (see 21 CFR 10.115(g)(5)).
Submit written requests for single copies of this guidance to the Division of Drug Information, Center for Drug Evaluation and Research, Food and Drug Administration, 10001 New Hampshire Ave., Hillandale Building, 4th Floor, Silver Spring, MD 20993-0002, or the Office of Communication, Outreach and Development, Center for Biologics Evaluation and Research (CBER), Food and Drug Administration, 10903 New Hampshire Ave., Bldg. 71, Rm. 3128, Silver Spring, MD 20993-0002. Send one self-addressed adhesive label to assist that office in processing your requests. The guidance may also be obtained by mail by calling CBER at 1-800-835-4709 or 240-402-8010. See the
FDA is announcing the availability of a final guidance for industry entitled “E8(R1) General Considerations for Clinical Studies”. The guidance was prepared under the auspices of ICH. ICH has the mission of achieving greater regulatory harmonization worldwide to ensure that safe, effective, high-quality medicines are developed, registered, and maintained in the most resource-efficient manner.
By harmonizing the regulatory requirements in regions around the world, ICH guidelines have substantially reduced duplicative clinical studies, prevented unnecessary animal studies,
The six Founding Members of the ICH are FDA; the Pharmaceutical Research and Manufacturers of America; the European Commission; the European Federation of Pharmaceutical Industries Associations; the Japanese Ministry of Health, Labour, and Welfare; and the Japanese Pharmaceutical Manufacturers Association. The Standing Members of the ICH Association include Health Canada and Swissmedic. Additionally, the Membership of ICH has expanded to include other regulatory authorities and industry associations from around the world (refer to
ICH works by involving technical experts from both regulators and industry parties in detailed technical harmonization work and the application of a science-based approach to harmonization through a consensus-driven process that results in the development of ICH guidelines. The regulators around the world are committed to consistently adopting these consensus-based guidelines, realizing the benefits for patients and for industry.
As a Founding Regulatory Member of ICH, FDA plays a major role in the development of each of the ICH guidelines, which FDA then adopts and issues as guidance for industry. FDA's guidance documents do not establish legally enforceable responsibilities. Instead, they describe the Agency's current thinking on a topic and should be viewed only as recommendations, unless specific regulatory or statutory requirements are cited.
In the
This guidance finalizes the draft guidance issued on August 1, 2019. The revised final guidance describes internationally accepted principles and practices in the design and conduct of clinical studies of drug and biological products. Changes from the 2019 draft guidance to the final guidance include a reduced emphasis on distinct phases of clinical development, the addition of examples of novel studies, and amendments to appendices. The original ICH guidance “E8 General Considerations for Clinical Trials,” that was issued in 1997 has not undergone revision previously. Since the 1997 guidance was issued, clinical trial design and conduct have become more complex, impacting the time and feasibility of developing drugs. In response, the revised guidance directly addresses study quality to ensure the protection of study participants and the generation of reliable and meaningful results, while promoting study efficiency. The ICH E8(R1) guidance focuses on the identification of factors that are critical to the study quality and the management of risks to those factors. Additionally, a wider range of study designs and data sources play an increasingly important role in drug development and are not adequately addressed in the original ICH E8 guidance. Hence, the revised final guidance addresses a broad range of study designs and data sources. The revised final guidance also provides updated cross-referencing to other relevant ICH guidances that inform the design, planning, and conduct of clinical research, without reproducing the detailed material found in those guidances.
This guidance is being issued consistent with FDA's good guidance practices regulation (21 CFR 10.115). The guidance represents the current thinking of FDA on “E8(R1) General Considerations for Clinical Studies.” It does not establish any rights for any person and is not binding on FDA or the
While this guidance contains no collection of information, it does refer to previously approved FDA collections of information. Therefore, clearance by the Office of Management and Budget (OMB) under the Paperwork Reduction Act of 1995 (PRA) (44 U.S.C. 3501-3521) is not required for this guidance. The previously approved collections of information are subject to review by OMB under the PRA. The collections of information for investigational new drug applications under have been approved under OMB control number 0910-0014; the collections of information for review of new drug applications in have been approved under OMB control number 0910-0001; and the collections of information for review of biologic licensing applications in have been approved under OMB control number 0910-0338.
Persons with access to the internet may obtain the guidance at
Office of the Secretary, HHS.
Notice.
Findings of research misconduct have been made against Toni M. Brand, Ph.D. (Respondent), who was a graduate student in the Department of Human Oncology, University of Wisconsin-Madison (UWM), and subsequently a research fellow in the Department of Otolaryngology—Head and Neck Surgery, University of California San Francisco (UCSF). Respondent engaged in research misconduct in research supported by U.S. Public Health Service (PHS) funds, specifically National Cancer Institute (NCI), National Institutes of Health (NIH), grants P30 CA014520, K99 CA160639, T32 CA108462, and U54 CA209891, National Center for Research Resources (NCRR), NIH, grant UL1 RR025011, National Center for Translational Sciences (NCATS), NIH, grants U54 TR000021 and UL1 TR000427, National Institute of General Medical Sciences (NIGMS), NIH, grant T32 GM081061, and National Institute of Dental and Craniofacial Research (NIDCR), NIH, grant R01 DE023685. The administrative actions, including supervision for a period of four (4) years, were implemented beginning on March 23, 2022, and are detailed below.
Wanda K. Jones, Dr. P.H., Acting Director, Office of Research Integrity, 1101 Wootton Parkway, Suite 240, Rockville, MD 20852, (240) 453-8200.
Notice is hereby given that the Office of Research Integrity (ORI) has taken final action in the following case:
ORI found that Respondent engaged in research misconduct by knowingly or recklessly falsifying or fabricating western blot data, by reusing and relabeling data to represent expression of proteins in control experiments measuring the purity of cytoplasmic and nuclear cell fractionation, measurements of proteins of interest, and measurements of the same protein under different experimental conditions or loading controls, included in twenty-four (24) figures in the following grant application submitted to NIDCR, NIH, her Ph.D. Thesis Dissertation, and seven (7) published papers:
• K99 DE027699-01, “Targeting HPV-driven immunosuppressive signaling pathways in head and neck cancer,” submitted to NIDCR, NIH, on June 8, 2017.
• Ph.D. Thesis Dissertation, “Investigations of Nuclear HER family receptors in cancer and resistance to cetuximab therapy,” Department of Human Oncology, UWM, March 21, 2014 (hereafter referred to as “Thesis”).
• Mapping C-terminal transactivation domains of the nuclear HER family receptor tyrosine kinase HER3.
• Nuclear EGFR as a molecular target in cancer.
• Nuclear epidermal growth factor receptor is a functional molecular target in triple-negative breast cancer.
• AXL mediates resistance to cetuximab therapy.
• The receptor tyrosine kinase AXL mediates nuclear translocation of the epidermal growth factor receptor.
• Human Papillomavirus Regulates HER3 Expression in Head and Neck Cancer: Implications for Targeted HER3 Therapy in HPV + Patients.
• Cross-talk Signaling between HER3 and HPV16 E6 and E7 Mediates Resistance to PI3K Inhibitors in Head and Neck Cancer.
Specifically, ORI found that Respondent knowingly or recklessly falsified or fabricated data in:
• Figure 6B of Thesis and Figure 6B of
• Figure 6, panel C, of Thesis and Figure 6C of
• Figure 6C, inset 1, of Thesis and Figure 6C, inset 1, of
• Figure 6C, inset 2, of Thesis and Figure 6C, inset 2, of
• Figure 7A and inset 2 of Thesis and Figure 7A and inset 2 of
• Figure 2B, SKBr3 inset, of
• Figure 2B, SUM229 inset, of
• Figure 4B of
• Figure 2D of prpS6 western blot panel from HP cell line in
• Figure 1A of
• Figure 2A of
• Figure 2C of
• Figure 2C inset of
• Figure 4A of
• Figure 5E of
• Tubulin western blot panels in Figure 3A of K99 DE027699-01 by reusing the same data to represent two different cell lines or related data to represent a different cell line.
• Figure 3A of
• Supplemental Figure 3A of
• Figure 1C of
Respondent neither admits nor denies ORI's findings of research misconduct. The parties entered into a Voluntary Settlement Agreement (Agreement) to conclude this matter without further expenditure of time, finances, or other resources. The settlement is not an admission of liability on the part of the Respondent.
Respondent voluntarily agreed to the following:
(1) Respondent will have her research supervised for a period of four (4) years beginning on March 23, 2022 (the “Supervision Period”). Prior to the submission of an application for PHS support for a research project on which Respondent's participation is proposed and prior to Respondent's participation in any capacity in PHS-supported research, Respondent will submit a plan for supervision of Respondent's duties to ORI for approval. The supervision plan must be designed to ensure the integrity of Respondent's research. Respondent will not participate in any PHS-supported research until such a supervision plan is approved by ORI. Respondent will comply with the agreed-upon supervision plan.
(2) The requirements for Respondent's supervision plan are as follows:
i. A committee of 2-3 senior faculty members at the institution who are familiar with Respondent's field of research, but not including Respondent's supervisor or collaborators, will provide oversight and guidance during the Supervision Period. The committee will review primary data from Respondent's laboratory on a quarterly basis and submit a report to ORI at six (6) month intervals setting forth the committee meeting dates and Respondent's compliance with appropriate research standards and confirming the integrity of Respondent's research.
ii. The committee will conduct an advance review of each application for PHS funds, or report, manuscript, or abstract involving PHS-supported research in which Respondent is involved. The review will include a discussion with Respondent of the primary data represented in those documents and will include a certification to ORI that the data presented in the proposed application, report, manuscript, or abstract are supported by the research record.
(3) During the Supervision Period, Respondent will ensure that any institution employing her submits, in conjunction with each application for PHS funds, or report, manuscript, or abstract involving PHS-supported research in which Respondent is involved, a certification to ORI that the data provided by Respondent are based on actual experiments or are otherwise legitimately derived and that the data, procedures, and methodology are accurately reported in the application, report, manuscript, or abstract.
(4) If no supervision plan is provided to ORI, Respondent will provide certification to ORI at the conclusion of the Supervision Period that her participation was not proposed on a research project for which an application for PHS support was submitted and that she has not participated in any capacity in PHS-supported research.
(5) During the Supervision Period, Respondent will exclude herself voluntarily from serving in any advisory or consultant capacity to PHS including, but not limited to, service on any PHS advisory committee, board, and/or peer review committee.
(6) Respondent will request that the following papers be corrected or retracted:
•
•
•
Respondent will copy ORI and the Research Integrity Officers at UWM and UCSF on the correspondence with the journals.
Assistant Secretary for Planning and Evaluation, HHS.
Notice of meeting.
This notice announces the public meeting of the Advisory Council on Alzheimer's Research, Care, and Services (Advisory Council). The Advisory Council provides advice on how to prevent or reduce the burden of Alzheimer's disease and related dementias on people with the disease and their caregivers. During the meeting, the Advisory Council will celebrate accomplishments since the release of the National Plan to Address Alzheimer's Disease in May 2012. On May 2, the Advisory Council will hear panel presentations on recent research on biomarkers and therapeutics. On May 3, the Dementia Nomenclature Initiative will present an update to the Advisory Council, and there will be a panel of presentations about dementia risk reduction. Time will be available for public comments at the end of the meeting on May 3.
The meeting will be held on May 2 and 3, 2022 from 1:00 to 4:00 p.m. EDT each day.
The meeting will be virtual, streaming live at
In lieu of oral comments, formal written comments may be submitted for the record by Thursday, April 28 to Helen Lamont, Ph.D., OASPE, 200 Independence Avenue SW, Room 424E, Washington, DC 20201. Comments may also be sent to
Helen Lamont, 202-260-6075,
Notice of these meetings is given under the Federal Advisory Committee Act (5 U.S.C. app. 2, section 10(a)(1) and (a)(2)). Topics of the Meeting: Long-term services and supports workforce, caregiving.
Pursuant to section 10(d) of the Federal Advisory Committee Act, as amended, notice is hereby given of the following meeting.
The meeting will be closed to the public in accordance with the provisions set forth in sections 552b(c)(4) and 552b(c)(6), Title 5 U.S.C., as amended. The grant applications and the discussions could disclose confidential trade secrets or commercial property such as patentable material, and personal information concerning individuals associated with the grant applications, the disclosure of which would constitute a clearly unwarranted invasion of personal privacy.
Fish and Wildlife Service, Interior.
Notice of receipt of permit applications; request for comments.
We, the U.S. Fish and Wildlife Service, invite the public to comment on applications to conduct certain activities with foreign species that are listed as endangered under the Endangered Species Act (ESA). With some exceptions, the ESA prohibits activities with listed species unless Federal authorization is issued that allows such activities. The ESA also requires that we invite public comment before issuing permits for any activity otherwise prohibited by the ESA with respect to any endangered species.
We must receive comments by May 11, 2022.
•
•
For more information, see Public Comment Procedures under
Brenda Tapia, by phone at 703-358-2185, via email at
We invite the public and local, State, Tribal, and Federal agencies to comment on these applications. Before issuing any of the requested permits, we will take into consideration any information that we receive during the public comment period.
You may submit your comments and materials by one of the methods in
When submitting comments, please specify the name of the applicant and the permit number at the beginning of your comment. Provide sufficient information to allow us to authenticate any scientific or commercial data you include. The comments and recommendations that will be most useful and likely to influence agency decisions are: (1) Those supported by quantitative information or studies; and (2) those that include citations to, and analyses of, the applicable laws and regulations.
You may view and comment on others' public comments at
If you submit a comment at
To help us carry out our conservation responsibilities for affected species, and in consideration of section 10(c) of the Endangered Species Act of 1973, as amended (ESA; 16 U.S.C. 1531
We invite comments on the following applications.
The applicant requests renewal of a permit to import live Mexican or lobo wolves (
The applicant requests renewal of a permit to take captive-bred sooty mangabeys (
The applicant requests a permit to purchase in interstate commerce two male and two female captive-bred African penguins (
The applicant requests a permit to export one male and two female captive-bred clouded leopards (
The applicant requests a permit to import one male, one female and one juvenile captive-bred lar gibbon (
After the comment period closes, we will make decisions regarding permit issuance. If we issue permits to any of the applicants listed in this notice, we will publish a notice in the
We issue this notice under the authority of the Endangered Species Act of 1973, as amended (16 U.S.C. 1531
Bureau of Ocean Energy Management, Interior.
Notice of information collection; request for comment.
In accordance with the Paperwork Reduction Act of 1995, the Bureau of Ocean Energy Management (BOEM) is proposing to renew an information collection request (ICR).
Interested persons are invited to submit comments on or before June 10, 2022.
Send your comments on this ICR by mail to the BOEM Information Collection Clearance Officer, Anna Atkinson, Bureau of Ocean Energy Management, 45600 Woodland Road, Sterling, Virginia 20166; or by email to
To request additional information about this ICR, contact Anna Atkinson by email at
In accordance with the Paperwork Reduction Act of 1995, BOEM provides the general public and other Federal agencies with an opportunity to comment on new, proposed, revised, and continuing collections of information. This helps BOEM assess the impact of its information collection requirements and minimize the public's reporting burden. It also helps the public understand BOEM's information collection requirements and provide the requested data in the desired format.
BOEM is soliciting comments on the proposed ICR described below. BOEM is especially interested in public comments addressing the following issues: (1) Is the collection necessary to the proper functions of BOEM; (2) what can BOEM do to ensure that this information is processed and used in a timely manner; (3) is the burden estimate accurate; (4) how might BOEM enhance the quality, utility, and clarity of the information to be collected; and (5) how might BOEM minimize the burden of this collection on the respondents, including minimizing the burden through the use of information technology?
Comments submitted in response to this notice are a matter of public record. BOEM will include or summarize each comment in its request to OMB for approval of this ICR. You should be aware that your entire comment—including your address, phone number, email address, or other personally identifiable information included in your comment—may be made publicly available. You may request that BOEM withhold from disclosure your personally identifiable information. Your request must identify any information contained in your comment that, if released, would constitute a clearly unwarranted invasion of your personal privacy. You also must briefly describe any possible harmful consequences of disclosure of that information, such as embarrassment, injury, or other harm. While you can ask in your comment that your personally identifiable information be withheld from public disclosure, BOEM cannot guarantee that it will be able to do so under the law.
BOEM protects proprietary information in accordance with the Freedom of Information Act (5 U.S.C. 552), the Department of the Interior's implementing regulations (43 CFR part 2), and 30 CFR parts 550 and 552 promulgated pursuant to the Outer Continental Shelf (OCS) Lands Act (43 U.S.C. 1352(c)).
BOEM uses forms to collect information to ensure proper and efficient administration of its oil spill financial responsibility requirements. BOEM collects information to:
• Provide a standard method for establishing whether a party is required to demonstrate oil spill financial responsibility for offshore facilities;
• Identify and maintain a record of those offshore facilities that have a potential oil spill liability requiring the demonstration of oil spill financial responsibility;
• Establish and maintain a continuous record of evidence of oil spill financial responsibility to assure payment of claims for oil spill cleanup and damages resulting from operations conducted on covered offshore facilities and from the transportation of oil from covered offshore facilities;
• Establish and maintain a continuous record of responsible parties, as defined in title I of the Oil Pollution Act of 1990, and their agents or authorized representatives for oil spill financial responsibility for covered offshore facilities; and
• Establish and maintain a continuous record of persons to contact and U.S. agents for service of process for claims associated with oil spills from covered offshore facilities.
Remote work led to changes in how industry reviews and processes required documents. Prior to COVID, in-person meetings with a group of reviewers were held to complete the task quickly and efficiently. Now with many employees working from home, document preparation, review, and editing are taking longer as the documents move through several individual reviewers. Companies have provided this feedback through our outreach efforts. Therefore, BOEM is increasing hour burdens to account for the additional review and editing time. This increase in respondents and burden hours may be temporary and will be revisited by BOEM during future reviews of U.S. OCS supply and demand patterns.
The following table details the individual components and respective hour burden estimates of this ICR. In the table, the term “oil spill financial responsibility” has been shortened to “OSFR.”
An agency may not conduct or sponsor, and a person is not required to respond to, a collection of information unless it displays a valid OMB control number.
The authority for this action is the Paperwork Reduction Act of 1995 (44 U.S.C. 3501
U.S. International Trade Commission.
Notice.
Notice is hereby given that the U.S. International Trade Commission has determined to issue a limited exclusion order (“LEO”) barring entry of certain in vitro fertilization products, components thereof, and products containing the same, that infringe Complainant's asserted trademarks and that are imported by or on behalf of respondents FastIVF of Scottsdale, Arizona (“FastIVF”) and Hermes Ezcanesi of Istanbul, Turkey (collectively, the “Defaulting Respondents”). The Commission has further determined to issue a cease and desist order (“CDO”) directed to Defaulting Respondent FastIVF. The investigation is terminated.
Houda Morad, Office of the General Counsel, U.S. International Trade Commission, 500 E Street SW, Washington, DC 20436, telephone (202) 708-4716. Copies of non-confidential documents filed in connection with this investigation may be viewed on the Commission's electronic docket (EDIS) at
On April 16, 2020, the Commission instituted this investigation under section 337 of the Tariff Act of 1930, as amended, 19 U.S.C. 1337 (“section 337”), based on a complaint filed by complainant EMD Serono, Inc. of Rockland, Massachusetts (“Complainant”).
On September 1, 2020, the Chief ALJ issued an initial determination (“ID”) finding each of the Defaulting Respondents in default.
On April 16, 2021, the Chief ALJ issued an ID (Order No. 10) (“SD”) granting in part Complainant's motion for summary determination of violation of section 337 by the Defaulting Respondents with respect to Complainant's claim under section 337(a)(1)(C) (infringement of the Asserted Trademarks) but denied the motion with respect to Complainant's unfair competition claims under section 337(a)(1)(A). In addition, the Chief ALJ recommended that the Commission issue a general exclusion order (“GEO”) and set a bond at 100 percent during the period of Presidential review.
On May 18, 2021, the Commission determined to review the SD (Order No. 10) in part.
On October 6, 2021, the Commission determined to vacate the SD in part. Specifically, the Commission vacated the SD's finding that Complainant has satisfied the economic prong of the domestic industry requirement. Consequently, the Commission also vacated the SD's finding of a violation of section 337 and remanded the investigation to the Chief ALJ. Because Complainant requested a GEO, the Commission found that Complainant failed to establish a violation by “substantial, reliable, and probative evidence” and that genuine issues of material fact remained as to whether the economic prong of the domestic industry requirement was satisfied.
After the Commission's decision to vacate the SD, Complainant withdrew its request for a GEO and requested an LEO against the Defaulting Respondents and a CDO against FastIVF. On December 15, 2021, the Chief ALJ issued an ID partially terminating the investigation as to Complainant's unfair competition claims under section 337(a)(1)(A).
On December 15, 2021, the Chief ALJ issued a remand final initial determination (“FID”) finding a violation of section 337 based on the infringement by the Defaulting Respondents of Complainant's Asserted Trademarks pursuant to section 337(g)(1), 19 U.S.C. 1337(g)(1). In addition, the Chief ALJ issued a Recommended Determination (“RD”) recommending that the Commission issue an LEO against the infringing articles imported by or on behalf of the Defaulting Respondents and a CDO against FastIVF.
On January 4, 2022, Complainant filed a statement on the public interest pursuant to Commission Rule 210.50, 19 CFR 210.50. On the same day, Complainant filed a declaration requesting relief against the Defaulting Respondents, namely, an LEO against the Defaulting Respondents' infringing products and a CDO against FastIVF. No submissions were filed in response to the
On February 11, 2022, the Commission issued a notice determining not to review the remand FID and therefore affirmed the remand FID's finding of a violation of section 337 pursuant to section 337(g)(1) (19 U.S.C. 1337(g)(1)).
On February 28, 2022, Complainant and OUII filed responses to the Commission's Remedy Notice. On March 7, OUII filed a reply to Complainant's submission.
Having examined the record of this investigation, including the FID, the RD, and the parties' submissions in response to the Remedy Notice, the Commission has determined that the appropriate remedy in this investigation is: (1) An LEO prohibiting the unlicensed entry of certain in vitro fertilization products, components thereof, and products containing the same, that infringe Complainant's Asserted Trademarks and that are imported by or on behalf of the Defaulting Respondents; and (2) a CDO directed to Defaulting Respondent FastIVF. The Commission has further determined that the bond during the period of Presidential review pursuant to section 337(j) (19 U.S.C. 1337(j)) shall be in the amount of 100 percent of the entered value of the imported articles that are subject to the LEO and/or CDO. Still further, the Commission has determined that the public interest factors enumerated in subsections 337(g)(1) (19 U.S.C. 1337(g)(1)) do not preclude the issuance of the LEO and CDO.
The Commission's vote for this determination took place on April 6, 2022.
The authority for the Commission's determination is contained in section 337 of the Tariff Act of 1930, as amended (19 U.S.C. 1337), and in part 210 of the Commission's Rules of Practice and Procedure (19 CFR part 210).
By order of the Commission.
United States International Trade Commission.
Notice.
The Commission hereby gives notice of the scheduling of expedited reviews pursuant to the Tariff Act of 1930 (“the Act”) to determine whether revocation of the antidumping and countervailing duty orders on iron construction castings from Brazil, Canada, and China would be likely to lead to continuation or recurrence of material injury within a reasonably foreseeable time.
March 7, 2022.
Nitin Joshi (202-708-1669), Office of Investigations, U.S. International Trade Commission, 500 E Street SW, Washington, DC 20436. Hearing-impaired persons can obtain information on this matter by contacting the Commission's TDD terminal on 202-205-1810. Persons with mobility impairments who will need special assistance in gaining access to the Commission should contact the Office of the Secretary at 202-205-2000. General information concerning the Commission may also be obtained by accessing its internet server (
For further information concerning the conduct of these reviews and rules of general application, consult the Commission's Rules of Practice and Procedure, part 201, subparts A and B (19 CFR part 201), and part 207, subparts A, D, E, and F (19 CFR part 207).
Please note the Secretary's Office will accept only electronic filings at this time. Filings must be made through the Commission's Electronic Document Information System (EDIS,
In accordance with sections 201.16(c) and 207.3 of the rules, each document filed by a party to the reviews must be served on all other parties to the reviews (as identified by either the public or BPI service list), and a certificate of service must be timely filed. The Secretary will not accept a document for filing without a certificate of service.
By order of the Commission.
On July 8, 2021, a former Assistant Administrator, Diversion Control Division, Drug Enforcement Administration (hereinafter, Government), issued an Order to Show Cause (hereinafter, OSC) to Jennifer Smith, M.D. (hereinafter, Registrant) of New Hartford, New York. OSC, at 1 and 3. The OSC proposed the revocation of Registrant's Certificate of Registration No. FS0290875.
Specifically, the OSC alleged that on January 28, 2021, the New York State Board for Professional Medical Conduct (hereinafter, the Board) issued a Determination and Order revoking Registrant's New York medical license, effective February 5, 2021.
The OSC notified Registrant of the right to request a hearing on the allegations or to submit a written statement, while waiving the right to a hearing, the procedures for electing each option, and the consequences for failing to elect either option.
In a Declaration dated December 21, 2021, a Diversion Investigator (hereinafter, the DI) assigned to the Syracuse Resident Office of DEA's New York Field Division stated that on or about July 28, 2021, DEA sent a copy of the OSC to Registrant via certified mail, return receipt requested, and on or about July 31, 2021, Registrant herself signed the return receipt for the OSC. Request for Final Agency Action (hereinafter, RFAA) Exhibit (hereinafter, RFAAX) 3 (DI's Declaration), at 1;
The Government forwarded its RFAA, along with the evidentiary record, to this office on January 26, 2022. In its RFAA, the Government represents that neither Registrant nor any attorney representing Registrant has requested a hearing or submitted a written statement. RFAA, at 2; RFAAX 3, at 2. The Government requests that Registrant's DEA registration be revoked and that any applications for any other DEA registrations by Registrant be denied based on Registrant's lack of authority to handle controlled substances in New York, the state in which she is registered with the DEA. RFAA, at 5.
Based on the DI's Declaration, the Government's written representations, and my review of the record, I find that the Government accomplished service of the OSC on Registrant on or about July 31, 2021. I also find that more than thirty days have now passed since the Government accomplished service of the OSC. Further, based on the DI's Declaration, the Government's written representations, and my review of the record, I find that neither Registrant, nor anyone purporting to represent Registrant, requested a hearing, submitted a written statement while waiving Registrant's right to a hearing, or submitted a corrective action plan. Accordingly, I find that Registrant has waived the right to a hearing and the right to submit a written statement and corrective action plan. 21 CFR 1301.43(d) and 21 U.S.C. 824(c)(2)(C). I, therefore, issue this Decision and Order based on the record submitted by the Government, which constitutes the entire record before me. 21 CFR 1301.43(e).
Registrant is the holder of DEA Certificate of Registration No. FS0290875 at the registered address of 3985 Oneida Street, Suite 204, New Hartford, New York 13413. RFAAX 1 (Certificate of Registration). Pursuant to this registration, Registrant is authorized to dispense controlled substances in schedules IIN, IIIN,
On October 16, 2020, the New York State Board for Professional Medical Conduct (hereinafter, the Board) issued a Statement of Charges against
According to New York's online records, of which I take official notice, Registrant's New York medical license is still revoked.
Pursuant to 21 U.S.C. 824(a)(3), the Attorney General is authorized to suspend or revoke a registration issued under section 823 of the Controlled Substances Act (hereinafter, CSA) “upon a finding that the registrant . . . has had his State license or registration suspended . . . [or] revoked . . . by competent State authority and is no longer authorized by State law to engage in the . . . dispensing of controlled substances.” With respect to a practitioner, the DEA has also long held that the possession of authority to dispense controlled substances under the laws of the state in which a practitioner engages in professional practice is a fundamental condition for obtaining and maintaining a practitioner's registration.
This rule derives from the text of two provisions of the CSA. First, Congress defined the term “practitioner” to mean “a physician . . . or other person licensed, registered, or otherwise permitted, by . . . the jurisdiction in which he practices . . ., to distribute, dispense, . . . [or] administer . . . a controlled substance in the course of professional practice.” 21 U.S.C. 802(21). Second, in setting the requirements for obtaining a practitioner's registration, Congress directed that “[t]he Attorney General shall register practitioners . . . if the applicant is authorized to dispense . . . controlled substances under the laws of the State in which he practices.” 21 U.S.C. 823(f). Because Congress has clearly mandated that a practitioner possess state authority in order to be deemed a practitioner under the CSA, the DEA has held repeatedly that revocation of a practitioner's registration is the appropriate sanction whenever he is no longer authorized to dispense controlled substances under the laws of the state in which he practices.
According to the New York Controlled Substances Act (hereinafter, the Act), “[i]t shall be unlawful for any person to manufacture, sell, prescribe, distribute, dispense, administer, possess, have under his control, abandon, or transport a controlled substance except as expressly allowed by this article.” N.Y. Pub. Health Law § 3304 (McKinney 2022). Further, the Act defines a “practitioner” as “[a] physician . . . or other person licensed, or otherwise permitted to dispense, administer or conduct research with respect to a controlled substance in the course of a licensed professional practice . . . .”
Here, the undisputed evidence in the record is that Registrant currently lacks authority to practice medicine in New York. As already discussed, a physician must be a licensed practitioner to dispense a controlled substance in New York. Thus, because Registrant lacks authority to practice medicine in New York and, therefore, is not authorized to handle controlled substances in New York, Registrant is not eligible to maintain a DEA registration. Accordingly, I will order that Registrant's DEA registration be revoked.
Pursuant to 28 CFR 0.100(b) and the authority vested in me by 21 U.S.C. 824(a), I hereby revoke DEA Certificate of Registration No. FS0290875 issued to Jennifer Smith, M.D. Further, pursuant to 28 CFR 0.100(b) and the authority vested in me by 21 U.S.C. 823(f), I hereby deny any pending application of
On May 26, 2021, a former Assistant Administrator, Diversion Control Division, of the Drug Enforcement Administration (hereinafter, DEA or Government), issued an Order to Show Cause (hereinafter, OSC) to Gilbert Y. Kim, D.D.S. (hereinafter, Respondent) of Oakland Gardens, New York. Administrative Law Judge Exhibit (hereinafter, ALJX) 1 (OSC), at 1 and 3. The OSC proposed the denial of Respondent's application for DEA Certificate of Registration No. W20055916C (hereinafter, COR or registration) and the denial of any applications for any other DEA registrations pursuant to 21 U.S.C. 824(a)(5) because Respondent has been excluded from participation in Medicare, Medicaid, and all federal health care programs pursuant to 42 U.S.C. 1320a-7(a).
On June 7, 2021, Respondent timely requested a hearing, which commenced (and ended) on August 17, 2021, at the DEA Hearing Facility in Arlington, Virginia with the parties, counsel, and witnesses participating via video teleconference (VTC). On October 12, 2021, Administrative Law Judge Teresa A. Wallbaum (hereinafter, the ALJ) issued her Recommended Rulings, Findings of Fact, Conclusions of Law, and Decision of the Administrative Law Judge (hereinafter, Recommended Decision or RD). By letter dated November 8, 2021, the ALJ certified and transmitted the record to me for final Agency action. In the letter, the ALJ advised that neither party filed exceptions. Having reviewed the entire record, I adopt the ALJ's rulings, findings of fact, as modified, conclusions of law, and recommended sanction with minor modifications, where noted herein.*
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The ultimate issue in these proceedings is whether Respondent's application should be denied pursuant to 21 U.S.C. 823 and 824(a)(5) based upon his exclusion from participation in Medicare, Medicaid, and all federal health care programs pursuant to 42 U.S.C. 1320a-7(a). After carefully considering the testimony elicited at the hearing, the admitted exhibits, the arguments of counsel, and the record as a whole, I have set forth my recommended findings of fact and conclusions of law below.
The Government alleges that the denial of Respondent's application is supported by incontrovertible record evidence that he has been excluded from participation in Medicare, Medicaid, and all federal health care programs. ALJ Ex. 1 at 1. Specifically, the Government alleges that judgment was entered against Respondent in the United States District Court for the Eastern District of New York (the District Court) after pleading guilty to one count of Conspiracy to Commit Health Care Fraud in violation of 18 U.S.C. 1349.
The parties mutually agreed upon the following stipulations, and they were conclusively accepted as fact in the proceedings:
1. On or about June 9, 2020, Respondent applied to DEA for registration as a practitioner in Schedules II through V with a proposed registered address of 22902 Horace Harding Expressway, Fl. 2, Oakland Gardens, New York 11364.
2. Respondent's Application was assigned Control Number W20055916C.
3. Respondent was previously registered with DEA as a practitioner under DEA Certificate of Registration No. AK2569284.
4. DEA Certificate of Registration No. AK2569284 was surrendered for cause on or about August 15, 2018.
5. On or about May 12, 2014, judgment was entered against Respondent in the United States District Court for the Eastern District of New York based on his conviction on one count of “Conspiracy to Commit Health Care Fraud,” in violation of 18 U.S.C. 1349.
6. By letter dated August 29, 2014, the U.S. Department of Health and Human Services, Office of Inspector General (HHS/OIG), mandatorily excluded Respondent from participation in Medicare, Medicaid, and all federal health care programs pursuant to 42 U.S.C. 1320a-7(a).
7. Respondent's exclusion under 42 U.S.C. 1320a-7(a) was effective on September 18, 2014, and runs for a period of ten years.
8. Respondent is currently excluded from participation in a program pursuant to 42 U.S.C. 1320a-7(a).
9. By letter dated March 23, 2020, the Office of Professional Discipline of the New York State Education Department informed Respondent that he may resume the practice of Dentistry in the State of New York no earlier than March 29, 2020.
The Government's case-in-chief consisted of the testimony of a single witness, a DEA Diversion Group Supervisor (hereinafter, the GS). The GS testified that her duty station is the New York Field Division, located in New York City, where she has served in her capacity as a Group Supervisor for approximately one year. Tr. 24-25. Before the GS became a Group Supervisor, she was a Diversion Investigator for approximately six-and-a-half years.
Respondent came to the GS's attention when a Diversion Investigator under her supervision was assigned his application for DEA registration.
The GS testified that, on June 16, 2021, she ran a new search on a web page of the HHS/OIG and confirmed through that search that Respondent was excluded from Medicare, Medicaid, and all federal health care programs. Gov. Ex. 7; Tr. 38-39. The GS again searched the database the morning before her testimony and confirmed that Respondent was still excluded from Medicare, Medicaid, and all federal health care programs. Tr. 39.
The GS presented as an objective investigator, with no discernable motive to mislead, fabricate, or exaggerate. The testimony of this witness was primarily focused on the uncontroversial and unopposed introduction of documentary evidence and her contact with this case.
Respondent, proceeding
Respondent testified that prior to 2014, he had no criminal convictions.
Respondent admitted that he pleaded guilty to one count of Conspiracy to Commit Health Care Fraud in violation of 18 U.S.C. 1349.
According to Respondent's own exhibits from his criminal case, Respondent was a manager in the conspiracy. Prior to Respondent's sentencing, he was described as “an active manager at the clinics with deep involvement in the planning and execution of the scheme.” Resp't Ex. 3 at 4.
During these administrative proceedings, Respondent's description of the events behind his conviction was unclear and, at times, internally inconsistent and inconsistent with his own exhibits. Respondent stated that he had to help his father with the clinic, so he assisted with signing checks for rent and electrical bills, while also contributing his own money to keep the business solvent. Tr. 60-62;
While acknowledging his guilty plea, Respondent nonetheless denied any direct role in the conspiracy. Rather, when asked about his culpability, he responded: “I don't know what conspiracy meant, but I think I was a—you know, I hear it, what's going on. I didn't stop them.”
When asked whether he was “present during management meetings where the scheme was discussed,” Respondent answered: “I have to say no, little bit yes.”
Respondent pleaded guilty to health care fraud involving luring Medicare beneficiaries to the clinics for massages, facials, lunches, dancing classes, and other services, inducing those beneficiaries to provide their Medicare numbers, and billing Medicare for services that were not provided or medically necessary (Gov. Ex. 4 at 5); however, at the hearing, Respondent defined the fraud as narrowly involving a decision to save money by not hiring enough physical therapists to justify the treatment. Tr. 63-67. He testified that he tried to convince his family members to do the billing correctly but they refused.
Respondent repeatedly explained that he pleaded guilty because of his family.
On cross-examination, Respondent admitted that he failed to disclose that the New York State Dental Board placed him on probation in 1993 on two of his DEA applications for registration.
Additionally, Respondent admitted that he did not object to being classified as a manager in his PSR and during his sentencing hearing.
According to Respondent, he has been practicing dentistry part-time and seeing many pro-bono patients since his dentistry license was reinstated in March 2020. Tr. 77. While he acknowledged that it is possible to continue practicing without a DEA registration, he compared it to sending a solider to war without any bullets.
As for remedial measures, Respondent testified that his wife and family are not involved in his dental practice since they were “the biggest issue.” Tr. 101. He is the sole manager and is “in total control” of the finances and billing practices.
The Government opposes Respondent's COR application on the ground that he has been excluded from participating in Medicare, Medicaid, and all federal health care programs. ALJ Ex. 1 at 1. *
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Accordingly, when considering an application for a registration, I will
Pursuant to section 303(f) of the Controlled Substances Act (hereinafter, CSA), “[t]he Attorney General shall register practitioners . . . to dispense . . . controlled substances . . . if the applicant is authorized to dispense . . . controlled substances under the laws of the State in which he practices.” 21 U.S.C. 823(f). Section 303(f) further provides that an application for a practitioner's registration may be denied upon a determination that “the issuance of such registration . . . would be inconsistent with the public interest.”
(1) The recommendation of the appropriate State licensing board or professional disciplinary authority.
(2) The applicant's experience in dispensing, or conducting research with respect to controlled substances.
(3) The applicant's conviction record under Federal or State laws relating to the manufacture, distribution, or dispensing of controlled substances.
(4) Compliance with applicable State, Federal, or local laws relating to controlled substances.
(5) Such other conduct which may threaten the public health and safety.
In this case, it is undisputed that Respondent holds a valid state dentistry license and is authorized to dispense controlled substances in the State of New York where he practices.
Because the Government has not alleged that Respondent's registration is inconsistent with the public interest under section 823, and although I have considered 823, I will not analyze Respondent's application under the public interest factors. Therefore, in accordance with prior agency decisions, I will move to assess whether the Government has proven by substantial evidence that a ground for revocation exists under 21 U.S.C. 824(a).
Regarding the revocation/suspension grounds alleged in the OSC, the CSA provides, in pertinent part: “A registration pursuant to section 824 of this title to . . . dispense a controlled substance . . . may be suspended or revoked by the Attorney General upon a finding that the registrant: . . . (5) has been excluded (or directed to be excluded) from participation in a program pursuant to section 1320a-7(a) of Title 42.” 21 U.S.C. 824(a)(5).]
The CSA grants the Agency discretion to [revoke a respondent's registration] if he “has been excluded (or directed to be excluded) from participation in a program pursuant to [42 U.S.C. 1320a-7(a)].” 21 U.S.C. 824(a)(5) (2012).
Specifically, subsection (a) of § 1320a-7, the part of the statute referenced by 21 U.S.C. 824(a)(5), dictates when HHS is required to exclude individuals or entities.
When DEA alleges that a practitioner has been mandatorily excluded from a federal health care program under 42 U.S.C. 1320a-7a, and thus seeks to impose a COR sanction, the Government bears the burden to prove that such an exclusion occurred.
In the instant case, it is undisputed that Respondent was excluded from participation in Medicare, Medicaid, and all federal health care programs under the mandatory authority of 42 U.S.C. 1320a-7a. Stip. 6; Gov. Ex. 6. Consequently, under § 824(a)(5), it is within the discretion of the Agency to determine, based on the entire record, [the consequence of] his exclusion from federal health care programs [on his registration or application for a registration].
Accordingly, in review of the evidence of record, including the stipulations of the parties, OSC Allegations 1, 2, and 3 are
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Because the Government has met its
“The degree of acceptance of responsibility that is required does not hinge on the respondent uttering `magic words' of repentance, but rather on whether the respondent has credibly and candidly demonstrated that he will not repeat the same behavior and endanger the public in a manner that instills confidence in the Administrator.”
In the instant case, Respondent's testimony was not candid on the key issue of culpability.
Nor, in his criminal proceedings, did Respondent object to the assertion in the PSR that he was a manager who
More generally, it is worth noting that, by pleading guilty, Respondent obtained a benefit of acceptance of responsibility and, ultimately, a sentence of one year of home confinement despite facing a Guideline Sentence of 63 to 78 months. Tr. 71; Resp't Ex. 4 at 9. His guilty plea in federal court saved him from significant prison time. In these proceedings, however, Respondent has attempted to distance himself from some of his admissions in the criminal proceedings—in particular, his failure to object to the PSR's description of him as a manager and active participant in the scheme. Tr. 110. Respondent's approach is inconsistent with acceptance of responsibility.
Indeed, throughout his testimony, Respondent had ample opportunity to take full and unequivocal responsibility for his misconduct. Yet repeatedly, when pressed on the details of his conviction, Respondent failed to do so and, instead, made excuses and blamed others. He portrayed himself as simply a good son who was only trying to help his family run the clinic and so he began signing checks. Tr. 52. He claimed that he tried to stop his family when he realized they were defrauding federal health care programs, but did little more than have a few conversations with his family members and then gave up when they failed to listen.
Thus, based on the evidence as detailed
Having concluded that Respondent has failed to prove an unequivocal acceptance of responsibility, I need not address remedial measures.
The burden is on Respondent to present sufficient evidence of his remedial measures.
Here, Respondent's only claimed remedial measure is that he no longer works with his family and he will handle his own billing as he practices dentistry. But this is not a remedial measure; it is a promise that Respondent will not work with his family. It is not a particularly persuasive promise given Respondent's emphasis that his wife and sister never listened to him and his past history—by his own admission—that he simply acquiesces to them.
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With respect to specific deterrence, Respondent failed in these proceedings to accept responsibility for his role in a four-year health care fraud conspiracy. He has minimized his responsibility,
Finally, this tribunal finds that Respondent's behavior was egregious. While Respondent did not divert controlled substances, defrauding federal health care programs is egregious.
Moreover, the Agency “relies heavily on a registrant's honesty and integrity `to complete its mission of preventing diversion within such a large regulated population.' ”
Accordingly, it is herein respectfully recommended that Respondent's application for a DEA registration be
Pursuant to 28 CFR 0.100(b) and the authority vested in me by 21 U.S.C. 824 and 823(f), I hereby deny the pending application for a Certificate of Registration, Control Number W20055916C, submitted by Gilbert Y. Kim, D.D.S. as well as any other pending application of Gilbert Y. Kim, D.D.S. for additional registration in New York. This Order is effective May 9, 2022.
On August 1, 2019, a former Acting Administrator of the Drug Enforcement Administration (hereinafter, DEA or Government), issued an Order to Show Cause and Immediate Suspension of Registration (hereinafter, OSC) to George Pharmacy, Inc. (hereinafter, Registrant) of Dayton Beach, Florida. Government's Request for Final Agency Action (hereinafter, RFAA) Exhibit 1 (OSC). The OSC informed Registrant of the immediate suspension of its DEA Certificate of Registration Number FG5612127 (hereinafter, registration or COR) and proposed its revocation, the denial of any pending applications for renewal or modification of such registration, and the denial of any pending applications for additional DEA registrations pursuant to 21 U.S.C. 824(a)(4) and 823(f), because Registrant's “continued registration is inconsistent with the public interest.”
The OSC notified Registrant of its right to request a hearing on the allegations or to submit a written statement while waiving its right to a hearing, the procedures for electing either option, and the consequence of failing to elect either option.
In response to the OSC, Registrant filed a timely request for an administrative hearing. RFAAX 3 (Request for Hearing). After both parties filed prehearing statements, and Registrant moved to continue the hearing, the Chief Administrative Law Judge (hereinafter, Chief ALJ), set a hearing date of December 17, 2019, in Arlington, Virginia. RFAAX 4. On December 12, 2019, Registrant filed a motion to terminate proceedings, stating that Registrant “respectfully withdraws its prior request for hearing and desires that the administrative hearing presently scheduled be cancelled, and the proceedings terminated.” RFAAX 5. On the same day, the Chief ALJ granted Registrant's motion and cancelled the hearing. RFAAX 6.
On March 12, 2020, the Government forwarded an RFAA, along with the evidentiary record for this matter, to my office. Having considered the record in its entirety, I find that the record establishes, by substantial evidence, that Registrant committed acts rendering its continued registration inconsistent with the public interest. I further find that Registrant's conduct was egregious, and that Registrant's failure to respond to the Government's allegations weighs strongly against continuation of its registration. Accordingly, I conclude that the appropriate sanction is the revocation of Registrant's DEA registration.
Registrant was registered with DEA as a retail pharmacy in Schedules II through V under DEA registration number FG5612127, at the registered address of 948 Orange Avenue, Dayton Beach, Florida 32114-0000. RFAAX 8 (DEA Certificate of Registration). According to Agency records, this registration expired on February 28, 2019.
In its RFAA, the Government alleged that Registrant violated federal and state law by “fill[ing] prescriptions outside the usual course of professional practice and in violation of the minimum standard of care that governs the practice of pharmacy in the State of Florida.” RFAAX 1, at 3. Specifically, the Government alleged that for a three-year period from December 12, 2016, to March 26, 2019, Registrant repeatedly filled controlled substance prescriptions for numerous patients without addressing or resolving red flags of drug abuse or diversion.
To support this allegation, the Government submitted declarations of the DEA Diversion Investigator (hereinafter, DI)
DI's and GS's declarations summarize DEA's investigation, including DEA's onsite inspections, subpoena requests, and meetings with Registrant.
On October 31, 2018, GS, DI, and two additional DIs performed an onsite inspection of Registrant. RFAAX 9, at 1-3; RFAAX 10, at 1-2.
According to GS and DI, DEA warned Mr. Hanna that Registrant had been filling prescriptions for controlled substances in the face of obvious red flags of abuse and diversion.
On November 7, 2018, DEA served an administrative subpoena on Registrant for pharmacy records and patient profiles, including but not limited to due diligence documentation, prescriptions, electronic dispensing logs, and other files related to the dispensing of controlled substances for certain patients between November 1, 2015, and October 31, 2018. RFAAX 9, App'x B (November 2018 Administrative Subpoena). In approximately February 2019, DEA hired Dr. Thomas E. Hamilton as a pharmacy expert in this case.
On March 12, 2019, GS, DI, and another DI visited Registrant again and spoke with both Mrs. Khalil and Mr. Hanna. RFAAX 9, at 3-4; RFAAX 10, at 3. At this meeting, DI told Mrs. Khalil and Mr. Hanna that DEA had hired a Florida pharmacy expert to review prescriptions and patient profiles of some of Registrant's customers.
DI told Mr. Hanna and Mrs. Khalil that DEA was pursuing administrative action for the revocation of Registrant's COR and asked them to surrender Registrant's COR.
Upon reviewing Registrant's E-FORSCE report, DEA identified several additional customers whose prescriptions presented red flags of abuse and diversion, such as large cash payments and long distances traveled.
Dr. Hamilton is a doctor of pharmacy with 19 years of experience as a pharmacist. RFAAX 11, at 2, App'x A. He received his Doctor of Pharmacy from Nova Southeastern University in May 1999 and was licensed by the Florida Board of Pharmacy in August 1999.
Dr. Hamilton currently works as a full-time pharmacy manager with Publix Supermarkets and has worked for Publix for most of his career. RFAAX 11, at 1. His responsibilities include ensuring that the pharmacy follows all federal, state, and local regulations; overseeing the ordering and quality of inventory; reviewing patient records; reviewing prescriptions to ensure accuracy and identify possible interactions; and dispensing prescribed medications for patient care.
From February 2006 until April 2014, Dr. Hamilton was a pharmacy supervisor with Publix Supermarkets, where he was responsible for the operation of 40 pharmacies.
Dr. Hamilton opined that pharmacists have a corresponding responsibility to ensure that a prescription for a controlled substance is issued for a legitimate medical purpose by an individual practitioner acting in the usual course of professional practice.
Dr. Hamilton identified additional red flags that pharmacists must “address or resolve” prior to filling a prescription, including long distances traveled, cocktail medications, cash payments at inflated prices, inappropriate drug dosages and durations of treatment, and pattern prescribing.
Dr. Hamilton opined that patients traveling extremely long distances to obtain or fill their controlled substances prescriptions is a well-known red flag of abuse or diversion that Florida pharmacists must “address or resolve.”
Dr. Hamilton opined that another common red flag of abuse that Florida pharmacists must “address or resolve” is when a physician prescribes “cocktail medications.”
Dr. Hamilton opined that another red flag of abuse or diversion that Florida pharmacists must “address or resolve” is when patients are willing to pay inflated prices for their prescriptions with cash.
Dr. Hamilton opined that Florida pharmacists must review patient records and prescriptions for inappropriate drug dosages and durations of treatment before dispensing controlled substances.
Dr. Hamilton opined that Patients receiving prescriptions for immediate-release opioids, such as hydromorphone and oxycodone, for several months at a time is a red flag of abuse or diversion.
Dr. Hamilton opined that opiate-naive patients receiving more than 24 mg per day of hydromorphone (96 MME) or more than 80 mg per day of oxycodone (120 MME) is a red flag of abuse or diversion.
Dr. Hamilton opined that another common red flag of abuse or diversion that Florida pharmacists must address before filling is “pattern prescribing,” which refers to a physician who regularly prescribes common drugs of abuse or diversion in the same dosages and quantities to many patients sharing the same surnames and/or addresses, and uses the same diagnosis codes to justify these prescriptions.
Dr. Hamilton opined that the manner in which a Florida pharmacist addresses and resolves red flags of abuse or diversion must be documented on the prescription and/or in the patient's profile.
Dr. Hamilton reviewed prescriptions, patient profiles, and E-FORSCE reports for Registrant's customers J.Y., J.S., C.A., L.K., A.O., M.S., B.B., E.R., S.R., M.J., C.K., K.L., A.M., K.S., and L.S.
Registrant filled the following three prescriptions for J.Y. on six separate occasions from January 13, 2017, to June 30, 2017: (1) 112 tablets of hydromorphone 8 mg, (2) 28 tablets of morphine sulfate extended release (ER) 30 mg, and (3) 28 tablets of clonazepam 2 mg. RFAAX 9, at App'x H (Prescriptions for J.Y.);
Dr. Hamilton opined that it was a red flag that Registrant dispensed the widely-abused “Trinity” cocktail on each occasion specified above.
Dr. Hamilton did not see any evidence that Registrant addressed these red flags of abuse or diversion on J.Y.'s prescriptions or patient profile. RFAAX 11, at 7. Therefore, Dr. Hamilton opined that these prescriptions were filled outside the usual course of professional practice.
On 12 separate occasions between February 23, 2017, and June 1, 2018, Registrant filled prescriptions for J.S. for 90 tablets of oxycodone 30 mg. RFAAX 9, at App'x K (Prescriptions for J.S.);
Dr. Hamilton opined that J.S.'s prescriptions presented the red flags of cocktail medications and cash payments at inflated prices. RFAAX 11, at 7-8. Dr. Hamilton opined that it was a red flag that Registrant repeatedly filled prescriptions for J.S. for oxycodone-acetaminophen (an opioid) and carisoprodol (a muscle relaxant), even though J.S. was filling prescriptions for benzodiazepines at another pharmacy during the same timeframe.
Finally, on at least 11 occasions between November 30, 2017, and October 1, 2018, Registrant filled a range of 120 to 150 tablets of oxycodone-acetaminophen 10-325 mg for two patients with the same address and same surname, J.S. and L.S., within 14 days of each other. RFAAX 9, at App'x I, J, K, AV, AW, AX.
Dr. Hamilton did not find any evidence that Registrant addressed the red flags of abuse or diversion on J.S.'s prescriptions or patient profile.
Between April 3, 2017, and February 26, 2018, Registrant filled 11 prescriptions for C.A. for a range of 84 to 112 tablets of hydromorphone 8 mg. RFAAX 9, at App'x N (C.A.'s Prescriptions);
Dr. Hamilton opined that it was a red flag that C.A. traveled at least 107 miles roundtrip to obtain and fill her prescriptions.
Registrant filled 18 prescriptions for L.K. for a range of 112 to 126 tablets of hydromorphone 8 mg from January 9, 2017, to May 2, 2018. RFAAX 9, at App'x Q (L.K.'s Prescriptions);
Dr. Hamilton opined that it was a red flag that L.K. traveled at least 120 miles roundtrip to obtain and fill his prescriptions.
Dr. Hamilton did not see any evidence that Registrant addressed these red flags of abuse or diversion on L.K.'s prescriptions or patients profile.
On November 13, 2017, Registrant filled a prescription for A.O. for 112 tablets of oxycodone 30 mg. RFAAX 9, at App'x T (A.O.'s Prescriptions);
Between April 7, 2017, and December 15, 2017, Registrant filled 11 prescriptions for M.S. for a range of 60 to 112 tablets of hydromorphone 8 mg. RFAAX 9, at App'x W (M.S.'s Prescriptions);
Dr. Hamilton opined that it was a red flag that M.S. traveled at least 548 miles roundtrip to obtain and fill his prescriptions.
Dr. Hamilton did not see any evidence that Registrant addressed these red flags of abuse or diversion on M.S.'s prescriptions or patient profile.
Between November 7, 2018, and March 26, 2019, Registrant filled six prescriptions for B.B. for a range of 84 to 100 tablets of oxycodone 30 mg. RFAAX 9, at App'x Z (B.B.'s Prescriptions);
Dr. Hamilton opined that it was a red flag that B.B. traveled at least 101 miles roundtrip to obtain and fill his prescriptions.
Dr. Hamilton did not see any evidence that Registrant addressed these red flags of abuse or diversion on B.B.'s prescriptions or patient's profile.
Between November 20, 2018, and March 18, 2019, Registrant filled five prescriptions for E.R. for 70 tablets of oxycodone 30 mg. RFAAX 9, at App'x AC (E.R.'s Prescriptions);
Between November 2, 2018 and March 20, 2019, Registrant filled six prescriptions for S.R. for 100 tablets of hydromorphone 8 mg. RFAAX 9, at App'x AF (S.R.'s Prescriptions);
Between January 31, 2017, and December 6, 2017, Registrant filled 12 prescriptions for M.J. for 112 tablets of hydromorphone 8 mg. RFAAX 9, at App'x AI (M.J.'s Prescriptions);
Dr. Hamilton opined that it was a red flag that M.J. received a large quantity of the highest available strength of hydromorphone for at least ten months, which amounted to approximately 128 MME per day.
Dr. Hamilton did not see any evidence that Registrant addressed these red flags of abuse or diversion on M.J.'s prescriptions or patient's profile.
Between November 6, 2018, and March 1, 2019, Registrant filled five prescriptions for C.K. for 84 tablets of oxycodone 30 mg. RFAAX 9, at App'x AL (C.K.'s Prescriptions);
Between November 5, 2018, and March 25, 2019, Registrant filled six prescriptions for K.L. for 112 tablets of oxycodone 30 mg. RFAAX 9, at App'x AO (K.L.'s Prescriptions);
On November 1, 2017, Registrant filled a prescription for A.M. for 112 tablets of hydromorphone 8 mg, at a starting dosage of 32 mg of hydromorphone per day (128 MME). RFAAX 11, at 18; RFAAX 9, at App'x AR (A.M.'s Prescriptions);
Dr. Hamilton did not see any evidence that Registrant addressed this red flag of abuse or diversion on A.M.'s prescriptions or in A.M's patient's profile.
On September 21, 2017, Registrant filled a prescription for K.S. for 84 tablets of hydromorphone 8 mg, at a starting dosage of 32 mg of hydromorphone per day (128 MME). RFAAX 11, at 19; RFAAX 9, at App'x AU (K.S.'s Prescriptions);
As discussed in more detail above, on at least 11 occasions between November 30, 2017, and October 1, 2018, Registrant filled a range of 120 to 150 tablets of oxycodone-acetaminophen 10-325 mg for two patients with the same address and same last name, J.S. and L.S., within 14 days of each other. RFAAX 9, at App'x AX (L.S.'s Prescriptions), App'x AW (L.S.'s E-FORSCE Report), App'x AV (L.S.'s Patient Profile). On at least seven occasions, the prescriptions were issued on the same day.
Dr. Hamilton did not find any evidence that Registrant addressed this red flag on L.S.'s prescriptions or patient profile.
The Government alleged that Registrant's DEA registration should be revoked because Registrant committed acts that would render its registration inconsistent with the public interest as provided in 21 U.S.C. 823(f). The Government's case centers on Registrant's unlawful dispensing of controlled substances to 15 customers.
Under the Controlled Substances Act (hereinafter, the CSA), “[a] registration . . . to . . . dispense a controlled substance . . . may be suspended or revoked by the Attorney General upon a finding that the registrant . . . has committed such acts as would render his registration under section 823 of this title inconsistent with the public interest as determined under such section.” 21 U.S.C. 824(a)(4). In the case of a “practitioner,” which is defined in 21 U.S.C. 802(21) to include a pharmacy, Congress directed the Attorney General to consider the following factors in making the public interest determination:
(1) The recommendation of the appropriate State licensing board or professional disciplinary authority.
(2) The [registrant]'s experience in dispensing . . . controlled substances.
(3) The [registrant]'s conviction record under Federal or State laws relating to the . . . distribution[ ] or dispensing of controlled substances.
(4) Compliance with applicable State, Federal, or local laws relating to controlled substances.
(5) Such other conduct which may threaten the public health and safety.
According to Agency decisions, I “may rely on any one or a combination of factors and may give each factor the weight [I] deem[ ] appropriate in determining whether” to revoke a registration.
The Government has the burden of proving that the requirements for revocation of a DEA registration in 21 U.S.C. 824(a) are satisfied. 21 CFR 1301.44(e). When the Government has met its
In this matter, while I have considered all of the factors, the Government's evidence in support of its
In determining the public interest under Factors Two and Four, I consider evidence of Registrant's compliance (or non-compliance) with laws related to controlled substances and Registrant's experience dispensing controlled substances. The Government's case relies primarily on the actions of Registrant's dispensing pharmacists. Furthermore, the Agency “has consistently held that the registration of a pharmacy may be revoked as the result of the unlawful activity of the pharmacy's owners, majority shareholders, officers, managing pharmacist, or other key employee.”
The Government alleged that Registrant violated federal and state laws related to controlled substances by repeatedly dispensing controlled substances to 15 customers without addressing or resolving red flags of drug abuse and diversion. OSC, at 2-3 (citing violations of 21 CFR 1306.06 and 1306.04(a); and Fla. Admin. Code. r. 64B16-27.800, 64B16-27.810, and 64B16-27.831).
According to the CSA's implementing regulations, a lawful controlled substance order or prescription is one that is “issued for a legitimate medical purpose by an individual practitioner acting in the usual course of his professional practice.” 21 CFR 1306.04(a). While the “responsibility for the proper prescribing and dispensing of controlled substances is upon the prescribing practitioner, . . . a corresponding responsibility rests with the pharmacist who fills the prescription.”
An order purporting to be a prescription issued not in the usual course of professional treatment . . . is not a prescription within the meaning and intent of . . . 21 U.S.C. 829 . . . and the person knowingly filling such a purported prescription, as well as the person issuing it, shall be subject to the penalties provided for violations of the provisions of law relating to controlled substances.
To prove that a pharmacist violated his corresponding responsibility, the Government must show that the pharmacist acted with the requisite degree of scienter.
In this case, I find that the Government has proven through Dr. Hamilton's unrebutted expert opinion that Registrant repeatedly filled prescriptions for controlled substances that presented obvious red flags of abuse or diversion, in violation of its corresponding responsibility under 21 CFR 1306.04(a), and outside the usual course of the professional practice of pharmacy in Florida, in violation of 21 CFR 1306.06. Registrant's customers traveled round-trip distances of up to 580 miles, paid enormous cash sums of up to $1,294, and presented prescriptions for high dosages and dangerous combinations of controlled substances, such as the “Trinity” cocktail, whose pharmacological effect is similar to heroin.
Registrant's flagrant violations of federal law weigh strongly against a finding that Registrant's continued registration is consistent with the public interest.
In addition to alleging that Registrant violated 21 CFR 1306.04(a) and 1306.06, the Government alleges that Registrant violated Florida State law by: (1) Failing to “exercis[e] sound professional judgment” and “work with the patient and the prescriber to assist in determining the validity of the prescription”;
I find that the Government has provided substantial evidence that Registrant violated these state laws by dispensing controlled substances to the 15 customers outlined above without documenting any attempt to address or resolve the numerous red flags with these prescriptions. The records clearly do not support a finding that Registrant “exercise[d] sound professional judgment” or “work[ed] with the patient and the prescriber to assist in determining the validity of the prescription,” as required by Fla. Admin. Code. r. 64B16-27.831. Instead, Registrant repeatedly dispensed controlled substances to 15 customers without documenting any attempt to address or resolve the blatant red flags with these prescriptions, such as patients traveling extreme distances and paying enormous cash sums.
In light of Registrant's repeated failure to address or resolve blatant red flags of abuse or diversion, I conclude that Factors Two and Four overwhelmingly demonstrate that Registrant “has committed such acts as would render [its] registration . . . inconsistent with the public interest.” 21 U.S.C. 824(a)(4). I further conclude that Registrant has not rebutted the Government's
Where, as here, the Government has met its
The CSA authorizes the Attorney General to “promulgate and enforce any rules, regulations, and procedures which he may deem necessary and appropriate for the efficient execution of his functions under this subchapter.” 21 U.S.C. 871(b). This authority specifically relates “to `registration' and `control,' and `for the efficient execution of his functions' under the statute.”
Here the Registrant did not avail itself of the opportunity to refute the Government's case. In light of Registrant's egregious violations, which go to the heart of the CSA's purpose of “prevent[ing] addiction and recreational abuse” of controlled substances,
Accordingly, I find that the factors weigh in favor of revocation, and I shall order the sanctions that the Government requested, as contained in the Order below.
Pursuant to 28 CFR 0.100(b) and the authority vested in me by 21 U.S.C. 824(a) and 21 U.S.C. 823(f), I hereby revoke DEA Certificate of Registration No. FG5612127 issued to George Pharmacy, Inc. Pursuant to 28 CFR 0.100(b) and the authority vested in me by 21 U.S.C. 824(a) and 21 U.S.C. 823(f), I further hereby deny any pending applications for renewal or modification of this registration, as well as any other pending application of George Pharmacy for additional registration in Florida. Pursuant to the authority vested in me by 21 U.S.C. 824(f), as well as 28 CFR 0.100(b), I further order that any controlled substances seized pursuant to the Order of Immediate Suspension of Registration are forfeited to the United States. This Order is effective May 11, 2022.
On December 2, 2021, a former Acting Assistant Administrator, Diversion Control Division, Drug Enforcement Administration (hereinafter, Government), issued an Order to Show Cause (hereinafter, OSC) to Kirk A. Hopkins, M.D. (hereinafter, Registrant) of Chicago, Illinois. Request for Final Agency Action (hereinafter, RFAA), Exhibit (hereinafter RFAAX) 2 (OSC), at 1 and 3. The OSC proposed the revocation of Registrant's Certificate of Registration No. BH9069205.
Specifically, the OSC alleged that on December 10, 2020, the Illinois Department of Financial and Professional Regulation entered an Order, effective December 24, 2020, indefinitely suspending Registrant's state medical license after finding that Registrant “had been convicted of wire fraud, in violation of 18 U.S.C. 1343, as a result of a scheme [he] conducted to defraud Medicare and Medicaid.”
The OSC notified Registrant of the right to request a hearing on the allegations or to submit a written statement, while waiving the right to a hearing, the procedures for electing each option, and the consequences for failing to elect either option.
In a Declaration dated March 8, 2022, a Diversion Investigator (hereinafter, the DI) assigned to the Chicago Field Division stated that on December 9, 2021, she sent a copy of the OSC via certified mail to Registrant at the address where he is presently incarcerated. RFAAX 3, at 1-2. The DI stated that on December 15, 2021, DEA received a signed return receipt indicating that the OSC had been delivered.
The Government forwarded its RFAA, along with the evidentiary record, to this office on March 15, 2022. In its RFAA, the Government represents that neither Registrant nor any attorney representing Registrant has requested a hearing or submitted a written statement. RFAA, at 2;
Based on the DI's Declaration, the Government's written representations, and my review of the record, I find that the Government accomplished service of the OSC on Registrant on or before December 16, 2021. I also find that more than thirty days have now passed since the Government accomplished service of the OSC. Further, based on the DI's Declaration, the Government's written representations, and my review of the record, I find that neither Registrant, nor anyone purporting to represent the Registrant, requested a hearing, submitted a written statement while waiving Registrant's right to a hearing, or submitted a corrective action plan. Accordingly, I find that Registrant has waived the right to a hearing and the right to submit a written statement and corrective action plan. 21 CFR 1301.43(d) and 21 U.S.C. 824(c)(2)(C). I, therefore, issue this Decision and Order based on the record submitted by the Government, which constitutes the entire record before me. 21 CFR 1301.43(e).
Registrant is the holder of DEA Certificate of Registration No. BH9069205 at the registered address of 4426 S King Drive, Chicago, Illinois 60653. RFAAX 1 (DEA Certificate of Registration). Pursuant to this registration, Registrant is authorized to dispense controlled substances in schedules II through V as a practitioner.
On June 17, 2020, Registrant entered into a Plea Agreement in the United States District Court for the Northern District of Illinois, Eastern Division, in which Registrant agreed to enter a voluntary plea of guilty to two counts of wire fraud. RFAAX 3, App. A, at 7-8 and 24. By entering into the Plea Agreement, Registrant admitted that “[b]eginning in or around 2008, and continuing through in or around May 2014 . . . [he] knowingly devised, intended to devise, and participated in a scheme to defraud and to obtain money from Medicare and Medicaid by means of materially false and fraudulent pretenses, representations[,] and promises.”
As the Plea Agreement details, Registrant owned and controlled a facility that “purported to provide psychotherapy services to Medicaid and Medicare beneficiaries [who] were bused from group and nursing homes to the clinic to participate in a day program.”
Moreover, Registrant “also paid, and caused his employees to pay, cash to certain beneficiaries in order to entice them to attend the day program” when “[i]n reality, rather than receive psychotherapy services[,] the participants of the day program were placed in a large holding room to watch television and, on occasion, received group therapy from unsupervised and often-unlicensed counselors.”
In addition, Registrant “also purportedly provided psychotherapy services to Medicare and Medicaid beneficiaries residing at nursing home facilities” and “submitted, and caused to be submitted, false claims to Medicaid or Medicare for payment for services purportedly rendered to such nursing home residents when, in fact, [Registrant] had not provided the services because [he] was traveling [outside of Illinois] or the beneficiaries were themselves unavailable to have received the purported services because they were admitted into a hospital facility or deceased.”
Finally, Registrant “also offered and paid renumeration, including kickbacks and bribes” to induce individuals, including employees of “Healthcare Facility A,” to refer residents who were insured by Medicare or Medicaid to Registrant for psychotherapy treatment at either Registrant's facility or at Healthcare Facility A.
On October 7, 2020, a Judgment was entered by the United States District Court for the Northern District of Illinois, Eastern District, after Registrant pleaded guilty to two counts of “Fraud By Wire, Radio, Or Television.”
On October 9, 2020, the Illinois Department of Financial and Professional Regulation (hereinafter, the Department) issued to Registrant a Notice of Intent to Issue Indefinite Suspension Order in which the Department stated its intent to “issue an order indefinitely suspending [Registrant's] license as an Illinois Physician and Surgeon” following Registrant's guilty plea and conviction.
According to Illinois online records, of which I take official notice, Registrant's state medical license is still suspended.
Accordingly, I find that Registrant is not currently licensed to engage in the practice of medicine nor registered to dispense controlled substances in Illinois, the state in which he is registered with the DEA.
Pursuant to 21 U.S.C. 824(a)(3), the Attorney General is authorized to suspend or revoke a registration issued under section 823 of the Controlled Substances Act (hereinafter, CSA) “upon a finding that the registrant . . . has had his State license or registration suspended . . . [or] revoked . . . by competent State authority and is no longer authorized by State law to engage in the . . . dispensing of controlled substances.” With respect to a practitioner, the DEA has also long held that the possession of authority to dispense controlled substances under the laws of the state in which a practitioner engages in professional practice is a fundamental condition for obtaining and maintaining a practitioner's registration.
This rule derives from the text of two provisions of the CSA. First, Congress defined the term “practitioner” to mean “a physician . . . or other person licensed, registered, or otherwise permitted, by . . . the jurisdiction in which he practices . . . , to distribute, dispense, . . . [or] administer . . . a controlled substance in the course of professional practice.” 21 U.S.C. 802(21). Second, in setting the requirements for obtaining a practitioner's registration, Congress directed that “[t]he Attorney General shall register practitioners . . . if the applicant is authorized to dispense . . . controlled substances under the laws of the State in which he practices.” 21 U.S.C. 823(f). Because Congress has clearly mandated that a practitioner possess state authority in order to be deemed a practitioner under the CSA, the DEA has held repeatedly that revocation of a practitioner's registration is the appropriate sanction whenever he is no longer authorized to dispense controlled substances under the laws of the state in which he practices.
Pursuant to the Illinois Controlled Substances Act, a “practitioner” means “a physician licensed to practice medicine in all its branches . . . or other person licensed, registered, or otherwise lawfully permitted by the United States or this State to distribute, dispense, conduct research with respect to, administer or use in teaching or chemical analysis, a controlled substance in the course of professional practice or research.” 720 Ill. Comp. Stat. Ann. 570/102(kk) (West 2022). Further, the Illinois Controlled Substances Act requires that “[e]very person who manufactures, distributes, or dispenses any controlled substances . . . must obtain a registration issued by the Department of Financial and Professional Regulation in accordance with its rules.”
Here, the undisputed evidence in the record is that Registrant currently lacks authority to handle controlled substances in Illinois as his Illinois medical license is suspended and his Illinois controlled substance license is inoperative. As already discussed, a practitioner must hold a valid controlled substance license to dispense a controlled substance in Illinois. Thus, because Registrant lacks authority to handle controlled substances in Illinois, Registrant is not eligible to maintain a DEA registration. Accordingly, I order that Registrant's DEA registration be revoked.
Pursuant to 28 CFR 0.100(b) and the authority vested in me by 21 U.S.C. 824(a), I hereby revoke DEA Certificate of Registration No. BH9069205 issued to Kirk A. Hopkins, M.D. Further, pursuant to 28 CFR 0.100(b) and the authority vested in me by 21 U.S.C. 823(f), I hereby deny any pending application of Kirk A. Hopkins, M.D. to renew or modify this registration, as well as any other pending application of Kirk A. Hopkins, M.D. for additional registration in Illinois. This Order is effective May 11, 2022.
On June 4, 2020, the former Assistant Administrator, Diversion Control Division, Drug Enforcement Administration (hereinafter, DEA or Government), issued an Order to Show Cause (hereinafter, OSC) to Kareem Hubbard, M.D. (hereinafter, Applicant) of San Leandro, California. Request for Final Agency Action (hereinafter, RFAA) Exhibit (hereinafter RFAAX) 2 (OSC), at 1 and 12. The OSC proposed to deny Applicant's application for a DEA Certificate of Registration, as well as to deny any applications for any other registrations, pursuant to 21 U.S.C. 824(a)(1) and (4) because Applicant “materially falsified [his] application” and because “[Applicant's] registration is inconsistent with the public interest, as that term is defined in 21 U.S.C. 823(f).”
The OSC alleged that Applicant's application contained a materially false statement in which Applicant failed to disclose his previous surrender for cause of his DEA registration.
The OSC notified Applicant of the right to request a hearing on the allegations or to submit a written statement, while waiving the right to a hearing, the procedures for electing each option, and the consequences for failing to elect either option.
By letter dated July 23, 2020, Applicant requested a hearing through counsel. RFAAX 3 (Request for Hearing), at 1. In his Request for Hearing, Applicant requested that his application for DEA registration be granted, because “he applied for it in good faith and did not believe his surrender of [his] previous certificate was `for cause.' ”
On September 23, 2020, the Government forwarded its RFAA, along with the evidentiary record for this matter, to my office. The Government seeks a final order of denial of Applicant's application for DEA registration because Applicant “materially falsified his application under 21 U.S.C. 824(a)(1), and committed acts which render his continued registration inconsistent with the public interest” under 21 U.S.C. 824(a)(4) and 823(f). RFAA, at 1. I issue this Decision and Order after considering the entire record before me, 21 CFR 1301.43(e); and I make the following findings of fact.
On or about April 8, 2019, Applicant applied for a DEA Certificate of Registration as a practitioner in Schedules II through V with a proposed registered address of 15035 E 14th St., San Leandro, CA 94578. RFAAX 1 (Certification of Non Registration), at 1. Applicant's application was assigned Control No. W19032408C and is in a “new pending” status.
According to a DEA Group Supervisor (hereinafter, the GS 1) in the San Jose Resident Office of the San Francisco Field Division assigned to investigate Applicant, “DEA began investigating [Applicant] in 2018 after receiving information that he had prescribed large quantities of controlled substances.” RFAAX 8 (GS's Declaration), at 1. GS stated that in early 2019, “DEA reviewed [Applicant's] report from CURES, California's Prescription Data Monitoring Program” and “identified several red flags of abuse or diversion in [Applicant's] controlled substance prescribing, such as patients traveling long distances and receiving drug cocktails, among other red flags.”
A DEA Diversion Investigator (hereinafter, the DI) assigned to investigate Applicant's application found that Applicant voluntarily surrendered for cause his previous DEA Certificate of Registration Control No. FH4334037 on February 21, 2019. RFAAX 7 (DI's Declaration), at 2. The DI also found that Applicant “did not previously possess a DATA (Drug Addiction Treatment Act)[ ] Waiver number, which authorizes registrants to prescribe controlled substances for maintenance or detoxification treatment.”
Additionally, the DI obtained Applicant's 2017-2019 report from the CURES database to review Applicant's controlled substance prescribing from 2017-2019.
The DEA hired Dr. Timothy Munzing, M.D. to opine on Applicant's controlled substance prescribing based on the CURES report and the patient files described above.
Dr. Munzing was retained as an expert to determine whether or not Applicant's prescribing was “consistent with the usual course of professional practice, as required under 21 CFR 1306.04(a), and with California law.”
Dr. Munzing attested that various state laws and regulations, as well as two guidelines published by the Medical Board of California, informed his opinion as to California's standard of care for the practice of medicine, particularly with respect to the prescribing of controlled substances for pain.
Dr. Munzing opined that, as informed by the above statutes and guidelines, the California standard of care requires that before prescribing controlled substances, at minimum, a practitioner must:
(1) “obtain a medical history and perform an appropriate physical examination”;
(2) “assess the patients' pain, physical and psychological functions, substance abuse history, and history of prior pain treatment (such as reviewing past medical records, laboratory studies, and imaging studies to establish a diagnosis and medical necessity)”;
(3) “assess any underlying or coexisting diseases or conditions and order and perform diagnostic testing if necessary”;
(4) “discuss the risks and benefits of using controlled substances and any other treatment modalities (such as non-opioid therapeutic options)”;
(5) “periodically review the course of pain treatment or gather any new information, if any, about the etiology of a patient's state of health”;
(6) “give special attention to patients who, by their own words and actions, pose a risk for medication misuse and/or diversion”;
(7) “maintain accurate and complete records”; and
(8) “document the presence of a recognized medical indication for the use of a controlled substance.”
(1) “[o]pioids prescribed at Morphine Milligram Equivalent (`MME') dosages above 90 mg per day significantly increase a patient's risk of overdose and death”;
(2) practitioners must “carefully adjust, as well as closely monitor, patients who are prescribed MME dosages above 90 MME a day—a dangerously high dosage of opioids”;
(3) “required monitoring when high-dosage opioids are prescribed include[s]: Periodic and close evaluations or examinations to determine the appropriateness of high-dosage opioids or [the consideration of] non-opioid alternatives; frequent and periodic review of a patient's report from [CURES]; and periodic urine drug screens”;
(4) MME dosages above 90 mg per day should be avoided or carefully justified;
(5) “[t]he FDA requires `Black Box' warnings about combining benzodiazepines with opioids” because “taking benzodiazepines with opioids can cause profound sedation, respiratory depression, coma, and death”;
(6) “the combination of opioids and benzodiazepines should be avoided except in limited circumstances given the heightened risk of overdose and death when opioids and benzodiazepines are taken in combination”;
(7) “[t]he combination of oxycodone, a benzodiazepine, and the muscle relaxant carisoprodol, is a dangerous drug cocktail known as the `Holy Trinity' ”;
(8) “[t]he `Holy Trinity' cocktail, as well as the combination of an opioid and a benzodiazepine, are both red flags of abuse or diversion”; and
(9) “[t]he `Holy Trinity' cocktail, in particular, is a combination of drugs that is popular among the drug-abusing community.”
(1) “[p]atients willing to travel long distances to see a physician to obtain controlled substances is a red flag of abuse or diversion” and physicians must address or resolve this red flag;
(2) “[p]eriodic urine drug screening is part of a physician's duty to perform ongoing monitoring of patients prescribed controlled substances” and physicians prescribing controlled substances must “address or resolve inconsistent urine drug screen results, which are red flags of abuse or diversion”;
(3) “[i]nconsistent urine drug screen results that must be addressed or resolved are: (1) Positive results for non-prescribed controlled substances; and (2) negative results for prescribed controlled substances”;
(4) “[e]ven should a physician address or resolve an inconsistent urine drug screen result,” the physician must “proceed to closely monitor the patient, which may include additional and more frequent urine drug screens”; and
(5) “[p]atients with a history or pattern of obtaining or requesting early refills is a red flag of abuse or diversion” and physicians must address or resolve this red flag.
Having read and analyzed all of the record evidence and law, I find that Dr. Munzing's declaration concerning a California physician's standard of care when prescribing controlled substances is supported by substantial evidence and is consistent with the explicit text of California law as well as state and federal guidelines. As such, I apply the standard of care of the state of California as described by Dr. Munzing.
From May 1, 2017, to February 21, 2019, and on an approximately monthly basis, Applicant prescribed Patient L.C. various opioids including oxycodone, hydrocodone-acetaminophen, Nucynta, Belbuca (buprenorphine), and hydromorphone, which Dr. Munzing calculated to amount to at least 420 mg MME per day. RFAAX 9, at 8;
Additionally, Dr. Munzing concluded, based upon his review of Patient L.C.'s file, that “[Applicant] frequently prescribed to Patient L.C. either (1) a combination of opioids and the
Finally, Dr. Munzing concluded, based upon his review of Patient L.C.'s file, that Applicant failed to address several red flags of abuse or diversion.
On an approximately monthly basis, Applicant prescribed Patient P.B. various opioids including OxyContin, oxycodone, Nucynta, and levorphanol tartrate, which Dr. Munzing calculated to amount to at least 840 mg MME per day. RFAAX 9, at 11;
Finally, Dr. Munzing concluded, based upon his review of Patient P.B.'s file, that Applicant failed to address several red flags of abuse or diversion.
On an approximately monthly basis, Applicant prescribed Patient S.N. various opioids including OxyContin, oxycodone, and Xtampza, which Dr. Munzing calculated to amount to at least 405 mg and 885 mg MME per day. RFAAX 9, at 14;
Additionally, Dr. Munzing concluded, based upon his review of Patient S.N.'s file, that Applicant failed to address several red flags of abuse or diversion.
On an approximately monthly basis, Applicant prescribed Patient J.H. various opioids including oxycodone, oxycodone-acetaminophen, OxyContin, and fentanyl, which Dr. Munzing calculated to amount to at least 1,350 mg MME per day. RFAAX 9, at 15;
Dr. Munzing also concluded, based upon his review of Patient J.H.'s file, that “[Applicant] frequently prescribed Patient J.H. the `Holy Trinity' cocktail, which consists of an opioid; a benzodiazepine, such as alprazolam . . . and carisoprodol . . . without performing adequate evaluation or monitoring to medically justify this combination.”
Finally, Dr. Munzing concluded, based upon his review of Patient J.H.'s file, that Applicant failed to address or resolve several red flags of abuse or diversion.
Based on his expert medical opinion, Dr. Munzing concluded, and I agree, that “the controlled substance[ ] prescriptions issued by [Applicant] for Patients L.C., P.B., S.N., and J.H. between May 1, 2017, and February 21, 2019[,] were issued without a legitimate medical purpose and were issued beneath the standard of care for the practice of medicine in the State of California, and therefore outside of the usual course of professional practice.”
In its RFAA, the Government sought denial of Applicant's application for DEA registration because Applicant “materially falsified his application under 21 U.S.C. 824(a)(1), and committed acts which render [granting his] registration inconsistent with the public interest.” RFAA, at 1 (citing 21 U.S.C. 824(a)(1), (a)(4) and 823(f). Specifically, the Government argued that Applicant had materially falsified his application when he falsely provided a “No” response to the liability question asking him whether he had ever surrendered for cause a federal controlled substance registration and when he knew or should have known that his “No” response was false.
Within his Request for Hearing and his Corrective Action Plan, both submitted in response to the OSC, Applicant offered explanation as to his misconduct, however, Applicant did not offer supporting evidence nor any ability for me to assess the credibility of his unsworn statements.
In both his Request for Hearing and his Corrective Action Plan, Applicant offered a “historical perspective” regarding the improper prescribing allegations. RFAAX 3, at 3-5; RFAAX 4, at 5. According to Applicant, in 2018, he “acquired a medical practice from anesthesiologist/pain medicine specialist [M. J.], a frequent prescriber of schedule II and III medications.” RFAAX 4, at 5. Applicant stated that prior to considering the purchase of M. J.'s practice, and before working with him, Applicant “discussed with him his patient population” and “ [a] contract was drawn up ensuring that all [M. J.] was doing was within state and deferral [sic] laws.” RFAAX 3, at 3. Applicant stated that he and M. J. agreed that M. J. would continue to work with Applicant for the first year and then turn the practice over to Applicant.
According to Applicant, upon his evaluation of the patients, he realized that “many patients were not getting the proper workups, diagnostic studies[,] and referrals needed to improve their pain.”
According to Applicant, in April 2019, he was the victim of a cyber crime when ransomware was placed onto his servers and corrupted all of his electronic medical records.
Regarding Patient L.C., Applicant stated that her medications had been escalated prior to her becoming Applicant's patient.
Regarding Patient P.B., Applicant stated that her medications had been escalated prior to her becoming Applicant's patient.
Regarding Patient S.N., Applicant stated that his medications had also been escalated prior to him becoming Applicant's patient.
Finally, regarding Patient J.H., Applicant stated that his medications too had been escalated prior to him becoming Applicant's patient.
Applicant concluded his Request for Hearing by asserting that his patients “had been taught that issues that could have normally been mitigated by appropriate treatment were instead only able to be addressed with high levels of medication” and that “[t]he belief had been ingrained that medications were the only option.”
In his Corrective Action Plan, Applicant stated, “Given my training in physical medicine and rehabilitation, my focus was to taper his patients from high dose opioids and offer them an array of alternative treatment options.” RFAAX 4, at 5. According to Applicant, “[o]n February 23, 2019, in the midst of this process, DEA officers presented to the clinic and requested that [he] surrender [his] DEA license” to which Applicant “voluntarily complied.”
Applicant stated that he “proceeded to close the practice, and after full disclosure, [he has] been evaluating and treating patients at RehabOne Medical Group, Inc.”
Applicant concluded his Corrective Action Plan by stating that “[m]oving forward, [he plans] to strictly adhere to these practices and principles as [he strives] to help [his] patients lead full and meaningful lives.”
Pursuant to section 303(f) of the Controlled Substances Act (hereinafter, CSA), “[t]he Attorney General shall register practitioners . . . to dispense . . . controlled substances . . . if the applicant is authorized to dispense . . . controlled substances under the laws of the State in which he practices.” 21 U.S.C. 823(f). Section 303(f) further provides that an application for a practitioner's registration may be denied upon a determination that “the issuance of such registration . . . would be inconsistent with the public interest.”
(1) The recommendation of the appropriate State licensing board or professional disciplinary authority.
(2) The applicant's experience in dispensing, or conducting research with respect to controlled substances.
(3) The applicant's conviction record under Federal or State laws relating to the manufacture, distribution, or dispensing of controlled substances.
(4) Compliance with applicable State, Federal, or local laws relating to controlled substances.
(5) Such other conduct which may threaten the public health and safety.
The DEA considers these public interest factors in the disjunctive.
The Government does not dispute that Applicant holds a valid state medical license and is authorized to dispense controlled substances in the State of California where he practices.
As to Factor Three, there is no evidence in the record that Applicant has been convicted of an offense under either federal or state law “relating to the manufacture, distribution, or dispensing of controlled substances.” 21 U.S.C. 823(f)(3). However, as Agency cases have noted, there are a number of reasons why a person who has engaged in criminal misconduct may never have been convicted of an offense under this factor, let alone prosecuted for one.
As to Factor Five, the Government's evidence fits squarely within the parameters of Factors Two and Four and does not raise “other conduct which may threaten the public health and safety.” 21 U.S.C. 823(f)(5). Accordingly, Factor Five does not weigh for or against Applicant.
Evidence is considered under Public Interest Factors Two and Four when it reflects compliance (or non-compliance) with laws related to controlled substances and experience dispensing controlled substances. Established violations of the CSA, DEA regulations, or other laws regulating controlled substances at the state or local level are cognizable when considering whether granting a registration is consistent with the public interest.
Here, the Government has alleged that from at least May 1, 2017, through at least February 21, 2019, Applicant unlawfully issued prescriptions for controlled substances in violation of the CSA. RFAAX 2 (OSC), at 2 and 4-10. Specifically, the Government alleges that Applicant repeatedly violated 21 CFR 1306.4(a) by issuing prescriptions for controlled substances to Patients L.C., P.B., S.N., and J.H. beneath the standard of care and outside the usual course of professional practice in California—the state in which Applicant is applying for DEA registration.
According to the CSA's implementing regulations, a lawful controlled substance order or prescription is one that is “issued for a legitimate medical purpose by an individual practitioner acting in the usual course of his professional practice.” 21 CFR 1306.04(a). The Supreme Court has stated, in the context of the CSA's requirement that schedule II controlled substances may be dispensed only by written prescription, that “the prescription requirement . . . ensures patients use controlled substances under the supervision of a doctor so as to prevent addiction and recreational abuse . . . [and] also bars doctors from peddling to patients who crave the drugs for those prohibited uses.”
I found above that the Government's expert credibly declared, as supported by California law and federal and state guidelines, that the standard of care in California requires physicians to, among other things, perform a sufficient physical exam and take a medical history, counsel patients on the risks and benefits of the use of particular controlled substances, periodically review the course of treatment and adjust as needed, give special attention to patients who pose a risk for medication misuse and diversion, and monitor and address any red flags of abuse or diversion. Further, the standard of care in California requires additional care and consideration for the prescribing of opioids, as well as for the prescribing of benzodiazepines in combination with opioids.
Based on the credible and unrebutted opinion of the Government's expert, I found above that Applicant issued a high number of controlled substance prescriptions to at least four different patients, often for extremely high doses of opioids and in dangerous combinations of opioids and benzodiazepines, without performing detailed examinations or evaluations, dependably considering non-opioid alternatives, reliably weaning patients off such high dosages, or resolving or documenting resolution of red flags of abuse and/or diversion as required by the standard of care.
The Government has also alleged that Applicant's prescribing practices in regard to the subject patients violated California State law. RFAAX 2, at 2-3 and 4-10. Echoing the federal regulations, California law requires that a “prescription for a controlled substance shall only be issued for a medical purpose by an individual practitioner acting in the usual course of his or her professional practice.” Cal. Health & Safety Code § 11153(a).
In sum, I find that the record contains substantial evidence that Applicant issued a multitude of prescriptions for controlled substances, including high dosages of opioids, to multiple patients beneath the applicable standard of care, outside the usual course of professional practice, and in violation of federal and state law. I, therefore, find that Factors Two and Four weigh in favor of denial of Applicant's application and thus find Applicant's registration to be inconsistent with the public interest in balancing the factors of 21 U.S.C. 823(f).
In addition to the public interest allegations, as previously mentioned, the OSC in this matter also alleges that Applicant's application for registration should be denied, because Applicant's application contains a materially false response to a liability question. RFAAX 2, at 1 and 3-4;
Having read and analyzed all of the record evidence, I find from clear, unequivocal, convincing, and unrebutted record evidence that Applicant surrendered (for cause) his previous DEA registration on February 21, 2019.
The Government has established grounds to deny a registration; therefore, I will review any evidence and argument that Applicant submitted to determine whether or not Applicant has presented “sufficient mitigating evidence to assure the Administrator that [he] can be trusted with the responsibility carried by such a registration.”
As previously discussed, although Applicant initially requested a hearing and submitted a Corrective Action Plan on July 23, 2020, Applicant later withdrew his hearing request on August 14, 2020, and the proceedings were terminated.
As to the allegations of material falsification, Applicant claimed that, at the time he surrendered his DEA certificate for cause, he misunderstood that he was doing so and believed instead that he was “demonstrating good faith that [he] had done nothing wrong.”
As to the allegations of improper prescribing, Applicant claimed that he had inherited the subject patients from his purchase of another physician's practice and that the physician he had purchased the practice from had assured him that all was proper regarding the practice and his patients. RFAAX 3, at 3; RFAAX 4, at 5. However, Applicant claimed that he only later realized that all was
As for remedial measures, I do not consider them when an Applicant has not unequivocally accepted responsibility, however, even if I were to consider Applicant's remedial measures here, I do not find them to be sufficient. Applicant discussed how since surrendering his DEA registration, he has closed his practice and has begun treating patients at another practice, one which he lauds for its adherence to best practices for prescribing controlled substances. RFAAX 4, at 5. Applicant also stated his own commitment to adhering to these best practices moving forward, however, Applicant did not specify in what ways he would ensure this adherence.
In addition to acceptance of responsibility, the Agency considers both specific and general deterrence when determining an appropriate sanction.
The Agency also looks to the egregiousness and the extent of the misconduct as significant factors in determining the appropriate sanction.
As discussed above, to be granted a registration when grounds for denial
Pursuant to 28 CFR 0.100(b) and the authority vested in me by 21 U.S.C. 823(f) and 21 U.S.C. 824(a), I hereby deny the pending application for a Certificate of Registration, Control Number W19032408C, submitted by Kareem Hubbard, M.D., as well as any other pending application of Kareem Hubbard, M.D. for additional registration in California. This Order is effective May 11, 2022.
On March 9, 2020, a former Assistant Administrator, Diversion Control Division, of the Drug Enforcement Administration (hereinafter, DEA or Government), issued an Order to Show Cause (hereinafter, OSC) to Noah David, P.A. (hereinafter, Respondent) of Richmond, Virginia. Administrative Law Judge Exhibit (hereinafter, ALJX) 1 (OSC), at 1. The OSC proposed the revocation of Respondent's DEA Certificate of Registration No. MD3130717 (hereinafter, COR or registration) and the denial of “any pending application for renewal or modification of such registration and any applications for any other DEA registrations, pursuant to 21 U.S.C. 824(a)(4), because [Respondent's] registration is inconsistent with the public interest, as that term is defined in 21 U.S.C. 823(f).”
On April 7, 2020, the Respondent timely requested a hearing, which commenced (and ended) on September 22, 2020, at the DEA Hearing Facility in Arlington, Virginia with the parties, counsel, and witnesses participating via video teleconference (VTC). On December 8, 2020, Chief Administrative Law Judge John J. Mulrooney, II (hereinafter, the Chief ALJ) issued his Recommended Rulings, Findings of Fact, Conclusions of Law and Decision of the Administrative Law Judge (hereinafter, Recommended Decision or RD). By letter dated January 5, 2021, the ALJ certified and transmitted the record to me for final Agency action. In that letter, the ALJ advised that neither party filed exceptions. Having reviewed the entire record, I adopt the ALJ's rulings, findings of fact, as modified, conclusions of law and recommended sanction with minor modifications, where noted herein.*
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The Government alleges that the Respondent's COR should be revoked because he has committed acts which render his continued registration against the public interest. ALJX 1, at 1. Specifically, the Government contends that on numerous occasions between April 2014 and November 2018, the Respondent unlawfully prescribed controlled substances to his wife without establishing a
The parties entered into a robust set of factual stipulations which were accepted by the tribunal. Accordingly, the following factual matters are deemed conclusively established in this case:
1. The Respondent is registered with the DEA as a practitioner to handle controlled substances in Schedules II-V under DEA COR No. MD3130717 at 5211 West Broad Street, Suite 101, Richmond, Virginia 23230-3000.
2. DEA COR No. MD3130717 was issued on May 15, 2019 and expires by its own terms on June 30, 2022.
3. The Respondent is presently licensed as a physician assistant in Virginia under License No. 0110004505, which expires April 30, 2021.
4. Respondent Exhibit 1 is a true and correct copy of the Respondent's COR.
5. The Respondent prescribed the following controlled substances on the following dates to his wife, B.D.:
6. The Respondent acted outside the usual course of professional practice in Virginia by issuing controlled substance prescriptions to his wife without establishing a bona fide practitioner-patient relationship and by failing to perform comprehensive examinations.
7. The Respondent acted outside the usual course of professional practice in Virginia by issuing controlled substance prescriptions to his wife without properly documenting the treatment of his wife.
8. The Respondent received prescriptions for controlled substances from L.K., P.A. on February 15, 2018, December 3, 2018, and December 4, 2018.
9. The Respondent received a prescription for a controlled substance from J.A., P.A., on September 14, 2018.
10. Oxycodone is a Schedule II controlled substance pursuant to 21 CFR 1308.12(b)(1)(xiv) and Va. Code Ann. § 54.1-3448.
11. Hydrocodone is a Schedule II controlled substance pursuant to 21 CFR 1308.12(b)(1)(vi) and Va. Code Ann. § 54.1-3448.
12. On March 3, 2019, the Respondent completed the Professional Boundaries and Ethics Course—Extended Edition, a continuing medical education course conducted by the Professional Boundaries Institute (PBI).
13. Respondent Exhibit 2 is a true and correct copy of the Respondent's certificate of completion for the PBI Professional Boundaries and Ethics Course—Extended Edition continuing medical education course.
14. The Respondent completed a PBI Maintenance and Accountability Seminars continuing medical education course of July 11, 2019.
15. Respondent Exhibit 3 is a true and correct copy of the Respondent's certificate of completion for the PBI Maintenance and Accountability Seminars continuing medical education course.
16. The Respondent completed a VCU Health's Safe Opiate Prescribing continuing medical education course on January 1, 2019.
17. Respondent Exhibit 4 is a true and correct copy of the Respondent's certificate of completion for VCU Health's Safe Opiate Prescribing continuing medical education course.
The Government's case consisted of testimony from a diversion investigator assigned to the case that yielded these proceedings and a senior investigator from the Virginia Department of Health Professions.
The Government presented the testimony of Diversion Investigator RP. (hereinafter, the DI). The DI testified that he has been a DI for approximately seven years and is currently stationed at the Richmond field office. Tr. 11-12. The DI's testimony narrated the course of the investigation and authenticated a number of Government Exhibits.
The DI testified that he worked with Task Force Officer C.E. (hereinafter, the TFO) in the investigation into the Respondent, a physician assistant (PA).
In investigating the Respondent's prescribing history, the DI generated a report from the Prescription Monitoring Program (PMP) regarding the Respondent's prescribing.
In addition to a brief encounter with the Respondent, the DI interviewed three individuals: The pharmacist who filed the initial complaint with DHP; a PA coworker of the Respondent, R.K.; and a supervising physician at Radiology Associates of Richmond (RAR), the radiology practice where the Respondent was employed during the events that form the basis of this case.
The pharmacist told the DI that she noticed that the Respondent was receiving controlled substance prescriptions from colleagues, and that he was writing prescriptions to his wife under her married and maiden name.
During his interview, the supervising physician, who supervised the Respondent towards the end of the Respondent's time at RAR, told the DI that the Respondent “received training on issuing legitimate prescriptions.”
The DI presented as an objective regulator and investigator with no discernable motive to fabricate or exaggerate. The testimony of this witness was sufficiently detailed, plausible, and internally consistent to be afforded full credibility in this case.
The Government also presented testimony from DHP Senior Investigator K.L. (hereinafter, the DHP SI). The DHP SI testified that she has been a senior investigator with DHP
The Respondent came to the attention of DHP when the previously-mentioned pharmacist filed a formal complaint on or around December 2018 and the DHP SI was assigned to conduct the investigation.
According to the DHP SI, the PA colleagues confirmed that “they did not conduct any type of exam on [the Respondent] and [that] they did not document any of their assessments on him when they provided the prescriptions that he personally requested them to write.”
The DHP SI's investigation culminated in a report for the Virginia Board of Medicine that reflected that the Respondent wrote controlled substance prescriptions to his wife with no corroborating records, and that the Respondent received controlled substance prescriptions from his PA colleagues with no corroborating records.
Like the DI, the DHP SI presented as an objective regulator and investigator with no discernable motive to fabricate or exaggerate. The testimony of this witness was sufficiently detailed, plausible, and internally consistent to be afforded full credibility in this case.
The Respondent's affirmative case at the hearing consisted exclusively of his own testimony. The Respondent testified that he received his Bachelor of Arts degree in Biology from Lewis & Clark College in 2003, followed by a Master's degree in Physician Assistant Studies from James Madison University in 2013. Tr. 87. He has been a licensed physician assistant in Virginia since 2014.
In March 2015, the Respondent began working for RAR in Richmond, Virginia, where he specialized in interventional radiology.
In April 2019, the Respondent secured employment at Alliance Physical Therapy, a physical therapy clinic.
In addressing the allegations brought by the Government, the Respondent admitted to improperly prescribing controlled substances to his wife and offered testimony to potentially help clarify the surrounding circumstances. In 2012, when the Respondent noticed that his wife (B.D.) had developed a severe limp after running, and upon his insistence, his wife consulted an orthopedist.
The Respondent openly admitted that the controlled substance prescriptions he wrote to his wife between April 2014 and November 2018 were unlawful, unethical, unprofessional, wrong, and not valid, and that he even knew it was wrong at the time.
I mean, it was really a matter of convenience. I saw her quality of life improve. And it just snowballed because of convenience. And through the years of doing it, my anxiety was—got worse and worse.
Counsel for the Respondent read through Allegations 8-11 from the OSC, asking for each whether the Respondent understood the allegation and whether the Respondent agreed with the allegation.
The Respondent also admitted to improperly receiving controlled substance prescriptions from his PA colleagues. It is the Respondent's recollection that he first approached R.K. for a controlled substance prescription after he underwent hand surgery and his treating surgeon denied him pain medication.
The Respondent testified that in the wake of the allegations against him, he took three continuing medical education (CME) courses to improve his practice. RX 2-4; Tr. 117-119, 127-28. He completed an in-person, thirty-four hour professional boundaries course on March 1 through March 3, 2019. RX 2; Tr. at 118. The Respondent testified that the course taught him about “getting in the habit of saying no” as foundational for operating within professional boundaries. Tr. at 118. The Respondent also testified that he participated in a twelve-week telephonic-contact course on maintenance and accountability that was completed on July 11, 2019 (Phone Follow-up Exercise). RX 3; Tr. at 122-23. The Phone Follow-up Exercise was an extension of the first and consistent of twelve one-hour weekly seminars conducted via telephone. Tr. at 122-23. The Respondent explained that the Phone Follow-up Exercise afforded him the opportunity to express the remorse, embarrassment, and anger he felt over his actions, as well as share the tools he was developing to maintain professional boundaries (including taking a position at a practice with a non-narcotic policy, refusing a prescription pad, and having a habit of saying no).
The Respondent also testified that moving forward, he intends to comply with all laws regarding controlled substances and that he “will only prescribe when appropriate and only to patients when it's well documented and for an appropriate reason.” Tr. at 132. He acknowledged the severity of his repeated intentional acts, but also feels that this has only ever been a personal issue and that his misguidance has never lapsed over into affecting the public.
As is generally the case, the Respondent unarguably possesses the greatest interest in the outcome of these proceedings, and hence, the greatest motivation to enhance, modify, or even fabricate his testimony. While the Respondent's testimony was generally consistent, it was not always free from confusing aspects. He stated and admitted that he issued controlled substances to his wife for years knowing that it was wrong, and explained that he understood that it was unlawful, unprofessional, and wrong, which is information that he undoubtedly possessed while the misconduct was underway. The Respondent presented as a knowledgeable professional who, at all times relevant, understood the rules, but yet engaged in an extended course of conduct that he knew was unprofessional, illegal, and dangerous.
Other facts necessary for a disposition of this case are set forth in the balance of this Recommended Decision.
Under 21 U.S.C. 824(a)(4), the Agency may revoke the COR of a registrant if the registrant “has committed such acts as would render his registration . . . inconsistent with the public interest.” 21 U.S.C. 824(a)(4). Congress has circumscribed the definition of public interest in this context by directing consideration of the following factors:
(1) The recommendation of the appropriate State licensing board or professional disciplinary authority.
(2) The [registrant's] experience in dispensing, or conducting research with respect to controlled substances.
(3) The [registrant's] conviction record under Federal or State laws relating to the manufacture, distribution, or dispensing of controlled substances.
(4) Compliance with applicable State, Federal, or local laws relating to controlled substances.
(5) Such other conduct which may threaten the public health and safety. 21 U.S.C. 823(f).
“These factors are to be considered in the disjunctive.”
In adjudicating a revocation of a DEA COR, the DEA has the burden of proving that the requirements for the revocation it seeks are satisfied. 21 CFR 1301.44(e). Where the Government has met this burden by making a
Normal hardships to the registrant, and even to the surrounding community, which are attendant upon lack of registration, are not a relevant consideration.
Although the burden of proof at this administrative hearing is a preponderance-of-the-evidence standard,
Regarding the exercise of discretionary authority, the courts have recognized that gross deviations from past agency precedent must be adequately supported,
The Government has founded its theory for sanction exclusively on Public Interest Factors Two (the Respondent's experience conducting regulated activity) and Four (the Respondent's compliance with state and federal laws related to controlled substances), and it is under those two factors that the lion's share of the evidence of record relates.
Regarding Factor Two, the Respondent is a credentialed and experienced physician assistant who has been treating patients, in various capacities, for around six years. Tr. 90. Likewise, the evidence of record points to issues regarding controlled substance prescribing to his wife (B.D.) and himself; and there is no evidence of record that the Respondent has been the subject of discipline by state or federal authorities relative to his controlled substance prescribing to legitimate patients.*
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As discussed,
To effectuate the dual goals of conquering drug abuse and controlling both legitimate and illegitimate traffic in controlled substances, “Congress devised a closed regulatory system making it unlawful to manufacture, distribute, dispense, or possess any controlled substance except in a manner authorized by the [Controlled Substances Act (CSA)].”
The prescription requirement is designed to ensure that controlled substances are used under the supervision of a doctor, as a bulwark against the risk of addiction and recreational abuse.
“Under the CSA, it is fundamental that a practitioner must establish and maintain a [
The CSA authorizes the “regulat[ion of] medical practice so far as it bars doctors from using their prescription-writing powers as a means to engage in illicit drug dealing and trafficking as conventionally understood,”
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Here, the relevant provisions of Virginia state law largely mirror the CSA and its regulations where they do not go beyond it.
(i) Obtained or caused to be obtained a medical or drug history of the patient;
(ii) provided information to the patient about the benefits and risks of the drug being prescribed;
(iii) performed or caused to be performed an appropriate examination of the patient, either physically or by the use of instrumentation and diagnostic equipment through which images and medical records may be transmitted electronically; and
(iv) initiated additional interventions and follow-up care, if necessary, especially if a prescribed drug may have serious side effects.
Except in cases involving a medical emergency, the examination required pursuant to clause (iii) shall be performed by the practitioner prescribing the controlled substance, a practitioner who practices in the same group as the practitioner prescribing the controlled substance, or a consulting practitioner.
Further, the Virginia Administrative Code cites twenty-four separate categories of unprofessional conduct that can result in disciplinary action. Va. Admin. Code § 54.1-2915. Within these myriad categories, the state has prohibited: “[p]rescribing or dispensing any controlled substance with intent or knowledge that it will be used otherwise than medicinally, . . . or with intent to evade any law with respect to the sale, use, or disposition of such drug;”
In this case, the Respondent stipulated that he “acted outside the usual course of professional practice in Virginia by issuing controlled substance prescriptions to his wife (B.D.) without establishing a
Regarding the controlled substance prescriptions issued to the Respondent by his PA colleagues, the parties stipulated that the Respondent received controlled substance prescriptions from his PA colleagues on every date alleged in the OSC. Stips 8, 9. The Government's theory, in essence, is that by importuning his PA colleagues to write controlled substance prescriptions for his personal use, without routing the matter through the physicians who supervise those PA practitioners, the evidence sustains the gentle standard of “cooperating with others”
*
Inasmuch as the Respondent's state licensure and COR status are the subject of factual stipulations,
Thus, a balancing of Factors Two and Four militate strongly in favor of the imposition of the revocation sanction sought by the Government.
The evidence of record preponderantly establishes that the Respondent has committed acts which render his continued registration inconsistent with the public interest.
Agency decisions are clear that a respondent must “unequivocally admit fault” as opposed to a “generalized
On the issue of acceptance, although (as discussed,
*
Regarding the required demonstration of remedial measures aimed at the avoidance of recurrence, the Respondent (predictably) promised that he would foreswear prescribing to his wife, friends, and relatives, and would presumably no longer seek to importune colleagues to authorize the dispensing of powerful drugs for his personal use. Additionally, the Respondent completed a three-day professional boundaries course, participated in the Phone Follow-up Exercise, and took an opiate prescribing course. RX 2-4.*
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The issue here is appropriately resolved in the remaining guideposts of the Agency's analytical framework. In determining whether and to what extent imposing a sanction is appropriate, consideration must be given to the Agency's interest in both specific and general deterrence and the egregiousness of the offenses established by the Government's evidence.
Regarding general deterrence,] as the regulator in this field, the Agency bears the responsibility to deter similar misconduct on the part of others for the protection of the public at large.
Considerations of egregiousness likewise support revocation. The Respondent carried on prescribing for his wife (even during her pregnancy) for four-and-a-half years, which is a significant amount of time to carry on with conduct that a person knows is straight-up wrong. The prescribing was not a one-off, an act of momentary desperation, or a misguided accident borne of professional ignorance, and there was no eureka moment. Like pressing his advantage with the PA colleague he mentored, the Respondent's acts were consistently intentional. The intentional nature of the Respondent's acts undermines the ability of the Agency, at least at present, to have confidence that he will responsibly exercise the responsibilities of a DEA registrant.
Accordingly, it is respectfully recommended that the Respondent's DEA COR should be
Dated: December 8, 2020.
Pursuant to 28 CFR 0.100(b) and the authority vested in me by 21 U.S.C. 824(a)(4) and 21 U.S.C. 823(f), I hereby revoke DEA Certificate of Registration No. MD3130717 issued to Noah David, P.A. Further, pursuant to 28 CFR 0.100(b) and the authority vested in me by 21 U.S.C. 824(a) and 21 U.S.C. 823(f), I hereby deny any pending application of Noah David, P.A. to renew or modify this registration, as well as any other pending application of Noah David, P.A. for registration in Virginia. This Order is effective May 11, 2022.
On September 28, 2021, a former Acting Assistant Administrator, Diversion Control Division, Drug Enforcement Administration (hereinafter, Government), issued an Order to Show Cause (hereinafter, OSC) to Douglas A. Blose, M.D. (hereinafter, Registrant) of Downey, California. OSC, at 1 and 3. The OSC proposed the revocation of Registrant's Certificate of Registration No. AB2619510.
Specifically, the OSC alleged that on or about March 9, 2020, Registrant executed a Stipulated Surrender of License and Disciplinary Order, pursuant to which he surrendered his California medical license.
The OSC notified Registrant of the right to request a hearing on the allegations or to submit a written statement, while waiving the right to a hearing, the procedures for electing each option, and the consequences for failing to elect either option.
In a Declaration dated January 3, 2022, a Diversion Investigator (hereinafter, DI) assigned to the Los Angeles Field Division stated that on or about September 29, 2021, she sent a copy of the OSC by certified mail to Registrant's registered address. Request for Final Agency Action (hereinafter, RFAA), Exhibit (hereinafter, RFAAX) B (DI's Declaration), at 1-3. The DI stated that according to USPS tracking information, the copy of the OSC was delivered on or about October 1, 2021.
The Government forwarded its RFAA, along with the evidentiary record, to this office on January 26, 2022. In its RFAA, the Government represents that more than thirty days have passed since Registrant was served with the OSC and Registrant has not requested a hearing nor otherwise corresponded with DEA regarding the OSC. RFAA, at 2. The Government requests that Registrant's DEA registration be revoked based on his lack of authority to handle controlled substances in California, the state in which he is registered with the DEA.
Based on the DI's Declaration, the Government's written representations, and my review of the record, I find that the Government accomplished service of the OSC on Registrant on or before October 23, 2021. I also find that more than thirty days have now passed since the Government accomplished service of the OSC. Further, based on the DI's Declaration, the Government's written representations, and my review of the record, I find that neither Registrant, nor anyone purporting to represent Registrant, has requested a hearing, submitted a written statement while waiving Registrant's right to a hearing, or submitted a corrective action plan. Accordingly, I find that Registrant has waived his right to a hearing and his right to submit a written statement or corrective action plan. 21 CFR 1301.43(d) and 21 U.S.C. 824(c)(2)(C). I, therefore, issue this Decision and Order based on the record submitted by the Government, which constitutes the entire record before me. 21 CFR 1301.43(e).
Registrant is the holder of DEA Certificate of Registration No. AB2619510 at the registered address of 11525 Brookshire Avenue, Suite 101, Downey, California 90241. RFAAX B, at 1. Pursuant to this registration, Registrant is authorized to dispense controlled substances in schedules II through V as a practitioner.
On October 4, 2019, the Medical Board of California (hereinafter, the Board) issued an Accusation against Registrant alleging repeated negligent acts and failure to maintain adequate and accurate records throughout his treatment and care of six specific patients. RFAAX B-1, at 9-15. Further, according to the Accusation, “on or about September 27, 2019, in a prior disciplinary action . . . [Registrant's] license was revoked with revocation stayed for five (5) years of probation for self-prescribing of controlled substances and conviction of crimes substantially related to qualifications, functions, or duties of a physician and surgeon.”
According to California's online records, of which I take official notice, Registrant's medical license is still surrendered.
Pursuant to 21 U.S.C. 824(a)(3), the Attorney General is authorized to suspend or revoke a registration issued under section 823 of the Controlled Substances Act (hereinafter, CSA) “upon a finding that the registrant . . . has had his State license or registration suspended . . . [or] revoked . . . by competent State authority and is no longer authorized by State law to engage in the . . . dispensing of controlled substances.” With respect to a practitioner, the DEA has also long held that the possession of authority to dispense controlled substances under the laws of the state in which a practitioner engages in professional practice is a fundamental condition for obtaining and maintaining a practitioner's registration.
This rule derives from the text of two provisions of the CSA. First, Congress defined the term “practitioner” to mean “a physician . . . or other person licensed, registered, or otherwise permitted, by . . . the jurisdiction in which he practices . . . , to distribute, dispense, . . . [or] administer . . . a controlled substance in the course of professional practice.” 21 U.S.C. 802(21). Second, in setting the requirements for obtaining a practitioner's registration, Congress directed that “[t]he Attorney General shall register practitioners . . . if the applicant is authorized to dispense . . . controlled substances under the laws of the State in which he practices.” 21 U.S.C. 823(f). Because Congress has clearly mandated that a practitioner possess state authority in order to be deemed a practitioner under the CSA, the DEA has held repeatedly that revocation of a practitioner's registration is the appropriate sanction whenever he is no longer authorized to dispense controlled substances under the laws of the state in which he practices.
According to California statute, “dispense” means “to deliver a controlled substance to an ultimate user or research subject by or pursuant to the lawful order of a practitioner, including the prescribing, furnishing, packaging, labeling, or compounding necessary to prepare the substance for that delivery.” Cal. Health & Safety Code § 11010 (West, current with urgency legislation through Ch. 6 of 2022 Reg.Sess.). Further, a “practitioner” means a person “licensed, registered, or otherwise permitted, to distribute, dispense, conduct research with respect to, or administer, a controlled substance in the course of professional practice or research in this state.”
Here, the undisputed evidence in the record is that Registrant currently lacks authority to practice medicine in California. As discussed above, a physician must be a licensed practitioner to dispense a controlled substance in California. Thus, because Registrant lacks authority to practice medicine in California and, therefore, is not authorized to handle controlled substances in California, Registrant is not eligible to maintain a DEA registration. Accordingly, I will order that Registrant's DEA registration be revoked.
Pursuant to 28 CFR 0.100(b) and the authority vested in me by 21 U.S.C. 824(a), I hereby revoke DEA Certificate of Registration No. AB2619510 issued to Douglas A. Blose, M.D. Further, pursuant to 28 CFR 0.100(b) and the authority vested in me by 21 U.S.C. 823(f), I hereby deny any pending application of Douglas A. Blose, M.D. to renew or modify this registration, as well as any other pending application of Douglas A. Blose, M.D. for additional registration in California. This Order is effective May 11, 2022.
On August 21, 2019, a former Assistant Administrator of the Diversion Control Division of the Drug Enforcement Administration (hereinafter, Government) issued an
Specifically, the OSC alleged that Registrant, from at least 2012 through at least 2017, prescribed controlled substances to various patients that were not issued for a legitimate medical purpose, that were beneath the standard of care for the practice of medicine in the State of California, and that were not issued in the usual course of professional practice.
In response to the OSC, Registrant submitted a timely request for a hearing. RFAAX 3 (Request for Hearing for the OSC). The case was subsequently assigned to Administrative Law Judge (hereinafter, ALJ) Mark M. Dowd, who ordered that the Government file its prehearing statement by October 16, 2019, and that Registrant file his prehearing statement by November 1, 2019. RFAAX 4 (Order for Prehearing Statements). Registrant failed to file a prehearing statement by November 1, 2019. ALJ Dowd subsequently issued an order to show cause on November 8, 2019, providing Registrant until November 20, 2019, to file both a prehearing statement and a statement demonstrating good cause for failure to meet the original deadline.
On August 17, 2020, the Government forwarded its RFAA, along with the evidentiary record in this matter, to my office. The Government seeks a final order of revocation because Registrant has “committed acts that render his continued registration inconsistent with the public interest under 21 U.S.C. 824(a) and 823(f).” RFAA, at 3. I issue this Decision and Order after considering the entire record before me, 21 CFR 1301.43(e); and I make the following findings of fact.
Registrant is registered with DEA as a practitioner authorized to handle controlled substances in schedules II through V under DEA Certificate of Registration number BB0500365 at the registered address of 925 Bevins Court, Lakeport, California 95453. RFAAX 7 (Certificate of Registration). Registrant's registration expires by its terms on July 31, 2022.
On May 10, 2018, a DEA Diversion Investigator (hereinafter, the DI) served an administrative subpoena on Registrant for patient files reflecting Registrant's treatment of various patients. RFAAX 8 (Declaration of Diversion Investigator), App. A. Registrant provided copies of various patient files in response to DEA's subpoena, including patient files for Patients K.K., G.K., T.L., J.P., and Y.P. RFAAX 8, at 2 and Apps. B-F (Copies of patient files).
In furtherance of the DEA investigation of Registrant, the DI obtained information from the California Controlled Substance Utilization Review Evaluation System (CURES) database regarding Registrant's prescriptions to Patients K.K., G.K., T.L., J.P., and Y.P. for the period of 2012 through 2017.
The DEA hired Dr. Timothy A. Munzing to review Registrant's patient files for the patients under review and the CURES report showing Registrant's prescriptions to those patients for the period from 2012-2017.
Dr. Munzing's expert report “review[ed] the management of the five patients [K.K., G.K., T.L., J.P, and Y.P.] and opine[d] on the controlled substance prescriptions, specifically whether they were medically legitimate and in the usual course of professional practice.” RFAAX 9, App. B, at 4 (Munzing Report) (emphasis omitted). Dr. Munzing concluded, and I agree, that with regard to patients K.K., G.K., T.L., J.P., and Y.P., Registrant repeatedly issued controlled substance prescriptions without a legitimate medical purpose, outside the usual course of professional practice in the State of California, and “in violation of the minimum standard of care that governs California physicians with respect to the use of controlled substances in pain management.”
Dr. Munzing attested that several statutes inform the standard of care in California for the use of controlled substances in pain management. RFAAX 9, at ¶ 10. Among them, California Health and Safety Code 11153(a) requires that “[a] prescription for a controlled substance shall only be issued for a legitimate medical purpose by an individual practitioner acting in the usual course of his or her professional practice.” California Business and Professional Code 2241.5 permits California physicians to treat patients under their care for pain, including intractable pain, by prescribing controlled substances, but requires them to “exercise reasonable
Dr. Munzing opined that, as informed by the above statutes and the Guide, the California standard of care for the use of controlled substances in pain management requires, among other things, that a physician prescribing controlled substances:
“(1) perform a sufficient physical examination and take a medical history;
(2) make an assessment of the patient's pain, their physical and psychological function, and their history of prior pain treatment;
(3) make an assessment of any underlying or coexisting diseases or conditions and order and perform diagnostic testing if necessary;
(4) discuss with the patient the risks and benefits of the use of controlled substances or any other treatment modules;
(5) review periodically the course of pain treatment and gather any new information, if any, about the etiology of a patient's state of health; and
(6) give special attention to patients who, by their own words and actions, pose a risk for medication misuse and/or diversion.”
Second, a physician prescribing both opioids and benzodiazepines to a patient must exercise extra caution because both groups of drugs are respiratory depressants and simultaneous prescriptions can increase the patient's risk of overdose and death.
Third, a physician prescribing opioids for pain management must avoid issuing overlapping prescriptions with the same therapeutic effect, commonly referred to as therapeutic duplication.
Finally, Dr. Munzing opined that the California standard of care for the use of controlled substances in pain management requires physicians to be vigilant for the “red flags” of drug abuse or diversion of controlled substances.
Having read and analyzed all of the record evidence and law, I find that Dr. Munzing's declaration concerning a California physician's standard of care when prescribing controlled substances is supported by substantial evidence—in particular that it is consistent with the explicit text of California law, the Guide, and the Medical Board of California's 2014
Registrant issued at least 244 controlled substance prescriptions to Patient K.K. between January 2012 and November 2016, including prescriptions for methadone, morphine sulfate, oxycodone, oxycodone-acetaminophen, hydromorphone, and zolpidem tartrate. RFAAX 9, at ¶ 17;
After reviewing the prescriptions and Registrant's patient file for Patient K.K., Dr. Munzing noted several deficiencies and departures from the standard of care and usual course of professional practice with respect to Registrant's controlled substance prescriptions for K.K. RFAAX 9, at ¶ 17. First, Registrant repeatedly issued “dangerous levels of opioids” to Patient K.K., including daily morphine equivalent doses ranging from over 1,600 mg per day to as high as 3,780 mg per day, without monitoring the patient through checks of the CURES database or co-management by a specialist in pain management.
Finally, Patient K.K. presented red flags of drug abuse and diversion that Registrant failed to address or document.
Based on the above deficiencies, particularly the lack of an appropriate physical exam and medical history prior to Registrant's issuance of controlled substance prescriptions, Dr. Munzing found, and I agree, that the controlled substance prescriptions that Registrant issued to Patient K.K represent “an extreme departure” from the standard of care in California and were issued outside the usual course of professional practice.
Registrant issued at least 269 controlled substance prescriptions to Patient G.K. between January 2012 and July 2017, including prescriptions for hydrocodone-acetaminophen, hydromorphone, methadone, oxycodone, oxycodone-acetaminophen, temazepam, and tramadol. RFAAX 9, at ¶ 19;
After reviewing the prescriptions and Registrant's patient file for Patient G.K., Dr. Munzing noted several deficiencies and departures from the standard of care and usual course of professional practice with respect to Registrant's controlled substance prescriptions for G.K. RFAAX 9, at ¶ 19. Registrant repeatedly issued “dangerous levels of opioids” to Patient G.K., including daily morphine equivalent doses ranging from 600 mg per day to as high as 1,820 mg per day, without monitoring the patient through checks of the CURES database, co-management by a specialist in pain management, or discussing and documenting the discussion of the risks posed by the high levels of opioids prescribed.
Finally, Patient G.K. presented red flags of drug abuse and diversion that Registrant failed to address or document.
Based on the above deficiencies, particularly the lack of an appropriate physical exam and medical history prior to Registrant's issuance of controlled substance prescriptions, Dr. Munzing found, and I agree, that the controlled substance prescriptions that Registrant issued to Patient G.K represent “an extreme departure” from the standard of care in California and were issued outside the usual course of professional practice.
Registrant issued at least 120 controlled substance prescriptions to Patient T.L. between January 2012 and July 2017, including prescriptions for hydromorphone, methadone, and oxycodone. RFAAX 9 at ¶ 21;
After reviewing the prescriptions and Registrant's patient file for Patient T.L, Dr. Munzing noted several deficiencies and departures from the standard of care and usual course of professional practice with respect to Registrant's controlled substance prescriptions for T.L. RFAAX 9, at ¶ 21. First, Registrant repeatedly issued “dangerous levels of opioids” to Patient T.L., including daily morphine equivalent doses ranging from over 1,100 mg per day to as high as 2,380 mg per day.
Based on the above deficiencies, particularly the lack of an appropriate physical exam and medical history prior to Registrant's issuance of controlled substance prescriptions, Dr. Munzing found, and I agree, that the controlled substance prescriptions that Registrant issued to Patient T.L represent a departure from the standard of care in California and were issued outside the usual course of professional practice.
Registrant issued at least 409 controlled substance prescriptions to Patient J.P. between January 2012 and July 2017, including prescriptions for clonazepam, diazepam, fentanyl, hydrocodone-acetaminophen,
After reviewing the prescriptions and Registrant's patient file for Patient J.P., Dr. Munzing noted several deficiencies and departures from the standard of care and usual course of professional practice with respect to Registrant's controlled substance prescriptions for J.P. RFAAX 9, at ¶ 23. Registrant repeatedly issued “dangerous levels of opioids” to Patient J.P., including daily morphine equivalent doses ranging from 150 mg per day to as high as 2,460 mg per day, without monitoring the patient through checks of the CURES database or co-management by a specialist in pain management.
Finally, Patient J.P. presented red flags of drug abuse and diversion that Registrant failed to address or document.
Based on the above deficiencies, particularly the lack of an appropriate physical exam and medical history prior to Registrant's issuance of controlled substance prescriptions, Dr. Munzing found, and I agree, that the controlled substance prescriptions that Registrant issued to Patient J.P represent “an extreme departure” from the standard of care in California and were issued outside the usual course of professional practice.
Registrant issued at least 122 controlled substance prescriptions to Patient Y.P. between January 2012 and July 2017, including prescriptions for carisoprodol, diazepam, hydrocodone-acetaminophen, and oxycodone-acetaminophen. RFAAX 9, at ¶ 25;
After reviewing the prescriptions and Registrant's patient file for Patient Y.P., Dr. Munzing noted several deficiencies and departures from the standard of care and usual course of professional practice with respect to Registrant's controlled substance prescriptions for Y.P. RFAAX 9, at ¶ 25. Registrant concurrently prescribed Y.P. opioids and benzodiazepines without documenting the medical necessity for prescribing those controlled substances together or documenting any discussion with Y.P. regarding the risks of doing so.
Finally, Patient Y.P. presented red flags of drug abuse and diversion that Registrant failed to address or document.
Based on the above deficiencies, particularly the lack of an appropriate physical exam and medical history prior to Registrant's issuance of controlled substance prescriptions and the prescriptions for the “Trinity cocktail,” Dr. Munzing found, and I agree, that the controlled substance prescriptions that Registrant issued to Patient Y.P represent “an extreme departure” from the standard of care in California and were issued outside the usual course of professional practice.
Under Section 304 of the Controlled Substances Act (hereinafter, CSA), “[a] registration . . . to . . . dispense a controlled substance . . . may be suspended or revoked by the Attorney General upon a finding that the registrant . . . has committed such acts as would render his registration under section 823 of this title inconsistent with the public interest as determined by such section.” 21 U.S.C. 824(a)(4). In the case of a “practitioner,” defined in 21 U.S.C. 802(21) to include a “physician,” Congress directed the Attorney General to consider the following factors in making the public interest determination:
(1) The recommendation of the appropriate State licensing board or professional disciplinary authority.
(2) The applicant's experience in dispensing . . . controlled substances.
(3) The applicant's conviction record under Federal or State laws relating to the . . . distribution[ ] or dispensing of controlled substances.
(4) Compliance with applicable State, Federal, or local laws relating to controlled substances.
(5) Such other conduct which may threaten the public health and safety.
21 U.S.C. 823(f). These factors are considered in the disjunctive.
According to Agency decisions, I “may rely on any one or a combination of factors and may give each factor the weight [I] deem[ ] appropriate in determining whether” to revoke a registration.
DEA regulations state, “[a]t any hearing for the revocation . . . of a registration, the . . . [Government] shall have the burden of proving that the requirements for such revocation . . . pursuant to . . . 21 U.S.C. [§ ] 824(a) . . . are satisfied.” 21 CFR 1301.44(e). In this matter, while I have considered all of the factors, the Government's evidence in support of its
As to Factor Three, there is no evidence in the record that Registrant has a “conviction record under Federal or State laws relating to the manufacture, distribution, or dispensing of controlled substances.” 21 U.S.C. 823(f). However, as prior Agency decisions have noted, there are a number of reasons why a person who has engaged in criminal misconduct may never have been convicted of an offense under this factor.
The Government's case includes no allegation under Factor Five.
Evidence is considered under Public Interest Factors Two and Four when it reflects a registrant's compliance (or non-compliance) with laws related to controlled substances and experience dispensing controlled substances. Established violations of the Controlled Substances Act, DEA regulations, or other laws regulating controlled substances at the state or local level are cognizable when considering if a registration is consistent with the public interest.
The Government has alleged that from at least January 2012 through at least December 2017, Registrant unlawfully issued prescriptions for controlled substances in violation of the CSA. OSC, at 4. Specifically, the Government alleges that Registrant repeatedly violated 21 CFR 1306.04 by issuing prescriptions for controlled substances to Patients K.K., G.K., T.L., J.P., and Y.P. beneath the standard of care in California, the state in which Registrant holds DEA registration, outside the usual course of professional practice, and without a legitimate medical purpose.
According to the CSA's implementing regulations, a lawful controlled substance order or prescription is one that is “issued for a legitimate medical purpose by an individual practitioner acting in the usual course of his professional practice.” 21 CFR 1306.04(a). The Supreme Court has stated, in the context of the CSA's requirement that schedule II controlled substances may be dispensed only by written prescription, that “the prescription requirement . . . ensures patients use controlled substances under the supervision of a doctor so as to prevent addiction and recreational abuse . . . [and] also bars doctors from peddling to patients who crave the drugs for those prohibited uses.”
I found above that the Government's expert credibly declared, as supported by California law and the California Guide to the Laws Governing the Practice of Medicine by Physicians and Surgeons, that the standard of care in California requires physicians to, among other things, perform a sufficient physical exam and take a medical history, counsel patients on the risks and benefits of the use of particular controlled substances and document the discussions, and give special attention to patients who pose a risk for medication misuse and diversion. Based on the credible and unrebutted opinion of the Government's expert, I also found above that Registrant issued at least 1,164 controlled substance prescriptions, often for extremely high doses of opioids and in dangerous combinations of opioids and benzodiazepines, without performing or documenting physical examinations or conducting medical histories adequate to justify the prescribed medications, and often without counseling the patients on the risks posed by their medications; proper ongoing monitoring; or resolving or documenting resolution of red flags of abuse and/or diversion as required by the standard of care.
My findings demonstrate that Registrant repeatedly violated the applicable standard of care when prescribing controlled substances and that his conduct was not an isolated occurrence, but occurred with multiple patients.
I also found that Registrant repeatedly ignored signs of abuse and/or diversion. Dr. Munzing credibly opined that a California physician who prescribes controlled substances for pain management within the standard of care and in the usual course of professional practice must be vigilant for red flags of abuse or diversion of controlled substances and must address any such red flags he encounters, including through “documented discussions with the patient, closer monitoring, adjusting the medication or quantity of medication prescribed, or discontinuing treatment.” RFAAX 9, at ¶ 14. As discussed
For these reasons, in addition to the reasons I detailed
The Government has also alleged that Registrant's prescribing practices in regards to the subject patients violated state law. OSC, at 4-7. Echoing the federal regulations, California law requires that a “prescription for a controlled substance shall only be issued for a medical purpose by an individual practitioner acting in the usual course of his or her professional practice.” Cal. Health & Safety Code 11153(a). Therefore, I find that, similarly to 21 CFR 1306.04(a), the record contains substantial evidence that Registrant violated this provision with respect to the controlled substance prescriptions for Patients K.K., G.K., T.L., J.P., and Y.P. I also find based on the uncontroverted evidence that Registrant issued these same controlled substance prescriptions without “an appropriate prior examination and a medical indication,” which is a violation of Cal. Bus. & Prof. Code 2242(a).
In sum, I find that the record contains substantial evidence that Registrant issued a multitude of prescriptions for controlled substances, including high dosages of opioids, to multiple patients beneath the applicable standard of care, outside the usual course of the professional practice, and in violation of federal and state law. I, therefore, find that Factors Two and Four weigh in favor of revocation.
Where, as here, the Government has met its
The CSA authorizes the Attorney General to “promulgate and enforce any rules, regulations, and procedures which he may deem necessary and appropriate for the efficient execution of his functions under this subchapter.” 21 U.S.C. 871(b). This authority specifically relates “to `registration' and `control,' and `for the efficient execution of his functions' under the statute.”
In this matter, Registrant did not avail himself of the opportunity to refute the Government's case. As such, Registrant has made no representations as to his future compliance with the CSA or made any demonstration that he can be trusted with a registration. The evidence presented by the Government of Registrant's conduct clearly indicates that he cannot be so entrusted.
Accordingly, I shall order the sanctions the Government requested, as contained in the Order below.
Pursuant to 28 CFR 0.100(b) and the authority vested in me by 21 U.S.C. 824(a) and § 823(f), I hereby revoke DEA Certificate of Registration No. BB0500365. Further, pursuant to 28 CFR 0.100(b) and the authority vested in me by 21 U.S.C. 823(f), I hereby deny any pending application of David H. Betat, M.D. to renew or modify this registration, as well as any other pending application of David H. Betat, M.D. for registration in California. This Order is effective May 11, 2022.
On August 8, 2019, a former Acting Administrator of the Drug Enforcement Administration (hereinafter, DEA or Government), issued an Order to Show Cause and Immediate Suspension of Registration to Craig S. Rosenblum, M.D. (hereinafter, Respondent), of Palm Desert, California. Administrative Law Judge Exhibit (hereinafter, ALJX) 1 (Order to Show Cause and Immediate Suspension of Registration (hereinafter collectively, OSC)), at 1. The OSC informed Respondent of the immediate suspension of his DEA Certificates of Registration BR0869719, BA7661564, and DATA-Waiver No. XR0869719 “because . . . [his] continued registration constitute[d] `an imminent danger to the public health and safety.' ”
The substantive ground for the proceeding, as alleged in the OSC, is that Respondent “committed such acts as would render . . . [his] registration under 21 U.S.C. 823(f) inconsistent with the public interest.
According to the OSC, in view of the information before the DEA at the time, the former Acting Administrator preliminarily found that Respondent's continued registration was “inconsistent with the public interest,” that Respondent's issuance of multiple controlled substance prescriptions was “without any legitimate medical purpose,” and that his “continued registration during the pendency of these proceedings would constitute `an imminent danger to the public health or safety' because of the substantial likelihood of an imminent threat that death, serious bodily harm, or abuse of a controlled substance will occur in the absence of . . . suspension.”
The OSC notified Respondent of his right to request a hearing on the allegations or to submit a written statement while waiving his right to a hearing, the procedures for electing each option, and the consequences for failing to elect either option.
By letter dated August 20, 2019, Respondent timely requested a hearing. ALJX 3, at 1. The matter was placed on the docket of the Office of Administrative Law Judges and assigned to Administrative Law Judge Charles Wm. Dorman (hereinafter, ALJ). During the pre-hearing phase of this proceeding, the parties agreed to and submitted 116 joint stipulations (hereinafter, Jt. Stip.) that, at the hearing, the parties accepted as “binding facts in these proceedings.” Prehearing Ruling dated September 20, 2019, at 2-10; Parties' Additional Joint Stipulations dated October 28, 2019, at 1-13; Transcript page number (hereinafter, Tr.) 9. The final, agreed-to Stipulations as set out by the ALJ are:
1. Tetrahydrocannabinol (hereinafter, THC) is an illicit Schedule I Controlled Substance pursuant to 21 CFR 1308.11(d)(31).
2. Amphetamine salts (Adderall) are Schedule II Controlled Substances pursuant to 21 CFR 1308.12(d)(1).
3. Fentanyl (Duragesic patch) is a Schedule II Controlled Substance pursuant to 21 CFR 1308.12(c)(9).
4. Hydrocodone (Norco) is a Schedule II Controlled Substance pursuant to 21 CFR 1308.12(b)(1)(vi).
5. Hydromorphone (Dilaudid) is a Schedule II Controlled Substance pursuant to 21 CFR 1308.12(b)(1)(vii).
6. Methadone is a Schedule II Controlled Substance pursuant to 21 CFR 1308.12(c)(15).
7. Oxycodone (Oxycontin or Roxicodone) is a Schedule II Controlled Substance pursuant to 21 CFR 1308.12(b)(1)(xiii).
8. Oxycodone-acetaminophen (Percocet) is a Schedule II Controlled Substance pursuant to 21 CFR 1308.12(b)(1)(xiii).
9. Alprazolam (Xanax) is a Schedule IV Controlled Substance pursuant to 21 CFR 1308.14(c)(2).
10. Carisoprodol (Soma) is a Schedule IV Controlled Substance pursuant to 21 CFR 1308.14(c)(6).
11. Clonazepam (Klonopin) is a Schedule IV Controlled Substance pursuant to 21 CFR 1308.14(c)(11).
12. Diazepam (Valium) is a Schedule IV Controlled Substance pursuant to 21 CFR 1308.14(c)(16).
13. Promethazine with codeine is a Schedule V Controlled Substance pursuant to 21 CFR 1308.15(c)(1).
14. Respondent is registered as a practitioner with the DEA to handle controlled substances in Schedules II through V under DEA COR number BR0869719 at 73-950 Alessandro Drive, Suite 4, Palm Desert, California 92260.
15. Respondent's DEA COR expires by its terms on April 30, 2021.
16. Government Exhibit 1 contains a true and correct copy of Respondent's DEA COR number BR0869719.
17. Respondent operates Aurora Surgery Center LP.
18. Aurora Surgery Center LP is organized in the State of California as a Limited Partnership.
19. Respondent is listed as the one and only General Partner on Aurora Surgery Center LP's Certificate of Limited Partnership.
20. Government Exhibit 2 contains a true and correct copy of the Certificate of Limited Partnership for Aurora Surgery Center LP.
21. Aurora Surgery Center LP is registered as a hospital/clinic with the DEA to handle controlled substances in Schedules II through V under DEA COR number BA7661564 at 73-950 Alessandro Drive, Palm Desert, California 92260.
22. Aurora Surgery Center LP's DEA COR expires by its terms on June 30, 2020.
23. Government Exhibit 1 contains a true and correct copy of Aurora Surgery Center LP's DEA COR number BA7661564.
24. Respondent is a DATA-waived (Drug Addiction Treatment Act) physician certified to treat 100 patients for substance abuse.
25. Respondent's DATA-Waiver Identification number is XR0869719.
26. Respondent is licensed in the State of California to practice medicine pursuant to state license number G59060.
27. Respondent's state medical license expires by its terms on February 29, 2020.
28. Government Exhibit 3 contains true and correct copies of the administrative subpoenas issued to Respondent, dated January 16, 2019.
29. Government Exhibit 4 contains true and correct copies of the administrative subpoenas issued to various pharmacies, dated April 19, 2019.
30. Government Exhibit 6 is a true and correct copy of the “Guide to the Laws Governing the Practice of Medicine by Physicians and Surgeons” published by the Medical Board of California in 2013.
31. Government Exhibit 7 is a true and correct copy of the “Guidelines for Prescribing Controlled Substances for Pain” published by the Medical Board of California in November 2014.
32. Government Exhibit 8 is a true and correct copy of “Calculating Total Daily Dose of Opioids for Safer Dosage” published by the Centers for Disease Control and Prevention (CDC).
33. Government Exhibit 9 contains a true and correct copy of “New Safety Measures Announced for Opioid Analgesics, Prescription Opioid Cough Products, and Benzodiazepines” published by the Food and Drug Administration (FDA).
34. Government Exhibit 9 contains true and correct copies of the FDA labels for Klonopin, Valium, and Xanax.
35. Government Exhibits 10A and 10B contain true and correct copies of the
36. Government Exhibits 12A and 12B contain true and correct copies of Respondent's patient medical file for Patient A.A.
37. On the following 16 occasions, Respondent issued a prescription for 180 tablets of Percocet 10-325 mg, a prescription for 60 tablets of Xanax 2 mg, and a prescription for 180 tablets of methadone 10 mg for Patient A.A.:
38. Government Exhibit 11 contains true and correct copies of the prescriptions listed in Stipulation 37.
39. Government Exhibits 14A and 14B contain true and correct copies of Respondent's patient medical file for Patient R.B.
40. Respondent issued the following 44 prescriptions for Patient R.B.:
41. Government Exhibit 13 contains true and correct copies of the prescriptions listed in Stipulation 40.
42. Government Exhibits 16A, 16B, 16C, and 16D contain true and correct copies of Respondent's patient medical file for Patient S.D.
43. Respondent issued the following 41 prescriptions for Patient S.D.:
44. Government Exhibit 15 contains true and correct copies of the prescriptions listed in Stipulation 43.
45. Government Exhibits 18A and 18B contain true and correct copies of Respondent's patient medical file for Patient L.D.
46. Respondent issued the following 28 prescriptions for Patient L.D.:
47. Government Exhibit 17 contains true and correct copies of the prescriptions listed in Stipulation 46.
48. Government Exhibit 20A and 20B contains true and correct copies of Respondent's patient medical file for Patient S.H.
49. On the following 17 occasions, Respondent issued a prescription for 90 tablets of Roxicodone 30 mg, a prescription for 90 tablets of Dilaudid 8 mg, and a prescription for 60 tablets of methadone 10 mg for Patient S.H.
50. Government Exhibit 19 contains true and correct copies of the prescriptions listed in Stipulation 49.
51. Government Exhibits 22A, 22B, 22C, and 22D contain true and correct copies of Respondent's patient medical file for Patient J.M.
52. Respondent issued the following 33 prescriptions for Patient J.M.
53. Government Exhibit 21 contains true and correct copies of the prescriptions listed in Stipulation 52.
54. Respondent stipulates to the admissibility of Government Exhibits 1-4 and 6-22.
55. Xanax (alprazolam) is a benzodiazepine.
56. Valium (diazepam) is a benzodiazepine.
57. Klonopin (clonazepam) is a benzodiazepine.
58. On the following 16 occasions, Respondent prescribed for Patient A.A. oxycodone for 60 mg a day and methadone for 60 mg a day:
59. On June 5, 2013, Respondent increased Patient A.A.'s dosage of Percocet (oxycodone-acetaminophen) 10-325 from 90 tablets to 120 tablets.
60. On July 23, 2013, Respondent increased Patient A.A.'s dosage of Percocet (oxycodone-acetaminophen) 10-325 from 120 tablets to 180 tablets.
61. On January 11, 2013, Respondent increased Patient A.A.'s dosage of methadone 10 mg from 90 tablets to 120 tablets.
62. On June 2, 2014, Respondent increased Patient A.A.'s dosage of methadone 10 mg from 120 tablets to 180 tablets.
63. Respondent's first documented visit with Patient R.B. occurred on January 8, 2016.
64. During Respondent's January 8, 2016 initial visit with Patient R.B., Patient R.B. reported to Respondent that he was constantly in pain and had previously taken oxycodone and was then currently taking six tablets of Norco (hydrocodone-acetaminophen) 10-325 mg a day.
65. During Respondent's January 8, 2016 initial visit with Patient R.B., Patient R.B. tested positive for THC in a urine drug screen.
66. On January 8, 2016, Respondent issued a prescription for 90 tablets of oxycodone 30 mg to Patient R.B.
67. On February 8, 2016, Respondent had a second visit with Patient R.B.
68. On Respondent's February 8, 2016 second visit with Patient R.B., Patient R.B. reported to Respondent feeling much improved, with a pain level of one or two out of 10.
69. On Respondent's February 8, 2016 second visit with Patient R.B., Patient R.B. tested positive for THC and for a benzodiazepine.
70. On Respondent's February 8, 2016 second visit with Patient R.B., Respondent issued a prescription for 90 tablets of oxycodone 30 mg.
71. On the following occasions, Patient R.B. tested positive for THC in a urine drug screen:
72. Respondent did not document in Patient R.B.'s patient file any urine drug screens performed for Patient R.B. on January 10, 2018 and between March 7, 2018 and February 8, 2019.
73. On the following 17 occasions, Respondent prescribed Patient R.B. oxycodone of 120 mg a day:
74. On an April 6, 2016 visit with Patient R.B., Respondent increased Patient R.B.'s oxycodone 30 mg prescription from 90 tablets to 120 tablets.
75. On an April 6, 2016 visit with Respondent, Respondent documented in R.B.'s medical file that Patient R.B. reported feeling improved.
76. On the following occasions, Patient S.D. tested positive for THC:
77. On the following three occasions, Respondent prescribed Patient S.D. methadone at 60 mg a day and oxycodone at 90 mg a day:
78. On the following nine occasions, Respondent prescribed Patient S.D. methadone for 90 mg a day and oxycodone for 90 mg a day:
79. On the following three occasions, Respondent prescribed Patient S.D. oxycodone at 90 mg a day:
80. On February 24, 2016, Respondent increased Patient S.D.'s methadone 10 mg prescription from 120 tablets to 180 tablets.
81. On April 20, 2018, Respondent increased Patient S.D.'s methadone 10 mg prescription from 180 tablets to 270 tablets.
82. Respondent's first documented visit with Patient L.D. occurred on June 20, 2011.
83. On Respondent's initial June 20, 2011 visit with Patient L.D., Respondent documented in Patient L.D.'s patient file that Patient L.D. was taking amphetamine.
84. During a September 23, 2011 visit, L.D. tested positive for amphetamine on a urine drug screen.
85. As of the September 23, 2011 visit, Respondent had prescribed Patient L.D. amphetamine, hydromorphone, fentanyl, and clonazepam.
86. On the following eight occasions, Respondent prescribed Patient L.D. Duragesic patches at 100 mcg per hour every two days and Dilaudid for 48 mg a day:
87. On January 16, 2012, Respondent increased Patient L.D.'s prescription for Dilaudid 8 mg from 90 tablets to 180 tablets.
88. On July 14, 2015, Respondent increased Patient L.D.'s prescription for Duragesic patches 100 mcg/hour from 10 patches (1 patch every 72 hours) to 15 patches (1 patch every 48 hours) for a thirty day supply.
89. In May and July 2014, Respondent documented in Patient L.D.'s patient file that Patient L.D. and her husband had been criminally convicted.
90. Respondent's first documented visit with Patient S.H. occurred on August 24, 2010.
91. On Respondent's visit with Patient S.H. on August 4, 2015, Patient S.H. tested positive only for oxycodone.
92. On Respondent's visit with Patient S.H. on August 4, 2015, Patient S.H. reported to Respondent that he was taking Adderall, hydromorphone, methadone, and oxycodone.
93. An X-Ray taken for Patient S.H. on October 7, 2010 reported normal results for neck and spine.
94. An MRI taken for Patient S.H. on April 26, 2011 reported normal results for the spine.
95. An MRI taken for Patient S.H. on January 17, 2012 reported normal results for the neck.
96. On the following occasions, Patient S.H. had been prescribed methadone by Respondent:
97. Respondent's first documented visit with Patient J.M. occurred on May 17, 2011.
98. On Respondent's initial visit with Patient J.M. on May 17, 2011, Patient J.M. reported to Respondent that he had difficulty getting OxyContin authorized and wanted to try oxycodone instead.
99. During a June 17, 2011 visit with Patient J.M., Respondent documented in Patient J.M.'s patient file that Patient J.M. came to the office with his mother.
100. During a June 17, 2011 visit with Patient J.M., Respondent documented in Patient J.M.'s patient file that Patient J.M. came to “plead mercy” and ask for a second chance at being treated.
101. During a June 17, 2011 visit with Patient J.M., Respondent issued Patient J.M. a prescription for 180 tablets of oxycodone 30 mg
102. During a June 17, 2011 visit with Patient J.M., Respondent noted in Patient J.M.'s patient file that he would give Patient J.M. “[o]ne final chance.”
103. On the following occasions, Respondent checked the CURES database for Patient J.M.:
104. On March 23, 2012, Respondent increased Patient J.M.'s oxycodone 30 mg prescription from 180 tablets to 240 tablets.
105. On September 4, 2012, Respondent decreased Patient J.M.'s oxycodone 30 mg prescription from 240 tablets to 180 tablets.
106. On September 21, 2012, Respondent increased Patient J.M.'s oxycodone 30 mg prescription from 180 tablets to 240 tablets.
107. Between August and September 2012, Respondent increased Patient J.M.'s prescription for 90 tablets of OxyContin 60 mg to 180 tablets of OxyContin 80 mg.
108. On the following occasions, Patient J.M. tested positive for the following controlled substances in a urine drug screen:
109. During the periods referenced in Paragraph 108, Respondent had not prescribed Patient J.M. a benzodiazepine.
110. On a May 5, 2017 visit with Respondent, Respondent documented in Patient J.M.'s patient file that Patient J.M. had taken a “headache pill” from his mother.
111. On a May 5, 2017 visit with Respondent, Patient J.M. tested positive for morphine.
112. As of the May 5, 2017 visit with Respondent, Respondent had not prescribed Patient J.M. any morphine.
113. Respondent's Exhibit 1 is a true and correct copy of the New England Journal of Medicine article “No Shortcuts to Safer Opioid Prescribing.”
114. Respondent's Exhibit 2 is a true and correct copy of an April 10, 2019 letter from the Center for Disease Control and Prevention to Dr. Alford.
115. Respondent's Exhibit 3 is a true and correct copy of a media statement from the Center for Disease Control and Prevention titled “CDC Advises Against Misapplication of the Guidelines for Prescribing Opioids for Chronic Pain.”
116. Respondent's Exhibit 4 is a true and correct copy of the American Medical Association Resolution 235 “Inappropriate Use of CDC Guidelines for Prescribing Opioids D-120.932.”
ALJ's Recommended Rulings, Findings of Fact, Conclusions of Law and Decision dated February 25, 2020 (hereinafter, RD), at 24-40.
The hearing in this matter was held in Los Angeles, California, and, although originally scheduled for four days, lasted five days, November 18-22, 2019. Notice of Hearing dated October 28, 2019, at 1; Transcripts Received dated November 18-22, 2019, at 1-5. The RD is dated February 25, 2020. It recommends that the three registrations at issue be suspended until August 8, 2021, “but that . . . [the] suspensions not be lifted until . . . [Respondent] has met . . . [two] conditions.”
Having considered the record in its entirety, I conclude that the record establishes, by substantial evidence, that Respondent committed acts rendering his continued registration inconsistent with the public interest. I further conclude that Respondent did not unequivocally accept responsibility for the founded violations and that, even if he had, Respondent did not offer adequate remedial measures.
Accordingly, I conclude that the appropriate sanctions are (1) the revocation of BR0869719 and BA7661564, along with DATA-Waiver No. XR0869719; (2) the denial of any pending application(s) to renew or modify these registrations; (3) the denial of any other pending application(s) by Respondent or by Respondent on behalf of Aurora Surgery Center LP for registration in California; and (4) affirmance of the already issued Order of Immediate Suspension of Registrations. I make the following findings.
According to the Controlled Substances Act (hereinafter, CSA), “Except as authorized by this subchapter, it shall be unlawful for any person knowingly or intentionally . . . to . . . distribute, . . . dispense, or possess with intent to . . . distribute[ ] or dispense, a controlled substance.” 21 U.S.C. 841(a)(1). The CSA's implementing regulations state that a lawful controlled substance order or prescription is one that is “issued for a legitimate medical purpose by an individual practitioner acting in the usual course of his professional practice.” 21 CFR 1306.04(a).
The OSC is addressed to Respondent at his registered medical practice in California. Therefore, I also evaluate Respondent's actions according to California law and the applicable California standard of care.
Other provisions of the California Code further address the characteristics of a lawful controlled substance prescription. For example, the Health and Safety Code prohibits the knowing prescribing of a controlled substance “to or for any person” “[e]xcept in the regular practice of his or her profession.” Cal. Health & Safety Code § 11154(a) (Current with urgency legislation through Ch. 145 of 2021 Reg.Sess.). Another example is a provision of the Business and Professions Code, in effect during the period of the violations alleged in the OSC, which stated that “[p]rescribing . . . dangerous drugs . . . without an appropriate prior examination and a medical indication, constitutes unprofessional conduct.”
The “Guide to the Laws Governing the Practice of Medicine by Physicians and Surgeons” published by the Medical Board of California (hereinafter, MBC) (7th ed. 2013) (hereinafter, MBC Guide to the Laws), informs my interpretation of these California statutes and the applicable California standard of care.
The MBC Guide to the Laws sets out the California Medical Board's expectation that “physicians . . . follow the standard of care in managing pain patients.”
The MBC Guide to the Laws discusses the treatment plan, advising that it “should state objectives by which the treatment plan can be evaluated, such as pain relief and/or improved physical and psychosocial function, and indicate if any further diagnostic evaluations or other treatments are planned.”
The next section of the MBC Guide to the Laws concerns “informed consent.”
The MBC Guide to the Laws next addresses the matter of “periodic review.”
The next part of the MBC Guide to the Laws is about consultation.
The last section in this part of the MBC Guide to the Laws is entitled, “Records.”
In compiling the California standard of care applicable to this matter, I looked for, but did not find, any relevant exceptions to the applicable California standard of care I set out above, such as those suggested by Respondent's Case.
The record that the ALJ transmitted to me includes opposing interpretations of the applicable California standard of care.
The parties stipulated that Respondent was registered as a practitioner in schedules II through V under DEA Certificate of Registration No. BR0869719 at 73-950 Alessandro Drive, Suite 4, Palm Desert, California 92260. Jt. Stip. Nos. 14, 16;
The parties stipulated that Respondent operated Aurora Surgery Center LP and that Aurora Surgery Center LP was registered as a hospital/clinic in schedules II through V under DEA Certificate of Registration No. BA7661564 at 73-950 Alessandro Drive, Palm Desert, California 92260. Jt. Stip. Nos. 17-21;
The OSC suspended all of these authorities. OSC, at 11. While Respondent disputes the immediate suspensions of these authorities and the allegations in the OSC, he did not submit arguments challenging the propriety of the OSC's inclusion of registration No. BA7661564 in its requested relief.
The Diversion Investigator (hereinafter, DI) began investigating Respondent in March 2018 after several databases flagged Respondent as a “high-risk opioid prescriber.” Tr. 27;
Citing 21 U.S.C. 824(a)(4) and 823(f)(2) and (4), the OSC alleges that Respondent's continued registration is inconsistent with the public interest due to his having issued multiple controlled substance prescriptions outside the usual course of professional practice and without any legitimate medical purpose. OSC, at 2, 3, 10. As already discussed, the parties agreed to and submitted 116 joint stipulations.
The Government stated its case as being that Respondent “churn[ed] out dangerously high dosages of controlled substances month after month without any medical justification.” Government's Proposed Findings of Fact and Conclusions of Law dated January 24, 2020 (hereinafter, Govt Posthearing), at 1. The Government's arguments include that Respondent prescribed dangerously high dosages of controlled substances for years without performing initial physical examinations and evaluations, without performing periodic urine drug screens (hereinafter, UDSes), without addressing aberrant UDSes, without justifying increased dosages, without justifying dangerous controlled substance combination prescribing, and without adequately resolving indicia of abuse and diversion.
Regarding its expert, the Government offered Dr. Munzing “as a medical expert in the treatment of pain with controlled substances in the State of California.” Tr. 68. According to the RD, Dr. Munzing “is not listed as a pain specialist” on Kaiser's roster of pain specialists, “does not have fellowship training in pain management,” and was accepted “as a medical expert in the treatment of pain with controlled substances in the State of California” over Respondent's objection. RD, at 12. According to the RD's third footnote, “[s]ignificantly, Dr. Munzing was not proffered as an expert in the standard of care in California, or as an expert concerning the usual course of professional practice in California.”
As the RD also notes, Respondent objected to the Government's proffer of Dr. Munzing and the ALJ determined that Respondent wanted to voir dire Dr. Munzing. Tr. 68. Voir dire ensued.
While the RD finds “Dr. Munzing's testimony to be thorough, detailed, and internally consistent,” it is also critical of it and lists “several aspects” of Dr. Munzing's “testimony and qualifications” that “detract from his overall credibility.” RD, at 14;
I do not share all of the RD's perspectives and conclusions about Dr. Munzing.
By way of further example, the RD states that, “when asked the general question of whether a doctor [Respondent] who had treated 3,000 patients for a particular condition might have a better understanding of how to treat those patients than a doctor who had only treated 30, Dr. Munzing would not agree.”
I do not share these RD criticisms. For example, when Respondent asked Dr. Munzing whether Respondent “has significantly more experience treating chronic pain patients than you do,” Dr. Munzing's response agreed, in part, when he said that Respondent did have more experience “especially in the procedural end of it.” Tr. 80. I credit Dr. Munzing because he gave an honest answer, even admitting the dearth of his experience “in the procedural end of it.”
As already discussed, when the ALJ recognized Dr. Munzing as an expert, he stated that he was doing so “relying upon the
In
At the same time, the Chief ALJ's (adopted) Recommended Decision in
In sum, the meaning of the ALJ's statement, that he admitted Dr. Munzing as an expert witness “relying upon the
The RD further minimizes Dr. Munzing as an expert witness by concluding that the “expert qualifications” of Respondent's expert witness, Dr. Standiford Helm, II, are “superior qualifications to testify concerning pain management” and that, “[i]n fact, . . . [Respondent's] credentials, based upon experience and training, surpass Dr. Munzing's credentials with respect to pain management.” RD, at 16. The RD, adding the “standard of care” to these “pain management” conclusions, then states that, “Thus, on issues of pain management, and the standard of care concerning pain patients, I will give greater weight to the testimonies of Dr. Helm and to that of . . . [Respondent]” than to Dr. Munzing.
My responsibilities under the CSA and the content of the OSC issued to Respondent mean that the focuses of my adjudication of this matter include the applicable standard of care for controlled substance prescribing, whether Respondent issued controlled substance prescriptions in compliance with the applicable standard of care, and whether Respondent issued controlled substance prescriptions outside the usual course of professional practice. While the experience of an expert is important in my assessment of the weight to give the expert's testimony, the reliability of that testimony is paramount. According to the Supreme Court, evidence and expert testimony must “ `assist the trier of fact to understand the evidence or to determine a fact in issue.' This condition goes primarily to relevance,” and “any and all scientific testimony or evidence admitted . . . [must] not only [be] relevant, but reliable.”
Dr. Munzing testified that the MBC Guide to the Laws “informed . . . [his] opinion on what the standard of care is in California and what is done in the usual course of professional practice.”
Dr. Munzing's testimony in response to questions about whether the applicable standard of care or the usual course of professional practice in California for the treatment of pain with controlled substances depends on the specialty of the prescribing physician is consistent with the MBC Guide to the Laws.
In the second annotation to the section entitled “History/Physical Examination,” the MBC Guide to the Laws notes a differentiation based on where the medical treatment is provided.
Dr. Munzing testified that the applicable standard of care addresses taking history, doing a physical examination, developing a treatment plan and objectives, obtaining informed consent, conducting periodic reviews, consulting, and record documentation.
Regarding the applicable standard of care first prong of “History/Physical Examination,” Dr. Munzing's testimony tracked and elaborated on the MBC Guide to the Laws. He testified that “certainly one would do a general exam looking at are the medications affecting you in general,” specifically mentioning an exam of the heart and lung. Tr. 361. Regarding the specifics of the musculoskeletal exam, Dr. Munzing testified that the physician looks at the patient “at rest and seeing certain movement, flexion, extension, lateral extension, rotation, straight leg raising test.”
Regarding the applicable standard of care third prong of Informed Consent, Dr. Munzing explained that “for most of us, the most dangerous thing that we do is write a prescription for a controlled substance.” Tr. 89. He testified that “consistent with the practice of medicine, . . . we need to inform the patient about . . . the potential risks, the potential benefits, the alternatives.”
Dr. Munzing testified about the fourth prong of the applicable standard of care, Periodic Review, describing it as how to see “whether or not . . . our [chronic pain] management [is] working . . .[,] [a]re they getting better?”
Regarding the meaning of the fifth prong of the applicable standard of care,
Concerning records, the sixth prong of the applicable standard of care, Dr. Munzing testified that “[i]t's vitally important to have accurate, complete medical records.”
Dr. Munzing testified about the medical care Respondent provided, and controlled substance prescriptions Respondent issued to, A.A., R.B., S.D., L.D., S.H., and J.M.
Similarly, Dr. Munzing also testified about how, consistent with the applicable standard of care and the usual course of professional practice, a physician increases the dosage of a controlled substance.
Regarding monitoring, given the increased risk that increased MME may lead to opiate abuse or opioid use disorder, Dr. Munzing testified about the physician's continuing need to look for whether there is “any evidence that there's any opioid abuse going on, addiction going on.”
Dr. Munzing also testified about the need for physicians to be looking out for red flags of abuse or diversion.
The Government also asked Dr. Munzing to testify about the section called “Compliance Monitoring” in the MBC Guidelines for Prescribing. Tr. 100-01. Dr. Munzing testified that “compliance monitoring” is “trying to do the best that we can as prescribers to ensure that the patient is complying with what we're prescribing.”
The Government asked Dr. Munzing to address urine drug testing.
Dr. Munzing described aberrant drug test results.
Dr. Munzing testified that a negative UDS result for a prescription drug, filled more than thirty days before the UDS, is aberrant.
Dr. Munzing also testified that, for non-cancer pain patients, it is not safe to use marijuana while also taking prescribed opioids due to the “inherent risks of THC” and “it's . . . [his] responsibility as a treating physician to try to keep you as safe as possible in . . . managing . . . patients . . . [a]nd if there's something else coming into that that . . . [he] can't determine what dosage of THC, . . . it just puts the patient at much higher risk.”
When the aberrant result is due to non-compliance with the treatment, the applicable standard of care informs the physician's response based on the cause of the aberrancy, Dr. Munzing testified.
Respondent testified and called one witness, Dr. Standiford Helm, II, his expert.
Respondent testified about each of his medical files at issue in the OSC and, in the process, gave his perspective on many matters relevant to this adjudication. Regarding UDSes, Respondent testified about his use of UDSes in his practice, stating that “we do our very best to check” UDSes and “have done it for years and years and years,” and that they are “just one component of patient compliance.”
According to Respondent's testimony, “under the best circumstances” it “would be preferable” to have UDS results before seeing the patient “but [that] didn't always happen.”
Respondent testified that he did not consider a UDS to be aberrant if it is negative for a substance he prescribed, admitting that his “attorney then, you know, corrected me on that statement.”
Regarding an A.A. visit when her UDS was aberrant because it was negative for the Percocet he had prescribed, Respondent testified that “she only had three Percocet a day . . . [a]nd if she had excessive knee pain, for the last two weeks, she obviously finished her Percocet early.”
When asked if such a deviation from his prescribed controlled substance dosing was grounds for terminating the doctor-patient relationship, Respondent interrupted the question, responding “[u]nder no . . . circumstances.”
When asked why he did not document his thoughts about A.A.'s aberrant UDS, Respondent testified that “[b]ecause I'm sure this visit went on forever and ever. And I'm injecting her knee, and I'm doing everything. And it was just, it was not of significance to me. . . . I'm just saying, it was not of concern to me.”
Additionally, Respondent's case highlighted that his medical records show he explored surgical options, physical therapy, and the like, reduced the controlled substances he prescribed, complied with documentation requirements, and reduced pain.
I note that Respondent's medical records for R.B. on this point are not accurate and, therefore, that they do not comply with the applicable standard of care. MBC Guide to the Laws, at 61 (accurate and complete medical records). For four visits, from July 24, 2017 through October 16, 2017, Respondent inaccurately stated under “Current Medications” the number of oxycodone 30 mg tablets he last prescribed for R.B. GX 14B, at 32-38;
I credit Dr. Munzing's testimony that Fentanyl patches are normally written for every three days, not every other day as Respondent prescribed them for L.D. Tr. 489.
Based on substantial record evidence, however, Respondent was not successful at rebutting the OSC's allegations that he prescribed controlled substances beneath the applicable standard of care and outside the usual course of professional practice, including that Respondent failed to conduct the requisite physical examinations, failed to obtain the requisite history, failed to develop an appropriate treatment plan, failed to conduct appropriate monitoring of those for whom Respondent prescribed controlled substances, and failed to comply with recordkeeping requirements.
Further, there is substantial record evidence that Respondent did not identify as problematic requests for specific controlled substances by name and self-dosing contrary to his prescribed dosing orders.
I decline to adopt Respondent's excuses and arguments to overlook his failures to follow the applicable standard of care and to act within the usual course of professional practice.
Having read and analyzed all of the record evidence, I find that Respondent is the witness with the most at stake in this adjudication. I find that, while Respondent's testimony does include reliable statements, it also includes statement that lack credibility, are implausible, and/or are not persuasive. I find that Respondent's testimony must be considered with much caution, and where his testimony conflicts with credible record evidence and the applicable standard of care, I do not credit it.
According to Respondent's case, the Government's expert witness is trained in family medicine, not in pain medicine, and did not do, let alone complete, a fellowship in pain management. Resp Posthearing, at 23. The testimony of the Government's expert witness, Respondent charges, “was rife with error,” including its reference to the CDC Guidelines during his evaluation of the controlled substance prescribing of Respondent, a pain management specialist.
According to Respondent's case, his expert witness, Dr. Standiford Helm, II, is a “pre-eminent expert in the area of pain management,” “holds diplomate status with a number of organizations specializing in the treatment of pain,” and has affiliations with various pain organizations and “top journals in the area of pain management.”
According to Dr. Helm's testimony, he was trained in internal medicine and anesthesiology, became involved in pain management “[p]robably about '82,” and “evolved” with the field as the field evolved.
Dr. Helm testified that a doctor is required to do several things when issuing a new controlled substance prescription: “review whatever records are available,” including “whatever past medical records you have and have
Dr. Helm's testimonial elaboration on, and application of, these elements and on other matters pertaining to the applicable standard of care, however, fall far short and I do not credit them.
By way of further example, Dr. Helm was asked whether Respondent's patient contracts satisfy informed consent.
Regarding his testimony that a doctor must “perform an exam, really focused on, attempting to find out what the cause of the pain is, if you can” and “integrate that data, come up with a treatment plan,” Dr. Helm testified that Respondent's initial prescribing of amphetamine salts for L.D. preceded Respondent's noting the chronic fatigue syndrome diagnosis in the medical records for L.D.'s third visit.
Regarding UDSes, Dr. Helm testified that the controlled substance prescriptions Respondent issued on the visit at which L.D.'s UDS was positive for cocaine were issued within the usual course of professional practice, even though Respondent did not “resolv[e]” the cocaine aberrancy.
Dr. Helm testified that there is no upper limit for the MME dosages a physician can prescribe, stated that guidelines exist but do not determine the standard of care, and defined the standard of care as “what a reasonably trained physician in the community would do in similar circumstances at a similar time.”
Dr. Helm testified about the medical care Respondent provided, and controlled substance prescriptions Respondent issued to, A.A., R.B., S.D., L.D., S.H., and J.M. Tr. 632-897;
Another example, regarding the requisite physical examination, is Dr. Helm's testimony about Respondent's medical records for A.A. He testified about the “type of exams done by pain specialists in the treatment of chronic pain,” stating that Respondent conducted an “appropriate lumbar exam” of A.A. that was a “focused musculoskeletal exam.”
A further example is Dr. Helm's testimony about the reasonableness and consistency with the standard of care of Respondent's controlled substance prescribing. Regarding A.A., for example, Dr. Helm testified that, “[s]ure,” the controlled substances Respondent prescribed during A.A.'s first two visits were “reasonable and consistent with the standard of care as a pain physician,” elaborating only that “as long as she was getting pain relief and increased function with the medications with no side effects and there are no signs of aberrancy.”
Also regarding A.A., as another example, Dr. Helm testified that it was appropriate for Respondent to increase the methadone he prescribed for her on January 11, 2013, stating that “the pain meds are worse” and Respondent is “carrying out a further evaluation to solve—to see if there's anything that could be identified and in the interim increasing the medications.”
Regarding Respondent's monitoring of those for whom he prescribed controlled substances and his use of UDSes, Dr. Helm agreed with Respondent's counsel that there were “several” aberrant UDSes in Respondent's medical files.
After specifically criticizing Respondent's handling of aberrant UDSes, however, Dr. Helm minimized Respondent's failures, testifying that the instances of aberrant UDSes in Respondent's medical records are “unlikely to represent any abuse or diversion or present any risk to the public” due to the “analysis of the patient, and these patients, there seems to be all the confirmatory evidence from the social environment and the CURES.”
At the end of his direct testimony, Dr. Helm stated his views of Respondent as a pain physician.
Dr. Helm disagreed with Dr. Munzing's “criticisms overall” of Respondent.
Although Dr. Helm's testimony specifically addressed Respondent's high dose prescribing, “pain medicine adjustments,” UDS practices, monitoring, use of CURES, and medical record documentation, it did not address them squarely in the context of the applicable standard of care and the usual course of professional practice. As already discussed, Dr. Helm's testimony contained limited and unconvincing evaluations of Respondent's controlled substance prescribing against the applicable standard of care and the usual course of professional practice. Accordingly, I give Dr. Helm's testimony limited weight in this Decision/Order.
Based on my analysis of the applicable standard of care and the existence of substantial record evidence, I credit the standard of care-related testimony of Dr. Munzing when there is a conflict between his testimony and the standard of care-related testimony of Dr. Helm or of Respondent.
Respondent also submitted documentary evidence, including about seventy-five pages of letters from supporters who describe themselves as physicians, patients, or family members of patients whom Respondent has treated. RX 8, at 1-76. It appears, from my having read the legible portions of the letters, that Respondent reached out regarding his “alleged misuse of prescribing drugs.”
Having read and analyzed all of the record evidence, I find substantial record evidence that Respondent issued many controlled substance prescriptions beneath the applicable standard of care and outside the usual course of professional practice. Accordingly, I find that the Government has presented a
Regarding the Xanax 2 mg controlled substance prescription that Respondent issued to A.A. on October 8, 2013, I credit Dr. Munzing's testimony. Tr. 132-36;
Respondent testified about his decision to do A.A. that “favor,” to “accommodate” her. Tr. 1106-08. He testified that even though prescribing benzodiazepines was “something . . . [he'd] really never done in . . . [his] practice,” he had a “relationship” with A.A., seeing A.A. “monthly for at least two years.”
Accordingly, I find substantial record evidence that Respondent's first issuance of Xanax 2 mg to A.A. was beneath the applicable standard of care and outside the usual course of professional practice.
Regarding the parties' stipulations that, on June 5, 2013, Respondent increased the monthly amount of Percocet 10/325 he prescribed for A.A. from 90 to 120 tablets, and that the next month, on July 23, 2013, Respondent again increased the monthly amount of Percocet 10/325 he prescribed for A.A. from 120 to 180 tablets, I credit Dr. Munzing's testimony responding to whether the prescriptions “met the standard of care in California and were issued in the usual course of professional practice.”
Accordingly, I find substantial record evidence that Respondent's prescription of 120 tablets of Percocet 10/325 for A.A. on June 5, 2013, an increase from 90 tablets, and his prescriptions of 180 tablets of Percocet 10/325 for A.A. the next month on July 23, 2013, through March 25, 2019, were issued beneath the applicable standard of care and outside the usual course of professional practice. GX 11, at 1-31.
The parties also stipulated that, on January 11, 2013, Respondent increased the monthly amount of methadone 10 mg he prescribed for A.A. from 90 to 120 tablets, and that on June 2, 2014, Respondent again increased the monthly amount of methadone 10 mg he prescribed for A.A. from 120 tablets to 180 tablets. Jt. Stips. 61 and 62. According to Respondent's testimony, “one source of pain in the back could
I credit Dr. Munzing's testimony regarding the medical records Respondent created about these methadone increases.
Accordingly, I find substantial record evidence that Respondent issued the methadone prescriptions for A.A. in GX 11 beneath the applicable standard of care and outside the usual course of professional practice.
The record evidence, though, that Respondent conducted urine drug screens, yet did not analyze and note, let alone act on, the results is puzzling at best. At worst, it raises serious questions about Respondent's knowledge about, and implementation of, controlled substance-related best practices.
The parties stipulated that Respondent's first medical record-documented visit with R.B. took place on January 8, 2016. Jt. Stip. 63. During that initial visit, the parties stipulated, R.B. told Respondent that he “was constantly in pain and had previously taken oxycodone and was then currently taking six tablets of Norco (hydrocodone-acetaminophen) 10/325 mg[ ] a day.” Jt. Stip. 64. R.B.'s urine drug screen from that first visit, according to the parties' stipulation, was positive for THC. Jt. Stip. 65. The urine drug screen results did not corroborate R.B.'s statement to Respondent that he “was then currently taking six tablets of Norco . . . a day.” Jt. Stip. 64. The parties further stipulated that Respondent issued R.B. a controlled substance prescription for 90 tablets of oxycodone 30 mg at this initial visit. Jt. Stip. 66.
Based on my review of the record evidence regarding R.B.'s first visit with Respondent, I find substantial record evidence that Respondent issued a controlled substance prescription to R.B., for 90 tablets of oxycodone 30 mg, without documenting his knowledge of R.B.'s medical history based on input directly from R.B.'s previous physician or physician assistant, without documenting that he addressed R.B.'s in-house, positive THC urine drug screen, and without documenting that he assessed R.B. for the risk of opioid abuse. Tr. 155-56 (Dr. Munzing's testimony, including that he “do[es]n't see any further history and specifics in detail regarding other drug use,” that “there's no kind of detailed evaluation of both current and also past drug use and is there any history,” that he “do[es]n't see any kind of opioid risk tool or other screening for—there's SOAPP . . . and also the ORG, Opioid Risk Tool, that gives you an idea about risk for abuse,” and that he “do[es]n't see any specifics in past medical records that would verify a lot of this . . . [s]o you're going essentially from zero . . . immediately to 135, so . . . [he has] great concerns about that visit”); MBC Guide to the Laws, at 59-61;
Accordingly, I find substantial record evidence that Respondent issued the first 90 tablet oxycodone 30 mg
Regarding the record evidence concerning R.B.'s second visit with Respondent, I find substantial record evidence that R.B. reported feeling “much improved” with “[s]ome of . . . [his] pain . . . even down to a 1-2/10.” GX 14B, at 70;
Accordingly, I find substantial record evidence that Respondent issued the second 90 tablet oxycodone 30 mg prescription for R.B. beneath the applicable standard of care and outside the usual course of professional practice. MBC Guide to the Laws, at 59-61.
Also concerning R.B.'s second visit with Respondent, there is substantial record evidence that the in-house UDS was again positive for THC and was also positive for oxycodone, opioid, and benzodiazepine. GX 14B, at 71;
Accordingly, I find further substantial record evidence that Respondent issued the second 90 tablet oxycodone 30 mg prescription for R.B. beneath the applicable standard of care and outside the usual course of professional practice. GX 14B, at 71; MBC Guide to the Laws, at 60-61.
Further, the parties stipulated that Respondent increased the oxycodone 30 mg prescription for R.B. from 90 tablets to 120 tablets on April 6, 2016. Jt. Stip. 74; GX 14B, at 69. During the same visit, however, the substantial record evidence shows that Respondent documented in R.B.'s medical record that R.B. reported “[f]eeling much improved,” that “all complaints of pain are less,” and that R.B. exercised daily, predominantly by walking four to six miles. GX 14B, at 68;
Accordingly, I find substantial record evidence that Respondent issued the April 6, 2016 120 tablet oxycodone 30 mg prescription for R.B. beneath the applicable standard of care and outside the usual course of professional practice. GX 14B, at 68-69; MBC Guide to the Laws, at 59-61.
I find substantial record evidence that Respondent prescribed R.B. the controlled cough medicine promethazine with codeine.
Accordingly, I find substantial record evidence that Respondent issued the February 7, 2018 promethazine with codeine prescription for R.B. beneath the applicable standard of care and outside the usual course of professional practice. MBC Guide to the Laws, at 59-61.
In sum, based on all of the record evidence, I find substantial record evidence that Respondent issued controlled substance prescriptions for R.B. below the applicable standard of care and outside the usual course of professional practice. MBC Guide to the Laws, at 59-61;
There is substantial record evidence that Respondent's controlled substance prescribing for S.D. was below the applicable standard of care and outside the usual course of professional practice. For example, there is substantial record evidence that Respondent concurrently issued on twelve occasions between January 2018 and January 2019, and S.D. filled, controlled substance prescriptions for methadone 10 mg, Roxicodone 15 mg, and carisoprodol 350 mg. GX 15, at 1-24. There is also substantial record evidence that the number of tablets Respondent prescribed for S.D. during this period increased from 180 to 270 tablets of methadone and from 60 to 120 tablets of carisoprodol.
Accordingly, I find substantial record evidence that Respondent issued these controlled substance prescriptions for S.D. below the applicable standard of care and outside the usual course of professional practice. MBC Guide to the Laws, at 59-61.
The parties stipulated that Respondent prescribed 90 mg of oxycodone/day for S.D. on February 4, 2019, March 1, 2019, and April 2, 2019. Jt. Stip. 79. According to Dr. Munzing's testimony, which I credit, Respondent's issuance of these three stipulated prescriptions did not comply with the applicable standard of care and was outside the usual course of professional practice because Respondent did not document their issuance in S.D.'s medical records. Tr. 188 (Dr. Munzing's testimony that these prescriptions were issued beneath the applicable standard of care and outside the usual course of professional practice);
Accordingly, I find substantial record evidence that Respondent issued these controlled substance prescriptions for S.D. below the applicable standard of care and outside the usual course of professional practice. MBC Guide to the Laws, at 59-61.
The parties stipulated that, on February 24, 2016, Respondent increased the methadone prescription for S.D. from 120 tablets to 180 tablets. Jt. Stip. 80; GX 16D, at 76-77. According to Dr. Munzing's testimony, which I credit, the medical record Respondent created for S.D.'s February 24, 2016 visit, documents a “very minimal exam” on which the increased dosage “couldn't be based.” GX 16D, at 76-77; Tr. 188-89 (Dr. Munzing's testimony, including that, “without an exam, without a lot of details . . . I don't see anything that would justify that increase”);
Similarly, the parties stipulated that, on April 20, 2018, Respondent increased the methadone prescription for S.D. from 180 tablets to 270 tablets. Jt. Stip. 81; GX 16D, at 23-25 (“current meds are inadequate in controlling her pain even if she takes them exactly on schedule” and “[d]ue to inadequate pain relief, increase MTD 10 mg to #270 3 tabs TID prn. Continue other meds; appropriate refills given”). According to Dr. Munzing's testimony, which I credit, Respondent's April 20, 2018 prescription for S.D., increasing the methadone prescribed from 180 tablets to 270 tablets, was issued beneath the applicable standard of care and outside the usual course of professional practice. Tr. 190-91;
Accordingly, I find substantial record evidence that Respondent issued his February 24, 2015 and April 20, 2018 methadone prescriptions for S.D. below the applicable standard of care and outside the usual course of professional practice.
The parties stipulated that the first visit of Respondent with L.D. was on June 20, 2011. Jt. Stip. 82;
Accordingly, I find, based on substantial record evidence, that Respondent's issuance to L.D. of a prescription for amphetamine salt on L.D.'s first visit with him was beneath the applicable standard of care and outside the usual course of professional practice. MBC Guide to the Laws, at 59.
Although Respondent's medical records for L.D. reference the criminal incarceration, up-coming trial, conviction, and sentencing of L.D.'s former spouse and L.D.'s up-coming sentencing hearing, I find no credible record evidence that they address whether the underlying criminal bases for these events were related to drugs.
Accordingly, I find substantial record evidence that Respondent's medical records pertaining to these criminal litigation-related matters are beneath the applicable standard of care and outside the usual course of professional practice. MBC Guide to the Laws, at 61.
As already discussed, the record evidence addresses the UDSes that Respondent conducted.
Accordingly, I find substantial record evidence that Respondent acted beneath the applicable standard of care and outside the usual course of professional practice by failing to address an aberrant UDS and, despite the aberrancy, issued for L.D. a prescription for a two-month supply of amphetamine salt.
According to the parties' stipulation, J.M.'s first documented visit with Respondent was on May 17, 2011. Jt. Stip. 97. At that time, the parties further stipulated, J.M. “reported to Respondent that he had difficulty getting OxyContin authorized and wanted to try oxycodone instead.” Jt. Stip. 98. The parties also stipulated that Respondent checked CURES for J.M. on May 17, 2011. Jt. Stip. 103.a. I find, based on substantial record evidence, that Respondent issued a controlled substance prescription for J.M. on May 17, 2011. GX 22B, at 133 (Roxicodone 30 mg 180 tablets 1 q4-6 prn to a max of 6/day).
I find, based on substantial record evidence including Respondent's medical records for J.M., that the medical office that treated J.M. before Respondent's treatment transmitted a seven-page fax to Respondent on June 14, 2011. GX 22A, at 71-77. I find substantial record evidence that the fax cover sheet states “[p]lease see attached medical records for . . . [J.M.] per your request.”
The parties stipulated that Respondent's medical records for J.M.'s June 17, 2011 visit document that J.M.'s mother “came to the office” with J.M. Jt. Stip. 99;
Respondent testified about these initial visits with J.M. Among other things, Respondent admitted in his testimony that J.M. was on a high dose of oxycodone. Tr. 1097. Regarding J.M.'s visit with Respondent on May 17, 2011, Respondent testified that he “was trying to put the pieces of the puzzle together” and that he was with J.M. “for excess of an hour, observing the way . . . [J.M.] walked into the room, observing the way he left the room, [and] observing the way that he remained seated for an excess of an hour.”
Regarding J.M.'s June 17, 2011 visit, Respondent testified, defending his issuance of a controlled substance prescription for J.M. without having conducted a physical exam, that “nothing had changed in these few weeks and there were no acute findings” and that he “again, . . . would expect absolutely nothing acute
Respondent also testified about J.M.'s July 15, 2011 visit with him. According to Respondent, he conducted a comprehensive physical examination of J.M. at that visit “[b]ecause now the dust had settled,” “everything's organized,” “we're all in agreement,” “[w]e understand everything that's going on,” “[t]here was time, and it was time to carry on with this . . . situation,” and “[w]e had time to develop a baseline exam and everything like that.”
Dr. Helm also testified about Respondent's initial visits with J.M.
Dr. Munzing also testified about Respondent's initial visits with J.M. Regarding J.M.'s May 17, 2011 visit with Respondent, Dr. Munzing testified that Respondent prescribed controlled substances for J.M. even though “[w]e just don't know . . . [if J.M. was] actually taking all that medication” based on J.M.'s own documented statement to Respondent that “he had difficulty getting OxyContin authorized and wanted to try oxycodone instead.”
Regarding J.M.'s June 17, 2011 visit with Respondent, Dr. Munzing testified that “it's a significant red flag that here [sic] pleading for mercy, one more chance . . . [and] no other significant information is documented. That's a great concern.” Tr. 267. Dr. Munzing also addressed Respondent's issuance of Roxicodone 30 mg (180 tablets) and oxycodone 30 mg (180 tablets) to J.M. during their initial visits. Dr. Munzing testified that “here we're three visits into it at least, and we have no exam at all but you're prescribing extremely high dosages of medication,” that “here we are just over two weeks later [from when J.M. received controlled substance prescriptions from his prior physician] and you're giving some more . . . [even though h]e should still have . . . at least another couple of weeks left, and so there's no indication to get more,” and that “there's a cascade of things that ought to be here,” specifically listing information about mental health issues and about drug and alcohol current or past history, or use.
I credit Dr. Munzing's testimony.
Accordingly, I find substantial record evidence that Respondent acted beneath the applicable standard of care and outside the usual course of professional practice by, for example, issuing J.M. controlled substance prescriptions at J.M.'s first two documented visits.
As already discussed, based on these founded violations alone, I find that the Government presented a
Under Section 304 of the CSA, “[a] registration . . . to . . . distribute[ ] or dispense a controlled substance . . . may be suspended or revoked by the Attorney General upon a finding that the registrant . . . has committed such acts as would render his registration under section 823 of this title inconsistent with the public interest as determined by such section.” 21 U.S.C. 824(a)(4). In the case of a “practitioner,” which is defined in 21 U.S.C. 802(21) to include a “physician,” Congress directed the Attorney General to consider the following factors in making the public interest determination:
(1) The recommendation of the appropriate State licensing board or professional disciplinary authority.
(2) The applicant's experience in dispensing . . . controlled substances.
(3) The applicant's conviction record under Federal or State laws relating to the . . . distribution[ ] or dispensing of controlled substances.
(4) Compliance with applicable State, Federal, or local laws relating to controlled substances.
(5) Such other conduct which may threaten the public health and safety.
According to Agency decisions, I “may rely on any one or a combination of factors and may give each factor the weight [I] deem[ ] appropriate in determining whether” to revoke a registration.
According to DEA regulations, “[a]t any hearing for the revocation . . . of a registration, the . . . [Government] shall have the burden of proving that the requirements for such revocation . . . pursuant to . . . 21 U.S.C. [§ ] 824(a) . . . are satisfied.” 21 CFR 1301.44(e). In this matter, while I have considered all of the factors, the Government's evidence in support of its prima facie case is confined to Factors Two and Four.
As to Factor Three, there is no evidence in the record that Respondent has a “conviction record under Federal or State laws relating to the manufacture, distribution, or dispensing of controlled substances.” 21 U.S.C. 823(f)(3). However, as prior Agency decisions have noted, there are a number of reasons why a person who has engaged in criminal misconduct may never have been convicted of an offense under this factor, let alone prosecuted for one.
The Government's case includes no allegation under Factor Five.
According to the CSA's implementing regulations, a lawful prescription for controlled substances is one that is “issued for a legitimate medical purpose by an individual practitioner acting in the usual course of his professional practice.” 21 CFR 1306.04(a). The Supreme Court has stated, in the context of the CSA's requirement that schedule II controlled substances may be dispensed only by written prescription, that “the prescription requirement . . . ensures patients use controlled substances under the supervision of a doctor so as to prevent addiction and recreational abuse . . . [and] also bars doctors from peddling to patients who crave the drugs for those prohibited uses.”
Respondent engaged a skillful team and defended himself against all of the OSC's allegations. I read and analyzed every aspect of Respondent's defense including his record evidence. As already discussed, Respondent's evidence and argument are not persuasive on the founded violations.
Respondent's case admits that some of Respondent's medical recordkeeping is substandard.
By way of further example, Respondent's case admits that some of Respondent's controlled substance prescription monitoring is substandard.
As already discussed, there is substantial record evidence that Respondent issued controlled substance prescriptions before conducting the requisite physical examination and before documenting a diagnosis.
As already discussed, I find that these unrebutted actions and inactions by Respondent in his controlled-substance related prescribing are violations of the applicable standard of care and are outside the usual course of professional practice and, therefore, are CSA violations. 21 CFR 1306.04(a). Accordingly, I find that it is appropriate to sanction Respondent for these violations.
As already discussed, Respondent's case does not successfully rebut the Government's
For purposes of the imminent danger inquiry, my findings also lead to the conclusion that Respondent “fail[ed] . . . to maintain effective controls against diversion or otherwise comply with the obligations of a registrant” under the CSA. 21 U.S.C. 824(d)(2). The substantial record evidence that Respondent issued controlled substance prescriptions beneath the applicable standard of care and outside the usual course of professional practice establishes that there was “a substantial likelihood of an immediate threat that death, serious bodily harm, or abuse of a controlled substance . . . [would] occur in the absence of the immediate suspension” of Respondent's registrations.
Where, as here, the Government has met its prima facie burden of showing that Respondent's continued registration is inconsistent with the public interest due to his numerous violations pertaining to controlled substance prescribing, the burden shifts to the Respondent to show why he can be entrusted with a new registration.
Regarding these matters, I find that Respondent did not take responsibility, let alone unequivocal responsibility, for the founded violations. Tr. 1116 (Respondent's “I don't” response during his testimony when asked “Do you accept responsibility for the prescriptions at issue not being issued in the usual course of professional practice? ”). Concerning his medical recordkeeping, while Respondent “acknowledged” that it “could be improved,” this acknowledgement is not an acceptance of responsibility, let alone an unequivocal acceptance of responsibility.
I also note that Respondent testified further about his substandard recordkeeping and the ways he will improve.
In sum, I find that the record supports the imposition of a sanction because Respondent did not unequivocally accept responsibility and because Respondent has not convinced me that he can be entrusted with a registration.
The interests of specific and general deterrence weigh in favor of revocation. Respondent explicitly refused to accept responsibility for his substandard controlled substance prescribing.
Accordingly, I shall order the sanctions the Government requested, as contained in the Order below.
Pursuant to 28 CFR 0.100(b) and the authority vested in me by 21 U.S.C. 823(f) and 824(a), I hereby revoke DEA Certificates of Registration BR0869719 and BA7661564 along with DATA-
On December 18, 2019, a former Assistant Administrator, Diversion Control Division, Drug Enforcement Administration (hereinafter, DEA or Government), issued an Order to Show Cause (hereinafter, OSC) to Christopher C. King, N.P. (hereinafter, Applicant) of Manchester, Maine. Request for Final Agency Action (hereinafter, RFAA), Exhibit (hereinafter, RFAAX) 2 (OSC), at 1. The OSC proposed to deny Applicant's DEA Certificate of Registration application, Number W19022896M, as well as to deny any pending applications for renewal or modification of such registration and any applications for any other registrations pursuant to 21 U.S.C. 824(a)(4) and 823(f), because “[Applicant's] registration is inconsistent with the public interest.”
The OSC alleged that Applicant had “exhibited negative experience in handling controlled substances . . . and [had] failed to comply with applicable federal and state laws relating to controlled substances.”
The OSC notified Respondent of the right to request a hearing on the allegations or to submit a written statement, while waiving the right to a hearing, the procedures for electing each option, and the consequences for failing to elect either option.
In a Declaration dated August 23, 2021, a Diversion Investigator (hereinafter, the DI) assigned to the Manchester District Office stated that on December 18, 2019, she sent a copy of the OSC to “both [Applicant's] registered and mailing address via First Class Mail” and “sent the [OSC] via certified mail on the following day.” DI's Declaration, at 2. The DI stated that on December 19, 2019, she “contacted [Applicant] by phone at the mobile number listed on his application.”
The Government forwarded its RFAA, along with the evidentiary record, to this office on August 26, 2021. In its RFAA, the Government represents that Applicant did not request a hearing. RFAA, at 1. The Government requests that “the Administrator issue a final order denying the DEA Certificate of Registration application for [Applicant]” because “Applicant's [r]egistration is not in the public interest.”
Based on the DI's Declaration, the Government's written representations, and my review of the record, I find that the Government accomplished service of the OSC on Applicant on or before December 26, 2019. I also find that more than thirty days have now passed since the Government accomplished service of the OSC. Further, based on the DI's Declaration, the Government's written representations, and my review of the record, I find that neither Applicant, nor anyone purporting to represent Applicant, requested a hearing, submitted a written statement while waiving Applicant's right to a hearing, or submitted a corrective action plan. Accordingly, I find that Applicant has waived the right to a hearing and the right to submit a written statement and corrective action plan. 21 CFR 1301.43(d) and 21 U.S.C. 824(c)(2)(C). I, therefore, issue this Decision and Order based on the record submitted by the Government, which constitutes the entire record before me. 21 CFR 1301.43(e).
On March 12, 2019, Applicant applied for a DEA Certificate of Registration as a practitioner in Schedules II through V with a proposed registered address of 29 Bowdoin St, Manchester, ME 04351. RFAAX 1, at 1. Applicant's application was assigned Control No. W19022896M.
The Government's RFAA includes the DI's Declaration and 10 attached Exhibits, including a copy of Applicant's application for DEA registration, various documents pertaining to the drug diversion allegations against Applicant at both St. Mary's Hospital and Mercy Hospital, and a copy of a Consent Agreement between Applicant and the Maine Board of Nursing in which Applicant's license to practice nursing was suspended.
The DI's Declaration described the investigation into Applicant, including the collection of the Government's Exhibits. DI's Declaration, at 1-3. On June 13, 2013, Mercy Hospital issued a letter to Applicant following an investigation regarding Applicant's “suspicious behavior” during his shift on June 4, 2013. RFAAX 9. According to the letter, on June 4, 2013, “medical waste (wet bloody paper towel, open syringe wrapper, syringe cap, open band aid wrapper, and an open alcohol wipe wrapper) was found in the bathroom in the staff break room.”
According to the letter, after review of Applicant's other worked shifts since his start at Mercy Hospital, there was “further concern that similar behavior occurred on another shift.”
On November 1, 2016, a Risk Manager at St. Mary's Hospital issued a Memorandum to the HR department regarding an “Investigation of Suspicion of Drug Diversion.” RFAAX 6, at 1. According to the Memorandum, on September 24, 2016, Applicant “was found to have pulled a medication for another Emergency Department nurse's patient.”
According to the Memorandum, there had been other suspicious incidents involving Applicant and several sharps containers in the Emergency Department. RFAAX 6, at 1. “On one occasion, [Applicant] lost his ring in a sharps container in the [Emergency Department].”
The Memorandum further states that “[a] chart audit was performed to determine Pyxis access by [Applicant]” and “[a] report of [Applicant's] Pyxis access from August 25, 2016 to September 24, 2016 was run and reviewed against patient charts for that time period.”
On November 1, 2016, St. Mary's Hospital issued a letter to Applicant notifying him of his immediate dismissal from employment. RFAAX 5. In addition to the incidents of potential drug diversion previously identified in the above-described Memorandum, the letter also stated that Applicant “falsified and omitted pertinent facts from [his] St. Mary's [Hospital] Employment Application by indicating that [his] prior employment at CMMC was still `present' and for omitting pertinent employment information for [his] work and termination from Mercy Hospital in 2013.”
On October 16, 2017, Applicant signed a Consent Agreement for Reprimand, Suspension, and Probation (hereinafter, Consent Agreement) issued by the State of Maine Board of Nursing (hereinafter, the Board). RFAAX 10, at 1 and 5. The Consent Agreement includes facts pertaining to Applicant's alleged diversion while employed at St. Mary's Hospital, along with additional facts, such as that Applicant “has a March 31, 2014 letter of concern on file with the Board in which the Board communicates its concern regarding `the importance of the proper administration, waste and disposal of scheduled drugs in any employment setting.' ”
Pursuant to section 303(f) of the CSA, “[t]he Attorney General shall register practitioners . . . to dispense . . . controlled substances . . . if the applicant is authorized to dispense . . . controlled substances under the laws of the State in which he practices.” 21 U.S.C. 823(f). Section 303(f) further provides that an application for a practitioner's registration may be denied upon a determination that “the issuance of such registration . . . would be inconsistent with the public interest.”
(1) The recommendation of the appropriate State licensing board or professional disciplinary authority.
(2) The applicant's experience in dispensing, or conducting research with respect to controlled substances.
(3) The applicant's conviction record under Federal or State laws relating to the manufacture, distribution, or dispensing of controlled substances.
(4) Compliance with applicable State, Federal, or local laws relating to controlled substances.
(5) Such other conduct which may threaten the public health and safety.
The DEA considers these public interest factors in the disjunctive.
The Government does not dispute that Applicant holds a valid state nursing license and is authorized to dispense controlled substances in the State of Maine where he practices.
As to Factor Five, the Government's evidence fits squarely within the parameters of Factors One, Two, and Four and does not raise “other conduct which may threaten the public health and safety.” 21 U.S.C. 823(f)(5). Accordingly, Factor Five does not weigh for or against Applicant.
In determining the public interest under Factor One, the “recommendation of the appropriate State licensing board or professional disciplinary authority” shall be considered. 21 U.S.C. 823(f)(1). “Two forms of recommendations appear in Agency decisions: (1) A recommendation to DEA directly from a state licensing board or professional disciplinary authority (hereinafter, appropriate state entity), which explicitly addresses the granting or retention of a DEA COR; and (2) the appropriate state entity's action regarding the licensure under its jurisdiction on the same matter that is the basis for the DEA OSC.”
As previously discussed, on October 16, 2017, Applicant entered into a Consent Agreement issued by the Board. RFAAX 10, at 1 and 5. The Board's Consent Agreement includes some of the allegations against Applicant that were addressed in the OSC and RFAA—namely, those pertaining to Applicant's alleged diversion while employed at St. Mary's Hospital.
While the Board's Consent Agreement is not a “direct recommendation” for purposes of Factor One, it does indicate a recommendation by the appropriate state entity regarding a large portion of the allegations and evidence before me.
The Board's Consent Agreement is not dispositive of the public interest inquiry in this case. The Board's suspension of Applicant's nursing license, as well as its probationary conditions, do not indicate a substantial amount of trust in Applicant. Ultimately, I find the Board's Consent Agreement to weigh slightly in favor of Applicant, but its weight is also minimized by the ambiguity regarding the Board's awareness of the full extent of Applicant's history of diversion allegations, the sanctions imposed by the Board, and the fact that I have no information from Applicant to mitigate the circumstances.
The unrebutted record evidence demonstrates that Applicant has a history of diversion, which comprises multiple documented incidents from at least two different places of employment. Although Applicant has denied at least some of the allegations from his time as an employee at St. Mary's Hospital, (RFAAX 10, at 1-2), Applicant nonetheless signed the Board's Consent Agreement in which he agreed that there was “sufficient admissible evidence for the Board to find that it [was] more likely than not” that he engaged in the conduct described in the allegations.
Furthermore, the Government alleges that Applicant repeatedly violated state and federal laws related to controlled substances by diverting controlled substances on at least two different occasions while employed at Mercy Hospital and on at least five different occasions while employed at St. Mary's Hospital. OSC, at 2 and 4 (citing 21 U.S.C. 843(a)(3); 21 CFR 1301.22(c); 17-A Me. Rev. Stat. § 1107-A; 32 Me. Rev. Stat. § 2105-A(2)(F) and (H); and Maine State Board of Nursing Rule Ch. 4 § 3(P)).
According to Maine law, “a person is guilty of unlawful possession of a scheduled drug if the person intentionally or knowingly possesses what that person knows or believes to be a scheduled drug, which is in fact a scheduled drug”
Under federal law, it is unlawful “to acquire or obtain possession of a controlled substance by misrepresentation, fraud, forgery, deception, or subterfuge.” 21 U.S.C. 843(a)(3). Federal law also states that “[a]n individual practitioner who is an agent or employee of a hospital or other institution may, when acting in the normal course of business or employment, administer, dispense, or prescribe controlled substances under the registration of the hospital or other institution which is registered in lieu of being registered him/herself, provided that . . . [s]uch dispensing, administering or prescribing is done in the usual course of his/her professional practice.” 21 CFR 1301.22(c). Federal law defines an individual practitioner as an “individual licensed, registered, or otherwise permitted, by the United States or the jurisdiction in which he/she practices, to dispense a controlled substance in the course of professional practice.” 21 CFR 1300.01.
In this case, the evidence supports a finding that Applicant diverted controlled substances on at least two different occasions while employed at Mercy Hospital and on at least five different occasions while employed at St. Mary's Hospital. In doing so, he clearly acted outside of the usual course of his professional practice and dispensed controlled substances in violation of state and federal law. Given the repeated nature of Applicant's violations of federal and state regulations related to controlled substances, I find that Factors Two and Four strongly weigh against Applicant's registration and I find Applicant's registration to be inconsistent with the public interest in balancing the factors in 21 U.S.C. 823(f).
Where, as here, the Government has met its
Pursuant to 28 CFR 0.100(b) and the authority vested in me by 21 U.S.C. 823(f) and 21 U.S.C. 824(a), I hereby deny the pending application for a Certificate of Registration, Control Number W19022896M, submitted by Christopher C. King, N.P., as well as any other pending application of Christopher C. King, N.P. for additional registration in Maine. This Order is effective May 9, 2022.
On October 23, 2021, the Assistant Administrator, Diversion Control Division, Drug Enforcement Administration (hereinafter, DEA or Government), issued an Order to Show Cause (hereinafter, OSC) to Crosby Pharmacy and Wellness (hereinafter, Applicant) of Montgomery, Texas. OSC, at 1. The OSC proposes the denial of Applicant's registration application, Control No. W20008908A (hereinafter, registration application). It alleges that Applicant materially falsified its registration application and that Applicant's registration would be “inconsistent with the public interest, as that term is defined in 21 U.S.C. 823(f).”
Specifically, the OSC alleges that, during an onsite visit when Applicant was a registrant, the Government discovered “serious recordkeeping violations,” including not maintaining an initial inventory, not maintaining a biennial inventory, and not maintaining accurate records of all controlled substances received and sold.
The OSC notifies Applicant of the right to request a hearing on the allegations or to submit a written statement, while waiving the right to a hearing; the procedures for electing each option; and the consequences for failing to elect either option.
In a sworn Declaration dated August 20, 2021 (hereinafter, Declaration), a Diversion Investigator (hereinafter, DI) assigned to the Houston Division Office in Houston, Texas, stated that she “caused a copy of the . . . [OSC] to be sent to . . . [Applicant] at . . . [its] proposed registered address via First Class Mail and Certified Mail.” DI Declaration, at 3. She stated that “[b]oth of these mailings were returned to DEA.”
The Government forwarded its Request for Final Agency Action (hereinafter, RFAA), along with the evidentiary record, to this office on August 24, 2021. In its RFAA, the Government represented that “Applicant did not request a hearing” and requested that I “enter an order denying Applicant's application.” RFAA, at 1.
Based on the DI's Declaration, the Government's written representations, and my review of the record, I find that the Government accomplished service of the OSC on Applicant on or about November 12, 2020. I also find that more than thirty days have now passed since the Government accomplished service of the OSC. Further, based on the Government's written representations, I find that neither Applicant, nor anyone purporting to represent Applicant, requested a hearing, submitted a written statement while waiving Applicant's right to a hearing, or submitted a corrective action plan. Accordingly, I find that Applicant has waived the right to a hearing and the right to submit a written statement and corrective action plan. 21 CFR 1301.43(d); 21 U.S.C. 824(c)(2)(C). I, therefore, issue this Decision and Order based on the record submitted by the Government, which constitutes the entire record before me. 21 CFR 1301.43(e).
I find there is substantial uncontroverted record evidence that Applicant previously held registration No. FC7640623. RFAA Exhibit (hereinafter, RFAAX) 3, at 1. I find there is substantial uncontroverted record evidence that Applicant surrendered that registration for cause by signing a DEA-104, “Surrender for Cause of DEA Certificate of Registration” on January 8, 2020. RFAAX 4, at 1. Further, I find there is substantial uncontroverted record evidence that, on or around January 29, 2020, Applicant submitted the registration application. DI Declaration, at 2; RFAAX 2, at 1-3. I find clear, unequivocal, convincing, and unrebutted record evidence that, on the registration application, Applicant certified that it had never “surrendered (for cause) . . . a federal controlled substance registration.” RFAAX 2, at 1. I find there is substantial uncontroverted record evidence that DEA issued this OSC about the registration application. OSC, at 1; RFAAX 4, at 2.
I find there is substantial uncontroverted record evidence that DI and other DEA employees “conducted an onsite visit” of Applicant on January 8, 2020. DI Declaration, at 1. I find there is substantial uncontroverted record evidence that, during this visit, the DEA team “discovered a number of problems with . . . [Applicant's controlled-substance-related] recordkeeping.”
I find there is substantial uncontroverted record evidence that DI continued the investigation of Applicant after its voluntary registration surrender for cause by issuing an administrative subpoena to Applicant's distributor. RFAAX 5, at 1; DI Declaration, at 2. I find there is substantial uncontroverted record evidence that, pursuant to the administrative subpoena, Applicant's distributor provided DI with DEA Form 222s and invoices. DI Declaration, at 2. I find there is substantial uncontroverted record evidence that these distributor documents show that the distributor provided Applicant with more than 18,000 tablets of oxycodone 30 mg, more than 16,000 tablets of hydrocodone/acetaminophen 10/325 mg, more than 13,000 tablets of alprazolam 2 mg, more than 20,000 tablets of carisoprodol 350 mg, and 120 bottles of 473 ml promethazine with codeine.
Pursuant to the Controlled Substances Act (hereinafter, CSA), “[t]he Attorney General shall register practitioners . . . to dispense . . . controlled substances . . . if the applicant is authorized to dispense . . . controlled substances under the laws of the State in which he practices.” 21 U.S.C. 823(f). The CSA further provides that an application for a practitioner's registration may be denied upon a determination that “the issuance of such registration . . . would be inconsistent with the public interest.”
(1) The recommendation of the appropriate State licensing board or professional disciplinary authority.
(2) The applicant's experience in dispensing . . . controlled substances.
(3) The applicant's conviction record under Federal or State laws relating to the manufacture, distribution, or dispensing of controlled substances.
(4) Compliance with applicable State, Federal, or local laws relating to controlled substances.
(5) Such other conduct which may threaten the public health and safety.
These factors are considered in the disjunctive.
The OSC in this matter, as already discussed, alleges that Applicant's registration application should be denied because it would be inconsistent with the public interest for Applicant to have a registration and because Applicant's registration application contains a materially false response to a liability question. OSC, at 1-3; 21 U.S.C. 823(f), 824(a)(1);
Prior Agency decisions have addressed whether it is appropriate to consider a material falsification and other bases for revocation or suspension described in 21 U.S.C. 824(a) when determining whether or not to grant a practitioner registration application.
Having read and analyzed all of the record evidence, I find from clear, unequivocal, convincing, and unrebutted record evidence that Applicant surrendered (for cause) its DEA registration on January 8, 2020.
As already discussed, the OSC includes three allegations that Applicant failed to maintain required “controlled substances records.” OSC, at 2. First, the OSC alleges that Applicant “failed to maintain an initial inventory, in violation of 21 CFR 1304.11(b).”
Second, the OSC alleges that Applicant “failed to maintain a biennial inventory, in violation of 21 CFR 1304.11(c).” OSC, at 2. There is no evidence in the record that supports this allegation. Accordingly, I find that this OSC allegation is not founded.
Third, the OSC alleges that Applicant “failed to maintain accurate records of all controlled substances received and sold, in violation of 21 CFR 1304.21(a).”
The Government has the burden of proof in this proceeding. 21 CFR 1301.44(d). I carefully considered all of the record evidence relevant to the material falsification allegation, the recordkeeping allegations, and the public interest factors of 21 U.S.C. 823(f)(2) and (4). For the above-stated reasons, I find that the Government met its burden on the OSC's material falsification allegation and on two of the OSC's three recordkeeping violation allegations. I further find that Applicant did not submit any evidence, let alone evidence that rebuts the Government's
Where, as here, the Government presented a
Additionally, in evaluating whether a practitioner should be entrusted with a registration, the Agency considers whether the practitioner has accepted responsibility for any misconduct; circuit courts have approved the Agency's acceptance of responsibility requirement.
The Agency also has decided that the egregiousness and extent of the misconduct are significant factors in determining the appropriate sanction.
In terms of egregiousness, the violations that the record evidence shows Applicant committed go to the heart of the CSA—not complying with required controlled substance recordkeeping and submitting a registration application that includes a material falsification.
Applicant did not take responsibility for the founded violations. Accordingly, it is not reasonable to believe that Applicant's future controlled substance dispensing will comply with legal requirements.
For all of these reasons, I find that it would be inconsistent with the public interest for me to entrust Applicant with a registration. Accordingly, I shall order the denial of Applicant's registration application, Control No. W20008908A.
Pursuant to 28 CFR 0.100(b) and the authority vested in me by 21 U.S.C. 823(f), I hereby deny the registration application submitted by Crosby Pharmacy and Wellness, Control No. W20008908A, seeking registration in Texas as a practitioner, and I hereby deny any other pending application submitted by Crosby Pharmacy and Wellness for a DEA registration in the State of Texas. This Order is effective May 11, 2022.
On November 8, 2021, a former Acting Assistant Administrator, Diversion Control Division, Drug Enforcement Administration (hereinafter, DEA or Government), issued an Order to Show Cause (hereinafter, OSC) to Adam T. Rodman, P.A. (hereinafter, Respondent) of Dedham, Massachusetts. OSC, at 1 and 3. The OSC proposed the revocation of Respondent's Certificate of Registration No. MR0956586.
Specifically, the OSC alleged that on or about June 30, 2021, the Massachusetts Drug Control Program accepted Respondent's voluntary surrender of his state controlled substances registration for schedules II through V.
The OSC notified Respondent of the right to request a hearing on the allegations or to submit a written statement, while waiving the right to a hearing, the procedures for electing each option, and the consequences for failing to elect either option.
By letter dated December 1, 2021, Respondent timely requested a hearing.
The Office of Administrative Law Judges put the matter on the docket and assigned it to Administrative Law Judge Teresa A. Wallbaum (hereinafter, the ALJ). On December 2, 2021, the ALJ issued an Order Directing the Government to File Evidence Regarding Its Lack of State Authority Allegation and Briefing Schedule (hereinafter, Briefing Schedule). On December 15, 2021, the Government timely filed its Notice of Filing of Evidence and Motion for Summary Disposition (hereinafter, Government's Motion). Order Granting the Government's Motion for Summary Disposition, and Recommended Rulings, Findings of Fact, Conclusions
On January 27, 2022, the ALJ granted the Government's Motion, finding that “[t]here is no genuine issue of material fact in this case.” RD, at 6. Further, the ALJ found that Respondent's argument regarding the plain language of 21 U.S.C. 824(a)(3) was “at odds with clear Agency precedent on the issue and must therefore fail,” because “regardless of how or why [Respondent] lost his authority to handle controlled substances under state law, he has lost it.”
I issue this Decision and Order based on the entire record before me. 21 CFR 1301.43(e). I make the following findings of fact.
Respondent is the holder of DEA Certificate of Registration No. MR0956586 at the registered address of 983 Providence Highway, Dedham, Massachusetts 02026. Government's Motion, Declaration of [Diversion Investigator (DI)], at 1. Pursuant to this DEA registration, Respondent is authorized to dispense controlled substances in schedules II through V as a mid-level practitioner.
On June 30, 2021, the Massachusetts Drug Control Program accepted Respondent's voluntary surrender of his Massachusetts controlled substances registration for Massachusetts drug schedules II through V and stated that Respondent was “no longer authorized to prescribe, distribute, possess, dispense or administer controlled substances from schedules II through V in the Commonwealth of Massachusetts.” Government's Motion, Declaration of DI, Exhibit (hereinafter GX) A. The Massachusetts Drug Control Program also clarified that Respondent's Massachusetts controlled substances registration would retain authorization for schedule VI medications only.
On August 30, 2021, the Massachusetts Board of Registration of Physician Assistants (hereinafter, the Board) entered into a Consent Agreement for Probation (hereinafter, Consent Agreement) with Respondent regarding Respondent's Massachusetts Physician Assistant license. Respondent's Opposition, Exhibit (hereinafter, RX) A, at 1-2. By signing the Consent Agreement, Respondent admitted that on various dates between October 4, 2018, and September 30, 2019, he had diverted controlled substances.
According to online records for Massachusetts, of which I take official notice, Respondent's Massachusetts controlled substances registration is current, but authorized only for drug schedule VI.
Accordingly, I find that Respondent is not currently licensed to dispense controlled substances in schedules II through V in Massachusetts, the state in which he is registered with the DEA.
Pursuant to 21 U.S.C. 824(a)(3), the Attorney General is authorized to suspend or revoke a registration issued under section 823 of the Controlled Substances Act (hereinafter, CSA) “upon a finding that the registrant . . . has had his State license or registration suspended, revoked, or denied by competent State authority and is no longer authorized by State law to engage in the . . . dispensing of controlled substances.”
This rule derives from the text of two provisions of the CSA. First, Congress
According to the Massachusetts Controlled Substances Act, “every person who . . . dispenses . . . any controlled substance within the commonwealth shall . . . register with the commissioner of public health, in accordance with his regulations.” Mass. Gen. Laws ch. 94C, § 7(a) (Westlaw, current through Chapter 14 of the 2022 2nd Annual Session). Further, “[a] prescription for a controlled substance may be issued only by a practitioner who is (1) authorized to prescribe controlled substances; and (2) registered pursuant to the provisions of [the Massachusetts Controlled Substances Act].”
Here, the undisputed evidence in the record is that Respondent is not authorized to dispense controlled substances in schedules II through V in Massachusetts.
Pursuant to 28 CFR 0.100(b) and the authority vested in me by 21 U.S.C. 824(a), I hereby revoke DEA Certificate of Registration No. MR0956586 issued to Adam T. Rodman, P.A. Further, pursuant to 28 CFR 0.100(b) and the authority vested in me by 21 U.S.C. 823(f), I hereby deny any pending application of Adam T. Rodman, P.A. to renew or modify this registration, as well as any other pending application of Adam T. Rodman, P.A. for additional registration in Massachusetts. This Order is effective May 11, 2022.
On December 10, 2021, a former Acting Assistant Administrator, Diversion Control Division, Drug Enforcement Administration (hereinafter, DEA or Government), issued an Order to Show Cause (hereinafter, OSC) to Lezlie McKenzie, N.P. (hereinafter, Respondent) of Missoula, Montana. OSC, at 1. The OSC proposed the revocation of Respondent's Certificate of Registration Number MM0938261 (hereinafter, registration or COR).
Specifically, the OSC alleged that on July 26, 2021, the Montana Board of Nursing entered a Final Order that outlined “conditions [Respondent was] required to meet in order to maintain [her] Montana nursing license.”
The OSC notified Respondent of the right to request a hearing on the allegations or to submit a written statement, while waiving the right to a hearing, the procedures for electing each option, and the consequences for failing to elect either option.
By letter dated January 6, 2022, Respondent timely requested a hearing.
The Office of Administrative Law Judges put the matter on the docket and assigned it to Chief Administrative Law Judge John J. Mulrooney II (hereinafter, the Chief ALJ). On January 10, 2022, the Chief ALJ issued an Order Directing the Filing of Government Evidence Regarding Its Lack of State Authority Allegation and Briefing Schedule (hereinafter, Briefing Schedule). On January 24, 2022, the Government timely filed its Submission of Evidence and Motion for Summary Disposition (hereinafter, Government's Motion). In its Motion, the Government argued that because Respondent lacks authority to handle controlled substances in Montana, the state in which she is registered with the DEA, her DEA registration should be revoked. Government's Motion, at 2-5. Respondent did not file any answer to the Government's Motion. Order Granting the Government's Motion for Summary Disposition, and Recommended Rulings, Findings of Fact, Conclusions of Law, and Decision of the Administrative Law Judge dated February 8, 2022 (hereinafter, Recommended Decision or RD), at 2.
On February 8, 2022, the Chief ALJ granted the Government's Motion, finding that “[s]ince the Respondent does not have authority as a practitioner in Montana, and this fact is not challenged by the Respondent, there is no other fact of consequence for this tribunal to decide in order to determine whether or not she is entitled to hold a COR.” RD, at 5. Accordingly, the Chief
I issue this Decision and Order based on the entire record before me. 21 CFR 1301.43(e). I make the following findings of fact.
Respondent is the holder of DEA registration MM0938261 at the registered address of 715A Skyla Ct., Missoula, Montana 59801-1480. Government's Motion, Exhibit (hereinafter, GX) D (Declaration of [Diversion Investigator (DI)]), at 1. Pursuant to this DEA registration, Respondent is authorized to prescribe controlled substances in schedules II through V as a mid-level practitioner. GX A (Printout of Respondent's registration information from DEA's Registrant Information Consolidated System). Respondent's registration expires on January 31, 2024.
On July 26, 2021, the Montana Board of Nursing (hereinafter, MBN) entered a Final Order regarding Respondent's nursing licenses (hereinafter, MBN Order or Order). GX B. The Order stated that Respondent held licenses in Montana as a registered nurse (hereinafter, RN) and an advanced practice RN (hereinafter, APRN), and that Respondent possessed prescriptive authority under her APRN license.
According to the DI's declaration, DEA learned on October 26, 2021, that the MBN had indefinitely suspended Respondent's state nursing licenses “for failure to abide by the terms” of the conditions set forth in the July 26, 2021 MBN Order. GX D, at 2. DI represented that Respondent's license remained suspended as of January 13, 2022, and submitted a printout of the Montana Department of Labor and Industry's online licensing verification page confirming the suspension of Respondent's APRN license.
According to online records for Montana, of which I take official notice, Respondent's Montana APRN license is suspended and expired.
Pursuant to 21 U.S.C. 824(a)(3), the Attorney General is authorized to suspend or revoke a registration issued under section 823 of the Controlled Substances Act (hereinafter, CSA) “upon a finding that the registrant . . . has had his State license or registration suspended, revoked, or denied by competent State authority and is no longer authorized by State law to engage in the . . . dispensing of controlled substances.” With respect to a practitioner, the DEA has also long held that the possession of authority to dispense controlled substances under the laws of the state in which a practitioner engages in professional practice is a fundamental condition for obtaining and maintaining a practitioner's registration.
This rule derives from the text of two provisions of the CSA. First, Congress defined the term “practitioner” to mean “a physician . . . or other person licensed, registered, or otherwise permitted, by . . . the jurisdiction in which he practices . . . , to distribute, dispense, . . . [or] administer . . . a controlled substance in the course of professional practice.” 21 U.S.C. 802(21). Second, in setting the requirements for obtaining a practitioner's registration, Congress directed that “[t]he Attorney General shall register practitioners . . . if the applicant is authorized to dispense . . . controlled substances under the laws of the State in which he practices.” 21 U.S.C. 823(f). Because Congress has clearly mandated that a practitioner possess state authority in order to be deemed a practitioner under the CSA, the DEA has held repeatedly that revocation of a practitioner's registration is the appropriate sanction whenever he is no longer authorized to dispense controlled substances under the laws of the state in which he practices.
According to the Montana Administrative Code, “[o]nly an APRN granted prescriptive authority by the board may prescribe, procure, administer, and dispense . . . controlled substances pursuant to applicable state and federal laws and within the APRN's role and population focus.” Mont. Admin. R. 24.159.1461 (2013) (Westlaw, current through Issue 4 of the 2022 Montana Administrative Register). Further, according to the Montana Controlled Substances Act, “dangerous drug[s]”
Here, the undisputed evidence in the record is that Respondent is not authorized to dispense controlled substances in schedules II through V in Montana. Thus, because Respondent is
Pursuant to 28 CFR 0.100(b) and the authority vested in me by 21 U.S.C. 824(a), I hereby revoke DEA Certificate of Registration No. MM0938261 issued to Lezlie McKenzie, N.P. Further, pursuant to 28 CFR 0.100(b) and the authority vested in me by 21 U.S.C. 823(f), I hereby deny any pending application of Lezlie McKenzie, N.P., to renew or modify this registration, as well as any other pending application of Lezlie McKenzie, N.P., for additional registration in Montana. This Order is effective May 11, 2022.
Notice of availability; request for comments.
The Department of Labor (DOL) is submitting this Bureau of Labor Statistics (BLS)-sponsored information collection request (ICR) to the Office of Management and Budget (OMB) for review and approval in accordance with the Paperwork Reduction Act of 1995 (PRA). Public comments on the ICR are invited.
The OMB will consider all written comments that the agency receives on or before May 11, 2022.
Written comments and recommendations for the proposed information collection should be sent within 30 days of publication of this notice to
Mara Blumenthal by telephone at 202-693-8538, or by email at
The BLS is given broad authority under Title 29 of the U.S. Code “to acquire and diffuse among the people of the United States useful information on subjects connected with labor, in the most general and comprehensive sense of that word.” The BLS has provided international training in labor market information and price indexes since 1945. Each year, the BLS conducts training programs of 1 to 2 weeks duration at its training facilities in Washington, DC. This information collection request allows the BLS to collect the information needed to register trainees for the international training programs. For additional substantive information about this ICR, see the related notice published in the
This information collection is subject to the PRA. A Federal agency generally cannot conduct or sponsor a collection of information, and the public is generally not required to respond to an information collection, unless the OMB approves it and displays a currently valid OMB Control Number. In addition, notwithstanding any other provisions of law, no person shall generally be subject to penalty for failing to comply with a collection of information that does not display a valid OMB Control Number.
DOL seeks PRA authorization for this information collection for three (3) years. OMB authorization for an ICR cannot be for more than three (3) years without renewal. The DOL notes that information collection requirements submitted to the OMB for existing ICRs receive a month-to-month extension while they undergo review.
Mine Safety and Health Administration, Labor.
Notice.
This notice is a summary of a petition for modification submitted to the Mine Safety and Health Administration (MSHA) by the party listed below.
All comments on the petition must be received by MSHA's Office of Standards, Regulations, and Variances on or before May 11, 2022.
You may submit comments identified by Docket No. MSHA-2022-0018 by any of the following methods:
1.
2.
3.
4.
S. Aromie Noe, Office of Standards, Regulations, and Variances at 202-693-9440 (voice),
Section 101(c) of the Federal Mine Safety and Health Act of 1977 and Title 30 of the Code of Federal Regulations (CFR) part 44 govern the application, processing, and disposition of petitions for modification.
Section 101(c) of the Federal Mine Safety and Health Act of 1977 (Mine Act) allows the mine operator or representative of miners to file a petition to modify the application of any mandatory safety standard to a coal or other mine if the Secretary of Labor determines that:
1. An alternative method of achieving the result of such standard exists which will at all times guarantee no less than the same measure of protection afforded the miners of such mine by such standard; or
2. The application of such standard to such mine will result in a diminution of safety to the miners in such mine.
In addition, sections 44.10 and 44.11 of 30 CFR establish the requirements for filing petitions for modification.
The petitioner states that:
(a) A Wild/Leica T16 theodolite is used to perform all surveying work in the return and past the last open crosscut. This instrument is becoming obsolete, according to the petitioner's surveying equipment supplier.
(b) There are no MSHA-approved electronic total stations or theodolites.
(c) Electronic total stations allow surveying personnel to measure distances without entering an area. A built-in electronic distance meter allows remote measurement by reflecting light off an object, such as the face, with no reflector. Use of the electronic total stations eliminates miner travel through areas with poor roof or rib conditions and allows measurement in unbolted areas. Station use also significantly reduces surveying personnel's exposure to poor ground conditions.
(d) Nineteen of the 21 electronic total stations/theodolites listed in the petitioner's proposal have an IP (Ingress Progression) 66 rating; two have an IP 65 rating.
(e) The lithium batteries used for the instruments listed in the petitioner's proposal meet the UL 1642 standard or IEC (International Electrotechnical Commission) 62133 standard.
(f) Using the instruments listed in the petitioner's proposal will provide the most accurate and safest means of surveying in methane-containing air and will improve the quality and accuracy of surveys, which will improve the safety of the mining operation.
The petitioner proposes the following alternative method:
(a) Use the following non-MSHA approved electronic total stations/theodolites under normal mining conditions in or beyond the last open crosscut and where methane may enter the air current:
(b) While not in operation, the electronic total station/theodolite will be charged out-by the last open crosscut utilizing the manufacturer's approved battery charger.
(c) The mine surveyor will follow manufacturer's instruction on how to properly inspect the unit to ensure it is in proper working order before using it past the last open crosscut or where methane may enter the air current.
(d) If 1.0 percent or more methane is detected, the procedures in 30 CFR 57.22234 will be followed.
The petitioner asserts that the alternative method proposed will at all times guarantee no less than the same measure of protection afforded the miners under the mandatory standard.
Information Security Oversight Office (ISOO), National Archives and Records Administration (NARA).
Notice of federal advisory committee meeting.
We are announcing an upcoming National Industrial Security Program Policy Advisory Committee (NISPPAC) meeting in accordance with the Federal Advisory Committee Act and implementing regulations.
The meeting will be on April 27, 2022, from 10:00 a.m. to 12:00 p.m. EDT.
This meeting will be a virtual meeting. See supplementary procedures below.
Heather Harris Pagán, ISOO Senior Program Analyst, by telephone at 202.357.5351 or by email at
This virtual meeting is open to the public in accordance with the Federal Advisory Committee Act (5 U.S.C. app 2) and implementing regulations at 41 CFR 101-6. The Committee will discuss National Industrial Security Program policy matters.
In accordance with the Federal Advisory Committee Act (Pub. L. 92-463, as amended), the National Science Foundation (NSF) announces the following meeting:
The meeting will be held virtually among the Advisory Committee members. Livestreaming will be accessible through the following pages: May 11th—
Nuclear Regulatory Commission
Draft regulatory guide; request for comment.
The U.S. Nuclear Regulatory Commission (NRC) is issuing for public comment a draft regulatory guide (DG), DG-1400, “Qualification of Class 1E Connection Assemblies for Production and Utilization Facilities.” This DG is the proposed Revision 2 to Regulatory Guide (RG) 1.156. Methods described in RG 1.156 are acceptable to the NRC staff pertaining to the environmental qualification of connectors, terminations, and environmental seals in combination with cables or wires as assemblies for service in nuclear power plants to ensure that the connection assemblies can perform their safety functions.
Submit comments by May 11, 2022. Comments received after this date will be considered if it is practical to do so, but the NRC is able to ensure consideration only for comments received on or before this date.
You may submit comments by any of the following methods; however, the NRC encourages electronic comment submission through the Federal rulemaking website:
•
•
For additional direction on obtaining information and submitting comments, see “Obtaining Information and Submitting Comments” in the
James Steckel, Office of Nuclear Regulatory Research, telephone: 301-415-1026, email:
Please refer to Docket ID NRC-2022-0083 when contacting the NRC about the availability of information for this action. You may obtain publicly available information related to this action by any of the following methods:
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•
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The NRC encourages electronic comment submission through the Federal rulemaking website (
The NRC cautions you not to include identifying or contact information that you do not want to be publicly disclosed in your comment submission. The NRC will post all comment submissions at
If you are requesting or aggregating comments from other persons for submission to the NRC, then you should inform those persons not to include identifying or contact information that they do not want to be publicly disclosed in their comment submission. Your request should state that the NRC does not routinely edit comment submissions to remove such information before making the comment submissions available to the public or entering the comment into ADAMS.
The NRC is issuing for public comment a DG in the NRC's “Regulatory Guide” series. This series was developed to describe methods that are acceptable to the NRC staff for implementing specific parts of the agency's regulations, to explain techniques that the staff uses in evaluating specific issues or postulated events, and to describe information that the staff needs in its review of applications for permits and licenses.
The DG, entitled “Qualification of Class 1E Connection Assemblies for Production and Utilization Facilities,” is temporarily identified by its task number, DG-1400.
Production and utilization facilities licensed under part 50 of title 10 of the
The staff is also issuing for public comment a draft regulatory analysis (ADAMS Accession No. ML21288A561). The staff developed a regulatory analysis to assess the value of issuing or revising a regulatory guide as well as alternative courses of action.
Issuance of DG-1400, if finalized, would not constitute backfitting as that term is defined in 10 CFR 50.109, “Backfitting,” and as described in NRC Management Directive (MD) 8.4, “Management of Backfitting, Forward Fitting, Issue Finality, and Information Requests”; would not constitute forward fitting as that term is defined and described in MD 8.4; and would not affect issue finality of any approval issued under 10 CFR part 52, “Licenses, Certifications, and Approvals for Nuclear Power Plants.” As explained in DG-1400, applicants and licensees are not required to comply with the positions set forth in DG-1400.
A member of the public may, at any time, submit suggestions to the NRC for improvement of existing RGs or for the development of new RGs. Suggestions can be submitted on the NRC's public website at
For the Nuclear Regulatory Commission.
Weeks of April 11, 18, 25, May 2, 9, 16, 2022. All listed meeting times (see
Multiple locations (see
Public.
Members of the public may request to receive the information in these notices electronically. If you would like to be added to the distribution, please contact the Nuclear Regulatory Commission, Office of the Secretary, Washington, DC 20555, at 301-415-1969, or by email at
There are no meetings scheduled for the week of April 11, 2022.
There are no meetings scheduled for the week of April 25, 2022.
There are no meetings scheduled for the week of May 2, 2022.
There are no meetings scheduled for the week of May 16, 2022.
For more information or to verify the status of meetings, contact Wesley Held at 301-287-3591 or via email at
The NRC is holding the meetings under the authority of the Government in the Sunshine Act, 5 U.S.C. 552b.
For the Nuclear Regulatory Commission.
Pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934 (“Act”),
ICE Clear Europe Limited (“ICE Clear Europe” or the “Clearing House”) submits this partial amendment (“Amendment No. 1”) to its previously submitted rule changes (the “Initial Filing”) to amend its Futures & Options Guaranty Fund Policy (“F&O Guaranty Fund Policy” or “Policy”).
In its filing with the Commission, ICE Clear Europe included statements concerning the purpose of and basis for the proposed rule change and discussed any comments it received on the proposed rule change. The text of these statements may be examined at the places specified in Item IV below. ICE Clear Europe has prepared summaries, set forth in sections (A), (B), and (C) below, of the most significant aspects of such statements.
The purpose of Amendment No. 1 is to add Section IIB (which is a statement of the Clearing House on the burden of competition) to Exhibit 1A of the Initial Filing and to add the filing number SR-ICEEU-2022-003 to the header in page 25 of confidential Exhibit 5 as set out in the Initial Filing. The Clearing House's statement on the burden of competition was already described in Form 19b-4 of the Initial Filing but omitted from Exhibit 1A of the Initial Filing.
The description of the statutory basis for the amendments set forth in the Initial Filing, as amended hereby, is unchanged.
ICE Clear Europe does not believe the proposed amendments would have any impact, or impose any burden, on competition not necessary or appropriate in furtherance of the purposes of the Act. The amendments are being adopted to update and clarify the Clearing House's F&O Guaranty Fund Policy, which relates to the Clearing House's internal processes for determining and reviewing the F&O Fund level in accordance with the Rules. ICE Clear Europe does not believe the amendments will result in any immediate change to the F&O Fund level. Further, ICE Clear Europe does not believe the amendments would affect the costs of clearing, the ability of market participants to access clearing, or the market for clearing services generally. Therefore, ICE Clear Europe does not believe the proposed rule change imposes any burden on competition that is not necessary or appropriate in furtherance of the purposes of the Act.
The statement on comments on the proposed rule change in the Initial Filing, as set forth in the Initial Filing, as amended hereby, is unchanged.
The foregoing rule change has become effective pursuant to Section 19(b)(3)(A) of the Act
Interested persons are invited to submit written data, views, and arguments concerning the foregoing, including whether the proposed rule change is consistent with the Act. Comments may be submitted by any of the following methods:
• Use the Commission's internet comment form (
• Send an email to
• Send paper comments in triplicate to Secretary, Securities and Exchange Commission, 100 F Street NE, Washington, DC 20549-1090.
All comments received will be posted without change. Persons submitting comments are cautioned that we do not redact or edit personal identifying information from comment submissions. You should submit only information that you wish to make available publicly. All submissions should refer to File Number SR-ICEEU-2022-003 and should be submitted on or before May 2, 2022.
For the Commission, by the Division of Trading and Markets, pursuant to delegated authority.
2:00 p.m. on Thursday, April 14, 2022.
The meeting will be held via remote means and/or at the Commission's headquarters, 100 F Street NE, Washington, DC 20549.
This meeting will be closed to the public.
Commissioners, Counsel to the Commissioners, the Secretary to the Commission, and recording secretaries will attend the closed meeting. Certain staff members who have an interest in the matters also may be present.
In the event that the time, date, or location of this meeting changes, an announcement of the change, along with the new time, date, and/or place of the meeting will be posted on the Commission's website at
The General Counsel of the Commission, or his designee, has certified that, in his opinion, one or more of the exemptions set forth in 5 U.S.C. 552b(c)(3), (5), (6), (7), (8), 9(B) and (10) and 17 CFR 200.402(a)(3), (a)(5), (a)(6), (a)(7), (a)(8), (a)(9)(ii) and (a)(10), permit consideration of the scheduled matters at the closed meeting.
The subject matter of the closed meeting will consist of the following topics:
At times, changes in Commission priorities require alterations in the scheduling of meeting agenda items that may consist of adjudicatory, examination, litigation, or regulatory matters.
For further information; please contact Vanessa A. Countryman from the Office of the Secretary at (202) 551-5400.
Pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934 (“Act”),
The Exchange proposes to extend the expiration date of the temporary amendments in SR-NASDAQ-2020-076 from March 31, 2022, to July 31, 2022.
The text of the proposed rule change is available on the Exchange's website at
In its filing with the Commission, the Exchange included statements concerning the purpose of and basis for the proposed rule change and discussed any comments it received on the proposed rule change. The text of these statements may be examined at the places specified in Item IV below. The Exchange has prepared summaries, set forth in sections A, B, and C below, of the most significant aspects of such statements.
The Exchange proposes to continue to harmonize Exchange Rules 1015, 9261, 9524 and 9830 with recent changes by the Financial Industry Regulatory Authority, Inc. (“FINRA”) to its Rules 1015, 9261, 9524 and 9830 in response to the COVID-19 global health crisis and the corresponding need to restrict in-person activities. The Exchange originally filed proposed rule change SR-NASDAQ-2020-076, which allows the Exchange's Office of Hearing Officers (“OHO”) and the Exchange Review Council (“ERC”) to conduct hearings, on a temporary basis, by video conference, if warranted by the current COVID-19-related public health risks posed by an in-person hearing. In December 2021, the Exchange filed a proposed rule change, SR-NASDAQ-2021-104, to extend the expiration date of the temporary amendments in SR- NASDAQ-2020-076 from December 31, 2021, to March 31, 2022.
While there are material signs of improvement, uncertainty still remains for the coming months. The continued presence of COVID-19 variants, dissimilar vaccination rates throughout the United States, and the current medium to high COVID-19 community levels in many states indicate that COVID-19 remains an active and real public health concern.
On November 5, 2020, the Exchange filed, and subsequently extended to March 31, 2022, SR-NASDAQ-2020-076, to temporarily amend Exchange Rules 1015, 9261, 9524 and 9830 to grant OHO and the ERC authority
As set forth in the previous filings, the Exchange also relies on COVID-19 data and the guidance issued by public health authorities to determine whether the current public health risks presented by an in-person hearing may warrant a hearing by video conference.
The Exchange has filed the proposed rule change for immediate effectiveness and has requested that the SEC waive the requirement that the proposed rule change not become operative for 30 days after the date of the filing, so the Exchange can implement the proposed rule change immediately.
The Exchange believes that its proposal is consistent with Section 6(b) of the Act,
The proposed rule change, which extends the expiration date of the temporary amendments to the Exchange rules set forth in SR-NASDAQ-2020-076, will continue to aid the Exchange's efforts to timely conduct hearings in connection with its core adjudicatory functions. Given the current and frequently changing COVID-19 conditions and the uncertainty around when those conditions will see meaningful, widespread, and sustained improvement, without this relief allowing OHO and ERC hearings to proceed by video conference, the Exchange might be required to postpone some or almost all hearings indefinitely. The Exchange must be able to perform its critical adjudicatory functions to fulfill its statutory obligations to protect investors and maintain fair and orderly markets. As such, this relief is essential to the Exchange's ability to fulfill its statutory obligations and allows hearing participants to avoid the serious COVID-19-related health and safety risks associated with in-person hearings.
Among other things, this relief will allow OHO to conduct temporary cease and desist proceedings by video conference so that the Exchange can take immediate action to stop ongoing customer harm and will allow the ERC to timely provide members, disqualified individuals and other applicants an approval or denial of their applications. As set forth in detail in SR-NASDAQ-2020-076, this temporary relief allowing OHO and ERC hearings to proceed by video conference accounts for fair process considerations and will continue to provide fair process while avoiding the COVID-19-related public health risks for hearing participants. Accordingly, the proposed rule change extending this temporary relief is in the public interest and consistent with the Act's purpose.
The Exchange does not believe that the temporary proposed rule change will impose any burden on competition not necessary or appropriate in furtherance of the purposes of the Act. As set forth in SR-NASDAQ-2020-076, the proposed rule change is intended solely to extend temporary relief necessitated by the continued impacts of the COVID-19 outbreak and the related health and safety risks of conducting in-person activities. The Exchange believes that the proposed rule change will prevent unnecessary impediments to its operations, including its critical adjudicatory processes, and its ability to fulfill its statutory obligations to protect investors and maintain fair and orderly markets that would otherwise result if the temporary amendments were to expire on March 31, 2022.
No written comments were either solicited or received.
Because the foregoing proposed rule change does not: (i) Significantly affect the protection of investors or the public interest; (ii) impose any significant burden on competition; and (iii) become operative for 30 days from the date on which it was filed, or such shorter time as the Commission may designate, it has become effective pursuant to Section 19(b)(3)(A)(iii) of the Act
A proposed rule change filed under Rule 19b-4(f)(6)
At any time within 60 days of the filing of the proposed rule change, the Commission summarily may temporarily suspend such rule change if it appears to the Commission that such action is necessary or appropriate in the public interest, for the protection of investors, or otherwise in furtherance of the purposes of the Act. If the Commission takes such action, the Commission shall institute proceedings to determine whether the proposed rule should be approved or disapproved.
Interested persons are invited to submit written data, views, and arguments concerning the foregoing, including whether the proposed rule change is consistent with the Act. Comments may be submitted by any of the following methods:
• Use the Commission's internet comment form (
• Send an email to
• Send paper comments in triplicate to Secretary, Securities and Exchange Commission, 100 F Street NE, Washington, DC 20549-1090.
For the Commission, by the Division of Trading and Markets, pursuant to delegated authority.
On February 10, 2022, ICE Clear Europe Limited (“ICE Clear Europe”) filed with the Securities and Exchange Commission (“Commission”), pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934 (the “Act”),
The proposed rule change would amend the CDS Clearing Back-Testing Policy and CDS Clearing Stress-Testing Policy to remediate the findings of an independent validation. The discussion below describes the proposed amendments in the order they appear in each policy.
The proposed rule change first would correct the capitalization of the title of Section 2.1. In that section, the proposed rule change also would correct a typographical error by replacing the word “follow” with “follows.” In addition to those typographical corrections, the proposed rule change would add new language at the end of the section. This new language would explain that ICE Clear Europe conducts several types of backtests and that ICE Clear Europe adopts all the available reliable and validated data for each backtest in order to assess the model performance over a long period, where stress market conditions and idiosyncratic events are likely to have manifested.
Next, the proposed rule change would add a new Section 2.2 and re-number the remaining sections accordingly. New Section 2.2 would explain that ICE Clear Europe backtests the CDS risk model with overlapping data and non-overlapping data. This section also would explain that ICE Clear Europe prefers to backtest with non-overlapping data for static portfolios. Because the CDS risk model covers a multi-days risk horizon, the lack of sufficiently long data sets limits ICE Clear Europe's ability to use non-overlapping data, however. ICE Clear Europe would address this limitation by using overlapping data to make a statistically significant sample.
This new Section 2.2, as well as the new language at the end of Section 2.1, would document ICE Clear Europe's existing practice of backtesting using overlapping data and non-overlapping data, and, in doing so, using all the available reliable and validated data for each backtest in order to assess the model performance over a long period.
The proposed rule change next would amend re-numbered Section 2.4 (currently Section 2.2), which describes the Basel Traffic Light System (“BTLS”).
The proposed rule change would re-number current Section 2.3 to Section 3.1, and add a title for a new Section 3 immediately before re-numbered Section 3.1. The proposed rule change would change the title of re-numbered Section 3.1 to Multi-days horizon backtesting. Within re-numbered Section 3.1, the proposed rule change would make four clarifications. First, the proposed rule change would specify that the observed loss is the minimum net asset value change over 5 days for house accounts, as distinct from 7 days for client accounts. Second, the proposed rule change would specify that the difference between the maximum observed unrealized loss and the backtested component of initial margin is also known as the “back-test exceedances.” Third, the proposed rule change would clarify that the maximum observed unrealized loss is also known as the “worst N-days P&L.”
Next, the proposed rule change would correct the capitalization of the title of Section 3.2 (re-numbered from Section 2.4). In that section the proposed rule change also would explain that the last two examples in Table 2 could be the 4-days P/L or 3-days P/L.
In Section 3.3 (re-numbered from Section 2.5), the proposed rule change would clarify that a minimum of one year of observations is required to define the statistical significance of backtesting results.
The proposed rule change would correct the capitalization of the title of Section 3.4 (re-numbered from Section 2.6). In that section the proposed rule change also would describe how ICE Clear Europe backtests special strategy portfolios. ICE Clear Europe backtests special strategy portfolios that cover certain trading strategies, such as Index arbitrage. The proposed rule change also would specify that the Clearing Risk Department reviews backtest results at the 99.5% quantile monthly, while backtest results at the 99.75% quantile would be reviewed on an ad-hoc basis, when there is a large market move. Finally, the proposed rule change would delete a table showing portfolio construction for special strategy backtesting because it is unnecessary in light of the new detail added to Section 3.4.
The proposed rule change would correct the capitalization of the title of Section 3.5 (re-numbered from Section 2.7).
The proposed rule would add a new section numbered 3.6 to explain how ICE Clear Europe backtests stylized portfolios. Stylized portfolios are portfolios that replicate certain trading strategies. This new section would explain that the Clearing Risk Department backtests a series of stylized portfolios when ICE Clear Europe clears a new risk factor.
The proposed rule change would correct the capitalization of the title of Section 3.7 (re-numbered from Section 2.8).
Finally, the proposed rule change would amend Section 4 (re-numbered from Section 3). Section 4 would describe ICE Clear Europe's univariate backtesting. The proposed rule change would clarify that the Clearing Risk Department reviews backtest results at the 99.5% quantile monthly and reports these results to the Model Oversight Committee monthly. Backtest results at the 99.75% quantile would be reviewed ad-hoc, when stress market conditions might cause breaches at the 99.5% quantile.
The proposed rule change would make one change to the CDS Stress-Testing Policy. In Section 4.1.2 the proposed rule change would add the words “and hypothetical” to a paragraph describing forward-looking credit events scenarios. The change would clarify that the described forward-looking credit events scenarios are based on both historically observed and hypothetical extreme but plausible market scenarios. ICE Clear Europe represents that this change reflects current stress-testing practice.
Section 19(b)(2)(C) of the Act directs the Commission to approve a proposed rule change of a self-regulatory organization if it finds that such proposed rule change is consistent with the requirements of the Act and the rules and regulations thereunder applicable to such organization.
Section 17A(b)(3)(F) of the Act requires, among other things, that the rules of ICE Clear Europe be designed to promote the prompt and accurate clearance and settlement of securities transactions and, to the extent applicable, derivative agreements, contracts, and transactions.
The Commission believes that the proposed rule change would make the CDS Back-Testing Policy and CDS Stress-Testing Policy easier to use and apply. One way it would do so is by explaining ICE Clear Europe's backtesting and stress testing practices. These practices would include: A preference for backtesting using non-overlapping data; corrections to exceedances in overlapping data to conform to the assumption from the BTLS that losses are time-independent; the requirement of a minimum of one year of observations to define the statistical significance of backtesting results; use of all available reliable and validated data for each backtest; and, with respect to the CDS Stress-Testing Policy, that forward-looking credit event scenarios are based on both historically observed and hypothetical extreme but plausible market scenarios. The Commission believes that documenting these practices in ICE Clear Europe's policies should facilitate more consistent and predictable backtesting and stress testing.
Another way the proposed rule change would make the CDS Back-Testing Policy easier to use and apply is by explaining how ICE Clear Europe backtests special strategy portfolios. The proposed rule change would describe the set of portfolios used in backtesting of special strategy portfolios, and also would explain how ICE Clear Europe reviews and reports results at 99.5% quantiles and 99.75% quantiles for special strategy portfolios and univariate backtesting. The proposed rule change also would explain how ICE Clear Europe backtests stylized portfolios when it clears a new risk factor. The Commission believes that documenting such additional explanations would help to clarify how ICE Clear Europe backtests portfolios that use special trading strategies and reports the results of those backtests.
The proposed rule change also would make the CDS Back-Testing Policy easier to use and apply by clarifying certain terminology used in the policy and by correcting typographical errors. For example, the proposed rule change would clarify that the shortfall between the maximum observed unrealized loss and the backtested component of initial margin is also known as “back-test exceedances” and that the maximum observed unrealized loss is also known as “worst N-days P&L.” The proposed rule also would clarify that the observed loss is calculated as the minimum net asset value change over 5 days for house accounts as distinct from 7 days for client accounts, and that the last two examples in Table 2 could be the 4-days P/L or 3-days P/L. In addition to these clarifications, the proposed rule change would correct typographical errors and re-number sections. The Commission believes these particular changes would help to increase the clarity and accuracy of the CDS Back-Testing Policy.
Because ICE Clear Europe backtests and stress tests the CDS risk model using the CDS Back-Testing Policy and CDS Stress-Testing Policy, the Commission believes that these improvements to the policies would improve ICE Clear Europe's backtesting and stress testing. Improved backtesting and stress testing should help ICE Clear Europe to find deficiencies in, and correct, the CDS risk model. Better risk models should, in turn, increase the likelihood that ICE Clear Europe will have sufficient financial resources in excess of margin to address losses that could arise from the default of a Clearing Member. The Commission believes that by increasing the likelihood that ICE Clear Europe will have sufficient financial resources, the proposed rule change would enhance ICE Clear Europe's ability to continue to promptly and accurately clear and settle securities transactions during periods of market stress, consistent with Section 17A(b)(3)(F) of the Act.
Therefore, the Commission finds that the proposed rule change is consistent with Section 17A(b)(3)(F) of the Act.
Rule 17Ad-22(e)(4)(vi)(A) requires that ICE Clear Europe establish, implement, maintain and enforce written policies and procedures reasonably designed to effectively identify, measure, monitor, and manage its credit exposures to participants and those arising from its payment, clearing, and settlement processes, including by testing the sufficiency of its total financial resources available to meet the minimum financial resource requirements under Rule 17Ad-22(e)(4)(i) through (iii),
Therefore, the Commission finds that this aspect of the proposed rule change is consistent with Rule 17Ad-22(e)(4)(vi)(A).
Rule 17Ad-22(e)(6)(vi)(A) requires that ICE Clear Europe establish, implement, maintain and enforce written policies and procedures reasonably designed to cover its credit exposures to its participants by establishing a risk-based margin system that, at a minimum, is monitored by management on an ongoing basis and is regularly reviewed, tested, and verified
On the basis of the foregoing, the Commission finds that the proposed rule change is consistent with the requirements of the Act, and in particular, with the requirements of Section 17A(b)(3)(F) of the Act,
For the Commission, by the Division of Trading and Markets, pursuant to delegated authority.
Pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934 (“Act”),
The Exchange proposes to extend the expiration date of the temporary amendments in SR-Phlx-2020-53 from March 31, 2022, to July 31, 2022.
The text of the proposed rule change is available on the Exchange's website at
In its filing with the Commission, the Exchange included statements concerning the purpose of and basis for the proposed rule change and discussed any comments it received on the proposed rule change. The text of these statements may be examined at the places specified in Item IV below. The Exchange has prepared summaries, set forth in sections A, B, and C below, of the most significant aspects of such statements.
The Exchange proposes to continue to harmonize Exchange Rule General 3, Section 16 with recent changes by the Financial Industry Regulatory Authority, Inc. (“FINRA”) to its Rule 1015 in response to the COVID-19 global health crisis and the corresponding need to restrict in-person activities.
As set forth in SR-Phlx-2020-53, the Exchange also relies on COVID-19 data and criteria to determine whether the current public health risks presented by an in-person hearing may warrant a hearing by video conference. Based on that data and criteria, the Exchange does not believe the COVID-19-related health concerns necessitating this relief will meaningfully subside by March 31, 2022, and believes that there will be a continued need for this temporary relief beyond that date. Accordingly, the Exchange proposes to extend the expiration date of the temporary rule amendments originally set forth in SR-Phlx-2020-53 from March 31, 2022, to July 31, 2022. The extension of the temporary amendments allowing for specified ERC hearings to proceed by video conference will allow the Exchange's critical adjudicatory functions to continue to operate effectively in these extraordinary circumstances—enabling the Exchange to fulfill its statutory obligations to protect investors and maintain fair and orderly markets—while also protecting the health and safety of hearing participants.
The Exchange has filed the proposed rule change for immediate effectiveness and has requested that the SEC waive the requirement that the proposed rule change not become operative for 30 days after the date of the filing, so the Exchange can implement the proposed rule change immediately.
The Exchange believes that its proposal is consistent with Section 6(b) of the Act,
The proposed rule change, which extends the expiration date of the temporary amendments to the Exchange rules set forth in SR-Phlx-2020-53, will continue to aid the Exchange's efforts to timely conduct hearings in connection with its core adjudicatory functions. Given the current and frequently changing COVID-19 conditions and the uncertainty around when those conditions will see meaningful, widespread and sustained improvement, without this relief allowing ERC hearings to proceed by video conference, the Exchange might be required to postpone some or almost all hearings indefinitely. The Exchange must be able to perform its critical adjudicatory functions to fulfill its statutory obligations to protect investors and maintain fair and orderly markets. As such, this relief is essential to the Exchange's ability to fulfill its statutory obligations and allows hearing participants to avoid the serious COVID-19-related health and safety risks associated with in-person hearings.
Among other things, this relief will allow the ERC to timely provide members, disqualified individuals and other applicants an approval or denial of their applications. As set forth in detail in SR-Phlx-2020-53, this temporary relief allowing ERC hearings to proceed by video conference accounts for fair process considerations and will continue to provide fair process while avoiding the COVID-19-related public health risks for hearing participants. Accordingly, the proposed rule change extending this temporary relief is in the public interest and consistent with the Act's purpose.
The Exchange does not believe that the temporary proposed rule change will impose any burden on competition not necessary or appropriate in furtherance of the purposes of the Act. As set forth in SR-Phlx-2020-53, the proposed rule change is intended solely to extend temporary relief necessitated by the continued impacts of the COVID-19 outbreak and the related health and safety risks of conducting in-person activities. The Exchange believes that the proposed rule change will prevent unnecessary impediments to its operations, including its critical adjudicatory processes, and its ability to fulfill its statutory obligations to protect investors and maintain fair and orderly markets that would otherwise result if the temporary amendments were to expire on March 31, 2022.
No written comments were either solicited or received.
Because the foregoing proposed rule change does not: (i) Significantly affect the protection of investors or the public interest; (ii) impose any significant burden on competition; and (iii) become operative for 30 days from the date on which it was filed, or such shorter time as the Commission may designate, it has become effective pursuant to Section 19(b)(3)(A)(iii) of the Act
A proposed rule change filed under Rule 19b-4(f)(6)
At any time within 60 days of the filing of the proposed rule change, the Commission summarily may temporarily suspend such rule change if it appears to the Commission that such action is necessary or appropriate in the public interest, for the protection of investors, or otherwise in furtherance of the purposes of the Act. If the Commission takes such action, the Commission shall institute proceedings to determine whether the proposed rule should be approved or disapproved.
Interested persons are invited to submit written data, views, and arguments concerning the foregoing, including whether the proposed rule change is consistent with the Act. Comments may be submitted by any of the following methods:
• Use the Commission's internet comment form (
• Send an email to
• Send paper comments in triplicate to Secretary, Securities and Exchange Commission, 100 F Street NE, Washington, DC 20549-1090.
For the Commission, by the Division of Trading and Markets, pursuant to delegated authority.
Pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934 (the “Act”),
The Exchange is filing with the Commission a proposed rule change to amend the Exchange's fee schedule applicable to Members
In its filing with the Commission, the Exchange included statements concerning the purpose of and basis for the proposed rule change and discussed any comments it received on the proposed rule change. The text of these statements may be examined at the places specified in Item IV below. The Exchange has prepared summaries, set
The purpose of the proposed rule change is to amend the Fee Schedule to adopt fees the Exchange will charge to Members and non-Members for each of its three proprietary market data feeds, namely MEMOIR Depth, MEMOIR Top, and MEMOIR Last Sale (collectively, the “Exchange Data Feeds”). As set forth below, the Exchange believes that the proposed fees are fair and reasonable and has based its proposal on the fact that competitive forces exist with respect to the Exchange Data Feeds, a comparison to competitor pricing, as well as a cost analysis intended to provide transparency to the Commission and to the industry at large. The Exchange is proposing to implement the proposed fees on April 1, 2022.
Before setting forth the additional details regarding the existence of competitive forces, the comparison to competitor pricing and the Exchange's cost analysis for transparency purposes, immediately below is a description of the proposed fees.
The Exchange offers three separate data feeds to subscribers—MEMOIR Depth, MEMOIR Top and MEMOIR Last Sale. The proposed pricing for each of these products is set forth below.
The MEMOIR Depth feed is a MEMX-only market data feed that contains all displayed orders for securities trading on the Exchange (
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• In connection with a Distributor's distribution of the MEMOIR Depth feed, the Distributor must count as one User each unique User that the Distributor has entitled to have access to the MEMOIR Depth feed.
• Distributors must report each unique individual person who receives access through multiple devices or multiple methods (
• If a Distributor entitles one or more individuals to use the same device, the Distributor must include only the individuals, and not the device, in the count. Thus, Distributors would not be required to report User device counts associated with a User's display use of the data feed.
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The MEMOIR Top feed is a MEMX-only market data feed that contains top of book quotations based on equity orders entered into the System.
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• In connection with an External Distributor's distribution of the MEMOIR Top feed, the Distributor must count as one User each unique User that the Distributor has entitled to have access to the MEMOIR Top feed.
• External Distributors must report each unique individual person who receives access through multiple devices or multiple methods (
• If an External Distributor entitles one or more individuals to use the same device, the Distributor must include only the individuals, and not the device, in the count. Thus, Distributors would not be required to report User device counts associated with a User's display use of the data feed.
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The MEMOIR Last Sale feed is a MEMX-only market data feed that contains only execution information based on equity orders entered into the System.
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• In connection with an External Distributor's distribution of the MEMOIR Last Sale feed, the Distributor must count as one User each unique User that the Distributor has entitled to have access to the MEMOIR Last Sale feed.
• External Distributors must report each unique individual person who receives access through multiple devices or multiple methods (
• If an External Distributor entitles one or more individuals to use the same device, the Distributor must include only the individuals, and not the device, in the count. Thus, Distributors would not be required to report User device counts associated with a User's display use of the data feed.
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The Commission has repeatedly expressed its preference for competition over regulatory intervention in determining prices, products, and services in the securities markets. In Regulation NMS, the Commission highlighted the importance of market forces in determining prices and SRO revenues, and also recognized that current regulation of the market system “has been remarkably successful in promoting market competition in its broader forms that are most important to investors and listed companies.”
The recent growth of MEMX's market share demonstrates the competitive marketplace in which the Exchange operates. The Exchange launched in September 2020 and slowly grew over the next several months as it completed its staged rollout intended to ensure market stability. In January 2021, the Exchange averaged approximately 0.6% of consolidated trading volume.
As the Exchange's transaction market share has increased, so has the value of its market data. In addition to achieving over 4% of consolidated volume, the Exchange's NBBO Quote Market Share (
As a new entrant into the exchange industry, the Exchange is particularly subject to competitive forces. While the Exchange has been able to rapidly grow its market share since its launch in September 2020, MEMX operates only a single U.S. equities exchange with market share that remains significantly lower than the market share of the largest exchange groups. As noted above, MEMX currently does not charge fees for market data provided by the Exchange. The objective of this approach was to eliminate any fee-based barriers for Members when MEMX launched as a national securities exchange in 2020, which the Exchange believes has been helpful in its ability to attract order flow as a new exchange. The Exchange also has not charged for market data because MEMX believes that any exchange should first deliver meaningful value to Members and other market participants before charging fees for its products and services. The Exchange believes that its proposed approach to market data fees is reasonable based on the existence of competition, a comparison to competitors and the cost analysis presented below.
The Exchange is not required to make the Exchange Data Feeds available or to offer any specific pricing alternatives to any customers, nor is any firm required to purchase the Exchange Data Feeds. Firms that choose to subscribe to the Exchange Data Feeds do so for the primary goals of using it to increase their revenues, reduce their expenses, and in some instances to compete directly with the Exchange (including for order flow). Those firms are able to determine for themselves whether or not the Exchange Data Feeds or any other similar products are attractively priced.
Because the Exchange Data Feeds have not been previously subject to fees, the Exchange does not know the full impact of the proposed fees on current data recipients because subscribers may choose to reduce or eliminate their use of MEMX data. The Exchange anticipates that there might be data recipients of the Exchange Data Feeds that subscribe only because they are free and might choose to discontinue using the products once fees are implemented. A data recipient that chooses to discontinue subscribing to the Exchange's Data Feeds may also choose
The proposed fee structure is not novel but is instead comparable to the fee structure currently in place for the equities exchanges operated by Cboe Global Markets, Inc., in particular BZX.
The fees for the BZX Depth feed—which like the MEMOIR Depth feed, includes top of book, depth of book, trades, and security status messages—consist of an internal distributor access fee of $1,500 per month (the same as the Exchange's proposed rate), an external distributor access fee of $5,000 per month (two times the Exchange's proposed rate), a non-display usage fee for non-Trading Platforms of $2,000 per month ($500 more than the Exchange's proposed rate), a non-display usage fee for Trading Platforms of $5,000 per month ($1,000 more than the Exchange's proposed rate), a Professional User fee (per User) of $40 per month ($10 more than the Exchange's proposed rate), and a Non-Professional User fee (per User) of $5 per month ($2 more than the Exchange's proposed rate).
The comparisons of the MEMOIR Last Sale feed and MEMOIR Top feed to the BZX Last Sale feed and BZX Top feed, respectively, are similar in that BZX generally maintains the same fee structure proposed by the Exchange and BZX charges fees that are comparable to, but in most cases higher than, the Exchange's proposed fees. Notably, the User fees proposed by the Exchange for External Distributors of MEMOIR Last Sale and MEMOIR Top ($0.01 for both Professional Users and Non-Professional Users) are considerably lower than those charged by BZX for BZX Top and BZX Last Sale ($4 for Professional Users and $0.10 for Non-Professional Users).
By charging the same low rate for all Users of MEMOIR Top and MEMOIR Last Sale the Exchange believes it is proposing a structure that is not only lower cost but that will also simplify reporting for subscribers who externally distribute these data feeds to Users, as the Exchange believes that categorization of Users as Professional and Non-Professional is not meaningful for these products and requiring such categorization would expose Firms to unnecessary audit risk of paying more for mis-categorization. However, the Exchange does not believe this is equally true for MEMOIR Depth, as most individual Users of MEMOIR Depth are likely to be Professional Users. The Exchange believes that Professional Users are more likely to benefit economically from the use of MEMOIR Depth data than Non-Professional Users, and the Exchange believes that the higher fee charged to Professional Users is reasonable and appropriate given this difference in value.
In general, the Exchange believes that exchanges, in setting fees of all types, should meet very high standards of transparency to demonstrate why each new fee or fee increase meets the Exchange Act requirements that fees be reasonable, equitably allocated, not unfairly discriminatory, and not create an undue burden on competition among members and markets. In particular, the Exchange believes that each exchange should take extra care to be able to demonstrate that these fees are based on its costs and reasonable business needs. Accordingly, in proposing to charge fees for market data, the Exchange has sought to be especially diligent in assessing those fees in a transparent way against its own aggregate costs of providing the related service, and also carefully and transparently assessing the impact on Members—both generally and in relation to other Members,
In October 2021, MEMX completed a study of its aggregate costs to produce market data and connectivity (the “Cost Analysis”). The Cost Analysis required a detailed analysis of MEMX's aggregate baseline costs, including a determination and allocation of costs for core services provided by the Exchange—transactions, market data, membership services, physical connectivity, and application sessions (which provide order entry, cancellation and modification functionality, risk functionality, ability to receive drop copies, and other functionality). MEMX separately divided its costs between those costs necessary to deliver each of these core services, including infrastructure, software, human resources (
The Exchange recently filed to adopt fees for connectivity services, to which the Exchange allocated a monthly aggregate monthly cost of $1,143,715.
The Exchange notes that it is difficult, if not impossible, to purely split the costs of generating and producing market data and the costs associated with operation of the system that processes (and displays through market data) orders, cancellations, and transactions and performs related functions (collectively, together with market data, “Transaction Services”). Instead, because the Exchange believes its costs for providing Transaction Services, including market data, are inextricably linked, the cost analysis below and corollary margin discussion includes all Transaction Services. Through the Cost Analysis, MEMX calculated its aggregate monthly costs for providing Transaction Services, at $2,797,265. The Exchange expects to recoup the majority of this cost from transaction fees and revenues from the public data feeds in which the Exchange participates and receives revenues (
The following chart details the individual line-item (monthly) costs considered by MEMX to be related to offering Transaction Services (transactions and market data) to its Members and other customers.
For personnel costs (Human Resources), MEMX calculated an allocation of employee time for employees whose functions include directly providing services necessary to offer Transaction Services, including performance thereof, as well as personnel with ancillary functions related to establishing and providing such services (such as information security and finance personnel). The Human Resources cost was calculated using a blended rate of compensation reflecting salary, equity and bonus compensation, benefits, payroll taxes, and 401(k) matching contributions. The Infrastructure and Connectivity Technology cost includes servers, switches and related hardware required to provide physical access to the Exchange, some of which is owned by the Exchange and some of which is leased by the Exchange in order to allow efficient periodic technology refreshes. Exchange Software and Technology Consulting includes all costs for third party software necessary to offer
In conducting its Cost Analysis, the Exchange did not allocate any of its expenses in full to any core service and did not double-count any expenses. Instead, as described above, the Exchange allocated applicable cost drivers across its core services and used the same Cost Analysis to form the basis of the Connectivity Filing and this filing, proposing fees for Exchange Data Feeds. For instance, as described in the Connectivity Filing, in calculating the Human Resources expenses to be allocated to physical connections, the Exchange allocated network infrastructure personnel with a high percentage of the cost of such personnel (75%) given their focus on functions necessary to provide physical connections. The salaries of those same personnel were allocated only 2.5% to application sessions and the remaining 22.5% was allocated to transactions and market data.
In total, again as explained in the Connectivity Filing, the Exchange allocated 13.8% of its personnel costs to providing physical connections and 7.7% of its personnel costs to providing application sessions, for a total allocation of 21.5% Human Resources expense to provide connectivity services. In turn, the Exchange allocated the remaining 78.5% of its Human Resources expense to Membership (less than 1%) and Transaction Services (77.5%). Thus, again, the Exchange's allocations of cost across core services were based on real costs of operating the Exchange and were not double-counted across the core services or their associated revenue streams.
As another example, the Exchange allocated depreciation expense to all core services, including Transaction Services, but in different amounts. The Exchange believes it is reasonable to allocate the identified portion of such expense because such expense includes the actual cost of the computer equipment, such as dedicated servers, computers, laptops, monitors, information security appliances and storage, and network switching infrastructure equipment, including switches and taps that were purchased to operate and support the Exchange. Without this equipment, the Exchange would not be able to operate the Exchange and provide Transaction Services to its Members and non-Members and their customers. The Exchange did not allocate all of the depreciation and amortization expense toward the cost of providing Transaction Services, but instead allocated approximately 73% of the Exchange's overall depreciation and amortization expense to Transaction Services.
The Exchange notes that the Cost Analysis was based on the Exchange's first year of operations and projections for the next year. As such, the Exchange believes that its costs will remain relatively similar in future years. It is possible however that such costs will either decrease or increase. To the extent the Exchange sees growth in use of market data or any other core service it will receive additional revenue to offset future cost increases. However, if use of core services, including market data subscriptions is static or decreases, the Exchange might not realize the revenue that it anticipates or needs in order to cover applicable costs. Accordingly, the Exchange commits to periodically review the costs applicable to providing Transaction Services, including the Exchange Data Feeds, and to propose changes to its fees as appropriate.
The proposed fees for Exchange Data Feeds are designed to permit the Exchange to cover the costs allocated to providing Transaction Services with a markup that the Exchange believes is modest (approximately 17%), which would also account for costs related to Transaction Services that the Exchange has previously borne completely on its own and help fund future expenditures (increased costs, improvements, etc.). The Exchange also reiterates that the Exchange has not previously charged any fees for Exchange Data Feeds and its allocation of costs to Exchange Data Feeds was part of a holistic allocation that also allocated costs to other core services without double-counting any expenses.
Looking at the Exchange's operations holistically, the total monthly costs to the Exchange for offering core services is $3,954,537. The Exchange anticipates that the proposed fees for Exchange Data Feeds will generate between $250,000 and $500,000, depending on how many current subscribers stop subscribing to the Exchange Data Feeds once the Exchange commences billing. Incorporating this range into the Exchange's overall projected revenue, the Exchange anticipates monthly revenue ranging from $4,296,950 to $4,546,950 from all sources (
The Exchange notes that its revenue estimates are based on projections across all potential revenue streams and will only be realized to the extent such revenue streams actually produce the revenue estimated. As a new entrant to the hyper-competitive exchange environment, and an exchange focused on driving competition, the Exchange does not yet know whether such expectations will be realized. For instance, in order to generate the revenue expected from the Exchange Data Feeds, the Exchange will have to be successful in retaining existing subscribers and obtaining new subscribers to the Exchange Data Feeds. Similarly, the Exchange will have to be successful in retaining a positive net capture on transaction fees in order to realize the anticipated revenue from transaction pricing.
To the extent the Exchange is successful in gaining market share, improving its net capture on transaction
As described above, there is no requirement that any Firm subscribe to a particular Exchange Data Feed or any Exchange Data Feed whatsoever, but instead, a Firm may choose to maintain subscriptions to those Exchange Data Feeds they deem appropriate based on their business model. The proposed fee will not apply differently based upon the size or type of Firm, but rather based upon the subscriptions a Firm has to Exchange Data Feeds and their use thereof, which are in turn based upon factors deemed relevant by each Firm.
As discussed above, the proposed fees for connectivity services do not by design apply differently to different types or sizes of Members. As discussed in more detail in the Statutory Basis section, the Exchange believes that the likelihood of higher fees for certain Firms subscribing to Exchange Data Feeds than others is not unfairly discriminatory because it is based on objective differences in usage of Exchange Data Feeds among different Firms, which are still ultimately in the control of any particular Firm.
The Exchange believes that the proposed rule change is consistent with the provisions of Section 6(b)
In adopting Regulation NMS, the Commission granted SROs and broker-dealers increased authority and flexibility to offer new and unique market data to the public. The Commission has repeatedly expressed its preference for competition over regulatory intervention in determining prices, products, and services in the securities markets. Specifically, in Regulation NMS, the Commission highlighted the importance of market forces in determining prices and SRO revenues, and also recognized that current regulation of the market system “has been remarkably successful in promoting market competition in its broader forms that are most important to investors and listed companies.”
With respect to market data, the decision of the United States Court of Appeals for the District of Columbia Circuit in
In fact, the legislative history indicates that the Congress intended that the market system “evolve through the interplay of competitive forces as unnecessary regulatory restrictions are removed” and that the SEC wield its regulatory power “in those situations where competition may not be sufficient,” such as in the creation of a “consolidated transactional reporting system.”
In this competitive marketplace, the Exchange's executed trading volume has grown from 0% market share to over 4% market share in less than one and a half years and the Exchange believes that it is reasonable to begin charging fees for the Exchange Data Feeds. One of the primary objectives of MEMX is to provide competition and to reduce fixed costs imposed upon the industry. Consistent with this objective, the Exchange believes that this proposal reflects a simple, competitive, reasonable, and equitable pricing structure designed to permit the Exchange to cover certain fixed costs that it incurs for providing market data, with fees that are discounted when compared to products and services offered by competitors.
The Exchange is not aware of any evidence that a market share of approximately 4% provides the Exchange with supra-competitive pricing power because, as shown elsewhere, market participants are not required to subscribe to the Exchange Data Feeds, and if they do so, have a choice with respect to the Exchange Data Feed(s) to which they will subscribe. Separately, the Exchange is not aware of any reason why market participants could not simply unsubscribe or choose not to subscribe to Exchange Data Feeds if the Exchange were to establish unreasonable and uncompetitive prices for its Exchange Data Feeds.
With regard to reasonableness, the Exchange understands that the Commission has traditionally taken a market-based approach to examine whether the SRO making the proposal was subject to significant competitive forces in setting the terms of the proposal. In looking at this question, the Commission considers whether the SRO has demonstrated in its filing that: (i) There are reasonable substitutes for the product or service; (ii) “platform” competition constrains the ability to set the fee; and/or (iii) revenue and cost analysis shows the fee would not result in the SRO taking supra-competitive profits. If the SRO demonstrates that the fee is subject to significant competitive forces, the Commission will next consider whether there is any substantial countervailing basis to suggest the fee's terms fail to meet one or more standards under the Exchange Act. If the filing fails to demonstrate that the fee is constrained by competitive forces, the SRO must provide a substantial basis, other than competition, to show that it is consistent with the Exchange Act, which may include production of relevant revenue and cost data pertaining to the product or service.
The Exchange has not previously charged fees for market data, so it does not have MEMX-specific data to support whether or not competitive forces would constrain its ability to set fees for the Exchange Data Feeds. However, the Exchange believes that competitive forces are in effect and that if the proposed fees for the Exchange Data Feeds were unreasonable that the Exchange would lose current or prospective Members and market share. The Exchange does not yet have comprehensive data of the impact of the proposed fees and will not have such data until the fees are imposed. Further, the Exchange has conducted a comprehensive Cost Analysis to determine the reasonability of its proposed fees, including that the Exchange will not take supra-competitive profits.
In 2018, Charles M. Jones, the Robert W. Lear Professor of Finance and Economics at the Columbia University School of Business, conducted an analysis of the market for equity market data in the United States. He canvassed the demand for both consolidated and exchange proprietary market data products and the uses to which those products were put by market participants, and reported his conclusions in a paper annexed hereto.
• “The market [for exchange market data] is characterized by robust competition: exchanges compete with each other in selling proprietary market data products. They also compete with consolidated data feeds and with data provided by alternative trading systems (`ATSs'). Barriers to entry are very low, so existing exchanges must also take into account competition from new entrants, who generally try to build market share by offering their proprietary market data products for free for some period of time [as MEMX has done with its Exchange Data Feeds].”
• “Although there are regulatory requirements for some market participants to use consolidated data products, there is no requirement for market participants to purchase any proprietary market data product for regulatory purposes.”
• “There are a variety of data products, and consumers of equity market data choose among them based on their needs. Like most producers, exchanges offer a variety of market data products at different price levels. Advanced proprietary market data products provide greater value to those who subscribe. As in any other market, each potential subscriber takes the features and prices of available products into account in choosing what market data products to buy based on its business model.”
• “For proprietary exchange data feeds, the main question is whether there is a competitive market for proprietary market data. More than 40 active exchanges and alternative trading systems compete vigorously in both the market for order flow and in the market for market data. The two are closely linked: an exchange needs to consider the negative impact on its order flow if it raises the price of its market data. Furthermore, new entrants have been frequent over the past 10 years or so, and these venues often give market data away for free, [again, as MEMX has done with its Exchange Data Feeds] serving as a check on pricing by more established exchanges. These are all the standard hallmarks of a competitive market.”
Professor Jones' conclusions are consistent with the Exchange's view of, and experience in, the competitive marketplace for exchanges, including with respect to proprietary data feeds, as a recent entrant to the market.
As the D.C. Circuit recognized in
Similarly, the Commission itself has recognized that the market for trading services in NMS stocks has become “more fragmented and competitive.”
Further, low barriers to entry mean that new exchanges like the Exchange may rapidly enter the market and offer competition with the Exchange. Due to the ready availability of substitutes and the low cost to move order flow to those substitute trading venues, an exchange setting market data fees that are not at competitive levels would expect to quickly lose business to competitors with more attractive pricing.
Commission staff noted in its Fee Guidance that, as an initial step in assessing the reasonableness of a fee, staff considers whether the fee is constrained by significant competitive forces. To determine whether a proposed fee is constrained by significant competitive forces, staff has said that it considers whether the evidence demonstrates that there are reasonable substitutes for the product or service that is the subject of a proposed fee. As noted elsewhere in this proposal, there is no regulatory requirement that any market participant subscribe to any Exchange Data Feeds or a particular Exchange Data Feed.
The Exchange believes the proposed fees are reasonable because in setting them, the Exchange is constrained by the availability of numerous competitors offering market data products and trading services. Such substitutes need not be identical, but only substantially
Subscribing to the Exchange Data Feeds is entirely optional. The Exchange is not required to make the Exchange Data Feeds available to any customers, nor is any customer required to purchase any Exchange Data Feed. Unlike some other data products (
Specifically related to the Exchange Data Feed with the highest rates, the MEMOIR Depth Feed, even if a Firm determines that the fees for such feed are too high, customers can access much of the same data at lower rates by subscribing to the MEMOIR Top feed (which includes best-bid-and-offer information for the Exchange on a real-time basis) and MEMOIR Last Sale (which includes last-sale information for the Exchange on a real-time basis). MEMX top-of-book quotation information and last-sale information is also available on the consolidated SIP feeds. In this way, MEMOIR Top, MEMOIR Last Sale, and SIP data products are all substitutes for a significant portion of the data available on the MEMOIR Depth Feed, and SIP data products are also a substitute for a significant portion of data available on the MEMOIR Top and MEMOIR Last Sale feeds. Indeed, several exchange competitors of the Exchange have not subscribed to any Exchange Data Feeds for purposes of executing orders on their exchanges, order routing, and regulatory purposes,
The only content available on the MEMOIR Depth Feed that is not available on these other products is the order-by-order look at the MEMX order book, which provides information about depth-of-book on the Exchange. The Exchange has been a vocal advocate in support of the Commission's Market Data Infrastructure Rule, which mandates the creation of a “SIP Premium” product that would include depth-of-book information on the consolidated market data feeds.
Further, in the case of products that are also redistributed through market data vendors such as Bloomberg and Refinitiv, the vendors themselves provide additional price discipline for proprietary data products because they control the primary means of access to certain end users. These vendors impose price discipline based upon their business models. For example, vendors that assess a surcharge on data they sell are able to refuse to offer proprietary products that their end users do not or will not purchase in sufficient numbers. Even in the absence of fees for the Exchange Data Feeds, many major market data vendors have not elected to make available the Exchange Data Feeds and likely will not unless their customers request it, and customers will not elect to pay the proposed fees unless the applicable Exchange Data Feed can provide value by sufficiently increasing revenues or reducing costs to the customer's business in a manner that will offset the fees. All of these factors operate as constraints on pricing proprietary data products.
In setting the proposed fees for the Exchange Data Feeds, the Exchange considered the competitiveness of the market for proprietary data and all of the implications of that competition. As described elsewhere in this proposal, the Exchange also considered the Cost Analysis conducted by the Exchange and believes it has demonstrated that the fees will not result in any supra-competitive profit. The Exchange believes that it has considered all relevant factors and has not considered irrelevant factors in order to establish reasonable fees. The existence of alternatives to the Exchange and the continued availability of choice between different Exchange Data Feeds, other exchanges' proprietary data products, and the SIPs ensure that the Exchange cannot set unreasonable fees when vendors and subscribers can elect these alternatives or choose not to purchase a specific proprietary data product if the attendant fees are not justified by the returns that any particular vendor or data recipient would achieve through the purchase.
Commission staff previously noted that the generation of supra-competitive profits is one of several potential factors in considering whether an exchange's proposed fees are consistent with the Act.
The proposed fees for Exchange Data Feeds will allow the Exchange to cover certain costs incurred by the Exchange associated with providing and maintaining necessary hardware and other network infrastructure as well as network monitoring and support services; without such hardware, infrastructure, monitoring and support the Exchange would be unable to provide Transaction Services, including market data. The Exchange routinely works to improve the performance of the network's hardware and software. The costs associated with maintaining and enhancing a state-of-the-art exchange network is a significant expense for the Exchange, and thus the Exchange believes that it is reasonable and appropriate to help offset those costs by adopting fees for the Exchange Data Feeds. As detailed above, the Exchange has four primary sources of revenue that it can potentially use to fund its operations: Transaction fees, fees for connectivity services, membership and regulatory fees, and market data fees. Accordingly, the Exchange must cover its expenses from these four primary sources of revenue.
The Exchange expects to recoup the majority of its estimated aggregate monthly costs for providing Transaction Services from transaction fees and revenues from the public data feeds in which the Exchange participates and receives revenues (
The Exchange's Cost Analysis estimates the costs to provide Transaction Services at $2,797,265. Based on current subscriptions to Exchange Data Feeds (but without definitive data regarding User counts) and projections related to transaction activity and volumes, the Exchange estimates it will generate monthly revenues of approximately $250,000 to $500,000 from the Exchange Data Feeds and between $3,050,000 and $3,300,000 from providing Transaction Services overall. This represents a modest profit when compared to the cost of providing Transaction Services (approximately 9% to 18%). Further, as noted above, applying the Exchange's holistic Cost Analysis to a holistic view of anticipated revenues from all sources, the Exchange would earn approximately 8.5% to 15% margin on its operations as a whole. The Exchange believes that this amount is reasonable.
The specific fees that the Exchange proposes for the Exchange Data Feeds are reasonable for the following additional reasons.
The Exchange believes that the proposed Non-Display Usage fees reflect the significant value of the non-display data use to data recipients, which purchase such data on an entirely voluntary basis. Non-display data can be used by data recipients for a wide variety of profit-generating purposes, including proprietary and agency trading and smart order routing, as well as by data recipients that operate Trading Platforms that compete directly with the Exchange for order flow. The data also can be used for a variety of non-trading purposes that indirectly support trading, such as risk management and compliance. Although some of these non-trading uses do not directly generate revenues, they can nonetheless substantially reduce a recipient's costs by automating such functions so that they can be carried out in a more efficient and accurate manner and reduce errors and labor costs, thereby benefiting recipients. The Exchange believes that charging for non-trading uses is reasonable because data recipients can derive substantial value from such uses, for example, by automating tasks so that can be performed more quickly and accurately and less expensively than if they were performed manually.
Previously, the non-display use data pricing policies of many exchanges required customers to count, and the exchanges to audit the count of, the number of non-display devices used by a customer. As non-display use grew more prevalent and varied, however, exchanges received an increasing number of complaints about the impracticality and administrative burden associated with that approach. In response, several exchanges developed a non-display use pricing structure that does not require non-display devices to be counted or those counts to be audited, and instead categorizes different types of use. The Exchange proposes to distinguish between non-display use for the operation of a Trading Platform and other non-display use, which is similar to exchanges such as BZX and EDGX,
The Exchange believes that it is reasonable to segment the fee for non-display use into these two categories. As noted above, the uses to which customers can put the MEMOIR Depth feed are numerous and varied, and the Exchange believes that charging separate fees for these separate categories of use is reasonable because it reflects the actual value the customer derives from the data, based upon how the customer makes use of the data.
The Exchange believes that the proposed fees for non-display use other than operation of a Trading Platform is reasonable. These fees are comparable to, and lower than, the fees charged by at least one other exchange of comparable size for a comparable data product,
The Exchange also believes, regarding non-display use for operation of a Trading Platform, it is reasonable to charge a higher monthly fee than for other non-display use because such use of the Exchange's data is directly in competition with the Exchange and the
The proposed Non-Display Usage fees for the Exchange Data Feeds are also reasonable because they take into account the extra value of receiving the data for Non-Display Usage that includes a rich set of information including top of book quotations, depth-of-book quotations, executions and other information. The Exchange believes that the proposed fees directly and appropriately reflect the significant value of using the MEMOIR Depth feed on a non-display basis in a wide range of computer-automated functions relating to both trading and non-trading activities and that the number and range of these functions continue to grow through innovation and technology developments.
For all of the foregoing reasons, the Exchange believes that the proposed fees for the Exchange Data Feeds are reasonable.
The Exchange believes the proposed fees for the Exchange Data Feeds are allocated fairly and equitably among the various categories of users of the feeds, and any differences among categories of users are justified and appropriate.
The Exchange also believes, regarding non-display use for operation of a Trading Platform, it is equitable to charge a higher rate for each Firm operating a Trading Platform (as compared to other Non-Display Usage not by Trading Platforms) because such use of the data is directly in competition with the Exchange and the Exchange should be permitted to recoup some of its lost trading revenue by charging for the data that makes such competition possible. The Exchange believes that it is equitable to charge a single fee per Firm rather than multiple fees for a Firm that operates more than one Trading Platform because operators of Trading Platforms are many times viewed as a single competing venue or group, even if there a multiple liquidity pools operated by the same competitor.
For all of the foregoing reasons, the Exchange believes that the proposed fees for the Exchange Data Feeds are equitably allocated.
The Exchange believes the proposed fees for the Exchange Data Feeds are not unfairly discriminatory because any differences in the application of the fees are based on meaningful distinctions between customers, and those meaningful distinctions are not unfairly discriminatory between customers.
The Exchange also believes that, regarding non-display use for operation of a Trading Platform, it is not unreasonably discriminatory to charge a higher fee for each Firm operating a Trading Platform (as compared to other Non-Display Usage not by Trading Platforms) because such use of the data is directly in competition with the Exchange and the Exchange should be permitted to recoup some of its lost trading revenue by charging for the data that makes such competition possible. The Exchange believes that it is not unreasonably discriminatory to charge a single fee for an operator of Trading Platforms that operates more than one Trading Platform because operators of Trading Platforms are many times viewed as a single competing venue or group, even if there a multiple liquidity pools operated by the same competitor.
For all of the foregoing reasons, the Exchange believes that the proposed fees for the Exchange Data Feeds are not unfairly discriminatory.
In accordance with Section 6(b)(8) of the Act,
The Exchange does not believe that the proposed rule change would place certain market participants at the Exchange at a relative disadvantage compared to other market participants or affect the ability of such market participants to compete. In particular, while the Exchange has not officially proposed fees for Exchange Data Feeds until now, Exchange personnel have been informally discussing potential fees for Exchange Data Feeds with a diverse group of market participants that receive data from the Exchange (including large and small firms, trading firms and market data only firms, etc.). The Exchange has received no official complaints from Members, non-Members, or third-parties that redistribute the Exchange Data Feeds, that the Exchange's fees or the proposed fees for Exchange Data Feeds would negatively impact their abilities to compete with other market participants or that they are placed at a disadvantage relative to others. The Exchange does not believe that the proposed fees for Exchange Data Feeds place certain market participants at a relative disadvantage to other market participants because, as noted above, the proposed fees are associated with usage of Exchange Data Feeds by each market participant based on the type of business they operate, and the decision to subscribe to one or more Exchange Data Feeds is based on objective differences in usage of Exchange Data Feeds among different Firms, which are still ultimately in the control of any particular Firm, and such fees do not impose a barrier to entry to smaller participants. Accordingly, the proposed fees for Exchange Data Feeds do not favor certain categories of market participants in a manner that would impose a burden on competition; rather, the allocation of the proposed fees reflects the types of Exchange Data Feeds consumed by various market participants and their usage thereof.
The Exchange does not believe the proposed fees place an undue burden on competition on other SROs that is not necessary or appropriate. In particular, market participants are not forced to subscribe to any of the Exchange Data Feeds, as described above. Additionally, other exchanges have similar market data fees in place for their participants, but with higher rates to connect.
The Exchange neither solicited nor received comments on the proposed rule change.
The foregoing rule change has become effective pursuant to Section 19(b)(3)(A)(ii) of the Act
At any time within 60 days of the filing of the proposed rule change, the Commission summarily may temporarily suspend such rule change if it appears to the Commission that such action is necessary or appropriate in the public interest, for the protection of investors, or otherwise in furtherance of the purposes of the Act. If the Commission takes such action, the Commission shall institute proceedings to determine whether the proposed rule change should be approved or disapproved.
Interested persons are invited to submit written data, views, and arguments concerning the foregoing, including whether the proposed rule change is consistent with the Act. Comments may be submitted by any of the following methods:
• Use the Commission's internet comment form (
• Send an email to
• Send paper comments in triplicate to Secretary, Securities and Exchange Commission, 100 F Street NE, Washington, DC 20549-1090.
For the Commission, by the Division of Trading and Markets, pursuant to delegated authority.
On November 1, 2021, Investors Exchange LLC (“IEX”) filed with the Securities and Exchange Commission (“Commission”), pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934
For the Commission, by the Division of Trading and Markets, pursuant to delegated authority.
By virtue of the authority vested in the Secretary of State by the laws of the United States, including the State Department Basic Authorities Act, as amended (22 U.S.C. 2651a), the Taiwan Relations Act (22 U.S.C. 3301
Any act, executive order, regulation, or procedure subject to, or affected by, this delegation shall be deemed to be such act, executive order, regulation, or procedure as amended from time to time. Authorities delegated herein may be re-delegated, to the extent authorized by law.
The Secretary, the Deputy Secretary, the Deputy Secretary for Management and Resources, the Under Secretary for Political Affairs, and the Under
Any actions related to the functions described herein that may have been taken prior to the date of this delegation are hereby confirmed and ratified. Such actions shall remain in force as if taken under this delegation of authority, unless or until such actions are rescinded, amended, or superseded.
This document shall be published in the
All information reported to the Office of the Chief of Protocol, including gift appraisal and donor information, is the responsibility of the employing agency, in accordance with applicable law and GSA regulations.
The Office of the Chief of Protocol, Department of State, submits the following comprehensive listing of the statements which, as required by law, federal employees filed with their employing agencies during calendar year 2020 concerning gifts received from foreign government sources. The compilation includes reports of both tangible gifts and gifts of travel or travel expenses of more than minimal value, as defined in 5 U.S.C. 7432 and GSA regulations. For calendar years 2020-2022 (January 1, 2020 through December 31, 2022), minimal value is $415.00.
Pursuant to title 22 of the Code of Federal Regulations section 3.4, the report includes all gifts given on a single occasion when the aggregate value of those gifts exceeds minimal value. Also included are gifts received in previous years including one from 2014, two from 2016, one from 2017, 12 from 2018, and 18 from 2019. These latter gifts are being reported in this year's report for calendar year 2020 because the Office of the Chief of Protocol, Department of State, did not receive the relevant information at the time of reporting to include them in earlier reports. Agencies not listed in this report either did not receive relevant gifts during the calendar year, did not transmit a listing to the Secretary of State of all statements filed during the preceding year by the employees of that agency pursuant to 5 U.S.C. 7432(f)(1), or did not respond to the State Department's Office of the Chief of Protocol's request for data. The U.S. Senate maintains an internal minimal value of $100; therefore, all gifts over the $100 limit are furnished in the U.S. Senate report.
Publication of this listing in the
By petition filed on February 11, 2022,
As explained by GNBC in its verified notice of exemption in Docket No. FD 36486 (Sub-No. 2), GNBC and BNSF Railway Company (BNSF) have entered into an amendment to extend the term of the previously amended, local trackage rights on trackage owned by BNSF between approximately milepost 668.73 in Long, Okla., and approximately milepost 723.30 in Quanah, Tex. (the Line), allowing GNBC to (1) use the Line to access the Plains Cotton Cooperative Association (PCCA) facility near BNSF Chickasha Subdivision milepost 688.6 at Altus, Okla., and (2) operate additional trains on the Line to accommodate the movement of trains transporting BNSF customers' railcars (loaded or empty) located along the Line, to unit train facilities on the Line (collectively, the PCCA Trackage Rights). (GNBC Verified Notice of Exemption 1-3,
GNBC explains that the trackage rights covered by the verified notice in Docket No. FD 36486 (Sub-No. 2) are local rather than overhead rights and therefore they do not qualify for the Board's class exemption for temporary trackage rights under 49 CFR 1180.2(d)(8). (GNBC Pet. 4.) GNBC therefore filed its verified notice of exemption under the Board's class exemption procedures at 49 CFR 1180.2(d)(7) and a petition for partial revocation of the exemption as necessary to permit the PCCA Trackage Rights to expire on March 28, 2023, pursuant to the parties' agreement. (GNBC Pet 3.) GNBC argues that the requested relief will promote the rail transportation policy and is limited in scope. (
Although GNBC and BNSF have expressly agreed on the duration of the proposed trackage rights, trackage rights approved under the class exemption at 49 CFR 1180.2(d)(7) typically remain effective indefinitely, regardless of any contract provisions. At times, however, the Board has partially revoked a trackage rights exemption to allow those rights to expire after a limited time rather than lasting in perpetuity.
Under 49 U.S.C. 10502, the Board may exempt a person, class of persons, or a transaction or service, in whole or in part, when the Board finds that: (1) Continued regulation is not necessary to carry out the rail transportation policy of 49 U.S.C. 10101; and (2) either the transaction or service is of limited scope, or regulation is not necessary to protect shippers from the abuse of market power.
Granting partial revocation in these circumstances to permit the trackage rights to expire would eliminate the need for GNBC to file a second pleading seeking discontinuance when the agreement expires, thereby promoting the rail transportation policy at 49 U.S.C. 10101(2), (7), and (15). Moreover, partially revoking the exemption to limit the term of the trackage rights is consistent with the limited scope of the transaction previously exempted.
To provide the statutorily mandated protection to any employee adversely affected by the discontinuance of trackage rights, the Board will impose the employee protective conditions set forth in
This action is categorically excluded from environmental review under 49 CFR 1105.6(c).
1. The petition for partial revocation of the trackage rights class exemption is granted.
2. As discussed above, the trackage rights in Docket No. FD 36486 (Sub-No. 2) are permitted to expire on March 28, 2023, subject to the employee protective conditions set forth in
3. Notice of this decision will be published in the
4. This decision is effective on May 6, 2022. Petitions to stay must be filed by April 18, 2022. Petitions for reconsideration must be filed by April 26, 2022.
By the Board, Board Members Fuchs, Hedlund, Oberman, Primus, and Schultz.
Federal Aviation Administration (FAA), DOT.
Notice and request for comments.
In accordance with the Paperwork Reduction Act of 1995, FAA invites public comments about our intention to request the Office of Management and Budget (OMB) approval to renew an information collection. The collection involves aerial navigation aids (NavAids), electrical/electronic facilities, owned and operated by non-Federal sponsors for use by the flying public. “Non-Federal sponsors” refers to entities such as state and local governments, businesses, and private citizens. The information to be collected is necessary to ensure that operation and maintenance of these non-Federally owned facilities is in accordance with FAA safety standards. The FAA is not changing its information-collection practices pertaining to non-Federal facilities. It is merely renewing its legal authority to collect that information.
Written comments should be submitted by June 10, 2022.
Please send written comments:
Natashia Jones by email at:
The collection involves the compilation of:
• Commissioning data, such as the initial standards and tolerances parameters for the aerial navigation aids (NavAids) and electrical/electronic facilities, owned and operated by non-Federal sponsors;
• Maintenance activities and operational history, such as outages and repairs, for facilities owned and operated by non-Federal sponsors; and
• The facilities' periodically verified parameters for the life of the facility.
Federal Aviation Administration (FAA), DOT.
Notice and request for comments.
In accordance with the Paperwork Reduction Act of 1995, the FAA invites public comments about our intention to request the Office of Management and Budget (OMB) approval to renew an information collection. This collection involves organizations applying to perform certification functions on behalf of the FAA, including approving data and issuing various aircraft and organization certificates. The information will be used to determine an applicant's qualifications to perform certification functions as a representative of the FAA Administrator and to authorize organizations to perform those functions.
Written comments should be submitted by May 11, 2022.
Please send written comments:
Scott Geddie, Section Manager, Compliance Systems Section telephone 405-954-6897;
Federal Aviation Administration (FAA), Department of Transportation.
On April 4, 2022, the FAA issued a notice in the above-captioned matter. The notice indicated that the FAA would accept comments concerning the proposed modified grant assurances until “April 12, 2022.” This notice extends the comment due date to April 20, 2022.
National Highway Traffic Safety Administration (NHTSA), Department of Transportation (DOT).
Denial of petition.
Nissan North America, Inc. (Nissan) has determined that certain model year (MY) 2020 Nissan Sentra motor vehicles do not fully comply with Federal Motor Vehicle Safety Standard (FMVSS) No. 108,
Leroy Angeles, Office of Vehicle Safety Compliance, NHTSA, telephone (202) 366-5304.
Nissan has determined that certain MY 2020 Nissan Sentra motor vehicles do not fully comply with the requirements of paragraph S10.18.9.1.2 of FMVSS No. 108,
Notice of receipt of Nissan's petition was published with a 30-day public comment period, on March 24, 2021, in the
Approximately 5,520 MY 2020 Nissan Sentra motor vehicles, manufactured between November 26, 2019, and March 24, 2020, are potentially involved.
Nissan explains that the noncompliance is that the right-hand LED headlamp aim in the subject vehicle may be misaligned resulting in a vertical gradient value less than 0.13 as required by paragraph S10.18.9.1.2 of FMVSS No. 108.
Paragraph S10.18.9.1.2 of FMVSS No. 108 includes the requirements relevant to this petition:
The following views and arguments presented in this section are the views and arguments provided by Nissan and do not reflect the views of the Agency. In its petition, Nissan describes the subject noncompliance and contends that the noncompliance is inconsequential as it relates to motor vehicle safety.
In support of its petition, Nissan provided NHTSA with the following:
1. Nissan states that “the supplier (Ichikoh) did not apply the correct aiming logic when setting the head lamp aim parameters” in the subject vehicles and, “[a]s a result, the right-hand LED headlamp aim may be misaligned resulting in a vertical gradient value below 0.13.” Nissan states that “[a] lower G-Value will lead to a headlamp cut line that is slightly less sharp.” According to Nissan, “Ichikoh inspected 3,506 lamps and found 572 lamps with a G-Value below 0.13. However, when the cut-off value is brought down to two decimals instead of three (per the express requirement in FMVSS No. 108), only 286 of the 3,506 lamps (about 8%) fall below the 0.13 minimum threshold. Of the 286 lamps, 248 (about 87%) are at a gradient value of 0.12.”
2. According to Nissan, Ichikoh confirmed that, “even when the G-Value is below 0.13, all points of the Light Distribution achieve the required specifications of FMVSS 108 for both the low and high beam performance.” Nissan attached to its petition test data from Ichikoh regarding such photometric performance.
3. Nissan states that it “has not received any reports from the field of customer complaints, warranty claims, crashes, injuries, or fatalities related to this issue.”
4. Nissan contends that “[t]he purpose of the gradient requirement is to assist in headlamp re-aiming.” Nissan states that “[t]he vehicles potentially affected by this issue were aimed properly at the factory using a different aiming method. Therefore, the only potential concern would relate to re-aiming performed after the vehicle has been in use.” Nissan stated that “[a]iming of the headlamps by a service technician in the field is an event that is expected to occur infrequently. To confirm this, Nissan searched its repair order database for repair orders on the previous generation Sentra that involved re-aiming of the headlamps. Out of 1,389,330 vehicles, 161 repair orders were found that involved headlamp aiming. This rate of repair would be 0.011% of vehicles. If the same rate of repair is applied to the expected 420 vehicles in the subject population [Nissan] would expect only 0.05 vehicles of the subject population to require a re-aiming in the field.”
5. Nissan asserts that “[t]he difference in gradient values between 0.12 and 0.13 does not materially affect the ability of a service technician to properly aim the lamp in the rare case that this would need to be done in the field.”
6. “Even if the lamps had to be re-aimed at some point,” according to Nissan, “it is unlikely the driver or other motorists would notice any glare or observable difference in operation between a fully compliant lamp and the subject lamps based on the conditions described above.”
Nissan concludes that the subject noncompliance is inconsequential as it relates to motor vehicle safety, and that its petition to be exempted from providing notification of the noncompliance, as required by 49 U.S.C. 30118, and a remedy for the noncompliance, as required by 49 U.S.C. 30120, should be granted.
NHTSA received one comment from the general public. The commenter explains that they have owned vehicles manufactured by Nissan and states that the noncompliance is not inconsequential. The comment does not, however, substantively address issues relevant to Nissan's petition with any specificity.
The burden of establishing the inconsequentiality of a failure to comply with a
In determining inconsequentiality of a noncompliance, NHTSA focuses on the safety risk to individuals who experience the type of event against which a recall would otherwise protect.
Arguments that only a small number of vehicles or items of motor vehicle equipment are affected also do not justify granting an inconsequentiality petition.
NHTSA has evaluated the merits of Nissan's petition and has decided to deny the petition.
The purpose of the gradient requirement is to allow for proper aim of a visually/optically aimed headlamp. Failure to properly aim the headlamp can result in glare to surrounding vehicles or less down road visibility which can potentially lead to a crash.
Nissan states that the supplier did not apply the correct aiming logic when setting the headlamp aim parameters and, as a result, the headlamp aim may be misaligned resulting in a vertical gradient value less than 0.13. Nissan does not further describe the technical details surrounding the process that led to the noncompliance, and it is somewhat unclear as to what issue caused these lamps to have a gradient below that permitted by the standard. Generally, the Agency understands that vertical headlamp aim does not impact the value of the gradient calculation (the mathematical description of the change in intensity from one angular location to the next). The headlamp aim that is “misaligned” in the subject vehicles might be the horizontal aim, which is permanently set during the manufacturing process. A permanent horizontal misaim could result in the vertical scan line that is used in the gradient calculation to be measured in a location other than that intended by the beam pattern designer. In any case, the precise process failure that led to the noncompliance is not necessary in the Agency's analysis of the noncompliance impact on safety described below.
NHTSA reviewed the test data from Nissan's supplier, Ichikoh, regarding photometric performance of the lower beam and upper beam with G-values less than 0.13, and did not find it compelling. Nissan only provided one set of measurements for one lamp. In addition, their argument does not take into account the potential mis-aim which could be caused by the non-compliant gradient. Furthermore, while Nissan claimed that it is unlikely the driver or other motorists would notice any glare or observable difference in operation between a fully compliant lamp and the subject lamp, Nissan did not submit any data to support this claim.
NHTSA believes that any gradient less than the minimum requirement of 0.13 can affect the ability of the lamp to be properly aimed. As NHTSA has previously stated in the preamble to a final rule amending FMVSS 108,
NHTSA is also not persuaded by Nissan's contention that the noncompliance involved here does not have a safety impact because it is relatively rare for headlamps to be re-aimed. Nissan's data supporting this claim, which relied on dealer repair records for the previous generation Sentra, is not, in NHTSA's view, representative. As vehicles age and their warranties expire, consumers are less likely to have service performed at a dealership. Instances of headlight service at independent garages and body shops also would not be included in Nissan's survey. And in any event, as stated above, arguments that only a small number of vehicles or items of motor vehicle equipment are affected have also not justified granting an inconsequentiality petition. For similar reasons, also unpersuasive is the number of lamps that exhibit a G-Value less than the 0.13 minimum threshold, or that Nissan has not received any reports from the field of customer complaints, warranty claims, crashes, injuries, or fatalities related to this issue.
In consideration of the foregoing, NHTSA has decided that Nissan has not met its burden of persuasion that the subject FMVSS No. 108 noncompliance is inconsequential to motor vehicle safety. Accordingly, Nissan's petition is hereby denied, and Nissan is obligated to provide notification of, and free remedy for, that noncompliance under 49 U.S.C. 30118 and 30120.
Office of the Comptroller of the Currency (OCC), Treasury.
Notice and request for comment.
The OCC, as part of its continuing effort to reduce paperwork and respondent burden, invites the general public and other Federal agencies to take this opportunity to comment on a continuing information collection, as required by the Paperwork Reduction Act of 1995 (PRA). An agency may not conduct or sponsor, and respondents are not required to respond to, an information collection unless it displays a currently valid Office of Management and Budget (OMB) control number. The OCC is soliciting comment concerning a renewal of an information collection titled “Survey of Minority Owned Institutions.”
Comments must be submitted on or before June 10, 2022.
Commenters are encouraged to submit comments by email, if possible. You may submit comments by any of the following methods:
•
•
•
•
Following the close of this notice's 60-day comment period, the OCC will publish a second notice with a 30-day comment period. You may review comments and other related materials that pertain to this information collection beginning on the date of publication of the second notice for this collection by the method set forth in the next bullet. Following the close of this notice's 60-day comment period, the OCC will publish a second notice with a 30-day comment period.
•
• For assistance in navigating
Shaquita Merritt, Clearance Officer, (202) 649-5490, Chief Counsel's Office, Office of the Comptroller of the Currency, 400 7th Street SW, Washington, DC 20219. If you are deaf, hard of hearing, or have a speech disability, please dial 7-1-1 to access telecommunications relay services.
Under the PRA (44 U.S.C. 3501-3520), Federal agencies must obtain approval from the OMB for each collection of information that they conduct or sponsor. “Collection of information” is defined in 44 U.S.C. 3502(3) and 5 CFR 1320.3(c) to include agency requests or requirements that members of the public submit reports, keep records, or provide information to a third party. Section 3506(c)(2)(A) of title 44 requires Federal agencies to provide a 60-day notice in the
Comments submitted in response to this notice will be summarized, included in the request for OMB approval, and become a matter of public record. Comments are invited on:
(a) Whether the collection of information is necessary for the proper performance of the functions of the OCC, including whether the information has practical utility;
(b) The accuracy of the OCC's estimate of the information collection burden;
(c) Ways to enhance the quality, utility, and clarity of the information to be collected;
(d) Ways to minimize the burden of the collection on respondents, including through the use of automated collection techniques or other forms of information technology; and
(e) Estimates of capital or start-up costs and costs of operation,
Office of Foreign Assets Control, Treasury.
Notice.
The U.S. Department of the Treasury's Office of Foreign Assets Control (OFAC) is publishing the names of one or more entities that have been placed on OFAC's Specially Designated Nationals and Blocked Persons List based on OFAC's determination that one or more applicable legal criteria were satisfied. All property and interests in property subject to U.S. jurisdiction of these entities are blocked, and U.S. persons are generally prohibited from engaging in transactions with them.
See
OFAC: Andrea M. Gacki, Director, tel.: 202-622-2490; Associate Director for Global Targeting, tel.: 202-622-2420; Assistant Director for Licensing, tel.: 202-622-2480; Assistant Director for Regulatory Affairs, tel.: 202-622-4855; or the Assistant Director for Sanctions Compliance & Evaluation, tel.: 202-622-2490.
The Specially Designated Nationals and Blocked Persons List and additional information concerning OFAC sanctions programs are available on OFAC's website (
On April 5, 2022, OFAC determined that the property and interests in property subject to U.S. jurisdiction of the following entities are blocked under the relevant sanctions authorities listed below.
Designated pursuant to Section 1(a)(i) of Executive Order 14024 of April 15, 2021, “Blocking Property With Respect To Specified Harmful Foreign Activities of the Government of the Russian Federation,” for operating or having operated in the technology sector, defense and related materiel sector, or financial services sector of the Russian Federation economy.
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Notice is hereby given, pursuant to 5 U.S.C. app. 2, 10(a)(2), that a meeting will be held at the United States Treasury Department, 15th Street and Pennsylvania Avenue NW, Washington, DC on May 3, 2022 at 9:00 a.m. of the following debt management advisory committee: Treasury Borrowing Advisory Committee.
At this meeting, the Treasury is seeking advice from the Committee on topics related to the economy, financial markets, Treasury financing, and debt management. Following the working session, the Committee will present a written report of its recommendations. The meeting will be closed to the public, pursuant to 5 U.S.C. app. 2, 10(d) and Public Law 103-202, 202(c)(1)(B)(31 U.S.C. 3121 note).
This notice shall constitute my determination, pursuant to the authority placed in heads of agencies by 5 U.S.C. app. 2, 10(d) and vested in me by Treasury Department Order No. 101-05, that the meeting will consist of discussions and debates of the issues presented to the Committee by the Secretary of the Treasury and the making of recommendations of the Committee to the Secretary, pursuant to Public Law 103-202, 202(c)(1)(B).
Thus, this information is exempt from disclosure under that provision and 5 U.S.C. 552b(c)(3)(B). In addition, the meeting is concerned with information that is exempt from disclosure under 5 U.S.C. 552b(c)(9)(A). The public interest requires that such meetings be closed to the public because the Treasury Department requires frank and full advice from representatives of the financial community prior to making its final decisions on major financing operations. Historically, this advice has been offered by debt management advisory committees established by the several major segments of the financial community. When so utilized, such a committee is recognized to be an advisory committee under 5 U.S.C. app. 2, 3.
Although the Treasury's final announcement of financing plans may not reflect the recommendations provided in reports of the Committee, premature disclosure of the Committee's deliberations and reports would be likely to lead to significant financial speculation in the securities market. Thus, this meeting falls within the exemption covered by 5 U.S.C. 552b(c)(9)(A).
The Office of Debt Management is responsible for maintaining records of debt management advisory committee meetings and for providing annual reports setting forth a summary of Committee activities and such other matters as may be informative to the public consistent with the policy of 5 U.S.C. 552(b). The Designated Federal Officer or other responsible agency official who may be contacted for additional information is Fred Pietrangeli, Director for Office of Debt Management (202) 622-1876.
Office of Energy Efficiency and Renewable Energy, Department of Energy.
Notice of proposed rulemaking and announcement of public webinar.
The U.S. Department of Energy (“DOE”) proposes to amend the test procedure for commercial and industrial pumps (“pumps”) to harmonize with updated industry standards, to expand the scope of clean water pumps covered by this test procedure, and to revise calculation methods for pumps sold with motors and controls to better represent field energy use. DOE is seeking comment from interested parties on the proposal and announcing a public meeting to collect comments and data on its proposal.
DOE will accept comments, data, and information regarding this proposal no later than June 10, 2022. See section V, “Public Participation,” for details. DOE will hold a webinar on April 26, 2022, from 1:00 p.m. to 4:00 p.m. See section V, “Public Participation,” for webinar registration information, participant instructions, and information about the capabilities available to webinar participants. If no participants register for the webinar, it will be cancelled.
Interested persons are encouraged to submit comments using the Federal eRulemaking Portal at
Although DOE has routinely accepted public comment submissions through a variety of mechanisms, including postal mail and hand delivery/courier, the Department has found it necessary to make temporary modifications to the comment submission process in light of the ongoing COVID-19 pandemic. DOE is currently suspending receipt of public comments via postal mail and hand delivery/courier. If a commenter finds that this change poses an undue hardship, please contact Appliance Standards Program staff at (202) 586-1445 to discuss the need for alternative arrangements. Once the COVID-19 pandemic health emergency is resolved, DOE anticipates resuming all of its regular options for public comment submission, including postal mail and hand delivery/courier.
The docket web page can be found at
Mr. Jeremy Dommu, U.S. Department of Energy, Office of Energy Efficiency and Renewable Energy, Building Technologies Office, EE-2J, 1000 Independence Avenue SW, Washington, DC 20585-0121. Telephone: (202) 586-9870. Email
Mr. Michael Kido, U.S. Department of Energy, Office of the General Counsel, GC-33, 1000 Independence Avenue SW, Washington, DC 20585-0121. Telephone: (202) 586-8145. Email:
For further information on how to submit a comment, review other public comments and the docket, or participate in the webinar, contact the Appliance and Equipment Standards Program staff at (202) 287-1445 or by email:
DOE proposes to update a previously approved standard by incorporating by reference the following industry standard into part 431: HI 40.6-2021, “Methods for Rotodynamic Pump Efficiency Testing.”
Copies of HI 40.6-2021 can be obtained from the Hydraulic Institute at 6 Campus Drive, First Floor North, Parsippany, NJ, 07054-4406, or by going to
DOE proposes to maintain previously approved standards incorporated by reference into part 431, except for the following, which DOE proposes to remove from part 431:
For a further discussion of these standards, see section IV.M of this document.
Commercial and industrial pumps (collectively, “pumps”) are included in the list of “covered equipment” for which DOE is authorized to establish and amend energy conservation standards and test procedures. (42 U.S.C. 6311)(1)(A)) DOE's energy test procedures for pumps are currently prescribed at title 10 of the Code of Federal Regulations (“CFR”), § 431.464, and 10 CFR part 431 subpart Y appendix A (“appendix A”). The following sections discuss DOE's authority to establish test procedures for pumps and relevant background information regarding DOE's consideration of test procedures for this equipment.
The Energy Policy and Conservation Act, as amended (“EPCA”),
The energy conservation program under EPCA consists essentially of four parts: (1) Testing, (2) labeling, (3) Federal energy conservation standards, and (4) certification and enforcement procedures. EPCA include definitions (42 U.S.C. 6311), test procedures (42 U.S.C. 6314), labeling provisions (42 U.S.C. 6315), energy conservation standards (42 U.S.C. 6313), and the authority to require information and reports from manufacturers (42 U.S.C. 6316).
The Federal testing requirements consist of test procedures that manufacturers of covered equipment must use as the basis for: (1) Certifying to DOE that their equipment complies with the applicable energy conservation standards adopted pursuant to EPCA (42 U.S.C. 6316(a); 42 U.S.C. 6295(s)), and (2) making other representations about the efficiency of that equipment (42 U.S.C. 6314(d)). Similarly, DOE must use these test procedures to determine whether the equipment complies with relevant standards promulgated under EPCA. (42 U.S.C. 6316(a); 42 U.S.C. 6295(s))
Federal energy efficiency requirements for covered equipment established under EPCA generally supersede State laws and regulations concerning energy conservation testing, labeling, and standards. (42 U.S.C. 6316(a) and 42 U.S.C. 6316(b); 42 U.S.C. 6297) DOE may, however, grant waivers of Federal preemption for particular State laws or regulations, in accordance with the procedures and other provisions of EPCA. (42 U.S.C. 6316(a))
Under 42 U.S.C. 6314, EPCA sets forth the criteria and procedures DOE must follow when prescribing or amending test procedures for covered equipment. EPCA requires that any test procedures prescribed or amended under this section must be reasonably designed to produce test results which reflect energy efficiency, energy use or estimated annual operating cost of a given type of covered equipment during a representative average use cycle and requires that test procedures not be unduly burdensome to conduct. (42 U.S.C. 6314(a)(2))
EPCA also requires that, at least once every 7 years, DOE evaluate test procedures for each type of covered equipment, including pumps, to determine whether amended test procedures would more accurately or fully comply with the requirements for the test procedures to not be unduly burdensome to conduct and be reasonably designed to produce test results that reflect energy efficiency, energy use, and estimated operating costs during a representative average use cycle.
In addition, if the Secretary determines that a test procedure amendment is warranted, the Secretary must publish proposed test procedures in the
DOE's established its test procedure for pumps in a final rule published on January 25, 2016. 81 FR 4086 (“January
On September 28, 2020, DOE published an early assessment review request for information (“RFI”) to determine whether to proceed with a rulemaking to amend the test procedure for commercial and industrial pumps. 85 FR 60734 (“September 2020 Early Assessment RFI”). Following review of the comments received in response to the September 2020 Early Assessment RFI, on April 16, 2021, DOE published an RFI in which it sought data and information pertinent to whether amended test procedures would (1) more accurately or fully comply with the requirement that the test procedure produces results that measure energy use during a representative average use cycle for the equipment without being unduly burdensome to conduct, or (2) reduce testing burden. 86 FR 20075 (“April 2021 RFI”). In response to requests from stakeholders,
In their comments, Summit asserted that the industry as a whole has become more aware of DOE's energy standards for pumps since January 2020 when the pumps standards went into effect. (Summit, No. 16 at p. 7) Grundfos suggested that DOE consider eliminating multiple open notices that affect a given industry to ensure proper stakeholder engagement. (Grundfos, No. 17 at p. 1)
As noted, EPCA requires DOE to periodically review the test procedures of covered equipment, including pumps, to determine whether amended test procedures would more accurately or fully comply with the requirements for the test procedures to not be unduly burdensome to conduct and be reasonably designed to produce test results that reflect energy efficiency, energy use, and estimated operating costs during a representative average use cycle. (42 U.S.C. 6314(a)(1)) In order to provide stakeholders opportunities to engage as part of DOE's decision making, DOE provided opportunity for stakeholder comment to the September 2020 Early Assessment RFI and the April 2021 RFI. This NOPR provides further opportunity for comment on
In this NOPR, DOE is proposing to:
(1) Expand the scope of the test procedure to include additional clean water pumps, specifically:
(a) Between-bearing (“BB”) pumps;
(b) radially-split, multi-stage, horizontal,
(c) in-line diffuser casing (“RSHIL”) pumps;
(d) radially-split, multi-stage, horizontal, end-suction diffuser casing (“RSHES”) pumps;
(e) small vertical in-line (“SVIL”) pumps;
(f) vertical turbine (“VT”) pumps;
(g) pumps sold with 6-pole induction motors or motors with design speeds between 960 rpm and 1,440 rpm;
(h) submersible turbine (“ST”) pumps with bowl diameters larger than 6 inches; and
(i) end-suction pumps not covered by the current test procedure;
(2) Clarify the applicability of the design temperature range scope limitation and modify the range parameters;
(3) Add and modify certain definitions in 10 CFR 431.462 to accommodate the expansion of scope and clarify existing definitions;
(4) Incorporate by reference HI 40.6-2021 into 10 CFR 431.463 and make minor revisions to the test procedure to address provisions in the current DOE test procedure that have been added to HI 40.6-2021;
(5) Remove the incorporations by reference of ANSI/HI 1.1-1.2-2014 and ANSI/HI 2.1-2.2-2014;
(6) Add specifications for stages for testing for expanded scope multi-stage pumps;
(7) Clarify test provisions for pumps with BEP at run-out;
(8) Clarify test provisions for calibration of measurement equipment;
(9) Update part-load loss factor equation coefficients in the calculation method for pumps sold with induction motors and controls;
(10) Provide a calculation method for pumps sold with inverter-only motors;
(11) Update the test procedure for submersible pumps to address proposed DOE coverage of submersible motors;
(12) Update the test procedure to address SVIL pumps;
(13) Add provisions for testing and rating pumps sold with a 6-pole induction motor or with design speeds between 960 rpm and 1,440 rpm; and
(14) Allow use of Alternative Efficiency Determination Methods (“AEDMs”).
DOE's proposed actions are summarized in Table II.1 compared to the current test procedure as well as the reason for the proposed change.
DOE has tentatively determined that the proposed amendments described in section III of this NOPR would not alter the measured efficiency of commercial and industrial pumps that are currently included in the scope of DOE's energy conservation standards for pumps. Therefore, DOE does not expect that retesting or recertification would be necessary for currently certified pumps as a result of DOE's adoption of the proposed amendments to the test procedures, if made final. Additionally, DOE has tentatively determined that the proposed amendments, if made final, would not increase the cost of testing for these pumps. As such, for pumps currently within the scope of DOE's energy conservation standards, any representations regarding the energy consumption of a pump or the cost of energy consumed by a pump would have to be made in accordance with the amended test procedure beginning 180 days after publication of the final rule. (42 U.S.C. 6314(d))
For pumps that are not currently within the scope of the test procedure and are not currently required to certify pump energy use, DOE is proposing that the test requirements proposed in appendix A, if adopted, would take place on the compliance date of amended energy conservation standards for pumps that DOE may ultimately decide to adopt as part of a separate rulemaking assessing the technological feasibility and economic justification for such standards. In other words, for pumps that DOE is proposing to include in the scope of the proposed test procedure, manufacturers would need to use the results of testing under appendix A to determine compliance with any new energy conservation standards that DOE may establish for these pumps.
Discussion of DOE's proposed actions are addressed in detail in section III of this NOPR.
In the following sections, DOE proposes certain amendments to its test procedures for pumps. For each proposed amendment, DOE provides relevant background information, explains why the amendment merits consideration, discusses relevant public comments, and proposes a potential approach.
The current DOE test procedure for pumps applies to five categories of “clean water pumps” with specific defined characteristics, and excludes certain defined categories
DOE defines “clean water pump” as a pump that is designed for use in pumping water with a maximum non-absorbent free solid content of 0.016 pounds per cubic foot, and with a maximum dissolved solid content of 3.1 pounds per cubic foot, provided that the total gas content of the water does not exceed the saturation volume, and disregarding any additives necessary to prevent the water from freezing at a minimum of 14 °F. 10 CFR 431.462.
The five categories of clean water pumps to which the current test procedure applies are: End-suction close-coupled (“ESCC”); end-suction frame mounted/own bearings (“ESFM”); in-line (“IL”); radially-split, multi-stage, vertical, in-line diffuser casing (“RSV”); and submersible turbine (“ST”). 10 CFR 431.464(a)(1)(i). The defined characteristics specify limits on flow rate, maximum head, design temperature range, motor type, bowl diameter, and speed.
In the April 2021 RFI, DOE requested comment on the percentage of pump models that fall within the scope of DOE's current test procedure. 86 FR 20075, 20079. Additionally, DOE also sought information regarding how manufacturers communicated performance in catalogs and other related literature for out-of-scope pumps.
In response, Grundfos generally recommended that an expansion to the
Summit responded that eight percent of their models are within scope of the DOE test procedure and that pump performance information is published in catalogs, pump curves, and brochures. (Summit, No. 16 at p. 3) Additionally, Summit stated that all in-scope pumps are labeled as meeting the DOE standard.
Although stakeholders did not respond to DOE's request for data on pumps operating with motors at speeds other than 1,800 rotations per minute (“rpm”) or 3,600 rpm in the April 2021 RFI, DOE did receive comments on this issue in response to the August 9, 2021 pumps energy conservation standards early assessment review RFI (“August 2021 ECS RFI”, Docket EERE-2021-BT-STD-0018, No. 1). 86 FR 43430. Specifically, the CA IOUs stated that for one pump distributor, 27 percent of its commercial pump sales were either pumps with motors running at 1,200 rpm or double suction pumps
DOE considered expanding scope to the following pump categories: Chemical process and wastewater pumps, small vertical inline pumps, certain additional clean water pumps (between-bearing, vertical suction, radially-split, multi-stage horizontal, line shaft and cantilever pumps), and pumps sold with motors that operate at 1,200 rpm. The following sections provide additional information and responses to stakeholder comments specific to the pumps that DOE considered for inclusion in the test procedure scope.
DOE notes that it is proposing changes to the current test procedure applicable to currently regulated pumps. Any representations regarding the energy consumption of these pumps or the cost of energy consumed by these pumps would have to be made in accordance with the amended test procedure beginning 180 days after publication of the final rule. (42 U.S.C. 6314(d)) The proposed changes to the test procedure would also apply to those pumps that DOE is proposing to include in its scope; however, for these pumps, the revised test procedure would be required in conjunction with the compliance date of any future amended energy conservation standards that DOE may set.
The scope of the current DOE test procedure, as described previously, excludes both chemical process and wastewater pumps.
In response to the April 2021 RFI, NEEA stated that there is functional overlap between pumps that are within the scope of the current DOE test procedure and those pumps that are excluded because they are certified under ASME/ANSI B73. (NEEA, No. 21 at p. 6) NEEA also stated that distributors report that a “significant portion” of ASME/ANSI B73 pumps are installed in clean water applications and that without this certification designation these pumps would be included in the scope for the DOE test procedure.
DOE also received comments pertaining to non-clean water pumps in the August 2021 ECS RFI. HI stated that the current definition of clean water pumps and the exclusion of non-clean water pumps from the test procedure scope aligns with regulations in both Canada and the EU. (HI, Docket EERE-2021-BT-STD-0018, No. 8 at p. 2) HI asserted that maintaining harmonization between the United States, Canada and the EU is important to minimize burden for manufacturers that distribute their pumps outside of the U.S.
Also in response to the August 2021 ECS RFI, Grundfos recommended against expanding the DOE scope beyond clean water pumps, asserting that uses for pumping other fluids are too varied. (Grundfos, Docket EERE-2021-BT-STD-0018, No. 9 at p. 2)
DOE acknowledges that certain non-clean water pumps may be used in clean water applications; however, DOE expects the number of non-clean water pumps used in the clean water applications to be relatively small. DOE notes that the scope of HI 40.6-2014, which is currently incorporated by reference into the DOE test procedure, includes clean water pumps only. The scope of the HI 40.6 standard changed in the 2016 version to state that the standard covers pumps that are included in DOE's energy conservation standards and therefore does not provide requirements for testing pumps designed for non-clean water applications. The scope of HI 40.6-2021 is identical to that of HI 40.6-2016. To test non-clean water pumps, DOE would need to reference or develop an alternate test procedure. While this test procedure might enable comparison between non-clean water pumps, it is unlikely that a clean water and non-clean water test procedure would provide comparable results.
Additionally, DOE notes that non-clean water pumps, specifically wastewater pumps, must meet specific performance requirements to ensure the health of the U.S. population. DOE would need to carefully evaluate how the performance of non-clean water pumps could be impacted by energy conservation standards and ensure that public health and safety would not be negatively affected. As such, additional investigation is needed to understand the market, energy savings potential, test procedure implications, and performance requirements of non-clean water pumps (
As discussed, the scope of the current DOE test procedure is limited to five categories of pumps designed for clean water applications. 10 CFR 431.464(a)(1)(i). One of these categories is in-line (IL) pumps, which are limited to shaft input power greater than or equal to 1 hp and less than or equal to 200 hp at BEP and full impeller diameter, and in which liquid is discharged in a plane perpendicular to the impeller shaft. 10 CFR 431.462. In 2016, a Circulator Pump Working Group
In response to the April 2021 RFI, NEEA, Grundfos, ASAP and NRDC, the CA IOUs, and HI recommended that DOE address SVIL pumps in the commercial and industrial pumps test procedure and energy conservation standards rulemakings, rather than in a rulemaking for circulator pumps (NEEA, No. 21 at p.7; Grundfos, No. 17 at p. 3; ASAP and NRDC, No. 18 at p. 2; CA IOUs No. 19 at p. 11; HI, No. 20 at p. 3) NEEA stated that there is confusion in the market as to whether SVIL pumps are subject to the DOE test procedure and energy conservation standards, and that SVIL pumps may be in the same family as, or have overlapping pump curves with, larger pumps that are currently subject to the test procedure and standards. (NEEA, No. 21 at p. 6) NEEA also stated that there is a trend in the HVAC industry to move away from distributing large central pumps to distributing smaller pumps, and that therefore unregulated SVIL pumps compete with larger regulated pumps.
DOE also received comments relative to SVIL pumps in the August 2021 ECS RFI. The CA IOUs stated that in discussions with distributors, one recommended adding fractional SVIL pumps to the scope of regulated equipment. (CA IOUs, Docket EERE-2021-BT-STD-0018, No. 10 at p. 5) According to the CA IOUs, this distributor stated that the lack of coverage currently causes confusion since some pumps within a given product line are covered and some are not.
Finally, DOE received comments relative to SVIL pumps in the May 7, 2021 Circulator Pumps Test Procedure and Energy Conservation Standard RFI (“May 2021 Circulator Pumps RFI”). 86 FR 24516, 24521. The CA IOUs supported NEEA's comments on SVIL pumps from the April 2021 RFI. (CA IOUs, Docket EERE-2016-BT-STD-0004, No. 116 at p. 6) The CA IOUs supported the incorporation and development of SVIL pump standards based on the PEI metric.
In the April 2021 RFI, DOE also requested shipment and market performance data for SVIL pumps. 86 FR 20075, 20079. In response, Grundfos and HI recommended that DOE conduct manufacturer interviews to obtain specific market performance data. (Grundfos, No. 17 at p. 3; HI, No. 20 at p. 4)
In the April 2021 RFI, DOE requested comment on whether the five pump categories currently included in DOE's regulations sufficiently represent the market and technology available for clean water pumps; whether these categories are sufficiently defined in order to ensure that the categories are mutually exclusive; or whether any of these categories or descriptions should be amended. 86 FR 20075, 20078.
In response to DOE's request for comment in the April 2021 RFI, Grundfos and HI supported the current pump equipment categories, and Grundfos stated that these pump categories represent the current market. (Grundfos, No. 17 at p. 1; HI, No. 20 at p. 2) NEEA and ASAP and NRDC recommended that DOE expand the scope of the pumps test procedure to cover additional pumps used in clean water applications. (ASAP and NRDC, No. 18 at p. 1; NEEA, No. 21 at p. 2) NEEA identified four categories of pumps that it stated may have overlapping uses and therefore may compete with pumps that are currently within scope of DOE regulations; specifically: Single and two stage axially-split pumps, end-suction multi-stage pumps, vertical turbine pumps, and American Society of Mechanical Engineers (“ASME”)/ANSI B73 certified pumps,
Similarly, ASAP and NRDC recommended adding double suction pumps, multi-stage end-suction pumps, vertical turbine pumps, and pumps tested at a nominal speed of 1,200 rpm. (ASAP and NRDC, No. 18 at p. 2) ASAP and NRDC stated that this would ensure consistent pump efficiency information is available for purchasers. (ASAP and NRDC, No. 18 at p. 1) ASAP and NRDC additionally commented that some unregulated pumps can be used in the same applications as some regulated pumps.
In response to the August 2021 ECS RFI, the CA IOUs supported NEEA's recommendation to expand the scope of the pumps test procedure to the four categories listed above. (CA IOUs, Docket EERE-2021-BT-STD-0018, No. 10 at p. 2) Grundfos stated that DOE should limit its focus of scope expansion to radially-split multi-stage horizontal pumps; and that positive displacement, axial/mixed flow, double suction, multi-stage axially-split, multi-stage radial split vertical immersible, non-submersible vertical turbine, and VS4/VS5 pumps
The following sections discuss DOE's consideration of additional categories of clean water pumps within the scope of the test procedure, including the specific categories suggested by commenters.
Section 1.2.9.2 of ANSI-HI 14.1-14.2-2019 describes between-bearing (“BB”) pumps as pumps that are one- or two-stage, axially-split, mounted to a baseplate, driven by a motor via a flexible coupling, and with bearings on both ends of the rotating assembly.
In the April 2021 RFI, DOE requested comment on whether pumps that meet the description of BB pumps might fall within the current test procedure scope and if BB pumps could be tested with the current DOE test procedure. 86 FR 20075, 20079. In response, ASAP and NRDC and NEEA recommended evaluating double suction pumps for inclusion in the test standards, and stated that most of these pumps are BB1 pumps,
Summit and Grundfos recommended a new category of double suction pumps/between-bearing pumps if DOE decides to expand its scope beyond clean water pumps. (Summit, No. 16 at p. 2; Grundfos, No. 17 at p. 4) Additionally, Grundfos specifically stated that BB1 pumps have different inlet/outlet configurations and losses when compared to IL pumps that are currently within the scope of the DOE test procedure. (Grundfos, No. 17 at p. 4) Summit stated that although they supply BB pumps, none are used in clean water applications, and that testing these pumps would be burdensome. (Summit, No. 16 at p. 3) Grundfos and HI commented that some BB1 pumps are designed for clean water applications and may be rated under 200 hp. (Grundfos, No. 17 at p. 3-4; HI, No. 20 at p. 4) Grundfos agreed that BB1 pumps can be tested according to the current DOE test procedure. (Grundfos, No. 17 at p. 4) While HI also agreed that BB1 pumps can be tested according to the DOE test procedure, they stated that BB1 pumps do not share the same physical and functional characteristics affecting energy consumption of any pump category currently defined by DOE. (HI, No. 20 at p. 4)
DOE also received comments on the August 2021 ECS RFI relevant to BB pumps. The CA IOUs stated that in discussions with distributors, two distributors suggested that split case and double suction pumps should be included in the scope of the pumps rulemaking. (CA IOUs, Docket EERE-2021-BT-STD-0018, No. 10 at p. 3) It is DOE's understanding that the recommendations to include split case and double suction pumps refer to BB pumps, since these two characteristics synonymous with between-bearing pumps.
Based on a review of the market, BB pumps tend to generally be larger than the pumps currently subject to the DOE test procedure. Many BB pumps exceed the head and horsepower limits in the current DOE test procedure. Additionally, BB pumps are not typically designed for clean water applications. Despite these generalities, DOE has identified certain clean water BB pumps under 200 hp and 459 feet of head that could be viewed as potentially interchangeable with those pumps that fall within the scope of the current DOE test procedure.
In order to address the potential for pumps that provide unregulated alternatives to the pumps currently subject to the DOE test procedure, DOE proposes to include BB pumps within the scope of the DOE test procedure. However, DOE does not propose to expand beyond clean water pumps and does not propose to expand the head or horsepower limitations currently listed in 10 CFR 431.464(1)(ii). Additional investigation is needed to understand the market, energy savings potential, test procedure implications, and performance requirements of non-clean water pumps. DOE has determined that it will continue to limit the applicability of this test procedure to clean water pumps at this time. An expansion of the head and horsepower restrictions has the potential to increase test burden by requiring larger laboratory equipment to test pumps according to the DOE test procedure. Through its literature review DOE has found few BB pumps that exceed the head and horsepower limits and are designed for clean water, leading DOE to tentatively determine that the burden of expanding head and horsepower restrictions outweigh the benefits of expanded scope.
Based on stakeholder comments, literature reviews, and reviews of pump schematics, DOE has tentatively determined that BB pumps can be tested using the methodology in HI 40.6-2021; therefore, DOE is not proposing any modifications specific to testing BB pumps in this test procedure NOPR.
Specific proposals for a definition of BB pumps are detailed in section III.B.5 of this document.
Section 1.3.3.1.2 of HI 14.1-14.2-2019 defines VS1 and VS2 pumps as vertically suspended, wet pit pumps with a single casing and discharge through the suspension column. VS1 pumps use a diffuser, while VS2 use a volute.
In response to the April 2021 RFI, DOE received comments from ASAP and NRDC and NEEA recommending the inclusion of vertical turbine pumps in the scope of the current DOE test procedure. (ASAP and NRDC, No. 18 at pp. 1-2; NEEA, No. 21 at p. 2) NEEA stated that these pumps present a compliance loophole in DOE's pump regulations and create market confusion. (NEEA, No. 21 at pp. 2-3) The CA IOUs encouraged DOE to evaluate vertical turbine pumps for inclusion in the test procedure. (CA IOUs, No. 19 at p. 11)
Based on a review of literature, DOE has tentatively determined that ST pumps and vertical turbine pumps have similar end uses. Additionally, DOE has tentatively determined that ST and vertical turbine pumps have similar bowl and impeller assemblies, and that vertical turbine pumps may even share an identical assembly with an ST pump produced by the same manufacturer. To address the potential of pumps that provide unregulated alternatives to the pumps currently subject to the DOE test procedure, DOE proposes to include vertical turbine pumps within the scope of the DOE test procedure. However, as discussed previously, DOE does not propose to expand beyond clean water pumps and does not propose to expand the head or horsepower limitations currently listed in 10 CFR 431.464(1)(ii). An expansion of the head and horsepower restrictions has the potential to increase test burden by requiring larger laboratory equipment to test pumps according to the DOE test procedure. Through its literature review, DOE has found few vertical turbine pumps that exceed the head and horsepower limits and are designed for clean water. Therefore, DOE has tentatively determined that the burden of expanding head and horsepower restrictions outweigh the benefits of expanded scope.
Based on literature reviews and reviews of pump schematics, DOE has tentatively determined that vertical turbine pumps can be tested using the methodology in HI 40.6-2021; therefore, DOE is not proposing any modifications specific to testing vertical turbine pumps in this test procedure NOPR.
Specific proposals for a definition of VT pumps are detailed in section III.B.6 of this document.
The current scope of the DOE test procedure includes radially-split, multi-stage, vertical, in-line casing diffuser (RSV) pumps, but does not include radially-split horizontal pumps, which are also multistage pumps used primarily in heating, cooling, and pressure boosting applications. In response to the April 2021 RFI, NEEA and ASAP and NRDC recommended that multi-stage end-suction pumps (specifically OH1j, OH7j, and OH13j)
DOE also received comments in response to the August 2021 ECS RFI relevant to multi-stage end-suction pumps. The CA IOUs stated that many distributors sell water booster pumps, which are often multi-stage end-suction pumps. (CA IOUs, Docket EERE-2021-BT-STD-0018, No. 10 at p. 3) Grundfos recommended that DOE focus its scope expansions on radially-split multi-stage horizontal pumps. (Grundfos, Docket EERE-2021-BT-STD-0018, No. 9 at p. 2) Grundfos also suggested that, like RSV pumps, RSH pumps should be limited to in-line flow, and that DOE should consider new categories for multi-stage products that do not have in-line connections.
DOE has surveyed materials and product literature available online and has tentatively determined that the multi-stage end-suction pumps discussed by NEEA, ASAP and NRDC, and the CA IOUs would be classified as radially-split, multi-stage, horizontal, (“RSH”) end-suction pumps. DOE's literature survey also tentatively concluded that RSV and RSH pumps were marketed for similar applications, and that RSH could therefore serve as an unregulated loophole to RSV pumps. In addition, through reviews of product literature and HI 14.1-14.2-2019 pump schematics, DOE has tentatively determined that RSH pumps can be tested using the current DOE test procedure. Based on DOE's research, DOE proposes to include RSH pumps with both in-line and end-suction flow configurations in its test procedure scope. Specific proposals for definitions or RSH pump categories are detailed in section III.B.7 of this document.
DOE defines a “close-coupled pump” as a pump having a motor shaft that also acts as the impeller shaft, and defines a “mechanically-coupled pump” as a pump that has its own impeller shaft and bearings separate from the motor shaft. 10 CFR 431.462. As discussed in the April 2021 RFI, DOE is aware that certain pumps may have their own shaft, but with no bearings to support that shaft. 86 FR 20075, 20078. Additionally, while the close-coupled pump definition describes a pump in which the motor shaft also serves as the pump shaft, the definition does not provide detail on how the motor and pump shaft may be connected. DOE has observed that some manufacturers describe close-coupled pumps as using an adapter to mount the impeller directly to the motor shaft. The coupling type is the only differentiator between ESCC pumps, which are “close-coupled pumps,” and ESFM pumps, which are “mechanically-coupled pumps.” In the January 2016 Final Rule, DOE noted that it intended for ESFM and ESCC pumps to be mutually exclusive in order to ensure that pumps that are close-coupled to the motor and have a single impeller and motor shaft would be part of the ESCC equipment category, while all other end-suction pumps that are mechanically-coupled to the motor and for which the bare pump and motor have separate shafts would be part of the ESFM equipment category. 81 FR 4086, 4096. Despite this intention DOE is aware that these definitions may have left some end-suction pumps out of scope.
In the April 2021 RFI, DOE requested comment on whether there are pumps being sold in commerce that may not meet the “close-coupled” or “mechanically-coupled” definitions but would otherwise meet the definition for an “end-suction” pump. 86 FR 20075, 20078.
HI stated that there are currently pumps that have impellers not directly connected to the motor shaft, with all pump loads supported by the motor bearings, which do not meet either the definition of close-coupled or mechanically-coupled pumps. (HI, No. 20 at p. 3)
Based on HI's response and DOE's review of ESCC and ESFM pumps, DOE has tentatively determined that there is a group of end-suction pumps that do not currently fall into either the ESFM or ESCC definition, but which may be competitors to the currently regulated pumps. Therefore, DOE proposes to include all end-suction pumps within the coverage of this test procedure by modifying the definitions of ESFM and ESCC pumps. The details of this proposal are outlined in section III.B.8 of this document. DOE has tentatively determined that no test procedure revisions would be needed to accommodate these additional end-suction pumps.
ANSI/HI 14.1-14.2-2019 includes design criteria for different pump configurations, and section 14.1.3.3.1.3 describes vertically separate discharge sump pumps, a category of pump that includes line shaft (“VS4”) pumps and cantilever (“VS5”) pumps. Both VS4 and VS5 pumps are vertically-suspended pumps with a single casing and with a discharge column that is separate from the shaft column. The pump equipment categories defined by DOE do not explicitly reference VS4 or VS5 pumps, and some pumps may be covered by both the DOE definition of an ESFM pump and the HI definition of a VS4 or VS5 pump. 86 FR 20075, 20079.
In the April 2021 RFI, DOE requested comment on whether the test procedure should be amended to explicitly address line shaft and cantilever pumps as described in the ANSI/HI 14.1-14.2-2019. 86 FR 20075, 20079. In response, Grundfos stated that line shaft pumps and cantilever pumps have designs similar to ESFM and ESCC pumps and that some are sold for clean water applications. (Grundfos, No. 17 at p. 3) Grundfos also commented that if DOE were to include line shaft and cantilever pumps within its scope, DOE should create a new equipment class since these pumps have different losses, and DOE would need to define a standard sump depth for testing since these products have a wide variance in sump depth.
Consistent with the comments from HI, DOE's literature survey indicates all cantilever pumps are primarily designed for non-clean water applications including liquids and slurries containing large solids. Therefore, DOE
Within the categories of clean water pumps included in the current DOE test procedure and proposed for inclusion in this notice, DOE also considered potential expansion to scope limitations related to bowl diameter, nominal speed, horsepower, and design temperature range.
As discussed previously, the scope of the current DOE test procedure includes submersible turbine pumps with a bowl diameter of 6 inches or smaller. 10 CFR 431.464(a)(1)(i)(E) and (a)(1)(ii)(E). In response to the September 2020 Early Assessment RFI, NEEA listed submersible turbine (ST) pumps with a bowl diameter greater than 6 inches as an example of pumps that DOE should consider including as part of an expanded scope. (NEEA, No. 7 at p. 8) NEEA's reasoning was that pumps within a regulated family may not be rated because they have a bowl diameter greater than 6 inches.
However, in response to the April 2021 RFI, HI stated that submersible turbine pumps with a flow rate less than 25 gpm at BEP are used in residential well applications and should remain out of scope since they have limited operating time. (HI, No. 20 at p. 3) DOE is not considering expanding scope to pumps with a flow rate less than 25 gpm at this time, due to the limitations leading to the current scope provision. However, DOE understands that flow rate typically increases with bowl diameter, so it is DOE's understanding that HI's comment is unrelated to a potential scope expansion to pumps with a bowl diameter greater than 6 inches.
As discussed in section III.A.3.b, DOE is proposing to include vertical turbine pumps within the scope of the DOE test procedure. These pumps are similar in design to ST pumps and commenters have indicated that the two pump categories can be used in overlapping applications. Stakeholder comments about the addition of vertical turbine pumps did not indicate a suggested bowl diameter limitation. As such DOE is not proposing one. To maintain consistency across pump categories, and in response to NEEA's early assessment RFI comments, DOE is proposing to remove the 6-inch bowl diameter limitations for ST pumps.
As discussed, DOE limits the scope of pumps under the current test procedure to those designed to operate with a 2- or 4-pole induction motor, or a non-induction motor with an operating range that includes speeds of rotation between 2,880 and 4,320 rpm and/or 1,440 and 2,160 rpm. 10 CFR 431.464(a)(1)(ii). In either case, the driver and impeller must rotate at the same speed. 10 CFR 431.464(a)(1)(ii)(D). The current DOE test procedure does not include pumps designed to operate with 6-pole induction motors or with non-induction motors that have a speed of rotation operating range exclusively outside the ranges defined.
In response to the April 2021 RFI, ASAP and NRDC recommended evaluating pumps sold with 6-pole, 1,200 rpm motors and pumps designed to be operated at 1,200 rpm. (ASAP and NRDC, No. 18 at pp. 1-2) Summit stated that if DOE were to expand the nominal motor speeds included in its test procedure, 1,200 rpm would be the best nominal speed to add. (Summit, No. 16 at p. 5)
In addition, DOE received comments in response to the August 2021 ECS RFI pertaining to this topic. The CA IOUs stated that it contacted several distributors, two of whom recommended adding pumps designed to operate at 1,200 rpm. (CA IOUs, Docket EERE-2021-BT-STD-0018, No. 10 at p. 3) The CA IOUs added that one of these distributors stated that 1,200 rpm pumps have a longer life than higher rpm pumps, while the other stated that not including them within the test procedure's scope is confusing to customers.
Based on a review of pump performance curves available online, DOE has tentatively determined that unregulated pumps tested with a nominal speed of 1,200 rpm are part of the same pump families as those pumps that currently fall within the scope of the DOE test procedure.
As discussed, the current DOE test procedure's scope is limited to covered pump categories with a 2- or 4-pole induction motor; or a non-induction motor with an operating range that includes speeds of rotation between 2,880 and 4,320 rpm and/or between 1,440 and 2,160 rpm, and for which the driver and impeller rotate at the same speed. 10 CFR 431.464(a)(1)(ii)(D). In addition, DOE's definitions for the five pump categories are limited to pumps with shaft input power greater than or equal to 1 hp and less than or equal to 200 hp at BEP and full impeller diameter. 10 CFR 431.462.
DOE received comments on the August 2021 ECS RFI from the CA IOUs, who stated that in discussions with distributors one stated that some pumps sold with electronically commutated motors (“ECMs”) and intended to run at higher speeds, such as 4,320 rpm, must be normalized to rate at 3,600 rpm and this adjustment causes the power of the
As stated previously, the definitions of the pump categories within the scope of the test procedure reference horsepower limitations based on shaft input power at BEP and full impeller diameter. 10 CFR 431.462. DOE defines “BEP” as the pump hydraulic power operating point (consisting of both flow and head conditions) that results in maximum efficiency and defines “full impeller diameter” as the maximum impeller diameter with which a given pump basic model is distributed in commerce. 10 CFR 431.462. DOE's test procedure for pumps at appendix A to subpart Y of part 431 also includes test provisions for determining both BEP and pump input power (also known as shaft input power), as well as provisions for normalizing all measured data to the specified nominal speed of rotation. As such, while the definitions themselves do not specify that shaft input power is determined at nominal speed, DOE understands the CA IOUs concern that the pump definitions could be read to exclude pumps with shaft input power greater than or equal to 1 HP at BEP at their design speed, but less than 1 HP when tested and corrected to nominal speed. In addition, DOE understands that the value of maximum efficiency varies little with speed, and is often assumed to be constant, and as such the definition of BEP alone would not be sufficient to assume that it must be determined at a certain speed different from that in the test procedure. For these reasons, DOE believes there could be value in clarifying the current scope limitations regarding horsepower that are embedded in the pump category definitions.
However, DOE also notes that, as previously discussed, it is proposing to expand the current test procedure's scope to include SVIL pumps, which the CA IOUs noted might address this issue. Specifically, the proposed inclusion of SVIL pumps would be for fractional horsepower pumps, so even when corrected to nominal speed, the pumps in question would be included in scope. DOE understands that use of high frequency (circa 4,000 rpm) ECMs is likely more prevalent on SVILs than on other pumps in this horsepower range, particularly as a result of their applications and competition with the circulator market. This means that including SVILs in this proposed test procedure would include most, if not all, pumps where motor power decreases below 1 hp when rated at BEP. For these reasons, DOE is not proposing to change the specified horsepower limitations within the pump category definitions at this time.
In response to the April 2021 RFI, Grundfos urged DOE to clarify how to handle certification of equipment where some equipment is regulated while others are not and provided the example of an RSV basic model sold with a 1 horsepower (“hp”) motor tested at 3 stages. Grundfos continued that if a similar pump is 2-stage and uses a 0.75 hp motor, it's partially out of scope. Grundfos recommended that equipment that straddles the scope of the test procedure should be considered to be out of scope. (Grundfos, No. 17 at p. 10-11)
DOE understands that the same model of RSV pump may be sold with two stages, three stages, or some other number of stages. DOE's RSV pump definition includes those pumps that have a shaft input power greater than or equal to 1 hp and less than or equal to 200 hp at BEP and full impeller diameter and at the number of stages required for testing. 10 CFR 431.462. DOE's testing provisions for RSV in section C.2 of appendix A to subpart Y of part 431 specify that the number of stages required for testing is three—or, if the basic model is only available with fewer than three stages, to test the basic model with the maximum number of stages with which it is distributed in commerce in the United States. Therefore, the RSV pump model sold with 2 or 3 stages would be included in the scope of the test procedure (and standards) if it has a shaft input power greater than or equal to 1 hp when tested at 3 stages, and the resulting PEI would apply to all stages with which the pump model is sold. For this reason, DOE is not making any changes to the scope of the test procedure.
The current scope for the pumps test procedure is limited to pumps with a design temperature range between and including 14 to 248 °F. This range was derived from the original negotiation term sheet for pumps, which recommended limiting the scope to pumps with a design range from -10 °C to 120 °C. (Docket EERE-2013-BT-NOC-0039-0092). For the purposes of its regulations, DOE translated this range to Fahrenheit. DOE has received inquires as to whether a pump marketed for temperatures up to 250 °F is outside of the current test procedure's scope. DOE has reviewed marketing materials for a number of pumps and found that common upper limits of temperature are 212, 225, 248, 250, and 300 °F. Some marketing materials state that standard seals may have one high temperature limit while optional seals provide a higher limit (typically 250 or 300 °F). DOE understands the original intent of the scope limitation was to exclude pumps designed exclusively for low or high temperatures from the test procedure. However, if a manufacturer is offering a pump model across all temperature ranges in order to minimize SKUs, rather than offering separate low temperature and high temperature models, DOE considers that such a pump model should be subject to the regulations. Only pumps designed and marketed for temperatures exclusively outside the range of DOE's scope would be excluded from the test procedure and energy conservation standards. DOE has also recognized that rounding to a temperature limit of 250 °F when translating from °C to °F would be preferable to using the exact value of 248 °F since manufacturers commonly use rounded temperature values in their marketing materials. Similarly, DOE
To clarify the scope of the pumps test procedure and to improve the enforceability of the regulation, DOE is proposing to change the wording and the values, such that the scope would include pumps with a design temperature inclusive of any part of the range from 15 to 250 °F.
Pumps generally have one of two common discharge types, either a volute or a diffuser. A volute is made up of one or two scroll-shaped channels, whereas a diffuser has 3 or more passages that diffuse the liquid that is being pumped. The current definitions for end-suction and in-line pumps use the term “volute,” when in practice either volutes or diffusers may be used for these categories of pumps. For example, DOE's current definition for end-suction pump includes the following: “The liquid is discharged through a volute in a plane perpendicular to the shaft,” while the definition for ESCC pump, which is an end suction pump, specifically references OH7 pumps. 10 CFR 431.462. However, Table 14.1.3.7 of HI 14.1-14.2-2019 specifies a diffuser as the standard casing for OH7 pumps. Similarly, DOE's current definition for IL pump includes the following: “in which liquid is discharged through a volute in a plane perpendicular to the shaft,” and specifically references OH4 and OH5 pumps as examples of end-suction pumps.
DOE interprets the term “volute” in its definitions for “end-suction pump” and “in-line pump” to mean the part of the pump casing through which liquid is discharged generally, rather than to reference a specific type of discharge. To avoid this unintentional inconsistency between DOE's terminology and the terminology used by the updated industry standard, DOE proposes to amend the definitions of in-line pump and end-suction pump to remove the distinction that liquid is discharged “
The current DOE definitions for ESCC pump, ESFM pump, IL pump, RSV pump, and ST pump all include references to ANSI/HI 2.1-2.2-2014 pump configurations as examples of pumps that would meet the given definition. DOE has tentatively determined that it will be beneficial if the definitions are self-contained, and that these examples may have been causing confusion as to which pumps the definitions applied to. Therefore, DOE proposes to remove references to specific pump configurations as defined in ANSI/HI 1.1-1.2-2014 and ANSI/HI 2.1-2.2-2014 in the definitions for ESCC, ESFM, IL, RSV, and ST pumps.
The current DOE definition for “bowl diameter” references the definition of “intermediate bowl” in ANSI/HI 2.1-2.2-2014. This is the sole remaining reference to ANSI/HI 2.1-2.2-2014 in the test procedure if the proposed changes to eliminate the HI pump class references are adopted. DOE has tentatively determined it would be more helpful for readers if the bowl diameter definition was self-contained, particularly since HI 2.1-2.2-2014 would not be referenced elsewhere. To disassociate the definition of “bowl diameter” from ANSI/HI 2.1-2.2-2014, DOE is proposing to define “bowl diameter” as referring to “the maximum dimension of an imaginary straight line passing through, and in the plane of, the circular shape of the intermediate bowl of the bare pump that is perpendicular to the pump shaft and that intersects the outermost circular shape of the intermediate bowl of the bare pump at both of its ends.” With respect to “intermediate bowl,” DOE proposes to define this term as “the enclosure within which the impeller rotates and which serves as a guide for the flow from one impeller to the next.”
The proposed definitions would be added to 10 CFR 431.462.
As discussed in section III.A.2, DOE is proposing to expand the scope of the test procedure to include SVIL pumps, which are identical to IL pumps except for having a shaft input power less 1 hp. The Circulator Pump Working Group recommended the following definition for SVIL pumps:
“Small vertical in-line pump means a single stage, single-axis flow, dry rotor, rotodynamic pump that: (1) Has a shaft input power less than 1 hp at best efficiency point at full impeller diameter, (2) is distributed in commerce with a motor that does not have to be in a horizontal position to function as designed, and (3) discharges the pumped liquid through a volute in a plane perpendicular to the shaft.”
In the May 2021 Circulator Pumps RFI, DOE requested comment on the suitability of the above definition. 86 FR 24516, 24522. In response, HI and NEEA supported the circulator pumps working group definition of SVILs. (HI, Docket EERE-2016-BT-STD-0004, No. 112 at p. 4; NEEA, Docket EERE-2016-BT-STD-0004, No. 115 at p. 4)
The recommended definition would distinguish SVIL pumps from DOE's current IL pump definition
Another difference is that the IL definition includes a group of three parameters to exclude circulator pumps—namely that they are either mechanically-coupled or close-coupled, have a pump power output that is less than or equal to 5 hp at BEP at full impeller diameter, and are distributed in commerce with a horizontal motor. In contrast, the recommended SVIL definition is meant to exclude circulator pumps through clause (2)—
DOE notes that clause (3) of the recommended SVIL definition (“discharges the pumped liquid through a volute in a plane perpendicular to the shaft”) refers to a volute. For the reasons discussed in section III.B.1 of this document, DOE proposes excluding this reference from the proposed SVIL definition.
The recommended SVIL pump definition, through clause (2), also requires that these pumps be distributed into commerce with a motor, meaning SVIL pumps cannot be sold as a bare pump. Based on a literature search, DOE has tentatively determined that all SVIL pumps are sold with a motor. However, by proposing to replace clause (2) with an exclusion for circulator pumps, this requirement would be eliminated.
Although not addressed in the recommendation from the Working Group, the defined term “twin-head pump” (10 CFR 431.462) would be applicable to SVIL pumps. Specifically, in the January 2016 Final Rule, DOE adopted a test procedure for “twin-head pumps”, where a twin-head pump is defined as a: “dry rotor, single-axis flow, rotodynamic pump that contains two impeller assemblies, which both share a common casing, inlet, and discharge, and each of which (1) Contains an impeller, impeller shaft (or motor shaft in the case of close-coupled pumps), shaft seal or packing, driver (if present), and mechanical equipment (if present); (2) Has a shaft input power that is greater than or equal to 1 hp and less than or equal to 200 hp at best efficiency point (BEP) and full impeller diameter; (3) Has the same primary energy source (if sold with a driver) and the same electrical, physical, and functional characteristics that affect energy consumption or energy efficiency; (4) Is mounted in its own volute; and (5) Discharges liquid through its volute and the common discharge in a plane perpendicular to the impeller shaft.” 81 FR 4086, 4095-4096 and 4115-4116 (Jan. 25, 2016).
Since SVIL pumps are similar to IL pumps but operate at a smaller horsepower, and also are available in twin-head configurations DOE proposes to define a new term—“small vertical twin-head pump”—and to extend the twin-head pump test procedure adopted in the January 2016 Final Rule to small vertical twin-head pumps. Accordingly, the proposed definition would read as: “small vertical twin-head pump” as a dry rotor, single-axis flow, rotodynamic pump that contains two equivalent impeller assemblies, each of which:
(1) Contains an impeller, impeller shaft (or motor shaft in the case of close-coupled pumps), shaft seal or packing, driver (if present), and mechanical equipment (if present); and
(2) Has a shaft input power that is less than or equal to 1 hp at BEP and full impeller diameter; and
(3) Has the same primary energy source (if sold with a driver) and the same electrical, physical, and functional characteristics that affect energy consumption or energy efficiency; and
(4) Is mounted in its own volute; and
(5) Discharges liquid through its volute and the common discharge in a plane perpendicular to the impeller shaft.
To summarize, DOE is proposing to define SVIL pumps based on the recommended definition from the Circulator Pump Working Group with modifications to include SVILs that are small vertical twin-head pumps; to exclude pumps that are circulator pumps; and to remove the current reference to a volute. Specifically, DOE is proposing to define a “small vertical in-line pump” as a small vertical twin-head pump or a single stage, single-axis flow, dry rotor, rotodynamic pump that: (1) Has a shaft input power less than 1 hp at best efficiency point at full impeller diameter, (2) in which liquid is discharged in a plane perpendicular to the shaft; and (3) is not a circulator pump.
As discussed in section III.A.3.a, DOE is proposing to add between-bearing pumps to the scope of this test procedure and is therefore proposing a definition for this pump category.
ANSI/HI 14.1-14.2-2019 defines between-bearing pump as a rotodynamic pump with the impeller(s) mounted on a shaft between-bearings on either end. In addition, all between-bearing pumps described in ANSI/HI 14.1-14-2-2019 are mechanically-coupled and dry rotor. Through a literature review, DOE has tentatively determined that the between-bearing pumps that are most similar to the pumps currently regulated by DOE have axially-split casings and 1 or 2 stages. Accordingly, using ANSI/HI 14.1-14.2-2019 as the basis for its approach, DOE is proposing to use the defined terms “dry rotor pump”, rotodynamic pump”, and “mechanically-coupled pump” to define a between-bearing pump,—
In addition to proposing a definition for between-bearing pump, DOE is also proposing to define the associated term “axially-split pump.” The term “axially-split” refers to a design of pump casing that can be separated, for maintenance and assembly, in a plane parallel to the impeller shaft. DOE proposes to define an “axially-split pump” based on ANSI/HI 14.1-14.2-2019 as “a pump with a casing that can be separated or split in a plane that is parallel to and which contains the axis of the impeller shaft.”
As discussed in section III.A.3.b, DOE is proposing to add vertical turbine pumps to the scope of its test procedure and is therefore proposing a definition for this pump category. ANSI/HI 14.2-14.2 -2019 defines vertical turbine pumps as “single-casing, non-submersible, pumps with impellers mounted in a vertically suspended shaft, that discharge liquid through the column.” Based on this definition and existing DOE defined terms and proposed defined terms, DOE is proposing to define the term “vertical turbine pump” as a vertically-suspended, single-stage or multi-stage, dry rotor, rotodynamic pump:
(1) That has a shaft input power greater than or equal to 1 hp and less than or equal to 200 hp at BEP and full impeller diameter and at the number of stages required for testing;
(2) For which no external part of such a pump is designed to be submerged in the pumped liquid;
(3) That has a single pressure containing boundary (
(4) That discharges liquid through the same casing in which the impeller shaft is contained.
DOE currently defines a RSV pump as a vertically-suspended, multi-stage, single axis flow, dry rotor, rotodynamic pump:
(1) That has a shaft input power greater than or equal to 1 hp and less than or equal to 200 hp at BEP and full impeller diameter and at the number of stages required for testing; and
(2) In which liquid is discharged in a place perpendicular to the impeller shaft; and
(3) For which each stage (or bowl) consists of an impeller and diffuser;
(4) For which no external part of such a pump is designed to be submerged in the pumped liquid; and
(5) Examples include, but are not limited to, pumps complying with ANSI/HI nomenclature VS8, as described in ANSI/HI 2.1-2.2-2014.
As discussed in section III.A.3.c, DOE is proposing to include within the scope of the DOE test procedure RSH pumps with both end-suction and in-line flow configurations. RSH pumps are nearly identical to RSV pumps except for the mounting orientation and flow configurations. In their comments to the August 2021 ECS RFI, Grundfos recommended that DOE consider new categories for products similar to RSV and RSH with connections that are not in line. (Grundfos, Docket EERE-2021-BT-STD-0018, No. 9 at p. 2) As discussed in section III.A.3.c, RSH pumps may have different flow configurations that are expected to impact pump efficiency; therefore, DOE is proposing three definitions for RSH pumps based on the existing DOE definition for pumps: One for an overarching category of RSH pumps, which does not characterize flow; one for in-line RHS pumps; and one for end-suction RSH pumps. The three definitions would be modified to read as follows:
Radially-split, multi-stage, horizontal, diffuser casing (RSH) pump means a horizontal, multi-stage, dry rotor, rotodynamic pump:
(1) That has a shaft input power greater than or equal to 1 hp and less than or equal to 200 hp at BEP and full impeller diameter and at the number of stages required for testing; and
(2) In which liquid is discharged in a plane perpendicular to the impeller shaft; and
(3) For which each stage (or bowl) consists of an impeller and diffuser; and
(4) For which no external part of such a pump is designed to be submerged in the pumped liquid.
Radially-split, multi-stage, horizontal, in-line diffuser casing (“RSHIL”) pump means a single-axis flow RSH pump in which the liquid enters the pump in a plane perpendicular to the impeller shaft.
Radially-split, multi-stage, horizontal, end-suction diffuser casing (“RSHES”) pump means a RSH pump in which the liquid enters the bare pump in a direction parallel to the impeller shaft and on the side opposite of the bare pump's driver-end.
As discussed in section III.A.3.d, DOE defines a close-coupled pump as a pump having a motor shaft that also acts as the impeller shaft, and defines a mechanically-coupled pump as a pump that has its own impeller shaft and bearings separate from the motor shaft. DOE has tentatively determined that these definitions leave a gap in the end-suction pump category and is proposing to modify the definitions to eliminate that gap.
In the April 2021 RFI, DOE requested comment on the definitions of “close-coupled pump” and “mechanically-coupled pump” and whether the terms should be revised. 86 FR 20075, 20078.
Summit stated that it has no concerns with the current definitions for ESCC and ESFM and that they are definitive enough. (Summit, No. 16 at p. 3) Summit's comments also addressed energy conservation standards topics, which DOE will address in the pumps standards rulemaking. HI suggested the following change to the definitions: (1) A close-coupled pump, for the purposes of this regulation, is defined as a pump in which the driver's bearings absorb the pump axial load; and (2) A mechanically-coupled pump, for the purposes of this regulation, is defined as a pump in which bearings external to the driver absorb the pump axial load. (HI, No. 20 at p. 3) Grundfos agreed with HI's recommendation to modify the definitions for close-coupled pump and mechanically-coupled pump and emphasized that products that do not have bearings and have an impeller that is not on the motor shaft should be covered by these definitions. (Grundfos, No. 17 at p. 2) Grundfos additionally stated that the definitions for these products should utilize how the axial loads are handled as a differentiating factor for these terms.
DOE acknowledges that a definition that addresses how the axial load is
A close-coupled pump means a pump in which the driver's bearings absorb the pump's axial load.
A mechanically-coupled pump means a pump in which bearings external to the driver absorb the pump's axial load.
In DOE's view, these revised definitions should capture all end-suction pumps whose axial loads are supported with bearings. This change should encompass the previously uncovered end-suction pumps and clarify the definitions sufficiently to avoid future confusion.
The definition for IL pump applies to pumps for which the liquid is discharged from the pump in a plane (
In the April 2021 RFI, DOE requested comment on how manufacturers are currently categorizing close-coupled pumps with tangential discharge volutes relative to the five pump categories defined at 10 CFR 431.464 and whether DOE should provide additional detail in the definitions for single-axis flow pump and/or end-suction pump regarding tangential discharge volute configurations. 86 FR 20075, 20078. Summit, Grundfos, and HI all commented that the existing definitions of end-suction pump and IL pump are sufficient. (Summit, No. 16 at p. 3; Grundfos, No. 17, at p. 2; HI, No. 20 at p. 3) Summit additionally stated that it assumes end-suction was relative to suction and parallel to the shaft, and that tangential discharge pumps are included in end-suction type pumps (Summit, No. 16 at p. 3) DOE interpreted this to mean Summit interprets end-suction as suction parallel to the impeller shaft. HI and Grundfos stated that tangential discharge is not a concern for IL pumps and RSV pumps because of the requirement for single axis flow included in the definitions for IL pump and RSV pump. (HI, No. 20 at p. 3; Grundfos, No. 17 at p. 2) HI and Grundfos additionally stated that tangential discharge is not a design characteristic for ST pumps, since this would imply a pump discharge perpendicular to the pump shaft, and that tangential discharge is already covered in both the ESCC pump and ESFM pump definitions.
After further reviewing the definitions for single axis flow pump, ESCC pump, ESFM pump, IL pump, and RSV pump, and taking into account stakeholder comments, DOE has tentatively determined that the current definitions are sufficient and is not proposing to revise the definitions for end-suction pump or in-line pump at this time.
DOE currently defines a “pump” as “equipment designed to move liquids (which may include entrained gases, free solids, and totally dissolved solids) by physical or mechanical action and includes a bare pump and, if included by the manufacturer at the time of sale, mechanical equipment, driver, and controls.” 10 CFR 431.462. DOE currently defines “bare pump” as “a pump excluding mechanical equipment, driver, and controls.”
In response to the April 2021 RFI, Grundfos and HI supported the definition of a pump as written. (Grundfos, No. 17 at p. 1; HI, No. 20 at p. 2) Summit commented that the pump definition could better describe what pump parts are subject to regulation. (Summit, No. 16 at p. 2) Specifically, Summit stated that it interpreted the definition such that if the parts in a kit alone will only be used to make a pump, with no other kits or parts needed, such a kit would be considered a pump.
DOE acknowledges that determining the end use of a pump kit, or a pump part can be burdensome. DOE currently interprets the term “bare pump” to include any kit that contains all the parts necessary for an operating pump, barring mechanical equipment, driver, and controls. Replacement parts are not the subject of this regulation.
The current DOE test procedure for pumps incorporates the following industry test standards: HI 40.6-2014, ANSI/HI 1.1-1.2-2014, and ANSI/HI 2.1-2.2-2014. 10 CFR 431.463. The following sections describe updates to these industry standards and discuss what industry standards DOE is proposing to incorporate by reference in
As discussed in the April 2021 RFI, the DOE test procedure for pumps generally incorporates HI 40.6-2014. 86 FR 20075, 20080. Since publication of the January 2016 Final Rule, the Hydraulics Institute updated HI 40.6-2014 with the publication of HI Standard 40.6-2016, “Methods for Rotodynamic Pump Efficiency Testing” (“HI 40.6-2016”). The definitions and procedures in HI 40.6-2016 align with the DOE test procedure for pumps published in the January 2016 Final Rule. HI published another updated version of HI 40.6 in 2021, “Methods for Rotodynamic Pump Efficiency Testing” (“HI 40.6-2021”). HI 40.6-2021 includes the following modifications as compared to HI 40.6-2014 (relevant sections of HI 40.6-2021 are included in parentheses after a summary of the modification):
(1) Clarified that the industy testing standard covers efficiency testing of rotodynamic pumps that are subject to DOE's energy conservation standards. (Section 40.6.1 “Scope”)
(2) Updated the calculation of bare pump efficiency to match the current DOE test procedure requirements for plotting test data to determine the best efficiency point (“BEP”) rate of flow. (Section 40.6.6.3 “Performance curve”)
(3) Updated the description and requirements of the pressure tap configuration for measurement sections at inlet and outlet of the pump. (Section A.3.1.3 “Pressure taps”)
(4) Added an informative appendix for determining, applying, and calculating measurement instrument uncertainty. (Appendix H “Determination, application, and calculation of instrument (systematic) uncertainty (informative)”)
(5) References ANSI/HI 14.1-14.2 “Rotodynamic Pumps for Nomenclature and Definitions” (“ANSI/HI 14.1-14.2”) which supersedes ANSI/HI 1.1-1.2-2014 and ANSI/HI 2.1-2.2-2014. (Section 40.6.4.1 “Vertically suspended pumps”; Section 40.6.4.3 “All other pump types”)
(6) Includes a new appendix (Appendix E) for the testing of circulator pumps. (Appendix E “Testing Circulator Pumps”)
DOE noted in the April 2021 RFI that comments in response to the September 2020 Early Assessment RFI suggested that DOE adopt HI 40.6-2021 instead of HI 40.6-2016, with commenters stating that the 2021 version includes clarifying edits, is no more burdensome to conduct, and includes a section for testing circulator pumps. 86 FR 20075, 20080. In the April 2021 RFI, DOE again requested comment on whether it should adopt HI 40.6-2016 or HI 40.6-2021.
DOE has tentatively determined that with respect to the provisions of HI 40.6-2014, the corresponding provisions of HI 40.6-2021 are substantively the same and adopting such provisions would not change the current test procedure. As such, in order to reference the most current industry test procedure, DOE is proposing to incorporate by reference HI 40.6-2021 in place of HI 40.6-2014.
While DOE proposes to incorporate by reference HI 40.6-2021 as the basis for its proposed test procedure, DOE has tentatively determined that certain sections of the industry testing standard are not applicable to the DOE test procedure. Specifically, Section 40.6.1, Scope, provides the scope specific to the test methods outlined in HI 40.6; Section 40.6.5.3 provides provisions regarding the generation of a test report; appendix “B” provides informative guidance on test report formatting; appendix “E” provides normative test procedures for circulator pumps; and appendix “G” compares HI 40.6 and DOE's nomenclature. None of these sections are required for testing and rating pumps in accordance with DOE's proposed procedure. As such, DOE is not proposing to adopt Section 40.6.1, Section 40.6.5.3, appendix B, appendix E, and appendix G.
Additionally, certain provisions of HI 40.6-2021 are consistent with the additional provisions established by DOE in appendix A. As such, DOE is proposing to maintain those provisions through reference to HI 40.6-2021, specifically:
(1) Section I.D.1 of appendix A, which addresses damping devices, would be amended to reference the corresponding provisions in HI 40.6.3.2.2;
(2) Section I.D.2 of appendix A, which addresses stabilization, would be amended to reference the corresponding provisions in HI 40.6.5.5.1;
(3) Section I.D.3 of appendix A, which addresses calculations and rounding, would be amended to reference the corresponding provisions in HI 40.6.6.1.1;
(4) Sections III.D.1, IV.D.1, V.D.1, VI.D.1, and VII.D.1 of appendix A, which outline testing the BEP of different pump configurations, would be amended to reference the corresponding provisions in HI 40.6.5.5.1.
Subpart Y to part 431 currently incorporates by reference ANSI/HI 1.1-1.2-2014 and ANSI/HI 2.1-2.2-2014. DOE references ANSI/HI 1.1-1.2-2014 and ANSI/HI 2.1-2.2-2014 in defining certain terms in 10 CFR 431.462. In 2019, ANSI/HI 1.1-1.2-2014 and ANSI/HI 2.1-2.2-2014 were updated and combined into ANSI/HI 14.1-14.2-2019, “American National Standard for Rotodynamic Pumps for Nomenclature and Definitions” (“ANSI/HI 14.1-14.2-2019”). The notable additions to ANSI/HI 14.1-14.2 which were absent in ANSI/HI 1.1-1.2-2014 and ANSI/HI 2.1-2.2-2014 are outlined below:
(1) ANSI/HI 14.1-14.2-2019 includes additonal figures and tables to represent information included in ANSI/HI 1.1-1.2-2014 and ANSI/HI 2.1-2.2-2014;
(2) ANSI/HI 14.1-14.2-2019 adds new pump definitions and pump classifications;
(3) ANSI/HI 14.1-14.2-2019 includes configuration definitions for vertical in-line, vertical end-suction, vertical self-priming, seal-less, magnetic drive, canned motor, and multi-stage pumps;
(4) ANSI/HI 14.1-14.2-2019 adds new definitions for discharge casing, volute,concentric casing, modified concentric casing, vaned diffuser/collector, bowl, and stage casing; and
(5) ANSI/HI 14.1-14.2-2019 includes a new “preferred operating region” section to define a guideline for reccomended operating flow rates.
In the April 2021 RFI, DOE requested comment on incorporating ANSI/HI 14.1-14.2-2019 by reference into the DOE test procedure. 86 FR 20075, 20080-20081. Grundfos and HI encouraged DOE to incorporate ANSI/HI 14.1-14.2-2019 (Grundfos, No. 17 at p. 4; HI, No. 20 at p. 2). However, stakeholders did not address whether adoption of ANSI/HI 14.1-14.2-2019 would substantively change currently defined terms and equipment classes.
As stated previously, in general the current DOE test procedure incorporates pump designations from ANSI/HI 1.1-1.2-2014 and ANSI/HI 2.1-2.2-2014 as examples for the definitions of end-suction close-coupled (ESCC); end-
Additionally, DOE's current test procedure definition of “bowl diameter” relies on the “intermediate bowl” definition in ANSI/HI 2.1-2.2-2014. DOE is proposing to modify its definition for “bowl diameter” and add a DOE definition for “intermediate bowl” to remove the current reference to ANSI/HI 2.1-2.2-2014. These proposed changes will create a more self-contained definition. These proposed changes are discussed in section III.B.3 of this document.
The current energy efficiency standards for pumps are based on the PEI metric. 10 CFR 431.465. The PEI metric is a ratio of the pump energy rating (“PER”) of the tested pump to the PER of a minimally-compliant pump (“PER
The PEI metric is a ratio of the pump energy rating (“PER”) of the tested pump to the PER of a minimally-compliant pump (“PER
In response to the April 2021 RFI, NEEA stated that DOE's current pump test procedure generally provides a good representation of pump energy consumption and that the current pump metrics are good indicators of relative efficiency. (NEEA, No. 21 at p. 2)
This section discusses the proposed regulatory metric for SVIL pumps and additional clean water pumps that DOE is proposing to incorporate into its test procedure scope. In the May 2021 Circulator Pumps RFI, DOE discussed that the Circulator Pump Working Group recommended evaluating SVIL pumps using the PEI
In their comments to the May 2021 Circulator Pumps RFI, the CA IOUs reiterated their support for SVILs to be rated using the PEI
DOE reviewed the PEI
For the additional clean water pump categories that DOE is proposing to include within the scope of the test procedure (
As discussed in section III.C.1, DOE is proposing to utilize HI 40.6-2021 in its test procedure for pumps with certain exceptions. HI 40.6-2021 specifies calculating pump power input,
Sections II through VII of the DOE test procedure specify methods for determining PEI
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In response to the April 2021 RFI, NEEA recommended against any modifications to the test procedure that would minimally improve its representation of efficiency but that would require manufacturers to retest and rerate. (NEEA, No. 21 at p. 2) Similarly, HI recommended making only clarifications to the test procedure, except for the addition of a calculation method for power drive system losses for inverter-only motors. (HI, No. 20 at p. 1) The following sections discuss proposed amendments to the test procedure.
The scope of the current test procedure is limited to pumps designed to operate with either a 2- or 4-pole induction motor or a non-induction motor with a speed of rotation operating range between 2,880 and 4,320 rpm and/or 1,440 and 2,160 rpm. 10 CFR 431.464(a)(1)(ii). Section I.C.1 of appendix A specifies the selection of nominal speed of rotation of either 1,800 or 3,600 rpm depending on the number of poles of the motor or the operating range of non-induction motors.
As discussed in section III.A.4.b, DOE is proposing to include in the scope of the test procedure pumps that operate between 960 and 1,440 rpm or are designed to operate with 6-pole motors. DOE proposes that these pumps would be tested with a nominal speed of 1,200 rpm. DOE is also proposing updates to the calculation and rounding sections of the test procedure to address this additional nominal speed.
In the April 2021 RFI, DOE requested comment on whether the nominal motor speeds of 1,800 rpm and 3,600 rpm used in the current DOE test procedure appropriately represent the operation and energy use of pumps that are capable of higher speeds. 86 FR 20075, 20083. If these motor speeds are not representative, DOE requested comment on whether a testing-based or calculation-based approach would provide more representative energy use values and the expected cost burden of each.
HI commented that the test procedure has a gap in regard to pumps sold with higher speed motors but asserted that the comment period did not allow enough time to fully develop a recommendation to modify the test procedure. (HI, No. 20 at p. 7). HI stated that they would continue to work on a recommendation and requested that DOE involve stakeholders in the solution.
The current DOE test procedure specifies that RSV pumps shall be tested with three stages and that ST pumps shall be tested with nine stages. If the unit under test is only available with fewer than the required number of stages, the pump is tested with the maximum number of stages with which the unit is distributed in commerce in the United States. If the unit under test is only available with greater than the number of required stages, the pump is tested with the lowest number of stages with which the unit is distributed in commerce in the United States. If the unit under test is available with both fewer and greater than the required number of stages, but not the required number of stages, the pump is tested with the number of stages closest to the required number of stages. If both the next lower and next higher number of stages are equivalently close to the required number of stages, the pump is tested with the next higher number of stages.
RSH and VT pumps are sold with a varying number of stages, in which the same pump may have options for multiple different stages for multiple applications. To reduce testing burden and mirror the practice established for RSV pumps, DOE proposes that RSH pumps be tested with three stages. To reduce testing burden and mirror the practice established for ST pumps, DOE proposes testing VT pumps with nine stages. If units of the basic model of pump being tested are not distributed in commerce with the number of stages prescribed for testing, the existing instructions for selection of the correct number of stages to use during testing would be followed.
As defined in section IIIB.5, BB pumps can have either one or two stages. For BB basic models that are distributed into commerce with both one and two stages, DOE proposes that the pump would be tested at two stages. This proposed approach would maintain consistency with DOE's current test procedure requiring that multi-stage pumps be tested with more than one stage.
In the current DOE test procedure, BEP flow rate is determined as the flow rate at which maximum pump efficiency is achieved on the pump efficiency curve, as determined in accordance with Section 40.6.6.3 of HI 40.6-2014. Appendix A, Sections III.D.2, IV.D.2, V.D.2, VI.D.2, and VII.D.2. Section 40.6.6.3 of HI 40.6-2014 provides instruction for determining the best fit curve for pump flow rate versus efficiency. Specifically, the best fit curve may be either (1) up to a 6th order polynomial, or (2) a spline function with a single slow reversal in the region of the BEP rate of flow. HI 40.6.6.3.
In response to the April 2021 RFI, Summit recommended better defining
DOE tentatively concludes that the provisions in Section 40.6.6.3 of HI 40.6-2021 are sufficient for defining the best fit curve. When testing a pump, data relating to flow rate and efficiency can be fit using the allowed methods under HI 40.6-2021 in order to find the method with the best fit. DOE notes that, in general, “best fit” refers to a curve that best expresses the relationship between the data, and that can be determined through a least squares method. However, DOE does not fully understand Summit's request regarding the minimum number of data points required per setpoint. The test procedure requires taking a minimum of seven flow points and using a least squares regression to determine a linear relationship between pump power input or driver power input at measured flow points, which is then used to determine pump power input or driver power input at the specified load points.
The current test procedure requires that constant load pump energy rating be determined using 75, 100 and 110 percent of BEP flow with each value multiplied by 0.33 and the results summed to determine PER
HI stated that the actual load profile of a pump in use is application specific and will vary widely for the applications covered by clean water pumps. HI stated that the current load profiles are sufficient for calculation of the PEI. (HI, No. 20 at p. 7) Grundfos supported keeping the existing load profiles and stated that given the large number of applications in which regulated pumps are used, the current profiles are sufficient to evaluate general pump performance. (Grundfos, No. 17 at p. 7) NEEA stated that they had no additional comment beyond their response to the September 2020 Early Assessment RFI, which DOE summarized in the April 2021 RFI. (NEEA, No. 21 at p. 11)
The existing load profiles provide a consistent method for comparing the performance of different pumps, which, as noted by stakeholders, exhibit a range of load profiles across the wide range of installation environments. At this time, DOE does not have any indication that the current load profiles are not appropriately representative. Therefore, DOE is not proposing changes to the current test procedure's load profiles.
To determine a pump's BEP, the DOE test procedure references testing provisions included in HI 40.6-2014 (excluding sections 40.6.5.3, section A.7 and appendix B) at the following seven flow points: 40, 60, 75, 90, 100, 110, and 120 percent of the expected BEP flow rate of the pump at the nominal speed of rotation. Appendix A, section III.D.1. All pumps have a maximum flow rate which is termed “run out.” For pumps where the BEP is expected to be within 20 percent of the maximum flow rate of the pump (BEP at run out), section I.D.4 of appendix A provides alternative flow points, with the maximum flow point equal to 100 percent of the expected maximum flow rate so that the pump may safely operate. As discussed in section III.C.1, Sections 40.6.5.5.1 and 40.6.6.3 of HI 40.6-2021 now include provisions related to pumps with BEP at run-out. Section 40.6.5.5.1 provides alternate test points based on the expected BEP rate of flow for pumps with a maximum allowable flow rate as specified by the manufacturer that is less than 120 percent of the BEP flow rate. Section 40.6.6.3 also provides alternate tested load points for the driver input power as a percentage of BEP flow rate for pumps that cannot be safely tested to flows greater than 120 percent of BEP. However, these provisions are based on flow points with respect to expected BEP flow rate rather than expected maximum flow rate.
In the January 2016 Final Rule, DOE responded to a comment from HI that in order to determine the location of BEP, testing must occur at rates of flow greater than 100 percent of expected BEP flow. 81 FR 4086, 4117. DOE stated that its proposal to use flow points only up to 100 percent was with respect to the expected maximum allowable flow rate rather than with respect to expected BEP.
In addition, upon review and in response to previous stakeholder questions, DOE has tentatively determined that the current regulatory text would benefit from additional detail as to how the revised loading points should be applied in the determination of PER
DOE has also identified that the current provisions for pumps with BEP at run-out do not address how to perform motor sizing for bare pumps, which is based on the horsepower equivalent to, or the next highest horsepower greater than, the pump power input to the bare pump at 120 percent of the BEP flow rate of the tested pump. DOE proposes that for pumps with BEP at run-out, motor sizing would be based on 100 percent of the BEP flow rate of the tested pump, as there are no flow rates available higher than that level. However, DOE acknowledges that this proposed change could result in inequitable motor sizing as compared to pumps not subject to these provisions.
HI 40.6-2014 Appendix D, which the current DOE test procedure adopts, specifies the frequency of measurement equipment calibration. Table D.1 of HI 40.6-2014 provides that manufacturer's recommendations on calibration intervals should be followed if they differ from those in Table D.1. However, DOE notes that its test procedure does not explicitly reference Table D.1 of HI 40.6-2021.
In the dedicated-purpose pool pump test procedures included in appendix B and appendix C to 10 part 431 subpart Y (“appendix B”, “appendix C”), DOE has, for clarity, included the calibration requirements contained in Appendix D of ANSI/HI 40.6-2014, with modification allowing for calibration periods up to 3 times longer than those specified in Table D.1 of ANSI/HI 40.6-2014 if justified by historical calibration data.
Similar to the approach DOE has followed with appendices B and C, DOE proposes to specifically reference the calibration requirements in Appendix D of HI 40.6-2021 in section I.B of appendix A to improve the overall clarity of its test procedure.
The DOE test procedure includes provisions for calculations and rounding in section I.D.3 of appendix A. Generally, all measured data must be normalized such that it represents performance at nominal speed of rotation in accordance with HI 40.6-2014, and all calculations must be carried out using raw measured values without rounding.
HI stated that rounding is not a concern for parameters other than PER and PEI and that DOE does not need to specify rounding requirements for these parameters. (HI, No. 20 at p. 7) Grundfos commented that additional rounding requirements might result in unnecessary data manipulation and would increase manufacturer burden for data reporting. (Grundfos, No. 17 at p. 7)
With respect to the current rounding provisions for PER and PEI, Summit recommended rounding PER to 3 decimal places and rounding PEI to two decimal places. (Summit, No. 16 at p. 5). Summit also stated that the number of significant figures is dependent on measurement devices and measurement uncertainty.
In response to Summit's suggestion for PER, DOE notes that three decimal places represent three significant figures for values less than 1. DOE has not identified any reason why three decimal places would be necessary for values greater than one and has tentatively determined that three significant figures is sufficient. DOE also notes that Summit's recommendation for two decimal places for PEI is consistent with the current test procedure's instruction to round to the hundredths place. For these reasons, DOE is not proposing any changes to its current rounding requirements, except for updates to reference the appropriate section of HI 40.6-2021, as discussed in section III.C.1 of this document.
In response to the April 2021 RFI, NEEA recommended that DOE add a credit for self-sensing “smart” pumps with continuous controls. NEEA stated that “smart” pump technologies use self-sensing technologies to measure power draw and speed to calculate load and then adjust speed to maximize performance and reduce energy consumption required to meet the load, and that the drive is programmed with the specific pump curve with which it is installed. NEEA stated that these features potentially reduce energy consumption by optimizing pump performance compared to traditional control strategies. NEEA commented that the potential performance improvements of such technology is not reflected in the test procedure. NEEA recommended that DOE investigate the potential for energy savings from such controls and develop minimally burdensome ways to incorporate them in the test procedure, such as the Controls Verification Procedure for Variable Refrigerant Flow (“VRF”) Systems or credit for occupancy systems given to certain beverage vending machines (“BVM”). (NEEA, No. 21 at p. 12)
According to DOE research, at this time the technology referenced by NEEA is proprietary, and DOE is unable to conduct sufficient testing on available proprietary technologies in applications to determine achievable energy savings. Furthermore, NEEA has not presented data demonstrating the viability of the asserted potential energy savings. For these reasons, DOE is not proposing a test procedure accommodation for pumps that incorporate self-sensing technologies at this time.
The DOE test procedure for pumps includes calculation-based and testing-based options that apply based on pump configuration (including style of motor and control) as distributed in commerce.
In order to further assess opportunity for reducing burden, DOE requested additional information on how manufacturers are implementing Table 1 of appendix A. Specifically, DOE sought comment on the extent to which pumps sold with multiple motor and control configurations are evaluated multiple times using physical testing-based methods (rather than a calculation-based approach); the extent to which pumps sold with single-phase motors are being rated as bare pumps (using a calculation-based approach); and the extent to which pumps sold with motors (other than inverter-only motors) are having their efficiency being evaluated using a calculation-based approach as opposed to a testing-based approach. 86 FR 20075, 20082. DOE also requested comment on whether any revisions to Table 1 of appendix A could be considered to maintain or improve the information derived from the test procedure while reducing burden with no impact on the PEI rating for currently regulated pumps.
HI stated that testing burdens typically cause manufacturers to calculate losses based on the standard motor efficiency and that approximately 1 percent of pumps are wire-to-water tested according to section IV of the test procedure. HI stated that no products were reported with wire-to-water testing on induction motors with controls per section VI of the test procedure. (HI, No. 20 at p. 5) HI stated that a majority of pumps with single-phase motors use the
NEEA encouraged DOE to ensure the information derived from the test procedure is maintained when considering possible changes to Table 1 to reduce burden. Specifically, NEEA recommended against DOE removing options for wire-to-water testing as a way to reduce burden and asserted that wire-to-water testing may result in more accurate ratings. NEEA also recommended that DOE not require wire-to-water testing but keep the option to use calculation-based or wire-to-water testing approaches. (NEEA, No. 21 at p. 10-11)
HI recommended amending Table I to allow use of section IV for pumps + single-phase induction motor and to require section VI for pumps + single-phase induction motor + continuous or non-continuous controls. (HI, No. 20 at pp. 5-6). HI also recommended amending Table 1 to require section IV for pump + motor + controls other than continuous or non-continuous controls (
DOE has reviewed the ways in which manufacturers are utilizing the various options in Table 1 as well as the recommended edits to Table 1. In response to NEEA, DOE is not proposing to remove wire-to-water testing options from Table 1. In response to HI and Grundfos, DOE agrees that Table 1 would benefit from providing more explicit instruction, particularly by moving information out of footnotes and into the table itself. However, DOE does not agree with the specific changes requested. Specifically, commenters provided no reason that a “pump + motor + controls,” other than continuous or non-continuous controls, must use a test method rather than a calculation method, or why single-phase products using a VFD must use a test method rather than the bare pump calculation method. Neither of these constraints are currently included in appendix A Table 1. DOE maintains that the existing allowances to use a calculation method for these products are appropriate and consistent with stakeholders' general desire to use calculation methods where possible. In particular, controls other than continuous or non-continuous controls—such as ON/OFF switches—would not be expected to impact the results of the test method. As such, the calculation method should adequately represent performance. Similarly, the current procedure permits single-phase equipment to be tested using the bare pump method, which eliminates the possibility of penalizing this equipment for using these less efficient motors compared to pumps sold with polyphase motors. While manufacturers could choose to use a testing-based approach when evaluating pumps sold with single-phase induction motors that use continuous or non-continuous controls in order to get a better rating than a bare pump rating, this is not necessary. For these reasons, DOE is not proposing to remove the calculation-based option, but is proposing to clarify Table 1 by moving information out of footnotes and into the table itself.
NEEA encouraged DOE to consider developing a calculation-based testing approach that would apply to any new or future pump configurations not covered by the current Table 1. NEEA recommended that DOE consider a hybrid approach to testing and calculation, similar to the test method included in Appendix H of ANSI/AMCA Standard 214-21, “Test Procedure for Calculating Fan Energy Index (FEI) for Commercial and Industrial Fans and Blowers” (“AMCA 214”), which stipulates a one-time test of the motor at multiple load points, which can be used to determine the input power at the appropriate pump test procedure load points and then used to calculate a rating. With this method, each motor need only be tested once, and the results used for multiple pump configurations. (NEEA, No. 21 at p. 10)
The hybrid method as suggested by NEEA would require use of a test procedure that may be dependent on the type of motor. As such, DOE would be unable to implement such a method for unknown future pump configurations without specifying all possible test methods that might be appropriate for various motor types. Accordingly, DOE is declining to adopt this suggested approach. DOE addresses a similar request related to a specific motor type in section III.F.3 of this document.
In relation to Table 1, Grundfos asked DOE to clarify how manufacturers are expected to report pumps using single-phase motors. Grundfos commented that these are sold as a pump + motor but reported using section III data, and that it was unclear whether they should be reported as a bare pump. (Grundfos, No. 17 at p. 5)
Under the current scope, actual pump configuration should be certified for pumps sold with single-phase motors. These pumps should not be certified as a bare pump.
In the April 2021 RFI, DOE noted that while its test procedure for pumps incorporates by reference HI 40.6-2014, it also includes additional provisions related to measuring the hydraulic power, shaft power, and electric input power of pumps, inclusive of electric motors and any continuous or non-continuous controls. 86 FR 20075, 20081. DOE also noted the publication of the International Electrotechnical Commission (“IEC”) standard IEC 61800-9-2:2017 “Adjustable speed electrical power drive systems—Part 9-2: Ecodesign for power drive systems, motor starters, power electronics and their driven applications—Energy efficiency indicators for power drive systems and motor starters,” (“IEC 61800-9-2:2017”), which addresses test methods and reference losses for power drive systems, comparable to the approach in section VII of appendix A.
DOE also noted the publication of the American Movement and Control Association (“AMCA”) standard, AMCA 207-17 “Fan System Efficiency and Fan System Input Power Calculation” (“AMCA 207-17”) in the April 2021 RFI and requested comment on the applicability of the VFD/motor efficiencies in AMCA 207-17 to pumps, and whether DOE should consider replacing the calculations in section VII of appendix A with those in AMCA 207-17. 86 FR 20075, 20081. DOE additionally requested comment on whether adoption of the AMCA 207-17 approach would be representative for pumps, and whether such a change would impact PEI ratings, manufacturer testing burden, or manufacturer pump designs.
As stated previously, the DOE test procedure for pumps includes calculation-based and testing-based options that apply based on pump configuration (including style of motor and control) as distributed in commerce.
HI stated that the current calculation methodology should remain consistent, but that HI would provide recommendations for updates to coefficients that would not increase testing burden on pump manufacturers. (HI, No. 20 at p. 4) HI additionally commented that ISO/ASME 14414 is a pump system assessment standard and is not applicable to individual bare pumps or pumps sold with motors and/or controls. (HI, No. 20 at p. 5) Grundfos stated that there is no need to modify or replace the Section VII calculation method. Grundfos supported the HI recommendation to use updated coefficients in section VII for induction equipment. (Grundfos, No. 17 at p. 4)
NEEA recommended that DOE continue using the current motor loss calculation approach, including the motor and drive loss equation and required test points for pump manufacturers. NEEA stated that the AMCA 207-17 approach would result in an average 3 to 6 percent reduction in calculated motor and drive losses, and also PEI
The CA IOUs stated that cost of wire-to-water testing can result in the use of the calculation method for some efficient products, even though the calculated PEI would be reduced via this method, creating a market distortion in which efficient products are scored with PEIs worse than would be representative. The CA IOUs commented that this highlights the need for a calculation method to be as representative as possible, while requiring some conservativeness in the calculation methodology to prevent scores higher than wire-to-water testing of conventional products. The CA IOUs stated that the actual motor drive system performance is approximately 3 to 14 percent better in practice than estimated with the current methodology and encouraged DOE to make adjustments to the calculation method to improve the representativeness and align across industries. (CA IOUs, No. 19 at p. 2)
The CA IOUs expressed support for the use of AMCA 207-17, stating that it was designed for predictions based solely on variable-torque curves, which apply to pumps, that it provides accurate and somewhat conservative default losses, and that it has been directly or indirectly adopted by various industry consensus standards. The CA IOUs stated that the adoption of the AMCA 207-17 method would result in manufacturers reporting lower PEIs without actually improving the efficiency of the pump, but that they believe it is more important that DOE adopt a loss calculation method that is representative and can be used across all product lines that employ VFD power drive systems. The CA IOUs included a figure comparing the percent PER improvement with AMCA 207 losses compared to DOE losses, with PER improvements ranging between 6 and 14 percent. (CA IOUs, No. 19 at pp. 2-4)
The CA IOUs also commented that industry stakeholders highlighted IEC 61800-9-2 as a potential framework that could apply motor VFD losses in an industry and product independent manner, and stated that they provided a spreadsheet comparing this method, the AMCA 207 method, and the existing DOE methods.
In a subsequent submission, HI stated that the current coefficients for induction motors provide incremental losses well below the values in IEC 60034-31, and that the percent of incremental losses were up to 4 times more than what IEC provides (primarily above 50 hp). HI stated that it developed recommended coefficients using the delta between the IEC and current motor incremental losses, and that the
HI also provided a table showing the delta PEI as a function of horsepower with the proposed induction motor loss coefficients as well as a limited data set of Section VI wire-to-water testing results compared to the proposed Section VII induction motor loss calculations. For three tested pumps, the calculation method was equivalent to or more conservative than the wire-to-water test results. (HI, No. 22 at p. 4)
Since ISO/ASME 14414 is a pump system assessment standard and is not applicable to individual bare pumps or pumps sold with motors and/or controls, DOE has tentatively determined that this industry standard is not relevant to the DOE test procedure for pumps. DOE has reviewed the industry standards mentioned by NEEA, the CA IOUs, and HI, including AMCA 207-17, IEC 61800-9-2:2017, IEC 60034-2-3:2020 and IEC 60034-31:2021 (“Rotating Electrical Machines—Part 31: Selection of Energy-Efficient Motors Including Variable Speed Applications—Application Guidelines”). IEC 60034-2-3 is a method of test and does not provide information related to motor and control part-load losses, and as such DOE did not evaluate this method further. AMCA 207-17 is specific to fans and includes a more complicated model with more than three coefficients, resulting in efficiency rather than losses. IEC 60034-31:2021 is a technical specification document that gives technical and economical guidelines for the use of energy-efficient motors in constant speed and variable-speed operations in different applications. Annex A (informative) to this standard further provides typical efficiency values and losses of motors and controls. IEC 61800-9-2:2017 is an international standard and provides test methods and efficiency classification provisions for controls and for motors and controls. Annex A (normative) to this standard further provides losses for reference motors and controls used to develop the efficiency classifications.
DOE has also reviewed the coefficients provided by HI, which HI stated were designed to provide incremental motor losses similar to the values in IEC 60034-31 when comparing an induction motor operated without controls and with controls. (HI, No. 22 at p. 3) Based on a subsequent submission, DOE understands that the intent of HI's recommended coefficients is to better match the full-load losses that would result from starting with motor-only full-load losses and adding incremental harmonic losses of 15 percent for motors up to 90 kW and adding incremental harmonic losses of 25 percent for motors over 90 kW, as specified in section A.3 of IEC 60034-31, as well as adding an assumed VFD efficiency penalty
Figures III-1 through III-3
DOE notes that on February 28, 2022, the National Electric Manufacturers Association (“NEMA”) released NEMA MG 1011-2022, “Power Index Calculation Procedure—Standard Rating Methodology for Power Drive Systems and Complete Drive Modules.” While this NEMA methodology does not addresses the default losses that are core to DOE's pumps test procedure method, and, accordingly, would not be considered within the context of the current rulemaking at hand, data based on MG 1011-2022's methodology could prove useful in supplementing already-collected data regarding part-load losses. To the extent that information and data using MG 1011-2022 are available, DOE invites interested parties to provide feedback and comment regarding their respective experience with this NEMA testing standard.
DOE's current test procedure provides a calculation method for pumps sold with motors and controls in order to reduce testing burden compared to wire-to-water testing. However, DOE did not intend for the calculation method to be used for overrating pumps. None of the commenters provided justification for their statements that actual motor drive system performance is better than that assumed by the DOE coefficients. At 1 hp, the DOE model seems to appropriately capture motor drive system performance of the systems represented by the AHRI 1210 data (
DOE notes that the motor load points do not necessarily correspond to the pump test points in appendix A; if motors were sized such that 100 percent BEP flow represented 100 percent motor load, the points would be relatively close. However, the current test procedure for bare pumps assumes that motor sizing is based on 120 percent BEP flow, which DOE understands to be more representative of typical use. Furthermore, a recent DOE motor study shows that only three percent of commercial sector motor system electricity consumption and six percent of industrial motor system electricity consumption operate below 40 percent load factor.
DOE notes that AMCA 207 is specific to fans. IEC 60034-31 is based on “typical” values, which would be expected to overstate the performance of at least some motor drive systems. Section 7.7 of that testing standard states that Annex A may not be a good approximation of loads less than 50 percent, which DOE notes may be a significant portion of loads based on the pumps test procedure. Finally, HI's proposed induction coefficients are based on typical harmonic losses and typical VFD efficiency penalties. DOE believes that, at a minimum, the VFD efficiency penalty may be understated and it is also not clear if the typical harmonic losses associated with IE3
Based on its review of available coefficients and part-load loss data, DOE has tentatively determined that without further data indicating that its current coefficients overstate motor drive system losses for pumps, it will retain its current loss model for motors less than 50 hp. DOE's current coefficients correspond to about 30 percent added harmonic losses and a 3 percent VFD efficiency penalty. DOE would consider revising its coefficients below 50 hp in accordance with the method suggested by HI, or to harmonize with fans (AMCA 207) or with international standards (IEC 60034-31 or IEC 61800-9-2), given appropriate data specific to pumps. To ensure that the calculation method does not overrate pumps while balancing stakeholders' requests for representativeness, DOE is proposing to allow use of an AEDM, as discussed in section III.I.2 of this document.
Given HI's statement that losses are especially overstated in the 50 hp to 100 hp range, DOE has reviewed its existing coefficients and found that they result in a dip in full-load efficiency at 75 hp, which would not be expected. In addition, the AHRI 1210-certified data is limited to a maximum of 75 hp and does not exist at higher hp. Furthermore, DOE's current coefficients in the 50 hp to 100 hp range correspond to about 60 percent added harmonic losses and a 3 percent VFD penalty, and, based on previous discussion of typical losses, DOE has tentatively determined that these losses are too high.
In light of this situation, DOE proposes to update its coefficients for motors rated at 50 hp and above. DOE has determined that HI's approach is relatively reasonable, although the 2 percent VFD penalty may be too low. To adjust its coefficients for motors 50 hp and above, DOE started with the current DOE default losses for the motor-only at full-load and added 15 to 25 percent losses, as applicable, as well as a VFD efficiency penalty of 3 percent. DOE then adjusted the current DOE default losses for the motor and control at 100 percent to match the result of adding the incremental harmonic losses and VFD penalty and applied the same adjustment factor to all load points. Table III.1 includes DOE's proposal for the induction motor and control part-load loss coefficients.
For pumps sold with motors or with motors and continuous or noncontinuous controls that are rated using the calculation-based approach, the nominal full-load motor efficiency used in determining the PER
Inverter-only motors are currently not subject to DOE's electric motor energy conservation standards, and as such, based on Table 1 in appendix A, pumps with inverter-only motors currently require wire-to-water testing. DOE
HI stated that all inverter-only (synchronous) motors should have a calculation method with similar methodology to ST pumps, but with updated full-load motor efficiencies and loss coefficients. (HI, No. 20 at p. 6) Grundfos supported the creation of a calculation method for inverter-only
NEEA commented that inverter-only motors are increasing in popularity because many inverter-only motors are represented as having higher efficiencies than induction motors, especially at reduced speeds, and that the variable-speed capabilities make them a compelling choice in variable load pumping applications. (NEEA, No. 21 at p. 8) NEEA also stated that while ECM motors are particularly common, there is no technical limitation to other inverter-only motor types such as permanent magnet and synchronous reluctance motors being used in clean water applications. (NEEA, No. 21 at p. 8)
NEEA stated that while they supported wire-to-water testing as the most accurate way to rate a pump and motor (and drive), the calculation method of test is a conservative but economical option, and the inability to rely on the calculation method may discourage manufacturers from selling or developing these more efficient pump systems. Therefore, NEEA recommended that DOE include a calculation test method for inverter-only motors. NEEA stated that motor efficiencies consistent with an IE4 efficiency level would be appropriate for pumps. (NEEA, No. 21 at p. 8-9)
The CA IOUs supported calculation approaches for inverter-only motor drive systems, provided that the calculation methodology can reliably generate representative, but slightly conservative motor drive system losses, in order to minimize potential market distortion. (CA IOUs, No. 19 at p. 7) Additionally, the CA IOUs commented that, unlike submersible motors, inverter-only motors are found in numerous industries, sectors, and applications, so the motor losses table must be aligned with other DOE and industry treatments of these motors. (CA IOUs, No. 19 at p. 8) The CA IOUs stated that ECM performance between products and manufacturers is likely similar enough to performance variance typical of conventional induction motors that a loss table could be developed with manufacturer-submitted data. The CA IOUs commented that typical ECM motors will be using surface permanent magnet architectures, while permanent magnet power drive systems will use internal permanent magnet architectures, and that while these differences may eventually result in diverging performance, at the moment a single losses table may be sufficient. The CA IOUs recommended that DOE verify this single losses table assumption. (CA IOUs, No. 19 at p. 8)
The CA IOUs recommended developing a conventional-efficiency branch and a high-efficiency branch of a calculation method, for example by referring to IEC 60034-30-2 and assigning conventional product losses to products with an IE4 motor-drive system rating and efficient product losses to products with an IE5 motor drive system rating. (CA IOUs, No. 19 at p. 8) For permanent magnet inverter-only motors with a non-integrated controller sold with a choice of controller, the CA IOUs cautioned against the use of a losses table due to variance in performance between drive units (as opposed to induction motors, which are relatively uninfluenced by choice of drive unit) and instead recommended this subset use a hybrid power drive system mapping procedure. The CA IOUs stated that this does not apply to ECM products that typically have the drive embedded. (CA IOUs, No. 19 at pp. 8-9) Ultimately, the CA IOUs recommended that DOE consider a hybrid testing approach similar to that detailed in appendix F of AMCA 214, in which a motor drive system is mapped at several test points, with interpolation allowed between test points, which could be applied to any pumps that would be connected to that power drive system. The CA IOUs estimated that this approach would reduce test time compared to a wire-to-water pump test. The CA IOUs suggested that manufacturers could choose to use the calculation method or the hybrid mapping test method. (CA IOUs, No. 19 at pp. 9-10)
In a subsequent submittal responding to the April 2021 RFI, HI stated that it developed coefficients and calculation modifications for inverter-only motors by establishing the incremental loss delta between power drive systems operating with induction motors and power drive systems operating with inverter-only motors.
After reviewing the comments, DOE understands stakeholder references to “inverter-only motors” to mean inverter-only electric motors that are synchronous electric motors. DOE's current definition of “inverter-only motor” at 10 CFR 431.12 also includes AC induction motors.
In the December 17, 2021, Electric Motors TP NOPR (“Motors TP NOPR”), DOE describes a “synchronous electric motor” as an electric motor in which the average speed of the normal operation is exactly proportional to the frequency of power supply to which it is connected, regardless of load. 86 FR 71710, 71726. DOE proposed to include within the scope of its electric motors test procedure synchronous electric motors with specific characteristics, inclusive of synchronous electric motors that are inverter-only electric motors. 86 FR 71710, 71727.
As stated, only pumps sold with motors subject to DOE's electric motor test procedure and energy conservation standards can be used to conduct the calculation-based approach. The current electric motors test procedures and standards apply only to induction electric motors, and the “induction motor” criteria exclude synchronous electric motors from scope. 10 CFR 431.25(g)(1). In this NOPR, DOE proposes that, to the extent that DOE adopts a definition, test procedure, and energy conservation standard for synchronous electric motors that are inverter-only electric motors, DOE would reference such regulations in the pumps test procedure, allowing for the use of the calculation method by pumps sold with synchronous electric motors that are inverter-only electric motors.
In the Motors TP NOPR, DOE proposed to test inverter-only synchronous electric motors (inclusive of the inverter) that include an inverter in accordance with Section 7.7.2 of IEC 61800-9-2:2017, using the test provisions specified in section 7.7.3.5 and testing conditions specified in section 7.10. 86 FR 71710, 71742. DOE proposed to test inverter-only synchronous electric motors that do not include an inverter in the same manner and to specify that testing must be performed using an inverter as recommended in the manufacturer's catalogs or offered for sale with the electric motor.
As proposed in the Motors TP NOPR, manufacturers of synchronous electric motors would not be required to test according to the DOE test procedure, if finalized, until the compliance date of energy conservation standards. 86 FR 71710, 71716. Accordingly, should DOE finalize a test procedure for these motors, there may be a period of time in which motor manufacturers would not be required to publish efficiency information for these motors. However, since the proposed electric motors test procedure is an IEC test procedure, if DOE's proposal is finalized, the tested efficiency of the synchronous inverter-only electric motors + inverters would likely already be available.
With respect to HI's proposal to use IE3 efficiency to calculate PER
With respect to part-load losses, while DOE does not have data to evaluate the model quantitatively, DOE has plotted HI's suggested model and preliminarily finds the resulting trends in losses to be reasonable in relation to the expected loss differences between induction and synchronous electric motors. Specifically, the suggested model shows inverter-only motors to be more efficient at part-load when compared to DOE's loss model for induction motors. Further, HI's suggested model shows higher efficiency at full-load compared to DOE's loss model for induction motors—an expected outcome given that induction motor efficiency is set at a NEMA Premium level, whereas inverter-only efficiency is Super Premium.
DOE notes that the HI-provided comparison of wire-to-water test data with results from the calculation method using the recommended coefficients did result in one case in which the calculation method would result in a slightly lower PEI rating than the test method. In addition, HI's proposed coefficients were based on a delta between induction motors and inverter-only motors, and DOE is not proposing to adopt HI's proposed induction motor coefficients. Finally, HI's coefficients were developed to be applicable to motor-only efficiency, while DOE's proposed test procedure for inverter-only motors results in efficiency for the motor + inverter combined. Therefore, DOE proposes to make slight modifications to the inverter-only coefficients proposed by HI. Specifically, DOE started with the revised proposed DOE induction motor and control coefficients, then applied the deltas provided by HI (the difference in efficiency points between a synchronous motor + control versus induction motor + control at different load points and different hp ranges),
In response to the suggestion by the CA IOUs that DOE investigate whether a single table of part-load loss factors would be suitable for both ECM and permanent magnet motors, as well as for both conventional-efficiency and high-efficiency motors, DOE has no efficiency data for ECM and permanent magnet motors with which to perform such an analysis at this time. DOE acknowledges that permanent magnet inverter-only motors sold without a controller may perform differently based on the inverter with which it is paired. However, DOE does not expect that the use of a hybrid mapping approach would provide the burden reduction intended by the use of the calculation method. While the hybrid mapping approach would be less burdensome than multiple wire-to-water tests, it would likely be significantly more burdensome than a calculation-based approach based on a bare pump test, as it would require physical tests of all motors with which the bare pump would be paired. Furthermore, DOE tentatively concludes that the calculation-based approach is sufficient to generate appropriately representative values for this equipment—and with the option to allow for a testing-based approach, or an AEDM as discussed in section III.I.2, a manufacturer is free to refine accuracy of the values for specific equipment.
In the April 2021 RFI, DOE requested information on the percentage of pumps sold with inverter-only motors without controls (and thus would be impacted by a change in rating from PEI
HI stated that pumps sold with inverter-only motors without controls constitute a small percentage of the market, but that such pumps should be labeled with a PEI
DOE agrees with the positions presented by commenters and proposes that to the extent that the calculation-based method would be applicable to pumps sold with synchronous electric motors that are inverter-only electric motors, such provision would apply to pumps sold with inverter-only synchronous electric motors both with and without controls. DOE also proposes that pumps sold with inverter-only motors with or without controls would apply the testing-based approach in section VI of appendix A (for pumps sold with motors and controls) rather than in section IV of appendix A (for pumps sold with motors), given that section VI results in PEI
For pumps sold with submersible motors, the calculation of PER
DOE proposes that for the calculation-based approaches for submersible pumps sold with motors (with or without controls), for determination of PER
DOE also proposes that when determining PER
As discussed, DOE is proposing to expand the scope of the test procedure to include SVIL pumps. DOE reviewed the general pumps test procedure in appendix A to determine if any modifications were necessary to accommodate SVIL pumps. The current general pumps test procedure established in appendix A is based on the test methods contained in HI 40.6-2014, with certain modifications. As discussed in section III.C.1, DOE is proposing to update this reference to HI 40.6-2021, which DOE has tentatively determined also applies to SVIL pumps.
As discussed in section III.F, the general pumps test procedure also contains methods to determine the appropriate PEI using either calculation-based methods or testing-based methods. DOE has tentatively determined that these calculation- and testing-based methods are applicable to SVIL pumps just as they are applicable to IL pumps, based on the configuration in which the pump is being sold. Since SVIL pumps are sold as pumps with motors or pumps with motors and controls, the test methods established in the January 2016 Final Rule would apply to SVIL pumps. Additionally, the determination of pump performance in the general pumps test procedure, and as proposed to be updated in this proposed rule, would be appropriate for SVIL pumps.
The primary differences between SVIL and IL pumps affecting the application of DOE's general pumps test procedure are the size and certain characteristics of the motor with which the SVIL pumps are rated. Specifically, the general pumps test procedure establishes that the testing-based methods apply to all pump configurations, while the calculation-based methods apply only to (1) pumps sold without a motor or controls (
1. Are single-speed, induction motors;
2. Are rated for continuous duty (MG 1) operation or for duty type S1 (IEC);
3. Contain a squirrel-cage (MG 1) or cage (IEC) rotor;
4. Operate on polyphase alternating current 60-hertz sinusoidal line power;
5. Are rated 600 volts or less;
6. Have a 2-, 4-, 6-, or 8-pole configuration,
7. Are built in a three-digit or four-digit NEMA frame size (or IEC metric equivalent), including those designs between two consecutive NEMA frame sizes (or IEC metric equivalent), or an enclosed 56 NEMA frame size (or IEC metric equivalent),
8. Produce at least 1 hp (0.746 kW) but not greater than 500 hp (373 kW), and
9. Meet all of the performance requirements of one of the following motor types: A NEMA Design A, B, or C motor or an IEC Design N or H motor.
DOE notes that SVIL pumps, which this NOPR proposes to define as pumps having shaft input power less than 1 hp, may be paired with motors that are less than 1 hp and, as such, are not subject to DOE's electric motor regulations specified at 10 CFR 431.25. However, some motors with less than 1 hp are subject to DOE's small electric motor regulations specified at 10 CFR 431.446.
The current general pumps test procedure established in the January 2016 Final Rule allows pumps sold with single-phase motors to apply the test procedure for bare pumps. 10 CFR 431.464 and appendix A. DOE specified this approach because the nominal full-load motor efficiency values and part-load motor loss curves developed in the January 2016 Final Rule that describe the minimally-compliant pump (
In the May 2021 Circulator Pumps RFI, DOE requested comment on the recommendation to test SVIL pumps with the test methods from the general pumps test procedure in conjunction with additional provisions to account for the differences in size and characteristics of SVIL pump motors. In particular, DOE requested comment on the potential extension of the nominal full-load motor efficiency values to reference DOE's small electric motor regulations, including certain single-phase motors, and the need for an exception for SVIL pumps so that those sold with single-phase motors do not have to be rated as bare pumps. DOE also requested comment on the prevalence of SVIL pumps sold with single-phase versus three-phase motors, and the prevalence of SVIL pumps sold with motors not covered by DOE's small electric motors and electric motors energy conservation standards for either single- or three-phase motors. 86 FR 24516, 24527.
HI stated that the small motor regulation does not cover the full scope of motors (
Grundfos stated that the test method for general pumps is appropriate for SVIL pumps, but that SVIL pumps would require a new pump category and should be limited to variable load products only. Grundfos stated that incorporating the small [electric] motor rule is appropriate to facilitate calculations in section VII of appendix A but commented that this regulation does not cover TEFC products and that DOE must ensure TEFC motors can utilize the same calculation methods. (Grundfos, Docket No. EERE-2016-BT-STD-0004-0113 at p. 5) Grundfos stated that 70% of its SVIL pumps are sold as single-phase (in both constant- and variable-speed equipment) and 30% are sold with 3-phase motors. They added that nearly all SVIL pumps are sold with TEFC motors that are not covered by DOE's small [electric] motor regulation. (Grundfos, Docket No. EERE-2016-BT-STD-0004-0113 at p. 5) Grundfos suggested that SVILs may be removed from the market and replaced by equivalent circulator products but was not explicit as to reason for such a change. (Grundfos, Docket No. EERE-2016-BT-STD-0004-0113 at p. 5)
DOE motor regulations at 10 CFR 431.446 exclude TEFC and certain other motors considered non-general purpose motors. However, in the Motors TP NOPR, DOE proposed adding such motors to the scope of electric motors coverage under the term small non-small electric motor electric motors (“SNEMs”). Specifically, DOE has proposed to define SNEMs as agnostic to enclosure and topology, affirmatively stating that the proposed test procedure would apply to general-purpose, definite-purpose, and special-purpose motors. As proposed, SNEMs would include fractional horsepower motors as low as 0.25 hp. 86 FR 71710, 71721-71725. The Motors TP NOPR also proposed testing instructions specific to these motors. 86 FR 71710, 71739. DOE notes that it has not established energy conservation standards for SNEMs. Were DOE to establish a test procedure for SNEMs, such motors would not be required to test according to the DOE test procedure until such time as compliance with any energy conservation standards be required, should such standards be established. Under DOE's Motors TP NOPR, any definitions, test procedures, and standards finalized for SNEMs would be in found in subpart B of part 431.
DOE expects that the proposed definition and test procedure for SNEMs, as well as the proposed test procedure for inverter-only synchronous electric motors, as discussed in section III.F.2, would encompass the additional types of motors discussed by HI and Grundfos that are not currently covered by the standards at 10 CFR 431.446. Therefore, DOE proposes that where the calculation-based test methods refer to the “represented nominal full-load motor efficiency (
DOE is also proposing that for SVIL pumps, the determination of PER
DOE's market research indicates that the vast majority of SVILs are sold with motors with a nominal horsepower of 0.25 hp or greater. However, DOE has identified some models with horsepower closer to 0.125 hp. Such motors are not subject to the standards in 10 CFR 431.446 and are not proposed to be subject to any test procedure in the Motors TP NOPR. DOE proposes that for determination of PER
DOE expects that the existing regulations for small electric motors at 10 CFR 431.446, as well as any finalized regulations for SNEMs and inverter-only synchronous electric motors, would account for the vast majority of motors sold with SVIL pumps. However, DOE proposes that any SVIL pumps that are distributed in commerce with motors that are not regulated by DOE's electric motor regulations at 10 CFR 431.25, DOE's small electric motor regulations at 10 CFR 431.466, or any electric motor regulations in subpart B to part 431 established after January 1, 2022, as applicable, would need to apply the testing-based methods currently specified in sections IV and VI of appendix A and as proposed to be modified in this proposed rule. Given that DOE is proposing for PER
If regulations for SNEMs and inverter-only synchronous electric motors are not set, DOE may consider allowing an option for SVIL pumps sold with single-phase motors to be rated as bare pumps. In this case, DOE would reference the efficiency values in 10 CFR 431.446 to determine bare pump performance.
As stated in section III.F.1, the general pumps test procedure includes calculation-based methods that specify part-load loss curves for pumps sold with motors, accounting for the part-load losses of the motor at each load point, as well as part-load loss curves for pumps sold with motors and continuous controls, which account for additional losses.
Both the motor and combined motor and drive loss curves were developed for the general pumps test procedure based on data from NEMA and from manufacturers of motors and drives, as well as data from DOE's own testing, for motors and drives from 1 to 250 hp gathered during the general pumps test procedure rulemaking. Since these losses were based on data for motors and drives from 1 to 250 hp, the nominal motor losses derived for the general pumps test procedure may not be appropriate for SVIL pumps, given the lower hp ratings of the motors used in these applications. In the May 2021 Circulator Pumps RFI, DOE requested comment on whether the equations used to establish the part-load motor and drive losses in the general pumps test procedure are appropriate for SVIL pumps under one hp—and if inappropriate, DOE requested data supporting the generation of alternative loss curves. 86 FR 24516, 24527.
HI stated that current loss coefficients would not be valid for smaller motors and that DOE should investigate since this data is not available in the public domain. As noted previously, HI added that many of these are custom special purpose motors specific to each manufacturer and may not be covered under the current motor efficiency regulations. (HI, Docket No. EERE-2016-BT-STD-0004-0112 at p. 6) Grundfos stated that it did not believe that current part-load loss calculations apply to fractional horsepower motors and that DOE must engage with motor manufacturers and NEMA to determine appropriate part-load loss calculations. (Grundfos, Docket No. EERE-2016-BT-STD-0004-0013 at p. 5)
DOE understands that part-load loss curves (
DOE reviewed the general pumps test procedure in appendix A, including the amendments proposed in this NOPR, to determine if any modifications were necessary to accommodate BB, RSH, and VT pumps, as well as pumps designed to operate with 6-pole induction motors and pumps designed to operate with non-induction motors with an operating range that includes speeds of rotation between 960 rpm and 1,440 rpm (“pumps tested with a nominal speed of 1,200 rpm”). Specifically, the general pumps test procedure established in appendix A is based on the test methods contained in HI 40.6-2014, with certain modifications. As discussed in section III.C.1, DOE is proposing to update this reference to HI 40.6-2021, which DOE has tentatively determined is also applicable to BB, RSH, and VT pumps, as well as to pumps tested with a nominal speed of 1,200 rpm.
As discussed in section III.F, the general pumps test procedure also contains methods to determine the appropriate PEI using either calculation-based methods and/or testing-based methods. DOE tentatively determined that these calculation- and testing-based methods are applicable to BB, RSH, and VT pumps, as well as pumps tested with a nominal speed of 1,200 rpm just as they apply to other general pumps, based on the configuration in which the pump is being sold. Since BB, RSH, and VT pumps, as well as pumps tested with a nominal speed of 1,200 rpm are sold as bare pumps, pumps with motors, or pumps with motors and controls, the test methods established in the January 2016 Final Rule would be applicable to BB, RSH, and VT pumps, as well as pumps tested with a nominal speed of 1,200 rpm pumps. Additionally, the determination of pump performance in the current general pumps test procedure, and as proposed to be updated in this document, would be applicable to BB, RSH, and VT pumps, as well as pumps tested with a nominal speed of 1,200 rpm.
DOE understands that the motors paired with BB, RSH, and VT pumps are typically similar to those paired with the existing scope of general pumps. As such, DOE tentatively determined that
For pumps tested at a nominal speed of 1,200 rpm, DOE tentatively determined that the existing test procedure references to 10 CFR 431.25 for the appropriate number of poles, and the part-load loss factors in Table 4, and as proposed in this document, would be appropriate. The current requirements at 10 CFR 431.25 and 10 CFR 431.446 include energy efficiency standards for 6-pole motors. In addition, part-load losses are a relative factor that is agnostic to pole configuration. As a result, DOE is not proposing to revise these references and factors. DOE notes that Table 2, the default efficiency values for submersible pumps, does not currently have values for 6-pole motors. DOE is proposing to expand Table 2 to include such values. The proposed values were developed at the same time as the existing values in Table 2 but were not included in the 2016 test procedure at that time because the original scope did not include pumps tested at a nominal speed of 1,200 rpm. DOE notes that, as discussed in section III.F.3, Table 2 may be replaced with energy conservation standard values for submersible motors, if such standards are developed and adopted.
DOE currently provides sampling plans for all covered equipment that manufacturers must use when certifying their equipment as compliant with the relevant standards and when making written representations of energy consumption and efficiency. (
Under this proposal, for purposes of certification testing, determining whether a basic model complies with the applicable energy conservation standard would be based on testing conducted using the proposed DOE test procedure and sampling plan. The general sampling requirement currently applicable to all covered products and equipment provides that a sample of sufficient size must be randomly selected and tested to ensure compliance and that, unless otherwise specified, a minimum of two units must be tested to certify a basic model as compliant. 10 CFR 429.11 This minimum is implicit in the requirement to calculate a mean—an average—which requires at least two values.
DOE proposes to apply this minimum requirement to the pump categories addressed in this proposed expansion of the test procedure's scope. Manufacturers may need to test a sample of more than two units depending on the variability of their sample, as provided by the statistical sampling plan.
Additionally, DOE's certification requirements state that other performance parameters derived from the test procedure must be reported, but no sampling plan provisions are provided for such other parameters, which include: pump total head in feet at BEP and nominal speed, volume per unit time (
HI and Grundfos recommended that if the sample size is greater than one, the arithmetic mean should be used for reported parameters other than PEI (HI, No. 20 at p.7; Grundfos, No. 17 at p. 7).
Regarding representative values other than PEI and PER, DOE is proposing that if more than one unit is tested for a given sample, represented values (other than PEI and PER) would be determined using the arithmetic mean of the individual units. For example, if three units are tested for a given sample, and pump total head at BEP is measured at 99.1 ft, 96.2 ft, and 97.3 ft, the reported values for head would be the sum of the three values divided by three (
Pursuant to the requirements of 10 CFR 429.70, DOE may permit use of an AEDM in cases where actual testing of regulated equipment may present considerable burdens to a manufacturer
Once developed, an AEDM may be used to certify the performance of untested basic models in lieu of physical testing. However, use of an AEDM for any basic model is always at the option of the manufacturer. One potential advantage of AEDM use is that it may free a manufacturer from the burden of physical testing—but this advantage must be weighed against the potential risk that an AEDM may not perfectly predict performance and could result in a finding that the equipment has an invalid rating and/or that the manufacturer has distributed a noncompliant basic model. The manufacturer, by using an AEDM, bears the responsibility and risk of the validity of the ratings, including cases where the manufacturer receives and relies on performance data for certain components from a component manufacturer.
Given stakeholder requests for the calculation methods to be more representative, and to balance the risk of allowing overrating through calculation methods, DOE proposes to accommodate the application of AEDMs to determine performance ratings for pumps. DOE expects that the use of AEDMs would allow manufacturers to rate equipment that performs better than the assumptions in DOE's calculation method with less burden than if physical testing were required for each basic model. Manufacturers could still choose to use the calculation method where they were satisfied that it resulted in appropriate representations of model performance. DOE proposes regulatory language that is consistent with most other commercial and industrial equipment that have AEDM provisions. The specific details are discussed in sections III.I.2.b through III.I.2.f of this document.
A manufacturer may not use an AEDM to determine the values of metrics unless the following three criteria are met:
(1) The AEDM is derived from a mathematical model that estimates the energy efficiency or energy consumption characteristics of the basic model as measured by the applicable DOE test procedure;
(2) The AEDM is based on engineering or statistical analysis, computer simulation or modeling, or other analytic evaluation of performance data; and
(3) The manufacturer has validated the AEDM, in accordance with the applicable validation requirements for such equipment (discussed in section III.I.2.c of this document).
Validation is the process by which a manufacturer demonstrates that an AEDM meets DOE's requirements for use as a certification tool by physically testing a certain number and style of pump models and comparing the test results to the output of the AEDM. Before using an AEDM, a manufacturer must validate the AEDM's accuracy and reliability as follows:
A manufacturer must select a minimum number of basic models from each validation class to which the AEDM applies.
DOE is proposing to include general pumps validation classes at 10 CFR 429.70(i) and to require that two basic models per validation class be tested using the relevant proposed test procedure. This number of basic models is consistent with the number for basic models required for most DOE-regulated equipment that utilize AEDMs. Additionally, DOE proposes that the AEDM-predicted result would be applied to the PEI metric and would be greater than or equal to 95 percent of the tested results for that same model. Additionally, the predicted PEI for each basic model calculated by applying the AEDM must meet or exceed the applicable federal energy conservation standard that applies.
DOE's proposed validation classes for general pumps are listed below:
Consistent with provisions for other commercial and industrial equipment, DOE also proposes requirements regarding retention of certain information related to validation and use of an AEDM to certify equipment. Specifically, any manufacturer using an AEDM to generate representative values must provide on request records showing: (1) The AEDM itself, and any
Consistent with provisions for other commercial and industrial equipment, DOE proposes to require that, if requested by DOE, a manufacturer must perform at least one of the following activities: (1) Conduct a simulation before a DOE representative to predict the performance of particular basic models of the equipment to which the AEDM was applied; (2) provide analysis of previous simulations conducted by the manufacturer; or (3) conduct certification testing of basic model(s) selected by DOE.
In addition, DOE notes that when making representations of values other than PEI based on the output of an AEDM, all other representations regarding PER, pump efficiency, overall efficiency, flow, head, driver power input and pump power output would be required to be based on the same AEDM results used to generate the represented value of PEI.
Consistent with provisions for certain other commercial and industrial equipment, DOE proposes including in 10 CFR 429.70 provisions related to AEDM verification testing for pumps, including: (1) Selection of units from retail if available, or otherwise from a manufacturer, (2) independent, third-party testing if available, or otherwise at a manufacturer's facility, (3) testing performed without manufacturer representatives on-site, (4) testing in accordance with the DOE test procedure, any active test procedures, any guidance issued by DOE, and lab communication with the manufacturer only if DOE organizes it, (5) notification of manufacturer if a model tests worse than its certified rating by an amount exceeding a 5 percent tolerance with opportunity for the manufacturer to respond, (6) potential finding of the rating for the model to be invalid, and (7) specifications regarding when a manufacturer's use of an AEDM may be restricted due to prior invalid represented values and how a manufacturer could regain the privilege of using an AEDM for rating.
DOE is also proposing conforming changes to 10 CFR 429.59 to allow use of AEDMs for general pumps in lieu of testing.
Enforcement provisions govern the process DOE would follow when performing an assessment of basic model compliance with standards, as described under subpart C of part 429. Specifically, subpart C of part 429 describes the notification requirements, legal processes, penalties, specific prohibited acts, and testing protocols related to testing covered equipment to determine or verify compliance with standards.
DOE proposes to apply the same general enforcement provisions contained in subpart C of part 429 to the proposed expanded scope of pumps.
Additionally, given that DOE is proposing to allow the use of AEDMs, DOE is also proposing in the product specific enforcement provisions in 10 CFR 429.134 that if the model of pump unit was rated using an AEDM, DOE may conduct enforcement testing using either a testing approach or calculation approach.
This section discusses the definition of basic model as it relates to the existing general pumps scope. DOE will make any proposals related to the basic model definition for its proposed expanded scope in any energy conservation standards rulemaking for pumps. DOE's regulations for pumps at 10 CFR 429.59 require that the represented values for each basic model be determined through testing in accordance with the sampling provisions specified in that section. As applied to pumps, DOE defines the term “basic model” in 10 CFR 431.462.
In the April 2021 RFI, DOE stated that pump manufacturers may elect to group similar individual pump models within the same equipment class into the same basic model to reduce testing burden, provided all representations regarding the energy use of pumps within that basic model are identical and based on the most consumptive unit 86 FR 20075, 20083). Accordingly, manufacturers may pair a given bare pump with several different motors (or motor and controls) and can include all combinations under the same basic model if the certification of energy use and all representations made by the manufacturer are based on the most consumptive bare pump/motor (or motor and controls) combination for each basic model and all individual models are in the same equipment class. 86 FR 20075, 20083-20084.
In the case of pumps, the term “basic model” means all units of a given class of pump manufactured by one manufacturer, having the same primary energy source, and having essentially identical electrical, physical, and functional (or hydraulic) characteristics that affect energy consumption, energy efficiency, water consumption, or water efficiency; and, in addition, for pumps that are subject to the standards specified in § 431.465(b), the following provisions also apply:
(1) All variations in numbers of stages of bare RSV and ST pumps must be considered a single basic model;
(2) Pump models for which the bare pump differs in impeller diameter, or impeller trim, may be considered a single basic model; and
(3) Pump models for which the bare pump differs in number of stages or impeller diameter and which are sold with motors (or motors and controls) of varying horsepower may only be considered a single basic model if:
(i) For ESCC, ESFM, IL, and RSV pumps, each motor offered in the basic model has a nominal full load motor efficiency rated at the Federal minimum (see the current table for NEMA Design B motors at § 431.25) or the same number of bands above the Federal minimum for each respective motor horsepower (see Table 3 of appendix A to subpart Y of this part); or
(ii) For ST pumps, each motor offered in the basic model has a full load motor efficiency at the default nominal full load submersible motor efficiency shown in Table 2 of appendix A to subpart Y of this part or the same number of bands above the default nominal full load submersible motor efficiency for each respective motor horsepower (see Table 3 of appendix A to subpart Y of this part).
Clauses (1) and (2) of the basic model definition, which are applicable to pumps that are subject to the standards specified in 10 CFR 431.465(b), align the scope of the “basic model” definition for pumps with the requirements that testing be conducted at a certain number of stages for RSV and ST pumps and at full impeller diameter. (10 CFR 431.462.) Clause (3) of the definition, which is applicable to pumps that are subject to the standards specified in 10 CFR 431.465(b), addresses basic models inclusive of pump models for which the bare pump differs in number of stages or impeller diameter. (
In order to group pumps sold with motors into a single basic model, clause (3)(i) provides that for basic models inclusive of pump models for which the bare pump differs in number of stages or impeller diameter, each motor offered in a pump included in that basic model must have a full-load efficiency at the Federal minimum efficiency level for NEMA Design B electric motors (found in 10 CFR 431.25) or the same number of efficiency bands above the Federal minimum for each respective motor horsepower as described in Table 3 of appendix A.
HI and Grundfos stated there are no modifications or clarifications needed for basic model except to modify the language to reduce testing burden by allowing manufacturers to group inverter-only motors into a single basic model (HI, No. 20 at p. 8; Grundfos, No. 17 at p. 8), which DOE discusses later. Summit stated that all pumps are reported using basic model grouping of “bare pump” as defined in Section III, regardless of whether the pump is sold with a motor. (Summit Pump, No. 16 at p. 6)
Summit requested clarification on whether “most consumptive” refers to the highest power consumption or least efficient and requested clarification on the phrase “same number of bands above federal minimum.” Summit also requested examples for reporting a bare pump with different motor powers. (Summit, No. 16 at p. 6)
In response to Summit, “most consumptive” would refer to the highest PEI, given that lower numbers of PEI are better. The phrase “same number of bands above federal minimum” means that the manufacturer should: (1) Identify the motor efficiency of the motor in question, (2) find the Federal minimum for the relevant horsepower/pole combination NEMA Design B electric motors in 10 CFR 431.25, (3) find both of those values in Table 3 of appendix A, and (4) count how many rows the motor efficiency is above the federal minimum. This process would be repeated for the other motors that the manufacturer may seek to group into the basic model to ensure that the motor efficiency for each motor is the same number of rows (“bands”) above the relevant Federal minimum in each case. Regarding Summit's request for examples of reporting a bare pump with different motor powers, DOE understands Summit to be referring to the case where a bare pump with varying number of stages or impeller diameters is sold with motors of varying horsepower. In this case, the manufacturer may choose to group those combinations into a single basic model, if all the motors are the “same number of bands above [the] federal minimum” as described in the process above. If so, the manufacturer would report the performance of that basic model following the steps in 10 CFR 429.59(b). The performance of the basic model would be based on the specific motor tested with the bare pump (using a testing-based approach or calculation-based approach) in accordance with 10 CFR 429.59(a). The manufacturer would report the basic model number as well as the individual model numbers for the bare pump and for all motors of varying horsepower that the manufacturer elected to group into a single basic model, in accordance with 10 CFR 429.59(c). Alternatively, the manufacturer could choose to report each of the bare pump + motor combinations as separate basic models.
In the April 2021 RFI, DOE stated that it received several inquiries related to the application of the basic model definition to pumps sold with VFDs of varying phase, voltage, and/or efficiency; pumps sold with inverter-only motors such as PMAC motors; and pumps sold with both single-phase and polyphase motors. 86 FR 20075, 20084.
For pumps sold with motors, when determining how to group models within a basic model, manufacturers must consider clause (3), which currently allows the grouping of models to be based on the number of bands above “nominal full-load motor efficiency rated at the Federal minimum (see the current table for NEMA Design B electric motors at § 431.25),” or for submersible turbine pumps, the number of bands above the default nominal full-load submersible motor efficiency. DOE stated that it may consider inclusion of explicit language that applies this clause to pumps sold with specific kinds of motors, or to pumps sold with VFDs. For example, inverter-only motors may have a rated efficiency (
DOE noted that for motors not currently subject to the DOE test procedure for electric motors, it is not clear how manufacturers would determine the full-load efficiency of a given motor, or specifically, determine the number of bands above the Federal minimum or, for submersible pumps, above the default efficiency. For inverter-only motors, DOE noted that the IEC recently published an industry test procedure that provides test methods for measuring the efficiency of these motors: IEC 60034-2-3:2020, “Rotating electrical machines—Part 2-3: Specific test methods for determining losses and efficiency of converter-fed
Summit stated that the majority of supplied motors are covered. (Summit, No. 16 at p. 6) Grundfos stated that their inverter-only motors are IE5 compliant as defined in IEC TS 60034-30-2 and tested according to IEC 60034-2-3. (Grundfos, No. 17 at p. 8) HI stated that IEEE 114 applies for efficiency testing of single-phase induction motors and IEC 60034-2-3 applies for efficiency testing of inverter-only motors. (HI, No. 20 at p. 8) NEEA provided a list of all test procedures applicable to all motor technologies that DOE considered in the 2017 Electric Motors test procedure RFI and stated that in particular they supported consideration of IEC 61800-9:2017 and 60034-2-3:2020, which appear to be applicable to all inverter-fed motors. (NEEA, No. 21 at p. 9-10)
HI recommended modifying the language of the basic model definition to reduce testing burden by allowing manufacturers to group inverter-only motors into a single basic model as long as all motors had an efficiency above the Federal minimum for each respective motor horsepower for NEMA Design B motors at 10 CFR 431.25, or above the default for submersible motors. (HI, No. 20 at p. 8) Grundfos supported HI's comment on modifying the “Band Rule” requirements to allow for all inverter-only motors
Grundfos stated that it sells products with VFDs in two configurations: (1) For products with integrated inverter-only motors, the VFD is specifically designed for the motor hp it is paired with, and (2) for external Grundfos VFDs, the VFD is designed for a specific hp motor. Grundfos also noted that VFDs can be used on differing hp motors where the kVA rating of the VFD is not exceeded. Finally, Grundfos noted that products can be used by end users with many different VFDs with which they are not sold, and so Grundfos could not determine the most consumptive of the entire market. (Grundfos, No. 17 at p. 9) HI stated that in many cases VFDs and pumps are purchased separately, but where manufacturers include VFDs with pumps, the test procedure is sufficient for determining a basic model and testing. (HI, No. 20 at p. 8)
As discussed in section III.F.1 and III.F.2, DOE proposed as part of its Motors TP NOPR to address single-phase induction motors (SNEMs) and inverter-only motors. As such, DOE does not need to reference external test procedures as part of the basic model definition. In addition, DOE proposed that PER
With regard to addressing VFDs in the basic model definition, HI stated that the test procedure is sufficient for determining a basic model, and Grundfos stated that it would be unable to determine which VFD was most consumptive. (HI, No. 20 at p. 8; Grundfos, No. 17 at p. 9) As such, DOE has tentatively determined that there is no viable option to more explicitly address VFDs in the basic model definition and that it does not need to change the basic model definition to address VFDs.
In the April 2021 RFI, DOE noted that to group pumps sold with both single-phase motors and pumps sold with polyphase motors into a single basic model, manufacturers would need to utilize a testing-based approach on the most consumptive configuration, as pumps sold with polyphase motors cannot be rated as bare pumps, and pumps sold with single-phase motors cannot be rated using a calculation-based approach (see Table 1 to appendix A). DOE requested comment on whether allowing such a grouping under the same basic model for pumps sold with both single-phase and polyphase motors would require more explicit direction in 10 CFR part 431. 86 FR 20075, 20084.
Grundfos stated that grouping single-phase products with polyphase product would not meet the definition of basic model because the characteristics that affect energy consumption are not “essentially identical.” Grundfos stated that if the intention of this grouping is to reduce testing burden, this is not accomplished because testing is still required on both versions to determine whether the single-phase or polyphase equipment would be “most consumptive,” unless DOE clearly states in the regulation what method(s) DOE determines to be valid to determine “most consumptive” before actual testing. Grundfos does not believe grouping single-phase with polyphase equipment should be allowed. (Grundfos, No. 17 at p. 9) HI stated that attempting to include regulated single-phase equipment would be limited because the current DOE regulation only includes general purpose open drip proof products. (HI, No. 20 at p. 8) HI recommended that pumps sold with single-phase and polyphase motors not be combined into a single basic model and recommended that DOE continue to allow pumps sold with single-phase motors to be rated with section III for bare pumps. (HI, No. 20 at p. 8)
Following consideration of HI and Grundfos' comments, DOE is not proposing to allow the grouping of single-phase and polyphase products into a single basic model. Instead, DOE proposes to require that pumps sold with single-phase motors can continue to be rated as bare pumps (with the exception of SVIL as discussed in section III.G).
DOE understands manufacturers often make representations (graphically or in numerical form) of energy use metrics, including pump efficiency, overall (wire-to-water) efficiency, bowl efficiency, driver power input, pump power input (brake or shaft horsepower), and/or pump power output (hydraulic horsepower). Manufacturers often make these representations at multiple impeller trims, operating speeds, and number of stages for a given pump. DOE proposes to allow manufacturers to continue making these representations. To ensure consistent and standardized representations across the pump industry and to ensure such representations are not in conflict with the reported PEI for any given pump model, DOE proposes to establish optional testing procedures for these parameters that are part of the DOE test procedure. DOE also proposes that, to the extent manufacturers wish to make representations regarding the performance of commercial and industrial pumps using these additional metrics, they would be required to do so based on testing in accordance with the DOE test procedure.
DOE notes that overall (wire-to-water) efficiency, driver power input, and/or pump power output (hydraulic horsepower) are already parameters that are described in HI 40.6-2021, which DOE proposes to incorporate by reference in the DOE test procedure (section III.C.1). DOE expects that further specification is not necessary regarding the determination of these parameters.
DOE specifies labeling requirements for pumps at 10 CFR 431.466. DOE requires that the permanent nameplate must be marked clearly with the following information: (A) For bare pumps and pumps sold with electric motors but not continuous or non-continuous controls, the rated pump energy index—constant load (PEI
DOE also specifies that all orientation, spacing, type sizes, typefaces, and line widths to display this required information must be the same as or similar to the display of the other performance data on the pump's permanent nameplate. DOE also specifies the form in which PEI
Regarding disclosure of efficiency information in marketing materials, DOE requires that the same information that must appear on a pump's permanent nameplate must also be prominently displayed on each page of a catalog that lists the pump; and in other materials used to market the pump. 10 CFR 431.466(a)(2)(i).
In the April 2021 RFI, DOE requested comment on whether the test procedure should explicitly specify how to determine the information required to be marked on a label in accordance with 10 CFR 431.466, and if so, how. 86 FR 20075, 20085.
Summit stated that labeling requirements seem straightforward but requested clarification on who is considered the manufacturer. (Summit, No. 16 at p. 6) DOE notes that 10 CFR 431.2 defines the term “manufacturer” as “any person who manufactures industrial equipment . . .” and defines manufacture as “to manufacture, produce, assemble, or import.”
Grundfos stated that individual model numbers should be the only data mandated by DOE on labels and marketing materials, and that basic models should not be mandated on product nameplates since they are only a reference with the manufacturers and DOE. (Grundfos, No. 17 at p. 9) HI requested that DOE clarify that only the individual model number and PEI need to be on the nameplate and marketing materials. (HI, No. 20 at p. 9)
Grundfos stated that mandating the actual impeller diameter on the nameplate of a product serves no purpose with respect to the regulation, EPCA, or consumers referencing this information. Grundfos added that there is also ample evidence from consumers that marking the “actual impeller diameter” on the product causes confusion because the PEI on the label is based on full impeller diameter. Grundfos recommended that the impeller diameter mandate for nameplates and marketing materials be removed to reduce substantial burden for global products. (Grundfos, No. 17 at p. 9-10) HI recommended that DOE not mandate that the impeller diameter appear on the pump nameplate or marketing materials, asserting that this requirement has no impact on EPCA and increases manufacturer burden for global products. (HI, No. 20 at p. 9)
DOE agrees that if the pump is sold only as a unit including motor (with or without controls) and is not sold as a bare pump, then using the manufacturer's individual model number on the label rather than the bare pump model number would be appropriate. DOE also notes that in the current regulations, impeller diameter does not have to be provided if the pump is not transferred directly to an end user. However, DOE will address these comments and consider proposals related to them in a separate rulemaking.
DOE also requested comment on whether the term “full impeller diameter” should be modified to explicitly address pumps with multiple stages and varying impeller diameters, and if so, how. 86 FR 20075, 20085.
Grundfos and HI stated that the definition of “full impeller diameter” is sufficient for testing purposes but could be clarified to ensure that multi-stage products are properly included by a slight modification to the definition by adding an “(s)” to the phrase “maximum diameter impeller.” (Grundfos, No. 17 at p. 10) HI offered a similar solution, suggesting that the definition be modified as to refer to “the maximum diameter impeller or
After considering the submitted comments, DOE proposes to revise the definition of full impeller diameter to mean “the maximum impeller diameter(s) with which a given pump
In this NOPR, DOE proposes to amend the existing test procedure at appendix A for pumps by: (1) Expanding the scope to include SVIL pumps; (2) expanding the scope to include other specified clean water pumps; (3) reducing the pump bowl diameter restriction to include more ST pumps; (4) changing the definitions of ESFM and ESCC pumps to cover all end-suction pumps; (5) incorporating a nominal speed of 1,200 rpm, in addition to 1,800 rpm and 3,600 rpm; (6) providing a calculation method for pumps sold with inverter-only motors; and (7) updating the part-load loss coefficients for pumps sold with induction motors. DOE has tentatively determined that the test procedure as proposed in this NOPR will not be unduly burdensome for manufacturers to conduct. Further discussion of the cost impacts of the test procedure amendments are presented in the following paragraphs.
As discussed in the April 2021 RFI, DOE received comments from stakeholders in response to the September 2020 Early Assessment RFI regarding costs to test pumps to the DOE test procedure. 86 FR 20075, 20082. Specifically, DOE noted HI's statement that, based on a survey of HI members, industry testing costs significantly exceeded DOE's estimates, and that wire-to-water testing represented 20 percent of total industry testing.
DOE notes that pump manufacturers must comply with the energy conservation standards that were established in 2016 and required beginning on January 27, 2020. 81 FR 4368 (January 26, 2016) (“January 2016 ECS Final Rule”). First-time compliance costs associated with meeting those energy conservation standards included testing costs, potential capital costs, and other one-time manufacturer costs associated with developing a testing and certification protocol. DOE also recognizes that the current test procedure does not provide a calculation method for pumps sold with motors that do not have a DOE energy efficiency standard; therefore, for pumps that rely on such motors, wire-to-water testing is required for each basic model. Finally, DOE notes that for all pumps currently subject to the energy conservation standards, the applicable energy efficiency values must be determined for all basic models according to the DOE test procedure, which includes the calculation method for certain pumps.
DOE notes that HI's response to the September 2020 Early Assessment RFI, included an estimate of the overall industry cost ($8.76 million) to test general pumps to certify compliance with the energy conservation standards established in the January 2016 ECS Final Rule. (HI, No. 6, at p. 2) Using its Compliance Certification Management System (“CCMS”) database, DOE estimates that a total of 2,745 basic models have been certified using the testing-based approach. Assuming that two individual pumps are tested to rate a basic model (the minimum as specified in 10 CFR 429.11, the number of pumps tested is 5,490. This results in an estimated per unit test cost of $1,600.
A total of 6,645 basic models are included in DOE's CCMS database, which means that 3,900 basic models, or 59 percent, were certified using the calculation-based approach. DOE estimates that it will take a mechanical engineer two hours to calculate and determine a rating for each basic model. Assuming a fully burdened engineering hourly wage of $65.07,
Additionally, DOE used data from the “Employer Costs for Employee Compensation—June 2021” to estimate that a Private Industry Worker's wages and salary are 70.6% of an employee's total compensation.
Therefore, total employer hourly cost is $65.07 = $45.94 ÷ 0.706.
DOE has tentatively determined that the test procedure amendments proposed in this NOPR would impact testing costs as discussed in the following sections.
As stated previously, DOE is proposing to expand the scope of this test procedure to include SVIL pumps, other specified clean water pumps, ST pumps with bowl diameters greater than 6 inches, currently uncovered end-suction pumps, and pumps designed to operate with a 6-pole induction motor or with a non-induction motor with an operating range that includes speeds of rotation between 960 and 1,440 rpm. As these pumps would also be newly regulated equipment, DOE currently has no test procedures or standards for the equipment. The proposed test procedure and metrics would be consistent with the requirements established in the January 2016 Final Rule. DOE also assumed a sampling plan consistent with that for pumps currently subject to the test procedure, which requires a sample size of at least two units per pump basic model be tested when determining representative values of PEI, as well as other pump performance metrics.
DOE recognizes that some manufacturers of these newly-covered pump categories may not manufacture general pumps, and therefore may not be currently testing pumps to the DOE test procedure. Manufacturers may opt to test their products either in-house or at a third-party laboratory. To estimate the test burden for newly-covered pumps as proposed in this TP NOPR, DOE assumed that manufacturers will test pumps in-house. In order to test a pump in-house, each manufacturer may have to undertake the construction and maintenance of a test facility that is capable of testing pumps in compliance with the test procedure, including acquisition and calibration of any necessary measurement equipment. DOE also assumed that manufacturers have a pump test facility available but may not have the equipment required to conduct the DOE test procedure and that the cost of purchasing such equipment is approximately $4,000 based on a review of available testing equipment on the market.
DOE assumes that for pump manufacturers who are member companies of HI or who conduct testing in accordance with the January 2016 Final Rule for other product offerings, these manufacturers already conduct testing in accordance with HI 40.6-2014 and would not incur any additional capital expenditures to be able to conduct the proposed DOE pump test procedure.
Pump manufacturers who are not members of HI may need to purchase electrical measurement equipment with ±2.0 percent accuracy to conduct the proposed pump test procedure. DOE estimates that calibrating the flowmeter, torque sensor, power quality meter, pressure transducer, and laser tachometer, together, will cost a manufacturer about $1,250 per year.
In this NOPR, DOE is proposing a calculation method for testing pumps with inverter-only motors. The current test procedure does not include a calculation method for motors that do not have a DOE efficiency standard; therefore, manufacturers are required to conduct wire-to-water testing for pumps sold with these (
For general pumps already certified, DOE would not expect any additional costs to manufacturers. DOE has tentatively determined that the calculation method for inverter-only motors proposed in this NOPR would provide results that are conservative as compared to results from wire-to-water testing—consequently, DOE does not expect manufacturers will need to rerate their basic models. For new basic models where the bare pump is already certified (
In this NOPR, DOE is proposing an updated calculation method for testing pumps with induction motors. The updated calculation method provides less conservative part-load loss coefficients than those provided in the current test procedure; however, DOE has tentatively determined that the proposed coefficients would still be conservative relative to wire-to-water testing. Aside from the proposed updated part-load motor coefficients, the test procedure, metrics, and sampling plan for general pumps remains consistent with the requirements established in the January 2016 Final Rule and, among other things, require a sample size of at least two units per pump basic model be tested when determining representative values of PEI, as well as other pump performance metrics.
For general pumps already certified, DOE would not expect any additional costs to manufacturers since the current calculation method provides the most conservative results. DOE expects that there will be no change in test cost for new bare pump basic models paired with an inverter-only motor, since the bare pump will need to be tested.
DOE does not anticipate that the remaining amendments proposed in this NOPR, listed below, would impact test costs.
(1) Incorporate by reference HI 40.6-2021 into 10 CFR 431.463;
(2) Remove the incorporations by reference of ANSI/HI 1.1-1.2-2014 and ANSI/HI 2.1-2.2-2014;
DOE has tentatively determined that manufacturers would be able to rely on data generated under the current test procedure should any of these additional proposed amendments be finalized.
DOE's established practice is to adopt relevant industry standards as DOE test procedures unless such methodology would be unduly burdensome to conduct or would not produce test results that reflect the energy efficiency, energy use, water use (as specified in EPCA) or estimated operating costs of that product during a representative average use cycle or period of use.
The test procedures for pumps at subpart Y incorporates by reference FM Class Number 1319, ANSI/HI 1.1-1.2-2014, ANSI/HI 2.1-2.2-2014, HI 40.6-2014, NFPA 20-2016, ANSI/UL 448-2013, and ANSI/UL 1081-2016. FM Class Number 1319, ANSI/HI 1.1-1.2-
EPCA prescribes that, if DOE amends a test procedure, all representations of energy efficiency and energy use, including those made on marketing materials and product labels, must be made in accordance with that amended test procedure, beginning 180 days after publication of such a test procedure final rule in the
Manufacturers of commercial and industrial pumps newly-covered under the proposed scope of the DOE pump test procedure, if finalized, would not be required to test such pumps to the proposed test procedure, if made final, until such time as compliance were required with energy conservation standards was required, should such standards be established. However, to the extent manufacturers choose to make voluntary representations as to the energy efficiency of such pumps, beginning 180 days following publication of the final test procedure, if finalized, any such representations would be required to be based on testing of the pumps in accordance with the finalized test procedure and such representation must fairly discloses the results of such testing. (42 U.S.C. 6314(d))
If DOE were to publish an amended test procedure, EPCA provides an allowance for individual manufacturers to petition DOE for an extension of the 180-day period if the manufacturer may experience undue hardship in meeting the deadline. (42 U.S.C. 6314(d)(2)) To receive such an extension, petitions must be filed with DOE no later than 60 days before the end of the 180-day period and must detail how the manufacturer will experience undue hardship. (
Executive Order (“E.O.”) 12866, 58 FR 51735 (Oct. 4, 1993), “Regulatory Planning and Review,” as supplemented and reaffirmed by E.O. 13563, “Improving Regulation and Regulatory Review, 76 FR 3821 (Jan. 21, 2011), requires agencies, to the extent permitted by law, to (1) propose or adopt a regulation only upon a reasoned determination that its benefits justify its costs (recognizing that some benefits and costs are difficult to quantify); (2) tailor regulations to impose the least burden on society, consistent with obtaining regulatory objectives, taking into account, among other things, and to the extent practicable, the costs of cumulative regulations; (3) select, in choosing among alternative regulatory approaches, those approaches that maximize net benefits (including potential economic, environmental, public health and safety, and other advantages; distributive impacts; and equity); (4) to the extent feasible, specify performance objectives, rather than specifying the behavior or manner of compliance that regulated entities must adopt; and (5) identify and assess available alternatives to direct regulation, including providing economic incentives to encourage the desired behavior, such as user fees or marketable permits, or providing information upon which choices can be made by the public. DOE emphasizes as well that E.O. 13563 requires agencies to use the best available techniques to quantify anticipated present and future benefits and costs as accurately as possible. In its guidance, the Office of Information and Regulatory Affairs (“OIRA”) in the Office of Management and Budget (“OMB”) has emphasized that such techniques may include identifying changing future compliance costs that might result from technological innovation or anticipated behavioral changes. For the reasons stated in the preamble, this proposed regulatory action is consistent with these principles.
Section 6(a) of E.O. 12866 also requires agencies to submit “significant regulatory actions” to OIRA for review. OIRA has determined that this proposed regulatory action does not constitute a “significant regulatory action” under section 3(f) of E.O. 12866. Accordingly, this action was not submitted to OIRA for review under E.O. 12866.
The Regulatory Flexibility Act (5 U.S.C. 601
The following sections detail DOE's IRFA for this test procedure rulemaking:
DOE is proposing to amend the existing DOE test procedures for commercial and industrial pumps. DOE shall amend test procedures with respect to covered equipment, if the Secretary determines that amended test procedures would more accurately produce test results which measure energy efficiency, energy use, or estimated annual operating cost of a covered equipment during a representative average use cycle or period of use. (42 U.S.C. 6314(a)(2)) This proposed rulemaking is in accordance with DOE's obligations under EPCA.
DOE is required to review existing DOE test procedures for all covered equipment every 7 years. (42 U.S.C. 6314(a)(1))
DOE has recently conducted a focused inquiry into small business manufacturers of the equipment covered by this proposed rulemaking. DOE used the SBA's small business size standards to determine whether any small entities would be subject to the requirements of
Based on DOE's analysis, 46 companies potentially selling commercial and industrial pumps covered by this proposed test procedure were identified. DOE screened out companies that do not meet the small entity definition and additionally screened out companies that are largely or entirely foreign owned and operated. Of the 46 companies, 21 were further identified as a small business. Based on a review of publicly available model databases, DOE estimated the number of models currently covered by the test procedure for each small business, excluding four small businesses not reflected in the model databases. DOE attributes a total of 779 unique basic models of covered pumps to small businesses, ranging from one model to 503 models for an average of approximately 46 models per small business. DOE was able to find revenue estimates for all 21 small businesses.
DOE estimates that this proposed test procedure would not require any manufacturer to incur any additional testing burden associated with the proposed test procedure. If finalized, DOE recognizes that commercial and industrial pump energy conservation standards may be proposed or promulgated in the future and pump manufacturers would then be required to test all covered pumps in accordance with the proposed test procedures. (
DOE examined the websites and, when available, product catalogs of all previously identified 21 potential small businesses for listings of SVIL pumps. DOE identified three small businesses manufacturing SVIL pumps—producing an estimated total of 73 basic models, with one small business producing nine basic models, another producing as many as 56 basic models, and other small business producing eight basic models. DOE estimated that it would cost approximately $1,600 per unique basic model tested. Accordingly, all small businesses combined would incur costs of approximately $116,800—with the first small business incurring a cost of $14,400, the second incurring a cost of $89,600, and the third incurring a cost of $12,800.
DOE was able to find revenue estimates for both small businesses. Testing costs for newly-covered SVIL pumps would represent significantly less than one percent of estimated annual revenue for both small businesses.
DOE examined the websites and, when available, product catalogs of all previously identified 21 potential small businesses for listings of any of the clean water pumps that would be newly-covered under this proposed test procedure, if finalized. DOE identified five small businesses manufacturing clean water pumps potentially covered by this rulemaking that are not covered by the current test procedure. Although a newly-covered model count estimate was not possible for two small businesses, the remaining three small businesses produce an estimated total of 255 newly-covered basic models, with the first small business producing 189 basic models, the second producing 13 basic models, and the third producing 53 basic models. For the first small business, DOE conservatively estimated 65 newly-covered models of between-bearing pumps, 27 models of newly-covered vertical turbine pumps, and 97 models covered by the 1200 RPM scope expansion—excluding models also covered by the other scope expansions. The second small business produces approximately 13 models that would fall under the 1200 RPM scope expansion. For the third small business, approximately one-third of newly-covered unique basic models are submersible pumps and two-thirds are vertical turbine pumps, several of which also fall under the 1200 RPM scope expansion. DOE estimated that it would cost approximately $1,600 per unique basic model tested. Accordingly, the three small businesses combined would incur costs of approximately $408,000—with the first incurring a cost of $302,400, the second incurring accost of $20,800, and the third incurring a cost of $84,800. The first and second small businesses produce both SVIL pumps and newly-covered clean water pumps and would incur an approximate total testing cost of $315,200 and $35,200 respectively.
DOE was able to find revenue estimates for both small businesses. Testing costs for newly-covered clean water pumps would represent significantly less than one percent of estimated annual revenue for both small businesses.
Because, relative to the amended test procedure calculations, the proposed calculation changes are conservative, manufacturers would not have to recalculate or re-rate existing models. Accordingly, DOE does not anticipate that updating the part-load loss coefficients for pumps sold with induction motors or providing a calculation method for pumps sold with inverter-only motors would impose any costs on small businesses if the amended test procedures are adopted. Likewise, permitting the use of AEDMs in lieu of the calculation-based test is not expected to result in additional costs for affected small businesses, as they will continue to be able to employ the calculation-based test.
DOE requests comment on the number of small businesses DOE identified; the estimated number of covered models these small businesses manufacture; the per testing costs and total testing costs DOE estimated small businesses may incur to test models to appendix A; and any other potential
DOE is not aware of any rules or regulations that duplicate, overlap, or conflict with the proposed rule being considered today.
As previously stated in this section, DOE is required to review existing DOE test procedures for all covered products and equipment every 7 years. Additionally, DOE shall amend test procedures with respect to any covered equipment, if the Secretary determines that amended test procedures would more accurately produce test results which measure energy efficiency, energy use, or estimated annual operating cost of a covered equipment type during a representative average use cycle or period of use. (42 U.S.C. 6314(a)(1)) DOE has initially determined that the proposed amendments for the existing DOE test procedure for commercial and industrial pumps would more accurately produce test results to measure the efficiency of this equipment.
DOE has tentatively determined that there are no better alternatives than the proposed amendments in terms of meeting the agency's objectives to measure energy efficiency more accurately and to reduce burden on manufacturers. Therefore, DOE is proposing in this NOPR to amend the existing DOE test procedure for commercial and industrial pumps.
Additional compliance flexibilities may be available through other means. Notably, section 504 of the Department of Energy Organization Act, 42 U.S.C. 7194, provides authority for the Secretary to adjust a rule issued under EPCA in order to prevent “special hardship, inequity, or unfair distribution of burdens” that may be imposed on that manufacturer as a result of such rule. Manufacturers should refer to 10 CFR part 430, subpart E, and part 1003 for additional details.
Under the procedures established by the Paperwork Reduction Act of 1995 (“PRA”), a person is not required to respond to a collection of information by a Federal agency unless that collection of information displays a currently valid OMB Control Number.
OMB Control Number 1910-1400, Compliance Statement Energy/Water Conservation Standards for Appliances, is currently valid and assigned to the certification reporting requirements applicable to covered equipment, including pumps.
DOE's certification and compliance activities ensure accurate and comprehensive information about the energy and water use characteristics of covered products and covered equipment sold in the United States. Manufacturers of all covered products and covered equipment must submit a certification report before a basic model is distributed in commerce, annually thereafter, and if the basic model is redesigned in such a manner to increase the consumption or decrease the efficiency of the basic model such that the certified rating is no longer supported by the test data. Additionally, manufacturers must report when production of a basic model has ceased and is no longer offered for sale as part of the next annual certification report following such cessation. DOE requires the manufacturer of any covered product or covered equipment to establish, maintain, and retain the records of certification reports, of the underlying test data for all certification testing, and of any other testing conducted to satisfy the requirements of 10 CFR part 429, 10 CFR part 430,and/or 10 CFR part 431. Certification reports provide DOE and consumers with comprehensive, up-to date efficiency information and support effective enforcement.
Certification data would be required for pumps that would be covered under the proposed expansion of the test procedure scope at such time compliance is required with energy conservation standards for such pumps, should such standards be established; however, DOE is not proposing certification or reporting requirements for pumps in this NOPR. Instead, DOE may consider proposals to establish certification requirements and reporting for the pumps covered under the proposed expansion of the test procedure scope under a separate rulemaking regarding appliance and equipment certification. DOE will address changes to OMB Control Number 1910-1400 at that time, as necessary.
Notwithstanding any other provision of the law, no person is required to respond to, nor shall any person be subject to a penalty for failure to comply with, a collection of information subject to the requirements of the PRA, unless that collection of information displays a currently valid OMB Control Number.
DOE is analyzing this proposed regulation in accordance with the National Environmental Policy Act of 1969 (42 U.S.C. 4321
Executive Order 13132, “Federalism,” 64 FR 43255 (Aug. 10, 1999) imposes certain requirements on agencies formulating and implementing policies or regulations that preempt State law or that have federalism implications. The Executive order requires agencies to examine the constitutional and statutory authority supporting any action that would limit the policymaking discretion of the States and to carefully assess the necessity for such actions. The Executive order also requires agencies to have an accountable process to ensure meaningful and timely input by State and local officials in the development of regulatory policies that have federalism implications. On March 14, 2000, DOE published a statement of policy describing the intergovernmental consultation process it will follow in the development of such regulations. 65 FR 13735. DOE has examined this proposed rule and has determined that it would not have a substantial direct effect on the States, on the relationship between the national government and the States, or on the distribution of power and responsibilities among the various
Regarding the review of existing regulations and the promulgation of new regulations, section 3(a) of Executive Order 12988, “Civil Justice Reform,” 61 FR 4729 (Feb. 7, 1996), imposes on Federal agencies the general duty to adhere to the following requirements: (1) Eliminate drafting errors and ambiguity, (2) write regulations to minimize litigation, (3) provide a clear legal standard for affected conduct rather than a general standard, and (4) promote simplification and burden reduction. Section 3(b) of Executive Order 12988 specifically requires that executive agencies make every reasonable effort to ensure that the regulation (1) clearly specifies the preemptive effect, if any, (2) clearly specifies any effect on existing Federal law or regulation, (3) provides a clear legal standard for affected conduct while promoting simplification and burden reduction, (4) specifies the retroactive effect, if any, (5) adequately defines key terms, and (6) addresses other important issues affecting clarity and general draftsmanship under any guidelines issued by the Attorney General. Section 3(c) of Executive Order 12988 requires Executive agencies to review regulations in light of applicable standards in sections 3(a) and 3(b) to determine whether they are met or it is unreasonable to meet one or more of them. DOE has completed the required review and determined that, to the extent permitted by law, the proposed rule meets the relevant standards of Executive Order 12988.
Title II of the Unfunded Mandates Reform Act of 1995 (“UMRA”) requires each Federal agency to assess the effects of Federal regulatory actions on State, local, and Tribal governments and the private sector. Public Law 104-4, sec. 201 (codified at 2 U.S.C. 1531). For a proposed regulatory action likely to result in a rule that may cause the expenditure by State, local, and Tribal governments, in the aggregate, or by the private sector of $100 million or more in any one year (adjusted annually for inflation), section 202 of UMRA requires a Federal agency to publish a written statement that estimates the resulting costs, benefits, and other effects on the national economy. (2 U.S.C. 1532(a), (b)) The UMRA also requires a Federal agency to develop an effective process to permit timely input by elected officers of State, local, and Tribal governments on a proposed “significant intergovernmental mandate,” and requires an agency plan for giving notice and opportunity for timely input to potentially affected small governments before establishing any requirements that might significantly or uniquely affect small governments. On March 18, 1997, DOE published a statement of policy on its process for intergovernmental consultation under UMRA. 62 FR 12820; also available at
Section 654 of the Treasury and General Government Appropriations Act, 1999 (Pub. L. 105-277) requires Federal agencies to issue a Family Policymaking Assessment for any rule that may affect family well-being. This proposed rule would not have any impact on the autonomy or integrity of the family as an institution. Accordingly, DOE has concluded that it is not necessary to prepare a Family Policymaking Assessment.
DOE has determined, under Executive Order 12630, “Governmental Actions and Interference with Constitutionally Protected Property Rights” 53 FR 8859 (March 18, 1988), that this proposed regulation would not result in any takings that might require compensation under the Fifth Amendment to the U.S. Constitution.
Section 515 of the Treasury and General Government Appropriations Act, 2001 (44 U.S.C. 3516 note) provides for agencies to review most disseminations of information to the public under guidelines established by each agency pursuant to general guidelines issued by OMB. OMB's guidelines were published at 67 FR 8452 (Feb. 22, 2002), and DOE's guidelines were published at 67 FR 62446 (Oct. 7, 2002). Pursuant to OMB Memorandum M-19-15, Improving Implementation of the Information Quality Act (April 24, 2019), DOE published updated guidelines which are available at
Executive Order 13211, “Actions Concerning Regulations That Significantly Affect Energy Supply, Distribution, or Use,” 66 FR 28355 (May 22, 2001), requires Federal agencies to prepare and submit to OMB, a Statement of Energy Effects for any proposed significant energy action. A “significant energy action” is defined as any action by an agency that promulgated or is expected to lead to promulgation of a final rule, and that (1) is a significant regulatory action under Executive Order 12866, or any successor order; and (2) is likely to have a significant adverse effect on the supply, distribution, or use of energy; or (3) is designated by the Administrator of OIRA as a significant energy action. For any proposed significant energy action, the agency must give a detailed statement of any adverse effects on energy supply, distribution, or use should the proposal be implemented, and of reasonable alternatives to the action and their expected benefits on energy supply, distribution, and use.
The proposed regulatory action to amend the test procedure for measuring the energy efficiency of pumps is not a significant regulatory action under Executive Order 12866. Moreover, it would not have a significant adverse effect on the supply, distribution, or use of energy, nor has it been designated as a significant energy action by the Administrator of OIRA. Therefore, it is not a significant energy action, and, accordingly, DOE has not prepared a Statement of Energy Effects.
Under section 301 of the Department of Energy Organization Act (Pub. L. 95-91; 42 U.S.C. 7101), DOE must comply with section 32 of the Federal Energy Administration Act of 1974, as amended by the Federal Energy Administration Authorization Act of 1977. (15 U.S.C.
The proposed modifications to the test procedure for pumps would incorporate testing methods contained in certain sections of the following commercial standards: HI 40.6-2021. DOE has evaluated these standards and is unable to conclude whether they fully comply with the requirements of section 32(b) of the FEAA (
In this NOPR, DOE proposes to incorporate by reference the test standard published by The Hydraulic Institute titled “HI 40.6-2021, Methods for Rotodynamic Pump Efficiency Testing.” HI 40.6-2021 is an industry-accepted test procedure for measuring the performance of rotodynamic pumps. The test procedure proposed in this NOPR references various sections of HI 40.6-2021 that address test setup, instrumentation, test conduct, and calculations. Copies of HI 40.6-2021 can be obtained from the Hydraulic Institute at 6 Campus Drive, First Floor North, Parsippany, NJ, 07054-4406, or by going to
The time and date for the webinar meeting are listed in the
Any person who has an interest in the topics addressed in this document, or who is representative of a group or class of persons that has an interest in these issues, may request an opportunity to make an oral presentation at the webinar. Such persons may submit to
DOE requests persons selected to make an oral presentation to submit an advance copy of their statements at least two weeks before the webinar. At its discretion, DOE may permit persons who cannot supply an advance copy of their statement to participate, if those persons have made advance alternative arrangements with the Building Technologies Office. As necessary, requests to give an oral presentation should ask for such alternative arrangements.
DOE will designate a DOE official to preside at the webinar/public meeting and may also use a professional facilitator to aid discussion. The meeting will not be a judicial or evidentiary-type public hearing, but DOE will conduct it in accordance with section 336 of EPCA (42 U.S.C. 6306). A court reporter will be present to record the proceedings and prepare a transcript. DOE reserves the right to schedule the order of presentations and to establish the procedures governing the conduct of the webinar/public meeting. There shall not be discussion of proprietary information, costs or prices, market share, or other commercial matters regulated by U.S. anti-trust laws. After the webinar/public meeting and until the end of the comment period, interested parties may submit further comments on the proceedings and any aspect of the rulemaking.
The webinar will be conducted in an informal, conference style. DOE will present a general overview of the topics addressed in this proposed rulemaking, allow time for prepared general statements by participants, and encourage all interested parties to share their views on issues affecting this proposed rulemaking. Each participant will be allowed to make a general statement (within time limits determined by DOE), before the discussion of specific topics. DOE will permit, as time permits, other participants to comment briefly on any general statements.
At the end of all prepared statements on a topic, DOE will permit participants to clarify their statements briefly. Participants should be prepared to answer questions by DOE and by other participants concerning these issues. DOE representatives may also ask questions of participants concerning other matters relevant to this proposed rulemaking. The official conducting the webinar/public meeting will accept additional comments or questions from those attending, as time permits. The presiding official will announce any further procedural rules or modification of the above procedures that may be needed for the proper conduct of the webinar/public meeting.
A transcript of the webinar will be included in the docket, which can be viewed as described in the
DOE will accept comments, data, and information regarding this proposed rule no later than the date provided in the
However, your contact information will be publicly viewable if you include it in the comment or in any documents attached to your comment. Any information that you do not want to be publicly viewable should not be included in your comment, nor in any document attached to your comment. Persons viewing comments will see only first and last names, organization names, correspondence containing comments, and any documents submitted with the comments.
Do not submit to
DOE processes submissions made through
Include contact information each time you submit comments, data, documents, and other information to DOE. No faxes will be accepted.
Comments, data, and other information submitted to DOE electronically should be provided in PDF (preferred), Microsoft Word or Excel, WordPerfect, or text (ASCII) file format. Provide documents that are not secured, written in English and free of any defects or viruses. Documents should not contain special characters or any form of encryption and, if possible, they should carry the electronic signature of the author.
It is DOE's policy that all comments may be included in the public docket, without change and as received, including any personal information provided in the comments (except information deemed to be exempt from public disclosure).
Although DOE welcomes comments on any aspect of this proposal, DOE is particularly interested in receiving comments and views of interested parties concerning the following issues:
The Secretary of Energy has approved publication of this notice of proposed rulemaking and announcement of public webinar.
Administrative practice and procedure, Confidential business information, Energy conservation, Household appliances, Imports, Intergovernmental relations, Reporting and recordkeeping requirements, Small businesses.
Administrative practice and procedure, Confidential business information, Energy conservation test procedures, Incorporation by reference, Reporting and recordkeeping requirements.
This document of the Department of Energy was signed on March 17, 2022, by Kelly J. Speakes-Backman, Principal Deputy Assistant Secretary for Energy Efficiency and Renewable Energy, pursuant to delegated authority from the Secretary of Energy. That document with the original signature and date is maintained by DOE. For administrative purposes only, and in compliance with requirements of the Office of the Federal Register, the undersigned DOE
For the reasons stated in the preamble, DOE is proposing to amend parts 429 and 431 of chapter II of title 10, Code of Federal Regulations as set forth below:
42 U.S.C. 6291-6317; 28 U.S.C. 2461 note.
The revision and additions read as follows:
(a)
(2) * * *
(iv)
(i) Any represented value of energy consumption or other measure of energy use of a basic model for which consumers would favor lower values shall be greater than or equal to the output of the AEDM and less than or equal to the Federal standard for that basic model; and
(ii) Any represented value of energy efficiency or other measure of energy consumption of a basic model for which consumers would favor higher values shall be less than or equal to the output of the AEDM and greater than or equal to the Federal standard for that basic model.
(i) The AEDM is derived from a mathematical model that estimates the energy efficiency or energy consumption characteristics of the basic model as measured by the applicable DOE test procedure;
(ii) The AEDM is based on engineering or statistical analysis, computer simulation or modeling, or other analytic evaluation of performance data; and
(iii) The manufacturer has validated the AEDM, in accordance with paragraph (i)(2) of this section.
(2)
(i)
(ii)
(B) The predicted constant or variable load pump energy index for each basic model calculated by applying the AEDM must meet or exceed the applicable federal energy conservation standard.
(iii)
(B) Test results used to validate the AEDM must meet or exceed current, applicable Federal standards as specified in part 431 of this chapter; and
(C) Each test must have been performed in accordance with the applicable DOE test procedure with which compliance is required at the time the basic models used for validation are distributed in commerce.
(iv)
(3)
(i) The AEDM, including the mathematical model, the engineering or statistical analysis, and/or computer simulation or modeling that is the basis of the AEDM;
(ii) Regarding the units tested that were used to validate the AEDM pursuant to paragraph (i)(2) of this
(iii) For each basic model to which the AEDM was applied, equipment information and AEDM calculations.
(4)
(i) Conduct simulations before representatives of the Department to predict the performance of particular basic models of the equipment to which the AEDM was applied;
(ii) Provide analyses of previous simulations conducted by the manufacturer; and/or
(iii) Conduct certification testing of basic models selected by the Department.
(i)
(ii)
(iii)
(iv)
(A) Any active test procedure waivers that have been granted for the basic model;
(B) Any test procedure guidance that has been issued by DOE;
(C) If during test set-up or testing, the lab indicates to DOE that it needs additional information regarding a given basic model in order to test in accordance with the applicable DOE test procedure, DOE may organize a meeting between DOE, the manufacturer and the lab to provide such information.
(D) At no time during the process may the lab communicate directly with the manufacturer without DOE present.
(v)
(vi)
(vii)
(viii)
(A) If DOE has determined that a manufacturer made invalid ratings on two or more models rated using the same AEDM within a 24 month period, the manufacturer must take the action listed in the table corresponding to the number of invalid certified ratings. The twenty-four month period begins with a DOE determination that a rating is invalid through the process outlined above. Additional invalid ratings apply for the purposes of determining the appropriate consequences if the subsequent determination(s) is based on selection of a unit for testing within the twenty-four month period (
(B) If, as a result of eight or more invalid ratings, a manufacturer has lost the privilege of using an AEDM for rating, the manufacturer may regain the ability to use an AEDM by:
(
(
(
(
(i) * * *
(1) * * *
(ii) DOE will test each pump unit according to the test method specified by the manufacturer in the certification report submitted pursuant to § 429.59(b); if the model of pump unit was rated using an AEDM, DOE may use either a testing approach or calculation approach.
42 U.S.C. 6291-6317; 28 U.S.C. 2461 note.
The revisions and additions read as follows:
The following definitions are applicable to this subpart, including appendices A, B, and C. In cases where definitions reference design intent, DOE will consider marketing materials, labels and certifications, and equipment design to determine design intent.
(1) All variations in numbers of stages of bare RSV and ST pumps must be considered a single basic model;
(2) Pump models for which the bare pump differs in impeller diameter, or impeller trim, may be considered a single basic model; and
(3) Pump models for which the bare pump differs in number of stages or impeller diameter and which are sold with motors (or motors and controls) of varying horsepower may only be considered a single basic model if:
(i) For ESCC, ESFM, IL, and RSV pumps, each motor offered in the basic model has a nominal full load motor efficiency rated at the Federal minimum (see the applicable table at § 431.25) or the same number of bands above the Federal minimum for each respective motor horsepower (
(ii) For ST pumps, each motor offered in the basic model has a full load motor efficiency at the default nominal full load submersible motor efficiency shown in table 2 of appendix A to subpart Y of this part or the same
(1) That has a shaft input power greater than or equal to 1 hp and less than or equal to 200 hp at BEP and full impeller diameter and at the number of stages required for testing;
(2) In which liquid is discharged in a plane perpendicular to the impeller shaft;
(3) For which each stage (or bowl) consists of an impeller and diffuser; and
(4) For which no external part of such a pump is designed to be submerged in the pumped liquid.
(1) That has a shaft input power greater than or equal to 1 hp and less than or equal to 200 hp at BEP and full impeller diameter and at the number of stages required for testing;
(2) In which liquid is discharged in a plane perpendicular to the impeller shaft;
(3) For which each stage (or bowl) consists of an impeller and diffuser; and
(4) For which no external part of such a pump is designed to be submerged in the pumped liquid.
(1) Has a shaft input power less than 1 horsepower at its BEP at full impeller diameter; and
(2) In which liquid is discharged in a plane perpendicular to the shaft; and
(3) Is not a circulator pump.
(1) Contains an impeller, impeller shaft (or motor shaft in the case of close-coupled pumps), shaft seal or packing, driver (if present), and mechanical equipment (if present); and
(2) Has a shaft input power that is less than or equal to 1 hp at BEP and full impeller diameter; and
(3) Has the same primary energy source (if sold with a driver) and the same electrical, physical, and functional characteristics that affect energy consumption or energy efficiency; and
(4) Is mounted in its own volute; and
(5) Discharges liquid through its volute and the common discharge in a plane perpendicular to the impeller shaft.
(1) That has a shaft input power greater than or equal to 1 hp and less than or equal to 200 hp at BEP and full impeller diameter and at the number of stages required for testing;
(2) For which no external part of such pump is designed to be submerged in the pumped liquid;
(3) That has a single pressure containing boundary (
(4) That discharges liquid through the same casing in which the impeller shaft is contained.
The revisions read as follows:
(a) Certain material is incorporated by reference into this part with the approval of the Director of the Federal Register in accordance with 5 U.S.C. 552(a) and 1 CFR part 51. To enforce any edition other than that specified in this section, DOE must publish a document in the
(d) * * *
(2) HI 40.6-2021, “Methods for Rotodynamic Pump Efficiency Testing”, IBR approved for appendix A to this subpart.
The revisions and addition read as follows:
(a) * * *
(1) * * *
(i) The following categories of clean water pumps that have the characteristics listed in paragraph (a)(1)(iii) of this section.
(ii) The additional following categories of clean water pumps that have the characteristics listed in paragraph (a)(1)(iii) of this section:
(A) Between-bearing (BB);
(B) Radially-split, multi-stage, horizontal, end-suction diffuser casing (RSHES);
(C) Radially-split, multi-stage, horizontal, in-line diffuser casing (RSHIL);
(D) Small vertical in-line (SVIL); and
(E) Vertical Turbine (VT).
(iii) Pump characteristics:
(A) Flow rate of 25 gpm or greater at BEP and full impeller diameter;
(B) Maximum head of 459 feet at BEP and full impeller diameter and the number of stages required for testing (
(C) Design temperature range wholly or partially in the range of 15 to 250 °F;
(D) Designed to operate with either:
(
(
(E) For ESCC and ESFM pumps, a specific speed less than or equal to 5,000 when calculated using U.S. customary units.
The revisions and additions read as follows:
On or after [
Any representations with respect to the energy use or efficiency of pumps specified in 431.464(a)(1)(ii), excluding pumps listed in § 431.464(a)(1)(iv), made on or after [
A.
A.1
A.2 Section III of this appendix addresses the test procedure applicable to bare pumps. This test procedure also applies to pumps sold with drivers other than motors and BB, ESCC, ESFM, IL, RSHES, RSHIL, RSV, ST, and VT pumps sold with single-phase induction motors.
A.3 Section IV of this appendix addresses the testing-based approach for pumps sold with motors, which applies to all pumps sold with electric motors, except for pumps sold with inverter-only synchronous electric motors, but including pumps sold with single-phase induction motors. This test procedure also applies to pumps sold with controls other than continuous or non-continuous controls (
A.4 Section V of this appendix addresses the calculation-based approach for pumps sold with motors, which applies to:
A.4.1 Pumps sold with polyphase electric motors regulated by DOE's energy conservation standards for electric motors at § 431.25(g), and
A.4.2 SVIL pumps sold with small electric motors regulated by DOE's energy conservation standards at § 431.446 or sold with SNEMs regulated by DOE's energy conservation standards
A.4.3 Pumps sold with submersible motors.
A.5 Section VI of this appendix addresses the testing-based approach for pumps sold with motors and controls, which applies to all pumps sold with electric motors (including single-phase induction motors) and continuous or non-continuous controls and to pumps sold with inverter-only synchronous electric motors with or without controls.
A.6 Section VII of this appendix discusses the calculation-based approach for pumps sold with motors and controls, which applies to:
A.6.1 Pumps sold with polyphase electric motors regulated by DOE's energy conservation standards for electric motors at § 431.25(g) and continuous controls and
A.6.2 Pumps sold with inverter-only synchronous electric motors,
A.6.3 SVIL pumps sold with small electric motors regulated by DOE's energy conservation standards at § 431.446 (but including motors of such varieties that are less than 0.25 hp) and continuous controls or with SNEMs regulated by DOE's energy conservation standards at subpart B of this part (but including motors of such varieties that are less than 0.25 hp) and continuous controls, and
A.6.4 Pumps sold with submersible motors and continuous controls.
B.
B.2 Calibration. Calibration requirements for instrumentation are specified in Appendix D of HI 40.6-2021.
C.
C.1 Nominal Speed of Rotation. Determine the nominal speed of rotation based on the range of speeds of rotation at which the pump is designed to operate, in accordance with sections I.C.1.1, I.C.1.2, and I.C.1.3 of this appendix, as applicable. When determining the range of speeds at which the pump is designed to operate, DOE will refer to published data, marketing literature, and other publicly-available information about the pump model and motor, as applicable.
C.1.1 For pumps sold without motors, select the nominal speed of rotation based on the speed for which the pump is designed.
C.1.1.1 For bare pumps designed for speeds of rotation including 2,880 to 4,320 revolutions per minute (rpm), the nominal speed of rotation shall be 3,600 rpm.
C.1.1.2 For bare pumps designed for speeds of rotation including 1,440 to 2,160 rpm, the nominal speed of rotation shall be 1,800 rpm.
C1.1.3 For bare pumps designed for speeds of rotation including 960 to 1,440 rpm, the nominal speed of rotation shall be 1,200 rpm.
C.1.2 For pumps sold with induction motors, select the appropriate nominal speed of rotation.
C1.2.1 For pumps sold with 6-pole induction motors, the nominal speed of rotation shall be 1,200 rpm.
C.1.2.2 For pumps sold with 4-pole induction motors, the nominal speed of rotation shall be 1,800 rpm.
C.1.2.3 For pumps sold with 2-pole induction motors, the nominal speed of rotation shall be 3,600 rpm.
C.1.3 For pumps sold with non-induction motors, select the appropriate nominal speed of rotation.
C.1.3.1 Where the operating range of the pump and motor includes speeds of rotation between 2,880 and 4,320 rpm, the nominal speed of rotation shall be 3,600 rpm.
C.1.3.2 Where the operating range of the pump and motor includes speeds of rotation between 1,440 and 2,160 rpm, the nominal speed of rotation shall be 1,800 rpm.
C.1.3.3 Where the operating range of the pump and motor includes speeds of rotation between 960 and 1,440, the nominal speed of rotation shall be 1,200 rpm.
C.2 Multi-Stage Pumps. Perform testing on the pump with two stages for BB pumps, three stages for RSH and RSV pumps, and nine stages for ST and VT pumps. If the basic model of pump being tested is only available with fewer than the required number of stages, test the pump with the maximum number of stages with which the basic model is distributed in commerce in the United States. If the basic model of pump being tested is only available with greater than the required number of stages, test the pump with the lowest number of stages with which the basic model is distributed in commerce in the United States. If the basic model of pump being tested is available with both fewer and greater than the required number of stages, but not the required number of stages, test the pump with the number of stages closest to the required number of stages. If both the next lower and next higher number of stages are equivalently close to the required number of stages, test the pump with the next higher number of stages.
C.3 Twin-Head Pumps. For twin-head pumps, perform testing on an equivalent single impeller IL or SVIL pump as applicable, constructed by incorporating one of the driver and impeller assemblies of the twin-head pump being rated into an adequate IL-style or SVIL-style, single impeller volute and casing. An adequate IL-style or SVIL-style, single impeller volute and casing means a volute and casing for which any physical and functional characteristics that affect energy consumption and energy efficiency are the same as their corresponding characteristics for a single impeller in the twin-head pump volute and casing.
D.
D.1 Damping Devices. Use of damping devices, as described in Section 40.6.3.2.2 of HI 40.6-2021, are only permitted to integrate up to the data collection interval used during testing.
D.2 Stabilization. Record data at any tested load point only under stabilized conditions, as defined in HI 40.6-2021 Section 40.6.5.5.1, where a minimum of two measurements are used to determine stabilization.
D.3 Calculations and Rounding. Normalize all measured data to the nominal speed of rotation of 3,600 or 1,800 or 1,200 rpm based on the nominal speed of rotation selected for the pump in section I.C.1 of this appendix, in accordance with the
D.4 Pumps with BEP at Run Out. Test pumps for which the expected BEP corresponds to a volume rate of flow that is within 20 percent of the expected maximum flow rate at which the pump is designed to operate continuously or safely (
D.4.1 Use the following seven flow points—40, 50, 60, 70, 80, 90, and 100 percent of the expected maximum flow rate for determination of BEP in sections III.D, IV.D, V.D, VI.D, and VII.D of this appendix instead of the flow points specified in those sections.
D.4.2 Use flow points of 60, 70, 80, 90, and 100 percent of the expected maximum flow rate of the pump to determine pump power input or driver power input instead of the flow points of 60, 75, 90, 100, 110, and 120 percent of the expected BEP flow rate specified in sections III.E.1.1, IV.E.1, V.E.1.1, VI.E.1, and VII.E.1.1 of this appendix.
D.4.3 To determine PER
E.
E.1 To determine overall (wire-to-water) efficiency, driver power input, and/or pump power output (hydraulic horsepower), conduct testing in accordance with HI 40.6-2021.
A. * * *
A.1. For pumps rated as bare pumps or pumps sold with motors (other than inverter-only synchronous electric motors), determine the PEI
A.2 For pumps rated as pumps sold with motors and continuous controls or non-continuous controls (including pumps sold with inverter-only synchronous electric motors with or without controls), determine the PEI
PER
B. * * *
B.1.2.1.2 Determine the default nominal full load motor efficiency as described in section II.B.1.2.1.2.1 of this appendix for BB, ESCC, ESFM, IL, RSHES, RSHIL, RSV, and VT pumps; section II.B.1.2.1.2.2 of this appendix for ST pumps; and section II.B.1.2.1.2.3 for SVIL pumps.
B.1.2.1.2.1. For BB, ESCC, ESFM, IL, RSHES, RSHIL, RSV, and VT pumps, the default nominal full load motor efficiency is the minimum of the nominal full load motor efficiency standards (open or enclosed) from the table containing the current energy conservation standards for NEMA Design B motors at § 431.25, with the number of poles relevant to the speed at which the pump is being tested (see section I.C.1 of this appendix) and the motor horsepower determined in section II.B.1.2.1.1 of this appendix.
B.1.2.1.2.2. For ST pumps, prior to the compliance date of any energy conservation standards for submersible motors in subpart B of this part, the default nominal full load motor efficiency is the default nominal full load submersible motor efficiency listed in table 2 of this appendix, with the number of poles relevant to the speed at which the pump is being tested (see section I.C.1 of this appendix) and the motor horsepower determined in section II.B.1.2.1.1 of this appendix. Starting on the compliance date of any energy conservation standards for submersible motors in subpart B of this part, the default nominal full load motor efficiency shall be the minimum of any nominal full load motor efficiency standard from the table containing energy conservation standards for submersible motors in subpart B of this part, with the number of poles relevant to the speed at which the pump is being tested (see section I.C.1 of this appendix) and the motor horsepower determined in section II.B.1.2.1.1 of this appendix.
B.1.2.1.2.3. For SVIL pumps, the default nominal full load motor efficiency is the minimum full load motor efficiency standard from the tables containing the current energy conservation standards for polyphase or CSCR/CSIR small electric motors at § 431.446, with the number of poles relevant to the speed at which the pump is being tested (see section I.C.1 of this appendix) and the motor horsepower determined in section II.B.1.2.1.1 of this appendix, or for SVIL pumps sold with motors less than 0.25 hp, the default nominal full load motor efficiency is 58.3% for 6-pole, 64.6% for 4-pole, and 61.7% for 2-pole motors.
A.1 Bare pumps,
A.2 Pumps sold with drivers other than electric motors, and
A.3 BB, ESCC, ESFM, IL, RSHES, RSHIL, RSV, ST, and VT pumps sold with single-phase induction motors.
D.1. Adjust the flow by throttling the pump without changing the speed of rotation of the pump and conduct the test at a minimum of the following seven flow points: 40, 60, 75, 90, 100, 110, and 120 percent of the expected BEP flow rate of the pump at the nominal speed of rotation, as specified in Section 40.6.5.5.1 of HI 40.6-2021.
D.2. Determine the BEP flow rate as the flow rate at the operating point of maximum pump efficiency on the pump efficiency curve, as determined in accordance with Section 40.6.6.3 of HI 40.6-2021, where the pump efficiency is the ratio of the pump power output divided by the pump power input, as specified in Table 40.6.2 of HI 40.6-2021, disregarding the calculations provided in Section 40.6.6.2.
E.1.2.1.2 Determine the default nominal full load motor efficiency as described in section III.E.1.2.1.2.1 of this appendix for BB, ESCC, ESFM, IL, RSHES, RSHIL, RSV, and VT pumps; or section III.E.1.2.1.2.2. of this appendix for ST pumps.
E.1.2.1.2.1. For BB, ESCC, ESFM, IL, RSHES, RSHIL, RSV, and VT pumps, the default nominal full load motor efficiency is the minimum of the nominal full load motor efficiency standards (open or enclosed) from the table containing the current energy conservation standards for NEMA Design B motors at § 431.25, with the number of poles relevant to the speed at which the pump is being tested (see section I.C.1 of this appendix) and the motor horsepower determined in section III.E.1.2.1.1 of this appendix.
E.1.2.1.2.2. For ST pumps, prior to the compliance date of any energy conservation standards for submersible motors in subpart B of this part, the default nominal full load motor efficiency is the default nominal full load submersible motor efficiency listed in table 2 of this appendix, with the number of poles relevant to the speed at which the pump is being tested (see section I.C.1 of this appendix) and the motor horsepower determined in section III.E.1.2.1.1 of this appendix. Starting on the compliance date of any energy conservation standards for submersible motors in subpart B of this part, the default nominal full load motor efficiency is the minimum of any nominal full load motor efficiency standard from the table containing energy conservation standards for submersible motors in subpart B of this part, with the number of poles relevant to the speed at which the pump is being tested (see section I.C.1 of this appendix) and the motor horsepower determined in accordance with section III.E.1.2.1.1 of this appendix.
C.
D.
D.1. Adjust the flow by throttling the pump without changing the speed of rotation of the pump and conduct the test at a minimum of the following seven flow points: 40, 60, 75, 90, 100, 110, and 120 percent of the expected BEP flow rate of the pump at the nominal speed of rotation, as specified in Section 40.6.5.5.1 of HI 40.6-2021.
D.2. Determine the BEP flow rate as the flow rate at the operating point of maximum pump efficiency on the pump efficiency curve, as determined in accordance with Section 40.6.6.3 of HI 40.6-2021, where the pump efficiency is the ratio of the pump power output divided by the pump power input, as specified in Table 40.6.2 of HI 40.6-2021, disregarding the calculations provided in Section 40.6.6.2 of HI 40.6-2021.
A.
A.1 Pumps sold with motors subject to DOE's energy conservation standards for polyphase electric motors at § 431.25(g),
A.2 SVIL pumps sold with small electric motors regulated by DOE's energy conservation standards at § 431.446 or with SNEMs regulated by DOE's energy conservation standards in subpart B of this part but including motors of such varieties that are less than 0.25 hp, and
A.3. Pumps sold with submersible motors.
A.4. Pumps sold with motors not listed in sections V.A.1, V.A.2, or V.A.3 of this appendix cannot use this section V and must apply the test method in section IV of this appendix.
B.
C.
D.
D.1. Adjust the flow by throttling the pump without changing the speed of
D.2. Determine the BEP flow rate as the flow rate at the operating point of maximum pump efficiency on the pump efficiency curve, as determined in accordance with Section 40.6.6.3 of HI 40.6-2021, where the pump efficiency is the ratio of the pump power output divided by the pump power input, as specified in Table 40.6.2 of HI 40.6-2021, disregarding the calculations provided in Section 40.6.6.2.
E.1.1 Determine the pump power input at 75, 100, and 110 percent of the BEP flow rate by employing a least squares regression to determine a linear relationship between the pump power input at the nominal speed of rotation of the pump and the measured flow rate at the following load points: 60, 75, 90, 100, 110, and 120 percent of the expected BEP flow rate. Use the linear relationship to determine the pump power input at the nominal speed of rotation for the load points of 75, 100, and 110 percent of the BEP flow rate.
E.1.2.1.1 For pumps sold with motors other than submersible motors, determine the represented nominal full load motor efficiency as described in section V.E.1.2.1.1.1 of this appendix. For pumps sold with submersible motors, determine the default nominal full load submersible motor efficiency as described in section V.E.1.2.1.1.2 of this appendix.
E.1.2.1.1.1 For pumps sold with motors other than submersible motors, the represented nominal full load motor efficiency is that of the motor with which the given pump model is being tested, as determined in accordance with the DOE test procedure for electric motors at § 431.16 or, for SVIL, the DOE test procedure for small electric motors at § 431.444, or the DOE test procedure for SNEMs in subpart B to this part, as applicable (including for motors less than 0.25 hp), and if available, applicable representation procedures in 10 CFR part 429 and this part.
E.1.2.1.1.2 For pumps sold with submersible motors, prior to the compliance date of any energy conservation standards for submersible motors in subpart B of this part, the default nominal full load submersible motor efficiency is that listed in table 2 of this appendix, with the number of poles relevant to the speed at which the pump is being tested (see section I.C.1 of this appendix) and the motor horsepower of the pump being tested, or if a test procedure for submersible motors is provided in subpart B to this part, the represented nominal full load motor efficiency of the motor with which the given pump model is being tested, as determined in accordance with the applicable test procedure in subpart B to this part and applicable representation procedures in 10 CFR part 429 and this part, may be used instead. Starting on the compliance date of any energy conservation standards for submersible motors in subpart B of this part, the default nominal full load submersible motor efficiency may no longer be used. Instead, the represented nominal full load motor efficiency of the motor with which the given pump model is being tested, as determined in accordance with the applicable test procedure in subpart B of this part and applicable representation procedures in 10 CFR part 429 and this part, must be used.
B.
C.
D.
D.1. Adjust the flow by throttling the pump without changing the speed of rotation of the pump and conduct the test at a minimum of the following seven flow points: 40, 60, 75, 90, 100, 110, and 120 percent of the expected BEP flow rate of the pump at the nominal speed of rotation, as specified in Section 40.6.5.5.1 of HI 40.6-2021.
D.2. Determine the BEP flow rate as the flow rate at the operating point of maximum pump efficiency on the pump efficiency curve, as determined in accordance with Section 40.6.6.3 of HI 40.6-2021, where the pump efficiency is the ratio of the pump power output divided by the pump power input, as specified in Table 40.6.2 of HI 40.6-2021, disregarding the calculations provided in Section 40.6.6.2.
A.
A.1. Pumps sold with motors regulated by DOE's energy conservation standards for polyphase NEMA Design B electric motors at § 431.25(g) and continuous controls,
A.2 Pumps sold with inverter-only synchronous electric motors regulated by DOE's energy conservation standards in subpart B of this part,
A.3 SVIL pumps sold with small electric motors regulated by DOE's energy conservation standards at § 431.446 or with SNEMs regulated by DOE's energy conservation standards in subpart B of this part (but including motors of such varieties that are less than 0.25 hp) and continuous controls,
A.4. Pumps sold with submersible motors and continuous controls, and
A.5. Pumps sold with motors not listed in sections VII.A.1, VII.A.2, VII.A.3, and VII.A.4 of this appendix and pumps sold without continuous controls, including pumps sold with non-continuous controls, cannot use this section and must apply the test method in section VI of this appendix.
B.
C.
D.
D.1. Adjust the flow by throttling the pump without changing the speed of rotation of the pump and conduct the test at a minimum of the following seven flow points: 40, 60, 75, 90, 100, 110, and 120 percent of the expected BEP flow rate of the pump at the nominal speed of rotation, as specified in HI 40.6-2021, except Section 40.6.5.3, and appendix B.
D.2. Determine the BEP flow rate as the flow rate at the operating point of maximum pump efficiency on the pump efficiency curve, as determined in accordance with Section 40.6.6.3 of HI 40.6-2021, where the pump efficiency is the ratio of the pump power output divided by the pump power input, as specified in Table 40.6.2 of HI 40.6-2021, disregarding the calculations provided in Section 40.6.6.2.
E.1.2 * * *
E.1.2.1 Determine the full load motor losses using the appropriate motor efficiency value and horsepower as shown in the following equation:
E.1.2.1.1 For pumps sold with motors other than inverter-only synchronous electric motors or submersible motors, determine the represented nominal full load motor efficiency as described in section VII.E.1.2.1.1.1 of this appendix. For pumps sold with inverter-only synchronous electric motors, determine the represented nominal full load motor + inverter efficiency as described in section VII.E.1.2.1.1.2 of this appendix. For pumps sold with submersible motors, determine the default nominal full load submersible motor efficiency as described in section VII.E.1.2.1.1.3 of this appendix.
E.1.2.1.1.1 For pumps sold with motors other than inverter-only synchronous electric motors or submersible motors, the represented nominal full load motor efficiency is that of the motor with which the given pump model is being tested, as determined in accordance with the DOE test procedure for electric motors at § 431.16 or, for SVIL, the DOE test procedure for small electric motors at § 431.444 or the DOE test procedure for SNEMs in subpart B of this part, as applicable (including for motors less than 0.25 hp), and, if available, applicable representation procedures in 10 CFR part 429 and this part.
E.1.2.1.1.2 For pumps sold with inverter-only synchronous electric motors, the represented nominal full load motor + inverter efficiency is that of the motor with which the given pump model is being tested, as determined in accordance with any DOE test procedure for inverter-only synchronous electric motors in subpart B of this part, and, if available, applicable representation procedures in 10 CFR part 429 and this part.
E.1.2.1.1.3 For pumps sold with submersible motors, prior to the compliance date of any energy conservation standards for submersible motors in subpart B of this part, the default nominal full load submersible motor efficiency is that listed in table 2 of this appendix, with the number of poles relevant to the speed at which the pump is being tested (see section I.C.1 of this appendix) and the motor horsepower of the pump being tested, or if a test procedure for submersible motors is provided in subpart B of this part, the represented nominal full load motor efficiency of the motor with which the given pump model is being tested, as determined in accordance with the applicable test procedure in subpart B of this part and applicable representation procedures in 10 CFR part 429 and this part, may be used instead. Starting on the compliance date of any energy conservation standards for submersible motors in subpart B of this part, the default nominal full load submersible motor efficiency may no longer be used and instead the represented nominal full load motor efficiency of the motor with which the given pump model is being tested, as determined in accordance with the applicable test procedure in subpart B of this part and applicable representation procedures in 10 CFR part 429 and this part, must be used instead.
E.1.2.2 For load points corresponding to 25, 50, 75, and 100 percent of the BEP flow rate, determine the part load loss factor at each load point as follows:
Securities and Exchange Commission.
Proposed rule.
The Securities and Exchange Commission (“Commission”) is proposing for public comment amendments to its rules under the Securities Act of 1933 (“Securities Act”) and Securities Exchange Act of 1934 (“Exchange Act”) that would require registrants to provide certain climate-related information in their registration statements and annual reports. The proposed rules would require information about a registrant's climate-related risks that are reasonably likely to have a material impact on its business, results of operations, or financial condition. The required information about climate-related risks would also include disclosure of a registrant's greenhouse gas emissions, which have become a commonly used metric to assess a registrant's exposure to such risks. In addition, under the proposed rules, certain climate-related financial metrics would be required in a registrant's audited financial statements.
Comments should be received on or before May 20, 2022.
Comments may be submitted by any of the following methods:
• Use the Commission's internet comment form (
• Send an email to
• Send paper comments to Vanessa A. Countryman, Secretary, Securities and Exchange Commission, 100 F Street NE, Washington, DC 20549-1090.
All submissions should refer to File Number S7-10-22. This file number should be included on the subject line if email is used. To help the Commission process and review your comments more efficiently, please use only one method of submission. The Commission will post all comments on the Commission's website (
Studies, memoranda, or other substantive items may be added by the Commission or staff to the comment file during this rulemaking. A notification of the inclusion in the comment file of any such materials will be made available on our website. To ensure direct electronic receipt of such notifications, sign up through the “Stay Connected” option at
Elliot Staffin, Special Counsel, Office of Rulemaking, at (202) 551-3430, in the Division of Corporation Finance; or Anita H. Chan, Professional Accounting Fellow or Shehzad K. Niazi, Acting Deputy Chief Counsel, in the Office of the Chief Accountant, at (202) 551-5300, U.S. Securities and Exchange Commission, 100 F Street NE, Washington, DC 20549.
We are proposing to add 17 CFR 210.14-01 and 14-02 (Article 14 of Regulation S-X) and 17 CFR 17 CFR 229.1500 through 1506 (subpart 1500 of Regulation S-K) under the Securities Act
1. Requirements Limited to Only Certain Classes of Filers
2. Require Scenario Analysis
3. Require Specific External Protocol for GHG Emissions Disclosure
4. Permit GHG Emissions Disclosures To Be “Furnished” Instead of “Filed”
5. Do Not Require Scope 3 Emissions for Registrants With a Target or Goal Related to Scope 3
6. Exempt EGCs From Scope 3 Emissions Disclosure Requirements
7. Eliminate Exemption for SRCs From Scope 3 Reporting
8. Remove Safe Harbor for Scope 3 Emissions Disclosures
9. Require Large Accelerated Filers and Accelerated Filers To Provide a Management Assessment and To Obtain an Attestation Report Covering the Effectiveness of Controls Over GHG Emissions Disclosures
10. Require Reasonable Assurance for Scopes 1 and 2 Emissions Disclosures From All Registrants
11. Require Limited, Not Reasonable, Assurance for Large Accelerated Filers and/or Accelerated Filers and/or Other Filers
12. In Lieu of Requiring Assurance, Require Disclosure About Any Assurance Obtained Over GHG Emissions Disclosures
13. Permit Host Country Disclosure Frameworks
14. Alternative Tagging Requirements
We are proposing to require registrants to provide certain climate-related information in their registration statements and annual reports, including certain information about climate-related financial risks and climate-related financial metrics in their financial statements. The disclosure of this information would provide consistent, comparable, and reliable—and therefore decision-useful—information to investors to enable them to make informed judgments about the impact of climate-related risks on current and potential investments.
The Commission has broad authority to promulgate disclosure requirements that are “necessary or appropriate in the public interest or for the protection of investors.”
We are proposing to require disclosures about climate-related risks and metrics reflecting those risks because this information can have an impact on public companies' financial performance or position and may be material to investors in making investment or voting decisions. For this reason, many investors—including shareholders, investment advisers, and investment management companies—currently seek information about climate-related risks from companies to inform their investment decision-making. Furthermore, many companies have begun to provide some of this information in response to investor demand and in recognition of the potential financial effects of climate-related risks on their businesses.
We are concerned that the existing disclosures of climate-related risks do not adequately protect investors. For this reason, we believe that additional disclosure requirements may be necessary or appropriate to elicit climate-related disclosures and to improve the consistency, comparability, and reliability of climate-related disclosures. With respect to their existing climate-related disclosures (to the extent registrants are already disclosing such information), registrants often provide information outside of Commission filings and provide different information, in varying degrees of completeness, and in different documents and formats—meaning that the same information may not be available to investors across different companies. This could result in increased costs to investors in obtaining useful climate-related information and impair the ability to make investment or voting decisions in line with investors' risk preferences. Also, companies may not disclose certain information needed to understand their existing climate-related disclosures, such as the methodologies, data sources, assumptions, and other key parameters used to assess climate-related risks. To the extent companies primarily provide this information separate from their financial reporting, it may be difficult for investors to determine whether a company's financial disclosures are consistent with its climate-related disclosures.
Investors need information about climate-related risks—and it is squarely within the Commission's authority to require such disclosure in the public interest and for the protection of investors—because climate-related risks have present financial consequences that investors in public
While climate-related risks implicate broader concerns—and are subject to various other regulatory schemes—our objective is to advance the Commission's mission to protect investors, maintain fair, orderly and efficient markets, and promote capital formation, not to address climate-related issues more generally. In particular, the impact of climate-related risks on both individual businesses and the financial system as a whole are well documented.
Climate-related risks can affect a company's business and its financial performance and position in a number of ways. Severe and frequent natural disasters can damage assets, disrupt operations, and increase costs.
Consistent, comparable, and reliable disclosures on the material climate-related risks public companies face would serve both investors and capital markets. Investors would be able to use this information to make investment or voting decisions in line with their risk preferences. Capital allocation would become more efficient as investors are better able to price climate-related risks. In addition, more transparency and comparability in climate-related disclosures would foster competition. Many other jurisdictions and financial regulators around the globe have taken action or reached similar conclusions regarding the importance of climate-related disclosures and are also moving towards the adoption of climate-related disclosure standards.
This proposal builds on the Commission's previous rules and guidance on climate-related disclosures, which date back to the 1970s. In 2010, in response to increasing calls by the public and shareholders for public companies to disclose information regarding how climate change may affect their business and operations, the Commission published guidance (“2010 Guidance”) for registrants on how the Commission's existing disclosure rules may require disclosure of the impacts of climate change on a registrant's business or financial condition.
In developing these proposals, we have considered the feedback we have received to date from a wide range of commenters, including comments from investors as to the information they need to make informed investment or voting decisions, as well as concerns expressed by registrants with regard to compliance burdens and liability risk.
Although the various requirements we are proposing are supported by overlapping rationales, we emphasize that the different aspects of the proposal serve independent, albeit complementary, objectives. In addition, we have carefully considered how to craft this proposal to best advance investor protection and the public interest, consistent with the Commission's disclosure authority and regulatory mission, and we welcome comments on how we can further achieve that goal.
The Commission first addressed the disclosure of material environmental issues in the early 1970s when it issued an interpretive release stating that registrants should consider disclosing in their SEC filings the financial impact of
After almost a decade of consideration, the Commission adopted rules in 1982 mandating disclosure of information relating to litigation and other business costs arising out of compliance with federal, state, and local laws that regulate the discharge of materials into the environment or otherwise relate to the protection of the environment.
In its 2010 Guidance, the Commission observed that, in response to investor demand for climate-related information, many companies were voluntarily reporting climate-related information outside their filings with the Commission. The Commission emphasized that “registrants should be aware that some of the information they may be reporting pursuant to these mechanisms also may be required to be disclosed in filings made with the Commission pursuant to existing disclosure requirements.”
The proposals set forth in this release would augment and supplement the disclosures already required in SEC filings. Accordingly, registrants should continue to evaluate the climate-related risks they face and assess whether disclosures related to those climate-related risks must be disclosed in their Description of Business, Risk Factors, Legal Proceedings, and MD&A as described in the 2010 Guidance. These disclosures should be based on the registrant's specific facts and circumstances. While climate risks impact many issuers across industries, the impacts of those risks on a particular registrant and how the registrant addresses those risks are fact-specific and may vary significantly by registrant.
On March 15, 2021, Acting Chair Allison Herren Lee requested public input on climate disclosure from investors, registrants, and other market participants.
The Commission received approximately 600 unique letters and over 5800 form letters in response to the Acting Chair's request for public input.
Many of these commenters, including investors with trillions of dollars of assets under management collectively,
Other commenters, however, questioned whether climate change posed a risk to companies or their investors. These commenters stated their belief that the assumptions underlying the assessment of the impact of climate change were too uncertain to permit companies to ascertain the real risks to their operations and financial condition caused by climate change.
As noted above, we have considered these comments and other feedback received from the public in formulating the current proposal. As part of its filing review process, the Commission staff also assessed the extent to which registrants currently disclose climate-related risks in their Commission filings. Since 2010, disclosures related to climate change have generally increased, but there is considerable variation in the content, detail, and location (
We are also mindful of the benefits to investors of requiring climate-related information in SEC filings. Providing more extensive climate-related disclosure in sustainability reports, while excluding such relevant information from Forms 10-K, may make it difficult for investors to analyze and compare how climate-related risks and impacts affect registrants' businesses and consolidated financial statements. The inclusion of climate-related disclosures in SEC filings should increase the consistency, comparability, and reliability of climate-related information for investors. The placement of climate-related information in different locations can make it difficult for investors to find comparable climate-related disclosures, whereas inclusion in a registrant's Form 10-K or registration statement should make it easier for investors to find and compare this information.
Having considered the public feedback and the staff's experience with climate-related disclosures, we believe that the current disclosure system is not eliciting consistent, comparable, and reliable information that enables investors both to assess accurately the potential impacts of climate-related risks on the nature of a registrant's business and to gauge how a registrant's board and management are assessing and addressing those impacts.
We also believe that enhanced climate disclosure requirements could increase confidence in the capital markets and help promote efficient valuation of securities and capital formation by requiring more consistent, comparable, and reliable disclosure about climate-related risks, including how those risks are likely to impact a registrant's business operations and financial performance.
As the Commission recognized in 2010 and earlier, there has been significant investor demand for information about how climate conditions may impact their investments. That demand has been increasing in recent years. Several major institutional investors, which collectively have trillions of dollars in investments under management, have demanded climate-related information from the companies in which they invest because of their assessment of climate change as a risk to their portfolios, and to investments generally, and also to satisfy investor interest in investments that are considered “sustainable.” As a result, these investors have sought to include and consider climate risk as part of their investment selection process.
• In 2019, more than 630 investors collectively managing more than $37 trillion signed the Global Investor Statement to Governments on Climate Change urging governments to require climate-related financial reporting;
• This investor initiative continued as the Investor Agenda's 2021 Global Investor Statement to Governments on the Climate Crisis, which was signed by 733 global institutional investors, including some of the largest investors, with more than US $52 trillion in assets under management in the aggregate. This Statement called for governments to implement a number of measures, including mandating climate risk disclosure.
• The UN Principles for Responsible Investment (“PRI”)
• The Net Zero Asset Managers Initiative, which was formed by an international group of asset managers, has 128 signatories that collectively
• The Climate Action 100+, an investor-led initiative, now comprises 617 global investors that together have more than $60 trillion in assets under management;
• The Glasgow Financial Alliance for Net Zero (“GFANZ”), a coalition of over 450 financial firms from 45 countries, responsible for assets of over $130 trillion, that are committed to achieving net-zero emissions by 2050, reaching 2030 interim targets, covering all emission scopes and providing transparent climate-related reporting.
Each of these investor initiatives has emphasized the need for improved disclosure by companies regarding climate-related impacts. Each of these initiatives has advocated for mandatory climate risk disclosure requirements aligned with the recommendations of the Task Force on Climate-Related Financial Disclosures (“TCFD”)
At the same time, many companies have made commitments with respect to climate change, such as commitments to reduce greenhouse gas emissions or become “net zero” by a particular date.
These initiatives demonstrate that investors are using information about climate risks now as part of their investment selection process and are seeking more informative disclosures about those risks. As an increasing number of investors incorporate this information, in particular GHG emissions, into their investment selection or voting decisions, this may in turn create transition risks for companies that are seeking to raise capital.
Despite increasing investor demand for information about climate-related risks and strategies, many investors maintain that they cannot obtain the consistent, comparable, and material information that they need to properly inform their investment or voting decisions.
In addition, a diverse group of third parties has developed climate-related reporting frameworks seeking to meet investors' informational demands. These include the Global Reporting Initiative (“GRI”),
To some extent, the development of these disparate frameworks has led to an increase in the number of companies that are providing some climate-related disclosures.
The staff has reviewed more than a dozen studies of climate-related disclosures conducted by third parties, such as the CDP,
The increased fragmentation of climate reporting resulting from the proliferation of third-party reporting frameworks has motivated a number of recent international efforts to obtain more consistent, comparable, and reliable climate-related information for investors. For example:
• A consultation paper published by the IFRS Foundation
• Based on the response to the IFRS Foundation consultation paper, the IFRS Foundation took steps toward the establishment of an International Sustainability Standards Board (“ISSB”) operating within the existing governance structure of the IFRS Foundation;
• In 2021, following two roundtables hosted by its Sustainable Finance Task Force, IOSCO
• A Technical Experts' Group of IOSCO worked with a Technical Readiness Working Group of the IFRS Foundation to assess and fine-tune a prototype climate-related financial disclosure standard (“Prototype”) drafted by an alliance of prominent sustainability reporting organizations and designed as a potential model for
• In November 2021, the IFRS Foundation announced the formation of the ISSB.
• Several jurisdictions, including the European Union,
These international developments show an increasing global recognition of the need to improve companies' climate-related disclosures, which the proposed rules would help address, as well as the convergence of investors and issuers around the TCFD as a useful framework for communicating information about climate-related risks that companies may face.
In recent years, two significant developments have occurred that support and inform the Commission's proposed climate-related reporting rules. The first involves the TCFD, which has developed a climate-related reporting framework that has become widely accepted by both registrants and investors.
Our proposed climate-related disclosure framework is modeled in part on the TCFD's recommendations. A goal of the proposed rules is to elicit climate-related disclosures that are consistent, comparable, and reliable while also attempting to limit the compliance burden associated with these disclosures. The TCFD framework has been widely accepted by issuers, investors, and other market participants, and, accordingly, we believe that proposing rules based on the TCFD framework may facilitate achieving this balance between eliciting better disclosure and limiting compliance costs.
In April 2015, the Group of 20 Finance Ministers directed the Financial Stability Board (“FSB”) to evaluate ways in which the financial sector could address climate-related concerns.
In 2017, the TCFD published disclosure recommendations that provide a framework by which to evaluate material climate-related risks and opportunities through an assessment of their projected short-, medium-, and long-term financial impacts on a registrant. The TCFD framework establishes eleven disclosure topics related to four core themes that provide a structure for the assessment, management, and disclosure of climate-related financial risks: Governance, strategy, risk management, and metrics and targets.
Support for the TCFD's recommendations by companies and other reporting frameworks has grown steadily since the TCFD's formation.
Quantitative greenhouse gas (“GHG”) emissions data can enable investors to assess a registrant's exposure to climate-related risks, including regulatory, technological, and market risks driven by a transition to a lower-GHG intensive economy.
The GHG Protocol was created through a partnership between the World Resources Institute and the World Business Council for Sustainable Development, which agreed in 1997 to collaborate with businesses and NGOs to create a standardized GHG accounting methodology.
The GHG Protocol's Corporate Accounting and Reporting Standard provides uniform methods to measure and report the seven greenhouse gasses covered by the Kyoto Protocol—carbon dioxide, methane, nitrous oxide, hydrofluorocarbons, perfluorocarbons, sulfur hexafluoride, and nitrogen trifluoride.
We have based our proposed GHG emissions disclosure requirement primarily on the GHG Protocol's concept of scopes and related methodology.
We are proposing to add a new subpart to Regulation S-K, 17 CFR 229.1500-1507 (“Subpart 1500 of Regulation S-K”) that would require a registrant to disclose certain climate-related information, including information about its climate-related risks that are reasonably likely to have material impacts on its business or consolidated financial statements, and GHG emissions metrics that could help investors assess those risks.
We are also proposing to add a new article to Regulation S-X, 17 CFR 210.14-01 and 02 (“Article 14 of Regulation S-X”) that would require certain climate-related financial statement metrics and related disclosure to be included in a note to a registrant's audited financial statements.
The proposed climate-related disclosure framework is modeled in part on the TCFD's recommendations, and also draws upon the GHG Protocol. In particular, the proposed rules would require a registrant to disclose information about:
• The oversight and governance of climate-related risks by the registrant's board and management;
• How any climate-related risks identified by the registrant have had or are likely to have a material impact on its business and consolidated financial statements, which may manifest over the short-, medium-, or long-term;
• How any identified climate-related risks have affected or are likely to affect the registrant's strategy, business model, and outlook;
• The registrant's processes for identifying, assessing, and managing climate-related risks and whether any such processes are integrated into the registrant's overall risk management system or processes;
• The impact of climate-related events (severe weather events and other natural conditions as well as physical risks identified by the registrant) and transition activities (including transition risks identified by the registrant) on the line items of a registrant's consolidated financial statements and related expenditures,
• Scopes 1 and 2 GHG emissions metrics, separately disclosed, expressed:
○ Both by disaggregated constituent greenhouse gases and in the aggregate, and
○ In absolute and intensity terms;
• Scope 3 GHG emissions and intensity, if material, or if the registrant has set a GHG emissions reduction target or goal that includes its Scope 3 emissions; and
• The registrant's climate-related targets or goals, and transition plan, if any.
When responding to any of the proposed rules' provisions concerning governance, strategy, and risk management, a registrant may also disclose information concerning any identified climate-related opportunities.
The proposed rules would require a registrant (both domestic and foreign private issuers):
• To provide the climate-related disclosure in its registration statements and Exchange Act annual reports;
• To provide the Regulation S-K mandated climate-related disclosure in a separate, appropriately captioned section of its registration statement or annual report, or alternatively to incorporate that information in the separate, appropriately captioned section by reference from another section, such as Risk Factors, Description of Business, or Management's Discussion and Analysis (“MD&A”);
• To provide the Regulation S-X mandated climate-related financial statement metrics and related disclosure in a note to the registrant's audited financial statements;
• To electronically tag both narrative and quantitative climate-related disclosures in Inline XBRL;
• To file rather than furnish the climate-related disclosure.
The proposed rules would require an accelerated filer or a large accelerated filer to include, in the relevant filing, an attestation report covering, at a minimum, the disclosure of its Scope 1 and Scope 2 emissions and to provide certain related disclosures about the service provider.
The proposed rules would include:
• A phase-in for all registrants, with the compliance date dependent on the registrant's filer status;
• An additional phase-in period for Scope 3 emissions disclosure;
• A safe harbor for Scope 3 emissions disclosure;
• An exemption from the Scope 3 emissions disclosure requirement for a registrant meeting the definition of a smaller reporting company (“SRC”);
• A provision permitting a registrant, if actual reported data is not reasonably available, to use a reasonable estimate of its GHG emissions for its fourth fiscal quarter, together with actual, determined GHG emissions data for the first three fiscal quarters, as long as the registrant promptly discloses in a subsequent filing any material difference between the estimate used and the actual, determined GHG emissions data for the fourth fiscal quarter.
The proposed rules would be phased in for all registrants, with the compliance date dependent upon the status of the registrant as a large accelerated filer, accelerated or non-accelerated filer, or SRC, and the content of the item of disclosure. For example, assuming that the effective date of the proposed rules occurs in December 2022 and that the registrant has a December 31st fiscal year-end, the compliance date for the proposed disclosures in annual reports, other than the Scope 3 disclosure, would be:
• For large accelerated filers, fiscal year 2023 (filed in 2024);
• For accelerated and non-accelerated filers, fiscal year 2024 (filed in 2025); and
• For SRCs, fiscal year 2025 (filed in 2026).
Registrants subject to the proposed Scope 3 disclosure requirements would have one additional year to comply with those disclosure requirements.
We welcome feedback and encourage interested parties to submit comments on any or all aspects of the proposed rules. When commenting, it would be most helpful if you include the reasoning behind your position or recommendation.
We have modeled the proposed disclosure rules in part on the TCFD disclosure framework. Building on the TCFD framework should enable companies to leverage the framework with which many investors and issuers are already familiar, which should help to mitigate both the compliance burden for issuers and any burdens faced by investors in analyzing and comparing the new proposed disclosures.
Many commenters that supported climate disclosure rules recommended that we consider the TCFD framework in developing those rules. Numerous commenters stated that the Commission should base its climate-related disclosure rules on the TCFD framework either as a standalone framework,
Commenters provided several reasons for their support of the TCFD framework. First, commenters indicated that, because of the widespread adoption of the framework, issuers and investors have experience making and using TCFD disclosures. As a result, according to commenters, aligning SEC rules with the TCFD could reduce the burden on issuers and increase the consistency and comparability of climate disclosures.
The consistency and breadth of these comments comport with our understanding that the TCFD framework has been widely accepted by issuers, investors, and other market participants and reinforce our view that the framework would provide an appropriate foundation for the proposed amendments.
Similar to the TCFD framework, the proposed climate-related provisions under Regulation S-K would require disclosure of a registrant's: Governance of climate-related risks;
The proposed climate-related provisions under Regulation S-X would require a registrant to disclose in a note to its financial statements certain disaggregated climate-related financial statement metrics that are mainly derived from existing financial statement line items.
Many commenters stated that the Commission should amend Regulation S-K or Regulation S-X to include climate-related disclosure requirements.
Specifically, we are proposing to require a registrant to include climate-related disclosure in Securities Act or Exchange Act registration statements and Exchange Act annual reports in a separately captioned “Climate-Related Disclosure” section and in the financial statements.
A registrant would be able to incorporate by reference disclosure from other parts of the registration statement or annual report (
Many commenters stated that the Commission should require registrants to discuss and analyze their quantitative climate data in a manner similar to that required for MD&A.
1. Should we add a new subpart to Regulation S-K and a new article to Regulation S-X that would require a registrant to disclose certain climate-related information, as proposed? Would including the climate-related disclosure in Regulation S-K and Regulation S-X facilitate the presentation of climate information as part of a registrant's regular business reporting? Should we instead place the climate-related disclosure requirements in a new regulation or report? Are there certain proposed provisions, such as GHG emissions disclosure requirements, that would be more appropriate under Regulation S-X than Regulation S-K?
2. If adopted, how will investors utilize the disclosures contemplated in this release to assess climate-related risks? How will investors use the information to assess the physical effects and related financial impacts from climate-related events? How will investors use the information to assess risks associated with a transition to a lower carbon economy?
3. Should we model the Commission's climate-related disclosure framework in part on the framework recommended by the TCFD, as proposed? Would alignment with the TCFD help elicit climate-related disclosures that are consistent, comparable, and reliable for investors? Would alignment with the TCFD framework help mitigate the reporting burden for issuers and facilitate understanding of climate-related information by investors because the framework is widely used by companies in the United States and around the world? Are there aspects of the TCFD framework that we should not adopt? Should we instead adopt rules that are based on a different third-party framework? If so, which framework? Should we base the rules on something other than an existing third-party framework?
4. Do our current reporting requirements yield adequate and sufficient information regarding climate-related risks to allow investors to make informed decisions? In lieu of, or in addition to the proposed amendments, should we provide updated guidance on how our existing rules may elicit better disclosure about climate-related risks?
5. Should we require a registrant to present the climate-related disclosure in an appropriately captioned, separate part of the registration statement or annual report, as proposed? Should this disclosure instead be presented as part of the registrant's MD&A?
6. Should we permit a registrant to incorporate by reference some of the
7. Should we permit a registrant to provide certain of the proposed climate-related disclosures in Commission filings other than the annual report or registration statement? For example, should we permit a registrant to provide information about board and management oversight of climate-related risks in its proxy statement?
As many commenters have noted when seeking more detailed climate-related disclosures,
In addition to the physical risks associated with the climate, issuers and investors may also face risks associated with a potential transition to a less carbon intensive economy. These risks may arise from potential adoption of climate-related regulatory policies including those that may be necessary to achieve the national climate goals that may be or have been adopted in the United States and other countries;
A central focus of the Commission's proposed rules is the identification and disclosure of a registrant's material climate-related risks. The proposed rules would require a registrant to disclose any climate-related risks reasonably likely to have a material impact on the registrant's business or consolidated financial statements.
As proposed, “climate-related risks” means the actual or potential negative impacts of climate-related conditions and events on a registrant's consolidated financial statements, business operations, or value chains, as a whole.
Climate-related conditions and events can present risks related to the physical impacts of the climate (“physical risks”) and risks related to a potential transition to a lower carbon economy (“transition risks”). As proposed, “physical risks” is defined to include both acute and chronic risks to a registrant's business operations or the operations of those with whom it does business.
The proposed rules would require a registrant to specify whether an identified climate-related risk is a physical or transition risk so that investors can better understand the nature of the risk
The proposed rules would require a registrant to include in its description of an identified physical risk the location of the properties, processes, or operations subject to the physical risk.
Some registrants might be exposed to water-related acute physical risks, such as flooding, which could impair a registrant's operations or devalue its property. If flooding presents a material physical risk, the proposed rules would require a registrant to disclose the percentage of buildings, plants, or properties (square meters or acres) that are located in flood hazard areas in addition to their location.
Additional disclosure would be required if a material risk concerns the location of assets in regions of high or extremely high water stress.
Any increased temperatures could also materially impact a registrant in other ways. For example, a registrant in the construction industry might be required to disclose the physical risk of increased heat waves that affect the
The proposed rules would require a registrant to describe the nature of transition risks, including whether they relate to regulatory, technological, market (including changing consumer, business counterparty, and investor preferences), liability, reputational, or other transition-related factors, and how those factors impact the registrant.
Climate related conditions and any transition to a lower carbon economy may also present opportunities for companies and investors. The proposed rules would define “climate-related opportunities” to mean the actual or potential positive impacts of climate-related conditions and events on a registrant's consolidated financial statements, business operations, or value chains, as a whole.
The proposed rules would require a registrant to disclose whether any climate-related risk is reasonably likely to have a material impact on a registrant, including its business or consolidated financial statements, which may manifest over the short, medium, and long term.
As proposed, a registrant would be required to describe how it defines short-, medium-, and long-term time horizons, including how it takes into account or reassesses the expected useful life of the registrant's assets and the time horizons for the registrant's planning processes and goals. We have not proposed a specific range of years to define short-, medium-, and long-term time horizons in order to allow flexibility for a registrant to select the time horizons that are most appropriate to its particular circumstances.
As defined by the Commission and consistent with Supreme Court precedent, a matter is material if there is a substantial likelihood that a reasonable investor would consider it important when determining whether to buy or sell securities or how to vote.
The materiality determination that a registrant would be required to make regarding climate-related risks under the proposed rules is similar to what is required when preparing the MD&A section in a registration statement or annual report. The Commission's rules require a registrant to disclose material events and uncertainties known to management that are reasonably likely to cause reported financial information not to be necessarily indicative of future operating results or of future financial condition.
The proposed rule serves to emphasize that, when assessing the materiality of a particular risk, management should consider its magnitude and probability over the short, medium, and long term. In the context of climate, the magnitude and probability of such risks vary and can be significant over such time periods. For example, wildfires in California, which recently have become more frequent and more intense, may be a material risk for wineries, farmers, and other property owners.
To help ensure that management considers the dynamic nature of climate-related risks, we are proposing to require a registrant to discuss its assessment of the materiality of climate-related risks over the short, medium, and long term. We recognize that determining the likely future impacts on a registrant's business may be difficult for some registrants. Commenters have noted that the science of climate modelling has progressed in recent years and enabled the development of various software tools and that climate consulting firms are available to assist registrants in making this determination.
8. Should we require a registrant to disclose any climate-related risks that are reasonably likely to have a material impact on the registrant, including on its business or consolidated financial statements, which may manifest over the short, medium, and long term, as proposed? If so, should we specify a particular time period, or minimum or maximum range of years, for “short,” “medium,” and “long term?” For example, should we define short term as 1 year, 1-3 years, or 1-5 years? Should we define medium term as 5-10 years, 5-15 years, or 5-20 years? Should we define long-term as 10-20 years, 20-30 years, or 30-50 years? Are there other possible years or ranges of years that we should consider as the definitions of short, medium, and long term? What, if any, are the benefits to leaving those terms undefined? What, if any, are the concerns to leaving those terms undefined? Would the proposed provision requiring a registrant to specify what it means by the short, medium, and long term mitigate any such concerns?
9. Should we define “climate-related risks” to mean the actual or potential negative impacts of climate-related conditions and events on a registrant's consolidated financial statements, business operations, or value chains, as proposed? Should we define climate-related risks to include both physical and transition risks, as proposed? Should we define physical risks to include both acute and chronic risks and define each of those risks, as proposed? Should we define transition risks, as proposed? Are there any aspects of the definitions of climate-related risks, physical risks, acute risks, chronic risks, and transition risks that we should revise? Are there other distinctions among types of climate-related risks that we should use in our definitions? Are there any risks that we should add to the definition of transition risk? How should we address risks that may involve both physical and transition risks?
10. We define transition risks to include legal liability, litigation, or reputational risks. Should we provide more examples about these types of risks? Should we require more specific disclosures about how a registrant assesses and manages material legal liability, litigation, or reputational risks that may arise from a registrant's business operations, climate mitigation efforts, or transition activities?
11. Some chronic risks might give rise to acute risks,
12. For the location of its business operations, properties or processes subject to an identified material physical risk, should we require a registrant to provide the ZIP code of the location or, if located in a jurisdiction that does not use ZIP codes, a similar subnational postal zone or geographic location, as proposed? Is there another location identifier that we should use for all registrants, such as the county, province, municipality or other subnational jurisdiction? Would requiring granular location information, such as ZIP codes, present concerns about competitive harm or the physical security of assets? If so, how can we mitigate those concerns? Are there exceptions or exemptions to a granular location disclosure requirement that we should consider?
13. If a registrant determines that the flooding of its buildings, plants, or properties is a material risk, should we require it to disclose the percentage of those assets that are in flood hazard areas in addition to their location, as proposed? Would such disclosure help investors evaluate the registrant's exposure to physical risks related to floods? Should we require this disclosure from all registrants, including those that do not currently consider exposure to flooding to be a material physical risk? Should we require this disclosure from all registrants operating in certain industrial sectors and, if so, which sectors? Should we define “flood hazard area” or provide examples of such areas? If we should define the term, should we define it similar to a related definition by the Federal Emergency Management Agency (“FEMA”) as an area having flood, mudflow or flood-related erosion hazards, as depicted on a flood hazard boundary map or a flood insurance rate map? Should we require a registrant to disclose how it has defined “flood hazard area” or whether it has used particular maps or software tools when determining whether its buildings, plants, or properties are located in flood hazard areas? Should we recommend that certain maps be used to promote comparability? Should we require disclosure of whether a registrant's assets are located in zones that are subject to other physical risks, such as in locations subject to wildfire risk?
14. If a material risk concerns the location of assets in regions of high or extremely high water stress, should we require a registrant to quantify the assets (
15. Are there other specific metrics that would provide investors with a better understanding of the physical and transition risks facing registrants? How would investors benefit from the disclosure of any additional metrics that would not necessarily be disclosed or disclosed in a consistent manner by the proposed climate risk disclosures? What, if any, additional burdens would registrants face if they were required to disclose additional climate risk metrics?
16. Are there other areas that should be included as examples in the definitions of acute or chronic risks? If so, for each example, please explain how the particular climate-related risk could materially impact a registrant's operations or financial condition.
17. Should we include the negative impacts on a registrant's value chain in the definition of climate-related risks, as proposed? Should we define “value chain” to mean the upstream and downstream activities related to a registrant's operations, as proposed? Are there any upstream or downstream activities included in the proposed definition of value chain that we should exclude or revise? Are there any upstream or downstream activities that we should add to the definition of value chain? Are there any upstream or downstream activities currently proposed that should not be included?
18. Should we define climate-related opportunities as proposed? Should we permit a registrant, at its option, to disclose information about any climate-related opportunities that it is pursuing, such as the actual or potential impacts of those opportunities on the registrant, including its business or consolidated financial statements, as proposed? Should we specifically require a registrant to provide disclosure about any climate-related opportunities that have materially impacted or are reasonably likely to impact materially the registrant, including its business or consolidated financial statements? Is there a risk that the disclosure of climate-related opportunities could be misleading and lead to “greenwashing”? If so, how should this risk be addressed?
Once a registrant has described the climate-related risks reasonably likely to have a material impact on the registrant's business or consolidated financial statements as manifested over the short, medium, and long term as required by proposed Item 1502(a), proposed Item 1502(b) would require the registrant to describe the actual and potential impacts of those risks on its strategy, business model, and outlook.
As proposed, a registrant would be required to disclose impacts on its:
• Business operations, including the types and locations of its operations;
• Products or services;
• Suppliers and other parties in its value chain;
• Activities to mitigate or adapt to climate-related risks, including adoption of new technologies or processes;
• Expenditure for research and development; and
• Any other significant changes or impacts.
A registrant would also be required to disclose the time horizon for each described impact (
The proposed rules would require a registrant to discuss how it has considered the identified impacts as part of its business strategy, financial planning, and capital allocation.
For example, a registrant that operates in a jurisdiction that has imposed or is likely to impose limits on GHG emissions in support of the Paris Agreement might set a long-term target of net zero GHG emissions from its operations in 2050, a medium-term target of reducing its emissions by 30 percent by 2030, and a short-term target of maintaining its emissions at its 2020 rate through 2023. This registrant could face material transition risks due to the estimated costs of the operational changes expected to be implemented to achieve these targets. The registrant would be required to disclose these transition risks and their impacts on its strategy, business model, and outlook.
Some of the described impacts would likely be common across industries and may involve reducing a registrant's Scopes 1 and 2 GHG emissions
A registrant would also be required to disclose the material impacts of physical risks on its strategy, business model, and outlook. For example, an agricultural producer or distributor might disclose the likely impacts of drought on its own product mix or that of its suppliers, including increased expenses for additional water or due to the procurement of alternative product sources. Similarly, a mining company that operates in areas susceptible to extreme rise in temperatures might disclose the likely impacts that this temperature rise has on its workforce and on its production schedule, including a reduction in output and future earning capacity. A real estate company that owns coastal property might disclose the likely impacts of rising sea levels on such property, including the potential diminution in value of, and a potential change in its strategy and outlook regarding, such properties.
The proposed rules would require a registrant to provide a narrative discussion of whether and how any of its identified climate-related risks described in response to proposed Item 1502(a) have affected or are reasonably likely to affect the registrant's consolidated financial statements.
For example, an automobile manufacturer might discuss an increase in operating costs or capital expenditures due to the need to revamp its assembly lines to build lower emission vehicles to comply with new regulatory guidelines or to meet changing consumer demand. An oil company might discuss a change in the valuation of its proven reserves because of an anticipated reduced demand for fossil fuels. A freight company might discuss impairment charges or early write-offs for older equipment it might need to replace due to anticipated changes in regulation or policy favoring lower emissions equipment. While a registrant may currently have an obligation to make some of these disclosures pursuant to Regulation S-X, the disclosed impacts in the financial statements may not be in disaggregated form and may lack explanation. Proposed Item 1502(d) would require the disclosure in the form of a narrative analysis akin to MD&A that would be more easily accessible for investors.
Moreover, it is likely that any disclosed impacts in the financial statements would be assessed for the fiscal years presented in the financial statements with a focus on near short-term impacts. Because proposed Item 1502 would require a registrant to identify material climate-related impacts that may manifest in the short, medium, and long term, a registrant's narrative discussion of the likely climate-related impacts on its consolidated financial statements
If, as part of its net emissions reduction strategy, a registrant uses carbon offsets or renewable energy credits or certificates (“RECs”), the proposed rules would require it to disclose the role that carbon offsets or RECs play in the registrant's climate-related business strategy.
Some registrants might plan to use carbon offsets or RECs as their primary means of meeting their GHG reduction goals, including those formulated in response to government law or policy or customer or investor demands. Other registrants, including those that set Science Based Targets pursuant to the Science Based Targets Initiative,
Understanding the role that carbon offsets or RECs play in a registrant's climate-related business strategy can help investors gain useful information about the registrant's strategy, including the potential risks and financial impacts. A registrant that relies on carbon offsets or RECs to meet its goals might incur lower expenses in the short term but could expect to continue to incur the expense of purchasing offsets or RECs over the long term. It also could bear the risk of increased costs of offsets or RECs if increased demand for offsets or RECs creates scarcity and higher costs to acquire them over time. Alternatively, the value of an offset may decrease substantially and suddenly if, for example, the offset represents protected forest land that burns in a wildfire and no longer represents a reduction in GHG emissions. In that case, the registrant may need to write off the offset and purchase a replacement. In other cases, increased demand for, or scarcity of, offsets and RECs may benefit a registrant that produces or generates offsets or RECs to the extent their prices increase. Accordingly, under the proposed rules, a registrant that purchases offsets or RECs to meet its goals as it makes the transition to lower carbon products would need to reflect this additional set of short and long-term costs and risks in its Item 1502 disclosure, including the risk that the availability or value of offsets or RECs might be curtailed by regulation or changes in the market.
Some registrants may use an internal carbon price when assessing climate-related factors. Under the proposed definition, an internal carbon price is an estimated cost of carbon emissions used internally within an organization.
• The price in units of the registrant's reporting currency per metric ton of carbon dioxide equivalent (“CO
• The total price, including how the total price is estimated to change over time, if applicable;
• The boundaries for measurement of overall CO
• The rationale for selecting the internal carbon price applied.
These proposed items of disclosure would help investors understand the rationale and underlying assumptions for a registrant's internal carbon price and help them assess whether the registrant's use of an internal carbon price as a planning tool is reasonable and effective.
A registrant would also be required to describe how it uses its disclosed internal carbon price to evaluate and
Commenters that addressed the topic of carbon price generally supported requiring its disclosure in some form, such as: (i) Establishing a broad-based carbon price; (ii) requiring companies to maintain and disclose an internal carbon price; (iii) requiring disclosure of any internal carbon price already used by a company; or (iv) requiring disclosure of carbon prices used in the context of scenario analysis.
Registrants may choose to use an internal carbon price when quantifying, analyzing, and assessing the financial impacts of climate-related risks and climate-related opportunities. For example, an internal carbon price helps monetize emissions by converting emissions data from CO
A registrant's disclosure of any internal carbon price necessarily would include assumptions about future events. The carbon price applied should not be viewed as a promise or guarantee with regard to the future costs to the registrant of GHG emissions. Moreover, to the extent that certain information regarding a registrant's internal carbon pricing would constitute forward-looking statements, the PSLRA safe harbors would apply to such statements, assuming all other statutory requirements for those safe harbors are satisfied.
We are proposing to require a registrant to describe the resilience of its business strategy in light of potential future changes in climate-related risks. A registrant also would be required to describe any analytical tools, such as scenario analysis, that the registrant uses to assess the impact of climate-related risks on its business and consolidated financial statements, or to support the resilience of its strategy and business model in light of foreseeable climate-related risks.
Many commenters recommended that we require a registrant to conduct scenario analysis and disclose the results of such analysis.
Another commenter stated that the Commission should require disclosure of a registrant's climate scenario analysis by no later than 2025, and recommended that companies engage in scenario analysis involving a base case, worse case, better case, and “Black
Another commenter expressed the view that, although many companies purport to use scenario analysis in the climate context, their reporting regarding such use has been generally deficient. That commenter stated that the assumptions underlying the selected scenarios often are undisclosed and that the analysis tends to be limited and not usefully comparable.
Some commenters recommended providing certain accommodations in connection with a scenario analysis requirement, such as creating a safe harbor for scenario analysis disclosure
We agree with those commenters who stated that information concerning scenario analysis could help investors evaluate the resilience of the registrant's business strategy in the face of various climate scenarios that could impose potentially different climate-related risks. We are not, however, proposing to mandate that registrants conduct scenario analysis. We recognize that not every registrant conducts scenario analysis and that, in certain instances, it may be costly or difficult for some registrants to conduct such scenario analysis. Instead, the proposed rules would require that if a registrant uses scenario analysis or any analytical tools to assess the impact of climate-related risks on its business and consolidated financial statements, and to support the resilience of its strategy and business model, the registrant must disclose certain information about such analysis.
If a registrant uses scenario analysis, the proposed amendments would require disclosure of the scenarios considered (
Because a registrant's scenario analysis disclosure would necessarily include predictions and other forward-looking statements based on assumptions concerning future events, we believe that the PSLRA forward-looking safe harbors would apply to much of the disclosure concerning scenario analysis provided the other statutory conditions for application of the safe harbor are met.
We note that there are a number of publicly-available climate-related scenarios that could form the basis of a registrant's scenario analysis. The TCFD has categorized these scenarios as transition scenarios and physical climate scenarios.
19. Should we require a registrant to describe the actual and potential impacts of its material climate-related risks on its strategy, business model, and outlook, as proposed? Should we require a registrant to disclose impacts from climate-related risks on, or any resulting significant changes made to, its business operations, including the types and locations of its operations, as proposed?
20. Should we require a registrant to disclose climate-related impacts on, or
21. Should we require a registrant to specify the time horizon applied when assessing its climate-related impacts (
22. Should we require a registrant to discuss whether and how it considers any of the described impacts as part of its business strategy, financial planning, and capital allocation, as proposed? Should we require a registrant to provide both current and forward-looking disclosures to facilitate an understanding of whether the implications of the identified climate-related risks have been integrated into the registrant's business model or strategy, as proposed? Would any of the proposed disclosures present competitive concerns for registrants? If so, how can we mitigate such concerns?
23. Should we require the disclosures to include how the registrant is using resources to mitigate climate-related risks, as proposed? Should the required discussion also include how any of the metrics or targets referenced in the proposed climate-related disclosure subpart of Regulation S-K or Article 14 of Regulation S-X relate to the registrant's business model or business strategy, as proposed? Should we require additional disclosures if a registrant leverages climate-related financing instruments, such as green bonds or other forms of “sustainable finance” such as “sustainability-linked bonds,” “transition bonds,” or other financial instruments linked to climate change as part of its strategy to address climate-related risks and opportunities? For example, should we require disclosure of the climate-related projects that the registrant plans to use the green bond proceeds to fund? Should we require disclosure of key performance metrics tied to such financing instruments?
24. If a registrant has used carbon offsets or RECs, should we require the registrant to disclose the role that the offsets or RECs play in its overall strategy to reduce its net carbon emissions, as proposed? Should the proposed definitions of carbon offsets and RECs be clarified or expanded in any way? Are there specific considerations about the use of carbon offsets or RECs that we should require to be disclosed in a registrant's discussion regarding how climate-related factors have impacted its strategy, business model, and outlook?
25. Should we require a registrant to provide a narrative discussion of whether and how any of its identified climate-related risks have affected or are reasonably likely to affect its consolidated financial statements, as proposed? Should the discussion include any of the financial statement metrics in proposed 17 CFR 210.14-02 (14-02 of Regulation S-X) that demonstrate that the identified climate-related risks have had a material impact on reported operations, as proposed? Should the discussion include a tabular representation of such metrics?
26. Should we require registrants to disclose information about an internal carbon price if they maintain one, as proposed? If so, should we require that the registrant disclose:
• The price in units of the registrant's reporting currency per metric ton of CO
• The total price;
• The boundaries for measurement of overall CO
• The rationale for selecting the internal or shadow carbon price applied, as proposed?
Should we also require registrants to describe the methodology used to calculate its internal carbon price?
27. Should we also require a registrant to disclose how it uses the described internal carbon price to evaluate and manage climate-related risks, as proposed? Should we further require a registrant that uses more than one internal carbon price to provide the above disclosures for each internal carbon price, and disclose its reasons for using different prices, as proposed? Are there other aspects regarding the use of an internal carbon price that we should require to be disclosed? Would disclosure regarding any internal carbon price maintained by a registrant elicit important or material information for investors? Would requiring the disclosure of the registrant's use of an internal carbon price raise competitive harm concerns that would act as a disincentive from the use of an internal carbon price? If so, should the Commission provide an accommodation that would mitigate those concerns? For example, are there exceptions or exemptions to an internal carbon price disclosure requirement that we should consider?
28. To the extent that disclosure that incorporates or is based on an internal carbon price constitutes forward-looking information, the PSLRA safe harbors would apply. Should we adopt a separate safe harbor for internal carbon price disclosure? If so, what disclosures should such a safe harbor cover and what should the conditions be for such a safe harbor?
29. Should we require all registrants to disclose an internal carbon price and prescribe a methodology for determining that price? If so, what corresponding disclosure requirements should we include in connection with such mandated carbon price? What methodology, if any, should we prescribe for calculating a mandatory internal or shadow carbon price? Would a different metric better elicit disclosure that would monetize emissions?
30. Should we require a registrant to disclose analytical tools, such as scenario analysis, that it uses to assess the impact of climate-related risks on its business and consolidated financial statements, and to support the resilience of its strategy and business model, as proposed? What other analytical tools do registrants use for these purposes, and should we require disclosure of these other tools? Are there other situations in which some registrants should be required to conduct and provide disclosure of scenario analysis? Alternatively, should we require all registrants to provide scenario analysis disclosure? If a registrant does provide scenario analysis disclosure, should we require it to follow certain publicly available scenario models, such as those published by the IPCC, the IEA, or NGFS and, if so, which scenarios? Should we require a registrant providing scenario analysis disclosure to include the scenarios considered (
31. Would the PSLRA forward-looking statement safe harbors provide adequate protection for the proposed scenario analysis disclosure? Should we instead adopt a separate safe harbor for scenario analysis disclosure? If so, what disclosures should such a safe harbor cover that would not be covered by the PSLRA safe harbors and what should the conditions be for such a safe harbor?
32. Should we adopt a provision similar to 17 CFR 229.305(d) that would apply the PSLRA forward-looking statement safe harbor to forward-looking statements made in response to specified climate-related disclosure items, such as proposed Item 1502 and Item 1505 (concerning targets and goals) of Regulation S-K? If so, which proposed items should we specifically include in the safe harbor?
33. As proposed, a registrant may provide disclosure regarding any climate-related opportunities when responding to any of the provisions under proposed 17 CFR 229.1502 (Item 1502). Should we require disclosure of climate-related opportunities under any or all of the proposed Item 1502 provisions?
Similar to the TCFD framework, the proposed rules would require a registrant to disclose, as applicable, certain information concerning the board's oversight of climate-related risks, and management's role in assessing and managing those risks.
Our proposed disclosure requirements are based on specific recommendations of the TCFD. We agree with commenters that a comprehensive understanding of a board's oversight, and management's governance, of climate-related risks is necessary to aid investors in evaluating the extent to which a registrant is adequately addressing the material climate-related risks it faces, and whether those risks could reasonably affect the value of their investment.
The proposed rules would require a registrant to disclose a number of board governance items, as applicable. The first item would require a registrant to identify any board members or board committees responsible for the oversight of climate-related risks.
Another proposed item would require a description of the processes and frequency by which the board or board committee discusses climate-related risks.
The proposed rule also would require disclosure about whether and how the board or board committee considers climate-related risks as part of its business strategy, risk management, and financial oversight.
Finally, the proposed rule would require disclosure about whether and how the board sets climate-related targets or goals and how it oversees
Similar to the proposed required disclosures on board oversight, the proposed rules would require a registrant to disclose a number of items, as applicable, about management's role in assessing and managing any climate-related risks. For example, a registrant would be required to disclose, as applicable, whether certain management positions or committees are responsible for assessing and managing climate-related risks and, if so, to identify such positions or committees and disclose the relevant expertise of the position holders or members in such detail as necessary to fully describe the nature of the expertise.
Similar to the proposed board oversight provision described above, another proposed item would require disclosure about the processes by which the responsible managers or management committees are informed about and monitor climate-related risks.
The final proposed management governance item would require disclosure about whether the responsible positions or committees report to the board or board committee on climate-related risks and how frequently this occurs.
Several commenters recommended that we require a registrant to disclose whether it has connected a portion of its executive remuneration with the achievement of climate-related targets or goals.
34. Should we require a registrant to describe, as applicable, the board's oversight of climate-related risks, as proposed? Should the required disclosure include whether any board member has expertise in climate-related risks and, if so, a description of the nature of the expertise, as proposed? Should we also require a registrant to identify the board members or board committee responsible for the oversight of climate-related risks, as proposed? Do our current rules, which require a registrant to provide the business experience of its board members, elicit adequate disclosure about a board member's or executive officer's expertise relevant to the oversight of climate-related risks?
35. Should we require a registrant to disclose the processes and frequency by which the board or board committee discusses climate-related risks, as proposed?
36. Should we require a registrant to disclose whether and how the board or board committee considers climate-related risks as part of its business strategy, risk management, and financial oversight, as proposed? Would the proposed disclosure raise competitive harm concerns? If so, how could we address those concerns while requiring additional information for investors about how a registrant's board oversees climate-related risks?
37. Should we require a registrant to disclose whether and how the board sets climate-related targets or goals, as proposed? Should the required disclosure include how the board oversees progress against those targets or goals, including whether it establishes any interim targets or goals, as proposed? Would the proposed disclosure raise competitive harm concerns? If so, how could we address those concerns while requiring additional information for investors about how a registrant's board oversees the setting of any climate-related targets or goals?
38. Should we require a registrant to describe, as applicable, management's role in assessing and managing climate-related risks, as proposed? Should the required disclosure include whether certain management positions or committees are responsible for assessing and managing climate-related risks and, if so, the identity of such positions or committees, and the relevant expertise of the position holders or members in such detail as necessary to fully describe the nature of the expertise, as proposed? Should we require a registrant to identify the executive officer(s) occupying such position(s)? Or do our current rules, which require a registrant to provide the business experience of its executive officers, elicit adequate disclosure about management's expertise relevant to the oversight of climate-related risks?
39. Should we require a registrant to describe the processes by which the management positions or committees responsible for climate-related risks are
40. Should we specifically require a registrant to disclose any connection between executive remuneration and the achievement of climate-related targets and goals? Is there a need for such a requirement in addition to the executive compensation disclosure required by 17 CFR 229.402(b)?
41. As proposed, a registrant may disclose the board's oversight of, and management's role in assessing and managing, climate-related opportunities. Should we require a registrant to disclose these items?
The proposed rules would require a registrant to describe any processes the registrant has for identifying, assessing, and managing climate-related risks.
When describing the processes for identifying and assessing climate-related risks, the registrant would be required to disclose, as applicable:
• How it determines the relative significance of climate-related risks compared to other risks;
• How it considers existing or likely regulatory requirements or policies, such as GHG emissions limits, when identifying climate-related risks;
• How it considers shifts in customer or counterparty preferences, technological changes, or changes in market prices in assessing potential transition risks; and
• How it determines the materiality of climate-related risks, including how it assesses the potential size and scope of any identified climate-related risk.
When describing any processes for managing climate-related risks, a registrant would be required to disclose, as applicable:
• How it decides whether to mitigate, accept, or adapt to a particular risk;
• How it prioritizes addressing climate-related risks; and
• How it determines how to mitigate a high priority risk.
Together, these proposed disclosures would help investors evaluate whether a registrant has implemented adequate processes for identifying, assessing, and managing climate-related risks so that they may make better informed investment or voting decisions. As part of this risk management description, if a registrant uses insurance or other financial products to manage its exposure to climate-related risks, it may need to describe its use of these products.
The proposed rules would also require a registrant to disclose whether and how climate-related risks are integrated into the registrant's overall risk management system or processes.
Adoption of a transition plan to mitigate or adapt to climate-related risks may be an important part of a registrant's climate-related risk management strategy, particularly if it operates in a jurisdiction that has made commitments under the Paris Agreement to reduce its GHG emissions. Many commenters recommended that we require disclosure regarding a registrant's transition plan, stating that such disclosure would help investors evaluate whether a registrant has an effective strategy to achieve its short-, medium-, or long-term climate-related targets or goals.
The proposed rules would define a “transition plan” to mean a registrant's strategy and implementation plan to reduce climate-related risks.
If a registrant has adopted a transition plan as part of its climate-related risk management strategy, the proposed rules would require the registrant to discuss, as applicable, how it plans to mitigate or adapt to any physical risks identified in the filing, including but not limited to those concerning exposure to sea level rise, extreme weather events, wildfires, drought, and severe heat.
The proposed rules would also require a registrant that has adopted a transition plan as part of its climate-related risk management strategy to discuss, as applicable, how it plans to mitigate or adapt to any identified transition risks, including the following:
• Laws, regulations, or policies that:
○ Restrict GHG emissions or products with high GHG footprints, including emissions caps;
○ Require the protection of high conservation value land or natural assets;
• Imposition of a carbon price;
• Changing demands or preferences of consumers, investors, employees, and business counterparties.
While each of these transition risks may not be applicable to each registrant and its particular transition plan, the above examples are intended to guide registrants in providing meaningful disclosure about its risk management strategies that is not generic or boilerplate. In this regard, it is important for investors to understand how a registrant plans to mitigate or adapt to any identified transition risks in its transition plan given the potential associated costs and burdens and their impact on the registrant's business.
The proposed rules would require a registrant that has adopted a transition plan as part of its climate-related management strategy to update its disclosure about its transition plan each fiscal year by describing the actions taken during the year to achieve the plan's targets or goals.
A registrant that has adopted a transition plan as part of its climate-related risk management strategy may also describe how it plans to achieve any identified climate-related opportunities, such as:
• The production of products that facilitate the transition to a lower carbon economy, such as low emission modes of transportation and supporting infrastructure;
• The generation or use of renewable power;
• The production or use of low waste, recycled, or other consumer products that require less carbon intensive production methods;
• The setting of conservation goals and targets that would help reduce GHG emissions; and
• The provision of goods or services related to any transition to a lower carbon economy.
For example, an energy company might discuss how, due to actual or potential regulatory constraints, it intends to take advantage of climate-related opportunities by increasing the amount of electricity purchased that is produced using renewable energy sources, reducing its medium and long-range fossil fuel exploration and production, increasing the percentage of its products consisting of biofuels and other lower emissions fuels, or investing in carbon capture and storage technologies. A transportation company might discuss how, to mitigate reputational risk, it plans to realize any climate-related opportunities presented by switching its existing fleet to one composed of low- or no-emission vehicles by a certain date.
42. Should we require a registrant to describe its processes for identifying, assessing, and managing climate-related risks, as proposed?
43. When describing the processes for identifying and assessing climate-related risks, should we require a registrant to disclose, as applicable, as proposed:
• How the registrant determines the relative significance of climate-related risks compared to other risks?
• How it considers existing or likely regulatory requirements or policies, such as emissions limits, when identifying climate-related risks?
• How it considers shifts in customer or counterparty preferences, technological changes, or changes in market prices in assessing potential transition risks?
• How the registrant determines the materiality of climate-related risks, including how it assesses the potential size and scope of an identified climate-related risk? Are there other items relevant to a registrant's identification and assessment of climate-related risks that we should require it to disclose instead of or in addition to the proposed disclosure items?
44. When describing the processes for managing climate-related risks, should we require a registrant to disclose, as applicable, as proposed:
• How it decides whether to mitigate, accept, or adapt to a particular risk?
• How it prioritizes climate-related risks?
• How it determines to mitigate a high priority risk?
Are there other items relevant to a registrant's management of climate-related risks that we should require it to disclose instead of or in addition to the proposed disclosure items?
45. Should we require a registrant to disclose whether and how the processes described in response to proposed 17 CFR 229.1503(a) are integrated into the registrant's overall risk management system or processes, as proposed? Should we specify any particular aspect of this arrangement that a registrant
46. If a registrant has adopted a transition plan, should we require the registrant to describe the plan, including the relevant metrics and targets used to identify and manage physical and transition risks, as proposed? Would this proposed disclosure requirement raise any competitive harm concerns and, if so, how can we mitigate such concerns? Would any of the proposed disclosure requirements for a registrant's transition plan act as a disincentive to the adoption of such a plan by the registrant?
47. If a registrant has adopted a transition plan, should we require it, when describing the plan, to disclose, as applicable, how the registrant plans to mitigate or adapt to any identified physical risks, including but not limited to those concerning energy, land, or water use and management, as proposed? Are there any other aspects or considerations related to the mitigation or adaption to physical risks that we should specifically require to be disclosed in the description of a registrant's transition plan?
48. If a registrant has adopted a transition plan, should we require it to disclose, if applicable, how it plans to mitigate or adapt to any identified transition risks, including the following, as proposed:
• Laws, regulations, or policies that:
○ Restrict GHG emissions or products with high GHG footprints, including emissions caps; or
○ Require the protection of high conservation value land or natural assets?
• Imposition of a carbon price?
• Changing demands or preferences of consumers, investors, employees, and business counterparts?
Are there any other transition risks that we should specifically identify for disclosure, if applicable, in the transition plan description? Are there any identified transition risks that we should exclude from the plan description?
49. If a registrant has adopted a transition plan, when describing the plan, should we permit the registrant also to discuss how it plans to achieve any identified climate-related opportunities, including, as proposed:
• The production of products that facilitate the transition to a lower carbon economy, such as low emission modes of transportation and supporting infrastructure?
• The generation or use of renewable power?
• The production or use of low waste, recycled, or environmentally friendly consumer products that require less carbon intensive production methods?
• The setting of conservation goals and targets that would help reduce GHG emissions?
• The provision of services related to any transition to a lower carbon economy?
Should we require a registrant to discuss how it plans to achieve any of the above, or any other, climate-related opportunities when describing its transition plan?
50. If a registrant has disclosed its transition plan in a Commission filing, should we require it to update its transition plan disclosure each fiscal year by describing the actions taken during the year to achieve the plan's targets or goals, as proposed? Should we require a registrant to provide such an update more frequently, and if so, how frequently? Would the proposed updating requirement act as a disincentive to the adoption of a transition plan by the registrant?
51. To the extent that disclosure about a registrant's transition plan constitutes forward-looking information, the PSLRA safe harbors would apply. Should we adopt a separate safe harbor for transition plan disclosure? If so, what disclosures should such a safe harbor cover and what should the conditions be for such a safe harbor?
If a registrant is required to file the disclosure required by subpart 229.1500 in a form that also requires audited financial statements,
• Financial Impact Metrics;
• Expenditure Metrics; and
• Financial Estimates and Assumptions.
The proposed financial statement metrics disclosures would involve estimation uncertainties that are driven by the application of judgments and assumptions, similar to other financial statement disclosures (
A number of existing accounting standards could elicit climate-related disclosure in the financial statements, as highlighted by the FASB in a Staff Educational Paper and by the IFRS in a similar document.
To avoid potential confusion, maintain consistency with the rest of the financial statements, and aid comparability, registrants would be required to calculate the proposed financial statement metrics using financial information that is consistent with the scope of the rest of the registrant's consolidated financial statements included in the filing.
For the avoidance of doubt, and to further promote consistency in the preparation of the financial statements, the proposed basis of calculation requirements would also specify that a registrant would be required to apply the same set of accounting principles that it is required to apply in preparation of the rest of its consolidated financial statements included in the filing, whenever applicable.
The proposed rules would also require disclosure to be provided for the registrant's most recently completed fiscal year and for the historical fiscal year(s) included in the registrant's consolidated financial statements in the applicable filing.
A registrant, however, would not need to provide a corresponding historical metric for a fiscal year preceding its current reporting fiscal year if it is eligible to take advantage of the accommodation in 17 CFR 230.409 (“Rule 409”) or 17 CFR 240.12b-21 (“Rule 12b-21”). For example, if a registrant has not previously presented such metric for such fiscal year and the historical information necessary to calculate or estimate such metric is not reasonably available to the registrant without unreasonable effort or expense, the registrant may be able to rely on Rule 409 or Rule 12b-21 to exclude a corresponding historical metric. Requiring disclosure of current and, when known or reasonably available, historical periods, should allow investors to analyze trends in the climate-related impacts on the consolidated financial statements and to better evaluate the narrative trend disclosure provided pursuant to proposed Subpart 1500 of Regulation S-K.
52. Should we require a registrant to provide contextual information, including a description of significant inputs and assumptions used, and if applicable, policy decisions made by the registrant to calculate the specified metrics, as proposed? Should we revise the proposed requirement to provide contextual information to require specific information instead? We provide some examples of contextual information disclosure in Sections II.F.2 and II.F.3 below. Would providing additional examples or guidance assist registrants in preparing this disclosure?
53. The proposed rules would specify the basis of calculation for the climate-related financial statement metrics. Is it clear how to apply these accounting principles when calculating the proposed climate-related financial statement metrics, or should we provide additional guidance? Should we require a registrant to report these metrics with reference to its consolidated financial statements, as proposed? If not, how should registrants report these metrics? If we were to establish accounting principles (
54. Should we also require such metrics to be calculated at a reportable segment level when a registrant has more than one reportable segment (as defined by the FASB ASC Topic 280
55. The proposed rules would require disclosure for the registrant's most recently completed fiscal year and for the corresponding historical fiscal years included in the registrant's consolidated financial statements in the filing. Should disclosure of the climate-related financial statement metrics be required for the fiscal years presented in the registrant's financial statements, as proposed? Instead, should we require the financial statement metrics to be calculated only for the most recently
56. Should information for all periods in the consolidated financial statements be required for registrants that are filing an initial registration statement or providing climate-related financial statement metrics disclosure for historical periods prior to the effective date or compliance date of the rules? Would the existing accommodation in Rules 409 and 12b-21 be sufficient to address any potential difficulties in providing the proposed disclosures in such situations?
57. Should we provide additional guidance as to when a registrant may exclude a historical metric for a fiscal year preceding the current fiscal year?
58. In several instances, the proposed rules specifically point to existing GAAP and, in this release, we provide guidance with respect to the application of existing GAAP. Are there other existing GAAP requirements that we should reference? Are there instances where it would be preferable to require an approach based on TCFD guidance or some other framework, rather than requiring the application of existing GAAP?
As discussed above, proposed Item 1502(d) of Regulation S-K would require a registrant to provide a narrative discussion of whether and how any of its identified climate-related risks have affected or are reasonably likely to affect the registrant's consolidated financial statements.
We are proposing to require disclosure of the impacts from severe weather events and other natural conditions and transition activities, which should capture a broad spectrum of these two types of climate-related risks (physical risks and transition risks). In addition, the proposed rules would require disclosure of the impacts of any climate-related risks identified pursuant to proposed Item 1502(a)—both physical risks (“identified physical risks”) and transition risks (“identified transition risks”)—on any of the financial statement metrics.
Specifically, we are proposing that impacts on any relevant line item in the registrant's consolidated financial statements during the fiscal years presented arising from severe weather events and natural conditions, and the identified physical risks (collectively, “climate-related events”), would trigger the proposed disclosure requirement discussed below. Specific examples of such severe weather events and natural conditions may include the following:
• Flooding;
• Drought;
• Wildfires;
• Extreme temperatures; and
• Sea level rise.
As discussed, above, there has been increased recognition of the current and potential effects, both positive and negative, of these events and the associated physical risks on a registrant's business as well as its financial performance and position. For example, as mentioned above, the 2010 Guidance discusses the potential impacts on a registrant's business and financial performance from climate-related events, including, for example, severe weather events, that could negatively impact a registrant's supply chain or distribution chain and lead to higher input costs or delayed product deliveries.
Generally, climate-related events such as severe weather events and other natural conditions, and climate-related risks more generally, are linked to negative impacts on a registrant's financial performance and position.
In addition to the physical risks associated with climate change, registrants and investors also face climate-related transition risks. As government leaders across the globe have made public commitments to transition to a lower carbon economy, investors have sought information about the impact such a transition may have on registrants.
A registrant may also disclose the impact of any opportunities arising from severe weather events and other natural conditions, any impact of efforts to pursue climate-related opportunities associated with transition activities, and the impact of any other climate-related opportunities, including those identified by the registrant pursuant to proposed Item 1502(a), on any of the financial statement metrics.
The financial impact metric disclosure requirements in proposed Rules 14-02(c), (d), and (i) would require a registrant to disclose the financial impacts of severe weather events, other natural conditions, transition activities, and identified climate-related risks on the consolidated financial statements included in the relevant filing unless the aggregated impact of the severe weather events, other natural conditions, transition activities, and identified climate-related risks is less than one percent of the total line item for the relevant fiscal year.
A registrant would be required to determine the impacts of the severe weather events, other natural conditions, transition activities, and identified climate-related risks described above on each consolidated financial statement line item.
For example, when evaluating the line-by-line impact, a registrant may determine that its cost of revenue is impacted by Events A, B, and C, and Transition Activity D in the following manner:
• Cost of revenue was impacted negatively by Events A and B by $300,000, driven by increased input costs impacted by severe weather events that strained the registrant's main supplier;
• Cost of revenue was impacted positively by Event C by $70,000, driven by technology that improved the registrant's ability to manage the impact of severe heat on certain raw materials, which resulted in more efficient production; and
• Cost of revenue was impacted positively by Transition Activity D, which reduced production costs for certain products by $90,000 through advanced technology that improved energy efficiency during the production process.
For purposes of determining whether the impacts from the example above would trigger the disclosure threshold requirements, the registrant would perform the analysis illustrated in the following table:
Although some of the impacts (
Note X. Climate-related financial metrics:
In this example, contextual information may include disclosure such as the registrant's election to include the impact from opportunities in its disclosure analysis and calculation, the specific events that were aggregated for purposes of determining the impact on the cost of revenue and, if applicable, a discussion of the estimation methodology used to disaggregate the amount of impact on the cost of revenue between the climate-related events, transition activities, and other factors.
To provide additional clarity, the proposed rule would include the following examples of disclosures that may be required to reflect the impact of the severe weather events and other natural conditions on each line item of the registrant's consolidated financial statements (
• Changes to revenue or costs from disruptions to business operations or supply chains;
• Impairment charges and changes to the carrying amount of assets (such as inventory, intangibles, and property, plant and equipment) due to the assets being exposed to severe weather, flooding, drought, wildfires, extreme temperatures, and sea level rise;
• Changes to loss contingencies or reserves (such as environmental reserves or loan loss allowances) due to impact from severe weather events; and
• Changes to total expected insured losses due to flooding or wildfire patterns.
With respect to the financial impacts of transition activities, the proposed rule would include the following examples of potential impacts:
• Changes to revenue or cost due to new emissions pricing or regulations resulting in the loss of a sales contract;
• Changes to operating, investing, or financing cash flow from changes in upstream costs, such as transportation of raw materials;
• Changes to the carrying amount of assets (such as intangibles and property, plant, and equipment), for example, due to a reduction of the asset's useful life or a change in the asset's salvage value by being exposed to transition activities; and
• Changes to interest expense driven by financing instruments such as climate-linked bonds issued where the interest rate increases if certain climate-related targets are not met.
Many commenters stated that climate-related financial disclosure is material and should be reflected separately in the financial statements.
Other commenters, however, generally expressed the view that if such disclosures are material, they would already be required by existing financial statement disclosure requirements.
Although we agree that registrants are currently required to disclose material financial impacts on the financial statements, the proposed climate-related financial statement metrics should provide additional transparency into the impact of climate-related events on information reported in the financial statements that would be relevant to investors when making investment or voting decisions.
We further note that the proposed requirement to separately disclose the financial impacts of the climate-related events and transition activities may be necessary not only because climate-related risks may have significant impacts on individual registrants, but also because the risks presented by the climate-related events and transition activities may be correlated across different, similarly situated registrants.
The importance of disaggregated disclosure in a registrant's financial statements is also supported by the concepts set forth in FASB ASC Topic 606
59. Should we require registrants to disclose the financial impact metrics, as proposed? Would presenting climate-specific financial information on a separate basis based on climate-related events (severe weather events and other natural conditions and identified physical risks) and transition activities (including identified transition risks) elicit decision-useful or material information for investors? Are there different metrics that would result in disclosure of more useful information about the impact of climate-related risks and climate-related opportunities on the registrant's financial performance and position?
60. Would the impact from climate-related events and transition activities yield decision-useful information for investors? Would the climate-related events (including the examples provided) and transition activities result in impacts that are easier to quantify or disaggregate than climate-related risks more generally? Would a registrant be able to quantify and provide the proposed disclosure when the impact may be the result of a mixture of factors (
61. Alternatively, should we not require disclosure of the impacts of identified climate-related risks and only require disclosure of impacts from
62. Should impact from climate-related opportunities be required, instead of optional, as proposed? We are proposing to require a registrant that elects to disclose the impact of an opportunity to do so consistently (
63. Is it clear which climate-related events would be covered by “severe weather events and other natural conditions”? If not, should we provide additional guidance or examples about what events would be covered? Should we clarify that what is considered “severe weather” in one region may differ from another region? For example, high levels of rainfall may be considered “severe weather” in a typically arid region.
64. Are the proposed requirements for calculating and presenting the financial impact metrics clear? Should the analysis be performed and disclosed in a manner other than on a line-by-line basis referring to the line items of the registrant's consolidated financial statements?
65. We are proposing to allow a registrant to aggregate the absolute value of negative and positive impacts of all climate-related events and, separately, transition activities on a financial statement line item. Should we instead require separate quantitative disclosure of the impact of each climate-related event or transition activity? Should we require separate disclosure of the impact of climate-related opportunities that a registrant chooses to disclose?
66. The proposed financial impact metrics would not require disclosure if the absolute value of the total impact is less than one percent of the total line item for the relevant fiscal year. Is the proposed threshold appropriate? Should we use a different percentage threshold (
67. For purposes of determining whether the disclosure threshold has been met, should impacts on a line item from climate-related events and transition activities be permitted to offset (netting of positive and negative impacts), instead of aggregating on an absolute value basis as proposed? Should we prescribe how to analyze positive and negative impacts on a line item resulting from the same climate-related event or the same transition activity (
68. Instead of including a quantitative threshold, as proposed, should we require disaggregated disclosure of
69. Should we require a registrant to disclose changes to the cost of capital resulting from the climate-related events? If so, should we require a registrant to disclose its weighted average cost of capital or any internal cost of capital metrics? Would such disclosure elicit decision-useful or material information for investors?
70. We have not proposed defining the term “upstream costs” as used in the proposed examples for the financial impact metrics and elsewhere. Should we define that term or any others? If so, how should we define them?
71. Are the proposed examples in the financial impact metrics helpful for understanding the types of disclosure that would be required? Should we provide different or additional examples or guidance?
The proposed expenditure metrics would refer to the positive and negative impacts associated with the same climate-related events, transition activities, and identified climate-related risks as the proposed financial impact metrics.
The proposed expenditure metrics would be subject to the same disclosure threshold as the financial impact metrics, which we believe would promote comparability, consistency, and clarity in determining when information must be disclosed. For purposes of calculating the disclosure threshold for the expenditure metrics, a registrant would be permitted to separately determine the amount of expenditure expensed and the amount of expenditure capitalized; however, a registrant would be required to
For example, assume a registrant capitalized $200,000 of expenditure incurred related to Event D and capitalized another $100,000 of expenditure incurred related to Activity E. The registrant also expensed $25,000 of expenditure incurred related to Event F (which is an identified transition risk disclosed by the registrant). The registrant would determine whether the impacts would trigger the disclosure requirements based on the proposed thresholds, as illustrated below:
In the above example, the expenditure incurred toward Event D was $200,000 (capitalized) and the expenditure incurred toward Activity E and Event F were $100,000 (capitalized) and $25,000 (expensed). The amount of capitalized costs equaled the proposed one percent threshold, and thus the disclosure would be required for that category of expenditure. No disclosure would be required for the expenditure incurred that was expensed (related to Event F in this example), because it was below the one percent threshold. The registrant's resulting disclosure of such expenditure (capitalized or expensed) may be provided, for example, as illustrated in the following table (excluding disclosure of contextual information):
Note X. Climate-related financial metrics:
In this example, contextual information may include disclosure such as the specific climate-related events and transition activities that were aggregated for purposes of determining the impacts on the capitalized or expensed expenditure amounts and, if applicable, policy decisions made by a registrant to determine the amount of climate-related events or transition activities that are categorized as expenditure capitalized versus expenditure expensed or whether impact from pursuing any climate-related opportunities are included in the analysis. Contextual information may also include a discussion of the composition of the total expenditure expensed and total expenditure capitalized, which were used to calculate whether the disclosure threshold was met, and, if applicable, a discussion of the estimation methodology used to disaggregate the amount of impact between the climate-related events, transition activities, and other factors, including if an event or an activity impacted both capitalized and expensed costs.
The proposed rules would clarify that a registrant may be required to disclose the amount of expenditure expensed or capitalized costs, as applicable, incurred for the climate-related events to increase the resilience of assets or operations, retire or shorten the estimated useful lives of impacted assets, relocate assets or operations at risk, or otherwise reduce the future impact of severe weather events and other natural conditions on business operations.
Several commenters recommended taking a similar approach, stating that we should require disclosure of climate-related capital expenditure (
72. Should we require registrants to disclose the expenditure metrics, as proposed? Would presenting the expenditure metrics separately in one location provide decision-useful information to investors? Is there a different type of metric that would result in more useful disclosure of the expense or capitalized costs incurred toward climate-related events and transition activities or toward climate-related risks more generally?
73. Would the disclosure required by the expenditure metrics overlap with the disclosure required by the financial impact metrics? If so, should we require the disclosure to be provided pursuant to only one of these types of metrics?
74. Should the same climate-related events (including severe weather events and other natural conditions and identified physical risks) and transition activities (including identified transition risks) that we are proposing to use for the financial impact metrics apply to the expenditure metrics, as proposed? Alternatively, should we not require a registrant to disclose expenditure incurred towards identified climate-related risks and only require disclosure of expenditure relating to severe weather events and other natural conditions? Should we require a registrant to disclose the expenditure incurred toward only certain examples of severe weather events and other natural conditions? If so, should we specify which severe weather events and other natural conditions the registrant must include? Would requiring disclosure of the expenditure relating to a smaller subset of climate-related risks be easier for a registrant to quantify without sacrificing information that would be material to investors?
75. Should the proposed rules instead require a registrant to disclose the aggregate amounts of expensed and capitalized costs incurred toward
76. Should we apply the same disclosure threshold to the expenditure metrics and the financial impact metrics? Is the proposed threshold for expenditure metrics appropriate? Should we use a different percentage threshold (
77. Instead of including a quantitative threshold, as proposed, should we require disaggregated disclosure of
78. Are the proposed requirements for calculating and presenting the expenditure metrics clear? Should the analysis be performed and disclosed in a different manner, other than separately based on capitalized costs and amount of expenditure expensed and separately based on the climate-related events and transition activities? Should disclosure of expenditure incurred be required for both the amount of capitalized costs and the amount of expenditure expensed if only one of the two types of expenditure meets the disclosure threshold? Should we require separate disclosure of expenditure incurred toward each climate-related event and transition activity?
79. The proposed rule does not specifically address expensed or capitalized costs that are
80. Are the proposed terms and examples used in the expenditure metrics helpful for understanding the types of disclosures that would be required? Should we provide different or additional examples?
The proposed rules would require a registrant to disclose whether the estimates and assumptions used to produce the consolidated financial statements were impacted by exposures to risks and uncertainties associated with, or known impacts from, climate-related events (including identified physical risks and severe weather events and other natural conditions), such as flooding, drought, wildfires, extreme temperatures, sea level rise.
If the estimates and assumptions a registrant used to produce the consolidated financial statements were
Estimates and assumptions are currently required for accounting and financial reporting purposes (
By way of example, the proposed climate-related events and impacts relating to a transition away from greenhouse gas producing products and activities could affect a registrant's asset values and may result in asset impairments. The effect on asset values and the resulting impairments could, in turn, affect a registrant's assumptions when calculating depreciation expenses or asset retirement obligations associated with the retirement of tangible, long-lived assets. Providing related disclosure could help an investor understand if a registrant would be responsible for removing equipment or cleaning up hazardous materials sooner than originally planned due to a severe weather event. Similarly, a registrant's climate-related targets and related commitments, such as a commitment to achieve net-zero emissions by 2040, may impact certain accounting estimates and assumptions. For example, if a registrant announced a commitment that would require decommissioning an asset by a target year, then the registrant's depreciation expense should reflect alignment with that commitment. If the registrant believes it can execute a strategy that would allow it to meet the commitment and continue to operate the asset past the target date, then the proposed disclosure requirement could facilitate an investor's understanding and own assessment of the feasibility of that strategy. Other financial statement estimates and assumptions that may require disclosure pursuant to the proposed rules may include those related to the estimated salvage value of certain assets, estimated useful life of certain assets, projected financial information used in impairment calculations, estimated loss contingencies, estimated reserves (such as environmental reserve or loan loss allowances), estimated credit risks, fair value measurement of certain assets, and commodity price assumptions.
Several commenters stated that it was important to provide investors with an understanding of how climate-related events and activities are considered when a registrant develops the assumptions and estimates used to prepare its financial statements.
81. Should we require disclosure of financial estimates and assumptions impacted by the climate-related events and transition activities (including disclosed targets), as proposed? How would investors use this information?
82. Should we instead require disclosure of only significant or material estimates and assumptions that were impacted by the climate-related events and transition activities? Alternatively, should we require disclosure of only estimates and assumptions that were materially impacted by the climate-related events and transition activities?
83. Should we instead require disclosure of financial estimates and assumptions impacts by a subset of climate-related events and transition activities, such as not requiring disclosure related to identified climate-related risks or only requiring disclosure with respect to a subset of severe weather events and natural conditions? If so, how should the subset be defined?
84. Should we instead utilize terminology and thresholds consistent with the critical accounting estimate disclosure requirement in 17 CFR 229.303(b)(3), such as “estimates made in accordance with generally accepted accounting principles that involve a significant level of estimation uncertainty and have had or are reasonably likely to have a material impact on the financial condition or results of operations of the registrant”? If so, should we only require disclosures of whether and how the climate-related events and transition activities impacted such critical accounting estimates? Should we require only a qualitative description of how the estimates and assumptions were impacted by the climate-related events and transition activities, as proposed? Should we require quantitative disclosures as well? If so, should we require such disclosure
85. Should the disclosure of financial estimates and assumptions impacted by climate-related opportunities be optional, as proposed?
86. For the proposed financial statement metrics, should we require a registrant to disclose material changes in estimates, assumptions, or methodology among fiscal years and the reasons for those changes? If so, should we require the material changes disclosure to occur on a quarterly, or some other, basis? Should we require disclosure beyond a discussion of the material changes in assumptions or methodology and the reasons for those changes? Do existing required disclosures already elicit such information? What other approaches should we consider?
The proposed financial statement metrics would be required in the financial statements, and therefore would be (i) included in the scope of any required audit of the financial statements in the relevant disclosure filing, (ii) subject to audit by an independent registered public accounting firm, and (iii) within the scope of the registrant's ICFR.
As discussed above, the proposed disclosures share many characteristics with other complex financial statement disclosures. The financial statement metrics present financial data that is derived from the registrant's consolidated balance sheets, income statements, and statements of cash flows, and would be presented in a similar way to existing financial statement disclosures.
87. We are proposing to require the financial statement metrics to be disclosed in a note to the registrant's audited financial statements. Should we require or permit the proposed financial statement metrics to be disclosed in a schedule to the financial statements? If so, should the metrics be disclosed in a schedule to the financial statements, similar to the schedules required under Article 12 of Regulation S-X, which would subject the disclosure to audit and ICFR requirements? Should we instead require the metrics to be disclosed as supplemental financial information, similar to the disclosure requirements under FASB ASC Topic 932-235-50-2 for registrants that have significant oil- and gas-producing activities? If so, should such supplemental schedule be subject to assurance or ICFR requirements?
88. Instead of requiring the financial statement metrics to be disclosed in a note to the registrant's audited financial statements, should we require a new financial statement for such metrics? For example, should a “consolidated climate statement” be created in addition to the consolidated balance sheets, statements of comprehensive income, cash flows, and other traditional financial statements? Would including the proposed metrics in a new financial statement provide more clarity to investors given that the metrics are intended to follow the structure of the existing financial statements (including the line items)? What complications or unintended consequences may arise in practice if such a climate statement is created?
89. Should we require the disclosure to be provided outside of the financial statements? Should we require all of the disclosure to be provided in the proposed separately captioned item in the specified forms?
90. Should we require any additional metrics or disclosure to be included in the financial statements and subject to the auditing and ICFR requirements as described above? For example, should any of the disclosures we are proposing to require outside of the financial statements (such as GHG emissions metrics) be included in the financial statements? If so, should such metrics be disclosed in a note or a schedule to the financial statements? If in a schedule, should such schedule be similar to the schedules required under Article 12 of Regulation S-X and subject to audit and ICFR requirements? Should we instead require the metrics to be disclosed as supplemental financial information in a supplemental schedule? If so, should such supplemental schedule be subject to assurance or ICFR requirements?
91. Under the proposed rules, PCAOB auditing standards would be applicable to the financial statement metrics that are included in the audited financial statements, consistent with the rest of the audited financial statements. What, if any, additional guidance or revisions to such standards would be needed in order to apply PCAOB auditing standards to the proposed financial statement metrics? For example, would guidance on how to apply existing requirements, such as materiality, risk assessment, or reporting, be needed? Would revisions to the auditing standards be necessary? What additional guidance or revisions would be helpful to auditors, preparers, audit committee members, investors, and other relevant participants in the audit and financial reporting process?
92. Would it be clear that the climate-related financial statement metrics would be included in the scope of the audit when the registrant files financial statements prepared in accordance with IFRS as issued by the IASB? Would it be clear that the proposed rules would not alter the basis of presentation of the financial statements as referred to in an auditor's report? Should we amend Form 20-F, other forms, or our rules to clarify the scope of the audit or the basis of presentation in this context? For example, should we amend Form 20-F to state specifically that the scope of the audit must include any notes prepared pursuant to Article 14 of Regulation S-X? What are the costs for accounting firms to provide assurance with respect to the financial statement metrics? Would those costs decrease over time?
In addition to the other proposed climate-related disclosures, the proposed rules would require a registrant to disclose its GHG emissions for its most recently completed fiscal year.
The proposed rules would establish certain requirements regarding the measurement and reporting of GHG emissions that would promote the comparability of such disclosure. We have based the proposed GHG emissions disclosure rules on the concept of scopes, which are themselves based on the concepts of direct and indirect emissions, developed by the GHG Protocol. We also have proposed definitions of Scope 1, Scope 2, and Scope 3 emissions that are substantially similar to the corresponding definitions provided by the GHG Protocol. Commenters indicated that the GHG Protocol has become the leading accounting and reporting standard for GHG emissions.
The proposed rules would define “greenhouse gases” as carbon dioxide (“CO
The proposed rules would define GHG emissions to mean direct and indirect emissions of greenhouse gases.
• Scope 1 emissions as direct GHG emissions from operations that are owned or controlled by a registrant;
• Scope 2 emissions as indirect GHG emissions from the generation of purchased or acquired electricity, steam, heat, or cooling that is consumed by operations owned or controlled by a registrant;
• Scope 3 emissions as all indirect GHG emissions not otherwise included in a registrant's Scope 2 emissions, which occur in the upstream and downstream activities of a registrant's value chain.
As previously noted, the EPA uses the concept of scopes, and refers to the GHG Protocol, when providing guidance to companies regarding their GHG emissions inventories.
The proposed rules would require a registrant to disclose its total Scope 1 emissions separately from its total Scope 2 emissions after calculating them from all sources that are included in the registrant's organizational and operational boundaries.
Consistent with the GHG Protocol, the proposed rules would require a registrant to express each scope of its GHG emissions in terms of carbon dioxide equivalent (“CO
For all scopes of GHG emissions, the proposed rules would require a registrant to disclose GHG emissions data in gross terms, excluding any use of purchased or generated offsets.
Commenters generally supported requiring disclosure of a registrant's Scope 1 and Scope 2 emissions, with many also supporting disclosure of Scope 3 emissions.
Some of these commenters supported requiring disclosure of Scope 1 emissions at the individual greenhouse gas level.
Many commenters recommended basing any GHG emissions disclosure requirement on the GHG Protocol.
Some commenters indicated that the Commission should mandate disclosure of only Scopes 1 and 2 emissions.
A few commenters stated that the Commission should require the disclosure of only Scope 1 emissions.
We agree with the many commenters that indicated that GHG emissions disclosure could provide important information for investors to help them evaluate the climate-related risks faced by registrants and to understand better how registrants are planning to mitigate or adapt to those risks.
We propose requiring disclosure of registrants' Scopes 1 and 2 emissions because, as several institutional investor commenters stated, investors need and many investors currently use this information to make investment or voting decisions.
As previously mentioned, several large institutional investors and financial institutions, which collectively have trillions of dollars in assets under management, have formed initiatives and made commitments to achieve a net-zero economy by 2050, with interim targets set for 2030.
We also agree with commenters that basing the Commission's proposed GHG emissions disclosure rules on concepts used in the GHG Protocol could help provide investors with consistent, comparable, and reliable information about a registrant's GHG emissions.
However, we are not proposing to adopt all of the features of the GHG Protocol into the Commission's proposed climate-related disclosure rules. As explained in greater detail below, in one significant respect the proposed rules differ from the approach taken by the GHG Protocol regarding the methodology that a registrant would be required to use when calculating its GHG emissions. This difference better suits the U.S. financial reporting regime and the needs of investors.
We are proposing to require all registrants to disclose their Scopes 1 and 2 emissions. Those types of emissions result directly or indirectly from facilities owned or activities controlled by a registrant. The relevant data for calculating Scopes 1 and 2 emissions should be reasonably available to registrants, and the relevant methodologies are fairly well-developed. Registrants with large stationary sources of emissions already report Scope 1 emissions data to the EPA, and the EPA provides detailed methodologies for a range of industries with significant Scope 1 emissions.
Unlike Scopes 1 and 2 emissions, Scope 3 emissions typically result from the activities of third parties in a registrant's value chain
Scope 3 emissions are indirect, but registrants can and do take steps to limit Scope 3 emissions and the attendant risks. Although a registrant may not own or control the operational activities in its value chain that produce Scope 3 emissions, it nevertheless may influence those activities, for example, by working with its suppliers and downstream distributors to take steps to reduce those entities' Scopes 1 and 2 emissions (and thus help reduce the registrant's Scope 3 emissions) and any attendant risks. As such, a registrant may be able to mitigate the challenges of collecting the data required for Scope 3 disclosure.
To balance the importance of Scope 3 emissions with the potential relative difficulty in data collection and measurement, the proposed rules would require disclosure of Scope 3 emissions only if those emissions are material, or if the registrant has set a GHG emissions reduction target or goal that includes its
Consistent with the Commission's definition of “material” and Supreme Court precedent, a registrant would be required to disclose its Scope 3 emissions if there is a substantial likelihood that a reasonable investor would consider them important when making an investment or voting decision.
When recommending that the Commission require the disclosure of Scope 3 emissions, some commenters indicated that Scope 3 emissions represent the relatively large source of overall GHG emissions for many companies.
Scope 3 emissions information may be material in a number of situations to help investors gain a more complete picture of the transition risks to which a registrant may be exposed. In certain industries, a transition to lower-emission products or processes may already be underway, triggered by existing laws or regulations, changes in weather, policy initiatives, a shift in consumer preferences, technological changes, or other market forces, such that financial risks are reasonably foreseeable for registrants in those industries based on the emissions in their value chain. For example, some registrants may need to allocate capital to invest in lower emissions equipment. Investors thus need and use information about the full GHG emissions footprint and intensity of a registrant to determine and compare how exposed a registrant is to the financial risks associated with any transition to lower-emission products.
For example, in the automobile industry, the vast majority of car manufacturers' GHG emissions footprint comes from tailpipe emissions of cars driven by customers, as compared to the emissions from manufacturing the cars.
Changes in requirements by financial institutions and institutional investors can present similar financial risks for companies. As many financial institutions and investors begin to set their own GHG emissions reduction goals, they may consider the total GHG emissions footprint of companies that they finance or invest in to build portfolios to meet their goals.
When assessing the materiality of Scope 3 emissions, registrants should consider whether Scope 3 emissions make up a relatively significant portion of their overall GHG emissions. While we are not proposing a quantitative threshold for determining materiality, we note that some companies rely on, or support reliance on, a quantitative threshold such as 40 percent when assessing the materiality of Scope 3 emissions.
If a registrant determines that its Scope 3 emissions are not material, and therefore not subject to disclosure, it may be useful to investors to understand the basis for that determination. Further, if a registrant determines that certain categories of Scope 3 emissions are material, registrants should consider disclosing why other categories are not material. If, however, Scope 3 emissions are material, then understanding the extent of a registrant's exposure to Scope 3 emissions, and the choices it makes regarding them, would be important for investors when making investment or voting decisions.
Several commenters stated that disclosure of a registrant's Scope 3 emissions is essential to making an informed investment decision because Scope 3 emissions can indicate a registrant's exposure to climate-related transition risks.
Disclosure of Scope 3 emissions could also highlight instances where a registrant attempts to reduce its total Scopes 1 and 2 emissions by outsourcing carbon intensive activities. For example, a registrant could contract out certain high-emissions production activities so that its own Scope 1 or 2 emissions are lower than a similar company that has retained direct ownership and control over more of its production activities. Thus, Scope 3 emissions reporting could provide greater transparency and help preclude any efforts by registrants to obscure for investors the full magnitude of the climate-related risks associated with their GHG emissions.
The proposed rules would also require a registrant to disclose its Scope 3 emissions if it has set a GHG emissions reduction target or goal that includes Scope 3 emissions.
Scope 3 emissions disclosures would help investors to understand and assess the registrant's strategy. For example, Scope 3 emissions disclosures would allow an investor to better understand how feasible it would be for the registrant to achieve its targets through its current strategy, to track the registrant's progress over time, and to understand changes the registrant may make to its strategy, targets, or goals. Scope 3 emissions disclosures would thus be important to evaluating the financial effects of the registrant's target or goal. In addition, this disclosure could help prevent instances of greenwashing or other misleading claims concerning the potential impact of Scope 3 emissions on a registrant's business because investors, and the market would have access to a quantifiable, trackable metric.
A registrant's Scope 3 emissions disclosure, together with the proposed financial statement metrics, would also enable an investor to assess the efficiency and efficacy of the registrant's actions to achieve its target or goal (
The proposed disclosure requirement should also give investors the ability to evaluate whether a registrant's target or goal and its plan for achieving that target or goal could have an adverse impact on the registrant. For example, an investor might conclude that the financial costs of a registrant's plan would outweigh any benefits to the
This disclosure requirement could also enable investors to better compare firms. For example, two registrants may have the same total GHG emissions and have made the same commitments to reduce total GHG emissions from Scopes 1, 2, and 3 emissions combined. However, if the registrants have different proportions of emissions from Scope 1 and 2 versus Scope 3, investors might determine that there would be different costs and effects for these registrants from their disclosed plans to reduce their overall emissions.
Scope 3 emissions disclosures could also enable investors to better compare registrants' plans to achieve their Scope 3 emissions targets or goals. For example, registrants in the retail industry may have a relatively large portion of their Scope 3 emissions derived from customer travel to the registrant's stores and shipping products or goods to customers or stores. If a registrant in this industry has set Scope 3 emissions targets or goals, in order to meet those targets or goals it may choose to relocate its stores to be closer to public transportation. Another similarly situated registrant may elect to switch to using electric vehicles for shipping. A third similarly situated registrant might elect to take neither action, but instead assume Scope 3 emissions reductions based on customers' change in behavior. Investors could assess the likelihood of each of these three registrants meeting their Scope 3 emissions target or goal—as well as the likely financial and operational impact—which could depend on the amount and type of their Scope 3 emissions. Investors could also compare the potential impacts of these plans on the three different registrants. Without disclosures of the amount and type of Scope 3 emissions, investors would face difficulty assessing the likely impacts of a target or goal that includes Scope 3 emissions on registrants and comparing the relative impacts across registrants.
If required to disclose Scope 3 emissions, a registrant would be required to identify the categories of upstream and downstream activities that have been included in the calculation of its Scope 3 emissions. Consistent with the GHG Protocol,
• A registrant's purchased goods and services;
• A registrant's capital goods;
• A registrant's fuel and energy related activities not included in Scope 1 or Scope 2 emissions;
• Transportation and distribution of purchased goods, raw materials, and other inputs;
• Waste generated in a registrant's operations;
• Business travel by a registrant's employees;
• Employee commuting by a registrant's employees; and
• A registrant's leased assets related principally to purchased or acquired goods or services.
Downstream activities from which Scope 3 emissions might result include:
• Transportation and distribution of a registrant's sold products, goods or other outputs;
• Processing by a third party of a registrant's sold products;
• Use by a third party of a registrant's sold products;
• End-of-life treatment by a third party of a registrant's sold products;
• A registrant's leased assets related principally to the sale or disposition of goods or services;
• A registrant's franchises; and
• Investments by a registrant.
The list of upstream and downstream activities set forth in proposed Item 1500(r) is non-exclusive. If any upstream or downstream activities were significant to the registrant when calculating its Scope 3 emissions, the proposed rules would require it to identify such categories and separately disclose Scope 3 emissions data for each of those categories together with a total of all Scope 3 emissions.
If required to disclose Scope 3 emissions, a registrant would also be required to describe the data sources used to calculate those emissions, including the use of any of the following:
• Emissions reported by parties in the registrant's value chain, and whether such reports were verified by the registrant or a third party, or unverified;
• Data concerning specific activities,
• Data derived from economic studies, published databases, government statistics, industry associations, or other third-party sources outside of a registrant's value chain, including industry averages of emissions, activities, or economic data.
This information is intended to assist investors in assessing the reliability and accuracy of the registrant's Scope 3 emissions disclosure. For example, an investor might find emissions data related to the downstream transportation and distribution of a registrant's sold products more reliable if based on specific distances traveled by the registrant's transportation and distribution partners and company-specific emissions factors rather than estimates of distances traveled based on industry-average data and using national average emission factors. Although we recognize that a registrant may sometimes need to use industry- and national-average data when calculating its Scope 3 emissions, information about the data sources for its Scope 3 emissions would help
We acknowledge that a registrant's material Scope 3 emissions is a relatively new type of metric, based largely on third-party data, that we have not previously required. We are proposing the disclosure of this metric because we believe capital markets have begun to assign financial value to this type of metric, such that it can be material information for investors about financial risks facing a company. Scope 3 emissions disclosure is an integral part of both the TCFD
We also recognize, as discussed below, that the reporting of Scope 3 emissions may present more challenges than the reporting of Scopes 1 and 2 emissions. But in light of the fact that a GHG emissions reporting regime may be incomplete without the reporting of Scope 3 emissions, we are proposing to include them, with an appropriate transition period and safe harbor, at the outset. Although we have not proposed to exclude specific upstream or downstream activities from the scope of the proposed Scope 3 disclosure requirement, we have limited the proposed disclosure requirement to those value chain emissions that overall are material. We also have not proposed a bright-line quantitative threshold for the materiality determination as suggested by some commenters
93. How would investors use GHG emissions disclosures to inform their investment and voting decisions? How would such disclosures provide insight into a registrant's financial condition, changes in financial condition, and results of operations? How would such disclosures help investors evaluate an issuer's climate risk-related exposure? Would such disclosures enable investors to better assess physical risks associated with climate-related events, transition risks, or both types of risks?
94. Should we require a registrant to disclose its GHG emissions both in the aggregate, per scope, and on a disaggregated basis for each type of greenhouse gas that is included in the Commission's proposed definition of “greenhouse gases,” as proposed? Should we instead require that a registrant disclose on a disaggregated basis only certain greenhouse gases, such as methane (CH
95. We have proposed defining “greenhouse gases” as a list of specific gases that aligns with the GHG Protocol and the list used by the EPA and other organizations. Should other gases be included in the definition? Should we expand the definition to include any other gases to the extent scientific data establishes a similar impact on climate change with reasonable certainty? Should we require a different standard to be met for other greenhouse gases to be included in the definition?
96. Should we require a registrant to express its emissions data in CO
97. Should we require a registrant to disclose its total Scope 1 emissions and total Scope 2 emissions separately for its most recently completed fiscal year, as proposed? Are there other approaches that we should consider?
98. Should we require a registrant to disclose its Scope 3 emissions for the fiscal year if material, as proposed? Should we instead require the disclosure of Scope 3 emissions for all registrants, regardless of materiality? Should we use a quantitative threshold, such as a percentage of total GHG emissions (
99. Should we require a registrant that has made a GHG emissions reduction commitment that includes Scope 3 emissions to disclose its Scope 3 emissions, as proposed? Should we instead require registrants that have made any GHG emissions reduction commitments, even if those commitments do not extend to Scope 3, to disclose their Scope 3 emissions? Should we only require Scope 3 emissions disclosure if a registrant has made a GHG emissions reduction commitment that includes Scope 3 emissions?
100. Should Scope 3 emissions disclosure be voluntary? Should we require Scope 3 emissions disclosure in stages,
101. Should we require a registrant to exclude any use of purchased or generated offsets when disclosing its Scope 1, Scope 2, and Scope 3 emissions, as proposed? Should we require a registrant to disclose both a total amount with, and a total amount without, the use of offsets for each scope of emissions?
102. Should we require a registrant to disclose its Scope 3 emissions for each separate significant category of upstream and downstream emissions as well as a total amount of Scope 3 emissions for the fiscal year, as proposed? Should we only require the disclosure of the total amount of Scope 3 emissions for the fiscal year? Should we require the separate disclosure of Scope 3 emissions only for certain categories of emissions and, if so, for which categories?
103. Should the proposed rules include a different standard for
104. Should we, as proposed, allow a registrant to provide their own categories of upstream or downstream activities? Are there additional categories, other than the examples we have identified, that may be significant to a registrant's Scope 3 emissions and that should be listed in the proposed rule? Are there any categories that we should preclude,
105. Should we require the calculation of a registrant's Scope 1, Scope 2, and/or Scope 3 emissions to be as of its fiscal year end, as proposed? Should we instead allow a registrant to provide its GHG emissions disclosures according to a different timeline than the timeline for its Exchange Act annual report? If so, what should that timeline be? For example, should we allow a registrant to calculate its Scope 1, Scope 2, and/or Scope 3 emissions for a 12-month period ending on the latest practicable date in its fiscal year that is no earlier than three months or, alternatively, six months prior to the end of its fiscal year? Would allowing for an earlier calculation date alleviate burdens on a registrant without compromising the value of the disclosure? Should we allow such an earlier calculation date only for a registrant's Scope 3 emissions? Would the fiscal year end calculations required for a registrant to determine if Scope 3 emissions are material eliminate the benefits of an earlier calculation date? Should we instead require a registrant to provide its GHG emissions disclosures for its most recently completed fiscal year one, two, or three months after the due date for its Exchange Act annual report in an amendment to that report?
106. Should we require a registrant that is required to disclose its Scope 3 emissions to describe the data sources used to calculate the Scope 3 emissions, as proposed? Should we require the proposed description to include the use of: (i) Emissions reported by parties in the registrant's value chain, and whether such reports were verified or unverified; (ii) data concerning specific activities, as reported by parties in the registrant's value chain; and (iii) data derived from economic studies, published databases, government statistics, industry associations, or other third-party sources outside of a registrant's value chain, including industry averages of emissions, activities, or economic data, as proposed? Are there other sources of data for Scope 3 emissions the use of which we should specifically require to be disclosed? For purposes of our disclosure requirement, should we exclude or prohibit the use of any of the proposed specified data sources when calculating Scope 3 emissions and, if so, which ones?
107. Should we require a registrant to provide location data for its disclosed sources of Scope 1, Scope 2, and Scope 3 emissions if feasible? If so, should the feasibility of providing location data depend on whether it is known or reasonably available pursuant to the Commission's existing rules (Securities Act Rule 409 and Exchange Act Rule 12b-21)? Would requiring location data, to the extent feasible, assist investors in understanding climate-related risks, and in particular, likely physical risks, associated with a registrant's emissions' sources? Would a requirement to disclose such location data be duplicative of any of the other disclosure requirements that we are proposing?
108. If we require a registrant to provide location data for its GHG emissions, how should that data be presented? Should the emissions data be grouped by zip code separately for each scope? Should the disclosure be presented in a cartographic data display, such as what is commonly known as a “heat map”? If we require a registrant to provide location data for its GHG emissions, should we also require additional disclosure about the source of the emissions?
In addition to requiring the disclosure of its GHG emissions in gross terms, the proposed rules would also require a registrant to disclose the sum of its Scopes 1 and 2 emissions in terms of GHG intensity.
The proposed rules would define “GHG intensity” (or “carbon intensity”) to mean a ratio that expresses the impact of GHG emissions per unit of economic value (
If the registrant has no revenue for a fiscal year, it would be required to calculate its GHG intensity with another financial measure (
A registrant could also voluntarily disclose other additional measures of GHG intensity, including non-financial measures such as economic output, provided it includes an explanation of the reasons why those particular GHG intensity measures were used and why the registrant believes such measures provide useful information to investors.
109. Should we require a registrant to disclose the intensity of its GHG emissions for the fiscal year, with separate calculations for (i) the sum of Scope 1 and Scope 2 emissions and, if applicable (ii) its Scope 3 emissions (separately from Scopes 1 and 2), as proposed? Should we define GHG intensity, as proposed? Is there a different definition we should use for this purpose?
110. Should we require the disclosed GHG intensity to be expressed in terms of metric tons of CO
111. Should we require the disclosed GHG intensity to be expressed in terms of metric tons of CO
112. Should we require a registrant with no revenue or unit of production for a fiscal year to disclose its GHG intensity based on, respectively, another financial measure or measure of economic output, as proposed? Should we require such a registrant to use a particular financial measure, such as total assets, or a particular measure of economic output, such as total number of employees? For registrants who may have minimal revenue, would the proposed calculation result in intensity disclosure that is confusing or not material? Should additional guidance be provided with respect to such instances?
113. Should we permit a registrant to disclose other measures of GHG intensity, in addition to the required measures, as long as the registrant explains why it uses the particular measure of GHG intensity and discloses the corresponding calculation methodology used, as proposed?
The proposed rules would require disclosure to be provided for the registrant's most recently completed fiscal year and for the historical fiscal years included in the registrant's consolidated financial statements in the applicable filing, to the extent such historical GHG emissions data is reasonably available.
Linking the required number of years of historical GHG emissions data to the historical periods required in the consolidated financial statements should benefit investors by requiring emissions data that is consistent with the financial statement metrics in the filing. This should help investors connect GHG emissions with the financial performance of a registrant in the same period, including the proposed financial statement metrics. Moreover, although we are not proposing to require the GHG emissions data to be included in the registrant's consolidated financial statements, we nevertheless believe that the GHG emissions data is relevant to, and would be read in conjunction with, information included in the consolidated financial statements. Just as data about a registrant's revenues and expenses on its income statement reflect its activities in financial terms for a given year, a registrant's emissions data reflect its carbon footprint activities for that year. For this reason, we have proposed requiring a registrant to provide its GHG emissions data for the same number of years as it is required to provide data on its income statement and cash flow statement, to the extent such emissions data is reasonably available. For example, a registrant that is required to include income statements and cash flow statements at the end of its three most recent fiscal years would be required to disclose three years of its Scope 1, Scope 2 and, if material to the registrant or if it has set a GHG emissions target or goal that includes its Scope 3 emissions, its Scope 3 emissions, expressed both in absolute terms and in terms of intensity.
A registrant, however, would not otherwise be required to provide a corresponding GHG emissions metric for a fiscal year preceding its current reporting fiscal year if, for example, it was not required to and has not previously presented such metric for such fiscal year and the historical information necessary to calculate or estimate such metric is not reasonably available to the registrant without unreasonable effort or expense.
114. Should we require GHG emissions disclosure for the registrant's most recently completed fiscal year and for the appropriate, corresponding historical fiscal years included in the registrant's consolidated financial statements in the filing, to the extent such historical GHG emissions data is reasonably available, as proposed? Should we instead only require GHG emissions metrics for the most recently completed fiscal year presented in the relevant filing? Would requiring historical GHG emissions metrics provide important or material information to investors, such as information allowing them to analyze trends?
The proposed rules would require a registrant to describe the methodology, significant inputs, and significant assumptions used to calculate its GHG emissions metrics.
The proposed rules would require a registrant to disclose its Scope 1 emissions and its Scope 2 emissions separately after calculating them from all sources that are included in the registrant's organizational and operational boundaries.
Several commenters stated that the GHG Protocol's standards and guidance would provide an appropriate framework for reporting GHG emissions if the Commission required disclosure of GHG emissions.
For similar reasons to those noted above regarding the proposed time periods required for GHG emissions disclosure, we propose requiring the scope of consolidation and reporting to be consistent for financial data and GHG emissions data. This would be accomplished by applying existing GAAP.
Thus, as proposed, the scope of reporting for a registrant's GHG emissions metrics would be consistent with the scope of reporting for the proposed financial statement metrics and other financial data included in its consolidated financial statements in order to provide investors a consistent view of the registrant's business across its financial and GHG emissions disclosures. For example, a registrant that prepares its financial statements pursuant to U.S. GAAP would apply relevant guidance from U.S. GAAP (
For example, a registrant might own or control several plants but have only a minority ownership in another plant over which it has no control. For the plants that are owned or controlled by the registrant, all of those plants' direct and indirect emissions should be included in its Scopes 1 and 2 emissions disclosure (regardless of ownership percentage that resulted in consolidation for financial statement purposes).
A related provision under the proposed rules would require a registrant to use the same organizational boundaries when calculating its Scope 1 emissions and Scope 2 emissions
When describing the methodology, significant inputs, and significant assumptions used to calculate its GHG emissions metrics, a registrant is required to describe its operational boundaries.
• Stationary equipment (from the combustion of fuels in boilers, furnaces, burners, turbines, heaters, and incinerators);
• Transportation (from the combustion of fuels in automobiles, trucks, buses, trains, airplanes, boats, ships, and other vessels);
• Manufacturing processes (from physical or chemical processes, such as CO
• Fugitive emission sources (equipment leaks from joints, seals, packing, gaskets, coal piles, wastewater treatment, pits, cooling towers, and gas processing facilities, and other unintentional releases).
Most registrants would likely have emission sources from stationary equipment and transportation devices. Registrants in certain industrial sectors, such as cement, aluminum, and other manufacturers, or oil and gas production and refining, are likely also to produce emissions from physical or chemical processes. Some registrants would likely have emissions from all four types of sources, particularly if they have their own power generation or waste treatment facilities.
The proposed rules would require a registrant to include its approach to categorizing its emissions and emissions sources when describing its methodology to determine its operational boundaries.
In addition to setting its organizational and operational boundaries, a registrant would need to select a GHG emissions calculation approach. While the direct measurement of GHG emissions from a source by monitoring concentration and flow rate is likely to yield the most accurate calculations, due to the expense of the direct monitoring of emissions, an acceptable and common method for calculating emissions involves the application of published emission factors to the total amount of purchased fuel consumed by a particular source.
The EPA has published a set of emission factors based on the particular type of source (
After a registrant has selected a calculation approach (
For example, when determining its Scope 1 emissions for a particular plant, a registrant might add up the amount of natural gas consumed by furnaces and other stationary equipment during its most recently completed fiscal year and then apply the CO
A registrant would undergo a similar process when calculating its Scope 2 emissions for its most recently completed fiscal year. There are two common methods for calculating Scope 2 emissions for purchased electricity: The market-based method and the location-based method.
As noted above, in all instances a registrant would be required to describe its methodology, including its organizational and operational boundaries, calculation approach (including any emission factors used and the source of the emission factors), and any calculation tools used to calculate the GHG emissions.
Like registrants in other sectors, registrants in the financial sector would be required to disclose their Scope 3 emissions if those emissions are material and to describe the methodology used to calculate those emissions. A financial registrant's Scope 3 emissions disclosures would likely include the emissions from companies that the registrant provides debt or equity financing to (“financed emissions”). While financial registrants may use any appropriate methodology to calculate its Scope 3 emissions, the Partnership for Carbon Accounting Financials' Global GHG Accounting & Reporting Standard (the “PCAF Standard”) provides one methodology that complements the GHG Protocol and assists financial institutions in calculating their financed emissions.
At this time, we are not proposing to require a particular methodology for the financial sector in order to provide a financial sector registrant the flexibility to choose the methodology that best suits its particular portfolio and financing activities. We believe the proposed requirement to disclose the methodology used (
We are proposing additional rules related to the methodology for calculating GHG emissions. Some of these rules would apply generally to the determination of GHG emissions while some would apply specifically to the calculation of Scope 3 emissions. For example, one proposed rule would provide that a registrant may use reasonable estimates when disclosing its GHG emissions as long as it also describes the assumptions underlying, and its reasons for using, the estimates.
Several commenters indicated that a registrant may find it difficult to complete its GHG emissions calculations for its most recently completed fiscal year in time to meet its disclosure obligations for that year's Exchange Act annual report.
Another proposed provision would require a registrant to disclose, to the extent material and as applicable, any use of third-party data when calculating its GHG emissions, regardless of the particular scope of emissions.
One proposed provision would require a registrant to disclose any material change to the methodology or assumptions underlying its GHG emissions disclosure from the previous fiscal year.
Another proposed provision would require a registrant to disclose, to the extent material and as applicable, any gaps in the data required to calculate its GHG emissions.
One proposed provision would provide that, when determining whether its Scope 3 emissions are material, and when disclosing those emissions, in addition to emissions from activities in its value chain, a registrant must include GHG emissions from outsourced activities that it previously conducted as part of its own operations, as reflected in the financial statements for the periods covered in the filing.
Another proposed provision would provide that, if a registrant is required to disclose Scope 3 emissions, and if there was any significant overlap in the categories of activities producing the Scope 3 emissions, the registrant must describe the overlap, how it accounted for the overlap, and its disclosed total Scope 3 emissions.
Finally, a proposed provision would provide that a registrant may present its estimated Scope 3 emissions in terms of a range as long as it discloses its reasons for using the range and the underlying assumptions.
115. Should we require a registrant to disclose the methodology, significant inputs, and significant assumptions used to calculate its GHG emissions metrics, as proposed? Should we require a registrant to use a particular methodology for determining its GHG emission metrics? If so, should the required methodology be pursuant to the GHG Protocol's Corporate Accounting and Reporting Standard and related standards and guidance? Is there another methodology that we should require a registrant to follow when determining its GHG emissions? Should we base our climate disclosure rules on certain concepts developed by the GHG Protocol without requiring a registrant to follow the GHG Protocol in all respects, as proposed? Would this provide flexibility for registrants to choose certain methods and approaches in connection with GHG emissions determination that meet the particular circumstances of their industry or business or that emerge along with developments in GHG emissions methodology as long as they are transparent about the methods and underlying assumptions used? Are there adjustments that should be made to the proposed methodology disclosure requirements that would provide flexibility for registrants while providing sufficient comparability for investors?
116. Should we require a registrant to disclose the organizational boundaries used to calculate its GHG emissions, as proposed? Should we require a registrant to determine its organizational boundaries using the same scope of entities, operations, assets, and other holdings within its business organization as that used in its consolidated financial statements, as proposed? Would prescribing this method of determining organizational boundaries avoid potential investor confusion about the reporting scope used in determining a registrant's GHG emissions and the reporting scope used for the financial statement metrics, which are included in the financial statements? Would prescribing this method of determining organizational boundaries result in more robust guidance for registrants and enhanced comparability for investors? If, as proposed, the organizational boundaries must be consistent with the scope of the registrant's consolidated financial statements, would requiring separate disclosure of the organizational boundaries be redundant or otherwise unnecessary?
117. Except for calculating Scope 3 emissions, the proposed rules would not require a registrant to disclose the emissions from investments that are not consolidated, proportionately consolidated, or that do not qualify for the equity method of accounting. Should we require such disclosures for Scopes 1 and 2 emissions, and if so, how?
118. Could situations arise where it is impracticable for a registrant to align the scope of its organizational boundaries for GHG emission data with the scope of the consolidation for the rest of its financial statements? If so, should we allow a registrant to take a different approach to determining the organizational boundaries of its GHG emissions and provide related disclosure, including an estimation of the resulting difference in emissions disclosure (in addition to disclosure about methodology and other matters that would be required by the proposed GHG emissions disclosure rules)?
119. Alternatively, should we require registrants to use the organizational boundary approaches recommended by the GHG Protocol (
120. Should we require a registrant to disclose its operational boundaries, as proposed? Should we require a registrant to discuss its approach towards the categorization of emissions (
121. The proposed operational boundaries disclosure is based largely on concepts developed by the GHG Protocol. Would requiring a registrant to determine its organizational boundaries pursuant to the GAAP applicable to the financial statement metrics included in the financial statements but its operational boundaries largely pursuant to concepts developed by the GHG Protocol cause confusion? Should we require a registrant to apply the GAAP applicable to its financial statements when determining whether it “controls” a particular source pursuant to the definition of Scope 1 emissions, or particular operations pursuant to the definition of Scope 2 emissions, as proposed? If not, how should “control” be determined and would applying a definition of control that differs from applicable GAAP result in confusion for investors?
122. Should we require a registrant to use the same organizational boundaries when calculating its Scopes 1 and 2 emissions, as proposed? Are there any circumstances when a registrant's organizational boundaries for determining its Scope 2 emissions should differ from those required for determining its Scope 1 emissions? Should we also require a registrant to apply the same organizational boundaries used when determining its Scopes 1 and 2 emissions as an initial step in identifying the sources of indirect emissions from activities in its value chain over which it lacks ownership and control and which must be included in the calculation of its Scope 3 emissions, as proposed? Are there any circumstances where using a different organizational boundary for purposes of Scope 3 emissions disclosure would be appropriate?
123. Should we require a registrant to be consistent in its use of its organizational and operational boundaries once it has set those boundaries, as proposed? Would the proposed requirement help investors to track and compare the registrant's GHG emissions over time?
124. Should we require a registrant to disclose the methodology for calculating the GHG emissions, including any emission factors used and the source of the emission factors, as proposed? Should we require a registrant to use a particular set of emission factors, such as those provided by the EPA or the GHG Protocol?
125. Should we permit a registrant to use reasonable estimates when disclosing its GHG emissions as long as it also describes the assumptions underlying, and its reasons for using, the estimates, as proposed? Should we permit the use of estimates for only certain GHG emissions, such as Scope 3 emissions? Should we permit a registrant to use a reasonable estimate of its GHG emissions for its fourth fiscal quarter if no actual reported data is reasonably available, together with actual, determined GHG emissions data for its first three fiscal quarters when disclosing its GHG emissions for its most recently completed fiscal year, as long as the registrant promptly discloses in a subsequent filing any material difference between the estimate used and the actual, determined GHG emissions data for the fourth fiscal quarter, as proposed? If so, should we require a registrant to report any such material difference in its next Form 10-Q if domestic, or in a Form 6-K, if a foreign private issuer? Should we permit a domestic registrant to report any such material difference in a Form 8-K if such form is filed (rather than furnished) with the Commission? Should any such reasonable estimate be subject to conditions to help ensure accuracy and comparability? If so, what conditions should apply?
126. Should we require a registrant to disclose, to the extent material, any use of third-party data when calculating its GHG emissions, regardless of the particular scope of emissions, as proposed? Should we require the disclosure of the use of third-party data only for certain GHG emissions, such as Scope 3 emissions? Should we require the disclosure of the use of third-party data for Scope 3 emissions, regardless of its materiality to the determination of those emissions? If a registrant discloses the use of third-party data, should it also be required to identify the source of such data and the process the registrant undertook to obtain and assess the data, as proposed?
127. Should we require a registrant to disclose any material change to the methodology or assumptions underlying its GHG emissions disclosure from the previous year, as proposed? If so, should we require a registrant to restate its GHG emissions data for the previous year, or for the number of years for which GHG emissions data has been provided in the filing, using the changed methodology or assumptions? If a registrant's organizational or operational boundaries, in addition to methodology or assumptions, change, to what extent should we require such disclosures of the material change, restatements or reconciliations? In these cases, should we require a registrant to apply certain accounting standards or principles, such as FASB ASC Topic 250, as guidance regarding when retrospective disclosure should be required?
128. Should we require a registrant to disclose, to the extent material, any gaps in the data required to calculate its GHG emissions, as proposed? Should we require the disclosure of data gaps only for certain GHG emissions, such as Scope 3 emissions? If a registrant discloses any data gaps encountered when calculating its Scope 3 emissions or other type of GHG emissions, should it be required to discuss whether it used proxy data or another method to address such gaps, and how its management of any data gaps has affected the accuracy or completeness of its GHG emissions disclosure, as proposed? Are there other disclosure requirements or conditions we should adopt to help investors obtain a reasonably complete understanding of a registrant's exposure to the GHG emissions sourced by each scope of emissions?
129. When determining the materiality of its Scope 3 emissions, or when disclosing those emissions, should a registrant be required to include GHG emissions from outsourced activities that it previously conducted as part of its own operations, as reflected in the financial statements for the periods covered in the filing, in addition to emissions from activities in its value chain, as proposed? Would this requirement help ensure that investors receive a complete picture of a registrant's carbon footprint by precluding the registrant from excluding emissions from activities that are typically conducted as part of operations over which it has ownership or control but that are outsourced in order to reduce its Scopes 1 or 2 emissions? Should a requirement to include outsourced activities be subject to certain conditions or exceptions and, if so, what conditions or exceptions?
130. Should we require a registrant that must disclose its Scope 3 emissions to discuss whether there was any
131. Should we permit a registrant to present its Scope 3 emissions in terms of a range as long as it discloses its reasons for using the range and the underlying assumptions, as proposed? Should we place limits or other parameters regarding the use of a range and, if so, what should those limits or parameters be? For example, should we require a range to be no larger than a certain size? What other conditions or guidance should we provide to help ensure that a range, if used, is not overly broad and is otherwise reasonable?
132. Should we require a registrant to follow a certain set of published standards for calculating Scope 3 emissions that have been developed for a registrant's industry or that are otherwise broadly accepted? For example, should we require a registrant in the financial industry to follow PCAF's Global GHG Accounting & Reporting Standard for the Financial Industry when calculating its financed emissions within the “Investments” category of Scope 3 emissions? Are there other industry-specific standards that we should require for Scope 3 emissions disclosure? Should we require a registrant to follow the GHG Protocol's Corporate Value Chain (Scope 3) Accounting and Reporting Standard if an industry-specific standard is not available for Scope 3 emissions disclosure? If we should require the use of a third-party standard for Scope 3 emissions reporting, or any other scope of emissions, how should we implement this requirement?
We recognize that the calculation and disclosure of Scope 3 emissions may pose difficulties compared to Scopes 1 and 2 emissions, which has caused concern for some commenters.
Depending on the size and complexity of a company and its value chain, the task of calculating Scope 3 emissions could be challenging.
To balance concerns about reporting Scope 3 emissions with the need for decision-useful emissions disclosure, we are proposing the following accommodations for Scope 3 emissions disclosure:
• A safe harbor for Scope 3 emissions disclosure from certain forms of liability under the Federal securities laws;
• An exemption for smaller reporting companies (“SRCs”) from the Scope 3 emissions disclosure provision;
• A delayed compliance date for Scope 3 emissions disclosure.
We are proposing a safe harbor for Scope 3 emissions disclosure to alleviate concerns that registrants may have about liability for information that would be derived largely from third parties in a registrant's value chain. Many commenters recommended that the Commission adopt a safe harbor for climate-related disclosures.
While we are not proposing a broad safe harbor for all climate-related disclosures, many of which are similar
Several commenters expressed concern that the Commission would impose a “one size fits all” approach, which could disproportionately impact smaller registrants, when adopting climate-related disclosure rules.
Although we are not proposing to exempt SRCs from the full scope of the proposed climate-related disclosure rules, we are proposing to exempt SRCs from the proposed Scope 3 emissions disclosure requirement.
To further ease the burden of complying with the proposed Scope 3 disclosure requirement, we are also proposing a delayed compliance date for this requirement. As explained in greater detail below, all registrants, regardless of their size, would have an additional year to comply initially with the Scope 3 disclosure requirement beyond the compliance date for the other proposed rules. Moreover, because a registrant's Scope 3 emissions consist of the Scopes 1 and 2 emissions of its suppliers, distributors, and other third parties in the registrant's value chain, to the extent those parties become subject to the proposed rules, the increased availability of Scopes 1 and 2 emissions data following the rules' effectiveness should help ease the burden of complying with the Scope 3 emissions disclosure requirement.
Finally, we note that Securities Act Rule 409 and Exchange Act Rule 12b-21, which provide accommodations for information that is unknown and not reasonably available, would be available for the proposed Scope 3 emissions disclosures.
133. Should we provide a safe harbor for Scope 3 emissions disclosure, as proposed? Is the scope of the proposed safe harbor clear and appropriate? For example, should the safe harbor apply to any registrant that provides Scope 3 disclosure pursuant to the proposed rules, as proposed? Should we limit the use of the safe harbor to certain classes of registrants or to registrants meeting certain conditions and, if so, which classes or conditions? For example, should we require the use of a particular methodology for calculating and reporting Scope 3 emissions, such as the PCAF Standard if the registrant is a financial institution, or the GHG Protocol Scope 3 Accounting and Reporting Standard for other types of registrants? Should we clarify the scope of persons covered by the language “by or on behalf of a registrant” by including language about outside reviewers retained by the registrant or others? Should we define a “fraudulent statement,” as proposed? Is the level of diligence required for the proposed safe harbor (
134. Should we provide an exemption from Scope 3 emissions disclosure for SRCs, as proposed? Should the exemption not apply to a SRC that has set a target or goal or otherwise made a commitment to reduce its Scope 3 emissions? Are there other classes of registrants we should exempt from the
The proposed rules would require a registrant, including a foreign private issuer, that is an accelerated filer or large accelerated filer to include in the relevant filing an attestation report covering the disclosure of its Scope 1 and Scope 2 emissions
To provide additional clarity, the following table illustrates the application of the transition periods assuming that the proposed rules will be adopted with an effective date in December 2022 and that the accelerated filer or large accelerated filer has a December 31st fiscal year-end:
During the transition period when limited assurance is required, the proposed rules would permit an accelerated filer or a large accelerated filer, at its option, to obtain reasonable assurance of its Scope 1 and 2 emissions disclosure.
At its option, an accelerated filer or a large accelerated filer would be able to obtain any level of assurance over its climate-related disclosures that are not required to be assured pursuant to proposed Item 1505(a). For example, an accelerated filer or a large accelerated filer could voluntarily include an attestation report at the limited assurance level for its GHG intensity metrics or its Scope 3 emissions disclosure. To avoid potential confusion, however, the voluntary assurance obtained by such filer would be required to follow the requirements of proposed Item 1505(b)-(d), including using the same attestation standard as the required assurance over Scope 1 and Scope 2.
Many commenters recommended that we require climate-related disclosures to be subject to some level of assurance to enhance the reliability of the disclosures.
One commenter recommended that, at a minimum, we require a registrant to obtain a limited assurance report for its Scopes 1 and 2 emissions disclosure while encouraging optional verification for other ESG metrics.
Some commenters, however, opposed any third-party assurance requirement for climate-related disclosures because of the significant cost that these commenters asserted it could impose on public companies, and because, in their view, application of assurance standards to data that is different from traditional financial reporting disclosures, such as GHG emissions, would be a relatively new and evolving field.
We recognize that requiring GHG emissions disclosure in Commission filings should enhance the consistency, comparability, and reliability of such disclosures due to the application of DCP and the proposed inclusion of certain prescriptive elements that may help improve standardization of GHG emissions calculations. Nevertheless, the evolving and unique nature of GHG emissions reporting involves and, in some cases, warrants varying methodologies, differing assumptions, and a substantial amount of estimation. Certain aspects of GHG emissions disclosure also involve reliance on third-party data. As such, requiring a third party's attestation over these disclosures would provide investors with an additional degree of reliability regarding not only the figures that are disclosed, but also the key assumptions, methodologies, and data sources the registrant used to arrive at those figures. In other contexts, such as mineral resources and oil and gas reserves, the Commission has recognized the value that third parties with specialized expertise in audit and engineering can bring to company disclosures of physical resources or risks.
Our rules typically do not require registrants to obtain assurance over disclosure provided outside of the financial statements, including quantitative disclosure. We believe, however, that there are important distinctions between existing quantitative disclosure required to be provided outside of the financial statements and the proposed GHG emissions disclosure. In contrast to GHG emissions disclosure, quantitative disclosure outside of the financial statements typically is derived, at least in part, from the same books and records that are used to generate a registrant's audited financial statements and accompanying notes and that are subject to ICFR. Accordingly, such quantitative disclosure has been subject to audit procedures as part of the audit of the financial statements in the same filing. Further, the auditor's read and consider obligation requires an evaluation of this quantitative information based on the information obtained through the audit of the financial statements.
For similar reasons, we also considered proposing to require that management assess and disclose the effectiveness of controls over GHG
The Commission has long recognized the important role played by an independent audit in contributing to the reliability of financial reporting.
Increasing investor demand for consistent, comparable, and reliable climate-related financial information appears to have led a growing number of companies to voluntarily obtain third-party assurance over their climate-related disclosures both within the U.S. and globally. For example, according to one study, 53% of the S&P 500 companies had some form of assurance or verification over climate-related metrics, along with other metrics.
Although many registrants have voluntarily obtained some level of assurance for their climate-related disclosures, current voluntary ESG assurance practices have been varied with respect to the levels of assurance provided (
To improve accuracy, comparability, and consistency with respect to the proposed GHG emissions disclosure, we are proposing to require a minimum level of attestation services for accelerated filers and large accelerated filers including: (1) Limited assurance for Scopes 1 and 2 emissions disclosure that scales up to reasonable assurance after a specified transition period; (2) minimum qualifications and independence requirements for the attestation service provider; and (3) minimum requirements for the accompanying attestation report. These proposed requirements would be minimum standards that the GHG emissions attestation provider engaged by accelerated filers and large accelerated filers must meet, but, as mentioned above, would not prevent a registrant from obtaining a heightened level of assurance over its climate-related disclosures (prior to the transition to reasonable assurance) or to obtain assurance over climate-related disclosures other than Scope 1 and Scope 2 emissions.
By specifying minimum standards for the attestation provided with respect to GHG emissions disclosure by accelerated filers and large accelerated filers, the proposed rules should improve accuracy and consistency in the reporting of this information, while also providing investors with an enhanced level of reliability against which to evaluate the disclosure. In addition to the proposed minimum standards for attestation services, the proposed additional disclosure requirements for registrants, described below, should further assist investors in understanding the qualifications and suitability of the GHG emissions attestation provider selected by the registrant, particularly in light of the broad spectrum of attestation providers that would be permitted to provide attestation services under the proposed rules.
Although we are proposing certain minimum standards for attestation services, this proposal does not aim to create or adopt a specific attestation standard for assuring GHG emissions, just as this proposal does not define a single methodology for calculating GHG emissions. This is because both the reporting and attestation landscapes are currently evolving and it would be premature to adopt one approach and potentially curtail future innovations in these two areas. The evolving nature of GHG emissions calculations and attestation standards could suggest that it may also be premature to require assurance. We are soliciting comment on the feasibility of our proposal and will consider any public feedback received, but we have preliminarily determined that the phased-in approach that we are proposing, along with an extended period for disclosure compliance for accelerated filers, balances the benefits of third-party review with the costs of seeking assurance in this evolving space.
The proposed minimum standards for attestation services and the proposed additional disclosure requirements would not eliminate fragmentation with respect to assurance or obviate the need for investors to assess and compare multiple attestation standards. Nevertheless, we believe some flexibility in our approach is warranted at this time given the unique and evolving nature of third-party assurance for climate-related disclosures. We believe the proposed minimum standards and additional disclosure requirements would enable investors to better understand the assurance that has been provided.
We are cognizant of the fact that the calculation and disclosure of GHG emissions would be new for many registrants, as would be the application of assurance standards to GHG emissions disclosure. For these reasons and the reasons discussed in greater detail below, we are proposing to require assurance (1) only for accelerated filers and large accelerated filers, (2) only with respect to Scope 1 and Scope 2 emissions, and (3) with an initial transition period for limited assurance and a subsequent transition period for reasonable assurance.
Although we have considered the challenges that mandatory assurance of GHG emissions disclosure could present, accelerated filers and large accelerated filers should have the necessary resources to devote to complying with such requirements over the proposed implementation timetable. For the many large accelerated filers that are already voluntarily obtaining some form of assurance over their GHG emissions, any cost increases associated with complying with the proposed rules would be mitigated.
The proposed transition periods would also provide existing accelerated filers and large accelerated filers one fiscal year to transition to limited assurance
In addition to the challenges posed by the newness of calculating and disclosing GHG emissions, we believe that only requiring assurance over Scope 1 and Scope 2 emissions would be appropriate because the emissions result directly or indirectly from
We are proposing to require accelerated filers and large accelerated filers to obtain limited assurance, with an eventual scaling up to reasonable assurance. The objective of a limited assurance engagement is for the service provider to express a conclusion about whether it is aware of any material modifications that should be made to the subject matter (
Reasonable assurance is feasible whenever limited assurance can be provided on a subject,
135. Should we require accelerated filers and large accelerated filers to obtain an attestation report covering their Scope 1 and Scope 2 emissions disclosure, as proposed? Should we require accelerated filers and large accelerated filers to obtain an attestation report covering other aspects of their climate-related disclosures beyond Scope 1 and 2 emissions? For example, should we also require the attestation of GHG intensity metrics, or of Scope 3
136. If we required accelerated filers and large accelerated filers to obtain an attestation report covering Scope 3 emissions disclosure, should the requirement be phased-in over time? If so, what time frame? Should we require all Scope 3 emissions disclosure to be subject to assurance or only certain categories of Scope 3 emissions? Would it be possible for accelerated filers and large accelerated filers to obtain an attestation report covering the process or methodology for calculating Scope 3 emissions rather than obtaining an attestation report covering the calculations of Scope 3 emissions? Alternatively, is there another form of verification over Scope 3 disclosure that would be more appropriate than obtaining an attestation report?
137. Should the attestation requirement be limited to accelerated filers and large accelerated filers, as proposed? Alternatively, should the attestation requirement be limited to a subset of accelerated filers and large accelerated filers? If so, what conditions should apply? Should the attestation requirement only apply to well-known seasoned issuers?
138. Instead of requiring only accelerated filers and large accelerated filers to include an attestation report for Scope 1 and Scope 2 emissions, should the proposed attestation requirements also apply to registrants other than accelerated filers and large accelerated filers? If so, should the requirement apply only after a specified transition period? Should such registrants be required to provide assurance at the same level as accelerated filers and large accelerated filers and over the same scope of GHG emissions disclosure, or should we impose lesser requirements (
139. Should we require accelerated filers and large accelerated filers to initially include attestation reports reflecting attestation engagements at a limited assurance level, eventually increasing to a reasonable assurance level, as proposed? What level of assurance should apply to the proposed GHG emissions disclosure, if any, and when should that level apply? Should we provide a one fiscal year transition period between the GHG emissions disclosure compliance date and when limited assurance would be required for accelerated filers and large accelerated filers, as proposed? Should we provide an additional two fiscal year transition period between when limited assurance is first required and when reasonable assurance is required for accelerated filers and large accelerated filers, as proposed?
140. Should we provide the same transition periods (from the Scopes 1 and 2 emissions disclosure compliance date) for accelerated filers and large accelerated filers, as proposed? Instead, should different transition periods apply to accelerated filers and large accelerated filers? Should we provide transition periods with different lengths than those proposed? Should we require the attestation to be at a reasonable assurance level without having a transition period where only limited assurance is required? Should we instead impose assurance requirements to coincide with reporting compliance periods?
141. Under prevailing attestation standards, “limited assurance” and “reasonable assurance” are defined terms that we believe are generally understood in the marketplace, both by those seeking and those engaged to provide such assurance. As a result, we have not proposed definitions of those terms. Should we define “limited assurance” and “reasonable assurance” and, if so, how should we define them? Would providing definitions in this context cause confusion in other attestation engagements not covered by the proposed rules? Are the differences between these types of attestation engagements sufficiently clear without providing definitions?
142. As proposed, there would be no requirement for a registrant to either provide a separate assessment and disclosure of the effectiveness of controls over GHG emissions disclosure by management or obtain an attestation report from a GHG emissions attestation provider specifically covering the effectiveness of controls over GHG emissions disclosure. Should we require accelerated filers and large accelerated filers to provide a separate management assessment and disclosure of the effectiveness of controls over GHG emissions disclosure (separate from the existing requirements with respect to the assessment and effectiveness of DCP)? Should we require management to provide a statement in their annual report on their responsibility for the design and evaluation of controls over GHG emissions disclosure and to disclose their conclusion regarding the effectiveness of such controls? Instead of, or in addition to, such management assessment and statement, should we require the registrant to obtain an attestation report from a GHG emissions attestation provider that covers the effectiveness of such GHG emissions controls as of the date when the accelerated filer or large accelerated filer is required to comply with the reasonable assurance requirement under proposed Item 1505(a)? If so:
(i) Would it be confusing to apply either such requirement in light of the existing DCP requirements that would apply to the proposed GHG emissions disclosure?
(ii) Would a separate management assessment and statement on the effectiveness of controls over GHG emissions provide meaningful disclosure to investors beyond the existing requirement for DCP?
(iii) Should we specify that the separate management assessment and statement must be provided by the accelerated filer's or large accelerated filer's principal executive and principal financial officers, or persons performing similar functions? Should we clarify which members of the accelerated filer or large accelerated filer's management should be involved in performing the underlying assessment?
(iv) What controls framework(s) would the effectiveness of the registrant's controls over GHG emissions disclosure be evaluated against, if any?
(v) For the GHG emissions attestation provider, what requirements should be applied to such GHG emissions disclosure controls attestation requirement? For example, what attestation standards should apply? Should other service provider(s) in addition to or in lieu of the GHG emissions attestation provider be permitted to provide such attestation over the effectiveness of the GHG controls?
(vi) Should we limit such a requirement to accelerated filers and
(vii) What would be the potential benefits and costs of either approach?
(viii) Should we require a certification on the design and evaluation of controls over GHG emissions disclosures by officers serving in the principal executive and principal financial officer roles or persons performing similar functions for an accelerated filer or large accelerated filer? Would a certification requirement have any additional benefits or impose any additional costs when compared to a requirement for management to assess and disclose in a statement in the annual report the effectiveness of controls over GHG emissions?
143. We considered whether to require registrants to include the GHG emissions metrics in the notes or a separate schedule to their financial statements, by amending Regulation S-X instead of Regulation S-K.
(i) Would there be benefits to including this information in a registrant's financial statements? For example, would requiring the GHG emissions disclosure to be included in the financial statements improve the consistency, comparability, reliability, and decision-usefulness of the information for investors? Would it facilitate the integration of GHG metrics and targets into the registrant's financial analysis? Would such placement cause registrants to incur significantly more expense in obtaining an audit of the disclosure? If so, please quantify those additional expenses where possible.
(ii) Should we require a registrant to include the GHG emissions disclosure in its audited financial statements so that the disclosure would be subject to the existing requirements for an independent audit and ICFR? If so, we seek comment on the following aspects of this alternative:
(a) If GHG emissions disclosure is subject to ICFR, or an internal control framework similar to ICFR, would GHG emissions disclosure be more reliable compared to what is currently proposed? What are the benefits or costs?
(b) Should the GHG emissions disclosure be included in a note to the registrant's financial statements (
(c) PCAOB auditing standards apply to the audit of a registrant's financial statements. If GHG emissions disclosure is included in a supplemental schedule to the financial statements, should we allow other auditing standards to be applied? If so, which ones? What, if any, additional guidance or revisions to such standards would be needed in order to apply them to the audit of GHG emissions disclosure?
(d) What are the costs and benefits of employing registered public accounting firms to perform audits of GHG emissions disclosure and related attestation of internal controls? Are there potential cost savings in employing registered public accountants that currently perform audits of financial statements and attestation of ICFR to review GHG emissions disclosure and any related internal controls? If we require GHG emissions disclosure to be presented in the financial statements, should we permit entities other than registered public accounting firms to provide assurance of this information, as proposed for the current attestation requirements under Regulation S-K? If not limited to registered public accounting firms, who should be permitted to provide assurance of GHG emissions disclosure? Should we permit environmental consultants, engineering firms, or other types of specialists to provide assurance? What are the costs and benefits of such approach? Would the reliability of the audits and therefore the information disclosed be affected if assurance providers other than registered public accounting firms are permitted to conduct these audits? Please provide supporting data where possible. If we should allow for assurance providers that are not registered public accounting firms, what qualifications and oversight should they have, and what requirements should we impose on them? Should we direct the PCAOB to develop a separate registration process for service providers that are not otherwise registered? What expertise, independence and quality control standards should apply?
(e) What would be the other potential benefits and costs of such an approach?
The proposed rules would require the GHG emissions attestation report required by proposed Item 1505(a) for accelerated filers and large accelerated filers to be prepared and signed by a GHG emissions attestation provider.
• Is an expert in GHG emissions by virtue of having significant experience in measuring, analyzing, reporting, or attesting to GHG emissions. Significant experience means having sufficient competence and capabilities necessary to:
o perform engagements in accordance with professional standards and applicable legal and regulatory requirements; and
o enable the service provider to issue reports that are appropriate under the circumstances.
• Is independent with respect to the registrant, and any of its affiliates,
The proposed expertise requirement is intended to help ensure that the service provider preparing the attestation report has sufficient competence and capabilities necessary to execute the attestation engagement. In this regard, if the service provider is a firm, we would expect that it have policies and procedures designed to provide it with reasonable assurance that the personnel selected to conduct the GHG emissions attestation engagement have significant experience with respect to both attestation engagements and GHG disclosure. This would mean that the service provider has the qualifications necessary for fulfillment of the responsibilities that it would be called on to assume, including the appropriate engagement of
The second proposed requirement is modeled on the Commission's qualifications for accountants under 17 CFR 210.2-01 (Rule 2-01 of Regulation S-X), which are designed to ensure that auditors are independent of their audit clients. Similar to how assurance provided by independent public accountants improves the reliability of financial statements and disclosures and is a critical component of our capital markets, assurance of GHG emissions disclosure by independent service providers should also improve the reliability of such disclosure. Academic studies demonstrate that assurance provided by an independent auditor reduces the risk that an entity provides materially inaccurate information to external parties, including investors, by facilitating the dissemination of transparent and reliable financial information.
Similar to Rule 2-01 of Regulation S-X,
The proposed rules would further state that, in determining whether a GHG emissions attestation provider is independent, the Commission will consider:
• Whether a relationship or the provision of a service creates a mutual or conflicting interest between the attestation provider and the registrant (or any of its affiliates), places the attestation provider in the position of attesting to such attestation provider's own work, results in the attestation provider acting as management or an employee of the registrant (or any of its affiliates), or places the attestation provider in a position of being an advocate for the registrant (or any of its affiliates);
• all relevant circumstances, including all financial or other relationships between the attestation provider and the registrant (or any of its affiliates), and not just those relating to reports filed with the Commission.
These proposed provisions are modeled on the factors used by the Commission in determining whether an accountant is independent.
Because the GHG emissions attestation provider would be a person whose profession gives authority to the statements made in the attestation report and who is named as having provided an attestation report that is part of the registration statement, the registrant would be required to obtain and include the written consent of the GHG emissions attestation provider pursuant to Securities Act Section 7,
144. Should we require a registrant to obtain a GHG emissions attestation report that is provided by a GHG emissions attestation provider that meets specified requirements, as proposed? Should one of the requirements be that the attestation provider is an expert in GHG emissions, with significant experience in measuring, analyzing, reporting, or attesting to GHG emissions, as proposed? Should we specify that significant experience means having sufficient competence and capabilities
145. Is additional guidance needed with respect to the proposed expertise requirement? Should we instead include prescriptive requirements related to the qualifications and characteristics of an expert under the proposed rules? For example, should we include a provision that requires a GHG emissions attestation provider that is a firm to have established policies and procedures designed to provide it with reasonable assurance that the personnel selected to provide the GHG attestation service have the qualifications necessary for fulfillment of the responsibilities that the GHG emissions attestation provider will be called on to assume, including the appropriate engagement of specialists, if needed?
146. Should we require the GHG emissions attestation provider to be independent with respect to the registrant, and any of its affiliates, for whom it is providing the attestation report, as proposed? Should we specify that a GHG emissions attestation provider is not independent if such attestation provider is not, or a reasonable investor with knowledge of all relevant facts and circumstances would conclude that such attestation provider is not, capable of exercising objective and impartial judgment on all issues encompassed within the attestation provider's engagement, as proposed? The proposed provision is based on a similar provision regarding the qualification of an accountant to be an independent auditor under Rule 2-01 of Regulation S-X. Is Rule 2-01 an appropriate model for determining the independence of a GHG emissions attestation provider? Is being independent from a registrant and its affiliates an appropriate qualification for a GHG emissions attestation provider?
147. Should we specify that the factors the Commission would consider in determining whether a GHG emissions attestation provider is independent include whether a relationship or the provision of a service creates a mutual or conflicting interest between the attestation provider and the registrant, including its affiliates, places the attestation provider in the position of attesting to such attestation provider's own work, results in the attestation provider acting as management or an employee of the registrant, including its affiliates, or places the attestation provider in a position of being an advocate for the registrant and its affiliates, as proposed? Should we specify that the Commission also will consider all relevant circumstances, including all financial and other relationships between the attestation provider and the registrant, including its affiliates, and not just those relating to reports filed with the Commission, as proposed?
148. Should we adopt all of the proposed factors for determining the independence of a GHG emissions attestation provider, or are there factors we should omit? Are there any additional factors that we should specify that the Commission will consider when determining the independence of a GHG emissions attestation provider? For example, should we include any non-exclusive specifications of circumstances that would be inconsistent with the independence requirements, similar to those provided in 17 CFR 210.2-01(c) (Rule 2-01(c) of Regulation S-X)?
149. Should the definition of “affiliates” be modeled on Rule 2-01, as proposed, or should we use a different definition? Would defining the term differently than proposed cause confusion because the rest of the proposed independence requirement is modeled on Rule 2-01? Many accountants are likely familiar with the proposed definition given their required compliance with Rule 2-01, would non-accountants understand how to comply with and apply this concept?
150. Should the term “attestation and professional engagement period” be defined in the proposed manner? If not, how should “attestation and professional engagement period” be defined? Alternatively, should the Commission specify a different time period during which an attestation provider must meet the proposed independence requirements?
151. Should we include disclosure requirements when there is a change in, or disagreement with, the registrant's GHG emissions attestation provider that are similar to the disclosure requirements in Item 4.01 of Form 8-K and 17 CFR 229.304 (Item 304 of Regulation S-K)?
152. Accountants are already required to comply with the relevant quality control and management standards when providing audit and attest services under the PCAOB, AICPA, or IAASB standards. These quality control and management standards would apply to accountants providing GHG attestation services pursuant to those standards as well. Should we require the GHG emissions attestation provider to comply with additional minimum quality control requirements (
153. As proposed, the GHG emissions attestation provider would be a person whose profession gives authority to statements made in the attestation report and who is named as having provided an attestation report that is part of the registration statement, and therefore the registrant would be required to obtain and include the written consent of the GHG emissions provider pursuant to Securities Act Section 7 and related Commission rules. This would subject the GHG emissions attestation provider to potential liability under Section 11 of the Securities Act. Would the possibility of Section 11 liability deter qualified persons from serving as GHG emissions attestation providers? Should we include a provision similar to 17 CFR 230.436(c), or amend that rule, to provide that a report on GHG emissions at the limited assurance level by a GHG emissions attestation provider that has reviewed such information is not considered part of a registration statement prepared or certified by a person whose profession gives authority to a statement made by him or a report prepared or certified by such person within the meaning of Section 7 and 11 of the Act?
The proposed rules would require the attestation report required by proposed Item 1505(a) for accelerated filers and large accelerated filers to be included in the separately-captioned “Climate-Related Disclosure” section in the
In our view, the attestation standards, for example, of the PCAOB,
The proposed rules would not include any requirement for a registrant to obtain an attestation report covering the effectiveness of internal control over GHG emissions disclosure, and therefore such a report would not be required even when the GHG emissions attestation engagement is performed at a reasonable assurance level. Given the current evolving state of GHG emissions reporting and assurance, we believe that existing DCP obligations, and the proposed requirement that accelerated filers and large accelerated filers initially obtain at least limited assurance of such disclosure, are appropriate first steps toward enhancing the reliability of GHG emissions disclosure. We also note that, under prevailing attestation standards for limited assurance engagements, the testing of and attestation over internal controls are not required.
We recognize that the attestation standards that a GHG emissions attestation provider may use would have specific requirements for the form and content of attestation reports. The proposed rules would require a GHG emissions attestation provider to follow the specific requirements regarding form and content of the reports set forth by the attestation standard (or standards) used by such attestation provider.
The proposed minimum attestation engagement and report requirements are primarily derived from the AICPA's attestation standards (
As proposed, the GHG emissions attestation report would be required to include an identification or description of the subject matter or assertion on which the attestation provider is
The proposed rules would also require the GHG emissions attestation report to include the point in time or period of time to which the measurement or evaluation of the subject matter or assertion relates.
The proposed rules would also require the attestation report to identify the criteria against which the subject matter was measured or evaluated.
Prevailing attestation standards require the criteria against which the subject matter is measured or evaluated to be “suitable.” In the context of the proposed rules, suitable criteria would, when followed, result in reasonably consistent measurement or evaluation of the registrant's disclosure that is within the scope of the engagement. Characteristics of suitable criteria include relevance, objectivity, measurability, and completeness.
The GHG emissions attestation report would further be required to include a statement that identifies the level of assurance provided and describes the nature of the attestation engagement.
The proposed rules would require the attestation report to include a statement that identifies the attestation standard (or standards) used.
The attestation report would also be required to include a statement that describes the registrant's responsibility to report on the subject matter or assertion being reported on in order to make it clear to investors who is ultimately responsible for the disclosure.
The proposed rules would further require the attestation report to include a statement that describes the attestation provider's responsibilities in connection with the preparation of the attestation report.
The proposed rules would also require the attestation report to include a statement that the attestation provider is independent, as required by proposed 17 CFR 229.1505(a).
The proposed rules would further require the attestation report, for a limited assurance engagement, to include a description of the work performed as a basis for the attestation provider's conclusion.
The GHG emissions attestation report would also be required to include a statement that describes any significant inherent limitations associated with the measurement or evaluation of the subject matter (at a minimum, Scopes 1 and 2 emissions) against the criteria (
The proposed rules would require the GHG emissions attestation report to include the attestation provider's conclusion or opinion, as applicable, based on the attestation standard(s) used.
Finally, the proposed rules would require the GHG emissions attestation report to include the signature of the attestation provider (whether by an individual or a person signing on behalf of the attestation provider's firm),
154. Should we require the attestation engagement and related attestation report to be provided pursuant to standards that are publicly available at no cost and are established by a body or group that has followed due process procedures, including the broad distribution of the framework for public comment, as proposed? Is the requirement of “due process procedures, including the broad distribution of the framework for public comment” sufficiently clear? Would the attestation standards of the PCAOB, AICPA, and IAASB meet this due process requirement? Are there other standards currently used in the voluntary climate-related assurance market or otherwise in development that would meet the due process and publicly availability requirements? For example, would verification standards commonly used by non-accountants currently, such as ISO 14064-3 and the AccountAbility's AA1000 Series of Standards, meet the proposed requirements? Are there standards currently used in the voluntary climate-related assurance market or otherwise under development that would be appropriate for use under the Commission's climate-related disclosure rules although they may not strictly meet the proposed public comment requirement? If so, please explain whether those standards have other characteristics that would serve to protect investors?
155. Should we require that the attestation standards used be publicly available at no cost to investors, as proposed? Should we permit the use of attestation standards, even if not publicly available at no cost, provided that registrants provide access to those standards at the request of their investors?
156. Should we require the GHG emissions attestation report to meet certain minimum requirements in addition to any form and content requirements set forth by the attestation standard or standards used by the GHG emissions attestation provider, as proposed? Should we instead require that the attestation report solely meet whatever requirements are established by the attestation standard or standards used?
157. Should we adopt each of the proposed minimum requirements? Are there any proposed requirements that we should omit or add to the proposed list of minimum GHG emissions attestation report requirements?
158. Regarding the proposed provision requiring the identification of the criteria against which the subject matter was measured or evaluated, would reference to proposed Item 1504(a), Item 1504(b), and Item 1504(e)'s instructions concerning the
159. If we require or permit a registrant to use the GHG Protocol as the methodology for determining GHG emissions, would the provisions of the GHG Protocol qualify as “suitable criteria” against which the Scope 1 and Scope 2 emissions disclosure should be evaluated?
In addition to the minimum attestation report requirements described above, which reflect the contents of attestation reports under prevailing attestation standards, we are proposing to require disclosure by the registrant of certain additional matters related to the attestation of a registrant's GHG emissions.
These proposed additional disclosures should assist investors in evaluating the qualifications of the GHG emissions attestation provider selected by the registrant, particularly in light of the broad spectrum of attestation providers that would be permitted to provide an attestation report under the proposed rules.
We considered requiring the proposed disclosures to be provided in the attestation report but are not proposing to do so because we are concerned such an approach may create confusion by conflicting with prevalent attestation standards. Furthermore, in light of the variety of attestation service providers the registrant is permitted to engage, requiring the registrant to provide such disclosures may allow the registrant to better provide its investors with relevant information about the qualifications of the service provider that the registrant engaged for the GHG emissions attestation.
With respect to the Scope 1 and Scope 2 emissions attestation required pursuant to proposed Item 1505(a) for accelerated filers and large accelerated filers,
• Whether the attestation provider has a license from any licensing or accreditation body to provide assurance, and if so, the identity of the licensing or accreditation body, and whether the attestation provider is a member in good standing of that licensing or accreditation body;
• Whether the GHG emissions attestation engagement is subject to any oversight inspection program, and if so, which program (or programs);
• Whether the attestation provider is subject to record-keeping requirements with respect to the work performed for the GHG emissions attestation engagement and, if so, identify the record-keeping requirements and the duration of those requirements.
The first two above items of disclosure would help investors better understand the qualifications of the GHG emissions attestation provider, which in turn could help them assess the reliability of the attestation results. An example of a license from a licensing or accreditation body to provide assurance would be a Certified Public Accountant license issued by a state board of accountancy (
160. Should we require certain items of disclosure related to the attestation of a registrant's GHG emissions to be provided by the registrant in its filing that includes the attestation report (where the GHG emissions and other climate-related disclosures are presented), based on relevant information obtained from the GHG emissions attestation provider, as proposed? Should these additional items of disclosure instead be included in the attestation report?
161. Should we require the registrant to disclose whether the attestation provider has a license from any licensing or accreditation body to provide assurance, and if so, the identity of the licensing or accreditation body, and whether the attestation provider is a member in good standing of that licensing or accreditation body, as proposed? In lieu of disclosure, should we require a GHG emissions attestation provider to be licensed to provide assurance by specified licensing or accreditation bodies? If so, which licensing or accreditation bodies should we specify?
162. Should we require a registrant to disclose whether the GHG emissions attestation engagement is subject to any oversight inspection program, and if so, which program (or programs), as proposed? Should we instead require the registrant to disclose whether the attestation engagement is subject to certain specified oversight programs? If so, which oversight programs should we specify?
163. Should we require a registrant to disclose whether the attestation provider is subject to record-keeping requirements with respect to the work performed for the GHG emissions attestation engagement and, if so, identify the record-keeping requirements and duration of those requirements, as proposed? In lieu of disclosure, should we specify that the record-keeping requirements of a GHG emissions attestation provider must be of a certain minimum duration, such as three, five, or seven years, or some other period? Should we specify that the record-keeping requirements must include certain reasonable procedures and, if so, what procedures?
Because GHG emissions reporting and assurance landscapes are both relatively new and evolving as described earlier, at this time, we are proposing to require a registrant, other than a large accelerated filer or an accelerated filer that is required to include a GHG emissions attestation report pursuant to proposed Item 1505(a), to disclose within the separately captioned “Climate-Related Disclosure” section in
(i) Identify the provider of such assurance or verification;
(ii) Describe the assurance or verification standard used;
(iii) Describe the level and scope of assurance or verification provided;
(iv) Briefly describe the results of the assurance or verification;
(v) Disclose whether the third-party service provider has any other business relationships with or has provided any other professional services to the registrant that may lead to an impairment of the service provider's independence with respect to the registrant;
(vi) Disclose any oversight inspection program to which the service provider is subject (
Taken together, these proposed disclosure items should help investors understand the nature and reliability of the attestation or verification provided and help them assess whether the voluntary assurance or verification has enhanced the reliability of the GHG emissions disclosure. We are limiting the proposed assurance disclosure requirement to a registrant's GHG emissions disclosure because registrants are more likely to obtain assurance voluntarily for this disclosure item than for other climate-related disclosures.
164. Should we require a registrant that is not required to include a GHG emissions attestation report pursuant to proposed Item 1505(a) to disclose within the separately captioned “Climate-Related Disclosure” section in the filing the following information, if the registrant's GHG emissions disclosure was subject to third-party attestation or verification, as proposed:
(i) Identify the provider of such assurance or verification;
(ii) Disclose the assurance or verification standard used;
(iii) Describe the level and scope of assurance or verification provided;
(iv) Briefly describe the results of the assurance or verification;
(v) Disclose whether the third-party service provider has any other business relationships with or has provided any other professional services to the registrant that may lead to an impairment of the service provider's independence with respect to the registrant; and
(vi) Disclose any oversight inspection program to which the service provider is subject (
Are there other disclosure items that we should require if a registrant has obtained voluntary assurance or verification of the climate-related disclosures? Are there any of the proposed disclosure items that we should omit? Should we specify parameters or include guidance on when the services provided by a third-party would be considered “assurance” or “verification” and thus require disclosure pursuant to the proposed rules? Should a registrant be required to furnish a copy of or provide a link to the assurance or verification report so that it is readily accessible by an investor?
165. Instead of requiring a registrant to disclose whether the third-party service provider has any other business relationships with or has provided any other professional services to the registrant that may lead to an impairment of the service provider's independence with respect to the registrant as proposed, should we require the third-party service provider to be independent, according to the standard proposed under Item 1505(b) for accelerated filers and large accelerated filers that are required to include a GHG emissions attestation report pursuant to proposed Item 1505(a)? If not, should we provide guidance as to what constitutes an impairment of a service provider's independence with respect to the registrant? Would this result in decision-useful information to an investor? Should we instead require a registrant to disclose whether the third-party service provider would be considered independent under some other independence requirement?
166. As proposed, a registrant would be required to disclose any oversight inspection program to which the service provider is subject, such as the PCAOB's inspection program or the AICPA's peer review program. Are there other oversight programs that we should provide as examples? Would such disclosure provide decision-useful information to an investor? Is it clear what “any oversight inspection program” would include?
167. As proposed, a registrant would not be required to disclose the voluntary assurance or verification fees associated with the GHG disclosures. Should we require GHG disclosure assurance or verification fees to be disclosed? Would such disclosure be decision-useful to investors making voting or investment decisions?
If a registrant has set any climate-related targets or goals, then the proposed rules would require the registrant to provide certain information about those targets or goals.
Many commenters recommended that we require registrants to provide detailed information about their climate-related targets and goals, including action plans and timelines for achieving such targets as GHG emissions reductions and performance data measured against those targets.
If a registrant has set climate-related targets or goals, the proposed rules would require it to disclose them, including, as applicable, a description of:
• The scope of activities and emissions included in the target;
• The unit of measurement, including whether the target is absolute or intensity based;
• The defined time horizon by which the target is intended to be achieved, and whether the time horizon is consistent with one or more goals established by a climate-related treaty, law, regulation, policy, or organization;
• The defined baseline time period and baseline emissions against which progress will be tracked with a consistent base year set for multiple targets;
• Any interim targets set by the registrant; and
• How the registrant intends to meet its climate-related targets or goals.
This information would help investors understand a registrant's particular target or goal and a particular timeline for that target or goal, how the target or goal is to be measured, and how progress against the target or goal is to be tracked. For example, a registrant might disclose that it plans to cut its Scopes 1 and 2 emissions by 50 percent by 2030.
Under the proposed rules, the registrant would be required to disclose the baseline year for multiple targets.
The proposed rules would further require a registrant to discuss how it intends to meet its climate-related targets or goals.
The proposed rules would also require a registrant to disclose relevant data to indicate whether it is making progress toward achieving the target or goal and how such progress has been achieved.
Some companies might establish climate-related goals or targets without yet knowing how they will achieve those goals. They might plan to develop their strategies over time, particularly as new technologies become available that might facilitate their achievement of their goals. The fact that a company has set a goal or target does not mean that it has a specific plan for how it will achieve those goals. What is important is that investors be informed of a registrant's plans and progress wherever it is in the process of developing and implementing its plan.
If the registrant has used carbon offsets or RECs in its plan to achieve climate-related targets or goals, it would be required to disclose the amount of carbon reduction represented by the offsets or the amount of generated renewable energy represented by the RECS, the source of the offsets or RECs, a description and location of the underlying projects, any registries or other authentication of the offsets or RECs, and the cost of the offsets or RECs.
Proposed 17 CFR 229.1505(a)(2) (Item 1505(a)(2)) would state that a registrant may provide the disclosures required by the section when discussing climate-related impacts on its strategy, business model, and outlook (in response to proposed Item 1502) or when discussing its transition plan as part of its risk management disclosure (in response to proposed Item 1503). If so, it need not repeat the disclosure in response to the proposed targets and goals section but should cross-refer to the section where the information has been provided.
A registrant's disclosure of its climate-related targets or goals should not be construed to be promises or guarantees. To the extent that information regarding a registrant's climate-related targets or goals would constitute forward-looking statements, which we would expect, for example, with respect to how a registrant intends to achieve its climate-related targets or goals and expected progress regarding those targets and goals, the PSLRA safe harbors would apply to such statements, assuming all other statutory requirements for those safe harbors are satisfied.
168. Should we require a registrant to disclose whether it has set any targets related to the reduction of GHG emissions, as proposed? Should we also require a registrant to disclose whether it has set any other climate-related target or goal,
169. Should we require a registrant, when disclosing its targets or goals, to disclose:
• The scope of activities and emissions included in the target;
• The unit of measurement, including whether the target is absolute or intensity based;
• The defined time horizon by which the target is intended to be achieved, and whether the time horizon is consistent with one or more goals established by a climate-related treaty, law, regulation, or organization;
• The defined baseline time period and baseline emissions against which progress will be tracked with a consistent base year set for multiple targets;
• Any intervening targets set by the registrant; and
• How it intends to meet its targets or goals, each as proposed?
Are there any other items of information about a registrant's climate-related targets or goals that we should require to be disclosed, in addition to or instead of these proposed items? Are there any proposed items regarding such targets or goals that we should exclude from the required disclosure? If a registrant has set multiple targets or goals, should it be permitted to establish different base years for those targets or goals?
170. Should we require a registrant to discuss how it intends to meet its climate-related targets or goals, as proposed? Should we provide examples of potential items of discussion about a target or goal regarding GHG emissions reduction, such as a strategy to increase energy efficiency, a transition to lower carbon products, purchasing carbon offsets or RECs, or engaging in carbon removal and carbon storage, as proposed? Should we provide additional examples of items of discussion about climate-related targets or goals and, if so, what items should we add? Should we remove any of the proposed examples of items of discussion?
171. Should we require a registrant, when disclosing its targets or goals, to disclose any data that indicates whether the registrant is making progress towards meeting the target and how such progress has been achieved, as proposed?
172. Should we require that the disclosure be provided in any particular format, such as charts? Would certain formats help investors and others better assess these disclosures in the context of assessing the registrant's business and financial condition? What additional or other requirements would help in this regard?
173. If a registrant has used carbon offsets or RECs, should we require the registrant to disclose the amount of carbon reduction represented by the offsets or the amount of generated renewable energy represented by the RECS, the source of the offsets or RECs, the nature and location of the underlying projects, any registries or other authentication of the offsets or RECs, and the cost of the offsets or RECs, as proposed? Are there other items of information about carbon offsets or RECs that we should specifically require to be disclosed when a registrant describes its targets or goals and the related use of offsets or RECs? Are there proposed items of information that we should exclude from the required disclosure about offsets and RECs?
174. Should we apply the PSLRA statutory safe harbors as they currently exist to forward-looking statements involving climate-related targets and goals, or other climate-related forward-looking information? Should we instead create a separate safe harbor for forward-looking climate-related information, including targets and goals? Should we adopt an exception to the PSLRA statutory safe harbors that would extend the safe harbors to climate-related forward-looking disclosures made in an initial public offering registration statement?
The proposed climate-related disclosure rules would apply to a registrant with Exchange Act reporting obligations pursuant to Exchange Act Section 13(a)
companies filing a Securities Act or Exchange Act registration statement. Specifically, we are proposing to require a registrant to include climate-related disclosure in Securities Act or Exchange Act registration statements (Securities Act Forms S-1, F-1, S-3, F-3, S-4, F-4, and S-11, and Exchange Act Forms 10 and 20-F)
The proposed rules would amend Form 20-F and the Securities Act forms that a foreign private issuer may use to register the offer and sale of securities under the Securities Act to require the same climate-related disclosures as proposed for a domestic registrant.
We are not proposing generally to exempt SRCs, EGCs,
175. Should the proposed climate-related disclosures be required in Exchange Act reports and registration statements, as proposed? Should we exempt SRCs from all of the proposed climate-related disclosure rules instead of exempting them solely from Scope 3 emissions disclosure requirements, as proposed? Should we exempt SRCs from certain other proposed climate-related disclosure requirements and, if so, which requirements? For example, in addition to the proposed exemption from Scope 3 emissions disclosure, should we exempt SRCs from the proposed requirement to disclose Scopes 1 and 2 emissions? Are there certain types of other registrants, such as EGCs or business development companies (“BDCs”),
176. Should we require foreign private issuers that report on Form 20-
177. Should we require a registrant to disclose any material changes to the climate-related disclosure provided in its registration statement or annual report in its Form 10-Q or Form 6-K, as proposed? Are there any changes that should be required to be reported on Form 8-K?
178. Should we require the climate-related disclosure in the forms specified above? Is the application of the proposed rules to the forms sufficiently clear, or should we include additional clarifying amendments? For example, would the application of proposed Article 14 to Forms 20-F, F-1 and F-3 be sufficiently clear when a registrant prepares its financial statements pursuant to IFRS as issued by the International Accounting Standards Board (“IASB”) without reconciliation to U.S. generally accepted accounting principles (“U.S. GAAP”), or should we add a related instruction to those forms?
179. Are there certain registration statements or annual reports that should be excluded from the scope of the proposed climate-related disclosure rules? For example, should we exclude Securities Act registration statements filed in connection with a registrant's initial public offering? Would such an accommodation help address concerns about the burdens of transitioning to public company status? We have not proposed to require climate-related disclosures in registration statements on Form S-8 or annual reports on Form 11-K. Should we require such disclosures?
180. Should we require climate-related disclosure in Forms S-4 and F-4, as proposed? Should we provide transitional relief for recently acquired companies? For example, should we provide that a registrant would not be required to provide the proposed climate-related disclosures for a company that is a target of a proposed acquisition under Form S-4 or F-4 until the fiscal year following the year of the acquisition if the target company is not an Exchange Act reporting company and is not the subject of foreign climate-related disclosure requirements that are substantially similar to the Commission's proposed requirements? Should such transitional relief in this instance be for a longer period than one year and, if so, for how long should such transitional relief extend?
181. We have not proposed to amend Form 40-F, the Exchange Act form used by a Canadian issuer eligible to report under the Multijurisdictional Disclosure System (“MJDS”) to register securities or to file its annual report under the Exchange Act, to include the proposed climate-related disclosure requirements. Should we require a Form 40-F issuer to comply with the Commission's proposed climate-related disclosure requirements? Should we permit a MJDS issuer to comply with Canadian climate-related disclosure requirements instead of the proposed rules if they meet certain conditions or provide certain additional disclosures and, if so, which conditions or disclosures?
182. The proposed rules would not apply to asset-backed issuers. The Commission and staff are continuing to evaluate climate-related disclosures with respect to asset-backed securities. Should we require asset-backed issuers to provide some or all of the disclosures under proposed Subpart 1500 of Regulation S-K? If so, which of the proposed disclosures should apply to asset-backed issuers? Are other types of climate disclosure better suited to asset-backed issuers? How can climate disclosure best be tailored to various asset classes?
183. Should we adopt an alternative reporting provision that would permit a registrant that is a foreign private issuer and subject to the climate-related disclosure requirements of an alternative reporting regime that has been deemed by the Commission to be substantially similar to the requirements of proposed Subpart 1500 of Regulation S-K and Article 14 of Regulation S-X to satisfy its disclosure obligations under those provisions by complying with the reporting requirements of the alternative reporting regime (“alternative reporting provision”)? If so, should we require the submission of an application for recognition of an alternative reporting regime as having substantially similar requirements for purposes of alternative reporting regarding climate-related disclosures? Should we permit companies, governments, industry groups, or climate-related associations to file such an application? Should we require the applicant to follow certain procedures, such as those set forth in 17 CFR 240.0-13?
184. If we adopt an alternative reporting provision, should we specify certain minimum standards that the alternative reporting regime must meet in order to be recognized and, if so, what standards? For example, should we specify that an alternative reporting regime must require the disclosure of a foreign private issuer's Scopes 1 and 2 emissions and related targets, the proposed financial statement metrics, as well as disclosures pursuant to the TCFD's recommendations regarding governance, strategy, and risk management disclosure? Should we specify that the alternative reporting regime must require the disclosure of Scope 3 emissions and, if so, should we deem the alternative reporting regime to be substantially similar even if its Scope 3 emissions requirements become effective after the Commission's phase in period for Scope 3 emissions disclosure requirements? Should we specify that the alternative reporting regime must require the disclosure of scenario analysis if a registrant uses scenario analysis in formulating its strategy regarding climate-related risks? Are there certain climate-related disclosure requirements that have been adopted or are in the process of being adopted in other jurisdictions that we should consider to be substantially similar to the Commission's rules for purposes of an alternative reporting provision? If so, which requirements should we consider?
185. If we adopt an alternative reporting provision, should it be a mutual recognition system, so that, as a condition of our recognition of a particular jurisdiction as an alternative reporting regime, that jurisdiction must recognize the Commission's climate-related disclosure rules as an alternative reporting system that a registrant dual-listed in the United States and the other jurisdiction may use to fulfill the foreign jurisdiction's climate-related disclosure rules?
186. If we adopt an alternative reporting provision, should we require a registrant filing the alternative climate-related disclosure to make certain changes that we deem necessary as a condition to alternative reporting? For example, should we require a registrant to comply with XBRL tagging requirements as a condition to filing alternative climate-related disclosure? Are there other specific conditions that we should impose on disclosure under an alternative climate reporting provision?
187. If we adopt an alternative reporting provision, should we require a registrant using that system to:
• State in the filing that it is relying on this alternative reporting provision;
• Identify the alternative reporting regime for which the climate-related disclosure was prepared;
• Identify the exhibit number of the filing where the alternative disclosure can be found; and
• File a fair and accurate English translation of the alternative climate-related disclosure if in a foreign language?
Would these requirements enhance the accessibility of the alternative disclosures? Are there other requirements that we should impose to enhance the transparency of the alternative climate-related disclosure?
188. If we adopt an alternative reporting provision, should we permit a registrant to follow the submission deadline of the approved alternative reporting regime even if that deadline differs from the deadline for reporting under our rules? If so, what conditions, if any, should apply to permit the use of such alternative deadline? For example, should the registrant be required to provide adequate notice, before the due date of the Commission filing in which the alternative disclosure is required to be included? Should such notice indicate the registrant's intent to file the alternative disclosure using the alternative jurisdiction's deadline? If so, what would constitute adequate notice? For example, should the deadline for filing the notice be three, five, or ten business days before the Commission filing deadline? Should we permit a registrant to provide such notice through an appropriate submission to the Commission's EDGAR system? Should we permit a registrant to indicate in its Form 20-F or other report that it will file the alternative disclosure at a later date if permitted to do so by the alternative reporting regime? In that case, should we permit the registrant to file the alternative disclosure on a Form 6-K or 8-K? Should we instead require a registrant to submit the notice via a form that we would create for such purpose? Should there be any consequences if a registrant fails to file a timely notice or fails to file the alternative disclosure by the alternative regime's due date? For example, should we preclude such a registrant from relying on the alternative reporting provision for the following fiscal year?
189. An International Sustainability Standards Board (ISSB) has recently been created, which is expected to issue global sustainability standards, including climate-related disclosure standards.
The proposed rules would require a registrant to tag the proposed climate-related disclosures in a structured, machine-readable data language.
In 2009, the Commission adopted rules requiring operating companies to submit the information from the financial statements (including footnotes and schedules thereto) included in certain registration statements and periodic and current reports in a structured, machine-readable data language using eXtensible Business Reporting Language (“XBRL”).
Requiring Inline XBRL tagging of the proposed climate-related disclosures would benefit investors by making the disclosures more readily available and easily accessible to investors, market participants, and other users for aggregation, comparison, filtering, and other analysis, as compared to requiring a non-machine readable data language such as ASCII or HTML. This would enable automated extraction and analysis of climate-related disclosures, allowing investors and other market participants to more efficiently perform large-scale analysis and comparison of climate-related disclosures across companies and time periods. At the same time, we do not expect the incremental compliance burden associated with tagging the additional information to be unduly burdensome, because issuers subject to the proposed requirements are or in the near future will be subject to similar Inline XBRL requirements in other Commission filings.
190. Should we require registrants to tag the climate-related disclosures, including block text tagging and detail tagging of narrative and quantitative disclosures required by Subpart 1500 of Regulation S-K and Article 14 of Regulation S-X in Inline XBRL, as proposed? Should we permit custom tags for the climate-related disclosures?
191. Should we modify the scope of the proposed climate-related disclosures required to be tagged? For example, should we only require tagging of the quantitative climate-related metrics?
192. Are there any third-party taxonomies the Commission should
193. Should we require issuers to use a different structured data language to tag climate-related disclosures? If so, what structured data language should we require? Should we leave the structured data language undefined?
We are proposing to treat the proposed required climate-related disclosures as “filed” and therefore subject to potential liability under Exchange Act Section 18,
Form 6-K disclosures would not be treated as “filed” because the form, by its own terms, states that “information and documents furnished in this report shall not be deemed to be “filed” for the purposes of Section 18 of the Act or otherwise subject to the liabilities of that section.”
Commenters expressed differing views on whether we should treat Commission-mandated climate-related disclosures as filed or furnished. Many commenters recommended that we treat such climate-related disclosures as filed.
Other commenters recommended that we treat climate-related disclosures as furnished.
We agree with those commenters who indicated that the treatment of climate-related disclosures as filed could help promote the accuracy and reliability of such disclosures for the benefit of investors.
194. Should we treat the climate-related disclosures required by proposed subpart 1500 of Regulation S-K and proposed Article 14 of Regulation S-X as filed for purposes of potential liability under the Securities Act and Exchange Act, except for the climate disclosures on Form 6-K, as proposed? Should we instead treat the climate-related disclosures required by both proposed subpart 1500 of Regulation S-K and proposed Article 14 of Regulation S-X as furnished? Are there reasons why the proposed climate-related disclosures should not be subject to Section 18 liability?
195. Should we only treat the climate-related disclosures required by proposed subpart 1500 of Regulation S-K as filed? Should we only treat the climate-related disclosures required by proposed Article 14 of Regulation S-X as filed? Is there some other subset of climate-related disclosures that should be treated as furnished rather than filed? For example, should we only treat as filed disclosures related to a registrant's Scopes 1 and 2 emissions, and treat a registrant's Scope 3 emissions as furnished?
196. Should we treat the climate disclosures on Form 6-K as filed?
We recognize that many registrants may require time to establish the necessary systems, controls, and procedures to comply with the proposed climate-related disclosure requirements. In addition, some commenters recommended that the Commission not adopt a “one size fits all” approach when promulgating climate-related disclosure rules because such an approach would disproportionately impact smaller registrants.
The proposed compliance dates in the table above would apply to both annual reports and registration statements. For example, if a non-accelerated filer with a December 31st fiscal year-end filed a registration statement that was not required to include audited financial statements for fiscal year 2024 (
A registrant with a different fiscal year-end date that results in its fiscal year 2023 commencing before the effective date of the rules would not be required to comply with subpart 1500 of Regulation S-K and Article 14 of Regulation S-X until the following fiscal year. For example, a large accelerated filer with a March 31st fiscal year-end date would not be required to comply with the proposed climate disclosure rules until its Form 10-K for fiscal year 2024, filed in June, 2024. This would provide large accelerated filers, who would have the earliest compliance date of all categories of filers, with what we believe is a reasonable amount of time to comply with the rules.
We believe that initially applying the disclosure requirements to the more limited pool of large accelerated filers would be appropriate, because many large accelerated filers are already collecting and disclosing climate-related information, have already devoted resources to these efforts, and have some levels of controls and processes in place for such disclosure.
We also recognize that obtaining the data necessary to calculate a registrant's Scope 3 emissions might prove challenging since much of the data is likely to be under the control of third parties. In order to provide sufficient time for registrants to make the necessary arrangements to begin gathering and assessing such data, we are proposing an additional one-year phase-in period for the Scope 3 emissions disclosure requirements. As previously mentioned, we also are proposing an exemption for SRCs from the proposed Scope 3 emissions disclosure provision.
The proposed mandatory compliance periods are intended to provide registrants with ample time to prepare to provide the proposed disclosures. Registrants would, however, be able to provide the disclosures at any time after the effective date of the rules.
197. Should we provide different compliance dates for large accelerated filers, accelerated filers, non-accelerated filers, or SRCs, as proposed? Should any of the proposed compliance dates in the table above be earlier or later? Should any of the compliance dates be earlier so that, for example, a registrant would be required to comply with the Commission's climate-related disclosure rules for the fiscal year in which the rules become effective?
198. Should we provide a compliance date for the proposed Scope 3 emissions disclosure requirements that is one year later than for the other disclosure requirements, as proposed? Should the compliance dates for the Scope 3 emissions disclosure requirements be earlier or later? Should the compliance date for the Scope 3 emissions disclosure requirements depend upon whether the registrant is a large accelerated filer, accelerated filer, or non-accelerated filer?
199. Should we provide different compliance dates for registrants that do not have a December 31st fiscal year-end?
200. Should we include rules or guidance addressing less common situations, such as, but not limited to, reverse mergers, recapitalizations, other acquisition transactions, or if a registrant's SRC (or EGC) status changes as a result of such situations?
201. Are there other phase-ins or exemptions regarding any or all of the proposed rules that we should provide?
We request and encourage any interested person to submit comments on any aspect of the proposed amendments, other matters that might have an impact on the proposed amendments, and any suggestions for additional changes. With respect to any comments, we note that they are of greatest assistance to our rulemaking initiative if accompanied by supporting data and analysis of the issues addressed in those comments and by alternatives to our proposals where appropriate.
We are mindful of the economic effects that may result from the proposed rules, including the benefits, costs, and the effects on efficiency, competition, and capital formation.
We anticipate the proposed rules will give rise to several benefits by strengthening investor protection, improving market efficiency, and facilitating capital formation. The primary benefit is that investors would have access to more consistent, comparable, and reliable disclosures with respect to registrants' climate-related risks, which is expected to enable investors to make more informed investment or voting decisions.
We are also mindful of the costs that would be imposed by the proposed rules. Registrants would face increased compliance burdens in meeting the new disclosure requirements. In some cases, these additional compliance burdens could be significant while in others relatively small if companies already provide information similar to that required by our rules. Other potential costs include increased litigation risk and the potential disclosure of proprietary information about firms' operations and/or production processes.
This section describes the current regulatory and economic landscape with respect to climate-related disclosures. It discusses the parties likely to be affected by the proposed rules, current trends in registrants' voluntary reporting on climate risks, related assurance practices, and existing mandatory disclosure rules under state and other Federal laws. These factors form the baseline against which we estimate the likely economic effects of the proposed rules.
The proposed disclosure requirements would apply to Forms S-1, F-1, S-3, F-3, S-4, F-4, S-11, 6-K, 10, 10-Q, 10-K, and 20-F. Thus, the parties that are likely affected by the proposed rules include registrants subject to the disclosure requirements imposed by these forms, as well as investors and other market participants that use the information in these filings (
The proposed rules may affect both domestic registrants and foreign private issuers (FPIs).
A number of the Commission's existing disclosure requirements may elicit disclosure about climate-related risks; however, many of these requirements are principles-based in nature and thus the nature and extent of the information provided depends to an extent on the judgment of management. As discussed above, in 2010, the Commission published interpretive guidance on existing disclosure requirements as they pertain to business or legal developments related to climate change.
There are also state and other Federal laws that require certain climate-related disclosures or reporting. For instance,
There also exist Federal- and state-level reporting requirements related to greenhouse gas (GHG) emissions. Federal GHG reporting requirements consist of the U.S. Environmental Protection Agency's (EPA) 2009 Mandatory Reporting of Greenhouse Gases Rule.
Due to the nature of the EPA's reporting requirements, their emissions data does not allow a clean disaggregation across the different scopes of emissions for a given registrant. The EPA requires reporting of facility-level direct emissions, which can contribute to a registrant's Scope 1 emissions (but can typically be considered a subset, to the extent that the registrant has other non-reporting facilities), and facility-level supplied emissions, which can contribute to a registrant's Scope 3 emissions (but can also be very different from it).
In addition, at least 17 states have specific GHG emissions reporting requirements.
Issuers with operations abroad may also be subject to those jurisdictions' disclosure requirements. Many jurisdictions' current and/or proposed requirements are based on the TCFD's framework for climate-related financial reporting.
The Commission's staff reviewed 6,644 annual reports (Forms 10-K, 40-F, and 20-F) submitted from June 27, 2019 until December 31, 2020 to determine how many contain any of the following keywords: “climate change”, “climate risk”, or “global warming”. The presence of any of the keywords in any part of the annual report is indicative of some form of climate-related disclosure.
Using the same sample of annual reports, additional analysis was conducted by Commission's staff using natural language processing (NLP), which can provide insight on the semantic meaning of individual sentences within registrants' climate-related disclosures and classify them into topics (
Figure 4 shows that firms in the following industries have the most ample climate-related discussion, on average: Electric services, oil and gas, steel manufacturing, passenger air and air freight, and maritime transportation. The majority of the discussion is on business impact, followed by emissions, international climate accords, and physical risks. Figure 5 presents the corresponding information for foreign filings (Forms 40-F and 20-F). Overall, the analysis indicates that the majority of the disclosure is focused on transition risks, with comparatively fewer mentions of physical risk.
The staff's findings are consistent with academic studies that have looked at the extent of climate-related disclosures by SEC registrants. Bolstad et al. (2020) systematically reviewed Form 10-K filings from Russell 3000 firms over the last 12 years and found that the majority of climate-related disclosure is focused on transition risks as opposed to physical risks.
While Commission staff reviewed certain firms' sustainability reports for climate-related disclosures, they did not conduct a systematic review of a large, representative sample of sustainability reports. However, as discussed below, a number of industry and advocacy groups have examined the scope of voluntary ESG reporting, including climate-related disclosures and their findings could be relevant to an assessment of the proposed rules' impact.
The U.S. Chamber of Commerce's Center for Capital Markets Competitiveness (CCMC), in collaboration with several other organizations, conducted a survey (“CCMC Survey”) on a sample of U.S. public companies—436 companies across 17 industries that range from small to large in terms of market capitalization.
The Governance & Accountability Institute
Other sources confirm that, at least within samples of larger firms, a sizeable portion already measure and disclose their emissions, though not necessarily through their regulatory filings. The CDP
Some companies follow existing third-party reporting frameworks when developing climate-related disclosures for SEC filings or to be included in CSR, sustainability, ESG, or similar reports. For instance, the CCMC Survey finds that 59% of respondents follow one or more such frameworks. Among these respondents, 44% use the SASB,
While these various frameworks are distinct, they overlap in their alignment with the TCFD. In particular, the CDP questionnaire fully incorporates the TCFD framework and thus exhibits full alignment.
Carbon reduction targets or goals have become an increasing focus for both companies and countries.
Despite the increasing prevalence in stated targets and goals, monitoring which firms are taking steps to implement them is difficult given the lack of required recurring standardized metrics for progress. Absent such a monitoring device, investors have insufficient information to gauge the credibility of the targets. Moreover, without knowing the specific strategy that registrants intend on adopting in pursuit of their targets, investors are unable to determine how the targets will impact the company's financial position (
Consistent with this need for an oversight or monitoring mechanism, research suggests that the prevalence of “green bonds” and positive cumulative abnormal stock returns surrounding their announcements may arise, at least in part, because they help signal credible value-enhancing targets in the absence of mandatory standardized public disclosures.
Among the companies that provide climate-related disclosures, a considerable portion include some form of third-party assurance for these disclosures. The G&A study
Investors have expressed a need for information on climate-related risks as they relate to companies' operations and financial condition.
Investors' demand for climate-related information may also be related to the transition risks that companies face (
State Street Global Advisors (SSGA) and Blackrock, two of the world's largest investment managers, recently announced the focus areas for their asset stewardship program for 2022, with climate change at the top of their priority list. One of the key expectations set by SSGA this year is a requirement for companies to provide disclosures aligned with TCFD recommendations, including reporting on board oversight on climate-related risks and opportunities, Scope 1 and 2 GHG emissions, and targets for emissions reduction.
Investors, including large institutional investors, have also formed initiatives aimed in part at improving corporate disclosures on climate-related risks. These initiatives include the Climate Disclosure Project, Climate Action 100+,
In practice, however, investors' demand for climate-related information is often met by inconsistent and incomplete disclosures due to the considerable variation in the coverage, specificity, location, and reliability of information related to climate risk. Multiple third-party reporting frameworks and data providers have emerged over the years; however, these resources lack mechanisms to ensure compliance and can contribute to reporting fragmentation.
In practice, firms can still approach full disclosure voluntarily if there are costs to disclosure, as long as these costs are relatively low.
This illustrates how, theoretically, in the absence of mandated disclosure requirements, registrants fully internalize the costs of disclosure but not the benefits, which may lead them to rationally under-disclose relative to what is optimal from the investors' perspective.
In order for voluntary disclosure to result in the complete revelation of all relevant private information, there would need to be no agency problems (
If investors are unable to verify that managerial disclosures are complete and truthful (
If, on the other hand, misreporting has no costs for managers, then this results in what is referred to as a cheap talk equilibrium.
In this case, a mandatory reporting regime would be beneficial to investors to the extent that voluntary disclosures are unverifiable and possibly misleading. These include situations where managers obfuscate certain information in their disclosures, convey information in a complex or difficult manner, or conceal the discretionary choices with respect to what was reported.
Another condition necessary for voluntary reporting to be fully revealing is that managers must be certain of investor responses to disclosures. However, if investors have heterogeneous prior beliefs, such that managers cannot determine whether investors will consider a given disclosure good or bad news, then not all managers will choose to disclose, resulting in certain private information remaining undisclosed.
In the context of climate-related disclosure, these impediments may be made worse due to agency problems arising from the potentially long-term nature of certain climate-related risks and other issues related to the complexity and uncertainty of climate-related factors. We explore each of these impediments in further detail.
Impediments to climate-related disclosures may be exacerbated due to agency problems related to potential conflicts between short-term profitability and long-term climate risk horizons. Physical and transition risks can materialize over time horizons ranging from the immediate future to several decades.
Impediments to voluntary climate-related disclosures can also be exacerbated due to the uncertainty and complexity of climate-related risks and the multidimensional nature of the information being disclosed. First, this uncertainty and complexity may lead to misrepresentation of disclosures, which, as discussed previously, violates a condition for the full revelation of material information in a voluntary reporting environment. The complexity of these risks has led to many types of methodologies, metrics, and statements that can be provided to communicate potential economic impacts and risks.
The uncertainty and complexity of climate-related risks may also be an impediment to voluntary disclosure if managers are less able to anticipate how investors may respond to such disclosures. As noted above, predictable investor responses to disclosures is one of the key assumptions necessary for the full revelation of material information in a voluntary reporting environment.
Due to these impediments, companies may not report (or may report only limited amounts of) relevant climate-related information, and hence, the stock price that investors observe may not reflect the companies' true exposures to physical and transition risks.
The current regulatory regime leaves substantial uncertainty around the type of climate-related information that should be disclosed and how it should be presented. Multiple third-party climate reporting frameworks have emerged to try to fill this reporting gap.
The proposed rules aim to address these market failures by requiring more specificity around the way registrants disclose climate-related risks and their impacts on business activities and operations in the short, medium, and long-term. By requiring comprehensive and standardized climate-related disclosures along several dimensions, including disclosure on governance, business strategy, risk management, financial statement metrics, GHG emissions, and targets and goals, the proposed rules would provide investors with climate-related information that is more comparable, consistent, and reliable and presented in a centralized location.
Below we discuss the anticipated economic effects that may result from the proposed rules. Where possible, we have attempted to quantify these economic effects, including the benefits and costs. In many cases, however, we are unable to reliably quantify these potential benefits and costs. For example, existing empirical evidence does not allow us to reliably estimate how enhancements in climate-related disclosure affect information processing by investors or firm monitoring. Nevertheless, there is a large body of studies examining the effects of corporate disclosure in general, as well as a subset focusing on sustainability-related disclosures (
Similarly, we qualitatively describe the factors that may affect disclosure costs but we are unable to accurately quantify these costs. Costs related to preparing climate-related disclosures are generally private information known only to the issuing firm, hence such data are not readily available to the Commission. There is also likely considerable variation in these costs depending on a given firm's size, industry, complexity of operations, and other characteristics, which makes comprehensive estimates difficult to obtain.
We encourage commenters to provide us with relevant data or empirical evidence related to the costs of preparing climate-related disclosures and, more generally, to provide us with
The primary benefit of the proposed rules is that investors would have access to more comparable, consistent, and reliable disclosures with respect to registrants' climate-related risks. As discussed in the previous sections, investors currently face obstacles in accessing comparable, consistent, and reliable climate-related information due to a combination of registrants not disclosing this information at all, or registrants disclosing this information but with varying degrees of coverage and specificity and in varying formats and locations, including company websites, standalone reports, and SEC filings.
Investors are expected to benefit from the required disclosures given that material climate-related information would be provided to the market more consistently across registrants of different sizes and filer status, whether domestic or foreign issuers, and regardless of industry. Investors are also expected to benefit from the more consistent content of the disclosures. Specifically, the proposed rules would enhance comparability by requiring registrants to provide disclosures on a common set of qualitative and quantitative climate-related disclosure topics in their filings.
In addition to the standardized content, investors are expected to benefit from a common location of the disclosures in regulatory filings. The proposed rules would require registrants to place all relevant climate-related disclosures in Securities Act or Exchange Act registration statements and Exchange Act annual reports in a separately captioned “Climate-Related Disclosure” section, or alternatively, to incorporate by reference from another section, such as Risk Factors, Description of Business, or MD&A. By mandating that standardized climate-related information be disclosed, and requiring it to be placed in a centralized location within regulatory filings, the proposed rules could reduce investors' search costs and improve their information-processing efficiency. These factors can also lead to positive information externalities—as more firms disclose how measures of climate risk affect their business operations, investors would gain a better understanding of how those same climate risks may affect other similar firms.
Furthermore, by requiring this information to be
As discussed in Section IV.B.1, surveys of institutional investors indicate that climate risk is one of the most prominent issues driving their investment decisions and engagements with companies. Evidence from the stock market response appears consistent with this, with increased mandatory ESG disclosure being associated with aggregate stock price movement.
Improving and standardizing climate disclosures also could mitigate adverse selection problems that may arise in the presence of asymmetric information
Another benefit of the proposed rules is that it could allow firm's shareholders to better monitor management's decisions and mitigate certain agency problems stemming from management's discretionary choices with respect to climate disclosure. Agency problems could occur when management act opportunistically in their own self-interest at the expense of shareholders by disclosing only certain climate-related information at their discretion. As previously discussed in Section IV.B.2.b, management may be motivated to selectively disclose only climate-related information,
Agency problems might be exacerbated by registrants' use of boilerplate language or selective disclosure (
The proposed rules would mandate more detailed and comprehensive disclosure with respect to climate-related risks. More consistent, comparable, and reliable disclosures could lead to capital market benefits in the form of improved liquidity, lower costs of capital, and higher asset prices
The proposed rules would require registrants to identify their climate-related risks that are reasonably likely to have a material impact on the registrant's business or consolidated financial statements over the short, medium, and long-term and describe the actual and potential impacts of those risks on its strategy, business model, and outlook. Registrants would specifically be required to disclose impacts on, or any resulting significant changes made to, their: (i) Business operations, including the types and locations of its operations; (ii) products or services; (iii) supply chain or value chain; (iv) activities to mitigate or adapt to climate-related risks; and (v) expenditures for research and development.
If, as part of its net emissions reduction strategy, a registrant uses carbon offsets or RECs, the proposed rules would require it to disclose specific information around the role that carbon offsets or RECs play in the registrant's climate-related business strategy. If a registrant uses an internal carbon price, the proposed rules would require it to disclose information around the boundaries for measurement of overall CO
The specific disclosures required by the proposed rules are expected to improve investors' understanding of what the registrant considers to be the relevant short-, medium-, and long-term climate-related risks that are reasonably likely to have a material impact on its business, taking into consideration the useful life of the organization's assets or infrastructure and the fact that climate-related risks may manifest themselves over the medium and longer terms. Compared to the baseline, investors would be better able to identify and assess how climate-related risks may affect a registrant's businesses, strategy, and financial planning in several areas, including products and services, supply chain and/or value chain, adaptation and mitigation activities, investment in research and development, operations (including types of operations and location of facilities), acquisitions or divestments, and access to capital. Investors would gain insight into how climate-related risks may serve as an input to the registrant's financial planning process and the time period(s) used for this process.
For example, investors may gain better insights into the registrant's estimated costs of any operational changes expected to be implemented to achieve emission reduction targets. Alternatively, investors may gain valuable information on how certain climate events may impact the registrant's property, workforce, or its production schedule across the different physical sites where the registrant conducts business. Adverse climate-related events may impact the useful lives and/or valuation reserves of balance sheet assets. For example, sea level increases and other climate related patterns may adversely impact the estimated useful lives of coastal facilities. Similarly, more extreme weather patterns may adversely impact agricultural regions and the value of related equipment and lands. This information is expected to be useful for investors in assessing how climate-related risks are managed, and whether and how these risks may affect a registrant's financial condition and results of operations. The required disclosure around the role that carbon offsets or RECs play in the registrant's climate-related business strategy could help investors better understand that strategy, including how resilient it is to changes in costs or the availability or value of offsets or RECs over the short, medium and long-term. The required disclosures around internal carbon price, when used by a registrant, could provide investors with more standardized and detailed information regarding how the registrant developed a particular business strategy and help investors assess whether a registrant's internal carbon pricing practice is reasonable and whether its overall evaluation and planning regarding climate-related factors is sound. The required disclosure around the assumptions and methods used by a registrant when employing analytical tools or conducting scenario analysis can improve investors' assessment of the resiliency of a registrant's strategy and business model in light of foreseeable climate-related risks and improve investors' ability to compare said resiliency among registrants.
The proposed requirement to identify material climate-related risks over the short-, medium-, and long-term could also help mitigate agency problems deriving from the potential misalignment of planning horizons between the firm's shareholders and its managers. The information required to be disclosed about the firm's business operations, products or services, supply or value chain, activities to mitigate or adapt to climate-related risks, and expenditure for research and development could allow investors to assess how climate-related issues may impact the registrant's financial performance (
The proposed rules would require a registrant to disclose information concerning the board's oversight of climate-related risks as well as management's role in assessing and managing those risks. The proposed rules would require a registrant to disclose whether any member of its board of directors has expertise in climate-related matters and the processes and frequency by which the board discusses climate-related factors. When describing management's role in assessing and managing climate-related factors, a registrant would be required to disclose whether certain management positions are responsible for assessing and managing climate-related factors and the processes by which the responsible managers are informed
The disclosures required by the proposed rules should enable investors to better understand how the firm is informed about climate-related factors and how frequently the firm considers such factors as part of its business strategy, risk management, and financial oversight. Investors would be expected to gain better information around whether the organization has assigned climate-related responsibilities to management-level positions or committees and, if so, whether those responsibilities include assessing and/or managing climate-related risks. As a result, investors may be better able to understand and evaluate the processes by which management is informed about and monitors climate-related risks. For example, investors may be better positioned to assess whether and how the firm's board and management consider climate-related risks when reviewing and guiding business strategy and major plans of action, when setting and monitoring implementation of risk management policies and performance objectives, and when reviewing and approving annual budgets.
With detailed information about climate expertise among the registrant's directors, investors could more effectively evaluate the firm's governance practices related to the identification and management of climate-related risks. In particular, investors may be able to exercise closer oversight of management's actions as they assess implementation of risk management policies and performance objectives, review and approve annual budgets, and oversee major capital expenditures, acquisitions, and divestitures.
The proposed rules would require registrants to describe their processes for identifying, assessing, and managing climate-related risks. This includes disclosure on how registrants assess materiality, whether they consider likely future regulatory actions, how they prioritize, mitigate, or adapt to climate-related risks, and overall how climate-related factors are integrated into the registrants' risk management systems or processes. Registrants would also be required to provide detailed descriptions on any transition plans,
The disclosures required by the proposed disclosures could inform investors regarding how proactive and diligent registrants may be with respect to climate-related risks. Investors can use this information to acquire a more detailed understanding of how resilient registrants' risk management systems may be towards climate-related risks, which could contribute to better-informed investment or voting decisions. These disclosures could allow investors to better monitor and assess whether registrants have in place adequate risk management systems and whether they are aligned with investor preferences.
Conversely, investors may be better able to detect whether certain registrants' risk management systems would fail to account for certain types of climate factors such as change in consumer preferences, adjustments of business models, and technological challenges or innovations, which may have implications on companies' operations and financial conditions. These disclosures may also allow investors to assess whether registrants are evaluating these risks over specific time horizons, which may be particularly relevant in cases in which management may be more concerned with short-term performance while neglecting longer term risks. Accordingly, this provision could help address agency problems related to the misalignment of planning horizons.
The proposed rules would require registrants to disclose certain disaggregated climate-related metrics in its financial statements under the following categories: (i) Financial impact metrics; (ii) financial expenditure metrics; and (iii) financial assumptions. The proposed rules would require a registrant to disclose the impact of climate-related events (severe weather events and other natural conditions and physical risks identified by the registrant) and transition activities (including transition risks identified by the registrant) on its consolidated financial statements, if the disclosure threshold is met. For each type of metric, the provisions would require the registrant to disclose contextual information to enable the reader to understand how it derived the metric, including a description of significant inputs and assumptions used to calculate the specified metrics, thus providing the necessary transparency for facilitating investors' understanding and peer comparisons. To avoid potential confusion and to maintain consistency with the rest of the financial statements, the proposed financial statement metrics would be required to be calculated using financial information that is consistent with the scope of the rest of the registrant's consolidated financial statements included in the filing. The proposed rules would specify the basis of calculation for the climate-related financial statement metrics and clarify how to apply these accounting principles when calculating the climate-related financial statement metrics.
With respect to financial impact metrics, the proposed rules would require a registrant to disclose the impacts arising from climate-related events, including physical risks identified by the registrant and severe weather events and natural conditions, such as flooding, drought, wildfires, extreme temperatures, and sea level rise. In addition to physical risks, registrants also would be required to disclose the financial impact of transition activities (including transition risks identified by the registrant), such as efforts to reduce GHG emissions or otherwise mitigate exposure to transition risks on any relevant line items in the registrant's consolidated financial statements. The proposed rule would require registrants to reflect the impact of the climate-related events or transition activities on each line item of the registrant's consolidated financial statements (
We expect that the proposed financial statement metrics impact would provide additional transparency into the nature
With respect to financial expenditure metrics, the proposed rules would require a registrant to disclose the positive and negative impacts associated with the same climate-related events and transition activities as the proposed financial impact metrics. The expenditure metrics would require a registrant to separately aggregate amounts of expenditure expensed and capitalized costs incurred during the fiscal years presented. For each of those categories, a registrant would be required to disclose separately the amount incurred during the fiscal years presented toward positive and negative impacts associated with the specified climate-related events and to mitigate exposure to transition risks. The expenditure metrics would also be subject to the same disclosure threshold as the financial impact metrics, which should promote consistency and clarity.
Together, these disclosures are expected to provide investors with information about the total expenditure toward or capitalized costs incurred for specified climate-related events. As such, they are expected to increase the resilience of assets or operations, retire or shorten the estimated useful lives of impacted assets, relocate assets or operations at risk, or otherwise reduce the future impact of severe weather events and other natural conditions on business operations. The proposed rules also would provide investors with information about the amount of expenditure expensed or capitalized costs incurred for climate-related transition activities related, among others, to research and development of new technologies, purchase of assets, infrastructure, or products that are intended to reduce GHG emissions, increase energy efficiency, or improve other resource efficiency.
With respect to financial assumptions, the proposed rules would require registrants to disclose whether the estimates and assumptions used to produce the consolidated financial statements were impacted by risks and uncertainties associated with, or known impacts from, severe weather events and other natural conditions, such as flooding, drought, wildfires, extreme temperatures, and sea level rise. If so, the registrant would be required to provide a qualitative description of how such events have impacted the development of the estimates and assumptions used to prepare such financial statements. Similarly, if the estimates and assumptions were impacted by potential transition risks, the registrant would be required to provide a qualitative description of how the development of the estimates and assumptions were impacted by such a transition. We expect that the proposed disclosures would provide transparency to investors on the impact of climate-related events and transition activities on the estimates and assumptions used by the registrant to prepare the financial statements and allow investors to evaluate the reasonableness of the registrant's estimates and assumptions.
Prior evidence shows that existing climate-related disclosures often contain boilerplate language or are “cherry-picked” to present information that is favorable to the company.
The proposed financial metrics would be part of the financial statements and thus audited by an independent public accounting firm in accordance with existing Commission rules and PCAOB auditing standards.
The proposed rules would require all registrants to disclose Scope 1 and Scope 2 GHG emissions. Given the
Understanding the extent of this potential exposure to transition risks could help investors in assessing their risk exposures with respect to the companies in which they invest. Greater consistency in emissions disclosures can further benefit investors as it can facilitate comparisons between the registrants and their peers and assist in understanding the overall risk of their portfolios. As described below, emissions disclosures would also help inform investors about the extent to which a company has been or is following through with its disclosed strategies and transition plans. As further discussed in Section IV.D, we expect this provision to lower uncertainty for investors, thereby reducing the cost of capital. This may make it easier to raise equity and debt, or to obtain loan financing.
Besides the direct risk to cash flows through cost of emissions or the need to scale back on high-emitting activities, such a transition could also cause a registrant's assets to suffer from unanticipated or premature write-downs, devaluations, and/or adverse adjustments in reserves. The proposed Scope 1 and 2 emission disclosures would allow investors to identify registrants whose assets may be more likely to become obsolete or non-performing or lose economic value ahead of their anticipated useful life due to a potential transition to a lower-carbon economy, and more generally allow investors to discern whether certain investments are unlikely to earn the anticipated economic return due to such transition. The proposed disclosures would also allow investors to more closely monitor whether a firm's management is properly accounting for the impairment of such stranded assets to ensure that they are recorded on the balance sheet as a loss of profit and are not carried at more than their recoverable amount. Given the significant possibility that Scope 1 and 2 emissions will affect the valuation of the registrant through impacts on earnings, cost of capital, investor demand, or potentially some other channel, investor protection would be enhanced by requiring disclosure of this information.
Moreover, by specifying that the information should be provided by all registrants, investors would benefit from having access to a more comprehensive set of emissions data against which to measure a registrant's progress in meeting any stated emissions goals or otherwise managing its climate-related risks, as a part of assessing the registrant's overall business and financial condition. In the absence of the proposed rules, some registrants may choose to selectively omit quantitative emissions metrics. The resulting state of disclosures is less meaningful and less transparent, making it significantly more difficult for investors to assess the degree of risk in individual firms, to compare across firms, and to value securities.
As discussed in Section IV.A, some registrants currently report emissions via the EPA's 2009 mandatory Greenhouse Gas Reporting Program.
The proposed rules would result in more comprehensive and tailored emissions information by requiring disclosure of Scope 1, Scope 2, and in some cases Scope 3 emissions by registrants in SEC filings. Prior evidence has shown that when information that is already publicly available elsewhere is included within SEC filings, the public becomes more aware of the information.
The proposed rules would also provide informational benefits beyond the voluntary disclosure of emissions in sustainability reports. While currently disclosed information reflects investor demand, the overall information disclosed to the market may be biased due to its voluntary nature, in that companies that have more favorable data (
Specific provisions are designed to facilitate comparability across registrants and industries. For example, requiring the disclosure of GHG intensity in terms of metric tons of CO
The proposal would also require non-SRC registrants to disclose Scope 3 emissions if material or if the registrant has a target or goal related to Scope 3.
The reporting of Scope 3 emissions for these registrants would provide additional benefits for investors. Scope 3 emissions information may be material in a number of situations to help investors gain a more complete picture of the transition risks to which a registrant may be exposed. Relative to registrants with substantial Scope 1 and 2 emissions, future regulations that restrict emissions may impact registrants with high Scope 3 emissions differently. In certain industries, a transition to lower-emission products or processes may already be underway, triggered by existing policies, a shift in consumer preferences, technological changes, or other market forces.
Registrants with significant Scope 3 emissions may be more likely to face disruptions not only in their cash flows, but also in their business models or value chains to the extent that these registrants are compelled to make changes in their products, suppliers, distributors, or other commercial partners.
Over the last few years, a number of studies have shown that firms try to reduce their local carbon footprints by outsourcing their carbon emissions to suppliers in states or countries with weaker environmental policies.
Finally, as described in Section IV.A5.d, many companies have set emissions targets, and it is not always clear whether these targets pertain to Scope 3 emissions or not. As explained in Section IV.C.1.g, registrants would be required to disclose whether the targets pertain to Scope 3 emissions, and as described above, if they do, they would need to report such emissions. Without reporting of Scope 3 emissions amounts and categories, investors would not have the information they need to understand the scale and scope of actions the company may need to take to fulfill its commitment, and thus the overall financial implications of a registrant's targets. For example, a registrant's disclosure of its Scope 3
Because the value of a firm's equity is largely derived from expected future cash flows, disclosure of Scope 1, 2, and 3 emissions can help investors incorporate risks associated with such future cash flows into asset values today. Indeed, the academic literature indicates that equity is a long-term asset, meaning that even risks related to regulatory changes in the distant future could be priced today.
The proposed rules would require registrants that are large accelerated filers and accelerated filers to provide an attestation report for the registrant's Scope 1 and 2 GHG emissions disclosures. Large accelerated filers constitute approximately 31% of the universe of registrants that filed annual reports during calendar year 2020 (1,950 out of 6,220), but account for 93.6% of market cap within the same universe. Accelerated filers constitute approximately 10% of the universe of registrants that filed annual reports during calendar year 2020 (645 out of 6,220) and account for 0.9% of market cap within the same universe.
The proposed rules provide specific transition periods for obtaining attestation reports. Large accelerated filers would be required to provide Scopes 1 and 2 emissions disclosures in the fiscal year immediately following rule adoption. Next, they would be required to obtain limited assurance over these disclosures in fiscal years 2 and 3 after adoption. They would then be required to obtain reasonable assurance over these disclosures in fiscal year 4 after adoption and going forward. Accelerated filers would follow the same timeline but with a delay of one fiscal year. Specifically, accelerated filers would be required to provide Scopes 1 and 2 emissions disclosures in fiscal year 2 after adoption. Next, they would be required to obtain limited assurance over these disclosures fiscal years 3 and 4 after adoption. They would then be required to obtain reasonable assurance over these disclosures in fiscal year 5 after adoption and going forward.
The proposed transition periods for assurance over large accelerated filers' and accelerated filers' Scopes 1 and 2 GHG emission disclosures are intended to provide these registrants time to familiarize themselves with the GHG emissions disclosure requirements, develop the relevant DCP, and provide the market with an opportunity to develop enough expertise to satisfy the increased demand for GHG emission assurance services. We expect that during the proposed transition periods, the market for assurance services would further mature with respect to institutional knowledge, procedural efficiency, and overall competition, thus lowering costs for registrants and improving the quality of service. Although Scope 3 GHG emissions can constitute a large portion of a registrant's total emission, the proposed rules would exclude Scope 3 GHG emission disclosures from the attestation requirement due to the unique challenges associated with their measurement, which is based on data sources not owned by the registrant,
Section IV.A.5.e above discusses survey evidence on the frequency with which firms obtain assurance in sustainability reports. This evidence suggests that a significant fraction of large companies already obtain some form, albeit limited, of assurance. Practices appear to be fragmented with respect to the levels of assurance provided, the assurance standards used, the types of service providers, and the scope of disclosures covered by the assurance. One consequence of such fragmentation has been a lack of clarity about the nature of assurance provided, which can lead to confusion for investors when assessing the quality of disclosures. Moreover, as noted above, the voluntary nature of the reporting could result in biased or incomplete data. The fact, however, that a significant proportion of large companies already obtain some form of assurance over this information is indicative of investors' and companies' need for such disclosures to be reliable.
The importance of assurance for climate-related information also is highlighted by the International Federation of Accountants, which recently published its Vision for High-Quality Sustainability Assurance.
Academic research finds that assurance procedures can increase the relevance and reliability of disclosures,
The proposed rules would require the attestation report to identify the criteria against which the subject matter was measured or evaluated, the level of assurance provided, the nature of the engagement, and the attestation standard used. In particular, the proposed rules would require the attestation report to include a description of the work performed as a basis for the attestation provider's conclusion and for that conclusion to be provided pursuant to standards that are established by a body or group that has followed due process procedures, including the broad distribution of the framework for public comment. We expect this provision would help ensure that the standards upon which the attestation report is based were the result of a transparent and reasoned process. In this way, the requirement should help to protect investors who may rely on the attestation report by limiting the standards used to those that are appropriate for the subject matter and purpose. Further, we expect this provision to enhance the transparency of the GHG emissions attestation report for investors by providing them with additional information about the general procedures undertaken by the attestation provider. For example, under the proposed rules, an attestation report providing limited assurance would need to state that the procedures performed vary in nature and timing from, and are less extensive than, a reasonable assurance engagement, thus helping investors understand the level of assurance provided.
The GHG emissions attestation report would also be required to include a statement that describes any significant limitations associated with the measurement or evaluation of the subject matter against the criteria. The provision would require disclosure about the estimation uncertainties inherent in the quantification of GHG emissions, driven by reasons such as the state of the science and assumptions used in the measurement and reporting processes. By eliciting disclosure with respect to the procedures undertaken by the attestation provider, such as inquiries and analytical procedures, and the methodology used in the attestation process, the proposed provision would enhance the transparency of the GHG emissions attestation quality, thus allowing investors to gain a better understanding of the emission related information. This could help investors process emission related information more effectively. More informed investment decisions by investors also may benefit registrants by lowering their cost of capital.
The proposed rules would also require registrants to disclose whether the attestation provider has a license from any licensing or accreditation body to provide assurance and whether the GHG emissions attestation engagement is subject to any oversight inspection program and record-keeping requirements with respect to the work performed for the GHG emissions attestation. These requirements are expected to benefit investors by helping them to better understand the qualifications of the GHG emissions attestation provider, which in turn would allow them to make better informed decisions about the reliability of such information.
Finally, the proposed rules would require that the GHG emissions attestation report be prepared and signed by a provider that is an expert in GHG emissions and independent with respect to the registrant, and any of its affiliates, for whom it is providing the attestation report. These qualification and independence requirements should help ensure that the attestation provider is capable of exercising informed, objective and impartial judgment. Academic research has found that the independence of assurance providers can be important in certain settings for disclosure quality.
The proposed rules would require a registrant to disclose whether it has set any climate-related targets or goals and, if so, how it intends to meet those targets and goals. Such climate-related targets or goals might relate to the reduction of GHG emissions or address energy usage, water usage, conservation or ecosystem restoration. Associated disclosure would include the scope of activities and emissions included in the target, the unit of measurement, and the defined time horizon. Additionally, disclosures include the baseline emissions for measuring progress, any interim targets, how it intends to meet these targets or goals, and data showing any progress toward achieving these targets, including how that progress was
For example, in 2019 Amazon and Global Optimism co-founded The Climate Pledge, a commitment to net zero carbon by 2040. Since then, a growing list of major companies and organizations have signed on to the Climate Pledge, which indicates a commitment to the following three principles: (i) Measure and report greenhouse gas emissions on a regular basis; (ii) Implement decarbonization strategies in line with the Paris Agreement; (iii) Neutralize any remaining emissions with additional offsets to achieve net zero annual carbon emissions by 2040.
Such standardized reporting as a form of an oversight or monitoring mechanism might be critical in overcoming agency problems in the presence of asymmetric information. Investment in achieving targets could be value-enhancing in the long-run, but reduce cash flow in the short-run. Companies may decide that it is an optimal strategy to bear the costs up front of shifting its operations to those that have fewer emissions or upgrading their equipment, rather than bearing the risk that these costs will be borne in an unpredictable and possibly disorderly way in the future. In the absence of a means to credibly convey that efforts to achieve these long-term targets are being undertaken diligently, however, investors might be unable to observe which registrants are actually following through on such actions. For example, if registrants are incurring costs in the short-run to undertake investments to reduce Scope 1, 2, and 3 emissions, reducing short-run profitability, but are unable to convey to investors that they are meaningfully following through on achieving potential long-term value-enhancing strategies, there could be a disincentive for investors to invest in the firm, thus undermining its value in the long-run. This has been put forth as one potential explanation for some private sector attempts at addressing these problems, such as green bonds, which commit firms to recurring, more standardized disclosure requirements for progress in achieving stated targets and goals.
As explained above, the pursuit of targets could have a material impact, either in the short-term or long-term, on a registrant's operations or financial condition.
Under the proposed rules, the new climate-related disclosures would be tagged in the Inline XBRL structured data language. The provision requiring Inline XBRL tagging of climate-related disclosures would benefit investors by making those disclosures more readily available for aggregation, comparison, filtering, and other enhanced analytical methods.
Investors with access to XBRL analysis software may directly benefit from the availability of the climate-related disclosures in Inline XBRL, whereas other investors may indirectly benefit from the processing of Inline XBRL disclosures by asset managers and by information intermediaries such as financial analysts.
Below we discuss the anticipated direct and indirect costs of the proposed rules. Direct costs would include compliance burdens for registrants in their efforts to meet the new disclosure requirements. These direct costs could potentially be significant; however, the incremental costs would be lower to the extent that registrants already provide the required disclosures. Indirect costs may include heightened litigation risk and the potential disclosure of proprietary information.
The primary direct costs that the proposed rules would impose on registrants are compliance costs. To the extent that they are not already gathering the information required to be disclosed under the proposed rules, registrants may need to re-allocate in-house personnel, hire additional staff, and/or secure third-party consultancy services. Registrants may also need to conduct climate-related risk assessments, collect information or data, measure emissions (or, with respect to Scope 3 emissions, gather data from relevant upstream and downstream entities), integrate new software or reporting systems, seek legal counsel, and obtain assurance on applicable disclosures (
In this section, we review sources that provide insight into the magnitude of the potential costs associated with the proposed rules. With some exceptions discussed in further detail, these sources provide information at the level of general costs for climate disclosures. We acknowledge that these sources are limited in scope or representativeness and thus may not directly reflect registrants' compliance costs. For instance, some third-party sources may present cost estimates that do not include all items required under the proposed rules (
As discussed in Section V, for purposes of the Paperwork Reduction Act of 1995 (“PRA”),
One commenter provided cost estimates for their services in assisting client companies prepare TCFD-aligned disclosures.
Another source presents survey results of climate-related disclosure costs for three unnamed companies, which consist of a European-based multinational large-cap financial institution, a US-based large-cap industrial manufacturing company, and a US-based mid-cap waste management company.
The mid-cap waste management company estimates that the cost of producing their first TCFD report was less than $10,000. The company's reported annual costs consist of employee costs ($12,600)
The large-cap industrial manufacturing company reports that the costs of preparing its first CDP questionnaire was no more than $50,000. Additionally, the combined costs of producing its first TCFD, SASB, and GRI disclosures were between $200,000 and $350,000. Reported annual costs include internal costs (between $200,000 and $350,000)
The multinational financial institution reports that the cost of producing its first TCFD report, SASB report, and CDP questionnaire were each less than $100,000 given that such information overlaps with what the company already discloses under the EU's Prospectus Regulation (Regulation (EU) 2017/1129). The company estimates annual costs ranging from $250,000 and $500,000 to produce these disclosures, but as before, this range may combine the costs of activities that are not required in the proposed rules.
Some commenters also provided estimates of climate-related disclosure costs for individual firms. One commenter provided a breakdown of such costs for seven unnamed large cap firms across six different industries.
The UK's Department for Business, Energy & Industrial Strategy, as part of its Green Finance Strategy, has released a final stage impact assessment (the “UK impact assessment”) of their proposed rules that would also require certain TCFD-aligned disclosures from firms and asset managers listed on UK financial markets.
It is important to note that all of these cost estimates are conditional on specific assumptions and can vary significantly depending on firm characteristics, such as firm size, industry, business model, the complexity of the firm's corporate structure, starting level of internal expertise, etc. In addition, we note that, in certain cases, these cost estimates may represent a registrant's optimal response to investor demand, and thus may exceed the minimum cost necessary to fulfill mandatory reporting of climate-related risks. We are accordingly requesting comments regarding compliance costs, including cost data that can be used to generate more accurate, granular, and reliable cost estimates that are more representative of the full set of affected registrants.
In this section, we review the available evidence, which provides some insight into the scope of the compliance costs associated with reporting GHG emissions. We are cognizant of the type of costs that registrants will incur to report GHG emissions,
One commenter reports that their services in calculating client companies' GHG footprints (Scopes 1, 2, and 3 emissions) would initially cost $75,000 to $125,000 if the client company has no prior experience in this area.
Another commenter, a climate management and accounting platform, provided cost estimates of the measurement and reporting of emissions. This commenter's estimates are disaggregated across scopes of emissions as well as “low maturity” vs “high maturity” companies with respect to emissions reporting. Low maturity companies are defined as those that have no formal understanding of GHG emission calculations and have no related policies or programs in place. Accordingly, these companies have not organized or collected any data for such a calculation. High maturity companies are defined as those that have the aforementioned understanding, policies, programs, and data. Therefore, high maturity companies are expected to face lower incremental costs. The commenter estimates that the average first-year startup cost of assessing Scopes 1 and 2 emissions amount to $45,000 and $25,000 for companies of low and high maturity, respectively. Including the assessment of Scope 3 emissions would increase the costs by $80,000 and $25,000 for companies of low and high maturity, respectively. The commenter indicated that it expects these costs to decrease over time as software solutions simplify the process and reduce the burden on companies.
Additional cost estimates are provided by another commenter, which is an organization that assists companies, communities, and other organizations in accurately assessing emissions data across all scopes of emissions.
The EPA has also sought to quantify the costs of measuring and reporting emissions in accordance with the mandatory Greenhouse Gas Reporting Program, which generally requires facility-level reporting of emissions from large emitters and from large suppliers of certain products (
A survey conducted by PCAF provides some estimates of the costs of assessing financed emissions.
Registrants that are accelerated filers and large accelerated filers will incur additional costs in obtaining assurance of Scopes 1 and 2 emissions disclosures. The Commission estimates these costs starting with data on these filers' median audit fees in fiscal year 2020, which is $989,566 and $2,781,962 for accelerated filers and large accelerated filers, respectively.
On the one hand, these estimates may underestimate actual costs as they are based on relative costs of assurance for financial statements, and assurance on emissions may differ in important ways. On the other hand, the costs may be lower in the future to the extent that the market for assurance services matures with respect to institutional knowledge, procedural efficiency, and overall competition. We request additional data that may assist in accurately assessing the costs of obtaining assurance over emissions disclosures.
Incremental compliance costs may be relatively lower for registrants that already meet some of the disclosure and tagging requirements. For instance, registrants that are currently subject to the EPA's Greenhouse Gas Reporting Program would face lower incremental costs in reporting certain scopes of emissions relative to a firm that has no emissions measurement systems in place.
Several industry reports also document how a sizeable portion of U.S.
Similarly, registrants in the insurance industry may also face lower incremental costs due to their existing disclosure practices. As discussed in Section IV.A.3, a large subset of insurance firms are required to disclose their climate-related risk assessment and strategy via the NAIC Climate Risk Disclosure Survey. A comment by a state insurance commissioner stated that because this survey overlaps extensively with the TCFD recommendations, these firms should be able to easily switch to reporting via the TCFD disclosure framework.
Section IV.A.5.e reports survey evidence on the frequency with which firms obtain assurance in sustainability reports. This evidence suggests that a significant fraction of large companies already obtain some form, albeit limited, of assurance. To the extent that large accelerated filers and accelerated filers already voluntarily obtain some form of assurance over their GHG emissions, these registrants would face lower incremental costs associated with complying with the proposed rules' assurance requirements. These registrants tend to bear proportionately lower compliance costs than smaller issuers due to the fixed cost components of such compliance.
Incremental costs may be higher for smaller firms considering that they are less likely to have climate-related disclosure systems and processes already in place.
With respect to the Inline XBRL tagging requirements, various preparation solutions have been developed and used by operating companies to fulfill their structuring requirements, and some evidence suggests that, for smaller companies, XBRL compliance costs have decreased over time.
We expect that the number of registrants committed to preparing climate-related disclosures will increase in the future, independently from our proposed rules. As discussed in Section IV.B.1, a sizeable and growing portion of global investors consider climate change as the leading issue driving their engagements with companies and is demanding robust disclosure around its impacts and the plan to mitigate climate-related risks. Consistent with this increasing demand for climate-related information, recent trends showed an uptick in climate-related disclosures, particularly within samples of larger firms, though not necessarily through their regulatory filings.
In addition to the direct costs of preparing climate-related disclosures, the proposed rules could also lead to indirect costs. For example, the proposed rules may result in additional litigation risk since the proposed climate-related disclosures may be new
However, certain factors may mitigate this concern. First, existing and proposed safe harbors
Another potential indirect cost is the possibility that certain provisions of the proposed rules may force registrants to disclose proprietary information.
Although the proposed rules may impose significant compliance costs, we expect these costs to decrease over time, both from firm-specific and market-wide contexts. From the firm-specific context, registrant disclosing climate-related information for the first time is likely to incur initial fixed costs to develop and implement the necessary processes and controls.
Establishing a framework for standardized climate-related disclosures could also reduce uncertainty for registrants over the specific content to disclose and could mitigate disclosure burdens to the extent that it reduces information requests from third parties. Before registrants can take any tangible steps toward preparing climate-related disclosures, they must first determine which specific climate-related discussions, metrics, and analyses are most appropriate to disclose—a process that, under the current regime, can involve significant uncertainty. Furthermore, the uncertain, complex, and multidimensional nature unique to climate-related risks, combined with the unpredictability of investor responses to such disclosures,
By implementing a standardized climate disclosure framework, the proposed rules could potentially reduce the burden that registrants may face in the environment of diverging voluntary frameworks and help clarify for registrants what they should disclose, where and when to make their disclosures, and what structure or methodology to use.
Furthermore, some registrants currently receive multiple, diverse requests for climate-related information from different parties, such as investors, asset managers, and data service providers. Responding to such third-party request can be costly and inefficient
From a market-wide context, mandated climate disclosures may heighten demand for certain data or third-party services related to preparing the required disclosures, including assistance with the reporting of emissions data. In the short term, there could be a potential increase in the prices of such services to extent that the initial growth in demand exceeds the supply. In the long term, however, this heightened demand is expected to spur competition, innovation, and other economies of scale that could over time lower associated costs for such services and data and improve their availability. Moreover, the aggregate accumulation of institutional knowledge may lead to a broad convergence of disclosure-related best practices, which could further reduce the costs of the proposed disclosures.
Overall, the market effects deriving from competition and innovation could enhance the efficiency and availability of relevant data and services, thereby
As discussed in Section IV.B.2, the complexity, uncertainty, and long-term nature of climate risks make it unlikely that voluntary disclosure of such risks would be fully revealing. Therefore, as detailed in Section IV.C.1, mandating that climate-related disclosures be presented in a comparable and consistent manner and in a machine-readable language (Inline XBRL) is likely to enhance the information environment for investors. In doing so, the proposed rules are expected to improve market efficiency and price discovery by enabling climate-related information to be more fully incorporated into asset prices. Improved efficiency could inform the flow of capital and allow climate-related risks to be borne by those who are most willing and able to bear them.
These expected improvements in market efficiency are broadly consistent with empirical research. If climate-related information is relevant for asset prices, and therefore market efficiency, then the effective disclosure of climate-related information would be expected to cause differential asset price/financing cost responses across firms and settings. Empirical evidence is largely consistent with this expectation. Academic studies have found evidence that among firms that voluntarily report emissions via the CDP questionnaire, those with higher emissions (relative to their size and industry peers) pay higher loan spreads.
While the disclosure of climate-related information can improve market efficiency, investor response to such disclosures can vary depending on specific circumstances, thereby highlighting the limitations of the aforementioned studies.
Empirical research has also documented evidence of market inefficiencies with respect to climate-related risks. For example, one study finds that stock prices of food companies (
These capital market benefits can be further strengthened by the requirement to tag the climate-related disclosures in Inline XBRL, as XBRL requirements have been observed to reduce informational advantages of informed traders, increase stock liquidity, and reduce cost of capital.
There are also important efficiency implications in relation to systemic risks.
In the face of such losses, financial intermediaries may be forced to sell off assets at fire-sale prices to generate enough cash to pay claims or to otherwise meet the time-sensitive cash demands of creditors and counterparties. This fire-sale dynamic could push down asset prices as well as the value of firms holding similar assets due to mark-to-market losses, potentially increasing risk premia and correlations across asset classes.
The provisions included in the proposed rules are expected to increase comparability among registrants by demanding climate-related information in a consistent manner and with machine-readable data language (Inline XBRL). More standardized climate reporting could improve competition among registrants as it could reduce their costs for both producing such information due to enhanced efficiencies of scale across the economy and the cost for acquiring and processing said information by investors.
As discussed in Section IV.C.2, positive externalities from standard reporting practices can provide market-wide cost savings to registrants in the long-term, to the extent that they reduce duplicative effort in registrants' production and acquisition of information (
More standardized reporting should also reduce investors' costs for acquiring and processing climate-related information by facilitating investors' analysis of a registrant's disclosure and assessing its climate-related risks against those of its competitors. The placement of climate-related information in SEC filings with machine-readable data language (Inline XBRL), rather than external reports or company websites, should also make it easier for investors to find and compare this information.
Overall, we expect that by standardizing reporting practices, the proposed rules would level the playing field among firms, making it easier for investors to assess the climate-related risks of a registrant against those of its competitors. The effects of peer benchmarking can contribute to increased competition for companies in search for capital both across and within industries, whereby firms can be more easily assessed and compared by investors against alternative options.
Failure to implement the proposed rules could lead to an informational gap between U.S. registrants and companies
More consistent, comparable, and reliable disclosures could lead to capital-market benefits in the form of improved liquidity, lower costs of capital, and higher asset prices (or firm valuations).
In the first case, less information asymmetry among investors could mitigate adverse selection problems by reducing the informational advantage of informed traders.
Recent studies provide some supporting empirical evidence of these effects within the context of ESG- or climate-related disclosure. These studies have found that, when firms voluntarily provide material sustainability disclosures, they also experience improvements in liquidity (
The proposed rules may have some effects on firm behavior. Prior empirical evidence supports the notion that, in response to mandatory ESG-related disclosure rules, firms tend to report actions that appear more “favorable” with respect to the corresponding disclosures. These decisions would be made by a firm's management with the goal of maximizing firm value in response to the new disclosure mandate. To the extent that these actions reduce firms' exposures to physical and transition risks, this could lower the return that investors require for investing in these firms, hence facilitating capital formation. This could reduce volatility of stock returns due to enhanced resiliency against such risks.
Empirical evidence shows that mandatory reporting of GHG emissions results in reduced aggregate reported emissions among affected firms.
Registrants might respond to the proposed disclosures by devoting more resources to climate-related governance and risk management in an effort to address indirect effects on their business arising from the disclosures. For example, the proposed rules require disclosure of members of the board or management that have prior climate expertise. Some registrants may respond by giving more weight to climate expertise when searching for directors, which may lead them to deviate from the board composition that would have been in place absent the proposed rules. Similarly, the proposed rules would require disclosure on how climate-related risks can impact registrants' consolidated financial statements, among others. Registrants may respond by taking measures to minimize
The provision on GHG Emissions would also require scope 1, 2, and 3 (if material or the registrant has a set a target or goal for scope 3) emission disclosures. These emission disclosures may induce firms to use peer benchmarking to decide whether to investigate and reevaluate their energy usage
The provision requiring assurance of GHG Scopes 1 and 2 emissions disclosures would only apply to accelerated filers. Non-accelerated filers would, instead, be required only to state whether any of their GHG emissions disclosures were subject to third-party assurance, and if so, at what level. By asking all registrants, including non-accelerated filers, to disclose climate-related information within SEC filings, however, the proposed rules may motivate more non-accelerated filers to voluntarily seek assurance over these types of disclosures, than if the same information had been disclosed on companies' websites or sustainability reports. Certain non-accelerated filers may also voluntarily decide to attain assurance over their GHG emission disclosures in order to enhance their reliability and prevent these disclosures from being perceived by investors as less reliable compared to those provided by accelerated filers.
As another example, the proposed rules would require the disclosure of the location (via ZIP code) of firm assets or operations, which could allow investors to assess firms' exposures to physical risk at a more granular level. This may allow investors to more easily diversify these geographic-driven risks or expose themselves to such risks, if they choose to, more deliberately. This may cause some firms to relocate assets or operations to geographical areas less exposed to physical risks and/or give preferences to such areas for future business activity. It may also cause some firms with higher geographic exposures to physical risks to alter overall operational risk and strategies.
The proposed rules might also affect the networks firms choose to operate in. For example, a firm may choose to change some suppliers or disengage with certain clients due to the effect that they may have on the firm's Scope 3 emissions. This may be particularly relevant for certain financial institutions that are impacted by their portfolio firms' emissions or climate-related risks. These financial institutions may be less willing to extend credit to firms for which it is difficult to measure climate risk exposure information, potentially increasing the cost of capital for these firms.
However, there are certain factors that may mitigate this effect. First, the proposed rules establish a phase-in period, which is intended to give financial institutions and their prospective borrowers sufficient time to prepare the required disclosures. Second, analytical tools, data, and related methodologies (such as those related to measuring/reporting GHG emissions) are developing rapidly and increasing in availability. Finally, frameworks like the PCAF to measure financed emissions would allow financial institutions to compute proxies for the emissions of their clients in a systematic and comparable manner even in the absence of actual emissions data.
The proposed rules could also cause some firms to pursue avoidance strategies. The provision on Targets and Goals would require a registrant to disclose whether it has set any climate-related targets or goals and the specific plans in place to achieve those objectives and metrics to monitor progress. This may disincentivize certain firms from making such commitments and providing the associated disclosures in SEC filings. Risk of litigation or enforcement actions, could result in registrants being more cautious in their decision to set climate-related targets. Other firms, however, may find the existence of mandatory disclosures around climate-related targets and goals to be beneficial for signaling credible value-enhancing commitments to investors. More credible and standardized disclosures on climate-related targets and goals could make registrants' communication more effective and facilitate investors' understanding of related progress, hence providing additional incentives for making such commitments.
More generally, if compliance costs with the proposed rules are high, this could influence the marginal firm's decision to exit public markets or refrain from going public in the first place in order to circumvent the disclosure requirements. Firms may choose this strategy if they believe the potential compliance costs from the proposed rules outweigh the benefits of being registered public company. Uptake of this avoidance strategy may widen the transparency gap between public and private firms, negatively affecting capital markets' information efficiency, and potentially reduce the size of the stock market. However, it is unlikely that a significant number of firms would pursue this avoidance strategy given that it would come with significant disadvantages, such as higher costs of capital, limited access to capital markets, and limits to their growth potential. Moreover, recent trends in private markets indicate that industry's top leaders are working toward a standard set of metrics for tracking their portfolio companies' ESG progress. The pressure on private companies to disclose information on climate-related risks is rapidly escalating within the private industry, hence diminishing the potential incentive for registrants to go private in order to avoid climate-related disclosure requirements. For example, since its launch in September 2021, the ESG Data Convergence Project, which seeks to standardize ESG metrics and provide a mechanism for comparative reporting for the private market industry, has announced a milestone commitment of over 100 leading general partners and limited partners to its partnership representing $8.7 trillion USD in AUM and over 1,400 underlying portfolio companies across the globe. The initial data for the project includes, among others, greenhouse gas emissions and renewable energy metrics.
One alternative would be to require the proposed disclosures only from larger registrants, such as large accelerated filers or non-SRCs. While the proposed rules already provide certain exemptions for SRCs (
Another alternative would be to require registrants to conduct scenario analysis and include the related information in their disclosures. Consistent, comparable, and reliable disclosures of scenario analysis could inform investors with respect to the resilience of registrants' business strategies and operations across a range of plausible future climate scenarios. Disclosure of scenario analysis could deliver informational benefits to investors beyond that which would be provided under the proposed rules. It could help investors assess issues that have high uncertainty by evaluating the impact on and the resiliency of the registrant under multiple plausible future scenarios, such as a temperature increase of 1.5°C, 2°C, and 3°C above pre-industrial levels. It could also allow investors to proactively manage risk as they would be better able to assess the range of potential threats and opportunities, evaluate different management actions, and adapt accordingly. Furthermore, since some climate-related risks may only manifest over longer horizons, scenario analysis could assist investors in determining whether registrants have incorporated such risks into their long-term strategy. Investors could subsequently incorporate this information into asset prices, thereby more accurately pricing climate-related risks and contributing to market efficiency.
Both scenario analysis methodologies and climate science, however, continue to advance and develop, which may pose significant challenges for some registrants. Specifically, the required data may be unavailable or costly to obtain. Furthermore, some registrants may lack the necessary expertise, requiring them to hire external consultants to conduct the analysis. These challenges may pose undue burdens with respect to difficulty and/or costs to some registrants, such as smaller companies and those that otherwise have no prior experience in scenario analysis. For these reasons, the Commission is not proposing to mandate scenario analysis and related disclosure at this time.
Another alternative would be to require registrants to follow an external protocol (
First, the organizational boundaries adopted by external protocols may create inconsistencies with the way companies would report information about their GHG emissions vis-à-vis the rest of their financial statements. The GHG Protocol, for example, requires that a company base its organizational boundaries on either an equity share approach or a control approach, which may differ from the way registrants set their scope for the purpose of reporting information in their financial statements. The proposed rules would require a registrant to set the organizational boundaries for its GHG emissions disclosure using the same scope of entities, operations, assets, and other holdings as those included in its consolidated financial statements. Requiring a consistent scope of consolidation and reporting between financial data and GHG emissions data should help avoid potential investor confusion about the reporting scope used in determining a registrant's GHG emissions and the reporting scope used for the financial statement metrics.
Furthermore, requiring companies to follow a specific external protocol might limit flexibility for registrants and thus reduce their ability to report emissions in a manner that is tailored to their specific circumstances. For example, registrants following an existing but different protocol, which nevertheless provides relevant emissions information, would be required to switch protocols, incurring additional cost.
Requiring compliance with a specific protocol could also reduce the scope for innovation in driving the most appropriate forms of disclosure within these overarching guidelines (
Another alternative would be to permit Scopes 1, 2, and 3 emissions disclosures to be considered “furnished” instead of “filed,” which may limit the incremental risk of being held liable under Section 18 of the Exchange Act for these disclosures. This may also benefit some registrants as their Scopes 1 and 2 emissions disclosures would not be automatically incorporated into Securities Act registration statements and thereby not be subject to Section 11 liability. We note that this could have a lower incremental impact on Scope 3 emissions disclosures since Scope 3 emissions disclosures are covered under a proposed safe harbor provision and hence already afforded other liability protections. However, reduced liability in general may lead to the applicable disclosures being perceived as less reliable by investors, which could have adverse effects on registrants' stock liquidity or costs of capital. For these reasons, the Commission is not proposing to permit emissions disclosures to be furnished at this time.
Another alternative would be to not require Scope 3 emissions disclosures if
Another alternative would be to retain the exemption for SRCs, as currently proposed, but also extend it to EGCs. EGCs may similarly face resource constraints related to company size or age, hence this alternative would allow EGCs to avoid the costs of Scope 3 emissions measurement and reporting. Given that the designations of SRC and EGC are not mutually exclusive, however, EGCs that are also SRCs would be covered under the exemption as currently proposed. Conversely, EGCs that are
Another alternative would be to eliminate the exemption for SRCs. Because SRCs make up approximately half of domestic filers in terms of numbers (though considerably less in terms of market cap), this alternative could address data gaps with respect to Scope 3 emissions, with the potential to benefit all investors. As discussed in Section II.G.3, however, this alternative may pose fixed costs (
The proposed rules provide a safe harbor for Scope 3 emissions disclosures. An alternative would be to remove this safe harbor for Scope 3 emissions disclosures. This alternative would strengthen accountability for Scope 3 emissions disclosures. It also would significantly increase registrants' exposure to litigation over the accuracy of such disclosures. While rigorous liability in many contexts can provide incentives that promote reliable disclosures, an accommodation may be warranted for Scope 3 emissions due to the challenges associated with their measurement and disclosure.
The proposed rules would require assurance over Scopes 1 and 2 emissions disclosure from large accelerated filers and accelerated filers. In addition to such assurance, we could require these filers to also obtain either a separate assessment by management and disclosure on the effectiveness of controls over GHG emissions disclosures or an attestation report specifically covering the effectiveness of controls over GHG emissions disclosures, or both. Specifically, management could be required to include a statement in the annual report on their responsibility for the design and evaluation of controls over GHG emission disclosures, as well as to disclose their conclusion regarding the effectiveness of controls over GHG emissions disclosures, in addition to the existing DCP evaluation and disclosure. In addition, we could require a GHG emissions attestation provider to obtain reasonable assurance on whether material weaknesses exist regarding management's assessment of the effectiveness of controls over GHG emissions disclosures as of the measurement date. The GHG emissions attestation provider could also be required to issue an attestation report on the effectiveness of controls over GHG emissions disclosures.
By requiring GHG emissions attestation providers to assess not just the disclosures, but also the controls over GHG emissions disclosures (
However, this alternative would also impose additional assurance costs.
Another alternative would be to require reasonable assurance for Scopes 1 and 2 emissions disclosures from all registrants. As described above, requiring assurance can benefit investors in several ways, including enhanced reliability of disclosures, which would allow investors to make better-informed investment decisions
However, because costs increase with the level of assurance, requiring reasonable assurance may be particularly burdensome for affected registrants (
Obtaining reasonable assurance generally costs more than obtaining limited assurance. Current market practice appears to favor obtaining limited assurance over sustainability reports, if assurance is obtained at all. Experimental evidence suggests assurance (relative to none) may increase perceived reliability of sustainability reports, but is yet to provide evidence that reasonable assurance increases perceived reliability of sustainability reports relative to limited assurance.
One possibility to mitigate the additional costs of reasonable assurance would be to maintain the requirement that large accelerated filers obtain reasonable assurance, but allow accelerated filers to obtain limited assurance without any scaling up to a reasonable assurance. Another possibility would be to require limited assurance, but expand the assurance requirement to a broader scope of registrants including non-accelerated filers and smaller reporting companies. However, these possibilities have the disadvantage of lack of consistency, which could lead to confusion among investors.
Another alternative would be to require all registrants to disclose what type of assurance they are receiving, if any, in lieu of requiring assurance. This would potentially allow affected registrants to avoid the costs of obtaining limited assurance and/or reasonable assurance.
Another alternative would be to permit alternative compliance using host country disclosure frameworks that the Commission deems suitable. Such an alternative would be beneficial for registrants that already comply with another country's disclosure requirements since they could avoid incurring additional costs to comply with the Commission's rules. This flexibility, however, may fail to address or may even exacerbate growing concerns from investors that climate-related disclosures lack comparability and consistency. While it might be individually optimal for a given firm to use their existing host country disclosure frameworks, the potential lack of consistency and comparability of the disclosure between these firms and other registrant might impose costs on investors. Investors might not able to compare across firms using different disclosure presentations, or may have to incur additional costs in order to do so.
With respect to Inline XBRL tagging, one alternative is to change the scope of disclosures required to be tagged. We could, for example, remove the tagging requirements for climate-related disclosures for all or a subset of registrants (such as smaller reporting companies). As another example, we could require only a subset of proposed climate-related disclosures, such as the quantitative climate-related metrics, to be tagged in Inline XBRL. Narrowing the scope of climate-related disclosures to be tagged could provide some incremental cost savings for registrants compared to the proposal, because incrementally less time would be required to select and review the particular tags to apply to the climate-related disclosures.
We expect this incremental cost savings to be low because all affected registrants are or in the near future will be required to tag certain of their disclosures (including both quantitative and qualitative disclosures) in Inline XBRL.
We request comment on all aspects of our economic analysis, including the potential costs and benefits of the proposed rules and alternatives thereto, and whether the proposed rules, if adopted, would promote efficiency, competition, and capital formation or have an impact on investor protection. In addition, we also seek comment on alternative approaches to the proposed rules and the associated costs and benefits of these approaches. Commenters are requested to provide empirical data, estimation methodologies, and other factual support for their views, in particular, on costs and benefits estimates. Specifically, we seek comment with respect to the following questions:
• Are there any costs and benefits to any entity that are not identified or misidentified in the above analysis?
• Are there any effects on efficiency, competition, and capital formation that are not identified or misidentified in the above analysis?
• Are there any other alternative approaches to improving climate-related disclosure that we should consider? If so, what are they and what would be the associated costs or benefits of these alternative approaches? For example, what would be the costs and benefits of implementing a new, comprehensive system, for reporting and transferring GHG emissions across corporate supply and distribution chains, as described by Kaplan and Ramanna (2021)?
• Are there any sources of data that could provide a more precise estimation of the potential compliance costs that registrants may incur if the proposed rules are adopted?
• Have we accurately estimated the costs of disclosing Scope 1 and 2 emissions? If not, please provide alternative estimates of these costs.
• Have we accurately estimated the costs of disclosing Scope 3? If not, please provide alternative estimates of these costs.
• Are there any additional sources of information to estimate the costs of complying with the Scopes 1, 2, and 3 GHG emissions disclosure requirements and the costs of obtaining limited and reasonable assurance for these disclosures?
• Would any data sources allow these compliance cost estimates to be apportioned to separate provisions of the proposed rules? Furthermore, how would these cost estimates vary across time horizons? For example, the first year of implementation may come with higher start-up costs while subsequent years may come with lower costs.
• Have we accurately characterized the cost of limited assurance and reasonable assurance over Scopes 1 and 2 emissions? If not, please provide an estimate of these costs. Similarly, is there data that can show how the costs of limited assurance and reasonable assurance differ for large accelerated, accelerated and non-accelerated filers?
• How are the costs of obtaining limited assurance and reasonable assurance likely to change over time (
Certain provisions of our rules and forms that would be affected by the proposed amendments contain “collection of information” requirements within the meaning of the Paperwork Reduction Act of 1995 (“PRA”).
• Form S-1 (OMB Control No. 3235-0065);
• Form F-1 (OMB Control No. 3235-0258);
• Form S-4 (OMB Control No. 3235-0324);
• Form F-4 (OMB Control No. 3235-0325);
• Form S-11 (OMB Control No. 3235-0067);
• Form 10 (OMB Control No. 3235-0064);
• Form 10-K (OMB Control No. 3235-0063);
• Form 10-Q (OMB Control No. 3235-0070);
• Form 20-F (OMB Control No. 3235-0288); and
• Form 6-K (OMB Control No. 3235-0116).
The proposed amendments would require U.S. registrants filing Securities Act registration statements on Forms S-1, S-4, and S-11 to include the climate-related disclosures required under proposed subpart 1500 of Regulation S-K and proposed Article 14 of Regulation S-X. The proposed amendments would also require foreign private issuers to include the proposed climate-related disclosures when filing Securities Act registration statements on Forms F-1 and F-4. The proposed amendments would further require U.S. registrants and foreign private issuers to include
Our estimates of the paperwork burden associated with the proposed amendments are based primarily on climate-related reporting cost estimates from six sources: A comment letter from the Society for Corporate Governance (“Society”) that provided some hour and cost estimates for climate reporting by large-cap companies;
In response to Acting Chair Lee's request for public input about climate disclosures,
The Climate Risk Disclosure Lab's report presents the results of its survey of one European large-cap financial institution, one US large-cap industrial manufacturing company, and one US mid-cap waste management company about their climate-related disclosure costs.
The UK Impact Assessment estimated on an ongoing, annual basis the number of hours and costs that it would take in-house personnel
We also have considered cost estimates from S&P Global, a data analytics firm that provides ESG consulting services, including climate-related data collection and analysis, among other services. This firm provided one cost estimate for preparing TCFD-aligned disclosures primarily covering physical risk and transition risk assessment and analysis, which, for a company lacking any experience in climate reporting, ranged from $150,000 to $200,000 (an average of $175,000) in the first year of reporting.
This data analytics firm provided a separate cost estimate for calculating a company's Scopes 1, 2, and 3 emissions.
We also considered the cost estimates for GHG emissions measurement and reporting provided by two climate management firms, Persefoni and South Pole. Persefoni estimated that, depending on the maturity of a company's emissions reporting program, a company's average first-year costs for measuring and reporting Scopes 1, 2, and 3 emissions ranged from $50,000 to $125,000, which averages to $87,500, or 1,591 hours.
The UK Impact Assessment estimated that the calculation and reporting of GHG emissions metrics and related targets would take the greatest amount of time, constituting approximately 72 percent of the total incremental burden.
Based on the above sources, we estimate that the proposed qualitative TCFD-aligned disclosures would result in an average incremental burden hour increase of 2,217 hrs. for each affected collection of information for the first year of climate reporting.
In addition to GHG emissions metrics, the proposed rules would require the disclosure of certain climate-related financial statement metrics. Although the TCFD recommends the disclosure of metrics pertaining to the financial impacts of climate-related events and conditions, it is unclear whether the above sources' burden estimates for TCFD-aligned disclosure would include financial statement metrics. Based on staff experience reviewing financial statements, we estimate that preparation of the financial statements to present the proposed financial statement metrics would require 70 additional burden hours per filing. To ensure that our PRA estimates cover the burden associated with the proposed climate-related financial statement metrics, we have included this amount, in addition to the burden estimate for GHG emissions metrics and targets, in the estimated overall PRA burden of the proposed rules.
The proposed rules would require a registrant to present the climate-related financial statement metrics and associated disclosures in a note to its
The proposed rules would require a registrant that is a large accelerated filer
Following a one-year phase-in period in which no attestation report would be required, for filings made for the second and third fiscal years following the compliance date for the GHG emissions disclosure requirement, accelerated filers would be required to obtain an attestation report for their Scopes 1 and 2 emissions disclosure, at minimum, at a limited assurance level. We estimate the cost of a limited assurance attestation report covering an accelerated filer's Scopes 1 and 2 emissions to be $45,000.
The proposed rules would require a registrant that is not required to include a GHG emissions attestation report to state whether any of the registrant's GHG emissions disclosures were subject to third-party attestation or verification. If so, the registrant would be required to identify the provider of assurance or verification and disclose certain additional information, such as the level and scope of assurance or verification provided, among other matters.
The UK Impact Assessment assumed a 25 percent reduction in hour and cost estimates for the work required to comply with the GHG emissions metrics and targets disclosure requirement in Year 2 compared to Year 1 because initial implementation of the metrics and targets framework would not need to be repeated. We believe this assumption is reasonable and have made a similar reduction after the first year of compliance when calculating the four-year average for the estimated paperwork burden hour effect of the proposed rules. We also have assumed a 10 percent reduction in the hour and cost estimates for preparing and providing the disclosures for the other TCFD-aligned topics in Years 2 through 6 compared to Year 1. We believe that this assumption is reasonable because the burden hours and costs associated with becoming familiar with the other TCFD disclosure topics would not need to be repeated.
SRCs, which comprise 50 percent of domestic filers, and 45 percent of total affected registrants,
In addition to requiring the annual climate disclosures, the proposed rules would require a registrant to disclose any material change to its climate-related disclosures reported in its annual Exchange Act annual report (Form 10-K or 20-F) on a Form 10-Q (if a domestic filer) or a Form 6-K (if a foreign private issuer filer). We would not expect a registrant to report such a material change until its second year of compliance, at the earliest. Based on the staff's assessment of the amount of time it would take to determine that there has been a material change in the previously reported climate disclosure, particularly concerning its GHG emissions metrics, and to prepare disclosures regarding the material change, if any, we estimate a burden hour increase of 40 hours per form, or an initial six-year average of 33 hours per form.
The following table summarizes the estimated paperwork burden effects of the proposed amendments for non-SRC and SRC registrants associated with the affected collections of information.
Below we estimate the incremental and aggregate increase in paperwork burden resulting from the proposed amendments. These estimates represent the average burden for all issuers, both large and small. In deriving our estimates, we recognize that the burdens will likely vary among individual registrants based on a number of factors, including the nature of their business, the size and complexity of their operations, and whether they are subject to similar climate-related disclosure requirements in other jurisdictions or already preparing similar disclosures on a voluntary basis. For purposes of the PRA, the burden is to be allocated between internal burden hours and outside professional costs. The table below sets forth the percentage estimates we typically use for the burden allocation for each affected collection of information. We also estimate that the average cost of retaining outside professionals is $400 per hour.
We estimate that the proposed amendments would change the burden per response, but not the frequency, of the existing collections of information. The burden increase estimates for each collection of information were calculated by multiplying the number of responses by the increased estimated average amount of time it would take to prepare and review the disclosure required under the affected collection of information (using the estimated three-year average increase). Since 50 percent of the domestic filers in 2020 were non-SRCs and 50 percent were SRCs, we assume for purposes of our PRA estimates that 50 percent of each domestic collection of information was filed by non-SRCs and 50 percent by SRCs. The table below illustrates the incremental change to the annual compliance burden of the affected collections of information, in hours and costs.
The table below illustrates the program change expected to result from the proposed rule amendments together with the total requested change in reporting burden and costs.
We request comment in order to:
• Evaluate whether the proposed collections of information are necessary for the proper performance of the functions of the agency, including whether the information would have practical utility;
• Evaluate the accuracy of our estimate of the burden of the proposed collections of information, including any assumptions used;
• Determine whether there are ways to enhance the quality, utility, and clarity of the information to be collected;
• Evaluate whether there are ways to minimize the burden of the collections of information on those who are to respond, including through the use of automated collection techniques or other forms of information technology; and
• Evaluate whether the proposed amendments would have any effects on any other collections of information not previously identified in this section.
Any member of the public may direct to us any comments about the accuracy of these burden estimates and any suggestions for reducing these burdens. Persons submitting comments on the collection of information requirements should direct the comments to the Office of Management and Budget, Attention: Desk Officer for the Securities and Exchange Commission, Office of Information and Regulatory Affairs, Washington, DC 20503, and should send a copy to Vanessa A. Countryman, Secretary, Securities and Exchange Commission, 100 F Street NE, Washington, DC 20549-1090, with reference to File No. S7-10-22. Requests for materials submitted to OMB by the Commission with regard to these collections of information should be in writing, refer to File No. S7-10-22, and be submitted to the Securities and Exchange Commission, Office of FOIA Services, 100 F Street NE, Washington, DC 20549-2736. OMB is required to make a decision concerning the collection of information between 30 and 60 days after publication of this release. Consequently, a comment to OMB is best assured of having its full effect if OMB receives it within 30 days of publication.
This Initial Regulatory Flexibility Act Analysis (“IRFA”) has been prepared, and made available for public comment, in accordance with the Regulatory Flexibility Act (“RFA”).
We are proposing to require registrants to provide certain climate-related information in their registration statements and annual reports, including certain information about climate-related financial risks and climate-related financial metrics in their financial statements. The disclosure of this information would provide consistent, comparable, and decision-useful information to investors to enable them to make informed judgments about the impact of climate-related risks on current and potential investments. Information about climate-related risks can have an impact on public companies' financial performance or position and may be material to investors in making investment or voting decisions. For this reason, many investors—including shareholders, investment advisors, and investment management companies—currently seek information about climate-related risks from companies to inform their investment decision-making. Furthermore, many companies have begun to provide some of this information voluntarily in response to investor demand and in recognition of the potential financial effects of climate-related risks on their businesses. We are concerned that the existing voluntary disclosures of climate-related risks do not adequately protect investors. For this reason, mandatory disclosures may be necessary or appropriate to improve the consistency, comparability, and reliability of this information. The reasons for, and objectives of, the proposed amendments are discussed in more detail in Section II above.
We are proposing the amendments contained in this release under the authority set forth in Sections 7, 10, 19(a), and 28 of the Securities Act, as amended, and Sections 3(b), 12, 13, 15, 23(a), and 36 of the Exchange Act, as amended.
The proposed amendments would affect some issuers that are small entities. The RFA defines “small entity” to mean “small business,” “small organization,” or “small governmental jurisdiction.”
The proposed rules would apply to a registrant when filing a Securities Act or Exchange Act registration statement or an Exchange Act annual or other periodic report. We estimate that there are 1,004 registrants that are small entities that would be affected by the proposed rules.
The proposed amendments would require a registrant, including a small entity, to disclose certain climate-related information, including data about their GHG emissions, when filing a Securities Act or Exchange Act registration statement or Exchange Act annual or other periodic report. In particular, like larger registrants, small entities would be required to disclose information about: The oversight of their boards and management regarding climate-related risks; any material impacts of climate-related risks on their consolidated financial statements, business, strategy, and outlook; their risk management of climate-related risks; climate-related targets or goals, if any; and certain financial statement metrics. In addition, like other registrants, small entities would be required to disclose their Scopes 1 and 2 emissions. We anticipate that the nature of any benefits or costs associated with the above proposed amendments would be similar for large and small entities. Accordingly, we refer to the discussion of the proposed amendments' economic effects on all affected parties, including small entities, in Section IV.C. Consistent with that discussion, we anticipate that the economic benefits and costs likely would vary widely among small entities based on a number of factors, including the nature and conduct of their businesses, which makes it difficult to
While small entities would not be exempt from the full scope of the proposed amendments, they would be exempt from the Scope 3 emissions disclosure requirements, which would likely impose the greatest compliance burden for registrants due to the complexity of data gathering, calculation, and assessment required for that type of emissions.
The proposed rules do not duplicate or conflict with other existing federal rules. As discussed in Section IV, some registrants currently report certain GHG emissions via the EPA's 2009 mandatory Greenhouse Gas Reporting Program. However, as discussed above, the reporting requirements of the EPA's program and the resulting data are different and more suited to the purpose of building a national inventory of GHG emissions rather than allowing investors to assess emissions-related risks to individual registrants.
The RFA directs us to consider alternatives that would accomplish our stated objectives, while minimizing any significant economic impact on small entities. In connection with the proposed amendments, we considered the following alternatives:
• Establishing different compliance or reporting requirements that take into account the resources available to small entities;
• Clarifying, consolidating, or simplifying compliance and reporting requirements under the rules for small entities;
• Using performance rather than design standards; and
• Exempting small entities from all or part of the requirements.
As discussed above, the proposed amendments would exempt small entities from certain GHG emissions disclosure requirements that would likely impose the greatest compliance burden on registrants compared to other proposed disclosure requirements. In addition, while there would be a transition period for all registrants to comply with the proposed amendments, small entities would have an additional two more years to comply with the proposed rules than large accelerated filers and an additional year compared to other registrants. We believe that this scaled and phased-in approach would help minimize the economic impact of the proposed amendments on small entities. We are not, however, proposing a complete exemption from the proposed amendments for SRCs because, due to their broad impact across industries and jurisdictions, climate-related risks may materially impact the operations and financial condition of domestic and foreign issuers, both large and small.
For similar reasons, other than the exemption for reporting Scope 3 emissions by SRCs, we are not proposing to clarify, consolidate, or simplify the proposed disclosure requirements for small entities. A key objective of the proposed amendments is to elicit consistent, comparable and reliable information about climate-related risks across registrants. Alternative compliance requirements for small entities could undermine that goal.
The proposed amendments are primarily based on performance standards with some provisions that are more like design standards. For example, while the proposed amendments include certain concepts, such as scopes, developed by the GHG Protocol, they do not require a registrant to use the GHG Protocol's methodology when calculating its GHG emissions if another methodology better suits its circumstances. Using a performance standard for calculation of GHG emissions would provide registrants with some flexibility regarding how to comply with the proposed GHG emissions requirement while still providing useful information for investors about the various scopes of emissions. Similarly, the proposed amendments would require a registrant that is a large accelerated filer or an accelerated filer to include an attestation report covering its Scopes 1 and 2 emissions that would require the report to meet certain minimum criteria while permitting the filer, at its option, to obtain additional levels of assurance. In contrast, the proposed amendments would require all registrants, including small entities, to express their GHG emissions both disaggregated by each constituent greenhouse gas and in the aggregate, expressed in terms of carbon dioxide equivalent (CO
We encourage the submission of comments with respect to any aspect of this IRFA. In particular, we request comments regarding:
• How the proposed rule and form amendments can achieve their objective while lowering the burden on small entities;
• The number of small entity companies that may be affected by the proposed rule and form amendments;
• The existence or nature of the potential effects of the proposed amendments on small entity companies discussed in the analysis;
• How to quantify the effects of the proposed amendments; and
• Whether there are any federal rules that duplicate, overlap, or conflict with the proposed amendments.
Commenters are asked to describe the nature of any effect and provide empirical data supporting the extent of that effect. Comments will be considered in the preparation of the Final Regulatory Flexibility Analysis, if the proposed rules are adopted, and will be placed in the same public file as comments on the proposed rules themselves.
For purposes of the Small Business Regulatory Enforcement Fairness Act of 1996 (“SBREFA”),
• An annual effect on the U.S. economy of $100 million or more;
• A major increase in costs or prices for consumers or individual industries; or
• Significant adverse effects on competition, investment, or innovation.
We request comment on whether our proposal would be a “major rule” for purposes of SBREFA. In particular, we request comment and empirical data on:
• The potential effect on the U.S. economy on an annual basis;
• Any potential increase in costs or prices for consumers or individual industries; and
• Any potential adverse effect on competition, investment, or innovation.
The amendments contained in this release are being proposed under the authority set forth in Sections 7, 10, 19(a), and 28 of the Securities Act, as amended, and Sections 3(b), 12, 13, 15, 23(a), and 36 of the Exchange Act, as amended.
Accountants; Accounting; Administrative practice and procedure, Reporting and recordkeeping requirements, Securities.
For the reasons set out in the preamble, the Commission is proposing to amend title 17, chapter II of the Code of Federal Regulations as follows:
15 U.S.C. 77f, 77g, 77h, 77j, 77s, 77z-2, 77z-3, 77aa(25), 77aa(26), 77nn(25), 77nn(26), 78c, 78j-1, 78
(b) Smaller reporting companies electing to prepare their financial statements with the form and content required in Article 8 need not apply the other form and content requirements in 17 CFR part 210 (Regulation S-X) with the exception of the following:
(1) The report and qualifications of the independent accountant shall comply with the requirements of §§ 210.2-01 through 210.2-07 (Article 2); and
(2) The description of accounting policies shall comply with § 210.4-08(n);
(3) Smaller reporting companies engaged in oil and gas producing activities shall follow the financial accounting and reporting standards specified in § 210.4-10 with respect to such activities; and
(4) Sections 210.14-01 and 210.14-02 (Article 14).
(a)
(b)
(c)
(1) Use financial information that is consistent with the scope of the rest of its consolidated financial statements included in the filing; and
(2) Whenever applicable, apply the same accounting principles that it is required to apply in preparation of the rest of its consolidated financial statements included in the filing.
(d)
(a)
(b)
(2) Disclosure of the aggregate amount of expenditure expensed or the aggregate amount of capitalized costs incurred pursuant to paragraphs (e) and (f) of this section (including any impacts included pursuant to paragraphs (i) and (j) of this section) is not required if such amount is less than one percent of the total expenditure expensed or total capitalized costs incurred, respectively, for the relevant fiscal year.
(c)
(1) Changes to revenues or costs from disruptions to business operations or supply chains;
(2) Impairment charges and changes to the carrying amount of assets (such as inventory, intangibles, and property, plant and equipment) due to the assets being exposed to severe weather, flooding, drought, wildfires, extreme temperatures, and sea level rise;
(3) Changes to loss contingencies or reserves (such as environmental reserves or loan loss allowances) due to impact from severe weather events; and
(4) Changes to total expected insured losses due to flooding or wildfire patterns.
(d)
(1) Changes to revenue or cost due to new emissions pricing or regulations resulting in the loss of a sales contract;
(2) Changes to operating, investing, or financing cash flow from changes in upstream costs, such as transportation of raw materials;
(3) Changes to the carrying amount of assets (such as intangibles and property, plant, and equipment) due to, among other things, a reduction of the asset's useful life or a change in the asset's salvage value by being exposed to transition activities; and
(4) Changes to interest expense driven by financing instruments such as climate-linked bonds issued where the interest rate increases if certain climate-related targets are not met.
(e)
(f)
(g)
(h)
(i)
(j)
15 U.S.C. 77e, 77f, 77g, 77h, 77j, 77k, 77s, 77z-2, 77z-3, 77aa(25), 77aa(26), 77ddd, 77eee, 77ggg, 77hhh, 77iii, 77jjj, 77nnn, 77sss, 78c, 78i, 78j, 78j-3, 78l, 78m, 78n, 78n-1, 78o, 78u-5, 78w, 78ll, 78 mm, 80a-8, 80a-9, 80a-20, 80a-29, 80a-30, 80a-31(c), 80a37, 80a-38(a), 80a-39, 80b-11 and 7201
As used in this subpart, these terms have the following meanings:
(a)
(b)
(c)
(1)
(2)
(3)
(4)
(d)
(e)
(f)
(g)
(h)
(1) Direct emissions are GHG emissions from sources that are owned or controlled by a registrant.
(2) Indirect emissions are GHG emissions that result from the activities of the registrant, but occur at sources not owned or controlled by the registrant.
(i)
(j)
(k)
(l)
(m)
(n)
(o)
(p)
(q)
(r)
(1) Upstream activities in which Scope 3 emissions might occur include:
(i) A registrant's purchased goods and services;
(ii) A registrant's capital goods;
(iii) A registrant's fuel and energy related activities not included in Scope 1 or Scope 2 emissions;
(iv) Transportation and distribution of purchased goods, raw materials, and other inputs;
(v) Waste generated in a registrant's operations;
(vi) Business travel by a registrant's employees;
(vii) Employee commuting by a registrant's employees; and
(viii) A registrant's leased assets related principally to purchased or acquired goods or services.
(2) Downstream activities in which Scope 3 emissions might occur include:
(i) Transportation and distribution of a registrant's sold products, goods or other outputs;
(ii) Processing by a third party of a registrant's sold products;
(iii) Use by a third party of a registrant's sold products;
(iv) End-of-life treatment by a third party of a registrant's sold products;
(v) A registrant's leased assets related principally to the sale or disposition of goods or services;
(vi) A registrant's franchises; and
(vii) Investments by a registrant.
(s)
(t)
(a)(1) Describe the board of director's oversight of climate-related risks. Include the following, as applicable:
(i) The identity of any board members or board committee responsible for the oversight of climate-related risks;
(ii) Whether any member of the board of directors has expertise in climate-related risks, with disclosure in such detail as necessary to fully describe the nature of the expertise;
(iii) The processes by which the board of directors or board committee discusses climate-related risks, including how the board is informed about climate-related risks, and the frequency of such discussion;
(iv) Whether and how the board of directors or board committee considers climate-related risks as part of its business strategy, risk management, and financial oversight; and
(v) Whether and how the board of directors sets climate-related targets or goals, and how it oversees progress against those targets or goals, including the establishment of any interim targets or goals.
(2) If applicable, a registrant may also describe the board of director's oversight of climate-related opportunities.
(b)(1) Describe management's role in assessing and managing climate-related risks. Include the following, as applicable:
(i) Whether certain management positions or committees are responsible for assessing and managing climate-related risks and, if so, the identity of such positions or committees and the relevant expertise of the position holders or members in such detail as necessary to fully describe the nature of the expertise;
(ii) The processes by which such positions or committees are informed about and monitor climate-related risks; and
(iii) Whether and how frequently such positions or committees report to the board or a committee of the board on climate-related risks.
(2) If applicable, a registrant may also describe management's role in assessing and managing climate-related opportunities.
(a) Describe any climate-related risks reasonably likely to have a material impact on the registrant, including on its business or consolidated financial statements, which may manifest over the short, medium, and long term. If applicable, a registrant may also disclose the actual and potential impacts of any climate-related opportunities when responding to any of the provisions in this section.
(1) Discuss such climate-related risks, specifying whether they are physical or transition risks and the nature of the risks presented.
(i) For physical risks, describe the nature of the risk, including if it may be categorized as an acute or chronic risk, and the location and nature of the properties, processes, or operations subject to the physical risk.
(A) If a risk concerns the flooding of buildings, plants, or properties located in flood hazard areas, disclose the percentage of those assets (square meters or acres) that are located in flood hazard areas in addition to their location.
(B) If a risk concerns the location of assets in regions of high or extremely high water stress, disclose the amount of assets (
(ii) For transition risks, describe the nature of the risk, including whether it relates to regulatory, technological, market (including changing consumer, business counterparty, and investor preferences), liability, reputational, or other transition-related factors, and how those factors impact the registrant. A registrant that has significant operations in a jurisdiction that has made a GHG emissions reduction commitment may be exposed to transition risks related to the implementation of the commitment.
(2) Describe how the registrant defines short-, medium-, and long-term time horizons, including how it takes into account or reassesses the expected useful life of the registrant's assets and the time horizons for the registrant's climate-related planning processes and goals.
(b) Describe the actual and potential impacts of any climate-related risks identified in response to paragraph (a) of this section on the registrant's strategy, business model, and outlook.
(1) Include impacts on the registrant's:
(i) Business operations, including the types and locations of its operations;
(ii) Products or services;
(iii) Suppliers and other parties in its value chain;
(iv) Activities to mitigate or adapt to climate-related risks, including adoption of new technologies or processes;
(v) Expenditure for research and development; and
(vi) Any other significant changes or impacts.
(2) Include the time horizon for each described impact (
(c) Discuss whether and how any impacts described in response to paragraph (b) of this section are considered as part of the registrant's business strategy, financial planning, and capital allocation. Provide both current and forward-looking disclosures that facilitate an understanding of whether the implications of the identified climate-related risks have been integrated into the registrant's business model or strategy, including how any resources are being used to mitigate climate-related risks. Include in this discussion how any of the metrics referenced in § 210.14-02 of this chapter and § 229.1504 or any of the targets referenced in § 229.1506 relate to the registrant's business model or business strategy. If applicable, include in this discussion the role that carbon offsets or RECs play in the registrant's climate-related business strategy.
(d) Provide a narrative discussion of whether and how any climate-related risks described in response to paragraph (a) of this section have affected or are reasonably likely to affect the registrant's consolidated financial statements. The discussion should include any of the climate-related metrics referenced in § 210.14-02 of this chapter that demonstrate that the identified climate-related risks have had a material impact on reported financial condition or operations.
(e)(1) If a registrant maintains an internal carbon price, disclose:
(i) The price in units of the registrant's reporting currency per metric ton of CO
(ii) The total price, including how the total price is estimated to change over time, if applicable;
(iii) The boundaries for measurement of overall CO
(iv) The rationale for selecting the internal carbon price applied.
(2) Describe how the registrant uses any internal carbon price described in response to paragraph (e)(1) of this section to evaluate and manage climate-related risks.
(3) If a registrant uses more than one internal carbon price, it must provide the disclosures required by this section for each internal carbon price, and disclose its reasons for using different prices.
(f) Describe the resilience of the registrant's business strategy in light of potential future changes in climate-related risks. Describe any analytical tools, such as scenario analysis, that the registrant uses to assess the impact of climate-related risks on its business and consolidated financial statements, and to support the resilience of its strategy and business model. If the registrant uses scenario analysis to assess the resilience of its business strategy to climate-related risks, disclose the scenarios considered (
(a) Describe any processes the registrant has for identifying, assessing, and managing climate-related risks. If applicable, a registrant may also describe any processes for identifying, assessing, and managing climate-related opportunities when responding to any of the provisions in this section.
(1) When describing any processes for identifying and assessing climate-related risks, disclose, as applicable, how the registrant:
(i) Determines the relative significance of climate-related risks compared to other risks;
(ii) Considers existing or likely regulatory requirements or policies, such as GHG emissions limits, when identifying climate-related risks;
(iii) Considers shifts in customer or counterparty preferences, technological changes, or changes in market prices in assessing potential transition risks; and
(iv) Determines the materiality of climate-related risks, including how it assesses the potential scope and impact of an identified climate-related risk, such as the risks identified in response to § 229.1502.
(2) When describing any processes for managing climate-related risks, disclose, as applicable, how the registrant:
(i) Decides whether to mitigate, accept, or adapt to a particular risk;
(ii) Prioritizes whether to address climate-related risks; and
(iii) Determines how to mitigate any high priority risks.
(b) Disclose whether and how any processes described in response to paragraph (a) of this section are integrated into the registrant's overall risk management system or processes. If a separate board or management committee is responsible for assessing and managing climate-related risks, a registrant should disclose how that committee interacts with the registrant's board or management committee governing risks.
(c)(1) If the registrant has adopted a transition plan as part of its climate-related risk management strategy, describe the plan, including the relevant metrics and targets used to identify and manage any physical and transition risks. To allow for an understanding of the registrant's progress to meet the plan's targets or goals over time, a registrant must update its disclosure about the transition plan each fiscal year by describing the actions taken during the year to achieve the plan's targets or goals.
(2) If the registrant has adopted a transition plan, discuss, as applicable:
(i) How the registrant plans to mitigate or adapt to any identified physical risks, including but not limited to those concerning energy, land, or water use and management;
(ii) How the registrant plans to mitigate or adapt to any identified transition risks, including the following:
(A) Laws, regulations, or policies that:
(
(
(B) Imposition of a carbon price; and
(C) Changing demands or preferences of consumers, investors, employees, and business counterparties.
(3) If applicable, a registrant that has adopted a transition plan as part of its climate-related risk management strategy may also describe how it plans to achieve any identified climate-related opportunities, such as:
(i) The production of products that may facilitate the transition to a lower carbon economy, such as low emission modes of transportation and supporting infrastructure;
(ii) The generation or use of renewable power;
(iii) The production or use of low waste, recycled, or other consumer products that require less carbon intensive production methods;
(iv) The setting of conservation goals and targets that would help reduce GHG emissions; and
(v) The provision of services related to any transition to a lower carbon economy.
(a)
(1) For each required disclosure of a registrant's Scopes 1, 2, and 3 emissions, disclose the emissions both disaggregated by each constituent greenhouse gas, as specified in § 229.1500(g), and in the aggregate, expressed in terms of CO
(2) When disclosing a registrant's Scopes 1, 2, and 3 emissions, exclude the impact of any purchased or generated offsets.
(b)
(2) When calculating emissions pursuant to paragraph (b)(1) of this section, a registrant may exclude emissions from investments that are not consolidated, are not proportionately consolidated, or that do not qualify for the equity method of accounting in the registrant's consolidated financial statements.
(c)
(2) If required to disclose Scope 3 emissions, describe the data sources used to calculate the registrant's Scope 3 emissions, including the use of any of the following:
(i) Emissions reported by parties in the registrant's value chain, and whether such reports were verified by the registrant or a third party, or unverified;
(ii) Data concerning specific activities, as reported by parties in the registrant's value chain; and
(iii) Data derived from economic studies, published databases, government statistics, industry associations, or other third-party sources outside of a registrant's value
(3) A smaller reporting company, as defined by §§ 229.10(f)(1), 230.405, and 240.12b-2 of this chapter, is exempt from, and need not comply with, the disclosure requirements of this paragraph (c).
(d)
(2) If Scope 3 emissions are otherwise disclosed, separately disclose GHG intensity using Scope 3 emissions only.
(3) If a registrant has no revenue or unit of production for a fiscal year, it must disclose another financial measure of GHG intensity or another measure of GHG intensity per unit of economic output, as applicable, with an explanation of why the particular measure was used.
(4) A registrant may also disclose other measures of GHG intensity, in addition to metric tons of CO
(e)
(2) The organizational boundary and any determination of whether a registrant owns or controls a particular source for GHG emissions must be consistent with the scope of entities, operations, assets, and other holdings within its business organization as those included in, and based upon the same set of accounting principles applicable to, the registrant's consolidated financial statements.
(3) A registrant must use the same organizational boundaries when calculating its Scope 1 emissions and Scope 2 emissions. If required to disclose Scope 3 emissions, a registrant must also apply the same organizational boundaries used when determining its Scopes 1 and 2 emissions as an initial step in identifying the sources of indirect emissions from activities in its value chain over which it lacks ownership and control and which must be included in the calculation of its Scope 3 emissions. Once a registrant has determined its organizational and operational boundaries, a registrant must be consistent in its use of those boundaries when calculating its GHG emissions.
(4) A registrant may use reasonable estimates when disclosing its GHG emissions as long as it also describes the assumptions underlying, and its reasons for using, the estimates.
(i) When disclosing its GHG emissions for its most recently completed fiscal year, if actual reported data is not reasonably available, a registrant may use a reasonable estimate of its GHG emissions for its fourth fiscal quarter, together with actual, determined GHG emissions data for the first three fiscal quarters, as long as the registrant promptly discloses in a subsequent filing any material difference between the estimate used and the actual, determined GHG emissions data for the fourth fiscal quarter.
(ii) In addition to the use of reasonable estimates, a registrant may present its estimated Scope 3 emissions in terms of a range as long as it discloses its reasons for using the range and the underlying assumptions.
(5) A registrant must disclose, to the extent material and as applicable, any use of third-party data when calculating its GHG emissions, regardless of the particular scope of emissions. When disclosing the use of third-party data, it must identify the source of such data and the process the registrant undertook to obtain and assess such data.
(6) A registrant must disclose any material change to the methodology or assumptions underlying its GHG emissions disclosure from the previous fiscal year.
(7) A registrant must disclose, to the extent material and as applicable, any gaps in the data required to calculate its GHG emissions. A registrant's GHG emissions disclosure should provide investors with a reasonably complete understanding of the registrant's GHG emissions in each scope of emissions. If a registrant discloses any data gaps encountered when calculating its GHG emissions, it must also discuss whether it used proxy data or another method to address such gaps, and how its accounting for any data gaps has affected the accuracy or completeness of its GHG emissions disclosure.
(8) When determining whether its Scope 3 emissions are material, and when disclosing those emissions, in addition to emissions from activities in its value chain, a registrant must include GHG emissions from outsourced activities that it previously conducted as part of its own operations, as reflected in the financial statements for the periods covered in the filing.
(9) If required to disclose Scope 3 emissions, when calculating those emissions, if there was any significant overlap in the categories of activities producing the Scope 3 emissions, a registrant must describe the overlap, how it accounted for the overlap, and the effect on its disclosed total Scope 3 emissions.
(f)
(2) This paragraph (f) applies to any statement regarding Scope 3 emissions that is disclosed pursuant to §§ 229.1500 through 229.1506 and made in a document filed with the Commission.
(3) For the purpose of this paragraph (f), the term fraudulent statement shall mean a statement that is an untrue statement of material fact, a statement false or misleading with respect to any material fact, an omission to state a material fact necessary to make a statement not misleading, or that constitutes the employment of a manipulative, deceptive, or fraudulent device, contrivance, scheme, transaction, act, practice, course of business, or an artifice to defraud as those terms are used in the Securities Act of 1933 or the Securities Exchange Act of 1934 or the rules or regulations promulgated thereunder.
(a)
(2) Any attestation report required under this section must be provided pursuant to standards that are publicly available at no cost and are established by a body or group that has followed due process procedures, including the broad distribution of the framework for public comment. An accelerated filer or a large accelerated filer obtaining voluntary assurance prior to the first required fiscal year must comply with subparagraph (e) of this section. Voluntary assurance obtained by an accelerated filer or a large accelerated filer thereafter must follow the requirements of paragraphs (b) through (d) of this section and must use the same attestation standard as the required assurance over Scope 1 and Scope 2.
(b)
(1) Is an expert in GHG emissions by virtue of having significant experience in measuring, analyzing, reporting, or attesting to GHG emissions. Significant experience means having sufficient competence and capabilities necessary to:
(i) Perform engagements in accordance with professional standards and applicable legal and regulatory requirements; and
(ii) Enable the service provider to issue reports that are appropriate under the circumstances.
(2) Is independent with respect to the registrant, and any of its affiliates, for whom it is providing the attestation report, during the attestation and professional engagement period.
(i) A GHG emissions attestation provider is not independent if such attestation provider is not, or a reasonable investor with knowledge of all relevant facts and circumstances would conclude that such attestation provider is not, capable of exercising objective and impartial judgment on all issues encompassed within the attestation provider's engagement.
(ii) In determining whether a GHG emissions attestation provider is independent, the Commission will consider:
(A) Whether a relationship or the provision of a service creates a mutual or conflicting interest between the attestation provider and the registrant (or any of its affiliates), places the attestation provider in the position of attesting such attestation provider's own work, results in the attestation provider acting as management or an employee of the registrant (or any of its affiliates), or places the attestation provider in a position of being an advocate for the registrant (or any of its affiliates); and
(B) All relevant circumstances, including all financial or other relationships between the attestation provider and the registrant (or any of its affiliates), and not just those relating to reports filed with the Commission.
(iii) The term “affiliates” as used in this section has the meaning provided in 17 CFR 210.2-01, except that references to “audit” are deemed to be references to the attestation services provided pursuant to this section.
(iv) The term “attestation and professional engagement period” as used in this section means both:
(A) The period covered by the attestation report; and
(B) The period of the engagement to attest to the registrant's GHG emissions or to prepare a report filed with the Commission (“the professional engagement period”). The professional engagement period begins when the GHG attestation service provider either signs an initial engagement letter (or other agreement to attest a registrant's GHG emissions) or begins attest procedures, whichever is earlier.
(c)
(1) An identification or description of the subject matter or assertion being reported on, including the point in time or period of time to which the measurement or evaluation of the subject matter or assertion relates;
(2) An identification of the criteria against which the subject matter was measured or evaluated;
(3) A statement that identifies the level of assurance provided and describes the nature of the engagement;
(4) A statement that identifies the attestation standard (or standards) used;
(5) A statement that describes the registrant's responsibility to report on the subject matter or assertion being reported on;
(6) A statement that describes the attestation provider's responsibilities in connection with the preparation of the attestation report;
(7) A statement that the attestation provider is independent, as required by paragraph (a) of this section;
(8) For a limited assurance engagement, a description of the work performed as a basis for the attestation provider's conclusion;
(9) A statement that describes significant inherent limitations, if any, associated with the measurement or evaluation of the subject matter against the criteria;
(10) The GHG emissions attestation provider's conclusion or opinion, based on the applicable attestation standard(s) used;
(11) The signature of the attestation provider (whether by an individual or a person signing on behalf of the attestation provider's firm);
(12) The city and state where the attestation report has been issued; and
(13) The date of the report.
(d)
(1) Whether the attestation provider has a license from any licensing or accreditation body to provide assurance, and if so, identify the licensing or accreditation body, and whether the attestation provider is a member in good standing of that licensing or accreditation body;
(2) Whether the GHG emissions attestation engagement is subject to any oversight inspection program, and if so, which program (or programs); and
(3) Whether the attestation provider is subject to record-keeping requirements with respect to the work performed for
(e)
(1) Identify the provider of such attestation or verification;
(2) Describe the attestation or verification standard used;
(3) Describe the level and scope of attestation or verification provided;
(4) Briefly describe the results of the attestation or verification;
(5) Disclose whether the third-party service provider has any other business relationships with or has provided any other professional services to the registrant that may lead to an impairment of the service provider's independence with respect to the registrant; and
(6) Disclose any oversight inspection program to which the service provider is subject (
(a)(1) A registrant must provide disclosure pursuant to this section if it has set any targets or goals related to the reduction of GHG emissions, or any other climate-related target or goal (
(2) A registrant may provide the disclosure required by this section as part of its disclosure in response to § 229.1502 or § 229.1503.
(b) If the registrant has set climate-related targets or goals, disclose the targets or goals, including, as applicable, a description of:
(1) The scope of activities and emissions included in the target;
(2) The unit of measurement, including whether the target is absolute or intensity based;
(3) The defined time horizon by which the target is intended to be achieved, and whether the time horizon is consistent with one or more goals established by a climate-related treaty, law, regulation, policy, or organization;
(4) The defined baseline time period and baseline emissions against which progress will be tracked with a consistent base year set for multiple targets;
(5) Any interim targets set by the registrant; and
(6) How the registrant intends to meet its climate-related targets or goals. For example, for a target or goal regarding net GHG emissions reduction, the discussion could include a strategy to increase energy efficiency, transition to lower carbon products, purchase carbon offsets or RECs, or engage in carbon removal and carbon storage.
(c) Disclose relevant data to indicate whether the registrant is making progress toward meeting the target or goal and how such progress has been achieved. A registrant must update this disclosure each fiscal year by describing the actions taken during the year to achieve its targets or goals.
(d) If carbon offsets or RECs have been used as part of a registrant's plan to achieve climate-related targets or goals, disclose the amount of carbon reduction represented by the offsets or the amount of generated renewable energy represented by the RECS, the source of the offsets or RECs, a description and location of the underlying projects, any registries or other authentication of the offsets or RECs, and the cost of the offsets or RECs.
Provide the disclosure required by this Subpart 1500 in an Interactive Data File as required by § 232.405 of this chapter (Rule 405 of Regulation S-T) in accordance with the EDGAR Filer Manual.
15 U.S.C. 77c, 77f, 77g, 77h, 77j, 77s(a), 77z-3, 77sss(a), 78c(b), 78
(b) * * *
(1) * * *
(iii) As applicable, the disclosure set forth in paragraph (4) of this section.
(3) * * *
(i) * * *
(C) The disclosure set forth in paragraph (4) of this section.
(4) An Interactive Data File must consist of the disclosure provided under 17 CFR 229 (Regulation S-K) and related provisions that is required to be tagged, including, as applicable:
(i) The climate-related information required by Subpart 1500 of Regulation S-K (§§ 229.1500 through 229.1507 of this chapter).
15 U.S.C. 77c, 77f, 77g, 77h, 77j, 77s, 77z-2, 77z-3, 77sss, 78c, 78
The text of Form S-1 does not, and these amendments will not, appear in the Code of Federal Regulations.
(o) Information required by Subpart 1500 of Regulation S-K (17 CFR 229.1500 through 229.1507), in a part of the registration statement that is separately captioned as
The text of Form S-11 does not, and these amendments will not, appear in the Code of Federal Regulations.
Item 9. Climate-related disclosure. Provide the information required by Subpart 1500 of Regulation S-K (17 CFR 229.1500 through 229.1507), in a part of the registration statement that is separately captioned as
The additions read as follows:
The text of Form S-4 does not, and these amendments will not, appear in the Code of Federal Regulations.
Item 14. Information With Respect to Registrants Other Than S-3 Registrants.
(k) Information required by Subpart 1500 of Regulation S-K (17 CFR 229.1500 through 229.1507), in a part of the registration statement that is separately captioned as
(b) * * *
(11) Information required by Items 1500-1507 of Regulation S-K (17 CFR 229.1500 through § 229.1507), in a part of the registration statement that is separately captioned as
The additions read as follows:
The text of Form F-4 does not, and these amendments will not, appear in the Code of Federal Regulations.
(k) Item 3.E of Form 20-F, climate-related disclosure.
(b) * * *
(3) Item 3.E of Form 20-F, climate-related disclosure;
15 U.S.C. 78a
Section 249.220f is also issued under secs. 3(a), 202, 208, 302, 306(a), 401(a), 401(b), 406 and 407, Pub. L. 107-204, 116 Stat. 745, and secs. 2 and 3, Pub. L. 116-222, 134 Stat. 1063.
Section 249.308a is also issued under secs. 3(a) and 302, Pub. L. 107-204, 116 Stat. 745.
Section 249.310 is also issued under secs. 3(a), 202, 208, 302, 406 and 407, Pub. L. 107-204, 116 Stat. 745.
The text of Form 10 does not, and these amendments will not, appear in the Code of Federal Regulations.
Item 3.A Climate-Related Disclosure. Provide the information required by Subpart 1500 of Regulation S-K (17 CFR 229.1500 through 229.1507), in a part of the registration statement that is separately captioned as
The text of Form 20-F does not, and these amendments will not, appear in the Code of Federal Regulations.
1.
2.
The text of Form 10-Q does not, and these amendments will not, appear in the Code of Federal Regulations.
Item 1B. Climate-Related Disclosure. Disclose any material changes to the disclosures provided in response to Item 6 (“Climate-related disclosure”) of Part II to the registrant's Form 10-K (17 CFR 229.310).
The revision and addition read as follows:
The text of Form 10-K does not, and these amendments will not, appear in the Code of Federal Regulations.
(1) * * *
(g) Item 6, Climate-Related Disclosure;
Part II
Provide the disclosure required by Subpart 1500 of Regulation S-K (17 CFR 229.1500 through 229.1507) in a part of the annual report that is separately captioned as
By the Commission.
Federal Communications Commission.
Final rule.
In this document, the Wireless Telecommunications Bureau (WTB), the Office of Economics and Analytics (OEA), and the Office of Engineering and Technology (OET) (collectively, the Bureau and Offices) adopt technical requirements to implement the mobile challenge, verification, and crowdsourcing processes required by the Broadband DATA Act. The Bureau and Offices adopt the proposed processes and methodology set forth in the
Effective May 11, 2022.
William Holloway at
This is a summary of the Commission's
1. In this document, the Bureau and Offices adopt the technical requirements to implement the mobile challenge, verification, and crowdsourcing processes required by the Broadband DATA Act as part of the FCC's ongoing BDC effort to improve the Commission's broadband availability data.
2. In this document, the Bureau and Offices adopt the proposals for the mobile challenge process set forth in the
3. The Broadband DATA Act requires that the Commission “establish a user-friendly challenge process through which consumers, [s]tate, local, and Tribal governmental entities, and other entities or individuals may submit coverage data to the Commission to challenge the accuracy of—(i) the coverage maps; (ii) any information submitted by a provider regarding the availability of broadband internet access service; or (iii) the information included in the [Broadband Serviceable Location] Fabric.” The general requirements and framework for the mobile challenge process predate the
4. The Commission determined that it should enable stakeholders to challenge mobile coverage data based on both a lack of service and poor service quality (such as slow delivered user speeds). Challenges must be based upon on-the-ground speed test data taken outdoors (
5. The Commission adopted a requirement for providers to either submit a rebuttal to the challenge or concede the challenge within 60 days of being notified of the challenge. Rebuttals must consist of either on-the-ground test data or infrastructure data. A challenge respondent may also submit supplemental data in support of its rebuttal, either voluntarily or in response to a request for additional information from OEA. The Commission directed OEA to develop a methodology and mechanism to determine if the data submitted by a provider constitute a successful rebuttal to all or some of the challenged service area and to establish procedures to notify challengers and providers of the results of a challenge. Further, the Commission adopted a requirement that providers that concede or lose a challenge file new coverage data within 30 days depicting the challenged area that has been shown to lack service.
6. The requirements that we adopt in this document will enable the Commission to collect sufficient measurements to ensure that the challenge process is statistically valid while remaining “user-friendly.” In particular, we establish a methodology for determining a threshold number of mobile speed tests and the geographic boundaries within a specified area. Based on this methodology, a challenge is created by associating the locations of validated speed tests within geographical hexagons defined by the accessible, open-source H3 geospatial indexing system and analyzing those speed tests. We also adopt the parameters and metrics that speed tests must meet to be validated and used to meet the challenge thresholds. Importantly, as the Commission specified in the
7.
8. In the
9. We clarify that the minimum and maximum test length parameters will apply individually to download speed, upload speed, and round-trip latency measurements, and will not include ramp up time. We disagree with the Competitive Carriers Association (CCA), Public Knowledge/New America, and Vermont Department of Public Service (Vermont DPS) that imposing a maximum test limit places an arbitrary or inferior limitation on testing. These timing requirements balance representative measurement over a stable Transmission Control Protocol (TCP) connection, on the one hand, versus data usage considerations, on the other hand—especially for consumers who may have limited data plans. The FCC Speed Test app, for example, first initiates a test server selection process, which typically takes two seconds (and a maximum of 10 seconds if servers fail to respond) then individually runs, including a warm-up time, a maximum of eight seconds for download and eight seconds for upload tests by establishing three concurrent TCP connections and summing the three resulting data rates for each test. In addition, the round-trip latency testing runs for a fixed five seconds to transmit up to 200 UDP (User Datagram Protocol) packets (
10. We also decline to adopt CCA's request to exempt continuous network monitoring from the maximum test length. Continuous network monitoring software can monitor active users' speeds at the cell sites and other network parameters over extended periods of time. We are not persuaded that deviating from the uniform 30-second per test component maximum testing standard to accommodate continuous network monitoring will yield equal or more accurate test results. We found in the Mobility Fund Phase II challenge process that continuous network monitoring speed tests recorded significant variability within the same area and across a short time span, in some cases recording strong network performance well exceeding the minimum requirement interspersed with short seconds-long drops in performance that may have been the result of normal network conditions (
11. We share Ookla's concern that averaging the number of bits received over the entire duration of a throughput
12. We require on-the-ground speed test data to include a standardized set of metrics. Each on-the-ground speed test must include the following metrics that were previously adopted by the Commission as modified by the updates proposed in the
13. Finally, we require on-the-ground challenge test data to include all other metrics required per the most recent specification for mobile test data adopted by OEA and WTB in accordance with 5 U.S.C. 553. Concurrent with release of this document, we are publishing the full technical and data specifications for mobile speed test data on the Commission's website at
14. We recognize the concerns raised by Vermont DPS, Enablers, and Public Knowledge/New America about excessive data and burdens on consumers and governments and other third-party challengers to assure that their data aligns to these standards, but we believe that such parameters and metrics are necessary to provide the Commission with complete and reliable challenge data that accurately reflect on-the-ground conditions in the challenged
15. We understand that certain technical network information and RF metrics that we would otherwise require are not currently available on Apple iOS devices. The information we will use in the challenge process that can be collected from Android devices, but not iOS devices, includes the signal strength, signal quality, unique identifier, and other RF metrics of each serving cell, as well as the spectrum bands used for the test and other network characteristics (
16. Third-party app developers and government or other entities that use their own hardware or software to conduct speed tests will be required to update their processes in accordance with updates to the full technical and data specifications for mobile speed test data, including, as stated in the
17.
18. We decline to provide a further opportunity for comment on the FCC Speed Test app. Although some parties request an opportunity for public comment on both the FCC Speed Test app and third-party apps before we allow them to be used in the challenge process, we note that the Commission already sought comment on the use of the FCC Speed Test app in the challenge process as part of this rulemaking proceeding. The Commission also provided other opportunities to comment on the FCC Speed Test app because (1) the app was initially developed in coordination with the major wireless providers and trade associations several years ago; and (2) information on the data collected by the app has been publicly available on the Commission's website and has been available for comment in a rulemaking docket for several years. Additionally, the Commission specified in the
19. CCA and RWA assert that it is unclear how the FCC Speed Test app will operate when there is inadequate connectivity to upload data or record a test. The FCC Speed Test app is designed to record and store measurements conducted in areas without internet connectivity and then to automatically transmit such failed tests once the app is opened when the device next has broadband connectivity. Moreover, third-party apps will be required to function in a similar way to be granted approval for use in the challenge process. Several commenters likewise misunderstand how the FCC Speed Test App reports “failed” tests or tests where mobile service is unavailable. As set forth in the 2021 technical description of the FCC Speed Test app, “test[ ] results are transferred depending on the available connectivity at the conclusion of the test and can be stored and forwarded when connectivity is immediately unavailable.” Failed test results are therefore uploaded to the server and included in the relevant dataset when the app user reestablishes a broadband connection. The upload and download components of a failed test will be recorded as negative if they fail to meet the minimum speeds that the mobile service provider reports as available where the test occurred. For example, if a failed test records speeds of 0 megabits per second (Mbps) upload and 0 Mbps download, both components of the test will be recorded as negative.
20. At a later date, OET will release a public notice outlining the process for collecting, reviewing, and approving applications for third-party speed test apps. In their applications, app developers will be required to describe their performance-centric speed test methodologies and how their app complies with the data collection requirements set forth in this document. Applicants will not be required to disclose any proprietary and/or confidential information that is sensitive to public inspection, such as source code, to the Commission, and we therefore decline to adopt T-Mobile's request that we require developers to submit their source code for public review. The OET public notice also will describe procedures for interested parties to submit comments and replies in response to the proposals and will publish on the Commission's website a list of approved third-party apps and any available data specifications for third-party apps.
21. We agree with commenters who recommend holding the FCC Speed Test app and third-party apps to the same technical standards. Both the FCC Speed Test app and third-party apps, as well as software used by state and local governments and other third parties, must comply with the data collection requirements set forth in this document. We also agree with commenters who recommend requiring speed test apps to use multiple servers that are geographically diverse. As to this point, CCA asserts that Ookla's speed test app is more accurate than the FCC Speed Test app due in major part to its many geographically distributed servers (with 41 servers in the U.S. and 15,019 testing servers globally), which allow users to run a test against a server that is located physically close to them reducing the likelihood of inaccurate latency measurements or artificial increases in latency distorting the download and upload speeds. As described in the most recent technical description for the FCC Speed Test app, the app currently carries out measurements against 13 servers spread out across ten locations throughout the United States and initiates a test sequence by selecting a measurement server using a latency test to identify the optimal server that has the lowest round-trip latency for performing subsequent tests. We believe that the current distribution of FCC Speed Test app servers, combined with this measurement server selection process, provides sufficient diversity to meet this geographic-diversity criterion. We also note that the number of servers used by a speed test is of less concern than the ratio of the concurrent consumers conducting tests to the total capacity of the test server hosting those tests (
22.
23. Similarly, if a challenger conducts a test but fails to connect to any network, we will treat that as a failed test against the provider's coverage maps for each technology to which the device is capable of connecting. These small changes to our original proposal will help prevent the scenario raised by Vermont DPS and enable more meaningful challenges in areas with marginal coverage where a device “falls back” to a lower-generation technology. Our updated approach also accounts for situations in which a device could alternate between, or utilize both, 4G LTE and 5G-NR over the course of a single test. Verizon agrees with the Bureau and Offices' initial proposal to compare each speed test against the relevant coverage map, and argues that “only speed tests conducted on 3G networks should be used to challenge 3G coverage, only speed tests conducted on 4G LTE networks should be used to challenge 4G LTE coverage, and only speed tests conducted on 5G-NR networks should be used to challenge 5G-NR coverage.” However, we are persuaded that the proposal we sought comment on in the
24. We will also compare speed tests conducted in a particular environment—outdoor stationary or in-vehicle mobile—to where the provider's maps report coverage for the corresponding environment (
25. In response to Verizon's concerns that tests may be throttled, we will not validate, for purposes of the challenge process, speed tests conducted by customers of mobile virtual network operators (MVNOs) or tests conducted while roaming on another carrier's network, so as to avoid biasing the challenge process with speed tests that may not reflect typical network performance. MVNOs do not own any network facilities. Instead, they purchase mobile wireless service wholesale from facilities-based service providers and resell these services to consumers. Because the agreements between a facilities-based provider and MVNOs or roaming partners often include limitations on the technology and speed available to or the network prioritization of devices used by consumers of the MVNO or roaming partner, we conclude that speed tests from such devices are not reliable evidence about the performance of the facilities-based provider's network. While we anticipate that the majority of tests conducted by an MVNO subscriber or while roaming will fail our automated validations, there may be circumstances where the BDC system is unable to automatically identify these tests (
26.
27. We will combine such speed test evidence and apply a single methodology to determine whether the thresholds for a cognizable challenge (described in greater detail below) have been met and the boundaries of the challenged area. Several commenters express support for aggregating speed tests from multiple challengers, and we find that doing so will result in more accurate challenges and will further the Commission's goals of resolving challenges in an efficient manner, mitigating time and expense, and ensuring that maps are as reliable and useful as possible. We disagree with the California Public Utilities Commission's (CPUC) assertion that combining speed test data will not reduce costs or complexity in the challenge process. In fact, combining speed tests could ease the other potential burdens on an individual challenger of conducting multiple speed tests to meet the challenge thresholds. Our approach ensures that a smaller number of speed tests by one person or entity may nevertheless contribute to a challenge because the tests will be combined with other validated speed tests to meet the testing, temporal, and geographic thresholds. As a result, in many cases, no single challenger—whether a consumer, a government agency, or other entity—will be required to individually shoulder the burden of creating a challenge. While in places with low population density an individual challenger may be the only entity to submit speed tests to create a cognizable challenge, in many other cases, challengers will be able to combine efforts to submit speed tests in an area. Speed tests will be combined and used collectively—according to
28. We will evaluate tests for a given technology against each provider map independently (one reporting stationary and one reporting in-vehicle mobile coverage) when determining whether to establish a cognizable challenge. Pursuant to the
29. Several providers express concern about the proposal to aggregate in-vehicle mobile and outdoor stationary tests and compare them collectively against both coverage maps. As described above, we will not aggregate all stationary and in-vehicle mobile tests for comparison against both maps but will evaluate stationary tests against the stationary map and the in-vehicle mobile tests against the in-vehicle map. Rather than aggregating all tests, we will allow cognizable challenges to the stationary map to also create a challenge for the same area on the in-vehicle map and successful provider responses to the in-vehicle map to also refute a cognizable challenge of the same area on the stationary map. We find that this approach adequately addresses providers' concerns about comparing tests from different modeled environments, and promotes consistency between the maps. We thus decline to adopt the Vermont DPS's recommendation to allow challengers to submit in-motion tests to challenge stationary coverage, because we do not expect in-vehicle tests to achieve the same performance had the test been conducted in a stationary environment. If we did not allow for challenge or response comparison to both maps in the limited circumstances we adopt above, it would be easier for one map in an area to show a lack of coverage while the other map shows robust coverage—solely because of a lack of testing.
30. Data from speed tests taken after the “as-of” date of the initial BDC data collection will be considered as part of the challenge process upon confirmation that they meet the validation criteria set forth herein. Accordingly, once the Commission has generated maps of the data collected from providers, the BDC system will analyze all previously submitted tests to determine whether they were taken after the “as-of” date of the maps and to perform the data validations discussed further below, including whether they were taken within the published coverage area claimed by the applicable provider. Speed tests submitted as part of the challenge process that do not meet these qualifications will be considered crowdsourced data. Validated speed tests results will be reconsidered on a monthly basis, in conjunction with any newly validated speed test filings, to determine whether the data meet the geographic, temporal, and testing thresholds to create a cognizable challenge to an area. Such speed tests will be considered for up to one year to determine whether the data for a location subsequently meet the thresholds to be considered a cognizable challenge, and if so, the tests will be used collectively to challenge the maps that are published at that time.
31. Once the maps have been published, the BDC system will analyze all submitted tests to determine whether speed tests fall within the geographic area depicted in a provider's published coverage area. Speed tests submitted after the “as of” date but prior to publication of the map, as well as those submitted after the publication of the maps, will be used to challenge the maps that are published at that time, subject to the restriction that speed tests are considered valid evidence for one year from the date the test was taken. During the one-year period that they remain valid evidence, speed tests may initially be excluded from consideration in the challenge process because the speed tests fell outside of the provider's reported coverage maps but be included when the system reconsiders the challenge data every month, due to subsequent publication of maps reporting coverage in which such tests are located. For example, if a challenger submits otherwise valid speeds tests that were conducted in July in an area reported by the provider to not have coverage in its maps that are “as of” the previous December 31, such tests would be initially excluded. If the coverage maps submitted by the provider “as of” June 30 and published in September of that year do report such areas as covered however, the tests taken in July would be considered as valid evidence in favor of a challenge to the June 30 maps. Parties submitting speed tests to be used in the challenge process will be notified when their test has been submitted and that the test submitted may be used to create a challenge if such data meet the validation requirements. Thereafter, parties that have submitted speed tests to be used in the challenge process will be notified of the status of their submitted speed tests, which will include information on whether their speed test is used in the creation of a cognizable challenge.
32.
33. Based on the record and the goals underlying the Broadband DATA Act, we adopt our proposal to exclude voice maps from the challenge process. The Broadband DATA Act requires the Commission to establish a process for challenging the accuracy of broadband coverage data, which, for mobile services, is defined as “the coverage maps” (
34. Additionally, we reject commenters' requests to allow challenges only to outdoor stationary coverage maps. CTIA—The Wireless Association, Verizon, T-Mobile, and AT&T argue that the Commission should focus first on challenges to outdoor stationary maps, and defer consideration of any challenges to in-vehicle maps until after it has ruled on CTIA's petition for reconsideration to eliminate in-vehicle coverage maps. The Commission's
35. Finally, we decline to adopt Vermont DPS's request to change the thresholds for in-vehicle tests “to account for the slight difference in performance of stationary and mobile tests” because, as discussed, we will not use in-vehicle test data to form the basis of a challenge of stationary maps. Moreover, Vermont DPS has not given us any objective metric by which to adjust tests upward or downward for purposes of meeting the threshold when comparing the test against the other environment (
36. We also reject suggestions that we permit challenges only in rural areas. The Broadband DATA Act envisions a broad challenge process, and there is nothing in the Act that authorizes the Commission, or by extension, the Bureau and Offices, to limit the challenge process to rural areas.
37.
38. Some commenters support the use of hexagons to evaluate challenges but recommend basing challenges on a different hexagonal cell size. While Vermont DPS generally supports the proposed use of H3 indexing, it argues that the system is not intuitive to use and asks the Commission to create and share geospatial indexing system (GIS) layers for the H3 hexagons at all resolutions it intends to employ in the coverage analysis, which we have already done. CTIA, T-Mobile, and AT&T urge us to use smaller resolution 10 hexagons instead of resolution 8, contending that hexagons at resolution 10 better match the 100-meter resolution providers must use when submitting their coverage maps. RWA and Vermont DPS, meanwhile, recommend allowing challenges to resolution 6 and 7 hexagons in rural areas, which RWA notes are often difficult to test because of a lack of accessible roads.
39. We find that resolution 8 strikes an appropriate balance as the smallest resolution for a cognizable challenge. Smaller areas (
40. RWA and Verizon assert that the use of the H3 geospatial indexing system would present implementation issues. RWA cautions that third-party network maps, which providers may use to supplement the data used to rebut challenges, may not be compatible with the H3 geospatial indexing system. Verizon also raises concerns that providers would need to develop new tools and systems for managing speed tests and evaluating data in an H3-based environment and notes that tracking and evaluation may be complicated because child cells will not nest precisely into their parent cell. These concerns do not warrant deviations from our proposal since parties seeking to rebut challenges do not need to conform their tools or data to the H3 indexing system. The BDC system itself will overlay submitted speed test points with the H3 hexagons; providers need only submit their speed test data and the BDC system will appropriately index them (so long as the data otherwise meet the specifications and test requirements to qualify as valid on-the-ground speed test data). Moreover, H3 is an open-source indexing system, and therefore we do not anticipate it being overly expensive or burdensome for providers to access. Finally, in response to Verizon's argument that the tracking and evaluation of speed test data will be complicated because child cells will not nest precisely into their parent cell, we note that speed tests will be evaluated based on the resolution 8 hexagon within which a test falls.
41. CPUC and Public Knowledge/New America assert that submitting speed test data under the H3 system using resolution 8 hexagons would be more burdensome and expensive, and would result in fewer challenges, because challengers would need to gather statewide measurements in each resolution 8 hexagon. We disagree. First, challengers will not need to submit speed tests in every resolution 8 hexagon in a state because challenge data cannot form the basis of a cognizable challenge in areas where a provider does not claim coverage. Challengers will be aware of the areas in which a provider does not claim coverage from the publicly available mobile broadband map and can avoid the burden and expense of conducting speed tests in those areas. Second, as discussed, we will combine, according to the tested environment, valid speed tests conducted by consumers, state, local, and Tribal governments, and other entities. This likely will reduce the number of speed tests that any one challenger needs to submit to create a challenge. The number of required tests needed to meet the thresholds reflect the
42. We will evaluate all valid challenger speed tests that present evidence about the service of a given technology and environment within each hexagon to determine whether to create a cognizable challenge to the coverage in that area. We did not receive any comments on this proposal. We also adopt the alternative approach proposed in the
43. In the case where the starting and ending locations of a test are in different hexagons (
44. We decline Verizon's request to adopt additional device- and plan-specific requirements. We recognize that some devices have limitations (
45.
46.
47. Consistent with the Commission's direction to consider (among other factors) “whether the tests were conducted in urban or rural areas” when setting the methodology for aggregating speed test results, we will adjust the geographic thresholds to allow challenges that account for differences in areas. Specifically, we adopt a different geographic threshold depending on the road density of each resolution 8 hexagon. We will relax the geographic threshold to require tests in fewer than four point-hexes when fewer than four of the point-hexes of a resolution 8 hexagon are “accessible.” We define an “accessible” point-hex as one in which the provider reports coverage for at least 50% of the area of the point-hex in its reported coverage data and through which at least one road traverses. Using the most recent U.S. Census Bureau roadway data, a point-hex would contain a road if it overlaps any primary, secondary, or local road, which are defined as Master Address File/Topologically Integrated Geocoding and Referencing (MAF/
48. We decline to adopt Vermont DPS's proposal to eliminate the requirement that four of the seven point-hexes within a resolution 8 hexagon meet the geographic threshold. Requiring a challenge to meet the geographic threshold in four of seven point-hexes ensures geographic diversity of tests and will help identify potential coverage gaps over a sufficiently wide area. Vermont DPS does not propose any alternative geographic threshold, and the record supports our conclusion that the geographic threshold is necessary to minimize the chance of anomalous results. We also reject RWA's proposal to reduce the geographic threshold for inaccessible resolution 7 hexagons or allow for a resolution 7 hexagon with low road density to automatically trigger a challenge. We believe the two proposals we adopt—(1) to reduce the geographic threshold for resolution 8 hexagons with low road density, and (2) to allow a “parent” or “grandparent” hexagon (
49. We also adopt a modified version of our proposed temporal threshold. To meet the temporal threshold under the approach we adopt, each resolution 8 hexagon cell must include a set of two negative components of the same type (upload or download) with a time-of-day at least four hours different from two other negative components of the same type as the first set, regardless of the date of the tests. In other words, if the negative tests within the hexagon were ordered chronologically, regardless of the day of the tests, the difference in time between the first two tests and the last two tests must be at least four hours. The temporal threshold is evaluated across all tests within the resolution 8 hexagon and need not be met for each point-hex within the hexagon. That is, the earliest two negative tests and the latest two negative tests can be recorded in different point-hexes and still meet the temporal threshold so long as the difference in time between the two pairs of tests is at least four hours. Accordingly, because the geographic threshold for a fully-accessible resolution 8 hexagon requires at least eight negative tests (
50. We are also unpersuaded by Vermont DPS's argument that we should not adopt the temporal threshold because it would require a challenger to drive test a road twice, and by CPUC's argument that the temporal threshold would significantly increase costs on challengers. We believe that the effort required to achieve the temporal threshold is outweighed by the need to collect a representative sample of a mobile service provider's coverage, particularly since our decision to combine challenge data from consumers, governments, and other entities in a given area will help minimize burdens on challengers and limit the number of drive tests any one challenger will need to conduct. We conclude that our approach is a reasonable solution that will ensure challengers demonstrate persistent inadequate coverage while accounting for the temporal variability of mobile networks, such as variability due to cell loading.
51. Finally, we adopt a modified version of the proposed testing threshold to require that there must be at least five negative test components of the same type (upload or download) within the resolution 8 hexagon when 20 or fewer total challenge test components of that type have been submitted. Consistent with the approach originally proposed, when challengers have submitted more than 20 test components of the same type in a hexagon, we will require that a certain minimum percentage of the total number of test components of the same type in that hexagon be negative, ranging from at least 24% negative when challengers have submitted between 21 and 29 total tests, to at least 16% negative when challengers have submitted 100 or more tests. Once the percentage of negative test components of the same type submitted meets the
52. Verizon, CTIA, and T-Mobile generally support the adoption of a testing threshold. Verizon supports our evaluating challenges based on the percentage of tests in a cell that are below the relevant speed threshold, but expresses concern that the Commission's geographic threshold “would allow cognizable challenges even if substantially all of the negative tests are in a single point-hex.” The modified approach we adopt mitigates the potential problems Verizon raises because the Commission would adjust the testing threshold when a disproportionate number of tests occur in the same point-hex. T-Mobile contends that staff should adjudicate challenges based on a threshold number and percentage of “negative” tests, with a minimum of five tests for each resolution 10 hex cell and at least 50% of those negative. We decline to adopt T-Mobile's alternative proposal because, as discussed above, we believe resolution 10 hexagons are too small for the challenge process. We also find that T-Mobile's proposal to require that 50% of tests be negative, regardless of the number of tests run, would place a high burden on challengers, and could diminish legitimate indications that coverage is unavailable in particular areas. In contrast, the thresholds for the percentage of negative tests we adopt are based on the statistical significance necessary to demonstrate lack of coverage. We also decline to adopt Vermont DPS's proposal to allow a single test, or maximum of two tests to be used to show inadequate coverage at multiple locations within a resolution 8 hexagon. Vermont DPS's argument that the geographic and testing thresholds effectively prevent drive testing assumes that a challenger should be able to run all of the tests necessary to meet each threshold on a single drive through a resolution 8 hexagon, but if challengers find that they are having to drive at a slow pace to run an in-vehicle test in a resolution 9 hexagon, they may periodically stop to run tests in a stationary manner before moving on to the next resolution 8 hexagon. We anticipate that government and other third-party testers can use software that overlays the H3 indexing system and/or providers published maps on a drive test map and may therefore know whether they are keeping within a hex or moving into another one while doing a test. We note, however, that this may not be necessary since we will be combining challenges from consumers, governments, and other entities in a given area which would lessen the number of drive tests any one challenger will need to conduct. For this same reason, we disagree with the CPUC that the testing threshold will be extremely expensive and require complicated coordination of efforts. As discussed, we will aggregate challenges from multiple sources and no one entity will be required to conduct all tests needed to challenge a particular geographic area.
53.
54. We disagree with commenters that argue that our challenge process is not “user-friendly.” RWA argues that the testing process is not “user-friendly” because consumers can test only the networks their handsets are authorized to use. It recommends requiring providers to allow tests by other networks' subscribers. The Commission has already determined that consumer challengers must submit certain identifying information, including that they are a subscriber or authorized user of the provider being challenged, to deter frivolous filings, and the Bureau and Offices were not delegated authority to change this requirement. Similarly, Vermont DPS recommends requiring providers to temporarily provide approved devices with post-paid service at no or reduced cost to governmental entities wishing to engage in a challenge. We decline to adopt Vermont DPS's request because we lack the authority to subsidize government challenges and believe it would be too burdensome to require providers to establish and bear the costs of such programs. Enablers argues (and Public Knowledge/New America agree) that “ `testing parameters that amount to an exceedingly high burden of proof for consumers and other parties' run `contrary to the Broadband DATA Act and [the Commission's] own policy goals.' ” Public Knowledge/New America accordingly encourage the Bureau and Offices to consider
55. In conclusion, while the challenge processes and methodologies we adopt are by necessity detailed and technical, so as to assure that accurate and rigorous measurements are supplied to challenge providers' claimed broadband coverage, the Commission and Bureau and Offices have minimized the burdens placed on challengers by providing a user-friendly means for challengers to run speed tests using their mobile devices and submit all data via either the FCC Speed Test app or another OET-approved third-party app. As discussed, the Bureau and Offices were instructed to implement a number of complex and complicated tasks, among them, developing thresholds for determining when a cognizable challenge has been met, a procedure for resolving challenges, and adopting additional testing requirements if necessary. These obligations were delegated by the Commission within the context of the Broadband DATA Act, which requires the Commission to consider user-friendly challenge submission formats, reducing the time and expense burdens on consumers submitting challenges and providers responding to them, while at the same time considering lessons learned from the challenge process established under Mobility Fund Phase II, and the costs to consumers and providers resulting from a misallocation of funds because of a reliance on outdated and inaccurate maps. Indeed, financial assistance for underserved areas may, in the future, be based on updated Commission maps. Therefore, we find that the processes we adopt strike an appropriate balance, within the authority delegated to us by the Commission, to ensure the challenge process is easy to use and accessible for consumers and government and other entities and also results in high-quality challenges that will accurately correct any errors associated with providers' reported coverage maps.
56.
57.
58. In comments on the
59.
60. We adopt our proposal from the
61. For the geographic threshold, the provider will need to meet the same geographic threshold required of challengers, but with positive test components rather than negative test components. At least four point-hexes of a resolution 8 hexagon must include two download test components taken within them, at least one of which must be positive, and at least four point-hexes of a resolution 8 hexagon must include two upload test components taken within them, at least one of which must be positive to demonstrate that adequate coverage occurs at multiple locations within the resolution 8 hexagon. We adopt a modified version of our proposed temporal threshold. To meet the temporal threshold under the approach we adopt, each resolution 8 hexagon will need to include a set of five positive download components with a time-of-day difference of at least four hours from another set of five positive download components, regardless of the date of the test and a set of five positive upload components with a time-of-day difference of at least four hours from another set of five positive upload components, regardless of the date of the test. We modify the threshold proposed in the
62. In the
63. While we continue to read these provisions as requiring the Bureau and Offices to approve any software tools providers may use to gather on-the-ground test data, we clarify that, to the extent that a provider chooses to use software other than the FCC Speed Test app or another speed test app approved by OET for use in the challenge process, we will consider such software approved for use in rebutting challenges provided that the software incorporates the test methodology and collects the metrics that approved apps must gather for consumer challenges and that government and third-party entity challenger speed test data must contain. We understand that certain technical network information and RF metrics that we would otherwise require are not currently available on Apple iOS devices. Therefore, until such time as such information and metrics are available on iOS devices, and the Bureau and Offices indicate that they will collect such information from iOS devices, providers must collect all of the required technical network information and RF metrics using a device that is able to interface with drive test software and/or runs the Android operating system. We also require providers conducting in-vehicle mobile tests (
64. In order to inform our approval process and consistent with the requirement that applies to government and other entity challengers who choose to use their own software when submitting challenges, we require providers who choose to use their own software to submit a complete description of the methodologies used to collect their data and to substantiate their data through the certification of a qualified engineer or official. Permitting providers to use their own tools is consistent with the approach the Commission adopted for government and other entity challengers in collecting challenge data and it is preferable to requiring prior approval for providers wishing to use their own software tools because it will help streamline the challenge process by reducing the potential for any delays that might be caused by requiring prior review of specific software tools that providers may wish to use. It also will provide greater flexibility and reduce burdens on providers by allowing them to more easily use the software tools they may already be using in the ordinary course of their business.
65. We recognize that this approach is different than the approach we have adopted for third-party speed tests apps where we require OET approval before such apps may be used in the challenge process. We find, however, that the difference in treatment is justified and warranted. Mobile broadband service providers routinely test and monitor network performance as they develop their networks, and their software has been engineered specifically to obtain detailed speed test measurement data. Providers' software is unlikely to be constrained by limitations in the categories of data that can be collected; in contrast, and as discussed above, consumer-facing third-party apps (particularly apps run over iOS) cannot provide certain categories of information. We require approval for third-party speed test apps because we want to ensure that the apps measure coverage as accurately as possible and report information into the BDC system with the required certifications and in a useable format. In addition, requiring approval is necessary to hold the third-party app developers accountable for the accuracy and reliability of their tools and to allow us to inform consumers of the available third-party apps that meet our requirements and are approved for use in the challenge and crowdsource processes. In contrast, the Commission has greater jurisdiction over service providers, as providers are required under the Broadband DATA Act to ensure the accuracy of the coverage information they submit to the Commission. Permitting providers to use these existing performance measurement tools without individualized review and approval will help increase efficiency while continuing to ensure that the Commission receives high-quality data that will allow an apples-to-apples comparison between challenge data submitted by consumers and other entities and data supplied by providers using their own software. While we expect that this approach will benefit our administration of the challenge process, we retain the discretion to require prior approval of providers' software or to make changes to the required metrics via notice and comment at a later time. We also retain discretion to revoke the automatic grant of approval in instances where a provider's software is found to be unreliable or otherwise inconsistent with our objective of ensuring accurate mapping data.
66. We decline T-Mobile's request that we “adopt a 90-day `expiration' date for challenge data” and instead adopt our proposal to make on-the-ground test data valid for one year from the test date. The process we adopt for submission of challenges ensures that providers have sufficient details to respond to challenges, including dates and times of speed tests. Moreover, to
67. Under the rules adopted in the
68. We find that our proposed approach strikes the best balance between providing flexibility for providers and ensuring that they respond to challenges with probative data. We continue to view data that reflect actual on-the-ground tests, as opposed to infrastructure data, generally to more accurately reflect user experience and therefore be of more probative value in most—but not all—circumstances. We disagree with CTIA and Verizon's argument that the Commission's decision to permit providers to respond with infrastructure data precludes us from adopting rules governing the circumstances under which such data can be used, on their own, to respond to challenges. While the Commission directed providers to “submit to the Commission either on-the-ground test data or infrastructure data, so that Commission staff can examine the provider's coverage in the challenged area and resolve the challenge,” it also “directed OEA and WTB to develop the specific requirements and methodologies that providers must use in conducting on-the-ground testing and in providing infrastructure data” and “direct[ed] OEA and WTB to provide guidance about what types of data will likely be more probative in different circumstances.” The Commission also found that “if needed to ensure adequate review, OEA may also require that the provider submit other data in addition to the data initially submitted, including but not limited to, either infrastructure or on-the-ground testing data (to the extent not the option initially chosen by the provider).” Defining the circumstances under which infrastructure data, on their own, may be used to rebut a challenge is consistent with these delegations of authority and offers guidance to providers about when the Commission will find infrastructure data to be as probative as on-the-ground test data, as well as when such data are likely to be sufficient to resolve a challenge.
69. We also disagree with Verizon that requiring a challenged provider to submit infrastructure data in cases where there may be other forms of evidence that can rebut a challenge is “unnecessarily burdensome.” In the
70. While we adopt our proposal to use infrastructure data, on their own, to resolve challenges in a limited set of circumstances, we agree with commenters that providing additional flexibility will help providers submit responses efficiently. Therefore, we add to the list of circumstances where we will accept infrastructure data, on their own, to respond to a challenge. In the circumstances listed below, we find that infrastructure information will likely be as probative as on-the-ground test data and therefore a provider may submit infrastructure data, on their own, in response to challenge that would invalidate speed tests submitted by challengers. We disagree with CCA that the circumstances for submitting infrastructure data are not defined sufficiently and risk increasing burdens on challengers. We expect the circumstances outlined above to occur rarely and providers, not challengers, must demonstrate that one of these circumstances exists when responding to a challenge solely with infrastructure data.
71. First, we find that infrastructure information will likely be of comparable probative value when extenuating circumstances at the time and location of a given test (
72. Second, we find that infrastructure data will likely be of comparable probative value when the mobile device(s) with which the challenger(s) conducted their speed tests are not capable of using or connecting to the radio technology or spectrum band(s) that the provider models as required for service in the challenged area. In such cases, we adopt our proposal for providers to submit band-specific coverage footprints and information about which specific challengers' device(s) lack the band or technology. We will then remove measurements from the listed devices in the relevant coverage footprint and recalculate the statistics.
73. Third, we find that infrastructure data will likely be of comparable probative value when speed tests were taken during an uncommon special event (
74. Fourth, we find that infrastructure data will likely be of comparable probative value when speed tests were taken during a period where cell loading was abnormally higher than the modeled cell loading factor. Speed tests taken during a period when cell loading is higher than usual can result in negative speed tests, and we thus anticipate that infrastructure information will be useful to remove the tests and recalculate the statistics for challenges in this situation. In such cases, we adopt our proposal to require providers to corroborate their claims by submitting cell loading data and we clarify that these data must both (a) establish that the cell loading for the primary cell(s) at the time of the tests was abnormally higher than modeled, and (b) include cell loading data for a one-week period before and/or after the provider was notified of the challenge showing as a baseline that the median cell loading for the primary cell(s) was not greater than the modeled value (
75. Fifth, in response to the record we find that infrastructure data will likely be of comparable probative value when a mobile device used in testing used a data plan that could result in slower service. In such cases, providers must submit information about which specific device(s) used in the testing were using a data plan that would have resulted in slower service and information showing that the provider's network did, in fact, slow the device at the time of the test.
76. Sixth, and also in response to the record, we find that infrastructure will likely be of comparable probative value when a mobile device used in the testing was either roaming or was used by the customer of an MVNO. As adopted above, we will not permit speed tests submitted by customers of an MVNO or whose devices are roaming on another provider's network to be counted as valid tests against the facilities-based provider's network on which the speed test was conducted. As stated above, because the agreements between a facilities-based provider and MVNOs or roaming partners often include limitations on the technology and speed available to or the network prioritization of devices used by consumers of the MVNO or roaming partner, we conclude that speed tests from such devices are not reliable evidence about the performance of the facilities-based provider's network. While we anticipate that the majority of such tests will fail our automated validations, there may be circumstances where the BDC system is unable to automatically identify these tests (
77. After the provider identifies the speed tests it seeks to invalidate pursuant to one of the six circumstances we adopt above and submits all required infrastructure data in support of this contention, we will remove any invalidated speed tests and recalculate the challenged hexagons. Any challenged hexagons that no longer meet the thresholds required for a challenge would be restored to their status before the cognizable challenge was created. We note that where a provider rebuts a challenge using this process, the challenged hexagons that have been restored to their status before the cognizable challenge was created would continue to be eligible for subsequent challenges.
78. Where a challenged provider does not claim that a challenger's speed tests were invalid based upon one of the six circumstances listed above, Commission staff will consider any additional information submitted by the challenged provider or request additional information from the challenged provider. Such information must include on-the-ground speed test data and may also include other types of data, as specified in the
79. In the
80. In the
81. Several providers filed comments requesting additional flexibility in responding to challenges. They argue that, rather than only being permitted to voluntarily submit other types of data, such as data from field tests conducted in the ordinary course of business or third-party data, in addition to either on-the-ground test data or infrastructure data, providers should be able to submit such data on their own as a response to challenges. The Commission has already addressed requests for additional flexibility in responding to challenges, and the Bureau and Offices do not have authority to change the Commission's determinations. In the
82. The Broadband DATA Act requires the Commission to “verify the accuracy and reliability” of the broadband internet access service data providers submit in their biannual BDC filings in accordance with measures established by the Commission. The Commission determined in the
83. To identify the portion(s) of a mobile provider's coverage map for which we will require verification data—referred to as the targeted area(s)—we will rely upon all available evidence, including submitted speed test data, infrastructure data, crowdsourced and other third-party data, as well as staff evaluation and knowledge of submitted coverage data (including maps, link budget parameters, and other credible information). We find this approach allows for needed flexibility while accounting for the relevant data at hand when selecting a targeted area. The adopted approach to the mobile verification process differs from the challenge process and the verification process proposed in the
84.
85. We believe that the aforementioned examples of the information we will consider, as well as the standards and types of analysis we intend to apply, when deciding where to initiate a verification inquiry provide sufficient guidance on this topic, and we therefore find it unnecessary to adopt additional restraints, as advocated by T-Mobile. Because the Broadband DATA Act gives the Commission the responsibility to “verify the accuracy and reliability of [service providers' biannual coverage data],” it is important that staff have enough discretion to consider whether coverage data are accurate based on a range of factors, including geographic size, on-the-ground tests taken, and the reliability of those tests, according to the particular data and circumstances of the data that are presented to us. On the other hand, the case-by-case nature of the data received from providers, the challenge process, and the crowdsourced data is sufficient to limit verification requests to areas where a reason exists to view the area as problematic. We believe the approach described here is the most reasonable and effective way to pursue the goals of this proceeding and the Broadband DATA Act. We do not seek to require superfluous information from providers, but if circumstances indicate that additional data or other information are necessary to verify coverage in an area where evidence suggests the coverage is problematic, we have an obligation to verify the data, and, in many cases, additional information will be necessary to verify the area's coverage and carry out the Commission's obligations under the Broadband DATA Act.
86. Multiple commenters express a strong general desire to reduce or minimize the burden placed on providers as a result of the verification process. For instance, Verizon claims that the methods proposed for determining an area subject to verification would create verification areas that are too large. It recommends initially testing the verification process on a smaller scale, such as in rural areas. It also recommends that the Bureau and Offices limit verification requests to one per map submission (and up to two per year) and limit the areas to be sampled in the verification process to three contiguous resolution 6 hexagons. T-Mobile supports focusing verification requests in rural areas. T-Mobile similarly requests that the Bureau and Offices limit verification requests, recommending that such requests cover an area of no more than 10,000 square miles in a given year.
87. We decline to adopt any specific limitations on the basis for initiating verification inquiries or the areas subject to verification, including instances where a provider is already required to conduct drive testing for other reasons. We likewise decline to adopt a limit on the number of verification inquiries that we initiate for a particular provider within a given timeframe. We also decline to limit the verification process to a smaller scale initially, or to focus verification requests in rural areas. The Broadband DATA Act envisions that the Commission will assess accuracy and reliability of broadband availability data, and we find it inappropriate to limit staff's ability to carry out its tasks to further the goals of both the Act and this proceeding. Although we decline to set a maximum size for the target area, we consider any target area with a size less than 50 resolution 8 hexagons to be de minimis and more appropriate for the mobile challenge process than the mobile verification process.
88. However, we are mindful of the burden that a large area subject to verification can pose for providers. For this reason, we will rely on a sampling method for verification inquiries. The sampling method we adopt, described more fully in the Technical Appendix, is a somewhat modified version of the proposed approach. It relaxes the burden on providers in nearly all cases and is generally more streamlined, but still falls well within the bounds of accepted statistical methodologies.
89. In its comments, Verizon requests that the Bureau and Offices allow providers at least 15 days to review and respond to a verification request before a request is officially made and starts the 60-day clock. We decline to adopt Verizon's request. We view this request as tantamount to requesting an amendment of the 60-day term stipulated in the
90.
91. We find this sampling approach minimizes the cost and burden placed on service providers while ensuring that staff have sufficient data to verify coverage in a reliable way. Without such sampling, providers would need to submit substantially more data to verify their broadband availability, whereas requiring providers to submit speed test results for only a stratified random sample of units within a targeted area will minimize the time and resources associated with responding to the verification requests. This approach is also a more efficient and less burdensome approach than having providers perform annual drive tests, regularly submit infrastructure information, or submit data for their entire network coverage area. The stratification methodology will also ensure that variation in broadband availability will be as small as possible within hexagons in the same stratum. We anticipate this methodology will reduce the sample size and the cost of data collection.
92.
93. The approach we adopt for providers to respond to verification requests using on-the-ground test data is a modified version of what was proposed in the
94. We will evaluate the entire set of speed test results to determine the probability that the targeted area has been successfully verified. The upload and download components of a test will be evaluated jointly in the verification process (rather than separately, as in the challenge process). We will treat any resolution 8 hexagons in the sample where the provider fails to submit the required speed tests in the randomly selected point-hex as containing negative tests in place of the missing tests when performing this calculation. Providers must verify coverage of a sampled area using the H3 geospatial indexing system at resolution 8. The tests will be evaluated to confirm, using a one-sided 95% statistical confidence interval, that the cell coverage is 90% or higher. If the provider can show sufficient coverage in the selected resolution 8 hexagons, the provider will have successfully demonstrated coverage to satisfy the verification request in the targeted area. Sampling allows us to identify where to test and to draw statistically meaningful results about the performance in areas that are not sampled. We believe the specific thresholds and confidence interval that we adopt balance the costs to providers of verifying maps with the Commission's need to acquire a sample sufficient to accurately verify mobile broadband availability.
95. As proposed in the
96. We decline to ask for on-the-ground test data from mobile providers on a continuous or quarterly basis as part of the verification process as proposed by Enablers. As noted above, we are mindful of the burden placed on provider resources and find a continuous or quarterly rolling
97. Commission staff may also leverage spatial interpolation techniques, such as Kriging, to evaluate and verify the accuracy of coverage maps based on on-the-ground data. Spatial interpolation techniques can be an alternative or complementary approach to specifying an exact testing threshold, since spatial interpolation techniques require fewer data to compare with predictions using propagation models.
98. In the
99. In determining how best to utilize infrastructure data to verify a provider's coverage, the Bureau and Offices proposed that Commission staff evaluate whether a provider has demonstrated sufficient coverage for each selected hexagon using standardized propagation modeling. Under that proposed approach, staff engineers would generate their own predicted coverage maps using the infrastructure data submitted by the provider (including link budget parameters, cell-site infrastructure data, and the information provided by service providers about the details of the propagation models they used). Using those staff-generated maps, the proposed approach anticipated that Commission staff would evaluate whether each selected hexagon has predicted coverage with speeds at or above the minimum values reported in the provider's submitted coverage data. The Bureau and Offices sought comment on this proposed approach to verifying coverage using standardized propagation modeling, as well as on other ways more generally that infrastructure data could be used to evaluate the sufficiency of coverage in the proposed verification process. In the
100. We adopt the
101. While each analysis will turn on the relevant facts and circumstances, we offer one possible example of the approach in an effort to provide guidance about how the staff's analysis might work. In this scenario, Commission engineers would first confirm that the backhaul, technology, and other network resources reported for the base station(s) that serve(s) the targeted area are sufficient to meet or exceed the required speed thresholds. Second, staff could use propagation modeling to estimate the provider's core coverage area within the targeted area using more conservative parameters (including a higher cell edge probability) than required of the propagation modeling the provider used to generate its coverage data. Third, staff could analyze downlink and uplink cell loading data submitted by the provider as part of its infrastructure data to confirm that the median cell loading values are less than or equal to the cell loading factor modeled by the provider (
102. In cases where staff's analysis indicates that infrastructure data alone would be insufficient to resolve the verification inquiry, staff may determine to sample a new set of areas and in appropriate cases may also take into account additional infrastructure data and information on the core coverage areas, where staff expect adequate coverage is highly likely. Staff could then request additional information, such as on-the-ground data, to complete the verification process. Staff may also consider infrastructure data independently and review for anomalies.
103. Several commenters argue that Commission staff should not generate
104.
105.
106. Some commenters argue that the Commission should not require infrastructure data fields beyond what was required in the
107. The data fields we adopt here are necessary to help predict more precisely the users' speeds, and the potential burdens of providing these data are outweighed by the necessity of the information. To elaborate, required signal strengths and signal-to-noise (SNR) ratio data are critical factors that enable or impede the speed at which users may connect and are thus required to estimate the users' speeds. Cell loading distribution is the measured cell loadings observed for each cell over time (
108. While we do not prioritize one information source over another, we noted above that where providers' responses to verification inquiries include valid speed test data for each sampled area, staff propagation studies based on infrastructure data should not be necessary. As previously noted, we are sensitive to confidentiality and security concerns in the collection of mobile infrastructure information, and infrastructure information submitted by providers at the request of staff will be treated as presumptively confidential. We are also sensitive to not imposing undue burden on providers and have therefore not mandated the submission of infrastructure data in response to every verification inquiry. We may engage in discussions with a provider when necessary, after which we can request specific areas in which to collect the data. When staff find that infrastructure data are necessary to verify coverage consistent with the Broadband DATA Act, the infrastructure data fields enumerated herein are necessary for staff to carry out that obligation.
109. The Commission directed OEA and WTB to review transmitter monitoring information submitted voluntarily by providers in addition to on-the-ground and infrastructure information. T-Mobile asserts that providers should be allowed to submit data from alternative sources, including transmitter monitoring information, to satisfy verification requests. Verizon states that transmitter monitoring information “provides a comprehensive picture of network performance.” We agree that these data could be helpful, to the extent that they support potential reasons for service disruptions during the time interval in which measurements were performed.
110. We adopt our proposal for governmental entities and third parties to submit verified on-the-ground test data using the same metrics and testing parameters that mobile providers must use when submitting on-the-ground test data in response to a verification request. We also note, as set forth in the
111. We also adopt our proposal that, to the extent the Commission is in receipt of verified on-the-ground data submitted by governmental entities and third parties, such data may be used when the Commission conducts analyses as part of the verification processes and will be treated as crowdsourced data. Governmental entities and third parties may also choose to use these data to submit a challenge, provided they meet the requirements for submission of a challenge under the Commission's rules.
112. Enablers advocates that the Commission create a “strong active testing-based verification layer with sampling of nationwide coverage” and revisit the decision to require propagation maps instead of continuous drive testing. To that end, Enablers notes that its solution allows for cost-effective, continuous active testing by third parties to better produce statistically valid samples and advocates that its approach be adopted. To the extent that government entities and third parties choose to submit verified data, we note that the Commission requires them to submit their data under the same parameters as providers. The Bureau and Offices lack the authority to override decisions by the full Commission. We note, however, that if Enablers or other parties submit crowdsourced data consistent with the specifications outlined below, we will treat those data as such.
113. The Broadband DATA Act requires the Commission to “develop a process through which entities or individuals . . . may submit specific information about the deployment and availability of broadband internet access service . . . on an ongoing basis . . . to verify and supplement information provided by providers.” In the
114. We provide further guidance and adopt rules regarding the crowdsourced data process as described below. We provide additional information about updates we are making to the FCC Speed Test app's technical standards and requirements to configure the app for submission of mobile challenge and crowdsourced data. We also outline the procedures OET will follow for approving third-party speed test apps for these purposes. We establish requirements for consumers and other entities to submit any crowdsourced data to the online portal using the same parameters and metrics providers would use when submitting on-the-ground data in response to a Commission verification request, with some simplifications, as described above. Finally, we provide guidance on our methodology for evaluating mobile crowdsourced data through an automated process—a process that will assist us in establishing when crowdsourced data filings reach a “critical mass” sufficient to merit further inquiry. Once the automated process identifies areas where verification may be warranted, Commission staff will conduct an evaluation based upon available evidence such as speed test data, infrastructure data, crowdsourced and other third-party data, as well as staff's review of submitted coverage data (including maps, link budget parameters, and other credible information) to determine whether a credible basis for conducting a verification inquiry has been established
115. In the
116. We find that the FCC Speed Test app is a reliable and efficient tool for users to submit crowdsourced mobile coverage data to the Commission. The FCC Speed Test app allows users to submit specific information about the availability of mobile broadband service and its performance and meets the requirements outlined in the Commission's
117. As discussed, OET maintains a technical description that describes the metrics and methodologies used in the existing FCC Speed Test app. We note that RWA requests that the FCC Speed Test app display whether users are roaming and, if so, identify the roaming network. The FCC Speed Test app currently has the ability to provide network roaming information via the app's local data export feature for download and upload speed tests and latency tests; however, this capability is not available for Apple iOS devices as certain technical network information and RF metrics are currently not available on those devices. In order to ensure ample public participation in the crowdsourcing process, we clarify that consumers wishing to submit crowdsourced data may use a device running either the iOS or Android operating system to collect speed test data and submit it as crowdsourced information; for the same reasons discussed above, however, we require government, other third-party, and provider entities to collect all of the required technical network information and RF metrics using a device that can interface with drive test software and/or runs the Android operating system. We also clarify, as discussed earlier, that speed tests conducted by a customer of an MVNO will be considered and evaluated as crowdsourced data.
118. Regarding third-party speed test apps used to collect challenge and crowdsourced data on mobile wireless broadband availability, the BDC system will accept challenge and crowdsourced data from third-party applications approved by OET that collect the required data set forth in the relevant data specification for mobile challenge and crowdsourced data (
119. Finally, we recognize that changes in technology and other considerations may require us to periodically revaluate these initial determinations in order to satisfy the Act's provisions for submitting crowdsourced data. The Bureau and Offices will modify the process for collecting mobile crowdsourced data
120. We will use crowdsourced data to “identify individual instances, or patterns of potentially inaccurate or incomplete deployment or availability data that warrant further investigation or review.” In light of this given purpose, we believe it is reasonable to provide those collecting crowdsourced data with increased flexibility to facilitate making the process more user-friendly. Specifically, on-the-ground crowdsourced data must include the same parameters and metrics as required for on-the-ground speed test data submitted through the mobile service challenge process, except that we will allow on-the-ground crowdsourced data to include any combination of download speed and upload speed (rather than both). Crowdsourced data should include valid on-the-ground speed tests and will be categorized and evaluated based on the upload and download speed tests as “positive” or “negative” tests, similar to speed tests in the challenge process. In the
121. Staff will validate submitted crowdsourced speed test data and exclude those that are, for example, anomalous, do not conform to the data specifications, or do not otherwise present reliable evidence and then evaluate the crowdsourced data as described further below to determine whether a critical mass of crowdsourced filings suggest that a provider has submitted inaccurate or incomplete information. This approach helps ensure that the crowdsourced data staff analyzes are valid and reliable while also affording consumers some added flexibility by allowing on-the-ground crowdsourced data to include any combination of download speed and/or upload speed rather than both. Similarly, mobile providers will be notified of a crowdsource filing but will not be required to respond to crowdsource filings unless and until Commission staff request that they do so, based on the procedures outlined below. We believe this process is an efficient and effective way for staff to analyze and review a provider's mobile broadband availability using crowdsourced data.
122. T-Mobile supports making certain speed test metrics optional for crowdsourced data and not to require providers to automatically respond to crowdsourced data filings, stating they are appropriately tailored and will serve to limit burdens on providers without compromising the need for the Commission to ensure that it receives verified and reliable data. We agree that making certain test metrics optional for the crowdsourced data filings and also not requiring providers to respond to crowdsourced data filings (absent a Commission inquiry) serves to limit the burdens on filers and providers without compromising the reliability of the crowdsourced data, with the goal of providing as broad and robust crowdsourced data as possible.
123. In the
124.
125. We note that commenters generally support our proposals regarding when crowdsourced data should trigger an inquiry about the accuracy of a provider's broadband mapping information. Verizon, for example, finds reasonable our proposals regarding which crowdsourced information to consider. Specifically, Verizon states that the Commission's proposal is reasonable to accept as crowdsourced information speed tests taken with an authorized app that do not meet the criteria needed to create a cognizable challenge or are otherwise not intended to be used to challenge the accuracy of a mobile service provider's map. Additionally, Verizon states the Commission should adopt the proposal to permit consumers and other entities to submit crowdsourced data collected using either the FCC Speed Test app or other speed test apps approved by OET. Furthermore, T-Mobile supports our proposal to initiate an inquiry when crowdsourced data suggest that a provider has submitted inaccurate or incomplete coverage data. Ookla agrees, pointing out that “crowdsourcing allows for the rapid, cost-effective collection of actionable, accurate broadband data.”
126. We expect that the minimum data standards and structured vetting process we adopt for evaluating crowdsourced data described below address concerns about any bias in, and the reliability of, the crowdsourced data collected. For example, because the automated process we describe below will filter out anomalies or other unusable speed test information, we believe this filtering process sufficiently addresses Verizon's concerns about including inaccurate speed test information in any crowdsourced dataset due to possible varying test conditions. Further, because the process will also employ a clustering methodology to identify trends or patterns suggesting persistent coverage issues over time, we believe the crowdsourced data will be an efficient and effective means with which to inform, but not decide, a provider's claimed deployment and availability of broadband internet access service and thereby be an important part of the Commission's available data verification options.
127. Other commenters offer different views regarding our proposal to evaluate crowdsourced data. RWA requests more clarity, suggesting that we define what the “critical mass” is to trigger an inquiry in rural and urban areas. Public Knowledge/New America, seeking to
128.
129. More particularly, the automated process will involve an analysis at the end of each month that will include aggregating the crowdsourced data into H3 hexagons at resolution 8, and categorizing each hexagon for purposes of further analysis. Next, we will apply a clustering algorithm to spatially cluster these hexagons. We will track the growth of the clusters of hexagons over time and if the level of negative speed tests is observed for three consecutive months, will make a determination of whether crowdsourced data have reached a “critical mass” warranting verification. The details of this process are described in more detail in the Technical Appendix. We note that the Density Based Spatial Clustering of Applications with Noise (DBSCAN) algorithm we will employ is one of the 10 default tools for clustering GIS data in the industry standard Esri ArcGIS software and is commonly used to perform this type of data clustering analysis. In fact, the DBSCAN algorithm we will employ is one of the most commonly used methods for data clustering analysis.
130. Verizon opposes the use of an automated process to analyze crowdsourced data as well as the use of data clustering to identify potential targeted areas where crowdsourced tests indicate that a provider's coverage map is inaccurate, and asks that, should we adopt these proposals, we provide more detail about their mechanics and seek further comment on the proposed algorithm, data sources, and criteria the processes will use for identifying potential targeted areas for further review and evaluation. We proposed to use an automated process to identify potential areas that would trigger further review using a methodology similar to the mobile verification process, with certain simplifications. More specifically, we proposed to use data clustering to identify potential targeted areas where crowdsourced tests suggest that a provider's coverage map is inaccurate and also sought comment on any alternative methods for determining when a critical mass of crowdsourced filings suggest a provider may have submitted inaccurate or incomplete information. We did not receive any comments suggesting any alternative methods for the critical mass determination. We adopt a modified version of our proposal as described above. Employing the modified automated process we adopt is a reasonable approach to analyze crowdsourced data because of the anticipated volumes of data. Using data clustering to identify potential targeted areas for further Commission staff review and evaluation is also a reasonable way to group crowdsourced data together for a particular area within a coverage map. In this regard, we note that a data clustering approach for the identification of clusters of concern will reduce the amount of staff work and assure that an unbiased analysis has provided evidence that specific areas warrant further review by Commission staff. We believe the modified version of the automated process we adopt, including the use of data clustering, is sufficiently detailed and, taken together with the added safeguard of subsequent staff evaluation, addresses Verizon's request for more information about the automated process itself and the data clustering and other criteria the process will use as described below to identify potential areas for further review and evaluation.
131.
132. The Commission determined in the
133. We therefore adopt our proposal to make crowdsourced data available via the Commission's public-facing website. This will include data collected via designated third-party apps. This publicly available information will depict coverage data and other associated information but will not include any PII or other data required to be confidential under § 0.457. Since designated third-party apps will be collecting data on behalf of the Commission, we expect similar handling of PII or other confidential information by third-party designees. We also adopt a modified version of our proposal and will update the public crowdsourced data at least biannually in order to make available the most up-to-date data. This is consistent with the Commission's requirement to update the Fabric every six months to ensure the most up-to-date information is available for all of the locations identified in the common dataset and will ensure the crowdsourced data provided is also current, reliable and robust.
134.
135.
136.
137.
138.
139. While we recognize the theoretical benefits of a “quick look” of provider-submitted maps before they are made available to the public to challenge, we find that these are outweighed by the significant delay that this would introduce into the challenge process. Requiring the Commission to independently analyze provider submissions or conduct field surveys would significantly delay when this information is made available for the public to challenge. It also would be difficult to operationalize meaningful and practical standards to be applied in a “quick look.” The Commission will be collecting data and rendering multiple maps for scores of mobile and fixed providers, and it would clearly be wholly impracticable for staff to review every map of every provider before making them available to the public and to other federal, state, and local government agencies, Tribal entities, and other third parties. In order to build a process to undertake this type of review, we would need to decide, for example, which maps to review; how much time to spend reviewing them; and what kinds of “significant and overt” errors to look for. Commenters who support this pre-screening of provider data offer virtually no input on these fundamental implementation challenges, and we note that adopting CCA's suggested “quick look” approach in the absence of a more complete record on issues like these would likely require additional notice and comment. Additionally, the Broadband DATA Act created a framework whereby mobile service providers submit propagation maps based on a standardized set of propagation model details; in turn, the Commission is required to publish the data mobile service providers submit, and outside stakeholders are permitted to challenge mobile service providers' broadband coverage assumptions or submit crowdsource information to help us further refine and validate mobile service providers' propagation maps. Creating a “quick look” process could interfere with Congress's intent that we leverage public input to improve the maps over time.
140. That is not to say that we have not already planned to undertake certain data validations a part of the BDC submission process to preempt or remediate any overt errors. The BDC system will perform dozens of data validations and automatic processing steps on uploaded data and will alert the provider when any of the data fail one of these steps. These validations and processing steps will—for the first time—allow for the Commission's systems to automatically detect many of the GIS data and mapping issues that have historically been found in data submitted by providers after a time-consuming and largely manual review by staff for each Form 477 filing round. The new validations and automatic processing will flag a number of factors that would undermine the accuracy of a provider's data, including geometric errors in maps and overt errors in providers' assumptions. Moreover—and also for the first time—the BDC system will require providers to review and correct maps rendered from their data and to confirm that they uploaded the correct data and that any changes made as a result of data validations (
141.
142.
143. As required by the Regulatory Flexibility Act of 1980, as amended (RFA) a Supplemental Initial Regulatory Flexibility Analysis (Supplemental IRFA) was incorporated in the
144. The Broadband DATA Act requires the Commission to collect granular data from providers on the availability and quality of broadband internet access service and to verify the accuracy and reliability of the broadband coverage data submitted by providers. In its
145. In this document, pursuant to their delegated authority, the Bureau and Offices take the next steps toward obtaining better coverage data and implementing the requirements of the Broadband DATA Act. More specifically, the Bureau and Offices take action to carry out their responsibility to develop technical requirements for verifying service providers' coverage data, a challenge process that will enable consumers and other third parties to dispute service providers' coverage data, and a process for consumers and other entities to submit crowdsourced data on mobile broadband availability. These measures will help the Commission, Congress, other federal and state policy makers, Tribal entities, consumers, and other third parties better evaluate the status of broadband deployment throughout the United States.
146. This document discusses the technical requirements to implement the mobile challenge, verification, and crowdsourcing processes required by the Broadband DATA Act, such as parameters and metrics for on-the-ground test data and a methodology for determining the threshold for what constitutes a cognizable challenge requiring a provider response. It also provides guidance on what types of data will likely be more probative in different circumstances. Additionally, this document discusses detailed processes and metrics for providers to follow when responding to a Commission verification request, for government entities and other third parties to follow when submitting verified broadband coverage data, and for challengers to follow when contesting providers' broadband coverage availability. We believe this level of detail is necessary to formulate the processes and procedures to enable better evaluation of the status of broadband deployment throughout the United States and to meet the Commission's obligations under the Broadband DATA Act.
147. There were no comments filed that specifically addressed the proposed rules and policies presented in the Supplemental IRFA.
148. Pursuant to the Small Business Jobs Act of 2010, which amended the RFA, the Commission is required to respond to any comments filed by the Chief Counsel for Advocacy of the Small Business Administration (SBA) and to provide a detailed statement of any change made to the proposed rules as a result of those comments. The Chief Counsel did not file comments in response to the proposed rules in this proceeding.
149. The RFA directs agencies to provide a description of and, where feasible, an estimate of the number of small entities that may be affected by the rules adopted herein. The RFA generally defines the term “small entity” as having the same meaning as the terms “small business,” “small organization,” and “small governmental jurisdiction.” In addition, the term “small business” has the same meaning as the term “small-business concern” under the Small Business Act. A “small-business concern” is one which: (1) Is independently owned and operated; (2) is not dominant in its field of operation; and (3) satisfies any additional criteria established by the SBA.
150. As noted above, Regulatory Flexibility Analyses were incorporated into the
151. We expect that the granular data collection for the challenge and verification processes in this document will impose some new reporting, recordkeeping, or other compliance requirements on some small entities. Specifically, as part of the challenge process, challenged mobile service providers are notified monthly via the online portal of the challenged hexagons at the end of each calendar month. Mobile providers of broadband internet access service must submit a rebuttal (consisting of either on-the-ground test data or infrastructure data) to the challenge or concede the challenge within 60 days of being notified of the challenge. A challenge respondent may submit supplemental data in support of its rebuttal, either voluntarily or, in some cases, in response to a request from OEA. When rebutting a challenge with on-the-ground data, the provider must meet analogous thresholds (geographic, temporal, and testing) to
152. As part of the verification process, mobile providers of broadband internet access service must submit coverage data in the form of on-the-ground test data or infrastructure information on a case-by-case basis in response to a Commission request to verify mobile broadband providers' biannual BDC data submissions in a targeted area. For on-the-ground test data, we adopted an approach for providers to reply to verification requests using on-the-ground test data to verify networks which require mobile providers to submit data using the H3 geospatial indexing system at resolution 8. The tests will be evaluated to confirm, using a one-sided 95% statistical confidence interval, that the cell coverage is 90% or higher. Providers must also meet a temporal threshold in verification inquiry submissions that may be relaxed from that required in the challenge process. Additionally, consistent with our proposal in the
153. This document allows providers to submit infrastructure information in response to a verification request as proposed in the
154. With regard to the reporting or submission of crowdsourced data, the Bureau and Offices were directed by Commission to establish and use an online portal for crowdsourced data filings and to use the same portal for challenge filings. As proposed in the
155. The requirements we adopt in this document continue the Commission's actions to implement the Broadband DATA Act and develop more accurate, more useful, and more granular broadband availability data to advance our statutory obligations and continue our efforts to close the digital divide. We conclude that it is necessary to adopt these rules to produce broadband deployment maps that will allow the Commission to precisely target scarce universal service dollars to where broadband service is lacking. We are cognizant of the need to ensure that the benefits resulting from use of the data outweigh the reporting burdens imposed on small entities. The Commission believes, however, that any additional burdens imposed by our revised reporting approach for providers and state, local, and Tribal government entities are outweighed by the significant benefit to be gained from producing more accurate broadband deployment data and map. We are likewise cognizant that small entities will incur costs and may have to hire attorneys, engineers, consultants or other professionals to comply with this document. Moreover, although the Commission cannot quantify the cost of compliance with the requirements in this document, we believe that the reporting and other requirements we have adopted are necessary to comply with the Broadband DATA Act and ensure the Commission obtains complete and accurate broadband coverage maps.
156. The RFA requires an agency to describe any significant, specifically small business, alternatives that it has considered in reaching its approach, which may include the following four alternatives (among others): “(1) the establishment of differing compliance or reporting requirements or timetables that take into account the resources available to small entities; (2) the clarification, consolidation, or simplification of compliance and reporting requirements under the rule for such small entities; (3) the use of performance rather than design standards; and (4) an exemption from coverage of the rule, or any part thereof, for such small entities.”
157. The requirements adopted in this document balance the need for the Commission to generate more precise and granular mobile broadband availability maps with any associated costs and burdens on mobile broadband providers and other entities participating in the BDC process. The Commission has considered the comments in the record and is mindful that some small entities will have to expend resources and will incur costs to comply with requirements in this document. In reaching the requirements we adopted in this document, there were various approaches and alternatives that the Commission considered but did not adopt, which we discuss below, that will prevent small entities from incurring additional burdens and will minimize the economic impact of compliance.
158. The mobile challenge process requirements adopted by the Commission will facilitate the collection of sufficient measurement information to ensure the mobile challenge process
159. The notification process adopted in this document to inform service providers of cognizable challenges filed against them and inform challengers and service providers of the status and results of challenges will be done on a monthly basis via the online portal. This approach should be more manageable, more administratively efficient, and thereby less costly for small entities and other providers by providing them with a standard set of deadlines rather than having a rolling set of multiple deadlines, while also ensuring that challengers have the opportunity to submit additional evidence in support of their challenge submissions if desired. Providers and challengers will have access to all relevant information through the online portal, including a map of the challenged area(s), notification of whether or not a challenge has been successfully rebutted, whether a challenge was successful, and if a challenged area was restored based on insufficient evidence to sustain a challenge.
160. The mobile service challenge process metrics for mobile providers to follow when responding to a Commission verification request seek to balance the need for the Commission to establish valuable methods for verifying coverage data with the need to reduce the costs and burdens associated with requiring mobile providers to submit on-the-ground test data and infrastructure information. For example, in order to ensure the challenge process is user-friendly for challengers and workable for mobile providers to respond to and rebut challenges, the challenged mobile service providers who choose to submit on-the-ground speed test data are required to meet analogous thresholds as the challengers to demonstrate that the challenged areas have sufficient coverage. Providers are required to submit on-the-ground data to demonstrate that sufficient coverage exists at least 90% of the time and meet the same three threshold tests as challengers. We considered but declined a proposal to define a challenge area based on the test data submitted by the challengers on our belief that our proposal is both user-friendly and supported by sufficient data while also targeting a more precise geographic area where broadband coverage is disputed and limits the burden on providers in responding to challenges.
161. We also declined to adopt several recommendations from commenters which would have expanded the scope of requirements for the challenge process and increased costs for small and other providers. More specifically, we declined to include voice maps in the challenge process, noting that Broadband DATA Act makes no mention of allowing challenges to voice maps, and the Commission decided that the mobile challenge process applies only to broadband (
162. For small entities and other providers who use on-the-ground test data to rebut challenges, we provide greater flexibility in the collection of on-the-ground test data and reduce burdens on providers by allowing them to use the software tools they may already be using. To the extent that a provider chooses to use software other than the FCC Speed Test app or another speed test app approved by OET for use in the challenge process, we will consider such software approved for use in rebutting challenges provided that the software collects the metrics that approved apps must collect for consumer challenges and that governmental and third-party challengers' speed test data must contain. This approach will help minimize costs for small and other providers and increase efficiency, while continuing to ensure that the Commission receives high quality data that will allow an equivalent comparison between challenge data submitted by consumers and other entities, and data created by providers using their own software. We note however, that we retain the discretion to require prior approval of providers' software tools or make changes to the required metrics via notice and comment at a later time. Similarly, we provide small and other providers flexibility to rebut challenges by allowing the use of infrastructure data, on their own, to adjudicate challenges in a limited set of circumstances.
163. In our adoption of parameters for the collection of verification information, we recognize that it may be more costly for small providers to obtain on-the-ground test data. We take steps to address this issue by adopting a targeted and more inclusive approach. Specifically, we identify the portion of a provider's coverage map (targeted area) that may require verification data and will conduct our determination based upon all available evidence. The scope of all available evidence includes speed test data, infrastructure data, crowdsourced and other third-party data, as well as staff evaluation and knowledge of submitted coverage data (including maps, link budget parameters, and other credible information). Thus, rather than a one-size-fits-all requirement, this approach will allow Commission staff to evaluate whether a verification request is warranted and for providers to submit the type of data in response to a verification request that most cost-effectively supports their coverage calculations. To further minimize the costs and burden placed on small and
164. To ensure consistency, reliability, comparability, and verifiability of the data the Commission receives, in this document we require state, local, and Tribal government entities and other third parties, including small entities that fall within these categories, to comply with the challenge process applicable to providers. Consistent with our approach for providers which does not carve out different or lower standards for smaller providers, requiring state, local, and Tribal government entities and third parties to submit on-the-ground test data using analogous thresholds we adopted for mobile providers will ensure that the Commission implements a standardized process resulting in broadband availability maps that are as accurate and precise as possible. We are cognizant however, that on-the-ground test data can be more costly to obtain and can impose burdens for small entities. Therefore, our consideration of appropriate verification data sources took into consideration both the usefulness and costs of on-the-ground test data, and the fact that this type of data may not be necessary in every situation, particularly where infrastructure information is available which based on our analysis will likely be of comparable probative value to on-the-ground test data in certain situations.
165. Finally, in the
166. The Commission will send a copy of the
167. Accordingly,
168.
169.
170.
Administrative practice and procedure, Broadband, Broadband mapping, Communications, Internet, Reporting and recordkeeping requirements, Telecommunications.
For the reasons discussed in the preamble, the Federal Communications Commission proposes to amend 47 CFR part 1 as follows:
47 U.S.C. chs. 2, 5, 9, 13; 28 U.S.C. 2461 note, unless otherwise noted.
(a) * * *
(20)
The additions and revisions read as follows:
(b) * * *
(2) On-the-ground crowdsourced data must include the metrics and meet the testing parameters described in paragraphs (c)(1)(i) and (ii) of this section, except that the data may include any combination of download speed and upload speed rather than both.
(4) If, as a result of crowdsourced data and/or other available data, the Commission determines that a provider's coverage information is likely not accurate, then the provider shall be subject to a verification inquiry consistent with the mobile verification process described in paragraph (c) of this section.
(5) All information submitted as part of the crowdsourcing process shall be made public via the Commission's website, with the exception of personally identifiable information and any data required to be confidential under § 0.457 of this chapter.
(c)
(1) When a mobile service provider chooses to demonstrate mobile broadband coverage availability by submitting on-the-ground data, the mobile service provider must provide valid on-the-ground tests within a Commission-identified statistically valid and unbiased sample of its network.
(i) On-the-ground test data must meet the following testing parameters:
(A) A minimum test length of 5 seconds and a maximum test length of 30 seconds. These test length parameters apply individually to download speed, upload speed, and round-trip latency measurements, and do not include ramp up time. The minimum test duration requirement will be relaxed once a download or upload test measurement has transferred at least 1,000 megabytes of data;
(B) Reporting test measurement results that have been averaged over the duration of the test (
(C) Conducted outdoors between the hours of 6:00 a.m. and 10:00 p.m. local time; and
(ii) On-the-ground test data must include the following metrics for each test:
(A) Testing app name and version;
(B) Timestamp and duration of each test metric;
(C) Geographic coordinates (
(D) Consumer-grade device type(s), brand/model, and operating system used for the test;
(E) Name and identity of the service provider being tested;
(F) Location of test server (
(G) Signal strength, signal quality, unique identifier, and radiofrequency metrics of each serving cell, where available;
(H) Download speed;
(I) Upload speed;
(J) Round-trip latency;
(K) Whether the test was taken in an in-vehicle mobile or outdoor, pedestrian stationary environment;
(L) For an in-vehicle test, the speed the vehicle was traveling when the test was taken, where available;
(M) An indication of whether the test failed to establish a connection with a mobile network at the time and place it was initiated;
(N) The network technology (
(O) All other metrics required per the most recent specification for mobile test data adopted by Office of Economics and Analytics and the Wireless Telecommunications Bureau in accordance with 5 U.S.C. 553.
(2) When a mobile service provider chooses to demonstrate mobile broadband coverage availability by submitting infrastructure data, the mobile service provider must submit such data for all cell sites and antennas that serve or interfere with the targeted area.
(i) Infrastructure data must include the following information for each cell site that the provider uses to provide service for the area subject to the verification inquiry:
(A) The latitude and longitude of the cell site measured with typical GPS Standard Positioning Service accuracy or better;
(B) The cell and site ID number for each cell site;
(C) The ground elevation above mean sea level (AMSL) of the site (in meters);
(D) Frequency band(s) used to provide service for each site being mapped
(E) Radio technologies used on each band for each site;
(F) Capacity (megabits per second (Mbps)) and type of backhaul used at each cell site;
(G) Number of sectors at each cell site;
(H) Effective Isotropic Radiated Power (EIRP, in decibel-milliwatts (dBm)) of the sector at the time the mobile provider creates its map of the coverage data;
(I) Geographic coordinates of each transmitter site measured with typical GPS Standard Positioning Service accuracy or better;
(J) Per site classification (
(K) Elevation above ground level for each base station antenna and other transmit antenna specifications (
(L) Operate transmit power of the radio equipment at each cell site;
(M) Throughput and associated required signal strength and signal-to-noise ratio;
(N) Cell loading distribution;
(O) Areas enabled with carrier aggregation and a list of band combinations; and
(P) Any additional parameters and fields that are listed in the most-recent specifications for wireless infrastructure data released by the Office of Economics and Analytics and the Wireless Telecommunications Bureau in accordance with 5 U.S.C. 553.
(ii) [Reserved]
(e) * * *
(1) * * *
(i) Name, email address, and mobile phone number of the device on which the speed test was conducted;
(ii) Speed test data. Consumers must use a speed test app that has been designated by the Office of Engineering and Technology, in consultation with the Office of Economics and Analytics and the Wireless Telecommunications Bureau, for use in the challenge process. Consumer challenges must include on-the-ground test data that meets the requirements in paragraphs (c)(1)(i) and (ii) of this section, and must also report the timestamp that test measurement data were transmitted to the app developer's servers, as well as the source IP address and port of the device, as measured by the server;
(2) Consumer speed tests will be used to create a cognizable challenge based on the following criteria:
(i) The smallest challengeable hexagonal cell is a hexagon at resolution 8 from the H3 standardized geospatial indexing system.
(ii) The download and upload components of a speed test will be evaluated separately.
(iii) A “positive” component is one that records speeds meeting or exceeding the minimum speeds that the mobile service provider reports as available where the test occurred (
(iv) A point-hex shall be defined as one of the seven hex-9s from the H3 standardized geospatial indexing system nested within a hex-8.
(v) A point-hex shall be defined as accessible where at least 50% of the area of the point-hex overlaps with the provider's reported coverage data and the point-hex overlaps with any primary, secondary, or local road in the U.S. Census Bureau's TIGER/Line Shapefiles.
(vi) A hex-8 from the H3 standardized geospatial indexing system shall be classified as challenged if the following three thresholds are met in the hex-8 for either the download or upload components.
(A)
(B)
(C)
(
(
(
(
(
(
(
(
(
(vii) A larger, “parent” hexagon (at resolutions 7 or 6) shall be considered challenged if at least four of the child hexagons within such a “parent” hexagon are considered challenged.
(viii) Mobile service providers shall be notified of all cognizable challenges to their mobile broadband coverage maps at the end of each month. Challengers shall be notified when a mobile provider responds to the challenge. Mobile service providers and challengers both shall be notified
(4) To dispute a challenge, a mobile service provider must submit on-the-ground test data that meets the requirements in paragraphs (c)(1)(i) and (ii) of this section, (for in-vehicle mobile tests, providers must conduct tests with the antenna located inside the vehicle), or infrastructure data that meets the requirements in paragraph (c)(2)(i) of this section to verify its coverage map(s) in the challenged area. To the extent that a mobile service provider believes it would be helpful to the Commission in resolving a challenge, it may choose to submit other data in addition to the data initially required, including but not limited to either infrastructure or on-the-ground testing (to the extent such data are not the primary option chosen by the provider) or other types of data such as data collected from network transmitter monitoring systems or software, or spectrum band-specific coverage maps. Such other data must be submitted at the same time as the primary on-the-ground testing or infrastructure rebuttal data submitted by the provider. If needed to ensure an adequate review, the Office of Economics and Analytics may also require that the provider submit other data in addition to the data initially submitted, including but not limited to either infrastructure or on-the-ground testing data (to the extent not the option initially chosen by the provider) or data collected from network transmitter monitoring systems or software (to the extent available in the provider's network). If a mobile provider is not able to demonstrate sufficient coverage in a challenged hexagon, the mobile provider must revise its coverage maps to reflect the lack of coverage in such areas.
(i) A “positive” component is one that records speeds meeting or exceeding the minimum speeds that the mobile service provider reports as available where the test occurred (
(ii) A point-hex shall be defined as one of the seven nested hexagons at resolution 9 from the H3 standardized geospatial indexing system of a resolution 8 hexagon.
(iii) A point-hex shall be defined as accessible where at least 50% of the area of the point-hex overlaps with the provider's reported coverage data and the point-hex overlaps with any primary, secondary, or local road in the U.S. Census Bureau's TIGER/Line Shapefiles.
(iv) A mobile service provider that chooses to rebut a challenge to their mobile broadband coverage maps with on-the-ground speed test data must confirm that a challenged area has sufficient coverage using speed tests that were conducted during the 12 months prior to submitting a rebuttal. A provider may confirm coverage in any hex-8 cell within the challenged area. This includes any hex-8 cell that is challenged, and also any non-challenged hex-8 cell that is a child of a challenged hex-7 or hex-6 cell. Confirming non-challenged hex-8 cells can be used to confirm the challenged hex-7 or hex-6 cell. To confirm a hex-8 cell, a provider must submit on-the ground speed test data that meets the following criteria for both upload and download components:
(A)
(B)
(C)
(
(
(
(
(
(
(D)
(
(
(E)
(v) A mobile service provider that chooses to rebut a challenge to their mobile broadband coverage maps with infrastructure data on their own may only do so in order to identify invalid, or non-representative, speed tests within the challenger speed test data. The mobile service provider must submit the same data as required when a mobile provider submits infrastructure information in response to a
(A) Extenuating circumstances at the time and location of a given test (
(B) The mobile device(s) with which the challenger(s) conducted their speed tests are not capable of using or connecting to the radio technology or spectrum band(s) that the provider models for service in the challenged area. In such cases, a provider must submit band-specific coverage footprints and information about which specific device(s) lack the technology or band;
(C) The challenge speed tests were taken during an uncommon special event (
(D)(
(
(
(
(E) The mobile device(s) with which the challenger(s) conducted their speed tests used a data plan that could result in slower service. In such cases, a provider must submit information about which specific device(s) used in the testing were using such a data plan and information showing that the provider's network did, in fact, slow the device at the time of the test; or
(F) The mobile device(s) with which the challenger(s) conducted their speed tests was either roaming or was used by the customer of a mobile virtual network operator. In such circumstances, providers must identify which specific device(s) used in the testing were either roaming at the time or used by the customer of a mobile virtual network operator based upon their records.
(vi) If the Commission determines, based on the infrastructure data submitted by providers, that challenge speed tests are invalid, such challenge speed tests shall be ruled void, and the Commission shall recalculate the challenged hexagons after removing any invalidated challenger speed tests and consider any challenged hexagons that no longer meet the challenge creation threshold to be restored to their status before the challenge was submitted.
(6) After a challenged provider submits all responses and Commission staff determines the result of a challenge and any subsequent rebuttal has been determined:
(i) In such cases where a mobile service provider successfully rebuts a challenge, the area confirmed to have coverage shall be ineligible for challenge until the next biannual broadband availability data filing six months after the later of either the end of the 60-day response period or the resolution of the challenge.
(ii) A challenged area may be restored to an unchallenged state, if, as a result of data submitted by the provider, there is no longer sufficient evidence to sustain the challenge to that area, but the provider's data fall short of confirming the area. A restored hexagon would be subject to challenge at any time in the future as challengers submit new speed test data.
(iii) In cases where a mobile service provider concedes or loses a challenge, the provider must file, within 30 days, geospatial data depicting the challenged area that has been shown to lack sufficient service. Such data will constitute a correction layer to the provider's original propagation model-based coverage map, and Commission staff will use this layer to update the broadband coverage map. In addition, to the extent that a provider does not later improve coverage for the relevant technology in an area where it conceded or lost a challenge, it must include this correction layer in its subsequent filings to indicate the areas shown to lack service.
(7) Commission staff are permitted to consider other relevant data to support a mobile service provider's rebuttal of challenges, including on-the-ground data or infrastructure data (to the extent such data are not the primary rebuttal option submitted by the mobile service provider). The Office of Economics and Analytics will review such data when voluntarily submitted by providers in response to challenges, and if it concludes that any of the data sources are sufficiently reliable, it will specify appropriate standards and specifications for each type of data and will issue a public notice adding the data source to the alternatives available to providers to rebut a consumer challenge.
(f)
(1) * * *
(i) Government and other entity challengers may use their own software and hardware to collect data for the challenge process. When they submit their data the data must meet the requirements in paragraphs (c)(1)(i) and (ii) of this section, except that government and other entity challengers may submit the International Mobile Equipment Identity (IMEI) of the device used to conduct a speed test for use in the challenge process instead of the timestamp that test measurement data were transmitted to the app developer's servers, as well as the source IP address and port of the device, as measured by the server;
(iv) If the test was taken in an in-vehicle mobile environment, whether the test was conducted with the antenna outside of the vehicle.
(2) Challengers must conduct speed tests using a device advertised by the challenged service provider as compatible with its network and must take all speed tests outdoors. Challengers must also use a device that is able to interface with drive test software and/or runs on the Android operating system.
(3) For a challenge to be considered a cognizable challenge, thus requiring a mobile service provider response, the challenge must meet the same thresholds specified in paragraph (e)(2) of this section.
(5) To dispute a challenge, a mobile service provider must submit on-the-ground test data or infrastructure data to verify its coverage map(s) in the challenged area based on the
(d) * * *
(2) To the extent government entities or third parties choose to file verified data, they must follow the same filing process as providers submitting their broadband internet access service data in the data portal. Government entities and third parties that file on-the-ground test data must submit such data using the same metrics and testing parameters the Commission requires of mobile service providers when responding to a Commission request to verify mobile providers' broadband network coverage with on-the-ground data (
On October 20, 2020, a former Assistant Administrator, Diversion Control Division, of the Drug Enforcement Administration (hereinafter, DEA or Government), issued an Order to Show Cause (hereinafter, OSC) to OakmontScript Limited Partnership (hereinafter, Respondent). Administrative Law Judge Exhibit (hereinafter, ALJ Ex.) 1, (OSC) at 1. The OSC proposed the revocation of Respondent's DEA Certificates of Registration Nos. RO0504680 and RO0527082 (hereinafter, CORs or registrations) and the denial of any pending application to modify or renew the registrations and any applications for any other DEA registrations pursuant to 21 U.S.C. 823, 824, 958, and other federal laws, because Respondent's “registration[s are] inconsistent with the public interest,” as that term is defined in 21 U.S.C. 823(b), (d), and (e); 824(a); and 958(c).
In response to the OSC, Respondent timely requested a hearing before an Administrative Law Judge. ALJ Ex. 2. The hearing in this matter was conducted from March 8-12, 2021, at the DEA Hearing Facility in Arlington, Virginia, with the parties and their witnesses participating through video-teleconference.*
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Having reviewed the entire record, I agree with the ALJ's Recommended Decision and I adopt it with minor modifications, as noted herein.*
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After carefully considering the testimony elicited at the hearing, the admitted exhibits, the arguments of counsel, and the record as a whole, I have set forth my recommended findings of fact and conclusions of law below.
The Government alleges that the Respondent's CORs should be revoked because OakmontScript exported controlled substances prior to obtaining its exporter COR, exported controlled substances it was not approved to export, demonstrated a lack of candor about controlled substances it was exporting, falsified a copy of its distributor DEA registration, distributed controlled substances to an individual not registered with the DEA, exported controlled substances to fulfill prescriptions for underage patients, and failed to keep complete and accurate records.
The Government and the Respondent have agreed to the below stipulations, which I recommend be accepted as fact in these proceedings:
(1) OakmontScript Limited Partnership (“OakmontScript”) [was] registered with the DEA as a distributor licensed to handle controlled substances within Schedules II-V under DEA COR No. RO0504680 (“Distributor COR”) at 1500 District Ave., Burlington, MA 01803-5069. DEA COR No. RO0504680 was first issued on October 7, 2016. [Respondent surrendered both registrations on December 22, 2021, therefore terminating these registrations.
Although Respondent's registrations have terminated, the Agency has discretion to adjudicate this Order to Show Cause to Finality.
As in
It is noted that I recognize the importance of the parties' ability to request dismissal of a case, even after it has been forwarded to me for final adjudication. However, because surrenders are unilaterally submitted by the Respondent, without explicit instructions from both parties, I cannot assume the intent of a surrender is to dismiss the case. In this case, I assume that the Government has determined that a final decision on the merits will further DEA's adjudicatory efforts and law enforcement goals, because its letter to me regarding the surrender significantly omits any indication otherwise.
(2) OakmontScript is registered with the DEA as an exporter licensed to handle controlled substances within Schedules II-V under DEA COR No. RO0527082 (“Exporter COR”) at 1500 District Ave., Burlington, MA 01803-
(3) OakmontScript has a Controlled Substance Registration, #MA0092875, as a Drug Distributor for Schedules II-V with the Commonwealth of Massachusetts, Department of Public Health, Drug Control Program.
(4) Dr. Jufang “Shirley” Shi is OakmontScript's general partner, owner, and Resident Agent. She also serves as its Managing Director, President, and Chief Pharmacy Officer.
(5) Dr. Shi is New England Executive Care Limited Partnership's (“NEEC”) Resident Agent.
(6) Dr. L.W. is NEEC's General Partner. Dr. L.W. also has served as a consultant with OakmontScript. He has acted as OakmontScript's supervisory physician. He was employed by OakmontScript on an as-needed basis.
(7) On or about September 16, 2016, DEA conducted a pre-registration investigation of OakmontScript's then application for a distributor registration.
(8) On or about June 22, 2017, DEA conducted a pre-registration investigation of OakmontScript's then application for an exporter registration.
(9) On or about July 26, 2018, DEA conducted an on-site inspection for OakmontScript's Distributor COR at OakmontScript's registered location pursuant to a Notice of Inspection.
(10) In or around January, 2017, OakmontScript falsified a print out of its DEA Distributor COR in order to set up a customer account with another company, Pharmacy Buying Association (“PBA”). Specifically, OakmontScript's DEA registration was altered so that the word “Distributor” was replaced with the word “Pharmacy” under the Business Activity section of the registration.
(11) OakmontScript employed an intern from January 1, 2017, to February 2018.
(12) Diazepam (brand name “Valium”) is a Schedule IV controlled substance benzodiazepine class drug, commonly used to treat anxiety, muscle spasms, and seizures.
(13) Briviact is the brand name for brivaracetam, a Schedule V controlled substance commonly used to treat seizures.
(14) Belviq is the brand name for lorcaserin, a Schedule IV controlled substance commonly used to control appetite.
(15) Lyrica is the brand name for pregabalin, a Schedule V controlled substance commonly used to treat nerve and muscle pain and seizures.
(16) Clobazam (brand names include “Sympazan” and “Onfi”) is a Schedule IV controlled substance benzodiazepine class drug that is commonly used to control seizures.
(17) Lunesta is the brand name of eszopiclone, a Schedule IV controlled substance that is commonly used as a sedative.
The Government's case consisted of testimony from three witnesses: (1) Diversion Investigator (“DI”) 1, (2) DI 2, and (3) DI 3. Below is a summary of the testimony of these witnesses.
DI 1 has been employed with the DEA for eighteen years. Tr. 35. For ten years, until 2010, she worked as a Registration Program Specialist in the New York Field Division where she reviewed applications and conducted background checks regarding registrants who applied for DEA registrations. Tr. 36-37. She currently serves as a DI in Boston where she does on-site inspections and educates applicants on the guidelines required by the Controlled Substances Act (“CSA”). Tr. 35, 37. She received a three-month training in Quantico and has worked on over eighty cases as a DI. Tr. 35, 37-38. She is familiar with DEA regulations and the CSA. Tr. 38.
In August 2016, DI 1 was assigned as the lead investigator to the Respondent's first DEA application as a distributor, which was ultimately assigned COR No. RO504680. Tr. 38-39, 43. On September 16, 2016, DI 1 coordinated with the Massachusetts Department of Health, through a Senior Investigator, to conduct an on-site inspection of OakmontScript. Tr. 44-45. During the inspection, DI 1 met with OakmontScript's Dr. Shi and L.W. Tr. 44-45. Dr. Shi informed DI 1 of her intention to potentially distribute controlled substances to international customers. Tr. 45-46. DI 1 explained to Dr. Shi that she would need to apply for a second DEA registration as an exporter, and to fill out a Form DEA-161, Application for Permit to Export Controlled Substances (“DEA Form 161”), and a Form DEA-236, Declaration of Exportation (“DEA Form 236”), which both apply to Schedule II-V controlled substances. Tr. 46-47.
DI 1 had conversations with Dr. Shi explaining the term “end-use statement,” which is a statement that is provided by a pharmaceutical company or researcher stating the use of the drug. Tr. 47-49. DI 1 explained that an “ultimate user” is an individual that would use controlled substances for his or her own personal medical use and that some people use the term “end user” and “ultimate user” interchangeably. Tr. 49-50. DI 1 further explained that “ultimate user” and “end user” are different from the “end-use statement,” which is something that is “more for a business . . . a company for research purposes” and is documented in writing. Tr. 50.
DI 1 also discussed record-keeping requirements with Dr. Shi, including the requirement to create an initial inventory of controlled substances she has on site after her application is approved. Tr. 50. She explained that Dr. Shi needed to create a biennial inventory every two years, not to commingle records from her distributor registration and any future exporter registration, and to maintain records for two years. Tr. 50-51. As of April 28, 2017, DI 1's understanding was that OakmontScript had not exported any controlled substances, which was based on an email from OakmontScript stating “we do not have any executed controlled items to report during last two quarters.” Tr. 61; Gov't Ex. 4.
OakmontScript first applied for an exporter registration with the DEA in April of 2017. Tr. 60. At some point, OakmontScript submitted a second exporter application.
On June 22, 2017, Mr. L.U. sent DI 1 an email requesting that Schedule II be added to the existing exporter application and DI 1 added this request for Schedule II to the exporter application on OakmontScript's behalf. Tr. 74-76; Gov't Ex. 50. DI 1 and the Senior Investigator from the Department of Health conducted a pre-registration inspection of OakmontScript for its exporter application on June 22, 2017. Tr. 69-71. They discussed with Dr. Shi security and record-keeping requirements including creating an initial inventory and maintaining records for at least two years. Tr. 71-72. DI 1 also discussed the importance of maintaining the DEA Form 161s and DEA Form 236s as well as the enduse statements. Tr. 72-73. DI 1 also instructed Dr. Shi that records must be kept separate for separate registrations. Tr. 73. It was DI 1's understanding that OakmontScript had not exported or distributed any controlled substances. Tr. 70-71. At this inspection, DI 1 also noted that OakmontScript's safe was not connected to an alarm system, which was a security concern because OakmontScript was storing Schedule II drugs, which have a higher security standard. Tr. 77, 78.
On September 1, 2017, DI 1 went back to OakmontScript for a return visit to test the safe's alarm after being notified by OakmontScript that the alarm would be professionally installed on August 30th. Tr. 80-81, 83. On this visit, DI 1 found no issues with the alarm. Tr. 83. However, at this time, DI 1 noted that OakmontScript should obtain a larger-sized safe pending the approval of its exporter application, which she communicated to OakmontScript on September 6, 2017. Tr. 84-85. DI 1 had a third visit on September 22, 2017, when she observed that OakmontScript purchased a larger safe and DI 1 tested the security system. Tr. 85-86.
Sometime in October 2017, DI 1's supervisor informed her that OakmontScript added over 170 drug codes to its exporter application, which DI 1 thought to be an excessive amount of drug codes because OakmontScript had previously stated that it was only intending to export small amounts of Oxycodone. Tr. 86-87, 96-97, 100. DI 1 testified that a drug code “is a code that's assigned . . . to a controlled substance for identification purposes for individuals or pharmaceutical companies who are engaging in manufacturing, exporting, importing or distributing controlled substances.” Tr. 86. DI 1 brought this issue to Dr. Shi's attention on November 17, 2017, and Dr. Shi stated that she had to select the drug code for each controlled substance on the web page in order to move to the next screen in the application process. Tr. 87-88. DI 1 worked with Dr. Shi, walked her through modifying the application, and eventually Dr. Shi applied for five drug codes. Tr. 88-89.
On December 5, 2017, DEA COR No. RO0527082, an exporter registration, was assigned to OakmontScript. Tr. 90-91; Gov't Ex. 1B. DI 1 had no indication that OakmontScript had exported any controlled substances prior to this approval date. Tr. 91-92.
DI 1's testimony included a discussion of the investigation of OakmontScript's first DEA application as a distributor, COR No. RO0504680, OakmontScript's two applications for exporter registrations, OakmontScript's request to add Schedule II to its exporter application, and OakmontScript's withdrawn importer application.
Throughout her testimony, DI 1 was generally consistent, genuine, and credible.
DI 2 received a bachelor's degree in political science from the College of Charleston and worked as a paralegal for several years prior to joining the DEA. Tr. 124. She received a twelve-week training in Quantico when she became an investigator. Tr. 125.
She has been employed as a DI for the DEA for approximately three years and works in the Boston Field Office. Tr. 124. As a DI, she ensures that DEA registrants are abiding by the DEA rules and regulations and the CSA to ensure there is no diversion of controlled substances from the point of manufacture to the end user. Tr. 125, 126. She has worked as a lead investigator on approximately twenty to thirty investigations. Tr. 125-26.
DI 2 first became familiar with OakmontScript on July 26, 2018, when she met Dr. Shi to conduct an inspection regarding OakmontScript's distributor registration.
DI 2's testimony was limited to a one-time inspection of OakmontScript's distributor registration. As a public servant, DI 2 has no personal stake in the revocation of the Respondent's registrations. There was no indication during her testimony that she had any animus against OakmontScript or any of its employees. I therefore find her testimony to be entirely credible and it will be afforded considerable weight.
DI 3 received her bachelor's degree in business administration in 2015. Tr. 143. Prior to working with the DEA, she was working with the Department of the Army in California, where she mainly conducted background investigations. Tr. 143. She was then promoted to a headquarters position in Detroit, Michigan, where she worked until 2017,
DI 3 currently works as a DI for the DEA in the New England Field Division, in Boston, Massachusetts. Tr. 141-42. She has been a DI for three years. Tr. 142. As a DI, she investigates the diversion of controlled substances from licit channels to illicit channels by conducting investigations including completing accountability audits, reviewing records, testing security, and conducting on-site inspections. Tr. 143-44. She has led approximately seventy investigations and assisted on thirty. Tr. 145. She is familiar with the CSA and her job is to ensure public safety. Tr. 145, 766.
DI 3 became familiar with OakmontScript in fiscal year 2019 when she was assigned to conduct an in-depth cyclical investigation of OakmontScript's exporter registration. Tr. 145-46. DI 3 reviewed OakmontScript's articles of limited partnership, with a date of organization of May 27, 2016, which indicate that Dr. Shi is the general partner and resident agent of OakmontScript. Tr. 146-49. Dr. Shi had explained to DI 3 that OakmontScript's business model was to procure controlled substances to export to foreign pharmaceutical companies for reverse engineering, so the companies can break down the controlled substance to recreate it. Tr. 150, 151, 760.
New England Executive Care (“NEEC”) is an entity with a date of organization of May 10, 2018, with Dr. Shi listed as its resident agent and Dr. L.W. and Dr. Donghui Yu listed as the general partners and it has some type of relationship with OakmontScript. Tr. 152-54. DI 3 is still unclear what NEEC's business model is and its full connection to OakmontScript. Tr. 155. Dr. L.W. is a consulting physician for OakmontScript and reviews patients' medical records and possibly prescriptions to determine if the drug being exported is appropriate for the patients' treatment. Tr. 155, 620-21.
DI 3, DI 1, and DI 4, conducted an inspection of OakmontScript on February 19, 2019, and began their investigation by showing Dr. Shi their credentials and presenting a Notice of Inspection, which Dr. Shi signed. Tr. 156-58; Gov't Ex. 7. They discussed recordkeeping and the DIs explained that they would be conducting a controlled substance accountability audit.
The initial inventory date was February 19, 2018, and based on OakmontScript's self-reporting that it did not have any substances on hand, the initial count was a zero balance. Tr. 167, 763. According to the closing inventory dated February 19, 2019, which was signed by DI 3, DI 4, and a representative from OakmontScript, OakmontScript did not have any of the eight controlled substances the DIs chose to audit on that date. Tr. 159-60; Gov't Exs. 8, 9.
DI 3 also discussed drug codes
On March 29, 2019, DI 3 completed another inspection with DI 5 and the audit did not show any discrepancies. Tr. 195-97. Dr. Shi provided a pack of additional documents to DI 3 and stated that she was having problems filing the DEA Form 236 for OakmontScript's exports. Tr. 198-201; Gov't Ex. 12. After reviewing these documents, DI 3 determined that OakmontScript was having issues with the DEA Form 236 because OakmontScript did not have the authority to export the controlled substances as it did not have the appropriate drug codes in its registration for most of the drugs. Tr. 201. Therefore, OakmontScript was unable to select the drug codes from the online drop-down box in the DEA Form 236. Tr. 201-02, 613. Despite being unable to fill out the DEA Form 236, Dr. Shi “exported them anyways” and she did not think “it was a big deal.” Tr. 204. Ultimately, DI 3 found that OakmontScript had violated the CSA by not filling out the DEA Form 236s, by exporting drugs prior to holding its exporter registration,
On April 23, 2019, DI 3 had a phone call with Dr. Shi and requested a detailed list of exports OakmontScript had conducted because it was apparent that OakmontScript had exported a lot more than what Dr. Shi had previously stated. Tr. 206. DI 3 also discussed a fraudulent DEA registration. Tr. 206. During this discussion, Dr. Shi stated that OakmontScript had conducted its first export in May or June of 2017. Tr. 206.
After the April 23, 2019 phone call, DI 3 and Dr. Shi had an email exchange in which Dr. Shi continued to provide conflicting information, so DI 3 asked
DI 3 served two administrative subpoenas on OakmontScript with DI 5 on May 8, 2019, that were issued based on the serious violations that DI 3 discovered since conducting her initial inspection on February 19, 2019.
OakmontScript kept track of each controlled substance it exported or distributed by assigning a purchase order number, usually starting with “OKS-” and followed by a series of numbers. Tr. 242. At the inspection, Dr. Shi provided DI 3 a large packet that was divided into smaller bundles by invoice, that DI 3 later may have reordered chronologically, but she did not remove or add any pages to the stack. Tr. 243-48, 709, 794-95;
On May 13, 2019, DI 3 and DI 5 performed another inspection. Tr. 268. DI 3 discussed various topics with Dr. Shi, including a detailed discussion of all the violations DI 3 uncovered. Tr. 268-69. Prior to this visit, DI 3 had also reached out to DEA Headquarters to verify whether OakmontScript had properly completed DEA Form 236s for its exports. Tr. 269-70; Gov't Ex. 48.
A registrant receives a hard-copy certificate of registration, which is an official government document, based on DEA approval to hold a registration, which includes the company's or individual's name, the registered location address, the registrant's DEA registration number, the business activity for which the entity is approved, and—for exporters, importers, and bulk manufacturers—the drug codes that they are approved to handle. Tr. 272-73.
DI 3 had been reviewing OakmontScript's case files and discovered that there was a report filed by the Kansas City District Office of the DEA, naming OakmontScript as fraudulently creating a DEA registration. Tr. 275. OakmontScript had altered its distributor registration to indicate that it was a pharmacy and submitted it to Pharmacy Buying Association (“PBA”).
The DEA registration OakmontScript provided to PBA listed its business activity as “pharmacy,” even though the COR of RO0504680 corresponded to OakmontScript's distributor registration. Tr. 286; Gov't Exs. 14, 55. Dr. Shi took responsibility for the falsified registration. Tr. 290-93.
On April 23, 2019, DI 3 discussed the falsified registration with Dr. Shi on the phone. Tr. 293. Dr. Shi stated that she had hired an intern and Dr. Shi instructed the intern to establish relationships with OakmontScript's competitors to determine how they conduct business. Tr. 293-94. After PBA refused to establish a relationship with OakmontScript, the intern altered the DEA registration to list OakmontScript as a pharmacy. Tr. 294; Gov't Ex. 14. During this phone call, Dr. Shi indicated to DI 3 that she had fired the intern as a result of this incident. Tr. 294. However, in an email dated April 24, 2019, Dr. Shi indicated that the intern moved back to China and her employment dates were January 1, 2017, to February 2018. Tr. 297; Gov't Ex. 20 at 13. The phone conversation and email were therefore in “direct conflict” and it appeared that the intern had not been fired for falsifying the registration. Tr. 297-98. Dr. Shi also texted information regarding this incident in May 2019 where she said if the incident regarding the falsified registration “constitutes any offensive sort, `I' should take responsibility. If any actions taken toward, please address to me directly.” Tr. 300-01; Gov't Ex. 29.
DI 3 had a follow-up inspection on May 13, 2019, and asked Dr. Shi why the intern's employment dates seemed to span an additional year after the date of the fraudulent DEA registration. Tr. 301-02. Dr. Shi stated that she had ties with the intern's family, who she felt had pressured her to keep the intern employed. Tr. 302. Dr. Shi also explained that the intern had come to her and explained that PBA would not “do business with them because they viewed OakmontScript as a competitor” and Dr. Shi had told the intern to “do whatever is needed” and to “[g]ive them basically whatever they want in order to establish this . . . client relationship with them.” Tr. 303. DI 3 was never able to contact the intern to discuss this violation with her. Tr. 304. OakmontScript was not able to obtain controlled substances from PBA. Tr. 304.
In this instance, DI 3 found that Dr. Shi had exhibited a lack of candor
DI 3 served another administrative subpoena on OakmontScript on February 28, 2020, and issued an administrative subpoena to NEEC after learning that Dr. L.W. was writing prescriptions for direct patient care at Dr. Shi's request.
In response to the subpoenas, David Schumacher sent a letter dated March 26, 2020, indicating he was an attorney representing OakmontScript and NEEC and that neither OakmontScript nor NEEC had any records that were responsive to the subpoena, but he did re-produce certain documentation to DI 3 and addressed certain questions DI 3 posed in a March 10, 2020 email. Tr. 397-98; Gov't Ex. 42. DI 3 followed up with questions to Mr. Schumacher in an April 14, 2020 email, and he subsequently sent an email to DI 3 on April 17, 2020, which responded to some of these questions. Tr. 402-03; Gov't Ex. 44. DI 3 sent her April 14, 2020, email to seek clarification regarding two identical prescriptions she identified for clobazam and what role they played in the export of this controlled substance. Tr. 405; Gov't Ex. 44.
OakmontScript received diazepam, 10 milligram gel on May 16, 2017, from McKesson that appears to have been shipped by OakmontScript on June 10, 2017. Tr. 352-53, 366, 432; Gov't Exs. 12 at 14, 26 at 20.
One of the license transfer documents for this export indicates that the diazepam was transferred from OakmontScript's distributor registration to its exporter registration on May 7, 2018. Tr. 371-72, 435; Gov't Exs. 26 at 21, 28 at 77. A different license transfer document indicates that the date of transfer was May 20, 2017. Tr. 371, 436; Gov't Ex. 26 at 22.
DI 3 confronted Dr. Shi regarding this conflicting information at the on-site inspection on May 8, 2019. Tr. 363. Dr. Shi recalled that this diazepam had been shipped for direct patient use in China. Tr. 363-64. Dr. Shi stated that OakmontScript had to label the reason for export as “research” in order to get the shipment past Chinese Custom Officials and that the actual intended use of the diazepam was for direct patient use. Tr. 366, 1446.
DI 3 was also confused by documents provided by Dr. Shi because although they appeared to be the exact same documents—a prescription written in Chinese, a hospital's government licenses, and a doctor's medical license—these documents were provided in stacks for two different invoices. Tr. 380-83; Gov't Ex. 26 at 12-14, 30-32. Based on a translation that DI 3 ultimately obtained for these documents, DI 3 learned that both prescriptions were for diazepam. Tr. 383.
OakmontScript also failed to include a DEA Form 236 for this invoice, which it was required to do. Tr. 416-19. Furthermore, OakmontScript's distributor registration and exporter registration do not allow for OakmontScript to fill prescriptions, as such prescriptions may only be filled by a pharmacist. Tr. 420-23, 429; 21 U.S.C. 1306.06. OakmontScript also did not provide the information required under Section 3a or Section 3b of the DEA Form 236.
Furthermore, invoice OKS-00243 did not provide the DEA registration of the doctor prescribing the controlled substance and the patient's home address. Tr. 430-31.
OakmontScript received 10 milligrams and 100 milligrams of
OakmontScript did not file a DEA Form 236 for this invoice because it was unable to do so. Tr. 443, 456-57; Gov't Exs. 20 at 8, 48. Dr. Shi claimed that OakmontScript did not need to make a declaration to Customs and Border Control as the value of the shipment was less than $2500. Tr. 443; Gov't Ex. 20 at 8.
OakmontScript received 10 milligrams of Belviq on September 18, 2017, which was shipped on November 1, 2017, and OakmontScript was not able to file a DEA Form 236 for this prescription. Tr. 457-70; Gov't Exs. 12 at 3, 20 at 8,
This invoice included several strengths of Lyrica: 25 milligram, 50 milligram, 75 milligram, 100 milligram, 150 milligram, 200 milligram, 225 milligram, and 300 milligram tablets. Tr. 470.
OakmontScript purchased Lyrica on September 12, 2017, from American Pharma Wholesale and it was shipped sometime between November 17 through 21 of 2017 to Changzhou Pharmaceuticals in China and OakmontScript did not file a DEA Form 236 because it was unable to do so.
OakmontScript received Belviq on July 20, 2017, and shipped the same quantity of Belviq XR 20 milligrams on December 1, 2017. Tr. 483-95; Gov't Exs. 12 at 3; 26 at 45, 47, 27 at 2, 28 at 5, 19 (the shipping date is listed as December 1, 2017), 76 (the date OakmontScript transferred the Belviq from its distributor to exporter registration is listed as November 29, 2017). However, in other documentation provided by OakmontScript, Belviq is not listed as an export. Gov't Exs. 17 at 2-3, 18 at 3-4. In other documentation provided by OakmontScript, the shipping label for this invoice was created on October 13, 2017, and the customer was listed as Jiangsu Alicorn Pharmaceutical Co. Ltd in China. Gov't Ex. 20 at 9. There are also various dates included in the “Import Drugs Approval Notice” including February 16, 2017 and February 15, 2018. Gov't Ex. 26 at 46; Tr. 489. The packing list that OakmontScript provided is dated May 8, 2019. Gov't Ex. 28 at 19. OakmontScript did not file a DEA Form 236 for this export. Tr. 494. Regardless of whether the shipment was exported on December 1, 2017 or October 13, 2017, this shipment would have been exported prior to OakmontScript obtaining its exporter registration. Tr. 495, 1433.
OakmontScript received Lunesta in May 2018 and shipped the Lunesta to Disha Pharmaceutical Group on May 21, 2018. Tr. 499-535; Gov't Exs. 12 at 17, 17 at 3, 18 at 3, 28 at 94. The Lunesta was shipped to Mr. Z.Y. at an address in the United States in Kearny, New Jersey. Tr. 1455; Gov't Ex. 22 at 10-11. Another document for this export that is dated May 3, 2017, states that this shipment was shipped to P.Z. in New Jersey. Tr. 515, 522-23; Gov't Ex. 26 at 87.
Upon further investigation, DI 3 realized that this was a domestic distribution or distributing to a registrant in the United States, as opposed to an export. Tr. 508, 510, 529, 533, 904-05; Gov't Exs. 22 at 10-11, 26 at 88, 89, 92, 27 at 3, 28 at 66, 67, 68. OakmontScript did not fill out a DEA Form 236 for this export. Tr. 500-01.
A distributor is not permitted to distribute controlled substances to an ultimate user and there is no coincidental activity that permits a distributor to provide controlled substances to non-DEA individuals or persons or companies. Tr. 511-12, 723. Distribution occurs between registrants while dispensing would take place through a prescription being filled by a pharmacy after a practitioner prescribes a controlled substance. Tr. 513.
DI 3 discussed this invoice with Dr. Shi. Tr. 513-14. Dr. Shi stated that she was provided a business card showing that Mr. Z.Y. was an employee of Disha Pharmaceutical Group, a pharmaceutical company in China, and that he was getting ready to move to China and asked that the Lunesta be shipped to his home address in New Jersey, and paid via personal payment. Tr. 514, 516, 531, 534-35. This invoice indicates that the “bill to” party was Disha Pharmaceutical Group. Tr. 530-31; Gov't Ex. 28 at 44. Dr. Shi had explained that Larry Yu, a colleague she had met at a conference, had requested the Lunesta for RefDrug and asked Dr. Shi to send the Lunesta to Mr. Z.Y. to
Dr. Shi confirmed for DI 3 that OakmontScript had purchased this Lunesta with its distributor registration and then distributed it to Mr. Z.Y. at his home address in New Jersey, which DI 3 testified was improper. Tr. 517-18. Dr. Shi did not believe that this incident was a violation and stated that because Disha Pharmaceutical Group was the end-user of this controlled substance that it did not have to be licensed or registered with the DEA to obtain this controlled substance. Tr. 518. In contrast, DI 3 believed that Disha was not the end-user or ultimate user
DI 3 conducted searches to see whether certain parties in this transaction had a DEA registration. Tr. 545. She conducted a search for Mr. Z.Y., RefDrug, Inc., L.Y., P.Z., Disha Pharmaceutical Group, and the address in Kearny, New Jersey, and found no results for any active or inactive DEA registrations for any of these searches. Tr. 545-54. DI 3 also conducted a Google search of the Kearny, New Jersey, address and was not provided any information from OakmontScript that this was a freight forwarding facility. Tr. 555-56, 558.
A variety of Lyrica strengths were shipped on November 21, 2018, to J.F. at YaoPharma. Tr. 558-72; Gov't Ex. 31 at 1-4, 27 at 3, 31 at 1, 3-4. However, other documentation provided by Dr. Shi indicates that the date is November 21, 2019. Gov't Ex. 12 at 12.
Briviact 50 milligram and 100 milligram, a Schedule V drug, was received on October 22, 2018, the shipping label was created on October 25, 2018, and it was shipped on November 2, 2018. Tr. 579-96; Gov't Exs. 12 at 8, 20 at 10. Other documentation provided by OakmontScript states that this was shipped on October 26, 2018. Gov't Exs. 17 at 2, 18 at 4. The commercial invoice is dated September 26, 2018 and the “bill to” and “ship to parties” are Y.P. at Zhejiang Le Pu Technology Limited Company in China. Gov't Exs. 26 at 106, 28 at 53.
DI 3 found Dr. Shi's statement regarding drug codes to demonstrate a lack of candor because she had specifically asked Dr. Shi if OakmontScript was handling other controlled substances outside those listed and Dr. Shi reported that she had not. Tr. 600, 724, 788.
Belviq, 10 milligrams was received by OakmontScript on January 30, 2019, transferred from its distributor license to its export license on February 14, 2019, and shipped on February 15, 2019, to Beijing HeMingTang Pharmaceutical Company Limited. Tr. 602-13; Gov't. Exs. 12 at 5, 18 at 4, 26 at 121, 27 at 4, 28 at 60, 82. However, other documentation provided by Dr. Shi listed a packing slip date of January 16, 2019. Gov't Ex. 26 at 119. Other documentation listed an invoice date of May 8, 2019. Gov't Ex. 26 at 122.
DI 3 believed Dr. Shi's previous statement regarding drug codes demonstrated a lack of candor because she had specifically asked Dr. Shi if OakmontScript was handling other controlled substances outside those listed and Dr. Shi failed to report that OakmontScript had recently exported Belviq. Tr. 613, 724, 788.
Clobazam is a Schedule IV controlled substance. Tr. 614; Gov't Ex. 10 at 4. OakmontScript received a shipment of clobazam on February 28, 2019, and shipped it on March 5, 2019, to Patient J.L.'s home address in China. Tr. 613-41, 673-723, 727-33, 907, 912; Gov't Exs. 12 at 21, 26 at 15-16, 27 at 4, 28 at 65.
However, in other documentation provided by OakmontScript, there is no indication that clobazam was shipped or it is not listed on the invoice. Gov't Exs. 17 at 2-3, 18 at 3-4. OakmontScript did not have the authority to export clobazam and DI 3 was unable to confirm that it was used for a legitimate scientific, research, or medical purpose. Tr. 612-13; Gov't Ex. 11. OakmontScript also did not fill out a DEA Form 236 for this invoice. Tr. 615, 1435-36; Gov't Exs. 26 at 16, 28 at 76, 48 at 1.
At the May 8, 2019 visit, DI 3 asked why there was a discrepancy and Dr. Shi stated that the request had come to export the clobazam for direct patient use. Tr. 617-18. During this conversation, Dr. Shi stated that she had “begged” Dr. L.W. for about a week to write a prescription to legitimize this export of controlled substances and although he initially said no, he “eventually relented” and wrote the prescription, but asked that Dr. Shi not ask him to write a prescription like that again. Tr. 619-20, 621, 673, 769, 912, 1456.
It was DI 3's understanding that Patient J.L. was treated at Boston Children's Hospital, had returned to China, and was now seeking an export of clobazam to China. Tr. 620. Dr. Shi never provided this prescription to DI 3. Tr. 621-22.
DI 3 and DI 6 met with Dr. L.W. in January or February of 2020. Tr. 674. Upon arriving, both DIs explained the reason for the visit, identified themselves, and showed their credentials. Tr. 674. Dr. L.W. indicated he would be fine to answer questions. Tr. 674. During the interview, Dr. L.W. indicated that he was a consulting physician for OakmontScript, was paid a monthly stipend, and received extra compensation each time he wrote a prescription for OakmontScript. Tr. 675. It was unclear what his position was with NEEC. Tr. 675. Dr. L.W. reviewed the material transfer document that indicated the clobazam, invoice NEEC-019, was shipped directly to him and he stated that he had never taken physical possession of the clobazam or any controlled substances. Tr. 676, 677, 730.
DI 3 served an administrative subpoena on Dr. L.W. that was dated January 2, 2020. Tr. 678-79; Gov't Ex. 35. Dr. L.W. later called DI 3 to discuss the subpoena she had served on him. Tr. 681. Dr. L.W. stated that he did not have a response to the subpoena and he had not written prescriptions for controlled substances for OakmontScript. Tr. 681-82; Gov't Ex. 36. DI 3 asked him to email her his official response and he sent DI 3 an email stating this. Tr. 681-82; Gov't Ex. 36.
On March 6, 2020, DI 3 had an email exchange with Attorney Schumacher, in response to the administrative subpoenas that were served on OakmontScript and NEEC. Tr. 690; Gov't Ex. 40.
Regarding the clobazam prescription,
Regarding the clobazam, 019 invoice, DI 3 found that Dr. Shi demonstrated a lack of candor because she initially provided documents indicating the clobazam had been exported, but then later provided information that it was actually transferred domestically to a doctor's office in Massachusetts and Dr. Shi continued to provide conflicting information. Tr. 730-31. This lack of candor made it difficult for DI 3 to understand what had actually been exported. Tr. 731, 788-89.
OakmontScript did not provide return information or a DEA Form 236 for the exports discussed at the hearing including, invoice OKS-00243 (Diazepam), invoice OKS-00301 (Briviact), invoice OKS-00315/OKS-00315-1 (Belviq), invoice OKS-00315/OKS-00315-2 (Lyrica), invoice OKS-00108 (Belviq XR), invoice OKS-00715 (Lyrica), invoice OKS-00753 (Briviact), invoice OKS-00902 (Belviq), and invoice DIW-0019/NEEC-0019 (clobazam). Tr. 732-35.
Overall, DI 3's investigation of OakmontScript identified record-keeping issues including, not having an initial inventory,
DI 3 effectively explained her interactions with OakmontScript employees, including Dr. Shi and Dr. L.W. As a public servant, DI 2 has no personal stake in the outcome of the instant investigation or in the revocation of the Respondent's registration. There was no indication during her testimony that she had any animus against OakmontScript or any of its employees. I therefore find her testimony to be credible and it will be afforded considerable weight.
The Respondent's case-in-chief consisted of the testimony of four witnesses: (1) Yujing Liu, (2) DI 3,
Yujing Liu graduated from Northeastern University in 2015 with a major in project management. Tr. 814-15. Ms. Liu has been working for OakmontScript since February 2018 and coordinates logistics for OakmontScript including monitoring and tracking shipments, and preparing documents to support the exporting process. Tr. 815-16, 844. Ms. Liu also maintains OakmontScript's records on exports in a computer system that she reviews for accuracy, but all OakmontScript employees have access to these records. Tr. 849-50. A commercial invoice is part of the documents that are required to show the sale price of the drug. Tr.
Ms. Liu knows how to fill out a DEA Form 236 and DEA Form 161, which is not difficult to do if the drug code is available or assigned to OakmontScript and the national level import permit is available. Tr. 817, 830, 859-61.
The exporting process includes many events, including tracking when the shipment passes Customs. Tr. 816, 844. It is difficult for Ms. Liu to track when Customs clears a shipment and she cannot record that date. Tr. 844-45. Instead of providing that exact date, OakmontScript records “every step we did,” which includes when Customs clears a controlled substance to leave the United States, but not when the controlled substance is released by the country it is being shipped to. Tr. 845-48. OakmontScript uses the date on the customer's import permit, which is the customer's deadline to receive the export and finish the customer clearance date. Tr. 848. OakmontScript uses the common carrier DHL, but can only track DHL shipments for three months because the DHL system only provides three months of history. Tr. 848-49. Therefore, if the shipment arrives with the client outside this three-month window, OakmontScript is not able to track the exact date the shipment arrives and although a client will tell OakmontScript when it receives a shipment, OakmontScript does not record this information. Tr. 849.
On cross-examination, Ms. Liu agreed with Government counsel that the dates of shipment for invoice OKS-00715, as recorded in the Respondent's documentation admitted as Government Exhibits 26 (showing a shipment date of May 8, 2019) and 31 (showing a shipment date of March 29, 2019) are incorrect, based on the Respondent's documentation admitted as Government Exhibit 27 (showing a shipment date of November 21, 2018). Tr. 856-58.
Throughout her testimony, Ms. Liu was generally consistent and credible. As an employee of OakmontScript, she has a personal stake in the outcome of the instant investigation as well as the revocation of the Respondent's registrations. Her testimony generally involved her job duties with OakmontScript. At one point, she also agreed with Government counsel that the dates of shipment for invoice OKS-00715 were incorrect, based on different documents providing conflicting dates. Overall, I found Ms. Liu's testimony credible.
Donghui Yu has a Ph.D. in Pharmacology and her post-doctoral training was at Dana-Farber Cancer Institute and Harvard Medical School. Tr. 918. Her research focus was in oncology research and cancer drug development. Tr. 918. She was a teaching assistant at the School of Medicine in Beijing University, a Research Scientist at the Cubist Pharmaceutical, and an Investigator at Infectious Diseases at Novartis in Cambridge, Massachusetts. Tr. 918. During 2011 and 2015, she volunteered at Boston Children's Hospital by hosting weekly craft activities and saw children who had diseases that were still not cured.
Dr. Yu started working at OakmontScript in June 2017 and she enjoys working for OakmontScript because it gives her the opportunity to serve people in need in the medical and science field. Tr. 919, 930, 1015. She is the Executive Director and helps Dr. Shi train new employees by using OakmontScript's Standard Operating Procedure (“SOP”), and ensures that the Drug Supply Chain Security Act is implemented in the SOP and that OakmontScript is complying with the FDA and following the rules of other countries.
In order to export controlled substances legally in the United States, the person conducting the export of the controlled substance must have a DEA registration. Tr. 1029-30. Dr. Yu agreed with Government counsel's statement that applying for a DEA registration is not the same thing as having a DEA registration. Tr. 1030. Furthermore, a registrant can only export controlled substances for which it has authorization to do so. Tr. 1030-34.
OakmontScript obtained its DEA export registration on December 5, 2017. Tr. 1030. Dr. Yu stated that before DI 2 performed her on-site inspection,
OakmontScript's company goal is to serve the clients and the public and to make sure every step of its SOP is executed properly. Tr. 926-27. Otherwise, it can impact public safety and OakmontScript always discusses and modifies the SOP when it finds a problem that is not perfectly described in the SOP. Tr. 927.
Dr. Yu is familiar with the CSA and DEA regulations and it would be wrong for a DEA registrant to fail to comply with these. Tr. 1023-25. However, what
It is difficult for OakmontScript to obtain the LONO *
*
Dr. Yu's understanding of a drug code is that it is used for a controlled substance export only and is for controlled substance identification purposes as different dosage forms or formulations of drug substances could be assigned different drug codes. Tr. 970-71. This does not apply to Schedule V controlled substances, where only one drug code is assigned for different doses and populations. Tr. 971. The DEA field agents told OakmontScript that there were several ways to obtain new drug codes, including filling out an online application, emailing the local DI agent, and adding new drug codes when it renews its license. Tr. 972. OakmontScript is not a manufacturer and does not deal with controlled substance manufacturers in the United States. Tr. 982.
Dr. Yu discussed the macro issue that Ms. Liu had previously mentioned in her testimony, and noted that once OakmontScript realized this caused a potential problem, Dr. Yu corrected the template. Tr. 984, 1053-60. Dr. Yu would also create separate PDFs that list the correct date, and save them to the same folder. Tr. 1055-57. OakmontScript's SOP does not contain the “concept of date of export” as OakmontScript feels it “is unable to define” it. Tr. 986. Instead, OakmontScript “just document[s] every step we handled” because an “export is really a process.” Tr. 986. Therefore OakmontScript “had nothing to present” when DI 3 asked about a “specific export time.” Tr. 987. Although DI 3 used the shipping labels, OakmontScript did not believe the shipping label was proper to use as the export date. Tr. 987. Dr. Yu was “frightened” when DI 3 asked about the date of export at the February 19, 2019, inspection because she did not know the exact document to show her. Tr. 991-92. However, Dr. Yu later went on to confirm that the date of shipment is the date the controlled substance departed from the registered location. Tr. 1046.
There is a date of EEI
There is a date of custom clearance, which is a cutoff date in which OakmontScript has an obligation to help the customer finish before the due date, or the whole purchase becomes invalid. Tr. 989. If the DEA Form 236 is available, OakmontScript records that transaction date. Tr. 989, 1039-41. At the end of the transaction, OakmontScript receives verbal confirmation from the client that it received the product. Tr. 989. Ms. Liu generates the shipping labels and takes care of the customs clearance and EEI. Tr. 989-90.
It would be ideal to use the DHL database to record the export date, but this was not part of OakmontScript's SOP. Tr. 990. Doing this is not always practical because the DHL online system only displays the last ninety days and if the package is dropped off several weeks after the shipping label was created, then it may fall out of this ninety-day window and OakmontScript cannot track this package. Tr. 991. Other issues occur when a client picks its own private carrier to pick up the package and OakmontScript can only get verbal confirmation from the client that it received the package. Tr. 991. OakmontScript records the date the client verbally tells it the package was received. Tr. 989, 991.
Physicians can order medications from distributors without a prescription, which includes foreign physicians who, in the name of the patient, order medication from an exporter or distributor. Tr. 993. Distributors or exporters need to verify the doctor's medical license. Tr. 993. As a DEA-registered distributor and exporter, OakmontScript is able to fill medical orders to serve hospitals, physicians, and other entities domestically and foreign research organizations. Tr. 993-94. Specifically, as it relates to the clobazam prescription, OakmontScript's client included the Chinese medical doctor, the hospital, and also pharmacists who “have the medical history based on Boston Children's Hospital.” Tr. 994. Without a legal prescription from a local hospital or physician, the controlled substance would not be permitted to enter the receiving country. Tr. 994. The foreign prescription has two functions: (1) Showing the medical necessity of the patient and (2) providing evidence to show when the controlled substance is imported at the Chinese border, acting as an import permit. Tr. 994-95.
For Patient J.L., the doctor's instruction is required to show that the patient was not hospitalized and instead had a chronic condition. Tr. 995. Per the doctor's instruction, OakmontScript contacted the patient and learned from his family that he was no longer in the hospital. Tr. 995-96, 1071. It is OakmontScript's practice to send controlled substances directly to patients if it receives a doctor's order to do so. Tr. 1066-67, 1070.
During the February 19, 2019, inspection, DI 3 told OakmontScript that it needed to fill out a DEA Form 236 for controlled substances Schedules III, IV, and V prior to shipping, and after receiving the approved DEA Form 236, it needed to wait for fourteen days to start shipping, which was new information to Dr. Yu. Tr. 996, 1025-26, 1028. Dr. Yu was not sure if this is what the regulation stated and was unable to confirm this is what the regulation actually required. Tr. 996-97, 1025-28.
As a scientist, Dr. Yu believes it is important to keep complete and accurate records, and even though mistakes are possible, failing to keep accurate records can lead to further mistakes. Tr. 1017-18. Dr. Yu feels lucky to work at OakmontScript and finds it to be a good opportunity and the work OakmontScript does is meaningful to the whole pharmaceutical industry. Tr. 997-98. She and her colleagues work together every day to learn and grow, but sometimes they make mistakes and Dr. Shi takes full responsibility and never blames them. Tr. 998.
Overall, Dr. Yu provided consistent testimony. She testified regarding her employment and noted that client verification is a top priority for OakmontScript. As the Executive Director of OakmontScript, she has a direct stake in the outcome of this case and whether OakmontScript loses either of its registrations. It was evident throughout her testimony that Dr. Yu had a strong allegiance to Dr. Shi and that she had been thoroughly coached on her direct examination. Dr. Yu had nothing but positive things to say about Dr. Shi and even refused to provide a specific answer to a question because the answer was not “black and white.” Tr. 1024. At one point Dr. Yu testified that she was “frightened” when DI 3 asked about the date of export at the February 19, 2019, inspection because she did not know the exact document to show her. Tr. 991-92. However, Dr. Yu later went on to confirm on cross examination that the date of shipment is the date the controlled substance departed from the registered location. Tr. 1046. Such inconsistencies in her testimony, coupled with Dr. Yu's evident allegiance to Dr. Shi, does not allow me to fully credit Dr. Yu's testimony.
Dr. Shi came to the United States to study as a graduate student in 1988. Tr. 1075. She received her Ph.D. in Pharmaceutical Sciences from Duquesne University in Pittsburgh, Pennsylvania, and a Pharm.D., and then worked in various industries as a scientist. Tr. 1076, 1280. She also taught pharmacodynamics and pharmacokinetics to pharmacy students at Northeastern University during 2005 and 2007. Tr. 1277-78. After fifteen years, she dedicated herself to becoming a clinical pharmacist and has been registered as a pharmacist in Massachusetts since 2008. Tr. 1076, 1276-77. She has contributed to technology that led to eight patents. Tr. 1076-77. She became a fellow in the American Society of Consultant Pharmacists (“FASCP”) after passing a pharmacist exam and the Certificate of Geriatric Pharmacotherapy (“CGP”) for which she needed to know how to apply a safe protocol to her client. Tr. 1278-79. She also worked in retail pharmacies and an institutional pharmacy, as well as hospitals. Tr. 1077-78. This included working for PharmMerica and Lahey Hospital. Tr. 1280-81. Based on these experiences, she “decided to take some risk and to start a company” to aid in the support of the “global research need.” Tr. 1078.
Dr. Shi started OakmontScript in May 2016 as the owner, chief pharmacist, and president. Tr. 1078-79, 1283-85. She is familiar with the CSA and DEA regulations including 21 CFR 1306.04, 1306.05(a). Tr. 1079, 1280-82. Dr. Shi needed to obtain a license from the state prior to receiving OakmontScript's “federal license.” Tr. 1080-81; Resp't Ex. 4. After receiving OakmontScript's DEA registration for Schedule III, IV, and V controlled substances, Dr. Shi requested to add Schedule II controlled substances and had updated its security system by adding a monitor and camera, updated the safe, and worked on updating the alarm system. Tr. 1082-84. Dr. Shi's thought process was to first obtain access to Schedule III, IV, and V controlled substances and later request the Schedule II drugs. Tr. 1084-91; Resp't Ex. 5, 6, 7.
Dr. Shi received the first state license as a distributor for Schedules III, IV, and V within a couple of months. Tr. 1086. After receiving the state license, it took less than a month for Dr. Shi to obtain the Federal distributor COR, on October 7, 2016. Tr. 1086-87. Dr. Shi then applied for the Schedule II DEA registration, for which the approval process took about eight months. Tr. 1088-89. During this time, Dr. Shi made sure OakmontScript was in compliance and she spent more time training her employees. Tr. 1088-89.
OakmontScript applied for its first exporter COR on April 26, 2017 and applied for its second exporter COR on May 10, 2017. Tr. 1091, 1286, 1289-91, 1308; Gov't Ex. 4 at 6-8. At the time OakmontScript submitted the second exporter application on May 2017, the first application filed in April 2017 was still pending. Tr. 1291. At some point in May 2017, DI 1 informed Dr. Shi that the applications were duplicates and Mr. L.U. and DI 1 discussed OakmontScript getting an importer COR. Tr. 1291-92. Dr. Shi recalls discussions regarding converting an exporter application to an importer application, but did not recall if it was ever done. Tr. 1293-95.
An inspection took place on June 22, 2017, with DI 1 and a Senior Investigator from the Massachusetts Department of Health. Tr. 1297-98.
As of July 26, 2017, Dr. Shi was aware that OakmontScript's exporter application was still being reviewed by the DEA, but that it was “coming any
Dr. Shi put too much trust in Mr. L.U., her chief pharmacist, who was her previous boss, but she also shares in the responsibility for not following up regarding the exporter application and leading her “people to believe the license coming any day.” Tr. 1096-97, 1305. Dr. Shi “made [the] assumption it should come in any minute” and “misled [her] people” by saying the exporter registration was on the way and thus OakmontScript started taking orders for Schedules III, IV, and V controlled substances. Tr. 1097-98. Dr. Shi began instructing her employees in June 2017 to start working on preparing controlled substances to be exported. Tr. 1311. OakmontScript ultimately received its exporter registration on December 5, 2017, in the mail.
Based on DI 3's request for an exact export date, Dr. Shi created a document to track various parts of the export process. Tr. 1126-27. First, OakmontScript verifies the clients and records their import permit and sometimes their research proposal. Tr. 1126. The next step is to go through the contract to make sure everybody agrees on fees and that all parties are satisfied with the arrangement. Tr. 1127. The third step is to go through the “contract process” which is needed to finish the exporting process so the customer does not have to go back and reapply. Tr. 1127. OakmontScript also checks with Customs and Border Protection to see what type of license it needs to file. Tr. 1127-28. The U.S. Custom and Border Protection (“CBP”) also has updates that OakmontScript cannot “log into the process” if the value of the reported drugs are less than $2500, and this number is currently even lower. Tr. 1128. Dr. Shi updates the SOP based on the rules and regulations from the CBP, FDA, and the local government regarding the exporting process. Tr. 1128-29.
OakmontScript then prepares the shipping label and the customer ticket, which usually takes about two to four weeks. Tr. 1129-30. Dr. Shi instructs her staff to record what things happen, as opposed to providing the “right date” and she does not “want her people to have any concept about what is the right date” as this is not how this industry operates. Tr. 1130, 1366-67, 1495, 1498-99. Dr. Shi noted that “because we lack of the drug code . . . our export process foundation didn't lay out perfectly for my people” as it relates to the DEA Form 236. Tr. 1130-31. Dr. Shi does not “want to blame the government[ ] who didn't give” her a drug code. Tr. 1132. OakmontScript was not able to fill out DEA Form 236s for the diazepam 243 invoice, the Briviact 301 invoice, the Belviq 315 or 315-1 invoice, the Lyrica 315 or 315-2 invoice, or the Belviq 108 invoice. Tr. 1355.
OakmontScript did not export controlled substances prior to receiving its exporter registration on December 5, 2017, because the exporting process is not based around a specific date, but rather a customer's need. Tr. 1133. Dr. Shi started telling her employees that by May 2017, they “could start the business” because “the license [was] on the way.” Tr. 1134. The “right” date does not apply to OakmontScript because sometimes projects get cancelled and then reinstated. Tr. 1135. It takes about six to twelve months for OakmontScript to “work[ ] out each detail” to complete an export. Tr. 1136. The customer gives OakmontScript a due date and states when it wants OakmontScript to finish it. Tr. 1136-37. The exact date of export is not when the shipping label is created and the export is not defined by the exact date of export. Tr. 1138, 1495.
Dr. Shi discussed using a “buy and bill” model and how OakmontScript has collaborated with other companies including Biologics, Accredo, McKesson, and Specialty Biologics. Tr. 1209. If the buy and bill model has problems, then OakmontScript will establish another channel by using its “doctors to provide another channel to support” patients. Tr. 1209-10.
OakmontScript must submit the DEA Form 236 about two weeks before the planned export, so OakmontScript needs to have the anticipated date of departure from the port of export. Tr. 1371-72. For its exports, OakmontScript has the information required by section 3b of the DEA Form 236, but the information is “recorded differently.” Tr. 1375;
Dr. Shi reviewed DEA regulations and conducted her own research to learn about drug codes because OakmontScript had “no guidelines . . . no laws, no rules” and was “left without being able to support our community of the research.” Tr. 1149-50. She reviewed the DEA's website and 21 CFR 1308.03. Tr. 1156-61. The DEA has a lot of resources and Dr. Shi wishes she was “led to a better source” regarding drug codes. Tr. 1161. Dr. Shi continues to study the law, rules, and regulations in order to understand and “better to learn how to help the people in this situation.” Tr. 1194.
DI 3 initially told Dr. Shi that she wanted to help OakmontScript, but through this hearing, Dr. Shi learned that DI 3's duty was not to help her. Tr.
Dr. Shi provided two lists to DI 3 for clobazam with one list listing the clobazam and the other not listing the clobazam because DI 3 had repeatedly told her “I come in to help your business” and Dr. Shi did not know what DI 3's “true agenda” was. Tr. 1172-73. Dr. Shi did not “keep complete and accurate records” based on DI 3's standards, “so that should not be basis for lack of candor.” Tr. 1173. Dr. Shi “shared more than” she should have and believed that DI 3 would take all of the information they had discussed and “dialogue with” her. Tr. 1174-76, 1351. Dr. Shi never provided updated records to DI 3 after Dr. Shi found errors in the spreadsheets Dr. Shi had previously provided. Tr. 1321-23.
OakmontScript uses an app
Dr. L.W. is part of the app and does not write prescriptions, but is there as a physician consultant and “check” for Dr. Shi as he “know[s] the medical record,” that a medication is being used for a legitimate purpose, and ensures that OakmontScript is delivering the treatment to the right patient. Tr. 1197-99.
OakmontScript will exchange documents with foreign clients through this app and will respond to clients with urgent issues. Tr. 1382-83.
OakmontScript keeps accurate and complete records for controlled substances in a database system so all records are readily retrievable as required by the DEA based on OakmontScript's SOP. Tr. 1248-49, 1250. These folders contain subfolders and capture any changes that are made to an order. Tr. 1249-50. Each file has a name with a label and a number and these numbers are then assigned to a specific team to complete that order. Tr. 1250-52. Dr. Shi also created a link that a party can access if she gives that person authority to open a file. Tr. 1260. On the date of DI 3's March 29, 2019, inspection, Dr. Shi's printer had ink problems, so she wanted to be able to electronically download files and give access to DI 3, but DI 3 stated that she would only accept paper copies. Tr. 1260-61.
OakmontScript maintains separate inventory records for Schedule II, III, IV, and V controlled substances. Tr. 1268. There are separate folders for Schedule II and then Schedules III through V, for the initial inventory, for the biennial inventory, for exports, and for the distributions. Tr. 1268-69.
At the June 22, 2017 meeting, DI 1 told Dr. Shi there was an issue with OakmontScript's alarm system and OakmontScript then took steps to fix the alarm issue. Tr. 1313-14. DI 1 came back at some point to check the alarm. Tr. 1315-16. During DI 1's return visit to check the alarm, she also informed Dr. Shi that OakmontScript would need to get a different safe. Tr. 1316. In mid-September 2017, OakmontScript notified DI 1 that it was going to install a new safe. Tr. 1316-17. The new safe was installed in late September or early October 2017. Tr. 1317. At some point, DI 1 came back to OakmontScript to check the new safe and DI 1 stated that it “was okay.” Tr. 1317-18.
In approximately November 2017, Dr. Shi recalls having a conversation with DI 1 regarding requesting excessive drug codes. Tr. 1324-25. DI 1 walked Dr. Shi through how to delete the excess codes, and Dr. Shi deleted the codes. Tr. 1324-28.
Dr. Shi did not review 21 CFR 1301.26 when shipping the diazepam invoice number 243 and clobazam invoice number 0019 overseas because it is “a U.S. law” and “of course, I cannot base[ ] on that” and if the DEA is able to provide “such a law” that shows this regulation is applied globally, she “will be happy.” Tr. 1365. Before a controlled substance leaves the United States, OakmontScript complies with United States law and then “after border, [OakmontScript] comply[ ] whatever the law required upon” OakmontScript by the recipient country. Tr. 1366.
Dr. Shi met the intern through the intern's grandmother who was also Dr. Shi's teacher. Tr. 1395. Around Christmastime of 2016, the intern started working for OakmontScript as Dr. Shi's intern. Tr. 1395. The intern altered OakmontScript's distributor Certificate of Registration by using Adobe Shop on her personal laptop. Tr. 1405-06. Once Dr. Shi learned that the intern had changed OakmontScript's registration to state it was a pharmacy, Dr. Shi immediately analyzed the situation, realized the intern made a mistake and was still only learning so it was “not all her fault.” Tr. 1397.
When Dr. Shi did business with other partners, including PBA and its staff, they would say they wanted OakmontScript to submit a pharmacy license. Tr. 1409. Dr. Shi believed that the intern made a change to the registration based on lack of experience. Tr. 1410-11.
The intern left OakmontScript in February 2018 for multiple reasons, including that her visa expired. Tr. 1398. Dr. Shi explained to DI 3 that she “could have fired” the intern, but thought this would be “a little too much” because it was only the intern's “first week she ever entered the job.” Tr. 1399-1400.
Dr. Shi testified that it is a serious issue to falsify a DEA registration based on the consequences, but this issue did not get “somebody killed” or cause “some pandemic” and the intern was allowed to bring her laptop and continue to access OakmontScript files after this issue, but was limited to the “non-vendor” part. Tr. 1417-18. Furthermore, in her closing statement, Dr. Shi stated “this is not a controlled-substance-related issue,” yet the DEA “continued to maintain their limited understanding about controlled substances.” Tr. 1496. Dr. Shi went on in her closing to state that OakmontScript “did more than the minimum, we did 500 times more than what's required to address this incident.” Tr. 1496.
Two of the documents provided by OakmontScript indicate that diazepam was shipped on May 18, 2017. Tr. 1311-12; Gov't Exs. 17 at 3, 18 at 3. Another document indicates that the diazepam was shipped on June 10, 2017. Tr. 1313;
As it pertained to the Lunesta invoice, Dr. Shi testified that this transaction was an export and not a domestic distribution as claimed by the Government, because the address was the contact address for a company representative, Z.Y., who was taking this prescription to China and the company in China was the end-user. Tr. 1180-82, 1359. Dr. Shi had used “common sense” when sending this prescription because the representative of the company signed a contract with OakmontScript, the address was named on the PO contact,
Dr. Shi noted this was an “informal channel” and “since this incident and since DI 3 have point this out, [OakmontScript] no longer accept[s] informal channel of delivery for any order.” Tr. 1182, 1183.
Dr. Shi acknowledged that dates entered on OakmontScript's shipping labels are not actual shipping dates. Tr. 1342-43. Dr. Shi noted that “[w]e have, we have of course, we have the date, we have all the records.” Tr. 1344. After receiving the May 8, 2019 subpoena, Dr. Shi did not provide the specific information of the shipping date because it was “not required. [DI 3] didn't, she didn't ask for it” and DI 3 was “so confused about what is the shipping date, she don't know what to ask.” Tr. 1343-46. Furthermore, there is “no such things as the export date . . . [the regulations] do not require the export date to be recorded. That's, that's actually pity . . . wrong information to ask.” Tr. 1347. However, Dr. Shi provided export dates when DI 3 asked for them. Tr. 1347-48; Gov't Ex. 20 at 9.
Briviact was shipped on August 2, 2017. Tr. 1314; Gov't Exs. 12 at 7, 27 at 2.
OakmontScript shipped Belviq on November 1, 2017, based on the shipping label. Tr. 1318-19; Gov't Exs. 12 at 3, 27 at 2. However, the shipping label is an estimated time. Tr. 1319.
Documentation provided by OakmontScript indicates that Lyrica was shipped on November 20, 2017. Tr. 1328-35;
Some documentation indicates that the Belviq was shipped on December 1, 2017. Tr. 1351; Gov't Exs. 12 at 3, 27 at 2.
Patient J.L.'s family came into contact with Dr. Yu, who learned about Patient J.L.'s situation while doing community service at Boston Children's Hospital. Tr. 1195. When the family returned to China, they wanted to continue the therapy and they supplied
As the founder and President of OakmontScript, Dr. Shi has the most at stake in this case involving the potential revocation of OakmontScript's CORs. Throughout her testimony, she was often evasive in answering the questions posed by opposing counsel to the point where Government counsel had to repeat questions multiple times and the tribunal even needed to intervene multiple times to instruct Dr. Shi to answer direct questions posed by the Government.
The Government seeks revocation of the Respondent's distributor and exporter CORs based on its contention that the Respondent, through its employees, has committed acts that would render its registration inconsistent with the public interest as that term is defined in 21 U.S.C. 823(b), (d), and (e), 824(a), and/or 958. ALJ Ex. 1 at 1. The Government alleges that the Respondent's CORs should be revoked because it exported controlled substances prior to obtaining its exporter COR, exported controlled substances it was not approved to export, demonstrated a lack of candor to DEA investigators regarding its business activities, falsified a copy of its DEA distributor COR, distributed controlled substances to a non-DEA registered individual, exported controlled substances to fill prescriptions for underage patients, and commingled the records for its two registrations and otherwise failed to keep complete and accurate records.
Although the burden of proof at this administrative hearing is a preponderance-of-the-evidence standard,
[Omitted for brevity.] It is well-settled that since the Administrative Law Judge has had the opportunity to observe the demeanor and conduct of hearing witnesses, the factual findings set forth in this Recommended Decision are entitled to significant deference,
The Government seeks revocation of the Respondent's DEA CORs based on its allegations that continuation would be inconsistent with the public interest as that term is defined in 21 U.S.C. 823(b), (d), and (e). The CSA provides that the Agency may suspend or revoke a registrant's COR “upon a finding that the registrant . . . has committed such acts as would render [its] registration under section 823 . . . inconsistent with the public interest.” 21 U.S.C. 824(a)(4). The Government specifically alleged that the Respondent violated the law regarding its distributor registration by: (1) Falsifying its distributor registration, (2) displaying a lack of candor regarding this falsified registration, (3) domestically distributing Lunesta, a controlled substance, to a non-registrant in May 2018, and (4) commingling records. The Government further alleges that the Respondent violated the law regarding its exporter registration by: (1) Exporting controlled substances prior to obtaining its exporter COR, (2) exporting controlled substances it was not approved to export, (3) exporting controlled substances to fill foreign prescriptions for underage patients, and (4) failing to keep complete and accurate records of controlled substances it had exported.
The Government bears the burden of proving that the Respondent's continued registration would be inconsistent with the public interest. 21 CFR 1301.44(e). Where the Government has met its burden by making a
Any additional facts necessary for a disposition of this case are set forth in the balance of this Recommended Decision.
As to its distributor COR, the Government alleges that the Respondent violated the CSA and its implementing regulations by: (1) Altering its distributor registration to state that it was a pharmacy and then representing to another DEA registrant that it was a pharmacy by presenting the altered DEA COR, (2) displaying a lack of candor regarding this falsified registration, (3) domestically distributing Lunesta (eszopiclone, a schedule IV controlled substance) to a non-registrant in May 2018, and (4) commingling its distributor records with records pertaining to its exporter registration. The Government seeks the revocation of the Respondent's distributor COR based on its allegations that the Respondent's continued registration would be inconsistent with the public interest as that term is defined in 21 U.S.C. 823(b) and (e).
The CSA provides that “[a] registration . . . to manufacture, distribute, or dispense a controlled substance or a list I chemical may be suspended or revoked by the Attorney General upon a finding that the registrant . . . has committed such acts as would render [its] registration under section 823 . . . inconsistent with the public interest as determined under such section.” 21 U.S.C. 824(a)(4).
Congress has provided the following factors to be considered in the public interest analysis as it relates to
(1) Maintenance of effective control(s)
(2) compliance with applicable State and local law;
(3) prior conviction record of [the registrant] under Federal or State laws relating to the manufacture, distribution, or dispensing of such substances;
(4) past experience in the distribution of controlled substances; and
(5) such other factors as may be relevant to and consistent with the public health and safety.
21 U.S.C. 823(b), (e). The factors are considered in the disjunctive, and the Agency may give each factor the weight it deems appropriate in determining whether to revoke a registrant's registration.
Evidence properly considered under Factor One of the public interest analysis for a distributor registrant includes the adequacy of the registrant's recordkeeping.
21 CFR 1304.21(c) requires that “[s]eparate records shall be maintained by a registrant for each independent activity and collection activity for which he/she is registered or authorized, except as provided in § 1304.22(d).” Therefore, as OakmontScript possesses both an exporter and distributor registration, it must maintain separate records for each registration. 21 CFR 1304.21(c). “Recordkeeping, reporting and security requirements are also more rigorous for those who manufacture and distribute controlled substances.”
On September 16, 2016, DI 1 conducted an on-site inspection of OakmontScript with a Senior Investigator with the Massachusetts Department of Health regarding OakmontScript's distributor registration. Tr. 44-45. At this time, DI 1 instructed Dr. Shi that OakmontScript needed to ensure it did not commingle records from its distributor registration with any future exporter registration. Tr. 51.
On July 26, 2018, a second DI, DI 2, conducted an inspection of OakmontScript's distributor registration and noted that OakmontScript was commingling records by keeping some of its distributor records with its exporter records. Tr. 129-33, 135-36. After she identified this issue, she discussed it with Dr. Shi, who indicated that she understood and stated that OakmontScript would not commingle records in the future. Tr. 133. DI 2 did not “believe [Dr. Shi] knew about the commingling but once corrected, she understood.” Tr. 133.
A third DI, DI 3 noted that there were issues with recordkeeping as OakmontScript had commingled records. Tr. 739. For instance, OakmontScript was keeping inventories for both its distributor registration and its exporter registration on the same document and it was difficult for DI 3 to discern under which registration each transaction had occurred. Tr. 743-48, 782; Gov't Ex. 12. DI 3 specifically noted that it was difficult to discern if the Lunesta invoice OKS-00650 was a distribution or export as the spreadsheet provided by OakmontScript had both CORs listed on the spreadsheet. Tr. 746-47; Gov't Ex. 12 at 17.
As discussed, prior to DI 3's most recent inspections, OakmontScript had been told by two DI investigators that it needed to maintain separate inventories for its distributor and exporter registrations. Tr. 51, 131-36. Despite this, when DI 3 performed her initial inspection on March 29, 2019, the only records OakmontScript provided for the biennial inventory included commingled records that contained information for both its distributor and exporter registrations. Tr. 351, 739, 744-49; Gov't Ex. 12. In fact, DI 3 was only able to discern invoice OKS-00243 was an export after reviewing the license transfer document for this export. Tr. 747-48; Gov't Ex. 26 at 21. However, another spreadsheet provided for this export at the March 29, 2019, inspection did not indicate this was an export or that the diazepam had been transferred from OakmontScript's distributor license to its exporter license. Tr. 747; Gov't Ex. 12 at 14.
I therefore find that OakmontScript commingled records that were provided to DI 3 at the March 29, 2019 inspection, after being put on notice of this not once, but twice. This commingling of OakmontScript's distributor and exporter records makes it difficult, if not at times impossible, to discern whether a particular controlled substance was distributed or exported.
Accordingly, in review of the evidence of record, including stipulations of the parties, OSC Allegation 21.b is
The Government has alleged that Factor Five is relevant to the public interest analysis regarding the Respondent's distributor COR. ALJ Ex. 1 at 4, 5 ¶ 13.
A lack of candor may properly be considered by the DEA as something that threatens public health and safety.
Additionally, the Respondent's falsification of its COR should be considered under Factor Five. For example, in another case where the registrant was put on notice that her registration was being improperly used to order controlled substances, her failure to take prompt and reasonable action to investigate the misuse constituted additional conduct that threatened public health and safety.
Finally, the Respondent's domestic distribution of Lunesta to a non-registrant should be considered under Factor Five. In a similar situation, a previous Acting Administrator examined a pharmacy's distribution of a controlled substance to a non-registered location under Factor Four of 21 U.S.C. 823(f).
The Government alleges that the Respondent violated 21 U.S.C. 843(a)(3), which states that “[i]t shall be unlawful for any person knowingly or intentionally . . . to acquire or obtain possession of a controlled substance by misrepresentation, fraud, forgery, deception, or subterfuge.” 21 U.S.C. 843(a)(3). The Government alleges that the Respondent violated 21 U.S.C. 846 which states, “[a]ny person who attempts or conspires to commit any offense defined in this subchapter shall be subject to the same penalties as those prescribed for the offense, the commission of which was the object of the attempt or conspiracy.” The Government alleges that OakmontScript violated these statutes and that such conduct constitutes conduct that is inconsistent with the public health and safety, in violation of 21 U.S.C. 823(b)(5) and (e)(5).
Dr. Shi met the intern through the intern's grandmother, who was also Dr. Shi's former teacher. Tr. 1395. The intern started working for OakmontScript as Dr. Shi's intern in January 2017 and her responsibilities included establishing relationships with OakmontScript's competitors to determine how they conduct business. Tr. 293-94, 1395. Dr. Shi hoped to create an account with PBA so OakmontScript could purchase drugs from PBA. Tr. 1411-12. Dr. Shi told the intern to “do whatever is needed” and to “[g]ive [PBA], basically, whatever they want in order to establish this . . . client relationship with them.” Tr. 303. When Dr. Shi conducted business with companies, including PBA, these companies would sometimes request OakmontScript to submit a copy of a pharmacy license as some distributors will only work with pharmacies. Tr. 275, 1409. Dr. Shi was “too busy” to help the intern so she told the intern to ask Mr. L.U. what letter to send to PBA. Tr. 1414.
After PBA requested that OakmontScript submit a pharmacy registration, the intern altered OakmontScript's distributor COR No. RO0504680 by using Adobe Shop on her personal laptop. Tr. 1405-06; Gov't Ex. 14. Without being told to do so, she modified the business activity of the distributor registration to indicate it was a pharmacy registration. Tr. 1414-15. Even though Dr. Shi was “on the email chain being cc'ed” regarding this application to PBA, she testified that she did not notice the altered registration document which was an attachment. Tr. 1415. During the tribunal's questioning of Dr. Shi, Dr. Shi agreed that the intern had changed the business activity from “distributor” to “pharmacy” and this altered registration was sent to PBA in order to open an account with PBA. Tr. 1396.
While DI 3 was reviewing OakmontScript's case files, she discovered a report filed by the Kansas City District Office of the DEA, naming OakmontScript as fraudulently creating a DEA registration. Tr. 275. PBA holds its own DEA registration and DI 3 spoke to one of PBA's Regulatory Compliance Team Leaders, B.W., via email correspondence that noted PBA “only sell[s] to pharmacies” and it does not “sell to other distributors.” Tr. 275-78; Gov't Ex. 55. PBA also requires potential customers to send a copy of their State pharmacy licenses and a copy of their DEA registrations when they submit their account application. Tr. 278; Gov't Ex. 55. B.W. further noted that OakmontScript sent PBA a DEA registration indicating it was a pharmacy and after PBA performed its due diligence, PBA discovered that the document had been altered. Tr. 278; Gov't Ex. 55. PBA reported OakmontScript and denied OakmontScript's request to open an account. Tr. 278; Gov't Ex. 55.
On April 23, 2019, DI 3 and Dr. Shi discussed this issue on the phone. Tr. 293. DI 3 learned that after PBA initially refused to establish a relationship with OakmontScript, the intern altered the
It was DI 3's understanding from the April 23, 2019, phone call that the intern had been fired. Tr. 294-95. Therefore, when on the following day DI 3 received the email from Dr. Shi that the intern had indeed not been fired for falsifying the registration, she understandably viewed her phone conversation with Dr. Shi on April 23 and the email from Dr. Shi on April 24 to be in “direct conflict.” Tr. 297-98.
Because Dr. Shi had ties with the intern's family, she felt pressure to keep the intern employed. Tr. 302. The intern left OakmontScript in February 2018 for multiple reasons, including that her visa expired. Tr. 1398. DI 3 was never able to contact the intern to discuss the registration falsification incident with her. Tr. 304.
As the Government noted in its post-hearing brief, although OakmontScript was not able to establish a customer relationship with PBA and therefore was unable to purchase any controlled substances, “had [OakmontScript] been successful” in opening an account, (ALJ Ex. 27 at 17), “OakmontScript [would] have had the capacity to order controlled substances” from PBA. Tr. 304. In its post-hearing brief, the Respondent asserts that “[t]his concern . . . is misplaced” because OakmontScript has established “multiple accounts with other trading partners” and “in its five years of operation, never suffered any losses, theft, inventory discrepancies, or other incidents relating to controlled substances” and therefore OakmontScript “has proven itself to be a trustworthy DEA registrant and true to its professional obligations.” ALJ Ex. 26 at 2-3. To the contrary, OakmontScript's falsification of a DEA registration displays the antithesis of trustworthiness. As DI 3 testified, “DEA registrants hold a public trust position” and because controlled substances that are used improperly can be dangerous, “DEA registrants have to be licensed and registered with the proper authorities.” Tr. 305.
Furthermore, the fact that the “Respondent did not obtain possession of [any] controlled substances” is irrelevant and her misconduct is still “actionable as an attempt to obtain controlled substances by fraud or deception.”
As both parties stipulated to the registration being falsified, and based on Dr. Shi's own admission that she was aware that the intern had altered OakmontScript's distributor registration to reflect that it was a pharmacy, it is uncontroverted that OakmontScript falsified a copy of its DEA registration. I therefore find that the intern working for OakmontScript, altered OakmontScript's distributor COR by using a computer program to change the registration so that the word “Distributor” was replaced with “Pharmacy” under the “Business Activity” section of the registration. I further find that this registration was altered in an attempt for OakmontScript to establish a relationship with PBA to ultimately obtain controlled substances from PBA, which is in violation of Federal law, specifically 21 U.S.C. 846.
Accordingly, in review of the evidence of record, including stipulations of the parties,
*
The Government alleges that Dr. Shi exhibited a lack of candor as it relates to this allegation. When Dr. Shi learned that the intern had altered OakmontScript's registration to list its business activity as a pharmacy, Dr. Shi “analyzed the situation.” Tr. 1397. Dr. Shi believed that the intern made this error because she was “a new intern” and due to her “lack of experience.” Tr. 1410-11. Because this was “not all her fault,” Dr. Shi did not fire the intern and instead “changed her to a different position” and moved her to a “more straightforward job.” Tr. 1397.
During her testimony, DI 3 indicated that during the April 23, 2019, phone call Dr. Shi had informed her that she had fired the intern, but DI 3 later learned that the intern remained employed at OakmontScript for an additional thirteen months after this incident. ALJ Ex. 1 at 5 ¶ 14; Tr. 297-98, 307, 788. Dr. Shi sent an email the next day, on April 24, 2021, to DI 3 indicating that the intern was employed from January 1, 2017 through February 2018 and left the United States because her work visa expired. Tr. 297.
Based on the testimony of the parties, I do not find that Dr. Shi exhibited a lack of candor. I do not find that DI 3 was being disingenuous regarding her testimony that “it was [her] understanding that [the intern] had been fired due to the fraudulent DEA registration” in January 2017 and that she had been “led . . . to believe that [the intern] had been fired” based on this incident. Tr. 295, 297-98, 793. Rather, I find that it is more likely there was a miscommunication between DI 3 and Dr. Shi as opposed to a lack of candor.
As discussed
Accordingly, in review of the evidence of record, including stipulations of the parties, OSC Allegation 14 is
*
The CSA's general criminal provision is contained in 21 U.S.C. 841(a), and in relevant part states: “Except as authorized by this subchapter, it shall be unlawful for any person knowingly or intentionally . . . (1) to manufacture, distribute, or dispense, or possess with intent to manufacture, distribute, or dispense, a controlled substance . . . .” 21 U.S.C. 841(a)(1). “Congress devised a closed regulatory system making it unlawful to manufacture, distribute, dispense, or possess any controlled substance except in a manner authorized by the CSA” to prevent abuse and diversion of controlled substances.
“Distribute” is defined as “to deliver (other than by administering or dispensing) a controlled substance or a listed chemical.” 21 U.S.C. 802(11). “The term `distributor' means a person who so delivers a controlled substance or a listed chemical.” 21 U.S.C. 802(11). A distributor can only distribute to another DEA registrant who holds the appropriate authority to handle that controlled substance. 21 U.S.C. 822(a). A distributor is not permitted to distribute controlled substances to an ultimate user and there is no coincidental activity that permits a distributor to provide controlled substances to non-DEA individuals or persons or companies.
Although OakmontScript's records have inconsistent information regarding the Lunesta invoice OKS-00650 shipment, I find that the most likely scenario is that OakmontScript received Lunesta in May 2018 and shipped the Lunesta to Mr. Z.Y. at an address in the United States of [omitted for privacy], Kearny, New Jersey [ ] in May 2018. Tr. 499-535, 1455; Gov't Exs. 12 at 17, 17 at 3, 18 at 3, 22 at 10-11.
Dr. Shi also indicated the following in an email dated April 30, 2021:
Lunesta was shipped on
Lunesta is not controlled drug in China.
Mr. [Z.Y.] now in China Disha Pharma Group, as a director.
Gov't Ex. 22 at 10 (emphasis in original).
After reviewing OakmontScript's records, DI 3 initially believed this transaction was an export, but upon further investigation, realized that this was a domestic distribution or a distribution to a registrant in the United States. Tr. 508, 510, 529, 533-34; Gov't Exs. 22 at 10-11, 26 at 88, 89, 92, 27 at 3, 28 at 66, 67, 68.
DI 3 discussed this invoice with Dr. Shi on May 8, 2019, when she conducted another inspection of OakmontScript. Tr. 513-14. Dr. Shi stated that L.Y., a colleague Dr. Shi had met at a conference, requested that Dr. Shi send the Lunesta to Mr. Z.Y. prior to Mr. Z.Y. going to China as Dr. Yu was not able to acquire it. Tr. 515-16. Mr. Z.Y. then provided her a business card showing that he was an employee of Disha Pharmaceutical Group, a pharmaceutical company in China. Tr. 534. Mr. Z.Y. was planning to move to China, and asked that the Lunesta be shipped to his home address in New Jersey, and paid via personal payment. Tr. 514, 516, 531, 534-35. This invoice indicates that the “bill to” party was Disha Pharmaceutical Group. Tr. 530-31; Gov't Ex. 28 at 44. At some time in May 2019, DI 3 discussed with Dr. Shi that this was improper. Tr. 518.
OakmontScript purchased this Lunesta with its distributor registration and then mailed it to Mr. Z.Y. at his home address in New Jersey. Tr. 517-18. Disha was not the end user or ultimate user because it was seeking the Lunesta in order to conduct research as opposed to using it for personal use. Tr. 518-19, 772-73.
DI 3 conducted a search of the DEA registration database for Mr. Z.Y., Disha Pharmaceutical Group, and the address in Kearny, New Jersey and discovered that none of them have any active or inactive DEA registrations. Tr. 545-54. There is also no indication that the Kearny, New Jersey, address could be a freight forwarding facility.
A separate facility operated by a distributing registrant through which sealed, packaged controlled substances in unmarked shipping containers (
21 CFR 1300.01(b).
Dr. Shi testified that this transaction was an export and not a domestic distribution as claimed by the Government, because Mr. Z.Y. was taking this prescription to a company in China, Disha Pharmaceutical, which was the end-user. Tr. 1180-82, 1359. Dr. Shi also asserts that an end-user or ultimate user
Although Dr. Shi indicates that OakmontScript no longer uses this “informal logistical arrangement,” Dr. Shi continues to believe this was a proper way to export controlled substances. ALJ Ex. 26 at 12. OakmontScript references 21 U.S.C. 822(c)(2)
(c) Exceptions
The following persons shall not be required to register and may lawfully possess any controlled substance or list I chemical under this subchapter:
(2) A common or contract carrier or warehouseman, or an employee thereof, whose possession of the controlled substance or list I chemical is in the usual course of his business or employment.
I find that OakmontScript shipped Lunesta to an address in Kearny, New Jersey, United States, which makes this a domestic distribution as opposed to an export. I also find that the Lunesta was shipped to Mr. Z.Y. at his home address in Kearny, New Jersey, Mr. Z.Y. did not possess a DEA registration, and this transaction did not meet any exceptions provided by the regulations.
Accordingly, in review of the evidence of record, including stipulations of the parties, OSC Allegations 16 and 17 are
I find that the Government has proven that Respondent failed to maintain complete, accurate, and separate records for its distributor registration; that Respondent submitted a falsified pharmacy registration to PBA in an attempt to obtain controlled substances outside of the CSA's closed regulatory system; and that Respondent unlawfully distributed a controlled substance domestically. Accordingly, I find that Factors One and Five weigh strongly in favor of revoking Respondent's distributor registration.]
As to its exporter COR, the Government alleges that the Respondent violated the CSA and its implementing regulations by: (1) Exporting controlled substances prior to obtaining its exporter COR, (2) exporting controlled substances it was not approved to export, (3) exporting controlled substances to fill prescriptions for underage patients, and (4) commingling its exporter records with records pertaining to its distributor registration and otherwise failing to keep complete and accurate records of controlled substances it exported. The Government seeks the revocation of the Respondent's exporter COR based on its allegations that the Respondent's continued registration would be inconsistent with the public interest as that term is defined in 21 U.S.C. 958.
The CSA, as codified at 21 U.S.C. 958, provides that “[t]he Attorney General may . . . revoke or suspend a registration under subsection (a) or (c) of this section,
Subsection (a) applies to exporters of schedule I or II controlled substances and states that “[i]n determining the public interest, the factors enumerated in paragraph (1) through (6) of section 823(a) of this title shall be considered.” Although the Respondent is registered to export schedule II controlled substances, the Government made no allegations regarding the Respondent's exporter registration and schedule II controlled substances, thus sections 958(a) and 823(a) are not relevant to the instant proceedings.
Congress has provided the following factors to be considered in the public interest analysis, as set forth in 21 U.S.C. 823(d), which relates to exporters of schedule III, IV, and V controlled substances pursuant to 21 U.S.C. 958(c)(1):
(1) Maintenance of effective controls against diversion of particular controlled substances and any controlled substance in schedule III, IV, or V compounded therefrom into other than legitimate medical, scientific, or industrial channels;
(2) compliance with applicable State and local law;
(3) promotion of technical advances in the art of manufacturing these substances and the development of new substances;
(4) prior conviction record of applicant under Federal or State laws relating to the manufacture, distribution, or dispensing of such substances;
(5) past experience in the manufacture, distribution, and dispensing of controlled substances, and the existence in the establishment of effective controls against diversion; and
(6) such other factors as may be relevant to and consistent with the public health and safety.
As with the public interest factors applicable to the Respondent's distributor registration, these factors are considered in the disjunctive, and the Agency may give each factor the weight it deems appropriate in determining whether to revoke a registrant's registration.
In engaging in the public interest analysis regarding an exporter, the Deputy Administrator has noted that, “[b]oth factors one and five inquire into whether [a registrant] has effective controls against diversion.”
DEA registrants are required to keep complete and accurate records related to controlled substances. 21 U.S.C. 827(a) and (b); 21 CFR 1304.21(a). The Deputy Administrator has stated, including in the context of an exporter, that “[a]ccurate inventories are essential to conduct accountability audits and to determine whether diversion has occurred.”
OakmontScript failed to keep complete and accurate records, did not record an initial inventory for its exporter registration, and did not keep separate records for its exporter and distributor license.
OakmontScript received diazepam, 10 milligram gel on May 16, 2017 from McKesson. Tr. 356-57; Gov't Ex. 18 at 3. OakmontScript provided documentation to DI 3 that indicates this diazepam was exported on both May 18, 2017 and June 10, 2017. Tr. 352-53, 366. Tr. 356, 1448; Gov't Exs. 17 at 3, 18 at 3.
When questioned regarding the exact export date of the diazepam, Dr. Shi sent an email to DI 3 on April 23, 2019 indicating that she did not know the exact date of export because the “shipping label was not retrievable due to USPS system update” and Ms. Liu has “made edit in the date multiple times and she thought the proper date is on the date of payment . . . .” Tr. 358-59, 386, 1449; Gov't Exs. 20 at 8, 28 at 22. In this response email, the “ship to name” is listed as H.H. at Cangzhou People's Hospital in China and Dr. Shi's guess of the “best possible date” of shipment was the date of payment on May 18, 2017. Tr. 361-63, 1449-50; Gov't Ex. 21 at 9. In other documentation provided by Dr. Shi at the May 8, 2019 inspection, the use was listed as “for research” and the “bill to” party was H.X.Z. at Par Pharmaceutical and the ship to party was Dr. H.H. at Cangzhou People's Hospital in China. Tr. 365; Gov't Ex. 26 at 19.
One of the license transfer documents for this export indicates that the diazepam was transferred from OakmontScript's distributor registration to its exporter registration on May 7, 2018. Tr. 371-72, 435; Gov't Exs. 26 at 21, 28 at 77. A different license transfer document indicates that the date of transfer was May 20, 2017. Tr. 371-72, 436; Gov't Ex. 26 at 22. Other documentation provided by OakmontScript states that the diazepam prescription was made based on a request from a family in China for Patient S.Z. and was shipped sometime in May 2019. Tr. 407-09; Gov't Ex. 44 at 1-2. OakmontScript was unable to complete a DEA Form 236 for this export.
DI 3 confronted Dr. Shi regarding this conflicting information at the on-site inspection on May 8, 2019. Tr. 363. Dr. Shi recalled that this diazepam had been shipped for direct patient use in China. Tr. 363-64. Dr. Shi stated that OakmontScript had to label the reason for export as “research” in order to get the shipment past Chinese Custom Officials and that the actual intended use of the diazepam was for direct patient use. Tr. 366, 1446.
DI 3 was also confused by documents provided by Dr. Shi because although they appeared to be the exact same documents—a prescription written in Chinese, a hospital's government licenses, and a doctor's medical license—these documents were provided in stacks for two different invoices. Tr. 380-83; Gov't Ex. 26 at 12-14, 30-32. Based on a translation that DI 3 ultimately obtained for these documents, DI 3 learned that both prescriptions were for diazepam. Tr. 383.
OakmontScript provided DI 3 with documents that indicated that Briviact 50 milligram and 100 milligram, was received on October 22, 2018, the shipping label was created on October 25, 2018, and was shipped on November 2, 2018. Tr. 579-96; Gov't Exs. 12 at 8, 20 at 10, 26 at 103, 105, 28 at 16. Other documentation provided by OakmontScript indicated that this Briviact was shipped on October 26, 2018. Gov't Exs. 17 at 2, 18 at 4. In other documentation provided by OakmontScript, no shipping date is provided. Gov't Ex. 27 at 3-4. OakmontScript did not fill out a DEA Form 236 for this controlled substance. Tr. 596, 1435-36;
OakmontScript provided documentation to DI 3 indicating that a variety of Lyrica strengths were shipped on November 21, 2018, to J.F. at YaoPharma. Tr. 558-72; Gov't Ex. 31 at
Accordingly, in review of the evidence of record, including stipulations of the parties, OSC Allegations 20.a.a, 20.a.b, 20.a.c, 20.a.d, 20.b, 20.c.e, and 20.c.f
Pursuant to 21 CFR 1304.11, “[e]very person required to keep records shall take an inventory of all stocks of controlled substances on hand on the date he/she first engages in the manufacture, distribution, or dispensing of controlled substances, in accordance with paragraph (e) of this section as applicable” and “[i]n the event a person commences business with no controlled substances on hand, he/she shall record this fact as the initial inventory.” 21 CFR 1304.11(b).
On September 16, 2016, DI 1 conducted an on-site inspection of OakmontScript with a Senior Investigator with the Massachusetts Department of Health. Tr. 44-45. DI 1 explained that OakmontScript was required to create an initial inventory of controlled substances OakmontScript has on site. Tr. 50. DI 1 and the Senior Investigator conducted a pre-registration inspection of OakmontScript for its exporter application on June 22, 2017. Tr. 69-71. They discussed with Dr. Shi that OakmontScript was required to create an initial inventory and maintain records for at least two years. Tr. 71-72.
DI 3, DI 4, and DI 1 conducted an inspection of OakmontScript on February 19, 2019. Tr. 156-58. They discussed recordkeeping and the DIs explained that they would be conducting a controlled substance accountability audit. Tr. 159. Although the closing inventory for the accountability audit was good because “it tied out to zero,” there were issues with OakmontScript's recordkeeping, including a failure to take an initial inventory, which OakmontScript was unable to produce. Tr. 190, 736, 763. Specifically, during the February 19, 2019 inspection, OakmontScript informed DI 3 “that they had forgotten to take the initial inventory when they received the export registration.” Tr. 735-36. DI 3 discussed these issues with her group supervisor and her group supervisor asked her to return to conduct an expanded controlled substance accountability audit going back to December 5, 2017, when OakmontScript first received its DEA exporter registration. Tr. 192-93.
I find that OakmontScript failed to record an initial inventory for its exporter registration, which is a violation of 21 CFR 1304.11(b). This is also particularly concerning because OakmontScript has a distributor license and was aware of these requirements. Furthermore, both DI 1 and DI 2 had explained to Dr. Shi that an initial inventory was required once OakmontScript's exporter application was approved.
Accordingly, in review of the evidence of record, including stipulations of the parties, OSC Allegation 21.a is
The Government alleges that Factor Six is relevant to the public interest analysis regarding the Respondent's exporter COR. ALJ Ex. 1 at 7.
The Respondent's exporting of controlled substances prior to having an exporter COR, its exporting of controlled substances for which it did not have approved drug codes and its exporting to fill individual prescriptions do not fall under any of the first five factors that are to be considered in determining the public interest for an exporter and thus are appropriately addressed under Factor Six.
Additionally, as discussed in the portion of this Recommended Decision dealing with the Respondent's distributor registration, the lack of candor is an issue that falls within the category of “such other factors as may be relevant to and consistent with the public health and safety.”
The CSA requires that in order to export a controlled substance a person must be properly registered to do so. 21 U.S.C. 957(a) specifically states: “No person may . . . export from the United States any controlled substance . . . unless there is in effect with respect to such person a registration issued by the Attorney General under section 958 of this title . . .” Further, DEA regulations state that “[n]o person required to be registered shall engage in any activity for which registration is required until the application for registration is granted and a Certificate of Registration is issued by the Administrator to such person.” 21 CFR 1301.13(a). These requirements have been applied in DEA decisions.
The parties stipulated that the Respondent's exporter COR was first issued on December 5, 2017. Stipulation 2. Moreover, it is established by the Certification of Registration History for the Respondent's exporter registration that the COR number was assigned on December 5, 2017. Gov't Ex. 1B. Therefore, there is no dispute that the Respondent first had DEA authority to export controlled substances on December 5, 2017.
The testimony by both DI 3 and Dr. Shi, as well as the documentation
Based on the testimony and admitted exhibits, it is evident that this diazepam was exported on either May 18, 2017, or June 10, 2017. Regardless of which date the diazepam was actually shipped, both dates are approximately six to seven months before the Respondent's registration as an exporter was issued on December 5, 2017.
I therefore find that the Respondent exported this controlled substance when it was not properly registered to do so in violation of 21 U.S.C. 957(a) and 21 CFR 1312.21.
DI 3 testified that this Briviact was shipped on August 2, 2017. Tr. 440. The documentation that DI 3 received from the Respondent also indicates an export date of August 2, 2017. Gov't Ex. 12 at 7, 26 at 36, 27 at 2. Furthermore, correspondence from Dr. Shi states the shipping label was created on August 2, 2017. Gov't Ex. 20 at 8. Dr. Shi confirmed the August 2, 2017 date in her testimony at the hearing. Tr. 1313-14.
Based on the testimony and admitted exhibits, this Briviact was exported on August 2, 2017. This date is approximately four months before the Respondent's registration as an exporter was issued on December 5, 2017.
I therefore find that the Respondent exported this controlled substance when it was not properly registered to do so in violation of 21 U.S.C. 957(a) and 21 CFR 1312.21.
DI 3 testified that this Belviq was shipped on November 1, 2017. Tr. 459. The documentation that DI 3 received from the Respondent also indicates an export date of November 1, 2017. Gov't Ex. 12 at 3, 26 at 38-39, 27 at 2. In her testimony, Dr. Shi confirmed the November 1, 2017 date in the documentation she provided to the Government as reflected in Government Exhibits 12 and 27, but also testified it was an estimated date.
Based on the testimony and admitted exhibits, this Belviq was exported on November 1, 2017. This date is approximately one month before the Respondent's registration as an exporter was issued on December 5, 2017.
I therefore find that the Respondent exported this controlled substance when it was not properly registered to do so in violation of 21 U.S.C. 957(a) and 21 CFR 1312.21.
DI 3 testified that this Lyrica was shipped on November 20, 2017. Tr. 471. Some documentation that DI 3 received from the Respondent also indicates an export date of November 20, 2017. Gov't Ex. 12 at 9-10. Other documentation that DI 3 received from the Respondent provides a date of November 17, 2017 (Gov't Ex. 28 at 32), November 19, 2017 (Gov't Ex. 28 at 78), or November 21, 2017 (Gov't Ex. 27 at 2). Dr. Shi acknowledged the date on Government Exhibit 12, but stated that “[i]t's just the date we entered” before later agreeing that her employees enter the dates on which events actually occurred.
Based on the testimony and admitted exhibits, this Lyrica was exported sometime between November 17 and 21, 2017. November 21, 2017, is approximately two weeks before the Respondent's registration as an exporter was issued on December 5, 2017.
I therefore find that the Respondent exported this controlled substance when it was not properly registered to do so in violation of 21 U.S.C. 957(a) and 21 CFR 1312.21.
DI 3 testified that this Belviq was shipped on December 1, 2017. Tr. 484. The documentation that DI 3 received from the Respondent also indicates an export date of December 1, 2017. Gov't Ex. 12 at 3, 26 at 47, 27 at 2. Dr. Shi confirmed the December 1, 2017, shipping date for this Belviq in Government Exhibits 12 and 27 in her testimony at the hearing. Tr. 1351-52.
Based on the testimony and admitted exhibits, this Belviq was exported on December 1, 2017. This date is four days before the Respondent's registration as an exporter was issued on December 5, 2017. I therefore find that the Respondent exported this controlled substance when it was not properly registered to do so in violation of 21 U.S.C. 957(a) and 21 CFR 1312.21.
Faced with the fact that the Respondent exported controlled substances pursuant to the above-referenced invoices prior to being registered as an exporter, the Respondent makes the argument that it had applied for the registration, had been inspected by DEA, passed the security measures, and that the registration would be forthcoming at any time.
In
DEA has recognized that acting with a `good faith belief that [one is] properly registered with DEA . . . is a mitigating factor in determining the public interest,'
. . . DEA has recognized this defense in only two situations. The first is where a person had previously held a registration for the activity and believed it to be still valid pending an appeal of a final order of revocation.
Neither of the mitigating factors discussed in
Accordingly, in review of the evidence of record, including stipulations of the parties, OSC Allegations 7.a, 7.b, 7.c, 7.d, and 7.e are
In addition to the requirement in 21 U.S.C. 957 that a registrant have a registration to export controlled substances, the CSA also requires that a registrant shall not “export controlled substances other than those specified in the registration.” 21 U.S.C. 958(b). DEA has explained that “[t]he mechanism by which a controlled substance is specified in a registration is through the use of its Administration Controlled Substance Code Number.”
Both DI 1 and DI 3 explained the use of the drug codes to Dr. Shi and assisted her in having the appropriate drug codes associated with the Respondent's exporter registration. Tr. 86-89, 96-97, 100, 175-76, 183, 597. However, the Respondent later expande