Please refer to Docket ID NRC-2020-0150 when contacting the NRC about the availability of information for this action. You may obtain publicly-available information related to this action by any of the following methods:

• Federal Rulemaking website: Go to https://www.regulations.gov and search for Docket ID NRC-2020-0150.

• NRC's Agencywide Documents Access and Management System (ADAMS): You may obtain publicly-available documents online in the ADAMS Public Documents collection at https://www.nrc.gov/reading-rm/pdr.html. To begin the search, select “Begin Web-based ADAMS Search.” For problems with ADAMS, please contact the NRC's Public Document Room (PDR) reference staff at 1-800-397-4209, 301-415-4737, or by email to PDR.Resource@nrc.gov.

• The ADAMS accession number for each document referenced (if it is available in ADAMS) is provided the first time that it is mentioned in this document.

• Attention: The PDR where you may examine and order copies of public documents, is currently closed. You may submit your request to the PDR via email at PDR.Resource@nrc.gov or call 1-800-397-4209 between 8:00 a.m. and 4:00 p.m. (EST), Monday through Friday, except Federal holidays.

Please include Docket ID NRC-2020-0150 in your comment submission.

The NRC cautions you not to include identifying or contact information that you do not want to be publicly disclosed in your comment submission. The NRC will post all comment submissions at https://www.regulations.gov as well as enter the comment submissions into ADAMS. The NRC does not routinely edit comment submissions to remove identifying or contact information.

If you are requesting or aggregating comments from other persons for submission to the NRC, then you should inform those persons not to include identifying or contact information that they do not want to be publicly disclosed in their comment submission. Your request should state that the NRC does not routinely edit comment submissions to remove such information before making the comment submissions available to the public or entering the comment into ADAMS.

The petition for rulemaking (PRM) was filed by Brian Magnuson. The petition requests the NRC revise its regulations in § 50.67 of title 10 of the Code of Federal Regulations (10 CFR), “Accident source term,” to codify the source term methodologies and corresponding release fractions recommended in Sandia National Laboratories Report SAND2008-6601, “Analysis of Main Steam Isolation Valve Leakage in Design Basis Accidents Using MELCOR 1.8.6 and RADTRAD,” dated October 2008 (ADAMS Accession No. ML083180196). The petitioner states that the revision would eliminate inconsistences obtained from the use of different source term methodologies and release fractions and would provide the requisite means to ensure compliance with the underlying regulations. The petition may be found in ADAMS under Accession No. ML20170B161.

The petition states that much of the past and present source term methodologies, including release fractions, used by nuclear power plants to perform accident dose calculations are inaccurate and nonconservative. The petition requests that the NRC revise § 50.67 to codify the source term methodologies and recommendations of Sandia National Laboratories report SAND2008-6601 and update and finalize related NRC guidance, Draft Regulatory Guide DG-1199 (Proposed Revision 1 of Regulatory Guide 1.183), “Alternative Radiological Source Terms for Evaluating Design Basis Accidents at Nuclear Power Reactors,” dated October 2009 (ADAMS Accession No. ML090960464).

The petition describes the current NRC guidance as “conceptually inaccurate” and “nonconservative” for calculations of radiological release doses, quoting from Sandia Report SAND2008-6601:

The petition also states that, despite the NRC acknowledging the safety significance of accident source terms, the NRC has not yet approved Draft Regulatory Guide DG-1199. As a result, the petitioner believes accident doses have been undercalculated for over 25 years. The petition indicates this would account for the uncertainties that high burnup fuel pellets could be reduced to a powder form and dispersed outside of the fuel rod during clad failure accidents (with or without fuel melt), used by the Radiological Assessment System for Consequence Analysis (RASCAL) calculation described in NUREG-1940, “RASCAL 4: Description of Models and Methods,” available online at https://www.nrc.gov/reading-rm/doc-collections/nuregs/staff/sr1940/.

The NRC determined that the petition meets the requirements for docketing a petition for rulemaking under § 2.803, “Petition for rulemaking—NRC action.” The NRC will examine the merits of the issues raised in PRM-50-122 and any comments received on this document to determine whether these issues should be considered in rulemaking.

Pursuant to the Concrete Masonry Products Research, Education, and Promotion Act of 2018 (Act), 15 U.S.C. 8701 et seq., the Department is enacting a research, education, and promotion program (commonly referred to as a checkoff program) for concrete masonry products. The Act specifically authorizes the Secretary to “issue such regulations as may be necessary to carry out [the Act] and the power vested in the Secretary under [the Act].” 15 U.S.C. 8713.

The Department's actions to bring the program to fruition will include: (1) Implementing an order that will effectuate the purpose of the Act; (2) conducting a referendum among the industry to determine whether the industry approves of being subject to the implementing order; and, upon an affirmative vote on the order; (3) issuing the order and establishing a Board that will carry out the provisions of the order; and (4) performing continuing oversight of the Board and program.

This notice is the first step in enacting the concrete checkoff program by proposing an order that would implement the Act. The stated purpose of the proposed order is to strengthen the position of the concrete masonry products industry in the domestic marketplace; maintain, develop, and expand markets and uses for concrete masonry products in the domestic marketplace; and promote the use of concrete masonry products in construction and building. The order would empower the Board to develop and carry out research, education, and promotion programs and projects relating to concrete masonry products and paying the costs of such programs and projects with assessments on domestic producers of concrete masonry units.

Following a period of public comment, the Department will address or incorporate those comments received and initiate a referendum on the final order. If the manufacturers of concrete masonry units, via a referendum, approve the implementing order, the Secretary will appoint a Board to carry out the duties as the order prescribes, including the receiving of the assessment. Under the proposed order, the Secretary would establish a Board that ensures fair and equitable representation of the concrete masonry products industry, specifically the geographical distribution of the manufacture of concrete masonry products in the United States, the types of concrete masonry products manufactured, and the range in size of manufacturers in the United States. An industrywide assessment of $.01 per concrete masonry unit sold would finance the research, education, and promotion initiatives of the checkoff program. The Secretary would oversee the operations and actions of the Board.

The Act requires the order to address, among other items, establishment and membership of the Board, balancing guidance for appointments, a nomination process, the selection of alternates, Board terms, powers and duties of the Board, programs and projects to carry out the purpose of the Act, budgets, expenses, contracts and agreements, books and records, and reporting requirements.

The Act provides the rate of assessment and that such assessments shall be paid by a manufacturer that has manufactured concrete masonry products during a period of at least 180 days prior to the date they are to pay the assessment. The initial rate of assessment is $.01 per concrete masonry unit sold. Such manufacturers will submit their assessments to the Board quarterly. The Act allows for a change in rate if a two-thirds majority of voting members of the Board so vote. An increase or decrease can occur only once per year and the change in rate may not exceed $.01 per concrete masonry unit sold. Finally, the assessment rate shall not be in excess of $.05 per concrete masonry unit.

The Act provides that not less than 50 percent of assessments (less administration expenses) paid by a manufacturer shall be used to support research, education, and promotion programs and projects in support of the Geographic Region of the contributing manufacturer. The Act defines five Geographic Regions that generally reflect the northeast, southeast, middle, southwest, and northwest (plus Hawaii and Alaska) of the United States. The Board will work with regional concrete industry groups to allocate funding and coordinate programs that have national and regional impact.

Programs for research, promotion and education will further the following goals:

• Strengthen the position of the concrete masonry industry and products domestically.

• Maintain, develop, and expand markets and uses for concrete masonry domestically.

• Promote the use of concrete masonry in construction and building.

The Act mandates that the Department conduct a referendum among eligible manufacturers of concrete masonry products to determine whether the manufacturers favor implementation of the concrete checkoff program prior to it going into effect. For the order to go into effect, there must be a majority “yes” vote by both: (1) The total number of concrete masonry unit manufacturers voting; and (2) manufacturers who operate a majority of the machine cavities operated by the manufacturers voting in the referendum. Proposed procedures for conducting the referendum will be published in a separate notice in the Federal Register .

With this notice, the Secretary invites comments on the proposed order.

The Act provides that the Secretary, subject to applicable procedures, shall issue orders, national in scope, applicable to concrete masonry products manufactured in the U.S. 15 U.S.C. 8713; see also 15 U.S.C. 8702(12,19). If the Secretary determines that a proposed order received, requested by or submitted to the Secretary, is consistent with and will effectuate the purpose of the Act, the Secretary shall publish such proposed order in the Federal Register not later than 90 days after receiving the order, and give not less than 30 days notice and opportunity for public comment on the proposed order. An industry group, the CMU Checkoff Initiative, submitted the proposed order to the Secretary on April 15, 2020. The Secretary has determined that the proposed order is consistent with and will effectuate the purpose of the Act. The determination that the proposed order is consistent with and will effectuate the purpose of the Act was made on July 20, 2020.

Pursuant to the Act, the Secretary must establish a process for the Board to carry out a program of generic promotion, research, and education regarding concrete masonry products by implementing an effectuating order. 15 U.S.C. 8704(b). In addition, 15 U.S.C. 8706 provides for referenda among eligible manufacturers subject to assessments under section 8705 of the Act to determine whether the order has been approved and will go into effect. As noted above, the proposed procedures for the referendum will be published in a separate Federal Register notice.

While the concrete masonry product industry is of moderate size, its manufacturers populate every state in the nation as well as the District of Columbia. The nature of the industry and cost of transportation of the products is such that the customer base for concrete masonry products is very localized. Relatively small producers dominate the industry. Because they produce a commodity that is not easily differentiated by manufacturer, most of the producers acting alone do not have the resources to efficiently market the value of the product or conduct the research and education to promote market growth. Coordinated activity would enable producers to leverage economies of scale in conducting research, education, and promotion of the industry.

Concrete masonry products range from the paver that is of original design and very ornate to the homogenous, non-descript 8-inch x 8-inch x 16-inch concrete block. The Act and the proposed order distinguish between concrete masonry products and concrete masonry units; the initial rate of assessment applies only to concrete masonry units. The Act defines concrete masonry products to include a broader category of products, including concrete masonry units as well as hardscape products such as concrete pavers and segmental retaining wall units, manufactured on a block machine using dry-cast concrete. Concrete masonry units are a type of concrete masonry product with an actual width of 3 inches or greater that are manufactured from dry-cast concrete using a block machine, including concrete block and related concrete units used in masonry applications. The following are examples of products that would fall within the definition of a concrete masonry unit (defined in § 1500.6). The following non-exhaustive list of products are included in the definition of a concrete masonry unit:

The Act sets out the assessment rate of one cent per concrete masonry unit sold.

To identify the affected industry, the Department used statistics for the North American Industry Classification System (NAICS) code 327331, concrete block and brick manufacturing. This industry includes the manufacturers of concrete architectural block, concrete and cinder blocks, concrete bricks, concrete patio block, concrete paving block, precast terrazzo plinth blocks, precast concrete block and brick, prestressed concrete blocks or bricks, and slumped brick. 1 The Department believes this NAICS classification most closely corresponds to manufacturers of the broader category of concrete masonry products.

According to estimates from the 2017 Economic Census of the U.S. Census Bureau, the block and brick manufacturing industry had nearly 700 establishments and more than 16,000 employees in 2017. From 2007 to 2017, the number of establishments, number of employees, annual payroll, value added, and value of shipments declined in the industry. 2 There were 690 block and brick manufacturing establishments in 2017, down from 914 in 2007. The number of employees fell by 7,578 to 16,247 in 2017, and annual payroll fell $152 million to $841 million. Value added and total value of shipments also fell during this time period, down $715 million to $2.86 billion and down $1.36 billion to $4.88 billion, respectively.

Many provisions of the proposed order reflect specific requirements as set out in the Act. In instances where the Secretary is exercising the discretion granted under the Act, the basis for the proposed language is explained below.

Sections 1500.1 through 1500.21 of the proposed order are definitions. Section 1500.1 defines the “Act” as the Concrete Masonry Products Research, Education, and Promotion Act of 2018 (15 U.S.C. 8701 et seq. ), and any amendments thereto. The other definitions contained in the proposed order are essentially the same as the definitions found in the Act itself, see 15 U.S.C. 8702, except for the addition of a definition of “Geographic Regions” in § 1500.11.

Section 1500.11 defines “Geographic Regions” as the groupings of states delineated in § 1500.40(c) of the proposed order, for the purpose of supporting research, education, and promotion plans and project. See 15 U.S.C. 8705(f). Specifically, in addition to size and range of products, the Act requires that the Board reflect the geographic distribution, the five delineated regions, of the manufacture of concrete masonry products. 15 U.S.C. 8704(b)(2)(A). The Act also provides that not less than 50 percent of assessments (less administrative expenses) paid by a manufacturer shall be used to support research, education, and promotion programs and projects in support of the geographic region of the manufacturer. 15 U.S.C. 8705(f)(1).

Sections 1500.40 through 1500.48 of the proposed order would establish the Board and how it would operate.

Section 1500.40(a) proposes that the Board would consist of not fewer than 15 and not more than 25 members. The Board shall consist of manufacturers. 15 U.S.C. 8704(b)(1)(B)(i) & (iii). Board members will be appointed by the Secretary from nominations submitted as set forth in § 1500.41 of the proposed order. See 15 U.S.C. 8704(b)(1)(B)(ii). This subsection also implements provisions of the Act that specify no employee of an industry trade organization exempt from tax under paragraph (3) or (6) of section 501(c) of the Internal Revenue Code of 1986 representing the concrete masonry industry or related industries shall serve as a member of the Board and no member of the Board may serve concurrently as an officer of the board of directors of a national concrete masonry products industry trade association. 15 U.S.C. 8704(b)(1)(B)(iii).

Section 1500.40(b) proposes that, in order to ensure to ensure fair and equitable representation of the concrete masonry products industry, the composition of the Board shall reflect the geographical distribution of the manufacture of concrete masonry products in the United States, the types of concrete masonry products manufactured, and the range in size of manufacturers in the United States. These requirements are taken directly from the Act. 15 U.S.C. 8704(b)(2)(A). The Small Business Administration uses the number of employees to characterize a company's size. Absent additional suggestions, the Department will define company size based on the number of employees. Companies identified as “large” will be those with over 500 employees; companies identified as “medium” will be those with between 100-499 employees; companies identified as small will be those with less than 100 employeess. The Department is seeking comments on the best measure of company size (other possiblilities, aside from number of employees, could be production capacity, total receipts, number of units producted) and the threshold values to use. Further, this subsection proposes that no company or its affiliates shall have more than two members on the Board. See 15 U.S.C. 8704(b)(1)(B)(iii).

Section 1500.40(c) of the proposed order would further implement the requirement that the composition of the Board reflect the geographical distribution of concrete masonry product manufacturers. It divides the United States into five regions consistent with 15 U.S.C 8705(f)(2) and, although not required in the Act, the order then subdivides these five regions into 15 districts. Dividing the regions into districts will allow the Board to more easily manage the program. This section also proposes that the Secretary will, to the extent possible and depending on the nominees submitted, strive to appoint at least two members from each region and at least one from each district. Finally, § 1500.40(d) proposes that, in accordance with 15 U.S.C. 8704(b)(2)(B), the Board shall, if warranted, recommend reapportionment of Board membership every three years, in order to reflect changes in the geographic distribution of the manufacture of concrete masonry products and the types of concrete masonry products manufactured.

The Act does not specifically describe how nominations and appointments to the Board should be made, but simply states that the Secretary may make appointments from nominations by manufacturers pursuant to the method set forth in the order. 15 U.S.C. 8704(b)(3). Similarly, the Act states that the order shall provide for the selection of alternate members by the Secretary. See 15 U.S.C. 8704(b)(3). At such time as the order goes into effect, the Secretary will solicit nominations for Board membership. Section 1500.41(a) proposes that, for the initial Board, nominations shall be made and submitted to the Secretary by manufacturers. The Secretary would appoint both members and alternate members of the Board. This requirement is the source of the Department's request for approval by OMB of a new ICR. The Department would restrict the information request to that information needed to determine requisite expertise of potential nominees and will include biography, experience, status as a current manufacturer, size of company, type of products produced, statement of interest, and similar background information.

The Act provides that, if the Secretary fails to make an appointment to the Board within 60 days of receiving nominations for an appointment, subject to exceptions, the first nominee would be “deemed” appointed. 15 U.S.C. 8704(b)(4). However, the President issued a signing statement accompanying the Act as follows:

Hence, the Department will not include in the order those provisions of the Act that are inconsistent with the Presidential signing statement including those related to “deemed” appointment of members and those that may unduly limit the Secretary's discretion in making appointments.

Section 1501.41(b) proposes that, from the nominations, the Secretary will appoint the 15-25 members of the Board and six alternate members within a reasonable time. If one of the voting members vacates the appointment, the Secretary will appoint one of the alternate members to fill the unexpired term. The Secretary will provide the Board an opportunity to offer a nominee as successor to fill the term of the alternate member. If the Board fails to submit a nominee for an open position, the Secretary will appoint a member who meets the criteria described in § 1500.40.

This section proposes that Board members and alternates would serve three-year terms, except for the initial members. See 15 U.S.C. 8704(b)(6)(A). Board members and alternates would be able to serve a maximum of two consecutive three-year terms, but may serve additional terms after rotating off the Board. See 15 U.S.C. 8704(b)(6)(B). Initial members would serve staggered terms of two, three, and four years. See 15 U.S.C. 8704(b)(6)(A). Terms would end on December 31, with new terms beginning on January 1. Members serving an initial term of two or three years will be eligible to serve a second consecutive three-year term. Board members and alternates may also continue to serve until a successor is appointed by the Secretary. See 15 U.S.C. 8704(b)(6)(C).

This section proposes that, if a Board member position becomes vacant, the Secretary would appoint an alternate for the remainder of the term. The successor to fill the term of the alternate member would be appointed as described in § 1500.41. See 15 U.S.C. 8704(b)(6)(D).

Section 1500.44(a) proposes that, if a Board member or alternate ceases to qualify as a manufacturer, they would be disqualified from serving on the Board. See 15 U.S.C. 8704(b)(7). As set forth in the definitions, a “manufacturer” is “any person engaged in the manufacturing of commercial concrete masonry products in the U.S.” Section 1500.44(b) proposes that, if a Board member consistently refuses to perform their duties, or engages in acts of dishonesty or willful misconduct, the Board could recommend to the Secretary that the member be removed. All members would serve at the pleasure of the Secretary.

Section 1500.45(a) proposes that the Board would meet at least annually, and that a meeting would only be conducted when a quorum (a majority of the Board members) is present. If the Board's by-laws permit participation by telephone or other means, such participation would count towards a quorum or other voting requirements.

Section 1500.45(b) proposes that the Board would select a Chair, Vice-Chair, Secretary-Treasurer and other officers as appropriate, at the start of each fiscal period.

Section 1500.45(c) proposes that the Board would provide members and manufacturers a minimum of 14-days advance notice of all Board meetings.

Section 1500.45(d) proposes that each Board member would be entitled to one vote, and that a motion would carry if supported by one vote more than 50 percent of the total votes represented by the Board members participating. There is one exception, however, as the Act requires that a two-thirds majority of the voting members of the Board is required to approve a change in the assessment rate. 15 U.S.C. 8705(c)(2)(A).

Section 1500.45(e) proposes that the Board may form committees, and that such committees may consist of individuals other than Board members. Committee members would serve without compensation.

Sections 1500.45(f) through (i) address voting, and propose that votes may take place electronically outside of convened Board meetings only if members are given 14 days prior notice and if a majority of voting Board members participate prior to the established deadline; that all votes shall be recorded in Board minutes; that there shall be no voting by proxy; and that all Board members shall have one vote. Alternate members would not vote. The Chair and all other Board officers would be elected from voting members of the Board.

Section 1500.45(j) proposes that the organization of the Board and procedures for conducting meetings would be in accordance with bylaws that are established by the Board and approved by the Secretary.

Section 1500.45(k) proposes that meetings of the Board and committees may take place by electronic means, provided that all Board and committee members are given prior written notice 14 days before the meeting and have the opportunity to participate.

This section reflects the requirements in the Act found at 15 U.S.C. 8704(b)(8). Section 1500.46(a) proposes that Board members and alternates shall serve without compensation. 15 U.S.C. 8704(b)(8)(A). Section 1500.46(b) proposes that, if approved by the Board, members or alternates shall be reimbursed for reasonable travel expenses, which may include a per diem allowance or actual subsistence incurred while away from their homes or regular place of business in performance of services for the Board. 15 U.S.C. 8704(b)(8)(B).

This section largely reflects the provisions contained in 15 U.S.C. 8704(c), which states that the order shall specify the powers and duties of the Board, and contains a list of powers and duties that shall be included in the order.

Section 1500.47(a) proposes that the Board shall have the power and duty to administer the proposed order in accordance with its terms and conditions, and to collect assessments. See 15 U.S.C. 8704(c)(1).

Section 1500.47(b) proposes that the Board shall have the power and duty to develop and recommend to the Secretary such bylaws as may be necessary for the functioning of the Board. See 15 U.S.C. 8704(c)(2).

Section 1500.47(c) provides that the Board shall have the power and duty to make such rules as may be necessary to administer the order, including activities to be carried out under the order. See 15 U.S.C. 8704(c)(2).

Section 1500.47(d) proposes that the Board shall have the power and duty to meet, organize, and select from the Board members a Chair, Vice-Chair, Secretary-Treasurer and other officers, committees, and subcommittees, and to vest in such committees and subcommittees such responsibilities and authorities as the Board determines to be appropriate. See 15 U.S.C. 8704(c)(3).

Section 1500.47(e) proposes that the Board shall have the power and duty to establish regional committees to administer regional initiatives. See 15 U.S.C. 8704(c)(4).

Section 1500.47(f) proposes that the Board shall have the power and duty to recommend to the Secretary modifications to the Geographic Regions described in § 1500.11 of the proposed order. See 15 U.S.C. 8705(f)(3).

Section 1500.47(g) proposes that the Board shall have the power and duty to establish working committees of persons other than Board members, see 15 U.S.C. 8704(c)(5), and § 1500.47(h) proposes for the employment of persons other than Board members, as the Board considers necessary to assist the Board in carrying out its duties, see 15 U.S.C. 8704(c)(6).

Section 1500.47(i) proposes that the Board shall have the power and duty to prepare a budget and to submit the budget to the Secretary for approval, see 15 U.S.C. 8704(c)(7), and § 1500.47(j) proposes for the borrowing of funds necessary for the startup expenses of the proposed order, see 15 U.S.C. 8704(c)(8).

Section 1500.47(k) proposes that the Board shall have the power and duty to develop and carry out research, education, and promotion programs and projects relating to concrete masonry products, and to pay the costs of such programs and projects with the assessments collected under § 1500.51, as well as other income of the Board. See 15 U.S.C. 8704(c)(9).

Section 1500.47(l) proposes that the Board shall have the power and duty to enter into contracts or agreements which must be approved by the Secretary before becoming effective, for the development and carrying out of programs or projects of research, education, and promotion relating to concrete masonry, including with manufacturer associations or other entities as considered appropriate by the Secretary. See 15 U.S.C. 8704(c)(10) & (e)(1)(A).

Section 1500.47(m) proposes that the Board shall have the power and duty to develop programs and projects, and enter into related contracts or agreements related thereto, which must be approved by the Secretary before becoming effective, targeted specifically toward the Geographic Regions described in § 1500.11. Such programs and projects are to be recommended by the relevant regional committees for marketing and research projects to benefit manufacturers in their respective Geographic Regions. The contracts or agreements related to these regional programs and projects would be subject to the same requirements for contracts and agreements described above, in § 1500.47(l). See 15 U.S.C. 8704(c)(4) & (e)(1)(A); 15 U.S.C. 8705(f)(1). The Department envisions regional groupings providing their regional-specific recommendations for research, education, and promotion programs and projects to the Board.

Section 1500.47(n) proposes that the Board shall have the power and duty to keep minutes, books, and records that reflect the actions and transactions of the Board, and to promptly report the minutes of each Board meeting to the Secretary. See 15 U.S.C. 8704(c)(11).

Section 1500.47(o) proposes that the Board shall maintain such records and books, and prepare and submit reports and records to the Secretary as required; to make records available to the Secretary for inspection and audit; to account for the receipt and disbursement of funds; and to keep records that accurately reflect actions and transactions of the Board. See 15 U.S.C. 8704(f)(1). This requirement is the source of the Department's second request for approval by OMB of a new ICR. The Department will restrict the information request to that information needed to determine the amount of assessment and will include: the number and type of concrete masonry units manufactured; the number and type of concrete masonry units on which an assessment was paid; the name and address of the manufacturer; manufacturer employee identification number; and the date of assessment payment on each concrete masonry unit sold; and similar assessment accounting information.

Section 1500.47(p) proposes that the Board have its books audited by a certified public accountant at the end of each fiscal year and at other times as requested by the Secretary, and to submit a report of the audit to the Secretary. See 15 U.S.C. 8704(f)(2).

Section 1500.47(q) proposes that the Board shall have the power and duty to give the Secretary the same notice of Board and committee meetings as given to members so that the Secretary's representative(s) may attend, and report minutes of all such meetings to the Secretary. See 15 U.S.C. 8704(c)(11) & (15).

Section 1500.47(r) proposes for the Board to furnish any requested information or records to the Secretary. See 15 U.S.C. 8704(c)(13).

Section 1500.47(s) proposes that the Board shall have the power and duty to receive, evaluate, and report to the Secretary all complaints of violations of the proposed order. See 15 U.S.C. 8704(c)(12).

Section 1500.47(t) proposes the Board recommend to the Secretary amendments to the order as the Board considers appropriate. See 15 U.S.C. 8704(c)(14).

Section 1500.47(u) proposes the Board be allowed to recommend adjustments to the assessments as provided in the order. See 15 U.S.C. 8704(c)(7) & 15 U.S.C. 8705(c)(2).

Section 1500.47(v) proposes that the Board shall have the power and duty to notify manufacturers of all Board meetings through press releases or other means. While the Act does not specifically require such notice, it will increase transparency of the Board's operations.

Section 1500.47(w) proposes that the Board shall have the power and duty to invest assessments collected, in accordance with § 1500.50 of the proposed order, and as authorized by 15 U.S.C. 8705(e).

Finally, § 1500.47(x) proposes that the Board shall have the power and duty to periodically prepare and make available reports of its activities to the public and to the manufacturers. Additionally, at least once each fiscal period, the Board would make public an accounting of funds received and expended. This section helps to increase transparency of the Board's operations and to implement 15 U.S.C. 8704(j), which requires the Board to prepare and make publicly available a comprehensive biennial report.

Section 1500.48(a) contains a list of prohibited activities that is identical to the prohibited activities listed in the Act at 15 U.S.C. 8704(g)(1). Specifically, the Board shall not engage in any program or project to, or use any funds to: (1) Influence legislation, elections, or governmental action; (2) engage in an action that would be a conflict of interest; (3) engage in advertising that is false or misleading; (4) engage in any promotion, research, or education that would be disparaging to other construction materials; or (5) engage in any promotion or project that would benefit any individual manufacturer.

Section 1500.48(b) contains a number of exceptions, which are identical to those found in the Act at 15 U.S.C. 8704(g)(2). Section 1500.48(a) does not preclude: (1) The development and recommendation of amendments to the order; (2) communication to appropriate government officials regarding activities under the order that is not intended to influence legislation, elections, or governmental action; or (3) any lawful action designed to market concrete masonry products directly to a foreign government.

Section 1500.50(a) proposes that prior to the beginning of each fiscal year, and during the fiscal year as may be necessary, the Board shall prepare and submit to the Secretary for approval a budget for the upcoming fiscal year covering its anticipated expenses and disbursements. See 15 U.S.C. 8704(d)(2)(A) & (B). The budget would be deemed approved if the Secretary fails to approve or reject it within 60 days of receipt, unless the Secretary provides a reasonable justification for the delay to the Board and Congress, along with a reasonable date for approval or disapproval. See 15 U.S.C. 8704(d)(2)(C). The Department may provide such justification in any written format. Each budget shall include: (1) A statement of objectives and strategy for each program, plan, or project, see 15 U.S.C. 8704(i); (2) a summary of anticipated revenue, with comparative data for at least one preceding year (except for the initial budget); (3) a summary of proposed expenditures for each program, plan or project; and (4) staff and administrative expense breakdowns, with comparative data for at least one preceding year (except for the initial budget). See 15 U.S.C. 8704(c)(7) & (d)(2)(A).

Section 1500.50(b) proposes that each budget shall provide adequate funds to defray its proposed expenditures.

Section 1500.50(c) proposes that, subject to this section, any amendment or addition to an approved budget must be approved by the Secretary, including shifting funds from one program or project to another. However, a de minimis shift of funds from one approved category to another, and not exceeding 10% of the funds in either category, which does not cause an increase in the Board's approved budget and which is consistent with governing bylaws, need not have prior approval by the Secretary. These provisions provide the Board with operational flexibility in light of the requirements to submit budgets to the Secretary for approval contained in 15 U.S.C. 8704(c)(7) & (d)(2)(A), and are consistent, for example, with the 10% threshold for certain transfers of fund permitted in the Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards found at 2 CFR part 200. As noted earlier, the budget will be deemed approved if the Secretary fails to approve or reject it within 60 days of receipt, unless the Secretary provides a reasonable justification for the delay to the Board and Congress, along with a reasonable date for approval or disapproval. See 15 U.S.C. 8704(d)(2)(C). The Department may provide such justification in any written format.

Section 1500.50(d) proposes that the Board is authorized to incur such expenses as the Secretary finds are reasonable and likely to be incurred by the Board for its maintenance and functioning, and to enable it to exercise its powers and perform its duties in accordance with the provisions of the order. Such expenses are to be paid from funds received by the Board. See 15 U.S.C. 8704(d)(3).

Section 1500.50(e) implements the provisions contained in 15 U.S.C. 8715, Limitations on Obligation of Funds. It proposes that:

(1) In each fiscal year, through fiscal year 2030, the Board may not obligate an amount greater than the sum of—

(a) 73 percent of the amount of assessments estimated to be collected under 1500.51 in such fiscal year (except for fiscal years 2028 and 2029, for which the amounts estimated to be collected shall be 62 percent of the amount of assessments actually collected in the most recent fiscal year for which an audit report has been submitted as of the beginning of the fiscal year for which the amount be obligated is being determined);

(b) 73 percent of the amount of assessments actually collected under 1500.51 in the most recent fiscal year for which an audit report has been submitted as of the beginning of the fiscal year for which the amount that may be obligated is being determined, less the estimate made pursuant to paragraph (1) for such most recent fiscal year; and

(c) amounts permitted in preceding fiscal years to be obligated that have not been obligated.

(2) Assessments collected in excess of the amount permitted to be obligated in a fiscal year shall be deposited in an escrow account until the end of fiscal year 2030.

(3) Prior to the end of fiscal year 2030, the Board may not obligate, expend, or borrow against amounts deposited in the escrow account. Any interest earned on such amounts shall be deposited in the escrow account and shall be unavailable for obligation until the end of fiscal year 2030.

Section 1500.50(f) proposes that, with approval of the Secretary, the Board may borrow money for the payment of administrative expenses, subject to the same fiscal, budget and audit controls as other funds of the Board. Any funds borrowed by the Board, however, shall be expended only for startup costs and capital outlays. See 15 U.S.C. 8704(d)(3)(B).

Section 1500.50(g) proposes that the Board shall reimburse the Secretary for all expenses incurred by the Secretary in the implementation, administration and supervision of the order, including all referendum costs in connection with the order. See 15 U.S.C. 8704(d)(3)(D).

Section 1500.50(h) proposes that, following the third fiscal year of operation of the Board, the total cost of collection of expenses and administrative staff incurred by the Board during any fiscal year shall not exceed 10 percent of the projected total assessments to be collected and other income received by the Board for that fiscal year after any fees owed to the Department are paid. Reimbursements to the Secretary required under paragraph (g) are excluded from this limitation on spending. See 15 U.S.C. 8704(d)(3)(C).

Section 1500.50(i) proposes that the Board may invest assessments and other revenues collected in: (1) Obligations of the United States or any agency of the United States; (2) general obligations of any state or any political subdivision of a state; (3) interest bearing accounts or certificates of deposit of financial institutions that are members of the Federal Reserve System; or (4) obligations fully guaranteed as to principal interest by the United States. 15 U.S.C. 8705(e).

Section 1500.50(j) clarifies that investment income and revenue earned under the previous paragraph are earnings obtained from assessment that are subject to budget approval by the Secretary.

Section 1500.51(a) of the proposed order proposes that the collection of assessments on concrete masonry units will be the responsibility of the manufacturer who sells the concrete masonry units. The Act specifies that assessments shall be remitted by manufacturers to the Board in the manner prescribed by the order. 15 U.S.C. 8705(b)(1). Further, there will only be an assessment on the first sale of concrete masonry units, and not on the subsequent sale of concrete masonry units already assessed. As required by the Act, manufacturers will be required to collect and remit assessments no less than quarterly. 15 U.S.C. 8705(b)(2). Also, as required by the Act, manufacturers are directed to identify the total amount due in assessments on all sales receipts, invoices or other commercial documents of sale as a result of the sale of concrete masonry units. 15 U.S.C. 8705(b)(3). In order to help implement these provisions, the Board is directed to provide a proposed compliance program for review and approval by the Secretary within 180 days of their initial meeting. A proposed compliance program and its plan to verify compliance with the Act will outline the way the Board will receive assessments, how they will verify compliance, determine the best method to track sales, and how to document all actions.

Section 1500.51(b) sets forth the initial rate of assessment of $0.01 per concrete masonry unit sold by a manufacturer as specified in the Act. 15 U.S.C. 8705(c)(1). The Board may make assessments effective as of the effective date of the proposed order. Manufacturers would submit funds to the Board within 60 days of the end of the first quarter after the Board is established; thereafter submission of funds would be made to the Board within 60 days of the end of each quarter.

Section 1500.51(c) proposes that, upon the affirmative vote of two-thirds of the voting members of the Board, the Board may modify the assessment rate. 15 U.S.C. 8705(c)(2)(A). This is subject to the provision that the rate may be raised to a maximum of $0.05 cents per unit, 15 U.S.C. 8705(c)(2)(B), that only one increase or decrease may be implemented in any one-year period, 15 U.S.C. 8705(c)(2)(D), and that each individual increase may not exceed $0.01, 15 U.S.C. 8705(c)(2)(C).

Section 1500.51(d) proposes that not less than 50 percent of the assessments (less administration expenses) paid by a manufacturer shall be used to support research, education, and promotion programs and projects in support of the Geographic Region of the manufacturer. This requirement is taken directly from the Act. 15 U.S.C. 8705(f)(1).

Section 1500.51(e) proposes that assessment payments and reports will be submitted to the Board quarterly. See 15 U.S.C. 8705(b)(2). All quarterly payments are to be received no later than 60 days after the conclusion of each quarter. A late payment charge will be imposed on manufacturers who fail to submit payment by the due date established by the Board. See 15 U.S.C. 8705(d)(1). In addition to the late payment charge, there will be an interest charge on the outstanding amount. See 15 U.S.C. 8705(d)(1). In accordance with the Act, the rate of interest and late payment charges shall be specified by the Secretary. See 15 U.S.C. 8705(d)(2).

Section 1500.51(f) explains that manufacturers failing to remit total assessments due in a timely manner may also be subject to actions under Federal debt collection procedures.

Section 1500.51(g) proposes that the Board may authorize other organizations to collect assessments on its behalf, subject to approval of the Secretary.

Finally, § 1500.51(h) proposes that the Board shall provide manufacturers with the opportunity to apply for rebates on assessments remitted to the Board for concrete masonry units not covered by this order, and for assessments remitted to the Board for concrete masonry units sold to a purchaser that subsequently failed to remit payment due to bankruptcy, bad debt, or other reasons. Those requesting rebates will have to provide all necessary documentation as determined by the Board.

Section 1500.60(a) proposes that the Board shall receive and evaluate, or on its own initiative develop, any program or project authorized under the proposed order. This section further proposes that the Board will submit any such program or project to the Secretary for approval. See 15 U.S.C. 8704(d)(1). Such programs or projects shall provide for: (1) the establishment, issuance, effectuation and administration of appropriate programs for research, education, and promotion with respect to concrete masonry; and (2) the establishment and conduct of research with respect to the image, desirability, use, marketability, quality or production of concrete masonry products, to the end that the marketing and use of concrete masonry products may be encouraged, expanded, improved or made more acceptable, and to advance the image, desirability or quality of concrete masonry product. See 15 U.S.C. 8701(a).

Section 1500.60(b) proposes that the Board will not implement a program or project prior to receiving approval from the Secretary. See 15 U.S.C. 8704(d)(1). Once the Secretary approves a program or project, the Board will take appropriate steps to implement it. A contract or agreement for a program or project will be deemed approved if the Secretary fails to approve or reject it within 60 days of receipt, unless the Secretary provides a reasonable justification for the delay to the Board and Congress, along with a reasonable date for approval or disapproval. See 15 U.S.C. 8704(e)(3). The Department may provide justification in any written format.

Any such contract or agreement shall provide that: (1) The contractor or agreeing party shall develop and submit to the Board a program or project together with a budget or budgets that shall show the estimated cost to be incurred for such program or project, see 15 U.S.C. 8704(e)(2)(A). Further, the contractor or agreeing party shall keep accurate records of all its transactions and make periodic reports to the Board of activities conducted, see 15 U.S.C. 8704(e)(2)(B) & (D); submit accounting for funds received and expended, see 15 U.S.C. 8704(e)(2)(C); and make such other reports as the Secretary or the Board may require, see 15 U.S.C. 8704(e)(2)(E). This section also proposes that the Secretary may audit the records of the contracting or agreeing party periodically; that any subcontractor who enters into a contract with a Board contractor and who receives Board funds will be subject to the same provisions as the contractor; and that the contract or agreement shall become effective on the approval of the Secretary.

Section 1500.60(c) proposes that programs or projects implemented under the proposed order will be reviewed or evaluated periodically by the Board to ensure that they contribute to an effective program of research, education, or promotion. If the Board finds that a program or project does not contribute to an effective program of research, education, or promotion, then the Board will terminate that program or project, subject to the approval of the Secretary.

Section 1500.60(d) proposes that any educational or promotional activity undertaken with funds provided by the Board shall include a statement that such activities were supported in whole or in part by the Board. 15 U.S.C. 8704(d)(1)(B).

Finally, § 1500.60(e) proposes that, every two years, the Board shall prepare and make publicly available a comprehensive and detailed report that includes an identification and description of all programs and projects undertaken by the Board during the previous two years, as well as those planned for the subsequent two years. The report will detail the allocation or planned allocation of Board resources for each program or project, and will also include: (1) The overall financial condition of the Board; (2) a summary of the amounts obligated or expended during the two preceding fiscal years; and (3) a description of the extent to which the objectives of the Board were met according to the metrics required under § 1500.50(a)(1). See 15 U.S.C. 8704(j).

Section 1500.61 proposes that the Board shall authorize and fund an independent evaluation of the effectiveness of the proposed order and other programs conducted by the Board beginning five years after October 5, 2018 and every three years thereafter. The Board will submit to the Secretary, and make available to the public, the results of each periodic independent evaluation. See 15 U.S.C. 8704(h).

Section 1500.62 proposes that ownership and allocation of rights to patents, copyrights, inventions, or publications, developed through the use of non-Federal funds remitted to the Board under the proposed order shall be determined by written agreement between the Board and the party(ies) receiving funds for the development of such inventions, patents, copyrights, or publications. The Department believes that “trademarks” were inadvertently left off of this list, as they are included in the heading, and intends to include them in the final order, subject to public comment.

Section 1500.70(a) proposes that manufacturers subject to the proposed order may be required to periodically provide such information as required by the Board, with the approval of the Secretary. This information may include but is not limited to: The number and type of concrete masonry units manufactured; the number and type of concrete masonry units on which an assessment was paid; the name and address of the manufacturer; manufacturer employee identification number; the date of assessment payment on each concrete masonry unit sold; and similar assessment accounting information. The previously noted ICR regarding assessments also supports this requirement. The Department is seeking approval for these ICRs.

Section 1500.70(b) proposes that all of the reports described above are due to the Board 60 days after the end of each quarter, and

Section 1500.70(c) proposes that all such reports and information submitted shall be subject to confidentiality restrictions in § 1500.72.

Section 1500.71 proposes that each manufacturer subject to the proposed order shall maintain and make available for inspection by the Secretary, or the Board when acting on behalf of the Secrtary, such books and records as are necessary to carry out the provisions of the order and the regulations issued thereunder, including such records as are necessary to verify any reports required. See 15 U.S.C. 8704(k)(1). Such records shall be retained for at least seven years beyond the fiscal period of their applicability. See 15 U.S.C. 8704(k)(2).

Section 1500.72(a) proposes that trade secrets and commercial or financial information that is privileged or confidential obtained from books, records, or reports under the Act, the proposed order, and the regulations issued thereunder shall be kept confidential by all persons, including all employees and former employees of the Board, all officers and employees and former officers and employees of contracting and subcontracting agencies or agreeing parties having access to such information. Such information shall not be available to Board members or manufacturers. Only those persons having a specific need for such information to effectively administer the provisions of the proposed order shall have access to such information. See 15 U.S.C. 8704(k)(3)(A). In accordance with the Act, such information may be disclosed only if (1) the Secretary considers the information relevant; and (2) the information is revealed in a judicial proceeding or administrative hearing brought at the direction or on the request of the Secretary or to which the Secretary or any officer of the Department is a party. 15 U.S.C. 8704(k)(3)(B). Also in accordance with the Act, any officer, employee, or agent of the Department of Commerce or any officer, employee, or agent of the Board who willfully violates the above provisions of the proposed order shall be fined not more than $1,000 and imprisoned for not more than 1 year, or both. 15 U.S.C. 8704(k)(3)(D). However, nothing in this section shall be deemed to prohibit: (1) The issuance of general statements based upon the reports of the number of persons subject to the proposed order or statistical data collected therefrom, as long as the statements do not identify the information furnished by any person; and (2) the publication, by direction of the Secretary, of the name of any person who has been adjudged to have violated the proposed order and the specific provisions that were violated. See 15 U.S.C. 8704(k)(3)(C).

Section 1500.72(b) would clarify that, for any officer, employee, or agent of the Department of Commerce, these provisions are consistent with and do not supersede, conflict with, or otherwise alter any obligations, rights, or liabilities created by existing statute or Executive Order relating to classified information, communications to Congress, the reporting to an Inspector General of a violation of any law, rule, or regulation, or mismanagement, a gross waste of funds, an abuse of authority, or a substantial and specific danger to public health or safety, or any other whistleblower protection.

Section 1500.80 proposes that all fiscal matters, programs or projects, rules or regulations, reports, or other actions proposed and prepared by the Board shall be submitted to the Secretary for approval.

Section 1500.81(a) proposes that a referendum will be held to determine whether manufacturers favor enactment of the proposed order. See 15 U.S.C. 8706(a)(1). The proposed referendum procedures are being published in a separate notice in the Federal Register . See 15 U.S.C. 8706(c)(1) (“Referenda conducted pursuant to this section shall be conducted in a manner determined by the Secretary.”) A manufacturer will be considered eligible to vote if the manufacturer has manufactured concrete masonry products during a period of at least 180 days prior to the first day of the period during which voting in the referendum will occur. 15 U.S.C. 8706(b)(2). The Act directs the Secretary to conduct the referendum “among [eligible] manufacturers . . . subject to assessments under section 8705 of this title.”

The Act does not define the phrase “subject to assessment” and therefore, the Secretary must interpret the statute to determine whether all manufacturers of concrete masonry products should participate in the referendum, or whether only manufacturers of concrete masonry units should participate. The phrase “subject to assessment” could mean: (1) Meeting only the eligibility requirement described above (that is, having manufactured concrete masonry products during the 180-day period prior to voting), or (2) both meeting the eligibility requirement and being subject to the initial rate of assessment. Under interpretation (1), the referendum would be conducted among all manufacturers who had manufactured concrete masonry products during the 180-day period prior to voting. Under interpretation (2), because the initial rate of assessment is applied only to concrete masonry units sold, the referendum would be conducted among all manufacturers who had manufactured concrete masonry units during the 180-day period prior to voting. Under the Act, “concrete masonry products” refers to a broader class of products than concrete masonry units, including hardscape products such as concrete pavers and segmental retaining wall units.

Where a statute leaves a gap or is ambiguous, courts will typically look to see whether the agency's interpretation was reasonable in light of the text, nature, and purpose of the statute. See, e.g., Cuozzo Speed Techs., LLC v. Lee, 136 S. Ct. 2131, 2134 (U.S. June 20, 2016). In the absence of a statutory definition, courts “construe a statutory term in accordance with its ordinary or natural meaning.” FDIC v. Meyer, 510 U.S. 471, 476 (1994). The most relevant definition of “subject to” is “affected by or possibly affected by” something. 4 Only manufacturers of concrete masonry units will actually have to pay, or be affected by, the initial rate of assessment. The Department believes, therefore, that the most natural reading of the statute is that only concrete masonry unit manufacturers are “subject to” assessment and therefore eligible to participate in the referendum.

This reading is also consistent with the stated purpose of the Act as described in 15 U.S.C. 8701. Senate Report 115-218 includes the Congressional Budget Office's (CBO) estimate concerning the Act's impacts, and notes the following assumption:

Senate Report 115-218, at 4 (Mar. 22, 2018).

Based upon both the language and the overarching purpose of the statute, and because concrete masonry unit manufacturers are currently the only manufacturers who have an incentive to participate in this program, the Department interprets the Act to mean that only manufacturers subject to the initial rate of assessment are “subject to assessment,” in accordance with interpretation (2). Therefore, for the initial referendum, an eligible person would be a manufacturer of concrete units that is subject to the initial rate of assessment. Further, the proposed order protects the interests of concrete masonry product manufacturers by leaving open their eligibility for Board membership, as well as the possibility that future orders could have a broader scope rather than being limited to concrete masonry unit manufacturers.

Therefore, for the initial referendum, an eligible person would be a manufacturer of concrete units that is subject to the initial rate of assessment in § 1500.51, that is, $0.01 per concrete masonry unit sold by a manufacturer. See 15 U.S.C. 8705(c)(1). Each manufacturer eligible to vote in the referendum shall be entitled to one vote. 15 U.S.C. 8706(b)(1). For the order to go into effect, there must be a majority “yes” vote by both: (1) The total number of concrete masonry unit manufacturers voting; and (2) manufacturers who operate a majority of the machine cavities operated by the manufacturers voting in the referendum. 15 U.S.C. 8706(a)(2).

Section 1500.81(b) proposes that, after the initial referendum, the Secretary shall conduct a referendum upon the request of the Board, or effective beginning on the date that is five years after the date of approval of the proposed order, and at five-year intervals thereafter, by petition from not less than 25% of manufacturers eligible to vote. For any new proposed order, voter eligibility will be based on the scope of such proposed order. Each manufacturer eligible to vote in subsequent referenda shall be entitled to one vote. The proposed order shall continue if it meets the same requirements for a majority “yes” vote described above.

Section 1500.82(a) proposes that the Secretary shall suspend or terminate an order or a provision of an order if the Secretary finds that an order or provision of an order obstructs or does not tend to effectuate the purpose of the Act, or if the Secretary determines that the order or a provision of an order is not favored by a majority of all votes cast in the referendum as provided in § 1500.81. See 15 U.S.C. 8706(e) & 8710. If the Secretary suspends or terminates a provision of an order, the order remains in effect minus the suspended or terminated provision.

Section 1500.82(b) proposes that if, as a result of a referendum conducted under § 1500.81 of the proposed order, the Secretary determines that the order is not approved, the Secretary shall: (1) Not later than 180 days after making the determination, suspend or terminate collection of assessments under the proposed order; and (2) as soon as practical, suspend or terminate activities under this order in an orderly manner. 15 U.S.C. 8710(b).

Section 1500.83 proposes that, unless otherwise expressly provided by the Secretary, the termination of the proposed order, or the issuance of any amendment to either thereof, shall not: (a) Affect or waive any right, duty, obligation or liability which shall have arisen or which may thereafter arise in connection with any provision of the proposed order or any regulation issued thereunder; (b) release or extinguish any violation of the proposed order or any regulation issued thereunder; or (c) affect or impair any rights or remedies of the United States, or of the Secretary or of any other persons, with respect to any such violation. The Department believes that the intended language of this provision was likely “. . . issuance of any amendment,” rather than “. . . issuance of any amendment to either thereof,” and intends to edit this text following public comment.

Section 1500.84 proposes that, as required by the Act, not later than 30 days before a referendum is to be conducted under the proposed order, the Secretary shall notify all manufacturers of the period during which the referendum will occur through publication in the Federal Register . To clarify this statement, the Secretary interprets that notice can occur 30 or more days in advance of the referendum start date ( i.e., notice cannot be less than 30 days). 15 U.S.C. 8706(c)(4). The notice will explain any registration and voting procedures. See 15 U.S.C. 8706(c)(3). A manufacturer who chooses to vote in a referendum conducted under the proposed order shall register with the Secretary prior to the voting period. 15 U.S.C. 8706(c)(2).

Section 1500.85 proposes that no member, alternate member, or employee of the Board shall be held personally responsible, either individually or jointly with others, in any way whatsoever, to any person for errors in judgment, mistakes or other acts, either of commission or omission, as such member or employee, except for acts of dishonesty or willful misconduct.

Section 1500.86 proposes that if any provision of the proposed order, or its applicability to any person or circumstance, is declared invalid, the validity of the remainder of the proposed order or its applicability will not be affected.

Section 1500.87 proposes that the Secretary may, from time to time, amend an order. 15 U.S.C. 8703(c). Amendments to the proposed order may be proposed from time to time by the Board or by any interested person affected by the provisions of the Act, including the Secretary. See 15 U.S.C. 8704(c). The provisions of the Act applicable to an order shall be applicable to any amendment to an order. 15 U.S.C. 8703(c) & 8711.

If the ICRs in the proposed order are approved by OMB under the Paperwork Reduction Act of 1995, 44 U.S.C. Chapter 35, this section would include the OMB control number.

This rulemaking is not a significant regulatory action under Executive Order 12866.

This rule is not subject to the requirements of Executive Order 13771 because it is not a significant regulatory action under Executive Order 12866.

This proposed rule does not contain policies with Federalism implications as defined in Executive Order 13132.

The Regulatory Flexibility Act (RFA), first enacted in 1980 and codified at 5 U.S.C. 600-611, was intended to place the burden on the government to review all new regulations to ensure that, while accomplishing their intended purposes, they do not unduly inhibit the ability of small entities to compete. The RFA recognizes that the size of a business, unit of government, or nonprofit organization can have a bearing on its ability to comply with Federal regulations. Major goals of the RFA are: (1) To increase agency awareness and understanding of the impact of their regulations on small business; (2) to require that agencies communicate and explain their findings to the public; and (3) to encourage agencies to use flexibility and to provide regulatory relief to small entities.

The RFA emphasizes predicting significant adverse impacts on small entities as a group distinct from other entities and on the consideration of alternatives that may minimize the impacts, while still achieving the stated objective of the action. When an agency publishes a proposed regulatory action, it must either: (1) Certify that the action will not have a significant adverse impact on a substantial number of small entities, and support such a certification declaration with a factual basis, demonstrating this outcome, or, (2) if such a certification cannot be supported by a factual basis, prepare and make available for public review an Initial Regulatory Flexibility Analysis (IRFA) that describes the impact of the proposed rule on small entities.

The following paragraphs are a summary of the IRFA for the proposed order:

This action is taken under the authority of the Act, which authorizes a research, education, and promotion program for concrete masonry products, also known as a checkoff program. The checkoff program would be established by an order issued by the Secretary that is subject to approval by an industry referendum. The program would then be carried out by a Board, which would develop research and education programs as well as efforts to promote concrete masonry products in domestic markets. Board activities would be funded by assessments on manufacturers of concrete masonry products, based on the number of masonry units sold each quarter. A proposed order submitted by industry to the Department on April 15, 2020, triggered a referendum deadline of approximately 8 months from submission, and the proposed order must be published in the Federal Register within 90 days of receipt. A succinct statement of the objectives of, and legal basis for, the proposed rule is contained elsewhere in the preamble and is not repeated here.

The proposed order applies to products manufactured on concrete block machines and used for construction. As indicated by the data below and confirmed by industry experts, the industry is dominated by small entities.

The U.S. Small Business Administration size standard to qualify as a small business in this industry is 500 or fewer employees. 5 According to Census data, there were 430 firms and 686 establishments engaged in concrete block and brick manufacturing in 2017. 6 Of these, 401 firms, or 93 percent, employed fewer than 500 employees, and these small firms accounted for 514 establishments, or 75 percent of all establishments, and about 62 percent of industry employment. 7

Large firms represent about 7 percent of all firms and account for 25 percent of plants, about 38 percent of employment, and 39 percent of estimated receipts. This appears to be consistent with the information from industry experts that roughly 5 percent of manufacturers account for 40 percent of production capacity measured by machine cavities. 8 Based on these estimates of share of establishments and machine cavities, we estimate that large employers (500 or more employees) account for 25 to 40 percent of industry production of concrete masonry units and, conversely, that small firms (fewer than 500 employees) account for 60 to 75 percent of production of concrete masonry units.

Assessment costs —Under the proposed order, concrete masonry unit manufacturers would be required to pay assessments to the Board to fund the research, education, and promotion programs of the Board. Assessment rates are dictated by the Act, which specifies assessments of $0.01 per unit sold, up to a maximum of $0.05 per unit sold, with assessments increasing by no more than $0.01 per year.

To estimate the costs to businesses, the Department estimates a range of assessment revenues, with the lower bound calculated using assessments of $0.01 with no increases in future years and the upper bound calculated using the maximum assessment rates permitted under the Act—$0.01 in the first year, increasing by $0.01 in subsequent years to the maximum of $0.05 in the fifth year and thereafter.

To estimate the number of units sold by small entities, the Department relies on industry reports that show there were 1.15 billion concrete masonry units produced in 2018. Assuming small businesses produced 60 to 75 percent of overall production, we estimate that between 690 and 862.5 million units would be produced by small businesses in the first year of the program. Based on these estimates, total estimated assessments on small businesses based on $0.01 per unit produced would be $6.90 million to $8.63 million in the first year.

To estimate a lower bound on expected annual assessment costs, we assume assessments remain constant at $0.01 for 10 years and industry production grows with inflation. Therefore, total assessments on small businesses over the next 10 years is expected to be $6.90 million to $8.63 million per year. The midpoint of this range, $7.76 million, is the Department's lower bound estimate of annual costs to small businesses. This amounts to $19,358 per firm each year.

To estimate an upper bound estimate of costs, we assume the Board institutes the maximum assessment authorized under the legislation, resulting in a $0.01 per unit assessment in year 1, $0.02 in year 2, $0.03 in year 3, $0.04 in year 4, and $0.05 in years 5 through 10. Again, assuming industry production grows with inflation, total assessments on small businesses over the next 10 years would be expected to average $27.60 million to $34.50 million per year. The midpoint of this range, $31.05 million, is the Department's upper bound estimate of annual costs to small businesses. This amounts to an average of $77,431 per firm each year.

Applying the Department's upper bound cost estimate to the receipts estimated by the Census Bureau for this industry, total costs on small businesses represent about 1.1 percent of small business receipts (shown in “Table 3: Block and Brick Manufacturers 2017 by Business Size,” employment size less than 500). Again, this would be the average over the 10-year period. Assessments would be lowest in year 1 and highest in years 5 through 10.

These estimated assessment costs are based on the limited information available for the concrete and brick manufacturers industry. For this analysis, the Department relies on industry estimates for annual unit production. Because unit production is not available by business size, we estimate a range of unit production using establishment data from the U.S. Census Bureau for NAICS industry 327331. Because the number of firms estimated by industry experts differs from the number of firms under NAICS industry 327331, we request comments regarding the number and size of entities covered under the proposed order, including whether production occurs among businesses not classified under NAICS industry 327331.

Reporting costs —In addition to assessments paid on concrete masonry units, there are reporting costs associated with adoption of the proposed order. Under the proposed order, each manufacturer may be required to periodically provide to the Board such information as may be required by the Board, with the approval of the Secretary, which may include, but not be limited to, the following:

1. Number and type of concrete masonry units manufactured;

2. Number and type of concrete masonry units on which an assessment was paid;

3. Name and address of the manufacturer; and

4. Date assessment was paid on each concrete masonry unit sold.

We expect these reporting costs to be incurred with the quarterly assessments paid by manufacturers. We estimate that managers would spend 60 minutes per quarterly report. According to the Bureau of Labor Statistics, the median pay for industrial production managers is $50.71 per hour. 9 Thus, we estimate that firms will pay, on average, $202.84 for reporting costs per year.

Even if the order results in a significant cost for a substantial number of small businesses, these costs are expected to result in benefits to businesses that are at least commensurate with these costs. The assessments pay for investments in product research, education, and promotion programs that are intended to yield direct benefits to concrete product manufacturers in the form of new markets and increased consumer demand.

The Department recognizes that some small businesses with minimal production in the industry may not have the resources to comply with the requirements imposed by the proposed order, and therefore, the Department may consider a de minimis exemption for these small businesses. A de minimis exemption would exclude from the order some small businesses with minimal production, based on measures of unit production, employment, receipts, machine cavities, or other relevant criteria.

A possible de minimis exemption would exclude companies with fewer than five employees. According to Census Bureau data ( see “Table 3: Block and Brick Manufacturers 2017 by Business Size”), these firms represent 13 percent of establishments in the industry, 1 percent of industry employment, and 1 percent of annual receipts for the industry.

Another possible de minimis exemption would exclude companies with fewer than ten employees. According to Census Bureau data (see “Table 3: Block and Brick Manufacturers 2017 by Business Size”), these firms represent 23 percent of establishments in the industry, 4 percent of industry employment, and 3 percent of annual receipts for the industry.

The Department requests comments regarding a possible de minimis exemption.

The Department requests comments on the Initial Regulatory Flexibility Act Analysis. Specifically, comments regarding:

1. Information about concrete masonry unit production, including:

a. Estimated annual production of concrete masonry units for the industry as a whole and by business size;

b. The number and size of entities covered under the proposed order, including whether production occurs among businesses not classified under NAICS industry 327331; and

c. An estimated sales price for concrete masonry units.

2. Whether to include a de minimis exemption and what criteria to use for an exemption; and

3. The approach used to estimate the impact of the proposed order on industry and small businesses and suggestions for alternative approaches.

The ICRs in this proposed rule are being submitted for approval to OMB under the Paperwork Reduction Act of 1995, 44 U.S.C. 3501 et seq. This section contains the new ICRs and the estimated time to fulfill each requirement. There are two new ICRs associated with the proposed order—one dealing with the Board nomination process and a second with the assessment and reporting requirements.

In order to make an informed decision on appointments of members and alternate members to the Board as well as obtaining an appropriate balance on the Board, the Secretary will need adequate information on all candidate nominees. The Department will restrict the information request to that information needed to determine requisite expertise of potential nominees and will include biography, experience, status as a current manufacturer, type of products manufactured, place of business, size of business, statement of interest, and similar background information.

Estimated burden: Public recordkeeping burden for this collection of information is estimated to average 1.0 hour per application.

Respondents: Manufacturers and others associated with the concrete masonry products industry.

Estimated Number of Respondents: 50.

Estimated Number of Responses per Respondent: 1.

Estimated Total Annual Burden on Respondents: 50 hours.

To fulfill the requirement to oversee assessment collection as well as the requirement to maintain adequate records the Secretary will need information to support adequate oversight in these areas. The Department will restrict the information request to that information needed to determine the amount of assessment and will include: The number and type of concrete masonry units manufactured; the number and type of concrete masonry units on which an assessment was paid; the name and address of the manufacturer; manufacturer employee identification number; and the date of assessment payment on each concrete masonry unit sold; and related assessment accounting information. All estimates include the time for reviewing instructions; searching existing data sources; gathering or maintaining the needed data; and reviewing the information.

Estimated burden: Public recordkeeping burden for this collection of information is estimated to average 1 hour per quarterly report.

Respondents: Manufacturers of concrete masonry products.

Estimated Number of Respondents: 690.

Estimated Number of Responses per Respondent: 4 per year.

Estimated Total Annual Burden on Respondents: 2760 hours.

As part of its continuing effort to reduce paperwork and respondent burden, the Department invites the general public and other Federal agencies to comment on proposed and/or continuing information collections, as required by the Paperwork Reduction Act. The Department solicits comments concerning: Whether these ICRs are necessary for the proper performance of the functions of the Department, including whether the information has practical utility; the accuracy of the Department's estimates of the burden of the ICRs; the quality, utility, and clarity of the information to be collected; and whether the burden of collection of information on those who are to respond, including through the use of automated collection techniques or other forms of information technology, may be minimized. The ICR may be viewed on the Reginfo.gov website. Organizations and individuals desiring to submit comments on the collection of information requirements should see the ADDRESSES section of this document. The final rule will respond to any public comments on the ICRs contained in this proposal. Notwithstanding any other provision of the law, no person is required to respond to, and no person will be subject to penalty for failure to comply with, a collection of information subject to the requirements of the PRA, unless that collection of information displays a currently valid OMB control number.

This proposed rule will not significantly affect the quality of the human environment. Therefore, an environmental assessment or Environmental Impact Statement is not required to be prepared under the National Environmental Policy Act of 1969.

Section 14 of the Consumer Product Safety Act (CPSA), as amended by the Consumer Product Safety Improvement Act of 2008 (CPSIA) and Public Law 112-28 (2011), establishes requirements for the testing and certification of products subject to consumer product safety rules under the CPSA, or similar rules, bans, standards, or regulations, under any other Act enforced by the Commission. The domestic manufacturer or the importer of the product must issue a certificate that the product complies with applicable safety standards. Under section 14(a)(2) of the CPSA, the certification of children's products must be based on testing conducted by an accredited third party conformity assessment body (a third party testing laboratory). Section 14(i)(2) of the CPSA directed the Commission to publish a regulation that would “initiate a program by which a manufacturer or private labeler may label a consumer product as complying with the certification requirements” and to establish protocols and standards for:

• Ensuring that a children's product is subject to testing periodically and when there has been a material change in the product's design or manufacturing process, and

• The testing of representative samples to ensure continued compliance, and

• Verifying that a children's product tested by a conformity assessment body complies with applicable children's product safety rules, and

• Safeguarding against the exercise of undue influence on a third party conformity assessment body by a manufacturer or private labeler.

In 2011, in response to the statutory direction, the Commission issued two regulations related to testing: 16 CFR part 1107, “Testing and Labeling Pertaining to Product Certification” (testing regulation or part 1107) and 16 CFR part 1109, “Conditions and Requirements for Relying on Component Part Testing or Certification, or Another Party's Finished Product Certification, to Meet Testing and Certification Requirements” (component part regulation or part 1109). Part 1107 implements the above statutory provisions and specifies the records that must be kept to document the required testing and test results. Part 1109 specifies how manufacturers can use third party testing of component parts of products to certify the compliance of a finished product. The intent of the component part regulation was, in part, to provide flexibility to manufacturers and importers and to reduce the costs and other burdens of testing finished products. The regulation has specific requirements that apply to component part testing for lead, paint, and phthalates requirements. The component part regulation also sets forth requirements for importers and other suppliers for relying upon third party testing and certificates provided by their own suppliers. Finally, this part also specifies record-keeping requirements for the testing of the component parts, and requirements to provide traceability of how the component parts were used in finished products.

When parts 1107 and 1109 were promulgated in 2011, the final regulatory flexibility analysis found that the third party testing requirements in part 1107 would have a significant economic impact on a substantial number of small entities. In contrast, the final regulatory flexibility analysis for the component part regulation in part 1109 found that the regulation would not likely have a significant impact on a substantial number of small entities because component part testing is not mandatory. Thus, the only companies expected to engage in component part testing are companies that believe it will be advantageous to do so. However, OMB determined that both 1107 and 1109 were considered major rules under the Congressional Review Act (CRA). 1 Accordingly, CPSC is conducting a 610 rule review for both regulations.

The Commission has undertaken several burden-reduction efforts since promulgation of the testing and component part regulations. In August 2011, after the proposed testing and component part regulations had been published in the Federal Register , but before issuance of the final regulations, Congress passed Public Law 112-28 (August 12, 2011), “An Act to Provide the Consumer Product Safety Commission with Greater Authority and Discretion in Enforcing the Consumer Product Safety Laws, and for Other Purposes,” which amended various sections of the CPSIA. Among other things, Public Law 112-28 directed the CPSC to seek comment on “opportunities to reduce the cost of third party testing requirements consistent with assuring compliance with any applicable consumer product safety rule, ban, standard, or regulation.” Public Law 112-28 also authorized the Commission to issue new or revised third party testing regulations if the Commission determines “that such regulations will reduce third party testing costs consistent with assuring compliance with the applicable consumer product safety rules, bans, standards, and regulations.” Id. 2063(d)(3)(B).

In response to the statutory charge to pursue burden reduction in Public Law 112-28, the Commission has issued several regulations that make determinations that certain specified materials do not contain prohibited elements or chemicals in excess of the regulated limits, and therefore, component parts made from these materials do not require third party testing for certification. These include the following regulations for materials determinations:

• That most fabrics used in apparel will not contain lead in excess of the regulated limits (16 CFR 1500.91 “Hazardous Substances and Articles: Administration and Enforcement Regulations”);

• That unfinished and untreated wood will not contain the heavy elements regulated by the mandatory toy standard ASTM F963 (16 CFR part 1251 “Toys: Determinations Regarding Heavy Elements Limits for Certain Materials”);

• That some manufactured wood will not contain lead, the chemicals regulated by the mandatory toy standard ASTM F963 and the prohibited phthalates (16 CFR part 1252 “Children's Products, Children's Toys, and Child Care Articles: Determinations Regarding Lead, ASTM F963 Elements, and Phthalates for Engineered Wood Products”);

• That some unfinished manufactured fibers will not contain the chemicals regulated by the toy standard and the prohibited phthalates (16 CFR part 1253 “Children's Toys and Child Care Articles: Determinations Regarding ASTM F963 Elements and Phthalates for Unfinished Manufactured Fibers”); and

• That certain plastics will not contain the prohibited phthalates (16 CFR part 1308 “Prohibition of Children's Toys and Child Care Articles Containing Specified Phthalates: Determinations Regarding Certain Plastics”).

Although CPSC did not issue the above regulations only to address the impact of the testing regulations on small businesses, small businesses have benefitted from the determinations, often even more than their larger counterparts.

In addition to the materials determinations regulations discussed above, the Commission has taken other steps to reduce the testing burdens imposed by 16 CFR part 1107 since promulgation of the regulation. In June 2017, the Commission issued a Request for Information (RFI), “Request for Information on Potentially Reducing Regulatory Burdens without Harming Consumers.” The RFI solicited stakeholder input regarding how to reduce burdens broadly, to include burdens from third party testing. CPSC has implemented several of the recommendations in the RFI regarding reducing third party testing burdens. CPSC has provided sample conformity certificates for use by manufactures and importers; developed a “regulatory robot” on the CPSC website to help small businesses determine the regulatory requirements that apply to their products; and provided additional outreach documents and plain language instructions for small manufacturers on how to comply with CPSC regulations. The Commission continues to explore opportunities to reduce unnecessary burdens related to third party testing requirements while assuring compliance with applicable children's product safety rules.

Section 610(a) of the RFA requires agencies to review regulations within ten years after promulgation if they are expected to have a significant impact on a substantial number of small entities. Because the testing and component part regulations were issued in 2011, the Commission now requests comments to obtain additional information to inform its section 610 review of the testing regulations. 5 U.S.C. 610(a). The purpose of the review is to determine whether such rules should be continued without change, or should be amended, consistent with the stated objectives of applicable statutes, to minimize any significant impact of the rules on a substantial number of small entities. The RFA lists several factors that the agency shall consider when reviewing rules under section 610. These factors are:

• The continued need for the rule;

• The nature of complaints or comments received concerning the rule from the public;

• The complexity of the rule;

• The extent to which the rule overlaps, duplicates or conflicts with other Federal rules, and, to the extent feasible, with state and local governmental rules; and

• The length of time since the rule has been evaluated or the degree to which technology, economic conditions, or other factors have changed in the area affected by the rule.

The statute continues to require third party testing and certification of children's products under section 14 of the CPSA, thus establishing the need for the testing and component part regulations. However, the Commission seeks comment to evaluate the other factors and to determine whether the ongoing impact of the testing and component part regulations are significant for a substantial number of small entities. An important step in the review process involves gathering and analyzing information from affected persons about their experience with the rules and any material changes in circumstances since issuance of the rules. The Commission requests written comments on the adequacy or inadequacy of the testing and component part regulations, their small business impacts, and other relevant issues. The purpose of these questions is to assist commenters in their responses and not to limit the format or substance of their comments. Comments are requested on all issues raised by Section 610 of the RFA.

• Are there any sections of the testing and component part regulations that could be revised to be made less burdensome while still being consistent with assuring compliance? How would these suggested changes affect the burden on manufacturers and importers of children's products, specifically small businesses? Explain your response and provide supporting data, if possible.

• Are there any requirements of the testing and component part regulations that are especially or unnecessarily costly and/or burdensome, particularly to small suppliers of children's products? Please explain your response, and provide supporting data.

• Which requirements in the testing and component part regulations have the greatest impact on testing costs? Which requirements have the lowest impact on testing costs? We are especially interested in any differential impact of the testing requirements on small businesses. Explain your response, and provide supporting data if possible.

• The testing regulation provides general guidelines on what constitutes a sufficient number of samples to provide “a high degree of assurance that the tests conducted for certification purposes accurately demonstrate the ability of the children's product to meet all applicable children's product safety rules.” Is the current flexibility provided in the testing regulation for determining sample size helpful or burdensome to small businesses? Would more specific requirements on what constitutes an appropriate sample size reduce the burden on small businesses?

• The testing regulation provides several options to meet the periodic testing requirements, including options to test whenever there is a material change, every year, every two years, or every three years. Given model lifecycles for children's products that would lead to material changes, are these options sufficiently flexible for small businesses? Are there different options for “periodic testing” that could reduce the burden on small businesses and be consistent with assuring compliance with the applicable safety rules?

• Do testing and component part regulations cause delays in bringing new products to market? Do these impacts particularly affect small businesses? Are there actions CPSC could take to reduce any delay caused by the testing and component part regulations that would still be consistent with assuring compliance with all applicable safety rules?

• Are there particular types of children's products or small businesses that are substantially impacted by the testing and component part regulations? How could the regulations be revised to address these specific products or types of small businesses? Please provide data and specific examples to support your answer.

• Are the recordkeeping requirements in the testing and component part regulations inadequate, or overly burdensome for small businesses?

• Could the recordkeeping requirements in the testing and component part regulations be changed in a way that would reduce the recordkeeping costs for small businesses and still be consistent with assuring compliance with all applicable safety rules? Please explain your response.

• Have manufacturers, importers, and private labelers, particularly small businesses, been using the flexibilities provided in the component part testing rule (16 CFR part 1109) to reduce their third party testing costs ( e.g., relying upon third party testing provided by a supplier to certify products or relying on third party testing of a component part used in more than one model for certification purposes)? If so, in what way? Can you provide estimates of the cost savings provided by the component part regulation?

• Are there particular requirements in the component part regulation that are especially burdensome to small businesses and that limit the ability of small businesses to take advantage of the opportunities for burden reduction that could be offered by the rule? If so, how could we revise the requirements to reduce the burden on small businesses while still assuring compliance with all applicable safety rules?

• Have small businesses had difficulty identifying providers of certified component parts, such as paint, varnishes, fasteners, small parts, and fabrics? If so, are there ways CPSC could make it easier for small businesses to identify available providers of certified component parts?

• The component part regulation has specific requirements for component part testing for lead, phthalates, and paint. Are these requirements clear? If not, how could we make them clearer to small businesses while still assuring compliance with all applicable safety rules?

The testing regulation includes a subpart on labeling. The regulations specify that manufacturers and private labelers of consumer products may provide a label that the product “meets CPSC safety requirements.” Such a label is permitted but not required.

• Are the labeling requirements clear? Could the testing regulation be revised to reduce the burden on small businesses or to increase the ability of small businesses to take advantage of the opportunity to label their products as being compliant with the CPSC safety requirements?

• How have market conditions for children's products changed since 2011 for small businesses? Should the testing and component part regulations change to address these market changes? If so, how?

• Could the testing and component part regulations be changed to address advances in testing technology that have occurred since 2011 that would reduce the burden on small businesses?

• Are there new categories of children's products that have entered the market since 2011 for which the testing and component part regulations are particularly burdensome on small businesses?

• Are the requirements in CPSC's testing and component part regulations well understood by businesses that manufacture or import children's products, particularly small businesses and businesses that build or import children's products infrequently or in small lots? How could the requirements of the testing and component part regulations be more effectively communicated to such businesses?

• CPSC has provided a small business “regulatory robot” and sample Children's Product Certificates and General Certificates of Conformity, among other tools. We conduct periodic free webinars for small businesses. Our website has a list of all the accredited testing labs, which has been updated to make it more easily searchable. Are there other documents, instructional videos, or information of the above nature we could provide that would help small firms comply with the testing and component part regulations?

• To what extent, if any, have children's product manufacturers increased their use of third party testing in response to the third party testing requirements in section 14 of the CPSA and 16 CFR parts 1107 and 1109? Did third party testing replace other types of testing or quality assurance activities that the manufacturers or importers had been using to ensure that their products complied with the applicable product safety rules?

• Is it possible to estimate the overall burden of the testing and component part regulations, perhaps as a percentage of revenue, over and above what businesses would have spent to ensure compliance with the applicable product safety rules in the absence of the testing and component part regulation?

In the Federal Register of May 8, 2019 (84 FR 20060), we announced that we had filed a color additive petition (CAP 9C0315), submitted by CooperVision, 5870 Stoneridge Dr., Suite 1, Pleasanton, CA 94588. The petition proposed to amend the color additive regulations in 21 CFR part 73, Listing of Color Additives Exempt from Certification, to provide for the safe use of disperse orange 3 methacrylamide (CAS Reg. 58142-15-7; CAS name 2-propenamide, 2-methyl- N -[4-[2-(4-nitrophenyl)diazenyl]phenyl]-) as a color additive in silicone-based hydrogel contact lenses. The color additive was intended to copolymerize with various monomers in the contact lens formulation to produce colored contact lenses. Through this notice, we are announcing that CooperVision has withdrawn the petition without prejudice to a future filing (21 CFR 71.6(c)(2)).

On July 16, 2013, DoD, GSA, and NASA published a Request for Information (RFI) in the Federal Register (78 FR 42524) to determine whether there is a distinction between renting and leasing that is useful for the purposes of FAR subpart 7.4. The public comment period closed in September 2013 and 13 respondents provided comments in response to the RFI. A review of the public comments identified that there are differences between renting and leasing in many industries, but there are no standard differences between renting and leasing that span across all industries. As a result of the review, FAR case 2017-017 was opened to clarify the term “lease”, as used in the FAR and a proposed rule was published in the Federal Register on September 5, 2018, at 83 FR 45072; six respondents provided comments in response to the proposed rule.

On October 5, 2018, the FAA Reauthorization Act of 2018 (Pub. L. 115-254) became law and included section 555, “Cost-Effectiveness Analysis of Equipment Rental.” (FAA stands for Federal Aviation Administration.) FAR case 2017-017 was subsequently closed and this FAR case 2019-001 was opened to implement the requirements of section 555. The Civilian Agency Acquisition Council and the Defense Acquisition Regulations Council (the Councils) reviewed the public comments received in response to FAR case 2017-017 in developing this proposed rule and are dispositioned in this notice.

This rule implements section 555 of the FAA Reauthorization Act of 2018, which:

• Requires an agency to acquire equipment using the method of acquisition that is most advantageous to the Government based on a case-by-case analysis of comparative costs and other factors (to include the factors in FAR section 7.401);

• Identifies methods of acquisition that must be considered, at a minimum, in the analysis; and

• Requires the FAR to implement the requirements of the section and identify the factors agencies should or shall consider to perform the case-by-case analysis.

To implement the requirements of the law, described above, this rule proposes to amend FAR subpart 7.4 to: Require the comparison of purchase, short-term rental or lease, long-term rental or lease, interagency acquisition, and agency acquisition agreements with State or local governments as a method of acquisition for equipment; include the term “rent,” where applicable; and add factors to be considered when evaluating various methods of acquisition.

A discussion of the comments received under proposed rule 2017-017 is provided as follows:

Comment: Several of the respondents expressed support for the rule.

Response: The Councils acknowledge the public support for the rule.

Comment: A respondent advised that the proposed rule should be modified to incorporate section 555 of the FAA Reauthorization Act of 2018.

Response: FAR case 2017-017 was closed and rolled into FAR case 2019-001, specifically to implement section 555 of the FAA Reauthorization Act of 2018.

Comment: A number of respondents suggested the following additional factors that could be considered in the analysis and decision to rent, lease, or purchase equipment—

• How long the equipment is needed and how long it will be in use (or its useful life);

• Cancellation, extension, and early return conditions in the agreement;

• Maintenance requirements for the equipment and the cost to the Government under various acquisition methods, to include any maintenance requirements specific to an industry ( e.g., test and measurement equipment);

• Whether the agreement includes an option to purchase the equipment, and, if so, the cost benefit to the Government in such an option;

• Repair, transport, storage, insurance, environmental and licensing requirements for the equipment and the cost to the Government under various acquisition methods;

• Whether the equipment can be swapped out or exchanged;

• Availability or delivery of equipment to meet Government needs and timeline.

Response: While section 555 serves as the main impetus for this proposed rule, the suggestions and comments on FAR case 2017-017 have been taken into account and additional factors have been added to FAR 7.401(b)(1) and (b)(2).

Comment: Several respondents expressed concern that the proposed rule did not clarify the differences between renting and leasing, including those specific to the heavy equipment industry, and that without this recognition, the Government will waste money by grouping these two categories together.

Response: Additional considerations unique to renting have been added to FAR 7.401(b)(1) and (b)(2). However, the proposed rule does not differentiate between rent and leasing because there are no standard differences between these practices that span across all industries. As a result, the recommended clarification could have the unintended consequence of creating new confusion.

Comment: Several respondents recommended implementing a separate “rental method” of acquisition, in order to identify the unique properties and benefits of renting. A respondent asserts that codification of a definitive definition of “rental method”, “equipment rental”, and “lease method” is necessary for contracting officers to understand the differences between both methods, and impossible for the Government to execute a rental agreement.

Response: The purpose of FAR subpart 7.4 is to facilitate an analysis and a decision on whether it is in the best interest of the Government to purchase a piece of equipment versus obtaining the equipment via any other non-purchase method. As a result, this case includes the word “rent” throughout FAR subpart 7.4 text, to ensure that contracting officers are aware that rental agreements are an acceptable non-purchase acquisition method for equipment, and implements additional factors to be considered in the analysis that account for the unique benefits that rental agreements may provide for the Government.

Comment: A respondent advised that defining the difference between renting and leasing will help agencies meet their small business goals, as a majority of heavy equipment leases would fall under the simplified acquisition threshold and; therefore, be awarded to small businesses.

Response: This rule proposes to add the word “rent” throughout the text of FAR subpart 7.4, as appropriate, to ensure contracting officers are aware that rental agreements are an acceptable non-purchase method of equipment acquisition.

Comment: A respondent advised that providing acquisition officials with the guidance in OMB Circular A-94 will cause confusion, as the guidance does not apply to short-term rentals and eliminates the possibility that an acquisition official would consider rental as an acquisition option since the proposed rule makes rentals and leases synonymous.

Response: The purpose of referring to the OMB Circular is to make the contracting officer aware of additional information that may be relevant in determining the method of acquisition that is most advantageous to the Government. The reference is not intended to preclude consideration of rent as a method of acquisition, but respondents to the proposed rule are encouraged to offer suggested clarifications.

Comment: A respondent suggested that the GSA website provided to contracting officers for additional information may be too narrow of a resource, as it pertains to a program that is akin to a hardware store, home improvement center, or are maintenance, repair, and operations supplies. The respondent recommends providing another resource that can assist agencies with rental, lease, or purchase decisions for a broader scope of products.

Response: The GSA customer service information and website at FAR 7.403(b)(1) and (b)(2) are provided as current sources Federal agencies may use when they need assistance with a buy, rent, or lease decision. Agencies may provide supplemental guidance, as needed, to meet their unique needs and requirements.

Comment: A respondent recommended amending the GSA Security Schedule 84 to permit leasing of equipment, by Federal, State, and Local law enforcement and emergency response agencies, through the schedule contracts and make conforming changes within the contract that clarify the applicable terms and conditions that apply when purchasing versus leasing equipment under the Schedule.

Response: This comment is outside the scope of FAR case 2017-017 and the scope of the current proposed rule.

This proposed rule does not create any new provisions or clauses, nor does it change the applicability of any existing provisions or clauses included in solicitations and contracts valued at or below the SAT, or for commercial items, including COTS items.

Executive Orders (E.O.s) 12866 and 13563 direct agencies to assess all costs and benefits of available regulatory alternatives and, if regulation is necessary, to select regulatory approaches that maximize net benefits (including potential economic, environmental, public health and safety effects, distributive impacts, and equity). E.O. 13563 emphasizes the importance of quantifying both costs and benefits, of reducing costs, of harmonizing rules, and of promoting flexibility. This is not a significant regulatory action and, therefore, was not subject to review under section 6(b) of E.O. 12866, Regulatory Planning and Review, dated September 30, 1993. This proposed rule is not a major rule under 5 U.S.C. 804.

The rulemaking is not subject to E.O. 13771, because this proposed rule is not a significant regulatory action under E.O. 12866.

DoD, GSA, and NASA do not expect this rulemaking to have a significant economic impact on a substantial number of small entities within the meaning of the Regulatory Flexibility Act, 5 U.S.C. 601, et seq. However, an initial regulatory flexibility analysis has been performed and is summarized as follows:

The Regulatory Secretariat has submitted a copy of the IRFA to the Chief Counsel for Advocacy of the Small Business Administration. A copy of the IRFA may be obtained from the Regulatory Secretariat. DoD, GSA and NASA invite comments from small business concerns and other interested parties on the expected impact of this rulemaking on small entities.

DoD, GSA, and NASA will also consider comments from small entities concerning the existing regulations in subparts affected by this proposed rule consistent with 5 U.S.C. 610. Interested parties must submit such comments separately and should cite 5 U.S.C. 610 (FAR Case 2019-001) in correspondence.

The proposed rule does not contain any information collection requirements that require the approval of the Office of Management and Budget under the Paperwork Reduction Act (44 U.S.C. chapter 35).

Therefore, DoD, GSA, and NASA propose amending 48 CFR part 7 as set forth below:

The revised text reads as follows:

The revised and added text reads as follows: