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In rule document 2018-27784, appearing on pages 66599 through 66601, in the issue of Thursday, December 27, 2018, make the following corrections:
Federal Aviation Administration (FAA), DOT.
Final special conditions; request for comments.
These special conditions are issued for The Boeing Company (Boeing) Model 777-9 airplane. This airplane will have a novel or unusual design feature when compared to the state of technology envisioned in the airworthiness standards for transport-category airplanes. This design feature is composite fuel-tank structure as it relates to post-crash fire survivability. The applicable airworthiness regulations do not contain adequate or appropriate safety standards for this design feature. These special conditions contain the additional safety standards that the Administrator considers necessary to establish a level of safety equivalent to that established by the existing airworthiness standards.
This action is effective on Boeing on February 27, 2019. Send comments on or before April 15, 2019.
Send comments identified by Docket No. FAA-2018-1017 using any of the following methods:
•
•
•
•
Suzanne Lucier, Propulsion and Mechanical Systems Section, AIR-672, Transport Standards Branch, Policy and Innovation Division, Aircraft Certification Service, Federal Aviation Administration, 2200 South 216th Street, Des Moines, Washington 98198; telephone and fax 206-231-3173; email
The FAA has determined that notice of, and opportunity for prior public comment on, these special conditions is impracticable because the substance of these special conditions has been published in the
We invite interested people to take part in this rulemaking by sending written comments, data, or views. The most helpful comments reference a specific portion of the special conditions, explain the reason for any recommended change, and include supporting data.
We will consider all comments we receive by the closing date for comments. We may change these special conditions based on the comments we receive.
On March 12, 2015, Boeing applied for an amendment to Type Certificate No. T00001SE to include the new 777-9 airplane. This airplane, which is a derivative of the Boeing Model 777 airplane currently approved under Type Certificate No. T00001SE, is a twin-engine, transport-category airplane with seating for 495 passengers and a maximum takeoff weight of 775,000 pounds.
Under the provisions of title 14, Code of Federal Regulations (14 CFR) 21.101, Boeing must show that the Model 777-9 airplane meets the applicable
If the Administrator finds that the applicable airworthiness regulations (
Special conditions are initially applicable to the model for which they are issued. Should the type certificate for that model be amended later to include any other model that incorporates the same novel or unusual design feature, or should any other model already included on the same type certificate be modified to incorporate the same novel or unusual design feature, these special conditions would also apply to the other model under § 21.101.
In addition to the applicable airworthiness regulations and special conditions, the Boeing Model 777-9 airplane must comply with the fuel-vent and exhaust-emission requirements of 14 CFR part 34, and the noise-certification requirements of 14 CFR part 36.
The FAA issues special conditions, as defined in 14 CFR 11.19, in accordance with § 11.38, and they become part of the type certification basis under § 21.101.
The Boeing Model 777-9 airplane will incorporate the following novel or unusual design feature:
Composite fuel-tank structure as it relates to post-crash fire survivability.
As with previous applicant airplane designs with underwing-mounted engines, the wing tanks and center tanks are located in proximity to the passengers and near the engines. Experience indicates post-crash survivability is greatly influenced by the size and intensity of any fire that occurs. Tests conducted at the FAA Technical Center have shown the ability of aluminum wing surfaces to withstand post-crash fire conditions. These tests have verified adequate dissipation of heat across wetted aluminum fuel-tank surfaces so that localized hot spots do not occur, thus minimizing the threat of explosion. This inherent capability of aluminum to dissipate heat also allows the wing lower surface to retain its load-carrying characteristics during a fuel-fed ground fire. These properties significantly delay wing collapse and burn-through for a time interval that usually exceeds evacuation times. In addition, as an aluminum fuel tank is heated with significant quantities of fuel inside, fuel vapor accumulates in the ullage space, exceeding the upper flammability limit relatively quickly, and thus reducing the threat of a fuel-tank explosion prior to fuel-tank burn-through. The service history of conventional aluminum airplanes has shown that fuel-tank explosions caused by ground fires have been rare on airplanes configured with flame arrestors in the fuel-tank vent lines. Fuel tanks constructed with composite materials, a new technology, may or may not have equivalent capability.
Current regulations were developed and have evolved under the assumption that wing construction would be of aluminum materials, which provide inherent properties. Current regulations may not be adequate when applied to airplanes constructed of different materials.
Aluminum has the following properties with respect to fuel tanks and fuel-fed external fires.
Aluminum is highly thermally conductive. It readily transmits the heat of a fuel-fed external fire to fuel in the tank. This has the benefit of rapidly driving the fuel-tank ullage to exceed the upper flammability limit prior to burn-through of the fuel-tank skin, or heating of the wing upper surface above the auto-ignition temperature. This greatly reduces the threat of fuel-tank explosion.
Aluminum panels at thicknesses previously used in wing lower surfaces of large transport-category airplanes have been fire resistant as defined in 14 CFR part 1, and Advisory Circular (AC) 20-135, “Powerplant Installation and Propulsion System Component Fire Protection Test Methods, Standards and Criteria.”
The heat-absorption capacity of both aluminum and fuel prevent burn-through and wing collapse for a time interval that generally exceeds the passenger evacuation time.
The extensive use of composite materials in the design of the Boeing Model 777-9 airplane wing and fuel-tank structure is considered a major change from conventional and traditional methods of construction. The applicable airworthiness regulations do not contain specific standards for post-crash fire-safety performance of wing and fuel-tank skin or structure.
To provide the same level of safety as exists with conventional airplane construction, the applicant must demonstrate that the airplane has sufficient post-crash survivability to enable occupants to safely evacuate in the event that the wings are exposed to a large fuel-fed fire. Factors in fuel-tank survivability are the structural integrity of the wing and tank, flammability of the tank, burn-through resistance of the wing skin, and the presence of auto-ignition threats during exposure to a fire. The FAA assessed post-crash survival time during the adoption of Amendment 25-111 for fuselage burn-through protection. Studies conducted by and on behalf of the FAA indicated that, following a survivable accident, prevention of fuselage burn-through for approximately 5 minutes can significantly enhance survivability. (See report numbers DOT/FAA/AR-99/57 and DOT/FAA/AR-02/49.) Research reveals little benefit in requiring wing-skin design to prevent wing-skin burn-through beyond five minutes, due to the effects of the fuel fire itself on the rest of the airplane. That assessment was carried out based on accidents involving airplanes with conventional fuel tanks, and considering the ability of ground personnel to rescue occupants. In addition, AC 20-135 indicates that, when aluminum is used for fuel tanks, the tank should withstand the effects of fire for 5 minutes without failure. Therefore, to be consistent with existing capability and related requirements, the applicant airplane fuel tanks must be capable of resisting a post-crash fire for at least 5 minutes. In demonstrating compliance, the applicant must address a range of fuel loads from minimum to maximum, as well as any other critical fuel load.
These special conditions contain the additional safety standards that the Administrator considers necessary to establish a level of safety equivalent to that established by the existing airworthiness standards.
As discussed above, these special conditions are applicable to the Boeing Model 777-9 airplane. Should Boeing apply at a later date for a change to the type certificate to include another model incorporating the same novel or unusual design feature, these special conditions would apply to that model as well.
This action affects only a certain novel or unusual design feature on one model of airplane. It is not a rule of general applicability.
Aircraft, Aviation safety, Reporting and recordkeeping requirements.
The authority citation for these special conditions is as follows:
49 U.S.C. 106(f), 106(g), 40113, 44701, 44702, 44704.
Accordingly, pursuant to the authority delegated to me by the Administrator, the following special conditions are issued as part of the type certification basis for Boeing Model 777-9 airplanes.
In addition to complying with 14 CFR part 25 regulations governing the fire-safety performance of the fuel tanks, wings, and nacelle, the Boeing Model 777-9 airplane must demonstrate acceptable post-crash survivability in the event the wings are exposed to a large fuel-fed ground fire. Boeing must demonstrate that the wing and fuel-tank design can endure an external fuel-fed pool fire for at least 5 minutes. This must be demonstrated for minimum fuel loads (not less than reserve fuel levels) and maximum fuel loads (maximum-range fuel quantities), and other identified critical fuel loads. Considerations must include fuel-tank flammability, burn-through resistance, wing structural-strength-retention properties, and auto-ignition threats during a ground-fire event for the required duration.
Federal Aviation Administration (FAA), Department of Transportation (DOT).
Final rule.
We are adopting a new airworthiness directive (AD) for certain Airbus SAS Model A318 series airplanes; Model A319 series airplanes; Model A320 series airplanes; and Model A321 series airplanes. This AD was prompted by a revision of an airworthiness limitation item (ALI) document, which requires more restrictive maintenance requirements and airworthiness limitations. This AD requires revising the operator's maintenance or inspection program, as applicable, to incorporate new maintenance requirements and airworthiness limitations. We are issuing this AD to address the unsafe condition on these products.
This AD is effective April 3, 2019.
The Director of the Federal Register approved the incorporation by reference of a certain publication listed in this AD as of April 3, 2019.
For service information identified in this final rule, contact Airbus SAS, Airworthiness Office—EIAS, Rond-Point Emile Dewoitine No: 2, 31700 Blagnac Cedex, France; telephone +33 5 61 93 36 96; fax +33 5 61 93 44 51; email
You may examine the AD docket on the internet at
Sanjay Ralhan, Aerospace Engineer, International Section, Transport Standards Branch, FAA, 2200 South 216th St., Des Moines, WA 98198; telephone and fax 206-231-3223.
We issued a notice of proposed rulemaking (NPRM) to amend 14 CFR part 39 by adding an AD that would apply to certain Airbus SAS Model A318 series airplanes; Model A319 series airplanes; Model A320 series airplanes; and Model A321-111, -112, -131, -211, -212, -213, -231, -232, -251N, -253N, and -271N airplanes. The NPRM published in the
We issued a supplemental NPRM (SNPRM) to amend 14 CFR part 39 by adding an AD that would apply to certain Airbus SAS Model A318 series airplanes; Model A319 series airplanes; Model A320 series airplanes; and Model A321 series airplanes. The SNPRM published in the
We are issuing this AD to address a safety-significant latent failure (that is not annunciated), which, in combination with one or more other specific failures or events, could result in a hazardous or catastrophic failure condition.
The European Aviation Safety Agency (EASA), which is the Technical Agent for the Member States of the European Union, has issued EASA AD 2018-0180, dated August 27, 2018 (referred to after this as the Mandatory Continuing Airworthiness Information, or “the MCAI”), to correct an unsafe condition for certain Airbus SAS Model A318 series airplanes; Model A319 series airplanes; Model A320 series airplanes; and Model A321 series airplanes. The MCAI states:
The airworthiness limitations for the Airbus A320 family aeroplanes, which are approved by EASA, are currently defined and published in the A318/A319/A320/A321 ALS [Airworthiness Limitations Section] document(s). The airworthiness limitations applicable to the Certification Maintenance Requirements (CMR), which are approved by EASA, are published in ALS Part 3.
Failure to accomplish these instructions could result in an unsafe condition.
Previously, EASA issued AD 2017-0168 to require accomplishment of all maintenance tasks as described in ALS Part 3 at Revision 05.
Since that [EASA] AD was issued, Airbus published the ALS, including new and/or more restrictive requirements, and new A321 models were certified and added to the Applicability of the ALS.
For the reason described above, this [EASA] AD retains the requirements of EASA AD 2017-0168, which is superseded, expands the Applicability and requires accomplishment of the actions specified in the ALS.
You may examine the MCAI in the AD docket on the internet at
We gave the public the opportunity to participate in developing this final rule. We have considered the comment received. United Airlines indicated its support for the SNPRM.
We reviewed the relevant data, considered the comment received, and determined that air safety and the public interest require adopting this final rule as proposed, except for minor editorial changes. We have determined that these minor changes:
• Are consistent with the intent that was proposed in the SNPRM for addressing the unsafe condition; and
• Do not add any additional burden upon the public than was already proposed in the SNPRM.
Airbus has issued Airbus A318/A319/A320/A321 Airworthiness Limitations Section (ALS) Part 3, Certification Maintenance Requirements (CMR), Revision 06, dated June 13, 2018. The service information describes maintenance instructions and airworthiness limitations, including updated inspections and intervals, to be incorporated into the operator's maintenance or inspection program. This service information is reasonably available because the interested parties have access to it through their normal course of business or by the means identified in the
We estimate that this AD affects 1,250 airplanes of U.S. registry. We estimate the following costs to comply with this AD:
We have determined that revising the operator's maintenance or inspection program takes an average of 90 work-hours per operator, although we recognize that this number may vary from operator to operator. In the past, we have estimated that this action takes 1 work-hour per airplane. Since operators incorporate maintenance or inspection program changes for their affected fleet(s), we have determined that a per-operator estimate is more accurate than a per-airplane estimate. Therefore, we estimate the total cost per operator to be $7,650 (90 work-hours × $85 per work-hour)
Title 49 of the United States Code specifies the FAA's authority to issue rules on aviation safety. Subtitle I, section 106, describes the authority of the FAA Administrator. Subtitle VII: Aviation Programs, describes in more detail the scope of the Agency's authority.
We are issuing this rulemaking under the authority described in Subtitle VII, Part A, Subpart III, Section 44701: “General requirements.” Under that section, Congress charges the FAA with promoting safe flight of civil aircraft in air commerce by prescribing regulations for practices, methods, and procedures the Administrator finds necessary for safety in air commerce. This regulation is within the scope of that authority because it addresses an unsafe condition that is likely to exist or develop on products identified in this rulemaking action.
This AD is issued in accordance with authority delegated by the Executive Director, Aircraft Certification Service, as authorized by FAA Order 8000.51C. In accordance with that order, issuance of ADs is normally a function of the Compliance and Airworthiness Division, but during this transition period, the Executive Director has delegated the authority to issue ADs applicable to transport category airplanes and associated appliances to the Director of the System Oversight Division.
This AD will not have federalism implications under Executive Order 13132. This AD will not have a substantial direct effect on the States, on the relationship between the national government and the States, or on the distribution of power and responsibilities among the various levels of government.
For the reasons discussed above, I certify that this AD:
(1) Is not a “significant regulatory action” under Executive Order 12866,
(2) Is not a “significant rule” under the DOT Regulatory Policies and Procedures (44 FR 11034, February 26, 1979),
(3) Will not affect intrastate aviation in Alaska, and
(4) Will not have a significant economic impact, positive or negative, on a substantial number of small entities under the criteria of the Regulatory Flexibility Act.
Air transportation, Aircraft, Aviation safety, Incorporation by reference, Safety.
Accordingly, under the authority delegated to me by the Administrator, the FAA amends 14 CFR part 39 as follows:
49 U.S.C. 106(g), 40113, 44701.
This AD is effective April 3, 2019.
This AD affects AD 2017-25-04, Amendment 39-19118 (82 FR 58098, December 11, 2017) (“AD 2017-25-04”).
This AD applies to the Airbus SAS airplanes identified in paragraphs (c)(1), (c)(2), (c)(3), and (c)(4) of this AD, certificated in any category, with an original certificate of airworthiness or original export certificate of airworthiness issued on or before June 13, 2018.
(1) Model A318-111, -112, -121, and -122 airplanes.
(2) Model A319-111, -112, -113, -114, -115, -131, -132, and -133 airplanes.
(3) Model A320-211, -212, -214, -216, -231, -232, -233, -251N, and -271N airplanes.
(4) Model A321-111, -112, -131, -211, -212, -213, -231, -232, -251N, -251NX, -252N, -252NX, -253N, -253NX, -271N, -271NX, -272N, and -272NX airplanes.
Air Transport Association (ATA) of America Code 05, Time Limits/Maintenance Checks.
This AD was prompted by a revision of an airworthiness limitation item (ALI) document, which requires more restrictive maintenance requirements and airworthiness limitations. We are issuing this AD to address a safety-significant latent failure (that is not annunciated), which, in combination with one or more other specific failures or events,
Comply with this AD within the compliance times specified, unless already done.
Within 90 days after the effective date of this AD, revise the operator's maintenance or inspection program, as applicable, to incorporate the information specified in Airbus A318/A319/A320/A321 Airworthiness Limitations Section (ALS) Part 3, Certification Maintenance Requirements (CMR), Revision 06, dated June 13, 2018 (“ALS Part 3, CMR, R6”). The initial compliance time for accomplishing the tasks specified in ALS Part 3, CMR, R6, is at the applicable time specified in ALS Part 3, CMR, R6, or within 90 days after the effective date of this AD, whichever occurs later.
Accomplishing the actions required by paragraph (g) of this AD terminates all of the requirements of AD 2017-25-04.
After the operator's maintenance or inspection program, as applicable, has been revised as required by paragraph (g) of this AD, no alternative actions (
The following provisions also apply to this AD:
(1)
(i) Before using any approved AMOC, notify your appropriate principal inspector, or lacking a principal inspector, the manager of the local flight standards district office/certificate holding district office.
(ii) AMOCs approved previously for AD 2017-25-04, or AD 2014-22-08, Amendment 39-18013 (79 FR 67042, November 12, 2014), that allow incorporation of ALS Part 3, CMR, R6, are considered approved as AMOCs for the corresponding provisions of this AD.
(2)
(3)
(1) Refer to Mandatory Continuing Airworthiness Information (MCAI) EASA AD 2018-0180, dated August 27, 2018, for related information. This MCAI may be found in the AD docket on the internet at
(2) For more information about this AD, contact Sanjay Ralhan, Aerospace Engineer, International Section, Transport Standards Branch, FAA, 2200 South 216th St., Des Moines, WA 98198; telephone and fax 206-231-3223.
(1) The Director of the Federal Register approved the incorporation by reference (IBR) of the service information listed in this paragraph under 5 U.S.C. 552(a) and 1 CFR part 51.
(2) You must use this service information as applicable to do the actions required by this AD, unless this AD specifies otherwise.
(i) Airbus A318/A319/A320/A321 Airworthiness Limitations Section (ALS) Part 3, Certification Maintenance Requirements (CMR), Revision 06, dated June 13, 2018.
(ii) [Reserved]
(3) For service information identified in this AD, contact Airbus SAS, Airworthiness Office—EIAS, Rond-Point Emile Dewoitine No: 2, 31700 Blagnac Cedex, France; telephone +33 5 61 93 36 96; fax +33 5 61 93 44 51; email
(4) You may view this service information at the FAA, Transport Standards Branch, 2200 South 216th St., Des Moines, WA. For information on the availability of this material at the FAA, call 206-231-3195.
(5) You may view this service information that is incorporated by reference at the National Archives and Records Administration (NARA). For information on the availability of this material at NARA, call 202-741-6030, or go to:
Federal Aviation Administration (FAA), Department of Transportation (DOT).
Final rule.
We are adopting a new airworthiness directive (AD) for all Airbus SAS Model A330-200, -200 Freighter, and -300 series airplanes, and Model A340-200, -300, -500, and -600 series airplanes. This AD was prompted by a report that certain sensor struts, in the case of down drive element disconnection, would be unable to provide failure detection information for flap movements. This AD requires repetitive inspections of certain drive station elements and sensor struts; an inspection of certain other drive station elements if necessary; and corrective actions if necessary. We are issuing this AD to address the unsafe condition on these products.
This AD is effective April 3, 2019.
The Director of the Federal Register approved the incorporation by reference of certain publications listed in this AD as of April 3, 2019.
For service information identified in this final rule, contact Airbus SAS, Airworthiness Office—EAL, Rond-Point Emile Dewoitine No: 2, 31700 Blagnac Cedex, France; phone: +33 5 61 93 36 96; fax: +33 5 61 93 45 80; email:
You may examine the AD docket on the internet at
Vladimir Ulyanov, Aerospace Engineer, International Section, Transport Standards Branch, FAA, 2200 South 216th St., Des Moines, WA 98198; phone and fax: 206-231-3229.
We issued a notice of proposed rulemaking (NPRM) to amend 14 CFR part 39 by adding an AD that would apply to all Airbus SAS Model A330-200, -200 Freighter, and -300 series airplanes, and Model A340-200, -300, -500, and -600 series airplanes. The NPRM published in the
We are issuing this AD to address abnormal flap movement due to mechanical drive station element disconnection at flap track station 4 or station 5 which could lead to undetected down drive shaft disconnection. Such a condition could result in complete flap disconnection in the case of additional failure on the remaining flap drive station, and could ultimately result in loss of control of the airplane.
The European Aviation Safety Agency (EASA), which is the Technical Agent for the Member States of the European Union, has issued EASA AD 2018-0151, dated July 16, 2018 (referred to after this as the Mandatory Continuing Airworthiness Information, or “the MCAI”), to correct an unsafe condition for all Airbus SAS Model A330-200 Freighter series, Model A330-200 series, Model A330-300 series, Model A340-200 series, Model A340-300 series, Model A340-500 series, and Model A340-600 series airplanes. The MCAI states:
Design features of the track station 4 sensor struts, respectively installed on the right hand (RH) and left hand (LH) wings of an aeroplane, ensure detection of any abnormal flap movement in case of a mechanical DSE [drive station element] disconnection at the level of the flap track station 4 or flap track station 5. Evidence was collected revealing that the track station 4 sensor strut, in case of a down drive element disconnection, would be unable to provide failure detection information.
This condition, if not detected and corrected, in the case of an additional failure on the remaining flap drive station, could lead to a complete flap disconnection, possibly resulting in loss of control of the aeroplane.
To address this potential unsafe condition, Airbus published the applicable SB [Airbus Service Bulletin A330-27-3226, dated April 5, 2018; Airbus Service Bulletin A340-27-4206, dated April 3, 2018; or Airbus Service Bulletin A340-27-5071, dated April 3, 2018; as applicable] to provide inspection instructions of the track station 4 and track station 5 DSE and sensor struts of the LH and RH wings.
For the reasons described above, this [EASA] AD requires repetitive [detailed] inspections of the LH and RH track station 4 [DSE, repetitive general visual inspections of the LH and RH track station 4 sensor struts,] and [for certain airplanes, a one-time detailed inspection of the LH or RH, as applicable] track station 5 DSE * * * and, depending on findings, accomplishment of applicable corrective action(s).
You may examine the MCAI in the AD docket on the internet at
We gave the public the opportunity to participate in developing this final rule. We received no comments on the NPRM or on the determination of the cost to the public.
We reviewed the relevant data and determined that air safety and the public interest require adopting this final rule as proposed, except for minor editorial changes. We have determined that these minor changes:
• Are consistent with the intent that was proposed in the NPRM for addressing the unsafe condition; and
• Do not add any additional burden upon the public than was already proposed in the NPRM.
Airbus has issued the following service information.
• Airbus Service Bulletin A330-27-3226, dated April 5, 2018.
• Airbus Service Bulletin A340-27-4206, dated April 3, 2018.
• Airbus Service Bulletin A340-27-5071, dated April 3, 2018.
This service information describes procedures for repetitive detailed inspections of the LH and RH track station 4 drive station elements; repetitive general visual inspections of the LH and RH track station 4 sensor struts; a detailed inspection of the track station 5 drive station elements if any discrepancy is found during a general visual inspection; and corrective actions (
We estimate that this AD affects 105 airplanes of U.S. registry. We estimate the following costs to comply with this AD:
We estimate that it would take about 1 work-hour per product to comply with the reporting requirement in this AD. The average labor rate is $85 per hour. Based on these figures, we estimate the cost of reporting the inspection results on U.S. operators to be $8,925, or $85 per product.
We have received no definitive data that would enable us to provide cost
According to the manufacturer, some or all of the costs of this AD may be covered under warranty, thereby reducing the cost impact on affected individuals. We do not control warranty coverage for affected individuals. As a result, we have included all known costs in our cost estimate.
A federal agency may not conduct or sponsor, and a person is not required to respond to, nor shall a person be subject to penalty for failure to comply with a collection of information subject to the requirements of the Paperwork Reduction Act unless that collection of information displays a current valid OMB control number. The control number for the collection of information required by this AD is 2120-0056. The paperwork cost associated with this AD has been detailed in the Costs of Compliance section of this document and includes time for reviewing instructions, as well as completing and reviewing the collection of information. Therefore, all reporting associated with this AD is mandatory. Comments concerning the accuracy of this burden and suggestions for reducing the burden should be directed to the FAA at 800 Independence Ave. SW, Washington, DC 20591, ATTN: Information Collection Clearance Officer, AES-200.
Title 49 of the United States Code specifies the FAA's authority to issue rules on aviation safety. Subtitle I, section 106, describes the authority of the FAA Administrator. Subtitle VII: Aviation Programs, describes in more detail the scope of the Agency's authority.
We are issuing this rulemaking under the authority described in Subtitle VII, Part A, Subpart III, Section 44701: “General requirements.” Under that section, Congress charges the FAA with promoting safe flight of civil aircraft in air commerce by prescribing regulations for practices, methods, and procedures the Administrator finds necessary for safety in air commerce. This regulation is within the scope of that authority because it addresses an unsafe condition that is likely to exist or develop on products identified in this rulemaking action.
This AD is issued in accordance with authority delegated by the Executive Director, Aircraft Certification Service, as authorized by FAA Order 8000.51C. In accordance with that order, issuance of ADs is normally a function of the Compliance and Airworthiness Division, but during this transition period, the Executive Director has delegated the authority to issue ADs applicable to transport category airplanes and associated appliances to the Director of the System Oversight Division.
This AD will not have federalism implications under Executive Order 13132. This AD will not have a substantial direct effect on the States, on the relationship between the national government and the States, or on the distribution of power and responsibilities among the various levels of government.
For the reasons discussed above, I certify that this AD:
(1) Is not a “significant regulatory action” under Executive Order 12866,
(2) Is not a “significant rule” under the DOT Regulatory Policies and Procedures (44 FR 11034, February 26, 1979),
(3) Will not affect intrastate aviation in Alaska, and
(4) Will not have a significant economic impact, positive or negative, on a substantial number of small entities under the criteria of the Regulatory Flexibility Act.
Air transportation, Aircraft, Aviation safety, Incorporation by reference, Safety.
Accordingly, under the authority delegated to me by the Administrator, the FAA amends 14 CFR part 39 as follows:
49 U.S.C. 106(g), 40113, 44701.
This AD is effective April 3, 2019.
None.
This AD applies to the Airbus SAS airplanes identified in paragraphs (c)(1) through (c)(7) of this AD, certificated in any category, all manufacturer serial numbers.
(1) Model A330-223F and -243F airplanes.
(2) Model A330-201, -202, -203, -223, and -243 airplanes.
(3) Model A330-301, -302, -303, -321, -322, -323, -341, -342, and -343 airplanes.
(4) Model A340-211, -212, and -213 airplanes.
(5) Model A340-311, -312, and -313 airplanes.
(6) Model A340-541 airplanes.
(7) Model A340-642 airplanes.
Air Transport Association (ATA) of America Code 27, Flight controls.
This AD was prompted by a report that the right-hand (RH) and left-hand (LH) track station 4 sensor struts, in the case of down drive element disconnection, would be unable to provide failure detection information for flap movements. We are issuing this AD to address abnormal flap movement due to mechanical drive station element disconnection at flap track station 4 or station 5 which could lead to undetected down drive shaft disconnection. Such a condition could result in complete flap disconnection in the case of additional failure on the remaining flap drive station, and could ultimately result in loss of control of the airplane.
Comply with this AD within the compliance times specified, unless already done.
For the purpose of this AD, the drive station elements are defined as the down drive, down drive shaft, geared rotary actuator (gearbox), geared rotary actuator (output lever and fork end), and drive strut.
(1) At the applicable times specified in paragraphs (h)(1)(i) and (h)(1)(ii) of this AD, and thereafter not to exceed the applicable intervals specified in table 1 to paragraph (h)(1) of this AD, do a detailed inspection of the LH and RH track station 4 drive station elements for corrosion or ruptured, loose, or missing components (including any attached bolts and nuts that are loose, broken, or missing) and a general visual inspection of the LH and RH track station 4 sensor struts for corrosion or ruptured, loose, or missing components (including any attached bolts that are loose, broken, or missing), in accordance with the Accomplishment Instructions of Airbus Service Bulletin A330-27-3226, dated April 5, 2018; Airbus Service Bulletin A340-27-4206, dated April 3, 2018; or Airbus Service Bulletin A340-27-5071, dated April 3, 2018; as applicable.
(i) For airplanes that, as of the effective date of this AD, have accumulated less than 1,000 flight cycles since first flight: Before exceeding 24 months since first flight or within 18 months after the effective date of this AD, whichever occurs later, but without exceeding 2,300 flight cycles since first flight.
(ii) For airplanes that, as of the effective date of this AD, have accumulated 1,000 or more flight cycles since first flight: Within 1,000 flight cycles or 12 months, whichever occurs first after the effective date of this AD.
(2) If, during any general visual inspection required by paragraph (h)(1) of this AD, any corrosion is detected or any ruptured, loose, or missing components (including any attached bolts that are loose, broken, or missing) are detected, before further flight, accomplish a detailed inspection of the applicable LH or RH track station 5 drive station elements for corrosion or ruptured, loose, or missing components (including any attached bolts and nuts that are loose, broken, or missing) in accordance with the Accomplishment Instructions of Airbus Service Bulletin A330-27-3226, dated April 5, 2018; Airbus Service Bulletin A340-27-4206, dated April 3, 2018; or Airbus Service Bulletin A340-27-5071, dated April 3, 2018; as applicable.
(1) If, during any detailed inspection required by paragraph (h)(1) of this AD, any corrosion is detected or any ruptured, loose, or missing components (including any attached bolts and nuts that are loose, broken, or missing) are detected, before further flight, replace each affected part with a serviceable part in accordance with the Accomplishment Instructions of Airbus Service Bulletin A330-27-3226, dated April 5, 2018; Airbus Service Bulletin A340-27-4206, dated April 3, 2018; or Airbus Service Bulletin A340-27-5071, dated April 3, 2018; as applicable, or using a method approved by the Manager, International Section, Transport Standards Branch, FAA; or the European Aviation Safety Agency (EASA); or Airbus SAS's EASA Design Organization Approval (DOA). If approved by the DOA, the approval must include the DOA-authorized signature.
(2) If, during any general visual inspection required by paragraph (h)(1) of this AD, any corrosion is detected or any ruptured, loose, or missing components (including any attached bolts that are loose, broken, or missing) are detected, before further flight, replace each affected part with a serviceable part in accordance with the Accomplishment Instructions of Airbus Service Bulletin A330-27-3226, dated April 5, 2018; Airbus Service Bulletin A340-27-4206, dated April 3, 2018; or Airbus Service Bulletin A340-27-5071, dated April 3, 2018; as applicable, or using a method approved by the Manager, International Section, Transport Standards Branch, FAA; or EASA; or Airbus SAS's EASA DOA. If approved by the DOA, the approval must include the DOA-authorized signature.
(3) If, during any detailed inspection required by paragraph (h)(2) of this AD, any corrosion is detected or any ruptured, loose, or missing components (including any attached bolts and nuts that are loose, broken, or missing) are detected, before further flight, replace each affected part with a serviceable part in accordance with the Accomplishment Instructions of Airbus Service Bulletin A330-27-3226, dated April 5, 2018; Airbus Service Bulletin A340-27-4206, dated April 3, 2018; or Airbus Service Bulletin A340-27-5071, dated April 3, 2018; as applicable, or using a method approved by the Manager, International Section, Transport Standards Branch, FAA; or EASA; or Airbus SAS's EASA DOA. If approved by the DOA, the approval must include the DOA-authorized signature.
At the applicable time specified in paragraph (j)(1) or (j)(2) of this AD: Report the results (positive or negative) of each inspection required by paragraphs (h)(1) and (h)(2) of this AD to Airbus Service Bulletin Reporting Online Application on Airbus World (
(1) If the inspection was done on or after the effective date of this AD: Submit the report within 90 days after the inspection.
(2) If the inspection was done before the effective date of this AD: Submit the report within 90 days after the effective date of this AD.
The following provisions also apply to this AD:
(1)
(2)
(3)
(4)
(1) Refer to Mandatory Continuing Airworthiness Information (MCAI) EASA AD 2018-0151, dated July 16, 2018, for related information. This MCAI may be found in the AD docket on the internet at
(2) For more information about this AD, contact Vladimir Ulyanov, Aerospace Engineer, International Section, Transport Standards Branch, FAA, 2200 South 216th St., Des Moines, WA 98198; phone and fax: 206-231-3229.
(1) The Director of the Federal Register approved the incorporation by reference (IBR) of the service information listed in this paragraph under 5 U.S.C. 552(a) and 1 CFR part 51.
(2) You must use this service information as applicable to do the actions required by this AD, unless this AD specifies otherwise.
(i) Airbus Service Bulletin A330-27-3226, dated April 5, 2018.
(ii) Airbus Service Bulletin A340-27-4206, dated April 3, 2018.
(iii) Airbus Service Bulletin A340-27-5071, dated April 3, 2018.
(3) For service information identified in this AD, contact Airbus SAS, Airworthiness Office—EAL, Rond-Point Emile Dewoitine No: 2, 31700 Blagnac Cedex, France; phone: +33 5 61 93 36 96; fax: +33 5 61 93 45 80; email:
(4) You may view this service information at the FAA, Transport Standards Branch, 2200 South 216th St., Des Moines, WA. For information on the availability of this material at the FAA, call 206-231-3195.
(5) You may view this service information that is incorporated by reference at the National Archives and Records Administration (NARA). For information on the availability of this material at NARA, call 202-741-6030, or go to:
Federal Aviation Administration (FAA), Department of Transportation (DOT).
Final rule.
We are adopting a new airworthiness directive (AD) for certain Airbus SAS Model A330-201, -202, and -203 airplanes, and Model A330-301, -302, and -303 airplanes. This AD was prompted by reports of damaged drain pipes located above the lower aft pylon fairing (LAPF), caused by a contact between the drain pipe and the two u-shape ribs of the LAPF. This AD requires a special detailed inspection for damage, and corrective actions if necessary. We are issuing this AD to address the unsafe condition on these products.
This AD is effective April 3, 2019.
The Director of the Federal Register approved the incorporation by reference of certain publications listed in this AD as of April 3, 2019.
For service information identified in this final rule, contact Airbus SAS, Airworthiness Office—EAL, Rond-Point Emile Dewoitine No: 2, 31700 Blagnac Cedex, France; phone: +33 5 61 93 36 96; fax: +33 5 61 93 45 80; email:
You may examine the AD docket on the internet at
Vladimir Ulyanov, Aerospace Engineer, International Section, Transport Standards Branch, FAA, 2200 South 216th St., Des Moines, WA 98198; phone and fax: 206-231-3229.
We issued a notice of proposed rulemaking (NPRM) to amend 14 CFR part 39 by adding an AD that would apply to certain Airbus SAS Model A330-201, -202, and -203 airplanes, and Model A330-301, -302, and -303 airplanes. The NPRM published in the
We are issuing this AD to address damaged drain pipes located above the LAPF, which, combined with an additional independent failure, could lead to hydraulic leakage in the LAPF box, possibly resulting in a temporary uncontrolled fire and consequent reduced control of the airplane.
The European Aviation Safety Agency (EASA), which is the Technical Agent for the Member States of the European Union, has issued EASA AD 2018-0198, dated September 6, 2018 (referred to after this as the Mandatory Continuing Airworthiness Information, or “the MCAI”), to correct an unsafe condition for certain Airbus SAS Model A330-201, -202, and -203 airplanes, and Model A330-301, -302, and -303 airplanes. The MCAI states:
Some cases of damaged drain pipes, Part Number F7173000700000, located above the Lower Aft Pylon Fairing (LAPF) and dedicated to drain pylon compartment A in case of hydraulic fluid leakage, were reported. Subsequent examination identified that the cracks were caused by a contact between the drain pipe and the two U-Shape Ribs of the LAPF. This interference condition can be present during the installation of the LAPF assembly to the pylon. The trailing edge assembly of the fairing has an internal frame bracket and shear clip which can cause chafing with the hydraulic drain pipes.
This condition, if not detected and corrected, combined with an additional independent failure as hydraulic leakage in
To address this unsafe condition, Airbus issued the inspection SB [Airbus Service Bulletin A330-54-3042, dated May 17, 2018] to provide instructions for a special detailed inspection (SDI) of the LAPF drain pipes.
For the reasons described above, this [EASA] AD requires a one-time SDI (borescope inspection method) of the LAPF of each pylon [for damage (including but not limited to cracks and leaks of the hydraulic drain pipe, and contact, interference, and chafing of the internal frame bracket and the shear clip of the trailing edge assembly of the LAPF with the aircraft hydraulic drain pipe)] and, depending on findings, replacement of the LAPF drain pipes and clamp block, and rework of the U-shape ribs.
You may examine the MCAI in the AD docket on the internet at
We gave the public the opportunity to participate in developing this final rule. We have considered the comment received. Air Line Pilots Association, International (ALPA) indicated its support for the NPRM.
We reviewed the relevant data, considered the comment received, and determined that air safety and the public interest require adopting this final rule as proposed, except for minor editorial changes. We have determined that these minor changes:
• Are consistent with the intent that was proposed in the NPRM for addressing the unsafe condition; and
• Do not add any additional burden upon the public than was already proposed in the NPRM.
Airbus has issued the following service information.
• Airbus Service Bulletin A330-54-3041, dated May 17, 2018. This service information describes procedures for replacement of the pylon drain pipe clamp blocks of the LAPFs of the left-hand (LH) and right-hand (RH) pylons and modification of the LAPFs.
• Airbus Service Bulletin A330-54-3042, dated May 17, 2018. This service information describes procedures for a special detailed inspection for damage (including but not limited to cracks and leaks of the pylon drain pipe, and contact, interference, and chafing of the internal frame bracket and the shear clip of the trailing edge assembly of the LAPF with the aircraft pylon drain pipe), and corrective actions. Corrective actions include replacement of the pylon drain pipe at the LH or RH pylon.
This service information is reasonably available because the interested parties have access to it through their normal course of business or by the means identified in the
We estimate that this AD affects 10 airplanes of U.S. registry. We estimate the following costs to comply with this AD:
We estimate the following costs to do any necessary on-condition actions that would be required based on the results of any required actions. We have no way of determining the number of aircraft that might need these on-condition actions:
According to the manufacturer, some or all of the costs of this AD may be covered under warranty, thereby reducing the cost impact on affected individuals. We do not control warranty coverage for affected individuals. As a result, we have included all known costs in our cost estimate.
Title 49 of the United States Code specifies the FAA's authority to issue rules on aviation safety. Subtitle I, section 106, describes the authority of the FAA Administrator. Subtitle VII: Aviation Programs, describes in more detail the scope of the Agency's authority.
We are issuing this rulemaking under the authority described in Subtitle VII, Part A, Subpart III, Section 44701: “General requirements.” Under that section, Congress charges the FAA with promoting safe flight of civil aircraft in air commerce by prescribing regulations for practices, methods, and procedures the Administrator finds necessary for safety in air commerce. This regulation is within the scope of that authority because it addresses an unsafe condition that is likely to exist or develop on products identified in this rulemaking action.
This AD is issued in accordance with authority delegated by the Executive Director, Aircraft Certification Service, as authorized by FAA Order 8000.51C. In accordance with that order, issuance of ADs is normally a function of the Compliance and Airworthiness Division, but during this transition period, the Executive Director has delegated the authority to issue ADs applicable to transport category airplanes and associated appliances to the Director of the System Oversight Division.
This AD will not have federalism implications under Executive Order 13132. This AD will not have a substantial direct effect on the States, on the relationship between the national government and the States, or on the distribution of power and
For the reasons discussed above, I certify that this AD:
(1) Is not a “significant regulatory action” under Executive Order 12866,
(2) Is not a “significant rule” under the DOT Regulatory Policies and Procedures (44 FR 11034, February 26, 1979),
(3) Will not affect intrastate aviation in Alaska, and
(4) Will not have a significant economic impact, positive or negative, on a substantial number of small entities under the criteria of the Regulatory Flexibility Act.
Air transportation, Aircraft, Aviation safety, Incorporation by reference, Safety.
Accordingly, under the authority delegated to me by the Administrator, the FAA amends 14 CFR part 39 as follows:
49 U.S.C. 106(g), 40113, 44701.
This AD is effective April 3, 2019.
None.
This AD applies to the Airbus SAS airplanes identified in paragraphs (c)(1) and (c)(2) of this AD, certificated in any category, all manufacturer serial numbers, except those on which Airbus modification 207430 has been embodied in production, or Airbus Service Bulletin A330-54-3041 has been embodied in service.
(1) Model A330-201, -202, and -203 airplanes.
(2) Model A330-301, -302, and -303 airplanes.
Air Transport Association (ATA) of America Code 54, Nacelles/pylons.
This AD was prompted by reports of damaged drain pipes located above the lower aft pylon fairing (LAPF), caused by a contact between the drain pipe and the two u-shape ribs of the LAPF. We are issuing this AD to address damaged drain pipes located above the LAPF, which, combined with an additional independent failure, could lead to hydraulic leakage in the LAPF box, possibly resulting in a temporary uncontrolled fire and consequent reduced control of the airplane.
Comply with this AD within the compliance times specified, unless already done.
Within 26 months after the effective date of this AD, accomplish a one-time special detailed inspection of the pylon drain pipes (inside and outside) on the left-hand and right-hand pylons, located above both LAPFs, for contact with the U-shaped ribs of the LAPF and damage (including but not limited to cracks and leaks of the pylon drain pipe, and contact, interference, and chafing of the internal frame bracket and the shear clip of the trailing edge assembly of the LAPF with the pylon drain pipe) in accordance with the Accomplishment Instructions of Airbus Service Bulletin A330-54-3042, dated May 17, 2018.
If, during any inspection required by paragraph (g) of this AD, any damage is found, at the applicable time specified in Airbus Service Bulletin A330-54-3042, dated May 17, 2018, accomplish the applicable corrective actions on the affected pylon in accordance with the Accomplishment Instructions of Airbus Service Bulletin A330-54-3042, dated May 17, 2018; and Airbus Service Bulletin A330-54-3041, dated May 17, 2018.
The following provisions also apply to this AD:
(1)
(2)
(3)
(1) Refer to Mandatory Continuing Airworthiness Information (MCAI) EASA AD 2018-0198, dated September 6, 2018, for related information. This MCAI may be found in the AD docket on the internet at
(2) For more information about this AD, contact Vladimir Ulyanov, Aerospace Engineer, International Section, Transport Standards Branch, FAA, 2200 South 216th St., Des Moines, WA 98198; phone and fax: 206-231-3229.
(1) The Director of the Federal Register approved the incorporation by reference (IBR) of the service information listed in this paragraph under 5 U.S.C. 552(a) and 1 CFR part 51.
(2) You must use this service information as applicable to do the actions required by this AD, unless this AD specifies otherwise.
(i) Airbus Service Bulletin A330-54-3041, dated May 17, 2018.
(ii) Airbus Service Bulletin A330-54-3042, dated May 17, 2018.
(3) For service information identified in this AD, contact Airbus SAS, Airworthiness Office—EAL, Rond-Point Emile Dewoitine No: 2, 31700 Blagnac Cedex, France; phone: +33 5 61 93 36 96; fax: +33 5 61 93 45 80; email:
(4) You may view this service information at the FAA, Transport Standards Branch, 2200 South 216th St., Des Moines, WA. For information on the availability of this material at the FAA, call 206-231-3195.
(5) You may view this service information that is incorporated by reference at the National Archives and Records Administration (NARA). For information on the availability of this material at NARA, call 202-741-6030, or go to:
Department of the Treasury.
Final rule.
This rule adopts revisions to the Department's regulations under the Freedom of Information Act (FOIA). The regulations are being revised to update and streamline procedures and incorporate certain changes brought about by the amendments to the FOIA under the OPEN Government Act of 2007 and the FOIA Improvement Act of 2016. Additionally, the regulations are being updated to reflect developments in the case law and to include current cost figures to be used in calculating and charging fees. This final rule follows publication of a proposed rule on October 26, 2018; it adopts the proposal without substantive change, although certain sections have been renumbered and reorganized.
The final rule is effective March 29, 2019.
Ryan Law, Deputy Assistant Secretary for Privacy, Transparency and Records, 202-622-0930, extension 2 (this is not a toll-free number).
This rule adopts revisions to the Department's regulations under the FOIA to update and streamline the language of several procedural provisions and to incorporate certain of the changes brought about by the amendments to the FOIA under the OPEN Government Act of 2007, Public Law 110-175, 121 Stat. 2524 and the FOIA Improvement Act of 2016, Public Law 114-185, 130 Stat. 538. Additionally, the regulations are being updated to reflect developments in case law and to include current cost figures to be used in calculating and charging fees.
The revisions of the FOIA regulations in 31 CFR subpart A of part 1 incorporate changes to the language and structure of the regulations. Revised provisions include § 1.0 (General Provisions), § 1.1 (Proactive disclosure of Department records), § 1.2 (Requirements for making requests), § 1.3 (Responsibility for responding to requests), § 1.45 (Responses to requests), § 1.5 (Confidential commercial information), § 1.6 (Administrative appeals), and § 1.7 (Fees).
Sections 1.1, 1.2, 1.4, and 1.7 all address the role of the FOIA Public Liaison in assisting requesters with resolving disputes related to their FOIA requests, as required by the OPEN Government Act of 2007.
The 2007 Act also required agencies to assign tracking numbers to requests that will take longer than 10 days to process. This requirement is implemented through § 1.4.
The FOIA Improvement Act of 2016 provides that agencies must allow a minimum of 90 days for requesters to file an administrative appeal. The Act also requires that agencies notify requesters of the availability of dispute resolution services at various times throughout the FOIA process. This final rule updates the Department's regulations to reflect those statutory changes (§§ 1.4 and 1.6).
A number of changes have been made to the section on fees (§ 1.7). The definition of representative of the news media has been updated to reflect amendments to the FOIA under the OPEN Government Act of 2007. Further, § 1.7 has been updated to reflect amendments to the FOIA in 2007 and 2016 that limit the agency's ability to assess fees when certain timelines or conditions are not met. The current regulation also revises § 1.7 to conform to a recent decision of the U.S. Court of Appeals for the District of Columbia Circuit addressing the “educational institution” fee category.
Further, the Appendices to the current regulation have been revised to reflect changes in organizational structure. Appendices pertaining to the United States Customs Service, United States Secret Service, Bureau of Alcohol, Tobacco and Firearms, Federal Law Enforcement Training Center, and the Office of Thrift Supervision have been deleted as these components are no longer part of the Department of the Treasury. The Bureau of the Public Debt and the Financial Management Service were merged in 2012 to form the Bureau of the Fiscal Service (Appendix D in these revised regulations). Appendices for two new components have been added: the Alcohol and Tobacco Tax and Trade Bureau (Appendix H) and the Treasury Inspector General for Tax Administration (Appendix I).
This final rule contains no substantive changes to the proposed rule that Treasury published for comments on October 26, 2018. However, the rule was renumbered and slightly reorganized so that the section numbers would not conflict with provisions in Subpart B of Part 1. Specifically, the rule was renumbered to begin with § 1.0, § 1.6 was redesignated as subsections (f) through (k) of § 1.4, and §§ 1.9 and 1.11 were redesignated as subsections (e) and (f) of § 1.0.
The Regulatory Flexibility Act (RFA), 5 U.S.C. 601
Executive Orders 13563 and 12866 direct agencies to assess costs and benefits of available regulatory alternatives and, if regulation is necessary, to select regulatory approaches that maximize net benefits (including potential economic, environmental, public health and safety effects, distributive impacts, and equity). Executive Order 13563 emphasizes the importance of quantifying both costs and benefits, of reducing costs, of harmonizing rules, and of promoting flexibility. This rule is not a “significant regulatory action” under Executive Order 12866.
Disclosure of records, Freedom of Information Act, Other disclosure provisions, Privacy Act.
For the reasons stated in the preamble, the Department of the Treasury amends 31 CFR part 1 as follows:
5 U.S.C. 301, 552, 552a, 553; 31 U.S.C. 301, 321; 31 U.S.C. 3717.
(a) This subpart contains the rules that the Department of the Treasury follows in processing requests for records under the Freedom of Information Act (FOIA), 5 U.S.C. 552 as amended. These regulations apply to all components of the Department of the Treasury. Requests made by individuals for records about themselves under the Privacy Act of 1974, 5 U.S.C. 552a, are processed under subpart C of part 1 as well as under this subpart.
(b) The components of the Department of the Treasury for the purposes of this subpart are the following offices and bureaus:
(1) The Departmental Offices, which include the offices of:
(i) The Secretary of the Treasury, including immediate staff;
(ii) The Deputy Secretary of the Treasury, including immediate staff;
(iii) The Chief of Staff, including immediate staff;
(iv) The Executive Secretary of the Treasury and all offices reporting to such official, including immediate staff;
(v) The Under Secretary (International Affairs) and all offices reporting to such official, including immediate staff;
(vi) The Under Secretary (Domestic Finance) and all offices reporting to such official, including immediate staff;
(vii) The Director of the Community Development Financial Institution Fund and all offices reporting to such official, including immediate staff;
(viii) The Director of the Office of Financial Research and all offices reporting to such official, including immediate staff;
(ix) The Under Secretary (Terrorism and Financial Intelligence) and all offices reporting to such official, including immediate staff;
(x) The Director of the Office of Foreign Assets Control and all offices reporting to such official, including immediate staff;
(xi) The General Counsel and all offices reporting to such official, including immediate staff, but not including legal counsel to the components listed in paragraphs (b)(2) through (10) of this section;
(xii) The Treasurer of the United States, including immediate staff;
(xiii) The Assistant Secretary (Legislative Affairs) and all offices reporting to such official, including immediate staff;
(xiv) The Assistant Secretary (Public Affairs) and all offices reporting to such official, including immediate staff;
(xv) The Assistant Secretary (Economic Policy) and all offices reporting to such official, including immediate staff;
(xvi) The Assistant Secretary (Tax Policy) and all offices reporting to such official, including immediate staff;
(xvii) The Assistant Secretary (Management) and all offices reporting to such official, including immediate staff; and
(xix) The Inspector General and all offices reporting to such official, including immediate staff;
(2) The Alcohol and Tobacco Tax and Trade Bureau;
(3) The Bureau of Engraving and Printing;
(4) The Bureau of the Fiscal Service;
(5) The Financial Crimes Enforcement Network;
(6) The Internal Revenue Service;
(7) The Office of the Comptroller of the Currency;
(8) The United States Mint;
(9) The Treasury Inspector General for Tax Administration;
(10) The Special Inspector General for the Troubled Asset Relief Program.
(c) Any Treasury office which is now in existence or may hereafter be established, which is not specifically listed above and is not a subsidiary unit of a component of those listed above, shall be deemed a part of the Departmental Offices for the purpose of these regulations.
(d) The head of each component is hereby authorized to substitute the official designated and change the address specified in the appendix to this subpart applicable to that component. Components may issue supplementary regulations applicable only to the component in question, which (except with respect to fee schedules) shall be consistent with these regulations. Persons interested in the records of a particular component should, therefore, also consult the Code of Federal Regulations for any rules or regulations promulgated specifically with respect to that component (see Appendices to this subpart for cross references). In the event of any actual or apparent inconsistency, these Departmental regulations shall govern.
(e) Each component shall preserve all correspondence pertaining to the requests that it receives under this subpart, as well as copies of all requested records, until disposition or destruction is authorized pursuant to title 44 of the United States Code or the General Records Schedule 4.2 of the National Archives and Records Administration. Records that are identified as responsive to a request will not be disposed of or destroyed while they are the subject of a pending
(f) Nothing in this subpart shall be construed to entitle any person, as of right, to any service or to the disclosure of any record to which such person is not entitled under the FOIA.
(a) Records that are required by the FOIA to be made available for public inspection in an electronic format may be accessed through the Department's website,
(b) When a component receives three or more requests for the same records, it shall make available for public inspection in an electronic format, any records released in response to those requests.
(a)
(2) When a requester is unable to determine the appropriate Departmental component to which to direct a request, the requester may send the request to Freedom of Information Act Request, Department of the Treasury, Departmental Offices (DO), Director, FOIA and Transparency, 1500 Pennsylvania Avenue NW, Washington, DC 20220. The FOIA and Transparency team will forward the request to the component(s) that it determines to be most likely to maintain the records that are sought.
(3) A requester who is making a request for records about himself or herself must comply with the verification of identity provision set forth in section 1.26 of subpart C of this part.
(4) Where a request for records pertains to a third party, a requester may receive greater access by submitting either a notarized authorization signed by that individual or a declaration by that individual made in compliance with the requirements set forth in 28 U.S.C. 1746, authorizing disclosure of the records to the requester, or submitting proof that the individual is deceased (
(b)
(a)
(b)
(c)
(d)
(1)
(2)
(ii) Whenever a component refers any part of the responsibility for responding to a request to another agency, it must document the referral, maintain a copy of the record that it refers, and notify the requester of the referral, informing the requester of the name(s) of the agency to which the record was referred, including that agency's FOIA contact information.
(3)
(4)
(5)
(e)
(a)
(b)
(c)
(d)
(e)
(i) Circumstances in which the lack of expedited processing could reasonably be expected to pose an imminent threat to the life or physical safety of an individual;
(ii) An urgency to inform the public about an actual or alleged Federal government activity, if made by a person who is primarily engaged in disseminating information. The standard of “urgency to inform” requires that the records requested pertain to a matter of current exigency to the public and that delaying a response to a request for records would compromise a significant recognized interest to and throughout the general public; or
(iii) The loss of substantial due process rights.
(2) A request for expedited processing may be made at any time. Requests must be submitted to the component that maintains the records requested. The time period for making the determination on the request for expedited processing under this section shall commence on the date that the component receives the request.
(3) A requester who seeks expedited processing must submit a statement, certified to be true and correct, explaining in detail the basis for making the request for expedited processing. As a matter of administrative discretion, a component may waive the formal certification requirement.
(4) A requester seeking expedited processing under paragraph (e)(1)(ii) of this section, who is not a full-time member of the news media must establish that he or she is a person whose primary professional activity or occupation is information dissemination. Such a requester also must establish a particular urgency to inform the public about the government activity involved in the request—one that extends beyond the public's right to
(5) A component shall notify the requester within ten calendar days of the receipt of a request for expedited processing of its decision whether to grant or deny expedited processing. If expedited processing is granted, the request shall be given priority, placed in the processing track for expedited requests, and shall be processed as soon as practicable. If a component denies expedited processing, any appeal of that decision that complies with the procedures set forth in § 1.6 of this subpart shall be acted on expeditiously.
(f)
(g)
(h)
(i)
(1) The name and title or position of the person responsible for the denial;
(2) A brief statement of the reasons for the denial, including any FOIA exemption applied by the component in denying the request; and
(3) An estimate of the volume of any records or information withheld, for example, by providing the number of pages or some other reasonable form of estimation. This estimation is not required if the volume is otherwise indicated by deletions marked on records that are disclosed in part, or if the estimate would cause a harm protected by one of the exemptions.
(4) A statement that the denial may be appealed under § 1.6(a) of this subpart, and a description of the requirements set forth therein.
(5) A statement notifying the requester of the assistance available from the component's FOIA Public Liaison and the dispute resolution services offered by the Office of Government Information Services.
(j)
(k)
(2) A component invoking an exclusion must maintain an administrative record of the process of invocation and of the consultation with OIP.
(a)
(2)
(3)
(b)
(i) The requested confidential commercial information has been designated in good faith by the submitter as information considered protected from disclosure under Exemption 4; or
(ii) The component has a reason to believe that the requested confidential commercial information may be protected from disclosure under Exemption 4 of the FOIA.
(2) The notice shall either describe the confidential commercial information requested or include a copy of the requested records or portions of records containing the information. In cases involving a voluminous number of submitters, notice may be made by posting or publishing the notice in a place or manner reasonably likely to accomplish it.
(c)
(1) The component determines that the confidential commercial information is exempt from disclosure under the FOIA;
(2) The confidential commercial information lawfully has been published or has been officially made available to the public; or
(3) Disclosure of the confidential commercial information is required by a statute other than the FOIA or by a regulation issued in accordance with the requirements of Executive Order 12600 of June 23, 1987;
(d)
(2) A submitter who fails to respond within the time period specified in the notice shall be considered to have no objection to disclosure of the information. An objection to disclosure
(e)
(f)
(1) A statement of the reasons why each of the submitter's disclosure objections was not sustained;
(2) Copies of the records that the component intends to disclose or, in the alternative, a description of the confidential commercial information to be disclosed; and
(3) A specified disclosure date, which shall be a reasonable time subsequent to the notice.
(g)
(h)
(a)
(b)
(2) An appeal ordinarily will not be adjudicated if the request becomes a matter of FOIA litigation.
(3) On receipt of any appeal involving classified information, the FOIA appeal official or designee must take appropriate action to ensure compliance with applicable classification rules.
(c)
(d)
(a)
(b)
(1)
(2)
(3)
(4)
(5)
(6)
(7)
(8)
(9)
(c)
(1)
(ii) For each quarter hour spent by personnel searching for requested records, including electronic searches that do not require new programming, the fees shall be as follows: executive—$21; professional—$16.50; and administrative—$13.00.
(iii) In addition, requesters will be charged the direct costs associated with the creation of any new computer program required to locate the requested records.
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(3)
(d)
(2) If a component fails to comply with the FOIA's time limits in which to respond to a request, it may not charge search fees, or, in the instances of requests from requesters described in paragraph (d)(1) of this section, may not charge duplication fees, except as described in paragraphs (d)(2)(i) through (iii) of this section.
(i) If a component has determined that unusual circumstances as defined by the FOIA apply and the agency provided timely written notice to the requester in accordance with the FOIA, a failure to comply with the time limit shall be excused for an additional ten days.
(ii) If a component has determined that unusual circumstances as defined by the FOIA apply, and more than 5,000 pages are necessary to respond to the request, the component may charge search fees, or, in the case of requesters described in paragraph (d)(1) of this section, may charge duplication fees if the following steps are taken. The component must have provided timely written notice of unusual circumstances to the requester in accordance with the FOIA and the component must have discussed with the requester via written mail, email, or telephone (or made not less than three good-faith attempts to do so) how the requester could effectively limit the scope of the request in accordance with 5 U.S.C. 552(a)(6)(B)(ii). If this exception is satisfied, the component may charge all applicable fees incurred in the processing of the request.
(iii) If a court has determined that exceptional circumstances exist as defined in the FOIA, a failure to comply with the time limits shall be excused for the length of time provided by the court order.
(3) No search or review fees will be charged for a quarter-hour period unless more than half of that period is required for search or review.
(4) Except for requesters seeking records for a commercial use, components will provide without charge:
(i) The first 100 pages of duplication (or the cost equivalent for other media); and
(ii) The first two hours of search.
(5) When, after first deducting the 100 free pages (or its cost equivalent) and the first two hours of search, a total fee calculated under paragraph (c) of this section is $25.00 or less for any request, no fee will be charged.
(e)
(f)
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(i)
(2) When a component determines or estimates that a total fee to be charged under this section will exceed $250.00, it may require that the requester make an advance payment up to the amount of the entire anticipated fee before beginning to process the request. A component may elect to process the request prior to collecting fees when it receives a satisfactory assurance of full payment from a requester with a history of prompt payment.
(3) Where a requester has previously failed to pay a properly charged FOIA fee to any component or agency within 30 calendar days of the billing date, a component may require that the requester pay the full amount due, plus any applicable interest on that prior request and the component may require that the requester make an advance payment of the full amount of any anticipated fee before the component begins to process a new request or continues to process a pending request, or any pending appeal. Where a component has a reasonable basis to believe that a requester has misrepresented his or her identity in order to avoid paying outstanding fees, it may require that the requester provide proof of identity.
(4) In cases in which a component requires advance payment, the request shall not be considered received and further work will not be completed until the required payment is received. If the requester does not pay the advance payment within 30 calendar days after the date of the component's fee determination letter, the request will be closed.
(j)
(k)
(2) A component must furnish records responsive to a request without charge or at a reduced rate when it determines, based on all available information, that disclosure of the requested information is in the public interest because it is likely to contribute significantly to public understanding of the operations or activities of the government and is not primarily in the commercial interest of the requester. In deciding whether this standard is satisfied the component must consider the factors described in paragraphs (k)(2)(i) through (iii) of this section:
(i) Disclosure of the requested information would shed light on the operations or activities of the government. The subject of the request must concern identifiable operations or activities of the Federal Government with a connection that is direct and clear, not remote or attenuated.
(ii) Disclosure of the requested information would be likely to contribute significantly to public understanding of those operations or activities. This factor is satisfied when the following criteria are met:
(A) Disclosure of the requested records must be meaningfully informative about government operations or activities. The disclosure of information that is already in the public domain, in either the same or a substantially identical form, would not be meaningfully informative if nothing new would be added to the public's understanding.
(B) The disclosure must contribute to the understanding of a reasonably broad audience of persons interested in the subject, as opposed to the individual understanding of the requester. A requester's expertise in the subject area as well as the requester's ability and intention to effectively convey information to the public must be considered. Components will presume that a representative of the news media will satisfy this consideration.
(iii) The disclosure must not be primarily in the commercial interest of the requester. To determine whether disclosure of the requested information is primarily in the commercial interest of the requester, components will consider the following criteria:
(A) Components must identify whether the requester has any commercial interest that would be furthered by the requested disclosure. A commercial interest includes any commercial, trade, or profit interest. Requesters must be given an opportunity to provide explanatory information regarding this consideration.
(B) If there is an identified commercial interest, the component must determine whether that is the primary interest furthered by the request. A waiver or reduction of fees is justified when the requirements of paragraphs (k)(2)(i) and (ii) of this section are satisfied and any commercial interest is not the primary interest furthered by the request. Components ordinarily will presume that when a news media requester has satisfied the requirements of paragraphs (k)(2)(i) and (ii) of this section, the request is not primarily in the commercial interest of the requester. Disclosure to data brokers or others who merely compile and market government information for direct economic return will not be presumed to primarily serve the public interest.
(3) Where only some of the records to be released satisfy the requirements for a waiver of fees, a waiver shall be granted for those records.
(4) Requests for a waiver or reduction of fees should be made when the request is first submitted to the component and should address the criteria referenced above. A requester may submit a fee waiver request at a later time so long as the underlying record request is pending or on administrative appeal. When a requester who has committed to pay fees subsequently asks for a waiver of those fees and that waiver is denied, the requester shall be required to pay any costs incurred up to the date the fee waiver request was received.
(5) The requester shall be notified in writing of the decision to grant or deny the fee waiver.
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(a) Initial determinations as to whether to grant requests for records of the Departmental Offices will be made by the Director for FOIA and Transparency, or the designee of such official, with the exception of initial determinations by the Office of the Inspector General and the Special Inspector General for the Troubled Asset Relief Program, which will be made by the designee of the respective Inspector General.
(b) Requests for records should be sent to: Freedom of Information Request, Departmental Offices, Director, FOIA and Transparency, Department of the Treasury, 1500 Pennsylvania Avenue NW, Washington, DC 20220. Requests may also be submitted via email at
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(a) Appellate determinations with respect to records of the Departmental Offices or requests for expedited processing will be made by the Deputy Assistant Secretary for Privacy, Transparency, and Records, or the designee of such official, with the exception of appellate determinations by the Office of the Inspector General and the Special Inspector General for the Troubled Asset Relief Program, which will be made by the respective Inspector General or his or her designee.
(b) Appeals should be addressed to: Freedom of Information Appeal, Departmental Offices, FOIA and Transparency, Department of the Treasury, 1500 Pennsylvania Avenue NW, Washington, DC 20220. Appeals may also be submitted via email at
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Requests for records should be submitted to the IRS using the information below:
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Freedom of Information Request, Disclosure Officer, Bureau of the Fiscal Service, 401 14th Street SW, Washington, DC 20227.
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Appeals may be delivered personally to the Office of the Commissioner, Bureau of the Fiscal Service, 401 14th Street SW, Washington, DC.
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Appeals may be delivered personally to the Communications Division, Comptroller of the Currency, 250 E Street SW, Washington, DC.
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Environmental Protection Agency (EPA).
Direct final rule.
Pursuant to the Federal Clean Air Act (CAA or the Act), the Environmental Protection Agency (EPA) is approving revisions to New Mexico's State Implementation Plan (SIP) that incorporate updates to the New Mexico statutes. EPA is also correcting its previous approval of some statute provisions as approval of these provisions into the SIP was in error.
This rule is effective on May 28, 2019 without further notice, unless the EPA receives relevant adverse comment by March 29, 2019. If the EPA receives such comment, the EPA will publish a timely withdrawal in the
Submit your comments, identified by Docket No. EPA-R06-OAR-2015-0850, at
Jeff Riley, (214) 665-8542,
Throughout this document “we,” “us,” and “our” means the EPA.
Section 110 of the CAA requires states to develop and submit to the EPA a SIP to ensure that state air quality meets National Ambient Air Quality Standards. These ambient standards currently address six criteria pollutants: carbon monoxide, nitrogen dioxide, ozone, lead, particulate matter, and sulfur dioxide. Each federally-approved SIP protects air quality primarily by addressing air pollution at its point of origin through air pollution regulations and control strategies. The EPA approved SIP regulations and control strategies are federally enforceable.
On August 6, 2015, the New Mexico Environment Department (NMED) provided a demonstration of how the existing New Mexico SIP met the applicable section 110(a)(2) requirements for the revised primary annual fine particulate matter (PM
Section 110(k)(6) of the CAA provides EPA with the authority to make corrections to prior SIP actions that are subsequently found to be in error in the same manner as the prior action, and to do so without requiring any further submission from the State. On March 6, 2013, the Eleventh Circuit Court of Appeals issued a 2-1 decision relevant to EPA authority under Section 110(k)(6).
While CAA section 110(k)(6) provides EPA with the authority to correct its own “error,” nowhere does this provision or any other provision in the CAA define what qualifies as “error.” Thus, EPA believes that the term should be given its plain language, everyday meaning, which includes all unintentional, incorrect or wrong actions or mistakes.
Under section 110(a)(2) of the CAA, states are required to develop and maintain an air quality management program that meets various basic structural requirements, including, but not limited to: enforceable emission limitations; an ambient monitoring program; an enforcement program; air quality modeling capabilities; and adequate personnel, resources, and legal authority as per 40 CFR 51.230. This “infrastructure SIP” requirement is met through state submittal of SIPs that implement, maintain, and enforce a new or revised NAAQS within 3 years of EPA issuing the standard. An air agency may cite existing EPA-approved provisions and/or adopt new or revised statutory authorities and regulations, as necessary, in order to address each element of the infrastructure SIP.
As noted above, EPA's March 22, 2018 final action approved updates to statutes under NMSA 1978 Chapter 10, Article 16 and NMSA 1978 Chapter 74, Articles 1 & 2 to satisfy the CAA sections 110(a)(2)(E)(ii) and 128 requirements. However, the August 6, 2015 State submittal also included updated statutes under NMSA 1978 Chapter 9, Article 7A and NMSA 1978 Chapter 74, Articles 1 & 2 that EPA did not act upon. EPA has evaluated these remaining updated statues against the criteria established by section 110(a)(2) of the CAA to determine if these provisions are integral to meeting the basic structural requirements of an air quality management program. Similarly, EPA has evaluated the SIP-approved statutes under NMSA 1978 Chapter 74, Articles 1 and 2 to determine if elements of our November 2, 1984 final approval were in error and should therefore be removed from the New Mexico SIP. Below is a summary of EPA's evaluation; see our Technical Support Document (TSD) prepared in conjunction with this SIP revision for more information concerning our evaluation.
EPA has determined that the State's updates to the NMSA 1978 sections represented in Table 1 grant the Environmental Improvement Board (EIB) and/or NMED with authority for SIP development, enforcement, inspections, construction and operating permits, air monitoring, development of air quality studies and modeling, reporting, consultation, assurance of adequate implementation, and addressing of environmental emergencies.
These sections establish an air quality management program for New Mexico that meets the various basic structural requirements of CAA section 110(a)(2), and therefore their inclusion into the SIP is warranted and appropriate. We find the State's submitted revisions to these sections to be non-substantive and consistent with the CAA. EPA is approving these revisions into the New Mexico SIP.
EPA has determined that our November 2, 1984 final approval of the NMSA 1978 sections represented in Table 2 was done in error, and these sections should therefore be removed from the New Mexico SIP.
These elements are appropriate for state and local agencies to adopt and implement, but it is not necessary or appropriate to make them federally enforceable by incorporating them into the applicable SIP. Moreover, inclusion of sections 74-2-8, 74-2-9, 74-2-14, 74-2-15, and 74-2-16 into the SIP present inconsistencies with the Act, and Federal requirements. EPA is removing these sections from the New Mexico SIP, and will not act upon updates to these sections contained in the State's August 6, 2015 submittal.
Further, the State's submittal identified NMSA 1978, section 74-2-15.1 (
We are approving revisions to the New Mexico SIP that pertain to updated statutes under NMSA 1978 Chapter 74, Article 2 contained in the State's August 6, 2015 submittal. We are also making an error correction to remove from the New Mexico SIP certain statutes under NMSA 1978 Chapter 74, Article 2 originally approved in our November 2, 1984 rulemaking.
The EPA is publishing this rule without prior proposal because we view this as a non-controversial amendment and anticipate no adverse comments. However, in the proposed rules section of this
In this rule, the EPA is finalizing regulatory text that includes incorporation by reference. In accordance with requirements of 1 CFR 51.5, the EPA is finalizing the incorporation by reference of the revisions to the New Mexico statutes as described in the Final Action section above. The EPA has made, and will continue to make, these materials generally available through
Under the CAA, the Administrator is required to approve a SIP submission that complies with the provisions of the Act and applicable Federal regulations. 42 U.S.C. 7410(k); 40 CFR 52.02(a). Thus, in reviewing SIP submissions, the EPA's role is to approve state choices, provided that they meet the criteria of the CAA. Accordingly, this action merely approves state law as meeting Federal requirements and does not impose additional requirements beyond those imposed by state law. For that reason, this action:
• Is not a “significant regulatory action” subject to review by the Office of Management and Budget under Executive Orders 12866 (58 FR 51735, October 4, 1993) and 13563 (76 FR 3821, January 21, 2011);
• Is not an Executive Order 13771 (82 FR 9339, February 2, 2017) regulatory action because SIP approvals are exempted under Executive Order 12866;
• Does not impose an information collection burden under the provisions of the Paperwork Reduction Act (44 U.S.C. 3501
• Is certified as not having a significant economic impact on a substantial number of small entities under the Regulatory Flexibility Act (5 U.S.C. 601
• Does not contain any unfunded mandate or significantly or uniquely affect small governments, as described in the Unfunded Mandates Reform Act of 1995 (Public Law 104-4);
• Does not have federalism implications as specified in Executive Order 13132 (64 FR 43255, August 10, 1999);
• Is not an economically significant regulatory action based on health or safety risks subject to Executive Order 13045 (62 FR 19885, April 23, 1997);
• Is not a significant regulatory action subject to Executive Order 13211 (66 FR 28355, May 22, 2001);
• Is not subject to requirements of section 12(d) of the National Technology Transfer and Advancement Act of 1995 (15 U.S.C. 272 note) because application of those requirements would be inconsistent with the CAA; and
• Does not provide EPA with the discretionary authority to address, as appropriate, disproportionate human health or environmental effects, using practicable and legally permissible methods, under Executive Order 12898 (59 FR 7629, February 16, 1994).
In addition, the SIP is not approved to apply on any Indian reservation land or in any other area where EPA or an Indian tribe has demonstrated that a tribe has jurisdiction. In those areas of Indian country, the rule does not have tribal implications and will not impose substantial direct costs on tribal governments or preempt tribal law as specified by Executive Order 13175 (65 FR 67249, November 9, 2000).
The Congressional Review Act, 5 U.S.C. 801
Under section 307(b)(1) of the CAA, petitions for judicial review of this action must be filed in the United States Court of Appeals for the appropriate circuit by April 29, 2019. Filing a petition for reconsideration by the Administrator of this final rule does not affect the finality of this rule for the purposes of judicial review nor does it extend the time within which a petition for judicial review may be filed, and shall not postpone the effectiveness of such rule or action. This action may not be challenged later in proceedings to enforce its requirements. (See section 307(b)(2).)
Environmental protection, Air pollution control, Incorporation by reference, Nitrogen dioxide, Ozone, Particulate matter, Reporting and recordkeeping requirements, Sulfur oxides, Volatile organic compounds.
40 CFR part 52 is amended as follows:
42 U.S.C. 7401
The revisions read as follows:
(e) * * *
Environmental Protection Agency (EPA).
Final rule.
The Environmental Protection Agency (EPA) is taking final action to approve revisions to the Operating Permits Program (OPP) for the State of Kansas. This final action will amend the Kansas rules to reorganize, clarify, and update the Class I emission fee, application fee, and emissions inventory regulations and ensure that Kansas's OPP is adequately funded. Approval of these revisions ensures consistency between the State and federally-approved rules and does not impact air quality.
This final rule is effective on March 29, 2019.
EPA has established a docket for this action under Docket ID No. EPA-R07-OAR-2018-0828. All documents in the docket are listed on the
Deborah Bredehoft, Environmental Protection Agency, Air Planning and Development Branch, 11201 Renner Boulevard, Lenexa, Kansas 66219 at (913) 551-7164, or by email at
Throughout this document “we,” “us,” and “our” refer to EPA.
On December 19, 2018 (83 FR 65115), EPA published a notice of proposed rulemaking (NPR) for the State of Kansas. In the NPR, EPA proposed approval of revisions to the Kansas OPP. The revisions were submitted by the State of Kansas on January 22, 2018. Revisions to the program include revoking Kansas Administrative Regulation (K.A.R.) 28-19-202; adding new language to K.A.R. 28-19-517 which parallels language in the revoked K.A.R. 28-19-202; increasing the annual emission fee from $37 dollars per ton to $53 dollars per ton; increasing all application fees in K.A.R. 28-19-516; establishing a baseline emission fee; and adding additional clarifications to the Program to address fees, refunds, electronic submittal, and who is required to submit an annual emissions inventory. A detailed discussion of Kansas's OPP submission and EPA's rationale for approving the OPP submission were provided in the NPR and the associated Technical Support Document in the docket for this rulemaking and will not be restated here. No comments were received regarding the NPR.
The state provided a public comment period for this OPP revision from September 7, 2017, to November 15, 2017, and received comments. In response to the comments, Kansas revised the rule prior to submitting to the EPA. The revisions are consistent with applicable EPA requirements in title V of the CAA and 40 CFR part 70.
The EPA is taking final action to approve revisions to the Kansas OPP by approving the State's request to revoke K.A.R. 28-19-202, Annual emissions fees; and to amend K.A.R. 28-19-516, Class I operating permits, application fees; and K.A.R. 28-19-517, Class I operating permits, annual emissions inventory and fees. Approval of these revisions will ensure consistency between the state and federally-approved rules. EPA has determined that these changes will not adversely impact air emissions.
This final action merely approves state law as meeting Federal requirements and does not impose additional requirements beyond those imposed by state law. For that reason, this final action:
• Is not a significant regulatory action subject to review by the Office of Management and Budget under Executive Orders 12866 (58 FR 51735, October 4, 1993) and 13563 (76 FR 3821, January 21, 2011);
• Is not an Executive Order 13771 (82 FR 9339, February 2, 2017) regulatory action because Title V approvals are exempted under Executive Order 12866.
• Does not impose an information collection burden under the provisions of the Paperwork Reduction Act (44 U.S.C. 3501
• Is certified as not having a significant economic impact on a substantial number of small entities under the Regulatory Flexibility Act (5 U.S.C. 601
• Does not contain any unfunded mandate or significantly or uniquely affect small governments, as described in the Unfunded Mandates Reform Act of 1995 (Pub. L. 104-4);
• Does not have Federalism implications as specified in Executive Order 13132 (64 FR 43255, August 10, 1999);
• Is not an economically significant regulatory action based on health or safety risks subject to Executive Order 13045 (62 FR 19885, April 23, 1997);
• Is not a significant regulatory action subject to Executive Order 13211 (66 FR 28355, May 22, 2001);
• Is not subject to requirements of the National Technology Transfer and Advancement Act (NTTA) because this rulemaking does not involve technical standards; and
• Does not provide EPA with the discretionary authority to address, as appropriate, disproportionate human health or environmental effects, using practicable and legally permissible methods, under Executive Order 12898 (59 FR 7629, February 16, 1994).
In addition, this approval of the revision to Kansas's Title V Operating Permit Program does not have tribal implications and will not impose substantial direct costs on tribal governments or preempt tribal law as specified by Executive Order 13175 (65 FR 67249, November 9, 2000).
The Congressional Review Act, 5 U.S.C. 801
Under section 307(b)(1) of the Clean Air Act, petitions for judicial review of this action must be filed in the United States Court of Appeals for the appropriate circuit by April 29, 2019. Filing a petition for reconsideration by the Administrator of this final rule does not affect the finality of this action for the purposes of judicial review nor does it extend the time within which a petition for judicial review may be filed, and shall not postpone the effectiveness of such rule or action. This action may not be challenged later in proceedings to enforce its requirements. (See section 307(b)(2).)
Administrative practice and procedure, Air pollution control, Intergovernmental relations, Operating permits, Reporting and recordkeeping requirements.
For the reasons stated in the preamble, EPA amends 40 CFR part 70 as set forth below:
42 U.S.C. 7401
(g) The Kansas Department of Health and Environment submitted revisions to Kansas rules K.A.R. 28-19-202, K.A.R. 28-19-516, and K.A.R. 28-19-517, on January 22, 2018. The state effective date is January 5, 2018. This revision is effective April 29, 2019.
Environmental Protection Agency (EPA).
Final rule.
This regulation establishes tolerances for residues of abamectin in or on bananas and tea. Syngenta Crop Protection, LLC, requested these tolerances under the Federal Food, Drug, and Cosmetic Act (FFDCA).
This regulation is effective February 27, 2019. Objections and requests for hearings must be received on or before April 29, 2019, and must be filed in accordance with the instructions provided in 40 CFR part 178 (see also Unit I.C. of the
The docket for this action, identified by docket identification (ID) number EPA-HQ-OPP-2018-0037, is available at
Michael Goodis, Registration Division (7505P), Office of Pesticide Programs, Environmental Protection Agency, 1200 Pennsylvania Ave. NW, Washington, DC 20460-0001; main telephone number: (703) 305-7090; email address:
You may be potentially affected by this action if you are an agricultural producer, food manufacturer, or pesticide manufacturer. The following list of North American Industrial Classification System (NAICS) codes is not intended to be exhaustive, but rather provides a guide to help readers determine whether this document applies to them. Potentially affected entities may include:
• Crop production (NAICS code 111).
• Animal production (NAICS code 112).
• Food manufacturing (NAICS code 311).
• Pesticide manufacturing (NAICS code 32532).
You may access a frequently updated electronic version of EPA's tolerance regulations at 40 CFR part 180 through the Government Printing Office's e-CFR site at
Under FFDCA section 408(g), 21 U.S.C. 346a, any person may file an objection to any aspect of this regulation and may also request a hearing on those objections. You must file your objection or request a hearing on this regulation in accordance with the instructions provided in 40 CFR part 178. To ensure proper receipt by EPA, you must identify docket ID number EPA-HQ-OPP-2018-0037 in the subject line on the first page of your submission. All objections and requests for a hearing must be in writing, and must be received by the Hearing Clerk on or before April 29, 2019. Addresses for mail and hand delivery of objections and hearing requests are provided in 40 CFR 178.25(b).
In addition to filing an objection or hearing request with the Hearing Clerk as described in 40 CFR part 178, please submit a copy of the filing (excluding any Confidential Business Information (CBI)) for inclusion in the public docket. Information not marked confidential pursuant to 40 CFR part 2 may be disclosed publicly by EPA without prior notice. Submit the non-CBI copy of your objection or hearing request, identified by docket ID number EPA-HQ-OPP-2018-0037, by one of the following methods:
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Additional instructions on commenting or visiting the docket, along with more information about dockets generally, is available at
In the
Based upon review of the data supporting the petition, EPA has modified the levels at which tolerances are being established for tea and banana as well as the commodity definition for tea. The reason for these changes are explained in Unit IV.C.
Section 408(b)(2)(A)(i) of FFDCA allows EPA to establish a tolerance (the legal limit for a pesticide chemical residue in or on a food) only if EPA determines that the tolerance is “safe.” Section 408(b)(2)(A)(ii) of FFDCA defines “safe” to mean that “there is a reasonable certainty that no harm will result from aggregate exposure to the pesticide chemical residue, including all anticipated dietary exposures and all other exposures for which there is reliable information.” This includes exposure through drinking water and in residential settings, but does not include occupational exposure. Section 408(b)(2)(C) of FFDCA requires EPA to give special consideration to exposure of infants and children to the pesticide chemical residue in establishing a tolerance and to “ensure that there is a reasonable certainty that no harm will result to infants and children from aggregate exposure to the pesticide chemical residue. . . .”
Consistent with FFDCA section 408(b)(2)(D), and the factors specified in FFDCA section 408(b)(2)(D), EPA has reviewed the available scientific data and other relevant information in support of this action. EPA has sufficient data to assess the hazards of and to make a determination on aggregate exposure for abamectin including exposure resulting from the tolerances established by this action. EPA's assessment of exposures and risks associated with abamectin follows.
EPA has evaluated the available toxicity data and considered its validity, completeness, and reliability as well as the relationship of the results of the studies to human risk. EPA has also considered available information concerning the variability of the sensitivities of major identifiable subgroups of consumers, including infants and children.
A summary of the toxicological effects of abamectin as well as specific information on the studies received and the nature of the adverse effects caused by abamectin and the no-observed-adverse-effect-level (NOAEL) and the lowest-observed-adverse-effect-level (LOAEL) from the toxicity studies are discussed in the final rule published in the
Once a pesticide's toxicological profile is determined, EPA identifies toxicological points of departure (POD) and levels of concern to use in evaluating the risk posed by human exposure to the pesticide. For hazards that have a threshold below which there is no appreciable risk, the toxicological POD is used as the basis for derivation of reference values for risk assessment. PODs are developed based on a careful analysis of the doses in each toxicological study to determine the dose at which no adverse effects are observed (the NOAEL) and the lowest dose at which adverse effects of concern are identified (the LOAEL). Uncertainty/safety factors are used in conjunction with the POD to calculate a safe exposure level—generally referred to as a population-adjusted dose (PAD) or a reference dose (RfD)—and a safe margin of exposure (MOE). For non-threshold risks, the Agency assumes that any amount of exposure will lead to some degree of risk. Thus, the Agency estimates risk in terms of the probability of an occurrence of the adverse effect expected in a lifetime. For more information on the general principles EPA uses in risk characterization and a complete description of the risk assessment process, see
A summary of the toxicological endpoints for abamectin used for human risk assessment is discussed in Unit III.B. of the final rule published in the
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Such effects were identified for abamectin. In estimating acute dietary exposure, EPA used food consumption information from the 2003-2008 United States Department of Agriculture (USDA) National Health and Nutrition Examination Survey, What We Eat in America (NHANES/WWEIA). As to residue levels in food, a refined acute dietary (food and drinking water) exposure assessment was conducted for all established food uses of abamectin. Acute anticipated residues derived from field trial data were used. Empirical and 2018 DEEM default processing factors and PCT estimates were used, as available. No monitoring data were used.
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Section 408(b)(2)(F) of FFDCA states that the Agency may use data on the actual percent of food treated for assessing chronic dietary risk only if:
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The following maximum PCT estimates for abamectin were used in the acute dietary risk assessment for the following crops: Almond: 80%; apple: 30%; apricot: 30%; avocado: 60%; bean, dry: 2.5%; blackberry: 68%; boysenberry: 68%; cantaloupe: 45%; celery: 70%; cherry: 20%; corn, sweet: 57%; cotton: 30%; cucumber: 10%; grape: 35%; grapefruit: 90%; hazelnut: 2.5%; honeydew: 35%; lemon: 55%; lettuce: 45%; loganberry: 68%; nectarine: 20%; onion, bulb: 10%; orange: 70%; peach: 25%; pear: 85%; pecan: 2.5%; pepper: 30%; pistachio: 2.5%; plum/prune: 35%; potato: 20%; pumpkin: 10%; raspberry: 68%; soybean: 11%; spinach: 45%; squash: 15%; strawberry: 45%; tangerine: 55%; tomato: 25%; walnut: 55%; and watermelon: 15%.
The PCT values that were used to refine the livestock commodities for the acute assessment were based on: Sweet corn (57%) for beef, goat, horse, and sheep commodities; and the FHE uses (5%) for hog and poultry meat and meat byproducts.
The following average PCT estimates for abamectin were used in the chronic dietary risk assessment for the following crops: Almond: 70%; apple: 10%; apricot: 15%; avocado: 35%; bean, dry: 2.5%; blackberry: 56%; boysenberry: 56%; cantaloupe: 25%; celery: 45%; cherry: 5%; corn, sweet: 45%; cotton: 20%; cucumber: 5%; grape: 15%; grapefruit: 70%; hazelnut: 2.5%; honeydew: 20%; lemon: 40%; lettuce: 20%; loganberry: 56%; nectarine: 20%; onion, bulb: 2.5%; orange: 40%; peach: 10%; pear: 70%; pecan: 1%; pepper: 15%; pistachio: 2.5%; plum/prune: 10%; potato: 5%; pumpkin: 5%; raspberry: 56%; soybeans: 8%; spinach: 25%; squash: 5%; strawberry: 30%; tangerine: 35%; tomato: 10%; walnuts: 25%; and watermelons: 5%.
The PCT values that were used to refine the livestock commodities for the chronic assessment were based on: Cotton (20%), soybean (8%), and sweet corn (45%). The PCT for poultry and hog commodities is based on the FHE PCT (5%) since the tolerances for FHE uses result in residues considerably higher than secondary residues from hogs and poultry consuming treated feed.
In most cases, EPA uses available data from United States Department of Agriculture/National Agricultural Statistics Service (USDA/NASS), proprietary market surveys, and California Department of Pesticide Regulation (CalDPR) Pesticide Use Reporting (PUR) for the chemical/crop combination for the most recent 10 years. EPA uses an average PCT for chronic dietary risk analysis and a maximum PCT for acute dietary risk analysis. The average PCT figures for each existing use is derived by combining available public and private market survey data for that use, averaging across all observations, and rounding up to the nearest 5%, except for those situations in which the average PCT is less than 1% or less than 2.5%. In those cases, the Agency would use less than 1% or less than 2.5% as the average PCT value, respectively. The maximum PCT figure is the highest observed maximum value reported within the most recent 10 years of available public and private market survey data for the existing use and rounded up to the nearest multiple of 5%, except where the maximum PCT is less than 2.5%, in which case, the Agency uses less than 2.5% as the maximum PCT.
The Agency believes that the three conditions discussed in Unit III.C.1.iv. have been met. With respect to Condition a, PCT estimates are derived from Federal and private market survey data, which are reliable and have a valid basis. The Agency is reasonably certain that the percentage of the food treated is not likely to be an underestimation. As to Conditions b and c, regional consumption information and consumption information for significant subpopulations is taken into account through EPA's computer-based model for evaluating the exposure of significant subpopulations including several regional groups. Use of this consumption information in EPA's risk assessment process ensures that EPA's exposure estimate does not understate exposure for any significant subpopulation group and allows the Agency to be reasonably certain that no regional population is exposed to residue levels higher than those estimated by the Agency. Other than the data available through national food consumption surveys, EPA does not have available reliable information on the regional consumption of food to which abamectin may be applied in a particular area.
2.
Based on the Tier I Pesticide Root Zone Model—Ground Water (PRZM-
Modeled estimates of drinking water concentrations were directly entered into the dietary exposure model. For the acute dietary risk assessment, the Agency used a residue distribution file for water based upon the maximum single application rate to ornamentals. For the chronic dietary risk assessment, the water concentration of value 1.21 ppb was used to assess the contribution to drinking water.
3.
Abamectin is currently registered for the following uses that could result in residential exposures: Golf course turf, homeowner bait and bait station products that include an outdoor granular bait formulation for use on fire ant mounds, and several indoor ready-to-use baits of both dust and gel formulations. In addition, there is a pending action for use on professional and collegiate sports fields that has been incorporated into this review.
EPA assessed residential exposure using the following assumptions: For residential handlers, both dermal and inhalation short-term exposure is expected from the currently registered bait and bait station uses. Residential post-application exposure for adults and children (6 to <11 and 11 to <16) is possible for the use of abamectin on golf courses and collegiate and professional sports fields. Adults and children (6 to <11 and 11 to <16) performing physical post-application activities may receive dermal exposure to abamectin residues. For the indoor liquid spray application as a spot or crack and crevice treatment, residential post-application exposures are possible. However, for the outdoor liquid spray application, exposures are expected to be negligible, and therefore, were not quantitatively assessed. Adults and children performing physical post-application activities on carpets and hard surfaces may receive exposure to abamectin residues.
The following residential post application scenarios were used in the aggregate assessment because they result in the lowest MOEs: Adults (dermal) from exposure to collegiate sports field turf; children 11 to less than 16 years old (dermal) from exposure to golf course turf; children 6 to less than 11 years old (dermal) from exposure to golf course turf; and children 1 to less than 2 years old (dermal, inhalation, and incidental oral) from exposure to carpets.
Further information regarding EPA standard assumptions and generic inputs for residential exposures may be found at
4.
EPA has determined that abamectin and emamectin share characteristics to support a testable hypothesis for a common mechanism of action. Following this determination, the Agency conducted a screening-level cumulative risk assessment to determine if cumulative exposures to these chemicals would pose a risk of concern. This screening assessment indicates that that cumulative dietary and residential aggregate exposures for abamectin and emamectin are below the Agency's levels of concern. No further cumulative evaluation is necessary for abamectin and emamectin.
The Agency's screening-level cumulative analysis can be found at
1.
2.
The rat reproduction toxicity and developmental neurotoxicity studies demonstrated both qualitative and quantitative susceptibility in the pups to the effects of abamectin (decrease pup weights and increased postnatal pup mortality). This observation is consistent with the finding that P-gp is not fully developed in rat pups until postnatal day 28. Therefore, during the period from birth to postnatal day 28, the rat pups are substantially more susceptible to the effects of abamectin than adult rats. However, in humans, P-gp has been detected in the fetus at 22 weeks of pregnancy, and the human newborns have functioning P-gp. Therefore, human infants and children are not expected to have enhanced sensitivity as seen in rat pups.
3.
i. The toxicity database for abamectin is complete.
ii. The proposed mode of action (MOA) is interaction with GABA receptors leading to neurotoxicity. The findings of neurotoxic signs observed in the abamectin database are consistent with the proposed MOA. Signs of neurotoxicity ranging from decreases in foot splay reflex, mydriasis (
iii. As explained in Unit III.D.2 “Prenatal and postnatal sensitivity”, the enhanced susceptibility seen in the rabbit developmental toxicity, the rat reproduction, and the rat developmental neurotoxicity studies do not present a risk concern.
iv. There are no residual uncertainties identified in the exposure databases. The chronic and acute dietary food exposure assessment are refined including use of anticipated residues, default processing factors, and percent crop treated; however, these refinements are considered protective because field trials are conducted to represent use conditions leading to the maximum residues in food when the product is used in accordance with the label and do not underestimate exposures. EPA made conservative (protective) assumptions in the ground and surface water modeling used to assess exposure to abamectin in drinking water. EPA used similarly conservative assumptions to assess post-application exposure of children. These assessments will not underestimate the exposure and risks posed by abamectin.
EPA determines whether acute and chronic dietary pesticide exposures are safe by comparing aggregate exposure estimates to the acute PAD (aPAD) and chronic PAD (cPAD). For linear cancer risks, EPA calculates the lifetime probability of acquiring cancer given the estimated aggregate exposure. Short-, intermediate-, and chronic-term risks are evaluated by comparing the estimated aggregate food, water, and residential exposure to the appropriate PODs to ensure that an adequate MOE exists.
1.
2.
3.
Abamectin is currently registered for uses that could result in short-term residential exposure, and the Agency has determined that it is appropriate to aggregate chronic exposure through food and water with short-term residential exposures to abamectin.
Using the exposure assumptions described in this unit for short-term exposures, EPA has concluded the combined short-term food, water, and residential exposures result in aggregate MOEs of 790 for adults, 2,900 for children aged 11 to less than 16 years old, 1,800 for children aged 6 to less than 11 years old, and 180 for children 1-2 years old. Because EPA's level of concern for abamectin is a MOE of 100 or below, these MOEs are not of concern.
4.
Intermediate-term adverse effects were identified; however, abamectin is not registered for any use patterns that would result in intermediate-term residential exposure. Intermediate-term risk is assessed based on intermediate-term residential exposure plus chronic dietary exposure. Because there is no intermediate-term residential exposure and chronic dietary exposure has already been assessed under the appropriately protective cPAD (which is at least as protective as the POD used to assess intermediate-term risk), no further assessment of intermediate-term risk is necessary, and EPA relies on the chronic dietary risk assessment for evaluating intermediate-term risk for abamectin.
5.
6.
Adequate enforcement methods for abamectin in plant and livestock commodities are available in the Pesticide Analytical Manual, Volume II (PAM II).
In making its tolerance decisions, EPA seeks to harmonize U.S. tolerances with international standards whenever possible, consistent with U.S. food safety standards and agricultural practices. EPA considers the international maximum residue limits (MRLs) established by the Codex Alimentarius Commission (Codex), as required by FFDCA section 408(b)(4). The Codex Alimentarius is a joint United Nations Food and Agriculture Organization/World Health Organization food standards program, and it is recognized as an international food safety standards-setting organization in trade agreements to which the United States is a party. EPA may establish a tolerance that is different from a Codex MRL; however, FFDCA section 408(b)(4) requires that EPA explain the reasons for departing from the Codex level.
The Codex has not established a MRL for abamectin on either tea or banana.
The petitioner proposed a tolerance level of 0.002 ppm for residues in/on banana. The tolerance is being established at the level of the combined limit of quantitation (LOQs) for the residues of concern which is 0.006 ppm. The tolerance level for tea, dried is being established at 1.0 ppm, which alters the proposed tolerance of 1 ppm to adjust for significant figures and commodity definition revision.
Therefore, tolerances are established for residues of abamectin, in or on banana at 0.006 ppm and tea, dried at 1.0 ppm.
This action establishes tolerances under FFDCA section 408(d) in
Since tolerances and exemptions that are established on the basis of a petition under FFDCA section 408(d), such as the tolerance in this final rule, do not require the issuance of a proposed rule, the requirements of the Regulatory Flexibility Act (RFA) (5 U.S.C. 601
This action directly regulates growers, food processors, food handlers, and food retailers, not States or tribes, nor does this action alter the relationships or distribution of power and responsibilities established by Congress in the preemption provisions of FFDCA section 408(n)(4). As such, the Agency has determined that this action will not have a substantial direct effect on States or tribal governments, on the relationship between the national government and the States or tribal governments, or on the distribution of power and responsibilities among the various levels of government or between the Federal Government and Indian tribes. Thus, the Agency has determined that Executive Order 13132, entitled “Federalism” (64 FR 43255, August 10, 1999) and Executive Order 13175, entitled “Consultation and Coordination with Indian Tribal Governments” (65 FR 67249, November 9, 2000) do not apply to this action. In addition, this action does not impose any enforceable duty or contain any unfunded mandate as described under Title II of the Unfunded Mandates Reform Act (UMRA) (2 U.S.C. 1501
This action does not involve any technical standards that would require Agency consideration of voluntary consensus standards pursuant to section 12(d) of the National Technology Transfer and Advancement Act (NTTAA) (15 U.S.C. 272 note).
Pursuant to the Congressional Review Act (5 U.S.C. 801
Environmental protection, Administrative practice and procedure, Agricultural commodities, Pesticides and pests, Reporting and recordkeeping requirements.
Therefore, 40 CFR chapter I is amended as follows:
21 U.S.C. 321(q), 346a and 371.
(a) * * *
National Endowment for the Arts, National Foundation on the Arts and the Humanities.
Final regulations.
This rule amends the National Endowment for the Arts' (Arts Endowment) regulations implementing the Freedom of Information Act (FOIA). The new regulations are updated to reflect statutory changes to FOIA, the current organizational structure of the Arts Endowment, and current Arts Endowment policies and practices with respect to FOIA. Finally, the regulations use current cost figures in calculating and charging fees.
These regulations are effective February 27, 2019.
Daniel Fishman, Attorney Advisor, National Endowment for the Arts, 400 7th St. SW, Washington, DC 20506, Telephone: 202-682-5514.
On June 9, 2017 the Arts Endowment published a notice of proposed rulemaking (NPRM) for certain amendments to its FOIA Regulations (82 FR 26763). In the preamble of the NPRM, the Arts Endowment discussed on pages 26763 and 26764 the major changes proposed in that document to the FOIA regulations. These included the following:
• The addition of Arts Endowment-specific FOIA regulations at 45 CFR part 1148.
• The requirements of the FOIA Improvement Act of 2016 (Pub. L. 114-185).
Due to delays in issuing the final regulation, on November 6, 2018 the Arts Endowment reopened comments on its draft for an additional 30 days to ensure public input on the proposed rule (83 FR 55504).
The Arts Endowment now publishes its final regulations.
Executive Order (E.O.) 12866 established a process for review of rules by the Office of Information and Regulatory Affairs, which is within the Office of Management and Budget (OMB). Only “significant” proposed and final rules are subject to review under this Executive Order. “Significant,” as used in E.O. 12866, means “economically significant.” It refers to rules with (1) an impact on the economy of $100 million; or that (2) were inconsistent or interfered with an action taken or planned by another agency; (3) materially altered the budgetary impact of entitlements, grants, user fees, or loan programs; or (4) raised novel legal or policy issues.
This final rule would not be a significant policy change and OMB has not reviewed this rule under E.O. 12866. We have made the assessments required by E.O. 12866 and determined that this final rule: (1) Will not have an effect of $100 million or more on the economy; (2) will not adversely affect in a material way the economy, productivity, competition, jobs, the environment, public health or safety, or State, local, or Tribal governments or communities; (3) will not create a serious inconsistency or otherwise interfere with an action taken or planned by another agency; (4) does not alter the budgetary effects of entitlements, grants, user fees, or loan programs or the rights or obligations of their recipients; and (5) does not raise novel legal or policy issues.
This final rule does not have federalism implications, as set forth in E.O. 13132. As used in this E.O., federalism implications mean “substantial direct effects on the States, on the relationship between the national government and the States, or on the distribution of power and responsibilities among the various levels of government.” The Arts Endowment has determined that this final rule will not have federalism implications within the meaning of E.O. 13132.
This final rule meets the applicable standards set forth in section 3(a) and 3(b)(2) of E.O. 12988. Specifically, this final rule is written in clear language designed to help reduce litigation.
Under the criteria in E.O. 13175, we have evaluated this final rule and determined that it would have no potential effects on federally recognized Indian Tribes.
Under the criteria in E.O. 12630, this final rule does not have significant takings implications. Therefore, a takings implication assessment is not required.
This final rule will not have a significant adverse impact on a substantial number of small entities, including small businesses, small governmental jurisdictions, or certain small not-for-profit organizations.
This final rule does not contain a Federal mandate that will 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.
The final rule will not have significant effect on the human environment.
This final rule would not be a major rule as defined in section 804 of the Small Business Regulatory Enforcement Fairness Act of 1996. This final rule will not result in an annual effect on the economy of $100,000,000 or more, a major increase in costs or prices, significant adverse effects on competition, employment, investment, productivity, innovation, or on the ability of United States-based companies to compete with foreign based companies in domestic and export markets.
Executive Order 13771 § 5 requires that agencies, in most circumstances, remove or rescind two regulations for every regulation promulgated unless they request and are specifically exempted from that order's requirements by the Director of the Office of Management and Budget.
This final rule is not subject to the requirements of Executive Order 13771 because this final rule is not significant under Executive Order 12866. Furthermore, the Arts Endowment has requested and has received an exemption from the Director of the Office of Management and Budget from the requirement that the agency rescind two regulations for every regulation it promulgates.
Administrative practice and procedure, Archives and records, Freedom of information.
5 U.S.C. 552; 28 U.S.C. 1746; 31 U.S.C. 3717; E.O. 12600, 52 FR 23781, 3 CFR, 1987 Comp.
This part contains the rules that the Arts Endowment follows in processing requests for records under the Freedom of Information Act (FOIA), 5 U.S.C. 552. These rules should be read in conjunction with the text of the FOIA and the Uniform Freedom of
Records that the Arts Endowment makes available for public inspection in an electronic format may be accessed through the Arts Endowment's open government page, available at
(a)
(b)
(1) A requester who is making a request for records about himself or herself must comply with the Arts Endowment's verification requirements as set forth in § 1159.9 of this chapter.
(2) Where a request for records pertains to another individual, a requester may receive greater access by submitting either a notarized authorization signed by that individual or a declaration made in compliance with the requirements set forth in 28 U.S.C. 1746 by that individual authorizing disclosure of the records to the requester, or by submitting proof that the individual is deceased (
(c)
(d)
(e)
(a)
(b)
(c)
(1)
(2)
(ii) Whenever the Arts Endowment refers any part of the responsibility for responding to a request to another agency, it will document the referral, maintain a copy of the record that it refers, and notify the requester of the referral, informing the requester of the name(s) of the agency to which the record was referred, including that agency's FOIA contact information.
(d)
(e)
(a)
(b)
(c)
(d)
(e)
(1) The Arts Endowment will process requests and appeals on an expedited basis whenever it is determined that they involve:
(i) Circumstances in which the lack of expedited processing could reasonably be expected to pose an imminent threat to the life or physical safety of an individual; or
(ii) An urgency to inform the public about an actual or alleged Federal Government activity, if made by a person who is primarily engaged in disseminating information.
(2) A request for expedited processing may be made at any time. Requests based on paragraphs (e)(1)(i) and (ii) of this section must be submitted to the Arts Endowment's Office of General Counsel. When making a request for expedited processing of an administrative appeal, the request should be submitted to the Arts Endowment's FOIA Appeals Office per § 1148.8(a).
(3) A requester who seeks expedited processing must submit a statement, certified to be true and correct, explaining in detail the basis for making the request for expedited processing. For example, under paragraph (e)(1)(ii) of this section, a requester who is not a full-time member of the news media must establish that the requester is a person whose primary professional activity or occupation is information dissemination, though it need not be the requester's sole occupation. Such a requester also must establish a particular urgency to inform the public about the government activity involved in the request—one that extends beyond the public's right to know about government activity generally. The existence of numerous articles published on a given subject can be helpful in establishing the requirement that there be an “urgency to inform” the public on the topic. As a matter of administrative discretion, the Arts Endowment may waive the formal certification requirement.
(4) The Arts Endowment will notify the requester within 10 calendar days of the receipt of a request for expedited processing of its decision whether to grant or deny expedited processing. If expedited processing is granted, the request must be given priority, placed in the processing track for expedited requests, and must be processed as soon as practicable. If a request for expedited processing is denied, the Arts Endowment will act on any appeal of that decision expeditiously.
(a)
(b)
(c)
(d)
(e)
(f)
(1) The name and title or position of the person responsible for the denial;
(2) A brief statement of the reasons for the denial, including any FOIA exemption applied by the Arts Endowment in denying the request;
(3) An estimate of the volume of any records or information withheld, such
(4) A statement that:
(i) The denial may be appealed under § 1148.8(a);
(ii) That the requester has 90 days to file an appeal in order for it to be considered timely, and that the Arts Endowment will not process or consider appeals that were not filed within 90 days of the receipt of an adverse determination; and
(iii) A description of the appeal requirements; and
(5) A statement notifying the requester of the assistance available from the Arts Endowment's FOIA Public Liaison and the dispute resolution services offered by OGIS.
(g)
(a)
(1)
(2)
(b)
(c)
(1) The Arts Endowment will promptly provide written notice to the submitter of confidential commercial information whenever records containing such information are requested under the FOIA if the Arts Endowment determines that it may be required to disclose the records, provided:
(i) The requested information has been designated in good faith by the submitter as information considered protected from disclosure under Exemption 4; or
(ii) The Arts Endowment has a reason to believe that the requested information may be protected from disclosure under Exemption 4, but has not yet determined whether the information is protected from disclosure.
(2) The notice will either describe the commercial information requested or include a copy of the requested records or portions of records containing the information. In cases involving a voluminous number of submitters, the Arts Endowment may post or publish a notice in a place or manner reasonably likely to inform the submitters of the proposed disclosure, instead of sending individual notifications.
(d)
(1) The Arts Endowment determines that the information is exempt under the FOIA, and therefore will not be disclosed;
(2) The information has been lawfully published or has been officially made available to the public;
(3) Disclosure of the information is required by a statute other than the FOIA or by a regulation issued in accordance with the requirements of Executive Order 12600 of June 23, 1987; or
(4) The designation made by the submitter under paragraph (b) of this section appears obviously frivolous. In such case, the Arts Endowment will give the submitter written notice of any final decision to disclose the information within a reasonable number of days prior to a specified disclosure date.
(e)
(1) The Arts Endowment will specify a reasonable time period within which the submitter must respond to the notice referenced in paragraph (c) of this section.
(2) If a submitter has any objections to disclosure, it must provide the Arts Endowment a detailed written statement that specifies all grounds for withholding the particular information under any exemption of the FOIA. In order to rely on Exemption 4 as basis for nondisclosure, the submitter must explain why the information constitutes a trade secret or commercial or financial information that is confidential.
(3) A submitter who fails to respond within the time period specified in paragraph (e)(1) of this section will be considered to have no objection to disclosure of the information. The Arts Endowment is not required to consider any information received after the date of any disclosure decision. Any information provided by a submitter under this part may itself be subject to disclosure under the FOIA.
(f)
(g)
(1) A statement of the reasons why each of the submitter's disclosure objections was not sustained;
(2) A description of the information to be disclosed or copies of the records as the Arts Endowment intends to release them; and
(3) A specified disclosure date, which will be a reasonable time after the notice.
(h)
(i)
(a)
(b)
(2) An appeal ordinarily will not be adjudicated if the request becomes a matter of FOIA litigation.
(c)
(d)
(e)
(f)
The Arts Endowment will preserve all correspondence pertaining to the requests that it receives under this part, as well as copies of all requested records, until disposition or destruction is authorized pursuant to title 44 of the United States Code or the General Records Schedule 4.2 of the National Archives and Records Administration. The Arts Endowment will not dispose of or destroy records while they are the subject of a pending request, appeal, or lawsuit under the FOIA.
(a)
(i) Commercial use requesters;
(ii) Non-commercial scientific or educational institutions or news media requesters; and
(ii) All other requesters.
(2) Different fees are assessed depending on the category. Requesters may seek a fee waiver. The Arts Endowment will consider requests for fee waiver in accordance with the requirements in paragraph (k) of this section. To resolve any fee issues that arise under this section, the Arts Endowment may contact a requester for additional information. The Arts Endowment will ensure that searches, review, and duplication are conducted in the most efficient and the least expensive manner. The Arts Endowment ordinarily will collect all applicable fees before sending copies of records to a requester. Requesters must pay fees by check or money order made payable to the Treasury of the United States, or by another method as determined by the Arts Endowment.
(b)
(1)
(2)
(3)
(4)
A request from a professor of architecture at a university for records relating to Arts Endowment grants related to architecture, written on letterhead of the Department of Geology, would be presumed to be from an educational institution.
A request from the same professor of architecture seeking translation grant information from the Arts Endowment in furtherance of a murder mystery he is writing would not be presumed to be an institutional request, regardless of whether it was written on institutional stationery.
A student who makes a request in furtherance of their coursework or other school-sponsored activities and provides a copy of a course syllabus or other reasonable documentation to indicate the research purpose for the request, would qualify as part of this fee category.
(5)
(6)
(7)
(8)
(c)
(1)
(i) Requests made by educational institutions, noncommercial scientific institutions, or representatives of the news media are not subject to search fees. The Arts Endowment will charge search fees for all other requesters, subject to the restrictions of paragraph (d) of this section. The Arts Endowment may properly charge for time spent searching even if the Arts Endowment does not locate any responsive records or if the Arts Endowment determines that the records are entirely exempt from disclosure.
(ii) For manual searches, the fee charged will be the salary rate or rates of the employee or employees conducting the search. For computer searches, the fee charged will be the actual direct cost of providing the service, including the salary rate or rates of the operator(s) or programmer(s) conducting the search. The salary rate is calculated as the particular employee's basic pay plus 16.1 percent. The Arts Endowment may charge fees even if the documents are determined to be exempt from disclosure or cannot be located.
(iii) The Arts Endowment will charge the direct costs associated with conducting any search that requires the creation of a new computer program to locate the requested records. The Arts Endowment will notify the requester of the costs associated with creating such a program, and the requester must agree to pay the associated costs before the costs may be incurred.
(iv) For requests that require the retrieval of records stored by the Arts Endowment at a Federal records center operated by the National Archives and Records Administration (NARA), the Arts Endowment will charge additional costs in accordance with the Transactional Billing Rate Schedule established by NARA.
(2)
(3)
(d)
(1) When the Arts Endowment determines that a requester is an educational institution, non-commercial scientific institution, or representative of the news media, and the records are not sought for commercial use, it will not charge search fees.
(2) If the Arts Endowment fails to comply with the FOIA's time limits in which to respond to a request, it will not charge search fees, or, in the instances of requests from requesters described in paragraph (d)(1) of this section, may not charge duplication fees, except as described in paragraphs (d)(3) through (5) of this section.
(3) If the Arts Endowment has determined that unusual circumstances as defined by the FOIA apply and the Arts Endowment provided timely written notice to the requester in accordance with the FOIA, a failure to comply with the time limit shall be excused for an additional 10 working days.
(4) If the Arts Endowment has determined that unusual circumstances, as defined by the FOIA, apply and more than 5,000 pages are necessary to respond to the request, the Arts Endowment may charge search fees, or, in the case of requesters described in paragraph (d)(1) of this section, may charge duplication fees, if the following steps are taken:
(i) The Arts Endowment provided timely written notice of unusual circumstances to the requester in accordance with the FOIA; and
(ii) The Arts Endowment discussed with the requester via written mail, email, or telephone (or made not less than three good-faith attempts to do so) how the requester could effectively limit the scope of the request in accordance with 5. U.S.C. 552(a)(6)(B)(ii). If this exception is satisfied, the Arts Endowment may charge all applicable fees incurred in the processing of the request.
(5) If a court has determined that exceptional circumstances exist, as defined by the FOIA, a failure to comply with the time limits shall be excused for the length of time provided by the court order.
(6) No search or review fees will be charged for a quarter-hour period unless more than half of that period is required for search or review.
(7) Except for requesters seeking records for a commercial use, the Arts Endowment will provide without charge:
(i) The first 100 pages of duplication (or the cost equivalent for other media); and
(ii) The first two hours of search.
(8) No fee will be charged when the total fee, after deducting the 100 free pages (or its cost equivalent) and the first two hours of search, is equal to or less than $25.
(e)
(1) When the Arts Endowment determines or estimates that the fees to be assessed in accordance with this section will exceed $25.00, the Arts Endowment will notify the requester of the actual or estimated amount of the fees, including a breakdown of the fees for search, review or duplication, unless the requester has indicated a willingness to pay fees as high as those anticipated. If only a portion of the fee can be estimated readily, the Arts Endowment will advise the requester accordingly. If the request is not for noncommercial use, the notice will specify that the requester is entitled to the statutory entitlements of 100 pages of duplication at no charge and, if the requester is charged search fees, two hours of search time at no charge, and will advise the requester whether those entitlements have been provided.
(2) If the Arts Endowment notifies the requester that the actual or estimated fees are in excess of $25.00, the request will not be considered received and further work will not be completed until the requester commits in writing to pay the actual or estimated total fee, or designates some amount of fees the requester is willing to pay, or in the case of a noncommercial use requester who has not yet been provided with the requester's statutory entitlements, designates that the requester seeks only that which can be provided by the statutory entitlements. The requester must provide the commitment or designation in writing, and must, when applicable, designate an exact dollar amount the requester is willing to pay. The Arts Endowment is not required to accept payments in installments.
(3) If the requester has indicated a willingness to pay some designated amount of fees, but the Arts Endowment estimates that the total fee will exceed that amount, the Arts Endowment will toll the processing of the request when it notifies the requester of the estimated fees in excess of the amount the requester has indicated a willingness to pay. The Arts Endowment will inquire whether the requester wishes to revise the amount of fees the requester is willing to pay or modify the request. Once the requester responds, the time to respond will resume from where it was at the date of the notification.
(4) The Arts Endowment will make available its FOIA Public Liaison or other designated FOIA contact to assist any requester in reformulating a request to meet the requester's needs at a lower cost.
(f)
(g)
(h)
(i)
(1) For requests other than those described in paragraph (i)(2) or (3) of this section, the Arts Endowment will not require the requester to make an advance payment before work is commenced or continued on a request. Payment owed for work already completed (
(2) When the Arts Endowment determines or estimates that a total fee to be charged under this section will exceed $250.00, it may require that the requester make an advance payment up to the amount of the entire anticipated fee before beginning to process the request. The Arts Endowment may elect to process the request prior to collecting fees when it receives a satisfactory assurance of full payment from a requester with a history of prompt payment.
(3) Where a requester has previously failed to pay a properly charged FOIA fee to any agency within 30 calendar days of the billing date, the Arts Endowment may require that the requester pay the full amount due, plus any applicable interest on that prior request, and the Arts Endowment may
(4) In cases in which the Arts Endowment requires advance payment, the request will not be considered received and further work will not be completed until the required payment is received. If the requester does not pay the advance payment within 30 calendar days after the date of the Arts Endowment's fee determination, the request will be closed.
(j)
(k)
(1) Requesters may seek a waiver of fees by submitting a written application demonstrating how disclosure of the requested information is in the public interest because it is likely to contribute significantly to public understanding of the operations or activities of the government and is not primarily in the commercial interest of the requester.
(2) The Arts Endowment will furnish records responsive to a request without charge or at a reduced rate when it determines, based on all available information, that the factors described in paragraphs (k)(2)(i) through (iii) of this section are satisfied:
(i) Disclosure of the requested information would shed light on the operations or activities of the government. The subject of the request must concern identifiable operations or activities of the Federal Government with a connection that is direct and clear, not remote or attenuated.
(ii) Disclosure of the requested information is likely to contribute significantly to public understanding of those operations or activities. This factor is satisfied when the following criteria are met:
(A) Disclosure of the requested records must be meaningfully informative about government operations or activities. The disclosure of information that already is in the public domain, in either the same or a substantially identical form, would not be meaningfully informative if nothing new would be added to the public's understanding.
(B) The disclosure must contribute to the understanding of a reasonably broad audience of persons interested in the subject, as opposed to the individual understanding of the requester. A requester's expertise in the subject area as well as the requester's ability and intention to effectively convey information to the public must be considered. The Arts Endowment will presume that a representative of the news media will satisfy this consideration.
(iii) The disclosure must not be primarily in the commercial interest of the requester. To determine whether disclosure of the requested information is primarily in the commercial interest of the requester, the Arts Endowment will consider the following criteria:
(A) The Arts Endowment will identify whether the requester has any commercial interest that would be furthered by the requested disclosure. A commercial interest includes any commercial, trade, or profit interest. Requesters will be given an opportunity to provide explanatory information regarding this consideration.
(B) If there is an identified commercial interest, the Arts Endowment will determine whether that is the primary interest furthered by the request. A waiver or reduction of fees is justified when the requirements of paragraphs (k)(2)(i) and (ii) of this section are satisfied and any commercial interest is not the primary interest furthered by the request. The Arts Endowment ordinarily will presume that when a news media requester has satisfied the factors in paragraphs (k)(2)(i) and (ii) of this section, the request is not primarily in the commercial interest of the requester. Disclosure to data brokers or others who merely compile and market government information for direct economic return will not be presumed to primarily serve the public interest.
(3) Where only some of the records to be released satisfy the requirements for a waiver of fees, a waiver will be granted for those records.
(4) Requests for a waiver or reduction of fees should be made when the request is first submitted to the Arts Endowment and should address the criteria referenced in paragraphs (k)(1) through (3) of this section. A requester may submit a fee waiver request at a later time so long as the underlying record request is pending or on administrative appeal. When a requester who has committed to pay fees subsequently asks for a waiver of those fees and that waiver is denied, the requester must pay any costs incurred up to the date the fee waiver request was received.
Nothing in this part shall be construed to entitle any person, as of right, to any service or to the disclosure of any record to which such person is not entitled under the FOIA.
Environmental Protection Agency (EPA).
Proposed rule.
Pursuant to the Federal Clean Air Act (CAA or the Act), the Environmental Protection Agency (EPA) is proposing to approve revisions to New Mexico's State Implementation Plan (SIP) that incorporate updates to the New Mexico statutes. EPA is also correcting its previous approval of some statute provisions as approval of these provisions into the SIP was in error.
Written comments should be received on or before March 29, 2019.
Submit your comments, identified by EPA-R06-OAR-2015-0850, at
Jeff Riley, (214) 665-8542,
In the final rules section of this
For additional information, see the direct final rule which is located in the rules section of this
The Department of Agriculture has submitted the following information collection requirement(s) to OMB for review and clearance under the Paperwork Reduction Act of 1995, Public Law 104-13. Comments are requested regarding (1) whether the collection of information is necessary for the proper performance of the functions of the agency, including whether the information will have practical utility; (2) the accuracy of the agency's estimate of burden including the validity of the methodology and assumptions used; (3) ways to enhance the quality, utility and clarity of the information to be collected; and (4) ways to minimize the burden of the collection of information on those who are to respond, including through the use of appropriate automated, electronic, mechanical, or other technological collection techniques or other forms of information technology.
Comments regarding this information collection received by March 29, 2019 will be considered. Written comments should be addressed to: Desk Officer for Agriculture, Office of Information and Regulatory Affairs, Office of Management and Budget (OMB),
An agency may not conduct or sponsor a collection of information unless the collection of information displays a currently valid OMB control number and the agency informs potential persons who are to respond to the collection of information that such persons are not required to respond to the collection of information unless it displays a currently valid OMB control number.
The Department of Agriculture has submitted the following information collection requirement(s) to OMB for review and clearance under the Paperwork Reduction Act of 1995, Public Law 104-13. Comments are requested regarding (1) whether the collection of information is necessary for the proper performance of the functions of the agency, including whether the information will have practical utility; (2) the accuracy of the agency's estimate of burden including the validity of the methodology and assumptions used; (3) ways to enhance the quality, utility and clarity of the information to be collected; and (4) ways to minimize the burden of the collection of information on those who are to respond, including through the use of appropriate automated, electronic, mechanical, or other technological collection techniques or other forms of information technology.
Comments regarding this information collection received by March 29, 2019 will be considered. Written comments should be addressed to: Desk Officer for Agriculture, Office of Information and Regulatory Affairs, Office of Management and Budget (OMB), New Executive Office Building, 725 17th Street NW, Washington, DC 20502. Commenters are encouraged to submit their comments to OMB via email to:
An agency may not conduct or sponsor a collection of information unless the collection of information displays a currently valid OMB control number and the agency informs potential persons who are to respond to the collection of information that such persons are not required to respond to the collection of information unless it displays a currently valid OMB control number.
The Department of Agriculture has submitted the following information collection requirement(s) to OMB for review and clearance under the Paperwork Reduction Act of 1995, Public Law 104-13. Comments are requested regarding (1) whether the collection of information is necessary for the proper performance of the functions of the agency, including whether the information will have practical utility; (2) the accuracy of the agency's estimate of burden including the validity of the methodology and assumptions used; (3) ways to enhance the quality, utility and clarity of the information to be collected; and (4) ways to minimize the burden of the collection of information on those who are to respond, including through the use of appropriate automated, electronic, mechanical, or other technological collection techniques or other forms of information technology.
Comments regarding this information collection received by March 29, 2019 will be considered. Written comments should be addressed to: Desk Officer for Agriculture, Office of Information and Regulatory Affairs, Office of Management and Budget (OMB), New Executive Office Building, 725 17th Street NW, Washington, DC 20502. Commenters are encouraged to submit their comments to OMB via email to:
An agency may not conduct or sponsor a collection of information unless the collection of information displays a currently valid OMB control number and the agency informs potential persons who are to respond to the collection of information that such persons are not required to respond to the collection of information unless it displays a currently valid OMB control number.
Animal and Plant Health Inspection Service, USDA.
Notice of availability.
We are advising the public that the Animal and Plant Health Inspection Service has prepared an environmental assessment relative to permitting the release of
We will consider all comments that we receive on or before March 29, 2019.
You may submit comments by either of the following methods:
•
•
Supporting documents and any comments we receive on this docket may be viewed at
Dr. Colin D. Stewart, Assistant Director, Pests, Pathogens, and Biocontrol Permits, Permitting and Compliance Coordination, PPQ, APHIS, 4700 River Road, Unit 133, Riverdale, MD 20737-1231; (301) 851-2327, email:
Brazilian peppertree (
The insects
The Animal and Plant Health Inspection Service's (APHIS') review and analysis of the potential environmental impacts associated with the proposed release are documented in detail in an environmental assessment (EA) entitled “Field Release of the Insects
The EA may be viewed on the
The EA has been prepared in accordance with: (1) The National Environmental Policy Act of 1969 (NEPA), as amended (42 U.S.C. 4321
Forest Service, USDA.
Notice of meeting.
The Virginia Resource Advisory Committee (RAC) will meet in Roanoke, VA. The committee is authorized under the Secure Rural Schools and Community Self-Determination Act (the Act) and operates in compliance with the Federal Advisory Committee Act. The purpose of the committee is to improve collaborative relationships and to provide advice and recommendations to the Forest Service concerning projects and funding consistent with Title II of the Act. Additional RAC information, including the meeting agenda and the meeting summary/minutes can be found at the following website:
The meeting will be held on March 15, 2019 from 10:00 a.m. to 6:00 p.m.
All RAC meetings are subject to cancellation. For status of meeting prior to attendance, please contact the person listed under
The meetings will be held at the George Washington and Jefferson National Forests Supervisor's Office, Conference Room, 5162 Valleypointe Parkway, Roanoke, Virginia.
Written comments may be submitted as described under
Rebecca Robbins, RAC Coordinator by phone at (540) 265-5173 or via email at
Individuals who use telecommunication devices for the deaf (TDD) may call the Federal Information Relay Service (FIRS) at 1-800-877-8339 between 8:00 a.m. and 8:00 p.m., Eastern Standard Time, Monday through Friday.
The purpose of the meeting is to prioritize and recommend projects for Title II funds. The committee will also use the meeting to nominate and vote on a Chairperson. The meeting is open to the public. The agenda will include time for people to make oral statements of three minutes or less. Individuals wishing to make an oral statement should request in writing by March 6, 2019 to be scheduled on the agenda. Anyone who would like to bring related matters to the attention of the committee may file written statements with the committee staff before or after the meeting. Written comments and requests for time for oral comments must be sent to Rebecca Robbins, RAC Coordinator, George Washington and Jefferson NF Supervisor's Office, 5162 Valleypointe Parkway, Roanoke, Virginia 24019; or by email to
Forest Service, USDA.
Withdrawal of Notice of Intent to Prepare an Environmental Impact Statement.
The Klamath National Forest is withdrawing the Notice of Intent (NOI) to prepare an Environmental Impact Statement for the Elk Creek Watershed Project. The original NOI was published in the
The project is being canceled and will be combined with a new project for which an Environmental Assessment will be prepared.
Questions concerning this notice and requests to be added to the project mailing list should be directed to Benjamin Daly, Happy Camp/Oak Knoll Ranger District, via mail at 63822 State Highway 96, P.O. Box 377, Happy Camp, CA 96039; via telephone at (530) 493-1734; or via email at
Individuals who have previously submitted comments on this project will remain on the project mailing list and do not need to contact the Forest.
Forest Service, USDA.
Withdrawal of notice of intent to prepare an Environmental Impact Statement.
The Shasta-Trinity National Forest is withdrawing the Notice of Intent (NOI) to prepare an Environmental Impact Statement (EIS) for the Lower McCloud Fuels Management Project. The original NOI was published in the
Questions concerning withdrawal of the NOI should be addressed to Emelia Barnum at the following address: Shasta McCloud Management Unit, Shasta-Trinity National Forest, 204 W Alma St., Mt. Shasta, CA 96067; via phone at 530-926-9600; or via email at
Individuals who use telecommunication devices for the deaf (TDD) may call the Federal Information Relay Service (FIRS) at 1-800-877-8339 between 8 a.m. and 8 p.m., Eastern Time, Monday through Friday.
Forest Service, USDA.
Notice of meetings.
The Idaho Panhandle Resource Advisory Committee (RAC) will meet in Coeur d'Alene, Idaho. The committee is authorized under the Secure Rural Schools and Community Self-Determination Act (the Act) and operates in compliance with the Federal Advisory Committee Act. The purpose of the committee is to improve collaborative relationships and to provide advice and recommendations to the Forest Service concerning projects and funding consistent with Title II of the Act. RAC information can be found at the following website:
The meetings will be held on the following dates:
• Friday, March 8, 2019, at 9:00 a.m.,
• Friday, March 29, 2019, at 9:00 a.m., and
• Friday, April 5, 2019, at 9:00 a.m.
All RAC meetings are subject to cancellation. For updated status of the meeting prior to attendance, please contact the person listed under
The meetings will be held at the Idaho Panhandle National Forests Supervisor's Office, 3815 Schreiber Way, Coeur d'Alene, Idaho.
Written comments may be submitted as described under
Phillip Blundell, RAC Coordinator, by phone at 208-783-2101 or by email at
Individuals who use telecommunication devices for the deaf (TDD) may call the Federal Information Relay Service (FIRS) at 1-800-877-8339 between 8:00 a.m. and 8:00 p.m., Eastern Standard Time, Monday through Friday.
The purpose of these meetings are to:
1. Elect a RAC chair and decide upon operating procedures;
2. Review the RAC charter;
3. Complete ethics training; and
4. Discuss calling for project proposals.
The meetings are open to the public. The agendas will include time for people to make oral statements of three minutes or less. Individuals wishing to make an oral statement should request in writing by March 1, 2019, to be scheduled on the agenda for the March 8, 2019 meeting; March 22, 2019, to be scheduled on the agenda for the March 29, 2019 meeting; and March 29, 2019, to be scheduled on the agenda for the April 5, 2019 meeting. Anyone who would like to bring related matters to the attention of the committee may file written statements with the committee staff before or after the meetings. Written comments and requests for time to make oral comments must be sent to Phillip Blundell, RAC Coordinator, Post Office Box 159, Smelterville, Idaho; by email to
National Agricultural Statistics Service (NASS), USDA.
Notice.
In accordance with the Federal Advisory Committee Act, this notice announces an invitation from the Office of the Secretary of Agriculture for nominations to the Advisory Committee on Agriculture Statistics.
The nomination period for interested candidates will close 30 days after publication of this notice.
You may submit nominations by any of the following methods:
•
•
•
•
Kevin Barnes, Associate Administrator, National Agricultural Statistics Service, (202) 720-4333.
On December 18, 2018, the Secretary of Agriculture renewed the Advisory Committee charter for a two-year term to expire on December 17, 2020. The purpose of the Committee is to advise the Secretary of Agriculture on the scope, timing, content, etc., of the periodic censuses and surveys of agriculture, other related surveys, and the types of information to obtain from respondents concerning agriculture. The Committee also prepares recommendations regarding the content of agricultural reports and presents the views and needs for data of major suppliers and users of agricultural statistics.
Each person nominated to serve on the committee is required to submit the following form: AD-755 (Advisory Committee Membership Background Information, OMB Number 0505-0001), available on the internet at
The Committee, appointed by the Secretary of Agriculture, consists of 22 members representing a broad range of disciplines and interests, including, but not limited to, producers, representatives of national farm organizations, agricultural economists, rural sociologists, farm policy analysts, educators, State agriculture representatives, and agriculture-related business and marketing experts.
Members serve staggered 2-year terms, with terms for half of the Committee members expiring in any given year. Nominations are being sought for 22 open Committee seats. Members can serve up to 3 terms for a total of 6 consecutive years. The Chairperson of the Committee shall be elected by members to serve a 1-year term.
Equal opportunity practices, in line with USDA policies, will be followed in all membership appointments to the Committee. To ensure that the recommendations of the Committee have taken into account the needs of the diverse groups served by USDA, membership will include to the extent possible, individuals with demonstrated ability to represent the needs of all racial and ethnic groups, women and men, and persons with disabilities.
The duties of the Committee are solely advisory. The Committee will make recommendations to the Secretary of Agriculture with regards to the agricultural statistics programs of NASS, and such other matters as it may deem advisable, or which the Secretary of Agriculture; Under Secretary for Research, Education, and Economics; or the Administrator of NASS may request. The Committee will meet at least annually. All meetings are open to the public. Committee members are reimbursed for official travel expenses only.
Send questions, comments, and requests for additional information to the email address, fax number, or address listed above.
Rural Utilities Service, USDA.
Notice of public meetings.
The Rural Utilities Service (RUS), an agency of the United States Department of Agriculture, published a notice of availability, public meetings, and Section 106 notification on December 7, 2018 (83 FR 63149)
On February 12, 2019 (84 FR 3412), RUS published a notice announcing an extension of the public comment period to April 1, 2019 due to the lapse in federal funding. Previously cancelled Draft EIS public comment meetings in January 2019 are rescheduled for six days in March.
RUS will conduct six public meetings as follows:
All meetings will be held from 5:00 to 7:00 p.m. local time. A court reporter will be available.
Written comments on this Draft EIS will be accepted until April 1, 2019.
A copy of the Draft EIS may be viewed online at the following website:
To obtain copies of the Draft EIS or for further information, contact: Dennis Rankin or Lauren Cusick, Environmental Protection Specialists, U.S. Department of Agriculture, Rural Utilities Service, 1400 Independence Avenue SW, Room 2244, Stop 1571, Washington, DC 20250-1571, or email
RUS has prepared a Draft Environmental Impact Statement (EIS) to meet its responsibilities under the National Environmental Policy Act (NEPA) and 7 CFR 1794 related to providing financial assistance to Dairyland Power Cooperative (DPC) for its share in the construction of a proposed 345-kilovolt (kV) transmission line and associated infrastructure connecting the Hickory Creek Substation in Dubuque County, Iowa, with the Cardinal Substation in the Town of Middle, Wisconsin (near Madison, Wisconsin). The Project also includes a new intermediate 345/138-kV substation near the Village of Montfort in either Grant County or Iowa County, Wisconsin. The total length of the 345- kV transmission lines associated with the proposed project will be approximately 125 miles. DPC and the other project participants have identified proposed and alternate segments and locations for transmission lines and associated facilities and for the intermediate substation. Dairyland Power Cooperative is requesting RUS to provide financing for its portion of the proposed project. DPC is participating in the proposed project with two other utilities, American Transmission Company LLC, and ITC Midwest LLC (Utilities).
The purpose of the proposed project is to: (1) Address reliability issues on the regional bulk transmission system, (2) alleviate congestion that occurs in certain parts of the transmission system and remove constraints that limit the delivery of power, (3) expand the access of the transmission system to additional resources, (4) increase the transfer capability of the electrical system between Iowa and Wisconsin, (5) reduce the losses in transferring power and increase the efficiency of the transmission system, and 6) respond to public policy objectives aimed at enhancing the nation's transmission system and to support the changing generation mix.
RUS is the lead agency for the federal environmental review with U.S. Fish and Wildlife Service (USFWS), U.S. Army Corps of Engineers (USACE), and the U.S. Environmental Protection Agency (USEPA) serving as cooperating agencies, and the National Park Service (NPS) as a participating agency.
Architectural and Transportation Barriers Compliance Board.
Notice of meetings.
The Architectural and Transportation Barriers Compliance Board (Access Board) plans to hold its regular committee and Board meetings in Washington, DC, Monday through Wednesday, March 11-13, 2019, at the times and location listed below.
The schedule of events open to the public is as follows:
Meetings will be held at the Access Board Conference Room, 1331 F Street NW, Suite 800, Washington, DC 20004.
For further information regarding the meetings, please contact David Capozzi, Executive Director, (202) 272-0010 (voice); (202) 272-0054 (TTY).
At the Board meeting scheduled on the afternoon of Wednesday, March 13, the Access Board will consider the following agenda items:
Members of the public can provide comments either in-person or over the telephone during the final 15 minutes of the Board meeting on Wednesday,
All meetings are accessible to persons with disabilities. An assistive listening system, Communication Access Realtime Translation (CART), and sign language interpreters will be available at the Board meeting and committee meetings.
Persons attending Board meetings are requested to refrain from using perfume, cologne, and other fragrances for the comfort of other participants (see
You may view the Wednesday, March 13, 2019 meeting through a live webcast from 1:30 p.m. to 3:00 p.m. at:
An application has been submitted to the Foreign-Trade Zones Board (the Board) by Lincoln Foreign-Trade Zone, Inc., grantee of FTZ 59, requesting subzone status for the facility of Adams Warehousing Company, LLC (Adams Warehousing), located in Sidney, Nebraska. The application was submitted pursuant to the provisions of the Foreign-Trade Zones Act, as amended (19 U.S.C. 81a-81u), and the regulations of the Board (15 CFR part 400). It was formally docketed on February 21, 2019.
The proposed subzone (852.84 acres) is located at 1655 Industrial Avenue, Sidney, Nebraska. No authorization for production activity has been requested at this time. The proposed subzone would be subject to the existing activation limit of FTZ 59.
In accordance with the Board's regulations, Christopher Kemp of the FTZ Staff is designated examiner to review the application and make recommendations to the Executive Secretary.
Public comment is invited from interested parties. Submissions shall be addressed to the Board's Executive Secretary at the address below. The closing period for their receipt is April 8, 2019. Rebuttal comments in response to material submitted during the foregoing period may be submitted during the subsequent 15-day period to April 23, 2019.
A copy of the application will be available for public inspection at the Office of the Executive Secretary, Foreign-Trade Zones Board, Room 21013, U.S. Department of Commerce, 1401 Constitution Avenue NW, Washington, DC 20230-0002, and in the “Reading Room” section of the Board's website, which is accessible via
For further information, contact Christopher Kemp at
An application has been submitted to the Foreign-Trade Zones (FTZ) Board by the Grand Junction Area Chamber of Commerce to establish a foreign-trade zone in the Grand Junction, Colorado area, under the alternative site framework (ASF) adopted by the FTZ Board (15 CFR Sec. 400.2(c)). The ASF is an option for grantees for the establishment or reorganization of zones and can permit significantly greater flexibility in the designation of new “subzones” or “usage-driven” FTZ sites for operators/users located within a grantee's “service area” in the context of the FTZ Board's standard 2,000-acre activation limit for a zone project. The proposed zone would be adjacent to the proposed U.S. Customs and Border Protection (CBP) user fee airport at the Grand Junction Regional Airport, which currently has received preliminary approval from CBP. The application was submitted pursuant to the provisions of the Foreign-Trade Zones Act, as amended (19 U.S.C. 81a-81u), and the regulations of the Board (15 CFR part 400). It was formally docketed on February 21, 2019. The applicant is authorized to make the proposal under Title 7, Article 49.5 of the Colorado Revised Statutes.
The applicant's proposed service area under the ASF would be Delta, Garfield and Mesa Counties, Colorado in their entirety and portions of Montrose and Rio Blanco Counties, Colorado, as described in the application. If approved, the applicant would be able to serve sites throughout the service area based on companies' needs for FTZ designation. The proposed service area would be within and adjacent to the proposed Grand Junctional Regional Airport CBP user fee airport.
The application indicates a need for zone services in the Grand Junction, Colorado area. Several firms have indicated an interest in using zone procedures for warehousing/distribution activities for a variety of products. The application is not requesting any magnet sites or subzones/usage-driven sites at this time. Specific production approvals are not being sought at this time. Such requests would be made to the FTZ Board on a case-by-case basis.
In accordance with the FTZ Board's regulations, Christopher Kemp of the FTZ Staff is designated examiner to evaluate and analyze the facts and information presented in the application and case record and to report findings and recommendations to the FTZ Board.
Public comment is invited from interested parties. Submissions shall be addressed to the FTZ Board's Executive Secretary at the address below. The closing period for their receipt is April 29, 2019. Rebuttal comments in response to material submitted during the foregoing period may be submitted during the subsequent 15-day period to May 13, 2019.
A copy of the application will be available for public inspection at the Office of the Executive Secretary, Foreign-Trade Zones Board, Room 21013, U.S. Department of Commerce, 1401 Constitution Avenue NW, Washington, DC 20230-0002, and in the “Reading Room” section of the FTZ Board's website, which is accessible via
For further information, contact Christopher Kemp at
Enforcement and Compliance, International Trade Administration, Department of Commerce.
The Department of Commerce (Commerce) is rescinding the administrative review, in part, of the antidumping duty order on certain steel nails from Taiwan for the period July 1, 2017, through June 30, 2018.
Applicable February 27, 2019.
Irene Gorelik, AD/CVD Operations, Office VIII, Enforcement and Compliance, International Trade Administration, Department of Commerce, 1401 Constitution Avenue NW, Washington, DC 20230; telephone: (202) 482-6905.
On September 10, 2018, based on timely requests for review for 86 companies by Mid Continent Steel & Wire, Inc. (Mid Continent), a domestic producer and interested party,
On October 5, 2018, Mid Continent withdrew its request for administrative review for 80 of the 86 companies in its original request for review.
Pursuant to 19 CFR 351.213(d)(1), Commerce will rescind an administrative review, in whole or in part, if the party that requested the review withdraws its request within 90 days of the publication of the notice of initiation of the requested review. Because all active requests for administrative review of the 80 companies listed in the Appendix were withdrawn by Mid Continent within 90 days of the date of publication of the
Commerce will instruct U.S. Customs and Border Protection (CBP) to assess antidumping duties on all appropriate entries at a rate equal to the cash deposit of estimated antidumping duties required at the time of entry, or withdrawal from warehouse, for consumption, during the period July 1, 2017, through June 30, 2018, in accordance with 19 CFR 351.212(c)(1)(i). Commerce intends to issue appropriate assessment instructions to CBP 15 days after the publication of this notice in the
This notice serves as a final reminder to importers of their responsibility under 19 CFR 351.402(f)(2) to file a certificate regarding the reimbursement of antidumping duties prior to liquidation of the relevant entries during this review period. Failure to comply with this requirement could result in Commerce's presumption that reimbursement of the antidumping duties occurred and the subsequent assessment of doubled antidumping duties.
This notice also serves as a reminder to parties subject to administrative protective order (APO) of their responsibility concerning the return or destruction of proprietary information disclosed under APO in accordance with 19 CFR 351.305(a)(3), which continues to govern business proprietary information in this segment of the proceeding. Timely written notification of the return or destruction of APO materials, or conversion to judicial protective order, is hereby requested. Failure to comply with the regulations and terms of an APO is a violation which is subject to sanction.
This notice is issued and published in accordance with sections 751(a)(1) and 777(i)(1) of the Tariff Act of 1930, as amended, and 19 CFR 351.213(d)(4).
Enforcement and Compliance, International Trade Administration, Department of Commerce.
The Department of Commerce (Commerce) determines that imports of large diameter welded pipe (welded pipe) from the Republic of Turkey (Turkey) are being, or are likely to be, sold in the United States at less than fair value (LTFV) for the period of investigation (POI) January 1, 2017, through December 31, 2017.
Applicable February 27, 2019.
Rebecca M. Janz or William Miller, AD/CVD Operations, Office II, Enforcement and Compliance, International Trade Administration, U.S. Department of Commerce, 1401 Constitution Avenue NW, Washington, DC 20230; telephone: (202) 482-2972 or (202) 482-3906, respectively.
On August 27, 2018, Commerce published in the
Commerce exercised its discretion to toll all deadlines affected by the partial federal government closure from December 22, 2018, through the resumption of operations on January 29, 2019.
The product covered by this investigation is welded pipe from Turkey. For a full description of the scope of this investigation,
During the course of this investigation and the concurrent LTFV investigations of welded pipe from Canada, Greece, the Republic of Korea (Korea), and the People's Republic of China (China), and the concurrent countervailing duty investigations of welded pipe from China, India, Korea, and Turkey, Commerce received scope comments from interested parties. Commerce issued a Preliminary Scope Decision Memorandum
All issues raised in the case and rebuttal briefs submitted by parties in this investigation are addressed in the Issues and Decision Memorandum accompanying this notice. A list of the issues addressed in the Issues and Decision Memorandum is attached to this notice as Appendix II. The Issues and Decision Memorandum is a public document and is on file electronically via Enforcement and Compliance's Antidumping and Countervailing Duty Centralized Electronic Service System (ACCESS). ACCESS is available to registered users at
As provided in section 782(i) of the Tariff Act of 1930, as amended, (the Act), in September and October 2018, we conducted verifications of the sales and cost information submitted by Borusan Mannesmann Boru Sanayi ve Ticaret A.S. (Borusan) and HDM Celik Boru Sanayi ve Ticaret A.S. (HDM Celik) for use in our final determination. We used standard verification procedures, including an examination of relevant accounting and production records, and original source documents provided by Borusan and HDM Celik.
Based on our analysis of the comments received and our findings at verification, we made certain changes to the margin calculations for the respondents, Borusan and HDM Celik. For a discussion of these changes,
Section 735(c)(5)(A) of the Act provides that the estimated weighted-average dumping margin for all-other producers and exporters not individually investigated shall be equal to the weighted average of the estimated weighted-average dumping margins established for exporters and producers individually investigated excluding rates that are zero,
The final estimated weighted-average dumping margins are as follows:
We intend to disclose the calculations performed in this final determination within five days of the date of publication of this notice to parties in this proceeding in accordance with 19 CFR 351.224(b).
In accordance with section 735(c)(1)(B) of the Act, for this final determination, we will direct U.S. Customs and Border Protection (CBP) to continue to suspend liquidation of all entries of welded pipe, as described in Appendix I of this notice, which are entered, or withdrawn from warehouse, for consumption on or after August 27, 2018, the date of publication in the
Pursuant to section 735(c)(1)(B)(ii) of the Act and 19 CFR 351.210(d), we will instruct CBP to require a cash deposit for such entries of merchandise equal to the estimated weighted-average dumping margin as follows: (1) The cash deposit rate for the respondents listed above will be equal to the respondent-specific estimated weighted-average dumping margin determined in this final determination; (2) if the exporter is not a respondent identified above but the producer is, then the cash deposit rate will be equal to the respondent-specific estimated weighted-average dumping margin established for that producer of the subject merchandise; and (3) the cash deposit rate for all other producers and exporters will be equal to the all-others estimated weighted-average dumping margin. These suspension of liquidation instructions will remain in effect until further notice.
Further, we will instruct CBP to require a cash deposit equal to the estimated amount by which the normal value exceeds the U.S. price as shown above, adjusted where appropriate for export subsidies found in the final determination of the companion countervailing duty investigation.
Therefore, in the event that a countervailing duty order is issued and suspension of liquidation is resumed in the companion countervailing duty investigation on welded pipe from Turkey, Commerce will instruct CBP to require cash deposits adjusted by the amount of export subsidies, as appropriate. These adjustments are reflected in the final column of the rate chart, above. Until such suspension of liquidation is resumed in the companion countervailing duty investigation, and so long as suspension of liquidation continues under this antidumping duty investigation, the cash deposit rates for this antidumping
In accordance with section 735(d) of the Act, we will notify the International Trade Commission (ITC) of the final affirmative determination of sales at LTFV. In addition, we are making available to the ITC all non-privileged and non-proprietary information related to this investigation. We will allow the ITC access to all privileged and business proprietary information in our files, provided the ITC confirms that it will not disclose such information, either publicly or under an administrative protective order (APO), without the written consent of the Assistant Secretary for Enforcement and Compliance. Because Commerce's final determination is affirmative, in accordance with section 735(b)(2) of the Act, the ITC will make its final determination as to whether the domestic industry in the United States is materially injured, or threatened with material injury, by reason of imports, or sales (or the likelihood of sales) for importation of welded pipe from Turkey no later than 45 days after this final determination. If the ITC determines that such injury does not exist, this proceeding will be terminated, and all cash deposits will be refunded. If the ITC determines that such injury does exist, Commerce will issue an antidumping duty order directing CBP to assess, upon further instruction by Commerce, antidumping duties on all imports of the subject merchandise entered, or withdrawn from warehouse, for consumption on or after the effective date of the suspension of liquidation, as discussed above in the “Continuation of Suspension of Liquidation” section.
This notice serves as a reminder to parties subject to an administrative protective order (APO) of their responsibility concerning the disposition of proprietary information disclosed under APO in accordance with 19 CFR 351.305(a)(3). Timely written notification of return or destruction of APO materials, or conversion to judicial protective order, is hereby requested. Failure to comply with the regulations and the terms of an APO is a sanctionable violation.
This determination and this notice are issued and published pursuant to sections 735(d) and 777(i)(1) of the Act and 19 CFR 351.210(c).
The merchandise covered by this investigation is welded carbon and alloy steel pipe (including stainless steel pipe), more than 406.4 mm (16 inches) in nominal outside diameter (large diameter welded pipe), regardless of wall thickness, length, surface finish, grade, end finish, or stenciling. Large diameter welded pipe may be used to transport oil, gas, slurry, steam, or other fluids, liquids, or gases. It may also be used for structural purposes, including, but not limited to, piling. Specifically, not included is large diameter welded pipe produced only to specifications of the American Water Works Association (AWWA) for water and sewage pipe.
Large diameter welded pipe used to transport oil, gas, or natural gas liquids is normally produced to the American Petroleum Institute (API) specification 5L. Large diameter welded pipe may also be produced to American Society for Testing and Materials (ASTM) standards A500, A252, or A53, or other relevant domestic specifications, grades and/or standards. Large diameter welded pipe can be produced to comparable foreign specifications, grades and/or standards or to proprietary specifications, grades and/or standards, or can be non-graded material. All pipe meeting the physical description set forth above is covered by the scope of this investigation, whether or not produced according to a particular standard.
Subject merchandise also includes large diameter welded pipe that has been further processed in a third country, including but not limited to coating, painting, notching, beveling, cutting, punching, welding, or any other processing that would not otherwise remove the merchandise from the scope of the investigation if performed in the country of manufacture of the in-scope large diameter welded pipe.
Excluded from the scope are any products covered by the existing antidumping duty order on welded line pipe from the Republic of Turkey.
The large diameter welded pipe that is subject to this investigation is currently classifiable in the Harmonized Tariff Schedule of the United States (HTSUS) under subheadings 7305.11.1030, 7305.11.1060, 7305.11.5000, 7305.12.1030, 7305.12.1060, 7305.12.5000, 7305.19.1030, 7305.19.1060, 7305.19.5000, 7305.31.4000, 7305.31.6010, 7305.31.6090, 7305.39.1000 and 7305.39.5000. While the HTSUS subheadings are provided for convenience and customs purposes, the written description of the scope of this investigation is dispositive.
Enforcement and Compliance, International Trade Administration, Department of Commerce.
The Department of Commerce (Commerce) determines that imports of large diameter welded pipe (welded pipe) from Greece are being, or are likely to be, sold in the United States at less than fair value (LTFV) for the period of investigation (POI) January 1, 2017, through December 31, 2017.
Applicable February 27, 2019.
Brittany Bauer, AD/CVD Operations, Office II, Enforcement and Compliance, International Trade Administration, U.S. Department of Commerce, 1401 Constitution Avenue NW, Washington, DC 20230; telephone: (202) 482-3860.
On August 27, 2018, Commerce published in the
Commerce exercised its discretion to toll all deadlines affected by the partial federal government closure from December 22, 2018, through the resumption of operations on January 29, 2019.
The product covered by this investigation is welded pipe from Greece. For a full description of the scope of this investigation,
During the course of this investigation and the concurrent LTFV investigations of welded pipe from Canada, the Republic of Korea (Korea), the People's Republic of China (China), and the Republic of Turkey (Turkey), and the concurrent countervailing duty investigations of welded pipe from China, India, Korea, and Turkey, Commerce received scope comments from interested parties. Commerce issued a Preliminary Scope Decision Memorandum
All issues raised in the case and rebuttal briefs submitted by parties in this investigation are addressed in the Issues and Decision Memorandum accompanying this notice. A list of the issues addressed in the Issues and Decision Memorandum is attached to this notice as Appendix II. The Issues and Decision Memorandum is a public document and is on file electronically via Enforcement and Compliance's Antidumping and Countervailing Duty Centralized Electronic Service System (ACCESS). ACCESS is available to registered users at
As provided in section 782(i) of the Tariff Act of 1930, as amended, (the Act) from September to October 2018, we conducted verification of the sales and cost information submitted by Corinth Pipeworks Pipe Industry S.A. (Corinth) for use in our final determination. We used standard verification procedures, including an examination of relevant accounting and production records, and original source documents provided by Corinth.
Based on our analysis of the comments received and our findings at verification, we made certain changes to the margin calculations for the respondent. For a discussion of these changes,
Section 735(c)(5)(A) of the Act provides that the estimated weighted-average dumping margin for all-other producers and exporters not individually investigated shall be equal to the weighted average of the estimated weighted-average dumping margins established for exporters and producers individually investigated excluding rates that are zero,
The final estimated weighted-average dumping margins are as follows:
We intend to disclose the calculations performed in this final determination within five days of the date of publication of this notice to parties in this proceeding in accordance with 19 CFR 351.224(b).
In accordance with section 735(c)(1)(B) of the Act, for this final determination, we will direct U.S. Customs and Border Protection (CBP) to continue to suspend liquidation of all entries of welded pipe, as described in Appendix I of this notice, which are entered, or withdrawn from warehouse,
Pursuant to section 735(c)(1)(B)(ii) of the Act and 19 CFR 351.210(d), we will instruct CBP to require a cash deposit for such entries of merchandise equal to the estimated weighted-average dumping margin as follows: (1) The cash deposit rate for the respondents listed above will be equal to the respondent-specific estimated weighted-average dumping margin determined in this final determination; (2) if the exporter is not a respondent identified above but the producer is, then the cash deposit rate will be equal to the respondent-specific estimated weighted-average dumping margin established for that producer of the subject merchandise; and (3) the cash deposit rate for all other producers and exporters will be equal to the all-others estimated weighted-average dumping margin. These suspension of liquidation instructions will remain in effect until further notice.
In accordance with section 735(d) of the Act, we will notify the International Trade Commission (ITC) of the final affirmative determination of sales at LTFV. In addition, we are making available to the ITC all non-privileged and non-proprietary information related to this investigation. We will allow the ITC access to all privileged and business proprietary information in our files, provided the ITC confirms that it will not disclose such information, either publicly or under an administrative protective order (APO), without the written consent of the Assistant Secretary for Enforcement and Compliance. Because Commerce's final determination is affirmative, in accordance with section 735(b)(2) of the Act, the ITC will make its final determination as to whether the domestic industry in the United States is materially injured, or threatened with material injury, by reason of imports, or sales (or the likelihood of sales) for importation of welded pipe from Greece no later than 45 days after this final determination. If the ITC determines that such injury does not exist, this proceeding will be terminated and all cash deposits will be refunded. If the ITC determines that such injury does exist, Commerce will issue an antidumping duty order directing CBP to assess, upon further instruction by Commerce, antidumping duties on all imports of the subject merchandise entered, or withdrawn from warehouse, for consumption on or after the effective date of the suspension of liquidation, as discussed above in the “Continuation of Suspension of Liquidation” section.
This notice serves as a reminder to parties subject to an administrative protective order (APO) of their responsibility concerning the disposition of proprietary information disclosed under APO in accordance with 19 CFR 351.305(a)(3). Timely written notification of return or destruction of APO materials, or conversion to judicial protective order, is hereby requested. Failure to comply with the regulations and the terms of an APO is a sanctionable violation.
This determination and this notice are issued and published pursuant to sections 735(d) and 777(i)(1) of the Act and 19 CFR 351.210(c).
The merchandise covered by this investigation is welded carbon and alloy steel pipe (including stainless steel pipe), more than 406.4 mm (16 inches) in nominal outside diameter (large diameter welded pipe), regardless of wall thickness, length, surface finish, grade, end finish, or stenciling. Large diameter welded pipe may be used to transport oil, gas, slurry, steam, or other fluids, liquids, or gases. It may also be used for structural purposes, including, but not limited to, piling. Specifically, not included is large diameter welded pipe produced only to specifications of the American Water Works Association (AWWA) for water and sewage pipe.
Large diameter welded pipe used to transport oil, gas, or natural gas liquids is normally produced to the American Petroleum Institute (API) specification 5L. Large diameter welded pipe may also be produced to American Society for Testing and Materials (ASTM) standards A500, A252, or A53, or other relevant domestic specifications, grades and/or standards. Large diameter welded pipe can be produced to comparable foreign specifications, grades and/or standards or to proprietary specifications, grades and/or standards, or can be non-graded material. All pipe meeting the physical description set forth above is covered by the scope of this investigation, whether or not produced according to a particular standard.
Subject merchandise also includes large diameter welded pipe that has been further processed in a third country, including but not limited to coating, painting, notching, beveling, cutting, punching, welding, or any other processing that would not otherwise remove the merchandise from the scope of the investigation if performed in the country of manufacture of the in-scope large diameter welded pipe.
The large diameter welded pipe that is subject to this investigation is currently classifiable in the Harmonized Tariff Schedule of the United States (HTSUS) under subheadings 7305.11.1030, 7305.11.1060, 7305.11.5000, 7305.12.1030, 7305.12.1060, 7305.12.5000, 7305.19.1030, 7305.19.1060, 7305.19.5000, 7305.31.4000, 7305.31.6010, 7305.31.6090, 7305.39.1000 and 7305.39.5000. While the HTSUS subheadings are provided for convenience and customs purposes, the written description of the scope of this investigation is dispositive.
This is a decision pursuant to Section 6(c) of the Educational, Scientific, and Cultural Materials Importation Act of 1966 (Pub. L. 89-651, as amended by Pub. L. 106-36; 80 Stat. 897; 15 CFR part 301). Related records can be viewed between 8:30 a.m. and 5:00 p.m. in Room 3720, U.S. Department of Commerce, 14th and Constitution Ave. NW, Washington, DC
Docket Number: 18-006. Applicant: Fermi Research Alliance, LLC., Batavia, IL 60510. Instrument: Short Baseline Near Detector (SBND) Liquid Argon Time Projection Chamber (LArTPC). Manufacturer: The Scientific Facilities Research Council (STFC), United Kingdom. Intended Use: See notice at 83 FR 62838, December 6, 2018. Comments: None received. Decision: Approved. We know of no instruments of equivalent scientific value to the foreign instruments described below, for
Docket Number: 18-008. Applicant: Lawrence Berkeley National Laboratory, Berkeley, CA 94720. Instrument: In Vacuum Insertion Device (aka Undulator). Manufacturer: Hitachi Metals America, LLC, Japan. Intended Use: See notice at 83 FR 62838, December 6, 2018. Comments: None received. Decision: Approved. We know of no instruments of equivalent scientific value to the foreign instruments described below, for such purposes as this is intended to be used, that was being manufactured in the United States at the time of order. Reasons: The instrument will be installed in Sector 2.0 of the Advanced Light Source (ALS) facility at Lawrence Berkeley Laboratory, for use as a high brightness beamline source for the sector. Sector 2.0 of the ALS is dedicated to the study and analysis of protein crystallography. The objectives pursued are to determine the atomic-resolution, three-dimensional structures of proteins and nucleic acids-the building blocks of life-as well as complexes of these molecules, the interactions of which give rise to biological processes. Justification for Duty-Free Entry: There are no instruments of the same general category manufactured in the United States.
Enforcement and Compliance, International Trade Administration, Department of Commerce.
The Department of Commerce (Commerce) determines that countervailable subsidies are being provided to producers and exporters of large diameter welded pipe (welded pipe) from the Republic of Turkey (Turkey).
Applicable February 27, 2019.
Ross Belliveau or Ajay Menon, AD/CVD Operations, Office II, Enforcement and Compliance, International Trade Administration, U.S. Department of Commerce, 1401 Constitution Avenue NW, Washington, DC 20230; telephone: (202) 482-4952, or (202) 482-1993, respectively.
The petitioners in this investigation are American Cast Iron Pipe Company, Berg Steel Pipe Corp./Berg Spiral Pipe Corp, Dura-Bond Industries, Skyline Steel, Stupp Corporation, Greens Bayou Pipe Mill, LP, JSW Steel (USA) Inc., and Trinity Products LLC (collectively, the petitioners). In addition to the Government of Turkey, the mandatory respondents in this investigation are Borusan Mannesmann Boru Sanayi ve Ticaret A.S. (Borusan) and HDM Celik Boru Sanayi ve Ticaret A.S. (HDM Celik).
The events that occurred since Commerce published the
Commerce exercised its discretion to toll all deadlines affected by the partial federal government closure from December 22, 2018, through the resumption of operations on January 29, 2019.
The period of investigation is January 1, 2017, through December 31, 2017.
The scope of the investigation is welded pipe from Turkey. For a complete description of the scope of the investigation,
During the course of this investigation and the concurrent less-than-fair-value investigations of large diameter welded pipe from Canada, Greece, Korea, the People's Republic of China (China), and Turkey, and the concurrent countervailing duty (CVD) investigations of large diameter welded pipe from China, India, Korea, and Turkey, Commerce received scope comments from interested parties. Commerce issued a Preliminary Scope Decision Memorandum to address these comments.
The subsidy programs under investigation and the issues raised in the case and rebuttal briefs by parties in this investigation are discussed in the Issues and Decision Memorandum. A list of the issues that parties raised, and to which we responded in the Issues and Decision Memorandum, is attached to this notice as Appendix II.
Commerce conducted this investigation in accordance with section 701 of the Tariff Act of 1930, as amended (the Act). For each of the subsidy programs found countervailable, Commerce determines that there is a subsidy,
As provided in section 782(i) of the Tariff Act of 1930, as amended (the Act), during July 2018, Commerce verified the subsidy information reported by the Government of Turkey, Borusan, and HDM Celik. We used standard verification procedures, including an examination of relevant accounting records and original source documents provided by the respondents.
Based on our review and analysis of the comments received from parties and corrections presented at verification, we made certain changes to the respondents' subsidy rate calculations. As a result of these changes, Commerce has also revised the “all-others” rate. For a discussion of these changes,
In accordance with section 705(c)(1)(B)(i)(I) of the Act, we calculated a rate for Borusan and HDM Celik. Section 705(c)(5)(A)(i) of the Act states that, for companies not individually investigated, we will determine an “all others” rate equal to the weighted-average countervailable subsidy rates established for exporters and producers individually investigated, excluding any zero and
Commerce determines the total estimated net countervailable subsidy rates to be:
Commerce will
As a result of our
If the U.S. International Trade Commission (ITC) issues a final affirmative injury determination, we will issue a CVD order, reinstate the suspension of liquidation under section 706(a) of the Act, and require a cash deposit of estimated countervailing duties for such entries of subject merchandise in the amounts indicated above. If the ITC determines that material injury, or threat of material injury, does not exist, this proceeding will be terminated and all estimated duties deposited or securities posted as a result of the suspension of liquidation will be refunded or canceled.
In accordance with section 705(d) of the Act, we will notify the ITC of our determination. In addition, we are making available to the ITC all non-privileged and non-proprietary information related to this investigation. We will allow the ITC access to all privileged and business proprietary information in our files, provided the ITC confirms that it will not disclose such information, either publicly or under an administrative protective order (APO), without the written consent of the Assistant Secretary for Enforcement and Compliance.
Because the final determination in this proceeding is affirmative, in accordance with section 705(b) of the Act, the ITC will make its final determination as to whether the domestic industry in the United States is materially injured, or threatened with material injury, by reason of imports of welded pipe from Turkey no later than 45 days after our final determination. If
In the event that the ITC issues a final negative injury determination, this notice will serve as the only reminder to parties subject to the APO of their responsibility concerning the destruction of proprietary information disclosed under APO in accordance with 19 CFR 351.305(a)(3). Timely written notification of the return/destruction of APO materials or conversion to judicial protective order is hereby requested. Failure to comply with the regulations and terms of an APO is a violation which is subject to sanction.
This determination is issued and published pursuant to sections 705(d) and 777(i) of the Act.
The merchandise covered by this investigation is welded carbon and alloy steel pipe (including stainless steel pipe), more than 406.4 mm (16 inches) in nominal outside diameter (large diameter welded pipe), regardless of wall thickness, length, surface finish, grade, end finish, or stenciling. Large diameter welded pipe may be used to transport oil, gas, slurry, steam, or other fluids, liquids, or gases. It may also be used for structural purposes, including, but not limited to, piling. Specifically, not included is large diameter welded pipe produced only to specifications of the American Water Works Association (AWWA) for water and sewage pipe.
Large diameter welded pipe used to transport oil, gas, or natural gas liquids is normally produced to the American Petroleum Institute (API) specification 5L. Large diameter welded pipe may also be produced to American Society for Testing and Materials (ASTM) standards A500, A252, or A53, or other relevant domestic specifications, grades and/or standards. Large diameter welded pipe can be produced to comparable foreign specifications, grades and/or standards or to proprietary specifications, grades and/or standards, or can be non-graded material. All pipe meeting the physical description set forth above is covered by the scope of this investigation, whether or not produced according to a particular standard.
Subject merchandise also includes large diameter welded pipe that has been further processed in a third country, including but not limited to coating, painting, notching, beveling, cutting, punching, welding, or any other processing that would not otherwise remove the merchandise from the scope of the investigation if performed in the country of manufacture of the in-scope large diameter welded pipe.
Excluded from the scope are any products covered by the existing countervailing duty order on welded line pipe from the Republic of Turkey.
The large diameter welded pipe that is subject to this investigation is currently classifiable in the Harmonized Tariff Schedule of the United States (HTSUS) under subheadings 7305.11.1030, 7305.11.1060, 7305.11.5000, 7305.12.1030, 7305.12.1060, 7305.12.5000, 7305.19.1030, 7305.19.1060, 7305.19.5000, 7305.31.4000, 7305.31.6010, 7305.31.6090, 7305.39.1000 and 7305.39.5000. While the HTSUS subheadings are provided for convenience and customs purposes, the written description of the scope of this investigation is dispositive.
Enforcement and Compliance, International Trade Administration, Department of Commerce.
The Department of Commerce (Commerce) determines that countervailable subsidies are being provided to producers and exporters of large diameter welded pipe (welded pipe) from the Republic of Korea (Korea). For information on the estimated subsidy rates, see the “Final Determination” section of this notice.
Applicable February 27, 2019.
George Ayache or Robert Palmer, AD/CVD Operations, Office VIII, Enforcement and Compliance, International Trade Administration, U.S. Department of Commerce, 1401 Constitution Avenue NW, Washington, DC 20230; telephone: (202) 482-2623 or (202) 482-9068, respectively.
The petitioners in this investigation are American Cast Iron Pipe Company, Berg Steel Pipe Corp./Berg Spiral Pipe Corp, Dura-Bond Industries, Skyline Steel, Stupp Corporation, Greens Bayou Pipe Mill, LP, JSW Steel (USA) Inc., and Trinity Products LLC (collectively, the petitioners). In addition to the Government of Korea (GOK), the mandatory respondents in this investigation are Husteel Co., Ltd. (Husteel), Hyundai Steel Company (Hyundai Steel), and SeAH Steel Corporation (SeAH Steel).
The events that occurred since Commerce published the Preliminary Determination
Commerce exercised its discretion to toll all deadlines affected by the partial federal government closure from December 22, 2018, through the resumption of operations on January 29, 2019.
The period of investigation is January 1, 2017, through December 31, 2017.
The product covered by this investigation is welded pipe from Korea. For a full description of the scope of this investigation, see the “Scope of the Investigation” in Appendix I of this notice.
During the course of this investigation and the concurrent less-than-fair-value investigations of large diameter welded pipe from Canada, Greece, Korea, the People's Republic of China (China) and Turkey, and the concurrent countervailing duty (CVD) investigations of large diameter welded pipe from China, India, Korea and Turkey, Commerce received scope comments from interested parties. Commerce issued a Preliminary Scope Decision Memorandum
The subsidy programs under investigation and the issues raised in the case and rebuttal briefs by parties in this investigation are discussed in the Issues and Decision Memorandum. A list of the issues that parties raised, and to which we responded in the Issues and Decision Memorandum, is attached to this notice at Appendix II.
Commerce conducted this investigation in accordance with section 701 of the Tariff Act of 1930, as amended (the Act). For each of the subsidy programs found countervailable, Commerce determines that there is a subsidy,
In making these findings, Commerce relied, in part, on facts available. Further, because one or more respondents did not act to the best of their ability to respond to Commerce's requests for information, an adverse inference was drawn, where appropriate, in selecting from among the facts otherwise available.
As provided in section 782(i) of the Act, during September 2018, Commerce verified the subsidy information reported by the GOK, Husteel, Hyundai Steel, and SeAH Steel. We used standard verification procedures, including an examination of relevant accounting records and original source documents provided by the respondents.
Based on our review and analysis of the comments received from parties, verification, and the minor corrections presented at verification, we made certain changes to the respondents' subsidy rate calculations. As a result of these changes, Commerce has also revised the “all-others” rate. For a discussion of these changes, see the Issues and Decision Memorandum.
In accordance with section 705(c)(l)(B)(i) of the Act, we calculated a rate for Husteel and Hyundai Steel, two producers/exporters of subject merchandise selected for individual examination in this investigation. Commerce assigned a rate based entirely on facts otherwise available with adverse inferences pursuant to section 776 of the Act to SeAH Steel.
Section 705(c)(5)(A) of the Act provides that in the final determination, Commerce shall determine an estimated all-others rate for companies not individually examined. This rate shall be an amount equal to the weighted average of the estimated subsidy rates established for those companies individually examined, excluding any zero and
Commerce determines the total estimated net countervailable subsidy rates to be:
Commerce will disclose the calculations performed within five days of the date of publication of this notice to parties in this proceeding in accordance with 19 CFR 351.224(b).
As a result of our
If the U.S. International Trade Commission (ITC) issues a final affirmative injury determination, we will issue a CVD order, reinstate the suspension of liquidation under section 706(a) of the Act, and require a cash deposit of estimated countervailing duties for such entries of subject merchandise in the amounts indicated above. If the ITC determines that material injury, or threat of material injury, does not exist, this proceeding will be terminated and all estimated duties deposited or securities posted as a result of the suspension of liquidation will be refunded or canceled.
In accordance with section 705(d) of the Act, Commerce will notify the ITC of its determination. In addition, we are making available to the ITC all non-privileged and non-proprietary information related to this investigation. We will allow the ITC access to all privileged and business proprietary information in our files, provided the ITC confirms that it will not disclose such information, either publicly or under an administrative protective order (APO), without the written consent of the Assistant Secretary for Enforcement and Compliance.
Because the final determination in this proceeding is affirmative, in accordance with section 705(b) of the Act, the ITC will make its final determination as to whether the domestic industry in the United States is materially injured, or threatened with material injury, by reason of imports of welded pipe from Korea no later than 45 days after our final determination. If the ITC determines that material injury or threat of material injury does not exist, the proceeding will be terminated and all cash deposits will be refunded. If the ITC determines that such injury does exist, Commerce will issue a CVD order directing CBP to assess, upon further instruction by Commerce, countervailing duties on all imports of the subject merchandise, other than those produced and exported by Husteel and Hyundai Steel because their rates are
In the event that the ITC issues a final negative injury determination, this notice will serve as the only reminder to parties subject to an APO of their responsibility concerning the destruction of proprietary information disclosed under APO in accordance with 19 CFR 351.305(a)(3). Timely written notification of the return/destruction of APO materials or conversion to judicial protective order is hereby requested. Failure to comply with the regulations and terms of an APO is a violation which is subject to sanction.
This determination is issued and published pursuant to sections 705(d) and 777(i) of the Act.
The merchandise covered by this investigation is welded carbon and alloy steel pipe (including stainless steel pipe), more than 406.4 mm (16 inches) in nominal outside diameter (large diameter welded pipe), regardless of wall thickness, length, surface finish, grade, end finish, or stenciling. Large diameter welded pipe may be used to transport oil, gas, slurry, steam, or other fluids, liquids, or gases. It may also be used for structural purposes, including, but not limited to, piling. Specifically, not included is large diameter welded pipe produced only to specifications of the American Water Works Association (AWWA) for water and sewage pipe.
Large diameter welded pipe used to transport oil, gas, or natural gas liquids is normally produced to the American Petroleum Institute (API) specification 5L. Large diameter welded pipe may also be produced to American Society for Testing and Materials (ASTM) standards A500, A252, or A53, or other relevant domestic specifications, grades and/or standards. Large diameter welded pipe can be produced to comparable foreign specifications, grades and/or standards or to proprietary specifications, grades and/or standards, or can be non-graded material. All pipe meeting the physical description set forth above is covered by the scope of this investigation, whether or not produced according to a particular standard.
Subject merchandise also includes large diameter welded pipe that has been further processed in a third country, including but not limited to coating, painting, notching, beveling, cutting, punching, welding, or any other processing that would not otherwise remove the merchandise from the scope of the investigation if performed in the country of manufacture of the in-scope large diameter welded pipe.
The large diameter welded pipe that is subject to this investigation is currently classifiable in the Harmonized Tariff Schedule of the United States (HTSUS) under
Enforcement and Compliance, International Trade Administration, Department of Commerce.
The Department of Commerce (Commerce) preliminary determines that sales of certain carbon and alloy steel cut-to-length plate (CTL plate) from the Federal Republic of Germany (Germany) were made at less than normal value during the period of review (POR), November 14, 2016, through April 30, 2018. We invite interested parties to comment on these preliminary results.
Applicable February 27, 2019.
David Goldberger or Ross Belliveau, AD/CVD Operations, Office II, Enforcement and Compliance, International Trade Administration, U.S. Department of Commerce, 1401 Constitution Avenue NW, Washington, DC 20230; telephone: (202) 482-4136 or (202) 482-4952, respectively.
The products covered by the order are certain carbon and alloy steel hot-rolled or forged flat plate products not in coils, whether or not painted, varnished, or coated with plastics or other non-metallic substances from Germany. Products subject to the order are currently classified in the Harmonized Tariff Schedule of the United States (HTSUS) under item numbers: 7208.40.3030, 7208.40.3060, 7208.51.0030, 7208.51.0045, 7208.51.0060, 7208.52.0000, 7211.13.0000, 7211.14.0030, 7211.14.0045, 7225.40.1110, 7225.40.1180, 7225.40.3005, 7225.40.3050, 7226.20.0000, and 7226.91.5000. Although the HTSUS subheadings are provided for convenience and customs purposes, the written description of the merchandise subject to this scope is dispositive.
Commerce is conducting this review in accordance with sections 751(a)(1)(B) and (2) of the Tariff Act of 1930, as amended (the Act). Pursuant to sections 776(a) and (b) of the Act, Commerce preliminarily relied upon the facts otherwise available with adverse inferences (AFA) to determine the margin for Ilsenburger Grobblech GmbH, Salzgitter Mannesmann Grobblech GmbH, Salzgitter Flachstahl GmbH, and Salzgitter Mannesmann International GmbH (collectively, Salzgitter), the sole remaining mandatory respondent selected for review, because Salzgitter did not respond to Commerce's questionnaire in this administrative review. For a complete explanation of the methodology and analysis underlying our preliminary application of AFA to Salzgitter,
On October 22, 2018, the petitioners
As a result of this review, Commerce preliminarily determines that a dumping margin of 174.03 percent exists for Salzgitter for the period November 14, 2016, through April 30, 2018.
Normally, Commerce discloses to interested parties the calculations performed in connection with the preliminary results within five days of the date of publication of the notice of preliminary results in the
Case briefs or other written comments may be submitted to the Assistant Secretary for Enforcement and Compliance no later than 30 days after the date of publication of this notice. Rebuttal briefs, limited to issues raised in case briefs, may be submitted no later than five days after the deadline date for case briefs.
Pursuant to 19 CFR 351.310(c), interested parties who wish to request a hearing must submit a written request to the Assistant Secretary for Enforcement and Compliance, U.S. Department of Commerce within 30 days after the date of publication of this notice. Requests should contain: (1) The party's name, address, and telephone number; (2) the number of participants; (3) whether any participant is a foreign national; and (4) a list of issues parties intend to discuss. Issues raised in the hearing will be limited to those raised in the respective case and rebuttal briefs. If a request for a hearing is made, Commerce intends to hold the hearing at the U.S. Department of Commerce, 1401 Constitution Avenue NW, Washington, DC 20230, at a time and date to be determined.
All submissions, with limited exceptions, must be filed electronically using ACCESS. An electronically filed document must be received successfully in its entirety by 5 p.m. Eastern Time (ET) on the respective due date. Documents excepted from the electronic submission requirements must be filed manually (
Commerce intends to issue the final results of this administrative review, including the results of its analysis of issues raised in any written briefs, not later than 120 days after the date of publication of this notice, unless the deadline is extended.
Upon issuance of the final results, Commerce shall determine, and U.S. Customs and Border Protection (CBP) shall assess, antidumping duties on all appropriate entries covered by this review.
The following cash deposit requirements will be effective for all shipments of the subject merchandise entered, or withdrawn from warehouse, for consumption on or after the publication date of the final results of this administrative review, as provided by section 751(a)(2)(C) of the Act: (1) The cash deposit rate for Salzgitter will be the rate established in the final results of this review; (2) for previously reviewed or investigated companies not participating in this review, the cash deposit rate will continue to be the company-specific rate published for the most recently-completed segment of this proceeding in which the company was reviewed; (3) if the exporter is not a firm covered in this review, a prior review, or the less-than-fair-value (LTFV) investigation, but the manufacturer is, the cash deposit rate will be the rate established for the most recently-completed segment of this proceeding for the producer of subject merchandise; and (4) the cash deposit rate for all other manufacturers or exporters will continue to be 21.04 percent, the “all others” rate established in the investigation.
This notice also serves as a preliminary reminder to importers of their responsibility under 19 CFR 351.402(f) to file a certificate regarding the reimbursement of antidumping duties prior to liquidation of the relevant entries during this review period. Failure to comply with this requirement could result in the Secretary's presumption that reimbursement of antidumping duties occurred and the subsequent assessment of double antidumping duties.
We are issuing and publishing these results in accordance with sections 751(a)(1) and 777(i)(1) of the Act, and 19 CFR 351.221(b)(4).
Enforcement and Compliance, International Trade Administration, Department of Commerce.
The Department of Commerce (Commerce) determines that large diameter welded pipe (welded pipe) from the Republic of Korea (Korea) is being, or is likely to be, sold in the United States at less than fair value (LTFV) for the period of investigation (POI) January 1, 2017, through December 31, 2017.
Applicable February 27, 2019.
Sergio Balbontin, or Jesus Saenz, AD/CVD Operations, Office VIII, Enforcement and Compliance, International Trade Administration, U.S. Department of Commerce, 1401 Constitution Avenue NW, Washington, DC 20230; telephone: (202) 482-6478 or (202) 482-8184.
On August 27, 2018, Commerce published in the
Commerce exercised its discretion to toll all deadlines affected by the partial federal government closure from December 22, 2018, through the resumption of operations on January 29, 2019.
The product covered by this investigation is welded pipe from Korea. For a full description of the scope of this investigation,
During the course of this investigation and the concurrent LTFV investigations of welded pipe from Canada, Greece, India, the People's Republic of China and the Republic of Turkey (Turkey), and the concurrent countervailing duty investigations of welded pipe from China, India, Korea and Turkey, Commerce received scope comments from interested parties. Commerce issued a Preliminary Scope Decision Memorandum
All issues raised in the case and rebuttal briefs submitted by parties in this investigation are addressed in the Issues and Decision Memorandum accompanying this notice. A list of the issues addressed in the Issues and Decision Memorandum is attached to this notice as Appendix II. The Issues and Decision Memorandum is a public document and is on file electronically via Enforcement and Compliance's Antidumping and Countervailing Duty Centralized Electronic Service System (ACCESS). ACCESS is available to registered users at
As provided in section 782(i) of the Tariff Act of 1930, as amended, (the Act), from September to October 2018, we conducted verification of the sales and cost information submitted by Hyundai RB Co., Ltd. (Hyundai RB) and SeAH Steel Corporation (SeAH) for use in our final determination. We used standard verification procedures, including an examination of relevant accounting and production records, and original source documents provided by Hyundai RB and SeAH.
Based on our analysis of the comments received and our findings at verification, we made certain changes to the margin calculations for Hyundai RB and SeAH. For a discussion of these changes,
The respondent Samkang M&T Co., Ltd (SKMT) failed to cooperate in this investigation. Therefore, in the
Section 735(c)(5)(A) of the Act provides that the estimated weighted-average dumping margin for all-other producers and exporters not individually investigated shall be equal to the weighted average of the estimated weighted-average dumping margins established for exporters and producers individually investigated excluding rates that are zero,
The final estimated weighted-average dumping margins are as follows:
We intend to disclose the calculations performed in this final determination within five days of the date of publication of this notice to parties in this proceeding in accordance with 19 CFR 351.224(b).
In accordance with section 735(c)(1)(B) of the Act, for this final determination, we will direct U.S. Customs and Border Protection (CBP) to continue to suspend liquidation of all entries of welded pipe, as described in Appendix I of this notice, which are entered, or withdrawn from warehouse, for consumption on or after August 27, 2018, the date of publication in the
Pursuant to section 735(c)(1)(B)(ii) of the Act and 19 CFR 351.210(d), we will instruct CBP to require a cash deposit for such entries of merchandise equal to the estimated weighted-average dumping margin as follows: (1) The cash deposit rate for the respondents listed above will be equal to the respondent-specific estimated weighted-average dumping margin determined in this final determination; (2) if the exporter is not a respondent identified above but the producer is, then the cash deposit rate will be equal to the respondent-specific estimated weighted-average dumping margin established for that producer of the subject merchandise; and (3) the cash deposit rate for all other producers and exporters will be equal to the all-others estimated weighted-average dumping margin. These suspension-of-liquidation instructions will remain in effect until further notice.
Further, we will instruct CBP to require a cash deposit equal to the estimated amount by which the normal value exceeds the U.S. price as shown above, adjusted where appropriate, for export subsidies found in the final determination of the companion countervailing duty investigation.
Therefore, in the event that a countervailing duty order is issued and suspension of liquidation is resumed in the companion countervailing duty investigation on welded pipe from Korea, Commerce will instruct CBP to require cash deposits adjusted by the amount of export subsidies, as appropriate. These adjustments are reflected in the final column of the rate chart, above. Until such suspension of liquidation is resumed in the companion countervailing duty investigation, and so long as suspension of liquidation continues under this antidumping duty investigation, the cash deposit rates for this antidumping
In accordance with section 735(d) of the Act, we will notify the International Trade Commission (ITC) of the final affirmative determination of sales at LTFV. In addition, we are making available to the ITC all non-privileged and non-proprietary information related to this investigation. We will allow the ITC access to all privileged and business proprietary information in our files, provided the ITC confirms that it will not disclose such information, either publicly or under an administrative protective order (APO), without the written consent of the Assistant Secretary for Enforcement and Compliance. Because Commerce's final determination is affirmative, in accordance with section 735(b)(2) of the Act, the ITC will make its final determination as to whether the domestic industry in the United States is materially injured, or threatened with material injury, by reason of imports, or sales (or the likelihood of sales) for importation of welded pipe from Korea no later than 45 days after this final determination. If the ITC determines that such injury does not exist, this proceeding will be terminated and all cash deposits will be refunded. If the ITC determines that such injury does exist, Commerce will issue an antidumping duty order directing CBP to assess, upon further instruction by Commerce, antidumping duties on all imports of the subject merchandise entered, or withdrawn from warehouse, for consumption on or after the effective date of the suspension of liquidation, as discussed above in the “Continuation of Suspension of Liquidation” section.
This notice serves as a reminder to parties subject to an administrative protective order (APO) of their responsibility concerning the disposition of proprietary information disclosed under APO in accordance with 19 CFR 351.305(a)(3). Timely written notification of return or destruction of APO materials, or conversion to judicial protective order, is hereby requested. Failure to comply with the regulations and the terms of an APO is a sanctionable violation.
This determination and this notice are issued and published pursuant to sections 735(d) and 777(i)(1) of the Act and 19 CFR 351.210(c).
The merchandise covered by this investigation is welded carbon and alloy steel pipe (including stainless steel pipe), more than 406.4 mm (16 inches) in nominal outside diameter (large diameter welded pipe), regardless of wall thickness, length, surface finish, grade, end finish, or stenciling. Large diameter welded pipe may be used to transport oil, gas, slurry, steam, or other fluids, liquids, or gases. It may also be used for structural purposes, including, but not limited to, piling. Specifically, not included is large diameter welded pipe produced only to specifications of the American Water Works Association (AWWA) for water and sewage pipe.
Large diameter welded pipe used to transport oil, gas, or natural gas liquids is normally produced to the American Petroleum Institute (API) specification 5L. Large diameter welded pipe may also be produced to American Society for Testing and Materials (ASTM) standards A500, A252, or A53, or other relevant domestic specifications, grades and/or standards. Large diameter welded pipe can be produced to comparable foreign specifications, grades and/or standards or to proprietary specifications, grades and/or standards, or can be non-graded material. All pipe meeting the physical description set forth above is covered by the scope of this investigation, whether or not produced according to a particular standard.
Subject merchandise also includes large diameter welded pipe that has been further processed in a third country, including but not limited to coating, painting, notching, beveling, cutting, punching, welding, or any other processing that would not otherwise remove the merchandise from the scope of the investigation if performed in the country of manufacture of the in-scope large diameter welded pipe.
Excluded from the scope are any products covered by the existing antidumping duty order on welded line pipe from the Republic of Korea.
The large diameter welded pipe that is subject to this investigation is currently classifiable in the Harmonized Tariff Schedule of the United States (HTSUS) under subheadings 7305.11.1030, 7305.11.1060, 7305.11.5000, 7305.12.1030, 7305.12.1060, 7305.12.5000, 7305.19.1030, 7305.19.1060, 7305.19.5000, 7305.31.4000, 7305.31.6010, 7305.31.6090, 7305.39.1000 and 7305.39.5000. While the HTSUS subheadings are provided for convenience and customs purposes, the written description of the scope of this investigation is dispositive.
Notice of issuance of an Export Trade Certificate of Review to Alaska Groundfish Commission (“AGC”), Application Number 18-00002.
The Secretary of Commerce, through the Office of Trade and Economic Analysis (“OTEA”), issued an
Joseph Flynn, Director, OTEA, International Trade Administration, by telephone at (202) 482-5131 (this is not a toll-free number) or email at
Title III of the Export Trading Company Act of 1982 (15 U.S.C. 4001-21) (“the Act”) authorizes the Secretary of Commerce to issue Export Trade Certificates of Review. An Export Trade Certificate of Review protects the holder and the members identified in the Certificate from State and Federal government antitrust actions and from private treble damage antitrust actions for the export conduct specified in the Certificate and carried out in compliance with its terms and conditions. The regulations implementing Title III are found at 15 CFR part 325 (2018). OTEA is issuing this notice pursuant to 15 CFR 325.6(b), which requires the Secretary of Commerce to publish a summary of the certification in the
A summary of AGC's Export Trade Certificate of Review follows.
To engage in Export Trade in the Export Markets, AGC and its Members may undertake the following activities:
1. Each Member will from time to time independently determine in its sole discretion (i) the quantity of Export Product that it makes available for sale in Export Markets, and (ii) whether any portion of such quantity will be sold independently by it, be sold in cooperation with some or all of the other Members, or be made available to AGC for sale in Export Markets. AGC may not require any Member to export any minimum quantity of Export Product.
2. AGC and/or its Members may enter into agreements to act in certain countries or markets as the Members' exclusive or non-exclusive export intermediary for the quantity of Export Product dedicated by each Member for sale by AGC or any Member in that country or market. In any such agreement (i) AGC or the Member acting as the exclusive export intermediary may agree not to represent any other supplier of Export Product with respect to one or more Export Market, and (ii) Members may agree that they will export the quantity of Export Product dedicated for sale in such Export Markets only through AGC or the Member acting as exclusive export intermediary, and that they will not export Export Product otherwise, either directly or through any other export intermediary.
3. AGC and/or one or more of its Members may engage in joint bidding or selling arrangements for Export Markets and allocate sales resulting from such arrangements among the Members.
4. The Members may refuse to deal with export intermediaries other than AGC and its Members.
5. AGC may, for itself and on behalf of its Members, by agreement with its or its Members' distributors or agents, or on the basis of its own determination:
a. Establish the prices at which Export Product will be sold in Export Markets;
b. establish standard terms of sale of Export Product;
c. establish standard quality grades for Export Product;
d. establish target prices for sales of Export Product by its Members in Export Markets, with each Member remaining free to deviate from such target prices in its sole discretion;
e. subject to the limitations set forth in paragraph 1, above, establish the quantity of Export Product to be sold in Export Markets
f. allocate among the Members Export Markets or customers in the Export Markets;
g. refuse to quote prices for, or to market or sell, Export Product in Export Markets; and
h. engage in joint promotional activities aimed at developing existing or new Export Markets, such as advertising and trade shows.
6. AGC may, for itself and on behalf of its Members, contact non-member suppliers of Export Product to elicit information relating to price, volume delivery schedules, terms of sale, and other matters relating to such suppliers' sales or prospective sales in Export Markets.
7. Subject to the limitations set forth in paragraph 1, above, AGC and its Members may agree on the quantities of Export Product and the prices at which AGC and its Members may sell Export Product in and for Export Markets, and may also agree on territorial and customer allocations in Export Markets among the Members.
8. AGC and its Members may enter into exclusive and non-exclusive agreements appointing third parties as export intermediaries for the sale of Export Product in Export Markets. Such agreements may contain the price, quantity, territorial, and customer provisions for Export Markets contained in paragraph 5, above.
9. AGC and its Members may solicit individual non-Member suppliers of Export Product to sell such Export Product to AGC or Members for sale in Export Markets.
10. AGC and its Members may prescribe conditions for withdrawal of Members from and admission of Members to AGC.
11. AGC may, for itself or on behalf of its Members, establish and implement a quality assurance program for Export Product, including without limitation establishing, staffing, and operating a laboratory to conduct quality testing, promulgating quality standards or grades, inspecting Export Product samples and publishing guidelines for and reports of the results of laboratory testing.
12. AGC may conduct meetings of its Members to engage in the activities described in paragraphs 1 through 11 above.
13. AGC may compile for, collect from, and disseminate to its Members, and the Members may discuss among themselves, either in meetings conducted by AGC or independently via telephone and other available and appropriate modes of communication, the following types of information with respect to the export of Export Product to Export Markets only:
a. Sales and marketing efforts, and activities and opportunities for sales of
b. Price, quality, quantity, source, and delivery dates of Export Product available from the Members for export including but not limited to export inventory levels and geographic availability;
c. Terms and conditions of contracts for sales to be considered and/or bid on by AGC and its Members;
d. Joint bidding or selling arrangements and allocation of sales resulting from such arrangements among the Members, including each Member's share of the previous calendar year's total foreign sales;
e. Expenses specific to exporting to and within Export Markets, including without limitation transportation, trans- or intermodal shipments, cold storage, insurance, inland freight to port, port storage, commissions, transactional costs, documentation, financing, customs duties, and taxes;
f. U.S. and foreign legislation regulations and policies affecting export sales; and
g. AGC's and/or its Members' export operations, including without limitation, sales and distribution networks established by AGC or its Members in Export Markets, and prior export sales by Members (including export price information).
The effective date of the Certificate is October 22, 2018, the date on which AGC's application was deemed submitted.
Enforcement and Compliance, International Trade Administration, Department of Commerce.
The Department of Commerce (Commerce) determines that imports of large diameter welded pipe (welded pipe) from Canada is being, or is likely to be, sold in the United States at less than fair value (LTFV) during the period of investigation (POI) January 1, 2017, through December 31, 2017.
Applicable February 27, 2019.
Susan S. Pulongbarit or Annathea Cook, AD/CVD Operations, Office V, Enforcement and Compliance, International Trade Administration, U.S. Department of Commerce, 1401 Constitution Avenue NW, Washington, DC 20230; telephone: (202) 482-4031or (202) 482-0250, respectively.
On August 27, 2018, Commerce published in the
Commerce exercised its discretion to toll all deadlines affected by the partial federal government closure from December 22, 2018, through the resumption of operations on January 29, 2019.
The product covered by this investigation is welded pipe from Canada. For a full description of the scope of this investigation,
During the course of this investigation and the concurrent LTFV investigations of welded pipe from Greece, India, the People's Republic of China (China) and the Republic of Turkey (Turkey), and the concurrent countervailing duty investigations of large diameter welded pipe from China, India, Korea and Turkey, Commerce received scope comments from interested parties. Commerce issued a Preliminary Scope Decision Memorandum to address these comments.
All issues raised in the case and rebuttal briefs submitted by parties in this investigation are addressed in the Issues and Decision Memorandum accompanying this notice. A list of the issues addressed in the Issues and Decision Memorandum is attached to this notice as Appendix II. The Issues and Decision Memorandum is a public document and is on file electronically via Enforcement and Compliance's Antidumping and Countervailing Duty Centralized Electronic Service System (ACCESS). ACCESS is available to registered users at
As provided in section 782(i) of the Tariff Act of 1930, as amended, (the Act) from September to December 2018, we conducted verification of the sales and cost information submitted by Evraz Inc. NA (Evraz) and Enbridge Inc. (Enbridge) for use in our final determination. We
Based on our analysis of the comments received and our findings at verification, we made certain changes to the margin calculations for the respondent. For a discussion of these changes,
Section 735(c)(5)(A) of the Act provides that the estimated weighted-average dumping margin for all-other producers and exporters not individually investigated shall be equal to the weighted average of the estimated weighted-average dumping margins established for exporters and producers individually investigated excluding rates that are zero,
The final
We intend to disclose the calculations performed in this final determination within five days of the date of publication of this notice to parties in this proceeding in accordance with 19 CFR 351.224(b).
In accordance with section 735(c)(1)(B) of the Act, for this final determination, we will direct U.S. Customs and Border Protection (CBP) to continue to suspend liquidation of all entries of welded pipe from Canada, as described in Appendix I of this notice, which are entered, or withdrawn from warehouse, for consumption on or after August 27, 2018, the date of publication in the
Pursuant to section 735(c)(1)(B)(ii) of the Act and 19 CFR 351.210(d), we will instruct CBP to require a cash deposit for such entries of merchandise equal to the estimated weighted-average dumping margin as follows: (1) The cash deposit rate for a company listed above will be equal to the respondent-specific estimated weighted-average dumping margin determined in this final determination; (2) if the exporter is not a respondent identified above but the producer is, then the cash deposit rate will be equal to the respondent-specific estimated weighted-average dumping margin established for that producer of the subject merchandise; and (3) the cash deposit rate for all other producers and exporters will be equal to the all-others estimated weighted-average dumping margin. These suspension of liquidation instructions will remain in effect until further notice.
In accordance with section 735(d) of the Act, we will notify the International Trade Commission (ITC) of the final affirmative determination of sales at LTFV. In addition, we are making available to the ITC all non-privileged and non-proprietary information related to this investigation. We will allow the ITC access to all privileged and business proprietary information in our files, provided the ITC confirms that it will not disclose such information, either publicly or under an administrative protective order (APO), without the written consent of the Assistant Secretary for Enforcement and Compliance. Because Commerce's final determination is affirmative, in accordance with section 735(b)(2) of the Act, the ITC will make its final determination as to whether the domestic industry in the United States is materially injured, or threatened with material injury, by reason of imports, or sales (or the likelihood of sales) for importation of welded pipe from Canada no later than 45 days after this final determination. If the ITC determines that such injury does not exist, this proceeding will be terminated and all cash deposits will be refunded. If the ITC determines that such injury does exist, Commerce will issue an antidumping duty order directing CBP to assess, upon further instruction by Commerce, antidumping duties on all imports of the subject merchandise entered, or withdrawn from warehouse, for consumption on or after the effective date of the suspension of liquidation, as discussed above in the “Continuation of Suspension of Liquidation” section.
This notice serves as a reminder to parties subject to an administrative protective order (APO) of their responsibility concerning the disposition of proprietary information disclosed under APO in accordance with 19 CFR 351.305(a)(3). Timely written notification of return or destruction of APO materials, or conversion to judicial protective order, is hereby requested. Failure to comply with the regulations and the terms of an APO is a sanctionable violation.
This determination is issued and published in accordance with sections 733(f) and 777(i)(1) of the Act and 19 CFR 351.205(c).
The merchandise covered by this investigation is welded carbon and alloy steel pipe (including stainless steel pipe), more than 406.4 mm (16 inches) in nominal outside diameter (large diameter welded pipe), regardless of wall thickness, length, surface finish, grade, end finish, or stenciling. Large diameter welded pipe may
Large diameter welded pipe used to transport oil, gas, or natural gas liquids is normally produced to the American Petroleum Institute (API) specification 5L. Large diameter welded pipe may also be produced to American Society for Testing and Materials (ASTM) standards A500, A252, or A53, or other relevant domestic specifications, grades and/or standards. Large diameter welded pipe can be produced to comparable foreign specifications, grades and/or standards or to proprietary specifications, grades and/or standards, or can be non-graded material. All pipe meeting the physical description set forth above is covered by the scope of this investigation, whether or not produced according to a particular standard.
Subject merchandise also includes large diameter welded pipe that has been further processed in a third country, including but not limited to coating, painting, notching, beveling, cutting, punching, welding, or any other processing that would not otherwise remove the merchandise from the scope of the investigation if performed in the country of manufacture of the in-scope large diameter welded pipe.
The large diameter welded pipe that is subject to this investigation is currently classifiable in the Harmonized Tariff Schedule of the United States (HTSUS) under subheadings 7305.11.1030, 7305.11.1060, 7305.11.5000, 7305.12.1030, 7305.12.1060, 7305.12.5000, 7305.19.1030, 7305.19.1060, 7305.19.5000, 7305.31.4000, 7305.31.6010, 7305.31.6090, 7305.39.1000 and 7305.39.5000. While the HTSUS subheadings are provided for convenience and customs purposes, the written description of the scope of this investigation is dispositive.
National Marine Fisheries Service (NMFS), National Oceanic and Atmospheric Administration (NOAA), Commerce.
Notice of public conference call.
NMFS is holding a stakeholder meeting by conference call to provi de information on recent progress related to the International Commission for the Conservation of Atlantic Tunas (ICCAT) bluefin tuna management strategy evaluation (MSE). NMFS will also receive input on issues to be considered at an upcoming intersessional meeting of ICCAT's Panel 2, which will focus on initial operational management objectives for the bluefin tuna MSE. The conference call is open to the public.
An operator-assisted conference call that is open to the public will be held on February 28, 2019, from 1 p.m. to 2:30 p.m. EST. (phone number 800-857-9879; verbal password “ICCAT”). Participants are strongly encouraged to dial in 15 minutes prior to the meeting.
Terra Lederhouse at (301) 427-8360.
The International Commission for the Conservation of Atlantic Tunas (ICCAT) is hosting an intersessional meeting of its Panel 2 on March 4-7, 2019, in Madrid, Spain. ICCAT's Panel 2 is responsible for keeping under review the conservation and management of northern temperature tunas, including albacore and Atlantic bluefin. At its March 4-7 intersessional meeting, ICCAT's Panel 2 will seek to advance ongoing development of a management strategy evaluation (MSE) for Atlantic bluefin tuna. An MSE is a simulation that allows stakeholders (
For the conference call, NMFS will provide stakeholders with updates on the progress related to ICCAT's bluefin tuna MSE work, including recent meetings of ICCAT's Standing Committee on Research and Statistics (SCRS), ICCAT's scientific branch. Additionally, NMFS is interested in learning from stakeholders about preferred management objectives. NMFS will provide reasonable opportunity for public input and will announce the timing and format for such input at the beginning of the conference call.
National Marine Fisheries Service (NMFS), National Oceanic and Atmospheric Administration (NOAA), Department of Commerce.
Notice of open public meeting.
This notice sets forth the proposed schedule and agenda of a forthcoming meeting of the Marine Fisheries Advisory Committee's (MAFAC's) Columbia Basin Partnership Task Force (CBP Task Force). The CBP Task Force will discuss the issues outlined in the
The meeting will be held March 18, 2019 from 12 to 4:30 p.m. MT and on March 19, 2019 from 9 a.m. to 3 p.m. MT.
The meeting will be held at the Residence Inn Boise Downtown/City Center at 400 S Capitol Blvd., Boise, ID 83702; 208-424-9999.
Katherine Cheney; NFMS West Coast Region; 503-231-6730; email:
Notice is hereby given of a meeting of MAFAC's CBP Task Force. The MAFAC was established by the Secretary of Commerce (Secretary) and, since 1971, advises the Secretary on all living marine resource matters that are the responsibility of the Department of Commerce. The MAFAC charter and meeting information are located online
The meeting time and agenda are subject to change. Meeting topics include finalizing and approving the phase I recommendations on qualitative and quantitative goals for salmon and steelhead throughout the basin and discussing approaches and initiating the integration and scenario planning work of phase II.
The meeting is physically accessible to people with disabilities. Requests for sign language interpretation or other auxiliary aids should be directed to Katherine Cheney, 503-231-6730, by March 8, 2019.
Commodity Futures Trading Commission.
Notice.
In compliance with the Paperwork Reduction Act of 1995 (“PRA”), this notice announces that the Information Collection Request (“ICR”) abstracted below has been forwarded to the Office of Management and Budget (“OMB”) for review and comment. The ICR describes the nature of the information collection and its expected costs and burden.
Comments must be submitted on or before March 29, 2019.
Comments regarding the burden estimated or any other aspect of the information collection, including suggestions for reducing the burden, may be submitted directly to the Office of Information and Regulatory Affairs (“OIRA”) in OMB, within 30 days of the notice's publication Comments regarding the burden estimated or any other aspect of the information collection, including suggestions for reducing the burden, may be submitted directly to the Office of Information and Regulatory Affairs (“OIRA”) in OMB, within 30 days of the notice's publication, by either of the following methods. Please identify the comments by “OMB Control No. 3038-0043.”
•
•
A copy of all comments submitted to OIRA should be sent to the Commodity Futures Trading Commission (Commission) by either of the following methods. The copies should refer to “OMB Control No. 3038-0085.”
•
• By Hand Delivery/Courier to the same address; or
• Through the Commission's website at
A copy of the supporting statement for the collection of information discussed herein may be obtained by visiting
All comments must be submitted in English, or if not, accompanied by an English translation. Comments will be posted as received to
Melissa Chiang, Counsel, Office of General Counsel, Commodity Futures Trading Commission, (202) 418-5578; email:
An agency may not conduct or sponsor, and a person is not required to respond to, a collection of information unless it displays a currently valid OMB control number. The OMB control numbers for the Commission's regulations were published on December 30, 1981.
There are no capital costs or operating and maintenance costs associated with this collection.
Bureau of Consumer Financial Protection.
Notice of public meeting.
Under the Federal Advisory Committee Act (FACA), this notice sets forth the announcement of a public meeting of the Credit Union Advisory Council (CUAC or Council) of the Bureau of Consumer Financial Protection (Bureau). The notice also describes the functions of the Council.
The meeting date is Thursday, March 14, 2019, from approximately 9:30 a.m. to 5:15 p.m. eastern daylight time.
The meeting location is the Bureau of Consumer Financial Protection, 1700 G Street NW, Washington, DC 20552.
Kim George, Outreach and Engagement Associate, Consumer Advisory Board and Councils Office, External Affairs, at 202-435-7884,
Section 2 of the CUAC Charter provides that pursuant to the executive and administrative powers conferred on the Bureau of Consumer Financial Protection by section 1012 of the Dodd-Frank Wall Street Reform and Consumer Protection Act (Dodd-Frank Act), the Director established the Credit Union Advisory Council under agency authority.
Section 3 of the CUAC Charter states: “The purpose of the Advisory Council is to advise the Bureau in the exercise of its functions under the federal consumer financial laws as they pertain to community banks with total assets of $10 billion or less.”
The Consumer Advisory Board will discuss policy issues related to financial technology and other trends and themes in consumer finance. A more detailed meeting agenda will be published on the Bureau's website.
Persons who need a reasonable accommodation to participate should contact
Written comments will be accepted from interested members of the public and should be sent to
Individuals who wish to join the Credit Union Advisory Council must RSVP via this link
The Council's agenda will be made available to the public on Wednesday, February 27, 2019, via
A recording and summary of this meeting will be available after the meeting on the Bureau's website
Bureau of Consumer Financial Protection.
Notice of public meeting.
Under the Federal Advisory Committee Act (FACA), this notice sets forth the announcement of a public meeting of the Community Bank Advisory Council (CBAC or Council) of the Bureau of Consumer Financial Protection (Bureau). The notice also describes the functions of the Council.
The meeting date is Thursday, March 14, 2018, from approximately 9:30 a.m. to 5:15 p.m. eastern daylight time.
The meeting location is the Bureau of Consumer Financial Protection, 1700 G Street NW, Washington, DC 20552.
Kim George, Outreach and Engagement Associate, Consumer Advisory Board and Councils Office, External Affairs, at 202-435-7884,
Section 2 of the CBAC Charter provides that pursuant to the executive and administrative powers conferred on the Bureau of Consumer Financial Protection by section 1012 of the Dodd-Frank Wall Street Reform and Consumer Protection Act (Dodd-Frank Act), the Director established the Community Bank Advisory Council under agency authority.
Section 3 of the CBAC Charter states: “The purpose of the Advisory Council is to advise the Bureau in the exercise of its functions under the federal consumer financial laws as they pertain to community banks with total assets of $10 billion or less.”
The Consumer Advisory Board will discuss policy issues related to financial technology and other trends and themes in consumer finance. A more detailed meeting agenda will be published on the Bureau's website.
Persons who need a reasonable accommodation to participate should contact
Written comments will be accepted from interested members of the public and should be sent to
Individuals who wish to join the Community Bank Advisory Council must RSVP via this link
The Council's agenda will be made available to the public on Wednesday, February 27, 2019, via
A recording and summary of this meeting will be available after the meeting on the Bureau's website
Bureau of Consumer Financial Protection.
Notice of public meeting.
Under the Federal Advisory Committee Act (FACA), this notice sets forth the announcement of a public meeting of the Consumer Advisory Board (CAB or Board) of the Bureau of Consumer Financial Protection (Bureau). The notice also describes the functions of the Board.
The meeting date is Thursday, March 14, 2019, from approximately 9:30 a.m. to 5:15 p.m. eastern daylight time.
Kim George, Outreach and Engagement Associate, Advisory Board and Councils Office, External Affairs, at 202-435-7884,
Section 3 of the Charter of the Consumer Advisory Board states that:
The purpose of the Board is outlined in section 1014(a) of the Dodd-Frank Act, which states that the Board shall “advise and consult with the Bureau in the exercise of its functions under the Federal consumer financial laws” and “provide information on emerging practices in the consumer financial products or services industry, including regional trends, concerns, and other relevant information.”
To carry out the Board's purpose, the scope of its activities shall include providing information, analysis, and recommendations to the Bureau. The Board will generally serve as a vehicle for market intelligence and expertise for the Bureau. Its objectives will include identifying and assessing the impact on consumers and other market participants of new, emerging, and changing products, practices, or services.
The Consumer Advisory Board will discuss policy issues related to financial technology and other trends and themes in consumer finance. A more detailed meeting agenda will be published on the Bureau's website.
Persons who need a reasonable accommodation to participate should contact
Written comments will be accepted from interested members of the public and should be sent to
Individuals who wish to join the Consumer Advisory Board must RSVP via this link
The Board's agenda will be made available to the public on Wednesday February 27, 2019, via
A recording and summary of this meeting will be available after the meeting on the Bureau's website
Office of Secretary of Defense, DoD.
Notice of a modified system of records notice.
The system contains personnel, employment, and pay data on current and former military and civilian personnel and survivors and dependents of military personnel. System data is used to conduct computer matches with various agencies in accordance with the Computer Matching and Privacy Protection Act of 1988. This proposed routine use will enable the conducting of a match with state public assistance agencies to continue.
Comments will be accepted on or before March 29, 2019. This proposed action will be effective on the date following the end of the comment period unless comments are received which result in a contrary determination.
You may submit comments, identified by docket number and title, by any of the following methods:
*
Follow the instructions for submitting comments.
*
Ms. Luz D. Ortiz, Chief, Records, Privacy and Declassification Division (RPDD), 1155 Defense Pentagon, Washington, DC 20311-1155, or by phone at (571) 372-0478.
An additional routine use needs to be added to the system of records notice due to a change in the process of transferring data in the execution of the Computer Matching Agreement (CMA #86) also known as the PARIS Agreement. CMA #86 helps identify individuals receiving both federal compensation and pension benefits and public assistance benefits under federal programs administered by the states and to verify public assistance clients' income circumstances declarations. This agreement is in accordance with the amended section 1903(r) of the Social Security Act which requires states to maintain eligibility determination systems which provide data matching through the Public Assistance Reporting Information System (PARIS) or a successor system.
The Agreement is between DoD (recipient/matching agency), the state public assistance agencies (SPAAs—source agencies) and the Department of Health Human Services (HHS—facilitating agency). HHS no longer facilitates the transfer of data; the data transfer is made directly from the SPAAs to DoD. For this reason, the routine use of sharing this information with the SPAAs must be added to the system of records notice.
The proposed systems reports, as required by the Privacy Act, as amended, were submitted on December 14, 2018, to the House Committee on Oversight and Government Reform, the Senate Committee on Homeland Security and Governmental Affairs, and the Office of Management and Budget (OMB) pursuant to Section 6 of OMB Circular No. A-108, “Federal Agency Responsibilities for Review, Reporting, and Publication under the Privacy Act,” published December 23, 2016 (December 23, 2016, 81 FR 94424).
Defense Manpower Data Center Data Base, DMDC 01
Unclassified.
Naval Postgraduate School Computer Center, Naval Postgraduate School, Monterey, CA 93943-5000.
Deputy Director, Defense Manpower Data Center, DoD Center Monterey Bay, 400 Gigling Road, Seaside, CA 93955-6771.
5 U.S.C. App. 3 (Pub. L. 95-452, as amended (Inspector General Act of 1978)); 10 U.S.C. 136, Under Secretary of Defense for Personnel and Readiness; 10 U.S.C. 1562, Database on Domestic Violence Incidents; 20 U.S.C. 1070(f)(4), Higher Education Opportunity Act; Public Law 106-265, Federal Long-Term Care Insurance; 10 U.S.C. 2358, Research and Development Projects; and E.O. 9397 (SSN), as amended.
The purpose of the system of records is to provide a single central facility within the Department of Defense to assess manpower trends, support personnel and readiness functions, to perform longitudinal statistical analyses, identify current and former DoD civilian and Armed Forces personnel for purposes of detecting fraud and abuse of pay and benefit programs, to register current and former DoD civilian and Armed Forces personnel and their authorized dependents for purposes of obtaining medical examination, treatment or other benefits to which they are qualified. To collect debts owed to the United States Government and state and local governments. Information will be used by agency officials and employees, or authorized contractors, and other DoD Components in the preparation of studies and policy as related to the health and well-being of current and past Armed Forces and DoD-affiliated personnel; to respond to Congressional and Executive branch inquiries; and to provide data or documentation relevant to the testing or exposure of individuals. Armed Forces drug test records will be maintained and used to conduct longitudinal, statistical, and analytical studies and computing demographic reports. No personal identifiers will be included in the demographic data reports. All requests for Service specific drug testing demographic data will be approved by the Service designated drug testing program office. All requests for DoD wide drug testing demographic data will be approved by the DoD Coordinator for Drug Enforcement Policy and Support, 1510 Defense Pentagon, Washington, DC 20301-1510. DMDC web usage data will be used to validate continued need for user access to DMDC computer systems and databases, to address problems associated with web access, and to ensure access is only for official purposes.
All Army, Navy, Air Force, Marine Corps, and Coast Guard officer and enlisted personnel serving on active duty from July 1, 1968 and after or were a member of a reserve component since July 1975 (hereafter the “Armed Forces”); retired Armed Forces personnel; active and retired members of the commissioned corps of the National Oceanic and Atmospheric Administration (NOAA) and the Public Health Service (PHS) (with Armed Forces above, hereafter referred to as the “Uniformed Services”). All individuals examined to determine eligibility for military service at an Armed Forces Entrance and Examining Station from July 1, 1970, and later; Current and former DoD civilian employees since January 1, 1972. Veterans using the Veterans Education Assistance Program (VEAP) from January 1977 through June 1985; Participants in the Department of Health and Human Services National Longitudinal Survey; Survivors of retired Armed Forces personnel eligible for or currently receiving disability payments or disability income compensation from the Department of Veterans Affairs; surviving spouses of active or retired deceased Armed Forces personnel; 100% disabled veterans and their survivors; and survivors of retired officers of NOAA and PHS eligible for, or are currently receiving, Federal payments due to the death of the retiree; Individuals receiving disability compensation from the Department of Veterans Affairs or who are covered by a Department of Veterans Affairs' insurance or benefit program; dependents of active and retired members of the Uniformed Services, selective service registrants; All Federal civilian retirees; All non-appropriated
Computerized personnel/employment/pay records consisting of name, Service Number, Selective Service Number, Social Security Number (SSN), DoD Identification Number, citizenship data, compensation data, demographic information such as home town, age, sex, race, and educational level; civilian occupational information; performance ratings of DoD civilian employees and military members; reasons given for leaving military service or DoD civilian service; civilian and military acquisition work force warrant location, training and job specialty information; military personnel information such as rank, assignment/deployment, length of service, military occupation, aptitude scores, post-service education, training, and employment information for veterans; participation in various in-service education and training programs; date of award of certification of military experience and training; military hospitalization and medical treatment, immunization, and pharmaceutical dosage records; home and work addresses; and identities of individuals involved in incidents of child and spouse abuse, and information about the nature of the abuse and services provided; CHAMPUS claim records containing enrollee, patient and health care facility, provided data such as cause of treatment, amount of payment, name and Social Security or tax identification number of providers or potential providers of care; Selective Service System registration data; Primary and secondary fingerprints of Military Entrance Processing Command (MEPCOM) applicants; Department of Veterans Affairs disability payment records. Credit or financial data as required for security background investigations; Criminal history information on individuals who subsequently enter the military; Extracts from Office of Personnel Management (OPM); OPM/CENTRAL-1, Civil Service Retirement and Insurance Records, including postal workers covered by Civil Service Retirement, containing Civil Service Claim number, date of birth, name, provision of law retired under, gross annuity, length of service, annuity commencing date, former employing agency and home address. These records provided by OPM for approved computer matching; Non-appropriated fund employment/personnel records consist of Social Security Number (SSN), name, and work address; Military drug test records containing the Social Security Number (SSN), date of specimen collection, date test results reported, reason for test, test results, base/area code, unit, service, status (active/reserve), and location code of testing laboratory; Names of individuals, as well as DMDC assigned identification numbers, and other user-identifying data, such as organization, Social Security Number (SSN), email address, phone number, of those having web access to DMDC computer systems and databases, to include dates and times of access.
Record sources are individuals via survey questionnaires, the Uniformed Services, the Department of Veteran Affairs, the Office of Personnel Management, Environmental Protection Agency, Department of Health and Human Services, Department of Energy, Executive Office of the President, and the Selective Service System.
In addition to those disclosures generally permitted under 5 U.S.C. 552a(b) of the Privacy Act of 1974, these records may specifically be disclosed outside the DoD as a routine use pursuant to 5 U.S.C. 552a(b)(3) as follows:
1. To the Department of Veterans Affairs (DVA):
a. To provide Uniformed Service personnel and pay data for present and former Uniformed Service personnel for the purpose of evaluating use of veterans' benefits, validating benefit eligibility and maintaining the health and well being of veterans and their family members.
b. To provide identifying Armed Service personnel data to the DVA and its insurance program contractor for the purpose of notifying separating eligible Reservists of their right to apply for Veteran's Group Life Insurance coverage under the Veterans Benefits Improvement Act of 1996 (38 U.S.C. 1968).
c. To register eligible veterans and their dependents for DVA programs.
d. Providing identification of former Uniformed Service personnel and survivor's financial benefit data to DVA for the purpose of identifying military retired pay and survivor benefit payments for use in the administration of the DVA's Compensation and Pension program (38 U.S.C. 5106). The information is to be used to process all DVA award actions more efficiently, reduce subsequent overpayment collection actions, and minimize erroneous payments.
e. To conduct computer matching programs regulated by the Privacy Act of 1974, as amended (5 U.S.C. 552a), for the purpose of:
(1) Providing full identification of active duty Uniformed Service personnel, including full time National Guard/Reserve support personnel, for use in the administration of DVA's Compensation and Pension benefit program. The information is used to determine continued eligibility for DVA disability compensation to recipients returning to active duty so benefits can be adjusted or terminated as required and steps taken by DVA to collect any resulting over payment (38 U.S.C. 5304(c)).
(2) Providing identification of reserve duty, including full time support National Guard/Reserve Armed Forces personnel, to the DVA, for the purpose of deducting reserve time served from any DVA disability compensation paid or waiver of VA benefit. The law (10 U.S.C. 12316) prohibits receipt of reserve pay and DVA compensation for the same time period, however, it does permit waiver of DVA compensation to draw reserve pay.
f. To provide identifying Uniformed Service personnel data to the DVA for the purpose of notifying such personnel of information relating to educational assistance as required by the Veterans Programs Enhancement Act of 1998 (38 U.S.C. 3011 and 3034).
2. To the Office of Personnel Management (OPM):
a. Consisting of personnel/employment/financial data for the purpose of carrying out OPM's management functions. Records disclosed concern pay, benefits, retirement deductions and any other information necessary for those management functions required by law (Pub. L. 83-598, 84-356, 86-724, 94-455 and 5 U.S.C. 1302, 2951, 3301, 3372, 4118, 8347).
b. To conduct computer matching programs regulated by the Privacy Act of 1974, as amended (5 U.S.C. 552a) for the purpose of:
(1) Exchanging civil service and Reserve personnel data to identify those individuals of the Reserve forces employed by the Federal government in a civilian position. The purpose of the
c. Matching for administrative purposes to include updated employer addresses of Federal civil service employees who are reservists and demographic data on civil service employees who are reservists.
3. To the Internal Revenue Service (IRS) for the purpose of obtaining home addresses to contact Reserve component members for mobilization purposes and for tax administration. For the purpose of conducting aggregate statistical analyses on the impact of Armed Forces personnel of actual changes in the tax laws and to conduct aggregate statistical analyses to life stream earnings of current and former military personnel to be used in studying the comparability of civilian and military pay benefits. To aid in administration of Federal Income Tax laws and regulations, to identify non-compliance and delinquent filers.
4. To the Department of Health and Human Services (DHHS):
a. To the Office of the Inspector General, DHHS, for the purpose of identification and investigation of DoD civilian employees and Armed Forces members who may be improperly receiving funds under the Temporary Assistance for Needy Families (TANF).
b. To the Office of Child Support Enforcement, Federal Parent Locator Service, DHHS, pursuant to 42 U.S.C. 653 and 653a; to assist in locating individuals for the purpose of establishing parentage; establishing, setting the amount of, modifying, or enforcing child support obligations; or enforcing child custody or visitation orders; and for conducting computer matching as authorized by E.O. 12953 to facilitate the enforcement of child support owed by delinquent obligors within the entire civilian Federal government and the Uniformed Services (active and retired). Identifying delinquent obligors will allow State Child Support Enforcement agencies to commence wage withholding or other enforcement actions against the obligors.
Note 1:
Information requested by DHHS is not disclosed when it would contravene U.S. national policy or security interests (42 U.S.C. 653(e)).
Note 2:
Quarterly wage information is not disclosed for those individuals performing intelligence or counter intelligence functions and a determination is made that disclosure could endanger the safety of the individual or compromise an ongoing investigation or intelligence mission (42 U.S.C. 653(n)).
a. To the Health Care Financing Administration (HCFA), DHHS for the purpose of monitoring HCFA reimbursement to civilian hospitals for Medicare patient treatment. The data will ensure no Department of Defense physicians, interns, or residents are counted for HCFA reimbursement to hospitals.
b. To the Centers for Disease Control and the National Institutes of Mental Health, DHHS, for the purpose of conducting studies concerned with the health and well being of Uniformed Services personnel or veterans, to include family members.
c. To conduct computer matching programs regulated by the Privacy Act of 1974, as amended (5 U.S.C. 552a), for the Public Assistance Reporting Information System (PARIS) for the purpose of determining continued eligibility and help eliminate fraud and abuse in benefit programs by identifying individuals who are receiving Federal compensation or pension payments and also are receiving payments pursuant to Federal benefit programs being administered by the States.
5. To the Social Security Administration (SSA):
a. To the Office of Research and Statistics for the purpose of:
(1) Conducting statistical analyses of impact of military service and use of GI Bill benefits on long term earnings.
(2) Obtaining current earnings data on individuals voluntarily leaving military service or DoD civil employment so analytical personnel studies regarding pay, retention and benefits may be conducted.
Note 3:
Earnings data obtained from the SSA and used by DoD does not contain any information identifying the individual about whom the earnings data pertains.
a. To conduct computer matching programs regulated by the Privacy Act of 1974, as amended (5 U.S.C. 552a) to the Bureau of Supplemental Security Income for the purpose of verifying information provided to the SSA by applicants and recipients/beneficiaries, who are retired members of the Uniformed Services or their survivors, for Supplemental Security Income (SSI) or Special Veterans' Benefits (SVB). By law (42 U.S.C. 1006 and 1383), the SSA is required to verify eligibility factors and other relevant information provided by the SSI or SVB applicant from independent or collateral sources and obtain additional information as necessary before making SSI or SVB determinations of eligibility, payment amounts, or adjustments thereto.
b. To the Client Identification Branch for the purpose of validating the assigned Social Security Number for individuals in DoD personnel and pay files, using the SSA Enumeration Verification System (EVS).
c. To the Office of Disability and Insurance Security Programs, for the purpose of expediting disability processing of wounded military service members and veterans.
6. To the Selective Service System (SSS) for the purpose of facilitating compliance of members and former members of the Armed Forces, both active and reserve, with the provisions of the Selective Service registration regulations (50 U.S.C. App. 451 and E.O. 11623).
7. To the Department of Labor (DOL) to reconcile the accuracy of unemployment compensation payments made to former DoD civilian employees and members of the Uniformed Services by the states. To the Department of Labor to survey Armed Forces separations to determine the effectiveness of programs assisting veterans to obtain employment.
8. To Federal and Quasi Federal agencies, territorial, state, and local governments to support personnel functions requiring data on prior Armed Forces service credit for their employees or for job applicants. Information released includes name, Social Security Number, and military or civilian address of individuals. To detect fraud, waste and abuse pursuant to the authority contained in the Inspector General Act of 1978, as amended (Pub. L. 95-452) for the purpose of determining eligibility for, and/or continued compliance with, any Federal benefit program requirements.
9. To state and local law enforcement investigative agencies to obtain military history information for the purpose of ongoing investigations.
10. To Federal and Quasi Federal agencies, territorial, state and local governments, and contractors and grantees for the purpose of supporting research studies concerned with the health and well being of Uniformed Service and retired personnel or veterans, to include family members. DMDC will disclose information from
a. Determines the use or disclosure does not violate legal or policy limitations under which the record was provided, collected, or obtained;
b. Determines the research purpose (1) cannot be reasonably accomplished unless the record is provided in individually identifiable form, and (2) warrants the risk to the privacy of the individual that additional exposure of the record might bring;
c. Requires the recipient to (1) establish reasonable administrative, technical, and physical safeguards to prevent unauthorized use or disclosure of the record, and (2) remove or destroy the information that identifies the individual at the earliest time at which removal or destruction can be accomplished consistent with the purpose of the research project, unless the recipient has presented adequate justification of a research or health nature for retaining such information, and (3) makes no further use or disclosure of the record except (A) in emergency circumstances affecting the health or safety of any individual, (B) for use in another research project, under these same conditions, and with written authorization of the Department, (C) for disclosure to a properly identified person for the purpose of an audit related to the research project, if information enabling research subjects to be identified is removed or destroyed at the earliest opportunity consistent with the purpose of the audit, or (D) when required by law;
d. Secures a written statement attesting to the recipient's understanding of, and willingness to abide by these provisions.
11. To Federal and State agencies for purposes of obtaining socioeconomic information on Armed Forces personnel so analytical studies can be conducted with a view to assessing the present needs and future requirements of such personnel.
12. To Federal and state agencies for purposes of validating demographic data (
13. To the Bureau of Citizenship and Immigration Services, Department of Homeland Security, for purposes of facilitating the verification of individuals possibly eligible for expedited naturalization (Pub. L. 108-136, Section 1701, and E.O. 13269, Expedited Naturalization).
14. To Federal and State agencies, as well as their contractors and grantees, for purposes of providing military wage, training, and educational information so that Federal-reporting requirements, as mandated by statute, such as the Workforce Investment Act (29 U.S.C. 2801, et seq.) and the Carl D. Perkins Vocational and Applied Technology Act (20 U.S.C. 2301, et seq.) can be satisfied.
15. To Federal Agencies, including the Department of Education, to conduct computer matching programs regulated by the Privacy Act of 1974, as amended (5 U.S.C. 552a), for the purpose of identifying dependent children of those Armed Forces members killed in Operation Iraqi Freedom and Operation Enduring Freedom (OIF/OEF) Afghanistan Only for possible benefits. The DoD `Blanket Routine Uses' set forth at the beginning of the Office of the Secretary of Defense (OSD) compilation of systems of records notices apply to this system.
Note 5:
Military drug test information involving individuals participating in a drug abuse rehabilitation program shall be confidential and disclosed only for the purposes and under the circumstances expressly authorized in 42 U.S.C. 290dd-2. This statute takes precedence over the Privacy Act of 1974, in regard to accessibility of such records except to the individual to whom the record pertains. The DoD `Blanket Routine Uses' do not apply to these types of records.
Electronic storage media.
Records are retrieved by name, Social Security Number (SSN), DoD ID number, occupation, or any other data element contained in system.
The records are used to provide a centralized system within the Department of Defense to assess manpower trends, support personnel functions, perform longitudinal statistical analyses, and conduct scientific studies or medical follow-up programs and other related studies/analyses. Records are retained as follows:
(1) Input/source records are deleted or destroyed after data have been entered into the master file or when no longer needed for operational purposes, whichever is later. Exception: Apply NARA-approved disposition instructions to the data files residing in other DMDC data bases.
(2) The Master File is retained permanently. At the end of the fiscal year, a snapshot is taken and transferred to the National Archives in accordance with 36 CFR part 1228.270 and 36 CFR part 1234.
(3) Output records (electronic or paper summary reports) are deleted or destroyed when no longer needed for operational purposes. Note: This disposition instruction applies only to record keeping copies of the reports retained by DMDC. The DoD office requiring creation of the report should maintain its record keeping copy in accordance with NARA approved disposition instructions for such reports.
(4) System documentation (codebooks, record layouts, and other system documentation) are retained permanently and transferred to the National Archives along with the master file in accordance with 36 CFR part 1228.270 and 36 CFR part 1234.
Access to personal information is restricted to those requiring the records in the performance of their official duties. Access to personal information is further restricted by the use of Common Access Cards (CAC). Physical entry is restricted by the use of locks, guards, and administrative procedures. All individuals granted access to this system of records must complete Information Assurance and Privacy Act training; all have been through the vetting process and have ADP ratings.
Individuals seeking access to information about themselves contained in this system should address written inquiries to the Office of the Secretary of Defense/Joint Staff Freedom of Information Act Requester Service Center, 1155 Defense Pentagon, Washington, DC 20301-1155. Written requests should contain the name and number of this system of records notice along with the full name, Social Security Number (SSN), date of birth, current address, and telephone number of the individual and be signed. In addition, the requester must provide a notarized statement or an unsworn declaration made in accordance with 28 U.S.C. 1746, in the following format:
If executed within the United States, its territories, possessions, or commonwealths: “I declare (or certify, verify, or state) under penalty of perjury that the foregoing is true and correct. Executed on (date). (Signature).”
If executed outside the United States: “I declare (or certify, verify, or state) under penalty of perjury under the laws of the United States of America that the foregoing is true and correct. Executed on (date). (Signature).”
Attorneys or other persons acting on behalf of an individual must provide written authorization from the individual for their representative to act on their behalf.
The Office of the Secretary of Defense rules for accessing records, contesting contents and appealing initial agency determinations are published in Office of the Secretary of Defense Administrative Instruction 81; 32 CFR part 311; or may be obtained from the system manager.
Individuals seeking to determine whether information about themselves is contained in this system should address written inquiries to the Privacy Act Officer, Office of Freedom of Information, Washington Headquarters Services, 1155 Defense Pentagon, Washington, DC 20301-1155. Written requests should contain the full name, Social Security Number (SSN), date of birth, current address, and telephone number of the individual. In addition, the requester must provide a notarized statement or an unsworn declaration made in accordance with 28 U.S.C. 1746, in the following format:
If executed within the United States, its territories, possessions, or commonwealths: “I declare (or certify, verify, or state) under penalty of perjury that the foregoing is true and correct. Executed on (date). (Signature).”
If executed outside the United States: “I declare (or certify, verify, or state) under penalty of perjury under the laws of the United States of America that the foregoing is true and correct. Executed on (date). (Signature).”
Attorneys or other persons acting on behalf of an individual must provide written authorization from the individual for their representative to act on their behalf.
None.
November 23, 2011, 76 FR 72391.
Office of the Secretary, Department of Defense (DoD).
Notice of a new matching program.
This Computer Matching Agreement (CMA) identifies individuals receiving both federal compensation or pension benefits and public assistance benefits under federal programs administered by the states and verifies public assistance clients' declarations of income circumstances.
Comments will be accepted on or before March 29, 2019. This proposed action will be effective the day following the end of the comment period unless comments are received which result in a contrary determination.
You may submit comments, identified by docket number and title, by any of the following methods:
•
Follow the instructions for submitting comments.
•
Ms. Cheryl D. Jenkins, Management Analyst, Defense Privacy, Civil Liberties, and Transparency Division at (703) 571-0070.
Each participating State Public Assistance Agency (SPAA) will provide the Department of Defense, Defense Manpower Data Center (DMDC) with finder files containing identifying and other data about public assistance applicants or recipients, which DMDC will match against DoD military and civilian pay files, military retired pay files, and survivor pay files (Office of Personnel Management (OPM) civilian retired and survivor pay files will not be used). DMDC will return matched data to the SPAA, which the SPAA will use to verify individuals' continued eligibility to receive public assistance benefits and, if ineligible, to take such action as may be authorized by law and regulation to ensure fair and equitable treatment in the delivery of and benefits attributable to funds provided by the Federal Government. HHS will support each of SPAA's efforts to ensure appropriate participation in the matching program and compliance with this agreement's terms by assisting with drafting the agreements and helping arrange signatures to the agreements. A new routine use is concurrently being added to DoD System of Records Notice, DMDC 01 to specifically address this computer match.
Department of the Navy, DoD.
Notice of issuance of Certificate of Alternate Compliance.
The U.S. Navy hereby announces that a Certificate of Alternate Compliance has been issued for USS DELAWARE (SSN 791). Due to the special construction and purpose of this vessel, the Deputy Assistant Judge Advocate General (DAJAG) (Admiralty and Maritime Law) has determined that it is a vessel of the Navy which, due to its special construction and purpose, cannot comply fully with the certain provisions of the International Regulations for Preventing Collisions at Sea, 1972 (72 COLREGS) without interfering with its special functions as a naval ship. The intended effect of this notice is to warn mariners in waters where 72 COLREGS apply.
This Certificate of Alternate Compliance is effective February 27, 2019 and is applicable beginning February 14, 2019.
Lieutenant Commander Matt Rector, JAGC, U.S. Navy, Admiralty Attorney, Office of the Judge Advocate General, Admiralty and Maritime Law Division (Code 11), 1322 Patterson Ave. SE, Suite 3000, Washington Navy Yard, DC 20374-5066, telephone number: 202-685-5040, or
Background and Purpose. Executive Order 11964 of January 19, 1977 and 33 U.S.C. 1605 provide that the requirements of the 72 COLREGS, as to the number, position, range, or arc of visibility of lights or shapes, as well as to the disposition and characteristics of sound-signaling appliances, shall not apply to a vessel or class of vessels of the Navy where the Secretary of the Navy shall find and certify that, by reason of special construction or purpose, it is not possible for such vessel(s) to comply fully with the provisions without interfering with the special function of the vessel(s). Notice of issuance of a Certificate of Alternate Compliance must be made in the
In accordance with 33 U.S.C. 1605, the DAJAG (Admiralty and Maritime Law), under authority delegated by the Secretary of the Navy, hereby finds and certifies that USS DELAWARE (SSN 791) is a vessel of special construction or purpose, and that, with respect to the position of the following navigational lights, it is not possible to comply fully with the requirements of the provisions enumerated in the 72 COLREGS without interfering with the special function of the vessel:
Rule 23(a) and Annex I, paragraph 2(a)(i), pertaining to the vertical placement of the masthead light, and Annex I, paragraph 2(f)(i), pertaining to the masthead light being above and clear of all other lights and obstructions;
Rule 30(a), Rule 21(e), and Annex I, paragraph 2(k), pertaining to the vertical separation of the anchor lights, vertical placement of the forward anchor light above the hull, and the arc of visibility of all-around lights;
Rule 23(a) and Annex I, paragraph 3(b), pertaining to the location of the sidelights; and
Rule 21(c), pertaining to the location and arc of visibility of the sternlight.
The DAJAG (Admiralty and Maritime Law) further finds and certifies that these navigational lights are in closest possible compliance with the applicable provision of the 72 COLREGS.
33 U.S.C. 1605(c), E.O. 11964.
Office of Elementary and Secondary Education, Department of Education.
Notice.
The Department of Education (Department) is issuing a notice inviting applications for fiscal year (FY) 2019 for the Full-Service Community Schools (FSCS) program, Catalog of Federal Domestic Assistance (CFDA) number 84.215J.
For the addresses for obtaining and submitting an application, please refer to our Common Instructions for Applicants to Department of Education Discretionary Grant Programs, published in the
Michelle Johnson Armstrong, U.S. Department of Education, 400 Maryland Avenue SW, Room 3C118, Washington, DC 20202. Telephone: (202) 205-1729. Email:
If you use a telecommunications device for the deaf (TDD) or a text telephone (TTY), call the Federal Relay Service (FRS), toll free, at 1-800-877-8339.
According to a 2017 report, comprehensive community school interventions that incorporate most or all of four features, or pillars (integrated student supports; expanded learning time and opportunities; family and community engagement; collaborative leadership and practice), are associated with a range of positive student outcomes.
“A well-implemented community school leads to improvement in student and school outcomes and contributes to meeting the educational needs of low-achieving students in high-poverty schools. Strong research reinforces the efficacy of integrated student supports, expanded learning time and opportunities, and family and community engagement as intervention strategies.”
Over the last decade, the field has observed a wide range of practices coordinated and implemented in full-service community schools. Assuming strong social capital, stable leadership, and a strong instructional program, full-service community schools have been associated with improved attendance, student achievement, and student behavior and youth development.
This priority is:
Eligible entities that will serve two or more full-service community schools eligible for a schoolwide program (as defined in this notice) under section 1114(b) of the ESEA as part of a community- or district-wide strategy.
These priorities are:
The Secretary gives priority to applicants that include an LEA that is currently eligible under the Small Rural School Achievement (SRSA) program or the Rural and Low-Income School (RLIS) program, authorized under title V, part B (sections 5211 and 5221) of the ESEA. Applicants may determine whether a particular LEA is eligible for these programs by referring to information on the following Department websites: for the SRSA program,
An LEA includes a public charter school that operates as an LEA.
The Secretary gives priority to an applicant that demonstrates that it is a consortium comprised of a broad representation of stakeholders.
The Secretary gives priority to an applicant that demonstrates that it is a consortium with a history of effectiveness.
The Secretary gives priority to an application that is supported by promising evidence (as defined in this notice).
(a) Is representative of a community or significant segments of a community; and
(b) Provides educational or related services to individuals in the community.
(a) A randomized controlled trial employs random assignment of, for example, students, teachers, classrooms, or schools to receive the project component being evaluated (the treatment group) or not to receive the project component (the control group).
(b) A regression discontinuity design study assigns the project component being evaluated using a measured variable (
(c) A single-case design study uses observations of a single case (
(a) Participates in a community-based effort to coordinate and integrate educational, developmental, family, health, and other comprehensive services through community-based organizations and public and private partnerships; and
(b) Provides access to such services in school to students, families, and the community, such as access during the school year (including before- and after-school hours and weekends), as well as during the summer.
(a) In General. A public board of education or other public authority legally constituted within a State for either administrative control or direction of, or to perform a service function for, public elementary schools or secondary schools in a city, county, township, school district, or other political subdivision of a State, or of or for a combination of school districts or counties that is recognized in a State as an administrative agency for its public elementary schools or secondary schools.
(b) Administrative Control and Direction. The term includes any other public institution or agency having administrative control and direction of a public elementary school or secondary school.
(c) Bureau of Indian Education Schools. The term includes an elementary school or secondary school funded by the Bureau of Indian Education but only to the extent that including the school makes the school eligible for programs for which specific eligibility is not provided to the school in another provision of law and the school does not have a student population that is smaller than the student population of the LEA receiving assistance under the ESEA with the smallest student population, except that the school shall not be subject to the jurisdiction of any State educational agency (as defined in this notice) other than the Bureau of Indian Education.
(d) Educational Service Agencies. The term includes educational service agencies and consortia of those agencies.
(e) State Educational Agency. The term includes the State educational agency in a State in which the State educational agency is the sole educational agency for all public schools.
(a) High-quality early childhood education programs.
(b) High-quality school and out-of-school-time programs and strategies.
(c) Support for a child's transition to elementary school, from elementary school to middle school, from middle school to high school, and from high school into and through postsecondary education and into the workforce, including any comprehensive readiness assessment determined necessary.
(d) Family and community engagement and supports, which may include engaging or supporting families at school or at home.
(e) Activities that support postsecondary and workforce readiness, which may include job training, internship opportunities, and career counseling.
(f) Community-based support for students who have attended the schools in the area served by the pipeline, or students who are members of the community, facilitating their continued connection to the community and success in postsecondary education and the workforce.
(g) Social, health, nutrition, and mental health services and supports.
(h) Juvenile crime prevention and rehabilitation programs.
(a) A practice guide prepared by WWC reporting a “strong evidence base” or “moderate evidence base” for the corresponding practice guide recommendation;
(b) An intervention report prepared by the WWC reporting a “positive effect” or “potentially positive effect” on a
(c) A single study assessed by the Department, as appropriate, that—
(i) Is an experimental study, a quasi-experimental design study, or a well-designed and well-implemented correlational study with statistical controls for selection bias (
(ii) Includes at least one statistically significant and positive (
(1) A description of the eligible entity.
(2) A memorandum of understanding among all partner entities in the eligible entity that will assist the eligible entity to coordinate and provide pipeline services and that describes the roles the partner entities will assume.
(3) A description of the capacity of the eligible entity to coordinate and provide pipeline services at two or more full-service community schools.
(4) A comprehensive plan that includes descriptions of the following:
(a) The student, family, and school community to be served, including demographic information.
(b) A needs assessment that identifies the academic, physical, nonacademic, health, mental health, and other needs of students, families, and community residents.
(c) Annual measurable performance objectives and outcomes, including an increase in the number and percentage of families and students targeted for services each year of the program, in order to ensure that children are—
(i) Prepared for kindergarten;
(ii) Achieving academically; and
(iii) Safe, healthy, and supported by engaged parents.
(d) Pipeline services, including existing and additional pipeline services, to be coordinated and provided by the eligible entity and its partner entities, including an explanation of—
(i) Why such services have been selected;
(ii) How such services will improve student academic achievement; and
(iii) How such services will address the annual measurable performance objectives and outcomes described under (4)(c) of the application requirements.
(e) Plans to ensure that each full-service community school site has a full-time coordinator of pipeline services at such school, including a description of the applicable funding sources, plans for professional development for the personnel managing, coordinating, or delivering pipeline services, and plans for joint utilization and management of school facilities.
(f) Plans for annual evaluation based upon attainment of the performance objectives and outcomes described under (4)(c) of the application requirements.
(g) Plans for sustaining the programs and services described in the application after the grant period.
(5) An assurance that the eligible entity and its partner entities will focus services on schools eligible for a schoolwide program under section 1114(b) of the ESEA.
Applications that do not address the application requirements are not eligible for funding and will not be reviewed.
The regulations in 34 CFR part 79 apply to all applicants except federally recognized Indian Tribes.
The regulations in 34 CFR part 86 apply to institutions of higher education only.
Contingent upon the availability of funds and the quality of applications, we may make additional awards in subsequent years from the list of unfunded applications from this competition.
The Department is not bound by any estimates in this notice.
1.
(a)(i) One or more LEAs; or
(ii) The Bureau of Indian Education; and
(b) One or more community-based organizations, nonprofit organizations, or other public or private entities.
A consortium must comply with the provisions governing group applications in 34 CFR 75.127 through 75.129.
2.a.
The Bureau of Indian Education may meet the matching requirement using funds from other Federal sources.
b.
3.
4.
5.
6.
Nothing in section 4625 of the ESEA shall be construed to alter or otherwise affect the rights, remedies, and procedures afforded school or LEA employees under Federal, State, or local laws (including applicable regulations or court orders) under the terms of collective bargaining agreements, memoranda of understanding, or other agreements between such employees and their employers.
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2.
Because we plan to make successful applications available to the public, you may wish to request confidentiality of business information.
Consistent with Executive Order 12600, please designate in your application any information that you believe is exempt from disclosure under Exemption 4. In the appropriate Appendix section of your application, under “Other Attachments Form,” please list the page number or numbers on which we can find this information. For additional information please see 34 CFR 5.11(c).
3.
4.
5.
• A “page” is 8.5″ x 11″, on one side only, with 1″ margins at the top, bottom, and both sides.
• Double space (no more than three lines per vertical inch) all text in the application narrative, including titles, headings, footnotes, quotations, references, and captions, as well as all text in charts, tables, figures, and graphs.
• Use a font that is either 12 point or larger or no smaller than 10 pitch (characters per inch).
•
The recommended page limit does not apply to Part I, the cover sheet; Part II, the budget section, including the narrative budget justification; Part IV, the assurances and certifications; or the one-page abstract, the resumes, the bibliography, or the letters of support. However, the recommended page limit does apply to all of the application narrative.
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1.
Points awarded under these selection criteria are in addition to any points an applicant earns under the competitive preference priorities in this notice. The maximum score that an application may receive under the competitive preference priorities and the selection criteria is 109 points.
The selection criteria are as follows:
(a)
The Secretary considers the quality of the design of the proposed project. In determining the quality of the design of the proposed project, the Secretary considers—
(1) The extent to which the goals, objectives, and outcomes to be achieved by the proposed project are clearly specified and measurable.
(2) The extent to which the design of the proposed project is appropriate to, and will successfully address, the needs of the target population or other identified needs.
(b)
The Secretary considers the quality of the services to be provided by the proposed project. In determining the quality of project services, the Secretary considers the quality and sufficiency of strategies for ensuring equal access and treatment for eligible project participants who are members of groups that have traditionally been underrepresented based on race, color, national origin, gender, age, or disability. In addition, the Secretary considers the following—
(1) The likely impact of the services to be provided by the proposed project on the intended recipients of those services.
(2) The extent to which the services to be provided by the proposed project involve the collaboration of appropriate partners for maximizing the effectiveness of project services.
(c)
The Secretary considers the adequacy of resources for the proposed project. In determining the adequacy of resources for the proposed project, the Secretary considers the following factors—
(1) The relevance and demonstrated commitment of each partner in the proposed project to the implementation and success of the project.
(2) The extent to which the costs are reasonable in relation to the number of persons to be served and to the anticipated results and benefits.
(d)
The Secretary considers the quality of the management plan for the proposed project. In determining the quality of the management plan for the proposed project, the Secretary considers the following factors—
(1) The adequacy of the management plan to achieve the objectives of the proposed project on time and within budget, including clearly defined responsibilities, timelines, and milestones for accomplishing project tasks.
(2) The extent to which the time commitments of the project director and principal investigator and other key project personnel are appropriate and adequate to meet the objectives of the proposed project.
(e)
The Secretary considers the quality of the evaluation to be conducted of the proposed project. In determining the quality of the evaluation, the Secretary considers the following factors—
(1) The extent to which the methods of evaluation are thorough, feasible, and appropriate to the goals, objectives, and outcomes of the proposed project.
(2) The extent to which the methods of evaluation include the use of objective performance measures that are clearly related to the intended outcomes of the project and will produce quantitative and qualitative data to the extent possible.
(3) The extent to which the methods of evaluation will provide valid and reliable performance data on relevant outcomes.
2.
In addition, in making a competitive grant award, the Secretary requires various assurances, including those applicable to Federal civil rights laws that prohibit discrimination in programs or activities receiving Federal financial assistance from the Department (34 CFR 100.4, 104.5, 106.4, 108.8, and 110.23).
3.
4.
Please note that, if the total value of your currently active grants, cooperative agreements, and procurement contracts from the Federal Government exceeds $10,000,000, the reporting requirements in 2 CFR part 200, Appendix XII, require you to report certain integrity information to FAPIIS semiannually. Please review the requirements in 2 CFR part 200, Appendix XII, if this grant plus all the other Federal funds you receive exceed $10,000,000.
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If your application is not evaluated or not selected for funding, we notify you.
2.
We reference the regulations outlining the terms and conditions of an award in the
3.
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(b) At the end of your project period, you must submit a final performance report, including financial information, as directed by the Secretary. If you receive a multiyear award, you must submit an annual performance report that provides the most current performance and financial expenditure information as directed by the Secretary under 34 CFR 75.118. The Secretary may also require more frequent performance reports under 34 CFR 75.720(c). For specific requirements on reporting, please go to
(c) Under 34 CFR 75.250(b), the Secretary may provide a grantee with additional funding for data collection analysis and reporting. In this case the Secretary establishes a data collection period.
5.
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In making a continuation award, the Secretary also considers whether the grantee is operating in compliance with the assurances in its approved application, including those applicable to Federal civil rights laws that prohibit discrimination in programs or activities receiving Federal financial assistance from the Department (34 CFR 100.4, 104.5, 106.4, 108.8, and 110.23).
You may also access documents of the Department published in the
National Assessment Governing Board, Department of Education.
Notice; correction.
The National Assessment Governing Board published a document in the
Applicable February 27, 2019.
Munira Mwalimu, Executive Officer/Designated Federal Official for the Governing Board, 800 North Capitol Street NW, Suite 825, Washington, DC 20002. Phone number: (202) 357-6906. Fax: (202) 357-6945. Email:
If you use a telecommunications device for the deaf (TDD) or a text telephone (TTY), call the Federal Relay Service (FRS), toll free, at 1-800-877-8339.
In the
Following the closed session, the full Board meeting will meet from 8:25 a.m.
You may also access documents of the Department published in the
Pub. L. 107-279, Title III—National Assessment of Educational Progress § 301.
Office of Electricity, Department of Energy (DOE).
Notice of application.
Dynasty Power, Inc. (Applicant or Dynasty Power) has applied for authorization to transmit electric energy from the United States to Mexico pursuant to the Federal Power Act.
Comments, protests, or motions to intervene must be submitted on or before March 29, 2019.
Comments, protests, motions to intervene, or requests for more information should be addressed to: Office of Electricity, Mail Code: OE-20, U.S. Department of Energy, 1000 Independence Avenue SW, Washington, DC 20585-0350. Because of delays in handling conventional mail, it is recommended that documents be transmitted by overnight mail, by electronic mail to
The Department of Energy (DOE) regulates exports of electricity from the United States to a foreign country, pursuant to sections 301(b) and 402(f) of the Department of Energy Organization Act (42 U.S.C. 7151(b) and 7172(f)). Such exports require authorization under section 202(e) of the Federal Power Act (16 U.S.C. 824a(e)).
On February 15, 2019, DOE received an application from Dynasty Power for authorization to transmit electric energy from the United States to Mexico as a power marketer for a five-year term using existing international transmission facilities.
In its application, the Applicant states that it “does not own or control any electric power generation or transmission facilities and does not have a franchised electric power service area.” The electric energy that the Applicant proposes to export to Mexico would be surplus energy purchased from third parties such as electric utilities and Federal power marketing agencies pursuant to voluntary agreements. The existing international transmission facilities to be utilized by the Applicant have previously been authorized by Presidential permits issued pursuant to Executive Order 10485, as amended, and are appropriate for open access transmission by third parties.
Comments and other filings concerning Dynasty Power's application to export electric energy to Mexico should be clearly marked with OE Docket No. EA-466. An additional copy is to be provided directly to both Todd McRae, Dynasty Power Inc., 200, 638 6th Ave. SW, Calgary, AB T2P 0S4, Canada, and Bonnie A. Suchman, Esq., Suchman Law LLC, 8104 Paisley Place, Potomac, Maryland 20854.
A final decision will be made on this application after the environmental impacts have been evaluated pursuant to DOE's National Environmental Policy Act Implementing Procedures (10 CFR part 1021) and after DOE determines that the proposed action will not have an adverse impact on the sufficiency of supply or reliability of the U.S. electric power supply system.
Copies of this application will be made available, upon request, for public inspection and copying at the address provided above, by accessing the program website at
Office of Electricity, Department of Energy (DOE).
Notice of application.
Dynasty Power, Inc. (Applicant or Dynasty Power) has applied to renew its authorization to transmit electric energy from the United
Comments, protests, or motions to intervene must be submitted on or before March 29, 2019.
Comments, protests, motions to intervene, or requests for more information should be addressed to: Office of Electricity, Mail Code: OE-20, U.S. Department of Energy, 1000 Independence Avenue SW, Washington, DC 20585-0350. Because of delays in handling conventional mail, it is recommended that documents be transmitted by overnight mail, by electronic mail to
The Department of Energy (DOE) regulates exports of electricity from the United States to a foreign country, pursuant to sections 301(b) and 402(f) of the Department of Energy Organization Act (42 U.S.C. 7151(b) and 7172(f)). Such exports require authorization under section 202(e) of the Federal Power Act (16 U.S.C. 824a(e)).
On December 7, 2012, DOE issued Order No. EA-385, which authorized the Applicant to transmit electric energy from the United States to Canada as a power marketer for a five-year term using existing international transmission facilities. That authorization expired on September 26, 2017. On February 15, 2019, Dynasty Power filed an application with DOE for renewal of the export authorization contained in Order No. EA-385 for an additional five-year term.
In its application, the Applicant states that it “does not own or control any electric power generation or transmission facilities and does not have a franchised electric power service area.” The electric energy that the Applicant proposes to export to Canada would be surplus energy purchased from third parties such as electric utilities and Federal power marketing agencies pursuant to voluntary agreements. The existing international transmission facilities to be utilized by the Applicant have previously been authorized by Presidential permits issued pursuant to Executive Order 10485, as amended, and are appropriate for open access transmission by third parties.
Comments and other filings concerning Dynasty Power's application to export electric energy to Canada should be clearly marked with OE Docket No. EA-385-A. An additional copy is to be provided directly to both Todd McRae, Dynasty Power Inc., 200, 638 6th Ave. SW, Calgary, AB T2P 0S4, Canada, and Bonnie A. Suchman, Esq., Suchman Law LLC, 8104 Paisley Place, Potomac, Maryland 20854.
A final decision will be made on this application after the environmental impacts have been evaluated pursuant to DOE's National Environmental Policy Act Implementing Procedures (10 CFR part 1021) and after DOE determines that the proposed action will not have an adverse impact on the sufficiency of supply or reliability of the U.S. electric power supply system.
Copies of this application will be made available, upon request, for public inspection and copying at the address provided above, by accessing the program website at
Office of Electricity, Department of Energy (DOE).
Notice of application.
NextEra Energy Marketing, LLC, formerly known as FPL Energy Power Marketing, Inc. and NextEra Energy Power Marketing, LLC (Applicant or NEM) has applied to renew its authorization to transmit electric energy from the United States to Canada pursuant to the Federal Power Act.
Comments, protests, or motions to intervene must be submitted on or before March 29, 2019.
Comments, protests, motions to intervene, or requests for more information should be addressed to: Office of Electricity, Mail Code: OE-20, U.S. Department of Energy, 1000 Independence Avenue SW, Washington, DC 20585-0350. Because of delays in handling conventional mail, it is recommended that documents be transmitted by overnight mail, by electronic mail to
The Department of Energy (DOE) regulates exports of electricity from the United States to a foreign country, pursuant to sections 301(b) and 402(f) of the Department of Energy Organization Act (42 U.S.C. 7151(b) and 7172(f)). Such exports require authorization under section 202(e) of the Federal Power Act (16 U.S.C. 824a(e)).
On February 11, 2014, DOE issued Order No. EA-348-B, which authorized the entity then known as NextEra Energy Power Marketing, LLC and now known as NextEra Energy Marketing, LLC to transmit electric energy from the United States to Canada as a power marketer for a five-year term using existing international transmission facilities. That authorization expired on February 11, 2019. On February 8, 2019, NEM filed an application with DOE for renewal of the export authorization contained in Order No. EA-348-B for an additional five-year term.
In its application, the Applicant states that it “does not own any transmission facilities.” The electric energy that the Applicant proposes to export to Canada would be surplus energy purchased from third parties such as electric utilities and Federal power marketing agencies pursuant to voluntary agreements. The existing international transmission facilities to be utilized by the Applicant have previously been authorized by Presidential permits issued pursuant to Executive Order 10485, as amended, and are appropriate for open access transmission by third parties.
Comments and other filings concerning NEM's application to export electric energy to Canada should be clearly marked with OE Docket No. EA-348-C. An additional copy is to be provided directly to Gunnar Birgisson, NextEra Energy Marketing, LLC, 801 Pennsylvania Ave. NW, Suite 220, Washington, DC 20004.
A final decision will be made on this application after the environmental impacts have been evaluated pursuant to DOE's National Environmental Policy Act Implementing Procedures (10 CFR part 1021) and after DOE determines that the proposed action will not have an adverse impact on the sufficiency of supply or reliability of the U.S. electric power supply system.
Copies of this application will be made available, upon request, for public inspection and copying at the address provided above, by accessing the program website at
Take notice that the Commission has received the following Natural Gas Pipeline Rate and Refund Report filings:
284.123(g) Protests Due: 5 p.m. ET 4/16/19.
284.123(g) Protests Due: 5 p.m. ET 4/22/19.
The filings are accessible in the Commission's eLibrary system by clicking on the links or querying the docket number.
Any person desiring to intervene or protest in any of the above proceedings must file in accordance with Rules 211 and 214 of the Commission's Regulations (18 CFR 385.211 and 385.214) on or before 5:00 p.m. Eastern time on the specified date(s). Protests may be considered, but intervention is necessary to become a party to the proceeding.
eFiling is encouraged. More detailed information relating to filing requirements, interventions, protests, service, and qualifying facilities filings can be found at:
This is a supplemental notice in the above-referenced proceeding of Northland Power Energy Marketing (US) Inc.'s application for market-based rate authority, with an accompanying rate tariff, noting that such application includes a request for blanket authorization, under 18 CFR part 34, of future issuances of securities and assumptions of liability.
Any person desiring to intervene or to protest should file with the Federal Energy Regulatory Commission, 888 First Street NE, Washington, DC 20426, in accordance with Rules 211 and 214 of the Commission's Rules of Practice and Procedure (18 CFR 385.211 and 385.214). Anyone filing a motion to intervene or protest must serve a copy of that document on the Applicant.
Notice is hereby given that the deadline for filing protests with regard to the applicant's request for blanket authorization, under 18 CFR part 34, of future issuances of securities and assumptions of liability, is March 13, 2019.
The Commission encourages electronic submission of protests and interventions in lieu of paper, using the FERC Online links at
Persons unable to file electronically should submit an original and 5 copies of the intervention or protest to the Federal Energy Regulatory Commission, 888 First Street NE, Washington, DC 20426.
The filings in the above-referenced proceeding are accessible in the Commission's eLibrary system by clicking on the appropriate link in the above list. They are also available for electronic review in the Commission's Public Reference Room in Washington, DC. There is an eSubscription link on the website that enables subscribers to receive email notification when a document is added to a subscribed docket(s). For assistance with any FERC Online service, please email
On January 24, 2019, the Commission issued a notice through the FERC eLibrary system
On February 21, 2019, the Commission issued an order in Docket No. EL19-41-000, pursuant to section 206 of the Federal Power Act (FPA), 16 U.S.C. 824e (2012), instituting an investigation into whether the annual transmission revenue requirement reduction proposed by Cheyenne Light, Fuel and Power Company may be unjust and unreasonable.
The refund effective date in Docket No. EL19-41-000, established pursuant to section 206(b) of the FPA, will be the date of publication of this notice in the
Any interested person desiring to be heard in Docket No. EL19-41-000 must file a notice of intervention or motion to intervene, as appropriate, with the Federal Energy Regulatory Commission, 888 First Street NE, Washington, DC 20426, in accordance with Rule 214 of the Commission's Rules of Practice and Procedure, 18 CFR 385.214 (2018), within 21 days of the date of issuance of the order.
On January 22, 2019, the Commission issued a notice through the FERC eLibrary system
On January 24, 2019, the Commission issued a notice through the FERC eLibrary system
Take notice that the Commission received the following electric corporate filings:
Take notice that the Commission received the following exempt wholesale generator filings:
Take notice that the Commission received the following electric rate filings:
The filings are accessible in the Commission's eLibrary system by clicking on the links or querying the docket number.
Any person desiring to intervene or protest in any of the above proceedings must file in accordance with Rules 211 and 214 of the Commission's Regulations (18 CFR 385.211 and 385.214) on or before 5:00 p.m. Eastern time on the specified comment date. Protests may be considered, but intervention is necessary to become a party to the proceeding.
eFiling is encouraged. More detailed information relating to filing requirements, interventions, protests, service, and qualifying facilities filings can be found at:
This constitutes notice, in accordance with 18 CFR 385.2201(b), of the receipt of prohibited and exempt off-the-record communications.
Order No. 607 (64 FR 51222, September 22, 1999) requires Commission decisional employees, who make or receive a prohibited or exempt off-the-record communication relevant to the merits of a contested proceeding, to deliver to the Secretary of the Commission, a copy of the communication, if written, or a summary of the substance of any oral communication.
Prohibited communications are included in a public, non-decisional file associated with, but not a part of, the decisional record of the proceeding. Unless the Commission determines that the prohibited communication and any responses thereto should become a part of the decisional record, the prohibited off-the-record communication will not be considered by the Commission in reaching its decision. Parties to a proceeding may seek the opportunity to respond to any facts or contentions made in a prohibited off-the-record communication, and may request that the Commission place the prohibited communication and responses thereto in the decisional record. The Commission will grant such a request only when it determines that fairness so requires. Any person identified below as
Exempt off-the-record communications are included in the decisional record of the proceeding, unless the communication was with a cooperating agency as described by 40 CFR 1501.6, made under 18 CFR 385.2201(e) (1) (v).
The following is a list of off-the-record communications recently received by the Secretary of the Commission. The communications listed are grouped by docket numbers in ascending order. These filings are available for electronic review at the Commission in the Public Reference Room or may be viewed on the Commission's website at
The notificants listed below have applied under the Change in Bank Control Act (“Act”) (12 U.S.C. 1817(j)) and § 225.41 of the Board's Regulation Y (12 CFR 225.41) to acquire shares of a bank or bank holding company. The factors that are considered in acting on the notices are set forth in paragraph 7 of the Act (12 U.S.C. 1817(j)(7)).
The notices are available for immediate inspection at the Federal Reserve Bank indicated. The notices also will be available for inspection at the offices of the Board of Governors. Interested persons may express their views in writing to the Reserve Bank indicated for that notice or to the offices of the Board of Governors. Comments must be received not later than March 14, 2019.
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Agency for Healthcare Research and Quality, HHS.
Notice.
The Agency for Healthcare Research and Quality (AHRQ) is announcing a Special Emphasis Panel (SEP) meeting on AHRQ-HS-18-002, “Screening and Management of Unhealthy Alcohol Use in Primary Care: Dissemination and Implementation of PCOR Evidence (R18)
April 1, 2019 (Open on April 1st from 8:30 a.m. to 8:45 a.m. and closed for the remainder of the meeting).
Bethesda North Marriott Hotel & Conference Center, 5701 Marinelli Rd., Rockville, MD 20852.
Anyone wishing to obtain a roster of members, agenda or minutes of the non-confidential portions of this meeting should contact: Mrs. Heather Phelps, Acting Committee Management Officer, Office of Extramural Research, Education and Priority Populations, AHRQ, 5600 Fishers Lane, Rockville, Maryland 20850, Telephone: (301)427-1128.
Agenda items for this meeting are subject to change as priorities dictate.
A SEP is a group of experts in fields related to health care research who are invited by AHRQ, and agree to be available, to conduct on an as needed basis, scientific reviews of applications for AHRQ support. Individual members of the SEP do not attend regularly-scheduled meetings and do not serve for fixed terms or a long period of time. Rather, they are asked to participate in particular review meetings which require their type of expertise.
In accordance with section 10(a)(2) of the Federal Advisory Committee Act (5 U.S.C. App. 2), announcement is made of an AHRQ SEP meeting on AHRQ-HS-18-002, “Screening and Management of Unhealthy Alcohol Use in Primary Care: Dissemination and Implementation of PCOR Evidence (R18)
Each SEP meeting will commence in open session before closing to the public for the duration of the meeting. The SEP meeting referenced above will be closed to the public in accordance with the provisions set forth in 5 U.S.C. App. 2, section 10(d), 5 U.S.C. 552b(c)(4), and 5 U.S.C. 552b(c)(6). Grant applications for AHRQ-HS-18-002, “Screening and Management of Unhealthy Alcohol Use in Primary Care: Dissemination and
Agency for Healthcare Research and Quality, HHS.
Notice.
The Agency for Healthcare Research and Quality (AHRQ) is announcing a Special Emphasis Panel (SEP) meeting on Conference Grants (R13).
April 4, 2019 (Open on April 4th from 10:00 a.m. to 10:15 a.m. and closed for the remainder of the meeting).
Agency for Healthcare Research and Quality (AHRQ), 5600 Fishers Lane, Rockville, MD 20850.
Anyone wishing to obtain a roster of members, agenda or minutes of the non-confidential portions of this meeting should contact: Heather Phelps, Acting Committee Management Officer, Office of Extramural Research, Education and Priority Populations, AHRQ, 5600 Fishers Lane, Rockville, Maryland 20850, Telephone: (301) 427-1128.
Agenda items for this meeting are subject to change as priorities dictate.
An SEP is a group of experts in fields related to health care research who are invited by the Agency for Healthcare Research and Quality (AHRQ), and agree to be available, to conduct on an as needed basis, scientific reviews of applications for AHRQ support. Individual members of the Panel do not attend regularly-scheduled meetings and do not serve for fixed terms or a long period of time. Rather, they are asked to participate in particular review meetings which require their type of expertise.
In accordance with section 10(a)(2) of the Federal Advisory Committee Act (5 U.S.C. App. 2), announcement is made of an AHRQ SEP meeting on Conference Grants (R13).
Each SEP meeting will commence in open session before closing to the public for the duration of the meeting. The SEP meeting referenced above will be closed to the public in accordance with the provisions set forth in 5 U.S.C. App. 2, section 10(d), 5 U.S.C. 552b(c)(4), and 5 U.S.C. 552b(c)(6). Grant applications for Conference Grants (R13) are to be reviewed and discussed at this meeting. The grant applications and the discussions could disclose confidential trade secrets or commercial property such as patentable material, and personal information concerning individuals associated with the grant applications, the disclosure of which would constitute a clearly unwarranted invasion of personal privacy.
Food and Drug Administration, HHS.
Notice of availability.
The Food and Drug Administration (FDA or Agency) is announcing the availability of a draft guidance for industry entitled “Quality Considerations for Continuous Manufacturing.” This draft guidance provides information regarding FDA's current thinking on the quality considerations for continuous manufacturing of small molecule, solid oral drug products that are regulated by the Center for Drug Evaluation and Research (CDER). The draft guidance describes several key quality considerations and provides recommendations for how applicants should address these considerations in new drug applications (NDAs), abbreviated new drug applications (ANDAs), and supplemental NDAs and ANDAs, for small molecule, solid oral drug products that are produced via a continuous manufacturing process. FDA supports the development and implementation of continuous manufacturing for drug substances and all finished dosage forms where appropriate, including those submitted in NDAs, ANDAs, drug master files, biologics license applications (BLAs), and nonapplication over the counter products. Scientific principles described in this draft guidance may also be applicable to continuous manufacturing technologies used for these drugs. However, this draft guidance is not intended to provide recommendations specific to continuous manufacturing technologies used for biological products under a BLA.
Submit either electronic or written comments on the draft guidance by May 28, 2019 to ensure that the Agency considers your comment on this draft guidance before it begins work on the final version of the guidance.
You may submit comments on any guidance at any time as follows:
Submit electronic comments in the following way:
•
• If you want to submit a comment with confidential information that you do not wish to be made available to the public, submit the comment as a written/paper submission and in the manner detailed (see “Written/Paper Submissions” and “Instructions”).
Submit written/paper submissions as follows:
•
• For written/paper comments submitted to the Dockets Management Staff, FDA will post your comment, as well as any attachments, except for information submitted, marked and
• Confidential Submissions—To submit a comment with confidential information that you do not wish to be made publicly available, submit your comments only as a written/paper submission. You should submit two copies total. One copy will include the information you claim to be confidential with a heading or cover note that states “THIS DOCUMENT CONTAINS CONFIDENTIAL INFORMATION.” The Agency will review this copy, including the claimed confidential information, in its consideration of comments. The second copy, which will have the claimed confidential information redacted/blacked out, will be available for public viewing and posted on
You may submit comments on any guidance at any time (see 21 CFR 10.115(g)(5)).
Submit written requests for single copies of the draft guidance to the Division of Drug Information, Center for Drug Evaluation and Research, Food and Drug Administration, 10001 New Hampshire Ave., Hillandale Building, 4th Floor, Silver Spring, MD 20993-0002. Send one self-addressed adhesive label to assist that office in processing your requests. See the
Sau L. Lee, Center for Drug Evaluation and Research, Food and Drug Administration (HFD-600), 10903 New Hampshire Ave., Bldg. 22, Rm. 2130, Silver Spring, MD 20993-0002, 301-796-2905.
FDA is announcing the availability of a draft guidance for industry entitled “Quality Considerations for Continuous Manufacturing.” The draft guidance was prepared by CDER's Office of Pharmaceutical Quality, which is committed to supporting and enabling pharmaceutical innovation and modernization as part of the Agency's mission to protect and promote public health. While the implementation of emerging technology, such as continuous manufacturing, is critical to modernizing pharmaceutical manufacturing and improving quality, FDA also recognizes that innovative approaches to manufacturing may represent challenges to industry and regulators. By the very nature of an approach being innovative, a limited knowledge and experiential base about the technology may exist. Pharmaceutical companies may have concerns that using continuous manufacturing could result in delays while FDA reviewers and investigators familiarize themselves with the new technologies and determine how they fit within existing regulatory approaches.
This draft guidance provides information regarding FDA's current thinking on the quality considerations for continuous manufacturing of small molecule, solid oral drug products that are regulated by CDER. The draft guidance describes several key quality considerations and provides recommendations for how applicants should address these considerations in NDAs, ANDAs, and supplemental NDAs and ANDAs, for small molecule, solid oral drug products that are produced via a continuous manufacturing process.
The draft guidance takes into account the comments that were submitted to Docket No. FDA-2017-N-2697 (“Submission of Proposed Recommendations for Industry on Developing Continuous Manufacturing of Solid Dosage Drug Products in Pharmaceutical Manufacturing; Establishment of Public Docket”). FDA invites general comments on the quality considerations described in the draft guidance, including comments on control strategy, facility, and process validation considerations for continuous manufacturing of small molecule, solid oral drug products.
In addition to this draft guidance, pharmaceutical manufacturers with product-specific continuous manufacturing questions may submit a proposal to the Emerging Technology program. Refer to FDA guidance for industry, “Advancement of Emerging Technology Applications for Pharmaceutical Innovation and Modernization” (September 2017) at
This draft guidance is being issued consistent with FDA's good guidance practices regulation (21 CFR 10.115). The draft guidance, when finalized, will represent the current thinking of FDA on “Quality Considerations for Continuous Manufacturing.” It does not establish any rights for any person and is not binding on FDA or the public. You can use an alternative approach if it satisfies the requirements of the applicable statutes and regulations. This guidance is not subject to Executive Order 12866.
In addition to comments on the draft guidance generally, FDA is requesting comments and related supporting information on the following topics: (1) Data storage and handling from process analytical technology systems, (2) potential approaches for situations where direct attribute measurement is not possible (
This draft guidance contains information collection provisions that are subject to review by the Office of Management and Budget (OMB) under the Paperwork Reduction Act of 1995 (PRA) (44 U.S.C. 3501-3520). The collections of information in 21 CFR parts 210-211 have been approved under OMB control number 0910-0139. The submission of INDs under 21 CFR 312.23 is approved by OMB control
Persons with access to the internet may obtain the draft guidance at either
Pursuant to section 10(d) of the Federal Advisory Committee Act, as amended, notice is hereby given of the following meeting.
The meeting will be closed to the public in accordance with the provisions set forth in sections 552b(c)(4) and 552b(c)(6), Title 5 U.S.C., as amended. The grant applications and the discussions could disclose confidential trade secrets or commercial property such as patentable material, and personal information concerning individuals associated with the grant applications, the disclosure of which would constitute a clearly unwarranted invasion of personal privacy.
Pursuant to section 10(d) of the Federal Advisory Committee Act, as amended, notice is hereby given of the following meeting.
The meeting will be closed to the public in accordance with the provisions set forth in sections 552b(c)(4) and 552b(c)(6), Title 5 U.S.C., as amended. The grant applications and the discussions could disclose confidential trade secrets or commercial property such as patentable material, and personal information concerning individuals associated with the grant applications, the disclosure of which would constitute a clearly unwarranted invasion of personal privacy.
Pursuant to section 10(d) of the Federal Advisory Committee Act, as amended, notice is hereby given of the following meetings.
The meetings will be closed to the public in accordance with the provisions set forth in sections 552b(c)(4) and 552b(c)(6), Title 5 U.S.C., as amended. The grant applications and the discussions could disclose confidential trade secrets or commercial property such as patentable material, and personal information concerning individuals associated with the grant applications, the disclosure of which would constitute a clearly unwarranted invasion of personal privacy.
This notice is being published less than 15 days prior to the meeting due to the timing limitations imposed by the review and funding cycle.
Pursuant to section 10(d) of the Federal Advisory Committee Act, as amended, notice is hereby given of the following meeting.
The meeting will be closed to the public in accordance with the provisions set forth in sections 552b(c)(4) and 552b(c)(6), Title 5 U.S.C., as amended. The grant applications and the discussions could disclose confidential trade secrets or commercial property such as patentable material, and personal information concerning individuals associated with the grant applications, the disclosure of which would constitute a clearly unwarranted invasion of personal privacy.
Pursuant to section 10(d) of the Federal Advisory Committee Act, as amended, notice is hereby given of the following meeting.
The meeting will be closed to the public in accordance with the provisions set forth in sections 552b(c)(4) and 552b(c)(6), Title 5 U.S.C., as amended. The grant applications and the discussions could disclose confidential trade secrets or commercial property such as patentable material, and personal information concerning individuals associated with the grant applications, the disclosure of which would constitute a clearly unwarranted invasion of personal privacy.
National Institutes of Health, HHS.
Notice.
In compliance with the Paperwork Reduction Act of 1995, the National Institutes of Health (NIH) has submitted to the Office of Management and Budget (OMB) a request for review and approval of the information collection listed below.
Comments regarding this information collection are best assured of having their full effect if received within 30-days of the date of this publication.
Written comments and/or suggestions regarding the item(s) contained in this notice, especially regarding the estimated public burden and associated response time, should be directed to the: Office of Management and Budget, Office of Regulatory Affairs,
To request more information on the proposed project or to obtain a copy of the data collection plans and instruments, contact: Ms. Dione Washington, Health Science Policy Analyst, Office of Strategic Planning, Initiative Development and Analysis, 5601 Fishers Lane, Rockville, Maryland 20892 or call non-toll-free number (240) 669-2100 or Email your request, including your address to:
This proposed information collection was previously published in the
The National Institute of Allergy and Infectious Diseases (NIAID), National Institutes of Health, may not conduct or sponsor, and the respondent is not required to respond to, an information collection that has been extended, revised, or implemented on or after October 1, 1995, unless it displays a currently valid OMB control number.
In compliance with Section 3507(a)(1)(D) of the Paperwork Reduction Act of 1995, the National Institutes of Health (NIH) has submitted to the Office of Management and Budget (OMB) a request for review and approval of the information collection listed below.
OMB approval is requested for 3 years. There are no costs to respondents other than their time. The total estimated annualized burden hours are 2,511.
U.S. Coast Guard, Department of Homeland Security.
Notice of Federal advisory committee meeting.
The National Offshore Safety Advisory will meet in New Orleans, Louisiana to discuss Committee matters relating to the safety of operations and other matters affecting the offshore oil and gas industry. All meetings will be open to the public.
All meetings will be held at Omni Riverfront Hotel, 701 Convention Center Boulevard, New Orleans, Louisiana 70130, (504) 524-8200,
For information on facilities or services for individuals with disabilities or to request special assistance at the meetings, contact the individuals listed in the
Commander Jose Perez, Designated Federal Officer of the National Offshore Safety Advisory Committee, Commandant (CG-OES-2), U.S. Coast Guard, 2703 Martin Luther King Jr. Avenue SE, Stop 7509, Washington, DC 20593-7509; telephone (202) 372-1410, fax (202) 372-8382 or email
Notice of this meeting is in compliance with the Federal Advisory Committee Act, (Title 5 U.S.C. Appendix). The National Offshore Safety Advisory Committee provides advice and recommendations to the Department of Homeland Security on matters relating to activities directly involved with or in support of the exploration of offshore mineral and energy resources insofar as they relate to matters within Coast Guard jurisdiction.
The National Offshore Safety Advisory Committee's The Use of Offshore Supply Vessels and Other Non-Purpose Built Vessels for Restoration/Recovery Activities Subcommittee will meet on March 19, 2019 from 1:00 p.m. to 4:00 p.m. (Central Time) to review,
The National Offshore Safety Advisory Committee will hold a public meeting on March 20, 2019 from 8 a.m. to 6 p.m. (Central Time) to review and discuss the progress of, and any reports and recommendations received from, the above listed Subcommittee from their deliberations. The Committee will then use this information and consider public comments in discussing and formulating recommendations to the United States Coast Guard. Public comments or questions will be taken at the discretion of the Designated Federal Officer during the discussion and recommendation portions of the meeting and during the public comment period, see Agenda item (5). A complete agenda for the March 20, 2019 full Committee meeting is as follows:
(1) Welcoming remarks.
(2) General administration and acceptance of minutes from the September 11, 2018 National Offshore Safety Advisory Committee public meeting.
(3) Presentation on best practices for personnel transfers offshore.
(4) Current business—Presentation and discussion of progress from The Use of Offshore Supply Vessels and Other Non-Purpose Built Vessels for Restoration/Recovery Activities Subcommittee.
(5) New Business—
(a) Status of National Offshore Safety Advisory Committee recommendations to the U.S. Coast Guard.
(b) Presentation and discussion by the Federal Emergency Management Agency on responding to a presidentially declared disaster.
(c) Introduction of a new task statement: Formation of a standing Regulatory Review Subcommittee
(d) Presentation on lifeboat safety.
(e) Bureau of Safety and Environmental Enforcement Update.
(f) Maritime Administration Update.
(g) International Association of Drilling Contractors Presentation.
(5) Public comment period.
A copy of all meeting documentation will be available at
Public comments or questions will be taken throughout the meeting as the committee discusses the issues and prior to deliberations and voting. There will also be a public comment period at the end of the meeting. Speakers are requested to limit their comments to 3 minutes. Please note that the public comment period may end before the period allotted, following the last call for comments. Contact the individuals listed in the
Federal Emergency Management Agency, DHS.
Notice.
Comments are requested on proposed flood hazard determinations, which may include additions or modifications of any Base Flood Elevation (BFE), base flood depth, Special Flood Hazard Area (SFHA) boundary or zone designation, or regulatory floodway on the Flood Insurance Rate Maps (FIRMs), and where applicable, in the supporting Flood Insurance Study (FIS) reports for the communities listed in the table below. The purpose of this notice is to seek general information and comment regarding the preliminary FIRM, and where applicable, the FIS report that the Federal Emergency Management Agency (FEMA) has provided to the affected communities. The FIRM and FIS report are the basis of the floodplain management measures that the community is required either to adopt or to show evidence of having in effect in order to qualify or remain qualified for participation in the National Flood Insurance Program (NFIP). In addition, the FIRM and FIS report, once effective, will be used by insurance agents and others to calculate appropriate flood insurance premium rates for new buildings and the contents of those buildings.
Comments are to be submitted on or before May 28, 2019.
The Preliminary FIRM, and where applicable, the FIS report for each community are available for inspection at both the online location
You may submit comments, identified by Docket No. FEMA-B-1906, to Rick Sacbibit, Chief, Engineering Services Branch, Federal Insurance and Mitigation Administration, FEMA, 400 C Street SW, Washington, DC 20472, (202) 646-7659, or (email)
Rick Sacbibit, Chief, Engineering Services Branch, Federal Insurance and Mitigation Administration, FEMA, 400 C Street SW, Washington, DC 20472, (202) 646-7659, or (email)
FEMA proposes to make flood hazard determinations for each community listed below, in accordance with section 110 of the Flood Disaster Protection Act of 1973, 42 U.S.C. 4104, and 44 CFR 67.4(a).
These proposed flood hazard determinations, together with the floodplain management criteria required by 44 CFR 60.3, are the minimum that are required. They should not be construed to mean that the community must change any existing ordinances that are more stringent in their floodplain management requirements. The community may at any time enact stricter requirements of its own or pursuant to policies established by other Federal, State, or regional entities. These flood hazard determinations are used to meet the floodplain management requirements of the NFIP and are used to calculate the appropriate flood insurance premium rates for new buildings built after the FIRM and FIS report become effective.
The communities affected by the flood hazard determinations are provided in the tables below. Any request for reconsideration of the revised flood hazard information shown on the Preliminary FIRM and FIS report that satisfies the data requirements
Use of a Scientific Resolution Panel (SRP) is available to communities in support of the appeal resolution process. SRPs are independent panels of experts in hydrology, hydraulics, and other pertinent sciences established to review conflicting scientific and technical data and provide recommendations for resolution. Use of the SRP only may be exercised after FEMA and local communities have been engaged in a collaborative consultation process for at least 60 days without a mutually acceptable resolution of an appeal. Additional information regarding the SRP process can be found online at
The watersheds and/or communities affected are listed in the tables below. The Preliminary FIRM, and where applicable, FIS report for each community are available for inspection at both the online location
Federal Emergency Management Agency, DHS.
Notice.
Flood hazard determinations, which may include additions or modifications of Base Flood Elevations (BFEs), base flood depths, Special Flood Hazard Area (SFHA) boundaries or zone designations, or regulatory floodways on the Flood Insurance Rate Maps (FIRMs) and where applicable, in the supporting Flood Insurance Study (FIS) reports have been made final for the communities listed in the table below.
The FIRM and FIS report are the basis of the floodplain management measures that a community is required either to adopt or to show evidence of having in effect in order to qualify or remain qualified for participation in the Federal Emergency Management Agency's (FEMA's) National Flood Insurance Program (NFIP). In addition, the FIRM and FIS report are used by insurance agents and others to calculate appropriate flood insurance premium rates for buildings and the contents of those buildings.
The date of May 2, 2019 has been established for the FIRM and, where applicable, the supporting FIS report
The FIRM, and if applicable, the FIS report containing the final flood hazard information for each community is available for inspection at the respective Community Map Repository address listed in the tables below and will be available online through the FEMA Map Service Center at
Rick Sacbibit, Chief, Engineering Services Branch, Federal Insurance and Mitigation Administration, FEMA, 400 C Street SW, Washington, DC 20472, (202) 646-7659, or (email)
The Federal Emergency Management Agency (FEMA) makes the final determinations listed below for the new or modified flood hazard information for each community listed. Notification of these changes has been published in newspapers of local circulation and 90 days have elapsed since that publication. The Deputy Associate Administrator for Insurance and Mitigation has resolved any appeals resulting from this notification.
This final notice is issued in accordance with section 110 of the Flood Disaster Protection Act of 1973, 42 U.S.C. 4104, and 44 CFR part 67. FEMA has developed criteria for floodplain management in floodprone areas in accordance with 44 CFR part 60.
Interested lessees and owners of real property are encouraged to review the new or revised FIRM and FIS report available at the address cited below for each community or online through the FEMA Map Service Center at
The flood hazard determinations are made final in the watersheds and/or communities listed in the table below.
Federal Emergency Management Agency, DHS.
Notice.
Comments are requested on proposed flood hazard determinations, which may include additions or modifications of any Base Flood Elevation (BFE), base flood depth, Special Flood Hazard Area (SFHA) boundary or zone designation, or regulatory floodway on the Flood Insurance Rate Maps (FIRMs), and where applicable, in the supporting Flood Insurance Study (FIS) reports for the communities listed in the table below. The purpose of this notice is to seek general information and comment regarding the preliminary FIRM, and where applicable, the FIS report that the Federal Emergency Management Agency (FEMA) has provided to the affected communities. The FIRM and FIS report are the basis of the floodplain management measures that the community is required either to adopt or to show evidence of having in effect in order to qualify or remain qualified for participation in the National Flood Insurance Program (NFIP). In addition, the FIRM and FIS report, once effective, will be used by insurance agents and others to calculate appropriate flood insurance premium rates for new buildings and the contents of those buildings.
Comments are to be submitted on or before May 28, 2019.
The Preliminary FIRM, and where applicable, the FIS report for each community are available for inspection at both the online location
You may submit comments, identified by Docket No. FEMA-B-1905, to Rick Sacbibit, Chief, Engineering Services Branch, Federal Insurance and Mitigation Administration, FEMA, 400 C Street SW, Washington, DC 20472, (202) 646-7659, or (email)
Rick Sacbibit, Chief, Engineering Services Branch, Federal Insurance and Mitigation Administration, FEMA, 400 C Street SW, Washington, DC 20472, (202) 646-7659, or (email)
FEMA proposes to make flood hazard determinations for each community listed below, in accordance with section 110 of the Flood Disaster Protection Act of 1973, 42 U.S.C. 4104, and 44 CFR 67.4(a).
These proposed flood hazard determinations, together with the floodplain management criteria required by 44 CFR 60.3, are the minimum that are required. They should not be construed to mean that the community must change any existing ordinances that are more stringent in their floodplain management requirements. The community may at any time enact stricter requirements of its own or pursuant to policies established by other Federal, State, or regional entities. These flood hazard determinations are used to meet the floodplain management requirements of the NFIP and are used to calculate the appropriate flood insurance premium rates for new buildings built after the FIRM and FIS report become effective.
The communities affected by the flood hazard determinations are provided in the tables below. Any request for reconsideration of the revised flood hazard information shown on the Preliminary FIRM and FIS report that satisfies the data requirements outlined in 44 CFR 67.6(b) is considered an appeal. Comments unrelated to the flood hazard determinations also will be considered before the FIRM and FIS report become effective.
Use of a Scientific Resolution Panel (SRP) is available to communities in support of the appeal resolution process. SRPs are independent panels of experts in hydrology, hydraulics, and other pertinent sciences established to review conflicting scientific and technical data and provide recommendations for resolution. Use of the SRP only may be exercised after FEMA and local communities have been engaged in a collaborative consultation process for at least 60 days without a mutually acceptable resolution of an appeal. Additional information regarding the SRP process can be found online at
The watersheds and/or communities affected are listed in the tables below. The Preliminary FIRM, and where applicable, FIS report for each community are available for inspection at both the online location
Federal Emergency Management Agency, DHS.
Notice.
Flood hazard determinations, which may include additions or modifications of Base Flood Elevations (BFEs), base flood depths, Special Flood Hazard Area (SFHA) boundaries or zone designations, or regulatory floodways on the Flood Insurance Rate Maps (FIRMs) and where applicable, in the supporting Flood Insurance Study (FIS) reports have been made final for the communities listed in the table below.
The FIRM and FIS report are the basis of the floodplain management measures that a community is required either to adopt or to show evidence of having in effect in order to qualify or remain qualified for participation in the Federal Emergency Management Agency's (FEMA's) National Flood Insurance Program (NFIP). In addition, the FIRM and FIS report are used by insurance agents and others to calculate appropriate flood insurance premium rates for buildings and the contents of those buildings.
The date of March 21, 2019 has been established for the FIRM and, where applicable, the supporting FIS report showing the new or modified flood hazard information for each community.
The FIRM, and if applicable, the FIS report containing the final flood hazard information for each community is available for inspection at the respective Community Map Repository address listed in the tables below and will be available online through the FEMA Map Service Center at
Rick Sacbibit, Chief, Engineering Services Branch, Federal Insurance and Mitigation Administration, FEMA, 400 C Street SW, Washington, DC 20472, (202) 646-7659, or (email)
The Federal Emergency Management Agency (FEMA) makes the final determinations listed below for the new or modified flood hazard information for each community listed. Notification of these changes has been published in newspapers of local circulation and 90 days have elapsed since that publication. The Deputy Associate Administrator for Insurance and Mitigation has resolved any appeals resulting from this notification.
This final notice is issued in accordance with section 110 of the
Interested lessees and owners of real property are encouraged to review the new or revised FIRM and FIS report available at the address cited below for each community or online through the FEMA Map Service Center at
The flood hazard determinations are made final in the watersheds and/or communities listed in the table below.
Federal Emergency Management Agency, DHS.
Notice.
Flood hazard determinations, which may include additions or modifications of Base Flood Elevations (BFEs), base flood depths, Special Flood Hazard Area (SFHA) boundaries or zone designations, or regulatory floodways on the Flood Insurance Rate Maps (FIRMs) and where applicable, in the supporting Flood Insurance Study (FIS) reports have been made final for the communities listed in the table below.
The FIRM and FIS report are the basis of the floodplain management measures that a community is required either to adopt or to show evidence of having in effect in order to qualify or remain qualified for participation in the Federal Emergency Management Agency's (FEMA's) National Flood Insurance Program (NFIP). In addition, the FIRM and FIS report are used by insurance agents and others to calculate appropriate flood insurance premium rates for buildings and the contents of those buildings.
The date of April 19, 2019 has been established for the FIRM and, where applicable, the supporting FIS report showing the new or modified flood hazard information for each community.
The FIRM, and if applicable, the FIS report containing the final flood hazard information for each community is available for inspection at the respective Community Map Repository address listed in the tables below and will be available online through the FEMA Map Service Center at
Rick Sacbibit, Chief, Engineering Services Branch, Federal Insurance and Mitigation Administration, FEMA, 400 C Street SW, Washington, DC 20472, (202) 646-7659, or (email)
The Federal Emergency Management Agency (FEMA) makes the final determinations listed below for the new or modified flood hazard information for each community listed. Notification of these changes has been published in newspapers of local circulation and 90 days have elapsed since that publication. The Deputy Associate Administrator for Insurance and Mitigation has resolved any appeals resulting from this notification.
This final notice is issued in accordance with section 110 of the Flood Disaster Protection Act of 1973, 42 U.S.C. 4104, and 44 CFR part 67. FEMA has developed criteria for floodplain management in floodprone areas in accordance with 44 CFR part 60.
Interested lessees and owners of real property are encouraged to review the new or revised FIRM and FIS report available at the address cited below for each community or online through the FEMA Map Service Center at
The flood hazard determinations are made final in the watersheds and/or communities listed in the table below.
Federal Emergency Management Agency, DHS.
Notice.
New or modified Base (1-percent annual chance) Flood Elevations (BFEs), base flood depths, Special Flood Hazard Area (SFHA) boundaries or zone designations, and/or regulatory floodways (hereinafter referred to as flood hazard determinations) as shown on the indicated Letter of Map Revision (LOMR) for each of the communities listed in the table below are finalized. Each LOMR revises the Flood Insurance Rate Maps (FIRMs), and in some cases the Flood Insurance Study (FIS) reports, currently in effect for the listed communities. The flood hazard determinations modified by each LOMR will be used to calculate flood insurance premium rates for new buildings and their contents.
Each LOMR was finalized as in the table below.
Each LOMR is available for inspection at both the respective Community Map Repository address listed in the table below and online through the FEMA Map Service Center at
Rick Sacbibit, Chief, Engineering Services Branch, Federal Insurance and Mitigation Administration, FEMA, 400 C Street SW, Washington, DC 20472, (202) 646-7659, or (email)
The Federal Emergency Management Agency (FEMA) makes the final flood hazard determinations as shown in the LOMRs for each community listed in the table below. Notice of these modified flood hazard determinations has been published in newspapers of local circulation and 90 days have elapsed since that publication. The Deputy Associate Administrator for Insurance and Mitigation has resolved any appeals resulting from this notification.
The modified flood hazard determinations are made pursuant to section 206 of the Flood Disaster Protection Act of 1973, 42 U.S.C. 4105, and are in accordance with the National Flood Insurance Act of 1968, 42 U.S.C. 4001
For rating purposes, the currently effective community number is shown and must be used for all new policies and renewals.
The new or modified flood hazard information is the basis for the floodplain management measures that the community is required either to adopt or to show evidence of being already in effect in order to remain qualified for participation in the National Flood Insurance Program (NFIP).
This new or modified flood hazard information, together with the floodplain management criteria required by 44 CFR 60.3, are the minimum that are required. They should not be construed to mean that the community must change any existing ordinances that are more stringent in their floodplain management requirements. The community may at any time enact stricter requirements of its own or pursuant to policies established by other Federal, State, or regional entities.
This new or modified flood hazard determinations are used to meet the floodplain management requirements of the NFIP and are used to calculate the appropriate flood insurance premium rates for new buildings, and for the
Interested lessees and owners of real property are encouraged to review the final flood hazard information available at the address cited below for each community or online through the FEMA Map Service Center at
Federal Emergency Management Agency, DHS.
Notice.
Flood hazard determinations, which may include additions or modifications of Base Flood Elevations (BFEs), base flood depths, Special Flood Hazard Area (SFHA) boundaries or zone designations, or regulatory floodways on the Flood Insurance Rate Maps (FIRMs) and where applicable, in the supporting Flood Insurance Study (FIS) reports have been made final for the communities listed in the table below.
The FIRM and FIS report are the basis of the floodplain management measures that a community is required either to adopt or to show evidence of having in effect in order to qualify or remain qualified for participation in the Federal Emergency Management Agency's (FEMA's) National Flood Insurance Program (NFIP). In addition, the FIRM and FIS report are used by insurance agents and others to calculate appropriate flood insurance premium rates for buildings and the contents of those buildings.
The date of May 16, 2019 has been established for the FIRM and, where applicable, the supporting FIS report showing the new or modified flood hazard information for each community.
The FIRM, and if applicable, the FIS report containing the final flood hazard information for each community is available for inspection at the respective Community Map Repository address listed in the tables below and will be available online through the FEMA Map Service Center at
Rick Sacbibit, Chief, Engineering Services Branch, Federal Insurance and Mitigation Administration, FEMA, 400 C Street SW, Washington, DC 20472, (202) 646-7659, or (email)
The Federal Emergency Management Agency (FEMA) makes the final determinations listed below for the new or modified flood hazard information for each community listed. Notification of these changes has been published in newspapers of local circulation and 90 days have elapsed since that publication. The Deputy Associate Administrator for Insurance and Mitigation has resolved any appeals resulting from this notification.
This final notice is issued in accordance with section 110 of the Flood Disaster Protection Act of 1973, 42 U.S.C. 4104, and 44 CFR part 67. FEMA has developed criteria for floodplain management in floodprone areas in accordance with 44 CFR part 60.
Interested lessees and owners of real property are encouraged to review the new or revised FIRM and FIS report available at the address cited below for each community or online through the FEMA Map Service Center at
The flood hazard determinations are made final in the watersheds and/or communities listed in the table below.
Federal Emergency Management Agency, DHS.
Notice.
This notice lists communities where the addition or modification of Base Flood Elevations (BFEs), base flood depths, Special Flood Hazard Area (SFHA) boundaries or zone designations, or the regulatory floodway (hereinafter referred to as flood hazard determinations), as shown on the Flood Insurance Rate Maps (FIRMs), and where applicable, in the supporting Flood Insurance Study (FIS) reports, prepared by the Federal Emergency Management Agency (FEMA) for each community, is appropriate because of new scientific or technical data. The FIRM, and where applicable, portions of the FIS report, have been revised to reflect these flood hazard determinations through issuance of a Letter of Map Revision (LOMR), in accordance with Federal Regulations. The LOMR will be used by insurance agents and others to calculate appropriate flood insurance premium rates for new buildings and the contents of those buildings. For rating purposes, the currently effective community number is shown in the table below and must be used for all new policies and renewals.
These flood hazard determinations will be finalized on the dates listed in the table below and revise the FIRM panels and FIS report in effect prior to this determination for the listed communities.
From the date of the second publication of notification of these changes in a newspaper of local circulation, any person has 90 days in which to request through the community that the Deputy Associate Administrator for Insurance and Mitigation reconsider the changes. The flood hazard determination information may be changed during the 90-day period.
The affected communities are listed in the table below. Revised
Submit comments and/or appeals to the Chief Executive Officer of the community as listed in the table below.
Rick Sacbibit, Chief, Engineering Services Branch, Federal Insurance and Mitigation Administration, FEMA, 400 C Street SW, Washington, DC 20472, (202) 646-7659, or (email)
The specific flood hazard determinations are not described for each community in this notice. However, the online location and local community map repository address where the flood hazard determination information is available for inspection is provided.
Any request for reconsideration of flood hazard determinations must be submitted to the Chief Executive Officer of the community as listed in the table below.
The modifications are made pursuant to section 201 of the Flood Disaster Protection Act of 1973, 42 U.S.C. 4105, and are in accordance with the National Flood Insurance Act of 1968, 42 U.S.C. 4001
The FIRM and FIS report are the basis of the floodplain management measures that the community is required either to adopt or to show evidence of having in effect in order to qualify or remain qualified for participation in the National Flood Insurance Program (NFIP).
These flood hazard determinations, together with the floodplain management criteria required by 44 CFR 60.3, are the minimum that are required. They should not be construed to mean that the community must change any existing ordinances that are more stringent in their floodplain management requirements. The community may at any time enact stricter requirements of its own or pursuant to policies established by other Federal, State, or regional entities. The flood hazard determinations are in accordance with 44 CFR 65.4.
The affected communities are listed in the following table. Flood hazard determination information for each community is available for inspection at both the online location and the respective community map repository address listed in the table below. Additionally, the current effective FIRM and FIS report for each community are accessible online through the FEMA Map Service Center at
Federal Emergency Management Agency, DHS.
Notice.
This notice lists communities where the addition or modification of Base Flood Elevations (BFEs), base flood depths, Special Flood Hazard Area (SFHA) boundaries or zone designations, or the regulatory floodway (hereinafter referred to as flood hazard determinations), as shown on the Flood Insurance Rate Maps (FIRMs), and where applicable, in the supporting Flood Insurance Study (FIS) reports, prepared by the Federal Emergency Management Agency (FEMA) for each community, is appropriate because of new scientific or technical data. The FIRM, and where applicable, portions of the FIS report, have been revised to reflect these flood hazard determinations through issuance of a Letter of Map Revision (LOMR), in accordance with Federal Regulations. The LOMR will be used by insurance agents and others to calculate appropriate flood insurance premium rates for new buildings and the contents of those buildings. For rating purposes, the currently effective community number is shown in the table below and must be used for all new policies and renewals.
These flood hazard determinations will be finalized on the dates listed in the table below and revise the FIRM panels and FIS report in effect prior to this determination for the listed communities.
From the date of the second publication of notification of these changes in a newspaper of local circulation, any person has 90 days in which to request through the community that the Deputy Associate Administrator for Insurance and Mitigation reconsider the changes. The flood hazard determination information may be changed during the 90-day period.
The affected communities are listed in the table below. Revised flood hazard information for each community is available for inspection at both the online location and the respective community map repository address listed in the table below. Additionally, the current effective FIRM and FIS report for each community are accessible online through the FEMA Map Service Center at
Submit comments and/or appeals to the Chief Executive Officer of the community as listed in the table below.
Rick Sacbibit, Chief, Engineering Services Branch, Federal Insurance and Mitigation Administration, FEMA, 400 C Street SW, Washington, DC 20472, (202) 646-7659, or (email)
The specific flood hazard determinations are not described for each community in this notice. However, the online location and local community map repository address where the flood hazard determination information is available for inspection is provided.
Any request for reconsideration of flood hazard determinations must be submitted to the Chief Executive Officer of the community as listed in the table below.
The modifications are made pursuant to section 201 of the Flood Disaster Protection Act of 1973, 42 U.S.C. 4105, and are in accordance with the National Flood Insurance Act of 1968, 42 U.S.C. 4001
The FIRM and FIS report are the basis of the floodplain management measures that the community is required either to adopt or to show evidence of having in effect in order to qualify or remain qualified for participation in the National Flood Insurance Program (NFIP).
These flood hazard determinations, together with the floodplain management criteria required by 44 CFR 60.3, are the minimum that are required. They should not be construed to mean that the community must change any existing ordinances that are more stringent in their floodplain management requirements. The community may at any time enact stricter requirements of its own or pursuant to policies established by other Federal, State, or regional entities. The
The affected communities are listed in the following table. Flood hazard determination information for each community is available for inspection at both the online location and the respective community map repository address listed in the table below. Additionally, the current effective FIRM and FIS report for each community are accessible online through the FEMA Map Service Center at
Federal Emergency Management Agency, DHS.
Notice.
Flood hazard determinations, which may include additions or modifications of Base Flood Elevations (BFEs), base flood depths, Special Flood Hazard Area (SFHA) boundaries or zone designations, or regulatory floodways on the Flood Insurance Rate Maps (FIRMs) and where applicable, in the supporting Flood Insurance Study (FIS) reports have been made final for the communities listed in the table below.
The FIRM and FIS report are the basis of the floodplain management measures that a community is required either to adopt or to show evidence of having in effect in order to qualify or remain qualified for participation in the Federal Emergency Management Agency's (FEMA's) National Flood Insurance Program (NFIP). In addition, the FIRM and FIS report are used by insurance agents and others to calculate appropriate flood insurance premium rates for buildings and the contents of those buildings.
The date of April 5, 2019 has been established for the FIRM and, where applicable, the supporting FIS report showing the new or modified flood hazard information for each community.
The FIRM, and if applicable, the FIS report containing the final flood hazard information for each community is available for inspection at the respective Community Map Repository address listed in the tables below and will be available online through the FEMA Map Service Center at
Rick Sacbibit, Chief, Engineering Services Branch, Federal Insurance and Mitigation Administration, FEMA, 400 C Street SW, Washington, DC 20472, (202) 646-7659, or (email)
The Federal Emergency Management Agency (FEMA) makes the final determinations listed below for the new or modified flood hazard information for each
This final notice is issued in accordance with section 110 of the Flood Disaster Protection Act of 1973, 42 U.S.C. 4104, and 44 CFR part 67. FEMA has developed criteria for floodplain management in floodprone areas in accordance with 44 CFR part 60.
Interested lessees and owners of real property are encouraged to review the new or revised FIRM and FIS report available at the address cited below for each community or online through the FEMA Map Service Center at
The flood hazard determinations are made final in the watersheds and/or communities listed in the table below.
Federal Emergency Management Agency, DHS.
Notice.
New or modified Base (1-percent annual chance) Flood Elevations (BFEs), base flood depths, Special Flood Hazard Area (SFHA) boundaries or zone designations, and/or regulatory floodways (hereinafter referred to as flood hazard determinations) as shown on the indicated Letter of Map Revision (LOMR) for each of the communities listed in the table below are finalized. Each LOMR revises the Flood Insurance Rate Maps (FIRMs), and in some cases the Flood Insurance Study (FIS) reports, currently in effect for the listed communities. The flood hazard determinations modified by each LOMR will be used to calculate flood insurance premium rates for new buildings and their contents.
Each LOMR was finalized as in the table below.
Each LOMR is available for inspection at both the respective Community Map Repository address listed in the table below and online through the FEMA Map Service Center at
Rick Sacbibit, Chief, Engineering Services Branch, Federal Insurance and Mitigation Administration, FEMA, 400 C Street SW, Washington, DC 20472, (202) 646-7659, or (email)
The Federal Emergency Management Agency (FEMA) makes the final flood hazard determinations as shown in the LOMRs for each community listed in the table below. Notice of these modified flood hazard determinations has been published in newspapers of local circulation and 90 days have elapsed since that publication. The Deputy Associate Administrator for Insurance and Mitigation has resolved any appeals resulting from this notification.
The modified flood hazard determinations are made pursuant to section 206 of the Flood Disaster Protection Act of 1973, 42 U.S.C. 4105, and are in accordance with the National Flood Insurance Act of 1968, 42 U.S.C. 4001
For rating purposes, the currently effective community number is shown and must be used for all new policies and renewals.
The new or modified flood hazard information is the basis for the floodplain management measures that the community is required either to adopt or to show evidence of being already in effect in order to remain qualified for participation in the National Flood Insurance Program (NFIP).
This new or modified flood hazard information, together with the floodplain management criteria required by 44 CFR 60.3, are the minimum that are required. They should not be construed to mean that the community must change any existing ordinances that are more stringent in their floodplain management requirements. The community may at any time enact stricter requirements of its own or pursuant to policies established by other Federal, State, or regional entities.
This new or modified flood hazard determinations are used to meet the floodplain management requirements of the NFIP and are used to calculate the appropriate flood insurance premium rates for new buildings, and for the contents in those buildings. The changes in flood hazard determinations are in accordance with 44 CFR 65.4.
Interested lessees and owners of real property are encouraged to review the final flood hazard information available at the address cited below for each community or online through the FEMA Map Service Center at
Office of the Assistant Secretary for Housing—Federal Housing Commissioner, HUD.
Notice.
HUD is seeking approval from the Office of Management and Budget (OMB) for the information collection described below. In accordance with the Paperwork Reduction Act, HUD is requesting comment from all interested parties on the proposed collection of information. The purpose of this notice is to allow for 60 days of public comment.
Interested persons are invited to submit comments regarding this proposal. Comments should refer to the proposal by name and/or OMB Control Number and should be sent to: Colette Pollard, Reports Management Officer, QDAM, Department of Housing and Urban Development, 451 7th Street SW, Room 4176, Washington, DC 20410-5000; telephone 202-402-3400 (this is not a toll-free number) or email at
For copies of the proposed forms and other available information contact Jessica Grantling, Office of Asset Management and Portfolio Oversight, Department of Housing and Urban Development, 451 7th Street SW, Washington, DC 20410 by email
Copies of available documents submitted to OMB may be obtained from Ms. Pollard.
This notice informs the public that HUD is seeking approval from OMB for the information collection described in Section A.
Grant funds are taken to pay costs previously incurred and are obtained through use of the electronic Line of Credit Control System (eLOCCS). Grantees are required to draw down from eLOCCS monthly or quarterly. Grantees will submit the revised form HUD-50080-SCMF on a semi-annual basis. Grantees will complete one worksheet per draw down. Each worksheet will list every expense incurred during that month or quarter. Grantees will be required to maintain detailed expense documentation in their files. HUD may request copies of such documentation if additional program review is warranted. The data reported will allow HUD staff to track expenses and drawdown of funds for eligible costs at intervals within the grant term.
This notice is soliciting comments from members of the public and affected parties concerning the collection of information described in Section A on the following:
(1) Whether the proposed collection of information is necessary for the proper performance of the functions of the agency, including whether the information will have practical utility;
(2) The accuracy of the agency's estimate of the burden of the proposed collection of information;
(3) Ways to enhance the quality, utility, and clarity of the information to be collected; and
(4) Ways to minimize the burden of the collection of information on those who are to respond; including through the use of appropriate automated collection techniques or other forms of information technology,
HUD encourages interested parties to submit comment in response to these questions.
Section 3507 of the Paperwork Reduction Act of 1995, 44 U.S.C. Chapter 35.
Office of Strategic Planning and Management, HUD.
Notice.
HUD is seeking approval from the Office of Management and Budget (OMB) for the information collection described below. In accordance with the Paperwork Reduction Act, HUD is requesting comment from all interested parties on the proposed collection of information. The purpose of this notice is to allow for 60 days of public comment.
Interested persons are invited to submit comments regarding this proposal. Comments should refer to the proposal by name and/or OMB Control Number and should be sent to Colette Pollard, Reports Management Officer, QDAM, Department of Housing and Urban Development, 451 7th Street SW, Room 4176, Washington, DC 20410-5000; telephone 202-402-3400 (this is not a toll-free number) or email at
To receive consideration as public comments, comments must be submitted through one of the methods specified above. Again, all submissions must refer to the docket number and title of the notice.
Christopher Walsh, Grants Management and Oversight Division, Office of Strategic Planning and Management, Department of Housing and Urban Development, 451 Seventh St. SW, Room 3156, Washington, DC 20410 or by email
Copies of the proposed data collection form may be requested from Ms. Pollard.
This notice informs the public that the Department is soliciting comments prior to submitting the proposed information collection to OMB for review, as required by the Paperwork Reduction Act of 1995 (44 U.S.C. Chapter 35, as amended). HUD is seeking approval from OMB for the information collection described in Section A.
Additional OMB control numbers applicable to government wide standardized forms:
In addition, the collection references a number of standard forms from the government wide SF Family of Forms. These forms are used for all HUD applications. However, the burden associated with those forms is not reflected in this collection because that burden is reflected in Office of Management and Budget sponsored government-wide information collections.
In addition, HUD may combine into this collection OMB collection 2501-0032, HUD Form 2880 Applicant/Recipient Disclosure/Update Report which is being separately processed in advance of this publicaiton into this collection in order to consolidate public input on these forms.
Public notification of the renewal of these forms was made in December 20, 2017 as part of the Consolidated Competive Grant Paperwork Reduction Act Notice (FR-6005-N-01, 82 FR 60410, published December 20, 2017).
This notice is soliciting comments from members of the public and affecting agencies concerning the proposed collection of information to: (1) Evaluate whether the proposed collection of information is necessary for the proper performance of the functions of the agency, including
The Paperwork Reduction Act of 1995, 44 U.S.C. Chapter 35, as amended.
Office of the Assistant Secretary for Housing- Federal Housing Commissioner, HUD.
Notice.
HUD is seeking approval from the Office of Management and Budget (OMB) for the information collection described below. In accordance with the Paperwork Reduction Act, HUD is requesting comment from all interested parties on the proposed collection of information. The purpose of this notice is to allow for 60 days of public comment.
Interested persons are invited to submit comments regarding this proposal. Comments should refer to the proposal by name and/or OMB Control Number and should be sent to: Colette Pollard, Reports Management Officer, QDAM, Department of Housing and Urban Development, 451 7th Street SW, Room 4176, Washington, DC 20410-5000; telephone 202-402-3400 (this is not a toll-free number) or email at
Devasia Karimpanal, Program Specialist, Business Relations and Support Contracts Division, Email:
Copies of available documents submitted to OMB may be obtained from Ms. Pollard.
This notice informs the public that HUD is seeking approval from OMB for the information collection described in Section A.
This notice is soliciting comments from members of the public and affected parties concerning the collection of information described in Section A on the following:
(1) Whether the proposed collection of information is necessary for the proper performance of the functions of the agency, including whether the information will have practical utility;
(2) The accuracy of the agency's estimate of the burden of the proposed collection of information;
(3) Ways to enhance the quality, utility, and clarity of the information to be collected; and
(4) Ways to minimize the burden of the collection of information on those who are to respond; including through the use of appropriate automated collection techniques or other forms of information technology,
HUD encourages interested parties to submit comment in response to these questions.
Section 3507 of the Paperwork Reduction Act of 1995, 44 U.S.C. Chapter 35.
Fish and Wildlife Service, Interior.
Notice of meeting.
In accordance with the Federal Advisory Committee Act, the U.S. Fish and Wildlife Service announces a public meeting of the International Wildlife Conservation Council, which provides advice and recommendations to the Secretary of the Interior regarding the benefits that result from U.S. citizens traveling to foreign nations to engage in hunting.
The meeting will be March 14, 2019, from 9 a.m. to 5 p.m. (Central Standard Time) and March 15, 2019, from 1:00 p.m. to 3:00 p.m. (Central Standard Time). For deadlines and directions on registering to attend, submitting written material, and giving an oral presentation, please see Public Input under
The meeting will be held at the DFW Airport Marriott South, 4151 Centreport Drive, Fort Worth, TX 76155.
Cade London, Policy Advisor, by email (preferred) at
In accordance with the Federal Advisory Committee Act (5 U.S.C. Appendix 2), we, the U.S. Fish and Wildlife Service, announce a public meeting of the International Wildlife Conservation Council (council). The council provides advice and recommendations to the Secretary of the Interior regarding the benefits that result from U.S. citizens traveling to foreign nations to engage in hunting.
Formed in December 2017, the council is an advisory body whose duties include but are not limited to:
(a) Developing a plan for public engagement and education on the benefits of international hunting.
(b) Reviewing and making recommendations for changes, when needed, on all Federal programs and/or regulations, to ensure support of hunting as:
1. An enhancement to foreign wildlife conservation and survival, and
2. An effective tool to combat illegal trafficking and poaching.
(c) Recommending strategies to benefit the U.S. Fish and Wildlife Service's permit office in receiving timely country data and information so as to remove barriers that impact consulting with range states.
(d) Recommending removal of barriers to the importation into the United States of legally hunted wildlife.
(e) Ongoing review of import suspension/bans and providing recommendations that seek to resume the legal trade of those items, where appropriate.
(f) Reviewing seizure and forfeiture actions/practices, and providing recommendations for regulations that will lead to a reduction of unwarranted actions.
(g) Reviewing the Endangered Species Act's foreign listed species and interaction with the Convention on International Trade in Endangered Species of Wild Flora and Fauna, with the goal of eliminating regulatory duplications.
(h) Recommending methods for streamlining/expediting processing of import permits.
The council will convene to hear and discuss the following:
1. Presentations made by conservation experts and officials,
2. Administrative topics, and
3. Public comment, response, and recommendations (if appropriate).
The final agenda will be posted on the internet at
If you plan to attend this meeting, you must register by close of business on the date listed in Public Input. Please submit your name, time of arrival, email address, and phone number to the Policy Advisor for International Affairs (see
Members of the public requesting reasonable accommodations, such as hearing interpreters, may contact Mr. London in writing (preferably by email) or via the Federal Relay Service at 1-800-877-8339 no later than March 4, 2019.
Interested members of the public may submit relevant information for the council to consider during the public meeting. Written statements must be received by the date in the table above so that the information may be made available to the council for consideration prior to the meeting. Submit written statements in the following formats: One hard copy with original signature, and/or one electronic copy via email (acceptable file formats are Adobe Acrobat PDF, MS Word, MS PowerPoint, or rich text file).
Requests to address the council during the public comment period will be accommodated in the order the requests are received. Interested parties must contact the Policy Advisor for International Affairs in writing (preferably via email; see
Written comments we receive become part of the administrative record associated with this action. Before including your address, phone number, email address, or other personal identifying information in your comment, you should be aware that your entire comment—including your personal identifying information—may be made publicly available at any time. While you can request in your comment that we withhold your personal identifying information from public review, we cannot guarantee that we will be able to do so. All submissions from organizations or businesses, and from individuals identifying themselves as representatives or officials of organizations or businesses, will be made available for public disclosure in their entirety.
Detailed minutes of the meeting will be available for public inspection within 90 days after the meeting. They will be posted on the internet at
5 U.S.C. Appendix 2.
Bureau of Land Management, Interior.
Notice of intent.
Pursuant to applicable provisions of the Federal Lands Recreation Enhancement Act (FLREA), the Moab, Monticello, Cedar City, and Vernal Field Offices of the Bureau of Land Management (BLM) are posting a Notice of Intent to begin collecting fees for 20 campgrounds, 22 day use sites, and two rental cabins.
All new fees will become effective August 27, 2019.
The BLM Utah new fee sites are listed below:
The Cedar City Field Office will establish new recreation fees at campgrounds and day use sites. Campgrounds include: Rocky Peak, Coal Creek, Mineral Mountains, South Creek, Shurtz Canyon, Center Cabin, and Hanging Rock. Fees at campgrounds without water will be $5 per night and with water will be $10 per night. Group sites and pavilions will have a day use or camping fee between $20-$210, depending on water and the size of the group. Fees at the Three Peaks Model Port and Radio Control Car Track will be $2 per day, with a $25 yearly pass, and $220 for an exclusive use reservation. There will be 13 day use sites with a no minimum use fee.*
* Users pay what they feel their recreation experience is worth to them specifically for the use of these developed recreation areas.
The Moab Field Office will establish new campground fees at North Klondike, Mineral, Utah Rims, Black Ridge, and Cameo Cliffs/Hook and Ladder. Fees for overnight use of individual campsites will be $25 per night, and group campsites will be $5 per person per night at these campgrounds.
The Monticello Field Office will establish new campground fees at Grand Flat, Moki Dugway, Shay Vista, and Comb Wash Campgrounds. Fees for overnight use of individual campsites will be $15 per night, and group campsites will become a flat rate of $65 per night at these campgrounds.
The Vernal Field Office will establish new recreation fees at campgrounds, day use sites, and rental cabins. New campground fees will be established at Pelican Lake, McCoy Flats, Cliff Ridge, and Docs Beach. Fees for overnight use of individual campsites will be $10 per night, and group campsites will be $35 group site per night at these campgrounds. Fees for the Split Mountain Yurt Rentals will be $50 per night and the John Jarvie Historic Bunkhouse will be $60 per night. The following day use sites will be a no minimum use fee:* McCoy Flats Day Use Site, Pelican Lake Day Use Site, Dinosaur Trackway Day Use Site, Red Fleet Downhill Flow Day Use Site, LaPoint Day Use Site, Dino-Daily Boat Ramp (Put-In), and Dino-Daily Boat Ramp (Take-Out).
Under Public Law 108-447, Sec. 803 (g) (2) (A/C) of the FLREA, developed campgrounds and rental cabins qualify as sites wherein visitors can be charged an “Expanded Amenity Recreation Fee.” Pursuant to FLREA and implementing regulations at 43 CFR Subpart 2933, fees may be charged for overnight camping, rental of cabins, and group use reservations where specific amenities and services are provided. Specific visitor fees will be identified and posted at each campground, day use site, or rental cabin.
Under Public Law 108-447, Sec. 803 (f)(4) of the FLREA, all day use sites in this Notice qualify as areas wherein visitors can be charged a “Standard Amenity Recreation Fee.” Pursuant to FLREA and implementing regulations at 43 CFR Subpart 2933, fees may be charged for an area where there are significant opportunities for outdoor recreation, has substantial Federal investments, where fees can be efficiently collected, and contains specific amenities and services. Specific visitor fees will be identified and posted at each day use site.
People holding the America The Beautiful—The National Parks and Federal Recreational Lands—Senior Pass (
In December 2004, FLREA was signed into law. FLREA provides authority for the Secretaries of the Interior and Agriculture to establish, modify, charge, and collect recreation fees for use of some Federal recreation lands and waters, and contains specific provisions addressing public involvement in the establishment of recreation fees, including a requirement that a Recreation RAC have the opportunity to make recommendations regarding establishment of such fees. FLREA also directed the Secretaries of the Interior and Agriculture to publish six months' advance notice in the
In an effort to meet increasing demands for services and increased maintenance costs, the BLM Utah has developed recreation fee business plans. The plans cover campgrounds, rental cabins, and day use areas within the Moab, Monticello, Cedar City, and Vernal Field Offices. The plans will implement new Standard and Expanded Amenity Recreation Fees for developed campgrounds, group use, rental cabins, and day use fees at the sites as indicated above.
In response to increasing visitation on BLM-administered lands in Utah, the new recreation fees will be used to replace aging infrastructure at campgrounds and day use sites, to increase visitor services, and to improve access to recreational opportunities across the state.
As analyzed in the Field Offices business plans, the campsite, group use, rental cabins, and day use fees are consistent with other established fee sites in the regions including other BLM administered sites and those managed by the United States Department of Agriculture—Forest Service, United Stated Department of the Interior—National Park Service, and Utah State Parks and Recreation.
In accordance with the BLM recreation fee program policy, the business plans explain agency management direction, the need for fee collection, and how the fees will be used at the sites. The BLM notified and involved the public at each stage of the planning process. A 30-day public comment period on the draft
Following FLREA guidelines, the Utah Recreation RAC reviewed and recommended the new fee proposals at their meeting on May 22, 2018. Fee amounts will be posted on-site, and copies of the business plan will be available at the Field Offices and the BLM Utah State Office, and posted online.
16 U.S.C. 6803 and 43 CFR 2933.
U.S. International Trade Commission.
Notice.
Notice is hereby given that the U.S. International Trade Commission (“Commission”) has determined not to review an initial determination (“ID”) (Order No. 29) terminating the investigation in its entirety based on withdrawal of the operative complaint by Complainant Ultravision Technologies, LLC of Dallas, Texas (“Ultravision”).
Carl P. Bretscher, Office of the General Counsel, U.S. International Trade Commission, 500 E Street SW, Washington, DC 20436, telephone 202-205-2382. Copies of non-confidential documents filed in connection with this investigation are or will be available for inspection during official business hours (8:45 a.m. to 5:15 p.m.) in the Office of the Secretary, U.S. International Trade Commission, 500 E Street SW, Washington, DC 20436, telephone 202-205-2000. General information concerning the Commission may also be obtained by accessing its internet server (
On May 31, 2018, the Commission instituted this investigation based on a complaint (and amendment and supplement thereto) filed by Ultravision. 83 FR 25044 (May 31, 2018). The amended and supplemented complaint alleged a violation of 19 U.S.C. 1337, as amended (“Section 337”), in the importation into the United States, sale for importation, or sale within the United States after importation of certain modular LED display panels and components thereof that infringe the asserted claims of U.S. Patent Nos. 9,349,306 (“the ’306 patent”) and 9,916,782 (“the ’782 patent”). The Commission's notice of investigation named forty (40) parties as respondents, including but not limited to Shanghai Sansi Electronic Engineering Co., Ltd. and Sansi North America, LLC (collectively “Sansi”), the subjects of the present ID.
The Commission determined not to review previous IDs that partially terminated the investigation with respect to certain patent claims or certain parties.
On November 27, 2018, Ultravision moved to terminate the investigation in its entirety based on its withdrawal of the amended complaint, the operative complaint in this investigation. Order No. 29 at 1. Consistent with Commission Rule 210.21(a)(1), Ultravision stated in its motion that it had entered into a confidential term sheet agreement with Sansi.
On November 30, 2018, OUII filed a response supporting the motion.
On January 31, 2019, the ALJ issued the subject ID granting the motion and finding no “extraordinary circumstances that warrant denying the motion” under Commission Rule 210.21(a)(1), 19 CFR 210.21(a).
No party filed a petition seeking review of the subject ID.
Upon review of the entire record, including the ALJ's ID, the Commission has determined not to review the subject ID. The investigation is hereby terminated in its entirety.
The authority for the Commission's determination is contained in Section 337 of the Tariff Act of 1930, as amended (19 U.S.C. 1337), and in part 210 of the Commission's Rules of Practice and Procedure (19 CFR part 210).
By order of the Commission.
Drug Enforcement Administration, Department of Justice.
30-Day notice.
The Department of Justice, Drug Enforcement Administration (DEA), is submitting the following information collection request to the Office of Management and Budget for review and approval in accordance with the Paperwork Reduction Act of 1995. The proposed information collection was previously published in the
Comments are encouraged and will be accepted for 30 days until March 29, 2019.
If you have additional comments, especially on the estimated public burden or associated response time, suggestions, or need a copy of the proposed information collection instrument with instructions or additional information, please contact Kathy L. Federico, Diversion Control Division, Drug Enforcement Administration; Mailing Address: 8701
Written comments and suggestions from the public and affected agencies concerning the proposed collection of information are encouraged. Your comments should address one or more of the following four points:
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If additional information is required, please contact: Melody Braswell, Department Clearance Officer, United States Department of Justice, Justice Management Division, Policy and Planning Staff, Two Constitution Square, 145 N Street NE, Suite 3E.405B, Washington, DC 20530.
Bureau of Justice Statistics, Department of Justice.
30-Day notice.
The Department of Justice (DOJ), Office of Justice Programs (OJP), Bureau of Justice Statistics (BJS), intends to request approval from the Office of Management and Budget (OMB) for a generic information collection clearance that will allow BJS to conduct a variety of cognitive, pilot, and field test studies. BJS will submit the request for review and approval in accordance with the Paperwork Reduction Act of 1995.
Over the next three years, BJS anticipates undertaking a variety of new surveys and data collections, as well as reassessing ongoing statistical projects, across a number of areas of criminal justice, including law enforcement, courts, corrections, and victimization. This work will entail developing new survey instruments, redesigning and/or modifying existing surveys, procuring administrative data from state and local government entities, and creating or modifying establishment surveys. BJS will engage in cognitive, pilot, and field test activities to refine instrumentation and data collection methodologies, inform BJS data collection protocols, develop accurate estimates of respondent burden, and minimize respondent burden associated with each new or modified data collection. BJS envisions using a variety of techniques, including (but not limited to): Tests of different types of survey and data collection operations; focus groups; cognitive testing; pilot testing; exploratory interviews; experiments with questionnaire design; and usability testing of electronic data collection instruments.
Following standard Office of Management and Budget (OMB) requirements, BJS will submit a change request to OMB individually for every group of data collection activities undertaken under this generic clearance. BJS will provide OMB with a copy of the individual instruments or questionnaires (if one is used), as well as other materials describing the project.
Comments are encouraged and will be accepted for 30 days until March 29, 2019.
If you have additional comments especially on the estimated public burden or associated response time, suggestions, or need a copy of the proposed information collection instrument with instructions or additional information, please contact Devon Adams, Bureau of Justice Statistics, 810 Seventh Street NW, Washington, DC 20531 (email:
Written comments and suggestions from the public and affected agencies concerning the proposed collection of information are encouraged. Your comments should address one or more of the following four points:
(1)
(2)
(3)
(4)
(5)
(6)
The purpose of the CDRLF program is to assist LICUs in providing basic financial services to their members to stimulate economic activities in their communities. Through the CDRLF program, the NCUA provides financial support in the form of loans to LICUs serving predominantly low-income members. These funds help improve and expand the availability of financial services to these members. The NCUA accepts loan applications on a continuous basis subject to funding availability.
The CDRLF program consists of Congressional appropriations that are administered by the NCUA. Since its inception, Congress has appropriated approximately $13.4 million for revolving loans through the CDRLF program. The CDRLF's revolving loan component received its last appropriation in fiscal year 2005 for $200,000. Approximately $3.6 million will be available for loans under this NOFO as of January 1, 2019.
The NCUA may consider requests for loan funds for various uses. A non-exhaustive list of examples of permissible uses or projects is defined in 12 CFR 705.4. The NCUA may consider other proposed uses of loan funds that are not listed if it determines the proposal to be consistent with the purpose of the CDRLF program. The list includes the following:
i. Development of new products or services for members, including new or expanded share draft or credit card programs;
ii. Partnership arrangements with community-based service organizations or government agencies;
iii. Loan programs, including, but not limited to, microbusiness loans, payday loan alternatives, education loans, and real estate loans;
iv. Acquisition, expansion, or improvement of office space or equipment, including branch facilities, ATMs, and electronic banking facilities; and
v. Operational programs such as security and disaster recovery.
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The NCUA expects to award as many qualified credit unions as possible through this NOFO, subject to funding availability. CDRLF loans are typically made at lower than market interest rates.
Approximately $3.6 million, derived from prior-year appropriated and earned funds, will be available for qualified credit unions beginning January 1, 2019. The amount of funding available for CDRLF loans fluctuate whenever previously scheduled loans are fully amortized and/or if Congress makes an appropriation to the CDRLF revolving loan component. The NCUA reserves the right to: (i) Award more or less than the amounts cited above; (ii) fund, in whole or in part, any, all, or none of the applications submitted in response to this NOFO; and (iii) reallocate funds from the amount that is anticipated to be available under this NOFO to other programs, particularly if the NCUA determines that the number of awards made under this NOFO is fewer than projected.
The specific terms and conditions governing a CDRLF award will be established in the loan documents that each Participating Credit Union must sign prior to disbursement of funds. The rest of this section contains general award information regarding loans made through the CDRLF program.
The NCUA makes loans based on the financial condition of the credit union. The applicable regulation does not provide a maximum limit on loan applications for consideration, but in practice the NCUA discourages loan applications of higher than $500,000 to mitigate risk. There is no minimum loan amount. CDRLF loan awards typically range from $250,000 to $500,000. The amount of the loan will be based on the following factors:
i. Funds availability;
ii. Credit worthiness of the credit union;
iii. Financial need;
iv. Demonstrated capability of the credit union to provide financial and related services to its members; and
v. Concurrence from the credit union's NCUA regional office and/or the applicable the State Supervisory Authority (SSA) for qualifying state-chartered credit unions.
CDRLF loans will generally mature in five years. A credit union may request a shorter loan period, but in no case will the term exceed five years.
The interest rate on CDRLF loans is governed by the CDRLF Loan Interest Rate Policy. The policy can be found on the NCUA's website at
All loans must be repaid to the NCUA regardless of how they are accounted for by the Participating Credit Union.
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This NOFO is open to credit unions that meet the eligibility requirements defined in 12 CFR part 705. A credit union must have a low-income designation, or equivalent in the case of a Qualifying State-chartered Credit Union, in order to participate in the CDRLF program. Requirements for obtaining the designation is defined in 12 CFR 701.34.
At its discretion, the NCUA may require the Applicant to submit a functional plan to meet the matching funds requirement depending on the financial condition of the Applicant. The NCUA anticipates that most Applicants will not be required to obtain matching funds. 12 CFR 705.5(g) of the NCUA's regulations describe the overall requirements for matching funds.
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a. The amount of matching funds required must generally be in an amount equal to the loan amount.
b. Matching funds must be from non-governmental member or nonmember share deposits.
c. Any loan monies matched by nonmember share deposits are not subject to the 20% limitation on nonmember deposits defined in 12 CFR 701.32.
d. Participating Credit Unions must maintain the outstanding loan amount in the total amount of share deposits for the duration of the loan. Once the loan is repaid, nonmember share deposits accepted to meet the matching requirement are subject to requirements defined in defined in 12 CFR 701.32.
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The application and related documents can be found on the NCUA's website at
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a. Examination by the NCUA: Non-federally insured, state-chartered credit unions must agree to be examined by the NCUA. The specific terms and covenants pertaining to this condition will be provided in the loan agreement of the Participating Credit Union.
The NCUA accepts applications on a continuous basis subject to funding availability.
The NCUA will review each Application to determine whether it is complete and that the Applicant meets the eligibility requirements described in the Regulations and in this NOFO. An incomplete Application or one that does not meet the eligibility requirements will be declined without further consideration.
The evaluation criteria is fully described in 12 CFR 705.7(c). The NCUA will evaluate each Application that receives a substantive review on the four criteria described in the regulation, this NOFO and the applicable guideline: financial performance, compatibility, feasibility, and examination information and applicable concurrence. Each initiative, due to its structure and impact, have varying degrees of evaluation criteria assigned which are reflected in the guidelines for credit union's information.
The purpose of the substantive review is to determine whether the NCUA should support and fund the loan request. During this phase of the review, the NCUA reviews the credit union's prior financial and operational performance, the collateral offered to securitize the loan (if applicable), and its longevity in operation. The NCUA reserves the right to contact the Applicant during its review for the purpose of clarifying or confirming information contained in the Application. If so contacted, the Applicant must respond within the time specified by the NCUA or the NCUA, in its sole discretion, may decline the application without further consideration.
The NCUA will not approve an award to a credit union for which it's NCUA regional examining office or SSA, if applicable, indicates it has safety and soundness concerns. If the NCUA regional office or SSA identifies a safety and soundness concern, the NCUA, in conjunction with the regional office or SSA, will assess whether the condition of the Applicant is adequate to undertake the activities for which funding is requested, and the obligations of the loan and its conditions. The NCUA, in its sole discretion, may defer decision on funding an Application until the credit union's safety and soundness conditions improve.
The NCUA will make its funding selections based on a consistent scoring tier for each Applicant. The NCUA will consider the impact of the funding. In addition, the NCUA may consider the geographic diversity of the Applicants in its funding decisions. When loan demand is high, Applications will be ranked based on the aforementioned.
The NCUA will notify each Applicant of its funding decision by email. Applicants that are approved for funding will also receive instructions on how to proceed with disbursement of the award.
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The reporting requirements are more fully described in 12 CFR 705.9. Annually, each Participating Credit Union will submit a report to the NCUA. The report will address the Participating Credit Union's use of the loan funds; the impact of funding; and explanation of any failure to meet objectives for use of proceeds, outcome, or impact. The NCUA, in its sole discretion, may modify these requirements. However, such reporting requirements will be modified only after notice to affected credit unions.
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Further information can be found at
People who have visual or mobility impairments that prevent them from using the NCUA's website should call (703) 518-6610 for guidance (this is not a toll free number).
Nuclear Regulatory Commission.
Draft regulatory guide; request for comment.
The U.S. Nuclear Regulatory Commission (NRC) is issuing for public comment draft regulatory guide (DG), DG-1328, “Seismic Qualification of Electrical and Active Mechanical Equipment and Functional Qualification of Active Mechanical Equipment for Nuclear Power Plants.” This proposed guide, revision 4 to Regulatory Guide (RG) 1.100 of the same name, was revised to endorse industry consensus standards with certain exceptions and clarifications. The guide describes methods that the staff of the NRC considers acceptable for use in the seismic qualification of electrical and active mechanical equipment and the functional qualification of active mechanical equipment for nuclear power plants.
Submit comments by April 29, 2019. Comments received after this date will be considered if it is practical to do so, but the NRC is able to ensure consideration only for comments received on or before this date. Although a time limit is given, comments and suggestions in connection with items for inclusion in guides currently being developed or improvements in all published guides are encouraged at any time.
You may submit comments by any of the following methods (unless this document describes a different method for submitting comments on a specific subject):
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• For additional direction on obtaining information and submitting comments, see “Obtaining Information and Submitting Comments” in the
Ian Tseng, Office of Nuclear Reactor Regulation, telephone: 301-415-7964, email:
Please refer to Docket ID NRC-2019-0061 when contacting the NRC about the availability of information regarding this action. You may obtain publically-available information related to this action, by any of the following methods:
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Please include Docket ID NRC-2019-0061 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 posts all comment submissions at
If you are requesting or aggregating comments from other persons for submission to the NRC, then you should inform those persons not to include identifying or contact information that they do not want to be publicly disclosed in their comment submission. Your request should state that the NRC does not routinely edit comment submissions to remove such information before making the comment submissions available to the public or entering the comment submissions into ADAMS.
The NRC is issuing for public comment a DG in the NRC's “Regulatory Guide” series. This series was developed to describe and make available to the public information regarding methods that are acceptable to the NRC staff for implementing specific parts of the NRC's regulations, techniques that the staff uses in evaluating specific issues or postulated events, and data that the staff needs in its review of applications for permits and licenses.
The DG, entitled, “Seismic Qualification of Electrical and Active Mechanical Equipment and Functional Qualification of Active Mechanical Equipment for Nuclear Power Plants,” is proposed revision 4 of RG 1.100 of the same name. It is temporarily identified by its task number, DG-1328. The guide describes methods that the NRC staff considers acceptable for use in the seismic qualification of electrical and active mechanical equipment and the functional qualification of active mechanical equipment for nuclear power plants.
This proposed guide was revised to endorse, with exceptions and clarifications the following industry consensus standards: (1) Institute of Electrical and Electronics Engineers (IEEE) Standard (Std) 344-2013, “IEEE Standard for Seismic Qualification of Equipment for Nuclear Power Generating Stations,” (2) IEEE Std C37.98-2013, “Standard Qualification Testing of Protective Relays and Auxiliaries for Nuclear Facilities,” and (3) American Society of Mechanical Engineers (ASME) QME-1-2017, “Qualification of Active Mechanical Equipment Used in Nuclear Facilities.”
As discussed in the “Implementation” section of DG-1328, the NRC has no current intention to impose this draft regulatory guide on holders of current operating licenses or combined licenses. Accordingly, the issuance of this draft regulatory guide, if finalized, would not constitute “backfitting” as defined in Title 10 of the
This draft regulatory guide may be applied to applications for operating licenses and combined licenses docketed by the NRC as of the date of issuance of the final regulatory guide, as well as future applications for operating licenses and combined licenses submitted after the issuance of the regulatory guide. Such action would not constitute backfitting as defined in 10 CFR 50.109(a)(1) or be otherwise inconsistent with the applicable issue finality provision in 10 CFR part 52, inasmuch as such applicants or potential applicants are not within the scope of entities protected by the Backfit Rule or the relevant issue finality provisions in Part 52.
For the Nuclear Regulatory Commission.
Notice is hereby given that the Railroad Retirement Board will hold a meeting on March 5, 2019, 1:00 p.m. at the Board's meeting room on the 8th floor of its headquarters building, 844 North Rush Street, Chicago, Illinois, 60611.
The meeting will be open to the public and the agenda is as follows:
The person to contact for more information is Sylvia Zaragoza, Acting Secretary to the Board, Phone No. 312-751-4939.
For The Board.
Pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934 (the “Act”),
Cboe Exchange, Inc. (the “Exchange” or “Cboe Options”) proposes to amend its fees schedule. The text of the proposed rule change is provided in Exhibit 5.
The text of the proposed rule change is also available on the Exchange's website (
In its filing with the Commission, the Exchange included statements concerning the purpose of and basis for the proposed rule change and discussed any comments it received on the proposed rule change. The text of these statements may be examined at the places specified in Item IV below. The Exchange has prepared summaries, set forth in sections A, B, and C below, of the most significant aspects of such statements.
The Exchange proposes to make a number of changes to its Fees Schedule, effective February 1, 2019.
The Exchange first proposes to amend the Volume Incentive Program (“VIP”). By way of background, under VIP, the Exchange credits each Trading Permit Holder (“TPH”) the per contract amount set forth in the VIP table for Public Customer orders (“C” origin code) transmitted by that TPH (with certain exceptions) which is executed electronically on the Exchange, provided the TPH meets certain volume thresholds in a month.
The purpose of these changes is to adjust for current volume trends while maintaining an incremental incentive for TPHs to strive for the highest tier level.
The Exchange next proposes to increase the transaction fee for Market-Maker orders in RUT options. Currently, the Exchange charges $0.20 per contract for Market-Makers' RUT orders. The Exchange proposes to increase the transaction rate to $0.30 per contract. The Exchange notes the proposed rate change is less than the amount assessed for similar transactions on another Exchange and is also similar to Market-Maker fees assessed for other proprietary products.
The Exchange proposes to amend the fees for electronic Customer orders (origin code “C”) for ETF and ETN options. Currently the Exchange waives transaction fees for (1) all customer orders executed in open outcry or AIM, and (2) customer electronic executions of 249 contracts or less in ETF and ETN options in Penny and Non-Penny classes. The Exchange proposes to amend the transaction fee for Customer electronic executions in ETF and ETN options such that it will waive the transaction fees for all Customer electronic executions that add liquidity (
The Exchange also proposes to amend Footnote 9 to make corresponding changes to the footnote text regarding the proposed change described above and also explicitly make clear what transactions the Exchange would consider to be Maker (and therefore have no fees assessed) and Taker (and therefore be assessed $0.18 per contract, if equal to or greater than 100 contracts). Particularly, the Exchange proposes to provide that the Taker fee applies to electronic volume only, but is not applied to the following: (i) Trades on the open and (ii) QCC orders. The Taker fees would apply to the following volume: (i) Volume resulting from a Customer's orders and/or quotes removing other market participants' resting orders and/or quotes and (ii) volume resulting from a Customer's primary orders in (i) unpaired auctions (
The Exchange proposes to amend the Customer Priority Surcharge for SPXW (“SPXW Surcharge”). Currently, the Exchange assesses a SPXW Surcharge of $0.10 per contract for Customer orders in SPXW that are executed electronically (with some exceptions).
In connection with the proposed change, and in order to make the Fees Schedule easier to read, the Exchange proposes to relocate the SPXW Surcharge to its own line item grouped together with the SPX Hybrid Execution Surcharge and rename the SPX Hybrid Execution Surcharge, such that both
The Exchange next proposes to eliminate its Supplemental VIX Total Firm Volume Discount (“Supplemental VIX Discount”). The Supplemental VIX Discount allows VIX options transaction fees for Clearing TPHs' (including its Non-TPH Affiliates) proprietary orders to be discounted provided a Clearing TPH reaches certain VIX firm volume percentage thresholds during a calendar month. The Exchange no longer wishes to offer the Supplement VIX Discount program and therefore proposes to eliminate it from its Fees Schedule.
The Exchange proposes to amend its Market Maker and Floor Broker Trading Permit Sliding Scale Programs (“TP Sliding Scales”). The TP Sliding Scales allow Market Makers and Floor Brokers to pay reduced rates for their Trading Permits if they commit in advance to a specific tier that includes a minimum number of eligible Market Maker and Floor Broker Trading Permits, respectively, for each calendar year. The Exchange notes that in October 2019, it is migrating the current Cboe Options trading platform onto new technology and in connection with such migration, is anticipating a new Trading Permit structure. As such, the Exchange proposes to provide that any commitment to Trading Permits under the TP Sliding Scales shall be in place through September 2019, instead of the calendar year, and proposes to update Footnotes 24 and 25 accordingly.
The Exchange next proposes to amend certain facility fees. First, the Exchange proposes to increase fees for access badges. Currently, the Exchange charges $120 per Floor Manager Badge and $60 per Clerk Badge. The Exchange proposes to increase the Floor Manager Badge to $130 per badge and the Clerk Badge to $70 per badge. The Exchange notes these fees have not been raised in several years. The Exchange also proposes to eliminate the following Badge-related fees which are assessed per occurrence: Badge Issuance, Replacement Badge, Unreturned Security Access Badge, Temporary Badge—Non Trading Permit Holder, Temporary Badge—Trading Permit Holder, and Unreturned Temporary Badge.
The Exchange is also proposing to eliminate the fees relating to coat room services, as such service will be eliminated as of February 1, 2019. Particularly, the $25 per month for Coat Room Checking and $15 per Occurrence for Lost or Damaged Trading Jackets fees will be eliminated.
The Exchange proposes to extend the current waiver of the VIX and Sector Index License Surcharge of $0.10 per contract for Clearing Trading Permit Holder Proprietary (“Firm”) (origin codes “F” or “L”) VIX and Sector Index orders that have a premium of $0.10 or lower and have series with an expiration of seven (7) calendar days or less. The Exchange adopted the current waiver to reduce transaction costs on expiring, low-priced VIX options as well as Sector Index options, which the Exchange believed would encourage Firms to seek to close and/or roll over such positions, including facilitating customers to do so, in order to free up capital and encourage additional trading. The Exchange had proposed to waive the surcharge through December 31, 2018, at which time the Exchange had stated that it would evaluate whether the waiver has in fact prompted Firms to close and roll over these positions as intended. The Exchange believes the waiver encourages Firms to do so and as such, proposes to renew the waiver of the surcharge through June 30, 2019, at which time the Exchange will again reevaluate whether the waiver has continued to prompt Firms to close and roll over these positions. Accordingly, the Exchange proposes to delete the reference to the current waiver period of December 31, 2018 from the Fees Schedule and replace it with June 30, 2019.
In order to promote and encourage trading during the Global Trading Hours (“GTH”) session, the Exchange previously waived GTH Trading Permit and Bandwidth Packet fees for one (1) of each initial Trading Permits and one (1) of each initial Bandwidth Packet, per affiliated TPH. The Exchange notes that waiver expired December 31, 2018. The Exchange also waived fees through December 31, 2018 for a CMI and FIX login ID if the CMI and/or FIX login ID is related to a waived GTH Trading Permit and/or waived Bandwidth packet. In order to continue to promote trading during GTH, the Exchange wishes to renew these waivers through June 30, 2019.
In order to promote and encourage trading of seven FTSE Russell Index products (
The Exchange previously offered a compensation plan to the Designated Primary Market-Maker(s) (“DPM(s)”) appointed in UKXM to offset its DPM costs. Specifically, the Fees Schedule provides that DPM(s) appointed for an entire month in UKXM will receive a payment of $5,000 per month, through December 31, 2018. The Exchange proposes to renew the compensation plan through June 30, 2019 to continue to incentivize the DPM(s) to continue to serve as a DPM in this product.
The Exchange lastly proposes to delete all appended references to Footnote 42. The Exchange notes that effective, July 2, 2018, the Exchange eliminated the FLEX Asian & Cliquet FLEX Trader Incentive Program, which program was described in Footnote 42 of the Fees Schedule.
The Exchange believes the proposed rule change is consistent with the Securities Exchange Act of 1934 (the “Act”) and the rules and regulations thereunder applicable to the Exchange and, in particular, the requirements of Section 6(b) of the Act.
First, the Exchange believes adjusting the VIP volume thresholds for Tiers 4 and 5 is reasonable because it adjusts for the current volume trends and makes it slightly easier for TPHs to meet the qualifying criteria to achieve the highest tier, Tier 5. The Exchange also notes that the credits offered under VIP are not changing. Rather, the rebalance of tiers still allows the Exchange to maintain an incremental incentive for TPHs to strive for the highest tier level, which provides increasingly higher credits. The Exchange believes it is equitable and not unfairly discriminatory because the proposed changes to the qualifying volume thresholds apply to all TPHs uniformly.
The Exchange believes increasing the fee for Market-Maker executions in RUT is reasonable because the proposed rate change is less than the amount assessed for similar transactions on another Exchange and is also similar to Market-Maker fees assessed for other proprietary products.
The Exchange believes the proposed rule change to waive fees for Customer electronic executions in ETF and ETN options that add liquidity, but assess $0.18 per contract for such executions that remove liquidity and are of an order size of 100 contracts or greater, is reasonable because Customers will pay nothing for these executions where they add liquidity and will be paying the same rate as is currently provided for under the fees schedule (
The Exchange believes extending the applicability of the SPXW Execution Surcharge to all market participants other than Market-Makers is reasonable as it aligns the applicability of the surcharge to the same market participants subject to the SPX Hybrid Execution Surcharge and because the surcharge amount is not changing. The Exchange believes it's equitable and not unfairly discriminatory to apply the SPXW Execution Surcharge to all market participants other than Market-Makers because Market-Makers, unlike other market participants, take on a number of obligations, including quoting obligations, that other market participants do not have. The Exchange believes the proposed updates to Footnotes 21 and 31 in connection with the proposed SPXW Execution Surcharge change provides clarity in the Fees Schedule and alleviates potential confusion, thereby removing impediments to and perfecting the mechanism of a free and open market and a national market system, and, in general, protecting investors and the public interest.
The Exchange believes it's reasonable to eliminate the Supplemental VIX Discount because it is not required to provide such a discount. Additionally, the Exchange notes that Clearing TPHs have other opportunities to obtain a discount on VIX executions, such as via the Cboe Proprietary Product Sliding Scale programs. The Exchange believes it's equitable and not unfairly discriminatory because it applies uniformly to all Clearing TPHs.
The Exchange believes amending the TP Sliding Scales to provide that any commitment to Trading Permits under the TP Sliding Scales shall be in place through September 2019, instead of the calendar year, is reasonable because the discounted Trading Permit rates and tier levels are not changing. The Exchange believes this proposed rule change is reasonable, equitable and not unfairly discriminatory because, as discussed above, the Exchange anticipates modifying the current Trading Permit structure upon the migration of its trading system in October 2019. The Exchange notes that through September 2019, Floor Brokers and Market-Makers are still eligible to take advantage of these sliding scale programs, which offer discounts on Trading Permits. Additionally, the proposed rule change applies to all Markets-Makers and Floor Brokers uniformly.
The Exchange believes the proposed rule change to eliminate per occurrence badge issuance fees and coat room services fees are reasonable as TPHs will no longer be subject to these fees. Additionally, with respect to the coat room service fees, the Exchange notes such services will be eliminated as of February 1, 2019. Additionally, the proposed elimination applies to all TPHs. The Exchange believes the proposed increases to the Floor Manager and Clerk Badge fees are reasonable
The Exchange believes it's appropriate to continue to waive the VIX and Sector Index License Surcharge for Clearing Trading Permit Holder Proprietary Sector Index and VIX orders that have a premium of $0.10 or lower and have series with an expiration of 7 calendar days or less because the Exchange wants to continue encouraging Firms to roll and close over these positions. Particularly, the Exchange believes it's reasonable to waive the entire $0.10 per contract surcharge because without the waiver of the surcharge, firms are less likely to engage in these transactions, as opposed to other VIX and Sector Index transactions, due to the associated transaction costs. The Exchange believes it's equitable and not unfairly discriminatory to limit the waiver to Clearing Trading Permit Holder Proprietary orders because they contribute capital to facilitate the execution of Sector Index customer orders and VIX customer orders with a premium of $0.10 or lower and series with an expiration of 7 calendar days or less. Finally, the Exchange believes it's reasonable, equitable and not unfairly discriminatory to provide that the surcharge will be waived through June 30, 2019, as it gives the Exchange additional time to evaluate if the waiver is continuing to have the desired effect of encouraging these transactions.
The Exchange believes renewing the waiver of GTH Trading Permit and Bandwidth Packet fees for one of each type of Trading Permit and Bandwidth Packet, per affiliated TPH through June 30, 2019 is reasonable, equitable and not unfairly discriminatory, because those respective fees would be waived in their entirety, which promotes and encourages trading during the GTH session and applies to all GTH TPHs. The Exchange believes it's also reasonable, equitable and not unfairly discriminatory to waive fees for Login IDs related to waived Trading Permits and/or Bandwidth Packets in order to promote and encourage ongoing participation in GTH and also applies to all GTH TPHs.
The Exchange believes it is reasonable, equitable and not unfairly discriminatory to renew the waiver of all transaction fees for RLG, RLV, RUI, AWDE, FTEM, FXTM and UKXM transactions, including the Floor Brokerage fee, the License Index Surcharge and CFLEX Surcharge Fee, because the respective fees are being waived in their entirety, which promotes and encourages trading of these products which are still relatively new and applies to all TPHs.
The Exchange believes that it is reasonable, equitable and not unfairly discriminatory to renew the compensation plan to the DPM appointed in UKXM to continue to offset its ongoing DPM costs and continue to incentivize the DPM to continue to serve as a DPM in this product.
Lastly, the Exchange believes eliminating references to Footnote 42 (which footnote does not currently contain any language and is obsolete) alleviates potential confusion. The alleviation of confusion removes impediments to and perfects the mechanism of a free and open market and a national market system, and, in general, protects investors and the public interest.
The Exchange does not believe that the proposed rule changes will impose any burden on competition that are not necessary or appropriate in furtherance of the purposes of the Act. The Exchange does not believe that the proposed rule change will impose any burden on intramarket competition that is not necessary or appropriate in furtherance of the purposes of the Act because, while different fees and rebates are assessed to different market participants in some circumstances, these different market participants have different obligations and different circumstances. For example, Clearing TPHs have clearing obligations that other market participants do not have. Market-Makers have quoting obligations that other market participants do not have. There is also a history in the options markets of providing preferential treatment to customers, as they often do not have as sophisticated trading operations and systems as other market participants, which often makes other market participants prefer to trade with customers. Further, the Exchange fees and rebates, both current and those proposed to be changed, are intended to encourage market participants to bring increased volume to the Exchange (which benefits all market participants), while still covering Exchange costs (including those associated with the upgrading and maintenance of Exchange systems).
The Exchange does not believe that the proposed rule changes will impose any burden on intermarket competition that is not necessary or appropriate in furtherance of the purposes of the Act because the proposed changes are intended to promote competition and better improve the Exchange's competitive position and make Cboe Options a more attractive marketplace in order to encourage market participants to bring increased volume to the Exchange (while still covering costs as necessary). Further, the proposed changes only affect trading on the Exchange. To the extent that the proposed changes make Cboe Options a more attractive marketplace for market participants at other exchanges, such market participants are welcome to become Cboe Options market participants.
The Exchange neither solicited nor received comments on the proposed rule change.
The foregoing rule change has become effective pursuant to Section 19(b)(3)(A) of the Act
Interested persons are invited to submit written data, views, and arguments concerning the foregoing, including whether the proposed rule change is consistent with the Act. Comments may be submitted by any of the following methods:
• Use the Commission's internet comment form (
• Send an email to
• Send paper comments in triplicate to Secretary, Securities and Exchange Commission, 100 F Street NE, Washington, DC 20549-1090.
For the Commission, by the Division of Trading and Markets, pursuant to delegated authority.
Notice is hereby given that, pursuant to the Paperwork Reduction Act of 1995 (44 U.S.C. 3501
Form C (17 CFR 239.900) is used by issuers offering securities in reliance on the crowdfunding exemption in Section 4(a)(6) (15 U.S.C. 77d(a)(6)) of the Securities Act of 1933 (“Securities Act”) (15 U.S.C. 77a
Written comments are invited on: (a) Whether this proposed collection of information is necessary for the proper performance of the functions of the agency, including whether the information will have practical utility; (b) the accuracy of the agency's estimate of the burden imposed by the collection of information; (c) ways to enhance the quality, utility, and clarity of the information collected; and (d) ways to minimize the burden of the collection of information on respondents, including through the use of automated collection techniques or other forms of information technology. Consideration will be given to comments and suggestions submitted in writing within 60 days of this publication.
An agency may not conduct or sponsor, and a person is not required to respond to, a collection of information unless it displays a currently valid control number.
Please direct your written comment to Charles Riddle, Acting Director/Chief Information Officer, Securities and Exchange Commission, c/o Candace Kenner, 100 F Street NE, Washington, DC 20549 or send an email to:
Notice is hereby given that pursuant to the Paperwork Reduction Act of 1995 (44 U.S.C. 3501
Under appendix F, a class of broker-dealers known as over-the counter (“OTC”) derivatives dealers may apply to the Commission for authorization to compute net capital charges for market and credit risk in accordance with appendix F in lieu of computing securities haircuts under paragraph (c)(2)(vi) of Exchange Act Rule 15c3-1.
At present, three OTC derivatives dealers have been approved to use appendix F. Two OTC derivatives dealers have applied to use appendix F, and the staff expects that one additional OTC derivatives dealer will apply to use appendix F during the next three years. The Commission estimates that the three approved OTC derivatives dealers and two OTC derivatives dealers with pending applications (if approved) will spend an average of approximately 1,000 hours each per year reporting information concerning their VAR models and internal risk management
Written comments are invited on: (a) Whether the proposed collection of information is necessary for the proper performance of the functions of the Commission, including whether the information shall have practical utility; (b) the accuracy of the Commission's estimates of the burden of the proposed collection of information; (c) ways to enhance the quality, utility, and clarity of the information collected; and (d) ways to minimize the burden of the collection of information on respondents, including through the use of automated collection techniques or other forms of information technology. Consideration will be given to comments and suggestions submitted in writing within 60 days of this publication.
An agency may not conduct or sponsor, and a person is not required to respond to, a collection of information under the PRA unless it displays a currently valid OMB control number.
Please direct your written comments to: Charles Riddle, Acting Director/Chief Information Officer, Securities and Exchange Commission, c/o Candace Kenner, 100 F Street NE, Washington, DC 20549, or send an email to:
Pursuant to Section 19(b)(1)
The Exchange proposes to amend NYSE Arca Rule 5.2-E(j)(3) (“Rule 5.2-E(j)(3)”) to adopt generic listing standards for Investment Company Units (“Units”) based on an index of municipal bond securities. The proposed change is available on the Exchange's website at
In its filing with the Commission, the self-regulatory organization included statements concerning the purpose of, and basis for, the proposed rule change and discussed any comments it received on the proposed rule change. The text of those statements may be examined at the places specified in Item IV below. The Exchange has prepared summaries, set forth in sections A, B, and C below, of the most significant parts of such statements.
NYSE Arca Rule 5.2-E(j)(3) permits the Exchange to list a series of Units based on an index or portfolio of underlying securities. Currently, Rule 5.2-E(j)(3) includes generic listing standards for Units based on an index or portfolio of equity or fixed income securities or a combination thereof. The Exchange proposes to amend Rule 5.2-E(j)(3) to add a new Commentary .02A to provide generic listing standards for Units based on an index or portfolio of Municipal Securities.
An index of Municipal Securities typically does not meet the generic listing requirements for Units based on an index of fixed-income securities.
In the Exchange's experience, indices of Municipal Securities are able to satisfy all of the generic listing requirements applicable to fixed-income indices contained in Commentary .02 to Rule 5.2-E(j)(3) except the requirement that component securities in an index have a minimum original principal amount outstanding. Specifically, Municipal Securities are generally issued with individual maturities of relatively small size, although they generally are constituents of a much larger municipal bond offering. Therefore, Municipal Securities are unable to satisfy the rule's requirement that “at least 75% of the Fixed Income Securities portion of the weight of the index or portfolio each shall have a minimum original principal amount outstanding of $100 million or more.” Notwithstanding the inability of a Municipal Securities index to meet this aspect of the generic listing standards, the Commission has previously approved for listing and trading a series of Units based on such indices where the Exchange has demonstrated an index is not susceptible to manipulation.
The Exchange would apply existing Commentary .02 to Rule 5.2-E(j)(3) and proposed Commentary .02A to Rule 5.2-E(j)(3) in a “waterfall” manner. Specifically, every series of Units based on an index of fixed-income securities and cash (including an index that contains Municipal Securities) would initially be evaluated against the generic listing standards of existing Commentary .02 to Rule 5.2-E(j)(3). If the index underlying a series of Units satisfied the existing criteria of Commentary .02 to Rule 5.2-E(j)(3), the Exchange would proceed with listing the Units. The Exchange would apply proposed Commentary .02A to Rule 5.2-E(j)(3) only if (i) an index did not meet the requirements of Commentary .02 to Rule 5.2-E(j)(3) and (ii) such index contained only Municipal Securities and cash.
The Exchange believes that if an index of fixed-income securities and cash (including one that contains Municipal Securities) satisfies the existing requirements of Commentary .02 to Rule 5.2-E(j)(3) its constituent securities are sufficiently liquid to deter manipulation of the index. Further, the proposed alternative listing standard, which would only be applicable to an index consisting entirely of Municipal Securities and cash, includes many requirements that are more stringent than those applicable to an index of fixed-income securities and cash. The Exchange believes these heightened requirements would deter potential manipulation of such Municipal Securities indices even though the index may include securities that have smaller original principal amounts outstanding.
Below is a comparison of the existing quantitative requirements for Units based on an index of fixed-income securities versus the Exchange's proposed alternative quantitative requirements for Units based on an index of Municipal Securities:
As discussed above, Municipal Securities are typically issued with individual maturities of relatively small size, although they generally are constituents of a much larger municipal bond offering. In recognition of these smaller offering sizes, the Exchange proposes to reduce the minimum original principal amount outstanding requirement for component securities to at least $5 million. Further, the Exchange proposes that qualifying securities must have been issued as part of a transaction of at least $20 million. Lastly, the Exchange proposes to increase the percentage weight of an index that must satisfy the original principal amount outstanding requirement from 75% to 90%.
The Exchange does not believe that reducing the minimum original principal amount outstanding requirement for component securities will make an index more susceptible to manipulation. The Exchange believes that the requirement that component securities in a fixed-income index have a minimum principal amount outstanding, in concert with the other requirements of Commentary .02 to Rule 5.2-E(j)(3), is to ensure that such index is sufficiently broad-based in scope as to minimize potential manipulation of the index.
The Exchange notes that the Commission has previously approved the listing and trading of several series of Units where the underlying Municipal Securities index required that component securities representing at least 90% of the weight of the index have a minimum original principal amount outstanding of at least $5 million and have been issued as part of a transaction of at least $20 million.
The Exchange proposes to substantially reduce the maximum weight that any individual Municipal Security, or group of five Municipal Securities, can have in a Municipal Securities index. The current generic listing rules for Units based on a fixed-income index permit individual component securities to account for up to 30% of the weight of such index and the top-five weighted component securities to account for up to 65% of the weight of such index. The Exchange proposes to reduce these metrics to 10% for individual Municipal Securities and 30% for the top-weighted Municipal Securities in an index.
The Exchange believes that its proposal will reduce the likelihood that a Municipal Securities index underlying a series of Units could be subject to manipulation by ensuring that no individual Municipal Security, or group of five Municipal Securities, represents an outsized weight of a Municipal Securities index.
The current generic listing rules for Units based on an index of fixed-income securities require that such index must include securities from at least thirteen non-affiliated
The current generic listing rules for Units based on an index of fixed-income securities do not have an explicit requirement that an index contain a minimum number of securities. However, given that such rules require an index to contain securities from at least thirteen non-affiliated issuers, there is a de facto requirement that an index of fixed-income securities contain at least thirteen component securities. As described above, a fixed-income index comprised entirely of exempted securities (including Municipal Securities) is not required to satisfy the issuer diversification test, thereby allowing it to have no minimum number of component securities.
The Exchange proposes to require that a Municipal Securities Index contain at least 500 component securities. The Exchange believes that such requirement will ensure that a Municipal Securities index is sufficiently broad-based and diversified to make it less susceptible to manipulation.
The Exchange proposes that the quantitative requirements described above would apply to a Municipal
The Exchange proposes to amend Commentary .03 to NYSE Arca Rule 5.2-E(j)(3) to specify that the Exchange may approve a series of Units for listing based on a combination of indexes, including an index of Municipal Securities. To the extent that an index of Municipal Securities is included in a combination, proposed Commentary .03 will specify that the Municipal Securities index must meet all requirements of Commentary .02A. In addition, Commentary .03 will be amended to specify that requirements related to index dissemination and related continued listing standards will apply to indexes of Municipal Securities. The Exchange notes that a combination index that includes an index of Municipal Securities will not be permitted to seek to provide investment results in a multiple of the direct or inverse performance of such combination index.
In addition to the quantitative requirements described above, the Exchange proposes to adopt additional rules related to (i) index methodology and calculation, (ii) dissemination of information, (iii) initial shares outstanding, (iv) hours of trading, (v) surveillance procedures, and (vi) disclosures. Such additional requirements are consistent with the requirements applicable to Units based on an index of U.S. equity securities, global equity securities and fixed-income securities.
The Exchange proposes to adopt Commentary .02A(b) to Rule 5.2-E(j)(3) which will require that (i) if a Municipal Securities index is maintained by a broker-dealer or fund advisor, the broker-dealer or fund advisor shall erect and maintain a “firewall” around the personnel who have access to information concerning changes and adjustments to the index; (ii) the current index value for Units listed pursuant to proposed Commentary .02A(a) will be widely disseminated by one or more major market data vendors at least once per day and if the index value does not change during some or all of the period when trading is occurring on the NYSE Arca Marketplace, the last official calculated index value must remain available throughout NYSE Arca Marketplace trading hours; and (iii) any advisory committee, supervisory board, or similar entity that advises a Reporting Authority
The Exchange proposes to adopt Commentary .02A(c) which will require that one or more major market data vendors shall disseminate for each series of Units based on an index or portfolio of Municipal Securities an estimate, updated at least every 15 seconds during the Core Trading Session, of the value of a share of each series (the “Intraday Indicative Value”). The Intraday Indicative Value may be based, for example, upon current information regarding the required deposit of securities and cash amount to permit creation of new shares of the series or upon the index value. The Intraday Indicative Value may be calculated by the Exchange or by an independent third party throughout the day using prices obtained from independent market data providers or other independent pricing sources such as a broker-dealer or price evaluation services. If the Intraday Indicative Value does not change during some or all of the period when trading is occurring on the Exchange, then the last official calculated Intraday Indicative Value must remain available throughout Exchange trading hours.
The Exchange proposes to adopt Commentary .02A(d) stating that a minimum of 100,000 shares of a series of Units will be required to be outstanding at commencement of trading.
The Exchange proposes to adopt Commentary .02A(e) stating that the hours of trading for the Units will be as specified in NYSE Arca Rule 7.34-E(a).
The Exchange proposes to adopt Commentary .02A(f) specifying that Units that are listed or traded pursuant to unlisted trading privileges will be subject to the Exchange's written surveillance procedures.
Pursuant to NYSE Arca Rule 5.2-E(j)(3)(A)(v), the Exchange will obtain a representation from an issuer of Units based on an index of Municipal Securities that the net asset value per share of the series will be calculated daily and will be made available to all market participants at the same time.
The basis under the Act for this proposed rule change is the requirement under Section 6(b)(5)
The Exchange believes that the proposed rule change is designed to prevent fraudulent and manipulative acts and practices in that Units listed pursuant to proposed NYSE Arca Rule 5.2-E(j)(3), Commentary .02A will be subject to the existing trading surveillances, administered by FINRA on behalf of the Exchange, which are designed to detect violations of Exchange rules and applicable federal securities laws. The Exchange represents that these procedures are adequate to properly monitor Exchange trading of the Shares in all trading sessions and to deter and detect violations of Exchange rules and applicable federal securities laws. FINRA, on behalf of the Exchange, will communicate as needed regarding trading in the Shares with other markets that are members of the ISG or with which the Exchange has in place a comprehensive surveillance sharing agreement. FINRA also can access data obtained from the MSRB relating to municipal bond trading activity for surveillance purposes in connection with trading in the Shares. FINRA, on behalf of the Exchange, is able to access, as needed, trade information for certain fixed income securities held by a Fund reported to FINRA's TRACE.
Pursuant to proposed Commentary .02A(b), if the index is maintained by a broker-dealer or fund advisor, the broker-dealer or fund advisor shall erect and maintain a “firewall” around the personnel who have access to information concerning changes and adjustments to the index. Further, any advisory committee, supervisory board, or similar entity that advises a Reporting Authority or that makes decisions on the index composition, methodology and related matters, must implement and maintain, or be subject to, procedures designed to prevent the use and dissemination of material non-public information regarding the applicable index.
The index value of a series of Units listed pursuant to proposed Commentary .02A will be widely disseminated by one or more major market data vendors at least once per day and if the index value does not change during some or all of the period
The Exchange believes that the proposed listing standard will ensure that indices underlying a series of Units are sufficiently well-diversified to protect against index manipulation. On an initial and continuous basis, each index will contain at least 500 component securities. In addition, on an initial and continued basis, at least 90% of the Municipal Securities portion of the weight of the index or portfolio each shall have a minimum original principal amount outstanding of at least $5 million and have been issued as part of a transaction of at least $20 million. Further, on an initial and continued basis, no component Municipal Security shall represent more than 10% of the Municipal Securities portion of the weight of the index or portfolio, and the five most heavily weighted component Municipal Securities in an index or portfolio shall not in the aggregate account for more than 30% of the Municipal Securities portion of the weight of such index or portfolio. Lastly, on an initial and continued basis, an underlying index or portfolio must include a minimum of 13 non-affiliated issuers. The Exchange believes that this significant diversification and the lack of concentration among constituent securities provides a strong degree of protection against index manipulation.
In addition, the Exchange represents that Units listed to the proposed generic listing rule will comply with all other requirements applicable to Units including, but not limited to, the applicable rules governing the trading of equity securities, trading hours, trading halts, surveillance, information barriers and the Information Bulletin to ETP Holders, as set forth in Exchange rules applicable to Units.
The Exchange believes that its proposed amendments to Commentary .03 are consistent with the Act because any index of Municipal Securities included in a combination index will be required to meet the requirements of proposed Commentary .02A. In addition, such index will be required to meet the index dissemination and continued listing requirements of Commentary .03. Lastly, a combination index that includes an index of Municipal Securities will not be permitted to seek to provide investment results in a multiple of the direct or inverse performance of such combination index.
In support of its proposed rule change, the Exchange notes that the Commission has previously approved the listing and trading of several series of Units where the underlying Municipal Securities index required that component securities representing at least 90% of the weight of the index have a minimum original principal amount outstanding of at least $5 million and have been issued as part of a transaction of at least $20 million.
The proposed rule change is designed to promote just and equitable principles of trade and to protect investors and the public interest. The Exchange believes that a large amount of information will be publicly available regarding Units listed pursuant to the proposed rule, thereby promoting market transparency. As described above, the IIV will be widely disseminated by one or more major market data vendors at least every 15 seconds during the Exchange's Core Trading Session. The current value of an index underlying a series of Units will be disseminated by one or more major market data vendors at least once per day. Information regarding market price and trading volume of the Units will be continually available on a real-time basis throughout the day on brokers' computer screens and other electronic services, and quotation and last sale information will be available via the CTA high-speed line. Prior to the commencement of trading, the Exchange will inform its ETP Holders in an Information Bulletin of the special characteristics and risks associated with trading the Units. If the Exchange becomes aware that the NAV is not being disseminated to all market participants at the same time, it will halt trading in the Units until such time as the NAV is available to all market participants. With respect to trading halts, the Exchange may consider all relevant factors in exercising its discretion to halt or suspend trading in the Units. Trading also may be halted because of market conditions or for reasons that, in the view of the Exchange, make trading in the Units inadvisable. If the IIV or the index values are not being disseminated as required, the Exchange may halt trading during the day in which the interruption to the dissemination of the applicable IIV or an index value occurs. If the interruption to the dissemination of the applicable IIV or an index value persists past the trading day in which it occurred, the Exchange will halt trading. Trading in Shares of the Funds will be halted if the circuit breaker parameters in NYSE Arca Rule 7.12-E have been reached or because of market conditions or for reasons that, in the view of the Exchange, make trading in the Units inadvisable. In addition, investors will have ready access to information regarding the IIV, and quotation and last sale information for the Units.
The proposed rule change is designed to perfect the mechanism of a free and open market and, in general, to protect investors and the public interest in that it will facilitate the listing and trading of additional types of exchange-traded products based on municipal bond indexes that will enhance competition among market participants, to the benefit of investors and the marketplace. The Exchange has in place surveillance procedures relating to trading in the Units and may obtain information via ISG from other exchanges that are members of ISG or with which the Exchange has entered into a comprehensive surveillance sharing agreement. In addition, investors will have ready access to information regarding the IIV and quotation and last sale information for the Units. Trade price and other information relating to municipal bonds is available through the MSRB's EMMA system.
The Exchange does not believe that its proposal would impose any burden on competition that is not necessary or appropriate in furtherance of the purposes of the Act. The Exchange notes that the proposed rule change will facilitate the listing and trading of Units based on an index of Municipal Securities which will enhance competition among market participants, to the benefit of investors and the marketplace.
No written comments were solicited or received with respect to the proposed rule change.
Within 45 days of the date of publication of this notice in the
(A) By order approve or disapprove the proposed rule change, or
(B) institute proceedings to determine whether the proposed rule change should be disapproved.
Interested persons are invited to submit written data, views, and arguments concerning the foregoing, including whether the proposed rule change is consistent with the Act. Comments may be submitted by any of the following methods:
• Use the Commission's internet comment form (
• Send an email to
• Send paper comments in triplicate to Secretary, Securities and Exchange Commission, 100 F Street NE, Washington, DC 20549-1090.
For the Commission, by the Division of Trading and Markets, pursuant to delegated authority.
Notice is hereby given that, pursuant to the Paperwork Reduction Act of 1995 (44 U.S.C. 3501
Rule 17Ad-16 requires a registered transfer agent to provide written notice to the appropriate qualified registered securities depository when assuming or terminating transfer agent services on behalf of an issuer or when changing its name or address. In addition, transfer agents that provide such notice shall maintain such notice for a period of at least two years in an easily accessible place. This rule addresses the problem of certificate transfer delays caused by transfer requests that are directed to the wrong transfer agent or the wrong address.
We estimate that the transfer agent industry submits 11,006 Rule 17Ad-16 notices per year to appropriate qualified registered securities depositories. The staff estimates that the average amount of time necessary to create and submit each notice is approximately 15 minutes per notice. Accordingly, the estimated total industry burden is 2,752 hours per year (15 minutes multiplied by 11,006 notices filed annually rounded up from 2,751.5 to 2,752).
Because the information needed by transfer agents to properly notify the appropriate registered securities depository is readily available to them and the report is simple and straightforward, the cost is relatively minimal. The average internal compliance cost to prepare and send a notice is approximately $70.75 (15 minutes at $283 per hour).
Written comments are invited on: (a) Whether the proposed collection of information is necessary for the proper performance of the functions of the Commission, including whether the information shall have practical utility; (b) the accuracy of the Commission's estimates of the burden of the proposed collection of information; (c) ways to enhance the quality, utility, and clarity of the information collected; and (d) ways to minimize the burden of the collection of information on respondents, including through the use of automated collection techniques or other forms of information technology. Consideration will be given to comments and suggestions submitted in writing within 60 days of this publication.
An agency may not conduct or sponsor, and a person is not required to respond to, a collection of information under the PRA unless it displays a currently valid OMB control number.
Please direct your written comments to: Charles Riddle, Director/Chief Information Officer, Securities and Exchange Commission, c/o Candace Kenner, 100 F Street NE, Washington, DC 20549, or send an email to:
Securities and Exchange Commission (“Commission”).
Notice.
Notice of an application for an order under section 6(c) of the Investment Company Act of 1940 (the “Act”) for an exemption from sections 2(a)(32), 5(a)(1), 22(d), and 22(e) of the Act and rule 22c-1 under the Act, under sections 6(c) and 17(b) of the Act for an exemption from sections 17(a)(1) and 17(a)(2) of the Act, and under section 12(d)(1)(J) for an exemption from sections 12(d)(1)(A) and 12(d)(1)(B) of the Act. The requested order would permit (a) index-based series of certain open-end management investment companies (“Funds”) to issue shares redeemable in large aggregations only (“Creation Units”); (b) secondary market transactions in Fund shares to occur at negotiated market prices rather than at net asset value (“NAV”); (c) certain Funds to pay redemption proceeds, under certain circumstances, more than seven days after the tender of shares for redemption; (d) certain affiliated persons of a Fund to deposit securities into, and receive securities from, the Fund in connection with the purchase and redemption of Creation Units; and (e) certain registered management investment companies and unit investment trusts outside of the same group of investment companies as the Funds (“Funds of Funds”) to acquire shares of the Funds.
Secretary, Securities and Exchange Commission, 100 F Street NE, Washington, DC 20549-1090; Applicants: OBP Capital LLC, 116 South Franklin Street, Rocky Mount, North Carolina 27804; Spinnaker ETF Series, 116 South Franklin Street, Rocky Mount, North Carolina 27804.
Thankam A. Varghese, Attorney-Adviser at (202) 551-6446 or Parisa Haghshenas, Branch Chief, at (202) 551-6723 (Division of Investment Management, Chief Counsel's Office).
The following is a summary of the application. The complete application may be obtained via the Commission's website by searching for the file number, or for an applicant using the Company name box, at
1. Applicants request an order that would allow Funds to operate as index exchange traded funds (“ETFs”).
2. Each Fund will hold investment positions selected to correspond generally to the performance of an Underlying Index. In the case of Self-Indexing Funds, an affiliated person, as defined in section 2(a)(3) of the Act (“Affiliated Person”), or an affiliated person of an Affiliated Person (“Second-Tier Affiliate”), of the Trust or a Fund, of the Adviser, of any sub-adviser to or promoter of a Fund, or of the Distributor will compile, create, sponsor or maintain the Underlying Index.
3. Shares will be purchased and redeemed in Creation Units and generally on an in-kind basis. Except where the purchase or redemption will include cash under the limited circumstances specified in the application, purchasers will be required to purchase Creation Units by depositing specified instruments (“Deposit Instruments”), and shareholders redeeming their shares will receive specified instruments (“Redemption Instruments”). The Deposit Instruments and the Redemption Instruments will each correspond pro rata to the positions in the Fund's portfolio (including cash positions) except as specified in the application.
4. Because shares will not be individually redeemable, applicants request an exemption from Section 5(a)(1) and Section 2(a)(32) of the Act that would permit the Funds to register as open-end management investment companies and issue shares that are redeemable in Creation Units only.
5. Applicants also request an exemption from section 22(d) of the Act and rule 22c-1 under the Act as secondary market trading in shares will take place at negotiated prices, not at a current offering price described in a Fund's prospectus, and not at a price based on NAV. Applicants state that (a) secondary market trading in shares does not involve a Fund as a party and will not result in dilution of an investment
6. With respect to Funds that effect creations and redemptions of Creation Units in kind and that are based on certain Underlying Indexes that include foreign securities, applicants request relief from the requirement imposed by section 22(e) in order to allow such Funds to pay redemption proceeds within fifteen calendar days following the tender of Creation Units for redemption. Applicants assert that the requested relief would not be inconsistent with the spirit and intent of section 22(e) to prevent unreasonable, undisclosed or unforeseen delays in the actual payment of redemption proceeds.
7. Applicants request an exemption to permit Funds of Funds to acquire Fund shares beyond the limits of section 12(d)(1)(A) of the Act; and the Funds, and any principal underwriter for the Funds, and/or any broker or dealer registered under the Exchange Act, to sell shares to Funds of Funds beyond the limits of section 12(d)(1)(B) of the Act. The application's terms and conditions are designed to, among other things, help prevent any potential (i) undue influence over a Fund through control or voting power, or in connection with certain services, transactions, and underwritings, (ii) excessive layering of fees, and (iii) overly complex fund structures, which are the concerns underlying the limits in sections 12(d)(1)(A) and (B) of the Act.
8. Applicants request an exemption from sections 17(a)(1) and 17(a)(2) of the Act to permit persons that are Affiliated Persons, or Second Tier Affiliates, of the Funds, solely by virtue of certain ownership interests, to effectuate purchases and redemptions in-kind. The deposit procedures for in-kind purchases of Creation Units and the redemption procedures for in-kind redemptions of Creation Units will be the same for all purchases and redemptions and Deposit Instrument and Redemption Instruments will be valued in the same manner as those investment positions currently held by the Funds. Applicants also seek relief from the prohibitions on affiliated transactions in section 17(a) to permit a Fund to sell its shares to and redeem its shares from a Fund of Funds, and to engage in the accompanying in-kind transactions with the Fund of Funds.
9. Section 6(c) of the Act permits the Commission to exempt any persons or transactions from any provision of the Act if such exemption is necessary or appropriate in the public interest and consistent with the protection of investors and the purposes fairly intended by the policy and provisions of the Act. Section 12(d)(1)(J) of the Act provides that the Commission may exempt any person, security, or transaction, or any class or classes of persons, securities, or transactions, from any provision of section 12(d)(1) if the exemption is consistent with the public interest and the protection of investors. Section 17(b) of the Act authorizes the Commission to grant an order permitting a transaction otherwise prohibited by section 17(a) if it finds that (a) the terms of the proposed transaction are fair and reasonable and do not involve overreaching on the part of any person concerned; (b) the proposed transaction is consistent with the policies of each registered investment company involved; and (c) the proposed transaction is consistent with the general purposes of the Act.
For the Commission, by the Division of Investment Management, under delegated authority.
The following is a notice of applications for deregistration under section 8(f) of the Investment Company Act of 1940 for the month of February 2019. A copy of each application may be obtained via the Commission's website by searching for the file number, or for an applicant using the Company name box, at
The Commission: Secretary, U.S. Securities and Exchange Commission, 100 F Street NE, Washington, DC 20549-1090.
Shawn Davis, Branch Chief, at (202) 551-6413 or Chief Counsel's Office at (202) 551-6821; SEC, Division of Investment Management, Chief Counsel's Office, 100 F Street NE, Washington, DC 20549-8010.
For the Commission, by the Division of Investment Management, pursuant to delegated authority.
Notice of request for public comment.
The Department of State is seeking Office of Management and Budget (OMB) approval for the information collection described below. In accordance with the Paperwork Reduction Act of 1995, we are requesting comments on this collection from all interested individuals and organizations. The purpose of this notice is to allow 60 days for public comment preceding submission of the collection to OMB.
The Department will accept comments from the public up to April 29, 2019.
You may submit comments by any of the following methods:
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You must include the DS form number (if applicable), information collection title, and the OMB control number in any correspondence.
Direct requests for additional information regarding the collection listed in this notice, including requests for copies of the proposed collection instrument and supporting documents, to Derek Rivers at SA-17, 10th Floor, Washington, DC 20522-1710, who may be reached on 202-485-6332 or at
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We are soliciting public comments to permit the Department to:
• Evaluate whether the proposed information collection is necessary for the proper functions of the Department.
• Evaluate the accuracy of our estimate of the time and cost burden for this proposed collection, including the validity of the methodology and assumptions used.
• Enhance the quality, utility, and clarity of the information to be collected.
• Minimize the reporting burden on those who are to respond, including the use of automated collection techniques or other forms of information technology.
Please note that comments submitted in response to this Notice are public record. Before including any detailed personal information, you should be aware that your comments as submitted, including your personal information, will be available for public review.
The Smart Traveler Enrollment Program (STEP) makes it possible for U.S. nationals to register on-line from anywhere in the world. In the event of a family emergency, natural disaster or international crisis, U.S. embassies and consulates rely on this registration information to provide registrants with critical information and assistance. One of the main legal authorities for use of this form is 22 U.S.C. 2715.
Ninety-nine percent of responses are received via electronic submission on the internet. The service is available on the Department of State, Bureau of Consular Affairs website
Department of State.
Notice of meeting.
The Department of State (Department) will hold a Town Hall meeting, co-hosted by the Northwest Power and Conservation Council, in Kalispell, Montana, to discuss the modernization of the Columbia River Treaty (CRT) regime.
The meeting will be held on March 20, 2019, from 5:30 p.m. to approximately 7:00 p.m., Mountain Time.
The meeting will be held at the Red Lion Hotel Grand Ballroom, 20 S Main St., Suite 150, Kalispell, MT 59901.
Julien Katchinoff, Deputy Negotiator, Office of Canadian Affairs,
This Town Hall is part of the Department's public engagement on the modernization of the CRT regime. The meeting is open to the public, up to the capacity of the room. Requests for reasonable accommodation should be made to the email listed above, on or before March 13, 2019. The Department will consider requests made after that date, but might not be able to accommodate them. Information about the meeting, can be found at
Surface Transportation Board.
Issuance of Draft Environmental Assessment; Request for comments.
The Surface Transportation Board's (Board's) Office of Environmental Analysis (OEA) has prepared a Draft Environmental Assessment (Draft EA) in response to a petition for exemption filed on November 21, 2018 by Texas Railway Exchange LLC (TREX) to construct and operate an approximately 2,800-foot line of railroad in the City of Galveston, Galveston County, Texas. The proposed rail line would connect the Texas International Terminals facility (the Terminal) on Galveston Bay with an existing line of railroad operated by BNSF Railway Company by crossing an existing Union Pacific Railroad rail line. The proposed rail line would offer a new alternative rail transportation option for rail traffic entering and leaving the Terminal.
The Draft EA evaluates the potential environmental impacts of two alternative rail alignments, as well as the No-Action Alternative and preliminarily concludes that construction of the proposed rail line connection would have no significant environmental impacts if the Board imposes and TREX implements the recommended mitigation measures set forth in the Draft EA. The entire Draft
The EA is available for public review and comment. Comments must be postmarked by March 14, 2019. OEA will consider and respond to comments received on the Draft EA in the Final EA. The Board will issue a final decision on the proposed transaction after issuance of the Final EA.
Josh Wayland by mail at the address above, by telephone at 202-245-0330, or by email at
By the Board, Victoria Rutson, Director, Office of Environmental Analysis.
Federal Aviation Administration (FAA), DOT.
Notice of intent to rule on request to release airport property for non-aeronautical use; Deadhorse Airport (SCC), Deadhorse, Alaska.
The FAA proposes to rule and invites public comment on the release of land at the Deadhorse Airport, Deadhorse, Alaska.
Comments must be received on or before March 29, 2019.
Documents are available for review by appointment at the FAA Anchorage Airports Regional Office, Molly Lamrouex, Compliance Manager, 222 W 7th Avenue, Anchorage, AK. Telephone: (907) 271-5439/Fax: (907) 271-2851 and the Alaska Dept. of Transportation and Public Facilities, 2301 Peger Rd., Fairbanks, AK 99709. Telephone: (907) 451-2216.
Written comments on the Sponsor's request must be delivered or mailed to: Molly Lamrouex, Compliance Manager, Federal Aviation Administration, Airports Anchorage Regional Office, 222 W 7th Avenue, Anchorage AK 99513, Telephone Number: (907) 271-5439/FAX Number: (907) 271-2851.
Molly Lamrouex, Compliance Manager, Federal Aviation Administration, Alaskan Region Airports District Office, 222 W 7th Avenue, Anchorage, AK 99513. Telephone Number: (907) 271-5439/FAX Number: (907) 271-2851.
The FAA invites public comment on the request to release the aeronautical use only grant provision for a portion of lease Lot 1A, Block 700 at the Deadhorse Airport (SCC) under the provisions of 49 U.S.C. 47107(h)(2). The Alaska Department of Transportation and Public Facilities has requested from the FAA that a portion of airport property currently leased to Deadhorse Aviation Center be released for an interim non-aeronautical use. The FAA has determined that the release of the property will not impact future aviation needs at the airport. The FAA may approve the request, in whole or in part, no sooner than 30 days after the publication of this notice.
The disposition of proceeds from the non-aeronautical lease of the airport property will be in accordance with FAA's Policy and Procedures Concerning the Use of Airport Revenue, published in the
Federal Aviation Administration (FAA), Department of Transportation (DOT).
Notice of Cancellation of Preparation of Environmental Impact Statement (EIS) by the Federal Aviation Administration (FAA) for proposed capacity enhancements and other improvements (Proposed Action) at Charlotte Douglas International Airport, Charlotte, NC.
The Federal Aviation Administration (FAA) announces that it has discontinued preparation of an Environmental Impact Statement (EIS) for proposed capacity enhancements and other improvements (Proposed Action) at Charlotte Douglas International Airport (CLT), Charlotte, NC. The Proposed Action initially presented to the FAA entailed: (1) A Fourth 12,000-foot Parallel Runway 1-19 and End-Around Taxiways; (2) Concourse B and Ramp Expansion; (3) Concourse C and Ramp Expansion; and (4) Daily North Parking Deck. Based on developments during the National Environmental Policy Act, 42 U.S.C. 4321
Cancellation of this EIS is immediate.
Mail all comments, statements, or questions concerning this notice to: Mr. Tommy L. Dupree, Assistant Manager, Memphis Airports District Office, 2600 Thousand Oaks Blvd., Suite 2250, Memphis, TN 38118. You may also send comments to
In addition, one copy of any comment submitted to the FAA should be mailed or delivered to Mr. Jack Christine, Chief Operating Officer, City of Charlotte Aviation Department, 5601 Wilkinson Boulevard, Charlotte, NC 28208.
On March 22, 2018, the FAA published in the
In October 2018, FAA conducted an EIS runway length analysis for the proposed 12,000-foot runway, and the
In determining the appropriate level of environmental review going forward, the sponsor, at the request of the FAA, has performed a preliminary noise analysis of the revised Proposed Action. In addition, the FAA has evaluated potential changes in other anticipated environmental impact categories. The FAA has also considered potential mitigation for such impacts. In light of this review, the FAA anticipates that compliance with NEPA can adequately be achieved by preparation of an EA. The City of Charlotte will be responsible for the development of the EA in accordance with NEPA, all applicable federal regulations, and FAA guidance. In addition, the FAA will work with the City of Charlotte to ensure an appropriate level of public involvement is provided as part of the EA process. Once completed, the City will forward the environmental document to the FAA. The FAA remains the responsible Federal agency for compliance with the requirements of NEPA. In this capacity, FAA will make its own independent evaluation of the environmental issues and take responsibility for the scope and content of the EA. The FAA also will make a final decision on whether it can issue a satisfactory environmental finding based upon the EA. The FAA will thereafter determine whether it may take the federal actions necessary to allow implementation of the project. All questions concerning the development, commencement, and public notices related to the EA, should be directed to The City of Charlotte Aviation Department, Mr. Jack Christine, Chief Operating Officer, 5601 Wilkinson Boulevard, Charlotte, NC 28208.
More information on the Proposed Action and the NEPA process is available on the project website at:
Federal Motor Carrier Safety Administration (FMCSA), DOT.
Notice of applications for exemption; request for comments.
FMCSA announces receipt of applications from seven individuals for an exemption from the prohibition in the Federal Motor Carrier Safety Regulations (FMCSRs) against operation of a commercial motor vehicle (CMV) by persons with a current clinical diagnosis of myocardial infarction, angina pectoris, coronary insufficiency, thrombosis, or any other cardiovascular disease of a variety known to be accompanied by syncope, dyspnea, collapse, or congestive heart failure. If granted, the exemptions would enable these individuals with implantable cardioverter defibrillators (ICDs) to operate CMVs in interstate commerce.
Comments must be received on or before March 29, 2019.
You may submit comments identified by the Federal Docket Management System (FDMS) Docket ID FMCSA-2018-0403 using any of the following methods:
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To avoid duplication, please use only one of these four methods. See the “Public Participation” portion of the
Ms. Christine A. Hydock, Chief, Medical Programs Division, (202) 366-4001,
If you submit a comment, please include the docket number for this notice (Docket No. FMCSA-2018-0403), indicate the specific section of this document to which each comment applies, and provide a reason for each suggestion or recommendation. You may submit your comments and material online or by fax, mail, or hand delivery, but please use only one of these means. FMCSA recommends that you include your name and a mailing address, an email address, or a phone number in the body of your document so that FMCSA can contact you if there are questions regarding your submission.
To submit your comment online, go to
If you submit your comments by mail or hand delivery, submit them in an unbound format, no larger than 8
FMCSA will consider all comments and material received during the comment period.
To view comments, as well as any documents mentioned in this notice as being available in the docket, go to
In accordance with 5 U.S.C. 553(c), DOT solicits comments from the public to better inform its rulemaking process. DOT posts these comments, without edit, including any personal information the commenter provides, to
Under 49 U.S.C. 31136(e) and 31315, FMCSA may grant an exemption from the FMCSRs for a five-year period if it finds such exemption would likely achieve a level of safety that is equivalent to, or greater than, the level that would be achieved absent such exemption. The statute also allows the Agency to renew exemptions at the end of the five-year period. FMCSA grants exemptions from the FMCSRs for a two-year period to align with the maximum duration of a driver's medical certification.
The seven individuals listed in this notice have requested an exemption from 49 CFR 391.41(b)(4). Accordingly, the Agency will evaluate the qualifications of each applicant to determine whether granting the exemption will achieve the required level of safety mandated by statute.
The physical qualification standard found in 49 CFR 391.41(b)(4) states that a person is physically qualified to drive a CMV if that person has no current clinical diagnosis of myocardial infarction, angina pectoris, coronary insufficiency, thrombosis, or any other cardiovascular disease of a variety known to be accompanied by syncope, dyspnea, collapse, or congestive cardiac failure.
In addition to the regulations, FMCSA has published advisory criteria
Mr. Caviola is commercial motor vehicle driver who resides in New York and operates in Connecticut. A June 2018, Physician's Statement from his cardiologist to the New York State Department of Motor Vehicles states that his ICD was implanted in 2005 and during his ICD treatment has had no therapies, history of syncope, or loss of consciousness, with symptoms only limited to palpitations.
Mr. Groff is a Class A CDL holder in Pennsylvania. A November 2018, report from his cardiologist states that his CRT-D device was implanted in August of 2018, and following placement he showed likely improvement of his ejection fraction to the 40-45 percent range. His cardiologist reports that he has never had required device therapies.
Mr. Krueger is a commercial motor vehicle driver in Nebraska. August and December 2018 medical documentation from his cardiologist reports that a dual chamber ICD was implanted in 2009 and changed to a biventricular ICD in January of 2018. His report indicated ongoing monitoring of his device and that he is tolerating medical therapy.
Mr. Miller is a Class A CDL holder in California. A January 2019 letter from his cardiologist reports that his ICD was implanted in September of 2018, and that he has not received any type of defibrillation since implantation, has not had cardiovascular complaints and is compliant with his current medical regime.
Mr. Saitta is a commercial motor vehicle driver in New York. An undated letter from his cardiologist reports that his ICD was implanted in 2007 and that since implantation the device deployed once in 2016 inappropriately for atrial tachycardia with rapid ventricular rate. The letter states that Mr. Saitta reported no symptoms other than feeling the shock from the device, and that he did not lose consciousness. Prior to and since that event, the device has not deployed and he has maintained a stable cardiac status.
Mr. Spivey is a Class A CDL holder in North Carolina. A January 2019, letter from his cardiologist reports that his ICD was implanted in March of 2018. His cardiologist reports that he has never received shocks from his device, at times has symptoms of shortness of breath and occasional fatigue after extended walking, and his current cardiac condition is stable.
Mr. Thomas is a commercial motor vehicle driver in Georgia. A December 2018, letter from his cardiologist reports that Mr. Thomas was implanted with an ICD in November of 2018, and is recovering well. He requires follow-up every six months for proper monitoring of his ICD and denies shortness of breath or chest pain.
In accordance with 49 U.S.C. 31136(e) and 31315, FMCSA requests public comment from all interested persons on the exemption petitions described in this notice. We will consider all comments received before the close of business on the closing date indicated in the dates section of the notice.
Departmental Offices, U.S. Department of the Treasury.
Notice.
The Department of the Treasury will submit the following information collection requests to the Office of Management and Budget (OMB) for review and clearance in accordance with the Paperwork Reduction Act of 1995, on or after the date of publication of this notice. The public is invited to submit comments on these requests.
Comments should be received on or before March 29, 2019 to be assured of consideration.
Send comments regarding the burden estimate, or any other aspect of the information collection, including suggestions for reducing the burden, to (1) Office of Information and Regulatory Affairs, Office of Management and Budget, Attention: Desk Officer for Treasury, New Executive Office Building, Room 10235, Washington, DC 20503, or email at
Copies of the submissions may be obtained from Jennifer Quintana by emailing
44 U.S.C. 3501
Departmental Offices, U.S. Department of the Treasury.
Notice.
The Department of the Treasury will submit the following information collection requests to the Office of Management and Budget (OMB) for review and clearance in accordance with the Paperwork Reduction Act of 1995, on or after the date of publication of this notice. The public is invited to submit comments on these requests.
Comments should be received on or before March 29, 2019 to be assured of consideration.
Send comments regarding the burden estimate, or any other aspect of the information collection, including suggestions for reducing the burden, to (1) Office of Information and Regulatory Affairs, Office of Management and Budget, Attention: Desk Officer for Treasury, New Executive Office Building, Room 10235, Washington, DC 20503, or email at
Copies of the submissions may be obtained from Jennifer Quintana by emailing
44 U.S.C. 3501
The Department of Veterans Affairs (VA) gives notice under the Federal Advisory Committee Act that the Veterans' Family, Caregiver, and Survivor Advisory Committee will meet on March 26-27, 2019. The meeting will be held at the Department of Veterans Affairs, 810 Vermont Avenue NW, Room 230, Washington, DC 20420. Both sessions will begin at 9:00 a.m. (EST) each day. The session on March 26 will adjourn at approximately 5:00 p.m. The session on the March 27 (in the Suite 140 Conference Room) will adjourn at approximately 3:00 p.m. The meetings are open to the public.
The purpose of the Committee is to advise the Secretary of Veterans Affairs on matters related to: Veterans' families, caregivers, and survivors across all generations, relationships, and Veterans status; the use of VA care and benefits
On March 26 and 27, the agenda will include information on the pilot research from the Center for Excellence, updates from the Veterans Experience Office (VEO) White House Hotline (regarding comments from Veterans' families, caregivers, and survivors), an update on the Mission Act Implementation and Expansion of the Stipend Program to Pre-9/11/Inclusive Care; update on Tragedy Assistance Program (TAPS) and their collaboration with VA's Research Advisory Committee on Gulf War Veterans' Illnesses; and updates from the Office of Suicide Prevention and Office of Survivors. There will be opening remarks from VA senior leaders including the Chief Veterans Experience Officer and the Committee Chair and a presentation on the Recommendations this Committee submitted in November 2018. Committee members will also discuss the committee work plan and future activities. Public comments will be received at 4:00 p.m. to 5:00 p.m. on March 26, 2019.
Individuals wishing to speak should contact Dr. Betty Moseley Brown at
Because the meeting is being held in a government building, a photo I.D. must be presented at the Guard's Desk as a part of the clearance process. To prevent delays, you should allow an additional 30 minutes before the meeting begins to clear security. If you are interested in attending, please submit your name to Betty Moseley Brown by March 22, 2019 to help expedite the security clearance process. Any member of the public seeking additional information should contact Betty Moseley Brown at (202) 465-6199 or at
Internal Revenue Service (IRS), Treasury.
Final regulation.
This document contains final regulations implementing the centralized partnership audit regime. These final regulations affect partnerships for taxable years beginning after December 31, 2017 and ending after August 12, 2018, as well as partnerships that make the election to apply the centralized partnership audit regime to partnership taxable years beginning on or after November 2, 2015, and before January 1, 2018.
Concerning the regulations under sections 6221, 6226, 6235, and 6241, Jennifer M. Black of the Office of Associate Chief Counsel (Procedure and Administration), (202) 317-6834; concerning the regulations under sections 6225, 6231, and 6234, Joy E. Gerdy-Zogby of the Office of Associate Chief Counsel (Procedure and Administration), (202) 317-6834; concerning the regulations under sections 6222, 6227, 6232, and 6233, Steven L. Karon of the Office of Associate Chief Counsel (Procedure and Administration), (202) 217-6834; concerning the regulations under section 6225 relating to creditable foreign tax expenditures, Larry R. Pounders, Jr. of the Office of Associate Chief Counsel (International), (202) 317-5465; concerning the regulations relating to chapters 3 and 4 of the Internal Revenue Code (other than section 1446), Subin Seth of the Office of Associate Chief Counsel (International), (202) 317-5003; and concerning the regulations relating to section 1446, Ronald M. Gootzeit of the Office of Associate Chief Counsel (International), (202) 317-4953 (not toll-free numbers).
This document contains final regulations under sections 6221 through 6241 of the Internal Revenue Code (Code) to amend the Procedure and Administration Regulations (26 CFR part 301) to implement the centralized partnership audit regime enacted by section 1101 of the Bipartisan Budget Act of 2015, Public Law 114-74 (BBA), as amended by the Protecting Americans from Tax Hikes Act of 2015, Public Law 114-113, div Q (PATH Act), and sections 201 through 207 of the Tax Technical Corrections Act of 2018, contained in Title II of Division U of the Consolidated Appropriations Act of 2018, Public Law 115-141 (TTCA).
Section 1101(a) of the BBA removed former subchapter C of chapter 63 of the Code effective for partnership taxable years beginning after December 31, 2017. Former subchapter C of chapter 63 of the Code contained the unified partnership audit and litigation rules enacted by the Tax Equity and Fiscal Responsibility Act of 1982, Public Law 97-248 (TEFRA) that were commonly referred to as the TEFRA partnership procedures or simply TEFRA. Section 1101(b) of the BBA also removed subchapter D of chapter 63 of the Code and part IV of subchapter K of chapter 1 of the Code, rules applicable to electing large partnerships, effective for partnership taxable years beginning after December 31, 2017. Section 1101(c) of the BBA replaced the TEFRA partnership procedures and the rules applicable to electing large partnerships with a centralized partnership audit regime that determines adjustments and, in general, determines, assesses, and collects tax at the partnership level. Section 1101(g) of the BBA set forth the effective dates for these statutory amendments, which are effective generally for returns filed for partnership taxable years beginning after December 31, 2017.
On December 18, 2015, section 1101 of the BBA was amended by the PATH Act. The amendments under the PATH Act are effective as if included in section 1101 of the BBA, and therefore, subject to the effective dates in section 1101(g) of the BBA.
On June 14, 2017, the Department of the Treasury (Treasury Department) and the IRS published in the
On November 30, 2017, the Treasury Department and the IRS published in the
On December 19, 2017, the Treasury Department and the IRS published in the
On January 2, 2018, the Treasury Department and the IRS published in
On February 2, 2018, the Treasury Department and the IRS published in the
On March 23, 2018, Congress enacted the TTCA, which made a number of technical corrections to the rules under the centralized partnership audit regime. The amendments under the TTCA are effective as if included in section 1101 of the BBA, and therefore, subject to the effective dates in section 1101(g) of the BBA.
On August 9, 2018, the Treasury Department and the IRS published in the
On August 17, 2018, the Treasury Department and the IRS published in the
In the preambles to the June 2017 NPRM and November 2017 NPRM, comments were requested regarding certain international and tax-exempt aspects of the centralized partnership audit regime. No comments were received in response to these requests, other than a comment regarding fiduciary issues under title I of the Employee Retirement Income Security Act of 1974 (ERISA), which is discussed later in section 3.B.i of the Summary of Comments and Explanation of Revisions. The Treasury Department and IRS will still consider comments on whether any issues related to international rules and tax-exempt partners warrant guidance either under the centralized partnership audit regime provisions or under the relevant provisions of the Code directly related to those areas.
After careful consideration of all written public comments received in response to the June 2017 NPRM, the December 2017 NPRM, and the August 2018 NPRM, as well as statements made during the public hearings for the June 2017 NPRM and the August 2018 NPRM, the portions of the August 2018 NPRM described in this preamble are adopted as amended by this Treasury Decision. Comments received in response to the February 2018 NPRM or that otherwise concern basis and tax attribute rules under § 301.6225-4 or § 301.6226-4 will be addressed in future guidance. For purposes of this preamble, the regulations proposed in the June 2017 NPRM, the November 2017 NPRM, and the December 2017 NPRM are collectively referred to as the “former proposed regulations.” The regulations proposed in the August 2018 NPRM are referred to as the “proposed regulations.”
Thirty written comments were received in response to the June 2017 NPRM. Five statements were provided at the public hearing held on September 18, 2017. Four written comments were received in response to the December 2017 NPRM. No public hearing was held. Eight written comments were received in response to the August 2018 NPRM, and one statement was provided at the public hearing held on October 9, 2018. All of these comments (both written and provided orally at the public hearings) have been considered, and revisions to the regulations were made in response to the comments. The written comments received are available for public inspection at
In addition to changes in response to the comments, editorial revisions were also made to correct typographical errors, grammatical mistakes, and erroneous cross-references. Revisions were also made to clarify language in the proposed regulations that was potentially unclear. Unless specifically described in this Summary of Comments and Explanation of Revisions, such revisions were not intended to change the meaning of the language that was revised. All applicability dates were revised to provide that the final regulations will not apply to taxable years that ended before the date the August 2018 NPRM was filed with the
Three comments were received regarding the scope of the centralized partnership audit regime. All of the comments concerned former proposed § 301.6221(a)-1, which was issued before the TTCA was enacted. No comments were received on proposed § 301.6221(a)-1 as revised subsequent to the TTCA in the August 2018 NPRM.
Prior to amendment by the TTCA, section 6221(a) provided that any adjustment to items of income, gain, loss, deduction, or credit of a partnership shall be determined at the partnership level. Former proposed § 301.6221(a)-1(b)(1)(i) had defined the phrase “items of income, gain, loss, deduction, or credit” to mean all items and information required to be shown, or reflected, on a return of the partnership and any information contained in the partnership's books and records for the taxable year. One comment stated the definition under former proposed § 301.6221(a)-1(b)(1)(i) included items on the partnership return or in the partnership's books and records regardless of whether (i) such items or information would affect the income that the partnership reports or (ii) the particular tax characteristics of the separate partners would affect the ultimate tax liability. The comment expressed concern that, by broadly defining the scope of the centralized partnership audit regime, the proposed regulations would expand the number of partnerships and partners that encounter differences between the correct tax they would have paid if they had properly reported, and the amount of the imputed underpayment. No changes to the regulations were made in response to this comment.
The TTCA amended section 6221(a) by replacing the phrase “items of income, gain, deduction, loss or credit of a partnership for a partnership taxable year (and any partner's distributive share thereof)” with the term “partnership-related item.” The TTCA added a definition of “partnership-related item” to section
In addition, the TTCA amendments address the comment's first concern that the scope of former proposed § 301.6221(a)-1(b)(1)(i) was overly broad in that it was delineated without regard to whether items or information adjusted at the partnership level affect the income of the partnership. Section 6241(2)(B) broadly defines a partnership-related item as any item or amount with respect to the partnership which is relevant in determining the tax liability of any person under chapter 1 of the Code and any partner's distributive share thereof. Section 6241(2)(B). Nothing within that definition limits the term partnership-related item to income reported by the partnership. To the contrary, partnership-related items are any items with respect to the partnership that are relevant to determining any person's chapter 1 tax, which could include partnership expenses, credits generated by partnership activity, assets and liabilities of the partnership, and any other items concerning the partnership that are relevant to someone's chapter 1 tax, irrespective of the impact such items have on the partnership's income.
Furthermore, the core feature of the centralized partnership audit regime is to provide a centralized method of examining items of a partnership. Adjusting items on a partnership's return or in the partnership's books and records, regardless of their effect on partnership income, in a centralized partnership proceeding at the partnership level is not only consistent with this centralized approach, but it also results in efficiencies because one proceeding can be conducted that will bind all partners and the partnership. See section 6223(b). Nothing in the statute requires only items that affect the partnership's income, as reported on the partnership's return, to be adjusted at the partnership level.
Regarding the comment's second concern that an imputed underpayment is determined without regard to partners' tax characteristics and that the imputed underpayment amount differs from the amount of tax the partners would have paid had the items been reported correctly, those concerns are addressed in section 3.A. of this Summary of Comments and Explanation of Revisions.
Former proposed § 301.6221(a)-1(b)(1)(i) provided as an example of an “item of income, gain, loss, deduction, or credit” any items related to transactions between a partnership and any person including disguised sales, guaranteed payments, section 704(c) allocations, and transactions to which section 707 applies. Former proposed § 301.6221(a)-1(b)(1)(i)(H). One comment suggested that this provision inappropriately included partner items such as a disguised fee under section 707(a)(2)(A) and the gain or loss a partner may realize from a disguised sale under section 707(a)(2)(B). The comment recommended revising the regulations to refer to “items
These comments are addressed by the final regulations under § 301.6241-1(a)(6) regarding the definition of partnership-related item. Proposed § 301.6241-6(b)(4) and (5) defined the phrase “item or amount with respect to the partnership” to include an item or amount that relates to a transaction with the partnership by a partner acting in its capacity as a partner or by an indirect partner acting in its capacity as an indirect partner as well as an item or amount relating to a transaction that is described in section 707(a)(2), 707(b), or 707(c). Accordingly, under the proposed regulations if an item or amount related to a transaction that is described in section 707(a)(2), 707(b), or 707(c) and was relevant in determining chapter 1 tax, that item was a partnership-related item and must be determined at the partnership level.
As described more fully in section 1.B., the final regulations clarify that items or amounts relating to transactions of the partnership are items or amounts with respect to the partnership only if those items or amounts are shown, or required to be shown, on the partnership return or are required to be maintained in the partnership's books and records. The final regulations further clarify that items or amounts shown, or required to be shown, on a return of a person other than the partnership (or in that person's books and records) that result after application of the Code to a partnership-related item and that take into account the facts and circumstances specific to that person are not partnership-related items and, therefore, are not determined at the partnership level under the centralized partnership audit regime.
The changes in the final regulations to the definition of partnership-related item address the concerns raised by the comment. First, § 301.6241-1(a)(6) provides that only items or amounts reflected, or required to be reflected on the partnership's return or in its books and records are with respect to the partnership. If such items are relevant to determining chapter 1 tax such items are partnership-related items. This rule applies equally to items or amounts relating to any transaction with, liability of, or basis in the partnership. Second, § 301.6241-1(a)(6) further provides that items reflected, or required to be reflected on the return of a person other than the partnership or in that person's books and records that result after application of the Code to a partnership-related item are not with respect to a partnership and, thus, not partnership-related items. Accordingly, only items of the partnership, as suggested by the comment, are partnership-related items under § 301.6241-1(a)(6).
Proposed § 301.6221(a)-1(a) provided that any consideration necessary to make a determination at the partnership level under the centralized partnership audit regime, including the period of limitations on making partnership adjustments under section 6235 or facts necessary to calculate an imputed underpayment under section 6225 were determined at the partnership level. The final regulations under § 301.6221(a)-1(b) retain this concept, but with revised language. The final regulations provide that any legal or factual determinations underlying any adjustment or determination made under the centralized partnership audit regime are also determined at the partnership level under the centralized partnership audit regime. For instance, such determinations include the period of limitations on making adjustments under the centralized partnership audit regime and any determinations necessary to calculate the imputed underpayment or any modification of the imputed underpayment under section 6225.
After consideration, the Treasury Department and the IRS have concluded that the phrase “legal and factual determinations underlying an
Lastly, the final regulations remove the list of cross-references from the end of proposed § 301.6221(a)-1(a). The TTCA amended section 6221(a) to provide that adjustments to partnership-related items are determined at the partnership level “except to the extent otherwise provided in” subchapter C of chapter 63. Because the statutory language is clear that there are exceptions within subchapter C of chapter 63 to the general rule under section 6221(a) and § 301.6221(a)-1, the list of cross-references from proposed § 301.6221(a)-1(a) was no longer necessary.
Five comments were received with respect to former proposed § 301.6221(a)-1(c), which provided that any defense to any penalty, addition to tax, or additional amount must be raised by the partnership in a partnership-level proceeding under the centralized partnership audit regime, regardless of whether the defense relates to facts and circumstances relating to a person other than the partnership. Once the adjustments determined in the partnership-level proceeding became final, no defense to any penalty determined could be raised or taken into account. Former proposed § 301.6221(a)-1(c).
Several comments stated that the rule under former proposed § 301.6221(a)-1(c) was inequitable to partners because, among other reasons, partners had no control over whether the partnership representative would raise a partner-specific defense, especially in the case of indirect partners who are less directly connected to the partnership representative. Some comments recommended the regulations clarify how partner-level defenses would be raised in the partnership-level proceeding and how decisions regarding those penalty defenses would be communicated to partners. Other comments suggested that partners should be able to raise their own partner-level defenses. In response to these comments, former proposed § 301.6221(a)-1(c) was removed from the proposed regulations in the December 2017 NPRM. See section 3 of the preamble to the December 2017 NPRM. The December 2017 NRPM also proposed regulations under sections 6225 and 6226 (former proposed §§ 301.6225-2(d)(2)(viii) and 301.6226-3(i)) which allowed partners to raise their own partner-level defenses at the time partners took into account the partnership adjustments determined at the partnership level (either through the modification process or as part of the election under section 6226). For further discussion of the rules regarding partner-level defenses under sections 6225 and 6226, see sections 3.D. and 4.C.ii.I. of this preamble. See also section 8.A. of this preamble regarding section 6233(a).
Proposed § 301.6241-6(a) defined the term “partnership-related item” as any item or amount with respect to the partnership which is relevant to determining the tax liability of any person under chapter 1 and any partner's distributive share of any such item or amount. Proposed § 301.6241-6(b) provided that an item or amount is with respect to the partnership without regard to whether the item or amount appeared on the partnership return if the item or amount was described in one of eight categories. Two categories described items or amounts that are shown or reflected, or required to be shown or reflected, on a return of the partnership under section 6031 or are in the partnership's books and records. The other categories described items or amounts relating to certain transactions with the partnership, items or amounts relating to liabilities of the partnership provided the item or amount was reported by a partner, and items or amounts relating to basis in the partnership. Imputed underpayments and any legal or factual determinations necessary to make an adjustment to items or amounts described in the other categories were also defined as items or amounts with respect to the partnership. Proposed § 301.6241-6(b)(1) through (8).
After careful consideration, the Treasury Department and the IRS have revised the definition of “item or amount with respect to the partnership.” First, the final regulations remove the language “without regard to whether or not such item or amount appears on the partnership's return” from proposed § 301.6241-6(b). That phrase derived from the parenthetical in section 6241(2)(B)(i) that follows “item or amount with respect to the partnership.” The Treasury Department and the IRS have determined that the parenthetical language describes items or amounts that appear on the partnership return, items or amounts that were required to appear on the return but actually did not, and items or amounts that factor into the determination of items or amounts that do appear on the partnership return. The Treasury Department and the IRS have concluded that this parenthetical does not extend the concept of “with respect to the partnership” to items or amounts that are reported by third parties and that are otherwise not defined as partnership-related items in these final regulations. See § 301.6241-1(a)(6)(vi)(A) and (B).
Second, the final regulations replace the list of eight categories of items or amounts that were with respect to the partnership with a single, streamlined paragraph, § 301.6241-1(a)(6)(iii) that includes all the items and amounts from the prior list, except as described in this section of this preamble. Third, the definition of partnership-related item was moved from proposed § 301.6241-6 and placed under the definition of “partnership adjustment” in § 301.6241-1(a)(6) to more closely track the statutory structure of section 6241(2).
The final regulations under § 301.6241-1(a)(6)(iii) maintain the rule from the proposed regulations that items or amounts shown or reflected, or required to be shown or reflected, on the return of the partnership are items or amounts with respect to the partnership. The final regulations also clarify that items or amounts in the partnership's book or records are items or amounts with respect to the partnership if those items or amounts are “required to be maintained” in the partnership's books and records. The phrase “required to be maintained” is added to account for items that may be maintained in the partnership's books and records on a voluntary basis. For example, a partnership may choose to maintain the outside basis of each of its partners in its books and records, even though the Code does not require this information be maintained by the partnership. The rule make clears that the voluntary recording of an item in the partnership's books is not determinative of the meaning of the phrase “item or amount with respect to the partnership.” A partnership cannot convert an item or amount that is not with respect to the
The final regulations do not retain the separate categories of items relating to transactions with, liabilities of, and basis in the partnership. Instead, the final regulations adopt a streamlined approach and provide that those items are only with respect to the partnership if those items are reflected, or required to be reflected, on the partnership's return or required to be maintained in its books and records. The separate treatment under the proposed regulations for these types of items and amounts was duplicative. Items or amounts relating to transactions with, liabilities of, and basis in the partnership are items or amounts shown or reflected, or would be required to be shown or reflected, on the partnership return or required to be maintained in the partnership's books and records. Accordingly, describing separate categories for such items was unnecessary and potentially confusing.
Under § 301.6241-1(a)(6)(iii), an item or amount is with respect to the partnership only if the item or amount is shown or reflected, or required to be shown or reflected, on the partnership return or required to be maintained in the partnership's books and records. Consistent with that interpretation, the final regulations provide an item or amount relating to transactions with, liabilities of, and basis in the partnership is with respect to the partnership only if the item or amount is reported, or required to be reported, on the partnership return or is required to be maintained in the partnership's books and records.
The term partnership-related item includes a partner's distributive share of items or amounts that are with respect to the partnership which are relevant in determining the chapter 1 tax of any person. Section 6241(2)(B)(ii). In taking into account the partner's distributive share of partnership-related items, a partner must apply the provisions of the Code to each partnership-related item to compute the partner's ultimate tax liability. The application of the Code to the partner's share of partnership-related items requires taking into account facts and circumstances that are unique to a particular partner. Generally speaking, those facts and circumstances are known only by the partner, are not known by the partnership, and are based on information only within the partner's control and outside of the partnership's control.
In an examination of items on a partner's return, the IRS generally needs information pertaining to the partner's specific facts and circumstances to determine the correctness of the items. The partner whose items are at issue is normally the best source for that type of information. While a partnership may possess some information about a particular partner's facts and circumstances, obtaining information from the partnership is generally not as efficient as obtaining information from the partner. Obtaining such information from the partner also preserves the privacy interests of the partner. Therefore, from both a taxpayer and tax administration standpoint, an examination of items for which application of the Code depends on a partner's particular facts and circumstances is, in general, best performed at the partner level, rather than the partnership level.
Under the TEFRA procedures, these types of items were considered affected items and adjustments to those items were computational adjustments. The centralized partnership audit regime is intended to have a scope sufficient to address those items that would have been considered partnership items, affected items, and computational adjustments under TEFRA, including the regulations. Joint Comm. on Taxation, JCX-6-18, Technical Explanation of the Revenue Provisions of the House Amendment to the Senate Amendment to H.R. 1625 (Rules Committee Print 115-66), 37 (2018) (JCX-6-18). One way to achieve a sufficiently broad scope is to attempt to define the term “partnership-related item” to include those items that would have been partnership items, affected items, and computational adjustments under TEFRA. For the following reasons, however, this approach was not adopted.
The centralized partnership audit regime is a fundamentally distinct system from TEFRA. While under both sets of rules adjustments are made at the partnership level and those adjustments are binding on partners, the framework for assessing and collecting tax resulting from those adjustments is significantly different. Under TEFRA, tax attributable to partnership items determined at the partnership level and tax attributable to affected items was assessed against the partners of the partnership through computational adjustments made by the IRS with respect to the partner. Computational adjustments were made either by mailing a notice of deficiency to the partner if factual determinations were necessary at the partner level or by directly assessing tax against the partner. The tax was assessed with respect to the year that was audited by the IRS, and assessments were required to be made within one year of the completion of the partnership-level proceeding.
Under the centralized partnership audit regime, adjustments to partnership-related items are similarly determined at the partnership level. In stark contrast to the TEFRA procedures, however, the tax attributable to those adjustments is also assessed and collected at the partnership level in the form of an imputed underpayment determined pursuant to section 6225. An imputed underpayment is assessed as if it were a tax imposed for the adjustment year, generally the year in which the adjustments are finally determined, instead of the year that was subject to examination. Section 6225(d). The partnership, not the partners, is liable for the imputed underpayment. A partnership may elect the alternative to payment of the imputed underpayment under section 6226 and “push out” the adjustments determined at the partnership level, in which case the tax attributable to the adjustments is assessed and collected from the partnership's partners. Unlike the TEFRA procedures, however, under the push out process, assessment and collection is initiated by the partner, rather than by the IRS, by the partner taking into account the partnership adjustments and self-reporting any tax due on the partner's next filed return, alleviating both the administrative and timing issues that arose in TEFRA. See section 2.A of the preamble to the June 2017 NPRM.
When calculating an imputed underpayment based on adjustments determined at the partnership level, taxpayer favorable adjustments are generally disregarded and the highest rate of tax is applied. This formula may produce an amount that is larger than the cumulative amount of tax the partners would have paid had the partners taken the adjustments into account separately, but it also relieves the IRS of the obligation to account for specific partner facts and circumstances when initially determining the imputed underpayment amount. During the modification phase, a partnership may, at its option, request that the imputed underpayment be modified to take into account partner tax attributes and facts and circumstances. See section 3.B. for further discussion.
When taking into account adjustments under section 6226, a partner determines the increase or decrease in tax that would have occurred if the adjustments were taken into account for the partner's tax year correlating to the year that was audited. For intervening years, any year between the audited year and the current year, the partner must determine the effect on tax attributes of the adjustments and the resulting increase or decrease that would have occurred for those years as well. The partner then adjusts her tax for the current year by the aggregate tax that would have resulted had the adjustments been properly taken into account. Under TEFRA, it was the IRS's burden to determine tax at the partner level. The centralized partnership audit regime, under section 6226, shifts that burden from the IRS to the partner. As a result, it is neither necessary nor efficient for the IRS to determine at the partnership level the facts and circumstances specific to a partner in order for that partner to determine the proper amount of tax in the case of a push out.
The rules for calculating an imputed underpayment under section 6225 and the computation rules under section 6226 are sufficiently broad to ensure that the tax attributable to items that would have been partnership items, affected items, and computational adjustments under the TEFRA is collected under the centralized partnership audit regime. When the partnership pays an imputed underpayment, the application of limitations and restrictions is assumed and favorable adjustments are disregarded unless a partnership demonstrates that partner tax attributes should override those assumptions. In this way, the imputed underpayment determination, including any modifications, sufficiently accounts for those types of items that would have been affected items or computational adjustments under TEFRA. Similarly, in the case of an election under section 6226, the re-computation process necessarily involves the application of items that would have been affected items or computational adjustments.
Because both the imputed underpayment rules and the section 6226 rules sufficiently address items that would have been partnership items, affected items, and computational adjustments, it is both unnecessary and over-inclusive to define partnership-related item to encompass all of those items. Accordingly, the final regulations clarify that the term partnership-related item does not include items or amounts that would have been TEFRA affected items or computational adjustments. The final regulations do this by defining “with respect to the partnership” to exclude items or amounts shown, or required to be shown, on a return of a person other than the partnership (or in that person's books and records) that result after application of the Code to a partnership-related item and that take into account the facts and circumstances specific to that person. Because these items and amounts are not with respect to the partnership, they are not partnership-related items the IRS must adjust at the partnership level. Two examples were added to the final regulations under § 301.6241-1(a)(6)(vi) to illustrate this rule.
The definition of “with respect to the partnership,” and by extension partnership-related item, under the final regulations preserves the centralized nature of the proceeding with respect to the partnership. During the partnership level proceeding under the centralized partnership audit regime, the IRS adjusts items that are germane to the partnership as an entity—that is, items reported by the partnership on its return or items in its books and records generally used for purposes of completing the return. The partnership has access to this information, and it is therefore, in general, most efficient to obtain this information from the partnership in the partnership level proceeding.
This rule also protects the tax and privacy interest of partners. Under section 6223, partners are bound by actions taken by the partnership in the partnership proceeding and by any final decision in the partnership proceeding. Unlike under TEFRA, individual partners do not have a right to participate in the partnership level administrative or judicial proceeding. If items based on the application of the Code to a particular partner based on that partner's facts and circumstances were items required to be determined at the partnership level, the partner may be unable to dispute adjustments to those items. And even if the partner were able to dispute adjustments to those items, the partner would need to divulge private information in a proceeding in which the partnership was the party, not the partner itself.
In addition, a rule that would require that such items and amounts be determined at the partnership level raises significant administrative concerns for the IRS. In general, the partnership would in most cases lack the facts necessary to determine items or amounts that depend on the facts and circumstances of the partners. By necessity, the IRS would be required to involve the partners in the examination to the extent the partner's items and amounts were at issue. Requiring the IRS to involve potentially the many partners in the entity level examination of the partnership would undermine the efficiencies of the centralized partnership audit regime's concept of the partnership representative and the binding nature of the partnership representative on the outcome of the entity level examination. Further, if the IRS did not examine all of the various items or amounts on the partners' returns during the partnership level proceeding, the IRS would, for each of the partners' items and amount that were also partnership-related items, be precluded from adjusting those items at the partner level outside of the centralized partnership audit regime. This would lead to an unnecessary expansion of partnership-level proceedings to encompass what could more simply and efficiently be resolved at the partner level for one or a small group of partners.
One comment recommended that all partners should be audited as a group, but only about their financial involvement within the scope of the partnership. According to the comment, outside interests and income should not be determined at the partnership level. Although it is not entirely clear what the comment includes in the phrases “financial involvement within the scope of the partnership” and “outside interests and income”, the Treasury Department and the IRS understand this comment to be a request to limit the scope of the items that are “with respect to the partnership” for purposes of this section. Another comment suggested that the scope of the term “partnership-related item” should not be unreasonably broad, particularly with respect to partner-level items where the underlying issue is primarily of interest to the partner and not the partnership. The comment expressed concern that the partnership could have little interest in disputing a proposed adjustment that would have little impact to the partnership but could have a dramatic effect on a particular partner.
These comments were adopted as reflected in the changes to the definition of “with respect to the partnership” described in this section of this preamble. Under the final regulations, outside interests and income and partner-level items are not “with respect to the partnership” to the extent those are not items or amounts reflected, or required to be reflected, on the
In addition to the revisions described earlier in this section of this preamble, the term imputed underpayment was moved from the definition of “item or amount is with respect to the partnership” to the definition of partnership-related item under § 301.6241-1(a)(6)(ii). This change clarifies that an imputed underpayment is always a partnership-related item. First, an imputed underpayment is a creation of the centralized partnership audit regime and can only arise under the centralized partnership audit regime. See sections 6225, 6226, and 6227. Second, the statute expressly defines an imputed underpayment as an item or amount that is with respect to the partnership. Section 6241(2)(B)(i). Third, an imputed underpayment is relevant in determining the liability of any person under chapter 1, as defined in § 301.6241-1(a)(6)(iv), because payment of the imputed underpayment by the partnership relieves the partners of any chapter 1 liability attributable to the reviewed year partnership adjustments.
Five comments were received concerning section 6222, regarding the requirement that a partner's return be consistent with the partnership return. The comments covered the following topics: Inconsistent treatment in the case of an amended return, an administrative adjustment request, or where no partnership return is filed; the form and method for identifying inconsistent treatment; proceedings to adjust identified, inconsistently reported items; and the election regarding consistent treatment with a schedule furnished to the partner by the partnership. In addition to responding to these comments, this section of the preamble describes changes to the language of § 301.6222-1(a)(2) regarding partners that are partnerships with an election in effect under section 6221(b).
One comment recommended that the regulations clarify that a partner may file an amended return in order to take a position inconsistent with the filed partnership return as long as such amended return includes a statement identifying the inconsistent treatment. Under section 6222(a), a partner shall, on the partner's return, treat each partnership-related item in a manner that is consistent with the treatment of such item on the partnership return. Proposed § 301.6222-1(a) provided that the treatment of partnership-related items on a partner's return must be consistent with the treatment of such items on the partnership return in all respects, including the amount, timing, and characterization of such items. The term “partner's return” is not defined in either section 6222(a) or proposed § 301.6222-1(a).
Section 6222(a) and § 301.6222-1(a) are designed to ensure consistent treatment of partnership-related items on partners' returns and the partnership return filed with the IRS, except for cases where the partner notifies the IRS of the inconsistency. The requirement to be consistent with the partnership return extends to each return filed by the partner that reflects, or is required to reflect, partnership-related items. This includes both original and amended returns. Any other application of this requirement would render the requirement of consistency meaningless. For example, a partner could file a return on April 15 taking a consistent position, only to turn around on April 16 and file an amended return taking an inconsistent position.
To clarify that the consistency requirement under section 6222(a) and proposed § 301.6222-1(a) applies to each return of the partner, the final regulations provide that the term “partner's return” for purposes of § 301.6222-1 includes any return, statement, schedule, or list, and any amendment or supplement thereto, filed by the partner with respect to any tax imposed by the Internal Revenue Code. Accordingly, pursuant to § 301.6222-1(a), a partner on either an original or an amended return must treat partnership-related items consistently with how those items were treated on the partnership return filed with the IRS.
The clarification of the term “partner's return” also addresses the comment's suggestion that the regulations permit inconsistent treatment on an amended return provided the IRS is notified of that inconsistent treatment. Under § 301.6222-1(c)(1), the requirement that a partner treat a partnership-related item consistently with the partnership's treatment of that item, and the effect of inconsistent treatment, do not apply to partnership-related items identified as inconsistent (or that may be inconsistent) in a statement attached to the partner's return on which the partnership-related item is treated inconsistently. As clarified in these final regulations, the term partner's return for purposes of § 301.6222-1 includes any amendment to the partner's original return. Accordingly, so long as a partner notifies the IRS of an inconsistent treatment, in the form and manner prescribed by the IRS, by attaching a statement to the partner's return—including an amended return—on which the partnership-related item is treated inconsistently, the consistency requirement under § 301.6222-1(a), and the effect of inconsistent treatment under § 301.6222-1(b), do not apply to that partnership-related item.
When a partner on an amended return treats a partnership-related item inconsistently with how the item was treated on the partnership return, the partner is making a request for an administrative adjustment of that partnership-related item. Accordingly, the rule under proposed § 301.6227-1(a) that provided a partner may not request an administrative adjustment of a partnership-related item was revised to account for situations in which on an amended return a partner treats a partnership-related item inconsistently with the partnership return pursuant to § 301.6222-1(c)(1).
Section 6227(c) provides that in no event may a partnership file an AAR after a notice of an administrative proceeding with respect to the taxable year is mailed under section 6231. Consistent with section 6227(c), proposed § 301.6227-1(b) provided that no AAR may be filed after a NAP has been mailed by the IRS, except as provided in § 301.6231-1(f) (regarding withdrawal of a NAP). To give effect to this rule in the context of inconsistent treatment, the final regulations under § 301.6222-1(c)(5) provide that a partner
Proposed § 301.6222-1(c)(2) provided that the notification procedures under § 301.6222-1(c) do not apply to a partnership-related item the treatment of which is binding on the partner because of actions taken by the partnership, or because of any final decision in a proceeding with respect to the partnership, under the centralized partnership audit regime. Accordingly, under proposed § 301.6222-1(c)(2), the provisions of § 301.6222-1(c) did not apply with respect to the partner's treatment of a partnership-related item reflected on an AAR. This meant that a partner could not treat an item inconsistently with how such item was treated on an AAR. One comment recommended that the regulations under § 301.6222-1(c)(2) be revised to permit a partner to notify the IRS of an inconsistent position taken with respect to an item reported on an AAR. This comment was adopted.
Under section 6223(b), all partners are bound by actions taken by the partnership and by any final decision with respect to the partnership under the centralized partnership audit regime. In the case of an AAR, section 6223(b) binds each partner to the partnership's making of the request itself and the mechanism by which the adjustments requested are taken into account, including any election by the partnership to have the partners take into account the adjustments. Accordingly, if the partnership takes into account the adjustments by paying an imputed underpayment, the partners must follow the rules under section 6225. If there is no imputed underpayment or if the partnership elects to have the partners take into account the adjustments, the partners must follow the procedures under § 301.6227-3.
When taking into account AAR adjustments under § 301.6227-3, partners must adhere to the consistency requirements under section 6222(a). See § 301.6222-1(a)(4) (providing consistency requirement applies to the treatment of a partnership-related item on an AAR). Nothing in sections 6222, 6223(b), or 6227, however, precludes a partner from notifying the IRS the partner is taking an adjustment into account inconsistently with how the adjusted item was treated in an AAR. While section 6227 imposes certain requirements with respect to AARs, none of those requirements contradict section 6222(c)'s exception to the consistency requirement. Accordingly, the final regulations under § 301.6222-1(c)(2) remove the language stating that the provisions of § 301.6222-1(c)(1) do not apply with respect to a partner's treatment of a partnership-related item reflected on an AAR. In addition, the final regulations under § 301.6227-1 remove the rule under proposed § 301.6227-1(f) regarding the binding nature of an AAR. As a result of these changes, a partner may notify the IRS it is treating an AAR-adjusted item inconsistently in accordance with the provisions of § 301.6222-1(c).
The final regulations under § 301.6222-1(c)(2) maintain the language stating that the provisions of § 301.6222-1(c)(1) do not apply to a partner's treatment of an item reflected on a statement under section 6226 filed by the partnership with the IRS. A cross-reference to § 301.6226-1(e) was also added. In addition, the final regulations clarify that the provisions of § 301.6222-1(c)(1) do not apply to any item the treatment of which is binding on the partner because of an action taken by the partnership or because of a final decision in a proceeding under the centralized partnership audit regime with respect to the partnership. Section 6223(b). Items reflected on a statement under section 6226 filed with the IRS are an example of such items.
Proposed § 301.6222-1(a)(3) provided that a partner's treatment of a partnership-related item attributable to a partnership that does not file a return is per se inconsistent, unless the partner files a notice of inconsistent treatment in accordance with proposed § 301.6222-1(c). One comment recommended that the regulations include an example to illustrate the outcome of the application of the rule under proposed § 301.6222-1(a)(3). The comment observed that without a return filed by the partnership, there would not be a return with which to make the partner's return consistent. To illustrate the application of § 301.6222-1(a)(3), Example 7 was added under § 301.6222-1(a)(5).
In light of the comment, the final regulations under § 301.6222-1(b)(1) include the clarification that where a partnership has failed to file a return, any treatment of a partnership-related item on a partner's return may be removed, and the IRS may determine any underpayment of tax resulting from such adjustment.
Lastly, the final regulations eliminate the phrase “unless the partner files a notice of inconsistent treatment in accordance with proposed § 301.6222-1(c)” from proposed § 301.6222-1(a)(3). This change clarifies that a partner's treatment of an item attributable to a partnership that has not filed a return is per se inconsistent, even if the partner notifies the IRS of the inconsistent treatment. The notification under § 301.6222-1(c) turns off the consistency requirement, but it does not change, as a factual matter, that the partner reported inconsistently.
Under proposed § 301.6222-1(c)(1), in addition to the requirement that a statement identifying an inconsistent treatment must be attached to the partner's return on which the item is treated inconsistently, the statement must be provided to the IRS according to the forms, instructions, and other guidance prescribed by the IRS. One comment asked about the form and method for providing the IRS with the statement described in proposed § 301.6222-1(c)(1) and suggested specific format guidance in the regulations would assist the public in reporting an inconsistent treatment. This comment was not adopted.
The final regulations maintain the rule that a partner must provide the statement described in § 301.6222-1(c)(1) in accordance with forms, instructions, and other guidance prescribed by the IRS. Prescribing the form and method for notifying the IRS of inconsistent treatment through forms, instructions, and other sub-regulatory guidance allows the IRS the flexibility to update its procedures for identifying an inconsistency as appropriate and necessary without the IRS having to amend the regulations. This flexibility preserves government resources and
The same comment asked whether a statement identifying inconsistent treatment can only be filed contemporaneously with the partner's tax return. Proposed § 301.6222-1(c) provided that a statement does not identify an inconsistency unless it is attached to the partner's return on which the partnership-related item is treated inconsistently. Because the plain language of proposed § 301.6222-1(c) made clear that the statement identifying inconsistent treatment must be attached to a return, no change was made in response to this comment.
If a partner fails to satisfy the requirements of § 301.6222-1(a), the IRS may adjust the inconsistently reported partnership-related item on the partner's return to make it consistent with the treatment of such item on the partnership return, unless the partner provides notice of the inconsistent treatment in accordance with § 301.6222-1(c). See § 301.6222-1(b). Under proposed § 301.6222-1(c)(4)(i), if a partner notifies the IRS of an inconsistent treatment of a partnership-related item in accordance with proposed § 301.6222-1(c)(1) and the IRS disagrees with that inconsistent treatment, the IRS may adjust the identified, inconsistently reported item in a proceeding with respect to the partner. Nothing in proposed § 301.6222-1(c)(4)(i) precluded the IRS, however, from also conducting a proceeding with respect to the partnership.
One comment recommended that § 301.6222-1(c)(4)(i) provide that if the IRS does conduct a proceeding with respect to the partnership to adjust an identified, inconsistently reported item, the IRS may include within that proceeding the partner who provided notice of inconsistent treatment. The comment was concerned that the regulations provided partners who identified inconsistent treatment an automatic right to contest the IRS's adjustment through deficiency proceedings, which would result in more partner-level proceedings and which would be contrary to the intent of the centralized system. According to the comment, the recommended rule would allow the IRS to avoid conducting separate partnership and partner proceedings by allowing the IRS to include notifying partners in the partnership-level proceeding, rather than engaging such partners through deficiency procedures.
Proposed § 301.6222-1(c)(4)(i) provided that the IRS may adjust an identified, inconsistently reported item in a proceeding with respect to the partner. The IRS is not required to make that adjustment. The IRS may instead choose to make the adjustment in a proceeding with respect to the partnership. To the extent the comment was suggesting the IRS must adjust an identified, inconsistently reported item in a proceeding with respect to the partner, the comment was not correct.
If the IRS conducts a proceeding with respect to the partnership, that proceeding will include only the IRS, the partnership, and the partnership representative who is acting on behalf of the partnership. No partner, except a partner that is the partnership representative, or any other person may participate in the partnership proceeding without permission of the IRS. See § 301.6223-2(d)(1). Accordingly, while a partner is not generally included in a proceeding with respect to the partnership under the centralized partnership audit regime, the IRS has the authority under § 301.6223-2(d)(1) to allow any other person, including a partner who notified the IRS of inconsistent treatment, to participate in a partnership-level proceeding. Because that authority exists under § 301.6223-2, a separate rule within § 301.6222-1 to allow notifying partners to be included in a partnership-level proceeding is unnecessary. Therefore, the revision to proposed § 301.6222-1(c)(4) as recommended by the comment was not adopted.
All partners, including partners that have filed a notice of inconsistent treatment, are bound by the actions of the partnership and any final decision in a proceeding with respect to the partnership under the centralized partnership audit regime. See section 6223(b). To clarify the application of this rule in the case of a partnership-level proceeding to adjust an identified, inconsistently reported item, proposed § 301.6222-1(c)(4) was revised to provide that where the IRS conducts a proceeding with respect to the partnership, and there is no proceeding with respect to the partner regarding an identified, inconsistently reported partnership-related item, the partner is bound to actions by the partnership and any final decision in the partnership proceeding.
Another comment suggested that the regulations clarify what happens when the IRS conducts a proceeding with respect to the partnership under § 301.6222-1(c)(4)(i) and at the conclusion of that proceeding, the IRS accepts the partnership return as filed. The comment suggested the regulations address what procedures apply for collection of an imputed underpayment in that scenario or for collection of tax from the partner that filed inconsistently. This comment was not adopted.
First, because there is no partnership adjustment in the scenario described, there is also no imputed underpayment to collect from the partnership. Additionally, because there is no imputed underpayment, the partnership cannot make a push out election. See section 4.A.iii of this preamble. With respect to collection of tax from the partner, nothing in the regulations prevents the IRS, when it conducts a proceeding with respect to the partnership under § 301.6222-1(c)(4)(i), from also conducting a proceeding with respect to the partner to adjust an identified, inconsistently reported item. Accordingly, no changes were made in response to this comment.
Under proposed § 301.6222-1(d)(1), a partner is treated as having notified the IRS of treating a partnership-related item inconsistently if the partner demonstrates that the treatment of such item on the partner's return is consistent with the treatment of that item on the statement, schedule, or other form prescribed by the IRS and furnished to the partner by the partnership, and the partner makes a valid election under proposed § 301.6222-1(d)(2). This election must be filed no later than 60 days after the date of such notice. Proposed § 301.6222-1(d)(2). One comment recommended that the regulations provide that this 60-day period may be extended with approval by the IRS. This comment was not adopted.
The IRS may assess and collect any underpayment of tax resulting from an adjustment to conform an inconsistent position in the same manner as if the underpayment were on account of a mathematical or clerical error appearing on the partner's return, except that the procedures under section 6213(b)(2) for requesting abatement of an assessment do not apply. The 60-day period under § 301.6222-1(d)(2) is designed to allow a partner to demonstrate consistency with the information furnished to the partner by the partnership and corresponds to the 60-day period the
Additionally, the 60-day period is a reasonable amount of time for the partner to demonstrate consistency with the information it has received from the partnership. At the time the partner is notified by the IRS of the inconsistent treatment, the partner should be in possession of any statements, schedules, or forms furnished to the partner by the partnership. If the partner were permitted to request abatement, the partner would likewise only have 60 days. Furthermore, if the partnership is made aware by the partner that an item was treated incorrectly on the partnership return or the schedules furnished by the partnership, the partnership has the ability to file an AAR with respect to the partnership-related item.
Another comment suggested guidance is needed as to how the election under proposed § 301.6222-1(d)(2) is made. Proposed § 301.6222-1(d)(2)(i) provided that the election must be filed in writing with the IRS office set forth in the notice that notified the partner of the inconsistency. Proposed § 301.6222-1(d)(2)(ii) provided the election must be clearly identified as an election under section 6222(c)(2)(B); signed by the partner making the election; accompanied by a copy of the incorrect statement and IRS notice that notified the partner of the inconsistency; and include any other information required in forms, instructions, or other guidance prescribed by the IRS.
The comment did not suggest what further guidance should be provided in the regulations. Deferring further guidance to forms, instructions, and other sub-regulatory guidance allows the IRS the flexibility to update its procedures as appropriate and necessary without the IRS having to amend the regulations. As discussed earlier in this section of this preamble, this flexibility preserves government resources and also expedites the guidance process for taxpayers to be aware of changes in IRS procedures. Accordingly, proposed § 301.6222-1(d)(2) was not revised in response to this comment.
Proposed § 301.6222-1(a)(2) provided that the rules of § 301.6222-1 apply to a partnership-partner regardless of whether the partnership-partner has made an election under section 6221(b) to elect out of the provisions of the centralized partnership audit regime. The final regulations clarify that the rules of § 301.6222-1 apply to all partners including partnership-partners that have elected out of the centralized partnership audit regime and revise the language referring to such partners to better conform to similar references in other regulation sections.
Proposed § 301.6222-1(b)(3) provided a rule regarding the effect of inconsistent treatment where the partner is itself a partnership and also provided a cross-reference to the rules under section 6232(d)(1)(B) and § 301.6232-1(d). To better conform the two sets of rules and to reduce any potential confusion between the provisions, the final regulations eliminate the rule under § 301.6222-1(b)(3) in favor of providing only a cross-reference to the rules under section 6232(d)(1)(B) and § 301.6232-1(d).
Twenty comments were received concerning section 6225 and the rules regarding imputed underpayments. This section 3 addresses the comments concerning the determination of an imputed underpayment under proposed § 301.6225-1; modification of an imputed underpayment under proposed § 301.6225-2; and the rules regarding how adjustments that do not result in an imputed underpayment are taken into account in accordance with proposed § 301.6225-3. As discussed in the Background, comments concerning the rules regarding basis and tax attributes under proposed § 301.6225-4 will be addressed in future guidance.
Section 6225(b)(1)(B) provides that the determination of any imputed underpayment is made by “applying the highest rate of tax in effect for the reviewed year under section 1 or 11.” Consistent with section 6225(b)(1)(B), proposed § 301.6225-1 provided that an imputed underpayment is determined by multiplying the total netted partnership adjustment by the highest rate of federal income tax in effect for the reviewed year under section 1 or 11 and increasing or decreasing that product by certain adjustments to credits and creditable expenditures.
One comment stated that the statute's use of the highest marginal tax rate to calculate the imputed underpayment is unfair to taxpayers who may not be taxed at the highest marginal rate, particularly with respect to adjustments for qualified dividends or capital gains, where a partner is subject to the alternative minimum tax, or where a partner is a tax-exempt entity. To the extent the comment was suggesting that the regulations use a rate different than the rate prescribed in the statute to compute an imputed underpayment, the comment was not adopted. Section 6225(b)(1)(B)'s mandate to “apply the highest rate of tax in effect for the reviewed year under section 1 or 11” is unambiguous, and there is no exception from application of the highest rate for any particular partnership or for any specific type of partner, such as an exception that takes into account unique circumstances of specific partners. Because application of the highest rate is established by statute, the regulations also apply the highest rate of tax to determine an imputed underpayment under section 6225(b).
A partnership and its partners may be able to reduce the rate used in computing an imputed underpayment by requesting modification under section 6225(c). For example, the partnership may request modification under § 301.6225-2(d)(3) with respect to partnership adjustments that are allocable to a tax-exempt entity or modification under § 301.6225-2(d)(4) with respect to adjustments to capital gains or qualified dividends that are attributable to an individual. The partnership may also make a push out election under section 6226, allowing partners to take into account the adjustments and pay tax using their respective marginal tax rates, including taking into account the effect of the alternative minimum tax.
Proposed § 301.6225-1(a)(1) provided that each imputed underpayment determined under § 301.6225-1 is based solely on partnership adjustments with respect to a single taxable year. One comment recommended that the regulations allow adjustments that move income or expense from one year to another to be netted for purposes of computing the imputed underpayment amount. This comment was not adopted.
The comment described an example in which the IRS determines that the partnership should have reported income in year 1 that was originally reported in year 2. The increase in income for year 1 results in an imputed underpayment. The decrease in income in year 2 is an adjustment that does not
Section 6225(b) sets forth the rules for determining an imputed underpayment. The statutory structure of section 6225(b) is premised on the concept that an imputed underpayment is determined with respect to a reviewed year and that adjustments with respect to the reviewed year result in such imputed underpayment or are adjustments that do not result in an imputed underpayment. Section 6225(a). Section 6225(b)(1)(A) expressly provides that “any imputed underpayment
In addition, netting across multiple tax years would not constitute “appropriately netting” within the meaning of section 6225(b)(1)(A). A fundamental federal income tax principle is that each taxable year stands alone.
Furthermore, a timing adjustment, such as the one described in the comment's example, often has effects that must be reflected in each taxable year's return. Allowing such adjustments to net against each other could inappropriately negate those effects. For instance, an adjustment that shifts a depreciation deduction from one year to another year might have the effect of changing a taxpayer's status from being in a loss posture to being in a gain posture for the year from which the loss is being shifted. Although in some cases a gain in one year might effectively offset a loss in another year, such a result cannot be known without an analysis of each of the partners' specific circumstances. As discussed later in section 3.A.i. of this preamble, requiring the IRS to review each partner's specific circumstance in order to determine the imputed underpayment is the type of inquiry that the centralized partnership audit regime was designed to avoid.
A rule that allows for automatic netting of adjustments across tax years also ignores the limitation in section 6225(b)(4) and would create significant administrative burdens for the IRS. Section 6225(b)(4) provides that if any adjustment would result in a decrease in the amount of the imputed underpayment and could be subject to any additional limitation under the Code if taken into account by any person, such adjustment should not be taken into account in the netting process described in section 6225(b)(1)(A). This provision codifies the presumption that, except as otherwise provided, taxpayer favorable adjustments subject to any possible limitation under the Code if taken into account by any person are disregarded when determining an imputed underpayment. The statute does not require the IRS to determine whether taxpayer favorable adjustments are in fact subject to such limitations. A rule allowing for netting across tax years would, however, require the IRS to make such determinations. This would have the effect of inappropriately expanding the number of tax years and partnership adjustments potentially at issue in the partnership-level proceeding. Not only would that result undermine the limitation under section 6225(b)(4), it would also unnecessarily complicate the partnership examination, creating potential burdens for both the IRS and the partnership.
A rule allowing adjustments to offset across years would also create administrative burdens for both the IRS and for taxpayers because it would require determining the identity of the partners affected by the adjustment. While in some cases a lack of partner turnover may make that determination less burdensome, in other cases where there is a high turnover of partners or where special allocations are involved, the determination becomes more difficult. Establishing a rule that allows netting of adjustments across tax years as a general matter fails to take into account the differing make-up of partnerships and their partners. For instance, assume a case where there is a high turnover of partners, adjustments are determined across multiple reviewed years, and the rules allow netting of those adjustments to form a single imputed underpayment. If the partnership requested to modify that imputed underpayment, it would be unclear which partners would be required to participate in modification and if the partnership made a push out election with respect to the imputed underpayment, it would be unclear which partners would be furnished statements under § 301.6226-2.
Lastly, as a practical matter, the IRS may not examine each relevant partnership taxable year. If an adjustment results in moving a partnership-related item from one taxable year to another, the IRS may examine the other taxable year, but the IRS is not required to. Providing a rule requiring the IRS to take into account other taxable years when netting adjustments would effectively require the IRS to examine all of the partnership's open taxable years, which would result in a significant administrative burden to the IRS and the partnership subject to the administrative proceeding. If netting across tax years was allowed, but the IRS did not examine all relevant years, different partnerships would receive different, and potentially distorted, netting results. For instance, a partnership under examination for multiple taxable years could potentially benefit from netting across those taxable years, but a partnership under examination for only one taxable year would not receive the same benefit. The determination of an imputed underpayment amount for any one year should not be dependent on the number of partnership taxable years the IRS examines.
Accordingly, a rule that allows adjustments to net across taxable years is inconsistent with the statutory language of section 6225(b)(1)(A), contravenes general tax principles, creates administrative burdens for the IRS, and inappropriately affects the timing and netting of certain
Several comments provided recommendations regarding the grouping, subgrouping, and netting rules under proposed § 301.6225-1(c), (d), and (e). In order to determine an imputed underpayment, each partnership adjustment determined by the IRS is first placed into one of four groupings pursuant to § 301.6225-1(c) according to the type of partnership-related item being adjusted: The reallocation grouping, the credit grouping, the creditable expenditure grouping, or the residual grouping. Adjustments are then subgrouped, if appropriate, and netted to produce the total netted partnership adjustment. Proposed § 301.6225-1(b)(2), (d) and (e).
One comment stated that the grouping and netting procedures are broad, vague, and generally err on the side of maximizing tax revenue resulting from an audit without regard to generally applicable provisions of the Code. The design of section 6225(a) and (b) and the grouping and netting rules under § 301.6225-1 is to create an imputed underpayment amount that is based on the highest rate of tax and that disregards any taxpayer favorable adjustments which would otherwise reduce the imputed underpayment. Given this formula, an imputed underpayment determined under § 301.6225-1 will likely reflect an amount that is larger than the cumulative amount of tax the partners would have paid if the partners took the partnership adjustments into account separately.
This formula is a feature of section 6225(a) and (b). The statute expressly disregards certain adjustments that may be subject to limitations and that would otherwise reduce the imputed underpayment and mandates the application of the highest applicable tax rate. Section 6225(b)(1)(B), (2) and (4). The proposed regulations followed these statutory mandates. By removing the obligation on the IRS to consider partners' facts and circumstances, such as whether adjustments that would otherwise reduce the imputed underpayment might be allowed at the partner level or whether adjustments might be taken into account by partners at a rate lower than the highest rate, section 6225(b) shifts the burden from the IRS during this phase of a partnership examination. Because the imputed underpayment determined at this phase in the examination is not required to reflect the facts and circumstances of the ultimate partners, modifications may be necessary to more closely reflect the proper tax treatment.
After the preliminary determination of the imputed underpayment amount under § 301.6225-1, the burden is shifted to the partnership to utilize the modification procedures under § 301.6225-2 if the partnership so chooses. Modification is designed to allow the partnership and its partners to arrive at an imputed underpayment amount that is closer to the correct amount of tax while maintaining the assessment and collection efficiencies of a centralized audit process. See Joint Comm. on Taxation, JCS-1-16, General Explanations of Tax Legislation Enacted in 2015, 65-66 (2016) (JCS-1-16). As an alternative to modification and paying an imputed underpayment, the partnership can elect under section 6226 to push out the adjustments to its partners. Both modification and the push out election provide the opportunity to establish that the correct amount of tax is collected from the partnership and its partners. Accordingly, the final regulations under § 301.6225-1 were not revised in response to the comment's concern about maximizing revenue.
With respect to the comment's concerns that the grouping and netting procedures are broad and vague and disregard generally applicable tax laws, to the extent those concerns related to the scope of the centralized partnership audit regime and what determinations and adjustments are made at the partnership level, see section 1 of this preamble. To the extent the comment's concerns related to the fact that the regulations do not address every possible grouping and netting scenario, the regulations do so intentionally. The Treasury Department and the IRS have determined it is not reasonable to identify within the regulations all possible permutations of adjustments and partnership facts and circumstances that might affect how an imputed underpayment is calculated. Accordingly, the regulations provide general rules that apply to various scenarios that could arise in the examination process. The general nature of the grouping, subgrouping, and netting rules also allow for the regulations to adapt to future changes to the Code.
Notwithstanding the rules' flexible nature, they are rooted in provisions of the Code and regulations that are generally applicable to partnerships and partners. The regulations require that adjustments be placed into groupings and subgroupings based on how the adjusted items are treated pursuant to the Code, the regulations, forms, instructions, and other guidance and do not generally permit the netting of adjustments that might otherwise be subject to limitations or restrictions under the tax laws. Accordingly, the grouping and netting rules are designed with regard to generally applicable provisions of the Code. For further discussion of the comment's concerns regarding the grouping and netting rules and the interaction with generally applicable tax laws, see section 3.A.ii. of this preamble.
One comment suggested that the regulations should allow partners to supply information to the partnership and require that the partnership and the IRS apply this information in calculating the imputed underpayment. The comment also suggested there be a procedure for partners who are passive investors with respect to the partnership to have an opportunity to claim passive losses for net partnership adjustments on audits that increase income and cause the partnership to pay tax on their behalf.
As discussed earlier in this section of this preamble, the tax attributes of the partnership's partners generally do not factor into the preliminary determination of the imputed underpayment. Rather, the imputed underpayment determined under § 301.6225-1 is computed without regard to the partners' tax circumstances, for example whether a partner would be able to offset additional partnership income with additional deductions or whether a partner's tax attributes would reduce the amount of tax due as a result of the adjustments. See section 6225(b)(1)(B), (2) and (4). Modification as described under section 6225(c) and § 301.6225-2 is the more appropriate stage of the examination for the IRS to take into account specific partner tax attributes. Requiring the IRS to review the tax attributes of each partner within the context of the first phase of the partnership examination would undermine the centralized nature of the examination process. The comment's' recommendation to allow partners to present information during the partnership audit and require the IRS to incorporate that information into the imputed underpayment calculation would require the IRS to review and evaluate partner tax attributes in a way that would significantly impede upon the exam and create numerous
Notwithstanding these challenges, proposed § 301.6225-1(c)(1) and (d)(1) provided that the IRS may, in its discretion, place adjustments in groupings and subgroupings in a manner different from that described in the proposed regulations to appropriately reflect the facts and circumstances of each examination. This rule is intended to allow the partnership to provide information to the IRS to demonstrate that certain partner tax attributes should be taken into account when grouping and subgrouping to achieve a more appropriate netting of the adjustments.
The regulations give the IRS the discretion to decide whether or not to use this information in the initial examination phase, that is, prior to modification. This discretion is necessary because the partnership and the IRS may not agree as to whether the groupings and subgroupings requested by the partnership are appropriate. Requiring the IRS and the partnership to resolve such disagreements within the context of the first phase of the partnership proceeding would take time and resources away from the audit and thereby recreate the same problems associated with introducing partner tax attributes into the partnership level exam. If the partnership and the IRS do not agree on the groupings and subgroupings recommended by the partnership during the exam, the partnership is not without recourse. The partnership may request during modification that the IRS include one or more partnership adjustments in a particular grouping or subgrouping or request that certain partnership adjustments be treated as if no limitations or restrictions apply with the result those adjustments may be subgrouped with other adjustments. See § 301.6225-2(d)(6).
Accordingly, modification is generally the appropriate point in the administrative phase at which partner tax attributes may be raised by the partnership and considered by the IRS. For example, the partnership and its partners can utilize the amended return procedure or the alternative procedure to filing amended returns, which require partners to take the adjustments into account in light of their individual tax attributes. Those procedures would potentially allow partners to offset passive income with any passive losses, consistent with the procedure recommended by the comment. In the alternative, the partnership may elect to push out the adjustments under section 6226, and the partners would be required to take into account the adjustments and any effects on the partners' tax attributes. At that stage, the partners could use passive losses to the extent permitted by the rules under § 301.6226-3 (regarding how partners take into account pushed out adjustments).
Although the IRS is permitted to consider partner tax attributes during the first phase of the partnership exam, the statute and the regulations provide clear guidance on the modification process and specifically how a partnership may request that partners' tax attributes be taken into account to reduce the imputed underpayment. Limiting the requirement that the IRS consider such information to the modification stage is efficient for both the IRS and the partnership because it ensures that the first phase of the exam is focused on the substance of what adjustments must be made at the partnership level, rather than on specific partner attributes.
For these reasons, the comment suggesting a rule that permits partners, as a matter of right, to present information regarding their tax attributes during the partnership audit is not adopted. However, a partnership may request that the IRS take into account facts and circumstances relating to its partners pursuant to the rules under § 301.6225-1(d)(1) and (e)(1), which may allow for more appropriate grouping and subgroupings of adjustments. The comment's recommendation that the IRS be required to apply such information during the netting process was not adopted. The partnership may, however, request during modification to reduce the amount of the imputed underpayment based on the partners' specific tax attributes.
Another comment stated the proposed regulations create a divergence between the imputed underpayment amount and the cumulative amount that the reviewed year partners would have to pay if the adjustments were allocated to them. The comment described two situations to illustrate this concern. In the first situation, one adjustment increases ordinary income, and another adjustment decreases capital gain. The comment concludes that because the proposed regulations do not allow the decrease in capital gain to be netted against the increase in ordinary income, the partners may have overpaid tax with respect to the capital gain. In the second situation, one adjustment increases capital gain, and another adjustment decreases ordinary income. The comment concludes that because the proposed regulations do not allow the decrease in ordinary income to be netted against the increase in capital gain, the partners may have overpaid tax with respect to the ordinary income. The comment suggested that the Treasury Department and the IRS should ensure that the government does not seek an increase in tax collections solely because the partnership bears the burden for the tax. This comment was not adopted because its conclusions are based on assumptions that may not apply in all situations and section 6225(b)(1)(A) requires that adjustments are “appropriately netted” taking into consideration the further limitation of section 6225(b)(4) which does not permit the netting of adjustments that would reduce the imputed underpayment with other adjustments. The comment's suggestion presents the same issues described earlier in this section of the preamble regarding the introduction of partner tax information in the partnership level proceeding.
The comment's conclusions that the partners may have overpaid tax with respect to the decreased capital gain or the decreased ordinary income may be true in some cases. Without a review of the partners' accounts or some affirmation from the partners that they did pay tax, the IRS cannot be certain this is true in all cases or any one particular case. For example, a partner may have been in an overall loss position for the taxable year, may not have originally reported the decreased item, or may not have filed a return. As discussed earlier in this section of this preamble, the initial phase of the examination is not designed for the IRS to consider the specific circumstances of any partners. A rule requiring the IRS to consider specific partner circumstances would require the IRS to review each partner's account and prior returns to ensure that the partner previously took an item into account and paid tax on that item. Such a rule would create significant burden on the IRS during the initial exam phase and undermine a core aspect of the centralized partnership audit regime's shifting of the burden from the IRS to the partnership and its partners. As discussed earlier in this section of this preamble, a partnership may request that tax attributes are accounted for by using the modification procedures or the partnership may make the election under section 6226.
The comment also appears to conclude that if all partnership adjustments were netted, the imputed underpayment would result in some number closer to the amount the reviewed year partners would have to pay if the adjustments were allocated to
As discussed earlier in this section of this preamble, “appropriately netting” within the meaning of section 6225(b)(1)(A) means, as a general matter, that when netting partnership adjustments for purposes of determining an imputed underpayment, all limitations under the Code should be considered, including limitations that would otherwise prevent the partnership from netting certain items. Section 6225(b)(4)'s rule regarding taxpayer favorable adjustments subject to additional limitations under the Code if taken into account by any person supports this interpretation. Because certain items could be subject to limitations in the hands of certain partners, the statute requires that limitations be accounted for by assuming they exist for purposes of determining the imputed underpayment during the initial stage of the examination. The partnership may ameliorate any discrepancies caused by that assumption by demonstrating that no such limitations exist either under § 301.6225-1(d)(1) or (e)(1) or in the modification phase. The partnership can also make the election under section 6226, and the partners will account for such limitations when taking into account the adjustments.
The comment suggested specific approaches to ameliorate the concerns it raised. First, it suggested a rule that would allow an ordinary income grouping to be reduced by a capital loss grouping to the extent of $3,000 per direct or indirect individual partner. Second, it suggested a rule that would apply the applicable rate for net negative adjustments to the relevant subgrouping and allow this amount to reduce the imputed underpayment amount. Neither of these specific recommendations was adopted.
The Code permits corporate taxpayers to deduct capital losses to the extent of capital gains. Section 1211(a). In the case of taxpayers other than corporations, the Code allows a deduction for any capital loss exceeding capital gain up to $3,000 ($1,500 in the case of a married individual filing separately). Section 1211(b). A rule allowing an offset of $3,000 against an increase in ordinary income in the situations described by the comment would require the IRS to first determine that the partners in the partnership are taxpayers other than corporations such that the rules under section 1211(b) apply. While this may be a relatively simple determination in some cases, requiring the IRS to engage in making the determination contravenes the principle that partners' tax attributes, including partner identity, are generally not accounted for in the initial imputed underpayment calculation.
To the extent the rule recommended by the comment is based on the premise that each partner would be entitled to a $3,000 capital loss, that premise is faulty. One, such a rule would require the IRS to know whether there are no other capital gains (related or unrelated to the partnership) against which the non-corporate partners would first be required to offset the additional capital loss. Two, the rule would require the IRS to consider whether the partner was not an individual subject to the lower deduction amount of $1,500 allowed by section 1211(b). This process would become more burdensome as the number of partners and tiers increased. Accordingly, this comment was not adopted. To extent that this comment recommended a rule that allowed more flexibility for the IRS to group adjustments according to the facts and circumstances of the partners, that rule is reflected in proposed § 301.6225-1(d)(1) and (e)(1) as revised in the August 2018 NPRM. A partnership that wishes to request that the IRS take into account its partner's tax circumstances, including that certain partners are otherwise entitled to a capital loss deduction under section 1211(b), may utilize the discretionary grouping and subgrouping rules under § 301.6225-1(d)(1) and (e)(1) or make a modification request under § 301.6225-2(d)(6).
With respect to the recommendation that the regulations apply the applicable rate for net negative adjustments to the relevant negative subgrouping and allow this amount to reduce the imputed underpayment amount, this recommendation was also not adopted; however, the final regulations allow for the result requested by the comment depending on the facts and circumstances. The comment suggests that the rate used in determining an imputed underpayment should be applied to negative adjustments that would otherwise be adjustments that do not result in an imputed underpayment and allow those negative adjustments to net with other positive adjustments in an effort to calculate an amount that would more closely reflect what the partners would have paid if they had properly reported the adjusted items. Section 6225(b)(1) provides that the imputed underpayment is determined by appropriately netting all partnership adjustments and applying the highest rate of tax under section 1 or 11. Section 6225(b)(3) requires that the partnership adjustments are first separately determined and netted as appropriate within each category of items that are required to be taken into account separately under section 702(a) or other provision of the Code. When “appropriately netting” under section 6225(b)(1)(A), section 6225(b)(4) requires that negative adjustments that could be subject to any limitation or restriction if taken into account by any person be disregarded unless provided otherwise by regulation. The regulations incorporate this rule in § 301.6225-1(d)(3). The regulations also provide the ability, however, to take facts and circumstances into account to allow negative or downward adjustments, where appropriate, to be subgrouped and thus netted with other adjustments. See § 301.6225-1(d)(1). For these reasons, the final regulations maintain the process for subgrouping and netting as provided for in the proposed regulations.
Before being revised in the August 2018 NPRM, former proposed § 301.6225-1(d) had provided that after
Section 202(a) of the TTCA added section 6225(b)(3) to provide that partnership adjustments shall first be separately determined (and netted as appropriate) within each category of items that are required to be taken into account separately under section 702(a) or other provision of the Code. Section 6225(b)(4) provides if any adjustment would (but for section 6225(b)(4)) result in a decrease in the amount of the imputed underpayment, and could be subject to any additional limitation under the provisions of the Code (or not allowed, in whole or in part, against ordinary income) if such adjustment were taken into account by any person, such adjustment shall not be taken into account when appropriately netting partnership adjustments under section 6225(b)(1)(A) except to the extent otherwise provided by the Secretary.
Former proposed § 301.6225-1(d) was revised in the August 2018 NPRM to account for the additions of sections 6225(b)(3) and (4). Proposed § 301.6225-1(d)(3)(i) provided that adjustments are subgrouped, when appropriate, according to how the adjustment would be required to be taken into account separately under section 702(a) or any other provision of the Code or regulations applicable to the adjusted partnership-related item. By separating adjustments into subgroupings according to how and whether the adjustments would be separately stated pursuant to section 702(a), the rules under § 301.6225-1(d)(3)(i) ensure that items that do not properly net against each other at the partnership level under section 702(a) do not net against each other for purposes of determining an imputed underpayment.
For example, under § 301.6225-1(c) a positive adjustment to intangible drilling costs and a negative adjustment to gain or loss from a sale of property described in section 1231 are both placed in the residual grouping. Pursuant to § 301.6225-1(d)(3)(i), each adjustment is then placed in a separate subgrouping to reflect that one adjustment is a negative adjustment and that the items being adjusted are required to be separately stated pursuant to section 702(a). See section 702(a)(3), § 1.702-1(a)(8)(i). Under § 301.6225-1(e)(1), adjustments from separate subgroupings cannot be offset against one another. Accordingly, just as a positive amount of intangible drilling costs would not be netted with a section 1231 loss under section 702(a), a positive adjustment to intangible drilling costs would not net against a negative adjustment to 1231 gain or loss for purposes of determining an imputed underpayment.
Some items that are not separately stated pursuant to section 702(a) may nevertheless be subject to other limitations under the Code or may not otherwise be allowed to net against ordinary income. To account for those types of limitations, proposed § 301.6225-1(d)(3)(i) further provided that if any adjustment could be subject to any preference, limitation, or restriction under the Code (or not allowed, in whole or in part, against ordinary income) if taken into account by any person, the adjustment is placed in its own separate subgrouping. For example, an increase in loss attributable to a trade or business activity of the partnership may not be deductible in the hands of a particular partner because that partner did not materially participate in the partnership activity. See section 469. Because the loss may be limited in the hands of a particular partner, the increase in loss is placed in its own separate subgrouping to prevent any inappropriate netting against an adjustment increasing income of the partnership.
Accordingly, both the comment expressing concerns about the netting of items that do not properly net against each other at the entity level and the comment suggesting the regulations apply general principles of tax law were addressed by the changes to section 6225 in the TTCA and the subgrouping rules under § 301.6225-1(d)(3)(i) as revised in the August 2018 NPRM. As a result, the final regulations were not revised in response to these comments.
Generally, under § 301.6225-1(d), reallocation adjustments must be placed into their own subgroupings, but there is an exception for when multiple reallocation adjustments apply to a single partner or group of partners. Proposed § 301.6225-1(d)(3)(ii) provided that if a particular partner or group of partners has two or more reallocation adjustments allocable to such partner or group, such adjustments may be subgrouped in accordance with § 301.6225-1(d)(3)(i) and netted in accordance with § 301.6225-1(e). Proposed § 301.6225-1(d)(3)(iv) provided a similar rule with respect to recharacterization adjustments.
In January 2017, a prior version of the June 2017 NPRM was made publicly available but was not published in the
One comment recommended that the regulations clarify whether and under what conditions positive and negative adjustments resulting from different reallocation or recharacterization adjustments are permissibly placed in the same subgrouping. The comment stated that the language of both proposed § 301.6225-1(d)(3)(ii) and (iv) seemed to allow the inclusion in the same subgrouping of unrelated positive and negative adjustments provided that all of the adjustments apply to a particular partner or group of partners. The comment suggested that the final regulations include examples clarifying the proper grouping and netting of adjustments pursuant to § 301.6225-1(d)(3). The addition of Example 12 under § 301.6225-1(h) provides the example suggested by the comment. As discussed earlier in this section of this preamble, Example 12 clarifies operation of the rule under § 301.6225-1(d)(3)(ii) allowing for adjustments to be subgrouped together when the adjustments are allocable to a particular
Under § 301.6225-1(e), adjustments from each subgrouping (or grouping if there is no subgrouping within that grouping) are netted to produce either a net positive adjustment or a net negative adjustment with respect to each grouping or subgrouping. When determining an imputed underpayment, generally only net positive adjustments are taken into account, and net negative adjustments are generally treated as adjustments that do not result in an imputed underpayment. Adjustments to credits and creditable expenditures are treated separately. See section 3.A.vi. of this preamble.
One comment suggested that the requirement that only net positive adjustments are taken into account in determining an imputed underpayment will frequently result in double taxation of the same income items. The comment cited to Example 4 under proposed § 301.6225-1(h) (Example 3 in former proposed § 301.6225-1(f)) to demonstrate this point. In Example 4, the IRS determines that $125 of long-term capital gain should have been reported as $125 of ordinary income, resulting in a $125 increase in ordinary income and a corresponding $125 decrease in long-term capital gain (a $125 increase in long-term capital loss). The increase in ordinary income results in an imputed underpayment, and the increase in long-term capital loss is an adjustment that does not result in an imputed underpayment.
To the extent the comment was suggesting that the example does not specify what happens with respect to the $125 increase in long-term capital loss, the example was revised in the August 2018 NPRM to clarify that this loss is taken into account in accordance with § 301.6225-3. Under § 301.6225-3(b), the partnership takes into account the adjustment increasing long-term capital loss in the adjustment year. Alternatively, the partnership may request modification under section 6225(c) or make a push out election under section 6226 to ensure that the negative adjustment is taken into account by the partnership's reviewed year partners, rather than in the adjustment year by its adjustment year partners.
To the extent the comment was expressing more general concerns about double taxation, proposed § 301.6225-1(b)(4) was added in the August 2018 NPRM to provide that if the effect of a partnership adjustment under chapter 1 of the Code is reflected in another adjustment taken into account in the imputed underpayment determination, the IRS may treat an adjustment as zero for the purposes of calculating the imputed underpayment. This rule is designed to ensure that when calculating an imputed underpayment, an adjustment is not counted twice if the tax effect of that adjustment is reflected by another adjustment made by the IRS. A partnership may request that the IRS utilize this rule to treat an adjustment as zero if there is the partnership is concerned about double taxation. Accordingly, to the extent the comment was raising concerns about double taxation, no changes were made to the regulations in response to the comment.
The final regulations under § 301.6225-1(b)(4) do, however, clarify that the IRS has the discretion to treat adjustments as zero for purposes of determining the imputed underpayment if the effect of the adjustment under the Code is reflected in another adjustment. The language requiring that the adjustment must have previously been taken into account under § 301.6225-1 was removed. This change provides the IRS the discretion to treat a partnership adjustment as zero in more situations. For instance, the effect of an adjustment may be reflected in an adjustment to an item treated inconsistently under section 6222(c). The final regulations under § 301.6225-1(b)(4) also remove the language limiting the rule's application to chapter 1. Under the final regulations, the rule applies to the effect of an adjustment under the Code in general. This change also gives more flexibility to the IRS to treat partnership adjustments as zero for purposes of determining the imputed underpayment amount.
One comment suggested that its concerns with the grouping and netting rules might be alleviated by allowing the partnership to treat the partnership adjustment as if it arose during the adjustment year rather than the reviewed year, which would synchronize the imposition of the tax in the adjustment year with the adjustment year partners bearing the liability for the imputed underpayment. This comment was not adopted because it is contrary to the plain language of the statute.
Section 6225(a)(1) refers to adjustments to partnership-related items “with respect to any reviewed year.” Section 6225(b)(1) provides that any imputed underpayment “with respect to any reviewed year” shall be determined by appropriately netting all partnership adjustments “with respect to such reviewed year.” In addition, section 6225(d)(2) defines adjustment year to mean, in the case of an examination, the year in which an FPA is mailed under section 6231 or in the case of adjustment pursuant to a decision in a proceeding under section 6234, the year in which the decision is final. Accordingly, at the time of the modification phase of the examination, the adjustment year will not yet be determined.
If the comment's suggestion were adopted and adjustments were treated as having arisen in the adjustment year, it is unclear whether the reviewed year partners' or the adjustment year partners' tax attributes would be relevant in the modification determination. The modification period will in every case come before the issuance of the FPA. As a result, the adjustment year will not yet have been determined, and therefore the adjustment year partners will not yet be known. In addition, section 6225(c)(2) provides the ability for partners to file amended returns in modification. The statute's use of the phrase “amended return” implies that a prior return must have been filed. A prior return could not have been filed for the adjustment year at this point in the examination because the adjustment year would not yet be determined. The partners from the reviewed year, therefore, must be the partners that utilize the modification procedures under section 6225(c)(2) through the filing of amended returns for the reviewed year. The reviewed year partners' amended returns could not take into account adjustment year adjustments and apply them against reviewed year returns. Accordingly, the plain language of the statute indicates that adjustments for purposes of determining an imputed underpayment are the adjustments with respect to a reviewed year, not the adjustment year.
Furthermore, section 6225(a)(1) provides the partnership shall pay an amount equal to such imputed underpayment in the adjustment year as provided in section 6232. In the case of adjustments that do not result in an imputed underpayment, section
Accordingly, a reasonable reading of the statutory language of section 6225(a) supports an interpretation that adjustments with respect to the reviewed year should be treated as such for purposes of determining an imputed underpayment and not treated as adjustments arising in the adjustment year. However, § 301.6225-3 does provide that adjustments that do not result in an imputed underpayment are taken into account in the adjustment year, that is, when the imputed underpayment is also required to be paid. To that extent, any adjustments that do not result in an imputed underpayment may mitigate the burden of the imputed underpayment on adjustment year partners.
Another comment stated that the time shifting of the tax on partnership examination adjustments from the reviewed year to the adjustment year is inappropriate and that tax on partnership examination adjustments should arise in the reviewed year and not in the adjustment year. The comment further states that the burden of the payment in all cases should fall directly on the reviewed year partners and that the rules should require the reviewed year partners to amend their reviewed year tax returns to include their shares of the partnership examination adjustments. The comment was not adopted because all of the changes recommended by the comment would require amendments to the statute.
Section 6225 provides that if the adjustments result in an imputed underpayment, the partnership shall pay an amount equal to such imputed underpayment in the adjustment year as provided in section 6232. Accordingly, the year partnerships must pay is, by statute, the adjustment year, and if the partnership pays the imputed underpayment without modification or does not make an election under section 6226, the statute is designed so that the adjustment year partners bear the burden of that payment. See section 6241(4) and § 301.6241-4 (denying any deduction to the partnership for any payment made by the partnership, including the imputed underpayment). Additionally, there is no authority within subchapter C of chapter 63 to allow the Treasury Department or the IRS to require that reviewed year partners file amended returns, though partners have the option to do so in modification. The partnership may also make the election under section 6226 which would result in adjustments relating to the imputed underpayment for which the election was made being taken into account by the reviewed year partners.
Another comment suggested treating an audited partnership as an “entity” rather than an “aggregate” solely for the purposes of calculating the imputed underpayment based on majority ownership of the partnership (measured by the partners' interest in profits). Specifically, the comment suggested that if more than 50% of the interest in a partnership's profit is held by one or more individuals, S corporations, or closely-held corporations, the provisions of the Code that apply to individuals should apply for purposes of determining the amount of any imputed underpayment. This comment was not adopted.
As discussed earlier in this section of this preamble, section 6225 is prescriptive as to how an imputed underpayment is determined. The determination process expressly does not determine the imputed underpayment as if the partnership were an individual or an entity. Instead, the process for determining the imputed underpayment, including “appropriately netting all partnership adjustments” under section 6225(b)(1)(A) in accordance with § 301.6225-1 generally does not take into account partner tax attributes, including whether a partner is an individual or a person subject to the Code provisions that apply to individuals. The IRS has the discretion to take into account an attribute of a particular partner when grouping or subgrouping the adjustments, but the IRS is not required to do so. § 301.6225-1(d)(1), (e)(1). For instance, the IRS may consider whether a certain ownership percentage of the partnership was held by individuals, S corporations, or closely-held corporations and group adjustments based on information submitted by the partnership. However, a rule
Moreover, it is not clear that the comment's suggestion of accounting for the individual tax attributes of specific partners and applying the Code's rules regarding those partners would yield an appropriate netting of the adjustments for purposes of determining the imputed underpayment at the partnership level. For example, the Code's rules may apply differently to one individual partner versus another individual partner. Treating all individual partners in the same manner would negate operation of those rules. Accordingly, there is no reason to conclude that treating adjustments according to how some but not all partners' tax attributes would affect an adjustment is any more reasonable than not taking into account any partners' tax attributes. The statute provides a baseline assumption that partners' tax attributes are not taken into account. The imputed underpayment that best reflects the facts and circumstances of the partners should be determined through application of the permissive grouping and subgrouping rules under § 301.6225-1(d)(1), (e)(1) or through modification. Accordingly, the final regulations do not adopt the comment's suggestion to base the imputed underpayment determination on the identity of the majority of the partnership.
Section 6225(b) only provides specific rules with respect to one type of adjustment, that is, the rule that adjustments to distributive shares of partners not be netted under section 6225(b)(2). While it is true a determination regarding an adjustment described in section 6225(b)(2) is usually made with some knowledge of the partners' distributive shares, such a determination does not account for the particular tax attributes of any specific partner. The IRS is not required to know any other information about the specific partners at the initial examination phase to reallocate adjustments between partners. Therefore, in order to effectuate the rule under section 6225(b)(2), there is no need to know whether a partner is an individual, a corporation, a pass-thru partner, or some other entity. Section 6225(b)'s lack of reference to any particular tax attributes of specific partners indicates that the determination of an imputed underpayment is not dependent on knowing any partner's specific tax attributes.
The same comment suggested another alternative in which the grouping and netting rules would account for current year partner attributes for purposes of determining an imputed underpayment.
Section 6225 does not reference either partner tax attributes or current year partners as a consideration in determining the imputed underpayment. As discussed earlier in this section of this preamble, the Treasury Department and the IRS have determined a reasonable interpretation of section 6225(b) supports a process in which the determination of the imputed underpayment does not depend on specific partners' tax attributes. Moreover, the comment's reference to “current year” is ambiguous; it could refer to any number of different time periods: the adjustment year, the actual calendar year in which the imputed underpayment is being determined, the year the imputed underpayment is proposed in a notice of proposed partnership adjustment, the time during the modification period prior to issuance of the FPA, or, if the partnership contests the partnership adjustments in court, the year the court decision is final. It is not administrable for the IRS to determine an imputed underpayment based on the potential tax attributes from time periods that are not fixed relative to the reviewed year and that may result in different partners being the relevant partners. The final regulations reflect the amendments to section 6225 by the TTCA, and therefore the final regulations were not revised in response to this comment.
One comment recommended that the grouping and subgrouping rules be reconsidered due to the concern that under the proposed regulations, the inability to net certain overpayments and underpayments could lead to taxpayers not receiving an appropriate adjustment for taxes previously paid. The comment cited to Example 4 under proposed § 301.6225-1(h) to highlight this concern. In Example 4, the IRS determines that $125 of long-term capital gain should have been reported as $125 of ordinary income, resulting in a $125 increase in ordinary income and a corresponding $125 decrease in long-term capital gain (effectively, a $125 increase in long-term capital loss). The increase in ordinary income results in an imputed underpayment, and the increase in long-term capital loss is an adjustment that does not result in an imputed underpayment.
The comment noted that the example does not specify what happens with respect to the $125 increase in long-term capital loss. As discussed earlier in section 3.A.iii. of this preamble, the example has been revised to clarify that $125 increase in long-term capital loss is taken into account in the adjustment year in accordance with § 301.6225-3. The comment also noted that it is unknown whether the partnership will be able to use the increased capital loss in the future. To avoid this potential adverse consequence, the comment recommended that the regulations permit a partnership to net adjustments across different categories of gain or loss to reflect taxes that were previously paid. This comment was not adopted for several reasons.
As an initial matter, implicit in the comment's suggestion is that either the IRS or the partnership have knowledge of taxes previously paid by the partners. As discussed earlier in section 3.A.i. of the preamble, facts and circumstances unique to specific partners are generally not taken into account in determining whether the adjustments result in an imputed underpayment. The regulations give the IRS wide latitude to consider such facts and circumstances, but the rules do not narrowly define the circumstances when that occurs. See § 301.6225-1(d)(1) and (e)(1). The regulations are designed to maintain flexibility for both the IRS and the partnership to allow for the particular examination to accommodate the unique circumstances of each examination. Based on these reasons alone, the comment's suggestion was not adopted.
The comment's suggestion was also not adopted because it is inconsistent with the overall approach applied to how recharacterization adjustments are taken into account in determining an imputed underpayment. Proposed § 301.6225-1(c)(6)(iii) provided that a recharacterization adjustment results in at least two separate adjustments: One adjustment reversing the improper characterization of the partnership-related item, and the other adjustment effectuating the proper characterization of the partnership-related item. Generally, one of those adjustments is a positive adjustment and the other is a negative adjustment, but each adjustment is normally the same numerical amount ($125 in the case of Example 4 under proposed § 301.6225-1(h)). Under proposed § 301.6225-1(d)(3)(iv), the positive adjustment and the negative adjustment are each placed into its own separate subgrouping. Because an adjustment in one subgrouping may not be netted against an adjustment from another subgrouping, the positive adjustment is not offset by the negative adjustment, and the result is a net positive adjustment that forms the base for an imputed underpayment amount. Proposed § 301.6225-1(e)(2) and (3)(i).
These rules are adopted largely without change in the final regulations in order to ensure that recharacterization adjustments are not inappropriately netted when determining an imputed underpayment, as required by section 6225(b)(1)(A). Allowing for the netting of the negative adjustment against the positive adjustment in the case of a recharacterization adjustment, as suggested by the comment, could cause the positive adjustment to be negated in its entirety, which would defeat the purpose of making the adjustment in the first place. It would also result in the recharacterization adjustment not properly being reflected in the imputed underpayment calculation. For instance, allowing the capital loss to fully offset the ordinary income in Example 3 under § 301.6225-1(h) would not adequately reflect the fact that there was an underreporting of ordinary income by the partnership for that taxable year. Furthermore, if there were no imputed underpayment because recharacterization adjustments were allowed to net, there would be no statutory basis for imposing an interest charge on the partnership as suggested by the comment.
Accordingly, the comment's suggestion to net adjustments across different categories of gain or loss to reflect taxes that were previously paid was not adopted, though the effect of such adjustments may be mitigated, in whole or in part, under certain circumstances through the modification procedures or by making a push out election under section 6226. The final regulations under § 301.6225-1(e)(2) do clarify, however, that positive adjustments and negative adjustments within the same subgrouping may only net within that same subgrouping. No netting is permitted across subgroupings.
In determining whether partnership adjustments result in an imputed underpayment, adjustments to credits are placed in the credit grouping described under § 301.6225-1(c)(3). One comment suggested that for administrative efficiency, it would make sense to group and order credits in accordance with Form 3800 and recommended that the regulations provide for grouping and ordering
As discussed earlier in section 3.A.ii. of this preamble, the subgrouping rules under § 301.6225-1(d)(3)(i), including the application of those rules to the credit grouping, take into account any limitations or restrictions under the Code. Therefore, to the degree the Code would require certain credits to be subgrouped within the credit grouping to reflect any limitations or restrictions, the rules under § 301.6225-1(d)(3)(i) allow for that result. In addition, when determining subgroupings the IRS may take into account the facts and circumstances of a partnership and its partners. It may be the case that the subgroupings with respect to a particular set of adjustments ultimately reflects the manner in which credits are grouped and ordered on Form 3800, but that may not always be the case. The regulations provide the necessary flexibility to achieve the result suggested by the comment without binding the IRS and partnerships to a particular manner in which credits must be subgrouped.
Additionally, because the Form 3800 and the underlying statutory rules it reflects may change over time, it is unwise to link the regulatory rules for subgrouping with the form's methodology for grouping credits. Relying on the general subgrouping rules under § 301.6225-1(d)(3)(i) gives the IRS and partnerships the flexibility to adapt to changes in the Code and any form changes without needing to amend the regulations.
Adjustments to creditable expenditures are placed in the creditable expenditure grouping described under § 301.6225-1(c)(4). Proposed § 301.6225-1(c)(4)(B), (d)(3)(iii), and (e)(3)(iii) provided specific rules relating to foreign creditable tax expenditures. Aside from the general rule regarding what constitutes a creditable expenditure, no additional rules relating to creditable expenditures were proposed.
The Treasury Department and the IRS requested comments on the appropriate treatment of creditable expenditures. One comment suggested any items that may be treated as a credit when taken into account by a partner and not otherwise limited (for instance, by their non-creditable status against the alternative minimum tax) be credited against the imputed underpayment amount. For other items which may be subject to limitations at the individual level, the comment suggested that the regulations provide rules similar to those rules proposed under proposed § 301.6225-3, regarding adjustments that do not result in an imputed underpayment, because any adjustment to a credit would not result in an imputed underpayment.
With the exception of the rules under § 301.6225-1 regarding foreign tax creditable expenditures, the Treasury Department and the IRS have determined not to issue regulations regarding the treatment of creditable expenditures at this time. However, the final regulations do clarify that the general subgrouping principles under § 301.6225-1(d)(3)(i) apply when subgrouping adjustments to creditable expenditures. The comments received with respect to creditable expenditures remain under consideration, and future guidance will be issued when appropriate. The final regulations also clarify that a net positive adjustment to creditable foreign tax expenditures is excluded from the calculation of the total netted partnership adjustment under § 301.6225-1(b)(2).
Comments were also requested regarding how credit recapture situations should work under the centralized partnership audit regime. One comment offered suggestions with respect to two credit recapture situations. The first situation involved a credit recapture that results from a partnership adjustment. The comment recommended in that situation that the regulations should incorporate any credit recapture into the calculation of any imputed underpayment to the extent that the originating credits were generated from partnership activities, but that this incorporation should be limited to partnerships with partners that actually would have benefited from the original credits. This recommendation was partially adopted.
A recapture of a credit generated by partnership activities constitutes a partnership adjustment as defined under § 301.6241-1(a)(6), and the credit recapture would constitute a positive adjustment under § 301.6225-1(d)(2)(iii)(A) and be placed in the credit grouping under § 301.6225-1(c)(3). The full amount of the credit recapture would be taken into account in the determination of the imputed underpayment, unless the partnership requests, subject to IRS approval, that the credit recapture should be taken into account differently during the partnership-level proceeding or pursuant to a modification request. See § 301.6225-1(d)(1), (e)(1), § 301.6225-2. This rule is necessary because, as discussed earlier in this section of this preamble, in general, the initial determination of an imputed underpayment does not account for the attributes of the partnership's partners, including whether and to what extent any partners actually benefited from the original credits. Accordingly, the final regulations include a credit recapture amount in the amount of the imputed underpayment, and this amount is not limited to the amount partners actually benefited from the recaptured credits unless the partnership can affirmatively demonstrate to the satisfaction of the IRS during exam either before issuance of the NOPPA or on modification the appropriate partner-level tax treatment.
The second situation described by the comment involves a partnership adjustment that results in a credit that is incorporated into the imputed underpayment calculation, presumably as a reduction to the imputed underpayment and that may later be subject to recapture. The comment recommended that the regulations require the partnership to notify partners that they received the benefit of such credits and that the partners may be obligated to recapture those credits at a later date. The comment suggested this notice could be provided as notes to the adjustment year Schedule K-1. This comment was not adopted. The final regulations do not require that the partnership notify the partners of any risk of future credit recapture, though the partnership is not prohibited from doing so if the partnership determines that such notification would be beneficial to the partners and the partnership. Except where required for the operation of the provisions of the centralized partnership audit regime, the Treasury Department and the IRS do not generally regulate communications between the partnership and the partners, and therefore the final regulations do not impose a requirement for notification by the partnership concerning possible credit recaptures.
Because a net negative adjustment to a credit, that is, an increase in an item of credit, would generally be subject to limitations under the Code, the final regulations under § 301.6225-1(e)(3)(ii) clarify that a net negative adjustment to a credit is treated as an adjustment that does not result in an imputed underpayment as described in § 301.6225-1(f)(1), unless the IRS determines otherwise. This rule ensures that the total netted partnership adjustment is not inappropriately reduced by an increase in credit that would subject to limitations in the hands of the partners of the partnership.
Proposed § 301.6225-2 provided the rules and procedures regarding modification of an imputed
The modification provisions under § 301.6225-2 are designed to determine an imputed underpayment amount that reflects, as closely as possible, the tax the partners would have paid had they correctly reported the adjusted items, while at the same time maintaining the efficiencies of a streamlined examination and collection process. See JCS-1-16 at 65-66. One comment suggested, that the modification provisions do not operate as intended because those provisions do not expressly permit a modification to reflect how the partners actually took an item into account, to account for reductions that would be permitted to offset an increase under generally applicable law, or to otherwise expressly challenge the IRS's method of calculating a proposed adjustment amount. Except as described later in this section, no changes to the regulations were made in response to this comment.
The Treasury Department and the IRS do not agree with the comment's characterization of how the modification provisions operate because the modifications available under § 301.6225-2 permit a partnership to achieve the results sought by the comment. For instance, both the amended return procedure and the alternative procedure to filing amended returns provide an opportunity for the partnership to request modification to reflect how an item was actually taken into account by its partners and to account for offsetting reductions permitted under generally applicable law. When a partner files an amended return including his share of the partnership adjustments, the amended return reflects a tax amount based on how the partner originally reported the partnership-related item prior to adjustment compared to how the partnership adjustment affects the partner's original return. This tax amount is the correct amount of tax for that partner after taking into account the partnership adjustment and includes any allowable reductions that may offset any additional income determined at the partnership level.
Regarding the comment's concern that a partnership does not have an opportunity to challenge the IRS's method of calculating a proposed adjustment amount, proposed § 301.6225-2(d)(6) provided a procedure for modifying the composition of an imputed underpayment. Under § 301.6225-2(d)(6), a partnership may request that the IRS include one or more partnership adjustments in a particular grouping or subgrouping. If certain negative partnership adjustments should be treated as if no limitations or restrictions in fact apply to the partners to whom the adjustments are allocated and the partnership can establish this result, if approved, on modification, such negative adjustments may be properly grouped or subgrouped with other adjustments and therefore allowed to net against those adjustments in accordance with § 301.6225-1(e) to reduce the amount of the imputed underpayment.
To the extent the comment was suggesting that the modification procedures do not provide the partnership an opportunity to challenge the substance of partnership adjustments, the comment is correct but no change is made in response to the comment. The statutory modification procedures are designed to allow the partnership to modify the amount of the imputed underpayment, not adjust the substance of the partnership adjustments that underlie the imputed underpayment. The substance of partnership adjustments are determined by the IRS on examination, and may be further revised in the IRS Appeals Office (IRS Appeals) or by a court in a proceeding for readjustment brought under section 6234. Although the comment did not explicitly state it as such, to the extent the comment was recommending a rule under § 301.6225-2 that allows a modification to reflect a circumstance where a partner actually took an item into account in a manner consistent with how that item was adjusted by the IRS during the partnership proceeding, this suggestion was adopted. As discussed later in section 3.B.ix. of this preamble, the final regulations under § 301.6225-2(d)(2)(ii) allow a partnership to request modification based on how adjusted items were taken into account by a partner prior to the item being adjusted by the IRS.
The same comment also suggested that the modification procedures permit a partnership to demonstrate how an adjustment would impact its partners and reduce an imputed underpayment without a need for the partners to file an amended return. The other proposed modification procedures provided multiple opportunities for partnerships to demonstrate the impact of adjustments on specific partners. The alternative procedure to filing amended returns is one way in which this type of modification may be achieved. Under § 301.6225-2(d)(2)(x), a partnership may submit on behalf of a partner, in accordance with forms, instructions, and other guidance prescribed by the IRS, all information and payment of any tax, penalties, additions to tax, additional amounts, and interest that would be required to be provided if the partner were filing an amended return. If the partnership avails itself of this procedure with respect to a partner, the partner does not need to also file an amended return in order for modification to be approved. The amended return procedures and the alternative procedure to filing amended returns are discussed further in sections 3.B.iii. and 3.B.iv. of this preamble.
Other modification procedures also provide the partnership with an opportunity to demonstrate the effect of adjustments on specific partners. For instance, tax-exempt modification provides an opportunity for the partnership to demonstrate that partnership adjustments are allocable to a partner that would not owe tax by reason of its status as a tax-exempt entity. Rate modification allows partnerships to demonstrate that partners would be subject to a lower rate than the highest rate of tax applied to calculate the imputed underpayment. Because the partnership has many avenues within modification to demonstrate the effect a partnership adjustment would have on specific partners, no new modification procedures were adopted in response to this comment.
Former proposed § 301.6225-2 permitted a partnership to request modification with respect to an indirect partner (as defined in § 301.6241-1(a)(4)). See, for example, former proposed § 301.6225-2(d)(2). One comment suggested that permitting partnerships to modify their imputed underpayment to account for direct and indirect partners is consistent with the objective of determining an imputed underpayment amount that is as close as possible to the tax due if the partnership and partners had correctly reported and paid. The comment further suggested
The final regulations are consistent with the comment's request and adopt the proposed rules allowing modification with respect to indirect partners, provided the indirect partner is a relevant partner as defined in § 301.6225-2(a). The August 2018 NPRM introduced, the term “relevant partner” to describe any person for whom modification is requested by the partnership that is a reviewed year partner, including a pass-through partner, or an indirect partner. The term relevant partner does not include, however, any person that is a wholly-owned entity disregarded as separate from its owner for Federal income tax purposes. No comments were received regarding the definition of relevant partner. The final regulations maintain the definition of relevant partner from proposed § 301.6225-2(a).
Accordingly, under the final regulations a partnership may request modification with respect to reviewed year partners (direct partners), including pass-through partners, and indirect partners. A partnership may not request modification, however, with respect to a direct or indirect partner that is a wholly-owned entity disregarded as separate from its owner for Federal income tax purposes.
One comment noted some concerns regarding the interaction between the centralized partnership audit regime and ERISA. The comment expressed concerns about situations in which the partnership representative must decide whether to request a modification that benefits non-ERISA partners over ERISA partners and how that affects the discharge of any fiduciary duties under ERISA. To address these concerns, the comment made three recommendations. First, the comment recommended that the regulations provide that the partnership representative may solicit a vote of the partners in the partnership in determining whether to request a modification. This recommendation was not adopted.
The decision whether to solicit a vote of the partners in the partnership as part of determining whether to request modification or a particular type of modification is fully within the authority of the partnership representative. Nothing in the final regulations prevents or requires the solicitation of a vote by the partnership representative. Additionally, if the partnership and its partners impose such a condition on the partnership representative through an agreement with the partnership representative, any failure to adhere to that agreement does not affect actions taken by the partnership representative. See § 301.6223-2(d).
Second, the comment recommended that the IRS agree to automatically grant a request for an extension of the 270-day period for requesting modification if a vote of the partners whether to request modification has been solicited. This comment was not adopted for the reasons discussed in section 3.B.ii. of this preamble.
Lastly, the comment recommended that the Treasury Department and the IRS share a suggestion with the Department of Labor that the Department of Labor clarify that a partnership representative will not be treated as a fiduciary with respect to any ERISA plan partner if the partnership representative requests or fails to request a modification based on the results of a vote of the partners. The rules regarding who is treated as a fiduciary with respect to any ERISA plan are beyond the scope of these regulations. However, as requested, the comment has been forwarded to the Department of Labor.
Another comment recommended that the IRS revise proposed § 301.6225-2(c)(2)(ii) to limit the required information submitted with any modification request to that specific information relevant to the type of modification requested. The comment noted that requiring extensive and detailed documentation for each modification request will limit the ability of some partnerships to take advantage of the modification procedure. The comment also urged the IRS to establish realistic minimal documentation requirements for any modification request and create additional specific relevant requirements for the various types of modification requests permitted under the proposed regulations. The comment further noted that the ability of the IRS to request supplemental information prior to approval (as provided in proposed § 301.6225-2(c)(4)) will ensure that the IRS obtains documentation they deem necessary for a particular set of facts and circumstances. This comment was adopted.
The final regulations under § 301.6225-2(c)(2)(ii) clarify that the partnership representative must furnish to the IRS information as required by forms, instructions, or other guidance prescribed by the IRS or as is otherwise requested by the IRS. The final regulations provide examples of such information, including the information that was described previously in proposed § 301.6225-2(c)(ii). The information listed in the proposed regulations pertained to items that are necessary to process the majority of modification requests. It is possible, however, that certain items may not be necessary in every case, and if such items are not necessary, or if different items are more appropriate, the IRS will describe the information required in forms, instructions, or other guidance. In this way, the regulations provide the flexibility for the IRS to request what is needed for efficient and effective processing of modification requests, while maintaining the flexibility to adapt information requests in the future.
The final regulations under § 301.6225-2(c)(2)(i) also clarify that, pursuant to section 6241(10), the partnership may be required to submit or file items required to be provided to the IRS under § 301.6225-2 in an electronic format. The form and manner for submission of anything required to be submitted under § 301.6225-2 will be described in forms, instructions, and other guidance prescribed by the IRS. Lastly, the final regulations under § 301.6225-2(c)(2)(i) clarify that the IRS will deny modification not only for the failure to substantiate a modification request but also for the failure to pay anything required under § 301.6225-2.
Proposed § 301.6225-2(c)(3) provided rules regarding the time for submitting modification information to the IRS. One comment made three recommendations regarding these rules. First, the comment suggested that the final regulations provide a specified time frame in which the IRS must respond to a request for modification. This suggestion was not adopted because the regulations under section 6235 provide a time frame within which the IRS will respond to a partnership's modification request.
Pursuant to § 301.6235-1(a)(2) and (b), in the case of any modification of an imputed underpayment, no partnership adjustment may be made later than the date that is 270 days after the date on which everything required to be submitted under § 301.6225-2 for modification is so submitted. The date on which everything required to be submitted is so submitted is the date the modification period ends or expires. § 301.6235-1(b)(2). Accordingly, in the case of a modification request, the IRS
To the extent the comment was requesting a deadline by which the IRS must respond to a request for modification prior to the time limit for making adjustments under section 6235, the comment was not adopted. It is not administrable for the IRS to impose a deadline that would apply in every case that is earlier than the statutory deadline imposed by section 6235. The facts and circumstances of each administrative proceeding, the partnership adjustments made during that proceeding, and the modifications that are requested may differ greatly. Similarly, the complexity of the modification process may range from simple and straight forward to highly complex. Finally, for those modification requests that are more complex or that require additional documentation, the partnership may extend the time period for submitting modifications under § 301.6225-2(c)(3) to allow for additional time and any additional documentation. For the reasons discussed in section 3.B.iii. of this preamble, the IRS plans to adopt procedures under which the IRS will respond to a request for modification in the FPA, including the planned time frame for responses. It is important to tax administration that these procedures are developed in separate guidance to allow for additional flexibility as the IRS gains more experience with the centralized partnership audit regime and the modification process. The 270-day period for mailing an FPA therefore acts as the outside time frame within which the IRS must respond to a request for modification. Because this time frame exists elsewhere in the regulations, the final regulations under § 301.6225-2 do not provide a separate time frame for providing a response to a modification request.
The comment also recommended that the final regulations provide that if there is a pending request for modification at the expiration of the 270-day period, the IRS will automatically agree to an extension of that period until at least 30 days after they provide their response. It is not clear from the face of the comment which 270-day period the comment was referring to—the 270-day period under § 301.6225-2(c)(3)(i) in which everything required for modification must be submitted or the 270-day period under § 301.6235-1(b) in which the IRS must mail an FPA to make a partnership adjustment. Both periods may be extended at the request of the partnership or the IRS. See §§ 301.6225-2(c)(3)(ii); 301.6235-1(d).
Regardless of which 270-day period the comment was referring to, the comment was not adopted. The final regulations do not provide that the IRS will automatically agree to an extension of either period under any circumstance. Whether an extension of the time to submit modification information, or an extension of the time to consider such information, is warranted is based on the facts and circumstances. In some cases an extension may be appropriate, for example, where there is a pending request and additional information would help clarify the issues. In other cases an extension may not be appropriate, for example, where it is clear that more information is likely to be of little to no value. Accordingly, while the regulations allow for an extension of both the period to submit modification information and the period in which the IRS has to consider such information, neither extension is automatic but rather must be based on the facts and circumstances of the particular case.
Lastly, the comment suggested the regulations provide a time frame for a partnership to respond to an IRS request for additional information during the IRS's review of a modification request. The comment recommended the time frame for responding be a minimum of 60 days and suggested that this issue is particularly significant if the request occurs near the expiration of the 270-day period. This comment was not adopted, but the IRS plans to adopt procedures that will allow a partnership time to provide additional information, when necessary, with respect to a particular request for modification. Because not all modification requests will require additional information from the partnership, this time frame is not provided for in the regulations. In addition, the response time may depend on the facts and circumstances. For example, as the comment notes, if a request for additional information occurs near the end of the 270-day period to submit information, there might not enough time to allow for a 60-day response period. While it is true the partnership and the IRS may agree to extend the 270-day period, this will not always be the case. Accordingly, a rule establishing a 60-day time frame for responding to requests for additional information in every case is not appropriate and would, in the example noted in the comment, serve as an automatic extension of the 270-day period to submit information that might not be requested by the partnership or consented to by the IRS. Nevertheless, if more information is required from the partnership, the IRS appreciates the need for partnerships to know when that information is due. The IRS plans to establish appropriate procedures through forms, instructions, or other guidance. As a result, the regulations were not revised in response to this comment.
Proposed § 301.6225-2(d)(2) provided rules regarding modification with respect to amended returns filed by partners. Proposed § 301.6225-2(d)(2)(i) provided that a partnership may request modification of an imputed underpayment based on an amended return filed by a relevant partner provided all of the partnership adjustments properly allocable to such relevant partner are taken into account. One comment recommended that the regulations clarify whether modification will be allowed if a partner files an amended return taking into account adjustments that make up one imputed underpayment, while not taking into account adjustments that make up a separate imputed underpayment which also affects that partner. This comment was not adopted because its recommendation contradicts the statute.
The requirement in proposed § 301.6225-2(d)(2)(i) that partners take into account all partnership adjustments derives from section 6225(c)(2)(A)(ii). Section 6225(c)(2)(A)(ii) states that when partners file amended returns in modification, that return must “take into account all adjustments” under section 6225(a) that are “properly allocable to such partners (and the effect of such adjustments on any tax attributes).” Section 6225(a) refers to “any adjustment by the Secretary to any partnership-related items with respect to any reviewed year of a partnership . . .” Section 6225(c)(2)(A)(ii)'s reference to “all adjustments” under section 6225(a) does not distinguish between partnership adjustments that result in an imputed underpayment and partnership adjustments that do not result in an imputed underpayment. By not distinguishing between the types of partnership adjustments, the language of section 6225(c)(2)(A)(ii) indicates that all partnership adjustments must be taken into account by partners filing modification amended returns, as opposed to only those adjustments that are associated with the imputed underpayment for which modification is requested. Consistent with section 6225(c)(2)(A)(ii), the final regulations under § 301.6225-2(d)(2)(i) require that even in the case of multiple imputed
The comment also asked whether there are any specific requirements or limitations that apply in the case of an amended return modification request made with respect to one imputed underpayment, but not with respect to a separate imputed underpayment. Nothing in the regulations imposes specific requirements or limitations on the partnership or its partners when utilizing amended return modification with respect to only one imputed underpayment. The partnership and its partners must comply with all the requirements under § 301.6225-2(d)(2) with respect to any request for amended return modification, including a request made for only one imputed underpayment in the case of multiple imputed underpayments.
Proposed § 301.6225-2(d)(2)(ii)(A) provided that an amended return modification request will not be approved unless the partner filing the amended return has paid all tax, penalties, additions to tax, additional amounts, and interest due as a result of taking into account the adjustments at the time such return is filed with the IRS. One comment suggested that the full payment requirement under § 301.6225-2(d)(2)(ii)(A) should be satisfied if the partner is in compliance with available IRS administrative processes to make full payment, for example, an installment payment agreement. Another comment recommended that the regulations permit partners to submit requests for installment agreements or offers in compromise within the 270-day modification period. These comments were not adopted.
Section 6225(c)(2)(A)(iii) provides that if one or more partners file amended returns during modification, such returns take into account the adjustments properly allocable to such partners, and “payment of any tax due is included with such returns,” the imputed underpayment is determined without regard to the adjustments so taken into account. Payment of any tax due is a statutory requirement under section 6225(c)(2)(A)(iii). Consistent with section 6225(c)(2)(A)(iii), proposed § 301.6225-2(d)(2)(ii)(A) required full payment of any tax, penalties, and interest due at the time the amended return is filed with the IRS. If payment is not included with the amended return, the IRS will not approve modification with respect to the amended return.
This rule is necessary to ensure that the IRS collects the entire amount of tax that results from the partner's share of partnership adjustments before approving the partnership's request that the imputed underpayment be calculated without regard to those adjustments. Allowing a partner to enter into an installment agreement undermines the ability of the IRS to collect tax on those adjustments both from the partnership, because the adjustments would no longer be reflected in the imputed underpayment, and from the partner that may ultimately default on the installment agreement. If a partner ultimately does not pay, the IRS may not be able to collect against that partner and likely would be outside the time period within which it must make partnership adjustments, preventing the IRS from collecting any additional imputed underpayment from the partnership. Similar concerns are presented by allowing a partner to enter into an offer in compromise. Moreover, a rule permitting partners to request installment agreements and offers in compromise as alternatives to full payment would increase the administrative burden on the IRS by requiring the IRS to evaluate whether such requests were appropriate, slowing down the modification process in general, and complicating the amended return process specifically. Accordingly, the final regulations retain the rule that full payment of any tax, penalties, and interest due as a result of taking into account the partner's allocable share of adjustments is required in order for modification to be approved with respect to a partner's amended return. In addition, the final regulations under § 301.6225-2(c)(2)(i) clarify that a failure by any person to make any payments required with respect to a modification request within the time restrictions described in § 301.6225-2(c) will result in a denial of a modification request.
Proposed § 301.6225-2(c)(3) provided that all information required under § 301.6225-2 with respect to a request for modification must be submitted on or before 270 days after the date the NOPPA is mailed, unless that period is extended with the permission of the IRS. Several comments recommended partners only be required to file amended returns or make payments on those returns after the issuance of the FPA to allow the court to review the partnership adjustments before modification is requested. One comment recommended that, to provide an adequate amount of time, partners should be allowed at least 270 days from the time of the receipt of an FPA to file amended returns. The comment further recommended that the 270-day period be tolled at any time during which a court proceeding pursuant to section 6234 is ongoing. Another comment recommended that the final regulations commit the IRS to freely grant extensions of the 270-day period and other relevant periods and allow taxpayers to seek modification of the underpayment by filing an amended return, or use the alternative procedure to filing amended returns, within 60 days after there has been a final determination in the partnership case. These comments were not adopted.
First, allowing modification requests, including amended returns, after the FPA is mailed or after there is a court decision with respect to the partnership adjustments is contrary to the statutory scheme under section 6225(c). The statutory scheme under section 6225, section 6231, and section 6235 envision a process where the IRS first mails a NOPPA to the partnership that includes the proposed partnership adjustments and proposed imputed underpayment, followed by a modification period, which is followed by the FPA. The mailing of the NOPPA starts the 270 day period within which anything required to be filed or submitted in the modification process must be filed or submitted to the IRS. After the close of this 270-day period, which may be extended with the consent of the IRS, if modification is requested, the IRS has an additional 270 days to modify the imputed underpayment as necessary to reflect approved modifications and mail the FPA, which will describe the final partnership adjustments and imputed underpayment. After the FPA is issued, there is no basis for the IRS to consider further modifications. The examination is complete and the partnership may then pay the imputed underpayment or elect the push out. The partnership may also challenge the partnership adjustments in court.
Section 6225(c)(2), which provides the procedures for filing amended returns and the alternative procedure to filing amended returns was enacted at the same time as section 6225(c)(7). The amended return modification and the alternative procedure to filing amended returns are just two of many statutory modifications. Had Congress intended for there to be an exception to the 270-day period under section 6225(c)(7) for amended return modification, as suggested by the comments, Congress could have included such an exception
Second, extending the 270-day period beyond the date of the issuance of the FPA could result in several tax administration issues for the IRS. Section 6225(c)(8) provides that any modification of the imputed underpayment amount “shall be made only upon approval of such modification by the Secretary.” A request for amended return modification must therefore be approved by the IRS. If the partnership fails to comply with the requirements under the rules under § 301.6225-2, the IRS may decline to approve the request for modification. In order to adopt the comment's suggestion that amended returns and associated payments not be provided until after the FPA is issued, the IRS would need to wait to approve the modification request with respect to that amended return until after the partnership and its partners submitted what was required to be provided under the modification rules. This would prevent the IRS from including its approval or disapproval of the modification request in the FPA, delaying a determination with respect to the modification until some later date. The FPA—the notice of
A partnership adjustment is defined under section 6241(2) as an adjustment to a partnership-related item, and a partnership-related item is defined as including an imputed underpayment. An adjustment to an imputed underpayment is, therefore, a partnership adjustment as defined in section 6241(2). The approval of a modification affects the amount of an adjustment that is taken into account in the imputed underpayment under the rules described in § 301.6225-2(b). Therefore, the IRS must approve or disapprove of a modification before the expiration of the time period for making adjustments under section 6235 or the IRS will have lost its opportunity to do so. Relatedly, and in addition to the concern about the statute of limitations, if the IRS waits until after the issuance of the FPA to make further adjustments to the imputed underpayment, modification could extend for an indefinite period of time, which would lead to uncertainty and administrative challenges for the partnership, the partners, and the IRS. This is particularly true with respect any adjustments after the mailing of the FPA because the mailing of the FPA imbues the partnership with certain rights, such as the right to petition a court for a readjustment of the partnership adjustments in the FPA and to elect the push out under section 6226 with respect to the imputed underpayment. The comment does not explain how a rule that would allow the IRS to further alter the imputed underpayment after the partnership has elected push out or petitioned a court for a readjustment would work. Such a rule would raise numerous tax administration concerns and potentially cause confusion for the partnership and its partners as to what the IRS finally determined and when.
In addition, the IRS is limited as to when it may make a partnership adjustment. According to section 6235(a)(2), “no adjustment under this subchapter for any partnership taxable year may be made after . . . in the case of any modification of an imputed underpayment under section 6225(c), the date that is 270 days [including extensions] . . . after the date on which everything required to be submitted to the Secretary pursuant to such section is so submitted.” In order to adopt the comment allowing an extension of the 270-day modification submission period beyond the issuance of the FPA, the IRS would be required to issue two FPAs. The first FPA would address the partnership adjustments and the imputed underpayment prior to consideration of modifications. The second FPA would be issued at some later date before the expiration of the period for making adjustments under section 6235. Nothing in section 6235(a)(2) prevents the IRS from mailing a second FPA; however, under section 6231(c), if the partnership petitions the original FPA under section 6234, the Secretary may not mail another notice with respect to the same taxable year in the absence of fraud, malfeasance, or misrepresentation of a material fact. In other words, in the situation contemplated by the comment, in which a partnership petitioned the FPA, in general, the IRS could not issue a second FPA to approve or deny modification issues because the IRS would be prevented from doing so under section 6231(c).
Adopting the comment's suggestion would prevent the IRS from exercising the discretion to approve modification for which Congress provided it authority in section 6225(c)(8). The IRS needs this discretion to ensure that requests for modification are appropriate for the partnership and that the administrative proceeding process is uniform between partnerships. Partners also have other options, such as subsequent amended returns, to address some concerns regarding making payments during the modification process. Accordingly, the regulations have not adopted this comments suggestion.
Proposed § 301.6225-2(d)(2)(vii)(B) provided that if a relevant partner files an amended return for purposes of modification, such partner may not file a subsequent amended return without the permission of the IRS. One comment recommended that the regulations clarify that the restriction in proposed § 301.6225-2(d)(2)(vii)(B) relates to only those items related to a partnership adjustment. Similarly, another comment recommended that the IRS ease the restriction on the ability of a taxpayer using the amended return modification procedure to file subsequent amended returns when the subsequent amended return does not affect the items included in the partnership's audit adjustments. The comment stated that requiring a taxpayer to request permission from the IRS before filing an amended return is an administrative burden in terms of time and resources for both the taxpayer and the IRS.
Another comment recommended that the regulations not prohibit a partner who has amended her return as part of the modification process from amending her return again without the permission of the Service. This comment suggested revising the forms for filing amended returns to (1) include a check-box asking whether the taxpayer filed a prior amended return for that same tax year that was the basis for a modification under section 6225(c) and (2) require any taxpayer who answers in the affirmative to attach to the subsequent amended return an explanatory statement and certain related documents, such as the prior amended return. Another comment recommended the regulations clarify that if a partner filed an amended return and paid tax on its share of adjustments, and modification was approved with respect to the amended return, the partner may later claim a refund of the tax paid if the partnership successfully appeals or contests the adjustment.
The final regulations clarify that the restriction under § 301.6225-2(d)(2)(vii)(B) only applies to subsequent amended returns that change the treatment of partnership adjustments previously taken into account on a prior amended return that was filed during modification or are filed with respect to an imputed underpayment that was taken into account on a prior modification amended return. The final regulations also removed the requirement that limited further amended returns filed with respect to an imputed underpayment. The final regulations
One comment recommended clarification about whether and how the partner can file a request for refund if the IRS denies a modification based on a partner's filing of an amended return and payment of tax (or the use of the alternative procedure to filing amended returns) or if the partnership files a petition in court of the FPA which results in an adjustment in the partnership's favor. The same comment requested clarification on how a taxpayer who has filed an amended return or executed a closing agreement under section 6225 would receive the benefit of the reduced tax liability of the revised adjustment amount. Pursuant to section 7121, a closing agreement approved by the IRS is final and conclusive. Accordingly, as a general rule, a partner may not request a refund of amounts agreed to in, and paid with, a closing agreement, though the determination of whether a partner could file further amended returns or claims for refund with respect to a year in which a closing agreement was executed would depend on the facts and circumstances and the agreed upon terms of the closing agreement. As discussed earlier in this Summary of Comments and Explanation of Revisions, the final regulations under § 301.6225-2(d)(2)(vii) now clarify that partners may file additional amended returns with respect to partnership adjustments or imputed underpayments, including in the case of denied modification or court readjustment. To file a subsequent amended return, the partners must do so in accordance with forms, instructions, and other guidance prescribed by the IRS. A partner that modifies using the alternative procedure to filing amended returns as described in section 6225(c)(2)(B) that seeks a refund for an amount paid as part of those procedures must follow the rules of § 301.6225-2(d)(2)(vii)(B) and (C). There is no separate process for partners that modify using the alternative procedure to amended returns.
Former proposed § 301.6225-2(d)(2)(vii) provided that a pass-through partner may elect, solely for the purposes of modification, to take into account its share of the partnership adjustments and make a payment on behalf of its partners. If modification was approved with respect to the pass-through partner, the partnership was not permitted to request modification based on amended returns filed by upper-tier direct and indirect partners of the pass-through partner. Former proposed § 301.6225-2(d)(2)(vii). One comment suggested that the regulations should permit a modification of a pass-through partner's payment amount based on amended returns filed by its upper-tier owners.
This suggestion was adopted in the August 2018 NPRM revisions to § 301.6225-2(d)(2). Proposed § 301.6225-2(d)(2)(vi)(B), as revised in the August 2018 NPRM, provided that in accordance with forms, instructions, and other guidance, a pass-through partner making a payment under § 301.6225-2(d)(2)(vi)(A) may take into account modifications with respect to its direct and indirect partners to the extent that such modifications are requested by the partnership and approved by the IRS. Therefore, to the extent an upper-tier partner of the pass-through partner has filed an amended return, the partnership has requested modification with respect to that amended return, and the modification is provided, the pass-through partner may take into account that amended return in accordance with forms, instructions, or other guidance when making a payment in modification. The final regulations under § 301.6225-2(d)(2)(vi)(B) retain this rule.
Another comment recommended that the regulations provide more guidance regarding the form required for an amended return filed by a pass-through partner and the information that form will need to contain. This comment was not adopted. The form required for any amended return, including an amended return filed by a pass-through partner, and the information required on that form will be set forth in forms, instructions, and other guidance prescribed by the IRS. Setting forth this information in forms, instructions, and other guidance gives the IRS the flexibility to adapt the form and its contents without having to amend the regulations. This flexibility preserves government resources and expedites the time in which taxpayers will know of changes to the statement requirements. At the same time, the IRS recognizes the need of taxpayers to know of the information required in order to comply with the regulations. The IRS plans to develop and release drafts of forms and instructions for public inspection as they are completed.
Another comment recommended that the regulations address the situation in which a partner files an amended return but incorrectly calculates the interest amount due and subsequently receives an additional assessment from the IRS. The comment expressed concern that the incorrect calculation of interest and resulting shortfall in payment may result in an inadvertent denial of the modification request. Another comment recommended a rule that a de minimis shortfall of interest or penalties resulting from a good faith effort by a taxpayer to calculate the correct amount shall not result in a denial of a modification request.
The comment recommending a good faith de minimis rule to address situations in which a partner has a shortfall of interest or penalties was not adopted. First, allowing a good faith de minimis rule for interest or penalties is inconsistent with the centralized partnership audit regime's approach of allowing modification of the imputed underpayment if partners fully account for adjustments by taking them into account, paying any resulting amounts due as if the partnership and partners had reported correctly the first time. Because amended return modification is occurring years after any tax would have been due as a result of the partnership adjustment, partners with an underpayment must pay interest to compensate the government for the time value of money on the underpayments. Similarly, partners that owe a penalty must pay that penalty to fully take into account the adjustments and allow the partnership the benefit of modification for those adjustments. A de minimis rule that affirmatively blessed some
Second, administering a rule that allowed partners to underpay what is owed under § 301.6225-2(d)(2)(ii)(A) as long as they made a good faith effort and had only a de minimis short fall would result in untenable administrative complexities for the IRS. The IRS must review all modification requests within 270 days after the modification request has been submitted. The IRS will need to quickly ensure that all relevant partners have provided all information and payments necessary to approve modification. A rule that includes a good faith element would require the IRS to engage in a partner-specific inquiry with respect to any shortfall that might be within the de minimis range to determine whether partner made a good faith effort to comply. A rule that looks to the intent of the partner in determining the amount of interest and penalties is factually intense and would require an inquiry into the state of mind of the partner or that partner's tax advisor. In a fraction of the time it would take to make such an inquiry, the IRS could instead request and receive full payment from the partner. Therefore, it is not administrable to inject this additional, burdensome good faith de minimis shortfall rule in the final regulations, when the current requirement of full pay is both more administrable and less burdensome on the IRS and partners.
If the partnership representative becomes aware of the shortfall before expiration of the 270-day period, the partnership representative may request an extension of the 270-day period in order to allow for full payment to be made before the modification period ends. In this way, the partnership representative can take steps to ensure that all requirements under § 301.6225-2(d)(2) were satisfied.
Proposed § 301.6225-2(d)(2)(ii)(C) provided that in the case of a reallocation adjustment, all partners affected by such adjustment must file amended returns in order for the IRS to approve modification with respect to those amended returns. One comment suggested that the partners affected by the reallocation adjustment should be required to file amended returns only if there is evidence of a net underpayment of tax by the partners as a whole. The comment suggested as an alternative that the partners be allowed to attach an explanation or information statement to their adjustment year return rather than filing an amended return for the reviewed year. These suggestions were not adopted.
Section 6225(c)(2)(C) provides that in the case of a reallocation adjustment, amended return modification applies only if all the requirements of either amended return modification or the alternative procedure to filing amended returns “are satisfied with respect to all partners affected by such adjustment.” The statute does not provide any exception to this rule, including an exception for situations in which there is evidence of a net underpayment of tax. Accordingly, the final regulations retain the rule that all partners affected by a reallocation adjustment must file amended returns or utilize the alternative to filing amended returns in order for modification to be approved. This rule ensures that all relevant partners affected by the reallocation adjustment take into account their appropriate shares of that adjustment and thereby ensures such partners receive the appropriate tax benefits for the taxable year subject to the adjustment.
Furthermore, payment and collection of an underpayment is not the only issue required to be resolved by the filing of modification amended returns. In some cases, the purpose of the amended returns is to take into account the tax attributes that may have effects on other modification years. Certainly, in some cases, the tax effect of adjustments taken into account in one year may be offset by tax effect of adjustments in another year or by another partner, but as described in section 3.A. of this preamble, the unmodified imputed underpayment is designed by statute to take into account only the reviewed year and it does not take into account the specific tax attributes of any partner or the effects of the partnership adjustments in modification years or intervening years. An unmodified imputed underpayment will often result in an amount that is higher than what the partners collectively would have paid had they taken the adjustments into account properly in the reviewed year. The unmodified imputed underpayment protects the IRS's interests in collecting at least the amount of tax that should have been paid by the partners without having to separately examine and track all the partners. In other words, the unmodified imputed underpayment represents a simple way to allow the partnership to pay, and the IRS to collect, as amount related to the partnership adjustments without having to delve into the specific tax attributes of each partner.
Modification, however, provides an opportunity for the partners and the partnership to demonstrate that specific tax attributes of partners should have an effect on the imputed underpayment. With respect to reallocation adjustments, if partners seek to receive the benefit of modification, each partners subject to a reallocation adjustment must follow the statutory requirement to file amended returns for all adjustments in a reallocation adjustment. It may be the case that one partner pays on modification and another partner is entitled to a refund. However, such a result is unknown until the partners demonstrate that fact through modification. More importantly, section 6225(c)(2)(C) expressly requires that all partners have taken into account all partnership adjustments and related tax attributes for the modification years and future years. This statutory mandate makes clear that the purpose of this modification is not to ensure that there is a net tax payment with respect to the partnership adjustments, but instead to ensure that the proper partners have taken the adjustments into account correctly, including in all modification years. The requirement that all partners affected by a reallocation file amended returns is a necessary condition for modification to be approved.
Similarly, the comment's suggestion that partners attach a statement to their adjustment year returns attesting to the fact that they had a net underpayment as a result of the adjustments is not workable. In an administrative proceeding, the adjustment year is the year in which the FPA is mailed under section 6231 or, if the partnership challenges the adjustments in court, the year such decision becomes final. Section 6225(d)(2). If a partner was one of the partners subject to a reallocation adjustment and failed to file an amended return, none of the other amended returns from other partners subject to the reallocation adjustments could be approved as a modification. As a result, the imputed underpayment would be determined in the FPA without reduction with respect to those adjustments. Attaching a statement on the next filed return of the partner that failed to file an amended return would have no effect on the imputed underpayment already finally determined.
Recognizing the costs and burdens this rule may create for partnerships, partners, and the IRS in cases where it
One comment recommended that the regulations clarify whether a tax-exempt partner eligible for tax-exempt modification under § 301.6225-2(d)(3) and allocated a share of a reallocation adjustment must file an amended return to satisfy the requirements under § 301.6225-2(d)(2) in order for the IRS to approve a modification request with respect to such partner. The comment recommended adding to the regulations either an explicit statement or an example indicating that such a filing is not necessary provided the IRS is satisfied that the relevant partner qualifies as a tax-exempt entity. This comment was partially adopted by adding a sentence to § 301.6225-2(d)(2)(ii)(C) indicating the IRS may determine the amended return requirement in the context of reallocation adjustment is satisfied to the extent an affected relevant partner meets the requirements of § 301.6225-2(d)(3) regarding tax-exempt partners. The satisfaction of the requirements of § 301.6225-2(d)(2) (amended return modification and the alternative procedure) is only satisfied to the extent of the tax-exempt portion as defined in § 301.6225-2(d)(3)(iii). Therefore, if certain partnership adjustments allocable to tax-exempt partners are subject to tax, and the partner wishes to take advantage of amended return modification, the tax-exempt partner may have to file an amended return to pay tax on the portion of adjustments allocable to that partner which are subject to tax. The final regulations do not add an example to this effect because the plain language of § 301.6225-2(d)(2)(ii)(C) addresses the point raised by the comment.
One comment recommended that the regulations provide an additional modification method in the case of reallocation adjustments that would allow a partner to whom a net negative adjustment is allocated to file an amended return (or use the alternative procedure to filing amended returns) to claim a refund of tax arising from such adjustment, on the condition that the partner to whom the net positive adjustment is allocated, or the partnership, has paid the tax attributable to the net positive adjustment. Similarly, another comment recommended that the regulations permit a modification of an imputed underpayment where only the partner experiencing additional income (or less deduction, loss, or credit) as a result of a reallocation adjustment files an amended return. These comments were not adopted.
As discussed earlier in this section of this preamble, section 6225(c)(2)(C) provides that in the case of a reallocation adjustment, amended return modification applies only if all the requirements of either amended return modification or the alternative procedure to filing amended returns “are satisfied with respect to all partners affected by such adjustment.” This rule demonstrates that reallocation adjustments made by the IRS under the centralized partnership audit regime are included in the calculation of the imputed underpayment unless all partners affected by such adjustments take them into account. Section 6225(c)(2)(C) does not contain an exception to the rule that all partners take the adjustments into account. Consistent with section 6225(c)(2)(C)'s requirement that all affected partners take the reallocation adjustments into account, the IRS has exercised its discretionary authority under section 6225(c)(6) to permit modification in the case of a reallocation adjustment where a relevant partner affected by such adjustment has met the requirements of another modification method and that modification has been approved by the IRS. This regulatory exception fits squarely within the statutory framework of ensuring that all partners affected by a partnership adjustment take into account their share of that adjustment and recognize the tax effects of such adjustments. Adopting the approach suggested by the comments, one where either only the loss partner or only the income partner take the adjustments into account, would undercut the statutory framework and directly contradict the plain language of the statute. A rule that does not account for all aspects of a reallocation adjustment would run contrary to the collection mechanism of the centralized partnership audit regime with respect to reallocation adjustments. The statutory framework requires either that the partnership pay an imputed underpayment representing the additional tax effects of the reallocation adjustment in the adjustment year and take the negative adjustment aspects into account in that same year or all affected partners from the reviewed year must fully account for their share of the reallocation adjustment.
One comment recommended that the regulations clarify whether a taxpayer filing an amended return or requesting a closing agreement under section 6225 for purposes of modification is required to take into account and pay any additional taxes due under chapters 2 and 2A of the Code. This comment was adopted. The final regulations clarify that a partner filing an amended return or using the alternative procedure to filing amended returns only is required to pay tax due under chapter 1 of the Code with respect to the amended return and the alternative procedure to filing amended returns. The exception to the limitation of tax to chapter 1 tax is for a pass-through partner filing an amended return under § 301.6225-2(d)(2)(vi) because the pass-through partner, but for § 301.6225-2(d)(2)(vi), might otherwise not owe tax under chapter 1. Nothing in the final regulations limits the IRS's authority under section 6241(9). The type of tax paid in a closing agreement, however, will depend on the terms of the closing agreement. The final regulations clarify the type of tax paid in these situations in §§ 301.6225-2(d)(2)(ii)(A) and (d)(8).
Another comment asked about the effect on the IRS's approval of modification in the case that a partnership or partner fails to pay taxes under chapters 2 and 2A in modification. Because the final regulations clarify that a partner is only required to pay chapter 1 tax in amended return modification or in the alternative procedure to filing amended returns, the failure to pay taxes under chapters 2 and 2A is irrelevant to the approval or denial of modification. The questions asked by the comment are therefore moot, and no changes were made in response to the comment.
Section 6225(c)(2)(D) provides that section 6501 and 6511 shall not apply
Prior to the enactment of the TTCA, section 6225(c)(2) stated that section 6511 did not apply with respect to amended return modification, but it was silent on whether section 6501 limitations on assessment applied. If a partner's period under section 6501 was closed at the time of modification, the partner might not be able to participate in amended return modification. One comment recommended that the IRS resolve this issue by allowing partners to extend the relevant section 6501 periods. This comment was received in response to the June 2017 NPRM, prior to the enactment of the TTCA. The TTCA explicitly provided that section 6501 does not apply with respect to returns filed in modification, so the need for such extensions no longer exists.
The TTCA created an additional statutory modification under section 6225(c)(2)(B), titled the alternative procedure to filing amended returns (the alternative procedure), which has been referred to as the “pull in” or “push in.” Several comments recommended that the Treasury Department and the IRS adopt these procedures in response to the June 2017 NPRM, prior to the enactment of the TTCA. The August 2018 NPRM proposed rules related to the alternative procedure, adopting those comments in response to the enactment of the TTCA, which included the alternative procedure.
One comment suggested that the final regulations should include a modification procedure whereby an imputed underpayment is reduced when the partnership provides sufficient evidence that the adjustments underlying the imputed underpayment would have resulted in a smaller imputed underpayment if they had been taken into account according to how the partners and the partnership actually treated the partnership-related item. The comment described this concept as similar to the “pull-in” procedure included in the TTCA. The comment has not been adopted in its entirety because no one modification provision specifically allows the partnership to demonstrate that the imputed underpayment would be reduced if the partnership and partners had taken the adjustment into account. The purpose of the modification process is not only to reduce the amount of the imputed underpayment, but for those partners that take the adjustments into account as part of the modification requested, they are required to pay any additional tax, interest and penalties due and agree to adjust their tax attributes in exchange for the IRS approving the modification. As such, the regulations contain rules related to the alternative procedure as defined in section 6225(c)(2)(B) and § 301.6225-2(d)(2)(x) and under that procedure the partnership may satisfy the requirements of amended return modification by submitting on behalf of relevant partners, in accordance with forms, instructions, and other guidance prescribed by the IRS, all information and payment of any tax, penalties, additions to tax, additional amounts, and interest that would be required to be provided if the relevant partner were filing a modification amended return. The partnership must also demonstrate that relevant partners have agreed to take into account tax attributes consistent with taking into account the partnership adjustments allocable to that partner. The regulations provide another modification under § 301.6225-2(d)(10), where the IRS will consider any other request for modification and determine whether it is appropriate in the circumstances.
Another comment recommended that the modifying partner using the “push in” procedure deal directly with the IRS exam team during the partnership audit because many partners will not want to provide the details of their financial affairs to the partnership representative or the partnership. The regulations do not provide specific details as to what information will need to be provided to the IRS under the alternative procedure, but the IRS intends to develop such processes. The partnership, not the partners, however, requests amended return modification, and the partnership may satisfy those requirements through the alternative procedure. Because the partnership is responsible for making the modification request, the comment was not adopted at this time. The processes the IRS develops may ultimately provide that the partners submit some information directly to the IRS, but the partners will likely be required to provide some information to the partnership representative to request modification. Nothing in the regulations prevents the partnership from working with third parties or selecting a partnership representative that will not share the details of the partners' financial affairs directly with the partnership. The partnership, the partnership representative, and the partners will ultimately be required to meet filing requirements established in forms, instructions, and other guidance.
The same comment also recommended that partners who establish that they are owed a refund receive such refund through the alternative procedure rather than by filing an amended return or relying on § 301.6225-3, which allows an adjustment that does not result in an imputed underpayment to be taken into account in the adjustment year. The comment recommended that refunds in the alternative procedure context only be allowed after all relevant partners have paid their tax and after the partnership has paid any remaining imputed underpayment. This comment was not adopted. Requests for the alternative procedure under § 301.6225-2(d)(2)(x) are not claims for refunds for the reasons described later in this section of this preamble. To the extent the comment was suggesting that refunds could be claimed after the issuance of the FPA, which is the point after which the partnership would have been able to pay the imputed underpayment, the partners may only do so pursuant to § 301.6225-2(d)(2)(vii).
One comment recommended that if partnerships and their partners will be permitted some simplified method of modification (without the need to file amended returns), the regulations should fully explain that concept. This comment was made prior to the passage of the TTCA and the issuance of the August 2018 NPRM. The preamble to the August 2018 NPRM explains the alternative procedure as enacted by the TTCA. This section of the preamble to these regulations provides additional explanation of the alternative procedure. In addition to the regulations, the alternative procedure will be further described in forms, instructions and other guidance as the IRS processes surrounding the alternative procedure are developed further.
Another comment requested clarification on the interaction of the alternative procedure with other provisions described in the proposed regulations. For instance, the comment stated the language under proposed § 301.6225-2(d)(2)(x) was unclear whether a taxpayer reporting a negative reallocation or recharacterization adjustment is eligible to use the alternative procedure. No changes were made to the regulations in response to this comment.
There is nothing in the regulations that precludes the partnership from requesting modification with respect to a relevant partner under the alternative procedure where the relevant partner would otherwise be entitled to a refund had the partner instead filed amended returns. However, the regulations state that a request for modification under the alternative procedure is not a claim for refund with respect to any person. As a result, a relevant partner may not make a claim for refund via the alternative procedure. This rule is based on the statutory requirement under section 6225(c)(2)(B)(i) that requires a partner to pay any amount due under section 6225(c)(2)(A)(iii) if the partnership requests the alternative procedure. If a partner, after taking into account all partnership adjustments allocable to the partner, would not owe any amount as required in amended return modification under section 6225(c)(2)(A)(iii), the partner is not required to make a payment as part of the alternative procedure. The fact that a partner may utilize the alternative procedure without making a payment does not, however, allow the partner access to a refund through the alternative procedure.
The alternative procedure as described in section 6225(c)(2)(B) does not provide that the partners may obtain refunds. The alternative procedure provides a streamlined process for partners and the partnership generally to those partners paying additional amounts of tax, in lieu of filing amended returns. This streamlined nature of the alternative procedure process also benefits the IRS. By limiting the alternative procedure to just those relevant partners that are making payments required under section 6225(c)(2)(B)(i) (or that owe no additional tax), the IRS should be able to more quickly and efficiently process requests under the alternative procedure. Partners that have been allocated negative adjustments, including reallocation or recharacterization adjustments, may take those adjustments into account using the alternative procedure but by doing so will forego any claim for refund of any amounts related to taking those adjustments into account. In other words, if, for instance, the partner had offsetting income against which the negative adjustment might be netted, the partner could utilize the alternative procedure to make whatever payment resulted from the remaining offsetting income. If the partner would be entitled to a refund as a result of its allocated adjustments, the partner must use the amended return procedures to obtain that refund. Using the amended return procedures allows the IRS to track the refund appropriately and ensure it is processed efficiently.
The same comment also stated that it was unclear if the alternative procedure would trigger the restrictions on further amended returns described in § 301.6225-2(d)(2)(vii)(B). The final regulations under § 301.6225-2(d)(2)(vii)(B) clarify that the restrictions on subsequent amended returns or claims for refund apply equally to the amended return process and the alternative procedure. A subsequent amended return or claim for refund is most likely to occur outside the centralized partnership audit regime process. Because the alternative procedure does not exist outside the centralized partnership audit regime, there is no method by which a partnership could use the alternative procedure to obtain a refund of amounts paid during modification. The partner may file a subsequent amended return, however, if the circumstances described in § 301.6225-2(d)(2)(vii)(C) are met.
Under § 301.6225-2(d)(4), a partnership may request modification based on a lower rate of tax for the reviewed year with respect to adjustments that are allocable to a relevant partner that is a C corporation and adjustments with respect to capital gains or qualified dividends that are allocable to a relevant partner who is an individual. One comment suggested that the rate modification procedures accommodate situations in which the sole adjustment is a recharacterization of capital gain as ordinary income. In that situation, the adjustment increasing ordinary income is a net positive adjustment that results in an imputed underpayment, and the adjustment decreasing capital gain is a net negative adjustment that does not result in an imputed underpayment. See § 301.6225-1.
The comment recommended revising the rate modification procedures to provide that an individual partner may file an amended return, or use the alternative procedure, to establish that the partner previously paid tax on the recharacterized gain at the lower rate with the result that the portion of the net positive adjustment allocable to such partner would be subject to tax only at the difference between the highest tax rate and such lower rate. In addition, the comment recommended that the rate modification procedures allow a corporate partner to demonstrate that it paid tax on capital gain with the result that the portion of the net positive adjustment allocable to the corporate partner would be subject to tax at a zero percent rate, as corporate tax rates on capital gains equal rates on ordinary income.
Rate modification is designed to address situations in which there is an adjustment to a particular type of income that is allocable to an individual or an adjustment that is allocated to a corporate taxpayer. A partnership may demonstrate that a lower rate of tax applies with respect to that income type or based on the type of taxpayer. Section 6225(c)(4)(A) (flush language) limits the rates that may apply by providing that “[i]n no event shall the lower rate determined . . . be less than the highest rate in effect with respect to the income and taxpayer . . . .” Proposed § 301.6225-2(d)(4) provided a rule consistent with this statutory mandate. For instance, with respect to an adjustment attributable to a C corporation, the highest rate in effect for the reviewed year with respect to all C corporations would apply to that adjustment, regardless of the rate that would apply to the C corporation based on the amount of that C corporation's taxable income. The comment suggested a rule where the rate applied to the recharacterized income allocable to the C corporation would be 0 percent because there is no reduced capital
In contrast, the amended return (or the alternative procedure to filing amended returns) allows a partner to take into account the partner's share of adjusted items and apply the specific tax rate that applies to the partner's amount of taxable income. When taking into account her share of the adjustments, which includes both the adjustment increasing ordinary income and the adjustment decreasing capital gain, the partner is able to offset additional partnership income with any permissible deductions. For example, a partner may utilize the increase in capital loss to offset the capital gain that was originally reported and subsequently recharacterized, thereby reducing the partner's tax on capital gains to potentially zero and paying tax on her share of ordinary income at the partner's specific effective tax rate.
To the extent the comment was suggesting that the Treasury Department and IRS exercise its discretionary authority under section 6225(c)(6), the Treasury Department and IRS decline to do so because adopting such a rule would present administrability concerns for the IRS. For example, the corporate partner described by the comment may or may not have paid tax on capital gain on the corporate partner's original return; there may have been offsetting capital losses. The most efficient way from a tax administration perspective for the partnership and the corporate partner to demonstrate that the corporate partner previously paid tax on the capital gain is the amended return process (or the alternative procedure). By filing an amended return, the corporate partner can take into account the adjusted amount of both ordinary income and capital loss, and assuming those adjustments could offset on the corporate return, the corporate partner would owe no additional tax and the adjustments taken into account by the corporate partner would be disregarded from the total netted partnership adjustment. See § 301.6225-2(b)(2). An amended return, or an alternative procedure submission, allows the IRS to understand better what the corporation took into account on its original return.
Proposed § 301.6225-2(b)(3) provided rules for calculating an imputed underpayment in the case of a rate modification. The first step in determining an imputed underpayment in the case of a rate modification is to determine each relevant partner's distributive share of the partnership adjustments based on how each adjustment subject to rate modification would be properly allocated under section 702 to such relevant partner in the reviewed year. Proposed § 301.6225-2(b)(3)(iii)(A). In the case of an adjusted item that was specially allocated to a partner or group of partners, however, each relevant partner's distributive share is determined based on the amount of net gain or loss to the partner that would have resulted if the partnership had sold all of its assets at their fair market value as of the close of the reviewed year. Proposed § 301.6225-2(b)(3)(iv).
One comment suggested that the requirement to determine the partner's distributive share based on a hypothetical sale of all partnership assets at fair market value as of the close of the reviewed year is administratively burdensome and difficult for partnerships to apply many years after the calculation date. The comment also suggested that the lack of a definition for fair market value in the statute and in the regulations will generate significant disputes between the IRS and partnerships. In order to simplify the administration of this rule, the comment recommended that the regulations should define fair market value solely for purposes of this rule as a more easily determined amount, such as using section 704(b) basis. This comment was not adopted, although the final regulations do provide an alternative method for determining a partner's distributive share in the case of special allocations as described later in this section of this preamble.
Section 6225(c)(4)(B)(ii) provides if an imputed underpayment is attributable to the adjustment of more than one item, and any partner's distributive share of such items is not the same with respect to all such items, then the portion of the imputed underpayment to which the lower rate applies with respect to such partner shall be determined by reference to the amount which would have been the partner's distributive share of net gain or loss if the partnership had sold all of its assets at their fair market value as of the close of the reviewed year of the partnership. As discussed later in this section of this Summary of Comments and Explanation of Revisions, the IRS recognizes that there may be concerns about the burden a fair market value analysis might create on both the partnership and the IRS. The Treasury Department and the IRS considered using the authority under section 6225(c)(6) to expand modification to use section 704(b) basis, but the recommendation to use section 704(b) basis is also flawed. Not all partnerships have section 704(b) basis numbers to which the partnership and the IRS could refer for modification purposes. Accordingly, the section 704(b) basis alternative would only be available to certain partnerships, and the IRS would prefer to provide an alternative option to the fair market value analysis that would be available to all partnerships. In addition, there is concern that some partners may not have accurate records for section 704(b) basis. As discussed later in this section of the preamble, the Treasury Department and the IRS did exercise the authority under section 6225(c)(6) to provide an option for special allocation rate modification that would apply to all partnerships.
The comment suggested, as an alternative to defining fair market value, that the regulations permit the partnership to request that adjustments subject to the special allocation rule under § 301.6225-2(b)(3)(iv) be placed in a specific imputed underpayment separate from other adjustments. The comment suggested this process would allow for the adjustments to be allocated solely to the affected relevant partners in the appropriate manner, and also recommended that the request to designate a specific imputed underpayment in this context be considered separately from other modification requests.
The process suggested by the comment was arguably permissible under former proposed § 301.6225-2(d)(6). Under former proposed § 301.6225-2(d)(6), a partnership was permitted to request during modification that one or more partnership adjustments taken into account to calculate one general or specific imputed underpayment be taken into account to calculate a different specific imputed underpayment. Former proposed § 301.6225-1(e)(2)(iii) had defined a specific imputed underpayment as an imputed underpayment with respect to adjustments to an item or items that were allocated to one partner or a group of partners that had the same or similar characteristics or that participated in the same or similar transaction. In the case of a special allocation to a group of partners, however, the partners may not
This discrepancy was addressed by the revisions to proposed § 301.6225-1(g)(2)(iii) in the August 2018 NPRM. Proposed § 301.6225-1(g)(2)(iii) provided that the IRS may designate a specific imputed underpayment with respect to adjustments to items that were allocated to a partner or group of partners that had the same or similar characteristics, that participated in the same or similar transaction, “or on such other basis as the IRS determines properly reflects the facts and circumstances.” A partnership may request designation of a specific imputed underpayment during the examination or during modification. See § 301.6225-2(d)(6). Accordingly, because the process suggested by the comment is contemplated by the proposed regulations, no change was made in the final regulations to response to this comment.
With respect to the comment's request for an alternative to fair market value, the Treasury Department and the IRS recognize that a determination of fair market value may present challenges for taxpayers and the IRS. For instance, obtaining a fair market value analysis may require the hiring of experts by the taxpayer, thereby increasing the costs of modification. Depending on the type of assets or the amount at issue, the IRS may need to employ its own experts to ensure that the taxpayer's analysis is correct. Recognizing these costs and administrative burdens, the Treasury Department and the IRS have exercised the authority under section 6225(c)(6) to “provide for additional procedures to modify imputed underpayment amounts on the basis of such other factors as the Secretary determines are necessary or appropriate” to carry out the purposes of section 6225(c). Pursuant to that authority, the final regulations under § 301.6225-2(b)(3)(iv) allow a partnership requesting rate modifications in the case of special allocations to determine the distributive share for all adjustments to which the lower rate applies with respect to all partners based on the test under either section 6225(c)(4)(B)(i) or section 6225(c)(4)(B)(ii).
The rule under the final regulations allows partnerships and partners to request modification based on what they determine is the most appropriate method to measure partners' distributive shares. This rule provides an alternative to the fair market value analysis for partnerships and partners which comments suggested, and the Treasury Department and the IRS agree, may be too difficult or costly. The rule, however, does not remove the ability of a partnership to request modification based on section 6225(c)(4)(B)(ii). The final regulations also clarify that the distributive share referenced in section 6225(c)(4)(B)(i) is the distributive share as determined in the NOPPA, and if no determination regarding that distributive share was made in the NOPPA, the rules of subchapter K of chapter 1 of the Code (subchapter K).
The same comment also recommended that the regulations clarify that if the IRS requires a partnership to make the deemed sale calculation envisioned in proposed § 301.6225-2(b)(3)(iv), the regulations provide that such action is not considered a revaluation for purposes of section 704. This comment was adopted. A sentence has been added to the final regulations under § 301.6225-2(b)(3)(iv) to make clear that any calculation by the partnership that is necessary for purposes of complying with the rule under § 301.6225-2(b)(3)(iv) is not a revaluation for purposes of section 704.
Proposed § 301.6225-2(d)(5) provided rules for modification regarding certain passive activity losses of publicly traded partnerships. Pursuant to proposed § 301.6225-2(d)(5), in the case of a publicly traded partnership that is a relevant partner, an imputed underpayment is determined without regard to the portion of any adjustment the partnership demonstrates would be reduced by a specified passive activity loss which is allocable to a “specified partner.” Proposed § 301.6225-2(d)(5)(iii) defined specified partner as a person that is a partner of a publicly traded partnership; that is an individual, estate, trust, closely held C corporation, or personal service corporation; and that has a specific passive activity loss with respect to the publicly traded partnership. One comment recommended that the definition of specified partner include partnerships to accommodate persons that hold an indirect interest in a lower-tier partnership that is under examination through one or more upper-tier partnerships. The final regulations do not adopt this definition of specified partner, but the final regulations do accommodate persons that hold an indirect interest in the partnership under examination.
In the August 2018 NPRM, the Treasury Department and the IRS used the authority under section 6225(c)(6) to create a second type of partner, a qualified relevant partner, that was eligible for modification under § 301.6225-2(d)(5). A qualified relevant partner is a relevant partner that meets the requirements of a specified partner for each year starting with the first affected year through the last year for which a return was filed by the partnership. To address the recommendation made by the comment to accommodate indirect partners, the final regulations provide that an indirect partner may also be a qualified relevant partner, and therefore be eligible for modification under § 301.6225-2(d)(5), if the indirect partner is an individual, estate, trust, closely held C corporation, or personal service corporation and has a specified passive activity loss with respect to the publicly traded partnership.
Former proposed § 301.6225-2(d)(5) had provided that modification for certain passive losses of publicly traded partnerships applied equally with respect to a publicly traded partnership subject to a proceeding under the centralized partnership audit regime and where a portion of the imputed underpayment was attributable to a publicly traded partnership that is a partnership-partner. Proposed § 301.6225-2(d)(5) was revised in the August 2018 NPRM to provide that § 301.6225-2(d)(5) applies in the case of a publicly traded partnership that is a relevant partner. The final regulations provide that modification under § 301.6225-2(d)(5) applies only to the publicly traded partnership requesting modification under § 301.6225-2 (that is, the partnership under examination). This change makes the modification procedures under § 301.6225-2(d)(5) more administrable for the IRS because only the partnership under examination may request modification under § 301.6225-2(d)(5). In this way, the change also makes modification § 301.6225-2(d)(5) consistent with other types of modification. Because the final regulations accommodate certain indirect partners of the publicly traded partnership requesting modification, this change should not substantially affect the number of publicly traded partnerships and partners eligible for modification under § 301.6225-2(d)(5).
Another comment observed that section 6225(c)(5) required certain actions and calculations based on information that would not be known until the adjustment year. Pursuant to
To address these incongruences, the comment recommended that the regulations allow a publicly traded partnership to reduce an imputed underpayment based on a net decrease in the passive activity loss allocable to a specified partner in the reviewed year to the extent the partnership takes such loss into account in the taxable year immediately preceding the year in which the NOPPA is issued. This comment was not adopted, but the concerns it raises were addressed in the August 2018 NPRM. In the August 2018 NPRM, the Treasury Department and the IRS used the authority under section 6225(c)(6) to provide that the partnership may request modification under § 301.6225-2(d)(5) with respect to the adjustment year or the most recent year for which the publicly traded partnership has filed a return under section 6031.
The Treasury Department and the IRS acknowledge that the most recent year for which a return was filed may not always be the year immediately before the issuance of the NOPPA, as in the rule suggested by the comment. However, using the taxable year for the most recently filed return allows the publicly traded partnership to refer to whatever return is the most recently filed, even if that return was filed shortly after the issuance of the NOPPA. This flexibility allows the partnership to take into account the information known as of the most recent tax year. If the rule were to require the publicly traded partnership to take into account information from a return filed before the issuance of the NOPPA, as suggested by the comment, the return filed before the issuance of the NOPPA might not be the most recent return. For example, the return filed prior to the issuance of the NOPPA could have preceded the NOPPA by several months. After the NOPPA was issued and at the time the partnership is considering submitting a modification request, the partnership could have filed the next year's return reflecting the next year's passive activity losses, which might differ from the losses reported on the return filed prior to the issuance of the NOPPA. The Treasury Department and the IRS have an interest in ensuring that the most current tax amounts are used in determining whether a modification request under § 301.6225-2(d)(5) should be approved. Given this interest, the rule in the final regulations uses the most recently filed return, rather than the comment's suggestion to use the return filed before the issuance of the NOPPA.
In addition, the rule suggested by the comment would require the partnership to know what adjustments would be included in the NOPPA and make adjustments on its return to take such adjustments into account, prior to the issuance of the NOPPA. If the adjustments in the NOPPA somehow differed from the adjustments the partnership took into account on its return, the modification might be denied because the partnership failed to take those adjustments into account. The comment's suggestion, therefore, has its own timing issues. The final regulations provide more flexibility for the partnership to reflect the information known as of the last return filed without requiring the partnership to predict what may or may not be in the NOPPA and on which day the NOPPA will be issued. Accordingly, although the final regulations did not adopt the comment per se, the final regulations adopted an alternative solution to the problem identified by the comment.
The same comment recommended that the final regulations allow a publicly traded partnership to request modification of the imputed underpayment after the end of the adjustment year. Specifically, the comment recommended that the final regulations require the modification request to be submitted within 74 days of the end of the adjustment year, which roughly aligns with the original due date of the partnership tax return. The procedure recommended by the comment is not administrable for the IRS for the same reasons discussed earlier in section 3.B.iii. regarding accepting amended return payments after the issuance of the FPA. Because the FPA is the mechanism through which modification is approved or denied, the modification determination must be made prior to the issuance of the FPA.
The comment stated that any post-FPA modification request would cause the FPA and a denial of the modification request to be subject to judicial review separately. This statement is inaccurate. If the partnership seeks judicial review under section 6234 with respect to an FPA, in the absence of a showing of fraud, malfeasance, or misrepresentation of a material fact, the IRS is precluded from mailing another FPA to such partnership with respect to such taxable year. Section 6231(c). Accordingly, if the IRS issued an FPA within the time frames discussed earlier in section 3.B.iii. regarding amended return payments, and the partnership seeks judicial review of that FPA, the IRS would be prevented from issuing a later FPA dealing with the modification request. If the partnership submitted its modification request after the partnership had already received judicial review with respect to the adjustments in the FPA, the IRS generally could not mail an additional FPA approving or denying the modification request, and the partnership would have no determination concerning its modification request which it could challenge in court under section 6234. Accordingly, this comment was not adopted.
The same comment requested that the IRS include the denial of any modification request in the FPA to ensure that any Tax Court proceeding will also address the dispute regarding the requested modification. This comment was not adopted. Whether and how disputes regarding modification requests are subject to judicial review by a court is not within the purview of the Treasury Department's or the IRS's regulatory authority. However, to assist with any potential judicial review of modification, the IRS plans to use the FPA as the method for approving or denying modification. The final regulations do not specify, however, what is required to be included in the FPA for purposes of approving or denying modification. The absence of a regulatory rule in this regard provides the IRS flexibility to allow for the differing circumstances of each administrative proceeding and varying types of modification requests.
The final regulations in § 301.6225-2(d)(5) describe the requirements for modification by publicly traded partnerships under section 6225(c)(5). This section does not require the
This comment was received in response to the June 2017 NPRM, prior to the addition of the definition of qualified relevant partner. The definition of qualified relevant partner allows partners to be eligible for modification under § 301.6225-2(d)(5) provided they are partners through the year for which the most recent partnership was filed. For purposes of the comment, however, the Treasury Department and the IRS view this comment as suggesting that the partnership would provide such information for whatever years are relevant for the modification.
The final regulations do not specify what specific information is required for modification under § 301.6225-2(d)(5). Therefore, the regulations do not address whether summary schedules would be appropriate. The IRS intends to issue forms and instructions for modification procedures which will provide additional information on what will be required for modification procedures under § 301.6225-2(d)(5).
Section 301.6225-2(d)(5)(v) requires that the partnership report, in accordance with forms, instructions, and other guidance prescribed by the IRS, to each specified partner or qualified relevant partner the amount of the reduction in suspended passive loss carryovers. One comment suggested that the easiest way to do so is to incorporate such reporting into the Schedules K-1 distributed to such partner at the end of the adjustment year. This comment was received in response to the June 2017 NPRM. Therefore, it could not have taken into account the rule from the August 2018 NPRM that allowed for use of the year of the most recently filed return. The final regulations do not specify the manner in which information must be reported under § 301.6225-2(d)(5)(v). Rather, the regulations defer the manner of reporting to forms and instructions. This provides flexibility to the IRS to gain experience with the forms it intends to develop for purposes of assisting partnerships in complying with the reporting requirements of § 301.6225-2(d)(5)(v) and to change those forms in response to taxpayer feedback, if necessary, without needing to amend the regulations.
In light of the change to allow certain indirect partners to utilize modification under § 301.6225-2(d)(5), the final regulations under § 301.6225-2(d)(5)(v) provide that the IRS may require reporting to an indirect partner that is a qualified relevant partner through forms, instructions, or other guidance. This rule allows the IRS flexibility to evaluate and adapt reporting requirements concerning indirect partners as the IRS and partnerships gain more experience with the centralized partnership audit regime.
Proposed § 301.6225-2(d)(7) provided that a partnership may request a modification of an imputed underpayment based on deficiency dividends distributed as described in section 860(f) by a relevant partner that is a qualified investment entity (QIE) under section 860(b). Under § 301.6225-2(c)(3)(i), the partnership must provide all information required to request modification (including modification for deficiency dividends paid by a QIE partner) on or before 270 days after the issuance of the NOPPA. A partnership may request an extension of this 270-day period, subject to the consent of the IRS. Section 301.6225-2(c)(3)(ii).
Several comments suggested that it is not ideal for a QIE partner to pay a deficiency dividend with respect to an amount or an adjustment that may not be final. The comments were specifically concerned that issues may be unresolved during the 270-day period after the issuance of the NOPPA because of possible review by IRS Appeals. The comments recommended that the IRS grant extensions of the 270-day period under § 301.6225-2(c)(3)(i) as a matter of course until all relevant issues concerning the adjustments have become final.
The IRS plans to adopt procedures under which the partnership will have an opportunity to resolve with IRS Appeals any issues with respect to the adjustments made during the examination prior to the mailing of the NOPPA. Therefore, all issues with respect to the adjustments will generally be resolved at the administrative level prior to the mailing of the NOPPA and the start of the 270-day modification period. Because a request for modification under § 301.6225-2(d)(7) will not be submitted until after the NOPPA has been mailed, the partnership and its QIE partners should know with certainty what adjustments are agreed and which are unagreed at the time of the modification request. This timing will allow the partnership and its QIE partners to evaluate the best method for modification and to determine whether modification under § 301.6225-2(d)(7) is appropriate. Accordingly, a rule requiring the granting of extensions of the 270-day period as a matter of course is not necessary.
Moreover, whether an extension of the modification period is appropriate is a determination best made on the facts and circumstances of a particular case. A rule requiring automatic granting of extensions would deprive the IRS of the ability to evaluation an extension request based on the facts and circumstances. Therefore, the final regulations do not require granting extensions of the 270-day period as a matter of course. Lastly, the regulations provide the IRS with the authority to grant an extension of the 270-day period when warranted, which also protects the partnership in cases that it may be initially unclear whether modification under § 301.6225-2(d)(7) is appropriate.
Another comment suggested that the regulations require payment of a deficiency dividend no later than 60 days after the date the partnership adjustments are finally determined, rather than after the NOPPA is mailed during the 270-day modification period. Another comment recommended that the regulations provide that the allowance of a deficiency dividend be agreed to in advance of a NOPPA, but in the event of a challenge to the underlying substantive adjustment in IRS Appeals or in court, the allowance does not become effective until final resolution of the underlying challenge. The final regulations do not adopt these suggestions.
First, as discussed earlier in this section of this preamble, the IRS Appeals process that the IRS intends to implement will already have determined which substantive adjustments are agreed to prior to the issuance of the NOPPA. As a result, the most likely avenue for a substantive challenge after modification will be in court and not with IRS Appeals.
Second, pursuant to section 6225(c)(7) and § 301.6225-2(c)(3)(i), everything required to submitted with respect to a modification request must be provided to the IRS within 270 days after the mailing of the NOPPA. The 270-day period is designed to ensure a timely resolution of the audit while also providing the partnership enough of an opportunity to modify an imputed underpayment reflected in a NOPPA. A rule allowing modifications after that 270-day period expires would undermine those goals.
Third, allowing modifications after the adjustments are finally determined precludes the IRS from approving modifications in the FPA. As discussed in section 3.B.ii of this preamble, the IRS plans to adopt procedures under which it will approve or deny each modification request in the FPA. Accordingly, the regulations do not permit modifications to be submitted beyond the 270-day period described in § 301.6225-2(c)(3)(i).
One comment recommended that the regulations clarify that a partnership's receipt of a NOPPA is not a “determination” that begins the 90- or 120-day period for a QIE partner's issuance and claiming of a deficiency dividend deduction under section 860. Section 860(e)(1)-(4) provides that a “determination” means (1) a court decision; (2) a closing agreement; (3) an agreement signed by the Secretary and by the QIE relating to the QIE liability for tax; or (4) a statement by the QIE attached to its amendment or supplement to a tax return. A NOPPA does not fall into any of these four categories. Accordingly, a NOPPA is not a “determination” for purposes of section 860(e). Moreover, § 301.6225-2(d)(7)(ii) requires that the partnership provide documentation of the QIE partner's “determination” described in section 860(e) as part of the partnership's request for modification. This rule makes clear that the determination in this context is the determination with respect to the QIE partner, which does not, by definition, include the NOPPA mailed to the partnership. Accordingly, because section 860(e), when read together with proposed § 301.6225-2(c)(7)(ii), addresses the comment's recommendation, the comment was not adopted.
Proposed § 301.6225-2(d)(8) provided that a partnership may request modification based on a closing agreement between the IRS and the partnership or between the IRS and a relevant partner, or both. One comment expressed concern that some partners might not want to negotiate the details of their tax return through the partnership representative and recommended that the regulations outline procedures for partners to work directly with the IRS to enter into closing agreements as part of the partnership audit. Although the IRS may, pursuant to § 301.6223-2(d)(1), allow a person that is not the partnership representative to participate in the examination of the partnership, the IRS is not required to do so. The centralized partnership audit regime is designed to provide for a single, unified proceeding in which the IRS works solely with the partnership representative who has the sole authority to bind the partnership and all its partners. Developing a regulatory procedure that would allow a single partner to work directly with the IRS, without working in conjunction with the partnership representative, during the partnership examination would contravene the regime's central design. The partnership representative may request that the IRS work directly with a partner on a closing agreement or other issues, but it is solely within the IRS's discretion to allow that. See § 301.6223-2(d)(1). Accordingly, this comment was not adopted.
Section 6225(c)(6) provides that the “Secretary may by regulations or guidance provide for additional procedures to modify imputed underpayment amounts on the basis of such other factors as the Secretary determines are necessary or appropriate” for the purposes of section 6225(c). Proposed § 301.6225-2(d)(10) provided that a partnership may request a modification not otherwise described in § 301.6225-2(d), and the IRS will determine whether such modification is accurate and appropriate. Additional types of modifications and the documentation necessary to substantiate such modifications may be set forth in forms, instructions, or other guidance prescribed by the IRS.
Several comments recommended that the Treasury Department and the IRS exercise the authority under section 6225(c)(6) to expand the available types of modifications under proposed § 301.6225-2(d). One comment recommended additional modifications related to foreign partners, including a tax exemption based on section 892 and a reduction in taxes based on eligibility for reduced rates of withholding under a tax treaty. The comment further recommended that these types of modifications and modification for a tax exemption based on foreign status be verified using an expanded version of the existing Forms W-8 and W-9.
Former proposed § 301.6225-2(d)(3) provided rules regarding modifications with respect to adjustments allocable to partners that would not owe tax as a result of their status as a tax-exempt entity. Proposed § 301.6225-2(d)(3)(ii) defined tax-exempt entity to mean a person or entity defined in section 168(h)(2)(A), (C), or (D). A foreign person or entity as defined in section 168(h)(2)(C) includes a foreign government or foreign organization. Accordingly, to the extent an adjustment is allocable to a foreign government or foreign organization, the partnership may request modification with respect to such adjustment provided the requirements of § 301.6225-2(c) and (d)(3) are met.
Proposed § 301.6225-2(d)(9), added in the August 2018 NPRM, provided rules for tax treaty modifications. Under proposed § 301.6225-2(d)(9), a partnership may request modification with respect to a relevant partner's distributive share of an adjustment to a partnership-related item if the relevant partner was a foreign person who would have qualified, under an income tax treaty with the United States, for a reduction or exemption from tax with respect to such partnership-related item in the reviewed year, would have derived the item (within the meaning of § 1.894-1(d)) had it been taken into account properly in the partnership's reviewed year return, and is not otherwise prevented under the income tax treaty with the United States from claiming such reduction or exemption with respect to the reviewed year at the time of the modification request.
No comments were received on the tax treaty modification rules proposed in the August 2018 NPRM. Proposed § 301.6225-2(d)(9) is retained and simplified in the final regulations, with no change in substance. Accordingly, a treaty modification is only available to the extent the relevant partner would have qualified for the treaty benefit at issue, whether a rate reduction or exemption from tax, had the item been taken into account by the partner in the reviewed year. In general, that means a foreign partner may submit a treaty modification only if the partner was, for the reviewed year, a treaty resident; would have derived the item of income through the partnership, or tiers of partnerships, if applicable, under the tax laws of its country of residence; would have been the beneficial owner of the item of income (not a nominee or conduit); would have satisfied the
The final regulations do not address, however, which form will be used for tax treaty modification, or for any type of modification. Prescribing the specific form used for a specific type of modification in the regulations is generally not ideal for either taxpayers or the IRS. The IRS may determine in the future a different form is more appropriate or the form number or name may require revision. Having the flexibility to prescribe the form without needing to change the regulations saves government resources and allows for expedited guidance to taxpayers.
Another comment expressed concern that the determination of the imputed underpayment with respect to adjustments to CFTEs could result in an overpayment of taxes by partners under the centralized partnership audit regime to the extent that one or more partners would be eligible to take an additional foreign tax credit (FTC) as a result of any adjustments made following the conclusion of an audit. The comment recommended that taxpayers should be permitted to claim FTCs for which they are eligible, provided that the taxpayer can provide sufficient evidence to the IRS when claiming the credit. This comment was not adopted.
The modification procedures provide adequate opportunity for a partner to take advantage of any new FTCs. For example, the partners may use amended return modification or the alternative procedure to take into account all adjustments that might affect specific partners, including any new FTCs. Accordingly, no changes were made to the regulations in response to this comment.
Two comments requested that the Treasury Department and the IRS use the authority under section 6225(c)(6) to expand modification and to authorize an “Early Decision” procedure for pushing out audit adjustments in tiered structures in order to address the administrative concerns of the IRS related to a tiered push out. This comment, which was submitted prior to the amendments by the TTCA to section 6226(b) and the August 2018 NPRM, was not adopted. Under the rule proposed in the August 2018 NPRM, adjustments may be pushed out beyond the first tier of partners. See proposed § 301.6226-3(e) and section 4.C.iii. of this preamble for further discussion of the tiered push out rules.
One comment suggested that, to the extent an adjustment amount and the imputed underpayment with respect to that adjustment amount have already been reported and tax paid, modifications should be permitted with respect to the tax amount paid and not be limited only to taxes paid in connection with an amended return. The comment offered two examples which might result in an imputed underpayment being determined on tax that had already been paid. The first example would occur if partners file tax returns with inconsistent positions under section 6222 that reflect the income being adjusted in the examination. The second example presented by the comment is the situation in which two or more people may be deemed by the IRS to have formed a partnership when they have individually reported the income being ascribed to the deemed partnership. This comment was adopted. The final regulations under § 301.6225-2(d)(2)(ii) allow a partnership to satisfy the requirements of amended return modification by demonstrating that a partner previously took into account such partnership adjustments and their effect on tax attributes for all relevant years and made any necessary payments.
Similarly, one comment recommended that modification provide for an alternative to closing agreements that would allow the partnership to demonstrate that a partner's share of an adjustment was partially or fully reversed and so the imputed underpayment should therefore be reduced to give credit for taxes paid in a later year. For instance, the partnership could demonstrate that a former partner would have paid tax on capital gain on its partnership interest and that amount of gain would have, economically included the amount of an adjustment. The partnership would then, pursuant to this recommendation, be permitted to demonstrate that the imputed underpayment should be reduced by a refund in an intervening year.
The same comment also recommended that the final regulations adopt an additional modification type that would allow the partnership to demonstrate the impact of adjustments on one or more of its partners, specifically with respect to interest expense and foreign taxes paid. The comment recommended that the partnership be able to demonstrate that the partner's reporting of these items was not as beneficial as assumed in the calculation of the imputed underpayment.
These comments were received in response to the June 2017 NPRM. The August 2018 NPRM provided rules relating to the alternative procedure and also allowed for amended return modification without regard to sections 6501 and 6511. These additions in the August 2018 NPRM allow for the types of modifications the comment was recommending. For example, under amended return modification as revised in the August 2018 NRPM, a partner files amended returns for the first affected year and other years to the extent tax attributes in those years are affected by taking the adjustments into account. Whether the partner pays additional amounts, demonstrates that on net there is no tax due, or is entitled to a net refund, provided the partner has otherwise complied with the modification requirements, the imputed underpayment will be adjusted to remove that partner's share of the adjustments if the IRS approves the modification. Accordingly, the final regulations do not adopt these comments because the final regulations provide other methods for accomplishing the rules recommended by the comments.
One comment recommended that the final regulations expand modification procedures to allow modification based on closing agreements by and amongst the partnership and the relevant partners entered into in the course of a proceeding with the Competent Authority office, in particular to facilitate the implementation of any mutual agreement by the IRS in a manner that is consistent with the purpose of tax treaties to avoid double taxation. This modification might include mutual agreement procedures but may also include requests for assistance in the context of partner-level foreign tax credits and protective claims. The comment also recommended that the final regulations permit multiple closing agreements and provide procedures for cooperation between the Competent Authority and partnership examination teams. This comment was received in response to the June 2017 NPRM. The August 2018 NPRM provided for treaty modifications that were not in the former proposed regulations, and the final regulations maintain the added treaty modification procedure. The final regulations do not adopt any new modifications that were not previously proposed in the August 2018 NPRM, but maintain the modifications based on closing agreements and treaties. Nothing in the regulations limits the closing agreements in a way that would prevent
Proposed § 301.6225-2(d)(2)(viii) provided that a relevant partner may raise a partner-level defense (as described in § 301.6226-3(d)(3)) by first paying the penalty, addition to tax, or additional amount with the amended return filed under § 301.6225-2(d)(2) and then filing a claim for refund in accordance with forms, instructions and other guidance. One comment recommended allowing the audited partnership to submit partner-level defenses for both direct and indirect partners as part of the modification process. According to the comment, a review by the IRS prior to requiring payment of the proposed penalties would permit an early determination regarding the validity of any partner-level defense and reduce economic and administrative burdens on taxpayers. The comment suggested that because penalties can represent a large dollar amount, the requirement that taxpayers must provide advance payment of penalties, even in cases where they have a valid penalty defense, can create a significant economic burden on partners. This comment was not adopted.
Due to the limited time the IRS has to review modification requests, the Treasury Department and IRS have determined that reviewing penalty defenses for specific partners in addition to reviewing the amounts taken into account on amended returns or in the alternative procedure submissions is unadministrable in the time frame allowed. The core aspect of the modification procedures is to exclude partnership adjustments from the imputed underpayment calculation. Whether a specific partner is then entitled to a refund of penalties paid after taking the adjustments into account is best determined outside the modification procedures and not subject to the time constraints of section 6225(c)(7) and § 301.6225-2(c). The final regulations, therefore, maintain the requirement that a partner must first pay any penalty due with the amended return filed during modification and then afterward file a claim for refund of the penalty in order to raise a partner-level defense. However, to address the concerns raised by the comment, the final regulations under § 301.6225-2(d)(2)(viii) give the IRS flexibility to develop through future guidance alternative procedures for raising partner-level defenses as the IRS gains more familiarity with the centralized partnership audit regime.
Proposed § 301.6225-3 addressed the treatment of adjustments that do not result in an imputed underpayment. Proposed § 301.6225-3 provided that a net negative adjustment resulting from a reallocation adjustment, which does not result in an imputed underpayment pursuant to § 301.6225-1(f), is taken into account by the partnership in the adjustment year as a separately stated item or a non-separately stated item, as required by section 702 and is allocated to adjustment year partners who are also reviewed year partners with respect to whom the amount was reallocated.
One comment expressed concerns with the application of proposed § 301.6225-3(b)(4) to publicly traded partnerships. According to this comment, the public trading of units of publicly traded partnerships depends on their fungibility, which requires that all items affecting the partners' section 704(b) capital accounts be allocated pro rata. The comment suggested that an allocation under proposed § 301.6225-3(b)(4) could force an adjustment year allocation to less than all of the public unit holders, potentially causing the units to be non-fungible. This comment was not adopted at this time, but the final regulations provide that the IRS may provide exceptions to the rule under § 301.6225-3(b)(4) pursuant to forms, instructions, and other guidance prescribed by the IRS. As the IRS gains more experience with the centralized partnership audit regime, the IRS may determine to create an exception through forms, instructions, or other guidance if doing so would benefit taxpayers while fulfilling the requirements of the statute and remaining administrable for the IRS. Having the flexibility to create such an exception through forms, instructions, and other guidance preserves government resources and expedites the process for the IRS to address taxpayer needs and for taxpayers to be aware of changes in IRS procedures.
One comment recommended that the regulations provide examples demonstrating the proper application of proposed § 301.6225-3(b)(4). The final regulations add two such examples under § 301.6225-3(d). One example demonstrates the application of the rule under § 301.6225-3(b)(4) in the context of a recharacterization adjustment the other example demonstrates application of the rule in the context of a reallocation adjustment.
One comment recommended that the rules be clarified regarding whether netting would be allowed with respect to adjustments that do not result in an imputed underpayment in multi-year audits. The comment asks about a particular example: If an audit of 2018 results in an imputed underpayment in 2018 and an overpayment in 2019 in regard to adjustment items, the proposed regulations would not permit those amounts to be netted. As discussed in section 3.A. of this preamble, partnership adjustments with respect to different reviewed years are not netted. If a multi-reviewed-year audit that resulted in an imputed underpayment with respect to one reviewed year and adjustments that do not result in an imputed underpayment with respect to a different reviewed year both had the same adjustment year, then the expense associated with the imputed underpayment paid in the adjustment year is taken into account by the partnership in the adjustment year and the adjustments that do not result in an imputed underpayment would also be taken into account on the adjustment year tax return. Expenses related to payment of an imputed underpayment are nondeductible under section 6241(4). As a result, such items would be taken into account according to subchapter K principles in the adjustment year and the extent to which any items net on the partnership or partners' returns would depend on the particular adjustments and the facts and circumstances of the partnership and partners. Instead, the partnership may also take advantage of modification procedures and the election under section 6226 to allow partnership adjustments to be taken into account directly by the partners that may, depending on the facts and circumstances, allow for different netting results at the partner level.
Lastly, § 301.6225-3(b)(7) was added to provide that partners that previously took into account an adjustment that does not result in an imputed underpayment before a notice of administrative proceeding was mailed by the IRS or before an administrative adjustment request was filed by the partnership do not take into account a second time the same adjustment that does not result in an imputed underpayment. This rule addresses situations where a partner took a position inconsistent with the partnership return as filed and as a result of that inconsistent position previously took into account items that were later determined by the IRS (or by the partnership in an AAR) to be
Twenty-two comments were received concerning section 6226, the election for an alternative to payment of the imputed underpayment. This section of this Summary of Comments and Explanation of Revisions addresses comments concerning the mechanics and effect of making an election under proposed § 301.6226-1; the statements furnished to partners and filed with the IRS pursuant to proposed § 301.6226-2; and the rules regarding how adjustments are taken into account by partners in accordance with proposed § 301.6226-3. Comments concerning basis and tax attribute rules under proposed § 301.6226-4 will be addressed in future guidance.
The comments received regarding the mechanics and effect of making an election under section 6226 cover six general topics: (1) The time for making the election; (2) revocations of the election; (3) making the election when there are multiple imputed underpayments or there is no imputed underpayment; (4) notification by the IRS that an election is invalid; (5) making the election and filing a petition for readjustment under section 6234; and (6) whether the election should be mandatory.
Under section 6226(a) and proposed § 301.6226-1(c)(3), a partnership may make an election under section 6226 (push out election) within 45 days of the date on which the FPA is mailed by the IRS. This 45-day period cannot be extended, and once made, the election may only be revoked with the consent of the IRS. See proposed § 301.6226-1(c)(1), (3).
Several comments recommended changes to the 45-day period under proposed § 301.6226-1(c)(3). Some comments suggested that the partnership should not be required to make the push out election until after there is a final determination of the partnership adjustments, either as a result of a defaulted FPA or, if a petition is filed, a final court decision. Other comments recommended that the regulations permit, either automatically or upon request, an extension of the 45-day period. These comments were not adopted.
The 45-day period for making an election under section 6226 is established by statute. Pursuant to section 6226(a)(1), section 6225 shall not apply to an imputed underpayment if the partnership “not later than 45 days after the date of the notice of final partnership adjustment” elects the application of section 6226 with respect to such imputed underpayment and furnishes statements to its partners for the reviewed year under section 6226(a)(2). The partners must then take into account the adjustments that resulted in that imputed underpayment. Consistent with section 6226(a)(1), proposed § 301.6226-1(c)(3) provided that an election under § 301.6226-1 must be filed within 45 days of the date the FPA is mailed by the IRS and that the time for filing such an election may not be extended.
Nothing in section 6226 provides for an exception to the 45-day period described in section 6226(a)(1), nor does section 6226 provide that the 45-day period may be extended by the IRS. Accordingly, comments suggesting that the regulations provide that a push out election may be made later than 45 days after the date of the FPA, whether as a general rule or as a result of an extension, were not adopted.
One comment suggested that, as an alternative to delaying or extending the 45-day period for making the push out election, the regulations should provide that the IRS will liberally grant revocations of a push out election in certain circumstances, such as in the case of a settlement of an imputed underpayment. Another comment suggested that the regulations should provide that the IRS will approve any request to revoke an election upon completion of the administrative or judicial proceeding. These comments were not adopted.
Section 6226(a) provides that an election under section 6226, once made, “shall be revocable only with the consent of the Secretary.” Consistent with section 6226(a), § 301.6226-1(c)(1) provides that an election under § 301.6226-1 may only be revoked with the consent of the IRS. The requirement that a revocation only be made with the consent of the IRS is mandated by the statute and is critical to the administration of the collection aspect of the push out regime. A push out election relieves the partnership that made the election under section 6226 (audited partnership) from the requirement to pay the imputed underpayment to which the election relates and shifts the collection of any chapter 1 tax resulting from the partnership adjustment to the partners of the partnership. In light of the collection nature of the push out regime, whether a revocation of a push out election should be granted largely depends on the facts and circumstances. For example, a revocation may benefit the IRS, the partnership, and its partners in the case of an agreement by the partnership to pay at the partnership level in lieu of pushing out the adjustments to its partners. On the other hand, a revocation may prejudice the IRS and the partners if, for example, the revocation is granted after statements have already been furnished to the partners. In that case, some partners may have already paid any resulting tax. If the revocation is significantly delayed, some partners may be time-barred from filing refund claims. In turn, any refund claim filed by a partner would require additional processing by the IRS, which could become administratively burdensome particularly in the case of tiered structures. Also, the period to assess the imputed underpayment against the partnership may have expired at the time of the revocation request. Additionally, the audited partnership may no longer be collectible and, if the IRS granted a revocation, the IRS would be required to engage in unnecessary and costly additional collection procedures. Requiring consent of the IRS before a revocation takes effect ensures flexibility to appropriately address each circumstance and protects partners that may have already received pushed out statements. Accordingly, comments recommending liberal or automatic approvals of requests to revoke push out elections were not adopted.
Under proposed § 301.6226-1(a), if an FPA includes more than one imputed underpayment (as described in proposed § 301.6225-1(g)), a partnership may make an election under § 301.6226-1 with respect to one or more of the imputed underpayments identified in the FPA. One comment suggested that the regulations clarify whether there are any requirements for, or limitations on, a partnership's ability to make a push out election for different imputed underpayments. Neither the proposed regulations nor the final
One comment suggested that a partnership should be allowed to make an election under section 6226 for a taxable year for which there is no imputed underpayment, but for which there is a tax effect favorable to the partnership. The comment described an example in which the IRS determines in an examination of year 1 that the partnership should have reported income originally reported in year 3 ratably over years 1, 2, and 3. In the example, the IRS determines an imputed underpayment with respect to year 1, and the partnership makes a push out election with respect to that imputed underpayment. The comment suggested that a push out election should be permitted for year 3 as well to correct the perceived anomalous result that could occur if the reviewed year partners did not get the benefit of the decrease in income with respect to year 3.
Pursuant to section 6226(a)(1), the partnership may make a push out election “with respect to an imputed underpayment.” Section 301.6226-1(a) echoes the statutory language by providing that a partnership may elect under § 301.6226-1 an alternative to the payment by the partnership of “an imputed underpayment.” Accordingly, to make a push out election under section 6226(a)(1) and § 301.6226-1, there must be at least one imputed underpayment for the taxable year. To the extent the comment was suggesting an election should be permitted for a year in which there is no imputed underpayment, the comment was not adopted.
As the comment observed, the partnership has other options to make adjustments for year 3. The partnership in the example could file an AAR for year 3, provided the period described in section 6227(c) permitted the filing of an AAR for year 3. See 6227(c) and § 301.6227-1(b). The modification procedures may also provide a mechanism for the partnership and its partners to benefit from the change to year 3. For example, the partners may file amended returns (or utilize the alternative procedure to filing amending returns) to take into account the adjustments to years 1, 2, and 3. See § 301.6225-2(d)(2). See also section 6225(c)(9) (allowing modification of adjustments that do not result in an imputed underpayment). Additionally, nothing in the final regulations prevents the partnership from seeking a closing agreement with the IRS with respect to year 3 subject to rules generally applicable to closing agreements.
Under proposed § 301.6226-1(c)(1), an election under § 301.6226-1 is valid until the IRS determines that the election is invalid. If an election is determined by the IRS to be invalid, the IRS will notify the partnership and the partnership representative within 30 days of such determination and provide the reasons for the determination. See § 301.6226-1(d). Former proposed § 301.6226-1(c)(2) had provided that if the IRS makes a final determination that an election under § 301.6226-1 is invalid, section 6225 applies with respect to the imputed underpayment as if the election were never made and the partnership must pay the imputed underpayment. The word “final” was removed from former proposed § 301.6226-1(c)(2) in the August 2018 NPRM to clarify that the IRS may determine that an election is invalid, and assess and collect the imputed underpayment to which the purported election related, without first being required to make a proposed or initial determination of invalidity. This clarification was adopted in the final regulations under § 301.6226-1(d) (formerly proposed § 301.6226-1(c)(2)). Under § 301.6226-1(d), the IRS may determine an election is invalid without first notifying the partnership or providing the partnership an opportunity to correct any failures to satisfy all of the provisions of § 301.6226-1 and § 301.6226-2, including an opportunity to correct errors in pursuant to § 301.6226-2(d).
One comment suggested that the regulations require the IRS to notify the partnership of its intent to determine that a push out election is invalid and provide the partnership with an opportunity to respond prior to making a final determination that the election is invalid. This comment was not adopted.
An election under section 6226 may be invalid for a number of reasons and not every case will present a need to first communicate with the partnership. For example, the partnership may make an election, but never furnish statements to its partners. Providing the partnership with a preliminary determination that the election is invalid in that case and an additional opportunity to furnish statements would undermine the 60-day period for furnishing statements (see proposed § 301.6226-2(b)), which is designed to support the IRS's timely collection of any additional reporting year tax and provide timely information to reviewed year partners regarding any additional reporting year tax. In such a case, the IRS should have the ability to determine the election is invalid and to immediately assess an imputed underpayment without first notifying the partnership. Accordingly, the comment's suggestion was not adopted. However, while nothing in the regulations requires the IRS to first contact a partnership prior to making a determination that an election under section 6226 is invalid, the IRS intends to develop procedures under which the IRS will first contact partnerships prior to determining a push out election is invalid in certain cases. Those procedures, if adopted, will be set forth in future sub-regulatory guidance.
The same comment also suggested that the partnership should be able to seek review of a decision by the IRS that a push out election is invalid in the United States Tax Court. The United States Tax Court is a court of limited jurisdiction.
Under proposed § 301.6226-1(e) (§ 301.6226-1(f) in the final regulations), a partnership that has made an election under § 301.6226-1 is not precluded from filing a petition under section 6234(a). Section 6234(a) provides that a partnership may file a petition in the Tax Court, a United States district court, or the Court of Federal Claims, within 90 days of the date on which an FPA is mailed under section 6231. A petition under section 6234 may be filed in a district court or the Court of Federal Claims only if the partnership filing the petition makes a jurisdictional deposit in accordance with section 6234(b). Proposed § 301.6234-1(b) provide that the jurisdictional deposit is the amount of (as of the date of the filing of the
One comment stated that the proposed regulations provide no explanation as to how or whether the deposit amount under section 6234(b) may or should be adjusted to reflect a push out election under section 6226. The comment recommended the regulations should provide a mechanism that would enable a partnership to file a petition in a district court or Court of Federal Claims and still make an election under section 6226, without creating the risk of having tax on the partnership adjustments paid twice. The comment suggested that one possible approach might be to reduce the deposit amount by the amount that would be reported by partners that receive push out statements. The comment suggested that another possible approach might be to ensure that there is a clear mechanism for the partnership to obtain a refund of the jurisdictional deposit before any amounts are paid under the push out by partners.
Nothing in the proposed regulations limits a partnership's ability to file a petition in a district court or the Court of Federal Claims if the partnership has made an election under section 6226 (provided the partnership has made the jurisdictional deposit required by section 6234(b)). Proposed § 301.6226-1(e) expressly provided that a partnership making the election under § 301.6226-1 is not precluded from filing a petition under section 6234(a) (which includes petitions in the Tax Court as well as petitions in district courts and the Court of Federal Claims). Accordingly, to the extent the comment was seeking clarification that a partnership can both make an election under section 6226 and file a petition under section 6234, the comment was not adopted because the plain language of § 301.6226-1(f) (proposed at § 301.6226-1(e) and renumbered to § 301.6226-1(f)) makes clear that a partnership can take both actions. Accordingly, no changes were made to proposed § 301.6226-1 in response to the comment. To the extent the comment was seeking to make clear that a partnership that makes a valid election under section 6226 with respect to an imputed underpayment is no longer liable for that imputed underpayment, the plain language of section 6226(a) and § 301.6226-1(b)(2) makes clear that is the case. The comment's suggestion regarding the amount of the jurisdictional deposit under section 6234(b) and proposed § 301.6234-1(b) is addressed in section 9 of this Summary of Comments and Explanation of Revisions.
One comment suggested that the regulations should make the election under section 6226 mandatory, unless provided for otherwise in the partnership agreement, in two circumstances in order to mitigate a partnership representative's potential conflict of interest and to provide protection to partners that are partners in the adjustment year but not partners in the reviewed year. The first circumstance is when the partnership representative is both a partner in the reviewed year and the adjustment year, and the partnership representative's interest during the adjustment year is less than it was in the reviewed year. The second circumstance is when the aggregate partnership interest of any adjustment year partner or group of partners holding a 20 percent or greater interest in the partnership is 20 percent or greater than the interest held by the same partner or group of partners in the reviewed year. Because the approach recommended by the comment is prohibited by statute, the comment's recommendation was not adopted.
Sections 6225 and 6226 provide that the default rule, absent an affirmative election by the partnership, is that the partnership shall pay any imputed underpayment resulting from the partnership adjustments. The regulations cannot switch the default rule from one that imposes partnership liability under section 6225 to one that requires a push out election under section 6226. Additionally, a partnership “elects the application of” section 6226 with respect to an imputed underpayment. Section 6226(a)(1). That election is statutory and, like under any other election under the Code, is a choice by the partnership. It would not be consistent with the elective nature of section 6226 to require the partnership to make a push out election under any circumstance.
Proposed § 301.6226-1(c) required that an election under § 301.6226-1 must include each reviewed year partner's name, address, and TIN. Under § 301.6226-2(e), each statement furnished by the partnership to a reviewed year partner must include “the current or last address of the reviewed year partner that is known to the partnership.” A partnership should use the same standard for determining the address included for each reviewed year partner in the election under § 301.6226-1 as the address included in each statement under § 301.6226-2. Accordingly, the final regulations under § 301.6226-1(c) clarify that an election under § 301.6226-1 must include the “the current or last address of each reviewed year partner that is known to the partnership.”
The comments received regarding furnishing statements to partners and filing the statements with the IRS cover five general areas: (1) The partners to whom the statements are furnished; (2) the timing of when the statements are furnished; (3) reasonable diligence in identifying correct addresses; (4) the effect of failing to properly furnish statements; and (5) the content of the statements.
Section 6226(a)(2) requires a partnership to furnish statements to “each partner of the partnership for the reviewed year.” Consistent with the statute, proposed § 301.6226-2(a) provided that a partnership that makes an election under § 301.6226-1 must furnish to each reviewed year partner a statement reflecting the partner's share of partnership adjustments associated with the imputed underpayment for which the election under § 301.6226-1 was made. A “reviewed year partner” is any person who held an interest in the partnership at any time during the reviewed year. See proposed § 301.6241-1(a)(9). One comment suggested that the partnership should only be required to furnish (or have the option to furnish) statements to partners that would owe additional tax as a result of the partnership adjustments. This comment was not adopted.
The statute does not impose any qualifications or limitations on which partners from the reviewed year must be furnished push out statements. The statute mandates that the partnership furnish a statement “to each partner of the partnership for the reviewed year.” Section 6226(a)(2). This statutory requirement is unambiguous and as a result is not being altered in the final regulations.
In addition, the collection mechanism of section 6226 is similar to tax reporting with respect to Schedules K-1, in that the partnership furnishes statements to the partners, and the partners are solely responsible for determining and self-reporting any tax due. Additionally, in most cases, the
The same comment also recommended that the regulations clarify how adjustments are communicated to reviewed year partners who dispose of their interest in the partnership, including persons who were partners in the reviewed year but not the adjustment year and persons who were only partners in the intervening years (the years after the reviewed year but before the adjustment year). Persons who were only partners in the intervening years are by definition not reviewed year partners, and therefore the partnership is not required to furnish statements to such partners under § 301.6226-2. As a result, partners that were only partners during intervening years are not required to take into account partnership adjustments under § 301.6226-3. Therefore, to the extent the comment was suggesting statements should be furnished to partners from intervening years only, this suggestion was not adopted.
Persons who were reviewed year partners, but who are not partners during the adjustment year or some or all of the intervening years, retain their status as reviewed year partners regardless of when they disposed of their interest. The partnership is required to furnish statements to its reviewed year partners in accordance with § 301.6226-2. Because the proposed regulations clearly required that statements be furnished to all reviewed year partners, no changes were made in response to this comment.
Two comments were received regarding the timing of the statements furnished by a partnership to its reviewed year partners. The first comment suggested that the regulations should provide that a partnership will not be required to furnish statements under proposed § 301.6226-2 until after the partnership has exhausted its rights to challenge the audit adjustments through an administrative or judicial proceeding.
Under proposed § 301.6226-2(b)(1), a partnership that makes an election under § 301.6226-1 must furnish statements to its reviewed year partners (and file those statements with the IRS) no later than 60 days after the date all of the partnership adjustments to which the statement relates are finally determined. Partnership adjustments become finally determined upon the later of the expiration of the time to file a petition under section 6234 or, if a petition under section 6234 is filed, the date when the court's decision becomes final. Proposed § 301.6226-2(b)(1)(i), (ii). Once the time to file a petition has expired, or if a petition is filed, the court's decision has become final, the partnership has exhausted its ability to challenge the partnership adjustments through administrative and judicial avenues. Accordingly, because the plain language of proposed § 301.6226-2(b)(1) reflected the rule suggested by this comment, no changes were made in response to this comment.
The second comment suggested that the due date for the statements under proposed § 301.6226-2 should align with the due date for the partnership's Schedule K-1s and that extensions of the statement due date should be permitted to accommodate the complexity of the calculations necessary for the accurate distribution of the adjustments among the partners. The comment stated that not having the statement due date coincide with the Schedule K-1 due date would create confusion among the partners and likely result in less timely compliance. This comment was not adopted.
Under section 6226(a) and (b), each reviewed year partner that is furnished a statement takes into account the partnership adjustments reflected on that statement by adjusting the partner's chapter 1 tax for the taxable year which includes the date the statement was furnished by the partnership (the reporting year). Therefore, the date the statement is furnished by the audited partnership determines which taxable year a partner (either direct or indirect) will pay tax as a result of taking into account the partnership adjustments (the additional reporting year tax). For example, if a reviewed year partner is furnished a push out statement on March 15, 2022 with respect to reviewed year 2020, the partner must report and pay its additional reporting year tax on the partner's return for the 2022 taxable year, which, for individuals, would be considered timely filed on April 17, 2023 (April 15, 2023 is a Saturday). In contrast, when a partner receives a Schedule K-1, the partner is required to report the items on that Schedule K-1 on the tax return for the taxable year that has just ended. For example, if a partner receives a Schedule K-1 on March 15, 2022 for the 2021 taxable year, the partner must report the items on that Schedule K-1 on the partner's return for the 2021 taxable year, which, for individuals, would be due on April 15, 2022.
These examples illustrate the impediments to aligning the push out statement due date with the Schedule K-1 due date or with providing extensions of the statement due date. First, reviewed year partners who simultaneously receive both a push out statement and a Schedule K-1 may be required to report the items on those statements in different taxable years. While the receipt of tax documents at the same time of year might have some superficial appeal, there is a risk of causing confusion about when and how to take into account the information on those documents. For instance, receiving the push out statement at the same time as the Schedule K-1 could result in a belief by the partner that the partner is supposed to report the amounts on the push out statement in the same year as the items on the Schedule K-1, which would likely be incorrect. In addition, the reviewed year partners, to whom the push out statements must be furnished, may not be the same as the partners for whom Schedule K-1s are required. Therefore, requiring the statements to be furnished at or around the same time may also create confusion for the partnership.
Second, aligning the push out statement due date with the Schedule K-1 due date or allowing extensions would significantly delay the reporting and payment of the additional reporting year tax by reviewed year partners, which is contrary to the interests of sound tax administration. A delay in the
Accordingly, it is in the interests of sound tax administration to require the push out statements to be furnished expeditiously for all adjustments that are finally determined more than 60 days from the end of the calendar year because the additional reporting year tax is required to be paid with the return for the year in which the statement is furnished. This reporting and payment system also benefits partners by ensuring that reviewed year partners are furnished the push out statement close in time to the final determination of the partnership adjustments, allowing the reviewed year partners to determine any additional reporting year tax, effects on tax attributes, and make payments to stop interest from continuing to run.
For these reasons, the comment recommending alignment of the push out statement due date with the Schedule K-1 due date was not adopted. The recommendation that the push out statement due date be subject to extension also was not adopted for the reasons described in this section of this preamble.
In the case of a tiered structure, however, the comments' recommendation to align the push out statement due date with the Schedule K-1 due date is reflected in § 301.6226-3(e). Under § 301.6226-3(e)(3)(ii), pass-through partners must furnish statements to their affected partners no later than the extended due date for the return for the adjustment year of the audited partnership. This due date aligns the push out statements furnished by pass-through partners with the extended Schedule K-1 due date for the audited partnership, accommodating, in part, the comment's recommendation.
Under proposed § 301.6226-2(b)(2), a partnership must furnish statements to each reviewed year partner in accordance with the forms, instructions, and other guidance prescribed by the IRS. If the partnership mails the statement, the partnership must mail the statement to the current or last address of the reviewed year partner that is known to the partnership. If a statement is returned as undeliverable, the partnership must undertake reasonable diligence to identify a correct address for the reviewed year partner to which the statement relates. Proposed § 301.6226-2(b)(2).
One comment suggested the final regulations clarify that a master limited partnership (a publicly traded partnership as defined in section 7704) satisfies the reasonable diligence requirement under proposed § 301.6226-2(b) if the partnership utilizes the same procedures it uses for undeliverable Schedule K-1s. According to the comment, a master limited partnership (MLP) normally sends the Schedule K-1 to the address provided to the MLP by the partner's broker; MLPs provide call centers and web-based support that allow partners to directly provide updated contact information to the partnership; and MLPs typically do not attempt to update partners' addresses by using public name and address databases, but will update an address if mail is returned with a forwarding address.
The regulations under the centralized partnership regime are rules of general applicability for all partnerships. The procedure suggested by the comment would be cost-prohibitive for many partnerships. The Treasury Department and the IRS decline to provide a safe harbor in the final regulations solely for partnerships with the means to operate a call center. Additionally, it is not administrable to create special rules for different categories of partnerships as this would result in a multitude of special rules that in some cases may be contradictory and under inclusive. It may also create additional burdens for partnerships that cannot comply with a general rule designed with only a specific type of partnership in mind.
As the IRS gains experience with the centralized partnership audit regime and the push out election in particular, the Treasury Department and the IRS may consider whether further guidance regarding reasonable diligence would be beneficial for partnerships. For purposes of the final regulations, however, the comment's suggestion was not adopted, and the final regulations maintain the rule that the partnership undertake reasonable diligence when a statement is returned undeliverable.
In addition, the final regulations under § 301.6226-2(b)(2) clarify that if after undertaking reasonable diligence the partnership identifies a correct address for the reviewed year partner, the partnership must mail the statement to the reviewed year partner at that correct address.
Several comments suggested that the regulations clarify the effect of a partnership's failure to properly furnish statements under § 301.6226-2 has on the validity of an election under section 6226. One comment recommended clarification of whether a failure to undertake reasonable diligence under proposed § 301.6226-2(b)(2) with respect to a single partner would make the entire election under section 6226 invalid or only the portion allocable to that specific partner. Similarly, another comment recommended that the regulations clarify that a failure to furnish the statement to one partner would mean the push out election was still effective with respect to the other reviewed year partners, but that the partnership would be liable for the tax attributable to the partner who was not properly furnished a statement.
Pursuant to section 6226(a)(1), an election under section 6226 is made “with respect to an imputed underpayment.” Section 6226(a)(2) requires a partnership to furnish statements to “each partner” of the partnership for the reviewed year. Accordingly, the IRS may invalidate an election under section 6226(a) for any failure to meet the requirements of § 301.6226-1, regarding how an election must be made, or § 301.6226-2, regarding the manner in which statements must be furnished. Because an election under section 6226(a) is “with respect to an imputed underpayment” and not with respect to each specific partnership adjustment that resulted in that imputed underpayment, an election under section 6226 is either valid or invalid with respect to the entire imputed underpayment for which the election was purportedly made.
Nothing in the regulations, however, requires the IRS to determine that a purported election under section 6226 is invalid in situations where the partnership fails to fully comply with
Several comments suggested that the regulations provide a safe harbor that would satisfy the requirement to furnish statements to all reviewed year partners. Two comments suggested that the regulations adopt a de minimis rule providing that a failure to deliver a certain number of push out statements, or statements representing a de minimis amount of the pushed out adjustments, would not invalidate a partnership's election under section 6226. One comment recommended that the regulations provide that a partnership's push out election will not be invalidated if the partnership has substantially complied with the regulatory requirements. Another comment suggested that the regulations provide that a partnership will be deemed to have made a valid election under section 6226 if the partnership makes a good faith effort to furnish push out statements to all of its partners. Another comment recommended that the regulations clarify that the obligation to furnish a statement to each reviewed year partner is deemed satisfied if the partnership in good faith furnishes a statement to each partner to whom it was required to send a Schedule K-1 for the reviewed year. These comments were not adopted.
As an initial matter, proposed § 301.6226-2 did not require that the statements be
With respect to the suggestion that the regulations adopt a de minimis, substantial compliance, or good faith rule for failure to properly furnish statements to partners, these suggestions were not adopted. The push out regime is a collection mechanism in lieu of collecting the imputed underpayment from the audited partnership. The benefit to the audited partnership by making a push out election is that the partnership is no longer liable for the imputed underpayment to which the election relates. One of the requirements to obtain this benefit is that the partnership must furnish correct statements to all of the partnership's reviewed year partners. Until the statements have been furnished and the partners determine their additional reporting year tax, the tax implications for each partner as a result of taking into account the pushed out adjustments is uncertain. The additional reporting year tax for each partner may differ greatly, ranging from an increase in tax, a decrease in tax, or no liability at all.
None of the rules suggested by the comments—de minimis safe harbor, substantial compliance, good faith standard—takes into account the asymmetric tax consequences of the pushed out adjustments in the hands of the partners. For instance, a large percentage of adjustments may be allocated to one or a few partners and a failure to furnish statements to this de minimis number of partners would impede the proper collection of a large percentage of additional reporting year tax. Similarly, relatively small numerical adjustments may have significant tax effects on partners. A de minimis rule, whether based on the number of statements or amount of adjustments, would frustrate the collection aspect of section 6226. Additionally, a de minimis rule would present tax administration challenges because a partnership can pick and choose which statements to furnish to which partners, so long as the number of statements furnished or the amount of the pushed out adjustments fell within the de minimis amount. Good faith and substantial compliance rules present the same concerns.
Other provisions in the regulations mitigate against the concerns expressed by the comments. As previously discussed in this section of this preamble, under § 301.6226-2(b)(2) a partnership must send a push out statement to the current or last address of the partner that is known to the partnership. Doing so is generally sufficient for purposes of satisfying the address requirements of § 301.6226-2. Additionally, the general versus specific imputed underpayment rules also mitigate concerns about being unable to properly furnish a statement to a particular partner or group of partners. The partnership may request that the IRS designate a specific imputed underpayment with respect to the adjustments allocable to a partner or group of partners if the partnership has concerns about furnishing a statement to that partner or group of partners. See proposed § 301.6225-2(d)(6). For example, if the partnership lacks current address information for a specific partner, the partnership may request a specific imputed underpayment for that partner's share of the adjustments, pay the specific imputed underpayment, and make a push out election for the general imputed underpayment.
Two comments expressed concerns about situations when the partner no longer exists or is deceased or when the partnership does not have current contact information for a former partner. One of these comments suggested that once a partnership has furnished statements to its partners and to the IRS, the partnership has fulfilled its obligations under section 6226. The other comment specifically stated that neither the partnership nor the remaining partners should have any liability for the imputed underpayment or associated interest and penalties with respect to adjustments allocable to partners that are no longer in existence or who are deceased.
Nothing in the statute or the proposed regulations provides that the partnership or any remaining partners are liable for any amounts that are allocable to reviewed year partners who are no longer in existence or are deceased. Under section 6226(a) and proposed § 301.6226-1, there are only two requirements for a partnership to make an election under section 6226. One, the partnership must make an election under section 6226(a)(1) and § 301.6226-1 within 45 days of the date the FPA is mailed by the IRS. Two, the partnership must furnish statements to each partner from the reviewed year in the time and manner prescribed by § 301.6226-2. The plain language of proposed § 301.6226-1(c)(1) made clear that if a valid election is made under § 301.6226-1, the partnership is not liable for the imputed underpayment to which the election applies. Additionally, under proposed § 301.6226-2(f), only a partner's allocable share of the partnership adjustments are included on the statement furnished to that reviewed year partner. Pursuant to § 301.6226-3, only the adjustments reflected on the statement furnished to the reviewed year partner must be taken into account by that partner. To the extent the comment expressed concern about the partnership lacking a current address for a partner that no longer exists, is deceased or is otherwise a former partner, the proposed regulations
As discussed in section 4.B.iv. of this preamble, several comments expressed concerns about the requirement to furnish statements to all of the partnership's reviewed year partners. Although those comments were not adopted, the ability to correct errors in statements mitigates the potential effects of this rule. Proposed § 301.6226-2(e) provided that the partnership must provide correct information in the statements it furnishes to its partners and files with the IRS. Proposed § 301.6226-2(d)(2)(i) provided that if a partnership discovers an error in a statement within 60 days of the statement due date, the partnership must correct that error, and may do so without IRS consent. If a partnership discovers an error more than 60 days after the statement due date, the partnership may only correct the error after receiving IRS consent. Proposed § 301.6226-2(d)(2)(ii). Additionally, when the IRS discovers an error in a statement, the IRS may require the partnership to correct that error or to provide additional information. Proposed § 301.6226-2(d)(3).
The correction rules under proposed § 301.6226-2(d) were designed to require a partnership that identifies an error in a statement to correct that error expeditiously. Similarly, nothing in the regulations prevents a partner that receives a statement containing an error from alerting the partnership of the error within the 60-day period so that the audited partnership can correct the error. Even if the partnership corrects errors within the 60-day period, however, proposed § 301.6226-1(c)(2) provided the IRS could invalidate the election.
In light of the comments in section 4.B.iv of this preamble regarding the effect on the push out election of failures to furnish correct statements, the Treasury Department and the IRS have revised the rule under proposed § 301.6226-1(c)(2). The 60-day correction period should serve as a period of time after the statements are furnished to verify that the information on the statements was correct and to rectify any errors without adverse consequences regarding the push out election to the partnership or its partners. The ability to correct statements gives the partnership an opportunity to ensure statements were furnished properly and, to the extent a correction can cure the identified defects, to take steps to ensure that an election under section 6226 will not be invalidated. The ability to correct errors also ensures that partners have the correct information when the partners take into account the adjustments reflected on the statements.
Accordingly, the final regulations under § 301.6226-1(d) clarify that the IRS may not invalidate an election based on errors that are timely corrected by the partnership in accordance with § 301.6226-2(d). However, any errors in any statements furnished by the partnership are subject to penalty under section 6722 and the regulations thereunder. See § 301.6226-2(a). In the case of errors discovered by the IRS, the IRS is under no obligation to require the partnership to provide additional information or to correct any errors discovered or brought to the IRS's attention at any time. The IRS may, instead, invalidate the election.
One comment recommended changes to the correction process under § 301.6226-2(d) and the timing of the correction period. Specifically, the comment suggested with respect to errors discovered by a partnership, the partnership should have an automatic obligation and right to issue corrected statements for errors discovered no later than 60 days after the extended due date of the audited partnership's adjustment year return. The comment also suggested that for errors discovered by the partnership after this date, the partnership must notify the IRS, and unless the IRS objects within 90 days of such notification, the partnership must issue the corrected statements. The comment suggested that if the IRS issues a denial within the 90-day period, such denial shall include an explanation for the denial, and the partnership shall have the ability to challenge the decision with IRS Appeals. These suggestions were not adopted.
It is not in the interest of sound tax administration to place a limit on the time the IRS has to consider whether to allow corrected statements after 60 days from the due date of the statements. For example, a partnership may request to make a correction at a time when the period of limitations on assessing additional tax for the affected partners was closed, but the period of limitations for requesting a refund as to other affected partners was still open. If the IRS was unable to process the request to issue corrected statements within 90 days, the corrected statements would be furnished to the partners and those partners would take into account the adjustments. If the IRS determines that the correction of the errors was insufficient, the IRS could determine the partnership's election under section 6226 was invalid, but the period of limitations on assessing the imputed underpayment may have expired by that time. By requiring IRS permission before any corrected statements are furnished, the IRS can evaluate each request based on the facts and circumstances and ensure that any proposed corrections are consistent with the determinations made during the partnership proceeding and would not frustrate the collection of any amounts owed as a result of the partnership proceeding. Requiring IRS permission also incentivizes partnerships to submit correct statements by the due date, which ensures that partners are provided timely and accurate information with which to take into account the adjustments. Because partners may have already taken into account the adjustments, any corrections received by the partners after they have taken into account the adjustments could detrimentally affect those partners.
The same comment also suggested that with respect to errors discovered by the IRS, the IRS may not unreasonably refuse to permit a partnership to issue corrected statements if correction of the error results in a reduced tax liability by the affected partners or to correct the allocation of an adjustment between partners. This comment was not adopted. To extent this comment was suggesting that the regulations require the IRS to require the partnership to correct errors the IRS discovers in these circumstances, the comment was not adopted. The IRS needs discretion to evaluate whether requiring the correction of errors is in the interest of sound tax administration. For example, the errors may be de minimis or the correction of the errors may result in barred assessments or require partners to file amended returns if they have already taken into account the adjustments. To the extent the comment was suggesting that the IRS should not unreasonably withhold consent in situations where the partnership has discovered errors, the comment was also not adopted. As stated earlier in this section of this preamble, the IRS needs the flexibility to evaluate requested changes based on the facts and circumstance of each request.
Under proposed § 301.6226-2(e), each statement described in proposed
The comments regarding how adjustments are taken into account by partners covered five general areas: (1) The calculation of the additional reporting year tax; (2) penalties, additions to tax, and additional amounts; (3) pass-through partners; (4) qualified investment entities and master limited partnerships (MLPs); and (5) the examples under proposed § 301.6226-3(h).
Former proposed § 301.6226-3(a) provided that the chapter 1 tax for each reviewed year partner for the reporting year was
Section 206(e) of the TTCA amended section 6226(b) to provide that, when a reviewed year partner takes into account the adjustments under section 6226(b), the partner's chapter 1 tax for the reporting year is adjusted by the amounts the partner's chapter 1 tax for the first affected year or any intervening year would increase or decrease if the partner's share of the adjustments were taken into account in the first affected year. The TTCA amendments to section 6226(b) were adopted in the August 2018 NPRM. Proposed § 301.6226-3(b), as revised in the August 2018 NPRM, provided that each reviewed year partner's chapter 1 tax for the reporting year is increased or decreased by the additional reporting year tax, as appropriate. Under proposed § 301.6226-3(b)(2) and (3), the correction amounts are the amounts by which the partner's chapter 1 tax would increase or decrease if the partner's taxable income for that year were recomputed by taking into account the partner's share of the partnership adjustments. Under proposed § 301.6226-3(b)(1), as revised, a correction amount for the first affected year or any intervening year may be less than zero, and any correction amount less than zero may reduce any other correction amount.
The final regulations under § 301.6226-3(b)(1) were further revised to provide that nothing in § 301.6226-3 entitles any partner to a refund of tax imposed by chapter 1 to which such partner is not entitled. This language clarifies that the rules under section 6226 and 6227 are consistent insofar as those rules concern the ability of a partner to claim a refund of an overpayment when taking into account partnership adjustments. See § 301.6227-3(b)(1). Whether an overpayment exists is determined by the Code and existing law outside the scope of these regulations. See section 5.D. of this preamble for further discussion.
Proposed § 301.6226-3(b)(2) and (3) provided that when computing a correction amount for the first affected year or any intervening year, partners should account for the amount of tax shown on an amended return for such year, “including an amended return filed, or alternative to an amended return submitted, under section 6225(c)(2) by a reviewed year partner.” The final regulations under § 301.6226-3(b)(2) and (3) remove the language referring to the alternative procedure for filing amended returns under section 6225(c)(2). Amounts assessed based on submissions under the alternative procedure more appropriately fall within the amounts described in § 301.6226-3(b)(2)(ii)(B) and (b)(3)(ii)(B). Accordingly, treating such amounts as akin to amounts shown on amended returns could have led to inaccurate correction amounts. As such, the final regulations under § 301.6226-3(b)(2)(ii)(B) and (b)(3)(ii)(B) have been revised to clarify that the amounts under those provisions include not only the amounts described in § 1.6664-2(d), but also any amounts not included on the return of a partner which are assessed against and collected from the partners. Such amounts include amounts paid as part of modification under § 301.6225-2, including under the alternative procedure or in accordance with a closing agreement. Such amounts do not include, however, any amounts paid with an amended return filed as part of modification because those amounts are included with the amounts shown on a return or amended return under § 301.6226-3(b)(2)(ii)(A) and (b)(3)(ii)(A).
Several comments received prior to the TTCA amendments recommended that the calculation of the additional reporting year tax under former proposed § 301.6226-3(b) be revised to account for potential decreases to a reviewed year partner's chapter 1 tax had the adjustments been taken into account. Certain comments stressed that it was critical for taxpayers to receive symmetrical treatment under section 6226 with respect to adjustments for overpayments or other adjustments that would serve to reduce the additional reporting year tax. One comment suggested that a decrease in tax in one year as a result of the adjustments should be able to reduce the additional tax payable with respect to any other taxable year. One comment specifically recommended that former proposed § 301.6226-3(b) be revised to provide that the correction amount for a partner is the amount by which the reviewed year partner's chapter 1 tax would increase or decrease for the first affected year and all intervening years.
The plain language of section 6226(b), as amended by the TTCA, and proposed § 301.6226-3(a) and (b), as revised in the August 2018 NPRM, make clear that any decreases in tax that result from taking into account the adjustments can produce a correction amount, and in
Another comment recommended that the regulations clarify how information would be communicated to reviewed year partners to calculate a correction amount under section 6226(b)(2)(B) for an intervening year and suggested that partners calculate only the
Consistent with section 6226(b)(2)(B), proposed § 301.6226-3(b)(3) provided that a correction amount for an intervening year is the amount the partner's chapter 1 tax for such year would increase or decrease after taking into account any adjustments to tax attributes that resulted from taking into account the partnership adjustments in the first affected year. Accordingly, in order to determine an intervening year correction amount, the partner needs to know the partnership adjustments for the reviewed year, which is information provided on the push out statement furnished to the partner. See § 301.6226-2(e). No changes were made to the regulation to respond to the comment's request for clarification on this point. Regarding the comment's suggestion that the correction amount for any intervening year be calculated by reference to the partner's net increase in tax, the rule under § 301.6226-3(b)(3) accommodates this suggestion because it accounts for both increases and decreases that would have occurred in an intervening year. Therefore, no changes were made to the regulations in response to this suggestion.
The comment also recommended that the regulations provide that each partner calculates the correction amounts as though drafting an amended return and that such calculation should be based on generally applicable rules under the Code. The plain language of proposed § 301.6226-3(b)(2) and (3) provided precise rules for calculating the correction amounts. Those rules are consistent with how underpayments and overpayments are generally calculated elsewhere in the Code and regulations and thus provide for the method the comment recommended. See, for example, § 1.6664-2. Forms and instructions will provide additional guidance for partners in computing correction amounts and the additional reporting year tax. Providing this additional guidance through forms and instructions allows for both the IRS and taxpayers to gain experience with those documents and to recommend and to make changes, as necessary and appropriate, without needing to amend the regulations. This informal guidance process preserves government resources and expedites the process by which the IRS can respond to taxpayer needs and by which taxpayers are made aware of changes in IRS procedures. Accordingly, no changes were made to the regulations in response to this comment.
Two comments observed that an audit under the centralized partnership audit regime may be concluded after the statute of limitations for amending partner returns has expired. The comments recommended that the statute of limitations should be automatically extended to allow partners time to file an amended return and claim a refund.
To the extent these comments were concerned about the inability to benefit from any decreases in tax that would have resulted from taking into account the adjustments under section 6226(b), those concerns are addressed by proposed § 301.6226-3(b) as revised in the August 2018 NPRM. As discussed earlier in this section of this preamble, the plain language of § 301.6226-3(b) allows partners to account for increases and decreases that would have resulted in the first affected year or any intervening year were the adjustments taken into account in those years.
To the extent the comment was addressing seeking refunds via amended returns outside the push out process, § 301.6225-2(d)(2) allows for modification of the imputed underpayment via partner amended returns for taxable years for which the period of limitations would otherwise be expired. See section 6225(c)(2)(D). To the extent the comment was seeking a mandatory extension of all partner (direct and indirect) statutes of limitation to file amended returns and claim a refund, it is not in the interests of sound tax administration to provide for automatic extensions where other mechanisms provide adequate remedies for taxpayers. Under both the push out process and the amended return modification procedures, partners may benefit from decreases in tax that result from partnership adjustments. Creating an additional automatic extension process to achieve the same results potentially leads to more administrative burden for the IRS without any tangible benefit for partners. Accordingly, the comments' recommendation for automatic extensions in order to file refund claims was not adopted.
Two comments suggested that the final regulations clarify whether a partner must calculate and pay any additional taxes due under chapters 2 and 2A of the Code when taking into account adjustments under section 6226(b). One comment specifically asked about the application of chapters 2 and 2A in the context of an election by the taxpayer to pay the safe harbor amount. Another comment asked about the consequences of failing to pay chapter 2 or 2A tax if the regulations imposed such a requirement.
First, regarding the comment specific to the safe harbor amount, the safe harbor amount was removed from the regulations in the December 2017 NPRM, no comments were received regarding its removal, and the final regulations do not include a safe harbor amount. Accordingly, inasmuch as this comment was concerned about the safe harbor amount, this comment was not adopted.
Regarding the other comments, section 6226(b)(1) provides that each partner's “tax imposed by chapter 1” shall be adjusted by the aggregate of the correction amounts determined under section 6226(b)(2). Both section 6226(b)(2)(A) and (B) describe the correction amounts as amounts by which the partner's “tax imposed under chapter 1” would increase if the partner's share of the adjustments were taken into account. Consistent with section 6226(b), proposed § 301.6226-3(b) provided that each partner's chapter 1 tax for the reporting year is increased or decreased by the amounts by which the partner's chapter 1 tax would increase or decrease were the adjustments taken into account. The plain language of the statute and the proposed regulations makes clear that a reviewed year partner only increases its chapter 1 reporting year tax by the aggregate of the correction amounts, which are calculated by reference to the amounts by which the partner's chapter 1 tax would increase or decrease for the first affected year or any intervening year. Therefore, no changes were made to § 301.6226-3(b) in response to this comment. Furthermore, because the regulations do not require payment of chapter 2 or 2A taxes when a partner takes into account adjustments under section 6226(b), the consequences of failing to pay those taxes is beyond the scope of the regulations.
Former proposed § 301.6226-3(a) provided that a reviewed year partner
One comment expressed concern with Example 1 under former proposed § 301.6226-3(g), particularly the result that a partner pays a penalty amount based on the amount of the partnership's imputed underpayment, rather than the amount of the partner's increased tax liability. The comment recommended the regulations clarify that penalties are not measured by reference to the imputed underpayment amount determined at the partnership level.
This comment was addressed by proposed § 301.6226-3(d), as revised in the December 2017 NPRM. As revised, proposed § 301.6226-3(d)(2) provided that a reviewed year partner calculates the amount of any penalty, addition to tax, or additional amount at the partner level by treating a correction amount determined under § 301.6226-3(b) as if it were an underpayment or understatement for the first affected year or intervening year, as applicable. If, after taking into account the partnership adjustments, the reviewed year partner did not have an underpayment, or had an underpayment that fell below the applicable threshold for the imposition of a penalty, no penalty would be due from the reviewed year partner. Proposed § 301.6226-3(d)(2). Accordingly, the proposed regulations make clear that a partner's penalty is not based on the imputed underpayment amount determined at the partnership level, as recommended by the comment. Example 1 under § 301.6226-3(h) was also revised to account for this rule change.
Former proposed § 301.6221(a)-1(c) had provided that any defense to any penalty, addition to tax, or additional amount must be raised by the partnership in the partnership-level proceeding, regardless of whether the defense was based on facts and circumstances relating to a person other than the partnership. As discussed in section 1.A of this preamble, former proposed § 301.6221(a)-1(c) was removed from the regulations in the December 2017 NPRM. As part of the revisions in the December 2017 NPRM, the regulations under section 6226 (former proposed § 301.6226-3(i)) were also revised to provide that the calculation of the partner's penalty amount in the case of a push out election is based on the characteristics of, and facts and circumstances applicable to, the reviewed year partner. In addition, a reviewed year partner claiming that a penalty, addition to tax, or additional amount is not due because of a partner-level defense may raise that defense, but must first pay the penalty and file a claim for refund for the reporting year. See proposed § 301.6226-3(d)(3), as revised in the August 2018 NPRM.
One comment recommended that the regulations clarify that a partnership that makes a push-out election will be able to avail itself of partner-level defenses at the partnership level. For the reasons discussed in section 8.A. of this preamble, this comment was not adopted. Under § 301.6233(a)-1(c)(1), a partner-level defense may not be raised in a proceeding of the partnership, including a partnership that makes an election under section 6226, except as otherwise provided in guidance prescribed by the IRS.
Two other comments recommended that the regulations should provide a mechanism for partners to raise partner-level defenses prior to assessment, rather than requiring the partner to first pay the penalty and then file a claim for refund to raise the partner-level defense. One comment specifically suggested that a partner could raise a partner-level defense in the push out context by submitting a statement supporting that defense with the partner's reporting year return. This comment further suggested that the requirement to pre-pay penalties is contrary to the procedures in place for similar scenarios involving amended returns and audit adjustments. These comments were not adopted.
First, to the extent the comment addresses procedures for amended returns and audit adjustments other than partnership adjustments, those procedures are beyond the scope of these regulations. The centralized partnership audit regime is a new set of procedures that does not have an existing parallel in other areas of procedural tax law, and, as such, other scenarios involving amended returns and audit adjustments are not sufficiently similar to provide a relevant baseline against which to determine how the centralized partnership audit procedures should be developed.
Second, under the centralized partnership audit regime, the applicability of penalties, additions to tax, and additional amounts that relate to partnership adjustments is determined at the partnership level. Section 6221(a). A push out statement furnished to a partner under § 301.6226-2 will include any penalties, additions to tax, or additional amounts determined at the partnership level that are applicable to the adjustments pushed out to that partner. The applicability of such penalties, additions to tax, and additional amounts as set forth in the push out statement furnished to the partner are binding on the partner pursuant to section 6223. See § 301.6226-1(e). Therefore, when taking into account the pushed out adjustments, the applicability of any penalties related to those adjustments has already been determined. The imposition and amount of the penalty is determined only upon the partner calculating the additional reporting year tax (or imputed underpayment in the case of pass-through partners) and applying any relevant threshold amounts.
Because the IRS has already determined that a penalty applies, it is contrary to the interests of sound tax administration to allow partners to argue they are not liable for the penalty based on partner-specific reasons without first requiring payment of the penalty. Allowing a partner to raise a partner-level defense without prepaying the penalty would require the IRS to check each reviewed year partner's return to see if a penalty defense was properly raised and open up an examination of the partner to determine the validity of the defense. Such a process would frustrate the collection of the penalties, the applicability of which was already determined at the partnership level in an examination. Requiring pre-payment of penalties before defenses are raised ensures that partners raise only colorable penalty defense claims. For those that do not have such claims, it will ensure immediate collection of the appropriate amount of penalties.
One comment observed that, as a practical matter, it is unclear how a limited partner would dispute penalties determined at the partnership level, particularly because the partner may have no or limited information of actions at the partnership level or
Proposed § 301.6226-3(d)(3) defined partner-level defenses as those defenses that are personal to the reviewed year partner and based on the facts and circumstances applicable to that partner (for example, a reasonable cause and good faith defense under section 6664(c) based on facts specific to a particular partner). Limited partners will have an opportunity to raise defenses specific to their facts and circumstances. The partners (limited partner or otherwise) should have all of the information needed to adequately raise a partner-level defense because that defense is based on the facts and circumstances applicable to the specific partner raising the defense. The partner does not need new information regarding partnership-level actions or control over partnership-level information that the partner did not have access to at the time it took a position on its return reflecting the items from the partnership subject to penalty. The centralized partnership audit regime does not alter the existing law under the Code, regulations, or applicable case law relating to reasonable cause and good faith determinations. Furthermore, as discussed in section 8.A of the preamble, any defense that is based on the conduct or actions of the partnership is a partnership-level defense that must be raised by the partnership during the partnership proceeding. See proposed § 301.6233(a)-1(c)(2)(v).
One comment recommended that the partnership have the option of paying penalties at the partnership level while pushing out the partnership adjustments to its partners. The comment noted that pushing out penalties may require long and complex explanations regarding why the penalties apply, which could be burdensome to the partnership, partners, and the IRS, and may cause friction among the partners.
Section 6226(c)(1) provides that any penalties, additions to tax, or additional amounts shall be determined as provided under section 6221, and the partners of the partnership for the reviewed year shall be liable for any such penalty, addition to tax, or additional amount. If the partnership were to pay any penalties, additions to tax, or additional amounts in lieu of pushing out those amounts to its partners, the payment would be a payment towards the liability of the partners, not the partnership. The ability of a person to make a payment towards another's tax liability currently exists outside of the centralized partnership audit regime, and the regime does not alter or affect this ability. The partnership and its partners may enter into a business arrangement whereby the partnership makes a payment towards the partner's penalty liabilities, or whereby the partnership remits an amount to each partner to compensate for any potential penalties, additions to tax, or additional amounts. Nothing in the regulations under § 301.6226-3 would disturb those types of arrangements.
At the same time, the regulations do not provide a specific method for making such payments. Creating and monitoring a separate system to allow for partnerships to pay penalties on behalf of its partners would be burdensome for the IRS, partnerships, and partners. As discussed earlier in this section of the preamble, under proposed § 301.6226-3(d)(2) a partner's penalty amount is calculated based on the facts and circumstances unique to each partner. For the partnership to fully pay the amount of penalties owed by its partners, the partnership would need to obtain detailed information about each partner's personal tax situation, which is burdensome for the partnership and potentially invasive to the partners. This information would also have to be transmitted to the IRS to verify the correct penalty amount was paid and reflected in each partner's account. For these reasons, this comment was not adopted.
Another comment similarly suggested that the IRS create a process by which the partnership could pay both interest and penalties on behalf of its foreign partners so that those foreign partners would not need to obtain a TIN to file a U.S. tax return to report and pay interest and penalties. The comment suggested that the IRS could require, as part of that process, the partnership to obtain documentation from the foreign partner authorizing the partnership to make the payment on the foreign partner's behalf. The comment also recommended that the regulations make clear such a payment would not preclude the partnership from making a push out election with respect to the adjustments. This comment was not adopted.
As discussed earlier in this section of this preamble, there are administrative difficulties involved with adopting a specific method for a partnership to determine and pay over to the IRS its partners' amounts of penalties and interest. Further, because penalties and interest are determined at the partner level, a partnership will generally not be able to pay the exact amount of penalties and interest due with respect to each foreign partner. Therefore, there would be no basis for waiving the filing requirement for a foreign partner under these circumstances, even in cases in which the partnership is able to satisfy the tax due at source. For these reasons, the comment's suggestion was not adopted and no changes were made to the regulations in response to the comment.
Section 6226(c)(2) provides that in the case of a push out election, interest shall be determined at the partner level from the due date of the return for the taxable year to which the increase in chapter 1 tax is attributable. Proposed § 301.6226-3(c)(1) provided that interest on each correction amount greater than zero is calculated from the due date (without extension) of the reviewed year partner's return for the applicable taxable year until the amount is paid. For purposes of calculating interest on any penalties, additions to tax, or additional amounts, proposed § 301.6226-3(c)(2) similarly provided that such interest is calculated from the due date (without extension) of the reviewed year partner's return for the applicable taxable year until the amount is paid.
One comment observed that section 6226(c)(2) is silent as to whether the due date of the return for the purpose of calculating interest is determined with or without regard to any extension of time for filing, and noted that the statute does not differentiate between interest on tax and interest on penalties and additions to tax. The comment recommended the regulations adopt a bifurcated approach under which interest would run on the correction amounts from the due date of the return without regard to extensions while interest on penalties would run from the due date of the return including any extensions. The comment observed a similar bifurcated approach exists for calculating interest on tax and certain penalties outside the partnership context.
After consideration, the Treasury Department and the IRS have adopted this comment to be consistent with the method of calculating interest on penalties outside of the centralized partnership audit regime pursuant to section 6601(e)(2)(B). Accordingly, § 301.6226-3(c)(2) now provides that
Section 6226(c)(2) provides that interest in the case of a section 6226 election is determined at the partner level, from the due date of the return for the taxable year to which the increase in chapter 1 tax is attributable, and at the underpayment rate under section 6621(a)(2) (substituting 5 percent for 3 percent). As explained in section 4.A of the preamble to the August 2018 NPRM, while the TTCA amended section 6226(b) to provide that both increases and decreases in chapter 1 tax are used in computing a partner's additional reporting year tax, the TTCA did not similarly amend the reference to “increases” in section 6226(c)(2). The result of the changes to section 6226 is that interest only applies to the increases in the chapter 1 tax that would have resulted from taking into account the partnership adjustments under section 6226. No provision under the centralized partnership audit regime provides for interest on a
One comment suggested that the final regulations clarify that the IRS will pay interest on any refunds issued on prior overpayments resulting from a taxpayer's statements filed under section 6226 with their reporting year return. The comment expressed the belief that the rule under section 6226(c)(2) is only intended to increase the normal statutory rate of interest imposed, not to exclude interest on overpayments.
The additional reporting year tax is calculated under section 6226(b)(2) by reference to the amount that a partner's chapter 1 tax “would” increase or decrease if the partner's share of adjustments “were taken into account” in the first affected year or in the case of an intervening year, the amount by which such tax would increase or decrease by reason of the adjustment to tax attributes. An adjustment to a tax attribute is any tax attribute which “would have been affected” if the adjustments “were taken into account” in the first affected year. Under the language of section 6226(b)(2) and (3), adjustments are not actually taken into account like they would be if an amended return was filed under § 301.6225-2(d)(2). Similarly, the increases or decreases do not actually occur as they would in the amended return context and tax attributes are not actually adjusted as part of this calculation. Accordingly, in the case of an increase in tax that would result in the first affected year or any intervening year if the adjustments were taken into account, no overpayment results for any year because there is an increase in tax, not a decrease. In the case of a decrease in tax that would result in the first affected year or any intervening year if the adjustments were taken into account, there is no overpayment because the determination of a decrease in tax is merely by reference to the relevant year to be taken into account as part of the total additional reporting year tax. Therefore, no overpayment interest is due and owing to the partner.
The June 2017 NPRM reserved on the issue of how a pass-through partner takes into account its share of adjustments reflected on a statement furnished to the pass-through partner under § 301.6226-2. In response to the June 2017 NPRM, multiple comments recommended that pass-through partners take into account adjustments by pushing out those adjustments to the next tier of partners and suggested approaches to achieve this result.
After careful consideration of those comments, the December 2017 NPRM adopted an approach that required a pass-through partner to take into account adjustments reflected on a push out statement by either furnishing statements to its own partners or by paying an amount calculated like an imputed underpayment with respect to the adjustments, plus any applicable penalties and interest. See former proposed § 301.6226-3(e)(1). The regulations created an iterative process under which any pass-through partner receiving a statement from another pass-through partner must also take into account the adjustments on the statement by furnishing statements to its own partners or paying an amount calculated like an imputed underpayment. Any ultimate, non-pass-through partner was required to take into account its share of the adjustments as if such partner was a reviewed year non-pass-through partner. If a pass-through partner failed to take into account the adjustments in accordance with former proposed § 301.6226-3(e)(1), the pass-through partner was required to pay an amount calculated like an imputed underpayment plus any applicable penalties and interest.
Section 204(a) of the TTCA added to the Code section 6226(b)(4), which provides that a partnership or S corporation that receives a statement under section 6226(a)(2) must file a partnership adjustment tracking report with the IRS and furnish statements under rules similar to the rules of section 6226(a)(2). If the partnership or S corporation fails to furnish such statements, the partnership or S corporation must compute and pay an imputed underpayment under rules similar to the rules of section 6225. The rules under former proposed § 301.6226-3(e) were revised in the August 2018 NPRM to reflect the amendment to section 6226(b)(4). See section 4.A. of the preamble to the August 2018 NPRM.
Three comments were received regarding proposed § 301.6226-3(e). The comments focused on three topics: (1) The statements furnished under proposed § 301.6226-3(e)(3); (2) the computation of an imputed underpayment under proposed § 301.6226-3(e)(4); and (3) the payment of the additional reporting year tax by affected partners in accordance with proposed § 301.6226-3(e)(4)(iv).
Proposed § 301.6226-3(e)(1) provided that each pass-through partner that is furnished a statement described in § 301.6226-2 with respect to adjustments of an audited partnership must file and furnish statements to its affected partners. Affected partners are persons that held an interest in the pass-through partner at any time during the taxable year of the pass-through partner to which the adjustments in the statement relate. Consistent with section 6226(b)(4)(B), proposed § 301.6226-3(e)(3)(ii) provided that a pass-through partner must furnish such statements no later than the extended due date for the return for the adjustment year of the audited partnership. One comment recommended that the regulations provide a process by which a pass-through partner could apply to the IRS for a discretionary short-term extension of the time period set out in proposed § 301.6226-3(e)(3)(ii). This extension would address exceptional or unusual circumstances in which a pass-through
Section 6226(b)(4)(B) expressly provides that statements under section 6226(b)(4)(A) “shall be furnished by not later than the due date for the return for the adjustment year of the audited partnership.” The statute does not provide for an extension beyond the extended due date of the adjustment year return. Under proposed § 301.6226-3(e)(3)(ii), the adjustment year return due date is the extended due date under section 6081 regardless of whether the audited partnership is required to file a return for the adjustment year or timely files a request for an extension under section 6081 and the regulations thereunder. As a threshold matter, the language of section 6226(b)(4)(B), providing that statements “shall be furnished not later than” the due date suggests that discretionary extensions are not permissible. Furthermore, the due date for furnishing statements to affected partners must be fixed for all pass-through partners for the IRS to ensure statements are furnished timely and payments are timely made. In addition, the ultimate affected partners are obligated to file and pay additional reporting year tax by the extended due date of the audited partnership. Extending the due date for furnishing statements to affected partners for any pass-through partner would cause delays for upper tier affected partners and potentially subject ultimate affected partners to penalties for filing or paying additional reporting year tax more than 30 days after the extended due date. Therefore, the regulations do not provide for discretionary extensions of the time period that was set forth in proposed § 301.6226-3(e)(3)(ii).
Another comment observed that the proposed regulations did not specify who at the IRS must receive the statements furnished by a pass-through partner and recommended that the final regulations clearly state to whom at the IRS pass-through partner statements should be directed. This comment was not adopted, but the regulations were revised to provide that a pass-through partner must file and furnish statements to its affected partners in accordance with forms, instructions, or other guidance prescribed by the IRS. Providing the method for filing and furnishing statements in forms, instructions, and other guidance provides the IRS with the flexibility to change the filing and furnishing procedures as appropriate and necessary without needing to amend the regulations. This flexibility is particularly important as the IRS gains experience with the centralized partnership audit regime. Flexibility also preserves government resources and will expedite the process for the IRS to respond to taxpayer needs and for taxpayers to be aware of changes in IRS procedures.
Under § 301.6226-3(e)(3)(iii), each statement furnished by a pass-through partner must include correct information concerning certain enumerated items. These items include the name and TIN of the affected partner to whom the statement is being furnished as well as any other information required by forms, instructions, and other guidance prescribed by the IRS. One comment suggested that the regulations should clarify whether a statement provided under proposed § 301.6226-3(e) would be effective without the TIN of the affected partner if the affected partner is a foreign person not otherwise required to obtain a TIN. The comment observed that foreign persons generally are not required to obtain a U.S. TIN, particularly if they will not claim the benefits of a U.S. tax treaty.
Proposed § 301.6226-3(e)(3)(iii) required each statement furnished by a pass-through partner to include the correct TIN of the affected partner. This information is critical to the administration of the push out regime because it allows the IRS to identify the person to whom the statement is furnished, and it provides the IRS with the ability to match the adjustments on that statement with the return filed by the affected partner. In response to this comment, however, the final regulations require that a push out statement furnished under § 301.6226-3(e) include the partner's TIN “or alternative form of identification as prescribed by forms, instructions, or other guidance.” See also § 301.6226-2(e) (imposing the same requirement for push out statements furnished to reviewed year partners). In addition, the election under § 301.6226-1 by the audited partnership must include the TIN “or alternative form of identification as prescribed by forms, instructions, or other guidance” for each reviewed year partner of the partnership. See § 301.6226-1(c)(3)(ii). The addition of the quoted language in each section contemplates that there may be situations in which an alternative form of identification for certain partners is warranted.
Accordingly, as the IRS gains experience with the centralized partnership audit regime, the IRS may allow for the use of an alternative form of identification through forms, instructions, or other guidance if the IRS determines such identification is appropriate for foreign persons. This flexibility gives the IRS and partnerships time to evaluate whether an alternative form of identification is administrable and beneficial without needing to amend the regulations to allow for alternative identification, which preserves government resources and expedites the process by which the IRS responds to taxpayer needs and taxpayers become aware of changes in IRS procedures.
The same comment also recommended that to the extent practicable, the IRS identify as soon as possible any additional information that may be required in additional forms, instructions, or other guidance for statements under § 301.6226-3(e)(3). The comment suggested regulations or drafts of forms or instructions could identify such additional information, which would allow partnerships to timely, completely, and accurately collect necessary data from partners to comply with requirements and avoid the risk that the IRS would deny a push out election due to incomplete or inaccurate or untimely data.
As discussed earlier in this section of the preamble, maintaining the ability to require additional information on forms, instructions, or other guidance gives the IRS the flexibility to adapt statements without having to amend the regulations. At the same time, the IRS recognizes the need of taxpayers to know of the information required to not jeopardize compliance with the regulations. The IRS plans to develop and release drafts of forms and instructions for public inspection as soon as possible.
In addition to the changes described earlier in this Summary of Comments and Explanation of Revisions, two other clarifying changes were made to § 301.6226-3. First, § 301.6226-3(e)(3)(iii)(M) was clarified to provide that the information required to be included in statements furnished to affected partners regarding the applicability of penalties, additions to tax, or additional amounts are the determinations made at the audited partnership level pertaining to the applicability of penalties, additions to tax, or additional amounts. This change reinforces the notion that the applicability of penalties is determined at the audited partnership level and that penalties attach to adjustments as they are pushed out through the tiers. An affected partner that pays an imputed underpayment or additional reporting year tax independently determines the amount of any penalty applicable to
In addition, § 301.6226-3(e)(4)(iv)(B) was clarified to provide that when determining interest on an imputed underpayment paid by a pass-through partner, the imputed underpayment is treated as if it were a correction amount for the first affected year. This change conforms the language in § 301.6226-3(e)(4)(iv)(B) with the language in § 301.6226-3(c) regarding interest on correction amounts.
If a pass-through partner does not furnish statements, the pass-through partner must compute and pay an imputed underpayment in accordance with proposed § 301.6226-3(e)(4). Section 6226(b)(4)(A)(ii)(II); proposed § 301.6226-3(e)(2). Pursuant to proposed § 301.6226-3(e)(4)(iii), this imputed underpayment is computed in the same manner as an imputed underpayment under section 6225 and § 301.6225-1. In calculating an imputed underpayment under proposed § 301.6226-3(e)(4)(iii), a modification is taken into account if it was approved by the IRS under § 301.6225-2 with respect to the pass-through partner (or any relevant partner holding its interest in the audited partnership through the pass-through partner) and it is reflected on the statement furnished to the pass-through partner. Any modification that was not approved by the IRS under § 301.6225-2 may not be taken into account. Proposed § 301.6226-3(e)(4)(iii).
One comment suggested that it was unclear under proposed § 301.6226-3(e)(4) whether a pass-through partner that elects to pay an imputed underpayment is only permitted to make modifications that are included on the information statement furnished to the pass-through partner or whether the pass-through partner also may make modifications based on the pass-through partner's own partners (to the extent such modification is not already reflected on the information statement). The comment recommended that the pass-through partner be permitted to make modifications based on its own partners to the extent the pass-through partner would be permitted to make modifications under section 6225 if it were the partnership directly under audit. This comment was not adopted.
Section 6226(b)(4)(A)(ii)(II) provides that a partnership may compute and pay an imputed underpayment under rules similar to the rules of section 6225 (other than section 6225(c)(2), (7), and (9)). Section 6226(b)(4)(A)(ii)(II) does not explicitly carve out section 6225(c)(8), which provides that any modification of the imputed underpayment amount under section 6225(c) shall be made only upon approval of such modification by the Secretary. Consistent with section 6225(c)(8), proposed § 301.6226-3(e)(4)(iii) only allows modifications approved by the IRS under proposed § 301.6225-2 to be taken into account in calculating an imputed underpayment with respect to a pass-through partner. Modifications approved by the IRS under § 301.6225-2 are only those modifications requested by the audited partnership and approved during the administrative proceeding with respect to the audited partnership. See § 301.6225-2(b). A pass-through partner may not use modifications that were not requested or approved in the administrative proceeding with respect to the audited partnership in calculating its imputed underpayment under proposed § 301.6226-3(e)(4).
Allowing a pass-through partner to apply modifications that were not previously requested or approved in calculating its imputed underpayment is contrary to the centralized nature of an administrative proceeding under the centralized partnership audit regime. Partnership adjustments are determined at the partnership level. Section 6221(a). The imputed underpayment is a partnership-related item and therefore modifications to the imputed underpayment are determined at the partnership level. The modification provisions under § 301.6225-2 are the appropriate method for determining whether and to what extent a modification should be allowed. Allowing pass-through partners to raise, for the first time, modifications during the push out is inconsistent with making such determinations at the partnership level. Allowing such modifications would create significant administrative burdens for the IRS. For one, the IRS would have to expend increased time and resources to review any modifications applied during push out that were not previously evaluated and approved during the modification process at the audited partnership level. This concern would be exacerbated in situations where there are multiple tiers of entities applying multiple types of additional modifications. For instance, a pass-through partner might raise again a modification that was rejected by the IRS at the audited partnership level during the modification process, causing further administrative delay and burden. Furthermore, if a modification applied by a pass-through partner was incorrectly applied, the IRS would have to expend time and resources to correct the incorrectly claimed modification, resulting in additional delays in the collection of amounts due as a result of the examination and the push out election.
Proposed § 301.6226-3(e)(3)(iv) provided that affected partners that are not pass-through partners must take into account their share of adjustments reflected on a statement furnished under proposed § 301.6226-3(e)(3) in accordance with proposed § 301.6226-3(e). When taking into account the adjustments, an affected partner that is not a pass-through partner bases its reporting year on the date the audited partnership furnished its statements to its reviewed year partners. As a result, the reporting year of an affected partner that is not a pass-through partner will be the same taxable year as the reporting year of a reviewed year partner that is also not a pass-through partner.
As discussed in section 1 of the Explanation of Provisions in the preamble to the December 2017 NPRM, there may be circumstances in which a statement is not furnished to an affected partner that is not a pass-through partner in time for the partner to report and pay the additional reporting year tax by the unextended due date of the partner's return for the reporting year. To account for this situation, proposed § 301.6226-3(e)(3)(iv) provided that the IRS will not impose any additions to tax under section 6651 related to any additional reporting year tax if an affected partner that is not a pass-through partner reports and pays any additional reporting year tax within 30 days of the extended due date for the return for the adjustment year of the audited partnership.
One comment recommended that the 30-day period under proposed § 301.6226-3(e)(3)(iv) should be extended to at least 60 days and that there be a mechanism for requesting and obtaining an extension of this deadline when needed. This comment was not adopted.
While it may be difficult to accurately compute and pay the additional reporting year tax in situations where the affected partner receives the statement close in time to the extended due date of the reporting year return, the affected partner has options available to mitigate any additions to tax under section 6651. First, the regulations under § 301.6226-3(e)(3)(iv) provide a 30-day period in which the IRS will not
Third, the affected partner may also request that any additions to tax under section 6651 be abated due to reasonable cause. Nothing in the regulations under the centralized partnership audit regime alters the mechanisms by which a taxpayer may raise a reasonable cause defense in response to a proposed penalty. Existing regulations under § 301.6651-1(c)(1) and the Internal Revenue Manual provide procedures for raising a reasonable cause defense to avoid an addition to tax under section 6651. If an addition to tax under section 6651 is asserted because a taxpayer did not pay the entire additional reporting year tax within 30 days of the extended due date of the audited partnership's adjustment year return, the taxpayer may follow those existing procedures to raise any reasonable cause and good faith defense that may be applicable to the taxpayer's delay in payment.
Proposed § 301.6226-3(b)(4) provided rules for qualified investment entities (QIEs), such as real estate investment trusts and regulated investment companies, to utilize the deficiency dividend procedures under section 860 when taking into account the adjustments under section 6226(b). One comment recommended that the Treasury Department and the IRS adopt the rules as proposed in § 301.6226-3(b)(4) without change in the final regulations. This comment was adopted.
Another comment recommended that in the case of an MLP, the safe harbor calculation for a partner should take into account the partner's share of specified passive activity losses within the meaning of section 6225(c)(5)(B). As discussed earlier in this section of the preamble, the safe harbor amount was removed from the regulations in the December 2017 NPRM, no comments were received regarding its removal, and the final regulations do not include a safe harbor amount. Accordingly, this comment was not adopted.
Proposed § 301.6226-3(h) provided examples that illustrated the rules of proposed § 301.6226-3. One comment recommended that additional examples be added to § 301.6226-3(h) to show the proper treatment of two situations. The first situation involved the IRS approving a modification based on a partner filing an amended return, the partnership challenging the IRS's adjustment in Tax Court, and the amount of the adjustment being subsequently reduced. The second situation involved the IRS determining at the partnership level a 20 percent accuracy-related penalty with respect to the partnership adjustments and the IRS approving a modification based on a partner's status as a tax-exempt entity. The comment suggested that the example illustrate how the amount of the penalty is calculated in this situation after allowance for the modification with respect to the tax-exempt entity and how the penalty is allocated among all partners, including the tax-exempt entity.
These hypotheticals were described within the portion of the comment addressing section 6226. Therefore, notwithstanding that the comment did not explicitly state that the partnership in the hypothetical made a push out election, for purposes of addressing these comments it is assumed that the partnership did make the push out election. After careful consideration, the Treasury Department and the IRS have declined to add these examples because, as described in this section of the preamble, both situations describe fact patterns that are addressed by a straight forward application of the proposed regulations, as revised in the December 2017 and August 2018 NPRMs, and thus the examples would not help clarify any aspect of the rules.
The first situation is addressed by proposed § 301.6226-3(b)(2) and (3), which provided that in calculating a correction amount, decreases in tax should be taken into account and that amounts shown on amended return filed during modification should be accounted for in the calculation. As described earlier in section C.i. of this preamble, proposed § 301.6226-3(b)(2) and (3) was revised in the August 2018 NPRM to reflect the amendments to section 6226(b) by the TTCA. As amended, section 6226(b) provides that when a reviewed year partner takes into account pushed out adjustments, the partner's chapter 1 tax for the reporting year is adjusted by the amounts the partner's chapter 1 tax for the first affected year or any intervening year would increase or decrease if the partner's share of the adjustments were taken into account in the first affected year. As a result, under proposed § 301.6226-3(b)(2) and (3) as revised in the August 2018 NPRM, a correction amount and the additional reporting year tax can be less than zero.
When the partner in the first hypothetical calculates the correction amount for the year that was amended, the partner recomputes its tax for the year by starting with the amount of tax shown on the amended return, which had been based on the full amount of the adjustment (prior to its reduction by the court decision). The partner then determines the amount the partner's chapter 1 tax would have increased
The second situation is addressed by proposed § 301.6226-3(d) as previously revised in the December 2017 NPRM. As discussed earlier in this section of the preamble, proposed § 301.6226-3(d)(2) provided that each reviewed year partner calculates its penalty amount by treating the correction amounts determined under § 301.6226-3(b) as if they were underpayments or understatements for the first affected year or any intervening year. This rule is different from the rule initially set forth in former proposed § 301.6226-2(f)(3). Under the former rule, to which the comment's recommendation related, each partner was allocated their share of the penalty that was calculated at the partnership level. Under the rule in proposed § 301.6226-3(d), however, a partner's penalty calculation is based on the characteristics of, and facts and circumstances applicable to, the reviewed year partner. Accordingly, while the applicability of the accuracy-related penalty in the second hypothetical described by the comment was determined at the partnership level, if as a result of taking into account the adjustments under § 301.6226-3(b), the tax-exempt entity would not have an underpayment or understatement for which a penalty was applicable, the penalty amount calculated by the tax-exempt entity pursuant to § 301.6226-3(d)(2) would be zero. Whether modification was requested or approved with the tax-exempt entity would not affect this determination.
The same comment also recommended adding an example to show the proper application of partner and partnership-level tax attributes to the calculation of a correction amount
Former proposed § 301.6241-1(a)(10) had defined the term tax attribute to include both the tax attributes of the partnership and the tax attributes of its partners. This definition was changed in the August 2018 NPRM to remove references to the partnership or the partner. This change allows “tax attribute” to apply to the partnership or to a partner depending on the particular context within which it is used. See section 11.A. of the preamble to the August 2018 NPRM. As a result, the definition of tax attribute in proposed § 301.6241-1(a)(10), as revised, did not refer to either the partnership or its partners.
Former proposed § 301.6226-3(b)(3) had provided that an intervening year correction amount was derived by recomputing a partner's taxable income by taking into account any adjustments to tax attributes. After the change to the definition to tax attribute, proposed § 301.6226-3(b)(3) was revised to make clear that in the context of calculating an intervening year correction amount, it is the “tax attributes of the partner” that are relevant, not the tax attributes of the partnership. As a result, under proposed § 301.6226-3(b)(3) as revised in the August 2018 NPRM, partnership-level tax attributes no longer factor into the calculation of an intervening year correction amount. See proposed § 301.6226-3(h), Example 7; section 4.A. of the preamble to the August 2018 NPRM. Given these revisions, an example showing the application of partnership-level tax attributes would no longer be accurate for computing an intervening correction amount under § 301.6226-3(b)(3).
The Treasury Department and the IRS have also declined to add an example illustrating the application of a partner's tax attributes to the calculation of its correction amount for an intervening year. Creating an example involving the tax attributes of a specific partner would necessitate a description of that particular partner's tax profile and would require a number of assumptions that would strip the example of its utility.
Example 5 of proposed § 301.6226-3(h) described a situation in which the IRS determines a $200 partnership adjustment with respect to taxable year 2020 and a resulting $40 imputed underpayment. During the modification process, Partner F files amended returns for 2020, 2021, and 2022 taking into account F's share of the $200 partnership adjustment, and the IRS approves that modification. See § 301.6225-2(d)(2). The partnership elects to make a push out election with respect to the $40 imputed underpayment and furnishes a statement to F reflecting F's share of the $200 partnership adjustment and reflecting the approval of F's amended return modification.
Former proposed § 301.6226-3(g) had provided that F computes its correction amounts for the first affected year and the intervening years and that F “computes any additional chapter 1 tax for those years using the returns for 2020, 2021, and 2022 taxable years as amended during the modification process.” One comment found the quoted language ambiguous and recommended the language be revised to provide that “F's computation will take into account the additional chapter 1 tax that F reported and paid pursuant to the modification process on amended returns for the 2020, 2021, and 2022 taxable years.” This comment has been adopted.
Although F takes into account the chapter 1 tax F reported and paid with its amended returns, F still must compute the correction amounts for each year under § 301.6226-3(b). F cannot assume F's additional reporting year tax is zero because of the fact F filed an amended return and took into account the adjustments during the modification process. For example, F may have inadvertently taken the adjustments into account incorrectly when filing its amended returns or filed a subsequent amended return, and as a result F may compute an additional reporting year tax that is greater than (or possibly less than) zero when F performs the calculation under § 301.6226-3(b) for the reporting year.
The comment also recommended changing the language “[t]he time to file a petition expires on” in Examples 2-4 and 6-9 under proposed § 301.6226-3(h) to “[t]he last day to file a petition is.” Under § 301.6226-2(b)(1)(i), if a petition is not filed under section 6234, the adjustments become finally determined upon the expiration of the time to file a petition under section 6234. Although this is determined in relation to the last day to file a petition under section 6234, the language in the examples mirrors the regulatory language under § 301.6226-2(b)(1)(i). Changing the language in the examples to differ from the language in the rule could create confusion and ambiguity. Accordingly, this comment was not adopted.
Lastly, several comments noted typographical errors and incorrect cross-references in the examples under former proposed § 301.6226-3. These errors were fixed in proposed § 301.6226-3(h). See section 4.B. of the preamble to the August 2018 NPRM.
Four comments were received concerning administrative adjustment requests under section 6227. The comments addressed the following topics: (1) The requirement that the partnership representative must sign an AAR; (2) the ability to report multiple imputed underpayments in a single AAR; (3) the modifications available in the case of an AAR; (4) how partners take into account adjustments requested in an AAR; (5) the availability of the safe harbor amount; (6) the application of section 905(c); and (7) how partnerships that have elected out of the centralized partnership audit regime file amended returns. In addition to addressing the comments, this section of the preamble explains a change to the rules regarding whether an AAR is valid if it fails to include required statements and interest with respect to imputed underpayments reported on an AAR.
Proposed § 301.6227-1(c) provided the form and manner for making an AAR under the centralized partnership audit regime, including the rule that an AAR must be signed under penalties of perjury by the partnership representative. One comment recommended that the regulations remove the requirement that the partnership representative sign an AAR and instead allow any person authorized to sign the original partnership return to sign the AAR. This comment was not adopted.
Under section 6223(b), the partnership and all partners of such partnership are bound by actions taken under the centralized partnership audit regime by the partnership. See § 301.6223-2(a). The filing of an AAR under section 6227 is an action under the centralized partnership audit regime. Under section 6223(a), the partnership representative has the sole authority to act on behalf of the partnership under the centralized partnership audit regime. Consequently, only the partnership representative has the authority to file an AAR under section 6227, and the final regulations maintain the requirement that the partnership representative sign an AAR.
The comment expressed concern that, in some circumstances, obtaining the signature of the partnership representative could be difficult or impossible. For example, if the partnership representative is deceased or where a partnership representative
Proposed § 301.6227-1(a) provided that when the partnership changes the designation of the partnership representative in conjunction with the filing of an AAR in accordance with § 301.6223-1(e), the change in designation is treated as occurring prior to the filing of the AAR. Under this rule, the prior partnership representative is revoked and a new partnership representative is designated prior to the time the AAR is filed, with the result that the newly designated partnership representative is the partnership representative of record at the time the AAR is filed. This rule was designed to address the circumstances described by the comment when it may be difficult to obtain the signature of the prior partnership representative and to make clear that it is the newly designated partnership representative that signs an AAR. Because § 301.6227-1(a), in connection with the regulations under section 6223, adequately address the concerns raised by the comment, the comment was not adopted.
Proposed § 301.6227-1(a) provided that when filing an AAR, the partnership must determine whether the adjustments requested in the AAR result in an imputed underpayment. Under proposed § 301.6227-2(a)(1), the determination of whether adjustments requested in an AAR result in an imputed underpayment and the determination of the amount of the imputed underpayment is made in accordance with the rules under § 301.6225-1. Generally, a partnership must pay any imputed underpayment determined under § 301.6227-2(a) resulting from the adjustments requested in an AAR on the date the partnership files the AAR. Proposed § 301.6227-2(b). In lieu of paying the imputed underpayment under § 301.6227-2(b), the partnership may elect to have each reviewed year partner take into account the adjustments requested in the AAR in accordance with § 301.6227-3. Proposed § 301.6227-2(c).
One comment observed that it was unclear whether the references to “
Neither section 6227 nor the regulations thereunder prohibit a partnership from filing multiple AARs for the same taxable year to request multiple adjustments to partnership-related items. To allow the IRS to respond to issues that arise in implementing the new partnership audit regime, proposed § 301.6227-1(c) required that an AAR must be filed with the IRS in accordance with the forms, instructions, and other guidance prescribed by the IRS. The current version of the form prescribed by the IRS for filing an AAR is not designed to accommodate the reporting of multiple imputed underpayments. A partnership may file multiple AARs to allocate adjustments into separate imputed underpayments. For example, the partnership may file one AAR reporting an imputed underpayment that the partnership pays, while filing another AAR reporting an imputed underpayment for which the partnership elects to push out the adjustments associated with that imputed underpayment. Accordingly, a partnership, by filing multiple AARs, can achieve the result requested by the comment—that is, the ability to pay an imputed underpayment with respect to certain adjustments and push out other adjustments associated with a different imputed underpayment.
In response to the comment, the regulations have been revised to refer to “an” or “any” imputed underpayment, as appropriate, to accommodate future cases in which an AAR may result in more than one imputed underpayment. In addition, §§ 301.6227-2(c) and 301.6227-3(a) have been revised to clarify that in the case of an election to have the reviewed year partners take into account the adjustments in an AAR, such partners take into account only those adjustments that are associated with the imputed underpayment to which the election relates. Notwithstanding these revisions, the regulations continue to refer to the form for filing an AAR and its instructions for purposes of instructing how a partnership requests adjustments in an AAR that result in an imputed underpayment.
Proposed § 301.6227-2(a)(2) provided that a partnership may apply modifications to the amount of the imputed underpayment determined under proposed § 301.6227-2(a)(1) using only certain, enumerated modifications as described in proposed § 301.6225-2 or as provided in forms, instructions, or other guidance prescribed by the IRS with respect to AARs. A partnership may not modify an imputed underpayment resulting from adjustments requested in an AAR except as described in proposed § 301.6227-2(a)(2).
Proposed § 301.6225-2(d)(10) provided a catch-all provision for other modifications under which a partnership may request a modification not described in proposed § 301.6225-2(d), and the IRS will determine whether such modification is accurate and appropriate. Similarly, proposed § 301.6225-2(d)(10) provided that additional types of modifications, and the documentation necessary to substantiate such modifications, may be set forth in forms, instructions, or other guidance.
One comment suggested that the regulations should be more flexible regarding the types of modifications that are allowed in the case of an AAR. Specifically, the comment recommended that proposed § 301.6227-2(a)(2) be revised to allow for the catch-all provision under proposed § 301.6225-2(d)(10) on the condition that the IRS approves of the relevant modification upon review of the AAR. This comment was not adopted.
Both proposed § 301.6225-2(d)(10), in the context of an audit, and proposed § 301.6227-2(a)(2), in the context of an AAR, provide that the IRS may set forth additional modifications in forms, instructions, or other guidance. To the extent the comment was recommending that adoption of the § 301.6225-2(d)(10) catch-all provision in § 301.6227-2(a)(2) would allow the IRS to set forth other modifications not specifically described in proposed § 301.6227-2(a)(2), that ability is already provided for by the plain language of § 301.6227-2(a)(2).
To the extent the comment was recommending a rule in which a partnership could request a
Because the partnership applies modifications prior to the IRS reviewing and approving such modifications, the specifically enumerated modifications in the regulations are limited to the types of modifications for which the IRS already has procedures and systems in place. This permits the IRS, when it reviews an AAR, to utilize those procedures and systems to determine the accuracy and appropriateness of the modification that was applied in the AAR. The limitation on the types of modifications, in addition to the detailed information required under § 301.6227-2(a)(2)(ii), is designed to provide partnerships the ability to reasonably modify an imputed underpayment resulting from adjustments requested in an AAR while not creating undue delay for the partnership and its partners to take the adjustments into account. Also, by providing certainty regarding the permissible types of modifications, a partnership will be able to efficiently use its time and resources in determining whether it will pay an imputed underpayment or elect to have its partners take into account the adjustments. Finally, as the IRS gains more experience with modifications in connection with an AAR under the centralized partnership audit regime, § 301.6227-2(a)(2) provides the ability for the IRS to expand the set of allowed modifications through the use of forms, instructions, or other guidance.
Former proposed § 301.6227-3 included a reserved paragraph regarding how a reviewed year partner that is a pass-through partner takes into account its share of adjustments requested in an AAR. In response to the June 2017 NRPM, one comment recommended that the regulations should allow a pass-through partner to push out its share of adjustments to the next tier of partners. The December 2017 NPRM contained proposed rules under § 301.6227-3 allowing for pass-through partners to take into account adjustments requested in an AAR by either making a payment or pushing out the adjustments to the next tier of partners, similar to the rules under proposed § 301.6226-3(e). The rules under proposed § 301.6227-3 were further revised in the August 2018 NPRM to reflect the amendments by section 204 of the TTCA and the corresponding changes to proposed § 301.6226-3(e). See section 5 of the preamble to the August 2018 NPRM. As a result, the comment was adopted in the August 2018 NPRM and is also included in the final regulations.
Example 2 under proposed § 301.6227-3(b)(2), regarding how partners other than pass-through partners take into account AAR adjustments, was revised to remove the language indicating that the partner may make a claim for refund with respect to the overpayment of $25. Instead, the final regulations provide that the partner may make a claim for refund with respect to “any overpayment.” Section 301.6227-3(b)(1) provides that nothing in the rules under § 301.6227-3 entitles any partner to a refund of chapter 1 tax to which such partner is not entitled. Whether an overpayment exists is determined under provisions of the Code and relevant case law outside the scope of these regulations. Generally, an overpayment and the amount of a refund of an overpayment cannot exceed the amount of tax paid. See section 6511(b)(2),
Example 2 was also revised to clarify that the partner's chapter 1 tax for 2022 is −$25, that is, negative $25. This change conforms Example 2 to the rules under § 301.6226-3(b) which allow for the additional reporting year tax to reduce a partner's chapter 1 tax for the reporting year.
Finally, minor revisions were made to clarify that any adjustment that does not result in an imputed underpayment is taken into account by reviewed year partners.
The June 2017 NPRM requested comments on whether the election to pay a safe harbor amount under former proposed § 301.6226-3 should be available in the case of a partner that must take into account adjustments requested in an AAR under proposed § 301.6227-3. One comment recommended that the regulations require a partnership filing an AAR to calculate a safe harbor amount for each partner required to take into account the adjustments requested in the AAR and include such safe harbor amount in the statement furnished to the partner.
For the reasons discussed in section 4 of the preamble to the December 2017 NPRM, the safe harbor amount was removed from the regulations. No comments were received regarding its removal, and the final regulations do not include a safe harbor amount. Accordingly, this comment was not adopted.
One comment recommended rules for how a partnership subject to the centralized partnership audit regime can fulfill the requirements of section 905(c), including the rules relating to the assessment and collection of interest on certain refunds of creditable foreign taxes. The final regulations under section 6227 do not provide rules regarding the application of section 905(c), but do include a reserved paragraph regarding notice of change to amounts of creditable foreign tax expenditures. See § 301.6227-1(g). The recommendations put forth by the comment remain under consideration.
One comment suggested that the regulations address how a partnership that has a valid election under section 6221(b) in effect for a particular taxable year should report changes to its original partnership return from that year. Section 6227 is the mechanism for partnerships that are subject to the centralized partnership audit regime to file an AAR to correct errors on a partnership for a prior year. A
Proposed § 301.6227-1(c)(2) provided that a valid AAR must include the adjustments requested, the statements described in § 301.6227-1(e) if a reviewed year partner is required to take into account the adjustments requested, and other information prescribed by the IRS in forms, instructions, or other guidance. The final regulations clarify that in the case of a failure to provide the information required under § 301.6227-1(c)(2), the IRS may, but is not required to, invalidate an AAR or readjust items that were adjusted in the AAR.
Conversely, the word “valid” was added to § 301.6227-2(b)(1) to clarify that only a valid election under § 301.6227-2(c) turns off the partnership's obligation to pay an imputed underpayment resulting from adjustments requested in an AAR.
Under § 301.6225-1(f)(1), two situations occur where there may be adjustments that do not result in an imputed underpayment. Under § 301.6225-1(f)(1)(i), a partnership adjustment does not result in an imputed underpayment if the result of netting with respect to any grouping or subgrouping that includes the particular partnership adjustment is a net negative adjustment. Under § 301.6225-1(f)(1)(ii), a partnership adjustment does not result in an imputed underpayment if the calculation under § 301.6225-1(b)(1) resulted in an amount that is zero or less than zero. Proposed § 301.6227-3(c)(2) provided rules regarding how a pass-through partner takes into account adjustments that do not result in an imputed underpayment. The proposed rule was unclear as to whether the rule applied to both types of situations. The final regulations under § 301.6227-3(c)(2) clarify that a pass-through partner must take into account AAR adjustments that, with respect to that pass-through partner, do not result in an imputed underpayment by furnishing statements to its affected partners. This rule applies to both adjustments that do not result in an imputed underpayment pursuant to § 301.6225-1(f)(1)(i) and adjustments that do not result in an imputed underpayment pursuant to § 301.6225-1(f)(1)(ii). This rule also applies in situations where the pass-through partner pays an imputed underpayment. The final regulations under § 301.6227-1(e)(2) additionally clarify that when a partnership pays an imputed underpayment and there are adjustments that did not result in that imputed underpayment pursuant to § 301.6225-1(f)(1)(i), only the adjustments that did not result in an imputed underpayment are to be included in the statements to its affected partners.
Proposed § 301.6227-2(b)(2) provided that interest on an imputed underpayment resulting from adjustments requested in an AAR is determined under chapter 67 of the Code for the period beginning on the date after the due date of the partnership return for the reviewed year (determined without regard to extension) and ending on the earlier of the date payment of the imputed underpayment is made, or the due date of the partnership return for the adjustment year. In the case of any failure to pay an imputed underpayment by the due date of the partnership return for the adjustment year, interest is determined in accordance with section 6233(b)(2). Proposed § 301.6227-2(b)(2).
To conform the rules under proposed § 301.6227-2(b)(2) with the rules under proposed §§ 301.6232-1(b), 301.6233(a)-1(b), and 301.6233(b)-1(c), the final regulations provide that interest on an imputed underpayment resulting from adjustments requested in an AAR ends on the date the AAR is filed. In the case of any failure to pay an imputed underpayment on the date the AAR is filed, interest is determined in accordance with section 6233(b)(2) and § 301.6233(b)-1(c).
Former proposed § 301.6231-1(b)(1) provided that a notice of proposed partnership adjustment (NOPPA) is timely if it is mailed before the expiration of the period for making adjustments under section 6235(a)(1), including any extensions of that period under section 6235(b) and after applying any of the special rules in section 6235(c). After former proposed § 301.6231-1(b)(1) was issued, section 206(h) of the TTCA amended section 6231(b) to provide that a NOPPA shall not be mailed later than the date determined under section 6235(a)(1). Prior to this amendment, the statute did not limit the period for the IRS to propose adjustments under the centralized partnership audit regime. Because former proposed § 301.6231-1 comported with the TTCA amendments to section 6231, former proposed § 301.6231-1 was not revised when the regulations were re-proposed in the August 2018 NPRM.
One comment received prior to the issuance of former proposed § 301.6231-1 and before the TTCA amendments to section 6231(b) recommended that the regulations clarify that a NOPPA must be issued within the three-year period specified in section 6235(a)(1). Because the statute and the plain language of proposed § 301.6231-1 reflect the rule suggested by this comment, the final regulations adopt the language of the proposed regulations without change.
Section 6227(c) provides that a partnership has three years from the later of the filing of the partnership return or the due date of the partnership return (excluding extensions) to file an AAR for a taxable year. However, a partnership may not file an AAR for a partnership taxable year after the IRS has mailed a NAP under section 6231 with respect to that taxable year. Section 6227(c); § 301.6227-1(b). Proposed § 301.6231-1(f) provided that the IRS may, without consent of the partnership, withdraw any NAP or NOPPA, and any NAP or NOPPA that has been withdrawn by the IRS has no effect for purposes of subchapter C of chapter 63. If the IRS withdraws a NAP with respect to a partnership taxable year under proposed § 301.6231-1(f), the prohibition under section 6227(c) on filing an AAR after the mailing of a NAP no longer applies with respect to such taxable year.
One comment stated that the rule under proposed § 301.6231-1(f) lifting the prohibition on filing an AAR after a NAP is meaningless if the three-year period of limitations under section 6227(c) to file an AAR has already expired. The comment suggested that the language in proposed § 301.6231-1(f) be revised to provide that a NAP that has been withdrawn by the IRS has no effect for purposes of subchapter C or chapter 63 “except for suspension of the period of limitations under section 6227 as provided in § 301.6227-1(b).” The comment suggested a corresponding change to proposed § 301.6227-1(b) to provide that the
First, section 6227 does not authorize the Treasury Department or the IRS to suspend the period of limitations within which a partnership may file an AAR. By way of contrast, other statutory provisions within subchapter C of chapter 63, such as section 6235(b) and section 6225(c)(7), do provide authority for the IRS to extend certain time periods. The absence of similar authority in section 6227 indicates the IRS does not have the authority to suspend the period of limitations under section 6227(c).
Moreover, because of the required timing of an examination under the centralized partnership audit regime, it is likely that in many cases when a NAP is withdrawn, there will still be time left on the period of limitations to file a timely AAR. In order for a NOPPA to be timely mailed, it generally must be issued within three years of the date on which the partnership return for such taxable year was filed or the return due date for the taxable year. Section 6235(a)(1). To allow for sufficient time to examine the partnership taxable year and to mail a timely NOPPA, the IRS will normally mail the NAP early on in that three-year period.
The period for filing a timely AAR under section 6227(c) runs concurrently with the three-year period for mailing a NOPPA. If after the issuance of the NAP a partnership finds that it agrees with the adjustments the IRS has raised with the partnership during the examination, the partnership may also find that it is more efficient for both the partnership and the IRS to file an AAR, rather than have those adjustments be made in the context of the partnership-level exam. In such a case, the partnership may inform the IRS of its desire to file an AAR, and the IRS can determine whether it is appropriate, in the view of the IRS, to withdraw the NAP in light of all of the facts and circumstances. It is incumbent upon the partnership to inform the IRS of its desire to file an AAR at the earliest possible point in the exam to ensure the NAP can be withdrawn with sufficient time in the section 6227(c) period to file an AAR.
Proposed § 301.6231-1(f) provided that a NAP that has been withdrawn by the IRS has no effect for purposes of subchapter C of chapter 63. Under § 301.6223-1(d)(2) and (e)(2), however, if the IRS withdraws a NAP pursuant to § 301.6231-1(f), any valid resignation or revocation of a partnership representative designation or designated individual appointment prior to the withdrawal of the NAP remains in effect. To conform these two sets of rules, the final regulations under § 301.6231-1(f) clarify that a withdrawn NAP has no effect for purposes of subchapter C of chapter 63 except as described in § 301.6223-1(d)(2) and (e)(2).
In addition, proposed § 301.6231-1(f) was revised to clarify that if the IRS withdraws a NAP or NOPPA, the NAP or NOPPA is treated as if it were never issued, in addition to the NAP or NOPPA not having any effect for purposes of subchapter C of chapter 63. This change conforms the language of the final regulations under § 301.6231-1(f) more closely with the language of section 6227(c).
Lastly, the final regulations under § 301.6231-1(f) clarify that the withdrawal of a NAP or NOPPA obviates the limitation under § 301.6222-1(c)(5) providing that a partner may not treat an item inconsistently after a NAP has been mailed with respect to a partnership taxable year. This change clarifies that if the IRS withdraws a NAP, a partner may treat an item inconsistently from how the item was treated on the partnership return after the withdrawal of the NAP.
Proposed § 301.6232-1(d)(1)(i) provided that a notice to a partnership that, on account of a mathematical or clerical error appearing on the partnership return or as a result of a failure by a partnership-partner to comply with section 6222(a), the IRS has adjusted or will adjust partnership-related items to correct the error or to make the items consistent under section 6222(a) and has assessed or will assess any imputed underpayment resulting from the adjustment is not considered an FPA under section 6231(a)(3). A petition for readjustment under section 6234 may not be filed with respect to such notice, and the limitations under proposed § 301.6232-1(c) (providing that generally no assessment can be made before the mailing of an FPA or, if applicable, a final court decision) do not apply to an assessment under § 301.6232-1(d)(1)(i). A partnership generally may request abatement of such assessments, but abatement is not available where an adjustment that is the subject of a notice described in proposed § 301.6232-1(d)(1)(i) is due to the failure of a partnership-partner to comply with section 6222(a). Proposed § 301.6232-1(d)(1)(ii).
One comment recommended that the regulations include a statement that the assessment procedures under § 301.6232-1(d)(1)(i) will be narrowly construed and applied. The comment suggested as an example that the regulations make clear that an assessment against a partner of a partnership-partner will not be treated as a mathematical or clerical error where the partner has reported the items at issue consistently with the partnership-partner, even though the partnership-partner may not have been consistent with the partnership in which it is a partner. These suggestions were not adopted.
Nothing in the statute indicates that section 6232(d) should be construed or applied to a particular degree. More specifically, a rule providing that section 6232(d) will be applied and construed narrowly would be vague and not give helpful guidance to taxpayers or the IRS. For these reasons, the comment's suggestion regarding construing and applying section 6232(d) narrowly was not adopted, and the regulations do not include a statement to that effect.
Regarding the comment's example of a rule that might reflect a narrow construction of the regulations, this suggestion was also not adopted. Proposed § 301.6232-1(d)(1)(iii) provided that in the case of a partnership-partner that has an election under section 6221(b) in effect, any tax resulting from an adjustment due to the partnership-partner's failure to comply with section 6222(a) may be assessed with respect to the reviewed year partners of the partnership-partner (or indirect partners of the partnership-partner). Such tax may be assessed in the same manner as if the tax were on account of a mathematical or clerical error appearing on the reviewed year partner's or indirect partner's return, except that the procedures under section 6213(b)(2) for requesting an abatement of such assessment do not apply. Proposed § 301.6232-1(d)(1)(iii). For all other partnership-partners, the IRS may assess an imputed underpayment against such partnership-partner on account of a failure to meet the consistency requirements under section 6222(a). See § 301.6232-1(d)(1)(i). The rule suggested by the comment thus would apply in the case of partnership-partners that have an election under section 6221(b) in effect and that fail to meet the requirements of section 6222(a).
Section 6232(d) provides that any adjustment on account of a failure of a partnership that is a partner in another partnership to meet the requirements of section 6222(a) shall be treated as an adjustment based on mathematical or
The same comment also suggested that the regulations explain how a taxpayer may properly challenge a mathematical or clerical error assessment made by the IRS under proposed § 301.6232-(d)(1)(ii)(B) where the normal abatement procedures are unavailable. This comment was not adopted.
In the case where an imputed underpayment has been assessed pursuant to § 301.6232-(d)(1)(ii)(B) against a partnership-partner that has not complied with section 6222(a), the partnership-partner may be able to file an AAR subsequent to that assessment in accordance with the provisions of sections 6222 and 6227. While the AAR may readjust the partnership-related items at issue which resulted in the imputed underpayment, in effect providing an opportunity to the partnership to contest the adjustments, such readjustments would be required to be taken into account by the partnership's partners pursuant to the rules under section 6227 because the readjustments would necessarily be adjustments that would not result in an imputed underpayment. See §§ 301.6227-1(a), 301.6227-3(a). Those readjustments may reduce the partner's tax in the reporting year, but nothing would give the partnership-partner the ability to claim a refund of any imputed underpayment paid. Accordingly, it is the burden of a partnership-partner to ensure it has complied with the provisions of section 6222(a), either by treating items consistently with the manner in which they are treated on the partnership return or by notifying the IRS of any inconsistency, in order to preclude an assessment of an imputed underpayment under section 6232(d)(1)(B).
Under § 301.6232-(d)(1)(ii)(B), a partnership-partner that has failed to comply with section 6222(a) may, prior to assessment, correct an inconsistency by filing an AAR under section 6227 or filing an amended partnership return and furnishing amended statements, as appropriate. To clarify that an AAR in such a situation is only permitted to the extent allowed under section 6227, including the timing restrictions under section 6227(c), the final regulations under § 301.6232-(d)(1)(ii)(B) provide that the partnership may file an AAR “in accordance with” section 6227.
In the situation where an imputed underpayment has been assessed pursuant to § 301.6232-(d)(1)(ii)(B) against a partnership-partner but such partnership-partner had in fact complied with the provisions of section 6222(a), the partnership may be able to seek a refund of the any imputed underpayment paid on the ground that the adjustment should not have been treated as being on account of mathematical or clerical error. Any ability to seek a refund in this situation, however, is outside the scope of these regulations. For these reasons, no changes were made to the regulations under § 301.6232-1(d) in response to this comment.
Proposed § 301.6233(a)-1(a) provided that except to the extent provided in section 6226(c) and the regulations thereunder, in the case of a partnership adjustment for a reviewed year, a partnership is liable for interest and for any penalty, addition to tax, or additional amount as provided in proposed § 301.6233(a)-1(c). Proposed § 301.6233(a)-1(c)(1) provided that in accordance with section 6221(a), the applicability of any penalties, additions to tax, and additional amounts that relate to a partnership adjustment is determined at the partnership level as if the partnership had been an individual subject to tax imposed by chapter 1 of the Code for the reviewed year, and the imputed underpayment were an actual underpayment of tax or understatement for such year. Proposed § 301.6233(a)-1(c)(2) provided rules that apply in the case of penalties imposed under sections 6662, 6662A, and 6663 with respect to partnership adjustments.
Proposed § 301.6233(a)-1(c)(1) provided that a partner-level defense (as described in § 301.6226-3(d)(3)) may not be raised in a proceeding of the partnership. As discussed in section 4.C.ii.I of this preamble, one comment recommended that the regulations clarify that a partnership that makes a push-out election will be able to avail itself of partner-level defenses at the partnership level. Another comment recommended that the regulations should provide a mechanism for partners to raise partner-level defenses prior to assessment, rather than requiring the partner to first pay the penalty and then file a claim for refund to raise the partner-level defense. The comment stated the post-payment process would be unduly burdensome on partners and that a pre-payment process would not impair the audit process for the IRS. These comments were not adopted.
Section 6233 provides that penalties are determined as if the partnership had been an individual subject to chapter 1 tax for the reviewed year. In determining whether a penalty applies during the partnership proceeding, therefore, it is only the conduct of the partnership that is relevant. Allowing the partnership or partners to raise partner-level defenses and requiring the IRS to evaluate a partner's facts and circumstances during the partnership proceeding contravenes that purpose of the centralized partnership audit regime. Such a rule would also significantly impair the IRS's audit process. As discussed in section 3 of this preamble regarding the determination of imputed underpayments, an examination under the centralized partnership audit regime is a centralized proceeding wherein partner tax attributes are generally unaccounted for. Requiring the IRS to evaluate the specific facts and circumstances of each partner undermines the centralized nature of the proceeding and could significantly delay the examination.
Moreover, section 6233 treats an imputed underpayment as if it were an actual underpayment or understatement for the reviewed year. A partner-level defense by itself cannot reduce the amount of an imputed underpayment. Even if the partner-level defense were sufficient to provide penalty relief, that
Proposed § 301.6233(a)-1(c)(2)(ii) provided rules for determining the portion of the imputed underpayment to which a penalty applies where there exists (1) at least one adjustment with respect to which no penalty has been imposed and at least one adjustment with respect to which a penalty has been imposed or (2) at least two adjustments with respect to which penalties have been imposed and the penalties have different rates. In general, to determine the portion of the imputed underpayment to which the penalty applies, all partnership adjustments that resulted in the imputed underpayment were grouped together according to whether they were adjustments with respect to which a penalty has been imposed and according to rate of penalty. The adjustments were then multiplied by the rate that applied in calculating the imputed underpayment and added together to produce the portion of the imputed underpayment to which the penalty applies.
One comment observed that under proposed § 301.6233(a)-1(c)(2)(ii)(D) and (E) negative or decreasing adjustments were applied first to adjustments to which no penalties have been imposed and then to adjustments subject to the lowest penalty and suggested that this rule applies such adjustments in a manner that maximizes penalties. The comment recommended that the proposed regulations be revised to group adjustments by character for purposes of calculating the portion of the imputed underpayment subject to the penalty. This comment was partially adopted.
Section 6233(a)(3) provides that any penalty, addition to tax, or additional amount shall be determined at the partnership level as if such partnership had been an individual subject to tax under chapter 1 for the reviewed year and the imputed underpayment were an actual underpayment (or understatement) for such year. Section 6662, which imposes accuracy-related penalties on underpayments, applies to the portion of an underpayment attributable to certain circumstances such as negligence or disregard of rules or regulations or a substantial understatement of income tax. To determine the portion of an imputed underpayment to which a penalty applied, proposed § 301.6233(a)-1(c) applied rules similar to the ordering rules under § 1.6664-3 by disregarding the grouping and subgrouping rules under § 301.6225-1 and by applying decreasing adjustments to offset any positive adjustments to which no penalty was imposed, followed by adjustments to which 20 a percent penalty was imposed, and so forth. While the rules under proposed § 301.6233(a)-1(c) were consistent with the rules § 1.6664-3, this consistency did not allow for important distinctions between the calculation of an underpayment and the calculation of the imputed underpayment. For example, in computing an imputed underpayment, negative adjustments are generally not taken into consideration in determining the imputed underpayment unless the negative adjustment is in a grouping or subgrouping under § 301.6225-1 that results in a net positive adjustments because only net positive adjustments are totaled to determine the total netted partnership adjustment, which forms the base for an imputed underpayment prior to application of any adjustments to credits.
Section 301.6233(a)-1(c) has been revised to account for these distinctions and to apply the ordering rules under § 1.6664-3 within each grouping or subgrouping determined in accordance with § 301.6225-1. Because the revised rule uses the groupings and subgroupings determined under section 6225, in general the character of the adjustments within each grouping will be the same, as suggested by the comment. See § 301.6225-1(d). The revised rule maintains the treatment of an imputed underpayment as if it were an actual underpayment or understatement, but also respects the framework for calculating the imputed underpayment established under section 6225 and the regulations thereunder. The revised rule is also more streamlined, removes references to specific penalty rates to allow for any future statutory changes, and eliminates unnecessary steps and terminology. For example, the revised rule eliminates the term decreasing adjustment and instead uses the term “negative adjustment” as defined in § 301.6225-1(d)(2).
Section 301.6233(a)-1(c)(2) provides the rules for calculating penalties under section 6662, 6662A or 6663. Section 301.6233(a)-1(c)(2)(iii) provides the rules for applying negative adjustments. As a threshold matter, the rule provides that adjustments that do not result in an imputed underpayment and adjustments that are disregarded in determining the imputed underpayment are not taken into account when determining the amount of penalties. The rule generally provides that if any grouping or subgrouping as determined under § 301.6225-1 or § 301.6225-2 contains a negative adjustment and at least one positive adjustment subject to penalty, the negative adjustment is first used to offset any positive adjustment to which no penalties have been imposed within that grouping or subgrouping. If any amount of negative adjustments remains after offsetting positive adjustments to which no penalties have been imposed, the remaining amount of negative adjustment is applied within the grouping or subgrouping against positive adjustments to which a penalty has been imposed at the lowest rate. If after this step, any amount of negative adjustment remains, the process is repeated iteratively with respect to higher rates in ascending order of rate. Additionally, the regulations provide special rules for the application of negative credits. All adjustments to credits and adjustments treated as adjustments to credits are treated as grouped in the credit grouping without regard to whether the adjustments were subgrouped for purposes of § 301.6225-1 (or § 301.6225-2 in the case of modification). If negative credit adjustments remain after the application of negative adjustments in accordance with § 301.6233(a)-1(c)(2)(iii)(A), negative credit amounts are first applied to reduce the portion of the imputed understatement not subject to penalty then to reduce the portion of the imputed understatement subject to penalty iteratively in ascending order of rate.
Section 301.6233(a)-1(c)(2)(ii) provides the mechanical steps for calculating any penalty after any
First, all adjustments that are not adjustments to credits or treated as adjustments to credits that are subject to a particular penalty and to which the highest rate of tax in effect for the reviewed year under section 1 or 11 was applied are totaled. Second, the total from step one is multiplied by the highest rate of tax in effect for the reviewed year under section 1 or 11. Third, the first and second steps are repeated for any other tax rates used to calculate the imputed underpayment, for example, rates applied as part of the modification process. Fourth, all of the results from completing the first three steps are totaled. Fifth, all adjustments in the credit grouping are netted. The total from step four is increased by any remaining positive adjustments to credits or decreased by negative adjustments to credits in accordance with the rules in § 301.6233(a)-1(c)(2)(iii). This result is the portion of the imputed underpayment subject to penalty. Sixth, the total from step five is multiplied by the penalty rate for the penalty to provide the total penalty amount.
As discussed earlier in section 4.C.ii.III. of this preamble, one comment recommended that the regulations adopt a bifurcated approach under which interest would run on tax from the due date of the return without regard to extensions while interest on penalties would run from the due date of the return including any extensions. The comment recommended that proposed § 301.6233(a)-1(b) be revised to provide that the interest imposed on penalties and additions to tax (other than assessable penalties) on an imputed underpayment begins on the day after the due date of the partnership return (including any extensions). This comment was partially adopted.
Proposed § 301.6233(a)-1(b) provided rules regarding interest on an imputed underpayment, but did not provide rules regarding interest on penalties, additions to tax, or additional amounts with respect to the imputed underpayment. In light of the comment, the final regulations under § 301.6233(a)-1(b) clarify that interest with respect to penalties, additions to tax, or additional amounts with respect to an imputed underpayment determined under the rules of § 301.6233(a)-1(c) is the interest that would be imposed under chapter 67 of the Code treating the partnership return for the reviewed year as the return of tax to with respect to which such penalty is imposed. To the extent the comment was suggesting a rule that is not consistent with chapter 67 of the Code, the comment was not adopted.
Section 6234(a) provides that a partnership may file a petition in the Tax Court, a United States district court, or the Court of Federal Claims, within 90 days of the date on which an FPA is mailed under section 6231. A petition under section 6234 may be filed in a district court or the Court of Federal Claims only if the partnership filing the petition makes a jurisdictional deposit in accordance with section 6234(b). The jurisdictional deposit is the amount of (as of the date of the filing of the petition) any imputed underpayment (as shown on the FPA) and any penalties, additions to tax, and additional amounts with respect to such imputed underpayment. See proposed § 301.6234-1(b).
Under proposed § 301.6226-1(e), a partnership that has made an election under § 301.6226-1 is not precluded from filing a petition under section 6234(a). One comment stated that the proposed regulations provided no explanation as to how or whether the deposit amount under section 6234(b) may or should be adjusted to reflect a push out election under section 6226. The comment recommended the regulations should provide a mechanism that would enable a partnership to file a petition in a district court or Court of Federal Claims and still make an election under section 6226, without creating the risk of having tax on the partnership adjustments paid twice. The comment suggested that one possible approach might be to reduce the deposit amount by the amount that would be reported by partners that receive statements based on an election under section 6226. The comment suggested that another approach might be to provide a clear mechanism for having the partnership obtain a refund of the imputed tax deposit before any amounts are paid by the push out partners under section 6226.
The comment's suggestion regarding whether a partnership can make an election under section 6226 and also file a petition under section 6234 is addressed in section 4.A.v of this preamble. With respect to the comment's suggestion that the partnership deposit be reduced by the amount of the imputed underpayment that would be reported by partners that receive 6226 statements, this suggestion was not adopted. The plain language of section 6234(b)(1) makes clear that a petition for readjustment may be filed in district court or the Court of Federal Claims only if the partnership makes a jurisdictional deposit. The statute does not provide authority to alter this jurisdictional requirement by regulation for any partnerships, including partnerships that make the election under section 6226. The election under section 6226 is made with respect to an imputed underpayment, and therefore the deposit required under section 6234(b)(1) must equal the entire imputed underpayment to which the election relates (in addition to penalties and interest). An election under section 6226 is not with respect to a portion of an imputed underpayment; likewise, a deposit under section 6234(b)(1) cannot be for a portion of the imputed underpayment.
Moreover, a rule allowing for a reduction in the deposit amount for those partners that are furnished statements under section 6226 would not work as a practical matter. First, to the extent the comment was suggesting a rule that allows a reduction of the deposit equal to each partner's share of the adjustments, this rule would reduce the deposit amount to zero, provided all partners properly were furnished statements. This would effectively eliminate the deposit requirement for partnerships making an election under section 6226. There is nothing in the statute that allows any partnership, including a partnership making the election under section 6226, to be exempt from the jurisdictional requirements of section 6234(b).
Second, to the extent the comment was suggesting a rule that would reduce the deposit by the tax paid by partners furnished statements, this rule would also not work given the timing of when statements must be furnished. Pursuant to § 301.6226-2(b)(1), all statements must be furnished no later than 60 days after the date all of the partnership adjustments to which the statement relates are finally determined. Partnership adjustments are finally determined upon the later of the expiration of the time to file a petition under section 6234, or if a petition under section 6234 is filed, the date when the court's decision becomes final. The deposit under section 6234(b)(1) must be made when a petition is filed. The deposit cannot be reduced at the time by the amount the tax partners will pay because statements are not furnished until later in the
With respect to the comment's recommendation that there be a clear mechanism for having the partnership obtain a refund of the tax deposit, the comment's concern that the deposit made in conjunction with a section 6226 election would result in double taxation is misplaced; however, the regulations were revised to clarify operation of the deposit rules. Under § 301.6234-1(c), the amount deposited under section 6234(b)(1) is not treated as a payment of tax (except with respect to chapter 67 of the Code). If the partnership makes a valid election under section 6226, no amount may be assessed against the partnership, and instead the partners must take the adjustments into account. To conform these two sets of rules, the final regulations under § 301.6234-1(e) clarify that a partnership is entitled to a return of any deposit that is in an amount in excess of the amount assessed against the partnership. To obtain a return of this excess deposit, the partnership must notify the IRS in writing in accordance with forms, instructions, and other guidance prescribed by the IRS.
Five comments were received regarding the definition of pass-through partner under proposed § 301.6241-1, the rules regarding cease to exist determinations in accordance with proposed § 301.6241-3, and the rules regarding the nondeductibility of payments made under the centralized partnership audit regime as provided in proposed § 301.6241-4.
Proposed § 301.6241-1 defined certain terms for purposes of the centralized partnership audit regime. Proposed § 301.6241(a)(5) defined a “pass-through partner” as “a pass-through entity that holds an interest in a partnership” and a “pass-through entity” to include a partnership described in § 301.7701-2(c)(1), among other types of entities. A partnership as described in § 301.7701-2(c)(1) means a business entity that is not a corporation under § 301.7701-2(b) and that has at least two members.
Section 6241(1) defines the term partnership to mean any partnership required to file a return under section 6031(a), which applies to every partnership as defined in section 761(a). Certain unincorporated organizations may elect under section 761(a) to not be subject to subchapter K. Proposed § 301.6241-5(a) provided that an entity that files a partnership return for any taxable year is subject to the centralized partnership audit regime with respect to such taxable year even if it is determined that the person filing the partnership return was not a partnership for such taxable year. Proposed § 301.6241-5(c)(2) provided an exception from this rule for entities for which a partnership return was filed for the sole purpose of making the election described in section 761(a).
One comment suggested there was an inconsistency between the definition of “pass-through partner” under proposed § 301.6241-1(a)(5), which defines partnership by reference to § 301.7701-2(c)(1), and the exception under proposed § 301.6241-5(c)(2) for entities that have elected out of subchapter K. The comment observed that the definition of partnership under § 301.7701-2(c)(1) arguably includes business organizations that have elected out of subchapter K under section 761(a). As a result, the term “pass-through partner” would include entities that may not be partnerships within the meaning of section 6031(a) because those entities are required to file partnership returns. To remedy this inconsistency, the comment recommended that the definition of “pass-through partner” in proposed § 301.6241-1(a)(5) be revised to eliminate the reference to § 301.7701-2(c)(1) and instead refer to the definition of “partnership” under section 6241(1), that is, “a partnership required to file a return under section 6031(a).”
The Treasury Department and the IRS agree with the comment that there was an inconsistency in the definition of “pass-through partner.” The approach recommended in the comment was adopted and remedied this inconsistency. The revision clarifies that business organizations that have elected out of subchapter K are not “pass-through partners.” This change is consistent with the definition of “partnership” under section 6241(1). Accordingly, the definition of “pass-through partner” under § 301.6241-1(a)(5) refers to a partnership that is required to file a return under section 6031(a), consistent with the definition of partnership under section 6241(1).
One comment was received regarding the application of the centralized partnership audit regime to pass-through partners as a result of the proposed regulations. Proposed § 301.6226-3 provided that a pass-through partner that is furnished a statement described in § 301.6226-2 must comply with proposed § 301.6226-3(e). The term “pass-through partner” includes partnerships that made an election under section 6221(b) for the taxable year. One comment suggested that there may be uncertainty with respect to how a partnership that has elected out of the centralized partnership audit regime complies with the requirements of the regime. For example, the elected out partnership may not have designated a partnership representative prior to receiving a statement described in § 301.6226-2. The comment recommended that the Treasury Department and the IRS should issue further guidance on elected out partnerships, including providing guidance that confirms an elected out partnership receiving a statement described in § 301.6226-2 and complying with § 301.6226-3(e) will not be deemed subject to the centralized partnership audit regime for other purposes.
A partnership that has made an election under section 6221(b) is not subject to the requirements of the centralized partnership audit regime as a partnership. For example, the partnership is not required to select a partnership representative. A partnership that has made an election under section 6221(b) may still be subject to the requirements of the centralized partnership audit regime in its capacity as a partner in a partnership that is subject to the centralized partnership audit regime. For example, sections 6222, 6223, 6226(b)(4)(C), 6241(7), and the regulations thereunder apply to all partners in a partnership subject to the centralized partnership audit regime, including any pass-through partner. Pass-through partners that must comply with these provisions include partnerships subject to the centralized partnership audit regime as partnerships as well as those that made an election under 6221(b) and other entities such as S corporations and trusts.
For example, under § 301.6226-3(e) a pass-through partner that receives a push out statement from an audited partnership must furnish statements to its owners or, if it fails to furnish statements to its owners, pay an imputed underpayment. This rule applies regardless of whether or not the pass-through partner is subject to the
Several comments were received regarding the treatment of partnership adjustments where a partnership ceases to exist under section 6241(7). The comments pertained to two general areas: (1) The determination that a partnership has ceased to exist; and (2) the definition of “former partners” under proposed § 301.6241-3(d).
Proposed § 301.6241-3 provided that, if the IRS determined a partnership ceased to exist (as described in proposed § 301.6241-3(b)(2)) before the partnership adjustments take effect (as described in proposed § 301.6241-3(c)), the partnership adjustments are taken into account by the former partners (as described in proposed § 301.6241-3(d)) in accordance with proposed § 301.6241-3(e). Proposed § 301.6241-3(b)(1) provided that a determination that a partnership had ceased to exist was within the sole discretion of the IRS, and the IRS was not required to determine that a partnership has ceased to exist, even if the partnership meets the definition of cease to exist in proposed § 301.6241-3(b)(2).
One comment stated that the language in proposed § 301.6241-3(b)(1) and (2) was ambiguous and allowed for excessive latitude and a potential for abuse of discretion in making such a cease-to-exist determination. The comment suggested that the IRS, upon formal request, should be compelled to consider the facts and circumstances of a cease-to-exist determination.
If the IRS receives a letter requesting that the IRS determine that a specific partnership has ceased to exist and providing detailed facts to support such a determination, the IRS will consider the circumstances in the letter and whether it is in the interest of sound tax administration to determine that the partnership has ceased to exist. The IRS, however, will retain its discretion as to whether to determine that a partnership has ceased to exist, even if the facts would indicate that the partnership meets the criteria in § 301.6241-3(b)(1)(i) and (ii). The cease-to-exist rules are inherently related to collection issues with respect to amounts not paid as a result of an administrative proceeding under the centralized partnership audit regime. Where a taxpayer or partnership properly owes amounts to the U.S. government, the IRS should be provided broad latitude, within the statutory limits, to ensure that such amounts are ultimately collected. To that end, it is administratively necessary for the IRS to retain its discretion to make a determination about whether a partnership ceases to exist. Cease to exist is not the only collection tool available to the IRS. The Treasury Department and the IRS therefore decline to create an additional unnecessary administrative rule that would compel the IRS to make a determination if requested by a taxpayer. Accordingly, no changes were made to the final regulations as a result of this comment.
Although the regulations do not require the IRS to make a cease-to-exist determination upon a formal request, the regulations have been revised to provide that a partnership does not cease to exist for purposes of section 6241(7) without the IRS determining the partnership has ceased to exist. Under proposed § 301.6241-3(b), cease to exist was defined as a situation where the partnership terminates under section 708(b)(1) or is unable to pay, in full, any amount due under subchapter C of chapter 63. It was not clear from the proposed regulations whether a partnership meeting those criteria could cease to exist without an accompanying determination to that effect by the IRS. The final regulations under § 301.6241-3(b) make clear that a partnership ceases to exist if the partnership terminates within the meaning of section 708(b)(1) or the partnership does not have the ability to pay, in full, any amount due under subchapter C of chapter 63, but only if the IRS makes a determination that the partnership has ceased to exist under one of those two situations. The final regulations provide certainty to both taxpayers and the IRS about when a partnership ceases to exist and make the cease-to-exist rules more administrable for the IRS by eliminating any confusion about whether a partnership has ceased to exist.
Proposed § 301.6241-3(b)(1) provided that if the IRS determines that a partnership ceased to exist, the IRS will notify the partnership and its former partners within 30 days of such determination. The final regulations clarify that a failure by the IRS to send a notification required under § 301.6241-3(b)(1) to the former partners of the partnership does not invalidate a determination that the partnership has ceased to exist. In addition, one comment suggested that the IRS should also notify the partnership representative (and designated individual, if applicable). To the extent the comment is referring to the partnership representative of the audited partnership, the comment has been adopted. In the case of a determination that the partnership has ceased to exist, the IRS will notify the partnership, the former partners of the partnership, and when an audited partnership has ceased to exit, the partnership representative (and designated individual, if applicable) for the reviewed year. This rule is consistent with the other notification provisions throughout the centralized partnership audit regime, which provide notification to the partnership representative and designated individual, if applicable. To the extent the comment was referring to a partnership that received a push out statement, the comment was not adopted. The partnership representative from the reviewed year or any other year of a partnership that received a push out statement has no connection to the unpaid, current liability and notification would not be appropriate or necessarily beneficial to the partnership. In addition, there would be administrative complexity for the IRS in determining the appropriate partnership representative for a partnership partner to notify because the IRS will only have been in contact with the partnership representative of the audited partnership, not partnership representatives of other partnerships not subject to an administrative proceeding.
The same comment also suggested that the partnership should be allowed to appeal a determination that the partnership has ceased to exist to the IRS Office of Appeals within 60 days of the receipt of the IRS's determination that the partnership has ceased to exist. This comment was not adopted. As discussed in section 11 of this Summary of Comments and Explanation of Revisions, any guidance regarding the availability of review by the IRS Office of Appeals will be provided outside of these regulations to preserve flexibility and allow the IRS to revise its procedures as it gains experience with
Former proposed § 301.6241-3(b)(2)(iii) had provided that the IRS could not determine that a partnership ceased to exist with respect to a partnership adjustment after the expiration of the period of limitations on collection applicable to the amount due resulting from such adjustment. One comment observed that the reference to the “period of limitations on collection applicable to the amount due” did not specify whether the period of limitations related to the partnership or the partner. In the August 2018 NPRM, former proposed § 301.6241-3(b)(2)(iii) was revised to provide that the relevant period of limitations is the period of limitations on collection applicable to the assessment made against the partnership for the amount due resulting from such adjustment. Because the plain language of proposed § 301.6241-3(b)(2)(iii) resolves the ambiguity identified by the comment, no further changes were made in the final regulations in response to this comment.
Proposed § 301.6241-3(d) defined the term “former partners” as the adjustment year partners of the partnership that ceased to exist, unless there are no adjustment year partners in which case the former partners are the partners of the partnership during the last taxable year for which a partnership return under section 6031 was filed with respect to such partnership. If the IRS determined that the partnership ceased to exist prior to the partnership adjustments taking effect, the former partners of the partnership take into account the partnership adjustments as if the partnership had made an election under section 6226 to push out the adjustments to the former partners. See proposed § 301.6241-3(e).
One comment expressed concern that, once a partnership was placed under examination, the partners could transfer their partnership interests to defunct corporations or otherwise uncollectible entities such that the IRS would be unable to collect from the “former partners” under the provisions of proposed § 301.6241-3. Similarly, the comment expressed concern that if the partnership was able to pay some but not all of the amounts due under the centralized partnership audit regime and the IRS did not determine that the partnership had ceased to exist, the partners would benefit from the improper treatment of the items and the partnership will not have paid the amounts owed as a result of the adjustments. The comment suggested that the final regulations add the ability for the IRS to assess the transferees of the former partners and the owners of the partnership.
Under section 6232(f), as added by the TTCA after the comment was received, if the partnership does not pay any amount of the imputed underpayment or specified similar amount (as defined in section 6232(f)(2)) within 10 days after the date on which the IRS provides notice and demand for such payment, the IRS may assess upon each partner of the partnership (as of the close of the adjustment year) or, if the partnership has ceased to exist, the former partners of the partnership, a tax equal to such partner's proportionate share of such amount (including any penalties and interest). Section 6232(f) provides the IRS with the ability to directly make assessments against the partners of a partnership that fails to pay an imputed underpayment or specified similar amount much like the assessment authority suggested by the comment. In addition, nothing in proposed § 301.6241-3 limits or otherwise modifies the IRS's existing tools under the Code, related case law, or any other law with respect to transferee liability. Accordingly, no changes were made to the final regulations in response to this comment. For these reasons, the clarification recommended by the comment was not adopted.
Another comment suggested that the definition of “former partners” under proposed § 301.6241-3(d) should include the reviewed year partners of the partnership that has ceased to exist in situations where the partnership has made an election under section 6226. Proposed § 301.6241-3(b)(2)(i)(A) provided that the IRS may not determine that a partnership has ceased to exist solely because the partnership has a valid election under section 6226 in effect with respect to any imputed underpayment. If the partnership makes a valid election under section 6226, the partnership is not liable for the imputed underpayment to which the election relates. See section 6226(a) and § 301.6226-1(b)(2). As a result, the IRS cannot determine the partnership ceases to exist with respect to that imputed underpayment (see § 301.6241-3(b)(2)), and the cease to exist provisions under proposed § 301.6241-3 will not apply to such partnership with respect to that imputed underpayment. Therefore, this comment was not adopted.
Although this comment was not adopted, a clarification was made to the definition of “former partners” under proposed § 301.6241-3(d)(1)(i). As stated earlier in this section of the preamble, the term “former partners” was defined under proposed § 301.6241-3(d)(1)(i) as the partners for the adjustment year that corresponds to the partnership taxable year to which the partnership adjustment relates. The final regulations under § 301.6241-3(d)(1)(i) clarify that the term “former partners” means, for a partnership that has ceased to exist, the partners of the partnership during the adjustment year (as defined in § 301.6241-1(a)(2)) that corresponds to the reviewed year for which the adjustments were made.
Proposed § 301.6241-4 provided that no deduction is allowed under subtitle A of the Code for any payment required to be made by a partnership under the centralized partnership audit regime, which includes any imputed underpayment or any interest, penalties, additions to tax, or additional amounts with respect to an imputed underpayment. Former proposed § 301.6225-1(a) provided that a partnership's expenditure for the imputed underpayment “and the adjustments that result in the imputed underpayment” are taken into account by the partnership in accordance with § 301.6241-4.” One comment suggested that, because of the cross reference to § 301.6241-4 in former proposed § 301.6225-1(a), that the regulations under § 301.6241-4 be revised to address the treatment of the adjustments that result in the imputed underpayment. This comment was not adopted.
Proposed § 301.6241-4 addressed the deductibility of payments required under the centralized partnership audit regime and did not address the treatment of adjustments that were taken into account in determining the amount of such payments. In the August 2018 NPRM, former proposed § 301.6225-1(a) was revised to remove the erroneous cross-reference to the adjustments being taken into account under § 301.6241-4. To the extent the comment was recommending that revision, the comment was addressed by the revisions in the August 2018 NPRM. To the extent the comment was recommending guidance on the treatment of partnership adjustments in the context of adjusting tax attributes, those rules were provided in proposed §§ 301.6225-4 and 301.6226-4.
Proposed § 301.6241-5(c)(2) provided that the centralized partnership audit regime would not apply to a taxable year for which a partnership return was
Several comments were received regarding the interaction between the centralized partnership audit regime and the IRS Appeals. For example, certain comments suggested the regulations clarify the rules regarding a partnership's ability to raise various issues and determinations with IRS Appeals, including the timing of any involvement by IRS Appeals.
Procedures governing IRS Appeals are beyond the scope of these regulations. Accordingly, except as described in sections 3.B.i., 3.B.vii., 4.B.v., and 10.B.i. of this preamble, neither this preamble nor the regulations address IRS Appeals procedures in the context of the centralized partnership audit regime. These procedures are expected to be addressed in future guidance.
One comment suggested that the final regulations include guidance on the effect of the new partnership-related provisions of the Tax Cuts and Jobs Act, formally known as “An Act to provide for reconciliation pursuant to titles II and V of the concurrent resolution on the budget for fiscal year 2018,” Public Law 115-97 (TCJA), including examples of how adjustments to partnership-related items and tax attributes specific to the new TCJA provisions are treated under sections 6225 and 6226 by partnerships and their partners.
The Treasury Department and the IRS have determined not to provide guidance on how the provisions of the TCJA, including any partnership-related provisions, interact with the centralized partnership audit regime. The TCJA provisions are substantive tax rules that work independently of the procedural rules of the centralized partnership audit regime. Therefore, no change would necessarily be required as a result of these substantive provisions. However, as the Treasury Department and the IRS continue to gain experience with the centralized partnership audit regime and implement rules under the new TCJA provisions, guidance will be issued if it is later determined that doing so would be appropriate. For these reasons, this comment was not adopted.
Several comments recommended that the effective date of the centralized partnership audit regime be delayed. These comments were not adopted because the effective date for the statutory provisions governing the centralized partnership audit regime is established by statute. See BBA section 1101(g).
This regulation is not subject to review under section 6(b) of Executive Order 12866 pursuant to the Memorandum of Agreement (April 11, 2018) between the Treasury Department and the Office of Management and Budget regarding review of tax regulations. Therefore, a regulatory impact assessment is not required.
Because the final regulations would not impose a collection of information on small entities, the Regulatory Flexibility Act (5 U.S.C. chapter 6) does not apply.
Pursuant to section 7805(f) of the Code, the notice of proposed rulemaking preceding these regulations was submitted to the Chief Counsel for Advocacy of the Small Business Administration for comment on its impact on small business, and no comments were received.
IRS Revenue Procedures, Revenue Rulings, Notices and other guidance cited in this preamble are published in the Internal Revenue Bulletin (or Cumulative Bulletin) and are available from the Superintendent of Documents, U.S. Government Publishing Office, Washington, DC 20402, or by visiting the IRS website at
The principal authors of these final regulations are Jennifer M. Black of the Office of the Associate Chief Counsel (Procedure and Administration), Steven L. Karon of the Office of the Associate Chief Counsel (Procedure and Administration), and Joy E. Gerdy Zogby of the Office of the Associate Chief Counsel (Procedure and Administration). However, other personnel from the Treasury Department and the IRS participated in their development.
Employment taxes, Estate taxes, Excise taxes, Gift taxes, Income taxes, Penalties, Reporting and recordkeeping requirements.
Accordingly, 26 CFR part 301 is amended as follows:
26 U.S.C. 7805 * * *
Section 301.6221(a)-1 also issued under 26 U.S.C. 6221.
Section 301.6222-1 also issued under 26 U.S.C. 6222 and 6223.
Section 301.6225-1 also issued under 26 U.S.C. 6225.
Section 301.6225-2 also issued under 26 U.S.C. 6223 and 6225.
Section 301.6225-3 also issued under 26 U.S.C. 6225.
Section 301.6226-1 also issued under 26 U.S.C. 6223 and 6226.
Section 301.6226-2 also issued under 26 U.S.C. 6226.
Section 301.6226-3 also issued under 26 U.S.C. 6226.
Section 301.6227-1 also issued under 26 U.S.C. 6223 and 6227.
Section 301.6227-2 also issued under 26 U.S.C. 6227.
Section 301.6227-3 also issued under 26 U.S.C. 6227.
Section 301.6231-1 also issued under 26 U.S.C. 6231.
Section 301.6232-1 also issued under 26 U.S.C. 6232.
Section 301.6233(a)-1 also issued under 26 U.S.C. 6233.
Section 301.6233(b)-1 also issued under 26 U.S.C. 6233.
Section 301.6234-1 also issued under 26 U.S.C. 6234.
Section 301.6235-1 also issued under 26 U.S.C. 6235.
Section 301.6241-1 also issued under 26 U.S.C. 6241.
Section 301.6241-2 also issued under 26 U.S.C. 6241.
Section 301.6241-3 also issued under 26 U.S.C. 6241.
Section 301.6241-4 also issued under 26 U.S.C. 6241.
Section 301.6241-5 also issued under 26 U.S.C. 6241.
Section 301.6241-6 also issued under 26 U.S.C. 6241.
(a)
(b)
(c)
(2)
(a)
(2)
(3)
(4)
(i) The treatment of such item on the partnership's return of partnership income filed with the Internal Revenue Service (IRS) under section 6031, and any amendment or supplement thereto, including an administrative adjustment request (AAR) filed pursuant to section 6227; and
(ii) The treatment of such item on any statement, schedule or list, and any amendment or supplement thereto, filed by the partnership with the IRS, including any statements filed pursuant to section 6226.
(5)
A is a partner in Partnership during 2018 and 2019. In December 2018, Partnership receives an advance payment for services to be performed in 2019 and reports this amount as income on its partnership return for 2018. A includes its distributive share of income from the advance payment on A's income tax return for 2019 and not on A's income tax return for 2018. A has not satisfied the requirements of paragraph (a) of this section because A's treatment of the income attributable to Partnership is inconsistent with the treatment of that item by Partnership on its partnership return.
B is a partner in Partnership during 2018. Partnership incurred start-up costs before it was actively engaged in its business. Partnership capitalized these costs on its 2018 partnership return. B deducted his distributive share of the start-up costs on B's 2018 income tax return. B has not satisfied the requirements of paragraph (a) of this section because B's treatment of the start-up costs is inconsistent with the treatment of that item by Partnership on its partnership return.
C is a partner in Partnership during 2018. Partnership reports a loss of $100,000 on its partnership return for 2018. On the 2018 Schedule K-1 attached to the partnership return, Partnership reports $5,000 as C's distributive share of that loss. On the 2018 Schedule K-1 furnished to C, however, Partnership reports $15,000 as C's distributive share of the loss. C reports the $15,000 loss on C's 2018 income tax return. C has not satisfied the requirements of paragraph (a) of this section because C reported C's distributive share of the loss in a manner that is inconsistent with how C's distributive share of the loss was reported on the 2018 partnership return actually filed. See, however, paragraph (d) of this section for the election to be treated as having reported the inconsistency where the partner treats an item consistently with an incorrect schedule.
D was a partner in Partnership during 2018. Partnership reports a loss of $100,000 on its partnership return for 2018. In 2020, Partnership files an AAR under section 6227 reporting that the amount of the loss on its 2018 partnership return is $90,000, rather than $100,000 as originally reported. Pursuant to section 6227, Partnership elects to have its partners take the adjustment into account, and furnishes D a statement showing D's share of the reduced loss for 2018. D fails to take his share of the reduced loss for 2018 into account in accordance with section 6227. D has not satisfied the requirements of paragraph (a) of this section because D has not taken into
E was a partner in Partnership during 2018. In 2021, Partnership receives a notice of final partnership adjustment (FPA) in an administrative proceeding under subchapter C of chapter 63 with respect to Partnership's 2018 taxable year. The FPA reflects an imputed underpayment. Partnership properly elects the application of section 6226 with respect to the imputed underpayment and files with the IRS and furnishes to E a statement of E's share of adjustments with respect to Partnership's 2018 taxable year. E fails to take his share of the adjustments into account in accordance with section 6226. E has not satisfied the requirements of paragraph (a) of this section because E has not taken into account his share of adjustments with respect to Partnership's 2018 taxable year in a manner consistent with how Partnership treated such items on the section 6226 statement filed with the IRS.
F was a partner in Partnership during 2018. F has a valid election under section 6221(b) in effect with respect to F's 2018 partnership taxable year. Notwithstanding F's election under section 6221(b) for its 2018 taxable year, F is subject to section 6222 for taxable year 2018. F must treat, on its 2018 partnership return, any items attributable to F's interest in Partnership in a manner that is consistent with the treatment of those items on the 2018 partnership return actually filed by Partnership.
G was a partner in Partnership during 2018. G's taxable year ends on the same day as Partnership's 2018 taxable year. Partnership did not file a partnership return for its 2018 taxable year. G files an income tax return for its 2018 taxable year and reports G's share of a loss attributable to G's interest in Partnership. Because Partnership failed to file a partnership return, G's treatment of such loss is per se inconsistent pursuant to paragraph (a)(3) of this section.
(b)
(2)
(3)
(4)
H, an individual, is a partner in Partnership. On its partnership return for taxable year 2018, Partnership reports $100,000 in ordinary income. On the Schedule K-1 attached to the partnership return, as well as on the Schedule K-1 furnished to H, Partnership reports $15,000 as H's distributive share of the $100,000 in ordinary income. H reports only $5,000 of the $15,000 of ordinary income on his 2018 income tax return. The IRS may determine the amount of tax that results from adjusting the ordinary income attributable to H's interest in Partnership reported on H's 2018 income tax return from $5,000 to $15,000 and assess that resulting underpayment in tax as if it were on account of a mathematical or clerical error appearing on H's return. H may not request an abatement of that assessment under section 6213(b).
J was a partner in Partnership during 2018. In 2021, Partnership receives an FPA in an administrative proceeding under subchapter C of chapter 63 with respect to Partnership's 2018 taxable year. The FPA reflects an imputed underpayment. Partnership properly elects the application of section 6226 with respect to the imputed underpayment and files with the IRS and furnishes to J a statement of J's share of adjustments with respect to Partnership's 2018 taxable year. J fails to report one adjustment reflected on the statement, J's share of a decrease in the amount of losses for 2018, on J's return as required by section 6226. The IRS may determine the amount of tax that results from adjusting the decrease in the amount of losses on J's return to be consistent with the amount included on the section 6226 statement filed with the IRS and may assess the resulting underpayment in tax as if it were on account of a mathematical or clerical error appearing on J's return. J may not request an abatement of that assessment under section 6213(b).
(c)
(2)
(3)
(4)
(ii)
(5)
(6)
K is a partner in Partnership during 2018. K treats a deduction and a capital gain attributable to Partnership on K's 2018 income tax return in a manner that is inconsistent with the treatment of those items by Partnership on its 2018 partnership return. K reports the inconsistent treatment of the deduction in accordance with paragraph (c)(1) of this section, but not the inconsistent treatment of the gain. Because K did not notify the IRS of the inconsistent treatment of the gain in accordance with paragraph (c)(1) of this section, the IRS may determine the amount of tax that results from adjusting the gain reported on K's 2018 income tax return in order to make the treatment of that gain consistent with how the gain was treated on Partnership's partnership return. Pursuant to paragraph (c)(3) of this section, the IRS may assess and collect the underpayment of tax resulting from the adjustment to the gain as if it were on account of a mathematical or clerical error appearing on K's return.
L is a partner in Partnership during 2018. On its 2018 partnership return, Partnership treats partner L's distributive share of ordinary loss attributable to Partnership as $8,000. L, however, claims an ordinary loss of $9,000 as attributable to Partnership on its 2018 income tax return and notifies the IRS of the inconsistent treatment in accordance with paragraph (c)(1) of this section. As a result of the notice of inconsistent treatment, the IRS conducts a separate proceeding under subchapter B of chapter 63 of the Internal Revenue Code with respect to L's 2018 income tax return, a proceeding to which Partnership is not a party. During the proceeding, the IRS determines that the proper amount of L's distributive share of the ordinary loss from Partnership is $3,000. During the same proceeding, the IRS also determines that L overstated a charitable contribution deduction in the amount of $2,500 on its 2018 income tax return. The determination of the adjustment of L's share of ordinary loss is not binding on Partnership. The charitable contribution deduction is not attributable to Partnership or to another partnership subject to the provisions of subchapter C of chapter 63. The IRS may determine the amount of tax that results from adjusting the $9,000 ordinary loss deduction to $3,000 and from adjusting the charitable contribution deduction. Pursuant to paragraph (c)(4)(ii) of this section, the IRS is not limited to only adjusting the ordinary loss of $9,000, as originally reported on L's partner return, to $8,000, as originally reported by Partnership on its partnership return, nor is the IRS prohibited from adjusting the charitable contribution deduction in the proceeding with respect to L.
(d)
(i) Demonstrates that the treatment of such item on the partner's return is consistent with the treatment of that item on the statement, schedule, or other form prescribed by the IRS and furnished to the partner by the partnership; and
(ii) The partner makes an election in accordance with paragraph (d)(2) of this section.
(2)
(ii)
(A) Clearly identified as an election under section 6222(c)(2)(B);
(B) Signed by the partner making the election;
(C) Accompanied by a copy of the statement, schedule, or other form furnished to the partner by the partnership and a copy of the IRS notice that notified the partner of the inconsistency; and
(D) Include any other information required in forms, instructions, or other guidance prescribed by the IRS.
(iii)
(3)
(e)
(2)
(a)
(2)
(3)
(b)
(i) Grouping the partnership adjustments in accordance with paragraph (c) of this section and, if appropriate, subgrouping such adjustments in accordance with paragraph (d) of this section;
(ii) Netting the adjustments in accordance with paragraph (e) of this section;
(iii) Calculating the total netted partnership adjustment in accordance with paragraph (b)(2) of this section;
(iv) Multiplying the total netted partnership adjustment by the highest rate of Federal income tax in effect for the reviewed year under section 1 or 11; and
(v) Increasing or decreasing the product that results under paragraph (b)(1)(iv) of this section by—
(A) Any amounts treated as net positive adjustments (as defined in paragraph (e)(4)(i) of this section) under paragraph (e)(3)(ii) of this section; and
(B) Except as provided in paragraph (e)(3)(ii) of this section, any amounts treated as net negative adjustments (as defined in paragraph (e)(4)(ii) of this section) under paragraph (e)(3)(ii) of this section.
(2)
(3)
(4)
(c)
(2)
(ii)
(3)
(4)
(ii)
(B)
(5)
(ii)
(6)
(ii)
(iii)
(d)
(2)
(A) An increase in an item of gain is treated as an increase in an item of income;
(B) A decrease in an item of gain is treated as a decrease in an item of income;
(C) An increase in an item of loss or deduction is treated as a decrease in an item of income; and
(D) A decrease in an item of loss or deduction is treated as an increase in an item of income.
(ii)
(iii)
(B)
(3)
(ii)
(B)
(iii)
(B)
(C) [Reserved]
(iv)
(e)
(2)
(3)
(ii)
(iii)
(B) [Reserved]
(4)
(ii)
(f)
(i) After grouping, subgrouping, and netting the adjustments as described in paragraphs (c), (d), and (e) of this section, the result of netting with respect to any grouping or subgrouping that includes a particular partnership adjustment is a net negative adjustment (as described in paragraph (e)(4)(ii) of this section); or
(ii) The calculation under paragraph (b)(1) of this section results in an amount that is zero or less than zero.
(2)
(g)
(2)
(ii)
(iii)
(B)
(h)
Partnership reports on its 2019 partnership return $100 of ordinary income and an ordinary deduction of −$70. The IRS initiates an administrative proceeding with respect to Partnership's 2019 taxable year and determines that ordinary income was $105 instead of $100 ($5 adjustment) and that the ordinary deduction was −$80 instead of −$70 (−$10 adjustment). Pursuant to paragraph (c) of this section, the adjustments are both in the residual grouping. The −$10 adjustment to the ordinary deduction would not have been netted at the partnership level with the $5
The facts are the same as
Partnership reports on its 2019 partnership return ordinary income of $300, long-term capital gain of $125, long-term capital loss of −$75, a depreciation deduction of −$100, and a tax credit that can be claimed by the partnership of $5. In an administrative proceeding with respect to Partnership's 2019 taxable year, the IRS determines that ordinary income is $500 ($200 adjustment), long-term capital gain is $200 ($75 adjustment), long-term capital loss is −$25 ($50 adjustment), the depreciation deduction is −$70 ($30 adjustment), and the tax credit is $3 ($2 adjustment). Pursuant to paragraph (c) of this section, the adjustment to the tax credit is in the credit grouping under paragraph (c)(3) of this section. The remaining adjustments are part of the residual grouping under paragraph (c)(5) of this section. Pursuant to paragraph (d)(2) of this section, all of the adjustments in the residual grouping are positive adjustments. Because there are no negative adjustments, there are no subgroupings within the residual grouping. Under paragraph (b)(2) of this section, the adjustments in the residual grouping are summed for a total netted partnership adjustment of $355. Under paragraph (b)(1)(iv) of this section, the total netted partnership adjustment is multiplied by 40 percent (highest tax rate in effect), which results in $142. Under paragraph (b)(1)(v) of this section, the $142 is increased by the $2 credit adjustment, resulting in an imputed underpayment of $144.
Partnership reported on its 2019 partnership return long-term capital gain of $125. In an administrative proceeding with respect to Partnership's 2019 taxable year, the IRS determines the long-term capital gain should have been reported as ordinary income of $125. There are no other adjustments for the 2019 taxable year. This recharacterization adjustment results in two adjustments in the residual grouping pursuant to paragraph (c)(6) of this section: an increase in ordinary income of $125 ($125 adjustment) as well as a decrease of long-term capital gain of $125 (−$125 adjustment). The decrease in long-term capital gain is a negative adjustment under paragraph (d)(2)(ii) of this section and the increase in ordinary income is a positive adjustment under paragraph (d)(2)(iii) of this section. Under paragraph (d)(3)(i) of this section, the adjustment to long-term capital gain is placed in a subgrouping separate from the adjustment to ordinary income because the reduction of long-term capital gain is required to be taken into account separately pursuant to section 702(a). The $125 decrease in long-term capital gain is a net negative adjustment in the long-term capital subgrouping and, as a result, is an adjustment that does not result in an imputed underpayment under paragraph (f) of this section and is taken into account in accordance with § 301.6225-3. The $125 increase in ordinary income results in a net positive adjustment under paragraph (e)(4)(i) of this section. Because the ordinary subgrouping is the only subgrouping resulting in a net positive adjustment, $125 is the total netted partnership adjustment under paragraph (b)(2) of this section. Under paragraph (b)(1)(iv) of this section, $125 is multiplied by 40 percent resulting in an imputed underpayment of $50.
Partnership reported a $100 deduction for certain expenses on its 2019 partnership return and an additional $100 deduction with respect to the same type of expenses on its 2020 partnership return. The IRS initiates an administrative proceeding with respect to Partnership's 2019 and 2020 taxable years and determines that Partnership reported a portion of the expenses as a deduction in 2019 that should have been taken into account in 2020. Therefore, for taxable year 2019, the IRS determines that Partnership should have reported a deduction of $75 with respect to the expenses ($25 adjustment in the 2019 residual grouping). For 2020, the IRS determines that Partnership should have reported a deduction of $125 with respect to these expenses (−$25 adjustment in the 2020 residual grouping). There are no other adjustments for the 2019 and 2020 partnership taxable years. Pursuant to paragraph (e)(2) of this section, the adjustments for 2019 and 2020 are not netted with each other. The 2019 adjustment of $25 is the only adjustment for that year and a net positive adjustment under paragraph (e)(4)(i) of this section, and therefore the total netted partnership adjustment for 2019 is $25 pursuant to paragraph (b)(2) of this section. The $25 total netted partnership adjustment is multiplied by 40 percent resulting in an imputed underpayment of $10 for Partnership's 2019 taxable year. The $25 increase in the deduction for 2020, a net negative adjustment under paragraph (e)(4)(ii) of this section, is an adjustment that does not result in an imputed underpayment for that year. Therefore, there is no imputed underpayment for 2020.
On its partnership return for the 2020 taxable year, Partnership reported ordinary income of $100 and a capital gain of $50. Partnership had four equal partners during the 2020 tax year, all of whom were individuals. On its partnership return for the 2020 tax year, the capital gain was allocated to partner E and the ordinary income was allocated to all partners based on their interests in Partnership. In an administrative proceeding with respect to Partnership's 2020 taxable year, the IRS determines that for 2020 the capital gain allocated to E should have been $75 instead of $50 and that Partnership should have recognized an additional $10 in ordinary income. In the NOPPA mailed by the IRS, the IRS may determine pursuant to paragraph (g) of this section that there is a general imputed underpayment with respect to the increase in ordinary income and a specific imputed underpayment with respect to the increase in capital gain specially allocated to E.
On its partnership return for the 2020 taxable year, Partnership reported a recourse liability of $100. During an administrative proceeding with respect to Partnership's 2020 taxable year, the IRS determines that the $100 recourse liability should have been reported as a $100 nonrecourse liability. Under paragraph (d)(2)(iii)(B) of this section, the adjustment to the character of the liability is an adjustment to an item that cannot be allocated under section 704(b). The adjustment therefore is treated as a $100 increase in income because such recharacterization of a liability could result in up to $100 in taxable income if taken into account by any person. The $100 increase in income is a positive adjustment in the residual grouping under paragraph (c)(5)(ii) of this section. There are no other adjustments for the 2020 partnership taxable year. The $100 positive adjustment is treated as a net positive adjustment under paragraph (e)(4)(i) of this section, and the total netted partnership adjustment under paragraph (b)(2) of this section is $100. Pursuant to paragraph (b)(1) of this section, the total netted partnership adjustment is multiplied by 40 percent for an imputed underpayment of $40.
Partnership reports on its 2019 partnership return $400 of CFTEs in the general category under section 904(d). The IRS initiates an administrative proceeding with respect to Partnership's 2019 taxable year and determines that the amount of
Partnership reports on its 2019 partnership return $400 of CFTEs in the passive category under section 904(d). The IRS initiates an administrative proceeding with respect to Partnership's 2019 taxable year and determines that the CFTEs reported by Partnership were general category instead of passive category CFTEs. No other adjustments are made. Under the rules in paragraph (c)(6) of this section, an adjustment to the category of a CFTE is treated as two separate adjustments: An increase to general category CFTEs of $400 and a decrease to passive category CFTEs of $400. Both adjustments are included in the creditable expenditure grouping under paragraph (c)(4) of this section, but they are included in separate subgroupings. Therefore, the two amounts do not net. Instead, the $400 increase to CFTEs in the general category subgrouping is treated as a net negative adjustment under paragraph (e)(3)(iii)(A) of this section and is an adjustment that does not result in an imputed underpayment under paragraph (f) of this section. The decrease to CFTEs in the passive category subgrouping of the creditable expenditure grouping results in a decrease in CFTEs. Therefore, pursuant to paragraph (e)(3)(iii)(A) of this section, it is treated as a positive adjustment to (decrease in) credits in the credit grouping under paragraph (c)(3) of this section, which results in an imputed underpayment of $400 under paragraph (b)(1) of this section.
Partnership has two partners, A and B. Under the partnership agreement, $100 of the CFTE is specially allocated to A for the 2019 taxable year. The IRS initiates an administrative proceeding with respect to Partnership's 2019 taxable year and determines that $100 of CFTE should be reallocated from A to B. Because the adjustment reallocates a creditable expenditure, paragraph (c)(4) of this section provides that it is included in the creditable expenditure grouping rather than the reallocation grouping. The partnership adjustment is a −$100 adjustment to general category CFTE allocable to A and an increase of $100 to general category CFTE allocable to B. Pursuant to paragraph (d)(3)(iii) of this section, the −$100 adjustment to general category CFTE and the increase of $100 to general category CFTE are included in separate subgroupings in the creditable expenditure grouping. The $100 increase in general category CFTEs, B-allocation subgrouping, is a net negative adjustment, which does not result in an imputed underpayment and is therefore taken into account by the partnership in the adjustment year in accordance with § 301.6225-3. The net decrease to CFTEs in the general-category, A-allocation subgrouping, is treated as a positive adjustment to (decrease in) credits in the credit grouping under paragraph (c)(3) of this section, resulting in an imputed underpayment of $100 under paragraph (b)(1) of this section.
Partnership has two partners, A and B. Partnership owns two entities, DE1 and DE2, that are disregarded as separate from their owner for Federal income tax purposes and are operating in and paying taxes to foreign jurisdictions. The partnership agreement provides that all items from DE1 and DE2 are allocable to A and B in the following manner. Items related to DE1: To A 75 percent and to B 25 percent. Items related to DE2: To A 25 percent and to B 75 percent. On Partnership's 2018 return, Partnership reports CFTEs in the general category of $300, $100 with respect to DE1 and $200 with respect to DE2. Partnership allocates the $300 of CFTEs $125 and $175 to A and B respectively. During an administrative proceeding with respect to Partnership's 2018 taxable year, the IRS determines that Partnership understated the amount of creditable foreign tax paid by DE2 by $40 and overstated the amount of creditable foreign tax paid by DE1 by $80. No other adjustments are made. Because the two adjustments each relate to CFTEs that are subject to different allocations, the two adjustments are in different subgroupings under paragraph (d)(3)(iii)(B) of this section. The adjustment reducing the CFTEs related to DE1 results in a decrease in CFTEs within that subgrouping and under paragraph (e)(3)(iii)(A) of this section is treated as a decrease in credits in the credit grouping under paragraph (c)(3) of this section and results in an imputed underpayment of $80 under paragraph (b)(1) of this section. The increase of $40 of general category CFTE related to the DE2 subgrouping results in an increase in CFTEs within that subgrouping and is treated as a net negative adjustment, which does not result in an imputed underpayment and is taken into account in the adjustment year in accordance with § 301.6225-3.
Partnership has two partners, A and B. For the 2019 taxable year, Partnership allocated $70 of long term capital loss to B as well as $30 of ordinary income. In an administrative proceeding with respect to Partnership's 2019 taxable year, the IRS determines that the $30 of ordinary income and the $70 of long term capital loss should be reallocated from B to A. The partnership adjustments are a decrease of $30 of ordinary income (−$30 adjustment) allocated to B and a corresponding increase of $30 of ordinary income ($30 adjustment) allocated to A, as well as a decrease of $70 of long term capital loss ($70 adjustment) allocated to B and a corresponding increase of $70 of long term capital loss (−$70 adjustment) allocated to A. See paragraph (c)(2)(ii) of this section. Pursuant to paragraph (d)(3)(ii)(A) of this section, for purposes of determining the imputed underpayment, each positive adjustment and each negative adjustment allocated to A and B is placed in its own separate subgrouping. However, notwithstanding the general requirement that reallocation adjustments be subgrouped separately, the reallocation adjustments allocated to A and B may be subgrouped in accordance with paragraph (d)(3)(i) of this section because there are two reallocation adjustments allocated to each of A and B, respectively. Pursuant to paragraph (d)(3)(i) of this section, because the partnership adjustment allocated to A would not have been netted at the partnership level and would not have been allocated to A as a single partnership-related item for purposes of section 702(a), other provisions of the Code, regulations, forms, instructions, or other guidance prescribed by the IRS, the positive adjustment and the negative adjustment allocated to A remain in separate subgroupings. For the same reasons with respect to the adjustments allocated to B, the positive adjustment and the negative adjustment allocated to B also remain in separate subgroupings. As a result, the reallocation grouping would have four subgroupings, one for each adjustment: The decrease in ordinary income allocated to B (−$30 adjustment), the increase in ordinary income allocated to A ($30 adjustment), the decrease in long term capital loss allocated to B ($70 adjustment), and the increase long term capital loss allocated to A (−$70 adjustment). Pursuant to paragraph (e) of this section, no netting may occur between subgroupings. Accordingly, the ordinary income allocated to A ($30 adjustment) and the long term capital loss allocated to B ($70 adjustment) are both net positive adjustments. These net positive adjustments are added together to determine the total netted partnership adjustment of $100. The total netted partnership adjustment is multiplied by 40 percent, which results in an imputed underpayment of $40. The ordinary income allocated to B (−$30 adjustment) and the long term capital loss allocated to A (−$70 adjustment) are net negative adjustments treated as adjustments that do not result in an imputed underpayment taken into account by the partnership pursuant to § 301.6225-3.
(i)
(2)
(a)
(1) A reviewed year partner (as defined in § 301.6241-1(a)(9)), including any pass-through partner (as defined in § 301.6241-1(a)(5)), except for any reviewed year partner that is a wholly-owned entity disregarded as separate from its owner for Federal income tax purposes; or
(2) An indirect partner (as defined in § 301.6241-1(a)(4)) except for any indirect partner that is a wholly-owned entity disregarded as separate from its owner for Federal income tax purposes.
(b)
(i) Modifications that affect the extent to which an adjustment factors into the determination of the imputed underpayment under paragraph (b)(2) of this section;
(ii) Modification of the number and composition of imputed underpayments under paragraph (b)(4) of this section; and
(iii) Modifications that affect the tax rate under paragraph (b)(3) of this section.
(2)
(i) Paragraph (d)(2) of this section (amended returns and the alternative procedure to filing amended returns);
(ii) Paragraph (d)(3) of this section (tax-exempt status);
(iii) Paragraph (d)(5) of this section (specified passive activity losses);
(iv) Paragraph (d)(7) of this section (qualified investment entities);
(v) Paragraph (d)(8) of this section (closing agreements), if applicable;
(vi) Paragraph (d)(9) of this section (tax treaty modifications), if applicable; and
(vii) Paragraph (d)(10) of this section (other modifications), if applicable.
(3)
(A) Paragraph (d)(4) of this section (rate modification);
(B) Paragraph (d)(8) of this section (closing agreements), if applicable;
(C) Paragraph (d)(9) of this section (tax treaty modifications), if applicable; and
(D) Paragraph (d)(10) of this section (other modifications), if applicable.
(ii)
(iii)
(A) Determine each relevant partner's distributive share of the partnership adjustments subject to an approved modification under paragraph (b)(3)(i) of this section based on how each adjustment subject to rate modification was allocated in the NOPPA, or if the appropriate allocation was not addressed in the NOPPA, how the adjustment would be properly allocated under subchapter K of chapter 1 of the Internal Revenue Code (subchapter K) to such relevant partner in the reviewed year (as defined in § 301.6241-1(a)(8)).
(B) Multiply each partnership adjustment determined under paragraph (b)(3)(iii)(A) of this section by the tax rate applicable to such adjustment based on the approved modification described under paragraph (b)(3)(i) of this section.
(C) Add all of the amounts calculated under paragraph (b)(3)(iii)(B) of this section with respect to each partnership adjustment subject to an approved modification described under paragraph (b)(3)(i) of this section.
(iv)
(4)
(5)
(c)
(2)
(ii)
(3)
(ii)
(iii)
(4)
(d)
(2)
(ii)
(A)
(B)
(C)
(iii)
(iv)
(v)
(A) Establishes that the pass-through partner is not subject to chapter 1 tax on the adjustments that are properly allocated to such pass-through partner; or
(B) Requests modification with respect to the adjustments resulting in chapter 1 tax for the pass-through partner, including full payment of such chapter 1 tax for the first affected year and all modification years under paragraph (d)(2) of this section or in accordance with forms, instructions, or other guidance prescribed by the IRS.
(vi)
(B)
(vii)
(B)
(C)
(viii)
(ix)
(x)
(B)
(3)
(ii)
(iii)
(4)
(5)
(ii)
(A) At the end of the first affected year (affected year loss); or
(B) At the end of—
(
(
(iii)
(A) The person is a partner of the publicly traded partnership requesting modification under this section;
(B) The person is an individual, estate, trust, closely held C corporation, or personal service corporation; and
(C) The person has a specified passive activity loss with respect to the publicly traded partnership.
(iv)
(v)
(6)
(ii)
(7)
(ii)
(8)
(9)
(10)
(e)
(f)
Partnership has two partners during its 2019 partnership taxable year: P and S. P is a partnership, and S is an S corporation. P has four partners during its 2019 partnership taxable year: A, C, T and DE. A is an individual, C is a C corporation, T is a trust, and DE is a wholly-owned entity disregarded as separate from its owner for Federal income tax purposes. The owner of DE is B, an individual. T has two beneficiaries during its 2019 taxable year: F and G, both individuals. S has 3 shareholders during its 2019 taxable year: H, J, and K, all individuals. For purposes of this section, if Partnership requests modification with respect to A, B, C, F, G, H, J, and K, those persons are all relevant partners (as defined in paragraph (a) of this section). P, S, and DE are not relevant partners (as defined in paragraph (a) of this section) because DE is a wholly-owned entity disregarded as separate from its owner for Federal income tax purposes and modification was not requested with respect to P and S.
The IRS initiates an administrative proceeding with respect to Partnership's 2019 taxable year. The IRS mails a NOPPA to Partnership for the 2019 partnership taxable year proposing a single partnership adjustment increasing ordinary income by $100, resulting in a $40 imputed underpayment ($100 multiplied by the 40 percent tax rate). Partner A, an individual, held a 20 percent interest in Partnership during 2019. Partnership timely requests modification under paragraph (d)(2) of this section based on A's filing an amended return for the 2019 taxable year taking into account $20 of the partnership adjustment and paying the tax and interest due attributable to A's share of the increased income and the tax rate applicable to A for the 2019 tax year. No tax attribute in any other taxable year of A is affected by A's taking into account A's share of the partnership adjustment for 2019. In accordance with paragraph (d)(2)(iii) of this section, Partnership's partnership representative provides the IRS with documentation demonstrating that A filed the 2019 return and paid all tax and interest due. The IRS approves the modification and, in accordance with paragraph (b)(2) of this section, the $20 increase in ordinary income allocable to A is not included in the calculation of the total netted partnership adjustment (determined in accordance with § 301.6225-1). Partnership's total netted partnership adjustment is reduced to $80 ($100 adjustment less $20 taken into account by A), and the imputed underpayment is reduced to $32 (total netted partnership adjustment of $80 after modification multiplied by 40 percent).
The IRS initiates an administrative proceeding with respect to Partnership's 2019 taxable year. Partnership has two equal partners during its entire 2019 taxable year: an individual, A, and a partnership-partner, B. During all of 2019, B has two equal partners: a tax-exempt entity, C, and an individual, D. The IRS mails a NOPPA to Partnership for its 2019 taxable year proposing a single partnership adjustment increasing Partnership's ordinary income by $100, resulting in a $40 imputed underpayment ($100 total netted partnership adjustment multiplied by 40 percent). Partnership timely requests modification under paragraph (d)(3) of this section with respect to B's partner, C, a tax-exempt entity. In accordance with paragraph (d)(3)(iii) of this section, Partnership's partnership representative provides the IRS with documentation substantiating to the IRS's satisfaction that C held a 25 percent indirect interest in Partnership through its interest in B during the 2019 taxable year, that C was a tax-exempt entity defined in paragraph (d)(3)(ii) of this section during the 2019 taxable year, and that C was not subject to tax with respect to its entire allocable share of the partnership adjustment allocated to B (which is $25 (50 percent × 50 percent × $100)). The IRS approves the modification and, in accordance with paragraph (b)(2) of this section, the $25 increase in ordinary income allocated to C, through B, is not included in the calculation of the total netted partnership adjustment (determined in accordance with § 301.6225-1). Partnership's total netted partnership adjustment is reduced to $75 ($100 adjustment less C's share of the adjustment, $25), and the imputed underpayment is reduced to $30 (total netted partnership adjustment of $75, after modification, multiplied by 40 percent).
The facts are the same as in
The facts are the same as in
The facts are the same as in
The IRS initiates an administrative proceeding with respect to Partnership's 2019 taxable year. All of Partnership's partners during its 2019 taxable year are individuals. The IRS mails a NOPPA to Partnership for the 2019 taxable year proposing three partnership adjustments. The first partnership adjustment is an increase to ordinary income of $75 for 2019. The second partnership adjustment is an increase in the depreciation deduction allowed for 2019 of $25, which under § 301.6225-1(d)(2)(i) is treated as a $25 decrease in income. The third adjustment is an increase in long-term capital gain of $10 for 2019. Under the partnership agreement in effect for Partnership's 2019 taxable year, the long-term capital gain and the increase in depreciation would be specially allocated to B and the increase in ordinary income would be specially allocated to A. In accordance with § 301.6225-1(c) and (d), the three adjustments are placed into three separate
Partnership has two reviewed year partners, C1 and C2, both of which are C corporations. The IRS mails to Partnership a NOPPA with two adjustments, both based on rental real estate activity. The first adjustment is an increase of rental real estate income of $100 attributable to Property A. The second adjustment is an increase of rental real estate loss of $30 attributable to Property B. The Partnership did not treat the leasing arrangement with respect to Property A and Property B as an appropriate economic unit for purposes of section 469. If the $100 increase in income attributable to Property A and the $30 increase in loss attributable to Property B were included in the same subgrouping and netted, then taking the $30 increase in loss into account would result in a decrease in the amount of the imputed underpayment. Also, the $30 increased loss might be limited or restricted if taken into account by any person under the passive activity rules under section 469. For instance, under section 469, rental activities of the two properties could be treated as two activities, which could limit a partner's ability to claim the loss. In addition to the potential limitations under section 469, there are other potential limitations that might apply if the $30 loss were taken into account by any person. Therefore, in accordance with § 301.6225-1(d), the two adjustments are placed in separate subgroupings within the residual grouping, the total netted partnership adjustment is $100, the imputed underpayment is $40 ($100 × 40 percent), and the $30 increase in loss is an adjustment that does not result in an imputed underpayment under § 301.6225-1(f). Partnership requests modification under paragraph (d)(6) of this section, substantiating to the satisfaction of the IRS that C1 and C2 are publicly traded C corporations, and therefore, the passive activity loss limitations under section 469 of the Code do not apply. Partnership also substantiates to the satisfaction of the IRS that no other limitation or restriction applies that would prevent the grouping of the $100 with the $30 loss. The IRS approves Partnership's modification request and places the $100 of income and the $30 loss into the subgrouping in the residual grouping under the rules described in § 301.6225-1(c)(5). Under § 301.6225-1(e), because the two adjustments are in one subgrouping, they are netted together, resulting in a total netted partnership adjustment of $70 ($100 plus −$30) and an imputed underpayment of $28 ($70 × 40 percent). After modification, none of the adjustments is an adjustment that does not result in an imputed underpayment under § 301.6225-1(f) because the $30 loss is now netted with the $100 of income in a net positive adjustment for the residual grouping.
(g)
(2)
(a)
(b)
(2)
(3)
(4)
(5)
(6)
(7)
(c)
(d)
For all of Partnership's 2019, 2020, and 2021 partnership taxable years, Partnership has two equal partners, A and B. The IRS initiates an administrative proceeding with respect to Partnership's 2019 partnership taxable year. The IRS mails a notice of proposed partnership adjustment (NOPPA) to Partnership for the 2019 partnership taxable year proposing a recharacterization adjustment, changing a $100 ordinary loss to a $100 long term capital loss. Under § 301.6225-1, this recharacterization adjustment results in two adjustments: A $100 increase to ordinary income (positive adjustment) and a −$100 decrease in long term capital gain (negative adjustment). Under § 301.6225-1(b), the $100 positive adjustment is the total netted partnership adjustment, which is multiplied by the highest rate of 40 percent, resulting in a $40 imputed underpayment. Under § 301.6225-1(f), the −$100 negative adjustment is an adjustment that does not result in an imputed underpayment and is taken into account in accordance with this section. On March 1, 2021, the IRS mails a notice of final partnership adjustment (FPA), and because Partnership does not file a petition for readjustment with respect to the FPA, the adjustments are finally determined in 2021, and the adjustment year is determined to be 2021 pursuant to § 301.6241-1(a)(1). Pursuant to paragraph (a) of this section, Partnership takes into account the −$100 adjustment that does not result in an imputed underpayment on its 2021 partnership return. In addition to the −$100 adjustment to partnership's 2019 taxable year taken into account under this section, Partnership has an additional $300 in long term capital gain reportable in its 2021 taxable year. The −$100 negative adjustment and the $300 long term capital gain are Partnership's only long term capital gains and losses for its 2021 taxable year. Because the −$100 net negative adjustment is an adjustment to long term capital gain, which is a separately stated item under section 702(a)(2), the −$100 negative adjustment must be taken into account in accordance with paragraph (b)(2) of this section. Partnership includes both the −$100 negative adjustment and the $300 in long term capital gain as separately stated items on its 2021 tax return.
The facts are the same as in
(e)
(2)
(a)
(b)
(2)
(c)
(2)
(3)
(ii)
(A) The name, address, and taxpayer identification number (TIN) of the partnership;
(B) The taxable year to which the election relates;
(C) A copy of the FPA to which the election relates;
(D) In the case of an FPA that includes more than one imputed underpayment, identification of the imputed underpayment to which the election applies;
(E) The name and TIN (or alternative form of identification as prescribed by forms, instructions, or other guidance) of each reviewed year partner of the partnership;
(F) The current or last address of each reviewed year partner that is known to the partnership; and
(G) Any other information prescribed by the IRS in forms, instructions, and other guidance.
(d)
(e)
(f)
(g)
(2)
(a)
(b)
(i) The expiration of the time to file a petition under section 6234; or
(ii) If a petition under section 6234 is filed, the date when the court's decision becomes final.
(2)
(3)
During Partnership's 2020 taxable year, A, an individual, was a partner in Partnership and had an address at 123 Main St. On February 1, 2021, A sells his interest in Partnership and informs Partnership that A moved to 456 Broad St. On March 15, 2021, Partnership mails A's statement under section 6031(b) for the 2020 taxable year to 456 Broad St. On June 1, 2023, A moves again but does not inform Partnership of A's new address. In 2023, the IRS initiates an administrative proceeding with respect to Partnership's 2020 taxable year and mails a notice of final partnership adjustment (FPA) to Partnership for that year that includes a single imputed underpayment. Partnership makes a timely election under section 6226 in accordance with § 301.6226-1 with respect to the imputed underpayment and on May 31, 2024, timely mails a statement described in paragraph (a) of this section to A at 456 Broad St. Although the statement was mailed to the last address for A that was known to Partnership, it is returned to Partnership as undeliverable because unknown to Partnership, A had moved. After undertaking reasonable diligence to obtain the correct address of A, Partnership is unable to ascertain the correct address. Therefore, pursuant to paragraph (b)(2) of this section, Partnership properly furnished the statement to A when it mailed the statement to 456 Broad St.
The facts are the same as in
Partnership is a calendar year taxpayer. The IRS initiates an administrative proceeding with respect to Partnership's 2020 taxable year. On January 1, 2024, the IRS mails an FPA with respect to the 2020 taxable year to Partnership that includes a single imputed underpayment. Partnership makes a timely election under section 6226 in accordance with § 301.6226-1 with respect to the imputed underpayment. Partnership timely files a petition for readjustment under section 6234 with the Tax Court. The IRS prevails, and the Tax Court sustains all of the adjustments in the FPA with respect to the 2020 taxable year. The time to appeal the Tax Court decision expires, and the Tax Court decision becomes final on April 10, 2025. Under paragraph (b)(1)(ii) of this section, the adjustments in the FPA are finally determined on April 10, 2025, and Partnership must furnish the statements described in paragraph (a) of this section to its reviewed year partners and electronically file the statements with the IRS no later than June 9, 2025. See paragraph (c) of this section for the rules regarding filing the statements with the IRS.
(c)
(d)
(2)
(ii)
(3)
(4)
(e)
(1) The name and TIN (or alternative form of identification as prescribed by forms, instructions, or other guidance) of the reviewed year partner to whom the statement is being furnished;
(2) The current or last address of the reviewed year partner that is known to the partnership;
(3) The reviewed year partner's share of items as originally reported for the reviewed year to the partner on statements furnished to the partner under section 6031(b) and, if applicable, section 6227;
(4) The reviewed year partner's share of partnership adjustments determined under paragraph (f)(1) of this section;
(5) Modifications approved by the IRS with respect to the reviewed year
(6) The applicability of any penalty, addition to tax, or additional amount determined at the partnership level that relates to any adjustments allocable to the reviewed year partner and the adjustments to which the penalty, addition to tax, or additional amount relates, the section of the Internal Revenue Code (Code) under which each penalty, addition to tax, or additional amount is imposed, and the applicable rate of each penalty, addition to tax, or additional amount determined at the partnership level;
(7) The date the statement is furnished to the reviewed year partner;
(8) The partnership taxable year to which the adjustments relate; and
(9) Any other information required by forms, instructions, and other guidance prescribed by the IRS.
(f)
(ii)
(iii)
(2)
(g)
(2)
(3)
(h)
(2)
(a)
(b)
(2)
(ii)
(A) The amount of chapter 1 tax shown by the partner on the return for the first affected year (which includes amounts shown on an amended return for such year, including an amended
(B) Amounts not included in paragraph (b)(2)(ii)(A) of this section but previously assessed or collected (including the amounts defined in § 1.6664-2(d) of this chapter and any amounts paid by the partner in accordance with § 301.6225-2); less
(C) The amount of rebates made (as defined in § 1.6664-2(e) of this chapter).
(iii)
(3)
(ii)
(A) The amount of chapter 1 tax shown by the partner on the return for the intervening year (which includes amounts shown on an amended return for such year, including an amended return filed under section 6225(c)(2) by a reviewed year partner); plus
(B) Amounts not included in paragraph (b)(3)(ii)(A) of this section but previously or collected (including the amounts defined in § 1.6664-2(d) of this chapter and any amounts paid by the partner in accordance with § 301.6225-2); less
(C) The amount of rebates made (as defined in § 1.6664-2(e) of this chapter).
(iii)
(4)
(c)
(2)
(3)
(d)
(2)
(3)
(e)
(2)
(ii)
(3)
(ii)
(iii)
(A) The name and taxpayer identification number (TIN) of the audited partnership;
(B) The adjustment year of the audited partnership;
(C) The extended due date for the return for the adjustment year of the audited partnership (as described in paragraph (e)(3)(ii) of this section);
(D) The date on which the audited partnership furnished its statements required under § 301.6226-2(b);
(E) The name and TIN of the partnership that furnished the statement to the pass-through partner if different from the audited partnership;
(F) The name and TIN of the pass-through partner;
(G) The pass-through partner's taxable year to which the adjustments reflected on the statements described in paragraph (e)(3) of this section relates;
(H) The name and TIN (or alternative form of identification as prescribed by forms, instructions, or other guidance) of the affected partner to whom the statement is being furnished;
(I) The current or last address of the affected partner that is known to the pass-through partner;
(J) The affected partner's share of items as originally reported to such partner under section 6031(b) and, if applicable, section 6227, for the taxable year to which the adjustments reflected on the statement furnished to the pass-through partner relate;
(K) The affected partner's share of partnership adjustments determined under § 301.6226-2(f)(1) as if the affected partner were the reviewed year partner and the pass-through partner were the partnership;
(L) Modifications approved by the IRS with respect to the affected partner that holds its interest in the audited partnership through the pass-through partner;
(M) The applicability of any penalties, additions to tax, or additional amounts determined at the audited partnership level that relate to any adjustments allocable to the affected partner and the adjustments allocated to the affected partner to which such penalties, additions to tax, or additional amounts relate, the section of the Internal Revenue Code under which each penalty, addition to tax, or additional amount is imposed, and the applicable rate of each penalty, addition to tax, or additional amount; and
(N) Any other information required by forms, instructions, and other guidance prescribed by the IRS.
(iv)
(v)
(4)
(ii)
(iii)
(iv)
(B)
(v)
(vi)
(5)
(ii)
(6)
(f)
(g)
(h)
On its partnership return for the 2020 tax year, Partnership reported ordinary income of $1,000 and charitable contributions of $400. On June 1, 2023, the IRS mails a notice of final partnership adjustment (FPA) to Partnership for Partnership's 2020 year disallowing the charitable contribution in its entirety and determining that a 20 percent accuracy-related penalty under section 6662(b) applies to the disallowance of the charitable contribution, and setting forth a single imputed underpayment with respect to such adjustments. Partnership makes a timely election under section 6226 in accordance with § 301.6226-1 with respect to the imputed underpayment in the FPA for Partnership's 2020 year and files a timely petition in the Tax Court challenging the partnership adjustments. The Tax Court determines that Partnership is not entitled to any of the claimed $400 in charitable contributions and upholds the applicability of the penalty. The decision regarding Partnership's 2020 tax year becomes final on December 15, 2025. Pursuant to § 301.6226-2(b), the partnership adjustments are finally determined on December 15, 2025. On February 2, 2026, Partnership files the statements described under § 301.6226-2 with the IRS and furnishes to partner A, an individual who was a partner in Partnership during 2020, a statement described in § 301.6226-2. A had a 25 percent interest in Partnership during all of 2020 and was allocated 25 percent of all items from Partnership for that year. The statement shows A's share of ordinary income reported on Partnership's return for the reviewed year of $250 and A's share of the charitable contribution reported on Partnership's return for the reviewed year of $100. The statement also shows an adjustment to A's share of the charitable contribution, a reduction of $100 resulting in $0 charitable contribution allocated to A from Partnership for 2020. In addition, the statement reports that a 20 percent accuracy-related penalty under section 6662(b) applies. A must pay the additional reporting year tax as determined in accordance with paragraph (b) of this section, in addition to A's penalties and interest. A computes his additional reporting year tax as follows. First, A determines the correction amount for the first affected year (the 2020 taxable year) by taking into account A's share of the partnership adjustment (−$100 reduction in charitable contribution) for the 2020 taxable year. A determines the amount by which his chapter 1 tax for 2020 would have increased or decreased if the $100 adjustment to the charitable contribution from Partnership were taken into account for that year. There is no adjustment to tax attributes in A's intervening years as a result of the adjustment to the charitable contribution for 2020. Therefore, A's aggregate of the correction amounts is the correction amount for 2020, A's first affected year. In addition to the aggregate of the correction amounts being added to the chapter 1 tax that A owes for 2026, the reporting year, A must calculate a 20 percent accuracy-related penalty on A's underpayment attributable to the $100 adjustment to the charitable contribution, as well as interest on the correction amount for the first affected year and the penalty determined in accordance with paragraph (c) of this section. Interest on the correction amount for the first affected tax year runs from April 15, 2021, the due date of A's 2020 return (the first affected tax year) until A pays this amount. In addition, interest runs on the penalty from April 15, 2021, the due date of A's 2020 return for the first affected year until A pays this amount. On his 2026 income tax return, A must report the additional reporting year tax determined in accordance with paragraph (b) of this section, which is the correction amount for 2020, plus the accuracy-related penalty determined in accordance with paragraph (d) of this section, and interest determined in accordance with paragraph (c) of this section on the correction amount for 2020 and the penalty.
On its partnership return for the 2020 tax year, Partnership reported an ordinary loss of $500. On June 1, 2023, the IRS mails an FPA to Partnership for the 2020 taxable year determining that $300 of the $500 in ordinary loss should be recharacterized as a long-term capital loss. Partnership has no long-term capital gain for its 2020 tax year. The FPA for Partnership's 2020 tax year reflects an adjustment of an increase in ordinary income of $300 (as a result of the disallowance of the recharacterization of $300 from ordinary loss to long-term capital loss) and an imputed underpayment related to that adjustment, as well as an adjustment of an additional $300 in long-term capital loss for 2020 which does not result in an imputed underpayment under § 301.6225-1(f). Partnership makes a timely election under section 6226 in accordance with § 301.6226-1 with respect to the imputed underpayment in the FPA and does not file a petition for readjustment under section 6234. Accordingly, under § 301.6226-1(b)(2) and § 301.6225-3(b)(6), the adjustment year partners (as defined in § 301.6241-1(a)(2)) do not take into account the $300 long-term capital loss that does not result in an imputed underpayment. Rather,
On its partnership return for the 2020 tax year, Partnership, a domestic partnership, reported U.S. source dividend income of $2,000. On June 1, 2023, the IRS mails an FPA to Partnership for Partnership's 2020 year increasing the amount of U.S. source dividend income to $4,000 and determining that a 20 percent accuracy-related penalty under section 6662(b) applies to the increase in U.S. source dividend income. Partnership makes a timely election under section 6226 in accordance with § 301.6226-1 with respect to the imputed underpayment in the FPA for Partnership's 2020 year and does not file a petition for readjustment under section 6234. The time to file a petition expires on August 30, 2023. Pursuant to § 301.6226-2(b), the partnership adjustments become finally determined on August 31, 2023. On September 30, 2023, Partnership files the statements described under § 301.6226-2 with the IRS and furnishes to partner C, a nonresident alien individual who was a partner in Partnership during 2020 (and remains a partner in Partnership in 2023), a statement described in § 301.6226-2. C had a 50 percent interest in Partnership during all of 2020 and was allocated 50 percent of all items from Partnership for that year. The statement shows C's share of U.S. source dividend income reported on Partnership's return for the reviewed year of $1,000 and an adjustment to U.S. source dividend income of $1,000. In addition, the statement reports that a 20 percent accuracy-related penalty under section 6662(b) applies. Under § 301.6241-6(b)(4)(i), because the additional $1,000 in U.S. source dividend income allocated to C is an amount subject to withholding (as defined in § 301.6241-6(b)(2)), Partnership must pay the amount of tax required to be withheld on the adjustment. See §§ 1.1441-1(b)(1) and 1.1441-5(b)(2)(i)(A) of this chapter. Under § 301.6241-6(b)(4)(ii), Partnership may reduce the amount of withholding tax it must pay because it has valid documentation from 2020 that establishes that C was entitled to a reduced rate of withholding in 2020 on U.S. source dividend income of 10 percent pursuant to a treaty. Partnership withholds $100 of tax from C's distributive share, remits the tax to the IRS, and files the necessary return and information returns required by § 1.1461-1 of this chapter. On his 2023 return, C must report the additional reporting year tax determined in accordance with paragraph (b) of this section, the accuracy-related penalty determined in accordance with paragraph (d) of this section, and interest determined in accordance with paragraph (c) of this section on the correction amount for the first affected year, the correction amount for any intervening year, and the penalty. Under paragraph (f) of this section, C may claim the $100 withholding tax paid by Partnership pursuant to § 301.6241-6(b)(4)(i) as a credit under section 33 against C's income tax liability on his 2023 return.
On its partnership return for the 2020 tax year, Partnership reported ordinary income of $100 and a long-term capital gain of $40. Partnership had four equal partners during the 2020 tax year: E, F, G, and H, all of whom were individuals. On its partnership return for the 2020 tax year, the entire long-term capital gain was allocated to partner E and the ordinary income was allocated to all partners based on their equal (25 percent) interest in Partnership. The IRS initiates an administrative proceeding with respect to Partnership's 2020 taxable year and determines that the long-term capital gain should have been allocated equally to all four partners and that Partnership should have recognized an additional $10 in ordinary income. On June 1, 2023, the IRS mails an FPA to Partnership reflecting the reallocation of the $40 long-term capital gain so that F, G, and H each have $10 increase in long-term capital gain and E has a $30 reduction in long-term capital gain for 2020. In addition, the FPA reflects the partnership adjustment increasing ordinary income by $10. The FPA reflects a general imputed underpayment with respect to the increase in ordinary income and a specific imputed underpayment with respect to the increase in long-term capital gain allocated to F, G, and H. In addition, the FPA reflects a $30 partnership adjustment that does not result in an imputed underpayment, that is, the reduction of $30 in long-term capital gain with respect to E that is associated with the specific imputed underpayment in accordance with § 301.6225-1(g)(2)(iii)(B). Partnership makes a timely election under section 6226 in accordance with § 301.6226-1 with respect to the specific imputed underpayment relating to the reallocation of long-term capital gain. Partnership does not file a petition for readjustment under section 6234. The time to file a petition expires on August 30, 2023. Pursuant to § 301.6226-2(b), the partnership adjustments become finally determined on August 31, 2023. Partnership timely pays the general imputed underpayment that resulted from the partnership adjustment to ordinary income. On September 30, 2023, Partnership files with the IRS statements described in § 301.6226-2 and furnishes statements to its partners reflecting their share of the partnership adjustments as finally determined in the FPA that relate to the specific imputed underpayment, that is, the reallocation of long-term capital gain. The statements for F, G, and H each reflect a partnership adjustment of an additional $10 of long-term capital gain for 2020. The statement for E reflects a partnership adjustment of a reduction of $30 of long-term capital gain for 2020. Because E, F, G, and H are all individuals, all partners must report the additional reporting year tax as determined in accordance with paragraph (b) of this section in the partners' reporting year, which is 2023. They compute their additional reporting year tax as follows. First, they determine the correction amount for the first affected year (the 2020 taxable year) by taking into account their share of the partnership adjustments for the 2020 taxable year. They each determine the amount by which their chapter 1 tax for 2020 would have increased or decreased if the adjustment to long-term capital gain from Partnership were taken into account for that year. Second, they determine if there is any increase or decrease in chapter 1 tax for any intervening year as a result of the adjustment to the long-term capital gain for 2020. Their aggregate of the correction amounts is the sum of the correction amount for 2020, their first affected year and any correction amounts for any intervening years. They are also liable for any interest on the correction amount for the first affected year and for any intervening year as determined in accordance with paragraph (c) of this section.
On its partnership return for the 2020 taxable year, Partnership reported a long-term capital loss of $500. During an administrative proceeding with respect to Partnership's 2020 taxable year, the IRS mails a notice of proposed partnership adjustment (NOPPA) in which it proposes to disallow $200 of the reported
Partnership has two equal partners for the 2020 tax year: M (an individual) and J (a partnership). For the 2020 tax year, J has two equal partners—K and L—both individuals. On June 1, 2023, the IRS mails an FPA to Partnership for Partnership's 2020 year increasing Partnership's ordinary income by $500,000 and asserting an imputed underpayment of $200,000. Partnership makes a timely election under section 6226 in accordance with § 301.6226-1 with respect to the imputed underpayment in the FPA for Partnership's 2020 year and does not file a petition for readjustment under section 6234. The time to file a petition expires on August 30, 2023. Pursuant to § 301.6226-2(b), the partnership adjustments become finally determined on August 31, 2023. Therefore, Partnership's adjustment year is 2023, the due date of the adjustment year return is March 15, 2024 and the extended due date for the adjustment year return is September 16, 2024. On October 12, 2023, Partnership timely files with the IRS statements described in § 301.6226-2 and timely furnishes statements to its partners reflecting their share of the partnership adjustments as finally determined in the FPA. The statements to M and J each reflect a partnership adjustment of $250,000 of ordinary income. M takes her share of the adjustments reflected on the statements furnished by Partnership into account on M's return for the 2023 tax year in accordance with paragraph (b) of this section. On April 1, 2024, J files the adjustment tracking report and files and furnishes statements to K and L reflecting each partner's share of the adjustments reflected on the statements Partnership furnished to J. K and L must take their share of adjustments reflected on the statements furnished by J into account on their returns for the 2023 tax year in accordance with paragraph (b) of this section by treating themselves as reviewed year partners for purposes of paragraph (b).
On its partnership return for the 2020 tax year, Partnership reported that it placed Asset, which had a depreciable basis of $210,000, into service in 2020 and depreciated Asset over 5 years, using the straight-line method. Accordingly, Partnership claimed depreciation of $42,000 in each year related to Asset. Partnership has two equal partners for the 2020 tax year: M (a partnership) and N (an S corporation). For the 2020 tax year, N has one shareholder, O, who is an individual. On June 1, 2023, the IRS mails an FPA to Partnership for Partnership's 2020 year. In the FPA, the IRS determines that Asset should have been depreciated over 7 years instead of 5 years and adjusts the depreciation for the 2020 tax year to $30,000 instead of $42,000 resulting in a $12,000 adjustment. This adjustment results in an imputed underpayment of $4,800 ($12,000 × 40 percent). Partnership makes a timely election under section 6226 in accordance with § 301.6226-1 with respect to the imputed underpayment in the FPA for Partnership's 2020 year and does not file a petition for readjustment under section 6234. The time to file a petition expires on August 30, 2023. Pursuant to § 301.6226-2(b), the partnership adjustments become finally determined on August 31, 2023. On October 12, 2023, Partnership timely files with the IRS statements described in § 301.6226-2 and furnishes statements to its partners reflecting their share of the partnership adjustments as finally determined in the FPA. The statements to M and N reflect a partnership adjustment of $6,000 of ordinary income for the 2020 tax year. On February 1, 2024, N takes the adjustments into account under paragraph (e)(3) of this section by filing a partnership adjustment tracking report and furnishing a statement to O reflecting her share of the adjustments reported to N on the statement it received from Partnership. M does not furnish statements and instead chooses to calculate and pay an imputed underpayment under paragraph (e)(4) of this section equal to $1,200 ($6,000 × 40 percent) on the adjustments reflected on the statement it received from Partnership plus interest on the amount calculated in accordance with paragraph (e)(4)(iv)(B) of this section. On her 2023 return, O properly takes the adjustments into account under this section. Therefore, O reports and pays the additional reporting year tax determined in accordance with paragraph (b) of this section, which is the correction amount for 2020 plus any correction amounts for 2021 and 2022 (if the adjustments in 2020 resulted in any changes to the tax attributes of O in those years), and pays interest determined in accordance with paragraph (c) of this section on the correction amounts for each of those years.
On its partnership return for the 2020 tax year, Partnership reported $1,000 of ordinary loss. Partnership has two equal partners for the 2020 tax year: P and Q, both S corporations. For the 2020 tax year, P had one shareholder, R, an individual. For the 2020 tax year, Q had two shareholders, S and T, both individuals. On June 1, 2023, the IRS mails an FPA to Partnership for Partnership's 2020 year determining $500 of the $1,000 of ordinary loss should be recharacterized as $500 of long-term capital loss and $500 of the ordinary loss should be disallowed. The FPA asserts an imputed underpayment of $400 ($1,000 × 40 percent) with respect to the $1,000 reduction to ordinary loss and reflecting an adjustment that does not result in an imputed underpayment of a $500 capital loss. Partnership makes a timely election under section 6226 in accordance with § 301.6226-1 with respect to the imputed underpayment in the FPA for Partnership's 2020 year and does not file a petition for readjustment under section 6234. The time to file a petition expires on August 30, 2023. Pursuant to § 301.6226-2(b), the partnership adjustments become finally determined on August 31, 2023. On October 12, 2023, Partnership timely files with the IRS statements described in § 301.6226-2 and furnishes statements to its partners reflecting their share of the partnership adjustments as finally determined in the FPA. The statements to P and Q each reflect a partnership adjustment of $500 increase in ordinary income and a $250 increase in capital loss in accordance with § 301.6225-3(b)(6). P takes the adjustments into account under paragraph (e)(3) of this section by timely filing a partnership adjustment tracking report and furnishing a statement to R. Q timely filed a partnership adjustment
On its partnership return for the 2020 tax year, Partnership reported a $1,000 long-term capital gain on the sale of Stock. Partnership has two equal partners for the 2020 tax year: U (an individual) and V (a partnership). For the 2020 tax year, V has two equal partners: W (an individual) and X (a partnership). For the 2020 tax year, X has two equal partners: Y and Z, both of which are C corporations. On June 1, 2023, the IRS mails a NOPPA to Partnership for Partnership's 2020 year proposing a $500 increase in the long-term capital gain from the sale of Stock and an imputed underpayment of $200 ($500 × 40 percent). On July 17, 2023, Partnership timely submits a request to modify the rate used in calculating the imputed underpayment under § 301.6225-2(d)(4). Partnership submits sufficient information demonstrating that $375 of the $500 adjustment is allocable to individuals (50 percent of the $500 adjustment allocable to U and 25 percent of the $500 adjustment allocable to W) and the remaining $125 is allocable to C corporations (the indirect partners Y and Z). The IRS approves the modification and the imputed underpayment is reduced to $81.25 (($375 × 15 percent) + ($125 × 20 percent)). See § 301.6225-2(b)(3). No other modifications are requested. On February 28, 2024, the IRS mails an FPA to Partnership for Partnership's 2020 year determining a $500 increase in the long-term capital gain on the sale of Stock and asserting an imputed underpayment of $81.25 after taking into account the approved modifications. Partnership makes a timely election under section 6226 in accordance with § 301.6226-1 with respect to the imputed underpayment in the FPA for Partnership's 2020 year and does not file a petition for readjustment under section 6234. The time to file a petition expires on May 28, 2024. Pursuant to § 301.6226-2(b), the partnership adjustments become finally determined on May 29, 2024. On July 26, 2024, Partnership timely files with the IRS statements described in § 301.6226-2 and furnishes statements to its partners reflecting their share of the partnership adjustments as finally determined in the FPA. The statements to U and V each reflect a partnership adjustment of a $250 increase in long-term capital gain. V timely files the adjustment tracking report but fails to furnish statements and therefore must calculate and pay an imputed underpayment under paragraph (e)(4) of this section as well as interest on the imputed underpayment determined under paragraph (e)(4)(iv)(B) of this section. On February 3, 2025, V pays an imputed underpayment of $43.75 (($125 × 20 percent for the adjustments allocable to X) + ($125 × 15 percent for the adjustments allocable to W)) which takes into account the rate modifications approved by the IRS with respect to Y and Z. V must also pay any interest on the amount as determined in accordance with paragraph (e)(4)(iv)(B) of this section. V must file the adjustment tracking report and pay the amounts due under paragraph (e)(4) of this section no later than September 15, 2025, the extended due date of Partnership's return for the 2024 year, which is the adjustment year.
(i)
(2)
(a)
(b)
(c)
(2)
(i) The adjustments requested;
(ii) If a reviewed year partner is required to take into account the adjustments requested under § 301.6227-3, statements described in paragraph (e) of this section, including any transmittal with respect to such statements required by forms, instructions, and other guidance prescribed by the IRS; and
(iii) Other information prescribed by the IRS in forms, instructions, or other guidance.
(d)
(e)
(i) The name and TIN of the reviewed year partner to whom the statement is being furnished;
(ii) The current or last address of the partner that is known to the partnership;
(iii) The reviewed year partner's share of items as originally reported on statements furnished to the partner under section 6031(b) and, if applicable, section 6227;
(iv) The reviewed year partner's share of the adjustments as described under paragraph (e)(2) of this section;
(v) The date the statement is furnished to the partner;
(vi) The partnership taxable year to which the adjustments relate; and
(vii) Any other information required by forms, instructions, and other guidance prescribed by the IRS.
(2)
(ii)
(iii)
(f)
(g) [Reserved]
(h)
(2)
(a)
(2)
(i) The partnership is not required to seek the approval from the Internal Revenue Service (IRS) prior to applying modifications to the amount of any imputed underpayment under paragraph (a)(1) of this section reported on the AAR; and
(ii) As part of the AAR filed with the IRS in accordance with forms, instructions, and other guidance prescribed by the IRS, the partnership must—
(A) Notify the IRS of any modification;
(B) Describe the effect of the modification on the imputed underpayment;
(C) Provide an explanation of the basis for such modification; and
(D) Provide documentation to support the partnership's eligibility for the modification.
(b)
(2)
(3)
(ii)
(c)
(d)
(e)
(2)
(a)
(b)
(2)
In 2022, partner A, an individual, received a statement described in paragraph (a) of this section from Partnership with respect to Partnership's 2020 taxable year. Both A and Partnership are calendar year taxpayers and A is not claiming any refundable tax credit in 2020. The only adjustment shown on the statement is an increase in ordinary loss. Taking into account the adjustment, A determines that his
The facts are the same as in
(c)
(2)
(3)
(i) The name and taxpayer identification number (TIN) of the partnership that filed the AAR with respect to the adjustments reflected on the statements described in paragraph (c)(1) of this section;
(ii) The adjustment year (as defined in § 301.6241-1(a)(1)) of the partnership described in paragraph (c)(3)(i) of this section;
(iii) The extended due date for the return for the adjustment year of the partnership described in paragraph (c)(3)(i) of this section (as described in § 301.6226-3(e)(3)(ii));
(iv) The date on which the partnership described in paragraph (c)(3)(i) of this section furnished its statements required under § 301.6227-1(d);
(v) The name and TIN of the partnership that furnished the statement to the pass-through partner if different from the partnership described in paragraph (c)(3)(i) of this section;
(vi) The name and TIN of the pass-through partner;
(vii) The pass-through partner's taxable year to which the adjustments set forth in the statement described in paragraph (c)(1) of this section relate;
(viii) The name and TIN of the affected partner to whom the statement is being furnished;
(ix) The current or last address of the affected partner that is known to the pass-through partner;
(x) The affected partner's share of items as originally reported to such partner under section 6031(b) and, if applicable, section 6227, for the taxable year to which the adjustments reflected on the statement furnished to the pass-through partner relate;
(xi) The affected partner's share of partnership adjustments determined under § 301.6227-1(e)(2) as if the affected partner were the reviewed year partner and the partnership were the pass-through partner;
(xii) Any other information required by forms, instructions, and other guidance prescribed by the IRS.
(4)
(d)
(2)
(a)
(1) Notice of any administrative proceeding initiated at the partnership level with respect to an adjustment of any partnership-related item (as defined in § 301.6241-1(a)(6)(ii)) for any partnership taxable year under subchapter C of chapter 63 (notice of administrative proceeding (NAP));
(2) Notice of any proposed partnership adjustment resulting from an administrative proceeding under subchapter C of chapter 63 (notice of proposed partnership adjustment (NOPPA)); and
(3) Notice of any final partnership adjustment resulting from an administrative proceeding under subchapter C of chapter 63 (notice of final partnership adjustment (FPA)).
(b)
(2)
(c)
(d)
(2)
(e)
(f)
(g)
(h)
(2)
(a)
(b)
(c)
(i) The close of the 90th day after the day on which a notice of a final partnership adjustment (FPA) under section 6231(a)(3) was mailed; and
(ii) If a petition for readjustment is filed under section 6234 with respect to such FPA, the decision of the court has become final.
(2)
(d)
(ii)
(B)
(iii)
(2)
(e)
(f)
(2)
(a)
(1) Interest computed in accordance with paragraph (b) of this section; and
(2) Any penalty, addition to tax, or additional amount as provided under paragraph (c) of this section.
(b)
(i) The date prescribed for payment (as described in § 301.6232-1(b));
(ii) The due date of the partnership return (without regard to extension) for the adjustment year (as defined in § 301.6241-1(a)(1)); or
(iii) The date the imputed underpayment is fully paid.
(2)
(c)
(2)
(ii)
(A) For purposes of applying this paragraph (c)(2)(ii)(A), disregard adjustments to credits or adjustments treated as adjustments to credits. Total all adjustments to which a particular penalty was imposed and to which the highest rate of tax in effect for the reviewed year under section 1 or 11 was applied when calculating the imputed underpayment. See § 301.6225-1(b)(1)(iv).
(B) Multiply the total in paragraph (c)(2)(ii)(A) of this section by the highest rate of tax in effect for the reviewed year under section 1 or 11.
(C) If the imputed underpayment was modified in accordance with § 301.6225-2(b)(3), repeat the steps in paragraphs (c)(2)(ii)(A) and (B) of this section for every tax rate applied in calculating the imputed underpayment by substituting the applicable tax rate determined under § 301.6225-2(b)(3) for the highest rate of tax in effect for the reviewed year under section 1 or 11.
(D) Total all amounts determined after completing the steps in paragraphs (c)(2)(ii)(A) through (C) of this section.
(E) Adjust the amount calculated in paragraph (c)(2)(ii)(D) of this section by:
(
(
(
(F) Multiply the total calculated in paragraph (c)(2)(ii)(E) of this section by the penalty rate applicable to the particular penalty. This is the total penalty amount for adjustments to which the particular penalty was imposed.
(iii)
(
(
(
(B)
(C)
(
(
(
(
(
(iv)
(B)
(
(C)
(D)
(v)
In an administrative proceeding with respect to Partnership's 2018 partnership return, the IRS makes a positive adjustment to ordinary income of $100. The $100 adjustment is due to negligence or disregard of rules or regulations under section 6662(c), and a 20-percent accuracy-related penalty applies under section 6662(a). The IRS also makes a positive adjustment to long-term capital gain of $300, but no penalty applies with respect to that adjustment. These are the only adjustments. The portion of the imputed underpayment to which the 20-percent penalty applies is $40 ($100 × 40 percent), and the penalty is $8 ($40 × 20 percent).
The facts are the same as in
The facts are the same as in
The facts are the same as in
Partnership has four equal partners during its 2019 taxable year: Two partners are partnerships, A and B; one partner is a tax-exempt entity, C; and the fourth partner is an individual, D. In an administrative proceeding with respect to Partnership's 2019 taxable year, the IRS timely mails a notice of proposed partnership adjustment (NOPPA) to Partnership for its 2019 taxable year proposing a single partnership positive adjustment to Partnership's ordinary income by $400,000. The $400,000 positive adjustment is due to negligence or disregard of rules or regulations under section 6662(c). A 20-percent accuracy-related penalty under section 6662(a) and (c) applies to the portion of the imputed underpayment attributable to the negligence or disregard of the rules or regulations. In the NOPPA, the IRS determines an imputed underpayment of $160,000 ($400,000 × 40 percent) and that the 20-percent penalty applies to the entire imputed underpayment. The penalty is $32,000 ($160,000 × 20 percent). Partnership requests modification under § 301.6225-2(d)(3) (regarding tax-exempt partners) with respect to the amount of additional income allocated to C, and the IRS approves the modification request. As a result, Partnership's total netted partnership adjustment under § 301.6225-1(b)(2) is $300,000 ($400,000 less $100,000 allocable to C). The imputed underpayment is $120,000 (($300,000) × 40 percent), and the penalty is $24,000 ($120,000 × 20 percent).
The facts are the same as in
(d)
(2)
(a)
(1) Interest as determined under paragraph (c) of this section; and
(2) Any penalty, addition to tax, or additional amount as determined under paragraph (d) of this section.
(b)
(c)
(d)
(e)
(2)
(a)
(1) The Tax Court;
(2) The district court of the United States for the district in which the partnership's principal place of business is located; or
(3) The Court of Federal Claims.
(b)
(c)
(d)
(e)
(f)
(2)
(a)
(1) 3 years after the latest of—
(i) The date on which the partnership return for such taxable year was filed;
(ii) The return due date (as defined in section 6241(3)) for the taxable year; or
(iii) The date on which the partnership filed an administrative adjustment request with respect to such taxable year under section 6227;
(2) The date described in paragraph (b) of this section with respect to a request for modification; or
(3) The date described in paragraph (c) of this section with respect to a notice of proposed partnership adjustment.
(b)
(2)
(A) The date the period for requesting modification ends (including extensions) as described in § 301.6225-2(c)(3)(i) and (ii); or
(B) The date the period for requesting modification expires as a result of a waiver of the prohibition on mailing a notice of final partnership adjustment (FPA) under § 301.6231-1(b)(2). See § 301.6225-2(c)(3)(iii).
(ii)
(c)
(d)
(e)
Partnership timely files its partnership return for the 2020 taxable year on March 1, 2021. On September 1, 2023, Partnership files an administrative adjustment request (AAR) under section 6227 with respect to its 2020 taxable year. As of September 1, 2023, the IRS has not initiated an administrative proceeding under subchapter C of chapter 63 of the Internal Revenue Code with respect to Partnership's 2020 taxable year. Therefore, as of September 1, 2023, under paragraph (a)(1) of this section, the period for making partnership adjustments with respect to Partnership's 2020 taxable year expires on September 1, 2026.
Partnership timely files its partnership return for the 2020 taxable year on the due date, March 15, 2021. On February 1, 2023, the IRS mails to Partnership and the partnership representative of Partnership (PR) a notice of administrative proceeding under section 6231(a)(1) with respect to Partnership's 2020 taxable year. Assuming no AAR has been filed with respect to Partnership's 2020 taxable year and the IRS has not yet mailed a NOPPA under section 6231(a)(2) with respect to Partnership's 2020 taxable year, the period for making partnership adjustments for Partnership's 2020 taxable year expires on the date determined under paragraph (a)(1) of this section, March 15, 2024.
The facts are the same as in
The facts are the same as in
The facts are the same as in
The facts are the same as in
(f)
(2)
(a)
(1)
(i) In the case of an adjustment pursuant to the decision of a court in a proceeding brought under section 6234, such decision becomes final;
(ii) In the case of an administrative adjustment request (AAR) under section 6227, such AAR is filed; or
(iii) In any other case, a notice of final partnership adjustment is mailed under section 6231 or, if the partnership waives the restrictions under section 6232(b) (regarding limitations on assessment), the waiver is executed by the IRS.
(2)
(3)
(4)
(5)
(6)
(ii)
(A) Any item or amount with respect to the partnership (as defined in paragraph (a)(6)(iii) of this section) which is relevant in determining the tax liability of any person under chapter 1 of the Code (chapter 1) (as defined in paragraph (a)(6)(iv) of this section);
(B) Any partner's distributive share of any such item or amount; and
(C) Any imputed underpayment determined under subchapter C of chapter 63 of the Code (subchapter C of chapter 63).
(iii)
(iv)
(v)
(A) The character, timing, source, and amount of the partnership's income, gain, loss, deductions, and credits;
(B) The character, timing, and source of the partnership's activities;
(C) The character, timing, source, value, and amount of any contributions to, and distributions from, the partnership;
(D) The partnership's basis in its assets, the character and type of the assets, and the value (or revaluation such as under § 1.704-1(b)(2)(iv)(
(E) The amount and character of partnership liabilities and any changes to those liabilities from the preceding tax year;
(F) The category, timing, and amount of the partnership's creditable expenditures;
(G) Any item or amount resulting from a partnership termination;
(H) Any item or amount of the partnership resulting from an election under section 754;
(I) Partnership allocations and any special allocations; and
(J) The identity of a person as a partner in the partnership.
(vi)
Partnership enters into a transaction with A to purchase widgets for $100 in taxable year 2020. Partnership pays A $100 for the widgets. Any deduction or expense of the Partnership for the purchase of the widgets is an item or amount with respect to Partnership because it is shown on Partnership's return and is relevant to determining the liability of any person under chapter 1 pursuant to paragraphs (a)(6)(iii) and (iv) of this section. Therefore, the deduction or expense is a partnership-related item. However, the income to A resulting from the transaction with Partnership is not an item or amount with respect to Partnership under paragraph (a)(6)(iii) of this section because although the amount of income relates to a transaction with Partnership and Partnership is required to show a deduction or expense related to the payment to A, the amount of income to A is not shown or required to be shown on Partnership's return. It is only required to be shown of the return of A, a person other than Partnership and requires determinations about A's reporting of the item. Accordingly, the amount of income shown, or required to be shown, by A on his return is not a partnership-related item.
B loans Partnership $100 in Partnership's 2020 taxable year. Partnership makes an interest payment to B in 2020 of $5. Partnership's liability relating to the loan by B to Partnership and the $5 of interest expense paid by the Partnership are items or amounts that are with respect to Partnership because they were shown on Partnership's return and are relevant in determining the
On its partnership return for the 2020 tax year, Partnership reported $200 of non-cash charitable contributions related to its contribution of merchandise. Partnership has two equal partners for the 2020 tax year: C and D, both individuals. Partnership correctly reports $100 in non-cash charitable contributions to both C and D for the 2020 taxable year. On her return for the 2020 taxable year, C erroneously deducts the entire $100 of non-cash charitable contributions, even though C's deduction for charitable contributions would be limited by section 170(b)(1)(A) to $50 because of C's income. The $100 of non-cash charitable contribution reported by Partnership to C is a partnership-related item. However, the amount of the deduction taken by C on her return for 2020 and the amount of that deduction allowed after application of the limitation contained in section 170(b)(1)(A) to the $100 in non-cash charitable contributions reported by Partnership to C is not a partnership-related item under paragraph (a)(6)(ii) of this section because it is not with respect to the partnership.
The facts are the same as in
(7)
(8)
(9)
(10)
(b)
(2)
(a)
(i) 60 days after the suspension ends, for adjustments or assessments; and
(ii) 6 months after the suspension ends, for collection.
(2)
(3)
(4)
(i) An administrative proceeding with respect to a partnership under subchapter C of chapter 63;
(ii) The mailing of any notice with respect to a proceeding with respect to a partnership under subchapter C of chapter 63, including:
(A) A notice of administrative proceeding;
(B) A notice of proposed partnership adjustment; and
(C) A notice of final partnership adjustment;
(iii) A demand for tax returns;
(iv) The assessment of any tax, including the assessment of any imputed underpayment with respect to a partnership; and
(v) The issuance of notice and demand for payment of an assessment under subchapter C of chapter 63 (but see section 362(b)(9)(D) of Title 11 of the United States Code regarding the timing of when a tax lien takes effect by reason of such assessment).
(b)
(2)
(a)
(2)
(3)
(b)
(i) The partnership terminates within the meaning of section 708(b)(1); or
(ii) The partnership does not have the ability to pay, in full, any amount due under the provisions of subchapter C of chapter 63 for which the partnership is or becomes liable. For purposes of this section, a partnership does not have the ability to pay if the IRS determines that the amount due with respect to the partnership is not collectible based on the information the IRS has at the time of such determination.
(2)
(i) A valid election under section 6226 in effect with respect to any imputed underpayment (as defined in § 301.6241-1(a)(3));
(ii) Received a statement under section 6226(a)(2) (or § 301.6226-3(e)) and has furnished statements to its partners in accordance with § 301.6226-3(e)(3); or
(iii) Not paid any amount required to be paid under subchapter C of chapter 63.
(3)
(4)
(c)
(2)
(d)
(ii)
(2)
(e)
(2)
(i) The adjustments are taken into account by the applicable former partner (as described in paragraph (d) of this section), rather than the reviewed year partners (as defined in § 301.6241-1(a)(9)); and
(ii) The partnership must furnish statements to the former partners and file the statements with the IRS no later than 30 days after the date of the notification to the partnership that the IRS has determined that the partnership has ceased to exist.
(3)
(f)
The IRS initiates a proceeding under subchapter C of chapter 63 with respect to the 2020 partnership taxable year of Partnership. During 2023, in accordance with section 6235(b), Partnership extends the period of limitations on adjustments under section 6235(a) until December 31, 2025. On February 1, 2025, the IRS mails Partnership a notice of final partnership adjustment (FPA) that determines partnership adjustments that result in a single imputed underpayment. Partnership does not timely file a petition under section 6234 and does not make a valid election under section 6226. On June 2, 2025, the IRS mails Partnership notice and demand for payment of the amount due resulting from the adjustments determined in the FPA. Partnership fails to make a payment. On September 1, 2029, the IRS determines Partnership ceases to exist for purposes of this section because the Partnership does not have the ability to pay under paragraph (b)(1)(ii) of this section. Under § 301.6241-1(a)(1), the adjustment year is 2025 and A and B, both individuals, are the only adjustment year partners of Partnership during 2025. Accordingly, under paragraph (d)(1) of this section, A and B are former partners. Therefore, A and B are required to take their share of the partnership adjustments determined in the FPA into account under paragraph (e) of this section.
The IRS initiates a proceeding under subchapter C of chapter 63 with respect to the 2020 partnership taxable year of P, a partnership. G, a partnership that has an election under section 6221(b) in effect for the 2020 taxable year, is a partner of P during 2020 and for every year thereafter. On February 3, 2025, the IRS mails P an FPA that determines partnership adjustments that result in a single imputed underpayment. P does not timely file a petition under section 6234 and does not make a timely election under section 6226. On May 6, 2025, the IRS mails P notice and demand for payment of the amount due resulting from the adjustments determined in the FPA. P does not make a payment. On September 1, 2025, the IRS determines P ceases to exist for purposes of this section because P does not have the ability to pay under paragraph (b)(1)(ii) of this section. G terminated under section 708(b)(1) on December 31, 2024. On September 1, 2025, the IRS determines that G ceased to exist in 2024 for purposes of this section in accordance with paragraph (b)(1)(i) of this section. J and K, individuals, were the only partners of G during 2024. Therefore, under paragraph (d)(1)(ii) of this section, J and K, the partners of G during G's 2024 partnership taxable year, are the former partners of G for purposes of this section. Therefore, J and K are required to take into account their share of the adjustments contained in the statement furnished by P to G in accordance with paragraph (e) of this section.
(g)
(2)
(a)
(b)
(2)
(a)
(b)
(c)
(1) Any taxable year for which an election under section 6221(b) is in effect, treating the return as if it were filed by a partnership for the taxable year to which the election relates; and
(2) Any taxable year for which a valid section 761(a) election is made (regarding election out of subchapter K of chapter 1 of the Internal Revenue Code for certain unincorporated organizations).
(d)
(2)
(a)
(2)
Partnership, a partnership created or organized in the United States, has two equal partners, A and B. A is a nonresident alien who is a resident of Country A, and B is a U.S. citizen. In 2018, Partnership earned $200 of U.S. source royalty income. Partnership was required to withhold 30 percent of the gross amount of the royalty income allocable to A unless Partnership had documentation that it could rely on to establish that A was entitled to a reduced rate of withholding. See §§ 1.1441-1(b)(1) and 1.1441-5(b)(2)(i)(A) of this chapter. Partnership withheld $15 from the $100 of royalty income allocable to A based on its incorrect belief that A is entitled to a reduced rate of withholding under the U.S.-Country A Income Tax Treaty. In 2020, the IRS determines in an examination of Partnership's Form 1042, Annual Withholding Tax Return for U.S. Source Income of Foreign Persons, that Partnership should have withheld $30 instead of $15 on the $100 of royalty income allocable to A because Partnership failed to obtain documentation from A establishing a valid treaty claim for a reduced rate of withholding. The tax imposed on Partnership for its failure to withhold on that income, however, is not a tax imposed by chapter 1. Rather, it is a tax imposed by chapter 3, which is not a partnership-related item under § 301.6241-1(a)(6)(ii). Therefore, in accordance with section 6221(a), the adjustment to increase Partnership's withholding tax liability by $15 is not determined under subchapter C of chapter 63, and instead must be determined as part of the Form 1042 examination.
Partnership, a partnership created or organized in the United States, has two equal partners, A and B. A is a nonresident alien who is a resident of Country A, and B is a U.S. citizen. In 2018, Partnership earned $100 of U.S. source dividend income. Partnership was required to report the dividend income on its 2018 Form 1065, U.S. Return of Partnership Income, and withhold 30 percent of the gross amount of the dividend income allocable to A unless Partnership had documentation that it could rely on to establish that A was entitled to a reduced rate of withholding. See §§ 1.1441-1(b)(1) and 1.1441-5(b)(2)(i)(A) of this chapter. In 2020, in an examination of Partnership's Form 1042, the IRS determines that Partnership earned but failed to report the $100 of U.S. source dividend income in 2018. The adjustment to increase Partnership's dividend income by $100 is an adjustment to a partnership-related item. The tax imposed on Partnership for its failure to withhold on that income, however, is not a tax imposed by chapter 1; rather, it is a tax imposed by chapter 3. Pursuant to § 301.6221(a)-1(a), only chapter 1 tax attributable to adjustments to partnership-related items is assessed under subchapter C of chapter 63. Therefore, because the tax imposed with respect to the adjustment is a chapter 3 tax, under paragraph (a)(1) of this section, the IRS may determine, assess, and collect chapter 3 tax attributable to an adjustment to a partnership-related item without conducting a proceeding under subchapter C of chapter 63. Accordingly, the IRS may determine the chapter 3 tax in the examination of Partnership's Form 1042 by adjusting Partnership's withholding tax liability by an additional $15 for failing to withhold on the $50 of dividend income allocable to A. However, the IRS must initiate an administrative proceeding under subchapter C of chapter 63 to make any adjustments for purposes of chapter 1 attributable to the income. If the IRS subsequently initiates an administrative proceeding under subchapter C of chapter 63 and makes an adjustment to the same item of income, the portion of the dividend income allocable to A will be disregarded in the calculation of the total netted partnership adjustment to the extent that the chapter 3 tax has been collected with respect to such income. See § 301.6225-1(b)(3).
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National Marine Fisheries Service (NMFS), National Oceanic and Atmospheric Administration (NOAA), Commerce.
Proposed rule; request for comments.
NMFS' Office of Protected Resources has received a request from NMFS' Southeast Fisheries Science Center (SEFSC) for authorization to take marine mammals incidental to fisheries research conducted in the Atlantic Ocean along the southeastern U.S. coast and select estuaries, the Gulf of Mexico and select estuaries, and the Caribbean Sea over the course of five years from the date of issuance. We have also received a request from the Texas Parks and Wildlife Department (TPWD) for authorization to take marine mammals incidental to fisheries research in Texas bay systems. Pursuant to the Marine Mammal Protection Act (MMPA), NMFS is requesting comments on its proposal to issue regulations to the SEFSC and, separately, TPWD, to incidentally take marine mammals during the specified activities. NMFS will consider public comments prior to making any final decision on the issuance of the requested MMPA authorizations and agency responses will be summarized in the final notice of our decision.
Comments and information must be received no later than March 29, 2019.
You may submit comments on this document, identified by NOAA-NMFS-2019-0016, by any of the following methods:
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Jaclyn Daly, Office of Protected Resources, NMFS, (301) 427-8401. Electronic copies of the application and supporting documents, as well as a list of the references cited in this document, may be obtained online at:
This proposed rule, to be issued under the authority of the MMPA (16 U.S.C. 1361
Section 101(a)(5)(A) of the MMPA (16 U.S.C. 1371(a)(5)(A)) directs the Secretary of Commerce to allow, upon request, the incidental, but not intentional taking of small numbers of marine mammals by U.S. citizens who engage in a specified activity (other than commercial fishing) within a specified geographical region for up to five years if, after notice and public comment, the agency makes certain findings and issues regulations that set forth permissible methods of taking pursuant to that activity, as well as monitoring and reporting requirements.
Section 101(a)(5)(A) of the MMPA and the implementing regulations at 50 CFR part 216, subpart I provide the legal basis for issuing this proposed rule containing five-year regulations and Letters of Authorization. As directed by this legal authority, this proposed rule contains mitigation, monitoring, and reporting requirements.
Following is a summary of the major provisions for the SEFSC within the proposed rulemaking. The SEFSC is required to:
• Delay setting or haul in gear if marine mammal interaction may occur.
• Monitor prior to and during sets for signs of potential marine mammal interaction.
• Implement the “move-on rule” mitigation strategy during select surveys (note: this measure does not apply to bottlenose dolphins).
• Limit gear set times (varies based on gear type).
• Haul gear immediately if marine mammals may interact with gear.
• Utilize dedicated marine mammal observations during select surveys.
• Prohibit chumming.
• Continue investigation on the effectiveness of modifying lazy lines to reduce bottlenose dolphin entanglement risk.
• Establish and convene the South Carolina Department of Natural Resources (SCDNR) Working Group to better understand bottlenose dolphin entanglement events and apply effective mitigation strategies.
Following is a summary of the major provisions for the TPWD within the proposed rulemaking. The TPWD is required to:
• Set only new or fully repaired gill nets thereby eliminating holes.
• Set gillnets with minimal slack and a short marker buoy attached to the deep end of the net.
• Conduct dedicated marine mammal observations at least 15 minutes prior to setting nets and avoid setting nets if dolphins are observed at or approaching the sampling station.
• Minimize soak time by utilizing the “last out/first in” strategy for gillnets set in grids where marine mammals have been encountered within the last 5 years.
• Avoid fishing grids where dolphins have interacted with gear on more than one occasion or where multiple adjacent grids have had at least one dolphin encounter.
• Modify gillnets to avoid more than a 4 inch (in.) gap between float/lead line and net when net is set.
Sections 101(a)(5)(A) and (D) of the MMPA (16 U.S.C. 1361
An authorization for incidental takings shall be granted if NMFS finds that the taking will have a negligible impact on the species or stock(s), will not have an unmitigable adverse impact on the availability of the species or stock(s) for subsistence uses (where relevant), and if the permissible methods of taking and requirements pertaining to the mitigation, monitoring and reporting of such takings are set forth.
NMFS has defined “negligible impact” in 50 CFR 216.103 as an impact resulting from the specified activity that cannot be reasonably expected to, and is not reasonably likely to, adversely affect the species or stock through effects on annual rates of recruitment or survival. The MMPA states that the term “take” means to harass, hunt, capture, kill or attempt to harass, hunt, capture, or kill any marine mammal.
Except with respect to certain activities not pertinent here, the MMPA defines “harassment” as any act of pursuit, torment, or annoyance which (i) has the potential to injure a marine mammal or marine mammal stock in the wild (Level A harassment); or (ii) has the potential to disturb a marine mammal or marine mammal stock in the wild by causing disruption of behavioral patterns, including, but not limited to, migration, breathing, nursing, breeding, feeding, or sheltering (Level B harassment).
To comply with the National Environmental Policy Act of 1969 (NEPA; 42 U.S.C. 4321
Accordingly, NMFS is preparing an Environmental Assessment (EA) to consider the environmental impacts associated with the issuance of the proposed regulations to SEFSC and TPWD. NMFS'
On May 4, 2015, NMFS Office of Protected Resources (OPR) received an application from the SEFSC for a rulemaking and associated 5-year Letter of Authorization (LOA) to take marine mammals incidental to fisheries research activities conducted by the SEFSC and 18 cooperating research partners in the Atlantic Ocean Research Area (ARA), Gulf of Mexico Research Area (GOMRA), and Caribbean Research Area (CRA). The SEFSC submitted a revised draft in October 2015, followed by another revision on April 6, 2016, which we deemed adequate and complete. On April 22, 2016 (81 FR 23677), we published a notice of receipt of the SEFSC's application in the
On July 29, 2015, NMFS received an application from TPWD requesting authorization for take of marine mammals incidental to fishery-independent monitoring activities in Texas. On January 6, 2017 (82 FR 1721), we published a notice of receipt of the TPWD's application in the
The SEFSC is the research arm of NMFS in the Southeast Region. The SEFSC plans, develops, and manages a multidisciplinary program of basic and applied research to generate the information necessary for the conservation and management of the region's living marine resources, including the region's marine and anadromous fish and invertebrate populations to ensure they remain at sustainable and healthy levels. The SEFSC collects a wide array of information necessary to evaluate the status of exploited fishery resources and the marine environment from fishery independent (
The SEFSC plans to administer, fund, or conduct 74 fishery-independent survey programs over the five-year period the proposed regulations would be effective (see Table 1-1 in the SEFSC's application). The SEFSC works with 18 Federal, state, or academic partners to conduct these surveys (see
Many SEFSC surveys only occur at certain times of the year to align with the target species and age class being researched (see Table 1-1 in SEFSC's application); however, in general, the SEFSC conducts some type of sampling year round in various locations. Specific dates and duration of individual surveys are inherently uncertain because they are based on congressional funding levels, weather conditions, and ship contingencies. For example, some surveys are only conducted every two or three years or when funding is available. Timing of the surveys is a key element of their design. Oceanic and atmospheric conditions, as well as ship contingencies, often dictate survey schedules even for routinely-conducted surveys. In addition, cooperative research is designed to provide flexibility on a yearly basis in order to address issues as they arise. Some cooperative research projects last multiple years or may continue with modifications. Other projects only last one year and are not continued. Most cooperative research projects go through an annual competitive selection process to determine which projects should be funded based on proposals developed by many independent researchers and fishing industry participants. The exact location of survey effort also varies year to year (albeit in the same general area) because they are often based on randomized sampling designs. Year-round, in all research areas, there is one or more than one survey planned that has the potential to take marine mammals.
TPWD conducts a long-term standardized fishery-independent monitoring program to assess the relative abundance and size of finfish and shellfish in ten Texas bay systems using gillnets set perpendicular to the shoreline. Gill nets are set overnight during each spring and fall season for a total of four weeks per year. Bottlenose dolphins have the potential to become entangled in gillnet gear which can result in M/SI harassment.
The SEFSC conducts research in three research areas: The Atlantic Ocean from North Carolina to Florida and associated estuaries (ARA), the Gulf of Mexico and associated estuaries (GOMRA), and the Caribbean around Puerto Rico and the US Virgin Islands (CRA). Research surveys occur both inside and outside the U.S. Exclusive Economic Zone (EEZ), and sometimes span across multiple ecological, physical, and political boundaries (see Figure1-2 in the SEFSC's application for map). With respect to gear, Appendix B in the SEFSC Draft Programmatic Environmental Assessment (PEA) includes a table and figures showing the spatial and temporal distribution of fishing gears used during SEFSC research.
The three research areas fully or partially encompass four Large Marine Ecosystems (LMEs): The Northeast U.S. Continental Shelf LME (NE LME), the Southeast U.S. Continental Shelf LME (SE LME), the Gulf of Mexico LME, (GOM LME), and the Caribbean Sea LME (CS LME). LMEs are large areas of coastal ocean space, generally include greater than 200,000 square kilometers (km
The ARA constitutes more than 530,000 square miles (mi
The GOMRA encompasses more than 800,000 mi
The CRA is the smallest of the SEFSC research areas (approximately 400,000 mi
TPWD conducts fisheries research using gillnets in ten Texas bay systems: Laguna Madre, Corpus Christi Bay, Aransas Bay, San Antonio Bay, Matagorda Bay, East Matagorda Bay, Cedar Lakes, West Bay, Galveston Bay, and Sabine Lake (see Figure 1 and 2 in TPWD's application). These systems are wide and shallow with little tidal elevation change.
The Federal government has a trust responsibility to protect living marine resources in waters of the U.S., also referred to as Federal waters. These waters generally lie 3 to 200 nautical miles (nm) from the shoreline. Those waters 3-12 nm offshore comprise territorial waters and those 12-to-200 nm offshore comprise the Exclusive Economic Zone (EEZ), except where other nations have adjacent territorial claims. NOAA also conducts research to foster resource protection in state waters (
The SEFSC conducts multi-disciplinary research programs to provide management information to support national and regional programs of NMFS and to respond to the needs of Regional Fishery Management Councils (FMCs), interstate and international fishery commissions, Fishery Development Foundations, government agencies, and the general public. SEFSC develops the scientific information required for fishery resource conservation, fishery development and utilization, habitat conservation, and protection of marine mammals and endangered marine species. Research is pursued to address specific needs in population dynamics, fishery biology and economics, engineering and gear development, and protected species biology. Specifically, research includes monitoring fish stock recruitment, abundance, survival and biological rates, geographic distribution of species and stocks, ecosystem process changes, and marine ecological research.
To carry out this research, the SEFSC proposes to administer or conduct 74 survey programs during the 5-year period the proposed regulations would be effective; however, only 44 surveys have the potential to take marine mammals from gear interaction or acoustic harassment. Surveys would be carried out by SEFSC scientists alone or in combination with Federal, state, or academic partners while some surveys would be carried out solely by cooperating research partners. Surveys not conducted by SEFSC staff are included here because they are funded or have received other support (
A trammel net is a type of gillnet. However, unlike single wall gillnets, which will catch a narrow range of fish sizes, a trammel net is a type of gillnet that will catch a wide variety of fish sizes. Essentially, a trammel net is three layers of netting tied together on a common floatline and common leadline. The two outer layers of netting (known as walls or brails) are constructed out of large mesh netting (12 in to 18 in square) with a twine size of #9 multifilament nylon or 0.81 millimeter (mm) to 0.90 mm monofilament. The light-weight or fine netting sandwiched between the two walls is usually small mesh multifilament or monofilament gill netting. Trammel nets have a large amount of lightweight gill netting hung in the nets, and fish will be caught by gilling or by tangling in the excess netting.
Trammel nets are only used by the SCDNR in the ARA. The SCDNR sets trammel nets in depths of 6 ft or less along a shoreline. Scientists monitor the immediate area 15 minutes prior to deploying the gear. Before the net is set, while the net is being deployed, during the soak, and during haulback, the scientists monitor the net and waters around the net, maintaining a lookout for protected species. Survey protocol calls for a short, 10 minute soak time before the net is hauled.
A total of six survey programs (3 in GOMRA, 3 in ARA) utilize gillnets to accomplish the SEFSC's research objectives (see Table 1-1 in SEFSC's application). In total, 545 set gillnet deployments and 96 sinking gillnet deployments would be made in the GOMRA, primarily in bays, sounds, and estuaries. These surveys occur year-round and each set typically lasts up to 1 hour with the exception of the gillnets fished in shallow waters (0.2 to 1 m) for the Smalltooth Sawfish Abundance Survey which can last 1 to 4 hours. In the ARA, 120 drift gillnet sets would be deployed in rivers and estuaries for the American Shad Drift Gillnet Survey conducted by the SCDNR.
The SEFSC uses several types of trawl nets: Aleutian Wing Trawl, otter trawls, semi-balloon shrimp trawl, mongoose trawl, western jib shrimp trawls, skimmer trawls, roller frame trawl, and modified beam trawl. Bottom trawls (
Trawls typically used in estuaries include semi-balloon shrimp trawls (fished near creeks and rivers of Georgia Sound) and miniature roller-frame trawls (fished at various South Florida estuaries). In coastal waters, the types of trawls (and operating depths) SEFSC and partners typically use include modified beam trawls (1-5 ft), otter trawls (3-360 ft), benthic trawls (up to 7 ft), western jib shrimp trawls (10-20 ft), and skimmer trawls (7-20 ft). Typical offshore trawls (and operating depths) include high speed midwater trawls (> 1,600 ft), Aleutian wing trawls (> 1,600 ft), and high-opening bottom trawls (160 to 1,600 ft).
All trawls have a lazy line attached to the codend. The lazy line floats free during active trawling, and as the net is hauled back, it is retrieved with a boat- or grappling-hook to assist in guiding and emptying the trawl nets. Twisted, three-strand, polypropylene is the most commonly used type of rope for lazy lines due to cost, strength, handling, and low specific gravity (0.91), which allows it to float.
Active acoustic devices (described later) incorporated into the research vessel and the trawl gear monitor the position and status of the net, speed of the tow, and other variables important to the research design. Gear details, schematics, and photos associated with each of these trawl net categories can be found in Table 1-1 of the SEFSC's application and Appendix A of the SEFSC's Draft PEA.
For research purposes, the speed and duration of the tow and the characteristics of the net must be standardized to allow meaningful comparisons of data collected at different times and locations. Typically, tow speed ranges from 2-4 knots (kts) while duration can range from thirty seconds to 3 hours at target depth; however most trawls last less than 30 minutes. The shorter trawls (30 seconds to 30 minutes) occur in estuaries and coastal waters less than 500 meters in depth while the longer trawls (1-3 hours) are reserved for offshore, deepwater research. The only exceptions to this are the BRD Evaluation Survey designed to test various gear for the shrimp fishery in the Gulf of Mexico and the SEFSC-South Atlantic (SA) Turtle Exclusion Device (TED) Evaluation Survey designed to test bycatch reduction devices and TEDs for commercial fishing vessels in the Atlantic Ocean. A total of 40 paired BRD Evaluation Survey trawls occur annually in May and August in state and Federal nearshore and offshore waters, including Mississippi Sound. Each trawl can last up to 2 hours. Fifty paired SEFSC-SA TED Evaluation Survey trawls occur annually from November through April in state and Federal waters off Georgia and Florida, and each trawl can last up to 4 hours.
1. Bongo nets are used by the SEFSC during various plankton surveys conducted throughout the three research areas. Bongo nets are also used to collect additional data during shark and finfish surveys. Bongo nets consist of two cylindrical nets that come in various diameters and fine mesh sizes (Figure A-13). The bongo nets are towed through the water at an oblique angle to sample plankton over a range of depths. During each plankton tow, the bongo nets are deployed to a depth of approximately 210 m and are then retrieved at a controlled rate so that the volume of water sampled is uniform across the range of depths. In shallow areas, the sampling protocol is adjusted to prevent contact between the bongo nets and the seafloor. A collecting bucket, attached to the end of the net, is used to contain the plankton sample. When the net is retrieved, the collecting bucket can be detached and easily transported to a laboratory. Some bongo nets can be opened and closed using remote control to enable the collection of samples from particular depth ranges. A group of depth-specific bongo net samples can be used to establish the vertical distribution of zooplankton species in the water column at a site. Bongo nets are generally used to collect zooplankton for research purposes and are not used for commercial harvest. There are no documented takes of marine mammals incidental to SEFSC research using bongo nets.
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Longline vessels fish with baited hooks attached to a mainline (or groundline). The length of the longline and the number of hooks depend on the species targeted, the size of the vessel, and the purpose of the fishing activity. Hooks are attached to the mainline by another thinner line called a gangion. The length of the gangion and the distance between gangions depends on the purpose of the fishing activity. Depending on the fishery, longline gear can be deployed on the seafloor (bottom longline), in which case weights are
Target species for pelagic longline surveys conducted by the SEFSC are pelagic sharks and finfish species. These pelagic longline protocols have a five-nautical mile mainline with 100 gangions. The time period between completing deployment and starting retrieval of the longline gear is referred to as the soak time. Soak time is an important parameter for calculating fishing effort and is typically three hours for SEFSC surveys. Short soak times can help reduce longline interactions with sea turtles and marine mammals. Bottom longlines used by the SEFSC to survey species in deeper water, including sablefish, have a one-mile long monofilament mainline that is anchored on the seafloor with weights at the mid-point and ends. The line is marked at the surface by radar high flyers.
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Underwater acoustic sources typically used for scientific purposes operate by creating an oscillatory overpressure through rapid vibration of a surface, using either electromagnetic forces or the piezoelectric effect of some materials. A vibratory source based on the piezoelectric effect is commonly referred to as a transducer. Transducers are usually designed to excite an acoustic wave of a specific frequency, often in a highly directive beam, with the directional capability increasing with operating frequency. The main parameter characterizing directivity is the beam width, defined as the angle subtended by diametrically opposite “half power” (-3 dB) points of the main lobe. For different transducers at a single operating frequency, the beam width can vary from 180 ° (almost omnidirectional) to only a few degrees. Transducers are usually produced with either circular or rectangular active surfaces. For circular transducers, the beam width in the horizontal plane (assuming a downward pointing main beam) is equal in all directions, whereas rectangular transducers produce more complex beam patterns with variable beam width in the horizontal plane. In general, the more narrow the beam, the shorter distance to which the sound propagates.
The types of active sources employed in fisheries acoustic research and monitoring may be considered in two broad categories here (Category 1 and Category 2), based largely on their respective operating frequency (
Before identifying the active acoustic sources used by the SEFSC, we further describe scientific sonar sound source characteristics here relevant to our analysis. Specifically, we look at the following two ways to characterize sound: By its temporal (continuous or intermittent) and its pulse properties (
Sounds can also be characterized as either impulsive or non-impulsive. Impulsive sounds are typically transient, brief (< 1 sec), broadband, and consist of a high peak pressure with rapid rise time and rapid decay (ANSI, 1986; NIOSH, 1998). Impulsive sounds, by definition, are intermittent. Non-impulsive sounds can be broadband, narrowband or tonal, brief or prolonged, and typically do not have a high peak sound pressure with rapid rise/decay time that impulsive sounds do (ANSI 1995; NIOSH 1998). Non-impulsive sounds can be intermittent or continuous. Scientific sonars, such as the ones used by the SEFSC, are characterized as intermittent and non-impulsive. Discussion on the appropriate harassment threshold associated with these types of sources based on these characteristics can be found in the
Category 1 active fisheries acoustic sources include those with high output frequencies (>180 kHz) that are outside the known functional hearing capability of any marine mammal. Example Category 1 sources include short range echosounders and acoustic Doppler current profilers). These sources also generally have short duration signals and highly directional beam patterns, meaning that any individual marine mammal would be unlikely to even detect a signal.
While sounds that are above the functional hearing range of marine animals may be audible if sufficiently loud (
Category 2 acoustic sources, which would be present on many vessels operating under this rulemaking include a variety of single, dual, and multi-beam echosounders (many with a variety of modes), sources used to determine the orientation of trawl nets, and several current profilers with lower output frequencies than Category 1 sources. Category 2 active acoustic sources have moderate to high output frequencies (10 to 180 kHz) that are generally within the functional hearing range of marine mammals and therefore have the potential to cause behavioral harassment. However, while likely potentially audible to certain species, these sources have generally short ping durations and are typically highly directional (
Category 2 active acoustic sources are unlikely to be audible to whales and most pinnipeds, whereas they may be detected by odontocete cetaceans and high frequency specialists. Category 2 sources are described further in detail below because, unlike Category 1 sources, they have the potential to take a marine mammal by Level B (behavioral) harassment.
The acoustic system used during a particular survey is optimized for surveying under specific environmental conditions (
Survey vessels may be equipped with multiple acoustic systems; each system has different advantages that may be utilized depending on the specific survey area or purpose. In addition, many systems may be operated at one of two frequencies or at a range of frequencies. Characteristics of these sources are summarized in Table 2.
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The SEFSC and its research partners use a variety of different types and sizes of vessels to meet their needs and objectives. Vessels may be owned and operated by NMFS, owned and operated by the cooperative partners, or chartered. Vessels vary in size, including, small fishing vessels (U.S. Coast Guard [USCG] Class A—up to 16 ft. and Class I—16 to <26 ft.), medium vessels (USCG Class II—26 to <40 ft. and Class III—40 to 65 ft.), USCG Small Research Vessel (R/V) (>65 ft. and <300 gross tons) and USCG Research Vessel (R/V) (>65 ft. and >300 gross tons). Several Motor Vessels (M/V) >65 feet and USCG Research Vessels are also chartered and used by partner agencies. Please see Appendix A of the SEFSC's Draft PEA for detailed information on all vessels over 65 ft used during fisheries research.
TPWD conducts a long-term standardized fishery-independent monitoring program to assess the relative abundance and size of finfish and shellfish in Texas bays. TPWD is mandated by the Texas Legislature to conduct continuous research and study the supply, economic value, environment, and breeding habits of the various species of finfish, shrimp and oysters under Parks and Wildlife Code sections 66.217, 76.302 and 77.004. Results from this program are primarily used by the agency to manage Texas' marine finfish and shellfish resources. Data are also available for use by other agencies (
The current sampling protocol began in the spring of 1983 for seven of the ten bay systems; the remaining three bay systems were gradually added. The number of gill net sets was standardized in 1985. The monitoring program utilizes a stratified random sample design, with each bay system as an independent stratum. Gill net sample locations are randomly selected from grids (1 minute latitude by 1 minute longitude), with each selected grid further subdivided into 144 5-second gridlets. Sample sites are then randomly selected from gridlets containing less than 15.2 m of shoreline.
TPWD utilizes gill nets to conduct fishery-independent modeling on relative abundance, diversity, and age
Gill nets are typically set in shallow open bay systems with little to no tidal movement. In this type of system, long gill net soak times are needed to catch a statistically-significant number of fish. The average number of fish caught in the overnight gill net sets is 90 fish per gill net which equates to 1 fish per 27 ft
Each gillnet is 183 m (600 ft) long, 1.2 m (3 ft) deep, and comprised of four 45 m (150 ft) long panels. Each panel is a different sized mesh: 7.6 cm (3 in.), 10.2 cm (4 in.), 12.7 cm (5 in.), and 15.2 cm (6 in.) to capture different sized fish. Each panel is sewn to the next panel; therefore, there are no gaps between panels. Currently, the float line and net mesh are tied together at 8 in. intervals. This results in a 6-8 in gap between the float line and the mesh when the net is set. TPWD will modify this design so that the float line and net mesh are tied together at 4 in. intervals. This will reduce the gap to approximately one to two inches. This gear modification would also be done for the lead line to reduce gaps between the lead line and net mesh. Reducing gaps between the lines and mesh are designed to minimize the potential of a dolphin getting its pectoral fins or flukes caught in these gaps.
Gill nets are set perpendicular to the shoreline with the smaller mesh end (3″ mesh panel) of the net anchored to the shoreline and the progressively larger mesh (up to 6″ mesh panel) extending baywards for 600 ft. All gill net are set in water depths ranging from 0.0-1.1 m on the shallow end of the net and from 0.1-4.6 m (0.33 to 15 ft) on the deep end of the net. However, 86 percent of gill net sets occur at a deep-end depth of 1.5 m (4 ft) or less. Where depths are greater than 4 ft, the top of the gillnet will be submerged because it is only 3 ft high. A marker bouy is typically attached to the float line at the intersection of each mesh panel (150 ft) with sufficant length line to reach the surface. When setting the net, TPWD pulls it as taut as possible with one person pulling on the net while the anchor is set.
Gill nets are set overnight during each spring and fall season. The spring season begins with the second full week in April and extends for ten weeks. The fall season begins with the second full week in September and extends for ten weeks. Nets are set within one hour before sunset and retrieved within 4 hours after the following sunrise. Soak times vary from approximately 12-14 hours. Gill nets are set overnight to eliminate day-use disturbances (boaters running the shoreline) that can alter normal fish behavior and movement patterns, reduce the amount of disturbance by and to anglers and boaters (user conflicts), and increase boater safety (reduced likelihood of striking nets). TPWD sets two to three nets on two separate nights for each of the 10 bay systems where they fish which are separated by at least 1 km and usually miles apart. No more than one gill net is set in the same grid on the same night, nor set more than two times in the same grid in a season. Fishing effort is evenly distributed between spring and fall season. Up to 90 sets per area could occur each year the proposed regulations would be valid. This sampling rate proposed for the next five years is identical to past sampling efforts.
Sections 3 and 4 of the SEFSC's application summarize available information regarding status and trends, distribution and habitat preferences, and behavior and life history, of the potentially affected species. Additional information regarding population trends and threats may be found in NMFS' Stock Assessment Reports (SAR;
Table 3a lists all species (n = 33) with expected potential for occurrence in ARA, GOMRA, and CRA and summarizes information related to the population or stock, including regulatory status under the MMPA and ESA and potential biological removal (PBR), where known. PBR is defined by the MMPA as the maximum number of animals, not including natural mortalities, that may be removed from a marine mammal stock while allowing that stock to reach or maintain its optimum sustainable population (as described in NMFS' SARs). The use of PBR in this analysis is described in later detail in the
Species that could occur in a given research area but are not expected to have the potential for interaction with SEFSC research gear or that are not likely to be harassed by SEFSC's use of active acoustic devices are listed here but omitted from further analysis. These include extralimital species, which are species that do not normally occur in a given area but for which there are one or more occurrence records that are considered beyond the normal range of the species. Extralimital or rarely sighted species within the SEFSC's ARA include the North Atlantic bottlenose whale (
Marine mammal abundance estimates presented in this document represent the total number of individuals that make up a given stock or the total number estimated within a particular study or survey area. NMFS' stock abundance estimates for most species represent the total estimate of individuals within the geographic area, if known, that comprises that stock. For some species, this geographic area may extend beyond U.S. waters. For some species, survey abundance (as compared to stock or species abundance) is the total number of individuals estimated within the survey area, which may or may not align completely with a stock's geographic range as defined in the SARs. These surveys may also extend beyond U.S. waters.
To provide a background for how estuarine bottlenose dolphin stocks are identified, we provide the following excerpt from the Bottlenose Dolphin Stock Structure Research Plan for the Central Northern Gulf of Mexico (NMFS, 2007) which more specifically describes the stock structure of bottlenose dolphins within the bays, sounds, and estuaries of the Gulf of Mexico: The distinct stock status for each of the 31 inshore areas of contiguous, enclosed, or semi-enclosed bodies of waters is community-based. That is, stock delineation is based on the finding, through photo-identification (photo-ID) studies, of relatively discrete dolphin “communities” in the few GOM areas that have been studied (Waring
All values presented in Table 3a and 3b are the most recent available at the time of publication and are available in the most recent SAR for that stock, including draft 2018 SARs (Hayes et al., 2018) available at
TRPs relevant to the fisheries research areas in this rule include the Atlantic Large Whale Take Reduction Plan (ALWTRP), the Bottlenose Dolphin Take Reduction Plan (BDTRP), and the Pelagic Longline Take Reduction Plan (PLTRP). The ALWTRP was developed to reduce serious injury and mortality of North Atlantic right, humpback, fin, and minke whales from Northeast/Mid-Atlantic lobster trap/pot, Atlantic blue crab trap/pot, Atlantic mixed species trap/pot, Northeast sink gillnet, Northeast anchored float gillnet, Northeast drift gillnet, Mid-Atlantic gillnet, Southeastern U.S. Atlantic shark gillnet, and Southeastern Atlantic gillnet fisheries (NMFS 2010c). Gear requirements vary by geographic area and date. Universal gear modification requirements and restrictions apply to all traps/pots and anchored gillnets, including: no floating buoy line at the surface; no wet storage of gear (all gear must be hauled out of the water at least once every 30 days); fishermen are encouraged, but not required, to maintain knot-free buoy lines; and all groundlines must be made of sinking line. Additional gear modification requirements and restrictions vary by location, date, and gear type. Additional requirements may include the use of weak links, and gear marking and configuration specifications. Detailed requirements may be found in the regional guides to gillnet and pot/trap gear fisheries available at
In 2006, NMFS implemented the BDTRP to reduce the serious injury and mortality of Western North Atlantic coastal bottlenose dolphins incidental to 13 Category I and II U.S. commercial fisheries. In addition to multiple non-regulatory provisions for research and education, the BDTRP requires modifications of fishing practices or gear for small, medium, and large-mesh gillnet fisheries from New York to Florida, and Virginia pound nets in Virginia state waters (50 CFR 229.35). The BDTRP also established seasonal closures for certain gillnet commercial fisheries in state waters. The following general requirements are contained with BDTRP: Spatial/temporal gillnet restrictions, gear proximity (fishermen must stay within a set distance of gear), gear modifications for gillnets and Virginia pound nets, non-regulatory gear modifications for crab pots, and other non-regulatory conservation measures (71 FR 24776, April 26, 2006; 77 FR 45268, July 31, 2012; and 80 FR 6925, February 9, 2015). Due to substantial differences between SEFSC research fishing practices (
The Pelagic Longline Take Reduction Plan (PLTRP) addresses incidental serious injury and mortality of long-finned and short-finned pilot whales and Risso's dolphins in commercial pelagic longline fishing gear in the Atlantic. Regulatory measures include limiting mainline length to 20 nm or less within the Mid-Atlantic Bight and posting an informational placard on careful handling and release of marine mammals in the wheelhouse and on working decks of the vessel (NMFS 2009). Currently, the SEFSC uses gear that is only 5 nm long and per the PLTRP, uses the Pelagic Longline Marine Mammal Handling and Release Guidelines for any pelagic longline sets made within the Atlantic EEZ.
From 2010 through 2014, NMFS declared a multi-year, multi-cetacean UME in response to the Deepwater Horizon (DWH) oil spill in the Northern Gulf of Mexico. The species and temporal and spatial boundaries included all cetaceans stranded in Alabama, Mississippi, and Louisiana from March 2010 through July 2014 and all cetaceans other than bottlenose dolphins stranded in the Florida Panhandle (Franklin County through Escambia County) from March 2010 through July 2014. The UME involved 1,141 cetacean strandings in the Northern Gulf of Mexico (5 percent stranded alive and 95 percent stranded dead).
The Deepwater Horizon Natural Resource Damage Assessment (NRDA) Trustees' 2016 Final Programmatic Damage Assessment and Restoration Plan (PDARP) and Final Programmatic Environmental Impact Statement (PEIS) quantified injuries to marine mammals in the Gulf of Mexico that were exposed to the oil spill, including bottlenose dolphins in four bay, sound, and estuary areas: Barataria Bay, the Mississippi River Delta, Mississippi Sound, and Mobile Bay (NRDA Trustees, 2016; DWH MMIQT, 2015). Both stocks are estimated to have been reduced significantly in population size from the DWH oil spill (DWH MMIQT 2015; Schwacke et al. 2017). According to the PDARP, 24 percent of the Mississippi Sound stock had adverse health effects from DWH oil spill. Of the pregnant females studied in Barataria Bay and Mississippi Sound between 2010 and 2014, 19.2 percent gave birth to a viable calf. In contrast, dolphin populations in Florida and South Carolina have a pregnancy success rate of 64.7 percent (DWH MMIQT, 2015).
Dolphin and whale species living farther offshore were also affected. Many of these species are highly susceptible to population changes because of their low initial population numbers. Thus, it is unclear how effectively these populations can recover from lower estimated injuries. For example, Deepwater Horizon oil exposure resulted in up to an estimated 7-percent decline in the population of endangered sperm whales, which will require 21 years to recover. For Bryde's whales, 48 percent of the population was impacted by Deepwater Horizon oil, resulting in up to an estimated 22-percent decline in population that will require 69 years to recover. For both nearshore and offshore populations, injuries were most severe in the years immediately following the spill. Health assessments on bottlenose dolphins in BBES and MS Sound have shown that there has been some improvement post spill, but that there are still persistent injuries (Smith et al. 2017).
In 2015, NOAA's Cetacean Density and Distribution Mapping Working Group identified Biologically Important Areas (BIAs) for 24 cetacean species, stocks, or populations in seven regions (US East Coast, Gulf of Mexico, West Coast, Hawaiian Islands, Gulf of Alaska, Aleutian Islands and Bering Sea, and Arctic) within U.S. waters through an expert elicitation process. BIAs are reproductive areas, feeding areas, migratory corridors, and areas in which small and resident populations are concentrated. BIAs are region-, species-, and time-specific. A description of the types of BIAs found within the SEFSC's fishery research areas follows:
The delineation of BIAs does not have direct or immediate regulatory consequences. Rather, the BIA assessment is intended to provide the best available science to help inform regulatory and management decisions
Hearing is the most important sensory modality for marine mammals underwater, and exposure to anthropogenic sound can have deleterious effects. To appropriately assess the potential effects of exposure to sound, it is necessary to understand the frequency ranges marine mammals are able to hear. Current data indicate that not all marine mammal species have equal hearing capabilities (
• Low-frequency cetaceans (mysticetes): Generalized hearing is estimated to occur between approximately 7 Hz and 35 kHz.
• Mid-frequency cetaceans (larger toothed whales, beaked whales, and most delphinids): Generalized hearing is estimated to occur between approximately 150 Hz and 160 kHz.
• High-frequency cetaceans (porpoises, river dolphins, and members of the genera Kogia and Cephalorhynchus; including two members of the genus Lagenorhynchus, on the basis of recent echolocation data and genetic data): Generalized hearing is estimated to occur between approximately 275 Hz and 160 kHz.
• Pinnipeds in water; Phocidae (true seals): Generalized hearing is estimated to occur between approximately 50 Hz to 86 kHz.
• Pinnipeds in water; Otariidae (eared seals): Generalized hearing is estimated to occur between 60 Hz and 39 kHz.
The pinniped functional hearing group was modified from Southall
For more detail concerning these groups and associated frequency ranges, please see NMFS (2016) for a review of available information. Thirty three marine mammal species (31 cetacean and 2 pinniped (both phocid) species) have the reasonable potential to co-occur with the proposed survey activities (Table 3a). Of the cetacean species that may be present, six are classified as low-frequency cetaceans (
This section includes a summary and discussion of the ways that components of the specified activity may impact marine mammals and their habitat. The “Estimated Take by Incidental Harassment” section later in this document includes a quantitative analysis of the number of individuals that are expected to be taken by this activity. The “Negligible Impact Analysis and Determination” section considers the content of this section, the “Estimated Take by Incidental Harassment” section, and the “Proposed Mitigation” section, to draw conclusions regarding the likely impacts of these activities on the reproductive success or survivorship of individuals and how those impacts on individuals are likely to impact marine mammal species or stocks.
In the following discussion, we consider potential effects to marine mammals from ship strike, gear interaction (
Vessel collisions with marine mammals, or ship strikes, can result in death or serious injury of the animal. Wounds resulting from ship strike may include massive trauma, hemorrhaging, broken bones, or propeller lacerations (Knowlton and Kraus, 2001). An animal at the surface may be struck directly by a vessel, a surfacing animal may hit the bottom of a vessel, or an animal just below the surface may be cut by a vessel's propeller. Ship strikes may kill an animal; however, more superficial strikes may result in injury. Ship strikes generally involve commercial shipping, which is much more common in both space and time than is research activity. Jensen and Silber (2004) summarized ship strikes of large whales worldwide from 1975-2003 and found that most collisions occurred in the open ocean and involved large vessels (
The severity of injuries typically depends on the size and speed of the vessel, with the probability of death or serious injury increasing as vessel speed increases (Knowlton and Kraus, 2001; Laist
In an effort to reduce the number and severity of strikes of the endangered North Atlantic right whale (
For vessels used in SEFSC-related research activities, transit speeds average 10 kn (but vary from 6-14 kn), while vessel speed during active sampling is typically only 2-4 kn. At sampling speeds, both the possibility of striking a marine mammal and the possibility of a strike resulting in serious injury or mortality are discountable. At average transit speed, the probability of serious injury or mortality resulting from a strike is less than fifty percent. However, it is possible for ship strikes to occur while traveling at slow speeds. For example, a NOAA-chartered survey vessel traveling at low speed (5.5 kn) while conducting multi-beam mapping surveys off the central California coast struck and killed a blue whale in 2009. The State of California determined the whale had suddenly and unexpectedly surfaced beneath the hull, with the result that the propeller severed the whale's vertebrae, and that this was an unavoidable event. This strike represents the only such incident in approximately 540,000 hours of similar coastal mapping activity (
In summary, we anticipate that vessel collisions involving SEFSC research vessels, while not impossible, represent unlikely, unpredictable events. Other than the 2009 and 2011 events, no other ship strikes have been reported from any fisheries research activities nationally. Given the relatively slow speeds of research vessels, the presence of bridge crew watching for obstacles at all times (including marine mammals), the presence of marine mammal observers on some surveys, and the small number of research cruises, we believe that the possibility of ship strike is discountable. Further, the implementation of the North Atlantic ship strike rule protocols will greatly reduce the potential for interactions with North Atlantic right whales. As such, no incidental take resulting from ship strike is anticipated nor is proposed to be authorized; therefore, this potential effect of research will not be discussed further.
The types of research gear used by the SEFSC were described previously under “Detailed Description of Activity.” Here, we broadly categorize these gears into those which we believe may result in marine mammal interaction and those which we consider to have an extremely unlikely potential to result in marine mammal interaction. Gears with the potential for marine mammal interaction include trawl nets (
Entanglement in Nets, Trawls, or Longlines—Gillnets, trawl nets, and longlines deployed by the SEFSC are similar to gear used in various commercial fisheries which have a history of taking marine mammals. Read
Gear interactions can result in injury or death for the animal(s) involved and/or damage to fishing gear. Coastal animals, including various pinnipeds, bottlenose dolphins, and harbor porpoises, are perhaps the most vulnerable to these interactions and set or passive fishing gear (
As described above, since 2002, NMFS Science Centers have been documenting and recording all fishery research related incidental takes of marine mammals in PSIT database. There is also a documented take on record from 2001. We present all takes documented by the SEFSC in Table 5.
TPWD also has a history of taking bottlenose dolphins during gillnet fisheries research. In 35 years of TPWD gill net sampling (1983-2017), and with over 26,067 gillnet sets, there have been 32 to 35 dolphin entangled in the net (range is due to possible double counting incidents or two animals being entangled at the same time but logged as one incident during early years of reporting). According to the incident reports submitted to NMFS, 7 encounters (comprising eight animals) resulted in mortality, 2 were serious injury, 14 animals were released alive, and the condition of 10 animals was recorded as unknown.
Commercial gillnet fisheries are also implicated in taking marine mammals. In the ARA, the mid-Atlantic gillnet fishery has the highest documented level of mortality of coastal morphotype common bottlenose dolphins. The sink gillnet gear in North Carolina is the largest component in terms of fishing effort and observed takes (Waring
Globally, at least seventeen cetacean species are known to feed in association with trawlers and individuals of at least 25 species are documented to have been killed by trawl nets, including several large whales, porpoises, and a variety of delphinids (Young and Iudicello, 2007; Karpouzli and Leaper, 2004; Hall
Interaction that does not result in the immediate death of the animal by drowning can cause injury (
As described in the
Lazy lines are most commonly made from polypropylene. Because polypropylene is manufactured in a manner that produces soft lay rope, it is limber and can be dropped in a pile. This property lends to the potential risk of half hitching around bottlenose dolphin flukes when they interact with the line. In addition, polypropylene rope does not absorb water or lose strength when wet and becomes prickly to the touch as it ages, which may contribute to bottlenose dolphin rubbing behavior.
When interacting with lazy lines, bottlenose dolphins are often observed rubbing, corkscrewing, or biting the aft portion of the line ahead of the point of attachment on the trawl (Greenman 2012). Although reasons for these behaviors are poorly understood, this type of interaction poses an entanglement threat. When corkscrewing on the lazy line, animals run the risk of the line wrapping around their fluke in a half-hitch preventing escapement. Soldevilla
The SEFSC Harvesting Systems Unit (HSU) has conducted limited research examining the potential use of lazy lines constructed of alternative materials. In 2007, the HSU conducted preliminary diver assisted trials with polydac and polyester hard lay ropes as a replacement for traditional polypropylene. Polydac rope is a blend of polyester and polypropylene. Compared to polypropylene, polydac rope has similar properties including negligible water absorption and ultraviolet (UV) light resistance. However, polydac may be constructed with a harder lay than traditional polypropylene rope, which prevents it from knotting easily. Divers found the polydac and polyester lines to be significantly stiffer and less pliable underwater than the conventional polypropylene lines. When towed, divers noted that the polypropylene rope was positively buoyant and arced upward, while polydac and polyester ropes were negatively buoyant and arced downward.
The 2007 diver evaluations were followed by sea trial evaluations of five different types of rope made from polypropylene, polyethylene, or nylon as lazy lines in a standard twin-rigged shrimp trawl configuration (Hataway 2008). The study utilized a Dual-Frequency Identification Sonar (DIDSON) to image bottlenose dolphins interacting with the lazy lines. Dolphin behaviors observed during the study included; rubbing, sliding down, and pulling the lazy line. No statistical analyses were conducted, but researchers noted that no differences in the frequency or types of interactions observed were apparent between line types.
In the estuary and coastal waters, dolphins are attracted to and are consistently present during fishery research trawls. Dolphins are known to attend operating nets in order to either benefit from disturbance of the bottom or to prey on discards or fish within the net. Researchers have also identified that holes in trawl nets from dolphins are typically located in net pockets where fish congregate. Pelagic trawls have the potential to capture cetaceans because the nets may be towed at faster speeds. These trawls are more likely to target species that are important prey for marine mammals (
According to the PSIT database, there are nine documented takes of marine mammals (7 ARA, 2 GOMRA) incidental to SEFSC trawl-based fishery research since 2002; all are bottlenose dolphins. In the ARA, all animals were taken in a bottom trawl while skimmer trawls were implicated in takes in the GOMRA. Six of the animals were dead upon net retrieval and two animals were released alive and determined not be serious injury. In 2001, a dolphin was caught in a bottom trawl during SCDNR's sea turtle research survey. Information regarding this take are sparse (date and location are unknown) but the animal was released alive. On July 28, 2006, and again later that year on October 5, bottlenose dolphins belonging to South Carolina/Georgia coastal and southern migratory coastal stock, respectively, was found dead in a bottom trawl net used during the fall Southeast Area Monitoring and Assessment Program (SEAMAP) SA Coastal Trawl survey. Both animals were taken back to partner labs for necropsy. On July 11, 2012, a bottlenose dolphin belonging to the South Carolina/Georgia coastal stock was also caught in a bottom trawl net during the In-Water Sea Turtle Research survey. The net was immediately retrieved and the animal was released alive, breathing without difficulty and swiftly swimming away. On August 2, 2012 a bottlenose dolphin also belonging to the South Carolina/Georgia coastal stock was captured in the trawl net during the summer SEAMAP-SA Coastal Trawl survey. The animal was dead upon net retrieval. Most recently, on July 20, 2016, a bottlenose dolphin belonging to the South Carolina/Georgia coastal stock was taken in a bottom trawl during the In-Water Sea Turtle Research survey. Upon net retrieval, a suspected juvenile bottlenose dolphin, approximately 6 feet in length, was observed in the starboard codend of the trawl net. Although the animal was released alive, it was listless and not actively swimming when returned to the water. Therefore, the event was documented as a take by mortality.
In the GOMRA, a bottlenose dolphin belonging to the Mississippi Sound, Lake Borge, Bay Boudreau stock was captured in a skimmer trawl on October 23, 2013, during the SEFSC Skimmer Trawl TED Testing survey. The animal was observed breathing at the surface in the trawl upon retrieval of tailbag. To free the animal, the researchers redeployed the bag and slowed the vessel, allowing the animal to swim away unharmed. On October 1, 2014, a bottlenose dolphin belonging to the same stock was taken during the same survey. The animal was dead upon net retrieval.
In November 2010, NMFS elevated the Southeast Atlantic shrimp trawl fishery from a Category II to Category III fishing. From May through December 2010, Greenman
Large whales may become entangled in a longline and then break free with a portion of gear trailing, resulting in alteration of swimming energetics due to drag and ultimate loss of fitness and potential mortality (Andersen
Bottom longlines pose less of a threat to marine mammals due to their deployment on the ocean bottom but can still result in entanglement in buoy lines or hooking as the line is either deployed or retrieved. The rate of interaction between longline fisheries and marine mammals depends on the degree of overlap between longline effort and species distribution, hook style and size, type of bait and target catch, and fishing practices (such as setting/hauling during the day or at night).
Rod and reel gear carry less potential for marine mammal interaction, but the use of baited hooks in the presence of inquisitive marine mammals carries some risk. However, the small amount of hook and line operations in relation to longline operations and the lack of extended, unattended soak times mean that use of rod and reel is much less likely to result in marine mammal interactions for pelagic species. However, bottlenose dolphins are known to interact with commercial and recreational rod and reel fishermen. The SEFSC rod and reel fishing would implement various mitigation measures including consistent monitoring and pulling lines from water should marine mammals, especially bottlenose dolphins, be at risk of interaction. Therefore, we find a reduced potential for interaction from SEFSC rod and reel surveys than compared to commercial and recreational fishing.
Many species of cetaceans and pinnipeds are documented to have been killed by longlines, including several large whales, porpoises, a variety of delphinids, seals, and sea lions (Perez, 2006; Young and Iudicello, 2007; Northridge, 1984, 1991; Wickens, 1995). Generally, direct interaction between longlines and marine mammals (both cetaceans and pinnipeds) has been recorded wherever longline fishing and animals co-occur. A lack of recorded interactions where animals are known to be present may indicate simply that longlining is absent or an insignificant component of fisheries in that region or that interactions were not observed, recorded, or reported.
In evaluating risk relative to a specific fishery (or research survey), one must consider the length of the line and number of hooks deployed as well as frequency, timing, and location of deployment. These considerations inform determinations of whether interaction with marine mammals is likely. As with other gear and fishing practice comparisons to those involved in commercial fisheries, the longlines used by the SEFSC are shorter and are not set as long.
According to the PSIT database, one bottlenose dolphin belonging to the Mobile Bay, Bonsecour Bay stock was taken incidental to longline fisheries research. On August 6, 2013, while retrieving bottom longline gear during the SEAMAP-GOM Bottom Longline survey, a dolphin was caught by a circle hook during a longline research survey. After less than 60 seconds, the animal broke free from the gear and swam away vigorously, but the hook and approximately 2 m of trailing line remained attached to the animal. As such, the incident was documented as a serious injury. While a lack of repeated historical interaction does not in and of itself indicate that future interactions are unlikely, we believe that the historical record, considered in context with the frequency and timing of these activities, as well as mitigation measures employed indicate that future marine mammal interactions with these gears would be uncommon but not totally unexpected.
Unlike trawl nets, gillents, and hook and line gear, which are used in both scientific research and commercial fishing applications, the gear and equipment discussed here are not considered similar or analogous to any commercial fishing gear and are not designed to capture any commercially salable species, or to collect any sort of sample in large quantities. They do not have the potential to take marine mammals primarily because of their design, size, or how they are deployed. For example, CTDs are typically deployed in a vertical cast on a cable and have no loose lines or other entanglement hazards. A bongo net is typically deployed on a cable, whereas neuston nets (these may be plankton nets or small trawls) are often deployed in the upper one meter of the water column; either net type has very small size (
When considering the potential for a marine mammal to be harassed by a sound-generating source, we consider multiple signal characteristics, including, but not limited to, sound type (
The SEFSC would not use acoustic sources with spectral characteristics resembling non-impulsive, continuous noise (
As described above, category 1 sources (those operating above 180kHz), are determined to have essentially no probability of being detected by or resulting in any potential adverse impacts on marine species. This conclusion is based on the fact that operating frequencies are above the known hearing capabilities of any marine species (as described above). Although sounds that are above the functional hearing range of marine animals may be audible if sufficiently loud (
NMFS defines threshold shift (TS) as “a change, usually an increase, in the threshold of audibility at a specified frequency or portion of an individual's hearing range above a previously established reference level” (NMFS, 2016). Threshold shift can be permanent (PTS) or temporary (TTS). As described in NMFS (2016), there are numerous factors to consider when examining the consequence of TS, including, but not limited to, the signal temporal pattern (
NMFS defines PTS as “a permanent, irreversible increase in the threshold of audibility at a specified frequency or portion of an individual's hearing range above a previously established reference level” (NMFS, 2016). It is the permanent elevation in hearing threshold resulting from irreparable damage to structures of the inner ear (
With the exception of a single study unintentionally inducing PTS in a harbor seal (Kastak
NMFS defines TTS as “a temporary, reversible increase in the threshold of audibility at a specified frequency or portion of an individual's hearing range above a previously established reference level” (NMFS, 2016). A TTS of 6 dB is considered the minimum threshold shift clearly larger than any day-to-day or session-to-session variation in a subject's normal hearing ability (Schlundt
Depending on the degree (elevation of threshold in dB), duration (
As described previously (see
As noted above, relatively high levels of sound are likely required to cause TTS in marine mammals. However, there may be increased sensitivity to TTS for certain species generally (harbor porpoise; Lucke
Various other studies have evaluated the environmental risk posed by use of specific scientific sonar systems. Burkhardt
Boebel
Characteristics of the sound sources used by SEFSC reduce the likelihood of effects to marine mammals, as well as the intensity of effect assuming that an animal perceives the signal. Intermittent exposures—as would occur due to the brief, transient signals produced by these sources—require a higher cumulative SEL to induce TTS than would continuous exposures of the same duration (
We conclude that, on the basis of available information on hearing and potential auditory effects in marine mammals, high-frequency cetacean species would be the most likely to potentially incur temporary hearing loss from a vessel operating high-frequency fishery research sonar sources, and the potential for PTS to occur for any species is so unlikely as to be discountable. Even for high-frequency cetacean species, individuals would have to make a very close approach and also remain very close to vessels operating these sources in order to receive multiple exposures at relatively high levels, as would be necessary to cause TTS. Additionally, given that behavioral responses typically include the temporary avoidance that might be expected (see below), the potential for auditory effects considered physiological damage (injury) is considered extremely low in relation to realistic operations of these devices. Given the fact that fisheries research survey vessels are moving, the likelihood that animals may avoid the vessel to some extent based on either its physical presence or due to aversive sound (vessel or active acoustic sources), and the intermittent nature of many of these sources, the potential for TTS is probably low for high-frequency cetaceans and very low to zero for other species.
Category 2 active acoustic sources are likely to be audible to some marine mammal species. Among the marine mammals, most of these sources are unlikely to be audible to whales and most pinnipeds, whereas they may be detected by odontocete cetaceans (and particularly high frequency specialists such as harbor porpoise). Richardson
Behavioral disturbance may include a variety of effects, including subtle changes in behavior (
Habituation can occur when an animal's response to a stimulus wanes with repeated exposure, usually in the absence of unpleasant associated events (Wartzok
Available studies show wide variation in response to underwater sound; therefore, it is difficult to predict specifically how any given sound in a particular instance might affect marine mammals perceiving the signal. If a marine mammal does react briefly to an underwater sound by changing its behavior or moving a small distance, the
Changes in dive behavior can vary widely and may consist of increased or decreased dive times and surface intervals as well as changes in the rates of ascent and descent during a dive (
Disruption of feeding behavior can be difficult to correlate with anthropogenic sound exposure, so it is usually inferred by observed displacement from known foraging areas, the appearance of secondary indicators (
Variations in respiration naturally vary with different behaviors and alterations to breathing rate as a function of acoustic exposure can be expected to co-occur with other behavioral reactions, such as a flight response or an alteration in diving. However, respiration rates in and of themselves may be representative of annoyance or an acute stress response. Various studies have shown that respiration rates may either be unaffected or could increase, depending on the species and signal characteristics, again highlighting the importance in understanding species differences in the tolerance of underwater noise when determining the potential for impacts resulting from anthropogenic sound exposure (
Marine mammals vocalize for different purposes and across multiple modes, such as whistling, echolocation click production, calling, and singing. Changes in vocalization behavior in response to anthropogenic noise can occur for any of these modes and may result from a need to compete with an increase in background noise or may reflect increased vigilance or a startle response. For example, in the presence of potentially masking signals, humpback whales and killer whales have been observed to increase the length of their songs (Miller
Avoidance is the displacement of an individual from an area or migration path as a result of the presence of a sound or other stressors, and is one of the most obvious manifestations of disturbance in marine mammals (Richardson
A flight response is a dramatic change in normal movement to a directed and rapid movement away from the perceived location of a sound source. The flight response differs from other avoidance responses in the intensity of the response (
Behavioral disturbance can also impact marine mammals in more subtle ways. Increased vigilance may result in costs related to diversion of focus and attention (
Many animals perform vital functions, such as feeding, resting, traveling, and socializing, on a diel cycle (24-hour cycle). Disruption of such functions resulting from reactions to stressors such as sound exposure are more likely to be significant if they last more than one diel cycle or recur on subsequent days (Southall
Few experiments have been conducted to explicitly test for potential effects of echosounders on the behavior of wild cetaceans. Quick
We considered behavioral data from these species when assessing the potential for take (see Estimated Take section). There are few studies that obtained detailed beaked whale behavioral data in response to echosounders (
Based on the available data, NMFS anticipates beaked whales and harbor porpoise are more likely to respond in a manner that may rise to the level of take to SEFSC acoustic sources. However, the method by which take is quantified in this proposed rule is conservative (
Neuroendocrine stress responses often involve the hypothalamus-pituitary-adrenal system. Virtually all neuroendocrine functions that are affected by stress—including immune competence, reproduction, metabolism, and behavior—are regulated by pituitary hormones. Stress-induced changes in the secretion of pituitary hormones have been implicated in failed reproduction, altered metabolism, reduced immune competence, and behavioral disturbance (
The primary distinction between stress (which is adaptive and does not normally place an animal at risk) and “distress” is the cost of the response. During a stress response, an animal uses glycogen stores that can be quickly replenished once the stress is alleviated. In such circumstances, the cost of the stress response would not pose serious fitness consequences. However, when an animal does not have sufficient energy reserves to satisfy the energetic costs of a stress response, energy resources must be diverted from other functions. This state of distress will last until the animal replenishes its energetic reserves sufficient to restore normal function.
Relationships between these physiological mechanisms, animal behavior, and the costs of stress responses are well-studied through controlled experiments and for both laboratory and free-ranging animals (
Under certain circumstances, marine mammals experiencing significant masking could also be impaired from maximizing their performance fitness in survival and reproduction. Therefore, when the coincident (masking) sound is man-made, it may be considered harassment when disrupting or altering critical behaviors. It is important to distinguish TTS and PTS, which persist after the sound exposure, from masking, which occurs during the sound exposure. Because masking (without resulting in TS) is not associated with abnormal physiological function, it is not considered a physiological effect, but rather a potential behavioral effect.
The frequency range of the potentially masking sound is important in determining any potential behavioral impacts. For example, low-frequency signals may have less effect on high-frequency echolocation sounds produced by odontocetes but are more likely to affect detection of mysticete communication calls and other potentially important natural sounds such as those produced by surf and some prey species. The masking of communication signals by anthropogenic noise may be considered as a reduction in the communication space of animals (
Masking affects both senders and receivers of acoustic signals and can potentially have long-term chronic effects on marine mammals at the population level as well as at the individual level. Low-frequency ambient sound levels have increased by as much as 20 dB (more than three times in terms of SPL) in the world's ocean from pre-industrial periods, with most of the increase from distant commercial shipping (Hildebrand, 2009). All anthropogenic sound sources, but especially chronic and lower-frequency signals (
We have also considered the potential for severe behavioral responses such as stranding and associated indirect injury or mortality from SEFSC acoustic survey equipment, on the basis of a 2008 mass stranding of approximately one hundred melon-headed whales in a Madagascar lagoon system. An investigation of the event indicated that use of a high-frequency mapping system (12-kHz multibeam echosounder; it is important to note that all SEFSC sources operate at higher frequencies (see Table 1)) was the most plausible and likely initial behavioral trigger of the event, while providing the caveat that there is no unequivocal and easily identifiable single cause (Southall
The panel also noted several site- and situation-specific secondary factors that may have contributed to the avoidance responses that led to the eventual entrapment and mortality of the whales. Specifically, shoreward-directed surface currents and elevated chlorophyll levels in the area preceding the event may have played a role (Southall
Characteristics of the sound sources predominantly used by SEFSC further reduce the likelihood of effects to marine mammals, as well as the intensity of effect assuming that an animal perceives the signal. Intermittent exposures—as would occur due to the brief, transient signals produced by these sources—require a higher cumulative SEL to induce TTS than would continuous exposures of the same duration (
We conclude here that, on the basis of available information on hearing and potential auditory effects in marine mammals, the potential for threshold shift from exposure to fishery research sonar is low to discountable. High-frequency cetacean species would be the most likely to potentially incur some minimal amount of temporary hearing loss from a vessel operating high-frequency sonar sources, and the potential for PTS to occur for any species is so unlikely as to be discountable. Even for high-frequency cetacean species, individuals would have to make a very close approach and also remain very close to vessels operating these sources in order to receive multiple exposures at relatively high levels, as would be necessary to cause TTS. Additionally, given that behavioral responses typically include the temporary avoidance that might be expected (see below), the potential for auditory effects considered physiological damage (injury) is considered extremely low in relation to realistic operations of these devices. Given the fact that fisheries research survey vessels are moving, the likelihood that animals may avoid the vessel to some extent based on either its physical presence or due to aversive sound (vessel or active acoustic sources), and the intermittent nature of many of these sources, the potential for TTS is probably low for high-frequency cetaceans and very low to zero for other species.
Based on the source operating characteristics, most of these sources may be detected by odontocete cetaceans (and particularly high-frequency specialists such as porpoises) but are unlikely to be audible to mysticetes (
As described above, behavioral responses of marine mammals are extremely variable, depending on multiple exposure factors, with the most common type of observed response being behavioral avoidance of areas around aversive sound sources. Certain odontocete cetaceans (particularly harbor porpoises and beaked whales) are known to avoid high-frequency sound sources in both field and laboratory settings (
In addition to the small total biomass taken, some of the size classes of fish targeted in research surveys are very small, and these small size classes are not known to be prey of marine mammals. Research catches are also distributed over a wide area because of the random sampling design covering large sample areas. Fish removals by research are therefore highly localized and unlikely to affect the spatial concentrations and availability of prey for any marine mammal species. The overall effect of research catches on marine mammals through competition for prey may therefore be considered insignificant for all species.
Soundscapes are also defined by, and acoustic habitat influenced by, the total contribution of anthropogenic sound. This may include incidental emissions from sources such as vessel traffic, or
As described above (“Acoustic Effects”), the signals emitted by SEFSC active acoustic sources are of higher frequencies, short duration with high directionality, and transient. These factors mean that the signals will likely attenuate rapidly (not travel over great distances), may not be perceived or affect perception even when animals are in the vicinity, and would not be considered chronic in any given location. SEFSC use of these sources is widely dispersed in both space and time. In conjunction with the prior factors, this means that it is highly unlikely that SEFSC use of these sources would, on their own, have any appreciable effect on acoustic habitat.
As described in the preceding, the potential for SEFSC research to affect the availability of prey to marine mammals or to meaningfully impact the quality of physical or acoustic habitat is considered to be insignificant for all species. Effects to habitat will not be discussed further in this document.
This section provides an estimate of the number of incidental takes proposed for authorization through this IHA, which will inform both NMFS' consideration of whether the number of takes is “small” and the negligible impact determination. When discussing take, we consider three manners of take: Mortality, serious injury, and harassment. Serious injury is defined as an injury that could lead to mortality while injury refers to injury that does not lead to mortality. Except with respect to certain activities not pertinent here, the MMPA defines “harassment” as any act of pursuit, torment, or annoyance which (i) has the potential to injure a marine mammal or marine mammal stock in the wild (Level A harassment); or (ii) has the potential to disturb a marine mammal or marine mammal stock in the wild by causing disruption of behavioral patterns, including, but not limited to, migration, breathing, nursing, breeding, feeding, or sheltering (Level B harassment).
As previously described, the SEFSC has a history of take of marine mammals incidental to fisheries research. The degree of take resulting from gear interaction can range from mortality, serious injury, Level A harassment (injury), or released unharmed with no observable injury. However, given that we cannot predict the degree of take, we conservatively assume that any interaction may result in mortality or serious injury and have issued take as such. In the case of the Mississippi Sound stock, we have also authorized a single take from Level A harassment (injury) only. The amount of research conducted in Mississippi Sound using gear with the potential for marine mammal interaction increases the potential for interaction above other estuarine systems. However, there is evidence that, even without the proposed prescribed mitigation and monitoring measures, take may not result in mortality or serious injury (
Given the complex stock structure of bottlenose dolphins throughout the ARA and GOMRA as well as the vulnerability of this species to be taken incidental to fishery research, we have partitioned this section into two categories to present requested and proposed take in an organized manner. Below we present our analysis informing the proposed take of estuarine and coastal bottlenose dolphins followed by pelagic marine mammals which includes all relevant non-bottlenose dolphin species and open ocean stocks of bottlenose dolphins.
In order to estimate the number of potential bottlenose dolphin takes in estuarine and coastal waters, we considered the SEFSC's and TPWD's record of such past incidents and other sources of take (
In total, since 2001 and over the course of thousands of hours of research effort, 15 marine mammals (all bottlenose dolphins) have been entangled in SEFSC-affiliated research gear. All takes occurred between April through October; however, this is likely a result of research effort concentrated during this time period and there does not appear to be any trend in increased vulnerability throughout the year.
In the ARA, the SEFSC has nine documented takes of bottlenose dolphins (in 8 instances) from fishing gear (Table 5) and 1 take of an Atlantic spotted dolphin. The Atlantic spotted dolphin take was a calf struck by a propeller during a marine mammal research cruise. Given the anomalous nature of the incident and proposed mitigation measures, NMFS is not proposing to authorize take by ship strike. Therefore, this take is not discussed further. Of the eight gear-related takes, two animals were taken at once in a trammel net by the SCDNR in
To further assess the potential for take in any given year, we considered where takes have occurred and the possible stock origin from which an animal was taken. The July 2006 take occurred offshore of Fripp Island, SC; the October 2006 take occurred off Oak Island, NC; the July 2012 take occurred off Little Tybee Island, GA; the August 2012 take occurred off Pawley's Island, SC; the April 2014 take occurred just off the coast of Florida between St. Augustine and Daytona Beach; and the July 2016 take occurred off Sea Island, Georgia which is nestled between Little St. Simon's Island and St. Simon's Island. Therefore, the dolphins taken could have originated from any of the five coastal stocks (the Northern Migratory and Southern Migratory stock, South Carolina/Georgia Coastal stock, Northern Florida Coastal stock and a Central Florida stock), although they were assigned to the stock based on the location where the take occurred. Taking the average rate of 0.38 animals/five stocks equates to an average taking of 0.08 animals per stock per year. This average would be even less if one considers an estuarine stock may be the stock of origin.
According to the SEFSC's application, three trawl surveys and 2 bottom longline surveys conducted by the SEFSC or research partner overlap spatially with the NNCES stock (Table 1). These are the Atlantic Striped Bass Tagging Bottom Trawl Survey (USFWS), SEAMAP-SA Coastal Trawl Survey (SCDNR), SEAMAP-SA North Carolina Pamlico Sound Trawl Survey (NCDENR), Shark and Red Snapper Bottom Longline Survey (SEFSC), and the SEAMAP-SA Red Drum Bottom Longline Survey (NCDNR). No gillnet surveys would take place in waters overlapping with this stock. Based on data in the PSIT database, no dolphins from the NNCES stock have been taken from SEFSC or partner fishery research surveys, including those described above which have taken place for many years.
Despite the lack of historical take, we further investigated the potential for future interaction. Based on commercial fishery and SEFSC fishery survey bycatch rates of marine mammals, we would expect the trawl surveys to be more likely to take a dolphin than the bottom longline surveys. An evaluation of each survey type occurring is provided below to more thoroughly evaluate the potential for taking a bottlenose dolphin belonging to the NNCES stock.
The Atlantic Striped Bass Bottom Trawl Survey (conducted by the USFWS) is limited to two weeks (200-350 trawls) during January and February in coastal waters north of Cape Hatteras ranging from 30 to 120 ft in depth. The USFWS uses dual 65-ft trawl nets with 3.75 in. stretch nylon multifilament mesh codend. Tow speed is 3 kts and tow time does not exceed 30 minutes at depth. Trawl operations are conducted day and night from the R/V Oregon II, R/V Oregon, or R/V Savannah (please refer to the EA for detailed vessel descriptions). The winter operations of this survey overlaps in time with when some animals move out of Pamlico Sound and into coastal waters. However, photo-ID studies, available tag data and stable isotope data indicate that the portion of the stock that moves out of Pamlico Sound into coastal waters remain south of Cape Hatteras during cold water months (Waring
The SEAMAP-SA Pamlico Sound Trawl Survey (NCDENR) is conducted to support stock assessments and management of finfish, shrimp, and crab species in Pamlico Sound and its bays and rivers. The otter trawl survey takes place for 10 days in June and 10 days in September during daylight hours. Up to 54 trawls are completed each month (total = 108 trawls) aboard the R/V Carolina Coast. The general area of operation is Pamlico Sound and the Pamlico, Pungo, and Neuse rivers in waters greater than or equal to 6 ft. Despite spatial and temporal overall with the NNCES stock, this survey has no record of interacting with a marine mammal. Given the lack of historical interaction, limited number of tows, and implementation of the proposed monitoring and mitigation measures, we do not believe there is reasonable likelihood of take from this survey.
The SEAMAP-SA Coastal Trawl Survey (SCDNR) operates 300-350 trawls annually from Cape Hatteras, NC to Cape Canaveral, FL in nearshore oceanic waters of 15-30 ft depth. Its goal is collect long-term fishery independent data on ecologically, commercially, and recreationally important fishes and invertebrates, including shrimp and blue crab. Tow time is approximately 20 minutes. This survey is not associated with sea turtle research surveys, which have longer tow times. SCDNR uses the R/V Lady Lisa outfitted with an otter trawl comprised of paired mongoose-type Falcon bottom trawls. All takes of dolphins have occurred in coastal waters (none from estuarine waters), and all assigned takes have been from coastal stocks. However, because estuarine stocks may venture into coastal waters, there is a small possibility takes from this survey could have been from the SNCES (n=1), Northern South Carolina Estuarine System (n=1), Northern Georgia/Southern South Carolina Estuarine System (n= 2), and Southern Georgia Estuarine System (n=1) (Table 6). This is the only survey which may potentially overlap with the NNCES and SNCES stock but does so in coastal waters where coastal stocks overlap in time and space. It is most likely a take from this survey would be from a coastal stock. Therefore, we are not proposing to authorize take from the NNCES or SNCES stock.
The only survey overlapping with the Indian River Lagoon (IRL) stock is the St. Lucie Rod-and-Reel Fish Health Study. There are no documented instances of the SEFSC taking a dolphin from this survey. Therefore, we believe the likelihood of take is low and mitigation measures (
In summary, we are not proposing to authorize requested take in the ARA for the NNCES, SNCES, and Indian River Lagoon stocks due to low to discountable potential for take. For all other estuarine stocks for which take was requested (n=7), we are proposing to authorize the requested 1 take over 5 years by M/SI (Table 7). We are proposing to issue the requested 3 M/SI takes per stock of each of the coastal stocks and the offshore stock in the ARA over 5 years (Table 7).
In the GOMRA, the SEFSC is requesting to take one dolphin from each of the 21 estuarine stocks, three dolphins from the Mississippi Sound stock, and three dolphins per year from the coastal stocks (Table 7). Similar to the ARA, NMFS examined the SEFSC's request and assessed authorizing take based on fishing effort and stock spatial and temporal parameters, the potential for take based on fishing practices (
When examining the survey gear used and fishing methods, we determined that the IJA Open Bay Shellfish Trawl Survey (conducted by TPWD) has a very low potential to take dolphins. This survey has no documented dolphin/gear interactions despite high fishing effort (90 trawls for month/1080 trawls per year). This is likely because TPWD uses a very small (20 ft wide) otter shrimp trawl which is towed for only 10 minutes in 3-30 ft of water. The nets can be retrieved within one to two minutes. The IJA Open Bay Shellfish Trawl Survey is the only survey conducted by the SEFSC that overlaps with the following BSE bottlenose dolphin stocks: Laguna Madre; Nueces Bay, Corpus Christi Bay; Copano Bay, Aransas Bay, San Antonio Bay, Redfish Bay, Espirtu Santo Bay; Matagorda Bay, Tres Palacios Bay, Lavaca Bay; West Bay, and Galveston Bay, East Bay, Trinity Bay. TPWD has no documented take of dolphins from the IJA Open Bay Shellfish Trawl Survey despite years of research effort. Due to the discountable potential for take from the IJA Open Bay Shellfish Trawl Survey, we are not proposing to authorize take of these Texas bottlenose dolphin stocks to the SEFSC.
Another stock with a discountable potential for take is the Barataria Bay stock. This stock's habitat includes Caminada Bay, Barataria Bay east to Bastian Bay, Bay Coquette, and Gulf coastal waters extending 1 km from the shoreline. The SEFSC has committed to avoiding conducting fisheries independent monitoring in these waters. Hence, we find the potential for take from the Barataria Bay stock is discountable and we are not proposing to authorize the requested take.
On December 22, 2017, the SEFSC indicated the Gulfspan shark survey conducted by University of West Florida (UWF) is considered inactive as of 2017 and would not likely take place over the course of the proposed regulations due to staffing changes. This is the only survey overlapping with the Perdido Bay, Pensacola Bay, Choctawhatchee Bay stocks. Therefore, we find the potential for take from these stocks is discountable and we are not proposing to authorize the requested take.
There are nine surveys in the GOMRA overlapping with the Mississippi Sound, Lake Borgne, Bay Boudreau stock (MS Sound stock): Four trawl, three gillnet, and two hook and line. While there are four documented takes from this stock since 2011 (from gillnet and trawl surveys), there are none prior to that year. The SEFSC requested three M/SI takes from the MS Sound stock due to the amount of fishing effort in this waterbody. However, we find two takes are warranted over the life of the 5-year regulations given the lack of take prior to 2011 and implementation of the proposed mitigation and monitoring measures. Further, previous takes indicate there is potential that a marine mammal may not die or be seriously injured in fishing gear but be injured. Therefore, we are proposing to authorize one take by M/SI and one take by Level A harassment for the Mississippi Sound stock over the 5-year regulations (Table 7).
During gillnet surveys, the TPWD may incidentally take bottlenose dolphins. TPWD conducts research in seven major bays, sounds, and estuaries in Texas. There is no history of take in three of those waterbodies (Sabine Lake, West Bay, and Galveston Bay), therefore, TPWD has not requested, and we are not proposing, to authorize take from these stocks as the potential for take from these stocks is discountable.
Historical take from TPWD's gillnet surveys is random in time and space making it difficult to predict where and how often future takes could occur. TPWD has taken 32-35 bottlenose dolphins during the 35 years of gillnet fishing (exact number is not clear due to potential errors in early reporting and record keeping). In 18 of the 35 years (52 percent) there were zero dolphins taken (see Table 3 in TPWD's
Since systematic record keep began in 2002, the SEFSC and affiliated research partners have taken no marine mammals species other than bottlenose dolphins due to gear interaction. However, NMFS has assessed other sources of M/SI for these species (
NMFS LOF classifies U.S. commercial fisheries into one of three categories according to the level of incidental marine mammal M/SI that is known to have occured on an annual basis over the most recent five-year period (generally) for which data has been analyzed: Category I, frequent incidental M/SI; Category II, occasional incidental M/SI; and Category III, remote likelihood of or no known incidental M/SI. In accordance with the MMPA (16 U.S.C. 1387(e)) and 50 CFR 229.6, any vessel owner or operator, or gear owner or operator (in the case of non-vessel fisheries), participating in a fishery listed on the LOF must report to NMFS all incidental mortalities and injuries of marine mammals that occur during commercial fishing operations, regardless of the category in which the fishery is placed. The LOF for 2016 was based on, among other things, stranding data; fisher self-reports; and SARs, primarily the 2014 SARs, which are generally based on data from 2008-2012. Table 8 indicates which species (other than bottlenose dolphins) have been known to interact with commercial fishing gear in the three research areas based on the 2016 LOF (81 FR 20550; April 8, 2016). More information on the 2016 LOF can be found at
In addition to examining known interaction, we also considered a number of activity-related factors (
It is well documented that multiple marine mammal species are taken in commercial longline fisheries (Table 8). We used this information to help make an informed decision on the probability of specific cetacean and large whale interactions with longline gear and other hook-and-line gear while taking into account many other factors affecting the vulnerability of a species to be taken in SEFSC research surveys (
With respect to trawling, both commercial fisheries and non-SEFSC affiliated research trawls in the Gulf of Mexico have taken pelagic marine mammals. For example, a mid-water research trawl conducted to monitor the effects of the Deepwater Horizon oil spill in the Gulf of Mexico took 3 pantropical spotted dolphins in one trawl in 2012. Additionally, an Atlantic spotted dolphin was taken in non-SEFSC research bottom trawl in 2014. Known takes in commercial trawl fisheries in the ARA and GOMRA include a range of marine mammal species (Table 8). NMFS examined the similarities between species known to be taken in commercial and non-SEFSC research trawls with those species that overlap in time and space with SEFSC research trawls in the open ocean. Because some species exhibit similar behavior, distribution, abundance, and vulnerability to research trawl gear to these species, NMFS proposes to authorize take of eight species of pelagic cetaceans and two pinniped species in the ARA and nine species of cetaceans in the GOMRA (Table 9). In addition, NMFS provides allowance of one take of an unidentified species in the ARA, GOMRA, and CRA over the life of these proposed regulations to account for any animal that cannot be identified to a species level. Takes would occur incidental to trawl and hook and line (including longline) research in the ARA and GOMRA. However, because the SEFSC does not use trawl gear in the CRA, take is proposed incidental to hook and line gear in the Caribbean (see Tables 6.4- 6.6 in SEFSC's application for more detail). We are proposing to authorize the amount of take requested by the SEFSC's for these stocks listed in Table 9.
As described previously (“Potential Effects of the Specified Activity on Marine Mammals”), we believe that SEFSC use of active acoustic sources has, at most, the potential to cause Level B harassment of marine mammals. In order to attempt to quantify the potential for Level B harassment to occur, NMFS (including the SEFSC and acoustics experts from other parts of NMFS) developed an analytical framework considering characteristics of the active acoustic systems described previously under
Using the best available science, NMFS has developed acoustic thresholds that identify the received level of underwater sound above which exposed marine mammals would be reasonably expected to be behaviorally harassed (equated to Level B harassment) or to incur PTS of some degree (Level A harassment). We note NMFS has begun efforts to update its behavioral thresholds, considering all available data, and is formulating a strategy for updating those thresholds for all types of sound sources considered in incidental take authorizations. It is NMFS intention to conduct both internal and external review of any new thresholds prior to finalizing. In the interim, we apply the traditional thresholds.
The Marine Mammal Commission (Commission) has previously suggested NMFS apply the 120 dB continuous threshold to scientific sonar such as the ones proposed by the SEFSC. NMFS has responded to this comment in multiple
To apply the continuous 120 dB threshold to all species based on data from known acoustically sensitive species (one species of which is the harbor porpoise which is likely to be rarely encountered in the ARA and do not inhabit the GOMRA or CRA) is not warranted as it would be unnecessarily conservative for non-sensitive species. Qualitatively considered in our effects analysis below is that beaked whales and harbor porpoise are more acoustically sensitive than other cetacean species, and thus are more likely to demonstrate overt changes in behavior when exposed to such sources. Further, in absence of very sophisticated acoustic modeling, our propagation rates are also conservative. Therefore, the distance to the 160 dB threshold is
The operating frequencies of active acoustic systems used by the SEFSC sources range from 18-333 kHz (see Table 2). These frequencies are within the very upper hearing range limits of baleen whales (7 Hz to 35 kHz). The Simrad EK60 may operate at frequency of 18 kHz which is the only frequency that might be detectable by baleen whales. However, the beam pattern is extremely narrow (11 degrees) at that frequency. The Simrad ME70 echosounder, EQ50, and Teledyne RD ADCP operate at 50-200 kHz which are all outside of baleen whale hearing capabilities. Therefore, we would not expect any exposures to these signals to result in behavioral harassment. The Simrad EK60 lowest operating frequency (18 kHz) is within baleen whale hearing capabilities.
The assessment paradigm for active acoustic sources used in SEFSC fisheries research mirrors approaches by other NMFS Science Centers applying for regulations. It is relatively straightforward and has a number of key simple and conservative assumptions. NMFS' current acoustic guidance requires in most cases that we assume Level B harassment occurs when a marine mammal receives an acoustic signal at or above a simple step-function threshold. For use of these active acoustic systems used during SEFSC research, NMFS uses the threshold is 160 dB re 1 μPa (rms) as the best available science indicates the temporal characteristics of a source are most influential in determining behavioral impacts (Gomez
(1) A detailed characterization of the acoustic characteristics of the effective sound source or sources in operation;
(2) The operational areas exposed to levels at or above those associated with Level B harassment when these sources are in operation;
(3) A method for quantifying the resulting sound fields around these sources; and
(4) An estimate of the average density for marine mammal species in each area of operation.
Quantifying the spatial and temporal dimension of the sound exposure footprint (or “swath width”) of the active acoustic devices in operation on moving vessels and their relationship to the average density of marine mammals enables a quantitative estimate of the number of individuals for which sound levels exceed the relevant threshold for each area. The number of potential incidents of Level B harassment is ultimately estimated as the product of the volume of water ensonified at 160 dB rms or higher and the volumetric density of animals determined from simple assumptions about their vertical stratification in the water column. Specifically, reasonable assumptions based on what is known about diving behavior across different marine mammal species were made to segregate those that predominately remain in the upper 200 m of the water column versus those that regularly dive deeper during foraging and transit. Methods for estimating each of these calculations are described in greater detail in the following sections, along with the simplifying assumptions made, and followed by the take estimates.
Many of these sources can be operated in different modes and with different output parameters. In modeling their potential impact areas, those features among those given previously in Table 2 (
For each of the three predominant sound sources, the volume of water ensonified is estimated as the cross-sectional area (in square kilometers) of sound at or above 160 dB rms multiplied by the total distance traveled by the ship (see Table 6a and 6b in SEFSC's application). Where different sources operating simultaneously would be predominant in each different depth strata (
The marine mammal abundance estimates used for the ARA and GOM were obtained from Stock Assessment Reports for the Atlantic and the Gulf of Mexico ecosystem areas (Waring
(1) They are often calculated using visual sighting data collected during one season rather than throughout the year. The time of year when data were collected and from which densities were estimated may not always overlap with the timing of SEFSC fisheries surveys (detailed previously in “Detailed Description of Activities”).
(2) The densities used for purposes of estimating acoustic exposures do not take into account the patchy distributions of marine mammals in an ecosystem, at least on the moderate to fine scales over which they are known to occur. Instead, animals are considered evenly distributed throughout the assessed area, and seasonal movement patterns are not taken into account.
In addition, and to account for at least some coarse differences in marine mammal diving behavior and the effect this has on their likely exposure to these kinds of often highly directional sound sources, a volumetric density of marine mammals of each species was determined. This value is estimated as the abundance averaged over the two-dimensional geographic area of the surveys and the vertical range of typical habitat for the population. Habitat ranges were categorized in two generalized depth strata (0-200 m and 0 to greater than 200 m) based on gross differences between known generally surface-associated and typically deep-diving marine mammals (
(1) ME70 ensonified volume (0-200 m) = 0.0201 km
(2) Total Linear kms = 1,794 km (no pantropical spotted dolphins are found on the shelf so those trackline distances are not included here)
(3) Pantropical spotted dolphin density (0-200 m) = 0.47062 dolphins/km
(4) Estimated exposures to sound ≥160 dB rms = 0.47062 pantropical spotted dolphin/km
In some cases, the calculated Level B take estimates resulted in low numbers of animals which are known to be gregarious or travel in group sizes larger than the calculated take estimate. In those cases, we have adjusted the requested take in the application to reflect those groups sizes (see proposed take column in Table 13).
In order to issue an incidental take authorization under Section 101(a)(5)(A or D) of the MMPA, NMFS must set forth the permissible methods of taking pursuant to such activity, “and other means of effecting the least practicable impact on such species or stock and its habitat, paying particular attention to rookeries, mating grounds, and areas of similar significance, and on the availability of such species or stock for taking” for certain subsistence uses. NMFS regulations require applicants for incidental take authorizations to include information about the availability and feasibility (economic and technological) of equipment, methods, and manner of conducting such activity or other means of effecting the least practicable adverse impact upon the affected species or stocks and their habitat (50 CFR 216.104(a)(11)).
In evaluating how mitigation may or may not be appropriate to ensure the least practicable adverse impact on species or stocks and their habitat, as well as subsistence uses where applicable, we carefully consider two primary factors:
(1) The manner in which, and the degree to which, the successful implementation of the measure(s) is expected to reduce impacts to marine mammals, marine mammal species or stocks, and their habitat. This considers the nature of the potential adverse impact being mitigated (likelihood, scope, range). It further considers the likelihood that the measure will be effective if implemented (probability of accomplishing the mitigating result if implemented as planned) the likelihood of effective implementation (probability implemented as planned). and; (2) the practicability of the measures for
The SEFSC has invested significant time and effort in identifying technologies, practices, and equipment to minimize the impact of the proposed activities on marine mammal species and stocks and their habitat. The mitigation measures discussed here have been determined to be both effective and practicable and, in some cases, have already been implemented by the SEFSC. In addition, the SEFSC is actively conducting research to determine if gear modifications are effective at reducing take from certain types of gear; any potentially effective and practicable gear modification mitigation measures will be discussed as research results are available as part of the adaptive management strategy included in this rule. As for other parts of this rule, all references to the SEFSC, unless otherwise noted, include requirements for all partner institutions identified in the SEFSC's application.
For fisheries research being conducted by partner entities, it remains the SEFSC's responsibility to ensure those partners are communicating and coordinating with the SEFSC, receiving all necessary marine mammal mitigation and monitoring training, and implementing all required mitigation and monitoring in a manner compliant with the proposed rule and LOA. The SEFSC will incorporate specific language into its contracts that specifies training requirements, operating procedures, and reporting requirements for protected species that will be required for all surveys conducted by research partners, including those conducted on chartered vessels. To facilitate this requirement, SEFSC would be required to hold at least one training per year with at least one representative from each partner institution (preferably chief scientists of the fishery independent surveys discussed in this rule) to review the proposed mitigation, monitoring and reporting requirements. The SEFSC would also provide consistent, timely support throughout the year to address any questions or concerns researchers may have regarding these measures.
SEFSC would also be required to establish and maintain cooperating partner working group(s) to identify circumstances of a take should it occur and any action necessary to avoid future take. Each working group shall consist of at least one SEFSC representative knowledgeable of the mitigation, monitoring and reporting requirements contained within these regulations, one or more research institution or SEFSC representative(s) (preferably researcher(s) aboard vessel when take or risk of take occurred), one or more staff from NMFS Southeast Regional Office Protected Resources Division, and one or more staff from NMFS Office of Protected Resources. At the onset of these regulations, SEFSC shall maintain the recently established SCDNR working group to identify actions necessary to reduce the amount of take from SCDNR trawling. Other working groups shall be established if a partner takes more than one marine mammal within 5 years to identify circumstances of marine mammal take and necessary action to avoid future take. Each working group shall meet at least once annually. The SEFSC will maintain a centralized repository for all working group findings to facilitate sharing and coordination.
While at sea, best professional judgement is used to determine if a marine mammal is at risk of entanglement/hooking and if and what type of actions should be taken to decrease risk of interaction. To improve judgement consistency across the region, the SEFSC will initiate a process for SEFSC and partner institution FPCs, SWLs, scientists, and vessel captains and crew to communicate with each other about their experiences with protected species interactions during research work with the goal of improving decision-making regarding avoidance of adverse interactions. The SEFSC will host at least one training annually (may be combined with other training requirements) to inform decision-makers of various circumstances that may arise during surveys, necessary action, and follow-up coordination and reporting of instances of take or possible take. The intent of this new training program would be to draw on the collective experience of people who have been making those decisions, provide a forum for the exchange of information about what went right and what went wrong, and try to determine if there are any rules-
The SEFSC will coordinate with the local Southeast Regional Stranding Coordinator and the NMFS Stranding Coordinator for any unusual protected species behavior and any stranding, beached live/dead, or floating protected species that are encountered during field research activities. If a large whale is alive and entangled in fishing gear, the vessel will immediately call the U.S. Coast Guard at VHF Ch. 16 and/or the appropriate Marine Mammal Health and Stranding Response Network for instructions. All entanglements (live or dead) and vessel strikes must be reported immediately to the NOAA Fisheries Marine Mammal Stranding Hotline at 1-877-433-8299.
The following measures describe mitigation application to all SEFSC surveys while measures specific to gear types follow. SEFSC will take all necessary measures to avoid marine mammal interaction with fishing gear used during fishery research surveys. This includes implementing the move-on rule (when applicable), which means delaying setting gear when marine mammals are observed at or approaching the sampling site and are deemed to be at-risk of becoming entangled or hooked on any type of fishing gear, and immediately pulling gear from the water when marine mammals are deemed to be at-risk of becoming entangled or hooked on any type of fishing gear. SEFSC will, at all times, monitor for any unusual circumstances that may arise at a sampling site and use best professional judgment to avoid any potential risks to marine mammals during use of all research equipment.
In some cases, marine mammals may be attracted to the vessel during fishing. To avoid increased risk of interaction, the SEFSC will conduct fishery research sampling as soon as practicable upon arriving at a sampling station and prior to conducting environmental sampling. If fishing operations have been suspended because of the presence of marine mammals, SEFSC may resume fishing operations when interaction with marine mammals is deemed unlikely. SEFSC may use best professional judgment in making this determination. SEFSC shall coordinate with all research partners, at least once annually, to ensure mitigation, monitoring and reporting requirements, procedures and decision-making processes contained within the proposed regulations and LOA are understood. All vessels must comply with applicable and relevant take reduction plans, including any required soak time limits and gear length restrictions.
The SEFSC and research partners use a variety of bottom trawl gears for different research purposes. These trawl types include various shrimp trawls (otter, western jib, mongoose, Falcon), high-opening bottom trawls, and flat net bottom trawls (see Table 1-1 and Appendix A in the DPEA). The SEFSC and its research partners also use modified beam trawls and benthic trawls pulled by hand that are not considered to pose a risk to protected species due to their small size and very short tow durations. Therefore, these smaller, hand pulled trawls are not subject to the mitigation measures provided here.
The following mitigation measures apply for trawl surveys:
• Limit tow times to 30 minutes (except for sea turtle research trawls);
• open codend close to deck/sorting table during haul back to avoid damage to animals that may be caught in gear and empty gear as quickly as possible after retrieval haul back;
• delay gear deployment if marine mammals are believed to be at-risk of interaction;
• retrieve gear immediately if marine mammals is believed to be entangled or at-risk of entanglement;
• implement marine mammal mitigation measures included in the NMFS ESA Scientific Research permit under which a survey may be operating;
• dedicated marine mammal observations shall occur at least 15 minutes to beginning of net deployment; this watch may include approach to the sampling station;
• at least one scientist will monitor for marine mammals while the trawl is deployed and upon haul-back;
• minimize “pocketing” in areas of the net where dolphin depredation evidence is commonly observed; and
• continue investigation into gear modifications (
In 2008, standard tow durations for fishery bottom trawl surveys were reduced from 55 minutes to 30 minutes or less at target depth (excluding deployment and retrieval time). These short tow durations decrease the opportunity for curious marine mammals to find the vessel and investigate. Tow times are less than the 55 minute tow time restriction required for commercial shrimp trawlers not using turtle excluder devices (TEDs) (50 CFR 223.206). The resulting tow distances are typically one to two nm or less, depending on the survey and trawl speed. Short tow times reduce the likelihood of entangling protected species.
The move-on rule will be applied to all oceanic deep water trawls if sightings occur anywhere around vessel (within 2 nm) during a 30 minute pre-gear deployment monitoring timeframe. Vessels will move away if animals appear at risk or trawling will be delayed until marine mammals have not been sighted for 30 min or otherwise determined to no longer be at risk. If animals are still at risk after moving or 30 minutes have lapsed, the vessel will move again or the station will be skipped.
Bottom trawl surveys conducted for purposes of researching gears designed to reduce sea turtle interaction (
• Trawling must not be initiated when marine mammals (except dolphins or porpoises) are observed within the vicinity of the research and the marine mammals must be allowed to either leave or pass through the area safely before trawling is initiated;
• Researchers must make every effort to prevent interactions with marine mammals and researchers must be aware of the presence and location of these animals at all times as they conduct trawling activities;
• During skimmer trawl surveys, a minimum of two staff, one on each side (port/starboard) of the vessel, must inspect the gear every five minutes to monitor for the presence of marine mammals,
• Prior to retrieving the skimmer trawl tail bags, the vessel must be slowed from the active towing speed to 0.5-1.0 kn;
• If a marine mammal enters the net, becomes entangled or dies, researchers must (a) stop trawling activities and immediately free the animal, (b) notify the appropriate NMFS Regional Stranding Coordinator as soon as possible and (c) report the incident (permitted activities will be suspended until the Permits Division has granted approval to continue research); and
• Video monitoring of the TED must be used when trawling around Duck, North Carolina, to reduce take of Atlantic sturgeon (although this requirement is not geared toward marine mammals, the camera feed can be used to observe marine mammals to inform decisions regarding implementing mitigation).
The SEFSC also holds an ESA-research permit to assess sea turtle abundance, stock identification, life history, and impacts of human activities; determine sea turtle movements, fine-scale habitat characteristics and selection, and delineation of foraging and nursery areas; and examine how sea turtle distributions correlate with temporal trends and environmental data (Scientific Research Permit 16733-04). That research permit includes a number of marine mammal conditions that must be followed and are incorporated into this proposed rule by reference:
• Trawl tow times must not exceed 30 minutes (bottom time) except in cases when the net is continuously monitored with a real-time video camera or multi-beam sonar system;
• Haul back must begin once a sea turtle or marine mammal enters the net regardless of time limits;
• Seine net pulls must not exceed 45 minutes as part of a 2-hour deployment;
• Nets must not be put in the water and trawls must not be initiated when marine mammals are observed within the vicinity of the research;
• Marine mammals must be allowed to either leave or pass through the area safely before net setting or trawling is initiated;
• Researchers must make every effort to prevent interactions with marine mammals;
• Researchers must be aware of the presence and location of these animals at all times as they conduct activities;
• During skimmer trawl surveys, a minimum of two staff, one on each side (port/starboard) of the vessel, must inspect the gear every five minutes to monitor for the presence of marine mammals;
• Prior to retrieving the skimmer trawl tail bags, the vessel must be slowed from the active towing speed to 0.5-1.0 kn;
• Should marine mammals enter the research area after the seine or tangle nets have been set, the lead line must be raised and dropped in an attempt to make marine mammals in the vicinity aware of the net;
• If marine mammals remain within the vicinity of the research area, tangle or seine nets must be removed; and
• If a marine mammal enters the trawl net, becomes entangled or captured, researchers must stop activities and immediately free the animal, notify the NMFS Southeast Regional Stranding Coordinator as soon as possible, report the incident within 2 weeks and, in addition to the written report, the Permit Holder must contact the Permits Division.
Other mitigation measures are included in research permit 16733-04 that are designed for sea turtles but also have benefits to minimizing entanglement of marine mammals. These include:
• Highly visible buoys must be attached to the float line of each net and spaced at intervals of 10 yards or less; Nets must be checked at intervals of less than 30 minutes, and more frequently whenever turtles or other organisms are observed in the net. If water temperatures are ≤10 °C or ≥30 °C, nets must be checked at less than 20-minute intervals (“net checking” is defined as a complete and thorough visual check of the net either by snorkeling the net in clear water or by pulling up on the top line such that the full depth of the net is viewed along the entire length); The float line of all nets must be observed at all times for movements that indicate an animal has encountered the net (when this occurs the net must be immediately checked). During diver assisted gear evaluations (SEFSC Small Turtle TED Testing and Gear Evaluations), dive teams are deployed on the trawls while they are being towed. During this research, divers actively monitor the gear for protected species interactions and use emergency signal floats to notify the vessel if an interaction occurs. When the signal float is deployed the vessel terminates the tow and slows the gear down to a minimal forward speed of less than 0.5 knots, which allows divers to assist the protected species escape.
Live feed video or sonar monitoring of the trawl may be used in lieu of tow time limits. This mitigation measure is also used in addition to TEDs during some projects. Video or sonar feeds are monitored for the duration of the tow. If a TED is not installed in the trawl and a protected species is observed in the trawl then the tow is immediately terminated. If a TED is installed and a marine mammal is observed to have difficulty escaping through the TED opening, or the individual is lost from the video or sonar feed then the tow is immediately terminated. For all trawl types, the lazy line is a source of entanglement. In particular, dolphins like to rub the line. Loose lines are prone to create a half-hitch around their tail. Therefore, to mitigate this type of interaction, the SEFSC Harvesting Systems Unit (HSU) has conducted limited research examining the potential use of lazy lines constructed of alternative materials designed to reduce marine mammal entanglement with respect to material, thickness, and stiffness. Polyester rope, also known as Dacron, may be a suitable alternative to traditionally used polypropylene. Polyester rope is UV and abrasion resistant and has less elasticity than nylon, but does not lose strength when wet. Polyester, like polypropylene, does not absorb water, but has a higher specific gravity (1.38), which causes it to sink. Polyester can be constructed using a process that results in a medium or hard lay rope that that is stiff, avoids hockling (a twist in the line which gets caught in a block) and is self-coiling when loaded or unloaded off a capstan or gear hauler. The high specific gravity of this type of rope may pose a snagging or hang-up hazard when used as a lazy line in trawl operations. However, the smooth feel of the rope compared to polypropylene may reduce the attractiveness of the line to the rubbing behavior of bottlenose dolphin.
In 2007, the HSU conducted preliminary NOAA diver assisted trials with High Density Polyethylene (HDPE) rope as a replacement for traditional polypropylene. Compared to polypropylene, HDPE polyethylene has similar properties including negligible water absorption, UV resistance, and low specific gravity, which allows it to float. However, HDPE polyethylene may be constructed with a harder lay than traditional polypropylene rope. Divers found that half-hitching the line was more difficult than traditional polypropylene line. However, operational trials were not conducted to examine performance and usability
Another alternative may be replacement of the lazy line with
The following summarizes HSU's 2017 research efforts on shrimp trawl gear modification which was carried out to inform development of this proposed rule (the fully report can be found at
Given the report's results and recommendations, NMFS is not requiring the SEFSC implement lazy line modifications at this time. However, as an adaptive management strategy, NMFS will be periodically assessing lazy line modification as a potential mitigation measure in this and future regulations. NMFS will continue to work with the SEFSC to determine if gear modifications such as stiffer lazy lines are both warranted and practicable to implement. Should the SEFSC volunteer to modify trawl lazy lines, NMFS will work with the researchers to identify any potential benefit and costs to doing so.
In addition to interactions with the lazy line, the SEFSC has identified that holes in trawl nets resulting from dolphin depredation are most numerous around net “pockets” where fish congregate. Reinforcing these more vulnerable sections of the net could help reduce entanglement. Similar to lazy line modification investigations, this potential mitigation measure will be further examined to determine its effectiveness and practicability. The proposed regulations identify “pocketing” of the net should be minimized.
Finally, marine mammal monitoring will occur during all trawls. Bottlenose dolphins are consistently interacting with research trawls in the estuary and nearshore waters and are seemingly attracted to the vessel, with most dolphins converging around the net during haul-back (SCDNR Working Group, pers. comm., February 2, 2016). This makes it difficult to “lose” dolphins, even if moving stations. Due to the known persistent behavior of dolphins around trawls in the estuary and nearshore waters, the move-on rule will not be required for such surveys. However, the chief scientist and/or vessel captain will be required to take immediate action to reduce dolphin interaction should animals appear to be at risk or are entangled in the net. For skimmer trawl research, both the lazy line and net can be monitored from the vessel. However, this is not possible for bottom trawls. Therefore, for bottom trawls, researchers should use best professional judgement to determine if gear deployment should be delayed or hauled. For example, the SCDNR has noted one instance upon which dolphins appeared distressed, evident by the entire group converging on the net during haul-back. They quickly discovered a dolphin was entangled in the net. This and similar types of overt distress behaviors should be used by researchers monitoring the net to identify potential entanglement, requiring the net be hauled-in immediately and quickly.
Pelagic trawls conducted in deep water (500-800 m deep) are typically mid-water trawls and occur in oceanic waters where marine mammal species diversity is greater increased compared to the coast or estuaries. Oceanic species often travel in very large groups and are less likely to have prior encounters and experience with trawl gear than inshore bottlenose dolphins. For these trawls, a dedicated marine mammal observer would observe around the vessel for no less than 30 minutes prior to gear deployment. If a marine mammal is observed within 2 nm of the vessel, gear deployment would be delayed until that animal is deemed to not be at risk of entanglement (
Once the trawl net is in the water, the officer on watch, FPC or SWL, and/or crew standing watch continue to monitor the waters around the vessel and maintain a lookout for protected species as far away as environmental conditions allow. If protected species are sighted before the gear is fully retrieved, the most appropriate response to avoid incidental take is determined by the professional judgment of the FPC or SWL, in consultation with the officer on watch. These judgments take into consideration the species, numbers, and behavior of the animals, the status of the trawl net operation (net opening, depth, and distance from the stern), the time it would take to retrieve the net, and safety considerations for changing speed or course. Most marine mammals have been caught during haul-back operations, especially when the trawl doors have been retrieved and the net is near the surface and no longer under tension. In some situations, risk of adverse interactions may be diminished by continuing to trawl with the net at depth until the protected species have left the area before beginning haul-back operations. In other situations, swift retrieval of the net may be the best course of action. The appropriate course of action to minimize the risk of incidental take of protected species is determined by the professional judgment of the FPC or SWL based on all situation variables, even if the choices compromise the value of the data collected at the station. Care is taken when emptying the trawl, including opening the codend as close as possible to the deck of the checker (or sorting table) in order to avoid damage to protected species that may be caught in the gear but are not visible upon retrieval. The gear is emptied as quickly as possible after retrieval in order to determine whether or not protected species are present.
The SEFSC will implement the following mitigation measures when fishing with seine nets (
• Conduct gillnet and trammel net research activities during daylight hours only;
• Limit soak times to the least amount of time required to conduct sampling;
• Conduct dedicated marine mammal observation monitoring beginning 15 minutes prior to deploying the gear and continue through deployment and haulback;
• Hand-check the net every 30 minutes if soak times are longer than 30 minutes or immediately if disturbance is observed;
• Pull gear immediately if disturbance in the nets is observed;
• Reduce net slack and excess floating and trailing lines;
• Repair damaged nets prior to deploying; and
• Delay or pull all gear immediately and implement the move-on rule if marine mammal is at-risk of entanglement.
The dedicated observation will be made by scanning the water and marsh edge (if visible when working in estuarine waters) 360 degrees around the vessel where the net would be set. If a marine mammal is sighted during this observation period, nets would not be deployed until the animal has left the area, is on a path away from where the net would be set, or has not been re-sighted within 15 minutes. Alternatively, the research team may move the vessel to an area clear of marine mammals. If the vessel moves, the 15 minute observation period is repeated. Monitoring by all available crew would continue while the net is being deployed, during the soak, and during haulback.
If marine mammals are sighted in the peripheral sampling area during active netting, the SEFSC will raise and lower the net leadline. If marine mammals do not immediately depart the area and the animal appears to be at-risk of entanglement (
If protected species are not sighted during the 15 minute observation period, the gear may be set. Waters surrounding the net and the net itself would be continuously monitored during the soak. If protected species are sighted during the soak and appear to be at risk of interaction with the gear, then the gear is pulled immediately. If fishing operations are halted, operations resume when animal(s) have not been sighted within 15 minutes or are determined to no longer be at risk, as determined by the judgment of the FPC or SWL. In other instances, the station is moved or cancelled. If any disturbance in the gear is observed in the gear, it is immediately checked or pulled.
In addition to the general mitigation measures listed above, the SEFSC will implement the following mitigation measures:
• Monitor area for marine mammals and, if present, delay setting gear until the animal is deemed not at risk.
• Immediately reel in lines if marine mammals are deemed to be at risk of interacting with gear.
• Not discard leftover bait overboard while actively fishing.
• Inspect tackles daily to avoid unwanted line breaks.
When fishing with bottom or pelagic longlines, the SEFSC will: (1) Limit longline length and soak times to the minimum amount possible; (2) deploy longline gear first (after required monitoring) prior to conducting environmental sampling; (3) if any marine mammals are observed, delay deploying gear unless animal is not at risk of hooking; (4) pull gear immediately and implement the move-on rule if any marine mammal is hooked or at risk of being hooked; (5) deploy longline gear prior to environmental sampling; and (6) avoid chumming (
Prior to arrival on station (but within 0.5 nautical mile), the officer, crew members, and scientific party on watch visually scan for protected species for 30 minutes prior to station arrival for pelagic longline surveys and 15 minutes prior for other surveys. Binoculars will be used as necessary to survey the area while approaching and upon arrival at the station, while the gear is deployed, and during haulback. Additional monitoring is conducted 15 minutes prior to setting longline gear by members of the scientific crew that monitor from the back deck while baiting hooks. If protected species are sighted prior to setting the gear or at any time the gear is in the water, the bridge crew and SWL are alerted immediately. Environmental conditions (
If marine mammals are detected during setting operations or while the gear is in the water and are considered to be at risk (
There are also a number of standard measures designed to reduce hooking potential and minimize injury. In all pelagic longline sets, gangions are 110 percent as long as the drop line depth; therefore, this gear configuration allows a potentially hooked marine mammal the ability to reach the surface. SEFSC longline protocols specifically prohibit chumming reducing any attraction. Further, no stainless steel hooks are used so that in the event a hook can not be retrieved from an animal, it will corrode. Per PLTRP, the SEFSC pelagic longline survey uses the Pelagic Longline Marine Mammal Handling and Release Guidelines for any pelagic longline sets made within the Atlantic EEZ. These procedures would also be implemented in the GOMRA and CRA.
While transiting in areas subjected to the North Atlantic ship strike rule, all SEFSC- affiliated research vessels (NOAA vessels, NOAA chartered vessels, and research partner vessels) will abide by the required speed restrictions and sighting alert protocols. The ship strike rule for the southeast U.S. seasonal management area (SMA) requires that, from November 15 through April 15, all vessels 65 feet or longer must slow to 10 kn or less in the right whale calving and nursery grounds which are bounded to the north by latitude 31°27′ N, to the south by 29°45′ N, and to the east by 80°51′36″ W. Mid-Atlantic SMAs include several port or bay entrances from northern Georgia to Rhode Island between November 1 and April 30. In addition, dynamic management areas (DMAs) are temporary areas created around right whale sightings, the size of which depends on the number of whales sighted. Voluntary speed reductions may apply when no SMA is in effect. All NOAA research vessels operating in North Atlantic right whale habitat participate in the Right Whale Early Warning System.
SEFSC research vessel captains and crew watch for marine mammals while underway during daylight hours and take necessary actions to avoid them. There are currently no Marine Mammal Observers (MMOs) aboard the vessels dedicated to watching for marine mammals to minimize the risk of collisions, although the large NOAA vessels (
The Right Whale Early Warning System is a multi-agency effort that includes the SEFSC, the Florida Fish and Wildlife Conservation Commission (FWCC), U.S. Coast Guard, U.S. Navy, and volunteer observers. Sightings of the critically endangered North Atlantic right whale are reported from aerial surveys, shipboard surveys, whale watch vessels, and opportunistic sources (U.S. Coast Guard, commercial ships, fishing vessels, and the general public). Whale sightings are reported in real time to the Right Whale Early Warning System network and information is disseminated to mariners within a half hour of a sighting. The program was designed to reduce collisions between ships and North Atlantic right whales by alerting mariners to the presence of the whales in near real time. Under the proposed rule, all NOAA-affiliated vessels operating in North Atlantic right whale habitat will be required to participate in the Right Whale Early Warning System.
The use and effectiveness of acoustic deterrent devices in fisheries in which bottlenose dolphins have the potential to interact has been approached with caution. Two primary concerns expressed with regard to pinger effectiveness in reducing marine mammal bycatch relate to habituation (
The BDTRP, after years of directed investigation, found pingers are not effective at deterring bottlenose dolphins from depredating on fish captured by trawls and gillnets. During research driven by the BDTRT efforts to better understand the effectiveness of pingers on bottlenose dolphins, one became entangled and drowned in a net outfitted with a pinger. Dolphins can become attracted to the sound of the pinger because they learn it signals the presence of fish (
The effectiveness of acoustic and visual deterrents for species encountered in the ARA, GOMRA, and CRA is uncertain. Therefore, the SEFSC will not be required to outfit gear with deterrent devices but is encouraged to undertake investigations on the efficacy of these measures where unknown (
Captured live or injured marine mammals are released from research gear and returned to the water as soon as possible with no gear or as little gear remaining on the animal as possible. Animals are released without removing them from the water if possible, and data collection is conducted in such a manner as not to delay release of the animal(s) or endanger the crew. SEFSC is responsible for training SEFSC and partner researchers on how to identify different species; handle and bring marine mammals aboard a vessel; assess the level of consciousness; remove fishing gear; and return marine mammals to water. Human safety is always the paramount concern.
At least two persons aboard SEFSC ships and one person aboard smaller vessels, including vessels operated by partners where no SEFSC staff are present, will be trained in marine mammal handling, release, and disentanglement procedures. If a marine mammal is entangled or hooked in fishery research gear and discovered alive, the SEFSC or affiliate will follow safe handling procedures. To facilitate this training, SEFSC would be required to ensure relevant researchers attend the NMFS Highly Migratory Species/Protected Species Safe Handling, Release, and Identification Workshop
Based on our evaluation of the applicant's proposed measures, as well as other measures considered by NMFS, NMFS has preliminarily determined that the proposed mitigation measures provide the means of effecting the least practicable impact on the affected species or stocks and their habitat, paying particular attention to rookeries, mating grounds, and areas of similar significance.
Based on our evaluation of the SEFSC's proposed measures, as well as other measures considered by NMFS,
The TPWD would undertake a number of measures to minimize risk of entangling bottlenose dolphins. Only new or fully repaired gill nets will be used thereby eliminating holes. Gill nets will be set with minimal slack and a very short marker buoy attached to the deep end of the net. This reduction in slack and float buoy length is designed to reduce possible entanglement. The TPWD would also modify the nets to greatly reduce or eliminate any gaps between the float/lead line and the net. As currently configured, nets are tied to the lines every eight in. creating a gap between the net and line of approximately six to eight in. depending on the mesh size. TPWD field crews report that entanglement has typically occurred in the float or lead lines in or near the gap in question. TPWD would tie the net to the lines at no more than 4 in. intervals, reducing the gap size to less than four in. should help prevent getting a tail, pectoral, or fluke fin getting caught in these gaps.
Prior to setting nets, dedicated marine mammal observations will be conducted by at least one researcher trained in marine mammal detection techniques. If dolphins are observed around or on a path toward the sampling site, TPWD would delay setting the net until the animal has moved and is on a path away from the site. If an animal is observed around and on a path toward the sampling area while setting the net, the net will be hauled back aboard until the animal has moved on. If animals remain in the area, TPWD will move on to another site not in the animal's path without setting the net. When a net is set, TPWD would minimize soak time by utilizing the “last out/first in” strategy for gill nets set in sites where marine mammals have been encountered within the last 5 years. A net set in this manner will be deployed last and retrieved first, reducing soak times by an average of 1.35 hours but a maximum of 6.6 hours.
TPWD researchers will immediately respond to net disturbances when setting and retrieving nets to determine if a dolphin is entangled and, if so, will release the dolphin immediately. All nets set the night before will be inspected for the presence of bottlenose dolphins and sea turtles before any nets are retrieved. If these animals are observed they will be released immediately. At least one TPWD research aboard gillnetting survey vessels will be trained in NMFS-approved Marine Mammal Handling Procedures.
The TPWD would remove fishing grids from their sampling areas where dolphins have been taken on more than one occasion or where multiple adjacent grids have had at least one dolphin encounter. To date, grids which meet one or both of these criteria are (1) Aransas Bay, just south of Allyn's Bight (grid #'s 280, 290, 291, 301, see Fig.3 in TPWD's application), (2) Corpus Christi Bay, south of Ingleside shoreline (CC grid #132, see Fig. 4 in TPWD's application), and (3) Lower Laguna Madre, in Redfish Bay (LLM grid #47, see Fig 5 in TPWD's application).
Based on our evaluation of the TPWD's proposed measures, as well as other measures considered by NMFS, NMFS has preliminarily determined that the proposed mitigation measures provide the means effecting the least practicable impact on the affected species or stocks and their habitat, paying particular attention to rookeries, mating grounds, and areas of similar significance.
In order to issue an incidental take authorization for an activity, section 101(a)(5)(A) of the MMPA states that NMFS must set forth “requirements pertaining to the monitoring and reporting of such taking.” The MMPA implementing regulations at 50 CFR 216.104 (a)(13) require that requests for incidental take authorizations must include the suggested means of accomplishing the necessary monitoring and reporting that will result in increased knowledge of the species and of the level of taking or impacts on populations of marine mammals that are expected to be present in the proposed action area.
Monitoring and reporting requirements prescribed by NMFS should contribute to improved understanding of one or more of the following:
• Occurrence of marine mammal species or stocks in the action area (
• Nature, scope, or context of likely marine mammal exposure to potential stressors/impacts (individual or cumulative, acute or chronic), through better understanding of: (1) Action or environment (
• Individual marine mammal responses (behavioral or physiological) to acoustic stressors (acute, chronic, or cumulative), other stressors, or cumulative impacts from multiple stressors;
• How anticipated responses to stressors impact either: (1) Long-term fitness and survival of individual marine mammals; or (2) populations, species, or stocks;
• Effects on marine mammal habitat (
• Mitigation and monitoring effectiveness.
The SEFSC plans to make more systematic its training, operations, data collection, animal handling and sampling protocols, etc. in order to improve its ability to understand how mitigation measures influence interaction rates and ensure its research operations are conducted in an informed manner and consistent with lessons learned from those with experience operating these gears in close proximity to marine mammals. We propose the monitoring requirements described below.
Marine mammal watches are a standard part of conducting fisheries research activities and are implemented as described previously in “Proposed Mitigation.” Dedicated marine mammal observations occur as described (1) for some period prior to deployment of most research gear; (2) throughout deployment and active fishing of all research gears; (3) for some period prior to retrieval of gear; and (4) throughout retrieval of research gear. Observers should record the species and estimated number of animals present and their behaviors, which may be valuable information towards an understanding of whether certain species may be attracted to vessels or certain survey gears. Separately, on white boats, marine mammal watches are conducted by watch-standers (those navigating the vessel and other crew; these will typically not be SEFSC personnel) at all times when the vessel is being operated. The primary focus for this type of watch is to avoid striking marine mammals and to generally avoid navigational hazards. These watch-standers typically
The SEFSC anticipates that additional information on practices to avoid marine mammal interactions can be gleaned from training sessions and more systematic data collection standards. The SEFSC will conduct annual trainings for all chief scientists and other personnel who may be responsible for conducting dedicated marine mammal visual observations to explain mitigation measures and monitoring and reporting requirements, mitigation and monitoring protocols, marine mammal identification, recording of count and disturbance observations (relevant to AMLR surveys), completion of datasheets, and use of equipment. Some of these topics may be familiar to SEFSC staff, who may be professional biologists, The SEFSC shall determine the agenda for these trainings and ensure that all relevant staff have necessary familiarity with these topics. The first such training will include three primary elements:
First, the course will provide an overview of the purpose and need for the authorization, including mandatory mitigation measures by gear and the purpose for each, and species that the SEFSC is authorized to incidentally take.
Second, the training will provide detailed descriptions of reporting, data collection, and sampling protocols. This portion of the training will include instruction on how to complete new data collection forms such as the marine mammal watch log, the incidental take form (
The SEFSC will also dedicate a portion of training to discussion of best professional judgment (which is recognized as an integral component of mitigation implementation; see “Proposed Mitigation”), including use in any incidents of marine mammal interaction and instructive examples where use of best professional judgment was determined to be successful or unsuccessful. We recognize that many factors come into play regarding decision-making at sea and that it is not practicable to simplify what are inherently variable and complex situational decisions into rules that may be defined on paper. However, it is our intent that use of best professional judgment be an iterative process from year to year, in which any at-sea decision-maker (
Improved standardization of handling procedures were discussed previously in “Proposed Mitigation.” In addition to the benefits implementing these protocols are believed to have on animals through increased post-release survival, SEFSC believes adopting these protocols for data collection will also increase the information on which “serious injury” determinations (NMFS, 2012a, b) are based and improve scientific knowledge about marine mammals that interact with fisheries research gears and the factors that contribute to these interactions. SEFSC personnel will be provided standard guidance and training regarding handling of marine mammals, including how to identify different species, bring an individual aboard a vessel, assess the level of consciousness, remove fishing gear, return an individual to water and log activities pertaining to the interaction.
The SEFSC will record interaction information on either existing data forms created by other NMFS programs or will develop their own standardized forms. To aid in serious injury determinations and comply with the current NMFS Serious Injury Guidelines, researchers will also answer a series of supplemental questions on the details of marine mammal interactions.
Finally, for any marine mammals that are killed during fisheries research activities, when practicable, scientists will collect data and samples pursuant to Appendix D of the SEFSC DEA, “Protected Species Handling Procedures for SEFSC Fisheries Research Vessels.”
As is normally the case, SEFSC will coordinate with the relevant stranding coordinators for any unusual marine mammal behavior and any stranding, beached live/dead, or floating marine mammals that are encountered during field research activities. The SEFSC will follow a phased approach with regard to the cessation of its activities and/or reporting of such events, as described in the proposed regulatory text following this preamble. In addition, Chief Scientists (or cruise leader, CS) will provide reports to SEFSC leadership and to the Office of Protected Resources (OPR). As a result, when marine mammals interact with survey gear, whether killed or released alive, a report provided by the CS will fully describe any observations of the animals, the context (vessel and conditions), decisions made and rationale for decisions made in vessel and gear handling. The circumstances of these events are critical in enabling the SEFSC and OPR to better evaluate the conditions under which takes are most likely occur. We believe in the long term this will allow the avoidance of these types of events in the future.
The SEFSC will submit annual summary reports to OPR including:
(1) Annual line-kilometers surveyed during which the EK60, ME70, SX90 (or equivalent sources) were predominant (see “Estimated Take by Acoustic Harassment” for further discussion), specific to each region;
(2) Summary information regarding use of all trawl, net, and hook and line gear, including number of sets, tows, hook hours, etc., specific to each research area and gear;
(3) Accounts of all incidents of marine mammal interactions, including circumstances of the event and descriptions of any mitigation procedures implemented or not implemented and why;
(4) Summary information related to any disturbance of marine mammals and distance of closest approach;
(5) A written description of any mitigation research investigation efforts and findings (
(6) A written evaluation of the effectiveness of SEFSC mitigation strategies in reducing the number of marine mammal interactions with survey gear, including best professional judgment and suggestions for changes to the mitigation strategies, if any; and
(7) Details on marine mammal-related training taken by SEFSC and partner scientists.
The period of reporting will be annually, beginning one year post-issuance of any LOA, and the report must be submitted not less than ninety days following the end of a given year.
Should an incidental take occur, the SEFSC, or affiliated partner involved in the taking, shall follow the NMFS Final Take Reporting and Response Procedures, dated January 15, 2016. NMFS has established a formal incidental take reporting system, the PSIT database, requiring that incidental takes of protected species be reported within 48 hours of the occurrence. The PSIT generates automated messages to NMFS leadership and other relevant staff, alerting them to the event and to the fact that updated information describing the circumstances of the event has been inputted to the database. The PSIT and CS reports represent not only valuable real-time reporting and information dissemination tools but also serve as an archive of information that may be mined in the future to study why takes occur by species, gear, region, etc.
The SEFSC will also collect and report all necessary data, to the extent practicable given the primacy of human safety and the well-being of captured or entangled marine mammals, to facilitate serious injury (SI) determinations for marine mammals that are released alive. The SEFSC will require that the CS complete data forms and address supplemental questions, both of which have been developed to aid in SI determinations. The SEFSC understands the critical need to provide as much relevant information as possible about marine mammal interactions to inform decisions regarding SI determinations. In addition, the SEFSC will perform all necessary reporting to ensure that any incidental M/SI is incorporated as appropriate into relevant SARs.
Issuance of the proposed regulations would require TPWD to monitor for marine mammals starting 0.5 miles (800 meters) from sampling site and for 15 minutes at sampling site prior to setting the net. Should a marine mammal be observed within 0.5 miles (800 meters) of the site and is on a path toward the site, the net would not be deployed. Should a marine mammal be observed during the 15-minute observation period at the site, the net would not be deployed. The net may only be deployed if marine mammals are observed on a path away from the site consistently for 15 minutes or are not re-sighted within 15 minutes.
TPWD currently reports marine mammal entanglements to NMFS Southeast Regional Office (SERO). However, reporting is not standardized and, in the past, has led to questions regarding the circumstances of the take and disposition of the animal. The proposed regulations would standardize a comprehensive reporting scheme and require TPWD to report all incidents of marine mammal interaction to OPR and NMFS SERO within 48 hours of occurrence. Also within 48 hours, TPWD shall log the incident in NMFS' Protected Species Incidental Take (PSIT) database and provide any supplemental information to OPR and SERO upon request. Information related to marine mammal interaction (animal captured or entangled in research gear) must include the following:
• Time, date, and location (latitude/longitude) of the incident;
• Monitoring conducted prior to and occurring at the time of incident;
• Environmental conditions (
• Description of the animal(s) involved (
• Water depth and net location where entangled;
• Nature of the entanglement (
• Fate of the animal(s);
• Detailed description of events, including how animals was disentangled and behavior upon release, including signs of injury (if alive);
• Photographs or video footage of the animal(s).
TPWD would also be required to submit an annual report to OPR not later than ninety days following the end of the fall sampling season. TPWD would provide a final report within thirty days following resolution of comments on the draft report. These reports shall contain, at minimum, the following:
• Locations and time/date of all net sets;
• all instances of marine mammal observations and descriptions of any mitigation procedures implemented or not implemented and why;
• all incidents of marine mammal interactions, including all information required in § 219.86(b);
• A written evaluation of the effectiveness of TPWD mitigation strategies in reducing the number of marine mammal interactions with survey gear, including gear modifications and best professional judgment and suggestions for changes to the mitigation strategies, if any;
• A summary of all relevant marine mammal training.
We note here that the takes from potential gear interactions enumerated below could result in non-serious injury, but their worse potential outcome (mortality) is analyzed for the purposes of the negligible impact determination.
We discuss here the connection, and differences, between the legal mechanisms for authorizing incidental take under section 101(a)(5) for activities such as SEFSC's research activities, and for authorizing incidental take from commercial fisheries. In 1988, Congress amended the MMPA's provisions for addressing incidental take of marine mammals in commercial fishing operations. Congress directed NMFS to develop and recommend a new long-term regime to govern such
PBR is defined in Section 3 of the MMPA as the maximum number of animals, not including natural mortalities, that may be removed from a marine mammal stock while allowing that stock to reach or maintain its optimum sustainable population (OSP) and, although not controlling, can be one measure considered among other factors when evaluating the effects of M/SI on a marine mammal species or stock during the section 101(a)(5)(A) process. OSP is defined in section 3 of the MMPA as the number of animals which will result in the maximum productivity of the population or the species, keeping in mind the carrying capacity of the habitat and the health of the ecosystem of which they form a constituent element. A primary goal of the MMPA is to ensure that each species or stock of marine mammal is maintained at or returned to its OSP.
PBR values are calculated by NMFS as the level of annual removal from a stock that will allow that stock to equilibrate within OSP at least 95 percent of the time, and is the product of factors relating to the minimum population estimate of the stock (N
Congress called for PBR to be applied within the management framework for commercial fishing incidental take under section 118 of the MMPA. As a result, PBR cannot be applied appropriately outside of the section 118 regulatory framework without consideration of how it applies within section 118 framework, as well as how other statutory management frameworks in the MMPA differ from the framework in section 118. PBR was not designed and is not used as an absolute threshold limiting commercial fisheries. Rather, it serves as a means to evaluate the relative impacts of those activities on marine mammal stocks. Even where commercial fishing is causing M/SI at levels that exceed PBR, the fishery is not suspended. When M/SI exceeds PBR in the commercial fishing context under section 118, NMFS may develop a take reduction plan, usually with the assistance of a take reduction team. The take reduction plan will include measures to reduce and/or minimize the taking of marine mammals by commercial fisheries to a level below the stock's PBR. That is, where the total annual human-caused M/SI exceeds PBR, NMFS is not required to halt fishing activities contributing to total M/SI but rather utilizes the take reduction process to further mitigate the effects of fishery activities via additional bycatch reduction measures. In other words, under section 118 of the MMPA, PBR does not serve as a strict cap on the operation of commercial fisheries that may incidentally take marine mammals.
Similarly, to the extent PBR may be relevant when considering the impacts of incidental take from activities other than commercial fisheries, using it as the sole reason to deny (or issue) incidental take authorization for those activities would be inconsistent with Congress's intent under section 101(a)(5) and the use of PBR under section 118. The standard for authorizing incidental take under section 101(a)(5) continues to be, among other things, whether the total taking will have a negligible impact on the species or stock. When Congress amended the MMPA in 1994 to add section 118 for commercial fishing, it did not alter the standards for authorizing non-commercial fishing incidental take under section 101(a)(5), implicitly acknowledging that the negligible impact under section 101(a)(5) is a separate from the PBR metric under section 118. In fact, in 1994, Congress also amended section 101(a)(5)(E) (a separate provision governing commercial fishing incidental take for species listed under the Endangered Species Act) to add compliance with the new section 118 but kept the requirement for a negligible impact finding. Congress thus understood that the determination of negligible impact and application of PBR may share certain features but are, in fact, different.
Since the introduction of PBR, NMFS has used the concept almost entirely within the context of implementing sections 117 and 118 and other commercial fisheries management-related provisions of the MMPA. Although there are a few examples where PBR has informed agency deliberations under other sections of the MMPA, where PBR has been raised, it has been a consideration and not dispositive to the issue at hand. Further, the agency's thoughts regarding the potential role of PBR in relation to other programs of the MMPA have evolved since the agency's earlier applications to section 101(a)(5) decisions. The MMPA requires that PBR be estimated in stock assessment reports and that it be used in applications related to the management of take incidental to commercial fisheries (
Nonetheless, NMFS recognizes that as a quantitative metric, PBR may be useful in certain instances as a consideration when evaluating the impacts of other human-caused activities on marine mammal stocks. Outside the commercial fishing context, and in consideration of all known human-caused mortality, PBR can help inform the potential effects of M/SI caused by activities authorized under 101(a)(5)(A) on marine mammal stocks. As noted by NMFS and the USFWS in our implementation regulations for the 1986 amendments to the MMPA (54 FR 40341, September 29, 1989), the Services consider many factors, when available, in making a negligible impact determination, including, but not limited to, the status of the species or stock relative to OSP (if known); whether the recruitment rate for the species or stock is increasing, decreasing, stable, or unknown; the size and distribution of the population; and existing impacts and environmental conditions. In this multi-factor analysis, PBR can be a useful indicator for when, and to what extent, the agency should take an especially close look at the circumstances associated with the potential mortality, along with any other
When considering PBR during evaluation of effects of M/SI under section 101(a)(5)(A), we first calculate a metric for each species or stock that incorporates information regarding ongoing anthropogenic M/SI into the PBR value (
Where a specified activity could cause (and NMFS is contemplating authorizing) incidental M/SI that is less than 10 percent of residual PBR (the “insignificance threshold, see below), we consider M/SI from the specified activities to represent an insignificant incremental increase in ongoing anthropogenic M/SI for the marine mammal stock in question that alone (
Where the anticipated M/SI is near, at, or above residual PBR, consideration of other factors (positive or negative), including those outlined above, as well as mitigation are especially important to assessing whether the M/SI will have a negligible impact on the species or stock. PBR is a conservative metric and not sufficiently precise to serve as an absolute predictor of population effects upon which mortality caps would appropriately be based. For example, in some cases stock abundance (which is one of three key inputs into the PBR calculation) is underestimated because marine mammal survey data within the U.S. EEZ are used to calculate the abundance even when the stock range extends well beyond the U.S. EEZ. An underestimate of abundance could result in an underestimate of PBR. Alternatively, we sometimes may not have complete M/SI data beyond the U.S. EEZ to compare to PBR, which could result in an overestimate of residual PBR. M/SI that exceeds PBR may still potentially be found to be negligible in light of other factors that offset concern, especially when robust mitigation and adaptive management provisions are included.
This action is similar to the Navy's authorization under the MMPA litigated in
Specifically, PBR was designed as a tool for evaluating mortality and is defined as the number of animals that can be removed while allowing the stock to reach or maintain OSP, with the formula for PBR designed to ensure that growth towards OSP is not reduced by more than 10 percent (or equilibrate to OSP 95 percent of the time). Separately, and without reference to PBR, NMFS' long-standing MMPA implementing regulations state that take will have a negligible impact when it does not adversely affect the species or stock through effects on annual rates of recruitment or survival. OSP (to which PBR is linked) is defined in the statute as a population which falls within a range from the population level that is the largest supportable within the ecosystem to the population level that results in maximum net productivity. OSP is an aspirational goal of the overall statute and PBR is designed to ensure minimal deviation from this overarching goal. The “negligible impact” determination and finding protects against “adverse impacts on the affected species and stocks” when evaluating specific activities.
For all these reasons, even where M/SI exceeds residual PBR, it is still possible for the take to have a negligible impact on the species or stock. While “allowing a stock to reach or maintain OSP” would ensure that NMFS approached the negligible impact standard in a conservative and precautionary manner so that there were not “adverse effects on affected species or stocks,” it is equally clear that in some cases the time to reach this aspirational OSP could be slowed by more than 10 percent
Accordingly, while PBR is useful for evaluating the effects of M/SI in section 101(a)(5)(A) determinations, it is just one consideration to be assessed in combination with other factors and should not be considered determinative. The accuracy and certainty around the data that feed any PBR calculation (
Our evaluation of the M/SI for each of the species and stocks for which mortality could occur follows. In addition, all mortality authorized for some of the same species or stocks over the next several years pursuant to our final rulemakings for NEFSC has been incorporated into the residual PBR.
We first consider maximum potential incidental M/SI for each stock (Table 14 and 15) in consideration of NMFS's threshold for identifying insignificant M/SI take (10 percent of residual PBR (69 FR 43338; July 20, 2004)). By considering the maximum potential incidental M/SI in relation to residual PBR and ongoing sources of anthropogenic mortality, we begin our evaluation of whether the potential incremental addition of M/SI through SEFSC research activities may affect the species' or stock's annual rates of recruitment or survival. We also consider the interaction of those mortalities with incidental taking of that species or stock by harassment pursuant to the specified activity.
We methodically examined each stock above the insignificance threshold to determine if the amount and degree of proposed taking would have effects to annual rates of recruitment or survival (
First we compiled data to assess the baseline population status of each stock for which the SEFSC is requesting take. These data were pulled from the most recent SARs (Hayes
For estuarine bottlenose dolphin stocks, reaching our preliminary negligible impact determination required a hard examination of the status of each of the 7 ARA and 11 GOMRA stocks for which we propose to authorize take. We recognize that PBR is technically undetermined for many stocks because abundance data is more than eight years old. Therefore, we consulted with marine mammal experts at the SEFSC to derive best estimates of PBR based on the available data. Overall, PBR is low (less than one animal) because stock sizes are generally small (tens to hundreds) in southeast estuaries (with notable exceptions such as Mississippi Sound). Stock sizes are expected to be small because the abundance of a dolphin stock in an estuary is bounded by the capabilities of the bays and estuarine systems to support that stock (
We approached the issue of outdated abundance information by working closely with SEFSC experts and have developed estimated abundance data and PBR values. The resulting values follow the general trend of small stock sizes and are very conservative in some cases. For example, recent abundance surveys in Barataria Bay and Terrebonne Bay revealed stock numbers were in the thousands compared to the previously estimated populations of approximately 200-300 animals (Hayes et al., 2018). In addition, three stocks, including the Perdido Bay stock have population estimates showing zero. However, it is well documented dolphins inhabit these areas. We also consulted with the NMFS Southeast Regional Office (SERO) bottlenose dolphin conservation coordinator to better understand the nature of the takes identified in the SARs M/SI values (
In the ARA, all estuarine and coastal stocks for which we are proposing to authorize take are below the insignificance threshold (10 percent r-PBR) except for the Northern South Carolina Estuarine, Northern Georgia/Southern South Carolina Estuarine, Central Georgia Estuarine, and Southern Georgia Estuarine stocks (Table 14). The latter two stocks are only slightly above the insignificance threshold (11.76 and 10.35 percent, respectively). The proposed take for the Northern Georgia/Southern South Carolina stock constitutes 28.57 percent of r-PBR. Sources of anthropogenic mortality for this stock include hook and line and crab pot/trap fisheries. The proposed M/SI take (0.2/year) of the Northern South Carolina stock is 50 percent of PBR. However, considering an average of one animal every 5 years is taken in commercial fisheries (likely gillnet or crab pot/trap), the proposed take and annual M/SI constitute 100 percent of r-PBR. The Northern South Carolina Estuarine System stock is delimited as dolphins inhabiting estuarine waters from Murrells Inlet, South Carolina, southwest to Price Inlet, South Carolina, the northern boundary of Charleston Estuarine System stock. The region has little residential, commercial, and industrial development and contains the Cape Romain National Wildlife Refuge. As such, the stock is not facing heavy anthropogenic pressure, and there are no identified continuous indirect stressors threatening the stock.
Of the nine estuarine stocks in the GOMRA for which we are proposing to authorize take by M/SI, three are below the insignificance threshold (10% r-PBR): Terrebonne Bay/Timbalier Bay; St. Vincent Sound/Apalachicola Bay/St. George Sound, and Apalachee Bay. The three coastal stocks are also below the insignificance threshold. Four stocks are between 14 and 40 percent r-PBR. The Mississippi Sound stock is already above PBR in absence of the proposed authorization, while authorizing take in Mobile Bay would put the stock above PBR (Table 14).
For the Mississippi Sound stock, we evaluated various aspects of stock status. According to this stock's 2017 SAR, the mean annual fishery-related mortality and serious injury during 2012-2015 for observed fisheries and strandings and at-sea observations identified as fishery-caused related is 1.0. Additional mean annual mortality and serious injury during 2011-2015 due to other human-caused actions (fishery research, sea turtle relocation trawling, gunshot wounds, and DWH oil spill) is 309 with the majority sourced from DWH. Projected annual M/SI over the next five years from commercial fishing and DWH are 6 and 1539, respectively. Management and research actions, including ongoing health assessments and Natural Resource Damage Plan efforts designed to restore injury to the stock, are anticipated to improve the status of the stock moving forward. Further, marine mammal population modeling indicates Barataria Bay dolphin should begin recovery nine years post spill (NRDA Trustees, 2016; DWH MMIQT 2015). Applying that model to the Mississippi Sound stock, we should begin to see the population recover during the life of the proposed regulations. We note the three research-related mortalities discussed in the 2017 SAR for this stock are from the specified activities for which we are now proposing to authorize take. Therefore, the proposed take would not be in addition to but would account for these research-related takes.
Our proposal to authorize one M/SI take from the Mobile Bay stock over 5 years would result in the stock being above r-PBR. The known takes of this stock includes one mortality in blue crab trap/pot gear in 2015, one mortality in stranding data where cause of death could not be determined and the animal could have been from the Northern Coastal stock, and one SI interaction in 2016. As with other estuarine stocks where abundance data is severely outdated, the population estimate is small compared to other estuarine stocks more recently and thoroughly studied. This could be a result of sampling methods. For example, the abundance estimate of 122 animals for Mobile Bay is based on aerial survey data collected during September through October in 1992 and 1993 with 16 percent of animals observed in bay (Blaylock and Hoggard, 1994). Sounds and estuaries were eliminated from the analysis. Murky water in GoM estuaries and dark, grey animals makes it very difficult to detect dolphins from aerial surveys. Further, Mobile Bay is a large estuarine system (approximately 456 km
We consider qualitative information such as population dynamics and
Understanding the population dynamics of each bottlenose dolphin stock considered in this rulemaking is not possible as the data simply do not exist for each stock. Therefore, we considered a well-studied population, the Sarasota Bay stock, as a proxy for assessing population dynamics of other estuarine stocks throughout the ARA and GOMRA. The Sarasota Bay stock is the most data rich population of bottlenose dolphins in the United States. The Sarasota Bay Research Program (SBRP) possesses 40 years of data on the resident dolphin population. Research topics include, but are not limited to, population structure and dynamics, health and physiology, and human interaction and impacts.
The Sarasota Bay stock demonstrates high recruitment and survival rates. Wells
For stocks that are known to be experiencing levels of stress from fishing and other anthropogenic sources (
Region-wide, Gulf of Mexico states, in coordination with Federal agencies, are taking action to recover from injury sustained during the DWH spill. Funds from the spill have been allocated specifically for marine mammal restoration to the Florida, Alabama, Mississippi, Louisiana, Texas, Open Ocean, and Region-wide Trustee Implementation Groups (TIGs). In June 2017, the Trustees released their Strategic Framework for Marine Mammal Restoration Activities. The framework includes a number of marine mammal restoration goals which would improve marine mammal populations over the course of the proposed regulations. These goals include, but are
For all offshore pelagic stocks where PBR is known, except for gray seal, the level of taking is less than 10 percent of r-PBR after considering other sources of human-caused mortality (Table 15). Again, for those stocks with total incidental M/SI less than the significance threshold (
Gray seals are the only stock where, at first look, annual M/SI is above PBR (Table 15). However, the minimum abundance estimate provided in the SAR is based on the U.S. population estimate of 23,158 and does not include the Canada population. The total estimated Canadian gray seal population in 2016 was estimated to be 424,300 (95% CI=263,600 to 578,300) (DFO 2017). This would be acceptable except that the annual M/SI rate of 5,688 includes M/SI from both the U.S. and Canada populations. Therefore, we should compare population to population. The draft 2018 indicates the annual M/SI for the U.S. population is 878. That equates to an r-PBR of 511. Considering the SEFSC is requesting one take, by M/SI, of gray seal over 5 years (or 0.2 animals per year), this results in a percentage of 0.003, well under the 10 percent insignificance threshold. Further, given the proposed M/SI of one animal over five years, this amount of take can be considered discountable given the large population size.
We note that for all stocks, we have conservatively considered in this analysis that any gear interaction would result in mortality or serious injury when it has been documented that some gear interactions may result in Level A harassment (injury) or no injury at all, as serious injury determinations are not made in all cases where the disposition of the animal is “released alive” and, in some cases, animals are disentangled from nets without any injury observations (
As described in greater depth previously (see “Acoustic Effects”), we do not believe that SEFSC use of active acoustic sources has the likely potential
As described previously, there is some minimal potential for temporary effects to hearing capabilities within specific frequency ranges for select marine mammals, but most effects would likely be limited to temporary behavioral disturbance. If individuals are in close proximity to active acoustic sources they may temporarily increase swimming speeds (presumably swimming away from the source) and surface time or decrease foraging effort (if such activity were occurring). These reactions are considered to be of low severity due to the short duration of the reaction. Individuals may move away from the source if disturbed. However, because the source is itself moving and because of the directional nature of the sources considered here, it is unlikely any temporary displacement from areas of significance would occur, and any disturbance would be of short duration. In addition, because the SEFSC survey effort is widely dispersed in space and time, repeated exposures of the same individuals would be very unlikely. For these reasons, we do not consider the proposed level of take by acoustic disturbance to represent a significant additional population stressor when considered in context with the proposed level of take by M/SI for any species. Further, we note no take by harassment is proposed for estuarine bottlenose dolphins; therefore, only M/SI is incorporated into our negligible impact analysis for those stocks. For Level B take of coastal stocks in both the ARA and GOMRA, it is not possible to quantify take per stock given overlap in time and space. However, we consider the anticipated amount of take to have the potential to occur from some combination of coastal stocks.
In summary, we consider the proposed authorization would not impact annual rates or recruitment or survival on any of the stocks considered here because: (1) The possibility of injury, serious injury, or mortality from the use of active acoustic devices may reasonably be considered discountable; (2) the anticipated incidents of Level B harassment from the use of active acoustic devices consist of, at worst, temporary and relatively minor modifications in behavior; (3) the predicted number of incidents of potential mortality are at insignificant levels (
Based on the analysis contained herein of the likely effects of the specified activity on marine mammals and their habitat, and taking into consideration the implementation of the proposed monitoring and mitigation measures, NMFS preliminarily finds that the total marine mammal take from SEFSC fisheries research activities will have a negligible impact on affected marine mammal species or stocks.
Similar to the SEFSC approach of considering the proposed M/SI take relative to r-PBR, we looked at known M/SI as identified in the SARs (excluding those from the proposed TPWD surveys) to estimate annual rates of M/SI (Table 16). No Level B harassment of estuarine bottlenose dolphins is proposed to be authorized to the TPWD; therefore, our analysis is limited to take by M/SI.
The stocks for which we propose to authorize take by TPWD are grouped in the Gulf of Mexico BSE SAR. Abundance data show all but 2 of the 27 stocks grouped into the SAR are more than 8 years old and, therefore, PBR is undetermined. Similar to the SEFSC, we consulted marine mammal experts at the SEFSC to derive abundance and PBRs for all stocks. Similar to other areas in the Gulf, annual rates of BSE dolphin M/SI are aggregated for the entire state of Texas (which contains seven stocks) in the Gulf of Mexico BSE SAR. Therefore, we again used information, where available, for each stock from the SAR and Southeast Marine Mammal Stranding Database to calculate but are described in text for each of the sources of M/SI (
The proposed take exceeds the insignificance threshold (10 percent r-PBR) for all four Texas stocks. However, it does not exceed r-PBR when considering other sources of M/SI for any stock. For two stocks (Laguna Madre and Matagorda Bay, Tres Palacios Bay, Lavaca Bay), there is no other known source of M/SI according to the SAR. The driving factor behind the higher percentages of r-PBR is the small stock size which results in a low PBR. For example, the Laguna Madre stocks has a population estimate of 80 individuals resulting in low PBR (0.3). This is a similar scenario to some of the estuarine stocks for which we propose to issue take to the SEFSC. TPWD would implement mitigation designed to reduce the potential for take, including research investigating the effectiveness of reducing gaps between the lead lines and net. Further, as discussed earlier, dolphins are K-selected species with variable reproductive rates, and estuarine stocks are not discretely closed populations with few animals migrating to and from coastal areas and adjacent waterbodies. The loss of one animal over 5 years is unlikely to result in more than a negligible impact to the stock's recruitment and survival rates.
Based on the analysis contained herein of the likely effects of the specified activity on marine mammals and their habitat, and taking into consideration the implementation of the proposed monitoring and mitigation measures, NMFS preliminarily finds that the total marine mammal take from TPWD's gillnet fishing surveys will have a negligible impact on affected marine mammal species or stocks.
As noted above, only small numbers of incidental take may be authorized under Section 101(a)(5)(D) of the MMPA for specified activities other than military readiness activities. The MMPA does not define small numbers and so, in practice, where estimated numbers are available, NMFS compares the number of individuals taken to the most appropriate estimation of abundance of the relevant species or stock in our determination of whether an authorization is limited to small numbers of marine mammals. Additionally, other qualitative factors may be considered in the analysis, such as the temporal or spatial scale of the activities.
The total amount of take proposed for all estuarine and coastal bottlenose dolphin stocks is less than one percent of each estuarine stock and less than 12 percent of all coastal stocks (Table 17; we note this 12 percent is conservatively high because it considers that all Level B take would come from any given single stock). For pelagic stocks, the total amount of take is less than 13 percent of the estimated population size (Table 18).
The majority of stocks would see take less than 5 percent of the population taken with the greatest percentage being 12 from Bryde's whales in the Gulf of Mexico. However, this is assuming all takes came from the same stock of beaked whales which is unlikely. Where stock numbers are unknown, we would expect a similar small amount of take relative to population sizes.
Based on the analysis contained herein of the proposed activity (including the proposed mitigation and monitoring measures) and the anticipated take of marine mammals, NMFS preliminarily finds that small numbers of marine mammals will be taken relative to the population size of the affected species or stocks.
As noted above, only small numbers of incidental take may be authorized under Section 101(a)(5)(A) of the MMPA for specified activities. The MMPA does not define small numbers and so, in practice, where estimated numbers are available, NMFS compares the number of individuals taken to the most appropriate estimation of abundance of the relevant species or stock in our determination of whether an authorization is limited to small numbers of marine mammals. Additionally, other qualitative factors may be considered in the analysis, such as the temporal or spatial scale of the activities.
Table 19 provides information relating to this small numbers analysis for the proposed authorization to TPWD. The total annual amount of taking proposed for authorization is less than one percent for affected Texas estuarine dolphin stocks.
Based on the analysis contained herein of the proposed activity (including the proposed mitigation and monitoring measures) and the anticipated take of marine mammals, NMFS preliminarily finds that small numbers of marine mammals will be taken relative to the population size of the affected species or stocks.
There are no relevant subsistence uses of the affected marine mammal stocks or species implicated by the issuance of regulations to the SEFSC or TPWD. Therefore, NMFS has determined that the total taking of affected species or stocks would not have an unmitigable adverse impact on the availability of such species or stocks for taking for subsistence purposes.
The proposed regulations governing the take of marine mammals incidental to SEFSC fisheries research survey operations contain an adaptive management component which is both valuable and necessary within the context of five-year regulations for activities that have been associated with marine mammal mortality. The use of adaptive management allows OPR to consider new information from different sources to determine (with input from the SEFSC and TPWD regarding practicability) on an annual or biennial basis if mitigation or monitoring measures should be modified (including additions or deletions). The coordination and reporting requirements in this proposed rule are designed to provide OPR with data to allow consideration of whether any changes to mitigation and monitoring is necessary. OPR and the SEFSC or TPWD will meet annually to discuss the monitoring reports and current science and whether mitigation or monitoring modifications are appropriate. Decisions will also be informed by findings from any established working groups, investigations into gear modifications and dolphin-gear interactions, new stock data, and coordination efforts between all NMFS Fisheries Science Centers. Mitigation measures could be modified if new data suggest that such modifications would have a reasonable likelihood of reducing adverse effects to marine mammals and if the measures are practicable. In addition, any M/SI takes by the SEFSC or TPWD and affiliates are required to be submitted within 48 hours to the PSIT database and OPR will be made aware of the take. If there is an immediate need to revisit monitoring and mitigation measures based on any given take, OPR and SEFSC or TPWD would meet as needed.
The following are some of the possible sources of applicable data to be considered through the adaptive management process: (1) Results from monitoring reports, as required by MMPA authorization; (2) results from general marine mammal and sound research; (3) any information which reveals that marine mammals may have been taken in a manner, extent, or
On May 9, 2016, NMFS Southeast Regional Office (SERO) issued a Biological Opinion on Continued Authorization and Implementation of National Marine Fisheries Service's Integrated Fisheries Independent Monitoring Activities in the Southeast Region. The Biological Opinion found independent fishery research is not likely to adversely affect the following ESA-listed species: Blue whales, sei whales, sperm whales, fin whales, humpback whales, North Atlantic right whales, gulf sturgeon and all listed corals in the action area. NMFS amended this Biological Opinion on June 4, 2018, updating hearing group information based on the best available science and adding NMFS OPR as an action agency. Similar to the previous finding, the amended Biological Opinion concluded SEFSC independent fishery research is not likely to adversely affect listed marine mammals.
Bottlenose dolphins are not listed under the ESA; therefore, consultation under section 7 of the ESA is not warranted for the issuance of regulations and associated LOA to the TPWD.
NMFS requests interested persons to submit comments, information, and suggestions concerning the NWFSC request and the proposed regulations (see
Pursuant to the procedures established to implement Executive Order 12866, the Office of Management and Budget has determined that this proposed rule is not significant.
Pursuant to section 605(b) of the Regulatory Flexibility Act (RFA), the Chief Counsel for Regulation of the Department of Commerce has certified to the Chief Counsel for Advocacy of the Small Business Administration that this proposed rule, if adopted, would not have a significant economic impact on a substantial number of small entities. The SEFSC and TPWD are the sole entities that would be subject to the requirements in these proposed regulations, and the SEFSC and TPWD are not small governmental jurisdictions, small organizations, or small businesses, as defined by the RFA. Because of this certification, a regulatory flexibility analysis is not required and none has been prepared.
The proposed rule for the SEFSC does not contain a collection-of-information requirement subject to the provisions of the Paperwork Reduction Act (PRA) because the applicant is a Federal agency. However, the TWPD is not a federal agency. Notwithstanding any other provision of law, no person is required to respond to nor shall a person be subject to a penalty for failure to comply with a collection of information subject to the requirements of the PRA unless that collection of information displays a currently valid OMB control number. The proposed rule for TPWD contains collection-of-information requirements subject to the provisions of the PRA. These requirements have been approved by OMB under control number 0648-0151 and include applications for regulations, subsequent LOAs, and reports.
Endangered and threatened species, Fish, Marine mammals, Reporting and recordkeeping requirements, Wildlife.
For reasons set forth in the preamble, 50 CFR part 219 is proposed to be amended as follows:
16 U.S.C. 1361
(a) Regulations in this subpart apply only to the National Marine Fisheries Service's (NMFS) Southeast Fisheries Science Center (SEFSC) and those persons it authorizes or funds to conduct fishery-independent research surveys on its behalf for the taking of marine mammals that occurs in the area outlined in paragraph (b) of this section and that occurs incidental to SEFSC and partner research survey program operations.
(b) The taking of marine mammals by the SEFSC and partners may be authorized in a 5-year Letter of Authorization (LOA) only if it occurs during fishery research surveys in the Atlantic Ocean, Gulf of Mexico, and Caribbean Sea.
Regulations in this subpart are effective from [EFFECTIVE DATE OF FINAL RULE] through [DATE 5 YEARS AFTER EFFECTIVE DATE OF FINAL RULE].
(a) Under a LOA issued pursuant to §§ 216.106 of this chapter and 219.77, the Holder of the LOA (hereinafter “SEFSC”) may incidentally, but not intentionally, take marine mammals within the areas described in § 219.71 by Level A harassment, serious injury, or mortality associated with fisheries research gear including trawls, gillnets, and hook and line, and Level B harassment associated with use of active acoustic systems provided the activity is in compliance with all terms, conditions, and requirements of the regulations in this subpart and the relevant LOA.
Notwithstanding takings contemplated in § 219.73 and authorized by a LOA issued under §§ 216.106 of this chapter and 219.77, no person in connection with the activities described in § 219.71 may:
(a) Violate, or fail to comply with, the terms, conditions, and requirements of this subpart or a LOA issued under §§ 216.106 of this chapter and 219.77;
(b) Take any marine mammal species or stock not specified in the LOA;
(c) Take any marine mammal in any manner other than as specified in the LOA;
(d) Take a marine mammal specified in such LOA in numbers exceeding those for which NMFS determines results in more than a negligible impact on the species or stocks of such marine mammal; or
(e) Take a marine mammal specified in such LOA if NMFS determines such taking results in an unmitigable adverse impact on the species or stock of such marine mammal for taking for subsistence uses.
When conducting the activities identified in § 219.71, the mitigation measures contained in any LOA issued under §§ 216.106 of this chapter and 219.77 must be implemented. These mitigation measures shall include but are not limited to:
(a)
(2) SEFSC shall coordinate and conduct briefings at the outset of each survey and as necessary between ship's crew (Commanding Officer/master or designee(s), as appropriate) and scientific party in order to explain responsibilities, communication procedures, marine mammal monitoring protocol, and operational procedures;
(3) SEFSC shall coordinate, on an annual basis, with all partners to ensure that requirements, procedures, and decision-making processes are understood and properly implemented.
(4) Where appropriate, SEFSC shall establish and maintain cooperating partner working group(s) to identify circumstances of a take should it occur and any action necessary to avoid future take.
(i) Working groups shall be established if a partner takes more than one marine mammal within 5 years to identify circumstances of marine mammal take and necessary action to avoid future take. Each working group shall meet at least once annually.
(ii) Each working group shall consist of at least one SEFSC representative knowledgeable of the mitigation, monitoring and reporting requirements contained within these regulations, one or more research institution or SEFSC representative(s) (preferably researcher(s) aboard vessel when take or risk of take occurred), one or more staff from NMFS Southeast Regional Office Protected Resources Division, and one or more staff from NMFS Office of Protected Resources.
(5) When deploying any type of sampling gear at sea, SEFSC shall at all times monitor for any unusual circumstances that may arise at a sampling site and use best professional judgment to avoid any potential risks to marine mammals during use of all research equipment.
(6) SEFSC shall implement handling and/or disentanglement protocols as specified in the guidance that shall be provided to survey personnel. At least two persons aboard SEFSC ships and one person aboard smaller vessels, including vessels operated by partners where no SEFSC staff are present, will be trained in marine mammal handling, release, and disentanglement procedures.
(7) For all research surveys using trawl, hook and line, or seine net gear in open-ocean waters (as defined from the coastline seaward), the SEFSC must implement move-on rule mitigation protocol upon observation of any marine mammal other than dolphins and porpoises attracted to the vessel. If marine mammals (other than dolphins or porpoises) are observed within 500 m of the planned location in the 10 minutes before setting gear, or are considered at risk of interacting with the vessel or research gear, or appear to be approaching the vessel and are considered at risk of interaction, the SEFSC shall move on to another sampling location or remain on site but delay gear deployment until the animals departs the area or appears to no longer be at risk of interacting with the vessel or gear. Once the animal is no longer considered a risk, another 10-minute observation shall be conducted. If no marine mammals are observed during this subsequent observation period or the visible animal(s) still does not appear to be at risk of interaction, then the set may be made. If the vessel is moved to a different section of the sampling area, the move-on rule mitigation protocol would begin anew. If, after moving on, marine mammals remain at risk of interaction, the SEFSC shall move again or skip the station. Marine mammals that are sighted further than 500 m from the vessel shall be monitored to determine their position and movement in relation to the vessel to determine whether the move-on rule mitigation protocol should be implemented. The SEFSC may use best professional judgment, in accordance with this paragraph, in making decisions related to deploying gear.
(8) SEFSC shall maintain visual monitoring effort during the entire period of time that trawl, hook and line, and seine net gear is in the water (
(9) If research operations have been suspended because of the presence of marine mammals, SEFSC may resume operations when practicable only when the animals are believed to have departed the area. SEFSC may use best professional judgment in making this determination;
(b)
(1) SEFSC shall conduct fishing operations as soon as is practicable upon arrival at the sampling station and prior to other environmental sampling not involving trawl nets.
(2) The SEFSC shall limit tow times to 30 minutes (except for sea turtle research trawls);
(3) The SEFSC shall, during haul back, open cod end close to deck/sorting table to avoid damage to animals that may be caught in gear and empty gear as quickly as possible after retrieval haul back;
(4) The SEFSC shall delay gear deployment if any marine mammals are believed to be at-risk of interaction;
(5) The SEFSC shall retrieve gear immediately if any marine mammals are believed to be entangled or at-risk of entanglement;
(6) Dedicated marine mammal observations shall occur at least 15 minutes prior to the beginning of net deployment. This watch may include
(7) Retrieve gear immediately if marine mammals are believed to be captured/entangled and follow disentanglement protocols.
(8) The SEFSC shall minimize “pocketing” in areas of trawl nets where dolphin depredation evidence is commonly observed;
(9) When conducting research under an ESA section 10(a)(1)(A) scientific research permit issued by NMFS, all marine mammal monitoring protocol contained within that permit must be implemented.
(10) SEFSC shall implement standard survey protocols to minimize potential for marine mammal interactions, including maximum tow durations at target depth and maximum tow distance, and shall carefully empty the trawl as quickly as possible upon retrieval. Trawl nets must be cleaned prior to deployment.
(11) The SEFSC shall continue investigation into gear modifications (
(c)
(1) SEFSC shall deploy hook and line gear as soon as is practicable upon arrival at the sampling station.
(2) SEFSC shall initiate marine mammal watches (visual observation) no less than 30 minutes prior to both deployment and retrieval of longline gear. Marine mammal watches shall be conducted by scanning the surrounding waters with the naked eye and range-finding binoculars (or monocular). During nighttime operations, visual observation shall be conducted using the naked eye and available vessel lighting.
(3) SEFSC shall implement the move-on rule mitigation protocol, as described in § paragraph(a)(6) of this section.
(4) SEFSC shall maintain visual monitoring effort during the entire period of gear deployment and retrieval. If marine mammals are sighted before the gear is fully deployed or retrieved, SEFSC shall take the most appropriate action to avoid marine mammal interaction. SEFSC may use best professional judgment in making this decision.
(5) If deployment or retrieval operations have been suspended because of the presence of marine mammals, SEFSC may resume such operations when practicable only when the animals are believed to have departed the area. SEFSC may use best professional judgment in making this decision.
(6) SEFSC shall implement standard survey protocols, including maximum soak durations and a prohibition on chumming.
(a)
(b)
(2) Marine mammal watches shall be conducted by watch-standers (those navigating the vessel and/or other crew) at all times when the vessel is transiting to avoid ship strike.
(c)
(2) SEFSC shall also dedicate a portion of training to discussion of best professional judgment, including use in any incidents of marine mammal interaction and instructive examples where use of best professional judgment was determined to be successful or unsuccessful.
(3) SEFSC shall coordinate with NMFS' Office of Science and Technology to ensure training and guidance related to handling procedures and data collection is consistent with other fishery science centers, where appropriate.
(d)
(2) For any marine mammal interaction involving the release of a live animal, SEFSC shall collect necessary data to facilitate a serious injury determination.
(3) SEFSC shall provide its relevant personnel with standard guidance and training regarding handling of marine mammals, including how to identify different species, bring an individual aboard a vessel, assess the level of consciousness, remove fishing gear, return an individual to water, and log activities pertaining to the interaction.
(4) SEFSC shall record such data on standardized forms, which will be subject to approval by OPR. SEFSC shall also answer a standard series of supplemental questions regarding the details of any marine mammal interaction.
(e)
(2) Annual reporting:
(i) SEFSC shall submit an annual summary report to OPR not later than ninety days following the end of a given year. SEFSC shall provide a final report within thirty days following resolution of comments on the draft report;
(ii) These reports shall contain, at minimum, the following:
(A) Annual line-kilometers and locations surveyed during which the EK60, ME70, SX90 (or equivalent sources) were predominant and associated pro-rated estimates of actual take;
(B) Summary information regarding use of all trawl, gillnet, and hook and line gear, including location, number of sets, hook hours, tows, etc., specific to each gear;
(C) Accounts of surveys where marine mammals were observed during sampling but no interactions occurred;
(D) All incidents of marine mammal interactions, including circumstances of the event and descriptions of any mitigation procedures implemented or not implemented and why and, if released alive, serious injury determinations;
(E) A written evaluation of the effectiveness of SEFSC mitigation strategies in reducing the number of marine mammal interactions with survey gear, including gear modifications and best professional judgment and suggestions for changes to the mitigation strategies, if any;
(F) A summary of all relevant training provided by SEFSC and any coordination with NMFS Office of Science and Technology and the Southeast Regional Office; and
(G) A summary of meetings and workshops outcomes with the South Carolina Department of Natural Resources designed to reduce the number of marine mammal interactions
(f)
(2) SEFSC or partner shall report all injured or dead marine mammals observed during fishery research surveys that are not attributed to the specified activity to the Southeast Regional Stranding Coordinator within 24 hours. If the discovery is made by a partner, the report shall also be submitted to the SEFSC Environmental Compliance Coordinator. The following information shall be provided:
(i) Time, date, and location (latitude/longitude) of the incident;
(ii) Description of the incident including, but not limited to, monitoring prior to and occurring at time of incident;
(iii) Environmental conditions (
(iv) Description of all marine mammal observations in the 24 hours preceding the incident;
(v) Species identification or description of the animal(s) involved;
(vi) Status of all sound source or gear used in the 24 hours preceding the incident;
(vii) Water depth;
(viii) Fate of the animal(s) (
(ix) Photographs or video footage of the animal(s).
(3) In the event of a ship strike of a marine mammal by any SEFSC or partner vessel involved in the activities covered by the authorization, SEFSC or partner shall immediately report the information in paragraph (f)(2) of this section, as well as the following additional information:
(i) Vessel's speed during and leading up to the incident;
(ii) Vessel's course/heading and what operations were being conducted,
(iii) Status of all sound sources in use,
(iv) Description of avoidance measures/requirements that were in place at the time of the strike and what additional measures were taken, if any, to avoid strike.
(v) Estimated size and length of animal that was struck;
(vi) Description of the behavior of the marine mammal immediately preceding and following the strike.
(a) To incidentally take marine mammals pursuant to these regulations, SEFSC must apply for and obtain an LOA.
(b) An LOA, unless suspended or revoked, may be effective for a period of time not to exceed the expiration date of these regulations.
(c) In the event of projected changes to the activity or to mitigation and monitoring measures required by an LOA, SEFSC must apply for and obtain a modification of the LOA as described in § 219.78.
(d) The LOA shall set forth:
(1) Permissible methods of incidental taking;
(2) Means of effecting the least practicable adverse impact (
(3) Requirements for monitoring and reporting.
(e) Issuance of the LOA shall be based on a determination that the level of taking will be consistent with the findings made for the total taking allowable under these regulations.
(f) Notice of issuance or denial of an LOA shall be published in the
(a) An LOA issued under §§ 216.106 of this chapter and 219.77 for the activity identified in § 219.71(a) shall be renewed or modified upon request by the applicant, provided that:
(1) The proposed specified activity and mitigation, monitoring, and reporting measures, as well as the anticipated impacts, are the same as those described and analyzed for these regulations (excluding changes made pursuant to the adaptive management provision in paragraph (c)(1) of this section), and
(2) OPR determines that the mitigation, monitoring, and reporting measures required by the previous LOA under these regulations were implemented.
(b) For an LOA modification or renewal requests by the applicant that include changes to the activity or the mitigation, monitoring, or reporting (excluding changes made pursuant to the adaptive management provision in paragraph (c)(1) of this section) that do not change the findings made for the regulations or result in no more than a minor change in the total estimated number of takes (or distribution by species or years), OPR may publish a notice of proposed LOA in the
(c) An LOA issued under §§ 216.106 of this chapter and 219.77 for the activity identified in § 219.71(a) may be modified by Office of Protected Resources (OPR) under the following circumstances:
(1)
(i) If, through adaptive management, the modifications to the mitigation, monitoring, or reporting measures are substantial, OPR will publish a notice of proposed LOA in the
(ii) [Reserved]
(2)
16 U.S.C. 1361
(a) Regulations in this subpart apply only to the Texas Parks and Wildlife Department (TPWD) and those persons acting under its authority during gillnet fishery research surveys for the taking of marine mammals that occurs in the area outlined in paragraph (b) of this section and that occurs incidental to research survey program operations.
(b) The taking of marine mammals by TPWD may be authorized in a 5-year Letter of Authorization (LOA) only if the taking occurs within the following Texas bays: East Matagorda, Matagorda, San Antonio, Aransas, Corpus Christi, upper Laguna Madre and lower Laguna Madre.
Regulations in this subpart are effective from [EFFECTIVE DATE OF FINAL RULE] through [DATE 5 YEARS AFTER EFFECTIVE DATE OF FINAL RULE].
Under a LOA issued pursuant to §§ 216.106 of this chapter and 219.87, the Holder of the LOA (hereinafter “TPWD”) may incidentally, but not intentionally, take marine mammals within the areas described in § 219.81 by Level A harassment, serious injury, or mortality associated with gillnet fisheries research gear provided the activity is in compliance with all terms, conditions, and requirements of the regulations in this subpart and the relevant LOA.
Notwithstanding takings contemplated in § 219.103 and authorized by a LOA issued under §§ 216.106 of this chapter and 219.87, no person in connection with the activities described in § 219.81 may:
(a) Violate, or fail to comply with, the terms, conditions, and requirements of this subpart or a LOA issued under §§ 216.106 of this chapter and 219.87;
(b) Take any marine mammal species or stock not specified in the LOA;
(c) Take any marine mammal in any manner other than as specified in the LOA;
(d) Take a marine mammal specified in such LOA in numbers exceeding those for which NMFS determines results in more than a negligible impact on the species or stocks of such marine mammal; or
(e) Take a marine mammal specified in such LOA if NMFS determines such taking results in an unmitigable adverse impact on the species or stock of such marine mammal for taking for subsistence uses.
When conducting the activities identified in § 219.81(a), the mitigation measures contained in any LOA issued under §§ 216.106 of this chapter and 219.87 must be implemented. These mitigation measures shall include but are not limited to:
(a) Only new or fully repaired gillnets shall be used. No holes greater than six inches are permitted.
(b) Upon close approach to the site and prior to setting the net, researchers shall conduct a dedicated observation for marine mammals for 15 minutes. If no marine mammals are observed during this time, the net may be set. If marine mammals are observed during this time or while setting the net, the net shall not be deployed or will be immediately removed from the water until such time as the animals has left the area and is on a path away from the net site.
(c) TPWD shall not set gillnets in dolphin “hot spots” defined as grids where dolphins have been taken on more than one occasion or where multiple adjacent grids have had at least one dolphin encounter.
(d) TPWD shall tie the float line/lead line to the net at no more than 4-inch intervals.
(e) Captured live or injured marine mammals shall be released from research gear and returned to the water as soon as possible with no gear or as little gear remaining on the animal as possible. Animals are released without removing them from the water.
(f) At least one person aboard TPWD gillnet vessel shall be trained in NMFS-approved marine mammal handling, release, and disentanglement procedures via attendance at NMFS Highly Migratory Species/Protected Species Safe Handling, Release, and Identification Workshop (
(g) Each TPWD gillnet researcher shall be familiar with NMFS Protected Species Safe Handling and Release Manual.
(a)
(b)
(2) TPWD shall report all injured or dead marine mammals observed during fishery research surveys that are not attributed to the specified activity to the Southeast Regional Stranding Coordinator within 24 hours. The following information shall be provided:
(i) Time, date, and location (latitude/longitude) of the incident;
(ii) Description of the incident including, but not limited to, monitoring prior to and occurring at time of incident;
(iii) Environmental conditions (
(iv) Description of all marine mammal observations in the 24 hours preceding the incident;
(v) Species identification or description of the animal(s) involved;
(vi) Status of all sound source or gear used in the 24 hours preceding the incident;
(vii) Water depth;
(viii) Fate of the animal(s) (
(ix) Photographs or video footage of the animal(s).
(c)
(2) These reports shall contain, at minimum, the following:
(i) Locations and time/date of all net sets;
(ii) All instances of marine mammal observations and descriptions of any mitigation procedures implemented or not implemented and why;
(iii) All incidents of marine mammal interactions, including all information required in paragraph (b) of this section;
(iv) A written evaluation of the effectiveness of TPWD mitigation strategies in reducing the number of marine mammal interactions with survey gear, including gear modifications and best professional judgment and suggestions for changes to the mitigation strategies, if any;
(v) A summary of all relevant marine mammal training and any coordination with OPR and SERO.
(a) To incidentally take marine mammals pursuant to these regulations, SEFSC must apply for and obtain an LOA.
(b) An LOA, unless suspended or revoked, may be effective for a period of time not to exceed the expiration date of these regulations.
(c) In the event of projected changes to the activity or to mitigation and monitoring measures required by an LOA, TPWD must apply for and obtain a modification of the LOA as described in § 219.88.
(d) The LOA shall set forth:
(1) Permissible methods of incidental taking;
(2) Means of effecting the least practicable adverse impact (
(3) Requirements for monitoring and reporting.
(e) Issuance of the LOA shall be based on a determination that the level of taking will be consistent with the findings made for the total taking allowable under these regulations.
(f) Notice of issuance or denial of an LOA shall be published in the
(a) An LOA issued under §§ 216.106 of this chapter and 219.87 for the activity identified in § 219.81(a) shall be renewed or modified upon request by the applicant, provided that:
(1) The proposed specified activity and mitigation, monitoring, and reporting measures, as well as the anticipated impacts, are the same as those described and analyzed for these regulations (excluding changes made pursuant to the adaptive management provision in paragraph (c)(1) of this section); and
(2) OPR determines that the mitigation, monitoring, and reporting measures required by the previous LOA under these regulations were implemented;
(b) For an LOA modification or renewal requests by the applicant that include changes to the activity or the mitigation, monitoring, or reporting (excluding changes made pursuant to the adaptive management provision in paragraph (c)(1) of this section) that do not change the findings made for the regulations or result in no more than a minor change in the total estimated number of takes (or distribution by species or years), OPR may publish a notice of proposed LOA in the
(c) An LOA issued under §§ 216.106 of this chapter and 219.87 for the activity identified in § 219.71(a) may be modified by Office of Protected Resources (OPR) under the following circumstances:
(1)
(i) If, through adaptive management, the modifications to the mitigation, monitoring, or reporting measures are substantial, OPR will publish a notice of proposed LOA in the
(ii) [Reserved]
(2)