This action, pursuant to 5 U.S.C. 553, finalizes amendments to regulations issued to carry out a marketing order as defined in 7 CFR 900.2(j). This rule is issued under Marketing Order No. 959, as amended (7 CFR part 959), regulating the handling of onions grown in South Texas. Part 959 (referred to as the “Order”) is effective under the Agricultural Marketing Agreement Act of 1937, as amended (7 U.S.C. 601-674), hereinafter referred to as the “Act.” The Committee, which is responsible for the local administration of the Order, is comprised of onion producers and handlers operating within the area of production. The applicable rules of practice and procedure governing the formulation of Marketing Agreements and Orders (7 CFR part 900) authorize amendment of the Order through this informal rulemaking action.

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

This rule has been reviewed under Executive Order 12988, Civil Justice Reform. This rule is not intended to have retroactive effect. This rule shall not be deemed to preclude, preempt, or supersede any State program covering onions grown in South Texas.

The Act provides that administrative proceedings must be exhausted before parties may file suit in court. Under section 608c(15)(A) of the Act, any handler subject to an order may file with USDA a petition stating that the order, any provision of the order, or any obligation imposed in connection with the order is not in accordance with law and request a modification of the order or to be exempted therefrom. A handler is afforded the opportunity for a hearing on the petition. After the hearing, USDA would rule on the petition. The Act provides that the district court of the United States in any district in which the handler is an inhabitant, or has his or her principal place of business, has jurisdiction to review USDA's ruling on the petition, provided an action is filed no later than 20 days after the date of entry of the ruling.

Section 1504 of the Food, Conservation, and Energy Act of 2008 (2008 Farm Bill) (Pub. L. 110-246) amended section 8c(17) of the Act, which in turn required the addition of supplemental rules of practice to 7 CFR part 900 (73 FR 49307; August 21, 2008). The amendment of section 8c(17) of the Act and additional supplemental rules of practice authorize the use of informal rulemaking (5 U.S.C. 553) to amend Federal fruit, vegetable, and nut marketing agreements and orders. USDA may use informal rulemaking to amend marketing orders based on the nature and complexity of the proposed amendment, the potential regulatory and economic impacts on affected entities, and any other relevant matters.

The Agricultural Marketing Service (USDA-AMS) considered the nature and complexity of the proposed amendment, the potential regulatory and economic impacts on affected entities, and other relevant matters, and determined that amending the Order as proposed by the Committee could appropriately be accomplished through informal rulemaking.

The amendments were unanimously recommended by the Committee following deliberations at a public meeting held on June 7, 2017. This final rule will amend the Order by reducing the size of the Committee from 34 to 26 members. The change will remove one voting producer and one voting handler member, and one producer and one handler alternate member from each of the two districts. Conforming and clarifying changes will also be made to §§ 959.24, 959.26, 959.32, and §§ 959.110 and 959.111 will be removed and reserved.

A proposed rule and referendum order were issued on July 19, 2018 and published in the Federal Register on July 30, 2018 (83 FR 36479). That document also directed that a referendum among Texas onion growers be conducted August 6, 2018 through August 27, 2018 to determine whether they favored the proposals. To become effective, the amendment had to be approved by either two-thirds of the growers voting in the referendum or by those representing at least two-thirds of the volume of onions produced by those voting in the referendum. The amendment was favored by 100 percent of the growers voting and by 100 percent of the volume represented, the second of which exceeds the two-thirds volume requirement.

The amendment in this final rule reduces the size of the Committee from 34 to 26 members. The reduction will remove one voting producer and one voting handler member, and one producer and one handler alternate member from each of the two districts (eight members total). As a result, conforming changes need to be made to Order language regarding the definition of Districts, the selection of Committee nominees and Committee voting procedures. Additionally, two sections will be rendered obsolete and will be removed.

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

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

There are approximately 60 producers of onions in the production area and approximately 30 handlers subject to regulation under the marketing order. Small agricultural producers are defined by the Small Business Administration as those having annual receipts less than $750,000, and small agricultural service firms are defined as those whose annual receipts are less than $7,500,000 (13 CFR 121.201).

Based on information from the National Agricultural Statistics Service, the weighted grower price for South Texas onions during the 2015-16 season was approximately $12.30 per 50-pound equivalent. Furthermore, according to Committee data, total shipments were approximately three million 50-pound equivalents for the 2015-16 season with a total 2015-16 crop value estimated at $37 million. Dividing the crop value by the estimated number of producers (60) yields an estimated average receipt per producer of $617,000. This is below the $750,000 SBA definition of small producers. The average handler price for South Texas onions during the 2015-16 season was approximately $14.05 per 50-pound equivalent. Multiplying the average handler price by shipment information of 3 million 50-pound equivalent results in an estimated handler-level value of $42 million. Dividing this figure by the number of handlers (30) yields an estimated average annual handler receipts of $1.4 million, which is below the SBA definition of small agricultural service firms. Assuming a normal distribution, most producers and handlers of South Texas onions may be classified as small entities.

The Committee's proposed amendment to reduce the size of the Committee from 34 to 26 members under the Order by removing one voting producer and one voting handler member, and one producer and one handler alternate member, from each of the two districts was unanimously recommended at a meeting on June 7, 2017.

Over the past 15 years there has been a 31-percent decrease in the number of onion producers, and a 34-percent decrease in the number of handlers in the production area. Many seats on the Committee remain vacant, as it has been challenging to find sufficient nominees. Having a smaller size Committee will enable it to fulfill those membership and quorum requirements.

AMS believes this change will serve the needs of the Committee and the industry thereby ensuring a more efficient and orderly flow of business. No economic impact is expected because amendments would not establish any regulatory requirements on handlers, nor does it contain any assessment or funding implications. There will be no change in financial costs, reporting, or recordkeeping requirements because of this action.

Alternatives to this proposal, including making no changes at this time, were considered. However, the Committee believes that given reductions in the size of the industry, a smaller Committee size is necessary in order to ensure its ability to locally administer the program. Reducing the size of the Committee would enable it to fulfill membership and quorum requirements, thereby ensuring a more efficient and orderly flow of business.

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

This amendment will not impose any additional reporting or recordkeeping requirements on either small or large South Texas onion handlers.

As with all Federal marketing order programs, reports and forms are periodically reviewed to reduce information requirements and duplication by industry and public-sector agencies. In addition, USDA has not identified any relevant Federal rules that duplicate, overlap, or conflict with this rule.

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

The Committee's meeting was widely publicized throughout the South Texas onion production area. All interested persons were invited to attend the meeting and encouraged to participate in Committee deliberations on all issues. Like all Committee meetings, the June 7, 2017, meeting was public, and all entities, both large and small, were encouraged to express their views on the proposal.

A proposed rule concerning this action was published in the Federal Register on March 1, 2018 (83 FR 8804). Copies of the rule were mailed or sent via facsimile to all Committee members and South Texas onion handlers. The proposed rule was made available through the internet by USDA and the Office of the Federal Register. A 60-day comment period ending April 30, 2018, was provided to allow interested persons to respond to the proposal.

Although two comments were received, no changes were made to the proposed amendments.

A proposed rule and referendum order was then issued on July 19, 2018 and published in the Federal Register on July 30, 2018 (83 FR 36476). That document directed that a referendum among Texas growers be conducted during the period of August 6, 2018 through August 27, 2018 to determine whether they favored the proposed amendment to the Order. To become effective, the amendment had to be approved by at least two-thirds of the growers voting, or two-thirds of the volume of Texas onions represented by voters in the referendum. The amendment was favored by 100 percent of the growers voting and by 100 percent of the volume represented, the second of which exceeds the two-thirds volume requirement.

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

(a) Findings and Determinations Upon the Basis of the Rulemaking Record.

The findings hereinafter set forth are supplementary to the findings and determinations which were previously made in connection with the issuance of the Order; and all said previous findings and determinations are hereby ratified and affirmed, except insofar as such findings and determinations may be in conflict with the findings and determinations set forth herein.

1. The Order, as amended, and as hereby further amended, and all the terms and conditions thereof, will tend to effectuate the declared policy of the Act;

2. The Order, as amended, and as hereby further amended, regulates the handling of onions grown in South Texas in the same manner as, and is applicable only to, persons in the respective classes of commercial and industrial activity specified in the Order;

3. The Order, as amended, and as hereby further amended, is limited in application to the smallest regional production area which is practicable, consistent with carrying out the declared policy of the Act, and the issuance of several orders applicable to subdivisions of the production area would not effectively carry out the declared policy of the Act;

4. The Order, as amended, and as hereby further amended, prescribes, insofar as practicable, such different terms applicable to different parts of the production area as are necessary to give due recognition to the differences in the production and marketing of onions produced in the production area; and

5. All handling of onions produced or packed in the production area as defined in the Order is in the current of interstate or foreign commerce or directly burdens, obstructs, or affects such commerce.

(b) Determinations.

It is hereby determined that:

1. Handlers (excluding cooperative associations of producers who are not engaged in processing, distributing, or shipping of walnuts covered under the Order) who during the period August 1, 2016, through July 31, 2017, handled not less than 50 percent of the volume of such onions covered by said Order, as hereby amended, have not signed an amended marketing agreement; and

2. The issuance of this amendatory Order, amending the aforesaid Order, is favored or approved by producers representing at least two-thirds of the volume of onions produced by those voting in a referendum on the question of approval and who, during the period of August 1, 2016, through July 31, 2017, have been engaged within the production area in the production of such onions.

3. The issuance of this amendatory Order advances the interests of growers of onions in the production area pursuant to the declared policy of the Act.

It is therefore ordered, that on and after the effective date hereof, all handling of onions grown in South Texas shall be in conformity to, and in compliance with, the terms and conditions of the said Order as hereby proposed to be amended as follows:

The provisions amending the Order contained in the proposed rule issued by the Administrator on February 23, 2018 and published in the Federal Register (83 FR 8804) on March 1, 2018, will be and are the terms and provisions of this order amending the Order and are set forth in full herein.

For the reasons set forth in the preamble, 7 CFR part 959 is amended as follows:

Discussion

The European Aviation Safety Agency (EASA), which is the Technical Agent for the Member States of the European Union, has issued EASA AD 2018-0244, dated November 13, 2018; (referred to after this as the Mandatory Continuing Airworthiness Information, or “the MCAI”), to correct an unsafe condition for certain Airbus SAS Model A350-941 airplanes. The MCAI states:

Corrective actions include ensuring correct torque on all nuts and bolts, applying torque red line markings on affected nuts, and replacing any missing bolt. You may examine the MCAI in the AD docket on the internet at http://www.regulations.gov by searching for and locating Docket No. FAA-2019-0122.

Airbus has issued Service Bulletin A350-27-P022, Revision 00, dated June 6, 2018. This service information describes procedures for a one-time inspection of each junction of flap torque-shaft 2 and slat torque-shafts 2 and 4 for discrepancies (including missing torque marking on any nut, any untorqued nut, or any missing bolt). The service information also describes procedures for torqueing any affected nuts and bolts, applying torque red line markings on affected nuts, and replacing any missing bolts.

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 ADDRESSES section.

This product has been approved by the aviation authority of another country, and is approved for operation in the United States. Pursuant to our bilateral agreement with the State of Design Authority, we have been notified of the unsafe condition described in the MCAI and service information referenced above. We are issuing this AD because we evaluated all pertinent information and determined the unsafe condition exists and is likely to exist or develop on other products of the same type design.

This AD requires accomplishing the actions specified in the service information described previously.

An unsafe condition exists that requires the immediate adoption of this AD without providing an opportunity for public comments prior to adoption. The FAA has found that the risk to the flying public justifies waiving notice and comment prior to adoption of this rule because two or more missing or incorrectly torqued nuts on a junction of certain slat and flap shafts, concurrent failure of an alternate flap shaft, and consequent uncommanded slat or flap movement, could result in loss of control of the airplane. Therefore, we find good cause that notice and opportunity for prior public comment are impracticable. In addition, for the reasons stated above, we find that good cause exists for making this amendment effective in less than 30 days.

This AD is a final rule that involves requirements affecting flight safety, and we did not precede it by notice and opportunity for public comment. We invite you to send any written relevant data, views, or arguments about this AD. Send your comments to an address listed under the ADDRESSES section. Include “Docket No. FAA-2019-0122; Product Identifier 2018-NM-164-AD” at the beginning of your comments. We specifically invite comments on the overall regulatory, economic, environmental, and energy aspects of this AD. We will consider all comments received by the closing date and may amend this AD based on those comments.

We will post all comments we receive, without change, to http://www.regulations.gov, including any personal information you provide. We will also post a report summarizing each substantive verbal contact we receive about this AD.

We estimate that this AD affects 1 airplane 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.

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

For the reasons discussed 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.

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

Table of Contents I. Background A. The Federal Civil Penalties Inflation Adjustment Act Improvements Act of 2015 B. Calculation of Adjustments C. Effect of the Rule in Federal Program States and on Indian Lands D. Effect of the Rule on Approved State Programs II. Procedural Matters and Required Determinations A. Regulatory Planning and Review (Executive Orders 12866, 13563, and 13771) B. Regulatory Flexibility Act C. Small Business Regulatory Enforcement Fairness Act D. Unfunded Mandates Reform Act E. Takings (Executive Order 12630) F. Federalism (Executive Order 13132) G. Civil Justice Reform (Executive Order 12988) H. Consultation With Indian Tribes (Executive Order 13175 and Departmental Policy) I. Paperwork Reduction Act J. National Environmental Policy Act K. Effects on Energy Supply, Distribution, and Use (Executive Order 13211) L. Clarity of This Regulation M. Data Quality Act N. Administrative Procedure Act I. Background A. The Federal Civil Penalties Inflation Adjustment Act Improvements Act of 2015

Section 518 of SMCRA, 30 U.S.C. 1268, authorizes the Secretary of the Interior to assess civil monetary penalties (CMPs) for violations of SMCRA. The Office of Surface Mining Reclamation and Enforcement's (OSMRE) regulations implementing the CMP provisions of section 518 are located in 30 CFR parts 723, 724, 845, and 846. We are adjusting CMPs in four sections—30 CFR 723.14, 724.14, 845.14, and 846.14.

On November 2, 2015, the President signed the Federal Civil Penalties Inflation Adjustment Act Improvements Act of 2015 (Sec. 701 of Pub. L. 114-74) (2015 Act) into law. The 2015 Act, which further amended the Federal Civil Penalties Inflation Adjustment Act of 1990 (codified as amended at 28 U.S.C. 2461 note), requires Federal agencies to promulgate rules to adjust the level of CMPs to account for inflation. The 2015 Act required an initial “catch-up” adjustment. OSMRE published the initial adjustment in the Federal Register on July 8, 2016 (81 FR 44535), and the adjustment took effect on August 1, 2016. The 2015 Act also requires agencies to publish annual inflation adjustments in the Federal Register no later than January 15 of each year. These adjustments are aimed at maintaining the deterrent effect of civil penalties and furthering the policy goals of the statutes that authorize the penalties. Further, the 2015 Act provides that agencies must adjust civil monetary penalties “notwithstanding section 553 of [the Administrative Procedure Act].” Therefore, the public procedure that the Administrative Procedure Act generally requires for rulemaking—notice, an opportunity for comment, and a delay in the effective date—is not required for agencies to issue regulations implementing the annual CMP adjustments. See December 14, 2018, Memorandum for the Heads of Executive Departments and Agencies (M-19-04), from Mick Mulvaney, Director, Office of Management and Budget, Implementation of Penalty Inflation Adjustments for 2019, Pursuant to the Federal Civil Penalties Inflation Adjustment Act Improvements Act of 2015 (OMB Memorandum).

Pursuant to SMCRA and the 2015 Act, this final rule reflects the statutorily required CMP adjustments as follows:

In the chart above, there are no numbers listed in the “Points” column relative to 30 CFR 723.15(b), 30 CFR 724.14(b), 30 CFR 845.15(b), and 30 CFR 846.14(b) because those regulatory provisions do not set forth numbers of points. For those provisions, the current regulations only set forth the dollar amounts shown in the chart in the “Current Penalty Dollar Amounts” column; the adjusted amounts, which we are adopting in this rule, are shown in the “Adjusted Penalty Dollar Amounts” column.

OMB issued guidance on the 2019 annual adjustments for inflation. See OMB Memorandum (December 14, 2018). The OMB Memorandum notes that the 1990 Act defines “civil monetary penalty” as “any penalty, fine, or other sanction that . . . is for a specific monetary amount as provided by Federal law; or . . . has a maximum amount provided for by Federal law; and . . . is assessed or enforced by an agency pursuant to Federal law; and . . . is assessed or enforced pursuant to an administrative proceeding or a civil action in the Federal courts . . . .” It further instructs that agencies “are to adjust ‘the maximum civil monetary penalty or the range of minimum and maximum civil monetary penalties, as applicable, for each civil monetary penalty by the cost-of-living adjustment.' ” See December 14, 2018 OMB Memorandum. The 1990 Act and the OMB Memorandum specify that the annual inflation adjustments are based on the percent change between the Consumer Price Index for all Urban Consumers (the CPI-U) published by the Department of Labor for the month of October in the year of the previous adjustment, and the October CPI-U for the preceding year. The recent OMB Memorandum specified that the cost-of-living adjustment multiplier for 2019, not seasonally adjusted, is 1.02522 (the October 2018 CPI-U (252.885) divided by the October 2017 CPI-U (246.663) = 1.02522). OSMRE used this guidance to identify applicable CMPs and calculate the required inflation adjustments. The 1990 Act specifies that any resulting increases in CMPs must be rounded according to a stated rounding formula and that the increased CMPs apply only to violations that occur after the date the increase takes effect.

Generally, OSMRE assigns points to a violation as described in 30 CFR 723.13 and 845.13. The CMP owed is based on the number of points received, ranging from one point to 70 points. For example, under our existing regulations in 30 CFR 845.14, a violation totaling 70 points would amount to a $16,401 CMP. To adjust this amount, we multiply $16,401 by the 2019 inflation factor of 1.02522, resulting in a raw adjusted amount of $16,814.65. Because the 2015 Act requires us to round any increase in the CMP amount to the nearest dollar, in this case a violation of 70 points would amount to a new CMP of $16,815. Pursuant to the 2015 Act, the increases in this Final Rule apply to CMPs assessed after the date the increases take effect, even if the associated violation predates the applicable increase.

OSMRE directly regulates surface coal mining and reclamation operations within a State or on Tribal lands if the State or Tribe does not obtain its own approved program pursuant to sections 503 or 710(j) of SMCRA, 30 U.S.C. 1253 or 1300(j). The increases in CMPs contained in this rule will apply to the following Federal program States: Arizona, California, Georgia, Idaho, Massachusetts, Michigan, North Carolina, Oregon, Rhode Island, South Dakota, Tennessee, and Washington. The Federal programs for those States appear at 30 CFR parts 903, 905, 910, 912, 921, 922, 933, 937, 939, 941, 942, and 947, respectively. Under 30 CFR 750.18, the increase in CMPs also applies to Indian lands under the Federal program for Indian lands.

As a result of litigation, see In re Permanent Surface Mining Regulation Litigation, No. 79-1144, Mem. Op. (D.D.C. May 16, 1980), 19 Env't. Rep. Cas. (BNA) 1477, State regulatory programs are not required to mirror all of the penalty provisions of our regulations. Thus, this rule has no effect on CMPs in States with SMCRA primacy.

Executive Order 12866 provides that the Office of Information and Regulatory Affairs (OIRA) in the Office of Management and Budget will review all significant rules. OIRA has determined that agency regulations exclusively implementing the annual inflation adjustments are not significant, provided they are consistent with the OMB Memorandum.

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

Executive Order 13771 of January 30, 2017 directs Federal agencies to reduce the regulatory burden on regulated entities and control regulatory costs. Executive Order 13771, however, applies only to significant regulatory actions, as defined in Section 3(f) of Executive Order 12866. As mentioned above, OIRA has determined that agency regulations exclusively implementing the annual adjustment are not significant regulatory actions under Executive Order 12866, provided they are consistent with the OMB Memorandum ( see OMB Memorandum, M-19-04, at 3). Thus, Executive Order 13771 does not apply to this rulemaking.

The Regulatory Flexibility Act (RFA) requires an agency to prepare a regulatory flexibility analysis for all rules unless the agency certifies that the rule will not have a significant economic impact on a substantial number of small entities. The RFA applies only to rules for which an agency is required to first publish a proposed rule. See 5 U.S.C. 603(a) and 604(a). The Federal Civil Penalties Inflation Adjustment Act Improvements Act of 2015 requires agencies to adjust civil penalties annually for inflation “notwithstanding section 553 [of the Administrative Procedure Act].” Thus, no proposed rule will be published, and the RFA does not apply to this rulemaking.

This rule is not a major rule under 5 U.S.C. 804(2), the Small Business Regulatory Enforcement Fairness Act. This rule:

(a) Will not have an annual effect on the economy of $100 million or more.

(b) Will not cause a major increase in costs or prices for consumers, individual industries, Federal, State, or local government agencies, or geographic regions.

(c) Will not have significant adverse effects on competition, employment, investment, productivity, innovation, or the ability of United States-based enterprises to compete with foreign-based enterprises.

This rule does not impose an unfunded mandate on State, local, or Tribal governments, or the private sector, of more than $100 million per year. The rule does not have a significant or unique effect on State, local, or Tribal governments or the private sector. A statement containing the information required by the Unfunded Mandates Reform Act (2 U.S.C. 1531 et seq. ) is not required.

This rule does not effect a taking of private property or otherwise have takings implications under Executive Order 12630. A takings implication assessment is not required.

Under the criteria in section 1 of Executive Order 13132, this rule does not have sufficient federalism implications to warrant the preparation of a federalism summary impact statement. A federalism summary impact statement is not required.

This rule complies with the requirements of Executive Order 12988. Specifically, this rule:

(a) Meets the criteria of section 3(a) requiring that all regulations be reviewed to eliminate errors and ambiguity and be written to minimize litigation; and

(b) Meets the criteria of section 3(b)(2) requiring that all regulations be written in clear language and contain clear legal standards.

The Department of the Interior strives to strengthen its government-to-government relationship with Tribes through a commitment to consultation with Tribes and recognition of their right to self-governance and Tribal sovereignty. We have evaluated this rule under the Department's consultation policy, under Departmental Manual Part 512, Chapters 4 and 5, and under the criteria in Executive Order 13175 and have determined that it has no substantial direct effects on Federally-recognized Tribes or Alaska Native Claims Settlement Act (ANCSA) Corporations, and that consultation under the Department's Tribal consultation policy is not required.

This rule does not contain information collection requirements, and a submission to the Office of Management and Budget under the Paperwork Reduction Act (44 U.S.C. 3501 et seq. ) is not required. We may not conduct or sponsor, and you are not required to respond to, a collection of information unless it displays a currently valid OMB control number.

This rule does not constitute a major Federal action significantly affecting the quality of the human environment. A detailed statement under the National Environmental Policy Act of 1969 (NEPA) is not required because the rule is covered by a categorical exclusion. This rule is excluded from the requirement to prepare a detailed statement because it is a regulation of an administrative nature. (For further information see 43 CFR 46.210(i).) We have also determined that the rule does not involve any of the extraordinary circumstances listed in 43 CFR 46.215 that would require further analysis under NEPA.

This rule is not a significant energy action under the definition in Executive Order 13211. A Statement of Energy Effects is not required.

We are required by Executive Orders 12866 (section 1(b)(12)), 12988 (section 3(b)(1)(B)), and 13563 (section 1(a)), and by the Presidential Memorandum of June 1, 1998, to write all rules in plain language. This means that each rule we publish must:

If you believe that we have not met these requirements in issuing this final rule, please contact the individual listed in the FOR FURTHER INFORMATION CONTACT section. Your comments should be as specific as possible in order to help us determine whether any future revisions to the rule are necessary. For example, you should tell us the numbers of the sections or paragraphs that you find unclear, which sections or sentences are too long, the sections where you feel lists or tables would be useful, etc.

In developing this rule, we did not conduct or use a study, experiment, or survey requiring peer review under the Data Quality Act (Pub. L. 106-554).

We are issuing this final rule without prior public notice or opportunity for public comment. As discussed above, the Federal Civil Penalties Inflation Adjustment Act Improvements Act of 2015 requires agencies to publish adjusted penalties annually. Under the 2015 Act, the public procedure that the Administrative Procedure Act generally requires—notice, an opportunity for comment, and a delay in the effective date—is not required for agencies to issue regulations implementing the annual adjustments required by the 2015 Act. See OMB Memorandum, M-19-04, at 4.

For the reasons given in the preamble, the Department of the Interior amends 30 CFR parts 723, 724, 845, and 846 as set forth below.

The vessel YP-702, a 108-foot-long vessel with a wooden hull and aluminum superstructure, took on water and sank while anchored outside the channel in the Patuxent River at Patuxent River, MD. The vessel is presently lying in a sunken condition resting on the river bottom in 12 to 15 feet of water in approximate position latitude 38°18′03.96″ N, longitude 076°27′39.90″ W. Salvage operations will be taking place on March 24, 2019, with alternate dates of March 25, 2019, or March 26, 2019.

The Coast Guard is issuing this temporary rule without prior notice and opportunity to comment pursuant to authority under section 4(a) of the Administrative Procedure Act (APA) (5 U.S.C. 553(b)). This provision authorizes an agency to issue a rule without prior notice and opportunity to comment when the agency for good cause finds that those procedures are “impracticable, unnecessary, or contrary to the public interest.” Under 5 U.S.C. 553(b)(B), the Coast Guard finds that good cause exists for not publishing a notice of proposed rulemaking (NPRM) with respect to this rule because to do so would be impracticable and contrary to the public interest. Waiting to return the waterway to conditions that accommodate the safe, full resumption of boating and fishing in the immediate area is contrary to the public interest. It is impracticable to publish an NPRM because recovery assets will be on scene on or about March 24, 2019, and the safety zone needs to be in place at that time to protect vessels and persons in the vicinity of vessel salvage operations.

Under 5 U.S.C. 553(d)(3), the Coast Guard finds that good cause exists for making this rule effective less than 30 days after publication in the Federal Register . Delaying the effective date of this rule would be impracticable and contrary to the public interest. Immediate action is needed to protect vessels, equipment and persons conducting diving and salvage operations of the vessel YP-702, as well as vessels transiting nearby, from the potential hazards associated with these operations.

The Coast Guard is issuing this rule under authority in 46 U.S.C. 70034. The Captain of the Port Maryland-National Capital Region (COTP) has determined that potential hazards associated with salvage operations will be a safety concern for anyone within 100 yards of the vessel YP-702 salvage operations. This rule is needed to protect personnel, vessels, equipment, and the marine environment in the navigable waters within the safety zone while the sunken vessel is being removed.

This rule establishes a safety zone to be enforced from 9 a.m. to 4 p.m. on March 24, 2019, or if necessary due to inclement weather, those same hours on either March 25, 2019, or March 26, 2019. The safety zone covers all navigable waters of the Patuxent River within 100 yards of the vessel YP-702 in approximate position latitude 38°18′03.96″ N, longitude 076°27′39.90″ W, located at Patuxent River, MD. The duration and enforcement of the zone is intended to protect personnel, vessels, equipment, and the marine environment in these navigable waters while the sunken vessel is being removed. No vessel or person will be permitted to enter the safety zone without obtaining permission from the COTP or a designated representative.

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

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

This regulatory action determination is based on the size, location, and time-of-year of the safety zone. Vessel traffic will be able to safely transit around this safety zone which would impact a small designated area of the Patuxent River for 7 total enforcement hours, during the month of March when vessel traffic in the Patuxent River is normally low. Moreover, the Coast Guard will issue a Broadcast Notice to Mariners via VHF-FM marine channel 16 about the zone.

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

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

Under section 213(a) of the Small Business Regulatory Enforcement Fairness Act of 1996 (Pub. L. 104-121), we want to assist small entities in understanding this rule. If the rule would affect your small business, organization, or governmental jurisdiction and you have questions concerning its provisions or options for compliance, please contact the person listed in the FOR FURTHER INFORMATION CONTACT section.

Small businesses may send comments on the actions of Federal employees who enforce, or otherwise determine compliance with, Federal regulations to the Small Business and Agriculture Regulatory Enforcement Ombudsman and the Regional Small Business Regulatory Fairness Boards. The Ombudsman evaluates these actions annually and rates each agency's responsiveness to small business. If you wish to comment on actions by employees of the Coast Guard, call 1-888-REG-FAIR (1-888-734-3247). The Coast Guard will not retaliate against small entities that question or complain about this rule or any policy or action of the Coast Guard.

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

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

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

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

We have analyzed this rule under Department of Homeland Security Directive 023-01 and Commandant Instruction M16475.1D, which guide the Coast Guard in complying with the National Environmental Policy Act of 1969(42 U.S.C. 4321-4370f), and have determined that this action is one of a category of actions that do not individually or cumulatively have a significant effect on the human environment. This rule involves a safety zone to be enforced for only seven hours during the vessel YP-702 salvage operations that will prohibit entry within 100 yards of vessels and equipment being used by personnel to remove the sunken vessel. It is categorically excluded from further review under paragraph L60(a) of Appendix A, Table 1 of DHS Instruction Manual 023-01-001-01, Rev. 01. A Record of Environmental Consideration supporting this determination is available in the docket where indicated under ADDRESSES .

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

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

I. Background

On October 16, 2018, the Copyright Office issued an interim rule with request for comments regarding certain filings necessitated by title II of the MMA, the Classics Protection and Access Act (the “Act”). 1 As explained in the interim rule, the Act created chapter 14 of the copyright law, title 17, United States Code, which, among other things, extends remedies for copyright infringement to owners of sound recordings fixed before February 15, 1972 (“Pre-1972 Sound Recordings”). Under the provision, rights owners may be eligible to recover statutory damages and/or attorneys' fees for the unauthorized use of their Pre-1972 Sound Recordings if certain requirements are met.

Specifically, to be eligible for these remedies, rights owners must typically file schedules listing their Pre-1972 Sound Recordings (“Pre-1972 Schedules”) with the Copyright Office, which are then indexed into the Office's public records. 2 The remedies are only available for unauthorized uses of a sound recording that have occurred more than 90 days after indexing. 3 Pre-1972 Schedules must include the name of the rights owner, title, and featured artist for each recording listed, and “such other information, as practicable, that the Register of Copyrights prescribes by regulation.”  4 The filing requirement “is designed to operate in place of a formal registration requirement that normally applies to claims involving statutory damages.”  5 In addition, the Pre-1972 Schedules are important to the Act's new exemption for noncommercial uses of Pre-1972 Sound Recordings that are not being commercially exploited. 6 Under that provision, persons seeking to use the exemption are exempt from liability for unauthorized use if they make a “good faith, reasonable search for” a given sound recording in the Office's records of Pre-1972 Schedules before determining that the recording is not being commercially exploited. 7 In establishing a filing mechanism for Pre-1972 Schedules, the Office must also provide a means for individuals to request and receive timely notification when such filings are indexed into the Office's public record. 8

Under the Act, rights owners must also provide specific notice of unauthorized use to certain entities that were previously transmitting Pre-1972 Sound Recordings before pursuing certain remedies against them. To be entitled to receive direct notice of unauthorized activity from a rights owner, an entity must have been publicly performing a Pre-1972 Sound Recording by means of digital audio transmission at the time of enactment of section 1401 and must file its contact information with the Copyright Office within 180 days of enactment, that is, by April 9, 2019. 9 Where a valid notice of contact information has been filed, the rights owner may be eligible to obtain statutory damages and/or attorneys' fees only after directly sending the transmitting entity a notice stating that it is not legally authorized to use the Pre-1972 Sound Recording, and identifying the Pre-1972 Sound Recording in a schedule conforming to the requirements by the Office for filing Pre-1972 Schedules. 10 For any eligible transmitting entities that do not file contact information by April 9, 2019, rights owners may seek statutory damages and/or attorneys' fees resulting from unauthorized uses by those entities after filing Pre-1972 Schedules as described above. 11

The interim rule established regulations governing each of these new filing mechanisms: The filing of Pre-1972 Schedules by rights owners, the filing of contact information by entities publicly performing these sound recordings by means of digital audio transmission, and specifying how individuals may request timely notification of the filing of Pre-1972 Schedules with the Office. 12 In response to its request for public comment, the Office received one joint comment from the American Association of Independent Music (“A2IM”), Recording Industry Association of America, Inc. (“RIAA”), and SoundExchange, Inc. 13 Having reviewed and carefully considered this comment, the Office is now adopting the interim rule as final, with a few adjustments as described below.

Under the interim rule, rights owners desiring to file Pre-1972 Schedules with the Office must use a form provided on the Office's website, 14 which is an Excel spreadsheet template. This format allows the Office to timely ingest the Pre-1972 Schedules and index them into an online searchable database available to prospective users, including persons who may otherwise wish to make noncommercial uses of these works, and the general public. 15

Currently, for each sound recording, the Pre-1972 Schedule must include the rights owner's name, sound recording title, and featured artist. 16 Rights owners may also include additional optional information pursuant to the instructions on the form and the Office's website, namely, album title information, alternate sound recording title(s), publication date, label, and rights owner's contact information. 17 In their joint comments, A2IM, RIAA, and SoundExchange request that the following fields be added to the Office's Pre-1972 Schedule form: International Standard Recording Code (“ISRC”), sound recording version, and alternate artist name. 18 They also ask the Office to group the three required fields together from left to right on the form, followed by the optional fields to the right. 19

These suggestions have been adopted by the final rule. The Office agrees that including the ISRC will help to distinguish between different Pre-1972 Sound Recordings by the same artist with the same title, including with respect to the new exemption for noncommercial uses of Pre-1972 Sound Recordings that are not being commercially exploited. 20 Accordingly, the final rule requires the ISRC to be included for each recording listed in a Pre-1972 Schedule, if known by the filer and practicable to include. Similarly, the final rule permits versions and alternate artist names to be provided on an optional basis. 21 While the final rule otherwise retains the required and optional fields from the interim rule, the Office has revised its Pre-1972 Schedule form so that the fields for rights owner's name, the sound recording title, and the featured artist are grouped together from left to right, followed on the right by the ISRC and the optional fields.

As noted by the Office in its rulemaking regarding the noncommercial use exception to unauthorized uses of Pre-1972 Sound Recordings, classical music sound recordings frequently require more information to sufficiently identify the sound recording. 22 The final rule adopts a definition of “title” and “featured artist(s)” for pre-1972 sound recordings of classical music, including opera, as recently proposed in the noncommercial use exception rulemaking. 23 Because the Office is proposing that users search the database of Pre-1972 Schedules using specialized terms for this genre to locate these recordings, this rule harmonizes the terms that rights owners are asked to list on the schedules. To the extent that the rule adopted through the noncommercial use rulemaking adjusts this definition, the Office may further reconcile this language.

Regarding the name of the rights owner, A2IM, RIAA, and SoundExchange note that “there has been considerable consolidation in the recorded music business” and that because many Pre-1972 Sound Recordings were originally released on labels no longer in existence, the rights to these sound recordings “are sometimes exercised by a label in existence today in its own name on behalf of the original owner.”  24 They ask that the Office “borrow” from the language in 17 U.S.C. 1401(c)(6)(B)(i) and for each Pre-1972 Sound Recording listed in a Pre-1972 Schedule, allow “a person `authorized to act on behalf of the rights owner' ” to be listed instead of the rights owner's name. 25

Because chapter 14 expressly requires that the Pre-1972 Schedule filed with the Office include the “rights owner of the sound recording,”  26 the Office declines to make this adjustment. Section 1401(c)(6)(B)(i), which concerns civil penalties for persons fraudulently filing opt-out notices for noncommercial uses, necessarily relates to the person filing the opt-out notices, rather than the requirement to identify a particular rights owner. 27 The legislative history also indicates that the Office's database should reflect “works by copyright owners.”  28 The final rule does clarify, however, that an authorized agent of a rights owner may submit the filing on behalf of the rights owner.

A2IM, RIAA, and SoundExchange also assert that the Office's database of Pre-1972 Schedules should allow for “robust search[ing],” including “fuzzy searching” ( e.g., search results yield results for common misspellings) and “wildcard searching” ( i.e., allowing a user to search on a truncated version of a word with a wildcard character, such as an asterisk). 29 The database of Pre-1972 Schedules already allows for wildcard searching by using an asterisk to fill in partial words. The Office has updated the search instructions on its database web page so users are aware of this search capability. While the current technology does not permit “fuzzy” searching, that limitation is also noted on the web page to guide user expectations. The following fields in the Office's database of Pre-1972 Schedules are now searchable: Rights owner, sound recording title (which includes alternate titles), album, label, featured artist (which includes alternate artist name(s)), and ISRC. A user can export and download the search results based on those fields into an Excel spreadsheet to view (and search) additional data.

The interim rule did not create a mechanism for rights owners to correct limited mistakes or supplement information regarding sound recordings included in Pre-1972 Schedules indexed into the Office's public record. Instead, the Office invited public comment on whether and how to provide a mechanism for the correction of mistakes or for supplementing information in Pre-1972 Schedules, including the potential effect on a Schedule's index date and how to keep administrative costs low. 30

In response, A2IM, RIAA, and SoundExchange maintain that the Office should allow rights owners (or their authorized agents) to correct limited mistakes, as well as supplement information included in already-filed Pre-1972 Schedules, without affecting a schedule's index date. 31 They note that limited mistakes may occur where Pre-1972 Schedules list thousands of sound recordings, and that allowing supplementation will benefit users of the Office's database of Pre-1972 Schedules—“particularly those performing good faith, reasonable searches in connection with the potential noncommercial use of a pre-72 recording” under section 1401(c)—“because users will be able to search a greater number of fields and use a wider array of search terms, thus increasing the likelihood of finding a match if one exists.”  32 They suggest that rights owners should be allowed to file Pre-1972 Schedules with the required fields to secure an index date, and supplement information for those Pre-1972 Sound Recordings at a later date. 33 They propose having “a secure web portal” that allows rights owners to supplement information and correct mistakes relating to their Pre-1972 Sound Recordings. 34

Considering these concerns in light of the purpose of the Pre-1972 Schedules, which operates “in place of a formal registration requirement” for rights owners and also must be searched by users before claiming the noncommercial use exception for these recordings, 35 the final rule adopts a provision allowing a rights owner (or her authorized agent) to correct or amplify information regarding a Pre-1972 Sound Recording where that sound recording was included in a Pre-1972 Schedule previously filed by or on behalf of that same rights owner. The rule will operate in a similar, but not identical, manner, to other filings accepted by the Office to correct or amplify previous filings, including supplementary registrations. 36 Information regarding a Pre-1972 Sound Recording may be corrected if the information was incorrect at the time the Pre-1972 Schedule was submitted to the Office, or supplemented to include information that was omitted at the time the Pre-1972 Schedule was submitted to the Office.

The rule provides that the operative index date for a given Pre-1972 Recording will change only in the event that information in one of the statutorily required fields (title, featured artist(s), and rights owner) is amended or amplified. As noted by A2IM, RIAA, and SoundExchange, the index date of a Pre-1972 Schedule is of “critical importance to rights owners, as it starts the running of a 90-day clock after which the listed sound recordings become eligible for statutory damages and attorneys' fees.”  37 To encourage rights owners to supplement optional information regarding their Pre-1972 Sound Recordings, the final rule permits amending or supplementing information for an optional field or ISRC without losing the index date for the relevant Pre-1972 Sound Recording. But because the schedules serve a notice function for prospective licensees and other users of these recordings, the Office concludes that a new index date should attach when information in one of the three statutorily required fields changes, such that the earlier-filed schedule no longer provides the same notice as to those fields.

To ensure transparency, as currently designed, links to filed Pre-1972 Schedules and Supplemental Pre-1972 Schedules (showing their respective index dates) will be provided through the Office's database under the “More Info” tab for the relevant Pre-1972 Sound Recording. Due to technological constraints in the current database, the “Index Date” field displayed on the Copyright Office's website for a given Pre-1972 Sound Recording will reflect the index date of the latest-filed schedule (which may not govern eligibility for statutory damages if it only amends or supplements information for an optional field). Accordingly, users are cautioned to review the “More Info” tab or download information into an Excel spreadsheet for a given Pre-1972 Sound Recording to determine whether more than one schedule has been filed, which may or may not affect the operative index date. 38

Rights owners (or their authorized agents) will be required to file a Supplemental Schedule of Pre-1972 Sound Recordings using a form and instructions specified on the Office's website. At present, the form is an Excel spreadsheet template. This format is required so that the Office can timely ingest Supplemental Pre-1972 Schedules and index them into the Office's database of Pre-1972 Schedules. 39 For each Pre-1972 Sound Recording for which the rights owner desires to correct or supplement information, the Supplemental Pre-1972 Schedule must include the Copyright Office's unique identifier assigned to that sound recording in the Office's database. 40 Because the data on the Supplemental Pre-1972 Schedule will overwrite the preexisting data displayed and searchable in the Office's database, for each sound recording, the Supplemental Pre-1972 Schedule must include the rights owner's name, sound recording title, featured artist(s), and, if known and practicable, ISRC (inclusive of any corrections or amendments to such information). The Supplemental Pre-1972 Schedule must also include all optional information the rights owner would like to provide to the Copyright Office (including information already provided to the Office on a previously filed Pre-1972 Schedule for that sound recording), inclusive of any corrections or amendments to such information.

Finally, A2IM, RIAA, and SoundExchange request the ability to remove errantly listed recordings, without affecting the index date of the other recordings included on a Pre-1972 Schedule. 41 The final rule will allow a rights owner (or her authorized agent) to remove a Pre-1972 Sound Recording from the Office's database of Pre-1972 Schedules where the sound recording was included in a Pre-1972 Schedule filed by or on behalf of that same rights owner, without affecting the index date of the other recordings included on the schedule. A recording may be removed if there was a substantive defect in the Pre-1972 Schedule regarding the Pre-1972 Sound Recording at the time the Pre-1972 Schedule was submitted to the Office, or, upon a showing of good cause, at the discretion of the Copyright Office. Similar to the Office's process for voluntary cancellation of a copyright registration, 42 a rights owner (or her authorized agent) will be required to file a Removal Form, using a form and instructions specified on the Office's website. As currently envisioned, a Removal Form may not include more than one Pre-1972 Sound Recording to be deleted, and must include the sound recording title, featured artist(s), and the Copyright Office's unique identifier assigned to that sound recording in the Office's database. The Office will keep a record of Pre-1972 Sound Recordings removed from the Office's database, and a timestamp of when each deletion occurs. Once removed, the sound recording is no longer considered “indexed” for purposes of eligibility to recover statutory damages and/or attorneys' fees for the unauthorized use of that sound recording, or included in the Office's database to preclude a user from taking advantage of the noncommercial use exception. 43 The rights owner (or her agent) would need to file a new Pre-1972 Schedule containing the sound recording to become eligible to recover statutory damages and/or attorneys' fees, or to preclude a user from taking advantage of the noncommercial use exception regarding that sound recording.

A2IM, RIAA, and SoundExchange request the ability to pay filing fees for Pre-1972 Schedules by credit card, check, money order, or bank draft, instead of by deposit account, as instructed on the Office's website. 44 In consideration of such comments, the Office will allow filers to pay filing fees for Pre-1972 Schedules, Supplemental Pre-1972 Schedules, and Removal Forms using either a credit card or a deposit account with the Office. So that schedules may be submitted to the Office electronically, a rights owner currently submits her Pre-1972 Schedule via email, along with a cover sheet providing her deposit account information to pay the filing fee. Under the final rule, if a filer wishes to pay using a credit card, instead of providing the deposit account information on the cover sheet, she should indicate her desire to pay by credit card on the cover sheet. The same process will be available for filers wishing to pay using a credit card to file Removal Forms. For privacy and security reasons, the filer should not provide credit card information on the cover sheet or Removal Form. Rather, the Office will call the filer for the credit card information. Because the processing of Pre-1972 Schedules, Supplemental Pre-1972 Schedules, and Removal Forms will not occur until after the Office has obtained credit card information from the filer, filers are urged to provide accurate contact information on the cover sheet or Removal Form and to respond to the Office in a timely manner.

Because the Office anticipates that the processing and indexing of Supplemental Pre-1972 Schedules will be similar to originating Pre-1972 Schedules, it is setting the fee for supplemental filings at the same amount. Similarly, because the Office anticipates that processing a Removal Form will be similar to the processing of a Pre-1972 Schedule including a single sound recording, it is setting the fee to file a Removal Form at the same amount. In line with its general approach to fee-setting, the Office will consider whether adjustment is necessary after data regarding these filings are available.

As a technical change, the final rule also clarifies that the fee charged for Pre-1972 Schedules and Supplemental Pre-1972 Schedules is per sound recording, not per title, since the Copyright Office is encouraging rights owners to list alternate titles of recordings on schedules to improve the public record.

The final rule retains the language of the interim rule providing that, if ownership of a Pre-1972 Sound Recording changes after its inclusion in a Pre-1972 Schedule filed with the Office, the Office will consider the schedule to be effective as to any successor in interest. 45 Accordingly, a successor in interest may, but is not required, to file a new schedule.

The Office invited public comment on whether it should record transfers of rights ownership and other documents pertaining to a Pre-1972 Sound Recording, even though they are not transfers of copyright ownership or documents pertaining to a copyright under 17 U.S.C. 205. 46 A2IM, RIAA, and SoundExchange responded that the Office should accept for recordation transfer documents and other documents pertaining to Pre-1972 Sound Recordings, contending that accepting such voluntarily-submitted information would serve a public notice function. 47

The Office concludes that it may record transfers of ownership pertaining to Pre-1972 Sound Recordings through its established recordation processes. 48 Section 1401(h)(1) provides that certain provisions relating to the transfers of copyright ownership set forth in sections 201 and 204 (including requirements for execution of transfers) of the Copyright Act “shall apply to a transfer” by a pre-1972 rights owner “to the same extent as with respect to a transfer of copyright ownership.”  49 In turn, section 205 authorizes the Copyright Office to record “transfer[s] of copyright ownership” under certain conditions, and the effective recordation of these documents provides constructive notice of the facts stated in the recorded document. 50 The Office has previously concluded that “any transfer that is valid under section 204 should be recordable under section 205.”  51 The Office concludes that it is prudent and sound for it to similarly accept transfers of ownership pertaining to Pre-1972 Sound Recordings for voluntary recordation into the Office's public database pursuant to the general recordation requirements set forth in 37 CFR 201.4. 52 That said, because registration is not available for U.S. Pre-1972 Sound Recordings (instead, the Pre-1972 Schedules operate in lieu of a registration requirement), it is unclear whether recordation can provide the same statutory benefits of constructive notice and priority between conflicting transfers under section 205. 53

Accordingly, the final rule mimics other Office regulations applying the Office's general recordation rules to certain types of documents that do not actually pertain to copyrighted works, namely, those concerning mask works under chapter 9 and vessel designs under chapter 13. 54 Because chapter 14 does not incorporate sections 203 or 304(c) or (d), this rule does not permit recordation of notices of termination of transfers and licenses pursuant to those sections and 37 CFR 201.10.

Finally, A2IM, RIAA, and SoundExchange request, if practicable, that transfers of rights ownership and other documents be cross-referenced against an earlier-filed Pre-1972 Schedule to maximize the benefit of recordation. 55 While the Office supports the goal of facilitating improved chain-of-title information for these documents, as well as recorded documents more generally, 56 its current technology does not permit linking recorded documents with its database of Pre-1972 Schedules. Meanwhile, the Office will provide notice in connection with its database of Pre-1972 Schedules that information pertaining to subsequent changes in ownership may be found in its public catalog; as noted, the Office will also accept additional schedules from successors-in-interest. 57

Under the interim rule, transmitting entities may currently file a Notice of Contact Information with the Office using a pay.gov form and following instructions specified on the Office's website. 58 A2IM, RIAA, and SoundExchange requested that individuals should “be permitted to receive timely notification of such filings by subscribing to a weekly email notification service,” similar to the email notification service instituted by the Office regarding recently-indexed Pre-1972 Schedules. 59 The MMA, however, specifically requires a notification mechanism for indexed Pre-1972 Schedules  60 ; there is no similar requirement relating to Notices of Contact Information. Moreover, because the Office may not accept Notices of Contact Information after April 9, 2019, 61 establishing a notification service that would be operational for only a short period would not be an efficient use of resources. 62 The Office's online searchable directory currently allows searching by the name of a transmitting entity (and any alternate names), which should provide an easy way to determine whether a transmitting entity has filed a Notice of Contact Information.

In sum, apart from clarifying that the date of filing of a Notice of Contact Information (like Pre-1972 Schedules) is the date when a proper submission, including the prescribed fee, is received in the Copyright Office, the final rule otherwise adopts in full the interim regulations governing Notices of Contact Information.

For the reasons set forth above, the interim rule amending 37 CFR part 201, which was published in the Federal Register at 83 FR 52150, on October 16, 2018, is adopted as final with the following changes:

On October 11, 2018, the president signed into law the Orrin G. Hatch-Bob Goodlatte Music Modernization Act (“MMA”) which, among other things, substantially modified the compulsory “mechanical” license for making and distributing phonorecords of nondramatic musical works available under 17 U.S.C. 115. 1 On December 7, 2018, the Copyright Office published in the Federal Register an interim rule amending the Office's section 115-related regulations to harmonize them with the MMA's requirements, and to make other minor technical updates. 2 The amendments largely concerned statements of account and notices of intention to obtain a compulsory license. The Office did not receive any comments from the public in response to the interim rule. As a result, the Office is adopting the amendments promulgated through the interim rule as final without change.

In addition to adopting the interim rule as final, the final rule makes further technical changes to update cross-references to regulations that were recently amended by the Copyright Royalty Judges (“CRJs”). On February 5, 2019, the CRJs published in the Federal Register a final determination in In re Determination of Royalty Rates and Terms for Making and Distributing Phonorecords (Phonorecords III), Docket No. 16-CRB-0003-PR (2018-2022). 3 The CRJs' final determination amended 37 CFR part 385, which contains regulations setting forth the rates and terms of royalty payments for use of the section 115 license. The CRJs' changes have rendered obsolete some of the cross-references to part 385 contained in the Copyright Office's regulations governing statements of account under the section 115 license, and the final rule updates the relevant cross-references.

Because the updates are technical and non-substantive changes that do not “alter the rights or interests of parties,” they are not subject to the notice and comment requirements of the Administrative Procedure Act. 4 Furthermore, the Office finds good cause that providing notice and comment is “impracticable” and “contrary to the public interest” in this instance because the CRJs' new regulations are already effective, and delaying removal of the obsolete cross-references in the Office's regulations may cause confusion among those parties required to serve statements of account under the compulsory license. 5 For these same reasons, the Office finds it appropriate to make the final rule effective upon publication. 6

For the reasons set forth above, the Copyright Office adopts the interim rule amending 37 CFR parts 201, 203, and 210 which was published at 83 FR 63061 on December 7, 2018, as final with the following changes:

I. Background

Each state has a SIP containing the control measures and strategies used to attain and maintain the national ambient air quality standards (NAAQS). The SIP is extensive, containing such elements as air pollution control regulations, emission inventories, monitoring networks, attainment demonstrations, and enforcement mechanisms.

Each state must formally adopt the control measures and strategies in the SIP after the public has had an opportunity to comment on them and then submit the proposed SIP revisions to EPA. Once these control measures and strategies are approved by EPA, and after notice and comment, they are incorporated into the federally-approved SIP and are identified in part 52—“Approval and Promulgation of Implementation Plans,” title 40 of the Code of Federal Regulations (40 CFR part 52). The full text of the state regulation approved by EPA is not reproduced in its entirety in 40 CFR part 52, but is “incorporated by reference.” This means that EPA has approved a given state regulation or specified changes to the given regulation with a specific effective date. The public is referred to the location of the full text version should they want to know which measures are contained in a given SIP. The information provided allows EPA and the public to monitor the extent to which a state implements a SIP to attain and maintain the NAAQS and to take enforcement action for violations of the SIP.

The SIP is a living document which the state can revise as necessary to address the unique air pollution problems in the state. Therefore, EPA from time to time must take action on proposed revisions containing new and/or revised state regulations. A submission from a state can revise one or more rules in their entirety or portions of rules, or even change a single word. The state indicates the changes in the submission (such as, by using redline/strikethrough) and EPA then takes action on the requested changes. EPA establishes a docket for its actions using a unique Docket Identification Number, which is listed in each action. These dockets and the complete submission are available for viewing on www.regulations.gov.

On May 22, 1997 (62 FR 27968), EPA revised the procedures for incorporating by reference, into the Code of Federal Regulations, materials approved by EPA into each SIP. These changes revised the format for the identification of the SIP in 40 CFR part 52, streamlined the mechanisms for announcing EPA approval of revisions to a SIP, and streamlined the mechanisms for EPA's updating of the IBR information contained for each SIP in 40 CFR part 52. The revised procedures also called for EPA to maintain “SIP Compilations” that contain the federally-approved regulations and source specific permits submitted by each state agency.

These SIP Compilations are updated primarily on an annual basis. Under the revised procedures, EPA must periodically publish an informational document in the rules section of the Federal Register notifying the public that updates have been made to a SIP Compilation for a particular state. EPA applied the 1997 revised procedures to South Carolina on July 1, 1997 (62 FR 35441).

This action represents EPA's publication of the South Carolina SIP Compilation update, appearing in 40 CFR part 52: specifically, the materials in paragraphs (c) and (d) at 40 CFR 52.2120. In addition, notice is provided of the following corrections to paragraph (c) of § 52.2120, as described below.

A. Revising the heading of paragraph (c) to read “EPA-Approved regulations” and the heading of the table in paragraph (c) to read “EPA-Approved South Carolina Regulations.”

B. Correcting Federal Register citations and entries listed in § 52.2120(c), as described below:

1. Under Regulation No. 62.1, entries for the state effective date and EPA approval date were removed because the entry represents only the title of the Regulation, while the Sections under the heading of the Regulation include specific approval information.

2. Under Regulation No. 62.1, “Section I,” the EPA approval date was corrected to read “6/26/2018, 83 FR 29696.”

3. Under Regulation No. 62.2, the EPA approval date was corrected to read “6/25/2018, 83 FR 29455.”

4. Under Regulation No. 62.5, Standard No. 1, “Section I,” the EPA approval date was corrected to read “6/25/2018, 83 FR 29455.”

5. Under Regulation No. 62.5, Standard No. 1, “Section II,” the EPA approval date was corrected to read “6/25/2018, 83 FR 29455.”

6. Under Regulation No. 62.5, Standard No. 1, “Section III,” the EPA approval date was corrected to read “6/25/2018, 83 FR 29455.”

7. Under Regulation No. 62.5, Standard No. 1, “Section IV,” the EPA approval date was corrected to read “6/25/2018, 83 FR 29455.”

8. Under Regulation No. 62.5, Standard No. 1, “Section VI,” the EPA approval date was corrected to read “6/25/2018, 83 FR 29455.”

9. Under Regulation No. 62.5, Standard No. 4, “Section II,” the EPA approval date was corrected to read “6/25/2018, 83 FR 29455.”

10. Under Regulation No. 62.5, Standard No. 4, “Section III,” the EPA approval date was corrected to read “6/25/2018, 83 FR 29455.”

11. Under Regulation No. 62.5, Standard No. 4, “ Section V,” the EPA approval date was corrected to read “6/25/2018, 83 FR 29455.”

12. Under Regulation No. 62.5, Standard No. 4, “Section VIII,” the EPA approval date was corrected to read “6/25/2018, 83 FR 29455.”

13. Under Regulation No. 62.5, Standard No. 4, “Section XI,” the EPA approval date was corrected to read “6/25/2018, 83 FR 29455.”

14. Under Regulation No. 62.5, Standard No. 4, “Section XII,” the EPA approval date was corrected to read “6/25/2018, 83 FR 29455.”

15. Under Regulation No. 62.5, Standard No. 5, “Section I,” entries for the state effective date and EPA approval date were removed because the entry represents only the title of the Section, while the Parts under the heading of the Section include specific approval information.

16. Under Regulation No. 62.5, Standard No. 7.1, the explanation column was corrected to remove language applicable to Standard No. 7 and to clarify the applicable state-effective dates for Standard No. 7.1.

17. Under Regulation No. 62.6, entries for the state effective date and EPA approval date were removed because the entry represents only the title of the Regulation, while the Sections under the heading of the Regulation include specific approval information.

18. Under Regulation No. 62.7, entries for the state effective date and EPA approval date were removed because the entry represents only the title of the Regulation, while the Sections under the heading of the Regulation include specific approval information.

19. Under “Regulation No. 62.97,” the EPA approval date was corrected to read “10/13/2017, 82 FR 47936.”

EPA has determined that this action falls under the “good cause” exemption in section 553(b)(3)(B) of the Administrative Procedure Act (APA) which, upon finding “good cause,” authorizes agencies to dispense with public participation and section 553(d)(3) which allows an agency to make an action effective immediately (thereby avoiding the 30-day delayed effective date otherwise provided for in the APA). This administrative action simply codifies provisions which are already in effect as a matter of law in Federal and approved state programs, corrects typographical errors appearing in the CFR, and makes ministerial changes to the prefatory heading to the tables in the CFR. Under section 553(b)(3)(B) of the APA, an agency may find good cause where procedures are “impracticable, unnecessary, or contrary to the public interest.” Public comment for this administrative action is “unnecessary” and “contrary to the public interest” since the codification (and typographical corrections) only reflect existing law and the changes to the prefatory heading to the tables is ministerial in nature. Immediate notice of this action in the Federal Register benefits the public by providing the public notice of the updated South Carolina SIP Compilation and notice of typographical corrections and ministerial changes to the South Carolina “Identification of Plan” portion of the Federal Register . Further, pursuant to section 553(d)(3), making this action immediately effective benefits the public by immediately updating both the SIP Compilation and the CFR “Identification of plan” section (which includes table entry corrections).

In this rule, EPA is finalizing regulatory text that includes incorporation by reference. In accordance with requirements of 1 CFR 51.5, EPA is finalizing the incorporation by reference of previously EPA-approved regulations promulgated by South Carolina and federally effective prior to October 1, 2018. EPA has made, and will continue to make, these materials generally available through www.regulations.gov and at the EPA Region 4 Office (please contact the person identified in the FOR FURTHER INFORMATION CONTACT section of this preamble for more information).

Under the CAA, the Administrator is required to approve a SIP submission that complies with the provisions of the Act and applicable Federal regulations. See 42 U.S.C. 7410(k); 40 CFR 52.02(a). Thus, in reviewing SIP submissions, EPA's role is to approve state choices, provided that they meet the criteria of the CAA. Accordingly, this notification of administrative change 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 et seq. );

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

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

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

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

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

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

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

In addition, this notice of administrative change for the State of South Carolina does not have Tribal implications as specified by Executive Order 13175 (65 FR 67249, November 9, 2000), because it does not have substantial direct effects on an Indian Tribe. The Catawba Indian Nation Reservation is located within the boundary of York County, South Carolina. Pursuant to the Catawba Indian Claims Settlement Act, S.C. Code Ann. 27-16-120, “all state and local environmental laws and regulations apply to the [Catawba Indian Nation] and Reservation and are fully enforceable by all relevant state and local agencies and authorities.” EPA notes this action will not impose substantial direct costs on Tribal governments or preempt Tribal law.

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

EPA also believes that the provisions of section 307(b)(1) of the CAA pertaining to petitions for judicial review are not applicable to this action. This is because prior EPA rulemaking actions for each individual component of the South Carolina SIP Compilation previously afforded interested parties the opportunity to file a petition for judicial review in the United States Court of Appeals for the appropriate circuit within 60 days of such rulemaking action. Thus, EPA believes judicial review of this action under section 307(b)(1) is not available.

40 CFR part 52 is amended as follows:

Throughout this document whenever “we,” “us,” or “our” is used, we mean EPA. This supplementary information section is arranged as follows:

On August 15, 2018 (83 FR 40487), EPA proposed to approve an attainment plan submittal as a revision to Indiana's SIP, submitted on October 2, 2015, for the 2010 SO 2 NAAQS for the Indianapolis (Marion County), Southwest Indiana (Daviess and Pike Counties), and Terre Haute (Vigo County) areas. This action finalizes approval for the Indianapolis and Terre Haute areas only.

The dispersion modeling results submitted by Indiana show design values that are less than the standard of 75 parts per billion (ppb), specifically 73 ppb for the Indianapolis area and 72.6 ppb for the Terre Haute area. EPA proposed that these areas demonstrate attainment of the 2010 SO 2 standard and meet the applicable requirements of CAA sections 110, 172, 191, and 192 including emission inventories, RACT/RACM, RFP, and contingency measures, and that Indiana has previously addressed requirements regarding nonattainment area new source review (NSR).

EPA's August 15, 2018 proposed action received one public comment pertaining to the Southwest Indiana area, but no comments pertaining to the Indianapolis and Terre Haute areas. Because this final action is acting on the Indianapolis and Terre Haute areas only, EPA will respond to the comment for the Southwest Indiana in the applicable, separate rulemaking. EPA also received two anonymous comments that address subjects outside the scope of our proposed action, do not explain (or provide a legal basis for) how the proposed action should differ in any way, and make no specific mention of the substantive aspects of the proposed action. Consequently, these comments are not germane to this rulemaking and require no further response.

EPA is approving Indiana's attainment plans as submitted to EPA on October 2, 2015, as a revision to Indiana's SIP, for attaining the 2010 SO 2 NAAQS for the Indianapolis (Marion County) and Terre Haute (Vigo County) areas. The attainment plans include Indiana's attainment demonstrations for the Indianapolis and Terre Haute nonattainment areas using dispersion modeling to demonstrate that the emission limits that Indiana adopted into 326 Indiana Administrative Code Article 7, and submitted for EPA approval, provide for air quality meeting the SO 2 NAAQS.

The attainment plans also satisfy requirements for emission inventories, RACT/RACM, RFP, and contingency measures. Additionally, Indiana has previously addressed requirements regarding nonattainment area NSR rules  1 . Therefore, EPA has determined that Indiana's SO 2 attainment plans meet the applicable requirements of CAA sections 110, 172, 191, and 192.

In this rule, EPA is finalizing regulatory text that includes incorporation by reference. In accordance with requirements of 1 CFR 51.5, EPA is finalizing the incorporation by reference of the Indiana Regulations described in the amendments to 40 CFR part 52 set forth below. EPA has made, and will continue to make, these documents generally available through www.regulations.gov, and at the EPA Region 5 Office (please contact the person identified in the FOR FURTHER INFORMATION CONTACT section of this preamble for more information). Therefore, these materials have been approved by EPA for inclusion in the SIP, have been incorporated by reference by EPA into that plan, are fully federally enforceable under sections 110 and 113 of the CAA as of the effective date of the final rulemaking of EPA's approval, and will be incorporated by reference in the next update to the SIP compilation. 2

Under the CAA, the Administrator is required to approve a SIP submission that complies with the provisions of the CAA and applicable Federal regulations. 42 U.S.C. 7410(k); 40 CFR 52.02(a). Thus, in reviewing SIP submissions, EPA's role is to approve state choices, provided that they meet the criteria of the CAA. 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 et seq. );

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

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

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

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

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

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

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

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

Under section 307(b)(1) of the CAA, petitions for judicial review of this action must be filed in the United States Court of Appeals for the appropriate circuit by May 21, 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).)

40 CFR part 52 is amended as follows:

I. General Information A. Does this action apply to me?

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 http://www.ecfr.gov/cgi-bin/text-idx?&c=ecfr&tpl=/ecfrbrowse/Title40/40tab_02.tpl.

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-2017-0671 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 May 21, 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-2017-0671, by one of the following methods:

• Federal eRulemaking Portal: http://www.regulations.gov. Follow the online instructions for submitting comments. Do not submit electronically any information you consider to be CBI or other information whose disclosure is restricted by statute.

• Mail: OPP Docket, Environmental Protection Agency Docket Center (EPA/DC), (28221T), 1200 Pennsylvania Ave. NW, Washington, DC 20460-0001.

• Hand Delivery: To make special arrangements for hand delivery or delivery of boxed information, please follow the instructions at http://www.epa.gov/dockets/contacts.html.

Additional instructions on commenting or visiting the docket, along with more information about dockets generally, is available at http://www.epa.gov/dockets.

In the Federal Register of July 24, 2018 (83 FR 34968) (FRL-9980-31), EPA issued a document pursuant to FFDCA section 408(d)(3), 21 U.S.C. 346a(d)(3), announcing the filing of a pesticide petition (PP 7E8629) by IR-4, IR-4 Project Headquarters, Rutgers, The State University of NJ, 500 College Road East, Suite 201W, Princeton, NJ 08540. The petition requested that 40 CFR part 180 be amended by establishing tolerances for residues of mandipropamid, 4-chloro- N -[2-(3-methoxy-4-(2-propynyloxy)phenyl]ethyl]-α-(2-propynyloxy)-benzeneacetamide], in or on the raw agricultural commodities: Asparagus bean, edible podded at 0.90 parts per million (ppm); Bean (Phaseolus spp.), edible podded at 0.90 ppm; Bean (Vigna spp.), edible podded at 0.90 ppm; Brassica, leafy greens, subgroup 4-16B at 25 ppm; Catjang bean, edible podded at 0.90 ppm; Celtuce at 20 ppm; Chinese longbean, edible podded at 0.90 ppm; Citrus, dried pulp at 0.14 ppm; Citrus, oil at 2.2 ppm; Cowpea, edible podded at 0.90 ppm; Florence fennel at 20 ppm; French bean, edible podded at 0.90 ppm; Fruit, citrus, group 10-10 at 0.5 ppm; Garden bean, edible podded at 0.90 ppm; Goa bean, edible podded at 0.90 ppm; Green bean, edible podded at 0.90 ppm; Guar bean, edible podded at 0.90 ppm; Jackbean, edible podded at 0.90 ppm; Kidney bean, edible podded at 0.90 ppm; Kohlrabi at 3 ppm; Lablab bean, edible podded at 0.90 ppm; Leaf petiole vegetable subgroup 22B at 20 ppm; Leafy greens subgroup 4-16A at 25 ppm; Moth bean, edible podded at 0.90 ppm; Mung bean, edible podded at 0.90 ppm; Navy bean, edible podded at 0.90 ppm; Rice bean, edible podded at 0.90 ppm; Scarlet runner bean, edible podded at 0.90 ppm; Snap bean, edible podded at 0.90 ppm; Sword bean, edible podded at 0.90 ppm; Urd bean, edible podded at 0.90 ppm; Vegetable soybean, edible podded at 0.90 ppm; Vegetable, Brassica, head and stem, group 5-16 at 3 ppm; Velvet bean, edible podded at 0.90 ppm; Wax bean, edible podded at 0.90 ppm; Winged pea, edible podded at 0.90 ppm; and Yardlong bean, edible podded at 0.90 ppm.

Additionally, the petition requested to amend 40 CFR 180.637 by removing the tolerances for residues of mandipropamid in or on the raw agricultural commodities Bean, snap at 0.90 ppm; Brassica, head and stem, subgroup 5A at 3 ppm; Brassica, leafy greens, subgroup 5B at 25 ppm; and Vegetable, leafy except Brassica, group 4 at 20 ppm.

That document referenced a summary of the petition prepared by Syngenta Crop Protection, the registrant, which is available in the docket, http://www.regulations.gov. There were no comments received in response to the notice of filing.

Based upon review of the data supporting the petition, EPA has modified the levels at which some tolerances are being established as well as some of the commodities in which tolerances are being established. 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 mandipropamid including exposure resulting from the tolerances established by this action. EPA's assessment of exposures and risks associated with mandipropamid 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.

Subchronic and chronic studies indicate that the liver and kidney are the primary target organs for mandipropamid. Liver effects observed in subchronic studies with rats, mice and dogs included periportal hypertrophy (rats), increased eosinophilia (rats and mice), increased plasma albumin, total protein, cholesterol, and gamma-glutamyl transferase (rats), increased liver weights (rats, mice and dogs), increased liver enzymes (dogs), increased pigment in hepatocytes and Kupffer cells (dogs), and centrilobular hepatocyte vacuolation (dogs). In the chronic dog study, increases in microscopic pigment in the liver, and increased liver enzymes were observed. In the chronic rat and mouse studies, liver toxicity was not observed. Nephrotoxicity was observed in the chronic rat study; however, in the chronic mouse study, only decreased body weight and food utilization were observed. The findings of liver toxicity and nephrotoxicity are consistent with the results from metabolism studies, in which radioactivity levels in liver and kidney were typically higher than other tissues. There were no consistent sex-related differences in target organ toxicity, although male rats appeared to be more sensitive to body weight effects.

No evidence of neurotoxicity was observed in the database, including rat acute or subchronic neurotoxicity studies. No systemic or dermal toxicity was observed in the rat following dermal exposure for 28 days up to the limit dose.

No evidence of increased pre- or postnatal quantitative or qualitative susceptibility was observed. No fetal or maternal toxicity was observed in developmental toxicity studies in the rat and rabbit. Decreased pup weights were observed in the rat two-generation reproduction study in the presence of decreased parental body weight and food utilization.

There was no evidence of a treatment-related increase in tumor incidence in the mouse carcinogenicity study or the rat chronic/carcinogenicity study. There was no evidence of genotoxicity in bacterial reverse gene mutation, mammalian in vitro forward gene mutation, mammalian in vivo clastogenicity, or unscheduled DNA synthesis assays. Therefore, mandipropamid is classified as “not likely to be carcinogenic to humans.”

Specific information on the studies received and the nature of the adverse effects caused by mandipropamid as well as the no-observed-adverse-effect-level (NOAEL) and the lowest-observed-adverse-effect-level (LOAEL) from the toxicity studies can be found at http://www.regulations.gov in the document titled “Mandipropamid. Aggregate Human Health Risk Assessment Supporting Section 3 Registration of Proposed New Uses on Citrus Fruits Group 10-10 and Succulent Beans, Along with Various Crop Group and Subgroup Conversions” on pages 35-39 in docket ID number EPA-HQ-OPP-2017-0671.

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 http://www2.epa.gov/pesticide-science-and-assessing-pesticide-risks/assessing-human-health-risk-pesticides.

A summary of the toxicological endpoints for mandipropamid used for human risk assessment is shown in Table 1 of this unit.

1. Dietary exposure from food and feed uses. In evaluating dietary exposure to mandipropamid, EPA considered exposure under the petitioned-for tolerances as well as all existing mandipropamid tolerances in 40 CFR 180.637. EPA assessed dietary exposures from mandipropamid in food as follows:

i. Acute exposure. Quantitative acute dietary exposure and risk assessments are performed for a food-use pesticide, if a toxicological study has indicated the possibility of an effect of concern occurring as a result of a 1-day or single exposure. No such effects were identified in the toxicological studies for mandipropamid; therefore, a quantitative acute dietary exposure assessment is unnecessary.

ii. Chronic exposure. In conducting the chronic dietary exposure assessment, EPA used Dietary Exposure Evaluation Model software with the Food Commodity Intake Database (DEEM-FCID) Version 3.16, which uses food consumption data from the U.S.

Department of Agriculture's (USDA's) National Health and Nutrition Examination Survey, “What We Eat in America” (NHANES/WWEIA) from 2003 through 2008. As to residue levels in food, the chronic dietary risk assessment assumed tolerance-level residues in all commodities with existing tolerances except tuberous and corm vegetable subgroup 1C. For the chronic dietary risk assessment, this subgroup was assessed at 0.115 ppm, which assumes tolerance-level residues of parent mandipropamid (0.09 ppm), and includes metabolite SYN 500003 in parent-equivalents (at 0.025 ppm). Tolerance-level residues associated with the proposed new uses and crop group conversions were also used in the assessment. The Agency's 2018 Default Processing Factors were used for all processed commodities for which they were available. The empirical processing factor from the grape processing study was used for grape wine/sherry (1.5X). A processing factor was not used for grape raisin because a tolerance is currently established in raisin. Similarly, processing factors were not used for citrus oil and dried pulp because the Agency is establishing separate tolerances in these commodities.

iii. Cancer. Based on the lack of evidence of carcinogenicity or genotoxicity, the Agency has classified mandipropamid as “not likely to be a human carcinogen” and therefore, there is no concern for cancer risk.

iv. Anticipated residue and percent crop treated (PCT) information. EPA did not use anticipated residue or PCT information in the dietary assessment for mandipropamid. Tolerance level residues and 100 PCT were assumed for all food commodities except as noted in section III.C.ii.

2. Dietary exposure from drinking water. The Agency used screening level water exposure models in the dietary exposure analysis and risk assessment for mandipropamid in drinking water. These simulation models take into account data on the physical, chemical, and fate/transport characteristics of mandipropamid. Further information regarding EPA drinking water models used in pesticide exposure assessment can be found at http://www2.epa.gov/pesticide-science-and-assessing-pesticide-risks/about-water-exposure-models-used-pesticide.

Based on the FQPA Index Reservoir Screening Tool (FIRST) and Pesticide Root Zone Model Ground Water (PRZM GW), the estimated drinking water concentrations (EDWCs) of mandipropamid for chronic exposures are estimated to be 9.0 ppb for surface water and 79 ppb for ground water.

Modeled estimates of drinking water concentrations were directly entered into the dietary exposure model. For the chronic dietary risk assessment, the water concentration value of 79 ppb was used to assess the contribution to drinking water.

3. From non-dietary exposure. The term “residential exposure” is used in this document to refer to non-occupational, non-dietary exposure ( e.g., for lawn and garden pest control, indoor pest control, termiticides, and flea and tick control on pets).

Mandipropamid is not registered for any specific use patterns that would result in residential exposure.

4. Cumulative effects from substances with a common mechanism of toxicity. Section 408(b)(2)(D)(v) of FFDCA requires that, when considering whether to establish, modify, or revoke a tolerance, the Agency consider “available information” concerning the cumulative effects of a particular pesticide's residues and “other substances that have a common mechanism of toxicity.”

EPA has not found mandipropamid to share a common mechanism of toxicity with any other substances, and mandipropamid does not appear to produce a toxic metabolite produced by other substances. For the purposes of this tolerance action, therefore, EPA has assumed that mandipropamid does not have a common mechanism of toxicity with other substances. For information regarding EPA's efforts to determine which chemicals have a common mechanism of toxicity and to evaluate the cumulative effects of such chemicals, see EPA's website at http://www2.epa.gov/pesticide-science-and-assessing-pesticide-risks/cumulative-assessment-risk-pesticides.

1. In general. Section 408(b)(2)(C) of FFDCA provides that EPA shall apply an additional tenfold (10X) margin of safety for infants and children in the case of threshold effects to account for prenatal and postnatal toxicity and the completeness of the database on toxicity and exposure unless EPA determines based on reliable data that a different margin of safety will be safe for infants and children. This additional margin of safety is commonly referred to as the FQPA Safety Factor (SF). In applying this provision, EPA either retains the default value of 10X, or uses a different additional safety factor when reliable data available to EPA support the choice of a different factor.

2. Prenatal and postnatal sensitivity. No evidence of increased pre- or postnatal quantitative or qualitative susceptibility was observed. No fetal or maternal toxicity was observed in developmental toxicity studies in the rat and rabbit. Decreased pup weights were observed in the rat two-generation reproduction study in the presence of decreased parental body weight and food utilization.

3. Conclusion. EPA has determined that reliable data show the safety of infants and children would be adequately protected if the FQPA SF were reduced to 1x. That decision is based on the following findings:

i. The toxicity database for mandipropamid is complete.

ii. There is no indication that mandipropamid is a neurotoxic chemical and there is no need for a developmental neurotoxicity study or additional UFs to account for neurotoxicity.

iii. There is no evidence that mandipropamid results in increased susceptibility in in utero rats or rabbits in the prenatal developmental studies or in young rats in the 2-generation reproduction study.

iv. There are no residual uncertainties identified in the exposure databases. The dietary food exposure assessments were performed based on 100 PCT and tolerance-level residues except as noted in section III.C.ii. EPA made conservative (protective) assumptions in the ground and surface water modeling used to assess exposure to mandipropamid in drinking water. These assessments will not underestimate the exposure and risks posed by mandipropamid.

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. Acute risk. An acute aggregate risk assessment takes into account acute exposure estimates from dietary consumption of food and drinking water. No adverse effect resulting from a single oral exposure was identified and no acute dietary endpoint was selected. Therefore, mandipropamid is not expected to pose an acute risk.

2. Chronic risk. Using the exposure assumptions described in this unit for chronic exposure, EPA has concluded that chronic exposure to mandipropamid from food and water will utilize 49% of the cPAD for children 1-2 years old, the population group receiving the greatest exposure. There are no residential uses for mandipropamid.

3. Short- and intermediate-term risk. Short- and intermediate-term aggregate exposure takes into account short- and intermediate-term residential exposure plus chronic exposure to food and water (considered to be a background exposure level). Short- and intermediate-term adverse effects were identified; however, mandipropamid is not registered for any use patterns that would result in either short- or intermediate-term residential exposure. Short- and intermediate-term risk is assessed based on short- and intermediate-term residential exposure plus chronic dietary exposure. Because there is no short- or 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 short-term risk), no further assessment of short- or intermediate-term risk is necessary, and EPA relies on the chronic dietary risk assessment for evaluating short- and intermediate-term risk for mandipropamid.

4. Aggregate cancer risk for U.S. population. Based on the lack of evidence of carcinogenicity in two adequate rodent carcinogenicity studies, mandipropamid is not expected to pose a cancer risk to humans.

5. Determination of safety. Based on these risk assessments, EPA concludes that there is a reasonable certainty that no harm will result to the general population, or to infants and children from aggregate exposure to mandipropamid residues.

There is an adequate enforcement method available for the quantitation of mandipropamid in plant commodities. Method RAM 415/01, using high performance liquid chromatography with tandem mass spectrometric detection (LC/MS/MS), has been adequately validated by an independent laboratory. It has a validated limit of quantitation (LOQ) of 0.01 ppm. An acceptable confirmatory method is also available.

The method may be requested from: Chief, Analytical Chemistry Branch, Environmental Science Center, 701 Mapes Rd., Ft. Meade, MD 20755-5350; telephone number: (410) 305-2905; email address: residuemethods@epa.gov.

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.

There are no harmonization issues with Codex regarding the new use on citrus fruits because Codex has not established MRLs for mandipropamid in citrus commodities. Additionally, Codex has not established an MRL in snap beans, so this is not a harmonization issue. Regarding the updated crop group/subgroup conversions, the tolerance in leafy vegetable group 4-16 is harmonized with the corresponding Codex MRLs. The tolerance in Brassica head and stem vegetable group 5-16, and the individual tolerance in kohlrabi, is harmonized with the Codex MRLs in cabbage and Chinese napa cabbage, but not the Codex MRL in broccoli. There are no Codex MRLs in Brussels sprouts, cauliflower or kohlrabi. The EPA is not harmonizing with the Codex MRL in broccoli because it is lower than the U.S. tolerance in Brassica head and stem vegetable group 5-16; setting a lower tolerance in broccoli could result in violative residues for U.S. growers. The tolerance in leaf petiole subgroup 22B, with individual tolerances in celtuce and Florence fennel, is harmonized with the Codex MRL in celery.

EPA's tolerance levels are expressed to provide sufficient precision for enforcement purposes, and this may include the addition of trailing zeros (0.50 ppm rather than the proposed 0.5 ppm). The Agency does this in order to avoid the situation where rounding of an observed violative residue to the level of precision of the tolerance expression would result in a residue being considered non-violative (such as 0.54 ppm being rounded to 0.5 ppm). EPA made this revision for Fruit, citrus, group 10-10, Kohlrabi, and Vegetable, Brassica, head and stem, group 5-16.

Because the petitioner proposed separate tolerances in both subgroups 4-16A and 4-16B at 25 ppm, the Agency is establishing a single tolerance in leafy vegetable group 4-16 at 25 ppm rather than separate tolerances in the two subgroups. In addition, the Agency revised the commodity terminology to use the correct commodity definition for Florence fennel, which is Fennel, Florence, fresh leaves and stalk.

The proposed tolerance in citrus dried pulp (0.14 ppm) was incorrectly based on the dried pulp processing factor (2.9X) multiplied by the lowest average field trial value (LAFT) of 0.049 ppm from the orange field trials. However, per Office of Chemical Safety and Pollution Prevention (OCSPP) Residue Chemistry Test Guideline 860.1520, EPA based the tolerance on the processing factor (2.9X) multiplied by the highest average field trial value (HAFT) of 0.231 ppm from the lemon field trials (which had the highest HAFT of the three representative commodities), yielding a result of 0.67 ppm. Per the rounding protocol in the Organization for Economic Cooperation and Development (OECD) MRL Calculator User Guide, this result was increased to 0.70 ppm.

Similarly, the proposed tolerance in citrus oil (2.2 ppm) was incorrectly based on the oil processing factor (45X) multiplied by the LAFT of 0.049 ppm from the orange field trials. As for dried pulp, EPA based the tolerance in citrus oil on the processing factor (45X) multiplied by the HAFT of 0.231 ppm from the lemon field trials, yielding a result of 10.4 ppm. Per the rounding protocol in the OECD's MRL Calculator User Guide this result was increased to 15 ppm.

Therefore, tolerances are established for residues of mandipropamid in or on Asparagus bean, edible podded at 0.90 ppm; Bean (Phaseolus spp.), edible podded at 0.90 ppm; Bean (Vigna spp.), edible podded at 0.90 ppm; Catjang bean, edible podded at 0.90 ppm; Celtuce at 20 ppm; Chinese longbean, edible podded at 0.90 ppm; Citrus, dried pulp at 0.70 ppm; Citrus, oil at 15 ppm; Cowpea, edible podded at 0.90 ppm; Fennel, Florence, fresh leaves and stalk at 20 ppm; French bean, edible podded at 0.90 ppm; Fruit, citrus, group 10-10 at 0.50 ppm; Garden bean, edible podded at 0.90 ppm; Goa bean, edible podded at 0.90 ppm; Green bean, edible podded at 0.90 ppm; Guar bean, edible podded at 0.90 ppm; Jackbean, edible podded at 0.90 ppm; Kidney bean, edible podded at 0.90 ppm; Kohlrabi at 3.0 ppm; Lablab bean, edible podded at 0.90 ppm; Leaf petiole vegetable subgroup 22B at 20 ppm; Moth bean, edible podded at 0.90 ppm; Mung bean, edible podded at 0.90 ppm; Navy bean, edible podded at 0.90 ppm; Rice bean, edible podded at 0.90 ppm; Scarlet runner bean, edible podded at 0.90 ppm; Snap bean, edible podded at 0.90 ppm; Sword bean, edible podded at 0.90 ppm; Urd bean, edible podded at 0.90 ppm; Vegetable, Brassica, head and stem, group 5-16 at 3.0 ppm; Vegetable, leafy, group 4-16 at 25 ppm; Vegetable soybean, edible podded at 0.90 ppm; Velvet bean, edible podded at 0.90 ppm; Wax bean, edible podded at 0.90 ppm; Winged pea, edible podded at 0.90 ppm; and Yardlong bean, edible podded at 0.90 ppm.

Additionally, the existing tolerances in/on Bean, snap at 0.90 ppm; Brassica, head and stem, subgroup 5A at 3 ppm; Brassica, leafy greens, subgroup 5B at 25 ppm; and Vegetable, leafy except Brassica, group 4 at 20 ppm are removed as unnecessary since they are covered by the new tolerances.

This action establishes tolerances under FFDCA section 408(d) in response to a petition submitted to the Agency. The Office of Management and Budget (OMB) has exempted these types of actions from review under Executive Order 12866, entitled “Regulatory Planning and Review” (58 FR 51735, October 4, 1993). Because this action has been exempted from review under Executive Order 12866, this action is not subject to Executive Order 13211, entitled “Actions Concerning Regulations That Significantly Affect Energy Supply, Distribution, or Use” (66 FR 28355, May 22, 2001) or Executive Order 13045, entitled “Protection of Children from Environmental Health Risks and Safety Risks” (62 FR 19885, April 23, 1997), nor is it considered a regulatory action under Executive Order 13771, entitled “Reducing Regulations and Controlling Regulatory Costs” (82 FR 9339, February 3, 2017). This action does not contain any information collections subject to OMB approval under the Paperwork Reduction Act (PRA) (44 U.S.C. 3501 et seq. ), nor does it require any special considerations under Executive Order 12898, entitled “Federal Actions to Address Environmental Justice in Minority Populations and Low-Income Populations” (59 FR 7629, February 16, 1994).

Since tolerances and exemptions that are established on the basis of a petition under FFDCA section 408(d), such as the tolerances 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 et seq. ), do not apply.

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 et seq. ).

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 et seq. ), EPA will submit a report containing this rule and other required information to the U.S. Senate, the U.S. House of Representatives, and the Comptroller General of the United States prior to publication of the rule in the Federal Register . This action is not a “major rule” as defined by 5 U.S.C. 804(2).

Therefore, 40 CFR chapter I is amended as follows:

Legal Authority

The legal authority for this regulatory action is found in the Social Security Act (the Act) as follows:

Part 1007: Sections 1902(a)(61), 1903(a)(6), 1903(b)(3), 1903(q), and 1102 of the Act.

Part 455: Section 1102 of the Act.

The mission of the MFCUs, as described in section 1903(q) of the Act, is to investigate and prosecute Medicaid provider fraud and patient abuse or neglect that occurs in health care facilities or board and care facilities. The OIG, on behalf of HHS, has the responsibility to administer a grant award to each of the MFCUs and to provide oversight for MFCU operations. The purpose of this regulatory action is to revise regulations that were initially issued after the inception of the MFCU grant program in 1977.

We are amending this regulation for three specific reasons. First, we are incorporating into the rule statutory changes that have occurred since the 1977 enactment of the Medicare-Medicaid Anti-Fraud and Abuse Amendments (Pub. L. 95-142), which amended section 1903(a) of the Act to provide for Federal participation in the costs attributable to establishing and operating a MFCU. Second, we are aligning the rule with practices and policies that have developed and evolved since the initial version of the rule was issued in 1978, 43 FR 32078 (July 24, 1978), now codified at 42 CFR part 1007. Finally, we are revising the regulation to reduce burden on the Units, when doing so does not undermine OIG's oversight role or the Units' mission.

For ease of reading, we have republished the entirety of part 1007 and incorporated the changes as part of that publication. However, for some sections within part 1007, we did not make substantive changes.

(1) Statutory Changes. We incorporate statutory changes that have occurred since 1977, including (1) extending funding for State MFCUs by authorizing a Federal matching rate of 90 percent for the first 3 years of operation and a Federal matching rate of 75 percent thereafter, (2) establishing a Medicaid State plan requirement that a State must operate an effective Unit, (3) requiring the Secretary of Health and Human Services to establish standards under which Units must be operated, (4) allowing Units to seek approval from the relevant Inspector General to investigate and prosecute violations of State law related to fraud in any aspect of the provision of health care services and activities of providers of such services under any Federal health care program, including Medicare, as long as the fraud is primarily related to Medicaid, and (5) giving Units the option to investigate and prosecute patient abuse or neglect in board and care facilities, regardless of whether the facilities receive Medicaid payments. With the exception of the establishment of standards, all of these statutory changes were self-implementing and have been operational since their statutory effective dates. Performance standards for MFCU operations were initially published in the Federal Register in 1994 and revised in 2012.

(2) Office of Inspector General Authority. The final rule, in referring to OIG as the oversight agency for the MFCUs, recognizes that the authority for certification and recertification of the Units, as well as the administration of a Federal grant award to operate the Units, was transferred from the predecessor agency of CMS (the Health Care Financing Administration) to OIG on July 27, 1979.

(3) Definition of Key Terms. The final rule adds definitions of key terms that clarify issues related to MFCU authority under the grant. All the definitions are consistent with other regulatory definitions and with longstanding practice.

(4) Organizational Requirements. The final rule clarifies, consistent with OIG policy and longstanding MFCU practice, what it means to be a “single, identifiable entity of State government” as required under the statute. The regulations specify that a MFCU must have a single director to whom all staff report, operate under a budget that is separate from that of its parent agency, and generally have offices in their own contiguous space.

(5) Prosecutorial Authority Requirements. The final rule, consistent with statutory changes and longstanding practice, makes amendments to the prosecutorial authority requirement options to include the prosecution of patient or resident abuse and neglect and to include formal written procedures for making referrals to the State Attorney General or another office with statewide prosecutorial authority.

(6) Agreement with Medicaid Agency. The final rule requires that the agreement with the Medicaid agency establish regular communication, procedures for coordination, and procedures by which the Unit will receive referrals of potential fraud from managed care organizations. This revision is consistent with the recent changes to the Medicaid managed care regulation in 42 CFR part 438 that require managed care organizations to refer potential fraud to the Medicaid agency or to the MFCU.

(7) Duties and Responsibilities. The final rule, consistent with published performance standards, requires that Units submit all convictions to OIG for purposes of program exclusion within 30 days of sentencing or as soon as practicable if a Unit encounters delays from the courts. The final rule also clarifies, consistent with existing practice, the requirement that a Unit make information available to, and coordinate with, OIG investigators and attorneys, or with other Federal investigators and prosecutors, on Medicaid fraud and investigations or prosecutions involving the same suspects or allegations.

(8) Staffing Requirements. The final rule clarifies that Units may choose to employ professional employees as full- or part-time employees so long as they devote their “exclusive effort” to Unit functions. The final rule also establishes that a Unit will employ a director and that all Unit employees will be under the direction and supervision of the Unit director. The rule establishes that Unit professional employees may also obtain outside employment with some restriction and may perform temporary assignments that are not a required function of the Unit, but may not receive Federal financial participation for those assignments. The rule also clarifies that Units may employ employees or consultants with specialized knowledge and skills, but that investigation and prosecution functions may not be outsourced through consultant agreements or other contracts. Finally, the rule requires Units to provide training for professional employees on Medicaid fraud and patient or resident abuse and neglect matters. These requirements all codify and are consistent with current Unit operations and OIG policy on Unit staffing.

(9) Recertification Requirements. The final rule amends the regulation to reflect the Unit recertification process. This includes describing what OIG requires annually as part of recertification, including submission of reapplication materials and statistical data. The final rule also eliminates the requirement to submit an “annual report,” thus reducing burden. The final rule clarifies the factors that OIG considers when recertifying a Unit. The rule also creates a process for notifying the Unit of approval or denial of recertification and procedures for reconsideration should OIG deny recertification.

(10) Federal Financial Participation (FFP). The final rule reflects that, except for Units with OIG approval to conduct data mining under this part, Units may not receive FFP for data mining activities that duplicate surveillance and utilization review responsibilities of State Medicaid agencies, but may engage in activities other than data mining to identify situations in which fraud may exist, such as efforts to increase referrals through program outreach activities.

(11) Disallowance Procedures. The final rule sets forth procedures for OIG disallowances of FFP and for Unit requests for reconsideration and appeal of disallowances. These procedures are consistent with, and prompted by, a 2008 amendment to the Act, adding section 1116(e), which provided States the option to seek reconsideration of a disallowance by an agency prior to an appeal to the Departmental Appeals Board. The procedures are intended to mirror those that were implemented earlier for CMS disallowances to the States, 42 CFR 430.42.

(12) CMS Companion Regulation. To ensure that both the Unit and the Medicaid agency are required to have an agreement with each other, the final rule includes amendments to the CMS regulation at 42 CFR 455.21 to require that the Medicaid agency has an agreement with the Unit. The amendments to this section were developed in collaboration with CMS.

There are no significant costs associated with the regulatory revisions, and the revisions do not impose any mandates on State, local, or Tribal governments or on the private sector that would represent significant costs.

(1) Omnibus Reconciliation Act of 1980 (Pub. L. 96-499). The Medicare-Medicaid Anti-Fraud and Abuse Amendments added section 1903(a)(6) of the Social Security Act (the Act), which authorized a Federal matching rate of 90 percent for the establishment and operation of State Medicaid Fraud Control Units (MFCUs) for fiscal years 1978 through 1980. The Omnibus Reconciliation Act of 1980 extended funding for State MFCUs by amending section 1903(a)(6) of the Act to authorize a Federal matching rate of 90 percent for the first 3 years of operation and a Federal matching rate of 75 percent thereafter.

(2) Omnibus Budget Reconciliation Act of 1993 (Pub. L. 103-66). The Omnibus Budget Reconciliation Act of 1993 added section 1902(a)(61) to the Act, establishing a Medicaid State plan requirement that a State must operate an effective MFCU, unless the State demonstrates that effective operation of a Unit would not be cost effective and that, in the absence of a Unit, beneficiaries will be protected from abuse and neglect. The statute further requires that the Units be operated in accordance with standards established by the Secretary of Health and Human Services (HHS).

(3) Ticket to Work and Work Incentives Improvement Act of 1999 (Pub. L. 106-170). In the Ticket to Work and Work Incentives Improvement Act of 1999, Congress amended section 1903(q) of the Act to extend the authority of MFCUs in two ways. First, the Units may seek approval from the relevant Federal Inspector General (in most circumstances the HHS Inspector General) to investigate and prosecute violations of State law related to any aspect of fraud in connection with “the provision of health care services and activities of providers of such services under any Federal health care program,” including Medicare, “if the suspected fraud or violation of State law is primarily related to” Medicaid. Second, the law gives Units the option to investigate and prosecute patient abuse or neglect in “board and care facilities,” regardless of whether those facilities receive Medicaid payments.

Prior to the publication of this final rule, the regulation was amended on two occasions. First, the regulation was amended at § 1007.9(e)-(g) (76 FR 5970 (February 2, 2011)) to implement payment suspension provisions found in the Patient Protection and Affordable Care Act, Public Law 111-148. Second, the regulation was modified at § 1007.20 to allow FFP for data mining under certain circumstances (78 FR 29055 (May 17, 2013)). With the exception of these two revisions, the regulation had not received a revision since it was originally published in 1978. In the ensuing years, growth of the MFCU program to 50 Units (49 States and the District of Columbia), as well as changes in MFCU practice, health care, and the workplace, have led to the need to revise the regulation. Further, in 1994, pursuant to section 1902(a)(61) of the Act, the Office of Inspector General (OIG), in consultation with the Units, developed 12 performance standards to be used in assessing the operations of MFCUs. These performance standards have since been revised at 77 FR 32645 (June 1, 2012). OIG uses the performance standards to annually recertify each Unit and to determine if a Unit is effectively and efficiently carrying out its duties and responsibilities. On September 20, 2016, OIG published in the Federal Register (81 FR 64383) a Notice of Proposed Rulemaking (Proposed Rule), which we are finalizing with publication of this final rule.

The Proposed Rule set forth proposed amendments to the State Medicaid Fraud Control Unit regulations. With respect to definitions, we proposed to modify the current definition of “provider,” eliminate the definition of “employ or employee,” and add definitions for “full-time employee,” “part-time employee,” “professional employee,” “exclusive effort,” “director,” “fraud,” “abuse of patients,” “board and care facility,” “health care facility,” “misappropriation of patient funds,” “neglect of patients,” and “program abuse.”

With respect to requirements for certification, we proposed to define the phrase “single, identifiable entity,” specifically, that a Unit must (1) be a single organization reporting to the single Unit director; (2) operate under its own budget that is separate from that of its parent division or agency; and (3) have the headquarters office and any field offices each in their own contiguous space. We also proposed to clarify that Units must satisfy the definition to be certified and recertified.

With respect to prosecutorial authority requirements, we proposed that the regulation be amended to include the establishment of formal procedures for referring cases of patient abuse and neglect to the appropriate prosecuting authority when there is no State agency with statewide authority and capability for patient abuse prosecutions. We proposed that the regulation be amended to reference the office of the State Attorney General “or another office with statewide prosecutorial authority” and to clarify that the formal procedures should be written procedures.

With respect to the Unit's relationship to and its agreement with the Medicaid agency, in the joint Proposed Rule, OIG and the Centers for Medicare & Medicaid Services (CMS) proposed to add additional guidance to the MFCU rule and the CMS rule to clarify that both the Medicaid agency and the Unit must enter into a written agreement, such as a memorandum of understanding. We also proposed to add to both rules that the written agreement include certain required elements. Finally, we proposed an amendment to require, consistent with changes to the law and regulation governing the referral of credible allegations of fraud, that the Unit provide certification to the Medicaid agency, upon request on a quarterly basis, that any matter accepted on the basis of a referral continues to be under investigation and thus warrants continuation of payment suspension.

With respect to functions and responsibilities of a Unit, we proposed to require the Unit to review complaints involving misappropriation of funds, as we believed that making the review of such complaints mandatory, rather than optional, is consistent with the broad statutory responsibility for patient abuse or neglect. Consistent with the statute, we also proposed to revise the regulation to specify that the MFCU must obtain written permission from the relevant Federal Inspector General to investigate cases of provider fraud in health care programs other than Medicaid and that the Units report annually to OIG on any approvals for extended investigative authority from any Federal Inspector General. To be consistent with the statute, we also proposed to permit investigations of patient abuse or neglect in board and care facilities. We proposed that applicable State laws pertaining to Medicaid fraud include criminal statutes as well as civil false claims statutes or other civil authorities. We further proposed that if no State civil fraud statute exists, Units should make appropriate referrals of meritorious civil cases to Federal investigators or prosecutors, such as the U.S. Department of Justice (DOJ) or the U.S. Attorney's Office, as well as to the OIG Office of Investigations and Office of Counsel to the Inspector General. We proposed to clarify that when a Unit discovers that overpayments have been made to a provider or facility, the Unit must either recover the overpayment as part of its resolution of a fraud case or refer the matter to the proper State agency for collection.

With respect to coordination with Federal partners, we proposed to retain the current requirement that a Unit make available to Federal investigators and prosecutors and OIG attorneys all information in its possession concerning Medicaid fraud and that the Unit coordinate with such officials any Federal and State investigations or prosecutions involving the same suspects or allegations. However, we also proposed to expand the requirement to further ensure effective collaboration between the Units and OIG investigators and attorneys, or other Federal investigators and Federal prosecutors by (1) establishing a practice of regular meetings or communication; (2) making appropriate referrals to OIG investigators and attorneys, other Federal investigators, and Federal prosecutors; and (3) developing written procedures for those coordinating actions.

We proposed to require a Unit to provide adequate safeguards to protect sensitive information and data under the Unit's control, updating a requirement that had largely referred to paper case files and other case-related materials, such as evidence.

We proposed to amend the regulations to require that a Unit transmit to OIG, for purposes of excluding convicted individuals and entities from participation in Federal health care programs under section 1128 of the Act, pertinent documentation on all convictions obtained by the Unit, including those cases investigated jointly with another law enforcement agency, as well as those prosecuted by another agency at the local, State, or Federal level. We proposed that such information be provided within 30 days of sentencing or, if Units are unable to obtain pertinent information from the sentencing court within 30 days, as soon as reasonably practicable.

With respect to staffing requirements, we proposed to revise the regulations to clarify that Unit professional employees do not need to be “full time” to receive FFP, but to retain the longstanding policy and practice that FFP is permitted only for Unit professional employees who are devoted “exclusively” to the MFCU mission except for limited circumstances that are specifically described in the regulation. We also proposed that, to be eligible for FFP, professional employees may not be employed by other State agencies during nonduty hours and that professional employees may obtain employment outside of State government, if State law allows it, but only if the outside employment presents no conflict of interest to Unit activities. We proposed to permit Unit professional employees to engage in temporary assignments that are not within the functions and responsibilities of a Unit only if such assignments are truly limited in duration. Such assignments would not be funded by the Federal MFCU grant. We proposed to add a requirement that the Unit must employ a director who supervises all Unit employees, either directly or through subordinate Unit managers.

We also proposed to clarify that a Unit may not receive FFP when it relies on individuals not employed directly by the Unit for the investigation or prosecution of cases, including individuals retained through consultant agreements or other contractual arrangements, but that Units may receive FFP for the employment, or retention through consultant agreements or other arrangements, of individuals with particular knowledge, skills, and/or expertise that a Unit believes will support the Unit in the investigation or prosecution of cases. We also proposed to add a requirement that, consistent with MFCU performance standards, a Unit must provide training for its professional employees for the purpose of establishing and maintaining proficiency in the investigation and prosecution of Medicaid fraud and patient abuse and neglect. We proposed to clarify that a Unit may hire administrative and support staff on a part-time basis. Finally, we proposed minor clarifications to the qualifications of attorneys, auditors, and the senior investigator.

With respect to certification, we proposed to clarify that initial certification will be based on the information and documentation specified in the initial application and to eliminate the requirement that an initial application include a projection of caseload.

With respect to recertification, we proposed to revise regulations to reflect the recertification process that has evolved since the program began. Specifically, we proposed that the regulation would (1) describe the information that must be provided to OIG on an annual basis, including the recertification application and statistical data; (2) describe other information considered for recertification; (3) clarify the basis for recertification by OIG; (4) create a procedure in which OIG notifies the Unit whether the reapplication is approved or denied by the Unit's recertification date; (5) clarify that an approved reapplication may be subject to special conditions; and (6) establish basic procedures for reconsideration of an OIG denial of recertification. We also proposed modifications to the annual report.

With respect to FFP rates and eligible costs, we proposed to modify the regulation to reflect that, under law, FFP is available at the rate of 90 percent during the first 12 quarters of a Unit's operation and at 75 percent thereafter, beginning with the 13th quarter of a Unit's operation. We also proposed to clarify that each quarter of reimbursement at the 90 percent matching rate is counted in determining when the 13th quarter begins and that quarters of Unit operation do not have to be consecutive to accumulate for purposes of determining when the 90 percent matching period has ended. Additionally, we proposed to clarify in regulation that a Unit may receive FFP for its efforts to increase referrals through program outreach activities. We also proposed to clarify the prohibition on the ability of Units to receive FFP to “identify situations in which a question of fraud may exist” by clarifying the ability of Units to engage in activities, other than data mining, to identify potential civil or criminal fraud in the Medicaid program.

In addition, we proposed to clarify that the longstanding FFP prohibition for beneficiary fraud (unless the suspected fraud involves conspiracy with a provider) is narrowly focused on cases involving the establishment of eligibility for Medicaid, such as the suspected fraudulent statement of assets and income. On the other hand, consistent with OIG policy, the proposed revision would permit FFP for the investigation or prosecution of cases in which a beneficiary is alleged to have submitted, or caused the submission of, a fraudulent claim to the program for particular items or services that are unrelated to the beneficiary's status as a beneficiary. One scenario in which such cases may arise involves Medicaid personal care services “self-directed” programs, where the beneficiary may submit claims and receive payment from Medicaid, may be responsible for hiring his or her own caregivers, and may be required to monitor the activities of caregivers.

With respect to disallowance procedures, we proposed to amend the regulation to establish procedures for taking formal disallowances of FFP, for Units to request reconsideration of disallowances, and to appeal to the HHS Departmental Appeals Board.

Finally, we proposed to update the listing of other applicable HHS regulations that were amended after the MFCU regulations were initially promulgated.

We received responsive comments from 10 distinct commenters, including trade associations (such as the national association that represents the MFCUs), individual Units, a health plan, and a State medical society. Some of the commenters provided comments on multiple topics. Commenters generally supported our proposals, but many of them recommended certain changes and requested certain clarifications. We have divided the public comment summaries and our responses into sections pertaining to the part of the regulation to which they apply.

Comment: One commenter expressed concern that OIG, in its Proposed Rule, both adopted State law definitions for types of criminal conduct, including “abuse of patients,” “fraud,” “misappropriation of patient funds,” and “neglect of patients,” and provided examples of the essential elements of the crime. The commenter stated that the definitions are “overly expansive and inappropriate” and that “[e]ach MFCU must be able to defer to its state law definitions and not be expected to comply with overarching federal definitions.” The commenter recommended that OIG delete all of the proposed language in each of the definitions following the reference to State law.

Response: We proposed to define “fraud” as any act that constitutes criminal fraud under applicable State law including the deception, concealment of material fact, or misrepresentation made by a person intentionally, in deliberate ignorance of the truth or in reckless disregard of the truth.

It was not our intent to require States to comply with an overarching definition, and this is the reason we defer to the definitions contained in State law. The purpose in describing the elements of the crime was to provide guidance on those elements that are typically contained in State law.

Therefore, as specified in § 1007.1 of our regulations, we are finalizing the definition of fraud by retaining the first sentence of the proposed definition of fraud as contained in the Proposed Rule but have revised the language in the second sentence to clarify that the crime “may” include the noted elements. We have also made a technical change in eliminating the phrase “by a person” since the crime could be committed by an organization as well. We have made similar revisions to the other definitions that rely on State law definitions: “abuse of patients or residents” and “neglect of patients or residents.”

Comment: Concerning the proposed definition of “abuse of patients,” one commenter raised three concerns regarding the definition. First, the commenter observed that the reference to abuse of a “patient” is too narrow, since Unit authority may extend to residents of facilities who are not considered “patients” under State law. The commenter recommended that the definition be expanded to include “patient and/or resident of a care facility” and that, whenever the term “patient” is used throughout the regulation, the word “resident” be added as well. Secondly, the commenter believed that the term “willful” is problematic for States that define “abuse” as conduct that is not willful, such as reckless conduct. Finally, the commenter observed the wide variation in what constitutes abuse under State law and recommended that we eliminate the examples entirely in the definition.

Response: We agree with the comments regarding the definition of abuse. Under section 1903(q)(4) of the Act—as implemented by § 1007.11(b)(2) of this rulemaking—the Units may receive FFP for abuse or neglect cases arising in “board and care facilities.” Expanding the definition to include abuse of “residents,” in addition to “patients,” is consistent with the statutory definition of “board and care facility” in section 1903(q)(4)(B) of the Act. Adding the reference to “residents” is also consistent with the Units' longstanding lack of statutory authority to receive FFP for the investigation and prosecution of cases of patient abuse or neglect that occur in the home or other nonfacility settings.

We have also revised the definition to eliminate reference to “willful” conduct and to provide examples of what constitutes abuse.

We have made a similar revision to include both patients and residents in the definition of “neglect of patients” to § 1007.11(b) as well, which describes a Unit's responsibilities regarding abuse or neglect.

Comment: One commenter expressed a concern that the proposed definition at § 1007.1 of “data mining” did not consider the analysis of data that might occur during the course of an investigation, rather than as part of activities designed to identify new potential cases. For example, the commenter stated that in the course of investigations, it is often necessary to conduct a “peer comparison” between or among providers and present that information to a jury or other fact finder for the purpose of demonstrating what is usual and customary. The commenter stated that the activities related to such analysis should be considered as eligible for FFP without receiving a waiver from OIG to conduct data mining.

Response: We agree with the commenter that the use of data analysis in an ongoing case should not be subject to the prohibition on FFP for data mining and that Units need not receive a data mining waiver to conduct such activities.

We believe, however, that the existing regulatory definition permits such case-related activities by describing those activities that require a data mining waiver from OIG to be limited to:

By limiting the activities needing a waiver to those which involve the “sorting [of] Medicaid or other relevant data,” we believe that the existing definition excludes the type of case-related activities referred to by the commenter. This position is consistent with the 2013 preamble to the rulemaking establishing the data mining waiver authority. In a response to a comment, we stated:

Comment: One commenter agreed that the proposed definition of “director” is beneficial but suggested that the role of the director would be clarified, and the working relationship between the Unit and OIG improved, by amending the definition to also state that the director “serves as the chief liaison with OIG for all Unit-related activities.”

Response: We agree with the commenter about the importance of maintaining effective working relationships between the Units and OIG. However, while the director plays the role of liaison with OIG in most Units, we decline to modify the definition to require this, as other Units may choose to designate another individual or individuals to play that role. Also, even if the director plays the role of primary liaison, some Units may choose to designate another individual to be the liaison to OIG for particular Unit activities, such as investigation-related activities.

Comment: One commenter objected to the definition of “health care facility,” for purposes of the Units' investigations of patient abuse or neglect, as a provider that “furnishes . . . services to four or more persons unrelated to the proprietor.” The commenter suggested that the definition be revised to include providers who furnish services to two or more persons. The commenter acknowledged that facilities with fewer than four residents could be investigated under the “board and care” authority, but that the authority for board and care cases is optional, and the authority to investigate patient abuse or neglect at a health care facility is mandatory.

Response: We do not believe it is appropriate to establish our own definition of health care facility for purposes of the MFCU program. The definition of health care facility was adopted from the CMS definition, contained in 42 CFR 447.10(b), of a “facility” as “an institution that furnishes health care services to inpatients” and 42 CFR 435.1010, which defines an “institution” as “an establishment that furnishes (in single or multiple facilities) food, shelter, and some treatment or services to four or more persons unrelated to the proprietor . . . .”

We therefore decline to revise the definition of health care facility.

Comment: One commenter expressed concern that the proposed definition of “program abuse” at § 1007.1, in providing examples such as an “unnecessary cost to Medicaid” and “reimbursement for services that are not medically necessary,” blurs the line between administrative misconduct on the one hand and criminal conduct on the other.

Response: We agree with the commenter that the examples cited do not clearly illustrate the distinction between administrative and criminal misconduct. In revising the definition, we are not including the examples. We also simplified the definition, as suggested by the commenter, and revised the definition to refer to civil or criminal fraud under “State law,” rather than “Federal and State law,” since the Units' statutory function extends only to “violations of all applicable State laws . . . .”

Comment: One commenter stated that the proposed definition of “provider” insufficiently addresses the wide range of providers whose actions fall within the scope of the Units' authority. The commenter suggested that, along with several other definitions contained in the Proposed Rule, the definition be expanded to incorporate definitions of “provider” that would be accepted under a State's laws.

The commenter also suggested that the definition be expanded to include “prescribing” physicians, in addition to “ordering” or “referring” physicians, since State law may authorize the ability to prescribe as distinct from ordering or referring.

Response: We agree that the definition for “provider” should be expanded to reflect varying definitions under State law for health care providers, as well as to clarify that it applies to “prescribing physicians” as one example of a provider. We are therefore expanding the definition of provider to include “any individual or entity that may operate as a health care provider under applicable State law” as well as “an individual or entity that is required to enroll in a State Medicaid program, such as an ordering, prescribing, or referring physician.”

Comment: Two commenters expressed concern that the definition of provider be expanded to specifically reference providers who provide items or services in a managed care setting, as well as managed care companies themselves, which do not provide items or services directly but instead provide management services for other providers. The commenters suggested that the definition of provider refer specifically to managed care plans as well as individuals or entities that provide items or services in a managed care network and who subcontract with those plans.

Response: With respect to providers operating in a managed care network, we agree and have clarified in the definition that a provider includes individuals and entities that are part of a managed care network. We had intended in the Proposed Rule that such providers were included as “an individual or entity that furnishes items or services for which payment is claimed under Medicaid,” but have added the specific reference to managed care organizations (MCOs) and other contracting entities because of the increasing role of managed care networks in providing Medicaid items and services.

With respect to MCOs themselves, we decline to expand the definition to specifically mention MCOs as a type of provider. While MCOs play an integral and growing role in most State Medicaid programs, they do not appear to be universally regarded as a type of “provider.” However, MCOs may play varying roles depending on the terms of their contract with the State. To the extent that an MCO's actions (or those of other entities or persons) are implicated in the potentially fraudulent submission of claims by or on behalf of a Medicaid provider, they may be the subject of a MFCU investigation or prosecution, regardless of their own status as a provider.

Comment: One commenter objected that the regulation would expand the definition of provider to include ordering and referring physicians, arguing that this is not appropriate, since such physicians do not participate in the program, may render services free of charge, and have little or no reason or opportunity to game the system. Therefore, the commenter expressed the view that these physicians should not be subject to the administrative requirements of the program.

Response: The definition of provider describes those individuals or entities who may be subject to an investigation, but does not expand the current authority of the Units. The MFCU mission is the “investigation and prosecution of violations of all applicable State laws regarding any and all aspects of fraud in connection with . . . any aspect of the provision of medical assistance and the activities of providers of such assistance . . . .” To the extent that an ordering or referring physician violates State law regarding Medicaid fraud, the Units currently have the authority to include ordering or referring physicians as the subject of an investigation or prosecution.

MFCU investigative authority is not limited to participating providers or to individuals who may have an obvious financial incentive to defraud the program. Fraud is an intent-based crime, so an investigation or ultimate prosecution would reveal whether an ordering or referring physician had the requisite intent to commit fraud. By excluding ordering or referring physicians from the definition of provider, Units might be unable to hold responsible under State law those individuals responsible for a fraudulent claim to the program.

We therefore do not believe that the comment warrants a change to the definition of “provider.”

Comment: Two commenters expressed concerns with the proposed requirement at § 1007.5(b)(3) that all Units “[h]ave the headquarters office and any field offices each in their own contiguous space.”

One commenter stated that, while this arrangement is a best practice for Unit operations, “some Units may need special exceptions based on the history of their respective Units and unique difficulties recruiting employees.” The commenter suggested that OIG grant an exception to existing Units with other arrangements on either a temporary or permanent basis.

Another commenter requested that the proposed rule be rewritten to allow flexibility in the physical location of Unit employees while still requiring effective, multidisciplinary collaboration. The commenter requested that the wording of § 1007.5(b)(3) be revised to require that Unit offices be in their own contiguous space, “or otherwise ensure that all employees have a work location arrangement that allows for real-time collaboration with the other professional disciplines within the Unit, that non-Unit personnel have no unauthorized access to Unit files, and that Unit personnel exert 100 percent of their efforts on Unit business.” Alternatively, the commenter requested, similar to the request of the other commenter on this topic, that existing Units with noncontiguous space arrangements be granted an exception when the arrangement allows for effective collaboration.

Response: Our purpose in proposing a requirement regarding physical office space was to ensure that Units exist as a “single, identifiable entity” and to reflect our observation that Units generally exist in contiguous space that is separate from the other parts of the Office of Attorney General or other parent organization. As stated in the Proposed Rule, we believe that having Unit offices in a single space contributes to the team concept of the Units and helps to ensure that employees are devoted exclusively to the mission of the Unit.

We recognize, however, that there can be extenuating circumstances for locating staff in noncontiguous space when there are advantages for Unit operations in such an arrangement. Therefore, as suggested by both commenters, we have provided Units with the opportunity to demonstrate to OIG that certain employees warrant a different arrangement. OIG will review arrangements and approve or disapprove of exceptions to the contiguous space requirement based on a demonstration by the Unit that circumstances warrant a different arrangement for certain employees. We have not provided a “grandfathering” process, but we are prepared to review any existing arrangements that do not comport with a single space requirement.

Therefore, we have revised the requirement in § 1007.5 to specify that the headquarters office and any field offices must have their own contiguous space unless the Unit demonstrates to OIG that circumstances warrant a different arrangement for certain employees.

In considering exceptions to the space requirement, OIG would consider favorably the following situations as examples of when employees could be located in noncontiguous space:

• Employees working at home on a temporary or long-term basis.

• Employees sharing space with OIG or other agencies that provide advantages to the Unit's collaboration with those agencies.

• Employees assigned to small offices, including field offices, where space is limited and the only available office space is not contiguous.

Comment: One commenter suggested several clarifications, not contained in the sections of the Proposed Rule proposed to be modified by OIG. Specifically, the commenter requested that we clarify the current regulation at § 1007.9(b).

The commenter expressed that the language of the paragraph should be revised to clarify that (1) the phrase “Medicaid agency” is intended to refer to the agency in the same State in which the Unit exists, (2) the proscription on the Medicaid agency to not “review or overrule the referral of a suspected criminal violation” be expanded to refer to “decisions” of the Unit in addition to referrals, and (3) the Medicaid agency's and the Unit's respective roles be clear and distinct, particularly with regard to decisions as to “which law enforcement or prosecutorial authority is best for a given matter.”

Response: We generally agree with the substance of the commenter's concerns but decline to make the suggested revisions.

First, in the Proposed Rule OIG did not propose to modify the paragraph of the regulation relating to the role of the Medicaid agency in reviewing the activities of the Unit, so the comment is beyond the scope of the Proposed Rule.

Secondly, in referring to the “Medicaid agency” throughout the regulation, OIG is referring to the Medicaid agency for the same State in which the Unit exists, not that of another State. We do not believe that text of the regulation needs to be modified to clarify this.

With respect to whether the proscription on interference by the Medicaid agency should refer to “decisions” of the Unit in addition to “activities,” we agree that the Medicaid agency does not have the authority to interfere with decisions pertaining to the investigation or prosecution of a Unit's cases. On the other hand, we note that there may be administrative actions in which both the Unit and Medicaid agency are both involved. For example, a Unit as part of a criminal or civil case may make a decision or recommendation regarding an administrative remedy or action. Such decisions may in fact be subject to some type of review by the Medicaid agency. As another example, for those Units with authority to conduct data mining under § 1007.20, the decision of whether to develop a data mining algorithm is subject to review and input by the Medicaid agency.

We therefore decline to expand the proscription on interference by the Medicaid agency to include all “decisions” by the Unit.

Finally, with regard to the respective roles of the Medicaid agency and the Unit, we agree that law enforcement decisions pertaining to the appropriate investigative and prosecutorial authority for a particular case are the province of the Unit, not the Medicaid agency. We believe this separation of roles is widely understood in the MFCU and State agency community and is how OIG interprets the existing language of § 1007.9(b).

Comment: Several commenters observed the important role of MCOs in those States that provide Medicaid services in a managed care setting and suggested that the section of the regulation addressing the relationship of the MFCU to the Medicaid agency, 42 CFR 1007.9, be expanded to describe the role of MCOs. One commenter observed that activities to combat Medicaid fraud, waste, and abuse would be more effective if Units collaborated with MCOs on a routine basis to share information. Another commenter, noting the important role of MCOs, suggested that the proposed regulation's provision regarding regular communication between the Unit and the Medicaid agency be expanded to include managed care plans. The commenter specifically requested that MCO Special Investigation Units (SIUs) be permitted to attend the meetings between the Unit and the Medicaid agency, since SIUs can contribute valuable information to the meetings.

Response: We agree about the critical role of MCOs in those States that have chosen to provide Medicaid services in this manner. We also believe it is a best practice that the Unit or State program integrity officials collaborate with the MCO SIUs and that SIU officials attend regular meetings on referral issues. However, we are also mindful that States should have the discretion to define the relationship with MCOs within the confines of existing law and regulation. States should have the ability to choose the manner in which the Unit and Medicaid program integrity unit communicate with the MCOs.

Comment: Another commenter requested more narrowly regarding § 1007.9 that the written agreement between the Unit and the Medicaid agency include a provision regarding how the Unit will receive referrals of potential fraud from MCOs either directly or through the Medicaid agency.

Response: Medicaid regulations pertaining to MCOs, 42 CFR 438.608(a)(7), require that MCOs, under the terms of their contracts with the Medicaid agency, refer any case of potential fraud, waste, or abuse to the Medicaid agency's program integrity unit or any potential fraud directly to the Unit. Also, under 42 CFR 455.21, the Medicaid agency must refer all cases of suspected provider fraud to the Unit.

Consistent with these requirements, we agree that the inclusion of a provision in the written agreement between the Unit and the Medicaid agency regarding referrals from MCOs would be consistent with other requirements and would be an appropriate addition to the MFCU regulations and the CMS companion regulation. We have thus modified the rules to include such a provision.

Comment: One commenter requested that, to effectuate MCO involvement in the payment suspension process, payment suspension information be communicated to MCOs in a timely manner. The commenter also requested that clarification of MCO responsibilities with respect to payment suspension be included in this final rule.

Response: These suggestions are outside the scope of this rulemaking. State Medicaid agencies, not the Units, suspend payments.

Comment: One commenter stated that § 1007.11(a)(3), in defining applicable State laws to include both criminal statutes “as well as civil false claims statutes or other civil authorities,” seems misplaced, affecting the flow of the description of the fraud-focused mission of the Units. The commenter recommended instead that the regulation, in describing the broad function of the Units in paragraph (a), be expanded to state “[t]he Unit must conduct a statewide program for investigating and prosecuting (or referring for prosecution) violations of all applicable State laws, including criminal statutes as well as civil false claims statutes or other civil authorities . . . .”

Response: We agree and have modified the rule.

Comment: A commenter expressed concern about language in the Proposed Rule that would make mandatory the review of complaints of “misappropriation of a patient's funds . . .” when that review is currently optional for the Units. The commenter noted that the current regulation at § 1007.11(b)(1) states that the “Unit will also review complaints alleging abuse or neglect of patients in health care facilities . . .,” but the Unit “may review complaints of the misappropriation of patient's private funds in such facilities.” In the Proposed Rule, those two clauses are combined and would require in paragraph (b)(2) that the Unit “must also review complaints alleging abuse or neglect of patients, including complaints of the misappropriation of a patient's funds, in health care facilities receiving payments under Medicaid.” The commenter expressed concern that making financial cases mandatory “may stretch already scare resources within the Units.”

Response: We have accepted the comment and have retained language in the final rule to the effect that Units “may” review complaints of misappropriation of a patient's or resident's private funds. In addition to the concern about workload, we believe this language is consistent with the changes we are making to the definition of abuse of patients or residents, where we have recognized the existence of differing State legal definitions of what constitutes abuse.

Although we have retained the option for financial misappropriation cases, we continue to believe that financial misappropriation is a significant issue and that Units should continue to devote resources to such cases. Financial misappropriation may arise when family members or others are granted power of attorney for a patient or resident and abuse the patient's or resident's trust by diverting funds to their own or another's benefit. Financial misappropriation may arise in conjunction with physical abuse or may occur in isolation.

Comment: Several commenters expressed policy concerns about the expansion of MFCU authority in board and care facilities, which typically do not participate in State Medicaid programs or receive Medicaid funding.

Response: The authority to investigate patient abuse or neglect in non-Medicaid board and care facilities is a feature of the Ticket to Work and Work Incentives Improvement Act of 1999. The addition to the MFCU regulations merely codifies that statutory requirement. The policy concerns raised by the commenters are therefore outside the scope of this rulemaking.

Comment: In the Proposed Rule, we proposed at § 1007.11(a), (b)(1), (b)(3), (b)(4), (c), and (d) to replace the word “will” with “must” to highlight the mandatory nature of the responsibilities of a Unit. A commenter expressed reservations about this change and requested that we retain the term “will” in the paragraphs. The commenter stated that the word “will” would make the responsibilities of the Unit sufficiently clear. The commenter also expressed that the term “will” would provide the appropriate discretion for a Unit in determining whether to accept a referral, thus promoting the Unit's efficient use of resources.

Response: We have retained the term “will” in § 1007.11 and, for consistency, in other parts of the regulation, including § 1007.13, for staffing requirements. We did not intend to propose a revision to the mandatory nature of a Unit's responsibilities and agree that retaining the term “will” would avoid confusion in this regard.

Comment: One commenter noted that proposed § 1007.11(c) addresses the responsibilities of the Units to recover overpayments or refer the overpayment recovery to an appropriate “State” agency. The commenter noted that there are governmental programs in various States which process and expend Medicaid dollars at the local level (county or city). For instance, some States operate single- or multi-county special needs programs or mental health programs. If an overpayment is identified in one of these county-administered programs, for example, the responsibility for the recovery may more appropriately rest with county officials rather than State officials. The commenter suggested that the last clause in § 1007.11(c) should include “or refer the matter to an appropriate agency for collection” [emphasis added].

Response: We agree with the suggestion and have modified the regulation text.

Comment: One commenter expressed a technical concern with a longstanding provision in the regulations at § 1007.11(d) that requires Units, for cases that are tried by non-Unit prosecutors, to provide the prosecutors with “the fullest opportunity to participate in the investigation from its inception.” The commenter, while not disputing the importance of cooperating with non-Unit prosecutors, suggested that this section, as written, is not consistent with patient confidentiality obligations as required by performance standards. The commenter suggested that Units, consistent with those obligations, must have the discretion to determine what cases will be investigated and when to notify the prosecuting authority to control the flow of confidential information outside of the Unit. Therefore, the commenter suggested that the original regulation language of § 1007.11(d) be rewritten to eliminate the language about participation in the investigations from their inception: Specifically, the commenter stated that the language should specify that where a prosecuting authority other than the Unit is to assume responsibility for the prosecution of a case investigated by the Unit, the Unit will ensure that those responsible for the prosecutorial decision and the preparation of the case for trial are provided all necessary assistance.

Response: While we generally agree with the commenter's position that the Units must have the discretion to determine what cases will be investigated and when to notify an outside prosecuting authority, we cannot make the requested change, as we did not propose to modify this provision. We also do not believe the suggested change is necessary to address the commenter's concern. While the current provision permits non-Unit prosecutors the fullest opportunity to participate in the MFCU's investigation, it is the Unit's responsibility to determine if that participation is appropriate or would interfere with the effective investigation of a case. We thus believe that the current provision affords the Unit discretion in determining when to involve prosecutors, as long as there is full cooperation.

Comment: One commenter expressed concern with a provision of the Proposed Rule that requires a Unit to disclose case information to Federal investigators and attorneys not involved with a particular case. Proposed § 1007.11(e)(1), similar to the existing requirement contained in paragraph (e), states that the Unit, if requested, will make available to OIG investigators and attorneys, other Federal investigators, and prosecutors all information in the Unit's possession concerning investigations or prosecutions conducted by the Unit.

Existing paragraph (e) reads the same, except that it does not clarify that information be provided “if requested.”

The commenter agreed that case information should be shared with Federal investigators and attorneys working jointly on a case, but expressed concern about broadly requiring the Unit to disclose case information to Federal officials who have no involvement in the case. The commenter noted that case information could include confidential grand jury or other information with legal restrictions on its disclosure. Therefore, the commenter suggested that proposed § 1007.11(e)(1) should be revised to state that the Unit, if requested, will make available to OIG investigators and attorneys, or other Federal investigators and prosecutors, on the case, all information in the Unit's possession concerning investigations or prosecutions conducted by the Unit.

Response: We do not agree that a revision is necessary to the longstanding requirement contained in § 1007.11(e) that Unit information be shared with Federal investigators and attorneys. We agree there could be State grand jury and other information that, because of criminal law restrictions on the use of the information, may not be disclosed to Federal investigators and attorneys who are not involved with a case. However, the Unit, OIG, and DOJ have contemporaneous jurisdiction for all allegations of Medicaid provider fraud. While unusual, we believe there could be situations in which OIG or DOJ personnel would have a legitimate need to seek information about an ongoing investigation or prosecution.

Comment: At proposed § 1007.11(e)(1) and (2), Units are required to make all information pertaining to Medicaid fraud available to Federal investigators, prosecutors, and OIG attorneys, and subsequently the Unit must coordinate with such officials on any Federal and State investigations or prosecutions involving the same suspects or allegations. One commenter noted that MCOs are very likely to possess information to assist in fraud detection and requested that Units be required to make information available to MCOs during fraud investigations. The commenter also requested that MCOs be included in the coordination of investigations and prosecutions by asking prosecutors to include MCO encounter information, and not only State fee-for-service claims, in investigated and/or charged conduct. In addition, the commenter asked for clarification as to the disposition of MCO funds recovered as a result of investigations, civil suits, and prosecutions.

Response: We decline these suggestions. We have observed that MCOs in many States are successfully included in the sharing of information about ongoing and potential fraud cases and believe that this participation by MCOs is a best practice. However, MCOs are private, nongovernmental entities, and States should have the ability to restrict the sharing of information with them. The suggestions about including MCO encounter information in prosecutions and the disposition of MCO recoveries are beyond the scope of this regulation.

Comment: One commenter noted that proposed § 1007.11(e)(2) does not clearly state what it means to “coordinate with” Federal investigators, Federal attorneys, and Federal prosecutors. The commenter noted that coordination can include deconfliction of case lists and joint investigative activities, including avoiding duplication of efforts in joint cases.

Response: We agree with this comment and believe that the commenter has described appropriate examples of coordination—deconfliction of case lists and joint investigative activities. We decline to further revise § 1007.11(e) beyond the expectation that the Unit establish a practice of regular meetings or communication with OIG investigators and Federal prosecutors. Our intention is for Units to have flexibility to coordinate in a manner that is appropriate for that State, as coordination may look different depending on variables such as the type of case, size of the State, or the presence or absence of Federal partners in the State.

Comment: Another commenter noted ambiguity in the language of proposed § 1007.11(e)(2) where we proposed that the Unit will coordinate with OIG investigators and attorneys, other Federal investigators, and prosecutors on any Unit cases involving the same suspects or allegations.

Specifically, the commenter was unclear as to which “prosecutors” are the focus of this provision. The commenter also believed that OIG should be permitted latitude to manage at its discretion those circumstances in which OIG's resources are limited and other Federal agencies are summoned to assist or supplement assistance as appropriate. To address these comments, the commenter recommended that § 1007.11(e)(2) be revised to state that the Unit will coordinate with OIG investigators and OIG attorneys, as OIG and the Unit deem appropriate, joint activities involving other Federal investigators and Federal prosecutors on Unit cases and Federal cases that involve the same suspects, providers, or allegations.

Response: We agree that the proposed provision does not make clear to which prosecutors the provision refers. We intended to specify “Federal” prosecutors and have modified the regulation text at paragraph (e)(2) as well as paragraph (e)(1) to remove the ambiguity. We also added wording to paragraph (e)(2) to improve clarity. However, we did not modify the text in paragraph (e)(2) to include the commenter's suggested language regarding “as OIG and the Unit deem appropriate” because we believe that considering the appropriateness of involvement in a case would be part of coordinating. We are also reluctant to limit coordination to “joint activities” involving the same suspects or allegations because we believe Units need to coordinate with their Federal counterparts even on cases not being worked jointly. Thus, we are modifying paragraph (e)(2) to state that the Unit will coordinate with OIG investigators and attorneys, or with other Federal investigators and prosecutors, on any Unit cases involving the same suspects or allegations that are also under investigation or prosecution by OIG or other Federal investigators or prosecutors [emphasis added].

Comment: Proposed § 1007.11(e)(3) specifies that a Unit establish a practice of regular meetings or communication with OIG investigators and Federal prosecutors. One commenter recommended that the SIUs of MCOs be permitted to attend these meetings, or that similar meetings be held with the SIUs of MCOs. The commenter also requested that at § 1007.11, paragraphs (a) through (c), MCOs also be included under references to “Medicaid” for which the Unit is responsible.

Response: We believe that attendance by MCOs at meetings may be a best practice, but we decline to identify in regulation those participants required at particular meetings. As noted previously, MCOs are private, nongovernmental entities, and States should have the ability to restrict the sharing of information with them.

Comment: One commenter noted that proposed § 1007.11(e)(5) requires the Unit to “establish written procedures” but leaves unclear the level of detail or depth of such written procedures. The commenter expressed concern about this paragraph posing a potential burden. To permit greater discretion, the commenter recommended revising the regulation to require Units to establish “policy” rather than written procedures.

Response: We agree with the suggestion that Units establish “policy” rather than the more prescriptive “written procedures.” We have revised the paragraph accordingly. This revision will reduce burden on Units and enhance Unit flexibility.

Comment: One commenter expressed support for proposed § 1007.11(g)(3) for the accommodation granted in allowing Units to transmit the requested information “as soon as practicable” due to the specified delays. However, the commenter observed that Units have encountered delays that are not due directly to the “[receipt of] . . . information” from the “sentencing court,” but that remained beyond the Unit's control or capacity. For example, long queues at court clerks' offices, sometimes in locations far away from the Unit, can compromise a Unit's ability to communicate effectively and timely with court staff, which can further delay the Unit's efforts to finalize sentencing-related dispositions. As such, the commenter requested that the term “court” replace the term “sentencing court” so that the paragraph states that such information will be transmitted to OIG within 30 days of sentencing, or as soon as practicable if the Unit encounters delays, such as in receiving the necessary information from the court [emphasis added].

Response: OIG agrees that Units could encounter delays that are more broadly described as “court delays” rather than the more specific delays in receiving information from the “sentencing court” and accepts the commenter's suggestion. However, we do not intend for delays “in receiving the necessary information from the court” to be an example of a possible delay, but to be the only acceptable reason that transmitting information to OIG should be delayed. Therefore, we are replacing the term “sentencing court” with “court,” but we are not including the phrase “such as” as part of the paragraph.

Comment: One commenter suggested that, in addition to modifying the attorney role in § 1007.13(b)(1) to more specifically convey the prosecution and advisory role of Unit attorneys, OIG should revise the description of the investigator role as well. Specifically, the commenter suggested that we clarify that investigators should be capable of conducting investigations of Medicaid fraud and patient abuse and neglect matters.

Response: We agree with the comment and have modified the final regulatory language.

Comment: One commenter expressed concern that the proposed minor change at § 1007.13(b)(2) concerning the qualifications of auditors did not include information on how the auditors would perform operational audits of health care entities.

Response: MFCU auditors do not conduct operational audits of health care entities. Units are restricted at § 1007.19(e)(1) from receiving FFP for expenditures attributable to cases involving “program abuse or other failures to comply with applicable laws and regulations.” Therefore, we decline to make modifications to the rule to address operational auditing.

Comment: A commenter expressed concern about the limitation in the proposed rule at § 1007.13(g)(2) that a Unit may not “rely on individuals not employed directly by the Unit for the investigation or prosecution of cases.” The commenter asked that we clarify that a Unit “may hire special counsel or other investigative or litigation support services to work jointly with the Unit to assist in specific, discrete investigations or cases, where the Unit can demonstrate that additional assets or expertise may be needed for the discrete case.”

Response: We agree with the concern that Units should be able to hire experts to support the investigative and prosecutorial work of the Units, as long as the experts do not actually conduct investigations and prosecutions of Medicaid fraud or of patient or resident abuse or neglect. We believe, however, that this need is addressed by proposed paragraph (g)(1), which stated that the Unit may employ, or have available through consultant agreements or other contractual arrangements, individuals who have forensic or other specialized skills that support the investigation and prosecution of cases.

We believe that the proposed regulatory language provides the right distinction that Units may not “rely” on contractors to investigate or prosecute cases, but may have contracts or consultant agreements with experts who may “support” the investigation and prosecution.

Comment: Proposed § 1007.17(a)(2)(iv) states that Units are to submit statistical reports on staffing, caseload, and outcomes, including monetary recoveries. A commenter made technical comments on the definitions of the types of monetary recoveries reported.

Response: While we appreciate the comments, we do not believe that addressing detailed technical comments about statistical reporting is appropriate in the rule itself. We will consider the commenter's concerns outside of the rulemaking.

Comment: Proposed § 1007.17(b)(2) requires the Units to provide “other information OIG deems necessary or warranted.” One commenter noted that in the past the Units have been asked to provide additional information to OIG, but the requested data is not routinely kept by the Units. The commenter also noted that while not every contingency can be predicted, a request for “other information” without prior notice is cumbersome and potentially void of a high level of accuracy. The commenter suggested adding language that advance notice would be provided to the Unit for other information OIG deems necessary and warranted.

Response: While we decline to accept this level of prescription in the final rule, we agree about the need to provide Units advance notice of information requests. OIG needs to maintain the ability to collect information from the Units but will always strive to provide advance notice and to be sensitive to requesting data that is not routinely kept by the Units.

Comment: A commenter endorsed the approach of the Proposed Rule to limit those situations, other than through “data mining,” in which FFP would be prohibited for the identification of potential fraud cases. The Proposed Rule accomplished this by proposing to modify the language in § 1007.19(e)(2), which currently prohibits FFP for “efforts to identify [other than through an approved data mining waiver] situations in which a question of fraud may exist, including the screening of claims and analysis of patterns of practice . . .” with “efforts to identify situations of fraud . . . by the screening of claims and analysis of patterns of practice . . .” [emphasis added]. The purpose of the change was to acknowledge ways in which a Unit may identify possible fraud that would not interfere with activities of the Medicaid agency, such as undercover operations. The commenter also suggested that we further clarify the issue by adding the following sentence to this preamble:

Response: We agree that the suggested additional sentence correctly describes those activities to identify potential fraud, in addition to an approved data mining program, that would be permissible for purposes of receiving FFP, and we adopt the sentence here. This clarification is consistent with the proposed changes to the subsection and does not require a change to the text of the regulation.

Comment: A commenter expressed concern with the longstanding prohibition, modified in the Proposed Rule at § 1007.19(e)(5), that a Unit may not receive FFP for cases “involving a beneficiary's eligibility for benefits, unless the suspected fraud also involves conspiracy with a provider.” The existing regulation similarly prohibits FFP for the “investigation or prosecution of cases of suspected beneficiary fraud not involving suspected conspiracy with a provider.” The commenter expressed that the language in § 1007.19(e)(5) is too limiting regarding the types of permissible beneficiary fraud cases because the word “suspected” modifies the word “fraud.” The commenter observed that there are cases that involve conspiracy between a beneficiary and provider but that may involve suspected conduct other than fraud, such as alleged identity theft. The commenter suggested that the prohibition be modified to refer to conspiracy involving “joint criminal conduct” rather than narrowly to “fraud.”

Response: We decline to make the proposed revision regarding the reference to “suspected fraud.” We agree that identity theft (or other activities not strictly involving fraudulent billing to the program) could be identified as integral to, or evidence of, a conspiracy between a beneficiary and provider. However, the underlying conduct, consistent with the authority of the Unit to receive FFP, must involve “fraud.” As long as the other criminal conduct identified as part of the conspiracy, such as identity theft, has a connection to the fraud allegations, the Unit may receive FFP for the investigation and prosecution of the case. To promote clarity, we have amended the provision to refer to the investigation or prosecution of “fraud” cases involving a beneficiary's eligibility for benefits, unless the suspected fraud “cases” also involve conspiracy with a provider.

Comment: One commenter suggested that the language proposed in § 1007.21(a), regarding OIG's determination that a claim or portion of a claim for grant funding is not allowable, should be consistent with the contents of the Federal regulation to which it refers, 42 CFR 430.42(a), by clarifying that OIG's determination should be made “promptly.”

Response: We agree and have included the word “promptly” in the final regulation. The proposed changes were intended to mirror the disallowance procedures in 42 CFR 430.42(a), including that OIG's determination be made “promptly.”

This final rule incorporates most of the provisions in the Proposed Rule but with some substantive and technical changes to the regulatory text that are described in this section and in section II above.

We are finalizing, with certain revisions described in section II, all of the proposed definitions. We made revisions to the definitions of several kinds of conduct, such as “fraud” and “abuse of patients or residents,” to more clearly adopt those definitions of conduct as contained in applicable State laws. We also similarly expanded the definition of “provider” to adopt applicable State law, as well as to reference managed care and prescribing physicians. We also expanded references to abuse and neglect of patients to include “residents.”

We are finalizing the characteristics of what it means to be a single, identifiable entity at § 1007.5. We included a clarification to the requirement that the headquarters office and any field offices should each have their own contiguous space, unless a Unit demonstrates to OIG that circumstances may warrant a different arrangement for certain employees.

We are finalizing the proposed changes to the prosecutorial authority requirements of a Unit at § 1007.7, with one additional modification. At § 1007.7(b), we are finalizing the requirement for a Unit to establish formal written procedures for referring cases of patient or resident abuse and neglect prosecutions, in addition to fraud cases, to the appropriate prosecuting authority, when there is no State agency with statewide authority and capability for patient or resident abuse prosecutions. Similarly, we are making a technical amendment to § 1007.7(a) to clarify that if a Unit is located in the office of the State Attorney General or another office with statewide prosecutorial authority, it must have the authority to prosecute individuals for violations of criminal laws with respect to patient or resident abuse and neglect in addition to fraud.

We are finalizing the provisions pertaining to the Unit's relationship and agreement with the Medicaid agency at both § 1007.9 and the companion CMS regulation at § 455.21(c), with one additional provision. As described in detail in section II, we are adding a new paragraph at § 1007.9(d)(3) and at § 455.21(c)(3) requiring the Unit and the Medicaid agency to agree to establish procedures by which the Unit will receive referrals of potential fraud from MCOs, as applicable, either directly or through the Medicaid agency.

We are finalizing a number of provisions proposed, some with certain modifications, related to the duties and responsibilities of a Unit found at § 1007.11. However, for reasons explained above, we are not finalizing the proposal to make mandatory the review of complaints of misappropriation of patients' or residents' funds and have retained language in the final rule to continue that authority as optional. We are also not finalizing the word “must” to describe a Unit's responsibilities at § 1007.11(a), (b)(1), (b)(3), (b)(4), (c), and (d), and are retaining the word “will” in the final rule.

We are finalizing the provision to clarify that applicable State laws pertaining to Medicaid fraud include criminal statutes as well as civil false claims statutes and other civil authorities, but we have incorporated the clarification into § 1007.11(a) in the final rule, rather than in the proposed paragraph (a)(3). We are finalizing the provision at § 1007.11(c), with a slight modification, to clarify that when a Unit discovers that overpayments have been made to a provider or facility, the Unit will either recover the overpayment as part of its resolution of a fraud case or refer the matter to the appropriate agency for collection.

We are finalizing provisions pertaining to coordination with Federal investigators and attorneys at § 1007.11(e), with slight modifications to the proposed language. At paragraph (e)(5), we have modified the final rule such that a Unit will establish written policy consistent with paragraph (e), rather than establish written procedures.

We are finalizing a provision at § 1007.11(g) requiring a Unit to transmit to OIG, for purposes of excluding convicted individuals and entities from participation in Federal health care programs under section 1128 of the Act, pertinent documentation on all convictions obtained by the Unit. We made a minor modification to paragraph (3) requiring transmission of information within 30 days of sentencing, or as soon as practicable if the Unit encounters delays in receiving the necessary information from the “court,” rather than the “sentencing court” as was proposed.

We are finalizing all of the provisions in the Proposed Rule related to the staffing requirements of a Unit at § 1007.13, with the following modifications. We are finalizing clarifications at § 1007.13(b) to the qualifications of attorneys, auditors, and investigators, but we made one modification to paragraph (3) to specify that the investigators be capable of conducting investigations of health care fraud and patient or resident abuse and neglect matters. Additionally, we are not finalizing the use of the word “must” to describe a Unit's staffing requirements at § 1007.13(c), (d)(1), (d)(4), and (h) and have modified the final rule to use the sufficiently prescriptive word “will.” For consistency with the other paragraphs, we have modified paragraph (b) to use the word “will” rather than the original rule's use of “must.”

In § 1007.17, to reduce burden on the Units, we are eliminating the specific requirement of providing an “annual report” to OIG. However, we continue to receive information from the Units that allows OIG to evaluate the Unit's performance for purposes of recertification.

Finally, we have made editorial and other nonsubstantive changes to the final rule, where appropriate, to clarify our meaning.

We have examined the impact of this rule, as required by Executive Order 12866 on Regulatory Planning and Review (September 30, 1993), Executive Order 13563 on Improving Regulation and Regulatory Review (January 18, 2011), the Regulatory Flexibility Act (RFA) (September 19, 1980, Pub. L. 96-354), section 1102(b) of the Social Security Act, section 202 of the Unfunded Mandates Reform Act of 1995 (March 22, 1995, Pub. L. 104-4), Executive Order 13132 on Federalism (August 4, 1999), the Congressional Review Act (5 U.S.C. 804(2)), and Executive Order 13771 on Reducing Regulation and Controlling Regulatory Costs (January 30, 2017).

Executive Orders 12866 and 13563 direct agencies to assess all costs and benefits of available regulatory alternatives and, if regulation is necessary, to select regulatory approaches that maximize net benefits (including potential economic, environmental, public health and safety effects; distributive impacts; and equity). A regulatory impact analysis (RIA) must be prepared for major rules with economically significant effects ($100 million or more in any 1 year). This rule does not reach the economic threshold, and thus is not considered a major rule. Since the regulation only implements current practice and policy, we believe the economic impact to be negligible.

The RFA requires agencies to analyze options for regulatory relief of small entities. For purposes of the RFA, small entities include small businesses, nonprofit organizations, and small governmental jurisdictions. Most hospitals and most other providers and suppliers are small entities, either by nonprofit status or by having revenues of $7.5 million to $38.5 million in any 1 year. Individuals and States are not included in the definition of a small entity. We did not prepare an analysis for the RFA because we have determined, and the Secretary of Health and Human Services certifies, that this final rule will not have a significant economic impact on a substantial number of small entities.

In addition, section 1102(b) of the Act requires us to prepare a RIA if a rule may have a significant impact on the operations of a substantial number of small rural hospitals. This analysis must conform to the provisions of section 604 of the RFA. For purposes of section 1102(b) of the Act, we define a small rural hospital as a hospital that is outside of a Metropolitan Statistical Area for Medicare payment regulations and has fewer than 100 beds. We did not prepare an analysis for section 1102(b) of the Act because we have determined, and the Secretary of Health and Human Services certifies, that this final rule will not have a significant impact on the operations of a substantial number of small rural hospitals.

Section 202 of the Unfunded Mandates Reform Act of 1995 also requires that agencies assess anticipated costs and benefits before issuing any rule whose mandates require spending in any 1 year of $100 million in 1995 dollars, updated annually for inflation. This rule has no consequential effect on State, local, or Tribal governments or on the private sector.

Executive Order 13132 establishes certain principles and criteria that an agency must follow when it implements a regulation or other policy that has Federalism implications, defined in Order 13132 to mean that the regulation or policy has 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. Order 13132 also requires a level of consultation with State or local officials when an agency formulates and implements a regulation that has Federalism implications, imposes substantial direct compliance costs on State and local governments, and is not required by statute.

We do not believe that this regulation has Federalism implications as it does not have a substantial direct effect on the States or on the relationship or distribution of power and responsibilities among levels of government. Nor do we believe the regulation imposes substantial direct compliance costs on States. Rather, the regulation reflects certain statutory changes governing operation of the Units that have already been implemented and codifies policy and practice involving the organization and operation of the Units. We believe the content of the regulation is consistent with the partnership between the Federal and State Governments that has been established for the financing and administration of the larger Medicaid program. We further believe that any costs related to compliance with the regulation are minimal and not substantial.

However, to the extent that that the regulation is seen as having Federalism implications, the regulation is consistent with the principles and criteria established in Order 13132. The regulation would strictly adhere to constitutional principles and would be deferential to the States with respect to the policymaking and administration of State operations related to the investigation and prosecution of Medicaid provider fraud and patient or resident abuse or neglect. With regard to consultation, the policies contained in the regulation were developed in consultation and collaboration with the States.

Executive Order 13771 requires an agency to identify at least two deregulatory actions for each new regulation that the agency proposes or otherwise promulgates. Any new incremental costs associated with a new regulation must, to the extent permitted by law, be offset by the elimination of existing costs through deregulatory actions. It has been determined that this rule is a deregulatory action.

In accordance with the provisions of Executive Order 12866, this regulation was reviewed by the Office of Management and Budget.

This rule revises the scope of our annual collection of information at 42 CFR 1007.17. Under the Paperwork Reduction Act of 1995 (PRA), Federal agencies generally must take certain steps, such as seeking public comment on proposed collections of information and submitting proposed collections for review and approval by the Office of Management and Budget, before requiring or requesting information from the public. Accordingly, we solicited public comment on the information required in proposed 42 CFR 1007.17 for OIG's annual review and recertification of Units. After we published the Proposed Rule, however, the Inspector General Empowerment Act of 2016 (Empowerment Act), Public Law No. 114-317, was signed into law on December 16, 2016. Section 2 of the Empowerment Act added subsection (k) to section 6 of the Inspector General Act of 1978. Under new subsection (k), the PRA does not apply to “the collection of information during the conduct of an audit, investigation, inspection, evaluation, or other review conducted by . . . any Office of Inspector General . . . .” As a result, the collection of information under 42 CFR 1007.17 of this rule is exempt from the requirements of the PRA.

The Centers for Medicare & Medicaid Services (CMS) and the Office of Inspector General (OIG), respectively, amend 42 CFR part 455 and 1007 as follows:

NMFS is required to estimate the total amount of yellowtail flounder catch from the scallop fishery by January 15 each year. If the scallop fishery is expected to catch less than 90 percent of its Georges Bank (GB) or Southern New England/Mid-Atlantic (SNE/MA) yellowtail flounder sub-annual catch limit (ACL), the Regional Administrator (RA) has the authority to reduce the scallop fishery sub-ACL for these stocks to the amount projected to be caught, and increase the groundfish fishery sub-ACL by the same amount. This adjustment is intended to help achieve optimum yield for these stocks, while not threatening an overage of the ACLs for the stocks by the groundfish and scallop fisheries.

Based on the most current available catch data, we project that the scallop fishery will have unused quota in the 2018 fishing year. Using the highest expected catch, the scallop fishery is projected to catch approximately 14 mt of GB yellowtail flounder, or 44 percent of its 2018 fishing year sub-ACL, and approximately 3 mt of SNE/MA yellowtail flounder, or 80 percent of its 2018 fishing year sub-ACL. The analysis of the highest expected catch is based on the proportion of estimated yellowtail flounder catch occurring in February and March compared to catch in the remainder of the scallop fishing year. The highest proportion observed (in this case fishing year 2016) over the past six years is used to estimate the highest expected catch in fishing year 2018.

Because the scallop fishery is expected to catch less than 90 percent of its allocation of GB and SNE/MA yellowtail flounder, this rule reduces the scallop sub-ACL for both stocks to the upper limit projected to be caught, and increases the groundfish sub-ACLs for these stocks by the same amount, effective March 21, 2019, through April 30, 2019. Using the upper limit of expected yellowtail flounder catch by the scallop fishery is expected to minimize the risk of constraining scallop fishing or an ACL overage by the scallop fishery while still providing additional fishing opportunities for groundfish vessels.

Table 1 summarizes the revisions to the 2018 fishing year sub-ACLs, and Table 2 shows the revised allocations for the groundfish fishery as allocated between the sectors and common pool based on final sector membership for fishing year 2018.

The NMFS Assistant Administrator has determined that the management measures implemented in this final rule are necessary for the conservation and management of the Northeast multispecies fishery and consistent with the Magnuson-Stevens Act, and other applicable law.

This action is authorized by 50 CFR part 648 and is exempt from review under Executive Order 12866.

The Assistant Administrator for Fisheries finds good cause pursuant to 5 U.S.C. 553(b)(B) and 553(d)(3) to waive prior notice and opportunity for public comment and the thirty day cooling off period, respectively. This rule relieves groundfish fishermen from more restrictive ACLs for yellowtail stocks and is intended to help the fishery achieve optimum yield. The earlier this rule is in place, the more time the groundfish fishermen will have to plan and fish for, and potentially catch, extra available quota. Delaying the effective date reduces the expected benefit and undermines the purpose of the rule to help the fishery achieve optimum yield.

The authority to transfer available yellowtail catch from the scallop fishery to the groundfish fishery was designed to allow timely implementation before the end of the northeast multispecies fishing year on April 30, 2019 (see 50 CFR 648.90(a)(4)(iii)(C)). NMFS is required to project GB and SNE/MA yellowtail flounder catch in the scallop fishery by January 15 of each year so that projected unused quota may be transferred to the groundfish fishery. Data available for analysis this year were delayed, and we could not make our projection until well after January 15. As a result, providing additional time for prior public notice and comment or a 30-day cooling off period before transferring quota for these yellowtail flounder would likely prevent the rule from being in place before the end of the fishing year, or would mean that the rule would be in place too close to the end of the fishing year to be effective, and to confer a benefit to Groundfish fishermen. Such a delay would reduce or eliminate any potential benefit to the groundfish fishermen from receiving the additional allocation that is intended to offset the current negative economic effects of severe decreases in ACLs of several important groundfish stocks.

Scallop fishermen are not expected to be adversely affected by this rule. Projected scallop catch for the balance of the year is designed to avoid constraining scallop catch by using the high-end estimate of yellowtail bycatch based on previous year's catch. Further, scallop fishermen are aware of this potential transfer at the beginning of the fishing year and have sufficient time to plan accordingly. It also does not require time for adjusting to any new compliance measures or other action on the part of the scallop or groundfish fishermen.