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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 Energy Regulatory Commission, Department of Energy.
Final action.
The Federal Energy Regulatory Commission (Commission) approves the retirement of six Reliability Standards and their requirements proposed by the North American Electric Reliability Corporation, the Commission-certified Electric Reliability Organization.
This action is effective February 1, 2024.
1. Pursuant to section 215(d)(2) of the Federal Power Act (FPA),
2. Section 215 of the FPA provides that the Commission may certify an ERO, the purpose of which is to develop mandatory and enforceable Reliability Standards, subject to Commission review and approval.
3. On June 7, 2019, NERC submitted a petition proposing, among other things, the retirement of the MOD A Reliability Standards, in their entirety without replacement (NERC Petition). NERC explained that these requirements are administrative in nature or relate expressly to commercial or business practices and provide little or no reliability benefit.
4. On January 23, 2020, the Commission issued a NOPR proposing to approve the retirement of 74 of the 77 Reliability Standard requirements requested by NERC.
5. The Commission noted that NERC's proposed retirements “are largely consistent with the Commission-approved bases for retiring Reliability Standard requirements articulated in
6. The Commission received five sets of comments—two of which were specific to the proposed retirement of the MOD A Reliability Standards.
7. On September 17, 2020, the Commission issued Order No. 873,
8. In Order No. 676-J, the Commission revised its regulations to incorporate by reference, as mandatory enforceable requirements, the current version of NAESB's Standards for Business Practices and Communication Protocols for Public Utilities adopted by the Wholesale Electric Quadrant (WEQ) of NAESB, Version 003.3 of the NAESB WEQ Business Practice Standards (WEQ Version 003.3 Standards).
9. The first compliance filing concerned the cybersecurity and Parallel Flow Visualization standards included in Version 003.3. The Commission directed utilities to make the second compliance filing reflecting the remainder of the revisions in Version 003.3 12 months after implementation of the WEQ Version 003.2 Standards, or no earlier than October 27, 2022, with an implementation date no earlier than three months following compliance filings submission (no earlier than January 27, 2023), resulting in a 15-month implementation period.
10. Pursuant to section 215(d)(2) of the FPA,
11. Regarding WAPA's comments focused on the importance of ensuring stakeholders' ability to provide input.
12. The information collection requirements contained in this final action are subject to review by the Office of Management and Budget (OMB) under section 3507(d) of the Paperwork Reduction Act of 1995.
13. These MOD Standards are currently located in the FERC-725A (OMB Control No. 1902-0244) collection. The collection is currently approved by OMB and contains Reliability Standards MOD-0001-1a, MOD-004-1, MOD-008-1, MOD-028-2, MOD-029-2a and MOD-030-3 (the MOD A Reliability Standards), along with other Reliability Standards. In Docket No. RM19-17-001, the Commission approves the retirement of these six current OMB-approved MOD Reliability Standards and their associated requirements. The retirements will be coordinated with the effective dates for the successor NAESB business practice standards, which mirror the retired responsibilities from the MOD-A Reliability Standards.
14. Reliability Standards MOD-001-1a, MOD-004-1, MOD-008-1, MOD-028-2, MOD-029-2a, and MOD-030-3 are all currently approved within the FERC-725A information collection. The number of respondents below is based on an estimate of the NERC compliance registry for transmission service providers (TSP), transmission operators (TOP), transmission planners (TP), resource planners (RP), and balancing authorities (BA).
15. Interested persons may obtain information on the reporting requirements by contacting the Federal Energy Regulatory Commission, Office of the Executive Director, 888 First Street NE, Washington, DC 20426 [Attention: Ellen Brown, email:
16. Comments concerning the information collections and requirements approved for retirement in this final action and the associated burden estimates, should be sent to the Commission in this docket and may also be sent to the Office of Management and Budget, Office of Information and Regulatory Affairs [Attention: Desk Officer for the Federal Energy Regulatory Commission]. For security reasons, comments should be sent by email to OMB at the following email address:
17. The Commission is required to prepare an Environmental Assessment or an Environmental Impact Statement for any action that may have a significant adverse effect on the human environment.
18. The Regulatory Flexibility Act of 1980 (RFA)
19. The RFA mandates consideration of regulatory alternatives that accomplish the stated objectives of a rule and that minimize any significant economic impact on a substantial number of small entities. The Small Business Administration's Office of Size Standards develops the numerical definition of a small business.
20. This final action accepts the request of NERC, the Commission-certified ERO, to retire the MOD A Reliability Standards and recognizes that NAESB business practice standards will cover the obligations. This final action reduces paperwork burdens for both large and small business entities. The Commission estimates the total industry reduction in burden for all entities (large and small) to be 112,560 hours or 68.5 hours per response.
21. Based on the information above, the Commission certifies that the proposed reductions will not have a significant impact on a substantial number of small entities. Accordingly, no initial regulatory flexibility analysis is required. The Commission certifies that this final action will not have a significant economic impact on a substantial number of small entities.
22. In addition to publishing the full text of this document in the
23. From FERC's Home Page on the internet, this information is available on eLibrary. The full text of this document is available on eLibrary in PDF and Microsoft Word format for viewing, printing, and/or downloading. To access this document in eLibrary, type the docket number excluding the last three digits of this document in the docket number field.
24. User assistance is available for eLibrary and the FERC's website during normal business hours from FERC Online Support at 202-502-6652 (toll free at 1-866-208-3676) or email at
25. These regulations are effective February 1, 2024. The Commission has determined, with the concurrence of the Administrator of the Office of Information and Regulatory Affairs of OMB, that this rule is not a “major rule” as defined in section 351 of the Small Business Regulatory Enforcement Fairness Act of 1996.
By the Commission.
Bureau of the Fiscal Service, Treasury.
Final rule.
The Bureau of the Fiscal Service (Fiscal Service) of the Department of the Treasury (Treasury) is amending its regulations that govern the payment of checks drawn on the United States Treasury (Treasury checks). The amendments coincide with the development of Fiscal Service's enhanced check post payment processing system, which will provide Treasury check return information to financial institutions more quickly than today. Financial institutions will receive this information through their existing communication channels with the Federal Reserve Banks (FRBs), generally prior to the expiration of the time periods in which financial institutions must make Treasury check deposits available for withdrawal as prescribed by Regulation CC, Availability of Funds and Collection of Checks. Accordingly, Fiscal Service is amending its regulations so that, with certain exceptions, a financial institution will be liable if it pays a canceled Treasury check, also known as a payment over cancellation (POC), without waiting to receive the return information that would enable the financial institution to know the check has been canceled.
Effective December 1, 2023.
Gary Swasey, Director, Post Payment Division at (215) 816-8230 or
Currently, when either Fiscal Service or a payment certifying agency puts a “stop payment” (also known as a “check stop”) on a Treasury check to cancel it, there is a possibility that the canceled check may still be paid. Fiscal Service or an agency may put a “stop payment” on a check payment because the payee submitted a check claim (
Fiscal Service is developing enhancements to its post payment processing system that will result in Treasury check return information being made available to financial institutions sooner than is the case today. With Fiscal Service's current post payment processing system, several days often pass before Fiscal Service can provide information on Treasury check returns that the Federal Reserve Banks (FRBs) transmit to financial institutions through existing communication channels. The system enhancements will enable Fiscal Service to provide check return information to financial institutions through these existing channels within the time periods prescribed by Regulation CC, Availability of Funds and Collection of Checks (12 CFR part 229), for when a financial institution must make funds deposited by Treasury check available for withdrawal.
Under the current regulations at 31 CFR part 240, a financial institution generally is not liable for a POC if the institution has taken “reasonable efforts” to ensure the check is authentic.
In those instances where a financial institution has taken reasonable efforts but check return information for a POC on a properly presented check is not transmitted to the financial institution prior the funds availability timeframe specified in Regulation CC, the financial institution would not be liable for releasing the funds associated with the Treasury check. While Fiscal Service expects this circumstance to be uncommon, it understands that compliance with Regulation CC requires the release of the funds within certain timeframes, and thus under the final rule a financial institution will not be liable for a POC due to complying with Regulation CC. (Note, however, that this does not affect the presentment guarantees found in 31 CFR 240.4. As is currently the case, if Fiscal Service declines a check due to improper presentment and reverses the provisional credit, the presenting financial institution may still be liable for payment on the check regardless of Regulation CC's requirements.)
After enhancements to Treasury's post payment processing system have been implemented and the final rule's requirements become effective (no sooner than 30 days after publication of the final rule), the system and rule changes should greatly reduce payment issues involving Treasury checks and more closely align the treatment of canceled Treasury checks with industry practices for other canceled checks in the banking system. The changes will eliminate many POCs, because they will allow a certifying agency to place a “true stop” on a Treasury check. The system changes will also help reduce instances where a Treasury check (or an item purporting to be a Treasury check) may be charged back to the financial institution, because they will allow the financial institution to verify that the check is not counterfeit, that the amount has not been altered, that the check is not stale-dated, and that the check has not been previously negotiated. For these non-POC circumstances, financial institutions are already liable for accepting such instruments. While the final rule does not impact a financial institution's liability in these other circumstances, Fiscal Service's enhanced post payment processing
In addition to receiving check return information through existing channels, a financial institution may choose to obtain early notice regarding the validity and authenticity of Treasury checks by using the Fiscal Service's Treasury Check Verification System (TCVS). While financial institutions will not be required to use TCVS, the use of TCVS may allow financial institutions to catch canceled, duplicate, or other problematic checks at the time of presentment, as opposed to after presentment but before the financial institution makes deposited funds available for withdrawal. TCVS, in conjunction with the enhanced post payment system, will help financial institutions avoid accepting duplicate presentations, thus avoiding the associated liability. The enhancements to Treasury's post payment processing system will not eliminate acceptance of duplicate presentations entirely, but in those instances where the subsequent presentation of a Treasury check occurs after Treasury's records have been updated, TCVS will allow a financial institution to avoid liability by declining the previously negotiated Treasury check when presented again. TCVS will similarly be of assistance to financial institutions in identifying Treasury checks where the payment amount has been altered, as well as for counterfeit instruments purporting to be Treasury checks.
During the comment period, Fiscal Service received nine comments on the notice of proposed rulemaking (NPRM) that was published on February 1, 2023 (88 FR 6674), from individuals and from the banking industry. The industry commenters supported Fiscal Service's effort to combat check fraud and to reduce POCs. However, some commenters also expressed concerns with aspects of the NPRM. As many of these comments addressed the same or similar issues, below we respond to these comments in the following categories:
• Required Use of TCVS,
• Financial Institution Liability for POCs,
• Presentment to Non-Financial Institutions,
• Communicate Check Cancellation Information to Federal Reserve Banks, and
• Reduce the Number of Treasury Checks.
A majority of the comments expressed concerns over the proposed requirement to use TCVS to verify that a Treasury check has not been canceled for a financial institution to avoid liability for a POC. Issues raised related to the required use of TCVS included: concerns regarding what would happen if TCVS is out of service when a financial institution attempts to verify a Treasury check; the amount of time required for tellers to manually verify a Treasury check using TCVS; unavailability of TCVS when Treasury checks are deposited remotely or by ATM; and the expense and time for financial institutions to implement technological upgrades or alterations of their systems to integrate the use of TCVS.
The final rule addresses these concerns by removing the requirement that a financial institution use TCVS to verify that a Treasury check has not been canceled to avoid liability for a POC. Instead, to avoid liability for a POC, and in alignment with comments received, the final rule allows a financial institution to rely on the check return information that it already receives through the FRBs' established channels of communication. Fiscal Service's enhanced post payment processing system will enable the FRBs to provide check return information on a properly presented Treasury check to the financial institution within the timeframes prescribed by Regulation CC for making funds from a deposited Treasury check available for withdrawal. The financial institution will not be required to make changes to its check processing system to receive the check return information from the FRBs because the information will move through existing communication channels.
Although the use of TCVS is not required under the final rule, TCVS will still be available for financial institutions to voluntarily obtain information regarding the status of a Treasury check. In addition to giving financial institutions early notice of check cancellation information, TCVS may assist financial institutions in reducing the risk of liability for counterfeit instruments and duplicate presentations of Treasury checks.
Several commenters expressed concern over the shift in liability to financial institutions for POCs on Treasury checks. Some of these concerns were tied to issues arising from the requirement to use TCVS to avoid liability and, thus, have been resolved because the final rule does not contain such a requirement (see preceding section 2.A.). The approach under the final rule to avoid liability for a POC on a Treasury check instead relies on the FRBs' existing channels of communication for check return information. The onus is on Fiscal Service's post payment processing system to provide the check return information to the FRBs in an accelerated fashion, so that financial institutions may receive this information from the FRBs within the timeframes prescribed by Regulation CC for making funds deposited by Treasury check available for withdrawal.
However, other commenters expressed concerns regarding the shift in liability for POCs that were not related to the use of TCVS. Fiscal Service believes that because (1) the enhanced post payment system will make check return information available on an accelerated basis compared to today, and (2) financial institutions will receive information confirming that a Treasury check has been canceled through existing communication channels, it is not unreasonable for financial institutions to accept liability for POCs. Further, this shift in liability will bring the processing of Treasury checks more in alignment with the processing of checks generally, where the liability for releasing funds on a canceled non-Treasury check falls on the financial institution accepting the check. A financial institution may avoid this liability by not making the funds associated with a Treasury check available for withdrawal until the financial institution receives the check return information from an FRB, provided that it receives notice of a POC prior to the expiration of the Regulation CC funds availability time periods. Additionally, in those instances where the return information is unavailable for the financial institution to verify the status of a properly presented Treasury check before the financial institution is required to release the funds under Regulation CC, the financial institution will not be liable if the release of funds necessary to comply with Regulation CC results in a POC.
A few commenters raised the issue of how the proposed rule and its shift in liability for POCs would operate in conjunction with Treasury checks presented to businesses that cash checks that are not financial institutions, and the financial institutions that service them. One commenter pointed out that the NPRM did not address whether the agreements between these businesses and financial institutions could continue to address how the liability for POCs would be assigned. The final rule is silent on that issue and is not intended to alter the ability of entities entering into such agreements to assign liability for POCs or otherwise declined checks. To the extent that such assignment of liability is allowable by other applicable laws and rules, the final rule does not affect these entities' ability to negotiate such agreements. However, such agreements will have no impact on financial institutions' liability due to POCs on Treasury checks with regard to the Federal Government, as described by the final rule.
To the extent that commenters identified concerns with the unavailability of TCVS in situations where businesses that are not financial institutions cash Treasury checks, the final rule addresses those concerns by removing the requirement to use TCVS to avoid liability for a POC on a Treasury check.
A few commenters suggested that a better method for addressing POCs, rather than require the use of TCVS by financial institutions, would be to communicate the check cancellation information to the FRBs' check processing system and have the system communicate this information to financial institutions with the FRBs' check return information. These commenters pointed out this approach would not require financial institutions to modify their check processing systems to accommodate the required use of TCVS, would work with the financial institutions' current systems, and would entail little or no cost to the financial institutions.
Consistent with these comments, under the final rule, financial institutions will continue to receive check return information from the FRB check processing system's existing channels of communication, as they currently do. The enhancements to Fiscal Service's post payment processing system will enable Fiscal Service to communicate check information to the FRBs more quickly, including the information that a Treasury check has been canceled. Financial institutions do not need to make any changes to continue receiving this information from the FRB's check processing system; the information will simply be available more rapidly through the channels already in use.
Two commenters suggested that the FRBs should provide this check cancellation information to the financial institution of first deposit, rather than the presenting financial institution. This suggestion is out of scope and nonviable at this time because of the changes that would be required of the FRBs' check processing system (and possibly of the financial institutions receiving the cancellation information). However, Fiscal Service is receptive to considering this possibility at a later date. In the meantime, although not required, financial institutions of first deposit can use TCVS to help reduce their risk of liability for POCs prior to receiving the check return information through existing communication channels.
One commenter pointed out that an effective method of reducing POCs is to reduce the number of Treasury checks issued in the first place and that Fiscal Service should educate payment-issuing agencies regarding the benefits of electronic payments. Fiscal Service agrees that reducing the number of checks issued for Federal payments is a worthy objective. Fiscal Service has long worked with Federal agencies to reduce the number of checks they issue and to make payments electronically. For more than a decade, the number of Treasury checks issued each year has generally declined, from approximately 170 million in 2012, for example, to approximately 45 million in fiscal year 2023.
Despite the effort to reduce the number of Treasury checks issued, Treasury checks will continue to be issued for the foreseeable future (although in reduced numbers). Additionally, although 31 U.S.C. 3332 requires most Federal payments to be made electronically, this provision does not apply to payments made pursuant to the Internal Revenue Code. Within these limitations, Fiscal Service fully supports and actively works to promote the continued decrease in the number of Treasury checks issued each year.
Part 240 currently includes a presentment guarantee, made by the guarantor of a check presented to Treasury for payment, that the guarantor has made all reasonable efforts to ensure that the check is an authentic Treasury check and not a counterfeit check. The existing definition of “reasonable efforts” focuses on the watermark or other security features of a security check, to ensure that the Treasury check is authentic and not counterfeit. The final rule amends the definition of “reasonable efforts” to add the requirement of verifying not only the Treasury check's authenticity, but also the check's validity, by requiring a financial institution to receive the check return information before making funds from a Treasury check available for withdrawal to ensure that the check has not been canceled. An exception to this requirement will apply if the check's return information is not transmitted to the financial institution prior the appropriate funds availability timeframe specified in Regulation CC, and the financial institution must make the funds available for withdrawal in order to remain in compliance with Regulation CC. In such cases, the financial institution would not be held liable for releasing the funds associated with the Treasury check if it results in a POC (unless the financial institution is otherwise subject to liability under the presentment guarantees found in § 240.4).
A corresponding amendment to the presentment guarantees found in current regulations would change the guarantee of Treasury check's authenticity to include a presentment guarantee regarding the check's validity as well, as described below.
Part 240 had not previously included a definition of “validity.” The final rule adds a definition of “validity” or “valid check” as proposed.
The definition describes a valid Treasury check as a payable instrument (
Part 240 had not previously defined “cancellation” or “canceled” with regard to a Treasury check. The final rule adds a definition of “cancellation” or “canceled” as proposed.
This definition describes a canceled Treasury check as one that was once a valid and negotiable instrument, but is no longer due to a reason other than the Treasury check's negotiation. A Treasury check may be canceled because it has limited payability (
The regulations had not previously defined a “stop payment” with regard to a Treasury check. The final rule adds a definition of this term as proposed.
This definition describes the situation where Treasury or the certifying agency has indicated in its systems that an authentic Treasury check should not be paid. Reasons for issuing a stop payment on a Treasury check include that the Treasury check has been reported lost or stolen, it has been issued to a deceased payee, or it was discovered to be improper. Once a stop payment has been placed on a Treasury check, the check has been canceled and is no longer a valid Treasury check (even though it is an authentic Treasury check).
Current Treasury regulations require that an FRB cash a Treasury check presented to it, except in certain circumstances where the FRB must instead refuse to pay the Treasury check. The check must be refused if (1) the check bears a material defect or alteration, (2) the check was presented more than one year later than the check's date of issuance, or (3) the FRB has been notified by Treasury, pursuant to Treasury regulations, that a check was issued to a deceased payee. As proposed, the final rule adds a fourth circumstance in which an FRB must refuse to pay a Treasury check: when Treasury has notified the FRB that a Treasury check is not valid.
As noted above, under this definition, a Treasury check is invalid if the Treasury check is counterfeit, previously negotiated, or canceled.
A corresponding amendment to the regulation regarding Treasury's right of first refusal is the instruction for Treasury to decline payment of a Treasury check when Treasury is being requested to make payment on a check that is not valid.
The final rule amends the definitions section of part 240, found at 31 CFR 240.2, by removing the lettering within that section (the list letters (a), (b), (c), etc.), and simply listing the terms in alphabetical order within the section. This comports with the Office of the Federal Register's recommendation for a list of definitions found in regulations, as stated in section 2-13 of the Document Drafting Handbook. This change also removes the need to re-letter the list of definitions when new definitions are added to the list.
For the reasons set forth above, the final rule amends § 240.2 to revise the definition of “reasonable efforts”; add the definition of “cancellation” or “canceled”; add the definition of “stop payment” or “check stop” or “stop”; and add the definition of “validity” or “valid check.” Except for these four definitions, none of the definitions in § 240.2 are being substantively changed. These other definitions are listed herein only to reflect the removal of the list lettering schema and a few minor changes made for clarity.
The final rule amends the presentment guarantees to include a guarantee that the guarantor has made reasonable efforts to ensure that the check is an authentic Treasury check and that it is valid at the time of acceptance.
The final rule amends the reasons that Treasury will decline a Treasury check upon first examination to include the fact that the check has been canceled, in addition to when the check has already been paid.
The final rule amends the reasons that an FRB must refuse payment of a Treasury check to include circumstances where the FRB has been notified that the Treasury check has been canceled or is otherwise not valid.
The rule does not meet the criteria for a “significant regulatory action” as defined in Executive Order 12866, as amended. Therefore, the regulatory review procedures contained therein do not apply.
The Regulatory Flexibility Act, 5 U.S.C. 601-612, requires that agencies review proposed and final rules for their potential economic impact on small entities, including small businesses, and identify alternatives that may reduce such impact, unless the agency certifies that the rule will not, if promulgated, have a significant economic impact on a substantial number of small entities. In the NPRM published on February 1, 2023, Fiscal Service certified that the final rule will not have a significant economic impact on a substantial number of small entities.
Fiscal Service received some comments from the entities in the banking industry stating that requiring financial institutions to use TCVS prior to negotiating a Treasury check would place burdens on these entities by necessitating changes and upgrades to their check processing systems. In the final rule, the requirement in the NPRM to use TCVS has been eliminated. Instead, financial institutions will receive check return information for a properly presented Treasury check from the FRBs, through existing communication channels. Due to enhancements to Fiscal Service's post payment processing system, this check return information typically will be provided to financial institutions within the time periods for making funds available prescribed by Regulation CC. In the uncommon instances where a financial institution does not receive the return information within the appropriate time period, and must release the funds to comply with Regulation CC, the financial institution will not be held liable if that results in a POC (unless the financial institution would otherwise be subject to liability due to the presentment guarantees in § 240.4).
Section 202 of the Unfunded Mandates Reform Act of 1995, 2 U.S.C. 1532 (Unfunded Mandates Act), requires that an agency prepare a budgetary impact statement before promulgating any rule likely to result in a Federal mandate that may result in the expenditure by state, local, and tribal governments, in the aggregate, or by the
Authenticity, Canceled, Cancellation, Check, Check return, Check return information, Check stop, Declination, Financial institutions, Presentment, Presentment guarantees, Processing, Reasonable efforts, Stop, Treasury check, Valid check, Validity, Verification.
For the reasons set out in the preamble, we amend 31 CFR part 240 as follows:
5 U.S.C. 301; 12 U.S.C. 391; 31 U.S.C. 321, 3327, 3328, 3331, 3334, 3343, 3711, 3712, 3716, 3717; 332 U.S. 234 (1947); 318 U.S. 363 (1943).
(1) Any insured bank as defined in section 3 of the Federal Deposit Insurance Act (12 U.S.C. 1813) or any bank which is eligible to make application to become an insured bank under section 5 of such Act (12 U.S.C. 1815);
(2) Any mutual savings bank as defined in section 3 of the Federal Deposit Insurance Act (12 U.S.C. 1813) or any bank which is eligible to make application to become an insured bank under section 5 of such Act (12 U.S.C. 1815);
(3) Any savings bank as defined in section 3 of the Federal Deposit Insurance Act (12 U.S.C. 1813) or any bank which is eligible to make application to become an insured bank under section 5 of such Act (12 U.S.C. 1815);
(4) Any insured credit union as defined in section 101 of the Federal Credit Union Act (12 U.S.C. 1752) or any credit union which is eligible to make application to become an insured credit union under section 201 of such Act (12 U.S.C. 1781);
(5) Any savings association as defined in section 3 of the Federal Deposit Insurance Act (12 U.S.C. 1813) which is an insured depositary institution (as defined in such Act) (12 U.S.C. 1811
(6) Any financial institution outside of the United States if it has been designated by the Secretary of the Treasury as a depositary of public money and has been permitted to charge checks to the General Account of the United States Treasury.
(1) A disbursing official; or
(2) A person authorized to sign on behalf of a disbursing official.
(1) An indorsement of the payee's name by another person who is not authorized to sign for the payee; or
(2) An indorsement of the payee's name made by another person who has been authorized by the payee, but who has not indorsed the check in accordance with §§ 240.4 and 240.13 through 240.17; or
(3) An indorsement added by a financial institution where the financial institution had no authority to supply the indorsement; or
(4) A check bearing an altered payee name that is indorsed using the payee name as altered.
(1) The counterfeiting of a check; or
(2) Any physical change on a check, including, but not limited to, a change in the amount, date, payee name, or other identifying information printed on the front or back of the check (but not including a forged or unauthorized drawer's signature); or
(3) Any forged or unauthorized indorsement appearing on the back of the check.
(1) The reclamation date;
(2) The reclamation number;
(3) Check identifying information; and
(4) The balance due, including interest, penalties, and administrative costs.
(1) A financial institution which, either directly or through a correspondent banking relationship, presents checks to and receives provisional credit from a Federal Reserve Bank; or
(2) A depositary which is authorized to charge checks directly to Treasury's General Account and present them to Treasury for payment through a designated Federal Reserve Bank.
(1) Confirming the validity of a check by obtaining the check return information prior to making the funds from the check available for withdrawal (except when the check return information has not been provided within the applicable timeframe prescribed by Regulation CC, and making funds available for withdrawal is necessary to comply with Regulation CC; however, this exception does not apply if the presenting bank is otherwise subject to liability due to the presentment guarantees found in § 240.4); and
(2) Confirming the authenticity of the check such as by verifying the existence of the Treasury watermark on an original check.
(3) Acceptance of a check by electronic image or other non-physical means does not impact reasonable efforts requirements. Based upon the facts at hand, including whether a check is an original check, a substitute check, or an electronic check, reasonable efforts may require the verification of other security features.
(d)
(c) * * *
(3) Treasury has already received presentment of a substitute check, electronic check, or original check relating to the check being presented, such that Treasury is being requested to make payment on a check it has already paid; or Treasury is being requested to make payment on a check that is not valid due to a stop payment or other cancellation.
(a) * * *
(1) * * *
(ii) A check was issued more than one year prior to the date of presentment;
(iii) The Federal Reservice Bank has been notified by Treasury, in accordance with § 240.15(c), that a check was issued to a deceased payee; or
(iv) The Federal Reserve Bank has been notified by Treasury that a check is not valid.
Bureau of Land Management, Interior.
Correcting amendment.
On June 16, 2023, the Bureau of Land Management (BLM) published a final rule that codified Onshore Order 1—Approval of Operations; Onshore Order 2—Drilling Operations on Federal and Indian Oil and Gas Leases; Onshore Order 6—Hydrogen Sulfide Operations; and Onshore Order 7—Disposal of Produced Water into the Code of Federal Regulations (CFR). This action corrects two cross references in that regulation.
Effective on November 1, 2023.
You may send inquiries or suggestions to Director (630), Bureau of Land Management, 1849 C St. NW, Room 5646, Washington, DC 20240; Attention: RIN 1004-AE90.
Yvette Fields, Chief, Division of Fluid Minerals, telephone: 240-712-8358, email:
The final codification rule (June 16, 2023, 88 FR 39514), placed the four Onshore Orders into the CFR without making any substantive changes to their content. The only changes made to the four Onshore Orders were related to formatting, such as adding new section and paragraph designations, so that the Orders conform to the Office of the Federal Register's Document Drafting Handbook requirements. Since the four Onshore Orders were duly promulgated through prior notice-and-comment rulemakings, and the final rule did not change them, the BLM codified the orders in the CFR as a final rule without any further public comment.
The technical amendment that is the subject of this correction is prompted by the inclusion of two incorrect cross references in the final codification rule. During the process of preparing the final rule for publication and updating cross references throughout the document, the BLM inadvertently included incorrect cross references in a portion of the final rule that pertain to blowout preventer testing requirements. These requirements are found at 43 CFR 3172.6. These testing requirements have been in effect since 1988.
Administrative practice and procedure, Disposal of produced water, Drilling operations, Flaring, Government contracts, Hydrogen sulfide operations, Indians-lands, Immediate assessments, Mineral royalties, Oil and gas exploration, Oil and gas measurement, Public lands—mineral resources, Reporting and record keeping requirements, Royalty-free use, Venting.
Accordingly, 43 CFR part 3170 is corrected by making the following correcting amendments:
25 U.S.C. 396d and 2107; 30 U.S.C. 189, 306, 359, and 1751; and 43 U.S.C. 1732(b), 1733, and 1740.
(b) * * *
(9) * * *
(iv) As a minimum, the test in paragraphs (b)(9)(ii) and (iii) of this section shall be performed:
(xi) All of the tests described in paragraphs (b)(9)(ii) through (x) of this section and/or drills shall be recorded in the drilling log.
Fish and Wildlife Service, Interior.
Final rule.
We, the U.S. Fish and Wildlife Service (Service), are reclassifying
This rule is effective December 1, 2023.
The proposed rule, this final rule, and supporting documents are available at
Edwin Muñiz, Field Supervisor, U.S. Fish and Wildlife Service, Caribbean Ecological Services Field Office, P.O. Box 491, Boquerón, PR 00622; email:
We have determined that
Because we are reclassifying
Please refer to the June 23, 2022, proposed rule to reclassify
In accordance with our joint policy on peer review published in the
In the preamble of the June 23, 2022, proposed rule (87 FR 37476 at p. 37492), we describe our intention to propose to include all of the general exceptions to the prohibition against removing and reducing to possession, as set forth in 50 CFR 17.61, in the 4(d) rule for
In addition, in this final rule, we make minor, nonsubstantive editorial or stylistic changes and corrections to the June 23, 2022, proposed rule (87 FR 37476).
In the proposed rule published on June 23, 2022 (87 FR 37476), we requested that all interested parties submit written comments on the proposal by August 22, 2022. We also contacted appropriate Federal and State agencies, scientific experts and organizations, and other interested parties and invited them to comment on the proposal. Newspaper notices announcing the proposed rule and inviting general public comment were published in Spanish and English in the Primera Hora newspaper. We did not receive any requests for a public hearing or any public comments on the proposed rule.
As discussed in Peer Review, above, we received comments from one peer reviewer on the proposed rule. We reviewed the peer reviewer's comments for substantive issues and new information regarding the information contained in the proposed rule. The peer reviewer generally concurred with our methods and conclusions and provided additional information, clarifications, and suggestions to improve the final rule. The peer reviewer's comments are incorporated into this final rule as appropriate.
• On Anegada Island,
• On Anegada Island, the population estimate is not definitive, but described as decreased from historical. Where
A thorough review of the taxonomy, life history, ecology, and overall viability of
Although a large number of seedlings (
Little information is available regarding
When listed,
At the time of listing and in the subsequent 5-year status reviews, occurrences of
We now identify three natural populations of
Since the time of listing and the recovery plan development, targeted surveys have provided new abundance and distribution information and incidental observations (see table 1, below) (Service 2007 and 2017, unpublished data). The most recent survey information (see table 2, below) may underestimate population abundance and spatial extent as it did not include three natural localities due to time constraints. Because changes in the habitat have not been observed in the three localities not surveyed, we expect the abundance (number) and spatial extent (hectares (ha)) to be similar to the previous assessments. Therefore, the information from these three localities is unlikely to substantially change the estimates of abundance and extent of occupied area for the population. The increase in the number of localities recorded in Puerto Rico reflects additional survey efforts since the time of listing, while the increase in the number of individuals likely reflects the species' seasonal reproductive response to rain events and timing of surveys (Service 2018b, p. 3).
In the Puerto Rico population, we are aware of 10 natural localities and 1 introduced locality; 8 natural localities occur in the GCF, and 3 are on private properties (Ballena Beach, Cerro Toro, and Monte de la Ventana, which extends into the GCF) (see table 2, below). We have identified additional potentially suitable habitat for the species, including appropriate vegetation structure and presence of exposed limestone, in aerial images of the GCF. However, this habitat has not been quantified or surveyed, and it is unknown if the species occurs there (Service 2018b, p. 8).
On Saba Island, the best available information indicates the species occurs in several localities along the road between The Bottom and Windward Side towns in the southern section of the island (Rojer 1997, p. 19). No current population estimate is available for Saba Island, and the 1997 assessment does not include a population estimate. On Anegada Island, surveys for
Throughout its range in Puerto Rico,
On Saba Island, the best available information indicates the species occurs on Gile's cherty sandy loam soil found between The Bottom and Windward Side towns. This arid section of the island is located in the south portion of Saba Island (Rojer 1997, p. 19; Freitas
Section 4(f) of the Act directs us to develop and implement recovery plans for the conservation and survival of endangered and threatened species unless we determine that such a plan will not promote the conservation of the species. Under section 4(f)(1)(B)(ii), recovery plans must, to the maximum extent practicable, include objective, measurable criteria which, when met, would result in a determination, in accordance with the provisions of section 4 of the Act, that the species be removed from the Lists of Endangered and Threatened Wildlife and Plants.
Recovery plans provide a roadmap for us and our partners on methods of enhancing conservation and minimizing threats to listed species, as well as measurable criteria against which to evaluate progress towards recovery and assess the species' likely future condition. However, they are not regulatory documents and do not substitute for the determinations and promulgation of regulations required under section 4(a)(1) of the Act. A decision to revise the status of a species, or to delist a species, is ultimately based on an analysis of the best scientific and commercial data available to determine whether a species is no longer an endangered species or a threatened species, regardless of whether that information differs from the recovery plan.
There are many paths to accomplishing recovery of a species, and recovery may be achieved without all criteria being fully met. For example, one or more criteria may be exceeded while other criteria may not yet be accomplished. In that instance, we may determine that the threats are minimized sufficiently and that the species is robust enough that it no longer meets the Act's definition of an endangered species or threatened species. In other cases, we may discover new recovery opportunities after having finalized the recovery plan. Parties seeking to conserve the species may use these opportunities instead of methods identified in the recovery plan. Likewise, we may learn new information about the species after we finalize the recovery plan. The new information may change the extent to which existing criteria are appropriate for identifying recovery of the species. The recovery of a species is a dynamic
The initial recovery plan does not provide delisting criteria; however, the revised recovery plan provides three criteria for delisting
Criterion 1 states that threat reduction and management activities have been implemented to a degree that the species will remain viable into the foreseeable future. Eighty-nine percent of the currently known
Evidence of fire has been recorded on or adjacent to two
These threats of fire, development, nonnative and invasive species, and road and trail maintenance, coupled with competition with other plant species for specific habitat requirements such as holes and cracks for seed germination, and observed lack of dispersal mechanisms, reduce the species' ability to colonize other areas. Therefore, we determined that, while threat reduction and management activities at GCF have been implemented and have improved the species' viability, they have not been implemented or improved viability to a degree that the species will maintain viability into the foreseeable future. Thus, we conclude that this criterion has been partially met.
Criterion 2 states that existing natural populations of
Based on the uncertainty of population estimates and the lack of evidence of expansion into suitable habitat, we determined that a stable or increasing trend, as evidenced by natural recruitment and multiple age classes, has been met in Puerto Rico, but not on Saba or Anegada Islands. Thus, we conclude that this criterion has been partially met.
Criterion 3 states that at least three new populations of
Section 4 of the Act (16 U.S.C. 1533) and the implementing regulations in title 50 of the Code of Federal Regulations set forth the procedures for determining whether a species is an endangered species or a threatened species, issuing protective regulations for threatened species, and designating critical habitat for endangered and threatened species. In 2019, jointly with the National Marine Fisheries Service, the Service issued a final rule that revised the regulations in 50 CFR part 424 regarding how we add, remove, and reclassify endangered and threatened species and the criteria for designating listed species' critical habitat (84 FR 45020; August 27, 2019). On the same day, the Service also issued final regulations that, for species listed as threatened species after September 26, 2019, eliminated the Service's general protective regulations automatically applying to threatened species the prohibitions that section 9 of the Act applies to endangered species (84 FR 44753; August 27, 2019).
The Act defines an “endangered species” as a species that is in danger of extinction throughout all or a significant portion of its range, and a “threatened species” as a species that is likely to become an endangered species within the foreseeable future throughout all or a significant portion of its range. The Act requires that we determine whether any species is an endangered species or a threatened species because of any of the following factors:
(A) The present or threatened destruction, modification, or curtailment of its habitat or range;
(B) Overutilization for commercial, recreational, scientific, or educational purposes;
(C) Disease or predation;
(D) The inadequacy of existing regulatory mechanisms; or
(E) Other natural or manmade factors affecting its continued existence.
These factors represent broad categories of natural or human-caused actions or conditions that could have an effect on a species' continued existence. In evaluating these actions and conditions, we look for those that may have a negative effect on individuals of the species, as well as other actions or conditions that may ameliorate any negative effects or may have positive effects. We consider these same five factors in downlisting a species from endangered to threatened.
We use the term “threat” to refer in general to actions or conditions that are known to or are reasonably likely to negatively affect individuals of a species. The term “threat” includes actions or conditions that have a direct impact on individuals (direct impacts), as well as those that affect individuals through alteration of their habitat or required resources (stressors). The term “threat” may encompass—either together or separately—the source of the action or condition or the action or condition itself.
However, the mere identification of any threat(s) does not necessarily mean that the species meets the statutory definition of an “endangered species” or a “threatened species.” In determining whether a species meets either definition, we must evaluate all identified threats by considering the species' expected response by and the effects of the threats—in light of those actions and conditions that will ameliorate the threats—on an individual, population, and species level. We evaluate each threat and its expected effects on the species, then analyze the cumulative effect of all of the threats on the species as a whole. We also consider the cumulative effect of the threats in light of those actions and conditions that will have positive effects on the species—such as any existing regulatory mechanisms or conservation efforts. The Secretary of the Interior (Secretary) determines whether the species meets the definition of an “endangered species” or a “threatened species” only after conducting this cumulative analysis and describing the expected effect on the species now and in the foreseeable future.
The Act does not define the term “foreseeable future,” which appears in the statutory definition of “threatened species.” Our implementing regulations at 50 CFR 424.11(d) set forth a framework for evaluating the foreseeable future on a case-by-case basis. The term “foreseeable future” extends only so far into the future as we can reasonably determine that both the future threats and the species' responses to those threats are likely. In other words, the foreseeable future is the period of time in which we can make reliable predictions. “Reliable” does not mean “certain”; it means sufficient to provide a reasonable degree of confidence in the prediction. Thus, a prediction is reliable if it is reasonable to depend on it when making decisions.
It is not always possible or necessary to define foreseeable future as a particular number of years. Analysis of the foreseeable future uses the best scientific and commercial data available and should consider the timeframes applicable to the relevant threats and to the species' likely responses to those threats in view of its life-history characteristics. Data that are typically relevant to assessing the species' biological response include species-specific factors such as lifespan, reproductive rates or productivity, certain behaviors, and other demographic factors.
To assess
In this discussion, we review the biological condition of the species and its resources, and the threats that influence the species' current and future condition, in order to assess the species' overall viability and the risks to that viability. In addition, the 5-year reviews (Service 2011, entire; Service 2018a, entire) and our proposed rule (87 FR 37476; June 23, 2022) document our comprehensive biological status review for the species, including an assessment of the potential threats to the species.
The following is a summary of these status reviews and the best available information gathered since that time that have informed this decision. For additional information and details regarding the current, ongoing, and future threats to the species, see the June 23, 2022, proposed rule (87 FR 37476).
Habitat destruction and modification were identified as factors affecting the continued existence of
Currently, in Puerto Rico,
The largest known
Nonnative grass encroachment along trails follows a similar pattern to encroachment following fire and is described below. The Anegada Island population occurs adjacent to two trails or roads, and the species occurs along roads and trails in Puerto Rico. However, we expect that the effects of road and trail maintenance on the
Fires are not a natural event in the subtropical dry forests in Puerto Rico, and the native vegetation in the Caribbean is not adapted to this type of disturbance (Brandeis and Woodall 2008, p. 557; Santiago-García et al. 2008, p. 604). Human-caused fires were identified as a threat to the species when listed (59 FR 46715; September 9, 1994) and continue to occur throughout
Fire affects
Fires destroy or reduce native vegetation through direct impacts to individuals and to the seedbank (which is not fire-adapted) (Wolfe 2009, p. 28). Fires reduce or eliminate
Fire negatively impacts
Caribbean dry forests generally have seedbanks with low numbers and variety of species, and forest regeneration in areas disturbed through mechanical vegetation removal or through burning is largely dependent on propagules or seeds from nearby habitats (Wolfe 2009, p. 28). Nonnative species typically become established more quickly and may have less specific habitat or life-history requirements than native species. When nonnative species become established in a disturbed habitat, they outcompete native species for resources, including space, nutrients, water, and sunlight. The impacts of nonnative, invasive species are second only to habitat destruction and modification and are among the greatest threats to the persistence of
In areas where
One
The Ballena beach locality has been subject to development pressure in the past with proposals for the development of a hotel in that area. Although this hotel development project has not been constructed, it may be pursued in the future.
On Anegada and Saba Islands,
In summary, impacts associated with habitat destruction and modification due to vegetation clearance for maintenance and improvement activities of roads and trails, urbanization and tourism development, human-caused fires, and encroachment of nonnative plant species have been documented as current and ongoing threats to
At the time of listing, we identified the species' limited distribution (
Small population size can exacerbate other threats acting on the species. Populations that are small, isolated by habitat loss or fragmentation, or impacted by other factors are more vulnerable to extirpation by natural, randomly occurring events (such as predation or stochastic weather events), and to genetic effects that plague small populations, collectively known as small population effects (Purvis et al. 2000, p. 1947). These effects can include genetic drift, founder effects (over time, an increasing percentage of the population inheriting a narrow range of traits), and genetic bottlenecks leading to increasingly lower genetic diversity, with consequent negative effects on adaptive capacity and reproductive success (Keller and Waller 2002, p. 235).
Nine natural localities on Puerto Rico are smaller localities with varying degrees of connectivity and cross-pollination between localities; in contrast, only one natural locality, the Mesetas trail locality in GCF, has a high number of individuals and connectivity. The best available information for Anegada and Saba Islands indicates that these populations are currently small (2,500 on Anegada Island and unknown abundance on Saba Island) and in a few localities with limited distribution.
The Intergovernmental Panel on Climate Change (IPCC) concluded that evidence of warming of the climate system is unequivocal (IPCC 2014, pp. 2, 40). Observed effects associated with climate change include widespread changes in precipitation amounts, increased extreme weather events including droughts, heavy precipitation, heat waves, more intense tropical cyclones, and an increase in sea level (IPCC 2014, pp. 40-44). Rather than assessing climate change as a single threat in and of itself, we examined the potential consequences to the species and its habitat that arise from changes in environmental conditions associated with various aspects of climate change (temperature, precipitation, and sea level rise). Vulnerability to climate change impacts can be defined as a function of sensitivity, exposure, and adaptive capacity of the species to those changes (IPCC 2007, pp. 6, 21; Glick and Stein 2010, p. 19).
The IPCC-modelled scenarios for the Caribbean islands predict precipitation declines, sea level rise, stronger and more frequent extreme weather events, and temperature increases by 2050 (Penn 2010, p. 45; Khalyani et al. 2016, p. 265; Gould et al. 2018, p. 813; Strauss and Kulp 2018, p. 3; U.S. Global Change Research Program (USGCRP) 2018, p. 136). We examined a downscaled model for Puerto Rico and the British Virgin Islands based on global emissions scenarios from the Climate Model Intercomparison Project (CMIP3) dataset. The more current CMIP5 dataset was not available for the species' range at the time of analysis. The Special Report on Emissions (SRES) scenarios using the CMIP3 dataset are generally comparable to the more recent representative concentration pathway (RCP) scenarios from RCP4.5 (SRES B1) to RCP8.5 (SRES A2) (Lorde 2011, entire; IPCC 2014, p. 57; Khalyani et al. 2016, pp. 267, 279-280). Under both scenarios, emissions increase, precipitation declines, and temperature and total dry days increase, resulting in extreme drought conditions that convert subtropical dry forest into dry and very dry forest (Khalyani et al. 2016, p. 280).
Modeling shows dramatic changes to Puerto Rico through 2100; however, the divergence in these projections increases after mid-century (Khalyani et al. 2016, p. 275). By 2050, Puerto Rico is predicted to be subject to a decrease in rainfall, along with increased drought intensity (Khalyani et al. 2016 p. 265; USGCRP 2018, p. 136). As precipitation decreases, influenced by warming, it will tend to accelerate the hydrological cycles, resulting in wet and dry extremes (Cashman et al. 2010, pp. 1, 51, 53; Jennings et al. 2014, pp. 1, 5-6). A reduction in precipitation in the subtropical dry forests, where rain events are already limited, will affect
The IPCC global models and scenarios analyzed for the downscaled models apply to the Caribbean islands. Downscaled general circulation models predict dramatic shifts in the life zones of Puerto Rico with potential loss of subtropical rain, moist, and wet forest, and with the appearance of tropical dry and very dry forests anticipated (Khalyani et al. 2016, p. 275). Some species may move to higher elevations in response to this shift in life zones; however, the extent of a species' ability to redistribute will depend on its dispersal capability and forest connectivity (Khalyani et al. 2019, p. 11). Due to
Sea level rise is another expected effect of climate change that may affect coastal communities and habitat in the Caribbean islands (Penn 2010, entire; Lorde 2011, entire; Strauss and Kulp 2018, p. 1). Integrated sea level rise projection and flood risk analysis
In summary, other natural and human-caused factors, such as the limited distribution of the three known natural populations and the effects of climate change (
In the final listing rule (59 FR 46715; September 9, 1994), we identified the inadequacy of existing regulatory mechanisms as one of the factors affecting the continued existence of
On Anegada Island, various conservation and education efforts are taking place for the protection of rare plant and animal species (Gardner et al. 2008, entire; IRF 2013, p. 29). However, we are unaware of any formal regulatory mechanism that protects
We do not expect this species to be removed from legal protection by the Commonwealth when it is reclassified as a threatened species under the Act. This plant is now more abundant, is widely distributed, and largely occurs within conserved lands. Despite the existing regulatory mechanisms and conservation efforts, the threats discussed above are still affecting the species to the extent that it does not meet the criteria for delisting. However, additional opportunities exist to engage the public and provide information about
We have carefully assessed the best scientific and commercial information available regarding the threats that are currently impacting and expected to impact
We evaluated the biological status of this species, both currently and into the future, considering the species' viability as characterized by its resiliency, redundancy, and representation.
For
We broadly defined categories of resiliency for
Currently, three
The short time it takes
The species' viability is also affected by its ability to adapt to changing environmental conditions. We have no information on the genetic variability of
The ability of the species to adapt is also a function of the level of gene flow among populations. The three
Lastly, the species' viability depends on its ability to withstand catastrophic events, which is a function of the resiliency, number, and distribution of
In summary, the current abundance of
Section 4 of the Act (16 U.S.C. 1533) and its implementing regulations (50 CFR part 424) set forth the procedures for determining whether a species meets the definition of an endangered species or threatened species. The Act defines an “endangered species” as a species that is in danger of extinction throughout all or a significant portion of its range and a “threatened species” as a species that is likely to become an endangered species within the foreseeable future throughout all or a significant portion of its range. The Act requires that we determine whether a species meets the definition of endangered species or threatened species based on one or more of the following factors: (A) The present or threatened destruction, modification, or curtailment of its habitat or range; (B) overutilization for commercial, recreational, scientific, or educational purposes; (C) disease or predation; (D) the inadequacy of existing regulatory mechanisms; or (E) other natural or manmade factors affecting its continued existence.
After evaluating threats to the species and assessing the cumulative effect of the threats under the Act's section 4(a)(1) factors, we have determined that
The remaining 11 percent of individuals on Puerto Rico and individuals on Saba and Anegada Islands occur on private lands and are at risk due to habitat destruction and modification from wind farm projects, urbanization, and tourism development. Information from Puerto Rico also indicates that threats from human-caused fires, human trampling, and nonnative and invasive species impact
The species' distribution is wider than known at the time of listing, and the species' listing by the Commonwealth of Puerto Rico provides some level of protection to
In summary,
Based on biological factors and stressors to the species' viability, we determined 25 years to be the foreseeable future within which we can reasonably project threats and the species' response to those threats. The foreseeable future for the individual
The 25-year period includes multiple generations of the species and allowed adequate time for impacts from conservation efforts or changes in threats to be observed through population responses. This timeframe accounts for the species' reproductive biology, and thus the time required by multiple generations of
Although population numbers and abundance of
The magnitude of effects associated with habitat destruction and modification along with climate change are expected to continue and potentially increase in the foreseeable future. Despite the existing regulatory mechanisms and conservation efforts, the threats discussed above are still affecting the species to the extent that it does not meet the criteria for delisting. Thus, after assessing the best available information, we conclude that
Under the Act and our implementing regulations, a species may warrant listing if it is in danger of extinction or likely to become so in the foreseeable future throughout all or a significant portion of its range. The court in
Therefore, we proceed to evaluating whether the species is endangered in a significant portion of its range—that is, whether there is any portion of the species' range for which both (1) the portion is significant, and (2) the species is in danger of extinction in that portion. Depending on the case, it might be more efficient for us to address the “significance” question or the “status” question first. We can choose to address either first. Regardless of which question we address first, if we reach a negative answer with respect to the first question that we address, we do not need to evaluate the other question for that portion of the species' range.
Following the court's holding in
We evaluated the range of
We examined the following threats: habitat loss and modification due to vegetation maintenance or trimming along roads and trails, human trampling, and urbanization and tourism development; human-caused fires; nonnative, invasive plant species; and the effects of climate change (prolonged droughts, expected shifts of life zones, and sea level rise), including cumulative effects. We also considered whether these threats may be exacerbated by small population size and limited connectivity between
Habitat modification poses a threat to most of the 11
Small population size can exacerbate other threats on the species. The information regarding
Overall, we found that threats likely are impacting individuals or populations similarly across the species' range. Kinds of threats and levels of threats are more likely to vary across a species' range if the species has a large range rather than a very small natural range, such as
We found no portion of
Therefore, no portion of the species' range provides a basis for determining that the species is in danger of extinction in a significant portion of its range, and we determine that the species is likely to become in danger of extinction within the foreseeable future throughout all of its range. This does not conflict with the courts' holdings in
Our review of the best available scientific and commercial information indicates that
Under section 4(d) of the Act, the Secretary may promulgate protective regulations for threatened species. Because we are reclassifying this species as a threatened species, the prohibitions in section 9 will not apply directly. We are, therefore, promulgating below a set of regulations to provide for the conservation of the species in accordance with the Act's section 4(d), which also authorizes us to apply any of the prohibitions in section 9 to a threatened species. The discussion below regarding protective regulations under section 4(d) of the Act complies with our policy, as published in the
Section 4(d) of the Act contains two sentences. The first sentence states that the Secretary shall issue such regulations as she deems necessary and advisable to provide for the conservation of species listed as “threatened.” The U.S. Supreme Court has noted that statutory language similar to the language in section 4(d) of the Act authorizing the Secretary to take action that she “deems necessary and advisable” affords a large degree of deference to the agency (see
The courts have recognized the extent of the Secretary's discretion under this standard to develop rules that are appropriate for the conservation of a species. For example, courts have upheld, as a valid exercise of agency authority, rules developed under section 4(d) that included limited prohibition against takings (see
The provisions of this 4(d) rule promote conservation of
Section 7(a)(2) of the Act requires Federal agencies, including the Service, to ensure that any action they fund, authorize, or carry out is not likely to jeopardize the continued existence of any endangered species or threatened species or result in the destruction or adverse modification of designated critical habitat of such species.
If a Federal action may affect a listed species or its critical habitat, the responsible Federal agency (action agency) must enter into consultation with us. Examples of actions that are subject to the section 7 consultation process are actions on State, Tribal, local, or private lands that require a Federal permit (such as a permit from the U.S. Army Corps of Engineers under section 404 of the Clean Water Act (33 U.S.C. 1251
These requirements are the same for a threatened species with a species-specific 4(d) rule. For example, as with an endangered species, if a Federal agency determines that an action is “not likely to adversely affect” a threatened species, the action will require formal consultation and the formulation of a biological opinion (50 CFR 402.14(a)).
Exercising the Secretary's authority under section 4(d) of the Act, we have developed a species-specific rule that is designed to address
The protective regulations we are finalizing for
The exceptions to the prohibitions include all of the general exceptions to the prohibitions for endangered plants against removing and reducing to possession, as set forth at 50 CFR 17.61(c), and certain other specific activities that we except, as described below. Despite these prohibitions regarding threatened species, we may under certain circumstances issue permits to carry out one or more otherwise-prohibited activities, including those described above. The regulations that govern permits for threatened plants state that the Director may issue a permit authorizing any activity otherwise prohibited with regard to threatened species (50 CFR 17.72). Those regulations also state that the permit shall be governed by the provisions of § 17.72 unless a special rule applicable to the plant is provided in §§ 17.73 to 17.78. Therefore, permits for threatened species are governed by the provisions of § 17.72 unless a species-specific 4(d) rule provides otherwise. However, under our recent revisions to § 17.71, the prohibitions in § 17.71(a) do not apply to any plant listed as a threatened species after September 26, 2019. As a result, for threatened plant species listed after that date, any protections must be contained in a species-specific 4(d) rule. We did not intend for those revisions to limit or alter the applicability of the permitting provisions in § 17.72, or to require that every species-specific 4(d) rule spell out any permitting provisions that apply to that species and species-specific 4(d) rule. To the contrary, we anticipate that permitting provisions will generally be similar or identical for most species, so applying the provisions of § 17.72 unless a species-specific 4(d) rule provides otherwise will likely avoid substantial duplication. Under 50 CFR 17.72 with regard to threatened plants, a permit may be issued for the following purposes: For scientific purposes, to enhance propagation or survival, for economic hardship, for botanical or horticultural exhibition, for educational purposes, or for other activities consistent with the purposes and policy of the Act. Additional statutory exceptions from the prohibitions are found in sections 9 and 10 of the Act.
We recognize the beneficial and educational aspects of activities with seeds of cultivated plants, which generally enhance the propagation of the species and, therefore, will satisfy permit requirements under the Act. We intend to monitor the interstate and foreign commerce and import and export of these specimens in a manner that will not inhibit such activities, providing the activities do not represent a threat to the species' survival in the wild. In this regard, seeds of cultivated specimens will not be subject to the prohibitions above, provided that a statement that the seeds are of “cultivated origin” accompanies the
We recognize the special and unique relationship with our State and Territorial natural resource agency partners in contributing to conservation of listed species. State and Territorial agencies often possess scientific data and valuable expertise on the status and distribution of endangered, threatened, and candidate species of wildlife and plants. State and Territorial agencies, because of their authorities and their close working relationships with local governments and landowners, are in a unique position to assist us in implementing all aspects of the Act. In this regard, section 6 of the Act provides that we must cooperate to the maximum extent practicable with the States and Territories in carrying out programs authorized by the Act. Therefore, any qualified employee or agent of a State or Territorial conservation agency that is a party to a cooperative agreement with the Service in accordance with section 6(c) of the Act, who is designated by his or her agency for such purposes, will be able to conduct activities designed to conserve
Nothing in this 4(d) rule will change in any way the recovery planning provisions of section 4(f) of the Act, the consultation requirements under section 7 of the Act, or our ability to enter into partnerships for the management and protection of
Regulations adopted pursuant to section 4(a) of the Act are exempt from the National Environmental Policy Act (NEPA; 42 U.S.C. 4321
In accordance with the President's memorandum of April 29, 1994 (Government-to-Government Relations with Native American Tribal Governments; 59 FR 22951), Executive Order 13175 (Consultation and Coordination with Indian Tribal Governments), and the Department of the Interior's manual at 512 DM 2, we readily acknowledge our responsibility to communicate meaningfully with federally recognized Tribes on a government-to-government basis. In accordance with Secretary's Order 3206 of June 5, 1997 (American Indian Tribal Rights, Federal-Tribal Trust Responsibilities, and the Endangered Species Act), we readily acknowledge our responsibilities to work directly with Tribes in developing programs for healthy ecosystems, to acknowledge that Tribal lands are not subject to the same controls as Federal public lands, to remain sensitive to Indian culture, and to make information available to Tribes. There are no federally recognized Tribes in the range of
A complete list of references cited in this rulemaking is available on the internet at
The primary authors of this final rule are the staff members of the Caribbean Ecological Services Field Office.
Endangered and threatened species, Exports, Imports, Plants, Reporting and recordkeeping requirements, Transportation, Wildlife.
Accordingly, we hereby amend part 17, subchapter B of chapter I, title 50 of the Code of Federal Regulations, as set forth below:
16 U.S.C. 1361-1407; 1531-1544; and 4201-4245, unless otherwise noted.
(h) * * *
(i)
(1)
(i) Import or export, as set forth at § 17.61(b) for endangered plants.
(ii) Remove and reduce to possession the species from areas under Federal jurisdiction; maliciously damage or destroy the species on any such area; or remove, cut, dig up, or damage or destroy the species on any other area in knowing violation of any law or regulation of the Territory or in the course of any violation of a Territorial criminal trespass law.
(iii) Interstate or foreign commerce in the course of commercial activity, as set forth at § 17.61(d) for endangered plants.
(iv) Sale or offer for sale, as set forth at § 17.61(e) for endangered plants.
(2)
(i) Conduct activities as authorized by permit under § 17.72.
(ii) Remove, cut, dig up, damage, or destroy on areas not under Federal jurisdiction if you are a qualified employee or agent of the Service or Territorial conservation agency which is a party to a cooperative agreement with the Service in accordance with section 6(c) of the Act, and you have been designated by that agency for such purposes, when acting in the course of official duties.
(iii)(A) Any employee or agent of the Service, any other Federal land management agency, or a Territorial conservation agency, who is designated by that agency for such purposes, may, when acting in the course of official duties, remove and reduce to possession
(
(
(
(B) Any removal and reduction to possession pursuant to this paragraph must be reported in writing to the U.S. Fish and Wildlife Service within 5 days. The specimen may only be retained, disposed of, or salvaged in accordance with written directions from the Service.
(iv) Engage in any act prohibited under paragraph (i)(1) of this section with seeds of cultivated specimens, provided that a statement that the seeds are of “cultivated origin” accompanies the seeds or their container.
Federal Aviation Administration (FAA), Department of Transportation (DOT).
Notice of proposed rulemaking (NPRM); reopening of comment period.
This action reopens the comment period for the notice of proposed rulemaking (NPRM) published on May 23, 2023, titled “Removal of Expiration Date on a Flight Instructor Certificate; Additional Qualification Requirements To Train Initial Flight Instructor Applicants; and Other Provisions.” The proposed amendments would function to remove the expiration date from a flight instructor certificate, establish recent experience requirements, expand certain certificate reinstatement options for flight instructors, amend qualification requirements for flight instructors seeking to provide training to initial flight instructor applicants, and codify the requirements of a Special Federal Aviation Regulation. The FAA is reopening the comment period to allow commenters an additional opportunity to provide feedback on this proposed rule.
The comment period for the NPRM published on May 23, 2023, at 88 FR 32983, and closed on June 22, 2023, is reopened until December 1, 2023.
Send comments identified by docket number FAA-2023-0825 using any of the following methods:
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Allan G. Kash, Training and Certification Group, Flight Standards Service, Federal Aviation Administration, 800 Independence Avenue SW, Washington, DC 20591; telephone (202) 267-1100; email
The FAA invites interested persons to participate in this rulemaking by submitting written comments, data, or views relating to the rulemaking. The most helpful comments reference a specific portion of the proposal, explain the reason for any recommended change, and include supporting data. To ensure the docket does not contain duplicate comments, commenters should submit only one time if comments are filed electronically, or commenters should send only one copy of written comments if comments are filed in writing.
The FAA will file in the docket all comments it receives, as well as a report summarizing each substantive public contact with FAA personnel concerning this proposed rulemaking. Before acting on this proposal, the FAA will consider all comments it receives on or before the closing date for comments. The FAA will consider comments filed after the comment period has closed if it is possible to do so without incurring expense or delay. The FAA may change this proposal in light of the comments it receives.
Confidential Business Information (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 the person listed under the
An electronic copy of rulemaking documents may be obtained from the internet by—
1. Searching the Federal eRulemaking Portal at
2. Visiting the FAA's Regulations and Policies web page at
3. Accessing the Government Printing Office's web page at
Copies may also be obtained by sending a request to the Federal Aviation Administration, Office of
All documents the FAA considered in developing this proposed rule, including economic analyses and technical reports, may be accessed from the internet through the Federal eRulemaking Portal referenced in item (1) above.
On May 23, 2023, the FAA published an NPRM titled “Removal of Expiration Date on a Flight Instructor Certificate; Additional Qualification Requirements To Train Initial Flight Instructor Applicants; and Other Provisions,” in the
Commenters were instructed to provide comments on or before June 22, 2023 (
The FAA grants the commenter's request for an extension of the comment period to comment on the proposed rule. Under the guidance of Executive Order 13563, which provides that the public must be afforded a meaningful opportunity to comment with a comment period that should generally be at least 60 days, the FAA finds that an additional thirty (30) days will provide sufficient opportunity for the public to comment (
The FAA will not grant any additional requests to further extend the comment period for this rulemaking. Issued under authority provided by 49 U.S.C. 106(f), 44701(a)(5), and 44703(a) in Washington, DC, on or about October 26, 2023.
Consumer Product Safety Commission.
Supplemental notice of proposed rulemaking; notice of opportunity for oral presentation of comments.
The U.S. Consumer Product Safety Commission (Commission or CPSC) has determined preliminarily that there may be an unreasonable risk of blade-contact injuries associated with table saws. To address this hazard, the Commission proposes a rule under the Consumer Product Safety Act (CPSA) that would establish a performance standard that requires table saws to limit the depth of cut to no more than 3.5 millimeters when a test probe, acting as surrogate for a human finger or other body part, approaches the spinning blade at a rate of 1 meter per second (m/s). The Commission is providing an opportunity for interested parties to present comments on this supplemental notice of proposed rulemaking (SNPR).
Caroleene Paul, Directorate for Engineering Sciences, U.S. Consumer
On April 15, 2003, Stephen Gass, David Fanning, and James Fulmer,
On May 12, 2017, the Commission published a notice of proposed rulemaking (NPR) to address blade-contact injuries associated with table saws. 82 FR 22190. The proposed rule stated that it would limit the depth of cut of a table saw to 3.5 mm or less when a test probe, acting as surrogate for a human finger or other body part, contacts the spinning blade at an approach rate of 1 m/s. CPSC staff estimated that the proposed rule would prevent or mitigate the severity of 54,800 medically treated blade-contact injuries annually, and that the proposed rule's aggregate net benefits on an annual basis could range from about $625 million to about $2.3 billion.
Following publication of the NPR, CPSC staff completed a Special Study of table saw injuries that occurred in 2017.
In September 2019, CPSC staff submitted a Table Saw Update to the Commission with staff's analysis of NEISS data through 2018, including a discussion of the 2017 Special Study.
This SNPR analyzes updated incident data through 2021. The data confirm the 2019 analysis and suggest no reduction in table saw injuries despite the fact that the relevant voluntary standard has required table saws to include modular blade guards since 2010.
Also since publication of the NPR in 2017, staff is aware of several changes to the table saw market that include:
• introduction of a compact table saw with active injury mitigation (AIM) capabilities;
• introduction of a Preventative Contact System (PCS) on a commercial sliding table panel saw;
• introduction of cordless, battery-powered bench saws by at least two manufacturers;
• change in ownership of patents related to SawStop AIM technology, with the acquisition of SawStop, LLC, by TTS Tooltechnic Systems Holding AG (TTS); and
• expiration of two patents related to SawStop AIM technology.
The Commission is issuing this supplemental notice of proposed rulemaking based on staff's analysis of newly available incident data, evaluation of newly available products, and other market information that did not exist at the time of the 2017 NPR. As discussed in greater detail in section VII of this preamble, the revised proposed rule is generally consistent with the rule proposed in the 2017 NPR, but includes an updated definition of the term “table saw,” a more precise description of the proposed performance requirement, and a revised anti-stockpiling provision.
The Commission now expects that the proposed rule would prevent or mitigate the severity of an estimated 49,176 injuries treated in hospital emergency departments or other medical settings per year. The Commission further estimates that net benefits would range from approximately $1.28 billion to $2.32 billion per year.
This supplemental notice of proposed rulemaking is authorized by the CPSA. 15 U.S.C. 2051-2084. Section 7 of the CPSA authorizes the Commission to promulgate a mandatory consumer product safety standard that sets forth performance or labeling requirements for a consumer product if such requirements are reasonably necessary to prevent or reduce an unreasonable risk of injury. 15 U.S.C. 2056(a). Section 9 of the CPSA specifies the procedure that the Commission must follow to issue a consumer product safety standard under section 7.
Pursuant to section 9(f)(1) of the CPSA, before promulgating a consumer product safety rule, the Commission must consider, and make appropriate findings to be included in the rule, on the following issues:
• The degree and nature of the risk of injury that the rule is designed to eliminate or reduce;
• The approximate number of consumer products subject to the rule;
• The need of the public for the products subject to the rule and the probable effect the rule will have on the utility, cost, or availability of such products; and
• The means to achieve the objective of the rule while minimizing adverse effects on competition, manufacturing, and commercial practices.
Under section 9(f)(3) of the CPSA, to issue a final rule, the Commission must find that the rule is “reasonably necessary to eliminate or reduce an unreasonable risk of injury associated
Table saws are stationary power tools used for the straight sawing of wood and other materials. The basic design of a table saw consists of a motor-driven saw blade that protrudes through a flat table surface. To make a cut, the operator places the workpiece on the table and, using a rip fence or miter gauge as a guide, pushes the workpiece into the blade (see Figure 1).
Table saws generally fall into three product types: bench saws, contractor saws, and cabinet saws. Although there are no exact distinctions among these types of saws, the categories are generally based on size, weight, portability, power transmission, and price. Some industry participants use additional specialized descriptions, such as “jobsite saws,” “hybrid saws,” and “sliding saws.”
Bench saws are intended to be transportable, so they tend to be small, lightweight, and relatively inexpensive. In recent years, bench saw designs have evolved to include saws with larger and heavier-duty table surfaces, with some attached to a folding stand with wheels to maintain mobility. These larger portable saws on wheeled stands are commonly called “jobsite saws” because they are capable of heavier-duty work but still portable enough to move to work sites. Bench saws are generally powered using standard house voltage (110-120 volts), use universal motors,
Since the 2017 NPR was published, cordless battery-powered bench saws have been introduced widely to the table saw market. The first cordless table saw came to market in 2016, and at least three other brands have been introduced in the last few years. Cordless table saws typically run on lithium-ion batteries that range from 18 volts to 60 volts and are equipped with 8.25-inch blades with thinner kerfs to reduce friction while cutting. Prices for battery-powered bench saws range from $299 to $599 for the tool only, and the accompanying battery prices range from $50 to $150.
Contractor saws are larger and more powerful than bench saws, and range in weight from approximately 200 to 400 pounds. Although most contractor saws are stationary, a mobile base can be added to the frame. Contractor saws are often used in home workshops as a less expensive alternative to stationary cabinet saws. Contractor saws generally use a 10-inch blade, are powered using standard house voltage, use induction motors, and are belt driven. Compared to a bench saw, the induction motor and belt drive result in a table saw that produces less vibration and is quieter, more accurate, able to cut thicker pieces of wood, and more durable. Prices for contractor saws range from around $599 to $2,000, and contractor saws account for approximately 15 percent of the table saw market by volume of units sold.
Cabinet saws—also referred to as stationary saws—are the largest, heaviest, and most powerful of the three table saw types, and are typically the highest grade saw found in home woodworking shops. Cabinet saws generally use a 10-inch blade, are powered using 220-240 volts, use a 1.75-5 horsepower or stronger motor enclosed in a cabinet, are belt driven, and weigh from around 300 pounds to 1,000 pounds. Components in cabinet saws are designed for heavy use and durability, and the greater weight further reduces vibration so that cuts are smoother and more accurate. Cabinet saws have an average product life of more than 20 years, and prices range from approximately $1,399 to $5,000. Based on available information, cabinet saws account for approximately 6 percent of the table saw market by unit volume.
In the 2017 NPR, the Commission described common safety devices on table saws that are designed to reduce contact between the saw blade and the operator. 82 FR at 22192. As described in the NPR, these devices generally fall into two categories: (1) blade guards, and (2) kickback-prevention devices including splitters, riving knives, and anti-kickback pawls.
The riving knife and modular blade guard represent the latest safety measures that have been incorporated into the voluntary standards for table saws. Blade guards surround the exposed blade and function as a physical barrier between the blade and the operator. Riving knives are curved metal plates that physically prevent the two halves of a cut workpiece from moving back towards each other and punching the splitting blade, which could cause the operator to lose control of the workpiece. The Power Tool Institute (PTI), the industry trade group that represents manufacturers of consumer-grade table saws, has estimated that in 2017, 80 percent of bench saws, 33 percent of contractor saws, and 25 percent of cabinet table saws sold were equipped with modular blade guards and riving knives.
The 2017 NPR described an AIM system that detects imminent or actual human contact with the table saw blade and then performs an action to prevent or mitigate the severity of the injury. The NPR described two AIM systems available at the time: the SawStop system and the Bosch REAXX system.
Since the 2017 NPR was published, CPSC staff has become aware of another AIM technology called the preventative contact system (PCS), developed by the Felder Group. The PCS detects motion by using a capacitive field around the blade, which can detect movement before a body part contacts the blade. Marketing of the system indicates that its detection system works for fast and slow body part movement and reacts to impending blade contact by retracting the blade below the table surface in milliseconds. Retraction of the blade is achieved by reversing the polarity of two strong electro-magnets that hold the blade arbor in place. Two magnets with the same magnetic poles will repel each other, and this action moves the saw blade below the tabletop fast enough to prevent injury to a body part that would otherwise contact the rotating saw blade. The PCS system is available as an option on Felder's most expensive sliding table saw.
In 2017, CPSC staff conducted a Special Study of emergency department-treated table saw blade-contact injuries, in order to collect data on saw types, incident details, and injury characteristics that are otherwise not available in the standard National Electronic Injury Surveillance System (NEISS) data collections. The 2017 Study provided detailed information based on a snapshot of incidents that occurred in a single year. In 2017, there were an estimated 26,500 table saw blade-contact, emergency department-treated injuries. Of these, an estimated 25,600 injuries (96.4 percent) involved the finger. The estimated number of injuries for each of the most common diagnoses in blade-contact injuries were: 16,100 lacerations (60.9 percent), 5,500 fractures (20.6 percent), and 2,800 amputations (10.7 percent).
In the 2017 NPR briefing package, CPSC staff assessed trends for table saw blade-contact injuries reported through NEISS and concluded that there was no discernible change in the number or types of blade-contact injuries associated with table saws annually from 2004 to 2015. No statistically significant trend was detected in any of the analyses for the number of blade-contact injuries, amputations, hospitalizations, and finger/hand injuries. Staff also conducted a trend analysis to include the rate of injury per 10,000 table saws in use for each year in the analysis. The analysis again showed that there was no discernible change in the risk of injury associated with blade contact related to table saws from 2004 to 2015.
In the 2019 Status Update briefing package, CPSC staff updated the NEISS trend analyses. Staff assessed trends for table saw blade-contact injuries, amputations, hospitalizations, and finger/hand injuries, and concluded once more that there was no discernible change in the number of blade-contact injuries or types of injuries related to table saw blade contact, this time for the period 2004 to 2018.
For this supplemental NPR, staff performed trend analyses for blade-contact injuries, amputations, hospitalizations, and finger/hand injuries up to 2021. The voluntary standards in place have required modular blade guards since the publishing of UL 987, 7th edition, which had an effective date of January 2010. The date ranges for the trend analyses cover a timespan when an increasing proportion of table saws in use were equipped with modular blade guards (2010 to 2021), as well as the approximate period during which table saws equipped with traditional blade guards were no longer being produced (2015 to 2021). Table 1 provides the estimated number of emergency department-treated injuries associated
Figure 2 provides the estimated blade-contact injuries associated with table saws and the fitted trend line with a 95 percent confidence band for the fitted line from 2010 through 2021. The p-value associated with the slope of the fitted line is 0.44, which indicates that there is not a statistically significant trend in blade-contact injuries associated with table saws over this timeframe.
Figure 3 provides the estimated blade-contact injuries associated with table saws and the fitted trend line with a 95 percent confidence band for the fitted line from 2015 through 2021. The p-value associated with the slope of the fitted line is 0.79, which indicates that there is not a statistically significant trend in blade-contact injuries associated with table saws over this timeframe, despite the market shift during this time to table saws with modular blade guards and riving knives.
To assess any changes over time in the severity of table saw blade-contact injuries, CPSC staff performed trend analyses for blade-contact amputations, hospitalizations (including patients who were treated and admitted to the same hospital, as well as treated and transferred to a different hospital), and finger/hand injuries from 2010-2021 and 2015-2021. No statistically significant trend was detected in any of these analyses. Table 2 provides the total estimated number of blade-contact injuries from 2010 through 2021 for amputations, hospitalizations, and finger/hand injuries from blade contact, and expresses those numbers as a percentage of all estimated blade-contact injuries.
Table 3 provides an estimate of blade-contact injuries per 10,000 table saws in use for each year in the analysis. Figure 4 provides the trend analysis results for that data. The p-value associated with the slope of the fitted line is 0.86, which indicates that there is not a statistically significant trend. When limiting the trend analysis to the years 2015-2021, the p-value associated with the slope of the fitted line becomes 0.17, which also indicates the nonexistence of a statistically significant trend. Possible changes in usage patterns of table saws were not considered in these analyses.
Based on the foregoing analyses by CPSC staff, the Commission concludes that there has been no discernible change in the pattern of blade-contact injuries or types of injuries related to table saw blade contact, despite the transition of the market to modular blade guards and riving knives since 2010 and the phasing out of traditional blade guards since 2015.
Underwriters Laboratories Inc. (UL) published the first edition of UL 987
In 2016, as part of UL's international harmonization goal to adopt international standards, UL published the first edition of UL 62841-3-1,
Section 19.101 of UL 62841-3-1 specifies that a table saw shall provide “either a saw blade guard mounted to an extended riving knife complying with 19.101.2 or an over-arm saw blade guard complying with 19.101.3.” Section 19.101.2 specifies that the guard may consist of independent side and top barriers and must have openings that provide visibility of the blade's cutting edge. This modular guard attaches to the riving knife and shall provide coverage over the saw blade as determined by a probe test. Section 19.103 specifies that a table saw shall be equipped with a riving knife that is located behind the blade at a height below the saw blade that allows the riving knife to pass freely through the cutting groove of the piece being cut. Section 21.106.3 specifies that an antikickback device attached to the riving knife shall be easily removable and function independently from the blade guard.
Since 2004, table saws have been available in the U.S. market with AIM capabilities that mitigate injuries when a hand or finger makes contact with a rotating saw blade. In February 2015, UL defined an “active injury mitigation” system as an active system that serves to mitigate or prevent injury from exposure to a rotating saw blade. At a basic level, an AIM system for table saws must perform two functions: detect contact or imminent contact between the rotating saw blade and a human body part, and react to mitigate injury. Detection can be achieved by sensing electrical or thermal properties of the human body, or visually sensing and tracking the human body.
In 2015 and 2016, UL balloted proposals to add AIM system requirements for table saws to UL 987 and UL 62841-3-1, respectively. The ballots proposed performance requirements that limited the depth of cut to a probe simulating a human finger to 4 mm or less when introduced to an operating saw blade at an approach rate of 1 m/s. UL has identified a 4 mm cut from the surface of the skin as the quantitative threshold separating simple and complex lacerations in a human finger.
In July 2017, UL announced the availability of its
In January 2010, the voluntary standard's modular blade guard requirement took effect. Under this requirement, all table saws sold in the United States shall be equipped with a system consisting of a modular guard and antikickback device attached to a riving knife. In the NPR, the Commission noted staff's conclusion that, while the modular blade guard system was an improvement over the traditional blade guard system, a guard is only effective if used, and incident data and survey data indicate users remove modular blade guards for similar reasons (such as improved visibility or to make certain types of cuts) that they had removed traditional blade guards.
In its comments on the 2017 NPR,
CPSC staff has conducted tests on table saws equipped with AIM technology, using the test probe and test method described in Appendix A of Tab A of the 2017 NPR briefing package.
As discussed in section V of this preamble, UL identified the threshold between simple and severe lacerations to the finger as 4 mm from the surface of the skin. Because the test probe represents human flesh beneath the epidermis, staff subtracted the 0.5 mm thickness of the epidermal layer of skin from that 4 mm threshold value to arrive at a maximum allowable depth of cut to the test probe of 3.5 mm.
In Tab A of the 2017 NPR briefing package, CPSC staff presented results of tests in which the test probe was introduced to an operating saw blade on a SawStop JSS-MCA jobsite table saw and a Bosch REAXX jobsite table saw. Both saws were equipped with 10-inch blades and some type of AIM technology. As shown in table 4, the depth of cut for the SawStop table saw tests ranged from 1.5 mm to 2.8 mm,
Staff conducted tests at different blade heights on a SawStop JSS-MCA jobsite saw. As shown in Figure 5, test results indicate a linear relationship between depth of cut to the test probe and blade height. Staff determined the greatest depth of cut occurred when the table saw blade was set at its highest setting. For this reason, the rule proposed in this SNPR specifies that performance must be measured with the saw blade set at its highest setting, with no bevel angle.
The approach rate of the test probe to the saw blade represents the speed at which a human finger moves toward the saw blade during a blade-contact incident. Staff conducted tests at different approach rates of the probe to the blade on a SawStop JSS-MCA jobsite saw. As shown in Figure 6, test results indicate a linear relationship between depth of cut to the test probe and approach speed. This linear relationship renders testing at multiple approach rates redundant, and the proposed rule in this SNPR thus requires that table saw performance be measured at an approach rate of 1 m/s.
CPSC staff conducted tests with the ground plug of the power cord on a SawStop JSS-MCA jobsite saw disconnected. Test results showed no effect on AIM functionality.
Comments to the ANPR and the 2017 NPR questioned whether AIM technology can be applied to small bench saws. Staff conducted tests with an approach rate of 1 m/s on a SawStop CTS compact table saw, with an HBN capacitance of 50 pF.
Since the 2017 NPR was published, cordless battery-powered table saws have been introduced to the table saw market. Cordless table saws typically are powered by lithium-ion batteries that range from 18 volts to 60 volts and are equipped with 8.25-inch blades with thinner kerfs compared to typical 10-inch blades for corded electric table saws. To evaluate the feasibility of applying AIM technology on a battery-powered bench saw, staff modified a 33-pound battery-powered bench saw equipped with an 8.25-inch blade by adding lightweight aluminum framing. This modification allowed staff to position a standard SawStop 10-inch brake cartridge at a distance that would stop the bench saw's blade if the brake cartridge was activated. The proof-of-concept testing was designed to evaluate the ability of a lightweight battery-powered bench saw to withstand the energy of an AIM system activating, so the testing did not retract the blade; instead, all of the energy required for stopping the blade was absorbed by the brake cartridge and the bench saw's structure. With the table saw on and the blade spinning at full speed, staff remotely activated the brake cartridge and the bench saw's blade came to a complete stop. The bench saw moved approximately 1 inch vertically, but there was no damage to the saw or its table surface. Based on this testing, CPSC staff concluded that a battery-powered bench saw can withstand the reaction energy of an AIM system.
In addition, applying a signal to the saw blade can be achieved by using the bench saw's battery and a voltage reducer to reduce the battery voltage to the voltage required to induce a detection signal on the saw blade. CPSC staff has noted that battery-powered bench saws already use a voltage regulator to maintain voltage within acceptable limits for the table saw to function; therefore, if there is enough voltage to operate the bench saw, there will also be enough voltage to induce a signal on the saw blade.
Based on staff's evaluations of NEISS incident data, testing conducted prior to and subsequent to the publication of the 2017 NPR, and the comments received in response to the NPR and the Special Study as discussed in section VIII of this preamble, the Commission proposes the following revisions to the rule proposed in the 2017 NPR:
• Specifically reference jobsite saws, hybrid saws, sliding saws, and battery-powered saws in the definition of “table saw,” to better clarify the scope of the proposed rule and account for terms used by some industry participants;
• Remove the reference to “radial approach rate” from the rule's description of how the test probe must be introduced to the saw blade, and add descriptive language clarifying that movement of the test probe shall be parallel to the saw's table surface, with the center axis of the probe at a height of 15 ± 2 mm above the saw's table surface, as discussed in Response 1 in section VIII of this preamble;
• Require that testing be conducted while the spinning saw blade is at its
• Revise the rule's anti-stockpiling provision to prohibit the manufacture or importation of noncompliant table saws at a rate greater than 115 percent of the rate at which table saws were manufactured or imported during the 12-month period prior to promulgation of the final rule, rather than 120 percent of the rate at which saws were manufactured during any 12-month period in the five years preceding promulgation, to more closely match the growth rate of the table saw market over the last three years.
This SNPR also proposes to change the CFR part number to 1264.
While the proposed rule establishes performance requirements intended to mitigate the risk of injury associated with contacting table saw blades, it does not dictate how table saw manufacturers must meet those requirements. There already are different methods to limit the depth of cut to a test probe or finger. SawStop stops the blade and allows angular momentum to retract it. The Bosch REAXX retracts the blade with an explosive discharge. Since the 2017 NPR was published, a system based on reverse polarity of electromagnets to retract the blade has also been introduced to the market. Furthermore, manufacturers need not use the particular test procedure described in this preamble and in Tab A of the 2017 NPR briefing package, so long as the test method they use effectively assesses compliance with the standard. Other test probes and test methods using a different detection system may be developed to detect human contact with the saw blade and to measure depth of cut.
The Commission published the 2017 NPR in the
In this section, we describe and respond to comments on the 2017 NPR and the 2017 Special Study. We present a summary of comments by topic, followed by the Commission's response.
However, under §§ 1264.3 and 1264.4 of the proposed rule, testers may use a cylindrical probe as proposed by Bosch and PTI, rather than the square or cuboid probe used in UL's test methodology, as long as it possesses characteristics that render it a suitable surrogate for a human finger. The March 2015 UL Research Report referenced in PTI's comment recommends that a surrogate finger possess the following general characteristics:
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In addition, the available data on approach rates during both kickback and non-kickback-related table saw blade-contact incidents indicate the approach rate is unlikely to exceed 0.368 m/s.
Based on incident information from the 2017 Special Study, PTI, and SawStop's activation data, CPSC staff assesses that most blade-contact injuries are not related to kickback, and in almost all instances AIM systems prevented serious injury, whether or not kickback was a factor.
In addition, although riving knives can reduce the potential for kickback, they do not eliminate table saw injuries. Information from the 2017 Special Study indicated that when blade guards were in use, 28 percent of the incidents occurred on table saws equipped with a riving knife. PTI's comments to the 2017 NPR indicate that only 17 percent of accidents reported to PTI members from 2007 to 2015 involved kickback. Finally, of the accidents reported to PTI, 49 percent of the table saws involved were equipped with riving knives.
As discussed in more detail in section X of this preamble, the proposed rule is expected to reduce amputations and other serious blade-contact injuries with a net societal benefit exceeding $1 billion per year because it would not permit table saws on the market which are not equipped with AIM technology. While staff anticipates that some table saw models would be completely removed from the market as a result of the rule, the proposed rule would also substantially reduce the number of serious blade-contact injuries involving table saws, and their associated societal costs. In addressing the blade-contact risk, the CPSC considers the costs of blade-contact injuries, the utility of tables saws, and the impacts of limiting consumer choice. Further, the Commission has considered alternatives to the draft proposed rule that would not require all table saws to be produced with AIM technology. These alternatives are discussed in section X of this preamble.
The Commission is not able to predict whether consumers will take less care when using a table saw with an AIM system, relative to current table saws—much less whether users' behavior with other power tools might change for the worse. However, even if this does come to pass, if the AIM system is effective then the severity of an injury resulting from blade contact will be lessened, which would reduce the overall number of severe injuries associated with table saws.
However, the proposed rule does not specify a particular detection system that must be used to meet the performance requirement; it instead allows manufacturers to use any detection system that meets that requirement. The implementation of a performance requirement instead of a technology requirement will encourage innovation in the development of new technologies. Indeed, in the time since the 2017 NPR was published, the Felder Group has developed its new technology called the preventative contact system (PCS), which detects motion by creating a capacitive field around the blade and reacts to impending blade contact by retracting the blade below the table surface in milliseconds. Retraction of the blade is achieved by reversing the polarity of two strong electro-magnets that hold the blade arbor in place.
While we are mindful that the current suppliers of AIM technologies might be able to exert significant power in the U.S. table saw market for a period of time if the proposed rule is adopted, the unusually extended effective date proposed in this SNPR (36 months from publication of a final rule in the
Mandatory training for consumers who purchase or use table saws is not a solution the Commission would be able to implement under its current statutory authority.
Furthermore, even taking at face value the Special Study's conclusion that blade-contact injuries are roughly seven times more likely on table saws equipped with traditional blade guard systems, tens of thousands of blade-contact injuries continue to occur each year, more than a decade after modular blade guard requirements were incorporated into the voluntary standards. Thus, there remains an unreasonable risk of serious injury associated with table saw use, regardless of which type of blade guard system is used.
We seek further comments on this issue.
The proposed rule would apply to all table saws that are consumer products, as defined in the proposed rule, including bench saws, contractor saws, and cabinet saws. The proposed rule would include a requirement to mitigate the risk of blade-contact injuries on table saws.
Under section 9(g)(1) of the CPSA, 15 U.S.C. 2058(g)(1), the effective date for a consumer product safety standard must not exceed 180 days from the date the final rule is published, unless the Commission finds, for good cause, that a later effective date is in the public interest. As discussed in section XVI of this preamble, the Commission finds that 180 days is not adequate to allow for manufacturers to comply with the final rule, or for the rule to have its desired effect of promoting the development and commercial availability of additional AIM technologies. The Commission therefore proposes an effective date of 36 months following
The proposed rule would provide that the definitions in section 3 of the CPSA (15 U.S.C. 2051) apply. In addition, the proposed rule would define “table saw” as: “a woodworking tool that has a motor-driven circular saw blade, which protrudes through the surface of a table.” In order to more precisely define the scope of the rule and account for additional classifications used by some industry participants, the definition has been revised from the definition set out in § 1245.2 of the rule proposed in the NPR to specify that “[t]able saws include bench saws, jobsite saws, contractor saws, hybrid saws, cabinet saws, and sliding saws,” and that “[t]able saws may be powered by alternating current from a wall outlet or direct current from a battery.” The Commission seeks comment on this proposed definition of a table saw.
The proposed rule would require table saws, when powered on, to limit the depth of cut to 3.5 mm when the center axis of the test probe, acting as a surrogate for a human finger or other body part, is moving parallel to, and is 15 ± 2 mm above the table top at a rate of 1 m/s and contacts the spinning blade that is set at its maximum height setting. The rule would require that the test probe allow for the accurate measurement of the depth of cut to assess compliance with the proposed requirement.
The composition and form of the test probe are not defined. However, any test probe that is used should have the appropriate properties (such as electrical, optical, thermal, electromagnetic, ultrasound, etc.) to indicate human body/finger contact with the saw blade, and the appropriate physical properties to accurately measure depth of cut. While the test probe and test method described in TAB A of staff's 2017 briefing package are considered appropriate for the evaluation of AIM systems using an electrical detection system, the Commission does not propose to make this test method mandatory, because other AIM systems may use a different detection approach. For AIM systems using a different detection approach, the method should be developed based on sound material science and engineering knowledge to accurately assess compliance with the proposed requirement.
A performance requirement that limits the depth of cut to 3.5 mm at an approach rate of 1 m/s will significantly reduce the severe lacerations, fractures, amputations, and avulsions associated with operator blade-contact incidents on table saws, because the probe will have the appropriate properties to indicate human contact with the saw blade and the equivalent injury mitigation on a real human finger will avoid most microsurgery.
The Commission recognizes there may be some scenarios, such as kickback, which can cause the operator's hand to be pulled into the blade at a high rate of speed or lead the operator to reach as fast as possible for a falling workpiece. In these and other scenarios, the speed of the operator's hand or finger may exceed 1 m/s when it contacts the saw blade. At approach speeds greater than 1 m/s, AIM system performance may not be sufficient to prevent injuries that require extensive
In accordance with section 9 of the CPSA, the proposed rule contains a provision that would prohibit a manufacturer from “stockpiling,” or substantially increasing the manufacture or importation of noncompliant table saws between the promulgation of the final rule and its effective date. The provision would prohibit a firm from manufacturing or importing noncompliant table saws at a rate that is greater than 115 percent of the rate at which the firm manufactured and/or imported table saws during the base period. The base period is the 12-month period immediately preceding the promulgation of the final rule. The cap on manufacture or importation has been reduced from the 120 percent cap proposed in the 2017 NPR to reflect the growth rate of the table saw market over recent years.
The Commission seeks comments on the proposed product manufacture or import limits and the base period with respect to the anti-stockpiling provision.
The findings required by section 9 of the CPSA are discussed throughout the preamble of this proposed rule and specifically set forth in the appendix to the rule.
The Commission is proposing to issue a rule under sections 7 and 9 of the CPSA. The CPSA requires that the Commission prepare a preliminary regulatory analysis and that the preliminary regulatory analysis be published with the text of the proposed rule. 15 U.S.C. 2058(c).
The Commission's updated preliminary regulatory analysis is contained in TAB A of staff's briefing package,
The CPSC is issuing a proposed rule to address the unreasonable risk of blade-contact injuries associated with table saws. This rulemaking proceeding was initiated by an ANPR published in the
The Commission has identified 23 firms that supply table saws to the U. S. market.
For smaller, more specialized firms, table saws are generally not a large percentage of firms' sales. One company reported that table saw sales contribute a negligible fraction of its $15 million annual revenue. IEc, 2016a. Another company with an annual revenue of $20 to $40 million stated that table saws represent approximately five percent of total sales.
As discussed in section III of this preamble, table saws are generally grouped into three categories: bench saws, contractor saws, and cabinet saws. Bench saws (which include saws sometimes referred to as jobsite saws) tend to be lightweight and portable, and are the least expensive of the three categories. Contractor saws are larger, heavier, more powerful, and more expensive than bench saws. Cabinet saws are the heaviest, most powerful, and most expensive of the categories. Some manufacturers also categorize table saws as “hybrid saws” or “sliding saws.” Sliding saws are similar to cabinet saws, but typically are equipped with an extension that allows for the cutting of large panels, have advanced electronic features, and sometimes include a Graphical User Interface (GUI) for operation. Nearly all sliding saws weigh more than 900 pounds and require equipment to move or relocate.
The range of prices for table saws generally overlaps for three products: bench, contractor, and hybrid saws. Bench saws are the least expensive, ranging in price from $139 to $1,399. Prices for contractor saws range from $599 to $1,999, and prices for hybrid saws range from $895 to $4,279. Generally, cabinet and sliding saws are more expensive. Prices for cabinet saws range from $1,399 to $4,999. The price range for sliding table saws is wide, with models priced below $3,400 and above $25,000. SawStop models containing AIM technology are consistently priced at the upper end of the price range for each of the three primary table saw categories (bench, contractor, and cabinet). The least expensive saw available from SawStop is the compact table saw priced at $900. The SawStop bench saw is the most expensive in the bench saw category at $1,599 to $1,799, depending on the distributor. Similarly, SawStop
Although the design and engineering of table saws may occur in the United States, most table saws currently are manufactured overseas. Data from the U.S. International Trade Commission indicates that from 2014 to 2017 approximately 99 percent of imported table saw units were built in Taiwan and China. A small volume of expensive industrial saws was also imported from European and Canadian manufacturers.
CPSC staff estimated the annual number of table saws in use with the CPSC's Product Population Model (PPM), a statistical model that projects the number of products in use given examples of annual product sales and product failure rates. Total annual shipments of all table saws to the U.S. market from 2002 to 2017 are estimated to have ranged from 429,000 to 825,000, and total annual shipments from 2018 to 2020 are estimated to have ranged from 746,000 to 995,000. Estimates of industry-wide sales value are not readily available. CPSC staff estimated that bench saws account for about 79 percent of the units sold, with contractor saws (including hybrids) and cabinet saws accounting for approximately 12 percent and 9 percent, respectively.
Staff calculated an average product life of 10 years for bench saws, 17 years for contractor saws, and 24 years for cabinet saws. Using these parameters, staff projected a total of about 8.2 million table saws in use in the United States in 2017, including about 5.35 million bench saws (about 65 percent), 1.4 million contractor saws (about 17 percent), and 1.46 million cabinet saws (about 18 percent).
This section of the analysis consists of a comparison of the benefits and costs of the proposed rule and explains the Commission's preliminary conclusion that the expected benefits of the proposed rule exceeds its expected costs by a wide margin.
Beginning in 2010, the voluntary standards governing table saws (at that time UL 987; currently UL 62841-3-1) have required table saws to be equipped with modular blade guard systems, riving knives, and anti-kickback devices. To quantify the hazards associated with blade-contact injuries and to evaluate the effectiveness of the voluntary standards, CPSC staff conducted the 2017 Special Study. Of the 26,501 blade-contact injury cases analyzed for the Special Study, staff concluded that 12.2 percent involved saws that were compliant with the voluntary standard, 19.6 percent involved table saws with “unknown” blade guard types, and the remainder of incidents involved non-compliant saws. The Special Study found that the relative risk of a blade-contact injury was 7.19 times greater for a non-compliant saw than a complaint saw.
However, there are significant caveats to this finding. First, the Special Study is a snapshot analysis based on only one year of incidents. Second, there is a significant proportion of injuries associated with “unknown” blade guard types. Third, the study does not account for characteristics of the study group. For example, the study did not reveal if the consumers who purchased compliant saws were more risk-averse or safety-conscious. If this was the case, members of that group would be less likely to be involved in a table saw-related injury regardless of the type of blade guard in use. Notably, as discussed in more detail in section IV of this preamble, the NEISS data trend indicates that the rate of table saw blade contact injuries has not declined in more than a decade after the introduction of the modular blade guard requirement. Given this data, CPSC assesses that the voluntary standards have not been effective in the long run at reducing blade contact injuries.
The proposed rule is intended to address table saw injuries resulting from blade contact by requiring table saws to be equipped with AIM technology. According to the 2017 Special Study, there were an estimated 26,501 blade contact injuries initially treated in U.S. hospital emergency departments in 2017. The number of table saw injuries initially treated outside of hospital EDs is estimated with the CPSC's Injury Cost Model (ICM), which uses empirical relationships between the characteristics of injuries (diagnosis and body part) and victims (age and sex) initially treated in hospital EDs and the characteristics of those initially treated in other settings.
Thus, there was an estimated annual total of about 49,176 medically treated blade-contact injuries. About 60.9 percent of those injuries involved bench saws; 27.1 percent involved contractor saws; and 9.1 percent involved cabinet saws. About 3 percent involved table saws of unknown type. Staff estimates that approximately 21,504 injuries (about 43.7 percent) were treated in doctors' offices or clinics, and 1,171 injuries (about 2.4 percent) resulted in direct hospital admission, bypassing the ED. Overall, about 9.8 percent of the medically treated injuries resulted in hospitalization, either directly or following treatment in an ED.
An estimated 90.1 percent of the injuries involved fingers, with almost all of the remainder involving the hand. About 9.1 percent of the medically treated injuries involved amputations; 58.1 percent involved lacerations; and 23.5 percent involved fractures. About 33.4 percent of the amputations resulted in hospital admission, compared to about 5.9 percent of lacerations and 14.2
The blade-contact injury rate per 100,000 saws is calculated by dividing the number of medically-treated injuries by the estimated number of table saws in use. Using the data from the 2017 Special Study, there were approximately 559 bench saw-related injuries per 100,000 bench saws in use; 951 contractor saw-related injuries per 100,000 contractor saws in use; and 306 cabinet saw-related injuries per 100,000 cabinet saws in use.
The societal costs of blade-contact injuries are quantified using the ICM. The ICM's components for injury costs include medical costs, work losses, and the intangible costs associated with lost quality of life or pain and suffering.
Medical costs include three categories of expenditures: (1) medical and hospital costs associated with treating the injured victim during the initial recovery period and in the long run, including the costs associated with corrective surgery, the treatment of chronic injuries, and rehabilitation services; (2) ancillary costs, such as costs for prescriptions, medical equipment, and ambulance transport; and (3) costs of health insurance claims processing. Cost estimates for these expenditure categories were derived from a number of national and state databases, including the Medical Expenditure Panel Survey, the National Inpatient Sample of the Healthcare Cost and Utilization Project (HCUP-NIS), the Nationwide Emergency Department Sample (NEDS), the National Nursing Home Survey (NNHS), MarketScan® claims data, and a variety of other Federal, State, and private databases.
Work loss estimates include: (1) the forgone earnings of the victim, including lost wage work and household work; (2) the forgone earnings of parents and visitors, including lost wage work and household work; (3) imputed long term work losses of the victim that would be associated with permanent impairment; and (4) employer productivity losses, such as the costs incurred when employers spend time rearranging schedules or training replacement workers. Estimates are based on information from HCUP-NIS, NEDS, Detailed Claims Information (a workers' compensation database), the National Health Interview Survey, the U.S. Bureau of Labor Statistics, and other sources.
The intangible, or non-economic, costs of injury reflect the physical and emotional trauma of injury as well as the mental anguish of victims and caregivers. Intangible costs are difficult to quantify because they do not represent products or resources traded in the marketplace. Nevertheless, they typically represent the largest component of injury cost and must be accounted for in any benefit-cost analysis involving health outcomes.
This regulatory analysis discounts future benefits and costs using a 3 percent discount rate. The 3 percent rate is intended to represent what is sometimes called the “social rate of time preference,” which is consistent with the rate at which society discounts future consumption flows to their present value.
Based on ICM estimates and utilizing the 3 percent discount rate, the present value of total injury costs associated with the estimated 49,176 medically treated table saw injuries amounted to $3.97 billion. This suggests injury costs of about $80,650 per injury (
The distribution of injury costs by medical treatment setting is provided in table 5. Overall, medical costs and work losses accounted for 31 percent of the total, while the non-economic losses associated with pain and suffering accounted for 69 percent.
Estimates of the present value of these societal costs from blade-contact injuries, per table saw in use, and by saw type, are presented in table 6. Row (a) shows aggregate annual societal costs, by type of saw. Annual societal costs per saw are presented in row (c) and are calculated by dividing the aggregate annual societal costs, row (a), by table saws in use, row (b). The present value of annual societal costs at a 3 percent discount rate are presented
The effectiveness of AIM technology in preventing blade-contact injuries is expected to be high. However, not all injuries would be prevented, because the AIM system activates after the hand or finger comes into contact with an operating blade. Moreover, it will not mitigate all severe blade-contact injuries. For example, it will not mitigate potentially severe blade contact injuries that occur: (1) when the saw is not running; (2) when the blade is operating but the AIM system has been deactivated; (3) when the operator's hand is moving into the blade so quickly that contact with the blade cannot be reduced sufficiently to prevent serious injury; or (4) when the AIM technology leads to complacency or reductions in safety efforts on the part of users that result in injuries the AIM technology is unable to prevent, which may or may not involve blade contact. An example of the fourth category might be an operator's decision to remove other safety equipment on the table saw, such as an anti-kickback pawl, which might increase the likelihood of an injury involving wood thrown back at the operator.
While there is insufficient information to quantify the impact of these factors with precision, there is information to highlight their impact. The 2007-2008 table saw survey found that in 5.5 percent of table saw injuries, the motor was not running.
Given the factors discussed in this section, we assume that AIM technology is 90 percent effective in reducing the societal costs of blade contact injuries. Table 7 recalculates benefits with a 90 percent effective rate to estimate the benefits from the proposed rule.
As discussed previously in this section of the preamble, there is inconsistent evidence whether table saws complying with the modular blade guard system requirement in UL 62841-3-1 are substantially less likely to cause severe injuries. If the voluntary standard is in fact effective in reducing the number or severity of blade-contact injuries, the proposed rule's expected reduction in societal costs would be reduced, because some of the injuries that an AIM system would be expected to prevent would already have been prevented by adherence to the voluntary standard. For an analysis of expected benefits under an assumption that the voluntary standard is in fact effective, see staff's revised preliminary regulatory analysis.
Table saw manufacturers are likely to incur three primary types of costs to incorporate AIM technology into their table saws:
The structure of some bench saws may need to be strengthened to improve stability and withstand the shock of blade braking and/or retraction. This strengthening may increase the overall weight of some of the lightest saws, reducing their portability and utility.
The commission seeks comments on the impact this proposed rule would have on existing firms.
To estimate the per-unit manufacturing cost of requiring AIM technology for table saws, CPSC staff assume that the costs associated with the rule are fully pushed forward to consumers, and that the expected price increases are reflective of all costs of production and supply. However, these cost impacts do not include royalty fees, which are payments that manufacturers would have to make if they license the AIM technology from other firms rather than developing their own AIM systems. From a societal perspective, royalties represent a transfer payment from one party or sector to another. Because royalties essentially move money from one party to another, and are not payments for goods or services, they are not costs for purposes of the benefit-cost analysis.
In 2015, SawStop predicted that retail prices for bench saws would increase by no more than $150 per unit as result of the rule.
For contractor and cabinet saws, the low-end expected cost impacts were based on discussions with other industry members. One manufacturer estimated that the retail price of a single table saw model that they produce would increase by about 30 percent as a result of the rule, including the cost of royalties. Excluding royalties, and inflated to 2021 dollars, this estimate suggests a cost increase associated with redesign, retooling, and materials of about $321. For this analysis, we assume that this $321 low-end cost increase can be applied to all contractor and cabinet saws.
For bench saws, the high-end cost increase is based on information provided by PTI, whose members produce primarily bench saws. In 2012, PTI estimated that the increase would be $100 to $800 per saw, excluding royalties.
For contractor and cabinet saw models, we apply the high end of the range estimated by PTI and other manufacturers. One table saw manufacturer provided an estimate ranging from $500 to $800 for “larger saws,” excluding royalties. Another manufacturer estimated that the retail price of saws would increase by 20 percent, excluding the cost of royalties. IEc, 2016b. Applying this percentage to the company's cabinet saw models results in added costs of about $260 to $800. CPSC assumes the high-end incremental cost increase is $1,002, which is the upper bound of each range suggested by PTI and these two manufacturers, inflated to 2021 dollars. These costs are for the first years following adoption of the proposed safety rule. In the longer term, after about 5 years, the incremental cost should decrease as AIM technology is better developed and deployed.
In addition to the manufacturing costs just described, there will also be the added costs of replacement parts related to the AIM system. For purposes of this analysis, we base the cost of replacement parts on the SawStop system, which requires replacement of the brake cartridge and blade after activation of the system. Replacement part prices are estimated to include $95 for a replacement brake cartridge, and $30 to $90 for a replacement blade.
The SawStop data, however, may overstate the costs of replacement parts. For instance, the AIM-equipped Bosch REAXX bench saw, which has since been withdrawn from the U.S. market, utilized a $100 cartridge that was usable for two activations. Because the blade was not destroyed by the activation, the Bosch system had lower replacement part costs.
The direct manufacturing and replacement costs are presented in table 8 and rely on the low- and high-end direct manufacturing costs and the SawStop replacement costs just described.
The increased retail prices of table saws, as compliance costs are passed on to consumers, would result in a reduction in table saw sales. Consumers who decide not to purchase table saws because of the higher prices would experience a loss in consumer surplus. The assumptions used by Commission staff to estimate the lost consumer surplus are explained in TAB A of staff's briefing package. Applying those assumptions, table 9 shows the expected reduction in annual sales and the expected lost consumer surplus as a result of adopting the proposed rule. Reduced sales could range from about 110,800 table saws under the low-end cost estimates (column a), to about 329,900 under the high-end cost estimates (column d), representing a sales reduction of about 17 percent to 50 percent, respectively. The annual loss in consumer surplus ranges from about $13.9 million under the low-end estimates (column c), to about $120 million under the high-end estimates (column f).
Table 10 presents the total costs per table saw, including the direct manufacturing costs, replacement part costs, and lost consumer surplus. The direct manufacturing and replacement part cost estimates, per table saw, are from table 8. The lost consumer surplus, per table saw, is calculated as the aggregate lost consumer surplus divided by the post-regulatory estimate of sales. Total per-unit costs range from roughly $388 to $1,210 per bench saw, from $531 to $1,376 per contractor saw, and from about $576 to $1,276 per cabinet saw.
The annual aggregate costs of the rule are estimated in columns (c) and (f) of table 11, and range from about $208 million, based on the low-end cost estimates, to about $400 million, based on the high-end cost estimates. Bench saws account for about 68 percent of the total under the low-end estimates, and about 66 percent of the total under the high-end estimates.
Section 9(f)(3)(E) of the CPSA, 15 U.S.C. 2058(f)(3)(E), provides that before adopting a final rule under CPSA sections 7 and 9, the Commission must find “that the benefits expected from the rule bear a reasonable relationship to its costs.” Although this SNPR does not establish a final rule, we nevertheless address that issue here and preliminarily conclude that the expected benefits of the proposed rule comfortably exceed its expected costs. The expected benefits and costs of the proposed rule by table saw type are presented in table 12. The net benefit estimates suggest that the per-unit benefits exceed costs by a ratio of more than 3.5 to 1 using a 3 percent discount rate. Using a 3 percent discount rate, the estimated net benefits range from about $503 million to $1,326 million for bench saws, $241 million to $365 million for contractor saws, and $536 million to $629 million for cabinet saws.
This general relationship is not altered with variations in some of the key parameters of the analysis, including variations in the expected product life of table saws, table saw sales, injury rates, and significant variations in the estimated costs of injuries. Furthermore, even if the Commission were to assume that the voluntary standards have been effective in reducing the number and severity of injuries, based on the findings from the 2017 Special Study, benefits would not be strongly negative and could be positive. The Regulatory Analysis Memo contains a discussion of costs and benefits under this assumption.
The results of the regulatory analysis demonstrate that the benefits of AIM technology substantially exceed costs under most plausible scenarios. This sensitivity analysis varies several of the key parameters to show the impact on per-unit net benefits.
Net benefits decline modestly if it is assumed that AIM technology is only 70 percent effective at mitigating the societal costs of blade-contact injuries, rather than 90 percent. Net benefits under this assumption are $272.92 per bench saw, $145.98 per contractor saw, and $357.45 per cabinet saw. Benefits remain substantially greater than costs.
PTI's comments in response to the 2017 NPR stated that CPSC staff substantially underestimated replacement part costs (
PTI commented in response to the 2017 NPR that staff's estimate that the expected product life of bench saws was 10 years was an overestimate; PTI stated that bench saws' actual expected product life was 7.5 years.
The Commission considered several alternatives to the proposed rule. These alternatives would mitigate the proposed rule's costs and potential disruptions in the marketplace. However, these alternatives would also reduce the expected benefits of the proposed rule.
The Commission could end the regulatory proceeding for table saws if it concludes that a mandatory rule is no longer needed to address an unreasonable risk. We cannot estimate the benefits and costs that would be associated with this alternative, because the estimates would be affected by factors such as the extent to which manufacturers would introduce new AIM-equipped table saws in the absence of a requirement that they do so, the prices of any such table saws, and the rate at which consumers would choose to purchase such table saws. However, because the rate at which AIM technology would be adopted in the absence of a mandatory rule would probably be substantially lower than the rate under a mandatory rule, both the benefits and the costs of this alternative would be much lower than estimated for the proposed rule.
The proposed rule includes an effective date of 36 months after the final rule is published in the
Although later effective dates could mitigate the impact of the proposed rule for some manufacturers, it could also delay a market-wide distribution of table saws with AIM technology. Given the net benefits per unit expected from incorporating AIM technology, delaying the effective date of the proposed rule would also delay the expected benefits of the rule.
The Commission could exempt cabinet and contractor saws on the grounds that, while widely purchased and used by consumers, they are generally intended for professional, commercial, or industrial users. Exempting cabinet and contractor saws could substantially reduce the adverse impact of the rule on small manufacturers because most small manufacturers market contractor and cabinet saws. Under this alternative, however, the benefits and costs would be limited to those associated with bench saws, which account for approximately 60.9 percent of medically treated blade-contact injuries. Thus, more than a third of medically treated blade-contact injuries would remain unaddressed under this alternative.
Rather than requiring all table saws of each manufacturer to meet the requirements of the proposed standard, the Commission could require that only a subset of table saws do so. For example, if a firm produces bench saws and contractor saws, the Commission might require the firm to produce at least one bench saw model and one contractor saw model that meet the requirements of the standard. However, this option would only address a portion of total injuries. In addition, a rule of this sort might be somewhat more difficult to enforce than a requirement that all table saws contain the AIM technology.
The Commission could conduct an information and education campaign informing consumers about blade contact hazards and blade contact injuries, and the benefits of AIM technology. The Commission could also strongly encourage consumers to always use the passive safety devices required under the voluntary standard, especially if they choose not to purchase a table saw with the AIM technology. This alternative could be implemented on its own, in the absence of other regulatory options, or it could be implemented in combination with any of the alternative options.
However, the effectiveness of warnings and instructions is limited, because they depend on consumers not only receiving and understanding the message, but also being persuaded to heed the message. Although such a campaign could help inform consumers, the Commission preliminarily concludes based on the severity of injuries and recurring hazard patterns of blade-contact injuries, coupled with the high societal costs of these injuries, that a performance requirement is necessary to reduce the unreasonable risk of blade-contact injuries.
This section provides an analysis of the impact the proposed rule would have on small businesses. Whenever an agency is required to publish a proposed rule, section 603 of the Regulatory Flexibility Act (RFA) requires that the agency prepare an initial regulatory flexibility analysis (IRFA) that describes the impact that the rule would have on small businesses and other entities. 5 U.S.C. 603. An IRFA is not required if the head of an agency certifies that the proposed rule will not have a significant economic impact on a substantial number of small entities. 5 U.S.C. 605. The IRFA must contain:
(1) a description of why action by the agency is being considered;
(2) a succinct statement of the objectives of, and legal basis for, the proposed rule;
(3) a description of and, where feasible, an estimate of the number of small entities to which the proposed rule will apply;
(4) a description of the projected reporting, recordkeeping, and other compliance requirements of the proposed rule, including an estimate of the classes of small entities which will be subject to the requirement and the type of professional skills necessary for preparation of the report or record; and
(5) identification to the extent practicable, of all relevant Federal rules which may duplicate, overlap, or conflict with the proposed rule.
An IRFA must also contain a description of any significant alternatives that would accomplish the stated objectives of the applicable statutes and that would minimize any
The IRFA prepared by CPSA staff is contained in TAB B of staff's briefing package, and is summarized below.
The proposed rule for table saws would reduce an unreasonable risk of injury associated with blade-contact injuries on table saws. CPSC staff estimate that there were an average of approximately 32,000 emergency department-treated blade-contact injuries annually from 2004 to 2020. AIM technology has been shown to significantly mitigate the severity of injuries caused by a victim's finger, hand, or other body part contacting the blade while the table saw is in operation. Accordingly, the proposed rule would establish a mandatory performance requirement to address the risk of injuries associated with blade-contact injuries on table saws.
The objective of the proposed rule is to reduce the risk of serious injuries resulting from blade contact on table saws. The Commission published an ANPR in October 2011, which initiated this proceeding to evaluate regulatory options and potentially develop a mandatory standard to address the risks of blade-contact injuries associated with the use of table saws, and the Commission published an NPR in 2017. The proposed rule would be promulgated under the authority of the CPSA.
The proposed rule would apply to manufacturers, importers, and private labelers of table saws that are sold in the United States. As of March 2023, CPSC is aware of 23 firms that supply table saws to the U.S. market. Of these 23 firms, seven are small according to criteria established by the Small Business Administration (SBA). According to the SBA criteria, a table saw manufacturer is considered small if it has fewer than 500 employees, and a table saw importer is considered small if it has fewer than 100 employees. Private labelers of table saws are considered small if their annual revenue does not exceed $41.5 million in the case of home centers, $35 million in the case of department stores, and $8 million in the case of hardware stores.
Although the design and engineering of table saws may occur in the United States, most U.S. based suppliers contract the production of table saws to foreign manufacturers, generally in Taiwan or China. Shopsmith, the manufacturer of a multipurpose machine that includes a table saw, is the only small business believed to manufacture its product in the United States.
The proposed rule would require that all table saws incorporate an AIM technology that will reduce the risk of severe injury if the finger, hand, or other body part comes into contact with the blade while the saw is in operation. In particular, the rulemaking would require that a table saw cut no deeper than 3.5 mm into a test probe that approaches a spinning saw blade at a rate of 1 m/s before contacting the blade. The proposed rule sets out a performance requirement rather than a design standard; it does not specify the manner in which the table saw must meet this safety requirement. If a final rule is issued, manufacturers must certify pursuant to section 14 of the CPSA that the product conforms to the standard, based on either a test of each product or any reasonable method to demonstrate compliance with the requirements of the standard. For products that manufacturers certify, manufacturers would issue a general certificate of conformity (GCC).
Section 14 of the CPSA sets forth the requirements for GCCs. Among other requirements, each certificate must identify the manufacturer or private labeler issuing the certificate and any third party conformity assessment body on whose testing the certificate depends, the place of manufacture, the date and place where the product was tested, each party's name, full mailing address, telephone number, and contact information for the individual responsible for maintaining records of test results. The certificate must be in English. Certificates must be furnished to each distributor or retailer of the product and to the CPSC, if requested.
To comply with the proposed rule, table saw manufacturers would need to license or develop an AIM technology. To license a technology, manufacturers typically pay a royalty or license fee to the owner of the patents on the technology. At this time CPSC is not able to estimate the royalty cost for licensing an AIM technology.
If a manufacturer wished to avoid fees, the manufacturer would have the challenge of developing its own AIM technology that does not infringe on an existing patent. At a minimum, such an effort would likely cost at least several hundred thousand dollars and perhaps several million dollars, based on the estimated costs of developing the existing technologies.
According to several manufacturers, incorporating AIM technology would require a redesign of each table saw model. Estimates of the redesign and retooling costs ranged from about $100,000 to $700,000 per model. The redesign and retooling process would be expected to take 1 to 3 years depending on the number and severity of problems encountered in the process. The redesign and retooling costs for subsequent models could be less than the costs associated with the first model.
In addition to the redesign and retooling costs, there would be costs for the additional components needed to incorporate an AIM technology. Depending upon the specific system, additional parts may include a brake cartridge; cables, parts, or brackets to secure the brake cartridge; electrodes and assemblies; and a power supply or motor control. CPSC estimates that these additional components would increase the manufacturing cost of a table saw by between $58 and $74.
Most small manufacturers are expected to license an AIM technology instead of developing their own technology. The costs of developing their own AIM technology would likely be too high for most small manufacturers, especially given the challenge of developing a technology that did not infringe upon an existing patent. However, there is no certainty that small manufacturers would be able to negotiate acceptable licensing agreements with TTS or another patent
If a small table saw manufacturer is able to license AIM technology, it would have to determine whether each table saw model would remain profitable after redesigning it with AIM technology. Further, small table saw manufacturers that are able to license the AIM technology from TTS or another table saw manufacturer would pay royalties to a competitor. This could reduce their competitiveness in the table saw market.
Most small manufacturers of table saws also supply other types of woodworking or metal working equipment. Information provided by firms suggests that U.S. sales of table saws account for a small percentage of the total revenue of most small firms. One manufacturer suggested that U.S. table saw sales accounted for about 1 percent of the firm's total revenue. Two other firms estimated that U.S. table saw sales accounted for between 5 and 8 percent of their total revenue. IEc, 2016a. Actions that impact a firm's revenue by more than 1 percent are potentially significant. Given that small table saw manufacturers have expressed they may drop one or more table saw models or leave the market entirely if the proposed rule is adopted, the proposed rule could have a significant impact on small manufacturers.
The Occupational Safety and Health Administration (OSHA) has established standards that cover woodworking equipment used in workplace settings, rather than by consumers. These standards are codified at 29 CFR 1910. Generally, these requirements cover workplace safety and the use of safety devices such as blade guards and hoods. Currently, OSHA standards do not mandate performance requirements that would use AIM technology on table saws that are used by consumers. Accordingly, the Commission has not identified any Federal rules that duplicate or conflict with the proposed rule.
Under section 603(c) of the Regulatory Flexibility Act, an initial regulatory flexibility analysis must “contain a description of any significant alternatives to the proposed rule which accomplish the stated objectives of the applicable statutes and which minimize any significant impact of the proposed rule on small entities.” CPSC examined several alternatives to the proposed rule that could reduce the impact on small entities. These alternatives are discussed in section X of this preamble.
Pursuant to 5 U.S.C. 604, a final regulatory flexibility analysis contained in a final rule must include the agency's response to any comments filed by the Chief Counsel for Advocacy of the SBA in response to a proposed rule, and a detailed statement of any change made to the proposed rule as a response to the comments. Although there is no such requirement for an IRFA, staff's separate regulatory flexibility analysis memorandum
Generally, the Commission's regulations are considered to have little or no potential for affecting the human environment, and environmental assessments and impact statements are not usually required.
In accordance with Executive Order 12988 (February 5, 1996), the CPSC states the preemptive effect of the proposed rule, as follows:
The regulation for addressing blade-contact injuries on table saws is proposed under authority of the CPSA. 15 U.S.C. 2051-2089. Section 26 of the CPSA provides that:
Upon application to the Commission, a state or local standard may be excepted from this preemptive effect if the state or local standard: (1) provides a higher degree of protection from the risk of injury or illness than the CPSA standard, and (2) does not unduly burden interstate commerce. In addition, the Federal Government, or a state or local government, may establish or continue in effect a non-identical requirement for its own use that is designed to protect against the same risk of injury as the CPSC standard if the Federal, State, or local requirement provides a higher degree of protection than the CPSA requirement. 15 U.S.C. 2075(b).
Section 14(a) of the CPSA requires that products subject to a consumer product safety rule under the CPSA, or to a similar rule, ban, standard or regulation under any other act enforced by the Commission, must be certified as complying with all applicable CPSC-enforced requirements. 15 U.S.C. 2063(a). A final rule addressing blade-contact injuries on table saws would subject table saws to this certification requirement.
This proposed rule contains information collection requirements that are subject to public comment and review by the Office of Management and Budget (OMB) under the Paperwork Reduction Act of 1995 (PRA). 44 U.S.C. 3501-3520. We describe the provisions in this section of the document with an estimate of the annual reporting burden. Our estimate includes the time for gathering certificate data and creating General Certificates of Conformity (GCC), keeping and maintaining records associated with the GCCs, and disclosure of GCCs to third parties.
CPSC particularly invites comments on: (1) whether the collection of information is necessary for the proper performance of the CPSC's functions, including whether the information will have practical utility; (2) the accuracy of the CPSC'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
Staff estimates the burden of this collection of information as follows in table 13:
The proposed rule would require that manufacturers certify that their products conform to the rule and issue a GCC. As of March 2023, CPSC is aware of 23 firms that supply table saws to the U.S. market. Accordingly, we estimate there are 23 respondents that will respond to the collection annually. On average, each respondent may gather certificate data and create 7 certificates for complying table saws in the market. The time required to issue a GCC is conservatively estimated as about 5 minutes (although the actual time required is often substantially less). Therefore, the estimated burden associated with issuance of GCCs is 13.42 hours (161 responses × 5 minutes per response = 805 minutes or 13.42 hours). Staff estimates the hourly compensation for the time required to issue GCCs is $68.65 (U.S. Bureau of Labor Statistics, “Employer Costs for Employee Compensation,” March 2023, table 4, Private industry management, professional and related occupations:
For purposes of this burden analysis, we assume that the records supporting GCC creation, including testing records, would be maintained for a five-year period. Staff estimates burden of 1.25 minutes per year in routine recordkeeping. This adds up to approximately 3.35 hours (161 responses × 1.25 minutes per response = 201.25 minutes or 3.35 hours). Staff estimates the hourly compensation for the time required to maintain records is $31.45 (U.S. Bureau of Labor Statistics, “Employer Costs for Employee Compensation,” March 2023, table 4, Private industry sales and office occupations:
The rule would also require that GCCs be disclosed to third party retailers and distributors. Staff estimates another 161 third party disclosure responses, each one of which requires 15 minutes per year. This adds up to 2,415 minutes (161 responses × 15 minutes per response = 2,415 minutes) or 40.25 hours. Staff uses an hourly compensation for the time required to disclose certificates to third parties of $31.45 (U.S. Bureau of Labor Statistics, “Employer Costs for Employee Compensation,” March 2023, table 4, Private industry sales and office occupations:
Based on this analysis, CPSC estimates the annual PRA burden associated with the rule at 57.02 hours (13.42 hours + 3.35 hours + 40.25 hours) with a total burden cost of $2,292.50 ($921.28 + $105.36 + $1,265.86). There are no operating, maintenance, or capital costs associated with the collection.
As required under the PRA (44 U.S.C. 3507(d)), CPSC has submitted the information collection requirements of this proposed rule to the OMB for review. Interested persons are requested to submit comments regarding information collection by December 1, 2023, to the Office of Information and Regulatory Affairs, OMB as described under the
Section 9(f)(3) of the CPSA provides that a rule issued under sections 7 and 9, “including its effective date,” must be “reasonably necessary to eliminate or reduce an unreasonable risk injury associated with such product.” 15 U.S.C. 2058(f)(3). Section 9(g)(1) addresses effective dates in greater detail and requires that the effective date shall not exceed 180 days from the date the rule is promulgated, “unless the Commission finds, for good cause shown, that a later effective date is in the public interest and publishes its reasons for such finding.” 15 U.S.C. 2058(g)(1). Similarly, the effective date must not be less than 30 days after promulgation “unless the Commission for good cause shown determines that an earlier effective date is in the public interest.”
The Commission here proposes to find good cause in the public interest to extend the effective date of this rulemaking beyond the statutory range of 30 to 180 days, and to make the rulemaking effective 36 months from the date of publication of the final rule. The rule would apply to all table saws manufactured after the effective date. 15 U.S.C. 2058(g)(1). This effective date is being proposed in light of the unusual market conditions presented here, where the proposed safety rule requires use of advanced technologies that are capable of being supplied competitively, but currently are dominated by a single supplier. The proposed effective date is intended to allow time for development of both existing and new AIM technologies and establishment of commercial arrangements for licensing those technologies. It thereby addresses the concerns about potential unavailability of AIM solutions at affordable cost that some commenters raised in response to the NPR. In addition, this extended effective date
The CPSA requires the Commission to make certain findings when issuing a consumer product safety standard. 15 U.S.C. 2058(f)(1), (f)(3). The proposed findings for this proposed rule are stated in the appendix for proposed part 1264 and are based on information provided throughout this preamble. While the proposed findings are largely similar to those proposed in the 2017 NPR, they reflect newly available information.
We invite all interested persons to submit comments on any aspect of the proposed rule. The Commission specifically seeks comments on the following topics:
• Whether certain types of table saws, such as mini or micro tables saws, or table saws that are used primarily for commercial or industrial use, should be excluded from the scope of the rule;
• Whether the scope of the rule should be expanded to include types of saws other than table saws that may present a similar blade-contact hazard (
• Whether the definition of table saws should be revised, or whether other definitions are necessary; and
• Home-made table saws or other dangerous alternatives consumers may pursue if they are unwilling or are unable to purchase a table saw with AIM capabilities.
• Table saw sales by table saw type (bench, contractor, and cabinet), and information on the expected product life of each type of table saw;
• Opportunities to develop or otherwise obtain access to AIM technology for table saws, the time required to realize those opportunities, related barriers to access, and the anticipated cost of obtaining access to AIM technology; and
• The cost of AIM components, estimates of development and retooling costs, and expected time requirements to complete the development and retooling processes, including with respect to battery powered table saws.
• What impacts AIM technology may have on the utility of table saws for consumers.
• The effectiveness of AIM technologies. CPSC estimates that the requirements of the proposed rule would reduce the societal costs of blade-contact injuries by approximately 90 percent. The Commission seeks comments from the public on this estimate;
• The extent to which table saws are used for cutting wet wood or conductive materials such as non-ferrous metals;
• The extent to which the AIM technology may be bypassed; and
• The extent to which consumers may switch to alternative, potentially unsafe methods to cut wood if table saws are required to be equipped with AIM technology.
• Information on manufacturing costs. The Commission seeks comments that would allow us to make more precise estimates with respect to the cost impact of a rule requiring the use of AIM technology on table saws; and
• The feasibility of incorporating AIM technology into the design of small benchtop table saws, including battery powered benchtop table saws.
• How different detection methods may be applied as part of an AIM system, and appropriate test methods to properly evaluate the triggering of AIM systems employing these detection methods;
• Studies or tests that have been conducted to evaluate AIM technology in table saws; and
• Studies, research, or tests on the speed of the human hand/finger while woodworking and during actual blade-contact incidents, in particular.
• Whether a 36-month effective date for the proposed rule is reasonable, or whether a longer or shorter effective date is warranted;
• The feasibility of limiting or exempting a type or subset of table saws from the proposed rule; and
• The potential impact of the proposed rule on small entities, especially small businesses.
• The limits on manufacturing or exporting contained in the proposed rule's anti-stockpiling provision; and
• The anti-stockpiling provision's base period.
Comments should be submitted in accordance with the instructions in the
Section 9 of the CPSA requires the Commission to provide interested parties “an opportunity for oral presentation of data, views, or arguments.” 15 U.S.C. 2058(d)(2). The Commission must keep a transcript of such oral presentations.
Section 9(d)(1) of the CPSA requires the Commission to promulgate a final consumer product safety rule within 60 days of publishing a proposed rule. 15 U.S.C. 2058(d)(1). Otherwise, the Commission must withdraw the proposed rule if it determines that the rule is not reasonably necessary to eliminate or reduce an unreasonable risk of injury associated with the product or is not in the public interest.
The Commission finds that there is good cause to extend the 60-day period for this rulemaking. Under both the APA and the CPSA, the Commission must provide an opportunity for interested parties to submit written comments on a proposed rule. 5 U.S.C. 553; 15 U.S.C. 2058(d)(2). The Commission is providing 60 days for interested parties to submit written comments. A shorter comment period may limit the quality and utility of information CPSC receives in comments, particularly for areas where it seeks data and other detailed information that may take time for commenters to compile. Additionally, the CPSA requires the Commission to provide interested parties with an opportunity to make oral presentations of data, views, or arguments. 15 U.S.C. 2058. This requires time for the Commission to arrange a public meeting for this purpose and provide notice to interested parties in advance of that meeting, if any interested party requests the opportunity to present such comments. After receiving written and oral comments, CPSC staff must have time to review and evaluate those comments.
These factors make it impractical for the Commission to issue a final rule
For the reasons stated in this preamble, the Commission proposes requirements to address an unreasonable risk of injury associated with table saws.
Consumer protection, Imports, Information, Safety, Table saws.
For the reasons discussed in the preamble, the Commission proposes to add part 1264 to title 16 of the Code of Federal Regulations as follows:
15 U.S.C. 2056, 2058 and 2076.
(a) This part, a consumer product safety standard, establishes requirements for table saws, as defined in § 1264.2. These requirements are intended to reduce an unreasonable risk of injury associated with blade-contact injuries on table saws.
(b) Any table saw manufactured after [effective date of final rule] shall comply with the requirements stated in § 1264.3.
In addition to the definitions in section 3 of the Consumer Product Safety Act (15 U.S.C. 2051), the following definition applies for purposes of this part:
(a)
(b)
(c)
Any test procedure that will accurately determine compliance with the standard may be used.
(a)
(b)
The Consumer Product Safety Act requires that the Commission, in order to issue a standard, make the following findings and include them in the rule. 15 U.S.C. 2058(f)(3).
In 2017, there were an estimated 26,500 table saw blade-contact, emergency department treated injuries. Of these, an estimated 25,600 injuries (96. 4 percent) involved the finger. The most common diagnoses in blade-contact injuries were lacerations (approximately 16,100 injuries, or 60.9 percent of total injuries), fractures (approximately 5,500 injuries, or 20.6 percent), and amputations (approximately 2,800 injuries, or 10.7 percent).
On a broader scale, NEISS data collected by CPSC staff indicates that, from 2010 to 2021, there were an average of approximately 30,600 table saw blade-contact injuries per year. Staff determined that there was no discernible change in the pattern of blade-contact injuries or types of injuries over this period and detected no statistically significant downward trend over the period. Staff also conducted a trend analysis to include the rate of injury per 10,000 table saws in use for each year in the analysis. The analysis suggested that there was no discernible change in the risk of injury associated with blade contact related to table saws over this period, despite the transition of the market to modular blade guards and riving knives to meet voluntary standard requirements intended to reduce blade-contact injuries.
The number of table saws in use was estimated with the CPSC's Product Population Model (PPM), a statistical model that projects the number of products in use given examples of annual product sales and product failure rates. Total annual shipments of all table saws to the U.S. market from 2002 to 2017 ranged from 429,000 to 825,000, and total annual shipments from 2018 to 2020 are estimated to have ranged from 746,000 to 995,000. CPSC staff estimated that bench saws account for about 79 percent of the units sold and have an average product life of 10 years; contractor saws (including hybrids) account for 12 percent of the units sold and have an average product life of 17 years; and cabinet saws account for approximately 9 percent of the units sold and have an average product life of 24 years. Based on this information, staff projected that a total of about 8.2 million table saws were in use in the United States in 2017, including about 5.35 million bench saws (about 65.25 percent), 1.4 million contractor saws (about 17.1 percent), and 1.46 million cabinet saws (about 17.65 percent).
Consumers commonly purchase table saws for the straight sawing of wood and other materials, and more specifically, to perform rip cuts, cross cuts, and non-through cuts. Because operator finger/hand contact with the table saw blade is a dominant hazard pattern, the performance requirement would limit the depth of cut and significantly reduce the frequency and severity of blade-contact injuries on table saws.
However, the rule will increase table saw production costs. CPSC expects that the prices for the least expensive bench saws now available would more than double, to $400 or more. In general, the retail prices of bench saws could increase by as much as $285 to $700 per unit, and the retail prices of contractor and cabinet saws could rise by as much as $450 to $1,080 per unit. These higher prices may be mitigated in the longer run, but the extent of any future mitigation is unknown.
Because of the likely decline in sales following the promulgation of a rule, consumers who choose not to purchase a new table saw due to the higher price will experience a loss in utility by forgoing the use of table saws, or because they will continue to use older saws that they would have preferred to replace. There may also be some other impacts on utility, such as an increase in the weight and (potentially) the
The Commission considered alternatives to the rule. For example, the Commission considered not taking regulatory action, deferring to the voluntary standard development process, exempting or limiting certain table saws from regulation, extending the rule's effective date, and relying on information and education campaigns. However, the Commission finds that these alternatives would not adequately mitigate the unreasonable risk of blade-contact injuries on table saws.
CPSC estimates that 26,500 table saw-related injuries involving blade contact were treated in hospital emergency departments in 2017. Based on this estimate of blade-contact injuries initially treated in hospital EDs, CPSC's injury cost model projects an additional 22,675 blade-contact injuries treated in other treatment settings. Thus, there was an estimated annual total of about 49,176 medically treated blade-contact injuries in 2017. An estimated 96.4 percent of these injuries involved the finger. The most common diagnoses in blade-contact injuries are laceration injuries, fractures, amputations, and avulsion. Thousands of amputations (an estimated 2,800 injuries in 2017 alone) occur each year on table saws. When compared to all other workshop products, table saws account for an estimated 52.4 percent of all amputations related to workshop products in 2015.
Existing safety devices, such as the blade guard and riving knife, do not adequately reduce the number or severity of blade-contact injuries on table saws. Table saws have been equipped with these passive safety devices since 2010, and there is no evidence that these safety devices have adequately reduced or mitigated blade-contact injuries. In CPSC's 2017 Special Study, an analysis of each individual case provided anecdotal information on the usage of modular and traditional blade guards. Overall, of the estimated 26,500 table saw blade-contact injuries treated in emergency departments in 2017, the blade guard was not in use in an estimated 88.9 percent of injuries (23,600). Anecdotally, the blade guard was not in use for 89.2 percent of the cases (91 of 102 cases) involving table saws equipped with traditional blade guards, and the blade guard was not in use in 88.0 percent of the cases (22 of 25 cases) involving table saws equipped with modular blade guards.
CPSC's trend analysis of the annual estimated number of emergency department-treated injuries associated with table saws covered two timespans after the voluntary standard implemented the requirement for riving knives and modular blade guards on table saws (2010 to 2021 and 2015 to 2021). The data showed that there was no discernible change in the number of injuries or types of injuries associated with table saw blade contact over either of the analyzed periods. A trend analysis to assess the risk of injury per 10,000 table saws in use also showed there was no discernible change in the risk of injury associated with table saw blade contact over the analyzed time periods.
The net benefits for the proposed rule would range from approximately $3,153 per bench saw to approximately $11,597 per cabinet saw over each unit's expected product life. Aggregate net benefits over approximately 1 year's production and sale of table saws could, across all categories of table saws, range from about $1.28 billion to $2.32 billion.
The proposed rule includes an effective date of 36 months. The Commission considered a later effective date to mitigate the impact of the proposed rule for some manufacturers, but a later date could also delay a market-wide distribution of table saws with AIM technology. Given the net benefits expected from incorporating AIM technology, delaying the effective date of the proposed rule would also delay the expected benefits of the rule.
The Commission concludes that there is an unreasonable risk of injury associated with blade-contact injuries on table saws and finds that the rule and the effective date is reasonably necessary to reduce that unreasonable risk of injury.
This rule is intended to address an unreasonable risk of blade-contact injuries on table saws. The rule would reduce and mitigate the severity of blade-contact injuries on table saws in the future; thus, the rule is in the public interest.
The current voluntary standard for table saws is Underwriters Laboratories Inc. (UL) 62841-3-1,
The voluntary standard does not adequately address blade-contact injuries on table saws. There has been no statistically significant reduction in the number or severity of blade-contact injuries from 2008 to 2021. The relevant voluntary standards began requiring tables saws to include modular blade guard systems in 2010. In addition, available data indicates that a large percentage of table saw users encounter circumstances in which blade guards must be removed in order to effectively use their saws, and at least 100 known blade-contact injuries involving table saws equipped with modular blade guard systems have occurred.
Based on CPSC staff's analysis of NEISS data and the CPSC's Injury Cost Model (ICM), the Commission finds that the rule would address an estimated 49,176 medically treated blade-contact injuries annually. The societal costs of these injuries (in 2021 dollars and using a 3 percent discount rate) amounted to about $3.97 billion in 2021. Overall, medical costs and work losses account for about 31 percent of these costs, or about $1.2 billion. The intangible costs associated with pain and suffering account for the remaining 69 percent of injury costs.
Increased manufacturing costs, as well as the expected costs of replacement parts for the AIM system, would range from about $338 to $1,210 per bench saw, about $531 to $1,376 per contractor saw, and about $576 to $1,276 per cabinet saw. These costs likely would be mitigated somewhat over time, but the extent of any future mitigation is unknown. Based on one year's production and sale of table saws, aggregate gross costs could range from about $208 million to $400 million annually. In addition to these direct manufacturing and replacement parts costs, many firms would likely need to pay royalty fees to patent holders for the AIM technology, which CPSC estimates could amount to approximately 8 percent of saws' wholesale price.
Additionally, some consumers who would have purchased table saws at the lower pre- regulatory prices will likely choose not to purchase new table saws due to price increases. The cost impact of the proposed rule on market sales may reduce aggregate sales by as much as 17 percent to 50 percent annually. The decline in sales would result in lost utility to consumers who choose not to purchase table saws because of the higher prices. Further reductions in consumer utility may result from the added weight, and hence, reduced portability associated with addition the AIM technology on table saws.
Nevertheless, because of the substantial societal costs attributable to blade-contact injuries (nearly $4 billion annually), and the expected high rate of effectiveness of the rule in preventing those injuries, the estimated aggregate net benefits are expected to range from about $1.28 billion to $2.32 billion annually. Therefore, the Commission concludes that the benefits expected from the rule bear a reasonable relationship to its costs.
The Commission considered less burdensome alternatives to the proposed rule addressing blade-contact injuries on table saws and concluded that none of these alternatives would adequately reduce the risk of injury.
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Food and Drug Administration, HHS.
Proposed rule.
The Food and Drug Administration (FDA, the Agency, or we) is proposing to amend its prior notice regulations to add a requirement that the prior notice for articles of food arriving by international mail include the name of the mail service and a mail tracking number and add a requirement that prior notice and food facility registration information be submitted within a certain timeframe, after certain notices of refusal or hold have been issued (“post-refusal” and “post-hold” submission). We are also proposing certain technical changes, including those that reflect expanded capabilities of the Automated Broker Interface/Automated Commercial Environment/International Trade Data System (ABI/ACE/ITDS) and the Prior Notice Systems Interface (PNSI). These amendments, if finalized, will improve program efficiency and better enable FDA to protect the U.S. food supply and public health.
Either electronic or written comments on the proposed rule must be submitted by January 30, 2024. Submit written comments (including recommendations) on the collection of information under the Paperwork Reduction Act of 1995 (PRA) by January 2, 2024.
You may submit comments as follows. Please note that late, untimely filed comments will not be considered. The
Submit electronic comments in the following way:
•
• If you want to submit a comment with confidential information that you do not wish to be made available to the public, submit the comment as a written/paper submission and in the manner detailed below (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
Submit comments on the information collection under the PRA to the Office of Management and Budget (OMB) at
FDA uses prior notice information to, among other things, determine what products should be inspected upon arrival into the United States. The proposed rule, if finalized, would: (1) amend § 1.281(b)(10) (21 CFR 1.281(b)(10)) to add a requirement for people submitting prior notice for articles of food arriving by international mail to provide the name of the mail service and the mail tracking number;
To effectively carry out its responsibility to detect food articles offered for import that are adulterated or pose a public health risk, FDA must be able to identify and inspect food items that are imported by international mail. Receiving the name of the mail service and a mail tracking number for articles of food arriving by international mail would enable FDA to better coordinate with the U.S. Postal Service (USPS), U.S. Customs and Border Protection (CBP), and other Agencies, to track and inspect articles that have been identified as a possible bioterrorism risk. Currently, FDA does not receive the name of the mail service or tracking numbers for articles of food arriving by international mail. This makes it difficult for FDA to stop articles from being delivered to U.S. recipients that FDA believes pose a bioterrorism risk. Having the name of the mail service and tracking numbers for articles of food arriving by international mail would help FDA better plan its operations and stop such articles from being delivered.
Many foods are regularly imported by mail, and in FDA's experience, these foods can present similar risks to the U.S. food supply as other imported foods. Further, FDA's presence at international mail facilities supports that people are increasingly using the mail system to import foods, including foods that could pose a significant risk to public health. The use of the mail system to import food highlights the need for FDA to have the name of the mail service and tracking number to adequately monitor and refuse or hold specific food shipments.
Additionally, requiring a reasonable timeframe for post-refusal and post-hold submissions of prior notice and food facility registration may reduce the amount of time articles subject to refusal or holds are held at ports of entry, thus reducing associated monetary charges. It would also enable FDA to utilize its resources more effectively by delineating the post-refusal and post-hold submission timeframe. Without a date by which such submissions must be made, FDA has spent longer periods of time (
Finally, regarding the technical changes to the regulations, FDA's PNSI was developed to receive prior notice information for import submissions that could not be accommodated in the Automated Commercial System (ACS), mainly mail and baggage submissions, and prior notice for foods refused under section 801(m) of the Federal Food, Drug, and Cosmetic Act (FD&C Act) (21 U.S.C. 381(m)). ACE, ACS's successor system, can now accommodate such submissions. Therefore, we also propose to amend § 1.280(a)(2) (21 CFR 1.280(a)(2)) to remove the requirement that prior notice of foods arriving by international mail be submitted through FDA PNSI. If finalized as proposed, prior notice for food arriving by international mail can be submitted through the PNSI or through the U.S. CBP ABI/ACE/ITDS. Further, we propose to amend § 1.281(a)(5)(iv),
FDA proposes to amend §§ 1.281(b)(10), 1.283(a)(6) and (c), 1.285(g) and (i), and 1.280(a)(2). Currently, § 1.281(b)(10), which applies to articles arriving by international mail, requires only the submission of the anticipated date of mailing. If this amendment is finalized as proposed, § 1.281(b)(10) will include an additional requirement to submit the name of the mail service and mail tracking number in the prior notice to FDA for food articles arriving by international mail.
Sections 1.283(a)(6) and (c) and 1.285(g) and (i), with few exceptions and if other requirements are met, require an article of food that has been refused under section 801(m) of the FD&C Act (no prior notice or inaccurate prior notice) or held under section 801(1) of the FD&C Act (importation from unregistered foreign facility that is required to register) to be treated as general order merchandise under CBP regulations if no prior notice is submitted or resubmitted, or no registration is provided. However, these sections do not provide a timeframe within which such submissions must be made. If this amendment is finalized as proposed, § 1.283(c)(1) and (2) will require submission or resubmission of prior notice within 10 calendar days from the date the notice of refusal was issued. We believe that 10 days is an appropriate timeframe because it allows time for certain persons who want to file a request for FDA review pursuant to § 1.283(d), to file their request, receive a response of the review decision, and submit or resubmit prior notice if necessary.
In addition, if finalized as proposed, § 1.285(i)(1) will require submission of a valid registration within 30 calendar days from the date a notice of hold was issued. We believe that 30 days is an appropriate timeframe in this context because it allows time to obtain and submit a valid registration if necessary. It also allows time to file a request for FDA review pursuant to § 1.285(j), receive a response of the review decision, and submit or resubmit registration if necessary. If a prior notice is not submitted or resubmitted, or a registration is not provided within the timeframe, these changes will require the article to be dealt with as set forth in CBP regulations relating to general order merchandise. Unless otherwise agreed to by CBP and FDA, the article may only be sold for export or destroyed.
FDA also proposes to amend § 1.280(a)(2). This regulation currently requires prior notice of articles of food imported or offered for import by international mail, and other transaction types that cannot be made through ABI/ACE/ITDS, to be submitted through FDA PNSI. At this time, there are no longer any transaction types that cannot be made through ABI/ACE/ITDS. Therefore, this proposed amendment would remove the requirement that only the FDA PNSI be used for the submission of prior notice for articles of food arriving by international mail. Finally, FDA proposes to amend § 1.281(a)(5)(iv), (b)(4)(iv), and (c)(5)(iv) to refer to § 106.80 instead of § 106.90.
Section 801(m) of the FD&C Act directs FDA to issue regulations requiring prior notice to FDA of an article of food that is imported or offered for import into the United States for the purpose of enabling such article to be inspected at ports of entry into the United States. Section 801(l) of the FD&C Act requires that an article of food that is imported or offered for import into the United States and that is from a foreign facility for which a registration has not been submitted to FDA under section 415 of the FD&C Act (21 U.S.C. 350d) be held at the port of entry for the article until the foreign facility is so registered. Additionally, section 701(b) of the FD&C Act (21 U.S.C. 371(b)) authorizes FDA and CBP to prescribe regulations for the efficient enforcement of section 801 of the FD&C Act.
We estimate the costs of the proposed rule, as accrued to submitters or transmitters of prior notices to read and understand the rule, and to gather and provide international mail tracking information, to be negligible. The proposed rule, if finalized, would not significantly increase costs to small entities. See the Preliminary Economic Analysis of Impacts for a detailed cost and benefit analysis.
FDA proposes to amend the prior notice regulation as follows: (1) amend § 1.281(b)(10) to add a requirement to provide the name of the mail service and mail tracking number for articles of food imported or offered for import by international mail;
The information in a prior notice enables FDA to target import inspections more effectively, thereby helping to protect our nation's food supply against terrorist acts and other public health emergencies. FDA regulations require that specific information about food articles imported or offered for import into the United States be submitted in advance of arrival of the food.
Currently, FDA does not require submission of the name of the international mail service or the mail tracking number for food articles imported by international mail; therefore, FDA has limited ability to track or locate the movement of food articles imported by international mail, which could pose a public health risk. Receiving the name of the mail carrier and the mail tracking number for food articles imported by international mail would assist FDA in conducting investigations and surveillance operations in response to a food-related emergency. Access to the name of the mail service and the tracking number would also enable FDA to act quickly to identify the affected food articles and prevent contamination of the food supply. It would also help to improve emergency response time, as FDA and other Agencies would be better equipped to identify, alert, and secure those facilities or entities that could be potentially impacted by a bioterrorism incident. Requiring the submission of this information would bolster FDA's efforts to prevent violative and potentially dangerous food shipments from entering the United States at international mail facilities, and also could help FDA to track, identify, inspect, and contain such shipments. With this information available, FDA could better utilize its resources and plan its operations, given its knowledge of the movement, location, and time of the food's arrival to the U.S. port of entry.
Providing the name of the international mail service and the tracking number in the prior notice will also enable FDA to effectively coordinate a quicker response with other Agencies in the event of any suspected act of bioterrorism or public health emergency. For instance, if FDA receives information indicating that a particular international mail package contains a food article that could be affected by a bioterrorist incident or other food-related public health emergencies, FDA alerts CBP and USPS about the food article and the potential risk it may pose. Knowing the tracking number of that suspected contaminated food and the mail service carrier would help FDA, CBP, and USPS to track the origin and location of the international mail. The mail package could then be more easily identified and separated from other foods or incoming mail to safely conduct inspection to determine the degree of risk the article of food poses. This would enable FDA to prevent the article of food from entering the U.S. food supply chain more swiftly.
Moreover, articles of food imported or offered for import without a prior notice or with inadequate prior notice are subject to refusal of admission or hold under section 801(m) of the FD&C Act. Articles of food imported or offered for import from an unregistered foreign food facility that is required to register are subject to being held under section 801(l) of the FD&C Act. If an article of food is refused admission under section 801(m) or held under section 801(l), certain persons may submit a request, within 5 calendar days of the refusal or hold, asking FDA to review whether the article is subject to the prior notice requirements, whether the information submitted in a prior notice is complete and accurate, or whether the facility associated with the article is subject to food facility registration requirements (§§ 1.283(d) and 1.285(j)). Alternatively, submitters or transmitters can attempt to come into compliance by submitting or resubmitting prior notice after refusal of admission (§ 1.283(c)), or by obtaining and providing a registration number for post-hold submissions (§ 1.285(i)). Requests for review under §§ 1.283(d) and 1.285(j) may not be used to submit or resubmit prior notice or obtain a registration number.
Currently, FDA regulations do not require a timeframe within which an article of food must be brought into compliance by submitting or resubmitting prior notice or submitting a registration number if the article of food is refused or held. As a result, when articles of food are refused or held under section 801(m)(1) or section 801(l) of the FD&C Act, they may be refused or held for several weeks while submitters or transmitters submit multiple replacement non-compliant prior notice or registration submissions to be reviewed by FDA. This practice consumes significant amounts of FDA reviewers' time and may lead to importers incurring large demurrage charges (
The Bioterrorism Act amended the FD&C Act and created the requirement that FDA receive certain information about imported foods before their arrival in the United States. On February 3, 2003, FDA and the Department of Treasury (U.S. Customs Service)
For articles not arriving by international mail, the prior notice rule requires the submission of anticipated arrival information and planned shipment information to provide FDA with information necessary for planning examinations and communicating with CBP for enforcement and examination purposes (see § 1.281(a)(11) and (17), 68 FR 58974 at 59009 and 59011). Further, FDA requires the identification of the carrier because the information is necessary to enable FDA and CBP to identify the appropriate article of food for inspection or holding when the food arrives in the United States (see § 1.281(a)(16), 68 FR 58974 at 59011). The 2008 final rule added the ability, under § 1.281(a)(11), to submit the tracking number for food articles arriving by express consignment operator or carrier, as part of the anticipated arrival information of the food or planned shipment information (73 FR 66294 at 66297). In the 2017 amendment to the prior notice rule, we removed certain limitations regarding the submission of a tracking number (82 FR 15627 at 15628). In doing so, we reiterated the importance of the tracking number to learn the information that FDA needs to make entry determinations, such as port, date, and time of arrival. In the 2017 amendment, we also eliminated some requirements for submitting prior notice due to the expanded capabilities of ACE, such as the requirement to submit articles that have been refused under section 801(m)(1) of the FD&C Act or subpart I
In addition, in the 2003 interim final rule, we stated that under § 1.283(a)(6), if no prior notice, correction (
In the 2008 final rule, we “made a minor change in the text of § 1.283(a)(6) by replacing the phrase, `in a timely fashion,' with the phrase, `in accordance with paragraph (d) [of § 1.283],' to clarify that the timeliness of a request for FDA review is found at paragraph (d) [of that section]. We made a similar change in § 1.285(g)” (73 FR 66294 at 66370). That change requires requests for FDA review under §§ 1.283(d) and 1.285(j) to be submitted within 5 calendar days of the refusal or hold and removes the requirement that post-refusal and post-hold submissions be submitted in a timely fashion or be subject to any timeframe. However, §§ 1.283(a)(6) and 1.285(g) state that, if an article of food is refused or held under section 801(m) or (l) of the FD&C Act, and no prior notice is submitted or resubmitted, or no registration is provided, the food must be dealt with as set forth in CBP regulations relating to general order merchandise.
It is difficult for FDA to administer these provisions without a requirement for when the prior notice must be submitted or resubmitted or for when registration must be provided. There is currently no uniform and predictable date by which such submissions must be made before the article is treated as CBP general order merchandise. As such, there have been instances where articles are refused or held for prolonged periods of time (
We are issuing this proposed rule under section 801(m) of the FD&C Act, which directs FDA to implement a regulation requiring prior notification to FDA of food that is imported or offered for import into the United States; section 801(l) of the FD&C Act, which requires that a food article being imported or offered for import into the United States that is from a foreign facility for which a registration has not been submitted under section 415 of the FD&C Act be held at the port of entry until the foreign facility is so registered; and section 701(b) of the FD&C Act, which authorizes FDA and CBP to jointly issue regulations for the efficient enforcement of section 801 of the FD&C Act.
In the 2003 interim final rule, we stated that the planned shipment information is necessary to ensure the effective enforcement of section 801(m) of the FD&C Act (68 FR 58974 at 59012). The tracking information is considered part of the planned shipment information as it is currently allowed to be submitted under § 1.281(a)(17). In both the 2003 and 2008 final rules, we explained that certain information not explicitly mentioned in section 801(m) of the FD&C Act is required for the efficient enforcement of the Bioterrorism Act (68 FR 58974 at 59001 and 73 FR 66294 at 66340). We now tentatively determine that, for articles of food arriving by international mail, the name of the mail service and the mail tracking number is necessary for the efficient enforcement of section 801(m) of the FD&C Act. Additionally, we tentatively determine that imposing a timeframe on post-refusal and post-hold submissions of prior notice and food facility registration is necessary for the efficient enforcement of sections 801(m) and 801(l) of the FD&C Act.
The proposed rule, if finalized, will amend §§ 1.281(b)(10) to require the submission of the name of the mail service and mail tracking number in the prior notice for articles of food sent by international mail. Currently, § 1.281(b)(10) requires only the submission of the anticipated date of mailing. If the proposed rule is finalized, § 1.281(b)(10) will include an additional requirement to submit the name of the international mail service used in mailing the article and the mail tracking number in the prior notice of the article to FDA, for food articles arriving by international mail. We believe international mail packages usually bear tracking numbers that could be used to track the mail or identify its country of origin. We welcome comments regarding any country where a tracking number is not issued for international mail.
The proposed rule will also amend §§ 1.283(a)(6) and (c), and 1.285(g) and (i)(1) to require post-refusal and post-hold submissions of prior notice to be submitted within 10 calendar days and post-refusal and post-hold submissions of registration be submitted within 30 calendar days from the date the notice of refusal or hold was issued. If the prior notice or registration requirements are not met within these timeframes, the article shall be dealt with as set forth in CBP regulations relating to general order merchandise. Unless otherwise agreed to by CBP and FDA, the article may only be sold for export or destroyed. We believe that 30 calendar days is an appropriate timeframe for registration submissions because it gives time to obtain and submit a valid registration, as well as time to file a request for review by FDA and receive a response of the review decision, and to submit the required information, if necessary. However, we are willing to consider other timeframes. Therefore, FDA invites public comment on whether 30 calendar days would be an appropriate timeframe for registration submission or if a different timeframe would be more appropriate. For comments suggesting a timeframe, we request an explanation of the reason.
If finalized, the proposed change to § 1.280(a)(2) will remove the requirement that articles of food arriving by international mail be submitted in FDA PNSI. This change will allow a prior notice submitter to use CBP's ABI/ACE/ITDS as an alternative to FDA PNSI to submit prior notice of articles of food imported or offered for import by international mail.
This proposal would also make technical amendments to § 1.281(a)(5)(iv), (b)(4)(iv), and (c)(5)(iv) to correct a cross-reference in the regulation to § 106.80 instead of § 106.90.
FDA is proposing that the final rule based on this proposal become effective 30 days after the date of publication in the
We have examined the impacts of the proposed rule under Executive Order 12866, Executive Order 13563, Executive Order 14094, the Regulatory Flexibility Act (5 U.S.C. 601-612), and the Unfunded Mandates Reform Act of 1995 (Pub. L. 104-4).
Executive Orders 12866, 13563, and 14094 direct us to assess all benefits, costs, and transfers of available regulatory alternatives and, when regulation is necessary, to select regulatory approaches that maximize net benefits (including potential economic, environmental, public health and safety, and other advantages; distributive impacts; and equity). Rules are “significant” under Executive Order 12866 Section 3(f)(1) (as amended by Executive Order 14094) if they “have an annual effect on the economy of $200 million or more (adjusted every 3 years by the Administrator of [the Office of Information and Regulatory Affairs (OIRA)] for changes in gross domestic product); 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, territorial, or tribal governments or communities.” OIRA has determined that this proposed rule is not a significant regulatory action under Executive Order 12866 Section 3(f)(1).
The Regulatory Flexibility Act requires us to analyze regulatory options that would minimize any significant impact of a rule on small entities. Because the proposed change to prior notice requirements would not significantly increase costs to small entities, we propose to certify that the proposed rule will not have a significant economic impact on a substantial number of small entities.
The Unfunded Mandates Reform Act of 1995 (section 202(a)) requires us to prepare a written statement, which includes estimates of anticipated impacts, before proposing “any rule that includes any Federal mandate that may result in the expenditure by State, local, and tribal governments, in the aggregate, or by the private sector, of $100,000,000 or more (adjusted annually for inflation) in any one year.” The current threshold after adjustment for inflation is $177 million, using the most current (2022) Implicit Price Deflator for the Gross Domestic Product. This proposed rule would not result in an expenditure in any year that meets or exceeds this amount.
This proposed rule would amend existing prior notice regulations to require the submission of tracking information for food articles imported using international mail. To estimate costs and benefits associated with the proposed rule, we assume that the appropriate baseline is the state of the world with current prior notice regulations. We then compare the likely impacts of the proposed rule against this baseline. The costs of the proposed rule, if finalized, accrue to submitters or transmitters of prior notices for reading and understanding the rule and the additional time needed to gather and provide the tracking information. When annualized over a period of 10 years, we estimate these costs range from approximately $0.04 million to $0.50 million at a 3 percent rate of discount. At a 7 percent rate of discount, these costs range from approximately $0.04 million to $0.52 million. Our primary annualized estimates are approximately $0.27 million and $0.28 million at 3 and 7 percent rates of discount, respectively.
We estimate benefits in the form of cost-savings which accrue to transmitters of prior notices and to FDA. These cost-savings range in annualized value from approximately $0.04 million to $0.18 million for both 3 and 7 percent rates of discount. The primary annualized value is $0.09 million for both rates of discount. These estimates are summarized in table 1.
We have developed a comprehensive Preliminary Economic Analysis of Impacts that assesses the impacts of the proposed rule. The full preliminary analysis of economic impacts is available in the docket for this proposed rule (Ref. 1) and at
We have determined under 21 CFR 25.30(h) that this proposed 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.
This proposed rule contains information collection provisions that are subject to review by OMB under the PRA (44 U.S.C. 3501-3521). A description of these provisions is given in the
FDA invites comments on these topics: (1) whether the proposed collection of information is necessary for the proper performance of FDA's functions, including whether the information will have practical utility; (2) the accuracy of FDA's estimate of the burden of the proposed collection of information, including the validity of the methodology and assumptions used; (3) ways to enhance the quality, utility, and clarity of the information to be collected; and (4) ways to minimize the burden of the collection of information on respondents, including through the use of automated collection techniques, when appropriate, and other forms of information technology.
FDA intends to use the information to better identify, track, contain, and inspect articles of food sent through international mail that it has reason to believe present a bioterrorism threat or public health concern. We believe having the name of the mail service and the mail tracking number will improve our ability to identify and prevent such food articles from entering the U.S. food supply, as well as reduce challenges associated with locating articles without this information.
Based on 2021 fiscal year data from our Online Reporting Analysis Decision Support System, we estimate that 26,200 persons submit prior notice through PNSI. We assume 5,460, or roughly 20 percent, are importing or offering for import articles of food by international mail. The proposed requirement to submit tracking information applies only to persons importing or offering for import articles of food by international mail. The number of prior notices for international mail entries per respondent per year ranges from 1 to approximately 5,000. The average number of prior notice submissions for international mail entries per person per year is approximately 143. Of the more than 18 million prior notices received by FDA per year, approximately 781,219 are identified as “mail.”
We estimate a one-time average burden of 30 minutes per respondent to learn the new requirement and coordinate with mail services to establish best practices for receiving and providing the information. In addition to the one-time burden, we estimate an average recurring annual burden of 4 minutes per prior notice mail submission. The one-time total burden for all the 5,460 respondents amounts to 163,800 minutes (5,460 × 30). The total recurring burden for all the 781,219 mail entries is 3,124,876 minutes (781,219 × 4). Therefore, we estimate the average total annual recurring burden in hours to be 54,811 (163,800 + 3,124,876 ÷ 60).
To ensure that comments on information collection are received, OMB recommends that written comments be submitted through
In compliance with the PRA (44 U.S.C. 3407(d)), we have submitted the information collection provisions of this proposed rule to OMB for review. These
We have analyzed this proposed rule in accordance with the principles set forth in Executive Order 13132. We have determined that this proposed rule does not contain policies that 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. Accordingly, we conclude that the rule does not contain policies that have federalism implications as defined in the Executive Order and, consequently, a federalism summary impact statement is not required.
We have analyzed this proposed rule in accordance with the principles set forth in Executive Order 13175. We have tentatively determined that the rule does not contain policies that would have a substantial direct effect on one or more Indian Tribes, on the relationship between the Federal Government and Indian Tribes, or on the distribution of power and responsibilities between the Federal Government and Indian Tribes. FDA solicits comments from tribal officials on any potential impact on Indian Tribes from this proposed action.
The following reference is on display in the Dockets Management Staff (see
Cosmetics, Drugs, Exports, Food labeling, Imports, Labeling, Reporting and recordkeeping requirements.
Therefore, under the Federal Food, Drug, and Cosmetic Act and under authority delegated to the Commissioner of Food and Drugs, FDA proposes to amend 21 CFR part 1 as follows:
15 U.S.C. 1333, 1453, 1454, 1455, 4402; 19 U.S.C. 1490, 1491; 21 U.S.C. 321, 331, 332, 333, 334, 335a, 342, 343, 350c, 350d, 350j, 352, 355, 360b, 360ccc, 360ccc-1, 360ccc-2, 362, 371, 374, 381, 382, 384a, 387, 387a, 387c, 393, and 2223; 42 U.S.C. 216, 241, 243, 262, 264, 271.
(a) * * *
(2) The FDA Prior Notice System Interface (FDA PNSI) at
(a) * * *
(5) * * *
(iv) The lot or code numbers or other identifier of the food if required by the act or FDA regulations,
(b) * * *
(4) * * *
(iv) The lot or code numbers or other identifier of the food if required by the act or FDA regulations,
(10) The anticipated date of mailing, the name of the mail service, and the mail tracking number;
(11) The name and address of the U.S. recipient; and
(c) * * *
(5) * * *
(iv) The lot or code numbers or other identifier of the food if required by the act or FDA regulations,
(a) * * *
(6)
(c) * * *
(1) If an article of food is refused under paragraph (a)(1)(i) of this section (no prior notice) and the food is not exported, prior notice must be submitted in accordance with §§ 1.280 and 1.281(c) within 10 calendar days from the date the notice of refusal was issued.
(2) If an article of food is refused under paragraph (a)(1)(ii) of this section (inaccurate prior notice) and the food is not exported, the prior notice should be canceled in accordance with § 1.282 and you must resubmit prior notice in accordance with §§ 1.280 and 1.281(c) within 10 calendar days from the date the notice of refusal was issued.
(g)
(i) * * *
(1) To resolve a hold, if an article of food is held under paragraph (b) of this section because it is from a foreign facility that is not registered, the facility must be registered, and a valid registration number must be obtained and submitted to the FDA Division of Food Defense Targeting within 30 calendar days from the date the notice of hold was issued.
Centers for Medicare & Medicaid Services (CMS) and Office of the National Coordinator for Health Information Technology (ONC), Department of Health and Human Services (HHS).
Proposed rule.
This proposed rule would implement the provision of the 21st Century Cures Act specifying that a health care provider determined by the HHS Inspector General to have committed information blocking shall be referred to the appropriate agency to be subject to appropriate disincentives set forth through notice and comment rulemaking. In particular, this rulemaking would establish for such health care providers a set of appropriate disincentives using authorities under applicable Federal law.
To be assured consideration, written or electronic comments must be received at one of the addresses provided below, no later than 5 p.m. on January 2, 2024.
You may submit comments, identified by RIN 0955-AA05, by any of the following methods (please do not submit duplicate comments). Because of staff and resource limitations, we cannot accept comments by facsimile (FAX) transmission.
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Alexander Baker, Office of Policy, Office of the National Coordinator for Health Information Technology (ONC), (202) 690-7151, for general issues.
Elizabeth Holland, Centers for Medicare & Medicaid Services (CMS), (443) 934-2532, for issues related to the Promoting Interoperability Program and the Promoting Interoperability performance category of the Merit-Based Incentive Payment System.
Aryanna Abouzari, Centers for Medicare & Medicaid Services (CMS), (415) 744-3668 or
This proposed rule would implement the 21st Century Cures Act (Cures Act) provision for referral of a health care provider (individual or entity) determined by the HHS Office of Inspector General (OIG) to have committed information blocking “to the appropriate agency to be subject to appropriate disincentives using authorities under applicable Federal law, as the Secretary sets forth through notice and comment rulemaking” (42 U.S.C. 300jj-52(b)(2)(B), Public Health Service Act (PHSA) section 3022(b)(2)(B), as added by section 4004 of the Cures Act (Pub. L. 114-255, Dec. 13, 2016)). The proposals in this rule would establish disincentives for certain health care providers (as defined in 45 CFR 171.102) that are also Medicare-enrolled providers or suppliers.
This proposed rule would establish disincentives applicable to certain health care providers (as defined in 45 CFR 171.102) determined by OIG to have committed information blocking (as defined in 45 CFR 171.103) that are also Medicare-enrolled providers or suppliers. The proposed rule also provides information related to OIG's investigation of claims of information blocking and referral of a health care provider to an appropriate agency to be subject to appropriate disincentives. Finally, the rule proposes to establish a process by which information would be shared with the public about health care providers that OIG determines have committed information blocking.
Although the proposals in this rule would not establish disincentives for all of the health care providers included in the 45 CFR 171.102 definition, the health care providers to whom these disincentives would apply furnish a broad array of services to a significant number of both Medicare beneficiaries and other patients. Thus, this set of disincentives would directly advance HHS priorities for deterring information blocking, while also advancing appropriate sharing of electronic health information (EHI) by health care providers
We believe it is important to establish appropriate disincentives that account for all health care providers that fall within the definition of health care provider (45 CFR 171.102). While effective deterrence of information blocking can benefit patients by reducing the degree to which health care providers engage in this practice, fewer patients will benefit from these deterrent effects if disincentives have not been established for all of the health care providers within the definition of health care provider at 45 CFR 171.102. In section IV. of this proposed rule, we request information on how we can build on the proposals in this rule to establish disincentives for other health care providers, particularly those health care providers not participating in the CMS programs identified in this rule.
Consistent with PHSA section 3022(b)(2)(B), the proposals in this rule to establish disincentives use authorities under applicable Federal law, as follows:
• Under the authority for the Medicare Promoting Interoperability Program in the Social Security Act (SSA), at sections 1886(b)(3)(B)(ix) and 1886(n) for eligible hospitals, and at section 1814(l)(4) for critical access hospitals (CAHs), CMS proposes that an eligible hospital or CAH would not be a meaningful electronic health record (EHR) user in an EHR reporting period if OIG refers, during the calendar year of the reporting period, a determination that the eligible hospital or CAH committed information blocking as defined at 45 CFR 171.103. As a result, an eligible hospital subject to this disincentive would not be able to earn the three quarters of the annual market basket increase associated with qualifying as a meaningful EHR user, while a CAH subject to this disincentive would have its payment reduced to 100 percent of reasonable costs, from the 101 percent of reasonable costs it might have otherwise earned, in an applicable year.
• Under the authority in SSA sections 1848(o)(2)(A) and (D) and 1848(q)(2)(A)(iv) and (B)(iv), for the Promoting Interoperability performance category of the Merit-based Incentive Payment System (MIPS), CMS proposes that a health care provider defined in 45 CFR 171.102 that is a MIPS eligible clinician (as defined in 42 CFR 414.1305 and including groups) would not be a meaningful EHR user in a performance period if OIG refers, during the calendar year of the reporting period, a determination that the MIPS eligible clinician committed information blocking as defined at 45 CFR 171.103. CMS also proposes that the determination by OIG that a MIPS eligible clinician committed information blocking would result in the MIPS eligible clinician, if required to report on the Promoting Interoperability performance category of MIPS, not earning a score in the performance category (a zero score), which is typically a quarter of the total final composite performance score (a “final score” as defined at 42 CFR 414.1305). CMS proposes to codify this proposal under the definition of meaningful EHR user for MIPS at 42 CFR 414.1305 and add it to the requirements for earning a score for the MIPS Promoting Interoperability performance category at 42 CFR 414.1375(b).
• Under the authority in SSA section 1899(b)(2)(G) for the Medicare Shared Savings Program (Shared Savings Program), CMS proposes that a health care provider as defined in 45 CFR 171.102 that is an accountable care organization (ACO), ACO participant, or ACO provider/supplier, if determined by OIG to have committed information blocking as defined at 45 CFR 171.103, would be barred from participating in the Shared Savings Program for at least 1 year. This may result in a health care provider being removed from an ACO or prevented from joining an ACO; and in the instance where a health care provider is an ACO, this would prevent the ACO's participation in the Shared Savings Program.
Executive Order 12866 on Regulatory Planning and Review and Executive Order 13563 on Improving Regulation and Regulatory Review direct agencies to assess all costs and benefits of available regulatory alternatives and, if regulation is necessary, to select regulatory approaches that maximize net benefits (including potential economic, environmental, public health and safety effects, distributive impacts, and equity). Section 3(f) of Executive Order 12866, as amended by Executive Order 14094, defines a “significant regulatory action” as an action that is likely to result in a rule that may: (1) have an annual effect on the economy of $200 million or more (adjusted every 3 years by the Administrator of the Office of Information and Regulatory Affairs (OIRA) for changes in gross domestic product), 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, territorial, 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 legal or policy issues for which centralized review would meaningfully further the President's priorities or the principles set forth in the Executive Order, as specifically authorized in a timely manner by the Administrator of OIRA in each case. The Office of Management and Budget (OMB) has determined that this proposed rule is not a significant regulatory action, as the potential costs associated with this proposed rule would not be greater than $200 million per year and it does not meet any of the other requirements to be a significant regulatory action.
The Cures Act was enacted on December 13, 2016, “[t]o accelerate the discovery, development, and delivery of 21st century cures, and for other purposes.” Section 4004 of the Cures Act added section 3022 to the PHSA. Section 3022(a)(1) of the PHSA defines information blocking as practice that, except as required by law or specified by the Secretary pursuant to rulemaking, is likely to interfere with, prevent, or materially discourage access, exchange, or use of electronic health information. If the practice is conducted by a health information technology developer, exchange, or network, such developer, exchange, or network knows, or should know, that such practice is likely to interfere with, prevent, or materially discourage the access, exchange, or use of electronic health information. If the practice is conducted by a health care provider, such provider knows that such practice is unreasonable and is likely to interfere with, prevent, or materially discourage access, exchange, or use of electronic health information. Section 3022(a)(3) of the PHSA further provides that the Secretary shall, through rulemaking, identify reasonable and necessary activities that do not constitute information blocking. Section 3022(a)(4) of the PHSA states that the term “information blocking” does not include any practice or conduct occurring prior to the date that is 30 days after December 13, 2016 (the date of the enactment of the Cures Act).
Section 3022(b)(1) of the PHSA authorizes OIG to investigate information blocking claims. Section 3022(b)(1)(B) of the PHSA authorizes OIG to investigate claims that “a health care provider engaged in information blocking.” Section 3022(b)(2)(B) of the PHSA provides that any health care provider OIG determines to have committed information blocking shall be referred to the appropriate agency to be subject to appropriate disincentives using authorities under applicable Federal law, as the Secretary sets forth through notice and comment rulemaking. Sections 3022(b)(1)(A) and (C) of the PHSA authorize OIG to investigate health information technology (IT) developers of certified health IT or other entities offering certified health IT, health information exchanges, and health information networks. Section 3022(b)(2)(A) of the PHSA authorizes the imposition of civil money penalties (CMPs)
PHSA section 3022 also authorizes ONC, the HHS Office for Civil Rights (OCR), and OIG to consult, refer, and coordinate to resolve claims of information blocking. PHSA section 3022(b)(3)(A) authorizes OIG to refer claims of information blocking to OCR if OIG determines a consultation regarding the health privacy and security rules promulgated under section 264(c) of the Health Insurance Portability and Accountability Act of 1996 (HIPAA) (42 U.S.C. 1320d-2 note) will resolve such claims. PHSA section 3022(d)(1) specifies that the National Coordinator may serve as a technical consultant to OIG and the Federal Trade Commission (FTC) for purposes of carrying out section 3022 and may share information related to claims or investigations of information blocking with the FTC for purposes of such investigations, in addition to requiring the National Coordinator to share information with OIG, as required by law.
PHSA section 3022(d)(4) requires the Secretary, in carrying out section 3022 and to the extent possible, to ensure that information blocking penalties do not duplicate penalty structures that would otherwise apply with respect to information blocking and the type of individual or entity involved as of the day before the date of enactment of the Cures Act. Section 3022(a)(7) of the PHSA states that, in carrying out section 3022, the Secretary shall ensure that health care providers are not penalized for the failure of developers of health information technology or other entities offering health information technology to such providers to ensure that such technology meets the requirements to be certified under Title XXX of the PHSA.
We address the statutory basis for each proposed disincentive in greater detail in section III.C. of this proposed rule.
On March 4, 2019, a proposed rule titled “21st Century Cures Act: Interoperability, Information Blocking, and the ONC Health IT Certification Program” (ONC Cures Act Proposed Rule) appeared in the
On May 1, 2020, a final rule titled “21st Century Cures Act: Interoperability, Information Blocking, and the ONC Health IT Certification Program” (ONC Cures Act Final Rule) appeared in the
The ONC Cures Act Final Rule finalized definitions that are necessary to implement the statutory information blocking provision in PHSA section 3022, including definitions related to the four classes of individuals and entities covered by the statutory information blocking provision: health care providers, health IT developers, health IT networks, and health IT exchanges.
As the term “health care provider” is not explicitly defined in section 3022 of the PHSA as added by section 4004 of the Cures Act, the ONC Cures Act Final Rule adopted in 45 CFR 171.102 the definition of health care provider in section 3000(3) of the PHSA
The ONC Cures Act Final Rule also established in 45 CFR 171.102 regulatory definitions for “health information network or health information exchange” and “health IT developer of certified health IT,”
On November 4, 2020, an interim final rule with comment period titled “Information Blocking and the ONC Health IT Certification Program: Extension of Compliance Dates and Timeframes in Response to the COVID-19 Public Health Emergency” (ONC Cures Act Interim Final Rule) appeared in the
On April 24, 2020, a proposed rule titled “Grants, Contracts, and Other Agreements: Fraud and Abuse; Information Blocking; Revisions to the Office of Inspector General's Civil Money Penalty Rules” (OIG CMP Proposed Rule) appeared in the
OIG subsequently addressed these proposals in a final rule, “Grants, Contracts, and Other Agreements: Fraud and Abuse; Information Blocking; Office of Inspector General's Civil Money Penalty Rules,” which appeared in the
As mentioned above, a health care provider that also meets the definition of health IT developer of certified health IT, or health information network or health information exchange, or both, under 45 CFR 171.102, may be subject to information blocking CMPs (88 FR 42828). OIG has stated that as part of its assessment of whether a health care provider is a health information network or exchange that could be subject to civil money penalties for information blocking, OIG anticipates engaging with the health care provider to better understand its functions and to offer the provider an opportunity to explain why it is not a health information network or exchange (88 FR 42828).
In this section, we discuss certain statutory terms and provisions in PHSA sections 3022(a) and (b) related to the establishment of appropriate disincentives for health care providers as defined in 45 CFR 171.102. For brevity, we refer to PHSA section 3022(b)(2)(B), which states that health care providers that OIG has determined to have committed information blocking “shall be referred to the appropriate agency to be subject to appropriate disincentives using authorities under applicable Federal law, as the Secretary sets forth through notice and comment rulemaking,” as the “disincentives provision” throughout this section.
The disincentives provision states that an individual or entity that is a health care provider determined by OIG to have committed information blocking shall be referred to the “appropriate agency” to be subject to appropriate disincentives. Accordingly, we propose to define “appropriate agency” in 45 CFR 171.102 to mean a government agency that has established disincentives for health care providers that OIG determines have committed information blocking. We note that, under the disincentives provision, an “agency” may be any component of HHS that has established a disincentive or disincentives on behalf of the Secretary of HHS, including any of the Staff or Operating Divisions of HHS. For example, the disincentives proposed in section III.C. of this proposed rule are proposed under authorities held by CMS, which is an Operating Division of HHS. Under our proposals, CMS would be the “appropriate agency” to which OIG would refer a health care provider to be subject to disincentives.
We invite public comments on our proposed definition of “appropriate agency.”
We propose to interpret the phrase “authorities under applicable Federal law” in the disincentives provision to mean that an appropriate agency may only subject a health care provider to a disincentive established using authorities that could apply to information blocking by a health care provider subject to the authority, such as health care providers participating in a program supported by the authority. In section III.C. of this proposed rule, CMS identifies the authority under which each disincentive is proposed.
The Cures Act does not specify or provide illustrations for the types of disincentives that should be established. As such, we propose to define the term “disincentive” in 45 CFR 171.102 to mean a condition that may be imposed by an appropriate agency on a health care provider that OIG determines has committed information blocking and is specifically identified in 45 CFR 171.1001(a). In section III.B.2 of this proposed rule, we propose to identify in 45 CFR 171.1001(a) those disincentives that have been established pursuant to the statute for the express purpose of deterring information blocking practices.
The term “appropriate” for disincentives is likewise not defined in PHSA section 3022, nor are illustrations provided. Under this proposal, a disincentive for a health care provider that OIG has determined to have committed information blocking may be any condition, established through notice and comment rulemaking, that would, in our estimation, deter information blocking practices among health care providers subject to the information blocking regulations. In section III.C. of this proposed rule, we describe the potential impact that each proposed disincentive would have on a health care provider.
We note that the disincentives provision does not limit the number of disincentives that an appropriate agency can impose on a health care provider. Accordingly, we propose that a health care provider would be subject to each appropriate disincentive that an agency has established through notice and comment rulemaking and is applicable to the health care provider. Imposing cumulative disincentives, where applicable, would further deter health care providers from engaging in information blocking.
We invite public comments on our proposals to establish disincentives in section III.C. of this proposed rule.
In this section we provide additional detail about the process by which a health care provider that has committed information blocking would be subject to appropriate disincentives for information blocking. We begin with a discussion of an OIG investigation of a claim of information blocking, which may result in OIG determining that the health care provider committed information blocking. We then discuss how OIG would refer the health care provider to an appropriate agency. Next, we address certain general issues related to the application of a disincentive by an appropriate agency. Finally, we propose an approach to make information available to the public about health care providers that have been subject to an appropriate disincentive for information blocking, and about health information networks/health information exchanges and health IT developers of certified health IT that have been determined by OIG to have committed information blocking.
The following information regarding OIG's anticipated approach to information blocking investigations of health care providers is not a regulatory proposal and is provided for information purposes only. This preamble discussion of investigation priorities for health care provider information blocking claims is not binding on OIG and HHS. It does not impose any legal restrictions related to OIG's discretion to choose which health care provider information blocking complaints to investigate.
As with other conduct that OIG has authority to investigate, OIG has discretion to choose which information blocking complaints to investigate. To maximize efficient use of resources, OIG generally focuses on selecting cases for investigation that are consistent with its enforcement priorities and intends to apply that rationale to its approach for selecting information blocking complaints for investigation. In the OIG CMP Final Rule, OIG described its enforcement priorities for health IT developers of certified health IT or other entities offering certified health IT, health information exchanges, and health information networks that have committed information blocking and are subject to CMPs. OIG stated that its information blocking CMP enforcement priorities will include practices that: (i) resulted in, are causing, or have the potential to cause patient harm; (ii) significantly impacted a provider's ability to care for patients; (iii) were of long duration; (iv) caused financial loss to Federal healthcare programs, or other government or private entities; or (v) were performed with actual knowledge. OIG stated that it expected these priorities will evolve as it gains more experience investigating information blocking (88 FR 42822).
For investigations of health care providers, OIG expects to use four of these priorities: (i) resulted in, are causing, or have the potential to cause patient harm; (ii) significantly impacted a provider's ability to care for patients; (iii) were of long duration; and (iv) caused financial loss to Federal health care programs, or other government or private entities. Again, although not a regulatory proposal, OIG welcomes comments on these priorities, including comments on whether other issues specific to information blocking by health care providers should warrant changing these priorities or adding others.
OIG emphasizes that information blocking, as defined in PHSA section 3022(a)(1) and in 45 CFR 171.103, includes an element of intent. The standard of intent for health care providers was established by the Cures Act in PHSA section 3022(a)(1)(B)(ii): “if conducted by a health care provider,
As noted in the OIG CMP Final Rule (88 FR 42822), explanation of OIG's priorities can provide the public with a better understanding of how OIG anticipates allocating its resources for information blocking enforcement. Applicable to this proposed rule, explanation of OIG's priorities can provide the public with a better understanding of how OIG anticipates allocating its resources to investigate claims that health care providers engaged in information blocking. Prioritization ensures OIG can effectively allocate its resources to target information blocking claims that have more negative effects on patients, providers, and healthcare programs. OIG's enforcement priorities will inform its decisions about which information blocking allegations to pursue, but these priorities are not dispositive. Each allegation will present unique facts and circumstances that must be assessed individually. Each allegation will be assessed to determine whether it implicates one or more of the enforcement priorities, or otherwise merits further investigation and potential enforcement action. Although OIG's anticipated priorities are framed around individual allegations, OIG may evaluate allegations and prioritize investigations based in part on the volume of claims relating to the same (or similar) practices by the same entity or individual (for example, a health care provider or health information network). There is no specific formula OIG can apply to every allegation that allows it to effectively evaluate and prioritize which claims merit investigation.
In this section we summarize the discussion in the OIG CMP Final Rule of the ways ONC, OCR, and OIG will consult, refer, and coordinate on information blocking claims as permitted by the Cures Act (88 FR 42823).
PHSA section 3022(d)(1) states that the National Coordinator may serve as a technical consultant to the Inspector General. OIG will accordingly consult with ONC throughout the investigative process. Additionally, PHSA section 3022(b)(3)(A) provides the option for OIG to refer claims of information blocking to OCR when a consultation regarding the health privacy and security rules promulgated under section 264(c) of HIPAA will resolve such claims. Depending on the facts and circumstances of the claim, OIG will exercise this statutory discretion as appropriate to refer information blocking claims to OCR for resolution. There is no set of facts or circumstances that will always be referred to OCR. OIG will work with OCR to determine which claims should be referred to OCR under the authority provided in PHSA section 3022(b)(3)(A). In addition to section 3022(b)(3)(A), OIG may request technical assistance from OCR during an information blocking investigation. It is important to note that while section 3022(b)(3)(A) of the PHSA specifically provides OIG with the authority to refer information blocking claims to OCR, OIG's statutory authority to refer to OCR allegations of violations of the HIPAA Privacy, Security, or Breach Notification Rules
Finally, OIG stated that it anticipates coordinating with other HHS agencies to avoid duplicate penalties as identified in section 3022(d)(4) of the PHSA. Depending on the facts and circumstances, OIG stated that it might also consult or coordinate with a range of other government agencies, including CMS, FTC, or others (88 FR 42824).
During an investigation of information blocking by a health care provider, but prior to making a referral, OIG will coordinate with the appropriate agency to which OIG plans to refer its determination of information blocking. This coordination will ensure that the appropriate agency is aware of a potential referral and that OIG provides the information the agency needs to take appropriate action. OIG's referral to the appropriate agency will explain its determination that a health care provider committed information blocking, including meeting the requirements of the intent element of PHSA section 3022(a)(1)(B)(ii).
We note that PHSA section 3022 authorizes OIG to investigate claims of information blocking and requires OIG to refer health care providers to an appropriate agency when it determines a health care provider has committed information blocking, to be subject to appropriate disincentives. Once OIG has concluded its investigation and is prepared to make a referral, it will send information to the appropriate agency indicating that the referral is made pursuant to the statutory requirement in PHSA section 3022(b)(2)(B). As part of the referral, OIG will provide information to explain its determination, which may include: the dates when OIG has determined the information blocking violation(s) occurred; analysis to explain how the evidence demonstrates the health care provider committed information blocking (for instance, that the health care provider's “practice”
Following an investigation through which OIG determines a health care provider has committed information blocking, and OIG's referral of this determination to an appropriate agency, the health care provider would be subject to disincentives that have been
We propose to add a new subpart J to 45 CFR part 171, entitled “Disincentives for Information Blocking by Health Care Providers.” As proposed in 45 CFR 171.1000, this subpart would set forth disincentives that an appropriate agency would impose on a health care provider based on a determination of information blocking referred to that agency by OIG, and certain procedures related to those disincentives. We propose in 45 CFR 171.1001(a) that health care providers that commit information blocking would be subject to the following disincentives from an appropriate agency based on a determination of information blocking referred by OIG, where applicable. The disincentives proposed for inclusion in 45 CFR 171.1001(a)(1) through (3) correspond to the appropriate disincentives proposed in section III.C. of this proposed rule, which include:
• An eligible hospital or CAH as defined in 42 CFR 495.4 is not a meaningful EHR user as also defined in that section;
• A MIPS eligible clinician as defined in 42 CFR 414.1305, who is also a health care provider as defined in 45 CFR 171.102, is not a meaningful EHR user for MIPS as also defined in 42 CFR 414.1305; and
• ACOs who are health care providers as defined in 45 CFR 171.102, ACO participants, and ACO providers/supplies will be removed from, or denied approval to participate, in the Medicare Shared Savings Program as defined in 42 CFR part 425 for at least 1 year.
In the future, if we propose to establish additional disincentives, we intend to add such disincentives to the disincentives listed in 45 CFR 171.1001(a).
We propose in 45 CFR 171.1002(a) through (d) that an appropriate agency that imposes a disincentive or disincentives in § 171.1001(a) would send a notice (using usual methods of communication for the program or payment system) to the health care provider subject to the disincentive or disincentives. This notice would include:
• A description of the practice or practices that formed the basis for the determination of information blocking referred by OIG;
• The basis for the application of the disincentive or disincentives being imposed;
• The effect of each disincentive; and
• Any other information necessary for a health care provider to understand how each disincentive will be implemented.
The information in this notice would be based upon the authority used to establish the disincentive and policy finalized by the agency establishing the disincentive. For instance, the notice may contain specific information regarding when a disincentive would be imposed, which may be contingent on both the authority used to establish the disincentive and the specific policy under which the disincentive is established. We note that, where a health care provider that has been determined to have committed information blocking is subject to multiple disincentives established by an appropriate agency, nothing in this proposal would prevent the appropriate agency from combining these notices into a single communication.
Following the application of a disincentive, a health care provider, as defined in 45 CFR 171.102, may have the right to appeal administratively a disincentive if the authority used to establish the disincentive provides for such an appeal. We note that PHSA section 3022(b)(2)(C) requires that the imposition of CMPs that apply to health IT developers of certified health IT, and health information networks or health information exchanges, that have committed information blocking, follow the procedures of SSA section 1128A, which includes procedures for appeals. However, the Cures Act did not provide similar instruction regarding appeals of disincentives for health care providers established under PHSA section 3022(b)(2)(B). Therefore, any right to appeal administratively a disincentive, if available, would be provided under the authorities used by the Secretary to establish the disincentive through notice and comment rulemaking.
We believe that it is important to promote transparency about how and where information blocking is impacting the nationwide health information technology infrastructure. Publicly releasing information, including applicable public settlements, penalties, and disincentives, about actors that have been determined by OIG to have committed information blocking can inform the public about how and where information blocking is occurring within the broader health information technology infrastructure.
PHSA section 3001(c)(4) requires that the National Coordinator maintain an internet website “to ensure transparency in promotion of a nationwide health information technology infrastructure.” We believe this provision provides the National Coordinator with the authority to post information on ONC's website if that information has an impact on issues relating to transparency in the promotion of a nationwide health information technology infrastructure. We propose to add a new subpart K to 45 CFR part 171, entitled “Transparency for Information Blocking Determinations, Disincentives, and Penalties.” As proposed in 45 CFR 171.1100, this subpart would set forth the information that would be publicly posted on ONC's website about actors that have been determined by OIG to have committed information blocking.
We propose in 45 CFR 171.1101 that, in order to provide insight into how and where information blocking conduct is impacting the broader nationwide health information technology infrastructure, ONC would post on its public website information about actors that have been determined by OIG to have committed information blocking. For health care providers that are subject to a disincentive, we propose in 45 CFR 171.1101(a)(1) that the following information would be posted: health care provider's name, business address (to ensure accurate provider identification), the practice found to have been information blocking, the disincentive(s) applied, and where to find additional information, where available, about the determination of information blocking that is publicly available via HHS or another part of the U.S. Government. We propose in 45 CFR 171.1101(a)(2) that the information specified in 45 CFR 171.1101(a)(1) would not be posted prior to a disincentive being imposed and would not include information about a disincentive that has not been applied. We also recognize that under the authorities for the disincentives proposed in section III.C. of this proposed rule, an appropriate agency may have other obligations related to release of information about a participant that is a health care provider (as defined in 45 CFR 171.102) in programs under that authority. For instance, under SSA section 1848(q)(9)(C), MIPS eligible clinicians have a right to review information about their performance in MIPS prior to having this information publicly posted
In order to provide insight into how and where information blocking conduct is impacting the broader nationwide health information technology infrastructure, we also propose in 45 CFR 171.1101(b)(1) to post on ONC's public website information specified in 45 CFR 171.1101(b)(1) about health information networks (HINs)/health information exchanges (HIEs) and health IT developers of certified health IT that have been determined by OIG to have committed information blocking and have either resolved their civil money penalty (CMP) liability with OIG or had a CMP imposed by OIG for information blocking under subpart N of 42 CFR part 1003. To ensure accurate identification of actors, we propose in 45 CFR 171.1101(b)(1) to post the type of actor (
The last information we propose to post on our public website, for all actors, would be the two types of information mentioned above regarding health care providers. First, in 45 CFR 171.1101(a)(1)(iii) and (b)(1)(iii), we propose to post, a description of the practice, as the term is defined in 45 CFR 171.102 and referenced in 45 CFR 171.103, found to have been information blocking. In the case of a resolved CMP liability, we would post the practice alleged to be information blocking. This information will help provide transparency into how information blocking conduct is impacting the nationwide health information technology infrastructure, and in particular, specific practices that are impacting the infrastructure. Second, in 45 CFR 171.1101(a)(1)(v) and (b)(1)(iv), we propose to post where to find additional information about the determination (or resolution of CMP liability) of information blocking that is publicly available via HHS or, where applicable, another part of the U.S. Government. This information could include hyperlinks and other information, to help interested persons find any additional information about the determination, settlement, penalty, or disincentive that has been made publicly available by the U.S. Government. Such publicly available information would include any summaries or media releases that may be posted by OIG, or another part of HHS, on their internet website(s). It could also include additional information that may be made publicly available about the determination by or other parts of the U.S. Government. For example, if an actor who has exhausted applicable administrative appeal procedures and brought action in a Federal court for review of the decision that has become final, we could post information on our website about the existence of the court action and where or how to access information about the determination, or resulting court action, that has been made publicly available by the court. This information would provide additional context for how information blocking conduct is impacting the nationwide health information technology infrastructure.
Publicly posting information about actors that have been determined by OIG to have committed information blocking is important for providing transparency into how and where information blocking conduct is occurring within and impacting the broader nationwide health information technology infrastructure. Between April 5, 2021, and September 30, 2023, we received over 800 claims of information blocking through the Report Information Blocking Portal.
In this section (III.C.), we propose to establish a set of disincentives for health care providers that have committed information blocking. These disincentives would be imposed following a referral of a determination of information blocking by OIG. Each of the proposed disincentives is being established using authorities under applicable Federal law, consistent with PHSA section 3022(b)(2)(B).
The disincentives proposed in this section would apply to a subset of the individuals and entities meeting the information blocking regulations'
We recognize that the disincentives proposed in this rule would only apply to certain health care providers and that the information blocking regulations are also applicable to health care providers that are not eligible to participate in these programs. However, this proposed rule is a first step that focuses on authorities which pertain to certain health care providers that furnish a broad array of health care services to large numbers of Medicare beneficiaries and other patients. We believe optimal deterrence of information blocking calls for imposing appropriate disincentives on all health care providers (as defined at 45 CFR 171.102) determined by OIG to have committed information blocking. In section IV. of this proposed rule, we request public comment on establishing disincentives, using applicable Federal law, that could be imposed on a broader range of health care providers.
We believe the disincentives proposed in this rule would deter information blocking by health care providers. However, we recognize that the actual monetary impact resulting from the application of the disincentives proposed in this section may vary across health care providers subject to the disincentive.
For example, the disincentive proposed in section III.C.3. of this proposed rule for the MIPS Promoting Interoperability performance category would result in an adjustment to payments under Medicare Part B to MIPS eligible clinicians (as defined in 42 CFR 414.1305). This disincentive would reduce to zero the Promoting Interoperability performance category score of any MIPS eligible clinician that has been determined by OIG to have committed information blocking (as defined at 45 CFR 171.103) during the calendar year (CY) of the referral of a determination from OIG. However, the actual financial impact experienced by a health care provider as a result of this proposed disincentive being applied in MIPS would vary. For example, Part B payments to the MIPS eligible clinician are subject to a MIPS payment adjustment factor, which CMS determines based on the MIPS eligible clinician's final score. In determining each MIPS eligible clinician's final score, CMS takes into account the assigned weight of, and the MIPS eligible clinician's performance in, the four MIPS performance categories, including the Promoting Interoperability performance category. The MIPS eligible clinician's final score then determines whether the eligible clinician earns a negative, neutral, or positive payment adjustment factor that will be applied to the amounts otherwise paid to the MIPS eligible clinician under Medicare Part B for covered professional services during the applicable MIPS payment year.
In the interest of addressing this variability, we considered whether we could propose an alternative approach under which we would tailor the monetary impact of a disincentive imposed on a health care provider to the severity of the conduct in which the health care provider engaged. However, we do not believe it would be feasible to develop such an approach for the disincentives we propose for health care providers. Because disincentives must be established using authorities under applicable Federal law, the statute under which a disincentive is being established would need to specifically authorize or provide sufficient discretion for an appropriate agency to be able to adjust the monetary impact of the disincentive to fit the gravity or severity of the information blocking the health care provider has been determined to have committed. Based on our review of potential authorities under which to establish disincentives, we believe many authorities do not provide discretion to adjust the monetary impact of a potential disincentive in this fashion. For instance, in section III.C.2. of this proposed rule, CMS proposes to establish a disincentive through the Medicare Promoting Interoperability Program utilizing authority in SSA section 1886. Under this authority, CMS, as specified in section 1886(b)(3)(B)(ix)(I) of the SSA, adjusts payments for eligible hospitals by a fixed proportion, on the basis of whether or not an eligible hospital (as defined in section 1886(n)(6)(B) of the SSA) is a meaningful EHR user.
We intend to use existing Medicare Promoting Interoperability Program authority concerning the meaningful use of certified EHR technology (CEHRT) to impose disincentives on eligible hospitals and CAHs that OIG determines have committed information blocking (defined in 45 CFR 171.103) where OIG refers a determination that the eligible hospital or CAH committed information blocking. Under section 1886(n)(3)(A) of the SSA, an eligible hospital or CAH
Under section 1886(b)(3)(B)(ix) of the SSA, if an eligible hospital does not demonstrate that it has met the requirements to be a meaningful EHR user under section 1886(n)(3)(A), CMS will reduce the eligible hospital's payment by three quarters of the applicable percentage increase in the market basket update or rate-of-increase for hospitals. Under section 1814(l)(4) of the SSA, if the Secretary determines that a CAH has not been a meaningful EHR user for a given EHR reporting period, CMS will pay that CAH 100 percent of its reasonable costs, instead of 101 percent of reasonable costs, which is the amount that the CAH would have received as a meaningful EHR user under the Medicare Promoting Interoperability Program.
HHS has authority to apply disincentives to both eligible hospitals and CAHs. PHSA section 3022(b)(2)(B) authorizes HHS to apply disincentives to health care providers OIG determines have committed information blocking. As discussed in section II.B.1 of this proposed rule, HHS has adopted, for purposes of the information blocking regulations in 45 CFR part 171, the definition of health care provider in section 3000(3) of the PHSA, which includes health care providers that are eligible for participation in the Medicare Promoting Interoperability Program. The
As discussed previously, the requirements under SSA section 1886(n)(3)(A) that an eligible hospital or CAH must meet to a be meaningful EHR user, particularly the first two requirements under SSA section 1886(n)(3)(A)(i) and (ii), would be substantially undermined and frustrated if the eligible hospital or CAH commits information blocking, such that application of an appropriate disincentive is warranted. To be considered a meaningful EHR user under section 1886(n)(3)(A) of the SSA, an eligible hospital or CAH must, in brief: (1) demonstrate to the satisfaction of the Secretary the use of CEHRT in a meaningful manner, (2) demonstrate to the satisfaction of the Secretary that their CEHRT is connected in a manner that provides for electronic exchange of health information to improve the quality of health care, and (3) use CEHRT to submit information concerning quality measures and other measures as specified. With respect to the electronic exchange of health information requirement in SSA section 1886(n)(3)(A)(ii), an eligible hospital or CAH must demonstrate to the satisfaction of the Secretary that its CEHRT is “connected in a manner that provides, in accordance with law and standards applicable to the exchange of information, for the electronic exchange of health information to improve the quality of health care, such as promoting care coordination, and . . . demonstrates . . . that the hospital has not knowingly and willfully taken action (such as to disable functionality) to limit or restrict the compatibility or interoperability of the certified EHR technology.” Two examples of the CMS requirements for health information exchange include the requirement for eligible hospitals and CAHs to report on the Health Information Exchange Objective and the Provider to Patient Exchange Objective, both of which are part of the requirements for demonstrating the meaningful use of CEHRT, in accordance with SSA section 1886(n)(3).
By establishing a disincentive for information blocking under the Medicare Promoting Interoperability Program, we are using an authority under applicable Federal law as required in section 3022(b)(2)(B) of the PHSA. Health care providers OIG determines have committed information blocking, and for which OIG refers its determination to CMS, would be subject to a disincentive under applicable law as they are participating in the Medicare Promoting Interoperability Program authorized by that applicable law. In addition, the Medicare Promoting Interoperability Program already requires eligible hospitals and CAHs to engage in practices that encourage the access, exchange, and use of electronic health information to avoid a downward payment adjustment. The requirements an eligible hospital or CAH must meet to be treated as a meaningful EHR user in section 1886(n)(3)(A)(i) and (ii) of the SSA specify that an eligible hospital or CAH must demonstrate that it meets these requirements “to the satisfaction of the Secretary.” CMS believes these provisions authorize the Secretary to interpret these requirements through rulemaking as necessary to ensure that an eligible hospital or CAH satisfies the requirements to be a meaningful EHR user as defined by the Secretary. Specifically, CMS believes it is appropriate for the Secretary to interpret these requirements through rulemaking to determine that an eligible hospital or CAH that has committed information blocking, and for which OIG refers its determination of information blocking to CMS, has not met the definition of a meaningful EHR user. This proposal is consistent with the goals of the Medicare Promoting Interoperability Program, which include the advancement of CEHRT utilization, focusing on interoperability and data sharing (81 FR 79837). Information blocking by eligible hospitals and CAHs would frustrate both these goals.
CMS also believes the proposed disincentive under the Medicare Promoting Interoperability Program would be an appropriate disincentive that would similarly deter information blocking by other eligible hospitals and CAHs, consistent with the discussion in section III.A.3. of this proposed rule. While the exact monetary impact of the disincentive would vary based on the specific eligible hospital, CMS believes a reduction of three quarters of the annual market basket update would deter eligible hospitals from engaging in information blocking because it would reduce the inpatient prospective payment system (IPPS) payment that an eligible hospital could have earned had it met other requirements under the Medicare Promoting Interoperability Program. Similarly, though the exact dollar amount would vary based on the specific CAH, CMS believes that receiving 100 percent of reasonable costs instead of the 101 percent of reasonable costs that a CAH may have earned for successful participation in the Medicare Promoting Interoperability Program would deter information blocking by CAHs because it would reduce the reimbursement a CAH could have received had it met other requirements under the Medicare Promoting Interoperability Program.
HHS analyzed the range of potential disincentive amounts an eligible hospital could be subject to if the proposed disincentive was imposed, in order to illustrate the degree to which this disincentive could deter eligible hospitals from engaging in information blocking. We used payment data for IPPS eligible hospitals from the CMS Medicare Inpatient Hospitals dataset for 2021, the latest year of publicly available data.
We then conducted a simulation that applied the proposed disincentive amount to a market basket adjustment factor. We simulated a hypothetical scenario of a 3.2 percent market basket increase and a reduction of three quarters of that percentage increase if the proposed information blocking disincentive were applied.
CMS is proposing to revise the definition of “Meaningful EHR User” in 42 CFR 495.4 to state that an eligible hospital or CAH is not a meaningful EHR user in a calendar year if OIG refers a determination that the eligible hospital or CAH committed information blocking, as defined at 45 CFR 171.103, during the calendar year of the EHR reporting period. As a result of the proposal, CMS would apply a downward payment adjustment under the Medicare Promoting Interoperability Program to any such eligible hospital or CAH because the eligible hospital or CAH would not be a meaningful EHR user, as required under SSA sections 1886(b)(3)(B)(ix) and 1814(l)(4). For eligible hospitals, CMS would apply the downward adjustment to the payment adjustment year that occurs 2 years after the calendar year when the OIG referral occurs. For CAHs, CMS would apply the downward adjustment to the payment adjustment year that is the same as the calendar year when the OIG referral occurs.
As a result of these proposals, an eligible hospital or CAH that otherwise fulfilled the required objectives and measures to demonstrate that it is a meaningful EHR user for an EHR reporting period would nevertheless not be a meaningful EHR user for that EHR reporting period if OIG refers a determination of information blocking to CMS during the calendar year in which the EHR reporting period falls. CMS considered applying this proposed disincentive based on the date that the eligible hospital or CAH committed the information blocking as determined by OIG, instead of the date OIG refers its determination to CMS. However, a significant period of time could pass between the date when the eligible hospital or CAH is determined to have committed information blocking, and the date when OIG makes a referral to CMS, due to the time required for OIG to fully investigate a claim of information blocking. Such delay between the date the information blocking occurred and OIG's referral could complicate the application of the disincentive and would likely necessitate reprocessing of a significant number of claims. Therefore, CMS proposes to use the date of the OIG referral instead of the date of the information blocking occurrence to apply the proposed disincentive. Accordingly, CMS would apply the proposed disincentive to the payment adjustment year associated with the calendar year in which the OIG referred its determination to CMS.
CMS further notes that if an eligible hospital or CAH received the applicable downward payment adjustment because CMS had already determined the eligible hospital or CAH had otherwise not been a meaningful EHR user during the applicable EHR reporting period due to its performance in the Medicare Promoting Interoperability Program, imposition of the proposed disincentive would result in no additional impact on the eligible hospital or CAH during that payment adjustment year. Finally, CMS clarifies that, even if multiple information blocking violations were identified as part of OIG's determination (including over multiple years) and referred to CMS, each referral of an information blocking determination by OIG would only affect an eligible hospital's or CAH's status as a meaningful EHR user in a single EHR reporting period during the calendar year when the determination of information blocking was referred by OIG. Unless OIG makes an additional referral of an information blocking determination in the subsequent calendar year, an eligible hospital or CAH would again be able to qualify as a meaningful EHR user starting in the subsequent EHR reporting period.
CMS invites public comment on these proposals, particularly on its approach to the application of a disincentive for OIG determinations that found that information blocking occurred in multiple years and whether there should be multiple disincentives for such instances (for example, disincentives in multiple calendar years/reporting periods compared to only the calendar year/reporting period in which OIG made the referral).
After OIG has determined that a health care provider has committed information blocking and referred that health care provider to CMS, CMS would notify the eligible hospital or CAH that OIG determined that the eligible hospital or CAH committed information blocking as defined under 45 CFR 171.103, and thus the eligible hospital or CAH was not a meaningful EHR user for the EHR reporting period in the calendar year when OIG referred its information blocking determination to CMS. This notice would be issued in accordance with the notice requirements proposed at 45 CFR 171.1002, as discussed in section III.B.2 of this proposed rule.
As a result of our proposal to modify the definition of meaningful EHR user in 42 CFR 495.4, the application of the disincentive would result in a downward payment adjustment for eligible hospitals 2 years after the OIG referral of a determination of information blocking to CMS. Based upon the existing regulation at 42 CFR 495.4, the downward payment adjustment would apply 2 years after the year of the referral and the EHR reporting period in which the eligible hospital was not a meaningful EHR user. For CAHs, the downward payment adjustment would apply to the payment adjustment year in which the OIG referral was made.
CMS invites public comment on these proposals.
MIPS requires that MIPS eligible clinicians use CEHRT, as defined at SSA section 1848(o)(4) and 42 CFR 414.1305,
Authorized by the Medicare Access and CHIP Reauthorization Act of 2015 (MACRA) (Pub. L. 114-10, April 16, 2015), the Quality Payment Program is a payment incentive program, by which the Medicare program rewards MIPS eligible clinicians who provide high-value, high-quality services in a cost-efficient manner. The Quality Payment Program includes two participation tracks for clinicians providing services under the Medicare program: MIPS and Advanced Alternative Payment Models (APMs). The statutory requirements for MIPS are set forth in SSA sections 1848(q) and (r).
For the MIPS participation track, MIPS eligible clinicians are subject to a MIPS payment adjustment (positive, negative, or neutral) based on their performance in four performance categories (cost, quality, improvement activities, and Promoting Interoperability) compared to the established performance threshold for that performance period/MIPS payment year. CMS assesses each MIPS eligible clinician's total performance according to established performance standards with respect to the applicable measures and activities specified in each of these four performance categories during a performance period to compute a final composite performance score (a “final score” as defined at 42 CFR 414.1305) in accordance with our policies set forth in 42 CFR 414.1380.
In calculating the final score, CMS must apply different weights for the four performance categories, subject to certain exceptions, as set forth in SSA section 1848(q)(5) and at 42 CFR 414.1380. Unless CMS assigns a different scoring weight pursuant to these exceptions, for the CY 2024 performance period/2026 MIPS payment year, the scoring weights are as follows: 30 percent for the quality performance category; 30 percent for the cost performance category; 15 percent for the improvement activities performance category; and 25 percent for the Promoting Interoperability performance category (SSA section 1848(q)(5)(E); 42 CFR 414.1380(c)(1)).
To calculate the payment adjustment factor that will be applied to the amounts otherwise paid to MIPS eligible clinicians under Medicare Part B for covered professional services during the applicable MIPS payment year, CMS then compares the final score to the performance threshold CMS has established for that performance period/MIPS payment year at 42 CFR 414.1405(b). The MIPS payment adjustment factors specified for a year must result in differential payments such that MIPS eligible clinicians with final scores above the performance threshold receive a positive MIPS payment adjustment factor, those with final scores at the performance threshold receive a neutral MIPS payment adjustment factor, and those with final scores below the performance threshold receive a negative MIPS payment adjustment factor. As further specified in SSA section 1848(q)(6)(F) and 42 CFR 414.1405, CMS also applies a scaling factor to determine the MIPS payment adjustment factor for each MIPS eligible clinician, and CMS must ensure that the estimated aggregate increases and decreases in payments to all MIPS eligible clinicians as a result of MIPS payment adjustment factors are budget neutral for that MIPS payment year. As provided in SSA sections 1848(q)(6)(A) and (B)(iv) and 42 CFR 414.1405(c), the positive MIPS payment adjustment factor may be up to 9 percent for a final score of 100 and the negative MIPS payment adjustment factor may be up to negative 9 percent for a final score of zero.
For MIPS eligible clinicians, SSA section 1848(q)(2)(A)(iv) includes the meaningful use of CEHRT as one of the four performance categories by which a MIPS eligible clinician is assessed to determine a MIPS payment adjustment factor, as discussed previously. CMS refers to this performance category as the Promoting Interoperability performance category. SSA section 1848(q)(2)(B)(iv) provides that the requirements set forth in SSA section 1848(o)(2) for determining whether a MIPS eligible clinician is a meaningful user of CEHRT also apply to our assessment of MIPS eligible clinicians' performance on measures and activities with respect to the MIPS Promoting Interoperability performance category. Also, SSA section 1848(o)(2)(D) generally provides that the requirements for being a meaningful EHR user under section 1848(o)(2) continue to apply for purposes of MIPS.
A MIPS eligible clinician that is not a meaningful user of CEHRT in accordance with SSA section 1848(o)(2)(A) cannot satisfy the requirements of the MIPS Promoting Interoperability performance category and, therefore, would earn a score of zero for this performance category. Applying the weights for the performance categories under 42 CFR 414.1380(c)(1), a score of zero for the Promoting Interoperability performance category would mean that the maximum final score a MIPS eligible clinician could achieve, if they performed perfectly in the three remaining performance categories, would be 75 points.
To be a meaningful EHR user under SSA section 1848(o)(2)(A) (and therefore meet the requirements of the MIPS Promoting Interoperability performance category under SSA section 1848(q)(2)(B)(iv)), a MIPS eligible clinician must meet three requirements related to the meaningful use of CEHRT during a performance period for a MIPS payment year. In brief, the MIPS eligible clinician must (1) demonstrate to the satisfaction of the Secretary the use of CEHRT in a meaningful manner; (2) demonstrate to the satisfaction of the Secretary that their CEHRT is connected in a manner that provides for electronic exchange of health information to improve the quality of care; and (3) use CEHRT to submit information concerning quality measures and other measures as specified.
More specifically, for the first requirement under SSA section 1848(o)(2)(A)(i), a MIPS eligible clinician must demonstrate, to the satisfaction of the Secretary, that during the relevant performance period, the MIPS eligible clinician is “using certified EHR technology in a meaningful manner.” For the second requirement under SSA section 1848(o)(2)(A)(ii), a MIPS eligible clinician must demonstrate, to the satisfaction of the Secretary, that during the relevant period CEHRT is “connected in a manner that provides, in accordance with law and standards applicable to the exchange of information, for the electronic exchange of health information to improve the quality of care, such as promoting care coordination” and the MIPS eligible clinician demonstrates, through “a process specified by the Secretary, such as the use of an attestation” that the MIPS eligible clinician “has not knowingly and willfully taken action
As discussed further in section III.C.3.b. of this proposed rule, these three requirements for a MIPS eligible clinician to be determined to be a meaningful user of CEHRT, particularly the first two requirements under SSA section 1848(o)(2)(A)(i) and (ii), would be substantially undermined and frustrated if the MIPS eligible clinician commits information blocking, such that application of an appropriate disincentive is warranted.
As discussed previously, we believe that the requirements set forth in SSA sections 1848(q)(2)(B)(iv) and 1848(o)(2)(A) for the MIPS Promoting Interoperability performance category are an applicable Federal law for the purposes of establishing a disincentive for a health care provider that participates in MIPS and has been determined by OIG to have committed information blocking. First, the definitions of MIPS eligible clinician and health care provider under 45 CFR 171.102 and the PHSA generally are aligned. Second, committing information blocking not only violates the law and principles set forth in the Cures Act, but also undermines the goals and purpose of the MIPS Promoting Interoperability performance category. On such basis, CMS is proposing an appropriate disincentive for MIPS eligible clinicians that OIG determines have committed information blocking and for whom OIG refers its determination of information blocking to CMS, as discussed further in section III.C.3.c. of this proposed rule.
CMS believes that the definitions of MIPS eligible clinician under the SSA and 42 CFR 414.1305 and health care provider under PHSA section 3000(3) and 45 CFR 171.102 generally are aligned. CMS believes this alignment will permit application of appropriate disincentives, as required by PHSA section 3022(b)(2)(B), to MIPS eligible clinicians, except for qualified audiologists. CMS proposes to codify this exception in the definition of Meaningful EHR User for MIPS at 42 CFR 414.1305.
Beginning with the 2024 MIPS payment year, a MIPS eligible clinician is defined in 42 CFR 414.1305 as including: (1) a physician (as defined in SSA section 1861(r)); (2) a physician assistant, nurse practitioner, and clinical nurse specialist (as defined in SSA 1861(aa)(5)); (3) a certified registered nurse anesthetist (defined in SSA section 1861(bb)(2)); (4) a physical therapist or occupational therapist; (5) a qualified speech-language pathologist; (6) a qualified audiologist (as defined in SSA section 1861(ll)(4)(B)); (7) a clinical psychologist (as defined by the Secretary for purposes of SSA section 1861(ii)); (8) a registered dietician or nutrition professional; (9) a clinical social worker (as defined in SSA section 1861(hh)(1)); (10) a certified nurse midwife (as defined in SSA section 1861(gg)(2)); and (11) a group, identified by a unique single taxpayer identification number (TIN), with two or more eligible clinicians, one of which must be a MIPS eligible clinician, identified by their individual national provider identifier (NPI) and who have reassigned their billing rights to the single group TIN. However, for a given performance period/MIPS payment year, a MIPS eligible clinician does not include an eligible clinician who meets one of the exclusions set forth in 42 CFR 414.1310(b), including being a Qualifying APM participant, Partial Qualifying APM Participant that does not elect to participate in MIPS, or does not exceed the low volume threshold (as these terms are defined in 42 CFR 414.1305).
Meanwhile, the definition of “health care provider” under PHSA section 3000(3) as implemented in 45 CFR 171.102, includes the following which are also considered MIPS eligible clinicians: (1) a “group practice” (which is not defined in the PHSA); (2) a physician (as defined in SSA section 1861(r)); (3) practitioners, as defined in SSA section 1842(b)(18)(C) to include: (a) a physician assistant, nurse practitioner, and clinical nurse specialist (as defined in SSA 1861(aa)(5)); (b) a certified registered nurse anesthetist (defined in SSA section 1861(bb)(2)); (c) a certified nurse-midwife (as defined in SSA section 1861(gg)(2)); (d) a clinical social worker (as defined in SSA section 1861(hh)(1)); (e) a clinical psychologist (as defined by the Secretary for purposes of SSA section 1861(ii)); and (f) a registered dietician or nutrition professional; (4) therapists, as defined in SSA section 1848(k)(3)(B)(iii) to include: (a) a physical therapist; (b) an occupational therapist; and (c) a qualified speech-language pathologist; and (5) “any other category of health care facility, entity, practitioner, or clinician determined appropriate by the Secretary.”
CMS notes that, at this time, only a qualified audiologist, included in the definition of MIPS eligible clinician in 42 CFR 414.1305 since the CY 2019 performance period/2021 MIPS payment year, is not identified as a health care provider under 45 CFR 171.102 and PHSA section 3000(3). Because qualified audiologists are not included in the PHSA definition of health care provider, CMS proposes that MIPS eligible clinicians who are qualified audiologists would not be subject to the disincentive proposed for the MIPS Promoting Interoperability performance category in this proposed rule.
As discussed previously in this section (III.C.3.b.(1)), groups and multispecialty groups (as defined in 42 CFR 414.1305) also are included in the definition of MIPS eligible clinician and therefore are subject to payment adjustments under MIPS based on the performance of MIPS eligible clinicians that are included in these groups, under different sets of regulations in 42 CFR part 414, subpart O. Meanwhile, as discussed previously, the definition of health care provider in PHSA section 3000(3) includes “group practice,” but does not define what this term means. Accordingly, CMS also believes that a group may be subject to the disincentive proposed for the MIPS Promoting Interoperability performance category in this proposed rule if the group has been determined by OIG to have committed information blocking, or if MIPS eligible clinicians included in the group have committed information blocking.
Health care providers that engage in information blocking undermine and frustrate the purpose for requiring MIPS eligible clinicians to use CEHRT in a meaningful manner. Specifically, requiring MIPS eligible clinicians to use CEHRT is not limited to MIPS eligible clinicians adopting and implementing CEHRT for documenting clinical care in lieu of paper-based medical records. For use of CEHRT to be meaningful, SSA section 1848(o)(2)(A) requires that MIPS eligible clinicians use CEHRT to communicate with other treating providers, pharmacies, and oversight authorities regarding the patient's health information, including the MIPS eligible clinician's review and treatment of the patient's health. SSA sections 1848(o)(2)(A)(i) and (ii) require that MIPS eligible clinicians demonstrate that they are meaningfully using CEHRT's key functionalities, such as electronically prescribing, and ensuring that CEHRT is “connected in a manner that provides, in accordance with law and standards applicable to the exchange of information, for the electronic exchange of health information to improve the quality of health care,” such as “promoting care coordination.” SSA section 1848(o)(2)(A)(ii) further requires that the MIPS eligible clinician demonstrate that they have not “knowingly and willfully taken action (such as to disable functionality) to limit or restrict the compatibility or interoperability” of CEHRT, which is similar to the directive to investigate and discourage information blocking under PHSA section 3022. Establishing an appropriate disincentive for information blocking under the MIPS Promoting Interoperability performance category would not only deter information blocking, but would strengthen an existing merit-based incentive payment system that already encourages health care providers to support the access, exchange, and use of electronic health information.
Furthermore, the requirements to be treated as a meaningful EHR user in SSA sections 1848(o)(2)(A)(i) and (ii) specify that a MIPS eligible clinician must demonstrate that they meet these requirements to the satisfaction of the Secretary. CMS believes these provisions authorize the Secretary to interpret these requirements through rulemaking as necessary to ensure that a MIPS eligible clinician satisfies the requirements to be a meaningful user of CEHRT as defined by the Secretary. Specifically, CMS believes it is appropriate for the Secretary to interpret these requirements through rulemaking to determine that a MIPS eligible clinician that has committed information blocking is not a meaningful EHR user. This proposal is consistent with the goals of the MIPS Promoting Interoperability performance category, which include promoting health care efficiency and encouraging widespread health information exchange (81 FR 77200 through 77202). Information blocking by MIPS eligible clinicians frustrates both these goals.
CMS believes a disincentive for information blocking associated with the MIPS Promoting Interoperability performance category would be an appropriate disincentive that would deter information blocking by other MIPS eligible clinicians, consistent with the discussion in section III.A.3. of this proposed rule. While the exact monetary impact of the disincentive may vary for each MIPS eligible clinician based on the various factors CMS considers when determining the MIPS payment adjustment factor, CMS believes the proposed disincentive would deter information blocking by other MIPS eligible clinicians. A MIPS eligible clinician who receives a score of zero in the MIPS Promoting Interoperability performance category under this proposed disincentive may not be able to earn a positive or neutral MIPS payment adjustment factor that they otherwise would have earned for their performance in MIPS.
To illustrate the degree to which this disincentive could deter information blocking, HHS analyzed the range of potential disincentive amounts MIPS eligible clinicians could be subject to if the proposed disincentive was imposed, using actual payment and MIPS data from 2021, the most recent year of publicly available data. The three data sets used were the Medicare Fee-For-Service Provider Utilization & Payment Data—Physician and Other Practitioners Dataset; the Clinician Public Reporting: Overall MIPS Performance Dataset and the Quality Payment Program Experience Dataset.
We first assessed the overall payment to eligible clinicians as well as the portion of the payment that was based on a positive or negative adjustment based on their MIPS score. We then varied the MIPS score based on lower scores on the Promoting Interoperability performance category portion, determined the change in positive or negative adjustment amount, and recalculated the payment under Medicare Part B. The difference between the actual 2021 payment and the simulated payment under the lower score represents the disincentive amount calculated in the simulation for individual eligible clinicians. We estimated a median individual disincentive amount of $686 and a 95 percent range (the 2.5th to 97.5th percentile of estimated disincentive amounts) of $38 to $7,184 across all eligible clinicians (including those who may have been in a group). Based on the median estimated disincentive amount of $686 and estimated median group size of six clinicians, we estimated a group disincentive of $4,116 and a range of $1,372 to $165,326 for group sizes ranging from two to 241 clinicians (the estimated 2.5th to 97.5th percentile of group sizes). In consideration of MIPS eligible clinicians that may be subject to higher-than-median disincentives, we also simulated estimates for a median-sized group of six clinicians and an estimated 75th percentile per-clinician disincentive amount of $1,798. Based on this, we estimated a disincentive of $10,788. We noted that the ranges of potential group disincentive amounts vary based on individual clinician payments and group sizes.
Under the authority in SSA sections 1848(o)(2)(A) and (D), and 1848(q)(2)(A)(iv) and (B)(iv), for the MIPS Promoting Interoperability performance category, CMS proposes that a MIPS eligible clinician would not be a meaningful EHR user in a performance period if OIG refers a determination that the MIPS eligible clinician committed information blocking (as defined at 45 CFR 171.103)
CMS considered applying this proposed disincentive based on the date that the MIPS eligible clinician committed the information blocking as determined by OIG, instead of the date OIG refers its determination to CMS. However, a significant period of time could pass between the date when the MIPS eligible clinician is determined to have committed information blocking, and the date when OIG makes a referral to CMS, due to the time required for OIG to fully investigate a claim of information blocking. Such delay between the date the information blocking allegedly occurred and OIG's referral could complicate our application of the disincentive and would likely necessitate reprocessing of a significant number of claims. Therefore, CMS decided to use the date of the OIG referral instead of the date of the information blocking occurrence to apply this proposed disincentive. Accordingly, CMS would apply the proposed disincentive to the MIPS payment year associated with the calendar year in which OIG referred its determination to CMS.
As provided in 42 CFR 414.1320, the applicable MIPS payment year is 2 calendar years after the performance period. This time period between the performance period and the MIPS payment year permits CMS to review each MIPS eligible clinician's performance to determine their final score and MIPS payment adjustment factor. Under our proposal, if OIG referred its determination that a MIPS eligible clinician committed information blocking in calendar year 2025, then CMS would apply the disincentive proposed herein for the 2027 MIPS payment year.
First, CMS proposes to amend the definition of “meaningful EHR user for MIPS” at 42 CFR 414.1305. The current definition of meaningful EHR user for MIPS definition states that a “meaningful EHR user for MIPS means a MIPS eligible clinician who possesses CEHRT, uses the functionality of CEHRT, reports on applicable objectives and measures specified for the Promoting Interoperability performance category for a performance period in the form and manner specified by CMS, does not knowingly and willfully take action (such as to disable functionality) to limit or restrict the compatibility or interoperability of CEHRT, and engages in activities related to supporting providers with the performance of CEHRT.” CMS proposes to add to this definition that a MIPS eligible clinician is not a meaningful EHR user in a performance period if OIG refers a determination that the clinician committed information blocking (as defined at 45 CFR 171.103) during the calendar year of the performance period. CMS also proposes other minor technical changes to the language of the definition. In tandem with other proposals in this section, this proposed amendment to the definition in 42 CFR 414.1305 would result in a MIPS eligible clinician not being able to earn points associated with the Promoting Interoperability performance category they may otherwise have earned, potentially resulting in a negative or neutral payment adjustment. As such, this potential outcome likely would deter health care providers from engaging in information blocking.
Second, CMS proposes to amend our requirements for earning a score for the MIPS Promoting Interoperability performance category by adding a new requirement at 42 CFR 414.1375(b). Currently, 42 CFR 414.1375(b) provides that, to earn a score (other than zero) for the Promoting Interoperability performance category, the MIPS eligible clinician must meet certain requirements, including using CEHRT, reporting on the objectives and associated measures as specified by CMS, and attesting to certain statements and activities. CMS proposes to amend 42 CFR 414.1375(b) by adding that the MIPS eligible clinician must be a meaningful EHR user for MIPS as defined at 42 CFR 414.1305. In conjunction with our proposal to amend the definition of a meaningful EHR user for MIPS at 42 CFR 414.1305 discussed previously, CMS believes this proposal would establish a clear basis to apply a score of zero for the MIPS Promoting Interoperability performance category to a MIPS eligible clinician that fails to meet the definition of meaningful EHR user for MIPS during a performance period, specifically if OIG refers a determination of information blocking during the calendar year of the performance period.
Under these proposals, a MIPS eligible clinician that OIG determines has committed information blocking would not be a meaningful EHR user, and therefore would be unable to earn a score (instead, earning a score of zero) for the MIPS Promoting Interoperability performance category. Because a MIPS eligible clinician that has committed information blocking would not be a meaningful EHR user for a given performance period, they would earn a zero for the Promoting Interoperability performance category for the calendar year of the applicable performance period in which the determination of information blocking was referred by OIG. For example, if OIG refers a determination that a MIPS eligible clinician committed information blocking to CMS in CY 2026, CMS would apply a score of zero for the Promoting Interoperability performance category for the CY 2028 MIPS payment year to the MIPS eligible clinician.
Under this proposed disincentive for information blocking, a score of zero for the MIPS Promoting Interoperability performance category would negatively impact 25 percent of the MIPS eligible clinician's final score such that it would likely result in a negative MIPS payment adjustment for the applicable MIPS payment year. For example, applying the weights for the performance categories under 42 CFR 414.1380(c)(1), a score of zero for the Promoting Interoperability performance category would mean that the maximum final score a MIPS eligible clinician could achieve, if they performed perfectly in the three remaining performance categories, would be 75 points.
Then, as discussed previously, to determine the MIPS payment adjustment factor, CMS compares the MIPS eligible clinician's final score to the established performance threshold for that MIPS payment year. In 42 CFR 414.1405(b)(9)(ii), CMS established that the performance threshold for the 2025
However, in the CY 2024 Physician Fee Schedule proposed rule, CMS proposed that the performance threshold for the 2026 MIPS payment year would be 82 points (88 FR 52596 through 52601). If this performance threshold of 82 points is finalized for the 2026 MIPS payment year, or some other performance threshold higher than 75 points is finalized in a future MIPS payment year, then, under our example, a MIPS eligible clinician (that OIG determined committed information blocking and received a score of zero in the Promoting Interoperability performance category and therefore a final score of 75 points) would receive a negative MIPS payment adjustment factor. If CMS finalizes a performance threshold higher than 75 points in a future MIPS payment year, this proposed disincentive would likely to result in a MIPS eligible clinician that commits information blocking, as determined by OIG, receiving a negative payment adjustment, up to negative nine percent for a final score of zero as set forth in 42 CFR 414.1405(b)(2) and (c).
Under this proposal, a MIPS eligible clinician that otherwise fulfilled other requirements to demonstrate meaningful use for a performance period, and earned a score for the Promoting Interoperability performance category, would nevertheless not be a meaningful EHR user for that performance period if OIG refers a determination of information blocking during the calendar year of the performance period. CMS further notes that if a MIPS eligible clinician earned a score of zero for the Promoting Interoperability performance category for a given year because CMS had already determined the MIPS eligible clinician had otherwise not been a meaningful EHR user in that performance period due to its performance in the Promoting Interoperability performance category, imposition of the proposed disincentive would result in no additional impact on the MIPS eligible clinician during that MIPS payment year.
CMS clarifies that, even if multiple information blocking violations were identified as part of OIG's determination (including over multiple years) and referred to CMS, each referral of an information blocking determination by OIG would only affect a MIPS eligible clinician's status as a meaningful EHR user in a single performance period during the calendar year when the determination of information blocking was referred by OIG. Barring an additional referral of an information blocking determination by OIG in the subsequent calendar year, a MIPS eligible clinician could be deemed a meaningful EHR user and earn a score for the Promoting Interoperability performance category in the following calendar year.
CMS invites public comment on these proposals. CMS particularly requests comment on its approach to the application of a disincentive for OIG determinations that found that information blocking occurred in multiple years and whether there should be multiple disincentives for such instances (for example, disincentives in multiple calendar years/performance periods compared to only one disincentive in the calendar year in which a referral from OIG is made).
CMS also proposes that if data for the MIPS Promoting Interoperability performance category is submitted as a group or virtual group then the application of the disincentive would be made at that level. CMS refers readers to our prior rulemaking governing groups and virtual groups (81 FR 77073 through 77077) and our regulations at 42 CFR 414.1305 (defining MIPS eligible clinicians as including groups as well as separately defining groups and virtual groups) and 414.1315 (governing virtual groups). MIPS eligible clinicians who submit data as a part of a group or virtual group and individually will be evaluated as an individual and as a group for all performance categories. Beginning with the CY 2021 performance period/2023 MIPS payment year, if a TIN/NPI has a virtual group final score associated with it, we will use the virtual group final score to determine the MIPS payment adjustment; if a TIN/NPI does not have a virtual group final score associated with it, we will use the highest available final score associated with the TIN/NPI to determine the MIPS payment adjustment (85 FR 84917 through 84919). CMS would apply the MIPS payment adjustment factor to the Medicare Part B claims during the MIPS payment year for the MIPS eligible clinicians in the group or virtual group. Thus, if CMS is calculating a final score and MIPS payment adjustment factor for a group or virtual group and OIG refers a finding of information blocking to CMS, CMS would apply the proposed disincentive to the whole group.
CMS has established policies that result in the reweighting of the Promoting Interoperability performance category for certain MIPS eligible clinicians at 42 CFR 414.1380(c)(2). These include but are not limited to hospital-based clinicians (81 FR 77238 through 77420, 82 FR 53684, and 82 FR 53686 through 53687) and Ambulatory Surgical Center-based clinicians (82 FR 53684). CMS is not proposing changes to its existing reweighting policies for MIPS eligible clinicians.
Starting with the CY 2022 performance period/2024 MIPS payment year performance period CMS automatically reweights small practices for the Promoting Interoperability performance category (86 FR 65485 through 65487; 42 CFR 414.1380(c)(2)(i)(C)(
CMS notes that if these MIPS eligible clinicians choose to submit data for the Promoting Interoperability performance category, their reweighting is canceled, and they could be subject to a disincentive if OIG refers a determination of information blocking to CMS.
After OIG has determined that a health care provider has committed information blocking and referred that health care provider to CMS, CMS would notify the MIPS eligible clinician that OIG determined that the eligible clinician committed information blocking as defined under 45 CFR 171.103, and thus the MIPS eligible clinician was not a meaningful EHR user for the performance period in the calendar year when OIG referred its information blocking determination to CMS. CMS would apply the proposed disincentive to the MIPS payment year associated with the calendar year in which the OIG referred its determination to CMS. This notice would be issued in accordance with the notice requirements for disincentives proposed in 45 CFR 171.1002 (see also section III.B.2. of this proposed rule).
CMS invites public comment on this proposal.
Section 3022 of the Patient Protection and Affordable Care Act (PPACA) (Pub.
The Shared Savings Program regulations at 42 CFR part 425 set forth, among other things, requirements for ACO eligibility, quality reporting, and other program requirements and beneficiary protections.
CMS has interpreted the requirement at section 1899(b)(1)(G) of the SSA that an ACO coordinates care for assigned beneficiaries using enabling technologies to require an ACO (and, by agreement, an ACO participant and ACO provider/supplier) to, among other things, define its methods and processes established to coordinate care across and among health care providers both inside and outside the ACO and have a written plan to “encourage and promote use of enabling technologies for improving care coordination for beneficiaries” (42 CFR 425.112(b)(4)(i) and (b)(4)(ii)(C)). Enabling technologies may include one or more of the following: electronic health records and other health IT tools; telehealth services, including remote patient monitoring; electronic exchange of health information; and other electronic tools to engage beneficiaries in their care. The ACO must ensure that ACO participants and ACO providers/suppliers comply with and implement the defined care coordination process, including the encouragement and promotion of enabling technologies, and the remedial processes and penalties (including the potential for expulsion) applicable to ACO participants and ACO providers/suppliers for failure to comply with and implement the required process (see 42 CFR 425.112(a)(3)). Sharing health information using enabling technologies across all health care providers engaged in a beneficiary's care (both inside and outside the ACO) for purposes of care coordination and quality improvement is an essential aspect of the ACO's activities. Moreover, this type of information sharing among health care providers (both inside and outside the ACO) supports quality measurement and quality reporting activities, which are necessary in order for the ACO to be eligible to share in savings and are also used in determining the amount of shared losses.
Before the start of an agreement period, before each performance year thereafter, and at such other times as specified by CMS, the ACO must submit to CMS an ACO participant list and an ACO provider/supplier list (see 42 CFR 425.118(a)). The ACO must certify the submitted lists annually. All Medicare-enrolled individuals and entities that have reassigned their right to receive Medicare payment to the TIN of the ACO participant must be included on the ACO provider/supplier list and must agree to participate in the ACO and comply with the requirements of the Shared Savings Program before the ACO submits the ACO participant list and the ACO provider/supplier list.
CMS may deny an ACO, ACO participant, and/or an ACO provider/supplier participation in the Shared Savings Program if the entity or individual has a history of program integrity issues (see 42 CFR 425.305(a)(2)). CMS screens ACOs, ACO participants, and ACO providers/suppliers during the Shared Savings Program application process and periodically thereafter (for example, during the annual certification of the ACO participant and ACO provider/supplier lists) with regard to their program integrity history (including any history of Medicare program exclusions or other sanctions and affiliations with individuals or entities that have a history of program integrity issues) (see 42 CFR 425.305(a)(1)). In the Medicare Shared Savings Program Final Rule (76 FR 67802), CMS stated that the results of the screening would need to be considered in light of the relevant facts and circumstances. CMS did not draw a bright line regarding when an entity's history of program integrity issues justifies denial of a Shared Savings Program participation agreement. CMS stated instead that we would likely consider the nature of the applicant's program integrity issues (including the program integrity history of affiliated individuals and entities), the available evidence, the entity's diligence in identifying and correcting the problem, and other factors. CMS stated that we intended to ensure that ACOs, ACO participants, and ACO providers/suppliers would not pose a risk of fraud or abuse within the Shared Savings Program while recognizing that some program integrity allegations may not have been fully adjudicated.
CMS may terminate the participation agreement with an ACO when the ACO, its ACO participants, or its ACO providers/suppliers or other individuals or entities performing functions or services related to ACO activities fail to comply with any of the requirements of the Shared Savings Program under 42 CFR part 425 (§ 425.218(a) and (b)). This includes, but is not limited to, violations of the physician self-referral prohibition, CMP law, Federal anti-kickback statute, antitrust laws, or any other applicable Medicare laws, rules, or regulations that are relevant to ACO operations. Similarly, CMS requires that the agreement the ACO effectuates with its ACO participants must permit the ACO to take remedial action against the ACO participant, and must require the ACO participant, in turn, to take remedial action against its ACO providers/suppliers, including
CMS proposes to revise the Shared Savings Program regulations to establish disincentives for health care providers, including ACOs, ACO participants, or ACO providers/suppliers, that engage in information blocking. Under this proposal, a health care provider that OIG determines has committed information blocking may not participate in the Shared Savings Program for a period of at least 1 year.
Information blocking runs contrary to the care coordination goals of the Shared Savings Program. ACO participants and their ACO providers/suppliers participating in an ACO in the Shared Savings Program use enabling technologies (such as electronic health records) to improve care coordination for beneficiaries. The ability of ACO providers/suppliers to exchange information between health care providers (both inside and outside the ACO) is essential for the operations of the ACO, including for effective coordination of care and quality improvement activities and services for assigned beneficiaries.
First, CMS proposes to amend 42 CFR 425.208(b) to include a specific reference to the Cures Act information blocking provision codified in the PHSA. The provision would be one of many laws with which ACOs (and by agreement, their ACO participants and ACO providers/suppliers) must comply.
Second, CMS proposes to revise 42 CFR 425.305(a)(1) to specify that the program integrity history on which ACOs, ACO participants, and ACO providers/suppliers are reviewed during the Shared Savings Program application process and periodically thereafter includes, but is not limited to, a history of Medicare program exclusions or other sanctions, noncompliance with the requirements of the Shared Savings Program, or violations of laws specified at 42 CFR 425.208(b). This revision would provide the basis for CMS to deny participation in the Shared Savings Program to a health care provider that is an ACO, an ACO participant, or an ACO provider/supplier when the health care provider has engaged in information blocking, as determined by OIG.
Third, CMS proposes to make a conforming modification to the provision related to the grounds for CMS to terminate an ACO at 42 CFR 425.218(b)(3) based on “[v]iolations of the physician self-referral prohibition, civil monetary penalties (CMP) law, Federal anti-kickback statute, antitrust laws, or any other applicable Medicare laws, rules, or regulations that are relevant to ACO operations.” CMS proposes to replace this language with “[v]iolations of any applicable laws, rules, or regulations that are relevant to ACO operations, including, but not limited to, the laws specified at § 425.208(b).”
Pursuant to CMS' authority under 42 CFR 425.206(a)(1)(iii) to deny an ACO's participation in the Shared Savings Program, CMS' authority under 42 CFR 425.118(b)(1)(iii) to deny the addition of a health care provider to an ACO's participation list, and CMS' authority under 42 CFR 425.305(a) to screen for program integrity issues, CMS proposes to screen ACOs, ACO participants, and ACO providers/suppliers for an OIG determination of information blocking and deny the addition of such a health care provider to an ACO's participation list for the period of at least 1 year. In the case of an ACO that is a health care provider, CMS proposes to deny the ACO's application to participate in the Shared Savings Program for the period of at least 1 year. If the ACO were to re-apply to participate in the Shared Savings Program in a subsequent year, then CMS would review whether OIG had made any subsequent determinations of information blocking with respect to the ACO as a health care provider as well as any evidence that indicated whether the issue had been corrected and appropriate safeguards had been put in place to prevent its reoccurrence, as part of the ACO's application process. CMS therefore proposes that, in cases where the result of the program integrity screening identifies that an ACO (acting as a health care provider), ACO participant, or ACO provider/supplier, has committed information blocking, as determined by OIG, CMS would take the following actions, as applicable:
• Pursuant to 42 CFR 425.118(b)(1)(iii), CMS would deny the request of the ACO to add an ACO participant to its ACO participant list on the basis of the results of the program integrity screening under 42 CFR 425.305(a).
• Pursuant to 42 CFR 425.116(a)(7) and (b)(7), CMS would notify an ACO currently participating in the Shared Savings Program if one of its ACO participants or ACO providers/suppliers is determined by OIG to have committed information blocking so that the ACO can take remedial action—removing the ACO participant from the ACO participant list or the ACO provider/supplier from the ACO provider/supplier list—as required by the ACO participant agreement.
• Pursuant to 42 CFR 425.305(a)(2), CMS would deny an ACO's Shared Savings Program application if the results of a program integrity screening under 42 CFR 425.305(a)(1) reveal a history of program integrity issues or other sanctions and affiliations with individuals or entities that have a history of program integrity issues.
• Pursuant to 42 CFR 425.218(a) and (b)(3), CMS would terminate an ACO participation agreement in the case of a failure to comply with requirements of the Shared Savings Program, including violations of any applicable laws, rules, or regulations that are relevant to ACO operations, including, but not limited to, the laws specified at 42 CFR 425.208(b).
Each of these actions would deter information blocking consistent with the discussion of an appropriate
The period of time of the disincentive would be at least 1 performance year. CMS would determine if it would be appropriate for the period to exceed 1 year if OIG has made any subsequent determinations of information blocking (for example, CMS would be unlikely impose a disincentive greater than 1 year if the information blocking occurred in the past and there was evidence that the information blocking had stopped) and whether safeguards have been put in place to prevent the information blocking that was the subject of OIG's determination. Prior to imposing any disincentive arising from an OIG determination of information blocking, CMS would provide a notice in accordance with the notice requirements proposed in 45 CFR 171.1002 (see section III.B.2 of this proposed rule) that would specify the disincentive would be imposed for at least 1 performance year.
CMS proposes to apply the disincentive no sooner than the first performance year after we receive a referral of an information blocking determination from OIG and in which the health care provider is to participate in the Shared Savings Program. CMS performs a program integrity screening of ACOs, ACO participants, and ACO providers/suppliers as part of the annual application/change request process for new and existing ACOs, which typically occurs between May and October during the performance year. In the case of the new addition of an ACO participant (TIN) to an ACO's participant list, CMS would prevent the TIN from joining the ACO as an ACO participant if the program integrity screening reveals that the TIN has engaged in information blocking, as determined by OIG. In the case of an existing ACO participant, CMS would notify the ACO that an ACO participant or an ACO provider/supplier had committed information blocking, as determined by OIG, so the ACO can remove the ACO participant or ACO provider/supplier from its ACO participant list or ACO provider/supplier list, as applicable. If the TIN were to remain on the ACO participant list or ACO provider/supplier list when the ACO certifies its ACO participant list for the next performance year, then CMS would issue a compliance action to the ACO. Continued noncompliance (for example, failure to remove the TIN) would result in termination of the ACO's participant agreement with CMS, as the ACO would have failed to enforce the terms of its ACO participant agreement.
Applying the disincentive prospectively is the most appropriate timing for the disincentive. It would be impractical and inequitable for CMS to apply the disincentive retrospectively or in the same year in which CMS received a referral from OIG. Applying the disincentive to a historical performance year or a performance year contemporaneous to the OIG's determination would unfairly affect other ACO participants that did not commit the information blocking and likely were not aware of the information blocking. CMS recognizes, however, that the prospective application of the disincentive means that it may be applied to a health care provider substantially after the information blocking occurred, during the provider's first attempt to participate in the Shared Savings Program, and after the provider was previously subject to a disincentive in another program, such as MIPS. As discussed in more detail below, CMS is contemplating an approach under which a health care provider could participate in the Shared Savings Program if a significant amount of time (for example, 3 to 5 years) had passed between the occurrence of the information blocking and OIG's determination, and the provider had given assurances in the form and manner specified by CMS that the issue had been corrected and appropriate safeguards had been put in place to prevent its reoccurrence.
After the completion of the last performance year in which the disincentive was applied, an ACO may submit a change request to add the TIN or include the NPI on its ACO participant list or ACO provider/supplier list, as applicable, for a subsequent performance year, and CMS would approve the addition, assuming that all other Shared Savings Program requirements for adding a TIN or NPI are met, so long as (1) OIG has not made any additional determinations of information blocking, and (2) the ACO provides assurances (in the form and manner required by CMS) that the information blocking is no longer ongoing and that the ACO has put safeguards in place to prevent the information blocking that was the subject of the referral. If, however, OIG made and referred an additional information blocking determination (that is either related or unrelated to the previous OIG referral) in a subsequent year or the ACO cannot provide assurance that the information blocking has ceased, then CMS would continue to deny participation.
In addition, CMS would notify ACOs about an ACO participant or ACO provider/supplier that had committed information blocking, as determined by OIG, so that the ACO could take remedial action—removing the ACO participant from the ACO participant list or the ACO provider/supplier from the ACO provider/supplier list—as required by the ACO participant agreement. ACOs are well-positioned to take remedial action against ACO participants and ACO providers/suppliers that have been found by OIG to have committed information blocking as a result of their ACO participant agreements, which provide for the ACO to take remedial action against the ACO participant, and require the ACO participant to take remedial action against its ACO providers/suppliers, including imposition of a corrective action plan, denial of incentive payments, and termination of the ACO participant agreement, to address noncompliance with the requirements of the Shared Savings Program and other program integrity issues.
By way of example, consider if in January 2025 OIG determined that an ACO participant has committed information blocking as recently as 2024 and referred this determination to CMS. Under CMS' proposal, the ACO participant would be able to remain on the ACO's certified participant list for the duration of the 2025 performance year. However, CMS would notify the ACO that an ACO participant had been determined to have committed information blocking by OIG and that CMS expected the ACO to take remedial action by removing the ACO participant from its ACO participant list for a specified period of time. To determine if removal was warranted for a period in addition to performance year 2026, CMS would consider whether there was any evidence to suggest that that information blocking was still occurring (for example, whether OIG had made a subsequent determination of information blocking) and whether safeguards had been put in place to prevent the information blocking that was the subject of the referral. Upon a review of these criteria, CMS may require the affected ACO to remove the ACO participant prior to recertification of the ACO participant list for additional performance years. If the ACO participant were to remain when the ACO certifies its ACO participant list for performance year 2026, CMS
If an ACO applicant or a renewal ACO applicant that is itself a health care provider (for example, a large multi-specialty practice that forms a single participant ACO using its existing legal entity and governing body under 42 CFR 425.104) is the subject of an OIG information blocking determination, CMS would deny the ACO's application for participation in the Shared Savings Program for the upcoming performance year for which it was applying to participate. Should OIG make a determination of information blocking with respect to an ACO that is already participating in the Shared Savings Program and refer the determination to us for the application of a disincentive, CMS may terminate the ACO's participation agreement for the upcoming performance year. CMS would assess a subsequent application from an ACO to which the disincentive had been applied under the same criteria described for assessing the return of an ACO participant or ACO provider/supplier. The ACO may participate in the Shared Savings Program after the duration of the disincentive so long as OIG had not made a subsequent determination of information blocking applicable to the health care provider and whether there was evidence that the issue had been corrected and appropriate safeguards had been put in place to prevent its reoccurrence, prior to approving the ACO's application to participate in the Shared Savings Program in a subsequent performance year.
The Shared Savings Program is considering an alternative policy in which CMS would not apply a disincentive in certain circumstances despite an OIG information blocking determination. Under this alternative policy, the Shared Savings Program would consider OIG's referral of an information blocking determination in light of the relevant facts and circumstances before denying the addition of an ACO participant to an ACO participant list (or an ACO provider/supplier to the ACO provider/supplier list), informing an ACO that remedial action should be taken against the ACO participant (or ACO provider/supplier), or denying an ACO's application to participate in the Shared Savings Program. The relevant facts and circumstances could include the nature of the health care provider's information blocking, the health care provider's diligence in identifying and correcting the problem, the time since the information blocking occurred, the time since the OIG's determination of information blocking, and other factors. This alternative policy would offer some flexibility in certain circumstances, where prohibiting an ACO, ACO participant, or ACO provider/supplier from participating in the Shared Savings Program would distort participation incentives and therefore be less appropriate. We are particularly concerned about situations in which many years have passed since an ACO participant or ACO provider/supplier was found to be an information blocker and such an issue had long been remediated. In such a case, the ACO participant or ACO provider/supplier might be incentivized to apply to the Shared Savings Program for a year in which it did not actually intend to participate merely to avoid being barred from doing so at a future date when it did intend to participate, wasting the resources of the ACO and CMS. Such an alternative policy could allow a health care provider to participate in the Shared Savings Program if a significant amount of time had passed between the occurrence of the information blocking and the OIG's determination, and the provider had given assurances in the form and manner specified by CMS that the issue had been corrected and appropriate safeguards had been put in place to prevent its reoccurrence.
An ACO may be able to appeal the application of an information blocking disincentive in the Shared Savings Program. An ACO may appeal an initial determination that is not prohibited from administrative or judicial review under 42 CFR 425.800 by requesting a reconsideration review by a CMS reconsideration official (42 CFR 425.802(a)). To the extent it is not barred by 42 CFR 425.800, an ACO may appeal the removal or denial of a health care provider from an ACO participant list as a result of the referral by OIG of an ACO participant that OIG had determined to be an information blocker. Subject to the same limitation, an ACO applicant or ACO may appeal the denial of the ACO applicant's application or termination of the ACO's participation agreement as a result of the referral by OIG of the ACO applicant or ACO that the OIG had determined to be an information blocker. The underlying information blocking determination made by OIG, however would not be subject to the Shared Savings Program's reconsideration process. The OIG determination is not an initial determination made by CMS, but a determination made by another agency. The Shared Savings Program reconsideration process may not negate, diminish, or otherwise alter the applicability of determinations made by other government agencies (see 42 CFR 425.808(b)).
We remind all health care providers and ACOs that it is possible that a health care provider or any entity, such as an ACO, may meet the definition of a health information network or health information exchange, which is a functional definition, or the definition of a health IT developer of certified health IT, codified in 45 CFR 171.102. If it is found by OIG that such health care provider or entity meets either definition and, while under the same set of facts and circumstances, is also found by OIG to have committed information blocking, then the health care provider or entity would be subject to a different intent standard and civil money penalties administered by OIG (see generally 88 FR 42820; see 88 FR 42828 through 42829).
We invite public comment on these proposals and on whether additional actions should be taken.
As discussed in section III.C.1. of this proposed rule, we recognize that the disincentives we propose would only apply to a subset of health care providers as defined in 45 CFR 171.102. However, we believe it is important for HHS to establish appropriate disincentives that would apply to all health care providers, as such providers are defined in 45 CFR 171.102. This would ensure that any health care provider, as defined in 45 CFR 171.102, that has engaged in information blocking would be subject to appropriate disincentives by an appropriate agency, consistent with the
We request information from the public on additional appropriate disincentives that we should consider in future rulemaking, particularly disincentives that would apply to health care providers, as defined in 45 CFR 171.102, that are not implicated by the disincentives proposed in this rule. We encourage commenters to identify specific health care providers (for example, laboratories, pharmacies, post-acute care providers, etc.) and associated potential disincentives using authorities under applicable Federal law. We also request information about the health care providers that HHS should prioritize when establishing additional disincentives.
This document does not impose any new information collection requirements, that is, reporting, recordkeeping or third-party disclosure requirements. Consequently, there is no need for review by the Office of Management and Budget under the authority of the Paperwork Reduction Act of 1995 (44 U.S.C. 3501
We have examined the impacts of this proposed rule as required by Executive Order 12866 on Regulatory Planning and Review (September 30, 1993), Executive Order 13563 on Improving Regulation and Regulatory Review (January 18, 2011), Executive Order 14094 entitled “Modernizing Regulatory Review” (April 6, 2023), the Regulatory Flexibility Act (RFA) (Pub. L. 96-354, September 19, 1980), section 1102(b) of the Social Security Act, section 202 of the Unfunded Mandates Reform Act of 1995 (March 22, 1995; Pub. L. 104-4), and Executive Order 13132 on Federalism (August 4, 1999).
Executive Order 12866, as amended by Executive Order 14094 published on April 6, 2023, directs agencies to assess all costs and benefits of available regulatory alternatives and, if regulations are necessary, to select regulatory approaches that maximize net benefits (including potential economic, environmental, and public health and safety effects; distributive impacts; and equity). A regulatory impact analysis must be prepared for major rules with significant effects (for example, $200 million or more in any given year). This is not a major rule as defined at 5 U.S.C. 804(2); it is not significant under section 3(f)(1) because it does not reach that economic threshold, nor does it meet the other criteria outlined in the Executive order.
This proposed rule would implement provisions of the Cures Act through changes to 45 CFR part 171 and 42 CFR parts 414, 425, and 495. We believe that the likely aggregate economic effect of these regulations would be significantly less than $200 million.
The expected benefits of this proposed rule would be to deter information blocking that interferes with effective health information exchange and negatively impacts many important aspects of healthcare. We refer readers to the impact analysis of the benefits of prohibiting and deterring information blocking in the ONC Cures Act Final Rule, which encompasses all anticipated benefits without differentiation among actors (85 FR 25936).
We anticipate that OIG would incur some costs associated with investigation as authorized by the Cures Act. The Consolidated Appropriations Act, 2022 appropriates to OIG funding necessary for carrying out information blocking activities (Pub. L. 117-103, March 15, 2022). Additionally, investigated parties may incur some costs in response to an OIG investigation or in response to the application of a disincentive by an agency with the authority to impose a disincentive. Absent information about the frequency of prohibited practices, including the number of OIG determinations of information blocking in a given year that could be referred to an appropriate agency, we are unable to determine the potential costs of this regulation.
The monetary value of the disincentives proposed in this rule, if imposed on a health care provider by an appropriate agency, would be considered transfers. We are unable to reliably estimate the aggregate value of potential disincentive amounts because the value of the disincentive may vary based on other provisions specific to the authority under which the disincentive has been established, as discussed in section III.C.1. of this proposed rule. For instance, the value of a disincentive imposed on an eligible hospital under the disincentive proposed in section III.C.2. of this proposed rule would depend on the amount of IPPS payment received by the eligible hospital.
We invite public comment on potential impacts of the rulemaking.
The RFA and the Small Business Regulatory Enforcement and Fairness Act of 1996, which amended the RFA, require agencies to analyze options for regulatory relief of small businesses. For purposes of the RFA, small entities include small businesses, nonprofit organizations, and Government agencies.
The Department considers a rule to have a significant impact on a substantial number of small entities if it has an impact of more than 3 percent of revenue for more than 5 percent of affected small entities. This proposed rule would not have a significant impact on the operations of a substantial number of small entities, as these changes would not impose any new requirement on any party. We have concluded that this proposed rule likely would not have a significant impact on a substantial number of small entities and that a regulatory flexibility analysis is not required for this rulemaking. Additionally, the Secretary proposes to certify that this proposed rule would not have a significant impact on a substantial number of small entities.
In addition, section 1102(b) the SSA (42 U.S.C. 1302) requires us to prepare a regulatory impact analysis if a rule under Titles XVIII or XIX or section B of Title XI of the SSA may have a significant impact the operations of a substantial number of small rural hospitals. We have concluded that this proposed rule would not have a significant impact on the operations of a substantial number of small rural hospitals because these changes would not impose any requirement on any party. Therefore, a regulatory impact analysis under section 1102(b) of the SSA is not required for this rulemaking. Therefore, the Secretary has certified that this proposed rule will not have a significant impact on the operations of a substantial number of small rural hospitals.
Section 202 of the Unfunded Mandates Reform Act of 1995, Public Law 104-4, requires that agencies assess anticipated costs and benefits before issuing any rule that may result in expenditures in any 1 year by State, local, or Tribal governments, in the aggregate, or by the private sector, of $100 million, adjusted annually for inflation. There are no significant costs associated with these proposals that would impose mandates on State, local, or Tribal governments or the private sector resulting in an expenditure of $177 million in 2023 (after adjustment for inflation) or more in any given year. A full analysis under the Unfunded Mandates Reform Act is not necessary.
Executive Order 13132, Federalism, establishes certain requirements that an agency must meet when it promulgates a rule that imposes substantial direct requirements or costs on State and local governments, preempts State law, or otherwise has federalism implications. In reviewing this rule under the threshold criteria of Executive Order 13132, we have determined that this proposed rule would not significantly affect the rights, roles, and responsibilities of State or local governments. Nothing in this proposed rule imposes substantial direct requirements or costs on State and local governments, preempts State law, or otherwise has federalism implications. We are not aware of any State laws or regulations that are contradicted or impeded by any of the provisions in this proposed rule.
Administrative practice and procedure, Biologics, Diseases, Drugs, Health facilities, Health professions, Medicare, Reporting and recordkeeping requirements.
Administrative practice and procedure, Health facilities, Health professions, Medicare, Reporting and recordkeeping requirements.
Administrative practice and procedure, Health facilities, Health maintenance organizations (HMO), Health professions, Health records, Medicaid, Medicare, Penalties, Privacy, Reporting and recordkeeping requirements.
Computer technology, Electronic health record, Electronic information system, Electronic transactions, Health, Healthcare, Health care provider, Health information exchange, Health information technology, Health information network, Health insurance, Health records, Hospitals, Privacy, Reporting and recordkeeping requirements, Public health, Security.
For the reasons set forth in the preamble, HHS proposes to amend 42 CFR chapter IV and 45 CFR part 171 as follows:
42 U.S.C. 1302, 1395hh, and 1395rr(b)(l).
(b)
42 U.S.C. 1302, 1306, 1395hh, and 1395jjj.
(b) * * *
(6) The information blocking provision of the 21st Century Cures Act (42 U.S.C. 300jj-52).
(b) * * *
(3) Violations of any applicable laws, rules, or regulations that are relevant to ACO operations, including, but not limited to, the laws specified at § 425.208(b).
(a) * * *
(1) ACOs, ACO participants, and ACO providers/suppliers are reviewed during the Shared Savings Program application process and periodically thereafter with regard to their program integrity history, including any history of Medicare program exclusions or other sanctions and affiliations with individuals or entities that have a history of program integrity issues. Program integrity history issues include, but are not limited to, a history of Medicare program exclusions or other sanctions, noncompliance with the requirements of the Shared Savings Program, or violations of laws specified at § 425.208(b).
42 U.S.C. 1302 and 1395hh.
(1) Subject to paragraphs (3) and (4) of this definition, an eligible professional, eligible hospital or CAH that, for an EHR reporting period for a payment year or payment adjustment year—
(4) An eligible professional, eligible hospital or CAH is not a meaningful
42 U.S.C. 300jj-52; 5 U.S.C. 552.
This subpart sets forth disincentives that an appropriate agency may impose on a health care provider based on a determination of information blocking referred to that agency by OIG, and certain procedures related to those disincentives.
(a) Health care providers that commit information blocking are subject to the following disincentives from an appropriate agency based on a determination of information blocking referred by OIG:
(1) An eligible hospital or critical access hospital (CAH) as defined in 42 CFR 495.4 is not a meaningful electronic health record (EHR) user as also defined in 42 CFR 495.4.
(2) A Merit-based Incentive Payment System (MIPS) eligible clinician as defined in 42 CFR 414.1305, who is also a health care provider as defined in § 171.102, is not a meaningful EHR user for MIPS as defined in 42 CFR 414.1305.
(3) Accountable care organizations (ACOs) who are health care providers as defined in § 171.102, ACO participants, and ACO providers/suppliers will be removed from, or denied approval to participate, in the Medicare Shared Savings Program as defined in 42 CFR part 425 for at least 1 year.
(b) [Reserved]
Following referral of a determination of information blocking by OIG, an appropriate agency that imposes a disincentive or disincentives specified in § 171.1001(a) would send a notice to the health care provider subject to the disincentive or disincentives, via usual methods of communication for the program or payment system under which the disincentive is applied, that includes:
(a) A description of the practice or practices that formed the basis for the determination of information blocking referred by OIG;
(b) The basis for the application of the disincentive or disincentives being imposed;
(c) The effect of each disincentive; and
(d) Any other information necessary for a health care provider to understand how each disincentive will be implemented.
This subpart sets forth the information that will be posted on the Office of the National Coordinator for Health Information Technology's (ONC) public website about actors that have been determined by the HHS Office of Inspector General to have committed information blocking.
(a)
(i) Health care provider name;
(ii) Business address;
(iii) The practice, as the term is defined in § 171.102 and referenced in § 171.103, found to have been information blocking;
(iv) Disincentive(s) applied; and
(iv) Where to find any additional information about the determination of information blocking that is publicly available via HHS or, where applicable, another part of the U.S. Government.
(2) The information specified in paragraph (a)(1) of this section will not be posted prior to a disincentive being imposed and will not include information about a disincentive that has not been applied.
(3) Posting of the information specified in paragraph (a)(1) of this section will be conducted in accordance with existing rights to review information that may be associated with a disincentive specified in § 171.1001.
(b)
(i) Type of actor;
(ii) Actor's legal name, including any alternative or additional trade name(s) under which the actor operates;
(iii) The practice, as the term is defined in § 171.102 and referenced in § 171.103, found to have been information blocking or alleged to be information blocking in the situation specified in paragraph (b)(2)(i) of this section; and
(iv) Where to find any additional information about the determination (or resolution of information blocking as specified in paragraph (b)(2)(i) of this section) of information blocking that is publicly available via HHS or, where applicable, another part of the U.S. Government.
(2) The information specified in paragraph (b)(1) of this section will not be posted until one of the following occurs:
(i) OIG enters into a resolution of civil money penalty (CMP) liability; or
(ii) A CMP imposed under subpart N of 42 CFR part 1003 has become final consistent with the procedures in subpart O of 42 CFR part 1003.
Department of Defense (DoD), General Services Administration (GSA), and National Aeronautics and Space Administration (NASA).
Proposed rule; extension of comment period.
DoD, GSA, and NASA issued a proposed rule on October 3, 2023, proposing to amend the Federal Acquisition Regulation (FAR) to partially implement an Executive Order to standardize cybersecurity contractual requirements across Federal agencies for unclassified Federal information systems, and a statute on improving the Nation's cybersecurity. The deadline for submitting comments is being extended from December 4, 2023, to February 2, 2024, to provide additional time for interested parties to provide comments on the proposed rule.
For the proposed rule published on October 3, 2023 (88 FR 68402), the deadline to submit comments is extended. Submit comments by February 2, 2024.
Submit comments in response to FAR Case 2021-019 to the Federal eRulemaking portal at
For clarification of content, Ms. Carrie Moore, Procurement Analyst, at 571-300-5917 or by email at
DoD, GSA, and NASA published a proposed rule in the
Government procurement.
Department of Defense (DoD), General Services Administration (GSA), and National Aeronautics and Space Administration (NASA).
Proposed rule; extension of comment period.
DoD, GSA, and NASA issued a proposed rule on October 3, 2023, proposing to amend the Federal Acquisition Regulation (FAR) to implement an Executive order on cyber threats and incident reporting and information sharing for Federal contractors and to implement related cybersecurity policies. The deadline for submitting comments is being extended from December 4, 2023, to February 2, 2024, to provide additional time for interested parties to provide comments on the proposed rule.
For the proposed rule published on October 3, 2023 (88 FR 68055), the comment period is extended. Submit comments by February 2, 2024.
Submit comments in response to FAR Case 2021-017 to the Federal eRulemaking portal at
For clarification of content, Ms. Marissa Ryba, Procurement Analyst, at 314-586-1280 or by email at
DoD, GSA, and NASA published a proposed rule in the
Government procurement.
National Marine Fisheries Service (NMFS), National Oceanic and Atmospheric Administration (NOAA), Commerce.
Notice; informational meeting and public hearing.
We, NMFS, will hold an informational meeting and formal public hearing related to our proposed rule published on August 15, 2023, to promulgate protective regulations for the Banggai cardinalfish (
An informational meeting and virtual public hearing will be held online on November 17, 2023, from 7 to 8:30 p.m. (Eastern Standard Time).
The informational meeting and public hearing will be conducted as a virtual meeting, and any member of the public can join by internet or phone regardless of location. You may join the virtual meeting using a web browser, a mobile app on a phone (app installation required), or—to listen only—using just a phone call, as specified at this link:
You may submit comments verbally at the public hearing. You may also submit comments in writing by the following method:
•
We will accept anonymous comments (enter N/A in the required fields if you wish to remain anonymous). Attachments to electronic comments will be accepted in Microsoft Word, Excel, or Adobe PDF file formats only.
Details on the virtual public hearing will be made available on our website at:
Celeste Stout, NMFS, Office of Protected Resources,
On August 15, 2023, NMFS published a proposed rule to promulgate protective regulations for the Banggai cardinalfish under the Endangered Species Act (ESA; 88 FR 55431). In that notice of proposed rulemaking, we also announced a 60-day public comment period, and an option to request a public hearing. On September 27, 2023, we received a letter requesting a public hearing be held as well as a 90-day extension to the public comment period. In response, the public comment period was extended by another 60 days, and we are accepting public comments on the proposed rule through December 15, 2023 (88 FR 71523). In addition, a virtual public hearing and will be held online on November 17, 2023, from 7 to 8:30 p.m. (Eastern Standard Time) as specified in
The informational meeting and public hearing on November 17, 2023, will be conducted online as a virtual meeting, as specified in the
Written comments may also be submitted during the public comment period as described under
People needing accommodations so that they may attend and participate at the public hearing should submit a request for reasonable accommodations as soon as possible, and no later than 7 business days prior to the hearing date, by contacting Celeste Stout (see
The authority for this action is the Endangered Species Act of 1973, as amended (16 U.S.C. 1531
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 or other forms of information technology.
Comments regarding this information collection received by December 1, 2023 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 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 or other forms of information technology.
Comments regarding this information collection received by December 1, 2023 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.
Information collection is required by 2 CFR parts 200 and 400. For assistance agreements awarded on or after December 26, 2014, 2 CFR part 400 implements OMB regulations in 2 CFR part 200. These regulations include only those provisions mandated by statue or added by USDA to ensure sound and effective financial assistance management. These regulations set forth pre-award, post-award, and after-the-grant requirements. This information is needed by FAS project officers, grant specialists, program coordinators, managers, and finance officials to manage/oversee recipient programmatic and financial performance under FAS assistance agreements.
Animal and Plant Health Inspection Service, USDA.
Notice of request for comments; correction.
The Animal and Plant Health Inspection Service (APHIS) is correcting a notice that was published in the
We will consider all comments that we receive on or before January 2, 2024.
You may submit comments by either of the following methods:
•
•
Supporting documents and any comments we receive on this docket may be viewed at
For information on the importation of animals and animal products into the United States from the European Union, contact Dr. Alexandra MacKenzie, Senior Veterinary Medical Officer, Live Animal Imports/Ruminants, Swine, Semen, and Embryos, Strategy and Policy, VS, APHIS, 4700 River Road, Unit 39, Riverdale, MD 20737; (301) 851-3411; email:
On June 29, 2023, the Animal and Plant Health Inspection Service published in the
In the
1. On page 42042, in the third column, correct
2. On page 42043, in the first column, make the following corrections:
Rural Housing Service, USDA.
Notice of meeting.
The Community Facilities Loan and Grant program (Community Facilities) of the Rural Housing Service (RHS or the Agency), a Rural Development agency of the United States Department of Agriculture (USDA), is consolidating the existing regulations that govern Community Facility direct loans and grants, fire and rescue and other small community facilities projects; as well as codifying the Tribal College Initiative, and Economic Impact Initiative grant programs that will incorporate all the necessary loan and grant making information into one streamlined final rule. The result will be an up-to-date comprehensive regulation that will be used to administer the programs. Community Facilities is hosting a virtual listening session to obtain stakeholder input on key proposed areas for changes and/or updates to the proposed consolidated Community Facilities Direct Loan and Grant regulation. This session is open to the public.
The virtual listening session will be held on November 7, 2023, beginning at 2 p.m. (ET).
The listening session will convene virtually on the Zoom platform. All participants must pre-register. To register please use the following link:
• General Session—November 7, 2023, 2 p.m. (ET)
A confirmation email, including the Zoom link and teleconference information for the meeting, will be sent upon receipt of the registration.
The Agency will accept comments regarding the subject matter in the
Surabhi Dabir, Senior Policy Advisor, Community Facilities Program, Rural Housing Service, USDA, 1400 Independence Avenue SW, Washington, DC 20250-0781, Telephone: (202) 568-9315; email:
Community Facilities offers direct loans and grants to develop or improve essential facilities and services in communities across rural America. These amenities meet essential needs and help increase the competitiveness of rural communities in attracting and retaining businesses that provide employment and services for their residents.
Public bodies, non-profit organizations and federally recognized Tribes can use the funds to construct, expand or improve facilities that provide health care, education, public safety, and public services. Projects can include fire and rescue stations, village and town halls, health care clinics, hospitals, adult- and child-care centers, assisted living facilities, rehabilitation centers, public buildings, schools, libraries, and many other essential community facilities. Financing may also cover the costs for land acquisition, professional fees, and purchase of equipment when associated with an essential community facility. These facilities not only improve the basic quality of life but assist in the development and sustainability of rural America.
The following questions and discussion items are provided as examples of topics stakeholders may wish to provide comment. The Community Facilities Program is requesting comment and discussion on the following topics:
1. What challenges or barriers have you encountered that make it difficult to access CF loan and grant resources?
2. What suggestions do you have for Community Facilities to address these challenges through regulatory changes?
3. Community Facilities is contemplating allowing projects below a certain threshold to submit a simplified application with less required documentation. What key requirements would you simplify?
4. Community Facilities has historically limited investments in recreation type projects. Community Facilities is considering expanding eligibility to certain recreation facilities like hiking/biking trails and public pools. Do you have suggestions for what recreation facilities should and should not be funded?
5. The Agriculture Improvement Act of 2018 (2018 Farm Bill) gave Community Facilities the authority to refinance certain hospital debt to preserve a rural community's access to health services. What suggestions do you have for how Community Facilities should implement the hospital refinancing provision?
6. Community Facilities is contemplating expanding eligibility for funding housing projects to meet the essential workforce needs of the education, health care, and public safety sectors. What types of housing projects should Community Facilities fund? What types of facilities should be allowed to use Agency funding to finance housing projects for a facility's workforce needs? What factors or limitations should Community Facilities consider?
7. Any other key topics or issues Community Facilities should consider addressing through the regulation update?
Community Facilities is consolidating its existing regulations at 7 CFR part 3570, subpart B (for grants), and 7 CFR part 1942, subparts A (for CF direct loans) and C (for Fire and Rescue and Other Small Community Facilities Projects), and incorporating all the necessary loan and grant making requirements into one streamlined rule; 7 CFR part 3570, subpart A. This consolidation will update its regulations and codify policies to current practices. It will also codify the Tribal College Initiative and Economic Impact Initiative grant programs. Community Facilities is seeking stakeholder input on key proposed areas for changes and updates to the consolidated Community Facilities Direct Loan and Grant
After the listening session, the Agency will consider stakeholder input for identifying opportunities for regulatory updates to policies and practices of Community Facilities' direct loan and grant programs.
Enforcement and Compliance, International Trade Administration, Department of Commerce.
As a result of this expedited sunset review, the U.S. Department of Commerce (Commerce) finds that revocation of the antidumping duty (AD) order on drawn stainless steel sinks (sinks) from the People's Republic of China (China) would be likely to lead to continuation or recurrence of dumping at the levels indicated in the “Final Results of Review” section of this notice.
Applicable November 1, 2023.
Adam Simons, AD/CVD Operations, Office IX, Enforcement and Compliance, International Trade Administration, U.S. Department of Commerce, 1401 Constitution Avenue NW, Washington, DC 20230; telephone: (202) 482-6172.
On July 3, 2023, Commerce published the
On July 17, 2023, Elkay Manufacturing Company (Elkay), a domestic interested party, notified Commerce of its intent to participate within the 15-day period specified in 19 CFR 351.218(d)(1)(i).
On August 2, 2023, Commerce received a complete substantive response to the
The products covered by the
A complete discussion of all issues raised in this sunset review is provided in the accompanying Issues and Decision Memorandum. A list of the issues discussed in the Issues and Decision Memorandum is included in the appendix to this notice. 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
Pursuant to sections 751(c)(1) and 752(c)(1) and (3) of the Act, Commerce determines that revocation of the
This notice serves as the only reminder to parties subject to an administrative protective order (APO) of their responsibility concerning the return/destruction or conversion to judicial protective order of proprietary information disclosed under APO in accordance with 19 CFR 351.305. Timely notification of the return or destruction of APO materials or conversion to judicial protective order is hereby requested. Failure to comply with the regulations and terms of an APO is a sanctionable violation.
We are issuing and publishing the results in accordance with sections 751(c), 752(c), and 771(i)(1) of the Act and 19 CFR 351.218.
Pursuant to section 6(c) of the Educational, Scientific and Cultural Materials Importation Act of 1966 (Pub. L. 89-651, as amended by Pub. L. 106-36; 80 Stat. 897; 15 CFR part 301), we invite comments on the question of whether instruments of equivalent scientific value, for the purposes for which the instruments shown below are intended to be used, are being manufactured in the United States.
Comments must comply with 15 CFR 301.5(a)(3) and (4) of the regulations and be postmarked on or before November 21, 2023. Address written comments to Statutory Import Programs Staff, Room 3720, U.S. Department of Commerce, Washington, DC 20230. Please also email a copy of those comments to
Enforcement and Compliance, International Trade Administration, Department of Commerce.
In accordance with the Tariff Act of 1930, as amended (the Act), the U.S. Department of Commerce (Commerce) is automatically initiating the five-year reviews (Sunset Reviews) of the antidumping duty and countervailing duty (AD/CVD) order(s) and suspended investigation(s) listed below. The U.S. International Trade Commission (ITC) is publishing concurrently with this notice its notice of institution of five-year reviews which covers the same order(s) and suspended investigation(s).
Applicable November 1, 2023.
Commerce official identified in the “Initiation of Review” section below at AD/CVD Operations, Enforcement and Compliance, International Trade Administration, U.S. Department of Commerce, 1401 Constitution Avenue NW, Washington, DC 20230. For information from the ITC, contact Mary Messer, Office of Investigations, U.S. International Trade Commission at (202) 205-3193.
Commerce's procedures for the conduct of Sunset Reviews are set forth in its
In accordance with section 751(c) of the Act and 19 CFR 351.218(c), we are initiating the Sunset Reviews of the following antidumping and countervailing duty order(s) and suspended investigation(s):
As a courtesy, we are making information related to sunset proceedings, including copies of the pertinent statute and Commerce's regulations, Commerce's schedule for sunset reviews, a listing of past revocations and continuations, and current service lists, available to the public on Commerce's website at the following address:
In accordance with section 782(b) of the Act, any party submitting factual information in an AD/CVD proceeding must certify to the accuracy and completeness of that information. Parties must use the certification formats provided in 19 CFR 351.303(g). Commerce intends to reject factual submissions if the submitting party does not comply with applicable revised certification requirements.
Pursuant to 19 CFR 351.103(d), Commerce will maintain and make available a public service list for these proceedings. Parties wishing to participate in any of these five-year reviews must file letters of appearance as discussed at 19 CFR 351.103(d). To facilitate the timely preparation of the public service list, it is requested that those seeking recognition as interested parties to a proceeding submit an entry of appearance within 10 days of the publication of the Notice of Initiation. Because deadlines in sunset reviews can be very short, we urge interested parties who want access to proprietary information under administrative protective order (APO) to file an APO application immediately following publication in the
Domestic interested parties, as defined in section 771(9)(C), (D), (E), (F), and (G) of the Act and 19 CFR 351.102(b), wishing to participate in a sunset review must respond not later than 15 days after the date of publication in the
If we receive an order-specific notice of intent to participate from a domestic interested party, Commerce's regulations provide that all parties wishing to participate in a sunset review must file complete substantive responses not later than 30 days after the date of publication in the
This notice of initiation is being published in accordance with section 751(c) of the Act and 19 CFR 351.218(c).
National Institute of Standards and Technology, Department of Commerce.
Notice of open meeting.
The National Institute of Standards and Technology (NIST) announces that the National Artificial Intelligence Advisory Committee (NAIAC or Committee) will hold an open meeting via web conference on Wednesday, November 15, 2023, from 10:00 a.m.-1:00 p.m. Eastern time. The primary purpose of this meeting is for the Committee to share and discuss updates on each working group's goals and deliverables, including those of the NAIAC Law Enforcement Subcommittee. The Committee will also deliberate on draft findings and recommendations. The final agenda will be posted to the NAIAC website:
The meeting will be held on Wednesday, November 15, 2023, from 10:00 a.m.-1:00 p.m. Eastern time.
The meeting will be held via web conference. For instructions on how to attend and/or participate in the meeting, please see the
Alicia Chambers, Committee Liaison Officer, National Institute of Standards and Technology, 100 Bureau Drive, MS 1000, Gaithersburg, MD 20899,
Pursuant to the Federal Advisory Committee Act, as amended, 5 U.S.C 1001
The NAIAC is authorized by Section 5104 of the National Artificial Intelligence Initiative Act of 2020 (Pub. L. 116-283, Div. E), in accordance with the provisions of the Federal Advisory Committee Act, as amended (FACA), 5 U.S.C. 1001
National Marine Fisheries Service (NMFS), National Oceanic and Atmospheric Administration (NOAA), Commerce.
Notice; issuance of incidental harassment authorization.
NMFS has received a request from the U.S. Army Corps of Engineers (USACE), Portland District (Corps), for the re-issuance of a previously issued incidental harassment authorization (IHA) with the only change being to the effective dates. The initial IHA authorized take of five species of marine mammals, by Level A and Level B harassment, incidental to construction associated with the Tillamook South Jetty Repairs in Tillamook Bay, Oregon. The project has been delayed and none of the work covered in the initial IHA has been conducted. The scope of the activities and anticipated effects remain the same, authorized take numbers are not changed, and the required mitigation, monitoring, and reporting remains the same as included in the initial IHA. NMFS is, therefore, issuing a second identical IHA to cover the incidental take analyzed and authorized in the initial IHA.
This authorization is effective from November 1, 2023, through October 31, 2024.
An electronic copy of the final 2022 IHA previously issued to the Corps, the Corps' application, and the
Rachel Wachtendonk, Office of Protected Resources, NMFS, (301) 427-8401.
Sections 101(a)(5)(A) and (D) of the Marine Mammal Protection Act (MMPA; 16 U.S.C. 1361
An authorization for incidental takings shall be granted if NMFS finds that the taking will have a negligible impact on the species or stock(s), will not have an unmitigable adverse impact on the availability of the species or stock(s) for subsistence uses (where relevant), and if the permissible methods of taking and requirements pertaining to the mitigation, monitoring and reporting of such takings are set forth.
NMFS has defined “negligible impact” in 50 CFR 216.103 as an impact
The MMPA states that the term “take” means to harass, hunt, capture, kill or attempt to harass, hunt, capture, or kill any marine mammal.
Except with respect to certain activities not pertinent here, the MMPA defines “harassment” as any act of pursuit, torment, or annoyance which (i) has the potential to injure a marine mammal or marine mammal stock in the wild (Level A harassment); or (ii) has the potential to disturb a marine mammal or marine mammal stock in the wild by causing disruption of behavioral patterns, including, but not limited to, migration, breathing, nursing, breeding, feeding, or sheltering (Level B harassment).
On August 18, 2022, NMFS published final notice of our issuance of an IHA authorizing take of marine mammals incidental to the Tillamook South Jetty Repairs Project (87 FR 50836). The effective dates of that IHA were November 1, 2022, through October 31, 2023. On October 16, 2023, the Corps informed NMFS that the project was delayed. None of the work identified in the initial IHA (
The planned activities (including mitigation, monitoring, and reporting), authorized incidental take, and anticipated impacts on the affected stocks are the same as those analyzed and authorized through the previously issued IHA.
The Corps constructed, and continues to maintain, two jetties at the entrance of Tillamook Bay, Oregon to provide reliable navigation into and out of the bay. A Major Maintenance Report (MMR) was completed in 2003 to evaluate wave damage to the jetties and provide design for necessary repairs. Some repairs to the North Jetty were completed in 2010, and further repairs to the North Jetty root and trunk began in January 2022. The Tillamook South Jetty Repairs Project (
Species that are expected to be taken by the planned activity include harbor porpoise (
We refer to the documents related to the previously issued IHA, which include the
The Corps will conduct activities as analyzed in the initial 2022 IHA. As described above, the number of authorized takes of the same species and stocks of marine mammals are identical to the numbers that were found to meet the negligible impact and small numbers standards and authorized under the initial IHA and no new information has emerged that would change those findings. The re-issued 2023 IHA includes identical required mitigation, monitoring, and reporting measures as the initial IHA, and there is no new information suggesting that our analysis or findings should change.
Based on the information contained here and in the referenced documents, NMFS has determined the following: (1) the required mitigation measures will effect the least practicable impact on marine mammal species or stocks and their habitat; (2) the authorized takes will have a negligible impact on the affected marine mammal species or stocks; (3) the authorized takes represent small numbers of marine mammals relative to the affected stock abundances; and (4) the Corps' activities will not have an unmitigable adverse impact on taking for subsistence purposes as no relevant subsistence uses of marine mammals are implicated by this action.
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 CE B4 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 determined that categorical exclusion from further NEPA review remains appropriate for reissuance of this IHA.
Section 7(a)(2) of the Endangered Species Act of 1973 (ESA: 16 U.S.C. 1531
NMFS has issued an IHA to the Corps for in-water construction activities associated with the specified activity from November 1, 2023, through October 31, 2024. All previously described mitigation, monitoring, and reporting requirements from the initial 2022 IHA are incorporated.
National Technical Information Service, Department of Commerce.
Notice of information collection, request for comment.
The Department of Commerce, in accordance with the Paperwork Reduction Act of 1995 (PRA), invites the general public and other Federal agencies to comment on proposed, and continuing information collections, which helps us assess the impact of our information collection requirements and minimize the public's reporting burden. The purpose of this notice is to allow for 60 days of public comment preceding submission of the collection to OMB.
To ensure consideration, comments regarding this proposed information collection must be received on or before January 2, 2024.
Interested persons are invited to submit written comments by mail to Daniel Ramsey, Supervisory Program Manager, Office of Program Management, National Technical Information Service, Department of Commerce or by email to
Requests for additional information or specific questions related to collection activities should be directed to Daniel Ramsey, Supervisory Program Manager, Office of Program Management, National Technical Information Service, Department of Commerce, 5301 Shawnee Road, Alexandria, VA 22312, email:
This notice informs the public that the National Technical Information Service (NTIS) is requesting approval for extension of the above information collection for use in connection with the final rule for the “Certification Program for Access to the Death Master File.” The final rule was promulgated under section 203 of the Bipartisan Budget Act of 2013, Public Law 113-67 (Act) and published on June 1, 2016 (81 FR 34882). The rule became effective on November 28, 2016 (15 CFR part 1110). No changes are being proposed to the currently approved information collection.
The Act prohibits the Secretary of Commerce (Secretary) from disclosing DMF information during the three-year period following an individual's death (Limited Access DMF), unless the person requesting the information has been certified to access the Limited Access DMF pursuant to certain criteria in a program that the Secretary establishes. The Secretary delegated the authority to carry out Section 203 to the Director of NTIS.
To accommodate the requirements of the final rule, NTIS is using both the ACAB Systems Safeguards Attestation Form and the AG or IG Systems Safeguards Attestation Form.
The ACAB Systems Safeguards Attestation Form requires an “Accredited Conformity Assessment Body” (ACAB), as defined in the final rule, to attest that a Person seeking certification or a Certified Person seeking renewal of certification has information security systems, facilities and procedures in place to protect the security of the Limited Access DMF, as required under ection 1110.102(a)(2) of the final rule. The ACAB Systems Safeguards Attestation Form collects information based on an assessment by the ACAB conducted within three years prior to the date of the Person or Certified Person's submission of a completed certification statement under Section 1110.101(a) of the final rule. This collection includes specific requirements of the final rule, which the ACAB must certify are satisfied, and the provision of specific information by the ACAB, such as the date of the assessment and the auditing standard(s) used for the assessment.
Section 1110.501(a)(2) of the final rule provides that a state or local government office of AG or IG and a Person or Certified Person that is a department or agency of the same state or local government, respectively, are not considered to be owned by a common “parent” entity under Section 1110.501(a)(1)(ii) for the purpose of determining independence, and attestation by the AG or IG is possible. The AG or IG Systems Safeguards Attestation Form is for the use of a state or local government AG or IG to attest on behalf of a state or local government department or agency Person or Certified Person. The AG or IG Systems Safeguards Attestation Form requires the state or local government AG or IG to attest that a Person seeking certification or a Certified Person seeking renewal of certification has information security systems, facilities and procedures in place to protect the security of the Limited Access DMF, as required under Section 1110.102(a)(2) of the final rule. The AG or IG Systems Safeguards Attestation Form collects information based on an assessment by the state or local government AG or IG conducted within three years prior to the date of the Person or Certified Person's submission of a completed certification statement under Section 1110.101(a) of the final rule. This collection includes specific requirements of the final rule, which the state or local government AG or IG must certify are satisfied, and the provision of specific information by the state or local government AG or IG, such as the date of the assessment.
The information will be collected by paper format, email, and mail.
NTIS estimates the total annual cost to the public for both the ACAB Systems Safeguards Attestation Forms and the AG or IG Systems Safeguards Attestation Forms to be $223,340 ($206,160 for ACAB Systems Safeguards Attestation Forms + $17,180 for AG or IG Systems Safeguards Attestation Forms).
We are soliciting public comments to permit the Department/Bureau to: (a) Evaluate whether the proposed information collection is necessary for the proper functions of the Department, including whether the information will have practical utility; (b) Evaluate the accuracy of our estimate of the time and cost burden for this proposed collection, including the validity of the methodology and assumptions used; (c) Evaluate ways to enhance the quality, utility, and clarity of the information to be collected; and (d) Minimize the reporting burden on those who are to respond, including the use of automated collection techniques or other forms of information technology.
Comments that you submit in response to this notice are a matter of public record. We will include or summarize each comment in our request to OMB to approve this Information Collection Review (ICR). Before including your address, phone number, email address, or other personal identifying information in your comment, you should be aware that your entire comment—including your personal identifying information—may be made publicly available at any time. While you may ask us in your comment to withhold your personal identifying information from public review, we cannot guarantee that we will be able to do so.
Department of the Air Force, Department of Defense (DoD).
30-Day information collection notice.
The DoD has submitted to the Office of Management and Budget (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 December 1, 2023.
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,
The data collected consists of 26 questions used to develop the personnel profile for the individual within the system. Information is collected from respondents via a face-to-face interview conducted at the respective duty location. The interview will be hosted and carried out by a uniformed military member or government civilian, assigned the FES-IMS “Core Data” collection role.
You may also submit comments and recommendations, identified by Docket ID number and title, by the following method:
•
Requests for copies of the information collection proposal should be sent to Ms. Duncan at
Department of the Air Force, Department of Defense (DoD).
30-Day information collection notice.
The DoD has submitted to the Office of Management and Budget (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 December 1, 2023.
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
Aircraft pilots are required to meet certain medical standards in order to function as a required aircrew member. If a pilot develops a new symptom or condition and discloses it during aeromedical screening, the pilot runs the risk of temporary or permanent loss of their flying status. This can result in negative occupational, social, and financial repercussions for the pilot. For this reason, it has been hypothesized that a subset of pilots participates in healthcare avoidance or does not fully disclose during aeromedical screening due to fear for aeromedical certificate loss. Evolving data is beginning to clarify the vast scope of this issue. A recent publication of over 3,500 US pilots showed that 56.1% of pilots reported a history of healthcare avoidance behavior due to fear for loss of aeromedical certification (1). More concerning, 60.1% of another sample of US pilots reported delaying or forgoing medical care due to fear for loss of flying status (2). Healthcare avoidance in aircraft pilots due to fear for loss of flying status may be prevalent, but many unanswered questions remain about factors that influence healthcare utilization and medical disclosure during aeromedical screening.
Research on pilot healthcare avoidance is critical to maintain military readiness for the following reasons: (1) optimizing existing medical assets increases the efficiency and effectiveness of warfighting capability without increased investment; (2) early presentation to medical care can increase the operational career and medical readiness of pilots, resulting in increased readiness efficacy and cost savings; and (3) research on pilots can inform how the aeromedical system supports this generation of pilots in the future (this population of pilots is hypothesized to have different healthcare preferences and behaviors from previous generations of pilots).
You may also submit comments and recommendations, identified by Docket ID number and title, by the following method:
•
Requests for copies of the information collection proposal should be sent to Ms. Duncan at
U.S. Army Corps of Engineers (USACE), Department of the Army, Department of Defense (DoD).
60-Day information collection notice.
In compliance with the
Consideration will be given to all comments received by January 2, 2024.
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 Headquarters, U.S. Army Corps of Engineers, 441 G Street NW, Washington, DC 20314-1000, ATTN: Mr. Matt Wilson, or call 202-761-5856.
The U.S. Army Corps of Engineers (Corps), through its Regulatory Program, regulates certain activities in waters of the United States (WOTUS), pursuant to Section 404 of the Clean Water Act (CWA). WOTUS are defined under 33 CFR part 328. The Corps also regulates certain activities in “navigable waters of the United States” pursuant to Sections 9 and 10 of the Rivers and Harbors Act of 1899 (RHA). The Corps has authorized its district engineers to issue formal determinations concerning the applicability of the CWA or the RHA to tracts of land. (See 33 CFR 320.1(a)(6)). These formal determinations concerning the applicability of the CWA or RHA to tracts of land are known as “jurisdictional determinations.” Approved jurisdictional determinations (AJDs) and preliminary JDs (PJDs) are tools used by the Corps to help implement Section 404 of the CWA (33 U.S.C. 1344) and Sections 9 and 10 of the RHA (33 U.S.C. 401,
On August 29, 2023, the U.S. Environmental Protection Agency (EPA) and Department of the Army (the agencies) issued a final rule to amend the final “Revised Definition of `Waters of the United States'” rule, published in the
As a result of ongoing litigation on the January 2023 Rule, the agencies are currently implementing the January 2023 Rule, as amended by the conforming rule, in 23 states, the District of Columbia, and the U.S. Territories. In the other 27 states and for certain parties, the agencies are interpreting “waters of the United States” consistent with the pre-2015 regulatory regime and the Supreme Court's decision in
This information collection request thus implements the collections of information associated with the Corps' implementation of the 2023 Rule, as amended, and the pre-2015 regime consistent with
In order for the Corps to determine the amount and extent of aquatic resources at a site, the Corps must geographically delineate aquatic resources in accordance with established regulations, policy, and guidance. The aquatic resource delineation datasheets fall into two main categories: (1) the ENG 6119 (0-9) series, which are our automated wetland determination data sheets (ADS) and (2) the Ordinary High Water Mark (OHWM) field identification datasheet.
To delineate wetlands, the Corps uses the 1987 Corps of Engineers Wetlands Delineation Manual (Corps Manual) and the most current applicable regional supplements. There are ten wetland data sheets in total but these really are one single collection that is split into 10 regional sub-forms. The ADSs streamline the information collection process by incorporating reference material and analytical processes directly into the form, which is provided as a Microsoft Excel document rather than the PDF form included in the regional supplements. Additionally, the ADSs automate data analysis using information input by the respondent (
Non-tidal, non-wetland waters of the United States, which are defined in 33 CFR part 328, must be delineated to the extent of the ordinary high water mark (OHWM), which is defined at 33 CFR 328.3(c)(4) and 33 CFR 329.11(a)(1). Regulatory Guidance Letter (RGL) 05-05 provides guidance on identification of OHWM. In 2022, the Corps released a draft Engineer Research and Development Center Technical Report, “National Ordinary High Water Mark Field Delineation Manual for Rivers and Streams” (Draft National Manual), which is the first national manual that provides and describes indicators and a methodology which will help improve consistency in the identification and delineation of the OHWM by (1) providing consistent definitions of OHWM indicators; (2) outlining a clear, step-by-step process for identifying the OHWM using a Weight-of-Evidence approach; and (3) providing a datasheet for logging information at a site. As part of the development of the Draft National Manual, the Corps developed a Data Sheet (ENG 6250) for facilitating documentation of the OHWM.
Office of the Assistant Secretary of Defense for Health Affairs (OASD(HA)), Department of Defense, (DoD).
30-Day information collection notice.
The DoD has submitted to the Office of Management and Budget (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 December 1, 2023.
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,
You may also submit comments and recommendations, identified by Docket ID number and title, by the following method:
•
Requests for copies of the information collection proposal should be sent to Ms. Duncan at
Office of the Under Secretary of Defense for Intelligence and Security, (OUSD(I&S)), Department of Defense, (DoD).
60-Day information collection notice.
In compliance with the
Consideration will be given to all comments received by January 2, 2024.
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 Angela Duncan,
The AARO Contact Form for Authorized Reporting information collection will be used to gather contact information, to include Personally Identifiable Information (PII), from members of the public. The collection is necessary to enable the All-domain Anomaly Resolution Office (AARO), Office of the Secretary of Defense, Department of Defense, to meet its statutory requirements. FY23 NDAA, Section 1673, “Unidentified Anomalous Phenomena Reporting Procedures” requires that the Secretary of Defense “issue clear public guidance for how to securely access the mechanism for authorized reporting” no later than 180 days from enactment, which was June 2023. Furthermore, Section 1683 of the FY23 NDAA requires AARO to produce a Historical Record Report detailing the historical record of the United States government relating to unidentified anomalous phenomena (UAP). To meet this requirement, AARO relies on the “AARO Contact Form” to receive reports from individuals with knowledge of potential UAP programs.
The proposed information collection,
The
The respondents are current and former U.S. Government employees, service members, and contractors who want to contact AARO in furtherance of providing authorized reporting regarding potential U.S. Governments activities and events related to UAP. The respondents will be asked to voluntarily provide their contact information by completing fields and using drop down menus on a page within AARO's website (
Information, including PII, collected from the public will be processed and stored in an electronic environment accredited to handle and secure PII. AARO will then review submitted information to prioritize potential oral history interviews of persons so that they might make an authorized report. The end result of the information collection is the successful ability of individuals to contact AARO, provide a report, and contribute to the HRR, and for AARO to meet its statutory requirements.
Office of the Chairman of the Joint Chiefs of Staff, Department of Defense (DoD).
Notice of Federal advisory committee meeting.
The DoD is publishing this notice to announce that the following Federal advisory committee meeting of the Board of Visitors, National Defense University (BoV NDU) will take place.
Friday, December 1, 2023 from 9 a.m. to 3 p.m.
Marshall Hall, Building 62, Room 155, the National Defense University, 300 5th Avenue SW, Fort McNair, Washington, DC 20319-5066. Visitors should report to the Front Security Desk in the lobby of Marshall Hall and from there, they will be directed to the meeting room.
Ms. Joycelyn Stevens, (202) 685-0079 (Voice)
This meeting is being held in accordance with chapter 10 of title 5 United States Code (U.S.C.) (formerly known as the Federal Advisory Committee Act (FACA) (5 U.S.C., App.)). Under the provisions of the Government in the Sunshine Act of 1976 (5 U.S.C. 552b, as amended), and 41 CFR 102-3.140 and 102-3.150. Pursuant to 5 U.S.C. 552b and 41 CFR 102-3.140 through 102-3.165, this meeting is open to the public.
To allow sufficient time for processing, access requests should be submitted 10 days before the event. The visitor will receive notification via email, and, if approved, a one-day visitor's pass for entry onto the base. The visitor must print the pass and present it to the guard at the gate to enter Fort McNair.
(a) If the visitor has a valid U.S. driver's license:
(i) The visitor can apply for access online at
(b) If the visitor does not have a U.S. driver's license:
(i) The visitor must fill out a paper application in person at the Fort McNair Visitor Control Center (VCC)/Police Substation (Building 65) from 8 a.m. to 4 p.m. Monday through Friday.
The visitor must apply in person at the Fort McNair Visitor Control Center (VCC)/Police Substation (Building 65) from 8 a.m. to 4 p.m. Monday through Friday. The visitor should plan to arrive early, as the procedure for running background checks and issuing passes can take much longer than expected.
For additional information, please go to
Office of Elementary and Secondary Education (OESE), Department of Education (ED).
Notice.
In accordance with the Paperwork Reduction Act (PRA) of 1995, the Department is proposing a new information collection request (ICR).
Interested persons are invited to submit comments on or before December 1, 2023.
Written comments and recommendations for proposed information collection requests should be submitted within 30 days of publication of this notice. Click on this link
For specific questions related to collection activities, please contact Stephanie Jones, (202) 453-7498.
The Department 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.
The U.S. Department of Education (ED) is requesting authorization to collect data from CSP grantees within the CMO program through a new online platform. In 2022, ED began development of a new data collection system, the Charter Online Management and Performance System (COMPS), designed specifically to reduce the burden of reporting for users and increase validity of the overall data. This new collection consists of questions responsive to the actions established in the program's final rule published in the
U.S. Election Assistance Commission.
Sunshine Act notice; Notice of public meeting agenda.
Public meeting: U.S. Election Assistance Commission.
Friday, November 17, 2:00 p.m.-3:30 PM Eastern.
The meeting will be virtual and livestreamed on the U.S. Election Assistance Commission's YouTube Channel:
Kristen Muthig, Telephone: (202) 897-9285, Email:
The e-poll book pilot program testing, took place between January and August 2023. The pilot involved two VSTLs, Pro V&V and SLI Compliance, that tested e-poll book devices from five commercial manufacturers, and two in-house developers. These systems were tested against the Voluntary Electronic Poll Book Requirements (Version 0.9) developed by ESTEP in consultation with the National Institute of Standards and Technology (NIST), cybersecurity and accessibility experts, and other key stakeholders.
The full agenda will be posted in advance on the EAC website:
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, to protest, or to answer a complaint in any of the above proceedings must file in accordance with Rules 211, 214, or 206 of the Commission's Regulations (18 CFR 385.211, 385.214, or 385.206) 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:
The Commission's Office of Public Participation (OPP) supports meaningful public engagement and participation in Commission proceedings. OPP can help members of the public, including landowners, environmental justice communities, Tribal members and others, access publicly available information and navigate Commission processes. For public inquiries and assistance with making filings such as interventions, comments, or requests for rehearing, the public is encouraged to contact OPP at (202)502-6595 or
Take notice that the schedule for processing the following hydroelectric application has been modified.
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h.
i.
j.
Any questions regarding this notice may be directed to Michael Tust.
On January 3, 2022, Georgia Power Company filed an application for a new license to continue to operate and maintain the 18-megawatt Lloyd Shoals Hydroelectric Project No. 2336 (Lloyd Shoals Project). On August 8, 2022, Commission staff issued a notice of intent to prepare an Environmental Assessment (EA) to evaluate the effects of relicensing the Lloyd Shoals Project. The notice of intent included a schedule for preparing a single EA.
By this notice, Commission staff is updating the procedural schedule for completing the EA. The revised schedule is shown below. Further revisions to the schedule may be made as appropriate.
Any questions regarding this notice may be directed to Allan Creamer at (202) 502-8365, or by email at
Take notice that the Commission has received the following Natural Gas and Oil Pipeline Rate and Refund Report filings:
Any person desiring to intervene, to protest, or to answer a complaint in any of the above proceedings must file in accordance with Rules 211, 214, or 206 of the Commission's Regulations (18 CFR 385.211, 385.214, or 385.206) 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:
The Commission's Office of Public Participation (OPP) supports meaningful public engagement and participation in Commission proceedings. OPP can help members of the public, including landowners, environmental justice communities, Tribal members and others, access publicly available information and navigate Commission processes. For public inquiries and assistance with making filings such as interventions, comments, or requests for rehearing, the public is encouraged to contact OPP at (202) 502-6595 or
Federal Energy Regulatory Commission.
Notice of revision of information collection and request for comments.
In compliance with the Paperwork Reduction Act, the Federal Energy Regulatory Commission (Commission or FERC) is soliciting public comment on revisions of the information collection FERC-725R (Mandatory Reliability Standards for the Bulk-Power System: BAL Reliability Standards).
Comments on the collection of information are due January 2, 2024.
Comments should be submitted to the Commission, in Docket No. IC24-2-000, by one of the following methods:
Electronic filing through
•
• For those unable to file electronically, comments may be filed by USPS mail or by hand (including courier) delivery:
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Ellen Brown may be reached by email at
On August 8, 2005, Congress enacted into law the Electricity Modernization Act of 2005, which is title XII, subtitle A, of the Energy Policy Act of 2005 (EPAct 2005).
On February 3, 2006, the Commission issued Order No. 672, implementing section 215 of the FPA.
This collection was last revised beginning on December 19, 2019 when NERC submitted for approval the proposed Reliability Standard BAL-003-2.
The requirements for each Reliability Standard go as follows:
Our estimates are based on the NERC Compliance Registry as of September 22, 2023, which indicates that there are for unique US only 98 registered balancing authorities, 8 registered reserve sharing group (RSG) and 1 frequency response sharing group (FRSG).
Estimates for the average annual burden and cost
On Wednesday, November 8, 2023, Commission staff will hold a technical conference to provide clarification to New York Power Authority regarding Commission staff's additional information request (AIR) issued August 7, 2023, for the Vischer Ferry Hydroelectric Project No. 4679.
The conference will be held via teleconference beginning at 1:00 p.m. Eastern Standard Time. Discussion topics for the technical conference include: (1) Engineering analysis of project-related flooding impacts (AIR number 2), and (2) Stability analysis and revised Supporting Design Report (AIR number 3).
All local, state, and federal agencies, Indian tribes, and other interested parties are invited to participate. There will be no transcript of the conference, but a summary of the meeting will be prepared for the project record. If you are interested in participating in the meeting you must contact Jody Callihan at (202) 502-8278 or
On October 23, 2023, the City of Homer, Alaska, filed a notice of intent to construct a qualifying conduit hydropower facility, pursuant to section 30 of the Federal Power Act (FPA). The proposed Homer Hydroelectric Energy Recovery Project would have an installed capacity of 10 kilowatts (kW), and would be located within the applicant's municipal water supply system in Homer, Kenai Peninsula Borough, Alaska.
A qualifying conduit hydropower facility is one that is determined or deemed to meet all the criteria shown in the table below.
Anyone may submit comments or a motion to intervene in accordance with the requirements of Rules of Practice and Procedure, 18 CFR 385.210 and 385.214. Any motions to intervene must be received on or before the specified deadline date for the particular proceeding.
The Commission strongly encourages electronic filing. Please file motions to intervene and comments using the Commission's eFiling system at
The Commission's Office of Public Participation (OPP) supports meaningful public engagement and participation in Commission proceedings. OPP can help members of the public, including landowners, environmental justice communities, Tribal members and others, access publicly available information and navigate Commission processes. For public inquiries and assistance with making filings such as interventions, comments, or requests for rehearing, the public is encouraged to contact OPP at (202) 502-6595 or
Environmental Protection Agency (EPA).
Notice; extension of comment period.
In the
The comment period for the document published on September 26, 2023, at 88 FR 65998 (FRL-11370-01-OCSPP), is extended. Comments must be received on or before December 13, 2023.
Submit your comments, identified by docket identification (ID) number EPA-HQ-OPP-2023-0445, through the Federal eRulemaking Portal at
Susan Jennings, Immediate Office (7501M), Office of Pesticide Programs, Environmental Protection Agency, 1201 Constitution Ave. NW, Washington, DC 20004; telephone number: (706) 355-8574; email address:
To give stakeholders additional time to review materials and prepare comments, EPA is hereby extending the comment period established in the
To submit comments or access the docket, please follow the detailed instructions provided under
Federal Accounting Standards Advisory Board.
Notice.
Notice is hereby given that the Appointments Panel, a subcommittee of the Federal Accounting Standards Advisory Board (FASAB), will hold a meeting on November 15, 2023. The Appointments Panel makes recommendations regarding appointments for non-federal member positions.
Ms. Monica R. Valentine, Executive Director, 441 G Street NW, Suite 1155, Washington, DC 20548, or call (202) 512-7350.
The meeting is closed to the public. The reason for the closure is that matters covered by 5 U.S.C. 552b(c)(2) and (6) will be discussed. Any such discussions will involve matters that relate solely to internal personnel rules and practices of the sponsor agencies and the disclosure of information of a personal nature where disclosure would constitute a clearly unwarranted invasion of personal privacy.
Pursuant to section 10(d) of the Federal Advisory Committee Act (FACA), 5 U.S.C. 1009(d), portions of advisory committee meetings may be closed to the public where the head of the agency to which the advisory committee reports determines that such portion of such meeting may be closed to the public in accordance with subsection (c) of section 552b of title 5, United States Code. The determination shall be in writing and shall contain the reasons for the determination. A determination has been made in writing by the U.S. Government Accountability Office, the U.S. Department of the Treasury, and the Office of Management and Budget, as required by section 10(d) of FACA, that such portions of the meetings may be closed to the public in accordance with subsection (c) of section 552b of title 5, United States Code.
Federal Maritime Commission.
Notice of Federal advisory committee meeting.
Notice is hereby given of a meeting of the National Shipper Advisory Commission (NSAC), pursuant to the Federal Advisory Committee Act.
The Committee will meet in-person in Washington, DC, on November 16, 2023, from 1 p.m. until 4 p.m. eastern time. Please note that this meeting may adjourn early if the Committee has completed its business.
The meeting will be held at the Federal Maritime Commission headquarters located at 800 North Capitol St. NW, Washington, DC 20573. Requests to register should be submitted to
Mr. Dylan Richmond, Designated Federal Officer of the National Shipper Advisory Committee, phone: (202) 523-5810; email:
The Committee will receive an update from each of its subcommittees. The Committee may receive proposals for recommendations to the Federal Maritime Commission and may vote on these recommendations. Any proposed recommendations will be available for the public to view in advance of the meeting on the NSAC's website,
The Committee will also take public comment at its meeting. If attending the meeting in person and providing comments, please note that in the registration request. Comments are most helpful if they address the Committee's objectives or their proposed recommendations. Comments at the meeting will be limited to 3 minutes each.
A copy of all meeting documentation, including meeting minutes, will be available at
By the Commission.
The notificants listed below have applied under the Change in Bank Control Act (Act) (12 U.S.C. 1817(j)) and § 225.41 of the Board's Regulation Y (12 CFR 225.41) to acquire shares of a bank or bank holding company. The factors that are considered in acting on the applications are set forth in paragraph 7 of the Act (12 U.S.C. 1817(j)(7)).
The public portions of the applications listed below, as well as other related filings required by the Board, if any, are available for immediate inspection at the Federal Reserve Bank(s) indicated below and at the offices of the Board of Governors. This information may also be obtained on an expedited basis, upon request, by contacting the appropriate Federal Reserve Bank and from the Board's Freedom of Information Office at
Comments regarding each of these applications must be received at the Reserve Bank indicated or the offices of the Board of Governors, Ann E. Misback, Secretary of the Board, 20th Street and Constitution Avenue NW, Washington DC 20551-0001, not later than November 16, 2023.
1. A
Board of Governors of the Federal Reserve System.
Agency for Healthcare Research and Quality (AHRQ), HHS.
Request for supplemental evidence and data submission.
The Agency for Healthcare Research and Quality (AHRQ) is seeking scientific information submissions from the public. Scientific information is being solicited to inform our review on
Kelly Carper, Telephone: 301-427-1656 or Email:
The Agency for Healthcare Research and Quality has commissioned the Evidence-based Practice Centers (EPC) Program to complete a review of the evidence for
The EPC Program is dedicated to identifying as many studies as possible that are relevant to the questions for each of its reviews. In order to do so, we are supplementing the usual manual and electronic database searches of the literature by requesting information from the public (
This is to notify the public that the EPC Program would find the following information on
A list of completed studies that your organization has sponsored for this topic. In the list, please
Description of whether the above studies constitute
Your contribution is very beneficial to the Program. Materials submitted must be publicly available or able to be made public. Materials that are considered confidential; marketing materials; study types not included in the review; or information on topics not included in the review cannot be used by the EPC Program. This is a voluntary request for information, and all costs for complying with this request must be borne by the submitter.
The draft of this review will be posted on AHRQ's EPC Program website and available for public comment for a period of 4 weeks. If you would like to be notified when the draft is posted, please sign up for the email list at:
The review will answer the following questions. This information is provided as background. AHRQ is not requesting that the public provide answers to these questions.
a. How do these barriers/facilitators vary according to preventive service?
b. How do these barriers/facilitators vary according to type and/or severity of disability?
c. How do these barriers/facilitators vary according to characteristics such as: gender, race/ethnicity, economic status, LGBTQ+ status, or geographic location?
a. How does the effectiveness vary according to preventive service?
b. How does the effectiveness vary according to type and/or severity of disability?
c. How does the effectiveness vary according to characteristics such as: gender, race/ethnicity, economic status, LGBTQ+ status, or geographic location?
a. How does the effectiveness vary according to preventive service?
b. How does the effectiveness vary according to type and/or severity of disability?
c. How does the effectiveness vary according to characteristics such as: gender, race/ethnicity, economic status, LGBTQ+ status, or geographic location?
a. How do the harms vary according to preventive service?
b. How do the harms vary according to type and/or severity of disability?
c. How do the harms vary according to characteristics such as: gender, race/ethnicity, economic status, LGBTQ+ status, or geographic location?
• Environment-level (
• Person-level (
• Provider-level (
• Health system (
• Accessibility of health facilities (
• Accessible communication (
• Policy-level (
Centers for Medicare & Medicaid Services (CMS), Department of Health and Human Services (HHS).
Notice of a new matching program.
In accordance with the Privacy Act of 1974, as amended, the Department of Health and Human Services (HHS), Centers for Medicare & Medicaid Services (CMS) is providing notice of the re-establishment of a computer matching program between CMS and the Department of Defense, Defense Manpower Data Center for “Verification of Eligibility for Minimum Essential Coverage Under the Patient Protection and Affordable Care Act through a Department of Defense Health Benefits Plan.”
The deadline for comments on this notice is December 1, 2023. The re-established matching program will commence not sooner than 30 days after publication of this notice, provided no comments are received that warrant a change to this notice. The matching program will be conducted for an initial term of 18 months (from approximately November 30, 2023 to May 29, 2025) and within 3 months of expiration may be renewed for up to one additional year if the parties make no change to the matching program and certify that the program has been conducted in compliance with the matching agreement.
Interested parties may submit comments on this notice to the CMS Privacy Act Officer by mail at: Division of Security, Privacy Policy & Governance, Information Security & Privacy Group, Office of Information Technology, Centers for Medicare & Medicaid Services, Location: N1-14-56, 7500 Security Blvd., Baltimore, MD 21244-1850 or by email at
If you have questions about the matching program, you may contact Anne Pesto, Senior Advisor, Marketplace Eligibility and Enrollment Group, Center for Consumer Information and Insurance Oversight, Centers for Medicare & Medicaid Services, at 443-955-9966, by email at
The Privacy Act of 1974, as amended (5 U.S.C. 552a) provides certain protections for individuals applying for and receiving Federal benefits. The law governs the use of computer matching by Federal agencies when records in a system of records (meaning, Federal agency records about individuals
1. Enter into a written agreement, which must be prepared in accordance with the Privacy Act, approved by the Data Integrity Board of each source and recipient Federal agency, provided to Congress and the Office of Management and Budget (OMB), and made available to the public, as required by 5 U.S.C. 552a(o), (u)(3)(A), and (u)(4).
2. Notify the individuals whose information will be used in the matching program that the information they provide is subject to verification through matching, as required by 5 U.S.C. 552a(o)(1)(D).
3. Verify match findings before suspending, terminating, reducing, or making a final denial of an individual's benefits or payments or taking other adverse action against the individual, as required by 5 U.S.C. 552a(p).
4. Report the matching program to Congress and the OMB, in advance and annually, as required by 5 U.S.C. 552a(o) (2)(A)(i), (r), and (u)(3)(D).
5. Publish advance notice of the matching program in the
This matching program meets these requirements.
The Department of Health and Human Services (HHS), Centers for Medicare & Medicaid Services (CMS) is the recipient agency, and the Department of Defense (DoD), Defense Manpower Data Center (DMDC) is the source agency.
The principal authority for conducting the matching program is 42 U.S.C. 18001,
The purpose of the matching program is to provide CMS with DoD data verifying individuals' eligibility for coverage under a DoD Health Benefit Plan (
The categories of individuals whose information is involved in the matching program are: (1) active duty service members and their family members and (2) retirees and their family members whose TRICARE eligibility records at DoD match data provided to DoD by CMS (submitted by AEs) about individual consumers who are applying for or are enrolled in private health insurance coverage under a qualified health plan through a federally-facilitated or state-based health insurance exchange.
The categories of records used in the matching program are identity records and minimum essential coverage (MEC) period records. To request information from DoD, CMS will submit a request to DoD that may contain, but is not limited to, the following specified data elements in a fixed record format: Social Security Number (SSN), first name, middle name, surname (last name), date of birth, gender, and requested Qualified Health Plan (QHP) coverage effective date and end date. When DoD is able to match the SSN and name provided by CMS and information is available, DoD will provide CMS with the following about each individual, as relevant: SSN, response code indicating enrollment in MEC under a TRICARE plan, and, as applicable, begin date(s) and end date(s) of enrollment in MEC under a TRICARE plan.
The records used in the matching program are disclosed from these systems of records, as authorized by routine uses published in the System of Records Notices (SORNs) cited below:
CMS Health Insurance Exchanges System (HIX), CMS System No. 09-70-0560, last published in full at 78 FR 63211 (Oct. 23, 2013), and amended at 83 FR 6591 (Feb. 14, 2018). Routine use 3 authorizes CMS' disclosures of identifying information about applicants to DoD for use in this matching program.
The DoD system of records and routine use that support this matching program are Routine Use h in DMDC 02 DoD, Defense Enrollment Eligibility Reporting Systems (DEERS), last published at 87 FR 32384 (May 31, 2022). Routine use H supports DoD's disclosures to CMS.
Food and Drug Administration, HHS.
Notice.
The Food and Drug Administration (FDA or the Agency) is issuing an order under the Federal Food, Drug, and Cosmetic Act (FD&C Act) granting special termination of the debarment of David Winne with an effective date of August 18, 2024. FDA bases this order on a finding that Mr. Winne provided substantial assistance in the investigations or prosecutions of offenses relating to a matter under FDA's jurisdiction, and that special termination of Mr. Winne's debarment serves the interest of justice and does not threaten the integrity of the drug approval process.
This order is effective November 1, 2023.
Submit comments electronically at
Jaime Espinosa, Division of Compliance
In a
Under section 306(d)(4)(C) of the FD&C Act, FDA may limit the period of debarment of a permanently debarred individual if the Agency finds that the debarred individual has provided substantial assistance in the investigation or prosecution of offenses described in section 306(a) or (b) of the FD&C Act or relating to a matter under FDA's jurisdiction. In addition, pursuant to section 306(d)(4)(D)(ii) of the FD&C Act, in cases of an individual FDA may limit the period of debarment to less than permanent but to no less than 1 year, whichever serves the interest of justice and protects the integrity of the drug approval process.
Special termination of debarment is discretionary with FDA. FDA generally considers a determination by the Department of Justice concerning the substantial assistance of a debarred individual conclusive in most cases. Mr. Winne cooperated with the United States Attorney's Office in the investigation of several individuals, as substantiated by a letter submitted by the United States Attorney's Office for the Southern District of New York to the sentencing judge in Mr. Winne's case and which was submitted to the Agency by Mr. Winne. His cooperation contributed to the successful prosecution of these individuals. Accordingly, FDA finds that Mr. Winne provided substantial assistance as required by section 306(d)(4)(C) of the FD&C Act.
The additional requisite showings,
The evidence FDA reviewed in support of termination shows that Mr. Winne was convicted for a first offense; that he has no prior or subsequent convictions for conduct described under the FD&C Act and has committed no other wrongful acts affecting the drug approval process. The evidence presented supports the conclusion that the conduct upon which Mr. Winne's debarment was based is unlikely to recur. For these reasons, the Agency finds that termination of Mr. Winne's debarment serves the interest of justice and will not pose a threat to the integrity of the drug approval process.
Under section 306(d)(4)(D) of the FD&C Act, the period of debarment of an individual who qualifies for special termination may be limited to less than permanent but to no less than 1 year. Mr. Winne's period of debarment, which commenced on August 18, 2023, has not lasted for at least 1 year. As such, his period of debarment cannot terminate until August 17, 2024. Accordingly, the Assistant Commissioner, Office of Human and Animal Food Operations, under section 306(d)(4) of the FD&C Act and under authority delegated to the Assistant Commissioner, finds that David Winne's application for special termination of debarment should be granted, and that the period of debarment should terminate on August 18, 2024, thereby allowing him to provide services in any capacity to a person with an approved or pending drug product application after that date. As a result of the foregoing findings, David Winne's debarment is terminated effective August 17, 2024.
Food and Drug Administration, HHS.
Notice.
The Food and Drug Administration (FDA or the Agency) is requesting that any industry organizations interested in participating in the selection of nonvoting industry representatives to serve on certain panels of the Medical Devices Advisory Committee (MDAC or the Committee) in the Center for Devices and Radiological Health (CDRH) notify FDA in writing. FDA is also requesting nominations for nonvoting industry representatives to serve on certain device panels of the MDAC in the CDRH. A nominee may either be self-nominated or nominated by an organization to serve as a nonvoting industry representative. Nominations will be accepted for current and upcoming vacancies effective with this notice.
Any industry organization interested in participating in the selection of an appropriate nonvoting member to represent industry interests must send a letter stating that interest to the FDA by December 1, 2023 (see sections I and II of this document for further details). Concurrently, nomination materials for prospective candidates should be sent to FDA by December 1, 2023.
All statements of interest from industry organizations interested in participating in the selection process of nonvoting industry representative nomination should be sent to Margaret Ames (see
Margaret Ames, Center for Devices and Radiological Health, Food and Drug Administration, 10903 New Hampshire Ave., Bldg. 66, Rm. 5213, Silver Spring, MD 20993, 301-796-5960, email:
The Agency is requesting nominations for nonvoting industry representatives to the panels listed in table 1.
The Committee reviews and evaluates data on the safety and effectiveness of marketed and investigational devices and makes recommendations for their regulation. The panels of the Medical Devices Advisory Committee engage in a number of activities to fulfill the functions the Federal Food, Drug, and Cosmetic Act (FD&C Act) envisions for device advisory panels. With the exception of the Medical Devices Dispute Resolution Panel, each panel, according to its specialty area, advises the Commissioner of Food and Drugs (the Commissioner) regarding recommended classification or reclassification of devices into one of three regulatory categories; advises on any possible risks to health associated with the use of devices; advises on formulation of product development protocols; reviews premarket approval applications for medical devices; reviews guidelines and guidance documents; recommends exemption of certain devices from the application of portions of the FD&C Act; advises on the necessity to ban a device; and responds to requests from the Agency to review and make recommendations on specific issues or problems concerning the safety and effectiveness of devices. With the exception of the Medical Devices Dispute Resolution Panel, each panel, according to its specialty area, may also make appropriate recommendations to the Commissioner on issues relating to the design of clinical studies regarding the safety and effectiveness of marketed and investigational devices. The Committee also provides recommendations to the Commissioner or designee on complexity categorization of in vitro diagnostics under the Clinical Laboratory Improvement Amendments of 1988.
Persons nominated for the device panels should be full-time employees of firms that manufacture products that would come before the panel, or consulting firms that represent manufacturers, or have similar appropriate ties to industry.
Any industry organization interested in participating in the selection of an appropriate nonvoting member to represent industry interests should send a letter stating that interest to the FDA contact (see
Individuals may self-nominate and/or an organization may nominate one or more individuals to serve as a nonvoting industry representative. Nomination must include a current, complete résumé or curriculum vitae for each nominee including current business address and telephone number, email address if available, and a signed copy of the Acknowledgement and Consent form available at the FDA Advisory Committee Membership Nomination Portal (see
FDA seeks to include the views of women and men, members of all racial and ethnic groups, and individuals with and without disabilities on its advisory committees, and therefore encourages nominations of appropriately qualified candidates from these groups.
This notice is issued under the Federal Advisory Committee Act (5
Food and Drug Administration, HHS.
Notice.
The Food and Drug Administration (FDA or Agency) has determined that the drug products listed in this document were not withdrawn from sale for reasons of safety or effectiveness. This determination means that FDA will not begin procedures to withdraw approval of abbreviated new drug applications (ANDAs) that refer to these drug products, and it will allow FDA to continue to approve ANDAs that refer to the products as long as they meet relevant legal and regulatory requirements.
Stacy Kane, Center for Drug Evaluation and Research, Food and Drug Administration, 10903 New Hampshire Ave., Bldg. 51, Rm. 6236, Silver Spring, MD 20993-0002, 301-796-8363,
Section 505(j) of the Federal Food, Drug, and Cosmetic Act (FD&C Act) (21 U.S.C. 355(j)) allows the submission of an ANDA to market a generic version of a previously approved drug product. To obtain approval, the ANDA applicant must show, among other things, that the generic drug product: (1) has the same active ingredient(s), dosage form, route of administration, strength, conditions of use, and (with certain exceptions) labeling as the listed drug, which is a version of the drug that was previously approved and (2) is bioequivalent to the listed drug. ANDA applicants do not have to repeat the extensive clinical testing otherwise necessary to gain approval of a new drug application (NDA).
Section 505(j)(7) of the FD&C Act requires FDA to publish a list of all approved drugs. FDA publishes this list as part of the “Approved Drug Products With Therapeutic Equivalence Evaluations,” which is generally known as the “Orange Book.” Under FDA regulations, a drug is removed from the list if the Agency withdraws or suspends approval of the drug's NDA or ANDA for reasons of safety or effectiveness or if FDA determines that the listed drug was withdrawn from sale for reasons of safety or effectiveness (21 CFR 314.162).
Under § 314.161(a) (21 CFR 314.161(a)), the Agency must determine whether a listed drug was withdrawn from sale for reasons of safety or effectiveness: (1) before an ANDA that refers to that listed drug may be approved, (2) whenever a listed drug is voluntarily withdrawn from sale and ANDAs that refer to the listed drug have been approved, and (3) when a person petitions for such a determination under 21 CFR 10.25(a) and 10.30. Section 314.161(d) provides that if FDA determines that a listed drug was withdrawn from sale for safety or effectiveness reasons, the Agency will initiate proceedings that could result in the withdrawal of approval of the ANDAs that refer to the listed drug.
FDA has become aware that the drug products listed in the table are no longer being marketed.
FDA has reviewed its records and, under § 314.161, has determined that the drug products listed were not withdrawn from sale for reasons of safety or effectiveness. Accordingly, the Agency will continue to list the drug products in the “Discontinued Drug Product List” section of the Orange Book. The “Discontinued Drug Product
Approved ANDAs that refer to the drug products listed are unaffected by the discontinued marketing of the products subject to these applications. Additional ANDAs that refer to these products may also be approved by the Agency if they comply with relevant legal and regulatory requirements. If FDA determines that labeling for these drug products should be revised to meet current standards, the Agency will advise ANDA applicants to submit such labeling.
Food and Drug Administration, HHS.
Notice.
The Food and Drug Administration (FDA or the Agency) has determined the regulatory review period for Omegaven and is publishing this notice of that determination as required by law. FDA has made the determination because of the submission of an application to the Director of the U.S. Patent and Trademark Office (USPTO), Department of Commerce, for the extension of a patent which claims that human drug product.
Anyone with knowledge that any of the dates as published (see
You may submit comments as follows. Please note that late, untimely filed comments will not be considered. Electronic comments must be submitted on or before January 2, 2024. The
Submit electronic comments in the following way:
•
• If you want to submit a comment with confidential information that you do not wish to be made available to the public, submit the comment as a written/paper submission and in the manner detailed (see “Written/Paper Submissions” and “Instructions”).
Submit written/paper submissions as follows:
•
• For written/paper comments submitted to the 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
Beverly Friedman, Office of Regulatory Policy, Food and Drug Administration, 10903 New Hampshire Ave., Bldg. 51, Rm. 6250, Silver Spring, MD 20993, 301-796-3600.
The Drug Price Competition and Patent Term Restoration Act of 1984 (Pub. L. 98-417) and the Generic Animal Drug and Patent Term Restoration Act (Pub. L. 100-670) generally provide that a patent may be extended for a period of up to 5 years so long as the patented item (human
A regulatory review period consists of two periods of time: a testing phase and an approval phase. For human drug products, the testing phase begins when the exemption to permit the clinical investigations of the drug becomes effective and runs until the approval phase begins. The approval phase starts with the initial submission of an application to market the human drug product and continues until FDA grants permission to market the drug product. Although only a portion of a regulatory review period may count toward the actual amount of extension that the Director of USPTO may award (for example, half the testing phase must be subtracted as well as any time that may have occurred before the patent was issued), FDA's determination of the length of a regulatory review period for a human drug product will include all of the testing phase and approval phase as specified in 35 U.S.C. 156(g)(1)(B).
FDA has approved for marketing the human drug product, Omegaven (fish oil triglycerides) indicated as a source of calories and fatty acids in pediatric patients with parenteral nutrition-associated cholestasis. Subsequent to this approval, the USPTO received a patent term restoration application for Omegaven (U.S. Patent No. 9,566,260) from Children's Medical Center Corporation and the USPTO requested FDA's assistance in determining the patent's eligibility for patent term restoration. In a letter dated November 29, 2019, FDA advised the USPTO that this human drug product had undergone a regulatory review period and that the approval of Omegaven represented the first permitted commercial marketing or use of the product. Thereafter, the USPTO requested that FDA determine the product's regulatory review period.
FDA has determined that the applicable regulatory review period for Omegaven is 4,246 days. Of this time, 4,007 days occurred during the testing phase of the regulatory review period, while 239 days occurred during the approval phase. These periods of time were derived from the following dates:
1.
2.
3.
This determination of the regulatory review period establishes the maximum potential length of a patent extension. However, the USPTO applies several statutory limitations in its calculations of the actual period for patent extension. In its application for patent extension, this applicant seeks 383 days of patent term extension.
Anyone with knowledge that any of the dates as published are incorrect may submit either electronic or written comments and, under 21 CFR 60.24, ask for a redetermination (see
Submit petitions electronically to
Health Resources and Services Administration (HRSA), Department of Health and Human Services.
Notice; correction.
HRSA published a notice in the
Vanessa Lee, MPH, Designated Federal Official, Maternal and Child Health Bureau, HRSA, 5600 Fishers Lane, Room 18N84, Rockville, Maryland, 20857; 301-443-0543; or
In the
Pursuant to section 1009 of the Federal Advisory Committee Act, as
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.
This notice is being published less than 15 days prior to the meeting due to the timing limitations imposed by the review and funding cycle.
Pursuant to section 1009 of the Federal Advisory Committee Act, as amended, notice is hereby given of the following meetings.
The meetings will be closed to the public in accordance with the provisions set forth in sections 552b(c)(4) and 552b(c)(6), title 5 U.S.C., as amended. The grant applications and the discussions could disclose confidential trade secrets or commercial property such as patentable material, and personal information concerning individuals associated with the grant applications, the disclosure of which would constitute a clearly unwarranted invasion of personal privacy.
Pursuant to section 1009 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.
Pursuant to section 1009 of the Federal Advisory Committee Act, as
The meetings will be closed to the public in accordance with the provisions set forth in sections 552b(c)(4) and 552b(c)(6), title 5 U.S.C., as amended. The grant applications and the discussions could disclose confidential trade secrets or commercial property such as patentable material, and personal information concerning individuals associated with the grant applications, the disclosure of which would constitute a clearly unwarranted invasion of personal privacy.
Pursuant to section 1009 of the Federal Advisory Committee Act, as amended, notice is hereby given of a meeting of the National Advisory Council on Aging.
The meeting will be open to the public as indicated below, with attendance limited to space available. Individuals who plan to attend and need special assistance, such as sign language interpretation or other reasonable accommodations, should notify the Contact Person listed below in advance of the 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.
Information is also available on the Institute's/Center's home page:
Pursuant to section 10(d) of the Federal Advisory Committee Act, as amended, notice is hereby given of meetings of the National Advisory Allergy and Infectious Diseases Council.
A portion of the meetings will be open to the public. The open session will be videocast and can be accessed from the NIH Videocasting and Podcasting website (
The portion of the meetings will be closed to the public in accordance with the provisions set forth in sections 552b(c)(4) and 552b(c)(6), title 5 U.S.C., as amended. The grant applications and the discussions could disclose confidential trade secrets or commercial property such as patentable material, and personal information concerning individuals associated with the grant applications, the disclosure of which would constitute a clearly unwarranted invasion of personal privacy.
Any interested person may file written comments with the committee by forwarding the statement to the Contact Person listed on this notice at least 10 days in advance of the meeting. The statement should include the name, address, telephone number and when applicable, the business or professional affiliation of the interested person.
Information is also available on the Institute's/Center's home page:
National Institutes of Health, HHS.
Notice.
In compliance with the requirement of the Paperwork Reduction Act of 1995 to provide an opportunity for public comment on proposed data collection projects, the National Institutes of Health (NIH) Office of Intramural Training & Education (OITE) will publish periodic summaries of proposed projects to be submitted to the Office of Management and Budget (OMB) for review and approval.
Comments regarding this information collection are best assured of having their full effect if received within 60 days of the date of this publication.
To obtain a copy of the data collection plans and instruments, submit comments in writing, or request more information on the proposed project, contact: Dr. Patricia Wagner, Program Analyst, Office of Intramural Training & Education (OITE), Office of Intramural Research (OIR), Office of the Director (OD), National Institutes of Health (NIH); 2 Center Drive: Building 2/Room 2E06; Bethesda, Maryland 20892 or call non-toll-free number 240-476-3619 or email your request, including your address to:
Section 3506(c)(2)(A) of the Paperwork Reduction Act of 1995 requires: written comments and/or suggestions from the public and affected agencies are invited to address one or more of the following points: (1) Whether the proposed collection of information is necessary for the proper performance of the function 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.
The OITE collection system has been updated to use universal collection form templates with features that may be activated based on collection needs: number of recommendation letters, exceptional financial need statement, NIH campus location, etc. The collection system does allow for templates to have program specific labeling and directions to make sure the collection form is tailored to each training program, including but not limited to the following: Summer Internship Program, Postbaccalaureate Program, Graduate Partnerships
The applications for admission consideration solicit information including: personal information, ability to meet eligibility criteria, contact information, university-assigned student identification number, training program selection, scientific discipline interests, educational history, standardized examination scores, reference information, resume components, employment history, employment interests, dissertation research details, letters of recommendation, financial aid history, sensitive data, and travel information, as well as feedback questions about interviews and application submission experiences. Sensitive data collected on the applicants: race, gender, ethnicity, relatives at NIH, and recruitment method, are made available only to OITE staff members or in aggregate form to select NIH offices and are not used by the admission committees for admission consideration. In addition, information to monitor trainee placement after departure from NIH is periodically collected.
OMB approval is requested for 3 years. There are no costs to respondents other than their time. The total estimated annualized burden hours are 12,824.
Pursuant to section 1009 of the Federal Advisory Committee Act, as amended, notice is hereby given of the following meeting.
The meeting will be open to the public as indicated below, with attendance limited to space available. Individuals who plan to attend and need special assistance, such as sign language interpretation or other reasonable accommodations, should notify the Contact Person listed below in advance of the 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.
Information is also available on the Institute's/Center's home page:
Notice is hereby given of a change in the meeting of the National Institute of Neurological Disorders and Stroke Special Emphasis Panel, October 31, 2023, 11:00 a.m. to November 03, 2023, 05:00 p.m., National Institutes of Health, Neuroscience Center, 6001 Executive Boulevard, Rockville, MD 20852 which was published in the
This notice is being amended to change the dates and time of this two-day meeting to November 3, 2023, and November 17, 2023; The start time has changed to 10:00 a.m., and the end time remains the same. The meeting is closed to the public.
Pursuant to section 1009 of the Federal Advisory Committee Act, as amended, notice is hereby given of the following meetings.
The meetings will be closed to the public in accordance with the provisions set forth in sections 552b(c)(4) and 552b(c)(6), title 5 U.S.C., as amended. The grant applications and the discussions could disclose confidential trade secrets or commercial property such as patentable material, and personal information concerning individuals associated with the grant applications, the disclosure of which would constitute a clearly unwarranted invasion of personal privacy.
Pursuant to section 1009 of the Federal Advisory Committee Act, as amended, notice is hereby given of a meeting of the AIDS Research Advisory Committee, NIAID.
The meeting will be open to the public. The open session will be videocast and can be accessed from the NIH Videocasting and Podcasting website (
Any interested person may file written comments with the committee by forwarding the statement to the Contact Person listed on this notice at least 10 days in advance of the meeting. The statement should include the name, address, telephone number and when applicable, the business or professional affiliation of the interested person.
Information is also available on the Institute's/Center's home page:
Pursuant to section 1009 of the Federal Advisory Committee Act, as amended, notice is hereby given of the following meetings.
The meetings will be closed to the public in accordance with the provisions set forth in sections 552b(c)(4) and 552b(c)(6), title 5 U.S.C., as amended. The grant applications and the discussions could disclose confidential trade secrets or commercial property such as patentable material, and personal information concerning individuals associated with the grant
This notice is being published less than 15 days prior to the meeting due to the timing limitations imposed by the review and funding cycle.
Substance Abuse and Mental Health Services Administration, Department of Health and Human Services (HHS).
Notice of intent to award supplemental funding.
This notice is to inform the public that the Substance Abuse and Mental Health Services Administration (SAMHSA) is supporting a supplement in scope of the original award to the Community-Based, Advocacy-Focused, Data-Driven, Coalition-Building Association (CADCA) recipient funded in FY 2019 under the National Anti-Drug Coalitions Training and Workforce Development Grant Program (Short Title: Coalitions Training Grant), Notice of Funding Opportunity (NOFO) SP-19-002. The recipient may receive up to $562,500. The supplemental funding will extend the project period by 10-months until September 29, 2024 and will: leverage existing resources and conference support to expand SAMHSA's scope and capacity; and provide training and technical assistance to state and community prevention leaders, including members of anti-drug community coalitions from around the country who are committed to addressing the evolving needs of the behavioral health field. The training and workforce development activities supported through this grant include SAMHSA's Prevention Day and SAMHSA's participation in the annual National Leadership Forum and annual Mid-Year Training Institute of CADCA.
David Lamont Wilson, Public Health Analyst, Substance Abuse and Mental Health Services Administration, 5600 Fishers Lane, Rockville, MD 20857, telephone 240-276-2588; email:
This is not a formal request for application. Assistance will only be provided to Coalitions Training Grant (CADCA) funded in FY 2019 based on the receipt of a satisfactory application and associated budget that is approved by a review group.
Substance Abuse and Mental Health Services Administration, HHS.
Notice.
The Department of Health and Human Services (HHS) notifies Federal agencies of the laboratories and Instrumented Initial Testing Facilities (IITFs) currently certified to meet the standards of the Mandatory Guidelines for Federal Workplace Drug Testing Programs using Urine or Oral Fluid (Mandatory Guidelines).
Anastasia Flanagan, Division of Workplace Programs, SAMHSA/CSAP, 5600 Fishers Lane, Room 16N06B, Rockville, Maryland 20857; 240-276-2600 (voice);
In accordance with Section 9.19 of the Mandatory Guidelines, a notice listing all currently HHS-certified laboratories and IITFs is published in the
If any laboratory or IITF has withdrawn from the HHS National Laboratory Certification Program (NLCP) during the past month, it will be listed at the end and will be omitted from the monthly listing thereafter.
This notice is also available on the internet at
The Department of Health and Human Services (HHS) notifies federal agencies of the laboratories and Instrumented Initial Testing Facilities (IITFs) currently certified to meet the standards of the Mandatory Guidelines for Federal Workplace Drug Testing Programs (Mandatory Guidelines) using Urine and of the laboratories currently certified to meet the standards of the Mandatory Guidelines using Oral Fluid.
The Mandatory Guidelines using Urine were first published in the
The Mandatory Guidelines using Oral Fluid were first published in the
The Mandatory Guidelines were initially developed in accordance with Executive Order 12564 and section 503 of Public Law 100-71 and allowed urine drug testing only. The Mandatory Guidelines using Urine have since been revised, and new Mandatory Guidelines allowing for oral fluid drug testing have been published. The Mandatory Guidelines require strict standards that laboratories and IITFs must meet in order to conduct drug and specimen validity tests on specimens for federal agencies. HHS does not allow IITFs to conduct oral fluid testing.
To become certified, an applicant laboratory or IITF must undergo three rounds of performance testing plus an on-site inspection. To maintain that certification, a laboratory or IITF must participate in a quarterly performance testing program plus undergo periodic, on-site inspections.
Laboratories and IITFs in the applicant stage of certification are not to be considered as meeting the minimum requirements described in the HHS Mandatory Guidelines using Urine and/or Oral Fluid. An HHS-certified laboratory or IITF must have its letter of certification from HHS/SAMHSA (formerly: HHS/NIDA), which attests that the test facility has met minimum standards. HHS does not allow IITFs to conduct oral fluid testing.
In accordance with the Mandatory Guidelines using Oral Fluid dated October 25, 2019 (84 FR 57554), the following HHS-certified laboratories meet the minimum standards to conduct drug and specimen validity tests on oral fluid specimens: At this time, there are no laboratories certified to conduct drug and specimen validity tests on oral fluid specimens.
In accordance with the Mandatory Guidelines using Urine dated January 23, 2017 (82 FR 7920), the following HHS-certified IITFs meet the minimum standards to conduct drug and specimen validity tests on urine specimens:
In accordance with the Mandatory Guidelines using Urine dated January 23, 2017 (82 FR 7920), the following HHS-certified laboratories meet the minimum standards to conduct drug and specimen validity tests on urine specimens:
* The Standards Council of Canada (SCC) voted to end its Laboratory Accreditation Program for Substance Abuse (LAPSA) effective May 12, 1998. Laboratories certified through that program were accredited to conduct forensic urine drug testing as required by U.S. Department of Transportation (DOT) regulations. As of that date, the certification of those accredited Canadian laboratories will continue under DOT authority. The responsibility for conducting quarterly performance testing plus periodic on-site inspections of those LAPSA-accredited laboratories was transferred to the U.S. HHS, with the HHS' NLCP contractor continuing to have an active role in the performance testing and laboratory inspection processes. Other Canadian laboratories wishing to be considered for the NLCP may apply directly to the NLCP contractor just as U.S. laboratories do.
Upon finding a Canadian laboratory to be qualified, HHS will recommend that DOT certify the laboratory (
Office of the Assistant Secretary for Housing—Federal Housing Commissioner, HUD.
Notice.
HUD is seeking approval from the Office of Management and Budget (OMB) for the information collection described below. In accordance with the Paperwork Reduction Act, HUD is requesting comment from all interested parties on the proposed collection of information. The purpose of this notice is to allow for an additional 30 days of public comment.
Interested persons are invited to submit comments regarding this proposal. Written comments and recommendations for the proposed information collection should be sent within 30 days of publication of this notice to
Colette Pollard, Reports Management Officer, REE, Department of Housing and Urban Development, 451 7th Street SW, Washington, DC 20410; email
Copies of available documents submitted to OMB may be obtained from Ms. Pollard.
This notice informs the public that HUD is seeking approval from OMB for the information collection described in Section A.
The
This notice is soliciting comments from members of the public and affected parties concerning the collection of information described in Section A on the following:
(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;
(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 through the use of appropriate automated collection techniques or other forms of information technology,
(5) ways to minimize the burden of the collection of information on those who are to respond, including the use of automated collection techniques or other forms of information technology.
HUD encourages interested parties to submit comments in response to these questions.
Section 3507 of the Paperwork Reduction Act of 1995, 44 U.S.C. chapter 35.
Office of Policy Development and Research, Chief Data Officer, HUD.
Notice.
HUD is seeking approval from the Office of Management and Budget (OMB) for the information collection described below. In accordance with the Paperwork Reduction Act, HUD is requesting comment from all interested parties on the proposed collection of information. The purpose of this notice is to allow for an additional 30 days of public comment.
Interested persons are invited to submit comments regarding this proposal. Written comments and recommendations for the proposed information collection should be sent within 30 days of publication of this notice to
Colette Pollard, Reports Management Officer, REE, Department of Housing and Urban Development, 451 7th Street SW, Washington, DC 20410; email
Copies of available documents submitted to OMB may be obtained from Ms. Pollard.
This notice informs the public that HUD is seeking approval from OMB for the information collection described in Section A.
The
This notice is soliciting comments from members of the public and affected parties concerning the collection of information described in Section A on the following:
(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;
(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 through the use of appropriate automated collection techniques or other forms of information technology,
(5) ways to minimize the burden of the collection of information on those who are to respond, including the use of automated collection techniques or other forms of information technology.
HUD encourages interested parties to submit comments in response to these questions.
Section 3507 of the Paperwork Reduction Act of 1995, 44 U.S.C. Chapter 35.
Bureau of Indian Affairs, Interior.
Notice.
The Bureau of Indian Affairs (BIA) approved the Ho-Chunk Nation of Wisconsin Amended Residential Leasing Ordinance under the Helping Expedite and Advance Responsible Tribal Homeownership Act of 2012 (HEARTH Act). With this approval, the Tribe is authorized to enter into residential leases without further BIA approval.
BIA issued the approval on October 26, 2023.
Ms. Carla Clark, Bureau of Indian Affairs,
The HEARTH Act makes a voluntary, alternative land leasing process available to Tribes, by amending the Indian Long-Term Leasing Act of 1955, 25 U.S.C. 415. The HEARTH Act authorizes Tribes to negotiate and enter into business leases of Tribal trust lands with a primary term of 25 years, and up to two renewal terms of 25 years each, without the approval of the Secretary of the Interior (Secretary). The HEARTH Act also authorizes Tribes to enter into leases for residential, recreational, religious or educational purposes for a primary term of up to 75 years without the approval of the Secretary. Participating Tribes develop Tribal Leasing regulations, including an environmental review process, and then must obtain the Secretary's approval of those regulations prior to entering into leases. The HEARTH Act requires the Secretary to approve Tribal regulations if the Tribal regulations are consistent with the Department of the Interior's (Department) leasing regulations at 25 CFR part 162 and provide for an environmental review process that meets requirements set forth in the HEARTH Act. This notice announces that the Secretary, through the Assistant Secretary—Indian Affairs, has approved the Tribal regulations for the Ho-Chunk Nation of Wisconsin.
The Department's regulations governing the surface leasing of trust and restricted Indian lands specify that, subject to applicable Federal law, permanent improvements on leased land, leasehold or possessory interests, and activities under the lease are not subject to State and local taxation and may be subject to taxation by the Indian Tribe with jurisdiction.
The strong Federal and Tribal interests against State and local taxation of improvements, leaseholds, and activities on land leased under the Department's leasing regulations apply equally to improvements, leaseholds, and activities on land leased pursuant to Tribal leasing regulations approved under the HEARTH Act. Congress's overarching intent was to “allow Tribes to exercise greater control over their own land, support self-determination, and eliminate bureaucratic delays that stand in the way of homeownership and economic development in Tribal communities.” 158 Cong. Rec. H. 2682 (May 15, 2012). The HEARTH Act was intended to afford Tribes “flexibility to adapt lease terms to suit [their] business and cultural needs” and to “enable [Tribes] to approve leases quickly and efficiently.” H. Rep. 112-427 at 6 (2012).
Assessment of State and local taxes would obstruct these express Federal policies supporting Tribal economic development and self-determination, and also threaten substantial Tribal interests in effective Tribal Government, economic self-sufficiency, and territorial autonomy.
Similar to BIA's surface leasing regulations, Tribal regulations under the HEARTH Act pervasively cover all aspects of leasing.
Accordingly, the Federal and Tribal interests weigh heavily in favor of preemption of State and local taxes on lease-related activities and interests, regardless of whether the lease is governed by Tribal leasing regulations or 25 CFR part 162. Improvements, activities, and leasehold or possessory interests may be subject to taxation by the Ho-Chunk Nation of Wisconsin.
Bureau of Indian Affairs, Interior.
Notice.
This notice publishes the approval of the Fourth Amendment to the Tribal-State Compact between the Spokane Tribe of Indians and the State of Washington.
The Amendment takes effect on November 1, 2023.
Ms. Paula L. Hart, Director, Office of Indian Gaming, Office of the Assistant Secretary—Indian Affairs, Washington, DC 20240, (202) 219-4066.
Under section 11 of the Indian Gaming Regulatory Act (IGRA), Public Law 100-497, 25 U.S.C. 2701
National Park Service, Interior.
Notice of a new system of records.
Pursuant to the provisions of the Privacy Act of 1974, as amended, the Department of the Interior (DOI) is issuing a public notice of its intent to create the National Park Service (NPS) Privacy Act system of records, INTERIOR/NPS-34, Backcountry and Wilderness Use Permit System. The system processes applications for permits from individual members of the public, organizations, and other business entities interested in obtaining permits authorizing access to and use of backcountry and wilderness areas within the National Park System. This new system will be included in DOI's inventory of record systems.
This new system will be effective upon publication. New routine uses will be effective December 1, 2023. Submit comments on or before December 1, 2023.
You may send comments identified by docket number [DOI-2022-0006] by any of the following methods:
•
•
•
Felix Uribe, Associate Privacy Officer, National Park Service, 12201 Sunrise Valley Drive, Reston, VA 20192,
NPS is establishing the system of records for the INTERIOR/NPS-34, Backcountry and Wilderness Use Permit System. The system processes applications for permits from members of the public, organizations, and other business entities interested in obtaining permits authorizing access to and use of backcountry and wilderness areas within the National Park System. The system also assists park staff with visitors' education, trip planning, fee collection, resource management and protection, wilderness stewardship, outdoor ethics, recreational use planning, law enforcement activities, and public safety, including preventative search and rescue; provides permit holders and participants with information about parks and their partners; identifies permitted trip itineraries; and provides reports of activities conducted under an issued permit.
In accordance with its legal authorities, NPS may share information with Federal, state, local, and Tribal agencies for search and rescue and law enforcement activities, and status of permits to ensure compliance with all applicable permitting requirements and terms of other official agreements. To the extent permitted by law, information may be shared with other agencies and organizations as authorized and compatible with the purpose of this system, or when proper and necessary, consistent with the routine uses set forth in this system of records notice (SORN).
The Privacy Act of 1974, as amended, embodies fair information practice principles in a statutory framework governing the means by which Federal agencies collect, maintain, use, and disseminate individuals' records. The Privacy Act applies to records about individuals that are maintained in a “system of records.” A system of records is a group of any records under the control of an agency from which information is retrieved by the name of an individual or by some identifying number, symbol, or other identifying particulars assigned to the individual. The Privacy Act defines an individual as a United States citizen or lawful permanent resident. Individuals may request access to their own records that are maintained in a system of records in the possession or under the control of DOI by complying with DOI Privacy Act regulations at 43 CFR part 2, subpart K, and following the procedures outlined in the Records Access, Contesting Record, and Notification Procedures sections of this notice.
The Privacy Act requires each agency to publish in the
You should be aware your entire comment including your personally identifiable information, such as your address, phone number, email address, or any other personal information in your comment, may be made publicly available at any time. While you may request to withhold your personally identifiable information from public review, we cannot guarantee we will be able to do so.
INTERIOR/NPS-34, Backcountry and Wilderness Use Permit System.
Unclassified.
Visitor Resource and Protection Directorate, National Park Service, 1849 C Street NW, Room 2462, Washington, DC 20040. Records are also located at the parks responsible for issuing backcountry and wilderness use permits. A current listing of park offices may be obtained by visiting the NPS website at
Chief of Wilderness Stewardship, Visitor and Resource Protection Directorate, National Park Service, 1849 C Street NW, Room 2462, Washington, DC 20240.
Title 54 U.S.C. Subtitle 1, National Park System; 16 U.S.C 1131-1136, Wilderness Act; 16 U.S.C 6801-6814, Federal Lands Recreation Enhancement Act; 36 CFR part 71, Recreation Fees; 36 CFR 1.6, Permits; 36 CFR 2.10, Camping; 36 CFR 2.23, Recreation Fees; and 36 CFR part 13, NPS Units in Alaska.
The purposes of the system are to:
(1) Assist park staff with visitors' education, trip planning, fee collection, resource management and protection, wilderness stewardship, outdoor ethics, recreational use planning, trip itineraries, and law enforcement and public safety activities, including preventative search and rescue;
(2) Establish and verify applicants' eligibility and process applications from members of the public and organizations interested in obtaining a permit for authorized activities within the NPS;
(3) Provide permit holders, participants and members of the public with permit-related information and information about parks and partners;
(4) Monitor activities conducted under a permit and analyze data, produce reports to manage the use of park resources, generate budget estimates and track performance, and evaluate the effectiveness of the permit programs to meet reporting requirements of the DOI and NPS; and
(5) Assess the impact of permitted activities on the conservation and management natural and cultural resources, including protected species and their habitats and preservation of wilderness character.
Individuals covered by the system include members of the public and organizations submitting a permit application, and NPS employees responsible for processing applications for permits, applicants of permits, and holders of permits. This system contains records concerning corporations and other business entities, which are not subject to the Privacy Act. However, records pertaining to individuals acting on behalf of corporations and other business entities may reflect personal information.
The system contains backcountry and wilderness permit applications and permits for authorized activities in national parks and may include applicant information such as name, address and country, email, home phone number, personal mobile number, work phone number, park pass number, group/organization type, permit request number, permit number; type and location of backcountry and wilderness use requested; method of travel; mode of transportation such as vehicle, aircraft, watercraft, snowmobile, and off-road vehicle information including make, model, and color, state of issuance and license plate number; parking and launch locations; aircraft Registration N-number and watercraft Hull Registration number; equipment information; itinerary details such as dates, use area or location, trailhead and/or campground/trail name or code, number of campsites, trip length, and group size; payment information such as credit card number, credit card expiration date, and amount authorized. Other records also include information pertaining to general administrative processing and review of an application, and the monitoring of activities under the issued permit.
Records in the system are obtained from applicants and permit holders of backcountry and wilderness permits.
In addition to those disclosures generally permitted under 5 U.S.C. 552a(b) of the Privacy Act, all or a portion of the records or information contained in this system may be disclosed outside DOI as a routine use pursuant to 5 U.S.C. 552a(b)(3) as follows:
A. To the Department of Justice (DOJ), including Offices of the U.S. Attorneys, or other Federal agency conducting litigation or in proceedings before any court, adjudicative, or administrative body, when it is relevant or necessary to the litigation and one of the following is a party to the litigation or has an interest in such litigation:
(1) DOI or any component of DOI;
(2) Any other Federal agency appearing before the Office of Hearings and Appeals;
(3) Any DOI employee or former employee acting in his or her official capacity;
(4) Any DOI employee or former employee acting in his or her individual capacity when DOI or DOJ has agreed to represent that employee or pay for private representation of the employee; or
(5) The United States Government or any agency thereof, when DOJ determines that DOI is likely to be affected by the proceeding.
B. To a congressional office when requesting information on behalf of, and at the request of, the individual who is the subject of the record.
C. To the Executive Office of the President in response to an inquiry from that office made at the request of the subject of a record or a third party on that person's behalf, or for a purpose compatible with the reason for which the records are collected or maintained.
D. To any criminal, civil, or regulatory law enforcement authority (whether Federal, state, territorial, local, tribal or foreign) when a record, either alone or in conjunction with other information, indicates a violation or potential violation of law—criminal, civil, or regulatory in nature, and the disclosure is compatible with the purpose for which the records were compiled.
E. To an official of another Federal agency to provide information needed in the performance of official duties related to reconciling or reconstructing data files or to enable that agency to respond to an inquiry by the individual to whom the record pertains.
F. To Federal, state, territorial, local, tribal, or foreign agencies that have requested information relevant or necessary to the hiring, firing or retention of an employee or contractor, or the issuance of a security clearance, license, contract, grant or other benefit, when the disclosure is compatible with the purpose for which the records were compiled.
G. To representatives of the National Archives and Records Administration (NARA) to conduct records management inspections under the authority of 44 U.S.C. 2904 and 2906.
H. To state, territorial and local governments and tribal organizations to provide information needed in response to court order and/or discovery purposes related to litigation, when the disclosure is compatible with the purpose for which the records were compiled.
I. To an expert, consultant, grantee, shared service provider, or contractor (including employees of the contractor) of DOI that performs services requiring access to these records on DOI's behalf to carry out the purposes of the system.
J. To appropriate agencies, entities, and persons when:
(1) DOI suspects or has confirmed that there has been a breach of the system of records;
(2) DOI has determined that as a result of the suspected or confirmed breach there is a risk of harm to individuals, DOI (including its information systems, programs, and operations), the Federal Government, or national security; and
(3) the disclosure made to such agencies, entities, and persons is reasonably necessary to assist in connection with DOI's efforts to respond to the suspected or confirmed breach or to prevent, minimize, or remedy such harm.
K. To another Federal agency or Federal entity, when DOI determines that information from this system of records is reasonably necessary to assist the recipient agency or entity in:
(1) responding to a suspected or confirmed breach; or
(2) preventing, minimizing, or remedying the risk of harm to individuals, the recipient agency or entity (including its information systems, programs, and operations), the Federal Government, or national security, resulting from a suspected or confirmed breach.
L. To the Office of Management and Budget (OMB) during the coordination and clearance process in connection with legislative affairs as mandated by OMB Circular A-19.
M. To the Department of the Treasury to recover debts owed to the United States.
N. To the news media and the public, with the approval of the Public Affairs Officer in consultation with counsel and the Senior Agency Official for Privacy, where there exists a legitimate public interest in the disclosure of the information, except to the extent it is determined that release of the specific information in the context of a particular case would constitute an unwarranted invasion of personal privacy.
O. To Federal, state, local, and tribal jurisdictions and agencies for the purpose of disclosing emergency contact information related to search and rescue efforts and coordinated law enforcement activities.
P. To Federal, state, local and tribal natural resource, recreation and land management jurisdictions, agencies, and organizations for the purpose of monitoring backcountry and wilderness visitor use activities, locations, and statistics, and disclosing information on permits granted in compliance with all applicable permitting requirements.
Paper records are stored in file folders stored within filing cabinets. Electronic records are maintained in computers, computer databases, email, and electronic media such as removable hard drives, magnetic disks, compact discs, and computer tapes.
Records in this system are retrieved by various fields including the first name, last name, permit request number, permit number, email address, phone number, license plate number, use area and date, organization, and zip code.
Records in this system are retained in accordance with the NPS Records Schedule Resource Management and Lands (Item 1), which has been approved by NARA (Job No. N1-79-08-1). The disposition for routine visitor use, resource management and land records are temporary and are destroyed or deleted 3 years after closure. Approved destruction methods for temporary records that have met their retention period include shredding or pulping paper records and erasing or degaussing electronic records in accordance with NARA guidelines and Departmental policy.
The records contained in this system are safeguarded in accordance with 43 CFR 2.226 and other applicable security and privacy rules and policies. During normal hours of operation, paper records are maintained in locked file cabinets under the control of authorized personnel. Computer servers on which electronic records are stored and located in secured DOI controlled facilities with physical, technical and administrative levels of security to prevent unauthorized access to the DOI network and information assets. Access granted to authorized personnel is password-protected, and each person granted access to the system must be individually authorized to use the system. A Privacy Act Warning Notice appears on computer monitor screens when records containing information on individuals are first displayed. Data exchanged between the servers and the system is encrypted. Backup tapes are encrypted and stored in a locked and
Computerized records systems follow the National Institute of Standards and Technology privacy and security standards as developed to comply with the Privacy Act of 1974, as amended, 5 U.S.C. 552a; Paperwork Reduction Act of 1995, 44 U.S.C. 3501
Access to records in the system is limited to authorized personnel who have a need to access the records in the performance of their official duties, and each user's access is restricted to only the functions and data necessary to perform that person's job responsibilities. System administrators and authorized users are trained and required to follow established internal security protocols and must complete all security, privacy, and records management training and sign the DOI Rules of Behavior. Privacy Impact Assessments were conducted to ensure that Privacy Act requirements are met and appropriate privacy controls were implemented to safeguard the personally identifiable information contained in the system.
An individual requesting access to their records should send a written inquiry to the applicable System Manager identified above. DOI forms and instructions for submitting a Privacy Act request may be obtained from the DOI Privacy Act Requests website at
An individual requesting amendment of their records should send a written request to the applicable System Manager as identified above. DOI instructions for submitting a request for amendment of records are available on the DOI Privacy Act Requests website at
An individual requesting notification of the existence of records about them should send a written inquiry to the applicable System Manager as identified above. DOI instructions for submitting a request for notification are available on the DOI Privacy Act Requests website at
None.
None.
Bureau of Land Management, Interior.
Notice of official filing.
The plats of survey of lands described in this notice are scheduled to be officially filed in the Bureau of Land Management (BLM), Alaska State Office, Anchorage, Alaska. The surveys, which were executed at the request of the BLM and the National Oceanic and Atmospheric Administration (NOAA), are necessary for the management of these lands.
The BLM must receive protests by December 1, 2023.
You may buy a copy of the plats from the BLM Alaska Public Information Center, 222 W 7th Avenue, Mailstop 13, Anchorage, AK 99513. Please use this address when filing written protests. You may also view the plats at the BLM Alaska Public Information Center, Fitzgerald Federal Building, 222 W 7th Avenue, Anchorage, Alaska, at no cost.
Thomas B. O'Toole, Chief, Branch of Cadastral Survey, Alaska State Office, Bureau of Land Management, 222 W 7th Avenue, Anchorage, AK 99513; 907-271-4231;
The lands surveyed are:
A person or party who wishes to protest one or more plats of survey identified above must file a written notice of protest with the State Director for the BLM in Alaska. The protest may be filed by mailing to BLM State Director, Alaska State Office, Bureau of Land Management, 222 W 7th Avenue, Anchorage, AK 99513 or by delivering it in person to BLM Alaska Public Information Center, Fitzgerald Federal Building, 222 W 7th Avenue, Anchorage, Alaska. The notice of protest must identify the plat(s) of survey that the person or party wishes to protest. You must file the notice of protest before the scheduled date of official filing for the plat(s) of survey being protested. The BLM will not consider any notice of protest filed after the scheduled date of official filing. A notice of protest is considered filed on the date it is received by the State Director for the BLM in Alaska during regular business hours; if received after regular business hours, a notice of protest will be considered filed the next business day. A written statement of reasons in support of a protest, if not filed with the notice of protest, must be filed with the State Director for the BLM in Alaska within 30 calendar days after the notice of protest is filed.
If a notice of protest against a plat of survey is received prior to the scheduled date of official filing, the official filing of the plat of survey identified in the notice of protest will be stayed pending consideration of the protest. A plat of survey will not be officially filed until the dismissal or resolution of all protests of the plat.
Before including your address, phone number, email address, or other personally identifiable information in a notice of protest or statement of reasons, you should be aware that the documents you submit, including your personally identifiable information, may be made publicly available in their entirety at any time. While you can ask the BLM to withhold your personally identifiable information from public review, we cannot guarantee that we will be able to do so.
Bureau of Land Management, Interior.
Temporary closure.
The Las Vegas Field Office announces the temporary closures of certain public lands under its administration in Clark County, NV. These temporary closures are being made in the interest of public safety for the SNORE 250, Mint 400, and Legacy Battleground Off-Highway Vehicle (OHV) races in the Jean/Roach Dry Lakes Special Recreation Management Area (SRMA). The events will individually take place for one-day and two-day periods between the months of December to March from 2023 through 2027. The temporary closures are needed to limit access to the race area and minimize the risk of potential collisions with spectators and racers during the events.
The temporary closures will go into effect during the official permitted running of the SNORE 250, Mint 400, and Legacy Battleground OHV races. The SNORE 250 and Legacy Battleground OHV races are one-day races, and the Mint 400 takes place over a two-day period. The races occur between the months of December to March each year from 2023-2027. The closure dates will be listed on
The temporary closure order and map of the closure area will be posted at the BLM Las Vegas Field Office, 4701 North Torrey Pines Drive, Las Vegas, Nevada, 89130, and on the BLM website:
Braden Yardley, Outdoor Recreation Planner, (702) 515-5089, or
The Las Vegas Field Office announces the temporary closure of certain public lands under its administration. This action is being taken to help ensure public safety and prevent unnecessary environmental degradation during the official permitted running of the SNORE 250, Mint 400, and Legacy Battleground OHV races.
The public lands affected by this closure are described as follows:
The area described contains 106,786 acres, more or less, according to the BLM National PLSS CadNSDI and the official plats of the surveys of the said land on file with the BLM.
Roads leading into the public lands under the temporary closure will be posted to notify the public of the closure. The closure area includes the Jean Dry Lake and is bordered by Hidden Valley to the north, the McCullough Mountains to the east, the California State line to the south and Nevada State Route 604 to the west. Under the authority of section 303(a) of the Federal Lands Policy and Management Act of 1976 (43 U.S.C. 1733(a)), 43 CFR 8360.0-7, and 43 CFR 8364.1, the BLM will enforce the following rules in the area described above:
The entire area as listed in the legal description above is closed for individual 1-day and 2-day periods during the official permitted running of the SNORE 250, Mint 400, and Legacy Battleground OHV races to all vehicles and personnel except law enforcement, emergency vehicles, event personnel, event participants, and ticketed spectators. Access routes leading to the closed area will be posted as “closure ahead”. No vehicle stopping or parking in the closed area except for designated areas will be permitted. Event participants and spectators are required to remain within designated pit and spectator areas only.
The following restrictions will be in effect for the duration of the closure to ensure public safety of participants and spectators. Unless otherwise authorized, the following activities within the closure area are prohibited:
• Camping.
• Possession of and/or consuming any alcoholic beverage by any person under the age of 21 years.
• Discharging or use of firearms or other weapons.
• Possession and/or discharging of fireworks.
• Allowing any pet or other animal in one's care to be unrestrained at any time. Animals must be on a leash or other restraint no longer than 3 feet.
• Operation of any vehicle that is not legally registered for street and highway operation, for example, all-terrain vehicles (ATV), motorcycles, utility terrain vehicles (UTV), golf carts, and any off-highway vehicle (OHV), including operation of such a vehicle in spectator viewing areas.
• Parking any vehicle in violation of posted restrictions, or in such a manner as to obstruct or impede normal or emergency traffic movement or the parking of other vehicles, create a safety hazard, or endanger any person, property, or feature. Vehicles so parked are subject to citation, removal, and impoundment at the owner's expense.
• Operating a vehicle through, around, or beyond a restrictive sign, barricade, fence, or traffic control barrier or device.
• Failing to maintain control of a vehicle to avoid danger to persons, property, resources, or wildlife.
• Operating a motor vehicle without due care or at a speed greater than 25 mph.
Signs and maps directing the public to designated spectator areas will be provided by the event sponsor.
Bureau of Reclamation, Interior.
Notice of information collection; request for comments.
In accordance with the Paperwork Reduction Act of 1995, we, the Bureau of Reclamation (Reclamation), are proposing to renew an information collection.
Interested persons are invited to submit comments on or before December 1, 2023.
Written comments and recommendations for the proposed information collection should be sent within 30 days of publication of this notice to
To request additional information about this information collection request, contact Janice Perez, Bureau of Reclamation, by email at
In accordance with the Paperwork Reduction Act of 1995 (PRA, 44 U.S.C. 3501
A
As part of our continuing effort to reduce paperwork and respondent burdens, we are again soliciting comments from the public and other Federal agencies on the proposed information collection request that is described below. We are especially interested in public comment addressing the following:
(1) Whether or not the collection of information is necessary for the proper performance of the functions of the agency, including whether or not the information will have practical utility;
(2) The accuracy of our estimate of the burden for this 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) How might the agency minimize the burden of the collection of information on those who are to respond, including through the use of appropriate automated, electronic, mechanical, or other technological collection techniques or other forms of information technology,
Comments that you submit in response to this notice are a matter of public record. Before including your address, phone number, email address, or other personal identifying information in your comment, you should be aware that your entire comment—including your personal identifying information—may be made publicly available at any time. While you can ask us in your comment to withhold your personal identifying information from public review, we cannot guarantee that we will be able to do so.
An agency may not conduct or sponsor, and a person is not required to respond to a collection of information unless it displays a currently valid OMB control number.
The authority for this action is the Paperwork Reduction Act of 1995 (44 U.S.C. 3501
Bureau of Reclamation, Interior.
Notice of information collection; request for comment.
In accordance with the Paperwork Reduction Act of 1995, we, the Bureau of Reclamation (Reclamation), are proposing to renew an information collection.
Interested persons are invited to submit comments on or before December 1, 2023.
Written comments and recommendations for the proposed information collection should be sent within 30 days of publication of this notice to
To request additional information about this information collection request (ICR), contact Janice Perez by email at
In accordance with the Paperwork Reduction Act of 1995 (PRA, 44 U.S.C. 3501
A
As part of our continuing effort to reduce paperwork and respondent burdens, we are again soliciting comments from the public and other Federal agencies on the proposed ICR that is described below. We are especially interested in public comment addressing the following:
(1) Whether or not the collection of information is necessary for the proper performance of the functions of the agency, including whether or not the information will have practical utility;
(2) The accuracy of our estimate of the burden for this 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) How might the agency minimize the burden of the collection of information on those who are to respond, including through the use of appropriate automated, electronic, mechanical, or other technological collection techniques or other forms of information technology,
Comments that you submit in response to this notice are a matter of public record. Before including your address, phone number, email address, or other personal identifying information in your comment, you should be aware that your entire comment—including your personal identifying information—may be made publicly available at any time. While you can ask us in your comment to withhold your personal identifying information from public review, we cannot guarantee that we will be able to do so.
An agency may not conduct or sponsor, and a person is not required to respond to a collection of information unless it displays a currently valid OMB control number.
The authority for this action is the Paperwork Reduction Act of 1995 (44 U.S.C. 3501
Bureau of Reclamation, Interior.
Notice of information collection; request for comment.
In accordance with the Paperwork Reduction Act of 1995, we, the Bureau of Reclamation (Reclamation), are proposing to renew an information collection.
Interested persons are invited to submit comments on or before December 1, 2023.
Written comments and recommendations for the proposed information collection should be sent within 30 days of publication of this notice to
To request additional information about this information collection request (ICR), contact Janice Perez by email at
In accordance with the Paperwork Reduction Act of 1995 (PRA, 44 U.S.C. 3501
A
As part of our continuing effort to reduce paperwork and respondent burdens, we are again soliciting comments from the public and other Federal agencies on the proposed ICR that is described below. We are especially interested in public comment addressing the following:
(1) Whether or not the collection of information is necessary for the proper performance of the functions of the agency, including whether or not the information will have practical utility;
(2) The accuracy of our estimate of the burden for this 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) How might the agency minimize the burden of the collection of information on those who are to respond, including through the use of appropriate automated, electronic, mechanical, or other technological collection techniques or other forms of information technology,
Comments that you submit in response to this notice are a matter of public record. Before including your address, phone number, email address, or other personal identifying information in your comment, you should be aware that your entire comment—including your personal identifying information—may be made publicly available at any time. While you can ask us in your comment to withhold your personal identifying information from public review, we cannot guarantee that we will be able to do so.
An agency may not conduct or sponsor and a person is not required to respond to a collection of information unless it displays a currently valid OMB control number.
The authority for this action is the Paperwork Reduction Act of 1995 (44 U.S.C. 3501
Office of Surface Mining Reclamation and Enforcement, Interior.
Notice of information collection; request for comment.
In accordance with the Paperwork Reduction Act of 1995, we, the Office of Surface Mining Reclamation and Enforcement (OSMRE), are proposing to renew an information collection.
Interested persons are invited to submit comments on or before January 2, 2024.
Send your comments on this information collection request (ICR) by mail to Mark Gehlhar, Office of Surface Mining Reclamation and Enforcement, 1849 C Street NW, Room 4556-MIB, Washington, DC 20240, or by email to
To request additional information about this ICR, contact Mark Gehlhar by email at
In accordance with the Paperwork Reduction Act of 1995 (44 U.S.C. 3501
We are soliciting comments on the proposed ICR that is described below. We are especially interested in public comment addressing the following issues: (1) is the collection necessary to the proper functions of the agency; (2) will this information be processed and used in a timely manner; (3) is the estimate of burden accurate; (4) how might the agency enhance the quality, utility, and clarity of the information to be collected; and (5) how might the agency minimize the burden of this collection on the respondents, including through the use of information technology.
Comments that you submit in response to this notice are a matter of public record. We will include or summarize each comment in our request to OMB to approve this ICR. Before including your address, phone number, email address, or other personal identifying information in your comment, you should be aware that your entire comment—including your personal identifying information—may be made publicly available at any time. While you can ask us in your comment to withhold your personal identifying information from public review, we cannot guarantee that we will be able to do so.
An agency may not conduct or sponsor and a person is not required to respond to a collection of information unless it displays a currently valid OMB control number.
The authority for this action is the Paperwork Reduction Act of 1995 (44 U.S.C. 3501
United States International Trade Commission.
Notice.
The Commission hereby gives notice that it has instituted a review pursuant to the Tariff Act of 1930 (“the Act”), as amended, to determine whether revocation of the antidumping duty order on clad steel plate from Japan would be likely to lead to continuation or recurrence of material injury. Pursuant to the Act, interested parties are requested to respond to this notice by submitting the information specified below to the Commission.
Instituted November 1, 2023. To be assured of consideration, the deadline for responses is December 1, 2023. Comments on the adequacy of responses may be filed with the Commission by January 11, 2024.
Alexis Yim (202-708-1446), 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 (
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Former Commission employees who are seeking to appear in Commission five-year reviews are advised that they may appear in a review even if they participated personally and substantially in the corresponding underlying original investigation or an earlier review of the same underlying investigation. The Commission's designated agency ethics official has advised that a five-year review is not the same particular matter as the underlying original investigation, and a five-year review is not the same particular matter as an earlier review of the same underlying investigation for purposes of 18 U.S.C. 207, the post-employment statute for Federal employees, and Commission rule 201.15(b) (19 CFR 201.15(b)), 79 FR 3246 (Jan. 17, 2014), 73 FR 24609 (May 5, 2008). Consequently, former employees are not required to seek Commission approval to appear in a review under Commission rule 19 CFR 201.15, even if the corresponding underlying original investigation or an earlier review of the same underlying investigation was pending when they were Commission employees. For further ethics advice on this matter, contact Charles Smith, Office of the General Counsel, at 202-205-3408.
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,
No response to this request for information is required if a currently valid Office of Management and Budget (“OMB”) number is not displayed; the OMB number is 3117 0016/USITC No. 23-5-582, expiration date June 30, 2026. Public reporting burden for the request is estimated to average 15 hours per response. Please send comments regarding the accuracy of this burden estimate to the Office of Investigations, U.S. International Trade Commission, 500 E Street SW, Washington, DC 20436.
Those responding to this notice of institution are encouraged, but not required, to visit the USITC's website at
(1) The name and address of your firm or entity (including World Wide Web address) and name, telephone number, fax number, and email address of the certifying official.
(2) A statement indicating whether your firm/entity is an interested party under 19 U.S.C. 1677(9) and if so, how, including whether your firm/entity is a U.S. producer of the
(3) A statement indicating whether your firm/entity is willing to participate in this proceeding by providing information requested by the Commission.
(4) A statement of the likely effects of the revocation of the antidumping duty order on the
(5) A list of all known and currently operating U.S. producers of the
(6) A list of all known and currently operating U.S. importers of the
(7) A list of 3-5 leading purchasers in the U.S. market for the
(8) A list of known sources of information on national or regional prices for the
(9) If you are a U.S. producer of the
(a) Production (quantity) and, if known, an estimate of the percentage of total U.S. production of the
(b) Capacity (quantity) of your firm to produce the
(c) the quantity and value of U.S. commercial shipments of the
(d) the quantity and value of U.S. internal consumption/company transfers of the
(e) the value of (i) net sales, (ii) cost of goods sold (COGS), (iii) gross profit, (iv) selling, general and administrative (SG&A) expenses, and (v) operating income of the
(10) If you are a U.S. importer or a trade/business association of U.S. importers of the
(a) The quantity and value (landed, duty-paid but not including antidumping duties) of U.S. imports and, if known, an estimate of the percentage of total U.S. imports of
(b) the quantity and value (f.o.b. U.S. port, including antidumping duties) of U.S. commercial shipments of
(c) the quantity and value (f.o.b. U.S. port, including antidumping duties) of U.S. internal consumption/company transfers of
(11) If you are a producer, an exporter, or a trade/business association of producers or exporters of the
(a) Production (quantity) and, if known, an estimate of the percentage of total production of
(b) Capacity (quantity) of your firm(s) to produce the
(c) the quantity and value of your firm's(s') exports to the United States of
(12) Identify significant changes, if any, in the supply and demand conditions or business cycle for the
(13) (OPTIONAL) A statement of whether you agree with the above definitions of the
By order of the Commission.
United States International Trade Commission.
Notice.
The Commission hereby gives notice that it has instituted reviews pursuant to the Tariff Act of 1930 (“the Act”), as amended, to determine whether revocation of the antidumping duty orders on silicomanganese from China and Ukraine would be likely to lead to continuation or recurrence of material injury. Pursuant to the Act, interested parties are requested to respond to this notice by submitting the information specified below to the Commission.
Instituted November 1, 2023. To be assured of consideration, the deadline for responses is December 1, 2023. Comments on the adequacy of responses may be filed with the Commission by January 11, 2024.
Kenneth Gatten III (202-708-1447), 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 (
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Former Commission employees who are seeking to appear in Commission five-year reviews are advised that they may appear in a review even if they participated personally and substantially in the corresponding underlying original investigation or an earlier review of the same underlying investigation. The Commission's designated agency ethics official has advised that a five-year review is not the same particular matter as the underlying original investigation, and a five-year review is not the same particular matter as an earlier review of the same underlying investigation for purposes of 18 U.S.C. 207, the post-employment statute for Federal employees, and Commission rule 201.15(b) (19 CFR 201.15(b)), 79 FR 3246 (Jan. 17, 2014), 73 FR 24609 (May 5, 2008). Consequently, former employees are not required to seek Commission approval to appear in a review under Commission rule 19 CFR 201.15, even if the corresponding underlying original investigation or an earlier review of the same underlying investigation was pending when they were Commission employees. For further ethics advice on this matter, contact Charles Smith, Office of the General Counsel, at 202-205-3408.
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,
No response to this request for information is required if a currently valid Office of Management and Budget (“OMB”) number is not displayed; the OMB number is 3117 0016/USITC No. 23-5-583, expiration date June 30, 2026. Public reporting burden for the request is estimated to average 15 hours per response. Please send comments regarding the accuracy of this burden
Those responding to this notice of institution are encouraged, but not required, to visit the USITC's website at
(1) The name and address of your firm or entity (including World Wide Web address) and name, telephone number, fax number, and Email address of the certifying official.
(2) A statement indicating whether your firm/entity is an interested party under 19 U.S.C. 1677(9) and if so, how, including whether your firm/entity is a U.S. producer of the
(3) A statement indicating whether your firm/entity is willing to participate in this proceeding by providing information requested by the Commission.
(4) A statement of the likely effects of the revocation of the antidumping duty orders on the
(5) A list of all known and currently operating U.S. producers of the
(6) A list of all known and currently operating U.S. importers of the
(7) A list of 3-5 leading purchasers in the U.S. market for the
(8) A list of known sources of information on national or regional prices for the
(9) If you are a U.S. producer of the
(a) Production (quantity) and, if known, an estimate of the percentage of total U.S. production of the
(b) Capacity (quantity) of your firm to produce the
(c) the quantity and value of U.S. commercial shipments of the
(d) the quantity and value of U.S. internal consumption/company transfers of the
(e) the value of (i) net sales, (ii) cost of goods sold (COGS), (iii) gross profit, (iv) selling, general and administrative (SG&A) expenses, and (v) operating income of the
(10) If you are a U.S. importer or a trade/business association of U.S. importers of the
(a) The quantity and value (landed, duty-paid but not including antidumping duties) of U.S. imports and, if known, an estimate of the percentage of total U.S. imports of
(b) the quantity and value (f.o.b. U.S. port, including antidumping duties) of U.S. commercial shipments of
(c) the quantity and value (f.o.b. U.S. port, including antidumping duties) of U.S. internal consumption/company transfers of
(11) If you are a producer, an exporter, or a trade/business association of producers or exporters of the
(a) Production (quantity) and, if known, an estimate of the percentage of total production of
(b) Capacity (quantity) of your firm(s) to produce the
(c) the quantity and value of your firm's(s') exports to the United States of
(12) Identify significant changes, if any, in the supply and demand conditions or business cycle for the
(13) (OPTIONAL) A statement of whether you agree with the above definitions of the
By order of the Commission.
U.S. International Trade Commission.
Notice.
Notice is hereby given that the U.S. International Trade Commission has found a violation of section 337 in the above-captioned investigation. The Commission has determined to issue: a limited exclusion order (“LEO”) prohibiting the unlicensed entry of infringing wearable electronic devices with light-based pulse oximetry functionality and components thereof covered by certain claims of U.S. Patent Nos. 10,912,502 or 10,945,648 that are manufactured by or on behalf of, or imported by or on behalf of, respondent Apple, Inc. (“Apple”) or any of its affiliated companies, parents, subsidiaries, or other related business entities, or its successors or assigns; and a cease and desist order (“CDO”) directed against Apple and any of its affiliated companies, parents, subsidiaries, or other related business entities, or its successors or assigns. This investigation is terminated.
Ronald A. Traud, Esq., Office of the General Counsel, U.S. International Trade Commission, 500 E Street SW, Washington, DC 20436, telephone (202) 205-3427. Copies of non-confidential documents filed in connection with this investigation may be viewed on the Commission's electronic docket (EDIS) at
The Commission instituted this investigation on August 18, 2021, based on a complaint filed on behalf of Masimo Corporation and Cercacor Laboratories, Inc., both of Irvine, CA (collectively, “Complainants”). 86 FR 46275 (Aug. 18, 2021). The complaint, as amended, alleged violations of section 337 of the Tariff Act of 1930, as amended, 19 U.S.C. 1337, based upon the importation into the United States, the sale for importation, and the sale within the United States after importation of certain light-based physiological measurement devices and components thereof by reason of infringement of certain claims of U.S. Patent No. 10,912,501 (“the '501 patent”); U.S. Patent No. 10,912,502 (“the '502 patent”); U.S. Patent No. 10,945,648 (“the '648 patent”); U.S. Patent No. 10,687,745 (“the '745 patent”); and U.S. Patent No. 7,761,127 (“the '127 patent”).
Complainants previously withdrew certain asserted claims pursuant to Order No. 25 (Mar. 23, 2022),
On January 10, 2023, the presiding administrative law judge (“ALJ”) issued the final initial determination (“Final ID”), which found that Apple violated section 337 as to claims 24 and 30 of the '648 patent, but not as to claim 12 of the '501 patent, claims 22 and 28 of the '502 patent, claim 12 of the '648 patent, claims 9 and 27 of the '745 patent, and claim 9 of the '127 patent.
On January 23, 2023, Complainants and Apple each filed a petition for review. On January 31, 2023, Complainants and Apple each filed responses to the other party's petitions.
On February 23, 2023, the parties filed their public interest statements pursuant to 19 CFR 210.50(a)(4). The Commission received numerous comments on the public interest from non-parties.
On May 15, 2023, after considering the parties' petitions and responses thereto, the Commission determined to review the Final ID in part.
(1) the domestic industry with regard to the '501 patent, the '502 patent, the '648 patent, and the '745 patent;
(2) obviousness with regard to the '501 patent, the '502 patent, the '648 patent, and the '745 patent;
(3) written description with regard to claim 28 of the '502 patent and claim 12 of the '648 patent;
(4) claim construction and infringement with regard to the '745 patent; and
(5) subject matter jurisdiction.
On June 5, 2023, the parties filed their written submissions on the issues under review and on remedy, public interest, and bonding, and on June 12, 2023, the parties filed their reply submissions. The Commission also received numerous comments on the public interest from non-parties.
Having reviewed the record in this investigation, including the written submissions of the parties, the Commission affirms with modifications the Final ID's domestic industry findings (both economic and technical prong) as to the '501, '502, '648, and '745 patents. The Commission additionally affirms with modifications the Final ID's conclusion that the asserted claims of the '501 patent are obvious, but the asserted claims of the '502, '648, and '745 patents are not obvious. The Commission has determined to reverse the Final ID's finding that Apple proved by clear and convincing evidence that claim 28 of the '502 patent and claim 12 of the '648 patent are invalid for lack of written description. Furthermore, the Commission affirms the Final ID's claim construction related to the recited term “first shape” and the related conclusion that the Accused Products do not satisfy elements [1B] and [20B] of the '745 patent. The Commission additionally vacates the Final ID's finding that the Commission has subject matter jurisdiction over the investigation and instead finds that the Commission has statutory authority over the investigation. The Commission affirms the remainder of the Final ID that is not inconsistent with the Commission's opinion issued concurrently herewith. As a result, the Commission finds that Apple has violated section 337 as to claims 22 and 28 of the '502 patent and claims 12, 24, and 30 of the '648 patent.
The Commission has determined that the appropriate form of relief is an LEO prohibiting (1) the unlicensed entry of infringing wearable electronic devices with light-based pulse oximetry functionality and components thereof manufactured by or on behalf of Apple or any of its affiliated companies, parents, subsidiaries, or other related business entities, or its successors or assigns. The Commission has also determined to issue a CDO against Apple. The Commission has determined to include an exemption to the remedial orders for service or repair or, under warranty terms, replacement of products purchased prior to the end of the period of Presidential review.
The Commission has further determined that the public interest factors enumerated in subsections (d)(l) and (f)(1) (19 U.S.C. 1337(d)(l), (f)(1)) do not preclude issuance of the above-referenced remedial orders. Additionally, the Commission has determined to impose a bond of zero (0%) (
The Commission vote for this determination took place on October 26, 2023.
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 that it has instituted reviews pursuant to the Tariff Act of 1930 (“the Act”), as amended, to determine whether revocation of the antidumping duty orders on steel concrete reinforcing bar from Belarus, China, Indonesia, Latvia, Moldova, Poland, and Ukraine would be likely to lead to continuation or recurrence of material injury. Pursuant to the Act, interested parties are requested to respond to this notice by submitting the information specified below to the Commission.
Instituted November 1, 2023. To be assured of consideration, the deadline for responses is December 1, 2023. Comments on the adequacy of responses may be filed with the Commission by January 11, 2024.
Lawrence Jones (202-205-3358), 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 (
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Former Commission employees who are seeking to appear in Commission five-year reviews are advised that they may appear in a review even if they participated personally and substantially in the corresponding underlying original investigation or an earlier review of the same underlying investigation. The Commission's designated agency ethics official has advised that a five-year review is not the same particular matter as the underlying original investigation, and a five-year review is not the same particular matter as an earlier review of the same underlying investigation for purposes of 18 U.S.C. 207, the post-employment statute for Federal employees, and Commission rule 201.15(b) (19 CFR 201.15(b)), 79 FR 3246 (Jan. 17, 2014), 73 FR 24609 (May 5, 2008). Consequently, former employees are not required to seek Commission approval to appear in a review under Commission rule 19 CFR 201.15, even if the corresponding underlying original investigation or an earlier review of the same underlying investigation was pending when they were Commission employees. For further ethics advice on this matter, contact Charles Smith, Office of the General Counsel, at 202-205-3408.
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,
No response to this request for information is required if a currently valid Office of Management and Budget (“OMB”) number is not displayed; the OMB number is 3117 0016/USITC No. 23-5-584, expiration date June 30, 2026. Public reporting burden for the request is estimated to average 15 hours per response. Please send comments regarding the accuracy of this burden estimate to the Office of Investigations, U.S. International Trade Commission, 500 E Street SW, Washington, DC 20436.
Those responding to this notice of institution are encouraged, but not required, to visit the USITC's website at
(1) The name and address of your firm or entity (including World Wide Web address) and name, telephone number, fax number, and Email address of the certifying official.
(2) A statement indicating whether your firm/entity is an interested party under 19 U.S.C. 1677(9) and if so, how, including whether your firm/entity is a U.S. producer of the
(3) A statement indicating whether your firm/entity is willing to participate in this proceeding by providing information requested by the Commission.
(4) A statement of the likely effects of the revocation of the antidumping duty orders on the
(5) A list of all known and currently operating U.S. producers of the
(6) A list of all known and currently operating U.S. importers of the
(7) A list of 3-5 leading purchasers in the U.S. market for the
(8) A list of known sources of information on national or regional prices for the
(9) If you are a U.S. producer of the
(a) Production (quantity) and, if known, an estimate of the percentage of total U.S. production of the
(b) Capacity (quantity) of your firm to produce the
(c) the quantity and value of U.S. commercial shipments of the
(d) the quantity and value of U.S. internal consumption/company
(e) the value of (i) net sales, (ii) cost of goods sold (COGS), (iii) gross profit, (iv) selling, general and administrative (SG&A) expenses, and (v) operating income of the
(10) If you are a U.S. importer or a trade/business association of U.S. importers of the
(a) The quantity and value (landed, duty-paid but not including antidumping duties) of U.S. imports and, if known, an estimate of the percentage of total U.S. imports of
(b) the quantity and value (f.o.b. U.S. port, including antidumping duties) of U.S. commercial shipments of
(c) the quantity and value (f.o.b. U.S. port, including antidumping duties) of U.S. internal consumption/company transfers of
(11) If you are a producer, an exporter, or a trade/business association of producers or exporters of the
(a) Production (quantity) and, if known, an estimate of the percentage of total production of
(b) Capacity (quantity) of your firm(s) to produce the
(c) the quantity and value of your firm's(s') exports to the United States of
(12) Identify significant changes, if any, in the supply and demand conditions or business cycle for the
(13) (OPTIONAL) A statement of whether you agree with the above definitions of the
By order of the Commission.
Executive Office for United States Attorneys, Department of Justice.
60-Day notice.
The Executive Office for United States Attorneys (EOUSA), Department of Justice (DOJ), will be submitting the following information collection request to the Office of Management and Budget (OMB) for review and approval in accordance with the Paperwork Reduction Act of 1995.
Comments are encouraged and will be accepted for 60 days until January 2, 2024.
If you have additional comments especially on the estimated public burden or associated response time, suggestions, or need a copy of the proposed information collection instrument with instructions or additional information, please contact Karen Rolley, Executive Office for United States Attorneys, United States Department of Justice, 950 Pennsylvania Avenue NW, Room 2242, Washington, DC 20530-0001; telephone: 202-256-6278, email:
Written comments and suggestions from the public and affected agencies concerning the proposed collection of information are encouraged. Your comments should address one or more of the following four points:
1.
2.
3.
4.
5.
6.
7.
If additional information is required contact: Darwin Arceo, Department Clearance Officer, United States Department of Justice, Justice Management Division, Policy and Planning Staff, Two Constitution Square, 145 N Street NE, 4W-218, Washington, DC.
Legal Services Corporation.
Announcement of the Legal Services Corporation's intent to make FY2024 grant awards.
The Legal Services Corporation (LSC) hereby announces its intention to award grants to provide effective and efficient delivery of high-quality civil legal services to eligible low-income clients, starting January 1, 2024.
All comments and recommendations must be received on or before the close of business on December 1, 2023.
Basic Field Grant Awards, Legal Services Corporation; 3333 K Street NW, Third Floor, Washington, DC 20007.
Christine Williams, Program Manager for Basic Field Competition, Office of Program Performance, at (202) 295-1602 or
Under LSC's Notice of Funds Available published on March 14, 2023, 86 FR 14344, and the Notice of Change in Service Areas on April 14, 2023, 88 FR 24451, and LSC's grant application process beginning on April 14, 2023, LSC intends to award funds to organizations that provide civil legal services in the indicated service areas. Applicants for each service area are listed below. The grant award amounts below are estimates based on the FY2023 grant awards to each service area. The funding estimates may change based on the final FY2024 appropriation. In addition, Agricultural Worker service area population estimates are subject to change based on Department of Labor review and comments LSC receives during the 30-day comment period.
LSC will post all updates and changes to this notice at
These grants will be awarded under the authority conferred on LSC by section 1006(a)(1) of the Legal Services Corporation Act, 42 U.S.C. 2996e(a)(l). Grant awards are made to ensure civil legal services are provided in every service area, although no listed organization is guaranteed a grant award. Grants will become effective, and grant funds will be distributed, on or about January 1, 2024.
LSC issues this notice pursuant to 42 U.S.C. 2996f(f). Comments and recommendations concerning potential grantees are invited and should be delivered to LSC within 30 days from the date of publication of this notice.
National Credit Union Administration (NCUA).
Notice.
The NCUA's staff draft “detailed business-type budget” is being made available for public review as required by federal statute. The proposed resources will finance the agency's annual operations and capital projects, both of which are necessary for the agency to accomplish its mission of protecting the system of cooperative credit and its member-owners through effective chartering, supervision, regulation, and insurance. The briefing schedule and comment instructions are included in the supplementary information section.
Requests to deliver an in-person statement at the November 16, 2023, budget briefing must be received on or before November 8, 2023. Written statements and presentations for those scheduled to appear at the budget briefing must be received on or before 9 a.m. Eastern, November 13, 2023.
Written comments may be submitted by November 21, 2023.
You may submit comments by any of the following methods (please send comments by one method only):
•
•
• Copies of the NCUA Draft 2024-2025 Budget Justification and associated materials are also available on the NCUA website at
Eugene H. Schied, Chief Financial Officer, National Credit Union Administration, 1775 Duke Street, Alexandria, Virginia 22314-3428 or telephone: (703) 518-6571.
The following itemized list details the sections in this Notice made available for public review:
Section 212 of the Economic Growth, Regulatory Relief, and Consumer Protection Act amended 12 U.S.C. 1789(b)(1)(A) to require the NCUA Board (Board) to “on an annual basis and prior to the submission of the detailed business-type budget make publicly available and publish in the
The staff draft budget details the resources required to support NCUA's mission. The staff draft budget includes personnel and dollar estimates for three major budget components: (1) the Operating Budget; (2) the Capital Budget; and (3) the Share Insurance Fund Administrative Budget. The resources proposed in the staff draft budget are to carry out the agency's operations in 2024 and 2025. This document is a draft, staff-level budget proposal made available to the NCUA Board members and the public for their consideration and comment. The NCUA Board directed the NCUA Executive Director to develop the staff draft budget under delegated authority. The staff draft budget may change based on public comments, Board member decisions, and staff's ongoing consideration of estimates and programs that impact the budget.
The NCUA Chief Financial Officer will present the staff draft budget at a budget briefing open to the public and scheduled for Thursday, November 16, 2023, at 2:00 p.m. Eastern at the NCUA headquarters building, 1775 Duke Street, Alexandria, Virginia 22314. Interested parties unable to attend in person may visit the agency's homepage (
If you wish to participate in the briefing and deliver a statement, you must email a request to by November 8, 2023. Your request must include your name, title, affiliation, mailing address, email address, and telephone number. Statements must be delivered in person at the briefing. The NCUA will work to accommodate as many public statements as possible at the November 16, 2023, budget briefing. The Board Secretary will inform you if you have been approved to make a presentation and you will be allotted five minutes during the budget briefing to deliver your remarks. A written copy of your statement must be delivered to the Board Secretary by email at by 9 a.m. Eastern, November 13, 2023. In addition to delivering their remarks at the budget briefing, registered presenters will be provided the opportunity to ask questions of NCUA staff about the staff draft budget. The initial round of questions will be limited to five minutes per presenter, and one subsequent round of questions, limited to five minutes per presenter, may be permitted by the Chairman if time allows.
Written comments on the staff draft budget will also be accepted by November 21, 2023, through the Federal eRulemaking Portal:
All comments should provide specific, actionable recommendations about the staff draft budget rather than general remarks. The NCUA Board will review and consider any comments from the public prior to approving the NCUA 2024-2025 budget.
The National Credit Union Administration's (NCUA)
The NCUA's 2024-2025 staff draft budget justification includes three separate budgets: the Operating Budget, the Capital Budget, and the National Credit Union Share Insurance Fund (Share Insurance Fund) Administrative Expenses Budget. Combined, these three budgets total $394.5 million for 2024, which is $8.7 million lower than the $403.2 million 2024 funding level approved by the NCUA Board as part of the two-year 2023-2024 budget.
Three significant factors, when combined, account for most of the 9.5 percent increase in the total budget between 2023 and 2024:
1. A proposed net increase of 11 new positions and incorporating into the 2024 budget 17 existing positions currently unfunded in the 2023 budget.
2. An increase of $18.2 million for current employee compensation in 2024 compared to 2023. This increase accounts for merit pay raises for the NCUA's employees as required by the Collective Bargaining Agreement and expected inflationary cost increases for employee benefits.
3. An increase of $10.7 million in funding for contracted services for 2024 compared to 2023. Most of the increase in the contracted services category includes funding to address new and evolving operational risks such as cybersecurity threats and for tools used to identify and resolve credit union system risk concerns such as interest rate risk, credit risk, and industry concentration risk. Growth in the contracted services budget category also results from new operations and maintenance costs associated with recent capital investments. Other costs include price inflation for core agency business operation systems such as accounting and payroll processing and various other recurring support costs.
Recent economic trends, including higher inflation and competitive labor markets, have also contributed to increased costs for the NCUA to conduct its work without a significant degradation in agency capabilities.
The proposed 2024 Operating Budget increases approximately $38.0 million, or 11 percent, compared to the 2023 Board-approved Operating Budget.
The following chart presents the major categories of spending supported by the proposed 2024 Operating Budget.
As shown in the following chart, the relative size of the NCUA budget (dotted line) has generally decreased when compared to balance sheets at federally insured credit unions (FICU, solid line).
* Percentage change is based upon exact amounts reflected in the table, “2024-2025 Proposed NCUA Operating Budget Summary”.
** Total staffing levels for 2024 and 2025 do not include five positions funded by the CLF.
Total Staffing. The proposed 2024 Operating Budget includes 1,248 positions.
Despite significant credit union asset growth, total NCUA staffing is still below the 2015 level, as shown in the following chart.
The Operating Budget estimate for 2025 is $418.9 million and includes 3 additional positions compared to the 2024 level.
* Percentage change is based upon exact amounts reflected in the table, “2024-2025 Proposed NCUA Operating Budget Summary.”
The proposed 2024 Capital Budget is $4.0 million lower than the 2023 Board-approved budget.
The Capital Budget supports the NCUA's ongoing effort to modernize its information technology infrastructure and applications. Funding in the Capital Budget for upgrades to or replacement of obsolete information technology systems is lower in 2024 than in 2023, as is the 2024 capital investment for continued enhancement of the Modern Examination and Risk Identification Tool (MERIT) examination system. Other information technology investments in the proposed 2024 Capital Budget include funds to ensure that agency systems comply with evolving cybersecurity requirements required of all federal agencies, enhancements to agency information security, upgrades to old legacy systems, and various hardware investments to refresh agency networks and ensure staff have the tools necessary to achieve the agency's mission.
The Capital Budget also includes $477,000 for NCUA facility maintenance and improvements.
The proposed 2024 Share Insurance Fund Administrative Expenses Budget is $0.2 million higher than the 2023 Board-approved budget. The Share Insurance Fund Administrative Expenses Budget funds the tools and technology used by the Office of National Examinations and Supervision (ONES) to oversee credit union-run stress testing for the largest credit unions, travel for state examiners attending NCUA-sponsored training, audit support for the Share Insurance Fund's financial statements, and certain insurance-related expenses for Asset Management and Assistance Center (AMAC) operations.
For more than 100 years, credit unions have provided financial services to their members. Credit unions are not-for-profit financial cooperatives created to serve a membership with a common bond.
The Federal Credit Union Act will turn 90 years old in 2024. President Franklin Roosevelt signed the Federal Credit Union Act into law on June 26, 1934, in the midst of the Great Depression. The law's goal was to make credit available to Americans and promote thrift through a national system of nonprofit, cooperative credit unions.
The NCUA is the independent federal agency established in 1970 by the U.S. Congress to regulate, charter, and supervise federal credit unions. With the backing of the full faith and credit of the United States, the NCUA operates and manages the National Credit Union Share Insurance Fund, insuring the deposits of the account holders in all federal credit unions and the vast
As of June 30, 2023, the NCUA is responsible for the regulation and supervision of 4,686 federally insured credit unions, which have approximately 137.7 million members and more than $2.2 trillion in assets across all states and U.S. territories.
Pursuant to the Federal Credit Union Act, authority for management of the NCUA is vested in the NCUA Board. It is the Board's responsibility to determine the resources necessary to carry out the NCUA's responsibilities under the Act.
Upon determination of the budgeted annual expenses for the agency's operations, the Board determines a fee schedule to assess federal credit unions. The Board gives consideration to the ability of federal credit unions to pay such a fee and the necessity of the expenses the NCUA will incur in carrying out its responsibilities in connection with federal credit unions.
Pursuant to the law, fees collected are deposited in the agency's Operating Fund at the Treasury of the United States, and those fees are expended by the Board to defray the cost of carrying out the agency's operations, including the examination and supervision of federal credit unions.
The proposed budget for 2024-2025 supports the agency's third year implementing its
1. Ensure a safe, sound, and viable system of cooperative credit that protects consumers.
2. Improve the financial well-being of individuals and communities through access to affordable and equitable financial products and services.
3. Maximize organizational performance to enable mission success.
The NCUA's strategic plan is the foundation for the agency's performance management and resource allocation processes. The annual performance plan functions as the agency's operational plan for each calendar year. It outlines the annual or short-term objectives, strategies, and corresponding performance goals and activities that contribute to the accomplishment of the agency's strategic goals. The NCUA budget provides the resources necessary for the agency to implement its strategic priorities and related programs and activities, to identify key challenges facing the credit union industry, and to leverage agency strengths to help credit unions address those challenges.
Appendix A provides additional information about how the budget aligns to the NCUA's strategic goals.
As a federal agency, the NCUA is required to devote significant resources to numerous activities required by federal law, regulations, or, in some cases, Executive Orders. These requirements drive how many of the agency's activities are implemented and the associated costs. These compliance activities affect the level of resources needed in areas such as information technology acquisitions and management, human capital processes, financial management processes and reporting, privacy compliance, and physical and cybersecurity programs.
Federal law, regulations, and government-wide guidance promulgated by the Office of Management and Budget (OMB), the Government Accountability Office (GAO), and the Department of the Treasury place numerous requirements on federal agencies, including the NCUA, regarding the management of public funds. Government-wide financial management compliance requirements address topics such as financial statement audits, improper payments, prompt payments, internal controls, and procurement audits, enterprise risk management, strategic planning, and public reporting of financial and other information.
There are numerous laws, regulations, and required guidance concerning information technology used by the federal government. Many of the requirements cover information technology security, such as the Federal Information Security Modernization Act. Other requirements cover records management, paperwork reduction, acquisition, cybersecurity spending, accessible technology, and continuity.
Like other federal agencies, the NCUA is subject to an array of human capital-related laws, regulations, and other mandatory guidance issued by the Office of Personnel Management (OPM), the Equal Employment Opportunity Commission, and OMB. Human capital compliance requirements include procedures related to hiring, management engagement with public unions and collective bargaining, employee discipline and removal procedures, required training for supervisors and employees, employee work-life and benefits programs, equal employment opportunity and required diversity and inclusion programs, and storage and retention of human resource records. The NCUA is also required by law to maintain comparability with other federal bank regulatory agencies when setting and adjusting the total amount of compensation and benefits for employees.
The NCUA's security posture is driven by numerous legal and regulatory requirements covering the full range of security functions. The NCUA is
The NCUA and its operations are subject to review by independent auditors. Like any other U.S. employer, the NCUA may be audited by the Internal Revenue Service for compliance with relevant tax laws and regulations. Similarly, the NCUA is subject to audit for compliance with government-wide requirements in areas like records management (National Archives and Records Administration) and delegated personnel authorities (OPM).
Other oversight audits include the NCUA's financial statement audits, which must be conducted for all four of its funds on both an operating (calendar year) and reporting year (federal fiscal year) basis. In addition, to help ensure the agency's cybersecurity, the law subjects the NCUA to annual audits of its information technology systems and data management practices, as specified in the Federal Information Security Modernization Act.
The Government Accountability Office and the NCUA Office of Inspector General (OIG) are statutorily authorized to oversee and audit the performance of NCUA's programs in order to identify and attempt to prevent waste, fraud, and abuse of public resources. Further, and in addition to programmatic audits that the OIG conducts each year, the NCUA OIG formally reviews all material losses to the National Credit Union Share Insurance Fund.
The NCUA also has other general compliance activities that cross numerous offices and add to the NCUA's budget. For example, the NCUA is also required to comply with the Privacy Act, the Freedom of Information Act, the Government in the Sunshine Act, multiple laws and regulations related to government ethics standards, and various reporting, training, and other requirements set forth by the Federal Credit Union Act and other statutes. Additionally, the Dodd-Frank Wall Street Reform and Consumer Protection Act established requirements for the NCUA to administer and periodically report on various diversity-related matters at the agency and within the credit union system.
The proposed 2024-2025 budget includes funding for the NCUA to increase staffing in critical areas necessary to operate as an effective federal financial regulator capable of addressing emerging issues and responding to changes in economic conditions that may impact the credit union system.
The percentage of insured shares in credit unions with composite CAMELS ratings 1 and 2 has been in decline since December 2021.
The NCUA is seeing rising levels of interest rate and liquidity risk within the system. There has been an increase in compliance and fair lending concerns as well. There is also the potential for increased credit risk, especially among families with increasingly stressed household budgets and the post-pandemic uncertainties in the commercial real estate market. These risks can play out in rising delinquency rates for various loan types, including auto loans and credit cards.
The NCUA must have the necessary resources to continue to monitor credit union performance and mitigate risks through the examination process, offsite monitoring, and tailored supervision, consistent with its mission.
The NCUA employees are the agency's most valuable resource for achieving its mission, and the agency is committed to a workforce with integrity, accountability, transparency, inclusivity, and proficiency.
The proposed 2024-2025 budget includes investments across a range of agency priorities, including:
• Ensuring robust cybersecurity in the credit union system and at the agency.
• Recalibrating examination and supervisory oversight over credit unions with assets between $10 billion and $15 billion to reflect risks.
• Adding new regional specialist examiners dedicated to areas of emerging complexity and risk within the credit union system such as electronic payment systems, consumer compliance, and Bank Secrecy Act (BSA) compliance.
• Improving financial inclusion and access through the NCUA's Advancing Communities through Credit, Education, Stability, and Support initiative.
• Providing program and staff resources to increase assistance to small credit unions and credit unions designated as minority depository institutions (MDIs).
• Right-sizing the NCUA's examination of credit unions' compliance with consumer financial protection laws and regulations.
• Investing in information technology systems and infrastructure to bolster the agency's supervisory capabilities.
The efficiency and effectiveness of the agency's workforce depends upon the availability of modern analytical tools and the resiliency of the NCUA's information technology systems. The NCUA is committed to implementing its new technology responsibly and delivering secure, reliable, and innovative solutions. The investments funded in the NCUA's Capital Budget will provide the tools and technology the workforce needs to achieve the NCUA mission.
The NCUA's cybersecurity program focuses on two main efforts: supervision of credit union cybersecurity programs and protection of the agency's systems, assets, data, and mission capabilities.
Cyberattacks continue to pose significant risks to all organizations. Because of continued attacks on the nation's financial sector and the broader national critical infrastructure, the NCUA places credit union cybersecurity as a top enterprise and supervisory priority.
The NCUA engages in interagency cybersecurity preparedness as a member of the Federal Financial Institutions Examination Council (FFIEC) and of the Financial and Banking Information Infrastructure Committee. The NCUA monitors cyber threats identified by federal and non-federal sources and shares relevant information about them with the credit union industry and financial sector partners.
The NCUA maintains a team within the Office of Examination and Insurance dedicated to developing and maintaining supervisory policies, procedures, and tools and examiner training for cybersecurity. The regions and the Office of National Examinations and Supervision employ 30 highly trained regional information security specialists for information security examinations and supervision of credit unions.
In 2023, the agency deployed an updated information security examination program. All credit unions will periodically receive an information security examination as part of the agency's new Information Security Examination Program (ISEP). The ISEP uses a risk-focused approach to examine credit unions' information security, providing examiners flexibility to focus on areas of material current or potential risk relevant to each credit union's unique business model. The objectives of an information security examination include:
• Evaluating management's ability to recognize, assess, monitor, and manage information systems and technology-related risks.
• Assessing whether the credit union has sufficient expertise to adequately plan, direct, and manage information systems and technology operations.
• Determining whether the board of directors has adopted and implemented adequate information systems and technology-related policies and procedures.
• Evaluating the adequacy of internal information systems and technology controls and oversight to safeguard member information.
The NCUA built and maintains the Automated Cybersecurity Evaluation Toolbox (ACET) to help credit unions voluntarily assess their level of cybersecurity preparedness. The tool incorporates appropriate cybersecurity standards and practices established for financial institutions. The tool maps each of its declarative statements to the practices found in the
Enhanced and continuing examiner training related to information security and evolving cyber risks is planned for 2024.
The NCUA's approach to agency cybersecurity is based on requirements established by federal statute such as the Federal Information Security Management and Federal Information Security Modernization Acts, and government-wide policy such as the National Institute of Standards and Technology's Cybersecurity Framework, and Executive Order 14028,
In 2021, a cross-agency working group at the NCUA conducted an internal review to determine the appropriate level of specialist positions required to ensure compliance with the Bank Secrecy Act (BSA) and consumer financial protection laws and regulations. The review evaluated staffing needs for three potential regional specialist groups in the areas of electronic payment systems, consumer compliance, and the BSA. Unlike other specialist areas where credit union asset size is a reasonable basis for allocating supervisory resources, BSA and consumer compliance risks are not necessarily concentrated in a particular asset group.
The 2021 review recommended that the agency develop BSA and consumer compliance specialist programs. The proposed 2024 budget supports the second phase of this effort by adding 27 new regional examination staff—including specialists and supervisory positions. These specialist positions are offset by a reduction of general examiner positions spread across each of the NCUA's three regions.
Starting in January 2023, federally insured credit unions with less than $15 billion in total assets generally are supervised by the NCUA regional office corresponding to their headquarters location, while ONES continues supervising federally insured credit unions with $15 billion or more in total assets. Supervising regional large credit unions with between $10 billion and $15 billion in assets requires additional resources for the regions. Therefore, the proposed 2024 budget includes the equivalent of five additional examiner positions to account for the enhanced examination and supervision needs for these institutions related to size, scale, and scope.
Small credit unions with less than $100 million in assets and MDIs are uniquely positioned to improve financial inclusion by offering their communities access to safe and affordable credit and other services. The NCUA's Small Credit Union and MDI Support Program is designed to support and preserve these credit unions. This program provides dedicated resource hours for field staff to conduct this important work, and the proposed 2024 budget continues to support this important effort.
Program assistance focuses on identifying available resources, providing training and guidance, and supporting credit union management in their efforts to address operational matters. Additional benefits of the program are expected to include:
• Building greater awareness of the unique needs of small credit unions and MDIs and their role serving underserved communities.
• Expanding opportunities for these credit unions to receive support through NCUA grants, training, and other initiatives.
• Furthering partnerships with organizations and industry mentors that can support small credit unions and MDIs.
Fair and equitable access to credit is vital to the credit union system and members of credit unions. The NCUA uses onsite examinations, supervision contacts, and data analysis to ensure credit unions comply with consumer financial protection and fair lending laws and regulations. The proposed 2024 budget includes 13 additional regional consumer compliance specialists and an increase in examination time for consumer
Credit unions are an important part of the financial services industry and can play a key role in helping families achieve financial freedom by building generational wealth, helping entrepreneurs to get their small businesses off the ground, and helping to create jobs and strengthen communities. The NCUA has a role to play in making sure that credit unions can support overlooked or underserved areas.
The NCUA will build on the work done in 2023 to better understand credit union challenges and opportunities in providing fair and affordable financial products to minority, unbanked, and underbanked households. The Innovation and Access and CURE teams plan to use this information to help credit unions understand the challenges in communities with limited financial services and to enhance and facilitate the Small Credit Union and MDI Support program. The NCUA will continue its active engagement with credit union industry leaders and stakeholders to help new, small, low-income-designated, and MDI credit unions to grow and prosper.
The staff draft budget proposes a new Office of the Executive Secretary, which is a common function in many other federal agencies. The new office will centralize responsibility for the NCUA's policy review and decision-making processes, coordinate the clearance and submission of all policy documents to the Chairman and the NCUA Board, as appropriate, for review and approval, and facilitate discussions between the NCUA's program offices to align appropriate policies, among other things. Policy documents include regulations, recommendation memos, action memos, briefing memos, responses to correspondence, reports to Congress, and other policy documents. Appendix A includes a separate table illustrating the budget for the proposed Office of the Executive Secretary.
The NCUA Operating Budget provides the resources required for the agency to conduct activities prescribed by the Federal Credit Union Act. These mandates include: (1) chartering new federal credit unions; (2) approving field of membership applications of federal credit unions; (3) promulgating regulations and providing guidance; (4) performing regulatory compliance and safety and soundness examinations; (5) implementing and administering enforcement actions, such as prohibition orders, orders to cease and desist, orders of conservatorship and orders of liquidation; and (6) administering the National Credit Union Share Insurance Fund. The NCUA must also implement mandates required by other statutes including those related to BSA compliance, consumer financial protection, and diversity, equity, and inclusion.
There are five major expenditure categories in the Operating Budget. This section explains how these expenditures support the NCUA's operations and presents a transparent overview of the Operating Budget.
Pay and benefits increase by $26.2 million in 2024, or 9.8 percent compared to 2023, for a total of $293.3 million. Pay and benefits costs make up approximately 76.7 percent of the annual NCUA Operating Budget. There are four primary drivers of increased costs in 2024 for the pay and benefits category:
• Merit and locality pay increases for the NCUA's employees are paid in accordance with the agency's Collective Bargaining Agreement (CBA) and its merit-based pay system.
• Contributions for employee retirement to the Federal Employee Retirement System (FERS), which are set by OPM based on actuarial estimates and cannot be negotiated or changed by the NCUA. The mandatory FERS contribution rate increases total NCUA benefits costs by 4.9 percent in 2024 compared to 2023. OPM's current assumptions for actuarial valuation of FERS remain unchanged in 2024 but remain a significant cost driver for the agency's pay and benefits growth. Because the NCUA must contribute 18.4 percent of employee salaries to the retirement fund in 2024, the estimated impact on the NCUA budget is an increase of approximately $4.0 million in mandatory payments.
• Contributions for employee health insurance are also set by OPM and
• The employee salary and benefits category also includes costs associated with other mandatory employer contributions such as Social Security, Medicare, transportation subsidies, unemployment, and workers' compensation. The limit on employee earnings subject to Social Security taxes increased in 2024 and applies to all employers in the United States. The projected additional employer Social Security contributions that result from this increase account for approximately 3 percent of the total adjustment to employee salaries.
Attracting a well-qualified workforce requires the agency to pay competitive salaries. In 2024, the NCUA's compensation levels will continue to “maintain comparability with other federal bank regulatory agencies” as required by the Federal Credit Union Act.
The pay and benefits budget includes all employee pay raises for 2024, such as merit and locality increases consistent with the CBA in place for 2023, and those for promotions, reassignments, and other changes, as described below. Consistent with other federal pay systems, the NCUA's compensation includes base pay and locality pay components.
The proposed 2024 Operating Budget supports a total agency staffing level of 1,248 positions.
The proposed 2024-2025 budget includes funding for the NCUA to increase permanent staffing in critical areas necessary to operate more effectively and address emerging issues. The staffing levels proposed for 2024 also reflect the resource requirements that support the NCUA's continued efforts to ensure its examination processes keep pace with the growing scale and complexity of the credit union system while the agency enhances the efficiency and effectiveness of its supervisory efforts.
The chart illustrates the NCUA's staffing levels in recent years.
The proposed changes for the NCUA's 2024 staffing level include:
• Adding 27 specialist examiner and specialist supervisor positions to the NCUA regional staff, 20 of which the
• Reducing the number of generalist examiners by a net of 22 positions across the NCUA's three regional offices. This adjustment includes an increase to examination and supervision time that is the equivalent of five examiner positions for the regional workload associated with overseeing credit unions with between $10 billion and $15 billion in assets.
• Creating a new Office of the Executive Secretary with two dedicated staff positions authorized for 2024 and a third position for 2025. This office will centralize responsibility for coordinating the review of documents, related decision-making processes, and the clearance and submission of all documents to the NCUA Board members, as appropriate.
• Increasing the staff in the Office of the Ombudsman by one position. The Office of the Ombudsman was created as a separate office by the NCUA Board in the 2023 budget and an additional Associate Ombudsman position was approved for 2024 in that document.
• Adding two Deputy Director positions: one in the Office of Business Innovation and one in the Office of the Chief Ethics Counsel.
• Adding one new writer-editor position in the Office of External Affairs and Communications.
• Funding 17 positions previously unfunded but authorized within the total NCUA staffing plan. These positions include: four in the Office of National Examinations and Supervision, three in the Office of Examination and Insurance, two in the Office of Business Innovation, two in the Office of Credit Union Resources and Expansion, two in the Office of Human Resources, one in the Office of the Chief Financial Officer, one in the Office of the Chief Information Officer, one in the Office of Consumer Financial Protection, and one in AMAC.
The proposed 2025 budget for pay and benefits is estimated at $308.2 million, a $14.9 million increase from the 2024 level. Included within this total is the full-year cost impact of new positions proposed for 2024 (approximately $0.8 million), $0.2 million for three new positions (one in the Office of the Executive Secretary, one in the Office of General Counsel, and one in the Office of Continuity and Security Management), the estimated merit and locality pay increases consistent with the recent pay inflation (approximately $10.6 million), and associated increases in benefits for all employees (approximately $3.3 million).
The proposed travel budget decreases slightly by $5,000 in 2024 when compared to 2023, for a total of $22.0 million. The travel cost category includes expenses for employees' airfare, lodging, meals, auto rentals, reimbursements for privately owned vehicle usage, and other travel-related expenses. These are necessary expenses for examiners' onsite work in credit unions. Close to two-thirds of the NCUA's workforce is comprised of field staff who spend part of their time traveling to conduct the examination and supervision program. The NCUA staff also travel for routine and specialized training and other work assignments. In 2024, the NCUA expects its staff will participate in a combination of in-person and virtual training to help control travel expenses.
During the COVID-19 pandemic, the agency and its employees transitioned to an offsite examination posture, developing new procedures and processes to continue examination and supervisory work. In 2024, the NCUA continues the process of conducting portions of examinations offsite, which is expected to constrain the growth of future travel budgets. Despite significant inflationary cost growth in travel-related expenses such as hotel charges, airfares, and car rentals, the 2024 budget for travel does not grow compared to the 2023 level, given a lower frequency of travel with more work being conducted virtually compared to pre-pandemic levels.
The proposed 2025 budget for travel is estimated to be $23.9 million, or an 8.6 percent increase compared to the 2024 level. This budget level reflects an expectation for modest travel-related cost inflation and travel to support a national training conference planned for 2025.
The proposed budget for rent, communications, and utilities increases by $0.8 million in 2024, or 13 percent compared to 2023, for a budget of $7.1 million. The 2024 increase is driven almost entirely by the costs required to stand up new disaster recovery and continuity of operations sites because the previous location for these required functions will be decommissioned at the end of 2023.
Funding in this budget category pays for facilities costs, telecommunications services, data storage, and information technology network support. Telecommunications charges include leased data lines, domestic and international voice lines (including mobile), and other network charges. Telecommunications costs also include the circuits and any associated usage fees for providing voice or data telecommunications service between data centers, office locations, the internet, and any customer, supplier, or partner.
The rent, communications, and utilities budget category also finances the cost of the office utilities, meeting space rental for offsite events, and postage expenses. Lease costs for the Southern and Western Region office buildings are included in this category, and the total for both of these leases is approximately $1.3 million in 2024. The annual utility costs for the headquarters and regional offices are estimated at $461,000 for 2024.
The proposed 2025 budget for the rent, communications, and utilities category is $7.5 million, or a 5.6 percent increase compared to 2024.
Administrative expenses a proposed increase of $0.3 million in 2024, or 4.4 percent compared to 2023, for a budget of $7.6 million. The increase to the administrative expenses budget category largely results from inflationary cost increases for supplies, materials, printing, and subscription expenses expected in 2024.
Recurring costs in the administrative expenses category include the annual reimbursements to the FFIEC, employee relocation expenses, recruitment and advertising expenses, shipping, printing, subscriptions, examiner training and meeting supplies, office furniture, and employee supplies and materials. As part of the FFIEC, the NCUA shares in costs for certain joint actions and services that affect the financial services industry. The proposed 2024 draft budget includes an estimated increase of $340,000 to the FFIEC annual reimbursement. Any revisions to this initial estimated budget will be included in the NCUA's final 2024 budget.
Within administrative expenses, the proposed 2024 budget includes $1.3 million for employee relocations, which is consistent with the 2023 funding levels. Relocation costs are paid by the NCUA to employees who are competitively selected for a promotion or new job within the agency in a different geographic area than where they live.
The proposed 2025 budget for administrative expenses is $7.7 million, or a 1.6 percent increase from the level proposed in the 2024 budget.
The proposed budget for contracted services increases by $10.7 million in 2024, or 25.7 percent compared to 2023, for a total budget of $52.1 million.
Contracted services funding pays for products and services acquired in the commercial marketplace and includes critical mission support services such as information technology hardware and software support, accounting and auditing services, and specialized subject matter expertise. The majority of funding in the contracted services category supports the NCUA's supervision framework, including tools used to identify and address risk concerns such as interest rate risk, credit risk, and industry concentration risk. Further, funding within contracted services is used to address new and evolving operational risks such as cybersecurity threats.
Acquiring specific expertise or services from contract providers is often the most cost-effective way for the NCUA to accomplish its mission. Such services include critical mission support such as information technology equipment and software development, accounting and auditing services, and specialized subject matter expertise that enable staff to focus on executing core mission requirements.
Growth in the contracted services budget category results primarily from new operations and maintenance costs associated with capital investments. Other costs include core agency business operation systems such as accounting and payroll processing, and various recurring costs, as described in the following seven major categories:
• Information Technology Operations and Maintenance (48.1 percent of contracted services)
○ Information technology network support services and help desk support
○ Contractor program and web support and network and equipment maintenance services
○ Administration of software products such as Microsoft Office, SharePoint, and audio-visual services
• Administrative Support and Other Services (16.7 percent of contracted services)
○ Examination and supervision program support
○ Technical support for examination and cybersecurity training programs
○ Equipment maintenance services
○ Legal services and other expert consulting support
○ Other administrative mission support services for the NCUA central office
• Information Technology Security (15.0 percent of contracted services)
○ Enhanced secure data storage and operations
○ Information security programs
○ Security system assessment services
• Accounting, Procurement, Payroll, and Human Resources Systems (6.5 percent of contracted services)
○ Accounting and procurement systems and support
○ Human resources, payroll, and employee services
○ Equal employment opportunity and diversity programs
• Training (5.3 percent of contracted services)
○ Technical and specialized training and professional development for staff
• Building Operations, Maintenance, and Security (4.8 percent of contracted services)
○ Headquarters facility operations and maintenance
○ Building security and continuity programs
○ Personnel security and administrative programs
• Audit and Financial Management Support (3.5 percent of contracted services)
○ Annual audit support services
○ Material loss reviews
○ Investigation support services
○ Financial management support services
In addition, the Office of the Chief Financial Officer projects that the agency will have a smaller surplus at the end of 2023 than in past years. Since 2021, the NCUA has used unspent budget amounts from previous years to reduce its budget levels in the following year. Of the total $10.7 million increase in contracted services for 2024, approximately $5.0 million of the increase results from a lower surplus projection than the amount assumed for 2023. The NCUA estimates that the agency will end 2023 having underspent the Board-approved budgets (current and prior years) by approximately $18.0 million. The proposed 2024 budget uses the $18.0 million projected surplus to offset the costs of planned contracted services spending in 2024, reducing the agency's overall 2024 budget by the same amount. Therefore, the total planned amount for contracted services in 2024 is approximately $70.1 million, an increase of $5.5 million, or 8.4 percent compared to the total 2023 spending level.
The following pie chart illustrates the breakout of the seven categories for the total proposed 2024 contracted services budget of $70.1 million, of which $18.0 million is funded from prior year available balances.
Major programs within the contracted services category include:
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Contracted service providers, in partnership with the NCUA subject matter experts, will develop and design training classes for examiners and continue the ongoing review of the NCUA's examiner course curriculum. In addition, the NCUA partners with OPM to develop and certify principal examiner assessments that reflect current regulations and examination processes. The NCUA's Learning Management System will continue to be updated to include a Career Resource Center. Additionally, contracted service providers and central office staff will continue providing organizational development, leadership development programs, and teambuilding training.
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•
•
A significant share of the budget for contracted services finances ongoing information technology infrastructure support for the agency. The 2024 budget includes the fourth year of funding for operations and maintenance of the MERIT system, which replaced the legacy Automated Integrated Regulatory Examination System (AIRES) in 2021. Several of the NCUA's other core information technology systems and processes also require additional contract support in 2024, which results in increased costs for contracted services, as described below.
Within the budget for the Office of Chief Information Officer, an additional $3.5 million compared to the 2023 budget level is required for:
• Cybersecurity capabilities and implementing the provisions of Executive Order 14028,
• Information technology infrastructure services and operations and maintenance labor support for the new MERIT system and NCUA legacy systems.
• Application tools that support the new MERIT system and other mission critical and business applications.
Within the Office of Human Resources, the contracted services budget increases by $1.3 million compared to the 2023 budget level, primarily for additional resources to support the reasonable accommodation needs and services for current and potential new employees.
The Office of Minority and Women Inclusion's (OMWI) contract budget increases by $258,000 compared to the 2023 budget level. In 2024, these increased funds will support development of a survey administered by a third-party for credit unions to self-assess their current diversity and inclusion practices.
Within the Office of Business Innovation, the contracted services budget increases by $208,078 compared
The Asset Management Assistance Center's contracted services budget increases by $149,000 compared to the 2023 budget level. These funds will support the development of tools to automate various business processes and connect AMAC data with systems.
Within the Office of General Counsel, the contracted services budget increases by $65,000 compared to the 2023 budget level. The increase will support market research in 2024 for an appropriate e-Discovery solution to ensure the agency sufficiently meets its legal obligations to respond to electronic discovery requests.
The proposed contracted services budget for 2025 is $71.6 million. Excluding the $18.0 million carryover in 2024, this is a net increase of $1.4 million, or approximately 2.0 percent.
Annually, the NCUA carries out a rigorous review process to identify the agency's needs for information technology, facility improvements and repairs, and other multi-year capital investments. The NCUA staff review the agency's inventory of information technology systems, information technology hardware, and owned facilities and equipment to determine what requires repair, major renovation, or replacement. The staff then make recommendations for prioritized investments to the NCUA Board.
The proposed 2024 Capital Budget is $7.3 million. The Capital Budget funds the NCUA's long-term investments. The 2024 Capital Budget provides $6.8 million for information technology development projects and investments and $477,000 for central office building minor construction and maintenance projects.
Information technology systems and hardware require significant capital expenditures for modern organizations. The 2024 Capital Budget's highest priorities include continuing investments to bolster the NCUA's cybersecurity posture and enable the agency to comply with Executive Order 14028 along with enhancements to the MERIT platform.
The budget also supports ongoing efforts to modernize the NCUA's information technology infrastructure and applications through the Information Technology Infrastructure, Platform and Security Refresh project, and makes investments to improve the agency's management and analysis of data through the Data Collection and Sharing Solution project. Finally, the 2024 Capital Budget supports two multi-year projects: one to develop a personnel security system in compliance with the Trusted Workforce 2.0 directive from the Office of the Director of National Intelligence and OPM and another to use technology to streamline and automate NCUA processes for reviewing field of membership and new charter requests from credit unions and organizing groups.
Routine repairs and lifecycle-driven property renovations are also necessary to properly maintain investments in the NCUA-owned properties. Each year the NCUA assesses the physical condition of the agency's properties to determine the need for essential repairs, replacement of building systems that have reached the end of their engineered lives, or renovations required to support changes in the agency's organizational structure or address revisions to building standards and codes. The 2024 Capital Budget includes funding for the costs associated with routine repairs, maintenance, and lifecycle-driven property renovations for the agency's Alexandria headquarters. Following an assessment and recommendations presented to the Board, a decision was made to sell the NCUA-owned office building in Austin. Because the specific schedule for selling the building is still to be determined, proceeds from this transaction are not factored into the 2024 budget.
Detailed descriptions of all proposed 2024 capital projects, including a discussion of how each project helps the agency achieve its goals and objectives, are provided in Appendix B.
The purpose of this capital investment is to ensure the NCUA complies with Executive Order 14028,
This capital project will replace outdated or end-of-life network and platform hardware, as well as continue efforts to prepare the NCUA for cloud computing adoption. This investment helps ensure business continuity and efficient operations by improving system availability and stability. Proposed projects for 2024 include refreshing hardware and software, and the acquisition costs associated with the agency's new disaster recovery site.
This capital investment supports the development of initial requirements and scoping to design an external facing portal for credit unions and organizing groups to submit their field of membership and new charter requests.
The purpose of this project is to develop a new personnel security management system for NCUA in compliance with the Trusted Workforce 2.0 directive promulgated by the Office of the Director of National Intelligence (ODNI) and OPM. This new system will centralize personnel security case management and serve as a repository for agencywide onboarding/offboarding actions.
Investments in the MERIT platform in 2024 will enhance data processing capacity, improve user efficiency and productivity, and automate data import and error checking processes. Capital investments will support MERIT improvements that will allow examiners to import data from the Information Security Examination (ISE) Toolbox, provide a centralized mechanism for regional and central office staff to track and access credit union administrative action records, and automate the process for state supervisory authority/credit union access requests.
This capital investment will support NCUA adoption of the Microsoft Power Platform (MPP) line of business intelligence and process automation tools. The budget funds the acquisition of professional services to assist in developing a governance plan to monitor and manage the usage of MPP tools across the NCUA while providing enhanced internal agency customer support.
This multi-year project will assist NCUA examination staff by streamlining business process related to case, document, and content management to improve efficiency and decrease data entry errors. During 2023, a prototype was developed that automated current business workflows and streamlined data collection and sharing. The proposed 2024 Capital Budget supports pilot testing of the prototype among a subset of offices, integrating lessons learned into refined business requirements, drafting user guides and training materials, and conducting training for end users.
This project provides for ongoing improvements to the NCUA's websites, such as an improved user experience and general maintenance needs. In addition, the NCUA will develop a gated content solution for specific audiences to provide a level of privacy and security for accessing information, such as conference materials, by requiring a login and password similar to other remote and virtual conference systems.
The proposed 2024 budget supports the NCUA's multi-year headquarters building improvement plan that identifies projects that can be completed incrementally, prioritizing the replacement of health and safety infrastructure such as the fire suppression system. The building is 30 years old, and many original components require replacement. The ongoing multi-year approach recognizes the critical building management and maintenance needs while reducing the potential budgetary impact of such projects in a single budget year.
The Share Insurance Fund Administrative Expenses Budget funds direct costs associated with authorized Share Insurance Fund activities.
The Share Insurance Fund Administrative Expenses Budget also pays for costs associated with the corporate resolution program and related NCUA Guaranteed Notes (NGN) program. On June 14, 2021, the last outstanding NGN Trust matured. Given the significantly reduced size of the legacy asset portfolio in the corporate asset management estates, the proposed 2024 budget for the corporate resolution program continues to decrease compared to the 2023 funding levels.
The proposed 2024 Share Insurance Fund Administrative Expenses Budget is $5.1 million, which is $0.2 million, or 3.6 percent, higher than 2023.
The proposed 2024 budget increase is primarily driven by an increase in projected costs for contracts needed to support the analysis of large credit unions, costs of AMAC activities, and inflationary growth in the cost of audit support. The proposed 2024 Share Insurance Fund Administrative Expenses Budget includes:
• $2.2 million for operating and maintenance costs of the Asset and Liabilities Management system, which allows the NCUA to build internal analytical capabilities to conduct supervisory stress testing analyses and to perform other quantitative risk assessments of large credit unions.
• $0.3 million for certain insurance-related activities and expenses of AMAC, such as consulting expenses necessary to avoid or attempt to prevent a liquidation or conservatorship and staff travel for consultation on complex or problem cases.
• $1.0 million for state examiner travel to NCUA-sponsored training classes and $0.2 million to ensure that state supervisory authorities can securely and efficiently access NCUA applications and the NCUA's MERIT system for state examination and supervision activities. The 2023 budget included similar amounts for these activities.
• $0.9 million for financial reporting, including the annual financial audit and for contractor support to ensure effective internal controls for the fund.
• $0.3 million for corporate resolution program legacy asset waterfall models and $0.1 million for valuation analysis support and data. These budget items decreased by 59.2 percent from 2022 to 2023. As the remaining legacy assets are sold and the program comes to a close, the associated budget continues to decrease and falls by 31.7 percent from 2023 to 2024.
The proposed 2025 budget supports similar workload and resources for the Share Insurance Fund, which at $4.7 million is $0.4 million lower than the proposed 2024 level. With the anticipated wind-down of the program in 2024 (subject to the status of ongoing litigation), there is no corporate
The NCUA incurs various expenses to achieve its statutory mission, including those involved in examining and supervising federally insured credit unions. The NCUA Board adopts an Operating Budget, a Capital Budget, and a Share Insurance Fund Administrative Expenses Budget each year to fund the majority of the costs to operate the agency.
The Federal Credit Union Act authorizes two primary sources to fund the Operating Budget:
1. Requisitions from the Share Insurance Fund “for such administrative and other expenses incurred in carrying out the purposes of [Title II of the Act] as [the Board] may determine to be proper,”
2. “[F]ees and assessments (including income earned on insurance deposits) levied on insured credit unions under [the Act].”
Taken together, these authorities effectively require the Board to determine which expenses are appropriately paid from each source while giving the Board broad discretion in allocating expenses.
In 1972, the Government Accountability Office recommended the NCUA adopt a method for allocating Operating Budget costs — that is, the portion of the NCUA's budget funded by requisitions from the Share Insurance Fund and the portion covered by Operating Fees paid by federal credit unions.
The NCUA uses the OTR methodology to allocate agency expenses between these two primary funding sources. Specifically, the OTR is the formula the NCUA uses to allocate insurance-related expenses to the Share Insurance Fund under Title II of the Act. Almost all other operating expenses are funded through collecting annual Operating Fees paid by federal credit unions.
Two statutory provisions directly limit the Board's discretion with respect to Share Insurance Fund requisitions for the NCUA's Operating Budget and, hence, the OTR. First, expenses funded from the Share Insurance Fund must carry out the purposes of Title II of the Act, which relate to share insurance.
The NCUA conducts a comprehensive workload analysis annually. This analysis estimates the amount of time necessary to conduct examinations and supervise federally insured credit unions in order to carry out the NCUA's dual mission as insurer and regulator. This analysis starts with a field-level review of every federally insured credit union to estimate the number of workload hours needed for the year. These estimates are informed by the overall parameters of the NCUA's examination program, as most recently updated by the Exam Flexibility Initiative approved by the Board.
There have not been any major changes to the parameters of the examination program since the current OTR methodology went into effect.
The NCUA Board approved the current methodology for calculating the OTR at its November 2017 open meeting.
Based on the Board-approved methodology and the proposed budget, the OTR for 2024 is estimated to be 61.8 percent, 60 basis points lower than for 2023.
To determine the funds transferred from the Share Insurance Fund to the Operating Fund, the OTR is applied to actual expenses incurred each month. Therefore, the rate calculated by the OTR formula is multiplied by each month's actual operating expenditures and the product of that calculation is transferred from the Share Insurance Fund to the Operating Fund. This monthly reconciliation to actual operating expenditures captures the variance between actual and budgeted amounts, so when the NCUA's expenditures are less than budgeted, the amount charged to the Share Insurance Fund is also less — and those lower expenditures benefit both federally chartered and federally insured, state-chartered credit unions.
The primary driver of the change in the estimated 2024 OTR is a decline in state credit union examination and supervision hours in the proposed budget for 2024. This reduction in state examination and supervision hours causes the weighted allocation of hours applied to NCUA in Principle 2 of the OTR methodology of the calculation to also decline.
The following chart illustrates the share of the proposed 2024 Operating Budget that would be paid by federal credit unions (69.2%) and federally insured, state-chartered credit unions (30.8%).
The Board delegated authority to the Chief Financial Officer to administer the methodology approved by the Board for calculating the Operating Fee and to set the fee schedule as calculated per the approved methodology. In 2020, the Board approved and published in the
To determine the annual Operating Fee assessed on natural person federal credit unions using the current methodology, the NCUA first calculates the average of total assets reported in the preceding four calendar quarters available at the time of the calculation, net of any reported Paycheck Protection Program loans. Credit unions with assets less than $1 million are not assessed an Operating Fee and their assets are therefore excluded from this calculation. If the Board approves increasing the threshold to exempt more credit unions from paying the Operating Fee, the assets of those credit unions would be similarly excluded.
Based on the Board-approved Operating Fee methodology, which is summarized in the following tables, the share of the proposed 2024 budget funded by the Operating Fee is $140.7 million. This equates to 0.01288 percent of the actual average of natural person federal credit union assets for the four calendar quarters ending on June 30, 2023. The calculated Operating Fee rate for 2024, using the current $1 million exemption threshold, increases 19.59 percent compared to the rate in 2023. If the exemption threshold were raised to $2 million, the calculated Operating Fee rate for 2024 would increase 19.61 percent compared to the rate in 2023, and a difference of two basis points compared to the fee growth at the $1 million exemption level. Both of these computations are shown in the table on the following page.
As part of the Board-approved Operating Fee methodology, the NCUA can adjust the share of the budget funded by the Operating Fee based on an analysis of the agency's future cash flow requirements compared to past years' collections that were not spent as planned. Any projected surplus cash from past years' fee collections not required to finance agency operations can accordingly be used to lower the Operating Fee share of the proposed budget. Because such cash surpluses result from past years' Operating Fee collections, they do not offset the portion of the budget funded by the OTR. As the final 2024-2025 budget is prepared for consideration by the NCUA Board, the Chief Financial Officer will evaluate the agency's cash position and make a recommendation about any surplus cash that can be credited to the operating fee.
To set the assessment scale for 2024, total growth in natural person federal credit union assets is calculated as the change between the average of the four most-current quarters (that is, the third and fourth quarters of 2022 and the first two quarters of 2023) and the previous four quarters (that is, the third and fourth quarters of 2021 and the first two quarters of 2022), which is calculated as 4.6 percent. Asset level dividing points are likewise increased by this same growth rate in order to preserve the same relative relationship of the scale to the applicable asset base.
To illustrate the rate for each asset tier for which Operating Fees are charged, the tables below show the effect of the average 19.59 percent increase in the Operating Fee for natural person federal credit unions, using the current $1 million exemption threshold. The tables also show the effect of the average 19.61 percent increase in the Operating Fee for natural person federal credit unions using the $2 million exemption threshold. The corporate federal credit union rate scale remains unchanged from prior years.
The table below shows the combined total of the 2024 Operating and Capital Budgets, organized by the NCUA's three current strategic goals.
Nuclear Regulatory Commission.
Environmental assessment and finding of no significant impact; issuance.
The U.S. Nuclear Regulatory Commission (NRC) is reviewing the amendment submitted by the Global Nuclear Fuel—Americas (GNF-A) of Special Nuclear Materials (SNM) License SNM-1097 for the Wilmington
The EA and FONSI referenced in this document are available on November 1, 2023.
Please refer to Docket ID NRC-2023-0179 when contacting the NRC about the availability of information regarding this document. You may obtain publicly available information related to this document using any of the following methods:
•
•
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Jean Trefethen, Office of Nuclear Material Safety and Safeguards, U.S. Nuclear Regulatory Commission, Washington, DC 20555-0001; telephone: 301-415-0867; email:
The NRC is reviewing a license amendment request (LAR) for license SNM-1097 for the GNF-A nuclear fuel fabrication facility located near Wilmington, North Carolina (ADAMS Accession No. ML22175A070). The licensee, GNF-A, is requesting authorization to possess and use special nuclear material to fabricate fuel using uranium enriched with up to 8 weight (wt) percent uranium 235 (U-235), also referred to as low enriched uranium plus.
The NRC staff has prepared a final EA as part of its review of this license amendment request in accordance with the requirements of part 51 of title 10 of the
GNF-A is requesting changes to amend license SNM-1097 for the GNF-A nuclear fuel fabrication facility to possess and use special nuclear material to fabricate fuel using uranium enriched with up to 8 wt percent U-235. The NRC has assessed the potential environmental impacts of the proposed action and the no-action alternative. The results of the NRC's environmental review can be found in the final EA (ADAMS Accession No. ML23291A150). The NRC staff performed its environmental review in accordance with the requirements in 10 CFR part 51. In conducting the environmental review, the NRC considered information in the LAR; communications with the North Carolina State Historic Preservation Office (SHPO); as well as information provided by the North Carolina State Clearinghouse.
Approval of GNF-A's proposed LAR would authorize GNF-A to possess and use U-235 enriched up to 8 percent instead of the current limit of up to 5 percent in fabrication of fuel for nuclear power production facilities. The licensee would continue to perform fuel fabrication activities inside the current buildings and would not conduct any construction or land disturbance activities associated with the proposed action. Additionally, the proposed action would not change staffing level, or the number of shipments of special nuclear material or quantity of waste generated at the site. Liquid and air effluents, from all operations are anticipated to remain below the regulatory limits in 10 CFR part 20. Therefore, the NRC staff finds that there would be no impacts to the following resources areas: land use, geology and soils, water resources, ecology, meteorology, climate, air quality, noise, transportation, visual and scenic resources, and socioeconomic resources.
As discussed in this EA, no significant radiological or non-radiological impacts are expected to result from approval of the proposed action. Occupational dose estimates associated with the proposed action are expected to be as low as reasonably achievable and within the limits identified in 10 CFR 20.1201. Approval of the proposed action is not expected to result in measurable radiation exposure to a member of the public. Approval of the LAR would not result in construction or land disturbance activities. Therefore, the NRC staff has determined that pursuant to 10 CFR 51.31, preparation of an EIS is not required for the proposed action, and pursuant to 10 CFR 51.32, a FONSI is appropriate.
Furthermore, the NRC staff determined that this LAR does not have the potential to cause effects on historic properties, assuming those were present; therefore, in accordance with 36 CFR 800.3(a)(1), no consultation is required under Section 106 of the National Historic Preservation Act. The NRC staff consulted with the North Carolina SHPO via email dated December 22, 2022, (ADAMS Accession No. ML22349A694). The North Carolina SHPO responded via email dated January 17, 2023, (ADAMS Accession No. ML23032A372), indicating that it concurred with the NRC's determination that if historic properties were present there would be no effects. The NRC staff, with the assistance of the U.S. Fish and Wildlife Service Information for Planning and Consultation project planning tool, determined that the proposed action would have “no effect” on listed species and/or critical habitat given that the proposed action does not include construction or ground-disturbing activities.
Based on its review of the proposed action in the EA, in accordance with the requirements in 10 CFR part 51, the NRC has concluded that the proposed action, amending NRC license SNM-1097 for the GNF-A nuclear fuel fabrication facility, located near Wilmington North Carolina, will not significantly affect the quality of the human environment. Therefore, the NRC has determined, pursuant to 10 CFR 51.31, that preparation of an EIS is not required for the proposed action and a FONSI is appropriate.
For the Nuclear Regulatory Commission.
Nuclear Regulatory Commission.
Appointments.
The Nuclear Regulatory Commission (NRC) has announced appointments to the NRC Performance Review Board (PRB) responsible for making recommendations on performance appraisal ratings and performance awards for NRC Senior Executives and Senior Level System employees and appointments to the NRC PRB Panel responsible for making recommendations to the appointing and awarding authorities for NRC PRB members.
November 1, 2023.
Please refer to Docket ID NRC-2023-0188 when contacting the NRC about the availability of information regarding this document. You may obtain publicly available information related to this document using any of the following methods:
•
•
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Mary A. Lamary, Secretary, Executive Resources Board, U.S. Nuclear Regulatory Commission, Washington, DC 20555-0001; telephone: 301-415-3300, email:
The following individuals appointed as members of the NRC PRB are responsible for making recommendations to the appointing and awarding authorities on performance appraisal ratings and performance awards for Senior Executives and Senior Level System employees:
The following individuals will serve as members of the NRC PRB Panel that was established to review appraisals and make recommendations to the appointing and awarding authorities for NRC PRB members:
All appointments are made pursuant to Section 4314 of Chapter 43 of Title 5 of the United States Code.
For the Nuclear Regulatory Commission.
Office of Personnel Management.
60-Day notice and request for comments.
The Office of Personnel Management (OPM), Suitability Executive Agent Programs, is notifying the general public and other federal agencies that OPM proposes to request the Office of Management and Budget (OMB) to renew a previously-approved information collection, Questionnaire for Public Trust Positions (SF 85P) and Supplemental Questionnaire for Selected Positions (SF 85P-S).
Comments are encouraged and will be accepted until January 2, 2024.
You may submit comments, identified by docket number and/or Regulatory Information Number (RIN) and title, by the following method:
All submissions received must include the agency name and docket number or RIN for this document. The general policy for comments and other submissions from members of the public is to make these submissions available for public viewing at
A copy of this ICR, with applicable supporting documentation, may be obtained by email to
As required by the Paperwork Reduction Act of 1995 (Pub. L. 104-13) as amended (44 U.S.C. chapter 35), OPM is soliciting comments for this collection (OMB No. 3206-0194). OPM is particularly interested in comments that:
1. Evaluate whether the proposed collection of information is necessary for the proper performance of functions of the agency, including whether the information will have practical utility;
2. Evaluate the accuracy of the agency's estimate of the burden of the proposed collection of information, including the validity of the methodology and assumptions used;
3. Enhance the quality, utility, and clarity of the information to be collected; and
4. Minimize the burden of the collection of information on those who are to respond, including through the use of appropriate automated, electronic, mechanical, or other technological collection techniques or other forms of information technology,
The Questionnaire for Public Trust Positions, SF 85P and Supplemental Questionnaire for Selected Positions, SF 85P-S, are information collections completed by applicants for, or incumbents of, Federal Government civilian positions, or positions in private entities performing work for the Federal Government under contract (SF 85P only). The collections are used as the basis of information for background investigations to establish that such persons are:
Suitable for employment or retention in Federal employment in a public trust position or fit for employment or retention in Federal employment in the excepted service when the duties to be performed are equivalent in degree of trust reposed in the incumbent to a public trust position;
Fit to perform work on behalf of the Federal Government pursuant to the Government contract, when the duties to be performed are equivalent in degree of trust reposed in the individual to a public trust position;
Eligible for physical and logical access to federally controlled facilities or information systems, when the duties to be performed by the individual are equivalent to the duties performed by an employee in a public trust position.
For applicants, the SF 85P and SF 85P-S are to be used only after a conditional offer of employment has been made. The SF 85P-S is supplemental to the SF 85P and is used only as approved by OPM, for certain positions such as those requiring carrying of a firearm. eApp (Electronic Application) is a web-based system application that houses the SF 85P and SF 85P-S. A variable in assessing burden hours is the nature of the electronic application. The electronic application includes branching questions and instructions which provide for a tailored collection from the respondent based on varying factors in the respondent's personal history. The burden on the respondent is reduced when the respondent's personal history is not relevant to a particular question. The question branches, or expands for additional details, only for those persons who have pertinent information to provide regarding that line of questioning. Accordingly, the burden on the respondent will vary depending on whether the respondent's personal history relates to the information collection.
OPM recommends renewal of the form without any proposed changes.
Securities and Exchange Commission.
Notice of the text of amendment to national market system plan.
The Securities and Exchange Commission (“Commission”) is publishing notice of the text of the adopted amendment to the National Market System Plan Governing the Consolidated Audit Trail (“CAT NMS Plan”) in connection with the Commission's issuance of Release No. 34-98738, “Short Position and Short Activity Reporting by Institutional Investment Managers” (“Adopting Release”), published elsewhere in this issue of the
The effective date for the amendment to the CAT NMS Plan is January 2, 2024.
Timothy M. Riley, Branch Chief; Patrice M. Pitts, Special Counsel; James R. Curley, Special Counsel; Jessica Kloss, Attorney-Advisor; Brendan McLeod, Attorney-Advisor; Roland Lindmayer, Attorney-Advisor; and Josephine Tao, Assistant Director, Office of Trading Practices, Division of Trading and Markets, Securities and Exchange Commission, 100 F Street NE, Washington, DC 20549, at (202) 551-5777.
In the Adopting Release, the Commission is adopting new 17 CFR 240.13f-2 (“Rule 13f-2”) and related Form SHO (referenced in 17 CFR 249.332) under the Securities Exchange Act of 1934 (“Exchange Act”). Rule 13f-2 requires certain institutional investment managers to report, on a monthly basis on new Form SHO, certain prescribed short position data and short activity data for certain equity securities. The Commission is not adopting the proposed amendment to the CAT NMS Plan that would have required the reporting to the Consolidated Audit Trail of “buy to cover” order marking. The Commission is adopting an amendment to the CAT
The Commission is setting a compliance date of 20 months from publication in the
Pursuant to the Exchange Act and, particularly, Sections 2, 3, 5, 6, 11A(a)(3)(B), 15, 15A, 17(a) and (b), 19, and 23(a) thereof, 15 U.S.C. 78b, 78c, 78e, 78f, 78k-1, 78
Amend Section 6.4 of the CAT NMS Plan by modifying paragraphs (d)(ii)(B) and (C) and adding paragraph (d)(ii)(D).
The revisions read as follows. Additions are
(i) No change.
(ii) No change.
(A) No change.
(1)-(3) No change.
(B) if the trade is cancelled, a cancelled trade indicator; [and]
(C) for original receipt or origination of an order, the Firm Designated ID for the relevant Customer, and in accordance with Section 6.4(d)(iv), Customer Account Information and Customer Identifying Information for the relevant Customer[.];
(D) for the original receipt or origination of an order to sell an equity security, whether the order is for a short sale effected by a market maker in connection with bona fide market making activities in the security for which the exception in Rule 203(b)(2)(iii) of Regulation SHO is claimed.
By the Commission.
U.S. Small Business Administration.
Notice.
This is a notice of an Administrative declaration of a disaster for the State of Tennessee dated 10/26/2023.
Issued on 10/26/2023.
Alan Escobar, Office of Disaster Recovery & Resilience, U.S. Small Business Administration, 409 3rd Street SW, Suite 6050, Washington, DC 20416, (202) 205-6734.
Notice is hereby given that as a result of the Administrator's disaster declaration, applications for disaster loans may be submitted online using the MySBA Loan Portal
The following areas have been determined to be adversely affected by the disaster:
The Interest Rates are:
The number assigned to this disaster for physical damage is 20034B and for economic injury is 200350.
The States which received an EIDL Declaration are Arkansas, Mississippi, Tennessee.
Social Security Administration (SSA).
Notice of a modified system of records.
In accordance with the Privacy Act of 1974, we are issuing public notice of our intent to modify an existing system of records entitled, Race and Ethnicity Collection System (60-0104), last published on August 24, 2009. This notice publishes details of the modified system as set forth below under the caption,
The system of records notice (SORN) is applicable upon its publication in today's
We invite public comment on the routine uses or other aspects of this SORN. In accordance with the Privacy Act of 1974, we are providing the public a 30-day period in which to submit comments. Therefore, please submit any comments by December 1, 2023.
The public, Office of Management and Budget (OMB), and Congress may comment on this publication by writing to the Executive Director, Office of Privacy and Disclosure, Office of the General Counsel, SSA, Room G-401 West High Rise, 6401 Security Boulevard, Baltimore, Maryland 21235-6401, or through the Federal e-Rulemaking Portal at
Elisa Vasta, Government Information Specialist, Privacy Implementation Division, Office of Privacy and Disclosure, Office of the General Counsel, SSA, Room G-401 West High Rise, 6401 Security Boulevard, Baltimore, Maryland 21235-6401, telephone: (410) 966-5855, email:
We are modifying the system of records name from “Race and Ethnicity Collection System (RECS), Social Security Administration (SSA)” to “Race and Ethnicity Collection System (RECS)” to accurately reflect the system. We are clarifying the system location to recognize that we may also maintain records in a cloud-based environment. We are updating the system manager to reflect the accurate SSA office. We are updating the authority for the maintenance of the system to include sections 205(a) and 1110 of the Social Security Act. We are clarifying the purpose of the system to reflect SSA will use the information for research and statistical purposes.
In addition, we are clarifying the categories of individuals covered by the system and the categories of records maintained in the system for easier reading. We are expanding the record source categories to include individuals who utilize our electronic enumeration processes, existing SSA system of records, 60-0058—Master Files of Social Security Number (SSN) Holders and SSN Applications, and records generated by SSA internal processes. We are revising routine use No. 3 to incorporate gender-inclusive language, in support of Executive Order 13988, Preventing and Combating Discrimination on the Basis of Gender Identity or Sexual Orientation. For routine use No. 4, we are expanding it to recognize disclosures to contractors and cooperative agreement awardees, and we are clarifying the purpose of the disclosure is for SSA program evaluation, research, and statistical reporting purposes. We are removing the list of technical requirements, but note that when we disclose under this routine use, we will still require a written agreement, which includes safeguards as we determine are appropriate and necessary.
We are clarifying the purpose for which SSA will disclose information in routine use No. 5, for consistency with language present in all SSA SORNs. We are modifying routine use Nos. 7 and 8 for easier reading. We are also adding a routine use to permit disclosures to the Centers for Medicare and Medicaid Services, if records or information were disclosed under applicable rules, regulations, and procedures in effect prior to the date of enactment for the Social Security Independence and Program Improvements Act of 1994.
Lastly, we are clarifying in the policies and practices for the storage of records that SSA will maintain records in electronic form only. We are updating the records retention and disposal schedule. We are modifying the administrative, technical, and physical safeguards for easier reading. We are modifying the record access procedures to remove references to telephone, for consistency with agency access regulations. We are modifying the notice throughout to correct miscellaneous stylistic formatting and typographical errors of the previously published notice, and to ensure the language reads consistently across multiple systems. We are republishing the entire notice for ease of reference.
In accordance with 5 U.S.C. 552a(r), we have provided a report to OMB and Congress on this modified system of records.
Race and Ethnicity Collection System (RECS), 60-0104.
Unclassified.
Social Security Administration, Office of Systems, Office of Systems Operations and Hardware Engineering, 6401 Security Boulevard, Baltimore, MD 21235-6401.
Information is also located in additional locations in connection with cloud-based services for business continuity purposes.
Social Security Administration, Deputy Commissioner for Systems, Office of Enterprise Information Systems, 6401 Security Boulevard, Baltimore, MD 21235-6401, (410) 966-5855.
Sections 205(a), 702, 704, and 1110 of the Social Security Act, as amended.
We will use information in this system for research and statistical purposes only, to help us ensure all SSA customers are treated equitably.
This system maintains information on individuals for whom we have collected race and ethnicity information.
This system maintains records on individuals including, but not limited to, SSN; race and ethnicity data in accordance with Federal standards; and an indicator code identifying data source (
We obtain information in this system from the individual to whom the record pertains; individuals who utilize our electronic enumeration processes; and an existing SSA system of records, Master Files of SSN Holders and SSN Applications, 60-0058.
We will disclose records pursuant to the following routine uses; however, we will not disclose any information defined as “return or return information” under 26 U.S.C. 6103 of the Internal Revenue Code (IRC), unless authorized by a statute, the Internal Revenue Service (IRS), or IRS regulations.
1. To the Office of the President, in response to an inquiry from that office made at the request of the subject of the record or a third party on that person's behalf.
2. To a congressional office in response to an inquiry from that office made at the request of the subject of a
3. To the Department of Justice (DOJ), a court or other tribunal, or another party before such court or tribunal when:
(a) SSA, or any component thereof;
(b) any SSA employee in their official capacity;
(c) any SSA employee in their individual capacity when DOJ (or SSA, where it is authorized to do so) has agreed to represent the employee; or
(d) the United States or any agency thereof when we determine that the litigation is likely to affect SSA or any of our components, SSA is a party to the litigation or has an interest in such litigation, and SSA determines that the use of such records by DOJ, a court or other tribunal, or another party before the tribunal is relevant and necessary to the litigation, provided, however, that in each case, we determine that such disclosure is compatible with the purpose for which the records were collected.
4. To contractors, cooperative agreement awardees, Federal agencies, State agencies, or a congressional support agency for SSA program evaluation, research, and statistical reporting purposes. We will disclose information under this routine use pursuant only to a written agreement, which sets forth the required safeguards as we determine are necessary and appropriate.
5. To contractors and other Federal agencies, as necessary, for assisting SSA in the efficient administration of its programs. We will disclose information under this routine use only in situations in which SSA may enter into a contractual or similar agreement with a third party to assist in accomplishing an agency function relating to this system of records.
6. To student volunteers, individuals working under a personal services contract, and others who technically do not have the status of Federal employees, when they are performing work for us, as authorized by law, and they need access to personally identifiable information (PII) in our records in order to perform their assigned agency functions.
7. To the National Archives Records Administration (NARA) under 44 U.S.C. 2904 and 2906.
8. To appropriate agencies, entities, and persons when:
(a) SSA suspects or has confirmed that there has been a breach of the system of records;
(b) SSA has determined that as a result of the suspected or confirmed breach there is a risk of harm to individuals, SSA (including its information systems, programs, and operations), the Federal Government, or national security; and
(c) the disclosure made to such agencies, entities, and persons is reasonably necessary to assist in connection with SSA's efforts to respond to the suspected or confirmed breach or to prevent, minimize, or remedy such harm.
9. To Federal, State, and local law enforcement agencies and private security contractors, as appropriate, information necessary:
(a) to enable them to ensure the safety of our employees and customers, the security of our workplace, and the operation of our facilities; or
(b) to assist investigations or prosecutions with respect to activities that affect such safety and security or activities that disrupt the operation of our facilities.
10. To another Federal agency or Federal entity, when we determine that information from this system of records is reasonably necessary to assist the recipient agency or entity in:
(a) responding to a suspected or confirmed breach; or
(b) preventing, minimizing, or remedying the risk of harm to individuals, the recipient agency or entity (including its information systems, programs, and operations), the Federal Government, or national security, resulting from a suspected or confirmed breach.
11. To the Centers for Medicare and Medicaid Services, as required by section 704(e) of the Social Security Act, records or information needed for research and statistical activities if the records or information are of such type that were disclosed under applicable rules, regulations, and procedures in effect before the date of enactment of the Social Security Independence and Program Improvements Act of 1994.
We will maintain records in this system in electronic form.
We will retrieve records in this system by SSN.
In accordance with NARA rules codified at 36 CFR 1225.16, we maintain records in accordance with General Records Schedule (GRS) 3.1: General Technology Management Records, item 012 and GRS 5.2: Transitory and Intermediary Records, item 020.
We retain electronic files containing personal identifiers in secure storage areas accessible only by authorized individuals, including our employees and contractors, who have a need for the information when performing their official duties. Security measures include, but are not limited to, the use of codes and profiles, personal identification numbers and passwords, and personal identification verification cards. We restrict access to specific correspondence within the system based on assigned roles and authorized users. We use audit mechanisms to record sensitive transactions as an additional measure to protect information from unauthorized disclosure or modification. To the maximum extent consistent with approved research needs, we purge personal identifiers from microdata files prepared for purposes of research and subject these files to procedural safeguards to assure anonymity.
We annually provide authorized individuals, including our employees and contractors, with appropriate security awareness training that includes reminders about the need to protect PII and the criminal penalties that apply to unauthorized access to, or disclosure of, PII (5 U.S.C. 552a(i)(1)). Furthermore, authorized individuals with access to databases maintaining PII must annually sign a sanctions document that acknowledges their accountability for inappropriately accessing or disclosing such information.
Individuals may submit requests for information about whether this system contains a record about them by submitting a written request to the system manager at the above address, which includes their name, SSN, or other information that may be in this system of records that will identify them. Individuals requesting notification of, or access to, a record by mail must include: (1) a notarized statement to us to verify their identity; or (2) must certify in the request that they are the individual they claim to be and that they understand that the knowing and willful request for, or acquisition of, a record pertaining to another individual under false pretenses is a criminal offense.
Individuals requesting notification of, or access to, records in person must provide their name, SSN, or other information that may be in this system of records that will identify them, as well as provide an identity document,
These procedures are in accordance with our regulations at 20 CFR 401.40 and 401.45.
Same as record access procedures. Individuals should also reasonably identify the record, specify the information they are contesting, and state the corrective action sought and the reasons for the correction with supporting justification showing how the record is incomplete, untimely, inaccurate, or irrelevant. These procedures are in accordance with our regulations at 20 CFR 401.65(a).
Same as record access procedures. These procedures are in accordance with our regulations at 20 CFR 401.40 and 401.45.
None.
74 FR 42727, Race and Ethnicity Collection System.
83 FR 54969, Race and Ethnicity Collection System.
The Department of State announces a meeting of the Foreign Affairs Policy Board to take place on December 7-8, 2023, at the Department of State, Washington, DC. The Foreign Affairs Policy Board will review and assess: Crisis in the Middle East; The International Dimensions of AI; New Perspectives on International Trade Policy; and The Global Migration Challenge.
Leslie Thompson at
This meeting is in accordance with the Federal Advisory Committee Act, 5 U.S.C. 1001
Federal Aviation Administration (FAA), Department of Transportation (DOT).
Notice of funding opportunity.
The Department of Transportation (DOT), Federal Aviation Administration (FAA), announces the opportunity to apply for $20 million in FY 2024 Airport Infrastructure Grant funds for the FAA Contract Tower (FCT) Competitive Grant Program, made available under the Infrastructure Investment and Jobs Act of 2021 (IIJA), herein referred to as the Bipartisan Infrastructure Law (BIL). The purpose of the FCT Competitive Grant Program is to make annual grants available to eligible airports for airport-owned airport traffic control tower (ATCT) projects that address the aging infrastructure of the nation's airports.
Airport sponsors that wish to be considered for FY 2024 FCT Competitive Grant Program funding should submit an application that meets the requirements of this NOFO as soon as possible, but no later than 5:00 p.m. Eastern time, December 1, 2023.
Submit applications electronically at
Robin K. Hunt, Manager, BIL Branch APP-540, FAA Office of Airports, at (202)267-3263 or our FAA BIL email address:
The FCT Competitive Grant Program will align with DOT's Strategic Framework FY 2022-2026 at
Airports that submitted projects under the FY 2024 Airport Terminal Program NOFO (88 FR 63189), that meet the eligibility requirements outlined in C.1., do not need to resubmit under this NOFO.
BIL established the FCT Competitive Grant Program, a competitive discretionary grant program, which provides $20 million in grant funding annually for five years (Fiscal Years 2022-2026) to sustain, construct, repair, improve, rehabilitate, modernize, replace, or relocate nonapproach control towers; acquire and install air traffic control, communications, and related equipment to be used in those towers; and construct a remote tower certified by the FAA including acquisition and installation of air traffic control, communications, or related equipment. The FAA is committed to advancing safe, efficient transportation, including projects funder under the FCT program. This Program also supports the President's goals to mobilize American ingenuity to build modern infrastructure and an equitable, clean energy future. In support of Executive Order 13985,
The FCT Competitive Grant Program falls under the project grant authority for the Airport Improvement Program (AIP) in 49 United States Code (U.S.C.) 47104. Per 2 Code of Federal Regulation (CFR) part 200—
Consistent with statutory criteria and Executive Order 14008,
The FAA will also consider projects that advance the goals of the Executive Orders listed under section E.2.
This NOFO announces up to $20,000,000, subject to availability of funds, for the Fiscal Year 2024 FCT Competitive Grant Program. The FCT Competitive Grant Program is a $100 million grant program, distributed as $20 million annually for five years (Fiscal Years 2022, 2023, 2024, 2025, and 2026).
The FAA will consider projects at an airport-owned Airport Traffic Control Tower (ATCT) that sustain, construct, repair, improve, rehabilitate, modernize, replace, or relocate nonapproach control towers; acquire and install air traffic control, communications, and related equipment to be used in those towers; or construct a remote tower certified by the FAA including acquisition and installation of air traffic control, communications, or related equipment. To date, there are no certified remote tower systems. The FAA is currently evaluating this technology to assess its suitability for use in the National Airspace System. In addition, these projects will also be evaluated based on overall impact on the National Airspace System, including age of facility, operational constraints, nonstandard facilities, or new FCT entrant requirements. This also includes applicable Executive Orders as listed in section E.2.
The FAA intends to publish a NOFO annually to announce additional funding made available, expected to be $20 million per year, for Fiscal Years 2025-2026.
Eligible applicants are those airport sponsors approved in the FAA's Contract Tower Program or Contract Tower Cost Share Program as defined in 49 U.S.C. 47124, and normally eligible for Airport Improvement Program (AIP) discretionary grants as defined in 49 U.S.C. 47115. The eligible applicants include a public agency, private entity, state agency, Indian Tribe, or Pueblo owning a public-use National Plan of Integrated Airport Systems (NPIAS) airport, the Secretary of the Interior for Midway Island airport, the Republic of the Marshall Islands, the Federated States of Micronesia, and the Republic of Palau.
No cost sharing or matching is required. The Federal cost share of the FCT Competitive Grant Program is 100 percent for all airports eligible to receive grants.
All projects funded from the FCT Competitive Grant Program must be airport-owned ATCT projects that:
i. Sustain, construct, repair, improve, rehabilitate, modernize, replace, or relocate nonapproach control towers;
ii. Acquire and install air traffic control, communications, and related equipment to be used in those towers; or
iii. Construct a remote tower
An application for FCT Competitive Grant Program projects, FAA Form 5100-144,
Direct all inquiries regarding applications to the appropriate Regional Office (RO) or Airports District Office (ADO), at
Applicants are required to submit FAA Form 5100-144,
The “Submit by Email” button at the bottom of the Form will generate an email for the applicant to send to the FAA BIL Team at:
Applicants selected to receive an FCT Competitive Grant Program grant will then be required to follow AIP grant application procedures prior to award, which include meeting all prerequisites for funding, and submission of Standard Form SF-424,
Airports covered under the FAA's State Block Grant Program or airports in a channeling act state should coordinate with their associated state agency on the process for deciding who should submit an application using the procedures listed above.
Applicants must address Administration and Departmental priorities in safety, climate change and sustainability, equity and workforce development which are further defined in section E.
All applicants, including those requesting full federal share of eligible project costs, should have a plan to address potential cost overruns as part of an overall funding plan.
Applicants must comply with 2 CFR part 25—
Once awarded, the FAA grant recipient must maintain the currency of its information in SAM until the grantee submits the final financial report required under the grant or receives the final payment, whichever is later. A grant recipient must review and update the information at least annually after the initial registration and more frequently if required by changes in information or another award term.
The FAA may not make an award until the applicant has complied with all applicable UEI and SAM requirements. If an applicant has not fully complied with the requirements by the time the FAA is ready to make an award, the FAA may determine that the applicant is not qualified to receive an award and use that determination as a basis for giving a Federal award to another applicant.
Non-Federal entities that have received a Federal award are required to report certain civil, criminal, or administrative proceedings to SAM to ensure registration information is current and complies with federal requirements. Applicants should refer to 2 CFR 200.113 for more information about this requirement.
Airports that wish to be considered for FY 2024 FCT Competitive Grant Program funding should submit an application that meets the requirements of this NOFO as soon as possible, but no later than 5 p.m. eastern time on December 1, 2023. Submit applications electronically to
All projects funded from the FCT Competitive Grant Program must be at airports approved in the FAA's Contract Tower Program or Contract Tower Cost Share Program defined in 49 U.S.C. 47124.
FCT Competitive Grant Program funds may not be used to support or oppose union organizing.
Applications will only be accepted on FAA Form 5100-144 fillable PDF via email and must be received on or before December 1, 2023, 5:00 p.m. Eastern time. No other Forms of applications will be accepted.
Applications for FY 2024 FCT Competitive Grant Program will be rated using the following criteria:
i. Projects must meet eligibility requirements under the FCT Competitive Grant Program outlined under sections C.1 and C.3 above.
ii. The FAA will consider timeliness of implementation, with priority given to those projects, including “design only” projects, that can satisfy all statutory and administrative requirements for grant award by October 2024.
iii. ATCT projects will be evaluated based on the overall impact on the National Airspace System, including age of facility, operational constraints, nonstandard facility conditions, or new FCT entrant requirements.
iv. Priority will be given to projects that advance aviation safety or enhance air traffic efficiency.
v. The applicant should describe whether and how project delivery and implementation creates good-paying jobs with the free and fair choice to join a union to the greatest extent possible; the use of demonstrated strong labor standards, practices and policies (including for direct employees, contractors, and sub-contractors, and service workers on airport property); use of project labor agreements; distribution of workplace rights notices; union neutrality agreements; wage and/or benefit standards; safety and health standards; the use of Local Hire Provisions;
Federal awarding agency personnel will evaluate applications based on how well the projects meet the criteria in E.1, including project eligibility, justification, readiness, and impact on the National Airspace System. The FAA will also consider how well projects advance the goals of the following Executive Orders: the President's January 20, 2021, Executive Order 13990,
Applications are first reviewed for eligibility, justification, and timeliness of implementation consistent with the requirements of this NOFO and the intent of the FCT. Applications are then reviewed for how well the proposed project(s) meets the criteria in E.1. and ranked by field and Regional office staff. The top projects (as outlined in BIL) are then evaluated by a National Control Board (NCB). The NCB has representatives from each Region and Headquarters management. The NCB recommends project and funding levels to senior leadership.
Prior to making a Federal award with a total amount of Federal share greater than the simplified acquisition threshold, the FAA is required to review and consider any information about the applicant that is in the designated integrity and performance system accessible through SAM (currently FAPIIS) (see 41 U.S.C. 2313). An applicant, at its option, may review information in the designated integrity and performance systems accessible through SAM and comment on any information about itself that a Federal awarding agency previously entered. The FAA will consider any comments by the applicant, in addition to the other information in the designated integrity and performance system, in making a judgment about the applicant's integrity, business ethics, and record of performance under Federal awards when completing the review of risk posed by applicants as described in 2 CFR 200.206.
BIL awards are announced through a Congressional notification process and a DOT Secretary's Notice of Intent to Fund. The FAA Regional Office (RO) or Airports District Office (ADO) (RO/ADO) representative will contact the airport with further information and instructions. Once all pre-grant actions are complete, the FAA RO/ADO will offer the airport sponsor a grant for the announced project. This offer may be provided through postal mail or by electronic means. Once this offer is signed by the airport sponsor, it becomes a grant agreement. Awards made under this program are subject to conditions and assurances in the grant agreement.
All grant recipients are subject to the grant requirements of the AIP, found in 49 U.S.C. chapter 471. Grant recipients are subject to requirements in the FAA's
The U.S. Department of Labor's Office of Federal Contract Compliance Programs (OFCCP) is charged with enforcing Executive Order 11246, section 503 of the Rehabilitation Act of 1973, and the Vietnam Era Veterans' Readjustment Assistance Act of 1974. OFCCP has a Mega Construction Project Program through which it engages with project sponsors as early as the design phase to help promote compliance with non-discrimination and affirmative action obligations. OFCCP will identify projects that receive an award under this notice and are required to participate in OFCCP's Mega Construction Project Program from a wide range of Federally-assisted projects over which OFCCP has jurisdiction and that have a project cost above $35 million. DOT will require project sponsors with costs above $35 million that receive awards under this funding opportunity to partner with OFCCP, if selected by OFCCP, as a condition of their DOT award.
Each grant recipient must assure that it will comply with all applicable Federal statutes, regulations, executive orders, directives, FAA circulars, and other federal administrative requirements in carrying out any project supported by the FCT Competitive Grant Program grant. The grant recipient must acknowledge that it is under a continuing obligation to comply with the terms and conditions of the grant agreement issued for its project with the FAA. The grant recipient understands that federal laws, regulations, policies, and administrative practices might be modified from time to time and may affect the implementation of the project. The grant recipient must agree that the most recent Federal requirements will apply to the project unless the FAA issues a written determination otherwise.
The grant recipient must submit the Certifications at the time of grant application and Assurances must be accepted as part of the grant agreement at the time of accepting a grant offer. Grant recipients must also comply with 2 CFR part 200, which “are applicable to all costs related to Federal awards,” and which is cited in the grant assurances of the grant agreements. The Airport Sponsor Assurances are available on the FAA website at:
Grant recipients are subject to financial reporting per 2 CFR 200.328 and performance reporting per 2 CFR 200.329. Under the FCT Competitive Grant Program, the grant recipient is required to comply with all Federal financial reporting requirements and payment requirements, including the submittal of timely and accurate reports. Financial and performance reporting requirements are available in the FAA October 2020 Financial Reporting Policy, which is available at:
The grant recipient must comply with annual audit reporting requirements. The grant recipient and sub-recipients, if applicable, must comply with 2 CFR part 200 subpart F Audit Reporting Requirements. The grant recipient must comply with any requirements outlined in 2 CFR part 180,
For further information concerning this notice, please contact the FAA BIL Branch via email at:
Federal Motor Carrier Safety Administration (FMCSA), Department of Transportation (DOT).
Notice of public meeting.
This notice announces a meeting of the WOTAB.
The meeting will be held on Monday, November 13, 2023, from 10 a.m. to 4:30 p.m. ET. Requests for accommodations for a disability must be received by Monday, November 6. Requests to submit written materials for consideration during the meeting must be received no later than Monday, November 6.
The meeting will be held virtually for its entirety. Please register in advance of the meeting at
Ms. Shannon L. Watson, Designated Federal Officer, WOTAB, FMCSA, 1200 New Jersey Avenue SE, Washington, DC 20590, (202) 360-2925,
WOTAB was created under the Federal Advisory Committee Act
WOTAB operates in accordance with FACA under the terms of the WOTAB charter, filed February 11, 2022.
WOTAB will complete its review of the discussion notes from the deliberations concerning Tasks 22-1 through 23-4 and the draft report prepared by its Report Subcommittee. The Report Subcommittee members were designated during the WOTAB's August 14 meeting for the purpose of compiling information from the discussion notes for the meetings and drafting a report for the full WOTAB to review prior to its submission to the FMCSA Administrator.
The meeting will be open to the public via virtual platform. Advance registration via the website is required by Monday, November 6.
DOT is committed to providing equal access to this meeting for all participants. If you need alternative formats or services due to a disability, such as sign language interpretation or other ancillary aids, please contact the person listed in the
Oral comments from the public will be heard during designated comment periods at the discretion of the WOTAB chair and Designated Federal Officer. To accommodate as many speakers as possible, the time for each commenter may be limited. Speakers are requested to submit a written copy of their remarks for inclusion in the meeting records and for circulation to WOTAB members. All prepared remarks submitted on time will be accepted and considered as part of the record. Any member of the public may present a written statement to the committee at any time.
Federal Motor Carrier Safety Administration (FMCSA), Department of Transportation (DOT).
Notice of applications for exemption; request for comments.
FMCSA announces receipt of applications from 11 individuals for an exemption from the hearing requirement in the Federal Motor Carrier Safety Regulations (FMCSRs) to operate a commercial motor vehicle (CMV) in interstate commerce. If granted, the exemptions would enable these hard of hearing and deaf individuals to operate CMVs in interstate commerce.
Comments must be received on or before December 1, 2023.
You may submit comments identified by the Federal Docket Management System Docket No. FMCSA-2023-0024 using any of the following methods:
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•
•
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To avoid duplication, please use only one of these four methods. See the “Public Participation” portion of the
Ms. Christine A. Hydock, Chief, Medical Programs Division, FMCSA, DOT, 1200 New Jersey Avenue SE, Room W64-224, Washington, DC 20590-0001, (202) 366-4001,
If you submit a comment, please include the docket number for this notice (Docket No. FMCSA-2023-0024), indicate the specific section of this document to which each comment applies, and provide a reason for each suggestion or recommendation. You may submit your comments and material online or by fax, mail, or hand delivery, but please use only one of these means. FMCSA recommends that you include your name and a mailing address, an email address, or a phone number in the body of your document so that FMCSA can contact you if there are questions regarding your submission.
To submit your comment online, go to
If you submit your comments by mail or hand delivery, submit them in an unbound format, no larger than 8
FMCSA will consider all comments and material received during the comment period.
To view comments go to
In accordance with 49 U.S.C. 31315(b)(6), DOT solicits comments from the public on the exemption requests. DOT posts these comments, without edit, including any personal information the commenter provides, to
Under 49 U.S.C. 31136(e) and 31315(b), FMCSA may grant an exemption from the FMCSRs for no longer than a 5-year period if it finds such exemption would likely achieve a level of safety that is equivalent to, or greater than, the level that would be achieved absent such exemption. The statutes also allow the Agency to renew exemptions at the end of the 5-year period. FMCSA grants medical exemptions from the FMCSRs for a 2-year period to align with the maximum duration of a driver's medical certification.
The 11 individuals listed in this notice have requested an exemption from the hearing requirement in 49 CFR 391.41(b)(11). Accordingly, the Agency will evaluate the qualifications of each applicant to determine whether granting the exemption will achieve the required level of safety mandated by statute.
The physical qualification standard for drivers regarding hearing found in § 391.41(b)(11) states that a person is physically qualified to drive a CMV if that person first perceives a forced whispered voice in the better ear at not less than 5 feet with or without the use of a hearing aid or, if tested by use of an audiometric device, does not have an average hearing loss in the better ear greater than 40 decibels at 500 Hz, 1,000 Hz, and 2,000 Hz with or without a hearing aid when the audiometric device is calibrated to American National Standard (formerly ASA Standard) Z24.5—1951.
This standard was adopted in 1970 and was revised in 1971 to allow drivers to be qualified under this standard while wearing a hearing aid, (35 FR 6458, 6463 (Apr. 22, 1970) and 36 FR 12857 (July 8, 1971), respectively).
On February 1, 2013, FMCSA announced in a Notice of Final Disposition titled, “Qualification of Drivers; Application for Exemptions; National Association of the Deaf,” (78 FR 7479), its decision to grant requests from 40 individuals for exemptions from the Agency's physical qualification standard concerning hearing for interstate CMV drivers. Since that time the Agency has published additional notices granting requests from hard of hearing and deaf individuals for exemptions from the Agency's physical qualification standard concerning hearing for interstate CMV drivers.
Melissa Bartlett, 35, holds a class E driver's license in Louisiana.
Jeromy Brand, 48, holds a class D driver's license in Alabama.
Bryan Elzy, 48, holds a class E driver's license in Louisiana.
Brian Greco, 36, holds a class A commercial driver's license in New Mexico.
Bradley Hess, 41, holds a driver's license in Washington.
Tony Jones, 37, holds a class C driver's license in Texas.
Alexander Lindsay, 30, holds a class D driver's license in Ohio.
Francis McBride, 36, holds a class C driver's license in North Carolina.
Ray Perry, 43, holds a class C driver's license in Texas.
Lakeshia Rosbia, 25, holds a class D driver's license in Arkansas.
Anthony Scott, 26, holds a class D driver's license in Alabama.
In accordance with 49 U.S.C. 31136(e) and 31315(b), FMCSA requests public comment from all interested persons on the exemption petitions described in this notice. We will consider all comments received before the close of business on the closing date indicated under the
Federal Motor Carrier Safety Administration (FMCSA), Department of Transportation (DOT).
Notice of final disposition.
FMCSA announces its decision to exempt 12 individuals from the requirement in the Federal Motor Carrier Safety Regulations (FMCSRs) that interstate commercial motor vehicle (CMV) drivers have “no established medical history or clinical diagnosis of epilepsy or any other condition which is likely to cause loss of consciousness or any loss of ability to control a CMV.” The exemptions enable these individuals who have had one or more seizures and are taking anti-seizure medication to operate CMVs in interstate commerce.
The exemptions were applicable on October 22, 2023. The exemptions expire on October 22, 2025.
Ms. Christine A. Hydock, Chief, Medical Programs Division, FMCSA, DOT, 1200 New Jersey Avenue SE, Washington, DC 20590-0001, (202) 366-4001,
To view comments go to
In accordance with 49 U.S.C. 31315(b)(6), DOT solicits comments from the public on the exemption requests. DOT posts these comments, without edit, including any personal information the commenter provides, to
On September 13, 2023, FMCSA published a notice announcing receipt of applications from 12 individuals requesting an exemption from the epilepsy and seizure disorders prohibition in 49 CFR 391.41(b)(8) and requested comments from the public (88 FR 62884). The public comment period ended on October 13, 2023, and no comments were received.
FMCSA has evaluated the eligibility of these applicants and determined that granting exemptions to these individuals would likely achieve a level of safety that is equivalent to, or greater than, the level that would be achieved by complying with § 391.41(b)(8).
The physical qualification standard for drivers regarding epilepsy found in § 391.41(b)(8) states that a person is physically qualified to drive a CMV if that person has no established medical history or clinical diagnosis of epilepsy or any other condition which is likely to cause the loss of consciousness or any loss of ability to control a CMV.
In addition to the regulations, FMCSA has published advisory criteria
FMCSA received no comments in this proceeding.
Under 49 U.S.C. 31136(e) and 31315(b), FMCSA may grant an exemption from the FMCSRs for no longer than a 5-year period if it finds such exemption would likely achieve a level of safety that is equivalent to, or greater than, the level that would be achieved absent such exemption. The statutes allow the Agency to renew exemptions at the end of the 5-year period. However, FMCSA grants medical exemptions from the FMCSRs for a 2-year period to align with the maximum duration of a driver's medical certification.
The Agency's decision regarding these exemption applications is based on the 2007 recommendations of the Agency's Medical Expert Panel. The Agency conducted an individualized assessment of each applicant's medical information, including the root cause of the respective seizure(s) and medical information about the applicant's seizure history, the length of time that has elapsed since the individual's last seizure, the stability of each individual's treatment regimen and the duration of time on or off of anti-seizure medication. In addition, the Agency reviewed the treating clinician's medical opinion related to the ability of the driver to safely operate a CMV with a history of seizure and each applicant's driving record found in the Commercial Driver's License Information System for commercial driver's license (CDL) holders, and interstate and intrastate inspections recorded in the Motor Carrier Management Information System. For non-CDL holders, the Agency reviewed the driving records from the State Driver's Licensing Agency. A summary of each applicant's seizure history was discussed in the September 13, 2023,
These 12 applicants have been seizure-free over a range of 42 years while taking anti-seizure medication and maintained a stable medication treatment regimen for the last 2 years. In each case, the applicant's treating physician verified his or her seizure history and supports the ability to drive commercially.
The Agency acknowledges the potential consequences of a driver experiencing a seizure while operating a CMV. However, the Agency believes the drivers granted this exemption have demonstrated that they are unlikely to have a seizure and their medical condition does not pose a risk to public safety.
Consequently, FMCSA finds further that in each case exempting these applicants from the epilepsy and seizure disorder prohibition in § 391.41(b)(8) would likely achieve a level of safety equal to that existing without the exemption, consistent with the applicable standard in 49 U.S.C. 31315(b)(1).
The terms and conditions of the exemption are provided to the applicants in the exemption document and include the following: (1) each driver must remain seizure-free and maintain a stable treatment during the 2-year exemption period; (2) each driver must submit annual reports from their treating physicians attesting to the stability of treatment and that the driver has remained seizure-free; (3) each driver must undergo an annual medical examination by a certified ME, as defined by § 390.5T; and (4) each driver must provide a copy of the annual medical certification to the employer for retention in the driver's qualification file, or keep a copy of his/her driver's qualification file if he/she is self-employed. The driver must also have a copy of the exemption when driving, for presentation to a duly authorized Federal, State, or local enforcement official.
During the period the exemption is in effect, no State shall enforce any law or regulation that conflicts with this exemption with respect to a person operating under the exemption.
Based upon its evaluation of the 12 exemption applications, FMCSA exempts the following drivers from the epilepsy and seizure disorder prohibition in § 391.41(b)(8), subject to the requirements cited above:
In accordance with 49 U.S.C. 31315(b), each exemption will be valid for 2 years from the effective date unless revoked earlier by FMCSA. The exemption will be revoked if the following occurs: (1) the person fails to comply with the terms and conditions of the exemption; (2) the exemption has resulted in a lower level of safety than was maintained prior to being granted; or (3) continuation of the exemption would not be consistent with the goals
Federal Motor Carrier Safety Administration (FMCSA), Department of Transportation (DOT).
Notice of renewal of exemptions; request for comments.
FMCSA announces its decision to renew exemptions for three individuals from the requirement in the Federal Motor Carrier Safety Regulations (FMCSRs) that interstate commercial motor vehicle (CMV) drivers have “no established medical history or clinical diagnosis of epilepsy or any other condition which is likely to cause loss of consciousness or any loss of ability to control a CMV.” The exemptions enable these individuals who have had one or more seizures and are taking anti-seizure medication to continue to operate CMVs in interstate commerce.
The exemptions are applicable on November 6, 2023. The exemptions expire on November 6, 2025. Comments must be received on or before December 1, 2023.
You may submit comments identified by the Federal Docket Management System Docket No. FMCSA-2008-0355, Docket No. FMCSA-2019-0031, or Docket No. FMCSA-2020-0047 using any of the following methods:
•
•
•
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To avoid duplication, please use only one of these four methods. See the “Public Participation” portion of the
Ms. Christine A. Hydock, Chief, Medical Programs Division, FMCSA, DOT, 1200 New Jersey Avenue SE, Washington, DC 20590-0001, (202) 366-4001,
If you submit a comment, please include the docket number for this notice (Docket No. FMCSA-2008-0355, Docket No. FMCSA-2019-0031, or Docket No. FMCSA-2020-0047), indicate the specific section of this document to which each comment applies, and provide a reason for each suggestion or recommendation. You may submit your comments and material online or by fax, mail, or hand delivery, but please use only one of these means. FMCSA recommends that you include your name and a mailing address, an email address, or a phone number in the body of your document so that FMCSA can contact you if there are questions regarding your submission.
To submit your comment online, go to
If you submit your comments by mail or hand delivery, submit them in an unbound format, no larger than 8
To view comments go to
In accordance with 49 U.S.C. 31315(b)(6), DOT solicits comments from the public on the exemption request. DOT posts these comments, without edit, including any personal information the commenter provides, to
Under 49 U.S.C. 31136(e) and 31315(b), FMCSA may grant an exemption from the FMCSRs for no longer than a 5-year period if it finds such exemption would likely achieve a level of safety that is equivalent to, or greater than, the level that would be achieved absent such exemption. The statutes also allow the Agency to renew exemptions at the end of the 5-year period. However, FMCSA grants medical exemptions from the FMCSRs for a 2-year period to align with the maximum duration of a driver's medical certification.
The physical qualification standard for drivers regarding epilepsy found in 49 CFR 391.41(b)(8) states that a person is physically qualified to drive a CMV if that person has no established medical history or clinical diagnosis of epilepsy or any other condition which is likely to cause the loss of consciousness or any loss of ability to control a CMV.
In addition to the regulations, FMCSA has published advisory criteria
The three individuals listed in this notice have requested renewal of their exemptions from the epilepsy and seizure disorders prohibition in § 391.41(b)(8), in accordance with FMCSA procedures. Accordingly, FMCSA has evaluated these applications for renewal on their merits and decided to extend each exemption for a renewable 2-year period.
Interested parties or organizations possessing information that would otherwise show that any, or all, of these drivers are not currently achieving the statutory level of safety should immediately notify FMCSA. The Agency will evaluate any adverse evidence submitted and, if safety is being compromised or if continuation of the exemption would not be consistent with the goals and objectives of 49 U.S.C. 31136(e) and 31315(b), FMCSA will take immediate steps to revoke the exemption of a driver.
In accordance with 49 U.S.C. 31136(e) and 31315(b), each of the three applicants has satisfied the renewal conditions for obtaining an exemption from the epilepsy and seizure disorders prohibition. The three drivers in this notice remain in good standing with the Agency, have maintained their medical monitoring and have not exhibited any medical issues that would compromise their ability to safely operate a CMV during the previous 2-year exemption period. In addition, for commercial driver's license (CDL) holders, the Commercial Driver's License Information System and the Motor Carrier Management Information System are searched for crash and violation data. For non-CDL holders, the Agency reviews the driving records from the State Driver's Licensing Agency. These factors provide an adequate basis for predicting each driver's ability to continue to safely operate a CMV in interstate commerce. Therefore, FMCSA concludes that extending the exemption for each renewal applicant for a period of 2 years is likely to achieve a level of safety equal to that existing without the exemption.
As of November 6, 2023, and in accordance with 49 U.S.C. 31136(e) and 31315(b), the following three individuals have satisfied the renewal conditions for obtaining an exemption from the epilepsy and seizure disorders prohibition in the FMCSRs for interstate CMV drivers:
Brian Bommer (OH); David Kietzman (WI); and Jerel Sayers (ID).
The drivers were included in docket number FMCSA-2008-0355, FMCSA-2019-0031, or FMCSA-2020-0047. Their exemptions are applicable as of November 6, 2023 and will expire on November 6, 2025.
The exemptions are extended subject to the following conditions: (1) each driver must remain seizure-free and maintain a stable treatment during the 2-year exemption period; (2) each driver must submit annual reports from their treating physicians attesting to the stability of treatment and that the driver has remained seizure-free; (3) each driver must undergo an annual medical examination by a certified ME, as defined by § 390.5; and (4) each driver must provide a copy of the annual medical certification to the employer for retention in the driver's qualification file, or keep a copy of his/her driver's qualification file if he/she is self-employed. The driver must also have a copy of the exemption when driving, for presentation to a duly authorized Federal, State, or local enforcement official. The exemption will be rescinded if: (1) the person fails to comply with the terms and conditions of the exemption; (2) the exemption has resulted in a lower level of safety than was maintained before it was granted; or (3) continuation of the exemption would not be consistent with the goals and objectives of 49 U.S.C. 31136(e) and 31315(b).
During the period the exemption is in effect, no State shall enforce any law or regulation that conflicts with this exemption with respect to a person operating under the exemption.
Based on its evaluation of the three exemption applications, FMCSA renews the exemptions of the aforementioned drivers from the epilepsy and seizure disorders prohibition in § 391.41(b)(8). In accordance with 49 U.S.C. 31136(e) and 31315(b), each exemption will be valid for 2 years unless revoked earlier by FMCSA.
Office of the Secretary, Department of Transportation.
Notice of public meeting.
DOT OST announces a meeting of ACTE, which will take place in person at the Hilton Durham, North Carolina.
The meeting will be held Wednesday, November 15, 2023, from 6:30 to 8 p.m. eastern time. Requests for accommodations because of a disability must be received by Wednesday, November 8. Requests to submit questions must be received no later than Wednesday, November 8. The registration form will close once it hits capacity.
The meeting will be held at the Hilton Durham, 3800 Hillsborough Road, Durham, North Carolina 27705. Members of the public should go to
Sandra Norman, Senior Advisor and Designated Federal Officer, Departmental Office of Civil Rights, U.S. Department of Transportation, 1200 New Jersey Avenue SE, Washington, DC 20590, (804) 836-2893,
ACTE was established to provide independent advice and recommendations to the Secretary of Transportation about comprehensive, interdisciplinary issues related to civil rights and transportation equity in the planning, design, research, policy, and advocacy contexts from a variety of transportation equity practitioners and
Implement the Agency's Equity Action Plan and Strategic Plan, helping to institutionalize equity into Agency programs, policies, regulations, and activities;
Strengthen and establish partnerships with overburdened and underserved communities who have been historically underrepresented in the Department's outreach and engagement, including those in rural and urban areas;
Empower communities to have a meaningful voice in local and regional transportation decisions; and
Ensure the compliance of Federal funding recipients with civil rights laws and nondiscrimination programs, policies, regulations, and activities.
The agenda for the meeting will consist of:
Advance registration is required. Please register at
Office of the Secretary, Department of Transportation.
Notice and request for comments. Revision of information related to an active OMB control number.
In accordance with the Paperwork Reduction Act of 1995, as amended, this notice announces the Department of Transportation's intention to revise information related to an OMB control number for an online complaint form by which a consumer can electronically submit a service-related complaint against an airline and other air travel-related companies.
Comments on this notice must be received by January 2, 2024.
To ensure that you do not duplicate your docket submissions, please submit them by only one of the following means:
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Daeleen Chesley, Office of the Secretary, Office of Aviation Consumer Protection (C-70), U.S. Department of Transportation, 1200 New Jersey Ave. SE, Washington, DC 20590, 202 366-6792 (voice) or at
Among other things, the office is responsible for receiving and investigating service-related consumer complaints filed against airlines and other air travel-related companies. Complaints submitted to OACP are reviewed by the office to determine the extent to which these entities comply with federal aviation consumer protection and civil rights laws and what, if any, action should be taken. OACP also receives general comments and inquiries from air consumers via the online form, but those are very few compared to the number of complaints filed by consumers on an annual basis. (See Tables 1 and 2, below).
This request is to revise the current information collection due to updates that OACP is making to the office's online air consumer complaint form as part of an Information Technology (IT) system modernization project.
The modernized process will also streamline OACP's ability to review data and analyze complaints. The revised process will also reduce manual analyst processing steps. These improvements will increase the office's ability to effectively investigate individual complaints against airlines and other air travel-related companies. This consumer-driven submission process enhances the information collected and positively impacts OACP's ability to learn about patterns and practices that may develop in violation of aviation consumer protection requirements. The information collection continues to
The type of information requested on OACP's online form that is active and currently covered by the existing OMB Control number includes complainant's name, address, phone number (including area code), email address, and name of the airline or company about which she/he is complaining, as well as the flight date and flight itinerary (where applicable) of a complainant's trip. Air travel consumers use the current form for complaints (to provide narrative information regarding a specific air-travel related problem) or comments (to comment about or ask for air-travel related information from OACP).
The modernized intake process guides an aviation consumer through the following four steps: (1) Contact Information, (2) Flight Information, (3) Complaint Details, and (4) Complaint Review and Submission. Similar information is requested for comments. New/updated consumer-related information includes the country of residence, whether the trip involved a flight through the U.S. or a U.S. territory, certain booking information, and the passenger's arrival/departure airports. As currently drafted, the modernized online multi-step intake process allows consumers (via radio buttons) to include information about problems associated with the following main categories/subject areas:
Once a consumer chooses a category, the consumer is guided through a series of Yes/No questions that capture relevant information pertaining to the nature of the complaint. An air travel consumer can choose one or more complaint categories depending on the nature of his/her experience and has the option to include narrative information.
Both the currently active online air travel consumer complaint form and the modernized guided intake process include the ability for a consumer to upload documents relevant to the complaint/comment.
Filing a complaint using a web-based form is voluntary and minimizes the burden on respondents when compared with other methods of submitting complaints. In recent years, consumers have submitted most complaints online via their personal computer or on a mobile/electronic device. Approximately ninety-seven percent of the submissions received by OACP during calendar years (CYs) 2021 and 2022 were filed using the web-based form as shown in the table below.
OACP has limited the request to information necessary to meet its aviation consumer protection monitoring and enforcement activities.
The information collection is available for inspection in regulations.gov, as noted in the
All responses to this notice will be summarized and included in the request for OMB approval. All comments will also become a matter of public record on the docket.
Office of Foreign Assets Control, Treasury.
Notice.
The U.S. Department of the Treasury's Office of Foreign Assets Control (OFAC) is revising the entry of a person that has been placed on OFAC's Specially Designated Nationals and Blocked Persons (SDN) List. All property and interests in property subject to U.S. jurisdiction of this person remain blocked, and U.S. persons are generally prohibited from engaging in transactions with them.
See
OFAC: Bradley T. Smith, 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 Assistant Director for Sanctions Compliance & Evaluation, tel.: 202-622-2490.
The SDN List and additional information concerning OFAC sanctions programs are available on OFAC's website (
On September 25, 2023, OFAC removed the following entry from the SDN List.
1. JOINT STOCK COMPANY STAR (a.k.a. “AO ODK STAR”; a.k.a. “JSC UEC STAR”), ul. Kuibysheva D. 140A, Perm 614990, Russia; Tax ID No. 5904100329 (Russia); Registration Number 1025900895712 (Russia) [RUSSIA-EO14024].
On September 25, 2023, OFAC combined the information in the entry above with a separate existing entry on the SDN List for the same entity by publishing the following revised entry on the SDN List.
1. JOINT STOCK COMPANY STAR (a.k.a. AO ODK-STAR; a.k.a. JSC UEC STAR), Ul. Kuibysheva D. 140A, Perm 614990, Russia; website
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,” 86 FR 20249, 3 CFR, 2021 Comp., p. 542 (Apr. 15, 2021) on September 14, 2023 for operating or having operated in the manufacturing sector of the Russian Federation economy.
Designated pursuant to section 1(a)(iii) of Executive Order 13382 of June 28, 2005, “Blocking Property of Weapons of Mass Destruction Proliferators and Their Supporters,” 70 FR 38567, 3 CFR, 2005 Comp., p. 170 (E.O. 13382) on September 19, 2023 for having provided, or attempted to provide, financial, material, technological or other support for, or goods or services in support of, IRAN AIRCRAFT MANUFACTURING INDUSTRIAL COMPANY, a person whose property and interests in property are blocked pursuant to E.O. 13382.
Department of the Treasury.
Notice of meeting.
The Department of the Treasury is hosting its fiscal year 2024 quarter 1 meeting of the Treasury Advisory Committee on Racial Equity (“TACRE” or “Committee”). The Committee is composed of 24 members who will provide information, advice, and recommendations to the Department of the Treasury on matters relating to the advancement of racial equity. This notification provides the date, time, and location of the meeting and the process for participating and providing comments.
December 7, 2023, at 1-5 p.m. eastern time.
Snider Page, Designated Federal Official, Department of the Treasury, by emailing
Check:
Pursuant to the Federal Advisory Committee Act (FACA) (5 U.S.C. 1001
The purpose of the Committee is to provide advice and recommendations to Secretary of the Treasury Janet L. Yellen and Deputy Secretary Wally Adeyemo on efforts to advance racial equity in the economy and address acute disparities for communities of color. The Committee will identify, monitor, and review aspects of the domestic economy that have directly and indirectly resulted in unfavorable conditions for communities of color. The Committee plans to address topics including but not limited to: financial inclusion, access to capital, housing stability, federal supplier diversity, and economic development. The duties of the Committee shall be solely advisory and shall extend only to the submission of advice and recommendations to the Offices of the Secretary and Deputy Secretary, which shall be non-binding to the Department. No determination of fact or policy shall be made by the Committee.
The agenda for the meeting includes opening remarks from the TACRE Chair and Vice-Chair; an overview of the work conducted by the TACRE subcommittees since the September 19, 2023 TACRE meeting, and a possible vote on recommendations to make to the Department; briefings from government officials on financial inclusion and small business strategy, and a review, and possible discussion, of any comments received from the public. Meeting times and topics are subject to change.
In general, the Department will post all comments received on its website
Process for Attending In-Person: Treasury is a secure facility, that requires all visitors to get cleared by security prior to arrival at the building. In addition, all visitors will be required to undergo COVID screening. The COVID screening will be a self-administered test provided by Treasury and visitors will have to wait for a negative result before proceeding to the meeting. Anyone testing positive will need to immediately leave the building. Please register for the Public Meeting by visiting:
Due to the limited size of the meeting room, public attendance will be limited to the first 20 people that complete the registration process. Members of the public will need to bring a government issued identification that matches the information provided during the registration process and present that to Security, for entry into the building. Please plan on arriving 30-45 minutes prior to the meeting to allow time for security. If you require reasonable accommodation, please contact the Departmental Offices Reasonable Accommodations Coordinator at
Veterans Benefits Administration, Department of Veterans Affairs.
Notice.
In compliance with the Paperwork Reduction Act (PRA) of 1995, this notice announces that the Veterans Benefits Administration (VBA), Department of Veterans Affairs, will submit the collection of information abstracted below to the Office of Management and Budget (OMB) for review and comment. The PRA submission describes the nature of the information collection and its expected cost and burden, and it includes the actual data collection instrument.
Written comments and recommendations for the proposed information collection should be sent within 30 days of publication of this notice by clicking on the following link
Maribel Aponte, Office of Enterprise and Integration, Data Governance Analytics (008), 810 Vermont Ave. NW, Washington, DC 20420, (202) 266-4688 or email
An agency may not conduct or sponsor, and a person is not required to respond to a collection of information unless it displays a currently valid OMB control number. The
By direction of the Secretary.
Securities and Exchange Commission.
Final rule.
The Securities and Exchange Commission (“Commission”) is adopting a new rule and new Form SHO pursuant to the Securities Exchange Act of 1934 (“Exchange Act”) and the Dodd-Frank Wall Street Reform and Consumer Protection Act (“DFA”). The new rule and related form are designed to provide greater transparency through the publication of short sale-related data to investors and other market participants. Under the new rule, institutional investment managers that meet or exceed certain specified reporting thresholds are required to report, on a monthly basis using the related form, specified short position data and short activity data for equity securities. In addition, the Commission is adopting an amendment to the national market system (“NMS”) plan governing the consolidated audit trail (“CAT”) created pursuant to the Exchange Act to require the reporting of reliance on the bona fide market making exception in the Commission's short sale rules. The Commission is publishing the text of the amendments to the NMS plan governing the CAT (“CAT NMS Plan”) in a separate notice.
Timothy M. Riley, Branch Chief; Patrice M. Pitts, Special Counsel; James R. Curley, Special Counsel; Jessica Kloss, Attorney Advisor; Brendan McLeod, Attorney Advisor; Roland Lindmayer, Attorney Advisor; Josephine J. Tao, Assistant Director, Office of Trading Practices; and Carol McGee, Associate Director, Office of Derivatives Policy and Trading Practices, Division of Trading and Markets, Securities and Exchange Commission, 100 F Street NE, Washington, DC 20549-8010, at (202) 551-5777.
The Commission is adopting new 17 CFR 240.13f-2 (“Rule 13f-2”) and related form 17 CFR 249.332 (“Form SHO”) under the Exchange Act to require certain institutional investment managers to report, on a monthly basis on new Form SHO, certain short position data and short activity data for certain equity securities as prescribed in Rule 13f-2.
The Commission is also adopting, in a separate notice published elsewhere in this issue of the
Short selling involves a sale of a security that the seller does not own, or a sale that is consummated by the delivery of a security borrowed by, or for the account of, the seller.
Short selling is generally used to profit from an expected downward price movement, to provide liquidity in response to unanticipated demand,
The Commission has plenary authority under section 10(a) of the Exchange Act to regulate short sales of securities as necessary or appropriate in the public interest or for the protection of investors.
Section 929X of the DFA added section 13(f)(2) of the Exchange Act, entitled “Reports by institutional investment managers,” requiring the Commission to prescribe rules to make certain short sale data publicly available no less frequently than monthly.
In February 2022, in an effort to increase transparency regarding short position and short activity data to both market participants and regulators, and to address the requirements of section 13(f)(2), the Commission proposed new rule 13f-2 (“Proposed Rule 13f-2”) and related form (“Proposed Form SHO”) under the Exchange Act.
In the Proposing Release, the Commission stated that the required short sale disclosures that would be collected under Proposed Form SHO and the aggregated data published pursuant to Proposed Rule 13f-2 would increase transparency and provide several important benefits to market participants and regulators. Such aggregated information would help inform market participants regarding the overall short sale activity by reporting Managers. More information about the short sale activity and gross short positions of reporting Managers may promote greater risk management among market participants and may facilitate capital formation to the extent that greater transparency bolsters confidence in the markets. As discussed in the Proposing Release, the Commission's regular access to Proposed Form SHO data would bolster the Commission's oversight of short selling, as Proposed Rule 13f-2 and Proposed Form SHO would improve the utility of information available to the Commission and other regulators.
Additionally, to supplement the short sale data made available to the Commission in Proposed Form SHO filings, the Commission proposed a new rule at 17 CFR 242.205 prescribing a “buy to cover” order marking requirement under Regulation SHO (“Proposed Rule 205”) for certain purchase orders effected by a broker-dealer for its own account or for the account of another person at the broker-dealer, if, at the time of order entry, the purchaser had a gross short position in such security in the account for which the purchase is being made. The Commission also proposed amendments to the NMS plan governing the CAT (“Proposed CAT Amendments”) to require the reporting of “buy to cover” order marking information and of reliance on the bona fide market making exception in Rule 203(b)(2)(iii) of Regulation SHO (“BFMM locate exception”). Proposed Rule 205 and the Proposed CAT Amendments were designed to fill an information gap for the Commission and other regulators by providing insights into the lifecycle of a short sale that are not available under existing data sources.
The Commission received robust comment on Proposed Rule 13f-2, Proposed Form SHO, Proposed Rule 205, and the Proposed CAT Amendments (collectively, the “Proposals”). Comments were submitted by individual investors as well as other market participants, such as trade associations, institutional investment managers, investment advisers, broker-dealers, non-profit organizations, and academicians. These comments, which are discussed in context below, included a variety of different viewpoints on various aspects of the Proposals.
As discussed in further detail below, some commenters recommended changes to the Proposals in response to their concerns about: the scope of Proposed Rule 13f-2; the underlying approach and levels of the proposed thresholds that would trigger a reporting obligation under Proposed Rule 13f-2; the feasibility of operationalizing Proposed Rule 205 in a manner that would result in the gathering of meaningful short sale-related data; and the necessity for the Proposed CAT Amendments.
Some commenters stated that the Commission did not sufficiently articulate the benefits of, or regulatory justification for, the Proposals and did not accurately estimate or adequately justify the costs and impacts of the new reporting requirements.
For the reasons discussed more fully in Parts II-IV below, and to balance implementation and compliance costs and burdens with the Commission's goal of enhancing transparency regarding short selling, the Commission is adopting Rule 13f-2 and related Form SHO with certain modifications in response to comments.
Final Rule 13f-2 will require Managers (defined in section 13(f)(6)(A) of the Exchange Act) to report to the Commission, on a monthly basis on related Form SHO, certain short position data and short activity data for certain equity securities. In particular:
• On the Cover Page of Form SHO, Managers will be required to report certain basic information including its name, mailing address, business telephone number and business email, as well as the name, title, business telephone number and business email of the Manager's contact employee for the Form SHO report; and the date the report is filed. The Manager will also provide its non-lapsed Legal Entity Identifier (“LEI”) if it has one. If other Managers are required to be listed in the “Other Manager(s) Reporting for this Manager” section of the Cover Page, the Manager will also be required to include the name and non-lapsed LEI of each such “Other Manager” listed, if the LEI of such “Other Manager(s)” is available to the Manager filing the Form SHO report.
• With regard to each individual equity security reported on by Managers
• With regard to Information Table 1 of Form SHO, the Manager will also report the number of shares of the reported equity security that represent the Managers' gross short position at the close of the last settlement date of the calendar month reporting period, as well as the corresponding U.S. dollar value of this reported gross short position.
• With regard to Information Table 2 of Form SHO, for each reported equity security, for each individual settlement date during the calendar month reporting period, a Manager will report “net” activity in the reported equity security. The net activity reported by a Manager will be expressed by a single identified number of shares of the reported equity security, and will reflect offsetting purchase and sale activity by Managers. A positive number of shares identified will indicate net purchase activity in the equity security on the specified settlement date, while a negative number of shares identified will indicate net sale activity in the equity security on the specified settlement date.
Managers will report such information regarding each equity security if the following thresholds are met:
• With respect to any equity security that is of a class of securities that is registered pursuant to Exchange Act section 12
• With respect to any equity security that is of a class of securities of an issuer that is not a reporting company issuer as described above (a “non-reporting company issuer”) in which the Manager meets or exceeds a gross short position in the equity security with a U.S. dollar value of $500,000 or more at the close of regular trading hours on any settlement date during the calendar month. (“Threshold B”).
The Commission will then publish aggregate information as follows:
• With regard to Information Table 1 of Form SHO, the Commission will publish, for each class of equity securities, as an aggregated number of shares across all reporting Managers, the number of shares of the reported equity security that represent the Managers' gross short position at the close of the last settlement date of the calendar month, as well as the corresponding aggregated U.S. dollar value of this reported gross short position.
• With regard to Information Table 2 of Form SHO, for each reported equity security, for each individual settlement date during the calendar month, the Commission will publish the net activity in the reported equity security, as aggregated across all reporting Managers.
The Commission is also adopting, substantially as proposed, the amendment to the CAT NMS Plan to require broker-dealers with a reporting obligation to CAT, to report whether an original receipt or origination of an order to sell an equity security is a short sale for which a market maker is claiming the BFMM locate exception. However, for the reasons discussed below, the Commission is not adopting Proposed Rule 205 or the CAT “buy to cover” reporting requirements.
• Streamlining Form SHO reports by not adopting as proposed the requirement to report hedging classifications on Information Table 1, and by requiring a lower level of granularity of reporting on Information Table 2;
• Adjusting the calculation of the dollar value prong of the reporting threshold for equity securities of reporting company issuers (
• Requiring in Rule 13f-2 and in the instructions to Form SHO that, for purposes of determining whether a Manager meets or exceeds a reporting threshold, a Manager shall determine its gross short position “at the close of regular trading hours” in the equity security, rather than at the “end of day” as was provided for in the instructions to Proposed Form SHO;
• Not adopting Proposed Rule 205 and, consequently, not adopting the Proposed CAT Amendment requiring a “buy to cover” order mark in order receipts and order origination reports submitted to the CAT; and
• Making modifications to the text of Rule 13f-2 and the instructions to Form SHO to provide context and enhance comprehensibility, such as—adding a reference in the definition of “gross short position” to “short sales” as defined in Rule 200(a) of Regulation SHO and making minor adjustments to phrasing in the definition;
• Making non-substantive, technical changes to correct inadvertent
Exchange Act section 13(f) pertains to “Reports by Institutional Investment Managers.”
As defined in section 13(f)(6)(A) of the Exchange Act and for purposes of Proposed Rule 13f-2, “institutional investment manager” includes any person, other than a natural person, investing in or buying and selling securities for its own account, and any person exercising investment discretion with respect to the account of any other person.
Proposed Rule 13f-2(b)(3) states that “investment discretion” has the same meaning as in 17 CFR 240.13f-1(b) (“Rule 13f-1(b) under the Exchange Act”),
One commenter encouraged the Commission to expand the scope of market participants subject to reporting under Proposed Rule 13f-2 “beyond just Managers.”
As a potential alternative to Proposed Rule 13f-2, however, this commenter suggested, in part, that the current FINRA short interest reporting regime could be enhanced, and subsequently codified, to address potential limitations in the currently available short sale-related data. However, because FINRA's short interest reporting is applicable only to broker-dealers that are FINRA member firms, Managers represent a more diverse group of market participants than is required under FINRA reporting (as was suggested as a potential alternative by the commenter). As stated above, Managers typically can include various market participants, including brokers and dealers, as well as investment advisers, banks, insurance companies, pension funds and corporations. Accordingly, the Commission is adopting as proposed Rule 13f-2(b)(1) to define institutional investment managers as having the same meaning as in Exchange Act section 13(f)(6)(A). Short sale-related data reported by Managers on Form SHO will provide additional context to, and otherwise supplement, currently available data by, for example, distinguishing directional short selling of Managers from short sale activity effected by market makers and liquidity providers. This approach should reduce the reporting of non-directional, “transient” short sales activity and provide market participants with more focused information on substantial short positions held by Managers.
Another commenter suggested that the Commission consider an exemption for certain types of Managers that do not regularly utilize short positions or that only utilize short positions for passive investing purposes.
In addition, the Commission did not receive any comments regarding the definition of “investment discretion” as proposed. The Commission is adopting Rule 13f-2(b)(3) as proposed to define the term “investment discretion” as having the same meaning as in Rule 13f-1(b) (which, among other things, incorporates the definition in section 3(a)(35) of the Exchange Act). In addition, Managers that will file reports on adopted Form SHO likely have experience reporting on Form 13F, for which this same definition is used.
Under the proposed rule, a Manager would have had to file a Form SHO report with regard to:
• Any equity security of an issuer that is registered pursuant to section 12 of the Exchange Act
• Any equity security of an issuer that is not a reporting company issuer as described above in which the Manager meets or exceeds a gross short position in the equity security with a U.S. dollar value of $500,000 or more at the close of regular trading hours on any settlement date during the calendar month (Threshold B).
As proposed, the reporting thresholds in Rule 13f-2(a)(1) and (2) (each a “Proposed Reporting Threshold”) applied to equity securities, as the term “equity security” is defined in section 3(a)(11) of the Exchange Act
The Commission received several comments on Proposed Rule 13f-2's and Proposed Form SHO's proposed scope of securities, with commenters expressing a variety of views. Most commenters took an expansive view, exemplified by one such commenter's statement that “all different securities and ETFs should be required to report all short sale data. The more information that is available to every investor and the Commission the better.”
Most commenters supported the applicability of Proposed Rule 13f-2 to short positions in ETFs, some expressing specific concerns about “improper” use of ETFs to leverage short positions.
The Commission disagrees with the commenter that reporting about gross short positions in ETFs will not provide useful information to the public and the Commission. Establishing short positions in an ETF can provide short exposure to a diverse set of equity securities or create a directional short strategy such as leveraged shorting. Because of their multipurpose nature, ETFs are a substantial piece of the short-
Some commenters recommended that fixed-income securities be added to the proposed scope of securities.
Fixed income securities are not subject to the Commission's short sale rules. Market participants, including Managers, are currently accustomed to complying with the short sale rules with regard to equity securities that meet the definition of short sales in Rule 200(a) of Regulation SHO.
Some commenters also recommended excluding options, warrants, and other convertibles from the rule.
Certain derivatives, options, warrants, and convertibles are themselves equity securities for purposes of section 3(a)(11) of the Exchange Act and Rule 3a11-1 thereunder, and therefore for purposes of final Rule 13f-1.
Some commenters recommended narrowing the universe of “in-scope” securities to lessen the burden on Managers and to help to ensure compliance with Proposed Rule 13f-2. Certain commenters recommended that the Commission create and publish a list of securities subject to Form SHO reporting, much like the Commission's Official List of Section 13(f) Securities (“13F List”) required by statute to be made available to the public pursuant to section 13(f)(4) of the Exchange Act
Narrowing the scope of securities to the 13F List would effectively exclude certain equity securities that are subject to the requirements of Regulation SHO, which the Commission continues to believe would be inconsistent with the Commission's objective to publish short sale-related data under Rule 13f-2 that will provide additional context to market participants regarding securities that are subject to the Commission's current short sale rules.
Additionally, with respect to long position reporting, section 13(f)(1) expressly provides that the Commission shall make available to the public a list of all equity securities that are subject to such reporting.
Some commenters recommended tailoring the scope of securities subject to Rule 13f-2 reporting to the equity securities of U.S. reporting company issuers.
Other commenters raised questions as to whether the Commission's jurisdiction extended to equity securities not traded in the U.S. One such commenter, highlighting the disparity between Proposed Rule 13f-2 reporting and reporting of long positions in the same securities, questioned why it would be in the public interest to require more expansive disclosure with respect to short positions than long positions, and stated that the “proposed scope of the rule would provide U.S. investors with information that is of limited value, particularly with respect to non-U.S. securities.”
Exchange Act section 13(f)(2)'s cross-border reach is based on the territorial approach that the Commission has applied when crafting rules to implement other provisions of the Exchange Act.
The Commission is adopting Rule 13f-2 and Form SHO to help enhance transparency regarding short selling in equity securities—including both exchange-listed and over-the-counter securities, and ETFs. The Commission continues to believe that, through the publication of short sale-related data to investors and other market participants, the information reported by Managers will provide important additional context to market participants regarding short sale activity in these equity securities by Managers. The Commission disagrees that the reported information would be of “limited value” as was suggested by a commenter. Transparency regarding short selling by Managers of securities of U.S. and non-U.S. issuers is important regardless of where those sales occur.
For the reasons discussed above, the Commission is adopting the scope of securities as originally proposed. Specifically, the final rule will cover equity securities as defined in section 3(a)(11) of the Exchange Act and Rule 3a11-1 thereunder. This scope of securities includes both exchange-listed and OTC equity securities, including, inter alia, ETFs, certain derivatives, and options, warrants and other convertibles, which is consistent with the equity securities to which Rules 200, 203, and 204 of Regulation SHO apply.
To balance the interests of gathering and disclosing data and the potential costs to reporting Managers, the Commission proposed separate thresholds for short positions in reporting company issuers, or Threshold A, and non-reporting company issuers, or Threshold B.
The approach to Threshold A, as described in the Proposing Release, was designed to ensure that a substantial short position in either a small capitalization security or a large capitalization security could potentially trigger a reporting obligation under Threshold A.
Regarding Threshold B, as discussed in the Proposing Release, a $500,000 or more threshold for non-reporting company issuer securities is similar to the median dollar value of a position of 2.5 percent of the market capitalization of OTC stocks for which the Commission was able to obtain information on total shares outstanding.
As discussed in the Proposing Release, to determine whether the proposed dollar value prong of Threshold A (Proposed Rule 13f-2(a)(1)(i)) or Threshold B (Proposed
As discussed in the Proposing Release, to determine whether the second prong of Threshold A (Proposed Rule 13f-2(a)(1)(ii))—2.5 percent or higher monthly average gross short position as a percentage of shares outstanding in the equity security—is met, the Manager would be required to (a) identify its gross short position in the equity security at the close of each settlement date during the calendar month of the reporting period, and divide that figure by the number of shares outstanding in such security at the close of that settlement date, then (b) add together the daily percentages during the calendar month as determined in (a) and divide the resulting total by the number of settlement dates during the calendar month reporting period. The number of shares outstanding of the security for which information was being reported would have been determined by reference to an issuer's most recent annual or quarterly report, and any subsequent update thereto, filed with the Commission.
As discussed below, the Commission received numerous comments regarding various aspects related to the Proposed Reporting Thresholds. Generally, these comments varied, with some commenters recommending, for example, that the Commission raise the thresholds (which would trigger less gross short position reporting) and others recommending the Commission lower or eliminate the thresholds (which would trigger additional gross short position reporting).
Some commenters recommended increasing the proposed Reporting Threshold A by, for example, doubling the percent of shares outstanding threshold from 2.5 percent to 5 percent so as to be consistent with the existing reporting requirements of 17 CFR 240.13d-1 (“Exchange Act Rule 13d-1”)
Other commenters proposed that the U.S. dollar value-based threshold of Threshold A be raised.
For reasons set forth below and discussed more fully in Part VIII, increasing the proposed Threshold A percentage-based threshold from 2.5 percent or more of total shares outstanding to 5 percent (
Nor does the Commission believe that raising the dollar-based threshold of Threshold A from $10 million to $100 million to be consistent with the tenfold increase in percentage threshold is warranted or appropriate. Based on its analysis of Form SH data as discussed in the Proposing Release,
Other commenters recommended that the Proposed Reporting Thresholds be reduced or eliminated. Some of these commenters were concerned that the Proposed Reporting Thresholds could be too lenient and under-inclusive,
Some commenters, often in conjunction with recommendations to increase the Proposed Reporting Thresholds, suggested applying a single threshold metric. One commenter proposed the Commission adopt a single U.S. dollar value-based threshold for all issuers in order to limit the impact of
The Reporting Thresholds are designed to require the filing of Form SHO by Managers with substantial gross short positions. The two-pronged approach of Threshold A measures the size of a Manager's short position relative to both dollar amount and number of shares. The dollar value-based prong (Rule 13f-2(a)(1)(i)) captures Managers with substantial short positions, even if such positions are relatively small compared to the market cap of the issuer. The percentage of total shares outstanding-based prong (Rule 13f-2(a)(1)(ii)) captures Managers with gross short positions that are large relative to the size of the issuer and, therefore, could have a significant impact on the issuer. With respect to securities of non-reporting company issuers, however, the Commission understands that the number of total shares outstanding may not be readily and consistently accessible.
Another commenter recommended not having differing thresholds for reporting company issuers and non-reporting company issuers.
For similar reasons, and as discussed in the “Scope of Reported Securities” section above, the Commission will not be publishing a “Form SHO List” with total shares outstanding to assist in Manager calculations, as one commenter suggested. The thresholds as adopted are designed to reduce operational burdens while capturing substantial short positions in both reporting and non-reporting company issuers. Adopting a much lower dollar threshold for non-reporting company issuers than that for reporting company issuers results in Managers not being required to determine percentages of total shares outstanding and, due to sparse data in non-reporting company issuer markets, Managers would avoid the difficulty of having to do so. A “Form SHO List” with total shares outstanding would not be necessary for Managers reporting positions in reporting company issuers because, unlike Rule 13f-1 securities, Rule 13f-2 covers equity securities as discussed above,
Some commenters stated that the Proposing Release did not adequately account for the burdens associated with monitoring for whether a Reporting Threshold is met,
Some commenters requested that the Reporting Thresholds be calculated based on “net” short position rather than “gross” short position as proposed. Multiple commenters expressed concern that using a gross short position calculation would not accurately reflect risk in the markets.
As discussed in the Proposing Release, under the proposal, a Manager would report its “gross” short position in an equity security without offsetting such gross short position with “long” shares of the equity security or economically equivalent long positions obtained through derivatives of the equity security.
In addition, the Commission is making additional modifications, discussed further below, that should alleviate burdens on market makers that may otherwise need to undertake the obligation of calculating reporting thresholds despite generally holding positions below such thresholds. Specifically, the Commission is modifying the threshold calculations to a monthly average of daily gross short positions rather than a single daily position, as discussed under the subheading “When the Reporting Obligation is Triggered” below. Further, as discussed in Part III below, the Commission is not adopting the proposed requirement to report “buy to cover” activity, which a commenter
To ease reporting burdens and reduce costs, some commenters proposed decreasing the frequency of certain aspects of the U.S. dollar value-based aspects of the Reporting Thresholds by instead using monthly average positions, instead of the proposed “close of regular trading hours on any settlement date” frequency.
Threshold A, as adopted, will require reporting by Managers that have, for each equity security of a reporting company issuer, either (1) a monthly average gross short position at the close of regular trading hours in the equity security with a U.S. dollar value of $10 million or more,
In addition, similar to the discussion in the Proposing Release regarding the use of a monthly average gross short position of 2.5 percent or more of total shares outstanding,
Threshold B, as proposed, and as adopted, will require reporting by Managers that have, for each equity security of a non-reporting company issuer, a gross short position in the equity security with a U.S. dollar value of $500,000 or more at the close of regular trading hours on any settlement date during the calendar month.
Some commenters maintained that the Commission should not have based the Proposed Reporting Thresholds on Form SH data, as the Form SH data was collected during “a period of abnormal market conditions that does not reflect recent changes in the markets,” and urged the Commission to more robustly support its rationale for selecting the Reporting Thresholds.
The Commission disagrees with one commenter that stated that Form SH data was “stale and limited.”
To enhance transparency of short sale-related data reported and published pursuant to Proposed Rule 13f-2, Proposed Rule 13f-2(a)(3) provided that Managers would file Form SHO (and any amendments thereto) with the Commission on EDGAR.
Several commenters raised concerns about how the confidentiality of the data reported on Form SHO via EDGAR would be preserved.
While no technology system or infrastructure is impervious to cyberattack, the Commission employs an array of actions to safeguard and protect the confidentiality and security of all information reported to EDGAR, which will include data reported on Form SHO.
As described in the Proposing Release, Managers would use Proposed Form SHO for reports to the Commission required by Proposed Rule 13f-2. The Commission proposed that Managers would file a report on Proposed Form SHO with the Commission within 14 calendar days after the end of each calendar month with regard to each equity security in which the Manager meets or exceeds a Reporting Threshold.
The Commission stated in the Proposing Release that requiring Form SHO to be filed in custom XML format, since it is a structured, machine-readable data language, would facilitate more thorough review and analysis of the reported short sale disclosures by the Commission, which would increase the efficiency and effectiveness with which the Commission could identify manipulative short selling strategies.
As proposed, if a Manager uses the web-fillable Proposed Form SHO on EDGAR and encounters a technical error when filling out the form, such Manager would be required to correct the identified technical error before being permitted to file the Proposed Form SHO through EDGAR. If a Manager uses its own software tool to file a Proposed Form SHO filing to EDGAR directly in Proposed Form SHO-specific XML, and a technical error is identified by EDGAR after the filing is sent, such Manager would receive an error message that the filing has been suspended, and would be required to correct the identified technical error and re-file the Proposed Form SHO through EDGAR.
As an alternative, the Commission also discussed whether Proposed Form SHO should be required to be filed in Inline eXtensible Business Reporting Language (“Inline XBRL”).
The Commission received some comments about the use of Form SHO-specific XML in filing Form SHO. In response to Q39 in the Proposing Release,
The Commission is adopting the custom XML data reporting requirement as proposed. As explained in the Proposing Release, the filing options for Form SHO are consistent with other EDGAR filings that are filed in Form-specific XML-based languages.
Finally, the Commission's XML schema is designed to include validations for each data field on Form SHO to help ensure consistent formatting and completeness. The Commission continues to believe that requiring Form SHO to be filed via Form-SHO specific XML, a structured machine-readable data language, will facilitate more thorough review and analysis of the reported short sale disclosures by the Commission, increasing the efficiency and effectiveness of the Commission's understanding of short selling and systemic risk. Additionally, most Managers have experience filing EDGAR forms that use similar EDGAR Form-specific XML-based data languages, such as Form 13F.
Under Proposed Rule 13f-2(a), a Manager would have been required to file the required information on Form SHO with the Commission within 14 calendar days after the end of each calendar month. Proposed Rule 13f-2(a)(3) provides that certain information reported on Proposed Form SHO would be published by the Commission on an aggregated basis. No time frame for publication by the Commission was provided in Proposed Rule 13f-2. In the Proposing Release, however, the Commission estimated that it would publish the aggregated information within one month after the end of the calendar month.
Comments on the frequency of reporting and publication varied. Some commenters called for more frequent reporting by Managers and, by implication, more frequent publishing by the Commission of information from Form SHO reports. Several of these commenters suggested that technology permits more frequent—
Commenters taking the opposite view recommended that additional time be given for Manager reporting and Commission publication. One such commenter recommended that the Commission align the proposed timelines for preparing and filing Form SHO reports with existing filing requirements for other Commission reports and forms, to allow for better coordination of the process of including short sale-related data in multiple reporting frameworks.
While adopting the proposed timeframes will delay the public dissemination of aggregate short positions by about a month, the Commission believes a longer delay such as 28 days for initial filings or 45 days for all filings is unnecessary. FINRA's current short interest reporting, for example, is published twice a month, resulting in a delay of about two weeks.
After considering comments, the Commission is adopting Rule 13f-2(a) as proposed, and continues to estimate that it will publish aggregated data derived from Form SHO reports within one calendar month after the end of the reporting calendar month.
Form SHO, as proposed, consists of two parts: Cover Page and Information Tables. As discussed more fully below:
• The
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The Commission proposed that a Manager provide the active LEI, if any, of each Manager listed on the Cover Page. The Commission also proposed that a Manager report on each of the Proposed Form SHO Information Tables the FIGI and CUSIP number of each security on which information is being reported, and the active LEI, if any, of
The Commission received only a few comments regarding the proposed requirement to report certain financial identifiers, including CUSIP and FIGI (which identify specific securities), and LEI (which identifies specific entities) on Form SHO.
In DFA section 929X, Congress specifically directed the Commission to include CUSIP in short sale disclosure rules.
The Commission will also adopt, as proposed, the requirement that Managers report in Column 6 of each of the Form SHO Information Tables the FIGI of the equity security for which information is being reported, if a FIGI has been assigned. Like CUSIP, FIGI provides a methodology for identifying securities, and reporting a FIGI, if assigned, will provide additional identifying information that will provide additional clarity, not confusion, to market participants and the public. Unlike CUSIPs,
To aid in the identification of the issuers referenced in Form SHO reports, the Commission is also adopting a requirement that Managers report in Column 3 of each Form SHO Information Table, the LEI, if any, of the issuer of the security about which information is reported on Form SHO.
With respect to the proposed requirement that a Manager provide its own LEI, if it had one, and, if available to the Manager making the Proposed Form SHO filing, the active LEI of each Manager listed on the Form SHO Cover Page as an “Other Manager Reporting for” the Manager making the Proposed Form SHO filing, the Commission sought comment on whether it should require every Manager filing a Proposed Form SHO to obtain an LEI.
The Commission acknowledges that LEIs do provide a precise and consistent means of identification of legal entities. However, after considering the comments received, and because LEIs would supplement existing identifying information provided for Managers and issuers listed in Form SHO filings, the Commission is not requiring Managers subject to Rule 13f-2 to obtain (and maintain non-lapsed) LEIs to provide on the Cover Page of Form SHO reports and, when appropriate for the “Other Manager(s) Reporting for this Manager” section of the Form SHO Cover Page to be completed, to provide a non-lapsed LEI for each Manager listed in the “Other Manager(s) Reporting for this Manager” of the Form SHO Cover Page. However, the Commission may consider this issue in the future.
As proposed, and pursuant to Special Instructions 2-5 of Proposed Form SHO, a Manager would report on the Cover
Other than with respect to financial identifiers as discussed above, the Commission did not receive any comments on the contents of the Cover Page. As a result, the Commission is adopting Special Instructions 2-5 of Form SHO as proposed, with minor technical modifications. For greater precision (but no change in the meaning) in the terminology used in Form SHO as adopted, an LEI that is currently in effect is referred to as a “non-lapsed LEI” rather than an “active LEI” (the terminology used in Proposed Form SHO). Also, the Cover Page contact information for the reporting Manager and its “Contact Employee” has been updated to require the use of email rather than facsimile.
Under Proposed Rule 13f-2, Managers meeting a Reporting Threshold would report certain information, including end of month gross short position information regarding transactions that have settled during the calendar month being reported, and certain hedging information that would help to indicate whether the reported gross short position is directional or non-directional in nature.
Specifically, as proposed, the Manager would report the following information on Information Table 1:
• In Column 1, a Manager would enter the last day of the calendar month being reported by the Manager on which a trade settles. This information would identify the month being reported by the Manager.
• In Column 2, a Manager would enter the name of the issuer to identify the issuer of the equity security for which information is being reported.
• In Column 3, a Manager would enter the issuer's active LEI, if any. The LEI provides standardized information that would enable the Commission and market participants to more precisely identify the issuer of each equity security for which information is being reported.
• In Column 4, consistent with section 13(f)(2), a Manager would enter the title of the class of the equity security for which information is being reported.
• In Column 5, consistent with section 13(f)(2), a Manager would enter the nine (9) digit CUSIP number of the equity security for which information is being reported, if applicable.
• In Column 6, a Manager would enter the twelve (12) character, alphanumeric FIGI of the equity security for which information is being reported, if a FIGI has been assigned. Like CUSIP, FIGI provides a methodology for identifying securities.
• In Column 7, a Manager would enter the number of shares that represent the Manager's gross short position in the equity security for which information is being reported at the close of regular trading hours on the last settlement date of the calendar month of the reporting period. The term “gross short position” means the number of shares of the security for which information is being reported that are held short, without inclusion of any offsetting economic positions (including shares of the equity security for which information is being reported or derivatives of such security).
• In Column 8, a Manager would enter the U.S. dollar value of the shares reported in Column 7, rounded to the nearest dollar. A Manager would report the corresponding dollar value of the reported gross short position by multiplying the number of shares of the security for which information is being reported by the closing price at the close of regular trading hours on the last settlement date of the calendar month. In circumstances where such closing price is not available, the Manager would use the price at which it last purchased or sold any share of that security. This additional information regarding the dollar value of the reported short position would provide additional transparency and context to market participants and regulators.
• In Column 9, a Manager would indicate whether the identified gross short position in Column 7 is fully hedged (“F”), partially hedged (“P”), or not hedged (“0”) at the close of the last settlement date of the calendar month of the reporting period.
Comments regarding the contents of Information Table 1 raised concerns about the proposal to require hedging information in Column 9. As discussed below, the Commission is adopting Information Table 1, as proposed, except that the Commission will not require Managers to report hedging information as originally proposed in Column 9 of the table.
The proposal would have required Managers to report on Information Table 1 whether they were “fully hedged” or “partially hedged” based on whether a Manager held an offsetting position that completely or partially reduced the risk of price fluctuations for its position in that equity security, respectively.
Some commenters expressed concerns about the meaning of “fully hedged” and “partially hedged” under the proposed rule. These commenters expressed the view that because there is no universal definition of hedging in the marketplace, or clear guidance on this matter from the Commission, Managers can reasonably come to different conclusions regarding the extent to which similar positions are hedged.
Another commenter stated that although a change in hedging status may correspond with a change in manager sentiment, it is also possible that such a change may simply be the result of other unrelated objectives, such as rebalancing a portfolio.
Some commenters that supported requiring hedging indicators generally rejected complaints about the costs and burdens related to the proposed reporting of hedging status as part of Information Table 1, stating that with modern technology, the requirements are “easily automated and with minimal cost incurrence.”
After considering the comments received,
While the Commission laid out the rationale behind the hedging reporting requirement in the Proposing Release, comments received, as discussed above, persuaded the Commission that such reported data may not result in as consistent and accurate data as it originally envisioned. In addition to the definitional challenges discussed above, the Commission recognizes the challenges of applying the Rule 13f-2 reporting requirements in the scenario when a Manager has investment discretion over multiple accounts. For example, purchases and sales in different accounts may not be intended to hedge one another, but the proposal would have required that the Manager indicate that it was “partially-hedged” nonetheless. Such information would not be an accurate reflection of the Manager's hedging status, and thus would not be useful. As another example, a Manager that has purchased a few shares of a security (for example, 100 shares) for which it holds a substantial short position (for example, 1 million shares) would have had to report that it was “partially hedged” without regard for the scale of such purchases in relation to the position for which it would have had to report it was hedging. That said, the Commission continues to believe, as did some commenters favoring the proposed requirement, that if accurate data on hedging could be collected, such information would be useful to regulators.
The Commission considered whether, as suggested by a commenter, the hedging indicator could be simplified so that Managers would be required only to report whether a position is not hedged.
Accordingly, the Commission is not adopting the hedging reporting requirement as proposed.
As proposed, Information Table 2 of Form SHO captures daily activity that increases or decreases a Manager's short position for each settlement date during the calendar month reporting period. More specifically, on proposed Form SHO, a Manager would report the number of shares of the equity security that: (i) were sold short; (ii) were purchased to cover, in whole or in part, an existing short position in the security; (iii) were acquired through the exercise or assignment of an option, through a tendered conversion, or through a secondary offering transaction,
Specifically, as proposed, the Manager would report the following information on Information Table 2 for each date during the reporting period on which a trade settled (settlement date) during the calendar month.
• In Column 1, a Manager would enter the date during the reporting period on which a trade settled for the activity reported. This would identify the settlement date activity being reported.
• In Column 2, consistent with section 13(f)(2), a Manager would enter the name of the issuer, to identify the issuer of the security for which information is being reported.
• In Column 3, a Manager would enter the issuer's active LEI, if the issuer had an active LEI. The LEI provides standardized information that would enable the Commission and market participants to more precisely identify the issuer of each equity security for which information is being reported.
• In Column 4, consistent with section 13(f)(2), a Manager would enter the title of the class of the security for which information is being reported.
• In Column 5, consistent with section 13(f)(2), a Manager would enter the nine (9) digit CUSIP number of the equity security for which information is being reported, if applicable.
• In Column 6, a Manager would enter the twelve (12) character, alphanumeric FIGI of the equity security for which information is being reported, if a FIGI has been assigned. Like CUSIP, FIGI provides a methodology for identifying securities.
• In Column 7, for the settlement date set forth in Column 1, a Manager would enter the number of shares of the equity security for which information is being reported that resulted from short sales and settled on that date.
• In Column 8, for the settlement date set forth in Column 1, a Manager would enter the number of shares of the security for which information is being reported that were purchased to cover, in whole or in part, an existing short position in that security and settled on that date. This activity information would allow the Commission and other regulators to more quickly identify a potential “short squeeze,” which could be evidenced by short sellers closing out short positions by purchasing shares in the open market. If it appeared that a short squeeze may have occurred through potential manipulative behavior involving short selling, the Commission could perform further analysis regarding the squeeze. Increased risk of detection could deter some market participants seeking to orchestrate a short squeeze.
• In Column 9, for the settlement date set forth in Column 1, a Manager would enter the number of shares of the security for which information is being reported that are acquired in a call option exercise that reduces or closes a short position on that security and settled on that date. The exercise or assignment of an option position can reduce or close a short position in the underlying equity security.
• In Column 10, for the settlement date set forth in Column 1, a Manager would enter the number of shares of the security for which information is being reported that were sold in a put option exercise that created or increased a short position on that security and settled on that date. Options can be used to create economic short exposure such that an exercise or assignment of an option could create or increase a short position in the underlying equity security.
• In Column 11, for the settlement date set forth in Column 1, a Manager would enter the number of shares of the security for which information is being reported that were sold in a call option assignment that created or increased a short position on that security and settled on that date. Options can be used to create economic short exposure such that an exercise or assignment of an option could create or increase a short position in the underlying equity security.
• In Column 12, for the settlement date set forth in Column 1, a Manager would enter the number of shares of the security for which information is being reported that were acquired in a put option assignment that reduced or
• In Column 13, for the settlement date set forth in Column 1, a Manager would enter the number of shares of the security for which information is being reported that are acquired as a result of tendered conversions that reduced or closed a short position on that security and settled on that date. Holders of convertible debt often hold short positions to hedge their convertible position. When the shares of the convertible debt are converted, they can reduce or close a short position in the equity security.
• In Column 14, for the settlement date set forth in Column 1, a Manager would enter the number of shares of the security for which information is being reported that were obtained through a secondary offering transaction that reduces or closes a short position on that security and settled on that date. Purchasing securities in a secondary offering
• In Column 15, for the settlement date set forth in Column 1, a Manager would enter the number of shares of the security for which information is being reported that resulted from other activity not previously reported in Information Table 2 that creates or increases a short position on that security and settled on that date. Other activity to be reported includes, but is not limited to, shares resulting from ETF creation or redemption activity.
• In Column 16, for the settlement date set forth in Column 1, a Manager would enter the number of shares of the security for which information is being reported that resulted from other activity not previously reported on Information Table 2 that reduces or closes a short position on that security and settled on that date. Other activity to be reported includes, but is not limited to, shares resulting from ETF creation or redemption activity.
The Commission stated in the Proposing Release that it believes that the information in Columns 9, 12, 13, 14, and 16 of proposed Information Table 2 would be useful in providing the Commission additional context and transparency into how and when short positions in the reported equity security are being closed out or reduced.
Such daily activity information would provide market participants and regulators with additional context and transparency into whether, how, and when reported gross short positions in the reported equity security are being closed out (or alternatively, increased) as a result of the acquisition or sale of shares of the equity security resulting from call options exercises or assignments; put options exercises or assignments; tendered conversions; secondary offering transactions;
The Commission solicited and received comment on the categories of short sale activity data that a Manager would be required to report on new Form SHO Information Table 2. Commenters differed on the appropriate level of transparency of the short sale-related data presented. Some commenters called for robust—if not complete—transparency of short sale-related data, while other commenters expressed concerns about the breadth of the activity information to be reported, the related cost burdens to report such information, and data security.
Individual investor commenters, generally, were critical of the opacity of current short position and short activity data disclosure. A group consisting of retail investors stated there was a “lack of transparency around short positions, the inability to adequately quantify short interest, and the ability for firms to skirt regulation through derivative positions such as options and security-based swaps.”
Other commenters acknowledged the Commission's authority to promulgate rules to capture short sale-related data but took the position that Form SHO reporting should be limited to the bare minimum necessary to satisfy the statutory mandate of DFA section 929X (
Several commenters expressly or effectively questioning the need for Information Table 2, also raised the concern that the short activity monitoring necessary to comply with the reporting requirements of Proposed Form SHO would require any Manager that engages in short selling to expend significant time and resources to enhance or revamp its systems to monitor activity continuously, without certainty as to if or when its short selling activity would meet or exceed the reporting thresholds.
The Commission continues to believe that publication of aggregated short position data, on a delayed basis, is a reasonable means of minimizing the potential negative impacts of short position and short activity disclosures on short selling and allaying data security concerns raised by commenters while at the same time increasing transparency.
The data to be reported in the following columns of Information Table 2 in Proposed Form SHO will provide regulators with additional context and transparency into how and when reported gross short positions were closed out or increased, which will help the Commission assess systemic risk.
However, the Commission is modifying the design of Information Table 2 of Proposed Form SHO to help reduce the costs and burdens of complying with the reporting requirements of Proposed Rule 13f-2 without sacrificing the level of
Under the reporting regime of Proposed Rule 13f-2, Managers would have been required to report each category of short activity information included in Columns 7-16 (above) of Information Table 2 of Proposed Form SHO.
Under the adopted version of Information Table 2, Columns 7-16 of Information Table 2 of Proposed Form SHO are replaced by a single, new Column 7, in which Managers will report net activity in the security for which information is being reported (represented as a number of shares). More specifically, Special Instruction 9.g of Form SHO, as adopted, requires Managers to report net change in short position reflecting how the gross short position in shares of the security for which information is being reported are being closed out—or alternatively, increased—as a result of the acquisition or sale of share activity determined by offsetting prescribed types of purchase and sale activity. Those prescribed types of purchase and sale activities correspond to the purchase and sale activities identified in Columns 7-16 of Proposed Form SHO. The net activity will be determined by Managers—rather than by the Commission—and reported to the Commission. The Commission will then aggregate the reported daily net change numbers across Managers for public dissemination. Under the adopted version of Information Table 2, the Commission will receive less granular information from reporting Managers than was proposed. The Commission, however, will receive net activity information from reporting Managers for each settlement date during the calendar month which will provide additional context and transparency into whether the reported gross short positions in the reported equity security are being closed out (or alternatively, increased) as a result of the acquisition or sale of shares of the equity security resulting from call options exercises or assignments; put options exercises or assignments; tendered conversions; secondary offering transactions; and other activity. The Commission believes that this is a reasonable approach that considers both those comments that supported additional transparency with regard to short sale-related information that would result from Information Table 2 reporting, and also comments about cost and data security concerns with regard to such reporting. This reported net activity information will assist the Commission in assessing systemic risk and in reconstructing unusual market events, including instances of extreme volatility.
These modifications in the final rule for Information Table 2 of Form SHO result in no change to the net activity information that will be made publicly available by the Commission. Under Proposed Rule 13f-2 and Proposed Form SHO, the Commission would publish net activity information for each reported equity security, aggregated across all categories of activity in Columns 7-16 of Information Table 2 of Proposed Form SHO, and aggregated across all reporting Managers. Under Rule 13f-2 and Form SHO, the Commission will publish this same net activity information for each reported equity security as originally proposed by the Commission.
To facilitate the Commission's process of aggregating the short sale-related information reported on Form SHO for publication, the Commission proposed that amendments to Form SHO must restate the Form SHO in its entirety. To inform the Commission that the filing is an amendment of a previously filed Form SHO, the Commission proposed that a Manager must check the box on the Form SHO Cover Page to indicate that the filing is an “Amendment and Restatement.” On the Cover Page of each Amendment and Restatement filed, the Commission proposed that a Manager must provide a written description of the revision being made, explain the reason for the revision, and indicate whether data from any additional Form SHO reporting period(s) (up to the past 12 calendar months) is/are affected by the amendment. If other reporting periods have been affected, the Commission proposed that a Manager shall complete and file a separate Amendment and Restatement for each previous calendar month so affected and provide a description of the revision being made and explain the reason for the revision.
In cases where a revision is reported in an Amendment and Restatement that changes a data point reported in the Form SHO by twenty-five (25) percent or more, the Commission proposed that the Manager must notify the Commission staff via the Office of Interpretation and Guidance of the Division of Trading and Markets (“TM OIG”) at
The Commission received some comments on the issue of amendments and restatements. One comment stated that the notification requirement for an amendment of 25 percent or more is too large, and that lower percentage revisions can be considered significant.
The Commission is adopting procedures for filing and amending Form SHO consistent with the Proposing Release but modified to no longer require Managers to separately notify the Commission that the reporting discrepancies presented in an Amendment and Restatement have occurred. A Manager that determines or is made aware that it has filed a Form SHO with errors that affect the accuracy of the information reported must file an amended Form SHO within ten (10) calendar days of discovery of the error. The Commission continues to believe that filing an amended Form SHO within 10 calendar days of discovery of the error will provide Managers with a reasonable period of time to prepare the Form SHO amendment, while helping to ensure that accurate information is received by the Commission in a timely manner.
The Commission is adopting the requirement, as proposed, that amendments to a previously filed Form SHO restate the Form SHO in its entirety, as described in Special Instruction 3 to Form SHO. Form SHO Special Instruction 3.a provides that on the Cover Page of each amended and restated Form SHO filing, a Manager must: check the box to indicate that the filing is an “Amendment and Restatement,” provide a written description of the revision being made, explain the reason for the revision, and indicate whether data from any additional calendar month reporting period(s) (up to the past 12 calendar months) is/are affected by the amendment. Consistent with the proposed procedures for filing an amended Form SHO, if other reporting periods have been affected, a Manager must complete and file a separate Amendment and Restatement for each previous calendar month so affected, and provide a description of the revision being made and explain the reason for the revision. As proposed and discussed further below, the Commission will provide aggregated data on a rolling twelve-month basis, with prior months' data updated as necessary to reflect data from Amendments and Restatements. The Commission continues to believe that limiting the requirement to file an amended Form SHO to twelve months will reduce the burden and cost on Managers.
The Commission is not adopting, however, the requirements that a Manager provide the Commission notice of the revision(s) reported in an Amendment and Restatement and an explanation of the reason(s) for the revision(s), as prescribed in Proposed Form SHO Special Instruction 3.b and 3.c;
Consistent with the proposed procedures for publishing data reported on or derived from Form SHO reports—including any Amendments and Restatements, the Commission plans to update prior months' aggregated Form SHO data on EDGAR to reflect information reported in Amendments and Restatements and will add an asterisk (
The instructions to Proposed Form SHO provided that all information that would reveal the identity of a Manager filing a Proposed Form SHO report with the Commission would be deemed subject to a confidential treatment request under 17 CFR 240.24b-2 (“Rule 24b-2”).
The Commission received a single comment regarding confidential treatment. Stating that there are a variety of valid reasons beyond the example provided in the Proposing Release that a Manager might seek confidential treatment of information reported on Proposed Form SHO, the commenter urged the Commission to adopt a more flexible process for seeking confidentiality that would enable Managers and the Commission staff to determine whether confidential treatment is appropriate.
As proposed, the instructions to Form SHO expressly provided that all information that would reveal the identity of a Manager filing a Proposed Form SHO report with the Commission would be deemed subject to a confidential treatment request under Rule 24b-2, as described in the “Filing of Form SHO” section of the General Instructions to Form SHO. Because the Commission does not intend those filings to be public, Rule 83 includes appropriate and less burdensome procedures and, accordingly, is revising the General Instructions to provide that data will also be deemed subject to a confidential treatment request under Rule 83.
As with the Proposed Rule, the Commission currently plans to publish only aggregated data derived from information provided in Proposed Form SHO reports. While it is possible a person may be able to determine the identity of a Manager (or reverse engineer a Manager's trading strategies) in a situation where only one person was selling short, especially where the short seller has publicly disclosed that it has a short position in a specific security, the Commission continues to believe that excluding such data from the aggregated data published by the Commission could affect the integrity of the data. The Commission anticipates that the risk of exposing a single short seller will be mitigated by the delay in publication of the aggregated data.
The Commission does not anticipate disclosing information in Form SHO, other than to the extent the data is included in the Commission's aggregated disclosures, and the Commission will deem the information included in Form SHO as being subject to a confidential treatment request under Rule 83. Accordingly, the Commission is further revising the General Instructions to provide that all information included in the Form SHO is deemed subject to a confidential treatment request under Rule 83. Pursuant to section 13(f) of the Exchange Act, the Commission may prevent or delay public disclosure of all other information reported on Form SHO in accordance with FOIA, section 13(f)(4) through (5), Rule 83, and any other applicable law.
The rules to prevent duplicative reporting of information regarding short positions and short activities of an equity security in Proposed Form SHO were partially modeled after those in Form 13F.
The Commission did not receive any comments regarding duplicative reporting, and for the reasons stated in the Proposing Release, is adopting Special Instruction 5 to Form SHO as proposed.
The Commission stated in the Proposing Release that it does not intend to verify the accuracy of the data reported by Managers, but may consider doing so in the future after assessing whether such verification would be useful or necessary to enhance the integrity of the data.
The Commission received many comments on the issue of Manager reporting and data verification. The comments supported implementing a Commission verification system for reported data, stating that reporting as proposed would lead to inconsistencies. Commenters expressed concerns regarding the self-reporting of data, citing the potential for errors or intentional manipulation of data.
The Commission is adopting the reporting requirement as proposed. Consistent with the Commission's statement in the Proposing Release, the Commission does not intend to verify the accuracy of the data received from the Managers but may consider doing so after assessing whether such verification would be useful or necessary to enhance the integrity of the data. The reporting Managers are responsible for the completeness, timeliness, and accuracy of information included in their mandatory filings to the Commission. The Commission has the ability to conduct examinations to help evaluate whether reporting Managers are in compliance and, where necessary, the Commission may bring enforcement actions where potential violations are believed to have occurred.
Rather than create a new reporting regime by adopting the Proposals, several industry commenters urged the Commission to leverage the existing data frameworks of FINRA, CAT, and other data filed with the Commission (
In assessing how the Commission might leverage existing data to satisfy the mandate of section 929X, it is important to note differences in reporting entities, timing, and the specific data being collected in existing public and non-public sources of short sale-related data. The letters submitted by industry commenters critical of the Proposed Rule 13f-2 reporting regime did not explain with any specificity how the Commission could leverage existing sources of short data so that the Commission would receive equal or comparable data to that which will be reported on Form SHO, nor did Commenters articulate how short data that is currently available to market participants is comparable to data which would be reported on Form SHO and published by the Commission, rather the comments referenced leveraging of existing sources generally.
After considering the viewpoints of commenters, the Commission believes that a new reporting regime will increase transparency into short positions consistent with the goals of DFA 929X, and that market participants and regulators alike will benefit from the required Form SHO disclosures, as they are distinct from existing short sale reporting regimes. Further, the short sale-related information that will be collected under Rule 13f-2 and Form SHO will fill an information gap for market participants and regulators by providing insights into increases and decreases in reported short positions. As stated in the Proposing Release, the Commission believes that the short position data reported pursuant to Rule 13f-2 on Form SHO will supplement the short sale information that is currently publicly available from FINRA and the exchanges.
Further, the Commission understands that while FINRA makes publicly
Other industry commenters were concerned about reporting burdens for smaller Managers, and one such commenter predicted that the increased reporting costs resulting from the Proposals and other related Commission proposed rulemakings could lead to industry consolidation and decrease competition and investor choice.
In response to comments about reporting burdens, the Commission is not adopting the proposed hedging requirement, not adopting Proposed Rule 205 and “buy to cover” reporting to CAT, and is streamlining Information Table 2, thus reducing the costs of reporting from the proposed rule and form as compared to Rule 13f-2 and Form SHO as adopted.
The Commission proposed to require Managers exercising investment discretion over short positions meeting specified thresholds to report information relating to end-of-the-month short positions on Information Table 1, and certain daily activity affecting such short positions on Information Table 2, of a new Form SHO. The Commission would aggregate the reported data by security, including daily short sale activity data, and then, on a delayed basis, make such aggregated data available to the public. As proposed, data would be aggregated across all reporting Managers for each reported equity security prior to publication. The Commission stated its belief that publicly disclosing the identity of individual reporting Managers may not be necessary to advance the policy goal of increasing public transparency into short selling activity, and that aggregating across reporting Managers would help safeguard against the concerns noted above related to retaliation against short sellers, including short squeezes, and the potential chilling effect that such public disclosure may have on short selling.
As proposed, the Commission would publish aggregated information derived from data reported on Proposed Form SHO. The Commission estimated that it will publish such aggregated information within one month after the end of the reporting calendar month—
The Commission also presented, and sought comment on, an alternative approach for its publishing of information reported on proposed Form SHO that would offer greater transparency and less anonymization of the published short sale-related data.
Several commenters raised concerns about potential negative consequences of more detailed short position disclosures—particularly, negative effects on liquidity and price discovery, the facilitation of copycat trading, and the greater susceptibility of holders of short positions to short squeezes.
These commenters stated, however, that aggregation would not go far enough to lower the risk that the trading and investment behavior reported
By contrast, other commenters favored the alternative approach of publishing reported information at the individual Manager level after removing all identifying information of the reporting Manager that the Commission sought comment on in the Proposing Release.
The approach taken for publishing short sale-related data reported on Form SHO must balance competing interests of public transparency against the potential negative impacts on price discovery, and of short position and short activity disclosures on short selling as well as data security concerns. After considering the comments received, the Commission continues to believe that the indirect costs of publishing information reported at the individual Manager level would likely exceed those of publishing information aggregated across all reporting Managers.
Some commenters suggested the Commission adopt an approach similar to that of the EU structure whereby individual short sellers' names are made public.
Further, aggregating across reporting Managers will address certain non-financial costs and burdens identified by commenters by helping to safeguard against the concerns raised about potential chilling effects on short selling and data security regarding the information reported by Managers on Form SHO.
Under Proposed Rule 205, a broker-dealer would be required to mark a purchase order as “buy to cover” if, at the time of order entry, the purchaser (
Some commenters expressed support to adopt Proposed Rule 205, and generally applauded the potential added transparency that “buy to cover” order marking could help provide.
The Commission also received numerous comments that opposed the adoption of Proposed Rule 205.
Some commenters that opposed the adoption of Proposed Rule 205 expressed general concerns that the proposed single account “gross” short position methodology (which, by design, does not require the broker-dealer to consider the purchaser's other positions held in that account, in other accounts at the broker-dealer, or elsewhere) could routinely result in inaccurate “buy to cover” order marking reporting by broker-dealers.
Commenters highlighted the inherent differences and resulting complexities between Proposed Rule 205's single account “gross” short position methodology for purchases, and Regulation SHO's all accounts net position order marking requirements for sales. These commenters generally stated that if Proposed Rule 205 were adopted, broker-dealers would be required to create and maintain, at great expense, two separate order marking systems that utilize very different methodologies—one for determining whether a purchase order should be marked as “buy” or “buy to cover,” and another for determining whether a sell order should be marked as “long” or “short.”
One commenter stated that additional guidance or clarification would be necessary if the Commission adopted Proposed Rule 205.
The Commission is not adopting Proposed Rule 205 in light of questions raised by commenters regarding potential operational issues with the requirement as proposed that merit further consideration, and the Commission will continue to evaluate the issues raised to determine if any further action is appropriate.
In July 2012, the Commission adopted 17 CFR 242.613 (“Rule 613 of Regulation NMS”), which required national securities exchanges and national securities associations (the “Participants”)
Section 6.4(d)
Broker-dealers, through the Compliance Rule adopted pursuant to the CAT NMS Plan, are required to report certain short sale order data, including for sell orders, whether an order is long, short, or short exempt,
The Commission proposed that Industry Members be required to report to the CAT “buy to cover” information, which was proposed to be collected pursuant to Regulation SHO through Proposed Rule 205 (discussed above). Specifically, the Commission proposed to amend section 6.4(d)(ii) of the CAT NMS Plan by adding new paragraph 6.4(d)(ii)(D) which would require the Participants to update their Compliance Rules to require Industry Members to report for the original receipt or origination of an order to buy an equity security, whether such buy order is for an equity security that is a “buy to cover” order as defined by Proposed Rule 205(a).
The Commission, as discussed in Part III above, is not adopting Proposed Rule 205 which would have established a new “buy to cover” order marking requirement. Accordingly, the Commission is likewise not adopting an amendment to add new paragraph 6.4(d)(ii)(D) to the CAT NMS Plan which would have required the Participants to update their Compliance Rules to require Industry Members to report “buy to cover” order marking information to CAT.
The Commission also proposed to require CAT reporting firms that are reporting short sales to indicate whether such reporting firm is asserting use of the bona fide market making exception under Regulation SHO for the locate requirement in Rule 203(b)(2)(iii) (
Rule 203(b)(1) of Regulation SHO generally prohibits a broker-dealer from accepting a short sale order in an equity security from another person, or effecting a short sale in an equity security for its own account, unless the broker-dealer (i) has borrowed the security, (ii) has entered into a bona fide arrangement to borrow the security, or (iii) has reasonable grounds to believe that the security can be borrowed so that it can be delivered on the date delivery is due.
Some commenters supported requiring CAT reporting firms to report the use of the BFMM locate exception to CAT.
Other commenters opposed the adoption of BFMM locate exception reporting to CAT.
One commenter stated that adopting the proposed BFMM locate exception would be operationally difficult and costly to implement.
This commenter agreed with the Commission that a broker-dealer is required to determine whether the firm is eligible for the BFMM locate exception at the time a short sale is effected but expressed concerns that market makers that quote and trade on multiple trading venues, for example, might encounter certain systematic or operational difficulties in making, and reporting, such determination using existing systems design. Specifically, this commenter stated that “it may be systematically and/or operationally difficult for the broker to define when it is globally acting in a bona fide market maker capacity given the granular details of a market maker's many activities, and the existing systems design.”
Rule 203(b)(2)(iii) provides an exception to the locate requirement for “[s]hort sales effected by a market maker in connection with bona-fide market making activities
Some commenters stated that the Commission and other regulators can currently request a particular market maker to provide information regarding its use of the BFMM locate exception, and questioned why the Commission would need to require such costly reporting to CAT.
Another commenter stated that regulators should utilize other existing short sale data available through CAT that could identify activity that is “disproportionate to the usual market making patterns of practices of the broker-dealer” in order to determine if the BFMM locate exception is being misused.
Another commenter stated that there was no data or evidence in the Proposing Release to suggest that there are widespread violations or abuses of the BFMM locate exception that warrant the costs imposed by the CAT reporting requirements for the BFMM locate exception.
Another commenter did not believe that the BFMM locate exception information reported to CAT would assist the Commission in identifying violations or misuse of the BFMM locate exception “because the data can be manipulated by bad actors and is susceptible to human errors of inappropriately marking short sales with the BFMM indicator when they are not eligible.”
Another commenter stated that if BFMM locate exception reporting were adopted, “most market making firms will simply tag that new [BFMM locate exception] field with the affirmative.”
Some commenters asked that the Commission provide additional clarity regarding what constitutes bona fide market making activities eligible for the BFMM locate exception, and requested that the Commission confirm that certain market making activity (
One commenter stated that the costs imposed on market makers to implement and maintain the proposed regulatory requirements might result in wider spreads, reduced liquidity, and might represent a barrier to entry for new market participants.
In response to commenters that generally requested additional guidance
After considering the comments received regarding the proposal to require CAT reporting firms that are reporting short sales to indicate whether such CAT reporting firm is asserting use of the BFMM locate exception, the Commission is adopting this proposed amendment to CAT with a few technical modifications to improve the readability of the amendment.
Other commenters also discussed issues that were beyond the scope of the rulemaking, such as suggestions for the Commission to ban short selling, enhance Regulation SHO's locate or close-out requirements, address potentially abusive “naked” short selling, and reduce the reporting timeframes or requirements for Form 13F reporting, among others.
The Commission received one comment regarding a compliance date for Rule 13f-2 reporting requirements; that commenter recommended that Managers be given at least 18 months to comply with the new requirements.
The Commission will begin publishing the aggregated short sale related data collected, pursuant to Rule 13f-2, three months after the above stated compliance date of 12 months after the effective date of this release. The three-month window for the Commission to publish aggregated Form SHO data is intended to ensure that Commission systems are operating as designed in order to publish the aggregated data.
Consistent with a suggestion by the commenter, the compliance date for the CAT amendments will be 18 months after the effective date of this release, as there were not modifications to that requirement from proposal. This will allow CAT reporting firms adequate time to update systems to facilitate reporting to CAT.
Certain provisions of Rule 13f-2, Form SHO, and the Amendment to CAT impose “collection of information” requirements within the meaning of the Paperwork Reduction Act of 1995 (“PRA”).
In accordance with the PRA, the Commission is submitting the final amendments to the rules to the Office of Management and Budget (OMB) for review. The Commission published a request for comments on these collection of information requirements in the Proposing Release,
As discussed above, Rule 13f-2 and related Form SHO are designed to provide greater transparency of short sale-related data to regulators, investors, and other market participants by requiring certain Managers to file monthly on Form SHO, through EDGAR in Form SHO-specific XML, certain short position and activity data. Under Rule 13f-2 and Form SHO, only those Managers that meet a specified Reporting Threshold for an equity security will be required to file Form SHO. Such information will provide additional context to the Commission and other regulators regarding the lifecycle of short sales, assist in reconstructing market events, and improve Commission oversight of short selling.
The Amendment to CAT is intended to supplement the short sale-related data that will be reported by certain broker-dealers to the Commission pursuant to Rule 13f-2 and Form SHO. The Commission's amendment to CAT requires, for original receipt or origination of an order for equities, the Participants' Compliance Rules require their broker-dealer members record and report whether the order is a short sale for which the BFMM locate exception in Rule 203 under Regulation SHO for the reported short sale is being claimed. This information will provide valuable data to both the Commission and other regulators regarding the use of the BFMM locate exception. Given the differences in the information collections applicable to these parties, the burdens applicable to Managers and broker-dealers are separated in the analysis below.
As discussed above, Rule 13f-2 and Form SHO require Managers that trigger a Reporting Threshold to file monthly via EDGAR, on Form SHO, certain short position and activity data. Under section 13(f)(6)(A) of the Exchange Act and for purposes of Rule 13f-2, Managers include any person, other than a natural person, investing in or buying and selling securities for its own account, and any person (including a natural person) exercising investment discretion with respect to the account of any other person.
In the Proposing Release, the Commission stated that it believed that the burden associated with Proposed Rule 13f-2 and the related Proposed Form SHO reporting in EDGAR would be similar to a Manager's reporting requirements under former Form SH. In October 2008, the Commission adopted interim final temporary Rule 10a-3T, which required institutional investment managers that exercise investment discretion with respect to accounts holding section 13(f) securities having an aggregate fair market value of at least $100 million to file Form SH with the Commission following a calendar week in which it effected a short sale in a section 13(f) security, with some exceptions. Form SH included information on short sales and positions of section 13(f) securities, other than options.
As discussed above, the Commission is adopting aspects of the Proposal with certain modifications to Form SHO reporting requirements. For example, the modified reporting threshold for the U.S. dollar value-based prong of Threshold A for reporting company issuer securities is being adopted as a monthly average rather than a daily end-of-day calculation, which could result in fewer Managers being subject to Form SHO reporting requirements under Threshold A than under the Proposed Reporting Thresholds. However, the Commission continues to believe that 1,000 Managers is an accurate estimate when considering (1) Managers with discretion over less than $100 million, which were not required to file Form SH; (2) the fact that Form SH was only required to be filed for 13(f) securities that are included on the 13F List as opposed to all equity securities of both reporting and non-reporting company issuers; and (3) the fact that Form SH did not include a second, lower threshold (Threshold B) for short positions in securities of non-reporting company issuers. As such, the Commission continues to estimate that, each month, approximately 1,000 Managers will trigger a Reporting Threshold for at least one security, and therefore be required to file a Form SHO.
The Commission explained in the Proposing Release that it believed that the burden associated with Proposed Rule 13f-2 and the related Proposed Form SHO reporting in EDGAR would be similar to a Manager's reporting requirements for former Form SH.
Some commenters were concerned about the Commission's reliance on prior Form SH data in estimating Form SHO reporting burdens, as well as the estimated time burden of 20 hours for preparing and filing each required Form SHO.
In contrast, one commenter believed that Managers were not being genuine about their concerns regarding costs and burdens of complying with Form SHO reporting requirements, stating that they were able to comply with Form SH requirements.
Regarding comments of Form SHO's complexity as compared to Form SH, the adopted Form SHO, as described above, does not include the proposed requirement to report hedging status, which several commenters thought would be particularly burdensome or operationally difficult to implement.
As the Commission acknowledged in the Proposing Release, and continues to acknowledge, the information required under former Form SH differs from that required under Form SHO. However, the Commission continues to believe that Form SH is an appropriate basis for Form SHO burden estimates. Form SH involved the same type of entities (Managers) and the same activity (short positions) as Form SHO. While recognizing that the information required under former Form SH differs from that required under Form SHO, the Commission continues to believe that both forms require the reporting of short sale-related data of similar depth and complexity.
As such,
The Commission received one comment regarding the approximate overall cost of $217.55 per Form SHO filing from the Proposing Release. This commenter stated that this cost was “not realistic,” but, again, did not provide a more accurate cost estimate, or alternative data source for which to base a cost estimate.
Consistent with its estimates in the Proposing Release, the Commission also anticipates that most Managers will file Form SHO directly in the structured XML-based data language for Form SHO,
Also consistent with the estimates in the Proposing Release, the Commission estimates that approximately 3.5 percent of the Managers that file Form SHO each month will also file an amended Form SHO, resulting in an additional burden and cost for an estimated 35 Managers each month.
Consistent with estimates in the Proposing Release, in addition to the costs associated with the reporting burden, Managers could incur an initial technology-related burden of 325 hours, at an hourly estimated wage rate of $366,
One commenter stated that the estimated 325 hours initial technology-related burden was “not realistic” but did not provide an alternative estimate.
The Commission did not receive any comments that provided an alternative hourly estimate for the initial technology related burden for Managers filing Form SHO, or an alternative, more accurate source for which to base the initial technology related burden for Managers filing Form SHO. Additionally, in response to the comment that the Commission generally underestimated the initial technology-related burden, and that the technology-related burden is likely reduced from the Proposing Release given the Commission's decision not to adopt the proposed hedging requirement, the Commission continues to believe that an estimate of 325-hours for the initial technology-related burden is appropriate.
The amendment to the CAT NMS Plan requires Participants to update their Compliance Rules to require reporting by Industry Members of whether an original receipt or origination of an order to sell an equity security is a short sale for which a market maker is claiming the bona fide market making exception to the locate requirement in Rule 203(b)(2)(iii) of Regulation SHO.
As discussed above, reporting of certain short sale information to the CAT provides valuable information for the Commission and other regulators in investigations and reconstruction of market events. Requiring Industry Members to identify short sales for which they are claiming the BFMM locate exception will provide the Commission staff and other regulators an additional tool to determine whether such activity qualifies for the exception, or instead is indicative of, for example, proprietary trading instead of bona fide market making.
The respondents for the amendment to CAT include the 25 Plan Participants (the 24 national securities exchanges and one national securities association (FINRA)).
The respondents for the Amendment to CAT also include the Participants' broker-dealer members, that is, Industry Members. The Commission understands that there are currently 3,501 registered broker-dealers;
The Commission received comments regarding the costs and burdens of the proposed amendments to CAT generally
The Amendment to CAT will require the Participants to engage the Plan Processor to modify the Central Repository to accept and process the new BFMM locate exception information on order receipt and origination reports. The Commission estimates that the Participants will incur an initial, one-time burden of 130 hours, or 5.2 hours per Participant, of staff time required to supervise and implement the changes necessary for the Plan Processor to accept and process the new data elements, and an initial, one-time, external cost of $113,800, or a per Participant expense of approximately $4,552 to compensate the Plan Processor for staff time required to make the initial necessary programming and systems changes to accept and process the new data elements, based on an estimate that it will take 300 hours of Plan Processor staff time to implement these changes.
The Commission continues to believe that other Paperwork Reduction Act burdens that will apply to the Participants, including ongoing burdens and external expenses for the Plan Processor's acceptance and processing of the new data elements, are already accounted for in the existing Paperwork Reduction Act estimate that applies for Rule 613 and the CAT NMS Plan Approval Order, submitted under OMB number 3235-0671.
The Commission anticipates that certain Industry Members will have initial, one-time burdens and costs relating to the Amendment to CAT, to update systems and processes as necessary to capture and report use of the BFMM locate exception to CAT. The Commission has estimated these initial burdens and costs below.
The Amendment to CAT will impose an ongoing annual burden relating to, among other things, personnel time to monitor each broker-dealer's reporting of the required data and the maintenance of the systems to report the required data and implementing changes to trading systems that might result in additional reports to the Central Repository. However, the Commission estimates that the ongoing burden imposed by the Amendment to CAT related to reporting to the CAT is already accounted for in the existing information collections burdens associated with Rule 613 and the CAT NMS Plan Approval Order submitted under OMB number 3235-0671.
The Amendment to CAT will impose additional burdens on Industry Members that trade equity securities and rely upon or plan to rely upon the BFMM locate exception. Based on an analysis of data reported to the CAT in May 2023, and specifically the identification of all unique CAT Reporters that were identified as equity market makers (including different classes of market makers such as “designated” or “lead” market makers, and secondary liquidity providers), approximately 100 CAT Reporters will be subject to the new reporting obligation. Some broker-dealers that rely upon this exception may retain records regarding their eligibility for this exception for specific orders or for orders originated by specific desks or units of their business.
Regarding the obligation to report the BFMM locate exception information to the CAT, the Commission believes that it is appropriate to divide the 100 Industry Members,
The Commission estimates that the 58 insourcing Industry Members that report directly to the CAT will incur an initial, aggregate, one-time burden of 15,080 hours, or that each of these CAT Reporters will incur an initial, average one-time burden of 260 hours, and that each of these 58 insourcing Industry Members will incur an initial, aggregate, one-time external expense of approximately $870,000 for software and hardware to facilitate reporting of the new data elements to CAT, or that each insourcing Industry Member will incur an initial, average one-time external expense of approximately $15,000.
The Commission estimates that the 42 outsourcing Industry Members that use third-party reporting agents to report to the CAT will incur an initial, aggregate, one-time burden of 420 hours, or that each of these outsourcing Industry Members will incur an initial, one-time burden of 10 hours on average, and that these 42 outsourcing Industry Members will incur an initial, aggregate, one-time external expense of approximately $42,000 for software and hardware to facilitate reporting use of the BFMM locate exception to CAT, or that each outsourcing Industry Member will incur an initial, average one-time external expense of approximately $1,000.
As discussed above, the Commission continues to believe that the ongoing burden associated with reporting to the CAT is already accounted for in the existing information collections burdens associated with Rule 613 and the CAT NMS Plan Approval Order submitted under OMB number 3235-0671.
The information collections are required under Rule 13f-2 and Form SHO for Managers that meet the Reporting Threshold and the Amendment to CAT for Plan Participants to collect and process new CAT reportable information and for CAT Industry Members that engage in certain short sale activity.
Pursuant to 17 CFR 240.17a-4(b)(7) (“Exchange Act Rule 17a-4(b)(7)”), a broker-dealer must preserve for a period of not less than three years, the first two years in an easily accessible place, all written agreements (or copies thereof) entered into by such member, broker or dealer relating to its business as such, including agreements with respect to any account.
Pursuant to 17 CFR 240.17a-4(e)(7), a broker-dealer must maintain and preserve in an easily accessible place each compliance, supervisory, and procedures manual, including any updates, modifications, and revisions to the manual, describing the policies and practices of the member, broker or dealer with respect to compliance with applicable laws and rules, and supervision of the activities of each natural person associated with the member, broker or dealer until three years after the termination of the use of the manual.
Pursuant to 17 CFR 240.17a-1, every national securities exchange and national securities association shall keep and preserve at least one copy of all documents, including all correspondence, memoranda, papers, books, notices, accounts, and other such records as shall be made or received by it in the course of its business as such and in the conduct of its self-regulatory activity for a period of not less than five years, the first two years in an easily accessible place, subject to the destruction and disposition provisions of 17 CFR 240.17a-6 (“Rule 17a-6”).
As discussed above, Rule 13f-2 requires certain Managers to file monthly in EDGAR, on Form SHO, certain short sale volume data and short interest position data. However, the Commission will aggregate the information reported by Managers on Form SHO prior to publication to protect the identity of reporting Managers.
To the extent that the Commission receives—through its examination and oversight program, through an investigation, or by some other means—records or disclosures from a broker-dealer that relate to or arise from the Rule that are not publicly available, such information will be kept confidential, subject to the provisions of applicable law.
With respect to the Amendment to CAT, Rule 613, and the CAT NMS Plan, information collected and electronically provided to the Central Repository will only be available to the national securities exchanges, national securities association, and the Commission. Further, the CAT NMS Plan includes policies and procedures designed to ensure the security and confidentiality of all information submitted to the Central Repository, and to ensure that all SROs and their employees, as well as all employees of the Central Repository, shall use appropriate safeguards to ensure the confidentiality of such data. The Commission will receive confidential information pursuant to this collection of information, and such information will be kept confidential, subject to the provisions of applicable law.
The Commission is adopting a new rule and related form as well as an amendment that introduce new reporting requirements in connection with short sales. Rule 13f-2, Form SHO, and the amendment to CAT (collectively, the “adoptions”) will improve the transparency of short selling activity to regulators, market participants and the investing public. The data provided by these adoptions will close informational gaps in the currently available data, which in turn will benefit market participants and help foster fair and orderly markets. The adoptions will also improve regulatory oversight and enhance regulators' examination of market behavior and recreation of significant market events. These improvements may, in turn, discourage market manipulation to the extent that it occurs.
The Commission is mindful of the economic effects that may result from the adoptions of Rule 13f-2, Form SHO, and the amendment to CAT, including the benefits, costs, and the effects on efficiency, competition, and capital
The Commission recognizes that the adoptions may lead to tradeoffs in market quality, with a risk of negative effects on price efficiency. A potential reduction in market manipulation through improved regulatory oversight stemming from the adoptions may have a positive impact on market quality. Furthermore, the adoptions will provide market participants with improved transparency into short selling activity, which might also lead to improved price efficiency. On the other hand, Rule 13f-2 and the disclosures Form SHO requires will increase the costs and risks of implementing large short positions, which might reduce price efficiency by reducing short selling and the positive effects of such short selling. Furthermore, public disclosure of information resulting from Rule 13f-2 and Form SHO might facilitate short squeezes, which in turn might also reduce market quality.
The Commission has considered the economic effects of the adoptions and wherever possible, has quantified their likely economic effects. The Commission is providing both a qualitative assessment and quantified estimates of the adopted rule and CAT amendment's economic effects where feasible. The Commission has received comments on the Proposals and has addressed commenters' concerns with the economic analysis. The Commission has incorporated data and other information to assist it in the analysis of the economic effects of the adoptions. However, as explained in more detail below, because the Commission does not have, and in certain cases does not believe it can reasonably obtain data that may inform the Commission on certain economic effects, the Commission is unable to quantify certain economic effects. Further, even in cases where the Commission has some data, quantification is not practicable due to the number and type of assumptions necessary to quantify certain economic effects, which render any such quantification unreliable. Our inability to quantify certain costs, benefits, and effects does not imply that the Commission believes such costs, benefits, or effects are not significant.
The Commission is adopting the Manager reporting and disclosures to implement the statutory mandate of section 929X of the Dodd-Frank Act. Accordingly, many of the costs and benefits of Rule 13f-2 and Form SHO stem from the Commission's implementation of the statutory mandate. In addition, the Commission is exercising discretion in its design and implementation of Rule 13f-2 and Form SHO and recognizes that this discretion has economic effects. Specifically, the Commission is using this discretion to ensure that the disclosures are additive to currently available data and will be useful to both market participants and regulators, with a focus on addressing data limitations exposed by market events, especially the market volatility in January 2021. Additionally, the Commission is adopting a Proposed CAT amendment in order to address such data limitations outside of the context of the statutory mandate of section 929X.
The Commission has access to several sources of data that provide some short selling information, one of which is CAT. CAT data can be used by regulators for regulatory purposes, including analysis and reconstruction of broad-based market events; in market analysis in support of regulatory decisions; in market surveillance, investigations, and other enforcement activities. At times, these regulatory functions can benefit from information on short sale positions of market participants and how these positions change over time. CAT does not include data that can be used to track such positions, and as discussed further above, Commission staff experience in reconstructing the events of January 2021 provided insights into the challenges of using existing CAT data for this purpose. Other existing data sources, including public data sources, are also limited for these purposes as well as for informing members of the public and market participants. Specifically, current data fail to distinguish the type of trader engaged in short selling or identify individual short positions, as well as the fluctuation in those positions, even for regulatory use. Furthermore, current data do not track the use of the bona fide market maker exemption when short selling without the “locate”.
Existing data sources fail to accurately represent economic short positions of Managers due to several limitations.
These data limitations inhibit regulators from performing functions such as market surveillance and market reconstruction. For example, the Commission does not have regular access to information about Managers who hold large short positions, even if those positions are held for a long period of time. If the positions are sufficiently large and prices move against the positions, the Commission currently cannot efficiently assess the risk that these positions impose on the market more broadly.
The baseline against which the costs, benefits, and the effects on efficiency, competition, and capital formation of the final rule are measured consists of the current state of the equity market, current practices of Managers and broker-dealers, and the current regulatory framework. The economic analysis considers existing regulatory requirements, including recently adopted rules, as part of its economic baseline against which the costs and benefits of the final rule are measured.
Several commenters requested the Commission consider interactions between the economic effects of the proposed rule and other recent Commission proposals.
The potential universe of persons who meet the definition of Manager is broad and diverse. Exchange Act section 13(f)(6)(A) defines the term “institutional investment manager” as “includ[ing] any person, other than a natural person, investing in or buying and selling securities for its own account, and any person exercising investment discretion with respect to the account of any other person.”
Notwithstanding the broad statutory definition of Manager, it is the Commission's understanding that only a fraction of Managers is believed to engage in short selling and fewer still engage in any substantial short selling. Registered broker-dealers' market making operations, for example, engage in short selling but, with the exception of option market makers, generally do not hold large positions overnight. The Commission is also aware, for example, that advisers to both hedge funds and registered investment companies engage in short selling to varying degrees. However, with the exception of hedge funds, institutional investors are viewed as “largely absent” from the short selling portion of the financial markets.
While information about Managers' investments other than from funds managed by investment advisers is limited, the Commission understands that such other Managers, other than options market makers due to their routine use of hedging transactions, do not frequently establish short positions that would be large enough to be subject to the rule's reporting requirement.
Short selling is a widely used market practice, which allows investors to
A short sale is the sale of a security that the seller does not own or any sale that is consummated by the delivery of a security borrowed by, or for the account of, the seller.
In addition to short selling based on negative sentiment, market participants also short sell to hedge existing positions. Hedging is a particularly potent motive to short sell a stock for options market makers who can hedge the risk of writing a call option by short selling the underlying stock in the stock market. Other investors use short selling to hedge out an unwanted component of a stock's return. For example, an investor who wants to buy a particular stock to trade on stock specific information but does not want to expose itself to industry risk can hedge industry risk by short selling an industry index ETF while purchasing the underlying security. Market makers also use short selling extensively to maintain two sided quotes in the temporary absence of inventory. Lastly, traders may use short selling as part of algorithmic trading strategies attempting to benefit from temporary pricing anomalies. While short selling to trade on information or to hedge generally results in short positions that are held for some time, registered broker-dealers engaged in market making operations and algorithmic technical traders generally close their positions by the end of the day and thus their short positions generally do not show up in existing measures of short interest.
Short selling generally entails more risk than holding a long position. At worst, a buyer of a long position can lose its entire investment. This is not true for a short seller. If the stock price increases from the short sale price, the investor loses money and since prices could potentially rise indefinitely, the short seller could lose more than the value of its original investment. Additionally, margin requirements for short selling are typically 150 percent—including the proceeds of the short sale plus an additional 50 percent of the value of the short position.
Short selling is facilitated by the securities lending market. Borrowing shares generally occurs two days after the short sale is executed. This is because stock market transactions normally settle two business days after the transaction occurs, while securities lending transactions settle on the same day.
Short selling is prevalent in equity markets in general. A common ratio used to capture the amount of short selling is the short interest ratio, which measures the fraction of shares sold short at a given point in time divided by the total shares outstanding for that security. Figure 1 below presents the time series average for short interest outstanding for equities with different characteristics. This Figure shows that short interest tends to be higher for small-cap stocks than for mid- or large-cap stocks.
Another way to measure the prevalence of short selling in financial markets is by analyzing the fraction of transactions that involve a short seller. Short sellers are involved in nearly 50 percent of trading volume, while only about 2 percent of shares outstanding are held short in the U.S. equity markets.
Trading in derivatives affects short selling in two key ways. First, derivatives offer investors an alternative means to express negative sentiment rather than short selling the stock. For instance, an investor wishing to profit from the decline of a security's value can also trade in various derivative contracts, including options and security-based swaps. Providing evidence of this alternative means of short selling, academic research shows that investors do indeed use options as an alternative means to obtain short-like economic exposure when standard short selling is restricted.
Among the most popular derivative contracts are options, specifically put and call options. Call options give the owner of the option the right but not the obligation to purchase a stock at a specific price on a future date. Put options are similar but give the owner of the option the right but not the obligation to sell a stock at a specific price at a future date. In a put option the seller of the option is taking a long position in the underlying security while the purchaser of the put is taking a short position. The opposite is true for a call option.
In addition to options, convertible securities (in which the security can be converted into an equity security) and security-based swaps can be used to create the same economic exposure as a short position.
In addition to providing an alternative means of expressing a bearish sentiment, trading in derivatives frequently leads to related trading in the stock market as derivatives' counterparties seek to hedge their risk. For example, an options market maker who sells a put has taken on long exposure to the underlying security and may hedge this position by opening a short position in the underlying security. Thus, option market makers who sell large quantities of put options may amass large short positions in the underlying equities to hedge their options exposure.
The Commission adopted Regulation SHO
In adopting Regulation SHO, the Commission recognized that short sales can provide important pricing information
Due to continued concerns regarding failures to deliver, and to promote market stability and preserve investor confidence, the Commission has amended Regulation SHO on several occasions. For example, the Commission eliminated certain original exceptions to Regulation SHO's close-out requirements,
Regulation SHO requires broker-dealers to properly mark sale orders as “long,” “short,” or “short exempt,” to locate a source of shares prior to effecting a short sale (also known as the locate requirement), and to close out failures to deliver that result from long or short sales. In addition, if the price of an equity security has experienced significant downward price pressure, Regulation SHO temporarily restricts the price at which short sales may be effected.
Regulation SHO imposes certain recordkeeping obligations on broker-dealers. However, the Commission does not have market-wide information on how often the bona fide market making exception is used. Furthermore, bona fide market making information is not reported on a regular basis, instead the Commission must request bona fide market making records on a broker-dealer by broker-dealer basis.
In addition, regulations currently do not require market participants to record, report, or track when short sellers “buy to cover” their short sales. This makes it difficult for regulators to assess compliance with Rule 105 and with close out requirements in Rule 204.
There are several sources of short selling data that are available both publicly and for regulatory purposes. In general, these data sources lack information about levels of and the timing of changes in economic short positions for specific Managers in specific securities. Some sources report aggregate short positions at the security level, but their content is not granular enough to further the understanding of short selling strategies. Other sources provide granular short volume information, but they are unable to distinguish short transactions that impact short positions from those that do not and do not contain all activity that can change short positions. Some regulatory data sources report short transactions at the individual investor level, but using these data to estimate short positions would be significantly inaccurate and inefficient.
One of the primary data sources for aggregate short selling data is the bimonthly short interest data collected by FINRA.
FINRA short interest data are widely available and are used by academics and other market participants.
Since 2009, many SROs have been publishing two short selling data sets, including same day publication of daily aggregated short sale volume in individual securities
Despite offering higher granularity than bimonthly short interest data, these existing short volume data provided by the SROs, including FINRA, have a number of limitations. First, the data do not provide insight into the activities of either individual traders, or different trader types. Consequently, it is not possible with existing short selling data provided by the SROs to separate trading volume associated with market makers, algorithmic traders, investment managers, or other trader types. Form SHO will address this limitation by providing data on the gross short sale positions and activity of investment managers with large short sale positions.
Additionally, the data do not provide insight into activities that may reduce exposure, making the use of these data to estimate investor sentiment fraught with potential bias. Moreover, these data provide information only on short sales, whereas short positions could also change because investors can increase or decrease their positions in ways other than short selling the stock. For example, investors can increase their short positions by exercising put options and delivering borrowed shares or by delivering borrowed shares when they are assigned call options. Investors can reduce their short positions in an equity when they, for example, “buy to cover” their positions, purchase shares in a secondary offering,
Aggregate short selling statistics and short selling transactions data have different lags with which they are available. Aggregate short selling volume statistics are usually made available by the SROs by the end of the following business day. For the transactions data, the lag can be much longer, and in some cases the data are released with a one-month lag—implying that some short selling transactions data are not available for two months.
There is also a concern that these data may over-represent the total volume of short sales occurring in the market. This is because Regulation SHO provides specific criteria regarding what is a long sale.
Securities lending data provide information on stock loan volume, lending costs, and the percentage of available stock out on loan. In the equity market, a primary reason for end borrowers to engage in a securities loan is to facilitate a short sale,
The securities lending industry appears to use commercial securities lending data widely,
The data for securities lending is potentially biased
Existing commercial securities lending data only provide a noisy proxy of short sentiment. This is because current commercial securities lending data originates from either surveys of a subset of asset managers about their securities lending experience, or it comes from give-to-get arrangements where those involved in securities lending must give data to the data providers in order to be able access data from the data providers. Because the survey data are not comprehensive it can only provide a noisy proxy of actual short sentiment. The give-to-get data also provides only a noisy proxy because it too relies on voluntary data submissions. It is also generally limited to information about loans from lending programs to broker dealers (“Wholesale Loans”), which are made largely to facilitate clearing and settlement on a net basis at a clearing broker, rather than by transaction or position.
On October 13, 2023, the Commission adopted Rule 10c-1a.
Because loans to end-borrowers are usually made to facilitate short sales,
Pursuant to Rule 10c-1a, persons will be required to identify the legal name of all the parties to a securities loan without any delay to the RNSA. Consequently, regulators can use the data to track the size of shares on loan, and thus approximate an individual entity's short position with little delay, potentially even if that entity uses multiple broker-dealers to source shares. Because loan modifications, such as increases, decreases, or terminations of loans, must be reported, regulators can produce running estimates of changes in individual entity's estimated short positions.
Regulators can also extract short sale information from CAT data, which provide order lifecycle information for stocks and options.
Theoretically, one could use the order execution information in CAT data to estimate trader positions and track how those positions change over time. However, such estimates could be inaccurate due to several circumstances. First, CAT data do not include information on the long or short positions held in each account at the time that an Industry Member initially begins reporting to CAT. Thus, CAT does not provide an appropriate starting point for building short positions using investor-specific transaction information. Second, some investors may establish or cover short positions via other means that are not CAT-reportable events, for example: secondary offering transactions; option assignments; option exercises; conversions; or ETF creations and redemptions. Thus, there are activities that affect positions that are not contained in CAT in any capacity.
While CAT is not designed to track positions, CAT data can be used in very limited and specific circumstances to offer rough position estimates. When focused on one or few accounts, estimating positions, though potentially inaccurate, can be manageable. However, using transaction information to track positions across a broad set of positions is inefficient. Even in situations in which the above limitations do not apply, the use of CAT data to estimate short positions and changes in those positions for all or a large set of accounts is inefficient and would require a considerable amount of processing power, which would take time and reduce the processing power available for other CAT queries. This hinders the Commission's estimation of short positions in a timely fashion.
Other than the inefficient means of estimating positions described above, CAT does not distinguish buy orders that establish a long position from those that cover, and therefore reduce, a short position. While Commission staff were able to identify some short covering activity during the volatile period in January 2021, due to the difficulties described above, the staff analyzing the volatility associated with meme stocks could not easily identify short covering activity using CAT data alone and was thus hindered in their reconstruction of key events.
Finally, even though CAT data identify short selling by market makers, the data do not provide information as to whether a broker-dealer is claiming use of the exception for bona fide market making from Regulation SHO's locate requirement. Rather, the Commission has to make individual document requests to obtain such information currently. The adopted amendment will make this information readily available to regulators in a uniform electronic format and consolidate it with the other material terms of orders required to be reported to CAT.
There are 24 national securities exchanges and one national securities association (FINRA) that are CAT Plan Participants. There are also 3,501 broker-dealers who have reporting obligations to CAT as Industry Members.
For a ten-month period in 2008 and 2009,
In addition to the limited and temporary time period during which disclosure of short positions was required to be reported on Exchange Act Form SH, even at the regulatory level, the reporting requirements and data had several drawbacks and limitations. One drawback was that only Managers who exercised investment discretion with respect to accounts holding section 13(f) securities having an aggregate fair market value of at least $100 million were required to file Form SH, which excluded short-only funds and other large short sellers who did not file Form 13F. Additionally, the report was costly as Managers filing Form SH had a weekly reporting requirement. Additionally, data fields in Form SH including start of day short position, gross number of securities sold short during the day, and end of day short position were each subject to the
Many Managers operate in the investment management industry.
Investment managers, like other investors that could be subject to Rule 13f-2, also compete by using proprietary trading strategies. They typically seek to trade in ways that would not expose their strategies because, if their strategies became known to others, the strategies could lose value and such Managers could also suffer higher trading costs. More specifically, other traders could use copycat trading strategies to try to mimic the Managers' strategy, potentially competing away the profitability of the strategy or other traders could anticipate when the Manager might trade, which could result in higher trading costs for the Manager. Some Managers also compete for returns by engaging in securities lending whereby assets are lent to other investors, often short sellers, for a fee. These fees in aggregate can be substantial.
The Commission estimates there are 3,501 broker-dealers. These broker-dealers also compete with each other for order flow. The broker-dealer industry is a competitive industry with reasonably low barriers to entry to many segments of the industry. Most trading activity is concentrated among a small number of large broker-dealers, with thousands of small broker-dealers competing for niche or regional segments of the market. To limit costs and make business more viable, the small broker-dealers often contract with bigger broker-dealers to handle certain functions, such as clearing and execution, or to update technology. Larger broker-dealers often enjoy economies of scale over smaller broker-dealers and compete with each other to service the smaller broker-dealers who are both their competitors and customers.
The adopted Rule 13f-2 and CAT amendment will enhance the Commission's ability to protect investors and investigate market manipulation by providing a clearer view into the short selling market and improving the Commission's reconstruction of significant market events. This in turn may lead to improved identification of manipulative short selling strategies which may also serve as a deterrent to would-be manipulators and thus may help prevent manipulation. It will also improve the Commission's observation of short sale activity that potentially poses a systemic risk. The Commission believes that the adoption of Rule 13f-2 and the CAT amendment will benefit investors by facilitating the Commission's observation of short selling and will thus help protect investors and help ensure the sufficiency of information related to short selling in the market.
The Commission believes that the Rule 13f-2, Form SHO, and the CAT Amendment will improve regulators' oversight of markets and enhance the Commission's and SROs' reconstruction of significant market events by providing a clearer view into the role that short selling plays in market events of interest. Specifically, the Commission could have used Form SHO data combined with other data to reconstruct market events and better understand the link between trading activity of large short seller and contemporaneous price volatility during the recent volatility associated with meme stocks. For example, while short sellers as a whole were exiting their positions during the period of heightened volatility, large short sellers may have been engaging in trading behavior that was distinct from other short sellers.
The recent adoption of Rule 10c-1a will further enhance the usefulness of adopted Form SHO.
Hypothetically, if Form SHO data had been available to the Commission at the time of the market events of January 2021, the Commission could have used these data to examine the short selling behavior of individual large short sellers. Additionally, because short positions often take some time to create, the Commission could have attempted to identify individual short sellers with large short positions in the various meme stocks in January 2021 based on the most recent reports; the Commission could then have used CAT data to better understand how these short sellers traded during the heightened volatility.
As noted above in Part VIII.B, Form SHO data will provide the Commission with data that are additive rather than duplicative.
Analysis of Form SHO data during periods of high volatility might help the Commission maintain fair and orderly markets by highlighting key economic channels and mechanisms through which short selling could both impact and be impacted by periods of volatility. This information can, in turn, allow the Commission to more specifically tailor responses to similar or related events in the future. While the data provided by the CAT amendment will be visible to the Commission relatively quickly, the Form SHO data will only be available following a lag of at least two weeks.
The bona fide market making information from the CAT Amendment will facilitate regulatory analysis of the use of the bona fide market making exceptions to Regulation SHO.
The bona fide market making information might improve regulators' ability to interpret certain information in market reconstructions. Market reconstructions can sometimes benefit from regulators knowing when certain activity is either directional or market neutral because the motives and profitability of such trading types are different. The bona fide market making information will help regulators separate short selling that represents market makers' liquidity provision to facilitate investor demand from other short selling, including other market maker short selling. Since such short selling is more likely to be in response to customer demand, it is less likely to signify that the short seller anticipates a price decline, relative to cases in which the short seller is trading directionally.
Additionally, the data provided by adopted Rule 13f-2 and the CAT amendment may improve the Commission's ability and effectiveness in detecting certain types of fraud. Form SHO data will provide the Commission flags that may signal potential fraud during an examination. Additionally, the enhanced CAT data will provide the Commission with regular access to improved information with which to examine potential instances of fraud without needing to ask broker-dealers for information.
Enhanced fraud detection by the Commission may also help deter fraud, resulting in improved price efficiency and market quality. Some market participants and academics have raised concerns that short selling may in some instances offer the potential for stock price manipulation, including “short and distort” campaigns.
Short and distort campaigns are more likely to occur in stocks with lower market capitalizations with less public information.
Enhanced oversight due to the adopted rule and amendment could also provide increased protection from other sources of harm caused by manipulative short sale activity. First, if firm manager decision-making is influenced by shifts in stock prices, as one theoretical study suggests,
Publicly releasing aggregated information about large short positions may, in some instances, increase the risk of trading behavior that is harmful to short sellers, including orchestrated short squeezes. More specifically, to the extent that Managers are still holding their short positions when the data becomes public, the Commission believes that the information disclosed pursuant to Rule 13f-2 and the disclosures Form SHO requires also might, in some cases, potentially facilitate manipulative strategies targeting short sellers, such as short squeezes.
However, the Commission has sought to reduce this risk by releasing only aggregated and anonymized data. Several commenters agreed that only aggregated and anonymized data should be published by the Commission in order to reduce the likelihood of short squeezes and chilling short sale activity, the latter of which could harm stock price efficiency and market liquidity.
The Commission recognizes that the position size thresholds that underlie publicly released information may lead to the risk of Managers being identified by the public. The Commission estimates that 39 percent of stocks reported on Form SHO would only have one Manager above the reporting Threshold A.
Having detailed confidential information about which Managers currently hold large positions might also help the Commission observe potential systemic risk concerns regarding short selling. Large and concentrated short positions have the potential to increase systemic risk. As discussed previously, unlike long transactions, short selling places an investor at risk of losing significantly more than the investor's initial investment, should the value of the underlying asset increase significantly. Even temporary spikes in asset value can lead to significant losses—by triggering margin calls or even position liquidations if capital requirements cannot be met.
One commenter stated they were unaware of cases of short selling causing systemic harm.
Manager level short position data of individuals with large short positions might allow the Commission to better observe these positions, study, and more appropriately respond to any market events that arise. For example, if the Commission had Form SHO data during the meme stock events of January 2021 then it would have had a clearer view as to which Managers held large short positions prior to the volatility event and thus which Managers could have been at greatest risk of suffering significant harm from a short squeeze. However, the ability of the Commission to respond to market events is likely impacted by the timeliness of the short sale data that it receives. One commenter stated that due to the delay in reporting of Form SHO, the data would not be useful to the Commission to respond to market events.
All the effects, positive and negative, associated with the data collected by Rule 13f-2 discussed in this section will be limited by data accuracy. Upon filing, Form SHO will be checked for technical errors but not for the accuracy of the position and activity data in the Form. If Managers make mistakes in their calculations, such mistakes will reduce the utility of the data. However, the amendment process will require Managers to amend filings when they discover errors, thus promoting the accuracy of the information.
The Commission believes that Rule 13f-2 and Form SHO may have uncertain effects on stock price efficiency.
The publicly released aggregated data from Form SHO will provide information to market participants about the aggregate activities of large short sellers—with a planned lag of approximately fourteen days from the end of the filing deadline, which is fourteen days after the last day of the month.
There is overlap between the information about stock fundamentals contained in FINRA short interest data, forthcoming Rule 10c-1a data, and the data that will be aggregated from Form SHO filings. However, the information in Form SHO filings provides data on Managers, including their aggregated daily net changes in positions.
Form SHO data could also be combined with forthcoming Rule 10c-1a data in order to assess the degree to which securities lending is widely dispersed among market participants or concentrated among Managers who filed Form SHO.
Rule 13f-2 and Form SHO may also improve price efficiency if they mitigate fraud as discussed in Part VIII.C.1. Fraud is inherently non-efficient trading and harms price efficiency because a fraudster's motive is to create a deviation of a firm's value from fundamentals and to profit from this deviation. Thus, to the extent that fraudulent trading, such as short and distort campaigns, are limited by regulator's access to the data provided by Form SHO, Rule 13f-2 will result in improved price efficiency.
More generally, the impact of Form SHO on price efficiency will be commensurate with the degree to which aggregated Form SHO data are newer or more timely than other publicly available short selling information and useful for valuing stocks. Price efficiency (also known as market efficiency) refers to how accurately prices reflect available information relevant to the value of the asset.
Even if many positions are closed by the time the information is disseminated, Tables 1 and 2 will still promote price efficiency if the prices do not yet reflect the historical short position and activity information. Table 2, for example, will provide information on the variability of large short positions in a security and how large short positions changed around corporate events. Such information will improve the precision of signals from Table 1 information and corporate events.
Rule 13f-2 may harm price efficiency by increasing the cost of short selling.
Rule 13f-2 increases the costs of short selling in at least four ways: (1) Compliance costs, (2) potentially revealing short sellers' information that may have been acquired through fundamental research, (3) potentially revealing short sellers' trading strategies, and (4) increasing the threat of retaliation against Managers by other market participants.
The compliance costs associated with reporting large short positions will result in an increase in the cost of short selling.
Publicly releasing aggregated Form SHO data has the potential to reveal some of the information that short sellers may have acquired through fundamental research.
To avoid price impacts, a short seller seeking to build a sizeable position in a firm generally does so by building up small positions over time until the desired position is accumulated.
Relatedly, Managers who wish to build large short positions may choose to execute their transactions at a pace that is faster than what they would have done otherwise to attempt to profit from their research before information is disclosed and copycat investors are able to trade based on the reported data. Executing transactions at a faster speed than would be optimal imposes increased transaction costs on Managers than they would have incurred otherwise.
If Form SHO data provides information about the specific trading strategies or identities of certain short sellers, those short sellers could be harmed by actions such as others profiting from predicting their trading or copycat trading.
While Rule 13f-2 was designed to minimize the possibility of identifying Managers or their proprietary information, there are conditions that may arise that would be conducive to revealing proprietary trading strategies. For example, in cases where market participants may be able to discern that there is only one Form SHO filer,
The public disclosure requirements might also increase short selling costs by exposing Managers to the risk of retaliation by other market participants, but the risk may be low.
Although aggregating the data before releasing it to the public on a delay will provide some protection to Managers from having their identities uncovered, in certain cases motivated market participants may still be able to identify individual investors. For instance, in the case that the aggregated short position reported to the public is just above the threshold, market participants might reasonably assume that only one Manager has a short position large enough to report, which may facilitate identifying who that manager is. The Commission believes that even if the probability of identifying individual short sellers is low, the threat of this additional exposure to retaliation may disincentivize short selling.
In the event that Managers can be identified from Form SHO disclosures, issuers might take retaliatory action against individual short sellers through lawsuits and by forwarding information to regulators in attempts to precipitate regulatory investigations, through claims in the media, or by applying pressure on the shorting firm through business relationships that may exist outside of trading.
In addition, publicly disclosing that Managers, in aggregate, have amassed large aggregate short positions may expose the Managers to increased risk of being the target of predatory strategies such as short squeezes. The risk of short squeeze increases if market participants are able to identify the individuals with large short positions, as discussed in Part VIII.C.1.
Because reporting information on Form SHO increases the costs of short selling, the adopted rules could have several negative effects on price efficiency. In particular, negative price efficiency effects could derive from a reduction in fundamental research,
It is possible that short sellers may strategically select average short position just below the threshold in order to avoid reporting. The size of a short position is often related to the expected magnitude of the short seller's negative information, with revelations of larger negative information being associated with larger short positions.
Additionally, Rule 13f-2 might dissuade options market makers from holding large short positions and providing liquidity in options markets and, thus, might harm price efficiency in equity markets. Research has found that options play an important informational role in stock price discovery, therefore reductions in liquidity in the options market can reduce the price efficiency in the equity market.
As with the discussion in Part VIII.C.1, many of the economic effects articulated in this section relating to the reporting of Form SHO might be limited to the extent that the data reported in Form SHO contains factual errors. The EDGAR system will check the data for technical errors but not the accuracy of the data entry by filers. Thus, the data reported in Form SHO might contain errors. To the extent that these errors exist and meaningfully affect the usability of the data, the value of the data and the economic benefits and costs associated with collecting the data would be limited. Additionally, the benefits and costs are lessened by the delay in the publication of the data. Furthermore, the data will only be available for those securities with Managers who have short positions over the threshold, which may not be representative of all short positions, and the number of reporting Managers may change from month to month.
The effect of the adopted Rule 13f-2 and CAT amendment on liquidity is uncertain. Part VIII.C.2.c discusses the possibility that Rule 13f-2 and Form SHO may harm price efficiency by dissuading investors from pursuing fundamental research. Alternatively, Rule 13f-2 and Form SHO may help price efficiency by increasing transparency with respect to the actions of large short sellers. To the extent that the adopted rule and amendment improve price efficiency, this might also indirectly improve liquidity because market makers would be subject to less mispricing risk. Mispricing risk leads to lower liquidity because market makers must be compensated in the form of wider bid ask spreads for the potential that there is information relevant to the firm that has not yet been discovered and may affect prices. Thus, to the extent that the Rule 13f-2 enhances price efficiency, it may also enhance liquidity by mitigating mispricing risk. Conversely, if the Rule harms price efficiency, it may also harm liquidity.
Equity market makers generally do not carry large gross short positions overnight. However, adopted Rule 13f-2 and Form SHO may make market makers more concerned that a particularly volatile trading day may cross the Reporting Thresholds requiring the filing of Form SHO. One commenter described the concern for unintentionally crossing the threshold while market making.
Additionally, in the event that an options market maker might have short equity position close to the Reporting Thresholds, Rule 13f-2 might dissuade these option market makers from increasing their short position, which may harm their willingness to provide liquidity in options markets. Alternatively, Rule 13f-2 might not cause option market makers that exceed the Reporting Thresholds to reduce their positions in order to avoid filing Form SHO, in which case the additional associated spending on filing Form SHO (and other compliance costs) might result in wider spreads if the compliance costs are large enough.
The Commission believes that Rule 13f-2 and Form SHO might have mixed effects on corporate decision making. On one hand, research suggests that corporate managers learn from market reactions to announcements.
In another aspect, short sellers, and particularly large short sellers with the resources to perform fundamental research, serve as valuable external monitors of management. If a corporate manager knows that short sellers are monitoring their actions and financial statements and are willing to expose wrongdoing, then they are less likely to engage in fraud or do other things that may hurt the value of the company. Historically, short sellers have, at times, through doing research, uncovered fraudulent behavior.
As discussed in Parts VIII.C.1 and VIII.C.2, the adopted rule and related Form SHO will increase the cost of short selling, particularly large short positions—potentially leading to less overall short selling. As discussed in Part VIII.C.2, short sellers must borrow shares for their short position. When short sellers borrow shares, they pay a borrowing fee to the owner of the share. These fees can represent a significant source of revenue for pension funds, mutual funds, and others who engage in securities lending.
The Commission believes that there will be direct costs associated with adopted Rule 13f-2, Form SHO, and the CAT amendment. These costs include Managers reporting position and activity data, broker-dealers updating CAT reporting processes, and the Commission processing and releasing the Manager reports through EDGAR. Rule 13f-2, related Form SHO, and the amendment to CAT in aggregate, will result in an estimated maximum of $119,975,800 in initial costs and $72,026,064 in annual costs.
The Commission received several comments from industry groups concerned about the cost of implementing Rule 13f-2, Form SHO, and the CAT amendment. One commenter stated that Managers currently do not have systems in place to comply with Rule 13f-2, Form SHO, and the CAT amendment. Multiple commenters stated that there would be high costs associated with tracking positions for the purpose of seeing if they had crossed the Reporting Thresholds.
The Commission believes that Managers will incur an initial technology-related burden to update their current systems to capture the required information and automate and facilitate the completion and filing of Form SHO.
The Commission estimates that the annual cost to Managers for filing Form SHO ranges from $15,202,252 to $60,326,400.
For
The Commission believes the need to amend Form SHO may vary by familiarity with filing Form SHO. These costs may be more common for Managers who do not hold short positions often and are likely to decrease with time as Managers become more experienced with filing Form SHO. As part of updating systems to comply with the reporting requirements of Rule 13f-2, Managers must calculate the market value of
There will be costs associated with tracking short positions in relation to the threshold.
The Commission received several comment letters that described what they believed were the high cost of monitoring with respect to the thresholds to file Form SHO under Rule 13f-2.
For Managers engaged in shorting selling, the rule necessitates that Managers calculate their average daily gross short position in equity securities for which they have conducted short sales during that calendar month in order to know if they are required to file Form SHO within 14 days of the end of that month.
The Commission understands that the cost of tracking short positions might be higher for certain types of equity securities. For example, tracking the short position in an ETF as a percent of shares outstanding will be more difficult as the number of shares outstanding changes frequently. Additionally, Managers who hold short positions in non-reporting company issuers may have difficulty calculating the value of their position, however Managers may use the last price at which the Manager traded even though the price may be stale.
Requiring Form SHO to be filed on EDGAR in Form SHO-specific XML will not impose significant incremental costs on Managers. The Commission expects most Managers who will be required to file Form SHO will likely have experience filing EDGAR forms that use similar EDGAR Form-specific XML data languages, such as Form 13F. In that regard, the process for filing Form SHO, as well as the XML-based data language used for Form SHO, will be similar to the filing process and data language used for Form 13F.
In addition, Managers will be given the alternate option of filing Form SHO using a fillable web form that will render into Form SHO-specific XML in EDGAR, rather than filing directly in Form SHO-specific XML using the technical specifications published on the Commission's website. We expect Managers who do not have experience filing Form 13F or other EDGAR Form-specific XML filings will likely choose this option. In that regard, Managers are only required to file Form 13F if they exercise investment discretion with respect to accounts holding section 13(f) securities having an aggregate fair market value on the last trading day of any month of any calendar year of at least $100 million.
The 25 Plan Participants will face costs associated with the CAT amendment, as they will be required to engage the Plan Processor to modify the Central Repository to accept and process new short sale data elements on order receipt and origination reports. Additionally, the Commission estimates an external cost of $4,522 per participant or $113,800 total to compensate the Plan Processor for staff time required to make the initial necessary programming and systems changes.
The Commission believes that the CAT amendment involving the bona fide market making exception from the locate requirement will impose a one-time cost to Industry Members.
The Commission recognizes that costs will vary broadly across Industry Members, particularly depending on whether the Industry Member outsources the provision of an order handling system and regulatory data reporting to a service provider. In the CAT NMS Plan Approval Order,
For Industry Members that outsource, the Commission believes that implementation costs will be far lower because the service bureaus that provide them with order handling systems and regulatory data reporting services will adapt those systems on their customers' behalf.
The Commission is cognizant of the burdens Managers experienced of filing Form SH in compliance with temporary Rule 10a-3T and has designed Rule 13f-2 and Form SHO to attempt to reduce those burdens. First, commenters on the temporary Rule 10a-3T stated that the 0.25 percent threshold was too low.
Notwithstanding these cost-reducing differences, the Commission does recognize that other differences might offset some or all of these cost reductions. In particular, Rule 13f-2 and Form SHO will require that the information on activity include daily records if the Manager exceeds a position threshold that month rather than include daily records if the Manager exceeds an activity threshold that week.
One commenter stated that the Commission should consider that “the sheer number and complexity of the Proposals, when considered in their totality, if adopted, would impose staggering aggregate costs, as well as unprecedented operational and other practical challenges.”
In this regard, some commenters mentioned the proposals which culminated in the recent adoptions of Rule 10c-1a, Beneficial Ownership Reporting, Private Fund Advisers, Settlement Cycle Adopting Release, and May 2023 SEC Form PF Amending Release.
However, we do not think these increased costs from overlapping compliance periods will be significant for several reasons. First, the number of Managers who will also be subject to one or more of these recently adopted rules could be limited; we estimate that 252 to 1000 Managers may be required under the final rules to report on new Form SHO, and of those, depending on their activities, only a portion may also be required to comply with one or more of the recently adopted rules raised by commenters (and even fewer may need to comply with more than one of those other rules).
Rule 13f-2 and Form SHO will require the short position and activity disclosures to be filed on the Commission's EDGAR system using a structured, machine-readable data language. In particular, the rule and Form will require Form SHO to be filed on EDGAR in a custom XML-based data language specific to that Form (“custom XML,” here “Form SHO-specific XML”). The XML schema for Form SHO-specific XML will incorporate validations of certain data fields on the Form to help ensure consistent formatting and completeness.
One commenter agreed with the Commission's proposal to require Managers to provide Form SHO in EDGAR in a Form SHO-specific XML.
Similarly, the provision of the aggregated security-level information at a centralized, publicly accessible location in a structured, machine-readable data language, will enable investors and other public data users to download the aggregated information
Requiring the short position and activity disclosures to be filed in Form SHO-specific XML will facilitate more thorough review and analysis of the reported short sale disclosures by the Commission, which will increase the efficiency and effectiveness with which the Commission could identify manipulative short selling strategies—which may also serve as a deterrent to would be manipulators and thus may help prevent manipulation.
The requirement for short sale disclosures to be filed on EDGAR in Form SHO-specific XML will result in additional incremental compliance costs on filing Managers. These direct compliance costs are detailed in a subsequent section.
Some commenters expressed concerns with regard to the risks of cyber criminals accessing non-public Form SHO data.
As stated previously, one commenter stated that the LEI and the FIGI of issuers is “not commonly provided” in other holding reports and would therefore cause Managers to incur additional costs.
FIGIs also are widely used in the financial markets, and the Commission recently added FIGI as an optional securities identifier on Form 13F.
The Commission recognizes the risk that the benefits of Form SHO data could be diminished to the extent that Managers avail themselves of economically similar arrangements. For example, Managers might consider trading derivatives in place of engaging in short selling, particularly for stocks with liquid options.
The Reporting Thresholds in Rule 13f-2 are based on a Manager's gross short position in the equity security itself, and do not consider derivative
Using derivatives to establish an economically equivalent short position that does not include a reporting obligation may be costly. Options tend to be more expensive than equity transactions, particularly for less liquid securities. Additionally, some equities do not have listed options. Consequently, the Managers' desire to avoid the costs associated with reporting Form SHO information articulated in Parts VIII.C.1 and VII.C.2 is balanced against the increased cost of using derivatives such as options to execute a short position. Thus, for some stocks,
Markets function best and are most efficient when all relevant information regarding a security is known and is incorporated into prices.
Additionally, the CAT amendment will improve the efficiency of the Commission's oversight and enforcement of regulations relating to the bona fide market making exception by providing more efficient access to data on how individual market makers are using the exception. Currently, the Commission must request information about the use of the market maker exception from specific broker-dealers.
Investors compete with one another to gather information that they use to enact trading strategies. Academic research indicates that when short selling is costly, investors owning the asset have an advantage in gathering information due to the reduced cost of acting on whatever information that they gather.
The Commission believes that the CAT amendment will not alter significantly the competitive landscape for broker-dealer services. Because small broker-dealers are likely to use a service bureau to report their CAT data,
In addition, as stated above, some commenters requested the Commission consider interactions between the economic effects of the proposed rule and other recent Commission rules, as well as practical realities such as implementation timelines.
One of the primary roles of the securities markets is to allocate capital
Additionally, academic research suggests that managers learn from stock price changes, using them as a way to tap into the `wisdom of crowds' phenomena to improve decisions.
The costs associated with Managers monitoring their short positions for compliance with reporting Form SHO along with the negative economic effects detailed in Parts VIII.C.1, VIII.C.2, and VIII.C.7 may harm capital formation, specifically capital formation using convertible debt, if it increases the cost of short selling. Investors may be less inclined to purchase convertible debt if the cost of hedging that purchase by short selling the security becomes more expensive—through both the direct and indirect costs associated with Form SHO.
In contrast, adopted Rule 13f-2, Form SHO, and the CAT amendment may have a positive influence on capital formation if they disincentivize short selling that takes place in connection with securities fraud. For example, in one type of fraud, investors holding convertible debt would engage in a manipulation including short sales of a stock in an attempt to drive down the price artificially in order to convert their debt to equity and cover their short positions at a lower price. To the extent that the rule facilitates better oversight and prosecution of this sort of fraud, it may facilitate capital formation by lowering the risk that convertible debt holders will engage in this sort of fraud. More generally, to the extent that enhanced oversight of short sale activity deters manipulative activity such as short squeezes and associated price bubbles stemming from short squeezes, price efficiency may be enhanced, which in turn, could further promote capital formation.
Rule 13f-2 may also affect capital formation through investor confidence. Some commenters on FINRA's short interest proposal suggested that short selling, and in particular a lack of short selling disclosure, leads some investors to have less confidence in financial markets.
As an alternative to collecting, aggregating, and publishing Form SHO, the Commission considered amending the CAT NMS Plan to collect additional information so that the Commission or the Plan Processor could aggregate and publish CAT Data. This alternative would effectively eliminate the thresholds for reporting.
CAT data currently contains a short sale mark and, as part of the implementation of the Customer Account Information System (CAIS), will also provide the identities of those transacting. Consequently, the Commission or the Plan Processor could aggregate information on the number of short sales that Managers engage in from CAT, assuming that the Commission or the Plan Processor could determine that a transaction is by or on behalf of a Manager, and disseminate aggregated information to the public at monthly intervals—or more frequently. The Commission or Plan Processor could publish daily statistics on the number of short sales engaged in by Managers each day in the prior month as reported in CAT. Additionally, the reports could include information on options transactions that lead to short exposure, such as purchasing a put option, or writing a call option.
The alternative would result in lower benefits than those from Rule 13f-2 and the disclosures Form SHO requires. The data published under this alternative would have significant overlap with the data that would be published under Rule 13f-2 and Form SHO. However, again assuming that the Commission or the Plan Processor could determine that a transaction is by or on behalf of a Manager, the data in this alternative could be more comprehensive in terms of the breadth of Managers whose short selling information could be aggregated and published,
The alternative would also reduce the benefits of comparing the published data to short interest because the alternative would focus on transaction dates rather than settlement dates and the alternative would not be restricted to large positions.
This alternative would mitigate some of the concerns associated with Managers being exposed to increased risk of short squeezes or other retaliation as discussed in Parts VIII.C.1 and VIII.C.2. This reduced risk stems from the fact that it would be more difficult to determine whether the short selling activity reported was due to many Managers short selling small amounts, or just a few Managers short selling large amounts. It would also be more difficult to identify individual short sellers based on the data. A lower risk of retaliation or short squeezes may also mitigate some of the negative effects of Rule 13f-2 and Form SHO with regard to less overall short selling or fundamental research that are described in Part VIII.C.2, depending on the delay in publication under the alternative.
Additionally, this approach would have lower compliance costs for Managers than the current proposal, as it would not require Managers to file Proposed Form SHO. One commenter agreed that releasing CAT data with short sale information would be less costly for Managers than Proposed Form SHO.
There are several drawbacks to this alternative relative to the existing proposal. First, it would take some time before CAT data could be used to develop an estimate of the size of short positions. Thus, the data would not immediately provide the Commission or market participants with information about the size of individual large short positions. Consequently, to the extent that knowing the total size of short positions held by Managers with large positions conveys fundamental information to the market, then this fundamental information would not be immediately available if the Commission were to adopt a version of this alternative. Additionally, the data provided by this alternative would exclude transactions outside of the purview of CAT that may affect short positions. Thus, the data provided under this alternative would always be estimates of total short positions, which could be inaccurate for some Managers. Another drawback to this alternative is that releasing CAT data to the public could increase security risks. CAT contains highly sensitive information and creating a process that would release portions of the data, even if aggregated, could present risks.
A larger expansion of CAT could achieve at least the same data value as in Rule 13f-2 and Form SHO.
Further, if the Commission were to expand CAT to collect additional information beyond what would be captured by the amendment to CAT, such as position information, then these additional expansions would impose significant direct costs to CAT-reporting firms.
As discussed in Part VIII.C.4.i, FINRA already collects and, together with the listing exchanges, disseminates aggregate short interest that it collects from member broker-dealers. Consequently, the Commission could codify FINRA's existing process to ensure that it continues in perpetuity.
Similarly, the Commission could require FINRA to publish a version of its short interest information that specifically identifies the aggregate short interest of Managers—separate from other short interest.
The Commission also expects that data on Manager short interest in addition to total short interest would have likely not provided much incremental value over the existing short interest data due to the likely significant overlap of the short positions of Managers and total short interest, and the absence of activity information to better understand changes in short interest.
The Commission could adopt a modified rule that allows broker-dealers to file Form SHO reports with the Commission on behalf of Managers.
The Commission could also craft Rule 13f-2 and Form SHO to be consistent with European disclosure requirements.
Consequently, the Commission could structure the rule to require Manager short selling reports that are consistent with the European regulations in terms of the thresholds for reporting, the computation of the threshold, the items reported, the timing for when short sale information is made public, and the timing for when new reports have to be issued. This alternative would provide directional information about short positions because only net short positions are required to be reported; would likely impose lower compliance costs to Managers;
One advantage of this alternative would be likely lower compliance costs for Managers that engage in short selling in both the EU and US.
This alternative also could have some negative consequences. The EU data are timelier than data available under adopted Rule 13f-2, since the forms are posted publicly immediately after receipt by the regulator, which potentially facilitates greater price discovery. However, this comes at the cost of increasing the possibility of revealing short sellers' proprietary information and its associated risks, including short squeezes and copycat trading. Additionally, the EU structure, whereby individual short sellers' names are made public, might raise the risk of retaliation towards short individual sellers, as well as the ability for market participants to engage in copycat strategies that decrease the profitability of gathering information. As a result of these costs to short sellers, investors may not be able to gather as much fundamental information as under the final rule.
Another potential consequence of this alternative would be adjusting position sizes to evade the Reporting Threshold. Multiple studies found evidence that short sales in the EU are clustered below the threshold, suggesting that investors are trying to conceal their positions to protect their underlying investment strategies.
By reporting net short positions, rather than gross short position, the Commission and the public would not receive information about large, but hedged, short positions. For instance, the alternative would allow
A reporting requirement for only net short positions would reduce the value of Rule 13f-2 data for use in reconstructing market events. For instance, during the recent meme stock phenomenon, for certain stocks it became difficult to hedge options transactions using the underlying security due to the significant price changes in the spot market. Consequently, positions that were previously judged to have been hedged, and thus low risk, may no longer have been hedged. In addition, large short positions with hedges that have been significantly weakened or broken due to unforeseen extreme market events, may have become systemically important. In such cases, it would be useful for the Commission to have information on large short positions, regardless of perceived net short position, in order to
Further, the EU regulations provide activity data if positions change by 0.1 percent or more. Thus, market participants could only learn about measured positions changes, rather than position changes of all sizes. As an example, there may be times where the public may be interested in seeing the reaction to a corporate announcement, but this may be limited if Managers do not adjust short positions above the 0.1 percent threshold to trigger reporting.
The Commission could release the information included in Form SHO in a different manner. This alternative could take one of several forms.
In the first alternative, the Commission could release Form SHO as filed, allowing all market participants to see the identities of short sellers—similar to the EU regulation discussed above. This would increase the information that market participants have to evaluate sentiment on particular equities in the market. In particular, for some market participants, this information would also allow market participants to better manage risk by allowing them to manage their exposure to Managers with large short positions. There are also potential costs to this alternative. One potential result from this alternative is that if a short seller is viewed as sophisticated and informed, then releasing identifying information would likely spur copy-cat trading strategies. This outcome has been documented with respect to the EU regulation and suggests that revealing the identities of the short sellers may diminish the value of becoming informed.
Similarly, the Commission could publicly release individual Form SHO filings with identification information removed from the released data. This alternative would provide market participants a clearer view into the activities of large short sellers, potentially improving their ability to learn from the actions of large short sellers relative to the current proposal. For instance, the data would allow market participants to know whether short sentiment was broadly held—as would be indicated by many filings—or concentrated—as would be indicated by few filings. This information could potentially improve the market assessment of bearish sentiment relative to Rule 13f-2, improving price efficiency.
However, the indirect costs of this alternative would be greater than for Rule 13f-2 and Form SHO. Releasing all the information from Proposed Form SHO could reveal trading strategies that would be costly even if the identities of the short sellers remained anonymous. For example, releasing this information, even without naming the short sellers, might increase the risk of copycat trading which reduces the profits of acquiring information. It might also provide information about how vulnerable short sellers may be to a short squeeze as it could give a signal about whether a short seller has a large and potentially vulnerable short position. In this case, the negative effects of the rule on the value of collecting information and of short selling in general would be greater than under the final rule, leading to less price efficiency and potentially more volatility. Additionally, even though the data could be released anonymously, it is not clear that in all cases the identities of the individual short sellers would remain anonymous.
Alternatively, the Commission could release the data as specified in the current proposal but also include the number of entities whose Form SHO reports were collected. This information would provide the market with additional detail about whether short sentiment was broadly held by multiple Managers, or narrowly held by just one or a few. This information could be useful as market participants assess bearish sentiment in the market and adjust their actions accordingly. However, adding this information might also increase the risk of short squeezes or other retaliatory actions in the case where there are very few reporters of Form SHO. In the Form SH data collected under temporary Rule 10a-3T, 32 percent of stocks had only one Manager reporting a position per month.
Similarly, the Commission could collect Form SHO data but publicly release the daily aggregate increases separately from the daily aggregate decreases in short positions as opposed to daily net changes to short positions as adopted in Form SHO. This approach would provide the public more detailed information and understanding on what drives changes to short positions. However, separating daily aggregate increase from decreases in short positions could increase the risk of revealing trading strategies, which could disincentivize short selling and harm market quality.
Investors can use derivatives to take an economically short position in a security. For example, an investor with a bearish view of a stock can purchase a put option in that stock. Consequently, for a more complete view of the total economic short position that a Manager has taken, the Commission could require Managers who report adopted Form SHO to also disclose their derivatives positions on underlying equity securities such as options and
Requiring this data would provide a more complete view of the economic short position that a Manager engaging in a large short sale has taken.
Requiring options data to be reported on Form SHO would increase the compliance costs to Managers of reporting on Proposed Form SHO. One commenter stated that the inclusion of derivatives, warrants, convertible debt, and ETFs would be costly.
While Managers generally track their options exposure carefully, it is frequently different trading desks that execute options trades and equity transactions. Thus, it is possible that Managers use separate systems to track their options and equity positions. For these Managers, collecting options and equity transactions to report the data required for Proposed Form SHO would require building a process to pull data from two separate systems—increasing the cost of complying with the rule. Requiring derivative position information might also be duplicative of other derivatives reporting requirements.
As an alternative to the adopted Form SHO Thresholds, the Commission could require reporting Form SHO at either higher or lower thresholds—or no threshold.
Commission analysis of Form SH data collected under temporary Rule 10a-3T indicates that the gross short position thresholds in adopted Form SHO for Threshold A, equal to daily averages of $10 million or 2.5 percent of shares outstanding, would have collected more than three-quarters (78.5 percent) of the dollar value of short positions.
A lower threshold would also enhance Commission oversight of short selling and allow the Commission to more easily reconstruct significant market events involving short selling—again because the data would be more comprehensive. One commenter stated that reducing or eliminating the reporting thresholds to Form SHO would provide additional benefits, since unknown, hidden short positions pose risks to investors and the markets. Reducing or eliminating reporting thresholds would reveal the identity of all holders of short sale positions, thereby reducing these risks.
However, a lower or no threshold would increase the cost of reporting Form SHO data in terms of compliance costs associated with Managers compiling and filing the required data thorough EDGAR and in the indirect costs associated with revealing short sellers' information. Evidence of this increase in aggregate reporting costs can be seen through an analysis of Form SH data. For example, if the reporting thresholds of adopted Form SHO were reduced from average daily gross position of 10 million or 2.5 percent of shares outstanding to $5 million or 1 percent of shares outstanding, the number of reporting Managers would rise from 252 to 314. Furthermore, the increase in the share of gross short sale dollar volume covered by reporting Managers would rise from 78.5 percent to 88.6 percent. In addition, Managers would likely be required to file reports for more securities, which would further increase compliance costs. Indirect costs include increased risk of copycat short selling strategies, which can lead to herding and increased volatility, and short sellers engaging in strategic behavior to build short positions just underneath the threshold, which would lead to lower price efficiency.
In some cases, a lower threshold would decrease the indirect costs associated with adopted rule because it would be harder to identify individual short positions from aggregate reporting if there are many entities reporting.
In contrast, alternatives that would raise the reporting threshold would lower many of the costs associated with providing Form SHO data, since fewer entities would be required to report. It would also limit somewhat the value of the data—again as the reported data would reflect a smaller portion of overall short positions. One means of increasing the threshold would be to require that both thresholds in Threshold A (
Higher thresholds, however, might also come with increased risk of identification and retaliation towards short sellers because at some point the likelihood that more than one investor holds a very large short position diminishes. For example, according to analysis of Form SH data, if the Form SHO thresholds rose from an average daily position of $10 million or 2.5 percent of share outstanding to $25 million or 5 percent of shares outstanding, the share of reported securities with only one Manager would rise from 39.3 percent to 48.4 percent.
Another alternative would be to raise the percent threshold from 2.5 percent to 5 percent, as suggested by one commenter,
For securities subject to Threshold B, the economic impact of either raising or lowering the dollar threshold would be similar. Raising the threshold would lower compliance costs but also the quality of the data, while lowering the threshold would do the opposite. For example, if the Commission raised Threshold B from $500,000 to $10 million, then under the assumption of one manager short selling each Threshold B security, the total number of short positions captured for Threshold B securities would decrease from 23.72 percent to 8.76 percent.
As another alternative to the proposed Threshold A, the Commission could establish a threshold based on one rather than both of the thresholds in Rule 13f-2,
The Commission also acknowledges that using a single threshold for Threshold A would lower compliance costs, primarily because fewer entities would be required to report. However, choosing which of the two thresholds to drop would impact which positions are more likely to trigger the remaining threshold. For example, an alternative that retained only the $10 million daily average threshold would decrease the likelihood of small cap positions being reported, since these firms reach the 2.5 percent threshold before the $10 million threshold.
Commission analysis of Form SH data suggest that an alternative that includes only the 2.5 percent threshold would result in a substantial reduction in the number of reporting Managers relative to the two-prong threshold in adopted Rule 13f-2. More specifically, switching from the adopted Form SHO thresholds of $10 million daily average or 2.5 percent of shares outstanding to a single prong threshold of 2.5 percent would cause the number of reporting Managers
More generally, the alternative of requiring a threshold based only on short positions as a percent of shares outstanding would largely eliminate reporting in larger securities. Note that for stocks with market capitalization above $400 million, short sellers reach the $10 million threshold before the 2.5 percent threshold. Furthermore, for large cap stocks, generally defined as having a market capitalization exceeding $10 billion, short position would have to be more than $250 million in order to trigger the 2.5 percent threshold. Consequently, an alternative in which the Commission required reporting based only on the percent of shares outstanding would result in fewer Form SHO reports for stocks with larger market capitalizations. Less visibility into the actions of short sellers in larger market capitalization stocks would provide less information about bearish sentiment in the economy. This is because larger market capitalization stocks, which are more well-established than small cap stocks, are more likely to be shorted due to general pessimism about the macroeconomy and less likely to be targeted as part of manipulative strategy in comparison to small cap stocks.
As another alternative, the Commission could structure the Reporting Thresholds to include the nominal economic value of short derivative positions. Specifically, reporting on Form SHO would be required if a Manager's total short position in the stock and in derivatives such as options and security-based swaps exceeded the relevant Reporting Thresholds.
An additional alternative could also involve requiring reporting thresholds to be based on activity and not just positions.
As an alternative, the Commission could measure the thresholds as of the last settlement day of the month rather than using the $10 million average daily prong or 2.5 percent average daily prong for Threshold A and the $500,000 threshold over any single day for Threshold B.
Instead of Threshold B, the Commission could require the same two prong, $10 million or 2.5 percent daily average gross position reporting threshold for short positions in equity securities of non-reporting company issuers, as well as for equity securities of reporting company issuers.
However, this alternative would increase the burden for Managers as information for non-reporting company issuers can be hard to find, making threshold calculations difficult. In particular, information on the number of shares outstanding can be difficult to obtain for non-reporting company issuers and when it is available it is often stale and inaccurate. This could lead to problems with the calculations for the 2.5 percent threshold. One commenter stated that a single percentage-based threshold level applied to both reporting and non-reporting company issuers, “. . . would mitigate unnecessary operational and cost burdens on managers, including complexities from monitoring and reporting with up to three separate thresholds.”
The Commission could enhance record keeping requirements associated with this alternative by requiring Managers to record and report on Form SHO the source of data used to calculate shares outstanding.
As alternatives, the Commission could require reporting at different frequencies than the monthly reporting mandated by the rule. Specifically, the Commission could require gross short position assessment and reporting (assuming at least one of the thresholds had been crossed) at frequencies that are shorter than a month.
The fundamental tradeoff with such thresholds compares the simplicity of the rule with the potential to game the threshold by strategic trading. Such alternative frequencies face the fundamental tradeoff of increased cost and increased transparency of the data. Put simply, increasing the reporting frequency increases the number of reports and thus increases the cost associated with reporting by a similar factor.
Increased reporting frequency could also result in collecting more information than the current proposal. The difference between the information collected in the current proposal and this alternative would mainly come from the frequency and timeliness of the reports. The improved timeliness could increase the risk of copycat strategies and short squeezes, but also improve price efficiency. One commenter stated that a study of the EU's short sale disclosure policy, which requires, “immediate public disclosure of large short positions,” finds no evidence of increased manipulation or short squeezes.
The Commission could also consider different reporting windows for Managers who meet the threshold short positions to report on Form SHO.
Additionally, the Commission could adopt different horizons for releasing the aggregated data after the reporting deadline.
The adopted rule would require Form SHO to be filed in Form SHO-specific XML, a structured, machine-readable data language. As an alternative, the Commission might require Form SHO to be filed in Inline eXtensible Business Reporting Language (“Inline XBRL”), a separate data language that is designed for business reporting information and is both machine-readable and human-readable.
The Regulatory Flexibility Act (“RFA”)
Therefore, for purposes of this rule and the RFA, a Manager is a small entity if it: (i) has assets under management having a total value of less than $25 million; (ii) did not have total assets of $5 million or more on the last day of its most recent fiscal year; and (iii) does not control, is not controlled by, and is not under common control with another investment adviser that has assets under management of $25 million or more, or any person (other than a natural person) that had total assets of $5 million or more on the last day of its most recent fiscal year.
Under Rule 13f-2, Managers are not required to report on Form SHO unless they meet or exceed a specified Reporting Threshold. Managers with a gross short interest position in an equity security of a reporting company issuer will be subject to a two-pronged reporting threshold structure: a monthly average gross short position in the equity security with a U.S. dollar value of $10 million or more; or a monthly average gross short position as a percentage of shares outstanding in the equity security of 2.5 percent or more (Threshold A). Managers with a gross short interest position in an equity security of a non-reporting company issuer will be subject to a single-pronged reporting threshold structure: a gross short position in the equity security with a U.S. dollar value of $500,000 or more at the close of regular trading hours on any settlement date during the calendar month (Threshold B). While the parameters of the Reporting Thresholds under Rule 13f-2 relate to the number and dollar value of shares of short positions, rather than assets under management, the Commission nevertheless anticipates that application of the Reporting Thresholds will result in Rule 13f-2 not applying to a significant number of “small businesses” as defined under Rule 0-7(a).
With respect to the first prong of Threshold A, a monthly average gross short position in the equity security with a U.S. dollar value of $10 million or more for reporting company issuer securities represents forty percent of the assets of an entity that qualifies as a “small entity” under Rule 0-7(a). The Commission believes it is also unlikely that a significant number of small entities would place 40 percent of their respective assets under management in a short position in a single security. Further, many types of Managers that could be small entities, including bank trustees, endowments, and foundations, are subject to fiduciary standards that prohibit them from investing in large, concentrated short positions. Such restrictions deter small entities (with less than $25M of assets under management) from investing over $10M (greater than 40 percent) of their assets in a single short position, and therefore prevent them from triggering the first prong of Threshold A.
With respect to the second prong of Threshold A, smaller Managers (those with under $25M in assets under management) would likely try to leverage their assets through a combination of traditional short sales and derivatives and similar transactions that create economic short exposure to a security. Such entities therefore, would likely engage in strategies that do not lend themselves to a clear determination that the second prong of Threshold A under Rule 13f-2 has been met.
When it comes to meeting the dollar value limits of Threshold B and the first prong of Threshold A, it is important to note that for the subset of Managers that engage in the most short selling activity—hedge funds
For these reasons, the Commission certifies that Rule 13f-2 will not have a significant economic impact on a substantial number of small entities, as defined under Rule 0-10, for purposes of the RFA.
With respect to the national securities exchanges, the Commission's definition of a small entity is an exchange that has been exempt from the reporting requirements of Rule 601 of Regulation NMS, and is not affiliated with any person (other than a natural person) that is not a small business or small organization.
For the foregoing reasons, the Commission certifies that the Amendment to CAT will not have a significant economic impact on a substantial number of small entities for purposes of the RFA.
Pursuant to the Congressional Review Act,
If any of the provisions of these final rules, or the application thereof to any person or circumstance, is held to be invalid, such invalidity shall not affect other provisions or application of such provisions to other persons or circumstances that can be given effect without the invalid provision or application.
The Commission is adopting the rule and form contained in this document under the authority set forth in the Exchange Act [15 U.S.C. 78a
Reporting and recordkeeping requirements, Securities.
In accordance with the foregoing, the Commission is amending title 17, chapter II of the Code of the Federal Regulations as follows.
15 U.S.C. 77c, 77d, 77g, 77j, 77s, 77z-2, 77z-3, 77eee, 77ggg, 77nnn, 77sss, 77ttt, 78c, 78c-3, 78c-5, 78d, 78e, 78f, 78g, 78i, 78j, 78j-1, 78j-4, 78k, 78k-1, 78
(a) An institutional investment manager shall file a report on Form SHO (referenced in 17 CFR 249.332), in accordance with the form's instructions, with the Commission within 14 calendar days after the end of each calendar month with regard to:
(1) Each equity security that is of a class of securities that is registered pursuant to section 12 of the Exchange Act or for which the issuer of that class of securities is required to file reports pursuant to section 15(d) of the Exchange Act over which the institutional investment manager and all accounts over which the institutional investment manager (or any person under the institutional investment manager's control) has investment discretion with respect to either:
(i) A monthly average gross short position at the close of regular trading hours in the equity security with a U.S. dollar value of $10 million or more; or
(ii) A monthly average gross short position at the close of regular trading hours as a percentage of shares outstanding in the equity security of 2.5 percent or more; and
(2) Each equity security that is of a class of securities that is not registered pursuant to section 12 of the Exchange Act or for which the issuer of that class of securities is not required to file reports pursuant to section 15(d) of the Exchange Act over which the institutional investment manager and all accounts over which the institutional investment manager (or any person under the institutional investment manager's control) has investment discretion with respect to a gross short position in the equity security with a U.S. dollar value of $500,000 or more at the close of regular trading hours on any settlement date during the calendar month.
(3) Form SHO and any amendments thereto must be filed with the Commission via the Commission's Electronic Data Gathering, Analysis, and Retrieval system (“EDGAR”), in accordance with 17 CFR part 232 (Regulation S-T). The Commission will publish, on an aggregated basis, certain information regarding each equity security reported by institutional investment managers on Form SHO and filed with the Commission via EDGAR.
(b) For the purposes of this section:
(1) The term
(2) The term
(3) The term
(4) The term
(5) The term
15 U.S.C. 78a
This form shall be used by institutional investment managers that are required to furnish reports pursuant to section 13(f)(2) of the Securities Exchange Act of 1934 (15 U.S.C. 78m(f)(2)) and 17 CFR 240.13f-2 (Rule 13f-2).
Form SHO is attached as Appendix A to this document. Form SHO will not appear in the Code of Federal Regulations.
By the Commission.
The following appendix will not appear in the Code of Federal Regulations.
A Manager that determines that it has filed a Form SHO with errors that affect the accuracy of the short sale data reported must file an amended and restated Form SHO within ten (10) calendar days of discovering the error.
All information included in a Form SHO report is deemed subject to a confidential treatment request under 17 CFR 200.83. The Commission plans to publish only aggregated data derived from information provided in Form SHO reports.
Technical filing errors may cause delays in the filing of Form SHO. Technical support for making Form SHO reports is available through EDGAR Filer Support.
A Manager shall file a report on Form SHO:
• with regard to each equity security that is of a class of securities that is registered pursuant to section 12 of the Exchange Act or for which the issuer is required to file reports pursuant to section 15(d) of the Exchange Act (a “reporting company issuer”) in either of the following circumstances: (1) the Manager and all accounts over which the Manager or any person under the Manager's control has investment discretion that are a monthly average gross short position at the close of regular trading hours in the equity security with a U.S. dollar value of $10 million or more, or (2) the Manager and all accounts over which the Manager or any person under the Manager's control has investment discretion that are a monthly average gross short position at the close of regular trading hours as a percentage of shares outstanding in the equity security of 2.5 percent or more (“Threshold A”).
• with regard to each equity security that is of a class of securities of an issuer that is not a reporting company issuer as described above (a “non-reporting company issuer”), when the Manager and all accounts over which the Manager or any person under the Manager's control has investment discretion that are a gross short position in the equity security with a U.S. dollar value of $500,000 or more at the close of regular trading hours on any settlement date during the calendar month (“Threshold B”).
With respect to each equity security to which the circumstances described in Threshold A or Threshold B applies, the Manager shall report the information, as described in the “Special Instructions” below, aggregated across accounts over which the Manager, or any person under the Manager's control, has investment discretion.
To determine whether the dollar value threshold described in (1) of Threshold A above is met, a Manager shall determine its gross short position at the close of regular trading hours in the equity security (as defined in Rule 13f-2) on each settlement date during the calendar month and multiply that figure by the closing price at the close of regular trading hours on the settlement date (“end of day dollar value”). The Manager shall then add all end of day dollar values during the calendar month and divide that sum by the number of settlement dates in the month to arrive at a “monthly average” for each equity security the Manager traded during that calendar month reporting period.
To determine whether the dollar value threshold described in Threshold B above is met, a Manager shall determine its gross short position at the close of regular trading hours in the equity security (as defined in Rule 13f-2) on each settlement date during the calendar month and multiply that figure by the closing price at the close of regular trading hours on the settlement date. If such closing price is not available, a Manager shall use the price at which it last purchased or sold any share of that security.
To determine whether the percentage threshold described in (2) of Threshold A above is met, the Manager shall (a) determine its gross short position at the close of regular trading hours in the equity security (as defined in Rule 13f-2) on each settlement date during the calendar month, and divide that figure by the number of shares outstanding in such security at the close of regular trading hours on the settlement date, and (b) add up the daily percentages during the calendar month as determined in (a) and divide that sum by the number of settlement dates in the month to arrive at a “monthly average” for each equity security the Manager traded during that calendar month reporting period. The number of shares outstanding of the security for which information is being reported shall be determined by reference to an issuer's most recent annual or quarterly report, and any subsequent update thereto, filed with the Commission.
1. This form consists of two parts: the Cover Page, and the Information Tables.
2. The period end date used in the report (and in the EDGAR submission header) is the last settlement day of the calendar month. The date shall name the month, and express the day and year in Arabic numerals, with the year being a four-digit numeral (
3. Amendments to Form SHO must restate the Form SHO in its entirety. If the Manager is filing the Form SHO report as an amendment, then the Manager must check the “Amendment and Restatement” box on the Cover Page; and enter the amendment number. Each Amendment and Restatement must include a complete Cover Page and Information Tables. Amendments must be filed sequentially.
a. In the space designated on the Cover of Page of each Amendment and Restatement, a Manager shall (1) provide a written description of the revision being made; (2) explain the reason for the revision; and (3) indicate whether data from any additional Form SHO reporting period(s) (up to the past
b. If (3) applies, a Manager shall complete and file a separate Amendment and Restatement for each previous calendar month so affected (up to the past 12 months) and provide a description of the revision being made and explain the reason for the revision.
4. Present the Cover Page information in the format and order provided in the form, including the non-lapsed Legal Entity Identifier (“LEI”), if any, of the Manager filing the Form SHO report. The Cover Page shall include only the required information. Do not include any portions of the Information Tables on the Cover Page.
5. Designate the Report Type for the Form SHO by checking the appropriate box in the Report Type section of the Cover Page, and include, where applicable, the Name and non-lapsed LEI (if available) of each of the Other Managers Reporting for this Manager on the Cover Page, and the Information Tables, as follows:
a. If all of the information that a Manager is required by Rule 13f-2 to report on Form SHO is reported by another Manager (or Managers), check the box for Report Type “FORM SHO NOTICE,” include on the Cover Page the Name and non-lapsed LEI (if available) of each of the Other Managers Reporting for this Manager, and omit the Information Tables.
b. If all of the information that a Manager is required by Rule 13f-2 to report on Form SHO is reported in this report, check the box for Report Type “FORM SHO ENTRIES REPORT,” omit the “Name and Non-Lapsed LEI (if available) of each of the Other Managers Reporting for this Manager” section of the Cover Page, and include the Information Tables.
c. If only a part of the information that a Manager is required by Rule 13f-2 to report on Form SHO is reported in this report, check the box for Report Type “FORM SHO COMBINATION REPORT,” include on the Cover Page the name and non-lapsed LEI (if available) of each of the Other Managers Reporting for this Manager, and include the Information Tables.
6. Do not include any additional information in the Information Tables. Do not include any portions of the Information Tables on the Cover Page.
7. In reporting information required on Information Tables 1 and 2, Managers must account for a gross short position in an ETF, and activity that results in the acquisition or sale of shares of the ETF resulting from call options exercises or assignments; put options exercises or assignments; tendered conversions; secondary offering transactions; or other activity, as discussed further below. In determining its gross short position in an equity security, however, a Manager is not required to consider short positions that the ETF holds in individual underlying equity securities that are part of the ETF basket.
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(1) Short sales of the security that settled on that date.
(2) Shares of the security that were purchased to cover, in whole or in part, an existing short position and settled on that date.
(3) Shares of the security that were acquired in a call option exercise that reduces or closes a short position on that security and settled on that date.
(4) Shares of the security that were sold in a put option exercise that creates or increases a short position on that security and settled on that date.
(5) Shares of the security that were sold in a call option assignment that creates or increases a short position on that security and settled on that date.
(6) Shares of the security that were acquired in a put option assignment that reduces or closes a short position on that security and settled on that date.
(7) Shares of the security for which information is being reported that were acquired as a result of the tendered conversions that reduces or closes a short position on that security and settled on that date.
(8) Shares of the security that were obtained through a secondary offering transaction that reduces or closes a short position on that security and settled on that date. Such secondary offering purchases must be reported whether they occurred outside or within the restricted period of Rule 105 of Regulation M, 17 CFR 242.105, which prohibits purchasing offering shares within the restricted period after selling short.
(9) Shares of the security that resulted from other activity not previously reported on this form that creates or increases a short position on that security and settled on that date, or that reduces or closes a short position on that security and settled on that date.
(10) Activity other than (1) through (9) above that creates or increases, or reduces or closes, a short position on that security, including, but not limited to, shares resulting from ETF creation or redemption activity.
Persons who are to respond to the collection of information contained in this form are not required to respond to the collection of information unless the form displays a currently valid Office of Management and Budget (“OMB”) control number.
Report for the Period Ended: [Month/Day/Year]
Check here if Amendment and Restatement [ ]; Amendment Number:
Description of the Amendment and Restatement, Reason for the Amendment and Restatement, and Which Additional Form SHO Reporting Period(s) (up to the past 12 calendar months), if any, is/are affected by the Amendment and Restatement:
Institutional Investment Manager (“Manager”) Filing Report:
The Manager filing this report hereby represents that all information contained herein is true, correct and complete, and that it is understood that all required items, statements, schedules, lists, and tables, are considered integral parts of this form.
Report Type (Check only one):
[ ] FORM SHO ENTRIES REPORT. (Check here if all entries of this reporting Manager are reported in this report.)
[ ] FORM SHO NOTICE. (Check here if no entries reported are in this report, and all entries are reported by other reporting Manager(s).)
[ ] FORM SHO COMBINATION REPORT. (Check here if a portion of the entries for this reporting Manager is reported in this report and a portion is reported by other reporting Manager(s).)
Name and Non-Lapsed LEI of each of the Other Manager(s) Reporting for this Manager:
[If there are no entries in this list, omit this section.]
(a) Artificial Intelligence must be safe and secure. Meeting this goal requires robust, reliable, repeatable, and standardized evaluations of AI systems, as well as policies, institutions, and, as appropriate, other mechanisms to test, understand, and mitigate risks from these systems before they are put to use. It also requires addressing AI systems' most pressing security risks—including with respect to biotechnology, cybersecurity, critical infrastructure, and other national security dangers—while navigating AI's opacity and complexity. Testing and evaluations, including post-deployment performance monitoring, will help ensure that AI systems function as intended, are resilient against misuse or dangerous modifications, are ethically developed and operated in a secure manner, and are compliant with applicable Federal laws and policies. Finally, my Administration will help develop effective labeling and content provenance mechanisms, so that Americans are able to determine when content is generated using AI and when it is not. These actions will provide a vital foundation for an approach that addresses AI's risks without unduly reducing its benefits.
(b) Promoting responsible innovation, competition, and collaboration will allow the United States to lead in AI and unlock the technology's potential to solve some of society's most difficult challenges. This effort requires investments in AI-related education, training, development, research, and capacity, while simultaneously tackling novel intellectual property (IP) questions and other problems to protect inventors and creators. Across the Federal Government, my Administration will support programs to provide Americans the skills they need for the age of AI and attract the world's AI talent to our shores—not just to study, but to stay—so that the companies and technologies of the future are made in America. The Federal Government will promote a fair, open, and competitive ecosystem and marketplace for AI and related technologies so that small developers and entrepreneurs can continue to drive innovation. Doing so requires stopping unlawful collusion and addressing risks from dominant firms' use of key assets such as semiconductors, computing power, cloud storage, and data to disadvantage competitors, and it requires supporting a marketplace that harnesses the benefits of AI to provide new opportunities for small businesses, workers, and entrepreneurs.
(c) The responsible development and use of AI require a commitment to supporting American workers. As AI creates new jobs and industries, all workers need a seat at the table, including through collective bargaining, to ensure that they benefit from these opportunities. My Administration will seek to adapt job training and education to support a diverse workforce and help provide access to opportunities that AI creates. In the workplace itself, AI should not be deployed in ways that undermine rights, worsen job quality, encourage undue worker surveillance, lessen market competition, introduce new health and safety risks, or cause harmful labor-force disruptions. The critical next steps in AI development should be built on the views of workers, labor unions, educators, and employers to support responsible uses of AI that improve workers' lives, positively augment human work, and help all people safely enjoy the gains and opportunities from technological innovation.
(d) Artificial Intelligence policies must be consistent with my Administration's dedication to advancing equity and civil rights. My Administration cannot—and will not—tolerate the use of AI to disadvantage those who are already too often denied equal opportunity and justice. From hiring to housing to healthcare, we have seen what happens when AI use deepens discrimination and bias, rather than improving quality of life. Artificial Intelligence systems deployed irresponsibly have reproduced and intensified existing inequities, caused new types of harmful discrimination, and exacerbated online and physical harms. My Administration will build on the important steps that have already been taken—such as issuing the Blueprint for an AI Bill of Rights, the AI Risk Management Framework, and Executive Order 14091 of February 16, 2023 (Further Advancing Racial Equity and Support for Underserved Communities Through the Federal Government)—in seeking to ensure that AI complies with all Federal laws and to promote robust technical evaluations, careful oversight, engagement with affected communities, and rigorous regulation. It is necessary to hold those developing and deploying AI accountable to standards that protect against unlawful discrimination and abuse, including in the justice system and the Federal Government. Only then can Americans trust AI to advance civil rights, civil liberties, equity, and justice for all.
(e) The interests of Americans who increasingly use, interact with, or purchase AI and AI-enabled products in their daily lives must be protected. Use of new technologies, such as AI, does not excuse organizations from their legal obligations, and hard-won consumer protections are more important than ever in moments of technological change. The Federal Government will enforce existing consumer protection laws and principles and enact appropriate safeguards against fraud, unintended bias, discrimination, infringements on privacy, and other harms from AI. Such protections are
(f) Americans' privacy and civil liberties must be protected as AI continues advancing. Artificial Intelligence is making it easier to extract, re-identify, link, infer, and act on sensitive information about people's identities, locations, habits, and desires. Artificial Intelligence's capabilities in these areas can increase the risk that personal data could be exploited and exposed. To combat this risk, the Federal Government will ensure that the collection, use, and retention of data is lawful, is secure, and mitigates privacy and confidentiality risks. Agencies shall use available policy and technical tools, including privacy-enhancing technologies (PETs) where appropriate, to protect privacy and to combat the broader legal and societal risks—including the chilling of First Amendment rights—that result from the improper collection and use of people's data.
(g) It is important to manage the risks from the Federal Government's own use of AI and increase its internal capacity to regulate, govern, and support responsible use of AI to deliver better results for Americans. These efforts start with people, our Nation's greatest asset. My Administration will take steps to attract, retain, and develop public service-oriented AI professionals, including from underserved communities, across disciplines—including technology, policy, managerial, procurement, regulatory, ethical, governance, and legal fields—and ease AI professionals' path into the Federal Government to help harness and govern AI. The Federal Government will work to ensure that all members of its workforce receive adequate training to understand the benefits, risks, and limitations of AI for their job functions, and to modernize Federal Government information technology infrastructure, remove bureaucratic obstacles, and ensure that safe and rights-respecting AI is adopted, deployed, and used.
(h) The Federal Government should lead the way to global societal, economic, and technological progress, as the United States has in previous eras of disruptive innovation and change. This leadership is not measured solely by the technological advancements our country makes. Effective leadership also means pioneering those systems and safeguards needed to deploy technology responsibly—and building and promoting those safeguards with the rest of the world. My Administration will engage with international allies and partners in developing a framework to manage AI's risks, unlock AI's potential for good, and promote common approaches to shared challenges. The Federal Government will seek to promote responsible AI safety and security principles and actions with other nations, including our competitors, while leading key global conversations and collaborations to ensure that AI benefits the whole world, rather than exacerbating inequities, threatening human rights, and causing other harms.
(a) The term “agency” means each agency described in 44 U.S.C. 3502(1), except for the independent regulatory agencies described in 44 U.S.C. 3502(5).
(b) The term “artificial intelligence” or “AI” has the meaning set forth in 15 U.S.C. 9401(3): a machine-based system that can, for a given set of human-defined objectives, make predictions, recommendations, or decisions influencing real or virtual environments. Artificial intelligence systems use machine- and human-based inputs to perceive real and virtual environments; abstract such perceptions into models through analysis in an automated manner; and use model inference to formulate options for information or action.
(c) The term “AI model” means a component of an information system that implements AI technology and uses computational, statistical, or machine-learning techniques to produce outputs from a given set of inputs.
(d) The term “AI red-teaming” means a structured testing effort to find flaws and vulnerabilities in an AI system, often in a controlled environment and in collaboration with developers of AI. Artificial Intelligence red-teaming is most often performed by dedicated “red teams” that adopt adversarial methods to identify flaws and vulnerabilities, such as harmful or discriminatory outputs from an AI system, unforeseen or undesirable system behaviors, limitations, or potential risks associated with the misuse of the system.
(e) The term “AI system” means any data system, software, hardware, application, tool, or utility that operates in whole or in part using AI.
(f) The term “commercially available information” means any information or data about an individual or group of individuals, including an individual's or group of individuals' device or location, that is made available or obtainable and sold, leased, or licensed to the general public or to governmental or non-governmental entities.
(g) The term “crime forecasting” means the use of analytical techniques to attempt to predict future crimes or crime-related information. It can include machine-generated predictions that use algorithms to analyze large volumes of data, as well as other forecasts that are generated without machines and based on statistics, such as historical crime statistics.
(h) The term “critical and emerging technologies” means those technologies listed in the February 2022 Critical and Emerging Technologies List Update issued by the National Science and Technology Council (NSTC), as amended by subsequent updates to the list issued by the NSTC.
(i) The term “critical infrastructure” has the meaning set forth in section 1016(e) of the USA PATRIOT Act of 2001, 42 U.S.C. 5195c(e).
(j) The term “differential-privacy guarantee” means protections that allow information about a group to be shared while provably limiting the improper access, use, or disclosure of personal information about particular entities.
(k) The term “dual-use foundation model” means an AI model that is trained on broad data; generally uses self-supervision; contains at least tens of billions of parameters; is applicable across a wide range of contexts; and that exhibits, or could be easily modified to exhibit, high levels of performance at tasks that pose a serious risk to security, national economic security, national public health or safety, or any combination of those matters, such as by:
(l) The term “Federal law enforcement agency” has the meaning set forth in section 21(a) of Executive Order 14074 of May 25, 2022 (Advancing Effective, Accountable Policing and Criminal Justice Practices To Enhance Public Trust and Public Safety).
(m) The term “floating-point operation” means any mathematical operation or assignment involving floating-point numbers, which are a subset of the real numbers typically represented on computers by an integer of fixed precision scaled by an integer exponent of a fixed base.
(n) The term “foreign person” has the meaning set forth in section 5(c) of Executive Order 13984 of January 19, 2021 (Taking Additional Steps
(o) The terms “foreign reseller” and “foreign reseller of United States Infrastructure as a Service Products” mean a foreign person who has established an Infrastructure as a Service Account to provide Infrastructure as a Service Products subsequently, in whole or in part, to a third party.
(p) The term “generative AI” means the class of AI models that emulate the structure and characteristics of input data in order to generate derived synthetic content. This can include images, videos, audio, text, and other digital content.
(q) The terms “Infrastructure as a Service Product,” “United States Infrastructure as a Service Product,” “United States Infrastructure as a Service Provider,” and “Infrastructure as a Service Account” each have the respective meanings given to those terms in section 5 of Executive Order 13984.
(r) The term “integer operation” means any mathematical operation or assignment involving only integers, or whole numbers expressed without a decimal point.
(s) The term “Intelligence Community” has the meaning given to that term in section 3.5(h) of Executive Order 12333 of December 4, 1981 (United States Intelligence Activities), as amended.
(t) The term “machine learning” means a set of techniques that can be used to train AI algorithms to improve performance at a task based on data.
(u) The term “model weight” means a numerical parameter within an AI model that helps determine the model's outputs in response to inputs.
(v) The term “national security system” has the meaning set forth in 44 U.S.C. 3552(b)(6).
(w) The term “omics” means biomolecules, including nucleic acids, proteins, and metabolites, that make up a cell or cellular system.
(x) The term “Open RAN” means the Open Radio Access Network approach to telecommunications-network standardization adopted by the O-RAN Alliance, Third Generation Partnership Project, or any similar set of published open standards for multi-vendor network equipment interoperability.
(y) The term “personally identifiable information” has the meaning set forth in Office of Management and Budget (OMB) Circular No. A-130.
(z) The term “privacy-enhancing technology” means any software or hardware solution, technical process, technique, or other technological means of mitigating privacy risks arising from data processing, including by enhancing predictability, manageability, disassociability, storage, security, and confidentiality. These technological means may include secure multiparty computation, homomorphic encryption, zero-knowledge proofs, federated learning, secure enclaves, differential privacy, and synthetic-data-generation tools. This is also sometimes referred to as “privacy-preserving technology.”
(aa) The term “privacy impact assessment” has the meaning set forth in OMB Circular No. A-130.
(bb) The term “Sector Risk Management Agency” has the meaning set forth in 6 U.S.C. 650(23).
(cc) The term “self-healing network” means a telecommunications network that automatically diagnoses and addresses network issues to permit self-restoration.
(dd) The term “synthetic biology” means a field of science that involves redesigning organisms, or the biomolecules of organisms, at the genetic level to give them new characteristics. Synthetic nucleic acids are a type of biomolecule redesigned through synthetic-biology methods.
(ee) The term “synthetic content” means information, such as images, videos, audio clips, and text, that has been significantly modified or generated by algorithms, including by AI.
(ff) The term “testbed” means a facility or mechanism equipped for conducting rigorous, transparent, and replicable testing of tools and technologies, including AI and PETs, to help evaluate the functionality, usability, and performance of those tools or technologies.
(gg) The term “watermarking” means the act of embedding information, which is typically difficult to remove, into outputs created by AI—including into outputs such as photos, videos, audio clips, or text—for the purposes of verifying the authenticity of the output or the identity or characteristics of its provenance, modifications, or conveyance.
(A) developing a companion resource to the AI Risk Management Framework, NIST AI 100-1, for generative AI;
(B) developing a companion resource to the Secure Software Development Framework to incorporate secure development practices for generative AI and for dual-use foundation models; and
(C) launching an initiative to create guidance and benchmarks for evaluating and auditing AI capabilities, with a focus on capabilities through which AI could cause harm, such as in the areas of cybersecurity and biosecurity.
(A) coordinating or developing guidelines related to assessing and managing the safety, security, and trustworthiness of dual-use foundation models; and
(B) in coordination with the Secretary of Energy and the Director of the National Science Foundation (NSF), developing and helping to ensure the availability of testing environments, such as testbeds, to support the development of safe, secure, and trustworthy AI technologies, as well as to support the design, development, and deployment of associated PETs, consistent with section 9(b) of this order.
(b) Within 270 days of the date of this order, to understand and mitigate AI security risks, the Secretary of Energy, in coordination with the heads of other Sector Risk Management Agencies (SRMAs) as the Secretary of Energy may deem appropriate, shall develop and, to the extent permitted by law and available appropriations, implement a plan for developing the Department of Energy's AI model evaluation tools and AI testbeds. The Secretary shall undertake this work using existing solutions where possible, and shall develop these tools and AI testbeds to be capable of assessing near-term extrapolations of AI systems' capabilities. At a minimum, the Secretary shall develop tools to evaluate AI capabilities to generate outputs that may represent nuclear, nonproliferation, biological, chemical, critical infrastructure, and energy-security threats or hazards. The Secretary shall
(A) any ongoing or planned activities related to training, developing, or producing dual-use foundation models, including the physical and cybersecurity protections taken to assure the integrity of that training process against sophisticated threats;
(B) the ownership and possession of the model weights of any dual-use foundation models, and the physical and cybersecurity measures taken to protect those model weights; and
(C) the results of any developed dual-use foundation model's performance in relevant AI red-team testing based on guidance developed by NIST pursuant to subsection 4.1(a)(ii) of this section, and a description of any associated measures the company has taken to meet safety objectives, such as mitigations to improve performance on these red-team tests and strengthen overall model security. Prior to the development of guidance on red-team testing standards by NIST pursuant to subsection 4.1(a)(ii) of this section, this description shall include the results of any red-team testing that the company has conducted relating to lowering the barrier to entry for the development, acquisition, and use of biological weapons by non-state actors; the discovery of software vulnerabilities and development of associated exploits; the use of software or tools to influence real or virtual events; the possibility for self-replication or propagation; and associated measures to meet safety objectives; and
(b) The Secretary of Commerce, in consultation with the Secretary of State, the Secretary of Defense, the Secretary of Energy, and the Director of National Intelligence, shall define, and thereafter update as needed on a regular basis, the set of technical conditions for models and computing clusters that would be subject to the reporting requirements of subsection 4.2(a) of this section. Until such technical conditions are defined, the Secretary shall require compliance with these reporting requirements for:
(c) Because I find that additional steps must be taken to deal with the national emergency related to significant malicious cyber-enabled activities declared in Executive Order 13694 of April 1, 2015 (Blocking the Property of Certain Persons Engaging in Significant Malicious Cyber-Enabled Activities), as amended by Executive Order 13757 of December 28, 2016 (Taking
(d) Within 180 days of the date of this order, pursuant to the finding set forth in subsection 4.2(c) of this section, the Secretary of Commerce shall propose regulations that require United States IaaS Providers to ensure that foreign resellers of United States IaaS Products verify the identity of any foreign person that obtains an IaaS account (account) from the foreign reseller. These regulations shall, at a minimum:
(A) the types of documentation and procedures that foreign resellers of United States IaaS Products must require to verify the identity of any foreign person acting as a lessee or sub-lessee of these products or services;
(B) records that foreign resellers of United States IaaS Products must securely maintain regarding a foreign person that obtains an account, including information establishing:
(C) methods that foreign resellers of United States IaaS Products must implement to limit all third-party access to the information described in this subsection, except insofar as such access is otherwise consistent with this order and allowed under applicable law;
(e) The Secretary of Commerce is hereby authorized to take such actions, including the promulgation of rules and regulations, and to employ all powers granted to the President by the International Emergency Economic Powers Act, 50 U.S.C. 1701
(b) To capitalize on AI's potential to improve United States cyber defenses:
(A) consult with experts in AI and CBRN issues from the Department of Energy, private AI laboratories, academia, and third-party model evaluators, as appropriate, to evaluate AI model capabilities to present CBRN
(B) submit a report to the President that describes the progress of these efforts, including an assessment of the types of AI models that may present CBRN risks to the United States, and that makes recommendations for regulating or overseeing the training, deployment, publication, or use of these models, including requirements for safety evaluations and guardrails for mitigating potential threats to national security.
(A) assesses the ways in which AI can increase biosecurity risks, including risks from generative AI models trained on biological data, and makes recommendations on how to mitigate these risks;
(B) considers the national security implications of the use of data and datasets, especially those associated with pathogens and omics studies, that the United States Government hosts, generates, funds the creation of, or otherwise owns, for the training of generative AI models, and makes recommendations on how to mitigate the risks related to the use of these data and datasets;
(C) assesses the ways in which AI applied to biology can be used to reduce biosecurity risks, including recommendations on opportunities to coordinate data and high-performance computing resources; and
(D) considers additional concerns and opportunities at the intersection of AI and synthetic biology that the Secretary of Defense deems appropriate.
(b) To reduce the risk of misuse of synthetic nucleic acids, which could be substantially increased by AI's capabilities in this area, and improve biosecurity measures for the nucleic acid synthesis industry, the following actions shall be taken:
(A) establish criteria and mechanisms for ongoing identification of biological sequences that could be used in a manner that would pose a risk to the national security of the United States; and
(B) determine standardized methodologies and tools for conducting and verifying the performance of sequence synthesis procurement screening, including customer screening approaches to support due diligence with respect to managing security risks posed by purchasers of biological sequences identified in subsection 4.4(b)(i)(A) of this section, and processes for the reporting of concerning activity to enforcement entities.
(A) specifications for effective nucleic acid synthesis procurement screening;
(B) best practices, including security and access controls, for managing sequence-of-concern databases to support such screening;
(C) technical implementation guides for effective screening; and
(D) conformity-assessment best practices and mechanisms.
(A) within 180 days of the establishment of the framework pursuant to subsection 4.4(b)(i) of this section, develop a framework to conduct structured evaluation and stress testing of nucleic acid synthesis procurement screening, including the systems developed in accordance with subsections 4.4(b)(i)-(ii) of this section and implemented by providers of synthetic nucleic acid sequences; and
(B) following development of the framework pursuant to subsection 4.4(b)(iv)(A) of this section, submit an annual report to the Assistant to the President for National Security Affairs, the Director of the Office of Pandemic Preparedness and Response Policy, and the Director of OSTP on any results of the activities conducted pursuant to subsection 4.4(b)(iv)(A) of this section, including recommendations, if any, on how to strengthen nucleic acid synthesis procurement screening, including customer screening systems.
(a) Within 240 days of the date of this order, the Secretary of Commerce, in consultation with the heads of other relevant agencies as the Secretary of Commerce may deem appropriate, shall submit a report to the Director of OMB and the Assistant to the President for National Security Affairs identifying the existing standards, tools, methods, and practices, as well as the potential development of further science-backed standards and techniques, for:
(b) Within 180 days of submitting the report required under subsection 4.5(a) of this section, and updated periodically thereafter, the Secretary of Commerce, in coordination with the Director of OMB, shall develop guidance regarding the existing tools and practices for digital content authentication and synthetic content detection measures. The guidance shall include measures for the purposes listed in subsection 4.5(a) of this section.
(c) Within 180 days of the development of the guidance required under subsection 4.5(b) of this section, and updated periodically thereafter, the Director of OMB, in consultation with the Secretary of State; the Secretary of Defense; the Attorney General; the Secretary of Commerce, acting through the Director of NIST; the Secretary of Homeland Security; the Director of National Intelligence; and the heads of other agencies that the Director of OMB deems appropriate, shall—for the purpose of strengthening public confidence in the integrity of official United States Government digital content—issue guidance to agencies for labeling and authenticating such content that they produce or publish.
(d) The Federal Acquisition Regulatory Council shall, as appropriate and consistent with applicable law, consider amending the Federal Acquisition Regulation to take into account the guidance established under subsection 4.5 of this section.
(a) solicit input from the private sector, academia, civil society, and other stakeholders through a public consultation process on potential risks, benefits, other implications, and appropriate policy and regulatory approaches related to dual-use foundation models for which the model weights are widely available, including:
(b) based on input from the process described in subsection 4.6(a) of this section, and in consultation with the heads of other relevant agencies as the Secretary of Commerce deems appropriate, submit a report to the President on the potential benefits, risks, and implications of dual-use foundation models for which the model weights are widely available, as well as policy and regulatory recommendations pertaining to those models.
(a) within 270 days of the date of this order, the Chief Data Officer Council, in consultation with the Secretary of Defense, the Secretary of Commerce, the Secretary of Energy, the Secretary of Homeland Security, and the Director of National Intelligence, shall develop initial guidelines for performing security reviews, including reviews to identify and manage the potential security risks of releasing Federal data that could aid in the development of CBRN weapons as well as the development of autonomous offensive cyber capabilities, while also providing public access to Federal Government data in line with the goals stated in the Open, Public, Electronic, and Necessary Government Data Act (title II of Public Law 115-435); and
(b) within 180 days of the development of the initial guidelines required by subsection 4.7(a) of this section, agencies shall conduct a security review of all data assets in the comprehensive data inventory required under 44 U.S.C. 3511(a)(1) and (2)(B) and shall take steps, as appropriate and consistent with applicable law, to address the highest-priority potential security risks that releasing that data could raise with respect to CBRN weapons, such as the ways in which that data could be used to train AI systems.
(a) provide guidance to the Department of Defense, other relevant agencies, and the Intelligence Community on the continued adoption of AI capabilities to advance the United States national security mission, including through directing specific AI assurance and risk-management practices for national security uses of AI that may affect the rights or safety of United States persons and, in appropriate contexts, non-United States persons; and
(b) direct continued actions, as appropriate and consistent with applicable law, to address the potential use of AI systems by adversaries and other foreign actors in ways that threaten the capabilities or objectives of the Department of Defense or the Intelligence Community, or that otherwise pose risks to the security of the United States or its allies and partners.
(b) Within 120 days of the date of this order, the Secretary of State shall:
(c) Within 180 days of the date of this order, the Secretary of State shall:
(d) Within 180 days of the date of this order, the Secretary of Homeland Security shall:
(e) Within 45 days of the date of this order, for purposes of considering updates to the “Schedule A” list of occupations, 20 CFR 656.5, the Secretary of Labor shall publish a request for information (RFI) to solicit public input, including from industry and worker-advocate communities, identifying AI and other STEM-related occupations, as well as additional occupations across the economy, for which there is an insufficient number of ready, willing, able, and qualified United States workers.
(f) The Secretary of State and the Secretary of Homeland Security shall, consistent with applicable law and implementing regulations, use their discretionary authorities to support and attract foreign nationals with special skills in AI and other critical and emerging technologies seeking to work, study, or conduct research in the United States.
(g) Within 120 days of the date of this order, the Secretary of Homeland Security, in consultation with the Secretary of State, the Secretary of Commerce, and the Director of OSTP, shall develop and publish informational resources to better attract and retain experts in AI and other critical and emerging technologies, including:
(b) Within 120 days of the date of this order, to support activities involving high-performance and data-intensive computing, the Secretary of Energy, in coordination with the Director of NSF, shall, in a manner consistent with applicable law and available appropriations, establish a pilot program to enhance existing successful training programs for scientists, with the goal of training 500 new researchers by 2025 capable of meeting the rising demand for AI talent.
(c) To promote innovation and clarify issues related to AI and inventorship of patentable subject matter, the Under Secretary of Commerce for Intellectual Property and Director of the United States Patent and Trademark Office (USPTO Director) shall:
(d) Within 180 days of the date of this order, to assist developers of AI in combatting AI-related IP risks, the Secretary of Homeland Security, acting through the Director of the National Intellectual Property Rights Coordination Center, and in consultation with the Attorney General, shall develop a training, analysis, and evaluation program to mitigate AI-related IP risks. Such a program shall:
(e) To advance responsible AI innovation by a wide range of healthcare technology developers that promotes the welfare of patients and workers in the healthcare sector, the Secretary of HHS shall identify and, as appropriate and consistent with applicable law and the activities directed in section 8 of this order, prioritize grantmaking and other awards, as well as undertake related efforts, to support responsible AI development and use, including:
(f) To advance the development of AI systems that improve the quality of veterans' healthcare, and in order to support small businesses' innovative capacity, the Secretary of Veterans Affairs shall:
(g) Within 180 days of the date of this order, to support the goal of strengthening our Nation's resilience against climate change impacts and building an equitable clean energy economy for the future, the Secretary of Energy, in consultation with the Chair of the Federal Energy Regulatory Commission, the Director of OSTP, the Chair of the Council on Environmental Quality, the Assistant to the President and National Climate Advisor, and the heads of other relevant agencies as the Secretary of Energy may deem appropriate, shall:
(h) Within 180 days of the date of this order, to understand AI's implications for scientific research, the President's Council of Advisors on Science and Technology shall submit to the President and make publicly available a report on the potential role of AI, especially given recent developments in AI, in research aimed at tackling major societal and global challenges. The report shall include a discussion of issues that may hinder the effective use of AI in research and practices needed to ensure that AI is used responsibly for research.
(b) To promote competition and innovation in the semiconductor industry, recognizing that semiconductors power AI technologies and that their availability is critical to AI competition, the Secretary of Commerce shall, in implementing division A of Public Law 117-167, known as the Creating Helpful Incentives to Produce Semiconductors (CHIPS) Act of 2022, promote competition by:
(A) funding for physical assets, such as specialty equipment or facilities, to which startups and small businesses may not otherwise have access;
(B) datasets—potentially including test and performance data—collected, aggregated, or shared by CHIPS research and development programs;
(C) workforce development programs;
(D) design and process technology, as well as IP, as appropriate; and
(E) other resources, including technical and intellectual property assistance, that could accelerate commercialization of new technologies by startups and small businesses, as appropriate; and
(c) To support small businesses innovating and commercializing AI, as well as in responsibly adopting and deploying AI, the Administrator of the Small Business Administration shall:
(d) The Administrator of the Small Business Administration, in coordination with resource partners, shall conduct outreach regarding, and raise
(A) assess how current or formerly operational Federal programs designed to assist workers facing job disruptions—including unemployment insurance and programs authorized by the Workforce Innovation and Opportunity Act (Public Law 113-128)—could be used to respond to possible future AI-related disruptions; and
(B) identify options, including potential legislative measures, to strengthen or develop additional Federal support for workers displaced by AI and, in consultation with the Secretary of Commerce and the Secretary of Education, strengthen and expand education and training opportunities that provide individuals pathways to occupations related to AI.
(b) To help ensure that AI deployed in the workplace advances employees' well-being:
(A) job-displacement risks and career opportunities related to AI, including effects on job skills and evaluation of applicants and workers;
(B) labor standards and job quality, including issues related to the equity, protected-activity, compensation, health, and safety implications of AI in the workplace; and
(C) implications for workers of employers' AI-related collection and use of data about them, including transparency, engagement, management, and activity protected under worker-protection laws.
(c) To foster a diverse AI-ready workforce, the Director of NSF shall prioritize available resources to support AI-related education and AI-related
(b) To promote the equitable treatment of individuals and adhere to the Federal Government's fundamental obligation to ensure fair and impartial justice for all, with respect to the use of AI in the criminal justice system, the Attorney General shall, in consultation with the Secretary of Homeland Security and the Director of OSTP:
(A) sentencing;
(B) parole, supervised release, and probation;
(C) bail, pretrial release, and pretrial detention;
(D) risk assessments, including pretrial, earned time, and early release or transfer to home-confinement determinations;
(E) police surveillance;
(F) crime forecasting and predictive policing, including the ingestion of historical crime data into AI systems to predict high-density “hot spots”;
(G) prison-management tools; and
(H) forensic analysis;
(A) identify areas where AI can enhance law enforcement efficiency and accuracy, consistent with protections for privacy, civil rights, and civil liberties; and
(B) recommend best practices for law enforcement agencies, including safeguards and appropriate use limits for AI, to address the concerns
(c) To advance the presence of relevant technical experts and expertise (such as machine-learning engineers, software and infrastructure engineering, data privacy experts, data scientists, and user experience researchers) among law enforcement professionals:
(b) To promote equitable administration of public benefits:
(A) maximize program access for eligible recipients;
(B) employ automated or algorithmic systems in a manner consistent with any requirements for using merit systems personnel in public-benefits programs;
(C) identify instances in which reliance on automated or algorithmic systems would require notification by the State, local, Tribal, or territorial government to the Secretary;
(D) identify instances when applicants and participants can appeal benefit determinations to a human reviewer for reconsideration and can receive other customer support from a human being;
(E) enable auditing and, if necessary, remediation of the logic used to arrive at an individual decision or determination to facilitate the evaluation of appeals; and
(F) enable the analysis of whether algorithmic systems in use by benefit programs achieve equitable outcomes.
(b) To address discrimination and biases against protected groups in housing markets and consumer financial markets, the Director of the Federal Housing Finance Agency and the Director of the Consumer Financial Protection Bureau are encouraged to consider using their authorities, as they deem appropriate, to require their respective regulated entities, where possible, to use appropriate methodologies including AI tools to ensure compliance with Federal law and:
(c) Within 180 days of the date of this order, to combat unlawful discrimination enabled by automated or algorithmic tools used to make decisions about access to housing and in other real estate-related transactions, the Secretary of Housing and Urban Development shall, and the Director of the Consumer Financial Protection Bureau is encouraged to, issue additional guidance:
(d) To help ensure that people with disabilities benefit from AI's promise while being protected from its risks, including unequal treatment from the use of biometric data like gaze direction, eye tracking, gait analysis, and hand motions, the Architectural and Transportation Barriers Compliance Board is encouraged, as it deems appropriate, to solicit public participation and conduct community engagement; to issue technical assistance and recommendations on the risks and benefits of AI in using biometric data as an input; and to provide people with disabilities access to information and communication technology and transportation services.
(b) To help ensure the safe, responsible deployment and use of AI in the healthcare, public-health, and human-services sectors:
(A) development, maintenance, and use of predictive and generative AI-enabled technologies in healthcare delivery and financing—including quality measurement, performance improvement, program integrity, benefits administration, and patient experience—taking into account considerations such as appropriate human oversight of the application of AI-generated output;
(B) long-term safety and real-world performance monitoring of AI-enabled technologies in the health and human services sector, including clinically relevant or significant modifications and performance across population groups, with a means to communicate product updates to regulators, developers, and users;
(C) incorporation of equity principles in AI-enabled technologies used in the health and human services sector, using disaggregated data on affected populations and representative population data sets when developing new models, monitoring algorithmic performance against discrimination and bias in existing models, and helping to identify and mitigate discrimination and bias in current systems;
(D) incorporation of safety, privacy, and security standards into the software-development lifecycle for protection of personally identifiable information, including measures to address AI-enhanced cybersecurity threats in the health and human services sector;
(E) development, maintenance, and availability of documentation to help users determine appropriate and safe uses of AI in local settings in the health and human services sector;
(F) work to be done with State, local, Tribal, and territorial health and human services agencies to advance positive use cases and best practices for use of AI in local settings; and
(G) identification of uses of AI to promote workplace efficiency and satisfaction in the health and human services sector, including reducing administrative burdens.
(A) convening and providing technical assistance to health and human services providers and payers about their obligations under Federal nondiscrimination and privacy laws as they relate to AI and the potential consequences of noncompliance; and
(B) issuing guidance, or taking other action as appropriate, in response to any complaints or other reports of noncompliance with Federal nondiscrimination and privacy laws as they relate to AI.
(A) establishes a common framework for approaches to identifying and capturing clinical errors resulting from AI deployed in healthcare settings as well as specifications for a central tracking repository for associated incidents that cause harm, including through bias or discrimination, to patients, caregivers, or other parties;
(B) analyzes captured data and generated evidence to develop, wherever appropriate, recommendations, best practices, or other informal guidelines aimed at avoiding these harms; and
(C) disseminates those recommendations, best practices, or other informal guidance to appropriate stakeholders, including healthcare providers.
(A) define the objectives, goals, and high-level principles required for appropriate regulation throughout each phase of drug development;
(B) identify areas where future rulemaking, guidance, or additional statutory authority may be necessary to implement such a regulatory system;
(C) identify the existing budget, resources, personnel, and potential for new public/private partnerships necessary for such a regulatory system; and
(D) consider risks identified by the actions undertaken to implement section 4 of this order.
(c) To promote the safe and responsible development and use of AI in the transportation sector, in consultation with relevant agencies:
(A) support existing and future initiatives to pilot transportation-related applications of AI, as they align with policy priorities articulated in the Department of Transportation's (DOT) Innovation Principles, including, as appropriate, through technical assistance and connecting stakeholders;
(B) evaluate the outcomes of such pilot programs in order to assess when DOT, or other Federal or State agencies, have sufficient information to take regulatory actions, as appropriate, and recommend appropriate actions when that information is available; and
(C) establish a new DOT Cross-Modal Executive Working Group, which will consist of members from different divisions of DOT and coordinate applicable work among these divisions, to solicit and use relevant input from appropriate stakeholders.
(d) To help ensure the responsible development and deployment of AI in the education sector, the Secretary of Education shall, within 365 days of the date of this order, develop resources, policies, and guidance regarding AI. These resources shall address safe, responsible, and nondiscriminatory uses of AI in education, including the impact AI systems have on vulnerable and underserved communities, and shall be developed in consultation with stakeholders as appropriate. They shall also include the development of an “AI toolkit” for education leaders implementing recommendations from the Department of Education's AI and the Future of Teaching and Learning report, including appropriate human review of AI decisions, designing AI systems to enhance trust and safety and align with privacy-related laws and regulations in the educational context, and developing education-specific guardrails.
(e) The Federal Communications Commission is encouraged to consider actions related to how AI will affect communications networks and consumers, including by:
(b) Within 365 days of the date of this order, to better enable agencies to use PETs to safeguard Americans' privacy from the potential threats exacerbated by AI, the Secretary of Commerce, acting through the Director of NIST, shall create guidelines for agencies to evaluate the efficacy of differential-privacy-guarantee protections, including for AI. The guidelines shall, at a minimum, describe the significant factors that bear on differential-privacy safeguards and common risks to realizing differential privacy in practice.
(c) To advance research, development, and implementation related to PETs:
(b) To provide guidance on Federal Government use of AI, within 150 days of the date of this order and updated periodically thereafter, the Director of OMB, in coordination with the Director of OSTP, and in consultation with the interagency council established in subsection 10.1(a) of this section, shall issue guidance to agencies to strengthen the effective and appropriate use of AI, advance AI innovation, and manage risks from AI in the Federal Government. The Director of OMB's guidance shall specify, to the extent appropriate and consistent with applicable law:
(A) external testing for AI, including AI red-teaming for generative AI, to be developed in coordination with the Cybersecurity and Infrastructure Security Agency;
(B) testing and safeguards against discriminatory, misleading, inflammatory, unsafe, or deceptive outputs, as well as against producing child sexual abuse material and against producing non-consensual intimate imagery of real individuals (including intimate digital depictions of the body or body parts of an identifiable individual), for generative AI;
(C) reasonable steps to watermark or otherwise label output from generative AI;
(D) application of the mandatory minimum risk-management practices defined under subsection 10.1(b)(iv) of this section to procured AI;
(E) independent evaluation of vendors' claims concerning both the effectiveness and risk mitigation of their AI offerings;
(F) documentation and oversight of procured AI;
(G) maximizing the value to agencies when relying on contractors to use and enrich Federal Government data for the purposes of AI development and operation;
(H) provision of incentives for the continuous improvement of procured AI; and
(I) training on AI in accordance with the principles set out in this order and in other references related to AI listed herein; and
(c) To track agencies' AI progress, within 60 days of the issuance of the guidance established in subsection 10.1(b) of this section and updated periodically thereafter, the Director of OMB shall develop a method for agencies to track and assess their ability to adopt AI into their programs and operations, manage its risks, and comply with Federal policy on AI. This method should draw on existing related efforts as appropriate and should address, as appropriate and consistent with applicable law, the practices, processes, and capabilities necessary for responsible AI adoption, training, and governance across, at a minimum, the areas of information technology infrastructure, data, workforce, leadership, and risk management.
(d) To assist agencies in implementing the guidance to be established in subsection 10.1(b) of this section:
(e) To improve transparency for agencies' use of AI, the Director of OMB shall, on an annual basis, issue instructions to agencies for the collection, reporting, and publication of agency AI use cases, pursuant to section 7225(a) of the Advancing American AI Act. Through these instructions, the Director shall, as appropriate, expand agencies' reporting on how they are managing risks from their AI use cases and update or replace the guidance originally established in section 5 of Executive Order 13960.
(f) To advance the responsible and secure use of generative AI in the Federal Government:
(g) Within 30 days of the date of this order, to increase agency investment in AI, the Technology Modernization Board shall consider, as it deems appropriate and consistent with applicable law, prioritizing funding for AI projects for the Technology Modernization Fund for a period of at least 1 year. Agencies are encouraged to submit to the Technology Modernization Fund project funding proposals that include AI—and particularly generative AI—in service of mission delivery.
(h) Within 180 days of the date of this order, to facilitate agencies' access to commercial AI capabilities, the Administrator of General Services, in coordination with the Director of OMB, and in collaboration with the Secretary of Defense, the Secretary of Homeland Security, the Director of National Intelligence, the Administrator of the National Aeronautics and Space Administration, and the head of any other agency identified by the Administrator of General Services, shall take steps consistent with applicable law to facilitate access to Federal Government-wide acquisition solutions for specified types of AI services and products, such as through the creation of a resource guide or other tools to assist the acquisition workforce. Specified types of AI capabilities shall include generative AI and specialized computing infrastructure.
(i) The initial means, instructions, and guidance issued pursuant to subsections 10.1(a)-(h) of this section shall not apply to AI when it is used as a component of a national security system, which shall be addressed by the proposed National Security Memorandum described in subsection 4.8 of this order.
(b) Within 45 days of the date of this order, to coordinate rapid advances in the capacity of the Federal AI workforce, the Assistant to the President and Deputy Chief of Staff for Policy, in coordination with the Director of OSTP and the Director of OMB, and in consultation with the National Cyber Director, shall convene an AI and Technology Talent Task Force, which shall include the Director of OPM, the Director of the General Services Administration's Technology Transformation Services, a representative from the Chief Human Capital Officers Council, the Assistant to the President for Presidential Personnel, members of appropriate agency technology talent programs, a representative of the Chief Data Officer Council, and a representative of the interagency council convened under subsection 10.1(a) of this section. The Task Force's purpose shall be to accelerate and track the hiring of AI and AI-enabling talent across the Federal Government, including through the following actions:
(c) Within 45 days of the date of this order, to advance existing Federal technology talent programs, the United States Digital Service, Presidential Innovation Fellowship, United States Digital Corps, OPM, and technology talent programs at agencies, with support from the AI and Technology Talent Task Force described in subsection 10.2(b) of this section, as appropriate and permitted by law, shall develop and begin to implement plans to support the rapid recruitment of individuals as part of a Federal Government-wide AI talent surge to accelerate the placement of key AI and AI-enabling talent in high-priority areas and to advance agencies' data and technology strategies.
(d) To meet the critical hiring need for qualified personnel to execute the initiatives in this order, and to improve Federal hiring practices for AI talent, the Director of OPM, in consultation with the Director of OMB, shall:
(e) To expand the use of special authorities for AI hiring and retention, agencies shall use all appropriate hiring authorities, including Schedule A(r) excepted service hiring and direct-hire authority, as applicable and appropriate, to hire AI talent and AI-enabling talent rapidly. In addition to participating in OPM-led pooled hiring actions, agencies shall collaborate, where appropriate, on agency-led pooled hiring under the Competitive Service Act of 2015 (Public Law 114-137) and other shared hiring. Agencies shall also, where applicable, use existing incentives, pay-setting authorities, and other compensation flexibilities, similar to those used for cyber and information technology positions, for AI and data-science professionals, as well as plain-language job titles, to help recruit and retain these highly skilled professionals. Agencies shall ensure that AI and other related talent needs (such as technology governance and privacy) are reflected in strategic workforce planning and budget formulation.
(f) To facilitate the hiring of data scientists, the Chief Data Officer Council shall develop a position-description library for data scientists (job series 1560) and a hiring guide to support agencies in hiring data scientists.
(g) To help train the Federal workforce on AI issues, the head of each agency shall implement—or increase the availability and use of—AI training and familiarization programs for employees, managers, and leadership in
(h) Within 180 days of the date of this order, to address gaps in AI talent for national defense, the Secretary of Defense shall submit a report to the President through the Assistant to the President for National Security Affairs that includes:
(b) To advance responsible global technical standards for AI development and use outside of military and intelligence areas, the Secretary of Commerce, in coordination with the Secretary of State and the heads of other relevant agencies as appropriate, shall lead preparations for a coordinated effort with key international allies and partners and with standards development organizations, to drive the development and implementation of AI-related consensus standards, cooperation and coordination, and information sharing. In particular, the Secretary of Commerce shall:
(A) AI nomenclature and terminology;
(B) best practices regarding data capture, processing, protection, privacy, confidentiality, handling, and analysis;
(C) trustworthiness, verification, and assurance of AI systems; and
(D) AI risk management;
(c) Within 365 days of the date of this order, to promote safe, responsible, and rights-affirming development and deployment of AI abroad:
(A) include principles, guidelines, priorities, and best practices aimed at ensuring the safe, responsible, beneficial, and sustainable global development and adoption of AI; and
(B) address AI's labor-market implications across international contexts, including by recommending risk mitigations.
(d) To address cross-border and global AI risks to critical infrastructure, the Secretary of Homeland Security, in coordination with the Secretary of State, and in consultation with the heads of other relevant agencies as the Secretary of Homeland Security deems appropriate, shall lead efforts with international allies and partners to enhance cooperation to prevent, respond to, and recover from potential critical infrastructure disruptions resulting from incorporation of AI into critical infrastructure systems or malicious use of AI.
(b) The Assistant to the President and Deputy Chief of Staff for Policy shall serve as Chair of the White House AI Council.
(c) In addition to the Chair, the White House AI Council shall consist of the following members, or their designees:
(d) The Chair may create and coordinate subgroups consisting of White House AI Council members or their designees, as appropriate.
(b) This order shall be implemented consistent with applicable law and subject to the availability of appropriations.
(c) This order is not intended to, and does not, create any right or benefit, substantive or procedural, enforceable at law or in equity by any party against the United States, its departments, agencies, or entities, its officers, employees, or agents, or any other person.