This action, pursuant to 5 U.S.C. 553, proposes amendments to the regulations issued to carry out a marketing order as defined in 7 CFR 900.2(j). This proposed rule is issued under Marketing Agreement No. 97 and Order No. 948, as amended (7 CFR part 948), regulating the handling of Irish potatoes grown in Colorado. Part 948, (referred to as the “Order”) is effective under the Agricultural Marketing Agreement Act of 1937, as amended (7 U.S.C. 601-674), hereinafter referred to as the “Act.” The Colorado Potato Administrative Committee, Area 2 (Committee) locally administers the Order and is comprised of potato producers and handlers operating within the area of production.

This proposed rule is also issued under section 8e of the Act (7 U.S.C. 608e-1), which provides that whenever certain specified commodities, including potatoes, are regulated under a Federal marketing order, imports of these commodities into the United States are prohibited unless they meet the same or comparable grade, size, quality, or maturity requirements as those in effect for the domestically produced commodities.

The Department of Agriculture (USDA) is issuing this proposed rule in conformance with Executive Orders 13563 and 13175. This action falls within a category of regulatory actions that the Office of Management and Budget (OMB) exempted from Executive Order 12866 review. Additionally, because this proposed rule does not meet the definition of a significant regulatory action, it does not trigger the requirements contained in Executive Order 13771. See OMB's Memorandum titled “Interim Guidance Implementing Section 2 of the Executive Order of January 30, 2017, titled `Reducing Regulation and Controlling Regulatory Costs' ” (February 2, 2017).

This proposed rule has been reviewed under Executive Order 12988, Civil Justice Reform. This rule is not intended to have retroactive effect.

The Act provides that administrative proceedings must be exhausted before parties may file suit in court. Under section 608c(15)(A) of the Act (7 U.S.C. 608c(15)(A)), any handler subject to an order may file with USDA a petition stating that the order, any provision of the order, or any obligation imposed in connection with the order is not in accordance with law and request a modification of the order or to be exempted therefrom. Such handler is afforded the opportunity for a hearing on the petition. After the hearing, USDA would rule on the petition. The Act provides that the district court of the United States in any district in which the handler is an inhabitant, or has his or her principal place of business, has jurisdiction to review USDA's ruling on the petition, provided an action is filed not later than 20 days after the date of the entry of the ruling.

There are no administrative procedures which must be exhausted prior to any judicial challenge to the provisions of import regulations issued under section 8e of the Act (7 U.S.C. 608e-1).

This proposed rule would revise the size requirements currently prescribed for potatoes regulated under the Order. This proposal would update the current minimum size requirement for U.S. No. 2 or better grade round potatoes from 2 inches minimum diameter to 2 inches minimum diameter or 4 ounces minimum weight. The change in the handling regulation would be effectuated by merging the two current size requirements for U.S. No. 2 or better grade potatoes (one for round varieties and one for all other varieties) into one minimum size requirement that covers all U.S. No. 2 or better grade potatoes.

In addition, this rule would revise the size requirements for U.S. Commercial grade or better potatoes to allow handling of 3/4 -inch minimum to 1 7/8 -inch maximum diameter potatoes. The change would be a change from the 3/4 -inch minimum to 1 5/8 -inch maximum diameter size range (“Creamer” size as defined in the U.S. Standards for Grades of Potatoes (7 CFR 51.1545)(Standards)) currently in effect. After the change, the handling regulations would no longer refer to the “Creamer” size in the size requirements because the specified size range would no longer conform to the requirements in the Standards. The changes to the handling regulations were unanimously recommended by the Committee at a meeting held on July 12, 2018.

Section 948.22 authorizes the issuance of grade, size, quality, maturity, pack, and container regulations for potatoes grown in the Order's production area. Section 948.21 authorizes the modification, suspension, or termination of regulations issued pursuant to § 948.22.

Under the Order, the State of Colorado is divided into three areas of regulation for marketing order purposes. These include: Area 1, commonly known as the Western Slope; Area 2, commonly known as San Luis Valley; and, Area 3, which consists of the remaining producing areas within the State of Colorado not included in the definitions of Area 1 or Area 2. Currently, the Order only regulates the handling of potatoes produced in Area 2 and Area 3. Regulation for Area 1 has been suspended.

The grade, size, and maturity requirements specific to the handling of potatoes grown in Area 2 are contained in § 948.386 of the Order. The Order's current handling regulation requires round varieties of potatoes to be U.S. No. 2 or better grade, and 2 inches minimum diameter. All other non-round varieties of potatoes are required to be U.S. No. 2 or better grade, and either 2 inches minimum diameter or 4 ounces minimum weight. Additionally, potatoes that are U.S. Commercial grade or better may be Size B (1 1/2 -inch minimum to 2 1/4 -inch maximum diameter) or Creamer size ( 3/4 -inch minimum to 1 5/8 -inch maximum diameter).

At the July 12, 2018, Committee meeting, industry participants, including the Colorado Department of Agriculture Inspection Division, indicated to the Committee that standardizing the size requirement for all varieties of U.S. No. 2 or better grade potatoes to 2 inches minimum diameter or 4 ounces minimum weight would simplify the handling of potatoes from the production area. The industry believes that merging the two current size requirements for U.S. No. 2 or better grade potatoes into one minimum size requirement covering all varieties of U.S. No. 2 or better potatoes would ease the implementation of the handling regulations for handlers and for the fresh produce inspectors. Further, industry stakeholders stated that there is a market for U.S. Commercial grade or better potatoes of a slightly larger size profile than currently allowed under the Creamer size, and increasing the maximum size in the profile to 1 7/8 -inch maximum diameter would facilitate sales.

Revising the size requirements for round U.S. No. 2 or better grade potatoes and U.S. Commercial grade or better potatoes would allow area handlers to better compete with other domestic potato producing regions. The changes would effectively increase the quantity of potatoes that can enter the fresh market from the production area and would allow handlers to supply potato buyers with the grade and size profiles that they prefer. This change is expected to benefit producers, handlers, and consumers of potatoes.

Pursuant to requirements set forth in the Regulatory Flexibility Act (RFA) (5 U.S.C. 601-612), the Agricultural Marketing Service (AMS) has considered the economic impact of this action on small entities. Accordingly, AMS has prepared this initial regulatory flexibility analysis.

The purpose of the RFA is to fit regulatory actions to the scale of businesses subject to such actions in order that small businesses will not be unduly or disproportionately burdened. Marketing orders issued pursuant to the Act, and rules issued thereunder, are unique in that they are brought about through group action of essentially small entities acting on their own behalf. Import regulations issued under the Act are based on those established under Federal marketing orders.

There are approximately 60 handlers of Colorado Area No. 2 potatoes subject to regulation under the Order and approximately 160 producers in the regulated production area. In addition, there are approximately 255 importers of all types of potatoes, many of which import long types, who are subject to regulation under the Act. Small agricultural service firms, which include potato handlers and importers, are defined by the Small Business Administration (SBA) as those having annual receipts of less than $7,500,000, and small agricultural producers are defined as those having annual receipts of less than $750,000 (13 CFR 121.201).

During the 2016-2017 marketing year, the most recent full marketing year for which statistics are available, approximately 19,828,000 hundredweight of Colorado Area No. 2 potatoes were inspected under the Order and sold into the fresh market. Based on information reported by USDA's Market News Service, the average f.o.b. shipping point price for the 2016-2017 Colorado potato crop was $11.79 per hundredweight. Multiplying $11.79 by the shipment quantity of 19,828,000 hundredweight yields an annual crop revenue estimate of $233,772,120. The average annual fresh potato revenue for each of the 60 handlers is therefore calculated to be $3,896,202 ($233,772,120 divided by 60), which is less than the SBA threshold of $7,500,000. Consequently, on average most of the Colorado Area No. 2 potato handlers may be classified as small entities.

In addition, based on information provided by the National Agricultural Statistics Service, the average producer price for the 2016 Colorado fall potato crop was $9.60 per hundredweight. Multiplying $9.60 by the shipment quantity of 19,828,000 hundredweight yields an annual crop revenue estimate of $190,348,800. The average annual fresh potato revenue for each of the 160 Colorado Area No. 2 potato producers is therefore calculated to be approximately $1,189,680 ($190,348,800 divided by 160), which is greater than the SBA threshold of $750,000. Therefore, on average, most of the Area No. 2 Colorado potato producers may not be classified as small entities.

Further, based on information from USDA's Foreign Agricultural Service (FAS), potato importers imported 17,254,160 hundredweight of potatoes into the U.S. in 2017. FAS also reported the total value of potato imports for 2017 to be $235,685,000. The average 2017 annual revenue of the estimated 255 potato importers is therefore calculated to be $924,255 ($235,685,000 divided by 255), which is significantly less than the SBA threshold of $7,500,000. Consequently, on average, most of the entities importing potatoes into the U.S. may be classified as small entities.

This proposal would revise the minimum size requirement for round U.S. No. 2 grade or better potatoes from the current 2 inches minimum diameter to 2 inches minimum diameter or 4 ounces minimum weight. In addition, this proposed rule would revise the size requirements for U.S. Commercial grade or better potatoes to allow handling of 3/4 -inch minimum to 1 7/8 -inch maximum diameter size range potatoes. Revising the size requirements would allow Colorado Area 2 handlers to market more of their potatoes and enable them to better compete with the other domestic potato producing regions. All other requirements in the Order's handling regulations would remain unchanged. Authority for this action is contained in §§ 948.20, 948.21, and 948.22 of the Order.

This proposed rule is expected to benefit the producers, handlers, and consumers of Colorado Area 2 potatoes by allowing a greater quantity of potatoes from the production area to enter the fresh market. The anticipated increase in volume is expected to translate into greater returns for handlers and producers, and more purchasing options for consumers.

After discussing possible alternatives to this proposed rule, the Committee determined that a change in the size requirements for U.S. No. 2 or better grade round potatoes, and U.S. Commercial grade or better potatoes, would meet the industry's current needs while maintaining the integrity of the Order's quality objectives. During its deliberations, the Committee considered making no changes to the handling regulation, as well as further changing the size requirements for all potatoes. The Committee believes that a revision to the Order's size requirements is necessary to allow handlers to pursue all available markets, but further revising the size requirements for all other types and varieties of potatoes could erode the quality reputation of the area's production. Therefore, the Committee found that there were no other viable alternatives to the proposal as recommended.

In accordance with the Paperwork Reduction Act of 1995 (44 U.S.C. Chapter 35), the Order's information collection requirements have been previously approved by OMB and assigned OMB No. 0581-0178, Vegetable and Specialty Crops. No changes would be necessary in those requirements as a result of this action. Should any changes become necessary, they would be submitted to OMB for approval.

This proposed rule would revise the size requirements established under the Order. Accordingly, this action would not impose any additional reporting or recordkeeping requirements on either small or large potato handlers and importers. As with all Federal marketing order programs, reports and forms are periodically reviewed to reduce information requirements and duplication by industry and public sector agencies.

AMS is committed to complying with the E-Government Act, to promote the use of the internet and other information technologies to provide increased opportunities for citizen access to Government information and services, and for other purposes.

USDA has not identified any relevant Federal rules that duplicate, overlap, or conflict with this proposed rule.

The Committee's July 18, 2018, meeting was widely publicized throughout the Colorado Area 2 potato industry, and all interested persons were invited to attend the meeting and participate in Committee deliberations on all issues. Like all Committee meetings, the meeting was public, and all entities, both large and small, were able to express their views on this issue. Interested persons are invited to submit comments on this proposed rule, including the regulatory and information collection impacts of this action on small businesses.

A small business guide on complying with fruit, vegetable, and specialty crop marketing agreements and orders may be viewed at: http://www.ams.usda.gov/rules-regulations/moa/small-businesses . Any questions about the compliance guide should be sent to Richard Lower at the previously mentioned address in the FOR FURTHER INFORMATION CONTACT section.

A 60-day comment period is provided to allow interested persons to respond to this proposal. All written comments timely received will be considered before a final determination is made on this matter.

For the reasons set forth in the preamble, 7 CFR part 948 is proposed to be amended as follows:

I. Obtaining Information and Submitting Comments A. Obtaining Information

Please refer to Docket ID NRC-2008-0421 when contacting the NRC about the availability of information for this action. You may obtain publicly-available information related to this action by any of the following methods:

• Federal Rulemaking Website: Go to http://www.regulations.gov and search for Docket ID NRC-2008-0421.

• NRC's Agencywide Documents Access and Management System (ADAMS): You may obtain publicly-available documents online in the ADAMS Public Documents collection at http://www.nrc.gov/reading-rm/adams.html. To begin the search, select “ Begin Web-based ADAMS Search.” For problems with ADAMS, please contact the NRC's Public Document Room (PDR) reference staff at 1-800-397-4209, 301-415-4737, or by email to pdr.resource@nrc.gov. For the convenience of the reader, instructions about obtaining materials referenced in this document are provided in the “Availability of Documents” section.

• NRC's PDR: You may examine and purchase copies of public documents at the NRC's PDR, Room O1-F21, One White Flint North, 11555 Rockville Pike, Rockville, Maryland 20852.

Please include Docket ID NRC-2008-0421 in your comment submission.

The NRC cautions you not to include identifying or contact information that you do not want to be publicly disclosed in your comment submission. The NRC will post all comment submissions at http://www.regulations.gov as well as enter the comment submissions into ADAMS. The NRC does not routinely edit comment submissions to remove identifying or contact information.

If you are requesting or aggregating comments from other persons for submission to the NRC, then you should inform those persons not to include identifying or contact information that they do not want to be publicly disclosed in their comment submission. Your request should state that the NRC does not routinely edit comment submissions to remove such information before making the comment submissions available to the public or entering the comment into ADAMS.

In situ recovery is a method used to extract uranium from underground ore bodies without physical excavation. It is also known as “solution mining” or in situ leaching. In the ISR process, a solution called lixiviant is pumped into the subsurface. In the United States, lixiviant typically contains water mixed with oxygen and/or hydrogen peroxide, as well as sodium carbonate or carbon dioxide. The lixiviant dissolves the uranium, located in the underground ore body, into the solution. The solution is then pumped to the surface, where it undergoes additional processing and concentration to produce a solid form of uranium called “yellowcake.” The yellowcake is ultimately used in the manufacture of fuel for nuclear reactors.

The licensed area of a typical uranium ISR facility covers several square miles and may include several discrete or contiguous wellfields, some of which may be operating while others may be in restoration or decommissioning. Each ISR wellfield is composed of a series of injection and extraction wells drilled into a uranium ore body that has been identified in a subsurface geologic formation within the wellfield. The aquifer within the formation where the ore body is located is commonly referred to as the “ore zone aquifer”. Currently, there are six ISR facilities operating in the United States.

Uranium ISR was introduced in the late 1970s as an alternative to conventional uranium recovery, which involves extracting uranium ore from the earth, typically through deep underground shafts or shallow open pits. Ore extracted by conventional uranium recovery is transported to a mill, where it is crushed and undergoes a chemical process to remove the uranium. The uranium is then concentrated to produce yellowcake. The sandy waste resulting from crushing the uranium ore is known as “uranium mill tailings” or “tailings.” Tailings contain heavy metals and radioactive constituents, such as radium. Alternatively, uranium may be recovered from the ore using a heap leach process. In the heap leach process, the ore is placed on an engineered barrier and sprayed with acid. The uranium dissolves into solution and is collected at the engineered barrier. The solution undergoes additional chemical processing to produce yellowcake. Currently, there is one operating conventional uranium mill and there are no operating heap leach facilities in the United States.

The NRC licenses ISR facilities under part 40 of title 10 of the Code of Federal Regulations (10 CFR), “Domestic Licensing of Source Material,” because these facilities possess and use source material. 1 The possession and use of source material are activities that require a license from the NRC under the Atomic Energy Act of 1954, as amended (AEA). 2 The waste (tailings) generated as a result of the ISR process falls within a category of byproduct material defined in section 11e.(2) of the AEA. Specifically, in section 11e.(2), byproduct material is defined as “the tailings or wastes produced by the extraction or concentration of uranium or thorium from any ore processed primarily for its source material content.”  3

Under the Uranium Mill Tailings Radiation Control Act of 1978 (UMTRCA) (Pub. L. 95-604), the NRC is responsible for regulating section 11e.(2) byproduct material at sites where such material is generated. Congress enacted UMTRCA to provide public health, safety, and environmental protection from the radiological and non-radiological hazards associated with the processing, possession, transfer, and disposal of AEA section 11e.(2) byproduct material. The UMTRCA amended the AEA by adding to it the section 11e.(2) definition of byproduct material and sections 84 and 275.

The AEA, as amended by UMTRCA, established a dual regulatory scheme over the domestic uranium milling industry between the U.S. Environmental Protection Agency (EPA) and the NRC. Under section 275b. of the AEA, the EPA is authorized to issue standards of general applicability for the protection of health, safety, and the environment from radiological and non-radiological hazards associated with the processing of section 11(e)(2) byproduct material. 4 Under AEA section 84, 5 the NRC or the appropriate Agreement State  6 is responsible for implementing the EPA's generally applicable standards. In this regard, the NRC or the applicable Agreement State entity is the regulatory or licensing agency for all uranium recovery facilities, including ISR facilities, and is responsible for inspecting the facility and enforcing the terms and conditions of the operating license. 7

The EPA first issued generally applicable standards on October 7, 1983 (48 FR 45926) and updated these standards on November 15, 1993 (58 FR 60340). The EPA codified these standards into its regulations at 40 CFR part 192, “Health and Environmental Protection Standards for Uranium and Thorium Mill Tailings,” subpart D, “Standards for Management of Uranium Byproduct Materials Pursuant to Section 84 of the Atomic Energy Act of 1954, as amended.” The NRC issued its implementing regulations on October 16, 1985 (50 FR 41852) and further amended them in subsequent rulemakings. 8 The NRC codified its implementing regulations at 10 CFR part 40, “Domestic Licensing of Source Material,” appendix A, “Criteria Relating to the Operation of Uranium Mills and the Disposition of Tailings or Wastes Produced by the Extraction or Concentration of Source Material from Ores Processed Primarily for their Source Material Content.”

In the 1990s, ISR operations became the predominant means of extracting uranium in the United States. In COMJSM-06-0001, “Regulation of Groundwater Protection at In Situ Leach Uranium Extraction Facilities,” dated January 17, 2006 (ADAMS Accession No. ML060830041), NRC Commissioner Merrifield stated:

In 2010, the EPA informed the NRC that it would undertake its own rulemaking effort to issue generally applicable standards for ISRs. The NRC then deferred its ongoing ISR rulemaking effort, prior to the publication of a proposed rule, in anticipation of the need to conform its implementing regulations to the generally applicable standards to be issued by the EPA. The EPA issued its proposed rule on January 26, 2015 (80 FR 4156). Subsequently, the EPA decided to re-propose the rule and seek additional public comment. The EPA issued the re-proposed rule, superseding the January 2015 proposed rule, on January 19, 2017 (82 FR 7400). The NRC had jurisdictional and technical concerns with both the January 2015 and January 2017 proposed rules and submitted comments addressing these concerns on July 18, 2017 (ADAMS Accession No. ML17173A638).

On October 30, 2018 (83 FR 54543), the EPA withdrew its proposed rule. The EPA concluded, based on comments from stakeholders, that it had serious questions concerning whether it has the legal authority under UMTRCA to issue the regulations as provided in the 2017 proposed rule. The EPA also concluded that the existing regulatory framework was sufficient to ensure the protection of public health and the environment at existing ISRs. Finally, the EPA stated that, given current and foreseeable market conditions, the uranium recovery industry was not likely to have the robust growth that was anticipated in the 2000s. Given the EPA's withdrawal of its proposed rule, the NRC must now decide whether to proceed with its 2006 ISR-specific rulemaking, held in abeyance since 2010.

The current version of appendix A to 10 CFR part 40 provides a generic set of regulations for the operation of conventional uranium mills. With respect to the NRC's licensing of ISR facilities, the current regulations in appendix A, coupled with the conditions of ISR site-specific licenses and the NRC's ongoing oversight of the licensees' operations, provide adequate protection to the public health and safety and the environment. The NRC's purpose in promulgating a generic set of regulations for the operation of ISRs is to standardize existing NRC ISR licensing and oversight practices and to ensure consistency in the NRC staff's evaluation and approval of ISR license applications. In addition, the promulgation of generic regulations for ISR facilities would provide a national regulatory framework from which Agreement States can, in turn, promulgate their own compatible regulatory standards. If the NRC continues with this rulemaking, the amendments to appendix A would be based upon many of the license conditions that are contained in current NRC-issued site-specific ISR licenses and would be further informed by the approved methodologies and best practices set forth in those NRC guidance documents that are applicable to ISR activities.

ISR operations are substantially different from those of conventional uranium milling, including the measures taken to ensure the protection of groundwater. The requirements for groundwater protection at conventional uranium mills are mainly concerned with the prevention, detection, and correction of contamination in shallow aquifers from seepage and leaks associated with the long-term management of mill tailings impoundments. At ISR facilities, however, the main concern is contamination of the surrounding groundwater by the short-term degradation of the water quality in the ore zone aquifer during ISR operations. Specifically, the groundwater chemistry in the ore zone aquifer is altered by the injection of lixiviant, which along with dissolving the uranium located in the underground ore body, also mobilizes hazardous constituents such as metals and radionuclides like radium. If the lixiviant is not controlled within the ore zone aquifer, then these hazardous constituents may migrate outside the ISR wellfield and potentially contaminate surrounding groundwater and connected surface water. Therefore, the NRC and the Agreement States have included license conditions in ISR licenses requiring ISR licensees to satisfy certain technical criteria that will protect surrounding groundwater during ISR operations and restore the water quality in ore zone aquifers after ISR operations. Unlike conventional mill tailings impoundments that require long-term management for groundwater protection, ISR wellfields may be decommissioned and the ISR license terminated once groundwater restoration requirements are met.

The NRC initiated the ISR rulemaking in 2006 to provide regulatory predictability and consistency to the licensing process for ISRs. By establishing a generic set of requirements for ISR activities, the rule would improve regulatory efficiency and make the NRC's review process for ISR license applications and amendments more consistent and transparent to the public and industry.

Most ISR facilities currently in operation are licensed by Agreement States. One of the requirements of the NRC's Agreement State program is that the regulations of an Agreement State must be “compatible” with the NRC's regulatory program. 9 Therefore, in accordance with the NRC's Agreement State program, the promulgation of an NRC rulemaking specific to ISR facilities would require Agreement States to conform their regulations, to the extent appropriate, to the new or amended NRC regulations. The benefit of having Agreement States conform their regulations would be the establishment of a relatively uniform  10 set of both groundwater protection and radiation health and safety requirements for ISR facilities nationwide.

In light of the EPA's withdrawal of its January 2017 proposed rule, the NRC is now conducting an assessment of the requirements in 10 CFR part 40 appendix A pertaining to the licensing of ISRs and is requesting input from members of the public about the topics discussed in the “Request for Comments” section. The information received from this request will be factored into the decision whether to continue this rulemaking.

The NRC welcomes general comments and seeks comments in response to the numbered items in this section. In responding to these numbered items, please provide your rationale or justification for your position. In addition, please provide a discussion of any factors that you considered in providing your opinion and any recommendations to assist the NRC in improving its regulatory process. The factors that the NRC must consider in determining whether to proceed with this rulemaking include technical feasibility, a cost-benefit analysis, and consistency and clarity of applicable regulations for the adequate protection of the health and safety and the environment.

1. If the NRC were to proceed with its ISR rulemaking that has been held in abeyance since 2010, the NRC would amend its current uranium milling regulations in appendix A to 10 CFR part 40 to add ISR-specific requirements. Should the NRC proceed with this rulemaking?

2. Please identify any issues that should be addressed to protect groundwater at ISR facilities, in either this rulemaking or through the development of guidance documents.

3. Please identify any issues that should be addressed to enhance public or occupational safety at ISR facilities, in either this rulemaking or through the development of guidance documents.

4. Please identify any issues that should be addressed to establish a relatively uniform set of requirements for ISR facilities nationwide (both in Agreement States and in non-Agreement States).

The documents identified in the following table are available to interested persons through one or more of the following methods, as indicated.

Throughout the development of this assessment, the NRC may post related documents, including public comments, on the Federal rulemaking website at http://www.regulations.gov under Docket ID NRC-2008-0421. The Federal rulemaking website allows you to receive alerts when changes or additions occur in a docket folder. To subscribe: (1) Navigate to the docket folder (NRC-2008-0421); (2) click the “Sign up for Email Alerts” link; and (3) enter your email address and select how frequently you would like to receive emails (daily, weekly, or monthly).

Table of Contents I. Obtaining Information and Submitting Comments II. Background; Statutory Authority III. Specific Request for Comment: Petition for Rulemaking IV. Discussion V. Regulatory Flexibility Certification VI. Regulatory Analysis VII. Backfitting and Issue Finality VIII. Plain Writing IX. National Environmental Policy Act X. Paperwork Reduction Act Public Protection Notification XI. Voluntary Consensus Standards XII. Availability of Guidance XIII. Public Meeting XIV. Availability of Documents I. Obtaining Information and Submitting Comments A. Obtaining Information

Please refer to Docket ID NRC-2017-0032 when contacting the NRC about the availability of information for this action. You may obtain publicly-available information related to this action by any of the following methods:

• Federal Rulemaking Website: Go to http://www.regulations.gov and search for Docket ID NRC-2017-0032.

• NRC's Agencywide Documents Access and Management System (ADAMS): You may obtain publicly-available documents online in the ADAMS Public Documents collection at http://www.nrc.gov/reading-rm/adams.html. To begin the search, select “ Begin Web-based ADAMS Search. ” For problems with ADAMS, please contact the NRC's Public Document Room (PDR) reference staff at 1-800-397-4209 or 301-415-4737, or by email to pdr.resource@nrc.gov. The ADAMS accession number for each document referenced in this document (if that document is available in ADAMS) is provided the first time that a document is referenced. For the convenience of the reader, the ADAMS accession numbers are also provided in a table in the “Availability of Documents” section of this document.

• NRC's PDR: You may examine and purchase copies of public documents at the NRC's PDR, Room O1-F21, One White Flint North, 11555 Rockville Pike, Rockville, Maryland 20852.

Please include Docket ID NRC-2017-0032 in the subject line of your comment submission in order to ensure that the NRC is able to make your comment submission publicly available in this docket.

The NRC cautions you not to include identifying or contact information that you do not want to be publicly disclosed in your comment submission. The NRC posts all comment submissions at http://www.regulations.gov as well as entering the comment submissions into ADAMS. The NRC does not routinely edit comment submissions to remove identifying or contact information.

If you are requesting or aggregating comments from other persons for submission to the NRC, then you should inform those persons not to include identifying or contact information that they do not want to be publicly disclosed in their comment submissions. Your request should state that the NRC does not routinely edit comment submissions to remove such information before making the comment submissions available to the public or entering the comment submissions into ADAMS.

The NRC's fee regulations are primarily governed by two laws: (1) The Independent Offices Appropriation Act, 1952 (IOAA) (31 U.S.C. 9701), and (2) OBRA-90 (42 U.S.C. 2214). The IOAA generally authorizes and encourages Federal regulatory agencies to recover—to the fullest extent possible—costs attributable to services provided to identifiable recipients. The OBRA-90 requires the NRC to recover approximately 90 percent of its budget authority for the fiscal year through fees; in FY 2019, amounts appropriated for the development of regulatory infrastructure for advanced reactor technologies, international activities, Waste Incidental to Reprocessing, generic homeland security activities, and Inspector General services for the Defense Nuclear Facilities Safety Board are excluded from this fee-recovery requirement. The OBRA-90 first requires the NRC to use its IOAA authority to collect service fees for NRC work that provides specific benefits to identifiable applicants and licensees (such as licensing work, inspections, and special projects). The regulations at part 170 of title 10 of the Code of Federal Regulations (10 CFR) authorize these fees. But, because the NRC's fee recovery under the IOAA (10 CFR part 170) does not equal 90 percent of the NRC's budget authority for the fiscal year, the NRC also assesses “annual fees” under 10 CFR part 171 to recover the remaining amount necessary to meet OBRA-90's fee-recovery requirement. These annual fees recover costs that are not otherwise collected through 10 CFR part 170.

The NRC welcomes general comments on this proposed rule; in addition, the NRC is requesting public comment on the issues raised in a petition for rulemaking (ADAMS Accession No. ML18214A757), dated July 3, 2018, which was submitted to the NRC by Christopher S. Pugsley, Esq. (the petitioner), on behalf of Water Remediation Technology (WRT), LLC. The petitioner requests that the NRC amend its regulations regarding full cost recovery of licensee fees. The petition was docketed by the NRC on August 2, 2018, and was assigned Docket No. PRM-170-7. The NRC published a notice of docketing in the Federal Register on November 2, 2018 (83 FR 55113), but did not request public comment at that time. Please include Docket ID NRC-2018-0172 in the subject line of your comment submission in order to ensure that the NRC is able to make your comment submission publicly available in the petition's docket. You may submit comments on this petition using the methods listed in the ADDRESSES section of this document.

The petitioner requests that the NRC amend its regulations to re-categorize WRT as a licensee that does not require full-cost recovery for fees billed to it during the life of its license under 10 CFR part 170. The petitioner also requests that the NRC address consistency issues between 10 CFR parts 170 and 171 for small entities, and consider amending language under § 170.11 to extend the time within which a licensee may appeal the assessment of fees and apply for a fee exemption. The petitioner has asked the NRC to consider these rule changes within the context of its rulemaking to amend 10 CFR parts 170 and 171 to collect FY 2019 fees. See the FY 2019 Policy Change section of this document for additional information.

The NRC is issuing this FY 2019 proposed fee rule based on the Energy and Water, Legislative Branch, and Military Construction and Veterans Affairs Appropriations Act, 2019 (Pub. L. 155-244) (enacted budget). The total enacted budget for the NRC in FY 2019 is approximately $911.0 million, a decrease of approximately $11.0 million from FY 2018. As explained previously, certain portions of the NRC's total budget are excluded from OBRA-90's fee-recovery requirement. Based on the FY 2019 enacted budget, these exclusions total to $43.4 million, consisting of $16.1 million for international activities, $10.3 million for advanced reactor technologies regulatory infrastructure, $1.3 million for Waste Incidental to Reprocessing activities, $1.1 million for Inspector General services for the Defense Nuclear Facilities Safety Board, and $14.6 million for generic homeland security activities. Additionally, OBRA-90 requires the NRC to recover only approximately 90 percent of the remaining budget authority for the fiscal year—10 percent of the remaining budget authority is not recovered through fees. The NRC refers to the activities included in this 10-percent as “fee-relief” activities. After accounting for the fee-recovery exclusions, the fee-relief activities, and net billing adjustments ( i.e., the sum of unpaid current year invoices (estimated) minus payments for prior year invoices), the NRC must bill approximately $781.9 million in fees in FY 2019. Of this amount, the NRC estimates that $246.7 million will be recovered through 10 CFR part 170 service fees; that leaves approximately $535.2 million to be recovered through 10 CFR part 171 annual fees. Table I summarizes the fee-recovery amounts for the FY 2019 proposed fee rule using the enacted budget, and taking into account excluded activities, fee-relief activities, and net billing adjustments. For all information presented in the following tables, individual values may not sum to totals due to rounding. Please see the work papers (ADAMS Accession No. ML18361A780) for actual amounts.

The NRC uses a professional hourly rate to assess fees for specific services provided by the NRC under 10 CFR part 170. The professional hourly rate also helps determine flat fees (which are used for the review of certain types of license applications). This rate would be applicable to all activities for which fees are assessed under §§ 170.21 and 170.31.

The NRC's professional hourly rate is derived by adding budgeted resources for: (1) Mission-direct program salaries and benefits; (2) mission-indirect program support; and (3) agency support (corporate support and the Inspector General), and then subtracting certain offsetting receipts, and then dividing this total by the mission-direct full-time equivalents (FTE) converted to hours. The mission-direct FTE converted to hours is the product of the mission-direct FTE multiplied by the estimated annual mission-direct FTE productive hours. The only budgeted resources excluded from the professional hourly rate are those for mission-direct contract resources, which are generally billed to licensees separately. The following shows the professional hourly rate calculation:

For FY 2019, the NRC is proposing to increase the professional hourly rate from $275 to $278. The 1.1 percent increase in the FY 2019 professional hourly rate is due primarily to the decline in the number of mission-direct FTE compared to FY 2018, offset by the slight decrease in total budgeted resources. The number of mission-direct FTE declined by 41, primarily due to the standardization and centralization of mission support functions within the programmatic offices, and the transition of Wyoming to status as an Agreement State. The FY 2019 estimate for annual mission-direct FTE productive hours is 1,510 hours, which is unchanged from FY 2018. This estimate, also referred to as the productive hours assumption, reflects the average number of hours that a mission-direct employee spends on mission-direct work in a given year. This estimate therefore excludes hours charged to annual leave, sick leave, holidays, training, and general administration tasks. Table II shows the professional hourly rate calculation methodology. The FY 2018 amounts are provided for comparison purposes.

The NRC proposes to amend the flat application fees that it charges to applicants for materials licenses and other regulatory services, and holders of materials licenses in its schedule of fees in §§ 170.21 and 170.31 to reflect the revised professional hourly rate of $278. The NRC calculates these flat fees by multiplying the average professional staff hours needed to process the licensing actions by the proposed professional hourly rate for FY 2019. The NRC analyzes the actual hours spent performing licensing actions and then estimates the average professional staff hours that are needed to process licensing actions as part of its biennial review of fees, which is required by Section 205(a) of the Chief Financial Officers Act of 1990 (31 U.S.C. 902(a)(8)). The NRC performed this review in FY 2019 and will perform this review again in FY 2021. The biennial review adjustments and the higher professional hourly rate of $278 are the primary reasons for the increase in application fees. Please see the work papers for more detail.

The NRC rounds these flat fees in such a way that ensures both convenience for its stakeholders and that any rounding effects are minimal. Accordingly, fees under $1,000 are rounded to the nearest $10, fees between $1,000 and $100,000 are rounded to the nearest $100, and fees greater than $100,000 are rounded to the nearest $1,000.

The proposed licensing flat fees are applicable for certain materials licensing actions (see fee categories 1.C. through 1.D., 2.B. through 2.F., 3.A. through 3.S., 4.B. through 5.A., 6.A. through 9.D., 10.B., 15.A. through 15.L., 15.R., and 16 of § 170.31). Because the enacted budget excludes international activities from the fee-recoverable budget, the NRC is not proposing to charge flat fees for import and export licensing actions of § 170.21. Applications filed on or after the effective date of the FY 2019 final fee rule will be subject to the revised fees in the final rule.

As previously noted, OBRA-90 requires the NRC to recover only approximately 90 percent of its annual budget authority for the fiscal year. The NRC applies the remaining 10 percent that is not recovered to offset certain budgeted activities—see Table III for a full listing of these “fee-relief” activities. If the amount budgeted for these fee-relief activities is greater or less than 10 percent of the NRC's annual budget authority (less the fee-recovery exclusions), then the NRC applies a fee adjustment (either an increase or decrease) to all licensees' annual fees, based on their percentage share of the NRC's budget.

In FY 2019, the amount budgeted for fee-relief activities is less than the 10 percent threshold. Therefore, the NRC proposes to assess a fee-relief credit that decreases all licensees' annual fees based on their percentage share of the budget. Table III summarizes the fee-relief activities budgeted for FY 2019. The FY 2018 amounts are provided for comparison purposes.

Table IV shows how the NRC proposes to allocate the $0.2 million fee-relief credit to each licensee fee class. Due to the transition of Wyoming to Agreement State status, the NRC is proposing to expand the existing fee relief category, “ In situ leach rulemaking and unregistered general licensees, ” to include additional uranium recovery program budgeted resources. This ensures the equitability and stability of annual fees for the uranium recovery fee class by recognizing that now the majority of uranium recovery licensees are in Agreement States.

In addition to the fee-relief credit, the NRC also proposes to assess a generic LLW surcharge of $3.8 million. Disposal of LLW occurs at commercially operated LLW disposal facilities that are licensed by either the NRC or an Agreement State. Four existing LLW disposal facilities in the United States accept various types of LLW. All are located in Agreement States and, therefore, are regulated by an Agreement State, rather than the NRC. The NRC proposes to allocate this surcharge to its licensees based on data available in the U.S. Department of Energy's (DOE) Manifest Information Management System. This database contains information on total LLW volumes and NRC usage information from four generator classes: Academic, industrial, medical, and utility. The ratio of utility waste volumes to total LLW volumes over a period of time is used to estimate the portion of this surcharge that will be allocated to the power reactors, fuel facilities, and materials fee classes. The materials portion is adjusted to account for the fact that a large percentage of materials licensees are licensed by the Agreement States rather than the NRC.

Table IV shows the surcharge, and its proposed allocation across the various fee classes.

In accordance with SECY-05-0164, “Annual Fee Calculation Method,” dated September 15, 2005 (ADAMS Accession No. ML052580332), the NRC rebaselines its annual fees every year. “Rebaselining” entails analyzing the budget in detail and then allocating the budgeted costs to various classes or subclasses of licensees. It also includes updating the number of NRC licensees in its fee calculation methodology.

The NRC proposes to revise its annual fees in §§ 171.15 and 171.16 to recover approximately 90 percent of the NRC's FY 2019 enacted budget (less the fee-recovery exclusions and the estimated amount to be recovered through 10 CFR part 170 fees). The estimated 10 CFR part 170 collections for this proposed rule are $246.7 million, a decrease of $34.1 million from the FY 2018 fee rule (see the specific fee class sections for a discussion of this decrease). The NRC, therefore, proposes to recover $535.2 million through annual fees from its licensees, which is an increase of $26.7 million from the FY 2018 final rule.

Table V shows the proposed rebaselined fees for FY 2019 for a representative list of categories of licensees. The FY 2018 amounts are provided for comparison purposes.

The work papers that support this proposed rule show in detail how the NRC proposes to allocate the budgeted resources for each class of licensees and calculate the fees. Paragraphs a. through h. of this section describe budgeted resources allocated to each class of licensees and the calculations of the rebaselined fees. For more information about detailed fee calculations for each class, please consult the accompanying work papers.

The NRC proposes to collect $460.3 million in annual fees from the power reactor fee class in FY 2019, as shown in Table VI. The FY 2018 fees and percentage change are shown for comparison purposes.

In comparison to FY 2018, the operating power reactors budgeted resources increased minimally in FY 2019. But estimated billings under 10 CFR part 170 declined primarily due to decreases in both licensing actions and inspections resulting from the shutdown of the Oyster Creek reactor at the end of FY 2018, the planned shutdown of Pilgrim and Three Mile Island reactors during FY 2019, and the completion of the APR1400 design certification for Korea Hydro and Nuclear Power Co., LTD. Additionally, estimated billings under 10 CFR part 170 are expected to decline due to the replacement of the 6 percent automatic overhead charge for project manager, resident inspector, and senior resident inspector activities with new directly billed docket-related cost activity codes.

The recoverable budgeted costs are divided equally among the 98 licensed power reactors, resulting in a proposed annual fee of $4,697,000 per reactor. Additionally, each licensed power reactor is assessed the FY 2019 spent fuel storage/reactor decommissioning proposed annual fee of $163,000 (see Table VII and the discussion that follows). The combined proposed FY 2019 annual fee for power reactors is, therefore, $4,860,000.

On May 24, 2016, the NRC amended its licensing, inspection, and annual fee regulations to establish a variable annual fee structure for light-water small modular reactors (SMRs). Under the variable annual fee structure, effective June 23, 2016, an SMR's annual fee would be calculated as a function of its licensed thermal power rating. Currently, there are no operating SMRs; therefore, the NRC is not proposing an annual fee in FY 2019 for this type of licensee.

The NRC proposes to collect $19.9 million in annual fees from 10 CFR part 50 power reactors, and from 10 CFR part 72 licensees that do not hold a 10 CFR part 50 license, to collect the budgeted costs for the spent fuel storage/reactor decommissioning fee class.

Compared to FY 2018, the FY 2019 budgeted resources for spent fuel storage/reactor decommissioning increased due to: (1) An increase in the number of financial reviews and licensing actions associated with operating power reactors undergoing decommissioning, (2) the ongoing licensing reviews for two consolidated Interim storage facility license applications including the development of environmental impact statements, and (3) the independent spent fuel storage installation license renewal for Three Mile Island-2, Trojan, and Rancho Seco and the associated environmental assessments.

The 10 CFR part 170 estimated billings for FY 2019 increased due to (1) resuming licensing work on Interim Storage Partner's consolidated interim storage facility application, (2) increasing work on Holtec International's consolidated interim storage facility application, and (3) an increased workload for reactors in decommissioning.

The annual fee decreased due to rising 10 CFR part 170 estimated billings. The required annual fee recovery amount is divided equally among 122 licensees, resulting in a proposed FY 2019 annual fee of $163,000 per licensee.

The NRC proposes to collect $24.8 million in annual fees from the fuel facilities class.

In comparison to FY 2018, the fuel facilities budgeted resources decreased in FY 2019, primarily due to aligning resources with a smaller projected workload.

The estimated 10 CFR part 170 collections decreased in FY 2019 as a result of the expected termination of the CB&I AREVA MOX Fuel Fabrication facility construction authorization and license application withdrawal, and the expected completion of Honeywell's license renewal, offset by increased work for Westinghouse associated with an emergency preparedness exercise, confirmatory order items and its license renewal.

The NRC proposes to continue allocating annual fees to individual fuel facility licensees based on the effort/fee determination matrix developed in the FY 1999 final fee rule (64 FR 31447; June 10, 1999). To briefly recap, the matrix groups licensees within this fee class into various fee categories. The matrix lists processes conducted at licensed sites and assigns effort factors for the safety and safeguards activities associated with each process (these effort levels are reflected in Table IX). The annual fees are then distributed across the fee class based on the regulatory effort predicted by the matrix.

In FY 2019, the total remaining required annual fee recovery amount of $24.8 million is comprised of safety activities, safeguards activities and the fee-relief adjustment/LLW surcharge. For FY 2019, the total budgeted resources to be recovered as annual fees for safety activities are $13.7 million. To calculate the annual fee, the NRC allocates this amount to each fee category based on its percent of the total regulatory effort for safety activities. Similarly, the NRC allocates the budgeted resources to be recovered as annual fees for safeguards activities, $10.3 million, to each fee category based on its percent of the total regulatory effort for safeguards activities. Finally, the fuel facility fee class' portion of the fee-relief adjustment/LLW surcharge—$0.8 million—is allocated to each fee category based on its percentage of the total regulatory effort for both safety and safeguards activities. The annual fee per licensee is then calculated by dividing the total allocated budgeted resources for the fee category by the number of licensees in that fee category. The fee for each facility is summarized in Table X.

The NRC proposes to collect $0.2 million in annual fees from the uranium recovery facilities fee class, a decrease of 60.0 percent from FY 2018.

In comparison to FY 2018, the FY 2019 budgeted resources for uranium recovery licensees decreased due to the transition of Wyoming to Agreement State status and subsequent realignment of the Uranium Mill Tailings Radiation Control Act (UMTRCA) program. In addition, budgeted resources decreased as a result of expanding the existing fee-relief category, “ In Situ leach rulemaking and unregistered general licenses” to include additional Uranium Recovery activities in order to ensure equitability and the stability of annual fees.

The NRC regulates DOE's Title I and Title II activities under UMTRCA  5 and the proposed annual fee to DOE includes the costs specifically budgeted for the NRC's UMTRCA Title I and II activities, as well as 10 percent of the remaining budgeted costs for this fee class. The DOE's UMTRCA annual fee decreased slightly due to the budgeted resources reduction and an increase in estimated 10 CFR part 170 billings for work on the Atlantic Richfield review. The NRC assesses the remaining 90 percent of its budgeted costs to the remaining licensee in this fee class, as described in the work papers. This is reflected in Table XII as follows:

Further, for the non-DOE licensees, the NRC continues to use a matrix to determine the effort levels associated with conducting the generic regulatory actions for the different licensees in this fee class; this is similar to the NRC's approach for fuel facilities, described previously.

The matrix methodology for uranium recovery licensees first identifies the licensee categories included within this fee class (excluding DOE). These categories are: Conventional uranium mills and heap leach facilities; uranium In Situ Recovery (ISR) and resin ISR facilities; and mill tailings disposal facilities. The matrix identifies the types of operating activities that support and benefit these licensees, along with each activity's relative weight (for more information, see the work papers). Currently, there is only one remaining non-DOE licensee which is a Basic In Situ Recovery facility. Table XIII displays the benefit factors for the non-DOE licensee in that fee category:

The annual fee for the remaining non-DOE licensee is calculated by allocating 100 percent of the budgeted resources, as summarized in Table XIV.

The NRC proposes to collect $0.316 million in annual fees from the research and test reactor licensee class.

For this fee class, the budgeted resources decreased due to projected application delays within the medical isotope production facilities for Shine and NorthWest Medical Isotopes. The 10 CFR part 170 estimated billings also decreased due to projected application delays within the medical isotope production facilities for Shine and NorthWest, offset by an increase in activity for Aerotest's startup inspection and license renewal application. The proposed FY 2019 annual fee decreased due to a decrease in budgeted resources, offset by a decline in estimated 10 CFR part 170 billings.

The required annual fee-recovery amount is divided equally among the four research and test reactors subject to annual fees and results in an FY 2019 annual fee of $79,000 for each licensee.

The NRC has not allocated any budgeted resources to this fee class; therefore, the NRC is not proposing an annual fee in FY 2019.

The NRC proposes to collect $36.5 million in annual fees from materials users licensed under 10 CFR parts 30, 40, and 70.

The annual fee for these categories of materials users' licenses is developed as follows: Annual Fee = Constant × [Application Fee + (Average Inspection Cost/Inspection Priority)] + Inspection Multiplier × (Average Inspection Cost/Inspection Priority) + Unique Category Costs. The total annual fee recovery of $36.5 million proposed for FY 2019 shown in Table XVI consists of the following: $28.6 million for general costs, $7.5 million for inspection costs, $0.2 million for unique costs for medical licenses and $0.2 million for fee relief/LLW costs. To equitably and fairly allocate the $36.5 million required to be collected among approximately 2,600 diverse materials users licensees, the NRC continues to calculate the annual fees for each fee category within this class based on the 10 CFR part 170 application fees and estimated inspection costs for each fee category. Because the application fees and inspection costs are indicative of the complexity of the materials license, this approach provides a proxy for allocating the generic and other regulatory costs to the diverse fee categories. This fee-calculation method also considers the inspection frequency (priority), which is indicative of the safety risk and resulting regulatory costs associated with the categories of licenses.

The NRC proposes to both increase and decrease annual fees for licensees in this fee class in FY 2019 due to the results of the biennial review of fees. This analysis examines the actual hours spent in previous years performing licensing actions and then estimates the average professional staff hours that are needed to process similar licensing actions multiplied by the proposed professional hourly rate for FY 2019.

The constant multiplier is established to recover the total general costs (including allocated generic transportation costs) of $28.6 million. To derive the constant multiplier, the general cost amount is divided by the product of all fee categories (application fee plus the inspection fee divided by inspection priority) then multiplied by the number of licensees. This calculation results in a constant multiplier of 1.33 for FY 2019. The average inspection cost is the average inspection hours for each fee category multiplied by the professional hourly rate of $278. The inspection priority is the interval between routine inspections, expressed in years. The inspection multiplier is established in order to recover the $7.5 million in inspection costs. To derive the inspection multiplier, the inspection costs amount is divided by the product of all fee categories (inspection fee divided by inspection priority) then multiplied by the number of licensees. This calculation results in an inspection multiplier of 1.44 for FY 2019. The unique category costs are any special costs that the NRC has budgeted for a specific category of licenses. For FY 2019, unique category costs include approximately $0.2 million in budgeted costs for the implementation of revised 10 CFR part 35, “Medical Use of Byproduct Material,” which has been allocated to holders of NRC human-use licenses. Please see the work papers for more detail about this classification.

The annual fee assessed to each licensee also includes a share of the approximately $0.006 million fee-relief credit assessment allocated to the materials users fee class (see Table IV, “Allocation of Fee-Relief Adjustment and LLW Surcharge, FY 2019,” in Section IV, “Discussion,” of this document), and for certain categories of these licensees, a share of the approximately $0.2 million LLW surcharge costs allocated to the fee class. The proposed annual fee for each fee category is shown in the proposed revision to § 171.16(d).

The NRC proposes to collect $1.2 million in annual fees to recover generic transportation budgeted resources. The FY 2018 values are shown for comparison purposes.

Table of Contents I. Introduction A. Summary of Proposed Rule and Policy Objectives B. Background II. Description of Proposed Rule A. Proposal To Increase Asset Thresholds to $10 Billion B. Expected Impact C. Future Adjustments to the Thresholds III. Alternative Approaches To Adjust the Asset Thresholds A. Thresholds Adjustment Based on Percentage of the Number of Banking Organizations Covered by Prohibition B. Thresholds Adjustment Based on Asset Growth C. Thresholds Adjustment Increased Based on Inflation IV. FDIC Technical Amendments V. Request for Comment VI. Regulatory Analysis I. Introduction A. Summary of Proposed Rule and Policy Objectives

The Office of the Comptroller of the Currency (OCC), the Board of Governors of the Federal Reserve System (Board), and the Federal Deposit Insurance Corporation (FDIC) (collectively, the agencies) are inviting comment on a notice of proposed rulemaking (proposed rule or proposal) that would increase the major assets prohibition thresholds for management interlocks in the agencies' rules implementing the Depository Institution Management Interlocks Act (DIMIA). 1 The proposed increase in the thresholds would account for changes in the United States banking market since Congress established the current thresholds in 1996. Under the major assets prohibition of the current rules, a management official  2 of a depository organization  3 (or any affiliate of such organization) with total assets exceeding $2.5 billion may not serve as a management official of an unaffiliated depository organization (or any affiliate of such organization) with total assets exceeding $1.5 billion without seeking an exemption. The proposed rule would increase both thresholds to $10 billion.

In addition, the agencies are proposing three alternative approaches for increasing the asset thresholds, described below.

By increasing the major assets prohibition thresholds, the proposed rule and proposed alternative approaches would reduce the number of depository organizations subject to the major assets prohibition and reduce burden by relieving depository organizations below the increased thresholds from having to ask the agencies for an exemption from the major assets prohibition. The agencies anticipate that raising the thresholds will facilitate small depository organizations in finding qualified directors by eliminating the need to file a request for an exemption from the major assets prohibition.

DIMIA—implemented through the agencies' rules at 12 CFR parts 26, 212, 238 subpart J, and 348—fosters competition by prohibiting a management official from serving at the same time as a management official of an unaffiliated depository organization in situations where the management interlock may have an anticompetitive effect. 4 DIMIA and the agencies' rules achieve this purpose through three restrictions.

The first, the community prohibition, prohibits a management official of a depository organization from serving at the same time as a management official of an unaffiliated depository organization if the involved depository organizations (or a depository institution affiliate thereof) have offices in the same community. 5 The second, the relevant metropolitan statistical area (RMSA) prohibition, prohibits a management official of a depository organization from serving at the same time as a management official of an unaffiliated depository organization if the involved depository organizations (or a depository institution affiliate thereof) have offices in the same RMSA  6 and each depository organization has total assets of $50 million or more. The third, the major assets prohibition, prohibits a management official of a depository organization with total assets exceeding $2.5 billion (or any affiliate of such an organization) from serving at the same time as a management official of an unaffiliated depository organization with total assets exceeding $1.5 billion (or any affiliate of such an organization), regardless of the location of the two depository organizations. While the first two prohibitions capture the risk of anticompetitive effects from management interlocks between depository organizations that operate within overlapping geographical areas, the major assets prohibition addresses management interlocks between depository organizations that are large enough that a management interlock may present anticompetitive concerns despite the fact that the involved organizations may not have offices in the same community or RMSA.

DIMIA allows the agencies to prescribe regulations that permit otherwise prohibited interlocks under certain circumstances. 7 Pursuant to the general exemption provision of the agencies' regulations, the appropriate agency may exempt a prohibited interlock in response to an application by a depository organization if the appropriate agency finds that the interlock would not result in a monopoly or substantial lessening of competition and would not present safety and soundness concerns. 8

The $1.5 billion and $2.5 billion thresholds for the DIMIA major assets prohibition were enacted through amendments to DIMIA in the Economic Growth and Regulatory Paperwork Reduction Act of 1996 (EGRPRA). 9 During hearings for EGRPRA, it was noted that the increase of the asset thresholds to $1.5 billion and $2.5 billion was made because the previous asset threshold numbers did not “realistically reflect the size of large institutions in today's market.”  10

DIMIA, as amended, provides that the agencies may adjust the thresholds as necessary “to allow for inflation or market changes.”  11 The current major assets thresholds have not been adjusted since 1996, do not reflect the growth and consolidation among U.S. depository organizations that has occurred in the intervening years, and do not realistically reflect the size of large institutions in today's market. For instance, total assets at depository organizations have grown nearly 250 percent between the fourth quarter of 1996 and the fourth quarter of 2017. Moreover, in a March 2017 report to Congress mandated by EGRPRA, the agencies committed to reducing regulatory burden by adjusting the major assets thresholds in the agencies' DIMIA regulations. 12

The agencies are proposing to raise the major assets prohibition thresholds from $1.5 billion and $2.5 billion to $10 billion each. As proposed, the major assets prohibition would restrict management interlocks between unaffiliated depository organizations with total assets exceeding $10 billion (or any affiliates of such organizations).

The proposed threshold increase, and applying the major assets prohibition to larger depository organizations rather than small institutions ( i.e., community banks), is consistent with the purpose of DIMIA. 13 A $10 billion major assets prohibition threshold would prohibit interlocks between larger depository organizations, which could present a risk of anticompetitive conduct at the national banking market level, while exempting smaller or community-banking-organization-sized depository organizations, which do not present the same competitive risks at the national banking market level.

In addition, the proposal is consistent with the current thresholds that Congress and the agencies have used to distinguish between small institutions and larger institutions. For example, section 201 and 203 of the Economic Growth, Regulatory Relief, and Consumer Protection Act provide certain procedural burden relief for institutions with less than $10 billion in total consolidated assets. 14 Additionally, the Dodd-Frank Wall Street Reform and Consumer Protection Act uses a $10 billion threshold to distinguish between large banks subject to supervision by the Bureau of Consumer Financial Protection and small banks subject to prudential regulator supervision. 15 A $10 billion threshold also is consistent with the asset threshold used by the Board to distinguish between community banking organizations and larger banking organizations for supervisory and regulatory purposes, 16 the asset threshold used by the FDIC to distinguish between “small” and “large” institutions for purposes of its assessment regulations, 17 and the asset threshold used by the OCC to distinguish community banks from midsize and large banks. 18

Further, having a single, consistent asset threshold would simplify the agencies' DIMIA regulations and enable depository organizations to identify more easily whether they may be subject to the major assets prohibition.

The proposed rule would increase the number of depository organizations that would no longer be subject to the major assets prohibition and therefore reduce the number of institutions that need to seek an exemption from the major assets prohibition from the appropriate agency.

As of December 31, 2017, 1,021 depository organizations had total assets of more than $1.5 billion and were subject to the major assets prohibition. 19 In addition, 698 depository organizations with total assets of more than the $2.5 billion threshold were subject to restrictions on management interlocks with unaffiliated depository organizations with total assets exceeding the $1.5 billion threshold. If the agencies raise the $1.5 billion asset threshold to $10 billion, they would exempt 764 depository organizations from the major assets prohibition as of December 31, 2017. Of these 764 depository organizations, 224 are FDIC-supervised depository institutions, 113 are OCC-supervised depository institutions, 91 are Board-supervised depository institutions, and 336 are Board-supervised depository holding companies. As of December 31, 2017, 257 depository organizations reported total assets greater than $10 billion and would remain subject to the major assets prohibition.

Increasing the thresholds of the major assets prohibition would allow smaller depository organizations to form management interlocks with other smaller depository organizations and would relieve the depository organization seeking to add a management official from the associated burden of seeking a general exemption from the appropriate agency with respect to such a management interlock (unless the interlock would be prohibited by the community or RMSA prohibitions). The agencies believe that with fewer depository organizations subject to the major assets prohibition thresholds, the proposed rule would expand the pool of available management officials for smaller depository organizations no longer covered by the major assets prohibition.

The agencies do not expect the proposal to materially increase anticompetitive risk. The increase to the major assets prohibition thresholds is insufficient to materially increase the risk of anticompetitive interlocks between depository organizations at the national banking market level, and the proposal does not affect DIMIA prohibitions against interlocks within overlapping geographical areas.

Following adjustment of the thresholds by this proposed rule, if adopted, the agencies would make further adjustments to the thresholds to account for inflation through direct final rule without notice and comment pursuant to 12 CFR 26.3(c), 212.3(c), 238.93(c), and 348.3(c). If the agencies determine that further adjustments to the thresholds are warranted for reasons other than inflation, the agencies then would propose another adjustment through a subsequent notice of proposed rulemaking with the opportunity to comment.

As described above, in order to account for market changes since the agencies' DIMIA regulations were last updated, the agencies propose to increase the major assets prohibition thresholds to $10 billion. The agencies also invite comment on three alternative approaches discussed below. Consistent with the agencies' authority under DIMIA, two of the alternative approaches, like the proposed approach, are based on market changes, and the third alternative approach is based on inflation. 20 Because the proposal and the alternative approaches all would raise the major assets prohibition thresholds, the agencies expect that the impact for each proposal would be similar ( i.e., each approach would result in a greater number of depository organizations exempted from the major assets prohibition), varying only in the degree of the impact ( i.e., the number of depository organizations exempted).

Under the first alternative approach, the agencies would adjust the major assets prohibition thresholds so that approximately the same percentage of the total number of banking organizations  21 that were covered by the thresholds as of the fourth quarter of 1996—the year in which the $1.5 billion and $2.5 billion major assets prohibition thresholds were established by statute—would be covered as of fourth quarter 2017. By adjusting the major assets prohibition thresholds so that they cover the same percentage of the total number of banking organizations as was covered in 1996, this alternative approach accounts for changes in the U.S. banking market and seeks to maintain the prohibition's initial scope and impact—which was limited to only relatively large depository organizations—as well as the protections it provides against anticompetitive risk. This approach would increase the current thresholds of $1.5 billion and $2.5 billion to $7.9 billion and $11.8 billion, respectively.

As of the fourth quarter of 1996, the major assets prohibition thresholds covered the top 1.9 percent and 1.3 percent of banking organizations by asset size. By the fourth quarter of 2017, the percentage of banking organizations covered by the thresholds had increased to 6.83 percent and 4.44 percent. Adjusting the major assets prohibition thresholds to account for this market change would result in adjusted asset thresholds of $7.9 billion and $11.8 billion.

Raising the current $1.5 billion threshold to $7.9 billion would result in an additional 702 depository organizations being exempted from the major assets prohibition. Of these 702 depository organizations, 207 are FDIC-supervised depository institutions, 102 are OCC-supervised depository institutions, 82 are Board-supervised depository institutions, and 311 are Board-supervised depository holding companies. As of December 31, 2017, 78 depository organizations reported total assets greater than $7.9 billion but less than $11.8 billion. Finally, 241 depository organizations reported total assets greater than $11.8 billion and would remain subject to the major assets prohibition.

Under this second alternative approach, the agencies would propose to adjust the major assets prohibition thresholds to reflect the rate of asset growth for depository organizations over the period between the fourth quarter of 1996 and the fourth quarter of 2017. This approach seeks to replicate the major assets prohibition's coverage of the 1996 banking market by using total asset growth as a measure of market change. Total assets at depository organizations have grown by $15.6 trillion between the fourth quarter of 1996 and the fourth quarter of 2017. This growth represents an increase of three and one-half times the amount of total assets in the fourth quarter of 1996. Under this approach, the current major assets prohibition thresholds would be multiplied by the aforementioned rate of asset growth (3.5) to account for market changes for depository organizations. As a result, the current assets thresholds would be raised from $1.5 billion and $2.5 billion to $5.3 billion and $8.8 billion, respectively.

Raising the $1.5 billion asset threshold to $5.3 billion would result in an additional 616 depository organizations being exempted from the major assets prohibition. Of these 616 depository organizations, 182 are FDIC-supervised depository institutions, 89 are OCC-supervised depository institutions, 74 are Board-supervised depository institutions, and 271 are Board-supervised depository holding companies. As of December 31, 2017, 109 depository organizations reported total assets greater than $5.3 billion, but less than $8.8 billion. Finally, 296 depository organizations reported total assets greater than $8.8 billion and would remain subject to the major assets prohibition.

Under the third alternative approach, the agencies would adjust the major assets prohibition thresholds based on the year-to-year change in the average of the Consumer Price Index for Urban Wage Earners and Clerical Workers (CPI-W). Adjusting the asset thresholds based on inflation from the fourth quarter of 1996 to the fourth quarter of 2017 would increase the major assets prohibition thresholds from $1.5 billion and $2.5 billion to $2.3 billion and $3.9 billion, respectively. Although the agencies' current rules allow an adjustment for inflation based on the CPI-W to be published as a final rule without notice and comment, the agencies believe it is appropriate to seek comment on an inflation-based approach given the length of time that has passed without change to the thresholds and given the extent to which the banking market has changed during that time.

Raising the $1.5 billion asset threshold to $2.3 billion would exempt an additional 288 depository organizations from the major assets prohibition. Of these 288 depository organizations, 83 are FDIC-supervised depository institutions, 45 are OCC-supervised depository institutions, 36 are Board-supervised depository institutions, and 124 are Board-supervised depository holding companies. As of December 31, 2017, 219 depository organizations reported total assets greater than $2.3 billion but less than $3.9 billion. Finally, 514 depository organizations reported total assets greater than $3.9 billion and would remain subject to the major assets prohibition.

In addition to the proposed adjustment of the thresholds for the major assets prohibition, the FDIC intends to make two purely technical corrections to FDIC regulations, both pertaining to DIMIA implementation, by means of a separate final rule without notice and comment. The first correction pertains to 12 CFR 303.249 and would remove an erroneous statement. The second pertains to 12 CFR 348.4(i) and would correct a citation. Both technical corrections will be explained in further detail in the FDIC final rule.

The agencies invite comment on all aspects of this proposal, including the specific questions enumerated below.

Question 1: Are depository organizations the appropriate unit for measuring market change for purposes of the agencies' proposal? In addition, are banking organizations the appropriate unit for measuring market change for purposes of the agencies' alternative approach based on the percentage of the number of banking organizations covered by the prohibition? For all of the proposed approaches, would another unit of measurement be more appropriate? If so, what unit of measurement and why?

Question 2: Is the proposed $10 billion asset threshold appropriate to carry out the purposes of the major assets prohibition? Would one of the other alternative approaches proposed to adjust the thresholds be more appropriate to meet the purposes of the major assets prohibition? Would some other dollar amount, or some combination of asset thresholds or factors, be more appropriate? If so, what threshold, factor, or combination thereof would be appropriate, and why?

Question 3: Is the measurement period of the fourth quarter of 1996 through the fourth quarter of 2017, as used in the agencies' alternative approaches, appropriate for purposes of measuring market change? Should the agencies shorten or extend this measurement period? If so, why?

Question 4: Are there any other approaches to adjusting the major assets prohibition thresholds that would be more appropriate than the approaches proposed by the agencies? If so, what approach would be more appropriate and why?

Certain provisions of the proposed rule contain “collection of information” requirements within the meaning of the Paperwork Reduction Act (PRA) of 1995 (44 U.S.C. 3501-3521). In accordance with the requirements of the PRA, the agencies may not conduct or sponsor, and the 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 for the OCC is 1557-0014; the Board's is 7100-0134; and the FDIC's is 3064-0118. These information collections will be extended for three years, with revision. The information collection requirements contained in this proposed rulemaking have been submitted by the OCC and FDIC to OMB for review and approval under section 3507(d) of the PRA (44 U.S.C. 3507(d)) and section 1320.11 of the OMB's implementing regulations (5 CFR 1320). The Board reviewed the proposed rule under the authority delegated to the Board by OMB.

Comments are invited on:

a. Whether the collections of information are necessary for the proper performance of the agencies' functions, including whether the information has practical utility;

b. The accuracy or the estimate of the burden of the 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 the addresses listed in the ADDRESSES section of this document. 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; facsimile to (202) 395-6974; or email to oira_submission@omb.eop.gov , Attention, Federal Banking Agency Desk Officer.

Title of Information Collection: Management Official Interlocks.

Frequency: Annual, event driven.

Affected Public: Businesses or other for-profit.

OCC: National banks, Federal savings associations, and U.S. offices of foreign commercial banks, including Federal branches and agencies.

Board: State member banks (SMBs), bank holding companies (BHCs), savings and loan holding companies (SLHCs), and their affiliates; and U.S. offices of foreign commercial banks, including state-licensed branches and agencies.

FDIC: State nonmember banks, state savings associations, and certain subsidiaries of those entities; and U.S. offices of foreign commercial banks, including insured branches and agencies.

Current Actions: The proposed rule would revise section __.3, “Prohibitions,” of the agencies' DIMIA rules  22 by increasing the major asset prohibition thresholds from $2.5 billion and $1.5 billion to $10 billion each. Section __.6, “General Exemption,”  23 contains a process for applying for an exemption from the prohibitions in section __.3. With the increase in the major assets prohibition thresholds in section __.3, it is likely that fewer applications will be filed under section __.6. Therefore, the agencies have reduced their respondent counts for section __.6 accordingly. Also, in order to be consistent across the agencies, the agencies are applying a conforming methodology for calculating the burden estimates for the reporting and recordkeeping requirements.

OMB control number: 1557-0014.

Estimated number of respondents: 2.

Estimated average hours per response:

Reporting Sections 26.4(h)(1)(i) and 26.6(b)—4.

Recordkeeping Section 26.5(b)—3.

Estimated annual burden hours: 14.

OMB control number: 7100-NEW (The current management official interlocks reporting and recordkeeping requirements are housed under OMB control number 7100-0134 and will be separated out in a new OMB control number).

Estimated number of respondents: 4.

Estimated average hours per response:

Reporting Sections 212.4(h)(1)(i) and 212.6(b)—4.

Recordkeeping Section 212.5(b)—3.

Estimated annual burden hours: 28.

OMB control number: 3064-0118.

Estimated number of respondents: 6.

Estimated average hours per response:

Reporting Sections 348.4(h)(1)(i) and 348.6(b)—4.

Recordkeeping Section 348.5(b)—3.

Estimated annual burden hours: 42.

In general, the Regulatory Flexibility Act (RFA) (5 U.S.C. 601 et seq. ) requires that in connection with a rulemaking, an agency prepare and make available for public comment a regulatory flexibility analysis that describes the impact of the rule on small entities. The SBA has defined “small entities” to include certain organizations with total assets less than or equal to $550 million. 24 Under 5 U.S.C. 605(b), this analysis is not required if an agency certifies that the rule will not have a significant economic impact on a substantial number of small entities and publishes its certification and a brief explanatory statement in the Federal Register along with its rule.

OCC: The OCC currently supervises approximately 886 small entities. 25 Because the major assets prohibition of DIMIA prevents a management official of a depository organization with total assets exceeding $2.5 billion (depository organization threshold) or any affiliate of such organization from serving as a management official of an unaffiliated depository organization with total assets exceeding $1.5 billion (unaffiliated organization threshold) it is unlikely to affect any OCC-supervised small institutions. Therefore, the OCC certifies that the proposed rule would not have a significant economic impact on a substantial number of OCC-supervised small entities.

Board: The Board is providing an initial regulatory flexibility analysis with respect to this proposed rule. The Regulatory Flexibility Act, 5 U.S.C. 601 et seq. (RFA), requires an agency to consider whether the rules it proposes will have a significant economic impact on a substantial number of small entities. In connection with a proposed rule, the RFA requires an agency to prepare an Initial Regulatory Flexibility Analysis describing the impact of the rule on small entities or to certify that the proposed rule would not have a significant economic impact on a substantial number of small entities. An initial regulatory flexibility analysis must contain (1) a description of the reasons why action by the agency is being considered; (2) a succinct statement of the objectives of, and legal basis for, the proposed rule; (3) a description of, and, where feasible, an estimate of the number of small entities to which the proposed rule will apply; (4) a description of the projected reporting, recordkeeping, and other compliance requirements of the proposed rule, including an estimate of the classes of small entities that will be subject to the requirement and the type of professional skills necessary for preparation of the report or record; (5) an identification, to the extent practicable, of all relevant Federal rules which may duplicate, overlap with, or conflict with the proposed rule; and (6) a description of any significant alternatives to the proposed rule which accomplish its stated objectives. 26

The Board has considered the potential impact of the proposed rule on small entities in accordance with the RFA. Based on its analysis and for the reasons stated below, the Board believes that this proposed rule will not have a significant economic impact on a substantial number of small entities. Nevertheless, the Board is publishing and inviting comment on this initial regulatory flexibility analysis. A final regulatory flexibility analysis will be conducted after comments received during the public comment period have been considered.

As discussed in the Supplementary Information, the proposed rule would adjust the major assets prohibition thresholds for management interlocks in the Board's rules implementing DIMIA. Under the current major assets prohibition, a management official of a depository organization with total assets exceeding $2.5 billion (or any affiliate of such an organization) from serving at the same time as a management official of an unaffiliated depository organization with total assets exceeding $1.5 billion (or any affiliate of such an organization), regardless of the location of the two depository organizations. For these purposes, the term “depository organization” means a depository institution or a depository holding company. “Depository institution” means a commercial bank (including a private bank), a savings bank, a trust company, a savings and loan association, a building and loan association, a homestead association, a cooperative bank, an industrial bank, or a credit union, chartered under the laws of the United States and having a principal office located in the United States. Additionally, a United States office, including a branch or agency, of a foreign commercial bank is a depository institution. “Depository holding company” means a bank holding company or a savings and loan holding company (as more fully defined in section 202 of DIMIA) having its principal office located in the United States. 27 The primary benefit of the proposed rule would be to exclude from the major assets prohibition management interlocks involving depository organizations with total assets in excess of the current asset thresholds but below the proposed asset thresholds. Raising the thresholds will help to facilitate small banks in finding qualified directors by eliminating the need to file a request for an exemption from the major assets prohibition.

As discussed above, the Board's objective in proposing this rule would be to reduce the number of depository organizations subject to the major assets prohibition. The Board has authority under DIMIA to prescribe regulations to carry out DIMIA with respect to state banks that are members of the Federal Reserve System, bank holding companies, and savings and loan holding companies. 28

The Board's proposal would apply to state member banks, bank holding companies, and savings and loan holding companies having their principal offices in the United States. Under regulations issued by the Small Business Administration, a small entity includes a depository institution, bank holding company, or savings and loan holding company with total assets of $550 million or less and trust companies with total assets of $38.5 million or less. As of June 30, 2018, there were approximately 3,053 small bank holding companies, 184 small savings and loan holding companies, and 541 small state member banks. The proposed rule would increase the total asset level at which depository organizations and their affiliates become subject to the major assets prohibition from $1.5 billion and $2.5 billion to $10 billion and $10 billion, respectively.

To the extent that a small entity is subject to the major assets prohibition by virtue of its affiliation with a banking organization that has total assets exceeding $10 billion, the proposed rule would not impose any additional requirements on those small entities because they were already subject to the major assets prohibition. The proposed changes to the major assets prohibition would not impose any new reporting, recordkeeping, and other compliance requirements. Accordingly, the Board believes that the proposed rule will not have a significant economic impact on small banking organizations supervised by the Board.

The Board is aware of no other Federal rules that duplicate, overlap, or conflict with the proposed changes to the major assets prohibition thresholds.

The Board believes that the proposed rule will not have a significant economic impact on small entities supervised by the Board and therefore believes that there are no significant alternatives to the proposed rule that would reduce the economic impact on small entities supervised by the Board.

The Board welcomes comment on all aspects of its analysis. In particular, the Board requests that commenters describe the nature of any impact on small entities and provide empirical data to illustrate and support the extent of the impact.

FDIC: The Regulatory Flexibility Act (RFA) generally requires that, in connection with a proposed rule, an agency prepare and make available for public comment an initial regulatory flexibility analysis describing the impact of the rulemaking on small entities. 29 A regulatory flexibility analysis is not required, however, if the agency certifies that the rule will not have a significant economic impact on a substantial number of small entities. The Small Business Administration (SBA) has defined “small entities” to include banking organizations with total assets less than or equal to $550 million. 30 The FDIC supervises 3,643 depository institutions, 31 of which 2,840 are defined as small banking entities by the terms of the RFA. 32

The proposed rule will only affect institutions with total consolidated assets between the current thresholds of $1.5 billion and $2.5 billion and the proposed threshold of $10 billion. Therefore, the proposed rule will likely affect zero small entities.

Accordingly, the FDIC believes that the proposed rule will not have a significant impact on a substantial number of small entities. For the reasons described above and pursuant to 5 U.S.C. 605(b), the FDIC certifies that the proposed rule will not have a significant economic impact on a substantial number of small entities.

The FDIC invites comments on all aspects of the supporting information provided in this RFA section. In particular, would this rule have any significant effects on small entities that the FDIC has not identified?

The OCC analyzed the proposed rule under the factors set forth in the Unfunded Mandates Reform Act of 1995 (UMRA) (2 U.S.C. 1532). Under this analysis, the OCC considered whether the proposed rule includes a Federal mandate that may result in the expenditure by State, local, and Tribal governments, in the aggregate, or by the private sector, of $100 million or more in any one year (adjusted for inflation). The proposed rule does not impose new mandates. Therefore, the OCC concludes that the proposed rule will not result in an expenditure of $100 million or more annually by state, local, and tribal governments or by the private sector.

The Riegle Community Development and Regulatory Improvement Act of 1994 requires that each Federal banking agency, in determining the effective date and administrative compliance requirements for new regulations that impose additional reporting, disclosure, or other requirements on insured depository institutions (IDIs), consider, consistent with principles of safety and soundness and the public interest, any administrative burdens that such regulations would place on depository institutions, including small depository institutions, and customers of depository institutions, as well as the benefits of such regulations. In addition, new regulations that impose additional reporting, disclosures, or other new requirements on insured depository institutions generally must take effect on the first day of a calendar quarter that begins on or after the date on which the regulations are published in final form.

The proposed rule would reduce burden and imposes no additional reporting, disclosure, or other requirements on IDIs, including small depository institutions, nor on the customers of depository institutions. Nonetheless, in connection with determining an effective date for the proposed rule, the agencies invite comment on any administrative burdens that the proposed rule would place on depository institutions, including small depository institutions, and customers of depository institutions.

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. The agencies have sought to present the proposed rule in a simple and straightforward manner, and invite comment on the use of plain language. For example:

• Have the agencies organized the material to inform your needs? If not, how could the agencies present the proposed rule more clearly?

• Are the requirements in the proposed rule clearly stated? If not, how could the proposed rule be more clearly stated?

• Does the proposed rule contain technical language or jargon that is not clear? If so, which language requires clarification?

• Would a different format (grouping and order of sections, use of headings, paragraphing) make the proposed rule easier to understand? If so, what changes would achieve that?

• Is this section format adequate? If not, which of the sections should be changed and how?

• What other changes can the agencies incorporate to make the proposed rule easier to understand?

For the reasons stated in the preamble, the OCC proposes to amend 12 CFR part 26, the Board proposes to amend 12 CFR parts 212 and 238, and the FDIC proposes to amend 12 CFR part 348 as follows:

The Railway Labor Act (RLA), 45 U.S.C. 151 et seq. establishes the NMB whose functions, among others, are to administer certain provisions of the RLA with respect to investigating disputes as to the representative of a craft or class. In accordance with its authority under 45 U.S.C. 152, Ninth, the Board has considered changes to its rules to better facilitate the statutory mission to investigate representation disputes “among a carrier's employees as to who are the representatives of such employees.”

Currently, while employees have the ability to decertify a representative under the RLA, the process to decertify is unnecessarily complex and convoluted. By failing to have in place a straight-forward process for decertification of a representative, the Board is maintaining an unjustifiable hurdle for employees who no longer wish to be represented and failing to fulfill the statutory purpose of “freedom of association among employees.” 45 U.S.C. 151a(2).

Unlike the National Labor Relations Act, the RLA has no statutory provision for decertification of a bargaining representative. The Supreme Court, however, has held that, under Section 2, Fourth, 45 U.S.C. 152, Fourth, employees of the craft or class “have the right to determine who shall be the representative of the group or, indeed, whether they shall have any representation at all.” Bhd. of Railway and Steamship Clerks v. Assoc. for the Benefit of Non-Contract Employees, 380 US 650, 670 (1965)(ABNE). In ABNE, the Court further noted that the legislative history of the RLA supports the view that employees have the option of rejecting collective representation. Id. at 669. citing Hearings on H.R. 7650, House Committee on Interstate and Foreign Commerce, 73d Cong., 2d Sess., 34-35. In International Brotherhood of Teamsters v. Bhd. of Railway, Airline and Steamship Clerks, the United States Court of Appeals for the District of Columbia (D.C. Circuit), stated that “it is inconceivable that the right to reject collective representation vanishes entirely if the employees of a unit once choose collective representation. On its face that is a most unlikely rule, especially taking into account the inevitability of substantial turnover of personnel within the unit.” 402 F.2d 196, 202 (1968), See also Russell v. National Mediation Board, 714 F.2d 1332 (1983).

Under its current procedures, the NMB allows indirect rather than direct decertification. The Board does not allow an employee or a group of employees of a craft or class to apply for an election to vote for their current representative or for no union. Employees who wish to become unrepresented must follow a more convoluted path to an election because of the Board's requirement of the “straw man.” This straw man requirement means that if a craft or class of employees want to decertify, they must find a person willing to put their name up, i.e. “John Smith,” and then explain to at least fifty percent of the workforce that John Smith does not want to represent them, but if they want to decertify they have to sign the card authorizing him to represent them. Thus, in order to become unrepresented, employees are required to first sign an authorization card to have a strawman step in to represent them. In the resulting election, the ballot options will include the names of the current representative; John Smith, the strawman applicant; “no union;” and an option to write in the name of another representative. To decertify, employees have to vote for no representation.

It is NMB's statutory mandate to protect employees' freedom to choose a representative. There is, however, no statutory basis for the additional requirement of a straw man where employees seek to become unrepresented. Both courts and the Board have recognized that inherent in the right to representation is the right to be unrepresented. Accordingly, the Board proposes changing its rules to simplify the decertification process and put decertification on an equal footing with certification. Employees may submit authorization cards to decertify their current representative. The wording on the card must be unambiguous and clearly state the intent to no longer be represented by the current union. The showing of interest requirement will be the same showing of interest required for a certification election—at least 50 percent of the craft or class.

The necessity of a straw man will be eliminated, and the ballot will no longer include a strawman representation choice. Once it is determined that the showing of interest is valid and sufficient, the Board will authorize the election with the incumbent and the no representation option, along with a write-in option. The Board's existing run-off rules will apply.

Successful decertification, like certification, is a challenging and significant undertaking by employees with a substantial impact on the workplace for both employees and their employer. In the Board's view, the changes in the employee-employer relationship that occur when employees become represented, change representative or become unrepresented require similar treatment. For this reason, the Board proposes extending the two year time limit on applications in Sec. 1206.4(a) to decertifications as well as certifications. The other time limits set forth in 1206.4 will remain unchanged.

Member Puchala dissents from the Board majority's action in approving the proposed rule.

This rule is not a significant rule for purposes of Executive Order 12866 and has not been reviewed by the Office of Management and Budget.

As required by the Regulatory Flexibility Act, the NMB certifies that these regulatory changes will not have a significant impact on small business entities. This rule will not have any significant impact on the quality of the human environment under the National Environmental Policy Act.

The NMB has determined that the Paperwork Reduction Act does not apply because this interim regulation does not contain any information collection requirements that require the approval of the Office of Management and Budget.

The enabling legislation for FMCS provides that “the settlement of issues between employers and employees through collective bargaining may be advanced by making available full and adequate governmental facilities for conciliation, mediation, and voluntary arbitration . . .” 29 U.S.C. 171(b). Pursuant to the statute and 29 CFR part 1404, FMCS has long maintained a roster of qualified, private labor arbitrators to hear disputes arising under collective bargaining agreements and provide fact finding and interest arbitration. The existing regulation establishes the policy and administrative responsibility for the FMCS Roster, criteria and procedures for listing and removal, procedures for using arbitration services, an option for expedited arbitration and, in the appendix, a schedule of user fees.

FMCS is proposing to revise the current arbitration regulation to (1) clarify and shorten existing provisions and naming conventions and make other helpful style improvements; (2) eliminate redundancies and provisions that are never used in practice; (3) consolidate sections for ease of understanding and placement under appropriate headings; (4) update contact information and provisions regarding the use of technology; (5) reduce award submission requirements and reference an apprenticeship alternative for joining the Roster after completion of specified training; and (6) implement a modest increase in user fees that have remained unchanged for more than 8 years. The increased fees more accurately reflect FMCS's costs of maintaining the Roster and the technology to support it, as well as responding to requests for arbitrator panels and biographical data. The arbitrator listing fee increase would only apply to arbitrators on the Roster for 5 or more years, reflecting the greater likelihood for more experienced arbitrators to be selected by parties.

1. In § 1404.1, revise to make minor style improvements

2. In § 1404.3, revise (b) to eliminate “Services” from the Office title and use the abbreviated term “Roster;” revise (c) to make minor style improvements and eliminate (c)(1)(v) as unnecessary so that that it reads as follows:

3. In § 1404.4, revise (b) for minor style improvements, consolidate relevant portions of (d) and (e) to 1404.9 to place under the relevant heading and reduce verbiage, and revise last paragraph to renumber as (d) and eliminate redundant language.

4. In § 1404.5, revise preamble to update contact information and reflect that Director may designate someone to review Board recommendations; revise (b) to clarify requirements; revise (d) to make minor style improvements; specify in (3) that violations by arbitrators are not limited to late awards; clarify in (5) that information about arbitrator misconduct may come to the attention of FMCS in different ways, and remove existing (6) as extraneous and never used; renumber (7) as (6); and revise (f) for minor style improvements.

5. In § 1404.6, revise for minor style improvements, eliminate excess verbiage, and change language in (b) from “are encouraged to” to “must” to clarify requirement for arbitrators whose schedules do not permit timely hearing.

6. In § 1404.9, revise (a) to update contact information, and the rest of the section to incorporate consolidations from 1404.4 and 1404.11, rearrange for clarity, and eliminate redundant language.

7. In § 1404.11, moved existing (a) to 1404.9, and otherwise eliminated redundant or extraneous language throughout.

8. In § 1404.12, revised with minor style changes, eliminated existing (b) due to redundant language, clarified ambiguous and confusing language in existing (c) (new (b)), consolidated existing (d) into new (b), and eliminated (f) for unnecessary language.

9. In § 1404.13, revise with minor style improvement and specify that hearings must conform to Code of Professional Responsibility requirements.

10. In § 1404.14, revise to make minor style improvements, clarify language regarding delay and scheduling, clarify time for submitting arbitrator report and fee statement, and change language regarding consent for award publication to conform with requirements of the Code of Professional Responsibility and industry practice.

11. In § 1404.15, revise (a) to allow arbitrators to raise fees with notice if a case continues for over two years after appointment, (b) to allow arbitrators to specify multiple business addresses, and (d) to clarify information on fee disputes.

12. In § 1404.16, revise (a) to update for technology changes and to require arbitrators to provide contact information in the event they become incapacitated or deceased, and (b) to eliminate excess verbiage.

13. In § 1404.17, revise to eliminate excess verbiage.

14. In § 1404.18, revise to make minor style improvements and reduce words.

15. Remove § 1404.20 as the language is unnecessary and has never been applied.

16. Revise the Appendix to change fee schedules.

This rule is not a significant regulatory action for the purposes of Executive Order 12866 and has not been reviewed by the Office of Management and Budget. As required by the Regulatory Flexibility Act, I certify that this rule will not have a significant impact on a substantial number of small entities. This regulation does not have any federalism or tribal implications.

For the reasons stated in the preamble, FMCS proposes to revise 29 CFR part 1404 to read as follows:

On November 14, 2018, the North Carolina State Port Authority notified the Coast Guard that it will be transporting one pre-assembled Post-Panamax container crane up the Cape Fear River to the North Carolina State Port in Wilmington, North Carolina, and offloading it. The planned transit date is March 25, 2019, and the planned offload date is March 27, 2019. Due to crane preconstruction and vessel travel times, the crane could transit as early as March 20, 2019, and as late as April 15, 2019. The transit path will be from the Cape Fear River Entrance Buoy, north through the Cape Fear River to the turning basin, and ending at the North Carolina State Port in Wilmington, North Carolina. The planned offload date is two days after transit, but weather conditions may change the offload date to any day within five days after transit. The Captain of the Port (COTP) North Carolina has determined that potential safety hazards associated with transporting and offloading the container crane would be a concern for anyone transiting the Cape Fear River.

The purpose of this rule is to protect persons, vessels, and the marine environment on the navigable waters on the Cape Fear River during the transport and offload of the container crane. The Coast Guard proposes this rulemaking under authority in 33 U.S.C. 1231.

The COTP proposes to establish a safety zone on a portion of the Cape Fear River to be enforced during the transit of a vessel transporting one pre-assembled Post-Panamax container crane up the Cape Fear River from March 20 through April 15, 2019, and offloading the container within five days after transit. The currently scheduled transit date is March 25, 2019, and the currently scheduled offload date is March 27, 2019. The transport is expected to take between five and seven hours and the offload is expected to take up to five hours. Exact enforcement times will be based on tide schedules, anticipated sea conditions, and weather conditions, therefore the exact enforcement times will be announced by broadcast to mariners at least two days prior to the transit. The safety zone for the transit will include all navigable waters of the Cape Fear River from the International Regulations for Prevention of Collisions at Sea, 1972 (COLREGS, 72) Demarcation Line drawn from Oak Island Light House to Bald Head Island Abandon Light House noted on NOAA chart 11537 and proceeding north up the Cape Fear River from shore to shore to the Cape Fear Memorial Bridge, a length of approximately 26 miles. This portion of the safety zone will be enforced until the vessel transporting the crane has been safely moored at North Carolina State Port in Wilmington, North Carolina. The safety zone for the offload will include all navigable waters of the Cape Fear River within 200 yards of the transport vessel while it is moored. The duration of this zone is intended to protect persons, vessels, and the marine environment on the navigable waters of the Cape Fear River during the transport and offload of the container crane. No vessel or person will be permitted to enter the safety zone unless specifically authorized by the Captain of the Port North Carolina or a designated representative. There will be a pre-designated safety vessel ahead of the transport vessel to monitor the flow of traffic and inform mariners that the container crane transit is in progress. Vessels that are less than 40 feet in height and will not impede the transport vessel may request permission to pass through the safety zone or remain in place as the transport vessel passes. The Fort Fisher and Bald Head ferries will be able to operate on their normal schedule as long as the scheduled transit will not come within one mile of the transport vessel and they receive permission from the Captain of the Port North Carolina or a designated representative. The strict height restriction of 40 feet is required because portions of the transported crane extend over the water on both sides of the transport vessel. The regulatory text we are proposing appears at the end of this document.

We developed this proposed rule after considering numerous statutes and Executive orders related to rulemaking. Below we summarize our analyses based on a number of these statutes and Executive orders and we discuss First Amendment rights of protestors.

Executive Orders 12866 and 13563 direct agencies to assess the costs and benefits of available regulatory alternatives and, if regulation is necessary, to select regulatory approaches that maximize net benefits. Executive Order 13771 directs agencies to control regulatory costs through a budgeting process. This NPRM has not been designated a “significant regulatory action,” under Executive Order 12866. Accordingly, the NPRM has not been reviewed by the Office of Management and Budget (OMB), and pursuant to OMB guidance it is exempt from the requirements of Executive Order 13771.

This regulatory action determination is based on the size, location, and duration of the proposed safety zone. Vessel traffic will not be allowed to enter or transit portions of the Cape Fear River for 2 non-consecutive days from March 20 through April 20, 2019. Vessel traffic will not be allowed to enter or transit a portion of the Cape Fear River for approximately five to seven hours during the transit of the transport vessel, and for up to five hours during the offload after the transit. The Coast Guard will issue a Local Notice to Mariners and transmit a Broadcast Notice to Mariners via VHF-FM marine channel 16 regarding the safety zone. This portion of the Cape Fear River has been determined to be a high traffic area. This rule allows vessels to request permission to pass through the moving safety zone or remain in place as long as they are under the height restriction of 40 feet.

The Regulatory Flexibility Act of 1980, 5 U.S.C. 601-612, as amended, requires Federal agencies to consider the potential impact of regulations on small entities during rulemaking. The term “small entities” comprises small businesses, not-for-profit organizations that are independently owned and operated and are not dominant in their fields, and governmental jurisdictions with populations of less than 50,000. The Coast Guard certifies under 5 U.S.C. 605(b) that this proposed rule would not have a significant economic impact on a substantial number of small entities.

While some owners or operators of vessels intending to transit the safety zone may be small entities, for the reasons stated in section IV.A above, this proposed rule would not have a significant economic impact on any vessel owner or operator.

If you think that your business, organization, or governmental jurisdiction qualifies as a small entity and that this rule would have a significant economic impact on it, please submit a comment (see ADDRESSES ) explaining why you think it qualifies and how and to what degree this rule would economically affect it.

Under section 213(a) of the Small Business Regulatory Enforcement Fairness Act of 1996 (Pub. L. 104-121), we want to assist small entities in understanding this proposed rule. If the rule would affect your small business, organization, or governmental jurisdiction and you have questions concerning its provisions or options for compliance, please contact the person listed in the FOR FURTHER INFORMATION CONTACT section. The Coast Guard will not retaliate against small entities that question or complain about this proposed rule or any policy or action of the Coast Guard.

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

A rule has implications for federalism under Executive Order 13132, Federalism, if it has a substantial direct effect on the States, on the relationship between the national government and the States, or on the distribution of power and responsibilities among the various levels of government. We have analyzed this proposed rule under that Order and have determined that it is consistent with the fundamental federalism principles and preemption requirements described in Executive Order 13132.

Also, this proposed rule does not have tribal implications under Executive Order 13175, Consultation and Coordination with Indian Tribal Governments, because it would not have a substantial direct effect on one or more Indian tribes, on the relationship between the Federal Government and Indian tribes, or on the distribution of power and responsibilities between the Federal Government and Indian tribes. If you believe this proposed rule has implications for federalism or Indian tribes, please contact the person listed in the FOR FURTHER INFORMATION CONTACT section.

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

We have analyzed this proposed rule under Department of Homeland Security Directive 023-01 and Commandant Instruction M16475.1D, which guide the Coast Guard in complying with the National Environmental Policy Act of 1969 (42 U.S.C. 4321-4370f), and have made a preliminary determination that this action is one of a category of actions that do not individually or cumulatively have a significant effect on the human environment. This proposed rule involves a safety zone lasting five to seven hours on all navigable waters of the Cape Fear River from the International Regulations for Prevention of Collisions at Sea, 1972 (COLREGS, 72) Demarcation Line drawn from Oak Island Light House to Bald Head Island Abandon Light House noted on NOAA chart 11537 and proceeding north up the Cape Fear River from shore to shore to the Cape Fear Memorial Bridge, a length of approximately 26 miles, and a safety zone lasting up to five hours that would prohibit entry within 200 yards of a moored vessel. Normally such actions are categorically excluded from further review under paragraph L60(a) of Appendix A, Table 1 of DHS Instruction Manual 023-01-001-01, Rev. 01. A preliminary Record of Environmental Consideration supporting this determination is available in the docket where indicated under ADDRESSES . We seek any comments or information that may lead to the discovery of a significant environmental impact from this proposed rule.

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

We view public participation as essential to effective rulemaking, and will consider all comments and material received during the comment period. Your comment can help shape the outcome of this rulemaking. If you submit a comment, please include the docket number for this rulemaking, indicate the specific section of this document to which each comment applies, and provide a reason for each suggestion or recommendation.

We encourage you to submit comments through the Federal eRulemaking Portal at http://www.regulations.gov. If your material cannot be submitted using http://www.regulations.gov, contact the person in the FOR FURTHER INFORMATION CONTACT section of this document for alternate instructions.

We accept anonymous comments. All comments received will be posted without change to https://www.regulations.gov and will include any personal information you have provided. For more about privacy and the docket, visit https://www.regulations.gov/privacyNotice.

Documents mentioned in this NPRM as being available in the docket, and all public comments, will be in our online docket at https://www.regulations.gov and can be viewed by following that website's instructions. Additionally, if you go to the online docket and sign up for email alerts, you will be notified when comments are posted or a final rule is published.

For the reasons discussed in the preamble, the Coast Guard proposes to amend 33 CFR part 165 as follows:

I. Table of Abbreviations CFR Code of Federal Regulations DHS Department of Homeland Security FR Federal Register NPRM Notice of proposed rulemaking § Section U.S.C. United States Code II. Background, Purpose, and Legal Basis

The Escape from Managaha swim event is a recurring annual event. We have established safety zones for this swim event in past years.

The purpose of this rule is to ensure the safety of the participants and the navigable waters in the safety zone before, during, and after the scheduled swim event. The Coast Guard is proposing this rulemaking under authority in 46 U.S.C 70034 (previously codified in 33 U.S.C. 1231).

The COTP is proposing to establish a safety zone from 6:30 a.m. to 8:30 a.m. on March 31, 2019. This safety zone is necessary to protect all persons and vessels participating in this marine event from potential safety hazards associated with vessel traffic in the area. Race participants, chase boats, and organizers of the event will be exempt from the safety zone. Entry of persons or vessels into this safety zone is prohibited unless authorized by the COTP. The regulatory text we are proposing appears at the end of this document.

We developed this proposed rule after considering numerous statutes and Executive Orders related to rulemaking. Below we summarize our analyses based on a number of these statutes and Executive orders, and we discuss First Amendment rights of protestors.

Executive Orders 12866 and 13563 direct agencies to assess the costs and benefits of available regulatory alternatives and, if regulation is necessary, to select regulatory approaches that maximize net benefits. Executive Order 13771 directs agencies to control regulatory costs through a budgeting process. This NPRM has not been designated a “significant regulatory action” under Executive Order 12866. Accordingly, the NPRM has not been reviewed by the Office of Management and Budget (OMB), and pursuant to OMB guidance it is exempt from the requirements of Executive Order 13771.

This regulatory action determination is based on the size, location, duration, and time-of-day of the safety zone. Vessel traffic will be able to safely transit around this safety zone, which will impact a small designated area of Tanapag Harbor for 2 hours. Moreover, the Coast Guard will issue a Broadcast Notice to Mariners via VHF-FM marine channel 16 about the zone, and the rule allows vessels to seek permission to enter the zone.

The Regulatory Flexibility Act of 1980, 5 U.S.C. 601-612, as amended, requires Federal agencies to consider the potential impact of regulations on small entities during rulemaking. The term “small entities” comprises small businesses, not-for-profit organizations that are independently owned and operated and are not dominant in their fields, and governmental jurisdictions with populations of less than 50,000. The Coast Guard certifies under 5 U.S.C. 605(b) that this proposed rule would not have a significant economic impact on a substantial number of small entities.

While some owners or operators of vessels intending to transit the safety zone may be small entities, for the reasons stated in section IV.A above, this proposed rule would not have a significant economic impact on any vessel owner or operator.

If you think that your business, organization, or governmental jurisdiction qualifies as a small entity and that this rule would have a significant economic impact on it, please submit a comment (see ADDRESSES ) explaining why you think it qualifies, and how and to what degree this rule would economically affect it.

Under section 213(a) of the Small Business Regulatory Enforcement Fairness Act of 1996 (Pub. L. 104-121), we want to assist small entities in understanding this proposed rule. If the rule would affect your small business, organization, or governmental jurisdiction, and you have questions concerning its provisions or options for compliance, please contact the person listed in the FOR FURTHER INFORMATION CONTACT section. The Coast Guard will not retaliate against small entities that question or complain about this proposed rule or any policy or action of the Coast Guard.

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

A rule has implications for federalism under Executive Order 13132, Federalism, if it has a substantial direct effect on the States, on the relationship between the national government and the States, or on the distribution of power and responsibilities among the various levels of government. We have analyzed this proposed rule under that Order and have determined that it is consistent with the fundamental federalism principles and preemption requirements described in Executive Order 13132.

Also, this proposed rule does not have tribal implications under Executive Order 13175, Consultation and Coordination with Indian Tribal Governments, because it would not have a substantial direct effect on one or more Indian tribes, on the relationship between the Federal Government and Indian tribes, or on the distribution of power and responsibilities between the Federal Government and Indian tribes. If you believe this proposed rule has implications for federalism or Indian tribes, please contact the person listed in the FOR FURTHER INFORMATION CONTACT section.

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

We have analyzed this proposed rule under Department of Homeland Security Directive 023-01 and Commandant Instruction M16475.1D, which guide the Coast Guard in complying with the National Environmental Policy Act of 1969 (42 U.S.C. 4321-4370f), and have made a preliminary determination that this action is one of a category of actions that do not individually or cumulatively have a significant effect on the human environment. This proposed rule involves a safety zone lasting for 2 hours that will prohibit entry within 100-yards of swim participants. Normally such actions are categorically excluded from further review under paragraph L63(a) of Appendix A, Table 1 of DHS Instruction Manual 023-01-001-01, Rev. 01. A preliminary Record of Environmental Consideration supporting this determination is available in the docket where indicated under ADDRESSES . We seek any comments or information that may lead to the discovery of a significant environmental impact from this proposed rule.

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

We view public participation as essential to effective rulemaking, and will consider all comments and material received during the comment period. Your comment can help shape the outcome of this rulemaking. If you submit a comment, please include the docket number for this rulemaking, indicate the specific section of this document to which each comment applies, and provide a reason for each suggestion or recommendation.

We encourage you to submit comments through the Federal eRulemaking Portal at http://www.regulations.gov. If your material cannot be submitted using http://www.regulations.gov, contact the person in the FOR FURTHER INFORMATION CONTACT section of this document for alternate instructions.

We accept anonymous comments. All comments received will be posted without change to https://www.regulations.gov and will include any personal information you have provided. For more about privacy and the docket, visit https://www.regulations.gov/privacyNotice.

Documents mentioned in this NPRM as being available in the docket, and all public comments, will be in our online docket at https://www.regulations.gov and can be viewed by following that website's instructions. Additionally, if you go to the online docket and sign up for email alerts, you will be notified when comments are posted or when a final rule is published.

For the reasons discussed in the preamble, the Coast Guard is proposing to amend 33 CFR part 165 as follows:

Under Title VIII of the Alaska National Interest Lands Conservation Act (ANILCA) (16 U.S.C. 3111-3126), the Secretary of the Interior and the Secretary of Agriculture (Secretaries) jointly implement the Federal Subsistence Management Program. This program provides a rural preference for take of fish and wildlife resources for subsistence uses on Federal public lands and waters in Alaska. The Secretaries published temporary regulations to carry out this program in the Federal Register on June 29, 1990 (55 FR 27114), and final regulations were published in the Federal Register on May 29, 1992 (57 FR 22940). The Program has subsequently amended these regulations a number of times. Because this program is a joint effort between Interior and Agriculture, these regulations are located in two titles of the Code of Federal Regulations (CFR): Title 36, “Parks, Forests, and Public Property,” and Title 50, “Wildlife and Fisheries,” at 36 CFR part 242.1-28 and 50 CFR part 100.1-28, respectively. The regulations contain subparts as follows: Subpart A, General Provisions; Subpart B, Program Structure; Subpart C, Board Determinations; and Subpart D, Subsistence Taking of Fish and Wildlife.

Consistent with subpart B of these regulations, the Secretaries established a Federal Subsistence Board to administer the Federal Subsistence Management Program. The Board comprises:

• A Chair appointed by the Secretary of the Interior with concurrence of the Secretary of Agriculture;

• The Alaska Regional Director, U.S. Fish and Wildlife Service;

• The Alaska Regional Director, National Park Service;

• The Alaska State Director, Bureau of Land Management;

• The Alaska Regional Director, Bureau of Indian Affairs;

• The Alaska Regional Forester, USDA-Forest Service; and

• Two public members appointed by the Secretary of the Interior with concurrence of the Secretary of Agriculture.

Through the Board, these agencies and public members participate in the development of regulations for subparts C and D, which, among other things, set forth program eligibility and specific harvest seasons and limits.

In administering the program, the Secretaries divided Alaska into 10 subsistence resource regions, each of which is represented by a Federal Subsistence Regional Advisory Council (Council). The Councils provide a forum for rural residents with personal knowledge of local conditions and resource requirements to have a meaningful role in the subsistence management of fish and wildlife on Federal public lands in Alaska. The Council members represent varied geographical, cultural, and user interests within each region. Members are appointed by the Secretary of the Interior with the concurrence of the Secretary of Agriculture.

The Councils have a substantial role in reviewing this proposed rule and making recommendations for the final rule. The Federal Subsistence Board, through the Councils, will hold public meetings on this proposed rule at the following locations in Alaska, on the following dates:

During April 2019, the written proposals to change the subpart D, take of wildlife regulations, and subpart C, customary and traditional use determinations, will be compiled and distributed for public review. During a subsequent public comment period, written public comments will be accepted on the distributed proposals.

The Board, through the Councils, will hold a second series of public meetings in September through November 2019, to receive comments on specific proposals and to develop recommendations to the Board at the following locations in Alaska, on the following dates:

Prior to both series of meetings, notices will be published of specific dates, times, and meeting locations in local and statewide newspapers, along with announcements on radio, television and social media sites. Locations and dates may change based on weather or local circumstances. The amount of work on each Council's agenda determines the length of each Council meeting, but typically the meetings are scheduled to last 2 days. Occasionally a Council will lack information necessary during a scheduled meeting to make a recommendation to the Board or to provide comments on other matters affecting subsistence in the region. If this situation occurs, the Council may announce on the record a later teleconference to address the specific issue when the requested information or data is available. These teleconferences are open to the public, along with opportunities for public comment; the date and time will be announced during the scheduled meeting and that same information will be announced through news releases and local radio, television, and social media ads.

The Board will discuss and evaluate proposed changes to the subsistence management regulations during a public meeting scheduled to be held in Anchorage, Alaska, in April 2020. The Council Chairs, or their designated representatives, will present their respective Councils' recommendations at the Board meeting. Additional oral testimony may be provided on specific proposals before the Board at that time. At that public meeting, the Board will deliberate and take final action on proposals received that request changes to this proposed rule.

Proposals to the Board to modify the general fish and wildlife regulations, wildlife harvest regulations, and customary and traditional use determinations must include the following information:

a. Name, address, and telephone number of the requestor;

b. Each section and/or paragraph designation in this proposed rule for which changes are suggested, if applicable;

c. A description of the regulatory change(s) desired;

d. A statement explaining why each change is necessary;

e. Proposed wording changes; and

f. Any additional information that you believe will help the Board in evaluating the proposed change.

The Board immediately rejects proposals that fail to include the above information, or proposals that are beyond the scope of authorities in § __.24, subpart C (the regulations governing customary and traditional use determinations), and §§ __.25 and __.26, subpart D (the general and specific regulations governing the subsistence take of wildlife). If a proposal needs clarification, prior to being distributed for public review, the proponent may be contacted, and the proposal could be revised based on their input. Once distributed for public review, no additional changes may be made as part of the original submission. During the April 2020 meeting, the Board may defer review and action on some proposals to allow time for cooperative planning efforts, or to acquire additional needed information. The Board may elect to defer taking action on any given proposal if the workload of staff, Councils, or the Board becomes excessive. These deferrals may be based on recommendations by the affected Council(s) or staff members, or on the basis of the Board's intention to do least harm to the subsistence user and the resource involved. A proponent of a proposal may withdraw the proposal provided it has not been considered, and a recommendation has not been made, by a Council. After that, the Board must approve withdrawal of a proposal. The Board may consider and act on alternatives that address the intent of a proposal while differing in approach.

You may submit written comments and materials concerning this proposed rule by one of the methods listed in ADDRESSES . If you submit a comment via http://www.regulations.gov, your entire comment, including any personal identifying information, will be posted on the website. If you submit a hardcopy comment that includes personal identifying information, you may request at the top of your document that we withhold this information from public review. However, we cannot guarantee that we will be able to do so. We will post all hardcopy comments on http://www.regulations.gov.

Comments and materials we receive, as well as supporting documentation we used in preparing this proposed rule, will be available for public inspection on http://www.regulations.gov, or by appointment, between 8 a.m. and 3 p.m., Monday through Friday, except Federal holidays, at: USFWS, Office of Subsistence Management, 1011 East Tudor Road, Anchorage, AK 99503.

The Federal Subsistence Board is committed to providing access to these meetings for all participants. Please direct all requests for sign language interpreting services, closed captioning, or other accommodation needs to the Office of Subsistence Management, 907-786-3888, subsistence@fws.gov, or 800-877-8339 (TTY), at least 7 business days prior to the meeting you would like to attend.

As expressed in Executive Order 13175, “Consultation and Coordination with Indian Tribal Governments,” the Federal officials that have been delegated authority by the Secretaries are committed to honoring the unique government-to-government political relationship that exists between the Federal Government and federally Recognized Indian Tribes (Tribes) as listed in 79 FR 4748 (January 29, 2014). Consultation with Alaska Native corporations is based on Public Law 108-199, div. H, Sec. 161, Jan. 23, 2004, 118 Stat. 452, as amended by Public Law 108-447, div. H, title V, Sec. 518, Dec. 8, 2004, 118 Stat. 3267, which provides that: “The Director of the Office of Management and Budget and all Federal agencies shall hereafter consult with Alaska Native corporations on the same basis as Indian tribes under Executive Order No. 13175.”

The Alaska National Interest Lands Conservation Act does not provide specific rights to Tribes for the subsistence taking of wildlife, fish, and shellfish. However, because tribal members are affected by subsistence fishing, hunting, and trapping regulations, the Secretaries, through the Board, will provide federally recognized Tribes and Alaska Native corporations an opportunity to consult on this proposed rule.

The Board will engage in outreach efforts for this proposed rule, including a notification letter, to ensure that Tribes and Alaska Native corporations are advised of the mechanisms by which they can participate. The Board provides a variety of opportunities for consultation: Proposing changes to the existing rule; commenting on proposed changes to the existing rule; engaging in dialogue at Council meetings; engaging in dialogue at the Board's meetings; and providing input in person, by mail, email, or phone at any time during the rulemaking process. The Board commits to efficiently and adequately providing an opportunity to Tribes and Alaska Native corporations for consultation in regard to subsistence rulemaking.

The Board will consider Tribes' and Alaska Native corporations' information, input, and recommendations, and address their concerns as much as practicable.

Subpart C and D regulations are subject to periodic review and revision. The Federal Subsistence Board currently completes the process of revising subsistence take of wildlife regulations in even-numbered years and fish and shellfish regulations in odd-numbered years; public proposal and review processes take place during the preceding year. The Board also addresses customary and traditional use determinations during the applicable cycle.

The current subsistence program regulations form the starting point for consideration during each new rulemaking cycle. The regulations at § __.24 pertain to customary and traditional use determinations; the regulations at § __.25 pertain to general provisions governing the subsistence take of wildlife, fish, and shellfish; and the regulations at § __.26 pertain to specific provisions governing the subsistence take of wildlife.

The text of the proposed amendments to 36 CFR parts 242.24, 242.25, and 242.26 and 50 CFR parts 100.24, 100.25, and 100.26 is the final rule for the 2018-2020 regulatory period for wildlife (83 FR 50758; October 9, 2018).

These regulations will remain in effect until subsequent Board action changes elements as a result of the public review process outlined above in this document.

A Draft Environmental Impact Statement that described four alternatives for developing a Federal Subsistence Management Program was distributed for public comment on October 7, 1991. The Final Environmental Impact Statement (FEIS) was published on February 28, 1992. The Record of Decision (ROD) on Subsistence Management for Federal Public Lands in Alaska was signed April 6, 1992. The selected alternative in the FEIS (Alternative IV) defined the administrative framework of an annual regulatory cycle for subsistence regulations.

A 1997 environmental assessment dealt with the expansion of Federal jurisdiction over fisheries and is available at the office listed under FOR FURTHER INFORMATION CONTACT . The Secretary of the Interior, with concurrence of the Secretary of Agriculture, determined that expansion of Federal jurisdiction does not constitute a major Federal action significantly affecting the human environment and, therefore, signed a Finding of No Significant Impact.

An ANILCA § 810 analysis was completed as part of the FEIS process on the Federal Subsistence Management Program. The intent of all Federal subsistence regulations is to accord subsistence uses of fish and wildlife on public lands a priority over the taking of fish and wildlife on such lands for other purposes, unless restriction is necessary to conserve healthy fish and wildlife populations. The final § 810 analysis determination appeared in the April 6, 1992, ROD and concluded that the Federal Subsistence Management Program, under Alternative IV with an annual process for setting subsistence regulations, may have some local impacts on subsistence uses, but will not likely restrict subsistence uses significantly.

During the subsequent environmental assessment process for extending fisheries jurisdiction, an evaluation of the effects of this rulemaking process was conducted in accordance with § 810. That evaluation also supported the Secretaries' determination that these rules will not reach the “may significantly restrict” threshold that would require notice and hearings under ANILCA § 810(a).

This proposed rule does not contain any new collections of information that require Office of Management and Budget (OMB) approval. OMB has reviewed and approved the collections of information associated with the subsistence regulations at 36 CFR part 242 and 50 CFR part 100, and assigned OMB Control Number 1018-0075, which expires June 30, 2019. An agency may not conduct or sponsor and you are not required to respond to a collection of information unless it displays a currently valid OMB control number.

Executive Order 12866 provides that the Office of Information and Regulatory Affairs (OIRA) in the Office of Management and Budget will review all significant rules. OIRA has determined that this proposed rule is not significant.

Executive Order 13563 reaffirms the principles of E.O. 12866 while calling for improvements in the nation's regulatory system to promote predictability, to reduce uncertainty, and to use the best, most innovative, and least burdensome tools for achieving regulatory ends. The executive order directs agencies to consider regulatory approaches that reduce burdens and maintain flexibility and freedom of choice for the public where these approaches are relevant, feasible, and consistent with regulatory objectives. E.O. 13563 emphasizes further that regulations must be based on the best available science and that the rulemaking process must allow for public participation and an open exchange of ideas. We have developed this rule in a manner consistent with these requirements.

The Regulatory Flexibility Act of 1980 (5 U.S.C. 601 et seq. ) requires preparation of flexibility analyses for rules that will have a significant effect on a substantial number of small entities, which include small businesses, organizations, or governmental jurisdictions. In general, the resources to be harvested under this proposed rule are already being harvested and consumed by the local harvester and do not result in an additional dollar benefit to the economy. However, we estimate that two million pounds of meat are harvested by subsistence users annually and, if given an estimated value of $3.00 per pound, this amount would equate to about $6 million in food value statewide. Based upon the amounts and values cited above, the Departments certify that this rulemaking will not have a significant economic effect on a substantial number of small entities within the meaning of the Regulatory Flexibility Act.

Under the Small Business Regulatory Enforcement Fairness Act (5 U.S.C. 801 et seq. ), this proposed rule is not a major rule. It will not have an effect on the economy of $100 million or more, will not cause a major increase in costs or prices for consumers, and will not have significant adverse effects on competition, employment, investment, productivity, innovation, or the ability of U.S.-based enterprises to compete with foreign-based enterprises.

Title VIII of ANILCA requires the Secretaries to administer a subsistence priority for rural Alaskan residents on public lands. The scope of this program is limited by definition to certain public lands. Likewise, these proposed regulations have no potential takings of private property implications as defined by Executive Order 12630.

The Secretaries have determined and certify pursuant to the Unfunded Mandates Reform Act, 2 U.S.C. 1502 et seq., that this rulemaking will not impose a cost of $100 million or more in any given year on local or State governments or private entities. The implementation of this rule is by Federal agencies and there is no cost imposed on any State or local entities or tribal governments.

The Secretaries have determined that these regulations meet the applicable standards provided in §§ 3(a) and 3(b)(2) of Executive Order 12988, regarding civil justice reform.

In accordance with Executive Order 13132, the proposed rule does not have sufficient federalism implications to warrant the preparation of a Federalism Assessment. Title VIII of ANILCA precludes the State from exercising subsistence management authority over fish and wildlife resources on Federal lands unless it meets certain requirements.

Title VIII of ANILCA does not provide specific rights to tribes for the subsistence taking of wildlife, fish, and shellfish. However, as described above under Tribal Consultation and Comment, the Secretaries, through the Board, will provide federally recognized Tribes and Alaska Native corporations an opportunity to consult on this proposed rule.

Executive Order 13211 requires agencies to prepare Statements of Energy Effects when undertaking certain actions. However, this proposed rule is not a significant regulatory action under E.O. 13211, affecting energy supply, distribution, or use, and no Statement of Energy Effects is required.

Theo Matuskowitz drafted this proposed rule under the guidance of Thomas C.J. Doolittle, Jr. of the Office of Subsistence Management, Alaska Regional Office, U.S. Fish and Wildlife Service, Anchorage, Alaska. Additional assistance was provided by:

• Daniel Sharp, Alaska State Office, Bureau of Land Management;

• Clarence Summers, Alaska Regional Office, National Park Service;

• Dr. Glenn Chen, Alaska Regional Office, Bureau of Indian Affairs;

• Carol Damberg, Alaska Regional Office, U.S. Fish and Wildlife Service; and

• Thomas Whitford, Alaska Regional Office, USDA-Forest Service.

For the reasons set out in the preamble, the Federal Subsistence Board proposes to amend 36 CFR part 242 and 50 CFR part 100 for the 2020-21 and 2021-22 regulatory years.

Inspection of Public Comments: All comments received before the close of the comment period are available for viewing by the public, including any personally identifiable or confidential business information that is included in a comment. We post all comments received before the close of the comment period on the following website as soon as possible after they have been received: http://regulations.gov. Follow the search instructions on that website to view public comments.

The Health Insurance Portability and Accountability Act of 1996 (HIPAA) required the Secretary of the Department of Health and Human Services (HHS) to adopt standards for electronic health care administrative transactions conducted between health care providers, health plans, and health care clearinghouses. In January 2009 (74 FR 3295), the Secretary adopted the National Council of Prescription Drug Programs (NCPDP) Telecommunication Standard Implementation Guide, Version D, Release 0, August 2007 (hereinafter referred to as Version D.0) for the following retail pharmacy transactions: Health care claims or equivalent encounter information; referral certification and authorization; and coordination of benefits. As discussed later, a technical issue with Version D.0 necessitates a modification of the requirements for the use of this standard.

The HHS Office of the Inspector General (OIG) conducted a study of Medicare Part D payments for Schedule II drugs that were billed as refills in 2009. Schedule II drugs are of particular interest to regulators because of the public health issues associated with their use and the potential for misuse and abuse. Schedule II drugs are defined, in part, by the Controlled Substances Act (CSA) as those with a high potential for abuse, with use potentially leading to severe psychological or physical dependence (21 U.S.C. 812(b)(2)). The CSA prohibits the refilling of Schedule II drugs; however, in some cases partial fills are permissible. Partial fills of Schedule II drugs were previously allowed only in limited circumstances, including where a pharmacist had less quantity on hand than the prescribed amount of medication, the prescription was for a patient in a LTC facility, or a patient had a terminal illness. 1

Based on the data from the study, the HHS OIG issued a report in September 2012 titled “Inappropriate Medicare Part D Payments for Schedule II Drugs Billed as Refills,” which analyzed all of the 2009 program year prescription drug event (PDE) records for refills of Schedule II drugs. 2 The OIG analyzed 20.1 million records for Schedule II drugs and identified refills according to the numeric values in a particular data field—the Fill Number (403-D3)  3 field. The OIG concluded that the Medicare Part D program had inappropriately paid $25 million for 397,203 Schedule II drug refills and that long-term care (LTC) facility pharmacies billed for 75 percent of such refills. OIG stated that the Medicare Part D plan sponsors should not have paid for those drugs because federal law prohibits Schedule II drug refills, and concluded that “[p]aying for such drugs raises public health concerns and may contribute to the diverting of controlled substances and their being resold on the street.”  4

PDE records are claim summary records submitted by prescription drug plan sponsors to CMS for every prescription filled by a provider for a Medicare Part D beneficiary. PDE records contain data elements from prescription drug claims. One of those data elements is the Fill Number (403-D3) field. The Version D.0 implementation specifications require that a “0” be entered in that field for a new prescription and that the number be sequentially increased by 1 for each refill. For purposes of its report, the OIG methodology specified that any value greater than zero is considered a refill. 5 Accordingly, where it found the value in the Fill Number (403-D3) field in a PDE record to be greater than zero, the OIG concluded that the PDE record was a refill for a Schedule II drug, though it acknowledged, given the fact that LTC facility pharmacies were allowed to dispense partial fills (where less than the full amount prescribed is dispensed) for Schedule II drugs under certain conditions, that it was possible some LTC facility pharmacies may have incorrectly billed partial fills of these drugs as refills.

In its written response to the OIG report, 6 the Centers for Medicare & Medicaid Services (CMS) noted its concern that the OIG's strict interpretation of PDE data did not support the OIG's findings. CMS believed that the OIG's findings were based in part on a misinterpretation of Schedule II drug partial fills dispensed to LTC facility residents as refills. The NCPDP maintains a work group, known as WG9 Government Programs Medicare Part D FAQ Task Group (hereinafter referred to as Task Group), designed to guide federal pharmacy programs on NCPDP standards. CMS made an inquiry to the Task Group, noting that although the OIG report appeared to misinterpret partial fills dispensed to patients in LTC facility pharmacies as refills, it was not aware of any means by which such a pharmacy could distinguish partial fills of a controlled substance prescription for billing purposes without using the Fill Number (403-D3) field. This inquiry resulted in NCPDP submitting Designated Standard Mainenance Organization (DSMO) change request #1182  7 to update the pharmacy standard.

In August 17, 2000 Federal Register (65 FR 50312), we published a final rule titled “Health Insurance Reform: Standards for Electronic Transactions” in which the Secretary adopted procedures to maintain existing HIPAA standards, modify existing HIPAA standards, and adopt new HIPAA standards. This August 2000 final rule also established a new category of organization, entitled “Designated Standard Maintenance Organization (DSMO).” DSMOs which are accredited by the American National Standards Institute (ANSI), are responsible for maintaining the standards adopted under HIPAA and are required to receive and process change requests proposals for new standards or the modification of existing standards. Individuals, entities and organizations that believe an adopted standard requires modification may submit change requests to the appropriate DSMO. The change request must be accompanied by a documented business case that supports the recommendation. The DSMO, through committee structure, will then review the request and notify the appropriate Standard Development Organization, in this case, whether it approves or rejects the modification request. Approved recommendations are then forwarded to National Committee of Vital Health Statistics (NCVHS) by the DSMO. NCVHS reviews the recommendation and, through its own committee structure, determines whether or not to formally recommend adoption of the modification by the Secretary of HHS.

DSMO change request #1182, was done in response to CMS request to the Task Group if there was a way to appropriately use the current NCPDP D.0 standard to distinguish partial fills of a controlled substance prescription from refills in LTC facility pharmacy claims. The Task Group replied in a letter  8 to CMS advising that the Version D.0 implementation specification does not support the OIG's findings regarding the use of the Fill Number (403-D3) field, further stating that the industry uses the Fill Number (403-D3) field to represent the fill number (that is, the amount actually dispensed) and not necessarily the refill number. The Task Group indicated it would work on a clarification to avoid further misinterpretation, advising CMS that the NCPDP would recommend changes to the standard to allow Version D.0 to specify the conditional use of the Quantity Prescribed (460-ET) field, which is not used in the claim billing transaction, to indicate the actual quantity prescribed in the transmission of the claim, which would make data available to validate whether there are inappropriate fills in excess of the quantity prescribed. The NCPDP effected this change in its November 2012 publication of Version D.0, which required the use of the Quantity Prescribed (460-ET) field when claims for Schedule II drugs are submitted to Medicare Part D. NCPDP's modification to the standard addressed Medicare Part D only, therefore HHS has not adopted the 2012 version because it is limited to Medicare Part D only. Therefore, HIPAA covered entities may not use it to remain in compliance with HIPAA. HHS believes that by modifying the requirements for the use of the NCPDP Telecommunication Standard Implementation Guide, Version D, Release 0 (Version D.0), August 2007, all covered entities, not just entities submitting Medicare Part D transactions, to clearly distinguish whether a prescription is a “partial fill,” where less than the full amount prescribed is dispensed, or a refill, in the HIPAA retail pharmacy transactions.

The National Committee on Vital and Health Statistics (NCVHS) was established by statute in 1949; it serves as an advisory committee to the Secretary and is statutorily conferred a significant role in the Secretary's adoption and modification of HIPAA standards. On June 21, 2013, the NCVHS wrote to the Secretary that it agreed with the NCPDP's recommended plan to allow Version D.0 to specify the conditional use of the Quantity Prescribed (460-ET) field in a republished Version D.0 with an explanation in the Editorial Corrections section and a change to the Version D.0 Editorial Document. 9 The NCVHS indicated that with this change, “data will be available to validate whether or not there are inappropriate fills in excess of the quantity prescribed, a concern raised in a September, 2012 report from the HHS Office of the Inspector General.” In light of the opioid crisis, HHS believes in the importance of a targeted modification of the Version D.0 standard, to ensure the availability of data to indicate whether Schedule II drugs are being inappropriately filled, and we are proposing requirements for the use of Version D.0 to specify that covered entities must treat the Quantity Prescribed (460-ET) field as required for retail pharmacy transactions.