We invite you to send any written relevant data, views, or arguments about this proposal. Send your comments to an address listed under the ADDRESSES section. Include “Docket No. FAA-2019-0185; Product Identifier 2018-NM-178-AD” at the beginning of your comments. We specifically invite comments on the overall regulatory, economic, environmental, and energy aspects of this NPRM. We will consider all comments received by the closing date and may amend this NPRM because of 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 NPRM.

Transport Canada Civil Aviation (TCCA), which is the aviation authority for Canada, has issued Canadian AD CF-2018-31, dated November 28, 2018 (referred to after this as the Mandatory Continuing Airworthiness Information, or “the MCAI”), to correct an unsafe condition for all Bombardier, Inc., Model CL-600-2C10 (Regional Jet Series 700, 701 & 702), CL-600-2D15 (Regional Jet Series 705), and CL-600-2D24 (Regional Jet Series 900) airplanes. The MCAI states:

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-2019-0185.

Bombardier has issued Temporary Revision (TR) ALI-0652, dated July 9, 2018. This service information describes airworthiness limitations for a CMR task related to operational checks of the landing gear AES. 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 proposing this AD because we evaluated all the relevant information and determined the unsafe condition described previously is likely to exist or develop on other products of the same type design.

This proposed AD would require revising the existing maintenance or inspection program, as applicable, to incorporate new or more restrictive airworthiness limitations.

This proposed AD would require revisions to certain operator maintenance documents to include new actions ( e.g., inspections). Compliance with these actions is required by 14 CFR 91.403(c). For airplanes that have been previously modified, altered, or repaired in the areas addressed by this proposed AD, the operator may not be able to accomplish the actions described in the revisions. In this situation, to comply with 14 CFR 91.403(c), the operator must request approval for an alternative method of compliance according to paragraph (i)(1) of this proposed AD.

We estimate that this proposed AD affects 536 airplanes of U.S. registry. We estimate the following costs to comply with this proposed AD:

We have determined that revising the existing maintenance or inspection program takes an average of 90 work-hours per operator, although we recognize that this number may vary from operator to operator. In the past, we have estimated that this action takes 1 work-hour per airplane. Since operators incorporate maintenance or inspection program changes for their affected fleet(s), we have determined that a per-operator estimate is more accurate than a per-airplane estimate. Therefore, we estimate the total cost per operator to be $7,650 (90 work-hours × $85 per work-hour).

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

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

This proposed 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 proposed AD would not have federalism implications under Executive Order 13132. This proposed AD would 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 this proposed regulation:

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 proposes to amend 14 CFR part 39 as follows:

The purpose of this action is to explore additional means for U.S. and foreign air carriers to compensate passengers who are involuntarily denied boarding in an oversales situation. Currently, carriers must provide Denied Boarding Compensation (DBC) by issuing cash or checks. This NPRM proposes to allow carriers to use electronic payment methods in lieu of cash or check DBC payments. This NPRM also proposes to allow U.S. and foreign air carriers to provide a mandatory written notice to consumers explaining DBC and boarding priorities in electronic form. Currently, carriers are required to provide this notice in print format.

This NPRM proposes to amend the following provisions in 14 CFR part 250:

(1) 14 CFR 250.5 Amount of denied boarding compensation for passengers denied boarding involuntarily.

This provision would be amended to incorporate the proposal of allowing cash equivalent electronic payments for compensating passengers who are denied boarding involuntarily.

(2) 14 CFR 250.8 Denied boarding compensation.

This provision would be amended to incorporate the proposal of allowing cash equivalent electronic payments for DBC payments, and specify certain conditions for these electronic payments to ensure that they are indeed equivalent to cash.

(3) 14 CFR 250.9 Written explanation of denied boarding compensation and boarding priorities, and verbal notification of denied boarding compensation.

This provision sets forth the written statement that carriers must provide to passengers regarding involuntarily denied boarding. This provision would be amended to incorporate the proposal to allow carriers to provide the written statement by electronic means upon passengers' consent. The written statement would also be amended to incorporate the proposal of allowing cash equivalent electronic DBC payments.

The proposed rule would provide regulatory relief to airlines, while maintaining aviation consumer protections for passengers. The rule would not have a significant economic impact on airlines or their passengers, and those economic impacts that are anticipated are expected to be beneficial to both airlines and passengers, and modest in magnitude.

To compensate for “no-shows,” many airlines overbook their scheduled flights by selling more confirmed reservations for a flight than they have seats. At times, it may also be necessary to involuntarily deny boarding to passengers holding confirmed reservations to comply with safety or operational requirements, or to make room for Federal Air Marshall, or other law enforcement personnel. The Department's regulation on oversales, 14 CFR part 250, establishes the minimum standards for the treatment of airline passengers holding confirmed reservations who are involuntarily denied boarding (“bumped”). Among other requirements, 14 CFR 250.8 requires that U.S. and foreign air carriers must offer compensation in the form of cash or immediately negotiable check to bumped passengers. The amount of the cash or negotiable check depends on the price of the airline ticket, whether the passenger was bumped from a domestic flight or international flight, and the projected length of the delay caused by the bumping. Under DOT rules, if a passenger is bumped involuntarily, the cash or check must be tendered on the day and place the denied boarding occurs, or, under certain circumstances, by mail or other means within 24 hours.

The Department's oversales rule was initially promulgated by its predecessor, the Civil Aeronautics Board (CAB) in 1967 (32 FR 11939, Aug. 18, 1967). In that final rule, carriers were required to tender to a passenger eligible for DBC, on the day and place the denied boarding occurs, a “draft” for the appropriate amount. The rule further provides that when a carrier arranges alternate means of transportation that departs before the draft can be prepared and tendered to the passenger, tender shall be made by mail or other means within 24 hours after the time the denied boarding occurs. In 1984, the CAB issued an interpretive amendment to the rule to make it clear that passengers involuntarily denied boarding must be paid by cash or an immediately negotiable check (49 FR 43622, Oct. 31, 1984). The amended rule retains the original rule's requirement regarding the timing of DBC payment, that DBC must be paid at the time and place of denied boarding, or tendered within 24 hours after the denied boarding occurs. However, it replaced the word “draft” as appeared in the rule with the phrase “cash or immediately negotiable check.” In doing so, the CAB rebutted a carrier's argument that the undefined term “draft” can be interpreted to include carrier-issued flight vouchers. The CAB reiterated that one of the main goals of the oversales rule was to provide “prompt, effective, and adequate” compensation to bumped passengers and pointed out that the intended results of the rule, one of which being that DBC must be paid by “cash or cash equivalent”, are clear and that the intent had been uniformly interpreted by the industry since 1967. The phrase “cash or immediately negotiable check” remains to be the rule as of today.

The Department recognizes that the means of money transfer offered by the banking systems and other financial institutions have evolved over the last few decades. In 1984, when the CAB required that DBC must be paid by cash or check, an immediately negotiable check was likely the only form of cash equivalent that was widely available and accessible to the public. Since then, prepaid access payments  1 have been introduced to and accepted by many merchants. In addition, in recent years, electronic fund transfer  2 services, previously only available for transfers between financial institutions, is now available for transferring money from the account holder of a bank to an individual consumer. Further, various digital money transfer networks offered by non-banking business entities, such as PayPal, Zelle, Square Cash, Google Wallet, and Venmo, are becoming more and more popular among consumers due to their accessibility via mobile phone applications.

As a result of the aforementioned money storage and transfer technology evolution, various airlines have urged the Department to consider allowing them to provide DBC payments to passengers via a prepaid card or other forms of electronic funds. In 2011, in the Department's final rule titled “Enhancing Airline Passenger Protections” (76 FR 23109, Apr. 25, 2011), we responded to some carriers' comments that the Department should allow the use of prepaid cards  3 for DBC payments. In our response, we acknowledged the convenience and security features offered by electronic funds, but declined to implement a rule allowing use of electronic funds as a substitute for cash or check payments because we had not had the opportunity to fully examine the potential benefits and limitations of the use of electronic funds in that rulemaking proceeding. We stated that we may explore this issue in future rulemaking. Further, in October 2017, the Department published a Notification of Regulatory Review (82 FR 45750, October 2, 2017), seeking public input on existing rules and other agency actions that are good candidates for repeal, replacement, suspension, or modification. Among the comments received, Airlines for America (A4A), the trade association for most large U.S. air carriers, suggests that the Department should eliminate the requirement that DBC be paid in cash or check, and allow airlines to make DBC payments by electronic transfer, credit or flight vouchers. A4A avers that the requirement of cash or check DBC payment is obsolete in today's society where electronic payments have become the norm. By this NPRM, we fulfill our stated intention in the 2011 final rule and take the opportunity to examine this subject fully, including issues raised by A4A in its regulatory review comment.

The CAB's 1967 final rule establishing the oversales regulation also included a provision that requires greater public disclosure of boarding procedures and passengers' rights in the event of an oversold flight. In a 1978 final rule that strengthened this disclosure requirement, CAB stated that its adoption of a more stringent public disclosure requirement was intended to afford passengers, who were otherwise generally ignorant of the rule, the opportunity to take steps to protect themselves from involuntary bumping or to verify that carriers have in fact acted in accordance with the stated priorities. See 43 FR 24277, at 24281. Under the current rule, carriers must provide a written notice explaining the computation of DBC and the carrier's boarding priority in determining which passenger(s) would be subject to involuntarily denied boarding in an oversales situation, if necessary. This notice must be provided verbatim to any passenger who was involuntarily denied boarding, immediately following the denied boarding, and to any other persons, upon request, at (1) all airport ticket selling positions that are exclusively or jointly under the carrier's control, and (2) at boarding locations ( e.g., gates).

For several decades, carriers complied with this requirement by preprinting a large quantity of pamphlets containing the written notice as prescribed by the rule, and distributing the pamphlets to each station so they would be available on demand at the ticket counters and gates. In recent years, some carriers began to use computer terminals at the ticket counters and gates to generate printed notices on demand. By doing so, carriers may avoid the cost of preprinting a large amount of pamphlets that may be rendered obsolete on a later date because the regulatorily mandated DBC maximum amounts contained in the notice are subject to inflation adjustments. It also avoids the possibility of running out of or misplacing the pamphlets at a station so all agents are able to locate and produce the document on a short notice.

In comments submitted to the aforementioned 2017 regulatory reform docket, A4A states that the rule was originally implemented long before the internet and email existed, when airlines had to rely on paper-based forms of communication with consumers. A4A asserts that airlines' compliance with this paper-based notice requirement creates unnecessary logistical challenges and ignores the greater efficiency and more environmentally beneficial ability to deliver such notification to consumers electronically. According to A4A, airlines are required to expend considerable resources to print and distribute these written statements to consumers, including destroying existing notices and reprinting such statements each time the Department adjusts the amount of denied boarding compensation it requires. A4A recommends that the Department amend the regulation to allow carriers to provide passengers the involuntary denied boarding information explanation in an electronic format in order to modernize the delivery of such information to consumers, to better ensure up-to-date information is provided, reduce the cost of document destruction as carriers destroy outdated documents, and eliminate paper waste.

Improvement of regulations is a continuous focus for the Department. As a part of that effort, we periodically review existing regulations to ensure that they continue to meet the needs for which they originally were designed, remain cost-effective and cost-justified. As such, and in response to A4A's comment, we undertake this rulemaking to explore the subject of eliminating the requirement for paper-based notice and allowing carriers to provide the notice electronically.

As stated by CAB in 1984, one goal of the oversales rule is to ensure that carriers provide “prompt, effective, and adequate” compensation to bumped passengers. In light of the technological advancements that have taken place in money transfer, we ask the public to comment on whether expanding the scope of “cash equivalent” beyond an immediately negotiable check would still result in “prompt, effective, and adequate” compensations to bumped passengers. Is there a significant number of passengers who do not have access to electronic funds and can only access DBC payments by cash or check? If so, how can the Department ensure that all passengers affected by involuntary denied boarding, including those passengers who do not have access to electronic funds, receive “prompt and effective” DBC payments? In the event the Department finalizes a rule to allow carriers to provide DBC payments in electronic formats in lieu of cash or check payments, should the rule take effect right away or is there a need for a sunset period for the cash and check payments mandate to be eliminated? How long should the sunset period be?

Since the issuance of the 2011 final rule in which the Department declined to address the issue of allowing alternative DBC payment methods, the Department has engaged in discussions with the airline industry on this matter. These discussions with stakeholders have provided valuable information for the Department to preliminarily assess the benefits and limitations of electronic funds. With respect to benefits, we recognize that for security and administrative reasons, most, if not all, carriers may prefer to tender DBC in the form of checks instead of cash. We acknowledge that there are situations in which there is no time for the passenger to wait for a check or the carrier is unable to issue the check immediately following the denied boarding. In these situations, carriers are required to mail a check within 24 hours, but as a practical matter, consumers oftentimes would not have access to the money for many days because of the time needed for the checks to arrive at their designated addresses by mail, the likelihood that the bumped passengers may be traveling and not at their residences to receive the checks, and the time necessary for depositing the checks into their bank accounts. In contrast to checks, electronic funds oftentimes are much easier ways for consumers to access the money. For example, prepaid cards provide consumers a convenient way to immediately withdraw cash from an automated teller machine (ATM) or allow them to use the cards for purchases at retail stores and in online transactions. Similarly, electronic fund transfers via a banking system or through an intermediary platform, such as PayPal, provides consumers access to the money in a much faster and convenient manner. These funds are also available for online transactions. From the carriers' perspective, issuing DBC in electronic formats can facilitate a computerized and centralized DBC management system, eliminate the need to manually issue and mail checks, increase efficiency, and decrease the chance of fund mismanagement. For purpose of this rulemaking, we invite the public as well as experts in the banking industry to comment on any other benefits of using these electronic forms of payment to issue DBC. Are there any specific distinctions among prepaid cards, and various electronic fund transfer platforms (including directly transferring funds to the passengers' bank accounts and to accounts with intermediary transfer services such as PayPal ) that are pertinent in making a form or forms of DBC payment more preferable than others? What type or types of payment are most likely accessible to the majority of consumers? Should the carriers be required to provide payments in cash or check if the offer of electronic payments are rejected by a passenger for the reason that it is inaccessible to that individual? What are the estimated administrative costs to carriers for managing these electronic payment systems, including administration fees and services fees paid to financial institutions or intermediary fund transfer entities, if any? How are these costs compared to the cost of managing cash or check DBC payments at both headquarters and station levels?

With respect to limitations of electronic DBC payments, we found that, compared to cash or check payments, many prepaid cards have shorter validity periods than a typical check instrument; some cards impose various fees on users; and when withdrawing cash with the cards at ATMs, there are often withdrawal limits, usage fees, and other conditions attached. For commonly known electronic fund transfer methods, we are not aware of any fees imposed on the recipients of the funds. With respect to fees imposed on the providers of the funds (the airlines), we lack information on whether they exist and, if so, in what format. We welcome public comments on this issue. As our goal is to find means of payment that are equivalent to cash or check and, at the same time, increases efficiency and convenience, in this NPRM, we propose certain conditions that carriers must meet if they choose to offer electronically stored or transferred funds in lieu of cash or check DBC payments. These conditions are intended to eliminate characteristics or fees associated with electronically stored or transferred funds that may render the payment less than its value in U.S. dollars. We seek comments on whether these proposed conditions are necessary to ensure passengers' rights to adequate and prompt DBC payments, and whether instead of imposing these conditions, a performance-based standard that merely requires the DBC payment to be “cash equivalent” would be sufficient to achieve our goal. Would a performance-based standard without specific conditions as the ones proposed here be more appropriate to adapt to the ever-changing technology in fund payment and transfer? Would a performance-based standard without conditions more likely cause confusion and uncertainty regarding compliance among carriers?

The current rule does not have a specific minimum validity period requirement for DBC payments in the form of checks. According to Article 4 of the Uniform Commercial Code, a bank receiving the check may, but is not obligated to, pay a check that is more than six months old. See U.C.C. § 4-404 (2002). As many prepaid cards have an expiration date, in the NPRM, we propose that to be considered cash equivalent, an electronic fund's validity period must be no less than 90 days from the date the passenger receives the fund, or from the date the fund is activated, if activation is required, whichever gives the longer validity period. We seek information on what the common validity period of widely available electronic funds, such as prepaid cards, are, if any. If it is shorter than the typical check's validity period (no longer than six months), should the carriers be required to extend the validity period of the cards to match that of a check? Are there any technical issues with extending a card's validity period to six months or more? Are there any validity periods imposed on funds transferred via platforms owned and operated by other intermediary entities such as PayPal ? In relation to the validity period of the funds, if there is any value left at the end of the validity period, should the carriers be required to provide the fund to consumers upon request?

14 CFR 250.5 specifies the amount of DBC a carrier must provide to an eligible passenger following an involuntary denied boarding incident. The amount of DBC varies depending on whether the flight from which the passenger was bumped was a domestic or international flight, the expected delay caused by the denied boarding, and the amount of fare paid by the passenger. In addition to the prescribed calculation formula, section 250.5 specifies that carriers are not required to pay above a certain amount though carriers can always choose to do so. In this NPRM, we are not proposing any changes to the methods of calculating the amount of DBC or the amount above which carriers are not required to pay (currently at $675 and $1,350). However, considering that some prepaid funds and/or electronically transferred funds may incur usage fees for consumers when they attempt to access cash via ATMs, we are proposing to require carriers to take into account these usage fees when determining the amount that must be available from the electronic funds. For example, withdrawing cash from an ATM with a prepaid card may incur usage charges. Some bank-owned ATMs charge usage fees solely to users who are not customers of the bank where the ATM is installed; some ATM usage fees are charged to all users. Further, many ATMs impose a limitation on the amount of cash one can withdraw at a time or daily, and as a result, a consumer may have to make several withdrawals to access the full amount of DBC and therefore, paying multiple usage fees. As such, if a passenger is entitled to a DBC payment of $1,350 that is provided in a prepaid card, and the card provided to the passenger has a $300 limit on the amount that can be withdrawn at one time and a $5 fee for each withdrawal, then the carrier would need to increase the amount of DBC payment on the card by $25. The example of $25 or ATM usage fees would cover up to five withdrawals at $5 per withdrawal. Are carriers able to provide prepaid cards that can be used at most ATMs without usage charges ( e.g., carriers prepay for the anticipated charge)? If not, is there a reasonable amount to cover withdrawal service fees for most instances, or would a determination need to be made on a case by case basis?

In addition to the amount specific to cover ATM usage fees, our proposal also prohibits carriers from imposing on consumers any other usage-related or any maintenance-related charges for the prepaid cards. 4 Our proposal does not intend to require carriers to cover all the fees that can be charged to a prepaid card, such as cash reload fee, or card-to-card transfer fee, but we intend to require carriers to cover any fees that a consumer must pay in order to maintain the validity of the cards. 5 Examples of these fees are weekly or monthly maintenance fees, non-activity fees, balance inquiry fees, and customer service call surcharges. Our goal is to ensure that passengers receive the same amount of DBC payment through electronic format as if they are paid by cash or check. We seek public comment on commonly charged fees that carriers should be responsible for in order to achieve that goal.

Further, because DBC payments often occur in the context of international travel, we specifically note that our proposed additional amount for DBC payment by electronic format to cover usage fees such as ATM fees does not intend to cover any foreign exchange fees that usually occur when a card issued by a U.S. entity is used at an ATM overseas for cash withdrawal or for purchase in foreign currency. This is consistent with the current rule that requires cash or cash equivalent to be provided in U.S. dollars and does not require the DBC amount to cover any foreign exchange fees should the consumers wish to exchange the U.S. dollars into another currency.

Under the proposal, DBC payments that are transferred electronically to a passenger's bank account would presumably become accessible for cash withdrawal with the passenger's own bank debit card. For electronic fund transfers to intermediary accounts, such as PayPal, are there any convenient ways to get cash from the account? If not, is the lack of easy and immediate access to cash a big concern for consumers? Are there fees charged to the recipients for the most commonly used means of electronic fund transfer? Should the Department prescribe the specific means of electronic fund transfer that carriers may use to pay DBC, or, is a performance-based standard within which carriers are free to choose the preferred means of electronic fund transfer a better option?

To ensure that passengers who are denied boarding involuntarily receive the DBC payments that they are entitled to in a timely manner, the current rule, in section 250.8 requires that the DBC payment must be tendered to passengers on the day and at the place where the denied boarding occurred, or, in the event that carriers arrange alternate transportation that departs before the DBC payment can be prepared and tendered, carriers must tender the payment by mail or other means within 24 hours of the denied boarding. In this NPRM, we are proposing to maintain this requirement with respect to DBC payments made by cash, check, and cash equivalent provided electronically. We are proposing that tendering payment within 24 hours of the denied boarding may include but is not limited to mailing a check or prepaid card to a passenger within 24 hours of the denied boarding or initiating a fund transfer to the passenger's account within 24 hours of the denied boarding. Is this 24-hour requirement reasonable and adequate for the purpose of tendering electronic cash equivalent?

In this NPRM, we are proposing to allow any type of electronic payment that is considered “cash equivalent.” To be equivalent to cash, we consider that the payment must be widely accepted in commerce for purchases. For example, a prepaid card can be an open-loop or closed-loop card. An open-loop prepaid card is a card with a credit card network logo on it that can be used for purchase at any location that accepts that brand. Examples of the most commonly accepted credit card networks are Visa, MasterCard, American Express, and Discover. All prepaid cards that bear one of the major networks' logos can also be used at most ATMs for cash withdrawal. In contrast, a closed-loop card is a card that can only be used for purchase at a specific merchant or a group of merchants and they usually cannot be used to withdraw cash at an ATM. A typical example of closed-loop card is a gift card for a particular store brand. In the NPRM, we propose that the prepaid card provided to consumers as DBC payment must be an open-loop card so consumers are not restricted with a particular merchant when using the fund for purchase and consumers are able to access cash with the card if so preferred. Furthermore, we note that most ATMs are connected to interbank networks, enabling consumers to withdraw and deposit money from machines not belonging to the bank where they have their accounts or not in the country where their accounts are held (enabling cash withdrawals in local currency). As such, we are also including in our proposal prepaid card payments that allow consumers to withdraw cash from any major interbank network that is widely available, such as NYCE, PULSE, PLUS, and Cirrus, as a permissible type of payments for DBC. We ask for comments on whether our proposal is sufficient to ensure that the electronic payments are cash equivalent and can easily be used to withdraw cash at airports and other locations.

The Consumer Financial Protection Bureau (CFPB) rule implementing the Electronic Fund Transfer Act, 12 CFR part 1005 (Regulation E), 6 along with its appendixes (Model Disclosure Clauses and Forms and CFPB Official Interpretations), prescribes various disclosure requirements for, among other things, “electronic fund transfers”  7 and “general-use prepaid card.”  8 To the extent that a carrier provides DBC payment by a method within the meaning of “electronic fund transfer” as defined in Regulation E, we expect that carriers (which are under the Department's jurisdiction) and/or the financial institutions or other entities they use to provide or facilitate the DBC payments (which may fall under the jurisdiction of CFPB) comply with the requirements of Regulation E. Consistent with the goal of Regulation E and our authority under 49 U.S.C. 41712 against unfair and deceptive practices, in this NPRM, we propose to require that carriers provide conspicuous written disclosure of all material restrictions and conditions associated with using and maintaining the card at the time the card is tendered to the passenger. Examples of such conditions would be expiration date, activation requirement, pin requirement, ATM withdrawal fees, daily withdrawal amount limit, and network limit, etc. We encourage individuals and entities having pertinent familiarity with Regulation E to provide input on its applicability towards any DBC payment methods proposed in this notice, and whether there are any difficulties for carriers and others to comply with both Regulation E and our proposals. At this time, we are not proposing to prescribe the manner of written disclosure carriers must use to notify passengers of the limits and restrictions associated with the cards, nor are we proposing the specific language of the disclosure. Consistent with our proposal to allow carriers to provide written notice of denied boarding compensation and boarding priority by electronic means, which will be discussed below, we also propose to allow carriers to provide disclosures of the limits and restrictions on electronic DBC payment by electronic means upon consumers' consent. We ask public input on whether we should require this disclosure to be incorporated into the written notice that carriers are required to provide under section 250.9, when applicable, or whether it is better to provide a standalone disclosure document.

As a final matter for this subject, we emphasize that our proposal would allow carriers to choose from cash, check or cash equivalent electronic payments as a form of mandatory denied boarding compensation payments. Further, this proposal would not impact the ability of carriers to offer consumers a choice between flight vouchers or credits and the mandatory denied boarding compensation payments. For clarification purpose, we propose to revise the rule text in section 250.5(c) to make it clear that airlines may offer consumers the option of choosing either free or reduced rate air transportation or the required DBC payment.

The requirement for carriers to provide a written notice regarding denied boarding rights was included in the original oversales final rule in 1978. The stated goal is to ensure that passengers affected by oversales understand what they are entitled to and are able to make an informed choice between accepting DBC or any other compensation offers carriers may present. In this NPRM, we propose to allow carriers to provide this notice electronically, such as by display on an airline tablet, or by email or text message with a link to the actual notice on the internet if the passenger has a device with him or her on which to access this information. However, in our proposal, if a passenger does not consent to receive this notice in electronic format and instead, requests a print copy, carriers must produce the print copy. Our concern with eliminating the requirement of providing printed notice upon request is that the passenger may want not only to read the notice and understand his or her rights in a timely manner before making a decision about denied boarding compensation, but also to retain a copy for further review at a later time. We assume that most if not all carriers are able to produce a print copy using computer terminals at the gates or counters, as many of them already do currently. We solicit comment regarding the benefit and costs of proposing to require carriers to provide printed notice to the passenger upon request. We also request information regarding the availability of email or text messages to passengers when they travel.

With respect to the format of the electronic notice, we ask whether carriers may provide emails or text messages that include a link to the actual notice on a webpage that is a part of the carriers' websites, or whether carriers should be required to provide the text of the notice via emails. Is there any substantial difference between these two formats that affects passengers' access to the content of the notice? For carriers that have mobile applications available for consumers to download on their mobile devices, is including the notice in the mobile applications sufficient for the purpose of oversales disclosure? Passengers with disabilities are normally not subject to involuntary denied boarding as airlines boarding priority rules often take into account a passenger's disability, and the current rule does not require carriers to provide the written notice in an accessible format for these passengers. However, we note that the Department's rule implementing the Air Carrier Access Act, 14 CFR part 382, requires that carriers' primary websites must conform to certain accessibility standards  9 by December 12, 2016, and that requirement would cover the denied boarding notice published on carriers' websites. We view this as an additional benefit of allowing carriers to provide denied boarding notice electronically—by providing the notice in accessible electronic format, passengers with disabilities who under the current rule may not have access to the content of the notice would gain access without assistance.

This proposed rule is not a significant regulatory action under section 3(f) of E.O. 12866 (58 FR 51735, October 4, 1993), Regulatory Planning and Review, as supplemented by E.O. 13563 (76 FR 3821, January 21, 2011), Improving Regulation and Regulatory Review. Accordingly, the Office of Management and Budget (OMB) has not reviewed it under that Order. It is also not significant within the meaning of DOT regulatory policies and procedures (DOT Order 2100.5 dated May 22, 1980; 44 FR 11034 (February 26, 1979)).

This proposed rule is expected to provide regulatory relief to airlines, while at the same time maintaining aviation consumer protections for passengers. The proposed rule would amend the denied boarding compensation requirements of sections 250.5 and 250.8 to allow carriers to use cash equivalent electronic payment in lieu of cash or check to provide compensation to passengers that are denied boarding involuntarily and are eligible for denied boarding compensation. The proposed rule would also amend the requirements of section 250.9 to allow carriers to provide the mandatory written explanation of denied boarding compensation by electronic means in lieu of a paper copy with the consent of the passenger. The proposed rule would not impact the existing requirements regarding denied boarding compensation eligibility for passengers that are denied boarding involuntarily, or the existing requirements regarding the methods of calculating the amount of compensation for passengers that are denied boarding involuntarily.

The primary entities that would be affected by this proposed rule are U.S. and foreign carriers to which the requirements of 14 CFR part 250 apply, and passengers with confirmed reserved space on scheduled flight segments operated by those carriers and that are denied boarding involuntarily and are eligible for denied boarding compensation. The requirements of 14 CFR part 250 apply to carriers that operate scheduled flight segments using an aircraft that has a designed passenger capacity of 30 or more passenger seats, operating in interstate air transportation or providing foreign air transportation on flight segments originating in the United States. It is currently estimated that there are approximately 45 U.S. carriers and 65 foreign carriers to which the requirements of 14 CFR part 250 apply.

Airlines are required to pay compensation to certain passengers who are involuntarily denied boarding from flights on which they hold confirmed reservations. The amount of the compensation depends on the length of delay to their destination. The practice, known as “bumping” or “denied boarding,” happens occasionally when there are more passengers scheduled to fly on an airplane than available seats. In rare circumstances, this practice may be needed to accommodate a Federal Air Marshall on the plane. When such an oversales situation occurs, airlines are first required to ask if there are passengers willing to give up their seats voluntarily in exchange for compensation, which could include a variety of incentives including money or flight vouchers, for example. Passengers who choose to give up their seat are considered to have been “voluntarily denied boarding.” If there are not enough volunteers available, any other additional passenger denied boarding is considered to have been “involuntarily denied boarding.”

Currently, airlines are required to offer cash or check for compensation to passengers who are involuntarily denied boarding and are eligible for compensation, in the amount of 200 percent of the passenger's one-way fare to their destination or first stopover, up to $675, if the delay is 1 to 2 hours (1 to 4 hours in foreign air transportation where involuntary denied boarding takes place at a U.S. airport), and 400 percent of the fare, up to $1,350, if the delay is over 2 hours (over 4 hours in foreign air transportation where involuntary denied boarding takes place at a U.S. airport). Airlines may offer consumers a choice between the required denied boarding compensation and free or reduced fare air transportation compensation at equal to or greater value (in addition to finding alternate transportation for the denied flight). However, the passenger involuntarily denied boarding may decline this transportation benefit in favor of cash or check. Airlines often do not hold cash at boarding locations and handle the compensation by mailing a check within 24 hours of the time of denied boarding.

Table 1 below provides a summary of the annual reported number of involuntarily denied boardings for the most recent five year period for which data was available (calendar years 2013 through 2017).

As presented in Table 1, over the most recent five year period, those U.S. carriers meeting the reporting requirement threshold  10 for oversales data recorded an average of approximately 45,000 involuntarily denied boardings annually, with the number steadily decreasing throughout this period from a high of 57,000 in 2013 to a low of 23,000 in 2017. Over the same time period, total passenger enplanements for these reporting carriers (excluding inbound international service, to which the oversales regulations are not applicable) have increased from 621 million in 2013 to 681 million in 2017, resulting in an even greater decrease in the rate of involuntarily denied boardings per 10,000 passenger enplanements, from 0.92 in 2013 to only 0.34 in 2017. 11

As also presented in Table 1, only about two-thirds of total involuntarily denied boardings are eligible for compensation and therefore would potentially be affected by the proposed rule. The remaining one-third of involuntarily denied boardings are not eligible for compensation, and therefore would not be affected by the proposed rule. 12 Over the most recent five year period, there were an average of 30,000 involuntarily denied boardings eligible for compensation annually, again with the number steadily decreasing throughout this period from a high of 42,000 in 2013 to a low of 15,000 in 2017. Early indications from data available for the first 6 months of 2018 show a continued decline in the number of involuntarily denied boardings. 13

The number of carriers that are required to report oversales data to the Department on Form 251 (17 U.S. carriers as of April 2018) represent only a portion of the estimated number of carriers to which the oversales requirements of 14 CFR part 250 apply (45 U.S. carriers, and 65 foreign carriers). However, because this smaller number of reporting carriers are the top-ranked U.S. carriers in terms of domestic scheduled-service passenger revenues, they are believed to represent a disproportionately large share of the total involuntarily denied boardings that occur among the full population of the estimated 45 U.S. carriers and 65 foreign carriers to which the oversales requirements of 14 CFR part 250 apply. Therefore, the data presented above from the reporting carriers are still believed to be reasonably representative in describing the extent to which passengers that are involuntarily denied boarding and are eligible for compensation would potentially be affected by the proposed rule.

Overall, the information presented above supports the conclusion that the maximum expected number of passengers traveling on U.S. carriers that would experience any potential impact from the proposed rule is very limited (only 0.0021% of enplanements in 2017), has been steadily decreasing over the past several years, and appears to be continuing that trend based on data thus far available for 2018. The Department does not require foreign air carriers to report the number of passengers who are involuntarily denied boarding on their outbound international flights from the U.S., and therefore such data are unavailable. However, anecdotal evidence suggests that among foreign carriers the rate of involuntarily denied boardings, and the percentage of involuntarily denied boardings that are eligible for compensation, are generally comparable to those of U.S. carriers.

Passengers denied boarding voluntarily receive compensation in a variety of forms, including through electronic payment methods. Making cash equivalent electronic payment (with appropriate consumer protections) available to the airlines for involuntary denied boarding compensation will expand the flexibility that already exists in the market. While offering this flexibility and greater choice to the airlines, the proposed rule ensures passengers are protected by specifying cash equivalent electronic payment, and by limiting the extent to which certain fees sometimes associated with cash equivalent electronic payment can be imposed.

Under the proposed amendments to the requirements of section 250.9 that a written explanation of denied boarding compensation be furnished to passengers that are denied boarding involuntarily, carriers would be allowed to furnish this notice by electronic means with the consent of the passenger. It is anticipated that carriers would realize a cost savings from this proposed amendment. These cost savings are expected to result from reductions in the number of hardcopy printed written statements that would be furnished by carriers to passengers, and the associated cost savings from reductions in paper, printing, distribution, and storage. The magnitude of these potential costs savings to carriers cannot be estimated, in part because under the proposed rule the decision by a carrier to furnish the written statement by electronic means is discretionary, as is the decision by a passenger to choose an electronic version of the written statement when one is offered by a carrier rather than a hardcopy printed version.

Both proposals are expected to provide modest cost savings to airlines from reductions in costs of handling and processing cash and checks, and reductions in costs of printing and distributing hardcopy printed statements. The decision by an airline to offer cash equivalent electronic payment, or an electronic version of written explanation of denied boarding, is discretionary. Therefore, it is expected that an airline would only adopt these options to the extent that they result in net cost savings. Because of the discretionary nature of these choices, the total potential cost savings of these proposals to airlines cannot be estimated. However, due to the relatively small number of passengers denied boarding involuntarily and eligible for compensation, the cost savings to airlines are expected to be modest. Nonetheless, recent comments provided by the airline industry indicate that carriers do believe that they would realize cost savings from being allowed the option to provide cash equivalent electronic payment for denied boarding compensation in lieu of cash or check, and from being allowed the option to furnish the written explanation of denied boarding by electronic means. 14

This proposed rule is expected to be an E.O. 13771 deregulatory action. Details on the estimated cost savings of this proposed rule can be found in the rule's economic analysis.

The Regulatory Flexibility Act of 1980 (RFA) (5 U.S.C. 601 et seq. ) requires Federal agencies to consider the effects of their regulatory actions on small businesses and other small entities, and to minimize any significant economic impact. When an agency issues a rulemaking proposal, the RFA requires the agency to “prepare and make available for public comment an initial regulatory flexibility analysis” which will “describe the impact of the proposed rule on small entities” (5 U.S.C. 603(a)). Section 605 of the RFA allows an agency to certify a rule, in lieu of preparing an analysis, if the proposed rulemaking is not expected to have a significant economic impact on a substantial number of small entities.

The primary entities that would be affected by this proposed rule are carriers to which the requirements of 14 CFR part 250 apply, and passengers with confirmed reserved space on scheduled flight segments operated by those carriers and that are denied boarding involuntarily and are eligible for denied boarding compensation. Airline passengers are not considered small entities because they do not meet the definition of a small entity in Section 601 of the RFA. Under 14 CFR 399.73, for the purposes of the Department's implementation of the RFA, a carrier is a small business if it provides air transportation exclusively with small aircraft, defined as any aircraft originally designed to have a maximum passenger capacity of 60 seats or less or a maximum payload capacity of 18,000 pounds or less.

The requirements of 14 CFR part 250 apply to carriers that operate scheduled flight segments using an aircraft that has a designed passenger capacity of 30 or more passenger seats, operating in interstate air transportation or providing foreign air transportation on flight segments originating in the United States. It is currently estimated that there are approximately 45 U.S. carriers and 65 foreign carriers to which the requirements of 14 CFR part 250 apply. Of these, there may be some that qualify as a small business according to the Department's size standard under 14 CFR 399.73 (exclusively using aircraft of 60 seats or less). However, the Department believes that the number of such carriers is very small. For example, based April 2018 aircraft registration data from the Federal Aviation Administration for manned-aircraft, less than one percent of registered aircraft (2,054 of 294,387 total aircraft) are aircraft designed with a capacity of 30 to 60 passengers seats. There are also very few foreign carriers that fly to and from the United States that provide air transportation only with small aircraft of 60 seats or less. Given the relatively small number of aircraft that fall within the size range of interest, and the small number of foreign carriers believed to operate only with aircraft of 60 seats or less, the Department believes that there would be very few carriers that are both subject to 14 CFR part 250 and that are providing air transportation exclusively with small aircraft with a maximum passenger capacity of 60 seats or less or a maximum payload capacity of 18,000 pounds or less. Therefore, the Department believes that the proposed rule will not have an impact on a substantial number of small entities.

As described earlier, due to the relatively small number of passengers that are denied boarding involuntarily and that therefore may be affected by the proposed rule, the potential cost savings to airlines of the proposed rule are expected to be modest, and relative to the gross revenues or profits of any affected airlines would not constitute a significant economic impact.

Accordingly, the Department certifies that the proposed rule, if promulgated, will not have a significant economic impact on a substantial number of small entities. The Department invites comment on this certification and on the analysis presented in support of it.

This NPRM has been analyzed in accordance with the principles and criteria contained in Executive Order 13132 (“Federalism”). This notice does not propose any provision that: (1) Has substantial direct effects on the States, the relationship between the national government and the States, or the distribution of power and responsibilities among the various levels of government; (2) imposes substantial direct compliance costs on State and local governments; or (3) preempts State law. States are already preempted from regulating in this area by the Airline Deregulation Act, 49 U.S.C. 41713. Therefore, the consultation and funding requirements of Executive Order 13132 do not apply.

This NPRM has been analyzed in accordance with the principles and criteria contained in Executive Order 13084 (“Consultation and Coordination with Indian Tribal Governments”). Because none of the options on which we are seeking comment would significantly or uniquely affect the communities of the Indian tribal governments or impose substantial direct compliance costs on them, the funding and consultation requirements of Executive Order 13084 do not apply.

This NPRM proposes a new collection of information that would require approval by the Office of Management and Budget (OMB) under the Paperwork Reduction Act of 1995 (Pub. L. 104-13, 49 U.S.C. 3501 et seq. ). Under the Paperwork Reduction Act, before an agency submits a proposed collection of information to OMB for approval, it must publish a document in the Federal Register providing notice of the proposed collection of information and a 60-day comment period, and must otherwise consult with members of the public and affected agencies concerning the proposed collection.

The collection of information proposed here is a requirement that carriers choosing to issue DBC by prepaid cards, electronic fund transfer, or other cash equivalent methods provide conspicuous written disclosure to passengers about any restrictions and limitation on the use and maintenance of the funds. The title, a description of the respondents, and an estimate of the annual recordkeeping burden are set forth below:

REQUIREMENT FOR CARRIERS TO PROVIDE WRITTEN DISCLOSURE ON LIMITS AND RESTRICTIONS OF ELECTRONIC PAYMENTS THAT ARE CASH EQUIVALENT OFFERED AS DENIED BOARDING COMPENSATION.

Respondents: U.S. carriers that operate scheduled passenger service using an aircraft that has a designed passenger capacity of 30 or more passenger seats, and foreign air carriers that operate scheduled passenger service to and from the United States using an aircraft that has a designed passenger capacity of 30 or more passenger seats.

Number of Respondents: 110 (45 U.S. carriers and 65 foreign carriers; assuming all U.S. and foreign carriers covered under 14 CFR part 250 choose to provide DBC by electronic payments that are cash equivalent).

Estimated Annual Burden on Respondents: 3,125 hours per year for all respondents. This estimate is based on an average of approximately 45,000 passengers that were involuntarily denied boarding annually by reporting carriers  15 in the last five years between 2013 and 2017, among which an average of 67 percent were legally eligible for compensation, averaging 30,000. According to data collected by the Department, these reporting carriers' combined annual U.S.-originating passenger enplanements counted for approximately 80 percent of the total annual enplanements for U.S.-originating passengers carried by all U.S. and foreign carriers. Based on this data, we estimate that the total number of passengers that were denied boarding annually by all carriers subject to Part 250 and are legally entitled to DBC to be 37,500 (80 percent of which were denied boarding by reporting carriers and 20 percent by all other carriers)  16 . We estimate an average burden of 5 minutes for the disclosure required by this proposal per passenger denied boarding involuntarily. The total estimated annual burden on all respondents would be 37,500 × 5 minutes = 3,125 hours.

Frequency: Disclosure is required each time a carrier provides DBC with an electronic DBC payment to a passenger who was denied boarding involuntarily.

The Department invites interested persons to submit comments on any aspect of each of these two information collections, including the following: (1) The necessity and utility of the information collection, (2) the accuracy of the estimate of the burden, (3) ways to enhance the quality, utility, and clarity of the information to be collected, and (4) ways to minimize the burden of collection without reducing the quality of the collected information. Comments submitted in response to this notice will be summarized or included, or both, in the request for OMB approval of these information collections.

The Department has determined that the requirements of Title II of the Unfunded Mandates Reform Act of 1995 do not apply to this notice.

The Department has analyzed the environmental impacts of this proposed action pursuant to the National Environmental Policy Act of 1969 (NEPA) (42 U.S.C. 4321 et seq. ) and has determined that it is categorically excluded pursuant to DOT Order 5610.1C, Procedures for Considering Environmental Impacts (44 FR 56420, Oct. 1, 1979). Categorical exclusions are actions identified in an agency's NEPA implementing procedures that do not normally have a significant impact on the environment and therefore do not require either an environmental assessment (EA) or environmental impact statement (EIS). See 40 CFR 1508.4. In analyzing the applicability of a categorical exclusion, the agency must also consider whether extraordinary circumstances are present that would warrant the preparation of an EA or EIS. Id. Paragraph 4.c.6.i of DOT Order 5610.1C categorically excludes “[a]ctions relating to consumer protection, including regulations.” The purpose of this action is to explore additional means for U.S. and foreign air carriers to compensate passengers who are involuntarily denied boarding in an oversales situation and allow carriers to use electronic payment methods in lieu of cash or check DBC payments. The Department does not anticipate any environmental impacts, and there are no extraordinary circumstances present in connection with this rulemaking.

For the reasons set forth in the preamble, the Department proposes to amend title 14 CFR Chapter II as follows:

Under the Federal Food, Drug, and Cosmetic Act (section 409(b)(5) (21 U.S.C. 348(b)(5))), we are giving notice that we have filed a food additive petition (FAP 2307), submitted by Uralkali PSJ, Ul., Pyatiletki 63, Berezniki, Perm Territory, 618426, Russia. The petition proposes to amend the food additive regulations in 21 CFR part 573 Food Additives Permitted in Feed and Drinking Water of Animals to provide for the safe use of yellow prussiate of soda as an anticaking agent for potassium chloride in animal food.

We are reviewing the potential environmental impact of this petition. To encourage public participation consistent with regulations issued under the National Environmental Policy Act (40 CFR 1501.4(b)), we are placing the environmental assessment submitted with the petition that is the subject of this notice on public display at the Dockets Management Staff (see DATES and ADDRESSES ) for public view and comment.

We will also place on public display, at the Dockets Management Staff and at https://www.regulations.gov, any amendments to, or comments on, the petitioner's environmental assessment without further announcement in the Federal Register . If, based on our review, we find that an environmental impact statement is not required, and this petition results in a regulation, we will publish the notice of availability of our finding of no significant impact and the evidence supporting that finding with the regulation in the Federal Register in accordance with 21 CFR 25.51(b).

Mammography is an x-ray imaging examination used to identify signs of breast cancer. For women to receive the full benefit of mammography, the service must be of high quality, including performance of the examination by qualified technologists; using equipment that is tested and properly functioning; interpretation by qualified physicians; and clear and prompt communication of results to patients and their referring healthcare providers. The MQSA establishes uniform baseline Federal standards designed to ensure that all women nationwide have access to quality mammography services, and its implementing regulations address standards for accreditation bodies and certifying agencies, qualifications of personnel at mammography facilities, standards for mammography equipment, quality assurance testing, recordkeeping, and communication of results. Based on technology changes in mammography and our experience with the administration of the MQSA program, FDA is proposing to modernize and improve the regulations as well as improve the information, including breast density information, provided by mammography facilities to patients and their healthcare providers. The proposed changes would require that the lay summary provided to patients identify whether the patient has low or high density breasts and include a prescribed paragraph on the significance of breast density. They would also establish four categories for reporting breast tissue density in the mammography report that is provided to the patient's referring healthcare provider.

The MQSA (Pub. L. 102-539) was enacted on October 27, 1992, and is codified under the Public Health Service (PHS) Act (42 U.S.C. 263b; section 354 of the PHS Act). Under the MQSA, all mammography facilities, except facilities of the Department of Veteran Affairs (VA), must be accredited by an approved accreditation body and certified by FDA (or an approved State certification agency) to provide mammography services (42 U.S.C. 263b(b)(1), (d)(1)(iv)). FDA is proposing these amendments to the mammography regulations (set forth in part 900 (21 CFR part 900)) under section 354 of the PHS Act (42 U.S.C. 263b), and sections of the FD&C Act (sections 519, 537, and 704(e); 21 U.S.C. 360i, 360nn, and 374(e)).

FDA is proposing three categories of improvements to our mammography regulations: Improvements that address changes in mammography technology; improvements that enhance enforcement of quality standards; and improvements in the way mammography results are categorized, reported, retained, and transferred to patients and healthcare providers.

• New and amended proposed provisions related to technology would, among other things, update several equipment and quality control provisions in the regulations to address current technology, including digital mammography.

• Improvements that enhance enforcement would, among other things:

○ Require that mammograms submitted for interpretation be presented in the mammographic modality in which they were originally produced, and not be copied or digitized, which could adversely affect the accuracy of interpretation;

○ Prohibit accreditation bodies from accepting an application for accreditation from a facility that has failed to become accredited after three consecutive attempts until 1 year after the most recent accreditation failure;

○ Expressly state that a facility's certificate may be suspended or revoked due to a failure to comply with reasonable requests by FDA, the State certification agency, or the accreditation body for records, including clinical images for an additional mammography review (AMR), or with reasonable requests by current or former facility personnel for records documenting their qualifications;

○ Add the State certification agency as an entity that may initiate an AMR, which can help detect quality issues, and also to state expressly that FDA and the State certification agency can notify patients and their providers individually or through the mass media when a facility is unable or unwilling to perform a required patient and referring physician notification (PPN), which would help to ensure that patients and providers are informed of serious risks to human health resulting from mammography that fails to meet quality standards;

○ Require that, before a facility closes or no longer provides mammography services, it must make arrangements for access by patients and healthcare providers to mammography images and reports; and

○ Require facilities to provide personnel with copies of their MQSA qualification records, which are often needed to work at additional or new facilities.

• Improvements in the way mammography results are categorized, reported, retained, and transferred to patients and healthcare providers would, among other things:

○ Require that the mammographic examination report include the facility name and location (at a minimum, the city, State, and ZIP code of the facility), in order to help to ensure that healthcare providers can obtain the necessary information to enable them to assist women in making informed healthcare decisions;

○ Change the explanatory language in one final assessment category (“benign”) to promote greater consistency and accuracy in the use of the category, and add three new categories of mammographic assessment to the existing categories in the regulations, which would allow mammography facilities to more precisely classify and communicate findings;

○ Add a specific, required timeframe for facilities to deliver medical reports to healthcare providers and the summary written in lay language to patients whose mammograms have either “Suspicious” or “Highly suggestive of malignancy” final assessment categories, which could lead to earlier definitive tissue diagnosis of malignancy and earlier start of treatment, and avoid, for the patient, the anxiety of a protracted waiting period;

○ Require reporting to patients and healthcare providers to include an assessment of breast density, in order to provide them with additional information about their mammography and the potential limitations of their mammogram results so they and their healthcare providers can make informed healthcare decisions;

○ Require each mammography facility to implement policies and procedures to minimize the loss of mammography images and reports because the loss of these records can have a significant, negative impact on clinical care, and also specify the timeframe within which facilities must transfer original mammograms and copies of reports to patients, healthcare providers, and others because delays in the transfer of these records can lead to delays in diagnosis or treatment; and

○ Clarify the minimum information that facilities must collect during the mammography medical outcomes audit because calculating and tracking these values is important to the evaluation of accuracy in detecting breast cancer, allowing facilities and interpreting physicians to review their performance and enact quality improvement measures.

The primary public health benefits of the proposed rule come from the potential for earlier breast cancer detection, improved morbidity and mortality, resulting in reductions in cancer treatment costs.

The quantified benefits are derived from reduced mortality and breast cancer treatment costs resulting from the breast density reporting requirements. The estimate of annualized benefits over 10 years ranges from $16.27 million to $466.75 million at a 7 percent discount rate and $16.27 million to $534.03 million at a 3 percent discount rate. The costs of the proposed rule include costs to mammography facilities to comply with the proposed requirements and costs associated with supplemental testing and biopsies resulting from the breast density requirements. The estimate of annualized costs over 10 years ranges from $34.96 million to $60.50 million at a 7 percent discount rate with a primary value of $47.03 million. Using a 3 percent discount rate, the annualized costs range from $33.86 million to $59.40 million with a primary value of $45.92 million. The primary estimate of the present value of costs over 10 years is $330.29 million at a 7 percent discount rate and $391.74 million at a 3 percent discount rate.

Background

On January 21, 2009, the Department of the Treasury (Treasury Department) and the IRS published a notice of proposed rulemaking (REG-143686-07) in the Federal Register (74 FR 3509) containing proposed regulations under sections 301, 302, 304, 351, 354, 355, 356, 358, 368, 861, 1001, and 1016 of the Code. On March 5, 2009, the Treasury Department and the IRS published corrections to the notice of proposed rulemaking in the Federal Register (74 FR 9575) (collectively, the 2009 Proposed Regulations).

The 2009 Proposed Regulations generally would have provided a single model for stock basis recovery by a shareholder that receives a distribution to which section 301 applies and a single model for sale and exchange transactions to which section 302(a) applies, including certain elements of an exchange in pursuance of a plan of reorganization under section 368. The 2009 Proposed Regulations also would have defined the scope of the exchange that must be analyzed under particular Code provisions and provided a methodology for determining gain under section 356 and stock basis under section 358.

The 2009 Proposed Regulations responded to comments received by the Treasury Department and the IRS regarding the then-recently published section 358 regulations. These comments included suggestions to expand the tracing rules of the section 358 regulations to stock transfers that are subject to section 351 but do not qualify as reorganizations, as well as questions regarding whether (and, if so, to what extent) shareholder elections constitute terms of an exchange and whether the terms of an exchange control for purposes of qualifying a transaction as a reorganization under section 368.

Finally, the 2009 Proposed Regulations included amendments to the current regulations under section 304 that would have updated those regulations to reflect statutory amendments to that section. See section 226 of the Tax Equity and Fiscal Responsibility Act of 1982, Pub. L. 97-248 (96 Stat. 325, 490) (September 3, 1982), section 712(l) of the Deficit Reduction Act of 1984, Pub. L. 98-369 (98 Stat. 494, 953-55) (July 18, 1984), section 1875(b) of the Tax Reform Act of 1986, Pub. L. 99-514 (100 Stat. 2085, 2894) (October 22, 1986), and section 1013 of the Taxpayer Relief Act of 1997, Pub. L. 105-34 (111 Stat. 788, 918) (August 5, 1997).

The Treasury Department and the IRS received many comments regarding the 2009 Proposed Regulations. The chief concern raised by commenters was that the approach taken in the 2009 Proposed Regulations represented an unwarranted departure from current law as a result of which minor changes to an overall business transaction could cause meaningful changes to the tax consequences, thereby elevating the form of the transaction over its substance.

After thoroughly considering the comments received, the Treasury Department and the IRS have determined that it is unlikely that the approach of the 2009 Proposed Regulations can be implemented in comprehensive final regulations without significant modifications. As a result, the Treasury Department and the IRS have decided to withdraw the 2009 Proposed Regulations. The Treasury Department and the IRS are continuing to study the issues addressed in the 2009 Proposed Regulations, with a particular focus on issues surrounding sections 301(c)(2) and 304, and § 1.302-2(c) of the Income Tax Regulations.

The Treasury Department and the IRS continue to believe that under current law, the results of a section 301 distribution should derive from the consideration received by a shareholder in respect of each share of stock, notwithstanding designations otherwise. See Johnson v. United States, 435 F.2d 1257 (4th Cir. 1971). The Treasury Department and the IRS also continue to believe that, under current law, with respect to redemptions governed by section 302(d), any unrecovered basis in the redeemed stock of a shareholder may be shifted to other stock only if such an adjustment is a proper adjustment within the meaning of § 1.302-2(c). Not all shifts of a redeemed shareholder's unrecovered basis result in proper adjustments, and certain basis adjustments can lead to inappropriate results. See, e.g., Notice 2001-45, 2001-33 I.R.B. 129.

The principal author of this withdrawal notice is Aglaia Ovtchinnikova of the Office of Associate Chief Counsel (Corporate). However, other personnel from the Treasury Department and the IRS participated in its development.

The Captain of the Port Sector Ohio Valley (COTP) proposes to update the current list of recurring special local regulations found in Table 1 of 33 CFR 100.801.

This rule updates the list of annually recurring special local regulations under 33 CFR 100.801, Table 1 for annual special local regulations in the COTP zone. The Coast Guard will address all comments through response via the rulemaking process, including additional revisions to this regulatory section. Additionally, these recurring events are provided to the public through local means and planned by the local communities.

The current list of annual and recurring special local regulations occurring in Sector Ohio Valley's AOR is published under 33 CFR part 100.801, Table 1. The most recent list was created May 14, 2018 via 83 FR 22194.

The Coast Guard's authority for establishing a special local regulation is contained at 46 U.S.C. 70041(a). The Coast Guard is amending and updating the special local regulations under 33 CFR part 100.801, Table 1 to include the most up to date list of recurring special local regulations for events held on or around navigable waters within Sector Ohio Valley's AOR. These events include marine parades, boat races, swim events, and other marine related events. The current list under 33 CFR 100.801, Table 1 requires amendment to provide new information on existing special local regulations, add new special local regulations expected to recur annually or biannually, and remove special local regulations that are no longer required. Issuing individual regulations for each new special local regulation, amendment, or removal of an existing special local regulation creates unnecessary administrative costs and burdens. This single proposed rulemaking will considerably reduce administrative overhead and provide the public with notice through publication in the Federal Register of recurring special local regulations.

The Coast Guard is issuing this notice of proposed rulemaking (NPRM) with a 15-day prior notice and opportunity to comment pursuant to section (b)(3) of the Administrative Procedure Act (APA) (5 U.S.C. 553). This provision authorizes an agency to publish a rule in less than 30 days before its effective date for “good cause found and published with the rule.” Under 5 U.S.C. 553(b)(3)(B), the Coast Guard finds that good cause exists for publishing this NPRM with a 15-day comment period because it is impractical to provide a 30-day comment period. These proposed regulated areas are necessary to ensure the safety of vessels and persons during the marine events. It is impracticable to publish an NPRM with a 30-day comment period because some of these updates must be established as early as the end of April 2019. A 15-day comment period would allow the Coast Guard to provide for public notice and comment, but also update the regulated areas soon enough that the length of the notice and comment period does not compromise public safety. The Coast Guard is proposing this rulemaking under authority in 46 U.S.C. 70034 (previously 33 U.S.C. 1231).

Part 100 of 33 CFR contains regulations to provide effective control over regattas and marine parades conducted on U.S. navigable waters in order to ensure the safety of life in the regatta or marine parade area. Section 100.801 provides the regulations applicable to events taking place in the Eighth Coast Guard District and also provides a table listing each event and special local regulation. This section requires amendment from time to time to properly reflect the recurring special local regulations. This proposed rule updates Section 100.801, Table 1 for Sector Ohio Valley.

This proposed rule adds one new recurring special local regulation, removes two special local regulations, and amends the dates and regulated areas for ten recurring special local regulations already listed.

This proposed rule would add one new recurring special local regulation in Table 1 of Section 100.801 for Sector Ohio Valley, as follows:

This proposed rule would remove the following two special local regulations from Table 1 of Section 100.801 because these events are no longer held:

This proposed rule would revise ten existing special local regulations in Table 1 of Section 100.801, as follows:

The effect of this proposed rule would be to restrict general navigation during these events. Vessels intending to transit the designated waterway through the special local regulations will only be allowed to transit the area when the COTP Ohio Valley, or designated representative, has deemed it safe to do so or at the completion of the event.

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

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

The Coast Guard expects the economic impact of this proposed rule to be minimal, therefore a full regulatory evaluation is unnecessary. This proposed rule establishes special local regulations limiting access to certain areas under 33 CFR 100 within Sector Ohio Valley's AOR. The effect of this proposed rulemaking will not be significant because these special local regulations are limited in scope and duration. Additionally, the public is given advance notification through local forms of notice, the Federal Register , and/or Notices of Enforcement and, thus, will be able to plan operations around the special local regulations accordingly. Broadcast Notices to Mariners and Local Notices to Mariners will also inform the community of these special local regulations. Vessel traffic may request permission from the COTP or a designated representative to enter the restricted area.

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

While some owners or operators of vessels intending to transit the safety zone may be small entities, for reasons stated in section IV.A. above, this proposed rule would not have a significant economic impact on any owner or operator because they are limited in scope and will be in effect for short periods of time. Before the enforcement period, the Coast Guard COTP will issue maritime advisories widely available to waterway users. Deviation from the special local regulations established through this proposed rulemaking may be requested from the appropriate COTP and requests will be considered on a case-by-case basis.

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

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

This proposed rule 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 proposed rule under that Order and have determined that it is consistent with the fundamental federalism principles and preemption requirements described in Executive Order 13132.

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

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

We have analyzed this proposed rule under Department of Homeland Security Management Directive 023-01 and Commandant Instruction M16475.lD, which guide the Coast Guard in complying with the National Environmental Policy Act of 1969 (NEPA) (42 U.S.C. 4321-4370f), and have made a preliminary determination that this action is one of a category of actions that do not individually or cumulatively have a significant effect on the human environment. Normally such actions are categorically excluded from further review under paragraph L61 of Appendix A, Table 1 of DHS Instruction Manual 023-01-001-01, Rev. 01. of the Instruction because it involves establishment of special local regulations related to marine event permits for marine parades, regattas, and other marine events. We seek any comments or information that may lead to the discovery of a significant environmental impact from this proposed rule.

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

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

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

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

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

For the reasons discussed in the preamble, the U.S. Coast Guard proposes to amend 33 CFR part 100 as follows:

I. Table of Abbreviations CFR Code of Federal Regulations DHS Department of Homeland Security FR Federal Register IGLD85 International Great Lakes Datum of 1985 LWD Low Water Datum based on IGLD 85 OMB Office of Management and Budget NPRM Notice of Proposed Rulemaking (Advance, Supplemental) §  Section U.S.C. United States Code II. Background, Purpose and Legal Basis

The River Rouge discharges into the Detroit River at the south end of the city of Detroit, about 2 miles above Fighting Island. A Federal project has improved River Rouge to create a turning basin about 2.5 miles above the entrance. With the exception of a few pleasure vessels the channel is almost exclusively used by large commercial vessels to access various industries along the river. All four drawbridges over the river are required to open on signal and are manned 24-hours a day, 7-days a week. The River Rouge supports foreign and domestic trade in steel production, cement, petroleum refinery, aggregate, and other bulk commodities imported or exported by vessels. The River Rouge is not listed as an American Heritage River; however, the Detroit River is designated an American Heritage River and a Canadian Heritage River.

The Conrail Railroad Bridge is a single leaf bascule bridge. A horizontal navigation clearance of 123 feet is available. Eight feet of vertical clearance, referred to LWD is available in the closed position. The Conrail Bridge is advertised as having unlimited clearance in the open position; however, the tip of the bridge leaf does encroach slightly into the northern boundary of the navigation channel. The Federal Channel has a bend in the river immediately west of the Conrail Bridge. Because of this bend most large commercial vessels will not enter the river unless they have conformation that this bridge is opened.

The Coast Guard is issuing this NPRM under authority 33 U.S.C. 499.

This notice proposes a new rule for the regulations to allow the Conrail Bridge to operate remotely.

Bridge owners are required to provide necessary drawtenders for the safe and prompt opening of a bridge and to respond to visual, sound, or radiotelephone communications for openings; unless, authorized by the U.S. Coast Guard District Commander to operate remotely.

Conrail installed the following equipment at the bridge to be considered for remote operations: A public address system that allows 2-way voice communication between vessels and the remote tender; eight digital cameras; two thermal imagery cameras looking upriver and downriver to detect vessels in reduced visibility; and remotely operated VHF-FM Marine Radiotelephone that monitors Channel 16 and Channel 12. All of the listed equipment uses fiber optic technologies to connect to the remote tender. During the comment period a tender will be required to be physically at the bridge to evaluate the remote operations and to intervene if there is a failure in the remote abilities. If this rule is approved, then the bridge will be operated remotely from Mount Laurel, NJ but can also be operated from Detroit, MI, if needed. If there is a discrepancy with the remote equipment Conrail estimates it will take 60-minutes for a tender to arrive at the bridge.

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

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

This regulatory action determination is based on the ability that vessels can still transit the bridge and the bridge will continue to open on signal.

The Regulatory Flexibility Act of 1980 (RFA), 5 U.S.C. 601-612, as amended, requires federal agencies to consider the potential impact of regulations on small entities during rulemaking. The term “small entities” comprises small businesses, not-for-profit organizations that are independently owned and operated and are not dominant in their fields, and governmental jurisdictions with populations of less than 50,000. The Coast Guard certifies under 5 U.S.C. 605(b) that this proposed rule would not have a significant economic impact on a substantial number of small entities. While some owners or operators of vessels intending to transit the bridge may be small entities, for the reasons stated in section IV.A above this proposed rule would not have a significant economic impact on any vessel owner or operator because the bridge will continue to open on signal.

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

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

This proposed rule would call for no new collection of information under the Paperwork Reduction Act of 1995 (44 U.S.C. 3501-3520.).

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

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

We have analyzed this proposed rule under Department of Homeland Security Management Directive 023-01 and Commandant Instruction M16475.lD, which guides the Coast Guard in complying with the National Environmental Policy Act of 1969 (NEPA) (42 U.S.C. 4321-4370f), and have made a preliminary determination that this action is one of a category of actions which do not individually or cumulatively have a significant effect on the human environment. This proposed rule simply promulgates the operating regulations or procedures for drawbridges. Normally such actions are categorically excluded from further review, under figure 2-1, paragraph (32)(e), of the Instruction.

A preliminary Record of Environmental Consideration and a Memorandum for the Record are not required for this proposed rule. We seek any comments or information that may lead to the discovery of a significant environmental impact from this proposed rule.

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

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

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

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

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

For the reasons discussed in the preamble, the Coast Guard proposes to amend 33 CFR part 117 as follows:

I. Background and Analysis

North Carolina has a SIP-approved construction and operating permit program at 15 North Carolina Administrative Code (NCAC) 02Q.0300— Construction and Operation Permits. 1 These regulations set forth the State's process for issuing combined construction and operating permits. They do not apply to Title V permits issued by NCDAQ. See 15A NCAC 02Q.0301(a).

On January 12, 2018, NCDAQ submitted a SIP revision to 15 NCAC 02Q.0308— Final Action on Permit Applications, which was state effective on January 1, 2015. 2 The January 12, 2018, submittal requests minor typographical/administrative edits to 15 NCAC 02Q.0308. For example, the submittal fixes a grammar error in 15 NCAC 02Q.0308(b) by replacing the word “which” with the word “that” in the first sentence. In addition, the submittal changes the permit term (duration) for combined construction and operating permits from five years, or less as determined reasonable by the Director, to eight years. This permit term in Section .0308 affects only minor sources because sources subject to Title V ( i.e., major sources) are subject to the separate operating permit term provisions of North Carolina's Title V program.

In this action, EPA is proposing to approve changes to 02Q Section .0308, Final Action on Permit Applications, included in the January 12, 2018, submittal. EPA has preliminarily concluded that the minor typographical/administrative edits are approvable because they do not alter the meaning of the rule, and that the revision to the permit term is approvable because it is not inconsistent with the Act, including the Agency's preconstruction review requirements at 40 CFR 51.160-164. EPA notes that the revision merely changes the duration of the permit from five years to eight years and does not affect any emission limits or other permit conditions. Thus, EPA does not believe the revision will interfere with any applicable requirement concerning attainment and reasonable further progress, or any other applicable requirement of the Act. EPA is accordingly proposing to approve the changes included in the January 12, 2018, submittal.

In this document, EPA is proposing to include in a final EPA rule regulatory text that includes incorporation by reference. In accordance with requirements of 1 CFR 51.5, EPA is proposing to incorporate by reference under Subchapter 02Q, Air Quality Permits of the North Carolina SIP, Section .0308, titled Final Action of Permit Applications, state effective January 1, 2015, which revises the permit renewal period for non-title V permits to eight years, and makes other administrative/typographical edits. 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).

EPA is proposing to approve the SIP revision submitted by the NCDAQ on January 12, 2018, consisting of changes to 15 NCAC 02Q.0308, state effective January 1, 2015. These changes modify the permit term for non-title V combined construction and operating permits and make other typographical/administrative edits.

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. This action merely proposes to approve state law as meeting Federal requirements and does not impose additional requirements beyond those imposed by state law. For that reason, this proposed 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).

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 as specified by Executive Order 13175 (65 FR 67249, November 9, 2000), nor will it impose substantial direct costs on tribal governments or preempt tribal law.

Throughout this document “we,” “us,” or “our” each mean “the EPA.”

Regional haze is visibility impairment that occurs over a wide geographic area primarily from the pollution of fine particles (PM 2.5 ) emitted into the air. 1 Fine particles causing haze consist of sulfates (SO 4 2   − ), nitrates (NO 3 − ), organics, elemental carbon (EC), and soil dust. 2 Airborne PM 2.5 can scatter and absorb the incident light and, therefore, lead to atmospheric opacity and horizontal visibility degradation. Regional haze limits visual distance and reduces color, clarity, and contrast of view. PM 2.5 can cause serious adverse health effects and mortality in humans. It also contributes to environmental effects such as acid deposition and eutrophication. Emissions that affect visibility include a wide variety of natural and man-made sources. Reducing PM 2.5 and its precursor gases in the atmosphere is an effective method of improving visibility. PM 2.5 precursors consist of sulfur dioxide (SO 2 ), nitrogen oxides (NO X ), ammonia (NH 3 ), and volatile organic compounds (VOCs).

Data from the existing visibility monitoring network, “Interagency Monitoring of Protected Visual Environments” (IMPROVE), shows that visibility impairment caused by air pollution occurs virtually all of the time at most national parks and wilderness areas. In 1999, the average visual range  3 in many Class I areas ( i.e., national parks and memorial parks, wilderness areas, and international parks meeting certain size criteria) in the western United States was 100-150 kilometers (km), or about one-half to two-thirds of the visual range that would exist under estimated natural conditions. 4 In most of the eastern Class I areas of the United States, the average visual range was less than 30 km, or about one-fifth of the visual range that would exist under estimated natural conditions. CAA programs have reduced emissions of some haze-causing pollution, lessening some visibility impairment and resulting in partially improved average visual ranges. 5

In section 169A of the 1977 CAA Amendments, Congress created a program for protecting visibility in the nation's national parks and wilderness areas. This section of the CAA establishes as a national goal the prevention of any future, and the remedying of any existing, visibility impairment in mandatory Class I Federal areas where impairment results from manmade air pollution. 6 Congress added section 169B to the CAA in 1990 that added visibility protection provisions, and the EPA promulgated final regulations addressing regional haze as part of the 1999 Regional Haze Rule, which was most recently updated in 2017. 7 The Regional Haze Rule revised the existing 1980 visibility regulations and established a more comprehensive visibility protection program for Class I areas. The requirements for regional haze, found at 40 CFR 51.308 and 51.309, are included in the EPA's broader visibility protection regulations at 40 CFR 51.300-309. The regional haze regulations require states to demonstrate reasonable progress toward meeting the national goal of a return to natural visibility conditions for Class I areas both within and outside states by 2064. The CAA requirement in section 169A(b)(2) to submit a regional haze SIP applies to all fifty states, the District of Columbia, and the Virgin Islands. States were required to submit the first implementation plan addressing visibility impairment caused by regional haze no later than December 17, 2007. 8

Section 169A(b)(2)(A) of the CAA directs states to evaluate the use of Best Available Retrofit Technology (BART) controls at certain categories of existing major stationary sources  9 built between 1962 and 1977. These large, often under-controlled, older stationary sources are required to procure, install, and operate BART controls to address visibility impacts from them. Under the Regional Haze Rule, any of these BART-eligible sources  10 that are reasonably anticipated to cause or contribute to visibility impairment in a Class I area are determined to be subject-to-BART. 11 States are directed to conduct BART determinations for each source classified as subject-to-BART. 40 CFR 51.308(e)(1)(ii)(A) requires states (or EPA in the case of a FIP) to identify the level of control representing BART after considering the five statutory factors set out in CAA section 169A(g)(2). States must establish emission limits, a schedule of compliance, and other measures consistent with the BART determination process for each source subject-to-BART. In lieu of requiring source-specific BART controls, states also have the flexibility to adopt alternative measures, as long as the alternative provides greater reasonable progress toward improving visibility than BART. Namely, the alternative must be “better than BART.”  12

Arkansas submitted a regional haze SIP on September 9, 2008, to address the requirements of the first regional haze implementation period. On August 3, 2010, the State submitted a SIP revision with mostly non-substantive changes that addressed Arkansas Pollution Control and Ecology Commission (APCEC) Regulation 19 Chapter 15. 13 On September 27, 2011, the State submitted supplemental information to address the regional haze requirements. The EPA collectively refers to the original 2008 submittal and these revisions together as the 2008 Arkansas Regional Haze SIP. On March 12, 2012, the EPA partially approved and partially disapproved the 2008 Arkansas Regional Haze SIP. 14 Specifically, the EPA disapproved certain BART compliance dates; the State's identification of certain BART-eligible sources and subject-to-BART sources; certain BART determinations for NO X , SO 2 , and PM; the State's reasonable progress analysis and RPGs; and a portion of the State's long-term strategy (LTS). The remaining provisions of the 2008 Arkansas Regional Haze SIP were approved. The final partial disapproval started a two-year federal implementation plan (FIP) clock that obligated the EPA to either approve a SIP revision or promulgate a FIP to address the disapproved portions of the action. 15 Because a SIP revision was not received and since the FIP clock expired in April 2014, the EPA promulgated a FIP (the Arkansas Regional Haze FIP) on September 27, 2016 to address the disapproved portions of the 2008 Arkansas Regional Haze SIP. 16 Among other things, the FIP established SO 2 , NO X , and PM emission limits under the BART requirements for nine units at six facilities: Arkansas Electric Cooperative Corporation (AECC) Carl E. Bailey Plant Unit 1 Boiler; AECC John L. McClellan Plant Unit 1 Boiler; SWEPCO Flint Creek Plant Boiler No. 1; Entergy Lake Catherine Plant Unit 4 Boiler; Entergy White Bluff Plant Units 1 and 2 Boilers and the Auxiliary Boiler; and the Domtar Ashdown Mill Power Boilers No. 1 and 2. The FIP also established SO 2 and NO X emission limits under the reasonable progress requirements for the Entergy Independence Plant Units 1 and 2.

Following petitions for reconsideration  17 submitted by the State, industry, and ratepayers, the EPA issued a partial administrative stay of the effectiveness of the FIP for ninety days on April 25, 2017. 18 During that period, on July 12, 2017, the State submitted a proposed SIP submittal (the Arkansas Regional Haze NO X SIP revision) to address NO X BART requirements for all EGUs and the reasonable progress requirements with respect to NO X . These NO X provisions were previously disapproved by the EPA in our 2012 final action for the 2008 Arkansas Regional Haze SIP. The Arkansas Regional Haze NO X SIP submittal replaced all source-specific NO X BART determinations established in the FIP with reliance upon the Cross-State Air Pollution Rule (CSAPR) emissions trading program for ozone (O 3 ) season NO X as an alternative to NO X BART. The SIP submittal addressed the NO X BART requirements for Bailey Unit 1, McClellan Unit 1, Flint Creek Boiler No. 1, Lake Catherine Unit 4; White Bluff Units 1 and 2, and the Auxiliary Boiler. The revision did not address NO X BART for Domtar Ashdown Mill Power Boilers No. 1 and 2. On February 12, 2018, we took final action to approve the Arkansas Regional Haze NO X SIP revision and to withdraw the corresponding parts of the FIP. 19

The State submitted another SIP revision (the Arkansas Regional Haze SO 2 and PM SIP revision) on August 8, 2018, that addressed most of the remaining parts of the 2008 Arkansas Regional Haze SIP disapproved in 2012. The August 8, 2018 SIP submittal was intended to replace the federal SO 2 and PM BART determinations for EGUs as well as the reasonable progress determinations established in the FIP with the State's own determinations. Specifically, the SIP revision addressed the applicable SO 2 and PM BART requirements for Bailey Unit 1; SO 2 and PM BART requirements for McClellan Unit 1; SO 2 BART requirements for Flint Creek Boiler No. 1; SO 2 BART requirements for White Bluff Units 1 and 2; SO 2 , NO X , and PM BART requirements for the White Bluff Auxiliary Boiler;  20 and Lake Catherine Unit 4. The submittal addressed the reasonable progress requirements for Independence Units 1 and 2 and all other sources in Arkansas. In addition, it established revised RPGs for Arkansas' two Class I areas and revised the State's long-term strategy provisions. The submittal did not address BART and associated long-term strategy requirements for Domtar Ashdown Mill Power Boilers No. 1 and 2. On November 30, 2018, we proposed approval of the Arkansas Regional Haze SO 2 and PM SIP revision and to withdraw the corresponding parts of the FIP. 21

Under 40 CFR 51.308(g), each state is required to submit a progress report that evaluates progress toward the RPGs for each Class I area within the state and each Class I area outside the state which may be affected by emissions from within the state. In addition, 40 CFR 51.308(h) requires states to submit, at the same time as the progress report, a determination of adequacy of the existing regional haze implementation plan. 22 The progress report for the first planning period is due five years after submittal of the initial regional haze SIP and must take the form of a SIP revision. Arkansas submitted its initial regional haze SIP on September 9, 2008.

On June 2, 2015, Arkansas submitted its progress report to the EPA in the form of a SIP revision under 40 CFR 51.308. As described in further detail in section II of this proposed rulemaking, to address the progress report requirements, the State provided: (1) A description of the status of measures in the approved regional haze SIP; (2) a summary of emission reductions achieved; (3) an assessment of visibility conditions for each Class I area in the state (and for two Class I areas in Missouri); (4) an analysis tracking the changes in emissions from sources and activities within the state; (5) an assessment of any significant changes in anthropogenic emissions within or outside the state that have limited or impeded progress in reducing pollutant emissions and improving visibility; (6) an assessment of whether the approved regional haze SIP elements and strategies are sufficient to enable the State (and other states with Class I areas affected by emissions from the state) to meet all established RPGs; (7) a review of the State's visibility monitoring strategy; and (8) a determination of adequacy of the existing implementation plan.

On June 2, 2015, the EPA received Arkansas' periodic report on progress for the State's regional haze SIP in the form of a SIP revision. That submission is the subject of this proposed approval. The periodic report for the first implementation period assessed visibility progress toward the 2018 RPGs for Class I areas in the state. It also assessed visibility progress in general for two Class I areas in Missouri that may be affected by emissions from within the state. The progress report asserted that Arkansas was committed to remedying the disapproved portions of the 2008 Arkansas Regional Haze SIP submission. At this time, the Arkansas Regional Haze NO X SIP revision, 23 the Arkansas Regional Haze SO 2 and PM SIP revision (if EPA's proposed approval is finalized), 24 and the remaining part of the FIP that addresses the BART and associated long-term strategy requirements for Domtar together fully address the deficiencies of the 2008 Arkansas Regional Haze SIP. These deficiencies were previously identified in 2012 by the EPA and acknowledged by ADEQ in its June 2, 2015 progress report SIP. The 2018 Arkansas Regional Haze SO 2 and PM SIP submission provides more recent visibility information in addition to the visibility data presented by ADEQ in the 2015 progress report. The recent data shows visibility improvement that is exceeding the revised visibility goals set for 2018 for the Arkansas Class I areas. Furthermore, up-to-date emission trends indicate that SO 2 , NO X , and PM emissions have all been decreasing. The EPA is, therefore, proposing to approve Arkansas' progress report on the basis that it satisfies the requirements of 40 CFR 51.308(g) and (h), as explained in further detail in each subsequent section.

Arkansas has two Class I areas within its borders that are addressed in the progress report: Upper Buffalo and Caney Creek Wilderness areas. 25 Visibility impairment at Arkansas' two Class I areas was tracked in units of deciviews, 26 which is related to the cumulative sum of visibility impairment from individual aerosol species as measured by two monitors in the IMPROVE Network.

Through collaboration with the Central Regional Air Planning Association (CENRAP), 27 ADEQ worked with the central states to assess state-by-state contributions to visibility impairment in specific Class I areas in Arkansas and those affected by emissions from Arkansas. ADEQ used CENRAP as the main vehicle for developing its regional haze SIP for the first implementation period. The results reported by ADEQ in the progress report compared available monitored visibility conditions to improvements that were projected based on the technical analysis and emission inventories that were a part of the CENRAP modeling. 28 CENRAP generated regional photochemical modeling results, visibility projections, and source apportionment modeling to assist in identifying contributions to visibility impairment at Caney Creek and Upper Buffalo Wilderness Areas in Arkansas. ADEQ also indicated through CENRAP modeling results that two Class I areas outside Arkansas' borders at Hercules Glades and Mingo Wilderness areas in Missouri were impacted by emissions from within Arkansas. In the ensuing sections, we discuss how the State addressed the progress report requirements under 40 CFR 51.308(g) and (h) for these Class I areas, and we show our analysis and proposed determination as to whether the State satisfied the requirements.

The State evaluated the status of implementation of all measures in its 2008 Arkansas Regional Haze SIP in accordance with the requirements under 40 CFR 51.308(g). 29 These measures were designed to address sulfate, particulate organic matter, and nitrate, which are the three largest contributors  30 to visibility impairment at Upper Buffalo and Caney Creek Wilderness areas. Ammonium sulfate is primarily from SO 2 precursor emissions from EGU point sources;  31 nitrate is primarily from mobile and point sources emissions; and particulate organic matter is from area sources, particularly emissions from fires. 32 The major measures identified in the 2008 Arkansas Regional Haze SIP to control these pollutants and listed in the progress report are as follows:

In the 2008 Arkansas Regional Haze SIP, the State determined that there were eighteen facilities in Arkansas with BART-eligible sources. 33 34 The State chose to exempt those sources that did not contribute to visibility impairment by performing a source-specific screening analysis using CALPUFF modeling. After eliminating BART-eligible sources whose modeled contributions to visibility impairment were below the 0.5 dv threshold limit, nine boiler units from six different facilities were found to be subject-to-BART  35 and are reflected in Table 2.2 of the progress report. 36 In addition to these subject-to-BART units determined by the State in the 2008 Arkansas Regional Haze SIP, the progress report also included additional units from Georgia-Pacific Paper. As discussed in section I.B of this proposed action, the BART portion of the 2008 Arkansas Regional Haze SIP was partially approved and partially disapproved in our 2012 final action. 37 We approved Arkansas' identification of BART-eligible sources from the 2008 Arkansas Regional Haze SIP with the exception of Georgia-Pacific's 6A Boiler, which we found to be BART-eligible, instead of being excluded as stated by the State in the 2008 Arkansas Regional Haze SIP. The EPA also approved the State's identification of subject-to-BART sources, with the exception of the 6A and 9A Boilers at Georgia-Pacific, which we found to be subject-to-BART instead of exempt. 38 Because of this, the progress report included Georgia-Pacific's 6A and 9A Boilers as subject-to-BART at the time of its submittal in 2015. However, despite the EPA's previous disapproval of ADEQ's exemption finding, following the company's recent submission of additional technical information and analyses, the EPA ultimately agreed that Georgia Pacific's 6A and 9A Power Boilers are BART-eligible, but are not subject-to-BART. ADEQ provided documentation supporting this determination in Appendix A of the 2018 Arkansas Regional Haze SO 2 and PM SIP revision that the EPA proposed for approval on November 30, 2018. Therefore, the State's most recent identification of subject-to-BART units in the Arkansas Regional Haze SO 2 and PM SIP revision is the same as originally presented in the 2008 Arkansas Regional Haze SIP (see Table 1):

ADEQ was unable to determine at the time of the progress report's submission when revisions to the 2012 disapproved portions of the SIP would be submitted to the EPA. ADEQ was working then with facilities and the EPA to develop the required five-factor analyses to address the disapproved BART determinations. Consequently, updated BART determinations and emission limits were not listed in the progress report by the State because they were not yet available. The BART determinations that were approved in 2012 were findings that the existing limitations met the BART requirements. Therefore, as of the submittal date of the progress report, there were not any new emission reductions from subject-to-BART sources in Arkansas due to implementation of BART limits more stringent than the existing limits. Accordingly, there were no required efforts to implement new measures on which the progress report was required to provide information. The EPA approved the following BART determinations in 2012 for the 2008 Arkansas Regional Haze SIP: PM determination on SWEPCO Flint Creek Plant Boiler No. 1; SO 2 and PM determinations for the natural gas firing scenario for Entergy Lake Catherine Plant Unit 4; PM determinations for both bituminous and sub-bituminous coal firing scenarios for Entergy White Bluff Plant Units 1 and 2; and PM determination for Domtar Ashdown Mill Power Boiler No. 1. 39

Subsequent to the June 2015 progress report submittal, the EPA finalized a FIP in 2016 that established new BART emission limits for the 2012 disapproved determinations. 40 The FIP established SO 2 , NO X , and PM emission limits under the BART requirements for nine units at six facilities: SO 2 , NO X , and PM BART for AECC Bailey Plant Unit 1 and the AECC McClellan Plant Unit 1; SO 2 and NO X BART for SWEPCO Flint Creek Plant Boiler No. 1; NO X BART for the natural gas firing scenario for Entergy Lake Catherine Plant Unit 4;  41 SO 2 and NO X BART for Entergy White Bluff Plant Units 1 and 2; SO 2 , NO X , and PM BART for Entergy White Bluff Plant Auxiliary Boiler; SO 2 and NO X BART for Domtar Ashdown Mill Power Boiler No. 1; and SO 2 , NO X and PM BART for Domtar Ashdown Mill Power Boiler No. 2. The FIP also established SO 2 and NO X emission limits under the reasonable progress requirements for Entergy Independence Units 1 and 2.

The State mentioned in the progress report that it was committed to correcting the 2012 disapproved portions of the 2008 Arkansas Regional Haze SIP. As described below and elsewhere, the State has made two submissions to fulfill this commitment. Each SIP revision contained updated BART determinations intended to replace the applicable FIP established limits from 2016.

First, on February 12, 2018, the EPA approved the 2017 Arkansas Regional Haze NO X SIP revision. 42 That submittal addressed the NO X BART determinations established in the FIP for the Arkansas subject-to-BART EGUs by replacing them with reliance upon the CSAPR emissions trading program for O 3 season NO X as an alternative to source-specific NO X BART. The Arkansas Regional Haze NO X SIP revision also established that no new NO X emission controls were required beyond participation in CSAPR for O 3 season NO X for any source to achieve reasonable progress for the first implementation period.

Second, on August 8, 2018, the State submitted the Arkansas Regional Haze SO 2 and PM SIP revision. That submittal addressed all remaining disapproved parts of the 2008 Arkansas Regional Haze SIP, with exception of the BART and associated long-term strategy requirements for the Domtar Ashdown Mill Power Boilers No. 1 and 2. The majority of the BART determinations in that SIP revision were essentially identical to the BART determinations in the FIP except for different BART requirements for White Bluff units 1 and 2. 43 The submittal established that each White Bluff unit was to comply with an updated SO 2 BART emission limit of 0.60 lb/MMBtu. That is based on the use of low sulfur coal and an enforceable commitment to cease coal combustion by the end of 2028. The submittal also established a new NO X emission limit of 32.2 pounds per hour (pph) to satisfy NO X BART for White Bluff's auxiliary boiler, replacing the determination in the Arkansas Regional NO X SIP revision (relying upon CSAPR to satisfy NO X BART) that we previously approved. The State made all of these BART determinations enforceable through administrative orders. 44 The State determined that no additional SO 2 or PM controls beyond BART were necessary for reasonable progress during the first planning period. 45 The EPA proposed to approve a large portion of the SIP revision on November 30, 2018. 46

The Arkansas Regional Haze NO X SIP revision, 47 the Arkansas Regional Haze SO 2 and PM SIP revision (if EPA's proposed approval is finalized), 48 and the remaining part of the FIP that addresses the BART and associated long-term strategy requirements for Domtar together fully address the deficiencies of the 2008 Arkansas Regional Haze SIP previously identified in 2012 by the EPA. The EPA is collectively providing all of these updated BART determination emission limits in Table 2 below since they were not all available at the time of the progress report's submission.

In the Arkansas Regional Haze NO X SIP revision and the Arkansas Regional Haze SO 2 and PM SIP revision, ADEQ evaluated the need for additional source controls under the reasonable progress requirements. In determining reasonable progress, CAA section 169(A)(g)(1) requires states to examine the cost of compliance, the time necessary for compliance, energy and non-air quality environmental impacts, and remaining useful life. In the Arkansas Regional Haze NO X SIP revision, the State determined that no additional NO X controls beyond participation in CSAPR for O 3 season NO X were necessary to satisfy the reasonable progress requirement with respect to NO X for the first implementation period. 49 As discussed in Section II of our proposed action on the Arkansas Regional Haze SO 2 and PM SIP revision, ADEQ determined that no additional SO 2 and PM controls at Independence Units 1 and 2 or any other Arkansas sources are necessary under reasonable progress for the first implementation period. 50

In 2005, the EPA issued CAIR, 51 which participating states could rely on in lieu of BART for EGUs. 52 CAIR was designed to address power plant pollution transported from one state to another via a cap-and-trade system to reduce SO 2 and NO X emissions as the target pollutants. 53 In December 2008, the D.C. Circuit remanded CAIR to the EPA, leaving existing CAIR programs in place while directing the EPA to replace them with a new rule. 54 Although CAIR was remanded, CAIR remained in effect at the time of the progress report's development and sources in Arkansas continued to comply with the state and federal requirements associated with CAIR. CAIR consisted of two phases of reductions for NO X and SO 2 . Phase I ran from 2009 to 2014 and Arkansas' NO X budget amounted to 11,514 tons NO X per annual O 3 season. Phase II begun in 2015 and was set to continue indefinitely with Arkansas' NO X budget set at 9,116 tons NO X per annual O 3 season. Table 2.3 of the progress report shows the NO X O 3 season allocations distributed among the different Arkansas sources for the 2009 to 2017 time-period.

In 2011, the EPA finalized CSAPR to replace CAIR. 55 In 2012, the EPA published a final rule allowing states that participate in the CSAPR trading program to rely on CSAPR to satisfy BART for EGUs, 56 including states participating only for O 3 season NO X . 57 CSAPR requires 28 eastern states to reduce power plant emissions that contribute to O 3 and PM 2.5 pollution in other states. The rule requires reductions in O 3 season NO X emissions that cross state lines for certain states under the O 3 requirements, and reductions in annual SO 2 and NO X emissions for certain states under the PM 2.5 requirements. The EPA set emission budgets for each state covered by CSAPR. Allowances are allocated to affected sources based on these state emission budgets. 58

Since promulgating the use of CSAPR as an alternative to source-specific BART for EGUs, the EPA has promulgated an update to the CSAPR program with more stringent budgets. 59 The CSAPR update revised the O 3 season NO X budget for Arkansas EGUs from 15,110 tons NO X in 2015 to 12,048 tons NO X (10,132 tons NO X allocated to existing EGUs) in 2017 with a further reduction to 9,210 tons NO X (7,781 tons NO X allocated to existing EGUs) in 2018 and beyond. 60 Participation in CSAPR for O 3 season NO X is federally enforceable under 40 CFR 52.38.

On February 12, 2018, we approved the Arkansas Regional Haze NO X SIP revision (effective March 14, 2018) which replaced all source-specific NO X BART determinations for EGUs established in the FIP with reliance upon the CSAPR emissions trading program for O 3 season NO X as an alternative to NO X BART. 61 The O 3 season NO X requirements under CSAPR apply to all subject-to-BART units in Table 1 of this proposed action except the Domtar No. 1 and 2 Power Boilers, and the White Bluff Auxiliary Boiler. The Arkansas Regional Haze NO X SIP revision addressed the NO X BART requirements for Bailey Unit 1, McClellan Unit 1, Flint Creek Boiler No. 1, Lake Catherine Unit 4; White Bluff Units 1 and 2, and the Auxiliary Boiler. In that SIP submittal, ADEQ erroneously identified White Bluff's Auxiliary Boiler as participating in CSAPR for O 3 season NO X and elected to rely on participation in that trading program to satisfy the Auxiliary Boiler's NO X BART requirements. Although we approved the SIP submittal on February 12, 2018, 62 our approval of the State's reliance on CSAPR for O 3 season NO X to satisfy the BART requirements for the Auxiliary Boiler was made in error. Therefore, we proposed to withdraw our approval of the State's reliance upon CSAPR for the Auxiliary Boiler and replace it with our approval of a source-specific 32.2 pph NO X BART emission limit related to the Arkansas Regional Haze SO 2 and PM SIP submitted on November 30, 2018. 63

In accordance with Subchapter 11.4.1.6 of the 2008 Arkansas Regional Haze SIP, ADEQ tracked source retirement and replacement through ongoing point source inventories. 64 65 The progress report showed that ADEQ has performed this tracking. Five new permitted Prevention of Significant Deterioration (PSD) facilities were inventoried and the new corresponding total potential-to-emit (PTE) emissions for NO X and SO 2 were reported at 5,833 tpy and 7,374 tpy. The total actual NO X and SO 2 emissions, 66 however, were reported lower at 1,741 tpy and 3,303 tpy, respectively. In addition, sixteen PSD facilities have shut down since 2008, resulting in a total reduction of 15,893 tpy in permitted NO X emissions and a total reduction of 1,126 tpy in permitted SO 2 emissions. 67

The progress report mentioned that the State is currently relying on a Smoke Management Plan (SMP) in its 2008 Arkansas Regional Haze SIP that the Arkansas Forestry Commission approved in 2007. Arkansas' SMP was designed to assure that prescribed fires are planned and executed in a manner designed to minimize the impacts from smoke produced by prescribed fires. The programs in this measure are generally designed to limit increases in emissions, rather than to reduce existing emissions. 69

The State of Arkansas also considered in its progress report the following ongoing pollution control programs in the 2008 Arkansas Regional Haze SIP as controls used for continuing emission reductions:

• Mercury and Air Toxics Standard (MATS). 71

• Tier 2 Vehicle Emission standards. 72

• Heavy-Duty Highway Rule. 73

• Highway Diesel and Non-Road Diesel Rules. 74

• Ultra-Low Sulfur Diesel Rule. 75

• Maximum Achievable Control Technology (MACT). 76

The EPA proposes to find that the State has adequately addressed the applicable provisions under 40 CFR 51.308(g) regarding reporting the status of implementation of measures in its implementation plan. The State's progress report documented the status of all measures included in its regional haze SIP (as of the submission of the progress report) and it also described additional measures that came into effect since the State's 2008 regional haze SIP was completed, including state regulations and various federal measures. All major control measures were identified and the strategy behind each control was explained. The State included a summary of the implementation status associated with each measure and quantified the benefits where possible. In addition, the progress report SIP adequately outlined the compliance timeframe for all controls.

The State presented emission data in its progress report that provided a summary of the emission trends and reductions achieved in the state through the implementation of the measures in the SIP. The State identified ammonium sulfate, particulate organic matter, and nitrate as the three largest pollutant contributors to visibility impairment caused by regional haze at Arkansas' Class I areas for the first implementation period. 77 The progress report indicated that the primary cause of ammonium sulfate, the most significant haze contributor in Arkansas, is SO 2 precursor emissions. In 2011, point sources contributed to 90 percent of the overall SO 2 emissions in Arkansas with EGUs responsible for 78 percent of the total SO 2 emissions. 78 For this reason, the State focused on reporting emission reductions from EGU point sources in the progress report as an effective method of improving visibility in Arkansas.

The State reported EGU point source emission data from Arkansas for NO X and SO 2 for the 2000 to 2011 time-period. 79 There were not any emission reductions from subject-to-BART sources in Arkansas due to implementation of BART limits when the progress report was submitted. Nevertheless, the overall EGU emissions trended downward from the baseline for NO X , with a slight uptick in 2011 for SO 2 emissions. Arkansas noted that as of 2011, EGU emissions increased by 2,885 tpy for SO 2 and decreased by 3,741 tpy for NO X from the 2002 baseline. During the 2002 to 2011 time-span, on a heat input basis, both NO X and SO 2 EGU emission rates (lb/MMBtu) decreased. This indicates that the overall average control efficiencies improved and the slight SO 2 emissions uptick was a result of increased EGU activity. 80

Table 3 below, provided by the EPA to complement the State's report, compares more recent emission trends going past 2011. 81 It compares the 2002 to 2011 annual EGU emission trends provided by the State in the progress report to more recent annual EGU emission data provided by the EPA from 2012 to 2017. 82 Table 3 shows that NO X and SO 2 EGU point source emissions have decreased during the 2011 to 2017 time-period. Comparing 2011 emissions to the 2018 projected emissions developed for the 2008 SIP, the State projected annual SO 2 emissions to increase by an additional 125 tpy and annual NO X emissions to decrease by an additional 10,167 tpy in 2018 from 2011 observed emissions. 83 The more recent emission data, however, shows a large decrease in SO 2 emissions from EGUs. Specifically, from 2014 to 2015, there was a 30,354 tpy decrease in SO 2 emissions and a 14,783 tpy decrease in NO X emissions. This corresponds to a decline in EGU activity as noted by the decrease in heat input in 2015. EGU activity has since increased from 2015 to 2017, but the emissions remain well below 2014 emission levels. Overall, from the 2002 to 2017, SO 2 emissions from EGUs have reduced by 22,969 tpy (increased 2,885 tpy from 2002 to 2011, then decreased 25,854 tpy from 2011 to 2017) and NO X emissions have reduced by 14,579 tpy (decreased 3,741 tpy from 2002 to 2011, then decreased an additional 10,838 tpy from 2011 to 2017). The State's progress report mentioned that further significant emission reductions would be realized from a final permit that was issued on August 25, 2013, at Flint Creek for the installation and operation of control equipment to significantly reduce SO 2 emissions. 84

Table 4, provided by the EPA, compares National Emissions Inventory (NEI) data for total point sources from 2002 to 2014. This complements the categorized NEI point source data (EGU and non-EGU) inventoried by the State in the progress report from 2002 to 2011. It also provides reported emissions data from more current NEI versions than available when the progress report was submitted in 2015. 85 Table 4 shows that fine particle and coarse mass PM emission reductions are considerably lower than their NEI 2002 totals when compared to more recent NEI data. 86 PM 10 point source emissions decreased by 6,427 tpy (39%) and PM 2.5 point source emissions decreased by 5,600 tpy (49%) for the 2002 to 2014 period. NO X emissions stayed relatively steady at 71,000 tpy and SO 2 emissions decreased slightly by 4.6 percent for the 2002 to 2014 period. Although the reductions in SO 2 and NO X emissions are not especially pronounced for that time-period, the total point source emission trends are consistent with what is shown in Table 3 for EGU point sources from 2002 to 2014. We anticipate that the total NEI point source data going forward after 2014 will reflect the substantial decreases in PM, SO 2 , and NO X emissions as already displayed in the EGU point source reductions reported by CAMD data in Table 3.

In addition to the above reductions, there will also be some additional future reductions due to more stringent CSAPR allocations and BART requirements implemented from the recent Arkansas Regional Haze SO 2 and PM SIP revision. The CSAPR update revised the O 3 season NO X budget for Arkansas units from 15,110 tons NO X in 2015 to 12,048 tons NO X (10,132 tons NO X allocated to existing EGUs) in 2017 with a further reduction to 9,210 tons NO X (7,781 tons NO X allocated to existing EGUs) in 2018 and beyond. The 2017 actual O 3 season EGU emissions for Arkansas totaled 12,811 tons NO X . Some EGUs chose to install combustion controls to comply with CSAPR that would reduce emissions year-round, not just in the O 3 season. This includes the installation of low NO X burners at the White Bluff and Independence facilities. The 2018 actual O 3 season EGU emissions for Arkansas totaled 10,952 tons NO X . 87

The State noted that, along with the replacement of CAIR with CSAPR, there have been many changes to the ongoing air pollution programs since EPA's partial approval of Arkansas' regional haze SIP in 2012. These changes included more stringent emission standards, renewable fuel standards, fuel efficiency standards, marine and aircraft standards, mercury and air toxics standards, and various national emission standards for hazardous air pollution. Arkansas noted that these more recent air pollution programs are anticipated to result in even greater emission reductions that could result in further visibility improvement than the programs in place at the time the 2008 Arkansas Regional Haze SIP revision was submitted to the EPA.

Lastly, recent and planned retirements of various plants may result in further visibility improvement at Arkansas Class I areas. In the Arkansas Regional Haze SO 2 and PM SIP revision, ADEQ noted the planned retirement of Lake Catherine by the end of 2028 and Entergy's plans to cease coal combustion at the Independence facility by the end of 2030. ADEQ also noted that there have been recent changes in operations at large point sources that have historically impacted Arkansas Class I areas, including the recent retirement of the Big Brown Plant, Sandow Plant, Monticello Plant, and the Deely Plant in Texas. The coal-fired units at the Tennessee Valley Authority Allen Plant, located in Memphis, Tennessee, were also scheduled to retire by June 2018 and be replaced with natural gas generators.

The EPA proposes to conclude that the State has adequately addressed the applicable provisions under 40 CFR 51.308(g) regarding a summary of emission reductions achieved for visibility impairing pollutants. Overall, the State demonstrated the emission reductions achieved for the major contributing visibility impairing pollutants in the State for the first implementation period. Emissions of SO 2 , NO X , and PM, the main contributors to regional haze in Class I areas potentially affected by emissions from Arkansas, have all been decreasing. As demonstrated by the more recent available data, the SO 2 and NO X haze pollutant precursors from EGU point sources in the state have decreased from the baseline levels in 2002, especially since 2015. Also, the trend for fine particles and coarse mass emissions, pollutants that directly create haze, have been decreasing since 2002. Overall visibility conditions are improving as a result of these reductions together with decreases from outside of the state. With the implementation of the new BART controls and more stringent NO X allocations under CSAPR, further emission reductions should be realized and visibility impairment at affected Class I areas should continue to improve.

Arkansas included in its progress report the annual average visibility from 2001 to 2011 for the twenty percent best (least impaired) and twenty percent worst (most impaired) days at Caney Creek and Upper Buffalo Wilderness areas. 88 Although visibility conditions have varied from year-to-year, the progress report showed that both Caney Creek and Upper Buffalo have displayed an overall improvement in visibility since 2001. 89 Arkansas reported that both areas showed improved visibility from the 2000 to 2004 baseline during the worst days for the most current period (2007 to 2011) and for the period previous to the most current (2005 to 2009) available at the time of the progress report's development. 90 Both class I areas similarly are showing improvement from the baseline on the twenty percent best days and satisfy the goal of no visibility degradation for the first implementation period. Table 5 shows that the visibilities at Caney Creek and Upper Buffalo during the 2007 to 2011 period were 0.96 dv and 0.67 dv below the baseline for the twenty percent best days.

Throughout this document wherever “we,” “us,” or “our” each mean the EPA.

In section 169A of the 1977 CAA Amendments, Congress created a program for protecting visibility in the nation's national parks and wilderness areas. This section of the CAA establishes as a national goal the prevention of any future, and the remedying of any existing, visibility impairment in mandatory Class I Federal areas where impairment results from manmade air pollution. 1 Congress added section 169B to the CAA in 1990 that added visibility protection provisions, and the EPA promulgated final regulations addressing regional haze as part of the 1999 Regional Haze Rule, which was most recently updated in 2017. 2 The Regional Haze Rule revised the existing 1980 visibility regulations and established a more comprehensive visibility protection program for Class I areas. The requirements for regional haze, found at 40 CFR 51.308 and 51.309, are included in the EPA's broader visibility protection regulations at 40 CFR 51.300 through 309. The regional haze regulations require states to demonstrate reasonable progress toward meeting the national goal of a return to natural visibility conditions for mandatory Class I Federal areas both within and outside states by 2064. The requirement to submit a regional haze SIP revision at periodic intervals applies to all 50 states, the District of Columbia, and the Virgin Islands. Oklahoma submitted its initial regional haze SIP on February 18, 2010.

Oklahoma's 2010 Regional Haze SIP included calculations of baseline and natural visibility conditions for the Wichita Mountains Wilderness Area (“Wichita Mountains” or WMWA), 3 the only Class I area located in Oklahoma (and potentially affected Class I areas located elsewhere), a long-term strategy to address regional haze visibility impairment, RPGs for the WMWA reflective of the visibility conditions projected to be achieved by the end of the first implementation period, and a monitoring and reporting strategy. The 2010 Regional Haze SIP also included determinations of emission limitations and schedules for compliance for a group of Oklahoma industrial air emissions sources that are subject to best available retrofit technology (BART)  4 under national Regional Haze Program requirements. Oklahoma's Regional Haze SIP purports that visibility improvement at the WMWA is limited by the impact of out-of-state emission sources.

The 2010 Regional Haze SIP evaluated numerous sources for applicability of BART. Oklahoma relied on BART requirements for emissions of sulfur dioxide (SO 2 ) and nitrogen oxides (NO X ) from certain electric generating units (EGUs) in the State in its regional haze plan to meet certain requirements of EPA's Regional Haze Rule. This reliance was consistent with EPA's regulations at the time that Oklahoma developed its regional haze plan. EPA approved core elements of Oklahoma's Regional Haze SIP, including BART determinations for the majority of emissions units that were subject to BART. Those determinations became effective on January 27, 2012 (76 FR 81728, December 28, 2011). However, EPA disapproved ODEQ's BART determinations for SO 2 emissions from six-coal-fired EGUs located at three facilities. As a result, EPA issued a federal implementation plan (FIP), promulgating revised SO 2 BART emission limits on coal-fired EGUs at those three facilities. 5 The FIP affects two units at each of two facilities owned and operated by Oklahoma Gas and Electric Company (OG&E): Muskogee Generating Station in Muskogee County, and Sooner Generating Station in Noble County. The FIP also initially applied to two units at American Electric Power/Public Service Company of Oklahoma's (AEP/PSO's) Northeastern Power Station in Rogers County, but those requirements have since been removed from the FIP after EPA approval of a SIP revision addressing these units.

In the December 2011 action, EPA also disapproved the State's LTS for regional haze because the LTS relied on the BART limits in the disapproved determinations. EPA also disapproved portions of Oklahoma's Interstate Transport SIP for the 1997 8-hour Ozone and 1997 PM 2.5 National Ambient Air Quality Standards (submitted to address the requirements of CAA section 110(a)(2)(D)(i)(II) as it applies to visibility, also known as “prong 4”). Specifically, this disapproval found that the SIP submittal had not prevented SO 2 emissions from the above-mentioned units from interfering with measures required to be included in the applicable implementation plans of other states to protect visibility. Subsequently, EPA promulgated the aforementioned FIP, to address these deficiencies. 6 EPA took no action on Oklahoma's RPGs for WMWA, pending its evaluation of impacts of out-of-state emission sources.

On March 7, 2014, EPA published a document  7 in the Federal Register approving Oklahoma's 2013 SIP revision  8 submitted to address certain disapproved portions of the Regional Haze SIP related to the BART determination for two coal-fired units located at American Electric Power/Public Service Company of Oklahoma's (AEP/PSO's) Northeastern Power Station in Rogers County, Oklahoma. A separate document, published simultaneously, 9 withdrew the EPA-issued FIP as it relates to the Northeastern Power Station facility. The approved revision also satisfied the previously disapproved portions of Oklahoma's Interstate Transport SIP and the Regional Haze SIP's LTS, as those portions relate to the subject facility. The FIP still applies (unaltered) to the four affected units at the Muskogee and Sooner Generating Stations.

On December 16, 2014, EPA published a proposed action on the final portion of Oklahoma's 2010 Regional Haze SIP and on regional haze obligations for Texas. 10 As mentioned previously, Oklahoma's 2010 SIP concluded that visibility progress at the WMWA would be limited by the impact of out-of-state emission sources; and documented that a significant portion of the visibility impairment at the WMWA results from emissions generated in Texas.

Given the magnitude of these interstate impacts, EPA determined that the Oklahoma and Texas regional haze SIPs were interconnected, especially considering the relationship between upwind and downwind states in the reasonable progress and long-term strategy provisions of the Regional Haze Rule. On January 5, 2016, EPA issued a final action  11 for Texas and Oklahoma which:

• Disapproved portions of Texas's implementation plan for regional haze related to the effects of its emissions at the WMWA and other Class I areas;

• Disapproved a portion of Oklahoma's regional haze SIP revision, the reasonable progress goals at the WMWA, and its reasonable progress consultation with Texas;  12

• Simultaneously promulgated a FIP for Texas, which required additional reductions from eight coal-fired electric power plants; and

• Calculated new (numerical) reasonable progress goals at the WMWA.

That rulemaking was challenged, however, and then stayed in its entirety by the U.S. Court of Appeals for the Fifth Circuit pending resolution of the litigation; in March 2017, following the submittal of a request by the EPA for a voluntary remand of the parts of the rule under challenge, the Fifth Circuit Court of Appeals remanded the rule in its entirety. 13

EPA has not taken new action with respect to the RPGs for WMWA in Oklahoma. Ultimately, as discussed elsewhere in this action, whether it is the State's RPGs established in the 2010 RH SIP or the EPA's revised RPGs in the January 2016 action that are evaluated, our review of the State's 2016 progress report indicates that Oklahoma's emission reductions and measured visibility conditions are on track to meet those goals.

As we state in the Regional Haze Rule, the RPGs set by the state are not enforceable. 14 The RPGs represent the State's best estimate of the degree of visibility improvement that will result at the State's Class I areas from changes in emissions—changes driven by the particular set of control measures the state has adopted in its regional haze SIP to address visibility, as well as all other enforceable measures expected to reduce emissions over the period of the SIP. Given the forward-looking nature of RPGs and the range of assumptions that must be made as to emissions a decade or more in the future, we expect there to be some uncertainty in a given State's visibility projections. 15

Each state is required to submit a progress report that evaluates progress towards the RPGs for each Class I area within the state and for each Class I area outside the state which may be affected by emissions from within the state. 40 CFR 51.308(g). In addition, the provisions of 40 CFR 51.308(h) require states to submit, at the same time as the progress report, a determination of the adequacy of the state's existing regional haze implementation plan. 16 The progress report for the first planning period is due five years after submittal of the initial regional haze SIP and must take the form of a SIP revision. Oklahoma submitted its initial regional haze SIP on February 18, 2010.

On September 28, 2016, Oklahoma submitted its progress report in the form of a SIP revision under 40 CFR 51.308, which, among other things, detailed the progress made in the first planning period toward implementation of the long-term strategy (LTS) outlined in the State's regional haze plan. The progress report also included the visibility improvement measured at the WMWA, the only Class I area within Oklahoma, an assessment of whether Class I areas outside of the State are potentially impacted by emissions from Oklahoma, and a determination of the adequacy of the existing implementation plan.

The progress report provides an opportunity for public input on the State's (and the EPA's) assessment of whether the regional haze SIP is being implemented appropriately and whether reasonable progress is being achieved consistent with the projected visibility improvement in the SIP. This section includes EPA's analysis of Oklahoma's 2016 progress report, and an explanation of the basis for the Agency's proposed approval.

In its progress report, Oklahoma summarizes the status of the emissions reduction measures that were relied upon by Oklahoma in its regional haze plan. The major control measures identified by the State in the progress report are as follows:

On July 6, 2005, EPA published final amendments to its regional haze rule, which requires emission sources that fit specific criteria to install BART controls. 17 The 2010 regional haze SIP originally determined that there were twenty facilities  18 in Oklahoma with BART-eligible sources. 19 Oklahoma determined six facilities with a combined total of thirteen (now twelve  20 ) units, were subject-to-BART  21 in the 2010 regional haze SIP. 22 EPA approved Oklahoma's identification of BART-eligible sources and determination of subject-to-BART sources in our 2011 final action. 23

Section 2.4 of the progress report provides a discussion of BART requirements and implementation status. The current BART determinations for all subject-to-BART units in Oklahoma following the various, aforementioned series of SIP revisions and FIPs along with their implementation status, are listed in Table 1 below.

In its original 2010 regional haze plan, ODEQ cited various air quality rules and programs as part of its long-term strategy for addressing the visibility impairment at WMWA. These efforts include comprehensive permitting, compliance and enforcement programs, an emissions inventory system, and a state-wide ambient air monitoring network.

The progress report states that ODEQ:

• Operates a robust permitting program that addresses both major and minor source facilities. Regular inspections are performed so as to ensure compliance with all permit requirements, applicable statutes, rules and regulations. Additionally, ODEQ's permitting program incorporates new source performance standards (NSPS) and national emission standards for hazardous air pollutants (NESHAP) via its permitting, compliance, and enforcement programs.

• Addresses visibility impairment for new or modified major stationary sources via its Prevention of Significant Deterioration (PSD) Requirements for Attainment Areas permitting process. 24 The PSD permitting rules limit the establishment of air pollution sources which may contribute to visibility impairment and other air pollution problems.

This is a summary of the Commission's document ( Public Notice ), GN Docket No. 14-177, AU Docket No. 19-59, DA 19-196, adopted on March 20, 2019 and released on March 20, 2019. The complete text of this document is available for public inspection and copying from 8 a.m. to 4:30 p.m. Eastern Time (ET) Monday through Thursday or from 8 a.m. to 11:30 a.m. ET on Fridays in the FCC Reference Information Center, 445 12th Street SW, Room CY-A257, Washington, DC 20554. The complete text is available on the Commission's website at http://wireless.fcc.gov, or by using the search function on the ECFS web page at http://www.fcc.gov/cgb/ecfs/. Alternative formats are available to persons with disabilities by sending an email to fcc504@fcc.gov or by calling the Consumer & Governmental Affairs Bureau at (202) 418-0530 (voice), (202) 418-0432 (tty).

Pursuant to § 1.1200(a) of the Commission's rules, this document shall be treated as a “permit-but-disclose” proceeding in accordance with the Commission's ex parte rules. Persons making ex parte presentations must file a copy of any written presentation or a memorandum summarizing any oral presentation within two business days after the presentation (unless a different deadline applicable to the Sunshine period applies). Persons making oral ex parte presentations are reminded that memoranda summarizing the presentation must (1) list all persons attending or otherwise participating in the meeting at which the ex parte presentation was made, and (2) summarize all data presented and arguments made during the presentation. If the presentation consisted in whole or in part of the presentation of data or arguments already reflected in the presenter's written comments, memoranda or other filings in the proceeding, the presenter may provide citations to such data or arguments in his or her prior comments, memoranda, or other filings (specifying the relevant page and/or paragraph numbers where such data or arguments can be found) in lieu of summarizing them in the memorandum. Documents shown or given to Commission staff during ex parte meetings are deemed to be written ex parte presentations and must be filed consistent with § 1.1206(b). In proceedings governed by § 1.49(f) or for which the Commission has made available a method of electronic filing, written ex parte presentations and memoranda summarizing oral ex parte presentations, and all attachments thereto, must be filed through the electronic comment filing system available for that proceeding, and must be filed in their native format ( e.g., .doc, .xml, .ppt, searchable .pdf). Participants in this proceeding should familiarize themselves with the Commission's ex parte rules.

As required by the Regulatory Flexibility Act of 1980, as amended (RFA), the Commission has prepared a Supplemental Initial Regulatory Flexibility Analysis (Supplemental IRFA) of the possible significant economic impact on small entities of the policies and rules addressed in this Public Notice to supplement the Commission's Initial and Final Regulatory Flexibility Analyses completed in the Fourth Report and Order, Spectrum Frontiers Orders, and other Commission orders pursuant to which Auction 103 will be conducted. Written public comments are requested on the Supplemental IRFA. Comments must be identified as responses to the Supplemental IRFA and must be filed by the same deadline for filing comments as specified in the Public Notice. The Commission will send a copy of the Public Notice, including this Supplemental IRFA, to the Chief Counsel for Advocacy of the Small Business Administration (SBA). In addition, the Public Notice and Supplemental IRFA (or summaries thereof) will be published in the Federal Register .

This Public Notice contains new information collection requirements that are subject to the Paperwork Reduction Act of 1995 (PRA), Public Law 104-13. The Commission is currently seeking PRA approval for the new information collection requirements associated with the Incumbent 39 GHz Licensee Short Form Application (FCC Form 175-A). The Office of Management and Budget, the general public, and other Federal agencies are invited to comment on the new information collection requirements contained in this Public Notice. In addition, the Commission notes that pursuant to the Small Business Paperwork Relief Act of 2002, the Commission seeks specific comment on how the Commission might further reduce the information collection burden for small business concerns with fewer than 25 employees.

1. In this Public Notice, as directed by the Commission, the Wireless Telecommunications Bureau (Bureau), in cooperation with the Office of Economics and Analytics (OEA), takes the next steps toward implementing the procedures to reconfigure the 39 GHz band in preparation for the incentive auction that will offer new flexible use licenses in the Upper 37 GHz (37.6-38.6 GHz), 39 GHz (38.6-40 GHz), and 47 GHz (47.2-48.2 GHz) bands. The Bureau designates this upcoming incentive auction as Auction 103. As the Commission stated in the Spectrum Frontiers Fourth R&O, the incentive auction process—which includes the opportunity for 39 GHz incumbents not choosing to participate in the auction to receive modified licenses—resolves the persistent difficulties presented by the need for existing 39 GHz licenses to be transitioned efficiently to the new band plan and in some cases, new service areas. This process substantially furthers the public interest in making available spectrum for the provision of next-generation services, while preserving incumbents' spectrum usage rights and modifying their licenses (if desired) in a manner that will also leave these incumbents better able to provide fifth-generation (5G) wireless, Internet of Things, and other advanced services in the 39 GHz band.

2. The key decision for each 39 GHz incumbent will be whether to: (a) Relinquish 39 GHz licenses in exchange for an incentive payment, with the opportunity to bid on new licenses in the incentive auction, if it chooses to do so; or (b) elect to receive modified licenses and not apply to participate in the auction for new licenses. In the reconfiguration process the Bureau describes below, the Bureau refers to this decision as an Initial Commitment. As the Commission determined in the Spectrum Frontiers Fourth R&O, incumbents have three options for their Initial Commitment. An incumbent can choose to: (1) Have its licenses modified based on the Commission's proposed reconfiguration of its license holdings; (2) have its licenses modified based on an acceptable alternative reconfiguration that the incumbent proposes, provided that it satisfies certain specified conditions; or (3) commit to relinquish its licenses in exchange for an incentive payment and the ability to bid for new licenses. The Initial Commitment results will determine the inventory of 39 GHz spectrum blocks that will be available to be assigned in the clock phase of Auction 103. Regardless of which option an incumbent chooses, once it has made its Initial Commitment it will not need to take any further steps before the conclusion of the auction, unless it wants to bid on new licenses in the auction.

3. In this Public Notice, the Bureau (1) determines to freeze temporarily processing of future applications for transfers and assignments of 39 GHz licenses in order to facilitate this reconfiguration process, as suggested by the Commission; (2) acts pursuant to section 316 to modify incumbents' 39 GHz licenses in accordance with the Commission's proposed order of modification, in light of the absence of any protests thereto; and (3) seeks comment on a proposed path toward reconfiguration of this band in preparation for Auction 103.

4. In the Spectrum Frontiers Fourth R&O, the Commission took significant steps to make spectrum available for 5G wireless, Internet of Things, and other advanced services in the Upper 37 GHz, 39 GHz, and 47 GHz bands. Over the course of the Spectrum Frontiers proceeding, the Commission has adopted Upper Microwave Flexible Use Service (UMFUS) rules to make available millimeter wave spectrum for such next-generation services. When combined, the contiguous Upper 37 GHz and the 39 GHz bands offer the largest amount of contiguous spectrum in the millimeter wave bands for flexible-use wireless services—a total of 2,400 megahertz. The 47 GHz band will provide an additional 1,000 megahertz of millimeter wave spectrum for such services.

5. The Commission's decisions in the Spectrum Frontiers Fourth R&O resolve the persistent difficulties presented by existing 39 GHz licenses issued for past uses under prior rules. These licenses create barriers to next-generation services by fragmenting frequencies and in some cases, geographic license areas, across the 39 GHz band, because existing 39 GHz licenses include a mix of 50 megahertz unpaired channel blocks, Rectangular Service Areas (RSA) licenses that do not conform to PEA boundaries, and other licenses not authorized to provide service throughout the full geographic boundaries of the PEAs due to pre-existing RSA licenses. The band plan for UMFUS licenses in these spectrum bands is 100 megahertz blocks licensed by Partial Economic Area (PEA).

6. The Commission adopted an incentive auction for the Upper 37 GHz, 39 GHz, and 47 GHz bands in part to make it possible for both incumbent 39 GHz licensees and new licensees throughout these bands to provide such valuable next-generation services. In preparation for assigning new licenses in these bands by auction, the Commission decided that all existing 39 GHz licenses are subject to modification. These modifications to 39 GHz licenses will enhance opportunities for these licensees to provide valuable next generation services. The process the Commission mandated will remove barriers to the provision of 5G services by giving incumbents the choice of accepting modified licenses or, if an incumbent licensee volunteers to relinquish related spectrum usage rights in exchange for an incentive payment, cancelling these licenses. In the incentive auction, each incumbent 39 GHz licensee voluntarily may commit to relinquish all spectrum usage rights provided by existing licenses in exchange for a share of the proceeds from the auction of new licenses. Those making such a commitment will be eligible to apply to bid for new licenses. As in prior t Commission auctions, the Commission will develop and detail all the procedures necessary to conduct the auction in a pre-auction process framed by an Auction Comment Public Notice and Auction Procedures Public Notice.

7. The Bureau must implement the steps the Commission described in the Spectrum Frontiers Fourth R&O to reconfigure existing 39 GHz licenses to better match the new 39 GHz band plan and service rules so that incumbents can make binding Initial Commitments through the Commission's Initial Commitment System. This Public Notice explains how the Bureau will take these steps. The Public Notice includes the following appendices, which provide even more detail, including the mathematical calculations and assumptions made during this reconfiguration process: Appendix A: Reconfiguration Technical Guide; Appendix B: Initial Aggregated Incumbent Holdings; Appendix C: Imputing Auction 101 Prices for Weights; and Appendix D: Initial Commitment Technical Guide. First, the Bureau must aggregate an incumbent's 39 GHz holdings to determine how many licenses per Partial Economic Area (PEA) the incumbent would be entitled to under the new band plan. Pursuant to the Commission's directive in the Spectrum Frontiers Fourth R&O, the Bureau also will consolidate the holdings of any licensees that are considered “commonly controlled entities.” Pursuant to the Commission's further direction, and to ensure the data remain consistent, the Bureau freezes most transactions relating to 39 GHz licenses with the adoption of this Public Notice.

8. Because incumbents' holdings may not match the parameters for the new band plan and service rules, the Commission anticipates that, in many markets, incumbents may have “partial PEA” holdings— i.e., spectrum rights that cover less than the entire population of the PEA. In the Spectrum Frontiers Fourth R&O, the Commission determined that any incumbent choosing to accept modified licenses could receive at most one license that covers a partial PEA. To implement this objective, the Commission decided that PEA weights should be applied to allow spectrum usage rights to be combined across markets, to produce “full” PEA holdings (license rights equal to covering the entire population of a PEA). This will allow the use of mathematical techniques that result in a proposed license reconfiguration for each incumbent, which will be provided to incumbents in advance of the Initial Commitment process, so that they can make informed decisions as to whether to accept the proposed reconfiguration, provide an alternative reconfiguration, or relinquish existing 39 GHz licenses.

9. The Commission directed the Bureau to take the steps necessary to implement the Commission's decisions regarding existing 39 GHz licenses. This Public Notice describes the proposed procedures, processes, and methodologies the Bureau plans to implement to reconfigure the 39 GHz band.

10. From the perspective of 39 GHz incumbents, the major steps of the 39 GHz band reconfiguration process will be as follows:

• Verifying 39 GHz Aggregated Holdings Data. In Appendix B: Initial Aggregated Incumbent Holdings, the Bureau provides as a summary of each 39 GHz incumbent's aggregated holdings by PEA. This summary indicates the amount of spectrum usage rights each incumbent holds per PEA, as a product of licensed bandwidth and the population of the licensed area (MHz-pops), based on the records in the Universal Licensing System (ULS). In addition, any 39 GHz licensees with common control have their aggregated holdings consolidated, as shown in Appendix B. Incumbents will have an opportunity to update the license information provided in ULS on which these holdings are based.

• File Excepted Transfers and Assignments (if applicable). In this Public Notice, the Bureau freezes transfers and assignments of 39 GHz licenses, with an exception for commonly controlled entities. If commonly controlled entities wish to transfer/assign all their 39 GHz licenses to one of the commonly controlled entities, they may file an application by the deadline specified in this Public Notice.

• Review Updated 39 GHz Reconfiguration Procedures and Updated Aggregated Holdings Data. After considering the record produced in response to this Public Notice, the Bureau will adopt final 39 GHz band reconfiguration procedures in a future public notice (“Updated 39 GHz Reconfiguration Procedures Public Notice”). Along with that Public Notice, the Bureau will provide each incumbent's updated 39 GHz aggregated (and consolidated, if applicable) holdings data per PEA (“Updated Aggregated Holdings Data”). An “incumbent” for these purposes is either a single 39 GHz licensee or a group of commonly controlled entities that hold 39 GHz licenses.

• Reconfigured 39 GHz Incumbent Holdings Public Notice. After the updated 39 GHz band reconfiguration procedures are adopted, the adopted procedures and methodologies will be applied to reconfigure each incumbent's holdings to match the new band plan and service areas. The Reconfigured 39 GHz Incumbent Holdings Public Notice will show the license holdings the incumbent would receive if in its Initial Commitment it chose to receive modified licenses based on the Commission's proposed reconfiguration (Option 1 under the Initial Commitment Process). The Public Notice will inform each incumbent of the PEAs in which it would receive modified 100 megahertz licenses and the number of such licenses if it chooses to accept the modified licenses based on the Commission's proposed reconfiguration. The final frequencies of the licenses will be determined later; any licensee receiving more than one modified license in a PEA will receive licenses for contiguous frequencies within the PEA.

• File FCC Form 175-A. To be able to access to the Commission's Initial Commitment System, each incumbent must be represented through an Incumbent 39 GHz Licensee Short-Form Application (FCC Form 175-A). The form will provide contact information, list represented licensees, identify authorized Initial Commitment Representatives, and include required certifications. All incumbents should be listed on a filed FCC Form 175-A regardless of whether they intend to bid for new licenses in the incentive auction. In the event an incumbent is not listed on a submitted FCC Form 175-A, that incumbent will be considered to have committed to accepting modified licenses based on reconfigured holdings proposed by the Commission and to have foregone any opportunity to relinquish any holdings for an incentive payment and to participate in an auction of new licenses in Upper 37 GHz, 39 GHz, and 47 GHz. Bureau staff will be conducting outreach to all incumbents using their contact information in ULS to ensure that they are informed of their options.

• Initial Commitment Process. Each incumbent may commit to: (1)Accepting modified licenses based on a reconfiguration of its holdings proposed by the Commission in the Reconfigured 39 GHz Holdings Public Notice; or (2) accepting modified licenses based on its alternative reconfiguration; or (3) relinquishing spectrum usage rights under all its 39 GHz licenses in exchange for an incentive payment. An “alternative reconfiguration” for these purposes is a reconfiguration that the incumbent submits through the Initial Commitment System; to be acceptable, the incumbent's proposal must satisfy the same requirements as the Commission's proposed reconfiguration, except that it need not minimize the weighted MHz-pops remaining as white space in the one PEA in which the incumbent is left with the equivalent of a partial PEA block. The Initial Commitment System will provide real-time feedback to incumbents on the acceptability of proposed alternative reconfigurations. The deadline for making an Initial Commitment will be no sooner than 60 days after the release of the Reconfigured 39 GHz Incumbent Holdings Public Notice. Any incumbent that fails to make a selection by the deadline will be deemed to have selected Option 1: the Commission's proposed reconfiguration for modified licenses.

• Round Zero. An incumbent that commits to relinquishing all its existing spectrum usage rights (Option 3) will have a limited opportunity during the Initial Commitment submission window to redistribute its MHz-pops that are equivalent to a partial PEA license based on its updated aggregated holdings in any PEA, based on their relative weights, as part of the Round Zero process in the Initial Commitment System. Incentive payments to those 39 GHz incumbents committing to Option 3 will be based on the redistributed holdings at the close of Round Zero.

• Existing Licenses Pending the Auction. Regardless of each incumbent's binding Initial Commitment, each incumbent licensee will retain its existing 39 GHz licenses until after the close of the auction and the announcement of winning bidders for new licenses. The announcement of winning bidders for the auction must occur before the Commission can assign frequencies to modified licenses, issue new licenses, or share auction proceeds as incentive payments with incumbents for cancelled 39 GHz licenses.

• Auction of New Licenses. Following the Initial Commitment process, potential bidders for new licenses will take typical pre-auction actions necessary to become qualified to bid. Only incumbents that elect Option 3 to relinquish licenses are permitted to bid on new licenses in Auction 103, if they choose to do so, but they also may elect not to bid and simply receive incentive payments for their relinquished licenses. As determined in the Spectrum Frontiers Fourth R&O, incumbents that elect to receive modified licenses will be assigned frequencies based on the results of the auction assignment phase but cannot bid for particular frequencies in the assignment phase.

• Post-Incentive Auction Transition and Incentive Payments. Following the announcement of winning bidders in the incentive auction, the Commission, based on the incumbents' Initial Commitments, will issue modified licenses and cancel relinquished licenses. Incumbents will be able to seek Special Temporary Authority as needed to transition from existing licenses to modified licenses or to new licenses that will be issued subsequently. Any new licenses that an incumbent wins in the auction will be issued pursuant to the Commission's standard process of receiving winning bids, reviewing license applications, and then granting the new licenses. The Commission will be ready to make incentive payments owed following the grant of new licenses associated with winning bids.

11. In the Spectrum Frontiers Fourth R&O, the Commission recognized that it may be appropriate to freeze transfers and assignments of 39 GHz licenses, and it directed the Bureau to address whether or when it is necessary to freeze transfers and assignments of 39 GHz licenses prior to calculations of aggregate holdings. The Bureau concludes that, with the release of this Public Notice, the Bureau will implement a temporary freeze on the acceptance and processing of applications relating to any future transfers or assignments of 39 GHz licenses, with one exception. Any applications received after the release of this Public Notice that do not fall under the exception or applications that fall under the exception that are received after the deadline provided in this Public Notice will be returned as unacceptable for filing. This freeze will end after new licenses have been granted to winning bidders and modified licenses have been issued to non-auction participants.

12. A freeze on transfers and assignments is necessary to ensure that the Commission's reconfiguration of existing licenses is not unwound by any transfers and assignments that might materially revise the holdings that are the subject of the reconfiguration. A significant aspect of the reconfiguration process is the consideration of an incumbent's spectrum usage rights on an aggregated basis (“aggregated holdings”). If an incumbent could transfer or assign some subset of its 39 GHz licenses, the Commission's reconfiguration of the incumbent's aggregated holdings would no longer be consistent with the incumbent's actual holdings. Furthermore, the effectiveness of an incumbent's certifications and other representations with respect to its Initial Commitment might be brought into question following a transfer or assignment of some or all of its 39 GHz licenses.

13. This freeze nevertheless is subject to one exception. This freeze will not affect transfers or assignments to or among commonly controlled entities, and applications that fall into this category will be accepted until April 15, 2019. In the Spectrum Frontiers Fourth R&O, the Commission determined that licenses held by commonly controlled entities would be treated as held by one entity for purposes of reconfiguring 39 GHz holdings (which the Bureau refers to as “consolidated holdings”). Specifically, the Commission noted that “[f]or this purpose, we will use the definition of `controlling interest' as an entity with de jure or de facto control that the Commission uses with respect to auction applications, specifically the rule prohibiting an individual or entity from having a controlling interest in more than one application to participate in the auction.” Further, the Commission determined that commonly controlled entities will be aggregated in the reconfiguration process. Because these transactions would transfer or assign to other entities spectrum rights that already are part of consolidated holdings, the transactions would not result in any material change for purposes of this process. Any 39 GHz licensees that are commonly controlled entities and intend to consolidate their licenses so that one entity is the licensee for the “consolidated holdings” should file these transfer or assignment applications as soon as possible, and no later than April 15, 2019.

14. In the Spectrum Frontiers Fourth R&O, the Commission affirmed its conclusion that it had the authority under the Communications Act to modify existing licenses in a manner that would allow for a more efficient auction and to conduct an incentive auction for these bands. Specifically, it determined that, in order to resolve the difficulties presented by the existing encumbered and non-contiguous licenses and to clear the way for assignment of a significant number of new licenses for whole blocks with contiguous frequencies within PEAs, it was necessary to employ an incentive auction, while offering incumbents that chose not to participate in the auction an alternative of modified 39 GHz licenses.

15. The Commission explained that, because some existing licenses may cover geographic areas that do not match the PEA service areas established for the 39 GHz band, an incumbent's modified licenses may need to be reconfigured to create whole spectrum blocks providing 100 megahertz over a full PEA in some of those areas. Where such changes are unavoidable, the reconfigured licenses would maintain the overall value of spectrum usage rights by quantifying those rights by weighted MHz-pops, as measured pursuant to the procedures established by the Spectrum Frontiers Fourth R&O, and the incumbent would retain at most one modified license for a partial PEA. Doing so would allow these incumbents to better provide next-generation services and help create generic blocks for new licenses that will better enable new licensees to offer next generation services and that can be assigned efficiently using an auction.

16. Following the Spectrum Frontiers Fourth R&O, no petitions for reconsideration or protests of the order of modification were timely filed. Based on the record in this matter and the Commission's decision in the Spectrum Frontiers Fourth R&O, the Bureau concludes it is in the public interest to modify the spectrum usage rights of existing 39 GHz licenses as described therein. The Public Notice is being sent by certified mail, return receipt requested, to each current 39 GHz licensee at the mailing address on file in ULS. Ultimately, any current 39 GHz licensee that chooses to accept modified licenses will have its spectrum usage rights modified no earlier than after winning bidders are announced in Auction 103. As part of the Auction 103 Closing Public Notice that announces winning bidders, incumbent 39 GHz licensees choosing to accept modified licenses will be notified of the specific frequencies of their modified licenses.

17. The Bureau lists 39 GHz MHz-pops holdings based on the information available in the public ULS in Appendix B: Initial Aggregated Incumbent Holdings. The holdings have been determined by the population covered by a license within a PEA, aggregated by licensee, and consolidated for commonly controlled entities, if applicable. The Bureau uses “incumbent” to refer both to a single 39 GHz licensee and to a group of commonly controlled entities that hold 39 GHz licenses. The Bureau explains in this section the process by which each incumbent's existing spectrum usage rights has been determined. These holdings will be used with respect to any option chosen as an Initial Commitment for an incumbent.

18. Incumbent licensees are responsible for ensuring the accuracy of the ULS data underlying these calculations of the holdings listed in Appendix B: Initial Aggregated Incumbent Holdings and for identifying any apparent discrepancies in the calculations. If an incumbent needs to update its information by filing an FCC Form (such as updating its ownership information or notifying the Commission of transfers of control or assignments of these licenses that are not reflected in the current data), it should file the appropriate form(s) to make any necessary corrections as soon as possible, but no later than April 15, 2019. This includes any incumbent 39 GHz licensees listed as individual licensees in Appendix B that are commonly controlled entities. The Bureau will evaluate any claims of commonly controlled entities prior to announcing the Updated Aggregated Holdings Data to ensure that those incumbents' holdings are consolidated where required. If any incumbents that are commonly controlled under a de facto control standard do not seek consolidation and we later determine that there is common control, they will be in violation of 47 CFR 1.2105(a)(3) if they both elect to participate in the auction for new licenses.

19. If there are any administrative corrections needed, incumbents should make those administrative corrections via ULS no later than April 15, 2019. Incumbents should contact the Commission if they discover any discrepancies in the data reflected in the attachment that cannot otherwise be addressed either by making administrative updates in ULS or by filing an FCC Form, and should do so as soon as possible.

20. The Bureau will release the Updated Aggregated Holdings Data (identifying an updated account of each incumbent's existing 39 GHz spectrum usage rights holdings) in the Updated 39 GHz Reconfiguration Procedures Public Notice after incumbents have had the opportunity to make any corrections.

21. As determined in the Spectrum Frontiers Fourth R&O, 2010 Census data will be used to determine the population covered by each existing 39 GHz license. The two-by-two kilometer grid cell methodology employed to determine population in particular areas in the broadcast television spectrum incentive auction will be used to calculate the population for licenses for RSAs and for licenses covering a full or partial PEA.

22. To calculate the population using this grid cell methodology, a grid composed of two-by-two kilometer cells is superimposed on every PEA, with the population contained in each cell determined by reference to the 2010 Census and the highest concentration of the population represented by an internal point located in each cell. For each contiguous part of the country ( i.e., the lower 48 states and the District of Columbia; Alaska; Hawaii; Puerto Rico; U.S. Virgin Islands; American Samoa; and Guam and the Commonwealth of the Northern Mariana Islands) a two-by-two kilometer grid will be created using an equal-area map projection, similar to the methodology used in the Mobility Fund II Challenge Process except using two square kilometer cells rather than one square kilometer cells. See Appendix A for more information on how the grid is created; see Appendix B for the total number of pops in each PEA resulting from using this methodology. The total population contained in a PEA is then calculated by summing the population of each grid cell (or portion thereof) encompassed by a PEA's geographic area.

23. When calculating an incumbent's current holdings, the Commission will aggregate each incumbent's holdings into 100 megahertz blocks by PEA. Using the grid cell methodology, for licenses that cover the full geography of the PEA without encumbrances (“full PEA blocks”), this calculated total population of the PEA is applied to the relevant block(s). In the Spectrum Frontiers 4th NPRM, the Commission explained that there are two types of encumbered licenses: (1) RSA licenses that do not conform to PEA boundaries; and (2) PEA licenses that are not authorized to provide service in the entire PEA, i.e., licenses that overlap geographically with pre-existing RSA licenses whose frequency assignment they must protect. In the Spectrum Frontiers Fourth R&O, the Commission defined a “partial PEA block” as a 100 megahertz channel block that covers a smaller population than the entire population in that PEA, or to an incumbent's voucher in a PEA for purposes of the auction that is less than the weighted MHz-[p]ops for the full PEA.” These partial blocks could result from circumstances such as Rectangular Service Area (RSA) licenses that do not match the PEA boundaries, or partial PEA licenses, in which the licensee cannot operate throughout the entire geography of the PEA license due to a pre-existing RSA license that operates on the same channel. For encumbered licenses that cover partial PEAs, the MHz-pops covered by an incumbent's license is calculated using the grid cell methodology applied above to the portion of the PEA the original license covers geographically. The Commission system will aggregate an incumbent's MHz-pops holdings per PEA license area. Pursuant to the Commission's decision in the Spectrum Frontiers Fourth R&O, any licenses that cover at least 99% of the MHz-pops in a PEA will be considered as having the equivalent of an unencumbered whole block prior to the reconfiguration process. Appendix B provides holdings data for each incumbent based on the current license data in ULS.

24. In the Spectrum Frontiers Fourth R&O, the Commission decided that, as part of this aggregation process, it would treat separate licenses held by entities that control or are controlled by each other and/or have controlling ownership interests in common (“commonly controlled entities”) as being held by a single entity. Ownership data on file in ULS indicate two groups of commonly controlled entities that are listed on a consolidated basis as a single incumbent in Appendix B. In evaluating the existing ownership structures reflected in existing 39 GHz licensees' filings with the Commission, the following licensees are under common control: Cellco Partnership and Straight Path Spectrum, LLC (controlled by parent company Verizon Communications, Inc.); and Alascom, Inc., FiberTower Spectrum Holdings LLC, and Teleport Communications, LLC (controlled by parent company AT&T Inc.). The Bureau has listed all holdings for these entities under a name representing the consolidated incumbent.

25. Existing 39 GHz licensees that are commonly controlled entities may choose to consolidate their existing licenses with a single license holder prior to the Initial Commitment process. Any such 39 GHz licensees that are commonly controlled entities and intend to consolidate their licenses under one entity should file these transfer or assignment applications as soon as possible, and no later than April 15, 2019.

26. The Commission directed that “the MHz-[p]ops in each PEA will be weighted using an index calculated using the relative prices of spectrum licenses in each PEA in other auctions” to make it possible to compare MHz-pops across PEAs. Specifically, the Commission “direct[ed] the Wireless Telecommunications Bureau to set the weights considering the relative PEA price data prepared for and resulting from the broadcast television spectrum incentive auction, while also taking into account any additional Commission data regarding prices for millimeter wave spectrum licenses to the extent practicable.”

27. The Bureau proposes to create an index using the weighted average of relative price indices for Auctions 102 (24 GHz), 1002 (600 MHz), and 97 (AWS-3). For Auction 1002, the broadcast incentive auction, the Commission used an index that considered relative prices from Auction 66 (AWS-1), Auction 73 (700 MHz), and Auction 97 (AWS-3). The Bureau proposes to include prices for PEA licenses from Auction 1002 (600 MHz) in the index since those prices are now available.

28. Auction 102 will be the first Commission auction with a nationwide inventory of millimeter wave spectrum to be held prior to Auction 103, which leads the Bureau to conclude that it will be helpful to incorporate Auction 102 data into the index. Although Auction 102 may not have concluded by the time the index of relative PEA weights is needed for the reconfiguration of existing 39 GHz license rights, the Bureau proposes to use prices as available in Auction 102 provided that the bidding is sufficiently far along as to provide a reasonable indicator of relative prices across PEAs. Specifically, the Bureau proposes to use Auction 102 prices as of the last feasible point to do so prior to release of the Updated 39 GHz Reconfiguration Procedures Public Notice. To ensure that bidding in Auction 102 is sufficiently advanced by the time the index is needed, the Bureau proposes to require that a measure of overall activity in the auction is low. That is, the Bureau proposes that the percentage of bidding units for which demand exceeds supply relative to the total number of bidding units of all of the licenses in the auction is no greater than 20%.

29. Given price per MHz-pops data for Auctions 1002 and 97, and assuming for this purpose the availability of Auction 102 data, the Bureau proposes to construct an index by first (i) converting all data to a PEA basis, (ii) computing an average price for each PEA in each auction, (iii) calculating a relative price index value for each PEA in each auction, and (iv) taking a weighted average of index values, weighting the Auction 102 data more heavily to reflect that the auction is more recent and that the millimeter wave spectrum in Auction 102 is more comparable to the frequency bands available in Auction 103. This will create the index for weighting the MHz-pops in each PEA. Finally, the Bureau will (v) calculate the weighted MHz-pops for a block in a PEA by multiplying the unweighted MHz-pops times the index value for the PEA and normalizing the results if necessary.

30. The Bureau's proposed approach would not incorporate price data from Auction 101, the only other auction of UMFUS licenses to date, into the index. The inventory for Auction 101 consists of a partial set of mostly smaller, less densely populated markets licensed on a county basis, in contrast to the other auctions the Bureau proposes to use that include licenses for larger geographic areas available on a nationwide basis. Further, the Bureau proposes not to use data from Auctions 66 and 73 even though they were included in the index for Auction 1002, using instead prices from more recent auctions.

31. The Bureau seeks comment on this proposed approach. In particular, the Bureau seeks comment on the specific auctions for which it will include data in the index, and whether we should use all available data from each auction. The Bureau further asks for input on the relative weights it will use in the weighted average in step (iv) above. Should the Bureau weight Auction 102 relatively more heavily than the lower bands, and if so, what weights are preferred?

32. As an alternative, the Bureau could use a statistical regression approach to impute prices for those PEAs for which no inventory was available in Auction 101 and, consequently, for which no results are available. Under this alternative, the Bureau would use Auction 101 prices in the available markets as the dependent variable in a regression model that includes as explanatory variables prices from the two lower band auctions that would be included in the Bureau's primary proposal as well as other characteristics ( e.g., income and population). This approach, which is described in Appendix C, could enable us to make use of the existing price information available from Auction 101 without creating a bias that using only data from smaller markets could introduce.

33. Under this alternative, the Bureau would construct the index in the Public Notice but using an average of the Auction 101 index values and Auction 102 index values, in the weighted average calculation (iv) above. This alternative methodology would not consider the data from earlier auctions of lower band spectrum licenses other than in the regression for imputing Auction 101 prices. The Bureau seeks comment on whether it should weight Auction 102 relatively more heavily than Auction 101. The Bureau seeks comment on all elements of its primary proposal, the alternatives mentioned, and any other approaches to determining an index of PEA weights.

34. The Commission decided in the Spectrum Frontiers Fourth R&O that each incumbent's 39 GHz license holdings would be treated on a combined basis, whether aggregated by PEA for an individual licensee or aggregated and consolidated by PEA for commonly controlled entities that are treated as a single incumbent. Subject to specified constraints, these combined holdings could be redistributed across PEAs, while maintaining the total weighted MHz-pops as part of the reconfiguration process that might lead to modified licenses. Furthermore, the Commission decided that these combined holdings could be redistributed across PEAs in Round Zero before the start of bidding in Auction 103, again subject to specified constraints, to determine the incentive payment amounts based on holdings in each PEA.

35. Once the combined holdings are redistributed by weighted MHz-pops across PEAs, incumbent holdings in a particular PEA may no longer be clearly derived from any particular existing license or, in the case of consolidated licensees, from any particular existing licensee. Consequently, the Bureau will issue modified licenses based on reconfigurations of combined holdings to a single incumbent licensee, even in the case of consolidated holdings held by a group of incumbents that are commonly controlled entities. Likewise, the Commission will make a single incentive payment for relinquished combined spectrum usage rights, regardless of the number of licenses relinquished or, in the case of consolidated holdings of a group of incumbents that are commonly controlled entities, the number of licensees relinquishing licenses.

36. In the Spectrum Frontiers Fourth R&O, the Commission directed the Bureau to determine the best methodology for implementing a mathematical optimization to reconfigure incumbent holdings. This Public Notice describes the optimization and reconfiguration. Appendix A provides additional details for implementing the reconfiguration, including the mathematical formulation of the optimization. The Commission further directed the Bureau to announce the methodology and process for each incumbent to propose alternative reconfigurations. At the same time, the Commission directed the Bureau to announce the process for each incumbent to elect how to proceed. That process is addressed in the Public Notice, as well as in Appendix D.

37. Prior to reconfiguration, the Commission already will have: (1) Quantified the holdings provided by each existing license within each PEA in terms of MHz-pops; (2) aggregated (and, where applicable, consolidated) the holdings of incumbents; and (3) determined weights for MHz-pops in each PEA so that a single weighted MHz-pop can be considered a consistent unit across different PEAs. An incumbent's quantified and aggregated holdings in a PEA can be described in terms of the number of equivalent new licenses in the PEA by dividing the holdings in a PEA by the MHz-pops associated with a new license in that PEA. This division could be done with either weighted or unweighted MHz-pops, since the same weight will apply to MHz-pops of both existing holdings and new licenses. The Commission will use weighted MHz-pops, as any remainder quantity representing the equivalent of a partial PEA license will be subject to being transferred to other PEAs in the reconfiguration. The result will equal the number of whole and partial new licenses in that PEA that would provide spectrum usage rights equivalent to the incumbent's aggregated holdings in that PEA under an incumbent's existing 39 GHz licenses.

38. The Commission directed the Bureau to reconfigure 39 GHz holdings of incumbent licensees. Subject to specified constraints, the Commission will implement the reconfiguration using a mathematical optimization. The optimization will consider all possible ways to reconfigure the incumbent's holdings equivalent to a partial PEA license such that in the reconfiguration, the incumbent will have at most a single modified partial PEA license while keeping constant the incumbent's total weighted MHz-pops, and then choose the reconfiguration that minimizes the unassigned weighted MHz-pops in the PEA with a partial PEA license. In a PEA where an incumbent has aggregated holdings that would result in a modified license for a partial PEA, the optimization either will increase the incumbent's holding to a full PEA license, decrease the holding to zero, or for at most one PEA, assign weighted MHz-pops that will result in a partial PEA license, as needed to maintain the incumbent's total combined holdings. Among the reconfigurations that meet these criteria, the Commission will propose the reconfiguration that assigns any modified license for a partial PEA in the PEA with the fewest remaining unassigned weighted MHz-pops. Taking into account the process for determining the geography of the modified partial PEA license, and as detailed in Appendix A, the PEA with the partial PEA license is the one that contains the smallest number of weighted MHz-pops left unassigned after subtracting the MHz-pops for the area covered by the modified license. As described in the Public Notice, and pursuant to the Spectrum Frontiers Fourth R&O, the reconfiguration will also take into account whether the incumbent's holdings would leave only a de minimis percentage of a whole new license unassigned and therefore the holdings would be rounded up and a modified license based on the holdings would be equivalent to a whole new license, leaving no white space.

39. Commission directed the Bureau to announce a methodology and process by which each incumbent may propose an alternative reconfiguration plan, provided that it satisfies certain conditions. To be an acceptable alternative reconfiguration, the incumbent's plan must satisfy the following constraints: The incumbent's combined total MHz-pops holdings are kept constant; for every PEA but one, the incumbent's updated aggregate holdings in the PEA are reduced down to the greatest integer less than or equal to the incumbent's updated aggregate holdings in the PEA or increased up to the least integer greater than or equal to its updated aggregate holdings in the PEA; and for a single PEA in which the incumbent has final aggregate holdings equivalent to a partial PEA license, its holdings are increased to less than the equivalent of a new license, as needed to maintain the incumbent's combined holdings. Unlike the Commission's reconfiguration proposal, an incumbent's alternative reconfiguration need not locate any modified license for a partial PEA in the PEA with the fewest remaining unassigned weighted MHz-pops.

40. In the Spectrum Frontiers Fourth R&O, the Commission determined that any modified license would be for 100 megahertz, the complete bandwidth of a new license. Accordingly, the single modified license for a partial PEA that an incumbent may receive would be a license for a part of the geographic area covered by a new license. Such licenses are “partial” in relation to the geography of a full PEA covered by a new license. Within the reduced coverage area set by its boundaries, a “partial” PEA license provides the same rights that a new license provides in the full PEA.

41. The Commission concluded in the Spectrum Frontiers Fourth R&O that, if an incumbent's holdings in a PEA after reconfiguration are equivalent to less than a full new license yet would cover so much of the PEA's population that the remaining uncovered portion should be considered de minimis, the incumbent should be assigned a modified license that covers the full PEA.

42. The Commission set this de minimis threshold at 5% and directed the Bureau to determine whether it should be increased up to 10%. The Bureau tentatively concludes that it should increase the de minimis threshold to 10%. Accordingly, an incumbent would receive a modified license for a full PEA if it has reconfigured holdings in the PEA that would cover 90% or more of the PEA population. In other contexts, the Commission previously has found that service area extensions of more than 10% were acceptable. The Bureau believes that this approach will maximize the number of full PEA licenses, and based on its experience the Bureau believes that the benefits of offering modified licenses for the full PEAs now clearly outweigh the benefits of offering separate licenses that cover less than 10% of the PEA population, which would likely attract few, if any significant bids. The Bureau seeks comment on this tentative conclusion.

43. The Commission decided in the Spectrum Frontiers Fourth R&O that an incumbent that commits to accept modified licenses that include a modified license for a partial PEA may choose to relinquish only the spectrum usage rights relating to the modified license for a partial PEA in exchange for an incentive payment. An incumbent exercising this option will not be eligible to bid for licenses in Auction 103, in contrast to an incumbent that commits to relinquishing all its spectrum usage rights pursuant to existing 39 GHz licenses.

44. An incumbent with reconfigured holdings that will result in a full PEA license due to reconfigured de minimis rounding, may either accept a modified license for the full PEA or relinquish the pre-rounding holdings. In other words, incentive payments will not be based on holdings rounded by reconfigured de minimis rounding. For example, if the partial PEA holding was .96 (covering 96% of pops in the PEA), the incumbent could elect to either receive a modified license in that PEA that would cover the entire PEA, or it could choose to relinquish that partial holding for 96% of the final clock phase price in the auction.

45. The Commission decided in the Spectrum Frontiers Fourth R&O that the geographic boundaries of a modified license for a partial PEA will be determined by adjusting the incumbent's currently licensed area in the PEA. The Commission specified that “[t]he proposed geographic boundaries for the partial PEA block will be as similar as possible to the incumbent's original holdings in that PEA, recognizing that the remaining partial PEA block may cover a larger or smaller percentage of pops than the existing license.” The Bureau describes here the proposed methodology that will be used to determine these geographic boundaries for a partial PEA, whether it resulted from a Commission reconfiguration proposal or an acceptable alternative submitted by the incumbent. An incumbent will not choose the geographic boundaries of a modified license for a partial PEA. The Commission's process will determine the geographic boundaries of the modified license even though the incumbent selects the PEA when it submits an acceptable alternative reconfiguration. The precise geographic boundaries of a modified license for a partial PEA will be determined only after an incumbent makes its Initial Commitment.

46. An incumbent may have multiple licenses in any one PEA and it is possible that the incumbent's licenses in the PEA together cover the full geography of the PEA. This can happen with even a single license for less than 100 megahertz in the PEA, if the incumbent currently holds 50 megahertz across the full PEA. To determine the geographic boundaries of a modified license for a partial PEA, the system will first determine the incumbent's current geographic coverage as the union of any two-by-two kilometer grid cells included in any of the incumbent's existing licenses for the PEA. The boundaries of this starting coverage area will be mapped over the same two-by-two kilometer grid cells previously used to estimate the population of the PEA. The population of all grid cells whose internal points fall within the boundary of this coverage area will constitute the baseline population covered by a modified license for a partial PEA.

47. The process then will add (or, in the case that the population in the coverage area exceeds the reconfigured holdings, subtract) two-by-two kilometer grid cells adjacent to this coverage area within the PEA until arriving at the population as close to the MHz-pops value of the incumbent's reconfigured holdings in the PEA as possible while not being under. If including (or removing) an entire layer of grid cells ( i.e., all two-by-two kilometer grid cells within the PEA that are immediately adjacent to this coverage area) would exceed the new target population value for this partial PEA holding, then grid cells will be added (or removed) such that the population of the cells is as close as possible to the value of the reconfigured holdings without going under. If multiple combinations of grid cells could yield the same outcome, the optimization will randomly choose one grid cell over the other. The Bureau seeks comment on this proposed process.

48. The Commission will announce the timeline for the Initial Commitment process at the same time it announces its proposed reconfiguration of 39 GHz license holdings for each incumbent. The timeline will include a window for filing the Incumbent 39 GHz Licensee Short-Form Application (FCC Form 175-A) to identify the individuals who will have authority to act as Initial Commitment Representatives for the incumbent. In addition, the timeline will include a deadline for a binding Initial Commitment regarding the 39 GHz holdings of the applicable incumbent. The window for filing FCC Form 175-A will open no sooner than 30 days after the timeline is announced and the deadline for submitting Initial Commitments will be no sooner than 30 days after the FCC Form 175-A filing window opens. Any 39 GHz incumbent not named in a submitted FCC Form 175-A or that does not make an Initial Commitment for any reason will be considered to have committed to accepting modified licenses based on the Commission's proposed reconfiguration (Option 1), including any modified license for a partial PEA, and may not apply to bid for licenses in Auction 103.

49. The Commission will reserve a quantity of Upper 37 GHz and 39 GHz spectrum blocks in each PEA sufficient for any modified licenses that incumbents commit to accept. The quantity of spectrum blocks in these bands remaining in each PEA then will be available to be assigned as new licenses in Auction 103.

50. The final changes to the incumbents' licenses, whether modifications or cancellations based on voluntary relinquishment, will occur after winning bidders are announced in Auction 103. Nevertheless, the incumbents will be bound to fulfill their Initial Commitments following the announcement of winning bidders in Auction 103.

51. Each incumbent will use the 39 GHz Incumbent Licensee Short-Form Application (FCC Form 175-A) to provide identifying information, information for a contact person regarding the application, the FCC Registration Numbers (FRNs) of all individual licensees represented through the application, up to three Initial Commitment Representative(s), and required certifications. The applicant may name up to three individuals as Initial Commitment Representatives authorized to make an Initial Commitment regarding the combined holdings of the 39 GHz licensees represented through the application. The Bureau will make available instructions and other educational materials prior to the opening of the FCC Form 175-A filing window.

52. Initial Commitment Representatives. The required certifications will include a certification that the applicant represents the listed licensees and is authorized on their behalf to name the Initial Commitment Representative(s) in the application. The applicant must further certify that the named Initial Commitment Representative(s) are authorized to make a binding Initial Commitment with respect to all 39 GHz licenses held by the listed licensees. To satisfy this certification, the Initial Commitment Representative(s) must have authority to: (1) Propose an alternative reconfiguration as the basis for modified licenses with respect to all 39 GHz licenses held by the listed licensees; (2) commit the listed licensees to accept modified licenses as part of an Initial Commitment; (3) relinquish spectrum usage rights that would comprise a modified partial PEA license in exchange for an incentive payment; (4) commit the listed licensees to relinquishing all the spectrum usage rights pursuant to all existing 39 GHz licenses held in exchange for an incentive payment; (5) redistribute the holdings of the listed licensees in Round Zero of the auction; and (6) in any application with more than one listed licensee, designate one of the commonly controlled entities to receive any incentive payment.

53. Rule Prohibiting Certain Communications. Any incumbent 39 GHz licensee listed in an FCC Form 175-A will be considered to be an applicant in Auction 103 for purposes of § 1.2105(c) beginning on the deadline for filing FCC Form 175-A. Section 1.2105(c)(1) of the Commission's rules provides that, subject to specified exceptions, after the application filing deadline, “all applicants are prohibited from cooperating or collaborating with respect to, communicating with or disclosing, to each other or any nationwide provider [of communications services] that is not an applicant, or, if the applicant is a nationwide provider, any non-nationwide provider that is not an applicant, in any manner the substance of their own, or each other's, or any other applicants' bids or bidding strategies (including post-auction market structure), or discussing or negotiating settlement agreements, until after the down payment deadline. . .”

54. Auction 103 bidding will have significant consequences for incumbent 39 GHz licenses that relinquish spectrum usage rights. Bidding for new licenses in Auction 103 will determine the amounts of incentive payments for relinquished spectrum usage rights as well as the winning bidders for new licenses. Consequently, an incumbent licensee will have a substantial interest in Auction 103 bids and bidding strategies, even if the incumbent itself does not bid for new licenses. For example, an incumbent might want new license bidders to bid in one PEA rather than another so as to increase the incumbent's related incentive payments. Even before bidding for new licenses begins, an incumbent might seek information about bidding, or seek to influence future bidding, when considering its options for its Initial Commitment. Accordingly, pursuant to the Spectrum Frontiers Fourth R&O, the Bureau proposes that applicants will be subject to the rule prohibiting certain communications whether they file an FCC Form 175-A or an FCC Form 175. An incumbent interested in bidding on licenses in Auction 103 will file both. Any party that is an applicant in Auction 103 for either purpose will be prohibited from certain communications with any other applicant in the incentive auction, i.e., irrespective of whether the other applicant filed the same or different forms for purpose of participating in the auction.

55. The rule would apply to a covered incumbent from the deadline for filing FCC Form 175-A regardless of whether the incumbent ultimately relinquishes spectrum usage rights. Being listed on an FCC Form 175-A is a prerequisite to relinquishing spectrum usage rights in Auction 103 just as FCC Form 175 is a prerequisite to bidding on new licenses in Auction 103. Any incumbent 39 GHz licensee that is listed on an FCC Form 175-A is willing and able to relinquish existing spectrum usage rights, even if ultimately it does not do so. In contrast, an incumbent that wants only to commit to accept the modification proposed by the Commission may do so without filing an FCC Form 175-A. In that case, it will be deemed to have committed to accepting modified licenses based on the Commission's proposed reconfiguration and to keeping any modified partial PEA license. As only incumbent 39 GHz licensees may be represented through an FCC Form 175-A, the parties subject to the prohibition based on that form will be limited and easily known. Moreover, the Bureau will identify applicants and listed licensees on FCC Form 175-A and/or applicants filing FCC Form 175 by public notice subsequent to the respective filing deadlines for the forms.

56. The Commission will detail the operation of the prohibition in future public notices setting forth the detailed procedures for Auction 103. Interested parties seeking additional guidance prior to the release of those future public notices may consult the analogous Auction 101 and 102 Procedures Public Notice, past public notices providing guidance with respect to the rule, and the authorities listed on the Commission's website.

57. The rule prohibiting certain communications prohibits those communications between applicants and nationwide providers, regardless of whether those nationwide providers are applicants in the auction. The operation of the rule requires that the Commission identify nationwide providers for purposes of the rule in connection with each auction. Because the applicable service rules allow a 39 GHz licensee to provide flexible terrestrial wireless services, including mobile services, the Commission's identification of nationwide providers in the Communications Marketplace Report provides reasons to identify the same parties as nationwide providers for purposes of 39 GHz licenses and Auction 103. Accordingly, consistent with the procedures adopted for Auctions 101 and 102 with respect to millimeter wave bands, the Bureau identifies AT&T, Sprint, T-Mobile, and Verizon Wireless as “nationwide providers” for the purpose of implementing its competitive bidding rules in Auction 103, including § 1.2105(c), the rule prohibiting certain communications.

58. SecurID® tokens. Initial Commitment Representatives will choose an Initial Commitment option with respect to the 39 GHz holdings of licensees listed on the applicable FCC Form 175-A and submit that choice over the internet using the Commission's Initial Commitment System. Each Initial Commitment Representative must have his or her own SecurID® token, which the Commission will provide at no charge. An Initial Commitment Representative cannot access the Initial Commitment System without his or her SecurID token. For security purposes, the SecurID® tokens will be mailed only to the contact person at the contact address listed on the FCC Form 175-A. SecurID® tokens issued for other auctions or obtained from a source other than the Commission will not work for Initial Commitments. Incumbents that also file FCC Form 175 to bid for new licenses in Auction 103 should refer to the procedures that will be established in other public notices for information regarding SecurID® tokens for the authorized bidders they identify on the FCC Form 175.

59. An Initial Commitment Representative may access the Initial Commitment System after activating his or her own SecurID® token. In the Initial Commitment System, the Initial Commitment Representative will commit the represented 39 GHz incumbent licensees to one of three Initial Commitments: (1) Accept modified licenses based on the Commission's proposed reconfiguration of the 39 GHz holdings of the incumbent(s); (2) accept modified licenses based on a submitted acceptable alternative reconfiguration submitted by the incumbent; or (3) relinquish all spectrum usage rights pursuant to the licensees' existing 39 GHz licenses in exchange for an incentive payment by having the licenses cancelled. To be able to bid for new licenses, an incumbent 39 GHz licensee must commit to having its existing 39 GHz licenses cancelled.

60. Option 1. If an Initial Commitment Representative selects the first option and the modified licenses will include a license for a partial PEA, the representative may choose either to keep the modified license for a partial PEA or to relinquish the spectrum usage rights for the partial PEA license in exchange for an incentive payment. If the representative elects to keep the modified partial PEA license, the de minimis rounding rules will apply, potentially rounding the partial PEA block up to a modified license for a full PEA block. In the case of a relinquishment, the reconfiguring incumbent will receive an incentive payment based on the actual MHz-pops of the relinquished holdings. The Commission will provide instructions subsequently regarding how a representative will provide information regarding the account to which the incentive payment should be made. Only one payment will be made for the combined holdings of an incumbent even when the incumbent is a group of commonly controlled entities that hold 39 GHz licenses.

61. Option 2. An Initial Commitment Representative also may use the Initial Commitment system to submit an acceptable alternative reconfiguration. To ensure that the alternative reconfiguration meets the necessary requirements, where an incumbent has weighted MHz-pops quantities equivalent to a partial PEA, the Initial Commitment System will allow the representative to round those holdings either down to the greatest integer less than or equal to the incumbent's updated holdings or up to the least integer greater than or equal to the incumbent's updated holdings, for all but one of those PEAs.

62. The system will notify the representative if choices made are not consistent with leaving at most one PEA with the equivalent of a partial PEA license. For example, if the representative has indicated that it wishes to round down holdings equivalent to partial PEA licenses in all but one PEA, and the remaining weighted MHz-pops would increase those holdings in the remaining PEA to more than a full PEA license, the system will require the representative to readjust its holdings.

63. Once the representative has provided input that leads to an acceptable alternative reconfiguration, it may “submit” the reconfiguration and commit the represented 39 GHz incumbent licensees to accept modified licenses based on the submitted acceptable alternative reconfiguration. If the modified licenses would include a license for a partial PEA, the representative may choose either to keep that license or to relinquish the spectrum usage rights for it in exchange for an incentive payment. If the representative elects to keep the modified partial PEA license, the de minimis rounding rules will apply, potentially rounding the partial block up to a modified license for a full block. If the representative elects to relinquish the partial block, the reconfiguring incumbent will receive an incentive payment based on the actual MHz-pops of the relinquished holdings. The Commission will provide instructions subsequently regarding how a representative will provide information regarding the account to which the incentive payment should be made. Only one payment will be made for the combined holdings of an incumbent even when the incumbent is a group of commonly controlled entities that hold 39 GHz licenses.

64. Option 3. Finally, an Initial Commitment Representative may select the third option and commit the represented 39 GHz incumbent licensees to relinquish all spectrum usage rights under their existing 39 GHz licenses in exchange for an incentive payment and having the existing licenses cancelled. To be able to bid in the auction for new licenses, an incumbent must commit to cancelling all its existing 39 GHz licenses. If the representative chooses the third option, the system will give the representative an opportunity during the Initial Commitment process to reallocate, within constraints, any updated aggregated holdings per PEA that are equivalent to a partial PEA license in the Round Zero process.

65. In Round Zero, the Initial Commitment Representative may reallocate the incumbent's updated aggregated holdings per PEA that are equivalent to a partial PEA license among the PEAs in which it has such holdings. The reallocation will be done by transferring weighted MHz-pops among eligible PEAs. If the reallocation does not use all of the weighted MHz-pops available, the system will permit the representative to submit the proposed reallocation and will automatically apportion any unused weighted MHz-pops to the partial PEAs in the incumbent's updated aggregated holdings by PEA, starting with the lowest numbered PEA.

66. The Commission will provide instructions subsequently regarding how a representative will provide information regarding the account to which the incentive payment should be made. Only one payment will be made for the combined holdings of an incumbent even when the incumbent is a group of commonly controlled entities that hold 39 GHz licenses.

67. Appendix D provides additional description of the Initial Commitment System details. The Bureau will provide additional information and educational materials regarding the Initial Commitment System in advance of the opening of the Initial Commitment submission window.

68. Each 39 GHz existing licensee will hold its existing licenses until after the announcement of winning bidders for new licenses. The incumbent's binding Initial Commitment then will be put into effect as part of the post-auction transition.

69. For an incumbent with an Initial Commitment to accept modified licenses (Options 1 or 2), the modified licenses will be assigned after winning bidders are announced in Auction 103. The Initial Commitment will be made based on an applicable reconfiguration of the incumbent's combined holdings, so the number and PEA location of all the modified licenses will be known at the time of the Initial Commitment. However, the geographic boundaries of any modified license for a partial PEA will be determined only after the Initial Commitments. Moreover, frequencies for modified licenses can be assigned only after the assignment phase of the auction.

70. Incumbents that will be assigned modified licenses already have existing licenses in the PEA and may be able to transition any existing operations to new frequencies (or geographic areas in the case of licenses that either covered or now cover only part of a PEA) before any new licenses are granted, as new licenses won pursuant to Auction 103 will not be issued until after post-auction payments are made and license applications are accepted and reviewed. The Bureau will support this transition by designating the time period after the close of the auction and before new licenses are granted as the transition period for incumbents receiving modified licenses to make the transition. Specifically, the Bureau will issue modified licenses after the close of the auction but not cancel these incumbents' authorizations on their original frequencies to allow for a limited transition period. The Bureau will cancel their original authorizations only after the transition has been made to the new frequencies or when the original frequencies are needed for new licenses, whichever is sooner. If an incumbent choosing to have its licenses modified is moving to frequencies where another incumbent with modified licenses holds its original licenses, the Bureau will need to ensure only one authorization is active. In this case, the Commission would develop a plan to accommodate the transition of both incumbents, which may include granting Special Temporary Authorizations (STAs) to effectuate the transition. The Commission may also consider granting STAs if an incumbent's transition to its new modified frequencies has not been completed before the Commission is ready to grant new licenses in the same frequencies.

71. For an incumbent that commits to relinquish all 39 GHz spectrum usage rights in exchange for an incentive payment (Option 3), the Bureau will cancel the licenses providing the relinquished spectrum usage rights after the winning bidders are announced in Auction 103. This will make associated spectrum available for authorization for licenses under the new band plan, i.e., modified licenses and new licenses won at auction. The Bureau recognizes that, if these incumbents have existing operations at the time of the close of the auction, they will need a transition period to continue to operate after their existing licenses are canceled and before their new licenses are issued (or until they can transition existing operations to other spectrum bands in which they hold licenses). This transition period will be accommodated through Special Temporary Authorizations (STAs).

72. STA Process. Incumbents that have existing operations and need continuing authority to operate as they transition to new frequencies can apply for an STA, if needed, to ensure continuity of service. An incumbent will need to explain in its STA request the nature of its existing operations and identify how much time for transition it needs and/or why it was unable to complete the transition in the initial time allotted (if applicable). Any STAs granted will authorize the incumbent to operate only on a secondary, non-interfering basis, and only up to 180 days. These STAs will be issued on a secondary, non-interfering basis, and therefore new licensees in these frequencies have primary operating authority. Although these STAs will be secondary, incumbents should have sole use of the frequencies authorized for a period of time because the Commission will not be able to grant its first set of new licenses immediately after the auction closes, due to the additional time required for application submission, payments, and the petition to deny period, among other things. These STAs will not be renewed absent extraordinary circumstances. Incumbents that need additional time to transition also have the option to negotiate leases or other arrangements with the new licensee(s) authorized to operate in those frequencies. The Bureau will provide the filing deadline for these types of STA requests in the Auction 103 Closing Public Notice announcing winning bidders.

73. Each incentive payment will be determined based on an incumbent's weighted MHz-pops holdings in a PEA after Round Zero and the final clock phase price for a spectrum block in the same PEA at the close of the clock phase of the auction. The Commission will make a single incentive payment with respect to an incumbent's combined holdings relinquished in the incentive auction. The Bureau tentatively concludes that such single payment may be directed only to one of the commonly controlled entities; the Bureau seeks comment on whether there is a need to permit the designation of a commonly controlled entity that does not already hold a 39 GHz license. The Bureau will provide instructions in a later public notice regarding how a representative for the incumbent, which may be a group of commonly controlled entities that hold 39 GHz licenses, will provide information regarding the account to which the incentive payment should be made.

74. Although, in general, winning bidders must pay their winning bids in full within approximately one month after release of the public notice announcing the close of an auction, winning bid payments are recognized as auction proceeds available to be shared as incentive payments only when the licenses associated with winning bid payments are granted. Until then, the Commission holds winning bid payments and will not disburse them. Accordingly, cash incentive payments will be made only after sufficient funds are available for disbursement, i.e., winning bids have been paid and applications for new licenses related to those bids have been reviewed and granted.

75. An incumbent 39 GHz licensee with winning bids for new licenses in the auction must make any required winning bid payments before the Commission will process its application for new licenses. Pursuant to section 309(j)(4)(A) of the Communications Act, the Commission may use alternative payment schedules and methods of calculation in competitive bidding to promote economic opportunity and competition by avoiding excessive concentration of licenses and by disseminating licenses among a wide variety of applicants. In the Spectrum Frontiers Fourth R&O, the Commission found that assigning as much spectrum as possible through the auction serves the public interest and that enabling incumbents to retain equivalent rights without any additional payments would encourage them to relinquish spectrum usage rights under existing licenses. Accordingly, the Commission will process applications for new licenses after collecting winning bids, net of any winning bidder's expected incentive payment so long as such treatment of the incentive payment is consistent with Federal financial management principles and guidance.

76. As required by the Regulatory Flexibility Act of 1980, as amended (RFA), the Commission has prepared this Supplemental Initial Regulatory Flexibility Analysis (Supplemental IRFA) of the possible significant economic impact on small entities of the policies and rules addressed in this Public Notice to supplement the Commission's Initial and Final Regulatory Flexibility Analyses completed in the Spectrum Frontiers Fourth R&O, Spectrum Frontiers Orders, and other Commission orders pursuant to which Auction 103 will be conducted. Written comments are requested on this Supplemental IRFA. Comments must be identified as responses to the Supplemental IRFA and must be filed by the deadline for filing comments as specified in the Public Notice. The Commission will send a copy of the Public Notice, including the Supplemental IRFA, to the Chief Counsel for Advocacy of the Small Business Administration (SBA).

77. Need for, and Objectives of, the Proposed Rules. The Public Notice explains how the Bureau proposes to implement the steps described in the Spectrum Frontiers Fourth R&O to reconfigure incumbents' 39 GHz licenses to better match the new 39 GHz band plan and service rules adopted by the Commission and allow incumbents to make binding Initial Commitments through the Commission's Initial Commitment System. It also describes the process by which an incumbent 39 GHz licensee will have an opportunity to make a binding Initial Commitment through the Commission's Initial Commitment System to (1) have its licenses modified based on the Commission's proposed reconfiguration of its license holdings (and forgo bidding for new licenses in Auction 103); (2) have its licenses modified based on an acceptable alternative reconfiguration that the incumbent proposes, provided that it satisfies certain specified conditions (and forgo bidding for new licenses in Auction 103); or (3) commit to relinquish its licenses in exchange for an incentive payment and have its licenses cancelled, with the ability to bid for new licenses if it so chooses.

78. The Public Notice is intended to provide notice of and opportunity for interest parties to comment on the procedures described. The proposed procedures in the Public Notice constitute the more specific implementation of the decisions contemplated by the underlying rulemaking orders, including the Spectrum Frontiers Orders and relevant competitive bidding orders, and are fully consistent with those decisions. The Commission welcomes comment on all aspects of the process and specifically seeks comment on the following:

• A methodology for setting weights to apply to spectrum holdings in different Partial Economic Areas (PEAs);

• The de minimis standard for reconfigured holdings that cover most but not all of a PEA; and

• How to determine the geographic scope of modified licenses, if any, that cover less than a full PEA.

79. Legal Basis. The Commission's statutory obligations to small businesses under the Communications Act of 1934, as amended, are found in sections 309(j)(3)(B) and 309(j)(4)(D). The statutory basis for the Commission's competitive bidding rules is found in various provisions of the Communications Act of 1934, as amended, including 47 U.S.C. 154(i), 301, 302, 303(e), 303(f), 303(r), 304, 307, and 309(j). The Commission has established a framework of competitive bidding rules, updated most recently in 2015, pursuant to which it has conducted auctions since the inception of the auction program in 1994 and would conduct Auctions 103.

80. Description and Estimate of the Number of Small Entities to Which the Proposed Rules Will Apply. The RFA directs agencies to provide a description of, and, where feasible, an estimate of the number of small entities that may be affected by the proposed rules and policies, if adopted. The RFA generally defines the term “small entity” as having the same meaning as the terms “small business,” “small organization,” and “small governmental jurisdiction.” In addition, the term “small business” has the same meaning as the term “small business concern” under the Small Business Act. A “small business concern” is one which: (1) Is independently owned and operated; (2) is not dominant in its field of operation; and (3) satisfies any additional criteria established by the SBA.

81. Regulatory Flexibility Analyses were incorporated into the Spectrum Frontiers Orders and in those analyses, the Commission described in detail the small entities that might be significantly affected. Accordingly, in this Public Notice, the Bureau hereby includes by reference the descriptions and estimates of the number of small entities from the previous Regulatory Flexibility Analyses in the Spectrum Frontiers Orders.

82. Based on the information available in the Commission's public Universal Licensing System (ULS), the Commission estimates there are 16 incumbent 39 GHz licensees. Of these incumbent 39 GHz licensees, the Commission estimates that up to 8 could be considered to be a “small entity” under the RFA.

83. Description of Projected Reporting, Recordkeeping, and Other Compliance Requirements. The Commission designed the reconfiguration and Initial Commitment processes to minimize reporting and compliance requirements for participating incumbent licensees, including those that are small entities. For example, incumbent 39 GHz licensees desiring to make an Initial Commitment will need to file an Incumbent 39 GHz Licensee Short-Form Application (FCC Form 175-A), which the Commission will use to provide an incumbent 39 GHz licensee (or, if applicable, a group of commonly controlled entities that hold 39 GHz licenses) with access to the Initial Commitment System in order to make an Initial Commitment regarding existing 39 GHz spectrum holdings. The information that must be provided on FCC Form 175-A is limited to that which is necessary to enable the Commission to provide incumbent 39 GHz licensees with access Initial Commitment System for purposes of making their Initial Commitments.

84. The Bureau does not expect that the reconfiguration and Initial Commitment processes and procedures will require small entities to hire attorneys, engineers, consultants, or other professionals because the information necessary to comply with these processes and procedures should be available and maintained as part of the customary and usual business or private practice of all incumbent 39 GHz licensees.

85. Steps taken to Minimize Significant Economic Impact on Small Entities, and Significant Alternatives. The RFA requires an agency to describe any significant, specifically small business, alternatives that it has considered in reaching its proposed approach, which may include the following four alternatives (among others): “(1) the establishment of differing compliance or reporting requirements or timetables that take into account the resources available to small entities; (2) the clarification, consolidation, or simplification of compliance and reporting requirements under the rule for such small entities; (3) the use of performance rather than design standards; and (4) an exemption from coverage of the rule, or any part thereof, for such small entities.”

86. The Commission has taken steps that should minimize any economic impact that the proposed reconfiguration and Initial Commitment processes and procedures may have on small businesses. As an initial matter, the procedures only apply to incumbent 39 GHz licensees. Moreover, the Commission has made an effort to minimize the burden on all participating incumbent 39 GHz licensees, regardless of size, by limiting the information collected on FCC Form 175-A to that which is necessary to enable the Commission to provide an incumbent 39 GHz licensee (or, if applicable a group of commonly controlled entities that hold 39 GHz licenses) with access to the Initial Commitment System in order to make an Initial Commitment regarding existing 39 GHz spectrum holdings. Finally, detailed instructions and guidance to incumbent 39 GHz licensees about filing FCC Form 175-A, including the filing deadline, will be provided in advance of the start of the FCC Form 175-A filing window, and Bureau staff will be conducting outreach to all incumbents to ensure that they are informed of their options, thereby further minimizing any burdens on incumbent 39 GHz licensees that desire to make an Initial Commitment, including those that are small entities.

87. Federal Rules that May Duplicate, Overlap, or Conflict with the Proposed Rules. None.

88. It is ordered that, pursuant to sections 309 and 316 of the Communications Act of 1934, as amended, 47 U.S.C. 309, 316, and the authority delegated in the Spectrum Frontiers Fourth R&O, FCC 18-180, and 47 CFR 0.271, 0.331, the licenses of all 39 GHz band licensees are hereby modified as specified in the Spectrum Frontiers Fourth R&O and further explained in the Public Notice.

89. It is further ordered that applications for transfers or assignments of 39 GHz licenses other than pursuant to the exception described in the Public Notice will not be accepted during the period described in the Public Notice.

90. It is further ordered that a copy of the Public Notice, including the Supplemental Initial Regulatory Flexibility Analysis, shall be sent to the Chief Counsel for Advocacy of the Small Business Administration.

The National Traffic and Motor Vehicle Safety Act (Safety Act), codified as 49 U.S.C. chapter 301, provides the Secretary of Transportation authority to exempt, on a temporary basis, under specified circumstances, and on terms the Secretary deems appropriate, motor vehicles from a motor vehicle safety standard or bumper standard. This authority and circumstances are set forth in 49 U.S.C. 30113. The Secretary has delegated the authority for implementing this section to NHTSA.

NHTSA established 49 CFR part 555, Temporary Exemption from Motor Vehicle Safety and Bumper Standards, to implement the statutory provisions concerning temporary exemptions. Under Part 555 subpart A, a vehicle manufacturer seeking an exemption must submit a petition for exemption containing specified information. Among other things, the petition must set forth (a) the reasons why granting the exemption would be in the public interest and consistent with the objectives of the Safety Act, and (b) required information showing that the manufacturer satisfies one of four bases for an exemption. 1 Hemphill is applying on the basis that compliance with the standard would prevent the manufacturer from selling a motor vehicle with an overall safety level at least equal to the overall safety level of nonexempt vehicles ( see 49 CFR 555.6(d)). A manufacturer is eligible for an exemption under this basis only if NHTSA determines the exemption is for not more than 2,500 vehicles to be sold in the U.S. in any 12-month period. An exemption under this basis may be granted for not more than 2 years but may be renewed upon reapplication. 2

In accordance with 49 U.S.C. 30113 and the procedures in 49 CFR part 555, Hemphill submitted an April 5, 2018 dated petition asking NHTSA for a temporary exemption from the shoulder belt requirement of FMVSS No. 208 for side-facing seats on its motorcoaches. The basis for the application is that compliance would prevent Hemphill from selling a motor vehicle with an overall safety level at least equal to the overall safety level of nonexempt vehicles (49 CFR 555.6(d)). To view the petition (and documents Hemphill later submitted amending it), go to http://www.regulations.gov and enter the docket number set forth in the heading of this document. 3

Hemphill describes itself as a second-stage manufacturer  4 organized under the laws of Tennessee. The petitioner states that it typically receives a bus shell  5 from an “original manufacturer” and “customizes the Over-the-Road Bus (`OTRB') to meet the needs of entertainers, politicians, musicians, celebrities and other specialized customers who use motorcoaches as a necessity for their businesses.” Hemphill states that it “builds out the complete interior” of the bus shell, including—

Hemphill states that it also operates the vehicles as a for-hire motor carrier of passengers, “leas[ing] the vehicle with driver to a customer on an exclusive basis for a designated period of time.” The petitioner states that “fewer than 100 entertainer-type motorcoaches with side-facing seats are manufactured and enter the U.S. market each year.” Hemphill seeks to install Type 1 seat belts (lap belt only) at side-facing seating positions, instead of Type 2 seat belts (lap and shoulder belts) as required by FMVSS No. 208. Hemphill states that, absent the requested exemption, it will otherwise be unable to sell a motorcoach whose overall level of safety or impact protection is at least equal to that of a nonexempted motorcoach.

Pursuant to 49 CFR 555.6(d), an application must provide “[a] detailed analysis of how the vehicle provides the overall level of safety or impact protection at least equal to that of nonexempt vehicles.” Hemphill refers to NHTSA's discussions in an earlier NHTSA rulemaking, summarized below, about the absence of the need for, and safety concerns about, the shoulder portion of Type 2 belts on side-facing seats in certain buses.

On November 25, 2013, NHTSA published a final rule amending FMVSS No. 208 to require seat belts for each passenger seating position in all new over-the-road buses (regardless of gross vehicle weight rating (GVWR)), and all other buses with GVWRs greater than 11,793 kilograms (kg) (26,000 pounds (lb)) (with certain exclusions). 6 The final rule became effective November 28, 2016 for buses manufactured in a single stage, and a year later for buses manufactured in more than one stage.

Hemphill is a final-stage manufacturer of buses covered by the seat belt rule. Thus, Hemphill's over-the-road buses and buses with a GVWR greater than 11,793 kg (26,000 lb), manufactured on or after November 28, 2017, are required to have Type 2 seat belts (lap and shoulder seat belts) at all passenger seating positions.

NHTSA commenced the seat belt rulemaking by publishing a notice of proposed rulemaking (NPRM) on August 18, 2010. 7 For side-facing seating positions, the NPRM proposed to provide manufacturers the option of installing either a Type 1 (lap belt) or a Type 2 (lap and shoulder belt). 8 This proposed option was consistent with a provision in FMVSS No. 208 that allows lap belts for side-facing seats on buses with a GVWR of 4,536 kg (10,000 lb) or less. The agency proposed to permit lap belts in side-facing seats because NHTSA was unaware of any demonstrable increase in associated risk of lap belts compared to lap/shoulder belts. The agency also stated  9 that “a study commissioned by the European Commission regarding side-facing seats on minibuses and motorcoaches found that due to different seat belt designs, crash modes and a lack of real world data, it cannot be determined whether a lap belt or a lap/shoulder belt would be the most effective.”  10

However, after the NPRM was published, the Motorcoach Enhanced Safety Act of 2012 was enacted as part of the Moving Ahead for Progress in the 21st Century Act (MAP-21), Public Law 112-141 (July 6, 2012). Section 32703(a) of MAP-21 directed the Secretary of Transportation (authority has been delegated to NHTSA) to “prescribe regulations requiring safety belts to be installed in motorcoaches at each designated seating position.”  11 MAP-21 stated in § 32702(12): “The term `safety belt' has the meaning given the term in section 153(i)(4)(B) of title 23, United States Code.” This provision defines “safety belt” as “an occupant restraint system consisting of integrated lap shoulder belts.” Thus, in response to MAP-21, NHTSA's final rule amended FMVSS No. 208 to require lap/shoulder belts at all designated seating positions, including side-facing seats, on over-the-road buses. 12

At the same time, in the November 25, 2013 final rule preamble, NHTSA acknowledged that the agency had declined to require lap/shoulder belts on side-facing seats of light vehicles because NHTSA believed “the addition of a shoulder belt at [side-facing seats on light vehicles] is of limited value, given the paucity of data related to side facing seats.”  13 NHTSA also recognized there have been concerns in the past about a shoulder belt on side-facing seats, noting in the final rule that, although the agency has no direct evidence that shoulder belts may cause serious neck injuries when applied to side-facing seats, there are simulation data indicative of potential carotid artery injury when the neck is loaded by the shoulder belt. 14 In addition, the agency noted that Australian Design Rule ADR 5/04, “Anchorages for Seatbelts” has specifically prohibited shoulder belts for side-facing seats since 1975. In the November 2013 final rule, NHTSA stated that given there would likely be few side-facing seats on over-the-road buses, and in view of the unknowns about shoulder belt loading of an occupant's neck on a side-facing seat,

After reiterating NHTSA's discussions in the seat belt rulemaking, the petitioner states that NHTSA has not conducted testing on the impact or injuries to passengers in side-facing seats in motorcoaches, so “there is no available credible data that supports requiring a Type 2 belt at the side-facing seating positions.” Hemphill says that it believes if it complies with the final rule as published, it would be “forced to offer” customers—

Pursuant to 49 CFR 555.5(b)(7), the petitioner must state why granting an exemption allowing it to install Type 1 instead of Type 2 seat belts in side-facing seats would be in the public interest and consistent with the objectives of the Safety Act.

In a May 11, 2018 email providing this information, Hemphill states that granting an exemption to allow manufacturers an option of installing a Type 1 lap belt at side-facing seating positions is consistent with the public interest because “NHTSA's analysis in developing this rule found that such belts presented no demonstrable increase in associated risk.” The petitioner also states that the final rule requiring Type 2 belts at side-facing seats “was not the result of any change in NHTSA policy or analysis, but rather resulted from an overly broad mandate by Congress for `safety belts to be installed in motorcoaches at each designated seating position.' ” Hemphill states that, “based on the existing studies referenced herein and noted in the rulemaking, petitioners assert that Type 1 belts at side-facing seats may provide equivalent or even superior occupant protection than Type 2 belts.”

The petitioner believes that an option for Type 1 belts at side-facing seats is consistent with the objectives of 49 U.S.C. chapter 301 (the Safety Act) because, Hemphill states, § 30111(a) of the Safety Act states that the Secretary shall establish motor vehicle safety standards that “shall be practicable, meet the need for motor vehicle safety, and be stated in objective terms.” The petitioner states that—

Hemphill indicates that if there is no future NHTSA research, testing or analysis to justify the use of Type 2 belts in side-facing seats in over-the-road buses, it expects it will seek to renew the exemption, if granted, at the end of the exemption period.

There are aspects of Hemphill's petition that appear inconsistent with the provisions of Part 555 Subpart A. The agency acknowledges them here for the benefit of the reader.

First, in its petition, Hemphill asks that if NHTSA grants the exemption, the agency should apply the exemption “retroactively to November 28, 2017.” Petitions for temporary exemptions are prospective in application, not retroactive. Section 555.7(f) states: “Unless a later effective date is specified in the notice of the grant, a temporary exemption is effective upon publication of the notice in the Federal Register and exempts vehicles manufactured on and after the effective date.” Thus, if the petition is granted, it would apply to vehicles manufactured on and after the effective date of the exemption, which would be on publication of the notice or a later date. 15

In its May 11, 2018 email, Hemphill argues that NHTSA has authority to establish a November 17, 2017  16 effective date for the exemption under 49 U.S.C. 30111(d) of the Safety Act. Section 30111 authorizes NHTSA to prescribe FMVSSs, with subsection (d) generally prescribing the effective dates that NHTSA may specify for the FMVSSs. 17 Section 30111 does not apply to the effective dates for temporary exemptions.

Second, Hemphill states in its petition that it covers 39 “other petitioners” listed in an attachment to the petition. Under Part 555 Subpart A, only one petitioner is covered by a petition. Section 30113(b)(2) of the Safety Act provides that the agency may begin a proceeding “when a manufacturer” applies for an exemption (emphasis added). Under the terms of 49 CFR 555.5, “ a manufacturer” may apply for a temporary exemption. In contrast, 49 CFR part 555 subpart B, “Vehicles Built in Two or More Stages and Altered Vehicles,” allows an industry trade association representing a group of alterers or manufacturers of motor vehicles built in two or more stages to file an economic hardship petition representing the interests of multiple manufacturers. 18 When NHTSA proposed to adopt subpart B, NHTSA described subpart B's allowing manufacturers to bundle petitions as “relief not contained in the current version of part 555.”  19 Thus, it appears Hemphill's April 5, 2018 petition for temporary exemption could be considered as only from Hemphill, and not as a bundled petition covering the other parties listed in the attachment to the petition.

The agency seeks comment from the public on the merits of Hemphill's petition for a temporary exemption from FMVSS No. 208's shoulder belt requirement for side-facing seats. After considering public comments and other available information, NHTSA will publish a notice of final action on the petition in the Federal Register .