Authority for This Rulemaking

The FAA's authority to issue rules regarding aviation safety is found in Title 49 of the United States Code. 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. This rulemaking is promulgated under the authority described in Subtitle VII, Part A, Subpart I, Section 40103. Under that section, the FAA is charged with prescribing regulations to assign the use of airspace necessary to ensure the safety of aircraft and the efficient use of airspace. This regulation is within the scope of that authority, as it would establish Class E airspace at Bend Municipal Airport, Bend, OR to support instrument flight rules (IFR) operations at the airport.

Interested parties are invited to participate in this proposed rulemaking by submitting such written data, views, or arguments as they may desire. Comments that provide the factual basis supporting the views and suggestions presented are particularly helpful in developing reasoned regulatory decisions on the proposal. Comments are specifically invited on the overall regulatory, aeronautical, economic, environmental, and energy-related aspects of the proposal. Communications should identify both docket numbers (FAA Docket No. FAA-2019-0887 and Airspace Docket No. 19-ANM-32) and be submitted in triplicate to DOT Docket Operations (see ADDRESSES section for address and phone number). You may also submit comments through the internet at https://www.regulations.gov. Persons wishing the FAA to acknowledge receipt of their comments on this notice must submit with those comments a self-addressed, stamped postcard on which the following statement is made: “Comments to Docket No. FAA-2019-0887; Airspace Docket No. 19-ANM-32.” The postcard will be date/time stamped and returned to the commenter.

All communications received before the specified closing date for comments will be considered before taking action on the proposed rule. The proposal contained in this notice may be changed in light of the comments received. A report summarizing each substantive public contact with FAA personnel concerned with this rulemaking will be filed in the docket.

An electronic copy of this document may be downloaded through the internet at https://www.regulations.gov. Recently published rulemaking documents can also be accessed through the FAA's web page at https://www.faa.gov//air_traffic/publications/airspace_amendments/.

You may review the public docket containing the proposal, any comments received, and any final disposition in person in the Dockets Office (see the ADDRESSES section for the address and phone number) between 9:00 a.m. and 5:00 p.m., Monday through Friday, except federal holidays. An informal docket may also be examined during normal business hours, except federal holidays, at the Northwest Mountain Regional Office of the Federal Aviation Administration, Air Traffic Organization, Western Service Center, Operations Support Group, 2200 S 216th Street, Des Moines, WA 98198.

This document proposes to amend FAA Order 7400.11D, Airspace Designations and Reporting Points, dated August 8, 2019, and effective September 15, 2019. FAA Order 7400.11D is publicly available as listed in the ADDRESSES section of this document. FAA Order 7400.11D lists Class A, B, C, D, and E airspace areas, air traffic service routes, and reporting points.

The FAA is proposing an amendment to Title 14 Code of Federal Regulations (14 CFR) Part 71 by amending Class E airspace at Bend Municipal Airport, Bend, OR. The proposal adds a designated surface airspace area, which is designed to protect IFR arrivals descending below 1,000 feet above the surface and IFR departures until reaching 700 feet above the surface. The airspace area is defined as that airspace extending upward from the surface within a 3.9-mile radius of the Bend Municipal Airport, excluding that airspace within 1 mile of a point in space located at latitude 44°02′51″ N longitude 121°16′301″ W. The exclusion allows the Pilot Butte airport to remain outside of the controlled airspace extending upward from the surface.

This action also proposes to add a Class E airspace area designated as an extension to a Class D or Class E surface area. This area is defined as that airspace extending upward from the surface within 1 mile each side of the 167° bearing, extending from the 3.9-mile radius to 6.8 miles south of the Bend Municipal Airport.

Additionally, the action proposes to amend the Class E airspace extending upward from 700 feet above the surface to properly contain IFR aircraft on instrument approach when descending below 1,500 feet above the surface. The area is also designed to contain IFR departures until reaching 1,200 feet above the surface. The proposal would amend the Class E airspace area extending upward from 700 feet above the surface to within a 6.4-mile radius of the airport and within 1.1 miles each side of the 167° bearing, extending from the 6.4-mile radius to 8.8 miles south of the airport. This area also includes that airspace within 3.8 miles each side of the 338° bearing, extending from the 6.8-mile radius to 8.4 miles north of the Bend Municipal Airport.

Class E2, E4 and E5 airspace designations are published in paragraph 6002, 6002 and 6005, respectively, of FAA Order 7400.11D, dated August 8, 2019, and effective September 15, 2019, which is incorporated by reference in 14 CFR 71.1. The Class E airspace designations listed in this document will be published subsequently in the Order.

FAA Order 7400.11, Airspace Designations and Reporting Points, is published yearly and effective on September 15.

The FAA has determined that this proposed regulation only involves an established body of technical regulations for which frequent and routine amendments are necessary to keep them operationally current, is non-controversial and unlikely to result in adverse or negative comments. It, therefore: (1) Is not a “significant regulatory action” under Executive Order 12866; (2) is not a “significant rule” under DOT Regulatory Policies and Procedures (44 FR 11034; February 26, 1979); and (3) does not warrant preparation of a regulatory evaluation as the anticipated impact is so minimal. Given this is a routine matter that will only affect air traffic procedures and air navigation, it is certified that this rule, when promulgated, would not have a significant economic impact on a substantial number of small entities under the criteria of the Regulatory Flexibility Act.

This proposal will be subject to an environmental analysis in accordance with FAA Order 1050.1F, “Environmental Impacts: Policies and Procedures” prior to any FAA final regulatory action.

Accordingly, pursuant to the authority delegated to me, the Federal Aviation Administration proposes to amend 14 CFR part 71 as follows:

Authority for This Rulemaking

The FAA's authority to issue rules regarding aviation safety is found in Title 49 of the United States Code. 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. This rulemaking is promulgated under the authority described in Subtitle VII, Part A, Subpart I, Section 40103. Under that section, the FAA is charged with prescribing regulations to assign the use of airspace necessary to ensure the safety of aircraft and the efficient use of airspace. This regulation is within the scope of that authority as it would establish Class E airspace to support a new RNAV procedure and IFR departures at Mountain Home Municipal Airport, Mountain Home, ID.

Interested parties are invited to participate in this proposed rulemaking by submitting such written data, views, or arguments as they may desire. Comments that provide the factual basis supporting the views and suggestions presented are particularly helpful in developing reasoned regulatory decisions on the proposal. Comments are specifically invited on the overall regulatory, aeronautical, economic, environmental, and energy-related aspects of the proposal. Communications should identify both docket numbers (FAA Docket No. FAA-2019-0972 and Airspace Docket No. 19-ANM-30) and be submitted in triplicate to DOT Docket Operations (see ADDRESSES section for address and phone number). You may also submit comments through the internet at https://www.regulations.gov. Persons wishing the FAA to acknowledge receipt of their comments on this notice must submit with those comments a self-addressed, stamped postcard on which the following statement is made: “Comments to Docket No. FAA-2019-0972; Airspace Docket No. 19-ANM-30.” The postcard will be date/time stamped and returned to the commenter.

All communications received before the specified closing date for comments will be considered before taking action on the proposed rule. The proposal contained in this notice may be changed in light of the comments received. A report summarizing each substantive public contact with FAA personnel concerned with this rulemaking will be filed in the docket.

An electronic copy of this document may be downloaded through the internet at https://www.regulations.gov. Recently published rulemaking documents can also be accessed through the FAA's web page at https://www.faa.gov//air_traffic/publications/airspace_amendments/.

You may review the public docket containing the proposal, any comments received, and any final disposition in person in the Dockets Office (see the ADDRESSES section for the address and phone number) between 9:00 a.m. and 5:00 p.m., Monday through Friday, except federal holidays. An informal docket may also be examined during normal business hours, except federal holidays, at the Northwest Mountain Regional Office of the Federal Aviation Administration, Air Traffic Organization, Western Service Center, Operations Support Group, 2200 S 216th Street, Des Moines, WA 98198.

This document proposes to amend FAA Order 7400.11D, Airspace Designations and Reporting Points, dated August 8, 2019, and effective September 15, 2019. FAA Order 7400.11D is publicly available as listed in the ADDRESSES section of this document. FAA Order 7400.11D lists Class A, B, C, D, and E airspace areas, air traffic service routes, and reporting points.

The FAA is proposing an amendment to Title 14 Code of Federal Regulations (14 CFR) Part 71 by establishing Class E airspace extending upward from 700 feet or more above the surface at Mountain Home Municipal Airport, Mountain Home, ID. Establishing Class E airspace will support the implementation of a new RNAV approach procedure as well as provide appropriate airspace for the current RNAV approach procedure and IFR departures. Controlled airspace in the vicinity of the municipal airport is currently defined as part of Mountain Home Air Force Base's Class E airspace; independent airspace should be established for the municipal airport.

The first airspace area, to the extent possible, will contain IFR departures until reaching 1,200 feet above the surface and IFR arrivals descending below 1,500 feet above the surface. This airspace area will extend upward from 700 feet above the surface within a 5.5-mile radius of the airport, and within 2 miles each side of the 300° bearing extending from the 5.5-mile radius to 8 miles northwest of the Mountain Home Municipal Airport, excluding that airspace within the Mountain Home Air Force Base's Class D and Class E2 surface areas.

The second airspace area is designed to contain IFR aircraft transitioning to/from the en route environment and will extend upward from 1,200 feet above the surface within a 20-mile radius of the Mountain Home Municipal Airport.

Class E airspace designations are published in paragraph 6005 of FAA Order 7400.11D, dated August 8, 2019, and effective September 15, 2019, which is incorporated by reference in 14 CFR 71.1. The Class E airspace designation listed in this document will be published subsequently in the Order.

FAA Order 7400.11, Airspace Designations and Reporting Points, is published yearly and effective on September 15.

The FAA has determined that this regulation only involves an established body of technical regulations for which frequent and routine amendments are necessary to keep them operationally current, is non-controversial and unlikely to result in adverse or negative comments. It, therefore: (1) Is not a “significant regulatory action” under Executive Order 12866; (2) is not a “significant rule” under DOT Regulatory Policies and Procedures (44 FR 11034; February 26, 1979); and (3) does not warrant preparation of a regulatory evaluation as the anticipated impact is so minimal. Since this is a routine matter that will only affect air traffic procedures and air navigation, it is certified that this rule, when promulgated, would not have a significant economic impact on a substantial number of small entities under the criteria of the Regulatory Flexibility Act.

This proposal will be subject to an environmental analysis in accordance with FAA Order 1050.1F, “Environmental Impacts: Policies and Procedures” prior to any FAA final regulatory action.

Accordingly, pursuant to the authority delegated to me, the Federal Aviation Administration proposes to amend 14 CFR part 71 as follows:

Authority for This Rulemaking

The FAA's authority to issue rules regarding aviation safety is found in Title 49 of the United States Code. 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. This rulemaking is promulgated under the authority described in Subtitle VII, Part A, Subpart I, Section 40103. Under that section, the FAA is charged with prescribing regulations to assign the use of airspace necessary to ensure the safety of aircraft and the efficient use of airspace. This regulation is within the scope of that authority as it would establish Class E airspace to support a new RNAV procedure and IFR departures at Big Horn County Airport, Hardin, MT.

Interested parties are invited to participate in this proposed rulemaking by submitting such written data, views, or arguments as they may desire. Comments that provide the factual basis supporting the views and suggestions presented are particularly helpful in developing reasoned regulatory decisions on the proposal. Comments are specifically invited on the overall regulatory, aeronautical, economic, environmental, and energy-related aspects of the proposal. Communications should identify both docket numbers (FAA Docket No. FAA-2019-0954 and Airspace Docket No. 19-ANM-6) and be submitted in triplicate to DOT Docket Operations (see ADDRESSES section for address and phone number). You may also submit comments through the internet at https://www.regulations.gov. Persons wishing the FAA to acknowledge receipt of their comments on this notice must submit with those comments a self-addressed, stamped postcard on which the following statement is made: “Comments to Docket No. FAA-2019-0954; Airspace Docket No. 19-ANM-6.” The postcard will be date/time stamped and returned to the commenter.

All communications received before the specified closing date for comments will be considered before taking action on the proposed rule. The proposal contained in this notice may be changed in light of the comments received. A report summarizing each substantive public contact with FAA personnel concerned with this rulemaking will be filed in the docket.

An electronic copy of this document may be downloaded through the internet at https://www.regulations.gov. Recently published rulemaking documents can also be accessed through the FAA's web page at https://www.faa.gov//air_traffic/publications/airspace_amendments/.

You may review the public docket containing the proposal, any comments received, and any final disposition in person in the Dockets Office (see the ADDRESSES section for the address and phone number) between 9:00 a.m. and 5:00 p.m., Monday through Friday, except federal holidays. An informal docket may also be examined during normal business hours, except federal holidays, at the Northwest Mountain Regional Office of the Federal Aviation Administration, Air Traffic Organization, Western Service Center, Operations Support Group, 2200 S 216th Street, Des Moines, WA 98198.

This document proposes to amend FAA Order 7400.11D, Airspace Designations and Reporting Points, dated August 8, 2019, and effective September 15, 2019. FAA Order 7400.11D is publicly available as listed in the ADDRESSES section of this document. FAA Order 7400.11D lists Class A, B, C, D, and E airspace areas, air traffic service routes, and reporting points.

The FAA is proposing an amendment to Title 14 Code of Federal Regulations (14 CFR) Part 71 by establishing Class E airspace extending upward from 700 feet above the surface at the Big Horn County Airport, Hardin, MT. The establishment of the new Class E airspace area will support the airport's transition from VFR to IFR operations. Specifically, to the extent possible, it will contain IFR departures until reaching 1,200 feet above the surface and IFR arrivals descending below 1,500 feet above the surface.

The airspace area will extend upward from 700 feet above the surface within a 6.4-mile radius of the airport, and within 2 miles each side of the 090° bearing extending from the 6.4-mile radius to 10.4 miles east of the Big Horn County Airport.

Class E airspace designations are published in paragraph 6005 of FAA Order 7400.11D, dated August 8, 2019, and effective September 15, 2019, which is incorporated by reference in 14 CFR 71.1. The Class E airspace designation listed in this document will be published subsequently in the Order.

FAA Order 7400.11, Airspace Designations and Reporting Points, is published yearly and effective on September 15.

The FAA has determined that this regulation only involves an established body of technical regulations for which frequent and routine amendments are necessary to keep them operationally current, is non-controversial and unlikely to result in adverse or negative comments. It, therefore: (1) Is not a “significant regulatory action” under Executive Order 12866; (2) is not a “significant rule” under DOT Regulatory Policies and Procedures (44 FR 11034; February 26, 1979); and (3) does not warrant preparation of a regulatory evaluation as the anticipated impact is so minimal. Since this is a routine matter that will only affect air traffic procedures and air navigation, it is certified that this rule, when promulgated, would not have a significant economic impact on a substantial number of small entities under the criteria of the Regulatory Flexibility Act.

This proposal will be subject to an environmental analysis in accordance with FAA Order 1050.1F, “Environmental Impacts: Policies and Procedures” prior to any FAA final regulatory action.

Accordingly, pursuant to the authority delegated to me, the Federal Aviation Administration proposes to amend 14 CFR part 71 as follows:

We are proposing amendments to 17 CFR 210. 2-01 (“Rule 2-01”) of 17 CFR 210.01 et seq. (“Regulation S-X). 1

The Commission has long recognized that an audit by an objective, impartial, and skilled professional contributes to both investor protection and investor confidence. 2 If investors do not perceive that the auditor is independent from the audit client, they will derive less confidence from the auditor's report and the audited financial statements. As such, the Commission's auditor independence rule, as set forth in Rule 2-01, requires auditors  3 to be independent of their audit clients both “in fact and in appearance.”  4

In 2000, the Commission adopted a comprehensive framework of rules governing auditor independence, laying out governing principles and describing certain specific financial, employment, business, and non-audit service relationships that would cause an auditor not to be independent of its audit client. The 2000 amendments set forth the standard for analysis to determine whether an auditor is independent. Under this analysis, pursuant to Rule 2-01(b), the “Commission will not recognize an accountant as independent, with respect to an audit client, if the accountant is not, or a reasonable investor with knowledge of all relevant facts and circumstances would conclude that the accountant is not, capable of exercising objective and impartial judgment on all issues encompassed within the accountant's engagement.” Rule 2-01(b) further states that the “Commission will consider all relevant circumstances, including all relationships between the accountant and the audit client,” in determining whether an auditor is independent. Rule 2-01(c) then sets forth a nonexclusive list of particular circumstances that the Commission considers to be inconsistent with the independence standard in Rule 2-01(b), including certain financial, employment, business, and non-audit service relationships between an accountant and its audit client. 5

Except for revisions made in connection with amendments required by the Sarbanes-Oxley Act of 2002 (“Sarbanes-Oxley Act”)  6 and the recent amendments related to certain debtor-creditor relationships, 7 many of the provisions from the 2000 Adopting Release have remained unchanged since adoption. We seek to maintain the relevance of our auditor independence requirements, and evaluate their effectiveness in light of current market conditions and industry practices. As such, in connection with the recent proposal to address certain debtor-creditor relationships, we also solicited comment on other potential updates to the auditor independence rules. 8 After considering the feedback received from the public and our experience administering these rules since their initial adoption nearly two decades ago, we are proposing additional amendments to our auditor independence rules to more effectively focus the independence analysis on those relationships or services that we believe are most likely to threaten an auditor's objectivity and impartiality.

We welcome feedback and encourage interested parties to submit comments on any or all aspects of the proposed rule amendments. When commenting, it would be most helpful if you include the reasoning behind your position or recommendation.

“Rule 2-01 is designed to ensure that auditors are qualified and independent of their audit clients both in fact and in appearance.”  9 The term “audit client”  10 is defined as “the entity whose financial statements or other information is being audited, reviewed or attested”  11 and any “affiliates of the audit client.”  12 The definition of “affiliate of the audit client” includes, in part, “[a]n entity that has control over the audit client, or over which the audit client has control, or which is under common control with the audit client, including the audit client's parents and subsidiaries” and “[e]ach entity in the investment company complex when the audit client is an entity that is part of an investment company complex.”  13 Rule 2-01(f)(14) defines an investment company complex (“ICC”) to include, in part, “[a]ny entity controlled by or controlling an investment adviser or sponsor . . . or any entity under common control with an investment adviser or sponsor . . . if the entity: (1) Is an investment adviser or sponsor; or (2) Is engaged in the business of providing administrative, custodian, underwriting, or transfer agent services to any investment company, investment adviser, or sponsor.”

As noted above, the first paragraph of the definition of affiliate of the audit client includes “an entity that has control over the audit client . . . or which is under common control with the audit client, including the audit client's parents and subsidiaries”  14 (emphasis added). As such, entities under common control with the audit client (“sister entities”) are considered affiliates and fall within the definition of the “audit client” set forth in Rule 2-01(f)(6). Additionally, pursuant to Rule 2-01(f)(4)(iv), each entity in an ICC is considered an affiliate when the audit client is part of the ICC. Consequently, in complex organizational structures, such as large ICCs, the requirement to identify and monitor for potential independence-impairing relationships and services currently applies to affiliated entities, including sister entities, regardless of whether the sister entities are material to the controlling entity.

In our experience administering the independence rules, we have observed some challenges in the practical application of the “common control” component of the definition of affiliate of the audit client. We also have observed a number of situations where a prohibited service or relationship with a sister entity did not result in a corresponding threat to an auditor's objectivity and impartiality. Additionally, several commenters have suggested that we revisit the scope of the current application of the independence rules to entities under “common control.”  15 In the private equity and investment company context, where there potentially is a significant volume of acquisitions and dispositions of unrelated portfolio companies, 16 the definition of affiliate of the audit client may result in an expansive and constantly changing list of entities that are considered to be affiliates of the audit client. Such changes in portfolio companies can create compliance challenges for audit firms performing independence analyses by requiring them to monitor their various relationships and services with affiliates of the audit client, even if many of those relationships and services likely would not threaten the auditor's objectivity and impartiality.

Furthermore, individual portfolio companies are often audited by different auditors, even when they are within the same ICC or private equity structure. Where the portfolio companies are otherwise unrelated, multiple audit firms may need to be independent of each of the entities currently deemed affiliates of the audit client. As a result, the shared responsibility of the audit client and respective audit firm to monitor the relationships and services against this often expansive and constantly changing list of affiliates as part of their independence analysis throughout the audit and professional engagement period could result in substantial compliance costs. Such compliance costs from independence monitoring arise even where the relationships being monitored are not likely to threaten the auditor's objectivity and impartiality, as discussed further below.

In addition to impacting monitoring and compliance efforts, the current application of the common control prong in Rule 2-01(f)(4)(i) to an auditor's relationships and services with sister entities also may have competitive effects on the market for audit and non-audit services. Where a potential audit client is in the market for an auditor, the number of qualified audit firms may be reduced because certain audit firms may have relationships with or provide services to sister entities that are impermissible under the current auditor independence rules regardless of the impact to the objectivity or impartiality of the audit firm. This potential reduction in the number of qualified audit firms may constrain the audit client's choice as to its preferred auditor and thereby also may have an impact on audit quality. For example, those responsible for selecting an auditor may believe a certain audit firm is the best fit from an audit quality perspective to audit one of the portfolio companies, but the audit firm would not be considered independent if it is providing a prohibited service to a sister entity, even where such sister entity is not material to the controlling entity.

To address these challenges and more effectively focus the definition of affiliate of the audit client on those relationships and services that are most likely to threaten auditor objectivity and impartiality, we propose amending both paragraphs (f)(4) ( i.e., the affiliate of the audit client definition) and (f)(14) ( i.e., the ICC definition) of Rule 2-01 to include materiality qualifiers in the respective common control provisions and to distinguish how the definition applies when an accountant is auditing a portfolio company, an investment company, or an investment adviser or sponsor.

Although the proposed amendments in this section will impact an auditor's analysis under Rule 2-01(c) by changing the population of entities that are included in the definition of audit client, the proposed amendments do not alter the application of the general standard in Rule 2-01(b). Because the Commission is not able to ascertain all the permutations of relationships or services that would impair an auditor's objectivity and impartiality, the Commission focused “the legal standard [in Rule 2-01(b)] by including the explicit reference to `all relevant facts and circumstances.' ”  17 As noted in the 2000 Adopting Release, “[c]ircumstances that are not specifically set forth in our rule are measured by the general standard set forth in Rule 2-01(b).” As such, notwithstanding the potential exclusion from the term audit client of entities that are currently considered affiliates of the audit client but would no longer be deemed affiliates under the proposed amendments, relationships and services between an auditor and such entities are still subject to the general standard. For example, the audit firm, or those charged with governance of the entity under audit, may identify independence concerns in fact or in appearance, individually or in the aggregate, upon considering the nature, extent, relative importance and other aspects of the services or relationships between the auditor, the controlling entity, and such sister entities that are not material to the controlling entity.

We are proposing to amend Rule 2-01(f)(4)(i) to include a materiality requirement with respect to operating companies under common control. 18 With respect to the application of the affiliate of the audit client definition to operating companies, including portfolio companies, we propose amending Rule 2-01(f)(4)(i) to focus the independence analysis on sister entities that are material to the controlling entity. Specifically, proposed Rule 2-01(f)(4)(i)(B) would qualify the definition with “unless the entity is not material to the controlling entity.”

To demonstrate the application of proposed Rule 2-01(f)(4)(i)(B) to operating companies, consider the following organizational structure: A parent company (Parent Company A) has control over three operating companies, including Operating Company B. If an accountant is serving as Operating Company B's auditor, it would need to consider whether either of the other two sister entities are material to Parent Company A to determine whether one or both of the sister entities are affiliates of the audit client.

As noted below, we believe it is appropriate to identify the affiliates of the audit client for a portfolio company under audit under proposed Rule 2-01(f)(4)(i) rather than under proposed Rule 2-01(f)(14). Portfolio companies are a type of operating company and, also as discussed below, often the portfolio companies are unrelated even though they are controlled by the same entity in the private equity structure or ICC.

To demonstrate the application of the proposed Rule 2-01(f)(4)(i) to portfolio companies, consider the situation where the accountant is serving as the auditor for Portfolio Company C, which is controlled by Unregistered Fund D. Even though Portfolio Company C is controlled by an entity within proposed Rule 2-01(f)(14) (discussed further below), Portfolio Company C's auditor would still look to proposed Rule 2-01(f)(4)(i)(A) through (D) and not proposed paragraph (f)(14) to determine which entities are affiliates of Portfolio Company C. That is because the portfolio company is the entity under audit and, as such, it does not fall within the definition of ICC set forth in proposed Rule 2-01(f)(14).

Based on the SEC staff's consultation experience, audit firms providing services to or having relationships with sister entities not material to the controlling entity do not typically present issues with respect to the audit firm's objectivity or impartiality. As such, we believe it is appropriate to exclude sister entities that are not material to the controlling entity from being considered affiliates of the audit client because an auditor's relationships and services with such entities do not typically pose a threat to the auditor's objectivity and impartiality.

We recognize that adding an evaluation of materiality as proposed may result in additional work to be done by audit firms with ongoing monitoring responsibilities for the purposes of compliance with the independence rules. However, the affiliate of the audit client definition already has a materiality evaluation, which is familiar to auditors and their audit clients. In particular, materiality is applied currently in the existing affiliate of the audit client definition in Rule 2-01(f)(4)(ii) and (iii). 19 Also, a materiality evaluation as it relates to sister entities is consistent, in part, with the definition of “affiliate” used by the American Institute of Certified Public Accountants (“AICPA”) in its ethics and independence rules, which are the independence rules typically applied when domestic companies are not subject to SEC and Public Company Accounting Oversight Board (“PCAOB”) independence requirements. 20 Auditors therefore have experience in applying a materiality standard when identifying affiliates, whether applying the independence rules of the SEC or AICPA.

We note that a determination under the proposed amendments that sister entities are not material to the controlling entity, by itself, does not conclude the independence analysis under Rule 2-01. This is because, as explained above, auditors and audit clients must consider “all relevant facts and circumstances” when assessing independence pursuant to the general standard in Rule 2-01(b).

We believe focusing on sister entities that are material to the controlling entity would relieve some of the compliance burden associated with making independence determinations, as there should be fewer entities considered affiliates. For the relationships and services that might nevertheless impact the auditor's independence under the general standard in Rule 2-01(b), we would expect those relationships and services individually or in the aggregate would be easily known by the auditor and the audit client because such services and relationships are most likely to threaten an auditor's objectivity and impartiality due to the nature, extent, relative importance or other aspects of the service or relationship. We also believe the proposed amendments could increase choice and competition for audit and non-audit services.

1. Should we add the materiality requirement, as proposed, so that only sister entities that are material to the controlling entity are deemed to be an affiliate of the audit client? Alternatively, should we retain the current common control provision in the affiliate of the audit client definition?

2. Does the proposed amendment sufficiently focus the common control prong of the definition of affiliate of the audit client on those relationships and services that are most likely to threaten auditor objectivity and impartiality? Should we focus on the materiality of sister entities to the controlling entity, as proposed? If not, are there other amendments that would better focus on relationships and services that are more likely to threaten auditor objectivity and impartiality? For example, should we focus on whether sister entities are material to the entity under audit, in addition to whether they are material to the controlling entity? Should we consider aggregating sister entities in the materiality assessment rather than the assessment being done on an individual basis? Or is aggregation of multiple sister entities sufficiently covered by the general standard under Rule 2-01(b)?

3. Would auditors and audit clients face challenges in applying the materiality concept in this context? Would auditors face particular challenges assessing materiality in connection with private portfolio companies? If so, what are those challenges and how could they be addressed?

4. Would focusing only on sister entities that are material to the controlling entity increase the risk that auditors will be performing audits when they are not objective and impartial? If so, is the overarching consideration of all relevant facts and circumstances, as required by Rule 2-01(b), sufficient to mitigate this risk? Would focusing on sister entities that are material to the controlling entity increase the risk of appearance issues?

5. Are there other types of affiliates that should be excluded from the definition because the services and relationships with such entities rarely threaten an auditor's objectivity and impartiality?

We are also proposing to clarify that with respect to an entity under audit that is an investment company or an investment adviser or sponsor, the auditor and the audit client should look solely to proposed Rule 2-01(f)(14) ( i.e., the ICC definition) to identify affiliates of the audit client. 21 The proposed amendments would explicitly direct auditors of an investment company or an investment adviser or sponsor to include all entities within the proposed ICC definition as affiliates of the audit client instead of conducting an analysis based on the prongs in proposed Rule 2-01(f)(4)(i). As such, we are proposing amendments to the ICC definition in Rule 2-01(f)(14) to focus the definition from the perspective of the entity under audit and align certain portions of the ICC definition with the amendments discussed in the preceding section.

Consistent with the discussion in the preceding section, while the proposed amendments to the ICC definition may alter the composition of entities that are deemed affiliates of the audit client principally due to materiality being added for sister entities, the overarching general standard in Rule 2-01(b) continues to apply.

We propose to clarify that auditors of investment companies, including unregistered funds, 22 or investment advisers or sponsors must assess whether other entities are affiliates of the audit client by focusing solely on proposed Rule 2-01(f)(14).

Unlike the current ICC definition, the proposed amendments would reference the entity under audit in proposed paragraph (f)(14)(i)(A) as the starting point for the analysis of which entities are to be considered part of an ICC. As a result, when the entity under audit is an investment company, an investment adviser or a sponsor, the auditor would focus solely on proposed Rule 2-01(f)(14) to determine what other entities are part of the ICC and, therefore, affiliates of the audit client. We also are proposing to include within the meaning of the term investment company, for the purposes of the ICC definition, entities “that would be an investment company but for the exclusions provided by section 3(c) of the Investment Company Act.”  23 As such, proposed paragraph (f)(14)(iv) would cover registered investment companies, business development companies, and entities that would be investment companies but for the exclusions provided by section 3(c) of the Investment Company Act, such as private funds that rely on section 3(c)(1) or 3(c)(7). If an auditor is auditing only these entities, it would look solely to proposed Rule 2-01(f)(14) to determine which entities are affiliates of the audit client. This would more effectively focus the independence analysis for unregistered funds under audit and align with the analysis to be undertaken for registered investment companies.

If an auditor audits both a portfolio company and an investment company or an investment adviser or sponsor, then the auditor would have to apply both proposed Rules 2-01(f)(4)(i) and (f)(14) to identify the entities that are affiliates of the audit client and where it would need to monitor for prohibited relationships and services. To demonstrate this using the example from the preceding section, where the accountant is serving as the auditor of both Unregistered Fund D and Portfolio Company C, which is controlled by Unregistered Fund D, the auditor would apply both proposed Rules 2-01(f)(4)(i) and (f)(14) in connection with its independence analysis. Specifically, the auditor of Portfolio Company C would conduct its analysis under proposed Rule 2-01(f)(4)(i), while the same auditor, with respect to its audit of Unregistered Fund D, would conduct its analysis under proposed Rule 2-01(f)(14) to determine the affiliate status of entities within the same ICC as Unregistered Fund D. However, if an auditor audits only an investment company or investment adviser or sponsor, as defined by proposed Rule 2-01(f)(14), then it would look solely to proposed Rule 2-01(f)(14) to determine the affiliates it would have to monitor for prohibited relationships and services.

6. Should the proposed ICC definition specifically reference the entity under audit and explicitly define investment companies, for the purpose of proposed paragraph (f)(14), to include unregistered funds, as proposed?

7. Is it appropriate to direct auditors of an investment adviser, sponsor, or investment company to the investment company complex definition, as we propose to amend it, to determine the entities that will be considered affiliates of the audit client? Why or why not? Would that lead to more consistent independence analyses by auditors of these entities?

Under the current ICC definition, any entity under common control with an investment adviser or sponsor of an investment company  24 audit client that is also an investment adviser or sponsor (“sister investment adviser or sponsor”) is considered part of the ICC, and thereby an affiliate of the audit client. 25 Additionally, the current ICC definition includes not just the investment companies that share an investment adviser or sponsor with an investment company audit client, it also includes any investment company advised by a sister investment adviser or has a sister sponsor. 26

To demonstrate the application of the current definition of ICC, consider the following example: An investment company, Investment Company A, is the entity under audit. Investment Company A is advised by Investment Adviser B. Investment Adviser B is under common control with Investment Adviser C and Investment Adviser D. Under current Rule 2-01(f)(14)(i)(B)( 1 ), Investment Adviser C and Investment Adviser D are considered sister investment advisers and, therefore, are affiliates of the audit client Investment Company A. Moreover, every investment company advised by Investment Adviser C and Investment Adviser D falls within the definition of ICC and, therefore, is also an affiliate of the audit client Investment Company A because of the application of current Rule 2-01(f)(14)(i)(C). In this instance, the auditor could not have any prohibited services or relationships with any of the sister investment advisers or any of the investment companies they advise.

We are proposing to align the common control prong of the proposed ICC definition (proposed Rule 2-01(f)(14)(i)(D)) with the proposed common control prong for operating companies (proposed Rule 2-01(f)(4)(i)(B)), for the same reasons we discuss in Section II.A.1.a. As a result, proposed paragraph (f)(14)(i)(D)( 1 ) of the ICC definition includes only sister investment companies, advisers, and sponsors that are material to the controlling entity. If the sister investment company, adviser, or sponsor is not material to the controlling entity, the general standard under Rule 2-01(b) would still apply, as discussed above.

Under the current ICC definition, an investment company seeking an auditor to audit its financial statements is precluded from considering any accountant with services or relationships prohibited by Rule 2-01(c) with sister investment advisers, sponsors, or any of the investment companies they advise or sponsor. As such, an investment company's choices among qualified auditors may be limited. The inclusion of a materiality qualifier in proposed paragraph (f)(14)(i)(D)( 1 ) may broaden the pool of prospective accountants the potential investment company audit client can evaluate and consider to engage as its auditor while being unlikely to increase the potential threat to an auditor's objectivity and impartiality. Proposed paragraph (f)(14)(i)(D) is not meant to change the population of controlling entities an auditor should consider when assessing common control under the current Rule 2-01(f)(14)(i)(B), but rather to be consistent with the common control provision in proposed Rule 2-01(f)(4)(i)(B), with the primary change being the inclusion of a materiality qualifier. Because of the changes to the ICC definition discussed in the preceding section, which direct auditors and the audit client to look solely to proposed Rule 2-01(f)(14) to identify affiliates of the audit client with respect to an entity under audit that is an investment company or an investment adviser or sponsor, the proposed amendment discussed in this section simply aligns with the change in proposed Rule 2-01(f)(4)(i)(B).

Additionally, current Rule 2-01(f)(14)(i)(B) does not include investment companies whereas proposed paragraph (f)(14)(i)(D)( 1 ) does include investment companies in the assessment of sister entities. We are introducing the reference to investment companies in the proposed ICC common control provision because, under current Rule 2-01(f)(14)(i)(C), any investment company advised or sponsored by a sister investment adviser is already included as an affiliate, regardless of materiality. With the addition of the materiality requirement in proposed paragraph (f)(14)(i)(D)( 1 ), we did not want to exclude investment companies that are material to the controlling entity from the ICC when such investment companies' investment advisers or sponsors are not material to the controlling entity. This is intended to ensure that a controlling entity's investment directly in an investment company is considered in the affiliate analysis in the event that the adviser to that investment company is deemed not material to the controlling entity. We do not believe that this would expand the scope of entities determined to be affiliates based on the current application of Rule 2-01(f)(14)(i)(B) and (C).

Furthermore, we proposed to add a reference to proposed paragraph (f)(14)(i)(C) within proposed paragraph (f)(14)(i)(D) to align with the concept of parent and subsidiaries found in proposed paragraph (f)(4)(i)(B). This is intended to ensure that entities downstream and upstream to the entity under audit are considered in the analysis for common control.

8. Should we include a materiality qualifier in Rule 2-01(f)(14)(i)(D), as proposed, so that only sister investment companies or investment advisers or sponsors that are material to the controlling entity are included in the proposed definition of ICC and, as a result, are deemed to be an affiliate of the audit client? Should we focus on whether sister investment companies, advisers, or sponsors are material to the investment company, adviser, or sponsor under audit, in addition to whether they are material to the controlling entity? Should we consider aggregating sister entities in the materiality assessment rather than the assessment being done on an individual basis? Or is aggregation of multiple sister entities sufficiently covered by the general standard under Rule 2-01(b)?

9. Does the proposed amendment sufficiently focus the common control prong of the ICC definition on those relationships and services that are most likely to threaten auditor objectivity and impartiality? Should the analysis focus on the materiality of sister entities to the controlling entity, as proposed?

10. Would auditors and audit clients face challenges in applying the materiality concept in this context? Would auditors face particular challenges assessing materiality in connection with unregistered funds? If so, what are the challenges and how could they be addressed?

11. Would focusing only on sister entities that are material to the controlling entity increase the risk that auditors will be performing audits when they are not objective and impartial? If so, is the overarching consideration of all relevant facts and circumstances, as required by Rule 2-01(b), sufficient to mitigate this risk? Would focusing on sister entities that are material to the controlling entity increase the risk of appearance issues?

12. Is it appropriate for auditors to assess whether or not sister investment companies are material to the controlling entity even when a sister fund's investment adviser may not be material to the controlling entity? Should we include a reference to paragraph (f)(14)(i)(C) within paragraph (f)(14)(i)(D), as proposed?

Under current paragraph (f)(14)(i)(C) of the ICC definition, an auditor of an investment company has to monitor for prohibited services and relationships with sister investment companies that have the same investment adviser or sponsor or have an investment adviser or sponsor that is under common control, regardless of whether the sister investment companies are material to such investment adviser or sponsor. The proposed amendments would not change the analysis of sister investment companies that have an investment adviser or sponsor included within the ICC definition. This is because proposed paragraph (f)(14)(i)(F) would include within the ICC definition any investment company that has any investment adviser or sponsor that is an affiliate of the audit client pursuant to proposed paragraphs (f)(14)(i)(A) through (D).

For example, proposed paragraph (f)(14)(i)(B) includes the investment adviser or sponsor of an investment company under audit. As the language in neither proposed paragraph (f)(14)(i)(B) nor proposed paragraph (F) includes a materiality requirement, under proposed paragraph (f)(14)(i)(F), an auditor would need to consider as part of its independence analysis, sister investment companies that have the same investment adviser or sponsor as the investment company under audit, regardless of whether such sister investment companies are material to the shared investment adviser or sponsor. Consistent with current paragraph (f)(14)(i)(C), we continue to believe that the nature of the relationship between an investment adviser or sponsor and the investment companies it advises is such that once an investment adviser or sponsor is included within the proposed ICC definition, the investment companies it advises should be included as well.

13. Should paragraph (f)(14)(i)(F) be adopted as proposed? Should we instead include a materiality qualifier for sister investment companies in proposed paragraph (f)(14)(i)(F)?

As discussed above, the proposed ICC definition would clarify that when the entity under audit is an investment company or an investment adviser or sponsor, the auditor should look to the proposed ICC definition in proposed Rule 2-01(f)(14) to determine which entities are considered affiliates of the audit client. As such, we propose including in the proposed ICC definition a significant influence prong to align, in part, with the current significant influence analysis applicable to operating companies in the definition of affiliate of the audit client in Rule 2-01(f)(4)(ii) and (iii). 27 Given that “significant influence” is used in other parts of the Commission's independence rules, including within the affiliate definition, the concept of “significant influence” is one with which audit firms and their clients are already required to be familiar. 28

I. Background

Title VIII of the Civil Rights Act of 1968, as amended, (42 U.S.C. 3601 et seq. ) (the “Fair Housing Act” or “Act”) prohibits discrimination in housing and housing-related transactions based on race, color, religion, national origin, sex, disability and familial status. 1 The Act provides, inter alia, that unlawful discrimination against persons with disabilities includes the failure to design and construct covered multifamily dwellings for first occupancy after March 13, 1991, in a manner that “(1) the public and common use portions of such dwellings are readily accessible to and usable by handicapped persons; (2) all the doors designed to allow passage into and within all premises within such dwellings are sufficiently wide to allow passage by handicapped persons in wheelchairs; and (3) all premises within such dwellings contain the following features of adaptive design: (a) An accessible route into and through the dwelling; (b) light switches, electrical outlets, thermostats, and other environmental controls in accessible locations; (c) reinforcements in bathroom walls to allow later installation of grab bars; and (d) usable kitchens and bathrooms such that an individual in a wheelchair can maneuver about the space.” The Fair Housing Act does not contain specific technical design criteria that need to be followed to comply with the design and construction requirements. It does provide, however, that compliance with the appropriate requirements of the “American National Standard for buildings and facilities providing accessibility and usability for physically handicapped people (commonly referred to as ANSI A117.1), suffices to satisfy the requirements of [42 U.S.C. 3604(f)(3)(C)(iii)],” which states the Act's design and construction requirements for the interiors of covered multifamily dwellings.

On November 7, 1988 (53 FR 44992), HUD published a proposed rule to implement the design and construction provisions of the Fair Housing Act, as amended. HUD's proposed rule provided that “whenever ANSI A117.1 is used, the reference is to the most recently published edition of ANSI A117.1 as of the date bids for construction of a particular building are solicited.” Several commenters objected that an “open-ended” reference to future ANSI standards would represent an unlawful delegation of the Department's rulemaking authority. According to these commenters, HUD should refer to a specific edition of the ANSI standards and should incorporate future editions only through rulemaking. As a result of these concerns, HUD's Fair Housing Act final rule, published on January 23, 1989 (54 FR 3232), specifically stated that compliance with the appropriate requirements of ANSI A117.1-1986, the edition in effect at the time of the final rule, functions as a safe harbor and satisfies the technical requirements of the Act. HUD also stated that it would propose amending the definition of ANSI as future editions of ANSI A117.1 are published.

The Fair Housing Act directs HUD to “provide technical assistance to states and units of local government and other persons to implement [the design and construction requirements].” On March 6, 1991 (56 FR 9472), the Department published the “Final Fair Housing Accessibility Guidelines” which set forth specific technical guidance for designing covered multifamily dwellings to be consistent with the Act. Section I of the Guidelines states, “[t]hese guidelines are intended to provide a safe harbor for compliance with the accessibility requirements of the Fair Housing Act.” On June 24, 1994 (59 FR 33362), the Department published its “Supplement to Notice of Fair Housing Accessibility Guidelines: Questions and Answers about the Guidelines.” The Department published a Fair Housing Act Design Manual (Design Manual) in 1996 that was reissued in 1998 with minor changes. The Design Manual is also a safe harbor for compliance with the Act. 2

Since HUD published its Fair Housing Act final rule in 1989, the ANSI A117.1 accessibility standard has been updated several times. HUD, as a member of the A117 Committee that updates the A117.1 standard, participates in these updates. In addition, HUD, as part of its mandate to provide technical assistance to state and local governments to incorporate the design and construction requirements of the Act into their laws and procedures for review and approval of newly constructed multifamily dwellings, has periodically reviewed these updated standards. HUD published a final rule on October 24, 2008 (73 FR 63614) that incorporated by reference ICC/ANSI-2003 and clarified that compliance with the appropriate requirements of CABO/ANSI A117.1-1992 and ICC/ANSI-1998 continued to meet the design and construction requirements of the Fair Housing Act. See 24 CFR 100.201a(b)(1). As a result of HUD's 2008 final rule, HUD's current regulations specify that compliance with the appropriate requirements of ICC/ANSI A117.1-2003, ICC/ANSI A117.1-1998, CABO/ANSI A117.1-1992 and ANSI A117.1-1986 satisfy the Fair Housing Act's accessibility requirements at subsection 804(f)(3)(C)(iii) of the Act. The 2008 final rule also updated the regulations to reference certain editions of the IBC as safe harbors for compliance with the accessibility requirements in the Fair Housing Act. HUD's final rule codified these additional design and construction standards that HUD recognized as safe harbors at § 100.205(e).

This proposed rule would amend HUD's regulations with respect to the design and construction requirements of the Fair Housing Act by incorporating by reference the 2009 edition of International Code Council (ICC) Accessible and Usable Building and Facilities (ICC A117.1-2009)  3 as satisfying the design and construction requirements of the Fair Housing Act. This rule would not change either the scoping requirements or the substance of the existing accessible design and construction requirements contained in the Fair Housing Act or its regulation.

This proposed rule would also designate the 2009, 2012, 2015 and 2018 editions of the IBC as safe harbors under the Fair Housing Act. Unlike the Act, the IBC is a model building code, and not a law. It provides standards for public safety, health, and welfare as they are affected by building construction. The IBC is published by the ICC, which was formed to bring national uniformity to building codes. Representatives of three former national model code bodies joined together to develop what are now called the International Codes, or I-Codes. The IBC is a major volume of the I-Codes and contains provisions for accessibility designed to reflect the intent of the Act, the regulations, and the Guidelines. Compliance with the IBC or another model building code is not required unless mandated by a state or local jurisdiction. A jurisdiction may adopt a model building code in its entirety or with modifications.

With respect to housing, the IBC contains requirements for three different types of accessible units, which include sleeping units (when such units are used as a residence). The most accessible of these three types is an “Accessible Unit,” which is wheelchair accessible and may be found in numerous types of residential buildings. A second level of accessibility is set forth in the requirements for “Type A” dwelling units. The IBC specifies that a percentage of “Type A” units must be provided containing a high level of accessibility, especially in kitchens and bathrooms, as well as some features of adaptability. The third level of accessibility is a “Type B” dwelling unit, which is a unit that is intended to comply with those features of accessible and adaptable design required under the Act. Like the Act, the requirements for Type B dwelling units apply to a greater number of dwelling units in a building, but the level of accessibility is less than that of the Type A dwelling units.

In addition, the IBC provides scoping requirements for the three types of dwelling units described above. The scoping requirements for the Type B dwelling units are intended to be consistent with the scoping requirements in the Act, the regulations, and the Guidelines. For the technical requirements, the IBC references the A117.1 accessibility standard. Thus, the IBC contains both scoping requirements and technical requirements that are consistent with the Act, the regulations and the Guidelines.

HUD is also proposing to amend § 100.205(e)(3) to provide that, in the future, HUD may propose new safe harbors by Federal Register notice. HUD would provide a minimum of 30 days public comment period and, after considering public comment, publish a final notice announcing any new safe harbor. HUD will periodically codify new safe harbors in part 100 in the course of later rulemaking. HUD proposes to provide that compliance with safe harbors established by Federal Register notice will satisfy the requirements of paragraphs (a) and (c) of § 100.205.

In 2013 and 2015, and most recently in 2018, representatives of the multifamily housing industry contacted the Department to request that HUD review the accessibility requirements contained in the 2009, 2012, 2015 and 2018 editions of the IBC to make a determination as to whether these editions would be deemed safe harbors for compliance with the Act's design and construction requirements. These organizations also made this request with respect to ICC A117.1-2009, Accessible and Usable Buildings and Facilities. Based on assistance provided specifically by ICC in the past, the Department requested, and ICC provided, a side-by-side matrix comparing the relevant 2006 provisions of the IBC, which HUD had previously reviewed and declared as a safe harbor, with the 2009, 2012, 2015 and 2018 provisions in the IBC and related code documents. ICC also provided copies of the 2009, 2012, 2015 and 2018 IBC, related Code Commentary, and other relevant code documents. In addition, ICC provided a similar matrix for ICC/ANSI A117.1-2003 and ICC A117.1-2009, along with copies of ICC A117.1-2009 and related documents.

In conducting its review of these documents, the Department carefully reviewed the matrices provided by ICC, as well as the code documents and the accessibility standards. The Department determined that the accessibility provisions in the IBC and the ICC A117.1 standard provide at least the same level of accessibility as that required by the Act, HUD's implementing regulations, and the Guidelines.

The Department also notes that following its earlier reviews of the model building codes, the Department worked with representatives from the building industry, code organizations and advocacy groups to develop code text for certain editions of the IBC and participated in public hearings to aid in the passage of these code text changes. The Department is also a voting member of the A117 Committee, which is the Committee that reviews and makes changes to the A117.1 accessibility standard, and in this role, the Department has been actively involved in updating all editions of the A117.1 standard that have followed the 1986 edition.

Having reviewed the 2009, 2012, 2015 and 2018 editions of the IBC, the Department finds that the accessibility provisions in these editions of the IBC are consistent with the requirements in the Act, HUD's regulations and the Guidelines. The Department did not find any provision that it believes provides for less accessibility than what is required in the Act, the regulations and the Guidelines, and the Department notes that in certain respects, the IBC provides for greater accessibility. Similarly, in its review of the ICC A117.1-2009, the Department did not find any provisions that provide for less accessibility than what is required in the Act, HUD's regulations and the Guidelines. However, the Department welcomes comments concerning provisions that may provide for less accessibility than what is required in the Act, HUD's regulations and the Guidelines.

This proposed rule would amend § 100.205(e) to add ICC A117.1-2009, and the 2009, 2012, 2015 and 2018 versions of the IBC to HUD's current list of safe harbors for compliance with the design and construction requirements of the Fair Housing Act.

The Department reiterates its policy with respect to safe harbors. A covered multifamily building will be deemed compliant with the Act's design and construction requirements if the State or locality where the building is located has adopted one of HUD's safe harbors without modification of the provisions that address the Act's design and construction requirements, provided: (1) The building is designed and constructed in accordance with plans and specifications approved during the building permitting process, and (2) the building code official does not waive, incorrectly interpret, or misapply one or more of those requirements. The fact that a jurisdiction has adopted a code that conforms to the accessibility requirements of the Fair Housing Act or that construction of a building subject to the Act was approved under such a code, however, does not alter HUD's statutory responsibility to conduct an investigation, following receipt of a complaint from an aggrieved person, to determine whether the requirements of the Fair Housing Act have been met and to issue a charge of discrimination if warranted. Similarly, neither fact precludes the Department of Justice from investigating whether violations of the Act's design and construction provisions may have occurred and filing a lawsuit in federal court to enforcement compliance with the Act where appropriate. The Fair Housing Act provides that, “[d]eterminations by a State or unit of general local government under [the Act] shall not be conclusive in enforcement proceedings under this title.” 42 U.S.C. 3604(f)(6)(a).

HUD's investigation of a complaint under the Fair Housing Act's design and construction requirements typically involves, inter alia, a review of building permits, certificates of occupancy, and construction documents showing the design of the buildings and the site, and an on-site survey of the buildings and property. During the investigation, HUD investigators take measurements of relevant interior and exterior elements of the property. All parties to the complaint have an opportunity to present evidence concerning, inter alia, whether HUD has jurisdiction over the complaint, and whether the Act has been violated as alleged. In enforcing the design and construction requirements of the Act, a prima facie case may be established by proving that the covered multifamily dwellings were not designed and constructed in accordance with HUD's Fair Housing Accessibility Guidelines. This prima facie case may be rebutted by evidence demonstrating compliance with a recognized, comparable, objective measure of accessibility. See Order on Secretarial Review, U.S. Dept. of Housing and Urban Development v. Nelson, HUD ALJ 05-068FH, 2006 HUD ALJ LEXIS 56, *14 (Sept. 21, 2006) (2006 WL 4540542), aff'd, Nelson v. HUD, 320 Fed. Appx. 635, 2009 US App. LEXIS 6142, *4-5 (9th Cir. Mar. 26, 2009). In making a determination as to whether the design and construction requirements of the Act have been violated, HUD uses the Act, the regulations, and the Guidelines, all of which reference the technical standards found in ANSI A117.1-1986.

The standards and codes adopted by HUD as safe harbors represent safe harbors only when used in their entirety; that is, once a specific safe harbor document has been selected, the covered multifamily dwellings in question should comply with all of the provisions in that document that address the Act's design and construction requirements. The benefit of safe harbor status may be lost if, for example, a designer or builder chooses to select provisions from more than one of the above safe harbor documents or from a variety of sources. In addition, the benefit of safe harbor status will be lost if waivers of accessibility provisions are requested and/or obtained from state or local governmental agencies. HUD's purpose in recognizing a number of safe harbors for compliance with the Act's design and construction requirements is to provide a range of options that, if followed in their entirety during the design and construction phase without modification or waiver, will result in residential buildings that comply with the Act's design and construction requirements.

As part of its review of the various editions of the IBC, the Department also reviewed the related IBC Commentary to determine whether certain commentary that the Department drafted for inclusion in the IBC Commentary continues to appear in the IBC Commentary from one edition to the next. The Department reviewed the IBC Commentary only in this respect and did not review the Commentary with respect to other sections of Chapter 11 of the IBC or to commentary not drafted by the Department. Therefore, the Department's review of the code commentary applies only to the code commentary the Department previously provided to ICC. The commentary which the Department previously provided to ICC is commentary that relates to Exception 1 under Section 1107.4 of the IBC, which addresses requirements for an Accessible Route. This commentary is intended to ensure that the IBC's Accessible Route requirements do not provide for less accessibility than the Act's Accessible Route requirements. The Department reviewed the IBC Commentary for the 2009, 2012, 2015 and 2018 editions of the IBC and notes that this commentary is included and remains unchanged. For a detailed discussion of this commentary, see 72 FR 39432 (July 18, 2007).

Before HUD issues a final rule, the referenced standard proposed for incorporation must be approved by the Director of the Federal Register , in accordance with 5 U.S.C. 552(a) and 1 CFR part 51. This rulemaking proposes to incorporate the voluntary consensus standard ICC A117.1-2009 Accessible and Usable Building and Facilities, as satisfying the design and construction requirements of the Fair Housing Act. It would not incorporate interpretations of ICC A117.1-2009 issued by the ICC or any other entity or person. The rulemaking also cannot account for editions of ICC A117.1 issued after the 2009 edition. Therefore, if HUD wishes to revise the standard in the future to codify newer editions of ICC A117.1, further rulemaking would be required.

ICC A117.1-2009 is available online for review during this rule's comment period, via read-only access, at https://codes.iccsafe.org/content/ICCA117_12009?site_type=public. Members of the public may visit the link and create a username and password to view the free-access edition. The standard may also be obtained from the International Code Council, 500 New Jersey Avenue NW, 6th Floor, Washington, DC 20001-2070, telephone number 1-888-422-7233, http://www.iccsafe.org/e/category.html.

The Regulatory Flexibility Act (RFA) (5 U.S.C. 601 et seq. ) generally requires an agency to conduct a regulatory flexibility analysis on any rule subject to notice and comment rulemaking requirements, unless the agency certifies that the rule will not have a significant economic impact on a substantial number of small entities. Small entities include small businesses, small not-for-profit organizations, and small governmental jurisdictions.

The purpose of this proposed rule is to update a codified regulation that provides technical standards for the design of covered multifamily dwellings to ensure accessibility for persons with disabilities as required by the Fair Housing Act. Specifically, the rule would incorporate by reference the 2009 edition of ICC A117.1 as a safe harbor, compliance with which would satisfy the requirements of the Fair Housing Act. The proposed rule also retains as safe harbors the 1986, 1992, 1998 and 2003 editions of ANSI A117.1, as well as the 2000, 2003 and 2006 IBC, which HUD has previously adopted. In addition, the rule would add the 2009, 2012, 2015 and 2018 versions of the IBC as safe harbors. Consequently, small entities would not incur a significant economic impact as they may continue to use any of the previously codified standards. Additionally, adopting the 2009 ICC A117.1 and the other new safe harbors may alleviate a significant economic impact for small entities, as those entities may find compliance with these standards to be less burdensome because their state or local building codes may use these later editions of the A117.1 standard or the IBC. Therefore, the undersigned certifies that this proposed rule will not have a significant economic impact on a substantial number of small entities.

Notwithstanding HUD's determination that this rule will not have a significant economic effect on a substantial number of small entities, HUD specifically invites comments regarding any less burdensome alternatives to this rule that will meet HUD's objectives as described in this preamble.

Executive Order 13132 (entitled “Federalism”) prohibits, to the extent practicable and permitted by law, an agency from promulgating a regulation that has federalism implications and either imposes substantial direct compliance costs on state and local governments and is not required by statute, or preempts state law, unless the relevant requirements of section 6 of the Executive Order are met. This rule does not have federalism implications and does not impose substantial direct compliance costs on state and local governments or preempt state law within the meaning of the Executive Order.

This proposed rule is a policy document that sets out fair housing and nondiscrimination standards. Accordingly, under 24 CFR 50.19(c)(3), this proposed rule is categorically excluded from environmental review under the National Environmental Policy Act of 1969 (42 U.S.C. 4321 et seq. ).

Title II of the Unfunded Mandates Reform Act (UMRA) of 1995 (2 U.S.C. 1531-1538) requires federal agencies to assess the effects of their regulatory actions on state, local, and tribal governments, and on the private sector. This rule does not impose, within the meaning of the UMRA, any federal mandates on any state, local, or tribal governments, or on the private sector.

The Catalog of Federal Domestic Assistance number for this program is 14.400.

For the reasons stated in the preamble, HUD proposes to amend 24 CFR part 100 as follows:

In the final rules section of this Federal Register , the EPA is accepting the State's 111(d)/129 negative declarations and amending 40 CFR part 62, subpart GG, as a direct final rule without prior proposal because the Agency views this as a noncontroversial submittal and anticipates no adverse comments. A detailed rationale for the EPA's action is set forth in the direct final rule. If no relevant adverse comments are received in response to this action, no further activity is contemplated. If the EPA receives relevant adverse comments, the direct final rule will be withdrawn and all public comments received will be addressed in a subsequent final rule based on this proposed rule. The EPA will not institute a second comment period. Any parties interested in commenting on this action should do so at this time.

For additional information, see the direct final rule which is located in the rules section of this Federal Register.

This is a summary of the Commission's Notice of Proposed Rulemaking (NPRM) in WC Docket No. 18-336, adopted on December 12, 2019 and released on December 16, 2019. The full text of the document is available at https://docs.fcc.gov/public/attachments/FCC-19-128A1.pdf. The full text is also available for public inspection during regular business hours in the FCC Reference Information Center, Portals II, 445 12th Street SW, Room CY-A257, Washington, DC 20554. To request materials in accessible formats for people with disabilities ( e.g. , braille, large print, electronic files, audio format, etc.) or to request reasonable accommodations ( e.g. , accessible format documents, sign language interpreters, CART, etc.), send an email to fcc504@fcc.gov or call the Consumer & Governmental Affairs Bureau at (202) 418-0530 (voice) or (202) 418-0432 (TTY).

1. In this Notice of Proposed Rulemaking (NPRM), we propose to designate a 3-digit dialing code for a national suicide prevention and mental health crisis hotline, and we further propose to designate 988 as that code. We expect that designating 988 as the 3-digit dialing code will help increase the effectiveness of suicide prevention efforts, ease access to crisis services, reduce the stigma surrounding suicide and mental health conditions, and ultimately save lives.

2. We anticipate that designating 988 will support the efforts of our federal partners, SAMHSA and the VA, in their vitally important work in administering the Lifeline and the Veterans Crisis Line. To this end, we encourage interested stakeholders to work directly with SAMHSA, the VA, and Congress to foster collaboration and coordination of efforts to increase the overall effectiveness of the Lifeline, including any specialized hotline services for at-risk populations such as Veterans and LGBTQ youth.

3. We first propose to designate a 3-digit dialing code for a national suicide prevention and mental health crisis hotline. Based on the findings in the SAMHSA and VA Reports, we anticipate that the Lifeline would be more effective in preventing suicides and providing crisis intervention if it were accessible via a simple, easy-to-remember, 3-digit dialing code. For example, as SAMHSA explains, “[i]f a family member experiences severe chest pains in the company of another family member, both the patient and the family member, despite their heightened anxiety, would remember the number 911, while the concern is that many suicidal people or their family members at a similar moment of suicidal crisis might not remember 1-800-273-8255 (TALK).” And as Lines for Life has explained, “3-digit access” would “make it easier to connect people in need with help” and “deliver timely and effective crisis intervention services to millions of Americans.”

4. The record compiled for the FCC Staff Report supports the use of a dedicated 3-digit dialing code as a way to increase the effectiveness of suicide prevention efforts, ease access to crisis services, and reduce the stigma surrounding suicide and mental health conditions. Thus, we expect that designating a 3-digit code will ultimately increase the convenience and immediacy of access to a national suicide prevention and mental health crisis hotline system, help enhance public awareness of available suicide prevention and mental health crisis services, and support our federal partners by simplifying such access. We seek comment on this proposal.

5. We next propose to designate 988 as the 3-digit dialing code for a national suicide prevention and mental health crisis hotline system, and to require that all telecommunications carriers and interconnected VoIP providers transmit all calls initiated by an end user dialing 988 to the current toll free access number for the National Suicide Prevention Lifeline. We seek comment on this proposal. Additionally, how, if at all, should our proposal account for the fact that Americans, particularly younger Americans, increasingly rely on texting to communicate?

6. Designating 988 appears to provide the fastest, and therefore best, path to implementing a 3-digit code. First, using a unique 3-digit code obviates the need to age an existing N11 code and should therefore reduce the overall implementation timeline, allowing the Commission to bring this important national resource to the public years earlier than alternatives. Second, consumer education campaigns for a unique 3-digit code would be simpler and likely more effective than those necessary for repurposing or expanding use of an existing N11 code. Third, using a wholly unique 3-digit code would be less disruptive to existing users and service providers. In particular, several of the existing N11 codes discussed in the record are in heavy use and to expand or repurpose any one of these N11 codes would require significant work and resources. Fourth, using 988 is less technically complicated than using other unique 3-digit dialing codes. 988 “is not currently assigned as a geographic area code and therefore does not suffer the same problems surrounding repurposing an existing area code. Moreover, in order for a switch to detect a new 3-digit code, it helps if the code is not comprised of the leading digits (often called the “prefix”) of a local number. A United States telephone number consists of three basic parts: a three-digit Numbering Plan Area (known as the area code) NPA, a three-digit Central Office (CO) code (NXX), and a four-digit line number. In total, it is ten digits and contains two three-digit codes and a four-digit line number ( e.g., (NPA) (NXX)-(XXXX)). And 988 has fewer corresponding central office code assignments across the U.S. than other codes the NANC considered, and thus would be less disruptive to adopt than those other codes. We seek comment on this proposal.

7. Turning to an evaluation of specific N11 options, we seek comment on the views of SAMHSA and other commenters in the record who assert that expanding 211 would reduce the quality of and overburden the current capacity of crisis or community services offered, resulting in increased hold times and delayed crisis intervention, and create confusion as to the purpose of the dialing code. We seek comment on the view, as explained in the FCC Staff Report, that repurposing 511 would endanger public safety because states and localities use 511 to enable drivers to receive information on road conditions during emergencies and information pertaining to AMBER and other public safety-related alerts. We also seek comment on whether repurposing 511 would require states and localities to remove or replace roadway signage across the country that advertises 511 as a local travel information line, which could lengthen the timeline for implementation, and risk creating public confusion. We seek comment on the view of the FCC Staff Report that repurposing 611—an N11 code that receives at least 297 million calls annually—could result in a crisis hotline being flooded with misdirected calls, creating confusion and delay, and risking loss of life if a caller in need could not reach a counselor quickly. And we seek comment on the findings in the FCC Staff Report that expanding or repurposing any of the other N11 codes—311 (used for non-emergency police services), 411 (used for directory assistance services), 711 (used by persons with hearing or speech disabilities to make or receive telephone calls), 811 (used for notice of excavation activities), and 911 (used for emergency response)—is not feasible and/or desirable. We note that repurposing 811 would require legislative changes and, more importantly, could have significant implications for pipeline safety. Using any N11 code would appear to significantly delay implementation of a 3-digit dialing code for a national suicide prevention and mental health crisis hotline because each of these N11 codes is widely used. Moreover, repurposing one of these N11 codes would eliminate the current and important purpose of the code. We seek comment on these views.

8. In proposing to designate 988, we agree with the findings in the FCC Staff Report that the technical and operational issues associated with implementing 988 can be addressed more quickly than the time needed to repurpose an existing N11 code. In particular, we find that, as telephone companies have been upgrading their networks to IP, the vast majority of switches in the U.S. can accommodate 988 and the relatively small percentage of legacy switches that cannot currently support this code can be upgraded more easily and quickly than conducting the re-education efforts necessary to repurpose an existing N11 code. We seek comment on these views and on any other challenges of designating a 3-digit dialing code for the national suicide prevention and mental health crisis hotline of (and designating 988 in particular) and ways to mitigate them. Are there alternative proposals that would allow for implementation of a three-digit dialing code on a faster or otherwise more efficient timeline?

9. Legal Authority. Section 251(e)(1) of the Act gives the Commission “exclusive jurisdiction over those portions of the North American Numbering Plan that pertain to the United States” and provides that numbers must be made “available on an equitable basis.” Pursuant to this provision, the Commission retains “authority to set policy with respect to all facets of numbering administration in the United States.” The Commission's exclusive jurisdiction over numbering policy enables the Commission to act flexibly and expeditiously on important numbering matters.

10. We believe that this authority allows us to designate 988 as the 3-digit dialing code for a national suicide and mental health crisis hotline system and to require providers of telecommunications and interconnected VoIP services to take appropriate and timely action to implement this designation. The Commission has previously concluded that its numbering authority allows it to extend numbering-related requirements to interconnected VoIP providers that use telephone numbers. As the Commission has explained, “the obligation to ensure that numbers are available on an equitable basis is reasonably understood to include not only how numbers are made available but to whom, and on what terms and conditions. Thus, we conclude that the Commission has authority under section 251(e)(1) to extend to interconnected VoIP providers both the rights and obligations associated with using telephone numbers.” We further believe that taking these steps will help to ensure that all Americans can receive efficient, swift access to, and reap the benefits of, critical suicide prevention and crisis services offered through the Lifeline. We seek comment on these views. Are there other sources of legal authority for this proposal?

11. As the FCC Staff Report recognizes, “suicide does not discriminate by geographic region, and to be effective, any code designated for a national suicide and mental health crisis hotline must be ubiquitously deployed.” To that end, we propose requiring that all telecommunications carriers and interconnected VoIP providers implement 988 by transmitting all calls initiated by an end user dialing 988 to the current toll free access number for the Lifeline. We specifically seek comment on including one-way interconnected VoIP providers as well. Our proposed requirement would thus apply to those providers that access the public switched telephone network on an interconnected basis to reach all Americans. We seek comment on our proposal. Should we apply the requirements we adopt to a different set of entities and, if so, what set of entities and why?

12. Software and Equipment Updates. We recognize that in order to implement 988, telecommunications carriers and interconnected VoIP providers must make changes to their networks and institute new dialing requirements in certain circumstances. In particular, we recognize that certain legacy switches will require upgrades. The NANC has identified seven switch types that cannot support a new wholly unique 3-digit dialing code. Based on the legacy switch types identified by the NANC, Commission staff estimate that a little over 6,000 switches and remotes, or approximately 12% of the 50,615 switches and remotes listed in the April 2019 edition of the Local Exchange Routing Guide (LERG), cannot currently support 988 and would need to be upgraded. Of those, about 4,750 switches are DMS-10, EWSD, and DCO ( e.g., Nortel and Siemens) switch types. Some of these may have a direct upgrade path to IP, which we expect would enable use of 988 as a 3-digit dialing code at a relatively low cost per switch upgrade. However, approximately 1,400 switches may not have a clear upgrade path, necessitating that they be replaced. We seek comment on these estimates.

13. Depending on the type of switch currently used, implementation of 988 may require that providers take a number of steps to update their networks, which may include: Acquiring and installing new equipment; developing and testing software to implement 988; assigning 988 in the switch translations dialing plan to prevent other uses for that code; ensuring that switch routing elements correctly route 988; training staff; and deploying new software, such as adding logic to internal automated systems to implement any updates. After upgrading and replacing switches, vendors will then need to perform network translation changes and monitor network operations. We seek comment on these and any other implementation steps. Are there trunking and/or network capacity requirements that carriers and providers would need to address in order to carry the expected increase in suicide hotline calls? Are there other implementation steps that will be necessary? We also ask commenters, particularly service providers, to provide information on the most expeditious and effective path toward achieving ubiquitous deployment of 988 across all networks.

14. 988 Call Routing. We propose requiring telecommunications carriers and interconnected VoIP providers to route 988 calls to 1-800-273-8255 (TALK), the current toll free access number for the Lifeline and the Veterans Crisis Line. Doing so appears to provide the most efficient means to establish 988 as a national suicide prevention hotline. We seek comment on this proposal.

15. Whether to route calls to a central destination or to localized call centers will affect the 988 implementation timeline and cost. Because it offers a streamlined approach using existing infrastructure, we believe our proposal is likely to be faster and more cost effective than the alternatives of either setting up a new routing database or entering local translations, as is used for 911 calls, which are routed via a direct local translation to a 10-digit number of a local police station or Public Safety Answering Point (PSAP) based on the location of the calling number. The NANC concluded that, for service providers, routing calls is likely to be “more efficient if the call is terminated to a national or centralized call center as opposed to a local or decentralized call center network.” The toll free access number for the Lifeline, 1-800-273-8255 (TALK), is a national call center that currently serves to route calls to local crisis centers across the country. We expect that routing calls to 1-800-273-8255 (TALK) will be more efficient than establishing a new call center to perform the same functions, or requiring direct local translations for each local crisis center. We seek comment on this analysis.

16. Further, service provider routing of 988 calls to 1-800-273-8255 (TALK), rather than localized call centers, may facilitate access to the Lifeline and the Veterans Crisis Line by reducing the likelihood that calls will be misdirected following any changes to the local crisis center network. If the Lifeline were to add new call centers or consolidate existing call centers, for example, routing changes could be implemented by updating the centralized 800 translations service and thereby avoid having to reprogram local switches, which if done improperly, could result in misdirected calls. We seek comment on this view, on other benefits of this call routing proposal, and on the impact this proposal would have on the effectiveness of the Lifeline and Veterans Crisis Line once 988 is implemented. For example, would it impact the ability of the Lifeline to route calls to the closest local crisis center, as the Lifeline does currently? Would our proposal affect the operations of the Veterans Crisis Line? Are there other models that would provide better functionality to users of the hotline? We also seek comment on whether SAMHSA or the VA and/or the existing national network of crisis centers that currently comprise the Lifeline and the Veterans Crisis Line will need to make changes to accommodate this proposal, and the length of time and costs that such changes will entail.

17. We seek comment on any drawbacks or costs associated with this proposal. TGM Consulting, for example, cautions that some TDM switches may only be able to translate a code like 988 into a local or geographic number. Is this accurate and, if so, how many such switches are in use today and what would be required to upgrade them? Should we carve out an exemption for such switches and require them instead to route 988 calls to a geographic number? Are there other solutions that would allow these switches to direct 988 calls to 1-800-273-8255 (TALK)? We seek comment on any other issues related to this proposed call routing approach.

18. In the alternative, we seek comment on requiring service providers to route 988 calls directly to a local Lifeline or Veterans Crisis Line call center rather than to 1-800-273-8255 (TALK). In seeking comment on this alternative approach, we note that 1-800-273-8255 (TALK) currently provides access to both the Lifeline and the Veterans Crisis Line. How would this functionality be maintained under a direct routing approach? Would the Lifeline still be able to route calls to a backup center, as is currently done if a local crisis center experiences a service disruption or excessive call volume? How, if at all, would this alternative approach affect access to the Lifeline and Veterans Crisis Line? In this scenario, would routing databases need to be created to route 988 calls to such numbers? If so, what would such databases offer and who would own, maintain, and distribute such databases? How would this impact our proposed timeline and costs for implementation? What are the challenges in routing 988 calls directly to a local or regional crisis center as opposed to a single toll free number? Would such an approach offer any benefits over our proposal? We seek comment on these and any other relevant issues.

19. Dialing in Certain Geographic Areas. We next seek comment on how to address areas that both use 7-digit dialing and where 988 is in use as an NXX code. In such areas, a switch would need to distinguish between calls made to the suicide prevention and mental health crisis hotline and the assigned 988 central office code. Commission staff analysis of NANPA data shows that as of September 2019, there are 95 area codes that both still use 7-digit dialing and have assigned 988 as an NXX prefix. The number 95 is arrived at by looking at how many NPAs use 988 (a total of 178) and then seeing which of those are located in a 7-digit dialing area code. We seek comment on whether this is an accurate estimate of area codes that would need to implement a solution.

20. One solution is the introduction of a dialing delay after 988 is entered—the switch would recognize that the caller is dialing 988 rather than a local 988-XXXX number when no digits are entered after 988. The downside with such an approach, as the NANC has noted, is that such a dialing delay “could result in the caller terminating the call because he thinks the call failed, or [result in] unrelated calls being routed to the hotline when a 7-digit number is dialed too slowly.” We seek comment on this and any other potential concerns with this approach.

21. Alternatively, requiring 10-digit dialing would enable the switches to distinguish between calls made to the national suicide prevention hotline system and those made to a number beginning with a 988 prefix. With 10-digit dialing, a caller must first input the 3-digit area code before entering a 7-digit number. Thus, an individual attempting to call a 988-XXXX number would first have to input the area code ( i.e., XXX-988-XXXX), avoiding the problem of calling the hotline in error.

22. We seek comment on whether the Commission should mandate one particular solution as part of our designation and implementation of 988. The Commission has mandated 10-digit dialing in cases of area-code relief, which involves establishing a new area code for a geographic region after the existing area code runs out of NXX prefixes. And any transition to 10-digit dialing could likely be achieved in parallel within the other work to implement 988 and that the transition, based on previous conversions from 7 to 10-digit dialing, can be completed within a year. Indeed, in the last decade, states such as Connecticut and Nebraska moved to mandatory 10-digit dialing within a period of one year. Should we require states to transition to 10-digit dialing in areas where the 988 exchange has been assigned as an NXX prefix in area codes that still have 7-digit dialing, as the Commission has done for area-code-relief implementation? Alternatively, should we leave it to state commissions to decide whether to mandate 10-digit dialing rather than a dialing delay for any given area code?

23. Timeframe. We propose that all telecommunications carriers and interconnected VoIP providers be required to implement 988 in their networks within 18 months. We believe this timeframe would provide sufficient time for providers to make any necessary changes to equipment and software, and to institute new dialing requirements, if necessary. To begin with, we understand that modern IP switches can already accommodate 988 today or do so with minor software updates. In this regard, we observe that most providers are already actively upgrading their equipment to IP technology given the technological advances in the marketplace and the advanced services that consumers are demanding. Moreover, we believe that 18 months is sufficient time to upgrade the approximately 12% of legacy switches that will need such upgrades and we anticipate that the majority of technical upgrades necessary to switches and systems can be done in parallel with other work to implement 988. We seek comment on this proposal.

24. Alternatively, should we adopt a shorter or longer timeframe for implementation such as one year or two years, and if so, why? Should the Commission consider the size of a carrier's network, including the need to simultaneously replace multiple legacy switches, when determining the appropriate implementation timeline? Further, does the use of legacy switch technology warrant a phased-in approach and, if so, how should that be implemented? Are there risks associated with such an approach ( e.g., confusion among the public regarding the availability of 988)? Would such an approach inappropriately reward carriers that have not invested in their networks to prepare for the IP transition in a timely manner? How many such switches reside on the networks of rural local exchange carriers, if any, and what unique barriers would such carriers face in implementing 988 in a timely manner? Are there other challenges that service providers may face that we should consider in determining the appropriate timeframe for implementation?

25. Costs. We propose that all providers bear their own costs for executing the upgrades necessary to be able to implement 988 as a 3-digit code for a national suicide prevention and mental health crisis hotline. This approach encourages efficiency in implementation and avoids unnecessary administrative costs. In turn, section 251(e)(2) of the Act states that “[t]he cost of establishing telecommunications numbering administration arrangements and number portability shall be borne by all telecommunications carriers on a competitively neutral basis.” The Commission is only required to apply section 251(e)(2) in situations involving some type of numbering administration arrangement, where for instance, the Commission hires a third party to develop a database for industry use. Here, that circumstance is not present. Therefore, we believe the section 251(e)(2) requirements do not apply. Even if section 251(e)(2) applies, we believe it is satisfied if we require each provider to bear its own costs because each provider's costs will be proportional to the size and quality of its network. We seek comment on this proposal.

26. We expect that designation and implementation of 988 as a simple, easy-to-remember 3-digit dialing code nationwide will increase the convenience and immediacy of access to life-saving suicide prevention and mental health crisis services. By becoming a part of the existing framework of the Lifeline and Veterans Crisis Line, we expect that the 988 dialing code will “make it easier for Americans in crisis to access potentially life-saving resources.”

27. In the FCC Staff Report, Commission staff conducted a cost-benefit analysis of designating 988 as the 3-digit dialing code for a national suicide prevention and mental health crisis hotline. The cost-benefit analysis used information from the NANC, SAMHSA, the VA, and publicly available data. Commission staff estimated the total costs for the first year at $570 million, costs for the second year at approximately $175 million, and subsequent years at approximately $50 million annually. In estimating the benefits of the 3-digit dialing code, the analysis used the Department of Transportation's Value of a Statistical Life. Staff determined that if the 3-digit code were to reduce suicide mortality risk by a fraction of one percent, it would be well worth its cost. We acknowledge the difficulty in attempting to quantify the value of mortality reductions and use Value of a Statistical Life only as a practical approach to conducting this necessary analysis. Based on this analysis, Commission staff concluded that the benefits of designating 988 as the dialing code for a national suicide prevention and mental health crisis hotline outweighed the costs. While the FCC Staff Report took a broad view and accounted for costs that may be incurred by a variety of entities from service providers to crisis centers, here we focus on the costs and benefits of our proposed rules to require covered providers to implement 988.

28. If the new 988 dialing code can deter one of every thousand Americans who would otherwise attempt suicide from harming themselves—a 0.1% reduction in suicides and suicide attempts—we expect the estimated benefit of $2.4 billion in present value over the course of ten years will exceed the estimated, one-time $367 million in present value implementation cost to service providers. As discussed below, the estimated costs that service providers will incur due to implementation include $300 million for upgrading and replacing switches and $92.5 million for translation updates. For simplicity, we assume the total estimated cost of $392.5 million will be incurred one year into the future (rather than incurred throughout the 18-month transition period) and then discount back to the present day using a discount rate of 7%. The discounted value is equal to $367 million ($392.5 million/1.07 = $367 million). If providers choose to pass these costs on to customers, we expect any increased costs to consumers to be minimal, and we believe that this potential added cost is worth the benefit. We seek comment on this preliminary conclusion that benefits surpass costs and the estimation methods described below.

Availability

A copy of UCSC/PISCO's application and any supporting documents, as well as a list of the references cited in this document, may be obtained online at: www.nmfs.noaa.gov/pr/permits/incidental/research.htm. In case of problems accessing these documents, please call the contact listed above (see FOR FURTHER INFORMATION CONTACT ).

This proposed rule would establish a framework under the authority of the MMPA (16 U.S.C. 1361 et seq. ) to allow for the authorization of take of marine mammals incidental to the UCSC/PISCO's rocky intertidal research activities in Oregon and California.

We received an application from the UCSC/PISCO requesting five-year regulations and authorization to take multiple species of marine mammals. Take would occur by Level B harassment incidental to visual disturbance of pinnipeds during research activities and use of research equipment. Please see “Background” below for definitions of harassment.

Section 101(a)(5)(A) of the MMPA (16 U.S.C. 1371(a)(5)(A)) directs the Secretary of Commerce to allow, upon request, the incidental, but not intentional taking of small numbers of marine mammals by U.S. citizens who engage in a specified activity (other than commercial fishing) within a specified geographical region for up to five years if, after notice and public comment, the agency makes certain findings and issues regulations that set forth permissible methods of taking pursuant to that activity and other means of effecting the “least practicable adverse impact” on the affected species or stocks and their habitat (see the discussion below in the Proposed Mitigation section), as well as monitoring and reporting requirements. Section 101(a)(5)(A) of the MMPA and the implementing regulations at 50 CFR part 216, subpart I provide the legal basis for issuing this proposed rule containing five-year regulations, and for any subsequent Letters of Authorization (LOAs). As directed by this legal authority, this proposed rule contains mitigation, monitoring, and reporting requirements.

Following is a summary of the major provisions of this proposed rule regarding UCSC/PISCO's rocky intertidal research activities. These measures include:

• Required implementation of mitigation to minimize impact to pinnipeds and avoid disruption to dependent pups including several measures to approach haulouts cautiously to minimize disturbance, especially when pups are present.

• Required monitoring of the research areas to detect the presence of marine mammals before initiating surveys.

The MMPA prohibits the “take” of marine mammals, with certain exceptions. Sections 101(a)(5)(A) and (D) of the MMPA (16 U.S.C. 1361 et seq. ) direct the Secretary of Commerce (as delegated to NMFS) to allow, upon request, the incidental, but not intentional, taking of small numbers of marine mammals by U.S. citizens who engage in a specified activity (other than commercial fishing) within a specified geographical region if certain findings are made, regulations are issued, and notice is provided to the public.

Authorization for incidental takings shall be granted if NMFS finds that the taking will have a negligible impact on the species or stock(s) and will not have an unmitigable adverse impact on the availability of the species or stock(s) for taking for subsistence uses (where relevant). Further, NMFS must prescribe the permissible methods of taking and other “means of effecting the least practicable adverse impact” on the affected species or stocks and their habitat, paying particular attention to rookeries, mating grounds, and areas of similar significance, and on the availability of the species or stocks for taking for certain subsistence uses (referred to, in shorthand, as “mitigation”); and requirements pertaining to the mitigation, monitoring and reporting of the takings are set forth.

The definitions of all applicable MMPA statutory terms cited above are included in the relevant sections below.

To comply with the National Environmental Policy Act of 1969 (NEPA; 42 U.S.C. 4321 et seq. ) and NOAA Administrative Order (NAO) 216-6A, NMFS must review our proposed action ( i.e., the issuance of a proposed rule (and subsequent LOAs)) with respect to potential impacts on the human environment. This action is consistent with categories of activities identified in Categorical Exclusion B4 (incidental harassment authorizations (IHAs) with no anticipated serious injury or mortality) of the Companion Manual for NOAA Administrative Order 216-6A, which do not individually or cumulatively have the potential for significant impacts on the quality of the human environment and for which we have not identified any extraordinary circumstances that would preclude this categorical exclusion. Accordingly, NMFS has preliminarily determined that the issuance of the proposed rule qualifies to be categorically excluded from further NEPA review. We will review all comments submitted in response to this proposed rule prior to concluding our NEPA process or making a final decision on the request.

On August 12, 2019, NMFS received a request from UCSC/PISCO for a proposed rule and LOA to take marine mammals incidental to rocky intertidal monitoring surveys along the Oregon and California coasts. After a series of revisions, the application was deemed adequate and complete on October 8, 2019. UCSC/PISCO's request is for take of a small number of California sea lion ( Zalophus californianus ), Harbor seals ( Phoca vitulina richardii ), Northern elephant seals ( Mirounga angustirostris ), and Steller sea lions ( Eumetopias jubatus ), by Level B harassment only. Neither UCSC/PISCO nor NMFS expects serious injury or mortality, or Level A harassment, to result from this activity.

NMFS previously issued seven IHAs to UCSC/PISCO for this work (77 FR 72327, December 5, 2012; 78 FR 79403, December 30, 2013; 79 FR 73048, December 9, 2014; 81 FR 7319, February 11, 2016; 82 FR 12568, March 6, 2017; 83 FR 11696, March 16, 2018; 84 FR 17784, April 26, 2019). UCSC/PISCO complied with all the requirements ( e.g., mitigation, monitoring, and reporting) of the previous IHAs and information regarding their monitoring results may be found in the Potential Effects of the Specified Activity on Marine Mammals and their Habitat and Estimated Take sections.

UCSC/PISCO proposes to continue rocky intertidal monitoring work that has been ongoing for over 20 years. UCSC/PISCO focuses on understanding the nearshore ecosystems of the U.S. west coast through a number of interdisciplinary collaborations. The program integrates long-term monitoring of ecological and oceanographic processes at dozens of sites with experimental work in the lab and field. Research is conducted throughout the year along the California and Oregon coasts and will continue indefinitely. Researchers accessing and conducting research activities on the sites may occasionally cause behavioral disturbance (or Level B harassment) of four pinniped species. UCSC/PISCO expects that the disturbance to pinnipeds from the research activities will be minimal and will be limited to Level B harassment.

UCSC/PISCO's research is conducted throughout the year. Most sites are sampled one to two times per year over a 1 to 2-day period (4-6 hours per site) during a negative low tide series (when tides are lower than the average). Due to the large number of research sites, scheduling constraints, the necessity for negative low tides and favorable weather/ocean conditions, exact survey dates are variable and difficult to predict. Some sampling may occur in all months of the calendar year. Over the course of this five-year authorization UCSC/PISCO expects approximately 300 days of survey effort. UCSC/PISCO's current IHA expires April 11, 2020, so these regulations are requested to be effective April 12, 2020 through April 11, 2025.

Sampling sites occur along the California and Oregon coasts. Community Structure Monitoring survey sites range from Ecola State Park near Cannon Beach, Oregon to Government Point located northwest of Santa Barbara, California. Biodiversity survey sites extend from Ecola State Park south to Cabrillo National Monument in San Diego County, California. Exact locations of sampling sites can be found in Table 1 and the maps of UCSC/PISCO's application.

Community Structure Monitoring surveys involve the use of permanent photoplot quadrats, which target specific algal and invertebrate assemblages ( e.g. mussels, rockweeds, barnacles). Each photoplot is photographed and scored for percent cover. The Community Structure Monitoring approach is based largely on surveys that quantify the percent cover and distribution of algae and invertebrates that constitute these communities. This approach allows researchers to quantify both the patterns of abundance of targeted species, as well as characterize changes in the communities in which they reside. Such information provides managers with insight into the causes and consequences of changes in species abundance. There are a total of 48 Community Structure Monitoring sites, each of which will be visited one to two times per year (see Table 1 of the application for specifics for each site) under the proposed regulations and LOA and surveyed over a 1-day period during a low tide series.

Biodiversity Surveys are part of a long-term monitoring project and are conducted every 3-5 years across 143 established sites. These Biodiversity Surveys involve point contact identification along permanent transects, mobile invertebrate quadrat counts, sea star band counts, and tidal height topographic measurements. Many of the Biodiversity Survey sites are also Community Structure sites. Biodiversity survey sites will be sampled zero to five times during the course of these regulations and LOA (see Tables 3-6 in the application for details of expected survey frequency).

The intertidal zones where UCSC/PISCO conducts intertidal monitoring are also areas where pinnipeds can be found hauled out (temporarily leaving the water) on the shore at or adjacent to some research sites. Pinnipeds have been recorded at 63 of the survey sites. Accessing portions of the intertidal habitat at these locations may cause incidental Level B (behavioral) harassment of pinnipeds through some unavoidable approaches if pinnipeds are hauled out directly in the study plots or while biologists walk from one location to another or during occasions when they replace survey marker bolts using a hand drill. No motorized equipment is involved in conducting these surveys.

Proposed mitigation, monitoring, and reporting measures are described in detail later in this document (please see Proposed Mitigation and Proposed Monitoring and Reporting ).

Sections 3 and 4 of the application summarize available information regarding status and trends, distribution and habitat preferences, and behavior and life history, of the potentially affected species. Additional information regarding population trends and threats may be found in NMFS's Stock Assessment Reports (SARs; https://www.fisheries.noaa.gov/national/marine-mammal-protection/marine-mammal-stock-assessments ) and more general information about these species ( e.g., physical and behavioral descriptions) may be found on NMFS's website ( https://www.fisheries.noaa.gov/find-species ).

Table 1 lists all species with expected potential for occurrence at survey sites in California and Oregon and summarizes information related to the population or stock, including regulatory status under the MMPA and Endangered Species Act (ESA) and potential biological removal (PBR), where known. For taxonomy, we follow Committee on Taxonomy (2018). PBR is defined by the MMPA as the maximum number of animals, not including natural mortalities, that may be removed from a marine mammal stock while allowing that stock to reach or maintain its optimum sustainable population (as described in NMFS's SARs). While no mortality is anticipated or authorized here, PBR and annual serious injury and mortality from anthropogenic sources are included here as gross indicators of the status of the species and other threats.

Marine mammal abundance estimates presented in this document represent the total number of individuals that make up a given stock or the total number estimated within a particular study or survey area. NMFS's stock abundance estimates for most species represent the total estimate of individuals within the geographic area, if known, that comprises that stock. For some species, this geographic area may extend beyond U.S. waters. All managed stocks in this region are assessed in NMFS's U.S. 2018 Pacific Marine Mammal SARs (Carretta et al. 2019). All values presented in Table 1 are the most recent available at the time of publication and are available in the 2018 SARs (available online at: https://www.fisheries.noaa.gov/national/marine-mammal-protection/draft-marine-mammal-stock-assessment-reports ).

All species that could potentially occur in the proposed survey areas are included in Table 1. As described below, all four species temporally and spatially co-occur with the activity to the degree that take is reasonably likely to occur, and we have proposed authorizing it.

In addition, the southern sea otter may be found from San Francisco south to the Channel Islands. However, they are managed by the U.S. Fish and Wildlife Service and are not considered further in this document.

California sea lions ( Zalophus californianus ) are distributed along the west coast of North America from British Columbia to Baja California and throughout the Gulf of California. Breeding occurs on offshore islands along the west coast of Baja California and the Gulf of California as well as on the California Channel Islands. There are three recognized California sea lion stocks (U.S. stock, Western Baja stock, and the Gulf of California stock) with the U.S. stock ranging from the U.S./Mexico border into Canada. Although there is some movement between stocks, U.S. rookeries are considered to be isolated from rookeries off of Baja California (Barlow et al. 1995).

California sea lions were hunted for several thousand years by indigenous peoples and early hunters. In the early 1900s, sea lions were killed in an effort to reduce competition with commercial fisheries. They were also hunted commercially from the 1920-1940s. Following the passage of the MMPA in 1972, as well as limits on killing and harassment in Mexico, the population has rapidly increased (Reeves et al. 2002). Declines in pup production did occur during the 1983-84, 1992-93, 1997-98, and 2003 El Niño events, but production returned to pre- El Niño levels within 2-5 years (Carretta et al. 2016). In 2013, NOAA declared an Unusual Mortality Event (UME) due to the elevated number of sea lion pup strandings in southern California. The cause of this event is thought to be nutritional stress related to declines in prey availability. This UME is on-going. They have been observed in the project vicinity at 28 of the research sites (see application Table 4).

Steller sea lions ( Eumetopias jubatus ) range along the North Pacific Rim from northern Japan to California, with centers of abundance and distribution in the Gulf of Alaska and Aleutian Islands. Large numbers of individuals widely disperse when not breeding (late May to early July) to access seasonally important prey resources (Muto et al. 2019). In 1997 NMFS identified two distinct population segments (DPSs) of Steller sea lions under the ESA: A Western DPS and an Eastern DPS (62 FR 24345, May 5, 1997). The Eastern DPS is not ESA listed, the Western DPS is. For MMPA purposes the Eastern DPS is called the Eastern U.S. stock and the Western DPS is called the Western U.S. stock. The Steller sea lions along the Oregon and California coasts are part of the Eastern Stock (and DPS). Steller sea lions are rare in the research areas. They have only been observed in the project vicinity at Cape Arago in 2009 and have not been observed during this research project since then.

Northern elephant seals ( Mirounga angustirostris ) range widely throughout the eastern Pacific for most of the year to forage. They return to haulout locations along the west coast of the continental United States including the Channel Islands, the central California coast, and islands off Baja California, to breed and molt. Breeding occurs from December through early spring, with males returning to haul-out locations earlier than females to establish dominance hierarchies. Molting occurs from late April to August, with juveniles and adult females returning earlier than adult males (Reeves et al. 2002). Due to very little movement between colonies in Mexico and those in California, the California population is considered to be a separate stock (Carretta et al. 2019).

This species was hunted by indigenous peoples for several thousand years and by commercial sealers in the 1800s. By the late 1800s, the species was thought to be extinct, although several were seen on Guadalupe Island in the 1880s and a few dozen to several hundred survived off of Mexico (Stewart et al. 1994). The population began increasing in the early 1900s and progressively colonized southern and central California through the 1980s (Reeves et al. 2002). The species abundance has grown at 3.8 percent annually since 1988 (Lowry et al. 2014).

They have been observed in the project vicinity at 13 of the research sites (see application Table 5).

Pacific harbor seals ( Phoca vitulina richardii ) inhabit near-shore coastal and estuarine areas from Baja California, Mexico, to the Pribilof Islands in Alaska. They are divided into two subspecies: P. v. stejnegeri in the western North Pacific, near Japan, and P. v. richardii in the northeast Pacific Ocean. The latter subspecies, includes two MMPA stocks in the project area: The Oregon and Washington Coast stock in the outer coastal waters of Oregon and Washington states, and the California stock.

In Oregon there are over 40 haulout sites (Brown et al. 2005) while in California, over 500 harbor seal haulout sites are widely distributed along the mainland and offshore islands, and include rocky shores, beaches and intertidal sandbars (Lowry et al. 2005). Harbor seals mate at sea, and females give birth during the spring and summer, although, the pupping season varies with latitude. Pups are nursed for an average of 24 days and are ready to swim minutes after being born. Harbor seal pupping takes place at many locations, and rookery size varies from a few pups to many hundreds of pups. Pupping generally occurs between March and June, and molting occurs between May and July.

A 1999 census of the Oregon/Washington harbor seal stock found 16,165 individuals, of which 5,735 were in Oregon (Carretta et al. 2016). The population was estimated to number 24,732 individuals in the Oregon/Washington stock (Carretta et al. 2016). However, the most recent abundance estimate for the Oregon/Washington stock is over 8 years old, therefore the abundance estimate for this stock is considered unofficial. They have been observed in the project vicinity at 49 of the research sites (see application Table 3).

This section includes a summary and discussion of the ways that components of the specified activity may impact marine mammals and their habitat. The Estimated Take section later in this document includes a quantitative analysis of the number of individuals that are expected to be taken by this activity. The Negligible Impact Analysis and Determination section considers the content of this section, the Estimated Take section, and the Proposed Mitigation section, to draw conclusions regarding the likely impacts of these activities on the reproductive success or survivorship of individuals and how those impacts on individuals are likely to impact marine mammal species or stocks.

The appearance of researchers may have the potential to cause Level B behavioral harassment of any pinnipeds hauled out at sampling sites. Although marine mammals are never deliberately approached by survey personnel, approach may be unavoidable if pinnipeds are hauled out in the immediate vicinity of the permanent study plots. Disturbance may result in reactions ranging from an animal simply becoming alert to the presence of researchers ( e.g., turning the head, assuming a more upright posture) to flushing from the haulout site into the water. NMFS does not consider the lesser reactions to constitute behavioral harassment, or Level B harassment takes, but rather assumes that pinnipeds that flee some distance or change the speed or direction of their movement in response to the presence of researchers are behaviorally harassed, and thus subject to Level B taking (see below). Animals that respond to the presence of researchers by becoming alert, but do not move or change the nature of locomotion as described, are not considered to have been subject to behavioral harassment.

Numerous studies have shown that human activity can flush harbor seals off haulout sites (Allen et al. 1985; Suryan and Harvey 1999). The Hawaiian monk seal ( Neomonachus schauinslandi ) has been shown to avoid beaches that have been disturbed often by humans (Kenyon 1972). Moreover, in one case, human disturbance appeared to cause Steller sea lions to desert a breeding area at Northeast Point on St. Paul Island, Alaska (Kenyon 1962).

There are three ways in which disturbance, as described previously, could result in more than Level B harassment of marine mammals. All three are most likely to be consequences of stampeding, a potentially dangerous occurrence in which large numbers of animals succumb to mass panic and rush away from a stimulus. The three situations are: (1) Falling when entering the water at high-relief locations; (2) extended separation of mothers and pups; and (3) crushing of elephant seal pups by large males during a stampede. UCSC/PISCO researchers have only recorded one instance of stampeding, which occurred in 2013.

Because hauled out animals may move towards the water when disturbed, there is the risk of injury if animals stampede towards shorelines with precipitous relief ( e.g., cliffs). Shoreline habitats near the survey areas tend to consist of steeply sloping rocks with unimpeded and non-obstructed access to the water. Disturbed, hauled out animals in these situations are likely to move toward the water slowly without risk of unexpectedly falling off cliffs or encountering barriers or hazards or that would otherwise prevent them from leaving the area. Therefore, research activity poses no risk that disturbed animals may fall and be injured or killed as a result of disturbance at high-relief locations and thus there is no risk that these disturbances will result in Level A harassment or mortality/serious injury.

Few pups are anticipated to be encountered during the proposed monitoring surveys. A small number of harbor seal, northern elephant seal and California sea lion pups, however, have been observed during past years. Though elephant seal pups are occasionally present when researchers visit survey sites, risk of pup mortalities is very low because elephant seals are far less reactive to researcher presence than the other two species. Harbor seals are very precocious with only a short period of time in which separation of a mother from a pup could occur. Pups are also typically found on sand beaches, while study sites are located in the rocky intertidal zone, meaning that there is typically a buffer between researchers and pups. Finally, the caution used by researchers in approaching sites generally precludes the possibility of behaviors, such as stampeding, that could result in extended separation of mothers and dependent pups, or trampling of pups.

The only habitat modification associated with the proposed activity is the placement of permanent bolts and temporary sampling equipment in the intertidal zone. The installation of bolts and sampling equipment is conducted under the appropriate permits (National Marine Sanctuary, California State Parks). Once a particular study has ended, the respective sampling equipment is removed; the bolts remain. No trash or field gear is left at a site. Sampling activities are also not expected to result in any long-term modifications of haulout use or abandonment of haulouts since these sites are only visited one to two times per year, which minimizes repeated disturbances. During periods of low tide ( e.g., when tides are 0.6 m (2 ft) or less and low enough for pinnipeds to haulout), we would expect the pinnipeds to return to the haulout site within 60 minutes of the disturbance (Allen et al. 1985). The effects to pinnipeds appear at most to displace the animals temporarily from their haulout sites, and we do not expect, and have not observed during previous authorizations, that the pinnipeds would permanently abandon a haulout site during the conduct of rocky intertidal surveys. Additionally, impacts to prey species from survey activities are not anticipated. Thus, the proposed activity is not expected to have any habitat-related effects that could cause significant or long-term consequences for individual marine mammals or their populations.

This section provides an estimate of the number of incidental takes proposed for authorization through this IHA, which will inform both NMFS' consideration of “small numbers” and the negligible impact determination.

Harassment is the only type of take expected to result from these activities. Except with respect to certain activities not pertinent here, section 3(18) of the MMPA defines “harassment” as any act of pursuit, torment, or annoyance, which (i) has the potential to injure a marine mammal or marine mammal stock in the wild (Level A harassment); or (ii) has the potential to disturb a marine mammal or marine mammal stock in the wild by causing disruption of behavioral patterns, including, but not limited to, migration, breathing, nursing, breeding, feeding, or sheltering (Level B harassment).

Authorized takes would be by Level B harassment only, in the form of disruption of behavioral patterns for individual marine mammals resulting from exposure to researchers. Based on the nature of the activity, Level A harassment is neither anticipated nor proposed to be authorized. As described previously, no mortality is anticipated or proposed to be authorized for this activity. Below we describe how the take is estimated.

In this section we provide the information about the presence, density, or group dynamics of marine mammals that will inform the take calculations. Take estimates are based on historical marine mammal observations from 2013-2018 at each site from previous UCSC/PISCO survey activities. Marine mammal observations are done as part of research site observations, which include notes on physical and biological conditions at the site, completed on each study day. From 2013-2018 observations were categorized on a four point scale:

• 0 = observation by researchers from a distance, no reaction by pinniped

• 1 = pinniped reacted to presence of researchers with movement <1 meter

• 2 = pinniped reacted to presence of researchers with short movement of 1-3 meters

• 3 = pinniped flushed to the water or moved >3 meters in retreat

A marine mammal is counted as an “encounter” (at least level 0 on the above scale) if it is seen on access ways to the site, at the site, or immediately up-coast or down-coast of the site, regardless of whether that animal was considered a “take” under the MMPA. Marine mammals in the water immediately offshore are also recorded. Under the above scale, “take” was only considered to be level 2 or 3 observations from the above scale. The maximum number of marine mammals, by species, seen at any given time throughout the sampling day (categories 0 through 4) is recorded at the conclusion of sampling. Any other relevant information, including the location of a marine mammal relevant to the site, any unusual behavior, and the presence of pups is also noted.

The observations described above formed the basis from which researchers with extensive knowledge and experience at each site estimated the actual number of marine mammals that may be subject to take. Take estimates for each species for which take would be authorized were based on the following equation:

For take estimates, UCSC/PISCO summed the total number of marine mammals, by species, “encountered” at each research site during the period from 2013 to 2018 ( i.e., all observations score 0 to 4 on the above scale). We then summed the number of sampling events where marine mammals were encountered at each site and calculated the average number of encounters per event (see Tables 2-5). These are the “number of expected animals per site” for the equation above. Note the number of these historical encounters that qualified as Level B take was less than 40 percent of all encounters (see application Section 6), so take estimates are expected to be conservative and consider potential temporal variation. The maximum number of planned survey events per survey site is listed in Tables 2-5. For Steller sea lions the one sighting from 2009 was used in this analysis. The take estimate by species per survey site calculation results can also be found in Tables 2-5.

Individual species' totals for each survey site were summed to arrive at a total estimated take number for the entire project. This is the take that is proposed to be authorized here (Table 6).

In order to issue regulations and an LOA under Section 101(a)(5)(A) of the MMPA, NMFS must set forth the permissible methods of taking pursuant to the activity, and other means of effecting the least practicable impact on the species or stock and its habitat, paying particular attention to rookeries, mating grounds, and areas of similar significance, and on the availability of the species or stock for taking for certain subsistence uses (latter not applicable for this action). NMFS regulations require applicants for incidental take authorizations to include information about the availability and feasibility (economic and technological) of equipment, methods, and manner of conducting the activity or other means of effecting the least practicable adverse impact upon the affected species or stocks and their habitat (50 CFR 216.104(a)(11)).

In evaluating how mitigation may or may not be appropriate to ensure the least practicable adverse impact on species or stocks and their habitat, as well as subsistence uses where applicable, we carefully consider two primary factors:

(1) The manner in which, and the degree to which, the successful implementation of the measure(s) is expected to reduce impacts to marine mammals, marine mammal species or stocks, and their habitat. This considers the nature of the potential adverse impact being mitigated (likelihood, scope, range). It further considers the likelihood that the measure will be effective if implemented (probability of accomplishing the mitigating result if implemented as planned), the likelihood of effective implementation (probability implemented as planned), and;

(2) The practicability of the measures for applicant implementation, which may consider such things as cost and impact on operations.

UCSC/PISCO will implement several mitigation measures to reduce potential take by Level B (behavioral disturbance) harassment. Measures are listed below.

• Researchers will observe a site from a distance for at least five minutes, using binoculars if necessary, to detect any marine mammals prior to approach to determine if mitigation is required ( i.e., site surveys will not be conducted if other pinnipeds are present, researchers will approach with caution, walking slowly, quietly, and close to the ground to avoid surprising any hauled out individuals and to reduce flushing/stampeding of individuals).

• Researchers will avoid pinnipeds along access ways to sites by locating and taking a different access way. Researchers will keep a safe distance from and not approach any marine mammal while conducting research, unless it is absolutely necessary to flush a marine mammal in order to continue conducting research ( i.e., if a site cannot be accessed or sampled due to the presence of pinnipeds).

• Researchers will avoid making loud noises ( i.e., using hushed voices) and keep bodies low to the ground (crouched) in the visual presence of pinnipeds.

• Researchers will monitor the offshore area for predators (such as killer whales and white sharks) and avoid flushing of pinnipeds when predators are observed in nearshore waters. Note that UCSC/PISCO has never observed an offshore predator while researchers were present at any of the survey sites.

• Intentional approach will not occur if dependent pups are present to avoid mother/pup separation and trampling of pups. Staff shall reschedule work at sites where pups are present, unless other means of accomplishing the work can be done without causing disturbance to mothers and dependent pups.

• Researchers will promptly vacate sites at the conclusion of sampling.

The primary method of mitigating the risk of disturbance to pinnipeds, which will be in use at all times, is the selection of judicious routes of approach to study sites, avoiding close contact with pinnipeds hauled out on shore, and the use of extreme caution upon approach. Each visit to a given study site will last for approximately 4-6 hours, after which the site is vacated and can be re-occupied by any marine mammals that may have been disturbed by the presence of researchers. Also, by arriving before low tide, worker presence will tend to encourage pinnipeds to move to other areas for the day before they haul out and settle onto rocks at low tide.

Based on our evaluation of the applicant's proposed measures, NMFS has preliminarily determined that the proposed mitigation measures provide the means effecting the least practicable impact on the affected species or stocks and their habitat, paying particular attention to rookeries, mating grounds, and areas of similar significance.

In order to issue regulations and an LOA for an activity, Section 101(a)(5)(A) of the MMPA states that NMFS must set forth requirements pertaining to the monitoring and reporting of such taking. The MMPA implementing regulations at 50 CFR 216.104(a)(13) indicate that requests for authorizations must include the suggested means of accomplishing the necessary monitoring and reporting that will result in increased knowledge of the species and of the level of taking or impacts on populations of marine mammals that are expected to be present in the proposed action area. Effective reporting is critical both to compliance as well as ensuring that the most value is obtained from the required monitoring.

Monitoring and reporting requirements prescribed by NMFS should contribute to improved understanding of one or more of the following:

• Occurrence of marine mammal species or stocks in the area in which take is anticipated ( e.g., presence, abundance, distribution, density).

• Nature, scope, or context of likely marine mammal exposure to potential stressors/impacts (individual or cumulative, acute or chronic), through better understanding of: (1) Action or environment ( e.g., source characterization, propagation, ambient noise); (2) affected species ( e.g., life history, dive patterns); (3) co-occurrence of marine mammal species with the action; or (4) biological or behavioral context of exposure ( e.g., age, calving or feeding areas).

• Individual marine mammal responses (behavioral or physiological) to acoustic stressors (acute, chronic, or cumulative), other stressors, or cumulative impacts from multiple stressors.

• How anticipated responses to stressors impact either: (1) Long-term fitness and survival of individual marine mammals; or (2) populations, species, or stocks.

• Effects on marine mammal habitat ( e.g., marine mammal prey species, acoustic habitat, or other important physical components of marine mammal habitat).

• Mitigation and monitoring effectiveness.

UCSC/PISCO will contribute to the knowledge of pinnipeds in California and Oregon by noting observations of: (1) Unusual behaviors, numbers, or distributions of pinnipeds, such that any potential follow-up research can be conducted by the appropriate personnel; (2) tag-bearing carcasses of pinnipeds, allowing transmittal of the information to appropriate agencies and personnel; and (3) rare or unusual species of marine mammals for agency follow-up.

Proposed monitoring requirements in relation to UCSC/PISCO's rocky intertidal monitoring will include observations made by the applicant. Information recorded will include species counts (with numbers of pups/juveniles) of animals present before approaching, numbers of observed disturbances (based on the scale below), and descriptions of the disturbance behaviors during the monitoring surveys, including location, date, and time of the event. For consistency, any reactions by pinnipeds to researchers will be recorded according to a three-point scale shown in Table 7. Note that only observations of disturbance Levels 2 and 3 should be recorded as takes.

In addition, observations regarding the number and species of any marine mammals observed, either in the water or hauled out, at or adjacent to a site, are recorded as part of field observations during research activities. Information regarding physical and biological conditions pertaining to a site, as well as the date and time that research was conducted are also noted. This information will be incorporated into a monitoring report for NMFS and raw data will be provided.

If at any time the specified activity clearly causes the take of a marine mammal in a manner prohibited by these regulations or LOA, such as an injury (Level A harassment), serious injury, or mortality, UCSC/PISCO shall immediately cease the specified activities and report the incident to the Office of Protected Resources, NMFS, and the West Coast Regional Stranding Coordinator, NMFS. The report must include the following information:

(1) Time and date of the incident;

(2) Description of the incident;

(3) Environmental conditions ( e.g., wind speed and direction, Beaufort sea state, cloud cover, and visibility);

(4) Description of all marine mammal observations in the 24 hours preceding the incident;

(5) Species identification or description of the animal(s) involved;

(6) Fate of the animal(s); and

(7) Photographs or video footage of the animal(s) (if equipment is available).

Activities shall not resume until NMFS is able to review the circumstances of the prohibited take. NMFS will work with UCSC/PISCO to determine what measures are necessary to minimize the likelihood of further prohibited take and ensure MMPA compliance. UCSC/PISCO may not resume the activities until notified by NMFS via letter, email, or telephone.

In the event that UCSC/PISCO discovers an injured or dead marine mammal and determines that the cause of the injury or death is unknown and the death is relatively recent ( e.g., in less than a moderate state of decomposition), UCSC/PISCO shall immediately report the incident to the Office of Protected Resources, NMFS, and the West Coast Regional Stranding Coordinator, NMFS. The report must include the same information identified in the paragraph above. Activities may continue while NMFS reviews the circumstances of the incident. NMFS will work with UCSC/PISCO to determine whether additional mitigation measures or modifications to the activities are appropriate.

In the event that an injured or dead marine mammal is discovered and it is determined that the injury or death is not associated with or related to the activities authorized in the regulations and LOA ( e.g., previously wounded animal, carcass with moderate to advanced decomposition, or scavenger damage), UCSC/PISCO shall report the incident to the Office of Protected Resources, NMFS, and the West Coast Regional Stranding Coordinator, NMFS, within 24 hours of the discovery. UCSC/PISCO shall provide photographs, video footage (if available) or other documentation of the stranded animal sighting to NMFS and the Marine Mammal Stranding Network. Activities may continue while NMFS reviews the circumstances of the incident.

A draft annual report shall be submitted to NMFS Office of Protected Resources within 90 days after the conclusion of each annual field season. The final annual report after year five may be included as part of the final report (see below). The report will include a summary of the information gathered pursuant to the monitoring requirements set forth above and in the LOA. A final annual report shall be submitted to the Director of the NMFS Office of Protected Resources within 30 days after receiving comments from NMFS on the draft annual report. If no comments are received from NMFS, the draft annual report will be considered the final report.

A draft final report shall be submitted to NMFS Office of Protected Resources within 60 days after the conclusion of the fifth year. A final report shall be submitted to the Director of the NMFS Office of Protected Resources and to the NMFS West Coast Regional Administrator within 30 days after receiving comments from NMFS on the draft final report. If no comments are received from NMFS, the draft final report will be considered the final report.

UCSC/PISCO complied with the mitigation and monitoring that were required under the prior IHAs issued from 2013 to 2019. In compliance with those IHAs, they submitted reports detailing the activities and marine mammal monitoring they conducted. The IHAs required UCSC/PISCO to conduct counts of pinnipeds present at study sites prior to approaching the sites and to record species counts and any observed reactions to the presence of the researchers. These monitoring results were discussed above in the Estimated Take section.

Based on the results from the monitoring reports, we conclude that these results support our original findings that the mitigation measures set forth in the recent IHAs effected the least practicable impact on the species or stocks. There were no stampede events during these years and most disturbances were Level 1 and 2 from the disturbance scale (Table 3) meaning the animal did not fully flush but observed or moved slightly in response to researchers. Those that did fully flush to the water did so slowly. Most of these animals tended to observe researchers from the water and then re-haulout farther up-coast or down-coast of the site within approximately 30 minutes of the disturbance.

NMFS has defined negligible impact as an impact resulting from the specified activity that cannot be reasonably expected to, and is not reasonably likely to, adversely affect the species or stock through effects on annual rates of recruitment or survival (50 CFR 216.103). A negligible impact finding is based on the lack of likely adverse effects on annual rates of recruitment or survival ( i.e., population-level effects). An estimate of the number of takes alone is not enough information on which to base an impact determination. In addition to considering estimates of the number of marine mammals that might be “taken” through harassment, NMFS considers other factors, such as the likely nature of any responses ( e.g., intensity, duration), the context of any responses ( e.g., critical reproductive time or location, migration), as well as effects on habitat, and the likely effectiveness of the mitigation. We also assess the number, intensity, and context of estimated takes by evaluating this information relative to population status. Consistent with the 1989 preamble for NMFS's implementing regulations (54 FR 40338; September 29, 1989), the impacts from other past and ongoing anthropogenic activities are incorporated into this analysis via their impacts on the environmental baseline ( e.g., as reflected in the regulatory status of the species, population size and growth rate where known, ongoing sources of human-caused mortality, or ambient noise levels).

To avoid repetition, the discussion of our analyses applies to all the species listed in Table 7, given that the anticipated effects of this activity on these different marine mammal stocks are expected to be similar. There is little information about the nature or severity of the impacts, or the size, status, or structure of any of these species or stocks that would lead to a different analysis for this activity. Research activities have the potential to disturb or displace marine mammals. Specifically, the project activities may result in take, in the form of Level B harassment from researchers movements and equipment handling. Potential takes could occur if individuals of these species are present nearby when these activities are underway.

No injuries or mortalities are anticipated to occur as a result of UCSC/PISCO's rocky intertidal monitoring surveys and none are proposed to be authorized. The risk of marine mammal injury, serious injury, or mortality associated with rocky intertidal monitoring increases somewhat if disturbances occur during breeding season. These situations present increased potential for mothers and dependent pups to become separated and, if separated pairs do not quickly reunite, the risk of mortality to pups ( e.g., through starvation) may increase. Separately, adult male elephant seals may trample elephant seal pups if disturbed, which could potentially result in the injury, serious injury, or mortality of the pups. Few pups are anticipated to be encountered during the proposed surveys. As shown in previous monitoring reports, however, limited numbers of harbor seal, northern elephant seal, and California sea lion pups have been observed at several sites during past years. Harbor seals are very precocious with only a short period of time in which separation of a mother from a pup could occur. Although elephant seal pups are occasionally present when researchers visit survey sites, risk of pup mortalities is very low because elephant seals are far less reactive to researcher presence compared to the other two species. Further, elephant seal pups are typically found on sand beaches, while study sites are located in the rocky intertidal zone, meaning that there is typically a buffer between researchers and pups. The caution used by researchers in approaching sites generally precludes the possibility of behavior, such as stampeding, that could result in extended separation of mothers and dependent pups or trampling of pups. Finally, UCSC/PISCO shall reschedule work at sites where pups are present, unless other means of accomplishing the work can be done without causing disturbance to mothers and dependent pups. The potential for harassment is further minimized through the approach method and the implementation of the planned mitigation measures (see Proposed Mitigation section).

Typically, even those reactions constituting Level B harassment would result at most in temporary, short-term behavioral disturbance. In any given study season, researchers will visit select sites one to two times per year for 4-6 hours per visit. Therefore, disturbance of pinnipeds resulting from the presence of researchers lasts only for short periods. These short periods of disturbance lasting less than a day are separated by months or years. Community Structure sites are visited at most twice per year and the visits occur in different seasons. Biodiversity surveys take place at a given location once every 3-5 years.

Of the marine mammal species anticipated to occur in the proposed activity areas, none are listed under the ESA. Taking into account the planned mitigation measures, effects to marine mammals are generally expected to be restricted to short-term changes in behavior or temporary abandonment of haulout sites, pinnipeds are not expected to permanently abandon any area that is surveyed by researchers, as is evidenced by continued presence of pinnipeds at the sites during annual monitoring counts. No adverse effects to prey species are anticipated and habitat impacts are limited and highly localized, consisting of the placement of permanent bolts and temporary research equipment in the intertidal zone. Based on the analysis contained herein of the likely effects of the specified activity on marine mammals and their habitat, and taking into consideration the implementation of the proposed mitigation and monitoring measures, NMFS finds that the total marine mammal take from UCSC/PISCO's rocky intertidal monitoring program will not adversely affect annual rates of recruitment or survival and, therefore, will have a negligible impact on the affected species or stocks.

In summary and as described above, the following factors primarily support our preliminary determination that the impacts resulting from this activity are not expected to adversely affect the species or stock through effects on annual rates of recruitment or survival:

• No serious injury or mortality, or Level A harassment, is anticipated or authorized.

• Only a small number of pups are expected to be disturbed;

• Effects of the survey activities would be limited to short-term, localized behavioral changes;

• Nominal impacts to pinniped habitat are anticipated; and

• Mitigation measures are anticipated to be effective in minimizing the number and severity of takes by Level B harassment, which are expected to be of short duration.

Based on the analysis contained herein of the likely effects of the specified activity on marine mammals and their habitat, and taking into consideration the implementation of the proposed monitoring and mitigation measures, NMFS preliminarily finds that the total marine mammal take from the proposed activity will have a negligible impact on all affected marine mammal species or stocks.

As noted above, only small numbers of incidental take may be authorized under Sections 101(a)(5)(A) of the MMPA for specified activities other than military readiness activities. The MMPA does not define small numbers and so, in practice, where estimated numbers are available, NMFS compares the number of individuals taken to the most appropriate estimation of abundance of the relevant species or stock in our determination of whether an authorization is limited to small numbers of marine mammals. Additionally, other qualitative factors may be considered in the analysis, such as the temporal or spatial scale of the activities.

The amount of take NMFS proposes to authorize is 0.06 to 2.6 percent of any stock's best population estimate (Table 7). These are all likely conservative estimates because they assume all encounters result in take, which has not historically been the case. The Oregon/Washington stock of harbor seals has no official NMFS abundance estimate as the most recent estimate is greater than eight years old. Nevertheless, the most recent estimate was 27,348 animals and it is highly unlikely this number has drastically declined.

Based on the analysis contained herein of the proposed activity (including the proposed mitigation and monitoring measures) and the anticipated take of marine mammals, NMFS preliminarily finds that small numbers of marine mammals will be taken relative to the population size of the affected species or stocks.

There are no relevant subsistence uses of the affected marine mammal stocks or species implicated by this action. Therefore, NMFS has preliminarily determined that the total taking of affected species or stocks would not have an unmitigable adverse impact on the availability of such species or stocks for taking for subsistence purposes.

Section 7(a)(2) of the Endangered Species Act of 1973 (ESA: 16 U.S.C. 1531 et seq. ) requires that each Federal agency insure that any action it authorizes, funds, or carries out is not likely to jeopardize the continued existence of any endangered or threatened species or result in the destruction or adverse modification of designated critical habitat.

No incidental take of ESA-listed species is proposed for authorization or expected to result from this activity. Therefore, NMFS has determined that formal consultation under section 7 of the ESA is not required for this action.

NMFS requests interested persons to submit comments, information, and suggestions concerning the UCSC/PISCO request and the proposed regulations (see ADDRESSES ). All comments will be reviewed and evaluated as we prepare a final rule and make final determinations on whether to issue the requested authorization. This notice and referenced documents provide all environmental information relating to our proposed action for public review.

Pursuant to the procedures established to implement Executive Order 12866, the Office of Management and Budget has determined that this proposed rule is not significant.

Pursuant to section 605(b) of the Regulatory Flexibility Act (RFA), the Chief Counsel for Regulation of the Department of Commerce has certified to the Chief Counsel for Advocacy of the Small Business Administration that this proposed rule, if adopted, would not have a significant economic impact on a substantial number of small entities. UCSC/PISCO is the sole entity that would be subject to the requirements in these proposed regulations, and UCSC/PISCO is not a small governmental jurisdiction, small organization, or small business, as defined by the RFA. Because of this certification, a regulatory flexibility analysis is not required and none has been prepared.

This proposed rule contains a collection-of-information requirement subject to the provisions of the Paperwork Reduction Act (PRA). Notwithstanding any other provision of law, no person is required to respond to nor shall a person be subject to a penalty for failure to comply with a collection of information subject to the requirements of the PRA unless that collection of information displays a currently valid OMB control number. These requirements have been approved by OMB under control number 0648-0151 and include applications for regulations, subsequent LOAs, and reports.

For reasons set forth in the preamble, 50 CFR part 217 is proposed to be amended as follows: