Agricultural Marketing Service
Food Safety and Inspection Service
Rural Business-Cooperative Service
Rural Housing Service
Rural Utilities Service
Census Bureau
Industry and Security Bureau
International Trade Administration
National Institute of Standards and Technology
National Oceanic and Atmospheric Administration
Federal Energy Regulatory Commission
Children and Families Administration
Food and Drug Administration
Health Resources and Services Administration
National Institutes of Health
Coast Guard
Federal Emergency Management Agency
Transportation Security Administration
U.S. Customs and Border Protection
Fish and Wildlife Service
Alcohol, Tobacco, Firearms, and Explosives Bureau
Drug Enforcement Administration
Copyright Royalty Board
Federal Procurement Policy Office
Federal Aviation Administration
Community Development Financial Institutions Fund
Fiscal Service
Consult the Reader Aids section at the end of this issue for phone numbers, online resources, finding aids, and notice of recently enacted public laws.
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Federal Energy Regulatory Commission, Energy.
Final rule.
Pursuant to the authority delegated by the Commission's regulations, the Director of the Office of Energy Projects (OEP) computes and publishes the project cost and annual limits for natural gas pipelines blanket construction certificates for each calendar year.
This final rule is effective March 19, 2020 and establishes cost limits applicable from January 1, 2020 through December 31, 2020.
Richard W. Foley, Chief, Certificates Branch 1 Division of Pipeline Certificates, (202) 502-8955.
Section 157.208(d) of the Commission's Regulations provides for project cost limits applicable to construction, acquisition, operation and miscellaneous rearrangement of facilities (Table I) authorized under the blanket certificate procedure (Order No. 234, 19 FERC ¶ 61,216). Section 157.215(a) specifies the calendar year dollar limit which may be expended on underground storage testing and development (Table II) authorized under the blanket certificate. Section 157.208(d) requires that the “limits specified in Tables I and II shall be adjusted each calendar year to reflect the 'GDP implicit price deflator' published by the Department of Commerce for the previous calendar year.”
Pursuant to § 375.308(x)(1) of the Commission's Regulations, the authority for the publication of such cost limits, as adjusted for inflation, is delegated to the Director of the Office of Energy Projects. The cost limits for calendar year 2020, as published in Table I of § 157.208(d) and Table II of § 157.215(a), are hereby issued.
This final rule is effective March 19, 2020. The provisions of 5 U.S.C. 804 regarding Congressional review of final rules does not apply to the final rule because the rule concerns agency procedure and practice and will not substantially affect the rights or obligations of non-agency parties. The final rule merely updates amounts published in the Code of Federal Regulations to reflect the Department of Commerce's latest annual determination of the Gross Domestic Product (GDP) implicit price deflator, a mathematical updating required by the Commission's existing regulations.
Administrative practice and procedure, Natural gas, Reporting and recordkeeping requirements.
Accordingly, 18 CFR part 157 is amended as follows:
15 U.S.C. 717-717w, 3301-3432; 42 U.S.C. 7101-7352.
(d) * * *
(a) * * *
(5) * * *
U.S. Customs and Border Protection and U.S. Transportation Security Administration, Department of Homeland Security.
Notification of arrival restrictions.
This document announces the decision of the Secretary of Homeland Security (DHS) to direct all flights to the United States carrying persons who have recently traveled from, or were otherwise present within, the United Kingdom, excluding overseas territories outside of Europe, or the Republic of Ireland to arrive at one of the United States airports where the United States Government is focusing public health resources. This document updates the previous decisions of the Secretary of DHS: To direct all flights to the United States carrying persons who have recently traveled from, or were otherwise present within, the People's Republic of China (excluding the Special Regions of Hong Kong and Macau) to arrive at one of the United States airports where the United States Government is focusing public health resources (effective February 2, 2020); to direct all flights to the United States carrying persons who have recently traveled from, or were otherwise present within, the Islamic Republic of Iran to arrive at one of the United States airports where the United States Government is focusing public health resources (effective March 2, 2020); and to direct all flights to the United States carrying persons who have recently traveled from, or were otherwise present within, the countries of the Schengen Area, to arrive at one of the United States airports where the United States Government is focusing public health resources (effective March 13, 2020).
Flights departing after 11:59 p.m. Eastern Daylight Time (EDT) on Monday, March 16, 2020, and covered by the arrival restrictions regarding the United Kingdom, excluding overseas territories outside of Europe, or the Republic of Ireland are required to land at one of the airports identified in this document. These arrival restrictions will continue until cancelled or modified by the Secretary of DHS and notification is published in the
Matthew S. Davies, Office of Field Operations, U.S. Customs and Border Protection (CBP) at 202-325-2073.
Coronaviruses are a large family of viruses that are common in many different species of animals, including camels, cattle, cats, and bats. While it is rare, animal coronaviruses can infect people, and then spread between people (human-to-human) such as with Middle East Respiratory Syndrome and Severe Acute Respiratory Syndrome. The United States Government is closely monitoring an outbreak of respiratory illness caused by human-to-human transmission of a novel (new) coronavirus (which has since been renamed “SARS-CoV-2” and causes the disease COVID-19), first identified in Wuhan City, Hubei Province, People's Republic of China.
The potential for widespread transmission of this virus by infected individuals seeking to enter the United States threatens the security of our transportation system and infrastructure, and the national security. Noting recent pronouncements by the World Health Organization (WHO) and the Centers for Disease Control and Prevention (CDC) for the novel coronavirus outbreak, including the categorization by WHO of COVID-19 as a pandemic on March 11, 2020, and to assist in preventing the introduction, transmission, and spread of this communicable disease globally and in the United States, DHS, in coordination with CDC and other Federal, state and local agencies charged with protecting the American public, is implementing enhanced protocols to ensure that all travelers seeking to enter the United States with recent travel from, or who were otherwise recently present within, the United Kingdom, excluding overseas territories outside of Europe, or the Republic of Ireland are provided appropriate public health services.
The enhanced arrival protocols concerning travelers with recent travel from, or who were otherwise recently present within, the People's Republic of China, excluding the Special Administrative Regions of Hong Kong and Macau, identified in the documents published at 85 FR 6044 on February 4, 2020 and 85 FR 7214 on February 7, 2020, also remain in place, except that flights are permitted to land at two additional airports pursuant to the notification posted on the
Enhanced traveler arrival protocols are part of a layered approach used with other public health measures already in place to detect arriving travelers who are exhibiting overt signs of illness. Additional measures include requiring carriers to distribute a Centers for Disease Control and Prevention (CDC) health declaration form to passengers on flights originating in the People's Republic of China, excluding the Special Administrative Regions of Hong Kong and Macau, the Islamic Republic of Iran, specified countries in the Schengen Area, the United Kingdom (excluding overseas territories outside Europe), and the Republic of Ireland to support CDC passenger health screening and contact tracing. U.S. Government Representatives will collect this form from passengers upon arrival in the United States. Other measures to protect the public include reporting ill travelers identified by carriers during travel to appropriate public health officials for evaluation, and referring ill travelers arriving at a U.S. port of entry by CBP to appropriate public health officials in order to slow and prevent the introduction into, and transmission and
To ensure that travelers with recent presence in the United Kingdom, excluding overseas territories outside of Europe, or the Republic of Ireland are screened appropriately, DHS directs that all flights to the United States carrying persons who have recently traveled from, or were otherwise present within, the United Kingdom, excluding overseas territories outside of Europe, or the Republic of Ireland arrive at airports where enhanced public health services and protocols have been implemented. Although DHS will continue to work with carriers to ensure that they identify potential persons who traveled from, or who have otherwise recently been present within, the affected areas prior to boarding, carriers shall comply with the requirements of this document in all cases, including when such persons are identified after boarding but prior to takeoff.
On Friday, January 31, 2020, DHS posted a document on the
As with actions related to the People's Republic of China, the Islamic Republic of Iran and the countries of the Schengen Area, DHS anticipates that airlines will be able to fully support implementation of these arrival restrictions.
Pursuant to 19 U.S.C. 1433(c), 19 CFR 122.32, 49 U.S.C. 114, and 49 CFR 1544.305 and 1546.105, DHS has the authority to limit the locations where all flights entering the U.S. from abroad may land. Under this authority and effective for flights departing after 11:59 p.m. Eastern Daylight Time on Monday, March 16, 2020, I hereby direct all operators of aircraft to ensure that all flights carrying persons who have recently traveled from, or were otherwise present within, the United Kingdom, excluding overseas territories outside of Europe, or the Republic of Ireland only land at one of the following airports:
• John F. Kennedy International Airport (JFK), New York;
• Chicago O'Hare International Airport (ORD), Illinois;
• San Francisco International Airport (SFO), California;
• Seattle-Tacoma International Airport (SEA), Washington;
• Daniel K. Inouye International Airport (HNL), Hawaii;
• Los Angeles International Airport, (LAX), California;
• Hartsfield-Jackson Atlanta International Airport (ATL), Georgia;
• Washington-Dulles International Airport (IAD), Virginia;
• Newark Liberty International Airport (EWR), New Jersey;
• Dallas/Fort Worth International Airport (DFW), Texas;
• Detroit Metropolitan Airport (DTW), Michigan;
• Boston Logan International Airport (BOS), Massachusetts; and
• Miami International Airport (MIA), Florida.
This direction considers a person to have recently traveled from, or otherwise been present within, the United Kingdom, excluding overseas territories outside of Europe, or the Republic of Ireland if that person departed from, or was otherwise present within, the United Kingdom, excluding overseas territories outside of Europe, or the Republic of Ireland within 14 days of the date of the person's entry or attempted entry into the United States.
For purposes of this document, crew and flights carrying only cargo (
This direction is subject to any changes to the airport landing destination that may be required for aircraft and/or airspace safety, as directed by the Federal Aviation Administration.
This list of affected airports may be modified by the Secretary of Homeland Security, in consultation with the Secretary of Health and Human Services and the Secretary of Transportation. This list of affected airports may be modified by an updated publication in the
For purposes of this
The Acting Secretary of DHS, Chad F. Wolf, having reviewed and approved this document, is delegating the authority to electronically sign this document to Christina E. McDonald, who is the Federal Register Liaison for DHS, for purposes of publication in the
Bureau of the Fiscal Service, Treasury.
Final rule.
The Department of the Treasury, Bureau of the Fiscal Service (Fiscal Service or “we”) is adopting the changes proposed in its Notice of Proposed Rulemaking (NPRM) for its regulation governing the use of the Automated Clearing House (ACH) Network by Federal agencies. Our regulation adopts, with some exceptions, the NACHA Operating Rules developed by NACHA—The Electronic Payments Association (now known as Nacha), as the rules governing the use of the ACH Network by Federal agencies. We are issuing this final rule to address changes that Nacha has made to the NACHA Operating Rules since the publication of the 2016 NACHA Operating Rules & Guidelines book. These changes include amendments set forth in the 2017, 2018, and 2019
Effective April 20, 2020. The incorporation by reference of certain publications listed in the rule is approved by the Director of the Federal Register as of April 20, 2020.
You can download this final rule at the following internet address:
Ian Macoy, Director of Settlement Services, at (202) 874-6835 or
On January 3, 2020, we published a Notice of Proposed Rulemaking at 85 FR 265, requesting comment on proposed amendments to 31 CFR part 210 (Part 210), which governs the use of the ACH Network by Federal agencies. The ACH Network is a nationwide electronic fund transfer system that provides for the inter-bank clearing of electronic credit and debit transactions and for the exchange of payment-related information among participating financial institutions. Rights and obligations among participants in the ACH Network are governed by the NACHA Operating Rules, which Part 210 incorporates by reference, with certain exceptions. From time to time, the Fiscal Service amends Part 210 in order to address changes that Nacha periodically makes to the NACHA Operating Rules or to revise the regulation as otherwise appropriate.
In 2017, Part 210 incorporated the NACHA Operating Rules as set forth in the 2016 NACHA Operating Rules & Guidelines book. Nacha has adopted a number of changes to the NACHA Operating Rules since the publication of the 2016 NACHA Operating Rules & Guidelines book. We are incorporating most, but not all, of the rule changes that Nacha adopted in 2017 and 2018, as set forth in the 2019 NACHA Operating Rules & Guidelines book (2019 Rule Book). We are also adopting one change to Part 210, related to reclamations, that does not stem from a change to the NACHA Operating Rules, and several non-substantive changes to reflect the renumbering of certain NACHA rules and appendices.
We are adopting as final all of the amendments proposed in the NPRM.
Fiscal Service sought public comment on the proposed rule to assist the agency in giving full consideration to the matters discussed in the proposed rule. We received comments from two organizations, Nacha and the Independent Community Bankers of America (ICBA), and two individuals, though one of the individual's comment did not discuss the proposed rule and is therefore not addressed. Both Nacha and ICBA supported the proposed adoption of the NACHA Rules as set forth in the 2019 NACHA Operating Rules & Guidelines, as well as our proposed change to the provision related to actual or constructive notice of death. We appreciate Nacha's and ICBA's support of the changes and Fiscal Service's efforts to embrace the ACH operating rules.
ICBA, Nacha and one individual commenter also supported Fiscal Service's proposed adoption of The Supplementing Fraud Detection Standards for WEB Debits rule, though both ICBA and Nacha urged Fiscal Service to adopt the rule by Nacha's effective date of March 19, 2021. The Supplementing Fraud Detection Standards for WEB Debits rule will require originators of WEB debit entries to perform account validation before originating a WEB debit to an account for the first time and upon a change to an account number receiving WEB debit entries. Fraud prevention is a top priority of Fiscal Service and we will be actively working toward implementing account validation for agency originated WEB debits. However, government-wide implementation is not feasible by the March 2021 deadline. Implementing this change affects multiple systems and requires substantial lead time and additional financial resources. We expect some of our systems will be compliant by Nacha's deadline but know that government-wide compliance will not be possible by March 2021. Therefore, Fiscal Service is delaying the effective date of this rule to March 19, 2022.
One individual commenter opposed the increase, for Same Day ACH eligibility, of the maximum per-entry amount from the current $25,000 to $100,000 (Same Day ACH Dollar Limit Increase) as potentially contributing to greater exposure to losses from fraud or error. However, we would note that other ACH entries (generally next-day or future-day settlement) already have a much higher, system-imposed limit of $99,999,999.99. Further, the ACH Network and Part 210 provide parties return rights in the event that fraud or an error in the valuation of an entry has occurred. We view the benefits of the Same Day ACH Dollar Limit Increase to parties paying or receiving funds from the federal government, together with existing protections inherent to the government's use of the ACH Network, as exceeding any marginal increase in risk resulting from a higher Same Day ACH entry limit. Accordingly, we are adopting the increase in the Same Day ACH Dollar Limit to $100,000.
In 2017 Nacha adopted a new rule, the Third-Party Sender Rule, which requires every Originating Depository Financial Institution (ODFI) either to register its Third-Party Sender customers with Nacha or to provide Nacha with a statement that it has no such customers. The rule, which became effective on September 29, 2017, establishes deadlines for the initial provision and updating of registration information, and provides that Nacha may request from an ODFI certain additional information regarding a Third-Party Sender.
A Third-Party Sender is a type of third-party service provider that acts as an intermediary in transmitting entries between an Originator and an ODFI. Federal agencies and Fiscal Service do not utilize Third-Party Senders. Although Fiscal Service uses fiscal and financial agents (Federal Reserve Banks and certain chartered depository financial institutions, respectively) in its ACH payments and collections operations, those entities are not providing services in a capacity as Third-Party Senders. Accordingly, the rule will not affect the Federal government. We are incorporating in Part 210 the Third-Party Sender Rule.
Nacha did not publish any new rules in the 2018 Rules Book. The 2018 Rule Book contains revisions related to the implementation of Phase 2 of Same Day ACH, which we adopted in 2017 (See 82 FR 42597), and the Third-Party Sender Rule discussed in Section A above.
The 2019 Rules Book contains changes related to the following amendments:
• Faster Funds Availability;
• Same Day ACH Dollar Limit Increase; and
• New Same Day ACH Processing Window.
In the Final Rule we are adopting all three of these amendments to the 2019 Rules Book in Part 210, as follows:
The Faster Funds Availability rule will provide faster funds availability for many ACH credits. Funds from Same Day ACH credits processed in the first Same Day processing window will be made available to the Receiver for withdrawal by 1:30 p.m., Receiving Depository Financial Institution (RDFI) local time. Funds from all non-Same Day ACH credits that are made available to the RDFI by 5:00 p.m., RDFI local time, on the banking day before Settlement Date will be available to the Receiver for withdrawal by 9:00 a.m., RDFI local time, on Settlement Date.
Previously, funds from non-Same Day ACH credits were required to be made available to the Receiver for withdrawal by the end of the Settlement Date, which could be at any hour before the RDFI's close of business or by the end of day at an ATM. One exception was for Prearranged Payment and Deposit (PPD) credits made available to the RDFI by 5:00 p.m., RDFI local time, on the banking day before Settlement Date. The RDFI was required to provide funds availability for these credits by the opening of business on Settlement Date. This exception is now the standard practice for any ACH credit made available to the RDFI by 5:00 p.m., RDFI local time, on the banking day before Settlement Date. This rule change also establishes a firm time of 9:00 a.m., RDFI local time, for such availability and eliminates references to “opening of business.”
Receivers will have earlier funds availability for a large portion of ACH credits:
• Funds from non-Same Day ACH credits made available to the RDFI by 5:00 p.m., RDFI local time, on the banking day before settlement will be available to the Receiver for withdrawal on Settlement Date by 9:00 a.m., RDFI local time;
• Funds from Same Day credits received in the first Same Day ACH processing window will be available to the Receiver for withdrawal by 1:30 p.m., RDFI local time; and
• Funds from Same Day credits received in the second Same Day ACH processing window will be available to the Receiver for withdrawal by 5:00 p.m., RDFI local time.
This NACHA rule became effective on September 20, 2019. We are accepting this amendment. Because the government is not a depository institution, the rule will not affect the government's receipt of ACH payments, but will mean that some recipients of government Same Day and non-Same Day ACH payments will have earlier access to their funds from their financial institutions.
The Same Day ACH Dollar Limit Increase rule will increase the per-transaction dollar limit for Same Day transactions from $25,000 to $100,000. At implementation, both Same Day ACH credits and Same Day ACH debits will be eligible for Same Day processing up to $100,000 per transaction. Nacha's rule is effective on March 20, 2020.
We are accepting this rule, which will enable individuals and entities to make Same Day ACH payments of up to $100,000 to the government, and will enable Federal agencies to make Same Day ACH payments of up to $100,000.
The New Same Day ACH Processing Window rule will create a new processing window that will enable ODFIs and their customers to originate Same Day transactions for an additional two hours each banking day. The new window will allow Same Day ACH files to be submitted to the ACH Operators until 4:45 p.m. ET. RDFIs will receive files from this third window by 5:30 p.m. ET, with interbank settlement occurring at 6:00 p.m. ET. RDFIs will need to make funds available for credits processed in the new window by the end of their processing for that Settlement Date. All credits and debits, and all returns, will be eligible to be processed in the new Same Day ACH window, with the exception of International ACH Transactions (IATs), Automated Enrollment Entries (ENRs), and forward entries in excess of the per-transaction dollar limit.
Currently, ODFIs can submit Same Day ACH files to the ACH Operators until 2:45 p.m. ET. ODFI processing arrangements that use payment processors and correspondent institutions have earlier deadlines. ACH end-users may have even earlier deadlines to submit Same Day ACH files to their ODFIs. These timing requirements can make it impractical for many ODFIs to offer, or for ACH end-users to adopt, Same Day ACH payments. Adding a third, later Same Day ACH processing window will provide greater access for all ODFIs and their customers.
Nacha's rule is effective on March 19, 2021. We are accepting this rule, which will give more individuals and entities the opportunity to pay the government by Same Day ACH. It will also make it possible for the government to originate Same Day ACH payments later in the day than is currently possible.
On November 2, 2018, the NACHA Voting Membership approved nine amendments to the NACHA Operating Rules. Because the nine amendments were approved just prior to publication of the 2019 Rules Book, the amendments are included in the rule book as a separate supplement rather than within the main body of the publication.
Before adoption of this amendment, an RDFI could return an ACH entry for any reason, except as otherwise provided in Article Three, Subsection 3.8.1 (Restrictions on RDFI's Right to Transmit Return Entries) of the NACHA Operating Rules. Defined return reasons included, among others, entries that were deemed unauthorized by the Receiver or those with an invalid account number or no account at the RDFI. If an RDFI wanted to return an entry that did not have a valid account number and appeared to be questionable, suspicious, or anomalous in some way, the RDFI did not have a defined return reason code to communicate this information to the ODFI and Originator. NACHA guidance allowed RDFIs to use reason code R17 to return questionable transactions that would otherwise be returned using a standard administrative return reason (R03—No Account/Unable to Locate Account or R04—Invalid Account Number Structure). However, none of these options enabled an ODFI or its Originator to differentiate questionable transactions from other routine account number errors.
Under the Return for Questionable Transaction rule, RDFIs are able (but not required) to use Return Reason Code R17—File Record Edit Criteria to indicate that the RDFI believes the entry containing invalid account information was initiated under questionable circumstances. This use of R17 is optional at the discretion of the RDFI. Those RDFIs that elect to use R17 for this purpose are required to use the description “QUESTIONABLE' in the Addenda Information field of the return. This description in an R17 return
This rule became effective on June 21, 2019. We are accepting this amendment, which may give agencies greater insight into transactions that are returned because they are suspicious or questionable.
Under existing rules, Originators of internet-initiated (WEB) debit entries must use a “commercially reasonable fraudulent transaction detection system” to screen WEB debits for fraud. This requirement is intended to help prevent fraudulent payments from being introduced into the ACH Network, and to help protect RDFIs from posting fraudulent or otherwise incorrect or unauthorized payments.
With the implementation of the Supplementing Fraud Detection Standards for WEB Debits rule, the current screening requirement will be enhanced to make it explicit that “account validation” is part of a “commercially reasonable fraudulent transaction detection system.” The supplemental requirement applies to the first use of an account number, or changes to the account number. For existing WEB debit authorizations, the rule will be effective on a going-forward basis. Originators will have to perform account validations as there are updates to account numbers in existing authorizations.
NACHA's rule is effective on March 19, 2021. We are accepting this rule, which can be expected to reduce unauthorized debits originated by agencies and resulting fraud losses to the government. However, the implementation of account validation will be costly for the government due to the need for systems changes, program changes at originating Federal agencies, and transactional fees for validation services incurred for the origination of WEB debits. Acceptance of the rule will result in significant additional costs to the government in the origination of WEB debits but could also have the unintended consequence of providing an incentive for agencies to encourage or restrict the public to use payment methods other than ACH that represent lower cost to the government or offer greater transaction certainty at a comparable cost. Given the anticipated costs of implementation, we are delaying the effective date of our acceptance of this NACHA rule change to March 19, 2022. We will work toward implementing this rule in the next two years and expect several of our systems to comply prior to the 2022 date.
The existing ACH Security Framework requires Financial Institutions, Originators, Third-Party Service Providers, and Third-Party Senders to establish, implement and update security policies, procedures and systems related to the initiation, processing and storage of ACH entries. These policies, procedures, and systems must protect the confidentiality and integrity of protected information; protect against anticipated threats or hazards to the security or integrity of Protected Information; and protect against unauthorized use of Protected Information that could result in substantial harm to a natural person.
The Supplementing Data Security Requirements rule expands the existing ACH Security Framework to explicitly require large, non-financial institution Originators, Third-Party Service Providers, and Third-Party Senders to protect account numbers used in the initiation of ACH entries by rendering them unreadable when stored electronically. The rule aligns with existing language contained in Payment Card Industry (PCI) requirements, thus industry participants are expected to be reasonably familiar with the manner and intent of the requirement.
The rule applies only to account numbers collected for or used in ACH transactions and does not apply to the storage of paper authorizations. The rule also does not apply to depository financial institutions when acting as internal Originators, as they are covered by existing Federal Financial Institutions Examination Council (FFIEC) and similar data security requirements and regulations.
The amendment has a phased implementation period, with the following effective dates:
• Phase 1: NACHA Operating Rules language is effective on June 30, 2020. Any Originator, Third-Party Service Provider, or Third-Party Sender that originates six million or more ACH transactions in calendar year 2019 will need to be compliant by June 30, 2020.
• Phase 2: NACHA Operating Rules language will become effective on June 30, 2021. Any Originator, Third-Party Service Provider, or Third-Party Sender that originates two million or more ACH transactions in calendar year 2020 will need to be compliant by June 30, 2021.
Going forward after calendar year 2020, any Originator, Third-Party Service Provider, or Third-Party Sender that originates two million or more ACH transactions in any calendar year will need to be compliant with the rule by June 30 of the following calendar year.
Fiscal Service supports the expansion of existing security requirements to require large non-financial institution Originators to protect account numbers used to initiate ACH transactions by rendering them unreadable while stored electronically. We are accepting this amendment.
Effective January 1, 2019 Nacha consolidated all requirements for an annual rules compliance audit within one section of the NACHA Operating Rules. Prior to the rule change, the general obligation for Participating Depository Financial Institutions (and certain Third-Party Service Providers and Third-Party Senders) to conduct an audit was located within Article One, Section 1.2.2 (Audits of Rules Compliance). However, the details pertaining to that audit obligation were separately located within Appendix Eight (Rules Compliance Audit Requirements). This amendment retained and combined the core audit obligation with the general administrative requirements for completion of such an audit into Article One of the NACHA Operating Rules.
Under current 31 CFR 210.2(d), the rule enforcement and compliance audit requirements are not applicable to Federal agencies. We are therefore not adopting this amendment.
These amendments change five specific areas of the NACHA Operating Rules to address minor issues. Minor changes to the NACHA Operating Rules have little-to-no impact on ACH participants and no significant economic impact. NACHA's minor rule amendments became effective on January 1, 2019.
The ACH Operator Edits amendment modifies edit criteria to permit ACH Operators to “pend” files as an alternative to rejecting files under various error conditions, primarily related to duplicate file detection. The rule incorporates language to clarify that ACH Operator edits defined within Appendix Two of the NACHA Operating Rules represent minimum standards required by the NACHA Operating Rules, and that additional edits can be adopted by each ACH Operator as part of its service agreement with its customers.
We are accepting this amendment.
This amendment clarifies that the general rules governing the form of authorization for all consumer debits apply to the authorization of TEL entries, including the obligation to include revocation language. Only Accounts Receivable (ARC), Back Office Conversion (BOC), Point-of-Purchase (POP), and Re-presented Check (RCK) entries are explicitly exempted from the requirement to include revocation language in the authorization. The Clarification of TEL Authorization Requirements rule also incorporates a reference that TEL entries are consumer debits only, consistent with the language for other consumer debits.
We are accepting this amendment.
This rule change reflects pre-existing practices regarding circumstances under which an RDFI is, or is not, obligated to return a credit entry that has been declined by a Receiver. The Clarification of RDFI Obligation to Return Credit Entry Declined by Receiver rule expressly identifies specific conditions under which the RDFI is excused from its obligation to return a credit:
The rule change also modifies the rule language to refer to an entry being “declined” (rather than “refused”) by the Receiver.
We are accepting this amendment.
This amendment is an editorial change to the language of the general rule on Reinitiated Entries to clarify the intent of the Rules that reinitiation is limited to two times.
We are accepting this amendment.
This amendment contains editorial changes regarding conditions under which an RDFI may return a Reclamation Entry or reject a Written Demand for Payment. These changes also clarify that an RDFI may reject a Written Demand for Payment only if it was not properly originated by the ODFI.
We are accepting this amendment.
On April 12, 2019, NACHA Voting Membership approved Ballot #1-2019: Differentiating Unauthorized Return Reasons. The rule repurposes an existing, little-used return reason code (R11) that will be used when a receiving customer claims that there was an error with an otherwise authorized payment. Currently, return reason code R10 is used as a catch-all for various types of underlying unauthorized return reasons, including some for which a valid authorization exists, such as a debit on the wrong date or for the wrong amount. In these types of cases, a return of the debit still should be made, but the Originator and its customer (the Receiver) might both benefit from a correction of the error rather than the termination of the origination authorization. The use of a distinct return reason code (R11) enables a return that conveys this new meaning of “error” rather than “no authorization.”
The rule becomes effective in two phases. On April 1, 2020, the re-purposed return code becomes effective, and financial institutions will use it for its new purpose. A year later, on April 1, 2021, the re-purposed return code will become covered by the existing Unauthorized Entry Fee.
We are accepting this amendment.
31 CFR part 210 subpart B governs the reclamation of post-death Federal benefit payments from financial institutions. Under Subpart B, both agencies and RDFIs have obligations, rights and liabilities that are triggered by actual or constructive knowledge of the death or incapacity of a recipient or death of a beneficiary.
Fiscal Service is revising the definition of “actual or constructive knowledge of death” at 31 CFR 210.2(b) to apply the definition to agencies as well as RDFIs. In addition, we are adding a sentence to the definition to address a specific situation that has arisen in recent years in which agencies sometimes stop recurring payments to a recipient and, many months or years after stopping the payments, initiate a reclamation. As revised, § 210.2(b) requires an agency that stops certifying recurring payments to a recipient because it has reason to believe that the recipient is deceased to investigate and determine whether to initiate a reclamation within 120 days following the first missed payment date. An agency may receive information or otherwise have reason to believe that a recipient is deceased before it takes action to stop payments. However, we believe that the first missed recurring payment date preceding the initiation of a reclamation is the most apparent indicator that the agency has information of a recipient's death that is sufficiently reliable to warrant stopping payments. Accordingly, the phrase “the time [the agency] stops certifying recurring payments to a recipient” refers to the first missed payment date.
The language would not generally apply to or affect situations in which agencies stop payments due to fraud or loss of entitlement because in most of those cases agencies would not be initiating a reclamation. In addition, the language would not generally affect situations in which an agency stops payments due to a mistaken belief that the recipient was deceased, because those payments would be reinitiated upon discovery of the mistake. Moreover, in the event that an agency initiates a reclamation more than 120 days after stopping payments and can prove that it stopped payments for a reason other than actual or constructive knowledge of death, the agency can present evidence to rebut the presumption of knowledge, in which case the 120-day deadline would not be triggered by the date the agency stopped payments.
Agencies have indicated that sometimes they have difficulty obtaining definitive proof of death (
In order to incorporate in Part 210 the NACHA Operating Rule changes that we are accepting, we are replacing references to the 2016 NACHA Rules & Guidelines book with references to the 2019 NACHA Operating Rules & Guidelines book. The NACHA Operating Rule amendment that we are not incorporating is a modification to the audit compliance provisions of the NACHA Operating Rules, which are already excluded under Part 210. Other than replacing the references to the 2016 NACHA Operating Rules & Guidelines book, no change to Part 210 is necessary to exclude this amendment.
We are amending the definition of “actual or constructive knowledge” in order to clarify that the definition applies to agencies as well as to RDFIs. We are also adding a sentence to the definition to address situations in which agencies stop recurring payments to a recipient and subsequently initiate a reclamation. Under the revised definition, an agency is presumed to have constructive knowledge of death or incapacity at the time it stops certifying recurring payments to a recipient if the agency (1) does not re-initiate payments to the recipient and (2) subsequently initiates a reclamation for one or more payments made to the recipient. The presumption created under the definition is rebuttable in cases where an agency can demonstrate that it stopped certifying recurring payments to a recipient for a reason other than death.
We are amending the definition of “applicable ACH Rules” at § 210.2(d) by replacing the reference to NACHA's 2016 Operating Rules & Guidelines with a reference to the ACH Rules with an effective date on or before June 30, 2021, as published in “2019 NACHA Operating Rules & Guidelines.” We are deleting the reference to Appendix Ten in subparagraph (1) because Appendix Eight is being removed in its entirety from the 2019 Rules Book, and Appendices Nine and Ten are being renumbered as Appendices Eight and Nine, respectively. We are deleting existing paragraph (7), which relates to the government's original adoption of Same Day ACH in 2017, because it was in effect only until September 15, 2017, and is now obsolete. We are adding a new paragraph (7), which exempts the government from the Fraud Detection Standards for WEB debits until March 19, 2022.
We are amending § 210.3(b) by replacing the references to the 2016 NACHA Operating Rules & Guidelines with references to a 2019 NACHA Operating Rules & Guidelines.
We are amending paragraph (g) by replacing the reference to the 2016 NACHA Operating Rules & Guidelines with a reference to a 2019 NACHA Operating Rules & Guidelines.
We are amending § 210.10(b) to state that an agency is presumed to have constructive knowledge of death or incapacity at the time it stops certifying recurring payments to a recipient if the agency (1) does not re-initiate payments to the recipient and (2) subsequently initiates a reclamation for one or more payments made to the recipient.
The 2019 NACHA Operating Rules & Guidelines are incorporated by reference into Part 210 with the approval of the Director of the Federal Register under 5 U.S.C. 552(a) and 1 CFR part 51. The Office of Federal Register (OFR) regulations require that agencies discuss in the preamble of a final rule ways that the materials the agency proposes to incorporate by reference are reasonably available to interested parties or how it worked to make those materials reasonably available to interested parties. In addition, the preamble of the final rule must summarize the material. 1 CFR 51.5(a). In accordance with OFR's requirements, the discussion in the Supplementary Information section summarizes the 2019 NACHA Operating Rules. Financial institutions utilizing the ACH Network are bound by the NACHA Operating Rules and have access to the NACHA Operating Rules in the course of their everyday business. All approved material is available as a bound book or in online form from NACHA, 2550 Wasser Terrace, Suite 400, Herndon, Virginia 20171, tel. 703-561-1100,
The final rule does not meet the criteria for a “significant regulatory action” as defined in Executive Order 12866. Therefore, the regulatory review procedures contained therein do not apply.
It is hereby certified that the final rule will not have a significant economic impact on a substantial number of small entities. The final rule imposes on the Federal government a number of changes that Nacha has already adopted and imposed on private sector entities that utilize the ACH Network. The final rule does not impose any additional burdens, costs or impacts on any private sector entities, including any small entities. Accordingly, a regulatory flexibility analysis under the Regulatory Flexibility Act (5 U.S.C. 601
Section 202 of the Unfunded Mandates Reform Act of 1995, 2 U.S.C. 1532 (Unfunded Mandates Act), requires that the agency prepare a budgetary impact statement before promulgating any rule likely to result in a Federal mandate that may result in the expenditure by State, local, and tribal governments, in the aggregate, or by the private sector, of $100 million or more in any one year. If a budgetary impact statement is required, section 205 of the Unfunded Mandates Act also requires the agency to identify and consider a reasonable number of regulatory alternatives before promulgating the rule. We have determined that the final rule will not result in expenditures by State, local, and tribal governments, in the aggregate, or by the private sector, of $100 million or more in any one year. Accordingly, we have not prepared a budgetary impact statement or specifically addressed any regulatory alternatives.
Automated Clearing House, Electronic funds transfer, Financial institutions, Fraud, Incorporation by reference.
5 U.S.C. 5525; 12 U.S.C. 391; 31 U.S.C. 321, 3301, 3302, 3321, 3332, 3335, and 3720.
(b)
(1) Does not re-initiate payments to the recipient; and
(2) Subsequently initiates a reclamation for one or more payments made to the recipient.
(d)
(1) Subsections 1.2.2, 1.2.3, 1.2.4, 1.2.5 and 1.2.6; Appendix Seven; Appendix Eight; and Appendix Nine (governing the enforcement of the ACH Rules and claims for compensation);
(2) Section 2.10 and section 3.6 (governing the reclamation of benefit payments);
(3) The requirement in Appendix Three that the Effective Entry Date of a credit entry be no more than two Banking Days following the date of processing by the Originating ACH Operator (see definition of “Effective Entry Date” in Appendix Three);
(4) Section 2.2 (setting forth ODFI obligations to enter into agreements with, and perform risk management relating to, Originators and Third-Party Senders) and section 1.6 (Security Requirements);
(5) Section 2.17.2.2-2.17.2.6 (requiring reduction of high rates of entries returned as unauthorized);
(6) The requirements of Section 2.5.8 (International ACH Transactions) shall not apply to entries representing the payment of a Federal tax obligation by a taxpayer; and
(7) Until March 19, 2022, the requirement of section 2.5.17.4(a) that the Originator utilize a fraudulent transaction detection system that validates an account to be debited for the first use of such account number and for any subsequent change(s) to the account number.
(b)
(1) NACHA, 2550 Wasser Terrace, Suite 400, Herndon, Virginia 20171, tel. 703-561-1100,
(i) 2019 NACHA Operating Rules & Guidelines: The Guide to the Rules Governing the ACH Network, copyright 2019 (2019 NACHA Operating Rules and Guidelines).
(ii) [Reserved]
(2) [Reserved]
(g)
(b)
(1) Does not re-initiate payments to the recipient; and
(2) Subsequently initiates a reclamation for one or more payments made to the recipient.
Coast Guard, DHS.
Final rule.
The Coast Guard is adjusting an existing moving safety zone for San Juan Harbor, San Juan, Puerto Rico. This action is necessary to better meet the safety and security needs of San Juan Harbor. This regulation would continue to prohibit persons and vessels from entering the safety zone, unless authorized by the Captain of the Port San Juan or a designated representative.
This rule is effective April 20, 2020.
To view documents mentioned in this preamble as being available in the docket, go to
If you have questions on this rule, call or email Lieutenant Commander Pedro Mendoza, Sector San Juan Prevention Department, Waterways Management Division, U.S. Coast Guard; telephone
The existing regulation in 33 CFR 165.754, contains a moving safety zone around transiting liquefied petroleum gas (LPG) carriers en route to, or departing from, the Gulf Refinery Oil dock or the Cataño Oil dock. On December 12, 2017, the Coast Guard received a request to assess the waterway suitability of transiting and semi-permanently moored liquefied natural gas (LNG) carriers within the San Juan Harbor. On September 26, 2018, the Coast Guard determined the Port of San Juan could accommodate the safe navigation and mooring of LNG carriers within the San Juan Harbor. On July 18, 2019, a Notice was published in the
While the Coast Guard completed the rulemaking process for revising the existing safety zone regulation contained in § 165.754, we published two temporary final rules (TFR) in the
On December 17, 2019, a notice of proposed rulemaking (NPRM) entitled, “Safety Zone; San Juan Harbor, San Juan, PR” was published in the
The Coast Guard is issuing this rule under authority in 46 U.S.C. 70034 (previously 33 U.S.C. 1231). Due to their cargoes, size, draft, and the local channel restrictions, LNG carriers must use of the center of navigation channels for safe transit. The COTP San Juan has determined that potential hazards associated with LNG carriers would be a safety concern for anyone within an area of one half mile during their transit and a 50-yard radius while moored. The purpose of this rulemaking is to ensure the safety of vessels and the navigable waters within one half mile during the transit of LG carriers through San Juan Harbor and a 50-yard radius while the LG carriers are moored at Puma Energy dock, Cataño Oil dock, or Wharf B. This rule will safeguard vessels at an adjacent berthing location, Puerto Nuevo Berth B, which supplies LNG to the Puerto Rico Electric Power Authority (PREPA) and other industrial sectors.
As noted above, we received five written submissions in response to the public meetings that were held on July 26, 2019. A discussion of the comments and responses follows.
Three commenters raised questions about the frequency of LNG carriers and if there would be any limitations in place. Although, these questions are outside of the scope of this proposed rulemaking, New Fortress Energy advised they anticipate one LNG carrier to arrive every three days and that each ship-to-ship transfer would take around 18 hours. The gas would then be loaded to trucks to be delivered to another primary or secondary power source. The rule does not set a limit on the number of LNG carriers/ships that will be allowed to transit through the bay. Also, the rule does not set limit on the time the LNG carrier/ship will be moored in the docks/wharfs.
Three commenters asked questions specific about the facility's operations that may affect neighboring waterfront facilities. These comments are outside of the scope of this rule, which is specific to the adjustment of the existing San Juan Harbor Safety Zone (33 CFR 165.754).
One commenter asked about safety concerns and whether safety precautions would be established to mitigate these concerns. New Fortress Energy will be required to meet all the regulations in 33 CFR part 127 Subparts A and B for Waterfront Facilities Handling Liquefied Natural Gas and Liquefied Hazardous Gas.
Four commenters raised concerns about the lack of access to information about the proposed LNG safety zone impeded meaningful public participation in the administrative proceeding and the due process that the Coast Guard must afford the citizenry, particularly residents who live within the potential impact zone of the proposed LNG operation. The commenters required access to the file, including the Letter of Intent (LOI), Water Suitability Assessment (WSA) and Report, and other documents. Prior to the public meetings that were held on July 26, 2019, the NPRM for the adjustments to the existing San Juan Harbor Safety Zone in § 165.754 were still under review. Comments collected at the July 26, 2019 meetings were used to make further revisions to the NPRM that was eventually published in the
Two commenters raised concerns about community awareness regarding the construction of the new LNG facility. Although this comment is outside of the scope of this rulemaking, the adjacent regulated waterfront facilities were made aware of the new facility prior to its construction.
Two commenters asked questions about the rulemaking process and if customary procedures were followed. The rulemaking process can vary and in this case the NPRM was made available to the public on December 17, 2019.
Three commenters asked if there would be additional public hearings after the hearings that were held on July 26, 2019. On July 26, 2019, we hosted two public meetings alongside New Fortress Energy in San Juan, PR. Approximately 50 attendees were present and approximately 20 attendees had questions that were addressed at the public meeting. Although protests were occurring around that time, we do not believe they had any impact on attendance at the meetings. Prior to the public meetings, the NPRM for the adjustments to the San Juan Harbor Safety Zone was still under review. Comments collected at the July 26, 2019 meeting were used to develop the NPRM. We also provided a 30 day comment period on the proposed rule; however no additional comments were received. Therefore, we have decided to not schedule any additional hearings regarding this rulemaking.
Two commenters asked about potential changes in operations of the bay. The new LNG facility at Wharf B expects to receive one carrier every three days with ship-to-ship transfer operations lasting approximately 18 hours in duration. We do not anticipate this would significantly affect current port operations or navigation. Neighboring facilities would be able to safely continue operations when an Liquified Gas (LG) carrier is transiting, moored, or engaged in transfer operations.
One commenter asked about the project cost. This question was outside of the scope of this rulemaking.
One commenter asked if any environmental assessments or impact statements were completed. A preliminary environmental assessment was conducted during the NPRM stage.
Two commenters asked if there were other LNG facilities requesting safety zones. The Coast Guard has not received any other requests from LNG facilities for the creation of new safety zones associated with their operations.
There are no changes in the regulatory text of this rule from the proposed rule in the NPRM.
We developed this rule after considering numerous statutes and Executive orders related to rulemaking. Below we summarize our analyses based on a number of these statutes and Executive orders, and we discuss First Amendment rights of protestors.
Executive Orders 12866 and 13563 direct agencies to assess the costs and benefits of available regulatory alternatives and, if regulation is necessary, to select regulatory approaches that maximize net benefits. Executive Order 13771 directs agencies to control regulatory costs through a budgeting process. This rule has not been designated a “significant regulatory action,” under Executive Order 12866. Accordingly, this rule has not been reviewed by the Office of Management and Budget (OMB), and pursuant to OMB guidance it is exempt from the requirements of Executive Order 13771.
This regulatory action determination is based on the size, available exceptions to the enforcement of the safety zone, and notice to mariners. The regulated area will impact small designated areas of navigable channels within San Juan Harbor. The rule will allow vessels to seek permission to enter, transit through, anchor in, or remain within the safety zone. Additionally, notifications to the marine community will be made through Local Notice to Mariners, Broadcast Notice to Mariners via VHF-FM marine channel 16, and on-scene representatives. The notifications will allow the public to plan operations around the affected areas.
The Regulatory Flexibility Act of 1980, 5 U.S.C. 601-612, as amended, requires Federal agencies to consider the potential impact of regulations on small entities during rulemaking. The term “small entities” comprises small businesses, not-for-profit organizations that are independently owned and operated and are not dominant in their fields, and governmental jurisdictions with populations of less than 50,000. The Coast Guard did not receive any comments from the Small Business Administration on this rulemaking. The Coast Guard certifies under 5 U.S.C. 605(b) that this rule will not have a significant economic impact on a substantial number of small entities.
While some owners or operators of vessels intending to transit the safety zone may be small entities, for the reasons stated in section V.A above, this rule will not have a significant economic impact on any vessel owner or operator.
Under section 213(a) of the Small Business Regulatory Enforcement Fairness Act of 1996 (Pub. L. 104-121), we want to assist small entities in understanding this rule. If the rule would affect your small business, organization, or governmental jurisdiction and you have questions concerning its provisions or options for compliance, please call or email the person listed in the
Small businesses may send comments on the actions of Federal employees who enforce, or otherwise determine compliance with, Federal regulations to the Small Business and Agriculture Regulatory Enforcement Ombudsman and the Regional Small Business Regulatory Fairness Boards. The Ombudsman evaluates these actions annually and rates each agency's responsiveness to small business. If you wish to comment on actions by employees of the Coast Guard, call 1-888-REG-FAIR (1-888-734-3247). The Coast Guard will not retaliate against small entities that question or complain about this rule or any policy or action of the Coast Guard.
This rule will not call for a new collection of information under the Paperwork Reduction Act of 1995 (44 U.S.C. 3501-3520).
A rule has implications for federalism under Executive Order 13132, Federalism, if it has a substantial direct effect on the States, on the relationship between the National Government and the States, or on the distribution of power and responsibilities among the various levels of government. We have analyzed this rule under that Order and have determined that it is consistent with the fundamental federalism principles and preemption requirements described in Executive Order 13132.
Also, this rule does not have tribal implications under Executive Order 13175, Consultation and Coordination with Indian Tribal Governments, because it does not have a substantial direct effect on one or more Indian
The Unfunded Mandates Reform Act of 1995 (2 U.S.C. 1531-1538) requires Federal agencies to assess the effects of their discretionary regulatory actions. In particular, the Act addresses actions that may result in the expenditure by a State, local, or tribal government, in the aggregate, or by the private sector of $100,000,000 (adjusted for inflation) or more in any one year. Though this rule will not result in such an expenditure, we do discuss the effects of this rule elsewhere in this preamble.
We have analyzed this rule under Department of Homeland Security Directive 023-01, Rev. 1, associated implementing instructions, and Environmental Planning COMDTINST 5090.1 (series), which guide the Coast Guard in complying with the National Environmental Policy Act of 1969 (42 U.S.C. 4321-4370f), and have determined that this action is one of a category of actions that do not individually or cumulatively have a significant effect on the human environment. This rule involves involves a safety zone that would establish a 50-yard radius around transiting and moored liquefied gas carriers. Normally such actions are categorically excluded from further review under paragraph L60(a) of Appendix A, Table 1 of DHS Instruction Manual 023-01-001-01, Rev. 1. A Record of Environmental Consideration supporting this determination is available in the docket. For instructions on locating the docket, see the
The Coast Guard respects the First Amendment rights of protesters. Protesters are asked to call or email the person listed in the
Harbors, Marine safety, Navigation (water), Reporting and recordkeeping requirements, Security measures, Waterways.
For the reasons discussed in the preamble, the Coast Guard amends 33 CFR part 165 as follows:
46 U.S.C. 70034, 70051; 33 CFR 1.05-1, 6.04-1, 6.04-6, and 160.5; Department of Homeland Security Delegation No. 0170.1.
(a)
(1) The waters around liquefied gas (LG) carriers entering San Juan Harbor in an area one half mile around each vessel, beginning one mile north of the Bahia de San Juan Lighted Buoy #3, in approximate position 18°28′17.8″ N, 066°07′36.4″ W and continuing until the vessel is moored at the Puma Energy dock, Cataño Oil dock, or Wharf B in approximate position 18°25′47″ N, 066°6′32″ W. All coordinates are North American Datum 1983.
(2) The waters around LG carriers in a 50-yard radius around each vessel when moored at the Puma Energy dock, Cataño Oil dock, or Wharf B.
(3) The waters around LG carriers departing San Juan Harbor in an area one half mile around each vessel beginning at the Puma Energy Dock, Cataño Oil dock, or Wharf B in approximate position 18°25′47″ N, 066°6′32″ W when the vessel gets underway, and continuing until the stern passes the Bahia de San Juan Lighted Buoy #3, in approximate position 18°28′17.8″ N, 066°07′36.4″ W. All coordinates referenced use datum: NAD 83.
(b)
(2) Persons desiring to transit the area of the safety zones may contact the COTP San Juan or his designated representative to seek permission to transit the area. If permission is granted, all persons and vessels must comply with the instructions of the COTP or his designated representative.
(3) Vessels encountering emergencies, which require transit through the moving safety zone, should contact the Coast Guard patrol craft or Duty Officer on VHF Channel 16. In the event of an emergency, the Coast Guard patrol craft may authorize a vessel to transit through the safety zone with a Coast Guard designated escort.
(4) The Captain of the Port and the Duty Officer at Sector San Juan, Puerto Rico, can be contacted at telephone number 787-289-2041. The Coast Guard Patrol Commander enforcing the safety zone can be contacted on VHF-FM channels 16 and 22A.
(5) Coast Guard Sector San Juan will, when necessary and practicable, notify the maritime community of periods during which the safety zones will be in effect by providing advance notice of scheduled arrivals and departure of liquefied gas carriers via a Marine Broadcast Notice to Mariners.
(6) All persons and vessels must comply with the instructions of on-scene patrol personnel. On-scene patrol personnel include commissioned, warrant, or petty officers of the U.S. Coast Guard. Coast Guard Auxiliary and local or state officials may be present to inform vessel operators of the requirements of this section, and other applicable laws.
Coast Guard, DHS.
Temporary final rule.
The Coast Guard is establishing a temporary safety zone on the navigable waters of San Francisco Bay surrounding the cruise ship GRAND PRINCESS due to the presence of at least 21 people onboard reportedly testing positive for COVID-19. Federal, state, and local health officials have determined that the vessel presents a risk of spreading communicable disease within the United States. Based on this information, this safety zone is necessary to protect personnel from potential safety hazards onboard the cruise ship GRAND PRINCESS. Unauthorized persons or vessels are
This temporary final rule is effective without actual notice from March 19, 2020 through 12:59 p.m. on April 15, 2020. For the purposes of enforcement, actual notice will be used from 11 a.m. March 15, 2020 through March 19, 2020.
To view documents mentioned in this preamble as being available in the docket, go to
If you have questions on this rule, call or email Lieutenant Emily Rowan, U.S. Coast Guard Sector San Francisco; telephone (415) 399-7443, email
The Coast Guard is issuing this temporary rule without prior notice and opportunity to comment pursuant to authority under section 4(a) of the Administrative Procedure Act (APA) (5 U.S.C. 553(b)). This provision authorizes an agency to issue a rule without prior notice and opportunity to comment when the agency for good cause finds that those procedures are “impracticable, unnecessary, or contrary to the public interest.” Under 5 U.S.C. 553(b)(B), the Coast Guard finds that good cause exists for not publishing a notice of proposed rulemaking with respect to this rule because it is impracticable. The Coast Guard received notice of the need for this safety zone on March 8, 2020. It is impracticable to go through the full rulemaking process, including providing a reasonable comment period and considering those comments, because the Coast Guard must establish this temporary safety zone by March 15, 2020.
The Coast Guard previously issued an emergency temporary final rule for a safety zone effective from March 8, 2020 at 12 p.m. until March 15, 2020 at 11 a.m. (Docket number USCG-2019-0166). Federal, state, and local health officials have indicated that the risk of spreading communicable disease within the United States posed by the presence of at least 21 people onboard the GRAND PRINCESS reportedly testing positive for COVID-19 will continue beyond March 15, 2020.
Under 5 U.S.C. 553(d)(3), the Coast Guard finds that good cause exists for making this rule effective less than 30 days after publication in the
The Coast Guard is issuing this rule under authority 46 U.S.C. 70034. The Captain of the Port San Francisco has determined that potential communicable disease hazards associated with the GRAND PRINCESS transiting into and remaining in the San Francisco Bay, starting on March 8, 2020, will be a safety concern for anyone within a 500-yard radius of the cruise ship while it is underway, and within a 100-yard radius of the cruise ship while it is anchored or moored. This rule is needed to protect personnel and vessels in the navigable waters surrounding the cruise ship.
This rule establishes a temporary safety zone around the cruise ship GRAND PRINCESS from 11 a.m. on March 15, 2020 through 11:59 p.m. on April 15, 2020. The safety zone will encompass the navigable waters of San Francisco Bay and areas shoreward of the line drawn between San Francisco Main Ship Channel Lighted Bell Buoy 7 and San Francisco Main Ship Channel Lighted Whistle Buoy 8 (LLNR 4190 & 4195) in positions 37°46.9′ N, 122°35.4′ W and 37°46.5′ N, 122°35.2′ W, respectively, from surface to bottom, within the area 500 yards ahead, astern and extending along either side of the GRAND PRINCESS while the vessel is underway, and within the area 100 yards ahead, astern and extending along either side of the GRAND PRINCESS while it is anchored or moored.
This regulation is needed to keep persons and vessels away from the immediate vicinity of the cruise ship to ensure the safety of personnel and vessels. Except for persons or vessels authorized by the COTP or the COTP's designated representative, no person or vessel may enter or remain in the restricted area. A “designated representative” means a Coast Guard Patrol Commander, including a Coast Guard coxswain, petty officer, or other officer operating a Coast Guard vessel or a Federal, State, or local officer designated by or assisting the COTP in the enforcement of the safety zone.
We developed this rule after considering numerous statutes and executive orders related to rulemaking. Below we summarize our analyses based on a number of these statutes and Executive orders, and we discuss First Amendment rights of protestors.
Executive Orders 12866 and 13563 direct agencies to assess the costs and benefits of available regulatory alternatives and, if regulation is necessary, to select regulatory approaches that maximize net benefits. Executive Order 13771 directs agencies to control regulatory costs through a budgeting process. This rule has not been designated a “significant regulatory action,” under Executive Order 12866. Accordingly, this rule has not been reviewed by the Office of Management and Budget (OMB), and pursuant to OMB guidance it is exempt from the requirements of Executive Order 13771.
This regulatory action determination is based on the limited duration and narrowly tailored geographic area of the safety zone. Although this rule restricts access to the water encompassed by the safety zone, the effect of this rule will not be significant because the local waterway users will be notified to ensure the safety zone will result in minimum impact. Additionally, the vessels desiring to transit through or around the temporary safety zone may do so upon express permission from the COTP or the COTP's designated representative.
The Regulatory Flexibility Act of 1980, 5 U.S.C. 601-612, as amended, requires federal agencies to consider the potential impact of regulations on small entities during rulemaking. The term “small entities” comprises small businesses, not-for-profit organizations that are independently owned and operated and are not dominant in their fields, and governmental jurisdictions with populations of less than 50,000. The Coast Guard certifies under 5 U.S.C. 605(b) that this rule will not have a significant economic impact on a substantial number of small entities.
While some owners or operators of vessels intending to transit the temporary safety zone may be small entities, for the reasons stated in section V.A. above, this rule will not have a significant economic impact on any vessel owner or operator.
Under section 213(a) of the Small Business Regulatory Enforcement Fairness Act of 1996 (Pub. L. 104-121), we want to assist small entities in understanding this rule. If the rule would affect your small business, organization, or governmental jurisdiction and you have questions concerning its provisions or options for compliance, please contact the person listed in the
Small businesses may send comments on the actions of Federal employees who enforce, or otherwise determine compliance with, Federal regulations to the Small Business and Agriculture Regulatory Enforcement Ombudsman and the Regional Small Business Regulatory Fairness Boards. The Ombudsman evaluates these actions annually and rates each agency's responsiveness to small business. If you wish to comment on actions by employees of the Coast Guard, call 1-888-REG-FAIR (1-888-734-3247). The Coast Guard will not retaliate against small entities that question or complain about this rule or any policy or action of the Coast Guard.
This rule will not call for a new collection of information under the Paperwork Reduction Act of 1995 (44 U.S.C. 3501-3520).
A rule has implications for federalism under Executive Order 13132, Federalism, if it has a substantial direct effect on the States, on the relationship between the national government and the States, or on the distribution of power and responsibilities among the various levels of government. We have analyzed this rule under that Order and have determined that it is consistent with the fundamental federalism principles and preemption requirements described in Executive Order 13132.
Also, this rule does not have tribal implications under Executive Order 13175, Consultation and Coordination with Indian Tribal Governments, because it does not have a substantial direct effect on one or more Indian tribes, on the relationship between the Federal Government and Indian tribes, or on the distribution of power and responsibilities between the Federal Government and Indian tribes. If you believe this rule has implications for federalism or Indian tribes, please contact the person listed in the
The Unfunded Mandates Reform Act of 1995 (2 U.S.C. 1531-1538) requires Federal agencies to assess the effects of their discretionary regulatory actions. In particular, the Act addresses actions that may result in the expenditure by a State, local, or tribal government, in the aggregate, or by the private sector of $100,000,000 (adjusted for inflation) or more in any one year. Though this rule will not result in such an expenditure, we do discuss the effects of this rule elsewhere in this preamble.
We have analyzed this rule under Department of Homeland Security Directive 023-01 and U.S. Coast Guard Environmental Planning Policy, COMDTINST 5090.1 (series), which guide the Coast Guard in complying with the National Environmental Policy Act of 1969 (42 U.S.C. 4321-4370f), and have determined that this action is one of a category of actions that do not individually or cumulatively have a significant effect on the human environment. This rule involves a safety zone established to deal with an emergency situation that will prohibit entry to the area surrounding the cruise ship GRAND PRINCESS, which has at least 21 people onboard who have tested positive for COVID-19. It is categorically excluded from further review under paragraph L60(a) in Table 3-1 of Department of Homeland Security Directive 023-01. A Record of Environmental Consideration supporting this determination is available in the docket where indicated under
The Coast Guard respects the First Amendment rights of protesters. Protesters are asked to contact the person listed in the
Harbors, Marine safety, Navigation (water), Reporting and recordkeeping requirements, Security measures, Waterways.
For the reasons discussed in the preamble, the Coast Guard amends 33 CFR part 165 as follows:
46 U.S.C 70034, 70051; 33 CFR 1.05-1, 6.04-1, 6.04-6, and 160.5; Department of Homeland Security Delegation No. 0170.1.
(a)
(b)
(c)
(2) The safety zone is closed to all vessel traffic, except as may be permitted by the COTP or the COTP's designated representative.
(3) Vessel operators desiring to enter or operate within the safety zone must contact the COTP or the COTP's designated representative to obtain permission to do so. Vessel operators given permission to enter or operate in the safety zone must comply with all lawful orders or directions given to them by the COTP or the COTP's designated representative. Persons and vessels may request permission to enter the safety zone on VHF-23A or through
(d)
(e)
Coast Guard, DHS.
Temporary final rule.
The Coast Guard is establishing an emergency temporary safety zone for all navigable waters of the Cumberland River extending from mile marker (MM) 182 to MM 194 near Nashville, TN. This emergency safety zone is needed to protect life, vessels, and the marine environment due to damage caused by a tornado near Nashville, TN. Entry of vessels or persons into this zone is prohibited unless specifically authorized by the Captain of the Port Sector Ohio Valley (COTP) or a designated representative.
This rule is effective without actual notice from March 19, 2020 until April 2, 2020 or until the hazards have been mitigated. For the purposes of enforcement, actual notice will be used from March 3, 2020 until March 19, 2020.
To view documents mentioned in this preamble as being available in the docket, go to
If you have questions on this rule, call or email Petty Officer Riley Jackson, Sector Ohio Valley, U.S. Coast Guard; telephone 502-779-5347, email
The Coast Guard is issuing this temporary rule without prior notice and opportunity to comment pursuant to authority under section 4(a) of the Administrative Procedure Act (APA) (5 U.S.C. 553(b)). This provision authorizes an agency to issue a rule without prior notice and opportunity to comment when the agency for good cause finds that those procedures are “impracticable, unnecessary, or contrary to the public interest.” Under 5 U.S.C. 553(b)(B), the Coast Guard finds that good cause exists for not publishing a Notice of Proposed Rulemaking (NPRM) with respect to this rule because it is impracticable and contrary to the public interest. On March 3, 2020, a tornado near MM 190 caused significant damage to the waterway near Nashville, TN. The safety zone must be established immediately to protect people and vessels near the impacted portion of the waterway, and we lack sufficient time to provide a reasonable comment period and then consider those comments before issuing the rule. This safety zone may include closures and/or navigation restrictions and requirements that are vital to maintaining safe navigation on the Cumberland River. Therefore, delaying the effective date for this emergency safety zone to complete the NPRM process would also be contrary to the public interest as it would delay the safety measures vital to safe navigation.
Under 5 U.S.C. 553(d)(3), the Coast Guard finds that good cause exists for making this rule effective less than 30 days after publication in the
The Coast Guard is issuing this rule under authority in 46 U.S.C. 70034 (previously 33 U.S.C. 1231). The Captain of the Port Sector Ohio Valley (COTP) has determined that due to the damage from the tornado, there will be a safety concern for anyone within mile marker (MM) 182 to MM 194 on the Cumberland River. This rule is needed to protect personnel, vessels, and the marine environment in the navigable waters within the safety zone while damage assessments are conducted.
The Coast Guard is establishing a temporary emergency safety zone for all navigable waters on the Cumberland River from Mile Marker (MM) 182 to MM 194, extending the entire width of the Cumberland River. Transit into and through this area is prohibited for all traffic beginning March 3, 2020 and will continue through April 2, 2020 or until the hazard has been mitigated. The COTP will terminate the enforcement of this safety zone before April 2, 2020 if the hazards to the waterway have been mitigated. Entry into this safety zone is prohibited unless specifically authorized by the COTP or his designated representative. A designated representative is a commissioned, warrant, or petty officer of the U.S. Coast Guard assigned to units under the operational control of USCG Sector Ohio Valley.
Requests for entry will be considered and reviewed on a case-by-case basis. The COTP may be contacted by telephone at 502-779-5422 or can be reached by VHF-FM channel 16. Persons and vessels permitted to enter this safety zone must transit at their slowest safe speed and comply with all lawful directions issued by the COTP or the designated representative.
We developed this rule after considering numerous statutes and Executive orders related to rulemaking. Below we summarize our analyses based on a number of these statutes and Executive orders, and we discuss First Amendment rights of protestors.
Executive Orders 12866 and 13563 direct agencies to assess the costs and benefits of available regulatory alternatives and, if regulation is necessary, to select regulatory approaches that maximize net benefits. Executive Order 13771 directs agencies to control regulatory costs through a budgeting process. This rule has not been designated a “significant regulatory action,” under Executive Order 12866. Accordingly, this rule has not been reviewed by the Office of Management and Budget (OMB), and
This regulatory action determination is based on the size, location, duration, and time-of-year of the safety zone. This safety zone will restrict vessel traffic from entering or transiting within a 12.0 mile area of navigable waterways on the Cumberland River between MMs 182 and 194. Moreover, the Coast Guard will issue Broadcast Notice to Mariners via VHF-FM marine channel 16 about the zone, and the rule allows vessels to seek permission to enter the zone.
The Regulatory Flexibility Act of 1980, 5 U.S.C. 601-612, as amended, requires Federal agencies to consider the potential impact of regulations on small entities during rulemaking. The term “small entities” comprises small businesses, not-for-profit organizations that are independently owned and operated and are not dominant in their fields, and governmental jurisdictions with populations of less than 50,000. The Coast Guard certifies under 5 U.S.C. 605(b) that this rule will not have a significant economic impact on a substantial number of small entities.
While some owners or operators of vessels intending to transit the safety zone may be small entities, for the reasons stated in section V.A above, this rule will not have a significant economic impact on any vessel owner or operator.
Under section 213(a) of the Small Business Regulatory Enforcement Fairness Act of 1996 (Pub. L. 104-121), we want to assist small entities in understanding this rule. If the rule would affect your small business, organization, or governmental jurisdiction and you have questions concerning its provisions or options for compliance, please contact the person listed in the
Small businesses may send comments on the actions of Federal employees who enforce, or otherwise determine compliance with, Federal regulations to the Small Business and Agriculture Regulatory Enforcement Ombudsman and the Regional Small Business Regulatory Fairness Boards. The Ombudsman evaluates these actions annually and rates each agency's responsiveness to small business. If you wish to comment on actions by employees of the Coast Guard, call 1-888-REG-FAIR (1-888-734-3247). The Coast Guard will not retaliate against small entities that question or complain about this rule or any policy or action of the Coast Guard.
This rule will not call for a new collection of information under the Paperwork Reduction Act of 1995 (44 U.S.C. 3501-3520).
A rule has implications for federalism under Executive Order 13132, Federalism, if it has a substantial direct effect on the States, on the relationship between the national government and the States, or on the distribution of power and responsibilities among the various levels of government. We have analyzed this rule under that Order and have determined that it is consistent with the fundamental federalism principles and preemption requirements described in Executive Order 13132.
Also, this rule does not have tribal implications under Executive Order 13175, Consultation and Coordination with Indian Tribal Governments, because it does not have a substantial direct effect on one or more Indian tribes, on the relationship between the Federal Government and Indian tribes, or on the distribution of power and responsibilities between the Federal Government and Indian tribes.
The Unfunded Mandates Reform Act of 1995 (2 U.S.C. 1531-1538) requires Federal agencies to assess the effects of their discretionary regulatory actions. In particular, the Act addresses actions that may result in the expenditure by a State, local, or tribal government, in the aggregate, or by the private sector of $100,000,000 (adjusted for inflation) or more in any one year. Though this rule will not result in such an expenditure, we do discuss the effects of this rule elsewhere in this preamble.
We have analyzed this rule under Department of Homeland Security Directive 023-01, Rev. 1, associated implementing instructions, and Environmental Planning COMDTINST 5090.1 (series), which guides the Coast Guard in complying with the National Environmental Policy Act of 1969 (42 U.S.C. 4321-4370f), and have determined that this action is one of a category of actions that do not individually or cumulatively have a significant effect on the human environment. This rule involves a safety zone lasting 24 hours a day, for 30 days, that will prohibit entry into a 12-mile stretch of the Cumberland River. This rule is categorically excluded from further review under paragraph L60(d) in Table 3-1 of U.S. Coast Guard Environmental Planning Implementing Procedures. A Record of Environmental Consideration supporting this determination is available in the docket. For instructions on locating the docket, see the
The Coast Guard respects the First Amendment rights of protesters. Protesters are asked to contact the person listed in the
Harbors, Marine safety, Navigation (water), Reporting and recordkeeping requirements, Security measures, Waterways.
For the reasons discussed in the preamble, the Coast Guard amends 33 CFR part 165 as follows:
46 U.S.C. 70034, 70051; 33 CFR 1.05-1, 6.04-1, 6.04-6, and 160.5; Department of Homeland Security Delegation No. 0170.1.
(a)
(b)
(c)
(2) Vessels requiring entry into this safety zone must request permission from the COTP or a designated representative. To seek entry into the safety zone, contact the COTP or the
(3) Persons and vessels permitted to enter this safety zone must transit at their slowest safe speed and comply with all lawful directions issued by the COTP or the designated representative.
(d)
Environmental Protection Agency (EPA).
Final rule.
The Environmental Protection Agency (EPA) amends the Federal Implementation Plan (FIP) for Managing Air Emissions from True Minor Sources in Indian Country in the Oil and Natural Gas Production and Natural Gas Processing Segments of the Oil and Natural Gas Sector (National O&NG FIP) and the Federal Minor New Source Review (NSR) Program in Indian Country. This final rule allows for concurrent, rather than sequential, submission of two sets of documents: the Part 1 Registration Form for source registration (Part 1 Form) and documentation of completion of the screening procedures (screening procedures documentation) for the evaluation of potential impacts of proposed projects on threatened or endangered species and historic properties (protected resources). The final rule also clarifies the 30-day period before construction may begin, and the potential forms of certain written notification by the EPA Regional Office to source owner/operators. Finally, this final rule includes minor edits to correct certain erroneous citations and cross references.
This final rule is effective on May 18, 2020.
The EPA has established a docket for this action, identified by Docket ID No. EPA-HQ-OAR-2014-0606. All documents in the docket are listed in the
For further information concerning this action, please contact Ben Garwood, U.S. EPA, Office of Air Quality Planning and Standards, Air Quality Policy Division, Mail Code C504-03, 109 T.W. Alexander Drive, Research Triangle Park, NC 27709; by telephone at (919) 541-1358 or by email at
• EPA Region 5 (Illinois, Indiana, Michigan, Minnesota, Ohio and Wisconsin)—Ms. Genevieve Damico, Air Permits Section, Environmental Protection Agency, Region 5, Chicago, Illinois 60604; telephone (312) 353-4761; fax (312) 385-5501; email address:
• EPA Region 6 (Arkansas, Louisiana, New Mexico, Oklahoma and Texas)—Ms. Bonnie Braganza, Air Permits Section, Multimedia Permitting and Planning Division, Environmental Protection Agency Region 6, Dallas, Texas 75202; telephone number (214) 665-7340; fax number (214) 665-6762; email address:
• EPA Region 8 (Colorado, Montana, North Dakota, South Dakota, Utah and Wyoming)—Ms. Claudia Smith, Air Program, Mail Code 8P-AR, Environmental Protection Agency Region 8, Denver, Colorado 80202; telephone number (303) 312-6520; fax number (303) 312-6520; email address:
• EPA Region 9 (Arizona, California, Hawaii, Nevada and Pacific Islands)—Ms. Lisa Beckham, Permits Office, Air Division, Air-3, Environmental Protection Agency Region 9, San Francisco, California 94105; telephone number (415) 972-3811; fax number (415) 947-3579; email address:
• All other EPA regions—For further information about minor sources in Indian country for your EPA region, please use to the Tribal New Source Review website at
Throughout this document wherever “we,” “us,” or “our” is used, we mean the EPA.
To authorize construction or modification of certain stationary sources under the Federal Minor NSR Program in Indian Country,
The EPA also proposed other minor changes, including the following: Clarification that the EPA, under the National O&NG FIP, may provide written notification relating to its evaluation of the screening procedures documentation not just by mail, but also by email; and clarification that the Federal Minor NSR Program in Indian Country only requires that the Part 1 Form be submitted at least 30 days before consruction begins, not exactly 30 days before construction begins. The EPA also proposed correcting a typographical error in a citation in the National O&NG FIP; changing certain references in the National O&NG FIP from “Reviewing Authority” to “EPA Regional Office;” and making minor edits, in the Federal Minor NSR Program in Indian Country, to enhance clarity and readability of a provision relating to the Part 2 Registration Form. The EPA received no adverse comments concerning these minor, clarifying or correcting changes and, in this final rule, the EPA is finalizing those changes, substantially as proposed. The EPA does not anticipate the final rule changes will result in any increase in environmental impact(s) or cost increase(s) for the tribes, reviewing authorities or the regulated community.
A total of 20 comments
As to the comments relating to minor source applications and the EPA's review of such applications, sources covered by the National O&NG FIP ordinarily are not required to submit site-specific permit applications, but are required to register and comply with various stated requirements and emissions standards. There is no application, as such, for the EPA to review and the limited amendments here make no change to this basic framework. With respect to the ESA/National Historic Preservation Act (NHPA) screening procedures, the National O&NG FIP continues to require review of the adequacy of the screening procedures documentation. Both in the prior National O&NG FIP, and the FIP as amended by this action, construction may not begin until the EPA provides written notification of adequate completion of the screening procedures.
This action revises existing rules to streamline the administrative process for sources covered by the National O&NG FIP by allowing the the Part 1 Form to be submitted to the EPA at the same time as the screening procedures documentation. It does not remove any of the prior rules' environmental or procedural protections. The EPA believes that this final action will not have potential disproportionately high and adverse human health or environmental effects on minority, low-income, or indigenous populations.
This action is not a significant regulatory action and was, therefore, not submitted to the Office of Management and Budget (OMB) for review.
This action is expected to be an Executive Order 13771 deregulatory action. This rule is expected to provide meaningful burden reduction by potentially reducing the waiting time before certain true minor new and modified oil and natural gas sources can begin construction.
This action does not impose any new information collection burden under the PRA. OMB has previously approved the information collection activities contained in the Federal Minor NSR Program in Indian country rule and has assigned OMB control number 2060-0003.
I certify that this action will not have a significant economic impact on a substantial number of small entities under the RFA. In making this determination, the impact of concern is any significant adverse economic impact on small entities. An agency may certify that a rule will not have a significant economic impact on a substantial number of small entities if the rule relieves regulatory burden, has no net burden or otherwise has a positive economic effect on the small entities subject to the rule. This action merely modifies the timing to allow required documentation to be submitted at an earlier point in the regulatory process. The EPA analyzed the impact on small entities of streamlined permitting resulting from this rule and determined that it would not have a significant economic impact on a substantial number of small entities. We have therefore concluded that this action will have no net regulatory burden for all directly regulated small entities.
This action does not contain any unfunded mandates, as described in UMRA, 2 U.S.C. 1531-1538, and does not significantly or uniquely affect small governments. The action imposes no enforceable duty on any state, local, or tribal government or the private sector. In material part, it simply modifies the permissible time-frame for submission of otherwise required forms to streamline the National O&NG FIP and Federal Minor NSR Program in Indian country.
This action does not have federalism implications. It would not have substantial direct effects on the states, on the relationship between the
This action may have tribal implications. However, it will neither impose substantial direct compliance costs on federally recognized tribal governments, nor preempt tribal law. Consistent with the EPA Policy on Consultation and Coordination with Indian Tribes (May 4, 2011),
This action is not subject to Executive Order 13045 because it is not economically significant as defined in Executive Order 12866, and because the EPA does not believe the environmental health or safety risks addressed by this action present a disproportionate risk to children.
This action is not subject to Executive Order 13211, because it is not a significant regulatory action under Executive Order 12866.
This action does not involve technical standards.
The EPA believes this action does not have potential disproportionately high and adverse human health or environmental effects on minority, low-income or indigenous populations. Through this amendment, we seek to further streamline the process for true minor sources in the oil and natural gas sector in areas covered by the Federal Minor NSR Program in Indian country. This action does not remove any of the prior rules' environmental or procedural protections.
This rule is exempt from the CRA because it is a rule of agency organization, procedure or practice that does not substantially affect the rights or obligations of non-agency parties.
Under section 307(b)(1) of the CAA, petitions for review of this final action must be filed in the U.S. Court of Appeals for the appropriate circuit within 60 days from the date this final action is published in the
Environmental protection, Administrative practices and procedures, Air pollution control, Indians, Indians—law, Indians—tribal government, Intergovernmental relations, Reporting and recordkeeping requirements.
For the reasons set forth in the preamble, 40 CFR part 49 is to be amended as follows:
42 U.S.C. 7401,
(a)
(2)
(i) Within 30 days of receipt of your documentation, by written notification to you, the EPA Regional Office must provide one of the following determinations:
(B) The documentation is not adequate, and additional information is needed. If the initial submittal is deficient, the EPA Regional Office will note any such deficiencies and may offer further direction on completing the screening procedures. Once you have addressed the noted deficiencies, you must resubmit your revised screening procedure documentation for review. An additional 15-day review notification period will be used for the EPA Regional Office to determine whether the listed species and/or historic property screening procedures have been satisfied. If the EPA Regional Office makes such a determination, it will send you written notification stating that conclusion.
(ii) You must obtain written notification from the EPA Regional Office indicating that the source has adequately completed the screening procedures. The EPA Regional Office may send written notification by mail, email, or any other written means of notification. You may not begin
(A) At least 30 days has passed from the date the Part 1 Registration Form was submitted; and
(B) The EPA Regional Office has provided this notification.
(c) * * *
(1) * * *
(iv) Minor sources complying with §§ 49.101 through 49.105 for the oil and natural gas production and natural gas processing segments of the oil and natural gas sector, as defined in § 49.102, must submit, at least 30 days prior to beginning construction
The combination of the Part 1 and Part 2 Registration Forms submittals satisfies the requirements in paragraph (c)(2) of this section. These forms are submitted to the EPA instead of the application form required in paragraph (c)(1)(iii) of this section. The forms are available at:
Federal Communications Commission.
Final rule.
In this document, the Federal Communications Commission (Commission) modifies a requirement for submarine cable licensees to report outages to the Commission. This Order on Reconsideration addresses two petitions submitted and refocuses the reporting requirements to capture significant disruptions to submarine cable communications, including outages with national security implications.
Effective April 20, 2020. The final rule amending 47 CFR 4.1, published August 8, 2016, at 81 FR 52362, is effective April 20, 2020. Compliance will not be required for 47 CFR 4.15 until the Commission publishes a document in the
The complete text of this document is available for inspection and copying during normal business hours in the FCC Reference Information Center, Portals II, 445 12th Street SW, Room CY-A257, Washington, DC 20554, or at the following internet address:
For further information, contact Brenda D. Villanueva, Attorney-Advisor, Cybersecurity and Communications Reliability Division, Public Safety and Homeland Security Bureau, (202) 418-7005 or via email at
This is a summary of the Commission's Order on Reconsideration, FCC 19-138, adopted on December 20, 2019, and released on December 27, 2019. To request materials in accessible formats for people with disabilities (Braille, large print, electronic files, audio format), send an email to
1. In the Submarine Cable Outage Reporting Order (Order) 81 FR 52354 (Aug. 8, 2016), the Commission mandated reporting obligations for certain disruptions of submarine cable communications. The Commission uses outage reporting primarily to aid government-wide incident response, public safety and national security efforts, and the analysis of network reliability trends. Two associations representing submarine cable providers, the North American Submarine Cable Association (NASCA) and the Submarine Cable Coalition (SCC), separately petitioned the Commission to reconsider certain aspects of the Order.
2. This Order on Reconsideration reexamines and amends certain aspects of the required reporting of submarine cable infrastructure outages to better conform them to their expected uses. In doing so, we seek to preserve the benefits while minimizing the costs and administrative burdens of reporting by refocusing the submarine cable outage rules on significant disruptions to submarine cable communications and those outages that have national security implications.
3. Historically, the Commission employed a voluntary reporting regime for submarine cables through the Undersea Cable Information System (UCIS). That system provides a web portal for licensees to submit information about submarine cable operational status, including outages, on an ad hoc basis, 80 FR 67689 (Nov. 3, 2015). In contrast, communications providers covered by the Commission's mandatory reporting rules report outages through the Network Outage Reporting System (NORS), a web-based filing system that uses an electronic template to promote ease of reporting and encryption technology to ensure the security of the information filed.
4. In 2016, the Commission observed that UCIS was largely ineffective, failed to provide visibility into the operational status of the majority of submarine cables, and failed to collect data in a uniform or timely manner necessary for the Commission's purposes. Accordingly, the Commission in the Submarine Cable Outage Reporting Order, 81 FR 52354 (Aug. 8, 2016) established mandatory reporting for submarine cables through NORS and decided to retire the Undersea Cable Information System. As the Order noted, “[t]he operational status of submarine cables carries commercial, economic, social, financial, and national security implications.”
5. The Order defines a submarine cable “outage” as “a failure or significant degradation in the performance of a licensee's cable service, regardless of whether the traffic can be re-routed to an alternate path.” The Order requires submarine cable licensees to report outages that last more than 30 minutes, or that implicate the loss of any fiber pair for four hours or more. The Order requires that licensees submit such outage reports as a “Notification” within eight hours of a licensee's determination that there has
6. Two entities, the North American Submarine Cable Coalition (NASCA) and the Submarine Cable Coalition (SCC) (collectively, Petitioners), filed separate timely Petitions for Reconsideration (“Petitions”), requesting that the Commission reconsider certain aspects of the Order. The Petitions requested that the Commission: (1) Clarify an inconsistency in the definition of an outage between the narrative text of the Order and the Final Rules; (2) exclude outages due to planned maintenance from the scope of the rules; (3) grant licensees more than six months for compliance following OMB approval of the information collection; (4) exclude outages that involve rerouted traffic from the scope of the rules; and (5) raise the minimum duration for a reportable outage from 30 minutes. NASCA further requested that the Commission give licensees more than eight hours to file the Notification, which is the first filing required. Finally, Petitioners disputed the cost-benefit analysis that the Commission conducted in adopting the Order and the rules.
7. NASCA further filed a late supplement to its Petition, accompanied by a motion requesting that the Commission accept the supplement. In the supplement, NASCA asserted that the Commission should rescind the prospective submarine cable outage reporting rules altogether because of its view that (1) it is too difficult for submarine cable licensees to determine whether an outage impacts customer communications and connectivity; (2) the passage of time has shown few reportable outages in general; (3) the outage reporting obligations are duplicative of NORS reporting and Department of Homeland Security regulatory mechanisms; and (4) the Order's cost-benefit analysis is deficient.
8. The Commission sought comment on these petitions on October 31, 2016. The public had 15 days to file oppositions to the Petitions and then ten days to reply to those oppositions. Latam Telecommunications was the only entity that responded to the Public Notice, and it supported both Petitions.
9. Refocusing our efforts on the substantial submarine cable communications disruptions, where the benefits of our reporting regime will be most meaningful, we now refine the reporting rules adopted in the Order. In this Order on Reconsideration, we grant in part and deny in part the requests in the Petitions. Specifically, we narrow the scope of reportable outages to reduce the potential for reporting of mundane events and to ease reporting obligations on affected entities for outages involving planned maintenance that is announced to customers. We also clarify the definition of “outage” in our rules to reconcile an inconsistency with the intent of the Order, and we address the substantial savings in compliance costs afforded by these changes. However, we decline to further extend the time before the obligations become effective, to extend the time after discovering a reportable outage that a licensee must submit a Notification, to exclude from the reporting obligation all outages that are mitigated by rerouting, or to raise the minimum duration for a reportable outage. In addition, we deny NASCA's request to rescind the submarine cable outage reporting rules altogether.
10. Before considering the merits, we first address a procedural issue. In general, the Commission will not consider a supplement filed after the 30-day period, 47 CFR 1.429(d). Although NASCA filed its Supplement outside the 30-day period normally required, the Supplement raised new facts “[b]ased on NASCA members' experience in preparing to implement the Commission's prospective rules,” over a 12-month period. Specifically, NASCA determined that, contrary to statements in its petition, “an outage definition based on customer impact is unworkable.” In light of this changed circumstance, we find that it is in the public interest to consider the NASCA Supplement and its statements about how our new submarine cable outage reporting rules would work in practice. Accordingly, the Commission will grant leave to file based on NASCA's separate pleading stating the grounds for acceptance of the supplement.
11. The Order requires submarine cable licensees experiencing an outage of greater than 30 minutes on a portion of a submarine cable system between submarine line terminal equipment (SLTE), or greater than four hours affecting a fiber pair, to report the outage to the Commission, including when an outage is caused by planned maintenance. The Order reasoned that planned maintenance outages nevertheless affect the submarine cable ecosystem and that planned maintenance outages are covered by the part 4 reporting requirements for other types of facilities. The Order stated that there is “no unique, compelling reason that would cause the Commission to depart from its past part 4 practice of requiring reports on planned maintenance events that meet the reporting triggers.”
12. In view of the record before us, we grant in part Petitioners' request that the Commission exclude planned maintenance from the outage reporting requirements. Because submarine cable outage reporting is partly motivated by national security concerns and partly by impact to customers, and not planned service disruptions, we deem it reasonable to exclude outages that result from planned maintenance as follows. In recognition that many submarine cable operators already notify customers (including national security agencies running traffic over a provider's cable) well in advance of routine maintenance, we grant this exemption on the condition that submarine cable operators continue to provide such advance notification to customers in these circumstances.
13. When submarine cable operators provide advance notification to customers of planned outages, the reporting obligation is revised such that it will be limited to planned outages where (1) service is affected for an additional period of time that exceeds the announced scope of the planned maintenance, and (2) this additional period of time, standing alone, would otherwise trigger the outage reporting requirements. The Submarine Cable Coalition states that “multiple submarine cable operators already notify customers (including national security agencies running traffic over a provider's cable) well in advance of routine maintenance.” In other words, we modify the rules so that reporting for planned outages is necessary only if no advance notification to a customer is provided, or, if the planned maintenance event turns into an unplanned outage in which the duration of the unplanned portion is sufficient in and of itself to trigger the outage reporting threshold. For example, the Submarine Cable Coalition describes a situation in which a shunt fault may
14. We believe that this refinement to our rules more accurately reflects the realities of submarine cable system operations, by acknowledging that planned outages are “a routine and necessary part of submarine cable maintenance and [are] already accounted for in wholesale customer agreements.” Our change does not burden appropriate maintenance work, which by itself does not reflect the kinds of outages that warrant Commission concern. We also believe that any impact to national security from a planned outage is likely to be mitigated by advance notification from submarine cable operators to their customers, which include national security agencies. This refinement will also help to ensure that licensees are not burdened by compliance costs associated with reporting outages caused by planned maintenance.
15. In the event that a licensee determines that a Notification, Interim Report, or Final Report filed for an outage was not required because the licensee later determines that the event does not meet the outage definition in 47 CFR 4.15(a), the licensee may withdraw the filing.
16. The Order defined a submarine cable “outage” as “a failure or significant degradation in the performance of a licensee's cable service regardless of whether the traffic can be re-routed to an alternate path.” The Order explained that by requiring outage reporting even in instances in which traffic is rerouted, the Commission would be better able to promote and advance national security and public safety interests. In addition, the Order explained that reporting outages in which traffic is rerouted would provide the Commission with situational awareness regarding possible over-utilization of redundant paths, and would offer insight into the operability of submarine cables, enabling the Commission to better safeguard their reliability.
17. In their petitions, Submarine Cable Coalition and NASCA both presented arguments to exclude outages from reporting where traffic is rerouted based on the fact that there would be no customer impact. Although NASCA later withdrew its original customer impact-based outage proposal, it makes an important observation about customer impact in general by explaining that for the definition to work, cable operators would need access to real-time information regarding end-to-end communications. Further, NASCA explains that such access is unavailable even to networks and submarine cables owned by the same provider. NASCA argues that this leaves submarine cable operators without the ability to determine that an outage would produce no customer impact. Similarly, Submarine Cable Coalition argues that such reporting of outages even where rerouting occurs “expend[s] funds and resources reporting an `outage' that has no effect on traffic viability,” and that providers have already invested in making sure that outages do not have a “meaningful effect on its customers or the nation's security.”
18. As described above, we exempt from reporting those outages that are for planned maintenance purposes where the operator notified customers in advance of the outage. In this respect, we also recognize that these planned outages may involve planned remediation efforts such as rerouting and, because customers are notified, have less of an impact on customers. As such, we clarify that where a planned outage includes rerouting the outage need not be reported. For outages outside of planned maintenance, we will maintain the reporting requirement. In the case of unplanned outages, customers are not notified ahead of time that there will be an outage or the approximate duration of the outage in order to make the necessary preparations for their networks. In addition, as NASCA explained, submarine cable operators, even those on networks owned by the same provider, do not have the real time information about communications delivery to end-users to be confident that rerouting has been successful and that there has been no customer impact. Furthermore, unplanned outages also constitute a heightened national security concern, especially when the cause or the origin of the outage is unclear. Therefore, we remain concerned about unplanned outages even when traffic is rerouted and will require reporting as described below.
19. Accordingly, we deny Submarine Cable Coalition's request to limit outage reporting for events involving rerouted traffic. We exempt reporting as described above for planned maintenance events, including those events involving rerouted traffic, but deny the request to alter the outage reporting requirement and therefore, maintain the reporting requirement for unplanned outages even when traffic is rerouted. First, we concur with NASCA's assertion that parsing from submarine cable outage reporting those outages with consumer impact would be too difficult and burdensome for providers due to the lack of information submarine cable operators have about customer communication delivery to end users, including for those on the networks owned by the same provider. Second, although Submarine Cable Coalition argues that providers have already invested in making sure that outages do not have a meaningful effect on the nation's security, we retain a modified reporting obligation in light of heightened concerns regarding the impact certain unplanned outages would have for national security interests, specifically those outages outside the planned maintenance exception discussed above. As explained in the Order, in “promoting and advancing the national security and public safety interests served by U.S.-based landings and connections as a whole,” the Commission aims to assess vulnerabilities of the “total undersea cable environment serving the United States.” In this respect, we find that the Commission and its national security partners, not the industry, are in the best position to determine when national security is implicated. Accordingly, except for outages due to planned maintenance as discussed above, submarine cable providers must report outages to the Commission when the outage is unplanned regardless of whether traffic is rerouted, meaning customers have not been notified in advance of the outage and of its expected duration as described in the previous section.
20. Therefore, the outage reporting requirement and the planned maintenance exemption now focus the reporting rule to capture outages with the highest probability of customer impact, thus retaining significant reporting benefits while reducing the burden on providers. In particular, we anticipate that modifying our original outage reporting requirement, by exempting planned maintenance events announced to the customer, will considerably decrease the number of outages that will need to be reported. Accordingly, when considering the costs and benefits associated with continued reporting as modified today, we find that that the national security
21. In reaching this decision, we acknowledge Petitioners' arguments that when submarine cable traffic is rerouted during outages, that outage reporting is of less value than in other situations because of the limited effect on end users. However, while this may be true for some rerouted traffic events, such as with planned maintenance outages previously announced to customers, in other instances, such as with unplanned outages, customers are not notified in advance and at least some submarine cable operators are unable to determine that there was a limited effect on end users. Moreover, unplanned outages, even where traffic is rerouted, may raise national security concerns.
22. The Order requires reporting of an outage that meets the requirements and lasts 30 minutes or more. The Order explained that 30 minutes, not three hours, is an appropriate timeframe because “damage or repair to facilities between the SLTE likely indicates a long-term problem that will not be cleared quickly, so there is no benefit to further delaying reporting.”
23. In light of our decision to grant in part the Petitioners' request for relief with respect to outages for planned maintenance, we do not find the Petitioners' arguments here persuasive. We reject Petitioners' suggestion for a minimum threshold of “four or more hours” or even three hours. Outages of less than three hours may still have significant impact on communications networks and remain of interest to both the Commission and other government agencies with national security responsibilities. Reporting of these outages provides value to our incident response and national security considerations. The threshold sought by Petitioners could impair the government's ability to gather facts and discern patterns with respect to multiple short-term outages across submarine cable licensees that may be related to a single source or issue—
24. We also believe that this decision, coupled with our assessment in Section III.F., infra, to provide flexibility in the definition of an outage affecting a fiber pair as codified in section 4.15(a)(2)(ii) serves to alleviate any concerns that this requirement is “too stringent and will capture mundane events.” Therefore, we retain the 30-minute outage duration threshold. Even short outages may have a significant cumulative effect if they occur simultaneously due to an emergency or other incident. We therefore deny Petitioners' request.
25. The Order provided that licensees submit notifications to the Commission within eight hours after discovering a reportable outage, phasing down to four hours after a three-year period. The Commission reasoned that the phased-in structure would “give licensees ample time to hone their reporting structure while still achieving . . . prompt situational awareness.” The Order noted that reporting entities “need not provide substantive detail on the root cause, location, or duration of the outage if unavailable at that time,” and explained the need for timely notification. As appropriate based on such notifications, the Commission may then take actions such as providing continuity assistance, coordinating with other government agencies, and helping manage the public information aspect of major outages.
26. We deny Petitioners' request to extend the Notification reporting timeframe and retain the phased-in requirement of eight hours followed by four hours. We believe that the adopted notification timeframe strikes a reasonable balance between the need of licensees to identify and promptly respond to outages and the Commission's need for timely information.
27. Notifications must be reasonably timely in order for the Commission to help protect national security, including by sharing information as appropriate with federal partners, aiding restoration efforts as appropriate, and analyzing data where possible to anticipate potential future outages. While we believe that proposals such as Notifications in 48 hours are insufficient to enable the Commission actions described above, we note that Notifications are now limited due to the other changes adopted in this Order on Reconsideration, and continue to call for an abbreviated set of information—not the more extensive data associated with the later reporting obligations—that the Commission needs on a timely basis.
28. Furthermore, for other types of outages currently reported in NORS, 47 CFR 4.9, reporting often serves as the trigger for Commission personnel to engage with communications providers and other parties. We anticipate that Commission personnel would similarly engage as appropriate with submarine cable operators based on the new reporting requirements. This engagement is often facilitated, especially when outages occur and are reported in NORS outside of normal business hours, by the FCC Operations Center, which operates 24 hours a day, seven days a week, including holidays. The phased-in timeframe will enable reasonably prompt Notification to the Commission. This, in turn, will improve the Commission's situational awareness and increase the ability of both the Commission and other government agencies to respond as necessary to outages, including those “that could affect homeland security, public health or safety, and the economic well-being of our Nation.” We believe that this decision will enable the Commission to help facilitate communication and coordination between the submarine cable operator and both federal and local government officials in a reasonably timely manner, so that the Commission does not need to rely on happenstance to initiate its response. Information regarding such outages could also help the Commission inform the public as appropriate about major outages based on more accurate and timely information.
29. In the Order, the Commission determined that the reporting rules would become effective six months following approval of the information collection by OMB. The Order observed that six months represented “a balance between industry's needs to adequately prepare for these reporting requirements and the Commission's need to obtain timely situational awareness of the operational status of the nation's submarine cable infrastructure.” Under the current voluntary reporting regime, only some submarine cable licensees report outages in UCIS, and even those licensees which report do so with varying types of information and in varying formats, so an implementation period of some duration was warranted to enable all licensees to prepare their systems to comply with the new rules.
30. We disagree that additional time after OMB approval from six months to 12-18 months (NASCA) or 12-15 months (SCC) is warranted, and instead conclude that these rules, as modified today, should still become effective 6 months following approval by OMB. We find this shorter phase in period is appropriate because, as the Order noted, many providers are already providing
31. In the Order, the Commission defined an outage in pertinent part as “a failure or significant degradation in the performance of a licensee's cable service.” The term “significant” degradation, as opposed to all instances of degraded service, was designed to focus on major disruptions—including ones for which “some traffic might be getting through during a period of massive disruption.” The Order further stated that the “failure or significant degradation of any fiber pair” may also constitute a reportable outage.
32. We grant the request to amend section 4.15(a)(2)(ii), and agree with NASCA that there is a discrepancy between the narrative text of the Order and the Final Rules in the Order's Appendix B. The text of the Order defines an outage affecting a fiber pair as a “failure or significant degradation.” The Final Rules, however, state that an outage affecting a fiber pair is a “loss of a fiber pair,” and omits the “failure or significant degradation” language. The text of the Order consistently uses the phrase “failure or significant degradation” to describe an outage, including in the discussion of an outage affecting fiber pairs for four hours or more. The Order's Appendix B contains the same definition of an “outage” at section 4.15(a)(1), and then accurately defines an “outage” affecting portions of the submarine cable system between submarine line terminal equipment (SLTE) at section 4.15(a)(2)(i). NASCA correctly notes that in section 4.15(a)(2)(ii), however, the Final Rules refer to an outage affecting a fiber pair simply as a “loss,” rather than as the narrative text stated, as a “failure or significant degradation.”. We therefore amend section 4.15(a)(2)(ii) to clarify that an outage that affects a fiber pair occurs not when there is a “loss” but rather when there is an “outage,” which is in turn correctly defined in section 4.15(a)(1) as a “failure or significant degradation.”
33. This modification makes the section consistent with the narrative text of the Order, which stated that an outage affecting a fiber pair is to act as a “reporting backstop” for the connectivity reporting requirement, which accounts for performance failures and loss of service. Also, the modification is consistent with the definition of an “outage” contained in section 4.15(a)(1) of the Final Rules of the Order. Further, this modification aligns the outage definition here with the outage definition in another outage reporting rule, section 4.5(a), and follows the “long established outage reporting requirement that an outage includes events where even `some traffic might be getting through during a period of massive disruption.' ”
34. The Petitioners are of course correct that new reporting rules will require licensees to incur compliance costs. However, those costs are limited by various factors. First, the changes adopted in this Order on Reconsideration reduce overall reporting requirements. Although we lack specific data on the exact magnitude of the reduction in reporting, as a general matter we expect that these changes will generate fewer reports than the number of reports originally contemplated by the Order, which will lower reporting costs without significantly reducing the benefits. In addition, we are requiring licensees to report only information that they routinely either have or must obtain to restore service. Indeed, many of the reporting requirements, as modified herein, only require reporting of information “if known.” We therefore anticipate that the reporting requirements, as modified herein, are unlikely to result in substantial additional information gathering costs to licensees. We also consider that some licensees may incur one-time costs associated with the modified outage reporting obligations, but we anticipate that any such costs will be mitigated in part by the fact that, due to consortium agreements associated with submarine cables, not all licensees will incur the full scope of review costs. As many cables are jointly-owned by consortia of different licensees, these licensees may choose to register a Responsible Licensee with the Commission for reporting purposes with respect to the jointly-owned cable. Accordingly, not all licensees will incur the full scope of one-time review costs.
35. The changes adopted today reduce less useful reporting elements, such as the change to limit the reporting obligation for outages involving planned maintenance announced to customers, but keep essential components, and therefore the benefits are not adversely affected to a significant degree. Although the benefits under the modified submarine cable outage reporting regime are significant, especially for national security and public safety purposes, it is not possible to estimate with precision the dollar value of these benefits. The analysis of submarine cable outage reporting benefits must consider the integral and indispensable role that submarine cables serve in the national and international communications infrastructure, including their impact on national security and public safety interests. Submarine cable outages do not occur with the same frequency as terrestrial outages, but when they do occur they may have a much higher impact due to the volume and the nature of communications carried over such cables. For example, in addition to outages caused by weather or inadvertent damage, we must also consider the potential for malicious damage by an adversary that could impair a significant amount of submarine cable traffic and severely degrade both government and non-government communications.
36. In these cases, mandatory and consistent outage reporting will deliver greater benefits than the previous voluntary reporting regime, because based on more than a decade of experience in outage reporting, if we were to rely on obtaining information from voluntary outage reporting and press reports, it might take days or weeks for the Commission to identify the occurrence of an outage, not to mention its cause and or scope. The voluntary reporting regime does not collect uniform and timely data, whereas consistent mandatory outage reporting will collect such data and provide the Commission with a visibility into the reliability of the submarine cable ecosystem as a whole, which is necessary to serve the government's missions described herein. For example, although some operators may provide information to DHS in certain circumstances, that reporting does not replicate the scope of the data that would be generated by our reporting requirements. Furthermore, individual cable operators generally have visibility only into their own cables, and indeed some of them may have limited visibility, as in the cases of consortiums or joint build systems. Targeted outage reporting will: (1) Speed up the process of identifying the cause and scope of outages; (2) enable the Commission and its government
37.
38.
39. In this present document, we have assessed the effects of the modifications of the rules herein, which require submarine cable licensees to report when they experience outages of certain durations and causes, on small business concerns and find that the rules modified here reduce the information collection burden on such entities.
40. Congressional Review Act. The Commission has determined, and the Administrator of the Office of Information and Regulatory Affairs, Office of Management and Budget, concurs, that this rule is non-major under the Congressional Review Act, 5 U.S.C. 804(2). The Commission will send a copy of this Order on Reconsideration to Congress and the Government Accountability Office pursuant to 5 U.S.C. 801(a)(1)(A).
41. As required by the Regulatory Flexibility Act of 1980, as amended (RFA), an Initial Regulatory Flexibility Analysis (IRFA) was incorporated in the Submarine Cable Notice of Proposed Rulemaking (Submarine Cable NPRM) adopted in September of 2015, 80 FR 67689 (Nov. 3, 2015). The Commission sought written public comment on the proposals in Submarine Cable NPRM including comments on the IRFA. The Commission included a Final Regulatory Flexibility Analysis (FRFA) in Appendix C of the Submarine Cable Outage Reporting Order, 81 FR 52354 (Aug. 8, 2016), in this proceeding. This Supplemental Final Regulatory Flexibility Analysis (Supplemental FRFA) supplements the FRFA in the Submarine Cable Outage Reporting Order to reflect the actions taken in the Order on Reconsideration and conforms to the RFA.
42. In the Order on Reconsideration the Commission reexamined the required reporting of submarine cable infrastructure outages and addressed the issues raised by parties in their petitions for reconsideration of the Submarine Cable Outage Reporting Order adopting mandatory reporting requirements for submarine cable licensees. After considering the petitions, the Commission granted the request to exempt reporting of outages due to planned maintenance on the condition that submarine cable operators continue to provide customers with advance notification of the outage (including the duration) and any additional time beyond the announced duration of the outage does not exceed the amount of time that would otherwise trigger the outage reporting requirements. The Commission also granted the request to amend the rules to eliminate the inconsistency between the rule defining a submarine cable “outage” and the Order's characterization of that definition. However, the Commission denied the requests to raise the minimum duration for an outage, to extend the time to file a Notification, to eliminate reporting of outages when all traffic on a submarine cable is rerouted, and to extend the timeframe to begin compliance with the new rules.
43. The Order on Reconsideration preserved the underlying value of reporting outages to aid in the analysis of network reliability trends and issues, situational awareness and incident response, and national security efforts while it narrowed associated reporting costs and administrative burdens.
44. There were no comments filed that specifically addressed the proposed rules and policies presented in the IRFA.
45. Pursuant to the Small Business Jobs Act of 2010, which amended the RFA, the Commission is required to respond to any comments filed by the Chief Counsel for Advocacy of the Small Business Administration (SBA), and to provide a detailed statement of any change made to the proposed rules as a result of those comments.
46. The Chief Counsel did not file any comments in response to the proposed rules in this proceeding.
47. The RFA directs agencies to provide a description of and, where feasible, an estimate of the number of small entities that may be affected by the rules adopted herein. The RFA generally defines the term “small entity” as having the same meaning as the terms “small business,” “small organization,” and “small governmental jurisdiction.” In addition, the term “small business” has the same meaning as the term “small business concern” under the Small Business Act.” A “small business concern” is one which: (1) Is independently owned and operated; (2) is not dominant in its field of operation; and (3) satisfies any additional criteria established by the SBA.
48. As noted above, the FRFA was incorporated into the Submarine Cable Outage Reporting Order. In that analysis, we described in detail the small entities that might be significantly affected by the rules adopted in the
49. The actions taken in the Order on Reconsideration amended rules in the Submarine Cable Outage Reporting Order and modified the recordkeeping, reporting or other compliance obligations on small entities as described below, and reduced their costs.
50. To reduce confusion and the possibility that unnecessary outage reports will be filed, we clarified that the definition of an outage that affects a fiber pair occurs when there is a “failure or significant degradation,” rather than merely a “loss.” This modification eliminates the inconsistency between the rule defining submarine cable “outage” in § 4.15(a)(1) of the Final Rules attached to the Submarine Cable Outage Reporting Order, and the Submarine Cable Outage Reporting Order's characterization of that definition.
51. We reduced the reportable outages by exempting outages due to planned maintenance from the reporting requirement on the condition that the licensee has provided its customers with advance notification of the outage (including the duration). Reporting to the Commission is required if the cable operator planning the maintenance outage does not provide advance notification of the outage to its customers, or if the announced planned maintenance event turns into an unplanned outage in which the duration of the unplanned portion is sufficient in and of itself to trigger the outage reporting threshold.
52. In the Submarine Cable Outage Reporting Order, we required an outage Notification notwithstanding whether the traffic was rerouted. Accordingly, to provide flexibility to licensees, when the outage is a planned maintenance outage as described above, the outage need not be reported to the Commission. Conversely, if the outage is unplanned or is planned but the customer is not notified in advanced of the event, the licensee must file a Notification. Additionally, if a licensee determines that a Notification, an Interim Report, or a Final Report filed for an outage is no longer required because the event no longer meets the outage definition in 47 CFR 4.15(a), the licensee may withdraw the filing.
53. The RFA requires an agency to describe any significant alternatives that it has considered in reaching its proposed approach, which may include the following four alternatives (among others): “(1) The establishment of differing compliance or reporting requirements or timetables that take into account the resources available to small entities; (2) the clarification, consolidation, or simplification of compliance or reporting requirements under the rule for small entities; (3) the use of performance, rather than design, standards; and (4) and exemption from coverage of the rule, or any part thereof, for small entities.”
54. The Commission took steps that will minimize the economic impact on small entities and other licensees by reducing certain requirements and adding additional discretion to other requirements. In general, the reporting rules as modified by the Order on Reconsideration will generate fewer reports than the number of reports estimated in the Submarine Cable Outage Reporting Order, which will lower costs for small entities and other licensees who experience an outage that triggers reporting. Specifically, and as discussed in the previous section, we have limited certain reporting obligations for outages involving planned maintenance. This alternative is a change from the existing rule in the Submarine Cable Outage Reporting Order, which included a reporting obligation for all outages involving planned maintenance.
55. In light of these modified reporting requirements, small entities and other licensees are able to negotiate with their partners and plan for planned maintenance notifications ahead of any outages which may limit outage reporting associated costs.
56. The Order on Reconsideration significantly reduced the scope of required reporting, but the Commission does not have specific data on the magnitude of the reduction in reporting that would result from the changes announced today. As a general matter we expect that these changes will generate fewer reports than the number of reports indicated by the Submarine Cable Outage Reporting Order, which will lower reporting costs for small entities and other licensees without significantly reducing the benefits. In addition, because these changes limit reporting to outages for which licensees must generally take action to restore service, we anticipate that the information required to be reported will likely be information that licensees routinely either have or must obtain to restore service. We note that many of the reporting requirements, as modified herein, only require reporting of information “if known.” We therefore anticipate that the reporting requirements, as modified herein, are unlikely to result in substantial additional information gathering costs to licensees. We also consider that some licensees may incur one-time costs associated with the modified outage reporting obligations, but we anticipate that any such costs are mitigated in part by the fact that, due to consortium agreements associated with submarine cables, not all licensees will incur the full scope of review costs.
57. The Commission believes in this instance that applying the same rules equally to all entities is necessary to ensure consistent outage reporting covering all licensed cables in order to provide the Commission with a holistic picture of the resilience of the submarine cable ecosystem, which will enable outage trend analysis over the longer term. Mandatory, targeted outage reporting will (1) speed up the process of identifying the cause and scope of such outages; (2) enable the Commission and its government partners to maintain situational awareness of outages and respond to them as needed; and (3) equip the Commission to promptly alert and coordinate response with national defense and other authorities, as necessary. Among other benefits, this may help reduce the extent of the damage from outages or mitigate its effects on end users in support of maintaining national security. Further, outage reporting and the subsequent trend analysis from the information collected will assist the Commission as it works towards mitigating threats to undersea cables through trend analysis, which will help facilitate the agency's interagency coordination processes related to submarine cable deployment.
58. The Commission will send a copy of the Order on Reconsideration, including this Supplemental FRFA, in a report to Congress pursuant to the Congressional Review Act. In addition, the Commission will send a copy of the Order on Reconsideration, including this Supplemental FRFA, to the Chief Counsel for Advocacy of the SBA. A copy of the Order on Reconsideration and Supplemental FRFA (or summaries
59. Accordingly,
60.
61.
62.
63.
64.
Communications equipment, Reporting and recordkeeping requirements, Submarine cable, Telecommunications.
For the reasons discussed in the preamble, the Federal Communications Commission amends 47 CFR part 4 as follows:
47 U.S.C. 34-39, 151, 154, 155, 157, 201, 251, 254, 301, 303(b), 303(g), 303(r), 307, 309(a), 309(j), 316, 332, 403, 615a-1, 615c, 1302(a), and 1302(b); 5 U.S.C. 301, and Executive Order no. 10530.
(a)
(i) An outage of a portion of submarine cable system between submarine line terminal equipment (SLTE) at one end of the system and SLTE at another end of the system occurs for 30 minutes or more; or
(ii) An outage of any fiber pair, including due to terminal equipment, on a cable segment occurs for four hours or more, regardless of the number of fiber pairs that comprise the total capacity of the cable segment.
(2) An “outage” does not require reporting under this section if the outage is caused by announced planned maintenance and the licensee notified its customers in advance of the planned maintenance and its expected duration, except that if the planned maintenance duration surpasses the shortest announced duration for the planned maintenance and this additional time triggers the requirements in paragraph (a)(1) of this section, the outage becomes reportable as of the time the maintenance exceeds the shortest announced duration for the planned maintenance.
(b)
(i) For a submarine cable that is jointly owned and operated by multiple licensees, the licensees of that cable may designate a Responsible Licensee that files outage reports under this rule on behalf of all licensees on the affected cable.
(ii) Licensees opting to designate a Responsible Licensee must jointly notify the Chief of the Public Safety and Homeland Security Bureau's Cybersecurity and Communications Reliability Division of this decision in writing. Such Notification shall include the name of the submarine cable at issue; and contact information for all licensees on the submarine cable at issue, including the Responsible Licensee.
(2) Notification, Interim, and Final Outage Reports shall be submitted by a person authorized by the licensee to submit such reports to the Commission.
(i) The person submitting the Final Outage Report to the Commission shall also be authorized by the licensee to legally bind the provider to the truth, completeness, and accuracy of the information contained in the report. Each Final report shall be attested by the person submitting the report that he/she has read the report prior to submitting it and on oath deposes and states that the information contained therein is true, correct, and accurate to the best of his/her knowledge and belief and that the licensee on oath deposes and states that this information is true, complete, and accurate.
(ii) The Notification is due within 480 minutes (8 hours) of the time of determining that an event is reportable for the first three years from the effective date of these rules. After three years from the effective date of the rules, Notifications shall be due within 240 minutes (4 hours). The Notification shall be submitted in good faith. Licensees shall provide: The name of the reporting entity; the name of the cable and a list of all licensees for that cable; the date and time of onset of the outage, if known (for planned events as defined in paragraph (a)(2) of this section, this is the estimated start time/date of the repair); a brief description of the event, including root cause if
(iii) The Interim Report is due within 24 hours of receiving the Plan of Work. The Interim Report shall be submitted in good faith. Licensees shall provide: The name of the reporting entity; the name of the cable; a brief description of the event, including root cause, if known; the date and time of onset of the outage; nearest cable landing station; approximate location of the event (expressed in either nautical miles and the direction from the nearest cable landing station or in latitude and longitude); best estimate of when the cable is scheduled to be repaired, including approximate arrival time and date of the repair ship, if applicable; a contact name, contact email address, and contact telephone number by which the Commission's technical staff may contact the reporting entity.
(iv) The Final Outage Report is due seven (7) days after the repair is completed. The Final Outage Report shall be submitted in good faith. Licensees shall provide: The name of the reporting entity; the name of the cable; the date and time of onset of the outage (for planned events as defined in paragraph (a)(2) of this section, this is the start date and time of the repair); a brief description of the event, including the root cause if known; nearest cable landing station; approximate location of the event (expressed either in nautical miles and the direction from the nearest cable landing station or in latitude and longitude coordinates); duration of the event, as defined in paragraph (a) of this section; the restoration method; and a contact name, contact email address, and contact telephone number by which the Commission's technical staff may contact the reporting entity. If any required information is unknown at the time of submission of the Final Report but later becomes known, licensees should amend their report to reflect this knowledge. The Final Report must also contain an attestation as described in paragraph (b)(2)(i) of this section.
(v) The Notification, Interim Report, and Final Outage Reports are to be submitted electronically to the Commission. “Submitted electronically” refers to submission of the information using Commission-approved Web-based outage report templates. If there are technical impediments to using the Web-based system during the Notification stage, then a written Notification to the Commission by email to the Chief, Public Safety and Homeland Security Bureau is permitted; such Notification shall contain the information required. Electronic filing shall be effectuated in accordance with procedures that are specified by the Commission by public notice. Notifications, Interim reports, and Final Reports may be withdrawn under legitimate circumstances,
(d)
Federal Communications Commission.
Correcting amendment.
The Federal Communications Commission (Commission) is correcting a final rule that appeared in the
Effective March 19, 2020.
Bryan P. Boyle,
In FR Doc. 2019-20173, which published in the
Communications common carriers, Health facilities, Infants and children, Internet, Libraries, Reporting and recordkeeping requirements, Schools, Telecommunications, Telephone.
47 U.S.C. 151, 154(i), 155, 201, 205, 214, 219, 220, 229, 254, 303(r), 403, 1004, and 1302 unless otherwise noted.
This document was received for publication by the Office of the Federal Register on March 11, 2020.
Federal Labor Relations Authority.
Proposed rule with request for comments.
The Federal Labor Relations Authority (FLRA) seeks public comments on a proposed addition to its regulations. This proposed addition concerns the revocation of a written assignment of amounts deducted from the pay of a Federal employee for the payment of regular and periodic dues allotted to an exclusive representative.
To be considered, comments must be received on or before April 9, 2020.
You may send comments, which must include the caption “Miscellaneous and General Requirements,” by one of the following methods:
•
•
Rebecca Osborne, Deputy Solicitor, at
The FLRA is seeking to assure employees the fullest freedom in the exercise of their rights under the Federal Service Labor-Management Relations Statute, including their rights under 5 U.S.C. 7102 and 7115, in matters directly affecting their pay. Therefore, the FLRA proposes to define when an employee may initiate the revocation of a previously authorized assignment of amounts deducted from the pay of the employee for the payment of regular and periodic dues allotted to an exclusive representative. In particular, the FLRA proposes that, after the expiration of the one-year period during which an assignment may not be revoked under 5 U.S.C. 7115(a), an employee may initiate the revocation of a previously authorized assignment at any time that the employee chooses.
The FLRA is an independent regulatory agency, and as such, is not subject to the requirements of E.O. 12866.
The FLRA is an independent regulatory agency, and as such, is not subject to the requirements of E.O. 13132.
Pursuant to section 605(b) of the Regulatory Flexibility Act, 5 U.S.C. 605(b), the Chairman of the FLRA has determined that this rule, as amended, will not have a significant impact on a substantial number of small entities, because this rule applies only to Federal agencies, Federal employees, and labor organizations representing those employees.
This proposed rule is not expected to be subject to the requirements of E.O. 13771 (82 FR 9339, Feb. 3, 2017) because this proposed rule is expected to be related to agency organization, management, or personnel.
This regulation will not have substantial direct effects on the States, on the relationship between the National Government and the States, or on distribution of power and responsibilities among the various levels of government. Therefore, in accordance with Executive Order 13132, this proposed rule does not have sufficient federalism implications to warrant preparation of a federalism assessment.
This regulation meets the applicable standard set forth in section 3(a) and (b)(2) of Executive Order 12988.
This rule change will not result in the expenditure by state, local, and tribal governments, in the aggregate, or by the private sector, of $100,000,000 or more in any one year, and it will not significantly or uniquely affect small governments. Therefore, no actions were deemed necessary under the provisions of the Unfunded Mandates Reform Act of 1995.
This action is not a major rule as defined by section 804 of the Small Business Regulatory Enforcement Fairness Act of 1996. This rule will not result in an annual effect on the economy of $100,000,000 or more; a major increase in costs or prices; or significant adverse effects on competition, employment, investment, productivity, innovation, or on the ability of United States-based companies to compete with foreign-based companies in domestic and export markets.
The amended regulations contain no additional information collection or record-keeping requirements under the Paperwork Reduction Act of 1995, 44 U.S.C. 3501,
Administrative practice and procedure, Government employees, Labor management relations.
Accordingly, for the reasons stated in the preamble, FLRA proposes to amend 5 CFR part 2429 as follows:
5 U.S.C. 7134; § 2429.18 also issued under 28 U.S.C. 2112(a).
Consistent with the exceptions in 5 U.S.C. 7115(b), after the expiration of the one-year period during which an assignment may not be revoked under 5 U.S.C. 7115(a), an employee may initiate the revocation of a previously authorized assignment at any time that the employee chooses.
The following appendix will not appear in the Code of Federal Regulations.
For reasons expressed in my dissenting opinion in
Agricultural Marketing Service, USDA.
Proposed rule.
This proposed rule would implement a recommendation from the South Texas Onion Committee (Committee) to decrease the assessment rate established for the 2019-20 and subsequent fiscal periods. The proposed assessment rate would remain in effect indefinitely unless modified, suspended, or terminated.
Comments must be received by April 20, 2020.
Interested persons are invited to submit written comments concerning this proposed rule. Comments must be sent to the Docket Clerk, Marketing Order and Agreement Division, Specialty Crops Program, AMS, USDA, 1400 Independence Avenue SW, STOP 0237, Washington, DC 20250-0237; Fax: (202) 720-8938; or internet:
Abigail Campos, Marketing Specialist, or Christian D. Nissen, Regional Director, Southeast Marketing Field Office, Marketing Order and Agreement Division, Specialty Crops Program, AMS, USDA; Telephone: (863) 324-3375, Fax: (863) 291-8614, or Email:
Small businesses may request information on complying with this regulation by contacting Richard Lower, Marketing Order and Agreement Division, Specialty Crops Program, AMS, USDA, 1400 Independence Avenue SW, STOP 0237, Washington, DC 20250-0237; Telephone: (202) 720-2491, Fax: (202) 720-8938, or Email:
This action, pursuant to 5 U.S.C. 553, proposes an amendment to regulations issued to carry out a marketing order as defined in 7 CFR 900.2(j). This proposed rule is issued under Marketing Order No. 959, as amended (7 CFR part 959), regulating the handling of onions grown in south Texas. Part 959, (referred to as “the Order”) is effective under the Agricultural Marketing Agreement Act of 1937, as amended (7 U.S.C. 601-674), hereinafter referred to as the “Act.” The Committee locally administers the Order and is comprised of producers and handlers operating within the area of production.
The Department of Agriculture (USDA) is issuing this proposed rule in conformance with Executive Orders 13563 and 13175. This proposed rule falls within a category of regulatory actions that the Office of Management and Budget (OMB) exempted from Executive Order 12866 review. Additionally, because this proposed rule does not meet the definition of a significant regulatory action, it does not trigger the requirements contained in Executive Order 13771. See OMB's Memorandum titled “Interim Guidance Implementing Section 2 of the Executive Order of January 30, 2017, titled `Reducing Regulation and Controlling Regulatory Costs' ” (February 2, 2017).
This proposed rule has been reviewed under Executive Order 12988, Civil Justice Reform. Under the Order now in effect, South Texas onion handlers are subject to assessments. Funds to administer the Order are derived from such assessments. It is intended that the assessment rate would be applicable to all assessable onions for the 2019-20 fiscal year, and continue until amended, suspended, or terminated.
The Act provides that administrative proceedings must be exhausted before parties may file suit in court. Under section 608c(15)(A) of the Act, any handler subject to an order may file with USDA a petition stating that the order, any provision of the order, or any obligation imposed in connection with the order is not in accordance with law and request a modification of the order or to be exempted therefrom. Such handler is afforded the opportunity for a hearing on the petition. After the hearing, USDA would rule on the petition. The Act provides that the district court of the United States in any district in which the handler is an inhabitant, or has his or her principal place of business, has jurisdiction to review USDA's ruling on the petition, provided an action is filed not later than 20 days after the date of the entry of the ruling.
This proposed rule would decrease the assessment rate from $0.065, the rate that was established for the 2017-18 and subsequent fiscal periods, to $0.05 per 50-pound equivalent of onions handled for the 2019-20 and subsequent fiscal years.
The Order provides authority for the Committee, with the approval of USDA, to formulate an annual budget of expenses and collect assessments from handlers to administer the program. The members are familiar with the Committee's needs and with the costs of goods and services in their local area and are thus in a position to formulate an appropriate budget and assessment rate. The assessment rate is formulated and discussed in a public meeting. Thus, all directly affected persons have an opportunity to participate and provide input.
For the 2017-18 and subsequent fiscal periods, the Committee recommended, and USDA approved, an assessment rate that would continue in effect from fiscal
On November 19, 2019, the Committee unanimously recommended 2019-20 expenditures of $174,807 and an assessment rate of $0.05 per 50-pound equivalent of onions. In comparison, last year's budgeted expenditures were $169,807. The proposed assessment rate of $0.05 is $0.015 lower than the rate currently in effect. The Committee recommended decreasing the assessment rate to help reduce the Committee's reserve fund and reduce the assessment burden on handlers.
The major expenditures recommended by the Committee for the 2019-20 year include $69,992 for management and administration, $50,000 for compliance, and $20,000 for research. Budgeted expenses for these items in 2018-19 were $69,992, $50,000, and $20,000, respectively.
The Committee derived the recommended assessment rate by considering anticipated expenses, expected shipments of 3,960,000 50-pound bags, and the amount of funds available in the authorized reserve. Income derived from handler assessments calculated at $198,000 (3.96 million multiplied by $0.05), along with interest income and funds from the Committee's authorized reserve, would be adequate to cover budgeted expenses of $174,807. Funds in the reserve (currently $201,844) would be kept within the maximum permitted by the Order (approximately two fiscal period's expenses as stated in § 959.43) at the end of the 2019-20 fiscal period.
The assessment rate proposed in this rule would continue in effect indefinitely unless modified, suspended, or terminated by USDA upon recommendation and information submitted by the Committee or other available information.
Although this assessment rate would be effective for an indefinite period, the Committee will continue to meet prior to or during each fiscal period to recommend a budget of expenses and consider recommendations for modification of the assessment rate. The dates and times of Committee meetings are available from the Committee or USDA. Committee meetings are open to the public and interested persons may express their views at these meetings. USDA would evaluate Committee recommendations and other available information to determine whether modification of the assessment rate is needed. Further rulemaking would be undertaken as necessary. The Committee's 2019-20 budget and those for subsequent fiscal periods will be reviewed and, as appropriate, approved by USDA.
Pursuant to requirements set forth in the Regulatory Flexibility Act (RFA) (5 U.S.C. 601-612), the Agricultural Marketing Service (AMS) has considered the economic impact of this proposed rule on small entities. Accordingly, AMS has prepared this initial regulatory flexibility analysis.
The purpose of the RFA is to fit regulatory actions to the scale of businesses subject to such actions in order that small businesses will not be unduly or disproportionately burdened. Marketing orders issued pursuant to the Act, and the rules issued thereunder, are unique in that they are brought about through group action of essentially small entities acting on their own behalf.
There are approximately 60 producers of onions in the production area and approximately 30 handlers subject to regulation under the marketing order. Small agricultural producers are defined by the Small Business Administration (SBA) as those having annual receipts less than $1,000,000, and small agricultural service firms are defined as those whose annual receipts are less than $30,000,000 (13 CFR 121.201).
According to the National Agricultural Statistics Service (NASS), the weighted producer price for South Texas onions during the 2018-19 season was around $9.09 per 50-pound equivalent. The Committee reports total onion shipments were approximately 4.2 million 50-pound equivalents. Using the weighted average price and shipment information, the total 2018-19 crop value is estimated at $38.2 million. Dividing the crop value by the estimated number of producers (60) yields an estimated average receipt per producer of $636,700, so the majority of producers would have annual receipts of less than $1,000,000.
The average handler price for South Texas onions during the 2018-19 season was approximately $11.00 per 50-pound equivalent. Using the price average and shipment information, the total 2018-19 handler crop value is estimated at $46.2 million. Dividing this figure by the number of handlers (30) yields an estimated average annual handler receipts of $1.54 million, which is below the SBA threshold for small agricultural service firms. Thus, the majority of onion producers and handlers may be classified as small entities.
This proposal would decrease the assessment rate collected from handlers for the 2019-20 and subsequent fiscal periods from $0.065 to $0.05 per 50-pound equivalent of Texas onions. The Committee unanimously recommended 2019-20 expenditures of $174,807 and an assessment rate of $0.05 per 50-pound equivalent. The proposed assessment rate of $0.05 is $0.015 lower than the 2017-18 rate. The quantity of assessable onions for the 2019-20 fiscal period is estimated at 3.96 million 50-pound equivalents. Thus, the $0.015 rate should provide $198,000 in assessment income (3.96 million multiplied by $0.05). Income derived from handler assessments, along with interest income and funds from the Committee's authorized reserve, would be adequate to cover budgeted expenses.
The major expenditures recommended by the Committee for the 2019-20 year include $69,992 for management and administration, $50,000 for compliance, and $20,000 for research. Budgeted expenses for these items in 2018-19 were $69,992, $50,000, and $20,000, respectively.
The Committee recommended decreasing the assessment rate to reduce the assessment burden on handlers and utilize funds from the authorized reserve to help cover Committee expenses.
Prior to arriving at this budget and assessment rate, the Committee considered information from various sources, such as the Committee's Budget and Personnel Committee. Alternative expenditure levels were discussed by this group, based upon the relative value of various activities to the South Texas onion industry. Based on the estimated shipments, the recommended assessment rate of $0.05 would provide $198,000 in assessment income. The Committee determined that assessment revenue, along with interest income and funds from authorized reserves would be adequate to cover budgeted expenses for the 2019-20 fiscal period.
A review of historical information and preliminary information pertaining to the upcoming fiscal period indicates that the average producer price for the 2019-20 season should be approximately $10.15 per 50-pound equivalent of Texas onions. Therefore, the estimated assessment revenue for the 2019-20 fiscal period as a percentage of total producer revenue would be about 0.49 percent.
This proposed rule would decrease the assessment obligation imposed on handlers. Assessments are applied uniformly on all handlers, and some of the costs may be passed on to producers. However, decreasing the
The Committee's meeting was widely publicized throughout the South Texas onion industry. All interested persons were invited to attend the meeting and participate in Committee deliberations on all issues. Like all Committee meetings, the November 19, 2019, meeting was a public meeting and all entities, both large and small, were able to express views on this issue. Interested persons are invited to submit comments on this proposed rule, including the regulatory and informational collection impacts of this action on small businesses.
In accordance with the Paperwork Reduction Act of 1995 (44 U.S.C. Chapter 35), the Order's information collection requirements have been previously approved by the OMB and assigned OMB No. 0581-0178 Vegetable and Specialty Crops. No changes in those requirements would be necessary as a result of this proposed rule. Should any changes become necessary, they would be submitted to OMB for approval.
This proposed rule would not impose any additional reporting or recordkeeping requirements on either small or large South Texas onion handlers. As with all Federal marketing order programs, reports and forms are periodically reviewed to reduce information requirements and duplication by industry and public sector agencies.
AMS is committed to complying with the E-Government Act, to promote the use of the internet and other information technologies to provide increased opportunities for citizen access to Government information and services, and for other purposes.
USDA has not identified any relevant Federal rules that duplicate, overlap, or conflict with this proposed rule.
A small business guide on complying with fruit, vegetable, and specialty crop marketing agreements and orders may be viewed at:
A 30-day comment period is provided to allow interested persons to respond to this proposed rule.
Marketing agreements, Onions, Reporting and recordkeeping requirements.
For the reasons set forth in the preamble, 7 CFR part 959 is proposed to be amended as follows:
7 U.S.C. 601-674.
On and after August 1, 2019, an assessment rate of $0.05 per 50-pound equivalent is established for South Texas onions.
Coast Guard, DHS.
Notice of proposed rulemaking.
The Coast Guard is proposing to amend the rules that regulate vessel traffic and control navigation on portions of waterways in the Lake Michigan Captain of the Port Zone during events that will introduce extra or unusual hazards to the safety of life on the navigable waters of the United States. This proposed rulemaking will reorganize five separate regulations of a similar nature currently listed in the Code of Federal Regulations (CFR) into a single regulation, make minor formatting changes for consistency, move six existing events into this regulation, update the dates listed for events, and list these regulations in table form. We invite your comments on this proposed rulemaking.
Comments and related material must be received by the Coast Guard on or before April 20, 2020.
You may submit comments identified by docket number USCG-2020-0124 using the Federal eRulemaking Portal at
If you have questions about this proposed rulemaking, call or email Chief Petty Officer Kyle Weitzell, Waterways Management Division, Sector Lake Michigan, U.S. Coast Guard; telephone 414-747-7148, email
Marine events are held on a regularly recurring basis on the navigable waters of the Lake Michigan Captain of the Port Zone (COTP). In the past, the Coast Guard would issue special local regulations for these events. The COTP has determined that potential hazards associated with the events exist, and regulations have been issued to protect safety of life and property for the maritime public and event participants from the hazards associated with these events. In the past, the Coast Guard has not received public comments or concerns regarding impacts to waterway traffic as a result of these regularly recurring events.
This proposed rulemaking would provide consistency to notify the public in a timely manner through permanent publication in Title 33 of the Code of Federal Regulations. The table in this proposed rule would list each regularly recurring event requiring a special local regulation, as administered by the Coast Guard and enforced by COTP Lake Michigan.
By consolidating these regulations into a single regulation and making minor formatting updates, the Coast Guard will improve the accuracy of the event and regulation information, make the regulation easier to use, and reduce the administrative burden to manage multiple regulations. The Coast Guard is proposing this rulemaking under authority in 46 U.S.C. 70041 (previously 33 U.S.C. 1233).
The COTP Lake Michigan is proposing to consolidate all of the
As large numbers of spectator vessels and marine traffic are expected to congregate around the event locations, the regulated areas that would be listed in the table are needed to protect both spectators and event participants from safety hazards associated with these events. During the enforcement period of the regulated areas, persons and vessels would be prohibited from entering, transiting through, and remaining, anchoring, or mooring within the regulated area unless specifically authorized by the COTP or a designated representative. The Coast Guard may be assisted by other Federal, State, or local agencies in the enforcement of these regulated areas. These events are listed below in the text of the regulation.
We developed this proposed rule after considering numerous statutes and Executive orders related to rulemaking. Below we summarize our analyses based on a number of these statutes and Executive orders, and we discuss First Amendment rights of protestors.
Executive Orders 12866 and 13563 direct agencies to assess the costs and benefits of available regulatory alternatives and, if regulation is necessary, to select regulatory approaches that maximize net benefits. Executive Order 13771 directs agencies to control regulatory costs through a budgeting process. This NPRM has not been designated a “significant regulatory action,” under Executive Order 12866. Accordingly, the NPRM has not been reviewed by the Office of Management and Budget (OMB), and pursuant to OMB guidance it is exempt from the requirements of Executive Order 13771.
The Coast Guard has previously promulgated special local regulations or safety zones in § 100 and § 165, respectively, for all event areas contained within this proposed regulation and has not received notice of any negative impact caused by the regulations. By consolidating these regulations into a single regulation and making minor formatting changes, the Coast Guard will improve the accuracy of this information, make the regulations easier to use, and reduce the administrative burden to manage multiple regulations.
The Regulatory Flexibility Act of 1980, 5 U.S.C. 601-612, as amended, requires Federal agencies to consider the potential impact of regulations on small entities during rulemaking. The term “small entities” comprises small businesses, not-for-profit organizations that are independently owned and operated and are not dominant in their fields, and governmental jurisdictions with populations of less than 50,000. The Coast Guard certifies under 5 U.S.C. 605(b) that this proposed rule would not have a significant economic impact on a substantial number of small entities.
While some owners or operators of vessels intending to transit the safety zone may be small entities, for the reasons stated in section IV.A above, this proposed rule would not have a significant economic impact on any vessel owner or operator.
If you think that your business, organization, or governmental jurisdiction qualifies as a small entity and that this rule would have a significant economic impact on it, please submit a comment (see
Under section 213(a) of the Small Business Regulatory Enforcement Fairness Act of 1996 (Public Law 104-121), we want to assist small entities in understanding this proposed rule. If the rule would affect your small business, organization, or governmental jurisdiction and you have questions concerning its provisions or options for compliance, please call or email the person listed in the
This proposed rule would not call for a new collection of information under the Paperwork Reduction Act of 1995 (44 U.S.C. 3501-3520).
A rule has implications for federalism under Executive Order 13132 (Federalism), if it has a substantial direct effect on the States, on the relationship between the National Government and the States, or on the distribution of power and responsibilities among the various levels of government. We have analyzed this proposed rule under that Order and have determined that it is consistent with the fundamental federalism principles and preemption requirements described in Executive Order 13132.
Also, this proposed rule does not have tribal implications under Executive Order 13175 (Consultation and Coordination with Indian Tribal Governments) because it would not have a substantial direct effect on one or more Indian tribes, on the relationship between the Federal Government and Indian tribes, or on the distribution of power and responsibilities between the Federal Government and Indian tribes. If you believe this proposed rule has implications for federalism or Indian tribes, please call or email the person listed in the
The Unfunded Mandates Reform Act of 1995 (2 U.S.C. 1531-1538) requires Federal agencies to assess the effects of their discretionary regulatory actions. In particular, the Act addresses actions that may result in the expenditure by a State, local, or tribal government, in the aggregate, or by the private sector of $100,000,000 (adjusted for inflation) or more in any one year. Though this proposed rule would not result in such an expenditure, we do discuss the
We have analyzed this proposed rule under Department of Homeland Security Directive 023-01, Rev. 1, associated implementing instructions, and Environmental Planning COMDTINST 5090.1 (series), which guide the Coast Guard in complying with the National Environmental Policy Act of 1969 (42 U.S.C. 4321-4370f), and have made a preliminary determination that this action is one of a category of actions that do not individually or cumulatively have a significant effect on the human environment. This proposed rule involves the consolidation and making minor formatting changes of five existing special local regulations. Normally such actions are categorically excluded from further review under paragraph L61 of Appendix A, Table 1 of DHS Instruction Manual 023-01-001-01, Rev. 1. A preliminary Record of Environmental Consideration supporting this determination is available in the docket where indicated under
The Coast Guard respects the First Amendment rights of protesters. Protesters are asked to call or email the person listed in the
We view public participation as essential to effective rulemaking, and will consider all comments and material received during the comment period. Your comment can help shape the outcome of this rulemaking. If you submit a comment, please include the docket number for this rulemaking, indicate the specific section of this document to which each comment applies, and provide a reason for each suggestion or recommendation.
We encourage you to submit comments through the Federal eRulemaking Portal at
We accept anonymous comments. All comments received will be posted without change to
Documents mentioned in this NPRM as being available in the docket, and all public comments, will be in our online docket at
Marine safety, Navigation (water), Reporting and recordkeeping requirements, Waterways.
For the reasons discussed in the preamble, the Coast Guard is proposing to amend 33 CFR part 100 as follows:
46 U.S.C. 70041; 33 CFR 1.05-1.
(a)
(1) The regulations in this section, along with the regulations of § 100.901, apply to the marine events listed in Table 1 to § 100.903.
(2) These regulations will be enforced for the duration of each event, on or about the dates indicated. Notice of the exact dates and times of the effective period of the regulations with respect to each event, the location of the regulated area, and details concerning of the event will be made public by publication in the Local Notices to Mariners and/or Broadcast Notice to Mariners over VHF-FM radio.
(3) The dates and times of these events are subject to change. In the event of a change to these events, the Coast Guard will publish a Notice of Enforcement with the exact dates and times that the regulated area will be enforced.
(4) Sponsors of events listed in the table to § 100.903 are still required to submit applications for marine event permits in accordance with § 100.15.
(b)
(1) No vessel may enter, transit through, or anchor within the regulated area of any event listed in Table 1 to § 100.903 which has been advertised in accordance with paragraph (a)(2) above without the permission of the Coast Guard Patrol Commander.
(2) Vessel operators desiring to enter or operate within the regulated area shall contact the Coast Guard Patrol Commander to obtain permission to do so. Vessel operators given permission to enter or operate within the regulated area must comply with all directions given to them by the Coast Guard Patrol Commander.
(3) All geographic coordinates in Table 1 to § 100.903 are North American Datum of 1983 (NAD 83).
Coast Guard, DHS.
Notice of proposed rulemaking.
The Coast Guard is proposing to amend the rules that regulate vessel traffic and control navigation on portions of waterways in the Lake Michigan Captain of the Port Zone during events that will introduce safety concerns to life and property on the navigable waters of the United States. This proposed rulemaking will reorganize the table listing these safety zones into four separate tables organized by the State in which the safety zone occurs, make minor formatting changes for consistency, update the dates listed for some events, consolidate one safety zone, and remove six safety zones that are no longer necessary. We invite your comments on this proposed rulemaking.
Comments and related material must be received by the Coast Guard on or before April 20, 2020.
You may submit comments identified by docket number USCG-2020-0125 using the Federal eRulemaking Portal at
If you have questions about this proposed rulemaking, call or email Chief Petty Officer Kyle Weitzell, Waterways Management Division, Sector Lake Michigan, U.S. Coast Guard; telephone 414-747-7148, email
Recurring events are held on a regular basis on the navigable waters of the Captain of the Port Lake Michigan Zone (COTP) . In the past, the Coast Guard would establish safety zones for these events due to safety conerns specific to each event, primarily fireworks or localized community events which do not require a Coast Guard issued permit and are not subject to the special local regulations of 33 CFR 100. The COTP has determined that potential hazards associated with the events exist, and these safety zones have been established to protect safety of life and property for the maritime public and event participants from the hazards associated with these events. In the past, the Coast Guard has not received public comments or concerns regarding impacts to waterway traffic as a result of these regularly recurring safety zones.
This proposed rulemaking would provide consistency to notify the public in a timely manner through permanent publication in Title 33 of the Code of Federal Regulations. The table in this proposed rule would list each regularly recurring safety zone, as administered by the Coast Guard and enforced by COTP Lake Michigan.
By consolidating two regulations into a single regulation and making the proposed formatting updates, the Coast Guard will improve the accuracy of this information, make the regulations easier to use, and reduce the administrative burden to manage multiple regulations. The Coast Guard is proposing this rulemaking under authority in 46 U.S.C. 70034 (previously 33 U.S.C. 1231).
The COTP Lake Michigan is proposing to reorganize the one table listing these safety zones into four separate tables organized by the State in which the safety zone occurs, make minor formatting changes for consistency, update the dates listed for some events, consolidate two regulations into a single regulation, and remove six safety zones. In this rulemaking, the Coast Guard proposes to remove § 165.935 and revise § 165.929 to consolidate the regulation contained § 165.935 into Table 4 of § 165.929. Aditionally, six existing events listed as safety zones in 33 CFR 165.929, specifically those events listed in §§ Table 165.929(e)(30), Table 165.929(e)(51), Table 165.929(f)(17), Table 165.929(f)(18), Table 165.929(g)(2), and Table 165.929(g)(4), would be moved to § 100.903 through a separate rulemaking (Docket Number USCG-2020-0124). Furthermore, the sponsors of several events listed have changed the dates that they hold their events, requiring the Coast Guard issue notices of enforcement for these changes each year. Updating these dates will eliminate the need to issue notices of enforcement as a regular occurance. Lastly, the table of safety zones in § 165.929 would be reformatted into four separate tables, organized by the State in which the safety zone occurs. Each safety zone would be listed chronologically and then alphabetically by city. This rulemaking will not substantially change the details of any event.
As large numbers of spectator vessels and marine traffic are expected to congregate around the event locations or due to inherent risks involved in certain types of waterway activities, the regulated areas that would be listed in the table are needed to protect all waterway users. During the enforcement period of the regulated areas, persons and vessels would be prohibited from entering, transiting through, and remaining, anchoring, or mooring within the regulated area unless specifically authorized by the COTP or a designated representative. The Coast Guard may be assisted by other Federal, State, or local agencies in the enforcement of these regulated areas.
We developed this proposed rule after considering numerous statutes and Executive orders related to rulemaking. Below we summarize our analyses based on a number of these statutes and Executive orders, and we discuss First Amendment rights of protestors.
Executive Orders 12866 and 13563 direct agencies to assess the costs and benefits of available regulatory alternatives and, if regulation is necessary, to select regulatory approaches that maximize net benefits. Executive Order 13771 directs agencies to control regulatory costs through a budgeting process. This NPRM has not been designated a “significant regulatory action,” under Executive Order 12866. Accordingly, the NPRM has not been reviewed by the Office of Management and Budget (OMB), and
The Coast Guard has previously promulgated safety zones in § 165 for all event areas contained within this proposed regulation and has not received notice of any negative impact caused by the regulations. By consolidating these regulations into a single regulation and making the proposed formatting changes, the Coast Guard will improve the accuracy of this information, make the regulations easier to use, and reduce the administrative burden to manage multiple regulations.
The Regulatory Flexibility Act of 1980, 5 U.S.C. 601-612, as amended, requires Federal agencies to consider the potential impact of regulations on small entities during rulemaking. The term “small entities” comprises small businesses, not-for-profit organizations that are independently owned and operated and are not dominant in their fields, and governmental jurisdictions with populations of less than 50,000. The Coast Guard certifies under 5 U.S.C. 605(b) that this proposed rule would not have a significant economic impact on a substantial number of small entities.
While some owners or operators of vessels intending to transit the safety zone may be small entities, for the reasons stated in section IV.A above, this proposed rule would not have a significant economic impact on any vessel owner or operator.
If you think that your business, organization, or governmental jurisdiction qualifies as a small entity and that this rule would have a significant economic impact on it, please submit a comment (see
Under section 213(a) of the Small Business Regulatory Enforcement Fairness Act of 1996 (Public Law 104-121), we want to assist small entities in understanding this proposed rule. If the rule would affect your small business, organization, or governmental jurisdiction and you have questions concerning its provisions or options for compliance, please call or email the person listed in the
This proposed rule would not call for a new collection of information under the Paperwork Reduction Act of 1995 (44 U.S.C. 3501-3520).
A rule has implications for federalism under Executive Order 13132 (Federalism), if it has a substantial direct effect on the States, on the relationship between the National Government and the States, or on the distribution of power and responsibilities among the various levels of government. We have analyzed this proposed rule under that Order and have determined that it is consistent with the fundamental federalism principles and preemption requirements described in Executive Order 13132.
Also, this proposed rule does not have tribal implications under Executive Order 13175 (Consultation and Coordination with Indian Tribal Governments) because it would not have a substantial direct effect on one or more Indian tribes, on the relationship between the Federal Government and Indian tribes, or on the distribution of power and responsibilities between the Federal Government and Indian tribes. If you believe this proposed rule has implications for federalism or Indian tribes, please call or email the person listed in the
The Unfunded Mandates Reform Act of 1995 (2 U.S.C. 1531-1538) requires Federal agencies to assess the effects of their discretionary regulatory actions. In particular, the Act addresses actions that may result in the expenditure by a State, local, or tribal government, in the aggregate, or by the private sector of $100,000,000 (adjusted for inflation) or more in any one year. Though this proposed rule would not result in such an expenditure, we do discuss the effects of this rule elsewhere in this preamble.
We have analyzed this proposed rule under Department of Homeland Security Directive 023-01, Rev. 1, associated implementing instructions, and Environmental Planning COMDTINST 5090.1 (series), which guide the Coast Guard in complying with the National Environmental Policy Act of 1969 (42 U.S.C. 4321-4370f), and have made a preliminary determination that this action is one of a category of actions that do not individually or cumulatively have a significant effect on the human environment. This proposed rule involves the consolidation and making formatting changes of existing safety zones. Normally such actions are categorically excluded from further review under paragraph L60(a) of Appendix A, Table 1 of DHS Instruction Manual 023-01-001-01, Rev. 1. A preliminary Record of Environmental Consideration supporting this determination is available in the docket where indicated under
The Coast Guard respects the First Amendment rights of protesters. Protesters are asked to call or email the person listed in the
We view public participation as essential to effective rulemaking, and will consider all comments and material received during the comment period. Your comment can help shape the outcome of this rulemaking. If you submit a comment, please include the docket number for this rulemaking, indicate the specific section of this document to which each comment applies, and provide a reason for each suggestion or recommendation.
We encourage you to submit comments through the Federal eRulemaking Portal at
We accept anonymous comments. All comments received will be posted without change to
Documents mentioned in this NPRM as being available in the docket, and all public comments, will be in our online docket at
Harbors, Marine safety, Navigation (water), Reporting and recordkeeping requirements, Security measures, Waterways.
For the reasons discussed in the preamble, the Coast Guard is proposing to amend 33 CFR part 165 as follows:
46 U.S.C. 70034, 70051; 33 CFR 1.05-1, 6.04-1, 6.04-6, and 160.5; Department of Homeland Security Delegation No. 0170.1.
(a)
(1) The general regulations in § 165.23.
(2) All vessels must obtain permission from the Captain of the Port (COTP) Lake Michigan or his or her designated representative to enter, move within, or exit a safety zone established in this section when the safety zone is enforced. Vessels and persons granted permission to enter one of the safety zones listed in this section must obey all lawful orders or directions of the COTP Lake Michigan or his or her designated representative. Upon being hailed by the U.S. Coast Guard by siren, radio, flashing light or other means, the operator of a vessel must proceed as directed.
(3) The enforcement dates and times for each of the safety zones listed in Table 1 through Table 4 of this section are subject to change, but the duration of enforcement would remain the same, or nearly the same, as stated in Table 1 through Table 4 of this section. In the event of a change, the COTP Lake Michigan will provide notice to the public by publishing a Notice of Enforcement in the
(b)
(1)
(2)
(3)
(c)
(d)
(e)
Agricultural Marketing Service, USDA.
Notice and request for comments.
In accordance with the Paperwork Reduction Act of 1995, this notice announces the Agricultural Marketing Service's (“AMS”) intention to request an extension for the form currently used by marketers to apply for exemption from market promotion assessments under Federal marketing order programs.
Comments on this notice are due by May 18, 2020 to be assured of consideration.
Interested persons are invited to submit written comments concerning this notice. Comments must be sent to the Docket Clerk, Marketing Order and Agreement Division, Specialty Crops Program, AMS, USDA, 1400 Independence Avenue SW, STOP 0237, Washington, DC 20250; Fax: (202) 720-8938; or internet:
Andrew Hatch, Supervisory Marketing Specialist, Marketing Order and Agreement Division, Specialty Crops Program, AMS, USDA, 1400 Independence Avenue SW, Stop 0237, Room 1406-S, Washington, DC 20250-0237; Tel: (202) 720-2491, Email:
Small businesses may request information on this notice by contacting Richard Lower, Marketing Order and Agreement Division, Specialty Crops Program, AMS, USDA, 1400 Independence Avenue SW, Stop 0237, Room 1406-S, Washington, DC 20250-0237; Tel: (202) 720-2491; or Email:
Under the Agricultural Marketing Agreement Act of 1937 as amended (7 U.S.C. 601-674), marketing orders may authorize production and marketing research, including paid advertising, to promote various commodities, which is paid for by assessments that are levied on the handlers who are regulated by the Orders.
On May 13, 2002, the Farm Security and Rural Investment Act (7 U.S.C. 7901) amended the Federal Agriculture Improvement and Reform Act of 1996 (7 U.S.C. 7201), exempting any person who handles or markets solely 100 percent organic products from paying these assessments with respect to any agricultural commodity that is produced on a certified organic farm, as defined in the Organic Foods Production Act of 1990 (7 U.S.C. 6502). A certified organic handler can apply for this exemption by completing a “Certified Organic Handler Application for Exemption from Market Promotion Assessments Paid Under Federal Marketing Orders,” and submitting it to the applicable marketing order committee or board.
Section 900.700 of the regulations (7 CFR part 900.700) provides for exemption from assessments. This notice applies to the following marketing orders: 7 CFR parts 906, Oranges and grapefruit grown in Lower Rio Grande Valley in Texas; 915, Avocados grown in south Florida; 922, Apricots grown in designated counties in Washington; 923, Sweet cherries grown in designated counties in Washington; 925, Grapes grown in a designated area of southeastern California; 927, Pears grown in Oregon and Washington; 929, Cranberries grown in Massachusetts, Rhode Island, Connecticut, New Jersey, Wisconsin, Michigan, Minnesota, Oregon, Washington, and Long Island in New York; 930, Tart cherries grown in Michigan, New York, Pennsylvania, Oregon, Utah, Washington, and Wisconsin; 932, Olives grown in California; 948, Irish potatoes grown in Colorado; 955, Vidalia onions grown in Georgia; 956, sweet onions grown in the Walla Walla Valley of southeast Washington and northeast Oregon; 958, Onions grown in certain designated counties in Idaho, and Malheur County, Oregon; 959, Onions grown in South Texas; 966, Tomatoes grown in Florida; 981, Almonds grown in California; 982, Hazelnuts grown in Oregon and Washington; 984, Walnuts grown in California; 985, Spearmint oil produced in Washington, Idaho, Oregon, and parts of Nevada and Utah; 986, Pecans produced in Alabama, Arkansas, Arizona, California, Florida, Georgia, Kansas, Louisiana, Missouri, Mississippi, North Carolina, New Mexico, Oklahoma, South Carolina, and Texas; 987, Domestic dates produced or packed in Riverside County, California; 989, Raisins produced from grapes grown in California; and 993, Dried prunes produced in California.
The information collected is used only by authorized marketing order committee or board employees, who are the primary users of the information, and by authorized representatives of the USDA, including the AMS Specialty Crops Program's regional and headquarters staff, who are the secondary users of the information.
Comments are invited on: (1) Whether the proposed collection of information is necessary for the proper performance of the functions of the Agency, including whether the information will have practical utility; (2) the accuracy of the Agency's estimate of the burden of the proposed collection of information, including the validity of the methodology and assumptions used; (3) ways to enhance the quality, utility and clarity of the information to be collected; and (4) was to minimize the burden of the collection of information on those who are to respond, including through the use of appropriate automated, electronic, mechanical, or other technological collection techniques or other forms of information technology.
The Department of Agriculture has submitted the following information collection requirement(s) to OMB for review and clearance under the Paperwork Reduction Act of 1995, Public Law 104-13. Comments are required regarding; whether the collection of information is necessary for the proper performance of the functions of the agency, including whether the information will have practical utility; the accuracy of the agency's estimate of burden including the validity of the methodology and assumptions used; ways to enhance the quality, utility and clarity of the information to be collected; and ways to minimize the burden of the collection of information on those who are to respond, including through the use of appropriate automated, electronic, mechanical, or other technological collection techniques or other forms of information technology.
Comments regarding this information collection received by April 20, 2020 will be considered. Written comments and recommendations for the proposed information collection should be submitted within 30 days of the publication of this notice on the following website
An agency may not conduct or sponsor a collection of information unless the collection of information displays a currently valid OMB control number and the agency informs potential persons who are to respond to the collection of information that such persons are not required to respond to the collection of information unless it displays a currently valid OMB control number.
Food Safety and Inspection Service, USDA.
Notice and request for comments.
The Food Safety and Inspection Service (FSIS) is announcing that it will allow establishments to use the implied nutrient content claim “healthy” on their labels which: (1) Are not low in total fat, but have a fat profile makeup of predominantly mono and polyunsaturated fats; or (2) contain at least ten percent of the Daily Value (DV) per reference amount customarily consumed (RACC) of potassium or vitamin D. FSIS is making this announcement to maintain consistent requirements for food labels by allowing the same uses of the claim “healthy” for meat and poultry products as are currently allowed for food products under the Food and Drug Administration's (FDA's) jurisdiction.
This notice is applicable March 19, 2020. Submit comments on or before May 18, 2020.
FSIS invites interested persons to submit comments on this notice. Comments may be submitted by one of the following methods:
Jeff Canavan, Deputy Director, Labeling and Program Delivery Staff, Office of Policy and Program Development, Food Safety and Inspection Service, U.S. Department of Agriculture, Stop Code 3784, Patriots Plaza 3, 9-146, 1400 Independence Avenue SW, Washington, DC 20250-3700; Telephone (301) 504-0879; Fax (202) 245-4792.
FSIS is the public health regulatory agency in the USDA that is responsible for ensuring that the nation's commercial supply of meat and poultry products is safe, wholesome, and accurately labeled and packaged. Under the Federal Meat Inspection Act (FMIA) (21 U.S.C. 601-695, at 607) and the Poultry Products Inspection Act (PPIA) (21 U.S.C. 451-470, at 457), the labels of meat and poultry products must be approved by the Secretary of Agriculture, who has delegated this authority to FSIS, before these products can enter commerce. The FMIA and PPIA also prohibit the sale or offer for sale by any person, firm, or corporation of any article in commerce under any name or other marking or labeling that is false or misleading (21 U.S.C. 601(n) and 607(d); 21 U.S.C. 453(h) and 457(c)).
FSIS regulations (9 CFR 317.363(b) and 381.463(b) define the parameters for the use of the implied nutrient content claim “healthy” or any other derivative of the term “health” and similar terms on meat and poultry product labeling. The definitions establish specific criteria for nutrients to limit in the diet, such as total fat, saturated fat, cholesterol, and sodium; and requirements for nutrients to encourage in the diet, including vitamin A, vitamin C, calcium, iron, protein, and fiber.
On May 10, 1994, FSIS published a final rule defining the term “healthy” that included new standards for sodium (59 FR 24220). FSIS created initial “first-tier” sodium standards, and “second-tier” sodium standards that would become more rigorous after a 24-month time period. After extending the first-tier sodium standards in the
In December 2015, USDA and the U.S. Department of Health and Human Services (HHS) published the
On May 27, 2016, FDA issued two final rules updating the Nutrition Facts label and serving size information for packaged foods (81 FR 33742 and 81 FR 34000). The above-mentioned
On September 28, 2016, FDA announced in the
Additionally, in the same
In the
FDA also stated, in the notice, that it intends to exercise enforcement discretion with respect to the current requirement that any food bearing the nutrient content claim “healthy” contain at least ten percent of the DV per RACC of vitamin A, vitamin C, calcium, iron, protein, or fiber, if the food instead contains at least ten percent of the DV per RACC of potassium or vitamin D. FDA's guidance document is available at
To maintain consistent requirements for food labels, FSIS has used its enforcement discretion to allow the same uses of the claim “healthy” for meat and poultry products as are
Specifically, FSIS has allowed and will continue to allow the implied nutrient content claim “healthy” on foods that have a fat profile of predominantly mono and polyunsaturated fats (
FSIS's LPDS has reviewed many proposed labels referencing FDA's “healthy” notice, and most have contained errors and needed correction. If a company wishes to use FDA's “healthy” claim, they will first need to submit at least one label sketch to LPDS for approval.
A corporation's parent-company only needs to submit one label application for a product produced in multiple establishments that are owned by the corporation. Subsequent similar labels for other products that use FDA's “healthy” claim can be generically approved. Submitting one label and receiving approval helps ensure that the rest of the labels are in compliance with FDA and FSIS regulations. Labels using the modified “healthy” claim must be submitted to LPDS in the new FDA nutrition panel format.
FSIS will continue to allow the use of implied nutrient content claim “healthy” on foods that have a fat profile of predominantly mono and polyunsaturated fats (
Public awareness of all segments of rulemaking and policy development is important. Consequently, FSIS will announce this
Pursuant to the Congressional Review Act at 5 U.S.C. 801
No agency, officer, or employee of the USDA shall, on the grounds of race, color, national origin, religion, sex, gender identity, sexual orientation, disability, age, marital status, family/parental status, income derived from a public assistance program, or political beliefs, exclude from participation in, deny the benefits of, or subject to discrimination, any person in the United States under any program or activity conducted by the USDA.
To file a complaint of discrimination, complete the USDA Program Discrimination Complaint Form, which may be accessed online at:
Send your completed complaint form or letter to USDA by mail, fax, or email:
Persons with disabilities who require alternative means for communication (Braille, large print, audiotape, etc.) should contact USDA's TARGET Center at (202) 720-2600 (voice and TDD).
Done at Washington, DC.
Rural Business-Cooperative Service, Rural Housing Service, and Rural Utilities Service, USDA (Rural Development).
Notice of Solicitation of Applications; Amendment.
Rural Development (Agency) published a notice of solicitation of applications in the
Please contact your respective Rural Development State Office listed here:
In the
In the second column on page 11947, under
To apply for SECD reserve funds, applicants must submit Form RD 1980-88, “Strategic Economic and Community Development (section 6025)” by the underlying program application deadlines or June 30, 2020, whichever comes first.
The Department of Commerce will submit to the Office of Management and Budget (OMB) for clearance the following proposal for collection of information under the provisions of the Paperwork Reduction Act: The Housing Vacancy Survey. This survey, conducted in conjunction with the Current Population Survey, is collected from a sample of vacant housing units identified in the monthly CPS sample.
Written comments and recommendations for the proposed information collection should be submitted within 30 days of the publication of this notice on the following website <
The Department of Commerce will submit the following information collection request to the Office of Management and Budget (OMB) for review and clearance in accordance with the Paperwork Reduction Act of 1995, on or after the date of publication of this notice. The public is invited to submit comments on this request.
Written comments and recommendations for the proposed information collection should be submitted within 30 days of the publication of this notice on the following website
Copies of this submission may be obtained from Mark Crace, Bureau of Industry and Security, 1401 Constitution Avenue, Suite 2099B, Washington, DC 20233, or viewing the entire information collection request at
Comments are invited on: (1) Whether the collection of information is necessary for the proper performance of the functions of the Department, including whether the information will have practical utility; (2) if the information will be processed and used in a timely manner; (3) the accuracy of the agency's estimates of the burden and cost of the collection of information, including the validity of the methodology and assumptions used; (4) ways to enhance the quality, utility and clarity of the information collection; and (5) ways to minimize the burden of the collection of information on those who are to respond, including the use of automated collection techniques or other forms of information technology.
44 U.S.C. 3501
The Department of Commerce will submit the following information collection request to the Office of Management and Budget (OMB) for review and clearance in accordance with the Paperwork Reduction Act of 1995 (44 U.S.C. Chapter 35), on or after the date of publication of this notice. The public is invited to submit comments on this request.
Written comments and recommendations for the proposed information collection should be submitted within 30 days of the publication of this notice on the following website
Copies of this submission may be obtained from Mark Crace, Bureau of Industry and Security, 1401 Constitution Avenue, Suite 2099B, Washington, DC 20233, or viewing the entire information collection request at
Enforcement and Compliance, International Trade Administration, Department of Commerce.
The Department of Commerce (Commerce) is rescinding the administrative review of the antidumping duty order on carbazole violet pigment 23 (CVP 23) from India for the period December 1, 2018 through November 30, 2019.
Applicable March 19, 2020.
George Ayache, AD/CVD Operations, Office VIII, Enforcement and Compliance, International Trade Administration, U.S. Department of Commerce, 1401 Constitution Avenue NW, Washington, DC 20230; telephone: (202) 482-2623.
On December 6, 2019, Commerce published a notice of opportunity to request an administrative review of the antidumping duty order on CVP 23 from India for the period of review (POR) December 1, 2018 through November 30, 2019.
On December 31, 2019, Pidilite Industries Limited (Pidilite), an Indian producer and exporter of CVP 23, requested an administrative review of the order of CVP 23 from India with respect to its entries of subject merchandise during the POR.
Pursuant to 19 CFR 351.213(d)(1), Commerce will rescind an administrative review, in whole or in part, if the party that requested the review withdraws its request within 90 days of the date of publication of the notice of initiation of the requested review. In this case, Pidilite timely withdrew its request by the 90-day deadline, and no other party requested an administrative review of the antidumping duty order. Therefore, we are rescinding the administrative review of the antidumping duty order on CVP 23 from India for the period December 1, 2018 through November 30, 2019, in its entirety, in accordance with 19 CFR 351.213(d)(1).
Commerce intends to instruct U.S. Customs and Border Protection (CBP) to assess antidumping duties on all appropriate entries of CVP 23 from India during the POR at rates equal to the cash deposit of estimated antidumping duties required at the time of entry, or withdrawal from warehouse, for consumption, in accordance with 19 CFR 351.212(c)(1)(i). Commerce intends to issue appropriate assessment instructions to CBP 15 days after the date of publication of this notice in the
This notice serves as a final reminder to importers of their responsibility under 19 CFR 351.402(f)(2) to file a certificate regarding the reimbursement of antidumping duties prior to liquidation of the relevant entries during this review period. Failure to comply with this requirement could result in Commerce's presumption that reimbursement of the antidumping duties occurred and the subsequent assessment of doubled antidumping duties.
This notice also serves as a reminder to parties subject to administrative protective order (APO) of their responsibility concerning the disposition of proprietary information disclosed under APO in accordance with 19 CFR 351.305(a)(3). Timely written notification of the return or destruction of APO materials, or conversion to judicial protective order, is hereby requested. Failure to comply with the regulations and terms of an APO is a violation which is subject to sanction.
We intend to issue and publish this notice in accordance with sections 751(a)(1) and 777(i)(1) of the Act, and 19 CFR 351.213(d)(4).
Enforcement and Compliance, International Trade Administration, Department of Commerce.
The Department of Commerce (Commerce) is rescinding the administrative review of the countervailing duty (CVD) order on steel concrete reinforcing bar (rebar) from the Republic of Turkey (Turkey), covering the period January 1, 2018, through December 31, 2018.
Applicable March 19, 2020.
Kathryn Turlo, AD/CVD Operations, Office VII, Enforcement and Compliance, International Trade Administration, U.S. Department of Commerce, 1401 Constitution Avenue NW, Washington, DC 20230; telephone: (202) 482-3870.
On July 1, 2019, Commerce published in the
Pursuant to 19 CFR 351.213(d)(3), it is Commerce's practice to rescind an administrative review of a CVD order where it concludes that there were no reviewable entries of subject merchandise during the POR.
Commerce will instruct CBP to assess CVDs on all appropriate entries. Because Commerce is rescinding this review in its entirety, the entries to which this administrative review pertained shall be assessed at rates equal to the cash deposit of estimated CVDs required at the time of entry, or withdrawal from warehouse, for consumption, in accordance with 19 CFR 351.212(c)(1)(i). Commerce intends to issue appropriate assessment instructions to CBP 15 days after the publication of this notice in the
This notice also serves as a final reminder to parties subject to administrative protective order (APO) of their responsibility concerning the return or destruction of proprietary information disclosed under APO in accordance with 19 CFR 351.305(a)(3), which continues to govern business proprietary information in this segment of the proceeding. Timely written notification of the return or destruction of the APO materials, or conversion to judicial protective order, is hereby requested. Failure to comply with regulations and terms of an APO is a violation, which is subject to sanction.
This notice is issued and published in accordance with sections 751(a)(1) and 777(i) of the Act, and 19 CFR 351.213(d)(4).
Enforcement and Compliance, International Trade Administration, Department of Commerce.
The Department of Commerce (Commerce) determines that mandatory respondents, Icdas Celik Enerji Tersane ve Ulasim Sanayi A.S. (Icdas) and Kaptan Demir Celik Endüstrisi ve Ticaret A.S. (Kaptan Demir) did not make sales of steel concrete reinforcing bar (rebar) from the Republic of Turkey (Turkey) at less than normal value (NV) during the period of review (POR), March 7, 2017 through June 30, 2018.
Applicable March 19, 2020.
Thomas Dunne or Kathryn Wallace, AD/CVD Operations, Office IV, Enforcement and Compliance, International Trade Administration, U.S. Department of Commerce, 1401 Constitution Avenue NW, Washington, DC 20230; telephone: (202) 482-2328 or (202) 482-6251, respectively.
Commerce published the
The product covered by the review is rebar from Turkey. For a full description of the scope,
All issues raised in the case and rebuttal briefs by parties to this administrative review are addressed in the Issues and Decision Memorandum. A list of the issues raised is attached to this notice as Appendix II. The Issues and Decision Memorandum is a public document and is on file electronically via Enforcement and Compliance's Antidumping and Countervailing Duty Centralized Electronic Service System (ACCESS). ACCESS is available to registered users at
Based on our review of the record and comments received from interested parties, we made the following revisions:
• For both Icdas and Kaptan Demir, we relied on actual weight for the calculation of each respondent's estimated weighted-average dumping margin;
• For both Icdas and Kaptan Demir, we revised certain currency calculation errors in the home and U.S. market programs;
• We relied on Icdas's sales to affiliated resellers that passed the arms-length test;
• We revised the USMONTH calculation in Icdas's margin program; and
• We deducted the movement expenses of affiliated resellers from Icdas's normal value.
We have determined the following weighted-average dumping margins exist for the period March 7, 2017 through June 30, 2018:
The statute and Commerce's regulations do not address the establishment of a weighted-average dumping margin to be applied to companies not selected for individual examination when Commerce limits its examination in an administrative review pursuant to section 777A(c)(2) of the Act. Generally, Commerce looks to section 735(c)(5) of the Act, which provides instructions for calculating the all-others rate in a less-than-fair-value (LTFV) investigation, for guidance when calculating the weighted-average dumping margin for companies which were not selected for individual examination in an administrative review. Under section 735(c)(5)(A) of the Act, the all-others rate is normally “an amount equal to the weighted-average of the estimated weighted-average dumping margins established for exporters and producers individually investigated, excluding any zero or
Consistent with section 735(c)(5)(B) of the Act, we have determined that a reasonable method for determining the weighted-average dumping margin for each of the non-selected companies is to use the average of the weighted-average dumping margin calculated for the mandatory respondents (
We intend to disclose the calculations performed to parties in this proceeding within five days after publication of these final results in the
Upon completion of this administrative review, Commerce shall determine and U.S. Customs and Border Protection (CBP) shall assess antidumping duties on all appropriate entries. Because the weighted-average dumping margins of Kaptan Demir, Icdas, and the four firms not selected for individual examination have been determined to be zero within the meaning of 19 CFR 351.106(c), we will instruct CBP to liquidate the appropriate entries without regard to antidumping duties. In accordance with Commerce's practice, for entries of subject merchandise during the POR for which Kaptan Demir and Icdas did not know that the merchandise was destined for the United States, we will instruct CBP to liquidate such entries at the all-others rate if there is no company-specific rate for the intermediate company(ies) involved in the transaction.
The following cash deposit requirements will be effective for all shipments of rebar from Turkey entered, or withdrawn from warehouse, for consumption on or after the date of publication of the final results of this administrative review, as provided by section 751(a)(2)(C) of the Act: (1) The cash deposit rate for the respondents noted above will be the rate established in the final results of this administrative review; (2) for merchandise exported by manufacturers or exporters not covered in this administrative review but covered in a prior segment of the proceeding, the cash deposit rate will continue to be the company-specific rate published for the most recently completed segment of this proceeding; (3) if the exporter is not a firm covered in this review, a prior review, or the LTFV investigation, but the producer is, the cash deposit rate will be the rate established for the most recently completed segment of this proceeding for the producer of the subject merchandise; and (4) the cash deposit rate for all other producers or exporters will continue to be 7.26 percent, the all-others rate established in the LTFV investigation.
This notice also serves as a final reminder to importers of their
This notice also serves as a reminder to parties subject to administrative protective orders (APO) of their responsibility concerning the return or destruction of proprietary information disclosed under APO in accordance with 19 CFR 351.305(a)(3), which continues to govern business proprietary information in this segment of the proceeding. Timely written notification of the return/destruction of APO materials, or conversion to judicial protective order, is hereby requested. Failure to comply with the regulations and the terms of an APO is a sanctionable violation.
We are issuing and publishing this notice in accordance with sections 751(a)(1) and 777(i)(1) of the Act, and 19 CFR 351.221(b)(5).
The merchandise subject to this review is steel concrete reinforcing bar imported in either straight length or coil form (rebar) regardless of metallurgy, length, diameter, or grade or lack thereof. Subject merchandise includes deformed steel wire with bar markings (
The subject merchandise includes rebar that has been further processed in the subject countries or a third country, including but not limited to cutting, grinding, galvanizing, painting, coating, or any other processing that would not otherwise remove the merchandise from the scope of these orders if performed in the country of manufacture of the rebar. Specifically excluded are plain rounds (
The subject merchandise is classifiable in the Harmonized Tariff Schedule of the United States (HTSUS) primarily under item numbers 7213.10.0000, 7214.20.0000, and 7228.30.8010. The subject merchandise may also enter under other HTSUS numbers including 7215.90.1000, 7215.90.5000, 7221.00.0017, 7221.00.0018, 7221.00.0030, 7221.00.0045, 7222.11.0001, 7222.11.0057, 7222.11.0059, 7222.30.0001, 7227.20.0080, 7227.90.6030, 7227.90.6035, 7227.90.6040, 7228.20.1000, and 7228.60.6000.
HTSUS numbers are provided for convenience and customs purposes; however, the written description of the scope remains dispositive.
The Department of Commerce will submit the following information collection request to the Office of Management and Budget (OMB) for review and clearance in accordance with the Paperwork Reduction Act of 1995, on or after the date of publication of this notice. The public is invited to submit comments on this request.
This information collection request may be viewed at
Written comments and recommendations for the proposed information collection should be submitted within 30 days of the publication of this notice on the following website
National Marine Fisheries Service (NMFS), National Oceanic and Atmospheric Administration (NOAA), Commerce.
Notice of public meeting.
NMFS announces a public meeting of the Permanent Advisory Committee (PAC) to advise the U.S. Commissioners to the Commission for the Conservation and Management of Highly Migratory Fish Stocks in the Western and Central Pacific Ocean (WCPFC) on April 28, 2020. Meeting topics are provided under the
The meeting of the PAC will be held via conference call on April 28, 2020, from 10 a.m. to 12 p.m. Hawaii Standard Time (HST) (or until business is concluded). Members of the public may submit written comments on meeting topics or materials; comments must be received by April 23, 2020.
The public meeting will be conducted via conference call. For details on how to call in to the conference line or to submit comments, please contact Emily Reynolds, NMFS Pacific Islands Regional Office; telephone: 808-725-5039; email:
Emily Reynolds, NMFS Pacific Islands Regional Office; 1845 Wasp Blvd., Bldg. 176, Honolulu, HI 96818; telephone: 808-725-5039; facsimile: 808-725-5215; email:
In accordance with the Western and Central Pacific Fisheries Convention Implementation Act (16 U.S.C. 6901
The purpose of the April 28, 2020, conference call is to discuss outcomes of the 2019 regular session of the WCPFC (WCPFC16), U.S. priorities leading up to the 2020 regular session of the WCPFC (WCPFC17), and potential management measures for tropical tunas and other issues of interest.
The conference call is accessible to people with disabilities. Requests for sign language interpretation or other auxiliary aids should be directed to Emily Reynolds at 808-725-5039 by April 14, 2020.
National Oceanic and Atmospheric Administration, Commerce.
Notice of meeting cancellation.
On February 28, 2020, the National Oceanic and Atmospheric Administration (NOAA) published a notice that announced the public meeting of The Advisory Committee on Commercial Remote Sensing (“ACCRES” or “the Committee”) on March 18, 2020. This meeting has been cancelled due to developments of COVID-19 (Coronavirus) in the region.
Tashaun Pierre, NOAA/NESDIS/CRSRA, 1335 East West Highway, G-101, Silver Spring, Maryland 20910; (301) 713-7047 or
Given the evolving environment and growing concerns regarding COVID-19, NOAA has made the difficult decision to postpone the 27th Meeting of the Advisory Board on Commercial Remote Sensing (ACCRES) scheduled for March 18, 2020. We will reschedule this meeting and communicate the new date and location sometime in the near future. Notice of the rescheduled meeting will be published in the
85 FR 15142, March 17, 2020.
10:00 a.m., Thursday, March 19, 2020.
The meeting has been canceled.
Christopher Kirkpatrick, Secretary of the Commission, 202-418-5964.
5 U.S.C. 552b.
Department of Education (ED), Federal Student Aid (FSA).
Notice.
In accordance with the Paperwork Reduction Act of 1995, ED is proposing an extension of an existing information collection.
Interested persons are invited to submit comments on or before May 18, 2020.
To access and review all the documents related to the information collection listed in this notice, please use
For specific questions related to collection activities, please contact Jon Utz, 202-377-4040.
The Department of Education (ED), in accordance with the Paperwork Reduction Act of 1995 (PRA) (44 U.S.C. 3506(c)(2)(A)), provides the general public and Federal agencies with an opportunity to comment on proposed, revised, and continuing collections of information. This helps the Department assess the impact of its information collection requirements and minimize the public's reporting burden. It also helps the public understand the Department's information collection requirements and provide the requested data in the desired format. ED is soliciting comments on the proposed information collection request (ICR) that is described below. The Department of Education is especially interested in public comment addressing the following issues: (1) Is this collection necessary to the proper functions of the Department; (2) will this information be processed and used in a timely manner; (3) is the estimate of burden accurate; (4) how might the Department enhance the quality, utility, and clarity of the information to be collected; and (5) how might the Department minimize the burden of this collection on the respondents, including through the use of information technology. Please note that written comments received in response to this notice will be considered public records.
Office of Fossil Energy, DOE.
Notice of application.
The Office of Fossil Energy (FE) of the Department of Energy (DOE) gives notice (Notice) of receipt of an application (Application), filed on January 31, 2020, and supplemented on February 7, 2020, by Cameron LNG, LLC (Cameron LNG). Cameron LNG requests blanket authorization to export domestically produced liquefied natural gas (LNG) in a volume equivalent to 254 billion cubic feet (Bcf) of natural gas on a cumulative basis over a two-year period commencing on June 30, 2020. Cameron LNG seeks to export this LNG from the Cameron LNG Terminal located in Cameron and Calcasieu Parishes, Louisiana. Cameron LNG filed the Application under section 3 of the Natural Gas Act (NGA). Protests, motions to intervene, notices of intervention, and written comments are invited.
Protests, motions to intervene, or notices of intervention, as applicable, requests for additional procedures, and written comments are to be filed using procedures detailed in the Public Comment Procedures section no later than 4:30 p.m., Eastern time, April 20, 2020.
Cameron LNG requests a short-term blanket authorization to export LNG from the Cameron LNG Terminal to any country with the capacity to import LNG via ocean-going carrier and with which trade is not prohibited by U.S. law or policy. This includes both countries
Cameron LNG's requests this authorization on its own behalf and as agent for other entities who hold title to the LNG at the time of export. Additional details can be found in the Application and Supplement, posted on the DOE/FE website at:
In reviewing Cameron LNG's request, DOE will consider any issues required by law or policy. DOE will consider domestic need for the natural gas, as well as any other issues determined to be appropriate, including whether the arrangement is consistent with DOE's policy of promoting competition in the marketplace by allowing commercial parties to freely negotiate their own trade arrangements. As part of this analysis, DOE will consider the study entitled,
Additionally, DOE will consider the following environmental documents:
•
•
•
Parties that may oppose this Application should address these issues and documents in their comments and protests, as well as other issues deemed relevant to the Application.
The National Environmental Policy Act (NEPA), 42 U.S.C. 4321
In response to this Notice, any person may file a protest, comments, or a motion to intervene or notice of intervention, as applicable. Interested parties will be provided 30 days from the date of publication of this Notice in which to submit comments, protests, motions to intervene, or notices of intervention.
Any person wishing to become a party to the proceeding must file a motion to intervene or notice of intervention. The filing of comments or a protest with respect to the Application will not serve to make the commenter or protestant a party to the proceeding, although protests and comments received from persons who are not parties will be considered in determining the appropriate action to be taken on the Application. All protests, comments, motions to intervene, or notices of intervention must meet the requirements specified by the regulations in 10 CFR part 590.
Filings may be submitted using one of the following methods: (1) Emailing the filing to
A decisional record on the Application will be developed through responses to this Notice by parties, including the parties' written comments and replies thereto. Additional procedures will be used as necessary to achieve a complete understanding of the facts and issues. If an additional procedure is scheduled, notice will be provided to all parties. If no party requests additional procedures, a final Opinion and Order may be issued based on the official record, including the Application and responses filed by parties pursuant to this Notice, in accordance with 10 CFR 590.316.
The Application is available for inspection and copying in the Office of Regulation, Analysis, and Engagement docket room, Room 3E-042, 1000 Independence Avenue SW, Washington, DC 20585. The docket room is open between the hours of 8:00 a.m. and 4:30 p.m., Monday through Friday, except Federal holidays. The Application and any filed protests, motions to intervene, notices of interventions, and comments will also be available electronically by going to the following DOE/FE Web address:
Take notice that the following hydroelectric application has been filed with the Commission and is available for public inspection.
a.
b.
c.
d.
e.
f.
g.
h.
i.
j.
The Commission strongly encourages electronic filing. Please file comments, recommendations, terms and conditions, and prescriptions using the Commission's eFiling system at
The Commission's Rules of Practice require all intervenors filing documents with the Commission to serve a copy of that document on each person on the official service list for the project. Further, if an intervenor files comments or documents with the Commission relating to the merits of an issue that may affect the responsibilities of a particular resource agency, they must also serve a copy of the document on that resource agency.
k. This application has been accepted and is ready for environmental analysis at this time.
l. The Uintah Hydroelectric Project operates as a run-of-river facility delivering water to the project facilities from primarily the Uinta River as well as Big Springs Creek and Pole Creek. Existing project facilities include: (1) A stop-log diversion structure that conveys flows from Big Springs Creek and a non-project canal to a 916-foot-long, 28-inch-diameter, steel pipeline that connects to the point of diversion on the Uinta River; (2) an 80-foot-long, 4-foot-wide, 3-foot-high overflow-type concrete diversion structure with a 10-foot-high, 6.5-foot-wide steel slide gate on the Uinta River; (3) a concrete structure with manual slide gates for dewatering the main supply canal and returning water to the Uinta River immediately downstream of the Uinta diversion; (4) an emergency slide gate about midway along the main supply canal; (5) a 16-foot-wide, 8-foot-deep, 25,614-foot-long, clay-lined main supply canal which conveys water from Big Springs Creek and the Uinta River; (6) a stop-log diversion structure, with non-functional control gates, which diverts water from Pole Creek; (7) a 6-foot-wide, 4-foot-deep, 6,200-foot-long Pole Creek canal that collects water from the Pole Creek diversion; (8) an 86-inch-wide, 80-inch-long, 43-inch-high transition bay and a 140-foot-long, 14-inch-diameter steel penstock collects water from the Pole Creek canal; (9) a 23-foot by 13-foot concrete forebay structure containing trashracks with 2.5-inch spacing, a headgate that is located at the termination of the main supply canal and the Pole Creek penstock, and an overflow channel; (10) a single 5,238-foot-long, 36-inch-diameter polyurethane and steel penstock which delivers water to a concrete powerhouse with two Pelton turbines driving two 600-kilowatt generators; (11) a 600-foot-long tailrace; (12) a substation immediately adjacent to the powerhouse; (13) a 8.5-mile-long, 24.9-kilovolt single wood pole distribution line; and (14) appurtenant facilities.
The estimated average annual generation is about 6,073 megawatt-hours. Moon Lake proposes to modify the project boundary to remove the currently licensed substation and 8.5-mile-long transmission line.
m. A copy of the application is available for review at the Commission in the Public Reference Room or may be viewed on the Commission's website at
All filings must: (1) Bear in all capital letters the title “COMMENTS”, “REPLY COMMENTS”, “RECOMMENDATIONS,” “TERMS AND CONDITIONS,” or “PRESCRIPTIONS;” (2) set forth in the heading the name of the applicant and the project number of the application to which the filing responds; (3) furnish the name, address, and telephone number of the person submitting the filing; and (4) otherwise comply with the requirements of 18 CFR 385.2001 through 385.2005. All comments, recommendations, terms and conditions or prescriptions must set forth their evidentiary basis and otherwise comply with the requirements of 18 CFR 4.34(b). Agencies may obtain copies of the application directly from the applicant. Each filing must be accompanied by proof of service on all persons listed on the service list prepared by the Commission in this proceeding, in accordance with 18 CFR 4.34(b) and 385.2010.
You may also register online at
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o.
The staff-led technical conference scheduled for March 24 through 26, 2020, in the above-captioned proceeding, will no longer be an in-person technical conference. At this time, the technical conference will still proceed as scheduled, but will be accessible via webcast. A notice with additional information will be issued in this docket to provide an agenda and instructions for those who wish to participate in the technical conference.
Take notice that on March 5, 2020, Columbia Gas Transmission, LLC (Columbia), 700 Louisiana Street, Suite 700, Houston, Texas 77002-2700, filed in the above referenced docket, a prior notice request pursuant to sections 157.205 and 157.208 of the Commission's regulations under the Natural Gas Act (NGA) and Columbia's blanket certificate issued in Docket No. CP83-76-000. Columbia request authorization to construct and operate facilities related to its proposed greenfield point of receipt meter station at the interconnection of Columbia's existing Line L2542 and Nexus Gas Transmission's existing pipeline in Lorain County, Ohio (Quarry Road Meter Station Project). The project will allow Columbia to receive up to 215 million cubic feet per day of receipt capacity for transportation on its pipeline system. The estimated cost of the project is approximately $14.2 million, all as more fully set forth in the application which is on file with the Commission and open to public inspection. The filing may also be viewed on the web at
Any questions regarding this prior notice request should be directed to Sorana Linder, Director, Modernization & Certificates, Columbia Gas Transmission, LLC, 700 Louisiana Street, Suite 700, Houston, Texas 77002-2700, Phone: (832) 320-5209, Email:
Any person or the Commission's staff may, within 60 days after the issuance of the instant notice by the Commission, file pursuant to Rule 214 of the Commission's Procedural Rules (18 CFR 385.214) a motion to intervene or notice of intervention. Any person filing to intervene, or the Commission's staff may, pursuant to section 157.205 of the Commission's Regulations under the NGA (18 CFR 157.205) file a protest to the request. If no protest is filed within the time allowed therefore, the proposed activity shall be deemed to be authorized effective the day after the time allowed for protest. If a protest is filed and not withdrawn within 30 days after the time allowed for filing a protest, the instant request shall be treated as an application for authorization pursuant to section 7 of the NGA.
Pursuant to section 157.9 of the Commission's rules, 18 CFR 157.9, within 90 days of this Notice the Commission staff will either: Complete its environmental assessment (EA) and place it into the Commission's public record (eLibrary) for this proceeding; or issue a Notice of Schedule for Environmental Review. If a Notice of Schedule for Environmental Review is issued, it will indicate, among other milestones, the anticipated date for the Commission staff's issuance of the EA for this proposal. The filing of the EA in the Commission's public record for this proceeding or the issuance of a Notice of Schedule for Environmental Review will serve to notify federal and state agencies of the timing for the completion of all necessary reviews, and the subsequent need to complete all federal authorizations within 90 days of the date of issuance of the Commission staff's EA.
Persons who wish to comment only on the environmental review of this project should submit an original and two copies of their comments to the Secretary of the Commission. Environmental commenters will be placed on the Commission's environmental mailing list and will be notified of any meetings associated with the Commission's environmental review process. Environmental commenters will not be required to serve copies of filed documents on all other parties. However, the non-party commenters will not receive copies of all documents filed by other parties or issued by the Commission and will not have the right to seek court review of the Commission's final order.
The Commission strongly encourages electronic filings of comments, protests, and interventions in lieu of paper using the “eFiling” link at
Take notice that the Commission received the following exempt wholesale generator filings:
Take notice that the Commission received the following electric rate filings:
Take notice that the Commission received the following electric securities filings:
The filings are accessible in the Commission's eLibrary system by clicking on the links or querying the docket number.
Any person desiring to intervene or protest in any of the above proceedings must file in accordance with Rules 211 and 214 of the Commission's Regulations (18 CFR 385.211 and 385.214) on or before 5:00 p.m. Eastern time on the specified comment date. Protests may be considered, but intervention is necessary to become a party to the proceeding.
eFiling is encouraged. More detailed information relating to filing requirements, interventions, protests, service, and qualifying facilities filings can be found at:
Take notice that on February 28, 2020, Enable Gas Transmission, LLC (EGT), 910 Louisiana Street, Suite 4840, Houston, Texas 77002, filed an application pursuant to sections 7(b) and 7(c) of the Natural Gas Act (NGA), and Parts 157 and 284 of the Commission's regulations, requesting authorization to (1) construct, install, own, operate, and maintain various facilities along EGT's existing Line CP (Line CP Modifications), including modifications to two existing compressor stations, modification of three existing meter stations, and construction of two new meter stations; (2) abandon by sale certain assets related to EGT's Line CP, including the new and modified facilities described above, with the exception of Line CP-3 (located in Panola County, Texas) to Enable Gulf Run Transmission, LLC (Gulf Run); and (3) lease a portion of the capacity on Line CP from Gulf Run.
In combination with this filing, Enable Gulf Run Transmission, LLC (Gulf Run), 910 Louisiana Street, Suite 4840, Houston, Texas 77002, filed an application under sections 7(b) and 7(c) of the NGA, and Part 157 of the Commission's regulations requesting authorization to (1) construct, install, own, operate, and maintain approximately 134 miles of new natural gas transmission pipeline (Gulf Run Pipeline), and ancillary facilities to transport up to approximately 1.65 million dekatherms per day of natural gas from EGT's existing Westdale Compressor Station to a delivery point near Starks, Louisiana; (2) acquire certain assets related to EGT's Line CP from EGT; and (3) lease a portion of the capacity on Line CP back to EGT and to re-acquire a portion of such capacity following the term of the lease. Gulf Run also requests a blanket certificate, pursuant to Part 157, Subpart F of the Commission's regulations, authorizing Gulf Run to construct, operate, acquire, and abandon certain facilities, and a blanket certificate pursuant to Part 284, Subpart G of the Commission's regulations authorizing Gulf Run to provide open-access firm and interruptible interstate natural gas transportation services on a self-implementing basis with pre-granted abandonment for such services, all as more fully set forth in the application which is on file with the Commission and open for public inspection. The filing may also be viewed on the web at
Any questions regarding the proposed project should be directed to Lisa Yoho, Senior Director, Regulatory & FERC Compliance, Enable Gulf Run Transmission, LLC, Enable Gas Transmission, LLC, 910 Louisiana Street, Suite 48040, Houston, Texas 77002, or by calling (346) 701-2539 (telephone) or email at
On April 12, 2019, the Commission staff granted the EGT and Gulf Run request to utilize the FERC's Pre-Filing Process and assigned Docket No. PF19-3-000 to staff activities involving the project. Please note that on June 12, 2019, the FERC issued a
Because the environmental review of the submitted projects includes both the Line CP Modifications and the Gulf Run Pipeline, preparation of the EA to comply with the National Environmental Policy Act of 1969 will combine both applications. Within 90 days after the issuance of this Notice of Application, the Commission staff will issue a Notice of Schedule for Environmental Review that will indicate the anticipated date for the Commission's staff issuance of the EA analyzing both proposals. The issuance of a Notice of Schedule for Environmental Review will also serve to notify federal and state agencies of the timing for the completion of all necessary reviews, and the subsequent need to complete all federal authorizations within 90 days of the date of issuance of the Commission staff's EA.
There are two ways to become involved in the Commission's review of this project. First, any person wishing to obtain legal status by becoming a party to the proceedings for this project should, on or before the comment date stated below, file with the Federal Energy Regulatory Commission, 888 First Street NE, Washington, DC 20426, a motion to intervene in accordance with the requirements of the Commission's Rules of Practice and Procedure (18 CFR 385.214 or 385.211) and the Regulations under the NGA (18 CFR 157.10). A person obtaining party status will be placed on the service list maintained by the Secretary of the Commission and will receive copies of all documents filed by the applicant and by all other parties. A party must submit 3 copies of filings made with the Commission and must mail a copy to the applicant and to every other party in the proceeding. Only parties to the proceeding can ask for court review of Commission orders in the proceeding.
However, a person does not have to intervene in order to have comments considered. The second way to participate is by filing with the Secretary of the Commission, as soon as possible, an original and two copies of comments in support of or in opposition to this project. The Commission will consider these comments in determining the appropriate action to be taken, but the filing of a comment alone will not serve to make the filer a party to the proceeding. The Commission's rules require that persons filing comments in opposition to the project provide copies of their protests only to the party or parties directly involved in the protest.
Persons who wish to comment only on the environmental review of this project should submit an original and two copies of their comments to the Secretary of the Commission. Environmental commenters will be placed on the Commission's environmental mailing list, will receive copies of the environmental documents, and will be notified of meetings associated with the Commission's environmental review process. Environmental commenters will not be required to serve copies of filed documents on all other parties. However, the non-party commenters will not receive copies of all documents filed by other parties or issued by the Commission (except for the mailing of environmental documents issued by the
As of the February 27, 2018 date of the Commission's order in Docket No. CP16-4-001, the Commission will apply its revised practice concerning out-of-time motions to intervene in any new Natural Gas Act section 3 or section 7 proceeding.
The Commission strongly encourages electronic filings of comments, protests and interventions in lieu of paper using the “eFiling” link at
Consistent with recent guidance from the Office of Management and Budget, and out of concern for the health of staff that would have been required to participate live, the FDIC has decided to proceed with tomorrow's previously announced open Board of Directors meeting on a notational basis. Vote results and any Board Member statements will be released to the public following the votes.
No earlier notice of this cancellation was practicable.
Federal Mine Safety and Health Review Commission.
Notice.
On a temporary basis, the Federal Mine Safety and Health Review Commission will be sending its issuances through electronic mail and will not be monitoring incoming physical mail or facsimile transmissions.
Applicable: March 16, 2020.
Sarah Stewart, Deputy General Counsel, Office of the General Counsel, Federal Mine Safety and Health Review Commission, at (202) 434-9935;
Until March 31, 2020, case issuances of the Federal Mine Safety and Health Review Commission (FMSHRC), including inter alia notices, decisions, and orders, will be sent only through electronic mail. This includes notices, decisions, and orders described in 29 CFR 2700.4(b)(1), 2700.24(f)(1), 2700.45(e)(3), 2700.54, and 2700.66(a). Further, FMSHRC will not be monitoring incoming physical mail or facsimile described in Procedural Rule § 2700.5(c)(2). If possible, all filings should be e-filed as described in 29 CFR 2700.5(c)(1).
30 U.S.C. 823.
The companies listed in this notice have applied to the Board for approval, pursuant to the Bank Holding Company Act of 1956 (12 U.S.C. 1841
The applications listed below, as well as other related filings required by the Board, if any, are available for immediate inspection at the Federal Reserve Bank indicated. The applications will also be available for inspection at the offices of the Board of Governors. Interested persons may express their views in writing on the standards enumerated in the BHC Act (12 U.S.C. 1842(c)).
Comments regarding each of these applications must be received at the Reserve Bank indicated or the offices of the Board of Governors, Ann E. Misback, Secretary of the Board, 20th Street and Constitution Avenue NW, Washington, DC 20551-0001, not later than April 17, 2020.
1.
The companies listed in this notice have applied to the Board for approval, pursuant to the Bank Holding Company Act of 1956 (12 U.S.C. 1841
The applications listed below, as well as other related filings required by the Board, if any, are available for immediate inspection at the Federal Reserve Bank indicated. The applications will also be available for inspection at the offices of the Board of Governors. Interested persons may express their views in writing on the standards enumerated in the BHC Act (12 U.S.C. 1842(c)).
Comments regarding each of these applications must be received at the Reserve Bank indicated or the offices of the Board of Governors, Ann E. Misback, Secretary of the Board, 20th Street and Constitution Avenue NW, Washington DC 20551-0001, not later than April 20, 2020.
1.
Board of Governors of the Federal Reserve System.
Notice, request for comment; temporary approval of information collection.
The Board of Governors of the Federal Reserve System (Board) invites comment on a proposal to extend for three years, with revision, the Capital Assessments and Stress Testing Reports (FR Y-14A/Q/M; OMB No. 7100-0341). The Board has also temporarily revised the FR Y-14A/Q/M pursuant to the authority delegated to the Board by the Office of Management and Budget (OMB). The temporary revisions are applicable only to reports reflecting the December 31, 2019, as of date.
Comments must be submitted on or before May 18, 2020.
You may submit comments, identified by FR Y-14A, FR Y-14Q, or FR Y-14M, by any of the following methods:
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All public comments are available from the Board's website at
Additionally, commenters may send a copy of their comments to the Office of Management and Budget (OMB) Desk Officer—Shagufta Ahmed—Office of Information and Regulatory Affairs, Office of Management and Budget, New Executive Office Building, Room 10235, 725 17th Street NW, Washington, DC 20503, or by fax to (202) 395-6974.
A copy of the Paperwork Reduction Act (PRA) OMB submission, including the reporting form and instructions, supporting statement, and other documentation will be placed into OMB's public docket files, if approved. These documents will also be made available on the Board's public website at
Federal Reserve Board Clearance Officer—Nuha Elmaghrabi—Office of the Chief Data Officer, Board of Governors of the Federal Reserve System, Washington, DC 20551, (202) 452-3829.
On June 15, 1984, OMB delegated to the Board authority under the PRA to approve and assign OMB control numbers to collections of information conducted or sponsored by the Board. In exercising this delegated authority, the Board is directed to take every reasonable step to solicit comment. In determining whether to approve a collection of information, the Board will consider all comments received from the public and other agencies.
On June 15, 1984, OMB also delegated to the Board authority under the PRA to temporarily approve a revision to a collection of information without providing opportunity for public comment if the Board determines that a change in an existing collection must be instituted quickly and that public participation in the approval process would defeat the purpose of the collection or substantially interfere with the Board's ability to perform its statutory obligation.
The Board's delegated authority requires that the Board, after temporarily approving a collection, publish a notice soliciting public comment on a proposal to extend the collection for a period of up to three years. This notice will serve as both the temporary approval for revisions, as well as the proposal on which the Board will consider all comments received from the public and other agencies.
The Board invites public comment on the following information collection, which is being reviewed under authority delegated by the OMB under the PRA. Comments are invited on the following:
a. Whether the proposed collection of information is necessary for the proper performance of the Board's functions, including whether the information has practical utility;
b. The accuracy of the Board's estimate of the burden of the proposed information collection, including the validity of the methodology and assumptions used;
c. Ways to enhance the quality, utility, and clarity of the information to be collected;
d. Ways to minimize the burden of information collection on respondents, including through the use of automated collection techniques or other forms of information technology; and
e. Estimates of capital or startup costs and costs of operation, maintenance, and purchase of services to provide information.
At the end of the comment period, the comments and recommendations received will be analyzed to determine the extent to which the Board should modify the proposal.
• The FR Y-14A collects quantitative projections of balance sheet, income, losses, and capital across a range of macroeconomic scenarios and qualitative information on methodologies used to develop internal projections of capital across scenarios.
• The quarterly FR Y-14Q collects granular data on various asset classes, including loans, securities, trading assets, and PPNR for the reporting period.
• The monthly FR Y-14M is comprised of three retail portfolio- and loan-level schedules, and one detailed address-matching schedule to supplement two of the portfolio and loan-level schedules.
The data collected through the FR Y-14A/Q/M reports provide the Board with the information needed to help ensure that large firms have strong, firm‐wide risk measurement and management processes supporting their internal assessments of capital adequacy and that their capital resources are sufficient given their business focus, activities, and resulting risk exposures. The reports are used to support the Board's annual Comprehensive Capital Analysis and Review (CCAR) and Dodd-Frank Act Stress Test (DFAST) exercises, which complement other Board supervisory efforts aimed at enhancing the continued viability of large firms, including continuous monitoring of firms' planning and management of liquidity and funding resources, as well as regular assessments of credit, market and operational risks, and associated risk management practices. Information gathered in this data collection is also used in the supervision and regulation of respondent financial institutions. Respondent firms are currently required to complete and submit up to 17 filings each year: One annual FR Y-14A filing, four quarterly FR Y-14Q filings, and 12 monthly FR Y-14M filings. Compliance with the information collection is mandatory.
The Board also has proposed revisions necessary to better identify risk as part of the stress test, such as revisions to the Trading and Counterparty schedules or sub-schedules, as well as capital revisions related to capital simplification, total loss absorbing capacity (TLAC), and standardized approach for counterparty credit risk on derivative contracts (SA-CCR). The Board also proposes to make several clarifications to the instructions that were, in part, prompted by questions the Board has received from reporting institutions. All proposed revisions would be effective for the September 30, 2020, report date for the FR Y-14Q and FR Y-14M, and for the December 31, 2020, report date for the FR Y-14A.
On July 22, 2019, the Board, the Office of the Comptroller of the Currency (OCC), and the Federal Deposit Insurance Corporation (FDIC) (“the agencies”) published a final rule amending their regulatory capital rules
In order to implement the effects of the simplifications rule into the FR Y-14 reports, the Board proposes to make a number of changes to the calculation of Common Equity Tier 1 (CET1) capital, Additional Tier 1 (AT1) capital,
The current regulatory capital calculations in FR Y-14A, Schedule A.1.d (Capital), and FR Y-14Q, Schedule D (Regulatory Capital), require that an institution's capital cannot include MSAs, certain temporary difference DTAs, and significant investments in the common stock of unconsolidated financial institutions in an amount greater than 10 percent of CET1 capital, on an individual basis, and that those three data items combined cannot comprise more than 15 percent of CET1 capital. When the reporting of regulatory capital calculations by non-advanced approaches institutions in accordance with the simplifications rule takes effect, this calculation would be revised to require that MSAs or temporary difference DTAs in an amount greater than 25 percent of CET1 capital, must be deducted from a non-advanced approaches institution's capital. The 15 percent aggregate deduction threshold would be removed. In addition, the simplifications rule would streamline the current three categories of investments in financial institutions (non-significant investments in the capital of unconsolidated financial institutions, significant investments in the capital of unconsolidated financial institutions that are in the form of common stock, and significant investments in the capital of unconsolidated financial institutions that are not in the form of common stock) into a single category, investments in the capital of unconsolidated financial institutions, and require that non-advanced approaches institutions deduct amounts of these investments that exceed 25 percent of CET1 capital. Any investments in excess of the 25 percent threshold would be deducted from capital using the corresponding deduction approach.
Per the final tailoring rules, Category I and II firms are subject to the advanced approaches rule, while Category III and IV firms are not subject to the advanced approaches rule.
The Board proposes to add new items and revise several existing items that relate to CET1 capital deductions to align with the revisions proposed to the FR Y-9C, Schedule HC-R (Regulatory Capital), Part I (Regulatory Capital Components and Ratios). These items would allow Category III and IV firms to reflect the 25 percent of CET1 capital limit for MSAs and certain temporary difference DTAs. The new items would only be required for Category III and IV firms. These new items would be:
• “Investments in the capital of unconsolidated financial institutions, net of associated [deferred tax liabilities] DTLs, that exceed 25 percent common equity tier 1 capital deduction threshold”;
• “Aggregate amount of investments in the capital of unconsolidated financial institutions, net of associated DTLs”;
• “25 percent common equity tier 1 deduction threshold”; and
• “Amount to be deducted from common equity tier 1 due to 25 percent deduction threshold.”
The existing items that the Board proposes to revise are:
• “Significant investments in the capital of unconsolidated financial institutions in the form of common stock, net of associated DTLs, that exceed 10 percent common equity tier 1 capital deduction threshold” (item 37);
• “MSAs, net of associated DTLs, that exceed the common equity tier 1 capital deduction threshold” (item 38);
• “DTAs arising from temporary differences that could not be realized through net operating loss carrybacks, net of related valuation allowances and net of DTLs, that exceed the common equity tier 1 capital deduction threshold” (item 39);
• “Amount of significant investments in the capital of unconsolidated financial institutions in the form of common stock; MSAs, net of associated DTLs; and DTAs arising from temporary differences that could not be realized through net operating loss carrybacks, net of related valuation allowances and net of DTLs; that exceeds the 15 percent common equity tier 1 capital deduction threshold” (item 40);
• “Common equity tier 1 deduction threshold” (item 75);
• “Amount to be deducted from common equity tier 1 due to the deduction threshold” (item 76);
• “Common equity tier 1 deduction threshold” (item 78); and
• “Amount to be deducted from common equity tier 1 due to the deduction threshold” (item 79).
Also, the Board proposes to revise the instructions for the following groups of items and to indicate that they would only be reported by Category I and II firms:
• “Non-significant investments in the capital of unconsolidated financial institutions in the form of common stock, net of DTLs” (items 64 through 66);
• “Significant investments in the capital of unconsolidated financial institutions in the form of common stock, net of DTLs” (items 67 through 71); and
• “Aggregate of items subject to the 15% limit (significant investments, mortgage servicing assets and deferred tax assets arising from temporary differences)” (items 80 through 83).
On the FR Y-9C, Schedule HC-R, Part I, several items were renumbered to reflect the simplifications rule. As a result, the Board also proposes to revise the corresponding FR Y-14A, Schedule A.1.d, items to reference the renumbered FR Y-9C items.
Additionally, the Board proposes to make a number of revisions to the instructions for certain FR Y-14A, Schedule A.1.d, items that would remove language regarding the inclusion of any applicable transition provisions. These revisions would be applicable to Category I, II, III, and IV firms. Specifically, the Board proposes to revise the instructions for the following items:
• Item 18 (“AOCI opt-out election”);
• Item 35 (“Non-significant investments in the capital of unconsolidated financial institutions in the form of common stock that exceed
• Item 37 (“Significant investments in the capital of unconsolidated financial institutions in the form of common stock, net of associated DTLs, that exceed 10 percent common equity tier 1 capital deduction threshold”);
• Item 38 (“MSAs, net of associated DTLs, that exceed the 10 percent common equity tier 1 capital deduction threshold”);
• Item 39 (“DTAs arising from temporary differences that could not be realized through net operating loss carrybacks, net of related valuation allowances and net of DTLs, that exceed the 10 percent common equity tier 1 capital deduction threshold”);
• Item 40 (“Amount of significant investments in the capital of unconsolidated financial institutions in the form of common stock; MSAs, net of associated DTLs; and DTAs arising from temporary differences that could not be realized through net operating loss carrybacks, net of related valuation allowances and net of DTLs; that exceeds the 15 percent common equity tier 1 capital deduction threshold”);
• Item 48 (“Additional tier 1 capital deductions”);
• Item 84 (“Amount to be deducted from common equity tier 1 due to 15 percent deduction threshold, prior to transition provision”); and
• Item 110 (“Deferred tax assets that arise from net operating loss and tax credit carryforwards, net of DTLs, but gross of related valuation allowances”).
In order to incorporate the effects of the simplifications rule on FR Y-14Q, Schedule D, the Board proposes to add four items related to non-significant investments in the capital of unconsolidated financial institutions in the form of common stock:
• “Aggregate amount of non-significant investments in the capital of unconsolidated financial institutions”;
• “Non-significant investments in the capital of unconsolidated financial institutions in the form of common stock”;
• “10 percent threshold for non-significant investments”; and
• “Amount to be deducted from common equity tier 1 due to 10 percent deduction threshold.”
The Board further proposes that these four new items, as well as the items formerly numbered 1 through 5 (“Significant investments in the capital of unconsolidated financial institutions in the form of common stock”) and 21 through 25 (“Aggregate of items subject to the 15% limit (significant investments, mortgage servicing assets, and deferred tax assets arising from temporary differences)”), be reported only by Category I and II firms.
The Board also proposes to add three items related to investments in the capital of unconsolidated financial institutions that would only be reported by Category III and IV firms:
• “Aggregate amount of investments in the capital of unconsolidated financial institutions”;
• “25 percent threshold for investments in the capital of unconsolidated financial institutions”; and
• “Amount to be deducted from common equity tier 1 due to 25 percent deduction threshold.”
Finally, the Board proposes to rename two items and revise the instructions for four items to account for the different deduction threshold for Category I, II, III, and IV firms:
• The instructions would be revised for “10 percent common equity tier 1 deduction threshold” (existing items 13 and 19). These items would also be renamed to “Common equity tier 1 deduction threshold: 10 percent for Category I and II firms, 25 percent for Category III and IV firms”; and
• The instructions would be revised for “Amount to be deducted from common equity tier 1 due to 10 percent deduction threshold” (existing items 14 and 20).
On April 8, 2019, the agencies published a notice of proposed rulemaking that would address an advanced approaches banking organization's regulatory capital treatment of an investment in unsecured debt instruments issued by foreign or U.S. global systemically important banks (GSIBs) for the purposes of meeting minimum TLAC and, where applicable, long-term debt (LTD) requirements, or liabilities issued by GSIBs that are pari passu or subordinated to such debt instruments (TLAC Holdings NPR).
Under the TLAC Holdings NPR, the capital calculations of advanced approaches banking organizations would take into account the total amount of deductions related to investments in own CET1, AT1, and T2 capital instruments; investments in own covered debt instruments, if applicable; reciprocal cross holdings; non-significant investments in the capital and covered debt instruments of unconsolidated financial institutions that exceed certain thresholds; certain investments in excluded covered debt instruments, as applicable; and significant investments in the capital and covered debt instruments of unconsolidated financial institutions. Any deductions related to covered debt instruments and excluded covered debt instruments (together, TLAC debt holdings) would be applied at the level of T2 capital under the agencies' existing regulatory capital rule. Any required deduction would be made using the “corresponding deduction approach,” by which the advanced approaches banking organization would deduct TLAC debt holdings first from T2 capital and, if it had insufficient T2 capital to make the full requisite deduction, deduct the remaining amount from AT1 capital and then, if necessary, from CET1 capital.
In order to incorporate these proposed regulatory changes, the Board proposes the following revisions to FR Y-14A, Schedule A.1.d, and FR Y-14Q, Schedule D. These revisions to the FR Y-14A and FR Y-14Q would remain pending until such time as the Board may adopt the TLAC Holdings proposal in final form, at which point, these revisions would be incorporated into the FR Y-14 reports.
As a part of the TLAC Holdings NPR, the Board proposed revisions to the FR Y-9C, Schedule HC-R, Part I, that would collect information from U.S. GSIBs and from IHCs of foreign GSIBs. Specifically, the proposed items would collect information on these holding companies' LTD and TLAC amounts, LTD and TLAC ratios, and TLAC buffer. In order to align Schedule A.1.d with the FR Y-9C, the Board is proposing to add the following items to Schedule A.1.d:
• “Outstanding eligible long-term debt”;
• “Total loss-absorbing capacity”;
• “LTD and TLAC total risk-weighted assets ratios”;
• “LTD and TLAC leverage ratios”;
• “LTD and TLAC supplementary leverage ratios”;
• “Institution-specific TLAC buffer necessary to avoid limitations on distributions discretionary bonus payments”;
• “TLAC risk-weighted buffer”; and
• “TLAC leverage buffer.”
The Board proposes that the instructions for proposed item 1 (“Aggregate amount of non-significant investments in the capital of unconsolidated financial institutions”) would require Category I and II firms to include covered debt instruments.
On January 24, 2020, the agencies published a final rule to implement the SA-CCR approach for calculating the exposure amount of derivative contracts under the capital rule.
The final rule replaces the current exposure methodology (CEM) with SA-CCR in the capital rule for advanced approaches banking organizations. Under the final rule, an advanced approaches banking organization will have to choose either SA-CCR or the internal models methodology to calculate the exposure amount of its noncleared and cleared derivative contracts and use SA-CCR to determine the risk-weighted asset amount of its default fund contributions. In addition, an advanced approaches banking organization will be required to use SA-CCR (instead of CEM) to calculate the exposure amount of its noncleared and cleared derivative contracts and to determine the risk-weighted asset amount of its default fund contributions under the standardized approach, as well as to determine the exposure amount of its derivative contracts for purposes of the supplementary leverage ratio. When using SA-CCR, a banking organization should use the value of the replacement cost amount for its current credit exposure.
Under the final rule, a non-advanced approaches banking organization will be able to use either CEM or SA-CCR to calculate the exposure amount of its noncleared and cleared derivative contracts and to determine the risk-weighted asset amount of its default fund contributions under the standardized approach. A Category III banking organization will also use SA-CCR for calculating its supplementary leverage ratio if it chooses to use SA-CCR to calculate its derivative and default fund exposures.
The Board proposes to revise FR Y-14A, Schedule A.1.c.1 (Risk-Weighted Assets) as follows to incorporate SA-CCR:
Generally, the reporting of derivatives elements in Schedule A.1.c.1 is driven by the treatment of cleared derivatives' variation margin (settled-to-market versus collateralized-to-market), netting provisions impacting the calculations of notional and exposure amounts, and attributions of derivatives to cleared versus non-cleared derivatives. In order to incorporate the SA-CCR final rule and to ensure alignment with the FR Y-9C, Schedule HC-R, Part II (Risk-Weighted Assets), the Board proposes to revise the instructions for Schedule A.1.c.1, Item 45 (“Current credit exposure across all derivative contracts covered by the regulatory capital rules”) to refer to the corresponding FR Y-9C item (Schedule HC-R, Part II, Memoranda Item 1, “Current credit exposure across all derivative contracts covered by the regulatory rules”).
For clarification purposes, the Board proposes to clarify the FR Y-14A and FR Y-14Q instructions to affirm that the threshold for filing the Trading and Counterparty schedules (in the FR Y-14Q) and sub-schedules (in the FR Y-14A) are based on a four-quarter average of trading assets and liabilities (either in aggregate of $50 billion or more or in aggregate greater than or equal to 10 percent of total consolidated assets, as indicated in the instructions), calculated as of two quarters preceding the reporting quarter.
Firms are currently required to report the “Capital—DFAST” sub-schedule of FR Y-14A, Schedule A.1.d, using applicable capital action assumptions.
The Board proposes to make minor clarifications to several ratio items on Schedule A.1.d in response to previous industry comments. The current instructions for item 104 (“Supplementary Leverage Ratio”) indicate that this item is derived. However, this item is actually reported by firms. The Board proposes to make this item derived, and to indicate that this item should correspond to the definition used in FR Y-9C, Schedule HC-R, Part I, item 45 (“Advanced approaches holding companies only: Supplementary leverage ratio”). Further, several ratio fields are not derived in a consistent format on the FR Y-9C and FR Y-14. For some items, the FR Y-9C requires the ratio in `x.xxx' format while the FR Y-14 requires the same ratio in `.0xxxx' format. To align the required format of these items, the Board proposes to revise the instructions for the following Schedule A.1.d ratio items so that they will be derived in the same format as on the FR Y-9C:
• Item 97 (“Common Equity Tier 1 Ratio”);
• Item 99 (“Tier 1 Capital Ratio”);
• Item 101 (“Total risk-based capital ratio”);
• Item 103 (“Tier 1 Leverage Ratio”); and
• Item 104 (“Supplementary Leverage Ratio”).
The Board proposes to eliminate FR Y-14A, Schedules A.1.c.2 (Advanced RWA) and A.7.c (PPNR Metrics), in order to reduce burden while continuing to collect all information necessary to conduct supervisory stress testing and qualitative reviews of firms' capital plans. The Board also proposes to remove any references to these schedules across the FR Y-14A/Q/M instructions. Per section 225.8 of the Board's Regulation Y, firms should not use the advanced approaches to calculate their regulatory capital ratios for purposes of stress testing and capital planning. As a result, firms are not required to report Schedule A.1.c.2, and so the Board proposes to eliminate this schedule. For Schedule A.7.c, it has been determined that point-in-time values (as opposed to projected values,
The Board proposes to formalize two supplemental collections by incorporating them into Schedule F. First, the Board proposes to require firms to report corporate single name exposures at the obligor level in Schedule F.22 ([Incremental Default Risk] IDR—Corporate Credit) along with corporate index exposures at the series level. Collecting this information would allow the Board to enhance its stress testing of issuer default risk. Second, the Board proposes to require firms to report a version of Schedule F that captures fair value option (FVO) loan hedges. Requiring firms to report a version of Schedule F that captures FVO loan hedges would enable to the Board to more adequately assess the risk associated with firm positions as they relate to FVO loan hedges.
Currently, some firms are reporting X-valuation adjustment (XVA) hedges (
Currently, Schedule F.16 (Munis) has a “<B” rated category, but not does further distinguish into “<B Defaulted,” “<B Not Defaulted,” and “<B Default Status Unknown” categories, as the Corporate Credit Schedules (
In order to enhance entity identification, the Board proposes to add fields to Schedules H.1 (Corporate Loan Data) and H.2 (Commercial Real Estate) that capture the LEIs assigned to reported obligors and, if applicable, entities that are identified as the primary source of repayment, when the primary source of repayment differs from the reported obligor. LEI is a publicly available, standardized, global identification system for entities that engage in financial transactions. LEI allows for precise identification of entities across markets and jurisdictions, including global entities, and provides information about an entity's ownership structure. Adding an LEI field would enhance data quality of the stress test by allowing the Board to precisely identify parties to financial transactions, including linking parent/subsidiary relationships and cross-referencing obligors across reporting firms.
The current Schedule H instructions require firms to report fully undrawn loans in Schedules H.1 (Corporate Loan Data) and H.2 (Commercial Real Estate). However, for certain fields, such as those related to interest rates, firms are not required to provide data for fully undrawn loans. Interest rates provide a measure of risk that is quantitative and uniformly defined across reporting entities. Collecting interest rate information for undrawn exposures would allow the Board to more accurately estimate wholesale risk and potential credit availability in a stressed environment. Given this, the Board proposes to revise the instructions to require firms to report interest rate data for fully undrawn loans as if the facility were fully drawn on the reporting date.
Currently, interest rate related fields are reported inconsistently for fee-only facilities. There is not an interest component on certain facilities where the lender is compensated solely through fees, which differs from fully undrawn facilities where interest will be collected when the facility is drawn. Clarification would allow the Board to more accurately collect interest rate items for fee-only facilities, as well as to differentiate between fee-only and fully undrawn facilities.
Accordingly, the Board proposes to revise the following interest rate items on Schedules H.1 and H.2 to instruct firms on how to report fully undrawn commitments and fee-only facilities:
• “Interest Rate Variability” (Schedule H.1, item 37; Schedule H.2, item 26),
• “Interest Rate” (38;27),
• “Interest Rate Index” (39;28),
• “Interest Rate Spread” (40;29),
• “Interest Rate Ceiling” (41;30),
• “Interest Rate Floor” (42;31), and
• “Frequency of Rate Reset” (N/A; 32).
For consistency with the language used in Schedule H.1, item 25 (“Utilized Exposure Global”), the Board proposes to add language to Schedule H.2, item 3 (“Outstanding Balance”) to require firms to report zero for fully undrawn commitments.
Additionally, the “Property Type” (Schedule H.2, item 9) description requires reporters to use predominance to determine type when possible. However, the “Property Size” (Schedule H.2, item 39) instructions do not make clear that predominance is allowed to determine a specific property type (rather than having to report as “Other” if the loan consists of mixed property types). To eliminate this ambiguity, the Board proposes to revise the instructions for item 39 to clarify that predominance can be used to determine the units even if the loan consists of mixed property types.
Finally, the current Schedule H instructions do not require firms to report information regarding exposures to capital call subscriptions. Subscription finance typically provides general-purpose term and revolving credit facilities to private equity funds, is provided by one or more lenders, is secured by a pledge of the right to call, enforces capital calls, and receives capital contributions from a fund's limited partners. In order to monitor the risks associated with capital call subscriptions, the Board proposes to add response options to Schedule H.1, items 20 (“Credit Facility”) and 22 (“Credit Facility Purpose”) that would allow firms to indicate which facilities are capital call subscriptions.
The Board has received several questions from firms regarding the definition of “CDS Hedge Notional” in Schedule L.5.1 (Derivative and securities financing transaction (SFT) information by counterparty legal entity and netting set/agreement), as the current definition is ambiguous. Accordingly, the Board is proposing to revise the instructions for this item in several ways. First, the Board proposes to clarify that the net notional amount of specific CDS hedges should be reported in this item. Second, the Board proposes to clarify that when firms are calculating the net notional amount, purchased CDS hedge notional amounts must be reflected as negative amounts, and sold amounts must be reflected as positive amounts. Third, the Board proposes to remove the reference to “plain vanilla CDS” from the instructions, and clarify that single-name and non-tranched index credit derivatives for which one of the constituents matches directly to counterparty legal entity level should be included. The Board would further clarify that positions reported in this item must be “eligible credit derivatives,” as defined in section 252.71 of the Board's Regulation YY.
There is currently an inconsistency between the FR Y-14Q, Schedule L instructions and SR Letter 17-7 (Regulatory Capital Treatment of Certain Centrally-cleared Derivative Contracts under the Board's Capital Rule)
The Board proposes to require that all client-cleared derivatives exposures be reported on the large counterparty default (LCPD) section. The Board believes these exposures present credit risk that would increase under stress, and could potentially be material for some firms. These derivatives create an exposure for a firm to its client to the extent that the firm is guaranteeing the client performance to the central counterparty (CCP) or the exchange. If a client defaults when its exposure moves significantly out of the money to the CCP (and therefore the CCP is in the money), then the clearing firm will suffer a loss as a result of the performance guarantee it has provided to the CCP. This proposed reporting change would allow the Board to evaluate the materiality of the potential LCPD loss impact associated with the client cleared derivatives exposures. The Board already collects information on client cleared SFT exposures and is proposing a similar treatment for client cleared derivatives exposures. Please note that the Board would not include these exposures as part of the stress test at this time. Rather, this information would only be collected for monitoring purposes.
The Board also proposes the following additional revisions that would address inconsistent interpretations:
• Provide illustrative examples to clarify netting agreement reporting requirements on Schedule L.5 (Derivatives and Securities Financing Transitions (SFT) Profile);
• Clarify the definition of “Excess Variation Margin (for CCPs)” to be more consistent with the CCP margining practice;
• Clarify how centrally cleared exposures should be computed. This clarification would ensure consistent reporting across firms;
• Clarify that IHC affiliate counterparties should be considered counterparties and included for reporting across Schedule L;
• Provide specific clarifications on reporting requirements associated with CSA details when multiple CSAs apply to a single netting agreement;
• Clarify the definition of “New Notional During Quarter” on Schedules L.1.a-d;
• Clarify the definition of “CDS Reference Entity Type”; provide guidelines for the definitions of vanilla, structured, and exotic contracts; reporting of data fields to specify agreement population (SFT and/or derivatives); and reporting of to be announced (TBA) positions;
• Clarify that the U.S. dollar equivalent of the respective currency bucket should be used in the “Unstressed MtM Cash Collateral (Derivatives)” and “Total Unstressed MtM Collateral (Derivatives)” items; and
• Clarify rank methodology to include affiliate as an allowable entry. This change would help reinforce reporting requirements of counterparty types reported.
The Board also proposes to revise the instructions for the “External Rating” field in Schedule L.5.3 (Aggregate SFTs by Internal Rating), to require firms to report an external rating equivalent to a counterparty's internal rating, as reported in the “Internal Rating” field of Schedule L.5.3. These instructions were inadvertently revised in December of 2019.
Effective June 30, 2018, “Purchased credit card relationships and nonmortgage servicing assets” was removed from FR Y-9C, Schedule M (Memoranda), and the values previously reported in this item were added to FR Y-9C, Schedule M, item 12.c, “All other identifiable intangible assets”.
The Board proposes several revisions to the FR Y-14M that would clarify reporting. The following clarifications to Schedules A.1 (First Lien, Loan Level), B.1 (Home Equity, Loan Level), and D.2 (Credit Card, Portfolio Level) are proposed:
• Schedule A—item 23, Schedule B—item 19 (“Property Type”): Clarify how to report planned unit developments, as there is currently ambiguity. This clarification would make it clear that if the property type is known, then firms should report the underlying property type. If it is unknown, then firms should report it as a planned unit development.
• Schedule A—item 63, Schedule B—item 53 (“Foreclosure Status”): Expand the definition of these items to have an option to capture loans that have foreclosure suspended for reasons other than loss mitigation or bankruptcy proceedings. This expanded definition would allow firms to report all applicable loans as foreclosure suspended, regardless of the reason.
• Schedule A—item 65, Schedule B—item 87 (“Foreclosure Suspended”): Clarify how to report this field in the month the loan liquidates. This clarification would make it clear that the foreclosure status should be post-sale foreclosure in these instances.
• Schedule B—item 61 (“Workout Type Completed”): Define the “Settlement” and “Other” values. “Settlement” and “Other” are not currently defined, and firms are not sure
• Schedule D—items 11 (“Projected Managed Losses”) and 12 (“Projected Booked Losses”): Clarify how to report these fields upon the adoption of the Accounting Standards Update 2016-13 (“Financial Instruments—Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments”).
As a result of the simplified threshold deduction framework and new accumulated other comprehensive income (AOCI) opt-out election discussed below, the simplifications and tailoring rules could have a material impact on projected capital levels for certain non-advanced approaches institutions. In order to allow non-advanced approaches institutions to be able to incorporate the effects of the simplifications and tailoring rules effective for FR Y-14A reports reflecting the December 31, 2019, as-of date, which must be submitted to the Board by April 6, 2020, the Board is unable to satisfy the normal Paperwork Reduction Act clearance process. The Board has determined that it must revise the FR Y-14A quickly and public participation in the approval process would defeat the purpose of the collection of information, as delaying the revisions would result in the collection of inaccurate information, and would interfere with the Board's ability to perform its statutory duties pursuant to section 165 of the Dodd-Frank Wall Street Reform and Consumer Protection Act (Dodd-Frank Act).
In order to allow eligible firms to report projected capital levels consistent with the capital rule then in effect, the Board has temporarily revised the FR Y-14A instructions for the December 31, 2019, as-of date, to allow non-advanced approaches institutions to report certain capital items in a manner that aligns with the simplifications rule. Specifically, the Board has temporarily revised the instructions for several items on FR Y-14A, Schedule A.1.d, and Schedule A.1.c.1 (Standardized risk-weighted assets), to allow eligible firms to report data beginning with the second projected quarter that incorporates the effects of capital simplifications. The instructions for the following FR Y-14A, Schedule A.1.d, items have been temporarily revised to provide as follows:
• Item 35 (“Non-significant investments in the capital of unconsolidated financial institutions in the form of common stock that exceed the 10 percent threshold for non-significant investments”);
• Item 37 (“Significant investments in the capital of unconsolidated financial institutions in the form of common stock, net of associated DTLs, that exceed 10 percent common equity tier 1 capital deduction threshold”);
• Item 38 (“MSAs, net of associated DTLs, that exceed the 10 percent common equity tier 1 capital deduction threshold”);
• Item 39, (“DTAs arising from temporary differences that could not be realized through net operating loss carrybacks, net of related valuation allowances and net of DTLs, that exceed the 10 percent common equity tier 1 capital deduction threshold”);
• Item 40, (“Amount of significant investments in the capital of unconsolidated financial institutions in the form of common stock; MSAs, net of associated DTLs; and DTAs arising from temporary differences that could not be realized through net operating loss carrybacks, net of related valuation allowances and net of DTLs; that exceeds the 15 percent common equity tier 1 capital deduction threshold”);
• Item 66 (“Amount of non-significant investments that exceed the 10 percent deduction threshold for non-significant investments”);
• Item 67, (“Gross significant investments in the capital of unconsolidated financial institutions in the form of common stock”);
• Item 70, (“10 percent common equity tier 1 deduction threshold”);
• Item 75, (“10 percent common equity tier 1 deduction threshold”);
• Item 78, (“10 percent common equity tier 1 deduction threshold”); and
• Item 84, (“Amount to be deducted from common equity tier 1 due to 15 percent deduction threshold, prior to transition provision (greater of item 83 minus item 81 or zero)”).
The Board also has temporarily revised the instructions for FR Y-14A, Schedule A.1.c.1, to require non-advanced approaches institutions to incorporate the effects of capital simplifications on applicable risk-weighted asset items (items 1-41), beginning in the second projected quarter.
Prior to the tailoring rules, non-advanced approaches firms could elect to recognize elements of AOCI in regulatory capital. The result of this election is reported in item 18 (“AOCI opt-out election”). Per the guidance provided in SR Letter 20-2 (Frequently Asked Questions on the Tailoring Rules), Category III and IV firms are required to make a new election to determine whether to recognize elements of AOCI in regulatory capital, beginning January 1, 2020. This election must be made during the first reporting period after the banking organization meets the definition of a Category III or IV firm. The Board proposes to revise the instructions for item 18 to adhere to the guidance provided in SR Letter 20-2.
Previously, the instructions to FR Y-14A Schedule A.1.d, item 18 did not contemplate a situation in which a holding company would make an AOCI opt-out election on a FR Y-9C report with an as-of date other than (1) March 31, 2015, or (2) for a holding company that comes into existence after that date, the first FR Y-9C report filed by the holding company. As such, eligible firms will not have the ability to reflect this new election in projected quarters for the December 31, 2019, FR Y-14A submission.
Because the ability to make an AOCI opt-out election could have a material impact on projected capital levels for certain firms, the Board has temporarily revised FR Y-14A Schedule A.1.d, item 18 to reflect that Category III and IV firms that were previously advanced approaches institutions must make a new AOCI opt-out election during the first reporting period after the firm meets the definition of a Category III Board-regulated institution or Category IV Board-regulated institution. This temporary revision will permit firms to reflect this new election in projected quarters for the December 31, 2019, FR Y-14A submission.
The notificants listed below have applied under the Change in Bank Control Act (Act) (12 U.S.C. 1817(j)) and § 225.41 of the Board's Regulation Y (12 CFR 225.41) to acquire shares of a bank or bank holding company. The factors that are considered in acting on the applications are set forth in paragraph 7 of the Act (12 U.S.C. 1817(j)(7)).
The applications listed below, as well as other related filings required by the Board, if any, are available for immediate inspection at the Federal Reserve Bank indicated. The applications will also be available for inspection at the offices of the Board of Governors. Interested persons may express their views in writing on the standards enumerated in paragraph 7 of the Act.
Comments regarding each of these applications must be received at the Reserve Bank indicated or the offices of the Board of Governors, Ann E. Misback, Secretary of the Board, 20th and Constitution Avenue NW, Washington, DC 20551-0001, not later than April 2, 2020.
1.
The notificants listed below have applied under the Change in Bank Control Act (Act) (12 U.S.C. 1817(j)) and § 225.41 of the Board's Regulation Y (12 CFR 225.41) to acquire shares of a bank or bank holding company. The factors that are considered in acting on the applications are set forth in paragraph 7 of the Act (12 U.S.C. 1817(j)(7)).
The applications listed below, as well as other related filings required by the Board, if any, are available for immediate inspection at the Federal Reserve Bank indicated. The applications will also be available for inspection at the offices of the Board of Governors. Interested persons may express their views in writing on the standards enumerated in paragraph 7 of the Act.
Comments regarding each of these applications must be received at the Reserve Bank indicated or the offices of the Board of Governors, Ann E. Misback, Secretary of the Board, 20th and Constitution Avenue NW, Washington, DC 20551-0001, not later than April 6, 2020.
1.
Administration for Children and Families, HHS.
Notice.
Statement of Organizations, Functions, and Delegations of Authority.
The Administration for Children and Families (ACF) has reorganized the Administration on Children, Youth and Families (ACYF). The reorganization has no impact on existing delegations of authority. The reorganization within the ACYF Office of the Commissioner amends the functions of the Office of Management Services and creates the Office of Budget. Within the Children's Bureau (CB), it creates the Division of Performance Measurement and Improvement. It removes the Office of Data Analysis, Research and Evaluation from the Office of the Commissioner and transfers the functions to the Division of Performance Measurement and Improvement. Within the Family and Youth Services Bureau (FYSB), it renames the Division of Adolescent Development and Support to the Division for Optimal Adolescent Development and elevates the Runaway Homeless Youth office to the Division of Runaway and Homeless Youth. It also creates the Division of Evaluation, Data and Policy. Lastly, it renames the Division of Family Violence Prevention to the Division of Family Violence Prevention and Services.
Elizabeth Darling, Commissioner, Administration on Children, Youth and Families, 330 C Street SW, Washington, DC 20201, (202) 401-2761.
This notice amends Part K of the Statement of Organization, Functions, and Delegations of Authority of the Department of Health and Human Services (HHS), Administration for Children and Families (ACF) as follows: Chapter KB, Administration on Children, Youth and Families (ACYF), as last amended in 76 FR 81505-81508, December 28, 2011.
I. Under Chapter KB, Administration on Children, Youth and Families, delete KB in its entirety and replace with the following:
ACYF administers state grant programs under titles IV-B and IV-E of the Social Security Act, manages the Adoption Opportunities program and other discretionary programs for the development and provision of child welfare services, and implements the Child Abuse Prevention and Treatment Act (CAPTA). It administers programs under the Runaway and Homeless Youth Act, carries out the provisions of the Family Violence Prevention and Services Act, and manages adolescent pregnancy prevention programs authorized through Title V of the Social Security Act under Section 510 for Sexual Risk Avoidance Education and Section 513 for Personal Responsibility Education Program.
In concert with other components of ACF, ACYF develops and implements research, demonstration, and evaluation strategies for the discretionary funding of activities designed to improve and enrich the lives of children and youth and to strengthen families. It administers Child Welfare Services training and research and demonstration programs authorized by title IV-B of the Social Security Act and oversees promising youth development programs.
The Office of Management Services functions as Executive Secretariat for the Office of the Commissioner, including managing correspondence, correspondence systems, and electronic mail requests; coordinates the provision of staff development and training; provides support for ACYF's personnel administration, including staffing, employee and labor relations, performance management, and employee recognition; manages ACYF-controlled space and facilities; performs manpower planning and administration; plans for, distributes, and controls ACYF supplies; provides mail and messenger services; maintains duplicating, fax, and computer and computer peripheral equipment; supports and manages automation within ACYF; provides for health and safety; and oversees travel administration, time and attendance, and other administrative functions for ACYF.
The Office of Budget manages the formulation and execution of the budgets for ACYF programs and for federal administration, serves as the central control point for operational and long range planning, manages procurement planning and provides technical assistance regarding procurement, acquires ACYF supplies, provides oversight and technical assistance on funds planning for travel expenditures and travel administration on obligation and payment issues, monitors the obligation and expenditure of ACYF funds through the lifecycle of the appropriations, and provides leadership and advice on financial policy issues that cut across all the ACYF program and funding mechanisms.
B. The Children's Bureau (CB) is headed by an Associate Commissioner who advises the Commissioner, ACYF,
The Regional Program Unit is headed by the Director of Regional Programs who reports to the Associate Commissioner, CB, within ACYF. The Director of Regional Programs, through subordinate Regional Program Managers and their staff, in collaboration with program components, is responsible for (1) providing program and technical administration of CB formula, entitlement, block, and discretionary programs related to child welfare, including child abuse and neglect prevention, child protective services, family preservation and support, adoption, foster care, and independent living; (2) collaborating with the ACF Central Office, states, and grantees on all program matters for programs or issues that have significant implications for the programs; (3) providing technical assistance to entities responsible for administering CB programs to resolve identified problems; (4) ensuring that appropriate procedures and practices are adopted; (5) working with appropriate state and local officials to develop and implement outcome-based performance measures; and (6) monitoring the programs to ensure their efficiency and effectiveness, and ensuring that these entities conform to federal laws, regulations, policies, and procedures governing the programs.
The Office on Child Abuse and Neglect provides leadership and direction on the issues of child maltreatment and the prevention of abuse and neglect under CAPTA. It is the focal point for interagency collaborative efforts, national conferences, and special initiatives related to child abuse and neglect, and for coordinating activities related to the prevention of abuse and neglect and the protection of children at risk of maltreatment. It supports activities to build networks of community-based, prevention-focused family resource and support programs through the Community-Based Child Abuse Prevention Grants. It supports improvement in the state systems that handle child abuse and neglect cases, particularly child sexual abuse and exploitation- and maltreatment-related fatalities, and improvement in the investigation and prosecution of these cases through the Children's Justice Act.
The Division of Policy provides leadership and direction in policy development and interpretation of titles IV-B and IV-E of the Social Security Act and the Basic State Grant under CAPTA. It writes regulations and interprets policy for the Bureau's formula and entitlement grant programs, and responds to requests for policy clarification from ACF Regional Offices and other sources.
The Division of Program Implementation provides leadership and direction in the operation and review of programs under titles IV-B and IV-E of the Social Security Act and the Basic State Grant under CAPTA. It develops program instructions, information memoranda, and annual reports related to these programs. It analyzes State Plans and develops state profiles and other reports. It is responsible for the Monitoring Team, which schedules and coordinates the monitoring of the state title IV-E reviews and ensures effective corrective action if necessary. It is the focal point for financial issues, including disallowances, appeals, and the decisions of the Departmental Appeals Board (DAB).
The Division of Program Innovation provides leadership and direction in program development, innovation, and research. It defines critical issues for investigation and makes recommendations regarding subject areas for research, demonstration, and evaluation. It administers the Bureau's discretionary grant programs and awards project grants to state and local agencies and organizations nationwide.
The Division of Child Welfare Capacity Building provides leadership and direction in the areas of training, technical assistance, and information dissemination under titles IV-B and IV-E of the Social Security Act, and under CAPTA. Either directly or through grants or contracts, it provides training and technical assistance to assist service providers, state and local governments, and tribes. It manages discretionary training grants under section 426 of the Social Security Act and title IV-E training and directs the operations and activities of statutorily mandated clearinghouses. The Division identifies best practices for treating vulnerable families and preventing abuse and neglect. It participates in the development of funding opportunity announcements and manages certain discretionary grant projects.
The Division of State Systems (DSS) reviews, assesses, and inspects the planning, design, and operation of state management information systems and approves advanced planning documents for automated data systems. The Division provides leadership for the provision of technical assistance to states on information systems projects and advances the use of computer technology in the administration of child welfare and social services programs by states. The Division reviews, analyzes, and approves/disapproves state requests for federal financial participation for automated systems development and related activities that support child welfare programs, including foster care and adoption. It provides assistance to states in developing or modifying automation plans to conform to federal requirements, monitors approved state system development activities, and conducts periodic reviews to ensure state compliance with regulatory requirements applicable to automated systems supported by federal financial participation. It provides guidance to states on functional requirements for these automated information systems.
The Division of Performance Measurement and Improvement provides oversight in the collection, analysis, and reporting of state-level data reported to CB through mandated data collections; oversees an outcomes-oriented review of state child welfare systems; and sets, tracks, and reports on performance indicators in response to the Government Performance and Results Act and other performance oriented mandates. The Division is comprised of two teams. The Data Analytics and Reporting Team collects, analyzes, and disseminates program data from the Adoption and Foster Care Analysis and Reporting System (AFCARS), the National Youth in Transition Database (NYTD), and the National Child Abuse and Neglect Data Systems (NCANDS); ensures accuracy of data reporting; develops systematic methods of measuring the impact and effectiveness of various child welfare programs; and performs statistical sampling functions. The Child and Family Services Review Team, in partnership with CB's Regional Program Units, carries out reviews of child protection, foster care, adoption, family
C. The Family and Youth Services Bureau (FYSB) is headed by an Associate Commissioner who recommends policy direction and programs to address issues involving vulnerable, at-risk youth, survivors of domestic violence and their families to the Commissioner, ACYF. FYSB supports the organizations and communities working to end youth homelessness, youth at risk of trafficking and sexual exploitation, adolescent pregnancy, and domestic violence through programs that provide shelter, community services, and prevention education for youth, adults, and families.
A Deputy Associate Commissioner supports the Associate Commissioner and manages the day-to-day operations of FYSB. The Bureau assesses and recommends policies and legislation and develops program initiatives for runaway and homeless youth, family violence prevention and services (
The Division of Family Violence Prevention and Services promotes public awareness about family violence, domestic violence, and dating violence. The Division also promotes awareness about the impact of family violence, and effective prevention and intervention strategies to address the problem. The Division's programs provide immediate shelter and related assistance to victims of family violence and their dependents; provide for research into the most effective methods of family violence prevention, identification, and intervention; and provide training and technical assistance to family violence and domestic violence programs including states, tribes, local public agencies (such as law enforcement agencies, courts, social service agencies, child welfare programs, mental health and substance abuse treatment programs, and health care providers), and non-profit organizations. The Division provides support for the National Domestic Violence Hotline, which operates 24 hours a day, 7 days a week and is available in 200 languages, including services in Spanish, video and/or text chat for Deaf and Hard of Hearing survivors, and culturally specific response to Native American victims by Native advocates. The Division supports the development of services to address the needs of children exposed to domestic violence and their abused parents. The Division is responsible for developing, updating, and implementing program regulations and policies. The Division oversees the receipt and review of applications for grants and grantee activities. It also provides guidance, review, support, and assistance to states, tribes, discretionary grantees and sub awardees on HHS policies, regulations, procedures, and systems necessary to ensure efficient program operation at the state, territorial, and tribal levels. In addition, the Division coordinates all programs for victims and potential victims of family violence and their dependents.
The Division of Evaluation, Data and Policy provides leadership and direction for FYSB, informing program and policy development and innovation through evaluation strategies and data analysis for runaway and homeless youth, youth at risk of severe forms of trafficking, adolescent pregnancy prevention, and family violence prevention and services. The Division leads the management of the legislatively mandated data information systems and all evaluation efforts within FYSB. The Division directs evaluation efforts to include study design; instrument development; and rigorous, methodological approaches; and conducts analysis of data (
The Division for Optimal Adolescent Development administers an array of adolescent pregnancy prevention projects to states, tribes, and community-based organizations that provide education to youth on how to prevent teen pregnancy and the spread of sexually transmitted infections, including HIV/AIDS, and provides education on healthy relationships and refraining from non-marital sexual activity. The Division supports the inclusion of evidence-based, age-appropriate, and medically accurate strategies and models that support the successful transition of youth through adolescence and into adulthood with a holistic approach to teaching the benefits of personal responsibility, healthy decision-making, goal setting, and normalizing the optimal behavior of avoiding non-marital sexual activity. There is a subset of grant programs that test innovative approaches to adolescent pregnancy prevention through rigorous evaluations conducted at local and national levels. The collection of performance measurement data provides information to support program improvement and to track program outcomes. The Division provides technical support to ensure compliance with programmatic and fiscal requirements of programs across all funding streams, as directed by the application of federal policy, regulations, and laws. The Division develops the conceptual framework for issues pertaining to adolescent
The Division of Runaway and Homeless Youth serves as the national leader for the provision of shelter and supportive services to unaccompanied homeless youth and administers the runaway and homeless youth program that incorporates the basic center, street outreach, and transitional living programs. The Division also conducts development and implementation of policy, guidelines, and regulations concerning the funding and management of service projects for youth in compliance with the Runaway and Homeless Youth Act. The Division designs, develops, funds, and monitors support activities related to RHY programs including, but not limited to, the provision of technical assistance, executing a monitoring system, maintaining a requisite data collection system, the National Clearinghouse on Homeless Youth and Families, and the National Runaway Safeline. The Division oversees the receipt and review of applications for discretionary grants in these program areas and monitors the management of these grants through monthly contacts and on-site visits through the ACF Regional Offices.
44 U.S.C. 3101.
Food and Drug Administration, HHS.
Notice of availability; reopening of the comment period.
The Food and Drug Administration (FDA or the Agency) is reopening the comment period for the notice entitled “Development of a Shared System REMS; Draft Guidance for Industry; Availability” that appeared in the
FDA is reopening the comment period for the notice published on June 1, 2018 (83 FR 25468). Submit either electronic or written comments on the draft guidance by May 18, 2020 to ensure that the Agency considers your comment on this draft guidance before it begins work on the final version of the guidance.
You may submit comments on any guidances at any time as follows:
Submit electronic comments in the following way:
•
• If you want to submit a comment with confidential information that you do not wish to be made available to the public, submit the comment as a written/paper submission and in the manner detailed (see “Written/Paper Submissions” and “Instructions”).
Submit written/paper submissions as follows:
•
• For written/paper comments submitted to the Dockets Management Staff, FDA will post your comment, as well as any attachments, except for information submitted, marked and identified, as confidential, if submitted as detailed in “Instructions.”
• Confidential Submissions—To submit a comment with confidential information that you do not wish to be made publicly available, submit your comments only as a written/paper submission. You should submit two copies total. One copy will include the information you claim to be confidential with a heading or cover note that states “THIS DOCUMENT CONTAINS CONFIDENTIAL INFORMATION.” The Agency will review this copy, including the claimed confidential information, in its consideration of comments. The second copy, which will have the claimed confidential information redacted/blacked out, will be available for public viewing and posted on
You may submit comments on any guidance at any time (see 21 CFR 10.115(g)(5)).
Submit written requests for single copies of the guidance to the Division of Drug Information, Center for Drug Evaluation and Research, Food and Drug Administration, 10001 New Hampshire Ave., Hillandale Building, 4th Floor, Silver Spring, MD 20993-0002; or to the Office of Communication, Outreach and Development, Center for Biologics
Lubna Merchant, Center for Drug Evaluation and Research, Food and Drug Administration, 10903 New Hampshire Ave., Bldg. 22, Rm. 4418, Silver Spring, MD 20993, 301-796-3600; or Stephen Ripley, Center for Biologics Evaluation and Research, Food and Drug Administration, 10903 New Hampshire Ave., Bldg. 71, Rm. 7301, Silver Spring, MD 20993, 240-402-7911.
In the
FDA is reopening the comment period until May 18, 2020. FDA is interested in receiving additional input regarding any further steps the Agency could take to facilitate successful formation of shared system REMS. In particular, FDA is seeking comment on the challenges and successes with: (1) Negotiating governance agreements among parties involved in a shared system REMS and (2) developing effective shared system REMS programs. The Agency believes that an additional 60 days will allow adequate time for interested persons to submit comments without compromising the timely publication of the final version of the guidance.
Persons with access to the internet may obtain the draft guidance at either
Food and Drug Administration, HHS.
Notice.
The Food and Drug Administration is announcing that certain meetings involving the Center for Drug Evaluation and Research (CDER) from March 10 through April 30, 2020, are postponed, cancelled, or modified to take place remotely.
For dates that have been either postponed or cancelled, see table 1 in the
Kim Thomas, Center for Drug Evaluation and Research, Food and Drug Administration, 10903 New Hampshire Ave., Bldg. 51, Rm. 6282, Silver Spring, MD 20993-0002, 301-796-2357,
Certain public meetings involving CDER from March 10 through April 30, 2020, are postponed, cancelled, or modified to take place remotely due to extenuating circumstances. The meetings that are postponed or canceled as part of this notice are listed in table 1. If a meeting is rescheduled, information about the rescheduled meeting will be provided in the future. The meeting that will no longer take place in person and instead take place by webcast only as part of this notice is listed in table 2.
Food and Drug Administration, HHS.
Notice.
The Food and Drug Administration (FDA or Agency) is issuing an order under the Federal Food, Drug, and Cosmetic Act (FD&C Act) permanently debarring Gerald Tighe from providing services in any capacity to a person that has an approved or pending drug product application. FDA bases this order on a finding that Mr. Tighe was convicted of a felony under Federal law for conduct that relates to the regulation of a drug product under the FD&C Act. Mr. Tighe was given notice of the proposed permanent debarment and an opportunity to request a hearing within the timeframe prescribed by regulation. Mr. Tighe failed to respond. Mr. Tighe's failure to request a hearing within the prescribed timeframe constitutes a waiver of his right to a hearing concerning this action.
This order is applicable March 19, 2020.
Submit applications for special termination of debarment to the Dockets Management Staff (HFA-305), Food and Drug Administration, 5630 Fishers Lane, Rm. 1061, Rockville, MD 20852.
Jaime Espinosa, Division of Enforcement, Office of Strategic Planning and Operational Policy, Office of Regulatory Affairs, Food and Drug Administration, 12420 Parklawn Dr., Rockville, MD 20857,
Section 306(a)(2)(B) of the FD&C Act (21 U.S.C. 335a(a)(2)(B)) requires debarment of an individual if FDA finds that the individual has been convicted of a felony under Federal law for conduct relating to the regulation of any drug product under the FD&C Act. On July 14, 2017, Mr. Tighe pleaded guilty to one count of conspiracy to commit wire fraud, a felony offense, in violation of 18 U.S.C. 371. On December 19, 2017, judgment was entered against Mr. Tighe in the U. S. District Court for the Eastern District of New York.
The factual basis for this conviction is as follows: Mr. Tighe was the founder, sole owner, and president of Med Prep Consulting, Inc. (Med Prep), a medical drug repackager located and incorporated in New Jersey in 1994. Med Prep manufactured, repackaged, processed, packed, labeled, held, compounded, and distributed various drug products, including pain management medications, anesthesia and operating room drugs, and oncology and dialysis drugs. As president of Med Prep, Mr. Tighe was the highest-ranking corporate official, and he was responsible for and oversaw all aspects of its business, including its manufacturing and quality operations. Between approximately January 2007 and April 2013, Mr. Tighe knowingly and intentionally conspired with other individuals to devise a scheme and artifice to defraud healthcare providers and to obtain money and property from them by means of materially false and fraudulent pretenses, representations, and promises, and for the purpose of executing such scheme and artifice, and attempting to do so, to transmit and cause to be transmitted, by means of wire communication in interstate commerce, writings, signs, signals, pictures, and sounds.
Specifically, during this time period, Mr. Tighe conspired with others to introduce and introduced, or caused the introduction of, adulterated and misbranded drugs into interstate commerce, all with the intent to defraud and mislead healthcare providers. The adulterated drugs Mr. Tighe introduced or caused to be introduced into interstate commerce were adulterated because they were prepared, packed, and held under insanitary conditions and because the drugs consisted in whole or in part of a filthy, putrid, and decomposed substance. The misbranded drugs Mr. Tighe introduced or caused to
By engaging in this conduct, Mr. Tighe violated Federal and State law applicable to drug preparation and created serious risks for patients who were being treated for cancer and other illnesses. Mr. Tighe misrepresented the quality of Med Prep's drug processing and repackaging operations to increase market share, and he engaged in substandard practices to save money and increase his profits. Relying on these misrepresentations and omissions, healthcare providers paid Med Prep approximately $34,970,881 for its services between approximately 2007 and 2012.
Based on his conviction, FDA sent Mr. Tighe by certified mail on October 25, 2019, a notice proposing to permanently debar him from providing services in any capacity to a person that has an approved or pending drug product application. The proposal was based on a finding, under section 306(a)(2)(B) of the FD&C Act, that Mr. Tighe was convicted, as set forth in section 306(
Therefore, the Assistant Commissioner, Office of Human and Animal Food Operations, under section 306(a)(2)(B) of the FD&C Act, under authority delegated to the Assistant Commissioner, finds that Gerald Tighe has been convicted of a felony under Federal law for conduct relating to the regulation of a drug product under the FD&C Act.
As a result of the foregoing finding, Gerald Tighe is permanently debarred from providing services in any capacity to a person with an approved or pending drug product application under sections 505, 512, or 802 of the FD&C Act (21 U.S.C. 355, 360b, or 382), or under section 351 of the Public Health Service Act (42 U.S.C. 262), applicable (see
Any application by Mr. Tighe for special termination of debarment under section 306(d)(4) of the FD&C Act should be identified with Docket No. FDA-2019-N-3591 and sent to the Dockets Management Staff (see
Publicly available submissions may be seen in the Dockets Management Staff between 9 a.m. and 4 p.m., Monday through Friday.
Food and Drug Administration, HHS.
Notice.
The Food and Drug Administration (FDA or Agency) is issuing an order under the Federal Food, Drug, and Cosmetic Act (FD&C Act) permanently debarring Brenda Elise Edwards from providing services in any capacity to a person that has an approved or pending drug product application. FDA bases this order on a finding that Mrs. Edwards was convicted of a felony under Federal law for conduct that relates to the regulation of a drug product under the FD&C Act. Mrs. Edwards was given notice of the proposed permanent debarment and was given an opportunity to request a hearing to show why she should not be debarred. As of January 2, 2020 (30 days after receipt of the notice), Mrs. Edwards had not responded. Mrs. Edwards's failure to respond and request a hearing constitutes a waiver of her right to a hearing concerning this action.
This order is applicable March 19, 2020.
Submit applications for special termination of debarment to the Dockets Management Staff (HFA-305), Food and Drug Administration, 5630 Fishers Lane, Rm. 1061, Rockville, MD 20852.
Jaime Espinosa, Division of Enforcement, Office of Strategic Planning and Operational Policy, Office of Regulatory Affairs, Food and Drug Administration, 12420 Parklawn Dr., Rockville, MD 20857,
Section 306(a)(2)(B) of the FD&C Act (21 U.S.C. 335a(a)(2)(B)) requires debarment of an individual from providing services in any capacity to a person that has an approved or pending
The factual basis for this conviction is as follows: As contained in count 1 of the indictment, filed on January 17, 2013, to which Mrs. Edwards pleaded guilty, from December 2006 through August 2009, Mrs. Edwards, along with others, through Cumberland Distribution, Inc. (Cumberland), a company Mrs. Edwards was an employee of, was engaged in wholesale distribution of prescription drugs as defined by section 505(e) of the FD&C Act (21 U.S.C. 355(e)). Cumberland purchased millions of dollars of prescription drugs from unlicensed drug suppliers who were not authorized to distribute drugs under section 503 of the FD&C Act (21 U.S.C. 353). Mrs. Edwards knew that these unlicensed suppliers often procured drugs from street level drug diverters who had obtained the drugs from persons with legitimate prescriptions. On many occasions, Mrs. Edwards, along with others, had drugs shipped to shell companies, which Cumberland used as pass-throughs to create the appearance that Cumberland was purchasing drugs from licensed suppliers when in fact Cumberland was purchasing drugs from unlicensed suppliers. Afterwards, Mrs. Edwards, along with others, had these drugs shipped to Cumberland's Nashville warehouse where they were re-packaged and shipped to independent pharmacies around the country.
Mrs. Edwards also directed Cumberland employees to take steps to make it appear that the diverted drugs were purchased from authorized sellers, such as by: (1) Cleaning pharmaceutical bottles to remove evidence of glue, dirt or hair; (2) inspecting bottles for signs of diversion, such as scratches in the label, glue residue, broken seal, expired product, or illegible lot numbers; and (3) attaching patient information pamphlets to bottles that did not have them. The diverted drugs included drugs used to combat human immunodeficiency virus (HIV)/acquired immunodeficiency syndrome (AIDS), antipsychotic medications, anti-depressants, blood pressure medications, and diabetes medications, among others. Through the course of this scheme, Cumberland had gross proceeds of approximately $58,984,912. Mrs. Edwards and two others obtained profits of approximately $14,689,782.
As a result of this conviction, FDA sent Mrs. Edwards by certified mail on November 18, 2019, a notice proposing to permanently debar her from providing services in any capacity to a person that has an approved or pending drug product application. The proposal was based on a finding, under section 306(a)(2)(B) of the FD&C Act, that Mrs. Edwards was convicted of a felony under Federal law for conduct relating to the regulation of a drug product under the FD&C Act. The proposal also offered Mrs. Edwards an opportunity to request a hearing, providing her 30 days from the date of receipt of the letter in which to file the request, and advised her that failure to file a timely request for a hearing constituted an election not to use the opportunity for a hearing and a waiver of any contentions concerning this action. Mrs. Edwards received the proposal on December 2, 2019. Mrs. Edwards did not request a hearing within the timeframe prescribed by regulation and has, therefore, waived her opportunity for a hearing and any contentions concerning her debarment (21 CFR part 12).
Therefore, the Assistant Commissioner, Office of Human and Animal Food Operations, under section 306(a)(2)(B) of the FD&C Act), under authority delegated to the Assistant Commissioner, finds that Brenda Elise Edwards has been convicted of a felony under Federal law for conduct otherwise relating to the regulation of a drug product under the FD&C Act.
As a result of the foregoing finding, Brenda Elise Edwards is permanently debarred from providing services in any capacity to a person with an approved or pending drug product application, applicable (see DATES) (see section 306(a)(2)(B) and (c)(2)(A)(ii) of the FD&C Act). Any person with an approved or pending drug product application who knowingly employs or retains as a consultant or contractor, or otherwise uses the services of Brenda Elise Edwards, in any capacity during her debarment, will be subject to civil money penalties (section 307(a)(6) of the FD&C Act (21 U.S.C. 335b(a)(6))). If Mrs. Edwards provides services in any capacity to a person with an approved or pending drug product application during her period of debarment, she will be subject to civil money penalties (section 307(a)(7) of the FD&C Act). In addition, FDA will not accept or review any abbreviated new drug applications from Mrs. Edwards during her period of debarment, other than in connection with an audit under section 306(c)(1)(B) of the FD&C Act. Note that, for purposes of section 306 of the FD&C Act, a “drug product” is defined as a drug subject to regulation under section 505, 512, or 802 of the FD&C Act (21 U.S.C. 355, 360b, or 382) or under section 351 of the Public Health Service Act (42 U.S.C. 262) (see section 201(dd) of the FD&C Act (21 U.S.C. 321(dd)).
Any application by Mrs. Edwards for special termination of debarment under section 306(d)(4) of the FD&C Act should be identified with Docket No. FDA-2019-N-4054 and sent to the Dockets Management Staff (see
Publicly available submissions may be seen in the Dockets Management Staff between 9 a.m. and 4 p.m., Monday through Friday.
Food and Drug Administration, HHS.
Notice.
The Food and Drug Administration (FDA or Agency) is issuing an order under the Federal Food, Drug, and Cosmetic Act (FD&C Act) permanently debarring Stephen Kalinoski from providing services in any capacity to a person that has an approved or pending drug product application. FDA bases this order on a finding that Mr. Kalinoski was convicted of a felony for conduct that relates to the regulation of a drug product under the FD&C Act. Mr. Kalinoski was given notice of the proposed permanent debarment and an opportunity to request a hearing within the timeframe prescribed by regulation. Mr. Kalinoski failed to respond. Mr. Kalinoski's failure to request a hearing within the prescribed timeframe
This order is applicable March 19, 2020.
Submit applications for special termination of debarment to the Dockets Management Staff (HFA-305), Food and Drug Administration, 5630 Fishers Lane, Rm. 1061, Rockville, MD 20852.
Jaime Espinosa, Division of Enforcement, Office of Strategic Planning and Operational Policy, Office of Regulatory Affairs, Food and Drug Administration, 12420 Parklawn Dr., Rockville, MD 20857,
Section 306(a)(2)(B) of the FD&C Act (21 U.S.C. 335a(a)(2)(B)) requires debarment of an individual if FDA finds that the individual has been convicted of a felony under Federal law for conduct relating to the regulation of any drug product under the FD&C Act. On July 14, 2017, Mr. Kalinoski entered a plea of guilty to one count of conspiracy to commit wire fraud, a felony offense, in violation of 18 U.S.C. 371, and on December 19, 2017, judgment was entered against Mr. Kalinoski in the U.S. District Court for the Eastern District of New York.
The factual basis for this conviction is as follows: Mr. Kalinoski was the director of pharmacy and registered pharmacist in charge at Med Prep Consulting, Inc. (Med Prep), a medical drug repackager located and incorporated in New Jersey in 1994. Med Prep manufactured, repackaged, processed, packed, labeled, held, compounded, and distributed various drug products, including pain management medications, anesthesia and operating room drugs, and oncology and dialysis drugs. Mr. Kalinoski worked at Med Prep from approximately 2003 to its closing in the summer of 2013 and was in charge of repackaging and compounding operations and other drug-processing activities.
Between approximately January 2007 and April 2013, Mr. Kalinoski knowingly and intentionally conspired with other individuals to devise a scheme and artifice to defraud healthcare providers and to obtain money and property from them by means of materially false and fraudulent pretenses, representations, and promises, and for the purpose of executing such scheme and artifice, and attempting to do so, to transmit and cause to be transmitted, by means of wire communication in interstate commerce, writings, signs, signals, pictures, and sounds.
Specifically, during this time period, Mr. Kalinoski conspired with others to introduce and introduced, or caused the introduction of, adulterated and misbranded drugs into interstate commerce, all with the intent to defraud and mislead healthcare providers. The adulterated drugs Mr. Kalinoski introduced or caused to be introduced into interstate commerce were adulterated because they were prepared, packed, and held under insanitary conditions and because the drugs consisted in whole or in part of a filthy, putrid, and decomposed substance. The misbranded drugs Mr. Kalinoski introduced or caused to be introduced in interstate commerce were misbranded because the drugs were dangerous to health when used as labeled and because the labeling on the drugs regarding use by dates and the strength of the ingredients were false and misleading. Mr. Kalinoski assured healthcare providers that they were receiving drug products from Med Prep that were produced in full compliance with the law, were compounded and packaged in compliance with chapter 797 of the United States Pharmacopeia (USP 797) and would be safe for patients. Mr. Kalinoski also told healthcare providers that the beyond use dates that Mr. Kalinoski assigned to sterile drug products were supported by sterility testing that satisfied the requirements of USP 797. These representations were made in, among other places, quarterly reports that were sent by email to healthcare providers and on Med Prep's website. Mr. Kalinoski did not inform healthcare providers of failures to comply with USP 797 and basic sterility practices, and breaches of aseptic technique in Med Prep's cleanroom, which occurred repeatedly at Med Prep's facility.
By engaging in this conduct, Mr. Kalinoski violated Federal and State law applicable to drug preparation and created serious risks for patients who were being treated for cancer and other illnesses. Mr. Kalinoski misrepresented the quality of Med Prep's drug processing and repackaging operation to increase market share, and he engaged in substandard practices to save money and increase his profits. Relying on these misrepresentations and omissions, healthcare providers paid Med Prep approximately $34,970,881 for its services between approximately 2007 and 2012.
Based on his conviction, FDA sent Mr. Kalinoski by certified mail on September 27, 2019, a notice proposing to permanently debar him from providing services in any capacity to a person that has an approved or pending drug product application. The proposal was based on a finding, under section 306(a)(2)(B) of the FD&C Act, that Mr. Kalinoski was convicted, as set forth in section 306(
Therefore, the Assistant Commissioner, Office of Human and Animal Food Operations, under section 306(a)(2)(b) of the FD&C Act, under authority delegated to the Assistant Commissioner, finds that Stephen Kalinoski has been convicted of a felony under Federal law for conduct relating to the regulation of a drug product under the FD&C Act.
As a result of the foregoing finding, Stephen Kalinoski is permanently debarred from providing services in any capacity to a person with an approved or pending drug product application under sections 505, 512, or 802 of the FD&C Act (21 U.S.C. 355, 360b, or 382), or under section 351 of the Public Health Service Act (42 U.S.C. 262), applicable (see
Any application by Mr. Kalinoski for special termination of debarment under section 306(d)(4) of the FD&C Act should be identified with Docket No. FDA-2019-N-3608 and sent to the Dockets Management Staff (see
Publicly available submissions may be seen in the Dockets Management Staff between 9 a.m. and 4 p.m., Monday through Friday.
Health Resources and Services Administration (HRSA), Department of Health and Human Services (HHS).
Notice; correction.
The Advisory Committee on Organ Transplantation (ACOT) meeting will be held by webinar and conference call, rather than in-person as previously announced, due to unforeseen circumstances. The webinar link, conference call-in number, registration information, and meeting materials can be accessed through the registration link posted on the ACOT website at
Robert Walsh, Designated Federal Official, (DFO), at Division of Transplantation, HRSA, 5600 Fishers Lane, 8W60, Rockville, Maryland 20857; 301-443-6839; or
Notice is hereby given of a change in the meeting of the National Eye Institute Special Emphasis Panel, March 19, 2020, 9:30 a.m. to March 19, 2020, 4:00 p.m., Hilton Garden Inn Bethesda, 7301 Waverly Street, Bethesda, MD 20814 which was published in the
This meeting notice is being amended to change the format from a face-to-face meeting to a videoconference. The meeting is closed to the public.
Federal Emergency Management Agency, DHS.
Notice and request for comments.
The Federal Emergency Management Agency (FEMA) will submit the information collection abstracted below to the Office of Management and Budget for review and clearance in accordance with the requirements of the Paperwork Reduction Act of 1995. The submission will describe the nature of the information collection, the categories of respondents, the estimated burden (
Comments must be submitted on or before April 20, 2020.
Submit written comments on the proposed information collection to the Office of Information and Regulatory Affairs, Office of Management and Budget. Comments should be addressed to the Desk Officer for the Department of Homeland Security, Federal Emergency Management Agency, and sent via electronic mail to
Requests for additional information or copies of the information collection should be made to Director, Information Management Division, 500 C Street SW, Washington, DC 20472, email address
This proposed information collection previously published in the
The HSGP is a primary funding mechanism for building and sustaining national preparedness capabilities. The
Comments may be submitted as indicated in the
Fish and Wildlife Service, Interior.
Notice of initiation of reviews; request for information.
We, the U.S. Fish and Wildlife Service, are conducting 5-year status reviews under the Endangered Species Act of 10 animal and plant species. A 5-year status review is based on the best scientific and commercial data available at the time of the review; therefore, we are requesting submission of any such information that has become available since the last review for the species.
To ensure consideration, we are requesting submission of new information no later than April 20, 2020. However, we will continue to accept new information about any listed species at any time.
For how to submit information, see Request for Information and How Do I Ask Questions or Provide Information? in the
For information on a particular species, contact the appropriate person or office listed in the table in the
Under the Endangered Species Act of 1973, as amended (ESA; 16 U.S.C. 1531
A 5-year review considers all new information available at the time of the review. In conducting these reviews, we consider the best scientific and commercial data that have become available since the listing determination or most recent status review, such as:
(A) Species biology, including but not limited to population trends, distribution, abundance, demographics, and genetics;
(B) Habitat conditions, including but not limited to amount, distribution, and suitability;
(C) Conservation measures that have been implemented that benefit the species;
(D) Threat status and trends in relation to the five listing factors (as defined in section 4(a)(1) of the ESA); and
(E) Other new information, data, or corrections, including but not limited to taxonomic or nomenclatural changes, identification of erroneous information contained in the List, and improved analytical methods.
Any new information will be considered during the 5-year review and will also be useful in evaluating the ongoing recovery programs for the species.
The species in the following table are under active 5-year status review.
To ensure that a 5-year review is complete and based on the best available scientific and commercial information, we request new information from all sources. See What Information Do We Consider in Our Review? for specific criteria. If you submit information, please support it with documentation such as maps, bibliographic references, methods used to gather and analyze the data, and/or copies of any pertinent publications, reports, or letters by knowledgeable sources.
If you wish to provide information for any species listed above, please submit your comments and materials to the appropriate contact in the table above. You may also direct questions to those contacts. Individuals who are hearing impaired or speech impaired may call the Federal Relay Service at 800-877-8339 for TTY assistance.
Before including your address, phone number, email address, or other personal identifying information in your comment, you should be aware that your entire comment—including your personal identifying information—may be made publicly available at any time. While you can ask us in your comment to withhold your personal identifying information from public review, we cannot guarantee that we will be able to do so.
Comments and materials received will be available for public inspection, by appointment, during normal business hours at the offices where the comments are submitted.
A list of all completed and currently active 5-year reviews addressing species for which lead responsibility falls under Service offices located in Arizona, New Mexico, Oklahoma, and Texas can be found at
This document is published under the authority of the Endangered Species Act of 1973, as amended (16 U.S.C. 1531
United States International Trade Commission.
Notice.
The Commission hereby gives notice of the scheduling of the final phase of antidumping investigations Nos. 731-TA-1455 and 731-TA-1457 (Final) pursuant to the Tariff Act of 1930 (“the Act”) to determine whether an industry in the United States is materially injured or threatened with material injury, or the establishment of an industry in the United States is materially retarded, by reason of imports of polyethylene terephthalate (PET) sheet from Korea and Oman, provided for in subheading 3920.62.00 of the Harmonized Tariff Schedule of the United States, preliminarily determined by the Department of Commerce (“Commerce”) to be sold at less-than-fair-value.
March 3, 2020.
Kristina Lara (202-205-3386), Office of Investigations, U.S. International Trade Commission, 500 E Street SW, Washington, DC 20436. Hearing-impaired persons can obtain information on this matter by contacting the Commission's TDD terminal on 202-205-1810. Persons with mobility impairments who will need special assistance in gaining access to the Commission should contact the Office of the Secretary at 202-205-2000. General information concerning the Commission may also be obtained by accessing its internet server (
For further information concerning the conduct of this phase of the investigations, hearing procedures, and rules of general application, consult the Commission's Rules of Practice and Procedure, part 201, subparts A and B (19 CFR part 201), and part 207, subparts A and C (19 CFR part 207).
Additional written submissions to the Commission, including requests pursuant to section 201.12 of the Commission's rules, shall not be accepted unless good cause is shown for accepting such submissions, or unless the submission is pursuant to a specific request by a Commissioner or Commission staff.
In accordance with sections 201.16(c) and 207.3 of the Commission's rules, each document filed by a party to the investigations must be served on all other parties to the investigations (as identified by either the public or BPI service list), and a certificate of service must be timely filed. The Secretary will not accept a document for filing without a certificate of service.
By order of the Commission.
United States International Trade Commission.
Notice.
The United States International Trade Commission (Commission) provides notice that, to address concerns related to COVID-19, it is temporarily waiving certain of the Commission's rules that require the filing of paper copies, CD-ROMs, and other physical media, and amending certain of the Commission's rules that allow only for paper filing of certain documents in import injury investigations.
Immediately and until further notice.
You may direct telephone inquiries to the Office of the Secretary at (202) 205-2000. You may direct email inquiries to
Section 201.4(b) of the Commission's Rules of Practice and Procedure (19 CFR 201.4(b)) permits the Commission to amend, waive, suspend, or revoke Commission rules for “good and sufficient reason” if the rule is not a matter of procedure required by law. The procedures for the filing of documents, including the provision of paper copies, CD-ROMs, and other physical media and methods of filing in import injury investigations are not procedures required by law. Therefore, to address concerns related to COVID-19, the Commission has determined that there is good and sufficient reason to waive and amend certain Commission rules that require such submissions and to require electronic filing for all documents filed with the Commission. This waiver and amendment is effective immediately and until further notice, which will be provided in a subsequent
Specifically, the Commission temporarily waives:
Rule 201.8(d)(1)-(4)'s paper copy requirements, as they pertain to Rules 201.12, 201.14, 206.2, 206.8(d), 207.10(a), 207.15, 207.23, 207.24, 207.25, 207.28, 207.30, 207.61, 207.62(b)(ii)(2), 207.65, 207.67(a), and 207.68(b); and the paper copy requirements set forth in Rules 201.8(f), 201.12, 201.14, 206.2, 206.8(d), 207.10(a), 207.15, 207.23, 207.25, 207.28, 207.30, 207.61, 207.62(b)(ii)(2), 207.65, 207.67(a), and 207.68(b).
The Commission has also approved the temporary amendment of Rule 206.2 and Rule 207.10(a) to permit parties to file import injury petitions, exhibits, attachments, and appendices electronically. All such filings shall comply with the procedures set forth in the Commission's Electronic Document Information System website at
By order of the Commission.
United States International Trade Commission.
Notice.
The United States International Trade Commission (Commission) provides notice that it is temporarily waiving and amending certain of the Commission's rules that require the filing of paper copies, CD-ROMs, and other physical media in section 337 investigations to address concerns about COVID-19.
Immediately and until further notice.
You may direct telephone inquiries to the Office of the Secretary at (202) 205-2000. You may direct email inquiries to
Section 201.4(b) of the Commission's Rules of Practice and Procedure (19 CFR 201.4(b)) permits the Commission to amend, waive, suspend, or revoke Commission rules for “good and sufficient reason” if the rule is not a matter of procedure required by law. The procedures for the filing of documents, including the provision of paper copies, CD-ROMs, and other physical media in section 337 investigations is not a procedure required by law. Therefore, to address concerns related to COVID-19, the Commission has determined that there is good and sufficient reason to waive and amend certain Commission rules that require such submissions and to require electronic filing for all documents filed with the Commission. This waiver and amendment is effective immediately and until further notice, which will be provided in a subsequent
Specifically, the Commission temporarily waives: Rule 210.4(f)(3)'s paper copy requirements, as they pertain to documents filed under Rules 210.4(d), 210.8, 210.13, 210.14, 210.15, 210.16, 210.17, 210.18, 210.19, 210.20, 210.21, 210.23, 210.24, 210.25, 210.26, 210.33, 210.34, 210.35, 210.36, 210.38, 210.40, 210.43, 210.45, 210.46, 210.47, 210.50, 210.52, 210.53, 210.57, 210.59, 210.66, 210.70, and 210.71; and the paper copy requirements set forth in Rules 210.4(f)(6)(ii), 210.4(f)(7)(i), and 210.8, as well as the paper filing or copy requirements in the Commission's Handbook on Filing Procedures, with which Rule 210.4(f)(i) requires compliance.
The Commission has approved the temporary amendment of Rule 210.4(f)(2), Rule 210.75, Rule 210.76, and Rule 210.79 to permit parties to file section 337 complaints, exhibits, attachments, and appendices electronically.
The Commission has approved the temporary amendment of Rule 210.7(b) to require that attorneys who designate themselves as lead attorneys or representatives for service of process to provide the Commission with their individual work email address.
The Commission has also approved the temporary amendment of Rules 210.11(a) and 210.75 to require complainants, rather than the Commission, to serve all nonconfidential copies of the complaint and any appendices, supplements, motions for temporary relief, exhibits, and attachments onto each proposed respondent and appropriate embassy, upon notice of institution of investigation, and provide proof of service.
Pursuant to Rule 201.16(a)(1), immediately and until further notice, the Commission will serve public documents by electronic means by posting the documents to its Electronic Document Information System (EDIS), located at
All such filings shall comply with the procedures set forth in the Commission's EDIS website at
By order of the Commission.
Bureau of Alcohol, Tobacco, Firearms and Explosives, Department of Justice.
30-Day notice.
The Department of Justice (DOJ), Bureau of Alcohol, Tobacco, Firearms and Explosives (ATF), will submit the following information collection request to the Office of Management and Budget (OMB) for review and approval in accordance with the Paperwork Reduction Act of 1995. The proposed collection is being revised to include a Continuation Sheet, as well as changes to the content and layout of the form. There is also a decrease in the total respondents and burden hours associated with this information collection (IC). The proposed IC is also being published to obtain comments from the public and affected agencies.
The proposed information collection was previously published in the
If you have additional comments, particularly with respect to the estimated public burden or associated response time, have suggestions, need a copy of the proposed information collection instrument with instructions, or desire any other additional information, please contact Helen Koppe, ATF Firearms & Explosives Industry Division either by mail at 99 New York Avenue NE, 6 N-652, Washington, DC 20226, by email at
Written comments and suggestions from the public and affected agencies concerning the proposed collection of information are encouraged. Your comments should address one or more of the following four points:
(1)
(2)
(3)
(4)
(5)
(6)
(7)
If additional information is required contact: Melody Braswell, Department Clearance Officer, United States Department of Justice, Justice Management Division, Policy and Planning Staff, Two Constitution Square, 145 N Street NE, 3E.405A, Washington, DC 20530.
Notice of application.
Registered bulk manufacturers of the affected basic class(es), and applicants therefore, may file written comments on or objections to the issuance of the proposed registration on or before May 18, 2020.
Written comments should be sent to: Drug Enforcement Administration, Attention: DEA
In accordance with 21 CFR 1301.33(a), this is notice that on September 23, 2019, Navinta LLC, 1499 Lower Ferry Road, Ewing, New Jersey 08618-1414 registered as a bulk manufacturer of the following basic class(es), of controlled substances:
The company plans to bulk manufacture API quantities of the listed controlled substances for validation purposes and FDA approval.
On August 28, 2017, the Drug Enforcement Administration (hereinafter, DEA) Administrative Law Judge Charles Wm. Dorman (hereinafter, ALJ), issued a Recommended Rulings, Findings of Fact, Conclusions of Law and Decision (hereinafter, RD) on the action to revoke the DEA Certification of Registration of John O. Dimowo, M.D. Neither party filed exceptions to the RD. Having reviewed and considered the entire administrative record before me, I adopt the ALJ's RD with minor modifications, where noted herein.*
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Overall, with respect to this case, I appreciate Respondent's efforts to limit DEA time and resources by stipulating to many of the Government's fact allegations. However, as explained in the findings and conclusions below, his actions, including prescribing after a court's restriction and prescribing in Texas after his convictions and settlement in California without a DEA registration, contradicted the credibility of his words. The Respondent must convince the Administrator that his acceptance of responsibility and remorse are sufficiently credible to demonstrate that the misconduct will not recur.
Pursuant to 28 CFR 0.100(b) and the authority vested in me by 21 U.S.C. 824(a), I hereby revoke DEA Certificate of Registration BD3755571 issued to John O. Dimowo, M.D. Further, pursuant to 28 CFR 0.100(b) and the authority vested in me by 21 U.S.C. 823(f), I hereby deny any pending application of John O. Dimowo to renew or modify this registration, as well as any pending application of John O. Dimowo for registration in California. This Order is effective April 20, 2020.
Charles Wm. Dorman, Administrative Law Judge. On July 21, 2016, the Drug Enforcement Administration (“DEA” or “Government”) served John O. Dimowo, M.D., (“Respondent”) with an Order to Show Cause (“OSC”), seeking to revoke his DEA Certificate of Registration (“COR”), Number BD3755571. Administrative Law Judge Exhibit (“ALJ-”) 1, 6. One of the allegations contained in the OSC was that the Respondent lacked state authority to handle controlled substances in California, where he was registered. In response to the OSC, the Respondent timely requested a hearing before an Administrative Law Judge. ALJ-2.
On September 2, 2016, the Government filed a Motion for Summary Disposition. ALJ-7. Therein, the Government argued that the Respondent lacked state authority in California to handle controlled substances, the state where the Respondent was registered with the DEA. ALJ-7, at 2. The Government stated that an Interim Suspension Order was issued against the Respondent by the Medical Board of California (“MBC”) on June 10, 2016. ALJ-7, at 2-3. Attached to the Government's Motion was a copy of the MBC's Interim Order of Suspension. ALJ-7, Ex. 1. The Government also stated that on June 28, 2016, a hearing was held before a California administrative law judge. ALJ-7, at 3. Following that hearing, on July 1, 2016, the state continued the suspension of the Respondent's medical license, and issued an Interim Order of Suspension. ALJ-7, Ex. 2.
On September 16,*
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*
At that time, both parties agreed that the Respondent currently lacked state authority to handle controlled substances in California. Because there was no genuine question of fact, no adversarial hearing was required.
Subsequent to the issuance of the Recommended Decision, the MBC restored a substantial portion of the
Following input from the parties, ALJ-17, ALJ-18, the Acting Administrator issued an Order in this case on February 23, 2017. ALJ-19.*
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Following that remand, I issued an Order for Prehearing Statements. ALJ-20. The parties filed Prehearing Statements, ALJ-22, ALJ-23, as well as Supplemental Prehearing Statements. ALJ-28, ALJ-29. Afterwards, a hearing in this matter was held in Santa Ana, California on June 27, 2017.
The issue before the Administrator is whether the DEA should revoke the registration of John O. Dimowo, M.D., DEA Certificate of Registration, BD3755571, pursuant to 21 U.S.C. 824(a)(4), and deny any pending application
This Recommended Decision is based on my consideration of the entire administrative record, including all of the testimony, admitted exhibits, and the oral and written arguments of counsel.
1. On March 30, 2012, an undercover law enforcement officer (“UC1”) met with the Respondent. GE-3. During an office visit that day, UC1 rated his pain as a two, on a scale of one to ten; explained that his only pain was caused by exercise and walking a lot; and stated that he was taking a friend's Vicodin and Adderall to self-medicate.
2. On May 4, 2012, UC1 again met with the Respondent. GE-5. During an office visit that day, UC1 stated his pain was good; asked for Opana, a schedule II controlled substance, which he said he had been obtaining from someone at a gym; said his pain was caused by exercise; and failed a urine screening for the drugs the Respondent had previously prescribed to him.
3. On May 4, 2012, UC2 met with the Respondent. GE-7. During an office visit that day, UC2 stated she wanted something to treat her soreness after exercise and she asked for Adderall to stay alert with her children, and Xanax or Vicodin to relax at night.
4. On March 21, 2013, UC3 met with the Respondent. GE-9. During an office visit that day, UC3 complained of generalized pain from an old high school football accident and informed the Respondent that he did not have insurance, but he did what he needed to do to get oxycodone.
5. On April 25, 2013, UC3 met with the Respondent. GE-11. The Respondent conducted little or no physical examination of UC3 and provided no diagnosis warranting a prescription for controlled substances, yet he prescribed Percocet 10/325 mg, to UC3. ALJ-1, at 3; GE-12. *[I am omitting RD Section II and renumbered subsequent sections for brevity due to the Government's dismissal of the charge].
6. On May 14, 2015,*
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7. In March and April 2017, the Respondent issued three prescriptions for Lyrica, a schedule V controlled substance, from his medical practice in El Paso, Texas. In writing these three prescriptions, the Respondent listed his DEA COR for his registered address in California. At the time the Respondent wrote the prescriptions in Texas he did not have a DEA COR for a registered Texas location. Thus, the Respondent violated the separate registration requirements of 21 U.S.C. 822(e) and 21 CFR 1301.12(a) and (b)(3). ALJ-29, at 5-6; GE-23, 24.
The Government presented no witness during its case-in-chief. Rather, the Government introduced 24 Exhibits, and relied upon the 83 stipulations of fact that the Respondent had entered into with the Government. Following the presentation of the Respondent's case-in-chief, the Government presented two rebuttal witnesses.
The Government's first rebuttal witness was a Diversion Investigator (DI). Tr. 112-130. DI has been a diversion investigator with the DEA for five years and she is assigned to the Los Angeles Field Division, Tactical Diversion Squad. DI attended the basic 12-weeks of training for new diversion investigators at Quantico, VA, and two additional training courses at Quantico concerning financial investigations. As a diversion investigator, DI has conducted regulatory and criminal investigations of individuals and organizations holding DEA registrations to deal with controlled substances. As a member of the Tactical Diversion Squad, DI's investigations primarily concern criminal matters involving doctors and pharmacies. DI became the lead investigator concerning the Respondent when the initial investigator left the Tactical Diversion Squad.
As a rebuttal witness DI provided testimony concerning where the Respondent was registered to handle controlled substances; the prescriptions the Respondent wrote in Texas; and her interaction with the Respondent's MBC probation officer. I find DI's testimony to be thorough, detailed, and internally consistent with Government Exhibits 18, 23, and 24. Therefore, I merit it as credible in this Recommended Decision.
The Government's second rebuttal witness was M.D., who has been an investigator with the California Department of Consumer Affairs for over six years. M.D. is assigned to the Health Quality Investigation Unit of the Department. M.D.'s credentials are further detailed at GE-13, at 8. M.D. was the main investigator concerning the Respondent. Tr. 131. M.D. provided rather limited testimony concerning whether the Respondent had complied with terms of his stipulated settlement with the MBC and his familiarity with reporting requirements contained in such settlements. I find M.D.'s testimony to be thorough, detailed, and internally consistent with Government Exhibit 18. Therefore, I merit it as credible in this Recommended Decision.
The Respondent's case-in-chief included the testimony of the Respondent, reliance upon the 83 stipulations of fact, and introduction of Respondent's Exhibits A-CC. The overall tenor of the Respondent's testimony was his acceptance of responsibility and detailing steps he has taken to ensure that his past violations are not repeated. Tr. 21-112.
The Respondent testified about his medical training and background, as well as describing the various medical positions he has held since being licensed as a medical doctor in the United States and his impressive curriculum vitae. The Respondent testified about actions he took to divest himself of his pain management practice after the MBC visited his clinic in 2013, but before he was charged with any crimes. The Respondent testified concerning his conviction on seven felony counts, later reduced to misdemeanors by the trial judge, and the actions he took following the trial, including performing 353 hours of community service, even though he was only required to perform 130 hours. Tr. 45. During his community service, the Respondent shared his “story” with individuals dealing with substance abuse issues in an effort to allow them to learn from his own mistakes. He testified that if he is allowed to keep his COR he would restrict his practice to anesthesiology in a hospital or surgery center, using only the controlled substances those institutions had acquired. The Respondent testified in a very candid and straightforward manner. There were at least six portions of his testimony, however, that strained credulity.
The Respondent testified that, in retrospect, he does not believe he was prepared to enter into a pain management practice in 2010 because he had not reviewed the requirements for substance control; he was not able to identify drug seeking patients; and he was too trusting of patients. Tr. 35-36. The Respondent, however, was board certified in pain management. The Respondent had also completed a two-year pain management fellowship and was a Diplomate of the American Board of Pain Medicine. RE-A, at 1. The Respondent had also been practicing medicine in the United States for 17 years by the time he opened his pain clinic in 2007, and although the primary focus of his practice had been anesthesiology, he worked in a pain clinic before he opened his own pain clinic. I find that the Respondent's assertion of being ill prepared to open a pain clinic rings hollow given his training and experience, which included work in a pain clinic, where 70% of his work was pain management, prior to opening his own pain clinic.
The Respondent testified that he intended to limit his medical practice to anesthesiology. Just this year, however, the Respondent opened a pain clinic in Texas.*
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When asked to explain why he had failed to perform examinations of the three undercover patients, the Respondent testified that he had performed a short diagnosis, as he had been trained to do in Nigeria. The Respondent's failure to perform the examinations, however, occurred in 2012, years after he had been trained in Nigeria, and after more than 20 years of medical practice in the United States.
When describing the requirements of his stipulated settlement with the MBC, the Respondent either did not understand the terms of the settlement or he mischaracterized its terms to make it seem more onerous than it is. For example, he testified that he must have a physician to monitor his medical practice. Tr. 59. The settlement provided, however, that he need not have a monitor if he participates in a professional enhancement program. GE-18, at 11. The Respondent testified that the stipulated settlement required that he practice medicine at least 40 hours a month in California. The stipulated settlement contains no such provision. As Respondent's counsel stated, “the best reflection of the terms and conditions are contained in the stipulated settlement . . . .” Tr. 136.
With respect to the Respondent's ability to practice medicine following his conviction and sentencing by a California court, the Respondent testified that the sentencing judge did not restrict his ability to practice medicine, stating that the judge left that to the MBC. Tr. 56. That testimony stands in sharp contrast to the Finding of Fact contained in the MBC's Interim Order of Suspension. In the MBC's second finding of fact it states that the court “ordered Respondent `not to practice medicine until an order has been made by the Medical Board with respect to your ability to do so in the State of California.' ” GE-17, at 2. Thus, it would appear that the trial judge did prohibit the Respondent from practicing medicine until the MBC had taken action.
The Respondent also testified that when he wrote prescriptions for a
I find that the Respondent presented as a generally credible and sincere witness. The six examples detailed above, however, detract from the Respondent's overall credibility. Thus, to the extent that the Respondent's testimony is in conflict with other evidence of record, or it is based on illogical or unsound reasoning, I defer to that other evidence, logic and/or reasoning.
The parties stipulated to the following facts.
1. Respondent is registered with DEA as an individual practitioner in Schedules II-V under DEA registration number BD3755571 at 5857 Pine Avenue, Chino Hills, CA 91709. This registration expires by its terms on June 30, 2017. *[Respondent filed for renewal in May 2017.
2. Norco is a hydrocodone combination product. Prior to October 6, 2014, hydrocodone combination products were classified as Schedule III controlled substances. After October 6, 2014, hydrocodone combination products were classified as Schedule II controlled substances.
3. Adderall is a brand name for generic amphetamine. Amphetamine is classified as a Schedule II controlled substance.
4. Vicodin is a hydrocodone combination product. Prior to October 6, 2014, hydrocodone combination products were classified as Schedule III controlled substances. After October 6, 2014, hydrocodone combination products were classified as Schedule II controlled substances.
5. Xanax is a brand name for generic alprazolam. Alprazolam is classified as a Schedule IV controlled substance.
6. Percocet is a brand name for generic oxycodone. Oxycodone is classified as a Schedule II controlled substance.
7. On March 30, 2012, Respondent issued prescriptions to UC1 for 90 dosage units of Norco 10/325 mg and 30 dosage units of Adderall 10 mg.
8. On May 4, 2012, Respondent issued prescriptions to UC1 for 90 dosage units of Vicodin 5/500 mg and 30 dosage units of Adderall 10 mg.
9. On May 4, 2012, Respondent issued prescriptions to UC2 for 30 dosage units of Vicodin 5/500 mg, 60 dosage units of Xanax 2 mg, and 30 dosage units of Adderall 10 mg.
10. On March 21, 2013, Respondent issued a prescription to UC3 for 90 dosage units of Percocet 10/325 mg.
11. On April 25, 2013, Respondent issued a prescription to UC3 for 90 dosage units of Percocet 10/325 mg.
12. On March 22, 2013, investigators with the MBC, assisted by DEA investigators, executed a state search warrant at Respondent's medical offices located at 1120 West La Palma #2, Anaheim, California 92801 and 218 East Anaheim St., Wilmington, California 90744, and seized materials, including all controlled substances from both locations and medical records of patients.
13. On May 14, 2015, a Los Angeles County jury convicted Respondent of seven state felony counts of issuing unlawful controlled substance prescriptions for hydrocodone and Adderall.
14. On March 28, 2016, Respondent was sentenced and the presiding judge, pursuant to the discretion afforded him under state law, reduced the convictions to misdemeanors and sentenced Respondent to probation.
15. On June 10, 2016, the MBC suspended Respondent's medical license with the issuance of an ex parte Interim Order of Suspension.
16. On July 1, 2016,
17. On December 20, 2016, the MBC issued a Decision adopting a Stipulated Settlement and Disciplinary Order entered into by Respondent and the Attorney General for California on September 9, 2016. The Decision was effective January 19, 2017, and reinstated Respondent's medical license, with restrictions.
18. The parties stipulate to the authenticity and admission of Government Exhibit 1: Cal. Health & Safety Code § 11153(a).
19. The parties stipulate to the authenticity and admission of Government Exhibit 2: Cal. Bus. & Prof. Code §§ 725(a), 2241(b), 2241.5(c), 2242(a).
20. The parties stipulate to the authenticity and admission of Government Exhibit 3: DVD recording and transcript of undercover visit by UC1 on March 30, 2012. (13 pages)
21. The parties stipulate to the authenticity and admission of Government Exhibit 4: Prescriptions written by John O. Dimowo for UC1 for 90 Norco 10/325 mg and 30 Adderall 10 mg dated March 30, 2012.
22. The parties stipulate to the authenticity and admission of Government Exhibit 5: DVD recording and transcript of undercover visit by UC1 on May 4, 2012.
23. The parties stipulate to the authenticity and admission of Government Exhibit 6: Prescriptions written by John O. Dimowo for UC1 for 90 Vicodin 5/500 mg and 30 Adderall 10 mg dated May 4, 2012.
24. The parties stipulate to the authenticity and admission of Government Exhibit 7: DVD recording and transcript of undercover visit by UC2 on May 4, 2012.
25. The parties stipulate to the authenticity and admission of Government Exhibit 8: Prescriptions written by John O. Dimowo for UC2 for 30 Vicodin 5/500 mg, 60 Xanax 2 mg and 30 Adderall 10 mg dated May 4, 2012.
26. The parties stipulate to the authenticity and admission of Government Exhibit 9: DVD recording and transcript of undercover visit by UC3 on March 21, 2013.
27. The parties stipulate to the authenticity and admission of Government Exhibit 10: Prescription written by John O. Dimowo for UC3 for 90 Percocet 10/325 mg dated March 21, 2013.
28. The parties stipulate to the authenticity and admission of Government Exhibit 11: DVD recording and transcript of undercover visit by UC3 on April 25, 2013.
29. The parties stipulate to the authenticity and admission of Government Exhibit 12: Prescription written by John O. Dimowo for UC3 for 90 Percocet 10/325 mg dated April 25, 2013.
30. The parties stipulate to the authenticity and admission of Government Exhibit 13: Search Warrant dated March 19, 2013.
31. The parties stipulate to the authenticity and admission of Government Exhibit 14: Patient File for UC1.
32. The parties stipulate to the authenticity and admission of Government Exhibit 15: Patient File for UC2.
33. The parties stipulate to the authenticity and admission of Government Exhibit 16: Certified copy of MBC's Interim Order of Suspension (ex parte) dated June 10, 2016.
34. The parties stipulate to the authenticity and admission of Government Exhibit 17: Certified copy of MBC's Interim Order of Suspension dated July 1, 2016.
35. The parties stipulate to the authenticity and admission of Government Exhibit 18: Certified copy of MBC's Decision dated December 20, 2016, and Stipulated Settlement and Disciplinary Order dated September 9, 2016.
36. The parties stipulate to the authenticity and admission of Government Exhibit 19:
37. The parties stipulate to the authenticity and admission of Government Exhibit 20:
38. The parties stipulate to the authenticity and admission of Government Exhibit 21:
39. The parties stipulate to the authenticity and admission of Government Exhibit 22: Curriculum Vitae of W.S., M.D.
40. The parties stipulate to the authenticity and admission of Government Exhibit 23: Two prescriptions for Lyrica authorized by Respondent in Texas and filled by ASP Cares Pharmacy.
41. The parties stipulate to the authenticity and admission of Government Exhibit 24: One prescription for Lyrica authorized by Respondent in Texas and filled by Walgreens Pharmacy.
42. The parties stipulate that UC1 is a MBC Investigator who saw Respondent in an undercover capacity posing as UC1 on March 30, 2012, and May 4, 2012.
43. The parties stipulate that the prescription written by John O. Dimowo for UC1 for 90 Norco 10/325 mg, dated March 30, 2012, (Government Exhibit 4) was issued for no legitimate medical purpose and outside the usual course of professional practice, in violation of 21 U.S.C. 841(a)(1); 21 CFR 1306.04(a); Cal. Health & Safety Code § 11153(a); and Cal. Bus. & Prof. Code §§ 725(a), 2241(b), 2241.5(c), 2242(a).
44. The parties stipulate that the prescription written by John O. Dimowo for UC1 for 30 Adderall 10 mg, dated March 30, 2012, (Government Exhibit 4) was issued for no legitimate medical purpose and outside the usual course of professional practice, in violation of 21 U.S.C. 841(a)(1); 21 CFR 1306.04(a); Cal. Health & Safety Code § 11153(a); and Cal. Bus. & Prof. Code §§ 725(a), 2241(b), 2241.5(c), 2242(a).
45. The parties stipulate that the prescription written by John O. Dimowo for UC1 for 90 Vicodin 5/500 mg, dated May 4, 2012, (Government Exhibit 6) was issued for no legitimate medical purpose and outside the usual course of professional practice, in violation of 21 U.S.C. 841(a)(1); 21 CFR 1306.04(a); Cal. Health & Safety Code § 11153(a); and Cal. Bus. & Prof. Code §§ 725(a), 2241(b), 2241.5(c), 2242(a).
46. The parties stipulate that the prescription written by John O. Dimowo for UC1 for 30 Adderall 10 mg, dated May 4, 2012, (Government Exhibit 6) was issued for no legitimate medical purpose and outside the usual course of professional practice, in violation of 21 U.S.C. 841(a)(1); 21 CFR 1306.04(a); Cal. Health & Safety Code § 11153(a); and Cal. Bus. & Prof. Code §§ 725(a), 2241(b), 2241.5(c), 2242(a).
47. The parties stipulate that UC2 was a MBC Investigator who saw Respondent posing in an undercover capacity as UC2 on May 4, 2012.
48. The parties stipulate that the prescription written by John O. Dimowo for UC2 for 30 Vicodin 5/500 mg, dated May 4, 2012, (Government Exhibit 8) was issued for no legitimate medical purpose and outside the usual course of professional practice, in violation of 21 U.S.C. 841(a)(1); 21 CFR 1306.04(a); Cal. Health & Safety Code § 11153(a); and Cal. Bus. & Prof. Code §§ 725(a), 2241(b), 2241.5(c), 2242(a).
49. The parties stipulate that the prescription written by John O. Dimowo for UC2 for 60 Xanax 2 mg, dated May 4, 2012, (Government Exhibit 8) was issued for no legitimate medical purpose and outside the usual course of professional practice, in violation of 21 U.S.C. 841(a)(1); 21 CFR 1306.04(a); Cal. Health & Safety Code § 11153(a); and Cal. Bus. & Prof. Code §§ 725(a), 2241(b), 2241.5(c), 2242(a).
50. The parties stipulate that the prescription written by John O. Dimowo for UC2 for 30 Adderall 10 mg, dated May 4, 2012, (Government Exhibit 8) was issued for no legitimate medical purpose and outside the usual course of professional practice, in violation of 21 U.S.C. 841(a)(1); 21 CFR 1306.04(a); Cal. Health & Safety Code § 11153(a); and Cal. Bus. & Prof. Code §§ 725(a), 2241(b), 2241.5(c), 2242(a).
51. The parties stipulate that UC3 is a California Department of Health Care Services Investigator who saw Respondent in an undercover capacity posing as UC3 on March 21, 2013, and April 25, 2013.
52. The parties stipulate that the prescription written by John O. Dimowo for UC3 for 90 Percocet 10/325 mg, dated March 21, 2013, (Government Exhibit 10) was issued for no legitimate medical purpose and outside the usual course of professional practice, in violation of 21 CFR 1306.04(a); and Cal. Bus. & Prof. Code §§ 725(a), 2241(b), 2241.5(c), 2242(a).
53. The parties stipulate that the prescription written by John O. Dimowo for UC3 for 90 Percocet 10/325 mg, dated April 25, 2013, (Government Exhibit 12) was issued for no legitimate medical purpose and outside the usual course of professional practice, in violation of 21 CFR 1306.04(a); and Cal. Bus. & Prof. Code §§ 725(a), 2241(b), 2241.5(c), 2242(a).
54. The parties stipulate that during March and April 2017, Respondent maintained a principal place of business or professional practice in Texas from which he issued three prescriptions for Lyrica (Government Exhibits 23 and 24), which is a brand name for generic pregabalin a Schedule V controlled substance. The parties further stipulate that during March and April 2017, Respondent was not registered in Texas with DEA.
55. The parties stipulate to the authenticity and admission of Respondent's Exhibit A: CV of Dr. Dimowo.
56. The parties stipulate to the authenticity and admission of Respondent's Exhibit B: Character letter from P.B., D.O., dated December 3, 2013.
57. The parties stipulate to the authenticity and admission of Respondent's Exhibit C: Character letter from R.B., M.D.
58. The parties stipulate to the authenticity and admission of Respondent's Exhibit D: Character letter from S.B., D.P.M., dated November 26, 2013.
59. The parties stipulate to the authenticity and admission of Respondent's Exhibit E: Character letter from E.G., M.D., dated December 5, 2013.
60. The parties stipulate to the authenticity and admission of Respondent's Exhibit F: Character letter from S.V., M.D., dated December 3, 2013.
61. The parties stipulate to the authenticity and admission of Respondent's Exhibit G: Character letter from R.R., M.D., dated December 13, 2013.
62. The parties stipulate to the authenticity and admission of Respondent's Exhibit H: Character letter from J.L., M.D., dated December 3, 2013.
63. The parties stipulate to the authenticity and admission of Respondent's Exhibit I: Character letter from K.K., M.D., dated December 19, 2013.
64. The parties stipulate to the authenticity and admission of Respondent's Exhibit J: Certificate of completion of Medical Record Keeping Course, UC San Diego PACE program, dated July 18-19, 2013.
65. The parties stipulate to the authenticity and admission of Respondent's Exhibit K: Certificate of completion of Physician Prescribing Course, UC San Diego PACE program, dated July 15-17, 2013.
66. The parties stipulate to the authenticity and admission of Respondent's Exhibit L: Certificate of attendance Medical Ethics and Professional Boundaries Program, April 8, 2017.
67. The parties stipulate to the authenticity and admission of Respondent's Exhibit M: Certificate of completion Drug and Alcohol Awareness Class, dated November 3, 2015.
68. The parties stipulate to the authenticity and admission of Respondent's Exhibit N: Chronic Pain Management, dated April 15, 2015.
69. The parties stipulate to the authenticity and admission of Respondent's Exhibit O: Acute Pain Management, dated April 15, 2015.
70. The parties stipulate to the authenticity and admission of Respondent's Exhibit P: Pain Review Course, dated August 20, 2015.
71. The parties stipulate to the authenticity and admission of Respondent's Exhibit Q: Medical Ethics for Physicians, dated August 12, 2015.
72. The parties stipulate to the authenticity and admission of Respondent's Exhibit R: Opioid Use Disorder, dated August 22, 2015.
73. The parties stipulate to the authenticity and admission of Respondent's Exhibit S: Prescription Opioid: Risk Management and Strategies for Safe Use, dated August 22, 2015.
74. The parties stipulate to the authenticity and admission of Respondent's Exhibit T: Family Healing Center community service, dated September 16, 2016, for 42 hours.
75. The parties stipulate to the authenticity and admission of Respondent's Exhibit U: Chosen Few/Thin Line Sober Living community service, dated September 8, 2016, for 70 hours.
76. The parties stipulate to the authenticity and admission of Respondent's Exhibit V: Chosen Few/Thin Line Sober Living community service, dated December 14, 2015, for 54 hours.
77. The parties stipulate to the authenticity and admission of Respondent's Exhibit W: Chosen Few/Thin Line Sober Living community service, dated March 22, 201,6 for 16 hours.
78. The parties stipulate to the authenticity and admission of Respondent's Exhibit X: Recovery Can Conquer Home community service, dated September 18, 2015, for 24 hours.
79. The parties stipulate to the authenticity and admission of Respondent's Exhibit Y: Recovery Can Conquer Home community service, dated December 12, 2015, for 36 hours.
80. The parties stipulate to the authenticity and admission of Respondent's Exhibit Z: The House of Courage community service, dated August 25, 2015, for 2 hours.
81. The parties stipulate to the authenticity and admission of Respondent's Exhibit AA: Jubilee House community service, dated September 25, 2015, for 13 hours.
82. The parties stipulate to the authenticity and admission of Respondent's Exhibit BB: Jubilee House community service, dated December 16, 2015, for 12 hours.
83. The parties stipulate to the authenticity and admission of Respondent's Exhibit CC: Jubilee House community service, dated March 23, 2016, for 48 hours.
1. The Respondent graduated from medical school in Nigeria in 1983. Tr. 21-22; RE-A, at 1.
2. Following medical school, the Respondent completed a one year rotating internship in one of the busiest hospitals in Nigeria. Tr. 22.
3. After completing his internship, the Respondent worked as a general practitioner for five years before he immigrated to the United States. Tr. 22; RE-A, at 2.
4. The Respondent took over a psychiatric medical practice for two years in Nigeria. Tr. 89-90.
5. The Respondent immigrated to the United States in 1989, and after he passed the exam for foreign medical graduates, he began an internship in pediatrics at the Medical College of Ohio. Tr. 22-23; RE-A, at 1.
6. Upon completion of his internship in Ohio, the Respondent began a three-year residency in anesthesiology at Vanderbilt University Medical Center, completing the program in 1994. Tr. 23; RE-A, at 1-2.
7. The Respondent then obtained a fellowship at the University of Southern California Medical Center (“USCMC”) and completed a one-year obstetrical anesthesia fellowship. Tr. 23; RE-A, at 1.
8. Following his residency at USCMC, the Respondent was appointed as an instructor in anesthesiology and a consultant anesthesiologist at the Vanderbilt University Medical Center in 1995-96. Tr. 23-24; RE-A, at 1.
9. Between 1997 and 1999, the Respondent completed a pain management fellowship at Emory University Hospital. RE-A, at 1.
10. From the time that the Respondent was admitted to medical practice in the United States until 2007 his primary area of practice was anesthesiology. Tr. 26-30.
11. While practicing anesthesiology, the Respondent has never had any malpractice complaints filed against him nor had his employment as an anesthesiologist been terminated. Tr. 30-31.
12. The Respondent was a Diplomate of the American Board of Pain Medicine. RE-A, at 1.
13. The Respondent was board certified in pain management. GE-19, at 660, 894.
14. Beginning in April 2007 the Respondent was employed as a pain management specialist and staff anesthesiologist with the Las Vegas Pain Institute, where 70% of his practice was pain management. Tr. 31; RE-A, at 2.
15. In 2007, the Respondent started the California Advanced Pain Clinic Institute, which was located across the street from the Anaheim Memorial Medical Center. Tr. 72-73; RE-A, at 1.
16. From February 2008 to September 2010, the Respondent worked part-time as a staff anesthesiologist at the St. Bernadine Medical Center in San Bernardino, CA. The Respondent
17. The Respondent stopped working as an anesthesiologist in September 2010, because the patients he treated in his pain clinic occupied most of his time. Tr. 33.
18. The Respondent began to make changes in his medical practice in 2013 after the medical board sent some observers to his clinic to pick up patient charts. Tr. 36. At that time, the Respondent started looking for someone to take over his pain management practice, and by July 2013 he had found someone to do that. Tr. 37.
19. By July 2013, the Respondent was only doing interventional pain management in association with Dr. K., who had taken over the Respondent's practice. Tr. 38, 98. By then, the Respondent had stopped writing new pain prescriptions, though he did fill prescriptions for about 10 patients who were already on morphine pumps. Tr. 38.
20. Also in July 2013, the Respondent completed a 48-hour continuing medical education course called Physician Assessment and Clinical Education Program (“PACE”), which has been adopted by the MBC. Tr. 39; RE-J-K; GE-18, at 9.
21. In the PACE course, the Respondent studied record keeping; how to write proper prescriptions; the essence of controlled substances; and prescription-writing ethics. Tr. 39; RE-J-K.
22. The PACE course also provided instruction in how to identify drug seeking patients. Tr. 41.
23. The Respondent required each of his pain patients to sign a form swearing under penalty of perjury that, “I am not an undercover agent of any law-enforcement. I do no work for the DEA, the FBI, the police or any other law enforcement agency.” GE-14, at 12; GE-15, at 12; GE-19, at 941.
24. With respect to the treatment the Respondent provided to the undercover patients, he believes he took adequate patient histories, but he did not perform appropriate physical exams. Tr. 35-36. The Respondent issued prescriptions to those patients based on what he thought was appropriate from the information the patients provided him in their patient history. Tr. 36.
25. Regarding UC1, the Respondent gave him a “short diagnosis,” as he was trained to do in medical school in Nigeria. Tr. 75. UC1 complained of pain in his arms and legs after exercise, but to the Respondent's observation there was nothing significantly wrong with his arms and legs. Tr. 76. Therefore, the Respondent did not think UC1 required a full body exam. Tr. 76.
26. During his first appointment with the Respondent, UC1 informed the Respondent that he was obtaining Vicodin and Adderall from a friend. GE-3, at 9. During his second appointment, UC1 informed the Respondent that he was obtaining Opana from someone at the gym. GE-5, at 5.
27. The Respondent acknowledged that he did not do a comprehensive exam on UC2. Tr. 78.
28. With respect to UC3, the Respondent testified that he did conduct some physical exam of that patient and “maybe that was why they acquitted me of that one.” Tr. 78. UC3 informed the Respondent that he did what he had to do to obtain oxycodone. GE-9, at 4.
29. At the Respondent's criminal trial, UC3 testified that during his first office visit with the Respondent, when the Respondent asked him to walk on his toes, he did so in “the normal way you'd walk on your toes.” GE-19, at 626. UC3 did not walk in a manner to illustrate an injury.
30. The Respondent acknowledged that his treatment of UC3 fell below acceptable medical standards. Tr. 85.
31. The Respondent acknowledged that the prescriptions that he wrote to UC3 on March 21, 2013, and April 25, 2013, were issued for no legitimate medical purposes and were outside the usual course of professional practice. Tr. 111.
32. On October 9, 2013, a Felony Complaint and Arrest Warrant was filed against the Respondent. GE-16, at 3. The Respondent was charged with eight felony counts regarding prescribing scheduled drugs. Tr. 44.
33. On October 15, 2013, the Respondent was arrested and his arrest was covered by the Los Angeles Times. Tr. 52; GE-16, at 3.
34. On May 14, 2015, the Respondent was convicted of seven of those original eight felony counts. Tr. 44; GE-19, at 1161-1167.
35. When the Respondent was sentenced on March 28, 2016, the trial judge reduced the felony charges to misdemeanors, and the Respondent was placed on 36 months of probation. Tr. 55; GE-21, at 1-2.
36. The Respondent testified that the sentencing judge did not restrict the Respondent's ability to practice medicine, stating that the judge left that to the MBC. Tr. 56. The Finding of Fact contained in the MBC's Interim Order of Suspension, however, indicates that the court “ordered Respondent `not to practice medicine until an order has been made by the Medical Board with respect to your ability to do so in the State of California.'” GE-17, at 2.
37. The Respondent has taken several continuing medical education courses, to include: Pain management review courses; a course presented by the American Academy of Addiction Psychiatry; a 16-hour course concerning the problems of substance abuse; a medical ethics course; and a course prescribed by courts to alcohol and drug crime clients. Tr. 43. Most of these courses were completed in 2015 after the Respondent was convicted. RE-M, P, R-S. The Respondent completed two of these courses in 2015 prior to his conviction. RE-N-O, Q.
38. The Respondent was also sentenced to perform 130 hours of community work. Tr. 45. The Respondent chose to perform those hours working with patients who suffered from addiction problems. Tr. 45.
39. The Respondent performed 353 community service hours to show his remorse. Tr. 45-46.
40. Some of the Respondent's community service hours were performed with a psychiatrist in an addiction medicine practice where the Respondent observed, educated, and talked to patients who came to the psychiatry addiction clinic. Tr. 46. The Respondent shared his story with those patients concerning his arrest. Tr. 46.
41. The Respondent also performed community service hours at sober living facilities where he counseled those with addictions and instructed on the dangers of addiction by using a PowerPoint presentation. Tr. 47-51. The Respondent also helped to maintain the cleanliness of the facilities. Tr. 47-51.
42. The physicians the Respondent worked with, to include those who wrote letters of recommendation on his behalf, are all aware that he was arrested. Tr. 52-54; RE-B-I. Most of these letters are dated in 2013.
43. Representatives from the various organizations at which the Respondent performed his community service hours also wrote letters in support of the Respondent. RE-T-CC.
44. The Respondent's probation *[with Superior Court was scheduled to expire] in March 2019. Tr. 56.
45. The Respondent entered into a Stipulated Settlement (“Settlement”) with the MBC on December 20, 2016, with an effective date of January 19, 2017. Tr. 57-58; GE-18, at 1. The Settlement allows the Respondent to practice medicine, but prohibits him from writing prescriptions for Schedule II and Schedule III controlled substances. Tr. 57; GE-18, at 4. The Settlement, however, allows the Respondent to use controlled substances in any Schedule, including II and III, while practicing anesthesia in an operating room or surgical center. Tr. 57; GE-18, at 4. The Settlement placed the Respondent on probation for seven years. Tr. 58; GE-18, at 4.
46. The Respondent understands that if he were to write a prescription for a Schedule II or a Schedule III controlled substance his California medical license could be revoked. Tr. 62.
47. The State of California can run a “CURES” report anytime to monitor prescriptions the Respondent may write. Tr. 61.
48. The Respondent has not written any prescription for Schedule II or III drugs since he was placed on probation by the MBC. Tr. 61-62.
49. The Settlement does not state that the Respondent can only practice medicine in California. Tr. 119.
50. The Respondent testified that he is in compliance with his probation with the MBC, as well as with his probation with the Superior Court of California. Tr. 62.
51. The Settlement, however, requires the Respondent to report any practice of medicine outside of California to the MBC. Tr. 134; GE-18, at 13.* [It is noted that at hearing the Respondent's attorney argued that the Settlement only required such notification to the MBC after a certain period of days. Tr. 136. The Settlement does include a thirty-day minimum time period for intent to move or travel to another state to trigger the notification requirement, and it is not entirely clear from the language in the Settlement whether or not that time period applies to practicing medicine in another state in the subsequent paragraph; however, the Respondent testified that he moved in February, when he changed his address with the DEA, and he prescribed in Texas on April 28, 2017, so it appears that the timeframe of both his stay and his practice of medicine in Texas exceeded thirty days, triggering the notification requirement to the MBC in the Settlement. Tr. 93, GE-23 and GE-24.] The Respondent did not report that he had been practicing medicine outside of California. Tr. 119, 134.
52. The Respondent submitted a quarterly report to the MBC, but it arrived late. Tr. 119; GE-18, at 12.
53. The MBC required that the Respondent take a course concerning medical ethics, which he completed in April 2017. Tr. 92; GE-18, at 8; RE-L.
54. The Settlement requires that the Respondent either have a practice monitor, who would provide quarterly evaluations to the MBC of the Respondent's medical practice or, in lieu of a monitor, the Respondent could participate in a sanctioned professional enhancement program. GE-18, at 11.
55. The Respondent is not currently practicing medicine because he had a stroke in January 2016, and he is waiting for a letter that says that he is medically qualified to resume his practice in anesthesiology. Tr. 60. The Respondent was informed by his neurologist that he could not find any residual deficits as a result of the stroke. Tr. 60. The Respondent does not currently have a practice manager assigned because he is not currently practicing medicine. Tr. 59-60.
56. The Respondent has been licensed to practice medicine in Texas since 1998 and he went there in 2017 to find an anesthesiology job. Tr. 65-66. The Respondent found an anesthesia job in Texas, but once his employer learned of the Respondent's background, the employer stopped inviting him to participate in the care of its patients. Tr. 65-66.
57. The Respondent requested that DEA change his mailing address in February 2017 from California to Texas. Tr. 95, 115.
58. The Respondent's request to change his mailing address from California to Texas was approved by DEA. Tr. 115.
59. The Respondent opened a medical practice in Texas in March 2017. Tr. 95. The heading on the prescription pad for the Respondent's office in Texas reads, “El Paso Advanced Pain Institute.” GE-23, at 2.
60. The Respondent testified that he assumed that the DEA had approved his request to change the address of his COR to Texas, but that he has no plans to move to Texas. Tr. 68, 93.
61. Before the Respondent started issuing prescriptions in Texas, he called the pharmacy that would be filling the prescription and the pharmacy told the Respondent it was okay. Tr. 96. The Respondent testified that he believed that he successfully changed the address of his COR in February 2017, before he issued the prescriptions in Texas. Tr. 97-98, 103-07.
62. The Respondent wrote prescriptions for Lyrica, a Schedule V controlled substance, for three patients who had been on Schedule II controlled substances in an effort to get them off of Schedule II controlled substances. Tr. 66, 121, 125. These prescriptions were written in April and March* [correction] 2017. GE-23 and GE-24.
63. The pharmacist-in-charge of ASP Cares Pharmacy indicated that the prescription was written from a pain clinic across the street from the pharmacy. Tr. 117-18.
64. Lyrica is not the type of controlled substance that, by itself, would raise a red flag for a pharmacist. Tr. 128-129.
65. The Respondent requested a change in the registered location for his COR in May 2017 upon his application for renewal. Tr. 116, 127.
66. The Respondent's request to change the location of his COR is still pending, and the Respondent does not have any DEA authority in Texas. Tr. 116.
Additional facts required to resolve the issues in this case are included in the Analysis section of this Recommended Decision.
To revoke a respondent's registration, the Government must prove, by a preponderance of the evidence, that the regulatory requirements for revocation are satisfied.
*
(1) The recommendation of the appropriate State licensing board or professional disciplinary authority.
(2) The [registrant's] experience in dispensing, or conducting research with respect to controlled substances.
(3) The [registrant's] conviction record under Federal or State laws relating to the manufacture, distribution, or dispensing of controlled substances.
(4) Compliance with applicable State, Federal, or local laws relating to controlled substances.
(5) Such other conduct which may threaten the public health and safety.
These public interest factors are considered separately.
The Government bears the initial burden of proof, and must justify revocation by a preponderance of the evidence.
*
The Government submitted its Proposed Findings of Fact and Conclusions of Law (“Government's Brief”) on August 11, 2017.
The Government also argues that the Respondent has not unequivocally accepted responsibility for his conduct. ALJ-37, at 10-12. While acknowledging that the Respondent had generally accepted responsibility, the Government argued that the Respondent vacillated on whether the prescriptions he had written to UC3 were improper. ALJ-37, at 10. In addition, the Respondent testified that he believed he had authority to write the prescriptions he wrote in Texas. ALJ-37, at 11. In support of its position that a registrant's acceptance of responsibility must be unequivocal the Government cited to numerous cases, to include:
Finally, the Government argues that, even if the Respondent were found to have accepted full responsibility, revocation would still be appropriate in this case to deter others. ALJ-37, at 12. In support of this position, the Government cites to
The Respondent submitted his closing statement (“Respondent's brief”) on August 25, 2017.
The Respondent correctly argues that revocation of a DEA certificate of registration is not mandatory for violations of 21 U.S.C. 824(a)(4). The Respondent then, incorrectly, argues that 21 U.S.C. 824(a)(4) is the only section that the Government is relying upon in its request for revocation. ALJ-38, at 3-4. In fact, the Respondent goes on to analyze this case under the five factors of 21 U.S.C. 823(f). ALJ-38, at 4-8.
The Respondent suggests that Factor One weighs in his favor. He notes that after the MBC reviewed all the facts of his case it determined that “public safety would be met by allowing [the Respondent] to continue to practice medicine, specifically, anesthesiology . . . .” ALJ-38, at 4-5. With respect to Factor Two, the Respondent notes that he has not had “any discipline or issues with his practicing anesthesiology.” ALJ-38, at 5. The Respondent argues that the only legal issues he has dealt with related to his practice of outpatient pain management, asserting that he will no longer be practicing in that area. ALJ-38, at 5.
Under Factor Three, the Respondent argues that the reduction of his felony convictions to misdemeanors suggests that his “conduct and/or intention was not as aggravated as those of other physicians who are prosecuted.”
With respect to Factor Four, the Respondent argues that he has been fully compliant with all state, federal, and local laws concerning the handling of controlled substances since he was arrested. The Respondent further argues that the allegation that he wrote prescriptions in Texas without authority from the DEA is “unclear at best . . . and not supported by any evidence.” ALJ-38, at 7. Finally, with respect to Factor Five, the Respondent asserts that there is no other evidence that he is a danger to the public. ALJ-38, at 8.
The Respondent's brief concludes with a discussion of acceptance of responsibility and mitigation. ALJ-38, at 8-10. He argues that he has taken full responsibility for his actions, noting the stipulations he entered into with the MBC and during these proceedings. ALJ-38, at 9. The Respondent argues that since his “arrest he has made strong and concerted efforts to show his remorse and take full responsibility for his actions.”
The Respondent argues that the evidence of record is sufficient to allow for the exercise of discretion to conclude that public safety would not be endangered by allowing him to retain his COR. ALJ-38, at 9-10. Significantly, the Respondent cites to the action of the MBC, which has allowed him to continue practicing medicine as an anesthesiologist. ALJ-38, at 10. He notes that the function of the MBC is similar to that of the DEA, to ensure public safety. ALJ-38, at 10.
The Respondent suggests that Factor One weighs in his favor because the MBC entered into a stipulated settlement wherein the Respondent has been allowed to continue his medical practice, but he may not prescribe schedule II or III controlled substances, and may only administer them while practicing anesthesiology in a hospital or licensed surgical center. ALJ-38, at 4; GE-18, at 5. In addition, the stipulated settlement placed the Respondent on probation for seven years.
In determining the public interest, the “recommendation of the appropriate State licensing board or professional disciplinary authority . . . shall be considered.” 21 U.S.C. 823(f)(1). Two forms of recommendations appear in Agency decisions: (1) A recommendation to DEA directly from a state licensing board or professional disciplinary authority (hereinafter, appropriate state entity), which explicitly addresses the granting or retention of a DEA COR; and (2) the appropriate state entity's action regarding the licensure under its jurisdiction on the same matter that is the basis for the DEA OSC.*
*
“Interpretation of a statute must begin with the statute's language.”
*
The available legislative history supports the Agency's broader reading of “recommendation.” *
*
Part B of Title V of the Comprehensive Crime Control Act of 1984 is called the “Diversion Control Amendments.” According to the Senate Report's discussion of Title V, between 60% and 70% of all drug-related deaths and injuries “involve drugs that were originally part of the legitimate drug production and distribution chain.” Senate Report, at 260, 1984 U.S.C.C.A.N., at 3442. In addition, according to the Senate Report, “diversion of legally produced drugs often evidences the same sort of large-scale trafficking more commonly associated with the trade in wholly illicit drugs.”
*
Further, I agree with prior Agency decisions' functional reading of “recommendation.” In
*
In this case, the MBC has not made a direct recommendation to the Agency regarding whether the Respondent's COR should be suspended or revoked.*
*
It is noted that the Board's reinstatement of Respondent's medical license in California was severely limited in the stipulated settlement, including compliance with seven years of probation, which does not indicate a substantial amount of trust in the Respondent.
*
The Government alleges that revocation of the Respondent's COR is appropriate under Factors Two and Four because the Respondent: (1) Issued unlawful prescriptions to three undercover investigators on five separate occasions; and (2) wrote three prescriptions for a controlled substance out of an office he maintained in Texas, even though he did not have a DEA COR for that office. The Government further alleges that by writing the prescriptions to the undercover investigators the Respondent violated 21 U.S.C. 841(a)(1); 21 CFR 1306.04(a); Cal. Health & Safety Code § 11153(a); and Cal. Bus. & Prof. Code §§ 725(a), 2241(b), 2241.5(c), and 2242(a). In addition, the Government alleges that by writing the three prescriptions in Texas the Respondent violated 21 U.S.C. 822(e) and 21 CFR 1301.12(a) and (b)(3).
Under the CSA, it is unlawful for a person to distribute controlled substances, except as authorized under the CSA. 21 U.S.C. 841(a)(1). To combat drug abuse and trafficking of controlled substances, “Congress devised a closed regulatory system making it unlawful to manufacture, distribute, dispense, or possess any controlled substance except in a manner authorized by the CSA.”
A controlled substance prescription is not valid unless it is “issued for a legitimate medical purpose by an individual practitioner acting in the usual course of his professional practice.” 21 CFR 1306.04(a). Federal regulations further provide that “[a]n order purporting to be a prescription issued not in the usual course of professional treatment . . . is not a prescription within the meaning and intent of [21 U.S.C. 829] and . . . the person issuing it, shall be subject to the penalties provided for violations of [controlled substance laws].”
Much like the federal regulations, the California Health and Safety Code, Section 11153(a), provides, in part, that, “[a] prescription for a controlled substance shall only be issued for a legitimate medical purpose by an individual practitioner acting in the usual course of his or her professional practice.” Further, Section 2242(a) of the California Business and Professions Code states that, “[p]rescribing, dispensing, or furnishing dangerous drugs . . . without an appropriate prior examination and a medical indication, constitutes unprofessional conduct.”
*
DEA recognizes several methods to show that a registrant wrote prescriptions without a legitimate medical purpose and outside of the usual course of professional practice.
With respect to UC2, the Respondent prescribed controlled substances to her on her first office visit with him after she told the Respondent that her pain was not bad,
The third undercover investigator presented to the Respondent on March 21, 2013, almost a year after the visits by UC1 and UC2. GE-9, at 1. UC3 informed the Respondent that he was taking oxycodone for an old injury he sustained playing high school football.
[I am omitting the portion of the R.D. where the ALJ sustained the allegations related to the prescriptions to the undercover investigators. I agree with the ALJ's findings and conclusions on these allegations *
*
In the Government Supplemental Prehearing Statement, the Government alleged that the Respondent wrote three prescriptions for a controlled substance in Texas in April and May 2017 without having a valid DEA COR for Texas. ALJ-29, at 5-6. The Government alleges that by writing these prescriptions the Respondent violated 21 U.S.C. 822(e), and 21 CFR 1301.12(a) and 1301.12(b)(3). ALJ-29, at 6. Title 21 of the U.S. Code, Section 822(e) requires a separate COR at each principal place of business where a registrant is prescribing controlled substances.
In this case the Government has alleged that the Respondent issued three prescriptions for Lyrica, a schedule V controlled substance. ALJ-29, at 5-6; FF 62. Specifically, the Respondent wrote the first prescription for 30 tablets of Lyrica 50 mg for patient L.C. on March 15, 2017, and it was filled at a Walgreens Pharmacy in El Paso, Texas, on March 27. 2017. ALJ-29, at 5, GE-24, at 2-3. The Respondent then called in a prescription to an ASP Cares Pharmacy in El Paso, Texas, for patient F.D. for 60 tablets of Lyrica 25 mg, on April 17, 2017, and it was filled the same day. ALJ-29, at 5; GE-23, at 4-5. The Respondent wrote his third Texas prescription on April 28, 2017. ALJ-29, at 5; GE-23, at 2. This third prescription was written for patient R.A. for 60 tablets of Lyrica 75 mg on a prescription pad containing the heading, “El Paso Advanced Pain Institute.” ALJ-29, at 5; GE-23, at 2. The prescription was filled at an ASP Cares Pharmacy in El Paso, Texas on May 1, 2017. ALJ-29, at 5; GE-23, at 3. All three prescriptions contain the Respondent's California COR number. GE-23, at 2-5, GE-24, at 2. That COR, however, lists the Respondent's principal place of business as 5857 Pine Avenue, Chino Hills, California 91709. Stip. 1.
Under 21 CFR 1306.05(a),*
*
Both the CSA and its implementing regulations require a “separate registration . . . at each principal place of business or professional practice where the applicant . . . dispenses controlled substances . . . .” 21 U.S.C. 822(e)(1); 21 CFR 1301.12(a);
In paragraph 6 of the OSC, the Government alleged that a Los Angeles County jury convicted the Respondent of seven felony counts of issuing unlawful controlled substance prescriptions for Adderall, hydrocodone, and alprazolam on March 28, 2016. ALJ-1, at 4. These felony convictions were reduced to misdemeanors upon sentencing. ALJ-1, at 4. The Government asserts that these convictions may be considered in determining whether the Respondent's registration is inconsistent with the public interest under 21 U.S.C. 823(f)(3) and 824(a)(4).
As to Factor Three, the Respondent has been convicted of seven offenses violating California law “relating to the manufacture, distribution, or dispensing of controlled substances.” 21 U.S.C. 823(f)(3); FF 34-35. A review of GE-19 and GE-20 reveals that the Respondent's convictions were directly
The Government has proven the allegations contained in paragraph 6 of the OSC through the Stipulations and Government Exhibits 19 and 20. In addition, the Respondent testified that he had been convicted of seven counts involving the prescriptions he wrote for controlled substances. Tr. 44. Accordingly, the allegations, contained in paragraph 6 of the OSC, concerning the Respondent's conviction of unlawfully writing prescriptions for controlled substances are
*[Although I have considered Factor One in favor of Respondent, it is minimized by the circumstances described above, and it is ultimately outweighed by the Factors weighing against him.] *
*
After the Government presents a
The Respondent may accept responsibility by providing evidence of his remorse, his efforts at rehabilitation, and his recognition of the severity of his misconduct.
*
It is clear in this case that the Respondent attempted to accept full responsibility for his actions. It is clear because, prior to the hearing, the Respondent entered into extensive stipulations of fact, essentially relieving the Government of the need to present any evidence of the Respondent's conduct that violated the CSA and its implementing regulations. The Record clearly demonstrates that the Respondent understood the importance of those stipulations. The Respondent acknowledged that by entering into the stipulations that essentially admitted to all the facts the Government would need to prove its allegations against him. Tr. 14. He also acknowledged that if no other evidence had been admitted in the case, that I could issue a well-founded recommendation that his COR be revoked. Tr. 14-15. The Respondent also acknowledged that the stipulations shifted the burden of proof to him to “demonstrate contrition and remedial actions that would convince me that in spite of the conduct [he] admitted to, that I should make a recommendation to . . . not revoke [his] certificate of registration.” Tr. 15. The Respondent has not met that burden.
Here, the Government accurately argued in its Brief that while the Respondent “generally accepted responsibility for his improper prescribing to the three undercover investigators, his admission of wrongdoing was not without some vacillation.” ALJ-37, at 10. To be accurate, the only vacillation concerned the Respondent's testimony relative to the prescriptions the Respondent wrote for UC3, on March 21, 2013 and April 25, 2013. Indeed, the Respondent waivered on his acceptance of responsibility in writing those prescriptions. While he testified that he did do “some exam” of UC3, it seems that the only exam he conducted was to have UC3 perform a heel and toe walk on March 21, 2013. Tr. 78; GE-19, at 625-26. Further, the Respondent's purpose in having UC3 perform a heel and toe walk was not to assess UC3's pain level, but rather to determine if he needed to send UC3 to a specialist. GE-19, at 911-12. No examination was conducted on April 25, 2013.
The Respondent also had problems in accepting responsibility for the three prescriptions he wrote in Texas. Initially, the Respondent stipulated that he had maintained a principal place of business in Texas, but he was not registered with the DEA in Texas. Stip. 54. During his testimony, however, he again “vacillated.” When asked if he had a certificate of registration for Texas, the Respondent testified that he had submitted a change of address and that he believed the DEA had approved the change. Tr. 92-93. The Respondent further testified that when he wrote the prescriptions in Texas, he believed he had the authority to do so. Tr. 105-107. The Respondent could have presented testimony that when he wrote the prescriptions in Texas he believed he had authority to do so, but now he realizes that he was wrong in that belief. But, the Respondent did not do so.
In this case, the Government has established that the Respondent unlawfully wrote prescriptions for controlled substances to three undercover investigators on five separate occasions beginning in March 2012 and ending in April 2013. After the Respondent was arrested, the Government filed a motion to revoke his bail because he continued writing prescriptions. GE-16, at 4; GE-19, at 1170, 1173. Then, as a result of these unlawful prescriptions, in May 2015 the Respondent was convicted in the Superior Court of the State of California, County of Los Angeles, of seven counts concerning issuing unlawful prescriptions for Adderall, hydrocodone, and alprazolam. That court imposed a sentence in March 2016. Then in June 2016, the MBC suspended the Respondent's medical license, a suspension which remained in effect until January 2017. In February 2017, the Acting Administrator of the DEA issued an Order restricting the Respondent's COR, and remanded the Respondent's case to the Office of Administrative Law Judges for further proceedings. Then in March and April of 2017, the Respondent wrote three prescriptions for Lyrica, a Schedule V controlled substance, in Texas, without having the authority to write such prescriptions from the DEA.
At his hearing the Respondent accepted some responsibility for his actions. I find, however, that the Respondent's limited acceptance of responsibility is outweighed by his prescribing transgressions detailed above, particularly considering the timeline and the fact that the Respondent's acceptance of responsibility is equivocal. *[
*
When considering whether the Respondent's continued registration is consistent with the public interest, an ALJ must consider both the egregiousness of the registrant's violations and the DEA's interest in deterring future misconduct by both the registrant as well as other registrants.
In this case, the Respondent's numerous transgressions are sufficiently egregious to warrant revocation.
The Government established that the Respondent's continued registration is inconsistent with the public interest because of his improper prescribing, and his state conviction relating to his unlawful prescribing of controlled substances. While the Respondent admitted to many of the Government's factual allegations, he failed to fully accept responsibility for his actions. Furthermore, even had the Respondent accepted full responsibility, the egregiousness of his violations may *
Dated: August 28, 2017.
Notice of application.
Registered bulk manufacturers of the affected basic classes, and applicants therefore, may file written comments on or objections to the issuance of the proposed registration on or before May 18, 2020.
Written comments should be sent to: Drug Enforcement Administration, Attention: DEA
In accordance with 21 CFR 1301.33(a), this is notice that on November 6, 2019, Siegfried USA, LLC, 33 Industrial Park Road, Pennsville, New Jersey 08070-3244 applied to be registered as a bulk manufacturer of the following basic classes of controlled substances:
The company plans to manufacture the listed controlled substances in bulk for sale to its customers.
On March 13, 2020, the Department of Justice lodged a proposed Consent Decree with the United States District Court for the Central District of California (“Court”) in the matter of
The United States filed a Complaint against Plains All American Pipeline, L.P. and Plains Pipeline, L.P. (jointly, “Plains”) arising out of Plains' violations of pipeline safety laws and liability for the May 19, 2015, discharge of approximately 2,934 barrels of crude oil from Plains' Line 901, located near Refugio State Beach and Santa Barbara, California. The Complaint seeks penalties, injunctive relief, and natural resource damages and assessment costs for the United States, on behalf of the United States Department of Transportation, Pipeline and Hazardous Materials Safety Administration; the United States Environmental Protection Agency; the United States Department of the Interior; the United States Department of Commerce, National Oceanic and Atmospheric Administration; and the United States Coast Guard. The United States' claims are brought, as applicable, under the Pipeline Safety Laws, 49 U.S.C. 60101
The proposed Consent Decree requires Plains to: (1) Pay $24 million in penalties; 2) implement injunctive relief to improve Plains' nationwide pipeline system, in addition to modifying operations relating to the May 19, 2015, oil discharge from Plains' Line 901; and 3) pay $22.325 million in natural resource damages. Plains previously reimbursed the United States and the State of California approximately $10 million for natural resource damage assessment costs, and the United States approximately $4.26 million for removal or clean-up costs.
The publication of this notice opens a period for public comment on the proposed Consent Decree. Comments should be addressed to the Assistant Attorney General, Environment and Natural Resources Division, and should refer to
During the public comment period, the lodged proposed Consent Decree may be examined and downloaded at this Justice Department website:
We will provide a paper copy of the Consent Decree upon written request and payment of reproduction costs. Please mail your request and payment to: Consent Decree Library, U.S. DOJ—ENRD, P.O. Box 7611, Washington, DC 20044-7611.
Please enclose a check or money order for $25.50 (25 cents per page reproduction cost) payable to the United States Treasury, for a paper copy of the proposed Consent Decree.
On March 13, 2020, the Department of Justice lodged a proposed Consent Decree with the United States District Court for the Eastern District of Virginia in the lawsuit entitled
The United States and the Commonwealth of Virginia filed this lawsuit for injunctive relief and civil penalties against Virginia Electric and Power Company (d/b/a Dominion Energy Virginia). The United States and the Commonwealth allege claims under the Clean Water Act and the Virginia State Water Control Law for violations of NPDES permits at certain facilities in Virginia and West Virginia. In addition, the United States alleges violations of the Emergency Planning and Community Right-to-Know Act and the Comprehensive Environmental Response, Compensation, and Liability Act at the Bellemeade Power Station in Richmond, Virginia, and the Mt. Storm Power Station in Grant County, West Virginia. Finally, the Commonwealth alleges violations of the Virginia State Water Control Law relating to certain unpermitted discharges from the Chesterfield Power Station in Chesterfield County, Virginia.
Under the proposed Consent Decree, Defendant will perform injunctive relief designed to prevent future violations, including auditing and implementation of an environmental management system, a third party environmental audit, internal environmental audits, and training. In addition, Defendant will pay a total civil penalty of $1.4 million.
The publication of this notice opens a period for public comment on the proposed Consent Decree. Comments should be addressed to the Assistant Attorney General, Environment and Natural Resources Division, and should refer to
During the public comment period, the proposed Consent Decree may be examined and downloaded at this Justice Department website:
Please enclose a check or money order for $15 (25 cents per page reproduction cost) payable to the United States Treasury.
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Final distribution determination.
The Copyright Royalty Judges announce their final determination of the distribution of the digital audio recording technology (DART) royalty fees in the 2007, 2008, 2009, 2010, and 2011 Sound Recordings Funds.
Docket: For access to the docket to read background documents, go to eCRB, the Copyright Royalty Board's electronic filing and case management system, at
Anita Blaine, Program Specialist, by telephone at (202) 707-7658 or by email at
On December 26, 2018, the Copyright Royalty Judges (Judges) commenced a proceeding to determine the distribution of the digital audio recording technology (DART) royalties in the 2007, 2008, 2009, 2010, and 2011 Sound Recordings Funds, which, for purposes of this proceeding, consist of the Featured Recording Artists Subfund and the Copyright Owners Subfund. 83 FR 66312, 66313.
The Judges received Petitions to Participate (PTP) from David Powell, Eugene “Lambchops” Curry, Herman Kelly, and the Alliance of Artists and Recording Companies (AARC).
Because no participant other than AARC filed a claim to the 2007 Featured Recording Artist Subfund, the Judges determined that the royalties in that fund were not in controversy and were available for distribution to AARC. 84 FR 27362 (Jun. 12, 2019). Consequently, the 2007 Featured Recording Artist Subfund is no longer a part of this proceeding.
On April 24, 2019, AARC filed a Notice of Settlement on its own behalf and on behalf of Mr. Kelly. The Notice of Settlement stated that AARC and Mr. Kelly “have reached a settlement for the relevant royalty years, 2008-2011, the years for which Kelly filed claims” and that “AARC will represent Kelly as an AARC participant (member) in this consolidated proceeding . . . .” Notice of Settlement at 1. Mr. Kelly is, therefore, no longer a separate participant in this proceeding.
On January 15, 2020, the Judges granted AARC's Motion to Dismiss Eugene Curry from the 2007-2011 DART Sound Recordings Fund Copyright Owners Subfund Distribution Proceeding.
On January 17, 2020, the Judges granted AARC's Motion to Dismiss CGN's Claim to Any Portion of the 2007-2011 DART Sound Recordings Fund Copyright Owners Subfund.
Section 801(b)(3)(A) of the Copyright Act states that the Judges may authorize distribution of royalty fees collected pursuant to Section 1005 of the Copyright Act if they find that the distribution is not subject to controversy. 17 U.S.C. 801(b)(3)(A). In the current proceeding, AARC is the only remaining party with claims to DART royalties in the 2009, 2010, and 2011 Featured Recording Artists Subfunds and the 2007, 2008, 2009, 2010, and 2011 Copyright Owners Subfunds. Therefore, the DART royalties in the enumerated Subfunds are not in controversy.
The Judges therefore
The Judges will forward this determination to the Register of Copyrights and the Librarian of Congress for review and approval. The Librarian shall publish this Determination within 60 days of the date of this order. This Determination will become final upon publication in the
The Register of Copyrights closed her review of this Determination on March 6, 2020, with no finding of legal error.
Cost Accounting Standards Board, Office Federal Procurement Policy, Office of Management and Budget.
Notice.
The Office of Federal Procurement Policy, Cost Accounting Standards Board, is publishing this notice to announce the availability of a notice discussing the Board's responses to public comments on its principles, roadmap, and template to address the conformance of the Cost Accounting Standards (CAS) to Generally Accepted Accounting Principles (GAAP). The comments were received in response to a Staff Discussion Paper (SDP) published on March 13, 2019.
Raymond Wong, Cost Accounting Standards Board Director (Telephone 202-395-6805).
The Office of Federal Procurement Policy (OFPP), Cost Accounting Standards Board (CAS Board or Board), is releasing a notice to discuss responses to public comments on the guiding principles, roadmap, and template developed by the CAS Board to address how it will approach the requirement in section 820 of Public Law 114-328 to conform CAS to Generally Accepted Accounting Principles (GAAP) to the maximum extent practicable. The March 2019 SDP
Cost Accounting Standards Board, Office Federal Procurement Policy, Office of Management and Budget.
Notice of agenda for closed Cost Accounting Standards Board meetings.
The Office of Federal Procurement Policy (OFPP), Cost Accounting Standards Board (CAS Board) is publishing this notice to advise the public of its winter meetings. The notice is published pursuant to section 820(a) of the National Defense Authorization Act (NDAA) for Fiscal Year (FY) 2017, which requires the CAS Board to publish agendas of its meetings in the
March 19, 2020.
New Executive Office Building, 725 17th Street NW, Washington, DC 20503
Raymond Wong, Staff Director, Cost Accounting Standards Board (telephone: 202-395-6805; email:
The CAS Board is issuing this notice for public awareness of a meeting held on February 20, 2020 and a meeting upcoming on March 19, 2020. The list of agenda items for these meetings is set forth below. While CAS Board meetings are closed to the public, the Board welcomes comments and inquiries, which may be directed to the staff director using the contact information provided above.
1.
2.
3.
4.
5. Board during the prior year. The Board will discuss its first annual report to Congress.
Request change in published advisory committee meeting dates and attendance type; corrected.
The National Science Foundation (NSF) published a document in the
In the
For Further information, please contact Crystal Robinson,
In accordance with the Federal Advisory Committee Act (Pub. L. 92-463, as amended), the National Science Foundation (NSF) announces the following meeting:
Pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934 (“Act”),
The Exchange proposes to amend Rule 4121 (Trading Halts Due to Extraordinary Market Volatility) to enhance the re-opening auction process for Nasdaq listed securities following trading halts due to extraordinary market volatility.
The text of the proposed rule change is available on the Exchange's website at
In its filing with the Commission, the Exchange included statements concerning the purpose of and basis for the proposed rule change and discussed any comments it received on the proposed rule change. The text of these statements may be examined at the places specified in Item IV below. The Exchange has prepared summaries, set forth in sections A, B, and C below, of the most significant aspects of such statements.
The purpose of the proposed rule change is to amend the re-opening auction process for Nasdaq listed securities following trading halts due to extraordinary market volatility (
Today, trading in Nasdaq listed securities would resume on the Exchange in most cases through a Halt Cross,
Rule 4120(c)(10), which describes the current process for resuming trading after a Trading Pause, provides for an initial auction period and additional auction periods with widening price collars should the security fail to conclude each auction period. For any such security listed on Nasdaq, prior to terminating the pause, there is a 5-minute initial Display Only Period during which market participants may enter quotations and orders in that security in Nasdaq systems. During this initial period, the Exchange also establishes the auction reference price (hereinafter “LULD Auction Reference Price”),
The Exchange now proposes to implement this process for resuming trading following a market-wide circuit breaker under Rule 4121 as well. As noted above, the current re-opening process for a Level 1 or Level 2 trading halt initiated under Rule 4121 does not have a mechanism for calculating price collars and a process for widening the collars if necessary to accommodate buy or sell pressure outside of the collars then in effect. The Exchange therefore believes that its proposal will facilitate a fair and orderly market following such trading halts initiated pursuant to a Level 1 or Level 2 market-wide circuit breaker that is designed to reduce the potential for significant price disparity in post-auction trading. The proposed process for re-opening a Nasdaq listed security under Rule 4121 would be substantially similar to the re-opening process employed today for Trading Pauses under Rule 4120(c)(10), with certain differences discussed below, primarily related to the calculation of the halt auction collars.
Accordingly, the Exchange will provide in new paragraph (d) to Rule 4121 that a Level 1 or Level 2 trading halt initiated under this Rule (“MWCB Halt”) shall be terminated when Nasdaq releases the security for trading.
Proposed Rule 4121(d)(1)(A) will provide that during the Initial Display Only Period, the Exchange will also establish the “Auction Reference Price.” The Auction Reference Price shall mean the Nasdaq last sale price (either round or odd lot) after 9:15 a.m. Eastern Time (“ET”) but prior to the MWCB Halt and, if none, the prior trading day's Nasdaq Official Closing Price (“NOCP”). The Exchange is not proposing to use the LULD Auction Reference Price, which is based on the Price Band that triggered the Trading Pause, as the Exchange believes that a different reference is necessary for a re-opening process that is unrelated to the LULD mechanism. The Exchange has chosen to use the last Nasdaq sale price prior to the MWCB Halt (or if none, the prior trading day's NOCP) in this circumstance as this price is reflective of the current market for the halted security. The Exchange's proposal is similar to the current implementation on Arca and BZX.
Proposed Rule 4121(d)(1)(B) will describe how the Exchange would calculate the upper and lower “MWCB Auction Collar” prices during the Initial Display Period. Specifically, the initial upper and lower collar prices would be determined as follows:
• The lower MWCB Auction Collar is derived by subtracting 5% of the Auction Reference Price, rounded to the nearest minimum price increment,
• The upper MWCB Auction Collar is derived by adding 5% of the Auction Reference Price, rounded to the nearest minimum price increment, or in the case of securities with an Auction Reference Price of $3 or less, $0.15, to the Auction Reference Price.
In contrast, the initial price collar thresholds currently used for the LULD mechanism are applied only in the direction of the trading that invoked the Trading Pause.
Proposed Rules 4121(d)(2) and (d)(3) will specify the circumstances when the Exchange would extend the Display Only Period for a MWCB Halt re-opening process, and how the Exchange would adjust the MWCB Auction Collars for each extension. The proposed process for initiating extensions will follow the process currently used for extending Trading Pauses under LULD
• If the Display Only Period is extended because the calculated price at which the security would be released for trading is below the lower MWCB Auction Collar price or all sell market orders would not be executed in the cross, then the new lower MWCB Auction Collar price is derived by subtracting 5% of the Auction Reference Price, which was rounded to the nearest minimum price increment, or in the case of securities with an Auction Reference Price of $3 or less, $0.15, from the previous lower MWCB Auction Collar price, and the upper MWCB Auction Collar price will not be changed.
• If the Display Only Period is extended because the calculated price at which the security would be released for trading is above the upper MWCB Auction Collar price or all buy market orders would not be executed in the cross, then the new upper MWCB Auction Collar price is derived by adding 5% of the Auction Reference Price, which was rounded to the nearest minimum price increment, or in the case of securities with an Auction Reference Price of $3 or less, $0.15, to the previous upper MWCB Auction Collar price, and the lower MWCB Auction Collar price will not be changed.
At the conclusion of the Extended Display Only Period, the security will be released for trading unless, at the end of the Extended Display Only Period, Nasdaq detects an order imbalance in the security. In that case, Nasdaq will further extend the Display Only Period, continuing to adjust the MWCB Auction Collar prices every five minutes in the manner described in Rule 4121(d)(2) until the security is released for trading. During any additional Extended Display Only Period after the first Extended Display Only Period, Nasdaq shall release the security for trading at the first point there is no order imbalance.
Proposed Rule 4121(d)(4) will specify that an order imbalance would be established for purposes of the process under Rule 4121 as follows:
• The calculated price at which the security would be released for trading is above (below) the upper (lower) MWCB Auction Collar price calculated under paragraphs (1), (2), or (3) of Rule 4121(d); or
• all market orders would not be executed in the cross.
Proposed Rule 4121(d)(5) will describe how the MWCB Auction Collars will function in the event of more than one trading halt initiated under Rule 4121 in the same day. In the event of a Level 2 Market Decline while a security is in a Level 1 MWCB Halt and has not been released for trading, Nasdaq will recalculate the lower and upper MWCB Auction Collar prices in the particular security in accordance with paragraph (1)(B) of Rule 4121.
The Exchange also proposes to add new paragraph (e) to Rule 4121 to describe how the Exchange will handle the publication of MWCB Halt Information. Specifically, at the beginning of the Initial Display Only Period and continuing through the resumption of trading, Nasdaq will disseminate by electronic means an Order Imbalance Indicator
The Exchange plans to implement the proposed changes during April 2020, and will provide prior notice in an Equity Trader Alert.
The Exchange believes that its proposal is consistent with Section 6(b) of the Act,
The Exchange believes that the proposed rule change is consistent with the Act because it would amend the halt auction process following a MWCB Halt to be more closely aligned with the process currently implemented for halt auctions following a Trading Pause under the LULD Plan. The Exchange amended its re-opening process following a Trading Pause to better account for buy or sell pressure by changing the manner in which initial LULD Auction Collars are established, and widening the collars as appropriate to accommodate trading interest submitted to participate in the auction. The Exchange believes that these changes have been generally successful in facilitating a fair and orderly process for re-opening securities following a Trading Pause. The Exchange has therefore decided to use a similar process for halt auctions following a MWCB Halt. The Exchange believes that its proposal would benefit investors by facilitating price discovery and promoting more consistency in how the Exchange conducts the re-opening process following a Trading Pause or a MWCB Halt.
While the proposed re-opening process following MWCB Halts would largely follow the re-opening process in place today for Trading Pauses, there would be several notable differences. These differences are primarily designed to ensure that suitable MWCB Auction Collars are utilized for the re-opening process following MWCB Halts. For instance, while an Auction Reference Price based on the Price Band that triggered the Trading Pause continues to be appropriate in the context of the re-opening process following Trading Pauses, the Exchange believes that a different reference is necessary for the re-opening process for MWCB Halts. The Exchange has chosen to use the Nasdaq last sale price and, if none, the prior trading day's NOCP as the MWCB Auction Reference Price in these circumstances as this price is reflective of the current market for the halted security. Similarly, the Exchange believes that it is appropriate to calculate both upper and lower MWCB Auction Collars that are a specified percentage or dollar amount from this reference price because MWCB Halts do not involve security specific buy or sell pressure. These differences are similar to the application of MWCB halt auction collars on Arca and BZX today,
Otherwise, the proposed re-opening process for MWCB Halts is consistent with the current LULD re-opening process. Similar to the current LULD re-opening process, the Exchange also believes that the proposed process is consistent with the protection of investors and the public interest because they are designed to facilitate price discovery by ensuring that all market order interest could be satisfied in the auction process following MWCB Halts. Furthermore, the Exchange believes that the standardized procedures to extend MWCB Halt auctions an additional five minutes are appropriate because this would provide additional time to attract offsetting liquidity. If at the end of such extension, market orders still cannot be cannot be satisfied within the applicable collars, or if the re-opening price would be outside of the applicable collars, the Exchange would extend the halt auction process an additional five minutes. The Exchange believes that extending the auction in these circumstances would protect investors and the public interest by reducing the potential for significant price disparity in post-auction trading. With each such extension, the Exchange believes that it is appropriate to widen the price collar threshold on the side of the market on which there is buying or selling pressure as market conditions may prevent an order imbalance from being resolved within the prior auction collars.
The Exchange also believes it is appropriate to add language clarifying how the MWCB Auction Collars will function in the event of more than one trading halt initiated under Rule 4121 in the same day. The proposed changes would increase transparency in how the Exchange would handle the calculation of MWCB Auction Collars, and is therefore consistent with the public interest and the protection of investors. The Exchange likewise believes that specifying how it will handle the publication of MWCB Halt information will bring greater transparency around the operation of the Exchange's auction process.
The Exchange does not believe that the proposed rule change will impose any burden on competition not necessary or appropriate in furtherance of the purposes of the Act. The proposed rule change is designed to provide for a measured and transparent process for re-opening Nasdaq listed securities after a MWCB Halt that is similar to the current re-opening process following a Trading Pause initiated under the LULD Plan and the process already implemented on Arca and BZX for non-LULD regulatory halts.
No written comments were either solicited or received.
Because the foregoing proposed rule change does not: (i) Significantly affect the protection of investors or the public interest; (ii) impose any significant burden on competition; and (iii) become operative for 30 days from the date on which it was filed, or such shorter time as the Commission may designate, it has become effective pursuant to Section 19(b)(3)(A)(iii) of the Act
A proposed rule change filed pursuant to Rule 19b-4(f)(6) under the
At any time within 60 days of the filing of the proposed rule change, the Commission summarily may temporarily suspend such rule change if it appears to the Commission that such action is necessary or appropriate in the public interest, for the protection of investors, or otherwise in furtherance of the purposes of the Act. If the Commission takes such action, the Commission shall institute proceedings to determine whether the proposed rule should be approved or disapproved.
Interested persons are invited to submit written data, views, and arguments concerning the foregoing, including whether the proposed rule change is consistent with the Act. Comments may be submitted by any of the following methods:
• Use the Commission's internet comment form (
• Send an email to
• Send paper comments in triplicate to Secretary, Securities and Exchange Commission, 100 F Street NE, Washington, DC 20549-1090.
Copies of the submission, all subsequent amendments, all written statements with respect to the proposed rule change that are filed with the Commission, and all written communications relating to the proposed rule change between the Commission and any person, other than those that may be withheld from the public in accordance with the provisions of 5 U.S.C. 552, will be available for website viewing and printing in the Commission's Public Reference Room, 100 F Street NE, Washington, DC 20549, on official business days between the hours of 10:00 a.m. and 3:00 p.m. Copies of the filing also will be available for inspection and copying at the principal office of the Exchange. All comments received will be posted without change. Persons submitting comments are cautioned that we do not redact or edit personal identifying information from comment submissions. You should submit only information that you wish to make available publicly.
All submissions should refer to File Number SR-NASDAQ-2020-012 and should be submitted on or before April 9, 2020.
For the Commission, by the Division of Trading and Markets, pursuant to delegated authority.
Pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934 (“Act”),
The Exchange proposes to amend Rule 5.24.
(a)-(d) No change.
(e)
(1)
All non-trading rules of the Exchange will continue to apply.
The text of the proposed rule change is also available on the Exchange's website (
In its filing with the Commission, the Exchange included statements concerning the purpose of and basis for the proposed rule change and discussed any comments it received on the proposed rule change. The text of these statements may be examined at the places specified in Item IV below. The Exchange has prepared summaries, set forth in sections A, B, and C below, of the most significant aspects of such statements.
The Exchange proposes to amend Rule 5.24 regarding the Exchange's business continuity and disaster recovery plans. Rule 5.24 describes which Trading Permit Holders (“TPHs”) are required to connect to the Exchange's backup systems as well as certain actions the Exchange may take as part of its business continuity plans so that it may maintain fair and orderly markets if unusual circumstances occurred that could impact the Exchange's ability to conduct business. This includes what actions the Exchange would take if its trading floor became inoperable. Specifically, Rule 5.24(d) states if the Exchange trading floor becomes inoperable, the Exchange will continue to operate in a screen-based only environment using a floorless configuration of the System that is operational while the trading floor facility is inoperable. The Exchange would operate using that configuration only until the Exchange's trading floor facility became operational. Open outcry trading would not be available in the event the trading floor becomes inoperable.
The Exchange has been closely monitoring the current situation regarding the novel coronavirus, and has reviewed its pandemic planning procedures in connection with this situation. While the Exchange's trading floor is currently operating normally, the Exchange proposes certain amendments to Rule 5.24, which the Exchange believes are necessary to maintain a fair and orderly market in the event the Exchange suspended open outcry trading. Specifically, the proposed rule change amends Rule 5.24(e)(1) to provide that, in the event that the trading floor becomes inoperable, trading will be conducted pursuant to all applicable System Rules, except that open outcry Rules will not be in force, including but not limited to the Rules (or applicable portions of the Rules) in Chapter 5, Section G, and as follows:
(1) Notwithstanding the introductory paragraphs of Rules 5.37 and 5.73,
(2) with respect to complex orders in exclusively listed index option classes:
(a) Notwithstanding Rule 5.4(b), the minimum increment for bids and offers on complex orders with any ratio equal to or greater than one-to-twenty-five (0.04) and equal to or less than twenty-five-to-one (25.00) is $0.01 or greater, which may be determined by the Exchange on a class-by-class basis, and the legs may be executed in $0.01 increments;
(b) notwithstanding the definition of “complex order” in Rule 1.1, for purposes of Rule 5.33, the term “complex order” means a complex order with any ratio equal to or greater than one-to-twenty-five (0.04) and equal to or less than twenty-five-to-one (25.00); and
(3) the contract volume a Market-Maker trades electronically during a time period in which the Exchange operates in a screen-based only environment will be excluded from determination of whether a Market-Maker executes more than 20% of its contract volume electronically in an appointed class during any calendar quarter, and thus is subject to the continuous electronic quoting obligation, as set forth in Rule 5.52(d).
The Exchange believes the proposed rule change will allow it to maintain fair and orderly markets and facilitate trading in as continuous manner as possible in the event extraordinary circumstances cause the trading floor to become inoperable. These proposed changes would apply only during times when the Exchange's trading floor was inoperable. The current Rules would continue to apply when normal conditions exist, and the Exchange offers both electronic and open outcry trading. All non-trading rules of the Exchange, including business conduct rules, would continue to apply.
The Exchange first proposes to permit Market-Makers with an appointment in the applicable class to be solicited for the Initiating Order submitted for execution against an Agency Order in a proprietary index option class into an AIM Auction pursuant to Rule 5.37 or a simple FLEX AIM Auction pursuant to Rule 5.73. Currently, the introductory paragraphs of Rules 5.37 and 5.73 prohibit Market-Makers with an appointment in the applicable class from being solicited to execute against the Agency Order in an AIM or simple FLEX AIM Auction, respectively. No similar restriction applies to crossing transactions in open outcry trading. Brokers seeking liquidity to execute against customer orders, particularly large customer orders, on the trading floor regularly solicit Market-Makers with an appointment in the applicable
The second proposed change would permit complex orders in exclusively listed index options with any ratio up to a ratio of up to 25-to-1 to execute electronically and be eligible for certain complex order benefits. Currently, the Exchange's System does not accept complex orders with a ratio of less than one-to-three or greater than three-to-one for electronic processing.
The Exchange currently accepts complex orders in any class with ratios less than one-to-three and greater than three-to-one for manual handling and open outcry execution.
If the Exchange's trading floor was inoperable, under current Rules, there would be no opportunity for complex orders in exclusively listed index options with ratios greater than three-to-one and less than or equal to 25-to-1 to execute on the Exchange. During the last week of February 2020, there were over 4,000 complex orders in those classes with such ratios that executed on the trading floor,
It is possible to modify the System to require complex orders with ratios greater than three-to-one to trade pursuant to an allocation algorithm and increment consistent with what is currently required in open outcry
The Exchange understands that the simple order market may be somehow disadvantaged by allowing certain multi-legged orders that have ratios larger than three-to-one to receive the complex order benefits described above. One concern appears to be that if the ratios are too greatly expanded, market participants will, for example, enter multi-legged strategies designed primarily to gain priority over orders on the limit order book or in the trading crowd, rather than to effectuate a bona fide trading or hedging strategy. Since the Exchange is proposing to permit complex orders with ratios no greater than 25-to-1 to be electronically processed if the trading floor were inoperable, similar to the practice today, this will be systematically enforced for electronic trading.
Additionally, the Exchange understands that permitting more complex orders to avail themselves of the complex order priority currently only available to complex orders with ratios less than or equal to three-to-one may result in more legs trading at the same price as resting priority customer orders. As noted above, the System will not execute any complex order, regardless of ratio, at a price that would cause a component of the complex strategy to trade at a price ahead of a priority customer order on the book without improving the BBO of at least one component. While the proposed rule change may result in legs of more complex orders trading at the same price as resting priority customer orders, the Exchange believes priority customer orders are resting on the simple book at the BBO a minimal amount of the time, thus making this risk de minimis. The Exchange notes that during the last week of February 2020, across all classes, approximately 84% of contracts executed as parts of complex trades occurred inside the BBO for the applicable legs. This includes orders with ratios equal to three-to-one or less, which would only have to improve the BBO of one leg if there was a priority customer order resting at the BBO in the complex strategy. In other words, the vast majority of legs executed as part of complex trades execute at a price better than the BBO of the applicable leg, and thus at a price better than required by the rules. The Exchange believes this further demonstrates the likely de minimis nature of the perceived risk.
Based on the number of orders submitted to, and trades that occur on, the trading floor, the Exchange believes it has sufficient system capacity to handle any additional traffic that may result from the proposed rule change during a time when the trading floor is inoperable. The Exchange's Regulatory Division will continue its standard routine surveillance reviews for electronic trading as it does today, and has put together a regulatory plan to surveil the additional changes being proposed when operating in a screen-based only environment.
Cboe Options (and its designated TPHs pursuant to Rule 5.24) participates in the annual Reg SCI/SIFMA BCP test from its disaster recovery data center in accordance with Rule 1004 under Regulation SCI. Additionally, Cboe Options conducted an internal test (in which no TPHs participated) of an all-electronic configuration in preparation for the October 2019 System migration. The Exchange recently made available testing of the all-electronic configuration in a certification environment beginning Thursday, March 12, 2020, and plans to provide customers with a testing opportunity of the all-electronic configuration on Saturday, March 14, 2020. At least seven TPHs have submitted orders into this certification environment as of the time of this rule filing.
The third proposed change would exclude any contract volume by a Market-Maker during a time when the Exchange's trading floor was inoperable from the determination of whether the Market-Maker would be subject to continuous quoting obligations in Rule 5.52(d). Currently, if a Market-Maker executes more than 20% of its contract volume electronically during a calendar quarter, it is obligated to quote electronically in a designated percentage of series within that class for a designated percentage of time. Once a Market-Maker becomes subject to that continuous electronic quoting obligation, the Market-Maker will continue to be subject to it, even if there is a subsequent calendar quarter in which it executes less than 20% of its contract volume electronically. While most Market-Makers are currently subject to that continuous electronic quoting obligation, there are certain Market-Makers who execute at least 80% of their contract volume in open outcry. If the trading floor were inoperable, those Market-Makers would execute a larger percentage of their contract volume electronically as a result. Depending on the length of time for which the trading floor were inoperable, it is possible those Market-Makers would exceed that 20% threshold, which would subject them to continuous electronic quoting obligations beginning the following calendar quarter (even if open outcry trading has resumed). The Exchange believes it would be unduly burdensome to subject a Market-Maker to additional obligations because of the unavailability of the Exchange facility where that Market-Maker conducts most of its business under normal trading circumstances, including after the extraordinary circumstances that caused the suspension of open outcry trading no longer exist.
The Exchange believes the proposed rule change is consistent with the Securities Exchange Act of 1934 (the “Act”) and the rules and regulations thereunder applicable to the Exchange and, in particular, the requirements of Section 6(b) of the Act.
In particular, the Exchange believes the proposed rule change will remove impediments to and perfect the mechanism of a free and open market and a national market system, and, in general, protect investors and the public interest by creating an all-electronic trading environment that permits continued trading in an uninterrupted manner as much as practicable if extraordinary circumstances cause the trading floor to become inoperable. The Exchange believes the proposed rule change will create an all-electronic trading environment similar to the otherwise unavailable open outcry trading environment. The Exchange believes the proposed rule change is necessary and appropriate to provide continued execution opportunities in such a situation for orders that generally execute in open outcry trading.
With respect to the proposed rule change to permit appointed Market-Makers to be solicited to trade against an Agency Order submitted into a simple AIM Auction (both for FLEX and non-FLEX Options in exclusively listed index option classes), the majority of liquidity provided to orders executed as part of an open outcry cross is provided by appointed Market-Makers. If this liquidity was not available to TPHs in an all-electronic environment, there would be significant risk that these orders may not receive full execution in a timely manner (or at all), and may trade at worse prices than would have otherwise been available on the trading floor. The Exchange believes this proposed rule change will minimize this risk and provide electronic execution and price improvement opportunities for these orders, similar to the opportunities that are generally available to them on the trading floor, which protects customers seeking execution of these orders. As set forth in the Rules, all TPHs may submit responses to AIM Auctions, all Agency Orders will continue to have an opportunity for price improvement, and priority customer orders will continue to have priority at each price level.
The Exchange believes the proposed rule change to permit complex orders with ratios greater than three-to-one and less than or equal to 25-to-one to execute electronically and receive complex order benefits otherwise provided to complex orders with ratios less than or equal to three-to-one will also remove impediments to and perfect the mechanism of a free and open market and a national market system, and, in general, protect investors and the public interest. As discussed above, the System is currently unable to apply a different allocation algorithm and increment to complex orders with different ratios, and would need a significant amount of time and resources to do so. Given that significant contract volume executes on the trading floor as part of complex trades with ratios greater than three-to-one as part of their investment and hedging strategies, the Exchange believes it will protect investors looking to execute those orders as part of their overall strategies to provide electronic execution opportunities during a time when the trading floor is not available. As noted above, the complex order priority that would apply to these complex orders with larger ratios would be the same as the priority applied today to complex orders with ratios no greater than three-to-one, which the Exchange believes will continue to protect customers. Since the Exchange is proposing to permit complex orders with ratios no greater than 25-to-1 to be electronically processed if the trading floor were inoperable, similar to the practice today, this will be systematically enforced for electronic trading. The Exchange appreciates the Commission's concerns described above; however, the Exchange believes the risks of harm to investors by not permitting these orders to execute at all when the trading floor is unavailable (which may be occurring due to extraordinary circumstances causing volatility in the markets) significantly outweighs the potential risks associated with these concerns.
The Exchange's Regulatory Division will continue its standard routine surveillance reviews for electronic trading as it does today and has put together a regulatory plan to surveil the additional changes being proposed when operating in a screen-based only environment.
The Exchange believes the proposed rule change to exclude volume executed during a time when the trading floor is inoperable from the determination of whether a Market-Maker is subject to continuous electronic quoting obligations will promote just and equitable principles of trade. If this volume were included in this determination, a Market-Maker not otherwise subject to these obligations may become subject to them for reasons outside of the Market-Maker's control. As a result, a Market-Maker may become subject to additional obligations that would not apply during normal circumstances. This proposed rule change will have no impact on Market-Makers currently subject to continuous electronic quoting obligations, as once a Market-Maker becomes subject to that obligation, it remains subject to that obligation, even if it executes less than 20% of its contract volume electronically in a subsequent calendar quarter. The proposed rule change is solely intended to impact those Market-Makers who currently are not subject to continuous electronic quoting obligations. Without this rule change, depending on the length of time the trading floor is inoperable, a Market-Maker that has not previously exceeded the 20% contract volume threshold and thus is not currently subject to continuous electronic quoting obligation could exceed that threshold for a calendar quarter, which would then subject it to a new obligation that was not in place when the trading floor was operable. The Exchange believes it would be unduly burdensome to impose obligations on a Market-Maker that are inconsistent with the Market-Maker's standard business practices as a result of extraordinary circumstances outside of the Market-Maker's control, particularly when the Exchange expects those circumstances to be temporary. The Exchange notes all Market-Makers must comply with the other obligations set forth in Rules 5.51 and 5.52, including the obligations related to size, two-sided quotes, and competitive quotes.
The Exchange does not believe that the proposed rule change will impose any burden on competition that is not necessary or appropriate in furtherance of the purposes of the Act. The proposed rule change is not intended as a competitive filing, but rather is proposed as part of its business continuity plans intended to allow it to maintain fair and orderly markets if unusual circumstances cause the Exchange's trading floor to become inoperable. The Exchange does not believe the proposed rule change related to AIM contra-parties will impose any burden on intramarket competition, as it will permit all market participants to be solicited to participate in AIM transactions in exclusively listed index options. The Exchange also does not believe the proposed rule changes related to complex orders will impose any burden on intra market competition, as all market participants will be able to submit complex orders in exclusively listed index options with ratios no greater than 25-to-1. Additionally, the Exchange does not believe these proposed rule change will impose any burden on intermarket competition, as they both apply only to exclusively listed index options, which are available
The proposed rule change to exclude contract volume executed during a time when the trading floor is inoperable from the determination of whether a Market-Maker is subject to continuous quoting obligations is not intended for competitive purposes. The Exchange believes this proposed rule change will not burden intramarket competition, as it will apply in the same manner to all Market-Makers. As noted above, the proposed rule change will have no impact on Market-Makers currently subject to continuous electronic quoting obligations, as those will continue to apply. The proposed rule change will prevent Market-Makers not currently subject to continuous electronic quoting obligations who could exceed the 20% threshold triggering those obligations solely because the trading floor was inoperable. The Exchange believes it would be unduly burdensome to subject a Market-Maker to additional obligations because of the unavailability of the Exchange facility where that Market-Maker conducts the vast majority of its business under normal trading circumstances. The Exchange believes this proposed rule change will not burden intermarket competition, as it applies solely to continuous electronic quoting obligations applicable to Market-Makers of the Exchange.
The Exchange neither solicited nor received comments on the proposed rule change.
The Exchange has filed the proposed rule change pursuant to Section 19(b)(3)(A)(iii) of the Act
A proposed rule change filed under Rule 19b-4(f)(6)
At any time within 60 days of the filing of the proposed rule change, the Commission summarily may temporarily suspend such rule change if it appears to the Commission that such action is necessary or appropriate in the public interest, for the protection of investors, or otherwise in furtherance of the purposes of the Act. If the Commission takes such action, the Commission shall institute proceedings to determine whether the proposed rule change should be approved or disapproved.
Interested persons are invited to submit written data, views, and arguments concerning the foregoing, including whether the proposed rule change is consistent with the Act. Comments may be submitted by any of the following methods:
• Use the Commission's internet comment form (
• Send an email to
• Send paper comments in triplicate to Secretary, Securities and Exchange Commission, 100 F Street NE, Washington, DC 20549-1090.
For the Commission, by the Division of Trading and Markets, pursuant to delegated authority.
The current outbreak of coronavirus disease 2019 (COVID-19) was first reported on December 31, 2019. The disease has led to disruptions to transportation, including buses, subways, trains and airplanes, and the imposition of quarantines around the world, which may limit investment advisers' access to facilities, personnel, and third party service providers. The Commission recognizes that, in these circumstances, investment advisers may face challenges in timely satisfying provisions of the Investment Advisers Act of 1940 (“Advisers Act”) and rules thereunder concerning the filing and delivery of certain reports and disclosures. In light of the current situation, we are issuing this Order providing a temporary exemption from certain requirements of the Advisers Act.
Section 206A of the Advisers Act provides that the Commission may conditionally or unconditionally exempt any person or transaction, or any class or classes of persons or transactions, from any provision or provisions of the Advisers Act, or any rule or regulation thereunder, if and to the extent that such exemption is necessary or appropriate in the public interest and consistent with the protection of investors and the purposes fairly intended by the policy and provisions of the Advisers Act.
The relief specified in this Order is limited to filing or delivery obligations, as applicable, for which the original due date is on or after the date of this Order but on or prior to April 30, 2020. The Commission intends to continue to monitor the current situation. The time period for any or all of the relief may, if necessary, be extended with any additional conditions that are deemed appropriate, and the Commission may issue other relief as necessary or appropriate.
The disruptions resulting from COVID-19 that are mentioned above could hamper the efforts of investment advisers to timely meet certain filing and delivery deadlines. At the same time, advisory clients and the Commission have an interest in the timely availability of required information about investment advisers, and we remind investment advisers who rely on this Order to continue to evaluate their obligations, including their fiduciary duty, under the federal securities laws. In light of the current and potential effects of COVID-19, the Commission finds that the exemptions set forth below:
Are necessary and appropriate in the public interest and consistent with the protection of investors and the purposes fairly intended by the policy and provisions of the Advisers Act; and
are necessary and appropriate to the exercise of the powers conferred on it by the Advisers Act.
The necessity for prompt action of the Commission does not permit prior notice of the Commission's action.
Accordingly, it is
For the time period specified in Section I, a registered investment adviser is exempt from the requirements: (a) Under Rule 204-1 of the Advisers Act to file an amendment to Form ADV; and (b) under Rule 204-3(b)(2) and (b)(4) related to the delivery of Form ADV Part 2 (or a summary of material changes) to existing clients, where the conditions below are satisfied;
For the time period specified in Section I, an exempt reporting adviser is exempt from the requirements under Rule 204-4 under the Advisers Act to file reports on Form ADV, where the conditions below are satisfied; and
For the time period specified in Section I, a registered investment adviser that is required by Section 204(b) of and Rule 204(b)-1 under the Advisers Act to file Form PF is exempt from those requirements, where the conditions below are satisfied.
(a) The registered investment adviser or exempt reporting adviser is unable to meet a filing deadline or delivery requirement due to circumstances related to current or potential effects of COVID-19;
(b) The investment adviser relying on this Order with respect to the filing of Form ADV or delivery of its brochure, summary of material changes, or brochure supplement required by Rule 204-3(b)(2) or (b)(4), promptly provides the Commission via email at
(1) That it is relying on this Order;
(2) a brief description of the reasons why it could not file or deliver its Form on a timely basis; and
(3) the estimated date by which it expects to file or deliver the Form.
(c) Any investment adviser relying on this order with respect to filing Form PF required by Rule 204(b)-1 must promptly notify the Commission via email at
(1) That it is relying on this Order;
(2) a brief description of the reasons why it could not file its Form on a timely basis; and;
(3) the estimated date by which it expects to file the Form.
(d) The investment adviser files the Form ADV or Form PF, as applicable, and delivers the brochure (or summary of material changes) and brochure supplement required by Rule 204-3(b)(2) and (b)(4) under the Advisers Act, as soon as practicable, but not later than 45 days after the original due date for filing or delivery, as applicable.
By the Commission.
On January 14, 2020, ICE Clear Credit LLC (“ICC”), filed with the Securities
Section 19(b)(2) of the Act
The Commission is extending the 45-day time period for Commission action on the proposed rule change, in which ICC would make the changes noted above. The Commission finds it is appropriate to designate a longer period within which to take action on the proposed rule change so that it has sufficient time to consider ICC's proposed rule change.
Accordingly, pursuant to Section 19(b)(2)
For the Commission, by the Division of Trading and Markets, pursuant to delegated authority.
On January 21, 2020, Fixed Income Clearing Corporation (“FICC”) filed with the Securities and Exchange Commission (“Commission”) the advance notice SR-FICC-2020-801 (“Advance Notice”) pursuant to Section 806(e)(1) of Title VIII of the Dodd-Frank Wall Street Reform and Consumer Protection Act entitled the Payment, Clearing, and Settlement Supervision Act of 2010 (“Clearing Supervision Act”)
MBSD provides trade comparison, netting, risk management, settlement, and central counterparty services for U.S. mortgage-backed securities market. FICC manages its credit exposures to its members by collecting an appropriate amount of margin from each member.
FICC uses stress testing to test the sufficiency of its prefunded financial resources.
FICC's stress testing methodologies have three key components.
Second, FICC develops a comprehensive set of scenarios designed
In developing historical scenarios for MBSD stress testing purposes, FICC currently examines historical data to identify the largest historical changes of two risk factors that influence the pricing of mortgage-backed securities (“MBS”). Specifically, FICC examines historical data to determine the sensitivity of MBS prices to changes in interest rates and mortgage option adjusted spreads (“OAS”).
Third, to measure and aggregate the applicable risks, FICC applies the historical and hypothetical scenarios described above to MBSD member portfolios (1) to analyze the potential losses on each portfolio in relation to margin amounts collected, and (2) to analyze the effects that potential losses on member portfolios during stress scenarios might have on FICC's prefunded financial resources. Specifically, FICC calculates the stress profits-and-losses under each stress scenario and determines the loss amount exceeding a member's margin for each scenario (“Member Deficiency”). FICC further combines the Member Deficiencies of the member and the member's affiliated family (that are also MBSD members) (“Affiliated Family Deficiency”). FICC calculates the ratio of an Affiliated Family Deficiency over the total value of the MBSD Clearing Fund excluding the sum value of the applicable affiliated family's margin.
Currently, in determining the potential losses to a member's portfolio under a stress scenario, FICC applies a profit-and-loss calculation that multiplies a set of risk factor stress movements by the sensitivity (
As proposed in the Advance Notice, FICC would continue to examine historical risk factor data on interest rates and OAS. However, FICC proposes to add two new risk factors—interest rate volatility
In addition, as proposed in the Advance Notice, FICC would change the look-back period for identifying historical stress scenarios by anchoring the starting date of the look-back period to May 29, 2002
As proposed in the Advance Notice, FICC would replace the regression-based profit-and-loss calculation with a financial profit-and-loss calculation using vendor-sourced data. The vendor-sourced data would expand the set of risk factors available to FICC for calculating the potential losses generated by the liquidation of a member's portfolio during stress scenarios. FICC believes that the vendor-sourced data would improve the accuracy of FICC's stress testing methodology by generating profit-and-loss calculations that are closer to the actual MBS price changes during the large market moves that are typical in stress testing scenarios.
Finally, FICC proposes to implement a back-up calculation that it would use in the event the vendor fails to provide FICC with the vendor-sourced data described above. Specifically, if the vendor fails to provide any data or a significant portion of the data in accordance with the timeframes to which FICC and the vendor agreed, FICC would use the most recently available data on the first day that such disruption occurs. If FICC and the vendor expect that the vendor would resume providing data within five business days, FICC would determine whether to calculate the daily stress testing calculation using the most recently available data or a back-up calculation, described below. If FICC and the vendor expect that the data disruption would extend beyond five days, FICC would utilize the back-up calculation.
The proposed back-up calculation would be as follows: FICC would (1) calculate each member's portfolio net exposures in four securitization programs,
Although the Clearing Supervision Act does not specify a standard of review for an advance notice, the stated purpose of the Clearing Supervision Act is instructive: to mitigate systemic risk in the financial system and promote financial stability by, among other things, promoting uniform risk management standards for SIFMUs and strengthening the liquidity of SIFMUs.
Section 805(a)(2) of the Clearing Supervision Act authorizes the Commission to prescribe regulations containing risk management standards for the payment, clearing, and settlement activities of designated clearing entities engaged in designated activities for which the Commission is the supervisory agency.
• To promote robust risk management;
• to promote safety and soundness;
• to reduce systemic risks; and
• to support the stability of the broader financial system.
Section 805(c) provides, in addition, that the Commission's risk management standards may address such areas as risk management and default policies and procedures, among others areas.
The Commission has adopted risk management standards under Section 805(a)(2) of the Clearing Supervision Act and Section 17A of the Exchange Act (the “Clearing Agency Rules”).
For the reasons discussed below, the Commission believes that the Advance Notice is consistent with the stated objectives and principles of Section 805(b) of the Clearing Supervision Act.
As described above in Section I.A., in developing historical scenarios for MBSD stress testing purposes, FICC currently (1) examines historical data to identify the largest historical changes of two risk factors that influence MBS pricing (
Taken together, these changes should allow FICC to identify and analyze risk exposures under a broader and more varied range of stressed market conditions covering a longer time period, which should, in turn, help FICC identify the amount of financial resources necessary to cover its credit exposure under stress scenarios in extreme but plausible market conditions. The Commission, therefore, believes that the proposed methodology would be consistent with the promotion
Further, the proposed methodology would provide FICC with more information to address potential deficiencies in its prefunded financial resources than the current methodology because more comprehensive data and the expanded look-back period would allow FICC to identify and analyze additional risk exposures under a broader range of stressed market conditions than under the current methodology. Addressing potential deficiencies should help FICC ensure that it is collecting adequate prefunded financial resources to cover its potential losses resulting from the default of a clearing member and its affiliated family under multiple extreme but plausible market conditions, thereby improving FICC's ability to meet its Cover 1 Requirement and to limit its exposures in the event of such a default. Accordingly, the Commission believes the proposed methodology would be consistent with reducing systemic risks and supporting the stability of the broader financial system.
As described above in Section I.A., FICC's stress testing methodology uses a regression model with a two-month look-back period to determine the potential losses to a member's portfolio under a stress scenario, estimating each members' MBS sensitivity to two interest rate risk factors and an OAS risk factor. As proposed in the Advance Notice, FICC would replace the regression-based calculation with a financial profit-and-loss calculation using more comprehensive vendor-sourced data. The vendor-sourced data would expand the set of risk factors available to FICC for calculating the potential losses generated by the liquidation of a member's portfolio during stress scenarios.
The proposed methodology's profit-and-loss calculation using more comprehensive vendor-sourced data should enable FICC to perform a more robust assessment of Member Deficiencies and Affiliated Member Deficiencies and to identify potential additional risk exposures that it may not have captured before. Accordingly, the Commission believes that the proposed methodology would be consistent with promoting robust risk management and safety and soundness. Moreover, because using the profit-and-loss calculation based on more comprehensive vendor-sourced data should better enable FICC to identify and address potential risks with respect to specific members and their affiliates, it should help FICC ensure that it is collecting adequate prefunded financial resources to cover its potential losses resulting from the default of clearing members and their affiliates under multiple extreme but plausible market conditions, thereby improving FICC's ability to meet its Cover 1 Requirement and to limit its exposures in the event of such a default. Accordingly, the Commission believes the proposed methodology would be consistent with reducing systemic risks and supporting the stability of the broader financial system.
As described above in Section I.B., FICC proposes to implement a back-up calculation that it would utilize in the event of an interruption in the vendor-sourced data feed. The back-up calculation should provide FICC with a reasonable alternative method for calculating stress profits-and-losses in the event of an interruption in the vendor-sourced data feed. Accordingly, the Commission believes the proposed back-up calculation would be consistent with promoting robust risk management because it would help ensure that FICC has the ability to execute its stress tests with a reasonable alternative in the event of a vendor data disruption.
Further, by providing FICC with a reasonable alternative method for conducting stress testing, the proposed back-up calculation would help FICC avoid gaps in assessing the sufficiency of its prefunded financial resources with respect to meeting FICC's Cover 1 Requirement during a vendor data disruption. Accordingly, the Commission believes the proposed back-up calculation would be consistent with promoting safety and soundness at FICC, which in turn is consistent with reducing systemic risks and supporting the stability of the broader financial system.
Rule 17Ad-22(e)(4)(iii) requires, in part, each covered clearing agency to establish, implement, maintain and enforce written policies and procedures reasonably designed to effectively identify, measure, monitor, and manage its credit exposures to participants and those arising from its payment, clearing, and settlement processes, by maintaining additional financial resources at the minimum to enable it to cover a wide range of foreseeable stress scenarios that include, but are not limited to, the default of the participant family that would potentially cause the largest aggregate credit exposure for the covered clearing agency in extreme but plausible market conditions.
As described above in Section I.B., FICC proposes to change its stress testing methodology to: (1) Enhance the scenario selection process by replacing its internally-generated historical data with more comprehensive vendor-sourced data and expanding the look-back period for identifying historical stress scenarios from a rolling 10-year period to one that starts on May 29, 2002 and continues forward without eliminating time periods; (2) replace the regression-based calculation with a financial profit-and-loss calculation using more comprehensive vendor-sourced data; and (3) implement a back-up calculation that it would utilize in the event of an interruption in the vendor-sourced data feed. Taken together, these changes should allow FICC to identify and analyze risk exposures under a broader range of stressed market conditions covering a longer time period, which should, in turn, help FICC identify the amount of financial resources necessary to cover its credit exposure under stress scenarios in extreme but plausible market conditions.
Accordingly, the Commission believes that FICC's proposed stress testing methodology is consistent with Rule 17Ad-22(e)(4)(iii) because it should better enable FICC to assess its ability to maintain sufficient financial resources to cover a wide range of foreseeable stress scenarios that include the default of the member (including relevant affiliates) that would potentially cause FICC's largest aggregate credit exposure in extreme but plausible conditions.
By the Commission.
On December 13, 2019, NYSE Arca, Inc. (“NYSE Arca” or “Exchange”) filed with the Securities and Exchange Commission (“Commission”), pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934 (“Act”)
The Exchange proposes to list and trade Shares of the Fund under Commentary .01 to NYSE Arca Rule 8.600-E, which governs the listing and trading of Managed Fund Shares
AdvisorShares Investments, LLC (“Adviser”) is the investment adviser for the Fund.
According to the Exchange, the investment objective of the Fund is to seek long-term capital appreciation. The Fund will seek to achieve its investment objective by investing, under normal market conditions,
In addition to its investment in securities of companies that derive a significant portion of their revenue from the marijuana and hemp business, and in derivatives providing exposure to such securities, the Fund may invest in securities of companies that, in the opinion of the Advisor, may have current or future revenues from cannabis-related business or that are registered with the United States Drug Enforcement Agency (DEA) specifically for the purpose of handling marijuana for lawful research and development of cannabis or cannabinoid-related products.
According to the Exchange, the Fund will not invest directly in or hold ownership in any companies that engage in cannabis-related business unless permitted by national and local laws of the relevant jurisdiction, including U.S. federal and state laws. The Fund has represented that this restriction does not apply to the Fund's investment in derivatives instruments. All of the Fund's investments, including derivatives instruments, would be made in accordance with all applicable laws, including U.S. federal and state laws. The Fund will concentrate at least 25% of its investments in the pharmaceuticals, biotechnology and life sciences industry group within the health care sector.
The Fund primarily may invest in U.S. and foreign exchange-listed equity securities and in derivative instruments, as further described in this section, intended to provide exposure to such securities.
The Fund may invest in the following types of U.S. and foreign exchange-listed equity securities: common stock; preferred stock; warrants; Real Estate Investment Trusts (REITs); and rights. The Fund may also invest in U.S. exchange-listed exchange-traded funds
The Fund may hold over-the-counter (“OTC”) total return swaps on U.S. and foreign exchange-listed equity securities.
The Fund may hold cash and cash equivalents.
In addition to the Fund's principal investments described above, the Fund may invest in U.S. exchange-listed equity options and equity index options and in Rule 144A securities.
The Fund's investments, including derivatives, will be consistent with the Fund's investment objective and will not be used to enhance leverage (although certain derivatives and other investments may result in leverage). That is, the Fund's investments will not be used to seek performance that is the multiple or inverse multiple (
The Fund will not invest in securities or other financial instruments that have not been described in this proposed rule change.
The Exchange represents that it is submitting this proposed rule change because the portfolio for the Fund will not meet all of the “generic” listing requirements of Commentary .01 to NYSE Arca Rule 8.600-E applicable to the listing of Managed Fund Shares. The Exchange represents that the Fund's portfolio would meet all such requirements except for those set forth in Commentary .01(e),
The Exchange proposes that the Fund's investments in OTC total return swaps on U.S. and foreign exchange-listed equity securities may exceed the 20% limit on investments in OTC derivatives set forth in in Commentary .01(e). Alternatively, the Exchange proposes that up to 60% of the Fund's assets (calculated as the aggregate gross notional value) may be invested in OTC total return swaps on U.S. and foreign exchange-listed equity securities.
The Commission is instituting proceedings pursuant to Section 19(b)(2)(B) of the Act
Pursuant to Section 19(b)(2)(B) of the Act,
The Commission asks that commenters address the sufficiency of the Exchange's statements in support of the proposal, which are set forth in the Notice,
The Commission requests that interested persons provide written submissions of their views, data, and arguments with respect to the issues identified above, as well as any other concerns they may have with the proposal. In particular, the Commission invites the written views of interested persons concerning whether the proposal is consistent with Section 6(b)(5) or any other provision of the Act, or the rules and regulations thereunder. Although there do not appear to be any issues relevant to approval or disapproval that would be facilitated by an oral presentation of views, data, and arguments, the Commission will consider, pursuant to Rule 19b-4, any request for an opportunity to make an oral presentation.
Interested persons are invited to submit written data, views, and arguments regarding whether the proposal should be approved or disapproved by April 9, 2020. Any person who wishes to file a rebuttal to
Comments may be submitted by any of the following methods:
• Use the Commission's internet comment form (
• Send an email to
• Send paper comments in triplicate to Secretary, Securities and Exchange Commission, 100 F Street NE, Washington, DC 20549-1090.
For the Commission, by the Division of Trading and Markets, pursuant to delegated authority.
On September 11, 2019, participants
The Plan currently prohibits the Processor from disseminating last-sale reports that are received by the Processor during a Regulatory Halt.
The Participants have proposed to amend the Plan to provide that, during a Regulatory Halt, the consolidated tape shall include any last-sale report that is received by the Processor during the Regulatory Halt. Thus, the Processor would act as a pass-through for information received from the Participants, and the Processor would not have to attempt to ascertain whether a trade reported to it by a Participant happened before or after the Participant had received notification of a Regulatory Halt. This proposal by the CTA Plan Participants is designed to harmonize with Nasdaq/UTP Plan provisions for how trades are handled by Plan Processors during race conditions and apply a uniform procedure for all trading in NMS stocks throughout the national market system.
The Participants also proposed to update certain cross-references to exchanges rules relating to re-opening procedures.
After careful review, the Commission finds that the Amendment is consistent with the requirements of the Act and the rules and regulations thereunder.
The Commission believes that the Amendment furthers these goals by eliminating any burden on the Processor to determine whether a trade that is reported to the Processor during a race condition occurred before or after the Participant who reported the trade had received notice of a Regulatory Halt. Under the Amendment, the Processor could presume that any such trades occurred before the Regulatory Halt, thereby allowing the Processor to continue publishing those trade reports to the consolidated tape. The Commission believes that market observers could derive benefits from continuing to learn about trades occurring just before a Regulatory Halt that, under the existing Plan provisions, the Plan Processor might not print to the consolidated tape.
The Commission notes that it is also approving today a similar proposal by the Nasdaq/UTP Plan Participants to eliminate an ambiguity in that Plan regarding how the Processor handles last-sale price reports during a Regulatory Halt.
Finally, the Commission finds that updating cross-references in the Plan is consistent with the Act.
For the Commission, by the Division of Trading and Markets, pursuant to delegated authority.
Pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934 (“Act”)
The proposed rule change of DTC is attached hereto as Exhibit 5. The proposed rule change would amend the Guide to the DTC Fee Schedule (“Fee Guide”)
Pursuant to an approved DTC rule change (“Status Information Rule Change”),
In its filing with the Commission, the clearing agency included statements concerning the purpose of and basis for the proposed rule change and discussed any comments it received on the proposed rule change. The text of these statements may be examined at the places specified in Item IV below. The clearing agency has prepared summaries, set forth in sections A, B, and C below, of the most significant aspects of such statements.
The proposed rule change would amend the Fee Guide to add a fee and other charge relating to provision of Status Information for Institutional Transactions to a Matching Utility, as described below.
Pursuant to the Status Information Rule Change, DTC will implement changes to the Settlement Guide to allow DTC to provide Status Information for an Institutional Transaction to a Matching Utility. Upon implementation of the Status Information Rule Change, the related amendment to the Settlement Guide will allow the Matching Utility to further provide the Status Information to the counterparties to an Institutional Transaction to facilitate coordination of the resolution of an Exception between the counterparties. Pursuant to the Status Information Rule Change, the Status Information Rule Change will become effective upon the filing of the amendment to the Fee Guide proposed herein, and therefore would become effective upon the filing of the proposed rule change.
DTC may accept Institutional Transactions from a Matching Utility that is (i) a clearing agency registered pursuant to Section 17A of the Act,
The submission of an Affirmed Transaction by the Matching Utility to DTC, on behalf of a Participant, constitutes the duly authorized instruction of the Participant to DTC to process the Affirmed Transaction in accordance with the Rules and Procedures.
A transaction submitted to DTC for processing may be subject to a processing Exception, causing it to recycle in the DTC system or not be processed because the transaction does not satisfy certain requirements and/or controls set forth in the Rules and Settlement Guide.
In addition, pursuant to the Status Information Rule Change, DTC would develop the mechanism (“Non-Submitting Matching Utility Interface”) necessary for DTC to directly provide Status Information to a Matching Utility for each transaction submitted to DTC to which a customer of the Matching Utility is a party to the transaction and matched the transaction via the Matching Utility, regardless of whether or not that Matching Utility submitted the transaction to DTC, subject to (i) the agreement by the Matching Utility to pay DTC for the reasonable cost (“Status Information Development Charge”) to cover the development of the mechanism by DTC and (ii) the Matching Utility subscribing to receive Status Information, as described above. To the extent that the transaction is an interoperable transaction submitted to DTC by another Matching Utility, then to receive Status Information for the interoperable transaction, the Matching Utility would be required to submit an indicator to DTC for notifying DTC that a customer of the Matching Utility is a party to the transaction.
Any Matching Utility that satisfies requirements set forth in the Status Information Rule Change may become a subscriber to receive Status Information. DTC is aware of three Matching Utilities, specifically Bloomberg STP LLC (“Bloomberg”), ITP and SS&C Technologies, Inc (“SS&C”), that would be eligible to subscribe to receive Status Information.
Pursuant to the proposed rule change, DTC would amend the Fee Guide to implement the following fee and other charge, as follows:
a. To cover the cost of providing a Matching Utility with Status Information, DTC would amend the Fee
b. DTC would amend the Fee Guide to add the Status Information Development Charge. The Status Information Development Charge would be listed in the Fee Guide as a one-time charge, charged “At cost”,
DTC believes that the cost to DTC to establish access to the Non-Submitting Matching Utility Interface for a second or subsequent Matching Utility that subscribes once the interface has been established may be substantially less than the initial development cost. Therefore, the Status Information Development Charge charged to a second or subsequent Matching Utility that requests access to the interface may be lower than the Status Information Development Charge charged to the initial Matching Utility that requests the initial development of the Non-Submitting Matching Utility Interface. This presumes that DTC would be able to leverage prior work done by it to establish the interface and depends in part on specifications requested by a Matching Utility and the variability in development expenses over time. In this regard, the Status Information Development Charge charged to a Matching Utility would reflect the actual cost to DTC to provide that Matching Utility with access to the Non-Submitting Matching Utility Interface, including, but not limited to, as applicable, taking into account available cost reductions resulting from DTC's prior development of the Non-Submitting Matching Utility Interface with respect to the initial requester and additional development and testing costs incurred by DTC in order to meet specifications requested by the Matching Utility.
The proposed rule change would become effective upon filing with the Commission.
Section 17A(b)(3)(F)
By allowing DTC to cover the costs associated with providing Status Information to Matching Utilities, the proposed rule change would facilitate the distribution of information on Exceptions to these parties. This distribution of Status Information would allow for enhanced communication among the parties to an Eligible Transaction to address an Exception so that the Eligible Transaction may be processed. Therefore, by allowing DTC to cover its costs associated with its facilitating the distribution of Status Information to a Matching Utility, and thereby facilitating the ability of a Matching Utility to provide this information to the applicable parties to an Eligible Transaction that may address related Exceptions and resolve related issues so that a transaction may be processed for settlement, DTC believes that the proposed rule change would promote the prompt and accurate clearance and settlement of securities transactions consistent with Section 17A(b)(3)(F) of the Act.
Section 17A(b)(3)(D)
As described in Item II.(A) above, the proposed Status Information Fee is structured to use a flat annual fee rather than a volume-based fee, because DTC's ongoing estimated support costs relating to providing Status Information to a Matching Utility are fixed and are not expected to fluctuate based on message volume. As described in Item II.(A) 1. above, the cost assumptions used by DTC to calculate the Status Information Fee include direct technology costs to support the provision of Status Information to a Matching Utility, plus allocated costs based on anticipated indirect support. The direct costs are based on required technology support
DTC believes that the proposed changes to the Fee Schedule could impose a burden on competition because it would implement a new fee and a new charge payable by a Matching Utility that subscribes for a voluntary service to receive Status Information from DTC, thereby potentially creating costs to a Matching Utility not previously charged for a voluntary service not previously provided.
DTC believes the primary benefit a Matching Utility would realize from its receipt of Status Information from DTC would be the added value the Matching Utility could provide in its services to its customers through the reduction of costs to those customers, as described below. In this regard, if the Status Information received by a Matching Utility from DTC was provided by the Matching Utility to its customers, it would facilitate the ability of customers of the Matching Utility to efficiently monitor and resolve Exceptions by accessing Status Information from a centralized point of access as opposed to through multiple entities. In this regard, DTC does not believe that any burden on competition imposed by the proposed changes to the Fee Schedule would be significant in relation to the benefit a Matching Utility could realize by receiving Status Information from DTC. By allowing DTC to meet its costs in providing Status Information to a Matching Utility in a centralized format, as described above, the proposed rule change would allow DTC to provide Status Information to a Matching Utility, which would facilitate the Matching Utility's ability to provide its customers with enhanced value in its services, by facilitating reductions in costs incurred by the Matching Utility's customers regarding the monitoring of Exceptions by providing a centralized point of access to Status Information rather than receiving information through multiple entities.
DTC believes that any burden on competition that is created by the proposed changes to the Fee Schedule would be necessary and appropriate in furtherance of the purposes of the Act,
Any burden on competition that is created by the proposed rule changes would be necessary in order to facilitate DTC's ability to provide Status Information to Matching Utilities, as described above, which would facilitate the prompt and accurate clearance and settlement of related transactions, as described in Item II.(A) 2. above.
DTC believes that any burden on competition imposed by the proposed changes to the Fee Schedule would be appropriate because (i) the Status Information Fee and Status Information Development Charge relate to the use by a Matching Utility of a voluntary service of DTC and (ii)(a) the Status Information Fee would only be billed to a Matching Utility that subscribes to receive Status Information and (b) the Status Information Development Charge would only be charged to a Matching Utility that requests that DTC develop a Non-Submitting Matching Utility Interface for the Matching Utility and agrees in writing to pay the charge and subscribes to receive Status Information, as described above.
DTC does not believe the proposed rule change would unduly disadvantage one Matching Utility versus another, because if a Matching Utility does not believe Status Information would provide it, or its customers, with enough benefit under its own business model, it could choose not to subscribe and not incur the costs of fees proposed above.
Written comments relating to this proposed rule change have not been solicited or received. DTC will notify the Commission of any written comments received by DTC.
The foregoing rule change has become effective pursuant to Section 19(b)(3)(A) of the Act
Interested persons are invited to submit written data, views and arguments concerning the foregoing, including whether the proposed rule change is consistent with the Act. Comments may be submitted by any of the following methods:
• Use the Commission's internet comment form (
• Send an email to
• Send paper comments in triplicate to Secretary, Securities and Exchange Commission, 100 F Street NE, Washington, DC 20549.
For the Commission, by the Division of Trading and Markets, pursuant to delegated authority.
The current outbreak of coronavirus disease 2019 (COVID-19) was first reported on December 31, 2019. The disease has led to disruptions to transportation, including buses, subways, trains and airplanes, and the imposition of quarantines around the world. The Commission has heard from industry representatives that COVID-19 may present challenges for boards of directors of registered management investment companies and business development companies (“BDCs”) to travel in order to meet the in-person voting requirements under the Investment Company Act of 1940 (the “Investment Company Act” or “the Act”) and rules thereunder. In addition, we recognize that registered management investment companies and unit investment trusts (together, “registered funds”) may face challenges if, as a result of COVID-19, personnel of registered fund managers or other third-party service providers that are necessary to prepare these reports become unavailable, or only available on a limited basis, in: (i) Preparing or transmitting annual and semi-annual shareholder reports; and/or (ii) timely filing Forms N-CEN and N-PORT. We also understand that due to recent market movements certain registered closed-end funds (“closed-end funds”) and BDCs may seek to call or redeem securities and may face challenges in providing the advance notice required under Rule 23c-2. Finally, we appreciate that there may be difficulties in the timely delivery of registered fund prospectuses. In light of the current situation, we are issuing this Order providing an exemption from certain requirements of the Investment Company Act and a statement regarding prospectus delivery obligations of registered funds.
Section 6(c) of the Investment Company Act provides that the Commission may conditionally or unconditionally exempt any person, security or transaction, or any class or classes of persons, securities or transactions, from any provision or provisions of the Investment Company Act, or any rule or regulation thereunder, if and to the extent that such exemption is necessary or appropriate in the public interest and consistent with the protection of investors and the purposes fairly intended by the policy and provisions of the Investment Company Act. Section 38(a) of the Investment Company Act provides that the Commission may make, issue, amend and rescind such rules and regulations and such orders as are necessary or appropriate to the exercise of the powers conferred upon the Commission under the Investment Company Act.
The time period for the relief specified in this Order is as follows:
• For the relief in Sections II and V of this Order, the relief is limited to the period from and including the date of this Order to June 15, 2020.
• For the relief in Sections III and IV of this Order, the relief is limited to filing or transmittal obligations, as applicable, for which the original due date is on or after the date of this Order but on or prior to April 30, 2020.
The Commission intends to continue to monitor the current situation. The time period for any or all of the relief may, if necessary, be extended with any additional conditions that are deemed appropriate, and the Commission may issue other relief as necessary or appropriate.
In light of the current and potential effects of COVID-19, the Commission finds that the exemptions set forth below:
are necessary and appropriate in the public interest and consistent with the protection of investors and the purposes fairly intended by the policy and provisions of the Investment Company Act; and are necessary and appropriate to the exercise of the powers conferred on it by the Investment Company Act.
The necessity for prompt action of the Commission does not permit prior notice of the Commission's action.
Accordingly, it is
That for the period specified in Section I, a registered management investment company or BDC and any investment adviser of or principal underwriter for such registered management investment company or BDC is exempt from the requirements imposed under sections 15(c) and 32(a) of the Investment Company Act and Rules 12b-1(b)(2) and 15a-4(b)(2)(ii) under the Investment Company Act that votes of the board of directors of either the registered management investment company or BDC be cast in person, provided that:
(i) Reliance on this Order is necessary or appropriate due to circumstances related to current or potential effects of COVID-19;
(ii) the votes required to be cast at an in-person meeting are instead cast at a meeting in which directors may participate by any means of communication that allows all directors participating to hear each other simultaneously during the meeting; and
(iii) the board of directors, including a majority of the directors who are not interested persons of the registered management investment company or BDC, ratifies the action taken pursuant to this exemption by vote cast at the next in-person meeting.
Disruptions to transportation, and limited access to facilities, personnel, and third party service providers as a result of COVID-19 could hamper the efforts of registered funds with filing obligations to meet their filing deadlines. At the same time, investors and the Commission have an interest in the timely availability of required information about their investments, and we remind registered funds who are
In light of the current and potential effects of COVID-19, the Commission finds that the exemptions set forth below:
Are necessary and appropriate in the public interest and consistent with the protection of investors and the purposes fairly intended by the policy and provisions of the Investment Company Act; and are necessary and appropriate to the exercise of the powers conferred on it by the Investment Company Act.
The necessity for prompt action of the Commission does not permit prior notice of the Commission's action.
Accordingly, it is
That for the period specified in Section I, a registered fund that is required to file Form N-CEN pursuant to Rule 30a-1 under the Investment Company Act, or Form N-PORT pursuant to Rule 30b1-9 under the Investment Company Act, is temporarily exempt from such form filing requirements where the conditions below are satisfied.
(a) The registered fund is unable to meet a filing deadline due to circumstances related to current or potential effects of COVID-19;
(b) Any registered fund relying on this Order promptly notifies the Commission staff via email at
(1) That it is relying on this Order;
(2) a brief description of the reasons why it could not file its report on a timely basis; and
(3) the estimated date by which it expects to file the report.
(c) Any registered fund relying on this Order includes a statement on the applicable registered fund's public website briefly stating that it is relying on this Order and the reasons why it could not file its reports on a timely basis;
(d) The registered fund required to file such Form N-CEN or Form N-PORT files such report as soon as practicable, but not later than 45 days after the original due date; and
(e) Any Form N-CEN or Form N-PORT filed pursuant to this Order must include a statement of the filer that it relied on this Order and the reasons why it was unable to file such report on a timely basis.
For the reasons cited in Section III above, we believe that relief is warranted for the preparation or transmittal by registered funds of annual and semi-annual reports to investors. In light of the current and potential effects of COVID-19, the Commission finds that the exemptions set forth below:
The necessity for prompt action of the Commission does not permit prior notice of the Commission's action.
Accordingly, it is
For the period specified in Section I, a registered unit investment trust is temporarily exempt from the requirements of Section 30(e) of the Investment Company Act and Rule 30e-2 thereunder to transmit annual and semi-annual reports to unitholders where the conditions below are satisfied.
(a) The registered fund is unable to prepare or transmit the report due to circumstances related to current or potential effects of COVID-19;
(b) Any registered fund relying on this Order promptly notifies the staff via email at
(1) that it is relying on this Order;
(2) a brief description of the reasons why it could not transmit its report on a timely basis; and
(3) the estimated date by which it expects to transmit the report;
(c) Any registered fund relying on this Order includes a statement on the applicable registered fund's public website briefly stating that it is relying on this Order and the reasons why it could not prepare and transmit its reports on a timely basis; and
(d) The registered fund transmits the reports to shareholders as soon as practicable, but not later than 45 days after the original due date and files the report within 10 days of its transmission to shareholders.
For the reasons cited in Section III above, we believe that relief is warranted for closed-end funds and BDCs with respect to the 30-day notice requirement in Rule 23c-2(b) under the Investment Company Act. In light of the current and potential effects of COVID-19, the Commission finds that the exemptions set forth below:
The necessity for prompt action of the Commission does not permit prior notice of the Commission's action.
Accordingly, it is
That for the period specified in Section I, closed-end funds and BDCs are temporarily exempt from the requirement to file with the Commission notices of their intention to call or redeem securities at least 30 days in advance under Sections 23(c) and 63, as applicable, of the Investment Company Act and Rule 23c-2 thereunder if such company files a Form N-23C-2 (“Notice”) with the Commission fewer than 30 days prior to, including the same business day as, the company's call or redemption of securities of which it is the issuer where the conditions below are satisfied:
(a) The closed-end fund or BDC (“Company”) relying on this Order:
(1) Promptly notifies Commission staff via email at
a. That it is relying on this Order; and
b. a brief description of the reasons why it needs to file a Notice fewer than 30 days in advance of the date set by the Company for calling or redeeming the securities of which it is the issuer;
(2) ensures that the filing of the Notice on an abbreviated time frame is permitted under relevant state law and the Company's governing documents;
(3) files a Notice that contains all the information required by Rule 23c-2 prior to:
a. Any call or redemption of existing securities;
b. the commencement of any offering of replacement securities; and
c. providing notification to the existing shareholders whose securities are being called or redeemed.
For the reasons cited in Section III above, the Commission takes the position that it would not provide a basis for a Commission enforcement action if a registered fund does not deliver to investors the current prospectus of the registered fund where the prospectus is not able to be timely delivered because of circumstances related to COVID-19 and delivery was due during the limited period specified below, provided that the sale of shares to the investor was not an initial purchase by the investor of shares of the registered fund and:
(1) The registered fund:
(a) Notifies Division of Investment Management staff via email at
(b) Publishes on its public website that it intends to rely on the Commission position and briefly states the reasons why it could not deliver the prospectus on a timely basis;
(c) Publishes its current prospectus on its public website; and
(2) Delivery was originally required on or after the date of this Order but on or prior to April 30, 2020, and the prospectus is delivered to investors as soon as practicable, but not later than 45 days after the date originally required.
By the Commission.
On September 11, 2019, participants
The Plan currently includes inconsistent language with respect to the Processor's ability to disseminate last-sale price reports during a Regulatory Halt. Section X.A of the Plan prohibits the Processor from including in the consolidated tape during a Regulatory Halt any last-sale reports. Section X.C, however, includes language that specifically permits the Processor to “collect and disseminate Transaction Information” during a Regulatory Halt.
The Participants have stated that, in practice, the Processor has been following Section X.C during Regulatory Halts and will immediately disseminate last-sale price reports during a Regulatory Halt. The Participants believe that the Processor's current practice helps to reduce inefficiencies and confusion among market participants with respect to the operation of the Plan during “race conditions,” when it might be unclear whether the trade reported by the Participant occurred before or after the Participant had received notice of the Regulatory Halt. As a result, the Participants have determined it appropriate to amend the language of the Plan to resolve the inconsistent language described above in order to confirm that the Processor may continue to disseminate last-sale price reports during a Regulatory Halt. In addition, the Amendment would align the Plan language with a corresponding amendment being proposed by the CTA Plan.
After careful review, the Commission finds that the Amendment is consistent with the requirements of the Act and the rules and regulations thereunder.
The Commission believes that the Amendment furthers these goals by eliminating any potential uncertainty in determining whether a trade reported to the Processor during race conditions occurred before or after the Participant who reported the trade had received notice of a Regulatory Halt. Under the Amendment, the Processor could presume that any such trades occurred before the Regulatory Halt, thereby allowing the Processor to continue publishing those trade reports to the consolidated tape. The Commission believes that market observers could derive benefits from continuing to learn about trades occurring just before a Regulatory Halt.
The Commission notes that it is also approving today a similar proposal by the CTA Plan Participants to eliminate an ambiguity in that Plan regarding how the Processor handles last-sale price reports during a Regulatory Halt.
For the Commission, by the Division of Trading and Markets, pursuant to delegated authority.
Securities and Exchange Commission (“Commission”).
Notice of an application for an order under section 6(c) of the Investment Company Act of 1940 (the “Act”) for an exemption from sections 18(d) and 23(a) and (b) of the Act, pursuant to section 23(c)(3) of the Act granting an exemption from section 23(c) of the Act, and pursuant to rule 17d-1 under the Act to permit certain joint transactions otherwise prohibited under section 17(d) of the Act.
Daxor Corporation (“Daxor”).
Applicant requests an order to permit, subject to shareholder approval, the Applicant to adopt an incentive compensation plan.
The application was filed on June 24, 2019, and amended on October 17, 2019, and January 21, 2020.
An order granting the requested relief will be issued unless the Commission orders a hearing. Interested persons may request a hearing by writing to the Commission's Secretary and serving Applicant with a copy of the request, personally or by mail. Hearing requests should be received by the Commission by 5:30 p.m. on April 7, 2020 and should be accompanied by proof of service on Applicant, in the form of an affidavit or, for lawyers, a certificate of service. Pursuant to rule 0-5 under the Act, hearing requests should state the nature of the writer's interest, any facts bearing upon the desirability of a hearing on the matter, the reason for the request, and the issues contested. Persons who wish to be notified of a hearing may request notification by writing to the Commission's Secretary.
Secretary, U.S. Securities and Exchange Commission, 100 F Street NE, Washington, DC 20549-1090. Applicant: Robert J. Michel, Chief Financial Officer, Daxor Corporation, 350 Fifth Avenue, Suite 4740, New York, NY 10118.
Kyle R. Ahlgren, Senior Counsel, at (202) 551-6857, or David P. Nicolardi, Branch Chief, at (202) 551-6467 (Division of Investment Management, Chief Counsel's Office).
The following is a summary of the application. The complete application may be obtained via the Commission's website by searching for the file number or an Applicant using the “Company” name box, at
1. Applicant, a New York corporation, is an investment company with medical instrumentation and biotechnology operations. Applicant is registered under the Act as an internally-managed, closed-end management investment company.
2. Applicant has six directors, four of whom are not “interested persons” of the company as defined in section 2(a)(19) of the Act (“Non-Interested Directors”), and fifteen employees.
3. Applicant has in the past issued stock options (“Options”) under the Daxor Corporation 2004 Stock Option Plan (“2004 Daxor Plan),
4. Applicant states that, because the medical instrumentation and biotechnology business is highly competitive, it believes that its successful operation will depend on its ability to attract, motivate and retain its employees with competitive compensation packages similar to those offered by its competitors. Applicant asserts that the companies with whom the Applicant competes for management talent are not registered investment
5. The 2020 Daxor Plan is administered by a committee of the Board composed solely of independent directors (the “Committee”). The Committee is composed solely of three or more directors who (i) are Non-Interested Directors of the Applicant, and (ii) are non-employee directors within the meaning of rule 16b-3 under the Securities Exchange Act of 1934, as amended (the “Exchange Act”) (“Non-Employee Directors”). The 2020 Daxor Plan, if approved by shareholders, would permit Applicant to issue options,
6. Applicant represents that the 2020 Daxor Plan has been approved by the Board of Directors, including a majority of the Non-Interested Directors of the Applicant. Subject to receipt of the Order, the Board is expected to approve the submission of the 2020 Daxor Plan, in its final form, to stockholders for approval at a shareholder meeting. The 2020 Daxor Plan, in its final form, will become effective upon approval by stockholders. Applicant represents that it will submit the 2020 Daxor Plan to stockholders for approval once every five years.
7. Immediately following each annual meeting of stockholders, each Non-Employee Director who is elected a director at, or who was previously elected and continues as a director after, that annual meeting may receive, at the discretion of the Committee, an award of up to 500 shares of vested Bonus Stock without restrictions. In addition, the 2020 Daxor Plan permits, to the extent provided for in the applicable Award agreement, recipients of Awards to receive dividend equivalents in respect of such Awards or any portion thereof as specified in the applicable Award agreement equal to the amount or value of any cash or other dividends or distributions payable on an equivalent number of shares of common stock. Any such dividend equivalents will be paid in shares of common stock, cash or a combination thereof as and when provided for in the applicable Award agreement.
8. The total number of shares of common stock reserved and available for delivery in connection with Awards under the 2020 Daxor Plan (other than any shares of common stock issued in payment of dividend equivalents) may not exceed 250,000 or 5% of Applicant's outstanding shares, whichever is the larger number. As of January 1, 2020, 250,000 shares represents 6.7% of Applicant's current outstanding shares.
9. Applicant states that, in the event that any extraordinary dividend, capital gains distribution or other distribution (whether in the form of cash, common stock or other property), recapitalization, forward or reverse stock split, reorganization, merger, consolidation, spin-off, combination, repurchase, share exchange, liquidation, dissolution or other similar corporate transaction or event affects the common stock such that an adjustment is determined by the Committee to be appropriate under the 2020 Daxor Plan, then the Committee shall, in such manner as it may deem equitable, adjust any or all of (i) the aggregate number of shares of common stock subject to the 2020 Daxor Plan; (ii) the number and kind of shares of common stock which may be delivered in connection with Awards granted thereafter; (iii) the number and kind of shares of common stock subject to or deliverable in respect of outstanding Awards; (iv) the exercise price or grant price relating to any Award and/or make provision for payment of cash or other property in respect of any outstanding Award; and (v) the performance conditions with respect to any outstanding Award.
1. Section 18(d) of the Act prohibits any registered management investment company from issuing warrants or rights to subscribe to or purchase its securities, except those issued exclusively and ratably to a class of the company's security holders with an exercise period of up to 120 days or in exchange for warrants in connection with a reorganization. Applicant states that section 18(d) would prohibit the issuance of certain Awards to Eligible Persons because no corresponding warrants or rights would be issued to
2. Section 23(a) of the Act generally prohibits a registered closed-end investment company from issuing its securities for services. Applicant states that because Awards are a form of compensation, the issuance of stock-based Awards to Eligible Persons would constitute the issuance of securities for “services” and, therefore, absent an exemption, would fall within the prohibitions of section 23(a).
3. Section 23(b) of the Act prohibits a registered closed-end investment company from selling its common stock at a price below its current NAV. Applicant states that Options will be issued with an exercise price that is not less than the Fair Market Value, and other Awards based on common stock of the Applicant are generally valued at Fair Market Value. Applicant further states that on the date of grant and date of exercise, an Option's or Stock Appreciation Right's exercise price may be less than the net asset value of a share of the Applicant's stock on such dates.
4. Section 6(c) of the Act provides, in part, that the Commission may, by order upon application, conditionally or unconditionally exempt any person, security or transaction, or any class or classes thereof, from any provision of the Act, if and to the extent that the exemption is necessary or appropriate in the public interest and consistent with the protection of investors and the purposes fairly intended by the policy and provisions of the Act. Applicant requests an exemption under section 6(c) from section 18(d) and sections 23(a) and (b) of the Act to the extent necessary to implement the Plan.
5. Applicant states that the concerns underlying those sections include (i) the possibility that Options could be granted to persons whose interests might be contrary to the interests of stockholders; (ii) the potential dilutive impact of Options on stockholders; (iii) the possibility that Options might facilitate a change of control; (iv) the introduction of complexity and uncertainty into the investment company's financial structure, thereby making it more difficult to appraise the value of their stock; (v) possible obfuscation of the extent of management compensation; and (vi) encouragement of speculative portfolio investments at the insistence of the option holders (to increase the possibility of a rise in market price from which they might benefit). Applicant asserts that these concerns would not apply to the Awards for the reasons discussed below and in the application.
6. Applicant states that, because Awards under the Plan may be issued only to Eligible Persons, Awards will not be granted to individuals with interests contrary to those of the applicant's stockholders. Moreover, no Eligible Person may, in general, be granted Awards that in the aggregate exceed 35% of the shares of common stock reserved for issuance under the Plan. In addition, in no event may the total number of shares of stock, with respect to which all types of Awards may be granted to an Eligible Person under the Plan exceed 75,000 shares of stock within any thirty-six month period during which the Plan is in effect.
7. Applicant represents that the 2020 Daxor Plan will be submitted to stockholders for their approval in compliance with Item 10 of Schedule 14A under the Exchange Act, with the standards and guidelines adopted by the Financial Accounting Standards Board, and the requirements of Item 402 of Regulation S-K, Item 8 of Schedule 14A under the Exchange Act, and Item 18 of Form N-2. In addition, Applicant will comply with the disclosure requirements for executive compensation plans applicable to operating companies under the Exchange Act. Applicant asserts that the Plan will be adequately disclosed to investors and appropriately reflected in the market value of their stock.
8. Applicant acknowledges that Awards granted under the Plan would have a dilutive effect on the stockholders' equity in Applicant, but argue that the effect would not be significant and would be outweighed by the anticipated benefits of the Plan to Applicant and its stockholders.
9. Applicant states that stockholders will be further protected by the conditions to the requested order that assure continuing oversight of the operation of the 2020 Daxor Plan by the Board. Applicant asserts that the requested exemptions are consistent with the protection of investors because of the proposed limitations on the grant of Awards and the required Board and shareholder approvals. Finally, Applicant argues that the 2020 Daxor Plan is consistent with the policies and purposes of the Act because the Commission and Congress have previously permitted certain companies regulated under the Act to issue stock options and to adopt incentive compensation plans similar to the 2020 Daxor Plan.
10. Section 17(d) of the Act and rule 17d-1 under the Act generally prohibit an affiliated person of a registered investment company, or an affiliated person of such a person, from participating in a joint enterprise, joint arrangement or profit-sharing plan in which the company is a participant, unless the Commission by order approves the transaction. Rule 17d-l(c) defines a joint enterprise to include any stock option or stock purchase plan. Rule 17d-1(b) provides that, in considering relief pursuant to the rule, the Commission will consider (i) whether the participation of the registered investment company in a joint enterprise is consistent with the Act's policies and purposes and (ii) the extent to which that participation is on a basis different from or less advantageous than that of other participants. Section 2(a)(3) of the Act defines an “affiliated person” of another person to include any officer, director, partner, copartner or employee of such other person. Because all Eligible Persons are either directors or employees of Applicant, Eligible Persons fall within the scope of section 17(d) and rule 17d-1 and, consequently, are prohibited from participating in the Plan, absent the requested relief.
11. Applicant requests an order pursuant to section 17(d) and rule 17d-1 to permit the operation of the Plan. Applicant states that the Plan, although benefiting Eligible Persons and Applicant in different ways, are in the interests of stockholders of the Applicant because the Plan would help them attract, motivate and retain talented professionals and help align the interests of employees with those of their stockholders. Thus, Applicant
12. Section 23(c) of the Act generally prohibits a registered closed-end investment company from purchasing any securities of which it is the issuer except in the open market, pursuant to tender offers or under other circumstances as the Commission may permit to insure that the purchase is made on a basis that does not unfairly discriminate against any holders of the class or classes of securities to be purchased.
13. Applicant states that the payment of a stock option exercise price with previously acquired stock of the Applicant or with shares withheld by the Applicant may be deemed a purchase by the Applicant of its own securities within the prohibition of section 23(c).
Applicant agrees that any order of the Commission granting the requested relief will be subject to the following conditions:
1. The Board will maintain a Committee, none of the members of which will be “interested persons” of the Applicant as defined in the Act. The Committee will administer the 2020 Daxor Plan and will be composed of three or more directors of the Applicant who (i) are Non-Interested Directors of the Applicant, and (ii) are Non-Employee Directors within the meaning of rule 16b-3 under the Exchange Act.
2. The Plan will not be operated unless it is approved by a majority of the votes cast by stockholders at a meeting called to consider the Plan. Any amendment to the 2020 Daxor Plan will be subject to the approval of Applicant's stockholders to the extent such approval is required by applicable law or regulation or the Board otherwise determines. Unless terminated or amended, during the fifth year of the 2020 Daxor Plan (and each fifth year thereafter), the Plan shall be submitted for reapproval to the Applicant's stockholders and all Awards made during that year shall be contingent upon stockholder approval.
3. Awards are not transferable or assignable, except as the Committee will specifically approve to facilitate estate planning or to a beneficiary upon an Eligible Person's death or by will or the laws of descent and distribution. Awards may also be transferred pursuant to a qualified domestic relations order.
4. The maximum number of shares of stock available for delivery in connection with all Awards granted under the 2020 Daxor Plan may not exceed 250,000 of such shares, or 5% of the Applicant's outstanding shares, whichever is the larger number, subject to adjustment for corporate transactions.
5. The Board will review the 2020 Daxor Plan at least annually. In addition, the Committee periodically will review the potential impact that the grant, exercise, or vesting of Awards could have on the Applicant's earnings and net asset value per share, such review to take place prior to any decisions to grant Awards, but in no event less frequently than annually. Adequate procedures and records will be maintained to permit such review, and the Committee will be authorized to take appropriate steps to ensure that neither the grant nor the exercise or vesting of Awards would have an effect contrary to the interests of investors in the Applicant. This will include the authority to prevent or limit the grant of additional Awards. All records maintained pursuant to this condition will be subject to examination by the Commission and its staff.
6. Awards under the 2020 Daxor Plan are issuable only to Eligible Persons. No person will be granted Awards denominated by reference to shares, or be issued shares in settlement of Awards not initially denominated by reference to shares, that in the aggregate exceed 35% of the shares initially reserved for issuance under the Plan, subject to adjustment under the Plan. Subject to the immediately preceding limitation, in any thirty-six month period during which the Plan is in effect, no person may be granted Awards under the Plan relating to more than 75,000 shares, which amount may be adjusted to reflect certain corporate transactions or events that affect the Applicant's stock. Grants to Non-Employee Directors are limited to those described in condition 7 below.
7. In each fiscal year, a Non-Employee Director may be granted up to 500 shares of vested Bonus Stock without restrictions, which amount may be adjusted to reflect certain corporate transactions.
For the Commission, by the Division of Investment Management, under delegated authority.
The Department of State has cancelled a meeting of the Shipping Coordinating Committee that was scheduled for 12 p.m. on March 23, 2020, in Room 6i10-01-c of the Douglas A. Munro Coast Guard Headquarters Building at St. Elizabeth's, 2703 Martin Luther King Jr. Avenue SE, Washington, DC, 20593.
The primary purpose of the meeting was to prepare for the 75th session of the International Maritime Organization's (IMO) Marine Environment Protection Committee to be held at the IMO Headquarters, London, United Kingdom from March 30, to April 3, 2020. That meeting has been postponed indefinitely by the IMO due to concerns over COVID-19. The Department of State will reschedule this public meeting when the Marine Environment Protection Committee meeting is rescheduled.
Office of the United States Trade Representative.
Notice requesting applications.
The United States-Mexico-Canada Agreement (USMCA) requires
To ensure consideration, USTR must receive your application by April 20, 2020.
You should submit your application through the Federal eRulemaking Portal:
For information about the application process, contact Sandy McKinzy, Legal Technician, Office of Monitoring and Enforcement, at (202) 395-9483. For all other inquiries, contact Assistant General Counsel Nicholas Paster at
USTR is seeking applications from U.S. citizens and nationals of other countries who are interested in serving as panelists for general state-to-state or labor dispute settlement panels established under the USMCA. You can find the text of the USMCA on the USTR website:
USMCA is a trilateral trade agreement between the United States, Mexico, and Canada (the Parties). Chapter 31 sets out detailed procedures for the resolution of most disputes arising under the USMCA. Dispute settlement involves two stages: (1) Consultations between the disputing Parties to try to arrive at a mutually satisfactory resolution of the matter, and (2) resort to a neutral panel to make a determination regarding the matter at issue. The disputing Parties form a separate five-member panel for each dispute although they may agree to a three-member panel.
USMCA requires the Parties to establish a general roster of up to 30 individuals who are willing to serve as panelists, with each Party designating up to 10 individuals. The Parties will try to achieve consensus on the roster. Individuals on the roster are appointed for a minimum term of three years and will remain on the list until the Parties form a new roster.
Panelists normally are selected from the roster. For disputes under Chapter 23 (Labor) and Chapter 24 (Environment), each disputing Party has to select panelists with relevant expertise, and for disputes in specialized areas of law aside from labor and environment, the disputing Parties should select panelists to ensure the necessary expertise is available on the panel. For each dispute, roster members under consideration to serve as a panelist will have to complete a disclosure form that the Parties use to identify possible conflicts of interest or appearances thereof. The disclosure form requests information regarding financial interests and affiliations, including information regarding the identity of any clients the roster member may have, and, if applicable, clients of the roster member's firm.
To qualify for inclusion on the on the general dispute settlement roster, an applicant must:
• Have expertise or experience in law, international trade, other matters covered by USMCA, or the resolution of disputes arising under international trade agreements.
• Be objective, reliable, and possess sound judgment.
• Be independent of, and not be affiliated with or take instructions from, a Party.
• Comply with a code of conduct established by the Parties.
Annex 31-A establishes a facility-specific rapid response labor mechanism (the Mechanism), as between the United States and Mexico, which can be used whenever either Party believes that workers at a Covered Facility (as defined in Article 31-A.15) are being denied the right of free association and collective bargaining under the laws necessary to fulfill the obligations of the other Party under the USMCA (a Denial of Rights). A Party may ask a labor panel under the Mechanism to request that the respondent Party allow it an opportunity to verify the Covered Facility's compliance with the law in question and to determine whether there has been a Denial of Rights.
USMCA requires the Parties to establish three lists of panelists who are willing to commit to being generally available to serve as labor panelists for the Mechanism. By the date of entry into force of USMCA, each Party has to appoint three individuals to one list and appoint, by consensus, three individuals to a joint list. The individuals on the joint list may not be nationals of either the United States or Mexico. Six months from entry into force of USMCA, the lists will be expanded to at least five individuals each. Individuals on the lists are appointed for a minimum term of four years or until the Parties constitute new lists.
To qualify for inclusion on the Mechanism lists, an applicant must:
• Have expertise and experience in labor law and practice, and with the application of standards and rights as recognized by the International Labor Organization.
• Be objective, reliable, and possess sound judgment.
• Be independent of, and not be affiliated with or take instructions from, a Party.
• Comply with a code of conduct established by the Parties.
USTR invites eligible individuals who wish to be considered for inclusion on the general roster or the labor Mechanism lists to submit applications through
To submit an application via
The
Applications should include the following information, and should number each section of the application as indicated:
1. Name of the applicant.
2. Business address, telephone number, fax number, and email address.
3. Citizenship(s).
4. Current employment, including title, description of responsibility, and name and address of employer.
5. Relevant education and professional training.
6. Fluency in any relevant language other than English, written and spoken.
7. Post-education employment history, including the dates and addresses of each prior position, a summary of responsibilities, and a list of clients represented in the prior five years.
8. Relevant professional affiliations and certifications, including, if any, current bar memberships in good standing.
9. A list and copies of publications, testimony, and speeches, if any, concerning the relevant area(s) of expertise. Judges or former judges should list relevant judicial decisions. Submit only one copy of publications, testimony, speeches, and decisions.
10. A list of international trade proceedings or domestic proceedings relating to international trade matters, labor law, or other relevant matters in which the applicant has provided advice to a party or otherwise participated.
11. Summary of any current and past employment by, or consulting or other work for, the Governments of the United States, Mexico, or Canada.
12. The names and nationalities of all foreign principals for whom the applicant is currently or has previously been registered pursuant to the Foreign Agents Registration Act, 22 U.S.C. 611
13. A short statement of qualifications and availability for service, including information relevant to the applicant's familiarity with international trade law, labor law, and relevant area(s) for the roster or list for which the applicant seeks to be considered, and willingness and ability to make time commitments necessary for service on panels.
14. On a separate page, the names, addresses, telephone and fax numbers of three individuals willing to provide information concerning the applicant's qualifications for service, including the applicant's character, reputation, reliability, judgment, and familiarity with the relevant area of expertise.
Applications are covered by a Privacy Act System of Records Notice (
False statements by an applicant regarding their personal or professional qualifications, or financial or other relevant interests that bear on the applicant's suitability for placement on a roster or appointment to a panel are subject to criminal sanctions under 18 U.S.C. 1001.
Office of the United States Trade Representative.
Notice of product exclusion extensions.
Effective July 6, 2018, the U.S. Trade Representative imposed additional duties on goods of China with an annual trade value of approximately $34 billion as part of the action in the Section 301 investigation of China's acts, policies, and practices related to technology transfer, intellectual property, and innovation. The U.S. Trade Representative initiated the exclusion process in July 2018 and, to date, has granted ten sets of exclusions. The second set of exclusions was published in March 2019 and will expire in March 2020. On December 30, 2019, the U.S. Trade Representative established a process for the public to comment on whether to extend particular exclusions granted in March 2019 for up to 12 months. This notice announces the U.S. Trade Representative's determination to extend certain exclusions for 12 months.
The product exclusion extensions announced in this notice will apply as of March 25, 2020 and extend for one year. U.S. Customs and Border Protection will issue instructions on entry guidance and implementation.
For general questions about this notice, contact Assistant General Counsels Philip Butler or Benjamin Allen, or Director of Industrial Goods Justin Hoffmann at (202) 395-5725. For specific questions on customs classification or implementation of the product exclusions identified in the Annex to this notice, contact
For background on the proceedings in this investigation, please see the prior notices issued in the investigation, including 82 FR 40213 (August 23, 2017), 83 FR 14906 (April 6, 2018), 83 FR 28710 (June 20, 2018), 83 FR 32181 (July 11, 2018), 83 FR 67463 (December 28, 2018), 84 FR 11152 (March 25, 2019), 84 FR 16310 (April 18, 2019), 84 FR 21389 (May 14, 2019), 84 FR 25895 (June 4, 2019), 84 FR 32821 (July 9, 2019), 84 FR 46212 (September 3, 2019), 84 FR 49564 (September 20, 2019), 84 FR 52567 (October 2, 2019), 84 FR 58427 (October 31, 2019), 84 FR 70616 (December 23, 2019), 84 FR 72102 (December 30, 2019), 85 FR 6687 (February 5, 2020), and 85 FR 12373 (March 2, 2020).
Effective July 6, 2018, the U.S. Trade Representative imposed additional 25 percent duties on goods of China classified in 818 8-digit subheadings of the Harmonized Tariff Schedule of the United States (HTSUS), with an approximate annual trade value of $34 billion.
In March 2019, the U.S. Trade Representative granted a set of exclusion requests, which expire on March 25, 2020.
Under the December 30 notice, commenters were asked to address whether the particular product and/or a comparable product is available from sources in the United States and/or in third countries; any changes in the global supply chain since July 2018 with respect to the particular product, or any other relevant industry developments; and efforts, if any, importers or U.S. purchasers have undertaken since July 2018 to source the product from the United States or third countries.
In addition, commenters who were importers and/or purchasers of the products covered by an exclusion were asked to provide information regarding their efforts since July 2018 to source the product from the United States or third countries; the value and quantity of the Chinese-origin product covered by the specific exclusion request purchased in 2018, the first half of 2018, and the first half of 2019, and whether these purchases are from a related company; whether Chinese suppliers have lowered their prices for products covered by the exclusion following the imposition of duties; the value and quantity of the product covered by the exclusion purchased from domestic and third country sources in 2018, the first half of 2018 and the first half of 2019; the commenter's gross revenue for 2018, the first half of 2018, and the first half of 2019; whether the Chinese-origin product of concern is sold as a final product or as an input; whether the imposition of duties on the products covered by the exclusion will result in severe economic harm to the commenter or other U.S. interests; and any additional information in support or in opposition of the extending the exclusion.
The December 30 notice required the submission of comments no later than February 15, 2020.
Based on the evaluation of the factors set out in the July 11 notice and December 30 notice, which are summarized above, pursuant to sections 301(b), 301(c), and 307(a) of the Trade Act of 1974, as amended, and in accordance with the advice of the interagency Section 301 Committee, the U.S. Trade Representative has determined to extend for 12 months certain product exclusions covered by the March 25 notice, as set out in the Annex to this notice. The U.S. Trade Representative's determination also takes into account advice from advisory committees and any public comments concerning the extension of the pertinent exclusion.
In accordance with the July 11 notice, the exclusions are available for any product that meets the description in the Annex, regardless of whether the importer filed an exclusion request. Further, the scope of each exclusion is governed by the scope of the 10-digit HTSUS headings and product descriptions in the Annex to this notice, and not by the product descriptions set out in any particular request for exclusion.
As set out in the Annex, the U.S. Trade Representative has determined to extend the following exclusions under U.S. note 20(i) to subchapter III of chapter 99 of the HTSUS: (1), (3), (5), (10), (13), (14), (15), (17), (19), (23) and (32).
Pursuant to the product exclusion process, the U.S. Trade Representative has determined to extend the following exclusions granted under the March 25, 2019 notice under heading 9903.88.06 and U.S. note 20(i) to subchapter III of chapter 99 of the HTSUS:
Effective with respect to goods entered for consumption, or withdrawn from warehouse for consumption, on or after 12:01 a.m. eastern daylight time on July 6, 2018, and before March 25, 2021, the additional duties provided for in heading 9903.88.01 shall not apply to products which are provided for in heading 9903.88.06 and U.S. notes 20(i)(1), 20(i)(3), 20(i)(5), 20(i)(10), 20(i)(13), 20(i)(14), 20(i)(15), 20(i)(17), 20(i)(19), 20(i)(23) and 20(i)(32) to subchapter III of chapter 99 of the HTSUS.
Federal Aviation Administration (FAA), Department of Transportation (DOT).
Notice.
This notice contains a summary of a petition seeking relief from specified requirements of Federal Aviation Regulations. The purpose of this notice is to improve the public's awareness of, and participation in, the FAA's exemption process. Neither publication of this notice nor the inclusion or omission of information in the summary is intended to affect the legal status of the petition or its final disposition.
Comments on this petition must identify the petition docket number and must be received on or before April 8, 2020.
Send comments identified by docket number FAA-2019-0825 using any of the following methods:
•
•
•
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Nia Daniels, Office of Rulemaking, (202) 267-7626; Federal Aviation Administration, 800 Independence Avenue SW, Washington, DC 20591.
This notice is published pursuant to 14 CFR 11.85.
Capitalized terms used in this NOGA and not defined elsewhere are defined in the CDFI Bond Guarantee Program regulations (12 CFR 1808.102) and the CDFI Program regulations (12 CFR 1805.104).
A.
B.
C.
D.
1. Qualified Issuer Applications submitted with Guarantee Applications will have priority for review over Qualified Issuer Applications submitted without Guarantee Applications. With the exception of the aforementioned prioritized review, all Qualified Issuer Applications and Guarantee Applications will be reviewed by the CDFI Fund on an ongoing basis, in the order in which they are received, or by such other criteria that the CDFI Fund may establish in its sole discretion.
2. Guarantee Applications that are incomplete or require the CDFI Fund to request additional or clarifying information may delay the ability of the CDFI Fund to move the Guarantee Application to the next phase of review. Submitting an incomplete Guarantee Application earlier than other applicants does not ensure first approval.
3. Qualified Issuer Applications and Guarantee Applications that were received in FY 2019 and that were neither withdrawn nor declined in FY 2019 will be considered under FY 2020 authority.
4. Pursuant to the Regulations at 12 CFR 1808.504(c), the Guarantor may limit the number of Guarantees issued per year or the number of Guarantee Applications accepted to ensure that a sufficient examination of Guarantee Applications is conducted.
E.
1. CDFI Bond Guarantee Program Regulations. The regulations that govern the CDFI Bond Guarantee Program were published on February 5, 2013 (78 FR 8296; 12 CFR part 1808) (the Regulations), and provide the regulatory requirements and parameters for CDFI Bond Guarantee Program implementation and administration including general provisions, eligibility, eligible activities, applications for Guarantee and Qualified Issuer, evaluation and selection, terms and conditions of the Guarantee, Bonds, Bond Loans, and Secondary Loans.
2. Application materials. Details regarding Qualified Issuer Application and Guarantee Application content requirements are found in this NOGA and the respective application materials. Interested parties should review the template Bond Documents and Bond Loan documents that will be used in connection with each Guarantee. The template documents are posted on the CDFI Fund's website for review. Such documents include, among others:
a. The Secondary Loan Requirements, which contain the minimum required criteria (in addition to the Eligible CDFI's underwriting criteria) for a loan to be accepted as a Secondary Loan or Other Pledged Loan. The Secondary Loan Requirements include the General Requirements and the Underwriting Review Checklist;
b. The Agreement to Guarantee, which describes the roles and responsibilities of the Qualified Issuer, will be signed by the Qualified Issuer and the Guarantor, and will include term sheets as exhibits that will be signed by each individual Eligible CDFI;
c. The Term Sheet(s), which describe the material terms and conditions of the Bond Loan from the Qualified Issuer to the Eligible CDFI. The CDFI Fund website includes template term sheets for the General Recourse Structure, the Alternative Financial Structure, and for the CDFI to Financing Entity Asset Class utilizing pooled tertiary loans;
d. The Bond Trust Indenture, which describes the responsibilities of the Master Servicer/Trustee in overseeing the Trust Estate and the servicing of the Bonds, which will be entered into by the Qualified Issuer and the Master Servicer/Trustee;
e. The Bond Loan Agreement, which describes the terms and conditions of Bond Loans, and will be entered into by the Qualified Issuer and each Eligible CDFI that receives a Bond Loan;
f. The Bond Purchase Agreement, which describes the terms and conditions under which the Bond Purchaser will purchase the Bonds issued by the Qualified Issuer, and will be signed by the Bond Purchaser, the Qualified Issuer, the Guarantor and the CDFI Fund; and
g. The Future Advance Promissory Bond, which will be signed by the
The template documents may be updated periodically, as needed, and will be tailored, as appropriate, to the terms and conditions of a particular Bond, Bond Loan, and Guarantee.
The Bond Documents and the Bond Loan documents reflect the terms and conditions of the CDFI Bond Guarantee Program and will not be substantially revised or negotiated prior to execution.
F.
G.
H.
I.
1. Award funds received under any other CDFI Fund Program cannot be used by any participant, including Qualified Issuers, Eligible CDFIs, and Secondary Borrowers, to pay principal, interest, fees, administrative costs, or issuance costs (including Bond Issuance Fees) related to the CDFI Bond Guarantee Program, or to fund the Risk-Share Pool for a Bond Issue.
2. Bond Proceeds may not be used to refinance any projects financed with proceeds from the Capital Magnet Fund (CMF).
3. Bond Proceeds may not be used to refinance a leveraged loan during the seven-year NMTC compliance period. However, Bond Proceeds may be used to refinance a QLICI after the seven-year NMTC compliance period has ended, so long as all other programmatic requirements are met.
4. The terms Qualified Equity Investment, Community Development Entity, and QLICI are defined in the NMTC Program's authorizing statute, 26 U.S.C. 45D.
J.
1. The CDFI Bond Guarantee Program underwriting process will include a comprehensive review of the Eligible CDFI's concentration of sources of funds available for debt service, including the concentration of sources from other Federal programs and level of reliance on said sources, to determine the Eligible CDFI's ability to service the additional debt.
2. Funds from other Federal programs may not be used to meet the Bond Guarantee Program Bond Loan Overcollateralization Requirement.
3. In the event that the Eligible CDFI proposes to use other Federal funds to service Bond Loan debt or as a Credit Enhancement for Secondary Loans, the CDFI Fund may require, in its sole discretion that the Eligible CDFI provide written assurance from such other Federal program in a form that is acceptable to the CDFI Fund and that the CDFI Fund may rely upon, that said use is permissible.
K.
L.
The following requirements apply to all Qualified Issuer Applications and Guarantee Applications submitted under this NOGA, as well as any Qualified Issuer Applications and Guarantee Applications submitted under the FY 2019 NOGA that were neither withdrawn nor declined in FY 2019.
A.
1. In general. By statute and regulation, the Qualified Issuer applicant must be either a Certified CDFI (an entity that has been certified by the CDFI Fund as meeting the CDFI certification requirements set forth in 12 CFR 1805.201) or an entity designated by a Certified CDFI to issue Bonds on its behalf. An Eligible CDFI must be a Certified CDFI as of the Bond Issue Date and must maintain its CDFI certification throughout the term of the corresponding Bond.
2. CDFI Certification requirements. Pursuant to the regulations that govern CDFI certification (12 CFR 1805.201), an entity may be certified if it is a legal entity (meaning, that it has properly filed articles of incorporation or other organizing documents with the State or other appropriate body in the jurisdiction in which it was legally established, as of the date the CDFI Certification Application is submitted) and meets the following requirements:
a. Primary mission requirement (12 CFR 1805.201(b)(1)): To be a Certified CDFI, an entity must have a primary mission of promoting community development, which mission must be consistent with its Target Market. In general, the entity will be found to meet the primary mission requirement if its incorporating documents or board-approved narrative statement (
b. Financing entity requirement (12 CFR 1805.201(b)(2)): To be a Certified CDFI, an entity must demonstrate that
i. On April 10, 2015, the CDFI Fund published a revision of 12 CFR 1805.201(b)(2), the section of the CDFI certification regulation that governs the “financing entity” requirement. The regulatory change creates a means for the CDFI Fund, in its discretion, to deem an Affiliate (meaning, in this case, an entity that is Controlled by a CDFI; see 12 CFR 1805.104(b)) to have met the financing entity requirement based on the financing activity or track record of the Controlling CDFI (Control is defined in 12 CFR 1805.104(q)), solely for the purpose of participating in the CDFI Bond Guarantee Program as an Eligible CDFI. This change is key to the creation of an Alternative Financial Structure for the Bond Guarantee Program (see Section II(B)(2) of this NOGA for more information on the Alternative Financial Structure).
In order for the Affiliate to rely on the Controlling CDFI's financing track record, (A) the Controlling CDFI must be a Certified CDFI; (B) there must be an operating agreement that includes management and ownership provisions in effect between the two entities (prior to the submission of a CDFI Certification Application and in form and substance that is acceptable to the CDFI Fund); and (C) the Affiliate must submit a complete CDFI Certification Application to the CDFI Fund no later than 11:59 p.m. ET on April 6, 2020 in order it to be considered for CDFI certification and participation in the FY 2020 application round of the CDFI Bond Guarantee Program.
This regulatory revision affects only the Affiliate's ability to meet the financing entity requirement for purposes of CDFI certification: Said Affiliate must meet the other certification criteria in accordance with the existing regulations governing CDFI certification.
ii. The revised regulation also states that, solely for the purpose of participating in the CDFI Bond Guarantee Program, the Affiliate's provision of Financial Products and Financial Services, Development Services, and/or other similar financing transactions need not be arms-length in nature if such transaction is by and between the Affiliate and Controlling CDFI, pursuant to an operating agreement that (a) includes management and ownership provisions, (b) is effective prior to the submission of a CDFI Certification Application, and (c) is in form and substance that is acceptable to the CDFI Fund.
iii. An Affiliate whose CDFI certification is based on the financing activity or track record of a Controlling CDFI is not eligible to receive financial or technical assistance awards or tax credit allocations under any other CDFI Fund program until such time that the Affiliate meets the financing entity requirement based on its own activity or track record.
iv. If an Affiliate elects to satisfy the financing entity requirement based on the financing activity or track record of a Controlling CDFI, and if the CDFI Fund approves such Affiliate as an Eligible CDFI for the sole purpose of participation in the CDFI Bond Guarantee Program, said Affiliate's CDFI certification will terminate if: (A) It does not enter into Bond Loan documents with its Qualified Issuer within one (1) year of the date that it signs the term sheet (which is an exhibit to the Agreement to Guarantee); (B) it ceases to be an Affiliate of the Controlling CDFI; or (C) it ceases to adhere to CDFI certification requirements.
v. An Affiliate electing to satisfy the financing entity requirement based on the financing activity or track record of a Controlling CDFI need not have completed any financing activities prior to the date the CDFI Certification Application is submitted or approved. However, the Affiliate and the Controlling CDFI must have entered into the operating agreement described in (b)(i)(B) above, prior to such date, in form and substance that is acceptable to the CDFI Fund.
c. Target Market requirement (12 CFR 1805.201(b)(3)): To be a Certified CDFI, an entity must serve at least one eligible Target Market (either an Investment Area or a Targeted Population) by directing at least 60% of all of its Financial Product activities to one or more eligible Target Market.
i. Solely for the purpose of participation as an Eligible CDFI in the FY 2020 application round of the CDFI Bond Guarantee Program, an Affiliate of a Controlling CDFI may be deemed to meet the Target Market requirement by virtue of serving either:
(A) An Investment Area through “borrowers or investees” that serve the Investment Area or provide significant benefits to its residents (pursuant to 12 CFR 1805.201(b)(3)(ii)(F)). For purposes of this NOGA, the term “borrower” or “investee” includes a borrower of a loan originated by the Controlling CDFI that has been transferred to the Affiliate as lender (which loan must meet Secondary Loan Requirements), pursuant to an operating agreement with the Affiliate that includes ownership/investment and management provisions, which agreement must be in effect prior to the submission of a CDFI Certification Application and in form and substance that is acceptable to the CDFI Fund. Loans originated by the Controlling CDFI do not need to be transferred prior to application submission; however, such loans must be transferred before certification of the Affiliate is effective. If an Affiliate has more than one Controlling CDFI, it may meet this Investment Area requirement through one or more of such Controlling CDFIs' Investment Areas; or
(B) a Targeted Population “indirectly or through borrowers or investees that directly serve or provide significant benefits to such members” (pursuant to 12 CFR 1805.201(b)(3)(iii)(B)) if a loan originated by the Controlling CDFI has been transferred to the Affiliate as lender (which loan must meet Secondary Loan Requirements) and the Controlling CDFI's financing entity activities serve the Affiliate's Targeted Population pursuant to an operating agreement that includes ownership/investment and management provisions by and between the Affiliate and the Controlling CDFI, which agreement must be in effect prior to the submission of a CDFI Certification Application and in form and substance that is acceptable to the CDFI Fund. Loans originated by the Controlling CDFI do not need to be transferred prior to application submission; however, such loans must be transferred before certification of the Affiliate is effective. If an Affiliate has more than one Controlling CDFI, it may meet this Targeted Population requirement through one or more of such Controlling CDFIs' Targeted Populations.
An Affiliate that meets the Target Market requirement through paragraphs (ii) (A) or (B) above, is not eligible to receive financial or technical assistance awards or tax credit allocations under any other CDFI Fund program until such time that the Affiliate meets the Target Market requirements based on its own activity or track record.
ii. If an Affiliate elects to satisfy the target market requirement based on paragraphs (c)(ii)(A) or (B) above, the Affiliate and the Controlling CDFI must have entered into the operating agreement as described above, prior to the date that the CDFI Certification Application is submitted, in form and substance that is acceptable to the CDFI Fund.
d. Development Services requirement (12 CFR 1805.201(b)(4)): To be a Certified CDFI, an entity must provide Development Services in conjunction with its Financial Products. Solely for the purpose of participation as an
e. Accountability requirement (12 CFR 1805.201(b)(5)): To be a Certified CDFI, an entity must maintain accountability to residents of its Investment Area or Targeted Population through representation on its governing board and/or advisory board(s), or through focus groups, community meetings, and/or customer surveys. Solely for the purpose of participation as an Eligible CDFI in the FY 2020 application round of the CDFI Bond Guarantee Program, an Affiliate of a Controlling CDFI may be deemed to meet this requirement only if it has a governing board and/or advisory board that has the same composition as the Controlling CDFI and such governing board or advisory board has convened and/or conducted Affiliate business prior to the date of submission of the CDFI Certification Application. If an Affiliate has multiple Controlling CDFIs, the governing board and/or advisory board may have a mixture of representatives from each Controlling CDFI so long as there is at least one representative from each Controlling CDFI.
f. Non-government entity requirement (12 CFR 1805.201(b)(6)): To be a Certified CDFI, an entity can neither be a government entity nor be controlled by one or more governmental entities.
g. For the FY 2020 application round of the CDFI Bond Guarantee Program, only one Affiliate per Controlling CDFI may participate as an Eligible CDFI. However, there may be more than one Affiliate participating as an Eligible CDFI in any given Bond Issue.
3. Operating agreement: An operating agreement between an Affiliate and its Controlling CDFI, as described above, must provide, in addition to the elements set forth above, among other items: (i) Conclusory evidence that the Controlling CDFI Controls the Affiliate, through investment and/or ownership; (ii) explanation of all roles, responsibilities and activities to be performed by the Controlling CDFI including, but not limited to, governance, financial management, loan underwriting and origination, record- keeping, insurance, treasury services, human resources and staffing, legal counsel, dispositions, marketing, general administration, and financial reporting; (iii) compensation arrangements; (iv) the term and termination provisions; (v) indemnification provisions, if applicable; (vi) management and ownership provisions; and (vii) default and recourse provisions.
4. For more detailed information on CDFI certification requirements, please review the CDFI certification regulation (12 CFR 1805.201, as revised on April 10, 2015) and CDFI Certification Application materials/guidance posted on the CDFI Fund's website. Interested parties should note that there are specific regulations and requirements that apply to Depository Institution Holding Companies, Insured Depository Institutions, Insured Credit Unions, and State-Insured Credit Unions.
5. Uncertified entities, including an Affiliate of a Controlling CDFI, that wish to apply to be certified and designated as an Eligible CDFI in the FY 2020 application round of the CDFI Bond Guarantee Program must submit a CDFI Certification Application to the CDFI Fund by 11:59 p.m. ET on April 6, 2020. Any CDFI Certification Application received after such date and time, as well as incomplete applications that are not amended by the deadline, will not be considered for the FY 2020 application round of the CDFI Bond Guarantee Program.
6. In no event will the Secretary approve a Guarantee for a Bond from which a Bond Loan will be made to an entity that is not an Eligible CDFI. The Secretary must make FY 2020 Guarantee Application decisions, and the CDFI Fund must close the corresponding Bonds and Bond Loans, prior to the end of FY 2020 (September 30, 2020). Accordingly, it is essential that CDFI Certification Applications are submitted timely and in complete form, with all materials and information needed for the CDFI Fund to make a certification decision. Information on CDFI certification, the CDFI Certification Application, and application submission instructions may be found on the CDFI Fund's website at
B.
1. General Recourse Structure. Under the general recourse structure, the Bond is a nonrecourse obligation to the Qualified Issuer, and the Bond Loan is a full general recourse obligation to the Eligible CDFI. For all Asset Classes except CDFI to Financing Entity utilizing pooled tertiary loans, the Bond Loan Collateral Requirements are as follows: Each Bond Loan must be secured at all times by Secondary Loans, and/or cash collateral pledged by the Eligible CDFI in the amount of 110% of the unpaid principal balance of the Bond Loan. In addition, each Bond Loan must either receive Third Party Support or provide additional pledged collateral in the form of Secondary Loans, and/or cash collateral to secure the underlying Bond Loan in an amount ranging from 1% to 10% of the unpaid principal balance of the Bond Loan. Therefore, the total collateralization for each Bond Loan plus Third Party Support will range from 111% to 120%. Some portion of the Third Party Support must be cash collateral or other pledged assets/property as determined by the CDFI Fund, the remaining portion of the Third Party Support may be a Principal Loss Collateral Provision in the form of a guarantee, letter of credit, or similar instrument in accordance with the Secondary Loan Requirements. The actual percentage of required Third Party Support will be determined by the CDFI Fund during Guarantee Application review; however, all applicants should be prepared to provide Third Party Support in an amount up to 10% of the unpaid principal balance of the Bond Loan. All collateral pledged under the BG Program, including Third Party Support, must conform to the BG Program Secondary Loan Requirements. Overcollateralization requirements for the asset class CDFI to Financing Entity utilizing pooled tertiary loans remains 125% of the unpaid principal balance of the underlying Secondary Loan as delineated in the template term sheet located on the CDFI Fund website at
2. Alternative Financial Structure. An Alternative Financial Structure (AFS) can be used as a limited recourse option to a Controlling CDFI or group of Controlling CDFIs. The AFS is an Affiliate of a Controlling CDFI(s) that is created for the sole purpose of participation as an Eligible CDFI in the CDFI Bond Guarantee Program. The AFS must be an Affiliate of a Controlling CDFI(s) and must be certified as a CDFI in accordance with the requirements set forth in Section II(A) of this NOGA. The AFS, as the Eligible CDFI, provides a general full
C.
1. Electronic submission. All Qualified Issuer Applications and Guarantee Applications must be submitted through the CDFI Fund's Awards Management Information System (AMIS). Applications sent by mail, fax, or other form will not be permitted, except in circumstances that the CDFI Fund, in its sole discretion, deems acceptable. Please note that Applications will not be accepted through
2. Applicant identifier numbers. Please note that, pursuant to Office of Management and Budget (OMB) guidance (68 FR 38402), each Qualified Issuer applicant and Guarantee applicant must provide, as part of its Application, its Dun and Bradstreet Data Universal Numbering System (DUNS) number, as well as DUNS numbers for its proposed Program Administrator, its proposed Servicer, and each Certified CDFI that is included in the Qualified Issuer Application and Guarantee Application. In addition, each Application must include a valid and current Employer Identification Number (EIN), with a letter or other documentation from the IRS confirming the Qualified Issuer applicant's EIN, as well as EINs for its proposed Program Administrator, its proposed Servicer, and each Certified CDFI that is included in any Application. An Application that does not include such DUNS numbers, EINs, and documentation is incomplete and will be rejected by the CDFI Fund. Applicants should allow sufficient time for the IRS and/or Dun and Bradstreet to respond to inquiries and/or requests for the required identification numbers.
3. System for Award Management (SAM). Registration with SAM is required for each Qualified Issuer applicant, its proposed Program Administrator, its proposed Servicer, and each Certified CDFI that is included in any Application. The CDFI Fund will not consider any Applications that do not meet the requirement that each entity must be properly registered before the date of Application submission. The SAM registration process may take one month or longer to complete. A signed notarized letter identifying the SAM authorized entity administrator for the entity associated with the DUNS number is required. This requirement is applicable to new entities registering in SAM, as well as to existing entities with registrations being updated or renewed in SAM. Applicants without DUNS and/or EIN numbers should allow for additional time as an applicant cannot register in SAM without those required numbers. Applicants that have previously completed the SAM registration process must verify that their SAM accounts are current and active. Each applicant must continue to maintain an active SAM registration with current information at all times during which it has an active Federal award or an Application under consideration by a Federal awarding agency. The CDFI Fund will not consider any applicant that fails to properly register or activate its SAM account and these restrictions also apply to organizations that have not yet received a DUNS or EIN number. Applicants must contact SAM directly with questions related to registration or SAM account changes as the CDFI Fund does not maintain this system and has no ability to make changes or correct errors of any kind. For more information about SAM, visit
4. AMIS accounts. Each Qualified Issuer applicant, its proposed Program Administrator, its proposed Servicer, and each Certified CDFI that is included in the Qualified Issuer Application or Guarantee Application must register User and Organization accounts in AMIS. Each such entity must be registered as an Organization and register at least one User Account in AMIS. As AMIS is the CDFI Fund's primary means of communication with applicants with regard to its programs, each such entity must make sure that it updates the contact information in its AMIS account before any Application is submitted. For more information on AMIS, please visit the AMIS Landing Page at
D.
1. As of the date of this NOGA, the Qualified Issuer Application, the Guarantee Application, and related application instructions may be found on the CDFI Bond Guarantee Program's page on the CDFI Fund's website at
2. Paperwork Reduction Act. Under the Paperwork Reduction Act (44 U.S.C. chapter 35), an agency may not conduct or sponsor a collection of information, and an individual is not required to respond to a collection of information, unless it displays a valid OMB control number. Pursuant to the Paperwork Reduction Act, the Qualified Issuer Application, the Guarantee Application, and the Secondary Loan Requirements have been assigned the following control number: 1559-0044.
3. Application deadlines. In order to be considered for the issuance of a Guarantee under FY 2020 program authority, Qualified Issuer Applications must be submitted by 11:59 p.m. ET on May 11, 2020, and Guarantee Applications must be submitted by 11:59 p.m. ET on May 18, 2020. Qualified Issuer Applications and Guarantee Applications received in FY 2019 that were neither withdrawn nor declined will be considered under FY 2020 authority. If applicable, CDFI Certification Applications must be received by the CDFI Fund by 11:59 p.m. ET on April 6, 2020.
4. Format. Detailed Qualified Issuer Application and Guarantee Application content requirements are found in the Applications and application guidance. The CDFI Fund will read only information requested in the Application and reserves the right not to read attachments or supplemental materials that have not been specifically requested in this NOGA, the Qualified Issuer, or the Guarantee Application. Supplemental materials or attachments such as letters of public support or other statements that are meant to bias or influence the Application review process will not be read.
5. Application revisions. After submitting a Qualified Issuer Application or a Guarantee Application, the applicant will not be permitted to revise or modify the Application in any way unless authorized or requested by the CDFI Fund.
6. Material changes.
a. In the event that there are material changes after the submission of a Qualified Issuer Application prior to the designation as a Qualified Issuer, the applicant must notify the CDFI Fund of such material changes information in a timely and complete manner. The CDFI Fund will evaluate such material changes, along with the Qualified Issuer Application, to approve or deny the designation of the Qualified Issuer.
b. In the event that there are material changes after the submission of a Guarantee Application (including, but not limited to, a revision of the Capital Distribution Plan or a change in the Eligible CDFIs that are included in the Application) prior to or after the designation as a Qualified Issuer or approval of a Guarantee Application or Guarantee, the applicant must notify the CDFI Fund of such material changes information in a timely and complete
E.
F.
G.
1. Pending resolution of noncompliance. If a Qualified Issuer applicant, its proposed Program Administrator, its proposed Servicer, or any of the Certified CDFIs included in the Qualified Issuer Application or Guarantee Application is a prior recipient or allocatee under any CDFI Fund program and (i) it has submitted reports to the CDFI Fund that demonstrate noncompliance with a previously executed agreement with the CDFI Fund, and (ii) the CDFI Fund has yet to make a final determination as to whether the entity is noncompliant with its previously executed agreement, the CDFI Fund will consider the Qualified Issuer Application or Guarantee Application pending full resolution, in the sole determination of the CDFI Fund, of the noncompliance.
2. Previous findings of noncompliance. If a Qualified Issuer applicant, its proposed Program Administrator, its proposed Servicer, or any of the Certified CDFIs included in the Qualified Issuer Application or Guarantee Application is a prior recipient or allocatee under any CDFI Fund program and the CDFI Fund has made a final determination that the entity is noncompliant with a previously executed agreement with the CDFI Fund, but has not notified the entity that it is ineligible to apply for future CDFI Fund program awards or allocations, the CDFI Fund will consider the Qualified Issuer Application or Guarantee Application. However, it is strongly advised that the entity take action to address such noncompliance finding, as repeat findings of noncompliance may result in the CDFI Fund determining the entity ineligible to participate in future CDFI Fund program rounds, which could result in any pending applications being deemed ineligible for further review. The CDFI Bond Guarantee Program staff cannot resolve compliance matters; instead, please contact the CDFI Fund's Office of Certification, Compliance Monitoring and Evaluation Unit (CCME) if your organization has questions about its current compliance status or has been found not in compliance with a previously executed agreement with the CDFI Fund.
3. Ineligibility due to noncompliance. The CDFI Fund will not consider a Qualified Issuer Application or Guarantee Application if the applicant, its proposed Program Administrator, its proposed Servicer, or any of the Certified CDFIs included in the Qualified Issuer Application or Guarantee Application, is a prior recipient or allocatee under any CDFI Fund program and if, as of the date of Qualified Issuer Application or Guarantee Application submission, (i) the CDFI Fund has made a determination that such entity is noncompliant with a previously executed agreement and (ii) the CDFI Fund has provided written notification that such entity is ineligible to apply for any future CDFI Fund program awards or allocations. Such entities will be ineligible to submit a Qualified Issuer or Guarantee Application, or be included in such submission, as the case may be, for such time period as specified by the CDFI Fund in writing.
H.
I.
All outstanding reporting and compliance questions should be directed to the Office of Certification, Compliance Monitoring and Evaluation help desk by AMIS Service Requests or by telephone at (202) 653-0423. The CDFI Fund will respond to applicants' reporting, compliance, or disbursement questions between the hours of 9:00 a.m. and 5:00 p.m. ET, starting on the date of the publication of this NOGA.
J.
(iv) the Age Discrimination Act of 1975, as amended (42 U.S.C. 6101-6107), which prohibits discrimination on the basis of age; (v) the Drug Abuse Office and Treatment Act of 1972 (Pub. L. 92-255), as amended, relating to nondiscrimination on the basis of drug abuse; (vi) the Comprehensive Alcohol Abuse and Alcoholism Prevention, Treatment and Rehabilitation Act of 1970 (Pub. L. 91-616), as amended, relating to nondiscrimination on the basis of alcohol abuse or alcoholism; (vii) Sections 523 and 527 of the Public Health Service Act of 1912 (42 U.S.C. 290 dd-3 and 290 ee-3), as amended, relating to confidentiality of alcohol and drug abuse patient records; (viii) Title VIII of the Civil Rights Act of 1968 (42 U.S.C. 3601
K.
L.
M.
N.
A.
1. Qualified Issuer. The Qualified Issuer is a Certified CDFI, or an entity designated by a Certified CDFI to issue Bonds on its behalf, that meets the requirements of the Regulations and this NOGA, and that has been approved by the CDFI Fund pursuant to review and evaluation of its Qualified Issuer Application. The Qualified Issuer will, among other duties: (i) Organize the Eligible CDFIs that have designated it to serve as their Qualified Issuer; (ii) prepare and submit a complete and timely Qualified Issuer and Guarantee Application to the CDFI Fund; (iii) if the Qualified Issuer Application is approved by the CDFI Fund and the Guarantee Application is approved by the Guarantor, prepare the Bond Issue; (iv) manage all Bond Issue servicing, administration, and reporting functions; (v) make Bond Loans; (vi) oversee the financing or refinancing of Secondary Loans; (vii) ensure compliance throughout the duration of the Bond with all provisions of the Regulations, and Bond Documents and Bond Loan Documents entered into between the Guarantor, the Qualified Issuer, and the Eligible CDFI; and (viii) ensure that the Master Servicer/Trustee complies with the Bond Trust Indenture and all other applicable regulations. Further, the role of the Qualified Issuer also is to ensure that its proposed Eligible CDFI applicants possess adequate and well performing assets to support the debt service of the proposed Bond Loan.
2. Qualified Issuer Application. The Qualified Issuer Application is the document that an entity seeking to serve as a Qualified Issuer submits to the CDFI Fund to apply to be approved as a Qualified Issuer prior to consideration of a Guarantee Application.
3. Qualified Issuer Application evaluation, general. Each Qualified Issuer Application will be evaluated by the CDFI Fund and, if acceptable, the applicant will be approved as a Qualified Issuer, in the sole discretion of the CDFI Fund. The CDFI Fund's Qualified Issuer Application review and evaluation process is based on established procedures, which may include interviews of applicants and/or site visits to applicants conducted by the CDFI Fund. Through the Application review process, the CDFI Fund will evaluate Qualified Issuer applicants on a merit basis and in a fair and consistent manner. Each Qualified Issuer applicant will be reviewed on its ability to successfully carry out the responsibilities of a Qualified Issuer throughout the life of the Bond. The Applicant must currently meet the criteria established in the Regulations to be deemed a Qualified Issuer. Qualified Issuer Applications that are forward-looking or speculate as to the eventual acquisition of the required capabilities and criteria are unlikely to be approved. Qualified Issuer Application processing will be initiated in chronological order by date of receipt; however, Qualified Issuer Applications that are incomplete or require the CDFI Fund to request additional or clarifying information may delay the ability of the CDFI Fund to deem the Qualified Issuer Application complete and move it to the next phase of review. Submitting a substantially incomplete application earlier than other applicants does not ensure first approval.
B.
1. CDFI certification requirements. The Qualified Issuer applicant must be a Certified CDFI or an entity designated by a Certified CDFI to issue Bonds on its behalf.
2. Designation and attestation by Certified CDFIs. An entity seeking to be approved by the CDFI Fund as a Qualified Issuer must be designated as a Qualified Issuer by at least one Certified CDFI. A Qualified Issuer may not designate itself. The Qualified Issuer applicant will prepare and submit a complete and timely Qualified Issuer Application to the CDFI Fund in accordance with the requirements of the Regulations, this NOGA, and the Application. A Certified CDFI must attest in the Qualified Issuer Application that it has designated the Qualified Issuer to act on its behalf and that the information in the Qualified Issuer Application regarding it is true, accurate, and complete.
C.
1. Substantive review.
a. If the CDFI Fund determines that the Qualified Issuer Application is complete and eligible, the CDFI Fund will undertake a substantive review in accordance with the criteria and procedures described in the Regulations, this NOGA, the Qualified Issuer Application, and CDFI Bond Guarantee Program policies.
b. As part of the substantive evaluation process, the CDFI Fund reserves the right to contact the Qualified Issuer applicant (as well as its proposed Program Administrator, its proposed Servicer, and each designating Certified CDFI in the Qualified Issuer Application) by telephone, email, mail, or through on-site visits for the purpose of obtaining additional, clarifying, confirming, or supplemental application information. The CDFI Fund reserves the right to collect such additional, clarifying, confirming, or supplemental information from said entities as it deems appropriate. If contacted for additional, clarifying, confirming, or supplemental information, said entities must respond within the time parameters set by the CDFI Fund or the Qualified Issuer Application will be rejected.
2. Qualified Issuer criteria. In total, there are more than 60 individual criteria or sub-criteria used to evaluate a Qualified Issuer applicant and all materials provided in the Qualified Issuer Application will be used to evaluate the applicant. Qualified Issuer determinations will be made based on Qualified Issuer applicants' experience and expertise, in accordance with the following criteria:
a. Organizational capability.
i. The Qualified Issuer applicant must demonstrate that it has the appropriate expertise, capacity, experience, and qualifications to issue Bonds for Eligible Purposes, or is otherwise qualified to serve as Qualified Issuer, as well as manage the Bond Issue on the terms and conditions set forth in the Regulations, this NOGA, and the Bond Documents, satisfactory to the CDFI Fund.
ii. The Qualified Issuer applicant must demonstrate that it has the appropriate expertise, capacity, experience, and qualifications to originate, underwrite, service and monitor Bond Loans for Eligible Purposes, targeted to Low-Income Areas and Underserved Rural Areas.
iii. The Qualified Issuer applicant must demonstrate that it has the appropriate expertise, capacity, experience, and qualifications to manage the disbursement process set forth in the Regulations at 12 CFR 1808.302 and 1808.307.
b. Servicer. The Qualified Issuer applicant must demonstrate that it has (either directly or contractually through another designated entity) the appropriate expertise, capacity, experience, and qualifications, or is otherwise qualified to serve as Servicer. The Qualified Issuer Application must provide information that demonstrates that the Qualified Issuer's Servicer has the expertise, capacity, experience, and qualifications necessary to perform certain required administrative duties (including, but not limited to, Bond Loan servicing functions).
c. Program Administrator. The Qualified Issuer applicant must demonstrate that it has (either directly or contractually through another designated entity) the appropriate expertise, capacity, experience, and qualifications, or is otherwise qualified to serve as Program Administrator. The Qualified Issuer Application must provide information that demonstrates that the Qualified Issuer's Program Administrator has the expertise, capacity, experience, and qualifications necessary to perform certain required administrative duties (including, but not limited to, compliance monitoring and reporting functions).
d. Strategic alignment. The Qualified Issuer applicant will be evaluated on its strategic alignment with the CDFI Bond Guarantee Program on factors that include, but are not limited to: (i) Its mission's strategic alignment with community and economic development objectives set forth in the Riegle Act at 12 U.S.C. 4701; (ii) its strategy for deploying the entirety of funds that may become available to the Qualified Issuer through the proposed Bond Issue; (iii) its experience providing up to 30-year capital to CDFIs or other borrowers in Low-Income Areas or Underserved Rural Areas as such terms are defined in the Regulations at 12 CFR 1808.102; (iv) its track record of activities relevant to its stated strategy; and (v) other factors relevant to the Qualified Issuer's strategic alignment with the program.
e. Experience. The Qualified Issuer applicant will be evaluated on factors that demonstrate that it has previous experience: (i) Performing the duties of a Qualified Issuer including issuing bonds, loan servicing, program administration, underwriting, financial reporting, and loan administration; (ii) lending in Low-Income Areas and Underserved Rural Areas; and (iii) indicating that the Qualified Issuer's current principals and team members have successfully performed the required duties, and that previous experience is applicable to the current principals and team members.
f. Management and staffing. The Qualified Issuer applicant must demonstrate that it has sufficiently strong management and staffing capacity to undertake the duties of Qualified Issuer. The applicant must also demonstrate that its proposed Program Administrator and its proposed Servicer have sufficiently strong management and staffing capacity to undertake their respective requirements under the CDFI Bond Guarantee Program. Strong management and staffing capacity is evidenced by factors that include, but are not limited to: (i) A sound track record of delivering on past performance; (ii) a documented succession plan; (iii) organizational stability including staff retention; and (iv) a clearly articulated, reasonable, and well-documented staffing plan.
g. Financial strength. The Qualified Issuer applicant must demonstrate the strength of its financial capacity and activities including, among other items, financially sound business practices relative to the industry norm for bond issuers, as evidenced by reports of Appropriate Federal Banking Agencies, Appropriate State Agencies, or auditors. Such financially sound business practices will demonstrate: (i) The financial wherewithal to perform activities related to the Bond Issue such as administration and servicing; (ii) the ability to originate, underwrite, close, and disburse loans in a prudent manner; (iii) whether the applicant is depending on external funding sources and the reliability of long-term access to such funding; (iv) whether there are foreseeable counterparty issues or credit concerns that are likely to affect the applicant's financial stability; and (v) a budget that reflects reasonable assumptions about upfront costs as well as ongoing expenses and revenues.
h. Systems and information technology. The Qualified Issuer applicant must demonstrate that it (as well as its proposed Program Administrator and its proposed Servicer) has, among other things: (i) A strong information technology capacity and the ability to manage loan servicing, administration, management, and document retention; (ii) appropriate office infrastructure and related technology to carry out the CDFI Bond Guarantee Program activities; and (iii) sufficient backup and disaster recovery systems to maintain uninterrupted business operations.
i. Pricing structure. The Qualified Issuer applicant must provide its proposed pricing structure for performing the duties of Qualified Issuer, including the pricing for the roles of Program Administrator and Servicer. Although the pricing structure and fees shall be decided by negotiation between market participants without interference or approval by the CDFI Fund, the CDFI Fund will evaluate whether the Qualified Issuer applicant's proposed pricing structure is feasible to carry out the responsibilities of a Qualified Issuer over the life of the Bond to help ensure sound implementation of the program.
j. Other criteria. The Qualified Issuer applicant must meet such other criteria as may be required by the CDFI Fund, as set forth in the Qualified Issuer Application or required by the CDFI Fund in its sole discretion, for the purposes of evaluating the merits of a Qualified Issuer Application. The CDFI Fund may request an on-site review of Qualified Issuer applicant to confirm materials provided in the written application, as well as to gather additional due diligence information. The on-site reviews are a critical component of the application review process and will generally be conducted for all applicants not regulated by an Appropriate Federal Banking Agency or Appropriate State Agency. The CDFI Fund reserves the right to conduct a site visit of regulated entities, in its sole discretion.
k. Third-party data sources. The CDFI Fund, in its sole discretion, may consider information from third-party sources including, but not limited to, periodicals or publications, publicly available data sources, or subscriptions services for additional information about the Qualified Issuer applicant, the proposed Program Administrator, the proposed Servicer, and each Certified CDFI that is included in the Qualified Issuer Application. Any additional information received from such third- party sources will be reviewed and evaluated through a systematic and formalized process.
D.
E.
A.
1. Guarantee Application.
a. The Guarantee Application is the application document that a Qualified Issuer (in collaboration with the Eligible CDFI(s) that seek to be included in the proposed Bond Issue) must submit to the CDFI Fund in order to apply for a Guarantee. The Qualified Issuer shall provide all required information in its Guarantee Application to establish that it meets all criteria set forth in the Regulations at 12 CFR 1808.501 and this NOGA and can carry out all CDFI Bond Guarantee Program requirements including, but not limited to, information that demonstrates that the Qualified Issuer has the appropriate expertise, capacity, and experience and is qualified to make, administer and service Bond Loans for Eligible Purposes. An Eligible CDFI may be an existing certified or certifiable CDFI (the General Recourse Financial Structure), or the Eligible CDFI may be an Affiliate of a Controlling CDFI(s) that is created for the sole purpose of participation as an Eligible CDFI in the CDFI Fund Bond Guarantee Program (the Alternative Financial Structure; see Section II(B) of this NOGA for Recourse and Collateral Requirements and Section II(A) of this NOGA for certification requirements for certifiable CDFIs and Affiliates of Controlling CDFIs).
b. The Guarantee Application comprises a Capital Distribution Plan and at least one Secondary Capital Distribution Plan, as well as all other requirements set forth in this NOGA or as may be required by the Guarantor and the CDFI Fund in their sole discretion, for the evaluation and selection of Guarantee applicants.
2. Guarantee Application evaluation, general. The Guarantee Application review and evaluation process will be
B.
1. Eligibility; CDFI certification requirements. If approved for a Guarantee, each Eligible CDFI must be a Certified CDFI as of the Bond Issue Date and must maintain its respective CDFI certification throughout the term of the corresponding Bond. For more information on CDFI Certification and the certification of affiliated entities, including the deadlines for submission of certification applications, see part II of this NOGA.
2. Qualified Issuer as Eligible CDFI. A Qualified Issuer may not participate as an Eligible CDFI within its own Bond Issue, but may participate as an Eligible CDFI in a Bond Issue managed by another Qualified Issuer.
3. Attestation by proposed Eligible CDFIs. Each proposed Eligible CDFI must attest in the Guarantee Application that it has designated the Qualified Issuer to act on its behalf and that the information pertaining to the Eligible CDFI in the Guarantee Application is true, accurate and complete. Each proposed Eligible CDFI must also attest in the Guarantee Application that it will use Bond Loan proceeds for Eligible Purposes and that Secondary Loans will be financed or refinanced in accordance with the applicable Secondary Loan Requirements.
C.
D.
1. Substantive review.
a. If the CDFI Fund determines that the Guarantee Application is complete and eligible, the CDFI Fund will undertake a substantive review in accordance with the criteria and procedures described in the Regulations at 12 CFR 1808.501, this NOGA, and the Guarantee Application. The substantive review of the Guarantee Application will include due diligence, underwriting, credit risk review, and Federal credit subsidy calculation, in order to determine the feasibility and risk of the proposed Bond Issue, as well as the strength and capacity of the Qualified Issuer and each proposed Eligible CDFI. Each proposed Eligible CDFI will be evaluated independently of the other proposed Eligible CDFIs within the proposed Bond Issue; however, the Bond Issue must then cumulatively meet all requirements for Guarantee approval. In general, applicants are advised that proposed Bond Issues that include a large number of proposed Eligible CDFIs are likely to substantially increase the review period.
b. As part of the substantive review process, the CDFI Fund may contact the Qualified Issuer (as well as the proposed Eligible CDFIs included in the Guarantee Application) by telephone, email, mail, or through an on-site visit for the sole purpose of obtaining additional, clarifying, confirming, or supplemental application information. The CDFI Fund reserves the right to collect such additional, clarifying, confirming or supplemental information as it deems appropriate. If contacted for additional, clarifying, confirming, or supplemental information, said entities must respond within the time parameters set by the CDFI Fund or the Guarantee Application will be rejected.
2. Guarantee Application criteria.
a. In general, a Guarantee Application will be evaluated based on the strength and feasibility of the proposed Bond Issue, as well as the creditworthiness and performance of the Qualified Issuer and the proposed Eligible CDFIs. Guarantee Applications must demonstrate that each proposed Eligible CDFI has the capacity for its respective Bond Loan to be a secured, general recourse obligation of the proposed Eligible CDFI and to deploy the Bond Loan proceeds within the required disbursement timeframe as described in the Regulations. Unless receiving significant support from a Controlling CDFI, or Credit Enhancements, Eligible CDFIs should not request Bond Loans greater than their current total asset size or which would otherwise significantly impair their net asset or net equity position. In general, an applicant requesting a Bond Loan more than 50% of its total asset size should be prepared to clearly demonstrate that it has a reasonable plan to scale its operations prudently and in a manner that does not impair its net asset or net equity position. Further, an entity with a limited operating history or a history of operating losses is unlikely to meet the strength and feasibility requirements of the CDFI Bond Guarantee Program, unless it receives significant support from a Controlling CDFI, or Credit Enhancements.
b. The Capital Distribution Plan must demonstrate the Qualified Issuer's comprehensive plan for lending, disbursing, servicing and monitoring each Bond Loan in the Bond Issue. It includes, among other information, the following components:
i. Statement of Proposed Sources and Uses of Funds: Pursuant to the requirements set forth in the Regulations at 12 CFR1808.102(bb) and 1808.301, the Qualified Issuer must provide: (A) A description of the overall plan for the Bond Issue; (B) a description of the proposed uses of Bond Proceeds and proposed sources of funds to repay principal and interest on the proposed Bond and Bond Loans; (C) a certification that 100% of the principal amount of the proposed Bond will be used to make Bond Loans for Eligible Purposes on the Bond Issue Date; and (D) description of the extent to which the proposed Bond Loans will serve Low-Income Areas or Underserved Rural Areas;
ii. Bond Issue Qualified Issuer cash flow model: The Qualified Issuer must provide a cash flow model displaying the orderly repayment of the Bond and
iii. Organizational capacity: If not submitted concurrently, the Qualified Issuer must attest that no material changes have occurred since the time that it submitted the Qualified Issuer Application;
iv. Credit Enhancement (if applicable): The Qualified Issuer must provide information about the adequacy of proposed risk mitigation provisions designed to protect the financial interests of the Federal Government, either directly or indirectly through supporting the financial strength of the Bond Issue. This includes, but is not limited to, the amount and quality of any Credit Enhancements, terms and specific conditions such as renewal options, and any limiting conditions or revocability by the provider of the Credit Enhancement. For any third-party providing a Credit Enhancement, the Qualified Issuer must provide the following information on the third-party: Most recent three years of audited financial statements, a brief analysis of the such entity's creditworthiness, and an executed letter of intent from such entity that indicates the terms and conditions of the Credit Enhancement. Any Credit Enhancement must be pledged, as part of the Trust Estate, to the Master Servicer/Trustee for the benefit of the Federal Financing Bank;
v. Proposed Term Sheets: The CDFI Fund website includes template term sheets for General Recourse Structure, the Alternative Financial Structure, and the asset class CDFI to Financing Entity utilizing pooled tertiary loans. For each Eligible CDFI that is part of the proposed Bond Issue, the Qualified Issuer must submit a proposed Term Sheet using the applicable template provided on the CDFI Fund's website. The proposed Term Sheet must clearly state all relevant and critical terms of the proposed Bond Loan including, but not limited to: The Bond Loan Collateral Requirements described in Section II(B) of this NOGA, any requested prepayment provisions, unique conditions precedent, proposed covenants and exact amounts/percentages for determining the Eligible CDFI's ability to meet program requirements, and terms and exact language describing any Credit Enhancements. Terms may be either altered and/or negotiated by the CDFI Fund in its sole discretion, based on the proposed structure in the application, to ensure that adequate protection is in place for the Guarantor;
vi. Secondary Capital Distribution Plan(s): Each proposed Eligible CDFI must provide a comprehensive plan for financing, disbursing, servicing and monitoring Secondary Loans, address how each proposed Secondary Loan will meet Eligible Purposes, and address such other requirements listed below that may be required by the Guarantor and the CDFI Fund. For each proposed Eligible CDFI relying, for CDFI certification purposes, on the financing entity activity of a Controlling CDFI, the Controlling CDFI must describe how the Eligible CDFI and the Controlling CDFI, together, will meet the requirements listed below:
(A) Narrative and Statement of Proposed Sources and Uses of Funds: Each Eligible CDFI will: (1) Provide a description of proposed uses of funds, including the extent to which Bond Loans will serve Low-Income Areas or Underserved Rural Areas, and the extent to which Bond Loan proceeds will be used (i) to make the first monthly installment of a Bond Loan payment, (ii) pay Issuance Fees up to 1% of the Bond Loan, and (iii) finance Loan Loss Reserves related to Secondary Loans; (2) attest that 100% of Bond Loan proceeds designated for Secondary Loans will be used to finance or refinance Secondary Loans that meet Secondary Loan Requirements; (3) describe a plan for financing, disbursing, servicing, and monitoring Secondary Loans; (4) indicate the expected asset classes to which it will lend under the Secondary Loan Requirements; (5) indicate examples of previous lending and years of experience lending to a specific asset class, especially with regards to the number and dollar volume of loans made in the five years prior to application submission to the specific asset classes to which an Eligible CDFI is proposing to lend Bond Loan proceeds; (6) provide a table detailing specific uses and timing of disbursements, including terms and relending plans if applicable; and (7) a community impact analysis, including how the proposed Secondary Loans will address financing needs that the private market is not adequately serving and specific community benefit metrics;
(B) Eligible CDFI cash flow model: Each Eligible CDFI must provide a cash flow model of the proposed Bond Loan which: (1) Matches each Eligible CDFI's portion of the Qualified Issuer's cash flow model; and (2) tracks the flow of funds through the term of the Bond Issue and demonstrates disbursement and repayment of the Bond Loan, Secondary Loans, and any utilization of the Relending Fund, if applicable. Such information must describe: The expected distribution of asset classes to which each Eligible CDFI expects to disburse funds, the proposed disbursement schedule, quarterly or semi-annual amortization schedules, interest-only periods, maturity date of each advance of funds, and the assumed net interest margin on Secondary Loans above the assumed Bond Loan rate;
(C) Organizational capacity: Each Eligible CDFI must provide documentation indicating the ability of the Eligible CDFI to manage its Bond Loan including, but not limited to: (1) Organizational ownership and a chart of affiliates; (2) organizational documents, including policies and procedures related to loan underwriting and asset management; (3) management or operating agreement, if applicable; (4) an analysis by management of its ability to manage the funding, monitoring, and collection of loans being contemplated with the proceeds of the Bond Loan; (5) information about its board of directors; (6) a governance narrative; (7) description of senior management and employee base; (8) independent reports, if available; (9) strategic plan or related progress reports; and (10) a discussion of the management and information systems used by the Eligible CDFI;
(D) Policies and procedures: Each Eligible CDFI must provide relevant policies and procedures including, but not limited to: A copy of the asset-liability matching policy, if applicable; and loan policies and procedures which address topics including, but not limited to: Origination, underwriting, credit approval, interest rates, closing, documentation, asset management, and portfolio monitoring, risk-rating definitions, charge-offs, and loan loss reserve methodology;
(E) Financial statements: Each Eligible CDFI must provide information about the Eligible CDFI's current and future financial position, including but not limited to: (1) Audited financial statements for the prior three (3) most recent Fiscal Years; (2) current year-to-date or interim financial statement for the immediately prior quarter end of the Fiscal Year; (3) a copy of the current
(F) Loan portfolio information: Each Eligible CDFI must provide information including, but not limited to: (1) Loan portfolio quality report; (2) pipeline report; (3) portfolio listing; (4) a description of other loan assets under management; (5) loan products; (6) independent loan review report; (7) impact report case studies; and (8) a loan portfolio by risk rating and loan loss reserves; and
(G) Funding sources and financial activity information: Each Eligible CDFI must provide information including, but not limited to: (1) Current grant information; (2) funding projections; (3) credit enhancements; (4) historical investor renewal rates; (5) covenant compliance; (6) off-balance sheet contingencies; (7) earned revenues; and (8) debt capital statistics.
vii. Assurances and certifications that not less than 100% of the principal amount of Bonds will be used to make Bond Loans for Eligible Purposes beginning on the Bond Issue Date, and that Secondary Loans shall be made as set forth in subsection 1808.307(b); and
viii. Such other information that the Guarantor, the CDFI Fund and/or the Bond Purchaser may deem necessary and appropriate.
c. The CDFI Fund will use the information described in the Capital Distribution Plan and Secondary Capital Distribution Plan(s) to evaluate the feasibility of the proposed Bond Issue, with specific attention paid to each Eligible CDFI's financial strength and organizational capacity. For each proposed Eligible CDFI relying, for CDFI certification purposes, on the financing entity activity of a Controlling CDFI, the CDFI Fund will pay specific attention to the Controlling CDFI's financial strength and organizational capacity as well as the operating agreement between the proposed Eligible CDFI and the Controlling CDFI. All materials provided in the Guarantee Application will be used to evaluate the proposed Bond Issue. In total, there are more than 100 individual criteria or sub-criteria used to evaluate each Eligible CDFI. Specific criteria used to evaluate each Eligible CDFI shall include, but not be limited to, the following criteria below. For each proposed Eligible CDFI relying, for CDFI certification purposes, on the financing entity activity of a Controlling CDFI, the following specific criteria will also be used to evaluate both the proposed Eligible CDFI and the Controlling CDFI:
i. Historical financial ratios: Ratios which together have been shown to be predictive of possible future default will be used as an initial screening tool, including total asset size, net asset or Tier 1 Core Capital ratio, self-sufficiency ratio, non-performing asset ratio, liquidity ratio, reserve over nonperforming assets, and yield cost spread;
ii. Quantitative and qualitative attributes under the “CAMELS” framework: After initial screening, the CDFI Fund will utilize a more detailed analysis under the “CAMELS” framework, including but not limited to:
(A) Capital Adequacy: Attributes such as the debt-to-equity ratio, status, and significance of off-balance sheet liabilities or contingencies, magnitude, and consistency of cash flow performance, exposure to affiliates for financial and operating support, trends in changes to capitalization, and other relevant attributes;
(B) Asset Quality: Attributes such as the charge-off ratio, adequacy of loan loss reserves, sector concentration, borrower concentration, asset composition, security and collateralization of the loan portfolio, trends in changes to asset quality, and other relevant attributes;
(C) Management: Attributes such as documented best practices in governance, strategic planning and board involvement, robust policies and procedures, tenured and experienced management team, organizational stability, infrastructure and information technology systems, and other relevant attributes;
(D) Earnings and Performance: Attributes such as net operating margins, deployment of funds, self-sufficiency, trends in earnings, and other relevant attributes;
(E) Liquidity: Attributes such as unrestricted cash and cash equivalents, ability to access credit facilities, access to grant funding, covenant compliance, affiliate relationships, concentration of funding sources, trends in liquidity, and other relevant attributes;
(F) Sensitivity: The CDFI Fund will stress test each Eligible CDFI's projected financial performance under scenarios that are specific to the unique circumstance and attributes of the organization. Additionally, the CDFI Fund will consider other relevant criteria that have not been adequately captured in the preceding steps as part of the due diligence process. Such criteria may include, but not be limited to, the size and quality of any third-party Credit Enhancements or other forms of credit support.
(G) Overcollateralization: The commitment by an Eligible CDFI to over- collateralize a proposed Bond Loan with excess Secondary Loans is a criterion that may affect the viability of a Guarantee Application by decreasing the estimated net present value of the long-term cost of the Guarantee to the Federal Government, by decreasing the probability of default, and/or increasing the recovery rate in the event of default. An Eligible CDFI committing to overcollateralization may not be required to deposit funds in the Relending Account, subject to the maintenance of certain unique requirements that are detailed in the template Agreement to Guarantee and Bond Loan Agreement.
(H) Credit Enhancements: The provision of third-party Credit Enhancements, including any Credit Enhancement from a Controlling CDFI or any other affiliated entity, is a criterion that may affect the viability of a Guarantee Application by decreasing the estimated net present value of the long-term cost of the Guarantee to the Federal Government. Credit Enhancements are considered in the context of the structure and circumstances of each Guarantee Application.
(I) On-Site Review: The CDFI Fund may request an on-site review of an Eligible CDFI to confirm materials provided in the written application, as well as to gather additional due diligence information. The on-site reviews are a critical component of the application review process and will generally be conducted for all applicants not regulated by an Appropriate Federal Banking Agency or Appropriate State Agency. The CDFI Fund reserves the right to conduct a site visit of regulated entities, in its sole discretion.
(J) Secondary Loan Asset Classes: Eligible CDFIs that propose to use funds for new products or lines of business must demonstrate that they have the organizational capacity to manage such activities in a prudent manner. Failure to demonstrate such organizational capacity may be factored into the consideration of Asset Quality or Management criteria as listed above in this section.
3. Credit subsidy cost. The credit subsidy cost is the net present value of the estimated long- term cost of the Guarantee to the Federal Government as determined under the applicable provisions of the Federal Credit Reform Act of 1990, as amended (FCRA).
E.
1. The Guarantor, in the Guarantor's sole discretion, may approve a Guarantee, after consideration of the recommendation from the CDFI Bond Guarantee Program's Credit Review Board and/or based on the merits of the Guarantee Application. The Guarantor shall approve or deny a Guarantee Application no later than 90 days after the date the Guarantee Application was advanced for substantive review.
2. The Guarantor reserves the right to approve Guarantees, in whole or in part, in response to any, all, or none of the Guarantee Applications submitted in response to this NOGA. The Guarantor also reserves the right to approve any Guarantees in an amount that is less than requested in the corresponding Guarantee Application. Pursuant to the Regulations at 12 CFR 1808.504(c), the Guarantor may limit the number of Guarantees made per year to ensure that a sufficient examination of Guarantee Applications is conducted.
3. The CDFI Fund will notify the Qualified Issuer in writing of the Guarantor's approval or disapproval of a Guarantee Application. Bond Documents and Bond Loan documents must be executed, and Guarantees will be provided, in the order in which Guarantee Applications are approved or by such other criteria that the CDFI Fund may establish, in its sole discretion, and in any event by September 30, 2020.
4. Please note that the most recently dated templates of Bond Documents and Bond Loan documents that are posted on the CDFI Fund's website will not be substantially revised or negotiated prior to closing of the Bond and Bond Loan and issuance of the corresponding Guarantee. If a Qualified Issuer or a proposed Eligible CDFI does not understand the terms and conditions of the Bond Documents or Bond Loan documents (including those listed in Section II.G., above), it should ask questions or seek technical assistance from the CDFI Fund. However, if a Qualified Issuer or a proposed Eligible CDFI disagrees or is uncomfortable with any term/condition, or if legal counsel to either cannot provide a legal opinion in substantially the same form and content of the required legal opinion, it should not apply for a Guarantee.
5. The Guarantee shall not be effective until the Guarantor signs and delivers the Guarantee.
F.
Further, if the Guarantor determines that any portion of the Guarantee Application is incorrect in any material respect, the Guarantor reserves the right, in the Guarantor's sole discretion, to deny the Application.
A.
B.
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D.
Eligible CDFIs must execute Secondary Loan documents (in the form of promissory notes) with Secondary Borrowers as follows: (i) No later than 12 months after the Bond Issue Date, Secondary Loan documents representing at least 50% of the Bond Loan proceeds allocated for Secondary Loans, and (ii) no later than 24 months after the Bond Issue Date, Secondary Loan documents representing 100% of the Bond Loan proceeds allocated for Secondary Loans. In the event that the Eligible CDFI does not comply with the foregoing requirements of clauses (i) or (ii) of this paragraph, the available Bond Loan proceeds at the end of the applicable period shall be reduced by an amount equal to the difference between the amount required by clauses (i) or (ii) for the applicable period minus the amount previously committed to the Secondary Loans in the applicable period. Secondary Loans shall carry loan maturities suitable to the loan purpose and be consistent with loan-to-value requirements set forth in the Secondary Loan Requirements. Secondary Loan maturities shall not exceed the corresponding Bond or Bond Loan maturity date. It is the expectation of the CDFI Fund that interest rates for the Secondary Loans will be reasonable based on the borrower and loan characteristics.
E.
1. The Regulations state that Secondary Loans must be secured by a first lien of the Eligible CDFI on pledged collateral, in accordance with the Regulations (at 12 CFR 1808.307(f)) and within certain parameters. Examples of acceptable forms of collateral may include, but are not limited to: Real property (including land and structures), leasehold mortgages, machinery, equipment and movables, cash and cash equivalents, accounts receivable, letters of credit, inventory, fixtures, contracted revenue streams from non-Federal counterparties, provided the Secondary Borrower pledges all assets, rights and interests necessary to generate such revenue stream, and a Principal Loss Collateral Provision. Intangible assets, such as customer relationships and intellectual property rights, are not acceptable forms of collateral. Loans secured by real property that are still in a construction phase will only be permitted when backed by a letter of credit issued by a bank deemed acceptable by the Bond Guarantee Program, in a format deemed acceptable to the Bond Guarantee Program, that guarantees the full value of the pledged collateral until at minimum completion of the construction and stabilization phases.
2. The Regulations require that Bond Loans must be secured by a first lien on a collateral assignment of Secondary Loans, and further that the Secondary Loans must be secured by a first lien or parity lien on acceptable collateral.
3. Valuation of the collateral pledged by the Secondary Borrower must be based on the Eligible CDFI's credit policy guidelines and must conform to the standards set forth in the Uniform Standards of Professional Appraisal Practice (USPAP) and the Secondary Loan Requirements.
4. Independent third-party appraisals are required for the following collateral: Real estate, leasehold interests, fixtures, machinery and equipment, movables stock valued in excess of $250,000, and contracted revenue stream from non-Federal creditworthy counterparties. Secondary Loan collateral shall be valued using the cost approach, net of depreciation and shall be required for the following: accounts receivable, machinery, equipment and movables, and fixtures.
F.
G.
1. In order to achieve the statutory zero-credit subsidy constraint of the CDFI Bond Guarantee Program and to avoid a call on the Guarantee, Eligible CDFIs are encouraged to include Credit Enhancements and Principal Loss Collateral Provisions structured to protect the financial interests of the Federal Government. Any Credit Enhancement or Principal Loss Collateral Provision must be pledged, as part of the Trust Estate, to the Master Servicer/Trustee for the benefit of the Federal Financing Bank.
2. Credit Enhancements may include, but are not limited to, payment guarantees from third parties or Affiliate(s), non-Federal capital, lines or letters of credit, or other pledges of financial resources that enhance the Eligible CDFI's ability to make timely
3. As distinct from Credit Enhancements, Principal Loss Collateral Provisions may be provided in lieu of pledged collateral and/or in addition to pledged collateral. A Principal Loss Collateral Provision shall be in the form of cash or cash equivalent guarantees from non-Federal capital in amounts necessary to secure the Eligible CDFI's obligations under the Bond Loan after exercising other remedies for default. For example, a Principal Loss Collateral Provision may include a deficiency guarantee whereby another entity assumes liability after other default remedies have been exercised, and covers the deficiency incurred by the creditor. The Principal Loss Collateral Provision shall, at a minimum, provide for the provision of cash or cash equivalents in an amount that is not less than the difference between the value of the collateral and the amount of the accelerated Bond Loan outstanding.
4. In all cases, acceptable Credit Enhancements or Principal Loss Collateral Provisions shall be proffered by creditworthy providers and shall provide information about the adequacy of the facility in protecting the financial interests of the Federal Government, either directly or indirectly through supporting the financial strength of the Bond Issue. The information provided must include the amount and quality of any Credit Enhancements, the financial strength of the provider of the Credit Enhancement, the terms, specific conditions such as renewal options, and any limiting conditions or revocability by the provider of the Credit Enhancement.
5. For Secondary Loans benefitting from a Principal Loss Collateral Provision (
6. If the Principal Loss Collateral Provision is provided by a financial institution that is regulated by an Appropriate Federal Banking Agency or an Appropriate State Agency, the guaranteeing institution must demonstrate performance of financially sound business practices relative to the industry norm for providers of collateral enhancements as evidenced by reports of Appropriate Federal Banking Agencies, Appropriate State Agencies, and auditors, as appropriate.
7. In the event that the Eligible CDFI proposes to use other Federal funds to service Bond Loan debt or as a Credit Enhancement, the CDFI Fund may require, in its sole discretion, that the Eligible CDFI provide written assurance from such other Federal program, in a form that is acceptable to the CDFI Fund and that the CDFI Fund may rely upon, that said use is permissible.
H.
1. Reports.
a. General. As required pursuant to the Regulations at 12 CFR 1808.619, and as set forth in the Bond Documents and the Bond Loan documents, the CDFI Fund will collect information from each Qualified Issuer which may include, but will not be limited to: (i) Quarterly and annual financial reports and data (including an OMB single audit, as applicable) for the purpose of monitoring the financial health, ratios and covenants of Eligible CDFIs that include asset quality (nonperforming assets, loan loss reserves, and net charge-off ratios), liquidity (current ratio, working capital, and operating liquidity ratio), solvency (capital ratio, self-sufficiency, fixed charge, leverage, and debt service coverage ratios); (ii) annual reports as to the compliance of the Qualified Issuer and Eligible CDFIs with the Regulations and specific requirements of the Bond Documents and Bond Loan documents; (iii) Master Servicer/Trustee summary of program accounts and transactions for each Bond Issue; (iv) Secondary Loan certifications describing Eligible CDFI lending, collateral valuation, and eligibility; (v) financial data on Secondary Loans to monitor underlying collateral, gauge overall risk exposure across asset classes, and assess loan performance, quality, and payment history; (vi) annual certifications of compliance with program requirements; (vii) material event disclosures including any reports of Eligible CDFI management and/or organizational changes; (viii) annual updates to the Capital Distribution Plan (as described below); (ix) supplements and/or clarifications to correct reporting errors (as applicable); (x) project level reports to understand overall program impact and the manner in which Bond Proceeds are deployed for Eligible Community or Economic Development Purposes; and (xi) such other information that the CDFI Fund and/or the Bond Purchaser may require, including but not limited to racial and ethnic data showing the extent to which members of minority groups are beneficiaries of the CDFI Bond Guarantee Program, to the extent permissible by law.
b. Additional reporting by Qualified Issuers. A Qualified Issuer receiving a Guarantee shall submit annual updates to the approved Capital Distribution Plan, including an updated Proposed Sources and Uses of Funds for each Eligible CDFI, noting any deviation from the original baseline with regards to both timing and allocation of funding among Secondary Loan asset classes. The Qualified Issuer shall also submit a narrative, no more than five (5) pages in length for each Eligible CDFI, describing the Eligible CDFI's capacity to manage its Bond Loan. The narrative shall address any Notification of Material Events and relevant information concerning the Eligible CDFI's management information systems, personnel, executive leadership or board members, as well as financial capacity. The narrative shall also describe how such changes affect the Eligible CDFI's ability to generate impacts in Low-Income or Underserved Rural Areas.
c. Change of Secondary Loan asset classes. Any Eligible CDFI seeking to expand the allowable Secondary Loan asset classes beyond what was approved by the CDFI Bond Guarantee Program's Credit Review Board or make other deviations that could potentially result in a modification, as that term is defined in OMB Circulars A-11 and A-129, must receive approval from the CDFI Fund before the Eligible CDFI can begin to enact the proposed changes. The CDFI Fund will consider whether the Eligible CDFI possesses or has acquired the appropriate systems, personnel, leadership, and financial capacity to implement the revised Capital Distribution Plan. The CDFI Fund will also consider whether these changes assist the Eligible CDFI in generating impacts in Low-Income or Underserved Rural Areas. Such changes will be reviewed by the CDFI Bond Guarantee Program and presented to the Credit Review Board for approval, and appropriate consultation will be made with OMB to ensure compliance with OMB Circulars A-11 and A-129, prior to notifying the Eligible CDFI if such changes are acceptable under the terms of the Bond Loan Agreement. An Eligible CDFI may request such an update to its Capital Distribution Plan prior to Bond Issue Closing, and thereafter may only request such an update once per the Eligible CDFI's fiscal year.
d. Reporting by Affiliates and Controlling CDFIs. In the case of an Eligible CDFI relying, for CDFI certification purposes, on the financing entity activity of a Controlling CDFI, the CDFI Fund will require that the Affiliate and Controlling CDFI provide certain joint reports, including but not limited
e. Detailed information on specific reporting requirements and the format, frequency, and methods by which this information will be transmitted to the CDFI Fund will be provided to Qualified Issuers, Program Administrators, Servicers, and Eligible CDFIs through the Bond Loan Agreement, correspondence, and webinar trainings, and/or scheduled outreach sessions.
f. Reporting requirements will be enforced through the Agreement to Guarantee and the Bond Loan Agreement, and will contain a valid OMB control number pursuant to the Paperwork Reduction Act, as applicable.
g. Each Qualified Issuer will be responsible for the timely and complete submission of the annual reporting documents, including such information that must be provided by other entities such as Eligible CDFIs, Secondary Borrowers or Credit Enhancement providers. If such other entities are required to provide annual report information or documentation, or other documentation that the CDFI Fund may require, the Qualified Issuer will be responsible for ensuring that the information is submitted timely and complete. Notwithstanding the foregoing, the CDFI Fund reserves the right to contact such entities and require that additional information and documentation be provided directly to the CDFI Fund.
h. Annual Assessments. Each Qualified Issuer and Eligible CDFI will be required to have an independent third-party conduct an Annual Assessment of its Bond Loan portfolio. The Annual Assessment is intended to support the CDFI Fund's annual monitoring of the Bond Loan portfolio and to collect financial health, internal control, investment impact measurement methodology information related to the Eligible CDFIs. This assessment is consistent with the program's requirements for Compliance Management and Monitoring (CMM) and Portfolio Management and Loan Monitoring (PMLM), and will be required pursuant to the Bond Documents and the Bond Loan documents. The assessment will also add to the Department of the Treasury's review and impact analysis on the use of Bond Loan proceeds in underserved communities and support the CDFI Fund in proactively managing portfolio risks and performance. The Annual Assessment criteria for Qualified Issuers and Eligible CDFIs is available on the CDFI Fund's website.
i. The CDFI Fund reserves the right, in its sole discretion, to modify its reporting requirements if it determines it to be appropriate and necessary; however, such reporting requirements will be modified only after notice to Qualified Issuers. Additional information about reporting requirements pursuant to this NOGA, the Bond Documents and the Bond Loan documents will be subject to the Paperwork Reduction Act, as applicable.
2. Accounting.
a. In general, the CDFI Fund will require each Qualified Issuer and Eligible CDFI to account for and track the use of Bond Proceeds and Bond Loan proceeds. This means that for every dollar of Bond Proceeds received from the Bond Purchaser, the Qualified Issuer is required to inform the CDFI Fund of its uses, including Bond Loan proceeds. This will require Qualified Issuers and Eligible CDFIs to establish separate administrative and accounting controls, subject to the applicable OMB Circulars.
b. The CDFI Fund will provide guidance to Qualified Issuers outlining the format and content of the information that is to be provided on an annual basis, outlining and describing how the Bond Proceeds and Bond Loan proceeds were used.
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B.
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The CDFI Fund may conduct webcasts, webinars, or information sessions for organizations that are considering applying to, or are interested in learning about, the CDFI Bond Guarantee Program. The CDFI Fund intends to provide targeted outreach to both Qualified Issuer and Eligible CDFI participants to clarify the roles and requirements under the CDFI Bond Guarantee Program. For further information, or to sign up for alerts, please visit the CDFI Fund's website at
Pub. L. 111-240; 12 U.S.C. 4701,
Department of the Treasury.
Notice and request for comment; reopening of comment period.
On January 17, 2020, the Department of the Treasury (Treasury) published a notice of availability and request for comments regarding an application to Treasury to reduce benefits under the American Federation of Musicians & Employers Pension Fund (Fund), in accordance with the Multiemployer Pension Reform Act of 2014 (MPRA). The purpose of this notice is to reopen the comment period for the Fund's application and provide more time for interested parties to provide comments.
Treasury is reopening the comment period for the notice regarding the Fund entitled “Multiemployer Pension Plan Application to Reduce Benefits Comments,” which was published in the
You may submit comments electronically through the Federal eRulemaking Portal at
Comments may also be mailed to the Department of the Treasury, MPRA Office, 1500 Pennsylvania Avenue NW, Room 1224, Washington, DC 20220, Attn: Danielle Norris. Comments sent via facsimile, telephone, or email will not be accepted.
Please note that only written comments submitted electronically through
For information regarding the application from the Fund, please contact Treasury at (202) 622-1534 (not a toll-free number).
MPRA amended the Internal Revenue Code to permit a multiemployer plan that is projected to have insufficient funds to reduce pension benefits payable to participants and beneficiaries if certain conditions are satisfied. In order to reduce benefits, the plan sponsor is required to submit an application to the Secretary of the Treasury, which must be approved or denied in consultation with the Pension Benefit Guaranty Corporation (PBGC) and the Department of Labor.
On December 30, 2019, the Board of Trustees of the Fund submitted an application for approval to reduce benefits under the plan. As required by MPRA, that application has been published on Treasury's website at
This notice announces the reopening of the comment period on the Fund's application with respect to the notice published on January 17, 2020, until April 20, 2020, in order to give additional time for interested parties to provide comments.
Fish and Wildlife Service, Interior.
Proposed rule; supplemental.
The U.S. Fish and Wildlife Service (Service or we) is proposing to establish the 2020-21 hunting regulations for certain migratory game birds. We annually prescribe frameworks, or outer limits, for dates and times when hunting may occur and the number of birds that may be taken and possessed in hunting seasons. These frameworks are necessary to allow State selections of seasons and limits and to allow harvest at levels compatible with migratory game bird population status and habitat conditions. Migratory game bird hunting seasons provide opportunities for recreation and sustenance and aid Federal, State, and Tribal governments in the management of migratory game birds.
You must submit comments on the proposed migratory bird hunting frameworks by April 20, 2020.
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We will post all comments on
Jerome Ford, U.S. Fish and Wildlife Service, Department of the Interior, (202) 208-1050.
As part of the Department of the Interior's retrospective regulatory review, in 2015 we developed a schedule for migratory game bird hunting regulations that is more efficient and establishes hunting season dates earlier than was possible under the previous process. Under the current process, we develop proposed hunting season frameworks for a given year in the fall of the prior year. We then finalize those frameworks a few months later, thereby enabling the State agencies to select and publish their season dates in early summer. We provided a detailed overview of the current process in the August 3, 2017,
On October 15, 2019, we published a proposal to amend title 50 of the Code of Federal Regulations (CFR) at part 20 (84 FR 55120). The proposal provided a background and overview of the migratory bird hunting regulations process, and addressed the establishment of seasons, limits, and other regulations for hunting migratory game birds under §§ 20.101 through 20.107, 20.109, and 20.110 of subpart K. This document is the second in a series of proposed and final rules for migratory game bird hunting regulations. Major steps in the 2020-21 regulatory cycle relating to open public meetings and
Further, in the October 15, 2019, proposed rule we explained that all sections of subsequent documents outlining hunting frameworks and guidelines were organized under numbered headings. Those headings are:
This and subsequent documents will refer only to numbered items requiring attention. We will omit those items not requiring attention, and remaining numbered items may be discontinuous and appear incomplete.
We provided the meeting dates and locations for the Service Regulations Committee (SRC) and Flyway Council meetings on Flyway calendars posted on our website at
This document deals specifically with proposed frameworks for the migratory bird hunting regulations. It will lead to final frameworks from which States may select season dates, shooting hours, areas, and limits. We have considered all pertinent comments received through November 2019, which includes comments submitted in response to our October 15 proposed rulemaking document and comments from the October SRC meeting. In addition, new proposals for certain regulations are provided for public comment. The comment period is specified above under
Each year we publish reports that provide detailed information on the status and harvest of certain migratory gamebird species. These reports are available at the address indicated under
We used the following annual reports published in August 2019 in the development of proposed frameworks for the migratory bird hunting regulations: Adaptive Harvest Management, 2020 Hunting Season; American Woodcock Population Status, 2019; Band-tailed Pigeon Population Status, 2019; Migratory Bird Hunting Activity and Harvest During the 2017-18 and 2018-19 Hunting Seasons; Mourning Dove Population Status, 2019; Status and Harvests of Sandhill Cranes, Mid-continent, Rocky Mountain, Lower Colorado River Valley and Eastern Populations, 2019; and Waterfowl Population Status, 2019.
Our long-term objectives continue to include providing opportunities to harvest portions of certain migratory game bird populations and to limit harvests to levels compatible with each population's ability to maintain healthy, viable numbers. Having taken into account the zones of temperature and the distribution, abundance, economic value, breeding habits, and times and lines of flight of migratory birds, we believe that the proposed hunting seasons provided for herein are compatible with the current status of migratory bird populations and long-term population goals. Additionally, we are obligated to, and do, give serious consideration to all information received during the public comment period.
The preliminary proposed rulemaking, which appeared in the October 15, 2019,
We received recommendations from all four Flyway Councils. Some recommendations supported continuation of last year's frameworks. Due to the comprehensive nature of the annual review of the frameworks performed by the Councils, support for continuation of last year's frameworks is assumed for items for which no recommendations were received. Council recommendations for changes in the frameworks are summarized below. As explained earlier in this document, we have included only the numbered items pertaining to issues for which we received recommendations. Consequently, the issues do not follow in successive numerical order.
We seek additional information and comments on the recommendations in this supplemental proposed rule. New proposals and modifications to previously described proposals are discussed below. Wherever possible, they are discussed under headings corresponding to the numbered items in the October 15, 2019, proposed rule.
Regarding law enforcement, this rule proposes frameworks, or outside limits, for migratory bird hunting. States then select hunting seasons within these outside limits to allow harvest at levels compatible with migratory bird population status and habitat conditions. States subsequently establish regulations consistent with these season selections. Enforcement of migratory bird hunting regulations is a shared responsibility between State and Federal Government agencies, and penalties for violations of these regulations are established under separate State and Federal rule making processes. The Service's Division of Migratory Bird Management discusses regulatory issues with law enforcement personnel to ensure that proposed regulations are enforceable.
The Mississippi and Central Flyway Councils further recommended several changes to the AHM decision framework for mid-continent mallards beginning with the 2021-2022 (next) season. Specifically, the Mississippi Flyway Council made the following recommendations:
(1) Continue to base the annual regulatory decision on current mallard breeding population estimates and spring pond counts in central North America (Federal Waterfowl Breeding Population and Habitat Survey [WBPHS] strata 13-18, 20-50, and 75-77), and in Michigan, Minnesota, and Wisconsin (State surveys).
(2) Remove the North American Waterfowl Management Plan (NAWMP) mallard population goal from the AHM objective function.
(3) Replace the current four discrete models with a model parameterization based on the estimation results from an annually updated integrated population model.
(4) For the three AHM regulatory open-season alternatives, provide a duck hunting season framework start date of the Saturday nearest September 24 and an end date of 31 January.
(5) Allow no other changes from current AHM regulatory alternatives until additional work on revisions to other species' strategies are completed.
(6) Allow no changes to current bag limits or harvest strategies for duck species other than mallards until additional work on revisions to other species' strategies are completed.
The Central Flyway Council recommendations were consistent with Mississippi Flyway Council recommendations 1-4 and 6, but the Central Flyway Council also recommended that the bag limit for male mallards in the moderate and
For the 2020-21 hunting season, we will continue to use independent optimizations to determine the appropriate regulatory alternative for mallard stocks in the Mississippi, Central, and Pacific Flyways and for eastern waterfowl in the Atlantic Flyway. This means that we will develop regulations for mid-continent mallards, western mallards, and eastern waterfowl independently based on the breeding stock that contributes primarily to each Flyway. We detailed implementation of AHM protocols for mid-continent and western mallards in the July 24, 2008,
Regarding the Mississippi and Central Flyway Councils' recommendations for changes to the mid-continent mallard AHM protocol for next season, the Service has used an AHM protocol since 1995 to determine appropriate hunting season regulations for mid-continent mallards. The protocol includes (1) an objective function that devalues harvest if predicted population size of mid-continent mallards is below the population goal described in the NAWMP; (2) a set of four discrete models that incorporates the effects of harvest and mallard density on population demographics; and (3) a set of four regulatory alternatives. During the past five years, the Service and the Mississippi and Central Flyway Councils have undertaken a revision process to examine both the objectives of harvest management for the mid-continent mallard population, and the appropriateness of the models used to estimate changes in their demographics. As a result of this review, the two Flyway Councils have recommended changes to the mid-continent mallard AHM protocol.
We agree with the Mississippi and Central Flyway Councils' recommendations for changes to the mid-continent mallard AHM protocol beginning with the 2021-22 season where the recommendations from the two Councils are in agreement (see B. Regulatory Alternatives, below, for more discussion on Council recommended changes to regulatory alternatives). The two Councils' recommendations differed in mallard daily bag limits. Consistent with past issues where Councils that share a migratory bird population have differing recommendations, the Service will not choose one Council's recommendation over another. Rather, the two Councils should forward a consensus recommendation that either (1) adopts the Central Flyway Council recommendation for mallard bag limits; (2) adopts the Mississippi Flyway Council recommendation for mallard bag limits (status quo); or (3) endorses each other's recommendation and accepts differences in the regulatory alternatives across flyways. Since such an agreement between the flyways has not yet been reached, the Service supports mallard bag limits for the 2021-22 season that are the same as those from the 2020-21 season where the two Councils were last in agreement (
For the Atlantic Flyway, we set duck-hunting regulations based on the status and demographics of a suite of four duck species (eastern waterfowl) in eastern Canada and the Atlantic Flyway States: green-winged teal, common goldeneye, ring-necked duck, and wood duck. For purposes of the assessment, eastern waterfowl stocks are those breeding in eastern Canada and Maine (Federal WBPHS fixed-wing surveys in strata 51-53, 56, and 62-70, and helicopter plot surveys in strata 51-52, 63-64, 66-68, and 70-72) and in Atlantic Flyway States from New Hampshire south to Virginia (Atlantic Flyway Breeding Waterfowl Survey, AFBWS). Breeding population size estimates for green-winged teal, ring-necked ducks, and goldeneyes are derived annually by integrating fixed-wing and helicopter survey data from eastern Canada and Maine (WBPHS strata 51-53, 56, and 62-72). Counts of green-winged teal, ring-necked ducks, and goldeneyes in the AFBWS are negligible and therefore excluded from population estimates for those species. Breeding population size estimates for wood ducks in the Atlantic Flyway (Maine south to Florida) are estimated by integrating data from the AFBWS and the North American Breeding Bird Survey. Counts of wood ducks from the WBPHS are negligible and therefore excluded from population estimates.
For the 2020-21 hunting season, we evaluated alternative harvest regulations for eastern waterfowl using: (1) A management objective of 98 percent of maximum long-term sustainable harvest for eastern waterfowl; (2) the 2020-21 regulatory alternatives; and (3) current stock-specific population models and associated weights. Based on the liberal regulatory alternative selected for the 2019-20 duck hunting season, the 2019 survey estimates of 0.30 million green-winged teal, 1.02 million wood ducks, 0.69 million ring-necked ducks, and 0.52 million goldeneyes, the optimal regulation for the Atlantic Flyway is the liberal alternative. Therefore, we concur with the recommendation of the Atlantic Flyway Council regarding selection of the liberal regulatory alternative as described in the October 15, 2019, proposed rule for the 2020-21 season.
The mallard bag limit in the Atlantic Flyway is based on a separate assessment of the harvest potential of eastern mallards (see xi. Other, below, for further discussion on the mallard bag limit in the Atlantic Flyway).
For the Mississippi and Central Flyways, we set duck-hunting regulations based on the status and demographics of mid-continent mallards and habitat conditions (pond numbers in Prairie Canada). For purposes of the assessment, mid-continent mallards are those breeding in central North America (Federal WBPHS strata 13-18, 20-50, and 75-77), and in Michigan, Minnesota, and Wisconsin (State surveys).
For the 2020-21 hunting season, we evaluated alternative harvest regulations
For the Pacific Flyway, we set duck-hunting regulations based on the status and demographics of western mallards. For purposes of the assessment, western mallards consist of two substocks and are those breeding in Alaska and Yukon Territory (Federal WBPHS strata 1-12) and those breeding in the southern Pacific Flyway including California, Oregon, Washington, and British Columbia (State and Provincial surveys) combined.
For the 2020-21 hunting season, we evaluated alternative harvest regulations for western mallards using: (1) A management objective of maximum long-term sustainable harvest; (2) the 2020-21 regulatory alternatives; and (3) the current population model. Based on a liberal regulatory alternative selected for the 2019-20 hunting season, the 2019 survey estimates of 0.89 million western mallards in Alaska and the Yukon Territory (0.36 million) and the southern Pacific Flyway (0.52 million), the optimal regulation for the Pacific Flyway is the liberal alternative. Therefore, we concur with the recommendation of the Pacific Flyway Council regarding selection of the liberal regulatory alternative as described in the October 15, 2019, proposed rule for the 2020-21 season.
We also agree with the Mississippi and Central Flyway Councils' recommendations for opening and closing dates for duck season frameworks beginning with the 2021-22 season, which are slightly different from what the Service identified in the October 15, 2019, proposed rule (84 FR 55128). The John D. Dingell, Jr. Conservation, Management, and Recreation Act of 2019 (Pub. L. 116-9) amended the Migratory Bird Treaty Act to establish that the closing framework date for duck seasons will be January 31, unless a flyway chooses an earlier closing date. The recommendations to change the opening framework date represent a one-week earlier opening in the restrictive regulatory alternative for the Mississippi and Central Flyways, but no changes to the moderate or liberal alternatives. We expect this change to have a negligible impact on duck harvests, and note that changes in season lengths and bag limits are still available to effect changes in duck harvests and will ensure long-term conservation of duck populations.
Zones and split seasons are “special regulation” designed to distribute hunting opportunities and harvests according to temporal, geographic, and demographic variability in waterfowl and other migratory game bird populations. For ducks, States have been allowed the option of dividing their allotted hunting days into two (or in some cases three) segments (splits) to take advantage of species-specific peaks of abundance or to satisfy hunters in different areas who want to hunt during the peak of waterfowl abundance in their area. However, the split-season option does not fully satisfy many States who wish to provide a more equitable distribution of harvest opportunities. Therefore, we also have allowed the establishment of independent seasons in up to four zones within States for the purpose of providing more equitable distribution of harvest opportunity for hunters throughout the State.
In 1978, we prepared an environmental assessment (EA) on the use of zones to set duck hunting regulations. A primary tenet of the 1978 EA was that zoning would be used to provide equitable distribution of duck hunting opportunities within a State or region. The intent was not to increase total annual waterfowl harvest in the zoned areas; target harvest levels were to be adjusted downward if they exceeded traditional levels as a result of zoning. Subsequent to the 1978 EA, we conducted a review of the use of zones and split seasons in 1990. The ability to detect the impacts of zones and splits use on waterfowl demographics and harvest was poor because of the absence of adequate study designs and experimental controls, limitations in monitoring capacities, imprecise parameter estimates, and low power to detect changes in parameter estimates. Substantial concern remained about the unknown consequences of zones and split seasons on duck populations and harvest redistribution among states and flyways, potential reduced effectiveness of regulations (season length and bag limit) to reduce duck harvest if needed, and the administrative burden associated with changing regulations annually. Consequently, we established guidelines to provide a framework for controlling the proliferation of zones and split seasons. The guidelines identified a limited number of zone and split-season configurations that could be used for duck hunting and restricted the frequency of changes in State selection among these configurations to open seasons at the beginning of five-year intervals. The first open season was in 1991, with subsequent open seasons in 1996, 2001, 2006, 2011-2012, and 2016-2017. In 2011, we prepared a new EA analyzing proposed changes to the guidelines for zones and split seasons. Revised guidelines were finalized in 2011 (76 FR 53536; August 26, 2011).
We discussed and presented guidelines for duck zones and split seasons during 2021-25 seasons in the October 15, 2019, proposed rule. We also stated that for those States wishing to change zone and split-season configurations in time for the 2021-25 seasons, we would need to receive configuration selections and zone descriptions by May 1, 2020.
We do not support the recommendations of the Central and Pacific Flyway Councils to add additional configurations including one zone with discontinuous boundaries or three zones with up to three season segments per zone. We remain concerned about the proliferation of zones, impacts to harvest, and potential confounding of these additional zone and split-season configurations with results from the Central Flyway Council's proposed two-tier license experiment. We need to better understand how additional zone and split-season configurations might influence hunter recruitment, retention, and reactivation (R3) efforts, and whether additional options run counter to the desire to simplify regulations. Therefore, we are supportive of additional discussions at the spring 2020 SRC meetings to help us better understand these additional options and how they can help us meet our mutual objectives while addressing R3 and waterfowl population concerns.
Finally, we will extend the deadline for States to select their zone and split-season configurations and to define potential new zone boundaries for the 2021-25 seasons to July 1, 2020, but we encourage States to submit their selections and zone boundaries as soon as possible.
For the 2021-25 seasons, the guidelines for duck zones and split seasons are as follows:
The following guidelines for zones and split seasons apply only for the regular duck season:
(1) A zone is a geographic area or portion of a State, with a contiguous boundary, for which independent dates may be selected for the regular duck season.
(2) Consideration of changes for management-unit boundaries is not subject to the guidelines and provisions governing the use of zones and split seasons for ducks.
(3) Only minor (less than a county in size) boundary changes will be allowed for any grandfathered arrangement, and changes are limited to the open season.
(4) Once a zone and split-season configuration is selected during an open season, it must remain in place for the following five years.
Any State may continue their zone and split-season configuration used in the previous five-year period. If changes are made, the zone and split-season configuration must conform to one of the following five options:
(1) One zone (same as no zones) with up to three season segments;
(2) Two zones with up to two season segments in each zone;
(3) Two zones with up to three season segments in each zone;
(4) Three zones with up to two season segments in each zone; or
(5) Four zones with a continuous season (
Because this is a new configuration, States that select the configuration with two zones and three season segments must conduct an evaluation of impacts to hunter dynamics (
When we first implemented the zone and split-season guidelines in 1991, several States had completed experiments with zone and split-season arrangements different from our original options. We offered those States a one-time opportunity to continue (“grandfather”) those arrangements, with the stipulation that only minor changes could be made to zone boundaries. If any of those States now wish to change their zone and split arrangement:
(1) The new arrangement must conform to one of the five options identified above; and
(2) The State cannot go back to the grandfathered arrangement that it previously had in place.
For the States that have a recognized management unit (Columbia Basin Management Unit in the Pacific Flyway, High Plains Management Unit in the Central Flyway) and include a non-management unit portion, an independent 2-segment duck season with no zones can be selected for the management unit. The remainder of the State in the non-management unit portion can be zoned and have split seasons according to existing guidelines. In the Central Flyway, additional duck season days afforded to the management unit must occur on or after the Saturday nearest December 10.
For the 2020-21 hunting season, we evaluated country-specific alternative harvest regulations using: (1) A management objective of 98 percent of maximum long-term sustainable harvest; (2) country-specific regulatory alternatives; and (3) current population models and associated weights. Based on the 2019 survey estimates of 0.56 million breeding black ducks and 0.36 million breeding mallards (Federal WBPHS strata 51, 52, 63, 64, 66, 67, 68, 70, 71, and 72; core survey area), the optimal regulation for the Atlantic and Mississippi Flyways is the moderate alternative (and the liberal alternative in Canada). Therefore, we concur with the recommendations of the Atlantic and Mississippi Flyway Councils regarding selection of the moderate regulatory alternative for the 2020-21 season.
For the 2020-21 hunting season, we evaluated alternative harvest regulations for pintails using: (1) A management objective of maximum long-term sustainable harvest, including a closed-season constraint of 1.75 million birds; (2) the regulatory alternatives; and (3) current population models and associated weights. Based on a liberal regulatory alternative with a 1-bird daily bag limit for the 2019-20 season, and the 2019 survey estimates of 2.27 million pintails observed at a mean latitude of 54.4 degrees (Federal WBPHS traditional survey area, strata 1-18, 20-50, and 75-77), the optimal regulation for all four Flyways is the liberal alternative. Therefore, we concur with the recommendations of the four Flyway Councils regarding selection of the liberal regulatory alternative for the 2020-21 season.
For the 2020-21 hunting season, we evaluated alternative harvest regulations for scaup using: (1) A management objective of 95 percent of maximum sustainable harvest; (2) the regulatory alternatives; and (3) the current population model. Based on a moderate regulatory alternative for the 2019-20 season, and the 2019 survey results of 3.59 million scaup (Federal WBPHS traditional survey area, strata 1-18, 20-50, and 75-77), the optimal regulation for all four Flyways is the restrictive alternative. Therefore, we concur with the recommendations of the four Flyway Councils regarding selection of the restrictive alternative for the 2020-21 season.
Using contemporary data and assuming a management objective of maximum long-term sustainable harvest, the PTL analysis estimated an allowable kill rate of 0.194-0.198. The expected kill rate for eastern mallards under a 60-day season and a 2-mallard daily bag limit in the U.S. portion of the Atlantic Flyway was 0.193 (SE = 0.016), which is slightly below (but not significantly different from) the point estimate of allowable kill at maximum long-term sustainable harvest. This indicates that a 2-bird daily bag limit is sustainable at this time.
Regarding the Central Flyway Council's recommendation for a two-tier license system, the Service notes that a similar recommendation was first presented to the SRC by the Council in 2012, and was debated by the Service at that time. In 2015, after several years of discussion with the Council, the SRC concluded that, although they saw some merit in the proposal, the SRC did not believe sufficient evidence was presented showing that duck identification was a significant barrier to waterfowl recruitment and retention. Thus, the SRC did not support the proposal at that time, but stated that they would reconsider their decision if evidence showing that duck identification was a significant barrier to participation became available.
Since 2015, several surveys have been conducted which included questions asking respondents whether duck identification might deter them from hunting waterfowl. Results from some surveys suggest that may be the case, addressing at least in part the concerns the SRC had identified. However, the Service also recognizes that this proposal represents a significant change to the way it has set regulations since the early 1900s, and that a change of that magnitude requires significant input, planning, and documentation to meet legal concerns and ensure that reliable information results from the study to assist decision makers in the future.
Therefore, the Service intends to approve a limited two-tier licensing system in selected States to assess impacts to hunters and duck harvests, but not during the 2020-21 season as proposed in the Central Flyway Council's recommendation. Rather, the Service tasks Division of Migratory Bird Management staff to work with the Flyway Councils to develop a team to address the components needed in an evaluation, and to have a draft evaluation plan that is supported by both the Division of Migratory Bird Management and the Flyway Councils ready for review prior to the spring 2020 SRC meeting. The Service believes that completing NEPA compliance, developing shared objectives, identifying appropriate metrics for evaluation, potentially modifying monitoring efforts, and addressing law enforcement concerns are important elements to consider before implementing a limited two-tier licensing system for evaluation. The Service wants this work completed in time to implement the limited two-tier licensing system for the 2021-22 hunting season. Over the last two years, the Service has completed extensive work with our State partners reviewing hunting and fishing regulations on Refuge lands. Our commitment is for the Service to continue to explore opportunities to enhance the waterfowl hunting experience for the American public.
The Pacific Flyway Council recommended a framework closing date of January 31 in places were the closing date is currently the last Sunday in January. The Council also recommended that the 2020-21 brant season frameworks be determined based on the harvest strategy in the Council's management plan for the Pacific population of brant pending results of the 2020 Winter Brant Survey (WBS). If results of the 2020 WBS are not available, results of the most recent WBS should be used.
Under the current regulatory schedule, neither the expected 2020 brant production information (available spring) nor the 2020 MWS count (available January) is yet available. However, the 2020 MWS will be completed and winter brant data will be available by the expected publication of the final frameworks. Therefore, in the September 24, 2015,
• If the MWS count is <100,000 Atlantic brant, the season would be closed.
• If the MWS count is between 100,000 and 115,000 brant, States could select a 30-day season with a 1-bird daily bag limit.
• If the MWS count is between 115,000 and 130,000 brant, States could select a 30-day season with a 2-bird daily bag limit.
• If the MWS count is between 130,000 and 150,000 brant, States could select a 50-day season with a 2-bird daily bag limit.
• If the MWS count is between 150,000 and 200,000 brant, States could select a 60-day season with a 2-bird daily bag limit.
• If the MWS count is >200,000 brant, States could select a 60-day season with a 3-bird daily bag limit.
Under all the above open-season alternatives, seasons would be between the Saturday nearest September 24 and January 31. Further, States could split their seasons into two segments.
When we acquire the 2020 MWS brant survey results, we will select the appropriate Atlantic brant hunting season for 2020-21 from the above Atlantic brant harvest strategy and publish the result in the final frameworks rule.
We agree with the Pacific Flyway Council's recommendation for a framework closing date of January 31 in places where the closing date is currently the last Sunday in January for brant in the Pacific Flyway. The brant season framework dates traditionally have coincided with the duck, coot, and merganser season framework dates except where there are earlier brant season framework closing date restrictions. We earlier discussed under 1. Ducks, B. Regulatory Alternatives that last year we extended the duck, coot, and merganser season framework closing date from the last Sunday in January to January 31 across all four Flyways as directed by the John D. Dingell, Jr. Conservation, Management, and Recreation Act, signed into law on March 12, 2019 (Pub. L. 116-9). Therefore, we are supportive of adjusting the general brant season framework closing date to again coincide with the duck, coot, and merganser season framework closing date, and expect this to have negligible impact to Pacific brant population status.
We also agree with the Pacific Flyway Council's recommendation that the 2020-21 Pacific brant season frameworks be determined by the harvest strategy in the Council's management plan for the Pacific population of brant pending results of the 2020 WBS. Similar to the case for Atlantic brant, the harvest strategy used to determine the Pacific brant season frameworks does not fit well within the current regulatory process. In developing the annual proposed frameworks for Pacific brant, the Pacific Flyway Council and the Service use the three-year average number of brant counted during the WBS in the Pacific Flyway to determine annual allowable season length and daily bag limits. The WBS is conducted each January, which is after the date that proposed frameworks are formulated in the regulatory process. However, the data are typically available by the expected publication of final frameworks. When we acquire the current survey data, we will select the appropriate frameworks for the 2020-21 Pacific brant season according to the harvest strategy in the Pacific Flyway Council's management plan for Pacific brant and publish the result in the final frameworks rule. The current harvest strategy for Pacific brant is as follows:
• If the WBS index is <102,000 brant, then the brant season is closed, and the season may not reopen until the 3-year average WBS index exceeds 112,000 brant.
• If the WBS index is between 102,000 and 122,000 brant, then Alaska may select a 51-day season with a 2-bird daily bag limit, and California, Oregon, and Washington may select a 16-day season with a 2-bird daily bag limit.
• If the WBS index is between 122,001 and 147,000 brant, then Alaska may select a 107-day season with a 2-bird daily bag limit, and California, Oregon, and Washington may select a 27-day season with a 2-brant daily bag limit.
• If the WBS index is greater than 147,000 brant, then Alaska may select a 107-day season with a 4-bird daily bag limit, and California, Oregon, and Washington may select a 37-day season with a 2-bird daily bag limit.
Under all the above open-season alternatives, the framework outside season dates are September 1 through January 26 in Alaska, Saturday closest to September 24 through December 15 in California and Oregon, and Saturday closest to September 24 through January 31 in Washington.
We first approved a hunting season for the Eastern Population (EP) of tundra swans in the early 1980s, and gradually expanded opportunities to include the States of Montana, North Dakota, North Carolina, South Dakota, and Virginia by the late 1980s. Recently, we also allowed Delaware to initiate an experimental hunting season on these birds. Harvest of EP tundra swans is guided by a cooperative management plan, which specifies a population objective and harvest levels designed to maintain population abundance near that objective. In recent years, some Interior Population (IP) trumpeter swans have been present during fall and winter in States where EP tundra swan hunting is allowed. As a result of restoration efforts and natural population growth, the IP has grown from 43 adult and subadult birds in 1968 to over 27,000 in 2015. Given the growth and range expansion that has occurred in the IP, it is likely that migrating and wintering trumpeter swan numbers will increase in the Atlantic, Mississippi, and Central Flyways. Tundra and trumpeter swans are very similar in appearance, particularly at a distance. As the number and range of trumpeter swans continue to increase during fall and winter in States where tundra swan hunting is allowed, the risk of accidental harvest of trumpeter swans by hunters will increase. Thus, there is a need to address the potential for misidentification and accidental harvest of trumpeter swans that may occur during existing tundra swan seasons.
To address this issue, the Service reviewed information and drafted an EA to determine whether harvest of IP trumpeter swans during current EP tundra swan hunting seasons could be permitted while sustaining IP trumpeter
(1) Hunting area may include the four most northwestern counties (Benewah, Bonner, Boundary, and Kootenai);
(2) Not more than 50 hunting permits may be issued;
(3) Only 1 permit may be issued per hunter; and
(4) All hunters that harvest a swan must complete and submit a harvest report with the bill measurement and color information from the harvested swan within 72 hours of harvest for species determination.
We also agree with the Pacific Flyway Council's recommendation that the Pacific Flyway swan season framework allow the season to be split into two segments. This is a minor adjustment to realign the swan season framework in the Pacific Flyway with changes to the duck, coot, merganser, and goose season frameworks that have occurred since 1995 when the Pacific Flyway swan season framework was established. This will allow States to simplify their waterfowl seasons by having season dates for ducks, coots, mergansers, geese, and swans coincide. Swan hunting will continue to be regulated primarily by the number of swan hunting permits a State may issue each year, which is unchanged. Allowing a split in the season is expected to have negligible impact to tundra and trumpeter swan populations in the Pacific Flyway.
We also agree with the Pacific Flyway Council's recommendation to allow limited take of swans in northern Idaho during the fall-winter general hunting season for migratory birds. This effectively expands the operational swan hunting season framework in the Pacific Flyway that includes parts of Montana, Nevada, and Utah to also include the four northwestern-most counties in Idaho (Benewah, Bonner, Boundary, and Kootenai). The purpose is to provide additional hunting opportunity in Idaho for swans that have met population goals.
The Service authorized an experimental general swan hunting season (hereafter swan season) within the Pacific Flyway south of Alaska (parts of Montana, Utah, and Nevada) in 1995, which became operational in 2003. The Service addressed impacts of the swan season in a sequence of National Environmental Policy Act (NEPA) environmental assessments and findings of no significant impact (1995, 2000, 2001, 2003). Idaho did not express interest in a swan season at that time.
The proposed swan season in Idaho is consistent with: (1) Earlier NEPA documents establishing the swan season in the Pacific Flyway as operational, (2) applicable hunting regulations in title 50 of the Code of Federal Regulations, part 20, and (3) the Council management plans for tundra and trumpeter swans. The proposed swan season framework in Idaho would be experimental for a period of at least three years where no framework changes could occur unless restrictions were necessary. After that period, the framework could become operational upon approval by the Council and Service.
Both the Western Population (WP) of tundra swans and Rocky Mountain Population (RMP) of trumpeter swans are subjected to harvest during the swan hunting season in the Pacific Flyway. Regarding WP tundra swans, the recent 3-year (2017-2019) mean abundance index was 127,556 (95% CI = 83,027-172,086) swans, and exceeded the Pacific Flyway Council's population objective of 60,000 swans. Regarding RMP trumpeter swans, the recent (2015) count was 11,271 white trumpeter swans (
The experimental swan season in Idaho will be limited to ≤50 permits per year and is expected to result in a small increase in total Pacific Flyway swan harvest (≤23 tundra swans and <1 trumpeter swan per year on average), but have negligible impact to habitat and overall tundra and trumpeter swan population status. The experimental season is expected to have positive impacts on the socioeconomic environment in localized areas where swans occur and are hunted, and is not expected to have any significant impacts on other wildlife species and their habitats, including endangered and threatened species.
We prepared an EA on the proposed swan season in northern Idaho. A copy of the EA and specifics of the two alternatives we analyzed can be found at either
We also agree with the recommendations of the Central and Pacific Flyway Councils to change the status of the season in Estancia Valley, New Mexico, from experimental to operational. The season is consistent with the requirements in the Central and Pacific Flyway Councils' RMP crane management plan. The experimental season required monitoring the level and racial composition of the harvest and to assign greater sandhill cranes harvested during this season to the RMP cranes quota. From 2001 to 2019, harvest in the Estancia Valley season was monitored via mandatory hunter check stations. In recent years, approximately one to two percent of the crane harvest comprised greater sandhill cranes (1-2 birds out of a harvest of approximately 100 birds in the Estancia Valley). New Mexico will continue to monitor the level and racial composition of the harvest in the Estancia Valley season using bill cards and assign greater cranes harvest to the RMP crane quota.
Finally, we also agree with the Central and Pacific Flyway Councils' recommendations to determine allowable harvest of RMP cranes using the formula in the Pacific and Central Flyway Councils' management plan for RMP cranes pending results of the fall 2019 abundance and recruitment surveys.
Regarding RMP crane harvest, as we discussed in the March 28, 2016,
The Mississippi and Central Flyway Councils recommended adoption of the standard regulatory alternative, which consists of a 90-day season and 15-bird daily bag limit for States within the Central Management Unit.
The Pacific Flyway Council recommended adoption of the standard regulatory alternative, which consists of a 60-day season and 15-bird daily bag limit for States in the Western Management Unit (WMU). The Council also recommended allowing States in the WMU to select seasons in one or two zones with up to two segments per zone.
We also agree with the Pacific Flyway Council's recommendation to allow States in the WMU to select seasons in one or two zones with up to two segments per zone.
In 2004, we recognized the need to work with the States to review our current policy regarding zoning for dove hunting (69 FR 52970; August 30, 2004). We asked the Flyway Councils and Mourning Dove Management Unit Technical Committees to review the current policies regarding the use of zones and split seasons for dove hunting, with a view toward establishing guidelines for the use of these harvest-management tools, as has been done for ducks. Items considered included the number of zone and split-season configurations that each State may choose among, the frequency with which each State may change their configuration selection, and the need for a restricted framework opening date in south zones. In 2006, we adopted a set of guidelines for dove zones and split seasons applicable in the Eastern and Central Mourning Dove Management Units based on recommendations of the Atlantic, Mississippi, and Central Flyway Councils for use beginning in the 2007-08 season and conforming to those fixed five-year periods used for ducks,
The season length in the WMU was expanded to 60 days beginning with the 2014 hunting season. The Pacific Flyway Council is now requesting the same flexibility for zones and split seasons we have afforded to other MUs, with the exception that the WMU would be allowed only two season segments in one or both zones rather than three. Thus, we are supportive of extending the guidelines for dove zones and split seasons to the WMU, with the exception that seasons may be split into no more than two segments. Any State's zone and split-season configuration also must conform to those fixed five-year periods used for duck and dove guidelines for zones and split seasons,
For the 2021-25 seasons, the guidelines for dove zones and split seasons are as follows:
(1) A zone is a geographic area or portion of a State, with a contiguous boundary, for which independent seasons may be selected for dove hunting.
(2) Each State may select a zone and split-season configuration during an open season. The configuration must remain in place for the following five years except that each State may make a one-time change and revert to their previous zone and split-season configuration in any year of the five-year period. Formal approval will not be required, but the State must notify the Service before making the change.
(3) Zoning periods for dove hunting will conform to those years used for ducks,
(4) The zone and split-season configuration consists of two zones with the option for three-segment seasons in one or both zones, except in the WMU where the season in one or both zones may be split into two segments. As a grandfathered arrangement, Texas will have three zones with the option for two-segment seasons in one, two, or all three zones.
(5) States that do not wish to zone for dove hunting may split their seasons into three segments.
For the 2021-25 period, any State may continue the configuration used in 2016-20. If changes are made, the zone and split-season configuration must conform to one of the configurations listed above. If Texas uses a new configuration for the entirety of the five-year period, it cannot go back to the grandfathered arrangement that it previously had in place.
The Department of the Interior's policy is, whenever possible, to afford the public an opportunity to participate in the rulemaking process. Accordingly, we invite interested persons to submit written comments, suggestions, or recommendations regarding the proposed regulations. Before promulgating final migratory game bird hunting regulations, we will consider all comments we receive. These comments, and any additional information we receive, may lead to final regulations that differ from these proposals.
You may submit your comments and materials concerning this proposed rule by one of the methods listed in
We may post all comments in their entirety—including your personal identifying information—on
Based on our most current data, we are affirming our required determinations made in the October 15 proposed rule; for descriptions of our actions to ensure compliance with the following statutes and Executive Orders, see our October 15, 2019, proposed rule (84 FR 55120):
• National Environmental Policy Act (NEPA) Consideration;
• Endangered Species Act Consideration;
• Regulatory Flexibility Act;
• Small Business Regulatory Enforcement Fairness Act;
• Paperwork Reduction Act of 1995;
• Unfunded Mandates Reform Act;
• Executive Orders 12630, 12866, 12988, 13132, 13175, 13211, 13563, and 13771.
Exports, Hunting, Imports, Reporting and recordkeeping requirements, Transportation, Wildlife.
The rules that eventually will be promulgated for the 2020-21 hunting season are authorized under 16 U.S.C. 703-712 and 16 U.S.C. 742 a-j.
Pursuant to the Migratory Bird Treaty Act and delegated authorities, the Department of the Interior is proposing the following frameworks for season lengths, shooting hours, bag and possession limits, and outside dates within which States may select seasons for hunting migratory game birds between the dates of September 1, 2020, and March 10, 2021. These frameworks are summarized below.
These federally authorized, State-issued permits are issued to individuals, and only the individual whose name and address appears on the permit at the time of issuance is authorized to take migratory birds at levels specified in the permit, in accordance with provisions of both Federal and State regulations governing the hunting season. The permit must be carried by the permittee when exercising its provisions and must be presented to any law enforcement officer upon request. The permit is not transferrable or assignable to another individual, and may not be sold, bartered, traded, or otherwise provided to another person. If the permit is altered or defaced in any way, the permit becomes invalid.
We set migratory bird hunting frameworks for the conterminous U.S. States by Flyway or Management Unit/Region. Frameworks for Alaska, Hawaii, Puerto Rico, and the Virgin Islands are contained in separate sections near the end of the frameworks portion of this document. The States included in the Flyways and Management Units/Regions are described below.
For the purpose of the hunting regulations listed below, the collective terms “dark” and “light” geese include the following species:
In the Atlantic Flyway States of Connecticut, Delaware, Maine, Maryland, Massachusetts, New Jersey, North Carolina, and Pennsylvania, where Sunday hunting of migratory birds is prohibited Statewide by State law or regulation, all Sundays are closed to the take of all migratory game birds.
Connecticut, Delaware, Georgia, Maine, Maryland, Massachusetts, New Hampshire, New Jersey, New York, North Carolina, Rhode Island, South Carolina, and Virginia may select a Special Sea Duck Season in designated Special Sea Duck Areas. If a Special Sea Duck Season is selected, scoters, eiders, and long-tailed ducks may be taken in the designated Special Sea Duck Area(s) only during the Special Sea Duck Season dates; scoters, eiders, and long-tailed ducks may be taken outside of Special Sea Duck Area(s) during the regular duck season, in accordance with the frameworks for ducks, mergansers, and coots specified above.
A 30-day season may be held between November 15 and February 5, with a 1-bird daily bag limit.
An 80-day season may be held between October 1 and March 10, with a 5-bird daily bag limit. The season may be split into 3 segments.
An 80-day season may be held between October 1 and March 10, with a 5-bird daily bag limit. The season may be split into 3 segments.
A 60-day season may be held Statewide between October 1 and January 31 with a 2-bird daily bag limit.
A 60-day season may be held between October 1 and January 31, with a 2-bird daily bag limit. A special late season may be held in designated areas from January 15 to February 15, with a 5-bird daily bag limit.
In designated areas, an 80-day season may be held between October 1 and March 10, with a 5-bird daily bag limit. The season may be split into 3 segments.
An 80-day season may be held between October 1 and March 10, with a 5-bird daily bag limit. The season may be split into 3 segments.
North Dakota may split their season into 3 segments. Montana, New Mexico, Oklahoma, and Texas may select seasons in each of 2 zones, and Colorado, Kansas, South Dakota, and Wyoming may select seasons in each of 3 zones; and all these States may split their season in each zone into 2 segments. Nebraska may select seasons in each of 4 zones.
In Colorado, Montana, New Mexico, and Wyoming, States may select seasons not to exceed 107 days. The daily bag limit for dark geese is 5 in the aggregate.
In the Western Goose Zone of Texas, the season may not exceed 95 days. The daily bag limit for Canada geese (or any other dark goose species except white-fronted geese) is 5. The daily bag limit for white-fronted geese is 2.
A Canada goose season of not more than 15 days during September 1-20 may be selected. The daily bag limit may not exceed 5 Canada geese, except in Pacific County, Washington, where the daily bag limit may not exceed 15 Canada geese. Areas open to hunting of Canada geese in each State must be described, delineated, and designated as such in each State's hunting regulations.
The daily bag limit for Canada geese is 10.
The daily bag limit for light geese is 6 on or before the last Sunday in January (January 31).
A Canada goose and brant season may be selected in the Wasatch Front Zone with outside dates between the Saturday nearest September 24 (September 26) and the first Sunday in February (February 7).
The daily bag limit for light geese is 6.
In Oregon and Washington permit zones, the hunting season is closed on dusky Canada geese. A dusky Canada goose is any dark-breasted Canada goose (Munsell 10 YR color value 5 or less) with a bill length between 40 and 50 millimeters. Hunting of geese will only be by hunters possessing a State-issued permit authorizing them to do so. Shooting hours for geese may begin no earlier than sunrise. Regular Canada
In portions of the Pacific Flyway (Idaho, Montana, Nevada, and Utah), an open season for taking a limited number of swans may be selected. These seasons are also subject to the following conditions:
In portions of the Atlantic Flyway (Delaware, North Carolina, and Virginia) and the Central Flyway (North Dakota, South Dakota [east of the Missouri River], and that portion of Montana in the Central Flyway), an open season for taking a limited number of swans may be selected. Permits will be issued by the States that authorize the take of no more than 1 swan per permit. A second permit may be issued to hunters from unused permits remaining after the first drawing.
In lieu of a general swan hunting season, States may select a season only for tundra swans. States selecting a season only for tundra swans must obtain harvest and hunter participation data.
These general swan seasons and tundra swan seasons are also subject to the following conditions:
In the Atlantic Flyway
Arizona, Colorado, Idaho, Montana, New Mexico, Utah, and Wyoming may select seasons for hunting sandhill cranes within the range of the Rocky Mountain Population (RMP) of sandhill cranes subject to the following conditions:
A. In Utah, 100 percent of the harvest will be assigned to the RMP crane quota;
B. In Arizona, monitoring the racial composition of the harvest must be conducted at 3-year intervals unless 100 percent of the harvest will be assigned to the RMP crane quota;
C. In Idaho, 100 percent of the harvest will be assigned to the RMP crane quota; and
D. In the Estancia Valley hunt area of New Mexico, the level and racial composition of the harvest must be monitored; greater sandhill cranes in the harvest will be assigned to the RMP crane quota.
A. The season may be split into 2 segments, except in that portion of Texas in which the special white-winged dove season is allowed, where a limited take of mourning and white-tipped doves may also occur during that special season (see Special White-winged Dove Area in Texas, below).
B. A season may be selected for the North and Central Zones between September 1 and January 25; and for the South Zone between September 14 and January 25.
In addition, Texas may select a hunting season of not more than 4 days for the Special White-winged Dove Area between September 1 and September 19. The daily bag limit may not exceed 15 white-winged, mourning, and white-tipped doves in the aggregate, of which no more than 2 may be mourning doves and no more than 2 may be white-tipped doves.
In addition to the basic daily bag limits, Alaska may select sea duck limits of 10 daily, singly or in the aggregate, including no more than 6 each of either harlequin or long-tailed ducks. Sea ducks include scoters, common and king eiders, harlequin ducks, long-tailed ducks, and common and red-breasted mergansers.
A. In Units 5 and 6, the taking of Canada geese is permitted from September 28 through December 16.
B. On Middleton Island in Unit 6, a special, permit-only Canada goose season may be offered. A mandatory goose identification class is required. Hunters must check in and check out. The bag limit is 1 daily and 1 in possession. The season will close if incidental harvest includes 5 dusky Canada geese. A dusky Canada goose is any dark-breasted Canada goose (Munsell 10 YR color value 5 or less) with a bill length between 40 and 50 millimeters.
C. In Units 9, 10, 17, and 18, the daily bag limit is 6 Canada geese.
A. In Units 9, 10, and 17, the daily bag limit is 6 white-fronted geese.
B. In Unit 18, the daily bag limit is 10 white-fronted geese.
A. All seasons are by permit only.
B. No more than 1 emperor goose may be harvested per hunter per season.
C. Total harvest may not exceed 500 emperor geese.
D. In State Game Management Unit 8, the Kodiak Island Road Area is closed to hunting. The Kodiak Island Road Area consists of all lands and water (including exposed tidelands) east of a line extending from Crag Point in the north to the west end of Saltery Cove in the south and all lands and water south of a line extending from Termination Point along the north side of Cascade Lake extending to Anton Larsen Bay. Marine waters adjacent to the closed area are closed to harvest within 500 feet from the water's edge. The offshore islands are open to harvest, for example: Woody, Long, Gull, and Puffin islands.
A. All seasons are by permit only.
B. All season framework dates are September 1-October 31.
C. In Unit 17, no more than 200 permits may be issued during this operational season. No more than 3 tundra swans may be authorized per permit, with no more than 1 permit issued per hunter per season.
D. In Unit 18, no more than 500 permits may be issued during the operational season. No more than 3 tundra swans may be authorized per permit. No more than 1 permit may be issued per hunter per season.
E. In Unit 22, no more than 300 permits may be issued during the operational season. No more than 3 tundra swans may be authorized per permit. No more than 1 permit may be issued per hunter per season.
F. In Unit 23, no more than 300 permits may be issued during the operational season. No more than 3 tundra swans may be authorized per permit. No more than 1 permit may be issued per hunter per season.
In accordance with 50 CFR 21.29, falconry is a permitted means of taking migratory game birds in any State except for Hawaii. States may select an extended season for taking migratory game birds in accordance with the following:
Same zones as for ducks.
Same zones as for ducks.
Same zones as for ducks.
Same zones as for ducks.
Same zones as for ducks.
Same zones as for ducks.
Same zones as for ducks.
Same zones as for ducks.
Same zones as for ducks.
Same zones as for ducks.
Same zones as for ducks.
A. That portion of the State lying east and north of a line beginning at the junction of U.S. Highway 81 and the Texas-Oklahoma State line, then southeast along U.S. Highway 81 to its junction with U.S. Highway 287 in Montague County, then southeast along U.S. Highway 287 to its junction with I-35W in Fort Worth, then southwest along I-35 to its junction with U.S. Highway 290 East in Austin, then east along U.S. Highway 290 to its junction with Interstate Loop 610 in Harris County, then south and east along Interstate Loop 610 to its junction with Interstate Highway 45 in Houston, then south on Interstate Highway 45 to State Highway 342, then to the shore of the Gulf of Mexico, and then north and east along the shore of the Gulf of Mexico to the Texas-Louisiana State line.
B. That portion of the State lying within the boundaries of a line beginning at the Kleberg-Nueces County line and the shore of the Gulf of Mexico, then west along the County line to Park Road 22 in Nueces County, then north and west along Park Road 22 to its junction with State Highway 358 in Corpus Christi, then west and north along State Highway 358 to its junction with State Highway 286, then north along State Highway 286 to its junction with Interstate Highway 37, then east along Interstate Highway 37 to its junction with U.S. Highway 181, then north and west along U.S. Highway 181 to its junction with U.S. Highway 77 in Sinton, then north and east along U.S. Highway 77 to its junction with U.S. Highway 87 in Victoria, then south and east along U.S. Highway 87 to its
Pocatello Valley Road, then west and south on Pocatello Valley Road to 10000 W, then south on 10000 W to the Idaho-Utah border, then east along the Idaho-Utah border to the beginning point.