The FSFL Program provides low interest loans for producers to build or upgrade farm storage and handling facilities. FSFLs can be used for items such as drying and cooling equipment, safety equipment, and new concrete foundations, as well as for storage buildings and grain bins. The FSFL Program is a CCC program administered by the Farm Service Agency (FSA). As specified in the CCC Charter Act (15 U.S.C. 714b), the goal of the FSFL Program is to increase producer-owned storage capacity to alleviate national, regional, and local shortages in the storage of eligible commodities. Eligible commodities include grains, sugar, pulse crops, hay, honey, renewable biomass, fruits, nuts, and vegetables. Loans are available in amounts up to $500,000 for terms of 7, 10, or 12 years. Since 2000, more than 33,000 FSFLs have been disbursed totaling $1.8 billion. On average, about 2,100 new FSFLs are made each year, with about 16,000 loans currently outstanding. The default rate for the FSFL Program is extremely low, less than 0.1 percent.

Having on-farm storage helps producers to sell their crop at a time when the market is favorable for them, rather than being forced to sell immediately after harvest or pay for commercial storage. Producers can use on-farm storage to store livestock feed grown on-farm, rather than buying feed. On-farm storage allows producers to better serve their customers that buy commodities throughout the year, such as bioenergy facilities.

All FSFLs require security. The collateral securing an FSFL is typically the storage facility or equipment itself. The FSFL regulations in 7 CFR 1436.8, “Security for Loan,” currently require certain levels of security depending on if the loan amount is less than or equal to $50,000 or greater than $50,000. Loans greater than $50,000 or where the borrower has multiple outstanding FSFLs that total over $50,000 require additional security. The additional security can include an irrevocable letter of credit or a lien on real estate where the facility is located, as well as a severance agreement for any existing liens on the real estate parcel on which the storage facility is located. Livestock, machinery, vehicles, and other equipment cannot be used as security for FSFL. This rule raises the threshold, from $50,000 or less to $100,000 for which additional security is required, which should make the loan process easier and less expensive for borrowers of loans under $100,000. Loan applicants, not FSA, pay loan closing costs, so reducing the security requirements for certain loan amounts will eliminate the cost to applicants for obtaining letters of credit, severance agreements, appraisals, and similar documents. This will benefit producers who take out new FSFLs up to $100,000, including some producers who may not have real estate to offer as security.

This rule amends 7 CFR 1436.8, “Security for Loan,” in three ways. First, additional security will only be required for loans in excess of $100,000, when the total aggregate outstanding FSFLs by the borrower will exceed $100,000. The Deputy Administrator for Farm Programs or a State Committee may at any time lower the dollar threshold for which additional security is required for all FSFLs in the respective State, if such security is needed to properly secure such loans. The dollar threshold for which additional security is required cannot be less than $50,000, and the same threshold must apply to all FSFLs in a State. Currently, all loans in excess of $50,000 require additional security, specifically a lien on the real estate parcel on which the storage facility is located. The value of the real estate security for the loan must be at least equal to the loan amount. For some producers, this can be a barrier to qualifying for a loan greater than $50,000, because they do not own real estate of high enough value. Also, obtaining the lien can cost the producer about $1,000 in legal and appraisal fees. Raising the threshold for which additional security is required to $100,000 should help more small producers qualify for a loan between $50,000 and $100,000, and reduce their cost to qualify for such a loan.

Second, this rule specifies that a severance agreement from the holder of any prior lien on the real estate parcel on which the storage facility is located will not be required unless the loan is in excess of $100,000, or the total aggregate outstanding FSFLs balance will exceed $100,000. Currently, loans in excess of $50,000 require a severance agreement. For loans of $50,000 or less, in lieu of a severance agreement, the producer can provide security for the loan in other ways, specifically by increasing the down payment from 15 percent to 20 percent or by providing another form of security, such as an irrevocable letter of credit. These security alternatives can be less time consuming and less costly for the producer to obtain than a severance agreement. Raising the threshold for which a severance agreement is required should reduce costs to allow producers to qualify for a loan between $50,000 and $100,000.

Third, this rule specifies that additional security will not be required for loans secured by collateral without any resale value unless the loan exceeds $100,000, or the total aggregate outstanding FSFLs balance will exceed $100,000. The current threshold is $50,000. Collateral without any resale value is collateral that has insufficient value and cannot easily be removed and sold, such as, but not limited to, permanent equipment upgrades, electrical wiring, or a new concrete foundation. Again, small producers who are otherwise creditworthy may not have the means to provide additional security, particularly since items commonly owned by producers that do have resale value, such as livestock and machinery, cannot be used as additional security for FSFL. Raising the threshold to $100,000 should help more small producers qualify for a loan between $50,000 and $100,000, and should reduce their cost to qualify for such a loan.

This rule also makes minor editorial changes to improve the clarity and consistency of the security requirements as specified in the regulations. For example, the language with respect to requirements for loans secured without collateral is clarified to state that only loans of $100,000 or more will require extra security. The previous language was ambiguous and implied that all loans secured without collateral would require additional security, which is not FSA policy and therefore required clarification. References to “exceeding” a certain amount, “less than” a certain amount, or an amount “or less,” were edited to “equal to or less than” or “greater than” to be consistent within 7 CFR part 1436. A reference to bonds was removed; bonds have not been used by producers as security in many years and cannot be accepted by FSA's current financial system.

The intent of the amendments is to make the loan process for relatively small FSFLs simpler and less expensive for producers. This rule will benefit most producers who apply for a loan between $50,000 and $100,000, including those who do have additional security, because the changes in this rule will reduce the time and expense required to apply for a loan. Specifically, if no severance agreement, lien on real estate, appraisal, or letter of credit is required, borrowers may be able to reduce their closing costs for the loan by about $1,000 per loan, depending upon the facts of each situation. About a quarter of all FSFLs each year are for amounts between $50,000 and $100,000. The changes in this rule should help both borrowers who are building new on-farm storage and borrowers who are expanding their farm business with additional equipment or storage facilities.

The regulatory changes will allow the FSFL Program to continue to provide economic stability and reduce short-term income volatility for producers, by allowing the producer to finance on-farm storage, providing them more control over when to sell their crop. Because the FSFL Program default rate has been consistently low, and borrowers must pass a rigorous financial analysis to qualify for a loan, it is appropriate to reduce the security requirements for smaller loans. The additional security requirements will remain the same for loans above $100,000, which account for less than 20 percent of loans in the FSFL Program, and are unlikely to be loans made to small producers. Overall, the intent of this rule is to provide an increased opportunity for access to credit for small producers, without increasing the risk of loan defaults.

This rule provides flexibility for CCC to require additional security for loan amounts less than $100,000 in the future, if needed to protect CCC's interests. As specified in this rule and in the current regulations, the approving State Committee, on a state-wide basis, may require security on smaller loans, if it is determined that security is needed to protect CCC's interests, but not on loans less than $50,000. Also, FSA's Deputy Administrator for Farm Programs or a State Committee, for all FSFLs in a State, may at any time, lower the dollar threshold for which additional security is required for all loans in a State, but not for loans less than $50,000. This means that, for example, if the default rate rises or if credit market conditions change, FSA would have the ability to lower the security threshold for loans at the State or the national level.

This rule does not require every State to use the new higher thresholds for security. We anticipate that some State committees will retain the more conservative threshold of $50,000, particularly for loans that are secured with collateral that has been determined to not have any resale value.

In general, the Administrative Procedure Act (5 U.S.C. 553) requires that a notice of proposed rulemaking be published in the Federal Register and interested persons be given an opportunity to participate in the rulemaking through submission of written data, views, or arguments with or without opportunity for oral presentation. Regulations for this program are exempt from the notice and comment requirements in 5 U.S.C. 553, as specified in section 1601(c) of the Food, Conservation, and Energy Act of 2008 (Pub. L. 110-246, the 2008 Farm Bill), which allows that the regulations be promulgated and administered without regard to the notice and comment requirements in 5 U.S.C. 553.

The Administrative Procedure Act (5 U.S.C. 553) provides generally that before rules are issued by Government agencies, the rule must be published in the Federal Register , and the required publication of a substantive rule is to be not less than 30 days before its effective date. However, one of the exceptions is that section 553 does not apply to rulemaking that involves a matter relating to loans. Therefore, to provide greater access to capital for small farmers as soon as possible before the 2014 planting season, this final rule is effective when published in the Federal Register .

Executive Order 12866, “Regulatory Planning and Review,” and Executive Order 13563, “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). Executive Order 13563 emphasizes the importance of quantifying both costs and benefits, of reducing costs, of harmonizing rules, and of promoting flexibility.

The Office of Management and Budget (OMB) designated this final rule as not significant under Executive Order 12866 and, therefore, OMB was not required to review this final rule.

The Regulatory Flexibility Act (5 U.S.C. 601-612), as amended by the Small Business Regulatory Enforcement Fairness Act of 1996 (SBREFA), generally requires an agency to prepare a regulatory flexibility analysis of any rule subject to the notice and comment rulemaking requirements under the Administrative Procedure Act (5 U.S.C. 553) or any other statute, unless the agency certifies that the rule will not have a significant economic impact on a substantial number of small entities. This rule is not subject to the Regulatory Flexibility Act because CCC is not required by any law to publish a proposed rule for public comments on this rule.

The environmental impacts of this rule have been considered in a manner consistent with the provisions of the National Environmental Policy Act (NEPA, 42 U.S.C. 4321-4347), the regulations of the Council on Environmental Quality (40 CFR parts 1500-1508), and the FSA regulations for compliance with NEPA (7 CFR 799 and 7 CFR part 1940, subpart G). The proposed changes to the FSFL program were analyzed and evaluated in a Programmatic Environmental Assessment and subsequent Finding of No Significant Impact (74 FR 71674) after the 2008 Farm Bill. The scope of that environmental review included provisions that have already been implemented as well as those provisions proposed in this rule. FSA has determined that these provisions will not have a significant impact on the quality of the human environment either individually or cumulatively. Therefore, no Environmental Assessment or Environmental Impact Statement will be prepared.

Executive Order 12372, “Intergovernmental Review of Federal Programs,” requires consultation with State and local officials. The objectives of the Executive Order are to foster an intergovernmental partnership and a strengthened Federalism, by relying on State and local processes for State and local government coordination and review of proposed Federal Financial assistance and direct Federal development. For reasons specified in the Notice to 7 CFR part 3015, subpart V (48 FR 29115, June 24, 1983), the programs and activities within this rule are excluded from the scope of Executive Order 12372 which requires intergovernmental consultation with State and local officials.

This rule has been reviewed under Executive Order 12988, “Civil Justice Reform.” This rule will not preempt State or local laws, regulations, or policies unless they present an irreconcilable conflict with this rule. This rule will not have retroactive effect. Before any judicial action may be brought regarding the provisions of this rule, the administrative appeal provisions of 7 CFR parts 11 and 780 must be exhausted.

This rule has been reviewed under Executive Order 13132, “Federalism.” The policies contained in this rule do not have any substantial direct effect on 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, except as required by law. Nor does this rule impose substantial direct compliance costs on State and local governments. Therefore, consultation with the States is not required.

This rule has been reviewed for compliance with Executive Order 13175, “Consultation and Coordination With Indian Tribal Governments.” Executive Order 13175 imposes requirements on the development of regulatory policies that have Tribal implications or preempt Tribal laws. The policies contained in this rule do not, to our knowledge, impose substantial unreimbursed direct compliance costs on Indian Tribal governments, have Tribal implications, or preempt Tribal law. USDA continues to consult with Tribal officials to have a meaningful consultation and collaboration on the development and strengthening of USDA regulations. USDA will respond in a timely and meaningful manner to all Tribal government requests for consultation concerning this rule and will provide additional venues, such as Webinars and teleconferences, to periodically host collaborative conversations with Tribal leaders and their representatives concerning ways to improve this rule in Indian country.

Title II of the Unfunded Mandates Reform Act of 1995 (UMRA, Pub. L. 104-4) requires Federal agencies to assess the effects of their regulatory actions on State, local, and Tribal governments or the private sector. Agencies generally must prepare a written statement, including a cost benefit analysis, for proposed and final rules with Federal mandates that may result in expenditures of $100 million or more in any 1 year for State, local, or Tribal governments, in the aggregate, or to the private sector. UMRA generally requires agencies to consider alternatives and adopt the more cost effective or least burdensome alternative that achieves the objectives of the rule. This rule contains no Federal mandates, as defined in Title II of UMRA, for State, local, and tribal governments or the private sector. Therefore, this rule is not subject to the requirements of sections 202 and 205 of the UMRA.

This rule is not a major rule under the Small Business Regulatory Enforcement Fairness Act of 1996, (Pub. L. 104-121, SBREFA). Therefore, CCC is not required to delay the effective date for 60 days from the date of publication to allow for Congressional review. Accordingly, this rule is effective on the date of publication in the Federal Register .

The title and number of the Federal Domestic Assistance Program in the Catalog of Federal Domestic Assistance to which this rule applies is the Farm Storage Facility Loans—10.056.

The regulations in this rule are exempt from requirements of the Paperwork Reduction Act (44 U.S.C. Chapter 35), as specified in section 1601(c)(2) of the 2008 Farm Bill, which provides that the programs in Title I of the 2008 Farm Bill be administered without regard to the Paperwork Reduction Act.

FSA and CCC are committed to complying with the E-Government Act, to promote the use of the Internet and other information technologies to provide increased opportunities for citizen access to Government information and services, and for other purposes.

For the reasons discussed above, CCC amends 7 CFR part 1436 as follows:

This rule is limited to the changes contained in Amendment No. 13 to CoC No. 1004 and does not include other aspects of the Transnuclear, Inc. Standardized NUHOMS® Cask System design. The NRC is using the “direct final rule procedure” to issue this amendment because it represents a limited and routine change to an existing CoC that is expected to be noncontroversial. Adequate protection of public health and safety continues to be ensured. The amendment to the rule will become effective on May 24, 2014. However, if the NRC receives significant adverse comments on this direct final rule by April 9, 2014, then the NRC will publish a document that withdraws this action and will subsequently address the comments received in a final rule as a response to the companion proposed rule published in the Proposed Rule section of this issue of the Federal Register . Absent significant modifications to the proposed revisions requiring republication, the NRC will not initiate a second comment period on this action.

A significant adverse comment is a comment where the commenter explains why the rule would be inappropriate, including challenges to the rule's underlying premise or approach, or would be ineffective or unacceptable without a change. A comment is adverse and significant if:

(1) The comment opposes the rule and provides a reason sufficient to require a substantive response in a notice-and-comment process. For example, a substantive response is required when:

(a) The comment causes the NRC staff to reevaluate (or reconsider) its position or conduct additional analysis;

(b) The comment raises an issue serious enough to warrant a substantive response to clarify or complete the record; or

(c) The comment raises a relevant issue that was not previously addressed or considered by the NRC staff.

(2) The comment proposes a change or an addition to the rule, and it is apparent that the rule would be ineffective or unacceptable without incorporation of the change or addition.

(3) The comment causes the NRC staff to make a change (other than editorial) to the rule, CoC, or Technical Specifications (TSs).

For detailed instructions on submitting comments, please see the companion proposed rule published in the Proposed Rule section of this issue of the Federal Register .

Section 218(a) of the Nuclear Waste Policy Act (NWPA) of 1982, as amended, requires that “the Secretary [of the Department of Energy] shall establish a demonstration program, in cooperation with the private sector, for the dry storage of spent nuclear fuel at civilian nuclear power reactor sites, with the objective of establishing one or more technologies that the [Nuclear Regulatory] Commission may, by rule, approve for use at the sites of civilian nuclear power reactors without, to the maximum extent practicable, the need for additional site-specific approvals by the Commission.” Section 133 of the NWPA states, in part, that “[the Commission] shall, by rule, establish procedures for the licensing of any technology approved by the Commission under Section 219(a) [sic: 218(a)] for use at the site of any civilian nuclear power reactor.”

To implement this mandate, the Commission approved dry storage of spent nuclear fuel in NRC-approved casks under a general license by publishing a final rule in part 72 of Title 10 of the Code of Federal Regulations (10 CFR),”Licensing Requirements for the Independent Storage of Spent Nuclear Fuel, High-Level Radioactive Waste, and Reactor-Related Greater than Class C Waste,” which added a new subpart K within 10 CFR part 72 entitled, “General License for Storage of Spent Fuel at Power Reactor Sites” (55 FR 29181; July 18, 1990). This rule also established a new subpart L within 10 CFR part 72 entitled, “Approval of Spent Fuel Storage Casks,” which contains procedures and criteria for obtaining NRC approval of spent fuel storage cask designs. The NRC subsequently issued a final rule on December 22, 1994 (59 FR 65898), that approved the Standardized NUHOMS® Cask System design and added it to the list of NRC-approved cask designs in 10 CFR 72.214 as CoC No. 1004.

On February 9, 2011 (ADAMS Accession No. ML110460525), and as supplemented on July 22, 2011 (ADAMS Accession No. ML11217A043), March 19, 2012 (ADAMS Accession No. ML120960488), and September 24, 2012 (ADAMS Accession No. ML12270A084), Transnuclear, Inc., the holder of CoC No. 1004, submitted to the NRC a request to amend CoC No. 1004. Specifically, Transnuclear, Inc. requested changes to: (1) Add two new DSCs, the -37PTH and the -69BTH; (2) add new approved contents, including BLEU fuel, and control components to already approved DSCs; and (3) extend the use of the HSM-HS for storage of already approved DSCs. Specific changes to the TSs are:

• Add a new DSC, the -69BTH.

• Add a new DSC, the -37PTH.

• Add control components other than burnable poison rod assemblies and damaged fuel assemblies, and allow non-zircaloy cladding and guide tubes as approved contents to the -24PHB DSC.

• Add high burn-up fuel assemblies with and without control components as approved contents to the -32PT DSC.

• Add failed fuel as approved contents to the -61BTH and -24PTH DSCs.

• Extend the use of the HSM-HS for storage of the -61BT, -32PT, -24PTH, -61BTH, -69BTH, and -37PTH DSCs.

• Extend the use of metal matrix composites as a neutron absorber material in the -61BTH Type 1 and Type 2 DSCs for higher heat loads.

• Add BLEU fuel material as approved contents.

• Modify the inlet vent shielding designs to achieve dose reductions for the HSM-H and HSM-HS.

• Allow the transfer of -61BT, -32PT, -24PTH, and -61BTH DSCs in the OS200 Transfer Cask.

• Allow the use of Type III cement as an alternate equivalent to the Type II cement used in HSM construction.

• Change the TSs neutron absorber testing and acceptance requirements in order to remain consistent with similar requirements in other ongoing licensing actions, plus certain new changes in this area.

• Make additional changes for consistency within the TSs and the Updated Final Safety Analysis Report.

As documented in the SER (ADAMS Accession No. ML13273A327), the NRC staff performed a detailed safety evaluation of the proposed CoC amendment request. There are no significant changes to cask design requirements in the proposed CoC amendment. Considering the specific design requirements for each accident condition, the design of the cask would prevent loss of containment, shielding, and criticality control. If there is no loss of containment, shielding, or criticality control, the environmental impacts would be insignificant. This amendment does not reflect a significant change in design or fabrication of the cask. In addition, any resulting occupational exposure or offsite dose rates from the implementation of Amendment No. 13 would remain well within the 10 CFR part 20 limits. Therefore, the proposed CoC changes will not result in any radiological or non-radiological environmental impacts that significantly differ from the environmental impacts evaluated in the environmental assessment supporting the July 18, 1990, final rule (55 FR 29181) that amended 10 CFR part 72 to provide for the storage of spent nuclear fuel under a general license in cask designs approved by the NRC. There will be no significant change in the types or significant revisions in the amounts of any effluent released, no significant increase in the individual or cumulative radiation exposure, and no significant increase in the potential for or consequences from radiological accidents from those analyzed in that environmental assessment.

On September 11, 2009, Transnuclear, Inc. submitted an application for Amendment No. 12 to CoC No. 1004. The application was in response to the Department of Energy's Transportation, Aging and Disposal Program. The NRC staff returned the application due to uncertainty of funding for the application review, and therefore, the rule currently does not contain an Amendment No. 12. This direct final rule revises the Standardized NUHOMS® Cask System listing in 10 CFR 72.214 by adding Amendment No. 13 to CoC No. 1004. The amendment consists of the changes previously described, as set forth in the revised CoC and TSs. The revised TSs are identified in the SER.

The amended Standardized NUHOMS® cask design, when used under the conditions specified in the CoC, the TSs, and the NRC's regulations, will meet the requirements of 10 CFR part 72; therefore, adequate protection of public health and safety will continue to be ensured. When this direct final rule becomes effective, persons who hold a general license under 10 CFR 72.210 may load spent nuclear fuel into Standardized NUHOMS® Cask Systems that meet the criteria of Amendment No. 13 to CoC No. 1004 under 10 CFR 72.212.

The National Technology Transfer and Advancement Act of 1995 (Pub. L. 104-113) requires that Federal agencies use technical standards that are developed or adopted by voluntary consensus standards bodies unless the use of such a standard is inconsistent with applicable law or otherwise impractical. In this direct final rule, the NRC will revise the Standardized NUHOMS® Cask System design listed in 10 CFR 72.214, “List of Approved Spent Fuel Storage Casks.” This action does not constitute the establishment of a standard that contains generally applicable requirements.

Under the “Policy Statement on Adequacy and Compatibility of Agreement State Programs” approved by the Commission on June 30, 1997, and published in the Federal Register on September 3, 1997 (62 FR 46517), this rule is classified as Compatibility Category “NRC.” Compatibility is not required for Category “NRC” regulations. The NRC program elements in this category are those that relate directly to areas of regulation reserved to the NRC by the Atomic Energy Act of 1954, as amended, or the provisions of 10 CFR. Although an Agreement State may not adopt program elements reserved to the NRC, it may wish to inform its licensees of certain requirements via a mechanism that is consistent with the particular State's administrative procedure laws, but does not confer regulatory authority on the State.

The Plain Writing Act of 2010 (Pub. L. 111-274) requires Federal agencies to write documents in a clear, concise, well-organized manner that also follows other best practices appropriate to the subject or field and the intended audience. The NRC has attempted to use plain language in promulgating this rule consistent with the Federal Plain Writing Act guidelines.

The action is to amend 10 CFR 72.214 to revise the Transnuclear, Inc. Standardized NUHOMS® Cask System listing within the “List of Approved Spent Fuel Storage Casks” to include Amendment No. 13 to CoC No. 1004.

Under the National Environmental Policy Act of 1969, as amended, and the NRC regulations in subpart A of 10 CFR part 51, the NRC has determined that this rule, if adopted, would not be a major Federal action significantly affecting the quality of the human environment and, therefore, an environmental impact statement is not required. The NRC has made a finding of no significant impact on the basis of this environmental assessment.

This rule amends the CoC for the Standardized NUHOMS® Cask System design within the list of approved spent fuel storage casks that power reactor licensees can use to store spent fuel at reactor sites under a general license. Specifically, Transnuclear, Inc. requested changes to revise authorized contents to: (1) Add two new DSCs, the -37PTH and the -69BTH; (2) add new approved contents, including BLEU fuel, and control components to already approved DSCs; and (3) extend the use of the HSM-HS for storage of already approved DSCs.

On July 18, 1990 (55 FR 29181), the NRC issued an amendment to 10 CFR part 72 to provide for the storage of spent nuclear fuel under a general license in cask designs approved by the NRC. The potential environmental impact of using NRC-approved storage casks was initially analyzed in the environmental assessment for the 1990 final rule. The environmental assessment for this Amendment No. 13 tiers off of the environmental assessment for the July 18, 1990, final rule. Tiering on past environmental assessments is a standard process under the National Environmental Policy Act.

Standardized NUHOMS® Cask Systems are designed to mitigate the effects of design basis accidents that could occur during storage. Design basis accidents account for human-induced events and the most severe natural phenomena reported for the site and surrounding area. Postulated accidents analyzed for an Independent Spent Fuel Storage Installation, the type of facility at which a holder of a power reactor operating license would store spent fuel in casks in accordance with 10 CFR part 72, include tornado winds and tornado-generated missiles, a design basis earthquake, a design basis flood, an accidental cask drop, lightning effects, fire, explosions, and other incidents.

Considering the specific design requirements for each accident condition, the design of the cask would prevent loss of containment, shielding, and criticality control. If there is no loss of containment, shielding, or criticality control, the environmental impacts would be insignificant. This amendment does not reflect a significant change in design or fabrication of the cask. There are no significant changes to cask design requirements in the proposed CoC amendment. In addition, any resulting occupational exposure or offsite dose rates from the implementation of Amendment No. 13 would remain well within the 10 CFR part 20 limits. Therefore, the proposed CoC changes will not result in any radiological or non-radiological environmental impacts that significantly differ from the environmental impacts evaluated in the environmental assessment supporting the July 18, 1990, final rule. There will be no significant change in the types or significant revisions in the amounts of any effluent released, no significant increase in the individual or cumulative radiation exposure, and no significant increase in the potential for or consequences from radiological accidents.

The staff documented its findings in a safety evaluation report which is available in ADAMS under Accession No. ML13273A327.

The alternative to this action is to deny approval of Amendment No. 13 and end the direct final rulemaking. Consequently, any 10 CFR part 72 general licensee that seeks to load spent nuclear fuel into the Standardized NUHOMS® Cask System in accordance with the changes described in proposed Amendment No. 13 would have to request an exemption from the requirements of 10 CFR 72.212 and 72.214. Under this alternative, interested licensees would have to prepare, and the NRC would have to review, a separate exemption request, thereby increasing the administrative burden upon the NRC and the costs to each licensee. Therefore, the environmental impacts would be the same or less than the action.

Approval of Amendment No. 13 to CoC No. 1004 would result in no irreversible commitments of resources.

No agencies or persons outside the NRC were contacted in connection with the preparation of this environmental assessment.

The environmental impacts of the action have been reviewed under the requirements in 10 CFR part 51.

Based on the foregoing environmental assessment, the NRC concludes that this rulemaking entitled, “List of Approved Spent Fuel Storage Casks: Standardized NUHOMS® Cask System,” will not have a significant effect on the human environment. Therefore, the NRC has determined that an environmental impact statement is not necessary for this rule.

Documents related to this rulemaking, including comments received by the NRC, may be examined at the NRC Public Document Room, Room O-1F21, One White Flint North, 11555 Rockville Pike, Rockville, Maryland 20852.

This rule does not contain any information collection requirements and, therefore, is not subject to the Paperwork Reduction Act of 1995 (44 U.S.C. 3501 et seq.). Existing requirements were approved by the Office of Management and Budget (OMB), Approval Number 3150-0132.

The NRC may not conduct or sponsor, and a person is not required to respond to a request for information or an information collection requirement unless the requesting document displays a currently valid OMB control number.

On July 18, 1990 (55 FR 29181), the NRC issued an amendment to 10 CFR part 72 to provide for the storage of spent nuclear fuel under a general license in cask designs approved by the NRC. Any nuclear power reactor licensee can use NRC-approved cask designs to store spent nuclear fuel if it notifies the NRC in advance, the spent fuel is stored under the conditions specified in the cask's CoC, and the conditions of the general license are met. A list of NRC-approved cask designs is contained in 10 CFR 72.214. On December 22, 1994 (59 FR 65898), the NRC issued an amendment to 10 CFR part 72 that approved the Standardized NUHOMS® Cask System design by adding it to the list of NRC-approved cask designs in 10 CFR 72.214.

On February 9, 2011 (ADAMS Accession No. ML110460525), and as supplemented on July 22, 2011 (ADAMS Accession No. ML11217A043), March 19, 2012 (ADAMS Accession No. ML120960488), and September 24, 2012 (ADAMS Accession No. ML12270A084), Transnuclear, Inc., submitted an application to amend the Standardized NUHOMS® Cask System as described in Section III.

The alternative to this action is to withhold approval of Amendment No. 13 and to require any 10 CFR part 72 general licensee seeking to load spent nuclear fuel into Standardized NUHOMS® Cask Systems under the changes described in Amendment No. 13 to request an exemption from the requirements of 10 CFR 72.212 and 72.214. Under this alternative, each interested 10 CFR part 72 licensee would have to prepare, and the NRC would have to review, a separate exemption request, thereby increasing the administrative burden upon the NRC and the costs to each licensee.

Approval of the direct final rule is consistent with previous NRC actions. Further, as documented in the SER and the environmental assessment, the direct final rule will have no adverse effect on public health and safety or the environment. This direct final rule has no significant identifiable impact or benefit on other Government agencies. Based on this regulatory analysis, the NRC concludes that the requirements of the direct final rule are commensurate with the NRC's responsibilities for public health and safety and the common defense and security. No other available alternative is believed to be as satisfactory, and therefore, this action is recommended.

Under the Regulatory Flexibility Act of 1980 (5 U.S.C. 605(b)), the NRC certifies that this rule will not, if issued, have a significant economic impact on a substantial number of small entities. This direct final rule affects only nuclear power plant licensees and Transnuclear, Inc. These entities do not fall within the scope of the definition of small entities set forth in the Regulatory Flexibility Act or the size standards established by the NRC (10 CFR 2.810).

The NRC has determined that the backfit rule (10 CFR 72.62) does not apply to this direct final rule. Therefore, a backfit analysis is not required. This direct final rule revises CoC No. 1004 for the Transnuclear, Inc. Standardized NUHOMS® Cask System, as currently listed in 10 CFR 72.214, “List of Approved Spent Fuel Storage Casks.” The revision consists of Amendment No. 13, which: (1) Adds two new DSCs, the -37PTH and the -69BTH; (2) adds new approved contents, including BLEU fuel, and control components to already approved DSCs; and (3) extends the use of the HSM-HS for storage of already approved DSCs. Amendment No. 13 to CoC No. 1004 for the Standardized NUHOMS® Cask System was initiated by Transnuclear, Inc. and was not submitted in response to new NRC requirements, or an NRC request for amendment. Amendment No. 13 applies only to new casks fabricated and used under Amendment No. 13. These changes do not affect existing users of the Standardized NUHOMS® Cask System, and the current Amendment No. 11 continues to be effective for existing users. While current CoC users may comply with the new requirements in Amendment No. 13, this would be a voluntary decision on the part of current users. For these reasons, Amendment No. 13 to CoC No. 1004 does not constitute backfitting under 10 CFR 72.62, 10 CFR 50.109(a)(1), or otherwise represent an inconsistency with the issue finality provisions applicable to combined licenses in 10 CFR part 52. Accordingly, no backfit analysis or additional documentation addressing the issue finality criteria in 10 CFR part 52 has been prepared by the staff.

The Office of Management and Budget has not found this to be a major rule as defined in the Congressional Review Act.

For the reasons set out in the preamble and under the authority of the Atomic Energy Act of 1954, as amended; the Energy Reorganization Act of 1974, as amended; the Nuclear Waste Policy Act of 1982, as amended; and 5 U.S.C. 552 and 553; the NRC is adopting the following amendments to 10 CFR part 72.

On July 3, 2013, at 78 FR 40047, the Federal Register published our notice of proposed rulemaking (NPRM), which proposed to amend 14 CFR part 39 to add an AD that would apply to ECD Model EC135 P1, P2, P2+, T1, T2, and T2+ helicopters, serial number (S/N) 0005 through 00829, with a tail rotor control lever, part number (P/N) L672M2802205 or L672M1012212; cyclic control lever, P/N L671M1005250; collective control lever assembly, P/N L671M2020108; or collective control plate, P/N L671M5040207; installed. The NRPM proposed that the AD also would apply to Model MBB-BK 117 C-2 helicopters, S/N 9004 through 9310, with a tail rotor control lever assembly, P/N B672M1007101 or B672M1807101; tail rotor control lever, P/N B672M1002202 or L672M2802205; or lateral control lever assembly, P/N B670M1008101, installed.

The NPRM proposed to require inspecting the flight-control bearings repetitively, replacing any loose bearing with an airworthy flight-control bearing, and installing bushings and washers. The proposed requirements were intended to prevent the affected control lever from shifting, contacting the helicopter structure, and reducing control of the helicopter.

The NPRM was prompted by AD No. 2010-0058, dated March 30, 2010, issued by EASA, which is the Technical Agent for the Member States of the European Union. EASA issued the AD to correct an unsafe condition for the ECD Model MBB-BK 117 C-2, EC 135 and EC 635 helicopters. EASA advises that during an inspection of an MBB-BK 117 C-2, “bearings were detected which had not been correctly fixed.” As some bearings on the EC 135 and MBB-BK 117 C-2 type designs are installed with the same procedure, they are equally affected by the possibility of the unsafe condition. EASA states that this condition, if not corrected, could result in the affected control lever shifting in the axial direction, contacting the helicopter structure, and subsequently reducing control of the helicopter.

We gave the public the opportunity to participate in developing this AD, but we received no comments on the NPRM (78 FR 40047, July 3, 2013).

These helicopters have been approved by the aviation authority of the Federal Republic of Germany and are approved for operation in the United States. Pursuant to our bilateral agreement with Germany, EASA, its technical representative, has notified us of the unsafe condition described in its AD. We are issuing this AD because we evaluated all information provided by EASA and determined the unsafe condition exists and is likely to exist or develop on other helicopters of these same type designs and that air safety and the public interest require adopting the AD requirements as proposed.

Differences between this AD and the EASA AD are:

• The EASA AD is applicable to the EC 635 helicopter, whereas this AD is not because the EC 635 helicopter is not type certificated in the U.S.

• The EASA AD requires an initial inspection within 50 flight hours or one month, whichever occurs first after May 31, 2008, and a modification within the next 12 months. This AD requires the modification within 100 hours TIS or at the next annual inspection, whichever occurs first, and no inspection until after the modification has been accomplished.

Eurocopter has issued Alert Service Bulletin (ASB) MBB BK117 C-2-67A-010, Revision 3, dated February 8, 2010, and ASB EC135-67A-019, Revision 3, dated December 16, 2009. These ASBs specify:

• Within the next 50 flight hours (FHs), inspecting the affected bearings and, if necessary, rebonding any affected bearings or replacing the lever assembly.

• Within 12 months, retrofitting bushings on the levers to prevent movement of the bearings.

• After the retrofit, repeating the inspection every 800 FHs or 36 months for the Model EC 135 helicopters, whichever comes first, and 600 FHs or 24 months, whichever comes first, for the Model MBB-BK 117 C-2 helicopters.

EASA classified these ASBs as mandatory and issued AD 2010-0058 to ensure the continued airworthiness of these helicopters.

We estimate that this AD affects 175 Model EC135 and 112 Model MBB-BK 117 C-2 helicopters of U.S. Registry and that labor costs average $85 per work-hour. Based on these estimates, we expect the following costs:

• For EC135 helicopters, it takes about 32 work-hours to perform the modification. Parts cost about $312. The total cost for the modification is about $3,032 per helicopter and $530,600 for the U.S. operator fleet. The repetitive inspections require 6.5 work-hours for a cost of about $553 per helicopter and about $96,775 for the fleet per inspection cycle.

• For MBB-BK 117 C-2 helicopters, it takes about 32 work-hours to perform the modification. Parts cost about $396. The total cost for the modification is $3,116 per helicopter and $348,992 for the U.S. operator fleet. The cost for the repetitive inspections thereafter is about $85 per helicopter and $9,520 for the fleet per inspection cycle.

Title 49 of the United States Code specifies the FAA's authority to issue rules on aviation safety. Subtitle I, section 106, describes the authority of the FAA Administrator. Subtitle VII: Aviation Programs, describes in more detail the scope of the Agency's authority.

We are issuing this rulemaking under the authority described in Subtitle VII, Part A, Subpart III, Section 44701: “General requirements.” Under that section, Congress charges the FAA with promoting safe flight of civil aircraft in air commerce by prescribing regulations for practices, methods, and procedures the Administrator finds necessary for safety in air commerce. This regulation is within the scope of that authority because it addresses an unsafe condition that is likely to exist or develop on helicopters identified in this rulemaking action.

This AD will not have federalism implications under Executive Order 13132. This AD will not have a substantial direct effect on the States, on the relationship between the national government and the States, or on the distribution of power and responsibilities among the various levels of government.

For the reasons discussed above, I certify that this AD:

(1) Is not a “significant regulatory action” under Executive Order 12866;

(2) Is not a “significant rule” under DOT Regulatory Policies and Procedures (44 FR 11034, February 26, 1979);

(3) Will not affect intrastate aviation in Alaska to the extent that it justifies making a regulatory distinction; and

(4) Will not have a significant economic impact, positive or negative, on a substantial number of small entities under the criteria of the Regulatory Flexibility Act.

We prepared an economic evaluation of the estimated costs to comply with this AD and placed it in the AD docket.

Accordingly, under the authority delegated to me by the Administrator, the FAA amends 14 CFR part 39 as follows:

This AD is a final rule that involves requirements affecting flight safety, and we did not provide you with notice and an opportunity to provide your comments prior to it becoming effective. However, we invite you to participate in this rulemaking by submitting written comments, data, or views. We also invite comments relating to the economic, environmental, energy, or federalism impacts that resulted from adopting this AD. The most helpful comments reference a specific portion of the AD, explain the reason for any recommended change, and include supporting data. To ensure the docket does not contain duplicate comments, commenters should send only one copy of written comments, or if comments are filed electronically, commenters should submit them only one time. We will file in the docket all comments that we receive, as well as a report summarizing each substantive public contact with FAA personnel concerning this rulemaking during the comment period. We will consider all the comments we receive and may conduct additional rulemaking based on those comments.

On April 22, 2008, we issued AD 2008-10-03, Amendment 39-15509 (73 FR 24858, May 6, 2008) for Bell Helicopter Textron Helicopters (Bell) Model 204B, 205A, 205A-1, 205B, 210, 212, 412, 412CF, and 412EP helicopters. AD 2008-10-03 required certain checks and inspections of each T/R blade at specified intervals and repairing or replacing, as applicable, any unairworthy T/R blade. AD 2008-10-03 was prompted by eight reports of fatigue cracking of T/R blades installed on Bell Model 212 and 412 helicopters (three failures on Bell Model 212 and five failures on Bell Model 412) with a T/R blade, part number (P/N) 212-010-750-009, -105, and -107. Three of the Model 412 failures occurred during flight.

After we issued AD 2008-10-03, an accident attributed to a T/R failure occurred. Because of this accident, we determined that a second, more detailed inspection was necessary to allow for an earlier detection of a crack or other damage. As a result, on July 11, 2013, we issued AD 2013-15-02, Amendment 39-17518 (78 FR 45845, July 30, 2013), which superseded AD 2008-10-03. These actions were intended to prevent failure of the T/R blade and subsequent loss of helicopter control.

Although similar failures have not been reported on Agusta helicopters, T/R blade P/N 212-010-750 may be installed on Agusta Model AB205A1, AB212, AB412, and AB412 EP helicopters. As a result, EASA, which is the Technical Agent for the Member States of the European Union, issued AD No. 2013-0185, dated August 14, 2013, to correct an unsafe condition for Agusta Model AB205A1, AB212, AB412, and AB412 EP helicopters. EASA advised that Bell reported some failures in T/R blade P/N 212-010-750 (all dash numbers), which originated from a fatigue crack derived from surface damages. EASA consequently requires detailed visual inspections of the T/R blade surface for nicks, dents, scratches, corrosion or cracks. EASA also requires repair or replacement of the T/R blade, depending on the outcome of those inspections.

These helicopters have been approved by the aviation authority of Italy and are approved for operation in the United States. Pursuant to our bilateral agreement with Italy, EASA, its technical representative, has notified us of the unsafe condition described in the EASA AD. We are issuing this AD because we evaluated all information provided by EASA and determined that the unsafe condition exists and is likely to exist or develop on other helicopters of these same type designs.

AgustaWestland, formerly Agusta S.p.A., issued Bollettino Tecnico No. 412-136, dated August 13, 2013 (BT), for Model AB412 and Model AB412 EP helicopters. The BT calls for visually inspecting the T/R blade surface for a crack, corrosion, a nick, a scratch, a dent, or other damage using a 3X magnifying glass every 25 hours time-in-service (TIS) or 30 days, whichever occurs first. The BT also calls for a recurring detailed visual inspection of the blade surface with a 10X magnifying glass between stations 20.00 to 35.00 from the T/R blade's leading edge to the trailing edge. If paint blistering, peeling, flaking, bubbling, or cracking exists, the BT calls for removing the paint and inspecting the affected area with a 10X magnifying glass. If a nick, scratch or dent exists, the BT calls for a visual inspection for a crack with a 10X magnifying glass and measuring any damage. If skin damages exceed maintenance manual limits or if a crack exists, the BT calls for removing the blade from service.

This AD requires within 25 hours TIS or 30 days, whichever occurs first, and thereafter at intervals not to exceed 25 hours TIS or 30 days, whichever occurs first:

• Cleaning each T/R blade by hand and, using a 3X or higher power magnifying glass and a light, visually inspecting the T/R blade skins, leading edge spar, doublers, grip plates, and trailing edge on both sides of each blade for a crack, corrosion, a nick, scratch, dent, or other damage. This inspection requires you to pay particular attention to the area located between blade station 20.00 to 35.00 and to the inboard T/R blade butt area near the attachment of the external balance weight and screws.

• Using a 10X or higher magnifying glass and a light, visually inspecting both sides of each blade for a crack or other damage between blade station 20.00 to 35.00.

• If blistering, peeling, flaking, bubbling, or cracked paint is detected anywhere on the blade, removing the paint and then visually inspecting the affected area for any corrosion or a crack using a 10X or higher magnifying glass and a light.

• If a nick, scratch, or dent is found anywhere on the blade, visually inspecting for a crack using a 10X or higher power magnifying glass and a light.

• Before further flight, removing from service any T/R blade that has a crack or that has corrosion, a nick, a scratch, a dent, or other damage that exceeds any of the maximum repair limits.

• Before further flight, repairing or removing from service any T/R blade that has any corrosion, nick, scratch, dent or other damage that is within the maximum repair limits.

The EASA AD applies to Agusta Model AB205A1 and AB212 helicopters. This AD does not because these helicopters have no FAA type certificate. This AD requires paying particular attention to both sides of each T/R blade in the area located 16 to 32 inches from the T/R blade tip when conducting the inspection using a 3X or higher power magnifying glass and a light. The EASA AD makes no such requirement.

There are no costs of compliance with this AD because there are no helicopters with this type certificate on the U.S. Registry.

There are no helicopters with this type certificate on the U.S. Registry. Therefore, we believe it is unlikely that we will receive any adverse comments or useful information about this AD from U.S. Operators.

Since an unsafe condition exists that requires the immediate adoption of this AD, we determined that notice and opportunity for public comment before issuing this AD are unnecessary because there are no helicopters on the U.S. registry and that good cause exists for making this amendment effective in less than 30 days.

Title 49 of the United States Code specifies the FAA's authority to issue rules on aviation safety. Subtitle I, section 106, describes the authority of the FAA Administrator. “Subtitle VII: Aviation Programs,” describes in more detail the scope of the Agency's authority.

We are issuing this rulemaking under the authority described in “Subtitle VII, Part A, Subpart III, Section 44701: General requirements.” Under that section, Congress charges the FAA with promoting safe flight of civil aircraft in air commerce by prescribing regulations for practices, methods, and procedures the Administrator finds necessary for safety in air commerce. This regulation is within the scope of that authority because it addresses an unsafe condition that is likely to exist or develop on products identified in this rulemaking action.

We determined that this AD will not have federalism implications under Executive Order 13132. This AD will not have a substantial direct effect on the States, on the relationship between the national Government and the States, or on the distribution of power and responsibilities among the various levels of government.

For the reasons discussed, I certify that this AD:

1. Is not a “significant regulatory action” under Executive Order 12866;

2. Is not a “significant rule” under DOT Regulatory Policies and Procedures (44 FR 11034, February 26, 1979);

3. Will not affect intrastate aviation in Alaska to the extent that it justifies making a regulatory distinction; and

4. Will not have a significant economic impact, positive or negative, on a substantial number of small entities under the criteria of the Regulatory Flexibility Act.

Accordingly, under the authority delegated to me by the Administrator, the FAA amends 14 CFR part 39 as follows:

Discussion

On July 3, 2013, at 78 FR 40053, the Federal Register published our notice of proposed rulemaking (NPRM), which proposed to amend 14 CFR part 39 by adding an AD that would apply to Eurocopter Model EC135 P1, EC135 P2, EC135 P2+, EC135 T1, EC135 T2, and EC135 T2+ helicopters with an MGB, part number (P/N) 4649 010 003, 4649 010 005, 4649 010 006, 4649 010 006X, 4649 010 008, 4649 010 008X, 4649 001 007, 4649 010 010, or 4649 010 013 installed. The NPRM proposed to require analyzing the MGB oil for indications of metal chips or pieces, reviewing the MGB log or equivalent record, and inspecting certain teeth in the MGB after two chip indications. The proposed requirements were intended to detect wear in the MGB that could lead to a gear tooth rupture, failure of the MGB, loss of power to the main rotor, and subsequent loss of control of the helicopter.

The Required Actions section of the NPRM had a typographical error in some references to Eurocopter Alert Service Bulletin (ASB) EC135-63A-012, Revision 5, dated September 6, 2011. That error has been corrected in this AD.

The NPRM was prompted by AD No. 2009-0106R1, dated November 3, 2011, issued by EASA, which is the Technical Agent for the Member States of the European Union. EASA advises that an MGB was returned to the manufacturer for repair after “several chip indications.” According to EASA, a partial tooth rupture was detected after disassembly of the gearbox and removal of a drive pinion. EASA states the tooth rupture was determined to have been caused by wear. EASA AD No. 2009-0106R1 includes requirements and timetables for oil sampling and analysis; checking the gearbox log card for chip indications; and corrective measures for chip indications. It also states that a prescribed modification to the MGB would be terminating action for the AD.

We gave the public the opportunity to participate in developing this AD, but we received no comments on the NPRM (78 FR 40053, July 3, 2013).

These helicopters have been approved by the aviation authority of Germany and are approved for operation in the United States. Pursuant to our bilateral agreement with Germany, EASA, its technical representative, has notified us of the unsafe condition described in the EASA AD. We are issuing this AD because we evaluated all information provided by EASA and determined the unsafe condition exists and is likely to exist or develop on other helicopters of these same type designs and that air safety and the public interest require adopting the AD requirements as proposed except for correcting the references to Eurocopter Alert Service Bulletin EC135-63A-012, Revision 5, dated September 6, 2011, in paragraphs (e)(2)(ii)(A), (e)(3), (e)(4)(i), and (e)(4)(ii). These corrections are consistent with the intent of the proposals in the NPRM (78 FR 40053, July 3, 2013) and will not increase the economic burden on any operator nor increase the scope of the AD.

The EASA AD applies to military EC635 helicopters. This AD does not apply to EC635 helicopters because they are not type certificated in the United States.

Eurocopter issued ASB EC135-63A-012 on August 8, 2007, which was followed by five revisions, the most recent of which was issued September 6, 2011. The ASBs prescribe procedures to monitor and detect wear in time to prevent MGB tooth ruptures in main transmissions for EC135 and EC635 model helicopters. Revision 5 of the ASB prescribes procedures for taking and analyzing scheduled oil samples, identifying and addressing chip indications, and inspecting certain teeth in gearboxes.

We estimate that this AD affects 242 helicopters of U.S. Registry and that labor costs average $85 per work-hour. Based on these estimates, we expect the following costs:

• Taking oil samples will take 1 work-hour. Assuming 2 samples per aircraft per year, we estimate a total cost of $170. No parts are needed, so the total cost for the U.S. fleet is $41,140.

• A laboratory analysis of 2 oil samples cost $200 per helicopter for labor and equipment, for a total fleet cost of $48,400.

• Inspecting the oil filter element for a chip requires about a half-hour of labor for a cost per helicopter of about $43. No parts are needed.

• Inspecting certain teeth in the gearbox, performing a ground run, and inspecting for leaking oil takes 8 work-hours for a labor cost of $680. Parts cost $196, for a total cost per helicopter of $876.

• If the oil sample analysis indicates metal chips, recording the results on the aircraft log card takes a half-hour for a labor cost of about $43 per helicopter.

• The cost of examining the log card for any previously recorded chip indications is minimal.

• Inspecting the chip detector for deposits requires about 5 minutes of labor for a labor cost of about $7.

• Replacing the MGB with an airworthy MGB requires 8 work-hours for a labor cost of $680. Parts cost $145,000 for total cost per helicopter of $145,680.

Title 49 of the United States Code specifies the FAA's authority to issue rules on aviation safety. Subtitle I, section 106, describes the authority of the FAA Administrator. Subtitle VII: Aviation Programs, describes in more detail the scope of the Agency's authority.

We are issuing this rulemaking under the authority described in Subtitle VII, Part A, Subpart III, Section 44701: “General requirements.” Under that section, Congress charges the FAA with promoting safe flight of civil aircraft in air commerce by prescribing regulations for practices, methods, and procedures the Administrator finds necessary for safety in air commerce. This regulation is within the scope of that authority because it addresses an unsafe condition that is likely to exist or develop on helicopters identified in this rulemaking action.

This AD will not have federalism implications under Executive Order 13132. This AD will not have a substantial direct effect on the States, on the relationship between the national government and the States, or on the distribution of power and responsibilities among the various levels of government.

For the reasons discussed above, I certify that this AD:

(1) Is not a “significant regulatory action” under Executive Order 12866;

(2) Is not a “significant rule” under DOT Regulatory Policies and Procedures (44 FR 11034, February 26, 1979);

(3) Will not affect intrastate aviation in Alaska to the extent that it justifies making a regulatory distinction; and

(4) Will not have a significant economic impact, positive or negative, on a substantial number of small entities under the criteria of the Regulatory Flexibility Act.

We prepared an economic evaluation of the estimated costs to comply with this AD and placed it in the AD docket.

Accordingly, under the authority delegated to me by the Administrator, the FAA amends 14 CFR part 39 as follows:

On July 23, 2013, at 78 FR 44039, the Federal Register published our notice of proposed rulemaking (NPRM), which proposed to amend 14 CFR part 39 by adding an AD that would apply to Model MBB-BK 117 C-2 helicopters with a jettisonable door installed. The NPRM proposed to require inspecting the lock release assembly and the middle and upper lever locking bolts of each door, replacing any damaged parts with airworthy parts, and ensuring the door is correctly installed. The proposed requirements were intended to prevent the in-flight loss of the door, which could damage the helicopter and injure persons on the ground.

The NPRM was prompted by AD No. 2011-0107, dated June 7, 2011, issued by the European Aviation Safety Agency (EASA), which is the Technical Agent for the Member States of the European Union. AD No. 2011-0107 was issued to correct an unsafe condition for Eurocopter Model MBB-BK 117 C-2 helicopters with jettisonable sliding doors installed. EASA states that in early 2010 it received a report that the door guides of the jettison mechanism on an MBB-BK 117 C-2 helicopter released uncommanded while the door was being opened, resulting in the door detaching from the fuselage. EASA has determined that “this condition, if not detected and corrected, could result in cases of in-flight loss of the jettisonable door, possibly resulting in damage to, or loss of control of, the helicopter, or injury to persons on the ground.” As a result, EASA requires repetitive inspections for the correct installation of the doors, door guides, and release cables.

We gave the public the opportunity to participate in developing this AD, but we received no comments on the NPRM (78 FR 44039, July 23, 2013).

These helicopters have been approved by the aviation authority of Germany and are approved for operation in the United States. Pursuant to our bilateral agreement with Germany, EASA, its technical representative, has notified us of the unsafe condition described in the EASA AD. We are issuing this AD because we evaluated all information provided by EASA and determined the unsafe condition exists and is likely to exist or develop on other helicopters of these same type designs and that air safety and the public interest require adopting the AD requirements as proposed.

This AD requires that the inspections be conducted within 50 hours time-in-service (TIS). The EASA AD requires that the inspections be conducted within 50 hours TIS or 60 days, whichever occurs first after the effective date of the EASA AD.

The EASA AD requires that you contact Eurocopter to determine corrective action, and this AD does not.

The EASA AD requires a repetitive inspection, each time when the installation of the door guides for the jettisonable sliding doors is accomplished. This AD does not require this repetitive inspection because that is considered normal maintenance.

We reviewed Eurocopter Alert Service Bulletin MBB-BK117 C-2-52A-015, Revision 0, dated April 26, 2011 (ASB), for Model MBB-BK 117 C-2 helicopters with jettisonable sliding doors installed. The ASB calls for inspecting the lock release assembly for damage and correct installation and inspecting the middle lever and upper lever locking bolts for correct installation. The ASBs require the inspections to be conducted within 50 hours TIS or two months, whichever occurs first, and thereafter after every door guide installation.

We estimate that this AD affects 108 helicopters of U.S. Registry and that labor costs average $85 a work-hour. Based on these estimates, we expect the following costs:

• Visually inspecting the door's lock release assembly and the middle and upper levers requires 4 work-hours for a labor cost of $340 per helicopter. No parts are needed, so that the total cost for the U.S. fleet is $36,720.

• Visually inspecting all hardware, guides and door attachment points for misaligned or bent fittings requires 4 work-hours for a labor cost of $340 per helicopter. Parts may be needed but on an individual basis, so that the total cost for the U.S. fleet is at least $36,720.

Title 49 of the United States Code specifies the FAA's authority to issue rules on aviation safety. Subtitle I, section 106, describes the authority of the FAA Administrator. Subtitle VII: Aviation Programs, describes in more detail the scope of the Agency's authority.

We are issuing this rulemaking under the authority described in Subtitle VII, Part A, Subpart III, Section 44701: “General requirements.” Under that section, Congress charges the FAA with promoting safe flight of civil aircraft in air commerce by prescribing regulations for practices, methods, and procedures the Administrator finds necessary for safety in air commerce. This regulation is within the scope of that authority because it addresses an unsafe condition that is likely to exist or develop on helicopters identified in this rulemaking action.

This AD will not have federalism implications under Executive Order 13132. This AD will not have a substantial direct effect on the States, on the relationship between the national government and the States, or on the distribution of power and responsibilities among the various levels of government.

For the reasons discussed above, I certify that this AD:

(1) Is not a “significant regulatory action” under Executive Order 12866;

(2) Is not a “significant rule” under DOT Regulatory Policies and Procedures (44 FR 11034, February 26, 1979);

(3) Will not affect intrastate aviation in Alaska to the extent that it justifies making a regulatory distinction; and

(4) Will not have a significant economic impact, positive or negative, on a substantial number of small entities under the criteria of the Regulatory Flexibility Act.

We prepared an economic evaluation of the estimated costs to comply with this AD and placed it in the AD docket.

Accordingly, under the authority delegated to me by the Administrator, the FAA amends 14 CFR part 39 as follows:

Discussion

We issued a notice of proposed rulemaking (NPRM) to amend 14 CFR part 39 to supersede AD 2012-12-08, Amendment 39-17088 (77 FR 37781, June 25, 2012). (A correction of AD 2012-12-08 was published in the Federal Register on July 20, 2012 (77 FR 42625)). AD 2012-12-08 applied to certain The Boeing Company Model 777-200 and -300 series airplanes. The NPRM published in the Federal Register on September 19, 2013 (78 FR 57542). The NPRM was prompted by a determination that additional airplanes may be subject to the identified unsafe condition. The NPRM also proposed to continue to require the actions required by AD 2012-12-08. The NPRM also proposed to add airplanes to the applicability; and to require an inspection for the part number of the main landing gear retract actuator fuse pin, and replacement of the pin if necessary. We are issuing this AD to prevent structural damage to the side and drag brace lock assemblies, which could result in landing gear collapse during touchdown, rollout, or taxi.

We gave the public the opportunity to participate in developing this AD. The following presents the comments received on the proposal (78 FR 57542, September 19, 2013) and the FAA's response to each comment.

Boeing requested that we revise the last sentence of paragraph (g) of the NPRM (78 FR 57542, September 19, 2013) to add the phrase, “Except as required by paragraph (h) of this AD,” at the beginning of the sentence. Boeing reasoned that it is unclear if the replacement referred to in the last sentence should be done within the specified compliance time after the release date of Boeing Special Attention Service Bulletin 777-32-0083, Revision 2, dated May 2, 2013, or within the specified compliance time after the effective date of this AD.

We agree to revise this final rule for the reasons stated by Boeing. We have revised paragraph (g) of this final rule accordingly.

We reviewed the relevant data, considered the comment received, and determined that air safety and the public interest require adopting this AD with the change described previously and minor editorial changes. We have determined that these minor changes:

• Are consistent with the intent that was proposed in the NPRM (78 FR 57542, September 19, 2013) for correcting the unsafe condition; and

• Do not add any additional burden upon the public than was already proposed in the NPRM (78 FR 57542, September 19, 2013).

We also determined that these changes will not increase the economic burden on any operator or increase the scope of this AD.

We estimate that this AD affects 129 airplanes of U.S. registry.

We estimate the following costs to comply with this AD:

We estimate the following costs to do any necessary replacements that would be required based on the results of the inspection. We have no way of determining the number of aircraft that might need these replacements:

Title 49 of the United States Code specifies the FAA's authority to issue rules on aviation safety. Subtitle I, Section 106, describes the authority of the FAA Administrator. Subtitle VII, Aviation Programs, describes in more detail the scope of the Agency's authority.

We are issuing this rulemaking under the authority described in Subtitle VII, Part A, Subpart III, Section 44701, “General requirements.” Under that section, Congress charges the FAA with promoting safe flight of civil aircraft in air commerce by prescribing regulations for practices, methods, and procedures the Administrator finds necessary for safety in air commerce. This regulation is within the scope of that authority because it addresses an unsafe condition that is likely to exist or develop on products identified in this rulemaking action.

We have determined that this AD will not have federalism implications under Executive Order 13132. This AD will not have a substantial direct effect on the States, on the relationship between the national government and the States, or on the distribution of power and responsibilities among the various levels of government.

For the reasons discussed above, I certify that this AD:

(1) Is not a “significant regulatory action” under Executive Order 12866,

(2) Is not a “significant rule” under DOT Regulatory Policies and Procedures (44 FR 11034, February 26, 1979),

(3) Will not affect intrastate aviation in Alaska, and

(4) Will not have a significant economic impact, positive or negative, on a substantial number of small entities under the criteria of the Regulatory Flexibility Act.

Accordingly, under the authority delegated to me by the Administrator, the FAA amends 14 CFR part 39 as follows:

A. Background and Statutory Authority

The Consumer Product Safety Improvement Act of 2008 (CPSIA, Pub. L. 110-314) was enacted on August 14, 2008. Section 104(b) of the CPSIA, part of the Danny Keysar Child Product Safety Notification Act, requires the Commission to: (1) Examine and assess the effectiveness of voluntary consumer product safety standards for durable infant or toddler products, in consultation with representatives of consumer groups, juvenile product manufacturers, and independent child product engineers and experts; and (2) promulgate consumer product safety standards for durable infant and toddler products. These standards are to be “substantially the same as” applicable voluntary standards or more stringent than the voluntary standards if the Commission concludes that more stringent requirements would further reduce the risk of injury associated with the products.

On May 20, 2013, the Commission issued a notice of proposed rulemaking (NPR) for carriages and strollers. 78 FR 29279. The NPR proposed to incorporate by reference the voluntary standard, ASTM 833-13, “Standard Consumer Safety Performance Specification for Carriages and Strollers,” with certain changes to provisions in the voluntary standard to strengthen the ASTM standard.

In this document, the Commission is issuing a safety standard for carriages and strollers. As required by Section 104(b)(1)(A), the Commission consulted with manufacturers, retailers, trade organizations, laboratories, consumer advocacy groups, consultants, and members of the public in the development of this proposed standard, largely through the ASTM process. The rule incorporates by reference the most recent voluntary standard developed by ASTM International (formerly the American Society for Testing and Materials), ASTM F833-13b, “Standard Consumer Safety Performance Specification for Carriages and Strollers” (ASTM F833-13b), with a modification to address head entrapment hazards associated with multi-positional/adjustable grab bars.

The term “durable infant or toddler product” is defined in section 104(f)(1) of the CPSIA as a durable product intended for use, or that may be reasonably expected to be used, by children under the age of 5 years. “Strollers” are specifically identified in section 104(f)(2)(I) of the CPSIA as a durable infant or toddler product. ASTM F833-13b defines a “stroller” as a wheeled vehicle to transport children usually from infancy to 36 months of age. Children are transported generally in a sitting-up or semi-reclined position. The motive power is supplied by a person while pushing on a handle attached to the stroller. Carriages, on the other hand, are wheeled vehicles to transport an infant, usually in a lying down position. Thus, the principal difference between strollers and carriages is the position of the occupant. Both carriages and strollers may be capable of being folded for storage.

Umbrella strollers are lightweight, compact when folded, and may lack certain accessories, such as baskets underneath the seat, or cup holders for the caregiver. Strollers that fold in two dimensions, the height and length, are called “2D” strollers. Strollers that collapse in all three dimensions—height, length, and width—resulting in a smaller folded package than 2D strollers, are called “3D” strollers. Other types of strollers include travel systems that accommodate an infant car seat on a stroller. Strollers intended to be used at a jogging rate are called “jogging strollers.” Some products can be used as strollers and carriages (convertible carriages/strollers). Convertible carriages or strollers are intended to be converted by the owner to be used as a carriage or a stroller. Some strollers incorporate automatic or assisted folding and unfolding mechanisms. All of these carriages and strollers fall within the scope of ASTM F833-13b.

The majority of carriages/strollers are produced and/or marketed by juvenile product manufacturers and distributors. Currently, there are 85 known suppliers of carriages/strollers to the U.S. market. Thirty-four are domestic manufacturers, 36 are domestic importers, and four are domestic firms with unknown supply sources. In addition, 10 foreign firms supply strollers to the U.S. market: Seven foreign manufacturers, one firm that imports products from foreign companies and distributes them from outside of the United States, one foreign retailer that ships directly to the United States, and one firm with an unknown supply source. There is an additional manufacturer whose size and location we could not determine.

According to a 2005 survey conducted by the American Baby Group ( 2006 Baby Products Tracking Study ), nearly all new mothers (99 percent) own at least one stroller. Applying this information to Centers for Disease Control and Prevention (CDC) birth data indicates that nearly 4 million strollers are owned by new mothers. Approximately 26 percent of those strollers were handed down or purchased secondhand, according to the 2006 Baby Products Tracking Study. Thus, about 74 percent of strollers were acquired new, and approximately 3 million strollers are sold to households annually (.99 × .74 × 4 million births per year). Strollers can cost between $20 to $700, depending upon the type and brand of stroller. On average, umbrella strollers tend to be the least expensive (around $25-$50 for the least costly versions); and most other strollers cost around $150-$300, with many carriages, travel systems, and jogging stroller costs running in the $500-$700 range.

The preamble to the NPR summarized the incident data reported to the Commission from January 1, 2008 through December 31, 2012, involving strollers. 78 FR 29281. In the NPR CPSC's Directorate for Epidemiology staff identified four stroller-related fatalities. In addition, 1,203 stroller-related nonfatal incidents, 359 of which resulted in injuries, were reported during that time period.

The hazard patterns identified in the NPR included issues with wheels, parking brakes, lock mechanisms, restraints, hinges, structural integrity, stability/tip-over, clearance, car seat attachment, canopies, handlebars, seats, sharp points or edges, trays, and unspecified or miscellaneous problems. Since the NPR, 90 new incidents related to carriages and strollers were reported to the Commission between January 1, 2013 and June 30, 2013; these incidents reportedly occurred between January 1, 2008 and June 30, 2013. There were no new fatal incidents reported. Out of the 90 new incidents, 32 stroller-related, nonfatal injuries were reported. Thus, the total number of incidents reported from January 1, 2008 through June 30, 2013, increased to 1,297 incidents, including 4 fatalities, and 391 injuries.

The hazard patterns identified among the 90 new incidents were similar to the ones identified in the NPR. Wheel problems accounted for 25 of the 90 new incidents, which resulted in six injuries. Lock mechanical failures resulted in 11 incidents, causing five injuries. Ten incidents, resulting in three injuries, arose from stability issues. Restraints were associated with two injuries and eight noninjury incidents.

Of the 90 new incidents, four incidents required hospitalization. Two incidents resulted in finger amputations, one that occurred when a child's finger got caught in the folding hinge; the second finger amputation occurred when a stroller collapsed. The third hospitalization involved a child unbuckling the restraints, attempting to leave the stroller, and getting caught on the extended rivet used to latch the folded stroller; this incident caused a laceration to the crotch area. The fourth hospitalization resulted from a stroller rolling off a train platform and falling onto the tracks with the child in the stroller, causing a cut on the child's forehead.

The NPR also noted 78 reported stroller incidents that involved children older than 4 years of age and adults. Out of the 78 incidents, 72 involved victims between 17 and 64 years of age. Almost all of the incidents (74 out of 78) resulted in injuries, mostly to the fingers. Six new incidents were reported from January 1, 2013 to June 30, 2013, for a total of 84 stroller incidents. Based on the narratives provided, all six new incidents involved children older than 4 years of age or adults, and the six incidents each resulted in finger injuries.

ASTM first published a consumer product safety standard for carriages and strollers in 1983. ASTM F833, “Standard Consumer Safety Performance Specification for Carriages and Strollers,” established safety performance requirements, test methods, and labeling requirements to minimize the hazards to children presented by carriages and strollers. ASTM F833 has been revised more than 20 times. The current standard, ASTM F833-13b, was approved on November 1, 2013.

In the NPR, the Commission proposed to incorporate ASTM F833-13, which addressed many of the hazards patterns identified for strollers. Among other requirements, ASTM F833-13 provided:

• An improved test method for the parking brake requirement;

• a new requirement and test method to address head entrapment hazards associated with car seats on a stroller (combination unit);

• a new requirement, test method, and warnings to address wheel and swivel assemblies' detachments;

• an improved test method for latching and locking mechanisms;

• a new requirement and test method to address the scenario of the child releasing the buckle of the restraint system and a clarification on the buckle closing system;

• a new requirement and test method to address pinching, shearing, and scissoring at the saddle hinge link on 3D fold strollers;

• a new requirement and test method to address pinching, shearing, and scissoring at the canopy hinges;

• an improved requirement and test method to address stability issues by taking into account multiple seats facing different directions, such as rotating seats;

• a new requirement and test method to address a strangulation hazard associated with cords and straps within the occupant space; and

• warning label clarifications.

In the NPR, the Commission also proposed a performance requirement and test method to address scissoring, shearing, and pinching hazards associated with 2D fold strollers, which were already required for 3D fold strollers. The Commission noted that hinge issues caused the highest injury rate of any stroller hazard category (75 incidents, resulting in 72 injuries). Most of the hinge-related injuries resulted from scissoring, pinching, or shearing at the hinge link of 2D and 3D fold strollers. Most of the incidents occurred when a caregiver was unfolding the stroller for use and the child was climbing into the stroller. Reported injuries involved pinched, lacerated, or amputated fingers or arms, including one hospitalization for reattachment of a finger. For testing of the 2D fold stroller and convertible carriage/strollers, the Commission proposed a test within an access zone based on the incident data and the anthropometric dimensions of a child occupant. The Commission also proposed a test method to test the frame folding action of a stroller while the stroller is moved from the completely folded to the completely erect position and from the partially folded position to the fully erect and locked position (travel distance calculation).

ASTM adopted the performance requirement and test method proposed by the Commission in a subsequent version of the ASTM standard, ASTM F833-13a, to address scissoring, shearing, and pinching hazards associated with 2D fold strollers. ASTM approved ASTM F833-13a on September 15, 2013. On November 1, 2013, ASTM approved the current version of the standard, ASTM F833-13b, which adopts the performance requirement and test method for 2D fold strollers, with a modification to the travel distance calculation to test for scissoring, shearing, and pinching.

In this rule, the Commission incorporates by reference ASTM F833-13b because the Commission's proposed modifications in the NPR have been adopted in ASTM F833-13b, including the requirements and test methods for 2D fold strollers to address hazards associated with scissoring, shearing, and pinching. Specifically, ASTM F833-13b provides a definition of a “2D fold stroller” as a stroller that folds the handlebars and leg tubes only in the front-to-back (or back-to-front) direction. To address the 2D fold stroller hazards, ASTM F833-13b requires the frame folding action of a 2D fold stroller and convertible carriage/stroller to be designed and constructed to prevent injury from scissoring, shearing, or pinching. Scissoring, shearing, or pinching that may cause injury exists when the edges of the rigid parts admit a 0.210-in (5.33-mm) diameter probe but do not admit a 0.375-in (9.53-mm) diameter probe when tested. However, units with a removable seat that prevents the complete folding of unit when still attached are exempt from this requirement.

ASTM F833-13b also provides a test method for 2D frame strollers to address folding scissoring, shearing, and pinching. In the NPR, the Commission proposed a test method for scissoring, shearing, and pinching hazards that may occur while moving the stroller from a completely folded and partially folded position to the fully erect and locked position. The test proposed in the NPR calculated the travel distance based on the distance between front and rear wheels in an open position and in a closed position. ASTM F833-13b modified the travel distance calculation for the test. The modified test shows the travel distance based on the distance between front and rear wheels only in an open position. ASTM's rationale for the test explains that products are evaluated for the last 1/3 of travel for a predefined access zone because the last 1/3 of travel is considered the most hazardous condition, where a seated child's hand may be vulnerable to scissoring, shearing, and pinching within the access zone while the caregiver is preoccupied with the final stages of erecting the stroller.

CPSC staff compared both methods of the calculation, using various strollers, including strollers involved in incidents. Although in certain strollers the total amount of travel distance to be tested would be less than the travel distance proposed in the NPR, CPSC staff's review showed that the revised test method would be less burdensome and would provide an equal degree of safety as the travel distance calculation proposed in the NPR. According to CPSC staff, under the revised travel distance calculation, the most critical part of the frame folding associated with the incidents will be tested for scissoring, shearing, or pinching. Because the revised test is simpler to use, and because the reduction in travel distance does not make the test less effective, the Commission incorporates by reference ASTM F833-13b with the revised travel distance calculation.

The Commission received six comments from manufacturers, consumer advocacy groups, and trade associations in response to the NPR. A summary of each comment topic and response is provided. In general, all of the commenters support the mandatory standard for carriages and strollers.

Comment: One manufacturer recommended simplifying the test method that was included in the NPR, as outlined in section 7.18.2 for units where the front and rear wheels move toward each other during folding, to address scissoring, shearing, and pinching hazards for 2D frame fold strollers. The commenter proposed determining the starting point for the stroller test by beginning at 2/3 the distance between the front and rear wheel axles in an open position of the stroller. The commenter stated that the ASTM subcommittee was working to include this starting point definition in the next revision and requested that the Commission review and adopt the change to the test method once the requirement is approved by the ASTM subcommittee.

Response: ASTM has revised the travel distance calculation in ASTM F833-13b. CPSC staff compared the travel distance calculation test proposed in the NPR and the modified test in ASTM F833-13b, using various strollers, including certain incident strollers. CPSC staff's review showed that the revised test is simpler, but the revised test will still test the most critical part of the frame folding associated with the incidents. Accordingly, the Commission will adopt ASTM F833-13b with the revised travel distance calculation because the hazards identified by CPSC staff (scissoring, shearing, and pinching hazards in 2D fold strollers) will be addressed adequately by the test in ASTM F833-13b.

Comment: A commenter suggested an exemption to the 2D fold stroller test procedure, if there is a cover over the hinge that is within the access zone; for example, a stroller hinge that has a cover over the top and sides of the hinge, but the bottom is left open to allow the frame members to rotate during folding. The only way to access the hinge would be to come up from underneath or behind through the rear of the stroller, which would not be possible if a child is sitting in the stroller or standing on the side of the stroller. According to the commenter, the ASTM subcommittee is currently reviewing an additional requirement to assess at what point a covering on a hinge is sufficient protection from the 2D frame fold pinch hazard. The commenter requested that the Commission review and adopt the additional requirement once the additional requirement is approved by the ASTM subcommittee.

Response: As discussed in the preamble, ASTM 833-13b now addresses hazards associated with frame fold hinges for both 2D fold strollers and 3D fold strollers, regardless of the direction of entry, to reduce the risk of finger injury to a child who is sitting or is about to sit in a stroller. CPSC staff believes that there are many factors, including the size, shape, and material properties of the cover that may hinder the cover's effectiveness. Without more information about protective covers and how they would be used, the Commission will not provide an exemption for such covers without further review and testing. However, if ASTM subsequently publishes a standard to include a protective cover exemption, ASTM can notify the Commission of the revision, and the Commission would consider the revision at that time.

Comment: A commenter suggested that the Commission adopt the combined braking and stability test that Consumer Reports uses in its testing. The commenter stated that the test evaluates both brake efficacy and stability in various orientations on an incline of 20°—as opposed to 12°. In addition, the commenter states that the brake standard should assess how easy it is to engage the brake, and reliably tell if the brake is engaged.

Response: The parking brake requirements were improved significantly in the ASTM F833-13 version of the standard to approximate the force that is applied to the parking brake, if the 12° inclined plane was increased to 20°. ASTM F833-13 also included an improved requirement and test method for multiple seats facing different directions, such as rotating seats, to address stability issues. These requirements are included in ASTM F833-13b. Therefore, the Commission finds that the requirements in ASTM F833-13b are adequate to address the hazards associated with parking brakes and stability issues and do not require additional requirements at this time.

Comment: Two commenters suggested that the Commission adopt the Irregular Surface Test in EN 1888:2012. The commenters stated that the irregular surface test is a durability test that evaluates the strollers for the expected lifetime of the product.

Response: ASTM F833-13 included improved parking brake, stability, wheel detachment, and locking mechanism requirements that address the hazards associated with the structural issues identified in the incident data. These requirements are included in ASTM F833-13b. CPSC staff's review of fatigue tests, such as the irregular surface test, indicates that such tests are time-consuming (and costly) and that tests with lower repetitions and higher weights/forces yield substantially similar results. Accordingly, the Commission will not require the irregular surface test at this time.

Comment: One commenter recommended that the standard's passive containment/foot opening test method be augmented with a requirement that any adjustable part, such as an adjustable grab bar or a car seat adapter that remains in the stroller, be tested in all possible use positions.

Response: The Commission agrees that the test for passive containment/foot opening should be improved. An adjustable (or multi-positional) grab bar can adjust to suit the height of the child to increase comfort while holding the bar. However, adjustable grab bars may be left in an unsafe position, resulting in a potentially fatal head entrapment between the grab bar and the seat because the consumer may have difficulty discerning visually the difference between certain positions of the grab bar, such as the car seat position and the occupant-use position. CPSC staff is aware of earlier model year strollers that had adjustable grab bars, as described by the commenter. Of the four stroller-related fatalities from January 1, 2008 through December 31, 2012, one incident involved a 5-month-old infant whose head became entrapped between the seat and tray. Therefore, the Commission believes that the opening between the seat and the tray or the seat and grab bar could lead to a potentially fatal head entrapment hazard.

Currently, the test method for passive containment/foot opening in ASTM F833-13b provides under 7.12 Passive Containment/Foot Opening Test Method the following steps: Secure the front wheels of the unit in their normal standing position so that the unit cannot move forward. Attach the tray(s) or grab bar(s) in the position that creates the bounded opening(s). Per the manufacturer's instructions, position any adjustable features (that is, calf supports, foot rests, etc.) that may affect the bounded opening(s) to create the minimum opening(s) size.

If the head probe fails to pass completely through the bounded opening, the following steps are required: If necessary, reattach/reposition tray(s) grab bar(s) to the manufacturer's recommended use position, then perform the torso probe test per 7.12.4. Per the manufacturer's instructions, position any adjustable features (that is, calf supports, foot rests, etc.) that may affect the bounded opening(s), to create the maximum opening(s) size.

To prevent head entrapment hazards, the current test under ASTM F833-13b requires the trays or grab bar to be in the manufacturer-recommended use position. This requirement specifies a minimum opening created by the grab bar or tray and foot rest. However, this test may not always capture a hazardous head entrapment opening between an adjustable grab bar and seat that could occur if the grab bar were improperly positioned. For example, a hazardous opening that is larger than the minimum opening may be created by the grab bar and foot rest configuration.

Accordingly, the Commission revises the test method for passive containment/foot opening as follows: Secure the front wheels of the unit in their normal standing position so that the unit cannot move forward. Attach the tray(s) or grab bar(s) in the position that creates the bounded opening(s). Position any adjustable features (that is, grab bar, calf supports, foot rests, etc.) that may affect the bounded opening(s) to create an opening(s) size that is most likely to cause failure.

If the head probe fails to pass completely through the bounded opening, the following steps are required: If necessary, reattach/reposition tray(s) grab bar(s), then perform the torso probe test per 7.12.4. Position any adjustable features (that is, grab bar, calf supports, foot rests, etc.) that may affect the bounded opening(s), to create the opening(s) size that is most likely to cause failure.

The revised wording: “most likely to cause failure” requires the tester to place the adjustable feature, such as a grab bar, if possible, in a position that creates a hazardous opening, thereby causing the stroller to fail, irrespective of the manufacturer's instructions or the manufacturer's use position. The test is based on an evaluation of the bounded opening(s) that is/are most likely to create an entrapment hazard and should address the potential for entrapment hazards for multi-positional or adjustable grab bars in strollers.

The commenter also recommended that a car seat adapter that can remain in the stroller be tested for head entrapment. Currently, the Commission is not aware of a car seat adapter that is intended to remain installed in the stroller when the car seat is not used; and the Commission does not have any additional information or data to recommend additional requirements for car seat adapters at this time. However, this issue may be raised in an ASTM subcommittee meeting for further review and discussion.

Comment: Several comments addressed the effective date of the proposed rule. One commenter supported the proposed 18-month effective date. A second commenter asked the Commission to take a careful look at how much time is needed to bring carriages and strollers into compliance and to make the new rule effective on the earliest practicable date. A third commenter suggested a 12-month effective date. The commenter stated that, given the extended length of time that it took for both the voluntary standard and the proposed rule to reach this point, consumers should not have to wait until late 2015 to see products that meet the standard.

Response: In the NPR, the Commission noted that there were significant revisions to the ASTM standard in ASTM F833-13 requiring many modifications to carriages and strollers. Due to the complexity of stroller designs, and to allow time for manufacturers to come into compliance, the Commission proposed an 18-month effective date. The new performance requirements and test methods adopted in ASTM 833-13 and ASTM 833-13b are extensive and require manufacturers to make fundamental changes to carriages and strollers ( i.e., latching mechanism, parking brakes, static load, restraining system, passive containment/foot openings, wheel and swivel assemblies, hinges, and stability/tip over.) Although these requirements were approved in ASTM 833-13 in April, 2013, after the NPR was published, ASTM revised the standard, ASTM 833-13b, on November 1, 2013, to address the scissoring, shearing, and pinching hazards in 2D fold strollers. Now, in the final rule, the Commission requires an additional modification to address head entrapment issues. All of these requirements warrant additional time to allow manufacturers to come into full compliance with the mandatory standard. The Commission believes that 18 months is a reasonable amount of time for manufacturers who will need to redesign products, test new prototype products, and then retool their production processes to meet the considerable modifications that were made in ASTM F833-13 and ASTM F833-13b, plus the additional modification to the passive containment/foot opening test method in the final rule. Moreover, 18 months will reduce the impact on the firms that have product lines that largely or exclusively focus on strollers and stroller accessories. A longer effective date reduces the impact on firms in two ways. First, firms are less likely to experience a lapse in production, which could result if they are unable to comply within the required timeframe. Second, firms could spread costs over a longer time period. For these reasons, the standard for carriages and strollers will become effective 18 months after publication of the final rule.

Comment: Two commenters stated that products that are manufactured after the effective date of the rule should be marked clearly so that consumers can easily identify products that meet the mandatory standard.

Response: A code mark or other means that identifies the date (month and year at a minimum) of manufacture is already required to be on the product under ASTM F833-13b. In addition, a final rule implementing sections 14(a)(2) and 14(i)(2) of the Consumer Product Safety Act (CPSA), as amended by the CPSIA, Testing and Labeling Pertaining to Product Certification, 16 CFR part 1107 (the 1107 rule), became effective on February 13, 2013. Under the 1107 rule, a manufacturer or importer may voluntarily label a certified compliant product: “Meets CPSC Safety Requirements.” At this time, the Commission will not require additional markings because ASTM F833-13b already requires the date of manufacture on each product and retail package, and producers may label compliant products as such under the 1107 rule.

Comment: One commenter suggested that the Commission require a five-point harness for all strollers and carriages for improved protection to ensure that the child does not move into an unsafe position on his own or due to the stroller being jarred. This commenter also suggested that the Commission look for feasible means of requiring an alert mechanism to indicate whether the harness restraint system is secured properly.

Response: Although a five-point harness system may provide extra protection if a stroller tips over, CPSC staff's review of incident data did not demonstrate that such a system would result in a significant improvement in occupant safety beyond a three-point harness. Moreover, the recent changes to prevent stroller tip over that have been added to ASTM F833-13 and adopted in ASTM F833-13b, such as the new wheel-detachment requirements, should mitigate the likelihood of tip-over incidents. Accordingly, at this time, the Commission will not require a five-point harness in the standard. In addition, the Commission has insufficient information regarding whether an alert mechanism could be implemented without significantly raising the cost of a stroller, or whether such a system would be effective in reducing incidents involving restraints. However, this issue may be raised for further review and discussion in an ASTM subcommittee meeting.

Comment: To emphasize the risk of entrapment or suffocation to children falling asleep in strollers and other infant products not intended for overnight sleep (but where children often fall asleep), one commenter recommended changing the wording in section 8.2.2 of the standard, which currently states: “Do not leave child unattended” to state instead: “Children have become entrapped or suffocated while sleeping in strollers. Never leave a sleeping child unattended. Move to a crib or safe sleep surface.”

Response: The current wording advises the caregiver to attend to the child whether or not he/she is sleeping, thus providing a more generic warning. In most of the incidents where children were reportedly sleeping, the caregiver was also present. CPSC staff's review of the incident data shows that in one of the fatal incidents, a child was left sleeping in the stroller and was later found entrapped between the seat and tray. In another fatal incident, a child was left sleeping in the infant carrier that was attached to the stroller and found entrapped between the stroller handlebar and foot end of the car seat. The Commission reiterates that children should not be left unattended whether they are sleeping or not. However, the Commission believes that products in which children often fall asleep, such as strollers and hand-held carriers, could benefit from a harmonized and well-designed warning label on the product to educate consumers to take proper action. Accordingly, the Commission would support CPSC staff's participation in a cross-product ad hoc working group; and should the need arise, the Commission will consider future action, once such a warning label is developed.

Comment: Another commenter recommended changing the current wording in section 8.2.2 of ASTM F833-13 from: “The product shall have the following warning statements . . .” to: “The product shall have the following warning statements that address . . .” to provide additional flexibility for manufacturers to alter warnings.

Response: The warning statements in sections 8.2.2.2, 8.2.2.3, and 8.2.2.4 already include a provision for manufacturers to insert their own words to describe their restraint system or product-specific instructions. The suggestion would only affect section 8.2.2.1, which includes the warning statement: “Never leave child unattended.” The commenter stated that a simple change in wording to: “Never leave your child unattended” would not be allowed under 8.2.2. The Commission does not believe that a change to the warnings is warranted, given that the requested word changes would not necessarily increase the effectiveness of the warning. However, this issue may be raised for further review and discussion in a future ASTM subcommittee meeting.

The CPSC is incorporating by reference ASTM F833-13b because the Commission's proposed modifications in the NPR have been adopted in ASTM F833-13b, including requirements and test methods to address scissoring, shearing, and pinching hazards associated with 2D fold strollers. However, the Commission is requiring an additional modification to the passive containment/foot opening test method in ASTM F833-13b, to address head entrapment hazards associated with multi-positional/adjustable grab bars. Specifically, the test method for passive containment/foot opening is revised as follows:

(a) 7.12.1 Secure the front wheels of the unit in their normal standing position so that the unit cannot move forward. Attach the tray(s) or grab bar(s) in the position that creates the bounded opening(s). Position any adjustable features (that is, grab bar, calf supports, foot rests, etc.) that may affect the bounded opening(s) to create an opening(s) size that is most likely to cause failure; and

(b) 7.12.3 If necessary, reattach/reposition tray(s) grab bar(s), then perform the torso probe test per 7.12.4. Position any adjustable features (that is, grab bar, calf supports, foot rests, etc.) that may affect the bounded opening(s), to create the opening(s) size that is most likely to cause failure.

The Administrative Procedure Act (APA) generally requires that the effective date of the rule be at least 30 days after publication of the final rule. 5 U.S.C. 553(d). The safety standard for carriages and strollers will become effective 18 months after publication of a final rule in the Federal Register .

The Regulatory Flexibility Act (RFA), 5 U.S.C. 601-612, requires agencies to consider the impact of proposed and final rules on small entities, including small businesses. Section 604 of the RFA requires that the Commission prepare a final regulatory flexibility analysis when promulgating final rules, unless the head of the agency certifies that the rule will not have a significant impact on a substantial number of small entities. The final regulatory flexibility analysis must describe the impact of the proposed rule on small entities and identify any alternatives that may reduce the impact. Specifically, the final regulatory flexibility analysis must contain:

• A succinct statement of the objectives of, and legal basis for, the rule;

• a summary of the significant issues raised by public comments in response to the initial regulatory flexibility analysis, a summary of the assessment of the agency of such issues, and a statement of any changes made in the proposed rule as a result of such comments;

• a description of, and, where feasible, an estimate of, the number of small entities to which the rule will apply;

• a description of the projected reporting, recordkeeping, and other compliance requirements of the rule, including an estimate of the classes of small entities subject to the requirements and the type of professional skills necessary for the preparation of reports or records; and

• a description of the steps the agency has taken to reduce the significant economic impact on small entities, consistent with the stated objectives of applicable statutes, including a statement of the factual, policy, and legal reasons for selecting the alternative adopted in the rule, and why each one of the other significant alternatives to the rule considered by the agency, which affect the impact on small entities, was rejected.

The Danny Keysar Child Product Safety Notification Act, section 104 of the CPSIA, requires the CPSC to promulgate mandatory standards that are substantially the same as, or more stringent than, the voluntary standard for a durable infant or toddler product. CPSC staff worked closely with ASTM stakeholders to develop the new requirements and test procedures that have been incorporated into ASTM F833-13b, which together form the basis for the mandatory standard.

There are two federal rules that would impact the stroller mandatory standard: (1) Testing and Labeling Pertaining to Product Certification (16 CFR part 1107); and (2) Requirements Pertaining to Third Party Conformity Assessment Bodies (16 CFR part 1112).

The testing and labeling rule (16 CFR part 1107) requires that manufacturers of children's products subject to product safety rules, certify, based on third party testing, that their children's products comply with all applicable safety rules. Because strollers will be subject to a mandatory rule, they will also be subject to the third party testing requirements when the stroller rule becomes effective.

In addition, the 1107 rule requires the third party testing of children's products to be conducted by CPSC-accredited laboratories. Section 14(a)(2) of the Consumer Product Safety Act (CPSA) requires the Commission to publish a notice of requirements (NOR) for the accreditation of third party conformity assessment bodies ( i.e., testing laboratories) to test for conformance with each children's product safety rule. These NORs are set forth in 16 CFR part 1112.

There are approximately 85 firms that currently supply carriages/strollers in the United States. Under U.S. Small Business Administration (SBA) guidelines, a manufacturer of strollers is considered small if the manufacturer has 500 or fewer employees, and importers and wholesalers are considered small if they have 100 or fewer employees. Based on these guidelines, about 55 are small firms—26 domestic manufacturers, 26 domestic importers, and three firms with unknown supply sources. There may be additional unknown small stroller suppliers operating in the U.S. market.

The expected impact of the final rule will differ based on whether a firm's strollers are already compliant with ASTM F833-11, the voluntary standard in effect prior to ASTM F833-13. In general, firms whose strollers meet the requirements of ASTM F833-11 are likely to continue to comply with the voluntary standard as new versions are published. Many of these firms are active in the ASTM standard development process, and compliance with the voluntary standard is part of an established business practice. Firms supplying strollers that comply with ASTM F833-11 likely would also comply with F833-13b before the final rule becomes effective.

ASTM F833-13b requirements could require product redesign for at least some strollers that are not compliant with ASTM F833-11 (eight of 26 small domestic manufacturers). Most of the redesign and retooling costs are associated with meeting the requirements of the standard. A redesign would be minor if most of the changes involve adding straps and fasteners or using different mesh or fabric. However, a redesign could be more significant if changes to the frame are required. Due to the complexity of carriages and strollers, a complete redesign of these products, including engineering time, prototype development, tooling, and other incidental costs, could exceed $1 million for the most complex stroller models. Industry sources, including the Juvenile Products Manufacturers Association (JPMA) note that new tooling alone could exceed $300,000 per product model. However, costs and development time are likely to vary widely across firms. Companies with substantial experience in manufacturing strollers should be able to complete redesigns more cost effectively than firms with less experience. Additionally, firms with numerous stroller models may experience lower costs because stroller models could be redesigned as a group.

The modification to the passive containment/foot opening test method may or may not have any impact on small manufacturers because CPSC staff could not identify any strollers on the U.S. market that have adjustable grab bars. Therefore, the direct impact on manufacturers whose products are expected to meet the requirements of ASTM F833-13b (18 of 26 small domestic manufacturers) is not expected to be significant, although it is possible that there are unknown stroller suppliers with products that might be affected.

The 18-month effective date may mitigate the impact on small manufacturers because such firms are less likely to experience a lapse in production, which could result if these firms are unable to comply within the required timeframe, and costs may be spread over a longer period.

In addition, there are indirect impacts. Once the new requirements become effective, all manufacturers will be subject to the additional costs associated with third party testing and certification requirements triggered by the final rule. Those additional third party testing costs will pertain to any physical and mechanical test requirements specified in the stroller final rule; lead and phthalates testing is already required. Third party testing costs could as much as $800-$1,000 per model sample.

On average, each small domestic manufacturer supplies seven different models of strollers to the U.S. market annually. Therefore, if third party testing were conducted every year on a single sample for each model, third party testing costs for each manufacturer would be about $5,600-$7,000 annually. Based on a review of firm revenues, the impact of third party testing to ASTM F833-13b is unlikely to be significant if only one stroller sample per model is required. However, the economic impact could be significant for some small firms, if as few as two or three samples per model are required to meet the testing requirements.

In the absence of regulation, small importers of strollers currently in compliance with F833-11 (13 of 26 small domestic importers) would likely continue to comply with the standard as it evolves, including the final mandatory standard. Any increase in production costs experienced by their suppliers may be passed on to them. However, these costs are not likely to be significant, given that CPSC staff could not identify any strollers on the U.S. market that have adjustable grab bars requiring modification.

Small importers of strollers would need to find an alternate source if their existing supplier does not come into compliance with the requirements of ASTM F833-13b. Thirteen importers of strollers currently may not be in compliance with ASTM F833-11. Some importers may discontinue the carriage/stroller product line altogether. The impact of such a decision could be mitigated by replacing the noncompliant stroller with a compliant stroller or by deciding to import an alternative product. However, some of these firms have few or no other products in their product line. Because many of these firms have low sales revenues and limited product lines apart from strollers and stroller accessories, it is possible that the final rule could have a significant impact on one or more importers. The 18-month effective date may mitigate the impact because such firms are less likely to experience a lapse in obtaining compliant strollers, which could result if they are unable to comply within the required timeframe; and costs may be spread over a longer time period.

All importers are also subject to third party testing and certification requirements. Consequently, importers will experience costs similar to those for manufacturers, if their supplying foreign firm(s) does not perform third party testing. The resulting costs could have a significant impact on a few small importers who must perform the testing themselves, even if only one sample per model were required.

One alternative that could reduce the impact on small entities would be to make the voluntary standard mandatory, with no further modifications. However, given that CPSC staff could not identify any strollers on the U.S. market that currently would be impacted by the modification to the passive containment/foot opening test method, this reduction may be insignificant. In addition, incorporating the voluntary standard without modifications would not substantially benefit firms with noncompliant products because their strollers might still require redesign. The 18-month effective date may mitigate the impact because suppliers will have additional time to modify and/or develop compliant strollers and spread the associated costs over a longer period of time. However, the Commission could opt to set a later effective date, which may reduce further the impact on affected firms. A third alternative would be to set an earlier effective date. However, setting an earlier effective date could increase the impact of the rule on small entities, particularly those with limited product lines and low sales revenues.

The Commission's regulations address whether we are required to prepare an environmental assessment or an environmental impact statement. These regulations provide a categorical exclusion for certain CPSC actions that normally have “little or no potential for affecting the human environment.” Among those actions are rules or safety standards for consumer products. 16 CFR 1021.5(c)(1). The rule falls within the categorical exclusion.

This 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 (44 U.S.C. 3501-3521). The preamble to the proposed rule (77 FR 29286) discussed the information collection burden of the proposed rule and specifically requested comments on the accuracy of our estimates. Sections 8 and 9 of ASTM F833-13b contain requirements for marking, labeling, and instructional literature. These requirements fall within the definition of “collection of information,” as defined in 44 U.S.C. 3502(3).

OMB has assigned control number 3041-0164 to this information collection. The Commission did not receive any comments regarding the information collection burden of this proposal. However, the final rule makes modifications regarding the information collection burden because the number of estimated manufacturers subject to the information collection burden is now estimated at 85 manufacturers rather than the 86 manufacturers initially estimated in the proposed rule due to firms entering and exiting the U.S. stroller market. Additionally, the average number of stroller models supplied by all of the firms has increased from six to eight models.

Accordingly, the estimated burden of this collection of information is modified, as follows:

Section 26(a) of the CPSA, 15 U.S.C. 2075(a), provides that where a consumer product safety standard is in effect and applies to a product, no state or political subdivision of a state may either establish or continue in effect a requirement dealing with the same risk of injury unless the state requirement is identical to the federal standard. Section 26(c) of the CPSA also provides that states or political subdivisions of states may apply to the Commission for an exemption from this preemption under certain circumstances. Section 104(b) of the CPSIA refers to the rules to be issued under that section as “consumer product safety rules,” thus, implying that the preemptive effect of section 26(a) of the CPSA would apply. Therefore, a rule issued under section 104 of the CPSIA will invoke the preemptive effect of section 26(a) of the CPSA when it becomes effective.

Section 14(a) of the CPSA imposes the requirement 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). Section 14(a)(2) of the CPSA requires that certification of children's products subject to a children's product safety rule be based on testing conducted by a CPSC-accepted third party conformity assessment body. Section 14(a)(3) of the CPSA requires the Commission to publish a NOR for the accreditation of third party conformity assessment bodies (or laboratories) to assess conformity with a children's product safety rule to which a children's product is subject. The “Safety Standard for Carriages and Strollers,” to be codified at 16 CFR part 1227, is a children's product safety rule that requires the issuance of an NOR.

The Commission published a final rule, Requirements Pertaining to Third Party Conformity Assessment Bodies, 78 FR 15836 (March 12, 2013), which is codified at 16 CFR part 1112 (referred to here as part 1112). This rule became effective on June 10, 2013. Part 1112 establishes requirements for accreditation of third party conformity assessment bodies (or laboratories) to test for conformance with a children's product safety rule in accordance with Section 14(a)(2) of the CPSA. Part 1112 also codifies a list of all of the NORs that the CPSC had published at the time part 1112 was issued. All NORs issued after the Commission published part 1112, such as the standard for carriages and strollers, require the Commission to amend part 1112. Accordingly, this rule amends part 1112 to include the standard for carriages and strollers in the list with the other children's product safety rules for which the CPSC has issued NORs.

Laboratories applying for acceptance as a CPSC-accepted third party conformity assessment body to test to the new standard for carriages and strollers would be required to meet the third party conformity assessment body accreditation requirements in 16 CFR part 1112, Requirements Pertaining to Third Party Conformity Assessment Bodies. When a laboratory meets the requirements as a CPSC-accepted third party conformity assessment body, the laboratory can apply to the CPSC to have 16 CFR part 1227, Safety Standard for Carriages and Strollers, included in its scope of accreditation of CPSC safety rules listed for the laboratory on the CPSC Web site at: www.cpsc.gov/labsearch.

CPSC staff conducted an analysis of the potential impacts on small entities of the proposed rule establishing accreditation requirements, as required by the Regulatory Flexibility Act, and the agency prepared an Initial Regulatory Flexibility Analysis (IRFA). Requirements Pertaining to Third Party Conformity Assessment Bodies. 77 FR 31086, 31123-26. Specifically, the NOR for the standard for carriages and strollers would not have a significant adverse impact on small laboratories. Based upon the number of laboratories in the United States that have applied for CPSC acceptance of the accreditation to test for conformance to other juvenile product standards, we expect that only a few laboratories will seek CPSC acceptance of their accreditation to test for conformance with the standard for carriages and strollers. Most of these laboratories already will have been accredited to test for conformance to other juvenile product standards, and the only cost to them would be the cost of adding the standard for carriages and strollers to their scope of accreditation. As a consequence, the Commission certifies that the NOR for the standard for carriages and strollers will not have a significant impact on a substantial number of small entities.

For the reasons discussed in the preamble, the Commission amends Title 16 of the Code of Federal Regulations as follows:

We are adopting an updated EDGAR Filer Manual, Volume I and Volume II. The Filer Manual describes the technical formatting requirements for the preparation and submission of electronic filings through the EDGAR system. 1 It also describes the requirements for filing using EDGARLink Online and the Online Forms/XML Web site.

The revisions to the Filer Manual reflect changes within Volume I entitled EDGAR Filer Manual, Volume I: “General Information,” Version 16 (March 2014) and Volume II entitled EDGAR Filer Manual, Volume II: “EDGAR Filing,” Version 26 (March 2014). The updated manual will be incorporated by reference into the Code of Federal Regulations.

The Filer Manual contains all the technical specifications for filers to submit filings using the EDGAR system. Filers must comply with the applicable provisions of the Filer Manual in order to assure the timely acceptance and processing of filings made in electronic format. 2 Filers may consult the Filer Manual in conjunction with our rules governing mandated electronic filing when preparing documents for electronic submission. 3

The EDGAR system will be upgraded to Release 14.0 on March 3, 2014 and will introduce the following changes: EDGAR will be updated to add new submission form types MA, MA-A, MA/A, MA-I, MA-I/A, and MA-W on the EDGAR Filing Web site. These submission form types can be accessed by selecting the `File Municipal Advisor Forms' link available on the EDGAR Filing Web site. Instructions to file the Municipal Advisor Forms are included in two new sections of Chapter 9 (Preparing and Transmitting Online Submissions) of the “EDGAR Filer Manual, Volume II: EDGAR Filing” to guide filers through the filing process. See Release No. 34-70462  4 for the compliance dates.

Submission form types 8-K, 8-K/A, 10-K, 10-K/A, 10-KT, 10-KT/A, 10-D, 10-D/A, POS AM, 424B1, 424B2, 424B3, 424B4, 424B5, 424B7, and 424B8 will be updated to collect Depositor CIK, Sponsor CIK, ABS Asset Class, and ABS Sub Asset Class information for filings where the primary registrant CIK is designated as an Asset-Backed Securities issuing entity (i.e., entities assigned the Standard Industrial Classification Code 6189).

Submission form types 13F-HR/A will be updated to allow a future date for the “Date denied or on which confidential treatment expired” field.

For EDGARLink Online application, recommended version for Firefox browser is being changed from 3.5 to 17.0 or higher. For all EDGAR Web sites, Microsoft Internet Explorer 7.0 or later is the recommended browser. Additionally, minor documentation only corrections were made to the Chapter 6, Interactive Data, sections 6.5.20 and 6.6.29.

Along with the adoption of the Filer Manual, we are amending Rule 301 of Regulation S-T to provide for the incorporation by reference into the Code of Federal Regulations of today's revisions. This incorporation by reference was approved by the Director of the Federal Register in accordance with 5 U.S.C. 552(a) and 1 CFR Part 51.

You may obtain paper copies of the updated Filer Manual at the following address: Public Reference Room, U.S. Securities and Exchange Commission, 100 F Street NE., Room 1543, Washington, DC 20549, on official business days between the hours of 10:00 a.m. and 3:00 p.m. We will post electronic format copies on the Commission's Web site; the address for the Filer Manual is http://www.sec.gov/info/edgar.shtml .

Since the Filer Manual and the corresponding rule changes relate solely to agency procedures or practice, publication for notice and comment is not required under the Administrative Procedure Act (APA). 5 It follows that the requirements of the Regulatory Flexibility Act  6 do not apply.

The effective date for the updated Filer Manual and the rule amendments is March 10, 2014. In accordance with the APA, 7 we find that there is good cause to establish an effective date less than 30 days after publication of these rules. The EDGAR system upgrade to Release 14.0 is scheduled to become available on March 3, 2014. The Commission believes that establishing an effective date less than 30 days after publication of these rules is necessary to coordinate the effectiveness of the updated Filer Manual with the system upgrade.

We are adopting the amendments to Regulation S-T under Sections 6, 7, 8, 10, and 19(a) of the Securities Act of 1933, 8 Sections 3, 12, 13, 14, 15, 23, and 35A of the Securities Exchange Act of 1934, 9 Section 319 of the Trust Indenture Act of 1939, 10 and Sections 8, 30, 31, and 38 of the Investment Company Act of 1940. 11

In accordance with the foregoing, Title 17, Chapter II of the Code of Federal Regulations is amended as follows:

I. Background

In accordance with section 513(f)(1) of the Federal Food, Drug, and Cosmetic Act (the FD&C Act) (21 U.S.C. 360c(f)(1)), devices that were not in commercial distribution before May 28, 1976 (the date of enactment of the Medical Device Amendments of 1976), generally referred to as postamendments devices, are classified automatically by statute into class III without any FDA rulemaking process. These devices remain in class III and require premarket approval, unless and until the device is classified or reclassified into class I or II, or FDA issues an order finding the device to be substantially equivalent, in accordance with section 513(i), to a predicate device that does not require premarket approval. The Agency determines whether new devices are substantially equivalent to predicate devices by means of premarket notification procedures in section 510(k) of the FD&C Act (21 U.S.C. 360(k)) and part 807 (21 CFR part 807) of the regulations.

Section 513(f)(2) of the FD&C Act, as amended by section 607 of the Food and Drug Administration Safety and Innovation Act (Pub. L. 112-144, July 9, 2012, 126 Stat. 1054), provides two procedures by which a person may request FDA to classify a device under the criteria set forth in section 513(a)(1). Under the first procedure, the person submits a premarket notification under section 510(k) for a device that has not previously been classified and, within 30 days of receiving an order classifying the device into class III under section 513(f)(1), the person requests a classification under section 513(f)(2). Under the second procedure, rather than first submitting a premarket notification under section 510(k) and then a request for classification under the first procedure, the person determines that there is no legally marketed device upon which to base a determination of substantial equivalence and requests a classification under section 513(f)(2). If the person submits a request to classify the device under this second procedure, FDA may decline to undertake the classification request if FDA identifies a legally marketed device that could provide a reasonable basis for review of substantial equivalence with the device or if FDA determines that the device submitted is not of “low-moderate risk” or that general controls would be inadequate to control the risks and special controls to mitigate the risks cannot be developed.

In response to a request to classify a device under either procedure provided by section 513(f)(2) of the FD&C Act, FDA will classify the device by written order within 120 days. This classification will be the initial classification of the device.

In accordance with section 513(f)(1) of the FD&C Act, FDA issued an order on March 19, 2009, classifying the Bio-Seal Lung Biopsy Tract Plug System into class III, because it was not substantially equivalent to a device that was introduced or delivered for introduction into interstate commerce for commercial distribution before May 28, 1976, or a device which was subsequently reclassified into class I or class II. On April 16, 2009, Angiotech submitted a request for classification of the Bio-Seal Lung Biopsy Tract Plug System under section 513(f)(2) of the FD&C Act. The manufacturer recommended that the device be classified into class II (Ref. 1).

In accordance with section 513(f)(2) of the FD&C Act, FDA reviewed the request in order to classify the device under the criteria for classification set forth in section 513(a)(1) of the FD&C Act. FDA classifies devices into class II if general controls by themselves are insufficient to provide reasonable assurance of safety and effectiveness but there is sufficient information to establish special controls to provide reasonable assurance of the safety and effectiveness of the device for its intended use. After review of the information submitted in the request, FDA determined that the device can be classified into class II with the establishment of special controls. FDA believes these special controls will provide reasonable assurance of the safety and effectiveness of the device.

Therefore, on December 19, 2012, FDA issued an order to the requester classifying the device into class II. FDA is codifying the classification of the device by adding 21 CFR 878.4755.

Following the effective date of this final classification order, any firm submitting a premarket notification (510(k)) for an absorbable lung biopsy plug will need to comply with the special controls named in this final order.

The device is assigned the generic name Absorbable Lung Biopsy Plug, and it is identified as a preformed (polymerized) absorbable lung biopsy plug intended to provide accuracy in marking a biopsy location for visualization during surgical resection and closure of pleural punctures associated with percutaneous, transthoracic needle lung biopsies. Upon deployment into the biopsy tract, the plug expands to fill the biopsy void and remains in place until resorbed.

FDA has identified the following risks to health associated specifically with this type of device, as well as the mitigation measures.

FDA believes that the following special controls, in addition to the general controls, address these risks to health and provide reasonable assurance of the safety and effectiveness:

(1) The design characteristics of the device must ensure that the geometry and material composition are consistent with the intended use.

(2) Performance testing must demonstrate deployment as indicated in the accompanying labeling, including the indicated introducer needles, and demonstrate expansion and resorption characteristics in a clinically relevant environment.

(3) In vivo evaluation must demonstrate performance characteristics of the device including the ability of the plug to not prematurely resorb or migrate and the rate of pneumothorax.

(4) Sterility testing must demonstrate the sterility of the device and the effects of the sterilization process on the physical characteristics of the plug.

(5) Shelf-life testing must demonstrate the shelf-life of the device including the physical characteristics of the plug.

(6) The device must be demonstrated to be biocompatible.

(7) Labeling must include a detailed summary of the device-related and procedure-related complications pertinent to the use of the device and appropriate warnings. Labeling must include identification of compatible introducer needles.

Section 510(m) of the FD&C Act provides that FDA may exempt a class II device from the premarket notification requirements under section 510(k) of the FD&C Act if FDA determines that premarket notification is not necessary to provide reasonable assurance of the safety and effectiveness of the device. For this type of device, FDA has determined that premarket notification is necessary to provide reasonable assurance of the safety and effectiveness of the device. Therefore, this device type is not exempt from premarket notification requirements. Persons who intend to market this type of device must submit to FDA a premarket notification, prior to marketing the device, which contains information about the absorbable lung biopsy plug they intend to market.

The Agency has determined under 21 CFR 25.34(b) that this action is of a type that does not individually or cumulatively have a significant effect on the human environment. Therefore, neither an environmental assessment nor an environmental impact statement is required.

This final order establishes special controls that refer to previously approved collections of information found in other FDA regulations. These collections of information are subject to review by the Office of Management and Budget (OMB) under the Paperwork Reduction Act of 1995 (44 U.S.C. 3501-3520). The collections of information in part 807, subpart E regarding premarket notification submissions have been approved under OMB control number 0910-0120, and the collections of information in 21 CFR part 801, regarding labeling have been approved under OMB control number 0910-0485.

The following reference has been placed on display in the Division of Dockets Management (HFA-305), Food and Drug Administration, 5630 Fishers Lane, Rm. 1061, Rockville, MD 20852, and may be seen by interested persons between 9 a.m. and 4 p.m., Monday through Friday, and is available electronically at http://www.regulations.gov.

Therefore, under the Federal Food, Drug, and Cosmetic Act and under authority delegated to the Commissioner of Food and Drugs, 21 CFR part 878 is amended as follows:

Paperwork Reduction Act

The collection of information contained in these regulations has been reviewed and approved by the Office of Management and Budget in accordance with the Paperwork Reduction Act of 1995 (44 U.S.C. 3507(d)) under control number 1545-2252.

The collection of information in these final regulations is in §§ 1.6055-1 and 1.6055-2. The collection of information will be used to determine whether an individual has minimum essential coverage under section 1501(b) of the Patient Protection and Affordable Care Act (26 U.S.C. 5000A(f)). The collection of information is required to comply with the provisions of sections 5000A and 6055 of the Code. The likely respondents are health insurance issuers and carriers, self-insured employers or other sponsors of self-insured group health plans, and governments that provide minimum essential coverage.

An agency may not conduct or sponsor, and a person is not required to respond to, a collection of information unless it displays a valid control number assigned by the Office of Management and Budget.

The burden for the collection of information contained in these final regulations will be reflected in the burden on Form 1095-B or another form that the IRS designates, which will request the information in the final regulations.

Books or records relating to a collection of information must be retained as long as their contents may become material in the administration of any internal revenue law. Generally, tax returns and return information are confidential, as required by section 6103.

This document contains final regulations that amend the Income Tax Regulations (26 CFR part 1) under sections 6055 and 6081 and the Procedure and Administration Regulations (26 CFR part 301) under sections 6011, 6721, and 6722, relating to the requirement for providers of minimum essential coverage (as defined in section 5000A(f)) to report to the IRS certain information about individuals covered by minimum essential coverage and to provide a statement to the individuals. Section 6055 was enacted by section 1502 of the Patient Protection and Affordable Care Act, Public Law 111-148 (124 Stat. 119 (2010)), which together with the Health Care and Education Reconciliation Act of 2010, Public Law 111-152 (124 Stat. 1029 (2010)), is referred to as the Affordable Care Act.

On September 9, 2013, a notice of proposed rulemaking (REG-132455-11) was published in the Federal Register (78 FR 54986). Written comments responding to the proposed regulations were received. A public hearing was held on November 19, 2013. The comments are available for public inspection at www.regulations.gov or on request. After consideration of all the comments, the proposed regulations are adopted as amended by this Treasury decision. These final regulations also include certain nonsubstantive revisions to increase consistency with final regulations issued under section 6056 (TD 9661) contemporaneously with these regulations

The proposed regulations provided that every person that provides minimum essential coverage to an individual during a calendar year must file an information return and a transmittal on forms prescribed by the IRS. Minimum essential coverage is defined in section 5000A(f) and regulations issued under that section.

Commenters suggested that section 6055 reporting should not be required for an individual who may be exempt from the individual shared responsibility payment under section 5000A.

Providers of minimum essential coverage, including employers providing coverage under a self-insured group health plan, may not have the information necessary to determine an individual's exempt status under section 5000A. To ensure complete and accurate reporting, the final regulations provide for section 6055 reporting for all covered individuals.

The proposed regulations provided that reporting is not required for arrangements that provide benefits in addition or as a supplement to a health plan or arrangement that constitutes minimum essential coverage. The preamble to the proposed regulations identified health reimbursement arrangements as supplemental coverage to which this rule may apply. In addition, reporting is not required for coverage that is not minimum essential coverage. The preamble to the proposed regulations noted that no reporting is required for health savings accounts, which are not minimum essential coverage.

A commenter asked whether on-site medical clinics are supplemental benefits for which no reporting is required under this rule. Another commenter asked whether reporting is required for an individual who is covered by Medicare Part B but not Medicare Part A.

Under section 9832(c)(1)(G), coverage at on-site medical clinics are excepted benefits. Section 5000A(f)(3) provides that excepted benefits are not minimum essential coverage. Under section 5000A(f)(1)(A)(i), Medicare Part A but not Medicare Part B is minimum essential coverage. Accordingly, section 6055 reporting is not required for coverage at on-site medical clinics or for Medicare Part B.

Commenters asked whether the supplemental coverage rule applies to wellness programs or to self-insured employer-provided retiree coverage that supplements Medicare benefits. Wellness programs that are an element of other minimum essential coverage (such as wellness programs offering reduced premiums or cost-sharing under a group health plan) do not require separate section 6055 reporting. The final regulations clarify that minimum essential coverage that supplements a primary plan of the same plan sponsor or that supplements government-sponsored coverage (such as Medicare) are supplemental coverage not subject to reporting.

The proposed regulations provided that the plan sponsor is responsible for reporting under section 6055 for a self-insured group health plan and identified the sponsor and reporting entity for various types of self-insured arrangements. In general, the plan sponsor is the entity that establishes or maintains the plan. The proposed regulations provided that the employer is the plan sponsor for self-insured group health plans established or maintained by a single employer and that each participating employer is the plan sponsor for a plan established or maintained by more than one employer other than a multiple employer welfare arrangement. The proposed regulations also provided that, for purposes of identifying the employer, the section 414 employer aggregation rules do not apply. Thus, under the proposed regulations, a self-insured group health plan or arrangement covering employees of employers in a controlled group was treated as sponsored by more than one employer and each employer was required to report for its employees.

Commenters requested that the final regulations allow, but not require, one entity in a controlled group to report under section 6055 for all members of the group. A commenter noted that only one entity within the group may maintain the plan. Other commenters noted that in some controlled groups each entity may keep its own records but other groups may not track the entity to which an employee belongs.

Most employers that sponsor self-insured group health plans are applicable large employer members required to report under both section 6056 and section 6055. As discussed later in this preamble, the final regulations provide that applicable large employer members that are plan sponsors of self-insured group health plans will file a single information return that combines reporting under sections 6055 and 6056. These entities apply the rules under section 6056 for identifying the reporting entities in a controlled group. As stated in the preamble to the proposed regulations, one member of a controlled group may assist the other members by filing returns and furnishing statements on behalf of all members, thus providing administrative flexibility. However, each employer is treated as a plan sponsor separately liable for timely and correct reporting. Employers in controlled groups that are not applicable large employer members (determined after applying the aggregation rules under § 54.4980H-1(a)(16)), and reporting entities (such as issuers) that are not reporting as employers, may report under section 6055 as separate entities, or one entity may report for the group.

A commenter asked that the final regulations clarify that a company may report self-insured group health plan coverage provided to statutory employees, that is, individuals who are not common law employees but are treated as employees under the Code for some purposes. The commenter noted that the employer shared responsibility payment under section 4980H and related information reporting under section 6056 apply to common law and not statutory employees.

Under section 6055, the provider of minimum essential coverage must report for covered individuals. In many cases, the provider is not the employer of the covered individuals. The proposed and final regulations provide that that the plan sponsor of a self-insured group health plan reports under section 6055. Accordingly, the plan sponsor reports under section 6055 for individuals covered by the plan, whether or not the individuals are employees.

In order to reduce the compliance burden on health insurance issuers, the proposed regulations provided that issuers are not required to report under section 6055 on qualified health plans enrolled in through Affordable Insurance Exchanges (Exchanges), also called Marketplaces. Commenters requested that Exchanges also be responsible for section 6055 reporting for coverage obtained through the SHOP.

The final regulations do not require health insurance issuers to report under section 6055 for coverage under individual market qualified health plans purchased through an Exchange because Exchanges must report on this coverage under section 36B(f)(3). Exchanges are not required, however, to report on coverage obtained through the SHOP, therefore issuer reporting of SHOP coverage under section 6055 is necessary.

Pursuant to section 6055(d), the proposed regulations provided that, in general, a government employer that maintains a self-insured group health plan or arrangement may enter into a written agreement with another governmental unit, or an agency or instrumentality of a governmental unit, designating the other governmental unit, agency, or instrumentality as the person responsible for section 6055 reporting. The proposed regulations reserved the definition of agency or instrumentality.

Under the proposed regulations, a government employer included an Indian tribal government (as defined in section 7701(a)(40)) or subdivision of an Indian tribal government (as defined in section 7871(d)). A commenter asked whether a wholly-owned tribal entity formed under tribal and federal law is an agency or instrumentality of a governmental unit. The commenter suggested that it is administratively burdensome for an Indian tribal government (ITG) to determine whether a particular entity qualifies as an agency or instrumentality of an ITG under existing authorities, such as Revenue Ruling 57-128 (1957-1 CB 311), see § 601.601(d), relating to employment taxes.

The final regulations continue to reserve on the definition of agency or instrumentality for purposes of section 6055. Until future guidance is issued that defines that term for purposes of section 6055, in determining whether an entity is an agency or instrumentality of a governmental unit, the entity may make that determination based on a reasonable and good faith interpretation of existing rules relating to agency or instrumentality determinations for other federal tax purposes.

The proposed regulations provided that, in general, a health insurance issuer must report under section 6055 for all insured coverage. However, under the proposed regulations the responsible government department or agency and not the issuer was the reporting entity for coverage under a government-sponsored program provided through a health insurance issuer (such as some Medicaid, Children's Health Insurance Program (CHIP), and Medicare programs). A commenter requested that the final regulations specify that this rule applies to the Medicare Advantage program. The final regulations clarify that issuers do not report coverage under the Medicare Advantage program.

Section 6055 calls for the reporting of several data elements that are not required by taxpayers for preparing their tax returns or by the IRS for tax administration. As part of the effort to minimize the cost and simplify the administrative implementation of reporting under section 6055, the proposed regulations did not require reporting these unnecessary items. For example, the proposed regulations did not require reporting the amount of advance payments of the premium tax credit and cost-sharing reductions or the amount of the premium for employer coverage paid by an employer. Several commenters expressed support for these simplifications, and the final regulations retain them.

The proposed regulations implemented the statutory requirement that the section 6055 information return include the name and TIN for the primary insured or other related person (such as a parent or spouse) who submits the application for coverage, which the proposed regulations called the responsible individual, and for each covered individual. However, the proposed regulations permitted reporting entities to report a date of birth if a TIN is not available for an individual.

Some commenters advised that they do not currently obtain TINs for individuals enrolled in coverage, particularly for dependents, and asserted that the requirement to obtain TINs is burdensome and unnecessary. Commenters suggested that individuals will be reluctant to provide TINs and that no enforcement mechanism such as backup withholding is available. Some commenters expressed concerns about the risk of misuse of TINs and violations of privacy. Commenters requested, in general, that the final regulations allow reporting entities to report only a date of birth in lieu of a TIN for all individuals, or alternatively to provide a TIN only for an employee or other responsible individual and dates of birth for other covered individuals. Other commenters suggested that TIN reporting should be limited to the reporting under section 111 of the Medicaid, Medicare, and SCHIP Extension Act of 2007 (PL 110-173, 121 Stat. 2492), which requires TIN reporting only for individuals age 45 to 64 with coverage based on employment status.

After consideration of the comments, the final regulations retain the rule in the proposed regulations directing reporting entities to provide TINs for all covered individuals and to provide a date of birth only if a TIN is not available after the reporting entity makes reasonable efforts to obtain it. The purpose of information reporting under section 6055 is for individuals to establish, and the IRS to confirm, that the individuals have minimum essential coverage and are not subject to the section 5000A individual responsibility payment. The information on Form 1040 identifying dependents that can be matched with section 6055 reporting is name and TIN. Because many individuals have the same name, the name and TIN combination enable the IRS to identify that a particular individual has minimum essential coverage.

Individuals have a strong incentive to provide a TIN to the reporting entity if one is available to establish that they have coverage qualifying under section 5000A. Without a TIN to enable the IRS to match coverage reported on the Form 1040 with coverage reported on a section 6055 return, individuals will receive correspondence from the IRS asking them to verify coverage. Accordingly, the final regulations allow section 6055 reporting of dates of birth in lieu of TINs only if the reporting entity is informed that an individual has no TIN or the reporting entity is unable to obtain a TIN after making reasonable efforts, as discussed in more detail later in this preamble. Nothing in these final regulations authorizes a reporting entity to terminate coverage if a TIN is not provided. Reporting a date of birth in one year does not eliminate the need to make reasonable efforts to obtain a TIN.

A commenter suggested that requiring TIN reporting for responsible individuals not enrolled in the coverage reported is unnecessary and inconsistent with the statute, which requires reporting a TIN for the “primary insured” and each other covered individual. Under section 6055(b)(1)(B)(iv), the Secretary may direct the reporting of other information. Reporting of TINs for responsible individuals not enrolled in the coverage is helpful for tax administration because it facilitates matching the coverage of individuals reported under section 6055 with individuals for whom the responsible individual claims a personal exemption deduction. However, in response to the comment, the final regulations provide that reporting TINs for responsible individuals not enrolled in the coverage is optional.

Commenters requested that the final regulations include rules on confidentiality and restricting the use of private information by issuers and employers. A commenter suggested that the final regulations include rules similar to 45 CFR 155.260 and 45 CFR 155.715, which restrict the use of confidential information by Exchanges. The cited regulations under 45 CFR are issued under the authority of the Department of Health and Human Services (HHS) to oversee and regulate the operation of Exchanges. Because the IRS and Treasury Department lack similar regulatory authority over section 6055 reporting entities, the final regulations do not include rules on confidentiality. However, existing privacy rules, such as those issued by HHS, apply and protect consumers' information.

To help protect against theft of social security numbers and other TINs, IRS rules permit reporting entities required to furnish certain statements to partially mask the TIN of statement recipients and others reported on an information statement by using a truncated TIN. It is expected that section 6055 reporting entities will be able to truncate the TINs of the responsible individual and covered individuals under these rules. The final regulations clarify that reporting entities are permitted to use truncated TINs on section 6055 statements.

Under section 6724(d), as amended by the Affordable Care Act, a reporting entity that fails to comply with the filing and statement furnishing requirements of section 6055 may be subject to penalties for failure to file a correct information return (section 6721) or failure to furnish a correct payee statement (section 6722). These penalties may be waived if the failure was due to reasonable cause and not willful neglect (section 6724(a)). The preamble to the proposed regulations noted that the section 6721 and 6722 penalties may apply to a section 6055 reporting entity but the penalties may be waived under section 6724 and the related regulations for certain failures due to reasonable cause. The preamble explained that penalties are waived if a reporting entity demonstrates that it acted in a responsible manner and that the failure is due to significant mitigating factors or events beyond the reporting entity's control. See § 301.6724-1(a)(1).

Some commenters were uncertain about what solicitations are required to satisfy the requirement to act in a responsible manner. In general, under § 301.6724(e) (regarding missing TINs), a person will be treated as acting in a responsible manner if the person properly solicits the TIN but does not receive it. Under these rules, the reporting entity makes an initial solicitation at the time the relationship with the payee is established. However, the reporting entity is not required to make this initial solicitation if it already has the payee's TIN and uses that TIN for all relationships with the payee. If the reporting entity does not receive the TIN, the first annual solicitation is generally required by December 31 of the year in which the relationship with the payee begins (January 31 of the following year if the relationship begins in December). Generally, if the TIN is still not provided, a second solicitation is required by December 31 of the following year. If a TIN is still not provided, the reporting entity has acted in a responsible manner and need not continue to solicit a TIN.

For example, a reporting entity that makes an unsuccessful initial solicitation for a TIN in December 2014 must make a second solicitation by December 31, 2015. Assuming that request is also unsuccessful, the reporting entity would not be penalized if its section 6055 reporting submitted in early 2016 reported a date of birth in place of TIN for the individual in question. One additional solicitation must be made by December 31, 2016, to have acted in a responsible manner.

Commenters pointed out that the rules for solicitation in the existing regulations may not adequately address the circumstances surrounding the relationship between a reporting entity and a responsible individual and the covered individuals. Commenters requested that the final regulations provide rules on soliciting TINs specific to section 6055 reporting. For instance, a commenter suggested that a reporting entity should be allowed to certify that it has made reasonable efforts to obtain TINs and that the certification should be reviewed only upon examination, so that reporting entities do not have to respond to IRS notices requesting missing TINs. Commenters also suggested that the final regulations require reporting entities to request information only once or at most twice. Other commenters asked whether certain procedures that are not addressed in the current section 6724 regulations would satisfy the solicitation requirement, including: (1) Is a reporting entity required to restart the solicitation process if a new individual is added to a policy; (2) does soliciting information from the responsible individual serve as soliciting information from each covered individual on the section 6055 statement; (3) must reporting entities solicit information on a Form W-9, Request for Taxpayer Identification Number and Certification, or may a request for information on, for example, an application for insurance coverage serve as the first solicitation; (4) may a reporting entity obtain information from other documents in its possession; and (5) may reporting entities solicit information by email or phone call.

In enacting the Affordable Care Act, Congress added section 6055 reporting to the list of reporting provisions to which the section 6721, 6722, and 6724 penalty provisions apply, indicating that Congress intended that section 6055 reporting should be subject to the same rules in this regard as other information reporting. Regulations and other authorities under those sections already provide detailed rules for compliance, including the rules described above for waiving any penalties for reasonable cause that address some of the commenters questions. For instance, consistent with the rules in § 301.6724-1(e)(1)(i), the reporting entity may make an initial solicitation orally (by phone or in person), in writing (including using an application), or by electronic means such as email. The rules for the manner of making an annual solicitation should apply in the case of section 6055 as well. See, for example, § 301.6724-1(e)(2).

Under § 301.6724-1(e)(1)(i), an initial solicitation is not required if the reporting entity already has the payee's TIN and uses that TIN for all relationships of the payee with the reporting entity. In the case of section 6055 reporting, a reporting entity would likewise not be required to make an initial solicitation if the reporting entity has the TIN or other documents in its possession that it uses for other aspects of its relationship with the covered individual and/or responsible individual. For example, if the reporting entity is also the responsible individual's employer, the reporting entity does not have to make an initial solicitation for the employee's TIN for purposes of section 6055 reporting and may use the TIN that is used for employment purposes.

The solicitation rules under section 6724 also address situations in which the reporting entity does not have TIN information for account holders. Accounts commonly are maintained jointly. In these situations, the solicitation rules do not require solicitation of the accountholder merely because another person is added to the account. Similarly, although the addition of a new individual to a policy would trigger an obligation to obtain a TIN for the newly added individual, it would not trigger an obligation to solicit a TIN from existing covered individuals (or the responsible person).

Treasury and the IRS recognize that the existing solicitation rules under section 6724 may not address certain circumstances that may arise with respect to reporting under section 6055. Although the final regulations do not revise the regulations under section 6724 to specifically address these circumstances, Treasury and the IRS will continue to study the issue and may provide additional clarification if appropriate through guidance or forms and instructions.

The proposed regulations required reporting entities to report the name, address, and EIN of the plan sponsor. A health insurance issuer also must report the EIN of an employer maintaining a plan and whether coverage was enrolled in through the SHOP.

The proposed regulations provided that, for a multiemployer group health plan, the plan sponsor is the association, committee, joint board of trustees, or other similar group of representatives of the parties who establish or maintain the plan. A commenter asked that the final regulations clarify that the plan sponsor of a multiemployer plan is not required to report the EIN of the participating employers. The proposed and final regulations do not require sponsors of multiemployer plans to report the EINs of the participating employers. The regulations require only health insurance issuers to report the EIN of the employer sponsoring an insured group health plan.

The proposed regulations provided that section 6055 information returns must provide the months for which an individual is enrolled in and entitled for at least one day to receive benefits under the coverage. Several commenters supported the requirement to report only the months of coverage, while others requested that reporting entities be allowed to report coverage dates instead of months. Section 6055 reporting of coverage on a monthly basis simplifies compliance for individual taxpayers because section 5000A requires that they demonstrate coverage under minimum essential coverage for each month of a taxable year. Accordingly, the final regulations retain the rule in the proposed regulations.

The proposed regulations provided that any person who is required to file under section 6055 must file electronically if the person is required to file at least 250 returns of any type. The proposed regulations aggregated all returns, including information returns (for example, Forms W-2 and 1099), income tax returns, employment tax returns, and excise tax returns, filed for the calendar year to determine if the 250-return threshold is met. A commenter requested that the final regulations require electronic reporting only if a reporting entity files at least 250 Forms W-2.

A “no aggregation” method of determining whether the 250 return threshold is met is consistent with the application of the rule to other information returns, such as Forms 1099 and W-2, that apply the 250 return threshold separately to each type of return required to be filed. See § 301.6011-2(c)(1). The final regulations adopt this rule. As a result, Forms 1095-B and 1095-C will be required to be electronically filed only if the reporting entity is required to file at least 250 of the specific form. Like transmittals of other information returns, the transmittal (Form 1094-B or 1094-C) is not treated as a separate return but must be electronically filed in the form and manner required by the IRS when the Form 1095 is electronically filed. The final regulations amend § 301.6011-2 to add Forms in the 1094 and 1095 series. Proposed § 301.6011-8 will be removed in a separate document.

The proposed regulations provided that the section 6721 and section 6722 penalties for failing to timely report correct information apply to reporting entities under section 6055. Penalties under section 6721 and section 6722 are reduced if a reporting entity files a corrected return within 30 days after the required filing date. Penalties also are reduced, but by a lesser amount, if a reporting entity makes a correction by August 1 following the reporting date. Penalties may be waived under section 6724 if the failure to timely and accurately report is due to reasonable cause and not willful neglect.

A commenter stated that reporting entities should not be required to submit corrected returns if the information included on the return is accurate at the time it is filed. The commenter recommended alternatively that the requirement to file corrected returns should apply for no more than 31 days after the end of the calendar year. Other commenters suggested a cut-off of the corrected return requirement of 30 days past the return filing due date.

Taxpayers require correct information to properly complete and file their income tax returns. The IRS must be able to accurately match information reporting with returns. Individuals are subject to the section 5000A requirement to maintain minimum essential coverage on a month-to-month basis. In the case of section 6055 reporting, a return or statement may be incomplete or incorrect as a result of a change in circumstances occurring after the coverage year has ended. For example, a child born during a month may be enrolled in coverage retroactive to the date of birth, or coverage may be retroactively cancelled due to a failure to pay premiums. Accordingly, consistent with other information reporting rules, the final regulations clarify that reporting entities that fail to timely file corrected returns and furnish corrected statements when information changes as a result of a change in circumstances have filed returns that are incomplete or incorrect within the meaning of sections 6721 and 6722.

Applicable large employer members that provide minimum essential coverage on a self-insured basis are subject to the reporting requirements of both section 6055 and section 6056, as well as the requirement under section 6051 to file Form W-2, Wage and Tax Statement, reporting wages paid to employees and taxes withheld. The proposed regulations did not permit combining section 6055 reporting with reporting for section 6056 or 6051. The proposed regulations allowed the use of substitute forms for the statement to individuals, which might have permitted reporting entities to combine section 6055 and section 6056 reporting for this purpose. The preamble to proposed regulations under section 6056 (78 FR 54986) described a number of proposals to simplify reporting under that section.

Commenters supported allowing combined section 6055 and section 6056 reporting for applicable large employer members sponsoring self-insured plans, suggesting that there is significant duplication in the information reported. Some commenters requested that combined reporting be optional and that employers be permitted to combine reporting for some employees but not others.

In response to these comments, the final regulations provide that applicable large employer members will file a combined return and statement for all reporting under sections 6055 and 6056. An applicable large employer member that sponsors a self-insured plan will report on Form 1095-C, completing both sections to report the information required under sections 6055 and 6056. An applicable large employer member that provides insured coverage also will report on Form 1095-C, but will complete only the section of Form 1095-C that reports the information required under section 6056. Section 6055 reporting entities that are not applicable large employer members or are not reporting as employers, such as health insurance issuers, sponsors of multiemployer plans, and providers of government-sponsored coverage, will report under section 6055 on Form 1095-B. In accordance with usual procedures, these forms will be made available in draft form in the near future.

The proposed regulations provided that a reporting entity must furnish a statement to each responsible individual reporting the policy number and the name, address, and a contact number for the reporting entity, and the information required to be reported to the IRS. A responsible individual is a primary insured, employee, former employee, uniformed services sponsor, parent, or other related person named on an application who enrolls one or more individuals, including him or herself, in minimum essential coverage.

Commenters requested that the final regulations provide that a statement is not required to be furnished to a covered individual who dies during the year. The commenters suggested alternatively that a statement should not be required for an individual who dies during the first three months of a year who would be exempt from the shared responsibility payment under section 5000A because of a short coverage gap.

Under § 1.5000A-1(a), the minimum essential coverage requirement applies only to full months that an individual is alive. However, section 5000A does not provide a general exemption from coverage for the year of death and the coverage gap exception may not apply if the gap began in the previous calendar year. Accordingly, to ensure that minimum essential coverage is properly reflected on a decedent's final income tax return and the estate is not held liable for a section 5000A payment, the final regulations do not provide an exception for a covered individual who dies during the year.

Section 6055 and the proposed regulations required a reporting entity to furnish the statement on or before January 31 of the year following the calendar year in which minimum essential coverage is provided. Commenters requested that the final regulations permit reporting entities to furnish statements within the last quarter of the calendar year of coverage with other material required to be sent at that time. The final regulations do not address furnishing a statement during the coverage year. However, the section 5000A requirement applies to each month during a calendar year, therefore a statement provided early in the last calendar quarter would not report coverage for those months. As a result, furnishing a statement before the end of the year increases the risk of reporting information that changes after the end of the year, potentially subjecting the reporting entity to penalties.

A commenter requested that the final regulations provide procedures for extending the time to furnish the section 6055 statement. Accordingly, in response to this comment, like other information reporting rules, the final regulations include rules allowing reporting entities showing good cause the flexibility to apply for an extension of time not exceeding 30 days to furnish statements.

A commenter requested that reporting entities be allowed to furnish statements reporting employer-sponsored coverage with the employees' Form W-2. Neither the final regulations nor regulations governing the furnishing of Forms W-2 under § 1.6051-1 prohibit mailing a 6055 statement with Form W-2. Accordingly, reporting entities may furnish the Form 1095-B or 1095-C with the Form W-2 in the same mailing.

The proposed regulations provided that, if mailed, the statement required under section 6055 must be sent to the individual's last known permanent address or, if no permanent address is known, to the individual's temporary address.

Commenters asked that reporting entities be allowed to send statements to an alternate address, such as an employer's address, for individuals residing outside of the United States for whom the entity does not have an address. Other commenters requested clarification that the requirement to furnish a statement would be satisfied if a mailing is returned to the sender.

The final regulations adopt the rule in the proposed regulations requiring reporting entities to send statements to an individual's last known address. The final regulations add a rule, however, that a reporting entity's first class mailing to the recipient's last known permanent address, or if no permanent address is known, the temporary address, discharges the requirement to furnish the statement, even if the statement is returned. A reporting entity that has no address for an individual should send the statement to the address where the individual is most likely to receive it, for example to the address the reporting entity uses for requesting or providing information about the coverage.

The proposed regulations permitted electronic furnishing of statements to individuals if the recipient affirmatively consents. Commenters requested that reporting entities be permitted to furnish statements electronically unless the recipient requests paper statements, arguing that most recipients have access to a computer. Other commenters suggested that affirmative consent by the recipient should not be required. A commenter suggested that the final regulations provide rules for the electronic furnishing of statements to individuals that are similar to the rules under section 2715 of the Public Health Service Act for providing a summary of benefits and coverage, which allows furnishing in paper or electronic form.

Statutory and regulatory tax information reporting rules uniformly require a recipient's affirmative consent to receiving statements electronically. See, for example, section 401 of the Jobs Creation and Workers Assistance Act of 2002 (116 Stat. 21 (2002)); § 1.401(a)-21(b)(2); § 31.6051-1(j)(2)(i); 2014 General Instructions for Certain Information Returns (Forms 1097, 1098, 1099, 3921, 3922, 5498, and W-2G), page 12. These rules protect individuals who do not have access to or are not comfortable using a computer. Therefore, consistent with general information reporting rules, the final regulations do not permit reporting entities to furnish statements electronically unless an individual affirmatively consents to electronic furnishing.

The proposed regulations provided that consent to receive statements electronically may be provided in any manner that reasonably demonstrates that the recipient can access the statement in the electronic format in which it will be furnished. Commenters suggested that consent to electronic furnishing for other documents should be treated as consent to electronic furnishing of the section 6055 statement. Other commenters requested that employers be allowed to post a notice on the company's Web site advising employees that statements are available and provide paper statements only on request.

Consent to receive a statement in electronic format must be in a manner that reasonably demonstrates that the recipient is able to access the statement in the electronic format in which it will be furnished. See for example § 31.6051-1(j)(2)(i). The proposed and final regulations explicitly allow statement recipients to provide consent and to access section 6055 statements in response to a notice on a Web site. A reporting entity may simultaneously request consent to receive an electronic section 6055 statement and consent regarding other statements. For instance, a reporting entity may simultaneously request consent to provide electronic statements for Forms W-2 and 1095, but each form must be specifically referenced in the request. A general consent to receive statements electronically does not reasonably demonstrate that the recipient is able to access the section 6055 statement in an electronic format and does not serve as consent to receive the section 6055 statement electronically.

The proposed regulations provided that the statement furnished to the responsible individual must include a contact phone number for the person required to file the return. A commenter asked whether a reporting entity may provide an automated response to inquiries if a person ultimately is available. The final regulations do not prohibit initial automated responses if a caller is able to reach a person during the call.

A commenter requested that a reporting entity be permitted to designate a third party to be the contact person. The final regulations clarify that the statement only must include a phone number for a person designated as the reporting entity's contact person. The final regulations do not specify that the contact person must be a reporting entity's employee or prohibit designating a third party as the contact person.

The proposed regulations permitted substitute statements if they include the information required to be shown on the return filed with the IRS and comply with applicable requirements in published guidance relating to substitute statements, for example, Rev. Proc. 2012-38 (2012-48 IRB 575), see § 601.601(d)(2) of this chapter.

Commenters expressed an interest in creating substitute statements combining information reporting under sections 6055 and 6056 and requested publication of a revenue procedure providing the specifications. Other commenters asked that reporting entities be allowed flexibility in customizing section 6055 statements in a style recognizable to their recipients.

The final regulations permit the use of substitute statements under section 6055 that conform to requirements provided in published guidance. The IRS plans to provide these requirements in published guidance or instructions. Employers submitting Forms 1095-C combining reporting under sections 6055 and 6056 to the IRS also will report the information required by those sections to the individuals in a single statement.

Commenters requested that the final regulations allow reporting entities to provide general rather than personalized information in the section 6055 statement, for example “You were covered by minimum essential coverage for each month you were covered by the plan for at least one day.” While the final regulations do not adopt this comment, it is anticipated that reporting entities will be able to check a box on the information return to report that an individual was covered for all 12 months of the calendar year.

Commenters requested that the IRS TIN matching program, see Rev. Proc. 2003-09 (2003-1 CB 516) and § 601.601(d), include section 6055 reporting. The TIN matching program may be used only for reportable payments subject to backup withholding under section 3406. Therefore, TIN matching is not permitted for purposes of section 6055 reporting and the final regulations do not include section 6055 reporting in the TIN matching program.

The proposed regulations applied to calendar years beginning after December 31, 2014. Under Notice 2013-45 (2013-31 IRB 116), the IRS will not apply penalties for failure to comply with section 6055 for 2014 (for coverage in 2014 and information returns filed and statements furnished to covered individuals in 2015).

A commenter requested that the effective date of the section 6055 reporting requirements be extended an additional year if final regulations are not released by January 1, 2014, thus requiring no reporting in 2016 for coverage in 2015. Other commenters requested that the IRS waive penalties for reporting in 2016 on 2015 coverage if a reporting entity makes a good faith effort to comply. One commenter requested that penalties be waived for the two years following the release of final regulations.

In implementing new information reporting requirements, short-term relief from penalties frequently is provided. This relief generally allows additional time to develop appropriate procedures for collection of data and compliance with these new reporting requirements. After considering the comments received, the IRS will not impose penalties under sections 6721 and 6722 on reporting entities that can show that they have made good faith efforts to comply with the information reporting requirements. Specifically, relief is provided from penalties under sections 6721 and 6722 for returns and statements filed and furnished in 2016 to report coverage in 2015, but only for incorrect or incomplete information reported on the return or statement, including TINs or dates of birth. No relief is provided in the case of reporting entities that do not make a good faith effort to comply with these regulations or that fail to timely file an information return or furnish a statement. However, consistent with the existing information reporting rules, reporting entities that fail to timely meet the requirements of these regulations may be eligible for penalty relief if the IRS determines that the standards for reasonable cause under section 6724 are satisfied.

These regulations apply for calendar years beginning after December 31, 2014. Consistent with Notice 2013-45, reporting entities will not be subject to penalties for failure to comply with the section 6055 reporting requirements for coverage in 2014 (including the provisions requiring the furnishing of statements to covered individuals in 2015 with respect to 2014). Accordingly, a reporting entity will not be subject to penalties if it first reports beginning in 2016 for 2015 (including the furnishing of statements to covered individuals).

Taxpayers are encouraged, however, to voluntarily comply with section 6055 information reporting for minimum essential coverage provided in 2014. Given significant changes in the information reporting provisions in response to commenters' feedback on the proposed regulations, including requiring applicable large employer members to file a return that combines section 6055 and section 6056 reporting, reporting entities that wish to voluntarily comply with the section 6055 information reporting provisions for 2014 should build their systems and report in accordance with these final regulations. Real-world testing of reporting systems and plan designs, built in accordance with the terms of these final regulations, through voluntary compliance for 2014 will contribute to a smoother transition to full implementation for 2015.

It has been determined that these final regulations are not a significant regulatory action as defined in Executive Order 12866, as supplemented by Executive Order 13563. Therefore, a regulatory assessment is not required. It has also been determined that section 553(b) of the Administrative Procedure Act (5 U.S.C. chapter 5) does not apply to these regulations.

Sections 603 and 604 of the Regulatory Flexibility Act (5 U.S.C. chapter 6) (RFA) generally require agencies to prepare a regulatory flexibility analysis addressing the impact of proposed and final regulations, respectively, on small entities. Section 605(b) of the RFA, however, provides that sections 603 and 604 do not apply if the head of the agency certifies that the rule will not have a significant economic impact on a substantial number of small entities. It is hereby certified that these regulations will not have a significant economic impact on a substantial number of small entities.

Section 6055 requires a person that provides minimum essential coverage to an individual to file a return with the IRS reporting information specified by the statute and to furnish a statement containing this information to an individual. These final regulations implement the underlying statute and the economic impact is principally a result of the underlying statute. Specifically, these final regulations primarily provide the time and manner for filing and furnishing the returns and statements that section 6055 requires.

Notice 2013-45 announced transition relief providing that information reporting under section 6055 will be optional for 2014. The notice advised that this relief would allow additional time for dialogue with prospective reporting entities in an effort to simplify the reporting requirements. Between publication of Notice 2013-45 and publication of the proposed regulations under section 6055, the IRS and the Treasury Department engaged in a series of discussions with employers, health insurance issuers, and other reporting entities. The proposed and final regulations address certain concerns expressed in those discussions.

These final regulations minimize the burden associated with the collection of information imposed by section 6055 in a number of ways. The regulations limit reporting to only the information that the IRS will use to verify minimum essential coverage and administer the premium tax credit, all of which is specified in the statute. For example, the regulations do not require reporting the amount of advance payments of the premium tax credit and cost-sharing reductions or the amount of the premium for employer coverage paid by an employer. Similarly, the only information the regulations require for administration of the small employer health insurance credit under section 45R is whether a qualified health plan was enrolled in through an Exchange. The final regulations reduce burden for applicable large employer members by allowing combined reporting under sections 6055 and 6056. The final regulations allow for substitute statements, furnishing of statements with Forms W-2, and electronic delivery consistent with other information reporting rules. Finally, the final regulations relieve health insurance issuers from reporting for individual market qualified health plans enrolled in through an Affordable Insurance Exchange because Exchanges will report on these enrollments under section 36B(f)(3).

Based on these facts, a Regulatory Flexibility Analysis under the Regulatory Flexibility Act is not required.

Pursuant to section 7805(f) of the Code, the notice of proposed rulemaking that preceded these final regulations was submitted to the Chief Counsel for Advocacy of the Small Business Administration for comment on its impact on small business.

The principal author of these final regulations is Andrew Braden of the Office of Associate Chief Counsel (Income Tax and Accounting). However, other personnel from the IRS and the Treasury Department participated in the development of the regulations.

Accordingly, 26 CFR parts 1, 301, and 602 are amended as follows:

Paperwork Reduction Act

The collection of information contained in these final regulations has been reviewed and approved by the Office of Management and Budget in accordance with the Paperwork Reduction Act of 1995 (44 U.S.C. 3507(d)) under control number 1545-2251.

The collection of information in these regulations is in §§ 301.6056-1, and 301.6056-2. This information is collected in accordance with the return and employee statement requirements under section 6056 and is used to administer section 4980H and the premium tax credit. The likely respondents are employers that are applicable large employers, as defined under section 4980H(c)(2).

An agency may not conduct or sponsor, and a person is not required to respond to, a collection of information unless it displays a valid control number assigned by the Office of Management and Budget.

The burden for the collection of information contained in these final regulations will be reflected in the burden on Form 1095-C or another form that the IRS designates, which will request the information in the final regulations.

Books or records relating to a collection of information must be retained as long as their contents may become material in the administration of any internal revenue law. Generally, tax returns and tax return information are confidential, as required by 26 U.S.C. 6103.

Sections I through V of the preamble (“Background”) describe the statutory provisions governing the information reporting requirements, as well as related statutory provisions. Sections VI through XIII of the preamble (“Explanation of Provisions and Summary of Comments”) describe and explain how these regulations implement the statutory provisions of section 6056 and include a discussion of alternative reporting methods and simplifications that are adopted in these final regulations. As is typical of regulations on information reporting, these regulations refer generally to additional information that may be required under applicable forms and instructions. Sections IX.B and C of the preamble set forth the specific data elements that will be included with the reporting, including the data elements that will be provided through the use of an indicator code.

Section 6056  1 requires applicable large employers, as defined in section 4980H(c)(2), to file returns at the time prescribed by the Secretary with respect to each full-time employee and to furnish a statement to each full-time employee by January 31 of the calendar year following the calendar year for which the return must be filed. Section 6056 specifies certain information that must be reported on the return and related statement and authorizes the Secretary to require additional information and determine the form of the return. Section 6055 requires information reporting by any person that provides minimum essential coverage to an individual during a calendar year, which information relates to the section 5000A individual shared responsibility provisions. Sections 6055 and 6056 are effective for periods beginning after December 31, 2013; however, Notice 2013-45 (2013-31 IRB 116) provides transition relief from the section 6056 information reporting requirements (and section 4980H), as well as the section 6055 information reporting requirements, so that reporting is not required with respect to 2014.

Proposed regulations under section 6056 were published in the Federal Register on September 9, 2013 (REG-136630-12 [78 FR 54996]). The proposed regulations provide guidance on the reporting method proposed to implement the statutory provisions of section 6056 (referred to as the general method), and discuss a variety of potential simplified reporting methods, on which public comments were requested. Comments responding to the proposed regulations and potential simplified reporting methods were submitted and are available for public inspection at www.regulations.gov or upon request. A public hearing was conducted on November 18, 2013.

Treasury and the IRS have sought to develop final information reporting rules that will be as streamlined, simple, and workable as possible, consistent with effective implementation of the law. This has reflected a considered balancing of the importance of (1) minimizing cost and administrative tasks for reporting by entities and individuals, (2) providing individuals the information to complete their tax returns accurately, including with respect to the individual shared responsibility provisions and potential eligibility for the premium tax credit, and (3) providing the IRS with information needed for effective and efficient tax administration. After consideration of all of the comments and testimony, as well as the comments previously submitted in response to Notice 2012-33 (2012-20 IRB 912), the proposed regulations are adopted as amended by this Treasury Decision. The amendments are discussed in the Summary of Comments and Explanation of Provisions section of this preamble.

Section 6056 reporting is needed for the administration of section 4980H. Generally, a payment will be assessed under section 4980H if the employer either does not offer minimum essential coverage to its full-time employees (and their dependents) or the coverage offered is not affordable or does not provide minimum value, and one or more of the full-time employees receive a premium tax credit for purchase of coverage on an Affordable Insurance Exchange (Exchange). 2 Section 4980H(c)(2) defines the term “applicable large employer” as, with respect to a calendar year, an employer that employed an average of at least 50 full-time employees on business days during the preceding calendar year. Generally, for purposes of determining applicable large employer status, a full-time employee includes any employee who was employed on average at least 30 hours of service per week and any full-time equivalents determined pursuant to section 4980H(c)(2)(E). As provided in section 4980H(c)(2)(C)(i), all employers treated as a single employer under section 414(b), (c), (m), or (o) are treated as one employer for purposes of determining applicable large employer status. Section 4980H contains rules for determining whether an employer qualifies as an applicable large employer, including special rules addressing an employer's first year of existence. See section 4980H(c)(2)(C).

Section 4980H is effective for months after December 31, 2013; however, Notice 2013-45 provides transition relief for 2014 for section 6056 reporting requirements which, given their role in administering section 4980H, means that no payments will be assessed under section 4980H for 2014. On February 12, 2014, Treasury and the IRS released final regulations under section 4980H (TD 9655 [79 FR 8544]).

The final regulations under section 4980H provide guidance on determining applicable large employer status and determining full-time employee status, including defining and providing rules for calculating hours of service. See §§ 54.4980H-1(a)(24) (definition of hours of service), 54.4980H-2 (determination of applicable large employer status), and 54.4980H-3 (determination of full-time employee status).

Section 6056 reporting is also essential to the administration of the premium tax credit under section 36B, which was added by the Affordable Care Act. The advanceable and refundable section 36B premium tax credit helps individuals and families afford health insurance coverage purchased through an Exchange. An employee is not eligible for the premium tax credit to subsidize the cost of Exchange coverage if the employee is offered affordable minimum essential coverage under an employer-sponsored plan that provides minimum value, or if the employee enrolls in an employer-sponsored plan that provides minimum essential coverage. For purposes of the premium tax credit, an employer-sponsored plan is affordable if the employee's required contribution for the lowest-cost self-only minimum value coverage offered does not exceed 9.5 percent of the employee's household income. Since an employer ordinarily will not know an employee's household income, the final section 4980H regulations provide various safe harbors for determining affordability for purposes of section 4980H based on information available to the employer. Those safe harbors do not affect affordability for purposes of the premium tax credit, so that an employer will be treated as having offered affordable health care coverage for purposes of section 4980H if it meets one of the safe harbors under the section 4980H regulations even if the coverage is not treated as affordable to the individual employee for purposes of the premium tax credit. An employee who is offered affordable minimum essential coverage providing minimum value under an employer-sponsored plan but instead purchases coverage on an Exchange will not be eligible for a premium tax credit (and if such an employee's spouse or dependents are also offered coverage under the employer-sponsored plan but instead purchase coverage on an Exchange, they also will not be eligible for a premium tax credit on the Exchange). Individuals and the IRS will use the information reported under section 6056 on the cost of the lowest-cost employer-sponsored self-only minimum essential coverage that provides minimum value for purposes of verifying an individual's eligibility for the premium tax credit.

Individuals, including employees, may be eligible for advance payments of the premium tax credit (APTC), which are administered by HHS and paid to issuers on behalf of individuals who enrolled in Exchange coverage. Individuals who do not request APTC also may be eligible to claim the premium tax credit on their Federal income tax returns if they purchased coverage on an Exchange and were not offered employer-sponsored minimum essential coverage that was affordable and provided minimum value. The IRS and employees will use the information provided on the section 6056 return and employee statement to determine whether an employee is eligible for the premium tax credit. Note that in connection with providing APTC, the Exchanges will employ a verification process.

The Affordable Care Act also added section 5000A to the Code. Section 5000A provides that every individual must have minimum essential coverage, qualify for an exemption, or include an additional payment with their Federal income tax return. Taxpayers who can claim a child or another individual as a dependent for federal income tax purposes are responsible for making the payment if the dependent does not have minimum essential coverage or an exemption.

Section 5000A(f)(1)(B) provides that minimum essential coverage includes coverage under an eligible employer-sponsored plan. Under section 5000A(f)(2) and § 1.5000A-2(c)(1), an eligible employer-sponsored plan is, with respect to an employee, (1) group health insurance coverage offered by, or on behalf of, an employer to an employee that is either (a) a governmental plan within the meaning of section 2791(d)(8) of the Public Health Service Act (42 U.S.C. 300gg-91(d)(8)), (b) any other plan or coverage in the small or large group market within a State, or (c) a grandfathered health plan, as defined in section 5000A(f)(1)(D), offered in a group market, or (2) a self-insured group health plan under which coverage is offered by, or on behalf of, an employer to an employee. Section 5000A(f)(3) and regulations under that section provide that minimum essential coverage does not include coverage consisting solely of excepted benefits described in section 2791(c)(1), (c)(2), (c)(3), or (c)(4) of the Public Health Service Act or regulations issued under these provisions. See § 1.5000A-2(g).

The Affordable Care Act also added section 6055 to the Code, providing for information reporting for the administration of section 5000A. The section 6055 reporting requirements are effective for years beginning after December 31, 2013; however, as noted above in section I of this preamble, Notice 2013-45 provides transition relief for 2014 from the section 6055 reporting requirements so that the reporting is not required with respect to 2014. Section 6055 requires information reporting by any person that provides minimum essential coverage to an individual during a calendar year, including coverage provided under an eligible employer-sponsored plan, and the furnishing to taxpayers of a related statement covering each individual listed on the section 6055 return. The information reported under section 6055 may be used by individuals and the IRS to verify the months (if any) in which they were covered by minimum essential coverage. Treasury and the IRS are issuing final regulations under section 6055 (TD 9660) concurrently with these final regulations.

In general, in addition to the changes described elsewhere in this preamble, the final regulations adopt non-substantive changes that were made to certain sections of the proposed regulations in order to increase consistency with the final regulations under section 6055 issued concurrently with these final regulations. In addition, the proposed regulations provided that reporting entities must file section 6056 information returns electronically if they file 250 returns of any type. The final regulations provide that reporting entities must file section 6056 returns electronically if they file 250 returns under section 6056. These changes are discussed later in this preamble.

This Explanation of Provisions (Sections VI through XIII of this preamble) addresses the comments that were received and describes the provisions of these final regulations implementing the section 6056 reporting provisions discussed in the Background portion of the preamble. Specifically, this section includes the following:

These regulations under section 6056 use a number of terms that are defined in other Code provisions or regulations. For example, section 6056(f) provides that any term used in section 6056 that is also used in section 4980H shall have the same meaning given to the term by section 4980H. The final regulations provide for the following defined terms:

A. Applicable Large Employer has the same meaning as in section 4980H(c)(2) and § 54.4980H-1(a)(4).

B. Applicable Large Employer Member has the same meaning as in § 54.4980H-1(a)(5). All persons treated as a single employer under section 414(b), (c), (m), or (o) are treated as one employer for purposes of determining applicable large employer status. 3 Under these regulations, the section 6056 filing and furnishing requirements are applied separately to each person comprising the applicable large employer consistent with the approach taken in the section 4980H regulations with respect to the determination of any assessable payment under section 4980H. The person or persons that comprise the applicable large employer are referred to as applicable large employer members (and referred to elsewhere in this preamble as ALE members).

C. Dependent has the same meaning as in § 54.4980H-1(a)(12).

D. Eligible Employer-Sponsored Plan has the same meaning as in section 5000A(f)(2) and § 1.5000A-2(c)(1).

E. Full-time Employee has the same meaning as in section 4980H(c)(4) and § 54.4980H-1(a)(21), but only as applied to the determination and calculation of liability under section 4980H(a) and (b) with respect to any individual employee (and therefore not including full-time equivalent employees as defined in § 54.4980H-1(a)(22)). The final regulations under section 4980H define an employee for purposes of section 4980H as an individual who is an employee under the common law standard, and as not including a leased employee (as defined in section 414(n)(2)), a sole proprietor, a partner in a partnership, a 2-percent S corporation shareholder, or a worker described in section 3508.

F. Governmental Unit and Agency or Instrumentality of a Governmental Unit. The term governmental unit is defined as the government of the United States, any State or political subdivision of a State, or any Indian tribal government (as defined in section 7701(a)(40)) or subdivision of an Indian tribal government (as defined in section 7871(d)). The regulations do not define the term agency or instrumentality of a governmental unit for purposes of section 6056 , but reserve on the issue. Until future guidance is issued that defines the term for purposes of section 6056, an entity may determine whether it is an agency or instrumentality of a governmental unit based on a reasonable and good faith interpretation of existing rules relating to agency or instrumentality determinations for other federal tax purposes.

G. Minimum Essential Coverage has the same meaning as in section 5000A(f) and the regulations issued under that section.

H. Minimum Value has the same meaning as in section 36B and any applicable guidance. See proposed § 1.36B-6.

I. Person has the same meaning as provided in section 7701(a)(1) and the related regulations.

As indicated earlier in section VII.B of this preamble, an ALE member is any person that is an applicable large employer or a member of an aggregated group (determined under section 414(b), 414(c), 414(m) or 414(o)) that is determined to be an applicable large employer. Under these regulations, the section 6056 filing and statement furnishing requirements apply on a member-by-member basis to each ALE member, even though the determination of whether an entity is an applicable large employer is made at the aggregated group level. 4 For example, if an applicable large employer is comprised of a parent corporation and 10 wholly-owned subsidiary corporations, there are 11 ALE members (the parent corporation and each of the 10 subsidiary corporations). Under these regulations, each ALE member with full-time employees is the entity responsible for filing and furnishing statements with respect to its full-time employees under section 6056. This is consistent with the manner in which any potential assessable payments under section 4980H will be calculated and administered.

Some commenters requested that the applicable large employer be permitted to report and furnish statements on a consolidated basis, or that the sponsor of a health plan offering coverage to employees of more than one ALE member plan be permitted to report and furnish statements on behalf of all the employers of employees eligible to participate in the plan. While these regulations do not adopt these suggestions, Treasury and the IRS understand that ALE members may benefit from the assistance of a third party in preparing these returns, for example a third-party plan administrator or a related ALE member tasked with preparing the returns for all the members of that applicable large employer. For a discussion of how these third parties may help an ALE member fulfill its reporting obligations, see section XII.C of this preamble.

The section 6056 return will form the basis for the process leading to any assessment of the ALE member under section 4980H, which is determined separately with respect to each ALE member. Any assessable payment would be calculated based on the relevant information related to the number of full-time employees of each ALE member and the nature of the offer of coverage, if any, made to each of that ALE member's full-time employees for each calendar month. Accordingly, the ALE member is the appropriate taxpayer to file the return relating to its potential tax liability.

Whether an employee is a full-time employee is determined under section 4980H(c)(4) and any applicable guidance. See §§ 54.4980H-1(a)(21) and 54.4980H-3. This includes any full-time employees who may perform services for multiple ALE members within the applicable large employer. 5 Under these regulations, only ALE members with full-time employees are subject to the filing and statement furnishing requirements of section 6056 (and only with respect to their full-time employees). Accordingly, ALE members without any full-time employees are not subject to the section 6056 reporting requirements.

Generally, the ALE member providing the section 6056 reporting is the common law employer. An ALE member that is a qualified subchapter S subsidiary under section 1361(b)(3)(B) or an entity described in § 301.7701-2(c)(2)(i) (collectively, a disregarded entity) is treated as an entity separate from its owner for purposes of section 4980H and section 6056 under §§ 1.1361-4(a)(8)(i)(E) and 301.7701-2(c)(2)(v)(A)( 5 ) for periods after December 31, 2014. See TD 9655. Therefore, the reporting requirements under section 6056 apply to an ALE member that is a disregarded entity, and not to its owner. 6

This section describes the general method for reporting to the IRS and furnishing statements to employees pursuant to section 6056 that is set forth in these regulations. This general method is available for all employers and with respect to reporting for all full-time employees. These regulations also provide alternative reporting methods, which in some cases may be available only with respect to a certain group or groups of employees. In those cases, with respect to those employees for whom an alternative reporting method is not available, the employer must use the general method. In any case, the alternative reporting methods are optional so that an employer may choose to report for any or all of its full-time employees using the general method even if an alternative reporting method is available. For a further description of the alternative reporting methods, see section X of this preamble.

In accordance with section 6056, the regulations provide for each ALE member to file a section 6056 return with respect to its full-time employees. Similar to the separate Form W-2, Wage and Tax Statement, filed by an employer for each employee and the Form W-3, Transmittal of Wage and Tax Statements, filed as a transmittal form for the Forms W-2, these regulations provide that a separate return is required for each full-time employee, accompanied by a single transmittal form for all of the returns filed for a given calendar year.

Many commenters recommended that the regulations allow combined information reporting under sections 6055 and 6056 for applicable large employers that sponsor self-insured plans and must report under both sections. The proposed regulations did not provide for combined reporting. In an effort to minimize taxpayer burden and streamline the reporting process as authorized by section 6056(d), while minimizing the need for employers and the IRS to build multiple systems to accommodate multiple forms, these final regulations adopt this suggestion by providing for use by all ALE members of a single combined form for reporting the information required under both section 6055 and section 6056.

Accordingly, as a general method, these regulations provide that the section 6056 return may be made by filing Form 1094-C (a transmittal) and Form 1095-C (an employee statement), or other forms the IRS designates. Alternatively, the section 6056 return may be made by filing a substitute form. Under these regulations, a substitute form must include all of the information required to be reported on Forms 1094-C and 1095-C or other forms the IRS designates and comply with applicable revenue procedures or other published guidance relating to substitute returns. See §§ 301.6056-1(d)(2) and 601.601(d)(2). For a discussion of substitute statements for employees, see section IX.D of this preamble.

Form 1095-C will be used by ALE members to satisfy the section 6055 and 6056 reporting requirements, as applicable. An ALE member that sponsors a self-insured plan will report on Form 1095-C, completing both sections to report the information required under both sections 6055 and 6056. An ALE member that provides insured coverage will also report on Form 1095-C, but will complete only the section of Form 1095-C that reports the information required under section 6056. Section 6055 reporting entities that are not ALE members or are not reporting in their capacity as employers, such as health insurance issuers, self-insured multiemployer plans, and providers of government-sponsored coverage, will report under section 6055 on Form 1095-B. In accordance with usual procedures, these forms will be made available in draft form in the near future.

In response to comments, Treasury and the IRS also considered suggestions to use, for section 6055 and 6056 reporting purposes, information that employers communicate to employees about employer-sponsored coverage prior to employees' potential enrollment in Exchange coverage. These comments observed that, under the Affordable Care Act, employers provide pre-enrollment information to employees by various means, including information in the Notice of Coverage Options provided to employees pursuant to the requirements under section 18B of the Fair Labor Standards Act  7 and the Employer Coverage Tool developed by the Department of Health and Human Services (HHS) that supports the application for enrollment in a qualified health plan and insurance affordability programs. 8

Treasury and the IRS have considered and coordinated with the Departments of HHS and Labor regarding the various provisions with a view to identifying ways to make the entire process as effective and efficient as possible for all parties. That said, the various reports are designed for different purposes, and pre-enrollment reporting regarding anticipated employer coverage in an upcoming coverage year is unlikely to be helpful to individual taxpayers in accurately completing their tax returns more than a year later (and after the coverage year has already ended). Among other issues, the pre-enrollment information may not be readily available to individuals at the time they are filing their tax returns, could be confused with other information (such as the pre-enrollment information provided to the individual pertaining to the coverage year following the calendar year to which the tax return relates), may not include certain information, like premiums, necessary for tax administration, and is in a format that does not facilitate easy transfer to the appropriate location on the Federal income tax return. In addition, the pre-enrollment information is generally not specific to the particular employee's experience at the employer. For these reasons, these regulations do not adopt these suggestions.

Except as otherwise provided as part of an alternative reporting method, these final regulations provide that each ALE member reports on the section 6056 information return the same information set forth in the proposed regulations. Specifically, the final regulations require the following information: (1) The name, address, and employer identification number of the ALE member, and the calendar year for which the information is reported; (2) the name and telephone number of the ALE member's contact person; (3) a certification as to whether the ALE member offered to its full-time employees (and their dependents) the opportunity to enroll in minimum essential coverage under an eligible employer-sponsored plan, by calendar month; (4) the number of full-time employees for each calendar month during the calendar year, by calendar month; (5) for each full-time employee, the months during the calendar year for which minimum essential coverage under the plan was available; (6) for each full-time employee, the employee's share of the lowest cost monthly premium for self-only coverage providing minimum value offered to that full-time employee under an eligible employer-sponsored plan, by calendar month; and (7) the name, address, and taxpayer identification number of each full-time employee during the calendar year and the months, if any, during which the employee was covered under an eligible employer-sponsored plan. In addition, these regulations provide, as with other information reporting, that the section 6056 information return may request such other information as the Secretary may prescribe or as may be required by forms or instructions.

Some commenters requested that ALE members be permitted to provide the name and telephone number of a third party in the part of the section 6056 return requesting the name and telephone number of the ALE member's contact person. An ALE member may provide the name and telephone number of any contact person, whether an employee of the ALE member or an agent of the ALE member, acting on behalf of the ALE member for purposes of section 6056 reporting.

Some commenters requested that the final regulations not require the reporting of social security numbers for an employee's spouse or dependents. Neither the proposed regulations nor these final regulations require reporting of such information for purposes of section 6056. 9 These final regulations require only that an ALE member report the social security number of the full-time employee.

Some commenters requested that the final regulations permit employers to report dates of coverage rather than months of coverage. Other commenters requested that ALE members be permitted to provide the information on a payroll period basis, rather than a monthly basis, to address situations in which coverage is provided based on payroll periods. Other commenters requested that the ALE member be permitted to report by multi-month periods, rather than on a monthly basis, such as stating that coverage was offered January through October of a particular year. As provided in the final regulations under section 4980H and adopted by cross-reference in these regulations, the individuals who are full-time employees of an ALE member for a particular calendar month generally may be identified on a weekly basis or a payroll period basis that approximates the calendar month. See §§ 54.4980H-3(c)(3) and 54.4980H-3(d)(1)(ii). However, both section 4980H and the premium tax credit are administered based on the calendar month, so that whether the individual identified as a full-time employee was offered coverage for the entire calendar month is relevant to the administration of both Code provisions. Accordingly, ALE members are required to report on the basis of the twelve calendar months with respect to the coverage offered (or not offered) to each full-time employee.

As part of the effort to minimize the cost and administrative steps associated with the reporting requirements, the final regulations omit information that is not relevant to individual taxpayers or the IRS for purposes of administering the premium tax credit and section 4980H or that is already provided at the same time through other means. Specifically, consistent with the proposed regulations, these final regulations do not require the reporting of the following four data elements (and a more detailed description of the data elements that will be included is provided later in this section of the preamble):

First, the final regulations do not require the reporting of the length of any permissible waiting periods under section 4980H, 10 because the length of a waiting period is not relevant for administration of the premium tax credit or section 4980H or for an individual in preparing his or her tax return. However, Treasury and the IRS anticipate that information will be requested, using an indicator code, regarding whether coverage was not offered to an employee during certain months because of a permissible waiting period under section 4980H, since this information is relevant to the administration of section 4980H.

Second, these regulations do not require reporting of the employer's share of the total allowed costs of benefits provided under the plan because this information also is not relevant to the administration of the premium tax credit and section 4980H. In contrast, whether the employer-sponsored plan provides minimum value coverage is relevant information; accordingly, Treasury and the IRS anticipate that information will be requested, using an indicator code. Some commenters requested that information on the employer contribution continue to be required because it would be informative to the employee. Given that this information is not relevant to tax administration, and generally may be discerned by the employee from the information reported at the same time on the Form W-2, Box 12 using Code DD pursuant to section 6051(a)(14) (reporting of the total value of employer-provided health benefits provided to the employee), these regulations do not adopt this suggestion.

Third, these regulations do not require the reporting of the monthly premium for the lowest-cost option in each of the enrollment categories (such as self-only coverage or family coverage) under the plan. Rather, because only the lowest-cost option of self-only coverage providing minimum value offered under any of the enrollment categories for which the employee is eligible is relevant to the determination of whether coverage is affordable (and thus to the administration of the premium tax credit and section 4980H), that is the only cost information requested.

Fourth, the regulations do not require the reporting of the months, if any, during which any of the employee's dependents were covered under the plan. Instead, the regulations require reporting only regarding whether the employee was covered under a plan. Information relating to the months, if any, during which any of the employee's dependents were covered under the plan will be reported as part of the section 6055 information return associated with that employee's coverage, whether on the combined Form 1095-C return submitted by an ALE member with a self-insured plan or otherwise on the Form 1095-B return submitted by the insurance company or other person providing the minimum essential coverage.

Some commenters requested that information related to whether the employee was covered under a plan not be required to be reported as part of the section 6056 reporting because that information will be reported on the section 6055 return. Although this information is required to be reported under section 6055 and section 6056, this suggestion is not adopted in the final regulations because the employee's coverage under the eligible employer-sponsored plan means that the employee is not eligible for the premium tax credit. However, under the final regulations, ALE members with self-insured group health plans will now use a combined Form 1095-C to satisfy the section 6055 and section 6056 reporting requirements and will therefore only be required to report on a single form information regarding whether an employee was covered. ALE members that provide insured coverage will report information regarding whether an employee was covered once on the section 6056 section of the combined Form 1095-C and will leave the section of the form pertaining to section 6055 information blank.

Under the regulations, each ALE member must file and furnish the section 6056 return and employee statement using its EIN. Any ALE member that does not have an EIN may easily apply for one online, or by telephone, fax, or mail. See Publication 1635, Employer Identification Number, for further information at www.irs.gov.

To assist in administering section 4980H and the premium tax credit, the IRS will need certain information not specifically set forth under section 6056 but authorized under section 6056(b)(2)(F).

Under the general method of section 6056 reporting, the following information will be reported through the use of indicator codes for some information, as part of the section 6056 return (as well as the number of individual employee statements being submitted):

(1) Information as to whether the coverage offered to full-time employees and their dependents under an employer-sponsored plan provides minimum value and whether the employee had the opportunity to enroll his or her spouse in the coverage;

(2) the total number of employees, by calendar month;

(3) whether an employee's effective date of coverage was affected by a permissible waiting period under section 4980H, by calendar month;

(4) whether the ALE member had no employees or otherwise credited any hours of service during any particular month, by calendar month;

(5) whether the ALE member is a person that is a member of an aggregated group, determined under section 414(b), 414(c), 414(m), or 414(o), and, if applicable, the name and EIN of each employer member of the aggregated group constituting the applicable large employer on any day of the calendar year for which the information is reported;

(6) if an appropriately designated person is reporting on behalf of an ALE member that is a governmental unit or any agency or instrumentality thereof for purposes of section 6056, the name, address, and identification number of the appropriately designated person;

(7) if an ALE member is a contributing employer to a multiemployer plan, whether, with respect to a full-time employee, the employer is not subject to an assessable payment under section 4980H due to the employer's contributions to the multiemployer plan; and

(8) if a third party is reporting for an ALE member with respect to the ALE member's full-time employees, the name, address, and identification number of the third party (in addition to the name, address, and EIN of the ALE member already required under the final regulations).

Some commenters requested that further explanation be provided regarding the meaning of the provision included in the proposed regulations asking whether an ALE member was conducting business. To clarify the intent, this provision is changed to require an ALE member, using an indicator code, to report any months during which no employees were providing services or otherwise being credited with hours of service for the ALE member.

Some commenters requested that employers not be required to report whether they expect to be an ALE member the following year. This comment is adopted in the final regulations.

Some commenters requested that employers be required to report information in addition to what was described in the proposed regulations. Commenters requested that employers be required to report information relating to the look-back measurement method for determining full-time employee status set forth in § 54.4980H-3(d). Specifically, commenters requested that employers be required to report on each variable hour employee who may be subject to the look-back measurement method. For variable hour employees, as defined in § 54.4980H-1(a)(49), commenters requested that employers be required to report the administrative and stability period start and end dates and length, as well as the months in which coverage was offered. Commenters also requested that the cost of coverage available to spouses and dependents be reported. Although Treasury and the IRS agree that this information may be helpful to employees and their spouses and dependents in certain circumstances, reporting such information on the section 6056 return is not necessary for the administration of the premium tax credit or section 4980H and is not directly relevant to the employee in determining whether the employee is eligible for a premium tax credit and is accurately claiming the credit on the employee's individual tax return. Accordingly, this suggestion is not incorporated in the final regulations.

Other commenters requested that the section 6056 return provide a means to indicate whether an employee is a tribal member who is exempt from the individual shared responsibility provision under section 5000A(e). Because an individual's exempt status for purposes of section 5000A is not relevant to the administration of the premium tax credit or section 4980H, this suggestion is not incorporated in the final regulations.

In an effort to simplify and streamline the section 6056 reporting process under the general section 6056 reporting rules, Treasury and the IRS anticipate that certain information described above as applied to a particular full-time employee will be reported to the IRS, and furnished to the full-time employee, through the use of a code rather than by providing specific or detailed information. Specifically, it is contemplated that the following information will be reported with respect to each full-time employee for each calendar month using a code:  11

(1) Minimum essential coverage meeting minimum value was offered to:

a. the employee only;

b. the employee and the employee's dependents only;

c. the employee and the employee's spouse only; or

d. the employee, the employee's spouse and dependents;

(2) coverage was not offered to the employee and:

a. any failure to offer coverage will not result in a payment under section 4980H(a) or (b), for example because the employee was in a limited non-assessment period for certain employees, as defined in § 54.4980H-1(a)(26);

b. the employee was not a full-time employee;

c. the employee was not employed by the ALE member during that month; or

d. no other code or exception applies;

(3) coverage was offered to the employee for the month although the employee was not a full-time employee for that month;

(4) the employee was covered under the plan; and

(5) the ALE member met one of the affordability safe harbors under § 54.4980H-5(e)(2) with respect to the employee.

It is anticipated that if multiple codes apply with respect to a full-time employee for a particular calendar month, the reporting format will accommodate the necessary codes.

Under the general section 6056 reporting rules set forth in these regulations, every ALE member required to file a section 6056 return must furnish a section 6056 employee statement to each of its full-time employees that includes the name, address and EIN of the ALE member and the information required to be shown on the section 6056 return with respect to the full-time employee. The section 6056 employee statement is not required to include a copy of the transmittal form that accompanies the return. As part of the alternative reporting methods, in certain circumstances, other methods of furnishing information to an employee may be sufficient. For a detailed description of these alternative reporting methods, see section X of this preamble.

Some employers may wish to have the flexibility to use a substitute type of statement to provide the necessary information to full-time employees. These regulations provide that the section 6056 employee statement may be made by furnishing a copy of the section 6056 return on Form 1095-C (or another form the IRS designates) or a substitute employee statement for that full-time employee. Under these regulations, a substitute statement must include the information required to be shown on the section 6056 return filed with the IRS with respect to that employee and must comply with applicable revenue procedures or other published guidance relating to substitute statements. See § 601.601(d)(2). These regulations provide that section 6056 employee statements on Form 1095-C or another form the IRS designates may identify the employee using an IRS truncated TIN rather than the social security number or other identifying number of the employee shown on the corresponding information return filed with the IRS. See the proposed regulations on IRS Truncated Taxpayer Identification Numbers (REG-148873-09 [78 FR 913]).

These regulations provide that section 6056 returns must be filed with the IRS annually, no later than February 28 (March 31 if filed electronically) of the year immediately following the calendar year to which the return relates. This is the same filing schedule applicable to other information returns with which employers are familiar, such as Forms W-2 and 1099. Because Notice 2013-45 provides transition relief for section 6056 reporting with respect to 2014, the first section 6056 returns required to be filed are for the 2015 calendar year and must be filed no later than March 1, 2016 (February 28, 2016, being a Sunday), or March 31, 2016, if filed electronically. In addition, the regulations provide that the section 6056 employee statements be furnished annually to full-time employees on or before January 31 of the year immediately following the calendar year to which the employee statements relate. This means that the first section 6056 employee statements (meaning the statements for 2015) must be furnished no later than February 1, 2016 (January 31, 2016, being a Sunday). However, see section X.C of this preamble for a discussion of the 2015 section 6056 transition relief available for employers eligible for the transition relief set forth in section XV.D.6 of the preamble to the final regulations under section 4980H (2015 section 4980H transition relief for employers with at least 50 and less than 100 full-time employees (including full-time equivalent employees) that meet certain conditions).

Some commenters asked for use of an alternate filing date for employers whose health plan is not a calendar year plan. While Treasury and the IRS understand that employers may collect information on a plan year basis, employees will need to receive their section 6056 employee statements early in the calendar year in order to have the requisite information to correctly and completely file their income tax returns covering the calendar year and reflecting any available premium tax credit for that calendar year. For this reason, these regulations do not adopt this suggestion.

The final regulations do not include rules regarding extensions of the time to file section 6056 returns. This topic is addressed in the final regulations under section 6055, which include amendments to the regulations under section 6081 relating to general rules on extensions of time to file to include returns under both sections 6055 and 6056. The final section 6055 regulations cross-reference the amendments to the regulations under section 6081; these regulations also include this cross-reference.

Under Notice 2013-45 and the proposed regulations, in preparation for the application of the section 4980H provisions beginning in 2015, employers were encouraged to voluntarily comply for 2014 (that is, by filing and furnishing section 6056 returns and statements in early 2015) with the information reporting provisions as described in the proposed regulations, and to maintain or expand health coverage in 2014. At the time the notice and proposed regulations were issued, Treasury and the IRS anticipated that at least as to the general method of reporting, the final regulations would not differ significantly from the proposed regulations. While the information required to be provided to the IRS and furnished to employees has remained largely unchanged under the general method of reporting, in response to comments on the proposed regulations the format in which that information is provided has changed significantly to streamline the process and reduce administrative burden. Specifically, under the final regulations, as suggested in comments, all ALE members will file a single combined return providing the relevant section 6056 information and, as applicable, also the relevant section 6055 information.

Given this change in the information reporting provisions in response to commenters' feedback on the proposed regulations, employers that wish to voluntarily comply with the information reporting provisions with respect to 2014 should do so in accordance with these final regulations (generally meaning providing both section 6056 and, if applicable, section 6055 information on a single form). Treasury and the IRS continue to anticipate that real-world testing of reporting systems and plan designs, built in accordance with the terms of these final regulations, through voluntary compliance for 2014 will contribute to a smoother transition to full implementation for 2015.

Treasury and the IRS understand that electronic filing is often easier and more efficient for taxpayers, and several commenters requested that employers be permitted to file section 6056 returns electronically. Some commenters requested that the proposed regulations be modified so that the section 6056 return would not be aggregated with other returns for purposes of determining whether the returns are required to be filed electronically. The final regulations adopt these suggestions. Consistent with other tax information reporting requirements, the final regulations require electronic filing of section 6056 information returns (Forms 1094-C and 1095-C) except for an ALE member filing fewer than 250 returns under section 6056 during the calendar year, and provide that only section 6056 returns are counted in applying the 250 return threshold for section 6056 reporting. The final regulations under section 6055, issued contemporaneously with these final regulations, amend § 301.6011-2 to add forms in the 1094 and 1095 series. Proposed § 301.6011-9 will be removed in a separate document.

Each section 6056 return for a full-time employee is counted as a separate return. ALE members filing fewer than 250 returns during the calendar year may choose to make the section 6056 returns on the prescribed paper form, but are permitted (and encouraged) to file section 6056 returns electronically. This requirement for electronic filing is the same as the current requirements for other information returns.

In addition to electronic filing, Treasury and the IRS understand that electronic methods are often a simpler and more efficient method to supply employees with the required information, and several commenters requested that employers be permitted to electronically furnish section 6056 employee statements to full-time employees. In response, the regulations permit electronic furnishing of section 6056 employee statements if notice, consent, and hardware and software requirements modeled on existing rules are met. To provide rules for electronic furnishing with which employers are already familiar, these final regulations, consistent with the proposed regulations, adopt a process substantially similar to the process currently in place for the electronic furnishing of employee statements (that is, Forms W-2) pursuant to section 6051 and applicable regulations.

Some commenters requested that ALE members be permitted simply to post the information on a Web site accessible to the employee (similar to the current process available to plan administrators of group health plans for furnishing Summary of Benefits and Coverage (SBCs)), 12 or to provide the information to an employee only upon request. Other commenters requested that the ALE member not be required to obtain consent to furnish the information electronically. For many employees, the information provided in the section 6056 employee statement will be essential to the accurate preparation of their individual tax return with respect to a claim for the premium tax credit. Because the employee's eligibility for the premium tax credit will be based on household income for that taxable year, which the employer will not know, the employer will not be able to determine the identity of the employees for which the section 6056 information is relevant. Moreover, given the individualized nature of the information required to be furnished to a full-time employee on a section 6056 employee statement and its intended use in preparing the employee's individual tax return, permitting an employer to furnish such information electronically without first having obtained the employee's consent to such electronic furnishing would be inconsistent with the current procedures for other information returns. Unlike section 6056 employee statements that contain individualized information, SBCs are the same for a particular benefit package under the plan. For these reasons, the regulations require that with respect to each full-time employee to whom the information is required to be furnished, the ALE member must obtain consent from the employee before the section 6056 employee statement may be provided electronically.

With respect to the consent requirement, some ALE members requested that an employee's consent to receive the Form W-2 electronically be deemed a consent to also receive the employee statement under section 6056 electronically. Because an employee cannot provide an informed consent to receive a statement electronically about which he or she does not have information, and because the information furnished on the section 6056 employee statement will be relevant in determining the employee's eligibility for the premium tax credit, any consent given must specifically identify the section 6056 return. Additionally, the requirement for affirmative consent to receive section 6056 employee statements electronically is consistent with the requirements for other tax information returns (See §§ 1.6050S-2; 1.6050S-4; 31.6051-1(j); Rev. Proc. 2012-17, 2012-10 I.R.B. 453; 2014 General Instructions for Forms 1097, 1099, 1098, 3921, 3922, 5498, and W-2G, page 12). Accordingly, the final regulations are consistent with all other tax information reporting regulations and do not adopt this suggestion.

Some commenters also requested confirmation that the section 6056 employee statement and the section 6055 employee statement (if the section 6055 employee statement is provided by the ALE member) may be provided in the same mailing, and in the same mailing as the Form W-2, in cases in which two or more of those forms are provided by mailing to the same employee. Because the final regulations provide for ALE members to combine section 6055 and section 6056 reporting, ALE members will be providing only a single employee statement (with the section 6056 information and, with respect to employers with a self-insured group health plan, section 6055 information). Additionally, there is no requirement that employers mail information returns separately, and the regulations under sections 6051 do not prohibit furnishing in the same mailing as the Form W-2. Accordingly, employers are permitted to mail to an employee in the same mailing one or more of the required information returns such as the combined section 6055 and section 6056 employee statement and the Form W-2.

In developing these regulations, Treasury and the IRS have sought to develop alternative reporting methods that will minimize the cost and administrative tasks for employers, consistent with the statutory requirements to file an information return with the IRS and furnish an employee statement to each full-time employee. Comments suggested that, at least for some employers, the collection, assembling and processing of the necessary data into an appropriate format for filing may not be necessary if the employer offers sufficient coverage to make it unlikely that the employer will be subject to an assessable payment under section 4980H because its employees will generally be ineligible for a premium tax credit. In response to these concerns and as part of the development of the proposed regulations, Treasury and the IRS formulated certain potential simplified reporting methods described in section XI of the preamble to the proposed regulations and requested comments on those methods and on other possible simplified approaches that would minimize compliance costs while providing sufficient and timely information to individual taxpayers and the IRS. After considering all of the comments, Treasury and the IRS have formulated the alternative reporting methods described in this section X of the preamble as optional alternatives to the general reporting method.

The information provided to the IRS and the employee pursuant to section 6056 is important for administering section 4980H and the premium tax credit. However, in some circumstances, only some of the information required under the general method is necessary. Treasury and the IRS have identified specific groups of employees for whom alternative reporting would provide sufficient information, and alternative reporting approaches for these groups are outlined below. In many situations, not every full-time employee of an employer fits into the groups of employees for which an alternative reporting method is available. In that case, the employer would continue to use the general reporting method in the regulations for those full-time employees for whom an alternative reporting method is not applicable. Commenters noted that many employers, especially larger employers, may choose not to use an alternative reporting method because an insufficient number or an insufficient portion of their employees will be eligible for the alternative reporting method so that it is not advantageous to use. However, it is anticipated that many employers will find use of an alternative reporting method preferable to the general reporting method because a sufficient number of their employees will fit into one or more of the alternative method categories described below, and the more extensive reporting will be required only for a sufficiently limited number of their employees.

Subsections A through C of this section X of this preamble describe alternative methods of reporting under section 6056 that are permitted under these final regulations. Each of these methods is optional for the reporting employer, and, except as otherwise specified, does not affect any reporting obligations under section 6055.

Under the final regulations, an ALE member that satisfies specific requirements is permitted to certify that it offered certain coverage (a qualifying offer, as defined in this section X.A.1) to one or more of its full-time employees and to report simplified section 6056 return information with respect to those employees. Under this alternative method, the ALE member also could provide a simplified employee statement in lieu of a copy of the Form 1095-C to each full-time employee who received a qualifying offer for all 12 months of the calendar year. To be eligible to use this alternative method with respect to full-time employees, the ALE member must certify that for all months during the year in which the employee was a full-time employee with respect to whom a section 4980H assessable payment could apply, 13 the ALE member (1) offered minimum essential coverage providing minimum value at an employee cost for employee-only coverage not exceeding 9.5 percent of the mainland single federal poverty line to one or more of its full-time employees, and (2) offered minimum essential coverage to the employee's spouses and dependents (a qualifying offer). For this purpose, the applicable federal poverty line is the federal poverty line as defined in § 54.4980H-1(a)(19), as calculated and applied to the 48 contiguous states and the District of Columbia. If the employee cost of the employee-only coverage does not exceed 9.5 percent of the mainland single federal poverty line, then, regardless of the size of the employee's household or other income or loss of any member of the employee's household, either the employer's coverage will be affordable for purposes of the premium tax credit or the employee's household income will be less than 100 percent of the federal poverty line so the employee will generally not be an applicable taxpayer for purposes of eligibility for the premium tax credit.

For this purpose, an ALE member is treated as offering coverage to an employee's spouse or dependents even if the employee does not have a spouse or dependent, provided that the employee would have been able to elect such coverage if the employee did have a spouse or dependent. Note that an ALE member utilizing the transition relief provided in the final section 4980H regulations pertaining to the offer of coverage to dependents in 2015 will not be treated as offering coverage to an employee's dependents for purposes of this alternative reporting method. Treasury and the IRS anticipate that the certification of eligibility based on the qualifying offer will be made as part of the section 6056 transmittal submitted by the ALE member.

Treasury and the IRS anticipate that an ALE member eligible for and using this certification method will provide further information depending on the circumstances of the qualifying offer. With respect to employees for whom the qualifying offer was made for all 12 months of the calendar year, Treasury and the IRS anticipate that the ALE member will be treated as reporting the required section 6056 information if it completes Form 1095-C by providing particular information about the employee, specifically the employee's name, social security number, and address, and indicates, using an indicator code, that a qualifying offer was made for all 12 months of the calendar year. In addition, the ALE member will be treated as fulfilling the requirement under section 6056 to furnish information to those employees if it provides each of them, by January 31 of the year following the year to which the offer applies, either a copy of the Form 1095-C filed with the IRS, or a general statement in a format prescribed by the IRS informing the employee that the employee, the employee's spouse (if any), and the employee's dependents (if any) received a qualifying offer for all 12 months of the calendar year for which the ALE member is reporting, and therefore the employee and the employee's spouse (if any) and dependents (if any) are generally ineligible for a premium tax credit for all of those 12 months.

Some ALE members may provide a qualifying offer for all 12 months of a calendar year to employees who are employed during the entire year, but are not full-time employees for one or more months during the calendar year. These ALE members may elect to report for these employees using the certification method, and to furnish those employees with a copy of Form 1095-C filed with the IRS or the prescribed statement, or may use the general reporting method with respect to those employees.

For each employee who received a qualifying offer for fewer than 12 months of the calendar year, for example because the full-time employee was an employee for fewer than 12 months of the calendar year (for example, because the employee was hired or terminated employment during the calendar year or was in a permissible waiting period under section 4980H or look-back measurement period under section 4980H for one or more months), the ALE member will file and furnish section 6056 returns and statements under the general reporting method. The ALE member will report information under the general reporting method for those months for which a qualifying offer was not received, but may use an indicator code to report for months for which the qualifying offer was received, in accordance with forms and instructions. However, see section X.A.2 of this preamble for an alternative method applicable to 2015.

Solely for 2015, an ALE member may use an alternative method as described below. To utilize this method the ALE member must (1) certify that it has made a qualifying offer (as described in section X.A.1) to at least 95 percent of its full-time employees and to their spouses and dependents, and (2) in lieu of providing a Form 1095-C (or another form the IRS designates) to its employees, satisfy its section 6056 furnishing requirement with respect to all of its full-time employees by furnishing a statement to each of its full-time employees, by January 31 of the year following the year to which the statement relates. The statement will be in a format prescribed by the IRS and the form of the statement may vary depending on whether the employee received a qualifying offer from the employer for all, some, or none of the months of the calendar year. As with section X.A.1, if the qualifying offer applied to an employee to all 12 months of the calendar year, it is anticipated that the statement will inform the employee that the employee and the employee's spouse (if any) and dependents (if any) will not be eligible to claim a premium tax credit for any of the twelve calendar months. If the qualifying offer did not apply to an employee for all 12 months of the calendar year, it is anticipated the statement will inform the employee that the employee and the employee's spouse (if any) and dependents (if any) may be eligible to claim a premium tax credit for one or more of the 12 calendar months. The statement furnished to the employee must include a contact name and contact telephone number for the ALE member from whom further information may be obtained regarding the offer of coverage that may affect the eligibility of the employee (or any spouse or dependents of the employee) for the premium tax credit. The contact name and telephone number can be a name and telephone number at the ALE member or at another entity, such as a third party administrator, that is authorized to provide information on behalf of the ALE member.

If the ALE member meets the two conditions described above, then the employer will be treated as reporting the required section 6056 information to the IRS if it files with the IRS Form 1095-C, providing the employee's name, social security number, and address, and indicates, using an indicator code, either that a qualifying offer was made for all 12 months or the specific months of the calendar year or it was not, and provides the statement to the employee. Further details will be provided in forms and instructions.

This alternative reporting method for 2015 is optional and an ALE member may use any other available reporting method.

In section XI.B of the preamble to the proposed regulations, Treasury and the IRS stated that they understand that some employers offer minimum essential coverage to all or nearly all of their employees, and are able to accurately represent that the only employees not offered coverage are also not full-time employees. An employer making an offer of minimum essential coverage to all of its full-time employees would not owe an assessable payment under section 4980H(a), which requires such an offer only to 95 percent of an employer's full-time employees. See § 54.4980H-4(a). However, while the employer might know that it is offering such coverage to a group consisting of almost all of its full-time employees and some of its other employees, the employer might not have determined, in the case of each employee in the offeree group, whether that employee is, in fact, a full-time employee or not. This might arise, for example, if an employer offers such coverage to all of its employees whose hours of service average at least 20 hours per week. Section XI.B of the preamble to the proposed regulations suggested a possible approach under which employers offering coverage to 100 percent of their full-time employees would be permitted to provide section 6056 reporting without determining whether each employee offered coverage is a full-time employee and without specifying the number of the employer's full-time employees.

Some commenters requested that eligibility to use this simplified method be expanded to include an employer that can represent that it offered coverage to substantially all of its full-time employees, and requested that “substantially all” be defined for this purpose as at least 95 percent of the full-time employees. These commenters suggested that while some employers may be able to certify that they meet a 100 percent offer standard, other, especially larger, employers could not be certain that an offer had been extended to every full-time employee (including employees who were full-time employees for only certain months of the year).

In response to these concerns, the final regulations relax the condition on use of this simplified method, which allows the employer to report without identifying or specifying the number of full-time employees. To be eligible to use this method under the final regulations, an employer must certify on its transmittal form that it offered, to at least 98 percent of the employees on whom it reports in its section 6056 return. For this purpose, coverage is treated as affordable if the cost of employee-only coverage satisfies any applicable affordability safe harbor under the section 4980H final regulations. Setting the level at 98 percent will help ensure that the employer has offered coverage to at least 95 percent of its full-time employees and therefore is not subject to an assessable payment under section 4980H(a), without knowing which reported employees are full-time and which are part-time. While this alternative method allows reporting without identifying or specifying the number of full-time employees, it does not exempt the employer from any penalties that might apply for failure to report with respect to any full-time employee. Thus, reporting is still required under the normal rules for all full-time employees, including those employees not offered coverage. Accordingly, to the extent the employer fails to report with respect to any full-time employee, the alternative method described here will not affect the application of any generally applicable penalties for failure to report (subject to any relief that might be provided for under these regulations or other applicable guidance), and the possible application of any such penalties will not preclude the employer from using this simplified alternative method if the employer satisfies the 98 percent condition.

As noted, the 98 percent offer is required to provide minimum value and be affordable for purposes of section 4980H to avoid overburdening employers and the IRS with the need to determine at a later date whether a substantial number of employees who received a premium tax credit were full-time employees. If an employer were permitted to report under section 6056 on a large number of employees who were offered coverage that either was not minimum value or not affordable, the reporting could include large numbers of employees who may well be eligible to claim a premium tax credit on the Exchange, without identifying the employee's status as a full-time employee. In such a case, both employers and the IRS would be overburdened with the process of determining at a later date whether any employees who received a premium tax credit were full-time employees with respect to whom the employer is liable for an assessable payment under section 4980H(b). The 98 percent standard helps avoid the need for excessive inquiries to employers as to whether particular employees claiming a premium tax credit were full-time employees.

To assist applicable large employers that are in the smaller size range, such as those with at least 50 full-time employees but fewer than 100 full-time employees (including full-time equivalent employees), in transitioning into compliance with section 4980H, the final regulations provide transition relief from section 4980H for 2015 (plus, in the case of any non-calendar plan year that begins in 2015, the portion of the 2015 plan year that falls in 2016). See section XV.D.6 of the preamble to the final regulations under section 4980H for a description of eligibility conditions for transition relief. (Note section 4980H does not apply to employers with fewer than 50 full-time employees (including full-time equivalent employees)). Employers eligible for this section 4980H transition relief will still report under section 6056 for 2015 in accordance with these final regulations.

As part of this transition relief, the ALE member must certify on its section 6056 transmittal form for calendar year 2015 (that is, for the section 6056 transmittal form that will be filed in 2016), as prescribed by the form and instructions, that it meets the eligibility requirements set forth in section XV.D.6(a)(1) through (3) of the preamble to the final regulations under section 4980H. ALE members with non-calendar year plans will certify with regard to their 2015 plan year, including the months of their 2015 plan year that fall in calendar year 2015, on the section 6056 transmittal form for 2015 (that is for the section 6056 transmittal form that will be filed in 2016), and will certify with regard to the months of their 2015 plan year that fall in calendar year 2016 on the section 6056 transmittal form for 2016 (that is the section 6056 transmittal form that will be filed in 2017).

The alternative reporting methods described above would apply to particular groups of employees that in many cases would not be identical. An employer is permitted to use different alternative reporting methods for different employees at the employer's election, as specified in forms and instructions.

In section IX.B of the preamble to the proposed regulations, Treasury and the IRS stated they were considering whether employers that provide mandatory minimum value coverage to an employee, an employee's spouse, and an employee's dependents, with no employee contribution, could file and furnish only the return required under section 6055, include a code on the employee's Form W-2, and complete only summary information on the section 6056 transmittal form.

This alternative method of reporting was not adopted because its use would leave gaps in information needed for tax administration of the premium tax credit, in particular because codes will not be used on the Form W-2 to report months of mandatory minimum essential coverage providing minimum value.

However, an ALE member that offers no-cost minimum essential coverage providing minimum value coverage to all of its employees will not be liable for a potential assessable payment under section 4980H for any month in which an employee received such an offer. Thus, ALE members will be treated as reporting the required section 6056 information if the employer files a Form 1095-C statement and provides particular information about the employee, specifically the employee's name, social security number, and address, and indicates using a code if the coverage was offered for all 12 calendar months or for some months of the year if, for example, the employee was not full-time in certain months or was no longer employed. The employer must also furnish each employee a copy of the Form 1095-C filed with the IRS. See also section X.A.1., Reporting Based on Certification of Qualifying Offers, of this preamble for a description of alternative reporting available.

If a self-insured employer is an ALE member, the employer will report the coverage information on the part of the Form 1095-C that is required under section 6055. If the ALE member offers no cost mandatory minimum essential coverage providing minimum value to all its employees, it will use an indicator code on the Form 1094-C transmittal to indicate that it offered this type of coverage. Self-insured employers that are not ALE members will file the section 6055 information return under section 6055. Further details will be provided in forms and instructions.

The proposed regulations outlined a possible alternative reporting method under which employers would be permitted in certain circumstances to report offers of minimum value coverage on Form W-2, in accordance with the form and instructions, instead of reporting the offers to the IRS on a section 6056 return or furnishing a section 6056 employee statement to the employee. The proposed regulations specified that this possible alternative method, if permitted, could be used only for an employee employed by the employer for the entire calendar year in which the offer, the individuals to whom the offer is made, and the employee contribution for the lowest-cost option for self-only coverage providing minimum value, all remained the same for all twelve months of the calendar year.

Commenters indicated that such a proposed alternative reporting method, if permitted, would need to be expanded to be available for employees offered coverage under their employer's plan for less than a full calendar year or for whom the offer of coverage changed during the calendar year in order to be useful. Specifically, commenters suggested that additional codes or other modifications to the Form W-2 should be made so that the alternative reporting method could be extended to employees who were not employed for the entire calendar year or not employed as full-time employees during the entire calendar year, were not offered coverage for the entire calendar year, or for whom the cost of coverage changed during the calendar year.

Expanding the alternative reporting method as requested would leave gaps in information that is needed for tax administration. For example, if used for employees who were not employed during the full calendar year, the reporting would not provide any information regarding the particular calendar months for which coverage was offered (or not offered). Even if the employer represented that the coverage was offered during all periods of employment, the reporting could not be reconciled, for example, with another Form W-2 received by the employee from another employer using the same reporting method. That is because while both employers would report the number of months coverage was offered, that information would not be sufficient to determine whether offers of coverage were overlapping (because the employee was employed simultaneously at both employers). Additionally, for months for which coverage was not offered, information as to whether the employee was employed and also the reason coverage was not offered during certain months of the calendar year would not be captured (for example, the employee was in a permissible waiting period under section 4980H or employed but not as a full-time employee).

The specific reason coverage was not offered is relevant to the administration of section 4980H because the failure to offer coverage for certain reasons does not result in an assessable payment under section 4980H for a calendar month, even if the full-time employee receives a premium tax credit for that month. More codes and other data to be reported on the Form W-2 would be needed to administer section 4980H and the premium tax credit.

Commenters noted that, unless expanded, this proposed alternative reporting method would be of little use to most large employers.

Other commenters suggested that the increase in complexity and, in some cases, modifications to the Form W-2, should not be made because the Form W-2 is such an established and integral part of the payroll and tax system. These commenters noted that revising Form W-2 would result in additional administrative burden and substantial added cost to employers given the need to modify the payroll and online systems and could result in delayed furnishing of Forms W-2 to employees or require corrected Forms W-2 to account for new information related to offers of coverage. Commenters further noted that revised Forms W-2 could create confusion among employees, particularly since the addition of information related to offers of coverage would likely result in an increase in the number of pages of the Form W-2, requiring time for employees to understand the changes, and possibly resulting in disruptions in the preparation of individual tax returns. Treasury and the IRS agree with the commenters that the suggested expansions of this alternative reporting method are in some cases not feasible, and in other cases do not provide sufficient administrative simplification to warrant the proposed increase in the complexity of the data reported on the Form W-2. Given that it is not feasible to expand this proposed alternative method, that commenters indicated the method is not workable as proposed because it does not reduce cost or burden for employers, and that other simplified reporting methods are available, including the combination of section 6055 and section 6056 reporting for employers, the final regulations do not adopt this alternative reporting method.

Some commenters have expressed an interest in voluntarily reporting information about the coverage they offer their employees prior to the end of a coverage year, for example at their open enrollment or before the open enrollment at the Exchanges, on the theory that earlier section 6056 reporting to the IRS could lead to greater efficiency in the employer verification system employed by Exchanges to determine eligibility for premium tax credits.

A proposal of this kind would need to address a number of issues. The regulations under section 6103 do not authorize the IRS to share taxpayer information in this manner. Even if this information sharing were permitted, individuals would not receive the information for their tax return preparation proximate to when they are completing their tax returns. In addition, the information about the offer of coverage before the year starts may change during the calendar year. Gaps in complete and timely information increase the need for additional follow-up communication among employers, employees, and the IRS.

Also, offering 2 sets of reporting alternatives with filing occurring at different time periods would present challenges. Because the reporting options would be voluntary, different reporting protocols and regimes would need to be established and would need to accommodate employer choices to change the method of reporting from year to year. The multiple forms, procedures, and protocols would create complexity and be difficult to administer. Accordingly, the final regulations do not adopt this approach.

Some commenters have requested an exemption from reporting for employers that have many employees who are relatively highly paid, on the theory that those employees are unlikely to be eligible for a premium tax credit. The assumption is that a relatively highly paid employee's household income is likely to exceed 400 percent of the federal poverty line and therefore the employee is unlikely to qualify for a premium tax credit. The precondition of a section 4980H(b) assessable payment—that the employee receive a premium tax credit—is unlikely to be satisfied.

Treasury and the IRS have considered this request and have concluded that such an exemption would not be useful for many employers or administrable. Employers would not be in a position to know the correlation between an employee's Form W-2 wages and household income with sufficient accuracy to determine whether an employee may be eligible for the premium tax credit. The only pertinent information the employer retains is the employee's annual wages, yet the poverty level from which the premium tax credit income ceiling is determined varies considerably based on family size (which employers may not know). In addition, employees for whom an employer may use an affordability safe harbor based on wages for purposes of compliance with section 4980H might still be eligible for a premium tax credit based on their household income.

The preamble to the proposed regulations requested comments as to whether there is a level of Form W-2 wages at which such a determination might be made with sufficient confidence, and whether that level of wages would be so high as not to be of practical use to employers. Comments indicated that some employers would be interested in exploring options that would permit them to not file a section 6056 return for an employee if, for example, the employee's wages were $150,000, except if the employer has actual knowledge that the coverage would be unaffordable to the employee's family. Other commenters indicated that if additional follow-up would be required it would create further economic and administrative burden, such that it would be doubtful that the method would be utilized. Additionally, the vast majority of employers would be required to report with respect to at least some full-time employees with lower income than this threshold. Accordingly, the final regulations do not adopt this suggestion.

Under the regulations, in general, each ALE member must file a section 6056 return with respect to its full-time employees for a calendar year.

In accordance with section 6056(e), these regulations provide that in the case of any ALE member that is a governmental unit or any agency or instrumentality thereof (together referred to in this preamble as a governmental unit), that governmental unit may report under section 6056 on its own behalf or may appropriately designate another person or persons to report on its behalf. 14 For purposes of designation, another person is appropriately designated for purposes of the filing and furnishing requirements of section 6056 if that other person is part of or related to the same governmental unit as the ALE member. For example, a political subdivision of a state may designate the state, another political subdivision of the state, or an agency or instrumentality of the foregoing as the designated person for purposes of section 6056 reporting. The person designated might be the governmental unit that operates the relevant health plan or the governmental unit that does other information reporting on behalf of the designating governmental unit. If the designation is accepted by the designee and is made before the filing deadline, the designated governmental unit is the designated entity responsible for section 6056 reporting.

The person (or persons) appropriately designated for this purpose would report under section 6056 on behalf of the ALE member. Accordingly, the person (or persons) appropriately designated is (are) the person(s) responsible for section 6056 reporting on behalf of the ALE member and subject to the penalties for failure to comply with information return requirements under sections 6721 and 6722. However, the ALE member remains subject to section 4980H.

Under these regulations, a separate section 6056 return must be filed for each ALE member for which the appropriately designated person is reporting. The designated entity would provide the name of both the designated entity and the ALE member for which it is reporting. Additionally, the regulations require that there be a single identified section 6056 transmittal (Form 1094-C) reporting aggregate employer-level data for all full-time employees of the ALE member (including full-time employees of the ALE member the reporting for which has been transferred to a designated person), and that there be only one section 6056 employee statement (Form 1095-C) for each full-time employee of the ALE member with respect to employment with that ALE member. Further details will be provided in forms and instructions.

These regulations further provide that the designation under section 6056(e) must be in writing, must contain certain language, must be signed by both the ALE member and the designated person, and must be effective under all applicable laws. These regulations also require that the designation set forth the name and EIN of the designated person, and appoint that person as the person responsible for reporting under section 6056 on behalf of the ALE member. The designation must contain information identifying the category of full-time employees (which may be full-time employees eligible for a specified health plan, or in a particular job category, provided that the specific employees covered by the designation can be identified) for which the designated person is responsible for reporting under section 6056 on behalf of the ALE member. If the designated person is responsible for reporting under section 6056 for all full-time employees of an ALE member, the designation should so indicate.

The designation must also contain language that the designated person agrees that it is the appropriately designated person under section 6056(e), and an acknowledgement that the designated person is responsible for reporting under section 6056 on behalf of the ALE member and subject to the requirements of section 6056 and the information reporting penalty provisions of sections 6721 and 6722. The designation must also set forth the name, address, and EIN of the ALE member, identifying the ALE member as the person subject to the requirements of section 4980H. These regulations provide that an equivalent applicable statutory or regulatory designation containing similar language will be treated as a written designation for purposes of section 6056(e). The designation will not be submitted to the IRS and should be maintained under the normal record-retention rules under section 6103.

Several commenters noted that the unique structure of many multiemployer plans means that some of the information relevant to the section 6056 return, such as the employee contribution (if any) for the lowest-cost self-only coverage providing minimum value, is held by the multiemployer arrangement. On the other hand, some of the information relevant to the section 6056 return, such as whether a participant is a full-time employee for a particular month, is held by the ALE member. As noted by commenters, this may make the preparation, filing, and furnishing of the returns challenging.

In response to this operating structure and its impact on the administration of section 4980H, section XV.E of the preamble to the final regulations under section 4980H provides that until further guidance is issued, employers generally will be treated as having met their obligations under section 4980H with respect to a full-time employee if the employer is required by a collective bargaining agreement (or appropriate related participation agreement) to contribute on behalf of that employee to a multiemployer plan that provides coverage, to individuals who satisfy the plan's eligibility conditions, meeting the affordability and minimum value requirements and that offers coverage to those individuals' dependents. Commenters to the section 6056 proposed regulations noted that an employer could also provide this information with respect to its full-time employees and thereby provide the information to the IRS that is relevant to the administration of section 4980H. However, that reporting would not provide all the relevant information needed to administer the premium tax credit because the employer's contribution to the multiemployer plan on behalf of an employee for a particular calendar month may not necessarily align with whether the plan offered coverage to that particular full-time employee, nor would it provide the amount of the required employee contribution for the lowest-cost self-only coverage providing minimum value.

Some commenters requested that the regulations apply the reporting requirement to the multiemployer plan; however, section 6056 applies the reporting and furnishing requirements only to the employer and not the relevant plan in which the employee participates. In the alternative, commenters requested that the regulations require the multiemployer plan to transfer any information to which it has access that is required to be reported under section 6056 to the contributing employer in a timely manner and form. However, there is no authority under section 6056 or elsewhere in the Code that would permit imposing such a requirement on a multiemployer plan. Furthermore, given that section 6056 does not apply to the multiemployer plan, and that the return relates to the employer's potential liability under section 6056, Treasury and the IRS do not have the statutory authority to transfer the reporting obligations from the relevant employer to the multiemployer plan.

Some commenters suggested that the multiemployer plan be permitted to submit the section 6056 return on behalf of the contributing employers. Treasury and the IRS understand that the plan administrator of a multiemployer plan may have better access than a participating employer to certain information on eligible employees required to be included as part of section 6056 reporting. For this reason, section 6056 reporting with respect to full-time employees on behalf of whom an ALE member contributed to a multiemployer plan is permitted under an approach whereby the multiemployer plan administrator would prepare returns pertaining to the full-time employees covered by the collective bargaining agreement eligible to participate in the multiemployer plan and the ALE member would prepare returns pertaining to the remaining full-time employees (those who are not eligible to participate in a multiemployer plan). The administrator of the multiemployer plan would file a separate section 6056 return for each ALE member that is a contributing employer on behalf of whom it files, providing the name, address, and identification number for both the plan and the ALE member for whom it is reporting. In addition, the multiemployer plan may assist the employer in furnishing statements to the employees.

The regulations also require that there be a single identified section 6056 transmittal (Form 1094-C) reporting aggregate employer-level data for all full-time employees of the ALE member (including full-time employees of the ALE member the reporting for which was done by a multiemployer plan), and that there be only one section 6056 employee statement (Form 1095-C) for each full-time employee of the ALE member with respect to the employee's employment with the ALE member. Further details will be provided in forms and instructions.

The ALE member would remain the responsible person under section 6056 with respect to all of its full-time employees and accordingly would be subject to any potential liability for failure to properly file returns or furnish statements. To the extent the plan administrator that prepares returns or statements required under section 6056 is a tax return preparer, it is subject to the requirements generally applicable to return preparers. See section XII.C for information about third party reporting.

Treasury and the IRS understand that third party administrators or other third party service providers are integral to the operation of many employers' health plans, including with respect to compliance with any reporting requirements. As requested by several commenters, ALE members are permitted to contract with and use third parties to facilitate filing returns and furnishing employee statements to comply with section 6056, although ALE members remain responsible for reporting under section 6056, with the exception of certain governmental unit applicable large employers that properly designate under section 6056(e). While these regulations do not provide guidance on contractual or other reporting arrangements between private ALE members and other parties, they do not prohibit these arrangements. Such contractual arrangements would not transfer the potential liability of the ALE member for failure to report and furnish under section 6056 and the regulations, or the ALE member's potential liability under section 4980H. To the extent the other party that prepares returns or statements required under section 6056 is a tax return preparer, it will be subject to the requirements generally applicable to return preparers.

As one example, an ALE member that is a member of an aggregated group of related entities (determined under section 414(b), 414(c), 414(m) or 414(o)) may facilitate the filing of returns and the furnishing of employee statements on behalf of one or more of the other ALE members of the aggregated group. Each other ALE member of the group, for example, could have the ALE member that operates the employer-sponsored plan facilitate the filing of section 6056 returns and furnish section 6056 employee statements on its behalf.

In general, a separate section 6056 return must be filed for each ALE member, providing that ALE member's EIN. If more than one third party is facilitating reporting for an ALE member, for example, because the ALE member has contracted with two or more third parties each of which will facilitate reporting with respect to certain groups of the ALE member's employees, or if the ALE member reports with respect to some of its employees and has a third party report with respect to other employees, there must be one authoritative section 6056 transmittal (Form 1094-C) reporting aggregate employer-level data for all full-time employees of the ALE member. Additionally, there must be only one section 6056 employee statement (Form 1095-C) for each full-time employee with respect to each employee's employment with the ALE member, so that all required information for a particular full-time employee of the applicable large employer member is reflected on a single Form 1095-C. Further details will be provided in forms and instructions to accommodate third parties in facilitating section 6056 reporting for ALE members (including for third party service providers and multiemployer plan administrators).

These regulations provide that an ALE member that fails to comply with the section 6056 information return and employee statement requirements may be subject to the general reporting penalty provisions under sections 6721 (failure to file correct information returns), and 6722 (failure to furnish correct payee statement). These regulations also provide, however, that the waiver of penalty and special rules under section 6724 and the applicable regulations, including abatement of information return penalties for reasonable cause, apply. The final regulations under section 6055 include amendments to the regulations under sections 6721 and 6722 to include returns under both sections 6055 and 6056 in the definitions of information return and payee statement. The final regulations under section 6056 cross-reference those amendments to the regulations under sections 6721 and 6722.

In implementing new information reporting requirements, short term relief from penalties frequently is provided. This relief generally allows additional time to develop appropriate procedures for collection of data and compliance with these new reporting requirements. After considering the comments received, the IRS will not impose penalties under sections 6721 and 6722 on ALE members that can show they make good faith efforts to comply with the information reporting requirements. Specifically, relief from penalties is provided under sections 6721 and 6722 for returns and statements filed and furnished in 2016 to report offers of coverage in 2015, but only for incorrect or incomplete information reported on the return or statement, including social security numbers. No relief is provided in the case of ALE members that do not make a good faith effort to comply with these regulations or that fail to timely file an information return or statement. However, ALE members that fail to timely meet the requirements of these regulations may be eligible for penalty relief if the IRS determines that the standards for reasonable cause under section 6724 are satisfied.

These regulations are effective March 10, 2014. These regulations apply for calendar years beginning after December 31, 2014. Consistent with Notice 2013-45, reporting entities will not be subject to penalties for failure to comply with the section 6056 information reporting provisions for 2014 (including the provisions requiring the furnishing of employee statements in 2015 with respect to 2014). Accordingly, a reporting entity will not be subject to penalties if it first reports beginning in 2016 for 2015 (including the furnishing of employee statements). Taxpayers are encouraged, however, to voluntarily comply with section 6056 information reporting for 2014 by using any of the available reporting methods set forth in these final regulations.

It has been determined that this Treasury decision is not a significant regulatory action as defined in Executive Order 12866, as supplemented by Executive Order 13563. Therefore, a regulatory assessment is not required. It has also been determined that section 553(b) of the Administrative Procedure Act (5 U.S.C. Chapter 5) does not apply to these regulations.

Sections 603 and 604 of the Regulatory Flexibility Act (5 U.S.C. Chapter 6) (RFA) generally require agencies to prepare a regulatory flexibility analysis addressing the impact of proposed and final regulations, respectively, on small entities. Section 605(b) of the RFA, however, provides that sections 603 and 604 shall not apply if the head of the agency certifies that the rule will not have a significant economic impact on a substantial number of small entities. For the reasons set forth in the following paragraphs, it is hereby certified that these regulations will not have a significant economic impact on a substantial number of small entities.

The regulations under sections 6011 and 6056 affect employers that are applicable large employers, as defined in section 4980H(c)(2). Some small entities fall into this category. Therefore, it has been determined that these regulations will affect a substantial number of small entities. It has also been determined, however, that the economic impact on entities affected by these regulations will not be significant.

The regulations implement the underlying statute and the economic impact is principally a result of the underlying statute, rather than the regulations. The regulations direct employers that are applicable large employers to file information returns with the IRS and to furnish statements to employees providing information as required by section 6056. Specifically, the regulations require applicable large employers, as defined in section 4980H(c)(2), to file a return with the IRS for each full-time employee reporting certain information regarding the health care coverage offered and provided to the employee for the year. The regulations further require applicable large employers to furnish to each full-time employee a copy of the return, or a substitute statement, required to be filed by the applicable large employer with respect to the employee. As discussed in the Summary of Comments and Explanation of Provisions section of the preamble to this Treasury Decision, Treasury and the IRS engaged in dialogue with stakeholders. The final regulations address certain concerns that were expressed by those stakeholders and minimize the cost and administrative steps associated with the reporting requirements. Specifically, the regulations limit the reporting requirements on applicable large employers by only requiring them to file and furnish information that is necessary for the IRS to administer section 4980H and the premium tax credit, and information employees will need in order to complete their tax returns. Additionally, the regulations limit the reporting requirements by providing for alternative optional reporting methods for certain employers that will permit in certain situations an employer to provide more limited information on its return and employer statement, thus lowering that employer's burden.

Based on these facts, a Regulatory Flexibility Analysis under the Regulatory Flexibility Act (5 U.S.C. Chapter 6) is not required.

Pursuant to section 7805(f) of the Code, the proposed regulations preceding these regulations were submitted to the Chief Counsel for Advocacy of the Small Business Administration for comment on its impact on small business.

The principal author of these regulations is Ligeia M. Donis of the Office of the Division Counsel/Associate Chief Counsel (Tax Exempt and Government Entities). However, other personnel from the IRS and Treasury participated in their development.

Accordingly, 26 CFR parts 301 and 602 are amended as follows:

The Saint Lawrence Seaway Development Corporation (SLSDC) and the St. Lawrence Seaway Management Corporation (SLSMC) of Canada, under international agreement, jointly publish and presently administer the St. Lawrence Seaway Tariff of Tolls (Schedule of Fees and Charges in Canada) in their respective jurisdictions. The Tariff sets forth the level of tolls assessed on all commodities and vessels transiting the facilities operated by the SLSDC and the SLSMC. The SLSDC is revising 33 CFR 402.10, “Schedule of tolls”, to reflect the fees and charges levied by the SLSMC in Canada. The changes affect the tolls for commercial vessels and are applicable only in Canada. The collection of tolls by the SLSDC on commercial vessels transiting the U.S. locks is waived by law (33 U.S.C. 988a(a)). Accordingly, no notice or comment is necessary on these amendments.

Privacy Act: Anyone is able to search the electronic form of all comments received into any of our dockets by the name of the individual submitting the comment (or signing the comment, if submitted on behalf of an association, business, labor union, etc.). You may review DOT's complete Privacy Act Statement in the Federal Register published on April 11, 2000 (65 FR 19477-19478) or you may visit www.regulations.gov .

This regulation involves a foreign affairs function of the United States and therefore Executive Order 12866 does not apply and evaluation under the Department of Transportation's Regulatory Policies and Procedures is not required.

I certify this regulation will not have a significant economic impact on a substantial number of small entities. The St. Lawrence Seaway Tariff of Tolls primarily relate to commercial users of the Seaway, the vast majority of whom are foreign vessel operators. Therefore, any resulting costs will be borne mostly by foreign vessels.

This regulation does not require an environmental impact statement under the National Environmental Policy Act (49 U.S.C. 4321, et seq. ) because it is not a major federal action significantly affecting the quality of the human environment.

The Corporation has analyzed this rule under the principles and criteria in Executive Order 13132, dated August 4, 1999, and has determined that this proposal does not have sufficient federalism implications to warrant a Federalism Assessment.

The Corporation has analyzed this rule under Title II of the Unfunded Mandates Reform Act of 1995 (Pub. L. 104-4, 109 Stat. 48) and determined that it does not impose unfunded mandates on State, local, and tribal governments and the private sector requiring a written statement of economic and regulatory alternatives.

This regulation has been analyzed under the Paperwork Reduction Act of 1995 and does not contain new or modified information collection requirements subject to the Office of Management and Budget review.

Accordingly, the Saint Lawrence Seaway Development Corporation is amending 33 CFR part 402 as follows:

Throughout this document whenever “we,” “us,” or “our” is used, we mean EPA.

Organization of this document. The following outline is provided to aid in locating information in this preamble.

On December 24, 2013 (78 FR 77632), EPA published a Notice of Proposed Rulemaking (NPR) for the State of New Hampshire, proposing approval of a SIP revision submitted on August 1, 2012. Specifically, EPA proposed to approve conversion of the Manchester and Nashua current carbon monoxide maintenance plans to a limited maintenance plan for the remainder of the City of Manchester, and the City of Nashua, New Hampshire CO maintenance plans which terminate on January 29, 2021.

EPA also proposed to approve replacement of the CO air quality monitoring in Manchester with carbon monoxide monitoring at the Londonderry Moose Hill station in Londonderry, New Hampshire with triggers to reestablish CO monitoring sites in Manchester and Nashua if elevated CO levels are recorded in Londonderry.

Other specific requirements of the limited maintenance plans for the City of Manchester, New Hampshire and the City of Nashua, New Hampshire, year- round CO monitoring at the Londonderry Moose Hill station in Londonderry, New Hampshire, and the rationale for EPA's approval action are explained in the NPR and will not be restated here. No public comments were received on the NPR.

New Hampshire will monitor CO levels using the Londonderry Moose Hill station and emissions inventories. Because New Hampshire is discontinuing monitoring CO in Manchester, it has adopted a more stringent contingency threshold or “trigger” than indicated in the previously submitted and EPA-approved May 30, 2007 maintenance plan SIP revision. See September 10, 2007; 72 FR 51564. In the event the second highest CO concentration in any calendar year monitored in Londonderry reaches 50 percent of the Federal 1-hour or 8-hour NAAQS for CO, New Hampshire will, as committed to in the August 1, 2012 SIP revision, within six months of recording such concentrations, reestablish the CO monitoring site in Manchester consistent with EPA siting criteria, and resume analyzing and reporting those data. If the reestablished Manchester CO monitor measures a violation of the either the Federal 1-hour or 8-hour NAAQS for CO, contingency measures will be implemented in Manchester and Nashua. Contingency measures in Nashua would cease once a reestablished CO monitor in Nashua shows that the area is in attainment of the CO standard.

If the Manchester or Nashua CO attainment areas monitor CO concentrations at or above the limited maintenance eligibility criteria or 7.65 parts per million, then that maintenance area would no longer qualify for a limited maintenance plan and would revert to a full maintenance plan. In this event, the limited maintenance plan would remain applicable for conformity purposes only until the full maintenance plan is submitted and EPA has found its motor vehicle emissions budgets adequate for conformity purposes or EPA approves the full maintenance plan SIP revision. Any required new conformity determinations could not be made until there is an adequate budget or approved full maintenance plan. At that time, regional emissions analyses would resume as a transportation conformity criteria.

EPA is approving conversion of the Manchester and Nashua current carbon monoxide maintenance plans to a limited maintenance plan for the remainder of the City of Manchester, and the City of Nashua, New Hampshire CO maintenance plans which terminate on January 29, 2021.

EPA is also approving replacement of the CO air quality monitoring in Manchester with carbon monoxide monitoring at the Londonderry Moose Hill station in Londonderry, New Hampshire with triggers to reestablish CO monitoring sites in Manchester and Nashua if elevated CO levels are recorded in Londonderry.

Under the Clean Air Act, the Administrator is required to approve a SIP submission that complies with the provisions of the Act and applicable Federal regulations. 42 U.S.C. 7410(k); 40 CFR 52.02(a). Thus, in reviewing SIP submissions, EPA's role is to approve state choices, provided that they meet the criteria of the Clean Air Act. Accordingly, this action merely approves state law as meeting Federal requirements and does not impose additional requirements beyond those imposed by state law. For that reason, this action:

• Is not a “significant regulatory action” subject to review by the Office of Management and Budget under Executive Order 12866 (58 FR 51735, October 4, 1993);

• does not impose an information collection burden under the provisions of the Paperwork Reduction Act (44 U.S.C. 3501 et seq. );

• is certified as not having a significant economic impact on a substantial number of small entities under the Regulatory Flexibility Act (5 U.S.C. 601 et seq. );

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

• does not have Federalism implications as specified in Executive Order 13132 (64 FR 43255, August 10, 1999);

• is not an economically significant regulatory action based on health or safety risks subject to Executive Order 13045 (62 FR 19885, April 23, 1997);

• is not a significant regulatory action subject to Executive Order 13211 (66 FR 28355, May 22, 2001);

• is not subject to requirements of Section 12(d) of the National Technology Transfer and Advancement Act of 1995 (15 U.S.C. 272 note) because application of those requirements would be inconsistent with the Clean Air Act; and

• does not provide EPA with the discretionary authority to address, as appropriate, disproportionate human health or environmental effects, using practicable and legally permissible methods, under Executive Order 12898 (59 FR 7629, February 16, 1994).

In addition, this rule does not have tribal implications as specified by Executive Order 13175 (65 FR 67249, November 9, 2000), because the SIP is not approved to apply in Indian country located in the state, and EPA notes that it will not impose substantial direct costs on tribal governments or preempt tribal law.

The Congressional Review Act, 5 U.S.C. 801 et seq., as added by the Small Business Regulatory Enforcement Fairness Act of 1996, generally provides that before a rule may take effect, the agency promulgating the rule must submit a rule report, which includes a copy of the rule, to each House of the Congress and to the Comptroller General of the United States. EPA will submit a report containing this action and other required information to the U.S. Senate, the U.S. House of Representatives, and the Comptroller General of the United States prior to publication of the rule in the Federal Register . A major rule cannot take effect until 60 days after it is published in the Federal Register . This action is not a “major rule” as defined by 5 U.S.C. 804(2).

Under section 307(b)(1) of the Clean Air Act, petitions for judicial review of this action must be filed in the United States Court of Appeals for the appropriate circuit by May 9, 2014. Filing a petition for reconsideration by the Administrator of this final rule does not affect the finality of this action for the purposes of judicial review nor does it extend the time within which a petition for judicial review may be filed, and shall not postpone the effectiveness of such rule or action. This action may not be challenged later in proceedings to enforce its requirements. (See section 307(b)(2).)

Part 52 of chapter I, title 40 of the Code of Federal Regulations is amended as follows:

Definitions

For the purpose of this document, we are giving meaning to certain words or initials as follows:

i. The words or initials Act or CAA mean or refer to the Clean Air Act, unless the context indicates otherwise.

ii. The words Colorado and State mean or refer to the State of Colorado.

iii. The words EPA, we, us or our mean or refer to the United States Environmental Protection Agency.

iv. The initials MVEB mean or refer to motor vehicle emissions budget.

v. The initials NAAQS mean or refer to National Ambient Air Quality Standard.

vi. The initials NPR mean or refer to notice of proposed rulemaking.

vii. The initials PM 10 mean or refer to particulate matter with an aerodynamic diameter of less than or equal to 10 micrometers (coarse particulate matter).

viii. The initials SIP mean or refer to State Implementation Plan.

On December 27, 2013, we published a notice of proposed rulemaking (NPR) in which we proposed to partially approve and partially disapprove the revised Pagosa Springs PM 10 Maintenance Plan that Colorado submitted to us on March 31, 2010. (See 78 FR 78797.) We proposed to approve the revised maintenance plan, with the exception of one of its listed contingency measures, because it demonstrates maintenance through 2021 as required by CAA section 175A(b), retains the control measures from the initial PM 10 maintenance plan that EPA approved in June of 2001, and meets other CAA requirements for a section 175A maintenance plan. We proposed to disapprove “voluntary coal and/or wood burning curtailment” as a potential contingency measure in section 5.F.3 of the revised Pagosa Springs PM 10 Maintenance Plan. While we have not required that potential contingency measures be effective without further action by the state, we interpret the CAA as requiring measures that will be enforceable. Voluntary measures may not be widely implemented and, thus, cannot be relied on to ensure prompt emission reductions to correct a violation. We also proposed to exclude from use in determining whether or not Pagosa Springs continues to attain the 24-hour PM 10 NAAQS exceedances of the 24-hour PM 10 NAAQS that were recorded at the Pagosa Springs PM 10 monitor on March 22, 2009, April 3, 2009, April 5, 2010, April 28, 2010, April 29, 2010, May 11, 2010, and May 22, 2010 because they meet the criteria for exceptional events caused by high wind natural events. In addition, we proposed to approve the revised maintenance plan's 2021 transportation conformity MVEB for PM 10 of 946 lbs/day.

We received no comments regarding our proposed actions and are finalizing those actions as proposed. For further details regarding the bases for our actions, please see our NPR at 78 FR 78797 (December 27, 2013).

We are approving the revised Pagosa Springs PM 10 Maintenance Plan that was submitted to us on March 31, 2010, with one exception. We are disapproving “voluntary coal and/or wood burning curtailment” as a potential contingency measure in section 5.F.3 of the revised Pagosa Springs PM 10 Maintenance Plan. We are approving the remainder of the revised maintenance plan because it demonstrates maintenance through 2021 as required by CAA section 175A(b), retains the control measures from the initial PM 10 maintenance plan that EPA approved on June 15, 2001, and meets other CAA requirements for a section 175A maintenance plan. We are excluding from use in determining that Pagosa Springs continues to attain the 24-hour PM 10 NAAQS exceedances of the 24-hour PM 10 NAAQS that were recorded at the Pagosa Springs PM 10 monitor on March 22, 2009, April 3, 2009, April 5, 2010, April 28, 2010, April 29, 2010, May 11, 2010, and May 22, 2010 because they meet the criteria for exceptional events caused by high wind natural events. We are also approving the revised maintenance plan's 2021 transportation conformity MVEB for PM 10 of 946 lbs/day . 1

Under the CAA, the Administrator is required to approve a SIP submission that complies with the provisions of the Act and applicable federal regulations. 42 U.S.C. 7410(k), 40 CFR 52.02(a). Thus, in reviewing SIP submissions, EPA's role is to approve state choices, provided that they meet the criteria of the CAA. This action merely approves state law as meeting Federal requirements and does not impose additional requirements beyond those imposed by state law. For that reason, this action:

• Is not a “significant regulatory action” subject to review by the Office of Management and Budget under Executive Order 12866 (58 FR 51735, October 4, 1993);

• does not impose an information collection burden under the provisions of the Paperwork Reduction Act (44 U.S.C. 3501 et seq. );

• is certified as not having a significant economic impact on a substantial number of small entities under the Regulatory Flexibility Act (5 U.S.C. 601 et seq. );

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

• does not have federalism implications as specified in Executive Order 13132 (64 FR 43255, August 10, 1999);

• is not an economically significant regulatory action based on health or safety risks subject to Executive Order 13045 (62 FR 19885, April 23, 1997);

• is not a significant regulatory action subject to Executive Order 13211 (66 FR 28355, May 22, 2001);

• is not subject to requirements of Section 12(d) of the National Technology Transfer and Advancement Act of 1995 (15 U.S.C. 272 note) because application of those requirements would be inconsistent with the CAA; and,

• does not provide EPA with the discretionary authority to address, as appropriate, disproportionate human health or environmental effects, using practicable and legally permissible methods, under Executive Order 12898 (59 FR 7629, February 16, 1994).

In addition, this rule does not have tribal implications as specified by Executive Order 13175 (65 FR 67249, November 9, 2000), because the SIP is not approved to apply in Indian country located in the State, and EPA notes that it will not impose substantial direct costs on tribal governments or preempt tribal law.

The Congressional Review Act, 5 U.S.C. 801 et seq., as added by the Small Business Regulatory Enforcement Fairness Act of 1996, generally provides that before a rule may take effect, the agency promulgating the rule must submit a rule report, which includes a copy of the rule, to each House of the Congress and to the Comptroller General of the United States. EPA will submit a report containing this action and other required information to the U.S. Senate, the U.S. House of Representatives, and the Comptroller General of the United States prior to publication of the rule in the Federal Register . A major rule cannot take effect until 60 days after it is published in the Federal Register . This action is not a “major rule” as defined by 5 U.S.C. 804(2).

Under section 307(b)(1) of the Clean Air Act, petitions for judicial review of this action must be filed in the United States Court of Appeals for the appropriate circuit by May 9, 2014 Filing a petition for reconsideration by the Administrator of this final rule does not affect the finality of this action for the purposes of judicial review nor does it extend the time within which a petition for judicial review may be filed, and shall not postpone the effectiveness of such rule or action. This action may not be challenged later in proceedings to enforce its requirements. (See CAA section 307(b)(2).)

40 CFR part 52 is amended to read as follows:

On August 20, 2013, NHTSA published a final rule requiring certain vehicle manufacturers to allow the secure electronic transfer of manufacturer recall data to NHTSA when a consumer submits VIN information to the agency's Web site for purposes of learning vehicle recall information. See 78 FR 51382, 51401. This requirement applies to manufacturers who manufacture 25,000 light vehicles annually or 5,000 motorcycles annually. Further information about the requirement to transfer recall data to NHTSA based upon a consumer's VIN may be found in the August 20, 2013 final rule.

In the final rule, NHTSA committed to hosting a public meeting to discuss the technical specification that would facilitate the secure transfer of recall information. That public meeting was held on January 22, 2014, and was attended by vehicle manufacturers, equipment manufacturers, industry trade groups, safety advocates, vehicle history report providers, and members of the public. NHTSA reviewed a VIN look-up tool technical specification document it previously made available to the public for discussion at the meeting, and attendees offered their commentary and suggestions, asked questions, and sought clarification on various points.

Based on the information we received from the public meeting, as well as our review of the specifications, we have adjusted the technical specifications and are making available the final technical specifications. We note that these technical specifications may change to address problems, issues or difficulties that arise from time-to-time during the operation of the VIN-look-up tool. In those situations, the agency will provide notice of its remedies to covered manufacturers through EWR and place the technical specifications on the agency's Web site, www.safercar.gov.

The following summarizes the public meeting:

1. Several manufacturers voiced concern regarding server maintenance scheduling and the technical specifications' instruction for manufacturers to provide information about scheduled server maintenance times to NHTSA. Manufacturers were concerned these set times would not offer enough flexibility to properly maintain their servers. Also, some manufacturers questioned how often their systems were allowed to be off-line for maintenance. The original technical specifications document did not specify how often a manufacturer's servers must be available for VIN look-up searches.

With the revised technical specifications we are announcing today, we are discarding defined maintenance windows in favor of a performance-based requirement. This new requirement is intended to ensure manufacturers' servers are available to report recall results with regularity and during time frames when U.S. users can be expected to send inquiries through our Web site. We have devised a specific error code to be used if and when a manufacturer's servers are unable to accept a request so that we can monitor and track performance, and that will also report out a message to the user that the search cannot be completed at that time, and to try again at another time.

2. Some manufacturers suggested that the technical specifications contain optional fields to include their manufacturer-assigned recall numbers and their contact information (such as toll-free numbers and Web site information) for display on any recall results shown on NHTSA's VIN look-up tool. NHTSA has amended its technical specifications document to add optional data fields to support the transfer of this information.

3. Some manufacturers noted inconsistencies between the information required to be provided on the manufacturer's Web site (or that of a third party to whom consumers are redirected), See 49 CFR 573.15, and NHTSA's VIN look-up tool. We have updated the technical specifications to ensure consistency between the two notification systems.

4. Also discussed were the measures for ensuring the secure transfer of information between a manufacturer and the agency. Consistent with the final rule, the technical specifications required use of SSL and unique API keys to ensure VIN requests and responses are encrypted adequately. Use of SSL and unique API keys is consistent with standard security practices. As noted in the earlier technical specifications, NHTSA will also validate VIN requests by requiring a CAPTCHA, or similar user validation, before contacting manufacturer servers for VIN results.

Manufacturers with early warning reporting (EWR) accounts may obtain a copy of the VIN look-up interface technical specifications through the agency's Web site. To obtain the technical specifications, these manufacturers can use their EWR account credentials to access the secure Web page at http://www.odi.nhtsa.dot.gov/ewr/login.cfm. After logging in to the EWR system, the document labeled “NEW—Technical Specifications for VIN Lookup Interface” can be found on the next page. For any manufacturer, company, or group that does not have an EWR account, please contact Alex Ansley at alexander.ansley@dot.gov to receive a copy of the technical specifications.