Table of Contents I. Background II. The Proposal III. Administrative Law Matters A. Regulatory Flexibility Act B. Paperwork Reduction Act C. Solicitation of Comments on Use of Plain Language I. Background

The Board issued the Policy Statement in 1980 to facilitate the transfer of ownership of small community-based banks in a manner consistent with bank safety and soundness. The Board generally has discouraged the use of debt by bank holding companies to finance the acquisition of banks or other companies because high levels of debt at a bank holding company can impair the ability of the bank holding company to serve as a source of strength to its subsidiary banks. The Board has recognized, however, that small bank holding companies have less access to equity financing than larger bank holding companies and that, therefore, the transfer of ownership of small banks often requires the use of acquisition debt. Accordingly, the Board adopted the Policy Statement to permit the formation and expansion of small bank holding companies with debt levels that are higher than typically permitted for larger bank holding companies. The Policy Statement contains several conditions and restrictions designed to ensure that small bank holding companies that operate with the higher levels of debt permitted by the Policy Statement do not present an undue risk to the safety and soundness of their subsidiary banks.

Currently, the Policy Statement applies to bank holding companies with pro forma consolidated assets of less than $500 million that: (i) Are not engaged in significant nonbanking activities either directly or through a nonbank subsidiary; (ii) do not conduct significant off-balance sheet activities (including securitization and asset management or administration) either directly or through a nonbank subsidiary;  1 and (iii) do not have a material amount of debt or equity securities outstanding (other than trust preferred securities) that are registered with the Securities and Exchange Commission (the foregoing enumerated items referred to hereafter as Qualitative Requirements). Under the Policy Statement, bank holding companies that meet the Qualitative Requirements (qualifying small bank holding companies) may use debt to finance up to 75 percent of the purchase price of an acquisition (that is, they may have a debt-to-equity ratio of up to 3:1), but are subject to a number of ongoing requirements. The principal ongoing requirements are that a qualifying small bank holding company: (i) Reduce its parent company debt in such a manner that all debt is retired within 25 years of being incurred; (ii) reduce its debt-to equity ratio to .30:1 or less within 12 years of the debt being incurred; (iii) ensure that each of its subsidiary insured depository institutions is well capitalized; and (iv) refrain from paying dividends until such time as it reduces its debt-to-equity ratio to 1.0:1 or less. The Policy Statement also specifically provides that a qualifying small bank holding company may not use the expedited applications procedures or obtain a waiver of the stock redemption filing requirements applicable to bank holding companies under the Board's Regulation Y (12 CFR 225.4(b), 225.14, and 225.23) unless the bank holding company has a pro forma debt-to-equity ratio of 1.0:1 or less.

On December 18, 2014, Public Law 113-250 (the Act) was enacted and became immediately effective. 2 The Act directs the Board to publish in the Federal Register proposed revisions to the Policy Statement that provide that the Policy Statement shall apply to bank holding companies and savings and loan holding companies that have pro forma consolidated assets of less than $1 billion. The Board last raised the asset limit in 2006 when it increased it from $150 million to $500 million. 3 The Board is proposing to increase the asset threshold consistent with the Act. The Board is not proposing any modifications to the Qualitative Requirements at this time.

The Act also directs the Board to propose revisions to the Policy Statement that would extend its application to certain savings and loan holding companies. Accordingly, the Board is proposing that a savings and loan holding company would be subject to the Policy Statement if the entity has less than $1 billion in total consolidated assets and satisfies each of the Qualitative Requirements as if the savings and loan holding company were a bank holding company.

The Policy Statement currently applies only to bank holding companies. The Board proposes to apply the Policy Statement to savings and loan holding companies by adding new section 238.9 to Subpart A of Regulation LL. The new section would apply the Policy Statement to a savings and loan holding company with less than $1 billion in total consolidated assets and that meets the Qualitative Requirements as if it were a bank holding company.

This change requires other modifications to the Policy Statement to take account of the status of savings associations under the Bank Holding Company Act of 1956, as amended (BHC Act). The first Qualitative Requirement uses the terms “nonbanking activities” and “nonbank subsidiary” to refer to the activities of a bank holding company. Under the BHC Act, however, control of a savings association by a bank holding company is considered a nonbanking activity. 4 Because savings and loan holding companies control savings associations, all of their activities including the control of savings associations would be considered nonbanking activities under the Policy Statement.

This outcome would be inconsistent with Congressional intent to apply the Policy Statement to savings and loan holding companies. 5 The Board therefore proposes to treat subsidiary savings association of savings and loan holding companies as if they were banks for purposes of applying the Policy Statement.

As is the case with bank holding companies, whether a savings and loan holding company engages in “significant” nonbanking activities will depend on the scope of the activities of the savings and loan holding company, the nature and level of risk of the activities, the condition of the savings and loan holding company, and other criteria as appropriate. 6 Consistent with the Policy Statement's provisions for bank holding companies, the Board also proposes to retain the right to exclude any savings and loan holding company, regardless of size, from the Policy Statement if the Board determines that such action is warranted for supervisory purposes.

The Board proposes to revise Regulation Q to conform the language in part 217 to reflect the proposed additional section to Regulation LL (section 238.9).

A number of reporting, filing, and other provisions in Regulations Y and LL are triggered by the consolidated asset threshold established by the Policy Statement. The Board proposes to make technical and conforming amendments to these provisions to provide that qualifying small bank holding companies and savings and loan holding companies may take advantage of the streamlined informational, notice, and other requirements embodied in these rules. These technical and conforming amendments will provide relief to most bank holding companies and savings and loan holding companies with less than $1 billion of consolidated total assets. The proposed rule would make the following changes:

• In section 217.1(c)(1)(iii), revise Regulation Q (12 CFR part 217) to exclude a savings and loan holding company that is subject to the proposed revised Policy Statement through proposed section 238.9 of the Board Regulation LL (12 CFR part 238).

• In section 225.2(r), footnote 2, revise the footnote describing the application of the definition of “well-capitalized” in the Board's Regulation Y (12 CFR part 225) to entities subject to the proposed revised Policy Statement to reflect the proposed revised total assets threshold of less than $1 billion.

• In section 225.4(b)(2)(iii), increase the threshold for the different pro forma financial information required of smaller bank holding companies compared to larger bank holding companies under section 225.4(b)(1) of the Board's Regulation Y from total assets of less than $500 million to total assets of less than $1 billion.

• In section 225.14(a)(1)(v), increase the threshold for the different pro forma financial information required of smaller bank holding companies compared to larger bank holding companies under section 225.14 of the Board's Regulation Y from total assets of less than $500 million to total assets of less than $1 billion.

• In section 225.17(a)(6), footnote 6, increase the total asset threshold for application of the footnote related to demonstrating that debt incurred will not unduly burden the bank holding company from total assets of less than $500 million to total assets of less than $1 billion.

• In section 225.23(a)(1)(iii), increase the threshold for the different pro forma financial information required of smaller bank holding companies compared to larger bank holding companies under section 225.23 of the Board's Regulation Y from total assets of less than $500 million to total assets of less than $1 billion.

In order to assist the Federal Reserve in monitoring the financial health and operations of bank holding companies, the Board requires all bank holding companies and savings and loan holding companies to file certain reports with the Federal Reserve. Those reports include the Financial Statements for Holding Companies (FR Y-9 series of reports; OMB No. 7100-0128). Currently, savings and loan holding companies with consolidated assets of less than $500 million and bank holding companies with consolidated assets of less than $500 million that also meet Qualitative Requirements submit limited summary parent-only financial data semiannually on the FR Y-9SP. Currently, savings and loan holding companies with consolidated assets of $500 million or more and bank holding companies with consolidated assets of $500 million or more that are not subject to the Policy Statement submit consolidated financial data on the FR Y-9C and parent-only financial data on the FR Y-9LP, both quarterly.

The Board proposes to change the filing requirements for bank holding companies and savings and loan holding companies with $500 million or more but less than $1 billion in total consolidated assets. 7 These institutions would not be required to file the FR Y-9C and the FR Y-9LP (including regulatory capital information) and would begin filing the FR Y-9SP if they also meet the Qualitative Requirements. These changes are proposed to be consistent with the changes to law and the Policy Statement and also to reduce regulatory reporting burden for these smaller institutions. Since most bank holding companies with less than $1 billion in total consolidated assets have limited activities outside of their banks, the Board believes relying on detailed quarterly bank data on the Consolidated Reports of Condition and Income (FFIEC 041; OMB No. 7100-0036) is sufficient for supervisory purposes.

The Board invites comments on all aspects of this proposal. Interested parties are encouraged to provide comments on the proposed $1 billion asset size threshold adjustment, the Policy Statement's application to savings and loan holding companies, related and conforming amendments to Regulations Y and LL, the revision to Regulation Q, and the proposed changes to regulatory reporting.

The Board is providing an initial regulatory flexibility analysis with respect to this proposal. As discussed above, the proposal would reduce regulatory burden on small entities by excluding many bank holding companies and savings and loan holding companies with total consolidated assets of less than $1 billion that meet the Qualitative Requirements from the application of the Board's Regulation Q. In addition, the proposal would reduce the burden of regulatory reporting for bank holding companies and savings and loan holding companies with total consolidated assets of less than $1 billion that meet the Qualitative Requirements by requiring these entities to file the semi-annual FR Y-9SP rather than the quarterly FR Y-9C and FR Y-9LP.

The Regulatory Flexibility Act, 5 U.S.C. 601 et seq. (RFA), generally requires that an agency prepare and make available an initial regulatory flexibility analysis in connection with a notice of proposed rulemaking. Under regulations issued by the Small Business Administration, a small bank holding company, bank, or savings and loan holding company is defined as having assets of $550 million or less (collectively, small banking organizations). 8 As of June 30, 2014, there were approximately 3,719 small bank holding companies and 254 small savings and loan holding companies.

The proposed rule would impact small bank holding companies with total consolidated assets of $500 to $550 million that meet the Qualitative Requirements by providing an exclusion from Regulation Q and the requirement to file the FR Y-9C and FR Y-9LP. The proposed rule would impact all small savings and loan holding companies (those with $550 million or less in assets) that meet the Qualitative Requirements, are currently subject to Regulation Q, and are required to file the FR Y-9C or FR Y-9LP. These small bank holding companies and small savings and loan holding companies would instead be subject to the Policy Statement and would be required to file the FR Y-9SP, a significant reduction in burden. The Board believes that most affected small banking organizations already hold more capital than required under Regulation Q, so the burden reduction from the exclusion from Regulation Q is primarily related to compliance and systems. In addition, affected small banking organizations would be able to take advantage of the applications processing procedures provided to qualifying companies under the Policy Statement.

There are no significant alternatives to the proposed rule that would have less economic impact on small banking organizations, and the proposed rule would significantly reduce burden on nearly all small banking organizations. As discussed above, the projected reporting, recordkeeping, and other compliance requirements of the proposed rule are a material reduction from existing requirements. The Board does not believe that the proposed rule duplicates, overlaps, or conflicts with any other Federal rules. In light of the foregoing, the Board does not believe that the proposed rule, if adopted in final form, would have a significant economic impact on a substantial number of small banking organizations. Nonetheless, the Board seeks comment on whether the proposed rule would impose undue burdens on, or have unintended consequences for, small banking organizations, and whether there are ways such potential burdens or consequences could be minimized in a manner consistent with the purpose of the proposed rule. A final regulatory flexibility analysis will be conducted after consideration of comments received during the public comment period.

In accordance with section 3512 of the Paperwork Reduction Act of 1995 (44 U.S.C. 3501-3521) (PRA), the Board may not conduct or sponsor, and a respondent is not required to respond to, an information collection unless it displays a currently valid Office of Management and Budget (OMB) control number. The OMB control number is 7100-0128. The Board reviewed the proposed rulemaking under the authority delegated to the Board by OMB. The proposed rulemaking contains requirements subject to the PRA. The reporting requirements are found in sections 211.26(c)(2)(i)(A), 217.1(c)(1)(iii), 225.2(r)(footnote 2), 225.4(b)(2)(iii), 225.14(a)(1)(v), 225.17(a)(6)(footnote 6), and 225.23(a)(1)(iii), 238.9.

Comments are invited on:

(a) Whether the proposed collections of information are necessary for the proper performance of the Federal Reserve's functions, including whether the information has practical utility;

(b) The accuracy of the Federal Reserve's estimate of the burden of the proposed information collections, including the validity of the methodology and assumptions used;

(c) Ways to enhance the quality, utility, and clarity of the information to be collected;

(d) Ways to minimize the burden of the information collections on respondents, including through the use of automated collection techniques or other forms of information technology; and

(e) Estimates of capital or startup costs and costs of operation, maintenance, and purchase of services to provide information.

All comments will become a matter of public record. Comments on aspects of this notice that may affect reporting, recordkeeping, or disclosure requirements and burden estimates should be sent to: Secretary, Board of Governors of the Federal Reserve System, 20th and C Streets NW., Washington, DC 20551. A copy of the comments may also be submitted to the OMB desk officer: By mail to U.S. Office of Management and Budget, 725 17th Street NW., #10235, Washington, DC 20503 or by facsimile to 202-395-5806, Attention, Agency Desk Officer.

Title of Information Collection: Consolidated Financial Statements for Holding Companies; Parent Company Only Financial Statements for Large Holding Companies; Parent Company Only Financial Statements for Small Holding Companies; Financial Statements for Employee Stock Ownership Plan Holding Companies; and Supplement to the Consolidated Financial Statements for Holding Companies.

Agency Form Number: FR Y-9C; FR Y-9LP; FR Y-9SP; FR Y-9ES; and FR Y-9CS.

OMB Control Number: 7100-0128.

Frequency of Response: Quarterly, semiannually, annually, and on occasion.

Affected Public: Businesses or other for-profit.

Respondents: Bank holding companies, savings and loan holding companies, and securities holding companies (collectively, holding companies).

Abstract: On December 18, 2014, Public Law 113-250 was signed into law and became effective immediately, which directs the Board to propose revisions to the Policy Statement to raise the total consolidated asset limit in the Policy Statement from $500 million to $1 billion, and expand the scope of the Policy Statement to include savings and loan holding companies.

Pursuant to the PRA's emergency review process, 44 U.S.C. 3507(j), the Board is filing an emergency clearance review to (1) increase the asset size threshold for filing the FR Y-9C and FR Y-9LP from $500 million to $1 billion in total consolidated assets (which also effectively exempted holding companies with total consolidated assets of less than $1 billion from reporting regulatory capital on Schedule HC-R, Regulatory Capital, Part I) and (2) and increase the asset-size threshold for filing the FR Y-9SP from under $500 million to under $1 billion in total consolidated assets. In the emergency submission, the burden for the FR Y-9C, FR Y-9LP, and FR Y-9SP related to the threshold changes, would decrease by 96,619 hours. The change implemented through the emergency clearance process would be effective for six months. The Board is now proposing to make the change permanent and welcomes public comment on any aspect of this information collection. The burden estimates below reflect the updated number from the total emergency clearance review.

Estimated Burden per Response:

FR Y-9C (non-Advanced Approaches bank holding companies)—48.84 hours;

FR Y-9C (Advanced Approaches bank holding companies)—50.09 hours;

FR Y-9LP—5.25 hours;

FR Y-9SP—5.40 hours;

FR Y-9ES—0.5 hours; and

FR Y-9CS—0.5 hours.

Number of respondents:

FR Y-9C (non-Advanced Approaches bank holding companies)—644;

FR Y-9C (Advanced Approaches bank holding companies)—12;

FR Y-9LP—818;

FR Y-9SP—4,390;

FR Y-9ES—86; and

FR Y-9CS—236.

Total estimated annual burden:

FR Y-9C (non-Advanced Approaches bank holding companies)—125,812 hours;

FR Y-9C (Advanced Approaches bank holding companies)—2,404 hours;

FR Y-9LP—17,178 hours;

FR Y-9SP—47,412 hours;

FR Y-9ES—43 hours; and

FR Y-9CS—472 hours. (Total burden 193,321 hours)

Section 722 of the Gramm-Leach-Bliley Act requires the Federal banking agencies to use “plain language” in all proposed and final rules published after January 1, 2000. In light of this requirement, the Board has sought to present the proposed rule in a simple and straightforward manner. The Board invites comments on whether there are additional steps it could take to make the rule easier to understand.

For the reasons set forth in the preamble, chapter II of title 12 of the Code of Federal Regulations is proposed to be amended as set forth below:

The National Marine Sanctuaries Act (NMSA) (16 U.S.C. 1431 et seq. ) authorizes the Secretary of Commerce (Secretary) to designate and protect as a national marine sanctuaries areas of the marine environment that are of special national significance due to their conservation, recreational, ecological, historical, scientific, cultural, archeological, educational, or esthetic qualities. Day-to-day management of national marine sanctuaries has been delegated by the Secretary to the ONMS. The primary objective of the NMSA is to protect the biological and cultural resources of the sanctuary system, such as coral reefs, marine animals, historical shipwrecks, historic structures, and archaeological sites.

Flower Garden Banks National Marine Sanctuary was designated on January 17, 1992 (Pub. L. 102-251, Title I, Sec. 101). At that time, the sanctuary consisted of two areas known as East and West Flower Garden Banks (56 FR 63634). In 1996, Congress added Stetson Bank to the sanctuary (Pub. L. 104-283). FGBNMS regulations were first published on December 5, 1991 (56 FR 63634) and became effective on January 18, 1994 (58 FR 65664). Current FGBNMS regulations can be found at 15 CFR part 922, subpart L.

FGBNMS is located in the northwestern Gulf of Mexico. The banks'salt domes range in depth from 55 feet to over 500 feet, providing conditions supporting several distinct habitats (including the northern-most coral reefs in the continental United States) and essential habitat for a variety of marine species. The combination of location and geology makes the sanctuary an extremely productive and nationally significant ecosystem.

NOAA published a revised FGBNMS Management Plan in April 2012, which described the need to protect additional sensitive biological resources and geological features associated with reefs and banks in the northwestern Gulf of Mexico. The expansion of sanctuary protection for certain critical areas would address concerns about impacts of anchoring, safe access by fishers and divers, damage as a result of unregulated activities, and the need to protect unique features in these areas.

Based on six years of input from the public and the FGBNMS Advisory Council, NOAA developed a Sanctuary Expansion Action Plan as part of the 2012 management plan revision. The action plan's primary purpose was to ”evaluate and expand, as appropriate, the network of protected areas within the sanctuary to include five to twelve additional reefs and banks, and modify the boundary of East and West Flower Garden and Stetson Banks to include critical adjacent habitats.” This proposal was developed in particular by the Sanctuary Advisory Council's (SAC) boundary expansion working group, which was comprised of researchers, oil and gas production representatives, recreational divers, Bureau of Ocean Energy Management (BOEM) representatives, and ONMS staff. The working group met initially in February 2007, and then periodically over the course of 10 months, to discuss the concept in detail. The working group employed a consensus driven, constituent-based process to address the concept of boundary expansion. All participants discussed a variety of issues, considerations, priorities and concerns for each step of the process.

The following recommendation was developed by the working group and adopted as a recommendation to NOAA by the SAC:

In accordance Section 304(e) of the National Marine Sanctuaries Act, as amended (NMSA), 16 U.S.C. 1431 et seq., NOAA is initiating a review of the FGBNMS boundaries to “evaluate and expand, as appropriate” the network of protected areas within the sanctuary. The action under consideration will evaluate options for the expansion of the sanctuary by incorporating selected reefs and banks in the northwestern Gulf of Mexico for their long-term protection and management. An environmental impact statement will describe the various reefs and banks to be considered, alternative scenarios for incorporating additional areas, and NOAA's preferred alternative. In addition, NOAA will analyze various regulatory scenarios for any new potential sanctuary areas, as well as for the existing sanctuary as described in the 2012 final management plan.

The process for considering the expansion of FGBNMS is composed of four primary stages:

1. Information collection and characterization, including the consideration of public comment;

2. Preparation and release of a draft environmental impact statement (DEIS) that identifies boundary expansion alternatives, as well as a notice of proposed rulemaking (NPRM) to amend the sanctuary regulations to reflect any new boundary if proposed;

3. Public review and comment on the DEIS and NPRM;

4. Preparation and release of a final environmental impact statement, including a response to public comments, with a final rule if appropriate.

With this document, NOAA is opening a public comment period to:

1. Gather information and public comments from individuals, organizations, and government agencies on whether FGBNMS should expand its boundary, suggestions for the extent of an expanded boundary, and the potential effects of a boundary expansion; and

2. Help determine the scope of issues to be addressed in the preparation of an environmental analysis under NEPA.

This document confirms that NOAA will fulfill its responsibility under section 106 of the National Historic Preservation Act (NHPA, 16 U.S.C. 470) through the ongoing NEPA process, pursuant to 36 CFR 800.8(a) including the use of NEPA documents and public and stakeholder meetings to meet the section 106 requirements. The NHPA specifically applies to any agency undertaking that may affect historic properties. Pursuant to 36 CFR 800.16(1)(1), historic properties includes any prehistoric or historic district, site, building, structure or object included in, or eligible for inclusion in, the National Register of Historic Places maintained by the Secretary of the Interior. The term includes artifacts, records, and remains that are related to and located within such properties. The term includes properties of traditional religious and cultural importance to an Indian tribe or Native Hawaiian organization and that meet the National Register criteria. In fulfilling its responsibility under the NHPA and NEPA, NOAA intends to identify consulting parties; identify historic properties and assess the effects of the undertaking on such properties; initiate formal consultation with the State Historic Preservation Officer, the Advisory Council of Historic Preservation, and other consulting parties; involve the public in accordance with NOAA's NEPA procedures, and develop in consultation with identified consulting parties alternatives and proposed measures that might avoid, minimize or mitigate any adverse effects on historic properties and describe them in any environmental assessment or draft environmental impact statement.

This document confirms that NOAA will fulfill its responsibility under section 304(a)(5) of the National Marine Sanctuaries Act (NMSA, 16 U.S.C. 1431 et seq. ), which states that the Gulf of Mexico Fishery Management Council (GMFMC) should be provided with the opportunity to prepare draft regulations for fishing within Federal waters, if NOAA pursues the addition of areas within the Gulf of Mexico to the sanctuary and if regulations regarding fishing are needed. The NMSA further declares that draft regulations prepared by the GMFMC, or a GMFMC determination that regulations are not necessary, shall be accepted and issued as proposed regulations unless the GMFMC's action fails to fulfill the purposes and policies of the Act and the goals and objectives of the proposed designation. If the GMFMC declines to make a determination with respect to the need for regulations, makes a determination that is rejected by the Secretary of Commerce, or fails to prepare draft regulations in a timely manner, then NOAA shall prepare fishing regulations.

I. Introduction

The Commission proposes to issue a rule under section 15(j) of the CPSA, 15 U.S.C. 2064(j), which would amend the substantial product hazard list in 16 CFR part 1120 (part 1120). The substantial product hazard list in part 1120 would be amended to add extension cords that lack certain readily observable characteristics. Four characteristics apply to all general-use extension cords (indoor and outdoor extension cords including indoor seasonal extension cords):

(1) Minimum wire size;

(2) sufficient strain relief;

(3) proper polarity; and

(4) proper continuity.

In addition, one characteristic (outlet covers) applies to certain 2-wire indoor extension covers and one characteristic (jacketed insulated cord) applies to outdoor extension cords. Under the proposed amendment to part 1120, extension cords that do not contain one or more of the specified readily observable characteristics would be deemed to create a substantial product hazard under section 15(a)(2) of the CPSA because such products pose a risk of electrical shock or fire. These identified, readily observable characteristics for extension cords have been addressed in a voluntary standard, Underwriters Laboratories (UL), Standard for Cord Sets and Power-Supply Cords, UL 817, 11th Edition, dated March 16, 2001, revised February 3, 2014 (UL 817). 1

As detailed in this notice, the Commission determines preliminarily that:

• Minimum wire size; sufficient strain relief; polarization; continuity; outlet covers (for indoor cords); and flexible jacketed insulation (for outdoor cords) are all readily observable characteristics of extension cords;

• the identified readily observable characteristics are addressed by a voluntary standard, UL 817;

• conformance to UL 817 has been effective in reducing the risk of injury from shock and fire associated with indoor and outdoor extension cords; and

• extension cords sold in the United States substantially comply with UL 817.

Section 223 of the Consumer Product Safety Improvement Act of 2008 (CPSIA), amended section 15 of the CPSA, 15 U.S.C. 2064, to add a new subsection (j). Section 15(j) of the CPSA provides the Commission with the authority to specify, by rule, for any consumer product or class of consumer products, characteristics whose existence or absence are deemed a substantial product hazard under section 15(a)(2) of the CPSA. 15 U.S.C. 2064(j). Section 15(a)(2) of the CPSA defines a “substantial product hazard,” in relevant part, as a product defect which (because of the pattern of defect, the number of defective products distributed in commerce, the severity of the risk, or otherwise) creates a substantial risk of injury to the public. For the Commission to issue a rule under section 15(j) of the CPSA, the characteristics involved must be “readily observable” and have been addressed by a voluntary standard. Moreover, the voluntary standard must be effective in reducing the risk of injury associated with the consumer products; and there must be substantial compliance with the voluntary standard. Id.

The Commission has issued two previous final rules under section 15(j) of the CPSA, codified in 16 CFR part 1120, involving drawstrings on children's upper outerwear (76 FR 42502, July 19, 2011) (drawstring rule) and integral immersion protection on handheld hair dryers (76 FR 37636, June 28, 2011) (hair dryer rule). Additionally, on October 16, 2014, the Commission issued a notice of proposed rulemaking to include seasonal and decorative lighting products in part 1120. 79 FR 62081. The Commission has not defined a “readily observable” characteristic in any rule. In the proposed drawstring rule (75 FR 27497, 27499, May 17, 2010), the Commission found that the requirements detailed in the relevant voluntary standard could be evaluated with “simple manipulations of the garment, simple measurements of portions of the garments, and unimpeded visual observation.” The Commission stated: “more complicated or difficult actions to determine the presence or absence of defined product characteristics also may be consistent with `readily observable.'” The Commission stated its intent to evaluate “readily observable” characteristics on a case-by-case basis. 75 FR at 27499. Finally, in the proposed rule on seasonal and decorative lighting, the Commission determined preliminarily that minimum wire size, sufficient strain relief, and overcurrent protection were “readily observable” characteristics of lighting products through visual observation, or visual observation of a simple measurement. 79 FR at 62082 & 62084-06.

The proposed rule uses the phrase “extension cord” to identify the products that are within the scope of the rule. The Commission proposes to define an “extension cord” (also known as a cord set) as a length of factory-assembled flexible cord with an attachment plug or current tap as a line fitting and with a cord connector as a load fitting. Extension cords are used for extending a branch circuit supply of an electrical outlet to the power-supply cord of a portable appliance, in accordance with the National Electrical Code.® For purposes of the proposed rule, the term applies to extension cords that are equipped with National Electrical Manufacturer Association (NEMA) 1-15, 5-15 and 5-20 fittings, and that are intended for indoor use only or for both indoor and outdoor use. We refer to cords intended for indoor use only as “indoor cords” and to cords intended for both indoor and outdoor use as “outdoor cords.” The term extension cord does not include detachable power supply cords, appliance cords, power strips and taps, and adaptor cords supplied with outdoor tools and yard equipment. The proposed definition is consistent with the description of products subject to the applicable voluntary standard, as set forth in section 1 of UL 817.

Picture 1 depicts products that come under the definition of “extension cord” in the proposed rule. All in-scope products are covered by UL 817. Table 1 provides a non-exhaustive list of examples of extension cords that fall within and out of scope of the proposed rule. Not included in this rule are detachable power supply and appliance cords with non-NEMA fittings and adaptor cords supplied with outdoor tools and yard equipment because these are specific-purpose, rather than general-use, cords. The products that are out of scope for the proposed rule, are not subject to UL 817, or do not present the same risks of injury.

The current voluntary standard applicable to extension cords is UL 817-2014. UL has updated UL 817 over the years to address various safety issues to make extension cords safer, see Staff's Draft Proposed Rule to Add Extension Cords to the Substantial Product Hazard List in 16 CFR part 1120, January 21, 2015 (Staff Briefing Package) Tab B, Extension Cords: Abbreviated History and the Associated UL Standards. The staff's briefing package is available on the CPSC's Web site at: http://www.cpsc.gov/Global/Newsroom/FOIA/CommissionBriefingPackages/2015/Proposed-Rule-to-Amend-Substantia-Product-Hazard-List-to-Include-Extension-Cords.pdf. Since 1987, the standard has addressed most of the identified, readily observable characteristics (minimum wire size, sufficient strain relief, proper polarization, proper continuity, outlet covers for indoor cords, and jacketed insulated cords for outdoor extension cords) that are included in this proposed rule.

Many of the safety requirements for extension cords predate the existence of the CPSC. CPSC staff believes that UL incorporated requirements for polarized (and grounded) plugs and receptacles on cord sets around 1962. A CPSC staff search found that grounded plugs were developed as early as 1911, and polarized plugs became available in 1914. The National Electrical Code (NEC) adopted requirements for polarized electrical outlets in 1948 and for grounded 120-volt receptacles in 1962.

Table 2 summarizes the required characteristics in UL 817 associated with all extension cords, as well as specific requirements for indoor and outdoor use extension cords.

Consumers can be seriously injured or killed by electrical shocks or fires if extension cord products are not constructed properly. All extension cords covered by UL 817 must comply with requirements for minimum wire size, sufficient strain relief, proper polarization, and proper continuity. Meeting these requirements reduces the risk of injury caused by fires or electrical shocks.

• Wire size. Conforming to the minimum wire size requirement in UL 817 supports a product's electrical load to avoid the hazard of fire and electrical shock. When an extension cord does not contain the correct wire size for the load, the cord becomes hot and the insulation is degraded. Damaged insulation can fail by sagging, melting, or hardening and breaking apart, which can expose the energized wire inside the extension cord. Exposed energized wires present a risk of fire and electrical shock. Additionally, conforming to the minimum wire size requirement contributes to the necessary mechanical strength to endure handling and other forces imposed on an extension cord during expected use of the product.

• Strain relief. Conforming to the strain relief requirement in UL 817 helps to ensure that use of extension cords, including pulling and twisting the cords, does not cause mechanical damage to the connections and prevents separation of wires from their terminal connections during handling (pulled, twisted, etc.). Damaged connections, such as broken strands of copper wiring inside the insulated wiring, could cause overheating (leading to a fire) or separation of wires from their terminal connections, which could expose bare energized conductors, leading to electrical shock and fire.

• Proper polarity. An extension cord that conforms to the proper polarity requirements in UL 817 minimizes the risk of accidental contact with an energized conductor. Polarization clearly identifies the energized wire in the cord set and ensures, in conjunction with other construction requirements, that products, such as lighting, appliances, and other equipment plugged into the extension cord provide power in the same orientation as the receptacle of the branch circuit. For example, a product that employs a power switch that must be located in the energized side of the power supply circuit will be supplied in the proper orientation, thus reducing the risk of electrical shock.

• Proper Continuity. An extension cord that conforms to continuity requirements in UL 817 provides a continuous conductive path from line to load fitting so that the cord can serve the function for which it is intended. For each terminal in the plug fitting, a corresponding conductor must be attached to the corresponding terminal in the load fitting. For example, a cord attached to a plug with a grounding pin must have a grounding conductor. Each wire in the cord also must be connected properly on each end so that, for example, the grounding pin of the plug on a three-wire cord is connected to the grounding socket on the outlet, and the energized blade on the plug is not wired to the non-energized receptacle on the outlet. Proper continuity from end to end reduces the risk of both fire and electrical shock.

Indoor and outdoor extension cords each have one additional safety requirement that is also readily observable and reduces the risk of injury.

• Outlet covers. Indoor 2-wire parallel extension cords with polarized parallel-blade and -slot fittings must contain outlet covers. Outlet covers reduce the risk of injury to children, in particular, by minimizing the opportunity for a child to probe plugs with small objects or chew on the exposed receptacle surfaces, which can lead to hand or mouth burns and electrical shock.

• Jacketed cords. Outdoor extension cords must have jacketed cords. A jacketed cord protects the individual insulated wires from damage when exposed to weather and other conditions associated with outdoor use. An unjacketed extension cord used outdoors is susceptible to damage that can lead to exposed conductors, thus presenting a risk of shock and fire.

CPSC has been concerned with the number of fires and injuries resulting from extension cords for many years. CPSC staff searched extension cord incident data from CPSC's Injury or Potential Injury Database (IPII) for both fatal and nonfatal incidents, and staff searched the Death Certificate Database (DTHS) for fatal incidents. Staff limited the scope of the incidents considered to incidents involving fire, burn, and shock hazards. Separate product codes do not exist in CPSC's databases for indoor and outdoor extension cords. Moreover, incident narratives often do not make clear which type of cord was involved. Accordingly, staff's analysis considers indoor and outdoor extension cords together.

Staff's search of IPII data found 716 in-scope fatal extension cord incidents between 1980 and 2013. These incidents caused 1,078 deaths. The search of DTHS found 47 unique (not duplicates of incidents found in IPII) fatal, in-scope incidents that occurred between 1980 and 2013. These 47 incidents led to 47 deaths. In total, the two databases have 763 fatal in-scope extension cord incidents that caused 1,125 deaths between 1980 and 2013.

Table 3 shows the annual average number of incidents for five different periods for fatal incidents, deaths, and nonfatal incidents. The table breaks the 34-year period into four 7-year periods and a 6-year period. Reporting may not be complete for the most recent period because sometimes CPSC receives reports of incidents years after the incidents have occurred. Table 3 shows a decline in the number of reported extension cord fire, burn, and shock fatal incidents, deaths, and nonfatal incidents in CPSC databases from the 1980s.

In numerous instances, CPSC staff has considered the absence of one or more of the identified readily observable characteristics (minimum wire size, sufficient strain relief, proper polarization, proper continuity, outlet covers for indoor cords, and jacketed insulated cords for outdoor extension cords) to present a substantial product hazard and has sought appropriate corrective action to prevent injury to the public. From 1994 to August 2014, as shown in the Staff Briefing Package, Tab D, Extension Cords: Product Recalls and Import Stoppages, Table 1, CPSC staff obtained 29 voluntary recalls of extension cords involving a total of 3.2 million units. In addition to recalls, CPSC staff identified 54 shipments of extension cords at import involving a total of 160,000 units, in which extension cords may not have complied with UL 817. See Staff Briefing Package, Tab D, Table 2. Tables 1 and 2 of Tab D list enforcement actions based on a staff preliminary determination of a substantial product hazard. Most of the hazards listed in Tables 1 and 2 correspond to the readily observable characteristics in the proposed rule. Accordingly, if the proposed rule is finalized, such nonconformance would constitute a Commission-determined substantial product hazard under 16 CFR part 1120.

Additionally, the Office of Compliance sent a letter dated January 9, 2015 to manufacturers, importers, and retailers of extension cords, informing them that the Office of Compliance considers products that do not conform to the UL 817 requirements for the identified readily observable characteristics to be defective and to present a substantial product hazard. See Staff Briefing Package, Tab A, Office of Compliance January 9, 2015 Letter to Manufacturers, Importers, and Retailers of Extension Cords. Accordingly, relevant stakeholders are on notice of the requirements of UL 817 and reporting requirements under section 15 of the CPSA.

Sections 2, 9, 16, 19, 20, 21, 26, 30, 31, 32, 84, and 105 of UL 817 set forth the requirements for the identified readily observable characteristics specified in the proposed rule: Minimum wire size, sufficient strain relief, proper polarization, proper continuity, outlet covers for certain 2-wire indoor cords, and jacketed insulated cords for outdoor extension cords. Table 2 in section I.B.2 of this preamble summarizes the technical requirements for the identified readily observable characteristics in UL 817. Additionally, Tab C of the Staff's Briefing Package, Extension Cords: Readily Observable Safety Characteristics, provides more detail on the information presented in Table 2. If finalized, the rule would deem the absence of any one or more of these specified characteristics to be a substantial product hazard under section 15(a)(2) of the CPSA.

Section 2 of UL 817 specifies a “general-use cord set” using flexible cord as described in Table 20.1 of UL 817 with conductors sized 18, 17, 16, 14, 12, or 10 AWG terminated in a plug and outlet. Extension cords using flexible cord with conductors sized 18 or 17 AWG also require overcurrent protection.

Minimum wire size is readily observable by measuring the bare conductors. Before measuring the wire size, staff must expose the conductors within the wire. Exposing the wire is done quickly and easily by using a small, handheld tool to strip the electrical insulation from the wiring. One method of measurement uses a circular wire gauge, which can determine if the wire size meets the minimum, as specified in UL 817. Picture 2 demonstrates use of a wire gauge to measure wire size. In Picture 2, the 16 AWG wire passes through the 16 AWG slot but not through any of the thinner (numerically larger) AWG slots.

In CPSC staff's experience, extension cords that do not meet the minimum wire size requirement typically fail by using wiring that is substantially undersized for the product; staff has observed products that use wiring that is more than six wire sizes smaller than the minimum required.

The Commission determines preliminarily that minimum wire size, as required in section 2 of UL 817, is a readily observable characteristic of extension cords that can be observed visually by taking a simple measurement of the product's bare wires.

Section 84 of UL817 describes the strain relief test required for all extension cords. Section 84.2.1 specifies that cords with 18AWG or larger conductors must withstand a 30-pound pull force on the connection between the fitting and the cord. Section 84.2.2 of UL 817 specifies that a weight must be steadily suspended from the cord for 1 minute so that the cord is pulled directly from the fitting without the cord pulling loose or stretching from the plug/load fitting. In CPSC staff's experience, a lighting product with insufficient strain relief will typically fail this test within a few seconds of suspending the applicable weight. CPSC engineering staff has found that equivalent results are accomplished by suspending a weight from the body of the fitting, as illustrated in Picture 3.

The Commission determines preliminarily that sufficient strain relief, as required in section 84 of UL 817, is a readily observable characteristic of extension cords that can be observed based on whether an extension cords stretches or breaks when suspending a 30-lb. weight from the plug and load fittings.

Section 19 of UL 817 requires that all two-wire extension cords must have polarized fittings. Sections 31 and 32 of UL 817 require that all two-conductor outdoor extension cords must have polarized fittings and that grounding fittings must be used on three-conductor cords. General UL construction specifications on fittings (Section 9.3 of UL 817) require that polarized outlets must reject improper or reversed insertion of polarized plugs to reduce the risk of shock.

Proper polarization is readily observable by visually inspecting the plug for a difference in the slot and blade widths or for the presence of a grounding pin and a matching outlet opening. Another visually observable method to determine compliance to UL 817 is to insert the plug of the extension cord (or any polarized two-blade plug) into the outlet on the opposite end of the cord using every possible orientation. The plug must fit into the outlet in only one orientation. Pictures 4a and 4b demonstrate two types of polarized plugs. The extension cord shown in picture 4a meets the polarization requirement by using the slot and blade width method, and the extension cord shown in picture 4b meets the requirement using slot and blade width, and a grounding pin.

The Commission determines preliminarily that proper polarization, as required in sections 9, 19, 31, and 32 of UL 817, is a readily observable characteristic of extension cords that can be observed based on a visual inspection of the plug.

Section 16 of UL 817 requires that corresponding terminals of line (plug) and load (outlet) fittings must be connected to the same conductor of the cord. Section 105 of UL 817 prescribes testing requirements for all manufactured extension cords so that the conductors are connected to the intended terminals of the fittings, and that electrical continuity exists throughout the entire length of the conductor/contact assembly. The wires of an extension cord must form continuous paths from one end to the other so the cord can serve the function for which it is intended. Each wire in the cord also must be properly connected on each end so that, for example, the grounding pin of the plug on a three-wire cord is connected to the grounding socket on the outlet, and the energized blade on the plug is not wired to the non-energized receptacle on the outlet.

Continuity is readily observable by checking the plug and outlet connections using a simple battery-light continuity tester. A simple continuity tester can be purchased at hardware stores or from online retailers for $5 to $7. For this procedure, insert one probe of the tester into a receptacle contact (slot or hole) of the extension cord and touch the other probe against each prong (blade or pin) of the extension cord plug. The tester light illuminates when the probes simultaneously touch the correct corresponding conductor terminals. An inexpensive portable ohmmeter or multimeter may also be used in a similar manner. The observation takes less than 1 minute. Picture 5 shows a battery light continuity tester with an extension cord.

The Commission determines preliminarily that proper continuity, as required in sections16 and 105 of UL 817, is a readily observable characteristic of extension cords that can be visually observed using a battery-light continuity tester.

Section 26.7 of UL 817 requires that an indoor 2-wire parallel extension cord with polarized parallel-blade and -slot fittings that has more than one outlet must have covers for all the additional outlets, as illustrated in Picture 6. Outlet covers are readily observable by visually verifying that all but one outlet has an outlet cover.

The Commission determines preliminarily that outlet covers on indoor 2-wire parallel extension cords with polarized parallel-blade and -slot fittings, as required in section 26 of UL 817, are a readily observable characteristic of indoor extension cords by visual inspection for the presence of the covers.

Section 30 of UL 817 requires that extension cords for outdoor use be manufactured using jacketed insulated flexible cord, that is, a cord consisting of two or three insulated wires covered by an additional jacket of insulation.

The required jacket is readily observable through visual observation of the thicker insulation on the cord. The jacket also is observable after cutting the cord. An outer insulator around the individual conductors is easily observed. Picture 7 depicts an example of a jacketed outdoor extension cord.

The Commission determines preliminarily that jacketed insulated cords on outdoor extension cords, as required in section 30 of UL 817, are a readily observable characteristic of outdoor extension cords by visual inspection.

The Commission determines preliminarily that conformance to sections 2, 9, 16, 19, 20, 21, 26, 30, 31, 32, 84, and 105 of UL 817, as summarized in Table 2 in section I.B.2 of this preamble, has been effective in reducing the risk of injury from shock and fire associated with extension cords. Additionally, the CPSC's incident data suggest that conformance to UL 817 has contributed to a decline in the risk of injury associated with extension cords. See Tab E of Staff's Briefing Package, Extension Cords: Fire or Shock Incidents from 1980 to 2013.

Table 3 in section I.B.4 of this preamble lists the reported deaths associated with extension cords from 1980 to 2013. 4 The 34-year period is broken up into four 7-year periods and a 6-year period. Although reporting may not be complete for the most recent period because sometimes CPSC receives reports of incidents years after the incidents have occurred, Table 3 demonstrates that the average numbers of fatal incidents, deaths, and nonfatal incidents have declined since 1980.

Figure 1 presents a 3-year moving average for reported deaths due to extension cords, by year, for the period 1980-2013, 5 for data from the Potential Injury Database (IPII), and the Death Certificate Database (DTHS). Figure 1 shows that the reported number of deaths has declined since as early as 1993, and continued on a downward trend to 2013. This decrease may be due to various factors, such as changes to UL 817, home building codes, and fire-prevention strategies. The reduced number of reported deaths may be partially attributed to the construction and performance requirements in the current UL 817 standard.

Figure 2 presents a 3-year moving average for nonfatal incidents due to extension cord products, by year, for the period 1980-2013, for data from IPII. Figure 2 also demonstrates an overall downward trend during this period, with the exceptions of yearly fluctuations. The decrease can be attributed to several factors, including: Changes to UL 817, enhanced home building code requirements, and fire prevention strategies. The construction and performance requirements in the current UL 817 standard for extension cord products have made the products safer than products manufactured without these construction and performance requirements. As discussed above, the identified characteristics increase the safety of extension cords.

The CPSA does not define “substantial compliance” with a voluntary standard. Legislative history of the CPSA regarding a finding of “substantial compliance” in the context of issuing a consumer product safety standard indicates that substantial compliance should be measured by considering the number of complying products rather than the number of manufacturers of products that comply with a standard. H.R. Rep. No. 208, 97th Cong., 1st Sess. 871 (1981). This same legislative history indicates further that substantial compliance may be found when an unreasonable risk of injury associated with a product will be eliminated or adequately reduced “in a timely fashion.” Id. The Commission has not articulated a bright line rule for substantial compliance. Rather, in the rulemaking context, the Commission has stated that the determination of substantial compliance should be made on a case-by-case basis.

The Commission determines preliminarily that compliance with UL 817 is “substantial” as that term is used in section 15(j) of the CPSA. This determination is based on CPSC staff's review of market information and compliance activity. Staff estimates that the current level of voluntary conformance to UL's standard for extension cords, UL 817, is very high among units sold to consumers in the United States, likely in excess of 90 percent. See Tab F of Staff's Briefing Package, Extension Cords: Information about the Product and Level of Conformance to UL Voluntary Standard.

Limited information is available about the market for extension cords and about producers and sellers. A substantial majority of products that would be subject to the proposed rule appear to be imported, primarily from the People's Republic of China. Other exporting nations named in International Trade Commission (ITC) reports include Mexico, Germany, the Republic of China (Taiwan), and Canada. Some cord sets are produced domestically, and some of these are household products subject to UL 817; however, most domestically produced items appear to be intended for industrial or other commercial use. Based on contacts with industry representatives and a review of online listings, CPSC staff has identified only four domestic producers of extension cords that would be subject to the proposed rule.

Imports of extension cords are enumerated under the ITC's Harmonized Tariff System of the United States (HTS) code 8544.42.9000, “insulated electric conductors, for a voltage not exceeding 1,000 volts, fitted with connectors, not elsewhere specified or included.” This category includes a wide variety of communication and energy transmission cables, components, and related products; data for extension cords are not reported separately. The HTS grouping is analogous to the North American Industry Classification System (NAICS) code 335999 for domestically produced miscellaneous electrical equipment and components; this NAICS code includes 40 distinct product subcategories, including many that are industrial or commercial products. The ITC reported that in 2013 the declared value of imports under this HTS code was about $2.8 billion, comprising about 775,000 entry lines ( i.e., individual shipments) by nearly 11,000 importers (including brokers and shipping companies that file bills of lading). Monthly ITC reports indicate that the category will increase by about 6 percent in 2014, to approximately $3.0 billion in import value. Although no breakdowns of these published aggregate statistics are available, the large number of products involved suggests that only a small proportion of the volume and value of shipments under this HTS code likely are comprised of products that would be subject to the proposed rule.

The ITC tariff database shows that the largest number of import shipments in 2013 originated from China. An online wholesale directory, GlobalSources.com, identified 77 suppliers (including trading companies) in China, Hong Kong, or Taiwan that export extension cords to the United States. Another product directory, Made-in-China.com, identified 798 Chinese suppliers of extension cords and other flexible cords. About 10 to 15 members of the National Electrical Manufacturers Association (NEMA) produce or import extension cords, almost all from China. NEMA reports that all of its members market only UL-conforming products.

Given the large number of firms involved in trade for the wide variety of products in the category, a small minority of such firms likely imports extension cords subject to UL 817; however, even if only 10 percent were subject to the proposed rule, the number of firms would still be substantial at more than 1,000. Some importers market products only to wholesalers and retailers; other importers are also retailers that market directly to consumers, either online or through physical stores. CPSC staff has identified about 20 leading importers, most of which appear to be large, multinational firms; however, a great majority of the importers of extension cords likely are small businesses.

Some of the leading importers market multiple brands of extension cords that would be covered by the proposed rule. Roughly 20 to 25 national brands (including those of several major retailers) are dominant in the consumer market. Some of the lowest-priced products are unbranded.

According to the U.S. Census Bureau, from 2009 to 2013, there was an average of roughly 115 million U.S. households. Extension cords are ubiquitous; a substantial majority of households likely owns at least one cord set. Although no published estimates of usage are available, the number of extension cord-owning households may exceed 100 million. Furthermore, in view of the large number of electrical items found in homes, many households likely have multiple cord sets for indoor and outdoor use.

Extension cords are generally low import value items. Based on the range of observed retail prices, most items probably have an import value (before distribution chain mark-ups) in the range of $1.00 to $10.00 per unit. Observed retail prices of extension cords range from a few dollars (for the least expensive indoor cord sets) to more than $100 (for the largest outdoor cord sets). CPSC staff observed that typical per-unit retail pricing is roughly $5.00 to $10.00 for indoor cord sets, and $15 to $30 for outdoor cord sets. Extension cords represent a minor expenditure for most households.

Information on the numbers of indoor versus outdoor extension cords in use, and on the relative market share of each type, is not available. The indoor cord set dollar value market share is undoubtedly much smaller than the unit share because indoor cord sets, on average, are much lower in price than outdoor cord models.

Recent data on extension cord recalls and import stoppages  6 over the past decade show that relatively few of these products have been affected by enforcement actions. Fewer recalls occurred since 2004 (6 recalls involving 6 importers and 775,000 units) compared to the previous decade (23 recalls involving 22 importers and 2.5 million units); this is generally consistent with the observed decline in reported fire and shock incidents since the late 1980s. The 54 reported import shipment stoppages since 2004 involved 23 importers but only about 160,000 units. Assuming that the Compliance data present a reasonably accurate view of nonconformance, the 29 importers and roughly 1 million products that were either involved in recalls or otherwise identified as potentially violative over the entire last decade represent less than 3 percent of the possible 1,000 importers and an unknown but small percentage of all units sold.

Three testing organizations certify U.S. market extension cords as conforming to UL 817: UL; Intertek Co. (ETL); and CSA Group (CSA, formerly known as the Canadian Standards Association). All three companies perform tests in accordance with the UL standard and sell listing mark rights to manufacturers, importers, or private labelers. Although some products may be defective and fail to conform even though the products carry a listing or certification mark, such incidents appear to be rare. Of the enforcement actions over the past decade described above, only one of the recalls and two of the import stoppages involved extension cords from importers who claim to offer only UL-conforming goods. For purposes of CPSC staff's analysis, all products carrying the UL, ETL, or CSA mark are presumed to be in conformance with UL 817. Leading major retailers appear to offer only UL-listed or similarly certified electrical products. Retailers' specifications may encourage many suppliers to offer only UL-conforming cord sets. Staff's review of retail store offerings and online catalogs and directories revealed two sellers of unlisted extension cords.

Direct data on shipments of conforming versus nonconforming extension cords are not available; however, an approximation of likely UL 817 conformance can be made based on the following points:

• Staff's review of online catalogs and directories revealed 20 to 25 major national brands of extension cords; such products are likely to represent a majority of all units sold for household use. All of these major brands are advertised to be UL-, ETL-, or CSA-listed. CPSC staff has identified only two domestic producers of cord sets that may not conform to UL 817 and has not identified any importers or other domestic manufacturers of unlisted cord sets.

• Major retailers appear to offer only products that conform to the UL standard; these retailers and their online affiliates account for an unknown but large proportion of extension cord sales.

• Available CPSC data on recalls and import violations suggest a very low incidence of defects and nonconformance, in the range of a few percent. A low number of violations is an indicator that conformance to the UL standard is likely very high. CPSC staff estimates that more than 90 percent of extension cords sold to consumers conform.

The proposed rule would add two new paragraphs in part 1120. Proposed § 1120.2(e) would define an “extension cord,” also known as a “cord set,” as a length of factory-assembled flexible cord with an attachment plug or current tap as a line fitting and with a cord connector as a load fitting. Extension cords are used for extending a branch circuit supply of an electrical outlet to the power-supply cord of a portable appliance, in accordance with the National Electrical Code.® As defined in the proposed rule, the term applies to extension cords that are equipped with National Electrical Manufacturer Association (NEMA) 1-15, 5-15 and 5-20 fittings, and that are intended for indoor use only, or for both indoor and outdoor use. The term “extension cord” does not include detachable power supply cords, appliance cords, power strips and taps, and adaptor cords supplied with outdoor tools and yard equipment.

This definition is adapted from descriptions of extension cords defined in section 1 of UL 817. We intend to include within the scope of the proposed rule, indoor and outdoor general-use extension cords that can be used with many different types of electrical appliances. All in-scope products are covered by UL 817. Excluded from the definition are detachable power supply and appliance cords with non-NEMA fittings and adaptor cords supplied with outdoor tools and yard equipment because these are specific-purpose cords, rather than general-use cords. The products that would not be covered by proposed rule are not subject to UL 817, or they do not present the same risks of injury.

Proposed § 1120.3(d)(1) states that extension cords that lack the identified characteristics in accordance with the requirements specified in the relevant sections of UL 817 (sections 2, 9, 16, 19, 20, 21, 26, 30, 31, 32, 84, and 105) of UL 817 are deemed substantial product hazards under section 15(a)(2) of the CPSA:

(i) Minimum wire size requirements in sections 2, 20, 21, 30, and 31 of UL 817;

(ii) Sufficient strain relief requirements in sections 20, 30, and 84 of UL 817;

(iii) Proper polarization requirements in sections 9, 19, 20, 30, 31, and 32 of UL 817;

(iv) Proper continuity requirements in sections 16, 20, 30, and 105 of UL 817;

(v) Outlet cover requirement (for indoor 2-wire parallel extension cords with polarized parallel-blade and -slot fittings) in sections 20 and 26 of UL 817; or

(vi) Jacketed insulated cord requirement (for outdoor use extension cords) in section 30 of UL 817.

These characteristics and the UL 817 requirements are explained in more detail in sections I.B.2 (Table 2) and II.A of this preamble.

Section 15(j) of the CPSA allows the Commission to issue a rule specifying that a consumer product or class of consumer products has characteristics whose presence or absence creates a substantial product hazard. Such a rule would not be a consumer product safety rule, and thus, would not trigger the statutory requirements of a consumer product safety rule. For example, a rule under section 15(j) of the CPSA does not trigger the testing or certification requirements under section 14(a) of the CPSA.

Although a rule issued under section 15(j) of the CPSA is not a consumer product safety rule, placing a consumer product on the substantial product hazard list in 16 CFR part 1120 would have certain ramifications. A product that is or has a substantial product hazard is subject to the reporting requirements of section 15(b) of the CPSA, 15 U.S.C. 2064(b). A manufacturer, importer, distributor, or retailer that fails to report a substantial product hazard to the Commission is subject to civil penalties under section 20 of the CPSA, 15 U.S.C. 2069, and is possibly subject to criminal penalties under section 21 of the CPSA, 15 U.S.C. 2070.

A product that is or contains a substantial product hazard also is subject to corrective action under sections 15(c) and (d) of the CPSA, 15 U.S.C. 2064(c) and (d). Thus, if the Commission issues a final rule under section 15(j) for extension cords, the Commission could order the manufacturer, importer, distributor, or retailer of extension cords that do not contain one or more of the identified readily observable characteristics to offer to repair or replace the product or to refund the purchase price to the consumer.

A product that is offered for import into the United States and is or contains a substantial product hazard shall be refused admission into the United States under section 17(a) of the CPSA, 15 U.S.C. 2066(a). Additionally, CBP has the authority to seize certain products offered for import under the Tariff Act of 1930 (19 U.S.C. 1595a) (Tariff Act), and to assess civil penalties that CBP, by law, is authorized to impose. Section 1595a(c)(2)(A) of the Tariff Act states that CBP may seize merchandise, and such merchandise may be forfeited if: “its importation or entry is subject to any restriction or prohibition which is imposed by law relating to health, safety, or conservation and the merchandise is not in compliance with the applicable rule, regulation, or statute.” Thus, if the proposed rule is finalized, extension cords that violate the rule are subject to CBP seizure and forfeiture.

The Regulatory Flexibility Act (RFA) requires that proposed rules be reviewed for the potential economic impact on small entities, including small businesses. 5 U.S.C. 601-612. Section 603 of the RFA requires agencies to prepare and make available for public comment an Initial Regulatory Flexibility Analysis (IRFA), describing the impact of the proposed rule on small entities and identifying impact-reducing alternatives. The requirement to prepare an IRFA does not apply if the agency certifies that the rulemaking will not have a significant economic impact on a substantial number of small entities. Id. 605. Because the Commission expects that the economic effect on all entities will be minimal, the Commission certifies that the proposed rule will not have a significant economic impact on a substantial number of small entities.

ITC statistics indicate that about 11,000 companies are involved in import trade of products covered under an aggregate HTS code 8544.42.9000 that includes extension cords. The category includes imports of communications cables and many other electrical products and components and counts shipping companies, as well as product sellers. An unknown percentage of these 11,000 firms import items that would be within the scope of the proposed rule on extension cords. The proportion may be small; however, even if only 10 percent were subject to the proposed rule, the number of firms would still be substantial at more than 1,000. The latest available (2011) Census of Manufacturers data from the U.S. Department of Commerce indicate that there are about 400 domestic producers of miscellaneous electrical equipment, including flexible cord and cord sets (North American Industry Classification System (NAICS) code 335999). Based on contacts with industry representatives and a review of online listings, CPSC staff has identified only four firms that manufacture consumer-market extension cords in the United States. Three of these four companies appear to be small businesses.

CPSC staff has identified about 20 to 25 leading importers and one large U.S. manufacturer of extension cords. Some of the leading importers are large general merchandise or building material retailers with their own branded cord sets. Other firms among the top 20 to 25 importers are national brand owners who specialize in wire/cable and related electrical products; these firms are not as large as the major retailers, but would not be considered small under U.S. Small Business Administration (SBA) size standards. Most of the remaining firms are likely small businesses. The total number of small firms is unknown, but may be in the hundreds or even a thousand.

Manufacturers and importers of extension cords typically also market various kinds of electrical or other household products. CPSC staff has identified no companies that market only extension cords. Some smaller importers may not consistently market the same brands of cord sets or import from the same supply sources from year to year.

A proposed rule designating extension cords that do not conform to any one of the five specified provisions of UL 817 as a substantial product hazard will not likely have a significant impact on a substantial number of small businesses or other small entities. This conclusion is based on the following evidence:

• CPSC staff estimates that a very high percentage, probably in excess of 90 percent, of extension cords already conform to UL 817. CPSC staff's examination of products sold by physical and online retailers identified only two sellers of products that did not carry a certification mark or label from one of the three certifying organizations. Manufacturers, importers, distributors, and retailers that market only conforming products would not experience any impacts under the proposed rule. Thus, a substantial majority of firms, including small firms, would be unaffected by the proposed rule and would probably experience zero economic impact.

• To the extent that small importers may market nonconforming cord sets, such firms may market other flexible cord or related products as well. CPSC staff is aware of no firms whose revenues are dependent solely on extension cords. Small importers could either discontinue marketing nonconforming extension cords, or these importers could acquire conforming products. Conforming cord sets are readily available at similar prices, so small importers' incomes would not be significantly affected by the proposed rule, if the firms chose to acquire conforming products. Moreover, product lines should not be significantly curtailed if the firms ceased marketing extension cords altogether. It is unknown whether or how the two small, domestic manufacturers of cord sets that may not conform would be impacted by the proposed rule.

• The proposed rule reflects the existing practice of the CPSC's Office of Compliance and Field Operations to designate extension cords that use undersized wiring, have insufficient strain relief, or lack polarized plugs, electrical continuity, outlet covers, or cord jackets, as substantial product hazards. CPSC staff would continue to seek recalls or other enforcement actions for such products, regardless of the rule's existence.

Generally, the Commission's regulations are considered to have little or no potential for affecting the human environment, and environmental assessments and impact statements are not usually required. See 16 CFR 1021.5(a). The proposed rule to deem extension cords that do not contain one or more of the identified readily observable characteristics to be a substantial product hazard is not expected to have an adverse impact on the environment and is considered to fall within the “categorical exclusion” for the purposes of the National Environmental Policy Act. 16 CFR 1021.5(c).

The proposed rule does not require anyone to create, maintain, or disclose information. Thus, no paperwork burden is associated with the proposed rule, and the Paperwork Reduction Act of 1995 (44 U.S.C. 3501-3520) does not apply.

The proposed rule under section 15(j) of the CPSA would not establish a consumer product safety rule. Accordingly, the preemption provisions in section 26(a) of the CPSA, 15 U.S.C. 2075(a), would not apply to this rule.

The Administrative Procedure Act (APA) generally requires that the effective date of a rule be at least 30 days after publication of a final rule. 5 U.S.C. 553(d). The Commission proposes that any extension cord that does not conform to the specified sections of UL 817 regarding minimum wire size, sufficient strain relief, proper polarization, proper continuity, outlet covers (indoor extension cords), and jacketed insulated cord (outdoor extension cords), be deemed a substantial product hazard effective 30 days after publication of a final rule in the Federal Register . After that date, all extension cords that are subject to, but do not comply with, UL 817 regarding the identified readily observable characteristics, will be deemed to be a substantial product hazard.

The Commission believes that a 30-day effective date is appropriate because substantial conformance exists and because there is longstanding knowledge among importers and manufacturers about the requirements in UL 817. The Office of Compliance sent a letter dated January 9, 2015, to manufacturers, importers, distributors, and retailers of extension cords, informing them that the Office of Compliance considers products that do not conform to UL 817, regarding minimum wire size, sufficient strain relief, proper polarization, proper continuity, covers for outlets (indoor use), and jacketed cords (outdoor), to be defective and present a substantial product hazard. Accordingly, relevant stakeholders are on notice of the requirements of UL 817. Moreover, importers likely will have ample time and opportunity to acquire conforming products, if necessary, from suppliers within normal business cycles before a final rule is promulgated. Based on the available information, the Commission concludes that a 30-day effective date would not likely result in significant impacts on industry or disrupt the supply of conforming products.

The Commission proposes to incorporate by reference certain provisions of UL 817. The Office of the Federal Register (OFR) has regulations concerning incorporation by reference. 1 CFR part 51. The OFR recently revised these regulations to require that, for a proposed rule, agencies must discuss in the preamble of the NPR ways that the materials the agency proposes to incorporate by reference are reasonably available to interested persons or how the agency worked to make the materials reasonably available. In addition, the preamble of the proposed rule must summarize the material. 1 CFR 51.5(a).

In accordance with the OFR's requirements, section I.B.2. of this preamble summarizes the provisions of UL 817 that the Commission proposes to incorporate by reference. Interested persons may purchase a copy of UL 817 from UL, Inc. at 333 Pfingsten Road, Northbrook, IL 60062. The standard is also available for purchase from UL's Web site at http://ulstandards.ul.com/access-standards/. One may also inspect a copy at CPSC's Office of the Secretary, U.S. Consumer Product Safety Commission, Room 820, 4330 East West Highway, Bethesda, MD 20814, telephone 301-504-7923.

The Commission invites interested persons to submit their comments to the Commission on any aspect of the proposed rule. Comments should be submitted as provided in the instructions in the ADDRESSES section at the beginning of this notice.

To ensure that its rules and industry guides remain relevant and are not unduly burdensome, the Commission reviews them on a ten-year schedule. Each year the Commission publishes its review schedule, with adjustments made in response to public input, changes in the marketplace, and resource demands.

When the Commission reviews a rule or guide, it publishes a document in the Federal Register seeking public comment on the continuing need for the rule or guide as well as the rule's or guide's costs and benefits to consumers and businesses. Based on this feedback, the Commission may modify or repeal the rule or guide to address public concerns or changed conditions, or to reduce undue regulatory burden.

The Commission posts information about its review schedule on its Web site, at http://www.ftc.gov/enforcement/rules/rulemaking-regulatory-reform-proceedings, to facilitate comment about rules and guides. This Web site provides links in one location to Federal Register documents requesting comments, and comments for rules and guides that are currently under review. The Web site also contains an updated review schedule, a list of rules and guides previously eliminated in the regulatory review process, and the Commission's regulatory review plan.

For 2015, the Commission intends to initiate reviews of, and solicit public comments on, the following rules:

(1) Contact Lens Rule, 16 CFR part 315. Agency Contact: Alysa Bernstein, (202)-326-3289, Federal Trade Commission, Bureau of Consumer Protection, Division of Advertising Practices, 600 Pennsylvania Ave. NW., Washington, DC 20580.

(2) Preservation of Consumers' Claims and Defenses [Holder in Due Course Rule], 16 CFR part 433. Agency Contact: Heather Allen, (202)-326-2038, Federal Trade Commission, Bureau of Consumer Protection, Division of Financial Practices, 600 Pennsylvania Ave. NW., Washington, DC 20580.

(3) Ophthalmic Practice Rules (Eyeglass Rule), 16 CFR part 456. Agency Contact: Alysa Bernstein, (202)-326-3289, Federal Trade Commission, Bureau of Consumer Protection, Division of Advertising Practices, 600 Pennsylvania Ave. NW., Washington, DC 20580.

The Commission is currently reviewing 18 of the 65 rules and guides within its jurisdiction. The Commission is postponing review of the following matters previously scheduled for review in 2014 and 2015 until 2016: Standards for Safeguarding Customer Information, 16 CFR part 314; and the CAN-SPAM Rule, 16 CFR part 316.

A copy of the Commission's modified regulatory review schedule for 2015 through 2025 is appended. The Commission, in its discretion, may modify or reorder the schedule in the future to incorporate new rules, or to respond to external factors (such as changes in the law) or other considerations.

On January 18, 2011, President Obama issued Executive Order 13563, “Improving Regulation and Regulatory Review.” The Order explains the Administration's goal of creating a regulatory system that protects “public health, welfare, safety, and our environment while promoting economic growth, innovation, competitiveness, and job creation” while using “the best, most innovative, and least burdensome tools to achieve regulatory ends.” The Executive Order required agencies to develop and submit a preliminary plan within 120 days from the January 18 issuance date that explained how each agency reviewed existing significant regulations to identify whether any regulations may be made more effective or less burdensome.

On March 21, 2011, the Department published a Request for Information (RFI) in the Federal Register seeking public input to inform development of its Preliminary Plan and providing an opportunity for the public to identify potential regulations. The Department published its Preliminary Plan for Retrospective Analysis of Existing Rules on May 20, 2011. 1

The Department launched a second interactive Web site on June 2, 2011 and requested public input on certain aspects of the Preliminary Plan.

After receipt and consideration of comments, the Department issued its Plan for Retrospective Analysis of Existing Rules in August 2011.

On May 12, 2012, President Obama issued Executive Order 13610, “Identifying and Reducing Regulatory Burdens.” This Order explained that “it is particularly important for agencies to conduct retrospective analyses of existing rules to examine whether they remain justified and whether they should be modified or streamlined in light of changed circumstances, including the rise of new technologies.” Since August 2011, the Department has issued six updates to its August 2011 Plan.

The Department recognizes the importance of conducting retrospective review of regulations and is once again seeking public comment on how the Department can increase the effectiveness of its significant regulations while minimizing the burden on regulated entities. The Department recognizes that the regulated community, academia, and the public at large have an understanding of its programs and their implementing regulations, and therefore is requesting public comment on how the Department can prepare workers for better jobs, improve workplace safety and health, promote fair and high-quality work environments, and secure a wide range of benefits for employees and those who are seeking work, all in ways that are more effective and least burdensome.

This request for public input will inform development of the Department's future plans to review its existing significant regulations. To facilitate receipt of the information, the Department has created an Internet portal specifically designed to capture your input and suggestions, http://www.dol.gov/regulations/regreview/. The portal contains a series of questions to gather information on how DOL can best meet the requirements of the Executive Order. The portal will be open to receive comments from January 28, 2015 through February 25, 2015.

• What regulations and reporting requirements should be considered for review, modification due to conflicts, inconsistencies, or duplication among the regulations or requirements of the Department's agencies or other federal agencies?

• What reporting requirements and information collections can be streamlined or reduced in frequency while achieving the same level of protections for workers, job-seekers, and retirees? Are there less costly methods, advances in technology, or innovative techniques that can be leveraged toward these purposes?

• What regulatory reforms may require short-term cost increases to the regulated entities while creating longer- term savings, for example, through the adoption of new technologies? What information, data, or technical assistance do regulated entities need in order to better assess these opportunities?

• How should the Department capture information about changes in firm and market behavior in response to a regulation?

• What data or other indicators suggest that the estimated costs and benefits of an existing regulation should be reviewed? What other strategies exist for increasing the flexibility of regulations without limiting important protections?

• What information, data, or other technical assistance do stakeholders require in order to better assess the long-term impact of these reforms upon such protections?

The Department is especially interested in candidates for review for which there is evidence of rapid technological change in a sector that could influence the structure and need for the regulation, whether the chosen regulatory approach will impose large ongoing costs on regulated entities, whether the agency is regulating in an area of significant uncertainty that may be lowered with a future retrospective study, and other similar conditions.

The Department intends the questions on the portal to initiate public dialogue, and does not intend to restrict the issues that may be raised or addressed. The questions were developed with the intent to probe a range of areas, including tools that can be used to prioritize regulations for review; strategies that can be used to increase flexibility of regulations; and measures to ensure scientific integrity of data.

Please note that these questions do not pertain to DOL rulemakings currently open for public comment. To comment on an open rulemaking, please visit regulations.gov and submit comments by the deadline indicated in that rulemaking. Comments that pertain to rulemakings currently open for public comment will not be addressed by the Department in this venue, which focuses on retrospective review.

When addressing the questions in the portal, the Department requests that commenters identify with specificity the regulation or reporting requirement at issue, providing legal citation(s) where available. The Department also requests that submitters provide, in as much detail as possible, an explanation of why a regulation or reporting requirement should be modified, streamlined, expanded, or repealed, as well as specific suggestions of ways the Department can better achieve its regulatory objectives. Whenever possible, please provide empirical evidence and data to support your response.

The Department will consider public comments as we update our plan to review the Department's significant rules. The Department is issuing this request solely to seek useful information as we update our review plan. While responses to this request do not bind the Department to any further actions related to the response, all submissions will be made available to the public on http://www.dol.gov/regulations/regreview/.

I. Statutory and Regulatory Background

Section 504(a)(19) of LSC's FY 1996 appropriations act required LSC recipients to enter into a contract that subjected recipients to “all provisions of Federal law relating to the proper use of Federal funds.” Sec. 504(a)(19), Public Law 104-134, title V; 110 Stat. 1321. By its terms, a violation of Sec. 504(a)(19) renders any LSC grant or contract null and void. The provision has been incorporated by reference into each of LSC's annual appropriations act since. Accordingly, the preamble and text of this proposed rule continue to refer to the appropriate section number of the FY 1996 appropriations act.

The Corporation first issued 45 CFR part 1640 as an interim rule in 1996 to implement Sec. 504(a)(19). 61 FR 45760 (Aug. 29, 1996). The interim rule was put in place to provide immediate guidance to LSC recipients on legislation that was already in effect and carried significant penalties for noncompliance. Id. In the preamble to the interim rule, LSC announced that it was interpreting the statutory phrase “all provisions of Federal law relating to the proper use of Federal funds” to mean “with respect to [a recipient's] LSC funds, all programs should be subject to Federal laws which address issues of waste, fraud and abuse of Federal funds.” Id. LSC based its interpretation on legislative history that appeared to limit the applicable laws to those dealing with fraud, waste, and abuse of Federal funds.

In particular, LSC relied on two congressional documents to support its interpretation. First, the Corporation cited to the House Report for H.R. 2076, which was a prior effort to enact a provision similar to section 504(a)(19). The relevant language in that report stated:

LSC adopted the list of statutes in section 5, with one exception. Through negotiation with LSC's Office of Inspector General (OIG), LSC determined that two other criminal statutes should be included in the list. 61 FR 45760. These statutes prohibit bribery of public officials and witnesses and conspiracy to defraud the United States. Id. at 45761.

Minor changes to the interim rule, not affecting this list, were made before the final rule was published in 1997. 62 FR 19424-19427 (April 21, 1997). LSC has not revised Part 1640 since the publication of the final rule.

Since the final rule was published, Congress has amended or passed other Federal laws relating to the proper use of Federal funds. In 2014, OIG raised concerns that the § 1640.2(a)(1) list of applicable Federal laws is now under-inclusive. As an example, OIG noted the omission of 18 U.S.C. 666, which prohibits theft or bribery concerning programs receiving Federal funds and is the basis for many of OIG's referrals to the Department of Justice for prosecution. Subsequently, LSC staff researched other Federal laws applicable to fraud, waste, and abuse of Federal funds. The search revealed at least two other Federal laws relating to the proper use of Federal funds currently missing from the § 1640.2(a)(1) list: 18 U.S.C. 285—Taking or using papers relating to claims, and 18 U.S.C. 1031—Major fraud against the United States.

In response to OIG's concern, LSC initially considered removing all statutory references from the regulation and instead drafting a definition of “Federal law relating to the proper use of Federal funds” to encompass all the applicable Federal laws without the need to specifically list the statutory references. LSC staff concluded that any possible definition would either narrow the scope of Section 504(a)(19) too much or allow for too broad of an interpretation of the provision. LSC subsequently based its options for revising Part 1640 on two considerations: whether the list of “Federal law relating to the proper use of Federal funds” should remain in Part 1640 or be moved to LSC's Web site, and whether the list should remain exhaustive or be made illustrative. LSC considered whether each option for amending the regulation appropriately balanced the desire for notice to recipients about the “Federal law relating to the proper use of Federal funds” covered by the rule with LSC's interest in expeditiously amending the list of such laws whenever Congress acts to add, repeal, or amend them.

First, the Corporation considered adding the missing statutes to the current § 1640.2(a)(1) list and revising the language to make it clear that the list of statutes is merely illustrative. LSC staff concluded that an illustrative list would not give recipients adequate notice about which laws may be included in this part. Second, LSC considered simply adding the three missing statutes to the current list in § 1640.2(a)(1) and retaining the list's exhaustive nature. LSC staff concluded that this option would not address OIG's concerns about the rule becoming over- or under-inclusive as laws governing the proper use of Federal funds are amended, added, or repealed. Nor would this option improve LSC's ability to update the list in a timely fashion. Finally, LSC considered removing all statutory references from the regulation and instead referring readers to the LSC Web site, where LSC would maintain an easily updated list of applicable statutes. LSC staff concluded that this option would allow LSC more flexibility to update and revise the list of laws in a timely manner. This option would also provide recipients with adequate notice of the applicable laws because LSC would provide a link to the list in the annual contractual agreement.

LSC proposes to adopt this last option using an exhaustive list of statutes. This approach would require a minor modification in the contractual agreement between the Corporation and its recipients, which currently directs recipients to the § 1640.2(a)(1) list. The Corporation refers to this contractual agreement as the “LSC Grant Assurances,” and requires recipients to consent to the agreement annually as a condition of receiving LSC funding. The Grant Assurances would be modified to direct recipients to the Corporation's Web site, where the list of applicable laws would be maintained.

As required by the LSC Rulemaking Protocol, LSC staff prepared an explanatory rulemaking options paper, accompanied by a proposed rule amending Part 1640. On January 22, 2015, the Committee voted to authorize LSC to initiate rulemaking and to recommend that the Board approve publishing the proposed rule. On January 24, 2015, the Board approved the proposed rule for publication in the Federal Register for notice and comment. A section by section analysis of the proposed rule is provided below.

LSC proposes to post the following list of applicable Federal laws relating to the proper use of Federal funds on the Corporation's Web site. The list would be subject to change as legislation changes. LSC seeks comment on both the proposal to remove the list from Part 1640 and the proposed list of statutes.

LSC proposes to revise § 1640.1 to reflect the changes to § 1640.2.

LSC proposes to delete existing § 1640.2(a)(1), redesignate § 1640.2(a)(2) as § 1640.2(b), and redesignate existing § 1640.2(b)(1) and (2) as § 1640.4(a)(1) and (b)(1) respectively.

Proposed § 1640.2(a) states that the Corporation will maintain a public list of applicable Federal laws. The list will be maintained on the Corporation's Web site. The contract between the Corporation and the recipient, currently referred to as the LSC Grant Assurances, will be revised to provide recipients with a link to the list.

Removing the list of statutes from the text of the rule will allow the Corporation to modify the list as needed with approval of the Board, rather than requiring LSC to engage in rulemaking prior to making any necessary changes. This change will allow LSC to update the list more quickly in response to congressional actions adding, amending, or repealing “Federal law relating to the proper use of Federal funds.” Modification of the list with Board approval does not rule out notice and comment for any changes, but it also does not require notice and comment for any changes. LSC will provide recipients with notice any time the list is modified.

Proposed § 1640.2(b) renumbers and revises existing § 1640.2(a)(2) for clarity and readability. LSC made no substantive changes to this subsection.

Recipients are reminded that OIG has statutory responsibility to investigate the activities covered by the applicable Federal laws. Although the contractual agreement with the Corporation would apply only to LSC funds, recipients are further reminded that OIG investigates reports of possible theft or misuse of a recipient's non-LSC funds as well as its LSC funds and would report any theft or misuse that is found to the appropriate Federal or State authorities.

LSC proposes to revise existing § 1640.3 to reflect the removal of the list of Federal law relating to the proper use of Federal funds from § 1640.2. LSC also proposes minor editorial changes to the rule.

LSC proposes to redesignate existing § 1640.2(b)(1) and (2) as § 1640.4(a) and (c) respectively. The proposed move will group each definition in existing § 1640.2(b) with each definition's consequence for violating the agreement in existing § 1640.4. LSC made no substantive changes to this subsection, but has revised the text for clarity.

For the reasons set forth in the preamble, the Legal Services Corporation proposes to revise 45 CFR part 1640 to read as follows:

We published a 90-day finding in the Federal Register on August 19, 2014 (79 FR 49045), on a petition to list the island marble butterfly ( Euchloe ausonides insulanus ) as an endangered species under the Endangered Species Act of 1973, as amended (16 U.S.C. 1531 et seq. ). When we make such a finding that a petition presents substantial information indicating that listing a species may be warranted, we are required to promptly review the status of the species (status review; also commonly referred to as a “12-month finding”). For the status review to be complete and based on the best available scientific and commercial data, we requested information on the island marble butterfly from governmental agencies, Native American tribes, the scientific community, industry, and any other interested parties. However, in the 90-day finding, we incorrectly stated the requested deadline for information submission was December 31, 2016. The correct date by which we request that the public submit information is listed above in the DATES section of this document. Please see the August 19, 2014 (79 FR 49045), publication for details on the items for which we request information.

The authority for this action is the Endangered Species Act of 1973, as amended (16 U.S.C. 1531 et seq. ).

This rule is accessible via the Internet at the Office of the Federal Register Web site at http://www.access.gpo.gov/su_docs/aces/aces140.html. Background information and documents are available at the NMFS West Coast Region Web site at http://www.westcoast.fisheries.noaa.gov/fisheries/management/pacific_halibut_management.html and at the Council's Web site at http://www.pcouncil.org.

The Northern Pacific Halibut Act (Halibut Act) of 1982, 16 U.S.C. 773-773K, gives the Secretary of Commerce (Secretary) general responsibility for implementing the provisions of the Halibut Convention between the United States and Canada (Halibut Convention) (16 U.S.C. 773c). It requires the Secretary to adopt regulations as may be necessary to carry out the purposes and objectives of the Halibut Convention and the Halibut Act. Section 773c of the Halibut Act also authorizes the regional fishery management councils to develop regulations in addition to, but not in conflict with, regulations of the IPHC to govern the Pacific halibut catch in their corresponding U.S. Convention waters.

Each year between 1988 and 1995, the Pacific Fishery Management Council (Council) developed and NMFS implemented a catch sharing plan in accordance with the Halibut Act to allocate the total allowable catch (TAC) of Pacific halibut between treaty Indian and non-Indian harvesters and among non-Indian commercial and sport fisheries in Area 2A. In 1995, NMFS implemented the Pacific Council-recommended long-term Plan (60 FR 14651, March 20, 1995). Every year since then, minor revisions to the Plan have been made to adjust for the changing needs of the fisheries.

For 2015, the Council recommended changes to the non-Indian fishery allocations to increase the California sport allocation. The 2015 Plan recommended by the Council and proposed to be approved by NMFS, allocates 35 percent of the Area 2A Pacific halibut TAC to Washington treaty Indian tribes in Subarea 2A-1, and 65 percent of the Area 2A TAC to non-tribal fisheries. The non-tribal allocation is divided into four separate allocations, which are proposed to be modified for 2015 by reducing the Washington and Oregon sport and commercial allocations each by one percent and increasing the California sport allocation by 3 percent. The shares are proposed to be as follows: The Washington sport fishery (north of the Columbia River) receives 35.6 percent, the Oregon sport fishery receives 29.7 percent (south of the Columbia River), the California sport fishery receives 4.0 percent, and the commercial fishery receives 30.7 percent. The commercial fishery is further divided into a directed commercial fishery allocated 85 percent of the commercial allocation, and incidental catch in the salmon troll fishery that is allocated 15 percent of the commercial allocation. The directed commercial fishery in Area 2A is confined to southern Washington (south of 46°53.30' N. lat.), Oregon, and California. North of 46°53.30' N. lat. (Pt. Chehalis), the Plan allows for incidental halibut retention in the sablefish primary fishery when the overall Area 2A TAC is above 900,000 lb (408.2 mt). The Plan also divides the sport fisheries into seven geographic subareas, each with separate allocations, seasons, and bag limits. The subarea allocations will be included in the final rule for this action after the IPHC has determined the final TAC at their annual meeting January 26-30, 2015. Therefore, this rule does not include subarea allocations, but does contain some dates for the sport fisheries based on the 2015 Plan as recommended by the Council.

The Plan provides that incidental halibut retention in the sablefish primary fishery north of Pt. Chehalis, WA, will be allowed when the Area 2A TAC is greater than 900,000 lb (408.2 mt), provided that a minimum of 10,000 lb (4.5 mt) is available above a Washington recreational TAC of 214,100 lb (97.1 mt). If the TAC is sufficient, the Council will recommend landing restrictions for public review at its March 2015 meeting and make final recommendations at its April 2015 meeting. Following this meeting, NMFS will publish the restrictions in the Federal Register .

Through this proposed rule, NMFS requests public comments on the Pacific Council's recommended modifications to the Plan and the resulting proposed domestic fishing regulations by March 5, 2015. The States of Washington, Oregon, and California will conduct public workshops shortly to obtain input on the sport season dates. Following the proposed rule comment period, NMFS will review public comments and comments from the states, and issue a final rule. Either that final rule or an additional rule will include the IPHC regulations and regulations for the West Coast and Alaska.

Each year, the Washington Department of Fish and Wildlife (WDFW), Oregon Department of Fish and Wildlife (ODFW), California Department of Fish and Game (CDFG), and the tribes with treaty fishing rights for halibut consider whether to pursue changes to the Plan to meet the needs of the fishery. In determining whether changes are needed, the state agencies hold public meetings prior to the Council's September meeting. Subsequently, they recommend changes to the Council at its September meeting. In 2014, fishery managers from all three state agencies held public meetings on the Plan prior to the Council's September meeting. At the September 2014 Council meeting, NMFS, WDFW, ODFW, and CDFW recommended changes to the Plan and codified regulations. The tribes did not recommend any changes to the Plan or regulations. The Council voted to solicit public input on all of the changes recommended by the state agencies, several of which were presented in the form of alternatives. WDFW and ODFW subsequently held public workshops on the recommended changes.

At its November 14-19, 2014, meeting the Council considered the results of state-sponsored workshops on the recommended changes to the Plan and public input provided at the September and November Council meetings, and made its final recommendations for modifications to the Plan. NMFS proposes to adopt all of the Council's recommended changes to the Plan as further discussed below. NMFS also proposed to make a minor change to the codified regulations to update a reference to a NMFS regional office.

1. In section (b), Allocations, this rule proposes several changes to the non- Indian allocations. The California sport fishery allocation is increased from 1 to 4 percent by reducing the Washington and Oregon sport and commercial allocations each by 1 percent. The goal of this change is to provide California with an allocation that is closer to recent effort levels while not substantially reducing the remaining non-Indian allocations.

2. In section (e)(2), NMFS proposes to remove a reference to the “fall salmon troll fisheries” as a trigger for the rollover of quota from the directed halibut fishery to the incidental salmon troll fishery because there is no “fall” salmon fishery.

3. In section (f)(1)(iv), Columbia River subarea, this rule proposes four changes. The allocation to this area is comprised of contributions from the Washington and Oregon sport allocations. The first change proposed in this rule would modify the Oregon contribution from an amount equal to the Washington contribution to 2.3 percent of the overall Oregon sport allocation. The goal of this change is to better comport with recent fishing effort off Oregon. Second, this rule proposes to make the nearshore fishery allocation 500 pounds to better reflect recent effort in the nearshore fishery. Third, the separation of quota into an early and late season is removed to allow for a continuous season. The goal of this change is to have the entire subarea quota available in the early part of the season when effort is generally higher allowing for full attainment of the subarea allocation. In previous years, quota reserved for the late season has not been used because of low effort late in the season. Fourth, flatfish are added to the list of species that may be retained and landed with halibut allowing flatfish species that share habitat with halibut to be landed rather than discarded, to reduce waste.

4. In section (f)(1)(v), Oregon central coast subarea, this rule proposes several changes to the text to implement several measures. First, there is a change to clarify that the allocation to this area is 96 percent of the Oregon sport allocation after the allocation to the Columbia River subarea has been subtracted. Second, incidental flatfish retention is added to this area consistent with the change in the Columbia River subarea. Third, the spring all depth season allocation is modified from 61 to 63 percent of the Central Coast allocation to better reflect recent effort in the spring all depth season. Fourth, the provision that allocated a percentage of the spring fishery allocation to the Southern Oregon subarea is removed and the Southern Oregon subarea allocation is derived from the overall Oregon sport allocation, after the Columbia River allocation has been removed.

5. In section (f)(1)(vi), Southern Oregon subarea, this rule proposes changes to the allocations for this subarea. The allocation is modified from 2 to 4 percent of the Oregon sport allocation after the Columbia River allocation has been subtracted, to better reflect recent effort.

6. In section (f)(1)(vii), California subarea, several changes are proposed to allocations and inseason management. First, the allocation to this subarea is modified from 1 to 4 percent of the non-Indian allocation to allow increased opportunity closer to recent effort levels in the area. Second, the structure of the fishery is modified from a multi-month 7-day-a-week fishery to a fishery that will be open 7 days a week, when open, with season dates recommended by CDFW preseason based on projected catch to attain the subarea allocation. Additionally, provisions allowing for inseason action are added for this subarea. The inseason procedures described for this subarea are identical to the inseason provisions used in the Washington and Oregon subareas.

7. In various sections of the Plan, the term “Northwest Region” is changed to “West Coast Region”, to reflect the recent merger of NMFS offices.

NMFS proposes to approve the Council's recommendations and to implement the changes described above. A version of the Plan including these changes can be found at http://www.westcoast.fisheries.noaa.gov/fisheries/management/pacific_halibut_management.html.

In the regulations at 50 CFR 300.63, the term “Northwest Region” is proposed to be changed to “West Coast Region”, to reflect the recent merger of NMFS offices.

NMFS also proposes sport fishery management measures, including season dates and bag limits, that are necessary to implement the Plan in 2015. The annual domestic management measures are published each year through a final rule. For the 2014 fishing season, the final rule for Area 2A sport fisheries was published on April 4, 2014 (79 FR 18827) and the final rule for the commercial fisheries was published on March 12, 2014 (79 FR 13906) along with the IPHC regulations. Therefore, the section numbers for the commercial fisheries below refer to sections in the March 4 final rule, and the section numbers for the recreational fisheries refer to sections in the April 4 final rule. Where season dates are not indicated, those dates will be provided in the final rule, following consideration of the 2015 TAC and consultation with the states and the public.

In Section 8 of the annual domestic management measures published on March 12, 2014, “Fishing Periods,” paragraphs (2), (3), and (4) are proposed to read as follows:

(1) * * *

(2) Each fishing period in the Area 2A directed fishery shall begin at 0800 hours and terminate at 1800 hours local time on (season dates will be inserted when final rule is published), unless the Commission specifies otherwise.

(3) Notwithstanding paragraph (7) of section 11, an incidental catch fishery is authorized during the sablefish seasons in Area 2A in accordance with regulations promulgated by NMFS. This fishery will occur between 1200 hours local time on (season date will be inserted when final rule is published, if TAC is sufficient to allow incidental retention per Plan provisions).

(4) Notwithstanding paragraph (2), and paragraph (7) of section 11, an incidental catch fishery is authorized during salmon troll seasons in Area 2A in accordance with regulations promulgated by NMFS. This fishery will occur between 1200 hours local time on (season dates will be inserted when final rule is published).

In section 26 of the annual domestic management measures published in the April 4, 2014, final rule, “Sport Fishing for Halibut,” paragraph 1(a)-(b) will be updated with 2015 total allowable catch limits in the final rule. In section 26 of the annual domestic management measures, “Sport Fishing for Halibut” paragraph (8) is proposed to read as follows:

(8) * * *

(a) The area in Puget Sound and the U.S. waters in the Strait of Juan de Fuca, east of a line extending from 48°17.30′ N. lat., 124°23.70′ W. long. north to 48°24.10′ N. lat., 124°23.70′ W. long., is not managed in-season relative to its quota. This area is managed by setting a season that is projected to result in a catch of (subarea allocations will be inserted when final rule publishes).

(i) The fishing season in eastern and western Puget Sound (east and west of 123°49.50′ W. long., Low Point) is (season dates will be inserted when final rule is published).

(ii) The daily bag limit is one halibut of any size per day per person.

(b) The quota for landings into ports in the area off the north Washington coast, west of the line described in paragraph (2)(a) of section 26 and north of the Queets River (47°31.70′ N. lat.), is (subarea allocations will be inserted when final rule publishes).

(i) The fishing seasons are:

(A) Commencing on May 14 and continuing 2 days a week (Thursday and Saturday) until (subarea allocations will be inserted when final rule publishes) are estimated to have been taken and the season is closed by the Commission, or until May 23.

(B) If sufficient quota remains the fishery will reopen on June 4 and/or June 6, continuing 2 days per week (Thursday and Saturday) until there is not sufficient quota for another full day of fishing and the area is closed by the Commission. After May 23, any fishery opening will be announced on the NMFS hotline at 800-662-9825. No halibut fishing will be allowed after May 23 unless the date is announced on the NMFS hotline.

(ii) The daily bag limit is one halibut of any size per day per person.

(iii) Recreational fishing for groundfish and halibut is prohibited within the North Coast Recreational Yelloweye Rockfish Conservation Area (YRCA). It is unlawful for recreational fishing vessels to take and retain, possess, or land halibut taken with recreational gear within the North Coast Recreational YRCA. A vessel fishing in the North Coast Recreational YRCA may not be in possession of any halibut. Recreational vessels may transit through the North Coast Recreational YRCA with or without halibut on board. The North Coast Recreational YRCA is a C-shaped area off the northern Washington coast intended to protect yelloweye rockfish. The North Coast Recreational YRCA is defined in groundfish regulations at § 660.70(a).

(c) The quota for landings into ports in the area between the Queets River, WA (47°31.70′ N. lat.), and Leadbetter Point, WA (46°38.17′ N. lat.), is (subarea allocations will be inserted when final rule publishes).

(i) This subarea is divided between the all-waters fishery (the Washington South coast primary fishery), and the incidental nearshore fishery in the area from 47°31.70′ N. lat. south to 46°58.00′ N. lat. and east of a boundary line approximating the 30 fm depth contour. This area is defined by straight lines connecting all of the following points in the order stated as described by the following coordinates (the Washington South coast, northern nearshore area):

(1) 47°31.70′ N. lat, 124°37.03′ W. long;

(2) 47°25.67′ N. lat, 124°34.79′ W. long;

(3) 47°12.82′ N. lat, 124°29.12′ W. long;

(4) 46°58.00′ N. lat, 124°24.24′ W. long.

The south coast subarea quota will be allocated as follows: (subarea allocations for the primary and nearshore fisheries will be inserted when final rule publishes). The primary fishery commences on May 3, and continues 2 days a week (Sunday and Tuesday) until May 19. If the primary quota is projected to be obtained sooner than expected, the management closure may occur earlier. Beginning on May 31 the primary fishery will be open at most 2 days per week (Sunday and/or Tuesday) until the quota for the south coast subarea primary fishery is taken and the season is closed by the Commission, or until September 30, whichever is earlier. The fishing season in the nearshore area commences on May 3, and continues 7 days per week. Subsequent to closure of the primary fishery, the nearshore fishery is open 7 days per week, until (subarea allocations will be inserted when final rule publishes) is projected to be taken by the two fisheries combined and the fishery is closed by the Commission or September 30, whichever is earlier. If the fishery is closed prior to September 30, and there is insufficient quota remaining to reopen the northern nearshore area for another fishing day, then any remaining quota may be transferred in-season to another Washington coastal subarea by NMFS via an update to the recreational halibut hotline.

(ii) The daily bag limit is one halibut of any size per day per person.

(iii) Seaward of the boundary line approximating the 30-fm depth contour and during days open to the primary fishery, lingcod may be taken, retained and possessed when allowed by groundfish regulations at 50 CFR 660.360, subpart G.

(iv) Recreational fishing for groundfish and halibut is prohibited within the South Coast Recreational YRCA and Westport Offshore YRCA. It is unlawful for recreational fishing vessels to take and retain, possess, or land halibut taken with recreational gear within the South Coast Recreational YRCA and Westport Offshore YRCA. A vessel fishing in the South Coast Recreational YRCA and/or Westport Offshore YRCA may not be in possession of any halibut. Recreational vessels may transit through the South Coast Recreational YRCA and Westport Offshore YRCA with or without halibut on board. The South Coast Recreational YRCA and Westport Offshore YRCA are areas off the southern Washington coast established to protect yelloweye rockfish. The South Coast Recreational YRCA is defined at 50 CFR 660.70(d). The Westport Offshore YRCA is defined at 50 CFR 660.70(e).

(d) The quota for landings into ports in the area between Leadbetter Point, WA (46°38.17′ N. lat.), and Cape Falcon, OR (45°46.00′ N. lat.), is (subarea allocations will be inserted when final rule publishes).

(i) This subarea is divided into an all-depth fishery and a nearshore fishery. The nearshore fishery is allocated 500 pounds of the subarea allocation. The nearshore fishery is restricted to the area shoreward of the boundary line approximating the 30 fm (55 m) depth contour from Leadbetter Point to the Washington/Oregon border and the boundary line approximating the 40 fm (73 m) depth contour in Oregon. The nearshore fishery opens May 4, and continues 3 days per week (Monday—Wednesday) until the nearshore allocation is taken, or September 30, whichever is earlier. The all depth fishing season commences on May 1, and continues 4 days a week (Thursday—Sunday) until (subarea allocations will be inserted when final rule publishes) are estimated to have been taken and the season is closed by the Commission, whichever is earlier. Subsequent to this closure, if there is insufficient quota remaining in the Columbia River subarea for another fishing day, then any remaining quota may be transferred inseason to another Washington and/or Oregon subarea by NMFS via an update to the recreational halibut hotline. Any remaining quota would be transferred to each state in proportion to its contribution.

(ii) The daily bag limit is one halibut of any size per day per person.

(iii) Pacific Coast groundfish may not be taken and retained, possessed or landed, except sablefish, Pacific cod, and flatfish species when allowed by Pacific Coast groundfish regulations, when halibut are on board the vessel, during days open to the all depth fishery only.

(iv) Taking, retaining, possessing, or landing halibut on groundfish trips is only allowed in the nearshore area on days not open to all-depth Pacific halibut fisheries.

(e) The quota for landings into ports in the area off Oregon between Cape Falcon (45°46.00′ N. lat.) and Humbug Mountain (42°40.50′ N. lat.), is (subarea allocations will be inserted when final rule publishes).

(i) The fishing seasons are:

(A) The first season (the “inside 40-fm” fishery) commences July 1, and continues 7 days a week, in the area shoreward of a boundary line approximating the 40-fm (73-m) depth contour, or until the sub-quota for the central Oregon “inside 40-fm” fishery of (subarea allocations will be inserted when final rule publishes), or any in-season revised subquota, is estimated to have been taken and the season is closed by the Commission, whichever is earlier. The boundary line approximating the 40-fm (73-m) depth contour between 45°46.00′ N. lat. and 42°40.50′ N. lat. is defined at § 660.71(k).

(B) The second season (spring season), which is for the “all-depth” fishery, is open (season dates will be inserted when final rule is published). The projected catch for this season is (subarea allocations will be inserted when final rule publishes). If sufficient unharvested quota remains for additional fishing days, the season will re-open. Depending on the amount of unharvested quota available, the potential season re-opening dates will be: (season dates will be inserted when final rule is published). If NMFS decides inseason to allow fishing on any of these re-opening dates, notice of the re-opening will be announced on the NMFS hotline (206) 526-6667 or (800) 662-9825. No halibut fishing will be allowed on the re-opening dates unless the date is announced on the NMFS hotline.

(C) If sufficient unharvested quota remains, the third season (summer season), which is for the “all-depth” fishery, will be (season dates will be inserted when final rule is published) or until the combined spring season and summer season quotas in the area between Cape Falcon and Humbug Mountain, OR, are estimated to have been taken and the area is closed by the Commission, or October 31, whichever is earlier. NMFS will announce on the NMFS hotline in July whether the fishery will re-open for the summer season in August. No halibut fishing will be allowed in the summer season fishery unless the dates are announced on the NMFS hotline. Additional fishing days may be opened if sufficient quota remains after the last day of the first scheduled open period on (insert date of last open period). If, after this date, an amount greater than or equal to 60,000 lb (27.2 mt) remains in the combined all-depth and inside 40-fm (73-m) quota, the fishery may re-open every Friday and Saturday, beginning (insert date of first back up dates) and ending October 31. If after September 7, an amount greater than or equal to 30,000 lb (13.6 mt) remains in the combined all-depth and inside 40-fm (73-m) quota, and the fishery is not already open every Friday and Saturday, the fishery may re-open every Friday and Saturday, beginning September 5 and 6, and ending October 31. After September 7, the bag limit may be increased to two fish of any size per person, per day. NMFS will announce on the NMFS hotline whether the summer all-depth fishery will be open on such additional fishing days, what days the fishery will be open and what the bag limit is.

(ii) The daily bag limit is one halibut of any size per day per person, unless otherwise specified. NMFS will announce on the NMFS hotline any bag limit changes.

(iii) During days open to all-depth halibut fishing, no Pacific Coast groundfish may be taken and retained, possessed or landed, except sablefish, Pacific cod, and flatfish species, when allowed by Pacific Coast groundfish regulations, if halibut are on board the vessel.

(iv) When the all-depth halibut fishery is closed and halibut fishing is permitted only shoreward of a boundary line approximating the 40-fm (73-m) depth contour, halibut possession and retention by vessels operating seaward of a boundary line approximating the 40-fm (73-m) depth contour is prohibited.

(v) Recreational fishing for groundfish and halibut is prohibited within the Stonewall Bank YRCA. It is unlawful for recreational fishing vessels to take and retain, possess, or land halibut taken with recreational gear within the Stonewall Bank YRCA. A vessel fishing in the Stonewall Bank YRCA may not possess any halibut. Recreational vessels may transit through the Stonewall Bank YRCA with or without halibut on board. The Stonewall Bank YRCA is an area off central Oregon, near Stonewall Bank, intended to protect yelloweye rockfish. The Stonewall Bank YRCA is defined at § 660.70(f).

(f) The quota for landings into ports in the area south of Humbug Mountain, OR (42° 40.50′ N. lat.) to the Oregon/California Border (42° 00.00′ N. lat.) is (subarea allocations will be inserted when final rule publishes).

(i) The fishing season commences on May 1, and continues 7 days per week until the subquota is taken, or October 31, whichever is earlier.

(ii) The daily bag limit is one halibut per person with no size limit.

(g) The quota for landings into ports south of the Oregon/California Border (42° 00.00′ N. lat.) and along the California coast is (subarea allocations will be inserted when final rule publishes).

(i) The fishing season will be open (season dates will be inserted when final rule is published).

(ii) The daily bag limit is one halibut of any size per day per person.

Regulations governing the U.S. fisheries for Pacific halibut are developed by the IPHC, the Pacific Fishery Management Council, the North Pacific Fishery Management Council, and the Secretary of Commerce. Section 5 of the Northern Pacific Halibut Act of 1982 (Halibut Act, 16 U.S.C. 773c) provides the Secretary of Commerce with the general responsibility to carry out the Convention between Canada and the United States for the management of Pacific halibut, including the authority to adopt regulations as may be necessary to carry out the purposes and objectives of the Convention and Halibut Act. This proposed rule is consistent with the Secretary of Commerce's authority under the Halibut Act.

This proposed rule has been determined to be not significant for purposes of Executive Order 12866.

The Regulatory Flexibility Act (RFA), 5 U.S.C. 603 et seq., requires government agencies to assess the effects that regulatory alternatives would have on small entities, including small businesses, and to determine ways to minimize those effects. When an agency proposes regulations, the RFA requires the agency to prepare and make available for public comment an Initial Regulatory Flexibility Analysis (IRFA) that describes the impact on small businesses, non-profit enterprises, local governments, and other small entities. The IRFA is to aid the agency in considering all reasonable regulatory alternatives that would minimize the economic impact on affected small entities. After the public comment period, the agency prepares a Final Regulatory Flexibility Analysis (FRFA) that takes into consideration any new information or public comments. A summary of the IRFA is provided below. The reasons why action by the agency is being considered, the objectives and legal basis for this rule are described above.

The main management objective for the Pacific halibut fishery in Area 2A is to manage fisheries to remain within the TAC for Area 2A. Another main objective is to allow each commercial, recreational (sport), and tribal fishery to target halibut in the manner that is appropriate to meet both the conservation requirements for species that co-occur with Pacific halibut. A third main objective is to meet the needs of fishery participants in particular fisheries and fishing areas.

Each year, the states of Washington, Oregon, California, and the treaty tribes that fish for halibut meet with their fishery participants to review halibut management under the Plan. Based on feedback from these meetings and experience from the previous year's fishing season, the states or the tribes may propose changes to the Plan. Proposed changes to the Plan are intended to remedy any problems encountered during the previous year's management, problems with other fisheries with overlapping management jurisdiction ( i.e., Pacific Coast groundfish), or other anticipated problems. For 2015, the Pacific Council recommended changes to the Plan that affect the recreational (sport) and commercial fisheries. In this rule, NMFS proposes to adopt the Council's recommended changes to the Plan, revise the annual sport fishery measures to reflect the changes to the Plan and update them with 2015 dates, and make changes to the codified regulations to update references to NMFS regional offices to reflect a recent NMFS merger. Final allocations will be included in the final rule for this action following the final TAC decision by the IPHC. The proposed changes do not affect the tribal fisheries.

The 2A Halibut Catch Sharing Plan, as outlined above, allocates the TAC at various levels. The commercial fishery is further divided into a directed commercial fishery that is allocated 85 percent of the commercial allocation of the Pacific halibut TAC, and incidental catch in the salmon troll fishery that is allocated 15 percent of the commercial allocation. The directed commercial fishery in Area 2A is confined to southern Washington (south of 46°53.30′ N. lat.), Oregon, and California. North of 46°53.30′ N. lat. (Pt. Chehalis), the Plan allows for incidental halibut retention in the sablefish primary fishery when the overall Area 2A TAC is above 900,000 lb (408.2 mt). The Plan also divides the sport fisheries into seven geographic subareas, each with separate allocations, seasons, and bag limits. The non-tribal allocation is divided into four shares. At the first level, there are specific percentage allocations for tribal and non-tribal fisheries. The non-tribal portion is then allocated to commercial components and to recreational components. The commercial component is then apportioned into directed, incidental troll, and incidental sablefish fisheries. The recreational portions for Oregon and Washington are furthered apportioned into area subquotas and these subquotas are further split into seasonal or depth fisheries (nearshore vs all depths). There may be gear restrictions and other management measures established as necessary to minimize the potential for the allocations to be exceeded.

At the September meeting, the Council adopted a range of Plan alternatives for public review. For 2015, the Council adopted two types of Plan changes that are discussed separately below. The first were the routine recreational fishery adjustments proposed by the states each year to accommodate the needs of their fisheries. The second were allocation changes to both the non-treaty commercial and recreational fisheries in order to increase the California allocation. The Council made final Plan change recommendations from this range at its November meeting.

For the non-allocation Plan changes the Council considered changes to the Columbia River, Oregon Central Coast, Southern Oregon, and California subareas. For the Columbia River subarea the Council considered: (1) Status quo seasonal management in a spring and summer fishery and one alternative which removes the seasonal split in the Columbia River subarea to allow for a single continuous season, (2) status quo allocation contributions from Washington and Oregon in equal amounts and one alternative that modifies the Oregon contribution to the Columbia River subarea to 2.3 percent of the Oregon sport allocation, (3) status quo nearshore fishery allocation of 1,500 pounds and one alternative that modifies the Columbia River nearshore area allocation to 500 pounds. The Council recommended and NMFS proposes each of the alternatives for the Columbia River subarea. For the Oregon Central Coast subarea the Council considered three all-depth season structures and modifications to the allocation from the Oregon Central Coast spring fishery to the Southern Oregon subarea. For the season structure, the Council considered three alternatives. Status quo, separate spring and summer seasons; Alternative 1a which would combine the spring and summer season and open the fishery on May 1; and Alternative 1b which is the same as 1a, except begin on the first weekend in May that avoid negative tides. For the allocation change the Council considered: status quo, which allocates a portion of the spring fishery to the Southern Oregon subarea and one alternative which allocates a portion of the overall Oregon Central Coast subarea allocation to the Southern Oregon subarea. The Council recommended and NMFS proposes the status quo alternative for the season structure and the one alternative for the allocation to the Southern Oregon subarea. For the Southern Oregon subarea the Council considered three alternative season dates. Status quo, opening May 1, seven days per week; Alternative 1, open June 1, seven days per week; and Alternative 2, open July 1 seven days per week. The Council recommended and NMFS proposes the status quo alternative. In the Columbia River and Central Oregon Coast subareas the Council considered three alternatives to incidental groundfish retention allowances. Status quo, only Pacific cod and sablefish are allowed; Alternative 1 revise the bottomfish restrictions such that all groundfish except rockfish and lingcod would be allowed when halibut are onboard; and Alternative 2 revise the bottomfish restrictions such that other flatfish, in addition to Pacific cod and sablefish, would be allowed when halibut are onboard. The Council recommended and NMFS proposes Alternative 2. For the California subarea, the Council considered three alternatives. Status quo, fixed season open May 1-July 31 and September 1-October 31, no inseason adjustment; Alternative 1, one month season between May 1 and October 31, to be determined preseason, with inseason adjustment as needed; Alternative 2, 15 consecutive day season between May 1 and October 31, to be determined preseason, with inseason adjustment as needed. The Council recommended and NMFS proposes a modified Alternative which allows for a seven day a week fishery, that will be determined preseason through joint consultation between NMFS and CDFW, and allows for inseason adjustment as necessary. No alternatives were considered for the NMFS recommended changes because they are administrative in nature and simply update the name of the Region from Northwest to West Coast.

The changes to the Columbia River subarea allocations and incidentally landed species allowances are expected to increase recreational opportunities by shifting underutilized fishery allocation from the late to the early part of the season when effort is higher and by turning previously discarded incidental flatfish catch into landed catch. Changes to the Oregon Central Coast subarea allocation and incidentally landed species are expected to prolong seasons and increase the total number of fishing days and are expected to increase recreational opportunities by turning previously discarded incidental catch into landed catch. None of these changes are controversial and none are expected to result in substantial environmental or economic impacts. These actions are intended to enhance the conservation of Pacific halibut, to provide angler opportunity where available, and to protect overfished groundfish species from incidental catch in the halibut fisheries. Because the goal of the proposed action is to maximize angler participation and thus to maximize the economic benefits of the fishery, NMFS did not analyze alternatives to the above changes to the Plan other than the proposed changes and the status quo for purposes of the IRFA. Status quo would be the 2014 Plan applied to the 2015 TAC. Effects of the status quo and the proposed changes are similar because the changes to the Plan for 2015 are not substantially different from the 2015 Plan. The propose changes to the Plan are not expected to have a significant impact on a substantial number of small entities.

The Small Business Administration defines a “small” harvesting business as one with annual receipts, not in excess of $20.5 million. For related fish-processing businesses, a small business is one that employs 500 or fewer persons. For wholesale businesses, a small business is one that employs not more than 100 people. For marinas and charter/party boats, a small business is one with annual receipts, not in excess of $7.5 million. This rule directly affects charterboat operations, and participants in the non-treaty directed commercial fishery off the coast of Washington, Oregon, and California. Applying the SBA's size standard for small businesses, NMFS considers all of the charterboat operations and participants in the non-treaty directed commercial fishery affected by this action as small businesses.

This analysis continues the main conclusions developed in previous analyses that charterboats and the non-treaty directed commercial fishing vessels are small businesses (See 77 FR 5477 (Feb 3, 2012) and 76 FR 2876 (Jan 18, 2011). In 2014, 591 vessels were issued IPHC licenses to retain halibut. IPHC issues licenses for: the directed commercial fishery and the incidental fishery in the sablefish primary fishery in Area 2A (166 licenses in 2014); incidental halibut caught in the salmon troll fishery (425 licenses in 2014); and the charterboat fleet (127 licenses in 2013, the most recent year available). No vessel may participate in more than one of these three fisheries per year. These license estimates overstate the number of vessels that participate in the fishery. IPHC estimates that 60 vessels participated in the directed commercial fishery, 100 vessels in the incidental commercial (salmon) fishery, and 13 vessels in the incidental commercial (sablefish) fishery. Recent information on charterboat activity is not available, prior analysis indicated that 60 percent of the IPHC charterboat license holders may be affected by these regulations.

In response to the growing California sport fishery, for 2014, a specific recreational subquota was created—1% of the non-tribal quota or 6,240 lbs. In prior years, the California fishery was a portion of the Southern Oregon/Northern California subquota. Preliminary catch data show that the California fishery has taken 31,226 lbs, five times the California subquota. Because the 2014 subquota was insuffiencent to meet the growth in the California fishery, the Council reviewed six alternatives that allocate halibut to the various sectors differently between the sectors depending on the size of the TAC. Status Quo: The non-treaty allocation is apportioned according to the 2014 CSP: Washington sport (36.60%), Oregon sport (30.70%), California sport (1.00%), and commercial (31.70%). Alternative 1: Maintain allocations as described in the CSP (Status Quo), except increase the California sport allocation by two percent, for a total California sport allocation of three percent, by reducing the non-treaty commercial fishery share. Alternative 2, Option A: Same allocations as described in Alternative 1 when the 2A TAC is one million pounds or less. When the 2A TAC is above one million pounds, the California sport allocation would increase by an additional one percent, for a total California sport allocation of four percent, by reducing the non-treaty commercial fishery share. Alternative 2, Option B: Same allocations as described in Alternative 1 when the 2A TAC is one million pounds or less. When the 2A TAC is greater than one million pounds, the first one million pounds of the 2A TAC shall be distributed according to the Alternative 1 allocations. For the portion of the 2A TAC that exceeds one million pounds, the California sport allocation would increase to 30-50 percent of the non-treaty share, and allocation percentages for the non-treaty commercial and recreational (Washington and Oregon) would be reduced to remain proportional to the status quo non-treaty shares. Alternative 3: Increase the California sport allocation by two percent, for a total California sport allocation of three percent, when the 2A TAC is less than one million pounds by reducing the three major non-treaty group allocations ( i.e., Washington sport, Oregon sport, and commercial). When the 2A TAC is greater than one million pounds, the first one million pounds of the 2A TAC shall be distributed according to the Alternative 3 allocations. For the portion of the 2A TAC that exceeds one million pounds, the California sport allocation would increase to four percent of the non-treaty share by reducing the three major non-treaty group allocations. Alternative 4: Increase the California sport share by three percent, for a total allocation of four percent, when the 2A TAC is less than one million pounds by reducing the three major non-treaty group allocations. When the 2A TAC is greater than one million pounds, the first one million pounds of the 2A TAC shall be distributed according to the Alternative 4 allocations. For the portion of the 2A TAC that exceeds one million pounds, the California sport allocation would increase to five percent of the non-treaty share by reducing the three major non-treaty group allocations. Alternative 5: Increase the California sport share by four percent, for a total allocation of five percent, when the 2A TAC is less than one million pounds by reducing the three major non-treaty group allocations. When the 2A TAC is greater than one million pounds, the first one million pounds of the 2A TAC shall be distributed according to the Alternative 5 allocations. For the portion of the 2A TAC that exceeds one million pounds, the California sport allocation would increase to six percent of the non-treaty share by reducing the three major non-treaty group allocations. In addition to modifying the commercial and recreational fisheries allocations, suboptions within the allocation alternatives were evaluated for when the TAC is expected to be greater than one million pounds to cap the California allocation. These caps were designed to cap the California allocation to a level that the fishery could reasonably be expected to harvest in order to not strand pounds, therefore, making them unavailable to other fisheries. However, a one million pound TAC is a level the fishery has not experienced in recent years nor is it anticipated for the near term future. In response to the growing California sport fishery, the 2014 Plan included a specific recreational subquota of 1% of the non-tribal quota or 6,240 lbs. Prior to 2014, the California fishery was a portion of the Southern Oregon/Northern California subquota. Preliminary catch data show that the California fishery has taken 31,226 lbs, five times the 2014 California subquota.

For 2015, the Council has recommended and NMFS proposes to approve and implement Alternative 4 (the preferred alternative). For 2015, the Council recommended to increase the California recreational fishery allocation to 4% of the non-tribal allocation by reducing the Washington and Oregon sport and commercial allocations each by 1 percent. This modification is intended to provide an allocation to California that better matches recent effort. The CDFW has also committed to increased inseason monitoring in collaboration with NMFS. Pacific halibut sport fisheries in California have exceeded the allocation in recent years and therefore the goal of increased inseason monitoring and action, as necessary, is to keep the subarea within its allocation. Further, instead of a fixed season, CDFW will recommend to NMFS, similar to subareas in Washington and Oregon, a season length based on expected catch to attain the subarea quota. If the status quo is maintained, the California fishery is likely to continue to exceed its quota and suffer an early shutdown. Under the status quo alternative, the overall halibut TAC will run the risk of being exceeded, and therefore it was not selected. Alternatives 1, 2, and 3 provide increases to the recreational fishery based on decreasing the commercial quota by 2 percent. Alternative 5 increases the California subquota by 4 percent by reducing the Oregon and Washington subquota and the non-tribal commercial quota. While this favors the California fishery, it is at the expense of too large of a reduction in the other fisheries, and therefore it was not selected.

Under Alternative 4, the preferred alternative, the increase of 3% to the California subquota comes from reducing the WA sport quota by 1%, the Oregon sport quota by 1%, and the non-tribal commercial quota by 1%. The overall effect is a shift of 1% reduction of the non-tribal commercial directed quota to the total sport quota allocation. From an economic perspective, it is unclear whether this shift is negative or positive given available analyses. However the overall economic effects of this shift is small as the potential loss of about $300,000 in ex-vessel revenues must be weighed by the gain of increased charterboat recreational activities.

There are no projected reporting or recordkeeping requirements associated with this action.

There are no relevant Federal rules that may duplicate, overlap, or conflict with this action.

Pursuant to Executive Order 13175, the Secretary recognizes the sovereign status and co-manager role of Indian tribes over shared Federal and tribal fishery resources. Section 302(b)(5) of the Magnuson-Stevens Fishery Conservation and Management Act establishes a seat on the Pacific Council for a representative of an Indian tribe with federally recognized fishing rights from California, Oregon, Washington, or Idaho.

The U.S. Government formally recognizes that the 13 Washington Tribes have treaty rights to fish for Pacific halibut. In general terms, the quantification of those rights is 50 percent of the harvestable surplus of Pacific halibut available in the tribes' usual and accustomed fishing areas (described at 50 CFR 300.64). Each of the treaty tribes has the discretion to administer their fisheries and to establish their own policies to achieve program objectives. Accordingly, tribal allocations and regulations, including the proposed changes to the Plan, have been developed in consultation with the affected tribe(s) and, insofar as possible, with tribal consensus.

In 2014, a Biological Opinion (BiOp) was completed for the 2014-2016 Area 2A Pacific Halibut Catch Sharing Plan. The BiOp concluded that the continuing implementation of the Plan was not likely to adversely affect southern resident killer whales, leatherback sea turtles, humpack whales, blue whales, fin whales, Guadalupe fur seals, north Pacific right whales, sei whales, sperm whales, and steller sea lions. Further the BiOp concluded that continuing implementation of the Plan was likely to adversely affect but not likely to jeopardize Puget Sound/Georgia basin bocaccio, canary rockfish, and yelloweye rockfish, southern green sturgeon, lower Columbia River Chinook, and Puget Sound Chinook. The BiOp also concluded that the continued implementation of the Plan was not likely to adversely modify critical habitat of southern resident killer whales, leatherback sea turtles, Puget Sound/Georgia basin bocaccio, canary rockfish, and yelloweye rockfish, southern green sturgeon, lower Columbia River Chinook, and Puget Sound Chinook. Because the halibut fishery does not overlap with the critical habitat for the remaining listed species it was determined that, an evaluation of the effects on critical habitat was not applicable. Finally, in a letter dated March 12, 2014, NMFS determined that fishing activities conducted under the Plan would have no effect on Eulachon. None of the Council recommended changes to the Plan proposed in this rule change the determinations made in the BiOp because they do not result in changes to fishing behavior such that the impacts to listed species is anticipated to change. NMFS has initiated consultation with the US Fish and Wildlife Service on the ongoing implementation of the Catch Sharing Plan and its effects on short-tailed and black-footed albatross, California least tern, marbled murrelet, bull trout, and sea otters.

For the reasons set out in the preamble, 50 CFR part 300 is proposed to be amended as follows: