Animal and Plant Health Inspection Service
Food Safety and Inspection Service
Foreign-Trade Zones Board
International Trade Administration
National Oceanic and Atmospheric Administration
Bonneville Power Administration
Federal Energy Regulatory Commission
Food and Drug Administration
Health Resources and Services Administration
National Institutes of Health
Coast Guard
Federal Emergency Management Agency
Bureau of Safety and Environmental Enforcement
Fish and Wildlife Service
National Park Service
Drug Enforcement Administration
Federal Bureau of Investigation
Employment and Training Administration
Workers Compensation Programs Office
Federal Aviation Administration
Federal Highway Administration
Federal Motor Carrier Safety Administration
Federal Railroad Administration
Federal Transit Administration
Comptroller of the Currency
Internal Revenue Service
United States Mint
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Office of the Comptroller of the Currency (OCC), Board of Governors of the Federal Reserve System (Board), and Federal Deposit Insurance Corporation (FDIC).
Final rule.
The OCC, Board, and FDIC (together, the agencies) are adopting as final the revisions to the definition of eligible retained income made under the interim final rule published in the
The final rule is effective January 1, 2021.
In light of recent disruptions in economic conditions caused by the coronavirus disease 2019 (COVID-19) and current strains in U.S. financial markets, the Office of the Comptroller of the Currency (OCC), Board of Governors of the Federal Reserve System (Board), and Federal Deposit Insurance Corporation (FDIC) (together, the agencies) published an interim final rule in the
In this final rule, the agencies are adopting as final and without change
Under the capital rule, a banking organization
Banking organizations under the capital rule are generally subject to a fixed capital conservation buffer requirement, composed solely of common equity tier 1 capital, of greater than 2.5 percent of risk-weighted assets. On March 4, 2020, the Board adopted a final rule that simplified the Board's regulatory capital framework for large bank holding companies and U.S. intermediate holding companies of foreign banking organizations with the introduction of a stress capital buffer requirement (SCB final rule).
The agencies established the capital buffer requirements to encourage better capital conservation by banking organizations and to enhance the resilience of the banking system during stress periods.
Under the capital rule, if a banking organization's capital ratios fall within its applicable minimum-plus-buffer requirements, the maximum amount of capital distributions it can make is a function of its eligible retained income.
In December 2016, the Board issued a final rule (TLAC rule) to require U.S. GSIBs and covered IHCs to maintain a minimum TLAC amount, consisting of minimum amounts of long-term debt (LTD) and tier 1 capital.
The TLAC rule applies to U.S. GSIBs and covered IHCs because the failure or material financial distress of these companies has the greatest potential to disrupt U.S. financial stability.
A TLAC covered company with a TLAC level that falls below the applicable minimum-plus-buffer requirements faces limitations on
Prior to the issuance of TLAC interim final rule, the TLAC rule used the same definition of eligible retained income for purposes of the TLAC buffer as the definition used under the Board capital rule prior to the adoption of the capital interim final rule.
The spread of COVID-19 has disrupted economic activity in the United States, causing significant volatility in U.S. financial markets. The magnitude and persistence of COVID-19's overall effect on the economy remain uncertain. In light of these developments, banking organizations may experience a sudden and unanticipated decline in capital ratios.
In March 2020, the agencies issued the capital interim final rule, which revised the definition of eligible retained income to the greater of (1) a banking organization's net income for the four preceding calendar quarters, net of any distributions and associated tax effects not already reflected in net income, and (2) the average of a banking organization's net income over the preceding four quarters.
The capital interim final rule's changes to the definition of eligible retained income allow banking organizations to more freely use their capital and leverage buffers and supports banking organizations' lending activity and other financial intermediation activities to avoid compounding negative impacts on the financial markets.
The revised definition of eligible retained income under the capital interim final rule applies to all of a banking organization's buffer requirements, including the fixed greater than 2.5 percent capital conservation buffer and, if applicable, the countercyclical capital buffer, as well as, for global systemically important bank holding companies, the GSIB surcharge, and enhanced supplementary leverage ratio buffer. Once the stress capital buffer requirements for covered holding companies under the SCB final rule apply, the revised definition would also apply to all parts of a covered holding company's buffer requirements. The agencies believe that having one definition of eligible retained income for all banking organizations under the capital rule simplifies the regulatory capital framework and ensures fairness across banking organizations of all sizes.
In addition, the revised definition of eligible retained income under the capital interim final rule assists in the ability of S-corporation banking organizations to provide dividends to shareholders in order to meet their pass-through tax liabilities. S-corporation banking organizations do not pay federal income taxes. Instead, income and losses of an S-corporation are attributed to shareholders, potentially increasing their personal tax liability when the S-corporation has income and potentially reducing their personal tax liability when the S-corporation has losses. In a situation where the S-corporation has income but does not pay dividends, its shareholders are responsible for meeting their increased personal tax liability using their own resources. When an otherwise adequately capitalized S-corporation banking organization is restricted from making dividends because one or more of its capital ratios breach its buffer requirements, a situation can arise in which the banking organization's dividends to its shareholders would be insufficient to pay their share of taxes on the banking organization's income.
The agencies encourage banking organizations to make prudent decisions regarding capital distributions.
The COVID-19 stress period has presented analogous concerns under the TLAC rule to those described above around buffer use and continued financial intermediation. That is, in light of developments in connection with COVID-19, TLAC covered companies rule may experience a sudden and unanticipated decline in TLAC and, prior to the issuance of the TLAC interim final rule, the Board was similarly concerned that the mechanics around buffer requirements set forth in the TLAC rule did not reflect the intended gradual manner in which capital distribution restrictions applied. A modest reduction in TLAC could result in sudden and severe limitations on capital distributions, undermining a TLAC covered company's ability to use its TLAC buffer and creating a strong incentive to limit lending and other financial intermediation activities, thereby deterring the company from continued lending to creditworthy businesses and households during a stress period.
In March 2020, the Board issued the TLAC interim final rule so that the definition of eligible retained income under the TLAC rule paralleled the definition of the term under the Board capital rule. Specifically, the TLAC interim final rule revises the definition of eligible retained income under the TLAC rule to mean the greater of (1) a TLAC covered company's net income for the four preceding calendar quarters, net of any distributions and associated tax effects not already reflected in net income, and (2) the average of a TLAC covered company's net income over the preceding four quarters. The Board adopted this modified definition with the intent to support TLAC covered companies' lending activity and other financial intermediation activities and avoid compounding impacts on the financial markets. The revised definition applies with respect to all TLAC buffer requirements under the TLAC rule.
The agencies received five public comment letters on the capital interim final rule, and the Board received two public comments on the TLAC interim final rule.
Some commenters on the capital interim final rule supported the change to the definition of eligible retained income in the capital rule, indicating that flexibility provided by the change will help banking organizations continue to lend through the COVID-19 crisis. One commenter indicated that the capital interim final rule would assist community banking organizations organized as S-corporations to meet tax obligations and still raise capital as needed. Another commenter was supportive of the capital interim final rule's application of a consistent definition of eligible retained income across banking organizations of all sizes and suggested that the new definition will add consistency to the capital rule while balancing the need for banking organizations to lend to borrowers affected by COVID-19 and still maintain general safety and soundness.
Other commenters opposed the change to the definition of eligible retained income in the capital interim final rule and advocated that the agencies be more prescriptive in compelling banking organizations to take actions to conserve capital or continue lending, such as prohibiting capital distributions while the COVID-19 crisis continues.
The agencies note that the capital buffer requirements do restrict capital distributions. As described above, if a banking organization's capital or leverage ratios fall within its applicable minimum-plus-buffer requirements, the maximum amount of capital distributions it can make is limited as a percentage of its eligible retained income, as defined in the capital rule. Accordingly, the capital buffer requirements compel banking organizations to increasingly constrain distributions as their regulatory capital ratios approach their applicable minimums. For instance, a banking organization in or below the bottom quartile of its buffer requirement may not make any capital distributions without prior approval from its primary Federal regulator.
The revised definition of eligible retained income under the final rule facilitates banking organizations' use of their buffers as intended by ensuring that the limits on capital distributions apply gradually. The revised definition reduces the incentive for banking organizations to limit their lending and other financial intermediation activities in order to avoid facing abrupt limitations on capital distributions.
The comment letters addressing the TLAC interim final rule generally opposed the Board's change to the definition of eligible retained income and advocated for additional restrictions on capital distributions. These comments closely aligned with similar comments received in connection with the capital interim final rule.
A commenter to the TLAC interim final rule suggested that TLAC covered companies that utilize U.S. Treasury or Federal Reserve lending facilities should not be able to apply the revised definition of eligible retained income since it would potentially allow for greater distributions while simultaneously taking advantage of government support. Additionally, this commenter suggested that TLAC covered companies should be subject to minimum requirements for lending and limits on executive bonuses and share repurchases in order to ensure capital distributions enhance their ability to contribute to the economic recovery.
Another commenter to the TLAC interim final rule indicated that, given the uncertainties surrounding COVID-19 and potential economic effects, TLAC covered companies should be taking actions to conserve capital. This commenter asserted that the TLAC interim final rule may pose risks to safety and soundness because capital distributed will not be available to absorb future losses of unknown severity. Further, the commenter expressed doubt that the TLAC interim final rule would achieve the Board's intent of promoting lending to the economy. The commenter concluded that the best way to promote lending would be for the Board to prohibit capital distributions by TLAC covered companies for the duration of the crisis. In addition, the commenter requested that the Board delay implementation of the revised definition of eligible retained income until after the crisis has passed.
The revised definition of eligible retained income under the TLAC interim final rule facilitates TLAC covered companies' use of their buffers as intended by ensuring that the limits on capital distributions apply gradually. The revised definition reduces the incentive for TLAC covered companies to limit their lending and other financial intermediation activities in order to avoid facing abrupt limitations on capital distributions.
For the reasons discussed above, the final rule adopts the definition of eligible retained income unchanged from the capital interim final rule, and the TLAC interim final rule. Accordingly, under the final rule, eligible retained income for purposes of the agencies' capital rule and the Board's TLAC rule is defined as the greater of (1) a banking organization's or TLAC covered company's net income (as applicable) for the four preceding calendar quarters, net of any distributions and associated tax effects not already reflected in net income, and (2) the average of a banking organization's or TLAC covered company's net income (as applicable) over the preceding four quarters.
In ordinary economic circumstances, many banking organizations will distribute a significant portion of their net income and retain the rest to support growth. As banking organizations enter stress periods, the restrictions in the capital rule and TLAC rule, as applicable, limit distributions and help to preserve capital and support lending. However, if the limits to distributions are too restrictive, banking organizations can face a sharp increase in their distribution limitations when their applicable ratios fall to certain levels. This may create an incentive for banking organizations to reduce lending or take other actions to avoid using their buffers. The revised definition of eligible net income in the final rule
The definition of eligible retained income affects the distributions of banking organizations operating within their applicable minimum-plus-buffer requirements. It does not have an impact on minimum capital or TLAC requirements,
For purposes of Congressional Review Act, the Office of Management and Budget (OMB) makes a determination as to whether a final rule constitutes a “major” rule.
The Congressional Review Act defines a “major rule” as any rule that the Administrator of the Office of Information and Regulatory Affairs of the OMB finds has resulted in or is likely to result in (A) an annual effect on the economy of $100,000,000 or more; (B) a major increase in costs or prices for consumers, individual industries, Federal, State, or local government agencies or geographic regions, or (C) significant adverse effects on competition, employment, investment, productivity, innovation, or on the ability of United States-based enterprises to compete with foreign-based enterprises in domestic and export markets.
As required by the Congressional Review Act, the agencies will submit the final rule and other appropriate reports to Congress and the Government Accountability Office for review.
The Paperwork Reduction Act of 1995 (44 U.S.C. 3501-3521) (PRA) states that no agency may conduct or sponsor, nor is the respondent required to respond to, an information collection unless it displays a currently valid OMB control number. In connection with the capital interim final rule, the agencies made revisions to their current information collections for the Consolidated Reports of Condition and Income (Call Reports) (FFIEC 031, FFIEC 041, and FFIEC 051). The OMB control numbers for the agencies are: OCC OMB No. 1557-0081; Board OMB No. 7100-0036; and FDIC OMB No. 3064-0052. OMB has approved these revisions and the agencies are seeking comment in a separate
Also, in connection with the capital interim final rule, the Board temporarily revised the Consolidated Financial Statements for Holding Companies (FR Y-9; OMB No. 7100-0128) to reflect the changes made in the capital interim final rule, and invited comment on a proposal to extend that collection of information for three years, with revision. No comments were received regarding this proposal under the PRA. The Board has now extended the FR Y-9 reports for three years, with revision, as proposed, to align the reporting instructions with this final rule. The Board has reviewed the revisions to the FR Y-9C pursuant to authority delegated by the OMB and will submit information collection burden estimates to OMB to finalize the revisions. All of the updates to the FR Y-9C noted in the interim final rule should be minimal and result in zero estimated net change in hourly burden.
(1)
FR Y-9C (non-advanced approaches (AA) HCs community bank leverage ratio (CBLR)) with less than $5 billion in total assets—71,
FR Y-9C (non AA HCs CBLR) with $5 billion or more in total assets—35,
FR Y-9C (non AA HCs non-CBLR) with less than $5 billion in total assets—84,
FR Y-9C (non AA HCs non-CBLR) with $5 billion or more in total assets—154,
FR Y-9C (AA HCs)—19,
FR Y-9LP—434,
FR Y-9SP—3,960,
FR Y-9ES—83,
FR Y-9CS—236.
FR Y-9C (non AA HCs CBLR) with less than $5 billion in total assets—29.17,
FR Y-9C (non AA HCs CBLR) with $5 billion or more in total assets—35.14,
FR Y-9C (non AA HCs non-CBLR) with less than $5 billion in total assets—41.01,
FR Y-9C (non AA HCs non-CBLR) with $5 billion or more in total assets—46.98,
FR Y-9C (AA HCs)—48.80,
FR Y-9LP—5.27,
FR Y-9SP—5.40,
FR Y-9ES—0.50,
FR Y-9CS—0.50.
FR Y-9C (non-advanced approaches HCs with less than $5 billion in total assets), FR Y-9C (non-advanced approaches HCs with $5 billion or more in total assets), FR Y-9C (advanced approaches HCs), and FR Y-9LP: 1.00 hour; FR Y-9SP, FR Y-9ES, and FR Y-9CS: 0.50 hours.
FR Y-9C (non AA HCs CBLR) with less than $5 billion in total assets—8,284,
FR Y-9C (non AA HCs CBLR) with $5 billion or more in total assets—4,920,
FR Y-9C (non AA HCs non-CBLR) with less than $5 billion in total assets—13,779,
FR Y-9C (non AA HCs non-CBLR) with $5 billion or more in total assets—28,940,
FR Y-9C (AA HCs)—3,709,
FR Y-9LP—9,149,
FR Y-9SP—42,768,
FR Y-9ES—42,
FR Y-9CS—472.
FR Y-9C—1,452,
FR Y-9LP—1,736,
FR Y-9SP—3,960,
FR Y-9ES—42,
FR Y-9CS—472.
The Regulatory Flexibility Act (RFA) requires an agency to consider whether the rules it proposes will have a significant economic impact on a substantial number of small entities. The RFA requires an agency to prepare a final regulatory flexibility analysis when it promulgates a final rule after being required to publish a general notice of proposed rulemaking. As discussed previously, the agencies have decided to adopt, without changes, revisions to the definition of eligible retain income made under the capital interim final rule and the TLAC interim final rule. There was no general notice of proposed rulemaking associated with this final rule. Accordingly, the agencies have concluded that the RFA's requirements relating to initial and final regulatory flexibility analysis do not apply to the promulgation of this final rule.
Pursuant to section 302(a) of the Riegle Community Development and Regulatory Improvement Act (RCDRIA),
Section 722 of the Gramm-Leach-Bliley Act
As a general matter, the Unfunded Mandates Act of 1995 (UMRA), 2 U.S.C. 1531
By order of the Board of Governors of the Federal Reserve System.
By order of the Board of Directors.
Farm Credit Administration.
Final rule.
The Farm Credit Administration (FCA, we, or our) is amending our regulations governing how a Farm Credit bank presents information on its related associations when preparing annual bank financial statements on a stand-alone basis. The final rule provides two presentation options when disclosing related association financial information in an annual bank report: By footnote or attached in a supplement.
This regulation will be effective 30 days after publication in the
The objective of the final rule is to improve shareholder access to district financial information by providing an additional method of presenting financial information on a bank's related associations to those banks preparing annual financial statements on a stand-alone basis.
The Farm Credit Act of 1971 (Act), as amended,
We issued a proposed rule on December 12, 2019, asking for comments on proposed changes to 12 CFR 620.2.
We received two comment letters on our proposed changes to § 620.2(g)(2). One letter came from CoBank, ACB (CoBank), a System institution, and one letter came from the American Bankers Association (ABA). Both letters supported FCA's objective for the rulemaking but asked for changes to what was proposed. We discuss these comments to our proposed rule and our responses below. However, after consideration of all the comments, we are making no changes and final all provisions as proposed.
We proposed requiring the inclusion of the combined districtwide financial information via a supplement to be considered part of the annual report. CoBank expressed support for the flexibility of using either a supplement or footnote for discussion of districtwide financial information within the bank's annual report. However, CoBank requested removal of the proposed requirement that the supplement be considered part of the annual bank stand-alone report, asking that the supplement be a separate report. CoBank gave several reasons for the request and we address each of the reasons given by CoBank later in this preamble, but generally respond here by explaining that the supplement was proposed as an alternative presentation format to using a footnote as provided under our existing regulations. In keeping with this existing regulatory requirement, we proposed keeping the combined districtwide financial information as an essential part of the annual report itself, whether presented as a footnote or supplement.
We explained in the preamble to the proposed rule that use of a supplement instead of a footnote was not creating a new report, but merely giving the alternative presentation method requested by the four Farm Credit banks.
CoBank commented that it believes the inclusion of the supplement as part of the bank's annual report renders the bank's disclosures misleading to its investors because the bank has lending activities beyond the associations. CoBank has the unique status of being the only System institution possessing Title III authorities, resulting in Title III voting stockholders that are not System associations—these stockholders are called “cooperative association stockholders” (CA stockholders). CoBank explained that, because the districtwide disclosures exclude its Title III lending activities, an investor might interpret the different disclosure treatment as being required due to accounting or financial reasons. CoBank also claimed its CA shareholders could mistakenly conclude there are multi-tiered classes of common stockholders due both to the heightened prominence of the district financial information resulting from use of a supplement over a footnote and the equity interests of this group of stockholders not being reflected in the districtwide information.
We disagree with CoBank's stated concern. A clearly presented supplement or footnote would label the information in a manner to avoid an investor or shareholder misreading the data. Although CoBank has both System association shareholders and CA stockholders, the districtwide financial information presented in a supplement or footnote further supports the bank's discussion of the components of its operations. Throughout its annual report, CoBank discusses the distinctions between its association shareholders and CA stockholders. The disclosure of districtwide financial information continues the bank's efforts to clarify its operations to its association shareholders and CA stockholders by reducing confusion on its district operations. In addition, both the footnote and the supplement specify the scope of the financial information presented, which avoids confusion with CoBank's lending activities with CA stockholder entities.
CoBank objected to distributing the supplement concurrently with the annual report because receipt of the districtwide information may be delayed, making the entire annual report late. CoBank stated that any delay in issuing the annual report could adversely affect CoBank's credibility in the capital markets, which in turn could imperil access to third-party capital resources. CoBank added that it envisioned sending both items together except when there was a delay in obtaining the districtwide data.
As the funding bank for its associations, we believe CoBank can minimize the potential for financial reporting delays and other issues at its related associations. By using its ongoing monitoring and other supervisory activities, each bank can identify and assess the impact of potential delays and other issues on the preparation of annual reports and take proactive steps to minimize the potential consequences should a delay or other issue occur. Further, effective internal controls over financial reporting at a bank and its related associations reduces the likelihood of delays. We encourage the banks to proactively utilize measures that improve its districtwide financial reporting processes, while decreasing any issuance risks. Separately, investors from the capital markets, just like System shareholders, must obtain timely, reliable financial information to make informed investment decisions when purchasing System securities. We
We proposed clarifying that the current § 620.2(g)(2) option for banks to issue the related associations' financial information on an unaudited basis extends to all the financial information provided for the related associations, whether in a footnote or supplement. We also proposed language to specify that all information provided through use of either a footnote or a supplement would be considered part of the bank's annual report and therefore included in the distribution, signature, certification, and internal control assessments of the annual report. CoBank questioned treating the supplement as part of the annual report's financial certification when separate auditing protocols are applied to the bank only financial information. CoBank explained that it appeared inappropriate to include unaudited districtwide financial information within the report when the bank-only financial information is audited. CoBank added that it had no disagreement with the districtwide information being unaudited, only with treating it as part of the annual report.
We disagree with CoBank's comment that the bank's annual reports, which contain both audited and unaudited information, is contradictory or misleading. The rule does not change the current regulatory provision that the combined bank and association financial information may be unaudited, nor does it change the requirement for the bank to disclose the basis of presentation for the districtwide financial information. Additionally, the bank-only component of the annual report also contains both audited and unaudited financial information. For example, management's discussion and analysis is a required unaudited element, whereas a bank's financial statements are an audited element of the annual report. We also remark that Generally Acceptable Accounting Principles allow the inclusion of both audited and unaudited information in an annual report. As a result, we believe our rule provides consistent application of accounting and reporting standards across all elements of a bank's annual report. Also, we believe inclusion of districtwide financial information within the annual report, as either a footnote or supplement, bolsters the disclosure purpose of the annual report.
In the preamble to the proposed rule we listed our expectations regarding the contents of the districtwide information provided as part of a bank's annual report. The ABA expressed strong support for increasing districtwide disclosures and asked that the recommended information listed in the preamble to the proposed rule be required and issued in a tabular format to permit more extensive comparison of association financial results within the bank's district. The preamble did not discuss or propose the recommended information as regulatory text and thus we do not feel that it would be appropriate to now add these recommendations as new requirements for the final rule. We do not believe that a prescriptive approach regarding the contents of the districtwide information provided as part of a bank's annual report is appropriate. Rather, while some general uniformity is appropriate, FCA recognizes that districtwide financial disclosures may vary among the banks. We also reiterate our expectations that district financial information at a minimum, include:
• The nature of business relationships between System entities within the bank's district;
• Summary of District financial information for the preceding three years;
• Summary of district loan portfolio, discussing concentration risks and significant changes in credit quality, nonperforming assets, past due loans, loan loss allowance and reserves, and loan aging analysis within the district as compared to previous years.
• A description of combined association investments;
• Districtwide capital levels and regulatory ratios;
• Summary of key districtwide income statement line items and profitability measures; and
• A description of any qualified and nonqualified districtwide defined pension plan(s), including each plan's current funding status, accrued benefit obligation and projected benefit obligation, and key actuarial assumptions.
We believe an annual report, with the above list of items, will provide the most meaningful transparency on the financial condition of each Farm Credit District.
The ABA also asked that the rule require increased discussion within the annual report of supervisory and enforcement actions. FCA existing regulation § 620.5(c) currently requires the disclosure of enforcement actions as part of an annual report. We proposed no changes to this rule provision so are not making any changes in response to the comment.
Pursuant to section 605(b) of the Regulatory Flexibility Act (5 U.S.C. 601
Under the provisions of the Congressional Review Act (5 U.S.C. 801
Accounting, Agriculture, Banks, Banking, Reporting and recordkeeping requirements, Rural areas.
For the reasons stated in the preamble, part 620 of chapter VI, title 12 of the Code of Federal Regulations are amended as follows:
Secs. 4.3, 4.3A, 4.19, 5.9, 5.17, 5.19 of the Farm Credit Act (12 U.S.C. 2154, 2154a, 2207, 2243, 2252, 2254); sec. 424 of Pub. L. 100-233, 101 Stat. 1568; sec. 514 of Pub. L. 102-552, 106 Stat. 4102.
(g) Each Farm Credit institution shall present its reports in accordance with generally accepted accounting principles and in a manner that provides the most meaningful disclosure to shareholders.
(1) Any Farm Credit institution that presents its annual and quarterly financial statements on a combined or consolidated basis shall also include in the report the statement of condition and statement of income of the
(2) Any Farm Credit bank that prepares its annual financial statements on a stand-alone basis must also provide financial information on its related associations as part of its annual report. The information on the related associations must be presented on a combined basis with the bank's financial information and, at a minimum, include both a condensed statement of condition and a statement of income. The combined bank and association financial information may either be in the footnotes of the bank's annual report or located in a supplement to the report. All combined information provided through either a footnote or a supplement will be considered part of the bank's annual report, subject to the same annual report preparation, distribution, and accuracy requirements of part 620.
(i) The combined bank and association financial information may be unaudited but must disclose the basis of presentation if different from accounting policies used for the bank-only financial statements.
(ii) If the combined bank and association financial information is presented in the form of a supplement, the supplement must be referenced within the bank's annual report and accompany the annual report when distributed.
Federal Aviation Administration (FAA), Department of Transportation (DOT).
Final rule; request for comments.
The FAA is adopting a new airworthiness directive (AD) for certain Airbus Helicopters Model SA-365N, SA-365N1, AS-365N2, AS 365 N3, EC 155B, EC155B1, AS350B3, AS355F, AS355F1, AS355F2, AS355N, AS355NP, EC130B4, and EC130T2 helicopters. This AD requires inspecting the main rotor (M/R) servo actuators, and depending on the inspection results, replacing the affected part, applying a slippage mark, and reporting information. This AD was prompted by an incident of a sudden, strong nose-up attitude followed by intensive vibrations and increased loads on the flight controls during a cruise flight. The actions of this AD are intended to address an unsafe condition on these products.
This AD becomes effective October 23, 2020.
The Director of the Federal Register approved the incorporation by reference of certain documents listed in this AD as of October 23, 2020.
The FAA must receive comments on this AD by November 23, 2020.
You may send comments by any of the following methods:
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•
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•
You may examine the AD docket on the internet at
For service information identified in this final rule, contact Airbus Helicopters, 2701 N Forum Drive, Grand Prairie, TX 75052; telephone 972-641-0000 or 800-232-0323; fax 972-641-3775; or at
Matthew L. Thompson, Aerospace Engineer, DSCO Branch, Compliance & Airworthiness Division, FAA, 10101 Hillwood Pkwy., Fort Worth, TX 76177; telephone 817-222-5251; email
This AD is a final rule that involves requirements affecting flight safety, and the FAA did not provide you with notice and an opportunity to provide your comments prior to it becoming effective. However, the FAA invites you to participate in this rulemaking by submitting written comments, data, or views. The most helpful comments reference a specific portion of the AD, explain the reason for any recommended change, and include supporting data. To ensure the docket does not contain duplicate comments, commenters should send only one copy of written comments, or if comments are filed electronically, commenters should submit them only one time.
Except for Confidential Business Information (CBI) as described in the following paragraph, and other information as described in 14 CFR 11.35, the FAA will file in the docket all comments received, as well as a report summarizing each substantive public contact with FAA personnel concerning this rulemaking during the comment period. The FAA will consider all the comments received and may conduct additional rulemaking based on those comments.
Confidential Business Information (CBI) is commercial or financial information that is both customarily and actually treated as private by its owner. Under the Freedom of Information Act (FOIA) (5 U.S.C. 552), CBI is exempt from public disclosure. If your comments responsive to this final rule contain commercial or financial information that is customarily treated as private, that you actually treat as private, and that is relevant or responsive to this final rule, it is important that you clearly designate the
EASA, which is the Technical Agent for the Member States of the European Union, has issued EASA AD No. 2019-0184, dated July 29, 2019, to correct an unsafe condition for Airbus Helicopters (AH), formerly Eurocopter, Eurocopter France, Aerospatiale, Sud Aviation, Model SA 365 N, SA 365 N1, AS 365 N2, AS 365 N3, EC155 B and EC155 B1 helicopters, AS 350 B3 helicopters if equipped with dual hydraulic system (OP 3346 or OP 3082), EC 130 B4 and EC 130 T2 helicopters, and AS355 F, AS355 F1, AS355 F2, AS355 N and AS355 NP helicopters. EASA advises that a Model AS 365 N3 helicopter experienced a sudden, strong nose-up attitude followed by intense vibrations and increased loads on the flight controls during a cruise flight. Following an emergency landing, the post-flight visual inspection of the front left-hand M/R servo actuator showed that the threaded-shouldered bushing holding the lower end-fitting was uncoupled from the actuator body. EASA further advises that other helicopter models are affected due design similarity of the installed M/R servo actuators. EASA also advises that this condition, if not detected and corrected, could lead to loss of control of the helicopter.
Accordingly, the EASA AD requires a one-time inspection of each M/R servo actuator for correct installation and, depending on the findings, replacing the affected part or applying a slippage mark. The EASA AD also requires inspecting the slippage mark for misalignment and, depending on the findings replacing the affected part. EASA considers its AD an interim action and states that further AD action may follow.
These helicopters have been approved by EASA and are approved for operation in the United States. Pursuant to the FAA's bilateral agreement with the European Union, EASA has notified the FAA of the unsafe condition described in its AD. The FAA is issuing this AD after evaluating all of the information provided by EASA and determining the unsafe condition exists and is likely to exist or develop on other helicopters of the same type designs.
The FAA reviewed one document that co-publishes eight Airbus Helicopters Emergency Alert Service Bulletin (EASB) identification numbers: No. 67.00.17 for Model AS365 N, N1, N2, and N3 helicopters and non FAA-type certificated military Model AS365 F, Fs, Fi, K, and K2 helicopters; No. 67.00.10 for non FAA-type certificated military Model AS565 MA, MB, MBe, SA, SB, and UB helicopters; No. 67.11 for non FAA-type certificated military Model SA366 GA helicopters; No. 67A016 for Model EC155 B and B1 helicopters; No. 67.00.77 for Model AS350 B3 helicopters; No. 67.00.48 for Model AS355 F, F1, F2, N, and NP helicopters; No. 67.00.33 for non FAA-type certificated military Model AS555 AF, AN, AP, SN, UF, and UN helicopters; and No. 67A021 for Model EC130 B4 and T2 helicopters, each Revision 0 and dated July 25, 2019. EASB Nos. 67.00.17, 67A016, 67.00.77, 67.00.48, and 67A021 are incorporated by reference in this AD. EASB Nos. 67.00.10, 67.11, and 67.00.33 are not incorporated by reference in this AD.
This service information specifies procedures for inspecting the links between the lower ball end fitting and the M/R actuator rods. This service information also specifies procedures for applying a slippage mark (red mark) and inspecting the slippage mark.
This service information is reasonably available because the interested parties have access to it through their normal course of business or by the means identified in the
This AD requires, within 30 hours time-in-service (TIS), with any sealing compound on the lower ball end fitting link removed, inspecting each M/R servo actuator for correct installation by inspecting the link between the lower ball end fitting and the actuator rod for visible threads and play between the actuator rod and the punched lockwasher, inspecting for protrusion of the threaded shouldered bushing from the punched lockwasher, and inspecting the alignment between the punching of the punched lockwasher and the stud of the lower ball end fitting. Depending on the inspection results, this AD requires replacing the M/R servo actuator and reporting the inspection results to Airbus Helicopters if there is any visible thread or play between the actuator rod and the punched lockwasher, protrusion of the threaded shouldered bushing, or misalignment between the punching of the punched lockwasher and the stud of the lower ball end fitting. This AD also requires applying a slippage mark from the actuator rod (excluding the chamfered part of the rod) to the nut, including the punched lockwasher and the lockwasher.
The EASA AD is applicable to affected M/R servo actuators that were supplied by Airbus Helicopters before August 12, 2019, whereas this AD applies to affected M/R servo actuators that were manufactured before July 25, 2019 or with an unknown date of manufacture, instead. The EASA AD requires the one-time inspection within 55 flight hours, whereas this AD requires the one-time inspection within 30 hours TIS instead. The EASA AD requires a longer-term inspection of the slippage mark for misalignment for affected M/R servo actuators regardless of when they were originally supplied, whereas this AD does not. The FAA plans to publish a notice of proposed rulemaking to give the public an opportunity to comment on this longer-term requirement.
The FAA considers this AD to be an interim action. If final action is later identified, the FAA might consider further rulemaking then.
The requirements of the Regulatory Flexibility Act (RFA) do not apply when an agency finds good cause pursuant to 5 U.S.C. 553 to adopt a rule without prior notice and comment. Because the FAA has determined that it has good cause to adopt this rule without notice and comment, RFA analysis is not required.
The FAA estimates that this AD affects 1,270 helicopters of U.S. Registry. Labor rates are estimated at $85 per work-hour. Based on these numbers, the FAA estimates that operators may incur the following costs in order to comply with this AD.
Inspecting the M/R servo actuators takes about one work-hour for an estimated cost of $85 per helicopter and
If required, reporting information takes about 1 hour for an estimated cost of $85.
Replacing an M/R actuator takes about 2 work-hours and parts cost up to $53,315 for an estimated cost of up to $53,485 per replacement.
A federal agency may not conduct or sponsor, and a person is not required to respond to, nor shall a person be subject to a penalty for failure to comply with a collection of information subject to the requirements of the Paperwork Reduction Act unless that collection of information displays a currently valid OMB Control Number. The OMB Control Number for this information collection is 2120-0056. Public reporting for this collection of information is estimated to be approximately 1 hour per response, including the time for reviewing instructions, searching existing data sources, gathering and maintaining the data needed, and completing and reviewing the collection of information. All responses to this collection of information are mandatory. Send comments regarding this burden estimate or any other aspect of this collection of information, including suggestions for reducing this burden to: Information Collection Clearance Officer, Federal Aviation Administration, 10101 Hillwood Parkway, Fort Worth, TX 76177-1524.
Section 553(b)(3)(B) of the Administrative Procedure Act (5 U.S.C.) authorizes agencies to dispense with notice and comment procedures for rules when the agency, for “good cause” finds that those procedures are “impracticable, unnecessary, or contrary to the public interest.” Under this section, an agency, upon finding good cause, may issue a final rule without seeking comment prior to the rulemaking.
An unsafe condition exists that requires the immediate adoption of this AD without providing an opportunity for public comments prior to adoption. The FAA has found that the risk to the flying public justifies waiving notice and comment prior to adoption of this rule because the required corrective action must be completed within 30 hours TIS, a time period of up to one month based on the average flight-hour utilization rate of these helicopters. Therefore, the FAA finds good cause that notice and opportunity for prior public comment are impracticable. In addition, for the reason(s) stated above, the FAA finds that good cause exists for making this amendment effective in less than 30 days.
Title 49 of the United States Code specifies the FAA's authority to issue rules on aviation safety. Subtitle I, section 106, describes the authority of the FAA Administrator. Subtitle VII: Aviation Programs, describes in more detail the scope of the Agency's authority.
The FAA is issuing this rulemaking under the authority described in Subtitle VII, Part A, Subpart III, Section 44701: General requirements. Under that section, Congress charges the FAA with promoting safe flight of civil aircraft in air commerce by prescribing regulations for practices, methods, and procedures the Administrator finds necessary for safety in air commerce. This regulation is within the scope of that authority because it addresses an unsafe condition that is likely to exist or develop on products identified in this rulemaking action.
The FAA determined that this AD will not have federalism implications under Executive Order 13132. This AD will not have a substantial direct effect on the States, on the relationship between the national Government and the States, or on the distribution of power and responsibilities among the various levels of government.
For the reasons discussed, I certify that this AD:
1. Is not a “significant regulatory action” under Executive Order 12866, and
2. Will not affect intrastate aviation in Alaska.
Air transportation, Aircraft, Aviation safety, Incorporation by reference, Safety.
Accordingly, under the authority delegated to me by the Administrator, the FAA amends 14 CFR part 39 as follows:
49 U.S.C. 106(g), 40113, 44701.
This AD applies to the following Airbus Helicopters model helicopters, certificated in any category:
(1) Model SA-365N, SA-365N1, AS-365N2, AS 365 N3, EC 155B, and EC155B1 helicopters with a main rotor (M/R) servo actuator part number (P/N) 704A44831074 (manufacturer part number (MP/N) SC8031), P/N 704A44831117 (MP/N SC8031-1), P/N 704A44831144 (MP/N SC8031-2), P/N 704A44831106 (MP/N SC8031A), P/N 704A44831097 (MP/N SC8032), P/N 704A44831118 (MP/N SC8032-1), P/N 704A44831145 (MP/N SC8032-2), P/N 704A44831127 (MP/N SC8033-1), P/N 704A44831146 (MP/N SC8033-2), P/N 704A44831128 (MP/N SC8034-1), P/N 704A44831147 (MP/N SC8034-2), P/N 704A44831149 (MP/N SC8037), or P/N 704A44831155 (MP/N SC8037-1) manufactured before July 25, 2019 or with an unknown date of manufacture, installed.
(2) Model AS350B3, AS355F, AS355F1, AS355F2, AS355N, AS355NP, EC130B4, and EC130T2 helicopters with an M/R servo actuator P/N 704A44831102 (MP/N SC8042) or P/N 704A44831103 (MP/N SC8043) manufactured before July 25, 2019 or with an unknown date of manufacture, installed.
This AD defines the unsafe condition as an uncoupled M/R servo actuator rod. This condition could result in excessive vibrations, increased loads on the flight controls, failure of the M/R servo actuator, and subsequent loss of control of the helicopter.
This AD becomes effective October 23, 2020.
You are responsible for performing each action required by this AD within the specified compliance time unless it has already been accomplished prior to that time.
(1) Within 30 hours time-in-service, with any sealing compound on the lower ball end fitting link removed, determine if each M/R servo actuator is correctly installed by:
(i) Inspecting the link between the lower ball end fitting (f) and the actuator rod (a) for visible threads and play between the actuator rod (a) and the punched lockwasher (b) as depicted in Figures 1 and 2 of Airbus Helicopters Emergency Alert Service Bulletin (EASB) Nos. 67.00.17, 67A016, 67.00.77, 67.00.48, or 67A021, each Revision 0 and dated July 25, 2019 (EASB 67.00.17, 67A016, 67.00.77, 67.00.48, or 67A021), as applicable to your helicopter. If there is a visible thread
(ii) Inspecting for protrusion of the threaded shouldered bushing (c) from the punched lockwasher (b) as depicted in Figure 3 of EASB 67.00.17, 67A016, 67.00.77, 67.00.48, or 67A021, as applicable to your helicopter. If there is a protrusion, before further flight, replace the M/R servo actuator.
(iii) Inspecting the alignment between the punching of the punched lockwasher (b) and the stud of the lower ball end fitting (f) as depicted in Figure 4 of EASB 67.00.17, 67A016, 67.00.77, 67.00.48, or 67A021, as applicable to your helicopter. If there is misalignment, before further flight, replace the M/R servo actuator.
(2) After accomplishing paragraph (e)(1) of this AD, before further flight, apply a slippage mark from the actuator rod (a) (excluding the chamfered part of the rod) to the nut (e), including the punched lockwasher (b) and the lockwasher (d) as depicted in Figure 5 of EASB 67.00.17, 67A016, 67.00.77, 67.00.48, or 67A021, as applicable to your helicopter.
(3) If any parts were required to be replaced as a result of the inspections required by paragraph (e)(1) of this AD, within 10 days after completing the inspection, report the information in Appendix 1 to this AD by email to
(4) For Model SA-365N, SA-365N1, AS-365N2, AS 365 N3, EC 155B, and EC155B1 helicopters, as of the effective date of this AD, do not install an M/R servo actuator identified in paragraph (a)(1) of this AD on any helicopter, unless the actions required by paragraphs (e)(1) and (2) of this AD have been accomplished.
(5) For Model AS350B3, AS355F, AS355F1, AS355F2, AS355N, AS355NP, EC130B4, and EC130T2 helicopters, as of the effective date of this AD, do not install an M/R servo actuator identified in paragraph (a)(2) of this AD on any helicopter, unless the actions required by paragraphs (e)(1) and (2) of this AD have been accomplished.
A federal agency may not conduct or sponsor, and a person is not required to respond to, nor shall a person be subject to a penalty for failure to comply with a collection of information subject to the requirements of the Paperwork Reduction Act unless that collection of information displays a currently valid OMB Control Number. The OMB Control Number for this information collection is 2120-0056. Public reporting for this collection of information is estimated to be approximately 1 hour per response, including the time for reviewing instructions, searching existing data sources, gathering and maintaining the data needed, and completing and reviewing the collection of information. All responses to this collection of information are mandatory. Send comments regarding this burden estimate or any other aspect of this collection of information, including suggestions for reducing this burden to: Information Collection Clearance Officer, Federal Aviation Administration, 10101 Hillwood Parkway, Fort Worth, TX 76177-1524.
(1) The Manager, Rotorcraft Standards Branch, FAA, may approve AMOCs for this AD. Send your proposal to: Matthew L. Thompson, Aerospace Engineer, DSCO Branch, Compliance & Airworthiness Division, FAA, 10101 Hillwood Pkwy., Fort Worth, TX 76177; telephone 817-222-5251; email
(2) For operations conducted under a 14 CFR part 119 operating certificate or under 14 CFR part 91, subpart K, the FAA suggests that you notify your principal inspector, or lacking a principal inspector, the manager of the local flight standards district office or certificate holding district office, before operating any aircraft complying with this AD through an AMOC.
(1) Airbus Helicopters EASB Nos. 67.00.10, 67.11, and 67.00.33, each Revision 0 and dated July 25, 2019, which are not incorporated by reference, contain additional information about the subject of this AD. For service information identified in this AD, contact Airbus Helicopters, 2701 N Forum Drive, Grand Prairie, TX 75052; telephone 972-641-0000 or 800-232-0323; fax 972-641-3775; or at
(2) The subject of this AD is addressed in European Union Aviation Safety Agency (EASA) AD No. 2019-0184, dated July 29, 2019. You may view the EASA AD on the internet at
Joint Aircraft Service Component (JASC) Code: 6730, Rotorcraft Servo System.
(1) The Director of the Federal Register approved the incorporation by reference of the service information listed in this paragraph under 5 U.S.C. 552(a) and 1 CFR part 51.
(2) You must use this service information as applicable to do the actions required by this AD, unless the AD specifies otherwise.
(i) Airbus Helicopters Emergency Alert Service Bulletin (EASB) No. 67.00.17, Revision 0, dated July 25, 2019.
(ii) Airbus Helicopters EASB No. 67A016, Revision 0, dated July 25, 2019.
(iii) Airbus Helicopters EASB No. 67.00.77, Revision 0, dated July 25, 2019.
(iv) Airbus Helicopters EASB No. 67.00.48, Revision 0, dated July 25, 2019.
(v) Airbus Helicopters EASB No. 67A021, Revision 0, dated July 25, 2019.
Airbus Helicopters EASB Nos. 67.00.17, 67A016, 67.00.77, 67.00.48, and 67A021, each Revision 0 and dated July 25, 2019 are co-published as one document along with Airbus Helicopters EASB Nos. 67.00.10, 67.11, and 67.00.33, each Revision 0 and dated July 25, 2019, which are not incorporated by reference in this AD.
(3) For service information identified in this AD, contact Airbus Helicopters, 2701 N Forum Drive, Grand Prairie, TX 75052; telephone 972-641-0000 or 800-232-0323; fax 972-641-3775; or at
(4) You may view this service information at the FAA, Office of the Regional Counsel, Southwest Region, 10101 Hillwood Pkwy., Room 6N-321, Fort Worth, TX 76177. For information on the availability of this material at the FAA, call 817-222-5110.
(5) You may view this service information that is incorporated by reference at the National Archives and Records Administration (NARA). For information on the availability of this material at NARA, email
Report the following information by email to
(1) Date of Inspection:
(2) Helicopter Model and Serial Number:
(3) Total hours time-in-service (TIS) on the aircraft:
(4) Date of manufacture of the main rotor (M/R) servo actuator:
(5) Total hours TIS on M/R servo actuator:
(6) Total hours TIS since last service of the M/R servo actuator and description of service:
(7) Describe in detail any information and findings and, if possible, provide photos.
Federal Aviation Administration (FAA), Department of Transportation (DOT).
Final rule.
The FAA is superseding Airworthiness Directive (AD) 2018-17-05, which applied to all Airbus SAS
This AD is effective November 12, 2020.
The Director of the Federal Register approved the incorporation by reference of certain publications listed in this AD as of November 12, 2020.
For material incorporated by reference (IBR) in this AD, contact the EASA, Konrad-Adenauer-Ufer 3, 50668 Cologne, Germany; telephone +49 221 8999 000; email
You may examine the AD docket on the internet at
Kathleen Arrigotti, Aerospace Engineer, Large Aircraft Section, International Validation Branch, FAA, 2200 South 216th St., Des Moines, WA 98198; telephone and fax 206-231-3218;
The EASA, which is the Technical Agent for the Member States of the European Union, has issued EASA AD 2019-0301, dated December 12, 2019 (“EASA 2019-0301”); and EASA AD 2020-0027R1, dated February 21, 2020 (“EASA AD 2020-0027R1”); (these ADs are also referred to as the Mandatory Continuing Airworthiness Information, or “the MCAI”) to correct an unsafe condition for all Airbus SAS Model A350-941 and -1041 airplanes. EASA AD 2020-0027R1 supersedes EASA AD 2018-0141, dated July 3, 2018 (which corresponds to FAA AD 2018-17-05, Amendment 39-19359 (83 FR 40438, August 15, 2018) (“AD 2018-17-05”)).
The FAA issued a notice of proposed rulemaking (NPRM) to amend 14 CFR part 39 to supersede AD 2018-17-05. The NPRM published in the
AD 2018-17-05 applied to all Airbus SAS Model A350-941 and -1041 airplanes and addressed degraded insulation resistance in the DDSOV, due to incorrect sealing application, which could lead to the DDSOV being unable to command or maintain the EHA in active mode, possibly resulting in reduced control of the airplane. Since AD 2018-17-05 was issued, it has been determined that certain EHA part numbers can be modified and reidentified as described in EASA AD 2019-0301, which would inadvertently remove certain part numbers from the applicability in other EHA-related ADs. Therefore, EASA issued AD 2020-0027R1 to revise the definition of an affected EHA.
In addition to the determination that certain EHA part numbers might have been inadvertently removed from the actions required by AD 2018-17-05, the NPRM was prompted by reports of EHA units that were returned to the manufacturer with degraded insulation resistance in the DDSOV; investigation results revealed that moisture ingress, due to incorrect sealing application, had caused this degradation. The NPRM was also prompted by a report of a technical issue detected on EHAs installed on inboard ailerons and elevators, causing potential erroneous monitoring of those actuators. The NPRM proposed to require a check of the insulation resistance of the DDSOV of each affected EHA and applicable corrective actions, and modification or replacement of certain EHAs, as specified in EASA AD 2019-0301 and EASA AD 2020-0027R1.
The FAA is issuing this AD to address degraded insulation resistance, which could lead to the DDSOV being unable to command or maintain the EHA in active mode, and possibly result in reduced control of the airplane. The FAA is also issuing this AD to address the possibility of an in-flight loss of inboard aileron or elevator control, which, due to the resulting drag, would lead to increased fuel consumption, and when combined with one engine inoperative, could result in reduced control of the airplane. See the MCAI for additional background information.
The FAA gave the public the opportunity to participate in developing this final rule. The following presents the comments received on the NPRM and the FAA's response to each comment.
The Air Line Pilots Association, International (ALPA) stated its support for the NPRM.
Delta Airlines (DAL) requested that the proposed AD include Airbus Technical Adaptations 80602190/058/2020 and 80602190/059/2020 approved by the EASA Design Organization Approval (DOA) (EASA.21J.031) as an approved method of compliance to correct the errors identified in certain service information specified in EASA AD 2019-0301. DAL also requested, or allow the accomplishment of maintenance procedure (MP) tasks A350-A-27-14-XX-0A003-345A-A in lieu of testing step 3.E.(b), option 1, as an alternative means of compliance with Airbus Service Bulletin A350-27-P034, Revision 01, dated April 8, 2020; and MP task A350-A-27-34-XX-08003-345A-A in lieu of testing step 3.E.(b), option 1, as an alternative means of compliance to Airbus Service Bulletin
The FAA partially agrees with the comment. As another method of compliance, the FAA has added paragraph (h)(7) to this AD to allow use of Airbus Technical Adaptations 80602190/058/2020 and 80602190/059/2020 approved by the EASA DOA (EASA.21J.031).
The FAA disagrees with allowing the use of the maintenance procedures tasks specified above because the tasks are not approved by Airbus and Airbus SAS's EASA DOA for use with the service information. However, under the provisions of paragraph (i)(1) of this AD, the FAA will consider requests for the use of certain service information if sufficient data are submitted to substantiate that the change would provide an acceptable level of safety. The FAA has not changed the AD in this regard.
The FAA reviewed the relevant data, considered the comments received, and determined that air safety and the public interest require adopting this final rule with the change described previously and minor editorial changes. The FAA has determined that these minor changes:
• Are consistent with the intent that was proposed in the NPRM for addressing the unsafe condition; and
• Do not add any additional burden upon the public than was already proposed in the NPRM.
The FAA also determined that these changes will not increase the economic burden on any operator or increase the scope of this final rule.
EASA AD 2019-0301 describes, among other actions, procedures for modifying or replacing affected EHAs. In addition, EASA AD 2020-0027R1 describes procedures for a check of the insulation resistance of the DDSOV of each affected EHA (installed on inboard ailerons, elevators, and rudder) and applicable corrective actions (replacing or reidentifying the affected EHA). This material is reasonably available because the interested parties have access to it through their normal course of business or by the means identified in the
The FAA estimates that this AD affects 13 airplanes of U.S. registry. The FAA estimates the following costs to comply with this AD:
The FAA estimates that it would take about 1 work-hour per product to comply with the reporting requirement in this AD. The average labor rate is $85 per hour. Based on these figures, the FAA estimates the cost of reporting the inspection results on U.S. operators to be $1,105, or $85 per product.
The FAA estimates the following costs to do any necessary on-condition actions that would be required based on the results of any required actions. The FAA has no way of determining the number of aircraft that might need these on-condition actions:
A federal agency may not conduct or sponsor, and a person is not required to respond to, nor shall a person be subject to penalty for failure to comply with a collection of information subject to the requirements of the Paperwork Reduction Act unless that collection of information displays a current valid OMB control number. The control number for the collection of information required by this AD is 2120-0056. The paperwork cost associated with this AD has been detailed in the Costs of Compliance section of this document and includes time for reviewing instructions, as well as completing and reviewing the collection of information. Therefore, all reporting associated with this AD is mandatory. Comments concerning the accuracy of this burden and suggestions for reducing the burden should be directed to Information Collection Clearance Officer, Federal Aviation Administration, 10101 Hillwood Parkway, Fort Worth, TX 76177-1524.
Title 49 of the United States Code specifies the FAA's authority to issue rules on aviation safety. Subtitle I, section 106, describes the authority of the FAA Administrator. Subtitle VII: Aviation Programs, describes in more detail the scope of the Agency's authority.
The FAA is issuing this rulemaking under the authority described in Subtitle VII, Part A, Subpart III, Section 44701: General requirements. Under that section, Congress charges the FAA with promoting safe flight of civil aircraft in air commerce by prescribing regulations for practices, methods, and procedures the Administrator finds necessary for safety in air commerce. This regulation is within the scope of that authority because it addresses an unsafe condition that is likely to exist or develop on products identified in this rulemaking action.
This AD will not have federalism implications under Executive Order 13132. This AD will not have a substantial direct effect on the States, on the relationship between the national government and the States, or on the distribution of power and responsibilities among the various levels of government.
For the reasons discussed above, I certify that this AD:
(1) Is not a “significant regulatory action” under Executive Order 12866,
(2) Will not affect intrastate aviation in Alaska, and
(3) Will not have a significant economic impact, positive or negative, on a substantial number of small entities under the criteria of the Regulatory Flexibility Act.
Air transportation, Aircraft, Aviation safety, Incorporation by reference, Safety.
Accordingly, under the authority delegated to me by the Administrator, the FAA amends 14 CFR part 39 as follows:
49 U.S.C. 106(g), 40113, 44701.
This AD is effective November 12, 2020.
This AD replaces AD 2018-17-05, Amendment 39-19359 (83 FR 40438, August 15, 2018) (“AD 2018-17-05”).
This AD applies to all Airbus SAS Model A350-941 and -1041 airplanes, certificated in any category.
Air Transport Association (ATA) of America Code 27, Flight controls.
This AD was prompted by reports of electro-hydrostatic actuator (EHA) units that were returned to the manufacturer with degraded insulation resistance in the direct drive solenoid valve (DDSOV); investigation results revealed that moisture ingress, due to incorrect sealing application, had caused this degradation. This AD was also prompted by a report of a technical issue detected on EHAs installed on inboard ailerons and elevators, causing potential erroneous monitoring of those actuators. The FAA is issuing this AD to address degraded insulation resistance, which could lead to the DDSOV being unable to command or maintain the EHA in active mode, and possibly result in reduced control of the airplane. The FAA is also issuing this AD to address the possibility of an in-flight loss of inboard aileron or elevator control, which, due to the resulting drag, would lead to increased fuel consumption, and when combined with one engine inoperative, could result in reduced control of the airplane.
Comply with this AD within the compliance times specified, unless already done.
Except as specified in paragraph (h) of this AD: Comply with all required actions and compliance times specified in, and in accordance with, European Union Aviation Safety Agency (EASA) AD 2020-0027R1, dated February 21, 2020 (“EASA AD 2020-0027R1”); and EASA AD 2019-0301, dated December 12, 2019 (“EASA AD 2019-0301”).
(1) Where EASA AD 2019-0301 and EASA AD 2020-0027R1 refer to their effective dates, this AD requires using the effective date of this AD.
(2) The “Remarks” section of EASA AD 2019-0301 and EASA AD 2020-0027R1 do not apply to this AD.
(3) Where EASA AD 2019-0301 requires the accomplishment of paragraphs (1) through (6), this AD requires only the accomplishment of paragraphs (5) and (6).
(4) Paragraph (6) of EASA AD 2020-0027R1 specifies to report insulation check results (
(i) If the insulation check was done on or after the effective date of this AD: Submit the report within 30 days after the insulation check.
(ii) If the insulation check was done before the effective date of this AD: Submit the report within 30 days after the effective date of this AD.
(5) EASA AD 2020-0027R1 includes a definition for “affected EHA” that specifies “as listed by serial number in the applicable SB.” All serial numbers listed in the “applicable SB” are included in the definition of “affected EHA” regardless of the associated part numbers that are also listed in the “applicable SB.”
(6) For any service information referenced in EASA AD 2019-0301 that specifies to return parts to the manufacturer, that action is not required by this AD.
(7) Where any service information referenced in EASA AD 2019-0301 specifies rigging for testing, this AD allows rigging using Airbus Technical Adaptations 80602190/058/2020 and 80602190/059/2020 approved by the EASA Design Organization Approval (DOA) (EASA.21J.031).
The following provisions also apply to this AD:
(1)
(2)
(3)
(4)
For more information about this AD, contact Kathleen Arrigotti, Aerospace Engineer, Large Aircraft Section, International Validation Branch, FAA, 2200 South 216th St., Des Moines, WA 98198; telephone and fax 206-231-3218;
(1) The Director of the Federal Register approved the incorporation by reference (IBR) of the service information listed in this paragraph under 5 U.S.C. 552(a) and 1 CFR part 51.
(2) You must use this service information as applicable to do the actions required by this AD, unless this AD specifies otherwise.
(3) The following service information was approved for IBR on November 12, 2020.
(i) European Union Aviation Safety Agency (EASA) AD 2019-0301, dated December 12, 2019.
(ii) EASA AD 2020-0027R1, dated February 21, 2020.
(4) For EASA AD 2019-0301 and EASA AD 2020-0027R1, contact the EASA, Konrad-Adenauer-Ufer 3, 50668 Cologne, Germany; telephone +49 221 8999 000; email
(5) You may view this material at the FAA, Airworthiness Products Section, Operational Safety Branch, 2200 South 216th St., Des Moines, WA. For information on the availability of this material at the FAA, call 206-231-3195. This material may be found in the AD docket on the internet at
(6) You may view this material that is incorporated by reference at the National Archives and Records Administration (NARA). For information on the availability of this material at NARA, email
Federal Aviation Administration (FAA), Department of Transportation (DOT).
Final rule.
The FAA is adopting a new airworthiness directive (AD) for certain Airbus SAS Model A330-202, -203, -223, -223F, -243, -243F, -302, -303, -323, -343, and -941 airplanes; and Model A340-313, -541, and -642 airplanes. This AD was prompted by the results of laboratory tests on non-rechargeable lithium batteries installed in emergency locator transmitters (ELTs), which highlighted a lack of protection against currents of 28 volts DC or 115 volts AC that could lead to thermal runaway and a battery fire. This AD requires modifying a certain ELT by installing a diode between the ELT and the terminal block, as specified in a European Union Aviation Safety Agency (EASA) AD, which is incorporated by reference. The FAA is issuing this AD to address the unsafe condition on these products.
This AD is effective November 12, 2020.
The Director of the Federal Register approved the incorporation by reference of a certain publication listed in this AD as of November 12, 2020.
For material incorporated by reference (IBR) in this AD, contact the EASA, Konrad-Adenauer-Ufer 3, 50668 Cologne, Germany; telephone +49 221 8999 000; email
You may examine the AD docket on the internet at
Vladimir Ulyanov, Aerospace Engineer, Large Aircraft Section, International Validation Branch, FAA, 2200 South 216th St., Des Moines, WA 98198; telephone and fax 206-231-3229; email
The EASA, which is the Technical Agent for the Member States of the European Union, has issued EASA AD 2020-0083, dated April 3, 2020 (“EASA AD 2020-0083”) (also referred to as the Mandatory Continuing Airworthiness Information, or “the MCAI”), to correct an unsafe condition for certain Airbus SAS Model A330-202, -203, -223, -223F, -243, -243F, -302, -303, -323, -343, and -941 airplanes; and Model A340-313, -541, and -642 airplanes.
The FAA issued a notice of proposed rulemaking (NPRM) to amend 14 CFR part 39 by adding an AD that would apply to certain Airbus SAS Model A330-202, -203, -223, -223F, -243, -243F, -302, -303, -323, -343, and -941 airplanes; and Model A340-313, -541, and -642 airplanes. The NPRM published in the
The FAA gave the public the opportunity to participate in developing this final rule. The following presents the comments received on the NPRM and the FAA's response to each comment.
Delta Air Lines (DAL) requested that operators be allowed to use any color and width of reinforced silicon tape, instead of part number (P/N) ASNA51072503, to protect the wiring in the area where the diode is secured to the harness. The commenter explained that P/N ASNA51072503 is specified in Airbus Service Bulletin A330-25-3733 (“Airbus Service Bulletin A330-25-3733”), and is for the 1-inch orange reinforced silicon tape under the ASNA5107 standard (which is an aerospace industry standard for a silicone rubber tape). The commenter requested approval to use any color and width of reinforced silicon tape meeting
The FAA does not agree with the commenter's request. The commenter did not provide sufficient justification for the use of any color and width of reinforced silicon tape meeting the specifications of the broader ASNA5107 standard. The FAA is not aware of the airworthiness quality of other reinforced silicon tapes under specification ASNA5107. Furthermore, all self-adhesive tapes under the ASNA5107 standard, and their alternatives, have limited shelf lives. The reinforced silicon tape having P/N ASNA51072503 is included in the parts kit specified in Airbus Service Bulletin A330-25-3733 and will be delivered to operators. Airbus, as the Design Approval Holder (DAH), may authorize using alternate materials, which may be included in revised Airbus service information. Operators may, however, request alternative methods of compliance to use reinforced silicone tape other than P/N ASNA51072503 by following the procedures specified in paragraph (i)(1) of this AD and demonstrating how this alternative addresses the unsafe condition. The FAA has not revised this AD in regard to this issue.
In addition, DAL requested and provided an option to replace Step 3.C.(h) specified in Airbus Service Bulletin A330-25-3733. The commenter explained that Step 3.C.(h) in Airbus Service Bulletin A330-25-3733 requires a continuity test of the modified wiring and provides no specific steps for this test other than referencing Electrical Standard Practices Manual (ESPM) section 20-52-21. The commenter noted that although this ESPM section does provide basic continuity procedures, it fails to provide a procedure for a wire with a diode installed.
The FAA disagrees with the commenter's request. The FAA has determined that the procedures described in ESPM section 20-52-21 provide an adequate method for performing a continuity test using a standard multimeter. When placing the multimeter probes in the correct position, the operator is instructed to refer to the wiring schematic within Airbus Service Bulletin A330-25-3733, which provides the necessary procedures for a wire with a diode installed. In addition, anode/cathode polarization is depicted on the diode's housing. Furthermore, Airbus Service Bulletin A330-25-3733 specifies that after the wiring modification is done, a built-in test equipment (BITE) test of the ELT should be performed. The BITE test is also adequate to reveal an incorrectly installed diode.
In addition, the commenter did not provide justification regarding how its proposed procedure would maintain the airworthiness of the airplane. Operators may, however, request alternative methods of compliance to replace Step 3.C.(h) specified in Airbus Service Bulletin A330-25-3733 by using the procedures described in paragraph (i)(1) of this AD and demonstrating how this alternative addresses the unsafe condition. The FAA has not changed this AD regarding this issue.
The FAA reviewed the relevant data, considered the comments received, and determined that air safety and the public interest require adopting this final rule as proposed, except for minor editorial changes. The FAA has determined that these minor changes:
• Are consistent with the intent that was proposed in the NPRM for addressing the unsafe condition; and
• Do not add any additional burden upon the public than was already proposed in the NPRM.
EASA AD 2020-0083 describes procedures for modifying a certain ELT by installing a diode between the ELT and the terminal block. This material is reasonably available because the interested parties have access to it through their normal course of business or by the means identified in the
The FAA estimates that this AD affects 12 airplanes of U.S. registry. The FAA estimates the following costs to comply with this AD:
According to the manufacturer, some or all of the costs of this AD may be covered under warranty, thereby reducing the cost impact on affected individuals. The FAA does not control warranty coverage for affected individuals. As a result, the FAA has included all known costs in our cost estimate.
Title 49 of the United States Code specifies the FAA's authority to issue rules on aviation safety. Subtitle I, section 106, describes the authority of the FAA Administrator. Subtitle VII: Aviation Programs, describes in more detail the scope of the Agency's authority.
The FAA is issuing this rulemaking under the authority described in Subtitle VII, Part A, Subpart III, Section 44701: General requirements. Under that section, Congress charges the FAA with promoting safe flight of civil aircraft in air commerce by prescribing regulations for practices, methods, and procedures the Administrator finds necessary for safety in air commerce. This regulation is within the scope of that authority because it addresses an unsafe condition that is likely to exist or develop on products identified in this rulemaking action.
This AD will not have federalism implications under Executive Order 13132. This AD will not have a substantial direct effect on the States, on the relationship between the national government and the States, or on the distribution of power and responsibilities among the various levels of government.
For the reasons discussed above, I certify that this AD:
(1) Is not a “significant regulatory action” under Executive Order 12866,
(2) Will not affect intrastate aviation in Alaska, and
(3) Will not have a significant economic impact, positive or negative, on a substantial number of small entities under the criteria of the Regulatory Flexibility Act.
Air transportation, Aircraft, Aviation safety, Incorporation by reference, Safety.
Accordingly, under the authority delegated to me by the Administrator, the FAA amends 14 CFR part 39 as follows:
49 U.S.C. 106(g), 40113, 44701.
This AD is effective November 12, 2020.
None.
This AD applies to the Airbus SAS airplanes specified in paragraphs (c)(1) through (7) of this AD, certificated in any category, as identified in European Union Aviation Safety Agency (EASA) AD 2020-0083, dated April 3, 2020 (“EASA AD 2020-0083”).
(1) Model A330-202, -203, -223, and -243 airplanes.
(2) Model A330-223F and -243F airplanes.
(3) Model A330-302, -303, -323, and -343 airplanes.
(4) Model A330-941 airplanes.
(5) Model A340-313 airplanes.
(6) Model A340-541 airplanes.
(7) Model A340-642 airplanes.
Air Transport Association (ATA) of America Code 25, Equipment/Furnishings.
This AD was prompted by the results of laboratory tests on non-rechargeable lithium batteries installed in emergency locator transmitters (ELTs), which highlighted a lack of protection against currents of 28 volts DC or 115 volts AC that could lead to thermal runaway and a battery fire. The FAA is issuing this AD to address local (temporary) fires in non-rechargeable lithium batteries installed in ELTs, which could result in damage to the airplane and injury to occupants.
Comply with this AD within the compliance times specified, unless already done.
Except as specified in paragraph (h) of this AD: Comply with all required actions and compliance times specified in, and in accordance with, EASA AD 2020-0083.
(1) Where EASA AD 2020-0083 refers to its effective date, this AD requires using the effective date of this AD.
(2) The “Remarks” section of EASA AD 2020-0083 does not apply to this AD.
The following provisions also apply to this AD:
(1)
(2)
(3)
For more information about this AD, contact Vladimir Ulyanov, Aerospace Engineer, Large Aircraft Section, International Validation Branch, FAA, 2200 South 216th St., Des Moines, WA 98198; telephone and fax 206-231-3229; email
(1) The Director of the Federal Register approved the incorporation by reference (IBR) of the service information listed in this paragraph under 5 U.S.C. 552(a) and 1 CFR part 51.
(2) You must use this service information as applicable to do the actions required by this AD, unless this AD specifies otherwise.
(i) European Union Aviation Safety Agency (EASA) AD 2020-0083, dated April 3, 2020.
(ii) [Reserved]
(3) For information about EASA AD 2020-0083, contact the EASA, Konrad-Adenauer-Ufer 3, 50668 Cologne, Germany; telephone +49 221 8999 000; email
(4) You may view this material at the FAA, Airworthiness Products Section, Operational Safety Branch, 2200 South 216th St., Des Moines, WA. For information on the availability of this material at the FAA, call 206-231-3195. This material may be found in the AD docket on the internet at
(5) You may view this material that is incorporated by reference at the National Archives and Records Administration (NARA). For information on the availability of this material at NARA, email
Federal Aviation Administration (FAA), DOT.
Final rule.
The FAA is adopting a new airworthiness directive (AD) for certain Airbus Helicopters Model AS-365N2, AS 365N3, EC 155B, EC155B1, and SA-365N1 helicopters. This AD requires modifying the main gearbox (MGB) tail rotor (T/R) drive flange installation.
This AD is effective November 12, 2020.
The Director of the Federal Register approved the incorporation by reference of certain documents listed in this AD as of November 12, 2020.
For service information identified in this final rule, contact Airbus Helicopters, 2701 N Forum Drive, Grand Prairie, TX 75052; telephone 972-641-0000 or 800-232-0323; fax 972-641-3775; or at
You may examine the AD docket on the internet at
Matt Fuller, AD Program Manager, Airworthiness Products Section, General Aviation and Rotorcraft Unit, 10101 Hillwood Pkwy., Fort Worth, TX 76177; telephone 817-222-5110; email
The FAA issued a notice of proposed rulemaking (NPRM) to amend 14 CFR part 39 by adding an AD that would apply to Airbus Helicopters Model AS-365N2, AS 365N3, EC 155B, EC155B1, and SA-365N1 helicopters with modification 0763B64 installed, except those with modification 0763C81. The NPRM published in the
The NPRM was prompted by EASA AD No. 2019-0046, dated March 11, 2019 (EASA AD 2019-0046), issued by EASA, which is the Technical Agent for the Member States of the European Union, to correct an unsafe condition for Airbus Helicopters (formerly Eurocopter, Eurocopter France, Aerospatiale) Model SA 365 N1, AS 365 N2, AS 365 N3, EC 155 B, and EC 155 B1 helicopters, all serial numbers, with modification 0763B64 installed, except those with 07 63C81 installed. EASA advises of reported occurrences of loss of tightening torque of the Shur-Lok nut, which serves as a retainer of the T/R drive flange of the MGB. EASA also advises of subsequent investigation that determined that these occurrences were the result of failure of the Shur-Lok nut locking function, which is normally ensured by two anti-rotation tabs engaged into two slots at the end of the MGB output shaft pinion. EASA states this condition could lead to the loosening and disengagement of the Shur-Lok nut threads, possibly resulting in reduction of T/R drive control, rear transmission vibrations, and subsequent loss of control of the helicopter.
To address this unsafe condition, EASA issued a series of ADs, initially with EASA AD No. 2014-0165, dated July 14, 2014 (EASA AD 2014-0165), which required a one-time inspection of the radial play inside the T/R drive flange and the condition of the Shur-Lok nut. Shortly after, EASA issued EASA AD No. 2014-0179, dated July 25, 2014 (EASA AD 2014-0179) to supersede EASA AD 2014-0165. EASA AD 2014-0179 retained the requirements of EASA AD 2014-0165 and expanded the applicability of helicopters affected by the unsafe condition. EASA later revised EASA AD 2014-0179 to Revision 1, dated July 29, 2014, to revise the applicability and specify updated related service information, and again to Revision 2, dated April 11, 2016 (EASA AD 2014-0179R2), to reduce the applicability and specify additional updated related service information. Since EASA issued EASA AD 2014-0179R2, another occurrence was reported that involved an on-ground loss of T/R synchronization, resulting from disengagement of the Shur-Lok nut. This additional occurrence prompted EASA to issue EASA AD 2019-0046 to require installation of modification 07 63C81, which consists of installing a rear output stop with 5 spigots on the T/R shaft flexible coupling. According to Airbus Helicopters, the 5 spigots will come into contact with the row of 5 bolt heads of the front T/R shaft if the T/R drive flange moves backwards. This contact limits backward displacement of the T/R drive flange and subsequently prevents T/R drive flange disengagement.
The FAA gave the public the opportunity to participate in developing this AD, but the FAA did not receive any comments on the NPRM.
These helicopters have been approved by EASA and are approved for operation in the United States. Pursuant to the FAA's bilateral agreement with the European Union, EASA has notified the FAA of the unsafe condition described in its AD. The FAA is issuing this AD after evaluating all information provided by EASA and determining the unsafe condition exists and is likely to exist or develop on other products of the same type designs and that air safety and the public interest require adopting the AD requirements as proposed.
The FAA reviewed Airbus Helicopters Alert Service Bulletin (ASB) No. AS365-63.00.19, for Model AS365N, N1, N2, and N3 helicopters and non FAA-type certificated military Model AS365F, Fi, Fs, K, and K2 helicopters; and Airbus Helicopters ASB No. EC155-63A013 for Model EC155B and B1 helicopters, both Revision 1 and dated January 31, 2019. This service information specifies procedures for modification 0763C81 to install a rear (aft) output stop between the T/R drive flange and T/R drive shaft.
This service information is reasonably available because the interested parties have access to it through their normal course of business or by the means identified in the
The FAA estimates that this AD affects 46 helicopters of U.S. Registry. The FAA estimates that operators may incur the following costs in order to comply with this AD. Labor costs are estimated at $85 per work-hour. Modifying the MGB T/R drive flange installation takes about 14 work-hours and parts cost about $2,704 for an estimated cost of $3,894 per helicopter and $179,124 for the U.S. fleet.
Title 49 of the United States Code specifies the FAA's authority to issue rules on aviation safety. Subtitle I, section 106, describes the authority of the FAA Administrator. Subtitle VII: Aviation Programs, describes in more detail the scope of the Agency's authority.
The FAA is issuing this rulemaking under the authority described in Subtitle VII, Part A, Subpart III, Section 44701: General requirements. Under that section, Congress charges the FAA with promoting safe flight of civil aircraft in air commerce by prescribing regulations for practices, methods, and procedures the Administrator finds necessary for safety in air commerce. This regulation is within the scope of that authority because it addresses an unsafe condition that is likely to exist or develop on helicopters identified in this rulemaking action.
This AD will not have federalism implications under Executive Order 13132. This AD will not have a substantial direct effect on the States, on the relationship between the national government and the States, or on the distribution of power and responsibilities among the various levels of government.
For the reasons discussed above, I certify that this AD:
1. Is not a “significant regulatory action” under Executive Order 12866,
2. Will not affect intrastate aviation in Alaska, and
3. Will not have a significant economic impact, positive or negative, on a substantial number of small entities under the criteria of the Regulatory Flexibility Act.
Air transportation, Aircraft, Aviation safety, Incorporation by reference, Safety.
Accordingly, under the authority delegated to me by the Administrator, the FAA amends 14 CFR part 39 as follows:
49 U.S.C. 106(g), 40113, 44701.
This AD applies to Airbus Helicopters Model AS-365N2, AS 365N3, EC 155B, EC155B1, and SA-365N1 helicopters, certificated in any category, with modification 0763B64 installed, except those with modification 0763C81.
This AD defines the unsafe condition as loss of tightening torque of the Shur-Lok nut, which serves as a retainer of the tail rotor (T/R) drive flange of the main gearbox. This condition could result in loss of the Shur-Lok nut, possibly resulting in disengagement of the T/R drive flange, reduction of T/R drive control, rear transmission vibrations, and subsequent loss of control of the helicopter.
This AD becomes effective November 12, 2020.
You are responsible for performing each action required by this AD within the specified compliance time unless it has already been accomplished prior to that time.
Within 600 hours time-in-service:
(1) For Model AS-365N2, AS 365N3, and SA-365N1 helicopters:
(i) Without removing the tail drive shaft flange (a), remove the sliding flange (b) from the flexible coupling (c) as shown in Detail “B” of Figure 1, PRE MOD, of Airbus Helicopters Alert Service Bulletin (ASB) No. AS365-63.00.19, Revision 1, dated January 31, 2019 (ASB AS365-63.00.19); replace the 3 bolts (d) and remove from service the 3 washers (e).
(ii) Install the sliding flange (b) with aft output stop (1) part number (P/N) 365A32-7836-20 as shown in Detail “B” of Figure 1, POST MOD, of ASB AS365-63.00.19 and by following the Accomplishment Instructions, paragraph 3.B.2.b, of ASB AS365-63.00.19.
(2) For Model EC 155B and EC155B1 helicopters:
(i) Without removing the Shur-Lok nut (a), remove the sliding flange (b) from the flexible coupling (c) as shown in Detail “B” of Figure 1, PRE MOD, of Airbus Helicopters ASB No. EC155-63A013, Revision 1, dated January 31, 2019 (ASB EC155-63A013); replace the 3 bolts (d) and remove from service the 3 washers (e).
(ii) Install the sliding flange (b) with aft output stop (1) P/N 365A32-7836-20 as shown in Detail “B” of Figure 1, POST MOD, of ASB EC155-63A013 and by following the Accomplishment Instructions, paragraph 3.B.2.b, of ASB EC155-63A013.
ASB EC155-63A013 refers to the “aft output stop” as “rear output stop.”
(1) The Manager, Rotorcraft Standards Branch, FAA, may approve AMOCs for this AD. Send your proposal to: Matt Fuller, AD Program Manager, Airworthiness Products Section, General Aviation and Rotorcraft Unit, 10101 Hillwood Pkwy., Fort Worth, TX 76177; telephone 817-222-5110; email
(2) For operations conducted under a 14 CFR part 119 operating certificate or under 14 CFR part 91, subpart K, the FAA suggests that you notify your principal inspector, or lacking a principal inspector, the manager of the local flight standards district office or certificate holding district office, before operating any aircraft complying with this AD through an AMOC.
The subject of this AD is addressed in European Union Aviation Safety Agency (EASA) AD No. 2019-0046, dated March 11, 2019. You may view the EASA AD on the internet at
Joint Aircraft Service Component (JASC) Code: 6500, Tail Rotor Drive System.
(1) The Director of the Federal Register approved the incorporation by reference of the service information listed in this paragraph under 5 U.S.C. 552(a) and 1 CFR part 51.
(2) You must use this service information as applicable to do the actions required by this AD, unless the AD specifies otherwise.
(i) Airbus Helicopters Alert Service Bulletin (ASB) No. AS365-63.00.19, Revision 1, dated January 31, 2019.
(ii) Airbus Helicopters ASB No. EC155-63A013, Revision 1, dated January 31, 2019.
(3) For service information identified in this AD, contact Airbus Helicopters, 2701 N Forum Drive, Grand Prairie, TX 75052; telephone 972-641-0000 or 800-232-0323; fax 972-641-3775; or at
(4) You may view this service information at the FAA, Office of the Regional Counsel, Southwest Region, 10101 Hillwood Pkwy., Room 6N-321, Fort Worth, TX 76177. For information on the availability of this material at the FAA, call 817-222-5110.
(5) You may view this service information that is incorporated by reference at the National Archives and Records Administration (NARA). For information on the availability of this material at NARA,
Federal Aviation Administration (FAA), DOT.
Final rule; request for comments.
The FAA is adopting a new airworthiness directive (AD) for all General Electric Company GE90-110B1 and GE90-115B model turbofan engines. This AD was prompted by an in-service occurrence of loss of engine thrust control resulting in uncommanded high thrust. This AD prohibits dispatch of an airplane if certain status messages are displayed on the engine indicating and crew alerting system (EICAS) and if certain conditions are present per the manufacturer's service information. As a terminating action, this AD requires revision of the existing FAA-approved minimum equipment list (MEL) by incorporating into the MEL the dispatch restrictions listed in this AD. The FAA is issuing this AD to address the unsafe condition on these products.
This AD is effective October 23, 2020.
The Director of the Federal Register approved the incorporation by reference of a certain publication listed in this AD as of October 23, 2020.
The FAA must receive comments on this AD by November 23, 2020.
You may send comments, using the procedures found in 14 CFR 11.43 and 11.45, by any of the following methods:
•
•
•
•
For service information identified in this final rule, contact General Electric Company, 1 Neumann Way, Cincinnati, OH 45215; phone: 513-552-3272; email:
You may examine the AD docket on the internet at
Stephen Elwin, Aerospace Engineer, ECO Branch, FAA, 1200 District Avenue, Burlington, MA 01803; phone: 781-238-7236; fax: 781-238-7199; email:
The FAA received a report from the manufacturer of an in-service loss of engine thrust control that occurred on October 27, 2019, resulting in uncommanded high thrust. Analysis by the manufacturer found accumulated thermal cycles of the MN4 integrated circuit in the full authority digital engine control (FADEC) through normal operation causes the solder ball joints to wear out and eventually fail over time. The failure was preceded by an inbound FADEC EICAS “ENG EEC C1” status message one flight before the in-service occurrence. This condition, if not addressed, could result in loss of engine thrust control and reduced control of the airplane. The FAA is issuing this AD to address the unsafe condition on these products.
The FAA is issuing this AD because the agency evaluated all the relevant information and determined the unsafe condition described previously is likely to exist or develop in other products of the same type design.
The FAA reviewed GE GE90-100 Service Bulletin (SB) 73-0117, R01, dated August 5, 2020. The SB describes procedures for checking for an inbound FADEC EICAS “ENG EEC C1” status message and corresponding conditions. This service information is reasonably available because the interested parties have access to it through their normal course of business or by the means identified in the
This AD prohibits dispatch of the airplane if certain status messages are displayed on the EICAS and if certain conditions are present per the manufacturer's service information. As a terminating action, this AD requires, within 120 days of the effective date of this AD, revision of the existing FAA-approved MEL by incorporating into the MEL the dispatch restrictions listed in paragraph (g) of this AD.
The FAA considers this AD interim action. The manufacturer is still reviewing the unsafe condition and the FAA will consider further rulemaking.
Section 553(b)(3)(B) of the Administrative Procedure Act (APA) (5 U.S.C.) authorizes agencies to dispense with notice and comment procedures for rules when the agency, for “good cause,” finds that those procedures are “impracticable, unnecessary, or contrary to the public interest.” Under this section, an agency, upon finding good cause, may issue a final rule without seeking comment prior to issuance. Further, Section 553(d) of the APA authorizes agencies to make rules effective in less than 30 days, upon a finding of good cause.
An unsafe condition exists that requires the immediate adoption of this AD without providing an opportunity for public comments prior to adoption. The FAA has found that the risk to the flying public justifies foregoing notice and comment prior to adoption of this rule. On October 27, 2019, a Boeing Company Model 777-300 airplane powered by GE GE90-115B model turbofan engines experienced an
The FAA considers the failure of the MN4 integrated circuit in the FADEC an urgent safety issue, requiring immediate review of FADEC EICAS status messages and possible prohibition of departure of the airplane.
Accordingly, notice and opportunity for prior public comment are impracticable and contrary to public interest pursuant to 5 U.S.C. 553(b)(3)(B).
In addition, the FAA finds that good cause exists pursuant to 5 U.S.C. 553(d) for making this amendment effective in less than 30 days.
The FAA invites you to send any written data, views, or arguments about this final rule. Send your comments to an address listed under the
Except for Confidential Business Information (CBI) as described in the following paragraph, and other information as described in 14 CFR 11.35, the FAA will post all comments received, without change, to
Confidential Business Information (CBI) is commercial or financial information that is both customarily and actually treated as private by its owner. Under the Freedom of Information Act (FOIA) (5 U.S.C. 552), CBI is exempt from public disclosure. If your comments responsive to this AD contain commercial or financial information that is customarily treated as private, that you actually treat as private, and that is relevant or responsive to this AD, it is important that you clearly designate the submitted comments as CBI. Please mark each page of your submission containing CBI as “PROPIN.” The FAA will treat such marked submissions as confidential under the FOIA, and they will not be placed in the public docket of this AD. Submissions containing CBI should be sent to Stephen Elwin, Aerospace Engineer, ECO Branch, FAA, 1200 District Avenue, Burlington, MA 01803. Any commentary that the FAA receives which is not specifically designated as CBI will be placed in the public docket for this rulemaking.
The requirements of the Regulatory Flexibility Act (RFA) do not apply when an agency finds good cause pursuant to 5 U.S.C. 553 to adopt a rule without prior notice and comment. Because the FAA has determined that it has good cause to adopt this rule without notice and comment, RFA analysis is not required.
The FAA estimates that this AD affects 206 engines installed on airplanes of U.S. registry.
The FAA estimates the following costs to comply with this AD:
Title 49 of the United States Code specifies the FAA's authority to issue rules on aviation safety. Subtitle I, section 106, describes the authority of the FAA Administrator. “Subtitle VII: Aviation Programs” describes in more detail the scope of the Agency's authority.
The FAA is issuing this rulemaking under the authority described in Subtitle VII, Part A, Subpart III, Section 44701: General requirements. Under that section, Congress charges the FAA with promoting safe flight of civil aircraft in air commerce by prescribing regulations for practices, methods, and procedures the Administrator finds necessary for safety in air commerce. This regulation is within the scope of that authority because it addresses an unsafe condition that is likely to exist or develop on products identified in this rulemaking action.
This AD will not have federalism implications under Executive Order 13132. This AD will not have a substantial direct effect on the States, on the relationship between the national Government and the States, or on the distribution of power and responsibilities among the various levels of government.
For the reasons discussed above, I certify that this AD:
(1) Is not a “significant regulatory action” under Executive Order 12866, and
(2) Will not affect intrastate aviation in Alaska.
Air transportation, Aircraft, Aviation safety, Incorporation by reference, Safety.
Accordingly, under the authority delegated to me by the Administrator, the FAA amends 14 CFR part 39 as follows:
49 U.S.C. 106(g), 40113, 44701.
This AD is effective October 23, 2020.
None.
This AD applies to all General Electric Company GE90-110B1 and GE90-115B model turbofan engines.
Joint Aircraft System Component (JASC) Code 7600, Engine Controls.
This AD was prompted by an in-service occurrence of loss of engine thrust control resulting in uncommanded high thrust. The FAA is issuing this AD to prevent dispatch of the airplane when certain faults caused by degradation of the MN4 integrated circuit in the full authority digital engine control (FADEC) are displayed and certain FADEC conditions are present. The unsafe condition, if not addressed, could result in loss of engine thrust control and reduced control of the airplane.
Comply with this AD within the compliance times specified, unless already done.
After the effective date of this AD, notwithstanding the provisions of the operator's minimum equipment list (MEL), dispatch of an airplane is prohibited if the engine indicating and crew alerting system (EICAS) displays the status message “ENG EEC C1 L” or “ENG EEC C1 R” and any condition is present that is listed in the Accomplishment Instructions, paragraphs 3.A.(2)(f), 3.A.3(a), or 3.A.(4) of GE GE90-100 Service Bulletin (SB) 73-0117 R01, dated August 5, 2020.
As terminating action for the requirements of paragraph (g) of this AD, within 120 days of the effective date of this AD, revise the existing FAA-approved MEL by incorporating into the MEL the dispatch restrictions listed in paragraph (g) of this AD as a required operation or maintenance procedure. Specific alternative MEL wording to accomplish the actions specified in paragraph (g) of this AD can be approved by the operator's principal operations or maintenance inspector.
(1) The Manager, ECO Branch, FAA, has the authority to approve AMOCs for this AD, if requested using the procedures found in 14 CFR 39.19. In accordance with 14 CFR 39.19, send your request to your principal inspector or local Flight Standards District Office, as appropriate. If sending information directly to the manager of the certification office, send it to the attention of the person identified in paragraph (j) of this AD. You may email your request to:
(2) Before using any approved AMOC, notify your appropriate principal inspector, or lacking a principal inspector, the manager of the local flight standards district office/certificate holding district office.
For more information about this AD, contact Stephen Elwin, Aerospace Engineer, ECO Branch, FAA, 1200 District Avenue, Burlington, MA 01803; phone: 781-238-7236; fax: 781-238-7199; email:
(1) The Director of the Federal Register approved the incorporation by reference (IBR) of the service information listed in this paragraph under 5 U.S.C. 552(a) and 1 CFR part 51.
(2) You must use this service information as applicable to do the actions required by this AD, unless the AD specifies otherwise.
(i) General Electric Company (GE) GE90-100 Service Bulletin 73-0117 R01, dated August 5, 2020.
(ii) [Reserved]
(3) For GE service information identified in this AD, contact General Electric Company, 1 Neumann Way, Cincinnati, OH 45215; phone: 513-552-3272; email:
(4) You may view this service information at FAA, Airworthiness Products Section, Operational Safety Branch, 1200 District Avenue, Burlington, MA 01803. For information on the availability of this material at the FAA, call 781-238-7759.
(5) You may view this service information that is incorporated by reference at the National Archives and Records Administration (NARA). For information on the availability of this material at NARA, email:
Pension Benefit Guaranty Corporation.
Final rule.
The Pension Benefit Guaranty Corporation (PBGC) is adopting as final an interim final rule to amend PBGC's Privacy Act regulation to exempt a system of records that supports a program of insider threat detection and data loss prevention.
This final rule is effective October 8, 2020.
Melissa Rifkin (
On July 9, 2019, PBGC published an interim final rule to amend PBGC's regulation on Disclosure and Amendment of Records Pertaining to Individuals under the Privacy Act (29 CFR part 4902) to exempt from disclosure information contained in a new system of records for PBGC's insider threat program.
Authority for this rule is provided by section 4002(b)(3) of the Employee Retirement Income Security Act of 1974 (ERISA) and 5 U.S.C. 552a(k)(2).
The Pension Benefit Guaranty Corporation (PBGC) administers the pension plan insurance programs under title IV of the Employee Retirement Income Security Act of 1974 (ERISA). As a Federal agency, PBGC is subject to the Privacy Act of 1974, 5 U.S.C. 552a (Privacy Act), in its collection, maintenance, use, and dissemination of any personally identifiable information that it maintains in a “system of records.” A system of records is defined under the Privacy Act as “a group of any records under the control of any agency from which information is retrieved by the name of the individual or by some identifying number, symbol, or other identifying particular assigned to the individual.”
On July 9, 2019, PBGC established a new system of records, “PBGC-26,
Executive Order 13587, issued October 7, 2011, requires Federal agencies to establish an insider threat detection and prevention program to ensure the security of classified networks and the responsible sharing and safeguarding of classified information consistent with appropriate protections for privacy and civil liberties. While PBGC does not have any classified networks, it does maintain a significant amount of Controlled Unclassified Information (CUI) that, under law, it is required to safeguard from unauthorized access or disclosure. One method utilized by PBGC to ensure that only those with a need-to-know have access to CUI is a set of tools to minimize data loss, whether inadvertent or intentional. This system collects and maintains Personally Identifiable Information (PII) in the course of scanning traffic leaving PBGC's network and blocking traffic that violates PBGC's policies to safeguard PII.
This system covers “PBGC insiders,” who are individuals with access to PBGC resources, including facilities, information, equipment, networks, and systems. This includes Federal employees and contractors. Records from this system will be used on a need-to-know basis to manage insider threat matters; facilitate insider threat investigations and activities; identify threats to PBGC resources, including threats to PBGC's personnel, facilities, and information assets; track tips and referrals of potential insider threats to internal and external partners; meet other insider threat program requirements; and investigate/manage the unauthorized or attempted unauthorized disclosure of PII.
Under section 552a(k) of the Privacy Act, PBGC may promulgate regulations exempting information contained in certain systems of records from specified sections of the Privacy Act including the section mandating disclosure of information to an individual who has requested it. Among other systems, PBGC may exempt a system that is “investigatory material compiled for law enforcement purposes.”
The PBGC-26, PBGC Insider Threat and Data Loss Prevention—PBGC system contains: (1) Records derived from PBGC security investigations, (2) summaries or reports containing information about potential insider threats or the data loss prevention program, (3) information related to investigative or analytical efforts by PBGC insider threat program personnel, (4) reports about potential insider threats obtained through the management and operation of the PBGC insider threat program, and (5) reports about potential insider threats obtained from other Federal Government sources. The records contained in this new system include investigative material of actual, potential, or alleged criminal, civil, or administrative violations and law enforcement actions. These records are within the material permitted to be exempted under section 552a(k)(2) of the Privacy Act.
On July 9, 2019, at, PBGC published an interim rule adding a new § 4902.12 to its Privacy Act regulation.
PBGC provided the public 30 days in which to comment on the amendment made by the interim final rule and received comments from one commenter. PBGC considered the comments but is not modifying the regulation.
The commenter suggested that any data which is subject to breach or hacking should be made available to affected individuals and other interested persons, including the journalism community. Under 5 U.S.C. 552a(b), an agency is prohibited from disclosing any record contained in a system of records to any person unless it has obtained written consent from the subject of the record or the disclosure falls within one of the twelve exceptions articulated in that section. There is no exception that would permit PBGC to provide data that is subject to a “breach or hacking” to interested persons. Providing this information would be a violation of the Privacy Act.
The commenter suggested that the use of collected data must be strictly limited to necessary purposes, and broad collection of personal data, for investigations of insider threats, without access for review or correction of improper or unnecessary data should not be permitted. PBGC only collects the information it is authorized to collect and uses it for the purposes identified in its system of records notices. PBGC has listed the sources of records it anticipates collecting; however, to the extent that listing a source would potentially compromise a source of law enforcement information, PBGC has exempted this system of records under 5 U.S.C. 552a(e)(4)(I). Moreover, PBGC has exempted records maintained in this system of records from access to and amendment of records because providing access and amendment rights to such records could compromise or lead to the compromise of information that could warrant an invasion of another's privacy, reveal a sensitive investigative technique, potentially allow a suspect avoid detection or apprehension, or constitute potential danger to a confidential source or witness.
Finally, the commenter stated that an objective third party should be an option for review of data if requested by an affected individual or group, subject to reasonable confidentiality protections necessary to protect any legitimate law enforcement or investigatory purposes. Any disclosure of insider threat information, including disclosure to an “objective third party,” could substantially compromise an investigation of insider threat activities. For example, that information may identify the subject of the investigation or a witness who was promised confidentiality. PBGC does not know who the “objective third party” is or with whom the information might be shared. Further, there are no “reasonable confidentiality protections” that would prevent that information from getting into the wrong hands. Moreover, if the “affected individual or group” means those persons who were subjected to an unauthorized or attempted unauthorized disclosure of PII, providing that information to an “objective third party” may invade the privacy of “the affected individual or group.” Finally, disclosure may also compromise the investigation by revealing law enforcement techniques and procedures.
Accordingly, PBGC adopts the interim final rule as final with minor, technical amendments to remove the introductory
The interim final rule was exempt from the requirements of prior notice and comment and a 30-day delay in effective date because it is a rule of “agency organization, procedure, or practice” and is limited to “agency organization, management, or personnel matters.”
Privacy.
In consideration of the foregoing, the interim rule amending 29 CFR part 4902 which was published at 84 FR 32618 on July 9, 2019, is adopted as final with the following change:
5 U.S.C. 552a, 29 U.S.C. 1302(b)(3).
Issued in Washington, DC.
Coast Guard, DHS.
Notice of enforcement of regulation.
The Coast Guard will enforce a segment of the Safety Zone; Brandon Road Lock and Dam to Lake Michigan including Des Plaines River, Chicago Sanitary and Ship Canal, Chicago River, Calumet-Saganashkee Channel on all waters of the Chicago Sanitary and Ship Canal and South Branch of the Chicago River between mile marker 296 and mile marker 296.7 during specified times from September 25, 2020 through October 29, 2020. This action is necessary and intended to protect the safety of life and property on navigable waters prior to, during, and immediately after planned US Army Corps of Engineers work at the Electric Barrier. During the enforcement period listed below, entry into, transiting, or anchoring within the safety zone is prohibited unless authorized by the Captain of the Port Lake Michigan or a designated representative.
The regulations in 33 CFR 165.930 will be enforced from 7 a.m. through 11 a.m. and 1 p.m. through 5 p.m. daily without actual notice from October 8, 2020 through 5 p.m. on October 29, 2020. For purposes of enforcement, actual notice will be used 7 a.m. through 11 a.m. and 1 p.m. through 5 p.m. daily from September 25, 2020 through October 8, 2020.
If you have questions about this notice of enforcement, call or email LT Tiziana Garner, Waterways Management Division, Marine Safety Unit Chicago, at 630-986-2155, email address
The Coast Guard will enforce a segment of the Safety Zone; Brandon Road Lock and Dam to Lake Michigan including Des Plaines River, Chicago Sanitary and Ship Canal, Chicago River, Calumet-Saganashkee Channel on all waters of the Chicago Sanitary and Ship Canal and South Branch of the Chicago River between mile marker 296 and mile marker 296.7 during specified times from September 25, 2020 through October 29, 2020. This action is necessary and intended to protect the safety of life and property on navigable waters prior to, during, and immediately after planned US Army Corps of Engineers work at the Electric Barrier. During the enforcement period, entry into, transiting, or anchoring within the safety zone is prohibited unless authorized by the Captain of the Port Lake Michigan or a designated representative.
This notice of enforcement is issued under the authority of 33 CFR 165.930 and 5 U.S.C. 552(a). In addition to this notice of enforcement in the
Environmental Protection Agency (EPA).
Final rule.
The Environmental Protection Agency (EPA) is taking final action to approve a state plan submitted by the
This plan will be effective on November 9, 2020. The incorporation by reference of certain material listed in the rule is approved by the Director of the Federal Register as of November 9, 2020.
The EPA has established a docket for this action under Docket ID No. EPA-R10-OAR-2020-0074. All documents in the docket are listed on the
Geoffrey Glass (he/him), at (206) 553-1847 or by email at
Throughout this document, “we,” “us” and “our” refer to the EPA.
On March 13, 2020 (85 FR 14621), the EPA proposed to approve a section 111(d) plan submitted by the ODEQ for existing municipal solid waste landfills. The submitted section 111(d) plan was in response to the August 29, 2016 promulgation of federal New Source Performance Standards and emission guidelines requirements for MSW landfills, 40 CFR part 60, subparts XXX and Cf, respectively (81 FR 59332 and 81 FR 59276). Included within the section 111(d) plan are regulations under the Oregon Administrative Rules at Chapter 340, Division 236 (OAR 340-236-0500) entitled “Solid Waste Landfills: Emission Standards for Municipal Solid Waste Landfills,” amended on July 19, 2019.
We proposed to approve this plan because we determined that it complies with the relevant CAA requirements. Our proposed action contains more information on the plan and our evaluation.
The EPA's proposed action provided a 30-day public comment period. During this period, we received no comments.
No comments were submitted. Therefore, the EPA is approving the plan submitted by the ODEQ.
In accordance with the requirements of 1 CFR 51.5, the EPA is finalizing regulatory text that includes the incorporation by reference of OAR 340-236-0500 entitled “Solid Waste Landfills: Emission Standards for Municipal Solid Waste Landfills” amended on July 19, 2019, which is part of the CAA section 111(d) plan applicable to existing MSW landfills in the state of Oregon as discussed in section I of this preamble. These regulatory provisions in the section 111(d) plan establish emission standards and compliance times for the control of nonmethane organic compounds from certain existing MSW landfills located in Oregon that commenced construction, modification, or reconstruction on or before July 17, 2014. These provisions set forth requirements meeting criteria promulgated by the EPA at 40 CFR part 60, subpart Cf. The EPA has made, and will continue to make, the entire Oregon state plan, generally available through
In reviewing state plan submissions, the EPA's role is to approve state choices, provided that they meet the criteria of the CAA. Accordingly, this action merely approves state law as meeting federal requirements and does not impose additional requirements beyond those imposed by state law. For that reason, this proposed action:
• Is not a “significant regulatory action” subject to review by the Office of Management and Budget under Executive Orders 12866 (58 FR 51735, October 4, 1993) and 13563 (76 FR 3821, January 21, 2011);
• Is not an Executive Order 13771 (82 FR 9339, February 2, 2017) regulatory action because this action is not significant under Executive Order 12866;
• Does not impose an information collection burden under the provisions of the Paperwork Reduction Act (44 U.S.C. 3501
• Is certified as not having a significant economic impact on a substantial number of small entities under the Regulatory Flexibility Act (5 U.S.C. 601
• Does not contain any unfunded mandate or significantly or uniquely affect small governments, described in the Unfunded Mandates Reform Act of 1995 (Pub. L. 104-4);
• Does not have Federalism implications as specified in Executive Order 13132 (64 FR 43255, August 10, 1999);
• Is not an economically significant regulatory action based on health or safety risks subject to Executive Order 13045 (62 FR 19885, April 23, 1997);
• Is not a significant regulatory action subject to Executive Order 13211 (66 FR 28355, May 22, 2001);
• Is not subject to requirements of section 12(d) of the National Technology Transfer and Advancement Act of 1995 (15 U.S.C. 272 note) because application of those requirements would be inconsistent with the CAA; and
• Does not provide EPA with the discretionary authority to address, as appropriate, disproportionate human health or environmental effects, using practicable and legally permissible methods, under Executive Order 12898 (59 FR 7629, February 16, 1994).
In addition, this approval of the ODEQ plan submittal for existing MSW landfills does not apply in Indian Country. Therefore, the state plan does not have tribal implications and will not impose substantial direct costs on tribal governments or preempt tribal law as specified by Executive Order 13175 (65 FR 67249, November 9, 2000).
The Congressional Review Act, 5 U.S.C. 801
Under section 307(b)(1) of the Clean Air Act, petitions for judicial review of this action must be filed in the United States Court of Appeals for the appropriate circuit by December 7, 2020. Filing a petition for reconsideration by the Administrator of this final rule does not affect the finality of this action for the purposes of judicial review nor does it extend the time within which a petition for judicial review may be filed, and shall not postpone the effectiveness of such rule or action. This action may not be challenged later in proceedings to enforce its requirements. (See section 307(b)(2).)
Environmental protection, Air pollution control, Landfills, Incorporation by reference, Intergovernmental relations, Methane, Ozone, Reporting and recordkeeping requirements, Volatile organic compounds.
For the reasons stated in the preamble, the Environmental Protection Agency amends 40 CFR part 62 as follows:
42 U.S.C. 7401
(b) * * *
(5) Control of emissions from existing municipal solid waste landfills was submitted by Oregon Department of Environmental Quality on August 2, 2019, amending a plan previously submitted on May 14, 1997 and approved by the EPA on June 26, 1998.
(a) The plan for the control of emissions from existing municipal solid waste landfills, submitted by the Oregon Department of Environmental Quality on May 14, 1997, to implement the emission guideline of 40 CFR part 60, subpart Cc, applies to all existing MSW landfill facilities in Oregon meeting the requirements as stated in their State regulations.
(b) The plan for the control of emissions from existing municipal solid waste landfills, submitted by the Oregon Department of Environmental Quality on August 2, 2019, to implement the emission guideline of 40 CFR part 60, subpart Cf, applies to all existing MSW landfill facilities in Oregon for which construction, reconstruction, or modification was commenced on or before July 17, 2014. The plan includes the regulatory provisions cited in paragraph (d)(2) of this section, which the EPA incorporates by reference.
(c) After November 9, 2020, the substantive requirements of the municipal solid waste landfills state plan are contained in paragraph (b) of this section and owners and operators of municipal solid waste landfills in Oregon must comply with the requirements in paragraph (b) of this section.
(d)(1) The material incorporated by reference in this section was approved by the Director of the Federal Register in accordance with 5 U.S.C. 552(a) and 1 CFR part 51. You may obtain copies from the EPA Docket Center—Public Reading Room, EPA West Building, Room 3334, 1301 Constitution Avenue NW, Washington, DC 20004 or U.S. EPA, Region 10 office by calling 206-553-1200. The telephone number for the Public Reading Room is (202) 566-1744. You may inspect the material at the National Archives and Records Administration (NARA). For information on the availability of this material at NARA, email
(2) State of Oregon, Secretary of State, Oregon Administrative Rules,
(i) OAR 340-236-0500: Oregon Administrative Rules; Chapter 340, Oregon Department of Environmental Quality; Division 236, Emission Standards for Specific Industries; Rule 0500, Solid Waste Landfills: Emission Standards for Municipal Solid Waste Landfills, effective July 19, 2019.
(ii) [Reserved]
The plan in § 62.9510(b) applies to all existing municipal solid waste landfills in the state of Oregon, excluding Indian Country, for which construction, reconstruction, or modification was commenced on or before July 17, 2014.
The effective date of the plan submitted on August 2, 2019 by the Oregon Department of Environmental Quality for municipal solid waste landfills is November 9, 2020.
Environmental Protection Agency (EPA).
Notification of submission to the Secretary of Agriculture.
This document notifies the public as required by the Federal Insecticide, Fungicide, and Rodenticide Act (FIFRA) that the EPA Administrator has forwarded to the Secretary of the United States Department of Agriculture (USDA) a draft regulatory document concerning “Pesticides; Agricultural Worker Protection Standard; Revision of the Application Exclusion Zone Requirements (RIN 2070-AK49).” The draft regulatory document is not available to the public until after it has been signed and made available by EPA.
See Unit I. under
The docket for this action, identified by docket identification (ID) number EPA-HQ-OPP-2017-0543, is available at
Please note that due to the public health concerns related to COVID-19,
Carolyn Schroeder, Pesticide Re-Evaluation Division (7508P), Office of Pesticide Programs, Environmental Protection Agency, 1200 Pennsylvania Ave. NW, Washington, DC 20460; telephone number: (703) 308-2961; email address:
FIFRA section 25(a)(2)(B) requires the EPA Administrator to provide the Secretary of USDA with a copy of any draft final rule at least 30 days before signing it in final form for publication in the
No. This document is merely a notification of submission to the Secretary of USDA. As such, none of the regulatory assessment requirements apply to this document.
Environmental Protection Agency (EPA).
Final rule.
This regulation establishes time-limited tolerances for residues of kasugamycin in or on almonds. This action is in response to EPA's granting of an emergency exemption under the Federal Insecticide, Fungicide, and Rodenticide Act (FIFRA) authorizing use of the pesticide on almond trees. This regulation establishes maximum permissible levels for residues of kasugamycin in or on this commodity. The time-limited tolerances expire on December 31, 2023.
This regulation is effective October 8, 2020. Objections and requests for hearings must be received on or before December 7, 2020, and must be filed in accordance with the instructions provided in 40 CFR part 178 (see also Unit I.C. of the
The docket for this action, identified by docket identification (ID) number EPA-HQ-OPP-2020-0338, is available at
Due to the public health concerns related to COVID-19, the EPA Docket Center (EPA/DC) and Reading Room is closed to visitors with limited exceptions. The staff continues to provide remote customer service via email, phone, and webform. For the latest status information on EPA/DC services and docket access, visit
Marietta Echeverria, Acting Director, Registration Division (7505P), Office of Pesticide Programs, Environmental Protection Agency, 1200 Pennsylvania Ave. NW, Washington, DC 20460-0001; main telephone number: (703) 305-7090; email address:
You may be potentially affected by this action if you are an agricultural producer, food manufacturer, or pesticide manufacturer. The following list of North American Industrial Classification System (NAICS) codes is not intended to be exhaustive, but rather provides a guide to help readers determine whether this document applies to them. Potentially affected entities may include:
• Crop production (NAICS code 111).
• Animal production (NAICS code 112).
• Food manufacturing (NAICS code 311).
• Pesticide manufacturing (NAICS code 32532).
You may access a frequently updated electronic version of 40 CFR part 180 through the Government Printing Office's e-CFR site at
Under section 408(g) of the Federal Food, Drug, and Cosmetic Act (FFDCA), 21 U.S.C. 346a, any person may file an objection to any aspect of this regulation and may also request a hearing on those objections. You must file your objection or request a hearing on this regulation in accordance with the instructions provided in 40 CFR part 178. To ensure proper receipt by EPA, you must identify docket ID number EPA-HQ-OPP-2020-0338 in the subject line on the first page of your submission. All objections and requests for a hearing must be in writing and must be received by the Hearing Clerk on or before December 7, 2020. Addresses for mail and hand delivery of objections and hearing requests are provided in 40 CFR 178.25(b).
In addition to filing an objection or hearing request with the Hearing Clerk as described in 40 CFR part 178, please submit a copy of the filing (excluding any Confidential Business Information (CBI)) for inclusion in the public docket. Information not marked confidential pursuant to 40 CFR part 2 may be disclosed publicly by EPA without prior notice. Submit the non-CBI copy of your objection or hearing request, identified
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•
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Additional instructions on commenting or visiting the docket, along with more information about dockets generally, is available at
EPA, on its own initiative, in accordance with FFDCA sections 408(e) and 408(l)(6), 21 U.S.C. 346a(e) and 346a(1)(6), is establishing time-limited tolerances for residues of kasugamycin, (3-O-[2-amino-4-[(carboxyimino-methyl)amino]-2,3,4,6-tetradeoxy-α-D-arabino-hexopyranosyl]-D-chiro-inositol), in or on Almond at 0.04 parts per million (ppm); and Almond, hulls at 0.4 ppm. These time-limited tolerances expire on December 31, 2023.
Section 408(l)(6) of FFDCA requires EPA to establish a time-limited tolerance or exemption from the requirement for a tolerance for pesticide chemical residues in food that will result from the use of a pesticide under an emergency exemption granted by EPA under FIFRA section 18. Such tolerances can be established without providing notice or period for public comment. EPA does not intend for its actions on FIFRA section 18 related time-limited tolerances to set binding precedents for the application of FFDCA section 408 and the safety standard to other tolerances and exemptions. Section 408(e) of FFDCA allows EPA to establish a tolerance or an exemption from the requirement of a tolerance on its own initiative,
Section 408(b)(2)(A)(i) of FFDCA allows EPA to establish a tolerance (the legal limit for a pesticide chemical residue in or on a food) only if EPA determines that the tolerance is “safe.” Section 408(b)(2)(A)(ii) of FFDCA defines “safe” to mean that “there is a reasonable certainty that no harm will result from aggregate exposure to the pesticide chemical residue, including all anticipated dietary exposures and all other exposures for which there is reliable information.” This includes exposure through drinking water and in residential settings but does not include occupational exposure. Section 408(b)(2)(C) of FFDCA requires EPA to give special consideration to exposure of infants and children to the pesticide chemical residue in establishing a tolerance and to “ensure that there is a reasonable certainty that no harm will result to infants and children from aggregate exposure to the pesticide chemical residue. . . .”
Section 18 of FIFRA authorizes EPA to exempt any Federal or State agency from any provision of FIFRA, if EPA determines that “emergency conditions exist which require such exemption.” EPA has established regulations governing such emergency exemptions in 40 CFR part 166.
According to the California Department of Pesticide Regulation (CDPR), the California almond industry has been experiencing frequent frost events with concurrent wetness and temperatures below 0 °C in the last several years, specifically from 2013 to 2019. In recent seasons (2017, 2018, and 2019), early-spring cold spells have resulted in a high incidence of bacterial blast in almond buds and blossoms in several almond production areas in California. CDPR claims that these freeze events caused direct crop losses in the form of blasted flowers, dropped fruit, and shoot dieback affecting future fruiting wood on the tree. CDPR claims that frost injury has been described as one of the main limiting factors to crop production in many locations in California. Some plants' frost injuries have been shown to involve an interaction of certain leaf surface bacteria and low temperature stress. Some epiphytic bacteria such as
After having reviewed the submission, EPA determined that an emergency condition exists for this State, and that the criteria for approval of an emergency exemption were met. EPA has authorized a specific exemption under FIFRA section 18 for the use of kasugamycin on almond trees for control of bacterial blast in almonds in California.
As part of its evaluation of the emergency exemption application, EPA assessed the potential risks presented by residues of kasugamycin in or on almonds. In doing so, EPA considered the safety standard in FFDCA section 408(b)(2), and EPA decided that the necessary tolerance under FFDCA section 408(l)(6) would be consistent with the safety standard and with FIFRA section 18. Consistent with the need to move quickly on the emergency exemption in order to address an urgent non-routine situation and to ensure that the resulting food is safe and lawful, EPA is issuing this tolerance without notice and opportunity for public comment as provided in FFDCA section 408(l)(6). Although these time-limited tolerances expire on December 31, 2023, under FFDCA section 408(l)(5), residues of the pesticide not in excess of the amounts specified in the tolerance remaining in or on almond after that date will not be unlawful, provided the pesticide was applied in a manner that was lawful under FIFRA, and the residues do not exceed a level that was authorized by these time-limited tolerances at the time of that application. EPA will take action to revoke these time-limited tolerances earlier if any experience with, scientific data on, or other relevant information on this pesticide indicate that the residues are not safe.
Because these time-limited tolerances are being approved under emergency conditions, EPA has not made any decisions about whether kasugamycin meets FIFRA's registration requirements for use on almonds or whether permanent tolerances for this use would be appropriate. Under these circumstances, EPA does not believe that this time-limited tolerance decision serves as a basis for registration of kasugamycin by a State for special local needs under FIFRA section 24(c). Nor does this tolerance by itself serve as the authority for persons in any State other than California to use this pesticide on the applicable crops under FIFRA section 18 absent the issuance of an emergency exemption applicable within that State. For additional information regarding the emergency exemption for kasugamycin, contact the Agency's Registration Division at the address provided under
On March 6, 2018, EPA published in the
EPA's exposure assessments have been updated to include the additional exposure from use of kasugamycin from use on almonds, assuming both tolerance-level residues and 100 percent crop treated.
An acute dietary endpoint was not identified for kasugamycin, as a result, acute dietary risk is not of concern and a separate acute dietary exposure analysis was not performed. Chronic dietary risk estimates for kasugamycin are below the Agency's level of concern of 100% of the chronic population adjusted dose (cPAD) for all population subgroups. The most highly exposed population subgroup, children 1-2 years old, had a risk estimate of 4.5% of the cPAD, while the general US population had a risk estimate of 1.3% of the cPAD. There are no dietary risk estimates of concern associated with the section 18 use of kasugamycin on almonds in California, when considered along with existing uses of the fungicide.
Since there are no residential uses of kasugamycin and no commercial uses that could result in residential exposure, aggregate risk estimates are equivalent to dietary risk estimates, which are not of concern.
Occupational handler exposures to kasugamycin were estimated assuming the maximum application rate, and label-recommended equipment and methods, and standard assumptions with respect to the area treated. In the absence of chemical-specific data to assess handler's exposure and risk, EPA relied on surrogate unit exposure data to estimate exposure and risk. The Agency assumed a single layer of clothing (baseline), without additional personal protective equipment (PPE). The resulting handler risk estimates, or margins of exposures, are all above 100, and are not of concern.
Therefore, based on the risk assessments and information described above, EPA concludes there is a reasonable certainty that no harm will result to the general population, or to infants and children from aggregate exposure to kasugamycin residues. More detailed information on the Agency's analysis to establish a time-limited tolerance in or almonds can be found at
An adequate enforcement methodology (a reverse-phase, ion pairing HPLC/UV method (Morse Laboratories Method #Meth-146, Revision #4)) is available for collecting data and enforcing tolerances for kasugamycin in plant commodities.
The method may be requested from: Chief, Analytical Chemistry Branch, Environmental Science Center, 701 Mapes Rd., Ft. Meade, MD 20755-5350; telephone number: (410) 305-2905; email address:
In making its tolerance decisions, EPA seeks to harmonize U.S. tolerances with international standards whenever possible, consistent with U.S. food safety standards and agricultural practices. EPA considers the international maximum residue limits (MRLs) established by the Codex Alimentarius Commission (Codex), as required by FFDCA section 408(b)(4). The Codex Alimentarius is a joint United Nations Food and Agriculture Organization/World Health Organization food standards program, and it is recognized as an international food safety standards-setting organization in trade agreements to which the United States is a party. EPA may establish a tolerance that is different from a Codex MRL; however, FFDCA section 408(b)(4) requires that EPA explain the reasons for departing from the Codex level.
The Codex has not established MRLs for kasugamycin.
Therefore, time-limited tolerances are established for residues of kasugamycin, (3-O-[2-amino-4-[(carboxyimino-methyl)amino]-2,3,4,6-tetradeoxy-α-D-arabino-hexopyranosyl]-D-chiro-inositol), in or on Almond at 0.04 ppm and Almond, hulls at 0.4 ppm. These tolerances expire on December 31, 2023.
This action establishes tolerances under FFDCA section 408(l)(6) in response to an emergency exemption application submitted to the Agency. The Office of Management and Budget (OMB) has exempted these types of actions from review under Executive Order 12866, entitled “Regulatory Planning and Review” (58 FR 51735, October 4, 1993). Because this action has been exempted from review under Executive Order 12866, this action is not subject to Executive Order 13211, entitled “Actions Concerning Regulations That Significantly Affect Energy Supply, Distribution, or Use” (66 FR 28355, May 22, 2001) or Executive Order 13045, entitled “Protection of Children from Environmental Health Risks and Safety Risks” (62 FR 19885, April 23, 1997), nor is it considered a regulatory action under Executive Order 13771, entitled “Reducing Regulations and Controlling Regulatory Costs” (82 FR 9339, February 3, 2017). This action does not contain any information collections subject to OMB approval under the Paperwork Reduction Act (44 U.S.C. 3501
Since tolerances and exemptions that are established in support of a FIFRA section 18 emergency exemption do not require the issuance of a proposed rule, the requirements of the Regulatory Flexibility Act (5 U.S.C. 601
This action directly regulates growers, food processors, food handlers, and food retailers, but does not directly regulate states or tribes, nor does this action alter the relationships or distribution of power and responsibilities established by Congress in the preemption provisions of FFDCA section 408(n)(4). As such, the Agency has determined that this action will not have a substantial direct effect on States or
This action does not involve any technical standards that would require Agency consideration of voluntary consensus standards pursuant to section 12(d) of the National Technology Transfer and Advancement Act (15 U.S.C. 272 note).
Pursuant to the Congressional Review Act (5 U.S.C. 801
Environmental protection, Administrative practice and procedure, Agricultural commodities, Pesticides and pests, Reporting and recordkeeping requirements.
Therefore, for the reasons stated in the preamble, the EPA amends 40 CFR chapter I as follows:
21 U.S.C. 321(q), 346a and 371.
(b)
Environmental Protection Agency (EPA).
Final rule.
This regulation establishes tolerances for residues of the insecticide afidopyropen, including its metabolites and degradates, in or on multiple food and animal commodities identified and discussed later in this document. BASF Corporation and the Interregional Research Project #4 requested these tolerances under section 346a of the Federal Food, Drug, and Cosmetic Act (FFDCA).
This regulation is effective October 8, 2020. Objections and requests for hearings must be received on or before December 7, 2020, and must be filed in accordance with the instructions provided in 40 CFR part 178 (see also Unit I.C. of the
The dockets for this action, identified by docket identification (ID) numbers EPA-HQ-OPP-2016-0416 and EPA-HQ-OPP-2019-0101, are available at
Due to the public health concerns related to COVID-19, the EPA Docket Center (EPA/DC) and Reading Room is closed to visitors with limited exceptions. The staff continues to provide remote customer service via email, phone, and webform. For the latest status information on EPA/DC services and docket access, visit
Marietta Echeverria, Acting Director, Registration Division (7505P), Office of Pesticide Programs, Environmental Protection Agency, 1200 Pennsylvania Avenue NW, Washington, DC 20460-0001; main telephone number: (703) 305-7090; email address:
You may be potentially affected by this action if you are an agricultural producer, food manufacturer, or pesticide manufacturer. The following list of North American Industrial Classification System (NAICS) codes is not intended to be exhaustive, but rather provides a guide to help readers determine whether this document applies to them. Potentially affected entities may include:
• Crop production (NAICS code 111).
• Animal production (NAICS code 112).
• Food manufacturing (NAICS code 311).
• Pesticide manufacturing (NAICS code 32532).
You may access a frequently updated electronic version of EPA's tolerance regulations at 40 CFR part 180 through the Government Publishing Office's e-CFR site at
Under FFDCA section 408(g), 21 U.S.C. 346a(g), any person may file an objection to any aspect of this regulation and may also request a hearing on those
In addition to filing an objection or hearing request with the Hearing Clerk as described in 40 CFR part 178, please submit a copy of the filing (excluding any Confidential Business Information (CBI)) for inclusion in the public docket. Information not marked confidential pursuant to 40 CFR part 2 may be disclosed publicly by EPA without prior notice. Submit the non-CBI copy of your objection or hearing request, identified by docket ID numbers EPA-HQ-OPP-2016-0416 and EPA-HQ-OPP-2019-0101, by one of the following methods:
•
•
•
In the
In addition, in the
Based upon review of the data supporting these petitions and in accordance with its authority under FFDCA section 408(d)(1)(A)(i), EPA is establishing tolerances that vary from what the petitioners sought. The reasons for these changes are explained in detail in Unit IV.D.
Section 408(b)(2)(A)(i) of FFDCA allows EPA to establish a tolerance (the legal limit for a pesticide chemical residue in or on a food) only if EPA determines that the tolerance is “safe.” Section 408(b)(2)(A)(ii) of FFDCA defines “safe” to mean that “there is a reasonable certainty that no harm will result from aggregate exposure to the pesticide chemical residue, including all anticipated dietary exposures and all other exposures for which there is reliable information.” This includes exposure through drinking water and in residential settings but does not include occupational exposure. Section 408(b)(2)(C) of FFDCA requires EPA to give special consideration to exposure of infants and children to the pesticide chemical residue in establishing a tolerance and to “ensure that there is a reasonable certainty that no harm will result to infants and children from aggregate exposure to the pesticide chemical residue . . . .”
Consistent with FFDCA section 408(b)(2)(D), and the factors specified in FFDCA section 408(b)(2)(D), EPA has reviewed the available scientific data and other relevant information in support of these actions. EPA has enough data to assess the hazards of and to make a determination on aggregate exposure for afidopyropen, including exposure resulting from the tolerances established by this action. EPA's assessment of exposures and risks associated with afidopyropen follows.
EPA has evaluated the available toxicity data and considered its validity, completeness, and reliability as well as
Applications of afidopyropen result in pesticide chemical residues of concern in or on food of both the parent compound afidopyropen and its metabolite cyclopropane carboxylic acid (CPCA). Because the parent and degradate have different toxicities, EPA assessed aggregate exposure from afidopyropen and from CPCA separately as part of the effort to evaluate the safety of afidopyropen tolerances. Detailed information on the studies received and the nature of the adverse effects caused by afidopyropen and CPCA can be found in the following documents: (1) “Afidopyropen. Human Health Risk Assessment for Section 3 Requests for a New Active Ingredient,” dated April 4, 2018; (2) “Afidopyropen. Human Health Risk Assessment for the Section 3 Request for New Use on Animal Feed, Nongrass (Crop Group 18); Grass, forage, fodder and Hay (Crop Group 17); and Sorghum, and a Request for Increased Application to Tree Nuts,” dated December 9, 2019; and (3) “Afidopyropen. Human Health Risk Assessment for Section 3 Request for Greenhouse Use on Cucumber, Strawberry and Vegetable, Fruiting (Group 8-10),” dated October 30, 2019, by going to
Once a pesticide's toxicological profile is determined, EPA identifies toxicological points of departure (POD) and levels of concern (LOC) to use in evaluating the risk posed by human exposure to the pesticide. For hazards that have a threshold below which there is no appreciable risk, the toxicological POD is used as the basis for derivation of reference values for risk assessment. PODs are developed based on a careful analysis of the doses in each toxicological study to determine the dose at which no adverse effects are observed (the NOAEL) and the lowest dose at which adverse effects of concern are identified (the LOAEL). Uncertainty/safety factors are used in conjunction with the POD to calculate a safe exposure level—generally referred to as a population-adjusted dose (PAD) or a reference dose (RfD)—and a safe margin of exposure (MOE). For non-threshold risks, the Agency assumes that any amount of exposure will lead to some degree of risk. Thus, the Agency estimates risk in terms of the probability of an occurrence of the adverse effect expected in a lifetime. For more information on the general principles EPA uses in risk characterization and a complete description of the risk assessment process, see
A summary of the toxicological doses and endpoints selected for use in the human health risk assessment for afidopyropen and CPCA is shown in Tables 1 and 2 of this Unit.
1.
i.
ii.
iii.
iv.
2.
Afidopyropen and/or CPCA may be transported to surface water and groundwater via runoff, leaching, or spray drift. Because the Agency does not have comprehensive monitoring data, drinking water concentration estimates are made by reliance on simulation or modeling, taking into account data on the physical and fate characteristics of afidopyropen. Further information regarding EPA drinking water models used in pesticide exposure assessment can be found at
Because of the difference in structure and mode of action, EPA calculated separate estimated drinking water concentrations (EDWCs) for afidopyropen and CPCA. Afidopyropen degrades in soil and water to form a wide range of structurally similar transformation products. All degradates, except CPCA, are included as residues of concern in the afidopyropen total toxic residues (TTR) analysis. Due to differences in both structure and mode of action, CPCA is not included in the TTR analysis for afidopyropen, and EDWCs were calculated for CPCA separately.
The highest modeled EDWCs for afidopyropen and for CPCA used in the dietary risk assessments were entered directly into the latest version of the Pesticides in Water Calculator (PWC 1.52). EDWCs were calculated for both surface water and groundwater based on the maximum annual application rate (0.33 lb a.i./A) and a Percent Cropped Area (PCA) of 1.0 that are listed on current afidopyropen labels. For afidopyropen in surface water, the highest EDWC for the acute assessment is 7.1 ppb and for the chronic assessment is 3.9 ppb; for CPCA, the highest EDWCs are 3.6 ppb for acute assessment and 2.7 ppb for chronic assessment. For afidopyropen in groundwater, the highest EDWCs are negligible for acute assessment and not expected for chronic assessment; for CPCA, the highest EDWCs are 54 ppb for acute assessment and 35 for chronic assessment.
For acute dietary risk assessment for afidopyropen, the EDWC value of 7.1 ppb was used to assess the contribution to drinking water. For chronic and cancer dietary risk assessment for afidopyropen, the EDWC value of 3.9 ppb was used to assess the contribution to drinking water. An acute dietary risk assessment was not conducted for CPCA since an acute dietary endpoint was not identified. Therefore, the only EDWC used for assessing the contribution to
3.
4.
Unlike other pesticides for which EPA has followed a cumulative risk approach based on a common mechanism of toxicity, EPA has not made a common mechanism of toxicity finding as to afidopyropen and any other substances. For the purposes of this tolerance action, therefore, EPA has not assumed that afidopyropen has a common mechanism of toxicity with other substances.
1.
2.
i. The toxicology database for afidopyropen is considered complete for evaluating and characterizing toxicity, assessing children's susceptibility under FQPA, and selecting endpoints for the exposure pathways of concern.
ii. Acute oral (gavage) and sub-chronic oral (dietary) neurotoxicity studies were conducted in rats with effects seen only in the acute study at the limit dose. In subchronic studies with mice and dogs, indications of neurotoxicity were limited to vacuolation of white matter and/or spinal cord, which may have been an artifact of not preparing the tissues properly. Further, the nervous tissue vacuolation was observed at doses 7.5x-115x higher than the POD for the chronic dietary risk assessment. Thus, the potential effects are well-characterized with clearly established NOAEL/LOAEL values and the selected PODs are protective for the observed effects.
Based on the weight of the evidence and taking into consideration the PODs selected for risk assessment, a developmental neurotoxicity study is not required at this time. Clear NOAELs have been established for all life stages, the selected PODs are protective of all pre- and/or post-natal toxicity observed throughout the toxicology database, and no specific neuropathological effects were noted. A DNT with rat (the typical test species) would not be expected to contribute meaningfully to the database, as the rat is expected to be less sensitive than dogs and mice.
iii. There is evidence of increased susceptibility following pre- and/or post-natal exposure to afidopyropen. Clear NOAELs have been established for the developmental effects in rats and rabbits as well as the offspring effects in the 2-generation reproduction studies. The NOAELs chosen for all selected endpoints are protective of all developmental and offspring effects seen in the database.
iv. There are no residual uncertainties identified in the exposure databases. The dietary assessment is based on high-end assumptions such as tolerance-equivalent residue levels of the parent compound and CPCA in foods, 100 PCT, default processing factors, and modeled, high-end estimates of residues in drinking water. All the exposure estimates are based on high-end assumptions and are not likely to underestimate risk. In addition, the residential exposure assessment was conducted based on the Residential SOPs such that residential exposure and risk will not be underestimated.
3.
EPA determines whether acute and chronic dietary pesticide exposures are safe by comparing aggregate exposure estimates to the acute PAD (aPAD) and chronic PAD (cPAD). For linear cancer risks, EPA calculates the lifetime probability of acquiring cancer given the estimated aggregate exposure. Short-, intermediate- and chronic-term risks are evaluated by comparing the estimated aggregate food, water and residential exposure to the appropriate PODs to ensure that an adequate MOE exists.
Separate dietary assessments were conducted for afidopyropen and CPCA as the toxicological endpoints are different for these compounds.
1.
2.
3.
4.
5.
6.
Suitable tolerance enforcement methods for plants and livestock using liquid chromatography/mass spectrometer/mass spectrometer (LC-MS/MS) analyses are available for the analysis of afidopyropen. In addition, a new acceptable enforcement method (using LC-MS/MS) has been submitted for determining afidopyropen and CPCA in livestock commodities.
The Quick Easy Cheap Effective Rugged Safe (QuEChERS) multi-residue method D1514/01 is considered suitable for the analysis of afidopyropen in plant and livestock commodities. However, this multi-residue method is not suitable for determination of CPCA in livestock commodities.
Analytical standards for afidopyropen and CPCA are currently unavailable in the EPA National Pesticide Standards Repository. Supplies of analytical standards will be replenished to the repository at the following address: USEPA National Pesticide Standards Repository/Analytical Chemistry Branch, Environmental Science Center, 701 Mapes Road, Ft. Meade, MD 20755-5350; telephone number: (410) 305-2905; email address:
In making its tolerance decisions, EPA seeks to harmonize U.S. tolerances with international standards whenever possible, consistent with U.S. food safety standards and agricultural practices. EPA considers the international maximum residue limits (MRLs) established by the Codex Alimentarius Commission (Codex), as required by FFDCA section 408(b)(4). Codex has no established MRLs for afidopyropen.
Three comments were received in response to the notice of filing for the IR-4 petition (PP 8E8732). Two comments opposed the proposed tolerances on strawberry and vegetable, fruiting, crop group 8-10 as being too high; the other comment was not related to the afidopyropen tolerances. The commenters who were concerned that the tolerances were too high incorrectly misread the petitioned-for tolerances as 15 ppm rather than 0.15 ppm and 20 ppm rather than 0.20 ppm. The Agency is not establishing tolerances at those higher levels. Regardless, the comments seek even lower tolerances values, essentially no residues of the pesticide on strawberries and fruiting vegetables. Although the Agency recognizes that some individuals believe that pesticides should be banned on agricultural crops, the existing legal framework provided by section 408 of the FFDCA authorizes EPA to establish tolerances when it determines that the tolerance is safe. Upon consideration of the validity, completeness, and reliability of the available data as well as other factors the FFDCA requires EPA to consider, EPA has determined that these afidopyropen tolerances are safe. The commenters have provided no information to indicate that afidopyropen is not safe.
Several petitioned-for tolerance levels are different from those being established by EPA. Many of these differences are attributable to the petitioned-for levels not being consistent with Organization for Economic Cooperation and Development (OECD) rounding class practice. The Sorghum, grain, grain and Sorghum, sweet, grain tolerance levels are lower than the petitioned-for level due to the differences in the number of significant figures used in the MRL calculation. EPA is establishing a higher tolerance for Grain, aspirated fractions based upon calculations using the highest average field trial (HAFT) from Sorghum, grain (0.10 ppm) and multiplying that figure by the calculated aspirated grains processing factor (PF) of 560x and then rounding up using OECD rounding class practice to the tolerance value of 60 ppm.
Tolerances being established for livestock commodities vary from the petitioned-for tolerances due to different models used in determining dietary burden and anticipated residues. The petitioner proposed tolerances using different models to determine dietary burden and scaled anticipated residues from the feeding study at different dose levels (transfer factor approach) to calculate a proposed tolerance. EPA has determined the appropriate tolerance value using the Dietary Burden Calculator PMRA v.2.8 to calculate dietary burden and Langmuir Model v.1.5 to determine tolerance level. The difference in dietary burden calculations for poultry and swine lead to EPA's conclusion that egg, poultry meat byproducts, and hog meat/meat byproducts had no reasonable expectation of finite residues, and that tolerances are not currently needed for these commodities.
A tolerance level of 0.30 ppm was proposed for Vegetable, fruiting, group 8-10 based on the OECD MRL calculator using the greenhouse pepper data,
Therefore, tolerances are established for residues of the insecticide afidopyropen, [(3
This action establishes tolerances under FFDCA section 408(d) in response to a petition submitted to the Agency. The Office of Management and Budget (OMB) has exempted these types of actions from review under Executive Order 12866, entitled “Regulatory Planning and Review” (58 FR 51735, October 4, 1993). Because this action has been exempted from review under Executive Order 12866, this action is not subject to Executive Order 13211, entitled “Actions Concerning Regulations That Significantly Affect Energy Supply, Distribution, or Use” (66 FR 28355, May 22, 2001) or Executive Order 13045, entitled “Protection of Children from Environmental Health Risks and Safety Risks” (62 FR 19885, April 23, 1997) or Executive Order 13771, entitled “Reducing Regulations and Controlling Regulatory Costs” (82 FR 9339, February 3, 2017). This action does not contain any information collections subject to OMB approval under the Paperwork Reduction Act (PRA) (44 U.S.C. 3501
Since tolerances and exemptions that are established on the basis of a petition under FFDCA section 408(d), such as the tolerance in this final rule, do not require the issuance of a proposed rule, the requirements of the Regulatory Flexibility Act (RFA) (5 U.S.C. 601
This action directly regulates growers, food processors, food handlers, and food retailers, not States or tribes, nor does this action alter the relationships or distribution of power and responsibilities established by Congress in the preemption provisions of FFDCA section 408(n)(4). As such, the Agency has determined that this action will not have a substantial direct effect on States or tribal governments, on the relationship between the National Government and the States or tribal governments, or on the distribution of power and responsibilities among the various levels of government or between the Federal Government and Indian tribes. Thus, the Agency has determined that Executive Order 13132, entitled “Federalism” (64 FR 43255, August 10, 1999) and Executive Order 13175, entitled “Consultation and Coordination with Indian Tribal Governments” (65 FR 67249, November 9, 2000) do not apply to this action. In addition, this action does not impose any enforceable duty or contain any unfunded mandate as described under Title II of the Unfunded Mandates Reform Act (UMRA) (2 U.S.C. 1501
This action does not involve any technical standards that would require Agency consideration of voluntary consensus standards pursuant to section 12(d) of the National Technology Transfer and Advancement Act (NTTAA) (15 U.S.C. 272 note).
Pursuant to the Congressional Review Act (5 U.S.C. 801
Environmental protection, Administrative practice and procedure, Agricultural commodities, Pesticides and pests, Reporting and recordkeeping requirements.
Therefore, 40 CFR chapter I is amended as follows:
21 U.S.C. 321(q), 346a and 371.
The additions read as follows:
(a)
(2) Tolerances are established for residues of afidopyropen, including its metabolites and degradates, in or on the commodities in table 2 to this paragraph (a)(2). Compliance with the tolerance levels specified in this paragraph (a)(2) is to be determined by measuring only the sum of afidopyropen, [(3
National Marine Fisheries Service (NMFS), National Oceanic and Atmospheric Administration (NOAA), Commerce.
Notification; quota transfer.
NMFS announces that the State of New Hampshire is transferring a portion of its 2020 commercial bluefish quota to the State of North Carolina. This quota adjustment is necessary to comply with the Atlantic Bluefish Fishery Management Plan quota transfer provisions. This announcement informs the public of the
Effective October 5, 2020, through December 31, 2020.
Laura Hansen, Fishery Management Specialist, (978) 281-9225.
Regulations governing the Atlantic bluefish fishery are found in 50 CFR 648.160 through 648.167. These regulations require annual specification of a commercial quota that is apportioned among the coastal states from Maine through Florida. The process to set the annual commercial quota and the percent allocated to each state is described in § 648.162, and the final 2020 allocations were published on June 29, 2020 (85 FR 38794).
The final rule implementing Amendment 1 to the Bluefish Fishery Management Plan (FMP) published in the
New Hampshire is transferring 9,000 lb (4,082 kg) of bluefish commercial quota to North Carolina through mutual agreement of the states. This transfer was requested to ensure that North Carolina would not exceed its 2020 state quota. The revised bluefish quotas for 2020 are: New Hampshire, 2,468 lb (1,119 kg) and North Carolina, 946,058 lb (429,125 kg).
NMFS issues this action pursuant to section 305(d) of the Magnuson-Stevens Act. This action is required by 50 CFR 648.162(e)(1)(i) through (iii), which was issued pursuant to section 304(b), and is exempted from review under Executive Order 12866.
16 U.S.C. 1801
Federal Trade Commission.
Notice of proposed rulemaking; request for public comment.
The Federal Trade Commission (“FTC” or “Commission”) requests public comment on its Duties of Creditors Regarding Risk-Based Pricing Rule (“Risk-Based Pricing Rule”) as part of the FTC's systematic review of all current Commission regulations and guides. In addition, the FTC is proposing to amend the Rule to correspond to changes made to the Fair Credit Reporting Act (“FCRA”) by the Dodd-Frank Act.
Written comments must be received on or before December 22, 2020.
Interested parties may file a comment online or on paper by following the Request for Comment part of the
David Lincicum (202-326-2773), Division of Privacy and Identity Protection, Bureau of Consumer Protection, Federal Trade Commission, 600 Pennsylvania Avenue NW, Washington, DC 20580.
The Fair and Accurate Credit Transactions Act of 2003 (“FACT Act”) was signed into law on December 4, 2003. Public Law 108-159, 117 Stat. 1952. Section 311 of the FACT Act added section 615(h), 15 U.S.C. 1681m(h), to the FCRA to address risk-based pricing. Risk-based pricing refers to the practice of setting or adjusting the price and other terms of credit offered or extended to a particular consumer to reflect the risk of nonpayment by that consumer. Information from a consumer report is often used in evaluating the risk posed by the consumer. Creditors that engage in risk-based pricing generally offer more favorable terms to consumers with good credit histories and less favorable terms to consumers with poor credit histories.
Under section 615(h) of the FCRA, a person generally must provide a risk-based pricing notice to a consumer when the person uses a consumer report in connection with an extension of credit and, based in whole or in part on the consumer report, extends credit to the consumer on terms that are materially less favorable than the most favorable terms available to a substantial proportion of consumers. The risk-based pricing notice is designed primarily to improve the accuracy of consumer reports by alerting consumers to the existence of negative information in their consumer reports, so that consumers can, if they choose, check their consumer reports for accuracy and correct any inaccurate information. The Federal Reserve Board and the Commission jointly published regulations implementing these risk-based pricing provisions on January 15, 2010.
The Dodd-Frank Wall Street Reform and Consumer Protection Act (“Dodd-Frank Act”) was signed into law in 2010.
The Commission promulgated the Risk-Based Pricing Rule at a time when it had rulemaking authority for a broader group of consumer report users. While the Dodd-Frank Act did not change the Commission's enforcement authority for the Risk-Based Pricing Rule, it did narrow the Commission's rulemaking authority with respect to the Rule. It now covers only motor vehicle dealers.
The proposed amendment to § 640.1(a) narrows the description of the scope of the Risk-Based Pricing Rule to those entities set forth in the Dodd-Frank Act that are predominantly engaged in the sale and servicing of motor vehicles, excluding those dealers that directly extend credit to consumers and do not routinely assign the extensions of credit to an unaffiliated third party.
The proposed amendment also removes § 640.1(b), which describes the process by which the Commission worked with the Federal Reserve Board to issue the Risk-Based Pricing Rule, and states that the Commission's and the Board's rules are substantively identical. The Commission proposes to remove this section because the Dodd-Frank Act transferred the Board's rulemaking authority for the Risk-Based Pricing Rule to the CFPB.
The proposed amendment to § 640.2 adds a definition of “motor vehicle dealer” that defines motor vehicle dealers as those entities excluded from the CFPB's jurisdiction under the Dodd-Frank Act.
In addition, the proposed amendments update references to the risk-based pricing notices in §§ 640.4(a)(1)(viii), 640.4(a)(2)(viii), 640.5(d)(1)(ii)(I), 640.5(e)(1)(ii)(L), and 640.5(f)(iii)(I) from the Board's website to the CFPB's website to reflect the CFPB's authority under the Dodd-Frank Act.
The Rule contains examples that apply to entities no longer within the scope of the Rule because of the Dodd-Frank Act. Retaining these examples may lead to confusion about the actual scope of the Risk-Based Pricing Rule. Accordingly, in addition to changing the term “person” to “motor vehicle dealers” in some examples as discussed above, the Commission proposes to modify some of the examples to provide clearer guidance to financial institutions that are covered motor vehicle dealers. For example, the proposal removes references to utility companies and charge cards (§ 640.2(n)(3)); student loans, secured and unsecured credit cards, and fixed and variable rate mortgages (§ 640.3(b)); and replaces references to “credit card issuers” with “motor vehicle dealers” (§§ 640.4(d)(2); 640.5(a)(2); 640.5(c)(3)). These modifications to the cited examples are not intended to modify the substantive requirements of the Rule, as the examples simply illustrate the Rule's application in a particular context.
In addition to proposing the changes described above, the Commission seeks information about the costs and benefits of the Rule, and its regulatory and economic impact. It has been ten years since the Rule was enacted. Consistent with its practice of reviewing all its rules and guides periodically, the Commission seeks to ascertain whether changes in technology, business models, or the law warrant modification or rescission of the Rule. As part of this review the Commission solicits comments on, among other things, the economic impact and benefits of the Risk-Based Pricing Rule; possible conflict between the Risk-Based Pricing Rule and state, local, or other federal laws or regulations; and the effect on the Risk-Based Pricing Rule of any technological, economic, or other industry changes.
The Commission requests written comment on any or all of the following questions. These questions are designed to assist the public and should not be construed as a limitation on the issues about which public comments may be submitted. The Commission requests that responses to its questions be as specific as possible, including a reference to the question being answered, and refer to empirical data or other evidence upon which the comment is based whenever available and appropriate.
1. Is there a continuing need for specific provisions of the Risk-Based Pricing Rule? Why or why not?
2. What benefits has the Risk-Based Pricing Rule provided to consumers? What evidence supports the asserted benefits?
3. What modifications, if any, should be made to the Risk-Based Pricing Rule to increase the benefits to consumers?
a. What evidence supports the proposed modifications?
b. How would these modifications affect the costs imposed by the Risk-Based Pricing Rule?
4. What significant costs, if any, has the Risk-Based Pricing Rule imposed on consumers? What evidence supports the asserted costs?
5. What modifications, if any, should be made to the Risk-Based Pricing Rule to reduce any costs imposed on consumers?
a. What evidence supports the proposed modifications?
b. How would these modifications affect the benefits provided by the Risk-Based Pricing Rule?
6. What benefits, if any, has the Risk-Based Pricing Rule provided to businesses, including small businesses? What evidence supports the asserted benefits?
7. What modifications, if any, should be made to the Risk-Based Pricing Rule to increase its benefits to businesses, including small businesses?
a. What evidence supports the proposed modifications?
b. How would these modifications affect the costs the Risk-Based Pricing Rule imposes on businesses, including small businesses?
c. How would these modifications affect the benefits to consumers?
8. What significant costs, if any, including costs of compliance, has the Risk-Based Pricing Rule imposed on businesses, including small businesses? What evidence supports the asserted costs?
9. What modifications, if any, should be made to the Risk-Based Pricing Rule
a. What evidence supports the proposed modifications?
b. How would these modifications affect the benefits provided by the Risk-Based Pricing Rule?
10. What evidence is available concerning the degree of industry compliance with the Risk-Based Pricing Rule?
11. What modifications, if any, should be made to the Risk-Based Pricing Rule to account for changes in relevant technology or economic conditions? What evidence supports the proposed modifications?
12. Does the Risk-Based Pricing Rule overlap or conflict with other federal, state, or local laws or regulations? If so, how?
a. What evidence supports the asserted conflicts?
b. With reference to the asserted conflicts, should the Rule be modified? If so, why, and how? If not, why not?
13. Should the Risk-Based Pricing Rule be amended to remove provisions addressing circumstances that do not apply, or typically do not apply, to motor vehicle dealers?
14. Can the examples set forth in the Rule be amended further to make them more helpful and informative to motor vehicle dealers? Would additional examples be helpful, and if so, what examples? Should examples that relate to types of transactions that are not typical in the motor vehicle context be removed?
15. The Commission proposes to amend the Rule now that it applies exclusively to motor vehicle dealers. Are the proposed modifications appropriate? Should additional amendments be made? Would these amendments create conflicts with any other federal, state, or local regulations or laws?
You can file a comment online or on paper. For the Commission to consider your comment, we must receive it on or before December 22, 2020. Write “Risk-Based Pricing Rule, 16 CFR part 640, Project No. P205408” on the comment. Your comment, including your name and your state, will be placed on the public record of this proceeding, including the
Because of the public health emergency in response to the COVID-19 outbreak and the agency's heightened security screening, postal mail addressed to the Commission will be subject to delay. We strongly encourage you to submit your comment online through the
If you file your comment on paper, write “Risk-Based Pricing Rule, 16 CFR part 640, Project No. P205408” on your comment and on the envelope, and mail your comment to the following address: Federal Trade Commission, Office of the Secretary, 600 Pennsylvania Avenue NW, Suite CC-5610 (Annex B), Washington, DC 20580; or deliver your comment to the following address: Federal Trade Commission, Office of the Secretary, Constitution Center, 400 7th Street SW, 5th Floor, Suite 5610 (Annex B), Washington, DC 20024. If possible, please submit your paper comment to the Commission by courier or overnight service.
Because your comment will be placed on
Comments containing material for which confidential treatment is requested must be filed in paper form, must be clearly labeled “Confidential,” and must comply with FTC Rule 4.9(c). In particular, the written request for confidential treatment that accompanies the comment must include the factual and legal basis for the request, and must identify the specific portions of the comment to be withheld from the public record. Your comment will be kept confidential only if the FTC General Counsel grants your request in accordance with the law and the public interest. Once your comment has been posted on
Visit the Commission website at
Written communications and summaries or transcripts of oral communications respecting the merits of this proceeding, from any outside party to any Commissioner or Commissioner's advisor, will be placed on the public record.
The Risk-Based Pricing Rule contains information collection requirements as defined by 5 CFR 1320.3(c), the definitional provision within the Office of Management and Budget (“OMB”) regulations that implement the Paperwork Reduction Act (“PRA”). 44 U.S.C. 3501
This proposal would amend 16 CFR part 640. The collections of information related to the Risk-Based Pricing Rule have been previously reviewed and approved by OMB in accordance with the PRA.
The proposed amendments do not modify or add to information collection requirements that were previously approved by OMB. The amendments make no substantive changes to the
The Regulatory Flexibility Act (“RFA”), as amended by the Small Business Regulatory Enforcement Fairness Act of 1996, requires an agency to either provide an Initial Regulatory Flexibility Analysis (“IRFA”) with a proposed rule, or certify that the proposed rule will not have a significant impact on a substantial number of small entities.
Therefore, based on available information, the Commission certifies that amending the Risk-Based Pricing Rule as proposed will not have a significant economic impact on a substantial number of small businesses. Although the Commission certifies under the RFA that the proposed amendment would not, if promulgated, have a significant impact on a substantial number of small entities, the Commission has determined, nonetheless, that it is appropriate to publish an IRFA to inquire into the impact of the proposed amendment on small entities. Therefore, the Commission has prepared the following analysis:
To address the Dodd-Frank Act's changes to the Commission's rulemaking authority, the Commission proposes to clarify that the Rule applies only to motor vehicle dealers.
The objectives of the proposed Rule are discussed above. The legal basis for the proposed Rule is 15 U.S.C. 1681m(h).
Determining a precise estimate of the number of small entities
The proposed amendments would impose no new reporting, recordkeeping, or other compliance requirements. The small entities potentially covered by the proposed amendment will include all such entities subject to the Rules.
The Commission has not identified any other federal statutes, rules, or policies that would duplicate, overlap, or conflict with the proposed amendment. The Commission is requesting comment on the extent to which other federal standards involving consumer reports may duplicate, satisfy, or possibly conflict with the Rule's requirements for any covered financial institutions.
The Commission has not proposed any specific small entity exemption or other significant alternatives because the proposed amendment would not impose any new requirements or compliance costs. Nonetheless, the Commission welcomes comment on any significant alternative consistent with the FCRA that would minimize the impact of the proposed Rule on small entities—specifically institutions that would be newly covered financial institutions—if there are any.
Consumer protection, Credit, Trade practices.
15 U.S.C. 1681m(h); 12 U.S.C. 5519(d); Sec. 311, Pub. L. 108-159.
(a)
(i) Uses a consumer report in connection with an application for, or a grant, extension, or other provision of, credit to a consumer that is primarily for personal, family, or household purposes; and
(ii) Based in whole or in part on the consumer report, grants, extends, or otherwise provides credit to the consumer on material terms that are materially less favorable than the most favorable material terms available to a substantial proportion of consumers from or through that motor vehicle dealer.
(2)
(b)
For purposes of this part, the following definitions apply:
(a)
(b)
(c)
(d)
(e)
(f)
(g)
(h)
(i)
(j)
(k)
(l)
(m)
(n)
(1)(i) Except as otherwise provided in paragraphs (n)(1)(ii) and (n)(3) of this section, in the case of credit extended under an open-end credit plan, the annual percentage rate required to be disclosed under 12 CFR 226.6(a)(1)(ii) or 12 CFR 226.6(b)(2)(i), excluding any temporary initial rate that is lower than the rate that will apply after the temporary rate expires, any penalty rate that will apply upon the occurrence of one or more specific events, such as a late payment or an extension of credit that exceeds the credit limit, and any fixed annual percentage rate option for a home equity line of credit;
(ii) In the case of a credit card (other than a credit card that is used to access a home equity line of credit or a charge card), the annual percentage rate required to be disclosed under 12 CFR 226.6(b)(2)(i) that applies to purchases (“purchase annual percentage rate”) and no other annual percentage rate, or in the case of a credit card that has no purchase annual percentage rate, the annual percentage rate that varies based on information in a consumer report and that has the most significant financial impact on consumers;
(2) In the case of closed-end credit, the annual percentage rate required to be disclosed under 12 CFR 226.17(c) and 226.18(e); and
(3) In the case of credit for which there is no annual percentage rate, the financial term that varies based on information in a consumer report and that has the most significant financial impact on consumers, such as a deposit required in connection with an extension of credit.
(o)
(p)
(q)
(r)
(a)
(1) Uses a consumer report in connection with an application for, or a grant, extension, or other provision of, credit to that consumer that is primarily for personal, family, or household purposes; and
(2) Based in whole or in part on the consumer report, grants, extends, or otherwise provides credit to that consumer on material terms that are materially less favorable than the most favorable material terms available to a substantial proportion of consumers from or through that motor vehicle dealer.
(b)
(1)
(A) Determining the credit score (hereafter referred to as the “cutoff score”) that represents the point at which approximately 40 percent of the consumers to whom it grants, extends, or provides credit have higher credit scores and approximately 60 percent of the consumers to whom it grants, extends, or provides credit have lower credit scores; and
(B) Providing a risk-based pricing notice to each consumer to whom it grants, extends, or provides credit whose credit score is lower than the cutoff score.
(ii)
(iii)
(B)
(C)
(D)
(iv)
(v)
(B) A motor vehicle dealer engages in risk-based pricing, and the annual percentage rates it offers to consumers are based in whole or in part on a credit score. The motor vehicle dealer takes a representative sample of the consumers to whom it extended loans over the preceding six months. The motor vehicle dealer determines that approximately 80 percent of the sampled consumers received credit at its lowest annual percentage rate, and 20 percent received credit at a higher annual percentage rate. Approximately 80 percent of the sampled consumers have a credit score at or above 750 (on a scale of 350 to 850), and 20 percent have a credit score below 750. Thus, the motor vehicle dealer selects 750 as its cutoff score. A consumer applies to the motor vehicle dealer for an automobile loan. The motor vehicle dealer obtains a credit score for the consumer. The consumer's credit score is 740. Since the consumer's 740 credit score falls below the 750 cutoff score, the motor vehicle dealer must provide a risk-based pricing notice to the consumer.
(C) A motor vehicle dealer engages in risk-based pricing, obtains credit scores from one of the nationwide consumer reporting agencies, and uses the credit score proxy method to determine which consumers must receive a risk-based pricing notice. A consumer applies to the motor vehicle dealer for credit to finance the purchase of an automobile. A credit score about that consumer is not available from the consumer reporting agency from which the lender obtains credit scores. The motor vehicle dealer nevertheless grants, extends, or provides credit to the consumer. The motor vehicle dealer must provide a risk-based pricing notice to the consumer.
(2)
(ii)
(iii)
(c)
(i) A consumer applies for a credit card either in connection with an application program, such as a direct-mail offer or a take-one application, or in response to a solicitation under 12 CFR 226.5a, and more than a single possible purchase annual percentage rate may apply under the program or solicitation; and
(ii) Based in whole or in part on a consumer report, the credit card issuer provides a credit card to the consumer with an annual percentage rate referenced in § 640.2(n)(1)(ii) that is greater than the lowest annual percentage rate referenced in § 640.2(n)(1)(ii) available in connection with the application or solicitation.
(2)
(i) The consumer applies for a credit card for which the card issuer provides a single annual percentage rate referenced in § 640.2(n)(1)(ii), excluding a temporary initial rate that is lower than the rate that will apply after the temporary rate expires and a penalty rate that will apply upon the occurrence of one or more specific events, such as a late payment or an extension of credit that exceeds the credit limit; or
(ii) The credit card issuer offers the consumer the lowest annual percentage rate referenced in § 640.2(n)(1)(ii) available under the credit card offer for which the consumer applied, even if a lower annual percentage rate referenced in § 640.2(n)(1)(ii) is available under a different credit card offer issued by the card issuer.
(3)
(ii) The same facts as in the example in paragraph (c)(3)(i) of this section, except that the card issuer provides a credit card to the consumer at a purchase annual percentage rate of 10 percent. The card issuer is not required to provide a risk-based pricing notice to the consumer even if, under a different credit card solicitation, that consumer or other consumers might qualify for a purchase annual percentage rate of 8 percent.
(d)
(i) Uses a consumer report in connection with a review of credit that has been extended to the consumer; and
(ii) Based in whole or in part on the consumer report, increases the annual percentage rate (the annual percentage rate referenced in § 640.2(n)(1)(ii) in the case of a credit card).
(2)
(a)
(i) A statement that a consumer report (or credit report) includes information about the consumer's credit history and the type of information included in that history;
(ii) A statement that the terms offered, such as the annual percentage rate, have been set based on information from a consumer report;
(iii) A statement that the terms offered may be less favorable than the terms offered to consumers with better credit histories;
(iv) A statement that the consumer is encouraged to verify the accuracy of the information contained in the consumer report and has the right to dispute any inaccurate information in the report;
(v) The identity of each consumer reporting agency that furnished a consumer report used in the credit decision;
(vi) A statement that federal law gives the consumer the right to obtain a copy of a consumer report from the consumer reporting agency or agencies identified in the notice without charge for 60 days after receipt of the notice;
(vii) A statement informing the consumer how to obtain a consumer report from the consumer reporting agency or agencies identified in the notice and providing contact information (including a toll-free telephone number, where applicable) specified by the consumer reporting agency or agencies;
(viii) A statement directing consumers to the websites of the Consumer Financial Protection Bureau and Federal Trade Commission to obtain more information about consumer reports; and
(ix) If a credit score of the consumer to whom a motor vehicle dealer grants, extends, or otherwise provides credit is used in setting the material terms of credit:
(A) A statement that a credit score is a number that takes into account information in a consumer report, that the consumer's credit score was used to set the terms of credit offered, and that a credit score can change over time to reflect changes in the consumer's credit history;
(B) The credit score used by the motor vehicle dealer in making the credit decision;
(C) The range of possible credit scores under the model used to generate the credit score;
(D) All of the key factors that adversely affected the credit score, which shall not exceed four key factors, except that if one of the key factors is the number of enquiries made with respect to the consumer report, the number of key factors shall not exceed five;
(E) The date on which the credit score was created; and
(F) The name of the consumer reporting agency or other person that provided the credit score.
(2)
(i) A statement that a consumer report (or credit report) includes information about the consumer's credit history and the type of information included in that credit history;
(ii) A statement that the credit card issuer has conducted a review of the account using information from a consumer report;
(iii) A statement that as a result of the review, the annual percentage rate on the account has been increased based on information from a consumer report;
(iv) A statement that the consumer is encouraged to verify the accuracy of the information contained in the consumer report and has the right to dispute any inaccurate information in the report;
(v) The identity of each consumer reporting agency that furnished a consumer report used in the account review;
(vi) A statement that federal law gives the consumer the right to obtain a copy of a consumer report from the consumer reporting agency or agencies identified in the notice without charge for 60 days after receipt of the notice;
(vii) A statement informing the consumer how to obtain a consumer report from the consumer reporting agency or agencies identified in the notice and providing contact information (including a toll-free telephone number, where applicable) specified by the consumer reporting agency or agencies;
(viii) A statement directing consumers to the websites of the Consumer Financial Protection Bureau and Federal Trade Commission to obtain more information about consumer reports; and
(ix) If a credit score of the consumer whose extension of credit is under review is used in increasing the annual percentage rate:
(A) A statement that a credit score is a number that takes into account information in a consumer report, that the consumer's credit score was used to set the terms of credit offered, and that a credit score can change over time to reflect changes in the consumer's credit history;
(B) The credit score used by the credit card issuer in making the credit decision;
(C) The range of possible credit scores under the model used to generate the credit score;
(D) All of the key factors that adversely affected the credit score, which shall not exceed four key factors, except that if one of the key factors is the number of enquiries made with respect to the consumer report, the number of key factors shall not exceed five;
(E) The date on which the credit score was created; and
(F) The name of the consumer reporting agency or other person that provided the credit score.
(b)
(i) Clear and conspicuous; and
(ii) Provided to the consumer in oral, written, or electronic form.
(2)
(c)
(i) In the case of a grant, extension, or other provision of closed-end credit, before consummation of the transaction, but not earlier than the time the decision to approve an application for, or a grant, extension, or other provision of, credit, is communicated to the consumer by the motor vehicle dealer required to provide the notice;
(ii) In the case of credit granted, extended, or provided under an open-end credit plan, before the first transaction is made under the plan, but not earlier than the time the decision to approve an application for, or a grant, extension, or other provision of, credit is communicated to the consumer by the motor vehicle dealer required to provide the notice; or
(iii) In the case of a review of credit that has been extended to the consumer, at the time the decision to increase the annual percentage rate (annual percentage rate referenced in § 640.2(n)(1)(ii) in the case of a credit card) based on a consumer report is communicated to the consumer by the motor vehicle dealer required to provide the notice, or if no notice of the increase in the annual percentage rate is provided to the consumer prior to the effective date of the change in the annual percentage rate (to the extent permitted by law), no later than five days after the effective date of the change in the annual percentage rate.
(2)
(i) Provides a notice described in §§ 640.3(a), 640.5(e), or 640.5(f) to the consumer within the time periods set forth in paragraph (c)(1)(i) of this section, § 640.5(e)(3), or § 640.5(f)(4), as applicable; or
(ii) Arranges to have the motor vehicle dealer or other party provide a notice described in §§ 640.3(a), 640.5(e), or 640.5(f) to the consumer on its behalf within the time periods set forth in paragraph (c)(1)(i) of this section, § 640.5(e)(3), or § 640.5(f)(4), as applicable, and maintains reasonable policies and procedures to verify that the motor vehicle dealer or other party provides such notice to the consumer within the applicable time periods. If the person arranges to have the motor vehicle dealer or other party provide a notice described in § 640.5(e), the person's obligation is satisfied if the consumer receives a notice containing a credit score obtained by the dealer or other party, even if a different credit score is obtained and used by the person on whose behalf the notice is provided.
(3)
(i) The time of the first mailing by the motor vehicle dealer to the consumer after the decision is made to approve the grant, extension, or other provision of open-end credit, such as in a mailing containing the account agreement or a credit card; or
(ii) Within 30 days after the decision to approve the grant, extension, or other provision of credit.
(d)
(2)
(ii) A motor vehicle dealer that uses consumer reports to set the material terms of automobile loans granted, extended, or provided to consumers regularly requests credit scores from several consumer reporting agencies, each of which it uses in an underwriting program in order to determine the material terms it will offer to the consumer. That motor vehicle dealer may choose one of these scores to include in the notices described in paragraph (a)(1) and (2) of this section.
(a)
(2)
(b)
(c)
(i) Obtains a consumer report that is a prescreened list as described in section 604(c)(2) of the FCRA; and
(ii) Uses the consumer report for the purpose of making a firm offer of credit to the consumer.
(2)
(3)
(d)
(i) The consumer requests from the motor vehicle dealer an extension of credit that is or will be secured by one to four units of residential real property; and
(ii) The motor vehicle dealer provides to each consumer described in paragraph (d)(1)(i) of this section a notice that contains the following—
(A) A statement that a consumer report (or credit report) is a record of the consumer's credit history and includes information about whether the consumer pays his or her obligations on time and how much the consumer owes to creditors;
(B) A statement that a credit score is a number that takes into account information in a consumer report and that a credit score can change over time to reflect changes in the consumer's credit history;
(C) A statement that the consumer's credit score can affect whether the consumer can obtain credit and what the cost of that credit will be;
(D) The information required to be disclosed to the consumer pursuant to section 609(g) of the FCRA;
(E) The distribution of credit scores among consumers who are scored under the same scoring model that is used to generate the consumer's credit score using the same scale as that of the credit score that is provided to the consumer, presented in the form of a bar graph containing a minimum of six bars that illustrates the percentage of consumers with credit scores within the range of scores reflected in each bar or by other clear and readily understandable graphical means, or a clear and readily understandable statement informing the consumer how his or her credit score compares to the scores of other consumers. Use of a graph or statement obtained from the person providing the credit score that meets the requirements of this paragraph (d)(1)(ii)(E) is deemed to comply with this requirement;
(F) A statement that the consumer is encouraged to verify the accuracy of the
(G) A statement that federal law gives the consumer the right to obtain copies of his or her consumer reports directly from the consumer reporting agencies, including a free report from each of the nationwide consumer reporting agencies once during any 12-month period;
(H) Contact information for the centralized source from which consumers may obtain their free annual consumer reports; and
(I) A statement directing consumers to the websites of the Board and Federal Trade Commission to obtain more information about consumer reports.
(2)
(i) Clear and conspicuous;
(ii) Provided on or with the notice required by section 609(g) of the FCRA;
(iii) Segregated from other information provided to the consumer, except for the notice required by section 609(g) of the FCRA; and
(iv) Provided to the consumer in writing and in a form that the consumer may keep.
(3)
(4)
(ii)
(B) A motor vehicle dealer that uses consumer reports to set the material terms of mortgage credit granted, extended, or provided to consumers regularly requests credit scores from several consumer reporting agencies, each of which it uses in an underwriting program in order to determine the material terms it will offer to the consumer. That motor vehicle dealer may choose one of these scores to include in the notice described in paragraph (d)(1)(ii) of this section.
(5)
(e)
(i) The consumer requests from the motor vehicle dealer an extension of credit other than credit that is or will be secured by one to four units of residential real property; and
(ii) The motor vehicle dealer provides to each consumer described in paragraph (e)(1)(i) of this section a notice that contains the following—
(A) A statement that a consumer report (or credit report) is a record of the consumer's credit history and includes information about whether the consumer pays his or her obligations on time and how much the consumer owes to creditors;
(B) A statement that a credit score is a number that takes into account information in a consumer report and that a credit score can change over time to reflect changes in the consumer's credit history;
(C) A statement that the consumer's credit score can affect whether the consumer can obtain credit and what the cost of that credit will be;
(D) The current credit score of the consumer or the most recent credit score of the consumer that was previously calculated by the consumer reporting agency for a purpose related to the extension of credit;
(E) The range of possible credit scores under the model used to generate the credit score;
(F) The distribution of credit scores among consumers who are scored under the same scoring model that is used to generate the consumer's credit score using the same scale as that of the credit score that is provided to the consumer, presented in the form of a bar graph containing a minimum of six bars that illustrates the percentage of consumers with credit scores within the range of scores reflected in each bar, or by other clear and readily understandable graphical means, or a clear and readily understandable statement informing the consumer how his or her credit score compares to the scores of other consumers. Use of a graph or statement obtained from the person providing the credit score that meets the requirements of this paragraph (e)(1)(ii)(F) is deemed to comply with this requirement;
(G) The date on which the credit score was created;
(H) The name of the consumer reporting agency or other person that provided the credit score;
(I) A statement that the consumer is encouraged to verify the accuracy of the information contained in the consumer report and has the right to dispute any inaccurate information in the report;
(J) A statement that federal law gives the consumer the right to obtain copies of his or her consumer reports directly from the consumer reporting agencies, including a free report from each of the nationwide consumer reporting agencies once during any 12-month period;
(K) Contact information for the centralized source from which consumers may obtain their free annual consumer reports; and
(L) A statement directing consumers to the websites of the Federal Reserve Board and Federal Trade Commission to obtain more information about consumer reports.
(2)
(i) Clear and conspicuous;
(ii) Segregated from other information provided to the consumer; and
(iii) Provided to the consumer in writing and in a form that the consumer may keep.
(3)
(4)
(ii)
(5)
(f)
(i) Regularly obtains credit scores from a consumer reporting agency and provides credit score disclosures to consumers in accordance with paragraphs (d) or (e) of this section, but a credit score is not available from the consumer reporting agency from which the motor vehicle dealer regularly obtains credit scores for a consumer to whom the motor vehicle dealer grants, extends, or provides credit;
(ii) Does not obtain a credit score from another consumer reporting agency in connection with granting, extending, or providing credit to the consumer; and
(iii) Provides to the consumer a notice that contains the following—
(A) A statement that a consumer report (or credit report) includes information about the consumer's credit history and the type of information included in that history;
(B) A statement that a credit score is a number that takes into account information in a consumer report and that a credit score can change over time in response to changes in the consumer's credit history;
(C) A statement that credit scores are important because consumers with higher credit scores generally obtain more favorable credit terms;
(D) A statement that not having a credit score can affect whether the consumer can obtain credit and what the cost of that credit will be;
(E) A statement that a credit score about the consumer was not available from a consumer reporting agency, which must be identified by name, generally due to insufficient information regarding the consumer's credit history;
(F) A statement that the consumer is encouraged to verify the accuracy of the information contained in the consumer report and has the right to dispute any inaccurate information in the consumer report;
(G) A statement that federal law gives the consumer the right to obtain copies of his or her consumer reports directly from the consumer reporting agencies, including a free consumer report from each of the nationwide consumer reporting agencies once during any 12-month period;
(H) The contact information for the centralized source from which consumers may obtain their free annual consumer reports; and
(I) A statement directing consumers to the websites of the Board and Federal Trade Commission to obtain more information about consumer reports.
(2)
(3)
(i) Clear and conspicuous;
(ii) Segregated from other information provided to the consumer; and
(iii) Provided to the consumer in writing and in a form that the consumer may keep.
(4)
(5)
For purposes of this part, the following rules of construction apply:
(a)
(b)
(2)
(3)
(ii) A consumer obtains credit to finance the purchase of an automobile. If a bank or finance company is the person to whom the loan obligation is initially payable, the bank or finance company must provide the risk-based pricing notice to the consumer (or satisfy the requirements for and provide the notice required under one of the exceptions noted in paragraph (b) of this section) based on the terms offered by that bank or finance company only. The motor vehicle dealer has no duty to provide a risk-based pricing notice to the consumer. However, the bank or finance company may comply with this rule if the motor vehicle dealer has agreed to provide notices to consumers before consummation pursuant to an arrangement with the bank or finance company, as permitted under § 640.4(c).
(c)
(2)
(3)
(ii) Two consumers jointly apply for credit with a creditor. The two consumers reside at the same address. The creditor obtains credit scores on each of the two consumer applicants. The creditor grants credit to the consumers. The creditor provides credit score disclosure notices to satisfy its obligations under this part. Even though the two consumers reside at the same address, the creditor must provide a separate credit score disclosure notice to each of the consumers. Each notice must contain only the credit score of the consumer to whom the notice is provided.
By direction of the Commission, Commissioner Slaughter and Commissioner Wilson not participating.
Postal Regulatory Commission.
Notice of proposed rulemaking.
The Commission is acknowledging a recent filing requesting the Commission initiate a rulemaking proceeding to consider changes to analytical principles relating to periodic reports (Proposal Six). This document informs the public of the filing, invites public comment, and takes other administrative steps.
Submit comments electronically via the Commission's Filing Online system at
David A. Trissell, General Counsel, at 202-789-6820.
On September 15, 2020, the Postal Service filed a petition pursuant to 39 CFR 3050.11, requesting that the Commission initiate a rulemaking proceeding to consider changes to analytical principles relating to periodic reports.
The main factor determining labor requirements for sorting operations is the number of pieces inducted into the operation for processing, total pieces fed (TPF) in the Management Operating Data System (MODS).
Currently, In-Office Cost System tallies are used to partition the mail processing cost pools into activities assumed to be 100-percent volume-variable, and other activities assumed to be non-volume-variable.
This methodology has been in use since Docket No. R71-1, and its origins predate the Postal Reorganization Act and the development of the automated mail processing technologies in this proposal. Petition, Proposal Six at 2. The Postal Service states that the Commission previously declined to adopt any empirical models for mail processing variability, citing data and econometric issues.
The Commission establishes Docket No. RM2020-13 for consideration of matters raised by the Petition. More information on the Petition may be accessed via the Commission's website at
1. The Commission establishes Docket No. RM2020-13 for consideration of the matters raised by the Petition of the United States Postal Service for the Initiation of a Proceeding to Consider Proposed Changes in Analytical Principles (Proposal Six), filed September 15, 2020.
2. Comments by interested persons in this proceeding are due no later than November 24, 2020.
3. Pursuant to 39 U.S.C. 505, the Commission appoints Lawrence Fenster to serve as an officer of the Commission (Public Representative) to represent the interests of the general public in this docket.
4. The Secretary shall arrange for publication of this order in the
By the Commission.
Fish and Wildlife Service, Interior.
Proposed rule.
We, the U.S. Fish and Wildlife Service (Service), propose to reclassify the red-cockaded woodpecker (
We will accept comments received or postmarked on or before December 7, 2020. Comments submitted electronically using the Federal eRulemaking Portal (see
You may submit comments by one of the following methods:
(1)
(2)
We request that you send comments only by the methods described above. We will post all comments on
Aaron Valenta, Chief, Division of Restoration and Recovery, U.S. Fish and Wildlife Service, Southeast Regional Office, 1875 Century Boulevard, Atlanta, GA 30345; telephone 404-679-4144. Persons who use a telecommunications device for the deaf (TDD) may call the Federal Relay Service at 800-877-8339.
• Lack of suitable roosting, nesting, and foraging habitat due to legacy effects from historical logging, incompatible forest management, and conversion of forests to urban and agricultural uses (Factor A).
• Fragmentation of habitat, with resulting effects on genetic variation, dispersal, and connectivity to support demographic populations (Factor A).
• Stochastic events such as hurricanes, ice storms, and wildfires, exacerbated by the environmental effects of climate change (Factor E).
• Small populations (Factor E).
We intend that any final action resulting from this proposed rule will be based on the best scientific and
We particularly seek comments on:
(1) Information concerning the biology and ecology of the red-cockaded woodpecker.
(2) Relevant data concerning any stressors (or lack thereof) to the red-cockaded woodpecker, particularly the effects of habitat loss, small populations, habitat fragmentation, and hurricanes and other severe natural events.
(3) Current or planned activities within the geographic range of the red-cockaded woodpecker that may negatively impact or benefit the species.
(4) Reasons why we should or should not reclassify the red-cockaded woodpecker from an endangered species to a threatened species under the Act (16 U.S.C. 1531
(5) Information about current or proposed land management plans and conservation plans for the red-cockaded woodpecker, and whether they may negatively impact or benefit the species, including the likelihood of such plans and their associated management activities persisting into the future.
(6) Information on regulations that are necessary and advisable for the conservation and management of the red-cockaded woodpecker and that the Service can consider in developing a 4(d) rule for the species, including whether the measures outlined in the proposed 4(d) rule are necessary and advisable for the conservation of the red-cockaded woodpecker. We particularly seek comments concerning:
(a) The extent to which we should include any of the section 9 prohibitions in the 4(d) rule, including whether there are additional activities or management actions that should be prohibited or excepted from the prohibitions for incidental take of the red-cockaded woodpecker;
(b) Whether it is appropriate to prohibit use of insecticides and herbicides on standing pine trees within 0.50 mile from the center of an active cavity tree cluster, including whether the spatial area covered by this prohibition is appropriate;
(c) Whether it is appropriate to prohibit operations conducted near active cavity trees that render cavity trees unusable to red-cockaded woodpeckers, and what types of operations and actions should be included in this prohibition;
(d) Whether any other forms of take should be excepted from the prohibitions in the 4(d) rule, including activities that should be excepted from the prohibitions for incidental take of the red-cockaded woodpecker once a property is being managed in accordance with a Service- or State-approved management plan, and what factors should be included in a Service- or State-approved management plan;
(e) What additional conditions, if any, should be placed upon State-approved management plans such that they provide adequate protection to red-cockaded woodpeckers, for example, the type and extent of monitoring and reporting to the Service;
(f) Whether an exception should be made for habitat regeneration activities without a Service- or State-approved management plan, and what limiting conditions should be placed on such activities;
(g) Whether it is appropriate to except from the prohibitions red-cockaded woodpecker management and military training activities on Department of Defense installations with a Service-approved integrated natural resources management plan;
(h) Whether the installation of artificial cavities should be excepted from the prohibitions for incidental take of red-cockaded woodpecker for individuals who have completed training and have achieved a certain level of proficiency, and what that training and proficiency should be; and,
(i) Whether there are additional provisions the Service may wish to consider for the 4(d) rule in order to conserve, recover, and manage the red-cockaded woodpecker. Please include sufficient information (such as scientific journal articles, or other credible publications) to allow the Service to verify any scientific or commercial information you include.
(7) Whether the red-cockaded woodpecker warrants delisting.
Please note that submissions merely stating support for or opposition to the listing action under consideration without providing supporting information, although noted, will not be considered in making a determination, as section 4(b)(1)(A) of the Act directs that determinations as to whether any species is an endangered or a threatened species must be made “solely on the basis of the best scientific and commercial data available.”
You may submit your comments and materials concerning this proposed rule by one of the methods listed in
If you submit information via
Comments and materials we receive, as well as supporting documentation we used in preparing this proposed rule, will be available for public inspection on
Section 4(b)(5)(E) of the Act provides for a public hearing on this proposal, if requested. Requests must be received by the date specified in
The red-cockaded woodpecker was listed as endangered on October 13, 1970 (35 FR 16047) under the Endangered Species Conservation Act of 1969, and received Federal protection with the passage of the Endangered Species Act in 1973. The most recent revision to the red-cockaded woodpecker recovery plan was released on January 27, 2003 (USFWS 2003, entire; see 68 FR 13710, March 20, 2003). The latest 5-year review was completed on October 5, 2006 (USFWS 2006 entire); that 5-year review did not recommend changing the classification of the red-cockaded woodpecker. However, since the 5-year review, we have acquired new information and conducted a thorough analysis, documented in an SSA report (USFWS 2020, entire). We also initiated another 5-year review for the species on August 6, 2018 (83 FR 38320); because we have determined the species now meets the definition of a threatened species under the Act, this proposed rule will equate to our 5-year review.
A thorough review of the taxonomy, life history, ecology, and overall viability of the red-cockaded woodpecker is presented in the SSA report (USFWS 2020, entire; available at
The red-cockaded woodpecker is a territorial, non-migratory bird species that makes its home in mature pine forests in the southeastern United States. Once a common bird distributed contiguously across the southeastern United States, the red-cockaded woodpecker's rangewide estimates made around the time of listing in 1970 indicated a decline to fewer than 10,000 individuals (approximately 1,500 to 3,500 active clusters; an aggregate of cavity trees used by a group of woodpeckers for nesting and roosting) in widely scattered, isolated, and declining populations (Jackson 1971, pp. 12-20; Jackson 1978, entire; USFWS 1985, p. 22; Ligon
Due to changes in how red-cockaded woodpecker populations have been defined and surveyed over the years and with more comprehensive surveys over time, it is difficult to make accurate comparisons today with the species' status when it was listed. The species continued to decline even after listing until the early-1990s. However, by 1995, the red-cockaded woodpecker population had increased to about 4,694 active clusters or active territories rangewide (Costa and Walker 1995, p. 86). Today, the Service's conservative estimate is about 7,800 active clusters rangewide (USFWS 2020, pp. 14, 106-108), between 2 and 5 times the number of clusters at the time of listing.
Red-cockaded woodpeckers were once common throughout open, fire-maintained pine ecosystems, particularly longleaf pine that covered approximately 92 million acres before European settlement (Frost 1993, p. 20). The birds inhabited the open pine forests of the Southeast from New Jersey, Maryland, and Virginia to Florida, and west to Texas and north to portions of Oklahoma, Missouri, Tennessee, and Kentucky (Jackson 1971, entire). Original pine forests were old and open, and contained a structure dominated by two layers, a canopy and diverse herbaceous ground cover, maintained by frequent low-intensity fire (Brockway et al. 2006, pp. 96-98). Both the longleaf pine and other open pine ecosystems were eliminated from much of their original range because of early (1700s) European settlement, widespread commercial timber harvesting, and the naval stores/turpentine industry (1800s). Early to mid-1900 commercial tree farming, urbanization, and agriculture contributed to further declines. Much of the remaining habitat is very different from the vast, historical pine forests in which the red-cockaded woodpecker evolved. The second growth longleaf pine forests of today, rather than being dominated by centuries-old trees as the original forests were, are just reaching that age (90-100 years) required to meet all the needs of the red-cockaded woodpecker. Furthermore, in many cases, the absence of fire has caused the original open savannahs to degrade into dense pine/hardwood forest. Much of today's forest is young and dense, and dominated by loblolly pine, with a substantial hardwood component and little or no herbaceous groundcover (Noel
Nesting and roosting habitat of red-cockaded woodpeckers varies across the species' range. The largest populations tend to occur in the longleaf pine woodlands and savannahs of the East Gulf Coastal Plain, South Atlantic Coastal Plain, Mid-Atlantic Coastal Plain, and Carolina Sandhills (Carter 1971, p. 98; Hooper
The red-cockaded woodpecker is a relatively small woodpecker. Adults measure 20 to 23 centimeters (8 to 9 inches) and weigh roughly 40 to 55 grams (1.5 to 1.75 ounces) (Jackson 1994, p. 3; Conner
Red-cockaded woodpeckers were first described as
Red-cockaded woodpeckers live in groups that share, and jointly defend,
Young birds either disperse in their first year or remain on the natal territory and become a helper. First-year dispersal is the dominant strategy for females, but both strategies are common among males (Walters
Red-cockaded woodpeckers are unique among North American woodpeckers in that they nest and roost in cavities they excavate in living pines (Steirly 1957, p. 282; Jackson 1977, entire). Cavities are an essential resource for red-cockaded woodpeckers throughout the year, because the birds use them for roosting year-round, as well as nesting seasonally. Each individual in a group has its own roost cavity, and the group usually nests in the breeding male's cavity. The aggregation of active and inactive cavity trees within the area defended by a single group is termed the cavity tree cluster (Conner
The development of techniques to construct artificial cavities (Copeyon 1990, entire; Allen 1991, entire) offset the lack of natural cavities and provided managers a new tool to greatly increase cavity availability, especially after storms. Red-cockaded woodpeckers readily adopt these artificial cavities. Thousands of artificial cavities have been installed since the early 1990s, and most populations are currently dependent on the installation and maintenance of artificial cavities for their viability.
Red-cockaded woodpeckers require open pine woodlands and savannahs with large, old pines for nesting and roosting. Old pines are required as cavity trees because cavity chambers must be completely within the heartwood to prevent pine resin in the sapwood from entering the chamber (Conner
Fire suppression also affects foraging. Over 75 percent of the red-cockaded woodpecker's diet consists of arthropods. Individuals generally capture arthropods on and under the outer bark of live pines and in dead branches of live pines. A large proportion of the arthropods on pine trees crawl up into the trees from the ground, which implies the condition of the ground cover is an important factor influencing abundance of prey for red-cockaded woodpecker (Hanula and Franzreb 1998, entire). The density of pines has a negative relationship with arthropod abundance and biomass, likely due at least in part to the negative effect of pine density on ground cover, from which some of the prey comes (Hanula
Home ranges of red-cockaded woodpeckers vary from 40.5 to 161.9 hectares (ha) (100 to 400 acres (ac)) per group, depending on the quality of foraging habitat. Red-cockaded woodpecker groups in high-quality habitat, particularly old growth or restored, fire-maintained habitat, exhibit much smaller home range and territory sizes than groups in fire-suppressed habitat (Nesbitt
Currently, red-cockaded woodpeckers are distributed largely as discrete populations, with large gaps of unoccupied land between. An improvement from the species' status at the time of listing, these gains are due to intensive management implemented beginning in the 1990s. Except in rare instances, these populations remain dependent on conservation actions, such as prescribed fire, forest management with compatible silviculture, placement and maintenance of artificial cavities within existing clusters, creation of new recruitment clusters using artificial cavities and translocation, and monitoring of population and habitat conditions.
Section 4(a)(1) of the Act directs us to determine whether any species is an endangered species or a threatened species because of any of the following factors: (A) The present or threatened destruction, modification, or curtailment of its habitat or range; (B) overutilization for commercial, recreational, scientific, or educational purposes; (C) disease or predation; (D) the inadequacy of existing regulatory mechanisms; or (E) other natural or manmade factors affecting its continued existence. The factors for downlisting a species (changing its status from endangered to threatened) are the same as for listing it.
In the SSA report, we review the factors (
The primary risk factor (
The primary remaining threats to the red-cockaded woodpecker's viability have the same fundamental cause: Lack of suitable habitat. Historically, the significant impacts to red-cockaded woodpecker habitat occurred as a result of clearcutting, incompatible forest management, and conversion to urban and agricultural lands uses. These impacts have been significantly curtailed and replaced by beneficial conservation management that sustains and increases populations; however, stressors caused by adverse historical practices still linger, including insufficient numbers of cavities, low numbers of suitable old pines, habitat fragmentation, degraded foraging habitat, and small populations. These lingering impacts can negatively affect the ability of populations to grow, even when populations are actively managed for growth, as the carrying capacity of suitable forest areas across much of the range can be quite low. However, restoration activities such as prescribed fire and strategic placement of recruitment clusters can reduce gaps between populations and increase habitat and population size toward current carrying capacity. These activities are occurring across the range of the red-cockaded woodpecker on properties actively managed for red-cockaded woodpecker conservation.
Currently, stressors to the species resulting from exposure to habitat modification or destruction are minimal, especially when compared to historical levels. Periodically, military training on Department of Defense installations requires clearing of red-cockaded woodpecker habitat for construction of ranges, expansion of cantonments, and related infrastructure, but these installations have management plans to sustain and increase red-cockaded woodpecker populations. In addition, silvicultural management on Federal, State, and private lands also occasionally results in temporary impacts to habitat; for example, red-cockaded woodpecker habitat may be unavoidably, but temporarily, adversely affected in old, even-aged loblolly pine stands that require regeneration prior to stand senescence to sustain a matrix of future suitable habitat for a net long-term benefit. Similarly, red-cockaded woodpecker habitat may be temporarily destroyed in areas where offsite loblolly, slash, or other pines are removed and replaced by the more fire-tolerant native longleaf pine. However, the net result of these activities is a long-term benefit, as the goal is to restore these areas to habitat preferred by woodpeckers.
Wildfire, pine beetles, ice storms, tornadoes, and hurricanes are naturally occurring disturbances that destroy pines used for cavities, with subsequent reductions to population size unless management actions are taken to reduce or ameliorate adverse impacts by providing artificial cavities, reducing hazardous fuels, and restoring forests to suitable habitat following these events. These disturbances can also destroy or degrade foraging habitat and cause direct mortality of woodpeckers. Small populations are the most vulnerable to these disturbances. See the SSA report for more information about these natural disturbances (USFWS 2020, pp. 119-127).
Habitat destruction caused by hurricanes is the most acute and potentially catastrophic disturbance because hurricanes can impact entire populations. According to the SSA report, of the 124 current demographic populations, about 63 populations in the East Gulf Coastal Plain, West Gulf Coastal Plain, the lower portion of the Upper West Gulf Coastal Plain, and
The reliance on artificial cavities and active habitat management is not just restricted to post-hurricane recovery efforts. With the potential exception of several ecologically unique populations in pond pine and related habitat on organic soils in northeast North Carolina, none of the current or estimated future populations is capable of naturally persisting without ongoing management, for reasons discussed previously. Fortunately, most sites have active management, such as prescribed fire, artificial cavity installation, and habitat restoration to maintain these populations across the range of the species.
Other proactive management that must be maintained for the species to continue to persist and expand includes translocations into small populations. Most (108) of the current 124 demographic populations are small (fewer than 99 active clusters) with inherently very low or low resiliency. These are the most vulnerable to future extirpation due to stochastic demographic and environmental factors and inbreeding depression. Inbreeding depression in small, fragmented populations of up to 50 to 100 active clusters without adequate immigration can further increase the probability of decline and future extirpation; for these populations, red-cockaded woodpecker translocation programs reduce risks of adverse inbreeding impacts. In addition, as noted in the SSA report (see
As noted above, the red-cockaded woodpecker is a conservation-reliant species and responds well to active management. The vast majority of properties on public lands harboring red-cockaded woodpeckers have implemented management programs to sustain or increase populations consistent with population size objectives in the recovery plan or other plans. Plans are specific to each property or management unit, but generally contain the same core features. The most comprehensive plans call for intensive cavity management with the installation of artificial cavities to offset cavity loss in existing territories, maintenance of sufficient suitable cavities to avoid loss of active territories, and creation of new territories with recruitment clusters and artificial cavities in restored or suitable habitat to increase population size. These cavity management activities are necessary until mature forests are restored with abundant old pines 65 and more years of age for natural cavity excavation. Managers are also reducing fragmentation by restoring and increasing habitat with strategic placement of recruitment clusters to reduce gaps within and between populations. Furthermore, red-cockaded woodpecker subadults from large or stable donor populations are translocated to augment growth of small, vulnerable populations. Additionally, managers are implementing silviculturally compatible methods to sustain, restore, and increase habitat with an increased use of effectively prescribed fire. Finally, managers are implementing monitoring programs looking at both habitat and populations to provide feedback for effective management. The future persistence of the species will require these management actions to continue.
In the SSA, we identified 124 current demographic populations with a total of 7,794 active clusters. Seventy-one of the 124 currently delineated red-cockaded woodpecker populations occur on lands solely owned and managed by Federal agencies with 4,033 current active clusters. Seven additional populations with 2,026 active clusters occur on lands that are under mixed Federal and State ownership but are predominately managed by Federal agencies. Thirty-one populations are on lands managed
Below is a summary of the types of management plans that include elements directed at red-cockaded woodpecker management and conservation. Note that the numbers of populations below do not necessarily add up to the 124 current demographic populations identified in the SSA report, because some populations cross property boundaries and are managed by more than one landowner.
Within the range of the red-cockaded woodpecker, the Department of Defense (DOD) manages habitat for 14 populations, of which 5 are in the moderate to very high resiliency categories, and 9 low to very low resiliency. The Sikes Act (16 U.S.C. 670
The U.S. Forest Service manages habitat for 49 red-cockaded woodpecker populations on 17 National Forests and the Savannah River Site Unit (owned by the Department of Energy but managed by the U.S. Forest Service). Of these populations, 10 have moderate to very high resiliency and 39 identified as having low or very low resiliency. Under the National Forest Management Act of 1976 (16 U.S.C. 1600
The National Wildlife Refuge System manages 10 National Wildlife Refuges with red-cockaded woodpeckers, which includes all or part of 19 populations. We considered three of these populations to be moderate to very high resiliency in the SSA report, while 16 have low to very low resiliency. Under the National Wildlife Refuge System Improvement Act of 1997 (Pub. L. 105-57), refuges prepare comprehensive conservation plans (CCPs), which provide a blueprint for how to manage for the purposes of each refuge; address the biological integrity, diversity, and environmental health of a refuge; and facilitate compatible wildlife-dependent recreation. National Wildlife Refuges have assigned population objectives from the 2003 recovery plan through their CCPs or as stepped down or modified in habitat management plans. Specific tasks in these plans include installation of artificial cavities; translocation; establishing recruitment clusters; population monitoring; prescribed fire; and silvicultural treatments, such as mid-story removal, thinning of younger stands, and, where necessary, increasing stand age diversity with regeneration of pine stands.
The National Park Service (NPS) manages two red-cockaded woodpecker populations, one with low and the other with very low resilience, on Big Cypress National Preserve (Preserve) in Florida. The NPS's plans do not include specific provisions for red-cockaded woodpecker management; however, at the Preserve, the NPS conducts prescribed fire to maintain and improve the south Florida slash pine forest communities that support the species. The NPS also allows Florida Fish and Wildlife Conservation Commission
The States of Arkansas, Florida, Georgia, Louisiana, North Carolina, Oklahoma, South Carolina, Texas, and Virginia have red-cockaded woodpecker populations on State-owned lands. All or parts of 40 currently delineated populations occur on State lands. Seven populations on or partially on State lands have moderate to very high resiliency, while 32 populations have low to very low resiliency. These properties range from State Forest Service or Forest Commission holdings to Department of Wildlife, Department of Natural Resources, and State Park Service properties. The mission, and therefore the extent and type of management, of each unit varies. For example, some State lands are managed generally to provide ecosystem benefits, such as managing pine-dominated forests with prescribed fire. However, other State properties implement proactive conservation management specifically for the red-cockaded woodpecker. For example, the Florida Fish and Wildlife Conservation Commission manages all of its properties under the umbrella of the Florida Red-cockaded Woodpecker Management Plan, with other specific plans for the agency's wildlife management areas.
Eight states have a Service-approved programmatic safe harbor agreement program with a section 10(a)(1)(A) enhancement of survival permit under the Act to enroll non-Federal landowners that voluntarily provide beneficial management. Of 459 enrolled non-federal landowners, one is for a State property and all others are private nongovernmental lands. All or parts of 12 currently delineated demographic populations are covered under a current SHA. Again, we are aware of additional active clusters covered under SHAs, but we lack the data to delineate them as demographic populations. Safe harbor agreements are partnerships between landowners and the Service involving voluntary agreements under which the property owners receive formal regulatory assurances from the Service regarding their management responsibilities in return for contributions to benefit the listed species. For the red-cockaded woodpecker, this includes voluntary commitments by landowners to maintain and enhance red-cockaded woodpecker habitat to support baseline active clusters, which is the number of clusters at the time of enrollment, and additional above-baseline active clusters that increase in response to beneficial management. Beneficial management includes the maintenance and enhancement of existing cavity trees and foraging habitat through activities such as prescribed fire, mid-story thinning, seasonal limitations for timber harvesting, and management of pine stands to provide suitable foraging habitat and cavity trees. Because above-baseline active clusters and habitat covered under these plans can be returned to “baseline” conditions, any population growth on lands covered by SHAs may not be permanent. In addition, enrolled landowners can terminate their agreement at any time. However, fewer than 5 of the 459 enrolled landowners have ever used their permit authorities to return the number of active clusters to baseline conditions, and only 12 landowners have terminated their agreement. There currently are 241 active above-baseline clusters in the program.
In summary, the red-cockaded woodpecker is a conservation-reliant species, but one that responds very well to active management. The majority of red-cockaded woodpecker populations are managed under plans that address population enhancement and habitat management to sustain or increase populations, and to meet the 2003 recovery plan objectives for primary core, secondary core, and essential support populations. We expect these property owners will continue to implement their respective management plans, partially because, even if we reclassify the red-cockaded woodpecker as a threatened species, the woodpecker would remain protected under the Act.
As described in the preceding section, the Act directs us to determine whether any species is an endangered or a threatened species because of any of the factors listed in section 4(a)(1) affecting the species' continued existence. The SSA report documents the results of our comprehensive biological status review for the red-cockaded woodpecker, including an assessment of the potential stressors to the species. The SSA report does not represent a decision by the Service on whether the species should be listed as an endangered or a threatened species under the Act. It does, however, provide the scientific basis for our regulatory decision, which involves the further application of standards within the Act and its implementing regulations and policies. The following is a summary of the key results and conclusions from the SSA report; the full SSA report can be found on the Southeast Region's website at
To assess the red-cockaded woodpecker's viability, we used the three conservation biology principles of resiliency, representation, and redundancy (Shaffer and Stein 2000, pp. 306-310). Briefly, resiliency supports the ability of the species to withstand environmental and demographic stochasticity (for example, random fluctuations in birth rates or annual variation in rainfall); representation supports the ability of the species to adapt over time to long-term changes in the environment (for example, climate changes); and redundancy supports the ability of the species to withstand catastrophic events (for example, hurricanes). In general, the more redundant and resilient a species is and the more representation it has, the more likely it is to sustain populations over time, even under changing environmental conditions. Using these principles, we identified the red-cockaded woodpecker's ecological requirements for survival and reproduction at the individual, population and species, and described the beneficial and risk factors influencing the species' viability.
The SSA process can be categorized into three sequential stages. During the first stage, we evaluated the individual species' life-history needs. The next stage involved an assessment of the historical and current condition of species' demographics and habitat characteristics, including an explanation of how the species arrived at its current condition. The final stage of the SSA involved making predictions about the species' responses to positive and negative environmental and anthropogenic influences. This process used the best available information to characterize viability as the ability of a species to sustain populations in the wild over time. We utilized this
For the red-cockaded woodpecker to maintain viability, its populations or some portion thereof must be resilient. The SSA assessed resiliency at the population level, primarily by evaluating the current population size as the number of active clusters and secondarily by the associated past growth rate. Red-cockaded woodpecker resiliency primarily depends upon a single factor: Amount of managed suitable habitat. Historically, impacts to the red-cockaded woodpecker occurred as a result of clearcutting, incompatible forest management, and conversion to urban and agricultural lands uses. While these impacts have been significantly curtailed and replaced by beneficial conservation management, legacy stressors stemming from these historical impacts still remain, including: (1) Insufficient numbers of natural cavities and suitable, abundant old pines for natural cavity excavation; (2) habitat fragmentation and its effects on genetic variation, dispersal, and connectivity to support demographic populations; (3) lack of suitable foraging habitat for population growth and expansion; and (4) small populations. Intensive management is ongoing to ameliorate these threats.
Representation can be measured by the breadth of genetic or environmental diversity within and among populations and gauges the probability that a species is capable of adapting to environmental changes. The SSA evaluated representation based on the extent and variability of habitat characteristics across the geographical range of the species and characterized representative units for the red-cockaded woodpecker using ecoregions. This analysis generally followed the approach to representation used in the species' recovery plan (USFWS 2003, pp. 148, 152-155). A genetic analysis of material prior to 1970 in eight ecoregions indicates the species appears to have been a single genetic unit or population without significant genetic structure or differentiation (Miller
For the red-cockaded woodpecker to maintain viability, the species also needs to exhibit some degree of redundancy. Measured by the number of populations, their resiliency, and their distribution, redundancy increases the probability that the species has a margin of safety to withstand, or can bounce back from, catastrophic events. The SSA reported redundancy for red-cockaded woodpeckers as the total number and resilience of population segments and their distribution within and among representative units.
In the SSA report, we identified 124 demographic populations across the range of the red-cockaded woodpecker for which sufficient data were available to complete the SSA analyses for the recent past to current condition. We acknowledge there are other small occurrences of red-cockaded woodpeckers, particularly on private lands; however, spatial data for these other occurrences were incomplete, so for purposes of the SSA analysis, and subsequently throughout this proposed rule, we focused only on these 124 demographic populations that could be spatially delineated. The SSA categorizes two important parameters related to current population resiliency: Current population size and associated population growth rate. Population resilience size categories are defined as follows: Very low (fewer than 30 active clusters); low (30 to 99 active clusters); moderate (100 to 249 active clusters); high (250 to 499 active clusters); and very high (greater than or equal to 500 active clusters).
Population resilience size-classes were derived from spatially explicit individual-based models and simulations for this species (Letcher
Populations with very low resiliency (fewer than 30 active clusters) are the most vulnerable to future extirpation following stochastic events with declining growth and future extirpation likely in 50 years. Populations with low resiliency (30 to 99 active clusters) are more persistent, but remain vulnerable to declining growth, inbreeding depression, and extirpation. Inbreeding depression reduces red-cockaded woodpecker egg hatching rates and survival of fledglings (Daniels and Walters 2000a, entire). Inbreeding in red-cockaded woodpeckers is a consequence of breeding among close relatives in response to naturally short dispersal distances of related birds among nearby breeding territories exacerbated by small populations and fragmentation among populations that reduce immigration rates of unrelated individuals (Daniels and Walters 2000a, entire; 2000b, entire; Daniels
The second resiliency parameter measured in the SSA was growth rate of the populations. For the SSA, there were only sufficient GIS data to delineate past demographic populations with population size data to compute past-to-current growth rates for 98 of the 124 populations. Of these 98 populations, the SSA determined that 13 (13.3 percent) were declining (λ <1.00), 19 (19.4 percent) were stable (λ = 1.00-1.02), and 66 (67.3 percent) were increasing (λ >1.02). Combining growth rates with population sizes of these 98 populations, growth rates have been stable to increasing for all of those moderate, high, and very high resiliency populations where growth rate could be measured. At the other end, of the 86 very low and low resiliency populations where growth rate could be measured, 73 populations demonstrated stable and positive growth rates, with several populations showing very high growth rates. This is indicative of the positive effects of red-cockaded woodpecker conservation management programs on these locations and the ability of such management to offset inherently low or very low population resilience. Growth rates are decreasing in only 13 (15 percent) of the low and very low resiliency populations where growth rate could be measured.
Current population conditions in the SSA report were derived from the number and location of active clusters primarily in 2016 and 2017. These conditions did not take into account Hurricane Michael, which came ashore near Mexico Beach, Florida, on October 10, 2018, as a Category 4 storm. More than 1,500 cavity trees were blown down or damaged in populations in the Apalachicola National Forest, Silver Lake Wildlife Management Area (WMA), Jones Ecological Research Center, and Tate's Hell State Forest (Dunlap 2018, entire; McDearman 2018, entire). These represented three demographic populations: Apalachicola National Forest-St. Marks NWR-Tate's Hell State Forest, Jones Ecological Research Center, and Silver Lake WMA. The effects of Hurricane Michael did not change current conditions for these populations in terms of their resilience size-classes as described in the SSA report, and as summarized here.
After this hurricane, 870 clusters were rapidly assessed in Apalachicola National Forest where 1,410 cavity trees were damaged or blown down, followed by the installation of 682 artificial cavities (Dunlap 2018, entire). In 2018, prior to this hurricane, the Apalachicola National Forest population survey estimate was 833 active clusters (Casto 2018, p. 4). After the hurricane, the 2019 survey estimate was 857 active clusters (Casto 2019, p. 9). At Silver Lake WMA, 154 cavity trees were damaged or lost; however, within two weeks of the storm more than 90 artificial cavities were installed (Burnham 2019a, p. 9). The pre-storm population was 36 active clusters and 32 potential breeding groups, with a post-storm decline to 33 active clusters and 28 potential breeding groups (Burnham 2019b, p. 6). About 24 percent of all cavity trees at the Jones Ecological Research Center were damaged or destroyed (Rutledge 2019, p. 13). The pre-storm Jones Center population was 38 active clusters with 34 potential breeding groups (Henshaw 2019, p. 4). Post-storm, after installation of artificial cavities, there were 40 active clusters with 31 potential breeding groups (Henshaw 2019, p. 4). At Tate's Hell State Forest, about 23 of 527 cavity trees among 61 active clusters and 51 PBGs were blown down (Alix 2018, pers. comm.). After post-storm management, the Tate's Hell State Forest currently consists of 64 active clusters and 54 PBGs (Alix 2019, pers. comm.). Overall, the total decline in number of active clusters from all of these properties is minor, demonstrating that with prompt, active management, the vulnerability of these populations to stochastic events can potentially be reduced. Additional intermediate and long-term habitat restoration treatments at these properties are still required to reduce hazardous fuels from large and small woody debris, restore habitat, and implement reforestation or regeneration in the most severely damaged pine stands. Overall, we do not anticipate that Hurricane Michael will affect long-term viability of these populations. However, we will continue to evaluate the success of the emergency, intermediate, and long-term response efforts.
In summary, although most of red-cockaded woodpecker populations for which we have data are still small, and remain vulnerable to stochastic events and possibly inbreeding depression, the vast majority of populations are showing stable or increasing growth rates, and the majority of birds and clusters occur in a few large, resilient populations. Of the 98 populations for which trend data are available, only 13 percent are declining. In addition, over 65 percent of red-cockaded woodpecker clusters are currently in moderate to very high resiliency populations.
We evaluated representation based on the extent and variability of habitat characteristics across the species' geographical range. For the red-cockaded woodpecker, the SSA report characterizes representative units using ecoregions, which align with the recovery units identified in the recovery plan (USFWS 2003, pp. 145-161). These ecoregions are broad areas defined by physiography, topography, climate, and major historical and current forest types and thus serve as surrogates for the variability of habitat characteristics across the species' range, such as ecology, life history, geography, and genetics. There are currently 13 ecoregions containing at least one red-cockaded woodpecker population: (1) Cumberland Ridge and Valley; (2) Florida Peninsula (= South/Central Florida); (3) East Gulf Coastal Plain; (4) Mid-Atlantic Coastal Plain; (5) Ouachita
The historical range of the red-cockaded woodpecker included the entire distribution of longleaf pine ecosystems, but the species also inhabited open shortleaf, loblolly, slash pine, and Virginia pine forests, especially in the Ozark-Ouachita Highlands and the southern tip of the Appalachian Highlands with occasional occurrences noted for New Jersey, Pennsylvania, Maryland, and Ohio (Costa and Walker 1995, pp. 86-87). Red-cockaded woodpeckers no longer occur in six ecoregions (Ozarks, Central Mixed Grass Prairies, Cross Timbers and Southern Mixed Grass Prairies, Northern Atlantic Coast, Central Appalachian Forest, and Southern Blue Ridge). The recovery plan did not consider recovery in these areas to be essential to the conservation of the species.
The remaining 13 ecoregions still contain red-cockaded woodpeckers. In these ecoregions, red-cockaded woodpeckers occupy a wide variety of pine-dominated ecological settings scattered across a broad geographic range. Considerable geographic variation in habitat types exists, illustrating the species' ability to adapt to a wide range of ecological conditions within the constraints of mature or old growth, southern pine ecosystems. However, of these 13 ecoregions, only 4 currently have populations that are considered to have high or very high resiliency (East Gulf Coastal Plain, South Atlantic Coastal Plain, Sandhills, and Mid-Atlantic Coastal Plain), and 6 have populations that are low or very low resiliency (Florida Peninsula, Ouachita Mountains, Cumberland Ridge and Valley, Piedmont, Gulf Coast Prairie and Marshes, and Mississippi River Alluvial Plain). Of those six, the latter four have only one or two populations each, meaning these ecoregions, and the ecology, life history, geography, and genetics they represent, are particularly vulnerable to stochastic events. However, five of the six populations in these four ecoregions all demonstrate stable or increasing growth rates (growth rate for the sixth, Mitchell Lake in the Piedmont Ecoregion, could not be measured), primarily because they are being actively managed.
In summary, the species no longer persists in six ecoregions where it was historically present. However, it is still currently represented in the 13 remaining ecoregions, and this level of representation has not decreased further since the 2003 recovery plan revision, which did not consider the extirpated ecoregions necessary for recovery. Nevertheless, while populations persist in the 13 ecoregions, many of the ecoregions contain only populations that have low or very low resiliency, and four ecoregions only have one or two populations, which are all of low or very low resiliency, making them vulnerable to stochastic events.
In the SSA report, redundancy for red-cockaded woodpeckers is characterized by the number of resilient populations and their distribution within each ecoregion. Of the 124 current populations, there are 3 populations that have very high resiliency, 3 with high, 10 with moderate, 37 with low, and 71 with very low resiliency. As noted above, 4 of 13 ecoregions currently harbor high or very high resiliency populations: East Gulf Coastal Plain (2 populations), Mid-Atlantic Coastal Plain (1 population), Sandhills (2 populations), and South Atlantic Coastal Plain (1 population). In terms of redundancy, only two ecoregions, East Gulf Coastal Plain and Sandhills, have more than one population classified as having high or very high resiliency, and only these two ecoregions also have more than two populations classified as having moderate to very high resiliency. Redundancy of smaller populations is higher with a greater number of populations in the moderate, low, and very low resiliency categories within and across ecoregions. Four ecoregions (South Atlantic Coastal Plain, Mid-Atlantic Coastal Plain, West Gulf Coastal Plain, and Upper East Gulf Coastal Plain) have two populations exhibiting moderate to high resiliency, and thus some level of redundancy in terms of resilient populations. Most of the populations in these regions have moderately resiliency. The greatest number of current populations reside in the Mid-Atlantic Coastal Plain (24) and Florida Peninsula (22), although most of these are in the very low and low resiliency class. However, even for the more resilient populations, habitat fragmentation has resulted in wide gaps between forested areas, meaning there is little connectivity between populations.
Across the range of the red-cockaded woodpecker, the populations with the most resiliency (high or very high) populations tend to be in the eastern half of the range and in coastal or near coastal ecoregions rather than interior. Florida Peninsula and the western ecoregions currently only have populations in the moderate to very low resiliency categories. This concentration of the more resilient populations in coastal and near coastal areas could affect the species' ability to withstand catastrophic events such as hurricanes. Particularly for these populations, post-storm management actions are critical, as they can mitigate cavity loss and reduce hazardous fire fuels.
In summary, a species needs a suitable combination of all three characteristics (resiliency, representation, and redundancy) for long-term viability. Based on our analysis of the three factors, the red-cockaded demonstrates some degree of stability in all three factors. The species' viability is reduced over historical levels, but habitat conditions and population numbers are improving. In terms of resiliency, most of the populations are still quite small, but the vast majority are stable or even growing. The species has not lost any representative populations since the 2003 revised recovery plan, and while a few ecoregions still only contain one or two populations, most of these populations are stable or growing. Finally, there is a fair degree of redundancy within ecosystems across the range of the species, although, again, most of these populations are still quite small and are isolated from each other. The improving viability of the red-cockaded woodpecker has been largely due to intensive, extensive management, including actions immediately after large storm events to offset cavity loss and reduce hazardous fuels. Without this intervention, many populations, especially the low and very low resilience populations, likely would have been extirpated.
Our analysis of stressors and risk factors, as well as the past, current, and future influences on what the red-cockaded woodpecker needs for long-term viability, revealed that the primary predictor of future viability of the species is the continuation of active management (including cavity management, midstory treatment such as prescribed fire, and translocation efforts).
We assessed future red-cockaded woodpecker population growth, population size (active clusters), and resiliency by first modeling past trends and variation in population size of demographically delineated populations as affected by factors including management treatments (
For past growth rate of small populations, the most important variables were the number of new recruitment clusters, number of new artificial cavities in previously existing clusters (cavity management), midstory treatments by prescribed fire or mechanical methods, number of red-cockaded woodpeckers translocated into the population, and dominant pine type. Translocation had the greatest positive effect on growth of any management technique. For medium populations, recruitment clusters and midstory treatments by prescribed fire were significant management covariates. The best model for large populations included recruitment clusters, cavity management, and spatial configuration of active clusters. In all cases, effects of recruitment clusters, cavity management, midstory treatment, and translocation were positive.
We then used the best assessed future growth and conditions for each red-cockaded woodpecker population to assess viability under four future 25-year management scenarios: Low management, medium management, high management, and the “Manager's Expectation.” In the Manager's Expectation scenario, we elicited estimates for red-cockaded woodpecker conservation management treatments (
For the low management scenario, values for each management covariate (
We chose to project 25 years into the future because the combination of species' response to natural factors and management and the ability of managers to accurately predict future management treatments becomes highly uncertain at longer intervals. The red-cockaded woodpecker is a conservation-reliant species of naturally fire-dependent, open, and mature to old southern pine forests. These forest conditions do not currently occur without management due to the history of fire-exclusion, incompatible forest management, and other land uses. Planning and successfully implementing management and treatments for each active cluster and population requires extensive resources that are difficult for managers to accurately predict for longer than 25 years. In addition to a population's response to management, there is natural variation in nest success, number of fledglings, survival of young-of-year and adults, and cooperative breeding dynamics with replacement of adult breeders by other birds dispersing from other territories. In turn, this affects annual variation in population size (active clusters) and patterns of population growth or decline. Simulations of future population conditions under different management scenarios included effects of some management treatments, though not all, as model parameters. However, effects of these management treatment parameters did not account for all sources of annual variation affecting population size that still occurred in the model and simulations. Because of the variation in future simulated population size at 25 years (USFWS 2020, appendix 2), future estimates of population size after 25 years are more uncertain.
Table 1 summarizes the model outputs for the four scenarios at the end of the 25-year simulation period. Data from 106 of the 124 current populations were available for future simulations. Of those 106 populations, initial populations with fewer than 6 active clusters were not simulated unless they demographically merged with other populations to create new, larger populations during the 25-year period. In addition, the total number of simulated future populations at year 25 are not equal among management scenarios because of the different number of initial populations that demographically merge to establish new populations. In other words, a lower number of populations at the end than the start for each scenario does not mean that all those populations were extirpated, rather some of the populations increased and merged to create new, larger populations. Therefore, the initial starting number of populations, and predicted number of populations at the end of the simulation period, varied. We also compare the results of current and future population resiliency classes as percentages in this proposed rule rather than absolute numbers because of this variation. Furthermore, although the initial starting numbers varied for each of the scenarios for the reasons discussed above, we present the current condition of the 124 demographic populations as the starting place for each of these scenarios. The current condition (Past-to-Current in Table 1) for these
Only two ecoregions (Cumberland Ridge and Valley and Gulf Coast Prairie and Marshes) have no simulated populations of moderate to very high resiliency in the Manager's Expectation, medium management, and high management scenarios, compared to six ecoregions (Florida Peninsula, Ouachita Mountains, Cumberland Ridge and Valley, Piedmont, Gulf Coast Prairie and Marshes, and Mississippi River Alluvial Plain) that currently do not have moderate to very high resiliency populations. The one current population in the Mississippi River Alluvial Plain ecoregion was not simulated in the future. In the low management scenario, four ecoregions (Cumberland Ridge and Valley, Gulf Coast Prairie and Marshes, Ouachita Mountains, and Piedmont) that currently only have low or very low resiliency populations are not projected to gain any moderate to very high resiliency populations at 25 years.
The original red-cockaded woodpecker recovery plan was first issued by the Service on August 24, 1979. A first revision was issued on April 11, 1995, and the second, and current, revision on January 27, 2003. The 2003 recovery plan provided management guidelines fundamental to the conservation and recovery of red-cockaded woodpeckers. The Service continues to strongly encourage the application of these guidelines to the management of woodpecker populations on public and private lands. As explained in
The recovery plan contains both downlisting and delisting criteria. The recovery criteria in the 2003 recovery plan are based on 39 designated populations in different viability size classes. Although these were not the only red-cockaded woodpecker populations known at the time, they were selected as recovery populations because of anticipated future management by their management agencies or entities, the estimated future capacity of the properties, and their geographic distribution within and among recovery units (
Downlisting may be achieved by having a total of 20 designated recovery populations fulfilling the following criteria. Qualifying populations with the largest population sizes are listed for each criterion when a specific population is not required. No particular population may satisfy more than one criterion.
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Delisting can be achieved with a minimum 29 populations that fulfill required size criteria in, when required, specific recovery units. As with downlisting, a population that fulfills one criterion cannot be applied to meet another criterion. All of these populations must exist with suitable natural cavities and without dependence on continued artificial cavity management. Sufficient management and monitoring plans must be available by respective management agencies to continue to sustain these populations. Finally, the recovery plan indicates that only 11 of the 13 primary core populations must meet the delisting criteria because at any time 2 may be recovering from adverse impacts of hurricanes. Similarly, the requirement for secondary core populations is 9 of 10, and the requirement for essential support populations is 9 of 16 to allow for hurricane impacts.
Of the 29 populations required for delisting, only 12 (41.4 percent) currently meet delisting population size requirements. Of the following four recovery criteria with delisting population size requirements, Delisting Criterion 3, concerning populations in the South/Central Florida recovery unit, is the only criterion in which all populations have attained minimum size attributes. All of these 29 populations currently remain dependent on artificial cavities.
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Since the recovery plan was last revised in 2003, the number of red-cockaded woodpecker active clusters has increased from 5,627 to over 7,800 (USFWS 2020, entire). The population size objectives to meet applicable downlisting criteria have been met for 15 of 20 designated populations. All of these designated populations show stable or increasing long-term population growth rates (λ ≥ 1). However, not all of the designated recovery populations are demographically a single functional population as intended by the recovery plan. Nine of the 20 designated recovery populations toward fulfilling downlisting population size criteria consist of multiple smaller demographic populations. Based on the largest single demographic population for a designated recovery population, 14 of 20 designated recovery populations have achieved downlisting population size criteria. As to delisting criteria, because the delisting criteria all require all-natural cavities, none of the delisting criteria have been fully met. With continued forest management to retain and produce sufficient old pines for natural cavity excavation, future populations would no longer be dependent artificial cavities. Regardless, there has been encouraging progress towards meeting the delisting criteria, as 12 of 29 demographically delineated populations corresponding to designated recovery populations currently have achieved population sizes that meet the delisting criteria.
While recovery plans provide important guidance to the Service, States, and other partners on methods of minimizing threats to listed species and measurable objectives against which to measure progress towards recovery, they are guidance and not regulatory documents. Revisions to the List, including downlisting or delisting a species, must reflect determinations made in accordance with sections 4(a)(1) and 4(b) of the Act. Section 4(a)(1) requires that the Secretary determine whether a species is an endangered species or threatened species due to threats to the species. Section 4(b) of the Act requires that the determination be made “solely on the basis of the best scientific and commercial data available.” Therefore, while it is valuable to consider the progress a species has made towards meeting downlisting or delisting criteria, the decision to reclassify an endangered species as threatened or to delist a species due to recovery does not rely on the recovery plan. For the red-cockaded woodpecker, although the population objectives from the recovery plan have yet to be reached, the primary recovery task of increasing existing populations on Federal and State lands has been successful, and the population growth rates indicate sufficient resiliency to stochastic disturbances with effective management. In addition, redundancy of moderate to very high resiliency populations suggests that risks from future catastrophic events to overall viability is low.
Section 4 of the Act (16 U.S.C. 1533) and its implementing regulations (50 CFR part 424) set forth the procedures for determining whether a species meets the definition of “endangered species” or “threatened species.” The Act defines an “endangered species” as any species that is “in danger of extinction throughout all or a significant portion of its range” and a “threatened species” as a species that is “likely to become an endangered species within the foreseeable future throughout all or a significant portion of its range.” The Act requires that we determine whether a species meets the definition of “endangered species” or “threatened species” because of any of the following factors: (A) The present or threatened destruction, modification, or curtailment of its habitat or range; (B) overutilization for commercial, recreational, scientific, or educational purposes; (C) disease or predation; (D) the inadequacy of existing regulatory mechanisms; or (E) other natural or manmade factors affecting its continued existence. We must consider these same five factors in reclassifying (
Red-cockaded woodpeckers were once considered a common bird across the southeastern United States. At the time of listing in 1970, the species was severely threatened by lack of adequate habitat due to historical logging, incompatible forest management, and conversion of forests to urban and agricultural uses. Fire-maintained old growth pine savannahs, on which the species depends, were extremely rare. What little habitat remained was mostly degraded due to fire suppression and silvicultural practices that hindered the development of older, larger trees
When we modeled future scenarios, the majority of populations were projected to be stable or increasing in all but the low management scenario, highlighting how successful management can sustain even small populations, albeit with a greater inherent risk in response to poor or insufficient management. Future management at current and recent past levels, as represented by the medium management scenario, further increases the number of moderate to very high resiliency populations and projects that small populations can be preserved. In addition, at current (or greater) levels of management, redundancy and representation are expected to significantly improve because most populations are expected to increase in size across the ecoregions.
The Act does not define the term “foreseeable future,” which appears in the statutory definition of “threatened species.” Our implementing regulations at 50 CFR 424.11(d) set forth a framework for evaluating the foreseeable future on a case-by-case basis. The term foreseeable future extends only so far into the future as the Services can reasonably determine that both the future threats and the species' responses to those threats are likely. In other words, the foreseeable future is the period of time in which we can make reliable predictions. “Reliable” does not mean “certain”; it means sufficient to provide a reasonable degree of confidence in the prediction. Thus, a prediction is reliable if it is reasonable to depend on it when making decisions.
We determined the foreseeable future to be 25 years from present, because it is a reasonable timeframe in which we can reasonably estimate population responses to natural factors and management. As discussed under
The red-cockaded woodpecker still faces a variety of stressors due to inadequate habitat across its range, but these are now mostly legacy stressors resulting from historical forest conversion and fire suppression practices rather than current habitat loss. These legacy stressors include insufficient numbers of cavities and suitable, abundant old pines for natural cavity excavation; habitat fragmentation and its effects on genetic variation, dispersal, and connectivity to support demographic populations; lack of suitable foraging habitat for population growth and expansion; and small populations. The species also still faces stress from natural events, especially hurricanes. Immediate management response after natural disasters is key to preventing cluster abandonment in all populations and is critical to keeping smaller populations from being extirpated altogether. More broadly, this species remains conservation-reliant throughout its range. Red-cockaded woodpeckers rely on, and will continue to rely almost completely on, active management by property managers and biologists to install artificial cavities and manage clusters, restore additional habitat and strategically place recruitment clusters to improve connectivity, control the hardwood midstory through prescribed fire and silvicultural treatments, and translocate individuals to augment small populations and minimize loss of genetic variation. In addition, emergency response after severe storms and other natural disasters will continue to be necessary to prevent cluster abandonment and minimize wildfire fuel loading. However, both the emergency response and routine management are well-understood and are currently being implemented across the range of the woodpecker. In addition, much of the red-cockaded woodpecker's currently occupied habitat is now protected under various management plans. As a conservation-reliant species, securing management commitments for the foreseeable future would ensure that red-cockaded woodpecker populations grow or are maintained. This conclusion is reinforced by the future scenario simulations, which indicate that management efforts equal to or greater than current levels will further increase the number of moderate to very high resiliency populations and preserve small populations.
After evaluating the threats to the species and assessing the cumulative effect of the threats under the section 4(a)(1) factors, we find that, while the stressors identified above continue to negatively affect the red-cockaded woodpecker, new restoration techniques and changes in silvicultural practices has led to stabilization of the red-cockaded woodpecker's viability and even resulted in a substantial increase in the number and distribution of populations. Thirteen percent of all current red-cockaded woodpecker clusters are within moderate, high, or very highly resilient populations, and populations are spread across multiple ecoregions, providing for redundancy and representation. However, the species remains highly dependent on continued conservation management and the majority of populations contain small numbers of clusters. Thus, after assessing the best available information, we conclude that the red-cockaded woodpecker is not in danger of extinction throughout all of its range; however, it is likely to become in danger of extinction within the foreseeable future throughout all of its range.
However, if ongoing and future proactive red-cockaded woodpecker management were assured, the remaining negative factors identified above could be ameliorated. Therefore, in this proposed rule, we ask the public to provide comments regarding the adequacy of existing management plans for the conservation of the red-cockaded woodpecker, and the likelihood that those plans will continue to be implemented into the future (see Information Requested, above).
Under the Act and our implementing regulations, a species may warrant listing if it is in danger of extinction or likely to become so in the foreseeable future throughout all or a significant portion of its range. The court in
Following the court's holding in
For the red-cockaded woodpecker, we considered whether the threats are geographically concentrated in any portion of the species' range at a biologically meaningful scale. We examined the following stressors: Natural disasters such as hurricanes and vulnerability due to small population sizes and fragmentation. Other identified stressors, such as inadequate habitat, are uniform throughout the red-cockaded woodpecker's range. Although hurricanes may impact populations across the red-cockaded woodpecker's range, return intervals are shorter and impacts are more pronounced in near-coastal populations compared to inland populations (USFWS 2020, pp. 119-122). Furthermore, while small populations occur throughout the species' range, we found that there is a concentration of threats from the combination of both hurricanes and small population sizes in the Florida Peninsula, West Gulf Coastal Plain, and the southernmost near-coastal extension of the Upper West Gulf Coastal Plain ecoregions. This means these portions of the range together may constitute a portion of the species range where the species could have a different status because the threats are not uniform throughout the range and the species may face a greater level of imperilment where threats are concentrated.
Having determined that these are portions of the range where the species may be in danger of extinction, we next examined the question of whether these portions may be significant. In undertaking this analysis for the red-cockaded woodpecker, we considered whether the portions of the species' range identified above may be significant based on their biological importance to the overall viability of the species. Although these areas contain 49 of the 124 demographic populations identified in the SSA (40 percent), only three populations currently have moderate resiliency and the remaining populations demonstrate low and very low resiliency. One of the moderate populations is projected to increase to high resiliency in the low management scenario and two of three moderate populations are projected to increase to high resiliency in the remaining future scenarios. However, the majority of the populations remain in the low or very low resiliency category and do not contribute significantly, either currently or in the foreseeable future, to the species' total resiliency at a biologically meaningful scale compared to other representative areas. Although the populations in these ecoregions are relatively small, the current and future redundancy suggests that hurricanes would be unlikely to extirpate red-cockaded woodpeckers in an entire ecoregion, thus overall representation should not be impacted. Even if some populations in these portions were to become extirpated, the species would maintain sufficient levels of resiliency, representation, and redundancy in the rest of these ecoregions and in other ecoregions across its range, supporting the species' viability as a whole. Thus, we do not find that these are portions of the red-cockaded woodpecker's range that may be significant.
In conclusion, we do not find any portions of the species' range may be significant based on their biological importance to the overall viability of the red-cockaded woodpecker. Therefore, no portion of the species' range provides a basis for determining that the species is in danger of extinction in a significant portion of its range, and we determine that the species is likely to become in danger of extinction within the foreseeable future throughout all of its range. This is consistent with the courts' holdings in
Our review of the best available scientific and commercial information indicates that the red-cockaded woodpecker meets the definition of a threatened species. Therefore, we propose to reclassify the red-cockaded woodpecker as a threatened species in accordance with sections 3(20) and 4(a)(1) of the Act.
This proposal, if made final, would revise 50 CFR 17.11(h) to reclassify the red-cockaded woodpecker from endangered to threatened. This reclassification is due to the substantial efforts made by Federal, State, and private landowners to recover the species. Adoption of this proposed rule would formally recognize that this species is no longer in danger of extinction throughout all or a significant portion of its range and, therefore, does not meet the definition of an endangered species. However, the species is still impacted by the effects of habitat loss and degradation, habitat fragmentation, and small populations such that it meets the Act's definition of a threatened species.
Section 4(d) of the Act contains two sentences. The first sentence states that the “Secretary shall issue such regulations as he deems necessary and advisable to provide for the conservation” of species listed as threatened. The U.S. Supreme Court has noted that very similar statutory language like “necessary and advisble” demonstrates a large degree of deference to the agency (see
The courts have recognized the extent of the Secretary's discretion under this standard to develop rules that are appropriate for the conservation of a species. For example, courts have upheld rules developed under section 4(d) as a valid exercise of agency authority where they prohibited take of threatened wildlife or included a limitated taking prohibition (see
Exercising its authority under section 4(d) of the Act, the Service has developed a proposed 4(d) rule that is designed to address the red-cockaded woodpeckers' specific threats and conservation needs. Although the statute does not require the Service to make a “necessary and advisable” finding with respect to the adoption of specific prohibitions under section 9, we find that this rule as a whole satisfies the requirement in seciton 4(d) of the Act to issue regulations deemed necessary and advisable to provide for the conservation of the red-cockaded woodpecker. As discussed above, the Service has concluded that the red-cockaded woodpecker is likely to become an endangered species within the foreseeable future primarily due to threats stemming from lack of suitable habitat. Therefore, the provisions of this proposed 4(d) rule prohibit incidental take associated with actions that would result in the further loss or degradation of red-cockaded woodpecker habitat, including damage to or loss of cavity trees. Maintaining and expanding existing populations is also vital to the conservation of the species; therefore, the proposed 4(d) rule would also prohibit incidental take associated with actions that would harm or harass red-cockaded woodpeckers during breeding season as well as ban the use of insecticides and herbicides on standing pine trees in and around active cavity tree clusters (to provide for adequate foraging).
The red-cockaded woodpecker relies, and will continue to rely, on artificial cavities until a sufficient number of large mature pines becomes widely available; the installation and maintenance of artificial cavities is an essential management tool to sustain populations until such time as there are adequate natural cavities. However, the proper techniques to install cavity inserts, drill cavities, or install cavity restrictor plates require training and experience; therefore, the proposed 4(d) rule would prohibit incidental take associated with these activities, so that they can be properly regulated under a section 10(a)(1)(A) permit. Similarly, inspecting cavities to monitor eggs and hatchlings, typically using a video scope, drop light, or mirror inserted into the cavity, could cause incidental take, through flushing of adult or subadult birds resulting in possible injury or even death, if not done correctly. Therefore, the proposed 4(d) rule would prohibit incidental take associated with inspections of cavity contents, including the use of video scopes, drop lights, or mirrors, inserted into cavities; however, these activities could be covered under a section 10(a)(1)(A) permit.
The proposed 4(d) would also provide for certain exceptions to the prohibitions. In addition to certain standard exceptions, they include incidental take on Department of Defense installations under certain circumstances, incidental take associated with conservation and habitat restoration actions carried out in accordance with a Service- or State-approved management plan, and certain actions that would harm or harass red-cockaded woodpeckers during breeding season associated with existing infrastructure that are not increases in the existing activities. All of these prohibitions and exceptions are discussed in more detail below.
The provisions of this proposed 4(d) rule are one of many tools that the Service would use to promote the conservation of the red-cockaded woodpecker. This proposed 4(d) rule would apply only if and when the Service makes final the determination to reclassify the red-cockaded woodpecker as a threatened species.
This proposed 4(d) rule would provide for the conservation of the red-cockaded woodpecker by prohibiting the following activities, except as otherwise authorized or permitted: Importing or exporting; take; possession and other acts with unlawfully taken specimens; delivering, receiving, transporting, or shipping in interstate or foreign commerce in the course of commercial activity; and selling or offering for sale in interstate or foreign commerce. We also propose several standard exceptions to the prohibitions for the red-cockaded woodpecker, such as activities authorized by permits under § 17.32 of these regulations; take by employees of State conservation agencies operating under a cooperative agreement with the Service in accordance with section 6(c) of the Act; and take by an employee of the Service, Federal land management agency, or State conservation agency to aid sick or injured red-cockaded woodpeckers, which are set forth under Proposed Regulation Promulgation, below.
Under the Act, “take” means to harass, harm, pursue, hunt, shoot, wound, kill, trap, capture, or collect, or to attempt to engage in any such conduct. Some of these provisions have been further defined by regulation at 50 CFR 17.3. Take can result knowingly or otherwise, by direct and indirect impacts, intentionally or incidentally. Regulating intentional and incidental take would help preserve the species' remaining populations; enable beneficial management actions to occur; and decrease synergistic, negative effects from other stressors.
In this 4(d) rule, we propose to prohibit intentional take, including capturing, handling, and similar activities, because these activities require training and experience. Such activities include, but are not limited to, translocation, banding, collecting tissue samples, and research involving capturing and handling red-cockaded woodpeckers. While these activities are important to red-cockaded woodpecker recovery, there are proper techniques to capturing and handling birds that require training and experience. Improper capture, banding, or handling can cause injury or even result in death of red-cockaded woodpeckers. Therefore, to assure these activities continue to be conducted correctly by properly trained personnel, the proposed 4(d) rule would prohibit intentional take; however, these activities could be covered under a section 10(a)(1)(A) permit.
For the purposes of this rule, “occupied habitat” is defined as an active cavity tree cluster with surrounding suitable foraging habitat. An “active cavity tree cluster” is defined as the area delineated by a polygon of active cavity trees plus a 200-foot buffer, although there are some exceptions to this. Foraging habitat is delineated as surrogate foraging partitions according to described Service procedure and standard.
As discussed above under Summary of Stressors and Conservation Measures Affecting the Species, the lack of suitable habitat is the primary factor continuing to affect the status of the red-cockaded woodpecker. Historical clearcutting, incompatible forest management, and conversion to urban and agricultural lands uses resulted in the loss of the majority of longleaf and other open-canopy pine habitat across the range of the species. While these impacts have been significantly curtailed and mostly replaced by beneficial conservation management, stressors caused by adverse historical practices still linger, such as insufficient numbers of cavities, low numbers of suitable old pines, and habitat fragmentation. In addition, these types of actions do still occur within red-cockaded woodpecker habitat, so maintaining existing habitat is essential. Therefore, in addition to the activities prohibited above, this proposed 4(d) rule would prohibit incidental take of any red-cockaded woodpecker: (1) Associated with damage or conversion of currently occupied red-cockaded woodpecker nesting and foraging habitat to other land uses that result in conditions not able to support red-cockaded woodpeckers; and (2) associated with forest management practices in currently occupied red-cockaded woodpecker nesting and foraging habitat that result in conditions not able to support red-cockaded woodpeckers. Such actions could include, but are not necessarily limited to, timber harvesting for thinning or regeneration in occupied habitat that temporarily or permanently removes active cavity trees or suitable foraging habitat and renders the remaining habitat and timber insufficient for red-cockaded woodpeckers, or actions that permanently convert currently occupied red-cockaded woodpecker nesting and foraging habitat to other non-forest land uses, such as real estate development, cultivation or crops, firing ranges on military installations, roads, rights-of-way, and pasture.
However, under this 4(d) rule, we propose that habitat restoration activities that would sustain, improve, or increase quality and quantity of habitat for the red-cockaded woodpecker would be excepted from incidental take prohibitions if they are conducted under a Service- or State-approved management plan that provides for the conservation of the red-cockaded woodpecker. The Service encourages landowners and managers to conduct activities that maintain and improve red-cockaded woodpecker habitat. These habitat restoration activities may include, but are not limited to, thinning overstocked stands; converting loblolly, slash or other planted pines to more fire-tolerant native pines such as longleaf pine; regeneration of stands to provide more sustainable future habitat; and prescribed fire. Current conditions in certain pine stands can limit the amount of red-cockaded woodpecker habitat. For example, foraging habitat dominated by even-aged stands of old senescent pines may limit the ability of younger stands to grow and replace the future natural loss of older stands. Regeneration can be an important tool to provide a more sustainable future source of suitable red-cockaded woodpecker nesting and foraging habitat with trees of sufficient size and age. However, harvesting occupied red-cockaded woodpecker habitat for regeneration in these conditions could result in loss of suitable habitat, resulting in a reduction to the red-cockaded woodpecker population. Under this proposed 4(d) rule, we would under certain conditions except incidental take associated with habitat restoration activities that have short-term adverse effects to red-cockaded woodpecker, but that are intended to provide for improved habitat quality and quantity in the long term, with coinciding increase in numbers of red-cockaded woodpeckers. Current and future red-cockaded woodpecker habitat conditions that require such restoration can vary significantly among sites and properties, to the extent that it would be extremely difficult to prescribe a universal condition by which this exception would apply. Therefore, in this 4(d) rule we propose that these activities may proceed in compliance with a Service- or State-approved management plan, where the site-specific conditions can be strategically and accurately assessed. Suitable management plans may consist of stand-alone documents, or may be tiered to other plans, such as U.S. Forest Service Land and Resource Management Plans, National Wildlife Refuge System Comprehensive Conservation Plans, and wildlife management area plans, State Wildlife Action Plans, or other State agency plans.
Potentially, these management plans could cover more than just situations where land managers are seeking to alter habitat in the short term for long-term restoration of improved habitat. In this 4(d) rule we propose to except incidental take associated with other management activities conducted under Service- or State-approved red-cockaded woodpecker management plans. Public agencies and private landowners prepare a variety of plans for different purposes. A Service- or State-approved plan in this regard would include a red-cockaded woodpecker management component, whether as a part of a larger plan or a stand-alone plan, to address factors including, but not limited to, the red-cockaded woodpecker population size objective and how management for artificial cavities as needed and habitat management to sustain, restore, or increase habitat for foraging and cavity trees will attain population size objectives. For example, once certain population size objectives, such as those identified in the 2003 recovery plan, are met, and other parameters are established (such as commitments relating to the amount, extent, and location of any future incidental take), a landowner following a Service- or State-approved management plan could be excepted from incidental take for red-cockaded woodpecker conservation activities or habitat restoration activities, including, but not limited to silviculture and prescribed fire, activities causing harm or harassment of red-cockaded woodpeckers, and use of insecticides or herbicides on their lands. Again, the Service seeks to encourage comprehensive, proactive management that results in red-cockaded woodpecker population growth and stability. Excepting incidental take once such targets are met will encourage these beneficial management activities. However, because of the differences in needed management across the range of the species, it is appropriate to identify these population targets and other parameters on a case-by-case basis in a Service- or State-approved management plan, rather than in a blanket exception in this 4(d) rule. State agency Safe Harbor plans and agreements implemented for non-governmental landowners, as approved by the Service, do not need to be covered under this exception because they receive permits under the authority of section 10(a)(1)(A) of the Act that provides exemption from the prohibitions of incidental take.
We acknowledge the critical role that the States play in the conservation of
The Service is also considering how to expand and provide further clarity regarding red-cockaded woodpecker conservation actions and habitat restoration activities that would be excepted from the incidental take prohibition in the 4(d) rule, and therefore we seek comment on our proposed provision excepting incidental take resulting from conservation or habitat management activities, including silviculture, prescribed fire, and use of insecticides or herbicides, with a Service- or State-approved management plan for red-cockaded woodpecker conservation (see Information Requested, above). In addition, we seek comment and information about the important factors that should be considered for these Service- or State-approved management plans. These factors may include the duration of the plan; personnel and funding for plan implementation; current habitat conditions and management limitations; the treatments to improve habitat and resolve limitations; desired future habitat conditions; and the past, current, and anticipated future size of the red-cockaded woodpecker population. In addition, these factors may include the role and extent of Service oversight of both Service- and State-approved plans, such as monitoring requirements and reporting to the Service any resulting take of red-cockaded woodpeckers. Continued conservation activities and beneficial land management are necessary to address habitat degradation and fragmentation, and it is the intent of this proposed rule to encourage these activities. We also seek comment on whether an exception could be made for beneficial long-term forest regeneration activities without a Service- or State-approved management plan, if limiting conditions were placed on the activities, such as red-cockaded woodpecker current population size and a future limit to the reduction of population size as a result of the restoration project, and what those limiting conditions should be.
The use of insecticides and herbicides within or near an active cavity tree cluster could expose red-cockaded woodpeckers and their invertebrate prey to toxic chemicals, even when application follows labeling requirements. Depending on chemical ingredients, toxicity, and dose exposure, there is an ecological risk that foraging red-cockaded woodpeckers could be adversely exposed and injured (National Research Council 2013, p. 3-15). Adverse impacts to red-cockaded woodpeckers include reduced quantity of insects available for foraging or ingestion of contaminated prey (
This measure would not prohibit use of insecticides or herbicides in applications that do not result in an adverse chemical exposure to red-cockaded woodpeckers. The Service recognizes that herbicides can be safely applied in occupied habitat (McDearman 2012, entire). For example, hand application of herbicides by direct foliar spray in occupied habitat to control undesirable shrubs or hardwoods may not result in incidental take if no chemicals are applied—either directly or inadvertently—to standing pine trees where red-cockaded woodpeckers are expected to forage on uncontaminated invertebrates within the 0.50-mile radius of the center of the active cavity tree cluster. The use of insecticides or herbicides within these areas could be permitted under a Service- or State-approved management plan, as described above, with an appropriate toxicological risk analysis of the likelihood of an adverse oral, dermal or respiratory exposure to the red-cockaded woodpecker, and incidental take could be excepted when adverse short-term impacts are essential or unavoidable for a long-term benefit. We seek comment from the public on the spatial area covered by this prohibition, and whether the prohibition should apply to other vegetation, such as the herbaceous ground layer in addition to standing pine trees, within 0.50-mile from the center of an active cavity cluster, as well as the clarity of the prohibition, (see Information Requested, above).
The proposed 4(d) rule would also prohibit incidental take of actions that would render cavity trees unusable to red-cockaded woodpeckers. This could result from activities such as parking vehicles, stacking pallets, or piling logging slash or logging decks, pine straw, or other material near active cavity trees; activities that damage active cavity trees; and accidently-set wildfires, because such activities could render the cavity trees unusable to red-cockaded woodpeckers. This prohibition is intended to prevent incidental take resulting from operations in the vicinity of active cavity trees that may damage the trees through, for example, collision or compaction of tree roots. This prohibition would also apply to activities that result in damage to cavity trees, rendering them unusable to red-cockaded woodpeckers. For example, incidental take caused by accidently started fires that damage cavity trees or a small- or large-arms munitions ricochet that hit a cavity tree, causing damage that ultimately kills the tree, would be prohibited.
Within the range of the species, all Department of Defense Army, Air Force, and Marine Corps installations have red-cockaded woodpecker management plans and guidelines incorporated into their Service-approved INRMPs to
During the breeding season in particular, vehicles and equipment, floodlights, other construction activities, extraction activities, military maneuvers, or even just human presence can potentially harass breeding red-cockaded woodpeckers, resulting in nest failure. Therefore, this proposed 4(d) rule would also prohibit incidental take associated with the operation of vehicles or mechanical equipment, the use of flood lights at night, activities with a human presence, (including military activities), other actions associated with construction or repair, or extraction activities in an active cavity tree cluster during the breeding season. The breeding season for red-cockaded woodpeckers can vary across the latitudinal range and, depending on location, the season can start as early as March and end as late as July; therefore we do not propose specific dates for this prohibition in this rule. We furthermore acknowledge that incidental take from such activities can also occur outside of the breeding season, so we seek comments from the public about whether this prohibition should encompass the whole year, and not just during the breeding season (see Information Requested, above).
We acknowledge that there are active cavity tree clusters within areas with existing human presence, activities, and infrastructure, including Federal, State, and county roads, private forest access roads and trails, military installations, nature trails, golf courses, and residential areas. We also recognize the use of vehicles and mechanical equipment may need to be used for maintenance requirements to ensure safety and operational needs of existing infrastruture, including maintaining existing infrastructure such as firebreaks, roads, rights-of-way, fence lines, and golf courses, and we understand that these maintenance requirements to ensure human safety may need to take place during the breeding season. Incidental take resulting from these ongoing activities are excepted from this prohibition. In addition, we recognize there is existing human presence, activities, and infrastructure within active cavity tree clusters and that red-cockaded woodpeckers have demonstrated tolerance, or an ability to habituate, to these stressors without adversely affecting essential feeding, breeding, or sheltering behaviors. Therefore, for continuation of ongoing activities, as long as there is no increase in the frequency, intensity, duration, pattern, or extent of existing operations, use, or activities, such that red-cockaded woodpeckers would negatively respond to the stressor, the activities may continue (
However, there are also operations conducted near active cavity trees that render the tree unusable to red-cockaded woodpeckers, through sustained harassment that prevents individual birds from using cavities. For example, staging and use of equipment such as generators and floodlights within an active cavity tree cluster can cause birds to roost outside of their cavities and become exposed to predation, disrupt incubation and kill eggs, or alter feeding of nestlings, which could result in their death. We seek comment on whether this prohibition should also apply to these situations where harassment is likely (see Information Requested, above).
Red-cockaded woodpeckers must have sufficient nesting and foraging habitat to survive. Maintaining an adequate number of suitable cavities in each woodpecker cluster is fundamental to the conservation of the species. Loss of natural cavity trees was a major factor in the species' decline, and availability of natural cavity trees currently limits many populations. Until a sufficient number of large, old pines become widely available, installation and maintenance of artificial cavities is an essential management tool to sustain populations and bring about population increases, and the Service continues to encourage the installation of artificial cavities. However, we also acknowledge that there are proper techniques to install cavity inserts, drill cavities, or install cavity restrictor plates, and these techniques require training and experience. Improperly installed artificial cavities can cause injury or even result in death of red-cockaded woodpeckers attempting to roost or nest in them. Therefore, to assure artificial cavities continue to be installed correctly by properly trained personnel, the proposed 4(d) rule would prohibit incidental take associated with the installation of artificial cavity inserts, drilled cavities, or cavity restrictor plates; however, these activities could be covered under a section 10(a)(1)(A) permit.
We acknowledge that many of our partners have the training and extensive experience in installing artificial
Similarly, we encourage monitoring of red-cockaded woodpecker clusters and populations, including inspecting cavities to monitor eggs and hatchlings, typically using a video scope, drop light, or mirror inserted into the cavity. However, these inspections can cause incidental take if not done correctly, as red-cockaded woodpeckers sometimes will flush from the cavity chamber and injure themselves trying to escape past the probe. Therefore, the proposed 4(d) rule would prohibit incidental take associated with inspections of cavity contents, including the use of video scopes, drop lights, or mirrors, inserted into cavities. These activities could be covered under a section 10(a)(1)(A) permit.
We may issue permits to carry out otherwise prohibited activities, including those described above, involving threatened wildlife under certain circumstances. Regulations governing permits are codified at 50 CFR 17.32. With regard to threatened wildlife, a permit may be issued for the following purposes: Scientific purposes, to enhance propagation or survival, for economic hardship, for zoological exhibition, for educational purposes, for incidental taking, or for special purposes consistent with the purposes of the Act. There are also certain statutory exceptions from the prohibitions, which are found in sections 9 and 10 of the Act.
The Service recognizes the special and unique relationship with our State conservation agency partners in contributing to conservation of listed species. State agencies often possess scientific data and valuable expertise on the status and distribution of endangered, threatened, and candidate species of wildlife and plants. State agencies, because of their authorities and their close working relationships with local governments and landowners, are in a unique position to assist the Services in implementing all aspects of the Act. In this regard, section 6 of the Act provides that the Services shall cooperate to the maximum extent practicable with the States in carrying out programs authorized by the Act. Therefore, any qualified employee or agent of a State conservation agency that is a party to a cooperative agreement with the Service in accordance with section 6(c) of the Act, who is designated by his or her agency for such purposes, would be able to conduct activities designed to conserve the red-cockaded woodpecker that may result in otherwise prohibited take without additional authorization, including installation of artificial cavities.
Nothing in this proposed 4(d) rule would change in any way the recovery planning provisions of section 4(f) of the Act, the consultation requirements under section 7 of the Act, or the ability of the Service to enter into partnerships for the management and protection of the red-cockaded woodpecker. However, interagency cooperation may be further streamlined through planned programmatic consultations for the species between Federal agencies and the Service. We ask the public, particularly State agencies and other interested stakeholders that may be affected by the proposed 4(d) rule, to provide comments and suggestions regarding additional guidance and methods that the Service could provide or use, respectively, to streamline the implementation of this proposed 4(d) rule (see Information Requested, above).
We are required by Executive Orders 12866 and 12988 and by the Presidential Memorandum of June 1, 1998, to write all rules in plain language. This means that each rule we publish must:
(a) Be logically organized;
(b) Use the active voice to address readers directly;
(c) Use clear language rather than jargon;
(d) Be divided into short sections and sentences; and
(e) Use lists and tables wherever possible.
If you feel that we have not met these requirements, send us comments by one of the methods listed in
We have determined that we do not need to prepare an environmental assessment or environmental impact statement, as defined in the National Environmental Policy Act (42 U.S.C. 4321
In accordance with the President's memorandum of April 29, 1994, “Government-to-Government Relations with Native American Tribal Governments” (59 FR 22951), Executive Order 13175, and the Department of the Interior's manual at 512 DM 2, we readily acknowledge our responsibility to communicate meaningfully with recognized Federal Tribes on a government-to-government basis. In accordance with Secretarial Order 3206 of June 5, 1997 (American Indian Tribal Rights, Federal-Tribal Trust Responsibilities, and the Endangered Species Act), we readily acknowledge our responsibilities to work directly with tribes in developing programs for healthy ecosystems, to acknowledge that tribal lands are not subject to the same controls as Federal public lands, to remain sensitive to Indian culture, and to make information available to tribes. As we move forward with this reclassification process, we will continue to consult with tribes on a government-to-government basis as necessary.
A complete list of references cited is available on the internet at
The primary authors of this proposed rule are staff members of the Service's Southeastern Region, Division of Conservation and Classification.
The Director, U.S. Fish and Wildlife Service, approved this document and authorized the undersigned to sign and submit the document to the Office of the Federal Register for publication electronically as an official document of the U.S. Fish and Wildlife Service. Aurelia Skipwith, Director, U.S. Fish and Wildlife Service, approved this document on September 24, 2020, for publication.
Endangered and threatened species, Exports, Imports, Reporting and recordkeeping requirements, Transportation.
Accordingly, we propose to amend part 17, subchapter B of chapter I, title 50 of the Code of Federal Regulations, as set forth below:
16 U.S.C. 1361-1407; 1531-1544; and 4201-4245, unless otherwise noted.
(h) * * *
(h) Red-cockaded woodpecker (
(1)
(2)
(i) Import or export, as set forth at § 17.21(b).
(ii) Intentional take, including capturing, handling, or other activities, except as set forth in paragraphs (h)(3)(ii) and (iii) of this section.
(iii) Possession, sale, delivery, carrying, transportation, or shipment, by any means whatsoever, of any red-cockaded woodpecker taken in violation of paragraphs (h)(2)(i) and (ii) of this section, except as set forth in paragraph (h)(3)(iv) of this section.
(iv) Incidental take resulting from the following activities:
(A) Damage or conversion of currently occupied red-cockaded woodpecker nesting and foraging habitat to other land uses that results in conditions not able to support red-cockaded woodpeckers.
(B) Forest management practices in currently occupied red-cockaded woodpecker nesting and foraging habitat, including, but not limited to, timber harvesting for thinning or regeneration, that result in conditions not able to support red-cockaded woodpeckers.
(C) Operation of vehicles or mechanical equipment, the use of floodlights, activities with a human presence, other actions associated with construction and repair, or extraction activities in an active cavity tree cluster during the red-cockaded woodpecker breeding season, except as set forth under paragraph (h)(3)(v)(C) of this section.
(D) Installation of artificial cavity inserts, drilled cavities, or cavity restrictor plates.
(E) Inspecting cavity contents, including, but not limited to, use of video scopes, drop lights, or mirrors inserted into cavities.
(F) Activities that render active cavity trees unusable to red-cockaded woodpeckers.
(G) Use of insecticide or herbicide on any standing pine tree within 0.50-mile from the center of an active cavity tree cluster of red-cockaded woodpeckers.
(iv) Possession and other acts with unlawfully taken specimens, as set forth at § 17.21(d)(1).
(v) Interstate or foreign commerce in the course of commercial activity, as set forth at § 17.21(e).
(vi) Sale or offer for sale, as set forth at § 17.21(f).
(3)
(i) Conduct activities as authorized by a permit issued under § 17.32.
(ii) Take, as set forth at § 17.21(c)(2) through (c)(4) for endangered wildlife, and (c)(6) and (c)(7) for endangered migratory birds.
(iii) Take as set forth at § 17.31(b).
(iv) Possess and engage in other acts with unlawfully taken red-cockaded woodpeckers, as set forth at § 17.21(d)(2) through (d)(4) for endangered wildlife.
(v) Take incidental to an otherwise lawful activity caused by:
(A) Red-cockaded woodpecker management and military training activities on Department of Defense installations with a Service-approved integrated natural resources management plan.
(B) Habitat restoration activities carried out in accordance with a management plan providing for red-cockaded woodpecker conservation developed in coordination with, and approved by, the Service or a State conservation agency.
(C) Operation of vehicles or mechanical equipment, the use of lights at night, or activities with a human presence in active cavity tree cluster during the red-cockaded woodpecker breeding season provided that they:
(
(
The Department of Agriculture has submitted the following information collection requirement(s) to OMB for review and clearance under the Paperwork Reduction Act of 1995, Public Law 104-13. Comments regarding (a) whether the collection of information is necessary for the proper performance of the functions of the agency, including whether the information will have practical utility; (b) the accuracy of the agency's estimate of burden including the validity of the methodology and assumptions used; (c) ways to enhance the quality, utility and clarity of the information to be collected; (d) ways to minimize the burden of the collection of information on those who are to respond, including through the use of appropriate automated, electronic, mechanical, or other technological collection techniques or other forms of information technology.
Comments regarding this information collection received by November 9, 2020 will be considered. Written comments and recommendations for the proposed information collection should be submitted within 30 days of the publication of this notice on the following website
An agency may not conduct or sponsor a collection of information unless the collection of information displays a currently valid OMB control number and the agency informs potential persons who are to respond to the collection of information that such persons are not required to respond to the collection of information unless it displays a currently valid OMB control number.
Animal and Plant Health Inspection Service, USDA.
Notice.
We are advising the public of our decision to revise the import requirements for the importation of fresh blueberries from Chile into the United States by removing the methyl bromide fumigation requirement for blueberries from Regions VIII and XVI of Chile. Based on the findings of our commodity import evaluation, which we made available to the public for review and comment through a previous notice, we have determined that the application of the designated phytosanitary measures will be sufficient to mitigate the risks of introducing or disseminating plant pests via the importation of blueberries from Chile.
Imports under the revised requirements may be authorized beginning October 8, 2020.
Mr. Tony Román, Senior Regulatory Policy Specialist, RCC, IRM, PHP, PPQ, APHIS, 4700 River Road, Unit 133, Riverdale, MD 20737-1236; (301) 851-2242.
Under the regulations in “Subpart L-Fruits and Vegetables” (7 CFR 319.56-1 through 319.56-12, referred to below as the regulations), the Animal and Plant Health Inspection Service (APHIS) of the U.S. Department of Agriculture prohibits or restricts the importation of fruits and vegetables into the United States from certain parts of the world to prevent plant pests from being introduced into and spread within the United States.
Section 319.56-4 of the regulations provides the requirements for authorizing the importation of fruits and vegetables into the United States, as well as revising existing requirements for the importation of fruits and vegetables. Paragraph (c) of that section
In accordance with that process, we published a notice
We solicited comments on the notice for 60 days ending June 1, 2020. We received 53 comments by that date. They were from growers, importers, buyers, ports, associations, and representatives of a foreign government. All but one of those comments were in favor of the proposal with no further questions. The remaining comment is discussed below.
In the initial notice, we proposed that the national plant protection organization (NPPO) of Chile would have to enter into an operational workplan with APHIS that details the activities and responsibilities that the NPPO would carry out in order to meet the requirements of the systems approach.
The commenter asked for further details on how the NPPO of Chile will ensure grower compliance with the operational workplan.
We also stated in the initial notice that all places of production would have to be registered with the NPPO of Chile. The NPPO of Chile will register a production site in Regions VIII or XVI for export without methyl bromide treatment only if it follows all regulatory steps and control measures required by Chile's National EGVM Control Program. The NPPO of Chile will monitor production sites for EGVM trap catches and immature stage finds, and will update the list of registered production sites as necessary based on the results of this monitoring. To further ensure grower compliance, the NPPO of Chile will inspect blueberries that have been packed for export for EGVM prior to export to the United States.
The commenter also requested confirmation that moth trapping and monitoring will be used and asked for further details on the levels of moth trapping and monitoring that growers will be required to undertake. The commenter asked that growers be required to place a minimum of one monitoring trap in each field planned for export, with any capture of EGVM in the traps triggering more detailed sampling. The commenter also asked for confirmation that monitoring will be undertaken by the NPPO of Chile.
EGVM trapping and control in each district in Regions VIII and XVI must follow the terms of the operational workplan, which currently align with guidelines for Chile's National EGVM Control Program. All blueberry production sites and grape production sites must be trapped at appropriate levels. The Chilean guidelines for trapping currently require one trap every 2.5 hectares, with at least two traps per field, and one trap in fields smaller than 2.5 hectares. In the event that Chile changes these guidelines, APHIS would continue to require the current trapping levels of one trap every 2.5 hectares, with at least two traps per field, and one trap in fields smaller than 2.5 hectares.
The NPPO of Chile will conduct all EGVM moth trapping. Any findings of EGVM would mean that any production within a 500-meter radius can only be exported with methyl bromide fumigation. Any production between 500 meters and 3,000 meters of an EGVM outbreak will be regulated for EGVM and can only export if the fields meet a pre-harvest fruit monitoring requirement, 1 to 30 days before harvest begins. This activity shall be performed by companies authorized by the NPPO of Chile. Any field with monitoring results including at least one finding of EGVM shall be stricken from access to the inspection system and their fruit must undergo a methyl bromide fumigation treatment to be exported to the United States.
The commenter also asked for further details on the process of reinstating production sites in the event that EGVM is found in a production site.
If the NPPO of Chile finds that a place of production or packinghouse is not complying with the requirements of the systems approach, no blueberries from the place of production or packinghouse will be eligible for export to the United States until APHIS and the NPPO of Chile conduct an investigation and appropriate remedial actions have been implemented.
Under the terms of the operational workplan, we are specifying that if 10 or more EGVM moths are trapped within 1 year in any urban area in Region VIII or Region XVI, all blueberry production sites within 5 kilometers of that urban area may only ship blueberries to the United States if they are fumigated with methyl bromide, either in Chile or at the United States port of entry.
Reinstatement of export status for a production site (to be able to export blueberries without methyl bromide fumigation) suspended from the program for larval finds during export inspection requires 1 year with no more than 1 adult EGVM trapped, and no immature stages of EGVM found in the field or in packed out blueberries. This will require a rolling trap count for each export production site in Region VIII and Region XVI to be maintained by the NPPO of Chile.
Finally, the commenter noted that sulfur dioxide has been identified as a successful mitigant against EGVM, and requested that APHIS and the NPPO of Chile discuss the use of sulfur dioxide for imports of Chilean blueberries as a further safeguard against EGVM when the Environmental Protection Agency (EPA) approves sulfur dioxide for use as a pest mitigant for blueberries in the United States.
The EPA must thoroughly evaluate pesticides to ensure that they meet Federal safety standards to protect human health and the environment before approving them for use in the United States. APHIS cannot make any decisions regarding the use of sulfur dioxide prior to any such evaluation and approval.
Therefore, in accordance with the regulations in § 319.56-4(c)(3)(iii), we are announcing our decision to revise the requirements for the importation of blueberries from Chile by removing the methyl bromide requirement for blueberries grown in Regions VIII and XVI of Chile, subject to the following phytosanitary measures:
• The NPPO of Chile must enter into an operational workplan with APHIS that details the activities and
• Places of production and packinghouses must be registered with and approved by the NPPO of Chile. Additionally, packinghouses must be pest-exclusionary.
• If the NPPO of Chile determines that a registered place of production or packinghouse is not complying with the provisions of the systems approach, no blueberries from the place of production or packinghouse are eligible for export into the United States until APHIS and the NPPO conduct an investigation and appropriate remedial actions have been implemented.
• The NPPO of Chile must demonstrate continued low pest prevalence for EGVM in Regions VIII and XVI through a national trapping program for EGVM. Trapping density and servicing, as well as thresholds for low pest prevalence, will be detailed in the operational workplan.
• If the place of production is within an area of Region VIII or XVI that is designated by the NPPO of Chile as a regulated area for EGVM, the place of production must have a field inspection by the NPPO within 2 weeks prior to harvest with no finds of immature EGVM based on a biometric sample of plants. Places of production in control areas for EGVM are not authorized to export blueberries to the United States under the terms of the systems approach and blueberries from such areas must be fumigated with methyl bromide in order to be exported to the United States.
• Packed blueberries must be inspected by the NPPO of Chile prior to export under the auspices of APHIS' preclearance program within Chile.
• Each shipment must be accompanied by a phytosanitary certificate issued by the NPPO with an additional declaration that the blueberries were produced in an area of low pest prevalence for EGVM.
• Each shipment is subject to inspection for quarantine pests at the port of entry into the United States.
• If immature stages of EGVM are detected during field inspections or packinghouse inspections, or any life stage of EGVM is detected at a port of entry into the United States, the consignment may not be imported into the United States and the place of production will be suspended from the systems approach export program until reinstated. Blueberries from that place of production must be fumigated with methyl bromide in order to be exported to the United States until such reinstatement.
These revised conditions will be listed in the Fruits and Vegetables Import Requirements database (available at
In accordance with the Paperwork Reduction Act of 1995 (44 U.S.C. 3501
The Animal and Plant Health Inspection Service is committed to compliance with the E-Government Act to promote the use of the internet and other information technologies, to provide increased opportunities for citizen access to Government information and services, and for other purposes. For information pertinent to E-Government Act compliance related to this notice, please contact Mr. Joseph Moxey, APHIS' Information Collection Coordinator, at (301) 851-2483.
Pursuant to the Congressional Review Act (5 U.S.C. 801
7 U.S.C. 1633, 7701-7772, and 7781-7786; 21 U.S.C. 136 and 136a; 7 CFR 2.22, 2.80, and 371.3.
Food Safety and Inspection Service, USDA.
Notice; soliciting nominations.
Pursuant to the provisions of the rules and regulations of the Department of Agriculture and the Federal Advisory Committee Act (FACA), the U.S. Department of Agriculture (USDA) is soliciting nominations for membership on the National Advisory Committee on Microbiological Criteria for Foods (NACMCF). There are 9 vacancies. Advisory Committee members serve a two-year term that may be renewed for two additional consecutive terms, at the discretion of the Secretary of Agriculture.
All materials must be received by November 9, 2020.
Nomination packages should be sent by
John Jarosh, Designated Federal Officer, by
The Food Safety and Inspection Service (FSIS) invites interested persons to submit comments on this
•
•
USDA is seeking NACMCF nominees with scientific expertise in the fields of microbiology, epidemiology, food technology (food, clinical, and predictive), toxicology, risk assessment, infectious disease, biostatistics, and other related sciences. USDA is seeking nominations for NACMCF from persons in academia, industry, State governments, and the Federal Government, as well as all other interested persons with the required expertise.
USDA is also seeking nominations for one individual affiliated with a consumer group to serve on the NACMCF. This member will serve as a representative member to provide a consumer viewpoint to the Committee. This member will not be required to have a scientific background and will not be subject to a conflict of interest review.
Members can serve on only one USDA advisory Committee at a time. All nominees will undergo a USDA background check. With the exception of the consumer representative member, any member who is not a Federal government employee will be appointed to serve as a non-compensated special government employee (SGE). SGEs will be subject to appropriate conflict of interest statutes and standards of ethical conduct.
Applicants that are federally registered lobbyists will not be considered for USDA's NACMCF federal advisory Committee, if the position of appointment will serve in a Special Government Employee capacity.
Nominations for membership on the NACMCF must be addressed to the Secretary of Agriculture and accompanied by a cover letter addressing the nomination. Additionally, a resume or curriculum vitae and a completed USDA Advisory Committee Membership Background Information form AD-755 (available online at:
A person may self-nominate, or a nomination can be made on behalf of someone else.
The NACMCF was established in March 1988, in response to a recommendation in a 1985 report of the National Academy of Sciences Committee on Food Protection, Subcommittee on Microbiological Criteria, “An Evaluation of the Role of Microbiological Criteria for Foods.” The current charter for the NACMCF and other information about the Committee are available to the public for viewing on the FSIS website at:
The Committee provides scientific advice and recommendations to the Secretary of Agriculture and the Secretary of Health and Human Services concerning the development of microbiological criteria by which the safety and wholesomeness of food can be assessed. For example, one of the most recent efforts of the Committee is to provide the best scientific information available on Shiga Toxin producing
Appointments to the Committee will be made by the Secretary of Agriculture after consultation with the Secretary of Health and Human Services to ensure that recommendations made by the Committee take into account the needs of the diverse groups served by the USDA.
The full Committee expects to meet at least once a year by teleconference or in-person, and the meetings will be announced in the
The subcommittees will meet as deemed necessary by the chairperson through working group meetings in an open public forum. Subcommittees may also meet through teleconference or by computer-based conferencing (webinars). Subcommittees may invite technical experts to present information for consideration by the subcommittee. The subcommittee meetings will not be announced in the
NACMCF holds subcommittee meetings in order to accomplish the work of NACMCF; all subcommittee work is reviewed and approved during a public meeting of the full Committee, as announced in the
Members must be prepared to work outside of scheduled Committee and subcommittee meetings and may be required to assist in document preparation. Committee members serve on a voluntary basis; however, travel expenses and per diem reimbursements are available.
All SGE and Federal government employee nominees who are selected must complete the Office of Government Ethics (OGE) 450 Confidential Financial Disclosure Report before rendering any advice or prior to their first meeting. With the exception of the consumer representative Committee member, all Committee members will be reviewed pursuant to 18 U.S.C. 208 for conflicts of interest relating to specific NACMCF work charges, and financial disclosure updates will be required annually. Members subject to financial disclosure must report any changes in financial holdings requiring additional disclosure. OGE 450 forms are available on-line at:
FSIS will announce this
FSIS will also announce and provide a link to this
No agency, officer, or employee of the USDA shall, on the grounds of race, color, national origin, religion, sex, gender identity, sexual orientation, disability, age, marital status, family/parental status, income derived from a public assistance program, or political beliefs, exclude from participation in, deny the benefits of, or subject to discrimination any person in the United States under any program or activity conducted by the USDA.
Persons with disabilities who require alternative means for communication (Braille, large print, audiotape, etc.), should contact USDA's TARGET Center at (202) 720-2600 (voice and TDD).
Done at Washington, DC, on September 29, 2020.
U.S. Commission on Civil Rights
Announcement of meeting.
Notice is hereby given, pursuant to the provisions of the rules and regulations of the U.S. Commission on Civil Rights (Commission) and the Federal Advisory Committee Act (FACA) that a teleconference meeting of the Nevada Advisory Committee (Committee) to the Commission will be held at 2:00 p.m. (Pacific Time) Wednesday, October 14, 2020. The purpose will be to review and potentially vote on their project proposal on equity in education and distance learning.
The meeting will be held on Wednesday, October 14, 2020 at 2:00 p.m. PT.
Ana Victoria Fortes (DFO) at
This meeting is available to the public through the following toll-free call-in number: 800-367-2403, conference ID number: 5959088. Any interested member of the public may call this number and listen to the meeting. Callers can expect to incur charges for calls they initiate over wireless lines, and the Commission will not refund any incurred charges. Callers will incur no charge for calls they initiate over land-line connections to the toll-free telephone number. Persons with hearing impairments may also follow the proceedings by first calling the Federal Relay Service at 1-800-877-8339 and providing the Service with the conference call number and conference ID number.
Members of the public are entitled to make comments during the open period at the end of the meeting. Members of the public may also submit written comments; the comments must be received in the Regional Programs Unit within 30 days following the meeting. Written comments may be mailed to the Western Regional Office, U.S. Commission on Civil Rights, 300 North Los Angeles Street, Suite 2010, Los Angeles, CA 90012 or email Ana Victoria Fortes at
Records and documents discussed during the meeting will be available for public viewing prior to and after the meeting at
Records generated from this meeting may also be inspected and reproduced at the Regional Programs Unit, as they become available, both before and after the meeting. Persons interested in the work of this Committee are directed to the Commission's website,
On August 10, 2020, the Executive Secretary of the Foreign-Trade Zones (FTZ) Board docketed an application submitted by the City of San Jose, grantee of FTZ 18, requesting to expand Subzone 18F on behalf of Lam Research Corporation in Hayward, California, subject to the existing activation limit of FTZ 18.
The application was processed in accordance with the FTZ Act and Regulations, including notice in the
An application has been submitted to the Foreign-Trade Zones (FTZ) Board by the Bridgeport Port Authority, grantee of FTZ 76, requesting an expansion of Subzone 76A on behalf of ASML US, LLC, in Wilton Connecticut. The application was submitted pursuant to the provisions of the Foreign-Trade Zones Act, as amended (19 U.S.C. 81a-81u), and the regulations of the FTZ Board (15 CFR part 400). It was formally docketed on October 5, 2020.
Subzone 76A currently consists of the following sites: Site 1 (29.23 acres) 71, 73 & 77 Danbury Road, Wilton; Site 2 (3.65 acres) 7 Edmund Road, Newtown; Site 3 (11.78 acres) 59 Danbury Road, Wilton; and, Site 4 (2.68 acres) 7 Francis Clarke Circle, Bethel.
The applicant is requesting authority to expand the subzone to include an additional site: Proposed Site 5 (1.125 acres) 50 Danbury Road, Wilton. No additional authorization for production activity has been requested at this time. The existing subzone and the proposed site would be subject to the existing activation limit of FTZ 76.
In accordance with the FTZ Board's regulations, Elizabeth Whiteman of the FTZ Staff is designated examiner to review the application and make recommendations to the Executive Secretary.
Public comment is invited from interested parties. Submissions shall be addressed to the FTZ Board's Executive Secretary and sent to:
A copy of the application will be available for public inspection in the “Reading Room” section of the FTZ Board's website, which is accessible via
For further information, contact Elizabeth Whiteman at
Enforcement and Compliance, International Trade Administration, Department of Commerce.
The Department of Commerce (Commerce) determines that Power Steel Co., Ltd. (Power Steel) made sales of steel concrete reinforcing bar (rebar) from Taiwan at less than normal value (NV) during the period of review (POR), March 7, 2017 through September 30, 2018.
Applicable October 8, 2020.
Leo Ayala, AD/CVD Operations, Office IV, Enforcement and Compliance, International Trade Administration, U.S. Department of Commerce, 1401 Constitution Avenue NW, Washington, DC 20230; telephone: (202) 482-3945.
Commerce published the
On April 8, 2020, Commerce extended the deadline for these final results.
The product covered by the
All issues raised in the case and rebuttal briefs by parties to this administrative review are addressed in the Issues and Decision Memorandum, which is hereby adopted by this notice. A list of the issues raised is attached to this notice as Appendix II. The Issues and Decision Memorandum is a public document and is on file electronically via Enforcement and Compliance's Antidumping and Countervailing Duty Centralized Electronic Service System (ACCESS). ACCESS is available to registered users at
Based on our review of the record and comments received from interested parties, we have used the U.S. sales database submitted in Power Steel's January 9, 2020 SQR for these final results.
We have determined the following weighted-average dumping margin exists for the period March 7, 2017 through September 30, 2018:
Commerce has determined, and CBP shall assess, antidumping duties on all appropriate entries of subject merchandise in accordance with these final results of review.
For Power Steel, because its weighted-average dumping margin is not zero or
The following cash deposit requirements will be effective for all shipments of subject merchandise entered, or withdrawn from warehouse, for consumption on or after the publication date of the final results of this administrative review, as provided by section 751(a)(2)(C) of the Act: (1) The cash deposit rate listed in the “Final Results of the Administrative Review” section will be equal to the weighted-average dumping margin established in the final results of this review; (2) for previously reviewed or investigated companies not included in the final results of this review, the cash deposit rate will continue to be the company-specific rate published for the most recently completed segment of this proceeding in which the company was reviewed; (3) if the exporter is not a firm covered in this review, a previous review, or the original less-than-fair-value (LTFV) investigation, but the producer is, then the cash deposit rate will be the rate established for the most recently completed segment of this proceeding for the producer of subject merchandise; and (4) the cash deposit rate for all other producers or exporters will continue to be 3.50 percent, the all-others rate established in the LTFV investigation.
This notice also serves as a final reminder to importers of their responsibility under 19 CFR 351.402(f)(2) to file a certificate regarding the reimbursement of antidumping duties prior to liquidation of the relevant entries during the POR. Failure to comply with this requirement could result in Commerce's presumption that reimbursement of antidumping duties occurred and the subsequent assessment of double antidumping duties.
This notice also serves as a reminder to parties subject to administrative protective orders (APO) of their responsibility concerning the return or destruction of proprietary information disclosed under APO in accordance with 19 CFR 351.305(a)(3), which continues to govern business proprietary information in this segment of the proceeding. Timely written notification of the return/destruction of APO materials, or conversion to judicial protective order, is hereby requested. Failure to comply with the regulations and the terms of an APO is a sanctionable violation.
We are issuing and publishing this notice in accordance with sections 751(a)(1) and 777(i)(1) of the Act and 19 CFR 351.221(b)(5).
The merchandise subject to the
The subject merchandise includes rebar that has been further processed in the subject countries or a third country, including but not limited to cutting, grinding, galvanizing, painting, coating, or any other processing that would not otherwise remove the merchandise from the scope of the
The subject merchandise is classifiable in the Harmonized Tariff Schedule of the United States (HTSUS) primarily under item numbers 7213.10.0000, 7214.20.0000, and 7228.30.8010. The subject merchandise may also enter under other HTSUS numbers including 7215.90.1000, 7215.90.5000, 7221.00.0017, 7221.00.0018, 7221.00.0030, 7221.00.0045, 7222.11.0001, 7222.11.0057, 7222.11.0059, 7222.30.0001, 7227.20.0080, 7227.90.6030, 7227.90.6035, 7227.90.6040, 7228.20.1000, and 7228.60.6000.
HTSUS numbers are provided for convenience and customs purposes; however, the written description of the scope remains dispositive.
Enforcement and Compliance, International Trade Administration, Department of Commerce.
The Department of Commerce (Commerce) seeks public comment on any subsidies, including stumpage subsidies, provided by certain countries exporting softwood lumber or softwood lumber products to the United States during the period January 1, 2020 through June 30, 2020.
Comments must be submitted within 30 days after publication of this notice.
Kristen Johnson, AD/CVD Operations, Enforcement and Compliance, International Trade Administration, U.S. Department of Commerce, 1401 Constitution Avenue NW, Washington, DC 20230; telephone: (202) 482-4793.
Pursuant to section 805 of Title VIII of the Tariff Act of 1930 (the Softwood Lumber Act of 2008), the Secretary of Commerce is mandated to submit to the appropriate Congressional committees a report every 180 days on any subsidy provided by countries exporting softwood lumber or softwood lumber products to the United States, including stumpage subsidies. Commerce submitted its last subsidy report on June 24, 2020. As part of its newest report, Commerce intends to include a list of subsidy programs identified with sufficient clarity by the public in response to this notice.
Given the large number of countries that export softwood lumber and softwood lumber products to the United States, we are soliciting public comment only on subsidies provided by countries which had exports accounting for at least one percent of total U.S. imports of softwood lumber by quantity, as classified under Harmonized Tariff Schedule of the United States (HTSUS) codes 4407.1001, 4407.1100, 4407.1200, 4407.1905, 4407.1906, 4407.1910, during the period January 1, 2020, through June 30, 2020. Official U.S. import data published by the United States International Trade Commission's DataWeb indicate that four countries (Brazil, Canada, Germany, and Sweden) exported softwood lumber to the United States during that time period in amounts sufficient to account for at least one percent of U.S. imports of softwood lumber products. We intend to rely on similar previous six-month periods to identify the countries subject to future reports on softwood lumber subsidies. For example, we will rely on U.S. imports of softwood lumber and softwood lumber products during the period July 1, 2020, through December 31, 2020, to select the countries subject to the next report.
Under U.S. trade law, a subsidy exists where an authority: (i) Provides a financial contribution; (ii) provides any form of income or price support within the meaning of Article XVI of the GATT 1994; or (iii) makes a payment to a funding mechanism to provide a financial contribution to a person, or entrusts or directs a private entity to make a financial contribution, if providing the contribution would normally be vested in the government and the practice does not differ in substance from practices normally followed by governments, and a benefit is thereby conferred.
Parties should include in their comments: (1) The country which provided the subsidy; (2) the name of the subsidy program; (3) a brief description (no more than 3-4 sentences) of the subsidy program; and (4) the government body or authority that provided the subsidy.
As specified above, to be assured of consideration, comments must be received no later than 30 days after the publication of this notice in the
All comments should be addressed to Joseph A. Laroski Jr., Deputy Assistant Secretary for Policy and Negotiations, at U.S. Department of Commerce, 1401 Constitution Avenue NW, Washington, DC 20230.
National Marine Fisheries Service (NMFS), National Oceanic and Atmospheric Administration (NOAA), Commerce.
Notice of public meeting.
The New England Fishery Management Council (Council, NEFMC) will hold a special, one-day meeting to consider actions affecting New England fisheries in the exclusive economic zone (EEZ). Due to federal and state travel restrictions, public gathering limitations, and updated guidance from the Centers for Disease Control and Prevention related to COVID-19, this meeting will be conducted entirely by webinar.
The webinar meeting will be held on Tuesday, October 27, 2020, beginning at 12:30 p.m.
All meeting participants and interested parties can register to join the webinar at
Thomas A. Nies, Executive Director, New England Fishery Management Council; telephone: (978) 465-0492, ext. 113.
After introductions and brief announcements, the Council will hear abbreviated reports on recent activities from its Chairman, the Greater Atlantic Regional Fisheries Office's Regional Administrator, and the Northeast Fisheries Science Center. Then, the Council will turn its attention to the two primary issues for this meeting: (1) 2021 Council Priorities; and (2) Executive Order 13921, Promoting American Seafood Competitiveness and Economic Growth, which was signed on May 7, 2020. The Council will discuss and finalize 2021 work priorities for all of its committees and various responsibilities. As part of and in addition to this discussion, the Council will develop a list of actions that respond directly to the requests outlined in Executive Order 13921. During appropriate opportunities and at the discretion of the Council Chairman, the public will be allowed to offer comments on these agenda items. The Council's “Guidelines for Providing Public Comments” can be found at
Also, a guide for how to publicly comment through the webinar is available on the Council website at
Although non-emergency issues not contained on this agenda may come before the Council for discussion, those issues may not be the subject of formal action during this meeting. Council action will be restricted to those issues specifically listed in this notice and any issues arising after publication of this notice that require emergency action under section 305(c) of the Magnuson-Stevens Fishery Conservation and Management Act, provided the public has been notified of the Council's intent to take final action to address the emergency. The public also should be aware that the meeting will be recorded. Consistent with 16 U.S.C. 1852, a copy of the recording is available upon request.
This meeting is being conducted entirely by webinar. Requests for auxiliary aids should be directed to Thomas A. Nies (see
16 U.S.C. 1801
National Marine Fisheries Service (NMFS), National Oceanic and Atmospheric Administration (NOAA), Commerce.
Notice; issuance of an incidental harassment authorization.
In accordance with the regulations implementing the Marine Mammal Protection Act (MMPA) as amended, notification is hereby given that NMFS has issued an incidental harassment authorization (IHA) to Ørsted Wind Power North America, LLC, (Ørsted) to incidentally harass, by Level B harassment only, marine mammals during marine site characterization surveys in coastal waters from New York to Massachusetts in the areas of the Commercial Lease of Submerged Lands for Renewable Energy Development on the Outer Continental Shelf (OCS-A 0486/0517, OCS-A 0487, and OCS-A 0500) and along potential export cable routes to shoreline locations from New York to Massachusetts.
This authorization is valid from September 25, 2020 through September 24, 2021.
Carter Esch, Office of Protected Resources, NMFS, (301) 427-8421. Electronic copies of the application and supporting documents, as well as a list of the references cited in this document, may be obtained by visiting the internet at:
The MMPA prohibits the “take” of marine mammals, with certain exceptions. Sections 101(a)(5)(A) and (D) of the MMPA (16 U.S.C. 1361
Authorization for incidental takings shall be granted if NMFS finds that the taking will have a negligible impact on the species or stock(s) and will not have an unmitigable adverse impact on the availability of the species or stock(s) for taking for subsistence uses (where relevant). Further, NMFS must prescribe the permissible methods of taking and other “means of effecting the least practicable adverse impact” on the affected species or stocks and their habitat, paying particular attention to rookeries, mating grounds, and areas of similar significance, and on the availability of such species or stocks for taking for certain subsistence uses (referred to in shorthand as “mitigation”); and requirements pertaining to the mitigation, monitoring and reporting of such takings are set forth.
On April 15, 2020, NMFS received a request from Ørsted for an IHA to take marine mammals incidental to marine site characterization surveys in the OCS-A 0486/0517, OCS-A 0487, and OCS-A 0500 Lease Areas designated and offered by the Bureau of Ocean Energy Management (BOEM) as well as along one or more export cable routes (ECRs) between the southern portions of the Lease Areas and shoreline locations from New York to Massachusetts, to support the development of offshore wind projects. NMFS deemed the application to be adequate and complete on July 1, 2020. Ørsted's request is for take, by Level B harassment only, of small numbers of 15 species or stocks of marine mammals. Neither Ørsted nor NMFS expects serious injury or mortality to result from this activity and the activity is expected to last no more than one year; therefore, an IHA is appropriate.
NMFS previously issued an IHA to Ørsted for similar activities (84 FR 52464, October 2, 2019); Ørsted has complied with all the requirements (
The purpose of the marine site characterization surveys in the Lease Areas and ECRs (herein Survey Area) is to obtain a baseline assessment of seabed/sub-surface soil conditions in the Survey Area to support the siting of potential future offshore wind projects. Underwater sound, produced by high-resolution geophysical (HRG) survey equipment, resulting from Ørsted's site characterization surveys, has the potential to result in incidental take of marine mammals. This take of marine mammals is expected to be in the form of harassment and no serious injury or mortality is anticipated, nor is any authorized in this IHA. Ørsted will conduct continuous HRG survey operations 12-hours per day (daylight only in shallow, nearshore locations) and 24-hours per day (offshore) using multiple vessels. Based on the planned 24-hours operations, the survey activities for all survey segments would require 1,302 vessel days if one vessel were surveying the entire survey line continuously. However, an estimated 5 vessels may be used simultaneously, with a maximum of no more than 9 vessels. Therefore, all the survey effort will be completed in one year.
A detailed description of Ørsted's survey activities, including types of survey equipment planned for use, is provided in the notice of the proposed IHA (85 FR 48179; August 10, 2020). Since that time, no changes have been made to the activities; therefore, a detailed description is not provided here. Please refer to that notice for the description of the specified activity. Mitigation, monitoring, and reporting measures are described in detail later in this document (please see Mitigation and Monitoring and Reporting below).
A notice of NMFS's proposal to issue an IHA to Ørsted was published in the
(i) NMFS acknowledges that the 160-dB rms step-function approach is simplistic, and that an approach reflecting a more complex probabilistic function may more effectively represent the known variation in responses at different levels due to differences in the receivers, the context of the exposure, and other factors. The commenters suggested that our use of the 160-dB threshold implies that we do not recognize the science indicating that animals may react in ways constituting behavioral harassment when exposed to lower received levels. However, we do recognize the potential for Level B harassment at exposures to received levels below 160 dB rms, in addition to the potential that animals exposed to received levels above 160 dB rms will not respond in ways constituting behavioral harassment (
As behavioral responses to sound depend on the context in which an animal receives the sound, including the animal's behavioral mode when it hears sounds, prior experience, additional biological factors, and other contextual factors, defining sound levels that disrupt behavioral patterns is extremely difficult. Even experts have not previously been able to suggest specific new criteria due to these difficulties (
(ii) The ENGOS disagreed with NMFS' assumption that marine mammals move away from sound sources. The ENGOS claimed that studies have not found avoidance behavior to be generalizable among species and contexts, and even though avoidance may itself constitute take under the MMPA. Importantly, the commenters mistakenly seem to believe that the NMFS' does not consider avoidance as a take, and that the concept of avoidance is used as a mechanism to reduce overall take—this is not the case. Avoidance of loud sounds is a well-documented behavioral response, and NMFS often accordingly accounts for this avoidance by reducing the number of injurious exposures, which would occur in very close proximity to the source and necessitate a longer duration of exposure. However, when Level A harassment takes are reduced in this manner, they are changed to Level B harassment takes, in recognition of the fact that this avoidance or other behavioral responses occurring as a result of these exposures are still take, NMFS does not reduce the overall amount of take as a result of avoidance.
(iii) The ENGOs questioned the effectiveness of the mitigation and monitoring measures proposed to be authorized, and NMFS' prior authorization of a reduced number of takes for North Atlantic right whales (relative to the estimated value) based on the anticipated protection afforded by mitigation measures. They specifically recommended that seasonal restrictions should be established and consideration should be given to species for which an unusual mortality event (UME) has been declared. Note that NMFS is requiring Ørsted to comply with restrictions associated with identified seasonal management areas (SMA) and they must comply with dynamic management area restrictions (DMAs), if any DMAs are established near the Survey Area. Furthermore, we have established a 500-m shutdown zone for North Atlantic right whales, which is more than three times as large as the greatest Level B harassment isopleth calculated for the specified activities for this IHA (141 m). Additionally, Seasonal Restrictions from January through May will limit the number of vessel that can operate within the Survey Area, thus providing an additional protective measure for North Atlantic right whales. Similar mitigation and monitoring measures have previously been required in numerous HRG survey IHAs and have been successfully implemented. Finally, we made no reductions in authorized takes of North Atlantic right whales by Level B harassment in this IHA. Rather, as a result of incorporating the updated NARW density model data, the number of takes authorized for right whales has been increased from the amount in the proposed IHA (from 24 to 37).
Given that the effects to marine mammals from the types of surveys authorized in this IHA are expected to be limited to low level behavioral harassment even in the absence of mitigation, the limited additional benefit anticipated by adding this detection method (especially for right whales and other low frequency cetaceans, species for which PAM has limited efficacy), and the cost and impracticability of implementing a full-time PAM program, we have determined the current requirements for visual monitoring are sufficient to ensure the least practicable adverse impact on the affected species or stocks and their habitat.
As stated in the proposed IHA, Ørsted is required to use night-vision equipment (
While there will be additional documents submitted with a Renewal request, for a qualifying Renewal these will be limited to documentation that NMFS will make available and use to verify that the activities are identical to those in the initial IHA, are nearly identical such that the changes would have either no effect on impacts to marine mammals or decrease those impacts, or are a subset of activities already analyzed and authorized but not completed under the initial IHA. NMFS will also confirm, among other things, that the activities will occur in the same location; involve the same species and stocks; provide for continuation of the same mitigation, monitoring, and reporting requirements; and that no new information has been received that would alter the prior analysis. The Renewal request will also contain a preliminary monitoring report, to verify that effects from the activities do not indicate impacts of a scale or nature not previously analyzed. The additional 15-day public comment period provides the public an opportunity to review these few documents, provide any additional pertinent information and comment on whether they think the criteria for a Renewal have been met. Between the initial 30-day comment period on these same activities and the additional 15 days, the total comment period for a Renewal is 45 days.
NOAA Fisheries recently published “Technical Memorandum NMFS‐OPR‐64: North Atlantic Right Whale Monitoring and Surveillance: Report and Recommendations of the National Marine Fisheries Service's Expert Working Group” which is available at:
As described above, NMFS increased the authorized take of North Atlantic right whales based on an updated density model that was released after the publication of the proposed IHA in the
Sections 3 and 4 of the IHA application summarize available information regarding status and trends, distribution and habitat preferences, and behavior and life history, of the affected species. Additional information regarding population trends and threats may be found in NMFS' Stock Assessment Reports (SARs;
All species that could potentially occur in the Survey Area are included in Table 6 of the IHA application. However, the temporal and/or spatial occurrence of several species listed in Table 6 of the IHA application is such that take of these species is not expected to occur, because they have very low densities in the Survey Area and/or are extralimital to the Survey Area. These are: The blue whale (
Table 1 summarizes information related to the population or stock, including regulatory status under the MMPA and ESA and potential biological removal (PBR), where known. For taxonomy, we follow Committee on Taxonomy (2020). PBR is defined by the MMPA as the maximum number of animals, not including natural mortalities, that may be removed from a marine mammal stock while allowing that stock to reach or maintain its optimum sustainable population (as described in NMFS' SARs). While no mortality is anticipated or authorized, PBR and serious injury or mortality from anthropogenic sources are
Marine mammal abundance estimates presented in this document represent the total number of individuals that make up a given stock or the total number estimated within a particular study or survey area. NMFS' stock abundance estimates for most species represent the total estimate of individuals within the geographic area, if known, that comprises that stock. For some species, this geographic area may extend beyond U.S. waters. All managed stocks in this region are assessed in NMFS' Atlantic SARs (
A detailed description of the species likely to be affected by Ørsted's activities, including brief introductions to the species and relevant stocks as well as available information regarding population trends and threats, and information regarding local occurrence were provided in the notice of the proposed IHA (85 FR 48179; August 10, 2020). Since that time, we are not aware of any changes in the status (under the MMPA or ESA) of these species and stocks; therefore, detailed descriptions are not provided here. Please refer to that notice for these descriptions. Please also refer to NMFS' website (
The effects of underwater noise from Ørsted's survey activities have the potential to result in behavioral harassment of marine mammals in the vicinity of the Survey Area. The notice of proposed IHA (85 FR 48179; August 10, 2020) included a discussion of the effects of anthropogenic noise on marine mammals and the potential effects of
This section provides an estimate of the number of incidental takes authorized through this IHA, which will inform both NMFS' consideration of “small numbers” and the negligible impact determination.
Harassment is the only type of take expected to result from these activities. Except with respect to certain activities not pertinent here, section 3(18) of the MMPA defines “harassment” as any act of pursuit, torment, or annoyance, which (i) has the potential to injure a marine mammal or marine mammal stock in the wild (Level A harassment), or (ii) has the potential to disturb a marine mammal or marine mammal stock in the wild by causing disruption of behavioral patterns, including, but not limited to, migration, breathing, nursing, breeding, feeding, or sheltering (Level B harassment).
Authorized takes would be by Level B harassment only, in the form of disruption of behavioral patterns for individual marine mammals resulting from exposure to noise from certain HRG sources. Based on the nature of the activity and the anticipated effectiveness of the mitigation measures (
Generally speaking, we estimate take by considering: (1) Acoustic thresholds recommended by NMFS for use in evaluating when marine mammals will be behaviorally harassed or incur some degree of permanent hearing impairment, (2) the area or volume of water that will be ensonified above these levels in a day, (3) the density or occurrence of marine mammals within these ensonified area, and (4) and the number of days of activities. We note that while these basic factors can contribute to a rudimentary calculation to provide an initial prediction of takes, additional information that can qualitatively inform take estimates is also sometimes available (
NMFS recommends use of acoustic thresholds that identify the received level of underwater sound above which exposed marine mammals would be reasonably expected to be behaviorally harassed (equated to Level B harassment) or to incur PTS of some degree (equated to Level A harassment).
Here we describe operational and environmental parameters of the activity that will contribute to identifying the area ensonified above the acoustic thresholds, which include sources levels and a transmission loss coefficient.
NMFS has developed a user-friendly methodology for determining the rms sound pressure level (SPL
NMFS considers the data provided by Crocker and Fratantonio (2016) to represent the best available information on source levels associated with HRG equipment and, therefore, recommends that source levels provided by Crocker and Fratantonio (2016) be incorporated in the method described above to estimate isopleth distances to the Level A and Level B harassment thresholds. In cases when the source level for a specific type of HRG equipment is not provided in Crocker and Fratantonio (2016), NMFS recommends that either the source levels provided by the manufacturer be used, or, in instances where source levels provided by the manufacturer are unavailable or unreliable, a proxy from Crocker and Fratantonio (2016) be used instead. Table 3 of the IHA application details HRG equipment types that may be used during the planned surveys, and the associated sound levels.
Results of modeling using the methodology described above indicated that, of the HRG survey equipment planned for use by Ørsted that has the potential to result in Level B harassment of marine mammals, sound produced by the Applied Acoustics Dura-Spark UHD sparkers and GeoMarine Geo-Source sparker would propagate furthest to the Level B harassment threshold (141 m; Table 3). As described above, only a portion of Ørsted's survey activity days will employ boomers or sparkers; therefore, for the purposes of the exposure analysis, it was assumed that sparkers would be the dominant acoustic source for approximately 701 of the total 1,302 survey activity days. For the remaining 601 survey days, the TB Chirp III (54 m; Table 3) was assumed to be the dominant source. Thus, the distances to the isopleths corresponding to the threshold for Level B harassment for sparkers (141 m) and the TB Chirp III (54 m) were used as the basis of the take calculation for all marine mammals for 54% and 46% of survey activity days, respectively.
Isopleth distances to Level A harassment thresholds for all types of HRG equipment and all marine mammal functional hearing groups were modeled using the NMFS User Spreadsheet and NMFS Technical Guidance (2018), which provides a conservative approach to exposure estimation. The dual criteria (peak SPL and SEL
Distances to the Level A harassment threshold for Innomar were calculated using a Matlab-based numerical model, which accounts for the source's extremely narrow beam width. Cumulative sound exposure level from a moving source to an assumed stationary marine mammal was calculated based on the safe distance
Modeled distances to isopleths corresponding to the Level A harassment threshold are very small (<1 m) for three of the four marine mammal functional hearing groups that may be impacted by the survey activities (
The habitat-based density models produced by the Duke University Marine Geospatial Ecology Laboratory (Roberts
For the exposure analysis, density data from Roberts
For bottlenose dolphin densities, Roberts
Here we describe how the information provided above was brought together to produce a quantitative take estimate. In order to estimate the number of marine mammals predicted to be exposed to sound levels that would result in harassment, radial distances to predicted isopleths corresponding to Level B harassment thresholds were calculated, as described above. Those distances were then used to calculate the area(s) around the HRG survey equipment predicted to be ensonified to sound levels that exceed harassment thresholds. The area estimated to be ensonified to relevant thresholds in a single day was then calculated, based on areas predicted to be ensonified around the HRG survey equipment and the estimated trackline distance traveled per day by the survey vessel. The daily ensonified area was multiplied by the mean annual density of a given marine mammal species for each Survey Area segment. This value was then multiplied by the number of planned vessel days.
As noted previously, not all noise producing survey equipment/sources will be operated concurrently by each survey vessel on every vessel day. The greatest distance to the Level B harassment threshold for impulsive sources (
Ørsted estimates that the surveys will achieve a maximum daily track line distance of 70 km per 24-hour day during the HRG survey activity days; this distance accounts for the vessel traveling at approximately 4.0 kn, during active survey periods only. Estimates of incidental take by Level B harassment for impulsive and non-impulsive HRG equipment were calculated using the 141 m and 54 m Level B harassment isopleths, respectively, to determine the daily ensonified areas for 24-hour operations (impulsive 19.8 km
Ørsted will establish a 500 m exclusion zone for the North Atlantic right whale, which substantially exceeds the distance to the Level B harassment isopleth for both survey days using impulsive sources (141 m) and survey days using non-impulsive sources (54 m). However, Ørsted will be operating 24 hours per day for a majority of the total of 1,302 vessel days. Even with the implementation of mitigation measures (including visual monitoring at night with use of night vision devices), it is reasonable to assume that night time operations for an extended period could result in a limited number of North Atlantic right whales being exposed to underwater sound exceeding Level B harassment levels. Take has been conservatively calculated based on the largest isopleth for both types of survey days (
As described above, NMFS has determined that the likelihood of take of any marine mammals in the form of Level A harassment occurring as a result of the surveys is so low as to be discountable; therefore, we do authorize take of any marine mammals by Level A harassment.
Orsted has requested additional take, by Level B harassment, authorizations beyond the modelled takes for humpback and minke whales and common dolphins, based on increased detection of these species during its 2019 survey. Orsted's justification for this request can be found in its application, which is available here:
In order to issue an IHA under Section 101(a)(5)(D) of the MMPA, NMFS must set forth the permissible methods of taking pursuant to such activity, and other means of effecting the least practicable impact on such species or stock and its habitat, paying particular attention to rookeries, mating grounds, and areas of similar significance, and on the availability of such species or stock for taking for certain subsistence uses (latter not applicable for this action). NMFS regulations require applicants for incidental take authorizations to include information about the availability and feasibility (economic and technological) of equipment, methods, and manner of conducting such activity or other means of effecting the least practicable adverse impact upon the affected species or stocks and their habitat (50 CFR 216.104(a)(11)).
In evaluating how mitigation may or may not be appropriate to ensure the least practicable adverse impact on species or stocks and their habitat, as well as subsistence uses where applicable, we carefully consider two primary factors:
(1) The manner in which, and the degree to which, the successful implementation of the measure(s) is expected to reduce impacts to marine mammals, marine mammal species or
(2) the practicability of the measures for applicant implementation, which may consider such things as cost, impact on operations, and, in the case of a military readiness activity, personnel safety, practicality of implementation, and impact on the effectiveness of the military readiness activity.
The mitigation measures described below are consistent with those required and successfully implemented under previous incidental take authorizations issued in association with HRG survey activities. Modeling was performed to estimate ZOIs (see “Estimated Take”); these ZOI values were used to inform mitigation measures for HRG survey activities to eliminate Level A harassment and minimize Level B harassment, while providing estimates of the areas within which Level B harassment might occur.
In addition to the specified measures described below, Ørsted will conduct briefings for vessel operators and crews, the marine mammal monitoring teams, and when new personnel join the work, in order to explain responsibilities, communication procedures, the marine mammal monitoring protocol, and operational procedures.
Marine mammal exclusion zones (EZs) will be established around impulsive acoustic sources (
• 500 m EZ for North Atlantic right whales for use of impulsive acoustic sources (
• 100 m EZ for all other marine mammals for use of impulsive acoustic sources (
If a marine mammal is detected approaching or entering the EZs during the HRG survey, the vessel operator will adhere to the shutdown procedures described below to minimize noise impacts on the animals. Pre-start clearance, ramp-up and shutdown procedures (described below) are not required during HRG survey operations using only non-impulsive sources, excluding non-impulsive, non-parametric sub-bottom profilers. Pre-clearance and ramp-up, but not shutdown, are required when using non-impulsive, non-parametric sub-bottom profilers. These stated requirements will be included in the site-specific training to be provided to the survey team.
Ørsted will implement a 30-minute pre-start clearance period of the specified EZs prior to the initiation of ramp-up of boomers, sparkers, and non-impulsive, non-parametric sub-bottom profilers. During this period, the EZs will be monitored by the PSOs, using the appropriate visual technology. Ramp-up may not be initiated if any marine mammal(s) is within its respective EZ. If a marine mammal is observed within an EZ during the pre-start clearance period, ramp-up may not begin until the animal(s) has been observed exiting its respective EZ or until an additional time period has elapsed with no further sighting (
When technically feasible, a ramp-up procedure will be used for boomers, sparkers, and non-impulsive, non-parametric sub-bottom profilers capable of adjusting energy levels at the start or re-start of survey activities. The ramp-up procedure will be used at the beginning of HRG survey activities in order to provide additional protection to marine mammals in the Survey Area by allowing them to vacate the area prior to the commencement of survey equipment operation at full power.
A ramp-up will begin with the powering up of the smallest acoustic HRG equipment at its lowest practical power output appropriate for the survey. When technically feasible, the power will then be gradually turned up and other acoustic sources will be added.
Ramp-up activities will be delayed if a marine mammal(s) enters its respective EZ, and may only recommence if the animal has been observed exiting its respective EZ or until an additional time period has elapsed with no further sighting (
Activation of survey equipment through ramp-up procedures may not occur when visual observation of the pre-clearance zone is not expected to be effective (
An immediate shutdown of boomers and sparkers will be required if a marine mammal is sighted entering or within its respective EZ. No shutdown is required for surveys operating only non-impulsive acoustic sources (including non-parametric sub-bottom profilers). The vessel operator must comply immediately with any call for shutdown by the Lead PSO. Any disagreement between the Lead PSO and vessel operator should be discussed only after shutdown has occurred. Subsequent restart of the survey equipment can be initiated if the animal has been observed exiting its respective EZ or after an additional time period has elapsed since the observation (
If a species for which authorization has not been granted, or, a species for which authorization has been granted but the authorized number of takes have been met, approaches or is observed within the Level B harassment zone (54 m, non-impulsive; 141 m impulsive), shutdown will occur.
If the acoustic source is shut down for reasons other than mitigation (
The shutdown requirement is waived for small delphinids of the following genera:
Vessel strike avoidance measures include, but are not limited to, the following, except under circumstances when complying with these measures would put the safety of the vessel or crew at risk:
• All vessel operators and crews must maintain a vigilant watch for all protected species and slow down, stop their vessel, or alter course, as appropriate and regardless of vessel size, to avoid striking any protected species. A visual observer aboard the vessel must monitor a vessel strike avoidance zone around the vessel (distances stated below). Visual observers monitoring the vessel strike avoidance zone may be third-party observers (
• All vessels must observe a 10-knot speed restriction in specific areas designated by NMFS for the protection of North Atlantic right whales from vessel strikes: Any dynamic management areas (DMAs) when in effect and the Mid-Atlantic SMAs (from November 1 through April 30). See
• Vessel speeds must also be reduced to 10 knots or less when any large whale, mother/calf pairs, pods, or large assemblages of cetaceans are observed near a vessel.
• All vessels must maintain a minimum separation distance of 500 m from North Atlantic right whales. If a whale is observed but cannot be confirmed as a species other than a right whale, the vessel operator must assume that it is a right whale and take appropriate action.
• All vessels must maintain a minimum separation distance of 100 m from sperm whales and all other baleen whales.
• All vessels must, to the maximum extent practicable, attempt to maintain a minimum separation distance of 50 m from all other marine mammals, with an understanding that at times this may not be possible (
• When protected species are sighted while a vessel is underway, the vessel shall take action as necessary to avoid violating the relevant separation distance (
• These requirements do not apply in any case where compliance would create an imminent and serious threat to a person or vessel or to the extent that a vessel is restricted in its ability to maneuver and, because of the restriction, cannot comply.
Ørsted will limit to three the number of survey vessels that will operate concurrently from January through May within the Lease Areas (OSC-A 0486/0517, OCS-A 0487, and OCS-A 500) and ECR Area north of the Lease Areas up to, but not including, coastal and bay waters. Ørsted will operate either a single vessel, two vessels concurrently or, for short periods, no more than three survey vessels concurrently in the Survey Area from January through May, when North Atlantic right whale densities are high (Roberts 2020). This practice will help to reduce the number of right whale takes and minimize the extent to which right whales may be exposed to project noise in a day.
Between watch shifts, members of the monitoring team will consult NOAA Fisheries North Atlantic right whale reporting systems for the presence of right whales throughout survey operations. The Survey Area occurs near the SMAs located off the coast of Rhode Island (Block Island Sounds SMA) and at the entrance to New York Harbor (New York Bight SMA). If survey vessels transit through these SMAs, they must adhere to the seasonal mandatory speed restrictions from November 1 through April 30. Throughout all survey operations, Ørsted will monitor NOAA Fisheries North Atlantic right whale reporting systems for the establishment of a DMA. If NOAA Fisheries should establish a DMA in the Survey Area, the vessels will abide by speed restrictions in the DMA per the lease condition.
Based on our evaluation of the required measures, as well as other measures considered by NMFS, NMFS has determined that these mitigation measures provide the means of effecting the least practicable impact on marine mammal species or stocks and their habitat, paying particular attention to rookeries, mating grounds, and areas of similar significance.
In order to issue an IHA for an activity, Section 101(a)(5)(D) of the MMPA states that NMFS must set forth requirements pertaining to the monitoring and reporting of such taking. The MMPA implementing regulations at 50 CFR 216.104 (a)(13) indicate that requests for authorizations must include the suggested means of accomplishing the necessary monitoring and reporting that will result in increased knowledge of the species and of the level of taking or impacts on populations of marine mammals that are expected to be present in the action area. Effective reporting is critical both to compliance as well as ensuring that the most value is obtained from the required monitoring.
Monitoring and reporting requirements prescribed by NMFS should contribute to improved understanding of one or more of the following:
• Occurrence of marine mammal species or stocks in the area in which take is anticipated (
• Nature, scope, or context of likely marine mammal exposure to potential stressors/impacts (individual or cumulative, acute or chronic), through better understanding of: (1) Action or environment (
• Individual marine mammal responses (behavioral or physiological) to acoustic stressors (acute, chronic, or cumulative), other stressors, or cumulative impacts from multiple stressors.
• How anticipated responses to stressors impact either: (1) Long-term fitness and survival of individual marine mammals; or (2) populations, species, or stocks.
• Effects on marine mammal habitat (
• Mitigation and monitoring effectiveness.
Visual monitoring will be performed by qualified, NMFS-approved PSOs, the
The PSOs will be responsible for monitoring the waters surrounding each survey vessel to the farthest extent permitted by sighting conditions, including EZs, during all HRG survey operations. PSOs will visually monitor and identify marine mammals, including those approaching or entering the established EZs during survey activities. It will be the responsibility of the Lead PSO on duty to communicate the presence of marine mammals as well as to communicate the action(s) that are necessary to ensure mitigation and monitoring requirements are implemented as appropriate.
During all HRG survey operations (
PSOs must be equipped with binoculars and have the ability to estimate distance and bearing to detected marine mammals, particularly in proximity to EZs. Reticulated binoculars must also be available to PSOs for use as appropriate based on conditions and visibility to support the sighting and monitoring of marine mammals. During nighttime operations, night-vision goggle with thermal clip-ons and infrared technology will be used. Position data will be recorded using hand-held or vessel GPS units for each sighting.
During good conditions (
Data on all PSO observations will be recorded based on standard PSO collection requirements. This will include dates, times, and locations of survey operations; dates and times of observations, location and weather; details of marine mammal sightings (
Within 90 days after completion of survey activities, a final technical report will be provided to NMFS that fully documents the methods and monitoring protocols, summarizes the data recorded during monitoring, summarizes the number of marine mammals observed during survey activities (by species, when known), summarizes the mitigation actions taken during surveys (including what type of mitigation and the species and number of animals that prompted the mitigation action, when known), and provides an interpretation of the results and effectiveness of all mitigation and monitoring. Any recommendations made by NMFS must be addressed in the final report prior to acceptance by NMFS.
In addition to the final technical report, Ørsted will provide the reports described below as necessary during survey activities.
In the event that Ørsted personnel discover an injured or dead marine mammal, Ørsted must report the incident to the NMFS Office of Protected Resources (OPR) and the NMFS New England/Mid-Atlantic Stranding Coordinator as soon as feasible. The report must include the following information:
• Time, date, and location (latitude/longitude) of the first discovery (and updated location information if known and applicable);
• Species identification (if known) or description of the animal(s) involved;
• Condition of the animal(s) (including carcass condition if the animal is dead);
• Observed behaviors of the animal(s), if alive;
• If available, photographs or video footage of the animal(s); and
• General circumstances under which the animal was discovered.
In the unanticipated event of a ship strike of a marine mammal by any vessel involved in the activities covered by the IHA, Ørsted must report the incident to the NMFS OPR and the NMFS New England/Mid-Atlantic Stranding Coordinator as soon as feasible. The report must include the following information:
• Time, date, and location (latitude/longitude) of the incident;
• Species identification (if known) or description of the animal(s) involved;
• Vessel's speed during and leading up to the incident;
• Vessel's course/heading and what operations were being conducted (if applicable);
• Status of all sound sources in use;
• Description of avoidance measures/requirements that were in place at the time of the strike and what additional measures were taken, if any, to avoid strike;
• Environmental conditions (
• Estimated size and length of animal that was struck;
• Description of the behavior of the marine mammal immediately preceding and following the strike;
• If available, description of the presence and behavior of any other marine mammals immediately preceding the strike;
• Estimated fate of the animal (
• To the extent practicable, photographs or video footage of the animal(s).
NMFS has defined negligible impact as an impact resulting from the specified activity that cannot be reasonably expected to, and is not
To avoid repetition, our analysis applies to all the species listed in Table 1, given that NMFS expects the anticipated effects of the surveys to be similar in nature. NMFS does not anticipate that serious injury or mortality will occur as a result from HRG surveys, even in the absence of mitigation, and no serious injury or mortality is authorized. As discussed in the Potential Effects section, non-auditory physical effects and vessel strike are not expected to occur. We expect that all potential takes would be in the form of short-term Level B behavioral harassment in the form of temporary avoidance of the area or decreased foraging (if such activity was occurring), reactions that are considered to be of low severity and with no lasting biological consequences (
In addition to being temporary, the maximum expected harassment zone around a survey vessel is 141 m; almost half of survey days will include activity with a reduced acoustic harassment zone of 54 m per vessel, producing expected effects of particularly low severity. Consequently, the ensonified area surrounding each vessel is relatively small compared to the overall distribution of the animals in the area and their use of the habitat. Feeding behavior is not likely to be significantly impacted as prey species are mobile and are broadly distributed throughout the Survey Area; therefore, marine mammals that may be temporarily displaced during survey activities are expected to be able to resume foraging once they have moved away from areas with disturbing levels of underwater noise. Because of the temporary nature of the disturbance and the availability of similar habitat and resources in the surrounding area, the impacts to marine mammals and the food sources that they utilize are not expected to cause significant or long-term consequences for individual marine mammals or their populations.
ESA-listed species for which takes are authorized are North Atlantic right, fin, sei, and sperm whales; impacts on these species are anticipated to be limited to lower level behavioral effects. NMFS does not anticipate that serious injury or mortality will occur to ESA-listed species, even in the absence of mitigation, and this authorization does not authorize any serious injury or mortality. The survey activities are not anticipated to affect the fitness or reproductive success of individual animals. Since impacts to individual survivorship and fecundity are unlikely, the survey activities are not expected to result in population-level effects for any ESA-listed species or alter current population trends of any ESA-listed species.
The status of the North Atlantic right whale population is of heightened concern, and merits additional analysis. In July 2020, the International Union for the Conservation of Nature (IUCN) moved the right whale from Endangered to Critically Endangered on the IUCN Red List. An increasing trend in right whale mortalities began in June 2017, primarily in Canada. Overall, preliminary findings support human interactions, specifically vessel strikes and entanglements, as the cause of death for the majority of right whales. The Survey Area includes a biologically important migratory route for right whales (effective March-April and November-December) that extends from Massachusetts to Florida (LeBrecque
The Survey Area includes a fin whale feeding BIA, effective between March and October. The fin whale feeding area is sufficiently large (2,933 km
As noted previously, there are several active UMEs occurring in the vicinity of Ørsted's Survey Area. Elevated humpback whale mortalities have occurred along the Atlantic coast from Maine through Florida since January 2016. Of the cases examined, approximately half had evidence of human interaction (ship strike or entanglement). The UME does not yet provide cause for concern regarding population-level impacts. Despite the UME, the relevant population of humpback whales (the West Indies breeding population, or distinct population segment (DPS)) remains stable at approximately 12,000 individuals.
Beginning in January 2017, elevated minke whale strandings have occurred along the Atlantic coast from Maine through South Carolina, with highest numbers in Massachusetts, Maine, and New York. This event does not provide cause for concern regarding population level impacts, as the likely population abundance is greater than 20,000 whales.
Elevated numbers of harbor seal and gray seal mortalities were first observed in July 2018 and have occurred across Maine, New Hampshire, and Massachusetts. Based on tests conducted so far, the main pathogen found in the seals is phocine distemper virus, although additional testing to identify other factors that may be involved in this UME are underway. The UME does not yet provide cause for concern regarding population-level impacts to any of these stocks. For harbor seals, the population abundance is over 75,000 and annual M/SI (350) is well below PBR (2,006) (Hayes
The required mitigation measures are expected to reduce the number and/or severity of takes by providing animals the opportunity to move away from the sound source throughout the Survey Area before HRG survey equipment reaches full energy, thus preventing animals from being exposed to sound levels that have the potential to cause injury (Level A harassment) or more severe Level B harassment. No Level A harassment is anticipated or authorized.
NMFS expects that takes would be in the form of short-term Level B behavioral harassment by way of brief startling reactions and/or temporary vacating of the area, or decreased foraging (if such activity was occurring)—reactions that (at the scale and intensity anticipated here) are considered to be of low severity, with no lasting biological consequences. Since both the sources and marine mammals are mobile, animals would only be exposed briefly to a small ensonified area that might result in take. Additionally, required mitigation measures would further reduce exposure to sound that could result in more severe behavioral harassment.
In summary and as described above, the following factors primarily support our determination that the impacts resulting from this activity are not expected to adversely affect the species or stock through effects on annual rates of recruitment or survival:
• No mortality or serious injury is anticipated or authorized;
• No Level A harassment (PTS) is anticipated or authorized;
• Foraging success is not likely to be significantly impacted as effects on species that serve as prey species for marine mammals from the survey are expected to be minimal;
• The availability of alternate areas of similar habitat value for marine mammals to temporarily vacate the survey area during the planned survey to avoid exposure to sounds from the activity;
• Take is anticipated to be Level B behavioral harassment, consisting of brief startling reactions and/or temporary avoidance of the Survey Area;
• While the Survey Area is within areas noted as biologically important for North Atlantic right whale migration, the survey activities will occur in such a comparatively small area such that any avoidance of the Survey Area due to survey activities would not affect migration. Seasonal vessel restrictions from January through May will further reduce the potential overall impacts of survey activities on NARWs utilizing habitat in or near the Survey Area. In addition, the mitigation measure to shutdown if a North Atlantic right whale is observed nearing or entering the 500 m EZ would limit any take of the species. Similarly, due to the small footprint of the survey activities in relation to the size of a biologically important area for fin whales' foraging, the survey activities would not affect foraging success of this species; and
• The required mitigation measures, including visual monitoring and shutdowns, are expected to minimize potential impacts to marine mammals.
Based on the analysis contained herein of the likely effects of the specified activity on marine mammals and their habitat, and taking into consideration the implementation of the monitoring and mitigation measures, NMFS finds that the total marine mammal take from the planned activity will have a negligible impact on all affected marine mammal species or stocks.
As noted above, only small numbers of incidental take may be authorized under sections 101(a)(5)(A) and (D) of the MMPA for specified activities other than military readiness activities. The MMPA does not define small numbers and so, in practice, where estimated numbers are available, NMFS compares the number of individuals taken to the most appropriate estimation of abundance of the relevant species or stock in our determination of whether an authorization is limited to small numbers of marine mammals. When the predicted number of individuals to be taken is less than one third of the species or stock abundance, the take is considered to be of small numbers. Additionally, other qualitative factors may be considered in the analysis, such as the temporal or spatial scale of the activities.
We authorize incidental take of fifteen marine mammal stocks. The numbers of marine mammals for which we authorize take, for all species and stocks, are small relative to the relevant stocks or populations (less than 9 percent for all species and stocks) as shown in Table 6. Based on the analysis contained herein of the planned activity (including the mitigation and monitoring measures) and the anticipated take of marine mammals, NMFS finds that small numbers of marine mammals will be taken relative to the population size of all affected species or stocks.
There are no relevant subsistence uses of the affected marine mammal stocks or species implicated by this action. Therefore, NMFS has determined that the total taking of affected species or stocks would not have an unmitigable adverse impact on the availability of such species or stocks for taking for subsistence purposes.
Section 7(a)(2) of the Endangered Species Act of 1973 (16 U.S.C. 1531
To comply with the National Environmental Policy Act of 1969 (NEPA; 42 U.S.C. 4321
This action is consistent with categories of activities identified in Categorical Exclusion B4 of the Companion Manual for NAO 216-6A, which do not individually or cumulatively have the potential for significant impacts on the quality of the human environment and for which we have not identified any extraordinary circumstances that would preclude this categorical exclusion. Accordingly, NMFS has determined that the planned action qualifies to be categorically excluded from further NEPA review.
NMFS has issued an IHA to Ørsted for conducting marine site characterization surveys in coastal waters from New York to Massachusetts, for a period of one year, provided the previously mentioned mitigation, monitoring, and reporting requirements are incorporated.
National Marine Fisheries Service (NMFS), National Oceanic and Atmospheric Administration (NOAA), Commerce.
Notice; issuance of permits and permit modifications.
Notice is hereby given that permits and permit modifications have been issued to the following entities under the Marine Mammal Protection Act (MMPA) and the Endangered Species Act (ESA), as applicable.
The permits and related documents are available for review upon written request via email to
Jennifer Skidmore (Permit No. 23932), Amy Hapeman (Permit Nos. 18238-03, 21111-02, and 23639), Erin Markin (Permit Nos. 23683, 23850, and 23851), Jordan Rutland (Permit No. 23310), and Sara Young (Permit No. 23188); at (301) 427-8401.
Notices were published in the
In compliance with the National Environmental Policy Act of 1969 (42 U.S.C. 4321
As required by the ESA, as applicable, issuance of these permit was based on a finding that such permits: (1) Were applied for in good faith; (2) will not operate to the disadvantage of such endangered species; and (3) are consistent with the purposes and policies set forth in Section 2 of the ESA.
The requested permits have been issued under the MMPA of 1972, as amended (16 U.S.C. 1361
National Marine Fisheries Service (NMFS), National Oceanic and Atmospheric Administration (NOAA), Commerce.
Notice of a public meeting.
The South Atlantic Fishery Management Council (Council) will convene a meeting of the South Atlantic Selectivity Workgroup via webinar to address gear selectivity for fishery stock assessments for species managed by the Council.
The South Atlantic Selectivity Workgroup meeting will be held via webinar on Tuesday, October 27, 2020, from 1 p.m. until 5 p.m.
Chip Collier, Deputy Director for Science, SAFMC; phone: (843) 302-8444 or toll free: (866) SAFMC-10; fax: (843) 769-4520; email:
The South Atlantic Selectivity Workgroup consists of scientists with expertise in selectivity or gears used in fisheries in the South Atlantic region including members of the Council's Scientific and Statistical Committee chosen to participate. The Workgroup will provide recommendations on selectivity for species managed by the Council for consideration in upcoming stock assessments.
Agenda items include:
The meeting is physically accessible to people with disabilities. Requests for auxiliary aids should be directed to the council office (see
16 U.S.C. 1801
National Marine Fisheries Service (NMFS), National Oceanic and Atmospheric Administration (NOAA), Commerce.
Notice of public meeting.
The North Pacific Fishery Management Council (NPFMC) Charter Halibut Management Committee will meet via webconference on October 27, 2020.
The meeting will be held on Tuesday, October 27, 2020 from 9 a.m. to 3 p.m., Alaska time.
The meeting will be a webconference. Join online through the link at
Jim Armstrong, Council staff; phone: (907) 271-2809 and email:
The purpose of the Charter Halibut Management Committee meeting is to identify a range of potential management measures for the Area 2C and Area 3A charter halibut fisheries in 2021 using the management measures in place for 2020 as a baseline. For Area 2C, the baseline management measure includes regulations applicable to charter halibut fishing in all areas, and a daily limit of one fish less than or equal to 45 inches or greater than or equal to 80 inches. For Area 3A, the baseline management measure includes regulations applicable to charter halibut fishing in all areas, no annual limit, a daily limit of two fish, one fish of any size, and a second fish which must be 32 inches or less in length. No days are closed to charter halibut fishing. Committee recommendations will be incorporated into an analysis for Council review in December 2020. The Council will recommend preferred management measures for consideration by the International Pacific Halibut commission at its January 2021 meeting, for implementation in 2021. The agenda is subject to change, and the latest version will be posted at
You can attend the meeting online using a computer, tablet, or smart phone; or by phone only. Connection information will be posted online at:
Public comment letters will be accepted and should be submitted electronically to
16 U.S.C. 1801
National Marine Fisheries Service (NMFS), National Oceanic and Atmospheric Administration (NOAA), Commerce.
Notice of SEDAR 71 South Atlantic Gag Grouper Data and Assessment Webinar.
The SEDAR 71 assessment of the South Atlantic stock of Gag Grouper will consist of a data webinar and a series assessment webinars.
The SEDAR 71 Gag Grouper Data and Assessment Webinar has been scheduled for Wednesday October 28, 2020, from 9 a.m. to 12 p.m. EDT.
Kathleen Howington, SEDAR Coordinator, 4055 Faber Place Drive, Suite 201, North Charleston, SC 29405; phone: (843) 571-4371; email:
The Gulf of Mexico, South Atlantic, and Caribbean Fishery Management Councils, in conjunction with NOAA Fisheries and the Atlantic and Gulf States Marine Fisheries Commissions, have implemented the Southeast Data, Assessment and Review (SEDAR) process, a multi-step method for determining the status of fish stocks in the Southeast Region. SEDAR is a three-step process including: (1) Data Workshop; (2) Assessment Process utilizing webinars; and (3) Review Workshop. The product of the Data Workshop is a data report which compiles and evaluates potential datasets and recommends which datasets are appropriate for assessment analyses. The product of the Assessment Process is a stock assessment report which describes the fisheries, evaluates the status of the stock, estimates biological benchmarks, projects future population conditions, and recommends research and monitoring needs. The assessment is independently peer reviewed at the Review Workshop. The product of the Review Workshop is a Summary documenting panel opinions regarding the strengths and weaknesses of the stock assessment and input data. Participants for SEDAR Workshops are appointed by the Gulf of Mexico, South Atlantic, and Caribbean Fishery Management Councils and NOAA Fisheries Southeast Regional Office, Highly Migratory Species Management Division, and Southeast Fisheries Science Center. Participants include: Data collectors and database managers; stock assessment scientists, biologists, and researchers; constituency representatives including fishermen, environmentalists, and non-governmental organizations (NGOs); international experts; and staff of Councils, Commissions, and state and federal agencies.
The items of discussion at the SEDAR 71 Gag Grouper Data and Assessment Webinar are as follows:
Although non-emergency issues not contained in this agenda may come before this group for discussion, those issues may not be the subject of formal action during this meeting. Action will be restricted to those issues specifically identified in this notice and any issues arising after publication of this notice that require emergency action under section 305(c) of the Magnuson-Stevens Fishery Conservation and Management Act, provided the public has been notified of the intent to take final action to address the emergency.
This meeting is accessible to people with disabilities. Requests for auxiliary aids should be directed to the South Atlantic Fishery Management Council office (see
The times and sequence specified in this agenda are subject to change.
16 U.S.C. 1801
National Marine Fisheries Service (NMFS), National Oceanic and Atmospheric Administration (NOAA), Commerce.
Notice of availability.
NMFS is publishing its final 2020 List of Foreign Fisheries (LOFF), as required by the regulation implementing the Fish and Fish Product Import Provisions of the Marine Mammal Protection Act (MMPA). The final 2020 LOFF reflects new information received during the comment period on interactions between commercial fisheries exporting fish and fish products to the United States and marine mammals and updates and revises the draft 2020 LOFF. NMFS classified commercial fisheries in this final 2020 LOFF into one of two categories, either “export” or “exempt,” based upon frequency and likelihood of incidental mortality and serious injury of marine mammals likely to occur incidental to each fishery. The classification of a fishery on the final 2020 LOFF determines which regulatory requirements will be applicable to that fishery for it to receive a Comparability Finding necessary to export fish and fish products to the United States from that fishery. The final 2020 LOFF can be found at:
Nina Young, NMFS IASI at
In August 2016, NMFS published a final rule (81 FR 54390; August 15, 2016) implementing the fish and fish product import provisions (section 101(a)(2)) of the MMPA (hereafter referred to as the MMPA Import Provisions Rule). This rule established conditions for evaluating a harvesting nation's regulatory programs to address incidental and intentional mortality and serious injury of marine mammals in its fisheries producing fish and fish products exported to the United States. Specifically, fish or fish products cannot be imported into the United States from commercial fishing operations that result in the incidental mortality or serious injury of marine mammals in excess of United States standards. The MMPA Import Provisions Rule established an initial five-year exemption period during which the import prohibitions do not apply. The exemption period allows time for harvesting nations to develop regulatory programs to mitigate marine mammal bycatch in their respective fisheries.
After the exemption period, fish and fish products identified by the Assistant Administrator as from export and exempt fisheries in the LOFF can only be imported into the United States if the harvesting nation has applied for and received a Comparability Finding from NMFS. The 2016 final rule established procedures that a harvesting nation must follow and conditions it must meet to receive a Comparability Finding for a fishery. The rule also established provisions for intermediary nations to ensure that such nations do not import and re-export to the United States fish or fish products that are subject to an import prohibition.
This final 2020 LOFF (see
Based on information provided by nations, industry, the public, and other readily available sources, NMFS identified nations with commercial fishing operations that export fish and fish products to the United States and classified each of those fisheries based on their frequency of marine mammal interactions as either “exempt” or “export” fisheries (see Definitions below). The entire list of these export and exempt fisheries, organized by nation (or economy), constitutes the LOFF.
Under the MMPA, the United States prohibits imports of commercial fish or fish products caught in commercial fishing operations resulting in the incidental killing or serious injury (bycatch) of marine mammals in excess of United States standards (16 U.S.C. 1371(a)(2)). NMFS published regulations implementing these statutory requirements of the MMPA in August 2016 (81 FR 54390; August 15, 2016) (MMPA Import Provisions Rule). The regulations apply to any foreign nation with fisheries exporting fish and fish products to the United States, either directly or through an intermediary nation.
The LOFF lists foreign commercial fisheries that export fish and fish products to the United States and that have been classified as either “export” or “exempt” based on the frequency and likelihood of interactions or incidental mortality and serious injury of a marine mammal. All fisheries that export to the United States must be included on the LOFF by January 1, 2022. A harvesting nation must apply for and receive a Comparability Finding for each of its export and exempt fisheries on the LOFF to continue to export fish and fish products to the United States from those fisheries beginning January 1, 2022.
The classifications of “exempt fishery” or “export fishery” determine the criteria that a nation's fishery must meet to receive a Comparability Finding for that fishery. A Comparability Finding is required for both exempt and export fisheries, but the criteria for exempt and export fisheries differ.
For an exempt fishery, the criteria to receive a Comparability Finding are limited to conditions related only to the prohibition of intentional killing or injury of marine mammals (see 50 CFR 216.24(h)(6)(iii)(A)). For an export fishery, the criteria to receive a Comparability Finding include the conditions related to the prohibition of intentional killing or injury of marine mammals (see 50 CFR 216.24(h)(6)(iii)(A)) and the requirement to develop and maintain regulatory programs comparable in effectiveness to the U.S. regulatory program for reducing incidental marine mammal bycatch (see 50 CFR 216.24(h)(6)). The definitions of “exempt fishery” and “export fishery” are stated in the Definitions below.
The LOFF contains only those commercial fishing operations authorized by the harvesting nation to fish and export fish and fish products to the United States. 50 CFR 18.3 defines “commercial fishing operation” as the lawful harvesting of fish from the marine environment for profit as part of an on-going business enterprise. This does not include sport-fishing activities, whether or not carried out by charter boat or otherwise, and whether or not the fish caught are subsequently sold. At 50 CFR 229.2, “commercial fishing operation” is defined as the catching, taking, or harvesting of fish from the marine environment (or other areas where marine mammals occur) that results in the sale or barter of all or part of the fish harvested. The term includes licensed commercial passenger fishing vessel (as defined in section 216.3 of 50 CFR 216) activities and aquaculture activities. Per the application of these two definitions, the LOFF contains export and exempt fisheries that are engaged in the lawful and authorized commercial harvest of fish from the marine environment. The term “commercial fishing operation” is used in the definitions of exempt fishery and export fishery (see Definitions below).
Information on the frequency or likelihood of interactions or bycatch in most foreign fisheries was lacking or incomplete. Absent such information, NMFS used readily available information, noted below, to classify fisheries, which included drawing analogies to similar U.S. fisheries and gear types interacting with similar marine mammal stocks. Where no analogous fishery or fishery information existed, NMFS classified the commercial fishing operation as an export fishery until information becomes available to properly classify the fishery. Henceforth, in the year prior to the year in which a determination is required on a Comparability Finding application (
A Comparability Finding is a finding by NMFS that the harvesting nation has implemented a regulatory program for an export or exempt fishery that has met the applicable conditions specified in the regulations (see 50 CFR 216.24(h)) subject to the additional considerations for Comparability Findings set out in the regulations. A Comparability Finding is required for a nation to export fish and fish products to the United States. To receive a Comparability Finding for an export fishery, the harvesting nation must maintain a regulatory program with respect to that fishery that is comparable in effectiveness to the U.S. regulatory program for reducing incidental marine mammal bycatch. This requirement may be met by developing, implementing, and maintaining a regulatory program that includes measures that are comparable, or that effectively achieve comparable results to the regulatory program under which the analogous U.S. fishery operates.
The definition of an export fishery can be found in the implementing regulations for section 101(a)(2) of the MMPA (see 50 CFR 216.3). NMFS considers export fisheries to be functionally equivalent to Category I and II fisheries under the U.S. regulatory program (see definitions at 50 CFR 229.2).
NMFS defines “export fishery” as a foreign commercial fishing operation determined by the Assistant Administrator to be the source of exports of commercial fish and fish products to the United States and that has more than a remote likelihood of incidental mortality and serious injury of marine mammals in the course of its commercial fishing operations.
Where reliable information on the frequency of incidental mortality and serious injury of marine mammals caused by the commercial fishing operation is not provided by the harvesting nation, the Assistant Administrator may determine the likelihood of incidental mortality and serious injury as more than remote by evaluating information concerning factors such as fishing techniques, gear used, methods used to deter marine mammals, target fish species, seasons and areas fished, qualitative data from logbooks or fisher reports, stranding data, the species and distribution of marine mammals in the area, or other factors.
Commercial fishing operations not specifically identified in the current LOFF as either exempt or export fisheries are deemed to be export fisheries until a revised LOFF is posted, unless the harvesting nation provides the Assistant Administrator with information to properly classify a foreign commercial fishing operation not on the LOFF. To properly classify the foreign commercial fishing operation, the Assistant Administrator may also request additional information from the harvesting nation, as well as consider other relevant information about such commercial fishing operations and the frequency of incidental mortality and serious injury of marine mammals.
The definition of exempt fishery can be found in the implementing regulations for section 101(a)(2) of the MMPA (see 50 CFR 216.3). NMFS considers “exempt” fisheries to be functionally equivalent to Category III fisheries under the U.S. regulatory program (see definitions at 50 CFR 229.2).
NMFS defines an exempt fishery as a foreign commercial fishing operation determined by the Assistant Administrator to be the source of exports of commercial fish and fish products to the United States and that has a remote likelihood of, or no known, incidental mortality and serious injury of marine mammals in the course of commercial fishing operations. A commercial fishing operation that has a remote likelihood of causing incidental mortality and serious injury of marine mammals is one that, collectively with other foreign fisheries exporting fish and fish products to the United States, causes the annual removal of:
(1) Ten percent or less of any marine mammal stock's bycatch limit, or
(2) More than ten percent of any marine mammal stock's bycatch limit, yet that fishery by itself removes one percent or less of that stock's bycatch limit annually, or
(3) Where reliable information has not been provided by the harvesting nation on the frequency of incidental mortality and serious injury of marine mammals caused by the commercial fishing operation, the Assistant Administrator may determine whether the likelihood of incidental mortality and serious injury is “remote” by evaluating information such as fishing techniques, gear used, methods to deter marine
A foreign fishery will not be classified as an exempt fishery unless the Assistant Administrator has reliable information from the harvesting nation, or other information, to support such a finding.
NMFS organized the LOFF by harvesting nation (or economy). The LOFF may include “exempt fisheries” and “export fisheries” for each harvesting nation. Each fishery is defined by target species, geographic location of harvest, gear-type or a combination thereof. Where known, the LOFF also includes a list of the marine mammals that co-occur with the fishery, a list of marine mammals that interact (
NMFS reviewed and considered documentation provided by nations during the development of the 2017 LOFF, the draft 2020 LOFF, and the 2019 Progress Report. NMFS also reviewed and considered the information provided by the public and other available sources of information, including, but not limited to: Fishing vessel records; reports of on-board fishery observers; information from off-loading facilities, port-side government officials, enforcement entities and documents, transshipment vessel workers and fish importers; government vessel registries; RFMO or intergovernmental agreement documents, reports, national reports, and statistical document programs; appropriate catch certification programs; Food and Agricultural Organization (FAO) documents and profiles; and published literature and reports on commercial fishing operations with intentional or incidental mortality and serious injury of marine mammals. NMFS has used the available information to classify each fishery as “export” or “exempt” to develop the LOFF.
The LOFF includes a column consisting of a list of marine mammals that co-occur with the commercial fisheries, that is, the distribution of marine mammals that overlaps with the distribution of commercial fishing activity. The marine mammals that co-occur with a fishery may or may not interact with or be incidentally or intentionally killed or injured in the fishery. The LOFF also includes a list of marine mammal species and/or stocks incidentally or intentionally killed or injured in a commercial fishing operation. The list of species and/or stocks incidentally or intentionally killed or injured includes “serious” and “non-serious” documented injuries and interactions with fishing gear, including interactions such as depredation.
NMFS reviewed information submitted by nations (for inclusion in the 2017 LOFF, draft 2020 LOFF, and in their 2019 Progress Report) and readily available scientific information including co-occurrence models demonstrating distributional overlap of commercial fishing operations and marine mammals to determine which species or stocks to include as incidentally or intentionally killed or injured in or interacting with a fishery. NMFS also reviewed, when available, injury determination reports, bycatch estimation reports, observer data, logbook data, disentanglement network data, fisher self-reports, and the information referenced in the definition of exempt and export fishery (see Definitions above or 50 CFR 216.3).
NMFS will re-evaluate foreign commercial fishing operations and publish in the
After publication of the LOFF, if a nation wishes to commence exporting fish and fish products to the United States from a fishery not currently included in the LOFF, that fishery will be classified as an export fishery until the next LOFF is published and will be provided a provisional Comparability Finding for a period not to exceed twelve months. If a harvesting nation can provide the reliable information necessary to classify the commercial fishing operation at the time of the request for a provisional Comparability Finding or prior to the expiration of the provisional Comparability Finding, NMFS will classify the fishery in accordance with the definitions. The provisions for new entrants are discussed in the regulations implementing section 101(a)(2) of the MMPA (see 50 CFR 216.24(h)(8)(vi)).
To change a fishery's classification, nations or other interested stakeholders must provide observer data, logbook summaries (preferably over a five-year period), or reports that specifically indicate the presence or absence of marine mammal interactions, quantify such interactions wherever possible, provide additional information on the location and operation of the fishery, details about the gear type and how it is used, maps showing the distribution of marine mammals and the operational area of the fishery, information regarding marine mammal populations and the biological impact of that fishery on those populations, and/or any other documentation that clearly demonstrates that a fishery is either an export or exempt fishery. Data from independent onboard observer programs documenting marine mammal interaction and bycatch is preferable and is given higher consideration than self-reports, logbooks, fishermen interviews, or sales tickets or dockside interviews. Such data can be summarized and averaged over at least a five-year period and include information on the observer program including the percent coverage, number of vessels, and sets or hauls observed. Nations should also indicate whether bycatch estimates from observer data are observed minimum counts or extrapolated estimates for the entire fishery. Nations submitting logbook information should include details about the reporting system, including examples of forms and requirements for reporting. Nations may make formal
If estimates of the total incidental mortality and serious injury were available and a bycatch limit calculated for a marine mammal stock, NMFS used the quantitative and tiered analysis to classify foreign commercial fishing operations as export or exempt fisheries under the category definition within 50 CFR 229.2 and the procedures used to categorize U.S. fisheries as Category I, II, or III, at
For most commercial fisheries, NMFS is still lacking detail regarding marine mammal interactions and/or lacking quantitative information on the frequency of interactions. Where nations provided estimates of bycatch or NMFS found estimates of bycatch in published literature, national reports, or through other readily available sources, NMFS classified the fishery as an export fishery if the information indicated that there was a likelihood that the mortality and serious injury was more than remote.
As bycatch estimates are lacking for most fisheries, NMFS relied on three considerations to assess the likelihood of bycatch or interaction with marine mammals, including: (1) Co-occurrence, the spatial and seasonal distribution and overlap of marine mammals and fishing operations as a measure of risk (Komoroske & Lewison 2015; FAO 2010; Watson
When no analogous gear, fishery, or fishery information existed, or insufficient information was provided by the nation and information was not readily available, NMFS classified the commercial fishing operation as an export fishery per the definition of “export fishery” at 50 CFR 216.3. These fishing operations will remain classified as export fisheries until the harvesting nation provides the reliable information necessary to classify properly the fishery or, in the course of revising the LOFF, such information becomes readily available to NMFS.
Due to a lack of information about marine mammal bycatch, NMFS used gear types to classify fisheries as either export or exempt. The detailed rationale for these classifications by gear type were provided in the
NMFS classified as export all trap and pot fisheries because the risk of entanglement in float/buoy lines and groundlines is more than remote, especially in areas of co-occurrence with large whales. While many nations assert that marine mammals cannot enter the trap and become entangled, the risk is not from the trap but from the surface buoy line and the groundlines (lines that connect the traps). These lines represent an entanglement risk to large whales and some small cetaceans. However, NMFS classified as exempt trap and pot fisheries operating in the Gulf of Mexico and Caribbean due to the low co-occurrence with large whales in this region and an analogous U.S. Category III mixed species and lobster trap/pot fishery operating in the Gulf of Mexico and Caribbean. NMFS classifies as exempt small-scale fish, crab, and lobster pot fisheries using mitigation strategies to prevent large whale entanglements, including seasonal closures during migration periods, ropeless fishing, and vertical line acoustic release technology.
NMFS classified as export longline gear and troll line fisheries because the likelihood of marine mammal bycatch is more than remote. However, NMFS classified as exempt longline and troll fisheries with demonstrated bycatch rates that are less than remote or the fishery is analogous (by area, gear type, and target species) to U.S. Category III fishery operating in the area where the fishery occurs. The entanglement rates from marine mammals depredating longline gear is largely unknown. NMFS classifies as exempt snapper/grouper bottom-set longline fisheries operating in the Gulf of Mexico and the Caribbean because they are analogous to U.S. Category III bottom-set longline gear operating in these areas. NMFS also classifies as exempt longline fisheries using a cachalotera system (
NMFS uniformly classified as export all gillnet, driftnet, set net, fyke net, trammel net, and pound net fisheries because the likelihood of marine mammal bycatch in this gear type is more than remote. Few nations provided evidence that the likelihood of marine mammal bycatch in these gillnet and set net fisheries was less than remote. Those that did, demonstrated that the gillnet fishing area of operation did not overlap with marine mammal habitat.
NMFS classified purse seine fisheries as export, unless the fishery is operating under an RFMO that has implemented conservation and management measures prohibiting the intentional encirclement of marine mammals by a purse seine. In those instances, NMFS classifies the purse seine fisheries as exempt because the evidence suggests that, where purse seine vessels do not intentionally set on marine mammals, the likelihood of marine mammal bycatch is generally
NMFS classified as export all trawl fisheries, including bream trawls, pair trawls, and otter trawls, because the likelihood of marine mammal bycatch in this gear type is more than remote, and this gear type often co-occurs with marine mammal stocks. However, the krill trawl fishery operating under the Commission for the Conservation of Antarctic Marine Living Resources (CCAMLR) in subareas 48.1-4 is classified as exempt due to the conservation and management measures requiring marine mammal excluding devices, observer coverage and reporting requirements, and because total estimated marine mammal mortalities are less than ten percent of the bycatch limit/PBR for these pinniped stocks that interact with that fishery.
There are several gear types that NMFS classified as exempt because they are highly selective, have a remote likelihood of marine mammal bycatch, or have analogous U.S. Category III fisheries. These gear types are: hand collection, diving, manual extraction, hand lines, hook and line, jigs, dredges, clam rakes, beach-operated hauling nets, ring nets, beach seines, small lift nets, cast nets, small bamboo weir, and floating mats for roe collection.
NMFS classified Danish seine fisheries as exempt based on the remote likelihood of marine mammal bycatch because of a lack of documented interactions with marine mammals. The exception is any Danish seine fisheries with documentary evidence of marine mammal interactions, which NMFS classified as export.
Finally, NMFS classified as exempt most forms of aquaculture, including lines and floating cages, unless documentary evidence indicates marine mammal interactions or entanglement, particularly of large whale entanglement in aquaculture seaweed or shellfish lines, or in cases where nations permit aquaculture facilities to intentionally kill or injure marine mammals.
The 2020 final LOFF is composed of 953 exempt fisheries and 1852 export fisheries from 131 nations (or economies). Eighty-five nations submitted updates to their draft 2020 LOFF, which NMFS used to create the final 2020 LOFF. The following nations are predominantly intermediary nations: Aruba, Belarus, Monaco, and Switzerland.
The 2017 LOFF, the draft 2020 LOFF, the final 2020 LOFF, as well as a list of intermediary nations (or economies) and their associated products and sources of those products, and a list of fisheries and nations where the rule does not apply, can be found at:
More than 20 nations (or economies)
NMFS was able to confirm that approximately 65 nations are not exporting or do not intend to export fish or fish products to the United States in the coming years: Afghanistan, Algeria, Andorra, Angola, Anguilla, Azerbaijan, Bermuda, Bhutan, Bolivia, Bosnia and Herzegovina, Botswana, Burkina Faso, Central African Republic, Cayman Islands, Chad, Congo, Cuba, Czech Republic, Djibouti, Dominica, East Timor, Equatorial Guinea, Eritrea, Ethiopia, Gabon, Gaza Strip, Georgia, Gibraltar, Guadeloupe, Guinea-Bissau, Iraq, Kosovo, Kuwait, Kyrgyzstan, Lebanon, Lesotho, Liechtenstein, Luxembourg, Malawi, Mali, Martinique, Mongolia, Monserrat, Montenegro, Nauru, Nepal, Netherlands Antilles, Niger, Niue, North Macedonia, North Korea, Paraguay, Qatar, San Marino, Serbia, Sudan, Swaziland, Syria, Tajikistan, Tokelau, Tuvalu, Uzbekistan, West Bank, Western Sahara, Zambia, and Zimbabwe.
In the course of updating the draft2020 LOFF, NMFS added and/or re-confirmed that the following nations were exporting to the United States to identify if they should be included on the LOFF and, if so, how to list their fisheries: Albania, Aruba, Belarus, Jordan, Libya, Lithuania, Slovakia, Somalia, St. Lucia, Togo, and Yemen. NMFS continues to work with Burundi, British Virgin Islands, Cambodia, French Guiana, Kazakhstan, Laos, Moldova, and Rwanda.
NMFS urges nations to examine their exports to the United States over the last two decades and include all fisheries or processors and processed products which have, are, or in the future may be the source of fish and fish products exported to the United States. To ensure that no fisheries or processed products are overlooked in this process, nations should be as inclusive as possible. Nations or other entities should provide all the documentation and applicable references necessary to support any proposed modifications to the fisheries on the LOFF. If any nation on these lists intends to export fish and fish products to the United States, they should contact NMFS to ensure their fisheries are on the LOFF and that they apply for and receive a Comparability Finding.
Approximately 55 nations (or economies) did not update the information in their LOFF. These nations (or economies) include: Antigua and Barbuda, Armenia, Bahrain, Barbados, Benin, British Virgin Islands, Brunei, Cameroon, Cape Verde, Costa Rica, Dominican Republic, Egypt, Ghana, Grenada, Guatemala, Guinea, Haiti, Israel, Ivory Coast, Jamaica, Jordan, Kazakhstan, Kenya, Kiribati, Liberia, Libya, Madagascar, Malta, Mauritania, Mauritius, Mexico, Mozambique, Namibia, Papua New Guinea, Romania, Samoa, Senegal, Seychelles, Sierra Leone, Slovakia, Solomon Islands, Somalia, South Africa, St. Kitts and Nevis, St. Lucia, St. Vincent and the Grenadines, Suriname, Tanzania, Togo, Tunisia, Turks and Caicos Islands, Uganda, United Arab Emirates, Vanuatu, and Yemen. As a result, the fishery classifications for these nations (or economies) for the most part remain unchanged from the draft2020 LOFF. It is uncertain what impact disruptions to government services or other extenuating
Nations updated their draft2020 LOFF through the NMFS International Affairs Information Capture and Reporting System (IAICRS). The IAICRS enables NMFS to achieve greater consistency and standardization in the reporting of target species, gear types, area of operation, and marine mammal interactions. Nations were instructed to revise their fisheries information to reflect their fishery management regime. Throughout the exemption period, harvesting nations continued to update and refine their LOFF. These modifications continue to improve the quantity, quality, consistency, and accuracy of the final 2020 LOFF. A record of all modifications are retained within the IAICRS.
Harvesting nations undertook the following modifications:
• Linked exported seafood products to specific fisheries and identified the target (and associated non-target) species of those fisheries;
• aggregated multi-species fisheries into one fishery, as appropriate;
• updated gear types based on the FAO definitions of fishing gear, grouped by categories, in accordance with the FAO-recommended classification system, the International Standard Statistical Classification of Fishing Gear (ISSCFG);
• updated the area of operation using the FAO major fishing areas and subareas, and the nation's management areas within their EEZ within those FAO fishing subareas;
• eliminated fisheries that were solely for domestic consumption and added fisheries that export fish and fish products or intend in the future to export such products to the United States;
• updated their marine mammal abundance estimates;
• updated their marine mammal bycatch limits;
• updated their marine mammal bycatch estimates for some of their fisheries on the LOFF, including adding additional years of data (
• updated bycatch estimates including information on the number of marine mammals killed, injured, and released alive in the fishery.
NMFS maintains that the fisheries on the LOFF should reflect the commercial fisheries authorized by the harvesting nation, according to their fishery management system, to commercially fish and export fish and fish products to the United States. A list of commercial fisheries that were deleted from or added to the LOFF and modifications to the list of marine mammals that interact with fisheries that were retained on the LOFF can be found at:
After harvesting nations revised the LOFF, NMFS reviewed fisheries and identified gear types indicated in a fishery that should be classified as an export fishery rather than as an exempt fishery, or vice versa. NMFS reclassified such fisheries from export to exempt or from exempt to export, as appropriate. A list of commercial fisheries with revised classifications can be found at:
Finally, NMFS requested that nations update their list of marine mammals that co-occur with the fishery and specifically identify which marine mammals co-occur or overlap with commercial fishing operations from those that potentially or do interact with the fishery. This resulted in nations (such as Greenland, Turkey, and Cook Islands) revising their marine mammal lists to remove out-of-habitat marine mammals (
The final 2020 LOFF is the last LOFF prior to the deadline for submission of Comparability Finding applications by nations. The 2020 LOFF will be the foundation for all responses that nations must provide as part of their Comparability Finding application.
Several nations undertook significant revisions to their LOFF. These revisions include analysis of fishery bycatch compared to the bycatch limit to demonstrate a remote likelihood of bycatch, comparative analysis of fisheries with analogous U.S. domestic fisheries, and modification to their list of co-occurring marine mammals. Following is a summary of those changes. The changes to each fishery can be found at
Canadian net pen finfish aquaculture facilities without a history of marine mammal incidental or intentional mortality were reclassified as exempt fisheries. The reclassification was based on a comparison to U.S. salmon aquaculture operations. The U.S. salmon net pen aquaculture facilities are classified as Category III. Canadian net pen aquaculture is known to have an equally low likelihood of marine mammal interactions, and intentional killing of marine mammals has recently been banned in Canada. The Minister of the Department of Fisheries and Oceans Canada (DFO) notified Canadian aquaculture operators on March 22, 2019, that the DFO would cease to authorize the lethal removal of nuisance seals effective immediately. At the same time, the DFO notified industry of its intention to prohibit this activity in regulation prior to 2022. Additionally, the Canadian Industry Alliance (CAIA) stated their members' commitment to “no intentional mammal kill practices in [our] seafood farming operations within Canada,” as well as their commitment to “non-lethal and non-acoustic deterrence methods” for marine mammals. The DFO has initiated the regulatory process to amend the Marine Mammal Regulations (MMR) and the Pacific Aquaculture Regulations (PAR) to remove regulatory provisions allowing aquaculture operators to use lethal force on marine mammals, with the exception of cases where there is an imminent threat to human life or humane dispatch of a seriously injured animal.
Canada also has regulatory mechanisms in place that require the immediate notification of marine mammal mortality or serious injury by aquaculture operators. The MMR, which apply on the east coast, and the PAR Conditions of License in British Columbia both stipulate that the DFO must be immediately notified of marine mammal mortalities. Additionally, aquaculture operators are required under Marine Mammal Management Plans or Farm Management Plans to have marine mammal mitigation measures in place. These plans can describe non-lethal marine mammal deterrence methods, such as anti-predatory netting. Additionally, the DFO has undertaken a study of marine
Additionally, NMFS reclassified as exempt Canadian purse seine, tuck seine and bar seine fisheries. As stated in the 2020 draft LOFF (85 FR 15116, March 17, 2020), if any nation demonstrated that it had implemented a measure prohibiting the intentional encirclement of marine mammals by a purse seine vessel, that fishery would be designated as exempt, absent evidence that it continued to incidentally kill or injure marine mammals. In 2019, Canada implemented a measure under conditions of licenses prohibiting the encirclement of marine mammals in Atlantic purse seine, tuck seine, and bar seine fisheries. These fisheries operate in the Atlantic Regions and have a remote likelihood of marine mammal bycatch, as determined based on fishery monitoring (≥5 percent observer coverage and/or ≥5 percent electronic monitoring). These fisheries have either no documented marine mammal bycatch over at least five fishing seasons, or individual bycatch levels <1 percent of bycatch limit and cumulative fishery bycatch levels <10 percent of the bycatch limit; prohibit intentional killing of marine mammals; have mandatory reporting of marine mammal interactions; and are analogous with U.S. Category III fisheries.
NMFS also reclassified several other fisheries based on their having a remote likelihood of marine mammal bycatch and being analogous to U.S. Category III fisheries. The fisheries that were reclassified can be found at:
Chile's LOFF had an exhaustive list of marine mammal populations identified as co-occurring with its fisheries. Chile's initial approach was to use the International Union for Conservation of Nature (IUCN) data on geographic distribution to identify all marine mammals in Chilean waters regardless of whether they co-occurred with the fishery listed on the LOFF. After NMFS's technical consultations with Chile, Chile revised the list to reflect only marine mammal populations that actually co-occur or interact with its fisheries on the LOFF. Chile held workshops with marine mammal experts and reviewed the scientific literature to identify, on a precautionary basis, marine mammal species or stocks whose distribution overlaps with areas where fishing operations occur or that have some type of direct interaction with fisheries on the LOFF.
The final 2020 LOFF is again organized by nation, and has listed the exempt and export fisheries for each nation. This list is organized by columns contains the following information. “Target Species or Product” is a list of the target species and the non-target species associated with that exempt or export fishery. For standardization purposes, this list includes common and scientific names for the fishery's target and non-target species.
“Gear Type” is the list of fishing gears used to harvest the target species. As previously discussed, the gears are designated according to the FAO definitions of fishing gear and are grouped by categories in accordance with the FAO-recommended ISSCFG classification system.
“Number of Vessels/Licenses/Participants, Aquaculture Facilities” is an estimate of the number of vessels authorized to fish in this fishery, the number of fishing permits or licenses issued by the nation for vessels, or the number of participants authorized to legally fish or operate in this fishery. In the case of aquaculture, it is the number of facilities authorized by the nation to operate aquaculture operations.
“Area of Operation” is the FAO global fishing area and sub-regional statistical area or division where the fishery operates. Nations may have also included fishery management areas specific to their laws and management structure with the FAO area, division, or subarea.
“Marine Mammal Interactions or Co-occurrence by Group, Species or Stock” is a listing of marine mammal species or stocks of known marine mammals whose distribution overlaps the area of operation of the fishery. This list includes the marine mammal species/stock that may be found in or migrate through a nation's waters, specifically those marine mammals that have a regular and significant co-occurrence with this fishery, depredate on bait or catch, are captured and released alive, or are killed or injured in the fishery. Co-occurrence data is useful to develop risk assessment models in the absence of bycatch estimates.
“Marine Mammal Bycatch Estimates” are the marine mammal species/stocks and the average annual bycatch estimate for that species as provided by the harvesting nation. This list is likely to be a subset of the marine mammal species/stocks listed in the “Marine Mammal Interactions or Co-occurrence by Group, Species or Stock” column.
“RFMO” indicates that the fishery is operating under the jurisdiction of, or adhering to the management measures of, one or several regional fishery management organizations (RFMOs) or arrangements.
For the purposes of identifying intermediary nations, the list of intermediary nations and products include instances where a nation sources raw material from another nation for processing and re-export to the United States, or if the nation is both the harvester and processor of the raw material, or if the fish and fish product is harvested or processed elsewhere and transshipped through that nation's jurisdiction. In addition, the intermediary nation list also identifies whether the specific fish or fish product was harvested in the nation's waters under an “Access/License/Charter Agreement or Bilateral/Permitting Agreement.” Nations have indicated whether the product was harvested by another nation operating under an agreement, and have indicated which nations are actively fishing in its waters for the listed product. If the product was not harvested in a nation's waters, but rather was imported into a nation from another nation for the purposes of processing, that nation indicated which nations provided the product or raw material. If the product was transshipped through a nation's border (
The MMPA Import Provisions do not apply to any land-based or freshwater aquaculture operations, as these
NMFS received ten comment letters on the draft 2020 LOFF (85 FR 15116; March 17, 2020). Several non-governmental organizations (NGOs) and an industry group submitted comments, which are summarized below. Nations provided either comments or substantive changes in the form of updates to their LOFF through the IAICRS, those updates are summarized above.
Several comments received were not germane to the draft LOFF and are not addressed in this section. These comments include references to actions outside the scope of the statutory mandate or actions covered under other rulemakings. Generally, comments from industry and the environmental community were supportive of NMFS's ongoing implementation of the MMPA Import Provisions. Both sectors recognize that the MMPA Import Provisions provide a mechanism to level the playing field for U.S. fishermen while improving fishing practices and the status of marine mammal populations worldwide. Animal Welfare Institute, Center for Biological Diversity, International Fund for Animal Welfare, Natural Resources Defense Council, and Whale and Dolphin Conservation (hereafter referred to as non-governmental organizations or NGOs) submitted extensive comments, which are summarized and responded to below. Comments received on the draft 2020 LOFF are available for review at
NMFS disagrees with these NGO commenters that a Certification of Admissibility must accompany each shipment from a nation. A Certification of Admissibility may only be required in situations where fish or fish products are subject to an import prohibition and the Assistant Administrator, to avoid circumvention of the import prohibition, requires that the same or similar fish and fish products caught or harvested in another fishery of the harvesting nation and not subject to the prohibition be accompanied by a Certification of Admissibility (50 CFR 216.24 (h)(9)(iii)).
As NMFS has reiterated in previous notices and this
Fisheries for toothfish not listed as operating within the CCAMLR Convention Area and being subject to the conservation measures of CCAMLR, are evaluated based on the nation's regulatory program in place for that fishery. Many nations have implemented observer requirements and adhere to CCAMLR conservation and management measures and catch documentation requirements for all toothfish catch, regardless of whether the catch is from the Convention Area or that nation's exclusive economic zone (EEZ). Regarding the United Kingdom South Georgia Island fishery, this fishery is not recorded as operating within the CCAMLR area and the area of operation provided for this fishery does not fully correspond to South Georgia Island. NMFS will follow up with the United Kingdom to make sure this fishery is recorded correctly for the purposes of a Comparability Finding.
Office of Federal Student Aid, Department of Education (ED).
Notice.
In accordance with the Paperwork Reduction Act of 1995, ED is proposing a revision of a currently approved collection.
Interested persons are invited to submit comments on or before December 7, 2020.
To access and review all the documents related to the information collection listed in this notice, please use
For specific questions related to collection activities, please contact Beth Grebeldinger, (202) 377-4018.
The Department of Education (ED), in accordance with the Paperwork Reduction Act of 1995 (PRA) (44 U.S.C. 3506(c)(2)(A)), provides the general public and Federal agencies with an opportunity to comment on proposed, revised, and continuing collections of information. This helps the Department assess the impact of its information collection requirements and minimize the public's reporting burden. It also helps the public understand the Department's information collection requirements and provide the requested data in the desired format. ED is soliciting comments on the proposed information collection request (ICR) that is described below. The Department of Education is especially interested in public comment addressing the following issues: (1) Is this collection necessary to the proper functions of the Department; (2) will this information be processed and used in a timely manner; (3) is the estimate of burden accurate; (4) how might the Department enhance the quality, utility, and clarity of the information to be collected; and (5) how might the Department minimize the burden of this collection on the respondents, including through the use of information technology. Please note that written comments received in response to this notice will be considered public records.
Take notice that the Commission received the following electric corporate filings:
Take notice that the Commission received the following exempt wholesale generator filings:
Take notice that the Commission received the following electric rate filings:
The filings are accessible in the Commission's eLibrary system (
Any person desiring to intervene or protest in any of the above proceedings
eFiling is encouraged. More detailed information relating to filing requirements, interventions, protests, service, and qualifying facilities filings can be found at:
Take notice that the Commission has received the following Natural Gas Pipeline Rate and Refund Report filings:
The filings are accessible in the Commission's eLibrary system (
Any person desiring to intervene or protest in any of the above proceedings must file in accordance with Rules 211 and 214 of the Commission's Regulations (18 CFR 385.211 and 385.214) on or before 5:00 p.m. Eastern time on the specified comment date. Protests may be considered, but intervention is necessary to become a party to the proceeding.
eFiling is encouraged. More detailed information relating to filing requirements, interventions, protests, service, and qualifying facilities filings can be found at:
Take notice that on September 28, 2020, pursuant to Rule 207(a)(2) of the Federal Energy Regulatory Commission's (Commission) Rules of Practice and Procedure, 18 CFR 385.207 (2019), The Hoopa Valley Tribe (HVT) and its wholly-owned entity The Hoopa Valley Public Utilities District (HVPUD) (Petitioner) hereby submits a petition for declaratory order (Petition) requesting that the Commission issue a declaratory order finding that HVT and HVPUD are public utilities that are exempt under section 201(f) of Part II of the Federal Power Act,
Any person desiring to intervene or to protest this filing must file in accordance with Rules 211 and 214 of the Commission's Rules of Practice and Procedure (18 CFR 385.211, 385.214). Protests will be considered by the Commission in determining the appropriate action to be taken, but will not serve to make protestants parties to the proceeding. Any person wishing to become a party must file a notice of intervention or motion to intervene, as appropriate. Such notices, motions, or protests must be filed on or before the comment date. Anyone filing a motion to intervene or protest must serve a copy of that document on the Petitioner.
In addition to publishing the full text of this document in the
The Commission strongly encourages electronic filings of comments, protests and interventions in lieu of paper using the “eFiling” link at
Comment Date: 5:00 p.m. Eastern time on October 28, 2020.
Take notice that on September 21, 2020, and amended on September 24, 2020, UGI LNG, Inc. (UGI) requested that the Federal Energy Regulatory Commission (Commission) grant an extension of time, until June 21, 2021, to complete construction of its Temple Truck Rack Expansion Project (Project) at its Temple liquefied natural gas (LNG) storage facility located in Ontelaunee Township, Berks County, Pennsylvania, as authorized in the October 18, 2018 Order Issuing Certificate (Certificate Order).
UGI states that it submitted its Implementation Plan for the Project in January 2019, but was unable to request notice to proceed with project construction activities until late June of 2019, as the Commission's Division of LNG Facility Review & Inspection required UGI LNG to submit a significant amount of additional information via phone calls and in-person meetings before work could begin on the Project. After submitting its initial request for notice to proceed, UGI submitted supplemental requests for notices to proceed and supplements to its Implementation Plan on July 10, August 16, and September 5, 2019. UGI LNG was granted full authorization to proceed with construction activities on September 18, 2019. In March 2020, UGI stopped work on the Project due to the Novel Coronavirus Disease (COVID-19) pandemic.
UGI states that it intended to request to extend its certificate authorization prior to October 18, 2019, but failed to do so due to an internal administrative oversight. UGI now belatedly requests an additional nine months, or until June 21, 2020, to complete the authorized construction of the Project facilities and make facilities available for service.
This notice establishes a 15-calendar day intervention and comment period deadline. Any person wishing to comment on UGI's request for an extension of time may do so. No reply comments or answers will be considered. If you wish to obtain legal status by becoming a party to the proceedings for this request, you should, on or before the comment date stated below, file a motion to intervene in accordance with the requirements of the Commission's Rules of Practice and Procedure (18 CFR 385.214 or 385.211) and the Regulations under the Natural Gas Act (18 CFR 157.10).
As a matter of practice, the Commission itself generally acts on requests for extensions of time to complete construction for Natural Gas Act facilities when such requests are contested before order issuance. For those extension requests that are contested,
The Commission will not consider arguments that re-litigate the issuance of the April 15th Certificate order, including whether the Commission properly found the project to be in the public convenience and necessity and whether the Commission's environmental analysis for the certificate complied with the National Environmental Policy Act.
In addition to publishing the full text of this document in the
The Commission strongly encourages electronic filings of comments, protests and interventions in lieu of paper using the “eFile” link at
This constitutes notice, in accordance with 18 CFR 385.2201(b), of the receipt of prohibited and exempt off-the-record communications.
Order No. 607 (64 FR 51222, September 22, 1999) requires Commission decisional employees, who make or receive a prohibited or exempt off-the-record communication relevant to the merits of a contested proceeding, to deliver to the Secretary of the Commission, a copy of the communication, if written, or a summary of the substance of any oral communication.
Prohibited communications are included in a public, non-decisional file associated with, but not a part of, the decisional record of the proceeding. Unless the Commission determines that the prohibited communication and any responses thereto should become a part of the decisional record, the prohibited off-the-record communication will not be considered by the Commission in reaching its decision. Parties to a proceeding may seek the opportunity to respond to any facts or contentions made in a prohibited off-the-record communication and may request that the Commission place the prohibited communication and responses thereto in the decisional record. The Commission will grant such a request only when it determines that fairness so requires. Any person identified below as having made a prohibited off-the-record communication shall serve the document on all parties listed on the official service list for the applicable proceeding in accordance with Rule 2010, 18 CFR 385.2010.
Exempt off-the-record communications are included in the decisional record of the proceeding, unless the communication was with a cooperating agency as described by 40 CFR 1501.6, made under 18 CFR 385.2201(e)(1)(v).
The following is a list of off-the-record communications recently received by the Secretary of the Commission. The communications listed are grouped by docket numbers in ascending order. These filings are available for electronic review at the Commission in the Public Reference Room or may be viewed on the Commission's website at
Environmental Protection Agency (EPA).
Notice.
The Environmental Protection Agency (EPA) is announcing the availability of and seeking public comment on a draft guidance document entitled “Guidance for Waiving Acute Dermal Toxicity Tests for Pesticide Technical Chemicals & Supporting Retrospective Analysis.” Guidance documents are issued by the Office of Pesticide Programs (OPP) to inform pesticide registrants and other interested persons about important policies, procedures, and registration related decisions, and serve to provide guidance to pesticide registrants and OPP personnel. This draft guidance document provides information to pesticide registrants concerning the Agency's consideration to expand the potential for data waivers for acute dermal studies to single technical active ingredients (technical AIs) used to formulate end use products. The reasoning and analysis in this dermal waiver guidance for technical active ingredients is similar to what was presented in the 2016 guidance for end-use products. While more acute toxicity studies are submitted to OPP annually for formulated pesticide products than for technical AIS, there is still the potential for animal and resource savings from waivers for acute toxicity studies.
Comments must be received on or before November 9, 2020.
Submit your comments, identified by docket identification (ID) number EPA-HQ-OPP-2016-0093, though the Federal eRulemaking Portal at
Due to the public health concerns related to COVID-19, the EPA Docket Center (EPA/DC) and Reading Room is closed to visitors with limited exceptions. The staff continues to provide remote customer service via email, phone, and webform. For the latest status information on EPA/DC services and docket access, visit
Tara Flint, Antimicrobial Division (7510P), Office of Pesticide Programs, Environmental Protection Agency, 1200 Pennsylvania Ave. NW, Washington, DC 20460-0001; telephone number: (703) 347-0398; email address:
This action is directed to the public in general. Although this action may be of particular interest to those persons
1.
2.
A copy of the draft guidance document is available in the docket under docket ID number EPA-HQ-OPP-2016-0093.
This guidance is provided under the authority of FIFRA (7 U.S.C. 136
EPA's OPP regularly receives acute lethality studies for oral, dermal and inhalation routes along with eye irritation, skin irritation, and skin sensitization—these data are required for both the registration of new and reregistration of existing pesticidal products.
In 2016, OPP published the “Guidance for Waiving Acute Dermal Toxicity Tests for Pesticide Formulations & Supporting Retrospective Analysis” to support the Agency's goal to reduce unnecessary animal testing. The retrospective analysis supports the conclusion that the dermal acute toxicity study for formulations provides little to no added value in regulatory decision making.
In 2017 Canada's Pest Management Regulatory Agency (PMRA) released their Acute Dermal Toxicity Waiver. This policy includes both end use products and technical active ingredients. Stakeholders have requested that EPA expand its waiver guidance for technical active ingredients to support North American harmonization.
In 2019 EPA Administrator Wheeler directed Agency leadership to prioritize animal testing reduction efforts.
This draft guidance document will expand the potential for data waivers for acute dermal studies to single active ingredient technical chemicals (technical chemicals) used to formulate end use products. The reasoning and analysis in this dermal waiver guidance for technical chemicals is similar to what was presented in the 2016 guidance for end-use products. While more acute toxicity studies are submitted to OPP annually for formulated pesticide products than for technical chemicals, there is still the potential for animal and resource savings from waivers for technical chemical acute toxicity studies. Further, this guidance would allow EPA to harmonize with the PMRA.
As guidance, this document is not binding on the Agency or any outside parties, and the Agency may depart from it where circumstances warrant and without prior notice. While EPA has made every effort to ensure the accuracy of the discussion in the guidance, the obligations of EPA and the regulated community are determined by statutes, regulations, or other legally binding documents. In the event of a conflict between the discussion in the guidance document and any statute, regulation, or other legally binding document, the guidance document would not be controlling.
7 U.S.C. 136
Farm Credit Administration.
Notice of a modified system of records.
Pursuant to the provisions of the Privacy Act of 1974, notice is hereby given that the Farm Credit Administration (FCA or Agency) is amending an existing system of records, FCA-7—Inspector General Investigative Files—FCA.
You may send written comments on or before November 9, 2020. FCA filed an amended System Report with Congress and the Office of Management and Budget on July 20, 2020. This notice will become effective without further publication on November 18, 2020 unless modified by a subsequent notice to incorporate comments received from the public.
We offer a variety of methods for you to submit your comments. For accuracy and efficiency, commenters are encouraged to submit comments by email or through the FCA's website. As facsimiles (fax) are difficult for us to process and achieve compliance with section 508 of the Rehabilitation Act, we are no longer accepting comments submitted by fax. Regardless of the method you use, please do not submit your comment multiple times via different methods. You may submit comments by any of the following methods:
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You may review copies of comments we receive at our office in McLean, Virginia, or from our website at
Autumn R. Agans, Privacy Act Officer, Farm Credit Administration, McLean, Virginia 22102-5090, (703) 883-4020, TTY (703) 883-4019.
The Inspector General Investigative Files—FCA system is used to document the conduct and outcome of investigations; to report results of investigations to other components of the FCA and other agencies and authorities for their use in evaluating programs and imposition of criminal, civil, or administrative sanctions; to report the results of investigations to other agencies or other regulatory bodies for an action deemed appropriate, and for retaining sufficient information to fulfill reporting requirements; and to maintain records related to the OIG's activities. The Agency is updating the notice to make administrative updates and non-substantive changes to conform to the SORN template requirements prescribed in the Office of Management and Budget (OMB) Circular No. A-108.
This publication satisfies the requirement of the Privacy Act of 1974 that agencies publish a system of records notice in the
1. Identifying the records in the system as unclassified.
2. Revising the safeguards section to reflect updated cybersecurity guidance and practices.
3. Clarifying the system purpose, categories of records in the system, and categories of records sources.
4. Adding routine uses permitting the disclosure of records and information contained in the records system: (a) To facilitate qualitative assessment reviews of the OIG's investigative function by certain other federal agencies; (b) to facilitate the preparation of the annual report to the President by the Council of the Inspectors General on Integrity and Efficiency; (c) to respond to statutory reporting requirements; and (d) to the public and news media where there is a public interest and disclosure would not constitute and unwarranted invasion of personal privacy.
5. Removing a routine use for sharing information with independent auditors or other private firms responsible for carrying out work on behalf of OIG, as such sharing is otherwise covered by the Agency's General Statement of Routine Uses.
6. Revising the policies and procedures for retention and disposal of records to reflect an updated National Archives and Records Administration-approved records schedule.
Additionally, non-substantive changes have been made to the notice to align with the latest guidance from OMB.
The amended system of records is: FCA-7—Inspector General Investigative Files—FCA. As required by 5 U.S.C. 552a(r) of the Privacy Act, as amended, FCA sent notice of this modified system of records to the Office of Management and Budget, the Committee on Oversight and Reform of the House of Representatives, and the Committee on Homeland Security and Governmental Affairs of the Senate. The notice is published in its entirety below.
FCA-7—Inspector General Investigative Files—FCA.
Unclassified.
Office of Inspector General (OIG), Farm Credit Administration, 1501 Farm Credit Drive, McLean, VA 22102-5090.
Inspector General, Farm Credit Administration, 1501 Farm Credit Drive, McLean, VA 22102-5090.
The Inspector General Act of 1978, as amended, 5 U.S.C. app.
We use information in this system: to facilitate and document the conduct of investigative activities relating to programs and operations of the FCA; to report results of investigative activities to other components of the FCA and other agencies and authorities for appropriate action; and to fulfill reporting requirements.
Subjects of complaints and investigations relating to FCA's programs and operations. Subjects include, but are not limited to, current and former FCA employees; current and former agents or employees of contractors and subcontractors in their personal capacity, where applicable; and other persons whose actions affect or relate to the FCA, its programs or operations. Businesses, proprietorships, and corporations are not covered by this system.
This system contains correspondence relating to investigative activities; internal staff memoranda; copies of subpoenas issued, affidavits, witnesses' statements, transcripts and recordings of testimony taken, and accompanying exhibits; documents and records obtained from governmental or non-governmental sources, or copies thereof; interview notes, investigative notes, staff working papers, draft materials, and other investigative documents or records; investigative plans, progress reports, and closing reports; and other documents and information relating to the investigation of alleged or suspected criminal, civil, or administrative violations or similar wrongdoing relating to FCA programs and operations.
Records of the FCA and other federal, state, and local agencies; current and former employees of the FCA and other federal, state, and local agencies; private individuals and entities; contractors, subcontractors, FCA-regulated institutions, and other entities having some relationship with FCA or the FCA OIG.
See the “General Statement of Routine Uses.” The information collected in the system will be used in a manner that is compatible with the purposes for which the information has been collected and, in addition to the general routine uses, may be disclosed for the following purposes:
(1) We may disclose information in this system of records to any source when the FCA OIG is conducting an investigation, audit, inspection, or evaluation, but only to the extent necessary to get information from that source relevant to and sought in furtherance of the investigation, audit, inspection, or evaluation.
(2) We may disclose the record or information in the record system to agencies, offices, or establishments of the executive, legislative, or judicial
(3) We may disclose the record or information in the record system to an FCA contractor when a contractor-operated program has been subject to OIG investigation that has uncovered personnel problems so that the contractor can correct those problems.
(4) We may disclose the record or information in the record system to debt collection contractors to collect debts owed to the Government, as authorized under the Debt Collection Act of 1982, 31 U.S.C. 3718, and subject to applicable Privacy Act safeguards.
(5) We may disclose the record or information in the record system to any official charged with the responsibility to conduct qualitative assessment reviews of internal safeguards and management procedures employed in investigative operations. This disclosure category includes members of the Council of the Inspectors General on Integrity and Efficiency and officials and administrative staff within their investigative chain of command, as well as authorized officials of the Department of Justice.
(6) We may disclose the record or information in the record system to members of the Council of the Inspectors General on Integrity and Efficiency for the preparation of reports to the President and Congress on the activities of the Inspectors General.
(7) We may disclose the record or information in the record system to federal, state, or local agencies or to the public as required to meet statutory reporting obligations.
(8) We may disclose the record or information in the record system to the news media and the public, where there exists a legitimate public interest and disclosure would not constitute an unwarranted invasion of personal privacy.
Disclosure to consumer reporting agencies:
(1) We may disclose information from this system, pursuant to 5 U.S.C. 552a(b)(12), to consumer reporting agencies as defined in the Fair Credit Reporting Act, 15 U.S.C. 1681a(f) or the Federal Claims Collection Act of 1966, as amended, 31 U.S.C. 3701(a)(3), in accordance with section 3711(e) of title 31.
The OIG Investigative Files consist of digital records stored in network file folders, as well as paper records and data maintained on removable media, which are stored in file cabinets in OIG office space.
Records are retrieved by the name of the subject of the investigation or complaint, a description of the subject matter of the investigation or complaint, or by a unique control number.
Records of investigations and complaints are destroyed 10 years after the end of the fiscal year in which the relevant investigation was closed or complaint resolved. Investigative files determined by the Inspector General to have historical significance are transferred to the National Archives for permanent retention.
FCA implements multiple layers of security to ensure access to records is limited to FCA OIG personnel who need to know the information to perform their official duties. Physical records are stored in a secured environment using locked file rooms, file cabinets, or locked offices and other physical safeguards. Computer and network records are safeguarded through use of user roles, passwords, firewalls, encryption, and other information technology security measures.
To obtain a record, contact: Privacy Act Officer, Farm Credit Administration, 1501 Farm Credit Drive, McLean, VA 22102-5090, as provided in 12 CFR part 603.
Direct requests for amendments to a record to: Privacy Act Officer, Farm Credit Administration, 1501 Farm Credit Drive, McLean, VA 22102-5090, as provided in 12 CFR part 603.
Address inquiries about this system of records to: Privacy Act Officer, Farm Credit Administration, McLean, VA 22102-5090.
Pursuant to 5 U.S.C. 552a(j)(2), records in this system are exempt from the provisions of 5 U.S.C. 552a, except subsections (b), (c)(1) and (2), (e)(4)(A) through (F), (e)(6), (7), (9), (10), and (11), and (i), and corresponding sections of 12 CFR 603.355, to the extent a record in the system of records was compiled for criminal law enforcement purposes.
Pursuant to 5 U.S.C. 552a(k)(2), the system is exempt from 5 U.S.C. 552a(c)(3), (d), (e)(1), (e)(4)(G), (H), and (I), and (f), and the corresponding provisions of 12 CFR 603.355, to the extent the system of records consists of investigatory material compiled for law enforcement purposes. Material within the scope of the exemption at 5 U.S.C. 552a(j)(2) is also exempt. See 12 CFR 603.355.
Federal Communications Commission.
Notice and request for comments.
As part of its continuing effort to reduce paperwork burdens, as required by the Paperwork Reduction Act (PRA) of 1995, the Federal Communications Commission (FCC or the Commission) invites the general public and other Federal Agencies to take this opportunity to comment on the following information collection. Pursuant to the Small Business Paperwork Relief Act of 2002, the FCC seeks specific comment on how it might “further reduce the information collection burden for small business concerns with fewer than 25 employees.”
The Commission may not conduct or sponsor a collection of information unless it displays a currently valid Office of Management and Budget (OMB) control number. No person shall be subject to any penalty for failing to
Written comments or recommendations for the proposed information collection should be submitted on or before October 29, 2020.
Comments should be sent to
on the proposed information collection to Nicole Ongele, FCC, via email to
For additional information or copies of the information collection, contact Nicole Ongele at (202) 418-2991. To view a copy of this information collection request (ICR) submitted to OMB: (1) Go to the web page
As part of its continuing effort to reduce paperwork burdens, as required by the Paperwork Reduction Act (PRA) of 1995 (44 U.S.C. 3501-3520), the FCC invited the general public and other Federal Agencies to take this opportunity to comment on the following information collection. Comments are requested concerning: (a) Whether the proposed collection of information is necessary for the proper performance of the functions of the Commission, including whether the information shall have practical utility; (b) the accuracy of the Commission's burden estimates; (c) ways to enhance the quality, utility, and clarity of the information collected; and (d) ways to minimize the burden of the collection of information on the respondents, including the use of automated collection techniques or other forms of information technology. Pursuant to the Small Business Paperwork Relief Act of 2002, Public Law 107-198, see 44 U.S.C. 3506(c)(4), the FCC seeks specific comment on how it might “further reduce the information collection burden for small business concerns with fewer than 25 employees.”
The Commission is requesting emergency OMB processing of the information collection requirement(s) contained in this notice and has requested OMB approval no later than November 6, 2020. To view a copy of this information collection request (ICR) submitted to OMB: (1) Go to the web page
Federal Communications Commission.
Notice.
In this document, the Public Safety and Homeland Security Bureau and the Wireless Telecommunications Bureau (the Bureaus) announce a temporary freeze, effective September 8, 2020, on the acceptance and processing of certain applications related to private land mobile radio services in the 4.9 GHz band (4940-4990 MHz). Pursuant to this freeze, applications for new or modified operations in the 4.9 GHz band will not be accepted and pending applications will not be processed unless they meet limited exceptions.
Effective September 8, 2020.
Federal Communications Commission, 445 12th Street SW, Washington, DC 20554.
For additional information regarding this Public Notice, please contact Michael Wilhelm, Chief, Policy and Licensing Division, Public Safety and Homeland Security Bureau, at (202) 418-0870 or Jon Markman, Attorney Advisor, Mobility Division, Wireless Telecommunications Bureau at (202) 418-7090.
In 2018, the Commission issued a Sixth Further Notice of Proposed Rulemaking (83 FR 20011), which sought comment on proposals to stimulate expanded use of and investment in the 4.9 GHz band. In order to stabilize the 4.9 GHz spectrum landscape and to maximize the Commission's flexibility in considering the appropriate rules governing the band, the Bureaus now suspend the acceptance and processing of certain 4.9 GHz band license applications.
Imposition of the freeze is procedural and, therefore, not subject to the notice and comment and effective date requirements of the Administrative Procedure Act. We find good cause for not delaying the effective date of the freeze pending publication of this Public Notice in the
Board of Governors of the Federal Reserve System (Board).
Notice and request for comment.
The Board of Governors of the Federal Reserve System (Board) invites comment on a proposal to extend for three years, with revision, the Financial Statements for Holding Companies (FR Y-9 reports; OMB Control Number 7100-0128) and the Consolidated Report of Condition and Income for Edge and Agreement Corporations (FR 2886b; OMB Control Number 7100-0086).
Comments must be submitted on or before December 7, 2020.
You may submit comments, identified by
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All public comments are available from the Board's website at
Additionally, commenters may send a copy of their comments to the Office of Management and Budget (OMB) Desk Officer—Alex Goodenough—Office of Information and Regulatory Affairs, Office of Management and Budget, New Executive Office Building, Room 10235, 725 17th Street NW, Washington, DC 20503, or by fax to (202) 395-6974.
Federal Reserve Board Clearance Officer—Nuha Elmaghrabi—Office of the Chief Data Officer, Board of Governors of the Federal Reserve System, Washington, DC 20551, (202) 452-3829.
On June 15, 1984, OMB delegated to the Board authority under the PRA to approve and assign OMB control numbers to collections of information conducted or sponsored by the Board. In exercising this delegated authority, the Board is directed to take every reasonable step to solicit comment. In determining whether to approve a collection of information, the Board will consider all comments received from the public and other agencies.
A copy of the Paperwork Reduction Act (PRA) OMB submission, including the reporting form and instructions, supporting statement, and other documentation will be available at
The Board invites public comment on the following information collections, which are being reviewed under authority delegated by the OMB under the PRA. Comments are invited on the following:
a. Whether the proposed collections of information are necessary for the proper performance of the Board's functions, including whether the information has practical utility;
b. The accuracy of the Board's estimate of the burden of the proposed information collections, including the
c. Ways to enhance the quality, utility, and clarity of the information to be collected;
d. Ways to minimize the burden of information collection on respondents, including through the use of automated collection techniques or other forms of information technology; and
e. Estimates of capital or startup costs and costs of operation, maintenance, and purchase of services to provide information.
At the end of the comment period, the comments and recommendations received will be analyzed to determine the extent to which the Board should modify the proposal.
(1)
FR Y-9C (non AA HCs) with less than $5 billion in total assets—40.65, FR Y-9C (non AA HCs) with $5 billion or more in total assets—46.62, FR Y-9C (AA HCs)—48.93, FR Y-9LP—5.27, FR Y-9SP—5.40, FR Y-9ES—0.50, FR Y-9CS—0.50.
FR Y-9C—1, FR Y-9LP—1, FR Y-9SP—0.50, FR Y-9ES—0.50, FR Y-9CS—0.50.
FR Y-9C (non AA HCs) with less than $5 billion in total assets—20,162, FR Y-9C (non AA HCs) with $5 billion or more in total assets—40,653, FR Y-9C (AA HCs)—1,761, FR Y-9LP—8,769, FR Y-9SP—40,381, FR Y-9ES—39, FR Y-9CS—472.
FR Y-9C—1,404, FR Y-9LP—1,664, FR Y-9SP—3,739, FR Y-9ES—39, FR Y-9CS—472.
With respect to the FR Y-9C report, Schedule HI's Memoranda item 7(g) “FDIC deposit insurance assessments,” Schedule HC-P's item 7(a) “Representation and warranty reserves for 1-4 family residential mortgage loans sold to U.S. government agencies and government sponsored agencies,” and Schedule HC-P's item 7(b) “Representation and warranty reserves for 1-4 family residential mortgage loans sold to other parties” are considered confidential commercial and financial information. Such treatment is appropriate under exemption 4 of the Freedom of Information Act (“FOIA”),
In addition, for both the FR Y-9C report and the FR Y-9SP report,
Additionally, items on the FR Y-9C, Schedule HC-C for loans modified under Section 4013, data items Memorandum items 16.a, “Number of Section 4013 loans outstanding”; and Memorandum items 16.b, “Outstanding balance of Section 4013 loans” are considered confidential. While the Board generally makes institution-level FR Y-9C report data publicly available, the Board is collecting Section 4013 loan information as part of condition reports for the impacted HCs and the Board considers disclosure of these items at the HC level would not be in the public interest.
Aside from the data items described above, the remaining data items collected on the FR Y-9C report and the FR Y-9SP report are generally not accorded confidential treatment. The data items collected on FR Y-9LP, FR Y-9ES, and FR Y-9CS
To the extent the instructions to the FR Y-9C, FR Y-9LP, FR Y-9SP, and FR Y-9ES reports each respectively direct the financial institution to retain the workpapers and related materials used in preparation of each report, such material would only be obtained by the Board as part of the examination or supervision of the financial institution. Accordingly, such information is considered confidential pursuant to exemption 8 of the FOIA.
(2)
In response to recent economic disruptions and volatility in U.S. financial markets caused by the spread of Coronavirus Disease 2019 (COVID-19), the Board adopted the Regulation D interim final rule. The interim final rule amended the “savings deposit” definition in Regulation D by deleting the six-transfer-limit provisions in this definition that required depository institutions either to prevent transfers and withdrawals in excess of the limit or to monitor savings deposits ex post for violations of the limit. The interim final rule also made conforming changes to other definitions in Regulation D that refer to “savings deposit” as necessary.
The interim final rule permits, but does not require, depository institutions to immediately suspend enforcement of the six-transfer limit and to allow their customers to make an unlimited number of convenient transfers and withdrawals from their savings deposits. The interim final rule did not amend the Regulation D provisions regarding the reporting of deposits by depository institutions.
In connection with the interim final rule, the Board published supplemental instructions to the FR Y-9C, which included temporary revisions to the General Instructions for FR Y-9C Schedule HC-E, as well as the Glossary entries for “Deposits,” to remove references to the six-transfer limit. In addition, the supplemental instructions included temporary revisions to the General Instructions for FR Y-9C Schedule HC-E to state that if a depository institution chooses to suspend enforcement of the six-transfer limit on a “savings deposit,” the depository institution may continue to report that account as a “savings deposit” or may instead choose to report that account as a “transaction account” based on an assessment of certain characteristics of the account. Similar temporary revisions were applied to the General Instructions of FR 2886b Schedule RC-E to remove references of the six-transfer limit and to state that if a depository institution chooses to suspend enforcement of the six-transfer limit on a “savings deposit,” the depository institution may continue to report that account as a “savings deposit” or may instead choose to report that account as a “transaction account” based on an assessment of certain characteristics of the account. The temporarily revised instructions are published on the FR 2886b report form and instructions website.
However, the Board recognizes that the adopted temporary revisions to the instructions for the FR Y-9C and FR 2886b created a reporting option that could result in the collection of ambiguous data by allowing a depository institution to report a savings deposit as either a “savings deposit” or a “transaction account” if the institution suspends enforcement of the six-transfer limit. To resolve this potential issue, the Board proposes to revise the General Instructions for FR Y-9C Schedule HC-E and FR 2886b Schedule RC-E, effective beginning with reports as of December 31, 2020, to state that where the reporting institution has suspended the enforcement of the six-transfer limit rule on an account that otherwise meets the definition of a savings deposit, the institution must report such deposits as a “savings deposit” (and as a “nontransaction account”) or a “transaction account” based on an assessment of the following characteristics:
(i) If the reporting institution does not retain the reservation of right to require at least seven days' written notice before an intended withdrawal, the account must be reported as a demand deposit (and as a “transaction account”).
(ii) If the reporting institution retains the reservation of right to require at least seven days' written notice before an intended withdrawal and the depositor is eligible to hold a Negotiable Order of Withdrawal (NOW) account, the account must be reported as an Automatic Transfer Service (ATS) account, NOW account, or a telephone and preauthorized transfer account (and as a “transaction account”).
(iii) If the reporting institution retains the reservation of right to require at least seven days' written notice before an intended withdrawal and the depositor is ineligible to hold a NOW account, the account must be reported as a savings deposit (and as a “nontransaction account”).
The proposed revisions to the FR Y-9C and FR 2886b would be consistent with corresponding proposed revisions, related to the Regulation D amendments, to the Consolidated Reports of Condition and Income (Call Reports) (FFIEC 031, FFIEC 041and FFIEC 051; OMB No. 7100-0036) and the Report of Assets and Liabilities of U.S. Branches and Agencies of Foreign Banks (FFIEC 002; OMB Control Number: 7100-0032).
The proposed FR Y-9C and FR 2886b revisions related to Regulation D would be effective as of the December 31, 2020, report date. The Board may consider further modifying the treatment of “savings deposits” and “transaction accounts” in the instructions for the FR Y-9C and FR 2886b after a review of the reported data. Any such changes would be proposed by the Board through a separate
The Board proposes to make a number of revisions to the FR Y-9C, FR Y-9LP and FR Y-9SP related to U.S. GAAP effective for reports with a March 31, 2021, as-of date, except for last-of-layer hedging, which would be implemented following the Financial Accounting Standards Board (FASB)'s adoption of a final standard.
On June 16, 2016, the FASB issued Accounting Standards Update (ASU) No. 2016-13, Topic 326, Financial Instruments—Credit Losses (ASU 2016-13). Within Topic 326, paragraph 326-20-30-11 states: “An entity shall report in net income (as a credit loss expense) the amount necessary to adjust the liability for credit losses for management's current estimate of expected credit losses on off-balance-sheet credit exposures.” Off-balance-sheet credit exposures include unfunded loan commitments, financial standby letters of credit, and financial guarantees not accounted for as insurance, and other similar instruments except for those within the scope of Accounting Standards Codification (ASC) Topic 815 on derivatives and hedging.
Throughout Topic 326, the FASB refers to provisions for credit losses as “credit loss expense.” For example, paragraph 326-20-30-1 states: “An entity shall report in net income (as a credit loss expense) the amount necessary to adjust the allowance for credit losses (ACL) for management's current estimate of expected credit losses on financial assets(s).” Thus, Topic 326 does not prohibit recording the adjustment to the liability for expected credit losses on off-balance-sheet credit exposures within the provisions for credit losses reported in the income statement.
The FR Y-9C income statement instructions currently direct HCs that have adopted Topic 326 to report provisions for expected credit losses on off-balance-sheet credit exposures in Schedule HI, item 7.d, “Other noninterest expense,” and prohibit its inclusion in Schedule HI, item 4, “Provision for loan and lease losses.”
The inclusion of provisions for expected credit losses on off-balance-sheet credit exposures in the provisions for credit losses presented in item 4 of the FR Y-9C income statement will cause a loss of transparency within the overall reported amount of provisions for credit losses between provisions attributable to on- and off-balance-sheet credit exposures. To enhance transparency and differentiate these provisions, the Board proposes adding a new Memorandum item 7, “Provisions for credit losses on off-balance-sheet
In addition, footnote 5 on Schedule HI-B, Part II, item 5, “Provisions for credit losses,” would be updated to reflect that “For institutions that have adopted ASU 2016-13, the sum of item 5, Column A through Column C, plus Schedule HI-B, Part II, Memorandum items 5 and 7 below, must equal Schedule HI, item 4.”
Lastly, footnote 2 on Schedule SI of the FR Y-9SP report form for item 7, “Other expenses” and footnote 1 on Schedule PI of the FR Y-9LP, report form for item 2.c., “Provision for loan and lease losses” would be updated to direct HCs that have adopted ASU 2016-13 to report provisions for expected credit losses on off-balance-sheet credit exposures as part of their total amount of provisions for credit losses.
As noted above, the FASB issued ASU 2016-13 on June 16, 2016, and it has been amended by subsequent FASB ASUs. Within Topic 326, paragraph 326-20-30-1 states, “The ACL is a valuation account that is deducted from, or added to, the amortized cost basis of the financial asset(s) to present the net amount expected to be collected on the financial asset. Expected recoveries of amounts previously written off and expected to be written off shall be included in the valuation account and shall not exceed the aggregate of amounts previously written off and expected to be written off by an entity.” The terms “written off” as used in Topic 326 and “charged off” as used in FR Y-9C instructions are used interchangeably in this discussion.
Under GAAP, before an institution's adoption of Topic 326, expected recoveries of amounts previously written off would not be included in the measurement of the allowance for loan and lease losses; recoveries would be recorded only when received. Under Topic 326, including expected recoveries of amounts previously written off within ACL reduces the overall amount of these allowances. Amounts related to an individual asset are written off or charged off when deemed uncollectible. However, under ASC Topic 326, institutions can, in some circumstances, reduce the amount of the ACL that would otherwise be calculated for a pool of assets with similar risk characteristics that includes charged-off assets on the same day the charge-offs were taken by the estimated amount of expected recoveries of amounts written off on these assets. Reducing the ACL by amounts of expected recoveries prior to collection effectively “reverses” a charge-off. Therefore, to provide transparency for expected recoveries of amounts with inherently higher risk that, before an HC's adoption of ASC Topic 326, were not allowed to be recorded until they were received, the Board proposes to add new Memorandum item 8 to Schedule HI-B, Part II, Changes in Allowances for Credit Losses, to capture the “Estimated amount of expected recoveries of amounts previously written off included within the ACL on loans and leases held for investment (included in item 7, column A, `Balance end of current period,' above).” This new item would be applicable to HCs only after they have adopted Topic 326.
Not including the proposed memorandum item for expected recoveries of amounts previously written off within the ACL on loans and leases would cause a loss of transparency within the reported amount of this allowance between the portions of the allowance attributable to (1) expected credit losses on the amortized cost basis of loans and leases held for investment net of expected recoveries of amounts expected to be charged off in the future and (2) expected recoveries of loan and lease amounts previously charged off. Proposed new Memorandum item 8 would enhance transparency and differentiate these amounts within the period-end balance of the ACL on loans and leases by separately identifying the estimated amount within this allowance attributable to expected recoveries of amounts previously written off. This proposed new memorandum item would enable Board data users, including its examiners, and the public to better understand key components underlying HCs' ACL on loans and leases (
ASU 2016-13 introduced the concept of purchased credit-deteriorated (PCD) assets. PCD assets are acquired financial assets that, at acquisition, have experienced more-than-insignificant deterioration in credit quality since origination. When recording the acquisition of PCD assets, the amount of expected credit losses as of the acquisition date is recorded as an allowance and added to the purchase price of the assets rather than recording these acquisition date expected credit losses through provisions for credit losses. The sum of the purchase price and the initial ACL establishes the amortized cost basis of the PCD assets at acquisition. Any difference between the unpaid principal balance of the PCD assets and the amortized cost basis of the assets as of the acquisition date is a noncredit discount or premium. The initial ACL and any noncredit discount or premium determined on a collective basis at the acquisition date are allocated to the individual PCD assets.
After acquisition, any noncredit discount or premium is accreted or amortized into interest income, as appropriate, over the remaining lives of the PCD assets on a level-yield basis. However, if a PCD asset is placed in nonaccrual status, institutions must cease accreting the noncredit discount or amortizing the noncredit premium into interest income consistent with the guidance in ASC paragraph 310-20-35-17.
The current instructions for FR Y-9C Schedule HC-N, Past Due and Nonaccrual Loans, Leases, and Other Assets, provide an exception to the
As described in the FR Y-9C Supplemental Instructions for March 2020, if an HC has adopted ASU 2016-13 and has a PCD asset, including a PCD asset that was previously a PCI asset or part of a pool of PCI assets, that would otherwise be required to be placed in nonaccrual status (see the Glossary entry for “Nonaccrual status”), the HC may elect to continue accruing interest income and not report the PCD asset as being in nonaccrual status if the following criteria are met:
(1) The HC reasonably estimates the timing and amounts of cash flows expected to be collected, and
(2) the HC did not acquire the asset primarily for the rewards of ownership of the underlying collateral, such as use of collateral in operations of the institution or improving the collateral for resale.
Additionally, these FR Y-9C Supplemental Instructions state that when a PCD asset that meets the criteria above is not placed in nonaccrual status, the asset should be subject to other alternative methods of evaluation to ensure that the HC's net income is not materially overstated. Further, an HC is not permitted to accrete the credit-related discount embedded in the purchase price of a PCD asset that is attributable to the acquirer's assessment of expected credit losses as of the date of acquisition (
For a PCD asset that is not reported in nonaccrual status, the delinquency status of the PCD asset should be determined in accordance with its contractual repayment terms for purposes of reporting the amortized cost basis of the asset as past due in Schedule HC-N, column A or B, as appropriate. If the PCD asset that is not reported in nonaccrual status consists of a pool of loans that were previously PCI assets that is being maintained as a unit of account after the adoption of ASU 2016-13, delinquency status should be determined individually for each loan in the pool in accordance with the individual loan's contractual repayment terms.
The Board is proposing to update the FR Y-9C instructions to revise the nonaccrual treatment for PCD assets to provide HCs the option to not report PCD assets in nonaccrual status if they meet the criteria described above. The instructions also would incorporate the other reporting guidance for PCD assets in the FR Y-9C Supplemental Instructions for March 2020 described above.
In ASU No. 2017-12, Derivatives and Hedging (Topic 815)—Targeted Improvements to Accounting for Hedging Activities, the FASB added the last-of-layer method to its hedge accounting standards to lessen the difficulties institutions encountered under existing accounting rules when seeking to enter into a fair value hedge of the interest rate risk of a closed portfolio of prepayable financial assets or one or more beneficial interests secured by a portfolio of prepayable financial instruments. Typically, prepayable financial assets would be loans and available-for-sale debt securities.
In March 2018, the FASB added a project to its agenda to expand last-of-layer hedging to multiple layers, thereby providing more flexibility to entities when applying hedge accounting to a closed portfolio of prepayable assets. In connection with this project, the FASB anticipated that there would be diversity in practice if entities were required to allocate portfolio-level, last-of-layer FVHBAs to more granular levels, which in turn could potentially hamper data quality and comparability. In addition, the allocation would increase operational burden on institutions with little, if any, added value to risk management or to users of the financial statements. Therefore, for financial reporting purposes, the FASB Board has tentatively decided that it would require these FVHBAs to be presented as a reconciling item,
For regulatory reporting purposes, the Board is proposing similar treatment for last-of-layer FVHBAs on FR Y-9C Schedule HC-C, Loans and Lease Financing Receivables, and Schedule HC-B, Securities. As such, following the FASB's adoption of a final last-of-layer hedge accounting standard, the instructions for Schedule HC-C, item 11, “LESS: Any unearned income on loans reflected in items 1-9 above,” would be revised to explicitly state that last-of-layer FVHBAs associated with the loans reported in Schedule HC-C, should be included in this item.
In addition, the Board is proposing on Schedule HC-B, Securities, to rename existing item 7, “Investments in mutual funds and other equity securities with readily determinable fair values,” as “Unallocated last-of-layer fair value hedge basis adjustments.” HCs would report amounts for last-of-layer FVHBAs on AFS debt securities only in item 7, column C, “Available-for-sale: Amortized Cost.” Only a small number of HCs that have not have yet adopted ASU 2016-01, which includes provisions governing the accounting for investments in equity securities, continue to report amounts in item 7. Because all institutions are required to adopt ASU 2016-01 for FR Y-9C purposes by the December 31, 2020, report date, the Board had previously determined that existing item 7 in Schedule HC-B would no longer be applicable to institutions for reporting purposes and could be removed as of that report date.
Board of Governors of the Federal Reserve System, October 2, 2020.
The companies listed in this notice have applied to the Board for approval, pursuant to the Bank Holding Company Act of 1956 (12 U.S.C. 1841
The public portions of the applications listed below, as well as other related filings required by the Board, if any, are available for immediate inspection at the Federal Reserve Bank(s) indicated below and at the offices of the Board of Governors. This information may also be obtained on an expedited basis, upon request, by contacting the appropriate Federal Reserve Bank and from the Board's Freedom of Information Office at
Comments regarding each of these applications must be received at the Reserve Bank indicated or the offices of the Board of Governors, Ann E. Misback, Secretary of the Board, 20th Street and Constitution Avenue NW, Washington, DC 20551-0001, not later than November 9, 2020.
1.
Food and Drug Administration, HHS.
Notice of availability.
The Food and Drug Administration (FDA or Agency) is announcing the availability of a draft guidance for industry entitled “Premenopausal Women with Breast Cancer: Developing Drugs for Treatment.” This draft guidance provides recommendations regarding the inclusion of premenopausal women in breast cancer clinical trials. The guidance is intended to assist stakeholders, including sponsors and institutional review boards, responsible for the development and oversight of clinical trials for breast cancer drugs.
Submit either electronic or written comments on the draft guidance by December 7, 2020 to ensure that the Agency considers your comment on this draft guidance before it begins work on the final version of the guidance.
You may submit comments on any guidance at any time as follows:
Submit electronic comments in the following way:
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• If you want to submit a comment with confidential information that you do not wish to be made available to the public, submit the comment as a written/paper submission and in the manner detailed (see “Written/Paper Submissions” and “Instructions”).
Submit written/paper submissions as follows:
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• For written/paper comments submitted to the Dockets Management Staff, FDA will post your comment, as well as any attachments, except for information submitted, marked and identified, as confidential, if submitted as detailed in “Instructions.”
• Confidential Submissions—To submit a comment with confidential information that you do not wish to be made publicly available, submit your comments only as a written/paper submission. You should submit two copies total. One copy will include the information you claim to be confidential with a heading or cover note that states “THIS DOCUMENT CONTAINS CONFIDENTIAL INFORMATION.” The Agency will review this copy, including the claimed confidential information, in its consideration of comments. The second copy, which will have the claimed confidential information redacted/blacked out, will be available for public viewing and posted on
You may submit comments on any guidance at any time (see 21 CFR 10.115(g)(5)).
Submit written requests for single copies of the draft guidance to Division of Drug Information, Center for Drug Evaluation and Research (CDER), Food and Drug Administration, 10001 New Hampshire Ave., Hillandale Building, 4th Floor, Silver Spring, MD 20993-0002 or the Office of Communication, Outreach and Development, Center for Biologics Evaluation and Research (CBER), Food and Drug Administration, 10903 New Hampshire Ave., Bldg. 71, Rm. 3128, Silver Spring, MD 20993-0002. Send one self-addressed adhesive label to assist that office in processing your requests. The draft guidance may also be obtained by mail by calling CBER at 1-800-835-4709 or 240-402-8010. See the
Jennifer Gao, Center for Drug Evaluation and Research, Food and Drug Administration, 10903 New Hampshire Ave., Bldg. 22, Rm. 2135, Silver Spring, MD 20993-0002, 240-402-4683; Julia Beaver, Center for Drug Evaluation and Research, Food and Drug Administration, 10903 New Hampshire Ave., Bldg. 22, Rm. 2100, Silver Spring, MD 20993-0002, 240-402-0489; or Stephen Ripley, Center for Biologics Evaluation and Research, Food and Drug Administration, 10903 New Hampshire Ave., Bldg. 71, Rm. 7301, Silver Spring, MD 20993-0002, 240-402-7911.
FDA is announcing the availability of a draft guidance for industry entitled “Premenopausal Women with Breast Cancer: Developing Drugs for Treatment.” This draft guidance provides recommendations regarding the inclusion of premenopausal women, as defined by serum hormonal levels (including but not limited to follicle-stimulating hormone and estradiol), in breast cancer clinical trials. The issues of fertility and fertility preservation when treating premenopausal women with breast cancer are outside the scope of this draft guidance.
Historically, premenopausal women have been excluded from some trials that have investigated the efficacy of certain drugs that rely upon manipulation of the hormonal axis for the treatment of hormone receptor (HR) positive breast cancer. In some cases, separate studies have been conducted to confirm the benefit in this patient population, which has resulted in delays in the availability of these therapies for premenopausal women with HR-positive breast cancer. Certain groups of drugs such as chemotherapy, immunotherapy, and targeted therapy (which act independent of the hormonal axis) have similar efficacy in pre- and post-menopausal women with breast cancer. Based on a review of the literature, FDA believes hormonal drugs administered to premenopausal women with HR-positive breast cancer, with adequate estrogen suppression, are likely to have generally the same efficacy and safety profile as in postmenopausal women. The inclusion of premenopausal women in breast cancer oncology product development programs will result in more complete clinical information to inform clinical decision making and bring safe and effective therapies in a timely manner to this patient population.
The draft guidance encourages sponsors to discuss their breast cancer drug development plan with CDER and CBER, as applicable, early in development. The draft guidance recommends that menopausal status not be the basis for exclusion from any breast cancer clinical trial. The draft guidance includes recommendations regarding eligibility criteria and study planning and design intended to facilitate the inclusion of premenopausal women in breast cancer clinical trials.
This draft guidance is being issued consistent with FDA's good guidance practices regulation (21 CFR 10.115). The draft guidance, when finalized, will represent the current thinking of FDA on “Premenopausal Women with Breast Cancer: Developing Drugs for Treatment.” It does not establish any rights for any person and is not binding on FDA or the public. You can use an alternative approach if it satisfies the requirements of the applicable statutes and regulations.
This draft guidance refers to previously approved FDA collections of information. These collections of information are subject to review by the Office of Management and Budget (OMB) under the Paperwork Reduction Act of 1995 (44 U.S.C. 3501-3521). The collections of information in 21 CFR part 312 have been approved under OMB control number 0910-0014, the collections of information in 21 CFR part 314 have been approved under OMB control number 0910-0001, and the collections of information in 21 CFR part 601 have been approved under 0910-0338.
Persons with access to the internet may obtain the draft guidance at either
Health Resources and Services Administration (HRSA), Department of Health and Human Services (HHS).
Notice.
HRSA, an operating division of HHS, is publishing a list of persons who may be named to serve on the Performance Review Board that oversees the evaluation of performance appraisals for Senior Executive Service members within HRSA for the Fiscal Year 2021 and 2022 review period.
Georgia Lyons, HRSA, Executive Resources, Office of Human Resources, 5600 Fishers Lane, Rm 12N06C, Rockville, Maryland 20857, or (301) 443-4618.
Title 5, U.S.C. Section 4314(c)(4) of the Civil Service Reform Act of 1978, Public Law 95-454, requires that the appointment of Performance Review Board Members be published in the
Health Resources and Services Administration (HRSA), Department of Health and Human Services (HHS).
Notice; correction.
The original
Annie Herzog, Program Analyst, Division of Injury Compensation Programs (DICP), HRSA, in one of three ways: (1) Send a request to the following address: Annie Herzog, Program Analyst, DICP, HRSA, 5600 Fishers Lane, 08N186B, Rockville, Maryland 20857; (2) call (301) 443-6593; or (3) send an email to
The ACCV will hold a public meeting on December 3, 2020, at 10:00 a.m. Eastern Time. The meeting will be held via Adobe Connect and telephone conference. The public can join the meeting by:
1. (Audio Portion) Calling the conference phone number 888-790-1734 and providing the following information:
2. (Visual Portion) Connecting to the ACCV Adobe Connect Meeting using the following URL:
Meeting times could change. For the latest information regarding the meeting, including start time and the agenda, please access the ACCV website:
National Institutes of Health, HHS.
Notice.
In compliance with the requirement of the Paperwork Reduction Act of 1995 to provide opportunity for public comment on proposed data collection projects, the National Cancer Institute (NCI) will publish periodic summaries of propose projects to be submitted to the Office of Management and Budget (OMB) for review and approval.
Comments regarding this information collection are best assured of having their full effect if received within 60 days of the date of this publication.
To obtain a copy of the data collection plans and instruments, submit comments in writing, or request more information on the proposed project, contact: Michael Montello, Pharm. D., Cancer Therapy Evaluation Program (CTEP), 9609 Medical Center Drive, MSC 9742, Rockville, MD 20850 or call non-toll-free number 240-276-6080 or email your request, including your address to:
Section 3506(c)(2)(A) of the Paperwork Reduction Act of 1995 requires: Written
OMB approval is requested for 3 years. There are no costs to respondents other than their time. The total estimated annualized burden hours are 151,716.
Pursuant to section 10(d) of the Federal Advisory Committee Act, as amended, notice is hereby given of the following meetings.
The meetings will be closed to the public in accordance with the provisions set forth in sections 552b(c)(4) and 552b(c)(6), Title 5 U.S.C., as amended. The grant applications and the discussions could disclose confidential trade secrets or commercial property such as patentable material, and personal information concerning individuals associated with the grant applications, the disclosure of which would constitute a clearly unwarranted invasion of personal privacy.
Pursuant to section 10(d) of the Federal Advisory Committee Act, as amended, notice is hereby given of the following meeting.
The meeting will be closed to the public in accordance with the provisions set forth in sections 552b(c)(4) and 552b(c)(6), Title 5 U.S.C., as amended. The grant applications and the discussions could disclose confidential trade secrets or commercial property such as patentable material, and personal information concerning individuals associated with the grant applications, the disclosure of which would constitute a clearly unwarranted invasion of personal privacy.
National Institutes of Health, HHS.
Notice.
In compliance with the requirement of the Paperwork Reduction Act of 1995 to provide opportunity for public comment on proposed data collection projects, the National Cancer Institute (NCI) will publish periodic summaries of propose projects to be submitted to the Office of Management and Budget (OMB) for review and approval.
Comments regarding this information collection are best assured of having their full effect if received within 60 days of the date of this publication.
To obtain a copy of the data collection plans and instruments, submit comments in writing, or request more information on the proposed project, contact: Amy Williams, Director of the Office of Advocacy Relations (OAR), NCI, NIH, 31 Center Drive, Bldg. 31, Room 10A28, MSC 2580, Bethesda, MD 20892, call non-toll-free number 240-781-3406, or email your request, including your address, to
Section 3506(c)(2)(A) of the Paperwork Reduction Act of 1995 requires: Written comments and/or suggestions from the public and affected agencies are invited to address one or more of the following points: (1) Whether the proposed collection of information is necessary for the proper performance of the function of the agency, including whether the information will have practical utility; (2) The accuracy of the agency's estimate of the burden of the proposed collection of information, including the validity of the methodology and assumptions used; (3) Ways to enhance the quality, utility, and clarity of the information to be collected; and (4) Ways to minimizes the burden of the collection of information on those who are to respond, including the use of appropriate automated, electronic, mechanical, or other technological collection techniques or other forms of information technology.
OMB approval is requested for 3 years. There are no costs to respondents other than their time. The total estimated annualized burden hours are 18.
Pursuant to section 10(a) of the Federal Advisory Committee Act, as amended, notice is hereby given of a meeting of the Interagency Pain Research Coordinating Committee.
The meeting will be open to the public. Individuals who plan to participate and need special assistance, such as sign language interpretation or other reasonable accommodations, should notify the Contact Person listed below in advance of the meeting.
Any interested person may file written comments with the committee by forwarding the statement to the Contact Person listed on this notice. The statement should include the name, address, telephone number and when applicable, the business or professional affiliation of the interested person.
The meeting will be open to the public via NIH Videocast
U.S. Coast Guard, Department of Homeland Security.
Notice of Federal Advisory Committee teleconference meeting.
The National Boating Safety Advisory Council (Council) and its subcommittees will meet via teleconference to discuss matters relating to recreational boating safety. The meeting will be open to the public.
To join the teleconference or to request special accommodations, contact the individual listed in the
Mr. Jeff Decker, Alternate Designated Federal Officer of the National Boating Safety Advisory Council, 2703 Martin Luther King Jr. Ave. SE, Stop 7509, Washington, DC 20593-7509, telephone 202-372-1507 or
Notice of this meeting is given pursuant to the
The agenda for the National Boating Safety Advisory Council meeting is as follows:
A copy of all meeting documentation will be available at
During the November 5, 2020 teleconference, a public comment period will be held from approximately 2:05 p.m.-2:20 p.m. Public comments will be limited to two minutes per speaker. Please note that the public comment periods will end following the last call for comments.
Please contact the individual listed in the
Federal Emergency Management Agency, DHS.
Announcement of meeting; request for comments.
The Federal Emergency Management Agency (FEMA) will convene a meeting remotely via web conference to implement the Voluntary Agreement for the
The meeting will take place on Tuesday, October 13, 2020, from 1:00 to 3:30 p.m. Eastern Time (ET). The first portion of the meeting, from approximately 1:00 to 2:00 p.m., will be open to the public. Written comments for consideration at the meeting must be submitted and received by 12:00 p.m. ET on Monday, October 12, 2020. To register to attend the meeting or to make remarks during the public comment period of the meeting, contact the individual listed in the
The meeting will be held via web conference. To register for the meeting, and to obtain information about how to attend the meeting, contact the person listed in the
Reasonable accommodations are available for people with disabilities. To request a reasonable accommodation, contact the person listed in the
To facilitate public participation, members of the public are invited to provide written comments on the issues to be considered at the meeting. The Meeting Objectives listed below outline these issues. Written comments for consideration at the meeting must be submitted and received by 12:00 p.m. ET on Monday, October 12, 2020, identified by Docket ID FEMA-2020-0016, and submitted by one of the following methods:
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All speakers during the public comment period must limit their comments to three (3) minutes. Comments should be addressed to FEMA. Any comments not related to the Meeting Objectives, listed below, will not be considered at the meeting. To register to make remarks during the public comment period, contact the individual listed in the
FEMA encourages interested parties to make written submissions in advance of or following the meeting consistent with the instructions for submitting comments stated above. Follow-up comments must be received within five (5) business days of the meeting in order to be considered.
Robert Glenn, Office of Business, Industry, Infrastructure Integration, via email at
Notice of the meeting is provided as required by section 708(h)(8) of the Defense Production Act (DPA), 50 U.S.C. 4558(h)(8), and consistent with 44 CFR part 332.
The DPA authorizes the making of “voluntary agreements and plans of action” with, among others, representatives of industry and business to address conditions that may pose a direct threat to the national defense or its preparedness programs.
On August 17, 2020, after the appropriate consultations with the Attorney General and the Chairman of the Federal Trade Commission, FEMA completed and published in the
The meeting will be chaired by the FEMA Administrator or his delegate, and attended by the Attorney General or his delegate and the Chairman of the Federal Trade Commission or his delegate. In implementing this agreement, FEMA will adhere to all procedural requirements of 50 U.S.C. 4558 and 44 CFR part 332.
(1) Update interested parties on the status of the implementation of FEMA's Voluntary Agreement;
(2) Request that interested parties sign up to participate in the Voluntary Agreement;
(3) Request that specific parties sign up to participate in one or more specific Plans of Action; and
(4) Discuss activation of the first Plan of Action under the Voluntary Agreement to identify more efficient methods of allocating and distributing Personal Protective Equipment to meet national demand and ways of expanding the production of critical healthcare resources, with an initial focus on the manufacture of N95 masks.
Specifically, finalizing the Plan of Action may require Plan of Action Participants from the private sector to disclose trade secrets or commercial or financial information that is privileged or confidential. Disclosure of such information allows for a meeting to be closed pursuant to 5 U.S.C. 552b(c)(4). In addition, the success of the Voluntary Agreement depends on willing and enthusiastic participation of the private sector. If sensitive information that was shared during Plan of Action development were released, some or all of the Participants would likely withdraw their support from the Voluntary Agreement, which would significantly frustrate the implementation of the Voluntary Agreement and proposed Plan of Action. Frustration of an agency's objective due to premature disclosure of information allows for the closure of a meeting to pursuant to 5 U.S.C. 552b(c)(9)(B).
Privacy Office, Department of Homeland Security (DHS).
Committee management; notice of Federal Advisory Committee meeting.
The DHS Data Privacy and Integrity Advisory Committee will meet on Tuesday, October 27, 2020, via virtual conference. The meeting will be open to the public.
The DHS Data Privacy and Integrity Advisory Committee will meet on Tuesday, October 27, 2020, from 10:00 a.m. to 12:00 p.m. Please note that the virtual conference may end early if the Committee has completed its business. Written comments should be sent by October 20, 2020. Persons who wish to submit comments and who are not able to participate or speak at the meeting may submit comments by October 23, 2020.
The meeting will be held via a virtual forum (conference information will be posted on the Privacy Office website in advance of the meeting at
To facilitate public participation, we invite public comment on the issues to be considered by the Committee as listed in the
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If you wish to attend the meeting, you must call in no later than 9:50 a.m. The DHS Privacy Office encourages you to register for the meeting in advance by contacting Nicole Sanchez, Designated Federal Officer, DHS Data Privacy and Integrity Advisory Committee, at
Nicole Sanchez, Designated Federal Officer, DHS Data Privacy and Integrity Advisory Committee, Department of Homeland Security, 245 Murray Lane SW, Mail Stop 0655, Washington, DC 20528, by telephone (202) 343-1717, by fax (202) 343-4010, or by email to
Notice of this meeting is given under the Federal Advisory Committee Act (FACA), Title 5, U.S.C. The DHS Data Privacy and Integrity Advisory Committee provides advice at the request of the Secretary of Homeland Security and the DHS Chief Privacy Officer on programmatic, policy, operational, administrative, and technological issues within DHS that relate to personally identifiable information, as well as data integrity and other privacy-related matters. The Committee was established by the Secretary of Homeland Security under the authority of 6 U.S.C. 451.
During the meeting, the Committee will review the latest tasking from the DHS Chief Privacy Officer. The tasking will be posted on the Committee's website at
Office of the Assistant Secretary for Public and Indian Housing (PIH), Department of Housing and Urban Development (HUD).
Notice of extension of application due date.
On July 15, 2020, HUD published a notice (“Notice”) implementing the Housing Choice Voucher (HCV) mobility demonstration (“demonstration”) authorized by the Consolidated Appropriations Act, 2019. Through this Notice, HUD is making available up to $50,000,000 to participating PHAs throughout the country to implement housing mobility programs by offering mobility-related services to increase the number of voucher families with children living in opportunity areas. The Notice established October 13, 2020 as the deadline date for submission of PHA applications. Today's
The new application deadline date for the HCV Mobility Demonstration Program is December 14, 2020.
Rebecca Primeaux, Director, Housing Voucher Management and Operations Division, Department of Housing and Urban Development, 451 Seventh Street SW, Room 4214, Washington, DC 20410, telephone number (202) 708-1112. (This is not a toll-free number.) Individuals with hearing or speech impediments
On July 15, 2020 (85 FR 42890), HUD published its Notice implementing the HCV Mobility Demonstration, and established October 13, 2020 as the deadline date for the submission of applications. Through the Notice, HUD is making available approximately $50 million for grants to Public Housing Authorities (PHAs) under a demonstration program authorized by statute.
Today's
The lead agency shall be responsible for submitting the application to HUD, no later than December 14, 2020. Applications that are submitted after midnight on December 14, 2020, or which fail to include the required elements, will be ineligible for consideration by HUD.
HUD may extend the application deadline for any program if
Office of the Chief Information Officer, HUD.
Notice.
HUD has submitted the proposed information collection requirement described below to the Office of Management and Budget (OMB) for review, in accordance with the Paperwork Reduction Act. The purpose of this notice is to allow for an additional 30 days of public comment.
Interested persons are invited to submit comments regarding this proposal. Written comments and recommendations for the proposed information collection should be sent within 30 days of publication of this notice to
Colette Pollard, Reports Management Officer, QDAM, Department of Housing and Urban Development, 451 7th Street SW, Washington, DC 20410; email Colette Pollard at
This notice informs the public that HUD has submitted to OMB a request for approval of the information collection described in Section A. The
The Subordination Agreement is part of a larger information collection (OMB Control No. 2502-0598) that consists of numerous other closing forms (Closing Documents) used in FHA-insured multifamily transactions. The Closing Documents, including the Subordination Agreement, were last updated pursuant to the Paperwork Reduction Act (PRA) in 2018. However, HUD was not able to complete its review of public comments received in connection with the 30-day
Notwithstanding, due to concerns that state and local housing finance agencies (HFAs) have expressed concerning certain terms and conditions in the 2018 Subordination Agreement, HUD is initiating this separate PRA renewal effort in order to allow HFAs and other interested members of the public an opportunity to comment on the form and HUD to make agreed upon changes on a more immediate timeline. It is HUD's goal that the PRA process for the Subordination Agreement will result in a form that is widely accepted by HFAs to promote greater efficiency and consistency in the FHA multifamily closing process, while also allowing flexibility for HFA requested changes necessary for state or local law, as discussed immediately below.
HUD added the following instruction at the request of OMB given HUD's policy of considering requested Subordination Agreement changes to accommodate state or local law: “HUD will consider requested changes to this form that are necessary to comply with
Similarly, HUD added an instruction in section 3(b) to ensure the Subordination Agreement is consistent with existing HUD policy allowing an exception (on a case-by-case basis) to the requirement that the subordinate loan mature no earlier than the FHA-insured senior loan for deal-specific situations where the resulting risk is appropriately underwritten. Outside of this allowance to permit maturity of the subordinate loan before the FHA-insured senior loan and other existing instructions allowing flexibility for certain other terms (
In response to the 30-day notice, one commenter objected to section 3(c) that requires HUD language be inserted into the subordinate note because many subordinate lenders use pre-approved template documents. HUD rejects this comment because FHA-insured multifamily financing is a national program that requires uniformity to ensure fairness and efficiency in closings. Thus, it is critical that every subordinate loan contain the HUD required language in order to accomplish this goal. HUD is, however, sympathetic to the fact that various HFAs have templates that must go through an approval process; therefore, HUD will permit the HUD-required subordinate note language to be incorporated by reference into the subordinate note.
HUD also rejects a comment objecting to section 3(c)(3) that restricts a transfer of the subordinate note without HUD consent. Section 3(c)(3) reflects HUD's longstanding policy that Surplus Cash Notes are not negotiable instruments or transferable without HUD consent. This policy has been in existence since at least 2011, and since 2002 with the then applicable Secondary Financing Rider that was included in the 2002 MAP Guide The rationale behind this policy is that HUD needs to be able to assess whether such transfers will cause unacceptable risk to the project.
A commenter objected to the language in section 3(c)(6) that the terms and provisions of the subordinate lender's note are enforceable by HUD and cannot be amended without HUD's consent. HUD rejects this comment. This is standard language in several of the Closing Documents. Changing the terms of the subordinate loan without HUD consent could negatively impact HUD.
In response to an informal comment received from an outside party concerning the policy change previously made in in section 6(b) to allow subordinate lenders to exercise their remedies for subordinate loan defaults after a 180-day standstill, HUD proposes to explicitly clarify that such exercise of remedies is only available for covenant events of default, and not monetary events of default. This clarification is consistent with the rationale discussed in the 60-day
One commenter took issue with the section 7(b) prohibition against a cross-default provision in the subordinate loan documents. HUD rejects this comment as a cross-default prohibition has been in the form since its adoption in 2011. Numerous transactions with public secondary debt have closed without any objection to the prohibition, which can also be found in the MAP Guide. The FHA lender and HUD must control what happens to the property in the event of a default under the FHA-insured loan and whether to remove the borrower through a foreclosure, not the subordinate lender.
One commenter objected to the requirement in section 10(c) that the maturity on the subordinate loan automatically be extended if the FHA loan is extended due to a deferment of amortization or forbearance. HUD rejects this comment as the language in question reflects current MAP Guide policy to reserve this protection as insurer of the first mortgage loan to allow maximum flexibility in distressed project situations.
HUD agrees with an HFA's request to remove language in section 10(e) that would force a subordinate lender to allow an ownership change and assumption of its loan upon HUD approval. Further, HUD also agrees with an HFA's request to remove the requirement in section 10(f) that limits the funds the subordinate lender can receive upon transfer or sale of the property to 75% of net proceeds; HUD will be making a corresponding change to remove this requirement from the MAP Guide.
This notice is soliciting comments from members of the public and affected parties concerning the collection of information described in Section A on the following:
(1) Whether the proposed collection of information is necessary for the proper performance of the functions of the agency, including whether the information will have practical utility.
(2) The accuracy of the agency's estimate of the burden of the proposed collection of information.
(3) Ways to enhance the quality, utility, and clarity of the information to be collected.
(4) Ways to minimize the burden of the collection of information on those who are to respond, including through the use of appropriate automated collection techniques or other forms of information technology,
(5) Ways to minimize the burden of the collection of information on those who are respond, including the use of automated collection techniques or other forms of information technology.
HUD requests that commenters provide comments and proposed changes in narrative and/or bulleted form, accompanied by a detailed explanation and rationale for each requested change. Commenters may include in their detailed explanation and rationale the relevant excerpt(s) from the Subordination Agreement with redlines/strikeouts.
Department Reports Management Officer for the Office of the Chief Information Officer,
Colette Pollard, having reviewed and approved this document, is delegating the authority to electronically sign this document to submitter, Nacheshia Foxx, who is the Federal Register Liaison for HUD, for purposes of publication in the
National Park Service, Interior.
Notice of teleconference meeting.
In accordance with the Federal Advisory Committee Act of 1972, the National Park Service (NPS) is hereby giving notice that the National Park System Advisory Board (Board) will meet as noted below. The agenda may include the review of proposed actions regarding the National Historic Landmarks (NHL) Program and National Natural Landmarks (NNL) Program. Interested parties are encouraged to submit written comments and recommendations that will be presented to the Board. Interested parties also may attend the board meeting and upon request may address the Board concerning an area's national significance.
The teleconference meeting will be held on Thursday, December 10, 2020, from 11:00 a.m., until 5:00 p.m., Eastern Standard Time. For instructions on registering to attend, submitting written material, or giving an oral presentation at the meeting, please see guidance under
The meeting will be held virtually at the date and time noted above.
(a) For information concerning attending the Board meeting or to request to address the Board, contact Joshua Winchell, Staff Director for the National Park System Advisory Board, Office of Policy, National Park Service, telephone (202) 641-4467, or email
The Board has been established by authority of the Secretary of the Interior (Secretary) under 54 U.S.C. 100906 and is regulated by the Federal Advisory Committee Act.
The Board will receive briefings and discuss topics related to improving the visitor experience in NPS managed units and workforce planning for the next century and may consider proposed NHL and NNL actions. The final agenda and briefing materials will be posted to the Board's website prior to the meeting at
NHL Program matters will be considered, during which the Board may consider the following:
NNL Program matters will be considered, during which the Board may consider the following:
The meeting is open to the public. Interested persons may choose to make oral comments at the meeting during the designated time for this purpose. Depending on the number of people wishing to comment and the time available, the amount of time for oral comments may be limited. Interested parties should contact the Staff Director for the Board (see
5 U.S.C. Appendix 2.
Bureau of Safety and Environmental Enforcement, Interior.
Notice of Information Collection; request for comment.
In accordance with the Paperwork Reduction Act (PRA) of 1995, the Bureau of Safety and Environmental Enforcement (BSEE) proposes to renew an information collection.
Interested persons are invited to submit comments on or before November 9, 2020.
Written comments and recommendations for the proposed information collection should be sent within 30 days of publication of this notice to
To request additional information about this ICR, contact Kye Mason by email at
In accordance with the PRA and 5 CFR 1320.8(d)(1), we provide the general public and other Federal agencies with an opportunity to comment on new, proposed, revised, and continuing collections of information. This helps us assess the impact of our information collection requirements and minimize the public's reporting burden. It also helps the public understand our information collection requirements and provide the requested data in the desired format.
A
As part of our continuing effort to reduce paperwork and respondent burdens, we are again soliciting comments from the public and other Federal agencies on the proposed ICR that is described below. We are especially interested in public comment addressing the following:
(1) Whether or not the collection of information is necessary for the proper performance of the functions of the agency, including whether the information will have practical utility;
(2) The accuracy of our estimate of the burden for this collection of information, including the validity of the methodology and assumptions used;
(3) Ways to enhance the quality, utility, and clarity of the information to be collected; and
(4) How might the agency minimize the burden of the collection of information on those who are to respond, including through the use of appropriate automated, electronic, mechanical, or other technological collection techniques or other forms of information technology,
Comments that you submit in response to this notice are a matter of public record. Before including your address, phone number, email address, or other personal identifying information in your comment, you should be aware that your entire comment—including your personal identifying information—may be made publicly available at any time. While you can ask us in your comment to withhold your personal identifying information from public review, we cannot guarantee that we will be able to do so.
• Review records of formal crane operator and rigger training, crane operator qualifications, crane inspections, testing, and maintenance to ensure that lessees/operators perform operations in a safe and workmanlike manner and that equipment is maintained in a safe condition. The BSEE also uses the information to make certain that all new and existing cranes installed on OCS fixed platforms must be equipped with anti-two block safety devices, and to assure that uniform methods are employed by lessees for load testing of cranes.
• Review welding plans, procedures, and records to ensure that welding is conducted in a safe and workmanlike manner by trained and experienced personnel.
• Provide lessees/operators greater flexibility to comply with regulatory requirements through approval of alternative equipment or procedures and departures to regulations if they demonstrate equal or better compliance with the appropriate performance standards.
• Ensure that injection of gas promotes conservation of natural resources and prevents waste.
• Record the agent and local agent empowered to receive notices and comply with regulatory orders issued.
• Provide for orderly development of leases through the use of information to determine the appropriateness of lessee/operator requests for suspension of operations, including production.
• Improve safety and environmental protection on the OCS through collection and analysis of accident reports to ascertain the cause of the accidents and to determine ways to prevent recurrences.
• Ascertain when the lease ceases production or when the last well ceases production in order to determine the 180th day after the date of completion of the last production. The BSEE will use this information to efficiently maintain the lessee/operator lease status.
• Allow lessees/operators who exhibit unacceptable performance an incremental approach to improving their overall performance prior to a final decision to disqualify a lessee/operator or to pursue debarment proceedings through the execution of a performance improvement plan (PIP). The Subpart A regulations do not address the actual process that we will follow in pursuing the disqualification of operators under §§ 250.135 and 250.136; however, our internal enforcement procedures include allowing such operators to demonstrate a commitment to acceptable performance by the submission of a PIP.
The BSEE forms use and information consists of the following:
• Be informed when there could be a major disruption in the availability and supply of natural gas and oil due to natural occurrences/hurricanes, to advise the U.S. Coast Guard (USCG) in
• Assists lessees, lease operators, and pipeline right-of-way holders when reporting damage by a hurricane, earthquake, or other natural phenomenon. They are required to submit an initial damage report to the Regional Supervisor within 48 hours after completing the initial evaluation of the damage and then, subsequent reports, monthly and immediately, whenever information changes until the damaged structure or equipment is returned to service. Information on the form includes—instructions, general information, a description of the damage, an initial damage assessment, production rate at time of shut-in (BPD and/or MMCFPD), cumulative production shut-in (BPD and/or MMCFPD), and estimated time to return to service (in days).
• Determine that respondents have corrected all Incident(s) of Noncompliance (INCs), identified during inspections. Everything on the INC form is filled out by a BSEE inspector/representative. The only thing industry does with this form is sign the document upon receipt and respond to BSEE when each INC has been corrected, no later than 14 days from the date of issuance.
An agency may not conduct, or sponsor and a person is not required to respond to a collection of information unless it displays a currently valid OMB control number.
The authority for this action is the Paperwork Reduction Act of 1995 (44 U.S.C. 3501
Bureau of Safety and Environmental Enforcement, Interior.
Notice of information collection; request for comment.
In accordance with the Paperwork Reduction Act (PRA) of 1995, the Bureau of Safety and Environmental Enforcement (BSEE) proposes to renew an information collection.
Interested persons are invited to submit comments on or before November 9, 2020.
Written comments and recommendations for the proposed information collection should be sent within 30 days of publication of this notice to
To request additional information about this ICR, contact Kye Mason by email at
In accordance with the PRA and 5 CFR 1320.8(d)(1), we provide the general public and other Federal agencies with an opportunity to comment on new, proposed, revised, and continuing collections of information. This helps us assess the impact of our information collection requirements and minimize the public's reporting burden. It also helps the public understand our information collection requirements and provide the requested data in the desired format.
A
As part of our continuing effort to reduce paperwork and respondent burdens, we are again soliciting comments from the public and other Federal agencies on the proposed ICR that is described below. We are especially interested in public comment addressing the following:
(1) Whether or not the collection of information is necessary for the proper performance of the functions of the agency, including whether or not the information will have practical utility;
(2) The accuracy of our estimate of the burden for this collection of information, including the validity of the methodology and assumptions used;
(3) Ways to enhance the quality, utility, and clarity of the information to be collected; and
(4) How might the agency minimize the burden of the collection of information on those who are to respond, including through the use of appropriate automated, electronic,
Comments that you submit in response to this notice are a matter of public record. Before including your address, phone number, email address, or other personal identifying information in your comment, you should be aware that your entire comment—including your personal identifying information—may be made publicly available at any time. While you can ask us in your comment to withhold your personal identifying information from public review, we cannot guarantee that we will be able to do so.
This ICR includes three forms. The forms use and information consist of the following:
This information is used to ensure that industry has accurate and up-to-date data and information on wells and leasehold activities under their jurisdiction and to ensure compliance with approved plans and any conditions placed upon a suspension or temporary probation. It is also used to evaluate the remedial action in the event of well equipment failure or well control loss. The Form BSEE-0125 is updated and resubmitted in the event the well status changes. In addition, except for proprietary data, BSEE is required by the Outer Continental Shelf (OCS) Lands Act to make available to the public certain information submitted on BSEE-0125.
The BSEE uses this information to monitor the conditions of a well and status of drilling operations. We review the information to be aware of the well conditions and current drilling activity (
In addition, except for proprietary data, BSEE is required by the OCS Lands Act to make available to the public certain information submitted on Forms BSEE-0133 and -0133S.
An agency may not conduct, or sponsor and a person is not required to respond to a collection of information unless it displays a currently valid OMB control number.
The authority for this action is the Paperwork Reduction Act of 1995 (44 U.S.C. 3501
Bureau of Safety and Environmental Enforcement, Interior.
Notice of Information Collection; request for comment.
In accordance with the Paperwork Reduction Act (PRA) of 1995, the Bureau of Safety and Environmental Enforcement (BSEE) proposes to renew an information collection.
Interested persons are invited to submit comments on or before November 9, 2020.
Written comments and recommendations for the proposed information collection should be sent within 30 days of publication of this notice to
To request additional information about this ICR, contact Kye Mason by email at
In accordance with the PRA and 5 CFR 1320.8(d)(1), we provide the general public and other Federal agencies with an opportunity to comment on new, proposed, revised, and continuing collections of information. This helps us assess the impact of our information
A
As part of our continuing effort to reduce paperwork and respondent burdens, we are again soliciting comments from the public and other Federal agencies on the proposed ICR that is described below. We are especially interested in public comment addressing the following:
(1) Whether or not the collection of information is necessary for the proper performance of the functions of the agency, including whether the information will have practical utility;
(2) The accuracy of our estimate of the burden for this collection of information, including the validity of the methodology and assumptions used;
(3) Ways to enhance the quality, utility, and clarity of the information to be collected; and
(4) How might the agency minimize the burden of the collection of information on those who are to respond, including through the use of appropriate automated, electronic, mechanical, or other technological collection techniques or other forms of information technology,
Comments that you submit in response to this notice are a matter of public record. Before including your address, phone number, email address, or other personal identifying information in your comment, you should be aware that your entire comment—including your personal identifying information—may be made publicly available at any time. While you can ask us in your comment to withhold your personal identifying information from public review, we cannot guarantee that we will be able to do so.
An agency may not conduct, or sponsor and a person is not required to respond to a collection of information unless it displays a currently valid OMB control number.
The authority for this action is the Paperwork Reduction Act of 1995 (44 U.S.C. 3501
United States International Trade Commission.
Notice.
The Commission hereby gives notice of the scheduling of the final phase of antidumping and countervailing duty investigation Nos. 701-TA-646 and 731-TA-1502-1516 (Final) pursuant to the Tariff Act of 1930 (“the Act”) to determine whether an industry in the United States is materially injured or threatened with material injury, or the establishment of an industry in the United States is materially retarded, by reason of imports of prestressed concrete steel wire strand (pc strand) from Argentina, Colombia, Egypt, Indonesia, Italy, Malaysia, Netherlands, Saudi Arabia, South Africa, Spain, Taiwan, Tunisia, Turkey, Ukraine, and United Arab Emirates, provided for in subheading 7312.10.30 of the Harmonized Tariff Schedule of the United States, preliminarily determined by the Department of Commerce (“Commerce”) to be subsidized and sold at less-than-fair-value.
September 23, 2020.
Lawrence Jones, ((202) 205-3358), Office of Investigations, U.S. International Trade Commission, 500 E Street SW, Washington, DC 20436. Hearing-impaired persons can obtain information on this matter by contacting the Commission's TDD terminal on 202-205-1810. Persons with mobility impairments who will need special assistance in gaining access to the Commission should contact the Office of the Secretary at 202-205-2000. General information concerning the Commission may also be obtained by accessing its internet server (
The PC strand subject to this order is currently classifiable under subheadings
For further information concerning the conduct of this phase of the investigations, hearing procedures, and rules of general application, consult the Commission's Rules of Practice and Procedure, part 201, subparts A and B (19 CFR part 201), and part 207, subparts A and C (19 CFR part 207).
Please note the Secretary's Office will accept only electronic filings during this time. Filings must be made through the Commission's Electronic Document Information System (EDIS,
Additional written submissions to the Commission, including requests pursuant to § 201.12 of the Commission's rules, shall not be accepted unless good cause is shown for accepting such submissions, or unless the submission is pursuant to a specific request by a Commissioner or Commission staff.
In accordance with §§ 201.16(c) and 207.3 of the Commission's rules, each document filed by a party to the investigations must be served on all other parties to the investigations (as identified by either the public or BPI service list), and a certificate of service must be timely filed. The Secretary will not accept a document for filing without a certificate of service.
These investigations are being conducted under authority of title VII of the Tariff Act of 1930; this notice is published pursuant to § 207.21 of the Commission's rules.
By order of the Commission.
U.S. International Trade Commission.
Notice.
Notice is hereby given that the U.S. International Trade Commission has received a complaint entitled
Lisa R. Barton, Secretary to the Commission, U.S. International Trade Commission, 500 E Street SW, Washington, DC 20436, telephone (202) 205-2000. The public version of the complaint can be accessed on the Commission's Electronic Document Information System (EDIS) at
General information concerning the Commission may also be obtained by accessing its internet server at United States International Trade Commission (USITC) at
The Commission has received a complaint and a submission pursuant to § 210.8(b) of the Commission's Rules of Practice and Procedure filed on behalf of Toppan Interamerica, Inc. on October 2, 2020. The complaint alleges violations of section 337 of the Tariff Act of 1930 (19 U.S.C. 1337) in the importation into the United States, the sale for importation, and the sale within the United States after importation of certain furniture products finished with decorative wood grain paper and components thereof. The complaint names as a respondent: Walker Edison Furniture Company, LLC of Salt Lake City, UT. The complainant requests that the Commission issue a limited exclusion order, a cease and desist order, and impose a bond to upon respondent alleged infringing articles during the 60-day Presidential review period pursuant to 19 U.S.C. 1337(j).
Proposed respondents, other interested parties, and members of the public are invited to file comments on any public interest issues raised by the complaint or § 210.8(b) filing. Comments should address whether issuance of the relief specifically requested by the complainant in this investigation would affect the public health and welfare in the United States, competitive conditions in the United States economy, the production of like or directly competitive articles in the United States, or United States consumers.
In particular, the Commission is interested in comments that:
(i) Explain how the articles potentially subject to the requested remedial orders are used in the United States;
(ii) identify any public health, safety, or welfare concerns in the United States relating to the requested remedial orders;
(iii) identify like or directly competitive articles that complainant, its licensees, or third parties make in the United States which could replace the subject articles if they were to be excluded;
(iv) indicate whether complainant, complainant's licensees, and/or third party suppliers have the capacity to replace the volume of articles potentially subject to the requested exclusion order and/or a cease and desist order within a commercially reasonable time; and
(v) explain how the requested remedial orders would impact United States consumers.
Written submissions on the public interest must be filed no later than by close of business, eight calendar days after the date of publication of this notice in the
Persons filing written submissions must file the original document electronically on or before the deadlines stated above. Submissions should refer to the docket number (“Docket No. 3499”) in a prominent place on the cover page and/or the first page. (
Any person desiring to submit a document to the Commission in confidence must request confidential treatment. All such requests should be directed to the Secretary to the Commission and must include a full statement of the reasons why the Commission should grant such treatment.
This action is taken under the authority of section 337 of the Tariff Act of 1930, as amended (19 U.S.C. 1337), and of §§ 201.10 and 210.8(c) of the Commission's Rules of Practice and Procedure (19 CFR 201.10, 210.8(c)).
By order of the Commission.
U.S. International Trade Commission.
Notice.
Notice is hereby given that the U.S. International Trade Commission (the “Commission”) has determined not to review an initial determination (“ID”) (Order No. 18) granting complainants' motion to terminate the present investigation in its entirety based on withdrawal of the complaint. The investigation is terminated.
Carl P. Bretscher, Office of the General Counsel, U.S. International Trade Commission, 500 E Street SW, Washington, DC 20436, telephone (202) 205-2382. Copies of non-confidential documents filed in connection with this investigation may be viewed on the Commission's electronic docket (EDIS) at
On December 30, 2019, the Commission instituted the present investigation on a complaint, as supplemented, filed by Extang Corporation and Laurmark Enterprises, Inc. (d/b/a Bak Industries) (collectively, “Complainants”), both of Ann Arbor, Michigan. 84 FR 71975-76 (Dec. 30, 2019). The complaint alleges a violation of Section 337 of the Tariff Act of 1930, as amended, 19 U.S.C. 1337 (“Section 337”), in the importation, sale for importation, and sale in the United States after importation of certain pick-up truck folding bed cover systems and components thereof by reason of infringement of certain claims of U.S. Patent Nos. 7,484,788 and 8,061,758 (“the 758 patent”).
The notice of investigation names the following parties as respondents: Tyger Auto Inc. of Rialto, California; Cixi City Liyuan Auto Parts Co. of Zhejiang Province, China; and Hong Kong Car Start Industries Co., of Zhijian Province, China (collectively, “Respondents”).
On March 18, 2020, the presiding administrative law judge (“ALJ”) issued an ID (Order No. 6), granting Complainants' unopposed motion to amend the complaint and notice of investigation in order to supplement and clarify the allegations of the original complaint and notice of investigation regarding the 758 patent. The Commission determined not to review the ID. Comm'n Notice (April 17, 2020).
On September 22, 2020, the ALJ issued the subject ID (Order No. 18) granting Complainants' unopposed motion to terminate the investigation in its entirety based upon the withdrawal of the complaint. The ALJ finds no extraordinary circumstances that would prevent termination of this investigation, and no agreements, written or oral, express or implied, between the parties concerning the subject matter of the investigation. The ALJ also granted Complainants' request to stay the procedural schedule pending final resolution of this ID.
No party filed a petition for review of Order No. 18.
The Commission has determined not to review the subject ID. The investigation is terminated in its entirety.
The Commission voted to approve this determination on October 2, 2020.
The authority for the Commission's determination is contained in Section 337 of the Tariff Act of 1930, as amended (19 U.S.C. 1337), and in part 210 of the Commission's Rules of Practice and Procedure (19 CFR part 210).
By order of the Commission.
Committee on Rules of Practice and Procedure, Judicial Conference of the United States.
Notice of open meeting.
The Committee on Rules of Practice and Procedure will hold a virtual meeting on January 5, 2021. The meeting is open to the public. When a meeting is held virtually, members of the public may join by telephone conference to listen but not participate. An agenda and supporting materials will be posted at least 7 days in advance of the meeting at:
January 5, 2021, TIME: 10 a.m.-5 p.m. (Eastern).
Rebecca A. Womeldorf, Secretary, Committee on Rules of Practice and Procedure of the Judicial Conference of the United States, Thurgood Marshall Federal Judiciary Building, One Columbus Circle, NE, Suite 7-300, Washington, DC 20544, Telephone (202) 502-1820,
28 U.S.C. 2073.
On March 30, 2018, the Deputy Assistant Administrator, Office of Diversion Control, Drug Enforcement Administration, issued an Order to Show Cause (hereinafter, OSC) to Wayne Pharmacy (hereinafter, Registrant), which proposed the revocation of its DEA Certificate of Registration BW8625785. Government's Request for Final Agency Action Exhibit (hereinafter, RFAAX) 2 (OSC). The OSC alleged that Registrant's “continued registration is inconsistent with the public interest.” OSC, at 1 (citing 21 U.S.C. 824(a)(4) and 823(f)). The OSC also proposed to deny any pending application by Registrant for renewal as
In response to the OSC, Registrant issued a timely request for an administrative hearing, RFAAX 14 (Order Terminating Proceedings), and a hearing was scheduled for July 17, 2018.
On September 21, 2018, the Government forwarded a Request for Final Agency Action, along with the evidentiary record for this matter, to my office. Having considered the record in its entirety, I find that the record establishes, by substantial evidence, that Registrant committed acts rendering its continued registration inconsistent with the public interest. Accordingly, I conclude that the appropriate sanction is for Registrant's DEA registration to be revoked.
Registrant is registered with DEA as a retail pharmacy authorized to handle controlled substances in schedules II-V under DEA Registration No. BW8625785, with a registered location of 1055 Hamburg Turnpike, Wayne, New Jersey, 07470. RFAAX 1 (DEA Certificate of Registration). Registrant is owned by Barbara Kleiber (hereinafter, the Owner).
In lieu of an administrative hearing on this matter, Registrant and the Government came to an administrative settlement, the terms of which were memorialized in a Memorandum of Agreement (hereinafter, MOA). RFAAX 12. As part of the settlement, Registrant, and its Owner, both “accepted responsibility for their misconduct and for their failure to comply with federal laws pertaining to controlled substances as alleged in the [OSC].”
(1) Registrant is owned by Barbara Kleiber. M.B.
(2) In May 2017, Registrant's Pharmacist-in-Charge (“PIC”) Deborah Clark reported to the Wayne Police Department that in the course of investigating the loss of a bottle of oxycodone 30mg, she had conducted an audit and discovered that approximately 47,000 tablets of oxycodone 30mg were missing.
(3) Although Registrant became aware of the loss of 47,000 tablets of oxycodone 30mg in May 2017, Registrant did not file a DEA 106 notice of theft or loss until June 14, 2017, after DEA conducted its own inspection of Registrant, and in violation of 21 CFR 1301.76(b).
(4) On June 1, 2017, DEA inspected Registrant's records pursuant to a Notice of Inspection. During this inspection, an audit was conducted covering the May 1, 2015 to June 1, 2017 time period. DEA's audit of Registrant's records found that Registrant committed systematic violations of the Controlled Substances Act (hereinafter, CSA), 21 U.S.C. 801
a. Registrant's inventories resulted in inaccurate inventories in violation of 21 CFR 1304.22(c).
i. For the audit period, Registrant was accountable for 543,575 tablets of oxycodone 30 mg, but could only account for 510,994 tablets, a shortfall of 32,581 tablets.
ii. For the audit period, Registrant was accountable for 120,102 tablets of oxycodone/acetaminophen 10/325 mg, but could only account for 96,102, a shortfall of 24,000 tablets.
iii. For the audit period, Registrant was accountable for 41,004 tablets of Morphine IR 30 mg, but could only account for 34,487 tablets, a shortfall of 6,517 tablets.
(5) On September 18, 2017, DEA conducted an additional review of Registrant's records pursuant to an Administrative Inspection Warrant. DEA's audit of Registrant's records found that Registrant continued to commit systematic violations of the CSA and DEA regulations.
a. The five controlled substances that were audited on June 1, 2017, were again audited with an audit period of June 1, 2017 to September 18, 2017. Registrant's inventory continued to be inaccurate in violation of 21 CFR 1304.22(c).
i. For the audit period, Registrant was accountable for 44,954 tablets of oxycodone 30 mg, but could only account for 44,626 tablets, a shortfall of 328 tablets.
ii. For the audit period, Registrant was accountable for 12,389 tablets of oxycodone/acetaminophen 10/325 mg, but could only account for 12,193 a shortfall of 196 tablets.
iii. For the audit period, Registrant was accountable for 2,557 tablets of Morphine IR 30 mg, but could only account for 2,354 tablets, a shortfall of 203 tablets.
b. In addition to auditing the same controlled substances that were audited on June 1, 2017, DEA conducted an audit of additional controlled substances. For these additional controlled substances, the audit period was May 1, 2017 to September 18, 2017. Registrant's inventory was inaccurate with respect to these controlled substances in violation of 21 CFR 1304.22(c).
i. For the audit period, Registrant was accountable for 4,428 tablets of alprazolam 2 mg, but could only account for 3,318 tablets, a shortfall of 573 tablets.
ii. For the audit period, Registrant was accountable for 880 tablets of Tylenol with codeine #4, but could only account for 812 tablets, a shortfall of 68 tablets.
iii. For the audit period, Registrant was accountable for 2,487 tablets of Adderall IR 30 mg, but could only account for 2,292 tablets, a shortfall of 195 tablets.
(6) In December 2017, Registrant hired its own auditor to inspect its records. Using the audit period of January 1, 2017, to December 19, 2017, Registrant's own auditor found significant shortages. Specifically, Registrant's auditor found that during this time period, Registrant could not account for 15,264 tablets of oxycodone 30 mg, 13,966 tablets of oxycodone 15 mg, 4,140 tablets of alprazolam 2 mg, and 1,192 tablets of Adderall (generic) 30 mg.
(7) When the DEA conducted its audit on June 1, 2017, the Owner told DEA that Registrant was in the process of improving its practices since discovering the massive shortages that caused Registrant to report missing oxycodone to the Wayne Police Department. Specifically, the Owner advised DEA that Registrant was in the process of taking additional security measures; namely (1) ordering of a safe to store controlled substances (as opposed to the locked glass cabinet currently in use); and (2) tallying daily inventories of controlled substances. Neither of these alleged additional safeguards were effective, as the controlled substances continued to be stored in such a way that all employees
The Owner and Registrant also both admitted that “[the Owner] was given notice by DEA that there was reasonable basis to believe that [M.B.] was diverting controlled substances, but [the Owner] did not terminate [M.B.]'s employment for at least four months.” RFAAX 12, at 2-3.
In addition to the factual allegations the Registrant admitted in the MOA, the Government has also alleged that M.B., the son of Registrant's owner and a former employee of Registrant, was involved in the theft of controlled substances from Registrant and that Registrant failed to terminate M.B. in the face of evidence that he was diverting controlled substances. OSC, at 4-5; RFAA, at 9-10. To support this allegation, the Government submitted recordings and transcripts of interviews the Wayne Police Department conducted with one of Registrant's Pharmacists and its PIC (which were also attended by DEA officers and investigators), RFAAX 5-9; text messages between Registrant's PIC and a DEA Task Force Officer (hereinafter, TFO One), RFAAX 11, 16; and the declaration of a DEA Diversion Investigator (hereinafter, DI One), who recounted conversations he had with Registrant's employees, owner, and representatives. RFAAX 15.
On June 1, 2017, DEA conducted an inspection at Registrant. DI One stated that he interviewed one of Registrant's pharmacy technicians, who recounted to him an incident from 2016, in which she discovered a trail of oxycodone tablets leading toward the restroom immediately after M.B. was involved in counting oxycodone tablets and then left for the restroom. GX 15, at 2.
On June 2, 2017, the Wayne Police Department interviewed a former pharmacist at Registrant, C.R. RFAAX 6 (Recording of C.R. Interview) and 7 (Transcript of C.R. Interview);
The Wayne Police Department interviewed Registrant's PIC, Deborah Clark, on June 9, 2017 and June 14, 2017. RFAAX 5 (Recordings of PIC interviews), 8 (Transcript of June 9 PIC Interview), 9 (Transcript of June 14 PIC Interview);
DI One also declared that DEA repeatedly told Registrant that there was a reasonable basis to believe that M.B. was diverting controlled substances. RFAAX 15, at 4. DI One stated that he told the Owner during the September 2017 audit that DEA believed her son, M.B., was diverting controlled substances.
Under the Controlled Substances Act, “[a] registration . . . to . . . distribute[ ] or dispense a controlled substance . . . may be suspended or revoked by the Attorney General upon a finding that the registrant . . . has committed such acts as would render his registration under section 823 of this title inconsistent with the public interest as determined under such section.” 21 U.S.C. 824(a)(4). In the case of a “practitioner,” which is defined in 21 U.S.C. 802(21) to include a “physician,” Congress directed the Attorney General to consider the following factors in making the public interest determination:
(1) The recommendation of the appropriate State licensing board or professional disciplinary authority.
(2) The [registrant]'s experience in dispensing . . . controlled substances.
(3) The [registrant]'s conviction record under Federal or State laws relating to the . . . distribution[ ] or dispensing of controlled substances.
(4) Compliance with applicable State, Federal, or local laws relating to controlled substances.
(5) Such other conduct which may threaten the public health and safety.
21 U.S.C. 823(f). These factors are considered in the disjunctive.
According to Agency decisions, I “may rely on any one or a combination of factors and may give each factor the weight [I] deem[ ] appropriate in determining whether” to revoke a registration.
The Government has the burden of proving that the requirements for revocation of a DEA registration in 21 U.S.C. 824(a) are satisfied. 21 CFR 1301.44(e). When the Government has met its
In this matter, while I have considered all of the Factors, the Government's evidence in support of its
As already discussed, pursuant to section 304 of the CSA, in conjunction with section 303 of the CSA, I am to consider evidence of Registrant's compliance (or non-compliance) with laws related to controlled substances and experience dispensing controlled substances in determining whether Registrant's continued registration is “consistent with the public interest.” 21 U.S.C. 824(a)(4). “[A] registrant's `ignorance of the law is no excuse' for actions that are inconsistent with responsibilities attendant upon a registration.”
In support of its contention that Registrant's continued registration is inconsistent with the public interest, the Government has alleged that Registrant violated several federal laws related to controlled substances. Specifically, the Government has alleged that Registrant violated its recordkeeping obligations under the CSA, as implemented in 21 CFR 1304.22(c), to maintain accurate inventories of its controlled substances. The Government also alleged that Registrant violated 21 CFR 1301.71 and 1301.76 by failing to adequately secure its controlled substances and failing to timely notify DEA after Registrant discovered it was missing controlled substances.
Recordkeeping is one of the CSA's principal tools for preventing the diversion of controlled substances.
Registrant's records were audited twice by DEA—on June 1, 2017 and September 18, 2017—and once by an auditor hired by Registrant in December 2017. As Registrant admitted in its MOA with the Government, each audit found significant shortages in Registrant's inventories of controlled substances. A shortage in an inventory audit of controlled substances occurs when a pharmacy is unable to account for all of the controlled substances it should have in its inventory.
It is clear from the shortages that Registrant was not maintaining required records. Accordingly, I find the unrefuted evidence supports a finding that Registrant violated its recordkeeping obligations under the CSA. This finding weighs against entrusting Registrant with a registration.
The Government alleged that Registrant violated 21 CFR 1301.71 and 1301.76(b) by failing to promptly report the loss of 47,000 tablets of oxycodone 30mg to DEA. 21 1301.76(b) requires registrants to notify its area DEA Field Division Office of “the theft or significant loss of any controlled substances within one business day of discovery of such loss or theft” and to submit a DEA Form 106 regarding the loss or theft. The regulation provides factors to determine whether a loss is “significant,” which include “the actual quantity of controlled substances lost in relation to the type of business,” and “[w]hether the loss of the controlled substances can be associated with access to those controlled substances by specific individuals.” 21 CFR 1301.76(b).
Registrant admitted that it became aware of the loss of 47,000 tablets of oxycodone 30mg in May 2017. The loss of such a large number of tablets of oxycodone, a schedule II controlled substance, is clearly significant under the factors listed in 21 CFR 1301.76(a). Registrant was required to report this significant loss of controlled substances within one business day of discovering the loss. Registrant, however, did not file a DEA 106 notice of theft or loss until June 14, 2017, after DEA conducted its own inspection of Registrant. Registrant's failure to notify DEA of the significant loss of controlled substances within one business day of discovering the loss was a violation of 21 CFR 1301.76(b) and a violation of 21 CFR 1301.71, which requires all registrants to provide “effective controls and procedures to guard against theft and diversion of controlled substances” as set forth in 1301.72-76.
Under Factor Five, the Administrator is authorized to consider “[s]uch other conduct which may threaten the public health and safety.” 5 U.S.C. 823(f)(5). Although Factor Five is broad, DEA decisions have qualified its breadth by limiting the considerations made under that factor to those where there is “a substantial relationship between the conduct and the CSA's purpose of preventing drug abuse and diversion.”
The uncontested evidence in this case shows that Registrant was losing large quantities of controlled substances from its inventory and that these losses continued even when Registrant knew about the losses and therefore could have taken measures to stop them. After the DEA's June 2017 audit, Registrant was unquestionably aware that it was losing large quantities of controlled substances, but the DEA's September 2017 audit and the December 2017 audit conducted by Registrant's auditor show that Registrant continued to lose significant quantities of controlled substances throughout 2017. Furthermore, Registrant's employees had reported at least three incidents to Registrant's owner where it appeared to the employee that M.B. had stolen controlled substances from Registrant or where the employee had thwarted M.B.'s attempt to steal controlled
There is also no evidence on the record that Registrant took any real measures to increase security at the pharmacy or otherwise stop the losses. Registrant's owner told DEA on June 1, 2017, that Registrant was in the process of taking additional security measures—namely ordering a safe to store controlled substances and taking daily inventories of controlled substances—and that M.B. no longer worked at Registrant. RFAAX 15, at 2. Registrant's PIC, however, told DEA on July 27, 2017, that Registrant's narcotics were being stored in an unlocked case and that any pharmacy employee could change the inventory quantities in Registrant's computer. RFAAX 11 (text messages between PIC and DEA TFO). Registrant also admitted that “[n]either of these alleged additional safeguards were effective, as the controlled substances continued to be stored in such a way that all employees have access to them, and the daily inventories were conducted in such a way that any employee could alter the inventory.” RFAAX 12, at 2 (admitting to the factual allegations in paragraphs 2-8 of the OSC); OSC, at 4. Furthermore, PIC Clark told the DEA that, as of July 27, 2017, M.B. was working as a pharmacy tech at Registrant. RFAA 11. Registrant confirmed that M.B. was still employed by Registrant in meetings with DEA on January 8, 2018 and February 7, 2018. RFAAX 15, at 4.
“[A] DEA registrant is obligated at all times to act in the public interest.”
Having considered all of the factors, I conclude that the evidence pertinent to factors two, four, and five demonstrate a
Where, as here, the Government has met its
The CSA authorizes the Attorney General to “promulgate and enforce any rules, regulations, and procedures which he may deem necessary and appropriate for the efficient execution of his functions under this subchapter.” 21 U.S.C. 871(b). This authority specifically relates “to `registration' and `control,' and `for the efficient execution of his functions' under the statute.”
Registrant accepted responsibility for most of its misconduct in the MOA, in which it admitted to many of the factual allegations in the OSC in exchange for certain agreements from the Government. Registrant, however, did not present any evidence of remorse for its past misconduct and did not provide any assurances that it would not engage in such conduct in the future. Further, it provided no evidence of rehabilitative actions taken to correct its past unlawful behavior, except an agreement from the Owner, in her individual capacity, that “she will not serve as an officer, partner, stockholder, proprietor, owner, partial owner, or pharmacist in charge of any entity that either possesses or is seeing a DEA Certificate of Registration” for so long as the MOA between the Government and Registrant remains in effect. Absent such evidence and such assurances in this matter, I find that continued registration of Registrant is inconsistent with the public interest. Registrant's silence weighs against its continued registration.
Accordingly, I find that the factors weigh in favor of sanction and I shall order the sanction the Government requested, as contained in the Order below.
Pursuant to 28 CFR 0.100(b) and the authority vested in me by 21 U.S.C. 824(a), I hereby revoke DEA Certificate of Registration BW8625785 issued to Wayne Pharmacy. This Order is effective November 9, 2020.
Notice of application.
Registered bulk manufacturers of the affected basic class(es), and applicants therefore, may file written comments on or objections to the issuance of the proposed registration on or before November 9, 2020. Such persons may also file a written request for a hearing on the application on or before November 9, 2020.
Written comments should be sent to: Drug Enforcement Administration, Attention: DEA Federal Register Representative/DPW, 8701 Morrissette Drive, Springfield, Virginia 22152. All requests for a hearing must be sent to: Drug Enforcement Administration, Attn: Administrator, 8701 Morrissette Drive, Springfield, Virginia 22152. All requests for a hearing should also be sent to: (1) Drug Enforcement Administration, Attn:
In accordance with 21 CFR 1301.34(a), this is notice that on February 13, 2020, MMJ Biopharma Cultivation, Inc., 71 Margaret Terrance Memorial Way, Akwesasne, New York, 13655, applied to be registered as an importer of the following basic class(es) of controlled substances:
The company plans to import the listed controlled substances as mature plants to support the manufacturing of dosage forms for use in clinical trials. This notice does not constitute an evaluation or determination of the merits of the company's application.
Federal Bureau of Investigation (FBI), Department of Justice (DOJ).
30-Day Notice and request for comments.
The DOJ, FBI, Criminal Justice Information Services (CJIS) Division, will be submitting the following information collection request to the Office of Management and Budget for review and approval in accordance with the Paperwork Reduction Act (PRA) of 1995.
Comments are encouraged and will be accepted for 30 days until December 7, 2020.
Written comments and recommendations for the proposed information collection should be sent within 30 days of publication of this notice to
Written comments and suggestions from the public and affected agencies concerning the proposed collection of information are encouraged. Your comments should address one or more of the following four points:
1.
2.
3.
4.
The most significant difference between NIBRS and the traditional SRS is the degree of detail in reporting. The NIBRS is capable of producing more detailed, accurate, and meaningful information because data are collected about when and where crime takes place, what form it takes, and the characteristics of its victims and perpetrators. Although most of the general concepts for collecting, scoring, and reporting UCR data in SRS apply in NIBRS (
5.
6.
If additional information is required, contact: Melody Braswell, Department Clearance Officer, United States Department of Justice, Justice Management Division, Policy and Planning Staff, Two Constitution Square, 145 N Street NE, 3E.405A, Washington, DC 20530.
Employment and Training Administration, Labor.
Notice.
This notice announces a change in benefit period eligibility under the EB program for Utah and Alabama.
The following change has occurred since the publication of the last notice regarding the States' EB status:
• Utah's 13-week insured unemployment rate (IUR) for the week ending August 22, 2020, was 4.10 percent, falling below the 5.00 percent threshold necessary to remain “on” EB. However, Utah was in a mandatory 13-week “on” period until September 26, 2020. Therefore, the EB period for Utah will end on September 26, 2020. The state will remain in an “off” period for a minimum of 13 weeks.
• Alabama's 13-week IUR for the week ending September 5, 2020, was 4.55 percent, falling below the 5.00 percent threshold necessary to remain “on” EB. Therefore, the EB period for Alabama will end on September 26, 2020. The state will remain in an “off” period for a minimum of 13 weeks.
The duration of benefits payable in the EB Program, and the terms and conditions on which they are payable, are governed by the Federal-State Extended Unemployment Compensation Act of 1970, as amended, and the operating instructions issued to the states by the U.S. Department of Labor. In the case of a state ending an EB period, the State Workforce Agency will furnish a written notice to each individual who is currently filing claims for EB of the forthcoming termination of the EB period and its effect on the individual's right to EB (20 CFR 615.13 (c)).
U.S. Department of Labor, Employment and Training Administration, Office of Unemployment Insurance Room S-4524, Attn: Thomas Stengle, 200 Constitution Avenue NW, Washington, DC 20210, telephone number (202)-693-2991 (this is not a toll-free number) or by email:
Signed in Washington, DC.
Employment and Training Administration, Labor.
Notice.
This notice announces a change in benefit period eligibility under the EB program for North Dakota.
The following change has occurred since the publication of the last notice regarding the State's EB status:
• North Dakota's 13-week insured unemployment rate (IUR) for the week ending September 12, 2020, was 4.95 percent, falling below the 5.00 percent threshold necessary to remain “on” EB. Therefore, the EB period for North Dakota will end on October 3, 2020. The state will remain in an “off” period for a minimum of 13 weeks.
The duration of benefits payable in the EB Program, and the terms and conditions on which they are payable, are governed by the Federal-State Extended Unemployment Compensation Act of 1970, as amended, and the operating instructions issued to the states by the U.S. Department of Labor. In the case of a state ending an EB period, the State Workforce Agency will furnish a written notice to each individual who is currently filing claims for EB of the forthcoming termination of the EB period and its effect on the individual's right to EB (20 CFR 615.13 (c)).
U.S. Department of Labor, Employment and Training Administration, Office of Unemployment Insurance Room S-4524, Attn: Thomas Stengle, 200 Constitution Avenue NW, Washington, DC 20210, telephone number (202)-693-2991 (this is not a toll-free number) or by email:
Signed in Washington, DC.
Office of Workers' Compensation Programs.
Announcement of meeting of the Advisory Board on Toxic Substances and Worker Health (Advisory Board) for the Energy Employees Occupational Illness Compensation Program Act (EEOICPA).
The Advisory Board will meet November 5-6, 2020, via teleconference, from 11:00 a.m. to 5:00 p.m. Eastern time on November 5 and from 11:00 a.m. to 3:00 p.m. Eastern time on November 6.
Submission of comments, requests to speak, and materials for the record: You must submit comments, materials, and requests to speak at the Advisory Board meeting by October 29, 2020, identified by the Advisory Board name and the meeting date of November 5-6, 2020, by any of the following methods:
•
•
OWCP will make available publicly, without change, any comments, requests to speak, and speaker presentations, including any personal information that you provide. Therefore, OWCP cautions interested parties against submitting personal information such as Social Security numbers and birthdates.
For press inquiries: Ms. Laura McGinnis, Office of Public Affairs, U.S. Department of Labor, Room S-1028, 200 Constitution Ave. NW, Washington, DC 20210; telephone (202) 693-4672; email
The Advisory Board will meet via teleconference: Thursday, November 5, 2020, from 11:00 a.m. to 5:00 p.m. Eastern time; and Friday, November 6, 2020, from 11:00 a.m. to 3:00 p.m. Eastern time. The teleconference number and other details for participating remotely will be posted on the Advisory Board's website,
The Advisory Board is mandated by Section 3687 of EEOICPA. The Secretary of Labor established the Board under this authority and Executive Order 13699 (June 26, 2015). The purpose of the Advisory Board is to advise the Secretary with respect to: (1) The Site Exposure Matrices (SEM) of the Department of Labor; (2) medical guidance for claims examiners for claims with the EEOICPA program, with respect to the weighing of the medical evidence of claimants; (3) evidentiary requirements for claims under Part B of EEOICPA related to lung disease; (4) the work of industrial hygienists and staff physicians and consulting physicians of the Department of Labor and reports of such hygienists and physicians to ensure quality, objectivity, and consistency; (5) the claims adjudication process generally, including review of procedure manual changes prior to incorporation into the manual and claims for medical benefits; and (6) such other matters as the Secretary considers appropriate. The Advisory Board sunsets on December 19, 2024.
The Advisory Board operates in accordance with the Federal Advisory Committee Act (FACA) (5 U.S.C. App. 2) and its implementing regulations (41 CFR part 102-3).
• New member training on FACA, EEOICPA, and ethics, and administrative sessions;
• Review and follow-up on Advisory Board's previous recommendations, data requests, and action items;
• Discussions on Advisory Board working groups;
• Review of claims;
• Review of public comments;
• Review of Board tasks, structure and work agenda;
• Consideration of any new issues; and
• Public comments.
OWCP transcribes and prepares detailed minutes of Advisory Board meetings. OWCP posts the transcripts and minutes on the Advisory Board web page,
Because of security-related procedures, receipt of submissions by regular mail may experience significant delays.
• The amount of time requested to speak;
• The interest you represent (
• A brief outline of the presentation.
PowerPoint presentations and other electronic materials must be compatible with PowerPoint 2010 and other Microsoft Office 2010 formats. The Advisory Board Chair may grant requests to address the Board as time and circumstances permit.
Electronic copies of this
For further information regarding this meeting, you may contact Michael Chance, Designated Federal Officer, at
This is not a toll-free number.
Signed at Washington, DC.
National Science Foundation.
Notice of permit modification request received and permit issued.
The National Science Foundation (NSF) is required to publish a notice of requests to modify permits issued to conduct activities regulated and permits issued under the Antarctic Conservation Act of 1978. NSF has published regulations under the Antarctic Conservation Act in the Code of Federal Regulations. This is the required notice of a requested permit modification and permit issued.
Activities permitted from September 15, 2020-March 30, 2022.
Nature McGinn, ACA Permit Officer, Office of Polar Programs, National Science Foundation, 2415 Eisenhower Avenue, Alexandria, VA 22314; 703-292-8224; email:
The National Science Foundation (NSF), as directed by the Antarctic Conservation Act of 1978 (Pub. L. 95-541, 45 CFR 671), as amended by the Antarctic Science, Tourism and Conservation Act of 1996, has developed regulations for the establishment of a permit system for various activities in Antarctica and designation of certain animals and certain geographic areas a requiring special protection.
NSF issued a permit (ACA 2019-012) to Conrad Combrink, Senior Vice President, Strategic Development Expeditions and Experiences, Silversea Cruises, Ltd., for waste management activities associated with operating remotely piloted aircraft systems (RPAS). Silversea Cruises engages experienced pilots to fly small, battery-operated, remotely controlled quadcopter equipped with cameras to capture aerial footage for commercial and educational uses.
On November 20, 2019, NSF issued a non-material modification (#1) to permit ACA 2019-012 based on an update regarding activities planned for Silversea Cruises' 2019-2020 field season.
On September 15, 2020, Stanislav Kozhuharov, on behalf of Conrad Combrink, Senior Vice President, Strategic Development Expeditions and Experiences, Silversea Cruises, Ltd., provided NSF an update based on activities planned for the 2020-2021 field season. Silversea's activities are the same or similar as those detailed in the original permit. The Environmental Officer has reviewed the modification request and has determined that the amendment is not a material change to the permit, and it will have a less than a minor or transitory impact.
The permit modification was issued on September 15, 2020.
National Science Foundation.
Notice.
The National Science Foundation (NSF) is announcing plans to establish this collection. In accordance with the requirements of the Paperwork Reduction Act of 1995, we are providing opportunity for public comment on this action. After obtaining and considering public comment, NSF will prepare the submission requesting Office of Management and Budget (OMB) clearance of this collection for no longer than 3 years.
Written comments on this notice must be received by December 7, 2020 to be assured consideration. Comments received after that date will be considered to the extent practicable. Send comments to address below.
Suzanne H. Plimpton, Reports Clearance Officer, National Science Foundation, 2415 Eisenhower Avenue, Suite W18200, Alexandria, Virginia 22314; telephone (703) 292-7556; or send email to
Reporting Requirements in addition to the standard reporting requirements include information on:
• International collaborators (country, affiliation, title, career stage);
• International location(s) visited, duration of stay, and research activity undertaken by all participants, noting the career stage of each participant; and
• Metrics of success demonstrating progress towards achieving the specific project goals, and the goals of the AccelNet program overall.”
Awardees will be required to participate in program-level evaluation by which NSF can assess implementation processes and progress toward program level outcomes. NSF, an NSF contractor, or a grantee on behalf of NSF, may periodically conduct program evaluations or special projects that necessitate access to project level staff and data. This activity may occur at any time during the grant period and could occur after the grant has ended. Project-level participation includes responding to inquiries, interviews and other methods of common data collection and/or aggregation across individual grants. In addition, PIs and project-level evaluators will be asked to assist in developing a program evaluation that will mutually benefit the agency and program participants.
Annual reports are required for the duration of the project. We will use this report to collect information on the technical progress of the funded NSF work, which will allow the managing Program Director to monitor the project and ensure that the award is in good standing. This report will also be used to ensure awardee compliance with both AccelNet-wide and NSF-wide compliance requirements. Finally, it will be used to collect data by the Office of International Science and Engineering for program evaluation.
All the information collected is for internal use by the Office of International Science and Engineering, and will not be made publicly available.
Nuclear Regulatory Commission.
Environmental assessment and finding of no significant impact; issuance.
The U.S. Nuclear Regulatory Commission (NRC) is considering the amendment of Special Nuclear Materials (SNM) License SNM-2506 for the Prairie Island Nuclear Generating Plant Independent Spent Fuel Storage Installation (PI ISFSI) located in Goodhue County, Minnesota. The NRC has prepared an environmental assessment (EA) for this proposed license amendment in accordance with its regulations. Based on the EA, the NRC has concluded that a finding of no significant impact (FONSI) is appropriate. The NRC also is conducting a safety evaluation of the proposed license renewal.
The EA and FONSI referenced in this document are available on October 8, 2020.
Please refer to Docket ID NRC-2020-0169 when contacting the NRC about the availability of information regarding this document. You may obtain publicly available information related to this document using any of the following methods:
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•
Jean Trefethen, Office of Nuclear Material Safety and Safeguards, U.S. Nuclear Regulatory Commission, Washington, DC 20555-0001; telephone: 301-415-0867, or by email to:
The NRC is considering a license amendment request (LAR) for license SNM-2506 for the PI specifically licensed ISFSI located in Goodhue County, Minnesota (ADAMS Accession No. ML19217A312). The licensee, Northern States Power Company, a Minnesota corporation (NSPM), is requesting to increase the amount of spent fuel stored at the PI ISFSI by adding Transnuclear, Inc. (TN) TN-40/TN-40HT storage casks, adding a new storage pad within the existing ISFSI footprint. If approved, NSPM would be able to increase the maximum amount of spent fuel allowed under renewed license SNM-2506 for the PI ISFSI to 1,049.60 tons of equivalent uranium of spent fuel assemblies, an equivalent capacity of 64 TN-40HT casks.
The NRC staff has prepared a final EA as part of its review of this license renewal request in accordance with the requirements of part 51 of title 10 of the
NSPM is requesting to amend license SNM-2506 for the PI specifically licensed ISFSI to increase the amount of spent fuel allowed. The NRC has assessed the potential environmental impacts of the proposed action and alternatives to the proposed action, shipment of spent fuel to an offsite facility, and the no-action alternative. The results of the NRC's environmental review can be found in the final EA (ADAMS Accession No. ML20275A342). The NRC staff performed its environmental review in accordance with the requirements in 10 CFR part 51. In conducting the environmental review, the NRC considered information in the LAR to expand the ISFSI (ADAMS Accession No. ML19217A313); communications and consultation with the Minnesota State Historic Preservation Office (SHPO); as well as information provided by the Prairie Island Indian Community (PIIC) and 26 additional Native American Tribes; the Minnesota-Wisconsin Ecological Services Field Office of Fish and Wildlife; the Minnesota State Department of Health; the Minnesota Environmental Quality Board, the Minnesota Department of Commerce, the Minnesota Pollution Control Agency, the Minnesota Department of Natural Resources, and the Environmental Protection Agency Region 5.
Approval of NSPM's proposed LAR would allow NSPM to increase the amount of spent fuel stored at the PI ISFSI, allowing up to 64 storage casks and adding a new storage pad within the existing ISFSI footprint. The estimated annual dose to the nearest permanent resident from ISFSI activities is 0.0434 mSv/yr (4.34 mrem/yr) (ADAMS Accession No. ML19217A313), which is below the 0.25 mSv/yr (25 mrem/yr) limit specified in 10 CFR 72.104(a) and the 1 mSv/yr (100 mrem/yr) limit specified in 10 CFR 20.1301(a)(1). Furthermore, NSPM maintains a radiation protection program for the ISFSI in accordance with 10 CFR part 20 to ensure that radiation doses are as low as is reasonably achievable (ALARA). Accordingly, no significant radiological or non-radiological impacts are expected to result from approval of the ISFSI expansion request, and the proposed action would not significantly contribute to cumulative impacts at the PI site. Additionally, there would be no disproportionately high and adverse impacts on minority and low-income populations.
In its LAR, NSPM is proposing no changes in how it handles, and stores spent fuel at the PI ISFSI. In its LAR, NSPM commits to following their Cultural Resource Management Plan during all ground-disturbing expansion activities. Approval of the proposed action is not expected to result in new construction or expansion beyond the existing ISFSI footprint. The ISFSI is a largely passive facility that produces no liquid or gaseous effluents. No significant radiological or non-radiological impacts are expected from the expansion or continued normal operations. Occupational dose estimates associated with the expansion and continued normal operation and maintenance of the ISFSI are expected to be at ALARA levels and within the limits of 10 CFR 20.1201. Therefore, the NRC staff has determined that pursuant to 10 CFR 51.31, preparation of an EIS is not required for the proposed action, and pursuant to 10 CFR 51.32, a FONSI is appropriate.
Furthermore, the NRC staff determined that this LAR does not have the potential to cause effects on historic properties, assuming those were present; therefore, in accordance with 36 CFR 800.3(a)(1), no consultation is required under Section 106 of the National Historic Preservation Act.” The NRC staff consulted with the Minnesota SHPO via letter dated December 17, 2019, (ADAMS Package Accession No. ML19311C631) and May 28, 2020 (ADAMS Package Accession No. ML20140A115). The Minnesota SHPO responded via letter dated August 10, 2020, indicating they concurred on the finding of no effect (ADAMS Accession No. ML20223A064). Additionally, the NRC staff contacted the PIIC and 26 additional Native American Tribes and provided its determination via letters dated December 19, 2019 (ADAMS Package Accession No. ML19312A048). The PIIC responded on January 17, 2020 (ADAMS Accession No. ML20066G473), and the Shakopee Mdewakanton Sioux Community responded via letter dated January 28, 2020 (ADAMS Accession No. ML20035D132); both indicated that they concurred with the determination of no effect. The NRC staff, with the assistance of the U.S. Fish and Wildlife Service Information for Planning and Consultation project planning tool, determined that the listed species and/or critical habitat will not be adversely affected by the proposed action.
Based on its review of the proposed action in the EA, in accordance with the requirements in 10 CFR part 51, the NRC has concluded that the proposed action, amendment of NRC license SNM-2506 for the PI ISFSI located in Goodhue County, Minnesota, will not significantly affect the quality of the human environment. Therefore, the NRC has determined, pursuant to 10 CFR 51.31, that preparation of an EIS is not required for the proposed action and a FONSI is appropriate.
For the Nuclear Regulatory Commission.
Nuclear Regulatory Commission.
Order; issuance.
The U.S. Nuclear Regulatory Commission (NRC) issued an Order approving a request, submitted by MP Mine Operations LLC, seeking NRC's consent to the indirect transfers of control of Export License Nos. XSOU8707 and XSOU8827 and requesting approval of a conforming license amendment to reflect the new point-of-contact on Export License Nos. XSOU8707 and XSOU8827.
The Order was issued on September 21, 2020.
Please refer to Docket ID NRC-2020-0222 when contacting the NRC about the availability of information for this action. You may obtain publicly-available information related to this document using any of the following methods:
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Andrea R. Jones, Office of International Programs, U.S. Nuclear Regulatory Commission, Washington, DC 20555-0001, telephone: 404-997-4443, email:
The text of the Order is attached.
For the Nuclear Regulatory Commission.
MP Mine Operations LLC (MPMO or the Licensee) currently holds export licenses XSOU8707 and XSOU8827. The address included on these export licenses is the Mountain Pass rare earth mine and processing facility. On July 15, 2020, MPMO announced a proposed business combination of MPMO Merger LLC and Fortress Value Acquisition Corporation (“FVAC”), (a/k/a “FVAC” Merger LLC III), a publicly traded special purpose acquisition company. Through a series of transactional actions, MPMO will become a direct subsidiary of FVAC Merger LLC III and an indirect subsidiary of MP Materials Corporation, the ultimate parent company. After the proposed business merger is concluded, FVAC's name will change to MP Materials Corporation and MPMO's current majority direct shareholders will become indirect majority shareholders.
The current majority equity holders of MPMO are JHL Capital Group Holdings Two LLC (“JHL”), and QVT Financial LP (“QVT”). JHL and QVT hold membership interests representing 65% and 25%, respectively, of MPMO's outstanding units. After the transaction, JHL and QVT will become indirect majority equity holders of MPMO and equity holders in MP Materials Corp. Additionally, JHL and QVT will hold equity interests of at least 41% and 14%, respectively, in MP Materials Corporation. This combined ownership interest will indirectly represent a majority interest in MPMO. No other single shareholder will hold an interest in MP Materials Corporation of greater than 8%. JHL and QVT will jointly and indirectly own a majority interest in MPMO.
By letter dated August 17, 2020 (ADAMS Accession No. ML20233A654) (ADAMS Accession Nos. ML20233A60 and ML20233A643), respectively, MPMO requested approval from the U.S. Nuclear Regulatory Commission (NRC) for the indirect transfer of control of export licenses XSOU8707 and XSOU8827, resulting in the creation of a new parent company MP Materials Corporation. This request was made pursuant to Section 184 of the Atomic Energy Act of 1954, as amended (AEA) (42 U.S.C. 2234) and part 110, section 50, paragraph d of Title 10 of the
The letter dated August 17, 2020 was made publicly available in ADAMS on August 19, 2020. The NRC received one comment. The commenter requested that the matter be held in abeyance pending a Federal government-wide review, including a review by the Committee on Foreign Investment in the United States (CFIUS), of the national security impacts of the proposed transaction. The commenter claims that the transaction will result in a Chinese company, Shenghe Resources Holding Co., Ltd. (Shenghe Resources), having a minority interest in the ultimate parent company through a subsidiary. The commenter does not mention, however, that Leshan Shenghe Rare Earth Co., Ltd. (Leshan Shenghe), the subsidiary of Shenghe Resources currently already holds a minority interest in the existing licensee, and that post-transaction Leshan Shenghe would continue to be a minority owner of the licensee. To the extent Leshan Shenghe's ownership interest changes, the change would be
Pursuant to Section 184 of the AEA (42 U.S.C. 2234), no license granted by the Commission shall be transferred, assigned, or in any manner disposed of, directly or indirectly, through transfer of control of any license to any person unless the Commission, after securing full information, finds that the transfer is in accordance with the provisions of the AEA, and gives its consent in writing. Pursuant to 10 CFR 110.50(d), a specific export license may be transferred, disposed of, or assigned to another person only with the approval of the Commission by license amendment. And pursuant to 10 CFR 110.51(a)(1), an application requesting amendment of an export license shall be filed on NRC Form 7, “
After review of MPMO's supplemental information dated August 11, 2020 (ADAMS Accession No. ML20238B854), export applications XSOU8707 and XSOU8827 dated August 19, 2020 (ADAMS Accession Nos. ML20233A60 and ML20233A643; respectively), and MPMO's “Expedited Review and Any Necessary Consent for Indirect Change of Control of MP Mine Operations LLC, Export License Nos. XSOU8707 and XSOU8827”, dated August 17, 2020 (ADAMS Accession No. ML20233A654), the NRC staff has determined that the transfer of control is consistent with the applicable provisions of the AEA, regulations, and orders issued by the Commission. The NRC staff has further determined that the request for the proposed conforming license amendment complies with the standards and requirements of the AEA, and the NRC's regulations set forth in 10 CFR part 110. The transfer of control of the license and issuance of the conforming license amendment will not be inimical to the common defense and security, or to the health and safety of the public, or the environment, and all applicable requirements have been satisfied.
For further details with respect to this Order, see MPMO's supplemental information dated August 11, 2020 (ADAMS Accession No. ML20238B854), export applications XSOU8707 and XSOU8827 dated August 19, 2020 (ADAMS Accession No. ML20233A60 and ML20233A643, respectively),
Accordingly, pursuant to Section 184 of the AEA, 10 CFR 110.50(d), and 10 CFR 110.51(c),
This Order is effective upon issuance. Issuance of this Order does not preclude or foreclose any future NRC enforcement action, if warranted, to address any previous violations of NRC requirements.
Dated at Rockville, Maryland, this 21st day of September 2020.
For the Nuclear Regulatory Commission.
Nuclear Regulatory Commission.
Renewal of existing information collection; request for comments.
The U.S. Nuclear Regulatory Commission (NRC) invites public comment on the renewal of Office of Management and Budget (OMB) approval for an existing collection of information. The information collection is entitled, NRC Form 483, “Registration Certificate—In Vitro Testing with Byproduct Material Under General License.”
Submit comments by December 7, 2020. Comments received after this date will be considered if it is practical to do so, but the Commission is able to ensure consideration only for comments received on or before this date.
You may submit comments by any of the following methods:
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For additional direction on obtaining information and submitting comments, see “Obtaining Information and Submitting Comments” in the
David Cullison, Office of the Chief Information Officer, U.S. Nuclear Regulatory Commission, Washington, DC 20555-0001; telephone: 301-415-2084; email:
Please refer to Docket ID NRC-2020-0221 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:
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Please include Docket ID NRC-2020-0221 in the subject line of your comment submission, in order to ensure that the NRC is able to make your comment submission available to the public in this docket.
The NRC cautions you not to include identifying or contact information in comment submissions that you do not want to be publicly disclosed in your comment submission. The NRC will post all comment submissions at
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.
In accordance with the Paperwork Reduction Act of 1995 (44 U.S.C. Chapter 35), the NRC is requesting public comment on its intention to request the OMB's approval for the information collection summarized below.
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The NRC is seeking comments that address the following questions:
1. Is the proposed collection of information necessary for the NRC to properly perform its functions? Does the information have practical utility?
2. Is the estimate of the burden of the information collection accurate?
3. Is there a way to enhance the quality, utility, and clarity of the information to be collected?
4. How can the burden of the information collection on respondents be minimized, including the use of automated collection techniques or other forms of information technology?
For the Nuclear Regulatory Commission.
Nuclear Regulatory Commission.
Notice of submission to the Office of Management and Budget; request for comment.
The U.S. Nuclear Regulatory Commission (NRC) has recently submitted a request for renewal of an existing collection of information to the Office of Management and Budget (OMB) for review. The information collection is entitled, “Standard Specifications for the Granting of Patent Licenses.”
Submit comments by November 9, 2020. Comments received after this date will be considered if it is practical to do so, but the Commission is able to ensure consideration only for comments received on or before this date.
Written comments and recommendations for the proposed information collection should be sent within 30 days of publication of this notice to
David Cullison, NRC Clearance Officer, U.S. Nuclear Regulatory Commission, Washington, DC 20555-0001; telephone: 301-415-2084; email:
Please refer to Docket ID NRC-2020-0049 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:
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Please include Docket ID NRC-2020-0049 in the subject line of your comment submission, in order to ensure that the NRC is able to make your comment submission available to the public in this docket.
The NRC cautions you not to include identifying or contact information in comment submissions that you do not want to be publicly disclosed in your comment submission. All comment submissions are posted at
If you are requesting or aggregating comments from other persons for submission to the OMB, 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
Under the provisions of the Paperwork Reduction Act of 1995 (44 U.S.C. Chapter 35), the NRC recently submitted a request for renewal of an existing collection of information to OMB for review entitled, “Standard Specifications for the Granting of Patent Licenses.” The NRC hereby informs potential respondents that an agency may not conduct or sponsor, and that a person is not required to respond to, a collection of information unless it displays a currently valid OMB control number.
The NRC published a
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For the Nuclear Regulatory Commission.
Nuclear Regulatory Commission.
Renewal of existing information collection; request for comment.
The U.S. Nuclear Regulatory Commission (NRC) invites public comment on the renewal of Office of Management and Budget (OMB) approval for an existing collection of information. The information collection is entitled, “Domestic Licensing of Special Nuclear Material.”
Submit comments by December 7, 2020. Comments received after this date will be considered if it is practical to do so, but the Commission is able to ensure consideration only for comments received on or before this date.
You may submit comments by any of the following methods:
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For additional direction on obtaining information and submitting comments, see “Obtaining Information and Submitting Comments” in the
David Cullison, Office of the Chief Information Officer, U.S. Nuclear Regulatory Commission, Washington, DC 20555-0001; telephone: 301-415-2084; email:
Please refer to Docket ID NRC-2020-0102 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:
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Please include Docket ID NRC-2020-0102 in the subject line of your comment submission, in order to ensure that the NRC is able to make your comment submission available to the public in this docket.
The NRC cautions you not to include identifying or contact information in comment submissions that you do not want to be publicly disclosed in your comment submission. The NRC will post all comment submissions at
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.
In accordance with the Paperwork Reduction Act of 1995 (44 U.S.C. Chapter 35), the NRC is requesting public comment on its intention to request the OMB's approval for the information collection summarized below.
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The NRC is seeking comments that address the following questions:
1. Is the proposed collection of information necessary for the NRC to properly perform its functions? Does the information have practical utility?
2. Is the estimate of the burden of the information collection accurate?
3. Is there a way to enhance the quality, utility, and clarity of the information to be collected?
4. How can the burden of the information collection on respondents be minimized, including the use of automated collection techniques or other forms of information technology?
For the Nuclear Regulatory Commission.
Postal Regulatory Commission.
Notice.
The Commission is noticing a recent Postal Service filing for the Commission's consideration concerning negotiated service agreements. This notice informs the public of the filing, invites public comment, and takes other administrative steps.
Submit comments electronically via the Commission's Filing Online system at
David A. Trissell, General Counsel, at 202-789-6820.
The Commission gives notice that the Postal Service filed request(s) for the Commission to consider matters related to negotiated service agreement(s). The request(s) may propose the addition or removal of a negotiated service agreement from the market dominant or the competitive product list, or the modification of an existing product currently appearing on the market dominant or the competitive product list.
Section II identifies the docket number(s) associated with each Postal Service request, the title of each Postal Service request, the request's acceptance date, and the authority cited by the Postal Service for each request. For each request, the Commission appoints an officer of the Commission to represent the interests of the general public in the proceeding, pursuant to 39 U.S.C. 505 (Public Representative). Section II also establishes comment deadline(s) pertaining to each request.
The public portions of the Postal Service's request(s) can be accessed via the Commission's website (
The Commission invites comments on whether the Postal Service's request(s) in the captioned docket(s) are consistent with the policies of title 39. For request(s) that the Postal Service states concern market dominant product(s), applicable statutory and regulatory requirements include 39 U.S.C. 3622, 39 U.S.C. 3642, 39 CFR part 3030, and 39 CFR part 3040, subpart B. For request(s) that the Postal Service states concern competitive product(s), applicable statutory and regulatory requirements include 39 U.S.C. 3632, 39 U.S.C. 3633, 39 U.S.C. 3642, 39 CFR part 3035, and 39 CFR part 3040, subpart B. Comment deadline(s) for each request appear in section II.
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This Notice will be published in the
On July 30, 2020, Cboe BZX Exchange, Inc. (the “Exchange”) filed with the Securities and Exchange Commission (the “Commission”), pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934 (the “Act”)
The Exchange proposed certain amendments to the Parent Bylaws that, according to the Exchange, would “improve the governance processes” of the Parent and “make certain provisions more consistent with the Delaware General Corporation Law (“DGCL”).”
The majority of the proposed changes amend Section 2.11 (Nomination of Directors) and Section 2.12 (Notice of Business at Annual Meetings). According to the Exchange, the changes are designed to reflect the most up-to-date practices under the DGCL and provide the Board with additional information and advance notice in connection with nominations and the conduct of business at annual and special meetings. In particular, the Exchange combines current Section 2.12 into Section 2.11 and amends provisions that govern notice requirements for annual and special meetings, as well as provisions that provide general procedures and practices in connection with notices. The proposed delineation does not alter the process or definition of either type of meeting, but instead provides for significantly more detailed written notice requirements as well as updates to the manner and timeliness of notices.
Additionally, as detailed further in the Notice, the proposed rule change relocates and expands text concerning nominees for directors and elections of directors, as well as amends provisions concerning the place of annual and special meetings and the adjournment of meetings.
Further, the Exchange proposes to update provisions that govern the preparing of the voting list, the ability of the Board to appoint a director to preside over meetings in the absence of the Chairman of the Board, and provisions concerning the procedural authority of the presiding officer at any stockholder meeting.
The proposed rule change amends provisions concerning director vacancies, notice for special meetings of the Board, and the routine filing of consents following an action by the Board.
The proposed change also adds new Section 3.15 (Emergency Bylaws). In particular, that new section provides certain temporary emergency provisions that would apply at the outset of an emergency, disaster, or catastrophe, notwithstanding anything to the contrary in the Certificate of Incorporation or the Bylaws, only for so long as a quorum of the Board cannot readily be convened for action. The Exchange notes that proposed Section 3.15 is meant to provide the Parent with short-term flexibility to continue operations during an emergency situation, and that proposed paragraph (f) makes clear that, as soon as it is practicable for a majority of the elected directors to reconvene, they would be expected to do so.
The proposed rule change to Section 4.1 (Designation of Committees) adds language to reflect that the Board may designate one or more committees of the Board, and also adds text to address the absence or disqualification of committee members and allow committee members
The proposed rule change to Section 4.2 (The Executive Committee) replaces a list of specific actions and matters that are not to be handled by the Executive Committee and replaces it with a reference to matters under the DGCL that are to be submitted to stockholders for approval.
The proposed change to Section 4.5 (The Nominating and Governance Committee) reduces the minimum size requirement of that committee from five members to three members.
The proposed rule changes in Section 8.1 (Notices) allow notices sent by messenger or overnight courier to be left at the recipient's address and also updates language concerning delivery by electronic mail and when electronic mail delivery is not allowed. The Exchange also proposes to amend Section 8.2 (Electronic Notice) to allow for electronic delivery of materials to stockholders unless the stockholder has opted-out of electronic transmission (currently, electronic transmission is permitted only when a stockholder has opted-in to electronic delivery).
The proposed rule changes to Article 11 add clarifying provisions and additional detail regarding the exclusive forum for adjudication of disputes.
Finally, the proposed rule change makes non-substantive edits to the Parent Bylaws, including updating paragraph lettering and numbering and ensuring consistent use of defined terms.
After careful review, the Commission finds that the proposed rule change, as modified by Amendment No. 1, is consistent with the requirements of the Act and the rules and regulations thereunder applicable to a national securities exchange.
The proposed rule change reflects the Exchange's stated goals to improve the governance process of the Parent and update the Parent Bylaws to reflect and track the DGCL and current best practices.
The Commission believes that the proposed rule change, as modified by Amendment No. 1, is consistent with the Exchange Act, including Section 6(b)(1) thereunder, in that the Exchange, and its Parent on the Exchange's behalf as applicable, will remain so organized and have the capacity to be able to carry out the purposes of the Exchange Act and to comply, and enforce compliance by its members and persons associated with its members, with the provisions of the Exchange Act, the rules and regulations thereunder, and the rules of the Exchange.
While proposed Section 3.15 will provide the Parent with special limited powers to ensure continued operations at the onset of an emergency situation that otherwise prevents the Board from obtaining the necessary quorum to convene and exercise its power, that section is intended only to provide limited short-term flexibility to ensuring continue operations of the Parent during the initial stage of the emergency situation. Pursuant to proposed paragraph (f), a majority of the elected directors are expected to reconvene as soon as it is possible to do so. In addition, the provisions in new Section 3.15 concerning amendments to the Parent Bylaws remain subject to existing Section 10.2 and, as applicable, the rule filing requirements of Section 19 of the Act.
Interested persons are invited to submit written data, views, and arguments concerning the foregoing, including whether Amendment No. 1 is consistent with the Act. Comments may be submitted by any of the following methods:
• Use the Commission's internet comment form (
• Send an email to
• Send paper comments in triplicate to Secretary, Securities and Exchange Commission, 100 F Street NE, Washington, DC 20549-1090.
The Commission finds good cause for approving the proposed rule change, as amended by Amendment No. 1, prior to the 30th day after the date of publication of notice in the
For the Commission, by the Division of Trading and Markets, pursuant to delegated authority.
On June 18, 2020, NYSE Arca, Inc. (“Exchange” or “NYSE Arca”) filed with the Securities and Exchange Commission (“Commission”), pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934 (“Act” or “Exchange Act”)
On August 17, 2020, pursuant to Section 19(b)(2) of the Act,
The Exchange proposes to amend NYSE Arca Rules 5.2-E(j)(3) and 5.5-E(g)(2) (Investment Company Units), 5.2-E(j)(8) (Exchange-Traded Fund Shares), 8.600-E (Managed Fund Shares), and 8.900-E (Managed Portfolio Shares) (collectively, “Fund Shares”) to (1) remove the listing requirement that, following the initial twelve-month period after commencement of trading of a series of Investment Company Units, Exchange-Traded Fund Shares, Managed Fund Shares or Managed Portfolio Shares, respectively, on the Exchange, such series have at least 50 beneficial holders, and (2) replace the existing minimum number of shares requirements
The Exchange believes that the requirement that a series of Fund Shares listed on the Exchange must have at least 50 beneficial shareholders is no longer necessary. The Exchange believes that the requirements of Rule 6c-11 under the 1940 Act and, in particular, the website disclosure requirements of Rule 6c-11(c), together with the existing creation and redemption process, serve to mitigate the risks of manipulation and lack of liquidity that the shareholders requirement was intended to address. The Exchange further believes that requiring at least one creation unit to be outstanding at all times, together with the enhanced disclosure requirements of Rule 6c-11, will facilitate an effective arbitrage mechanism that, for Investment Company Units, Managed Fund Shares, and Exchange-Traded Fund Shares, will provide investors with sufficient transparency into the holdings of the underlying portfolio and help ensure that the trading price in the secondary market remains in line with the value per share of a fund's portfolio. As an example, the Exchange notes that Rule 6c-11(c)(1)(vi) requires additional disclosure if the premium or discount is in excess of 2% for more than seven consecutive days, so that there would be transparency to investors in the event there are indications of an inefficient arbitrage mechanism.
With respect to Managed Portfolio Shares, while these securities do not publicly disclose their portfolio holdings daily and are not eligible to rely on Rule 6c-11, the Exchange believes that the applicable Verified Intraday Indicative Value and other information required to be disseminated in connection with the listing and trading of Managed Portfolio Shares ensures transparency of key values and information, and that such information is sufficient to support an effective arbitrage process, independent of any minimum shareholders requirement.
The Exchange states that the arbitrage mechanism generally causes the market price and the net asset value per share to align, and the functioning of the arbitrage mechanism helps to ensure that the trading price in the secondary market is at fair value. The Exchange further states that the existence of the creation and redemption process, as well as the proposed requirement that at least one creation unit is always
The Commission is instituting proceedings pursuant to Section 19(b)(2)(B) of the Act
Pursuant to Section 19(b)(2)(B) of the Act,
The Commission has consistently recognized the importance of the minimum number of holders and other similar requirements in exchange listing standards. Among other things, such listing standards help ensure that exchange listed securities have sufficient public float, investor base, and trading interest to provide the depth and liquidity necessary to promote fair and orderly markets.
As discussed above, the Exchange is proposing to (1) remove the listing requirement that, following the initial twelve-month period after commencement of trading of a series of Fund Shares on the Exchange, such series have at least 50 beneficial holders, and (2) replace the existing minimum number of shares requirements with a requirement that a series of Fund Shares have at least one creation unit outstanding on an initial and continued listing basis. In support of its proposal, the Exchange asserts that, for Investment Company Units, Exchange-Traded Fund Shares and Managed Fund Shares, the portfolio and other disclosure requirements of Rule 6c-11 under the 1940 Act, together with the requirement that there be at least one creation unit outstanding, would facilitate efficient arbitrage and mitigate the manipulation and liquidity risks that the minimum number of beneficial holders requirement was intended to address. With respect to Managed Portfolio Shares, the Exchange asserts that the existing requirement to disseminate the Verified Intraday Indicative Value and related information supports an effective arbitrage process and achieves those goals. The Exchange also believes its surveillance procedures and trading halt authority would further mitigate regulatory concerns. The Exchange does not specifically address the proposed elimination of its existing minimum number of shares requirements.
While the Exchange takes the position that existing disclosure requirements, together with the creation and redemption process, sufficiently mitigate the risks of manipulation and lack of liquidity that the minimum shareholders requirement was intended to address, the Exchange does not explain in any detail the basis for this view, particularly if a series of Fund Shares is permitted to have a very small number of beneficial holders. For example, the Exchange does not address how the arbitrage mechanism will assure Fund Shares with very few holders are sufficiently liquid to support fair and orderly markets. The Exchange also does not discuss potential inefficiencies in the arbitrage mechanism that might occur with illiquid Fund Shares that have very few holders, and the impact that would have on the ability of the arbitrage mechanism to effectively mitigate the risks of manipulation. Further, the Exchange does not address the impact of creation unit size on the efficiency of the arbitrage mechanism (
The Exchange provides no specific arguments to support the proposed elimination of its existing minimum number of shares requirements. While the Exchange proposes to replace those requirements with a requirement that a series of Fund Shares have a number of shares outstanding equal to at least one creation unit, the Exchange does not explain why this is an appropriate substitute for its existing standards. Creation unit sizes could be highly variable, since they are determined at the discretion of the issuer of Fund Shares, and the Exchange has not articulated how this new standard would effectively support fair and orderly markets, address the risks of manipulation, and otherwise be consistent with Section 6(b)(5) and other relevant provisions of the Act.
Finally, the Exchange takes the position that its surveillance procedures and trading halt authority for Fund Shares would further mitigate regulatory concerns. The Exchange, however, does not explain in any detail the basis for this view, or how specifically these existing procedures would effectively mitigate the risks addressed by the minimum number of beneficial holders and minimum number of shares requirements the Exchange is proposing to eliminate.
Under the Commission's Rules of Practice, the “burden to demonstrate that a proposed rule change is consistent with the Exchange Act and the rules and regulations issued thereunder . . . is on the self-regulatory organization [`SRO'] that proposed the rule change.”
For these reasons, the Commission believes it is appropriate to institute proceedings pursuant to Section 19(b)(2)(B) of the Act to determine whether the proposal should be approved or disapproved.
The Commission requests that interested persons provide written submissions of their views, data, and arguments with respect to the issues identified above, as well as any other concerns they may have with the proposal. In particular, the Commission invites the written views of interested persons concerning whether the proposal is consistent with Section 6(b)(5) or any other provision of the Act, or the rules and regulations thereunder. Although there do not appear to be any issues relevant to approval or disapproval that would be facilitated by an oral presentation of views, data, and arguments, the Commission will consider, pursuant to Rule 19b-4, any request for an opportunity to make an oral presentation.
Interested persons are invited to submit written data, views, and arguments regarding whether the proposal should be approved or disapproved by October 29, 2020. Any person who wishes to file a rebuttal to any other person's submission must file that rebuttal by November 12, 2020. The Commission asks that commenters address the sufficiency of the Exchange's statements in support of the proposal, which are set forth in the Notice,
Comments may be submitted by any of the following methods:
• Use the Commission's internet comment form (
• Send an email to
• Send paper comments in triplicate to Secretary, Securities and Exchange Commission, 100 F Street NE, Washington, DC 20549-1090.
For the Commission, by the Division of Trading and Markets, pursuant to delegated authority.
On July 30, 2020, Cboe EDGA Exchange, Inc. (the “Exchange”) filed with the Securities and Exchange Commission (the “Commission”), pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934 (the “Act”)
The Exchange proposed certain amendments to the Parent Bylaws that, according to the Exchange, would “improve the governance processes” of the Parent and “make certain provisions more consistent with the Delaware General Corporation Law (“DGCL”).”
The majority of the proposed changes amend Section 2.11 (Nomination of Directors) and Section 2.12 (Notice of Business at Annual Meetings). According to the Exchange, the changes are designed to reflect the most up-to-date practices under the DGCL and provide the Board with additional information and advance notice in connection with nominations and the conduct of business at annual and special meetings. In particular, the Exchange combines current Section 2.12 into Section 2.11 and amends provisions that govern notice requirements for annual and special meetings, as well as provisions that provide general procedures and practices in connection with notices. The proposed delineation does not alter the process or definition of either type of meeting, but instead provides for significantly more detailed written notice requirements as well as updates to the manner and timeliness of notices.
Additionally, as detailed further in the Notice, the proposed rule change relocates and expands text concerning nominees for directors and elections of directors, as well as amends provisions concerning the place of annual and special meetings and the adjournment of meetings.
Further, the Exchange proposes to update provisions that govern the preparing of the voting list, the ability of the Board to appoint a director to preside over meetings in the absence of the Chairman of the Board, and provisions concerning the procedural authority of the presiding officer at any stockholder meeting.
The proposed rule change amends provisions concerning director vacancies, notice for special meetings of the Board, and the routine filing of consents following an action by the Board.
The proposed change also adds new Section 3.15 (Emergency Bylaws). In particular, that new section provides certain temporary emergency provisions that would apply at the outset of an emergency, disaster, or catastrophe, notwithstanding anything to the contrary in the Certificate of Incorporation or the Bylaws, only for so long as a quorum of the Board cannot readily be convened for action. The Exchange notes that proposed Section 3.15 is meant to provide the Parent with short-term flexibility to continue operations during an emergency situation, and that proposed paragraph (f) makes clear that, as soon as it is practicable for a majority of the elected directors to reconvene, they would be expected to do so.
The proposed rule change to Section 4.1 (Designation of Committees) adds language to reflect that the Board may designate one or more committees of the Board, and also adds text to address the absence or disqualification of committee members and allow committee members to unanimously appoint another Director to act at the meeting in place of any such absent or disqualified member. In addition, the Exchange proposes to add text to reflect the power and authority of Board committees.
The proposed rule change to Section 4.2 (The Executive Committee) replaces a list of specific actions and matters that are not to be handled by the Executive Committee and replaces it with a reference to matters under the DGCL that are to be submitted to stockholders for approval.
The proposed change to Section 4.5 (The Nominating and Governance Committee) reduces the minimum size requirement of that committee from five members to three members.
The proposed rule changes in Section 8.1 (Notices) allow notices sent by messenger or overnight courier to be left at the recipient's address and also updates language concerning delivery by electronic mail and when electronic mail delivery is not allowed. The Exchange also proposes to amend Section 8.2 (Electronic Notice) to allow for electronic delivery of materials to stockholders unless the stockholder has opted-out of electronic transmission (currently, electronic transmission is permitted only when a stockholder has opted-in to electronic delivery).
The proposed rule changes to Article 11 add clarifying provisions and additional detail regarding the exclusive forum for adjudication of disputes.
Finally, the proposed rule change makes non-substantive edits to the Parent Bylaws, including updating paragraph lettering and numbering and ensuring consistent use of defined terms.
After careful review, the Commission finds that the proposed rule change, as modified by Amendment No. 1, is consistent with the requirements of the Act and the rules and regulations thereunder applicable to a national securities exchange.
The proposed rule change reflects the Exchange's stated goals to improve the governance process of the Parent and update the Parent Bylaws to reflect and track the DGCL and current best practices.
The Commission believes that the proposed rule change, as modified by Amendment No. 1, is consistent with the Exchange Act, including Section 6(b)(1) thereunder, in that the Exchange, and its Parent on the Exchange's behalf as applicable, will remain so organized and have the capacity to be able to carry out the purposes of the Exchange Act and to comply, and enforce compliance by its members and persons associated with its members, with the provisions of the Exchange Act, the rules and regulations thereunder, and the rules of the Exchange.
While proposed Section 3.15 will provide the Parent with special limited powers to ensure continued operations at the onset of an emergency situation that otherwise prevents the Board from obtaining the necessary quorum to convene and exercise its power, that section is intended only to provide limited short-term flexibility to ensuring continue operations of the Parent during the initial stage of the emergency situation. Pursuant to proposed paragraph (f), a majority of the elected directors are expected to reconvene as soon as it is possible to do so. In addition, the provisions in new Section 3.15 concerning amendments to the Parent Bylaws remain subject to existing Section 10.2 and, as applicable, the rule filing requirements of Section 19 of the Act.
Interested persons are invited to submit written data, views, and arguments concerning the foregoing, including whether Amendment No. 1 is consistent with the Act. Comments may be submitted by any of the following methods:
• Use the Commission's internet comment form (
• Send an email to
• Send paper comments in triplicate to Secretary, Securities and Exchange Commission, 100 F Street NE, Washington, DC 20549-1090.
The Commission finds good cause for approving the proposed rule change, as amended by Amendment No. 1, prior to the 30th day after the date of publication of notice in the
For the Commission, by the Division of Trading and Markets, pursuant to delegated authority.
Pursuant to Section 19(b)(1)
The Exchange proposes to amend Section 220 of the NYSE American Company Guide (the “Company Guide”) to amend Section 220(b) to remove a limitation on original listing fees for any company listed on a foreign stock exchange. The proposed change is available on the Exchange's website at
In its filing with the Commission, the self-regulatory organization included statements concerning the purpose of, and basis for, the proposed rule change and discussed any comments it received on the proposed rule change. The text of those statements may be examined at the places specified in Item IV below. The Exchange has prepared summaries, set forth in sections A, B, and C below, of the most significant parts of such statements.
Section 220 of the Company Guide provides that the original listing fee for companies listed on foreign stock exchanges, including the one-time charge, is 50% of the rate for domestic companies, with a maximum fee of $32,500.
The Exchange believes that the proposed rule change is consistent with Section 6(b) of the Act,
The Exchange operates in a highly competitive marketplace for the listing of equity securities. The Commission has repeatedly expressed its preference for competition over regulatory intervention in determining prices, products, and services in the securities markets.
The Exchange believes that the ever shifting market share among the exchanges with respect to new listings and the transfer of existing listings between competitor exchanges demonstrates that issuers can choose different listing markets in response to fee changes. Accordingly, competitive forces constrain exchange listing fees. Stated otherwise, changes to exchange listing fees can have a direct effect on the ability of an exchange to compete for new listings and retain existing listings.
The Exchange believes that it does not constitute an inequitable allocation of fees and is not unfairly discriminatory to remove the cap on original listing fees for companies that are listed on a foreign stock exchange and to charge the same original listing fees to those companies as are charged to other newly-listed companies, because the Exchange expends similar resources in the listing of those companies as for the listing of domestic companies. In addition, the Exchange notes that companies listed on foreign stock exchanges will pay according to the same fee schedule as all other listed companies under the amended rule.
For the foregoing reasons, the Exchange believes that the proposal is consistent with the Act.
The Exchange does not believe that the proposed rule change would impose any burden on competition that is not necessary or appropriate in furtherance of the purposes of the Act.
As amended, all newly listed companies would pay original listing fees on the same basis. The Exchange does not believe that the proposed rule change would have any meaningful effect on the competition among issuers listed on the Exchange.
The Exchange operates in a highly competitive market in which issuers can readily choose to list new securities on other exchanges and transfer listings to other exchanges if they deem fee levels at those other venues to be more favorable. Because competitors are free to modify their own fees in response, and because issuers may change their listing venue, the Exchange does not believe its proposed fee change can impose any burden on intermarket competition.
No written comments were solicited or received with respect to the proposed rule change.
The foregoing rule change is effective upon filing pursuant to Section 19(b)(3)(A)
At any time within 60 days of the filing of such proposed rule change, the Commission summarily may temporarily suspend such rule change if
Interested persons are invited to submit written data, views, and arguments concerning the foregoing, including whether the proposed rule change is consistent with the Act. Comments may be submitted by any of the following methods:
• Use the Commission's internet comment form (
• Send an email to
• Send paper comments in triplicate to Secretary, Securities and Exchange Commission, 100 F Street NE, Washington, DC 20549-1090.
For the Commission, by the Division of Trading and Markets, pursuant to delegated authority.
Pursuant to Section 19(b)(1)
The Exchange proposes to harmonize Rules 9261 and 9830 with recent changes by the Financial Industry Regulatory Authority, Inc. (“FINRA”) that temporarily grants the Chief or Deputy Chief Hearing Officer the authority to order that hearings be conducted by video conference if warranted by public health risks posed by in-person hearings during the ongoing novel coronavirus (“COVID-19”) pandemic. As proposed, these temporary amendments would be in effect through December 31, 2020. The proposed rule change is available on the Exchange's website at
In its filing with the Commission, the self-regulatory organization included statements concerning the purpose of, and basis for, the proposed rule change and discussed any comments it received on the proposed rule change. The text of those statements may be examined at the places specified in Item IV below. The Exchange has prepared summaries, set forth in sections A, B, and C below, of the most significant parts of such statements.
The Exchange proposes to harmonize Rules 9261 (Evidence and Procedure in Hearing) and 9830 (Hearing) with recent changes by FINRA to its Rules 9261 and 9830 that temporarily grants to the Chief or Deputy Chief Hearing Officer the authority to order that hearings be conducted by video conference if warranted by public health risks posed by in-person hearings during the ongoing COVID-19 pandemic. As proposed, these temporary amendments would be in effect through December 31, 2020.
In 2016, NYSE American (then known as NYSE MKT LLC) adopted disciplinary rules that are, with certain exceptions, substantially the same as the Rule 8000 Series and Rule 9000 Series of FINRA and its affiliate, the New York Stock Exchange LLC (“NYSE”), and which set forth rules for conducting investigations and enforcement actions.
In adopting disciplinary rules modeled on FINRA's rules, NYSE American adopted the hearing and evidentiary processes set forth in Rule 9261 and in Rule 9830 for hearings in matters involving temporary and permanent cease and desist orders under the Rule 9800 Series. As adopted, the text of Rule 9261 and Rule 9830 are substantially the same as the FINRA rules with certain modifications.
In view of the ongoing spread of COVID-19 and its effect on FINRA's adjudicatory functions nationwide, FINRA recently filed a temporary rule change to grant FINRA's Office of Hearing Officers (“OHO”) and the National Adjudicatory Council (“NAC”) the authority to conduct certain hearings by video conference, if warranted by the current COVID-19-related public health risks posed by in-person hearings. Among the rules FINRA amended were Rules 9261 and 9830.
FINRA represented in its filing that its protocol for conducting hearings by video conference would ensure that such hearings maintain fair process for the parties by, among other things, FINRA's use of a high quality, secure and user-friendly video conferencing service and provide thorough instructions, training and technical support to all hearing participants.
Pursuant to a regulatory services agreement (“RSA”), FINRA's OHO will administer all aspects of adjudications, including assigning hearing officers to serve as NYSE American hearing officers. A hearing officer from OHO will, among other things, preside over the disciplinary hearing, select and chair the hearing panel, and prepare and issue written decisions. The Chief or Deputy Hearing Officer for all Exchange disciplinary hearings are currently drawn from OHO and are all FINRA employees. The Exchange believes that OHO will utilize the same video conference protocol and processes for Exchange matters under the RSA as it proposes for FINRA matters.
Given that FINRA and its OHO administers disciplinary hearings on the Exchange's behalf, and given that the public health concerns addressed by FINRA's amendments apply equally to the Exchange's disciplinary hearings, the Exchange proposes to temporarily amend its disciplinary rules to allow FINRA to conduct virtual hearings on its behalf.
Rule 9261(b) states that if a disciplinary hearing is held, a party shall be entitled to be heard in-person, by counsel, or by the party's representative. Absent an agreement by all parties to proceed in another manner, Exchange disciplinary hearings are in-person. As noted, the Chief and Deputy Hearing Officers for all Exchange and cross-market matters are supplied by OHO and are FINRA employees. Accordingly, absent an agreement by all parties to proceed in another manner, under Rule 9261(b) the Chief or Deputy Hearing Officer conducts disciplinary hearings in-person.
Similarly, Rule 9830 outlines the requirements for hearings for temporary and permanent cease and desist orders. Rule 9830(a), however, does not specify that a party shall be entitled to be heard in-person, by counsel, or by the party's representative.
Consistent with FINRA's temporary amendment to FINRA Rules 9261 and 9830, the Exchange proposes to temporarily grant the Chief or Deputy Chief Hearing Officer temporary authority to order, upon consideration of the current COVID-19-related public health risks presented by an in-person hearing, that a hearing under those rules be conducted by video conference. The proposed rule change will permit OHO to make an assessment, based on critical COVID-19 data and criteria and the guidance of health and security consultants, whether an in-person hearing would compromise the health and safety of the hearing participants such that the hearing should proceed by video conference. As noted, FINRA has adopted a detailed and thorough protocol to ensure that hearings conducted by video conference will maintain fair process for the parties.
To effectuate these changes, the Exchange proposes to add the following sentence to Rule 9261(b):
Upon consideration of the current public health risks presented by an in-person hearing, the Chief Hearing Officer or Deputy Chief Hearing Officer may, on a temporary basis, determine that the hearing shall be conducted, in whole or in part, by video conference.
The proposed text is identical to the language adopted by FINRA.
Similarly, the Exchange proposes to add the following text to Rule 9830(a):
Upon consideration of the current public health risks presented by an in-person hearing, the Chief Hearing Officer or Deputy Chief Hearing Officer may, on a temporary basis, determine that the hearing shall be conducted, in whole or in part, by video conference.
Once again, the proposed language is identical to the language adopted by FINRA.
The proposed rule change is consistent with Section 6(b) of the Act,
The Exchange believes that the proposed rule change supports the objectives of the Act by providing greater harmonization between Exchange rules and FINRA rules of similar purpose, resulting in less burdensome and more efficient regulatory compliance. As previously noted, the text of Rule 9261 and Rule 9830 is substantially the same as FINRA's rule. As such, the proposed rule change will foster cooperation and coordination with persons engaged in facilitating transactions in securities and will remove impediments to and perfect the mechanism of a free and open market and a national market system.
The Exchange believes that the proposed temporary rule change will permit the Exchange to effectively conduct hearings during the COVID-19 pandemic in situations where in-person hearings present likely public health risks. The ability to conduct hearings by video conference will thereby permit the adjudicatory functions of the Exchange's disciplinary rules to continue unabated, thereby avoiding protracted delays. The Exchange believes that this is especially important in matters where temporary and permanent cease and desist orders are sought because the proposed rule change would enable those hearings to proceed without delay, thereby enabling the Exchange to take immediate action to stop significant, ongoing customer harm, to the benefit of the investing public.
Conducting hearings via video conference will give the parties and adjudicators simultaneous visual and oral communication without the risks inherent in physical proximity during a pandemic. Temporarily permitting hearings for disciplinary matters to proceed by video conference maintains fair process by providing respondents a timely opportunity to address and potentially resolve any allegations of misconduct.
As noted, FINRA will use a high quality, secure video conferencing technology with features that will allow the parties to reasonably approximate those tasks that are typically performed at an in-person hearing, such as sharing documents, marking documents, and utilizing breakout rooms. FINRA will also provide training for participants on how to use the video conferencing platform and detailed guidance on the procedures that will govern such hearings. Moreover, the Chief or Deputy Chief Hearing Officer may take into consideration, among other things, a hearing participant's access to connectivity and technology in scheduling a video conference hearing and can also, at their discretion, allow a party or witness to participate by telephone, if necessary, to address such access issues.
For the same reasons, the Exchange believes that the proposed rule change is designed to provide a fair procedure for the disciplining of members and persons associated with members, consistent with Sections 6(b)(7) and 6(d) of the Act.
The Exchange does not believe that the proposed rule change will impose any burden on competition that is not necessary or appropriate in furtherance of the purposes of the Act. The proposed rule change is not intended to address competitive issues but is rather intended solely to provide temporary relief given the impacts of the COVID-19 pandemic. In its filing, FINRA provides an abbreviated economic impact assessment maintaining that the changes are necessary to temporarily rebalance the attendant benefits and costs of the obligations under FINRA Rules 1015, 9261, 9524 and 9830 in response to the impacts of the COVID-19 pandemic that is equally applicable to the changes the Exchange proposes.
No written comments were solicited or received with respect to the proposed rule change.
The Exchange has filed the proposed rule change pursuant to Section 19(b)(3)(A)(iii) of the Act
At any time within 60 days of the filing of such proposed rule change, the Commission summarily may temporarily suspend such rule change if it appears to the Commission that such action is necessary or appropriate in the public interest, for the protection of investors, or otherwise in furtherance of the purposes of the Act. If the Commission takes such action, the Commission shall institute proceedings under Section 19(b)(2)(B)
Interested persons are invited to submit written data, views and arguments concerning the foregoing, including whether the proposed rule change is consistent with the Act. Comments may be submitted by any of the following methods:
• Use the Commission's internet comment form (
• Send an email to
• Send paper comments in triplicate to Secretary, Securities and Exchange Commission, 100 F Street NE, Washington, DC 20549-1090.
Persons submitting comments are cautioned that we do not redact or edit personal identifying information from comment submissions. You should submit only information that you wish to make available publicly. All submissions should refer to File Number SR-NYSEAMER-2020-69 and should be submitted on or before October 29, 2020.
For the Commission, by the Division of Trading and Markets, pursuant to delegated authority.
Pursuant to Section 11A of the Securities Exchange Act of 1934 (“Act”)
The proposed Amendments have been filed by the Participants pursuant to Rule 608(b)(3)(ii) under Regulation NMS
The above-captioned Amendments add MIAX PEARL as a Participant to the Plans.
Not applicable.
Because the Amendments constitute “Ministerial Amendments” under both Section IV(b) of the CTA Plan and Section IV(c) under the CQ Plan, the Chairman of the Plan's Operating Committee may submit the Amendments to the Commission on behalf of the Participants in the Plans. Because the Participants designate the Amendments as concerned solely with the administration of the Plans, the Amendments become effective upon filing with the Commission.
Not applicable.
The Amendments do not impose any burden on competition because they simply add MIAX PEARL as a Participant to the Plans. MIAX PEARL has completed the required steps to be added to the Plans.
Not applicable.
See Item I.C. above.
Not applicable.
Not applicable.
Not applicable.
Not applicable.
Not applicable.
Not applicable.
Not applicable.
Not applicable.
Not applicable.
Not applicable.
Not applicable.
Not applicable.
Not applicable.
The Commission seeks comments on the Amendments. Interested persons are invited to submit written data, views, and arguments concerning the foregoing, including whether the proposed Amendments are consistent with the Act. Comments may be submitted by any of the following methods:
• Use the Commission's internet comment form (
• Send an email to
• Send paper comments in triplicate to Secretary, Securities and Exchange Commission, 100 F Street NE, Washington, DC 20549-1090.
By the Commission.
On July 30, 2020, National Securities Clearing Corporation (“NSCC”) filed with the Securities and Exchange Commission (“Commission”), pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934 (“Act”)
Section 19(b)(2) of the Act
The Commission is extending the 45-day time period for Commission action on the proposed rule change. The Commission finds that it is appropriate to designate a longer period within which to take action on the proposed rule change so that it has sufficient time to consider and take action on the proposed rule change.
Accordingly, pursuant to Section 19(b)(2) of the Act
For the Commission, by the Division of Trading and Markets, pursuant to delegated authority.
On July 30, 2020, Cboe C2 Exchange, Inc. (the “Exchange”) filed with the Securities and Exchange Commission (the “Commission”), pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934 (the “Act”)
The Exchange proposed certain amendments to the Parent Bylaws that, according to the Exchange, would “improve the governance processes” of the Parent and “make certain provisions more consistent with the Delaware General Corporation Law (“DGCL”).”
The majority of the proposed changes amend Section 2.11 (Nomination of Directors) and Section 2.12 (Notice of Business at Annual Meetings). According to the Exchange, the changes are designed to reflect the most up-to-date practices under the DGCL and provide the Board with additional information and advance notice in connection with nominations and the conduct of business at annual and special meetings. In particular, the Exchange combines current Section 2.12 into Section 2.11 and amends provisions that govern notice requirements for annual and special meetings, as well as provisions that provide general procedures and practices in connection with notices. The proposed delineation does not alter the process or definition of either type of meeting, but instead provides for significantly more detailed written notice requirements as well as updates to the manner and timeliness of notices.
Additionally, as detailed further in the Notice, the proposed rule change relocates and expands text concerning nominees for directors and elections of directors, as well as amends provisions concerning the place of annual and special meetings and the adjournment of meetings.
Further, the Exchange proposes to update provisions that govern the preparing of the voting list, the ability of the Board to appoint a director to preside over meetings in the absence of the Chairman of the Board, and provisions concerning the procedural authority of the presiding officer at any stockholder meeting.
The proposed rule change amends provisions concerning director vacancies, notice for special meetings of the Board, and the routine filing of consents following an action by the Board.
The proposed change also adds new Section 3.15 (Emergency Bylaws). In particular, that new section provides certain temporary emergency provisions that would apply at the outset of an emergency, disaster, or catastrophe, notwithstanding anything to the contrary in the Certificate of Incorporation or the Bylaws, only for so long as a quorum of the Board cannot readily be convened for action. The Exchange notes that proposed Section 3.15 is meant to provide the Parent with short-term flexibility to continue operations during an emergency situation, and that proposed paragraph (f) makes clear that, as soon as it is practicable for a majority of the elected directors to reconvene, they would be expected to do so.
The proposed rule change to Section 4.1 (Designation of Committees) adds language to reflect that the Board may designate one or more committees of the Board, and also adds text to address the absence or disqualification of committee members and allow committee members to unanimously appoint another Director to act at the meeting in place of any such absent or disqualified member. In addition, the Exchange proposes to add text to reflect the power and authority of Board committees.
The proposed rule change to Section 4.2 (The Executive Committee) replaces a list of specific actions and matters that are not to be handled by the Executive Committee and replaces it with a reference to matters under the DGCL that are to be submitted to stockholders for approval.
The proposed change to Section 4.5 (The Nominating and Governance Committee) reduces the minimum size requirement of that committee from five members to three members.
The proposed rule changes in Section 8.1 (Notices) allow notices sent by messenger or overnight courier to be left at the recipient's address and also updates language concerning delivery by electronic mail and when electronic mail delivery is not allowed. The Exchange also proposes to amend Section 8.2 (Electronic Notice) to allow for electronic delivery of materials to stockholders unless the stockholder has opted-out of electronic transmission (currently, electronic transmission is permitted only when a stockholder has opted-in to electronic delivery).
The proposed rule changes to Article 11 add clarifying provisions and additional detail regarding the exclusive forum for adjudication of disputes.
Finally, the proposed rule change makes non-substantive edits to the Parent Bylaws, including updating paragraph lettering and numbering and ensuring consistent use of defined terms.
After careful review, the Commission finds that the proposed rule change, as modified by Amendment No. 1, is consistent with the requirements of the Act and the rules and regulations thereunder applicable to a national securities exchange.
The proposed rule change reflects the Exchange's stated goals to improve the governance process of the Parent and update the Parent Bylaws to reflect and track the DGCL and current best practices.
The Commission believes that the proposed rule change, as modified by Amendment No. 1, is consistent with the Exchange Act, including Section 6(b)(1) thereunder, in that the Exchange, and its Parent on the Exchange's behalf as applicable, will remain so organized and have the capacity to be able to carry out the purposes of the Exchange Act and to comply, and enforce compliance by its members and persons associated with its members, with the provisions of the Exchange Act, the rules and regulations thereunder, and the rules of the Exchange.
While proposed Section 3.15 will provide the Parent with special limited powers to ensure continued operations at the onset of an emergency situation that otherwise prevents the Board from obtaining the necessary quorum to convene and exercise its power, that section is intended only to provide limited short-term flexibility to ensuring continue operations of the Parent during the initial stage of the emergency situation. Pursuant to proposed paragraph (f), a majority of the elected directors are expected to reconvene as soon as it is possible to do so. In addition, the provisions in new Section 3.15 concerning amendments to the Parent Bylaws remain subject to existing Section 10.2 and, as applicable, the rule filing requirements of Section 19 of the Act.
Interested persons are invited to submit written data, views, and arguments concerning the foregoing, including whether Amendment No. 1 is consistent with the Act. Comments may be submitted by any of the following methods:
• Use the Commission's internet comment form (
• Send an email to
• Send paper comments in triplicate to Secretary, Securities and Exchange Commission, 100 F Street NE, Washington, DC 20549-1090.
The Commission finds good cause for approving the proposed rule change, as amended by Amendment No. 1, prior to the 30th day after the date of publication of notice in the
For the Commission, by the Division of Trading and Markets, pursuant to delegated authority.
On July 30, 2020, Fixed Income Clearing Corporation (“FICC”) filed with the Securities and Exchange Commission (“Commission”), pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934 (“Act”)
Section 19(b)(2) of the Act
The Commission is extending the 45-day time period for Commission action on the proposed rule change. The Commission finds that it is appropriate to designate a longer period within which to take action on the proposed rule change so that it has sufficient time to consider and take action on the proposed rule change.
Accordingly, pursuant to Section 19(b)(2) of the Act
For the Commission, by the Division of Trading and Markets, pursuant to delegated authority.
On July 30, 2020, Cboe BYX Exchange, Inc. (the “Exchange”) filed with the Securities and Exchange Commission (the “Commission”), pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934 (the “Act”)
The Exchange proposed certain amendments to the Parent Bylaws that, according to the Exchange, would “improve the governance processes” of the Parent and “make certain provisions more consistent with the Delaware General Corporation Law (“DGCL”).”
The majority of the proposed changes amend Section 2.11 (Nomination of Directors) and Section 2.12 (Notice of Business at Annual Meetings). According to the Exchange, the changes are designed to reflect the most up-to-date practices under the DGCL and provide the Board with additional information and advance notice in connection with nominations and the conduct of business at annual and special meetings. In particular, the Exchange combines current Section 2.12 into Section 2.11 and amends provisions that govern notice requirements for annual and special meetings, as well as provisions that provide general procedures and practices in connection with notices. The proposed delineation does not alter the process or definition of either type of meeting, but instead provides for significantly more detailed written notice requirements as well as updates to the manner and timeliness of notices.
Additionally, as detailed further in the Notice, the proposed rule change relocates and expands text concerning nominees for directors and elections of directors, as well as amends provisions concerning the place of annual and special meetings and the adjournment of meetings.
Further, the Exchange proposes to update provisions that govern the preparing of the voting list, the ability of the Board to appoint a director to preside over meetings in the absence of the Chairman of the Board, and provisions concerning the procedural authority of the presiding officer at any stockholder meeting.
The proposed rule change amends provisions concerning director vacancies, notice for special meetings of the Board, and the routine filing of consents following an action by the Board.
The proposed change also adds new Section 3.15 (Emergency Bylaws). In particular, that new section provides certain temporary emergency provisions that would apply at the outset of an emergency, disaster, or catastrophe, notwithstanding anything to the contrary in the Certificate of Incorporation or the Bylaws, only for so long as a quorum of the Board cannot readily be convened for action. The Exchange notes that proposed Section 3.15 is meant to provide the Parent with short-term flexibility to continue operations during an emergency situation, and that proposed paragraph (f) makes clear that, as soon as it is practicable for a majority of the elected directors to reconvene, they would be expected to do so.
The proposed rule change to Section 4.1 (Designation of Committees) adds language to reflect that the Board may designate one or more committees of the Board, and also adds text to address the absence or disqualification of committee members and allow committee members to unanimously appoint another Director to act at the meeting in place of any such absent or disqualified member. In addition, the Exchange proposes to add text to reflect the power and authority of Board committees.
The proposed rule change to Section 4.2 (The Executive Committee) replaces a list of specific actions and matters that are not to be handled by the Executive Committee and replaces it with a reference to matters under the DGCL that are to be submitted to stockholders for approval.
The proposed change to Section 4.5 (The Nominating and Governance Committee) reduces the minimum size requirement of that committee from five members to three members.
The proposed rule changes in Section 8.1 (Notices) allow notices sent by messenger or overnight courier to be left at the recipient's address and also updates language concerning delivery by electronic mail and when electronic mail delivery is not allowed. The Exchange also proposes to amend Section 8.2 (Electronic Notice) to allow for electronic delivery of materials to stockholders unless the stockholder has opted-out of electronic transmission (currently, electronic transmission is permitted only when a stockholder has opted-in to electronic delivery).
The proposed rule changes to Article 11 add clarifying provisions and additional detail regarding the exclusive forum for adjudication of disputes.
Finally, the proposed rule change makes non-substantive edits to the Parent Bylaws, including updating paragraph lettering and numbering and ensuring consistent use of defined terms.
After careful review, the Commission finds that the proposed rule change, as modified by Amendment No. 1, is consistent with the requirements of the Act and the rules and regulations
The proposed rule change reflects the Exchange's stated goals to improve the governance process of the Parent and update the Parent Bylaws to reflect and track the DGCL and current best practices.
The Commission believes that the proposed rule change, as modified by Amendment No. 1, is consistent with the Exchange Act, including Section 6(b)(1) thereunder, in that the Exchange, and its Parent on the Exchange's behalf as applicable, will remain so organized and have the capacity to be able to carry out the purposes of the Exchange Act and to comply, and enforce compliance by its members and persons associated with its members, with the provisions of the Exchange Act, the rules and regulations thereunder, and the rules of the Exchange.
While proposed Section 3.15 will provide the Parent with special limited powers to ensure continued operations at the onset of an emergency situation that otherwise prevents the Board from obtaining the necessary quorum to convene and exercise its power, that section is intended only to provide limited short-term flexibility to ensuring continue operations of the Parent during the initial stage of the emergency situation. Pursuant to proposed paragraph (f), a majority of the elected directors are expected to reconvene as soon as it is possible to do so. In addition, the provisions in new Section 3.15 concerning amendments to the Parent Bylaws remain subject to existing Section 10.2 and, as applicable, the rule filing requirements of Section 19 of the Act.
Interested persons are invited to submit written data, views, and arguments concerning the foregoing, including whether Amendment No. 1 is consistent with the Act. Comments may be submitted by any of the following methods:
• Use the Commission's internet comment form (
• Send an email to
• Send paper comments in triplicate to Secretary, Securities and Exchange Commission, 100 F Street NE, Washington, DC 20549-1090.
The Commission finds good cause for approving the proposed rule change, as amended by Amendment No. 1, prior to the 30th day after the date of publication of notice in the
For the Commission, by the Division of Trading and Markets, pursuant to delegated authority.
Pursuant to Section 11A of the Securities Exchange Act of 1934 (“Act”)
The proposed Amendment has been filed by the Participants pursuant to Rule 608(b)(3)(ii) under Regulation NMS
The above-captioned Amendment adds MIAX PEARL as a Participant to the UTP Plan.
Not applicable.
Because the Amendment constitutes a “Ministerial Amendment” under Section XVI of the UTP Plan, the Chair of the UTP Plan's Operating Committee may submit the Amendment to the Commission on behalf of the Participants in the UTP Plan. Because the Participants designate the Amendment as concerned solely with the administration of the UTP Plan, the Amendment becomes effective upon filing with the Commission.
Not applicable.
The Amendment does not impose any burden on competition because it simply adds MIAX PEARL as a Participant to the UTP Plan. MIAX PEARL has completed the required steps to be added to the UTP Plan.
Not applicable.
See Item I.C. above.
Not applicable.
Not applicable.
Not applicable.
Not applicable.
Not applicable.
Not applicable.
Not applicable.
Not applicable.
Not applicable.
Not applicable.
Not applicable.
Not applicable.
Not applicable.
The Commission seeks comments on the Amendment. Interested persons are invited to submit written data, views, and arguments concerning the foregoing, including whether the proposed Amendment is consistent with the Act. Comments may be submitted by any of the following methods:
• Use the Commission's internet comment form (
• Send an email to
• Send paper comments in triplicate to Secretary, Securities and Exchange Commission, 100 F. Street NE, Washington, DC 20549-1090.
By the Commission.
On July 30, 2020, Cboe Exchange, Inc. (the “Exchange”) filed with the Securities and Exchange Commission (the “Commission”), pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934 (the “Act”)
The Exchange proposed certain amendments to the Parent Bylaws that, according to the Exchange, would “improve the governance processes” of the Parent and “make certain provisions more consistent with the Delaware General Corporation Law (“DGCL”).”
The majority of the proposed changes amend Section 2.11 (Nomination of Directors) and Section 2.12 (Notice of Business at Annual Meetings). According to the Exchange, the changes are designed to reflect the most up-to-date practices under the DGCL and provide the Board with additional information and advance notice in connection with nominations and the conduct of business at annual and special meetings. In particular, the Exchange combines current Section 2.12 into Section 2.11 and amends provisions that govern notice requirements for annual and special meetings, as well as provisions that provide general procedures and practices in connection with notices. The proposed delineation does not alter the process or definition of either type of meeting, but instead provides for significantly more detailed written notice requirements as well as updates to the manner and timeliness of notices.
Additionally, as detailed further in the Notice, the proposed rule change relocates and expands text concerning nominees for directors and elections of directors, as well as amends provisions concerning the place of annual and special meetings and the adjournment of meetings.
Further, the Exchange proposes to update provisions that govern the preparing of the voting list, the ability of the Board to appoint a director to preside over meetings in the absence of the Chairman of the Board, and provisions concerning the procedural authority of the presiding officer at any stockholder meeting.
The proposed rule change amends provisions concerning director vacancies, notice for special meetings of the Board, and the routine filing of consents following an action by the Board.
The proposed change also adds new Section 3.15 (Emergency Bylaws). In particular, that new section provides certain temporary emergency provisions that would apply at the outset of an emergency, disaster, or catastrophe, notwithstanding anything to the contrary in the Certificate of Incorporation or the Bylaws, only for so long as a quorum of the Board cannot
The proposed rule change to Section 4.1 (Designation of Committees) adds language to reflect that the Board may designate one or more committees of the Board, and also adds text to address the absence or disqualification of committee members and allow committee members to unanimously appoint another Director to act at the meeting in place of any such absent or disqualified member. In addition, the Exchange proposes to add text to reflect the power and authority of Board committees.
The proposed rule change to Section 4.2 (The Executive Committee) replaces a list of specific actions and matters that are not to be handled by the Executive Committee and replaces it with a reference to matters under the DGCL that are to be submitted to stockholders for approval.
The proposed change to Section 4.5 (The Nominating and Governance Committee) reduces the minimum size requirement of that committee from five members to three members.
The proposed rule changes in Section 8.1 (Notices) allow notices sent by messenger or overnight courier to be left at the recipient's address and also updates language concerning delivery by electronic mail and when electronic mail delivery is not allowed. The Exchange also proposes to amend Section 8.2 (Electronic Notice) to allow for electronic delivery of materials to stockholders unless the stockholder has opted-out of electronic transmission (currently, electronic transmission is permitted only when a stockholder has opted-in to electronic delivery).
The proposed rule changes to Article 11 add clarifying provisions and additional detail regarding the exclusive forum for adjudication of disputes.
Finally, the proposed rule change makes non-substantive edits to the Parent Bylaws, including updating paragraph lettering and numbering and ensuring consistent use of defined terms.
After careful review, the Commission finds that the proposed rule change, as modified by Amendment No. 1, is consistent with the requirements of the Act and the rules and regulations thereunder applicable to a national securities exchange.
The proposed rule change reflects the Exchange's stated goals to improve the governance process of the Parent and update the Parent Bylaws to reflect and track the DGCL and current best practices.
The Commission believes that the proposed rule change, as modified by Amendment No. 1, is consistent with the Exchange Act, including Section 6(b)(1) thereunder, in that the Exchange, and its Parent on the Exchange's behalf as applicable, will remain so organized and have the capacity to be able to carry out the purposes of the Exchange Act and to comply, and enforce compliance by its members and persons associated with its members, with the provisions of the Exchange Act, the rules and regulations thereunder, and the rules of the Exchange.
While proposed Section 3.15 will provide the Parent with special limited powers to ensure continued operations at the onset of an emergency situation that otherwise prevents the Board from obtaining the necessary quorum to convene and exercise its power, that section is intended only to provide limited short-term flexibility to ensuring continue operations of the Parent during the initial stage of the emergency situation. Pursuant to proposed paragraph (f), a majority of the elected directors are expected to reconvene as soon as it is possible to do so. In addition, the provisions in new Section 3.15 concerning amendments to the Parent Bylaws remain subject to existing Section 10.2 and, as applicable, the rule filing requirements of Section 19 of the Act.
Interested persons are invited to submit written data, views, and arguments concerning the foregoing, including whether Amendment No. 1 is consistent with the Act. Comments may be submitted by any of the following methods:
• Use the Commission's Internet comment form (
• Send an email to
• Send paper comments in triplicate to Secretary, Securities and Exchange Commission, 100 F Street NE, Washington, DC 20549-1090.
The Commission finds good cause for approving the proposed rule change, as amended by Amendment No. 1, prior to the 30th day after the date of publication of notice in the
For the Commission, by the Division of Trading and Markets, pursuant to delegated authority.
Notice document 2020-21403, which published Tuesday, September 29, 2020, was incorrect. We are republishing it here in its entirety.
Pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934 (“Act”),
Pursuant to the provisions of Section 19(b)(1) under the Act,
The text of the proposed rule change is available at the Exchange's website at
In its filing with the Commission, the self-regulatory organization included statements concerning the purpose of and basis for the proposed rule change and discussed any comments it received on the proposed rule change. The text of these statements may be examined at the places specified in Item IV below. The self-regulatory organization has prepared summaries, set forth in Sections A, B, and C below, of the most significant aspects of such statements.
The Exchange proposes to modify its Fee Schedule, pursuant to IEX Rule 15.110(a) and (c), to establish fees for the execution of Discretionary Limit (“D-Limit”) orders, including pricing incentives for certain D-Limit, Discretionary Peg (“D-Peg”) and Midpoint Peg (“M-Peg”) order executions. Changes to the Fee Schedule, as proposed, will be implemented in conjunction with the full launch of D-Limit trading on October 1, 2020.
The D-Limit order type was approved by the Commission on August 26, 2020,
As proposed, liquidity taking D-Limit orders will be subject to the same transaction fees as other displayed or non-displayed orders.
Specifically, as proposed, any Member
• A D-Limit order that provides liquidity and is executed at a price at or above $1.00 per share results in a free execution.
• D-Peg and M-Peg orders that provide liquidity and execute at a price at or above $1.00 per share will be subject to a discount of $0.0002 per share from the fee that would otherwise be charged for the number of shares of such orders executed up to the number of shares of D-Limit orders that provided liquidity and executed at a price at or above $1.00 per share during such time period by the same Member, measured on a monthly basis.
• IEX will aggregate all of a Member's MPIDs to calculate each Member's D-Peg, M-Peg, and D-Limit liquidity providing orders on a monthly basis. In addition, a Member may request that the Exchange aggregate its activity with activity of such Member's affiliated Members. A Member requesting aggregation of affiliate activity is required to certify to the Exchange the affiliate status of Members whose activity it seeks to aggregate prior to receiving approval for aggregation and inform the Exchange immediately of any event that causes an entity to cease being an affiliate. The Exchange shall review available information regarding the entities and reserves the right to request additional information to verify the affiliate status of an entity.
The proposed fees are designed to provide a narrowly tailored incentive for Members to utilize a new and innovative order type. IEX understands that Members seeking to utilize the new D-Limit order type may need to modify and test their trading strategies and order entry systems in order to do so, and the proposed fees are designed to provide a meaningful economic incentive for such efforts.
IEX believes that offering free executions for specified D-Limit orders, as well as a discount for qualifying D-Peg and M-Peg orders, will provide a meaningful incentive to Members to adopt the use of D-Limit orders. IEX operates in a highly competitive environment in which a large number of national securities exchanges and other venues offer markets for the execution of equities transactions, and in which market participants can readily direct order flow to other venues. Accordingly, IEX believes that it is important to provide meaningful incentives for the adoption of D-Limit orders to demonstrate the value of the order type in protecting against certain types of latency arbitrage and thereby result in increasing use of the order type.
D-Peg and M-Peg order types are widely used and have achieved significant adoption by a diverse group of IEX Members. Consequently, IEX believes that combining free executions for certain liquidity providing D-Limit orders with discounted executions for certain liquidity providing D-Peg and M-Peg orders, as described above, will effectively augment the incentive value provision of free D-Limit liquidity providing executions for orders executed at or above $1.00.
IEX believes that providing pricing incentives to liquidity providing orders will best incentivize the adoption of D-Limit orders. While a D-Limit order can take liquidity upon entry, IEX believes that its commercial success will be based on Members having favorable experiences as liquidity adders, particularly for displayed liquidity providing D-Limit orders. As the Commission noted in the D-Limit Approval Order:
[E]xchange functionality that protects resting displayed orders against adverse selection resulting from latency arbitrage will improve the execution quality experienced by market participants that post displayed liquidity and are affected by such adverse selection. This improved execution quality could encourage more displayed liquidity, which in turn, would contribute to fair and orderly markets and support the public price discovery process. Specifically, if sufficiently protected against being “picked off” when the conditions for latency arbitrage are present, long term investors will no longer experience those relatively poor executions and thus will have less incentive to avoid posting displayed orders on exchanges.
IEX believes that targeting fee incentives to liquidity adders will enable Members to see for themselves the benefits of using the innovative D-Limit order type, while adding to the pool of displayed (as well as non-displayed) liquidity from which all market participants will benefit.
Specifically, IEX believes that the proposed fees are a narrowly tailored approach that is designed to increase liquidity on IEX, which would benefit investors in securities traded on IEX. Specifically, to the extent Members post more displayed D-Limit orders on IEX, price discovery would be enhanced drawing more natural trading interest to the public markets, which would deepen liquidity and dampen the impact of shocks from liquidity demand. The Exchange notes that other exchanges offer a diverse range of fee-based incentives to their members for trading activity that they believe incentivizes liquidity adding orders, and thereby improves market quality.
Importantly, the Exchange is not proposing to offer a rebate, in that the proposed fee reduction will not be greater than the fee charged for executions on the Exchange. The Exchange will offer a discount to the fees charged for qualifying orders, but such discounts will not result in any net payments to Members for the execution of such orders. The proposed fees are designed to provide an alternative fee-based incentive to Members to utilize a new order type on IEX.
Finally, IEX notes that the affiliate aggregation for purposes of applying D-Limit fees and discounts is similar to pricing structures in place at other exchanges. For example, the New York Stock Exchange, Inc. (“NYSE”) pricing rules provide that “[f]or purposes of applying any provision of the Price List where the charge assessed, or credit provided, by the Exchange depends upon the volume of a member organization's activity, a member organization may request that the Exchange aggregate its eligible activity with the eligible activity of its affiliates.” The NYSE Price List also includes provisions regarding aggregation requests, and the timing thereof, that are substantially similar to those proposed in this rule change. Nasdaq Stock Market (“Nasdaq”) pricing rules contain virtually identical provisions.
The Exchange believes that the proposed rule change is consistent with Section 6(b) of the Act,
The Exchange believes that the proposed fees are consistent with the Act because they would be available to all Members on a fair, equal and nondiscriminatory basis. All Members, regardless of their technological sophistication, can enter D-Limit liquidity providing orders priced to execute at or above $1.00.
The proposed fees take a narrowly tailored approach, designed to maximize participation for the launch of D-Limit by incentivizing the entry of certain displayed and non-displayed liquidity adding D-Limit orders. As noted in the Purpose section, IEX understands that Members seeking to utilize the D-Limit order type may need to modify and test their trading strategies and order entry systems in order to do so, and the proposed fees are designed to provide a meaningful economic incentive for such efforts.
As discussed in the Purpose section, IEX believes that the proposed fees are narrowly tailored to incentivize Members to enter liquidity providing D-Limit, D-Peg and M-Peg orders on IEX that execute at or above $1.00, which would have several benefits to investors in securities traded on IEX. First, to the extent Members post more displayed D-Limit orders on IEX, price discovery would be enhanced potentially drawing more natural trading interest to the public markets, which would deepen liquidity and dampen the impact of shocks from liquidity demand. Second, incentivizing the entry of both displayed and non-displayed liquidity adding orders should deepen the Exchange's liquidity pool and contribute to public price discovery, consistent with the goal of enhancing market quality. Third, to the extent that the proposed fees incentivize additional liquidity providing D-Peg and M-Peg orders that execute at the Midpoint Price
Additionally, IEX notes that it operates in an increasingly competitive and fragmented marketplace consisting of a large number of national securities exchanges and non-exchange venues that trade equity securities. As a relatively small market, IEX believes that meaningful pricing incentives are necessary to encourage market participants to utilize the new D-Limit order type and address the significant competitive challenges of attracting liquidity to the Exchange. While the Exchange believes that adding liquidity with a D-Limit order with less risk of adverse selection should provide an incentive for Members to use D-Limit, the Exchange also believes that offering Members the proposed fees will enhance such incentive.
The Exchange notes that other exchanges offer a diverse range of pricing incentives to their members for providing certain order flow. For example, Cboe BZX Exchange, Inc. offers free executions for orders that participate in its new Cboe Market Close, which it describes as a “competitive pricing structure designed to incentivize market participants to direct their [Market-On-Close] orders to the Cboe Market Close, which the Exchange believes would facilitate the execution of those orders . . . .”
The proposed fees are designed to provide a simple, non-rebate incentive to market participants to enter certain liquidity providing D-Limit orders on IEX, through free executions and discounts on certain D-Peg and M-Peg orders.
The Exchange further believes that the proposed fees are consistent with the Act's requirement that the Exchange provide for an equitable allocation of fees because all Members are eligible for incentive pricing on the same terms and conditions, and there are no restrictions on the use of impacted order types. Additionally, IEX believes that it is reasonable to incentivize Members to use certain D-Limit liquidity providing orders in view of the potential burdens on those Members that choose to adopt this new order type and the highly competitive market in which IEX operates, which provides myriad alternatives to Members. Furthermore, the Exchange believes that the proposed fees are an equitable allocation of fees because to the extent the incentive pricing results in increased liquidity on IEX, all market participants will benefit, irrespective of if the market participant is an IEX Member that submits certain liquidity adding D-Limit, D-Peg, and M-Peg orders. Accordingly, IEX believes that the proposed fees constitute an equitable allocation of fees.
Moreover, the Exchange believes that the proposal to cap the $0.0002 discount on certain D-Peg and M-Peg orders executed by a Member (including any aggregated affiliates) at the number of D-Limit liquidity adding shares executed by that Member in the same month is reasonable, because the cap is designed to further incentivize Members to submit certain liquidity-adding D-Limit orders. Further, all Members will benefit from the discount in the same manner based on the number of qualifying D-Limit liquidity adding shares they execute.
Finally, the Exchange believes that the proposed aggregation provision is consistent with the protection of investors and the public interest because it establishes a clear policy with respect to affiliate aggregation for fee purposes that is common among other exchanges, thereby promoting Members' understanding of the parameters of the D-Limit fee and discount structure and the efficiency of its administration. The proposed rule is equitable because all similarly situated members are subject to the proposed rules equally, and access to the Exchange is offered on fair and nondiscriminatory terms.
All Members seeking to aggregate their activity are subject to the same reasonable parameters, in accordance with a standard that recognizes an affiliation as of the month's beginning, or close in time to when the affiliation occurs, provided the Member submits a timely request. Moreover, the proposed billing aggregation language is reasonable because it establishes a standard for implementation of aggregation requests that is easy to administer and that reflects the need for the Exchange to review and approve aggregation requests while avoiding the complexities associated with proration of the bills of Members that become affiliated during the course of a month. The Exchange believes that this approach will thus simplify the process of billing for the Exchange and its Members and is substantially similar to aggregation standards adopted by other exchanges.
The Exchange also believes that the proposed rule change avoids disparate treatment of Members that have divided their various business activities between separate legal entities as compared to Members that operate those business activities within a single legal entity. The Exchange further notes that the aggregation provisions are reasonable and designed to remove impediments to and perfect the mechanism of a free and open market by harmonizing with the rules across exchanges that govern the aggregation of certain activity for purposes of billing. In particular, as noted above, both Nasdaq and NYSE have substantially similar rules governing aggregation of activity for fee purposes.
The Exchange does not believe that the proposed rule change will impose any burden on competition that is not
The Exchange does not believe that the proposed fees will impose any burden on intermarket competition that is not necessary or appropriate in furtherance of the purposes of the Act since competing venues use various pricing structures to incentivize market participants to add liquidity to their markets, including but not limited to paying rebates to liquidity providers.
The Exchange also does not believe that the proposed rule change will impose any burden on intramarket competition that is not necessary or appropriate in furtherance of the purposes of the Act. While Members that add liquidity using certain D-Limit orders (as well as certain D-Peg and M-Peg orders) will be subject to different fees based on this usage, those differences are not based on the type of Member entering orders but on whether the Member chose to submit certain liquidity providing D-Limit orders. As noted above, not only can any Member submit certain liquidity adding D-Limit orders, but every Member would benefit from the availability of more liquidity on the Exchange that the proposed fees are designed to incentivize
Written comments were neither solicited nor received.
The foregoing rule change has become effective pursuant to Section 19(b)(3)(A)(ii)
At any time within 60 days of the filing of the proposed rule change, the Commission summarily may temporarily suspend such rule change if it appears to the Commission that such action is necessary or appropriate in the public interest, for the protection of investors, or otherwise in furtherance of the purposes of the Act. If the Commission takes such action, the Commission shall institute proceedings under Section 19(b)(2)(B)
Interested persons are invited to submit written data, views, and arguments concerning the foregoing, including whether the proposed rule change is consistent with the Act. Comments may be submitted by any of the following methods:
• Use the Commission's internet comment form (
• Send an email to
• Send paper comments in triplicate to Secretary, Securities and Exchange Commission, 100 F Street NE, Washington, DC 20549-1090.
For the Commission, by the Division of Trading and Markets, pursuant to delegated authority.
Pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934 (the “Act”),
The Exchange is filing with the Commission a proposed rule change to adopt (i) the initial fees and rebates applicable to Members
In its filing with the Commission, the Exchange included statements concerning the purpose of and basis for the proposed rule change and discussed any comments it received on the proposed rule change. The text of these statements may be examined at the places specified in Item IV below. The Exchange has prepared summaries, set forth in sections A, B, and C below, of the most significant aspects of such statements.
The Exchange proposes to implement a fee schedule (the “Fee Schedule”) applicable to use of the Exchange. The Exchange will commence operations as a national securities exchange on September 21, 2020, and thus, proposes the fees to be effective as of the date of this filing.
The Exchange first notes that upon launch it will operate in a highly competitive market in which market participants can readily direct order flow to competing venues if they deem fee levels at a particular venue to be excessive or incentives to be insufficient. More specifically, the Exchange will be only one of several equities venues to which market participants may direct their order flow. Based on publicly available information, no single registered equities exchange currently has more than approximately 18% of total market share.
Below is a description of the fees and rebates that the Exchange intends to impose under the initial proposed Fee Schedule, which will be applicable to transactions executed in all trading sessions. Under the proposed Fee Schedule, the Exchange will operate a “Maker-Taker” model whereby it provides rebates to Members that provide liquidity and charges fees to those that remove liquidity, as further described below. The Exchange does not initially propose to charge different fees or provide different rebates depending on the amount of orders submitted to, and/or transactions executed on or through, the Exchange. Accordingly, all fees and rebates described below are applicable to all Members, regardless of the overall volume of a Member's trading activities on the Exchange.
The Exchange proposes to charge a standard fee of $0.0025 per share for executions of orders that remove liquidity from the MEMX Book
The Exchange proposes to provide a standard rebate of $0.0029 per share for executions of orders that: (i) Are displayed on the MEMX Book and (ii) add liquidity to the Exchange (“Added Displayed Volume”), in all securities traded on the Exchange priced at or above $1.00 per share.
The Exchange proposes to provide an identical rebate of $0.0029 per share for executions of Added Displayed Volume orders that either: (i) establish the NBBO (“Setter Volume”) or (ii) establish a new best bid or offer (“BBO”) on MEMX that matches the NBBO first established on an away market (“Joiner Volume,” and together with Setter Volume, “NBBO Setter/Joiner Volume”), in all securities traded on the Exchange priced at or above $1.00 per share. Because pricing will be the same for all Added Displayed Volume, the Exchange does not propose to add separate rebates on the Fee Schedule at this time for Setter Volume or Joiner Volume or to define these categories on the Fee Schedule. However, the Exchange proposes to provide separate Fee Codes to Members for Setter Volume and Joiner Volume; thus, in addition to the standard Fee Code applicable to Added Displayed Volume, or “D”, the Exchange proposes including Fee Codes of “B” for Setter Volume and “J” for Joiner Volume on the same row as “D” in the transaction fees table of the Fee Schedule.
The purpose of including three separate Fee Codes for Added Displayed Volume is to reflect the fact that the Exchange will provide distinct Fee Codes on the execution reports provided to Members. The Exchange believes this information will be useful for Members and the Exchange to track executions of Added Displayed Volume that qualifies as either Setter Volume or Joiner Volume and may also be useful for the Exchange in considering potential pricing modifications to such orders as it continues to evaluate its pricing structure on an ongoing basis after its exchange launch. In the meantime, these Fee Codes will be provided to Members on execution reports prior to the introduction of any pricing incentives for such liquidity, even though the rebates to be provided are the same as those provided as the standard rebate for Added Displayed Volume. The Exchange notes that its technical specifications make clear the different types of liquidity codes passed back to Members on execution reports.
The Exchange proposes to provide a standard rebate of $0.0020 per share for executions of orders that: (i) Are not displayed on the MEMX Book and (ii) add liquidity to the Exchange (“Added Non-Displayed Volume”), in all securities traded on the Exchange priced at or above $1.00 per share.
The Exchange proposes to provide a higher rebate for executions of Added Displayed Volume than for executions of Added Non-Displayed Volume to incentivize displayed liquidity over non-displayed liquidity on the Exchange, including orders with a displayed component and a non-displayed component (
The Exchange proposes to charge a standard fee of $0.0030 per share for all orders routed to another market that (i) are executed on an away market and (ii) remove liquidity from the market to which it was routed (“Routed Removed Volume”), in all securities traded on the Exchange priced at or above $1.00 per share.
The Exchange does not propose to charge any fee or provide any rebate for executions of orders in securities priced below $1.00 per share, including where an execution takes place on the Exchange or at another market center if the order was routed away from the Exchange.
Under the initial proposed Fee Schedule, the Exchange proposes to make clear that it does not charge any fees for membership, market data products, physical connectivity or application sessions (
The Exchange proposes to adopt certain regulatory fees as new paragraph (e) to Exchange Rule 15.1 related to the CRD system, which are collected by FINRA.
(1) $100 for each initial Form U4 filed for the registration of a representative or principal;
(2) $110 for the additional processing of each initial or amended Form U4, Form U5 or Form BD that includes the initial reporting, amendment, or certification of one or more disclosure events or proceedings;
(3) $45 annually for each of the Member's registered representatives and principals for system processing;
(4) $15 for processing and posting to the CRD system each set of fingerprints submitted electronically by the Member, plus a pass-through of any other charge imposed by the United States Department of Justice for processing each set of fingerprints;
(5) $30 for processing and posting to the CRD system each set of fingerprint cards submitted in non-electronic format by the Member, plus a pass-through of any other charge imposed by the United States Department of Justice for processing each set of fingerprints; and
(6) $30 for processing and posting to the CRD system each set of fingerprint results and identifying information that has been processed through a self-
The Exchange believes that the proposed rule change is consistent with the provisions of Section 6(b)
Upon its launch, the Exchange will operate in a highly competitive market in which market participants can readily direct order flow to competing venues if they deem fee levels at a particular venue to be excessive or incentives to be insufficient. The Exchange believes that the proposed Fee Schedule reflects a simple and competitive pricing structure designed to incentivize market participants to add aggressively priced displayed liquidity and direct their order flow to the Exchange, which the Exchange believes would promote price discovery and price formation and deepen liquidity that is subject to the Exchange's transparency, regulation, and oversight as an exchange, thereby enhancing market quality to the benefit of all Members and investors.
The Commission and the courts have repeatedly expressed their preference for competition over regulatory intervention in determining prices, products, and services in the securities markets. In Regulation NMS, while adopting a series of steps to improve the current market model, the Commission highlighted the importance of market forces in determining prices and SRO revenues and, also, recognized that current regulation of the market system “has been remarkably successful in promoting market competition in its broader forms that are most important to investors and listed companies.”
The Exchange believes that it is appropriate, reasonable, and consistent with the Act to charge a standard fee of $0.0025 per share for Removed Volume from the MEMX Book because it is comparable to the transaction fee charged by other exchanges to remove liquidity.
The Exchange believes that it is appropriate, reasonable, and consistent with the Act to provide a standard rebate of $0.0029 per share for Added Displayed Volume in all securities traded on the Exchange priced at or above $1.00 per share because this rebate is consistent with transaction rebates provided by other exchanges.
The Exchange believes that charging a fee to the liquidity remover, and providing a rebate to the liquidity adder, is reasonable, equitable and not unfairly discriminatory because it incentivizes liquidity provision on the Exchange. The Exchange also notes that several other exchanges charge fees for removing liquidity and provide rebates for adding liquidity, and that this aspect of the Exchange's proposed Fee Schedule does not raise any new or novel issues that have not previously been considered by the Commission in connection with the fees and rebates of other exchanges.
The Exchange also believes that it is reasonable, equitable and not unfairly discriminatory to provide a higher rebate for executions of Added Displayed Volume (including NBBO Setter/Joiner Volume) than for executions of Added Non-Displayed Volume as this rebate structure is designed to incentivize Members to send the Exchange displayable orders, thereby contributing to price discovery and price formation, consistent with the overall goal of enhancing market quality. Moreover, the Exchange notes that there are precedents for exchanges to provide rebates that distinguish between displayed and non-displayed volume to incentivize displayed orders and facilitate price discovery.
The Exchange notes that under the initial proposed Fee Schedule it will pay a higher rebate for Added Displayed Volume than the fee it charges for removing such volume, and as such the Exchange will have a negative net capture (
With respect to orders routed to other markets, the Exchange also believes that it is appropriate, reasonable, and consistent with the Act to charge a standard fee of $0.0030 for Routed Removed Volume because this fee is similar to the fees charged by other exchanges for routed orders that remove liquidity from the destination market.
The Exchange also believes that not charging a fee for membership, market data products, physical connectivity and application sessions is appropriate, reasonable, and consistent with the Act because it may incentivize broker-dealers to become Members of the Exchange and to therefore direct order flow to the Exchange, and such orders will have the benefit of exchange transparency, regulation, and oversight. One of the primary objectives of MEMX is to provide competition and to reduce fixed costs imposed upon the industry. As such, while MEMX does intend to adopt fees other than transaction fees and such other fees as set forth in Rule 15.1 in the future, MEMX is not doing so at this time and, when it does, it intends to do so in a fair and transparent manner. As noted above, MEMX will operate in a highly competitive environment, and not charging fees for such services and access is designed to enable it to compete effectively and to encourage market participants to connect to the Exchange.
In conclusion, the Exchange also submits that its proposed fee structure satisfies the requirements of Sections 6(b)(4) and 6(b)(5) of the Act for the reasons discussed above in that it provides for the equitable allocation of reasonable dues, fees and other charges among its Members and other persons using its facilities, does not permit unfair discrimination between customers, issuers, brokers, or dealers, and is designed to promote just and equitable principles of trade, to remove impediments to and perfect the mechanism of a free and open market and a national market system and in general to protect investors and the public interest, particularly as the proposal neither targets nor will it have a disparate impact on any particular category of market participant. As described more fully below in the Exchange's statement regarding the burden on competition, the Exchange believes that it is subject to significant competitive forces, and that its proposed fee and rebate structure is an appropriate effort to address such forces.
The Exchange believes that proposed Rule 15.1(e) is consistent with the provisions of Section 6(b)
The proposed fees are reasonable because they are identical to those adopted by FINRA for use of the CRD system for disclosure and the registration of associated persons of FINRA members.
The Exchange also believes that the proposed fees, like FINRA's fees, are consistent with an equitable allocation of fees because the fees will apply equally to all individuals and Members required to report information to the CRD system. Thus, those members that register more individuals or submit more filings through the CRD system will generally pay more in fees than those members that use the CRD system to a lesser extent. In addition, the proposed fees, like FINRA's fees, are equitable and not unfairly discriminatory because they will result in the same regulatory fees being charged to all Members required to report information to the CRD system and for services performed by FINRA, regardless of whether or not such Member is a FINRA member.
The Exchange does not believe that the proposed rule change will result in any burden on competition that is not necessary or appropriate in furtherance of the purposes of the Act. Rather, as discussed above, the Exchange believes that the proposed change would encourage the submission of additional order flow to a public exchange, thereby promoting market depth, execution incentives and enhanced execution opportunities, as well as price discovery and transparency for all Members. As a result, the Exchange believes that the proposed change furthers the Commission's goal in adopting Regulation NMS of fostering competition among orders, which promotes “more efficient pricing of individual stocks for all types of orders, large and small.”
The Exchange does not believe that the proposed rule change will impose any burden on intermarket competition that is not necessary or appropriate in furtherance of the purposes of the Act. To the contrary, the Exchange believes that the proposed pricing structure will increase competition and is intended to draw volume to the Exchange as it commences operations. The Exchange believes that the ever-shifting market share among the exchanges from month to month demonstrates that market participants can shift order flow or discontinue to reduce use of certain categories of products, in response to new or different pricing structures being introduced into the market. Accordingly, competitive forces constrain the Exchange's transaction fees and rebates, and market participants can readily trade on competing venues if they deem pricing levels at those other venues to be more favorable. As a new exchange, the Exchange expects to face intense competition from existing exchanges and other non-exchange venues that provide markets for equities trading. With respect to the Exchange's initial pricing whereby it will operate with a negative net capture with respect to transactions involving Added Displayed Volume, the Exchange is proposing this pricing initially upon its launch and for a limited time thereafter in an effort to encourage market participants to join, connect to, and participate on the Exchange. The Exchange expects to modify its pricing structure after it has gained sufficient participation from market participants to eliminate the negative net capture and instead be profitable with respect to such transactions. Although this pricing incentive is intended to attract liquidity to the Exchange, most other exchanges in operation today already offer multiple incentives to their participants, including tiered pricing that provides higher rebates or discounted executions, and other exchanges will be able to modify such incentives in order to compete with the Exchange. With respect to the specific pricing resulting in the negative net capture, the Exchange also notes that the proposed fee for Removed Volume is neither the lowest fee in the market today
The Exchange does not believe that the proposed rule change will impose any burden on intramarket competition that is not necessary or appropriate in furtherance of the purposes of the Act because the proposed fees and rebates apply equally to all Members. The proposed pricing structure is intended to encourage market participants to add displayed and non-displayed liquidity to the Exchange by providing rebates that are comparable to those offered by other exchanges as well as to provide a competitive rate charged for removing liquidity, which the Exchange believes will help to encourage Members to send orders to the Exchange to the benefit of all Exchange participants. As the proposed rates are equally applicable to all market participants, the Exchange does not believe there is any burden on intramarket competition.
The Exchange does not believe that proposed Rule 15.1(e) will result in any burden on competition that is not necessary or appropriate in furtherance of the purposes of the Act. Specifically, the Exchange believes that the proposed fees in this Rule will result in the same regulatory fees being charged to all Members required to report information to the CRD system and for services performed by FINRA, regardless of whether or not such Members are FINRA members.
The Exchange neither solicited nor received comments on the proposed rule change.
The foregoing rule change has become effective pursuant to Section 19(b)(3)(A)(ii) of the Act
At any time within 60 days of the filing of the proposed rule change, the Commission summarily may temporarily suspend such rule change if it appears to the Commission that such action is necessary or appropriate in the public interest, for the protection of investors, or otherwise in furtherance of the purposes of the Act. If the Commission takes such action, the Commission shall institute proceedings to determine whether the proposed rule should be approved or disapproved.
Interested persons are invited to submit written data, views, and arguments concerning the foregoing, including whether the proposed rule change is consistent with the Act. Comments may be submitted by any of the following methods:
• Use the Commission's internet comment form (
• Send an email to
• Send paper comments in triplicate to Secretary, Securities and Exchange Commission, 100 F Street NE, Washington, DC 20549-1090.
For the Commission, by the Division of Trading and Markets, pursuant to delegated authority.
On July 30, 2020, Cboe EDGX Exchange, Inc. (the “Exchange”) filed with the Securities and Exchange Commission (the “Commission”), pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934 (the “Act”)
The Exchange proposed certain amendments to the Parent Bylaws that, according to the Exchange, would “improve the governance processes” of the Parent and “make certain provisions more consistent with the Delaware General Corporation Law (“DGCL”).”
The majority of the proposed changes amend Section 2.11 (Nomination of Directors) and Section 2.12 (Notice of Business at Annual Meetings). According to the Exchange, the changes are designed to reflect the most up-to-date practices under the DGCL and provide the Board with additional information and advance notice in connection with nominations and the conduct of business at annual and special meetings. In particular, the Exchange combines current Section 2.12 into Section 2.11 and amends provisions that govern notice requirements for annual and special meetings, as well as provisions that provide general procedures and practices in connection with notices. The proposed delineation does not alter the process or definition of either type
Additionally, as detailed further in the Notice, the proposed rule change relocates and expands text concerning nominees for directors and elections of directors, as well as amends provisions concerning the place of annual and special meetings and the adjournment of meetings.
Further, the Exchange proposes to update provisions that govern the preparing of the voting list, the ability of the Board to appoint a director to preside over meetings in the absence of the Chairman of the Board, and provisions concerning the procedural authority of the presiding officer at any stockholder meeting.
The proposed rule change amends provisions concerning director vacancies, notice for special meetings of the Board, and the routine filing of consents following an action by the Board.
The proposed change also adds new Section 3.15 (Emergency Bylaws). In particular, that new section provides certain temporary emergency provisions that would apply at the outset of an emergency, disaster, or catastrophe, notwithstanding anything to the contrary in the Certificate of Incorporation or the Bylaws, only for so long as a quorum of the Board cannot readily be convened for action. The Exchange notes that proposed Section 3.15 is meant to provide the Parent with short-term flexibility to continue operations during an emergency situation, and that proposed paragraph (f) makes clear that, as soon as it is practicable for a majority of the elected directors to reconvene, they would be expected to do so.
The proposed rule change to Section 4.1 (Designation of Committees) adds language to reflect that the Board may designate one or more committees of the Board, and also adds text to address the absence or disqualification of committee members and allow committee members to unanimously appoint another Director to act at the meeting in place of any such absent or disqualified member. In addition, the Exchange proposes to add text to reflect the power and authority of Board committees.
The proposed rule change to Section 4.2 (The Executive Committee) replaces a list of specific actions and matters that are not to be handled by the Executive Committee and replaces it with a reference to matters under the DGCL that are to be submitted to stockholders for approval.
The proposed change to Section 4.5 (The Nominating and Governance Committee) reduces the minimum size requirement of that committee from five members to three members.
The proposed rule changes in Section 8.1 (Notices) allow notices sent by messenger or overnight courier to be left at the recipient's address and also updates language concerning delivery by electronic mail and when electronic mail delivery is not allowed. The Exchange also proposes to amend Section 8.2 (Electronic Notice) to allow for electronic delivery of materials to stockholders unless the stockholder has opted-out of electronic transmission (currently, electronic transmission is permitted only when a stockholder has opted-in to electronic delivery).
The proposed rule changes to Article 11 add clarifying provisions and additional detail regarding the exclusive forum for adjudication of disputes.
Finally, the proposed rule change makes non-substantive edits to the Parent Bylaws, including updating paragraph lettering and numbering and ensuring consistent use of defined terms.
After careful review, the Commission finds that the proposed rule change, as modified by Amendment No. 1, is consistent with the requirements of the Act and the rules and regulations thereunder applicable to a national securities exchange.
The proposed rule change reflects the Exchange's stated goals to improve the governance process of the Parent and update the Parent Bylaws to reflect and track the DGCL and current best practices.
The Commission believes that the proposed rule change, as modified by Amendment No. 1, is consistent with the Exchange Act, including Section 6(b)(1) thereunder, in that the Exchange, and its Parent on the Exchange's behalf as applicable, will remain so organized and have the capacity to be able to carry out the purposes of the Exchange Act and to comply, and enforce compliance by its members and persons associated with its members, with the provisions of the Exchange Act, the rules and regulations thereunder, and the rules of the Exchange.
While proposed Section 3.15 will provide the Parent with special limited powers to ensure continued operations at the onset of an emergency situation that otherwise prevents the Board from obtaining the necessary quorum to
Interested persons are invited to submit written data, views, and arguments concerning the foregoing, including whether Amendment No. 1 is consistent with the Act. Comments may be submitted by any of the following methods:
• Use the Commission's internet comment form (
• Send an email to
• Send paper comments in triplicate to Secretary, Securities and Exchange Commission, 100 F Street NE, Washington, DC 20549-1090.
The Commission finds good cause for approving the proposed rule change, as amended by Amendment No. 1, prior to the 30th day after the date of publication of notice in the
For the Commission, by the Division of Trading and Markets, pursuant to delegated authority.
U.S. Small Business Administration.
Amendment 2.
This is an amendment of the Presidential declaration of a major disaster for Public Assistance Only for the State of CALIFORNIA (FEMA-4558-DR), dated 08/22/2020.
Issued on 09/30/2020.
Submit completed loan applications to: U.S. Small Business Administration, Processing and Disbursement Center, 14925 Kingsport Road, Fort Worth, TX 76155.
A. Escobar, Office of Disaster Assistance, U.S. Small Business Administration, 409 3rd Street SW, Suite 6050, Washington, DC 20416, (202) 205-6734.
The notice of the President's major disaster declaration for Private Non-Profit organizations in the State of CALIFORNIA, dated 08/22/2020, is hereby amended to establish the incident period for this disaster as beginning 08/14/2020 and continuing through 09/26/2020, with the exception of additional damage resulting from the North Complex Fire.
All other information in the original declaration remains unchanged.
U.S. Small Business Administration.
Amendment 1.
This is an amendment of the Presidential declaration of a major disaster for Public Assistance Only for the State of FLORIDA (FEMA-4564-DR), dated 09/23/2020.
Issued on 09/30/2020.
Submit completed loan applications to: U.S. Small Business Administration, Processing and Disbursement Center, 14925 Kingsport Road, Fort Worth, TX 76155.
A. Escobar, Office of Disaster Assistance, U.S. Small Business Administration, 409 3rd Street SW, Suite 6050, Washington, DC 20416, (202) 205-6734.
The notice of the President's major disaster declaration for Private Non-Profit organizations in the State of Florida, dated 09/23/2020, is hereby amended to include the following areas as adversely affected by the disaster.
All other information in the original declaration remains unchanged.
U.S. Small Business Administration.
Amendment 10.
This is an amendment of the Presidential declaration of a major disaster for the Commonwealth of Puerto Rico (FEMA-4473-DR), dated 01/16/2020. Incident: Earthquakes. Incident Period: 12/28/2019 through 07/03/2020.
Issued on 09/10/2020.
Submit completed loan applications to: U.S. Small Business Administration, Processing and Disbursement Center, 14925 Kingsport Road, Fort Worth, TX 76155.
A. Escobar, Office of Disaster Assistance, U.S. Small Business Administration, 409 3rd Street SW, Suite 6050, Washington, DC 20416, (202) 205-6734.
The notice of the President's major disaster declaration for the Commonwealth of Puerto Rico, dated 01/16/2020, is hereby amended to establish the incident period for this disaster as beginning 12/28/2019 and continuing through 07/03/2020.
All other information in the original declaration remains unchanged.
U.S. Small Business Administration.
Amendment 4.
This is an amendment of the Presidential declaration of a major disaster for the State of California (FEMA-4558-DR), dated 08/22/2020.
Issued on 09/30/2020.
Submit completed loan applications to: U.S. Small Business Administration, Processing and Disbursement Center, 14925 Kingsport Road, Fort Worth, TX 76155.
A. Escobar, Office of Disaster Assistance, U.S. Small Business Administration, 409 3rd Street SW, Suite 6050, Washington, DC 20416, (202) 205-6734.
The notice of the President's major disaster declaration for the State of CALIFORNIA, dated 08/22/2020, is hereby amended to establish the incident period for this disaster as beginning 08/14/2020 and continuing through 09/26/2020, with the exception of additional damage resulting from the North Complex Fire.
All other information in the original declaration remains unchanged.
U.S. Small Business Administration.
Amendment 2.
This is an amendment of the Presidential declaration of a major disaster for Public Assistance Only for the Commonwealth of Puerto Rico (FEMA-4473-DR), dated 03/11/2020.
Issued on 09/10/2020.
Submit completed loan applications to: U.S. Small Business Administration, Processing and Disbursement Center, 14925 Kingsport Road, Fort Worth, TX 76155.
A. Escobar, Office of Disaster Assistance, U.S. Small Business Administration, 409 3rd Street SW, Suite 6050, Washington, DC 20416, (202) 205-6734.
The notice of the President's major disaster declaration for Private Non-Profit organizations in the Commonwealth of Puerto Rico, dated 03/11/2020, is hereby amended to establish the incident period for this disaster as beginning 12/28/2019 and continuing through 07/03/2020.
All other information in the original declaration remains unchanged.
The Social Security Administration (SSA) publishes a list of information collection packages requiring clearance by the Office of Management and Budget (OMB) in compliance with Public Law 104-13, the Paperwork Reduction Act of 1995, effective October 1, 1995. This notice includes revisions and one extension of OMB-approved information collections.
SSA is soliciting comments on the accuracy of the agency's burden estimate; the need for the information; its practical utility; ways to enhance its quality, utility, and clarity; and ways to minimize burden on respondents, including the use of automated collection techniques or other forms of information technology. Mail, email, or fax your comments and recommendations on the information collection(s) to the OMB Desk Officer and SSA Reports Clearance Officer at the following addresses or fax numbers.
Or you may submit your comments online through
I. The information collections below are pending at SSA. SSA will submit them to OMB within 60 days from the date of this notice. To be sure we consider your comments, we must receive them no later than December 7, 2020. Individuals can obtain copies of the collection instruments by writing to the above email address.
There are four CE information collections: (a) Medical evidence about
The DDS's collect MER information from the claimant's medical sources to determine a claimant's physical or mental status prior to making a disability determination.
The DDS's use information about pain/symptoms to determine how pain/symptoms affect the claimant's ability to do work-related activities prior to making a disability determination.
II. SSA submitted the information collections below to OMB for clearance. Your comments regarding these information collections would be most useful if OMB and SSA receive them 30 days from the date of this publication. To be sure we consider your comments, we must receive them no later than November 9, 2020. Individuals can obtain copies of these OMB clearance packages by writing to
Central Railroad Company of Indianapolis (CERA), a Class III railroad, has filed a verified notice of exemption pursuant to 49 CFR 1150.41 to continue to lease and operate approximately 15.7 miles of rail line between milepost RK-154.5, a point just east of the grade crossing at 38th Street in Gas City, Grant County, Ind., and milepost RK-138.8, at the end of the leased line at Harford City, Blackford County, Ind. (the Line). CERA states that it has entered into an amended lease (Amended Agreement) with Norfolk Southern Railway Company (NSR), the owner of the Line, amending the existing lease (Current Agreement) between those parties.
CERA states that it is the present operator of the Line under the Current Agreement. CERA states that the Amended Agreement extends the term of the lease until December 31, 2024 (or until the Amended Agreement is otherwise terminated in accordance with its terms), and revises other commercial provisions.
CERA certifies that the Amended Agreement does not include an interchange commitment.
CERA certifies that its projected revenues as a result of this transaction will not exceed those that would qualify it as a Class III carrier. CERA also certifies that its revenues currently exceed $5 million. Pursuant to 49 CFR 1150.42(e), if a carrier's projected annual revenues will exceed $5 million, it must, at least 60 days before the exemption becomes effective, post a notice of its intent to undertake the proposed transaction at the workplace of the employees on the affected lines, serve a copy of the notice on the national offices of the labor unions with employees on the affected lines, and certify to the Board that it has done so. However, CERA's verified notice includes a request for waiver of the 60-day advance labor notice requirements. CERA's waiver request will be addressed in a separate decision. The Board will establish the effective date of the exemption in its separate decision on the waiver request.
If the verified notice contains false or misleading information, the exemption is void ab initio. Petitions to revoke the exemption under 49 U.S.C. 10502(d) may be filed at any time. The filing of a petition to revoke will not automatically stay the effectiveness of the exemption. Petitions for stay must be filed no later than October 15, 2020.
All pleadings, referring to Docket No. FD 36436, must be filed with the Surface Transportation Board either via e-filing or in writing addressed to 395 E Street SW, Washington, DC 20423-0001. In addition, a copy of each pleading must be served on CERA's representative, Eric M. Hocky, Clark Hill PLC, Two Commerce Square, 2001
According to CERA, this action is categorically excluded from environmental review under 49 CFR 1105.6(c) and from historic preservation reporting requirements under 49 CFR 1105.8(b).
Board decisions and notices are available at
By the Board, Allison C. Davis, Director, Office of Proceedings.
On September 18, 2020, Union Pacific Railroad Company (UP) filed with the Surface Transportation Board (Board) a petition under 49 U.S.C. 10502 for exemption from the prior approval requirements of 49 U.S.C. 10903 to abandon an approximately 1 .16-mile portion of the Coeur D'Alene Industrial Lead, between milepost 1.09 and milepost 2.25, in Coeur D'Alene, Kootenai County, Idaho (the Line). The Line traverses U.S. Postal Service Zip Code 83854.
According to UP, there is one shipper, AmeriGas Propane (AmeriGas), on the Line. UP states that AmeriGas has reached an agreement with the Idaho Department of Transportation (IDOT) to relocate its facility off of the Line. (Pet. 2.) UP states that the abandonment will facilitate an IDOT project to expand Highway 41 and that it intends to convey the property to IDOT for use as a trail, subject to the issuance of a notice of interim trail use or abandonment (NITU).
UP states that, based on the information in its possession, the Line does not contain any federally granted rights-of-way. (
The interest of railroad employees will be protected by the conditions set forth in
By issuing this notice, the Board is instituting an exemption proceeding pursuant to 49 U.S.C. 10502(b). A final decision will be issued by January 6, 2021.
Any offer of financial assistance (OFA) under 49 CFR 1152.27(b)(2) will be due no later than 120 days after the filing of the petition for exemption, or 10 days after service of a decision granting the petition for exemption, whichever occurs sooner. Persons interested in submitting an OFA must first file a formal expression of intent to file an offer by October 18, 2020, indicating the type of financial assistance they wish to provide (
Following authorization for abandonment, the Line may be suitable for other public use, including interim trail use. Any request for a public use condition under 49 CFR 1152.28 or for interim trail use/rail banking under 49 CFR 1152.29 will be due no later than October 28, 2020.
All pleadings, referring to Docket No. AB 33 (Sub-No. 346X), should be filed with the Surface Transportation Board via e-filing on the Board's website. In addition, a copy of each pleading must be served on UP's representative, Jeremy M. Berman, Union Pacific Railroad Company, 1400 Douglas Street, Stop 1580, Omaha, NE 68179. Replies to the petition are due on or before October 28, 2020.
Persons seeking further information concerning abandonment procedures may contact the Board's Office of Public Assistance, Governmental Affairs, and Compliance at (202) 245-0238 or refer to the full abandonment regulations at 49 CFR part 1152. Questions concerning environmental issues may be directed to the Board's Office of Environmental Analysis (OEA) at (202) 245-0305. Assistance for the hearing impaired is available through the Federal Relay Service at (800) 877-8339.
An environmental assessment (EA) (or environmental impact statement (EIS), if necessary) prepared by OEA will be served upon all parties of record and upon any agencies or other persons who comment during its preparation. Other interested persons may contact OEA to obtain a copy of the EA (or EIS). EAs in abandonment proceedings normally will be made available within 60 days of the filing of the petition. The deadline for submission of comments on the EA generally will be within 30 days of its service.
Board decisions and notices are available at
By the Board, Allison C. Davis, Director, Office of Proceedings.
Office of the United States Trade Representative.
Notice and request for comments.
The U.S. Trade Representative is initiating an investigation regarding Vietnam's acts, policies, and practices related to the valuation of its currency. The Office of the United States Trade Representative (USTR) seeks comments regarding the investigation.
To be assured of consideration, you must submit written comments by November 12, 2020.
You should submit written comments through the Federal eRulemaking Portal:
For procedural questions concerning the submission of written comments, contact the Section 301 line at 202-395-5725. For other questions concerning the investigation, contact Michael Gagain, Assistant General Counsel, 202-395-9529, or Marta Prado, Deputy Assistant U.S. Trade Representative for Southeast Asia and the Pacific, 202-395-6216.
The Government of Vietnam, through the State Bank of Vietnam (SBV), tightly manages the value of its currency—the dong. The SBV's management of
Available evidence also indicates that the Government of Vietnam, through the SBV, actively intervened in the exchange market, which contributed to the dong's undervaluation in 2019. Specifically, the evidence indicates that in 2019, the SBV undertook net purchases of foreign exchange totaling approximately $22 billion, which had the effect of undervaluing the dong's exchange rate with the U.S. dollar during that year. Analysis suggests that Vietnam's action on the exchange rate in 2019 caused the average nominal bilateral exchange rate against the dollar over the year, 23,224 dong per dollar, to be undervalued by approximately 1,090 dong per dollar relative to the level consistent the equilibrium real effective exchange rate.
Section 302(b)(1)(A) of the Trade Act of 1974, as amended (Trade Act), authorizes the U.S. Trade Representative to initiate an investigation to determine whether an act, policy, or practice of a foreign country is actionable under section 301 of the Trade Act. Actionable matters under section 301 include acts, policies, and practices of a foreign country that are unreasonable or discriminatory and burden or restrict U.S. commerce. An act, policy, or practice is unreasonable if, while not necessarily in violation of, or inconsistent with, the international legal rights of the United States, it is otherwise unfair and inequitable.
On October 2, 2020, in light of the evidence regarding actions taken by Vietnam that contribute to the undervaluation of its currency, the U.S. Trade Representative initiated a section 301 investigation regarding Vietnam's acts, policies, and practices related to currency valuation. The investigation will focus on whether Vietnam's interventions—through the SBV—in exchange markets and other related actions that contribute to the undervaluation of Vietnam's currency are unreasonable or discriminatory and burden or restrict U.S. commerce. In conducting its investigation, USTR will consult with the Department of the Treasury as to matters of currency valuation and Vietnam's exchange rate policy.
Pursuant to section 302(b)(1)(B) of the Trade Act, USTR has consulted with appropriate advisory committees. USTR also has consulted with the interagency Section 301 Committee. Pursuant to section 303(a) of the Trade Act, USTR has requested consultations with the Government of Vietnam.
Pursuant to section 304 of the Trade Act, USTR must determine whether the act, policy, or practice under investigation is actionable under section 301. If that determination is affirmative, the U.S. Trade Representative must determine what action to take.
You may submit written comments on any issue covered by the investigation. In particular, USTR invites comments regarding:
• Whether Vietnam's currency is undervalued, and the level of the undervaluation.
• Vietnam's acts, policies, or practices that contribute to undervaluation of its currency.
• The extent to which Vietnam's acts, policies, or practices contribute to the undervaluation.
• Whether Vietnam's acts, policies and practices are unreasonable or discriminatory.
• The nature and level of burden or restriction on U.S. commerce caused by the undervaluation of Vietnam's currency.
• The determinations required under section 304 of the Trade Act, including what action, if any, should be taken.
In light of the uncertainties arising from COVID-19 restrictions, USTR is not at this time scheduling a public hearing in this investigation. USTR will provide further information in a subsequent notice if it will hold a hearing in this investigation.
All submissions must be in English and sent electronically via
File names should reflect the name of the person or entity submitting the comment. Please do not attach separate cover letters to electronic submissions; rather, include any information that would be in a cover letter in the comment itself. Similarly, to the extent possible, please include any exhibits, annexes, or other attachments in the same file as the comment itself, rather than submitting them as separate files.
For any comments submitted electronically that contain business confidential information (BCI), the file name of the business confidential version should begin with the characters `BCI.' You must clearly mark any page containing BCI by including `BUSINESS CONFIDENTIAL' on the top of that page and clearly indicating, via brackets, highlighting, or other means, the specific information that is BCI. If you request business confidential treatment, you must certify in writing that disclosure of the information would endanger trade secrets or profitability, and that you would not customarily release the information to the public. Filers of submissions containing BCI also must submit a public version of their comments. The file name of the public version should begin with the character `P.' Follow the `BCI' and `P' with the name of the person or entity submitting the comments. If these procedures are not sufficient to protect BCI or otherwise protect business interests, please contact the Section 301 line at 202-395-5725 to discuss whether alternative arrangements are possible.
USTR will post submissions in the docket for public inspection, except properly designated BCI. You can view submissions on
Office of the United States Trade Representative.
Notice and request for comments.
The U.S. Trade Representative is initiating an investigation of Vietnam's acts, policies, and practices related to the import and use of timber that is illegally harvested or traded. The Office of the United States Trade Representative (USTR) seeks comments regarding the investigation.
To be assured of consideration, you must submit written comments by November 12, 2020.
You should submit written comments through the Federal eRulemaking Portal:
For procedural questions concerning the submission of written comments, contact the Section 301 line at 202-395-5725. For other questions concerning the investigation, contact David Lyons, Assistant General Counsel, 202-395-9446, Marta Prado, Deputy Assistant U.S. Trade Representative for Southeast Asia and the Pacific, 202-395-6216, or Joseph Johnson, Senior Director for Environment and Natural Resources, 202-395-2464.
Vietnam is one of the world's largest exporters of wood products, including to the United States. In 2019, Vietnam exported to the United States more than $3.7 billion of wooden furniture. To supply the timber inputs needed for its wood products manufacturing sector, Vietnam relies on imports of timber harvested in other countries. Available evidence suggests that a significant portion of that imported timber was illegally harvested or traded (illegal timber). Some of that timber may be from species listed under the Convention on International Trade in Endangered Species of Wild Fauna and Flora (CITES).
Evidence indicates that much of the timber imported by Vietnam was harvested against the laws of the source country. Reports indicate that a significant amount of the timber exported from Cambodia to Vietnam was harvested on protected lands, such as wildlife sanctuaries, or outside of and therefore in violation of legal timber concessions. Cambodia nevertheless remains a significant source of Vietnam's timber imports. Similarly, timber sourced from other countries, such as Cameroon and the Democratic Republic of the Congo (DRC), may have been harvested against those countries' laws.
In addition, Vietnamese timber imports may be traded illegally. For example, it appears that most timber exported from Cambodia to Vietnam crosses the border in violation of Cambodia's log export ban. In addition, aspects of the importation and processing of this timber also may violate Vietnam's domestic law and be inconsistent with CITES.
Section 302(b)(1)(A) of the Trade Act of 1974, as amended (Trade Act), authorizes the U.S. Trade Representative to initiate an investigation to determine whether an act, policy, or practice of a foreign country is actionable under section 301 of the Trade Act. Actionable matters under section 301 include acts, policies, and practices of a foreign country that are unreasonable or discriminatory and burden or restrict U.S. commerce. An act, policy, or practice is unreasonable if, while not necessarily in violation of, or inconsistent with, the international legal rights of the United States, it is otherwise unfair and inequitable.
On October 2, 2020, the U.S. Trade Representative initiated a Section 301 investigation to examine whether Vietnam's acts, policies, and practices related to the import and use of illegal timber are unreasonable or discriminatory and burden or restrict U.S. commerce.
Pursuant to section 302(b)(1)(B) of the Trade Act, USTR has consulted with appropriate advisory committees. USTR also has consulted with the interagency Section 301 Committee. Pursuant to section 303(a) of the Trade Act, the U.S. Trade Representative has requested consultations with the Government of Vietnam.
Pursuant to section 304 of the Trade Act, the U.S. Trade Representative must determine whether the act, policy, or practice under investigation is actionable under section 301. If that determination is affirmative, the U.S. Trade Representative must determine what action to take.
The investigation initially will focus on the following issues:
• Vietnamese imports of illegal timber may be inconsistent with Vietnam's domestic laws, the laws of exporting countries, or international rules. The import of illegal timber may indicate that Vietnam is not enforcing its own laws concerning the import and processing of timber, such as laws requiring that wood processors ensure the lawful origins of the timber they use. For species listed under the CITES that are imported from Cambodia or the DRC, there is evidence that Vietnamese authorities are not requiring the permits or certificates that should be needed to enter or re-export from Vietnam.
• Evidence indicates that Vietnam at least tacitly may support the import and use of illegal timber. For example, reports indicate that Vietnamese officials do not record the origin of timber crossing the Cambodia-Vietnam border. This practice would enable Vietnamese exporters to disclaim knowledge of illegal timber inputs when exporting wood products to third countries. Vietnam may have allowed the importation of CITES-listed species based on invalid CITES permits. At the provincial government level, there are reports of Vietnamese officials accepting payments in return for facilitating illegal timber imports.
• Other acts, policies, and practices of Vietnam relating to the import and use of illegal timber.
You may submit written comments on any issue covered by the investigation. In particular, USTR invites comments regarding:
• The extent to which illegal timber is imported into Vietnam.
• The extent to which Vietnamese producers, including producers of wooden furniture, use illegal timber.
• The extent to which products of Vietnam made from illegal timber, including wooden furniture, are imported into the United States.
• Vietnam's acts, policies, or practices relating to the import and use of illegal timber.
• The nature and level of the burden or restriction on U.S. commerce caused by Vietnam's import and use of illegal timber.
• The determinations required under section 304 of the Trade Act, including what action, if any, should be taken.
In light of the uncertainties arising from COVID-19 restrictions, USTR is not at this time scheduling a public
All submissions must be in English and sent electronically via
File names should reflect the name of the person or entity submitting the comment. Please do not attach separate cover letters to electronic submissions; rather, include any information that would be in a cover letter in the comment itself. Similarly, to the extent possible, please include any exhibits, annexes, or other attachments in the same file as the comment itself, rather than submitting them as separate files.
For any comments that contain business confidential information (BCI), the file name of the business confidential version should begin with the characters `BCI.' You must clearly mark any page containing BCI by including `BUSINESS CONFIDENTIAL' on the top of that page and clearly indicating, via brackets, highlighting, or other means, the specific information that is BCI. If you request business confidential treatment, you must certify in writing that disclosure of the information would endanger trade secrets or profitability, and that you would not customarily release the information to the public. Filers of submissions containing BCI also must submit a public version of their comments. The file name of the public version should begin with the character `P.' Follow the `BCI' and `P' with the name of the person or entity submitting the comments. If these procedures are not sufficient to protect BCI or otherwise protect business interests, please contact the Section 301 line at 202-395-5725 to discuss whether alternative arrangements are possible.
USTR will post submissions in the docket for public inspection, except properly designated BCI. You can view submissions on
Federal Aviation Administration (FAA), DOT.
Notice and request for comments.
In accordance with the Paperwork Reduction Act of 1995, FAA invites public comments about our intention to request the Office of Management and Budget (OMB) approval a new information collection. The
Written comments should be submitted by November 9, 2020.
Written comments and recommendations for the proposed information collection should be sent within 30 days of publication of this notice to
Ryan C. Smith by email at:
Airman Knowledge Tests are administered at approved Knowledge Testing Centers by an approved test proctor who is required to administer the appropriate Airman Knowledge Test to the individual pursuing FAA certification. Individuals taking an FAA Airman Knowledge Test must provide the following information to be collected in order to complete the registration process before the administration of the Airman Knowledge Test: Name, FAA Tracking Number (FTN), physical address, Date of Birth, email address, photo identification, phone number, test authorization (credentials of the individual such as an instructor endorsement), and previous number of test attempts.
The information provided by the individual is collected and stored electronically in the application used for test registration and delivery. This information is used to determine the identify and eligibility of the individual for compliance of FAA certification requirements.
200,000 respondents × 2 minutes each = 400,000 minutes.
400,000 minutes/60 minutes in an hour = 6,666 hours annually.
Federal Aviation Administration (FAA), DOT.
Notice and request for comments.
In accordance with the Paperwork Reduction Act of 1995, FAA invites public comments about our intention to request the Office of Management and Budget (OMB) approval for a new information collection. The collection involves survey responses from U.S. operator (Part 121 and Part 135) employees who lead departments responsible for Operations and Standards, Training, and Safety to understand how industry has addressed recommendations from SAFO 17007 and to inform future guidance on manual flight skill proficiency in future en-route and terminal environments. This information collection is necessary, as no other information sources have been identified that would provide the required information. Operator policies and procedures are not publicly shared; therefore, this is the only reliable method to gather anonymous information from a representative industry sample.
Written comments should be submitted by December 7, 2020.
Please send written comments:
Victor Quach by email at:
An invitation to complete a one-time electronic survey will be sent to U.S operators (Part 121 and Part 135) employees who lead departments responsible for Operations and Standards, Training, and Safety. These personnel are responsible for implementing the SAFO's recommendations into line operations and training. All data provided will be kept private to the extent possible by law. To preclude the identification of individual responses, all respondents will be given a participant code that does not identify them or their organization. Only the project leaders will have access to the coding key, which will be destroyed after data analyses are complete. Only analyses and reports of aggregate data will be produced and released.
Failure to collect data on industry incorporation of SAFO 17007 recommendations will impact the quality of future FAA guidance provided to address manual flight operations. As such, it may also jeopardize future manual flight operations in an increasingly automated environment. SAFO 17007 encourages operators to practice manual flight in an operational environment; however, increased use of flight deck automation from NextGen National Airspace improvements will limit practice opportunities resulting in an increased need to make other improvement, which may be addressed through future FAA guidance.
Federal Aviation Administration (FAA), Department of Transportation (DOT).
Notice of availability; request for comments.
The FAA announces the availability of the draft Flight Standardization Board (FSB) Report, The Boeing Company 737, Revision 17 including an addendum describing potential refinements to The Boeing Company 737 Airplane Flight Manual (AFM) Airspeed Unreliable Non-Normal Checklist, which applies to The Boeing Company Model 737-8 and 737- 9 (737 MAX) airplanes. The FAA invites public comment.
The FAA must receive comments on these proposed documents by November 2, 2020.
You may send comments identified by docket number FAA-2020-0928 using any of the following methods:
For questions on the FSB Report, contact James F. Kline, Aircraft Evaluation Division, telephone 206-231-3950, email
Section 44701(a)(5) of title 49 of the U.S.C. requires the Administrator to promulgate regulations and minimum standards for other practices, methods, and procedures necessary for safety in air commerce and national security. Consistent with this authority, the Administrator publishes FSB Reports for use by FAA employees who approve training programs, FAA employees and designees who certify airmen, and aircraft operators and training providers, to assist them in developing their flightcrew member training, checking, and currency. Additionally, the Administrator publishes this notice consistent with this same authority.
In September 2020, the FAA completed an operational evaluation of proposed operating procedures (checklists) and pilot training as a result of The Boeing Company Model 737-8 and 737-9 (737 MAX) design changes. The operational evaluation identified potential refinements to this Airplane Flight Manual (AFM) non-normal checklist Airspeed Unreliable. This AFM non-normal procedure was referenced in the NPRM Airworthiness Directives; The Boeing Company Airplanes (85 FR 47698). The FAA has posted the draft Boeing 737 FSB Report and an addendum to the Boeing 737 FSB Report, describing the potential refinements to the non-normal checklist at
The FAA invites public comments on the draft FSB Report, The Boeing Company 737, Revision 17, including the FSB Report addendum.
Federal Aviation Administration (FAA), DOT.
Notice and request for comments.
In accordance with the Paperwork Reduction Act of 1995, FAA invites public comments about our intention to request the Office of Management and Budget (OMB) approval for a new information collection. The
Written comments should be submitted by November 9, 2020.
Written comments and recommendations for the proposed information collection should be sent within 30 days of publication of this notice to
Robert Busto by email at:
Issued in Washington, DC.
Federal Highway Administration (FHWA), DOT.
Notice and request for comments.
FHWA invites public comments about our intention to request the Office of Management and Budget's (OMB) approval for a new information collection, which is summarized below under
Please submit comments by December 7, 2020.
You may submit comments identified by DOT Docket ID 2020-0019 by any of the following methods:
Kenneth Petty,
This information, once compiled, will allow the FHWA to better understand the existing capabilities that agencies across the country have in support of the planning, performance and asset management processes and the readiness they possess to handle new and ongoing challenges. As a result of the collected information, FHWA will focus its efforts and resources on providing targeted and meaningful support for planning, performance and asset management implementation nationwide. Additionally, FHWA will ensure that excellent planning, performance and asset managementpractices are identified will be shared broadly across the country.
The Paperwork Reduction Act of 1995; 44 U.S.C. Chapter 35, as amended; and 49 CFR 1.48.
Federal Motor Carrier Safety Administration (FMCSA), DOT.
Notice of final disposition.
The Federal Motor Carrier Safety Administration (FMCSA) announces its decision to grant National Tank Truck Carriers Inc.'s (NTTC) application for a limited 5-year exemption to allow motor carriers operating tank trailers to install a red or amber brake-activated pulsating lamp in the upper center position or in an upper dual outboard position on the rear of the trailers, in addition to the steady-burning brake lamps required by the Federal Motor Carrier Safety
This exemption is applicable October 8, 2020 and ending October 8, 2025.
Mr. Luke Loy, Vehicle and Roadside Operations Division, Office of Carrier, Driver, and Vehicle Safety, MC-PSV, (202) 366-0676, Federal Motor Carrier Safety Administration, 1200 New Jersey Avenue SE, Washington, DC 20590-0001.
FMCSA has authority under 49 U.S.C. 31136(e) and 31315 to grant exemptions from certain parts of the FMCSRs. FMCSA must publish a notice of each exemption request in the
The Agency reviews safety analyses and public comments submitted, and determines whether granting the exemption would likely achieve a level of safety equivalent to, or greater than, the level that would be achieved by the current regulation (49 CFR 381.305). The decision of the Agency must be published in the
NTTC applied for an exemption from 49 CFR 393.25(e) to allow motor carriers operating tank trailers to install a red or amber brake-activated pulsating lamp in the upper center position or in an upper dual outboard position on the rear of the trailers, in addition to the steady-burning brake lamps required by the FMCSRs. A copy of the application is included in the docket referenced at the beginning of this notice.
NTTC is an association of over 200 tank truck companies that transport more than 80 percent of the volume hauled in this narrowly-defined industry. Most NTTC members are regional, family-owned tank truck businesses that specialize in bulk transportation of hazardous products, such as petroleum products, chemicals, gases, and hazardous wastes. These companies also haul non-hazardous materials such as bulk foods and dry bulk products such as cement or plastic pellets.
Section 393.25(e) of the FMCSRs requires all exterior lamps (both required lamps and any additional lamps) to be steady-burning, except turn signal lamps, hazard warning signal lamps, school bus warning lamps, amber warning lamps or flashing warning lamps on tow trucks and commercial motor vehicles (CMV) transporting oversized loads, and warning lamps on emergency and service vehicles authorized by State or local authorities. NTTC seeks an exemption to allow motor carriers operating tank trailers to install a red or amber brake-activated pulsating lamp in the upper center position or in an upper dual outboard position on the rear of the trailers, in addition to the steady-burning brake lamps required by the FMCSRs. NTTC contends that the addition of the brake-activated pulsating lamp will improve safety, and states that research shows that pulsating brake lamps installed in addition to required steady-burning red brake lamps improve visibility and prevent accidents. NTTC also noted that FMCSA has previously granted a similar, but not identical, temporary exemption to one of its member companies, Groendyke Transport, Inc. (Groendyke), based in part on Groendyke's real-world experience demonstrating that use of amber pulsating brake-activated warning lamps in addition to steady-burning red brake lamps had decreased the frequency of rear-end accidents involving its fleet of tank trailers (84 FR 17910; April 26, 2019).
NTTC cited several studies conducted by the National Highway Traffic Safety Administration (NHTSA), another agency in the U.S. Department of Transportation, on the issues of rear-end crashes, distracted driving, and braking signals. NTTC stated:
Research indicates that there are ways to improve the attention-getting qualities of braking systems. Including a pulsating brake lamp on a lead vehicle has quantifiable effect on the drivers of following vehicles and measurably reduces rear-end collisions. Drivers are redirected and altered faster and more efficiently when a pulsating brake lamp draws their attention to the lead vehicle. As a result, rear-end collisions can be prevented or at least reduced.
Beginning in the second quarter of 2015, Groendyke began installing amber brake-activated pulsating lamps on some of its fleet without authorization from FMCSA to compare the frequency of rear-end collisions between (1) trailers equipped with both a centrally-mounted amber brake-activated pulsating lamp and the required steady-burning lamps, and (2) trailers equipped with only the steady-burning lamps required by the FMCSRs. As of July 31, 2017, Groendyke had outfitted 632 of its 1,440 trailers with an amber brake-activated pulsating lamp.
Data gathered by Groendyke between January 2015 and July 2017 show that trailers equipped with both the amber brake-activated pulsating lamp and the steady-burning brake lamps were involved in 33.7 percent fewer rear-end collisions as compared to vehicles equipped with only the steady-burning brake lamps. Groendyke also analyzed its data to determine whether the presence of the amber brake-activated pulsating lamp improved outcomes when drivers were slowing or stopping at railroad crossings.
The results of the Groendyke Brake Warning Device Campaign are clear: The frequency of rear-end collisions is markedly lower when trailers are outfitted with pulsating brake lamps in addition to the steady-burning lamps required by the FMCSRs. The pulsating brake lamps draw other drivers' attention to what is happening
The exemption requested by NTTC would apply to all motor carriers operating tank trailers, and would permit those motor carriers to install a red or amber brake-activated pulsating lamp in the upper center position or in an upper dual outboard position on the rear of the trailers, in addition to the steady-burning brake lamps required by the FMCSRs. NTTC states that the additional brake-activated warning lamp(s) will not have an adverse impact on safety, and that adherence to the terms and conditions of the exemption would likely achieve a level of safety equivalent to or greater than the level of safety achieved without the exemption.
FMCSA published a notice of the NTTC application in the
TCA, TSEI, and ATA each supported granting the application. CVSA and VDOT supported the use of amber brake-activated pulsating warning lamps, but were opposed to the use of red brake-activated pulsating warning lamps.
TCA cited its support for Groendyke's similar application for temporary exemption, and highlighted the safety benefits of a 33.7 percent reduction in rear-end collisions when using an amber brake-activated pulsating lamp.
Further, TCA stated:
All tank carriers have a high stake in ensuring their trailers are safe since they are possibly hauling flammable fuel or liquid hazardous materials. Being involved in a rear-end collision not only could result in the loss of cargo, but also could potentially threaten the lives of the truck driver, the driver of the vehicle causing the collision, and others in the surrounding area. Since NTTC is not requesting for tank truck carriers to be exempt from the regulations on required steady-burning lamps, but rather is asking to be allowed to install additional equipment with pulsating lamps, TCA believes it is in the best interest of the industry for FMCSA to grant the requested flexibility. The baseline safety of the required steady-burning lamps will continue to be in place on these tank trailers even if the additional pulsating brake lamps are installed.
ATA believes that granting the exemption will permit tank truck carriers in addition to Groendyke to similarly reduce their rear-end crashes, in furtherance of FMCSA's primary safety mission.
Specifically, ATA stated:
FMCSA and NHTSA research have demonstrated the potential benefits of alternative rear signaling systems to reduce rear-end crashes. Rear-end crashes which amount to roughly 30% of all crashes are frequently attributed to a following vehicle's failure or delay to respond to the lead vehicle's application of brakes to decelerate.
Consistent with the DOT reports and research, motor carriers like Groendyke recognize the potential of ERS [Enhanced Rear Signaling] for improving safe operations when compared with traditional standard brake lamps. For example, ERS can provide the following functions beyond what traditional CMV lighting and reflective devices offer: Attention to CMVs stopped ahead; awareness of road side breakdowns; emergency braking; and driver confidence from both vehicles. In addition to safety benefits, ERS performance is superior to steady burning brake lamps in severe weather conditions, tail light glare and around infrastructure obstacles. ERS also reduces the chances of damage to both vehicles involved in a rear-end crash, which improves commercial operation uptime, CSA scores for the CMV owner, and traffic inconvenience.
TSEI stated that ample research has demonstrated that the use of pulsating brake lamps increases visibility of equipment and vehicles and would maintain operational safety levels, but also implement more efficient and effective operations. TSEI stated that by granting NTTC's application, the Agency would further its Beyond Compliance Program.
VDOT supports the intent of the proposed exemption to promote the safety of motor carriers operating tank trailers, and states that allowing commercial tank trailers to use brake-activated pulsating lamps may improve the reaction time of other motorists when the commercial vehicle is slowing down or stopping. VDOT supports developing standard equipment, and recommends that the Agency authorize the use of only amber brake-activated flashing lights, because amber lights are typically used to denote potential unsafe conditions or to denote caution. VDOT expressed concern that red brake-activated flashing lights on tanker trucks may cause confusion and may prompt unintended and/or undesirable actions, given that flashing red lights are typically displayed by vehicles responding to emergencies.
CVSA agrees with NTTC's assessment that the collected data supports the safety benefits of amber brake-activated pulsating lamps, and supports allowing them to be installed on the rear of tank trailers. However, CVSA is opposed to the use of red brake-activated pulsating warning lamps which are typically associated with emergency vehicles. CVSA states that allowing red pulsating lamps on the rear of tank trailers may negatively impact the driving public's recognition and response to emergency vehicles. CVSA noted that many States have laws prohibiting nonemergency vehicles from having pulsating red lights. CVSA is concerned that if the exemption is granted to allow the installation and use of red pulsating lights, it would be in direct conflict with laws in several States. CVSA notes that while amber brake-activated pulsating lights have a demonstrated safety benefit, red brake-activated pulsating lamps would likely have unintended safety impacts related to emergency vehicles.
Twenty-four individuals supported, and one opposed, the exemption. Several of the commenters identified themselves as Safety Directors for motor carriers operating tank trailers, and fully supported the temporary exemption, noting that their respective carriers have experienced multiple rear-end collisions throughout years of operation. Those safety directors noted that other motorists are frequently not paying attention, and that many rear-end crashes of tanker trailers hauling hazardous material occur when stopped at railroad crossings. These individual commenters believe that any technology that has been shown to reduce rear-end crashes should be allowed, and cited various benefits of the red and amber brake-activated pulsating lamp, including (1) enhanced awareness that the vehicle is making a stop, especially at railroad crossings, and (2) increased visibility in severe weather conditions.
One individual expressed concern that depending on the brightness and speed of the pulsating brake-activated warning lamps, and their positioning close to the standard brake lights and turn signals, following drivers may be (1) distracted and (2) confused regarding the ability to determine whether the vehicle is turning or not. This individual acknowledged that his experience was with low boy trailers, and not with tanker trailers as identified in subject application.
The FMCSA has evaluated the NTTC exemption application, and the comments received. The Agency
Rear-end crashes generally account for approximately 30 percent of all crashes. These types of crashes often result from a failure to respond (or delays in responding) to a stopped or decelerating lead vehicle. Data collected between 2010 and 2016 show that large trucks are consistently three times more likely than other vehicles to be struck in the rear in two-vehicle fatal crashes.
Both FMCSA and NHTSA have conducted research programs regarding alternative rear signaling systems to address rear-end crashes. FMCSA has conducted research and development of an Enhanced Rear Signaling (ERS) system for CMVs.
During Phase I of this effort, researchers performed crash database analyses to determine causal factors of rear-end collisions and to identify potential countermeasures. Phase II continued through prototype development based on recommendations from Phase I. During Phase II field testing, potential benefits of using such countermeasures were realized. During Phase III, a multi-phased approach was executed to design, develop, and test multiple types of countermeasures on a controlled test track and on public highways. Phase III resulted in positive results for a rear warning prototype system comprising 12 light-emitting diode (LED) units that would flash at 5 Hz to provide a visual warning to the following-vehicle drivers indicating that, with continued closing rate and distance, a collision will occur with the lead vehicle. Finally, the prototype system was further developed and refined to include modification of the system into a unit designed for simple CMV installation, collision-warning activation refinements, and rear lighting brightness adjustments for nighttime conditions. Formal closed test track and real-world testing were then performed to determine the ERS system collision-warning activation performance.
While the efforts described above demonstrated a promising system for follow-on research, FMCSA ultimately decided not to pursue formal field operational testing of the prototype system because of concerns relating to (1) the cost to implement the ERS system as configured, and (2) fleets' willingness to invest in the technology, given the cost of the system. Nonetheless, the preliminary research showed that the ERS system performed well at detecting and signaling rear-end crash threats and drawing the gaze of following-vehicle drivers to the forward roadway which, if implemented, could potentially reduce the number and frequency of rear-end crashes into the rear of CMVs.
Separately, NHTSA has performed a series of research studies intended to develop and evaluate rear signaling applications designed to reduce the frequency and severity of rear-end crashes via enhancements to rear-brake lighting by redirecting drivers' visual attention to the forward roadway (for cases involving a distracted driver), and/or increasing the saliency or meaningfulness of the brake signal (for inattentive drivers).
Initially, the study quantified the attention-getting capability and discomfort glare of a set of candidate rear brake lighting configurations, using driver judgments, as well as eye-drawing metrics. This study served to narrow the set of candidate lighting configurations to those that would most likely be carried forward for additional study on-road. Both look-up (eye drawing) data and interview data supported the hypothesis that simultaneous flashing of all rear lighting combined with increased brightness would be effective in redirecting the driver's eyes to the lead vehicle when the driver is looking away with tasks that involve visual load.
Subsequently, the study quantified the attention-getting capability of a set of candidate rear brake lighting configurations, including proposed approaches from automotive companies. This study was conducted to provide data for use in a simulation model to assess the effectiveness and safety benefits of enhanced rear brake light countermeasures. Among other things, this research demonstrated that flashing all lights simultaneously or alternately flashing is a promising signal for use in enhanced brake light applications, even at levels of brightness within the current regulated limits. Specifically, the study concluded that substantial performance gains may be realized by increasing brake lamp brightness levels under flashing configurations; however, increases beyond a certain brightness threshold will not return substantive performance gains.
Both FMCSA and NHTSA have conducted extensive research and development programs to examine alternative rear signaling systems to reduce the incidence of rear-end crashes. However, while these efforts concluded that improvements could be realized through rear lighting systems that flash, neither the FMCSRs nor the Federal Motor Vehicle Safety Standards (FMVSS) currently permit the use of pulsating, brake-activated lamps on the rear of CMVs.
With respect to the use of amber lights, NHTSA has conducted research on the effectiveness of rear turn signal color on the likelihood of being involved in a rear-end crash.
FMCSA acknowledges the concerns of VDOT, CVSA and other commenters that flashing, rotating, or pulsating red lamps are generally permitted only on emergency vehicles. FMCSA notes that Police and other State authorized emergency vehicles utilize high intensity, constantly flashing, rotating or pulsating red lamps visible from all directions on the vehicle and that continuously operate when activated. The amber or red brake-activated pulsating lamps requested by NTTC are visible only to the rear of the tanker trailer, and are similar in lamp intensity and flash rate of the vehicle's standard rear hazard warning lamps system currently allowed by the regulations. At the same time, however, the Agency agrees with TCA and NTTC that the 33.7 percent reduction in rear-end crashes documented by Groendyke between January 1, 2015, and July 31, 2017, for its trailers that had been equipped with the additional lights is both persuasive and compelling, given the magnitude of the rear-end crash population. FMCSA believes that this real-world experience, along with the FMCSA and NHTSA research programs that demonstrated the ability of alternative rear signaling systems to reduce the frequency and severity of rear-end crashes, is sufficient to conclude that the implementation of red or amber brake-activated pulsating lamp in the upper center position or in an upper dual outboard position on the rear of the trailers, in addition to the steady-burning brake lamps required by the regulations, is likely to provide a level of safety that is equivalent to, or greater than, the level of safety achieved without the exemption.
The Agency hereby grants the exemption for a 5-year period, beginning October 8, 2020 and ending October 8, 2025. During the temporary exemption period, motor carriers operating tank trailers will be allowed to install a red or amber brake-activated pulsating lamp in the upper center position or in an upper dual outboard position on the rear of the trailers, in addition to the steady-burning brake lamps required by the FMCSRs.
The exemption will be valid for 5 years unless rescinded earlier by FMCSA. The exemption will be rescinded if: (1) Motor carriers operating tank trailers fail to comply with the terms and conditions of the exemption; (2) the exemption has resulted in a lower level of safety than was maintained before it was granted; or (3) continuation of the exemption would not be consistent with the goals and objectives of 49 U.S.C. 31136(e) and 31315(b).
Interested parties possessing information that would demonstrate that motor carriers operating tank trailers use of a red or amber brake-activated pulsating lamp in the upper center position or in an upper dual outboard position on the rear of the trailers, in addition to the steady-burning brake lamps required by the FMCSRs, is not achieving the requisite statutory level of safety should immediately notify FMCSA. The Agency will evaluate any such information and, if safety is being compromised or if the continuation of the exemption is not consistent with 49 U.S.C. 31136(e) and 31315(b), will take immediate steps to revoke the exemption.
In accordance with 49 U.S.C. 31313(d), as implemented by 49 CFR 381.600, during the period this exemption is in effect, no State shall enforce any law or regulation applicable to interstate commerce that conflicts with or is inconsistent with this exemption. States may, but are not required to, adopt the same exemption with respect to operations in intrastate commerce.
Federal Motor Carrier Safety Administration (FMCSA), DOT.
Notice of application for exemption; request for comments.
FMCSA announces receipt of an application from two individuals for an exemption from the prohibition in the Federal Motor Carrier Safety Regulations (FMCSRs) against operation of a commercial motor vehicle (CMV) by persons with a current clinical diagnosis of myocardial infarction, angina pectoris, coronary insufficiency, thrombosis, or any other cardiovascular disease of a variety known to be accompanied by syncope (transient loss of consciousness), dyspnea (shortness of breath), collapse, or congestive heart failure. If granted, the exemption would enable these individuals with an implantable cardioverter defibrillator (ICD) to operate a CMV in interstate commerce.
Comments must be received on or before November 9, 2020.
You may submit comments identified by the Federal Docket Management System (FDMS) Docket ID FMCSA-2020-0189 using any of the following methods:
•
•
•
•
To avoid duplication, please use only one of these four methods. See the “Public Participation” portion of the
Ms. Christine A. Hydock, Chief, Medical Programs Division, (202) 366-4001,
If you submit a comment, please include the docket number for this notice (Docket No. FMCSA-2020-0189), indicate the specific section of this document to which each comment applies, and provide a reason for each suggestion or recommendation. You may submit your comments and material online or by fax, mail, or hand delivery, but please use only one of these means. FMCSA recommends that you include your name and a mailing address, an email address, or a phone number in the body of your document so that FMCSA can contact you if there are questions regarding your submission.
To submit your comment online, go
If you submit your comments by mail or hand delivery, submit them in an unbound format, no larger than 8
FMCSA will consider all comments and material received during the comment period.
To view comments, as well as any documents mentioned in this notice as being available in the docket, go to
In accordance with 5 U.S.C. 553(c), DOT solicits comments from the public to better inform its rulemaking process. DOT posts these comments, without edit, including any personal information the commenter provides, to
Under 49 U.S.C. 31136(e) and 31315(b), FMCSA may grant an exemption from the FMCSRs for no longer than a 5-year period if it finds such exemption would likely achieve a level of safety that is equivalent to, or greater than, the level that would be achieved absent such exemption. The statute also allows the Agency to renew exemptions at the end of the 5-year period. FMCSA grants medical exemptions from the FMCSRs for a 2-year period to align with the maximum duration of a driver's medical certification.
The individuals listed in this notice have requested an exemption from 49 CFR 391.41(b)(4). Accordingly, the Agency will evaluate the qualifications of the applicants to determine whether granting the exemption will achieve the required level of safety mandated by statute.
The physical qualification standard found in § 391.41(b)(4) states that a person is physically qualified to drive a CMV if that person has no current clinical diagnosis of myocardial infarction, angina pectoris, coronary insufficiency, thrombosis, or any other cardiovascular disease of a variety known to be accompanied by syncope, dyspnea, collapse, or congestive cardiac failure.
In addition to the regulations, FMCSA has published advisory criteria
Mr. Adams, Jr. is a CMV driver in Virginia. A June 19, 2020, letter from his cardiologist reports that his ICD was implanted in March of 2020, that he has received no shocks since implantation, and his heart condition is stable with further testing scheduled.
Mr. Ronquillo is a CMV driver in California. A July 2020, letter from his cardiologist reports that his ICD was implanted in 2013 and that he has been asymptomatic and stable over the past seven years. He has not had any ICD shocks or arrhythmias.
In accordance with 49 U.S.C. 31136(e) and 31315(b), FMCSA requests public comment from all interested persons on the exemption petition described in this notice. We will consider all comments received before the close of business on the closing date indicated under the
Federal Motor Carrier Safety Administration (FMCSA), DOT.
Notice and request for comments.
In accordance with the Paperwork Reduction Act of 1995, FMCSA announces its plan to submit the Information Collection Request (ICR) described below to the Office of Management and Budget (OMB) for its review and approval and invites public comment. The information collected will be used to help ensure that motor carriers of passengers and property maintain appropriate levels of financial responsibility to operate on public highways.
We must receive your comments on or before December 7, 2020.
You may submit comments identified by Federal Docket Management System (FDMS) Docket Number FMCSA-2020-0178 using any of the following methods:
•
•
•
•
Mr. Jeff Secrist, Office of Registration and Safety Information, Chief, Registration, Licensing and Insurance Division, Department of Transportation, Federal Motor Carrier Safety Administration, West Building 6th Floor, 1200 New Jersey Avenue SE, Washington, DC 20590. Telephone: 202-385-2367; email:
Federal Motor Carrier Safety Administration (FMCSA), DOT.
Notice of renewal of exemptions; request for comments.
FMCSA announces its decision to renew exemptions for 44 individuals from the vision requirement in the Federal Motor Carrier Safety Regulations (FMCSRs) for interstate commercial motor vehicle (CMV) drivers. The exemptions enable these individuals to continue to operate CMVs in interstate commerce without meeting the vision requirements in one eye.
Each group of renewed exemptions were applicable on the dates stated in the discussions below and will expire on the dates stated in the discussions below. Comments must
You may submit comments identified by the Federal Docket Management System (FDMS) Docket No. FMCSA-2000-7165, Docket No. FMCSA-2002-12294, Docket No. FMCSA-2006-23773, Docket No. FMCSA-2007-29019, Docket No. FMCSA-2008-0106, Docket No. FMCSA-2008-0231, Docket No. FMCSA-2010-0082, Docket No. FMCSA-2010-0114, Docket No. FMCSA-2011-0365, Docket No. FMCSA-2011-0366, Docket No. FMCSA-2012-0104, Docket No. FMCSA-2012-0160, Docket No. FMCSA-2012-0161, Docket No. FMCSA-2013-0028, Docket No. FMCSA-2013-0169, Docket No. FMCSA-2013-0170, Docket No. FMCSA-2013-0174, Docket No. FMCSA-2014-0003, Docket No. FMCSA-2014-0004, Docket No. FMCSA-2014-0007, Docket No. FMCSA-2014-0010, Docket No. FMCSA-2015-0056, Docket No. FMCSA-2015-0070, Docket No. FMCSA-2015-0347, Docket No. FMCSA-2016-0025, Docket No. FMCSA-2016-0030, Docket No. FMCSA-2016-0031, Docket No. FMCSA-2016-0033, Docket No. FMCSA-2017-0022, Docket No. FMCSA-2017-0026, Docket No. FMCSA-2018-0007, Docket No. FMCSA-2018-0011, Docket No. FMCSA-2018-0012, Docket No. FMCSA-2018-0013, or Docket No. FMCSA-2018-0014 using any of the following methods:
•
•
•
•
To avoid duplication, please use only one of these four methods. See the “Public Participation” portion of the
Ms. Christine A. Hydock, Chief, Medical Programs Division, (202) 366-4001,
If you submit a comment, please include the docket number for this notice (Docket No. FMCSA-2000-7165; FMCSA-2002-12294; FMCSA-2006-23773; FMCSA-2007-29019; FMCSA-2008-0106; FMCSA-2008-0231; FMCSA-2010-0082; FMCSA-2010-0114; FMCSA-2011-0365; FMCSA-2011-0366; FMCSA-2012-0104; FMCSA-2012-0160; FMCSA-2012-0161; FMCSA-2013-0028; FMCSA-2013-0169; FMCSA-2013-0170; FMCSA-2013-0174; FMCSA-2014-0003; FMCSA-2014-0004; FMCSA-2014-0007; FMCSA-2014-0010; FMCSA-2015-0056; FMCSA-2015-0070; FMCSA-2015-0347; FMCSA-2016-0025; FMCSA-2016-0030; FMCSA-2016-0031; FMCSA-2016-0033; FMCSA-2017-0022; FMCSA-2017-0026; FMCSA-2018-0007; FMCSA-2018-0011; FMCSA-2018-0012; FMCSA-2018-0013; FMCSA-2018-0014), indicate the specific section of this document to which each comment applies, and provide a reason for each suggestion or recommendation. You may submit your comments and material online or by fax, mail, or hand delivery, but please use only one of these means. FMCSA recommends that you include your name and a mailing address, an email address, or a phone number in the body of your document so that FMCSA can contact you if there are questions regarding your submission.
To submit your comment online, go to
If you submit your comments by mail or hand delivery, submit them in an unbound format, no larger than 8
FMCSA will consider all comments and material received during the comment period.
To view comments, as well as any documents mentioned in this notice as being available in the docket, go to
In accordance with 5 U.S.C. 553(c), DOT solicits comments from the public
Under 49 U.S.C. 31136(e) and 31315(b), FMCSA may grant an exemption from the FMCSRs for no longer than a 5-year period if it finds such exemption would likely achieve a level of safety that is equivalent to, or greater than, the level that would be achieved absent such exemption. The statute also allows the Agency to renew exemptions at the end of the 5-year period. FMCSA grants medical exemptions from the FMCSRs for a 2-year period to align with the maximum duration of a driver's medical certification.
The physical qualification standard for drivers regarding vision found in 49 CFR 391.41(b)(10) states that a person is physically qualified to drive a CMV if that person has distant visual acuity of at least 20/40 (Snellen) in each eye without corrective lenses or visual acuity separately corrected to 20/40 (Snellen) or better with corrective lenses, distant binocular acuity of a least 20/40 (Snellen) in both eyes with or without corrective lenses, field of vision of at least 70° in the horizontal meridian in each eye, and the ability to recognize the colors of traffic signals and devices showing red, green, and amber.
The 44 individuals listed in this notice have requested renewal of their exemptions from the vision standard in § 391.41(b)(10), in accordance with FMCSA procedures. Accordingly, FMCSA has evaluated these applications for renewal on their merits and decided to extend each exemption for a renewable 2-year period.
Interested parties or organizations possessing information that would otherwise show that any, or all, of these drivers are not currently achieving the statutory level of safety should immediately notify FMCSA. The Agency will evaluate any adverse evidence submitted and, if safety is being compromised or if continuation of the exemption would not be consistent with the goals and objectives of 49 U.S.C. 31136(e) and 31315(b), FMCSA will take immediate steps to revoke the exemption of a driver.
In accordance with 49 U.S.C. 31136(e) and 31315(b), each of the 44 applicants has satisfied the renewal conditions for obtaining an exemption from the vision standard (see 65 FR 33406; 65 FR 57234; 67 FR 46016; 67 FR 57266; 67 FR 57267; 69 FR 51346; 69 FR 52741; 71 FR 6826; 71 FR 19602; 71 FR 50970; 71 FR 53489; 72 FR 58362; 72 FR 67344; 73 FR 11989; 73 FR 35198; 73 FR 46973; 73 FR 48270; 73 FR 48275; 73 FR 51336; 73 FR 54888; 74 FR 57553; 75 FR 13653; 75 FR 25919; 75 FR 34212; 75 FR 39729; 75 FR 44051; 75 FR 47888; 75 FR 50799; 75 FR 52062; 75 FR 52063; 76 FR 70212; 77 FR 3552; 77 FR 5874; 77 FR 13691; 77 FR 17117; 77 FR 23797; 77 FR 27847; 77 FR 38381; 77 FR 38386; 77 FR 40945; 77 FR 41879; 77 FR 46153; 77 FR 51846; 77 FR 52388; 77 FR 52389; 77 FR 52391; 78 FR 27281; 78 FR 41188; 78 FR 64274; 78 FR 67454; 78 FR 77778; 79 FR 1908; 79 FR 4803; 79 FR 13085; 79 FR 14333; 79 FR 14571; 79 FR 18392; 79 FR 23797; 79 FR 28588; 79 FR 29495; 79 FR 29498; 79 FR 38659; 79 FR 41735; 79 FR 41740; 79 FR 46153; 79 FR 46300; 79 FR 51643; 79 FR 52388; 79 FR 53514; 79 FR 64001; 80 FR 33007; 80 FR 59230; 80 FR 63839; 80 FR 67476; 81 FR 1284; 81 FR 1474; 81 FR 15401; 81 FR 15404; 81 FR 20433; 81 FR 20435; 81 FR 21647; 81 FR 28138; 81 FR 45214; 81 FR 48493; 81 FR 52514; 81 FR 59266; 81 FR 66726; 81 FR 68098; 81 FR 74494; 81 FR 81230; 81 FR 90050; 81 FR 91239; 82 FR 15277; 82 FR 37504; 82 FR 47309; 83 FR 2306; 83 FR 2311; 83 FR 6925; 83 FR 15195; 83 FR 15214; 83 FR 18648; 83 FR 24146; 83 FR 24585; 83 FR 28320; 83 FR 28325; 83 FR 28328; 83 FR 28332; 83 FR 28335; 83 FR 33292; 83 FR 34661; 83 FR 34677; 83 FR 40638; 83 FR 40648; 83 FR 45749; 83 FR 54644). They have submitted evidence showing that the vision in the better eye continues to meet the requirement specified at § 391.41(b)(10) and that the vision impairment is stable. In addition, a review of each record of safety while driving with the respective vision deficiencies over the past 2 years indicates each applicant continues to meet the vision exemption requirements. These factors provide an adequate basis for predicting each driver's ability to continue to drive safely in interstate commerce. Therefore, FMCSA concludes that extending the exemption for each renewal applicant for a period of 2 years is likely to achieve a level of safety equal to that existing without the exemption.
In accordance with 49 U.S.C. 31136(e) and 31315(b), the following groups of drivers received renewed exemptions in the month of September and are discussed below. As of September 8, 2020, and in accordance with 49 U.S.C. 31136(e) and 31315, the following 32 individuals have satisfied the renewal conditions for obtaining an exemption from the vision requirement in the FMCSRs for interstate CMV drivers (71 FR 6826; 71 FR 19602; 72 FR 58362; 72 FR 67344; 73 FR 11989; 73 FR 35198; 73 FR 48275; 74 FR 57553; 75 FR 13653; 75 FR 25919; 75 FR 39729; 75 FR 44051; 76 FR 70212; 77 FR 3552; 77 FR 5874; 77 FR 13691; 77 FR 17117; 77 FR 23797; 77 FR 38381; 77 FR 41879; 77 FR 46153; 77 FR 51846; 77 FR 52391; 78 FR 27281; 78 FR 41188; 78 FR 64274; 78 FR 67454; 78 FR 77778; 79 FR 1908; 79 FR 4803; 79 FR 13085; 79 FR 14333; 79 FR 14571; 79 FR 18392; 79 FR 23797; 79 FR 28588; 79 FR 29498; 79 FR 38659; 79 FR 41735; 79 FR 41740; 79 FR 46153; 79 FR 53514; 80 FR 33007; 80 FR 59230; 80 FR 63839; 80 FR 67476; 81 FR 1284; 81 FR 1474; 81 FR 15401; 81 FR 15404; 81 FR 20433; 81 FR 20435; 81 FR 21647; 81 FR 28138; 81 FR 45214; 81 FR 48493; 81 FR 52514; 81 FR 66726; 81 FR 68098; 81 FR 90050; 81 FR 91239; 82 FR 15277; 82 FR 37504; 82 FR 47309; 83 FR 2306; 83 FR 2311; 83 FR 6925; 83 FR 15195; 83 FR 15214; 83 FR 18648; 83 FR 24146; 83 FR 24585; 83 FR 28320; 83 FR 28325; 83 FR 28328; 83 FR 28332; 83 FR 28335; 83 FR 33292; 83 FR 34661; 83 FR 34677; 83 FR 40648; 83 FR 45749; 83 FR 54644):
The drivers were included in docket numbers FMCSA-2006-23773;
As of September 9, 2020, and in accordance with 49 U.S.C. 31136(e) and 31315, the following three individuals have satisfied the renewal conditions for obtaining an exemption from the vision requirement in the FMCSRs for interstate CMV drivers (75 FR 34212; 75 FR 47888; 77 FR 27847; 77 FR 38386; 77 FR 40945; 77 FR 41879; 77 FR 52391; 79 FR 29495; 79 FR 41735; 81 FR 81230; 83 FR 40638):
The drivers were included in docket numbers FMCSA-2010-0114; FMCSA-2012-0104; FMCSA-2012-0161. Their exemptions were applicable as of September 9, 2020, and will expire on September 9, 2022.
As of September 21, 2020, and in accordance with 49 U.S.C. 31136(e) and 31315, the following four individuals have satisfied the renewal conditions for obtaining an exemption from the vision requirement in the FMCSRs for interstate CMV drivers (65 FR 33406; 65 FR 57234; 67 FR 46016; 67 FR 57266; 67 FR 57267; 69 FR 51346; 69 FR 52741; 71 FR 50970; 71 FR 53489; 73 FR 48270; 73 FR 51336; 75 FR 50799; 75 FR 52062; 77 FR 52389; 79 FR 46300; 81 FR 81230; 83 FR 40638):
As of September 23, 2020, and in accordance with 49 U.S.C. 31136(e) and 31315, the following three individuals have satisfied the renewal conditions for obtaining an exemption from the vision requirement in the FMCSRs for interstate CMV drivers (73 FR 46973; 73 FR 54888; 75 FR 52063; 77 FR 52388; 79 FR 52388; 81 FR 81230; 83 FR 40638):
The drivers were included in docket number FMCSA-2008-0231. Their exemptions were applicable as of September 23, 2020, and will expire on September 23, 2022.
As of September 29, 2020, and in accordance with 49 U.S.C. 31136(e) and 31315, the following individual has satisfied the renewal conditions for obtaining an exemption from the vision requirement in the FMCSRs for interstate CMV drivers (81 FR 59266; 81 FR 74494; 83 FR 40638):
The driver was included in docket number FMCSA-2016-0033. The exemption is applicable as of September 29, 2020, and will expire on September 29, 2022.
As of September 30, 2020, and in accordance with 49 U.S.C. 31136(e) and 31315, the following individual has satisfied the renewal conditions for obtaining an exemption from the vision requirement in the FMCSRs for interstate CMV drivers (79 FR 51643; 79 FR 64001; 81 FR 81230; 83 FR 40638):
The driver was included in docket number FMCSA-2014-0010. The exemption is applicable as of September 30, 2020, and will expire on September 30, 2022.
The exemptions are extended subject to the following conditions: (1) Each driver must undergo an annual physical examination (a) by an ophthalmologist or optometrist who attests that the vision in the better eye continues to meet the requirements in 49 CFR 391.41(b)(10), and (b) by a certified medical examiner (ME), as defined by § 390.5, who attests that the driver is otherwise physically qualified under § 391.41; (2) each driver must provide a copy of the ophthalmologist's or optometrist's report to the ME at the time of the annual medical examination; and (3) each driver must provide a copy of the annual medical certification to the employer for retention in the driver's qualification file or keep a copy of his/her driver's qualification if he/her is self-employed. The driver must also have a copy of the exemption when driving, for presentation to a duly authorized Federal, State, or local enforcement official. The exemption will be rescinded if: (1) The person fails to comply with the terms and conditions of the exemption; (2) the exemption has resulted in a lower level of safety than was maintained before it was granted; or (3) continuation of the exemption would not be consistent with the goals and objectives of 49 U.S.C. 31136(e) and 31315(b).
During the period the exemption is in effect, no State shall enforce any law or regulation that conflicts with this exemption with respect to a person operating under the exemption.
Based upon its evaluation of the 44 exemption applications, FMCSA renews the exemptions of the aforementioned drivers from the vision requirement in § 391.41(b)(10), subject to the requirements cited above. In accordance with 49 U.S.C. 31136(e) and 31315(b), each exemption will be valid for 2 years unless revoked earlier by FMCSA.
Under part 211 of title 49 Code of Federal Regulations (CFR), this document provides the public notice that on September 18, 2020, the Regional Transportation District Commuter Rail (RTDC) petitioned the Federal Railroad Administration (FRA) for a waiver of compliance from certain provisions of the Federal railroad safety regulations contained at 49 CFR part 238, Passenger Equipment Safety Standards. FRA assigned the petition Docket Number FRA-2020-0077.
Specifically, RTDC requests relief from 49 CFR 238.309,
A copy of the petition, as well as any written communications concerning the petition, is available for review online at
Interested parties are invited to participate in these proceedings by submitting written views, data, or comments. FRA does not anticipate scheduling a public hearing in connection with these proceedings since the facts do not appear to warrant a hearing. If any interested parties desire an opportunity for oral comment and a public hearing, they should notify FRA, in writing, before the end of the comment period and specify the basis for their request.
All communications concerning these proceedings should identify the appropriate docket number and may be submitted by any of the following methods:
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Communications received by November 23, 2020 will be considered by FRA before final action is taken. Comments received after that date will be considered if practicable.
Anyone can search the electronic form of any written communications and comments received into any of our dockets by the name of the individual submitting the comment (or signing the document, if submitted on behalf of an association, business, labor union, etc.). Under 5 U.S.C. 553(c), DOT solicits comments from the public to better inform its processes. DOT posts these comments, without edit, including any personal information the commenter provides, to
Issued in Washington, DC.
Under part 211 of title 49 Code of Federal Regulations (CFR), this document provides the public notice that on September 23, 2020, Colebrookdale Railroad petitioned the Federal Railroad Administration (FRA) for a waiver of compliance from certain provisions of the Federal railroad safety regulations contained at 49 CFR part 232, Brake System Safety Standards for Freight and Other Non-Passenger Trains and Equipment; End-Of-Train Devices. FRA assigned the petition Docket Number FRA-2020-0080.
Colebrookdale Railroad is the operator of a tourist train over 8.6 miles of track owned by the Eastern Berks Gateway Railroad. Colebrookdale Railroad operates four historic passenger cars with Westinghouse UC air brakes. The UC valves are required to be clean, repaired, lubricated, and tested every 15 months.
The petitioner states that the UC valves are inspected by a certified brake shop in Leetsdale, Pennsylvania. Further, the Colebrookdale Railroad has never had a brake valve failure in seven years of operation, nor experienced an Initial Terminal Test or a Class III brake test failure, in any weather conditions. Additionally, improvements in gasket material and lubrication have increased the reliability of these older valves over the years.
A copy of the petition, as well as any written communications concerning the petition, is available for review online at
Interested parties are invited to participate in these proceedings by submitting written views, data, or comments. FRA does not anticipate scheduling a public hearing in connection with these proceedings since the facts do not appear to warrant a hearing. If any interested parties desire an opportunity for oral comment and a public hearing, they should notify FRA, in writing, before the end of the comment period and specify the basis for their request.
All communications concerning these proceedings should identify the appropriate docket number and may be submitted by any of the following methods:
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•
•
•
Communications received by November 23, 2020 will be considered by FRA before final action is taken. Comments received after that date will be considered if practicable.
Anyone can search the electronic form of any written communications and comments received into any of our dockets by the name of the individual submitting the comment (or signing the document, if submitted on behalf of an association, business, labor union, etc.). Under 5 U.S.C. 553(c), DOT solicits comments from the public to better inform its processes. DOT posts these comments, without edit, including any personal information the commenter provides, to
Issued in Washington, DC.
Federal Transit Administration (FTA), DOT.
Notice of funding opportunity.
The Coronavirus Disease 2019 (COVID-19) public health emergency
Applicants must submit completed proposals for funding opportunity FTA-2020-015-TRI through the
Please send any questions on this notice to Jamel El-Hamri email:
The Public Transportation COVID-19 Research Demonstration Grant Program is funded through the Public Transportation Innovation Program (49 U.S.C. 5312), with the goal to develop, deploy, and demonstrate innovative solutions that improve the operational efficiency of transit agencies, as well as enhance the mobility of transit users affected by the COVID-19 public health emergency.
Eligible projects will propose to develop and deploy innovative solutions in four major areas: (1) Vehicle, facility, equipment and infrastructure cleaning and disinfection; (2) exposure mitigation measures; (3) innovative mobility such as contactless payments; and (4) measures that strengthen public confidence in transit.
As required by 49 U.S.C. 5312(e)(4), projects funded under this NOFO must participate in an evaluation by an independent outside entity that will conduct a comprehensive evaluation of the success or failure of the projects funded under this subsection and any plan for broad-based implementation of the innovation promoted by successful projects.
FTA makes available $10,000,000 in fiscal year (FY) 2020 funds under the Public Transportation Innovation Program (49 U.S.C. 5312) to finance the Public Transportation COVID-19 Research Demonstration Grant Program. FTA may supplement the total funds available if additional funding becomes available at the time project selections are made.
FTA will grant pre-award authority starting on the date of the project award announcement for selected projects and should be completed within 24 months from the date of award. Funds are available only for eligible expenses incurred after the announcement of project selections.
Eligible applicants include State and local governmental authorities, direct recipients of Urbanized Area (49 U.S.C. 5307) and Rural Area (49 U.S.C. 5311) formula funds, and Indian tribes. Eligible applicants are limited to FTA grantees or subrecipients who would be the primary beneficiaries of the innovative products and services that are developed—typically public transit agencies. Except for projects proposed by Indian tribes, proposals for projects in rural (non-urbanized) areas must be submitted as part of a consolidated State proposal. States and other eligible applicants also may submit consolidated proposals for projects in urbanized areas. The submission of the Statewide application will not preclude the submission and consideration of any application from other eligible recipients in an urbanized area in a State. Proposals may contain projects to be implemented by the recipient or its subrecipients. Eligible subrecipients include public agencies, private nonprofit organizations, and private providers engaged in public transportation. Eligible applicants may submit consolidated proposals for projects.
The maximum Federal share of project costs is 100 percent. FTA may give additional consideration to applicants that propose a local share and may view these applicants as more competitive. The applicant must document the source(s) of the local match, if any, in the grant application. For any applicants proposing match, eligible local match sources include the following:
• Cash from non-Government sources other than revenues from providing public transportation services;
• revenues derived from the sale of advertising and concessions;
• revenues generated from value capture financing mechanisms;
• funds from an undistributed cash surplus;
• replacement or depreciation cash fund or reserve;
• new capital; or
• in-kind contributions.
Eligible projects will propose innovative solutions to improve operational efficiencies of transit agencies and enhance the mobility of transit users, through projects that demonstrate innovative solutions for:
• Vehicle, facility, equipment and infrastructure cleaning and disinfection;
• exposure mitigation measures such a real-time notification of rail and bus passenger loads;
• new multi-modal payment innovative mobility systems such as contactless payments; and
• measures that strengthen public confidence in transit.
Each applicant may only submit one proposal.
Applications must be submitted through
A complete proposal submission consists of at least two forms:
1. The SF-424 Mandatory Form (downloadable from
2. the supplemental form for the FY 2020 COVID-19 Demonstration Program (downloadable from
The application must include responses to all sections of the SF-424 mandatory form and the supplemental form unless a section is indicated as optional. FTA will use the information on the supplemental form to determine applicant and project eligibility for the program and to evaluate the proposal against the selection criteria described in part E of this notice. FTA will accept only one supplemental form per SF-424 submission. FTA encourages applicants to consider submitting a single supplemental form that includes multiple activities to be evaluated as a consolidated proposal.
Applicants may attach additional supporting information to the SF-424 submission, including but not limited to letters of support, project budgets, or excerpts from relevant planning documents. Supporting documentation must be described and referenced by file name in the appropriate response section of the supplemental form, or it may not be reviewed.
Information such as applicant name, Federal amount requested, local match amount, description of areas served, etc., may be requested in varying degrees of detail on both the SF-424 form and supplemental form. Applicants must fill in all fields unless stated otherwise on the forms. If applicants copy information into the supplemental form from another source, they should verify that the supplemental form has fully captured pasted text and that it has not truncated the text due to character limits built into the form. Applicants should use both the “Check Package for Errors” and the “Validate Form” validation buttons on both forms to check all required fields. Applicants should also ensure that the Federal and local amounts specified are consistent.
Addressing the deteriorating conditions and disproportionately high fatality rates on our rural transportation infrastructure is of critical interest to the Department, as rural transportation networks face unique challenges in safety, infrastructure condition, and passenger and freight usage. Consistent with the R.O.U.T.E.S. Initiative, the Department encourages applicants to consider how the project will address the challenges faced by rural areas.
The SF-424 Mandatory Form and the supplemental form will prompt applicants for the required information, including:
Each applicant is required to: (1) Be registered in SAM before submitting an application; (2) provide a valid unique entity identifier in its application; and (3) continue to maintain an active SAM registration with current information at all times during which the applicant has an active Federal award or an application or plan under consideration by FTA. These requirements do not apply if the applicant: (1) Is excepted from the requirements under 2 CFR 25.110(b) or (c); or (2) has an exception approved by FTA under 2 CFR 25.110(d). FTA may not make an award until the applicant has complied with all applicable unique entity identifier and SAM requirements. If an applicant has not fully complied with the requirements by the time FTA is ready to make an award, FTA may determine that the applicant is not qualified to receive an award and use that determination as a basis for making a Federal award to another applicant. All applicants must provide a unique entity identifier provided by SAM. Registration in SAM may take as little as 3-5 business days, but there can be unexpected steps or delays. For example, the applicant may need to obtain an Employer Identification Number. FTA recommends allowing ample time, up to several weeks, to complete all steps. For additional information on obtaining a unique entity identifier, please visit
Project proposals must be submitted electronically through
FTA urges applicants to submit applications at least 72 hours prior to the due date to allow time to correct any problems that may have caused either
Deadlines will not be extended due to scheduled website maintenance.
Within 48 hours after submitting an electronic application, the applicant should receive two email messages from
Applicants are encouraged to begin the process of registration on the
Funds may be used for post-award expenditures only. Funds under this NOFO cannot be used to reimburse projects for otherwise eligible expenses incurred prior to the date of project award announcements.
FTA encourages applicants to identify scaled funding options in case insufficient funding is available to fund a project at the full requested amount. If an applicant indicates that a project is scalable, the applicant must provide an appropriate minimum funding amount that will fund an eligible project that achieves the objectives of the program and meets all relevant program requirements. The applicant must provide a clear explanation of how a reduced award would affect the project budget and scope. FTA may award a lesser amount whether or not the applicant provides a scalable option.
Addressing the deteriorating conditions and disproportionately high fatality rates on our rural transportation infrastructure is of critical interest to the Department, as rural transportation networks face unique challenges in safety, infrastructure condition, and passenger and freight usage. Consistent with the R.O.U.T.E.S. Initiative, the Department will consider how the project will address the challenges faced by rural areas. In addition, the Department will review and consider applications for funding pursuant to this Notice in accordance with the President's September 2, 2020 memorandum, entitled
FTA will evaluate proposals submitted according to the following criteria: (a) Project Innovation and Impact; (b) Project Approach; (c) National Applicability; (d) Commercialization and/or Knowledge Transfer; and (e) Technical, Legal and Financial Capacity. FTA encourages each applicant to demonstrate how a project supports all criteria with the most relevant information the applicant can provide, regardless of whether such information has been specifically requested or identified in this notice.
i. Effectiveness of the project in achieving and demonstrating the specific objectives of this program.
ii. Demonstration of benefits in addressing the needs of the transit agency and industry and impacts to infrastructure, equipment, transit workforce, and riders.
iii. Degree of improvement over current and existing technologies, designs, and/or practices applicable to the transit industry.
i. Quality of the project approach such as existing partnerships, collaboration strategies and level of commitment of the project partners.
ii. Proposal is realistic in its approach to fulfill the milestones/deliverables, schedule and goals.
i. Degree to which the project could be replicated by other transit agencies regionally or nationally.
ii. Ability to evaluate technologies, designs and/or practices in a wide variety of conditions and locales.
iii. Degree to which the technology, designs and/or practices can be replicated by other transportation modes.
i. Demonstrates a realistic plan for moving the results of the project into the transit marketplace (patents, conferences, articles in trade magazines, webinar, site visits, etc.).
ii. How the project team plans to work with the industry on improving best practices, guidance and/or standards, if applicable.
iii. Demonstrate a clear understanding and robust approach to data collection, access and management.
Capacity of the applicant and any partners to successfully execute the project effort. There should be no outstanding legal, technical, or financial issues with the applicant that would make this a high-risk project.
An FTA technical evaluation committee will evaluate proposals based on the published project evaluation criteria. Members of the technical evaluation committee will rate the applications and may seek clarification about any statement in an application. The FTA Administrator will determine the final selection and amount of funding for each project after consideration of the findings of the technical evaluation committee. Geographic diversity, diversity of the project type, the amount of local match to be provided, and the applicant's receipt and management of other Federal transit funds may be considered in FTA's award decisions. Prior fare payment innovation efforts may receive priority consideration. The FTA Administrator will consider the following key DOT objectives:
a. Utilizing alternative funding sources and innovative financing models to attract non-Federal sources of investment;
b. Whether the project is located in or supports public transportation service in a qualified opportunity zone designated pursuant to 26.U.S.C. 1400Z-1; and
c. The extent to which the project addresses challenges specific to the provision of rural public transportation.
Prior to making a grant award, FTA is required to review and consider any information about the applicant that is in the Federal Awardee Performance and Integrity Information System (FAPIIS) accessible through SAM. An applicant may review and comment on information about itself that a Federal awarding agency previously entered.
FTA will consider any comments by the applicant, in addition to the other information in FAPIIS, in making a judgment about the applicant's integrity, business ethics, and record of performance under Federal awards when completing the review of risk posed by applicants as described in 2 CFR 200.205 Federal Awarding Agency Review of Risk Posed by Applicants.
FTA will announce the final project selections on the FTA website. Project recipients should contact their FTA Regional Office for additional information regarding allocations for
There is no minimum or maximum grant award amount, but FTA intends to fund as many meritorious projects as possible. FTA only will consider proposals from eligible recipients for eligible activities. Due to funding limitations, projects selected for funding may receive less than the amount originally requested. In those cases, applicants must be able to demonstrate that the proposed projects are still viable and can be completed with the amount awarded.
FTA will issue specific guidance to recipients regarding pre-award authority at the time of selection. FTA does not provide pre-award authority for competitive funds until projects are selected, and there are Federal requirements that must be met before costs are incurred. For more information about FTA's policy on pre-award authority,
Selected applicants will submit a grant application through FTA's electronic grant management system and adhere to the customary FTA grant requirements for research project (insert Circular name). All competitive grants, regardless of award amount, will be subject to the Congressional notification and release process. FTA emphasizes that third-party procurement applies to all funding awards, as described in FTA Circular 4220.1F, “Third Party Contracting Guidance.” However, FTA may approve applications that include a specifically identified partnering organization(s) (2 CFR 200.302(f)). When included, the application, budget, and budget narrative should provide a clear understanding of how the selection of these organizations is critical for the project and give sufficient detail about the costs involved.
FTA encourages applicants to engage the appropriate State Departments of Transportation, Regional Transportation Planning Organizations, or Metropolitan Planning Organizations in areas to be served by the project funds available under this program.
The applicant assures that it will comply with all applicable Federal statutes, regulations, executive orders, FTA circulars, and other Federal administrative requirements in carrying out any project supported by the FTA grant. The applicant acknowledges that it is under a continuing obligation to comply with the terms and conditions of the grant agreement issued for its project with FTA. The applicant understands that Federal laws, regulations, policies, and administrative practices might be modified from time to time and may affect the implementation of the project. The applicant agrees that the most recent Federal requirements will apply to the project unless FTA issues a written determination otherwise. The applicant must submit the Certifications and Assurances before receiving a grant if it does not have current certifications on file.
In connection with any program or activity conducted with or benefiting from funds awarded under this notice, recipients of funds must comply with all applicable requirements of Federal law, including, without limitation, the Constitution of the United States; statutory, regulatory, and public policy requirements, including without limitation, those protecting free speech, religious liberty, public welfare, the environment, and prohibiting discrimination; the conditions of performance, non-discrimination requirements, and other assurances made applicable to the award of funds in accordance with regulations of the Department of Transportation; and applicable Federal financial assistance and contracting principles promulgated by the Office of Management and Budget. In complying with these requirements, recipients must ensure that no concession agreements are denied or other contracting decisions made on the basis of speech or other activities protected by the First Amendment. If the Department determines that a recipient has failed to comply with applicable Federal requirements, the Department may terminate the award of funds and disallow previously incurred costs, requiring the recipient to reimburse any expended award funds.
The post-award reporting requirements include submission of the Federal Financial Report (FFR) and Milestone Progress Report in TrAMS. An evaluation of the grant will occur at various points in the demonstration process and at the end of the project. In addition, FTA is responsible for producing an Annual Report to Congress that compiles evaluation of selected projects, including an evaluation of the performance measures identified by the applicants. All applicants must develop an evaluation plan to measure the success or failure of their projects and describe any plans for broad-based implementation of successful projects. FTA may request data and reports to support the evaluation and Annual Report.
To achieve a comprehensive understanding of the impacts and implications of each proposed COVID-19 Research Demonstration Program, projects funded under this announcement will require the recipient to conduct a third party independent evaluation of their project. Recipients will be required to contract with a third party independent evaluator to assist in developing an evaluation plan, and collecting, storing and managing data required to fulfill the evaluation requirement. No more than 10 percent of the Federal share of the project may be used to hire the third-party independent evaluator and the inclusion of a third-party independent evaluation should be described in the grant application. If the project duration is more than two years, an interim evaluation report would need to be submitted to FTA, otherwise the evaluation report should be included as part of the final project report.
Projects funded under this announcement will be required to establish a set of performance metrics set by the third-party independent evaluator and shared with FTA.
For questions about applying, please contact Jamel El-Hamri email:
FTA staff also may conduct briefings on the competitive grants selection and award process upon request.
Internal Revenue Service (IRS), Treasury.
Notice of meeting.
An open meeting of the Taxpayer Advocacy Panel Joint Committee will be conducted. The Taxpayer Advocacy Panel is soliciting public comments, ideas, and suggestions on improving customer service at the Internal Revenue Service.
The meeting will be held Thursday, November 19, 2020.
Gilbert Martinez at 1-888-912-1227 or (737) 800-4060.
Notice is hereby given pursuant to Section 10(a)(2) of the Federal Advisory Committee Act, 5 U.S.C. App. (1988) that an open meeting of the Taxpayer Advocacy Panel Joint Committee will be held Thursday, November 19, 2020, at 1:30 p.m. Eastern Time via teleconference. The public is invited to make oral comments or submit written statements for consideration. For more information please contact Gilbert Martinez at 1-888-912-1227 or (737-800-4060), or write TAP Office 3651 S. IH-35, STOP 1005 AUSC, Austin, TX 78741, or post comments to the website:
The agenda will include various committee issues for submission to the IRS and other TAP related topics. Public input is welcomed.
Internal Revenue Service (IRS), Treasury.
Notice of meeting.
An open meeting of the Taxpayer Advocacy Panel's Special Projects Committee will be conducted. The Taxpayer Advocacy Panel is soliciting public comments, ideas, and suggestions on improving customer service at the Internal Revenue Service.
The meeting will be held Thursday, November 12, 2020.
Antoinette Ross at 1-888-912-1227 or 202-317-4110.
Notice is hereby given pursuant to Section 10(a)(2) of the Federal Advisory Committee Act, 5 U.S.C. App. (1988) that an open meeting of the Taxpayer Advocacy Panel's Special Projects Committee will be held Thursday, November 12, 2020, at 11:00 a.m. Eastern Time. The public is invited to make oral comments or submit written statements for consideration. Due to limited time and structure of meeting, notification of intent to participate must be made with Antoinette Ross. For more information please contact Antoinette Ross at 1-888-912-1227 or 202-317-4110, or write TAP Office, 1111 Constitution Ave. NW, Room 1509, Washington, DC 20224 or contact us at the website:
Internal Revenue Service (IRS), Treasury.
Notice of meeting.
An open meeting of the Taxpayer Advocacy Panel's Taxpayer Communications Project Committee will be conducted. The Taxpayer Advocacy Panel is soliciting public comments, ideas, and suggestions on improving customer service at the Internal Revenue Service.
The meeting will be held Tuesday, November 10, 2020.
Cedric Jeans at 1-888-912-1227 or 901-707-3935.
Notice is hereby given pursuant to Section 10(a)(2) of the Federal Advisory Committee Act, 5 U.S.C. App. (1988) that a meeting of the Taxpayer Advocacy Panel Taxpayer Communications Project Committee will be held Tuesday, November 10, 2020, at 12:00 p.m. Eastern Time. The public is invited to make oral comments or submit written statements for consideration. Due to limited time and structure of meeting, notification of intent to participate must be made with Cedric Jeans. For more information please contact Cedric Jeans at 1-888-912-1227 or 901-707-3935, or write TAP Office, 5333 Getwell Road, Memphis, TN 38118 or contact us at the website:
Internal Revenue Service (IRS), Treasury.
Notice of meeting.
An open meeting of the Taxpayer Advocacy Panel's Taxpayer Assistance Center Improvements Project Committee will be conducted. The Taxpayer Advocacy Panel is soliciting public comments, ideas, and suggestions on improving customer service at the Internal Revenue Service.
The meeting will be held Tuesday, November 10, 2020.
Matthew O'Sullivan at 1-888-912-1227 or (510) 907-5274.
Notice is hereby given pursuant to Section 10(a)(2) of the Federal Advisory Committee Act, 5 U.S.C. App. (1988) that an open meeting of the Taxpayer
Department of the Treasury.
Notice of members of the Legal Division Performance Review Board (PRB).
This notice announces the appointment of members of the Legal Division PRB. The purpose of this Board is to review and make recommendations concerning proposed performance appraisals, ratings, bonuses, and other appropriate personnel actions for incumbents of SES positions in the Legal Division.
October 8, 2020.
Office of the General Counsel, Department of the Treasury, 1500 Pennsylvania Avenue NW, Room 3000, Washington, DC 20220, Telephone: (202) 622-0283 (this is not a toll-free number).
The Board shall consist of at least three members. In the case of an appraisal of a career appointee, more than half the members shall consist of career appointees. Composition of the specific PRBs will be determined on an ad hoc basis from among the individuals listed in this notice.
The names and titles of the PRB members are as follows:
United States Mint, Department of the Treasury.
Notice.
The United States Mint is announcing pricing for United States Mint numismatic products in accordance with the table below:
Derrick Griffin, Marketing Specialist, Sales and Marketing; United States Mint; 801 9th Street NW, Washington, DC 20220; or call 202-354-7579.
31 U.S.C. 5111, 5112, 5132, & 9701
Veterans Benefits Administration, Department of Veterans Affairs.
Notice.
Veterans Benefits Administration, Department of Veterans Affairs (VA), is announcing an opportunity for public comment on the proposed collection of certain information by the agency. Under the Paperwork Reduction Act (PRA) of 1995, Federal agencies are required to publish notice in the
Written comments and recommendations on the proposed collection of information should be received on or before December 7, 2020.
Submit written comments on the collection of information through Federal Docket Management System (FDMS) at
Danny S. Green, (202) 421-1354 or email
Under the PRA of 1995, Federal agencies must obtain approval from the Office of Management and Budget (OMB) for each collection of information they conduct or sponsor. This request for comment is being made pursuant to Section 3506(c)(2)(A) of the PRA.
With respect to the following collection of information, VBA invites comments on: (1) Whether the proposed collection of information is necessary for the proper performance of VBA's functions, including whether the information will have practical utility; (2) the accuracy of VBA's estimate of the burden of the proposed collection of information; (3) ways to enhance the quality, utility, and clarity of the information to be collected; and (4) ways to minimize the burden of the collection of information on respondents, including through the use of automated collection techniques or the use of other forms of information technology.
By direction of the Secretary.
The Department of Veterans Affairs (VA) gives notice under the Federal Advisory Committee Act, 5 U.S.C. App. 2, that a virtual meeting of the Advisory Committee on Cemeteries and Memorials will be held on October 21, 2020-October 22, 2020. The meeting sessions will begin and ends as follows:
The meeting sessions are open to the public. If you are interested in attending the meeting virtually, the dial-in number for both days is 1-404-397-1596, Access Code: 1998939772#.
The purpose of the Committee is to advise the Secretary of Veterans Affairs on the administration of national cemeteries, soldiers' lots and plots, the selection of new national cemetery sites, the erection of appropriate memorials, and the adequacy of Federal burial benefits. The Committee will make recommendations to the Secretary regarding such activities.
On Wednesday, October 21, 2020, the agenda will include remarks by VA Leadership; appointment of new member, Mr. Donn Weaver; report on the Missing in America Program; discussion on COVID 19: Restrictions, lessons learned, and its impact on families; update on the Veterans Legacy Program, Veterans Legacy Memorial, Outreach, Cemetery Dedications, Social Media, and other initiatives to inform the public about benefits and to memorialize Veterans; public comments; and open discussion.
On Thursday, October 22, 2020, the agenda will include a remarks and recap from committee chair; update on the Transfer of the Eleven Army Cemeteries and the Veterans Cemetery Grants Program; update on the Rural and Urban burial Initiative; report on the Hardest Five Percent of Veterans Requiring Access to Burial Options; public comments; and open discussion.
Any member of the public wishing to attend the meeting should contact Ms. Christine Hamilton, Designated Federal Officer, at (202) 461-5681. Please leave a voice message. The Committee will also accept written comments. Comments may be transmitted electronically to the Committee at
Veterans Health Administration, Department of Veterans Affairs.
Notice.
Veterans Health Administration, Department of Veterans Affairs (VA), is announcing an opportunity for public comment on the proposed collection of certain information by the agency. Under the Paperwork Reduction Act (PRA) of 1995, Federal agencies are required to publish notice in the
Submit written comments on the collection of information through Federal Docket Management System (FDMS) at
Brian McCarthy at (202) 615-9241.
Under the PRA of 1995, Federal agencies must obtain approval from the Office of Management and Budget (OMB) for each collection of information they conduct or sponsor. This request for comment is being made pursuant to Section 3506(c)(2)(A) of the PRA.
With respect to the following collection of information, VHA invites comments on: (1) Whether the proposed collection of information is necessary for the proper performance of VHA's functions, including whether the information will have practical utility; (2) the accuracy of VHA's estimate of the burden of the proposed collection of information; (3) ways to enhance the quality, utility, and clarity of the information to be collected; and (4) ways to minimize the burden of the collection of information on respondents, including through the use of automated collection techniques or the use of other forms of information technology.
VA Form 10-0137,
VA Form 10-0137 (both English and Spanish-English language versions) has a current OMB Paperwork Reduction Act (PRA) clearance under OMB Control Number 2900-0556. In addition, 2900-0556 now includes the collection of a “Close Personal Friend Statement” for incapacitated Veterans who have not completed an Advance Directive and are in need of health care. When a Veteran is incapacitated and does not have an Advance Directive, the VA regulations allow a statement to be submitted from a “Close Personal Friend” who will be responsible for making health care decisions on behalf of the Veteran. It is estimated that 300 such statements will be collected annually. VA seeks to renew the PRA clearance for the information collection under OMB Control Number 2900-0556.
By direction of the Secretary.
Veterans Benefits Administration, Department of Veterans Affairs.
Notice.
Veterans Benefits Administration, Department of Veterans Affairs (VA), is announcing an opportunity for public comment on the proposed collection of certain information by the agency. Under the Paperwork Reduction Act (PRA) of 1995, Federal agencies are required to publish notice in the
Written comments and recommendations on the proposed collection of information should be received on or before December 7, 2020.
Submit written comments on the collection of information through Federal Docket Management System (FDMS) at
Danny S. Green at (202) 421-1354.
Under the PRA of 1995, Federal agencies must obtain approval from the Office of Management and Budget (OMB) for each collection of information they conduct or sponsor. This request for comment is being made pursuant to Section 3506(c)(2)(A) of the PRA.
With respect to the following collection of information, VBA invites comments on: (1) Whether the proposed collection of information is necessary for the proper performance of VBA's functions, including whether the information will have practical utility; (2) the accuracy of VBA's estimate of the burden of the proposed collection of information; (3) ways to enhance the quality, utility, and clarity of the information to be collected; and (4) ways to minimize the burden of the collection of information on respondents, including through the use of automated collection techniques or the use of other forms of information technology.
VA Form 21-0538 has been revised; (1) letter template removed as it was a duplicate of a VA cover letter already in use, (2) the title has been changed from `Mandatory Status of Dependents' to
By direction of the Secretary.
Veterans Benefits Administration, Department of Veterans Affairs.
Notice.
In compliance with the Paperwork Reduction Act (PRA) of 1995, this notice announces that the Veterans Benefits Administration, Department of Veterans Affairs, will submit the collection of information abstracted below to the Office of Management and Budget (OMB) for review and comment. The PRA submission describes the nature of the information collection and its expected cost and burden and it includes the actual data collection instrument.
Written comments and recommendations for the proposed information collection should be sent within 30 days of publication of this notice to
Danny S. Green, Enterprise Records Service (005R1B), Department of Veterans Affairs, 810 Vermont Avenue NW, Washington, DC 20420, (202) 421-1354 or email
An agency may not conduct or sponsor, and a person is not required to respond to a collection of information unless it displays a currently valid OMB control number. The
By direction of the Secretary.
Office of the Assistant Secretary for Public and Indian Housing, HUD.
Proposed rule.
The Housing Opportunity Through Modernization Act of 2016 (HOTMA) was signed into law on July 29, 2016. HOTMA made numerous changes that affect either the Housing Choice Voucher (HCV) tenant-based program or the Project-Based Voucher (PBV) program, or both. Among other changes, HOTMA established alternatives to HUD's housing quality standard inspection requirements, it established a statutory definition of public housing agency (PHA)-owned housing, and it amended several elements of both the HCV and PBV programs, in the latter case ranging from owner proposal selection procedures to how participants are selected. In addition to implementing these HOTMA provisions, HUD has included regulatory changes in this proposed rule that are intended to reduce the burden on public housing agencies, by either modifying requirements or simplifying and clarifying existing regulatory language.
Interested persons are invited to submit comments regarding this proposed rule. Copies of all comments submitted are available for inspection and downloading at
1.
2.
Email
On July 29, 2016, HOTMA was signed into law (Pub. L. 114-201, 130 Stat. 782). HOTMA makes numerous changes to statutes that govern HUD programs, including section 8 of the United States Housing Act of 1937 (1937 Act) (42 U.S.C. 1437f). HUD issued a notice in the
On January 18, 2017, at 82 FR 5458, HUD published a second notice, making multiple HOTMA provisions effective and requesting comments. Several of the comments pointed out the need for technical corrections or clarifications to the January 18, 2017, implementation document. HUD published a document on July 14, 2017, at 82 FR 32461, making several technical corrections and clarifications. HUD also received comments recommending changes that were not technical corrections or clarifications, but rather suggested alternative approaches to implementing the HOTMA provisions. The January 18, 2017, FR notice, as amended by the July 14, 2017, FR notice, is referred to as the “FR Implementation Notice” throughout the preamble of this proposed rule.
In the fall of 2017, HUD published three notices (Notices PIH 2017-18, PIH 2017-20, and PIH 2017-21) that provide guidance on HCV provisions included in the FR Implementation Notice. Notice PIH 2017-18 provides guidance on the HOTMA provision related to the housing assistance payment calculation for manufactured home space rentals, while Notices PIH 2017-20 and 2017-21 cover the implemented HOTMA Housing Quality Standard (HQS) inspection and PBV provisions, respectively.
This proposed rule does a number of things. First, it proposes codification of the HOTMA provisions that have been implemented via notices published in the
The proposed rule would codify the following HOTMA provisions that have already implemented through the FR Implementation Notice. Please refer to the identified subsection for preamble discussion related to the codification of these HOTMA provisions.
Through the FR Implementation Notice, HUD also previously implemented the HOTMA provision at section 106(a)(9) that authorizes PHAs to project-base Veterans Affairs Supportive Housing (VASH) vouchers and Family Unification Program (FUP) vouchers without requiring additional HUD approval. HUD has determined that no modifications are needed to 24 CFR part 983 to codify these statutory changes. Any VASH vouchers and FUP vouchers project-based pursuant to this authority must comply with the requirements of 24 CFR part 983.
HOTMA further provides that no PHA is required to reduce the payment standard applied to a family as a result of a reduction in the fair market rent (FMR). This provision was implemented in HUD's Small Area FMR (SAFMR) Final Rule
HUD also proposes to implement the HOTMA HCV provisions that have not yet been implemented as part of this rule. Please see the identified preamble subsection for information on the proposed implementation of the following HOTMA provisions.
In addition to the HOTMA changes, HUD is also proposing numerous non-HOTMA related changes. In some cases, these changes are to better clarify existing regulatory requirements. In other circumstances, HUD is seeking to improve the administration of the program, simplify program rules, or reduce administrative burden and cost. For example, in this rule HUD is proposing to change the current requirements to reflect a determination that PBV existing housing is not subject to Davis-Bacon wage requirements (see the discussion in subsection 44 of this preamble). In addition, in certain sections, HUD is inserting references to obligations under Section 504 and the Americans with Disabilities Act, as appropriate, as a helpful tool for entities implementing HOTMA who are also covered by those laws. Such references do not constitute all Section 504 or ADA requirements, and covered entities should consult the relevant regulations to fully understand their Section 504 and ADA obligations.
Furthmermore, HUD is replacing “disabled person” to “person with disabilities,” the terms “person with disabilities” and “person with a disability” are sometimes used interchangeably in program regulations. A person with a disability is a qualified individual with a disability if the individual meets the definition of “disability” under the ADA Amendments Act, which is also the relevant definition for purposes of Section 504. See 42 U.S.C. 12102; 28 CFR 35.108.
A description and discussion of the proposed changes for each regulatory section of this proposed rule (including in certain sections specific questions soliciting input from the commenters) follows.
HUD proposes to clarify in the regulatory text that a PHA that wishes to voluntarily opt in to SAFMRs must request and receive HUD approval prior to adopting SAFMRs. This proposed change is unrelated to HOTMA.
The proposed rule would revise part 982 definitions to define the terms
The term
The proposed rule would also add the terms Section 8 Management Assessment Program (SEMAP) and
HOTMA defined
This rule would update § 982.54 by adding new Administrative Plan requirements for the tenant-based program regarding PHA policymaking authority with respect to programmatic concerns such as payment standards and inspections. These changes reflect options made available to the PHA by HOTMA and as otherwise proposed in this rulemaking. (HUD proposes to add a new § 983.10, which identifies areas in which PHAs have policymaking discretion specific to the PBV program.) The list proposed in this proposed rule is not intended to be an all-inclusive list; instead, the list would highlight the major policy areas where the PHA has some administrative discretion.
HUD proposes to correct the regulation at § 982.301(b) to reinstate the requirement that the briefing packet to the family include information regarding when the PHA is required to provide a program participant with the opportunity for an informal hearing, including how the participant may request a hearing. The September 1, 2015, technical correction to the streamlining portability rule, published at 80 FR 52619, inadvertently deleted this requirement.
In addition to this correction, HUD is proposing several changes related to the oral briefing the PHA gives the family to explain additional disability-related obligations that exist under other regulations. This includes: (1) Citing 28 CFR part 35 (Title II), Subpart E and 28 CFR part 36 (Title III) along with 24 CFR 8.6 as additional, relevant regulations that require the PHA to take appropriate steps to ensure effective communication with persons with disabilities; (2) adding that when briefing the family on when the PHA will consider granting exceptions to the subsidy standards, the PHA must discuss reasonable accommodations that may be required for a person with disabilities; (3) specifying that the oral briefing must include contact information for the Section 504 coordinator and information on how to request a reasonable accommodation or modification under Section 504, the Fair Housing Act, or the ADA, as applicable; and (4) specifyingthat if the family includes a person with disabilities, the PHA must provide not only notice that the family may request a current listing of accessible units known to the PHA that may be available but also, if necessary, other assistance in locating an available accessible unit in accordance with § 8.28(a)(3).
HUD is also proposing to add a new subsection (c) regarding information for persons with limited English proficiency. Specifically, PHAs would need to take reasonable steps to ensure meaningful access by persons with limited English proficiency in accordance with Title VI of the Civil Rights Act of 1964, Executive Order 13166, and HUD's LEP Guidance (see 72 FR 2732 (2007)).
Section 101 of HOTMA made significant changes to the unit inspection requirements for the HCV program (both tenant-based and project-based assistance). In general, a PHA may not execute a HAP contract until the PHA has inspected the unit and determined that it meets the Housing Quality Standards of the HCV program. HUD previously implemented two HQS initial inspection options provided under HOTMA in the FR Implementation Notice. The first is in the case of the non-life threatening (NLT) option, where the PHA may choose to approve an assisted tenancy, execute the HAP contract, and begin making housing assistance payments on a unit that fails the initial HQS inspection, provided the unit's failure to meet HQS is the result only of non-life-threatening conditions. The second is the alternative inspection option, where the PHA may approve the tenancy and execute the HAP contract prior to inspecting the unit if the property has in the previous 24 months passed an alternative inspection (
HOTMA also contains specific requirements for (1) the withholding of assistance payments from the owner during the HQS deficiency correction period, (2) the abatement of payments and the termination of the HAP contract for units that fail to comply with HQS, and (3) the relocation of families where the HAP contract will be terminated due to the failure to comply with HQS. Under HOTMA, the family must be given 90 days or longer to lease a new unit upon termination of the HAP contract. In addition, the family must be given a preference for public housing if the family fails to find a new unit with their voucher. The PHA may also use up to two months of the assistance payments that were withheld or abated under the family's terminated HAP contract for cost directly associated with the relocation of the family, which includes security deposits and reimbursements for moving expenses. HOTMA further provides that these new HQS enforcement and family relocation requirements must be implemented by regulation, and this proposed rule initiates the rule-making process for those provisions.
In addition to the HOTMA-related changes, as an administrative streamlining measure HUD is also proposing adding a new subsection to § 982.405 on the verification methods that may be used by the PHA to confirm an HQS deficiency has been corrected.
Specifically, HUD is proposing the following changes with respect to the HOTMA inspection requirements. (HUD has included proposed definitions of
The existing regulations at § 982.305 contain the PHA requirements that must be met to approve an assisted tenancy. This proposed rule would update § 982.305 to reflect that a HAP contract may, in certain cases, be executed prior to a dwelling unit meeting HQS when the PHA adopts either the initial HQS inspection NLT option or the initial HQS inspection alternative inspection option (discussed in detail below at
Specifically, in § 982.305(f), HUD proposes codification in the regulations of the actions the PHA must take regarding the initial inspection of the unit to approve the assisted tenancy, revised to include the applicable requirements if the PHA has implemented and determined the unit is eligible for either the initial HQS inspection options (
HUD is also proposing a non-HOTMA related change to § 982.305(c)(4). The paragraph would generally provide that if the HAP contract is executed later than 60 calendar days from the beginning of the lease term, the contract is void, and the PHA may not pay any housing assistance payment to the owner, as is currently the case under the current regulations. The proposed regulation provides that if there are extenuating circumstances that prevent or prevented the PHA from meeting the 60-day deadline, then the PHA may submit a request to HUD for an extension. HUD is proposing to allow PHAs to request this extension in recognition that there are situations where the PHA may need an extension and approving the request would be in the best interest of the family. The PHA request would have to include an explanation of the extenuating circumstances and any supporting documentation.
As discussed above in § 982.305, HOTMA provided an exception to the generally applicable requirement that units must be inspected and must meet Housing Quality Standards before the PHA may make a housing assistance payment. Under the initial inspection NLT option, PHAs may choose to approve an assisted tenancy, execute the HAP contract, and begin making housing assistance payments on a unit that fails to meet HQS, provided the unit's failure to meet HQS is the result only of non-life-threatening conditions, as such conditions are defined by HUD. For the purposes of implementing the NLT option in the FR Implementation Notice, HUD defined a non-life-threatening condition as any condition that would fail to meet the Housing Quality Standards under § 982.401 and is not a life-threatening condition, and then proposed a definition of life-threatening conditions and invited comment. Some commenters supported the definition, while others suggested expansion. For example, commenters recommended that HUD include mold or conditions that could lead to mold. HUD determined that the suggested items do not meet the threshold for inclusion in the list of life-threatening conditions and made no revisions to the proposed definition. This proposed rule would codify the existing list of life-threatening deficiencies list (cited in § 982.401(o)). In addition, HUD is proposing that the proposed definition of life-threatening deficiencies would be applicable to all PHAs. (Under the FR Implementation Notice, PHAs were only required to adopt HUD's list of life-threatening deficiencies if they implemented the NLT option.) In addition, any other condition identified by the PHA as life-threatening would also be a life-threatening deficiency, provided the condition was identified as such in the PHA administrative plan. All other conditions that would cause a failure of HQS are NLT. The list of life-threatening conditions would continue to be updated by HUD through notices published in the
HUD is also proposing to add a new subparagraph (5) to § 982.401(a) to clarify in this section that all defects that are not life-threatening conditions must be remedied within 30 days of the owner's receipt of written notice of the defects or a reasonable longer period that the PHA establishes.
Section 101 of HOTMA established certain requirements PHAs must follow when an owner fails to bring a unit into compliance with HQS. These requirements include specific time frames for compliance, after which a PHA must first withhold and then abate payments; ultimately, HOTMA provides that a PHA must terminate a HAP contract in response to continued noncompliance. HOTMA also includes certain protections for affected families and requirements related to the relocation of those families when the HAP contract is terminated. These same statutory provisions apply to both tenant-based units and project-based units. For the PBV program, the PHA may take an enforcement action on an individual unit that is part of a HAP contract (for example, removing the unit from the HAP contract), or it may terminate the HAP contract. These HOTMA provisions are set forth in section 8(o)(8)(G) of the United States Housing Act of 1937.
The law provides that these provisions shall apply “to any dwelling unit for which a housing assistance payments contract is entered into or renewed after the date of the effectiveness of the regulations implementing subparagraph (G).” For tenant-based HAP contracts, HUD is interpreting a contract that is “renewed” to mean a HAP contract that has continued beyond the end of the initial lease term. For PBV, HUD is interpreting a contract that is “renewed” to be a contract that has been extended beyond the initial term of the contract. For contracts that were not entered into or renewed after the effective date of the regulations, §§ 982.404 and 983.208 as of the date before the effective date of the final rule will remain in effect. Please see the related PBV discussion in the preamble below at § 983.208.
Specifically, § 982.404(a) would be revised to codify the HOTMA requirement that a unit is out of compliance with the Housing Quality Standards if either the PHA or an inspector authorized by the State or unit of local government (1) determines upon inspection of the unit that the unit fails to comply with HQS, (2) notifies the owner in writing of the failure, and (3) the defects are not corrected within the new statutorily mandated timeframes. These timeframes are consistent with the existing regulatory timeframes under the current regulations. If the defect is life-threatening, the owner must correct the defect within no more than 24 hours after notification. For other defects, the owner must correct the defect within no more than 30 days after notification (or any PHA-approved extension).
Under the current regulations at § 982.404(a)(4), the owner is not responsible for a breach of the HQS that is not caused by the owner and for which the family is responsible. This is not always the case under HOTMA. HOTMA provides that if a PHA determines that any damage to a unit that results in a HQS deficiency (other than damage resulting from ordinary use) was caused by the tenant, any member of the tenant's household, or any guest or other person under the tenant's control, the PHA may waive the requirement that the owner is responsible for correcting the
HUD is also proposing to add a new paragraph to § 982.404 to implement the HOTMA provisions regarding when a PHA may withhold payments and when a PHA must abate payments and terminate the HAP contract as the result of HQS deficiencies (§ 982.404(d)). If a PHA “withholds” payments, the PHA has stopped making payments to the owner but is holding the payments for potential retroactive adjustment depending on the action the owner takes. If the PHA “abates” payments, the PHA has stopped making payments to an owner and there is no potential for retroactive payment.
HOTMA provides that a PHA may choose to withhold payments once the PHA has notified the owner in writing of the deficiencies. If the PHA withholds the payments and the unit is brought into compliance during the applicable cure period (24 hours for life-threatening deficiencies and 30 days (or other reasonable period established by the PHA) for NLT deficiencies), the PHA must resume payments and provide assistance payments to cover the time period for which the assistance payment was withheld (§ 982.404(d)(1)). This is a significant change from the current requirements, where the PHA may not withhold payments from the owner during the permitted cure period.
HOTMA also provides that the PHA must abate the HAP if the owner fails to make the repairs within the applicable cure period. Furthermore, if the owner fails to make the repairs within 60 days (or a reasonable longer period established by the PHA) of the determination of noncompliance, the PHA is required to terminate the HAP contract (§ 982.404(d)(2)). The date of determination of noncompliance would be the day following the expiration of the cure period (24 hours for a life-threatening deficiency and 30 days (or other reasonable period established by the PHA) for non-life-threatening deficiencies).
Along with the new designated timeframes for abating and then terminating the HAP contract, this proposed rule would provide that in accordance with HOTMA the PHA must notify the family and the owner that the PHA is abating the payments and that if the unit does not meet HQS within 60 days after the determination of noncompliance (or a reasonable longer period established by the PHA), the PHA must terminate the HAP contract and the family will have to move if the family wishes to continue to receive assistance (§ 982.404(d)(2)(ii)). As provided in HOTMA, the rule would expressly provide that the owner may not terminate the tenancy of the family due to the withholding or abatement of the payment, and that the family may terminate the tenancy during the abatement period by notifying the owner and the PHA (§ 982.404(d)(3)).
Finally, under HOTMA, if the owner makes the repairs and the unit complies with the HQS within the required timeframe, the PHA must recommence payments to the owner. However, the PHA may not make any payments to the owner for the period of time the payments were abated. If the owner fails to make the repairs within 60 days (or the reasonable longer period established by the PHA, the PHA must terminate the HAP contract (§ 982.404(d)(4) and (5)).
The proposed rule would add a new paragraph § 982.404(e) to implement the HOTMA provisions related to the family's relocation due to HQS deficiencies. The family protections would be as follows: (1) The PHA must give the family at least 90 days following the termination of the HAP contract to lease a new unit. (2) If the family is unable to lease a unit within that period and the PHA owns or operates public housing, the PHA must offer and provide the family with a preference for the first appropriately sized public housing that become available for occupancy after the family's search time expires. (3) The PHA may choose to use up to 2 months of the withheld and abated assistance payments for costs directly associated with relocating to a new unit, including security deposits or reasonable moving costs. Use of the abated HAP for this purpose would be an eligible HAP expense under the HCV program and would be part of the HAP renewal funding eligibility calculation for the PHA.
As discussed above, HOTMA provides that new provisions under section 8(o)(8)(G) of the 1937 Act apply only to HAP contracts that are either executed or renewed after the effective date of the implementing regulation. HUD is proposing to add a new paragraph (f) on the applicability of § 982.404 in accordance with the statutory requirement. For HAP contracts not covered by these new HOTMA provision, § 982.404 as in effect the day before the Final Rule becomes effective will remain applicable.
HUD is proposing similar changes to § 983.208 to implement these same HOTMA provisions for the PBV program. Please see the related discussion at § 983.208 later in this preamble.
Section 982.405 covers the requirements for PHA initial and periodic unit inspections. As discussed previously, HOTMA provides two new alternative initial HQS inspection options for the PHA. If a PHA adopts the initial HQS inspection NLT option, the PHA may approve a tenancy after a unit has failed a housing quality inspection if the unit has failed only for non-life-threatening conditions. Allowing HAP payments to begin while the owner makes minor repairs to the unit could result in increasing the number of landlords willing to participate in the program. This proposed rule would add a new paragraph (§ 982.405(i)) to cover the initial HQS inspection non-life-threatening option. The PHA would be allowed to apply the NLT option to all of the PHA's initial inspections or may limit the use of the option to certain units. The proposed requirements under the new § 982.405(i) are consistent with the current requirements that HUD established when it implemented the initial HQS inspection NLT option in the FR Implementation Notice, including the requirement that the family may choose to decline the unit based on the identified NLT deficiencies and simply continue their housing search.
In addition to adding the new NLT option subsection, HUD is proposing non-HOTMA related changes to § 982.405, including § 982.405(g), which concerns the inspection the PHA must conduct on a unit when notified of a potential life-threatening deficiency by a family or a government official. In the
Finally, HUD is proposing to add a new paragraph (h) that would expressly provide that when a PHA must verify a correction of an HQS deficiency, the PHA may use verification methods other than another on-site inspection. This proposal builds on Notice PIH 2013-17,
Section 982.406 covers the requirements for the use of alternative inspections. This rule would add a new paragraph (e) to § 982.406 to codify the HOTMA-authorized use of alternative inspections for initial HQS inspections, in addition to the existing requirements for biennial inspections once the unit is under HAP contract. Adoption of the alternative inspection option for initial HQS inspections would enable a PHA to approve an assisted tenancy and enter into a HAP contract, provided the unit has passed an approved alternative inspection within the 24 months prior to execution of the HAP contract. The PHA may not make payments to the owner, however, until the PHA inspects the unit. The proposed § 982.406(e) for the initial HQS inspection alternative inspection option is consistent with the current requirements implemented under the FR Implementation Notice with one exception. In response to comments received, HUD is proposing to extend the amount of time available to a PHA to conduct its own inspection of the unit from 15 to 30 days from receipt of the Request for Tenancy Approval.
Please see the related discussion on the HOTMA alternative inspection requirements for PBV later in this preamble at § 983.103.
HUD is taking this opportunity to propose a non-HOTMA related change regarding the wording and organization of the current regulation at § 982.352(b)(1)(iv)(C). HUD is proposing to clarify that the PHA may compensate the independent entity from PHA administrative fees (including fees credited to the administrative fee reserve). The current regulation refers to “ongoing administrative fee income” which includes fees in the administrative fee reserve. However, this language inadvertently created confusion as to whether the undefined term “ongoing administrative fee income” included funds in the administrative fee reserve. HUD is proposing to revise the language so it specifically provides that the administrative fee reserve may be used by the PHA to compensate the independent entity.
HUD further is proposing to redesignate § 982.352(b)(1)(iv)(C) to § 982.352(b)(1)(iv)(B). This is a conforming change. Since HUD would be formally defining “independent entity” in § 982.4 of this proposed rule, HUD proposes to eliminate the current § 983.352(b)(1)(iv)(B), which explains what that term means. Please see the related discussion on the definition of independent entity in this preamble above at § 982.4.
The proposed rule would address how the PHA executes the HAP contract for a PHA-owned unit for both tenant-based units (§ 982.451(c)) and project-based units (§ 983.204(d)). As a general principle of contract law, a PHA cannot execute a HAP contract with itself (
This separate legal entity would be completely different from the independent entity that is required to perform certain administrative responsibilities on behalf of the PHA for a PHA-owned unit. The proposed rule would further clarify that the independent entity may notify either the PHA, the separate legal entity created by the PHA to serve as the owner for
HUD recognizes that creating a separate legal entity to serve as the owner for the sole purpose of executing the HAP contract may create complexity and administrative burden for the PHA, particularly in the case of a tenant-based voucher family that wishes to rent an individual PHA-owned unit. HUD is therefore proposing a new PHA option for a PHA-owned unit that is not already owned by a separate legal entity. Under this option, the PHA would not execute the HAP contract but instead sign a HUD-prescribed certification. The PHA would certify that it will fulfill all the program responsibilities required of the private owner under the HAP contract. In addition, the PHA would certify it will also fulfill all the PHA's responsibilities for the PHA-owned unit, including that the PHA has obtained the services of an independent entity to perform the required PHA functions. The PHA-executed certification would essentially serve as the equivalent of the HAP contract for the PHA-owned unit, under which the PHA is legally committed to and responsible for fulfilling its responsibilities as both the PHA and the owner of the PHA-owned unit.
The certification option would be available both for tenant-based PHA-owned units (§ 982.451(c)(3)) and project-based PHA-owned units (§ 983.204(d)). However, this option would not be available if the PHA-owned unit is owned by an entity wholly controlled by the PHA or owned by either a limited liability company or limited partnership in which the PHA (or an entity wholly controlled by the PHA) holds a controlling interest in the managing member or general partner. In that circumstance, the PHA would simply execute the HAP contract as the PHA, and the entity, limited liability company, or limited partnership executes the HAP contract as the owner. Additional changes to § 983.204 are discussed below.
HOTMA provides that no PHA is required to reduce the payment standard applied to a family as a result of a reduction in the fair market rent (FMR). This provision was implemented in HUD's Small Area FMR (SAFMR) Final Rule at § 982.503(c)(3),
This proposed rule would address the conditions and procedures that apply to the establishment of exception payment standard areas and amounts, whether or not SAFMRs are in effect in the exception payment standard area. The regulations at § 983.503 would be revised and reorganized for greater clarity. In addition, HUD is proposing to (1) establish a minimum size for an exception payment standard area, (2) increase the PHA's administrative discretion to establish higher exception payment standards without HUD approval, and (3) allow the PHA to reduce the payment standard below the basic range without HUD approval if certain conditions are met. These proposals are described in greater detail below.
HUD proposes to revise the regulations at § 983.503(a) to specify that HUD publishes FMRs for Small Area FMR areas, metropolitan areas and non-metro counties. In addition, HUD proposes to require that an exception payment standard area be no smaller than a census tract block group. A census tract block group is the smallest area of geography for which rental data is available. The current regulation does not address the size of a designated area.
Sections 982.503(b) and (c) would be revised as part of the § 982.503 restructuring. The proposed § 982.503(b) would cover the payment standard schedule that the PHA must maintain (which, in the current regulation, is covered under § 982.503(a)). The proposed § 982.503(c) would cover basic range payment standard amounts (which, in the current regulation, is covered under § 982.503(b)). The basic range payment standard amount is any amount in the range from 90 percent up to and including 110 percent of the published FMR. The PHA would be permitted, as is in current regulations, to establish a payment standard in the basic range without HUD approval. Payment standards above the basic range are exception payment standards. The requirements for payment standards that fall outside the basic range—some of which are currently covered under § 982.503(b) and (c)—would all be consolidated in § 982.503(d) of this proposed rule. The proposed changes to the requirements for exception payments standards and also payment standards that are set below the basic range are discussed below.
Section 982.503(d) would address how a PHA may establish exception payment standard amounts. In paragraph (d)(1), the regulation would clarify that the PHA may establish an exception payment standard for all units or may limit the exception payment standard to units of a given size, as is currently permitted in the HCV program. The paragraph would also clarify that the exception area must meet the minimum size requirements (no smaller than a census tract) that is proposed at § 982.503(a)(3)(ii) in this rule.
Paragraph (d)(2) would continue the current exception payment standard policy that permits a PHA that is not in a designated SAFMR area or has not opted to voluntarility inplement SAFMRs under 24 CFR 888.113(c)(3) to establish exception payment standards for a ZIP code area above the basic range of the metropolitan FMR without prior HUD approval, provided the exception payment standard does not exceed 110 percent of the HUD published SAFMR for the ZIP code area. The proposed rule clarifies that if the PHA exception area crosses one or more FMR boundaries (
Paragraph (d)(3) would address the ability of PHAs to set exception payment standard amounts for exception areas higher than 110 percent of the applicable FMR with prior HUD approval. The PHA would need to provide rental market data demonstrating that the exception payment standard amount requested is needed to enable families to access rental units in the exception payment standard area. The data submitted by the PHA would not have to be the same level as that required to request a reevaluation of the FMR established in accordance with 24 CFR part 888. Instead, the PHA would be permitted to use local sources of information to support its request.
Finally, HUD proposes consolidating all exception payment standards requirements into § 982.503(d) by moving requirements for exception payment standards that are required for a reasonable accommodation from § 982.505(d) to § 982.503(d)(4). HOTMA provides that, without HUD approval, a PHA may establish an exception payment standard of not more than 120 percent of the FMR if needed as a reasonable accommodation for a family that includes a person with a disability. A PHA may establish a payment standard greater than 120 percent of the FMR after requesting and receiving HUD approval. These flexibilities had already been implemented as part of the SAFMR Final Rule. In this proposed rule, HUD would clarify that the exception payment standard limit applies to the metropolitan area FMR or the Small Area FMR, whichever FMR is in effect in the ZIP code area in which the family resides.
HUD proposes that a PHA be permitted to establish a payment standard amount that is not lower than 90 percent of the SAFMR for a ZIP code area that is subject to metropolitan area FMRs, without HUD approval. HUD approval for a payment standard below 90 percent of the applicable SAFMR would still be required. Currently, a PHA that has not implemented SAFMRs would need HUD approval to reduce the payment standard below 90 percent of the metropolitan FMR. As is the case for exception payment standards, the HUD-published SAFMRs provide the justification that the reduced payment standard would still be reasonable for the ZIP code area based on rents in that area, and consequently HUD review and approval of a payment standard that is within the basic range of the SAFMR for the ZIP code area is not necessary.
a. Is 40 percent a reasonable “significant percentage of families,” or should the trigger be raised to a higher percentage of families (for example, the HUD review would be triggered if 50 percent of families pay more than 30 percent of AMI as the family share)?
b. If HUD were to replace 40 percent with a higher percentage of families, as described above, should HUD also establish an additional threshold that would trigger a review even though the number of families paying more than 30 percent of AMI had not reached the significant percentage? (For example, the HUD review would be triggered if 30 percent of families pay more than 40 percent of AMI, even though less than 50 percent of families are paying no more than 30 percent of AMI.)
Section 982.505(c)(3) would detail how a PHA is to address a reduction in the payment standard amount for a family that remains in their unit after the reduction. HUD is proposing changes throughout this provision to provide clarity on the obligations of and flexibilities afforded to the PHA. In addition, HUD is proposing that the family protections related to the application of decrease in the payment standard amount apply during the time the family remains assisted in the same unit, as opposed to during the term of the HAP contract. There are circumstances where the owner and the PHA may terminate the existing HAP contract and execute a new HAP contract to continue to assist the same family in the same unit. For example, tenant-based assistance may not be continued unless the PHA has approved a new tenancy in accordance with the program requirements and executed a new HAP contract with the owner if there are any changes in lease requirements governing tenant or owner responsibilities for utilities or appliances. If those circumstances occur shortly after the decrease in the payment standard, it is not fair to the family to apply the reduction in the payment standard amount at the new HAP contract effective date, since the family hasn't moved and is being continuously assisted at the same unit.
HUD is also proposing a change in the notification requirements to families when a reduction in the family's payment standard amount will result in the family paying a higher rent if they stay in their unit. Specifically, the 12-
The proposed rule would further provide that the initial reduction to the family's payment standard amount may not be applied any earlier than two years following the effective date of the decrease in the payment standard. This 2-year requirement would replace the current standard that the initial reduction may not be applied any earlier than the family's second regular examination following the effective date of the decrease in the payment standard. HUD believes that the 2-year standard will provide a consistent and more equitable protection to families than the current standard. Under the current policy, the length of the “hold harmless” protection varies significantly among individual families since it is based on when the family's regular examination is scheduled compared to when the decrease in payment standard went into effect. For example, one family might have the decrease in the payment standard applied 13 months following the effective date of the payment standard change, while another family would benefit from the protection for 23 months.
In addition to the change to a standard, consistent 2-year protection for families that remain in-place, the rule further proposes that the decrease in the payment standard could not be applied unless the family had received the required 12-month advance notice.
Section 982.505(c)(4) would address what a PHA is to do when a payment standard amount is increased during the term of a family's HAP contract. HUD proposes to require that the increased payment standard amount must be used to calculate the family's housing assistance payment no later than the earliest of the effective date of (1) an increase in the gross rent that will result in an increase in the family's share, (2) the family's first regular reexamination, or (3) one year following the effective date of the increase in the payment standard amount. The intent of this change is to eliminate the potential lag time between an increase in the rent to owner brought about by an increase in the payment standard, and the increase in the assistance payment made on behalf of the family as a result of the increase in the payment standard.
HUD is also proposing to move the requirements at § 982.505(d) for the PHA approval of a higher payment standard for a family that is necessary as a reasonable accommodation to § 982.503. This change would consolidate all the exception payment standard requirements into the same regulatory section.
HUD proposes several non-HOTMA related updates to the utility allowance regulations at § 982.517 in order to lessen administrative requirements and provide greater flexibility for PHAs in determining both area-wide schedules and site-based schedules for the PBV program. HUD is also proposing to reorganize § 982.517 for better clarity.
In § 982.517(e), HUD is proposing to revise the text to provide greater detail on additional fair housing requirements that a PHA may be subject to in determining if a higher utility allowance is needed as a reasonable accommodation under Section 504 or the ADA for a family that includes a person with disabilities.
This rule would also eliminate the requirement that a PHA submit its utility allowance schedule to the field office in order to reduce PHA reporting requirements and administrative burden. While each PHA must still maintain a utility allowance schedule and provide the schedule to HUD upon request, a PHA would no longer be required to routinely submit the schedule to the field office under this proposed rule.
HUD also proposes to allow a PHA to adopt additional options for setting its utility allowance schedule. Currently, each PHA must maintain one area-wide utility allowance schedule based on energy-conservative households.
Through this rulemaking, HUD proposes the following changes:
The proposed changes to § 982.517 would provide each PHA with the option to adopt an area-wide utility allowance schedule for energy-efficient units in addition to the traditional utility allowance schedule. The PHA would be able to use its energy-efficient utility allowance schedule only for units in projects that meet certain energy-efficiency standards. This change would allow the utility allowance schedule to reflect utility allowance amounts that more accurately reflect what the family's actual utility costs will be in cases where the family is leasing an energy efficient unit. This change is intended to expand the number of energy efficient units that are available to the family. Since the restriction on the maximum amount that the family may pay at initial occupancy of a unit is based on the gross rent (rent to owner plus the utility allowance for tenant-supplied utilities), a utility allowance that reflects the lower utility costs of the energy efficient units will allow energy efficient units with correspondingly higher rents to now be an option for the family to consider leasing on the program.
Under the proposed regulation, PHAs would have the option of substituting flat fees charged for certain utilities in the lease for the area-wide utility allowance for that utility, but only if the flat fees are lower than those in the area-wide utility allowance. Sometimes the flat fee charged by the owner reflects actual utility costs and is considerably lower than the utility allowance amounts. In effect, if the PHA uses the utility allowance rather than the actual utility costs, the gross rent would be higher. In competitive housing markets, this can make the unit exceed the maximum family share at initial occupancy even though the rent to owner and the actual utility charges do not exceed 40 percent of the family's adjusted monthly income. In other cases, the PHA could provide a smaller subsidy if the gross rent were based on the flat fee rather than the utility allowance schedule.
If a PHA adopts an area-wide energy-efficient utility allowance schedule or utility allowances based on flat fees, the policies would have to be applied consistently for all families and stated in the PHA's Administrative Plan.
Section 112 of HOTMA amended section 8(o)(12) of the 1937 Act with respect to the use of voucher assistance provided to families that are owners of manufactured housing and are paying rent on the space on which the manufactured home is located (the manufactured home space). The manufactured home space rental is a special housing type under Subpart M of the 982 HCV regulations.
Prior to the HOTMA amendment, voucher assistance payments on behalf of owners of manufactured housing under section 8(o)(12) could only be made to assist the family with the rent for the manufactured home space. Section 112 expanded this definition of the “rent” to include other housing expenses, specifically the monthly payments made by the family to amortize the cost of purchasing the manufactured home (including any required insurance and property taxes). This change in the rental subsidy calculation for families renting manufactured home spaces was implemented by the FR Implementation Notice. The practical effect of this change was to increase the amount of housing assistance payment that may be paid on the behalf of the family by taking into account family housing expenses related to the manufactured home they own beyond the space rent and tenant-paid utilities. This proposed rule would codify the new subsidy calculation by revising § 983.623. Section 112 effectuated the change in the subsidy calculation by redefining “rent” to include the family's monthly debt payments. While section 112 achieves the statutory intent to allow housing assistance payments to assist with the family's monthly debt payments for the purchase of the home as well as the space rent, characterizing the debt payments to be part of the “rent” creates confusion in the administration of this provision, since these monthly debt payments in reality are independent of the space rent, and have no relation to the normally understood concept and definition of “gross rent” (the sum of the rent to owner plus any utility allowance) that applies to other rent calculations in the HCV program. In order to simplify program administration and more clearly convey the actual intent of the statutory language, HUD is proposing in this rule to use the term “eligible housing expenses” instead of “rent” in the HAP calculation. “Eligible housing expenses” under this proposed rule includes the same expenses and results in the same amount of HAP for the family in accordance with the HOTMA amendment, but does so using terminology that better explains and distinguishes between what the subsidy calculation takes into account as opposed to what the term “rent” normally suggests for PHAs, participating families, and the owners either leasing the space or considering doing so under the HCV program.
In addition to revising the monthly housing assistance calculation, the proposed change would also remove an obsolete reference to a separate fair market rent for a manufactured home space. Since the housing assistance payment now takes the family's housing costs besides the space rent into consideration in determining the subsidy, it no longer makes sense to publish a separate “manufactured home space rent” FMR for this special housing type. Instead, the PHA uses its regular payment standard for the HCV program in the housing assistance payment calculation. This change was previously implemented by the FR Implementation Notice.
Section 112 further provided that the PHA may choose to make a single payment to the family for the entire monthly assistance amount, rather than making the assistance payment directly to the owner of the manufactured home space the family is renting. HUD has not yet implemented this option. In addition to the changes in § 982.623 for the revised subsidy calculation, HUD is proposing a new paragraph to implement this single housing assistance payment to the family option. Under this proposed rule, if the owner of the manufactured home space agrees, the PHA may make the entire housing assistance payment to the family, rather than making the payment to the owner. Because the assistance payment now covers family housing costs beyond the space rent, in many instances the PHA would be paying an assistance payment to both the owner of the space rent and the family under this special housing type. Under the single payment to the family option, the family would be responsible for paying the owner directly for the full amount of the rent of the manufactured home space. The PHA and the owner must still execute a HAP contract and the owner is still responsible for fulfilling all the owner obligations under the HAP contract.
The HOTMA provisions related to the exclusion of the family's manufactured home from the prohibition of the family having a present ownership interest in real property that is suitable for occupancy by the family, and the exclusion of the equity in the family's manufactured home from the net family assets, is being implemented through a proposed rule published September 17, 2019, at 84 FR 48820.
HUD is proposing several non-HOTMA related changes to the HCV homeownership special housing type under Subpart M. The HOTMA provisions related to the exclusion of the family's HCV homeownership unit from the prohibition of the family having a present ownership interest in real property that is suitable for occupancy by the family, and the exclusion of the equity in the family's homeownership unit from the net family assets, is being implemented through a proposed rule published September 17, 2019, at 84 FR 48820.
HUD is proposing to make a clarifying change to § 982.628(d) to reference the definition of a PHA-owned unit in the proposed § 982.4.
The regulation currently allows a PHA to use a housing counseling agency that is not approved by HUD if the PHA ensures that the counseling program of such agency is consistent with the homeownership counseling provided under HUD's Housing Counseling program. HUD is proposing to revise the homeownership regulation to conform with current Housing Counseling requirements, which require any homeownership counseling to be conducted by a HUD-certified housing counselor working for a HUD-approved housing counseling agency. HUD believes that the homeownership counseling is a critical component for the success of the HCV homeownership program and believes this proposed change will help ensure that the counselor and the counseling meet acceptable standards.
Currently, the utility allowance amount for a homeownership family is based on the lower of the size of the home purchased or the family unit size per PHA subsidy standards. The proposed rule would require that the utility allowance for a homeownership family always be based on the size of the home purchased. This will minimize the possibility of default when the family composition changes in the home because the amount of the
The proposed rule also proposes to restructure the payment standard provisions and clarify that the payment standard amount used to calculate the family's homeownership assistance cannot be lower than what the payment standard was at the start of homeownership assistance. This is the current requirement, but HUD is proposing to refine the wording of the regulation so that the requirement is more easily understood.
Other technical fixes. HUD has taken this opportunity to clarify that § 982.201(e) does not apply to the PBV program. Section 982.201(e) provides that the PHA must receive information verifying that an applicant is eligible within the period of 60 days before the PHA issues a voucher to the applicant. However, voucher issuance is one of the HCV provisions that does not apply to the PBV program. HUD has also revised § 983.251(a)(2) to clarify that the PHA determines eligibility for admission of an applicant family (other than a voucher participant determined eligible at original admission to the voucher program) within 60 days before commencement of PBV assistance.
For administrative ease and convenience, the proposed rule would revise the PBV definitions section to include those part 982 terms that are also used in part 983. In limited cases, where there is a slight PBV distinction to the part 982 term, an annotation would be made in this section.
In addition to adding the applicable terms that are defined in part 982, the following terms would be added:
The following previously defined terms would be revised to conform to the HOTMA changes:
HOTMA establishes exceptions to the percentage limitation and income-mixing requirement for projects located in areas where vouchers are “difficult to use.” HUD requested comments on this provision on the January 18, 2017, notice, though it did not implement the provision at that time. Commenters offered a variety of suggestions for how HUD might define areas where vouchers are “difficult to use” such as: Rental vacancy rates; voucher lease-up success rates; areas with rapid rent appreciation; areas undergoing revitalization; and high-cost areas. Ultimately, HUD would adopt the following definition in this proposed rule: (1) A ZIP code area where the rental vacancy rate is less than 4 percent; or (2) A ZIP code area where 90 percent of the Small Area FMR is more than 110 percent of the metropolitan FMR. HUD took into consideration the ideas submitted but determined that many of them would be administratively burdensome to determine and/or monitor and, in some cases, not determinable for a specific area of a PHA's jurisdiction. Instead, HUD is proposing two factors that are easily identifiable and consistent data points.
With respect to the definition of existing housing, HUD is concerned that the current definition is overly broad. The current definition of “existing housing” is housing that exists on the proposal selection date and “substantially complies” with HQS on that date. By further defining what is meant by “substantially complies,” HUD intends to provide greater clarity to PHAs and prospective owners regarding whether a property may be selected as “existing housing” or must undergo rehabilitation prior to being placed under a HAP contract. This distinction becomes even more critical as this proposed rule is also implementing the HOTMA provision that eliminates the environmental review requirement for PBV existing housing in certain circumstances.
On June 25, 2014, at 79 FR 36145, HUD published a final rule making conforming changes to regulations as a result of the Housing and Economic Recovery Act of 2008 (HERA), entitled, “Changes to the Section 8 Tenant-Based Voucher and Section 8 Project-Based Voucher Programs” (HERA Final Rule). In that rule, HUD left the current definition of “existing housing” in place, while the preamble explained that HUD would continue to determine if changes were appropriate:
HUD will further consider what may be the best metric for determining compliance with HQS; that is, whether HUD should measure the amount of time that must pass from the date of selection to date of compliance or identify an appropriate dollar standard of the total amount of work that must be performed, or determine some other mechanism. HUD will resubmit for public comment any proposed changes to the definition of existing housing.
HUD is using this proposed rule to propose changes to the definition of existing housing as provided in the HERA Final Rule preamble. Under this proposed rule, the definition of existing housing would be revised to define “substantially complying” with HQS as a unit that has HQS deficiencies that require only minor repairs to correct (repairs that could reasonably be
The distinction between PBV existing housing and PBV rehabilitation under the proposed rule is, at its essence, based on whether the units in their “as-is” condition either meet or can meet (with minimal repairs and little or no delay in HAP contract execution) the Housing Quality Standards, which would allow the PHA to promptly execute the PBV HAP contract with the owner. If the repairs are extensive in nature, or if the number of units that require repairs is so large that the HAP contract execution cannot occur within a relatively short amount of time, then the appropriate type of PBV for the project is rehabilitation.
HUD believes that this standard, which is based on the time the HQS repairs could reasonably be expected to take as the measure of substantial compliance and how promptly the project would be able to be placed under HAP contract, has advantages over the use of a dollar threshold because of the variation of repair costs across the country and because a cost measure would need to be adjusted periodically to reflect cost increases. It would also provide a common-sense standard—for a project to qualify as existing housing for PBV assistance, any repairs needed to bring the units into HQS compliance would have to be relatively minor in nature and easily completed. Any project requiring more extensive and time-consuming repairs would not qualify as existing housing and instead would be subject to the PBV rehabilitation requirements.
The current definition provides that the existing units must fully comply with the HQS before execution of the HAP contract. Since that requirement will not apply if the PHA is using either the alternative inspection or NLT option in fulfilling the initial HQS inspection requirements for the PBV existing housing project, HUD is proposing to revise the definition to state that the units must meet the pre-HAP inspection requirements, as opposed to HQS, prior to HAP execution.
The proposed rule would make changes to the description of labor standards to conform to the changes made elsewhere in the rule regarding the applicability of Davis-Bacon wage rates to the PBV program. Please see the detailed preamble discussion concerning the proposed Davis Bacon change in § 983.210, below.
The proposed rule would revise § 983.5(a)(3) to conform it to changes made elsewhere in the rule that newly constructed or rehabilitated housing may be developed with or without an Agreement. Please see the below preamble discussion on the proposed change to implement the HOTMA provision that PBV housing may be developed without an Agreement if certain requirements are met at § 983.155.
The rule would also make another conforming change to § 983.5(d) to reference the new section on PBV provisions in the Administrative Plan that is proposed at § 983.10 and discussed later in this preamble. Finally, HUD is also proposing to revise this section to clarify that PBV assistance may be attached to both single-family and multifamily buildings, and that HCV administrative fee funding made available to the PHA is used for both the administration of tenant-based and project-based assistance.
HUD implemented the HOTMA PBV program limit provisions through the FR Implementation Notice. HUD is proposing to substantially revise § 983.6 to codify the new HOTMA requirements in the 24 CFR part 983 program regulations.
HOTMA changed the methodology used to calculate the PBV program limit from a budget authority percentage to a unit count, meaning that a PHA may project-base up to 20 percent of its authorized voucher units. This proposed rule updates § 983.6(a) to reflect that change. Notwithstanding the change in the program limit methodology, PHAs would still be responsible for determining that they have sufficient funding available to support the vouchers they are planning to place under a PBV HAP contract.
HOTMA also authorizes a PHA to project-base an additional 10 percent of its authorized voucher units, but only for units that serve the homeless, veterans, provide supportive housing to persons with disabilities or elderly persons, or are located in areas where vouchers are difficult to use. HOTMA also authorizes a PHA to project-base an additional 10 percent of its authorized voucher units, but only for units that serve the homeless, veterans, provide supportive housing to persons with disabilities or elderly persons, or are located in areas where vouchers are difficult to use. Under this proposed rule, solely for purposes of applying the additional 10 percent veterans exception to the PBV program cap, the term “veteran” means a person who served in the active military, naval, or air service, and who was discharged or released therefrom under conditions other than dishonorable, which is the definition of veteran defined by 38 U.S.C. 101. For purposes of determining this statutory cap exception, the term veteran needs to have a standard definition that is applied consistently by PHAs across the program. This definition does not preclude a PHA from applying the term “veteran” differently for other purposes of program administration. For example, the PHA could choose to apply a
These additional units are covered by proposed changes in § 983.6(d). In addition, HUD would add a proposed definition of “areas where vouchers are difficult to use” to § 983.3, which is discussed in detail in section 13 of the section-by-section summary.
Commenters on the FR Implementation Notice suggested that other categories of units (
Commenters also stated that limiting the exception to contracts that were first executed on or after April 18, 2017, as provided in the FR Implementation Notice, penalizes PHAs who have already made efforts to serve the populations favored with the exception. HUD lacks the statutory authority to apply the exception retroactively to units that were under contract prior to April 18, 2017. After further considering these comments, however, HUD proposes to allow units that are added to an existing contract under § 983.207(b) and are eligible for the exception to qualify for the exception, even if the existing contract itself was executed prior to April 18, 2017.
HOTMA excludes certain categories of units from this program limitation entirely (these are referred to in the proposed regulation as units excepted from the program cap and project cap). Please see the discussion concerning these units later in this preamble under § 983.59.
Lastly, under the current regulation at § 983.6(d), a PHA must submit information to HUD prior to issuing a request for proposals or otherwise selecting a project for an award of PBVs. The intent of the requirement is to assure that PHAs determine whether any new selection will push them above the statutory cap on project-basing. Taken as a whole, HOTMA significantly complicates this calculation through the number of different ways a cap may be expanded, or may not apply to a unit. In this proposed rule, HUD would eliminate the requirement at § 983.6(d) and establish a new § 983.58 that would state all the scenarios under which a PHA must perform calculations prior to project-basing additional units of assistance.
The proposed rule would redesignate the current § 983.10, Project-based certificate (PBC) program, as § 983.11 and add a new § 983.10 to contain Administrative Plan requirements unique to the PBV program. It would define areas in which the PHA has discretion to establish policies with respect to such things as the PHA's standard for deconcentrating poverty and expanding housing and economic opportunity, waiting list management, and whether the PHA will retain the use of an Agreement for new construction/rehabilitation. The list provided in the rule is not intended to be an all-inclusive list; instead, the list highlights the major policy areas where the PHA has some discretion.
HUD is proposing to redesignate § 983.10, Project-based certificate (PBC) program, to § 983.11. There are no proposed changes to the text.
HUD is proposing to add a new section as part of an effort to better organize and clarify the subsidy layering requirements for the PBV program. Currently, the subsidy layering requirements are found in § 983.55, which is found in Subpart B, Selection of PBV Owner Proposals. The prohibition of excess public assistance applies only to newly constructed and rehabilitated housing after the project is selected and placed under HAP. In order to better clarify the current requirements and to consolidate information related to development requirements, HUD is proposing to add a new § 983.12 that speaks generally to the prohibition of excess public assistance for PBV new construction and rehabilitated housing. The new section would refer readers to § 983.153(b) for the requirements related to placing new construction and rehabilitated housing under HAP contract. In addition, this new section would include language (currently found in the PBV HAP contract for new construction and rehabilitated housing) that the owner must disclose information to the PHA regarding any additional related public assistance that is made available with respect to the contract units during the term of the PBV new construction and rehabilitation HAP contract. In those instances, a new subsidy layering review would be required to determine if the additional assistance would result in excess public assistance in the project. The PHA must adjust the housing assistance payments to the owner if the additional public assistance results in excess public assistance to the project.
As is currently the case and in accordance with section 8(o)(13)(M)(i) of the 1937 Act, under this proposed rule the subsidy layering requirements never apply when a PHA is attaching PBV assistance to existing housing, either prior to HAP contract execution or during the term of the contract.
HOTMA authorizes a PHA that is engaged in an initiative to improve, develop, or replace a public housing property or site to attach PBV assistance to an existing, newly constructed, or rehabilitated structure in which the PHA has an ownership interest or over which the agency has control without following a competitive process, as long as the PHA has notified the public of its intent to do so through its PHA Plan. While the PHA must have ownership interest in or control over the project to attach PBV assistance to it without following a competitive process, it is important to emphasize that having “ownership interest” in the project does not mean that the unit must meet the definition of PHA-owned unit. An ownership interest means that the PBV PHA or its officers, employees, or agents are in an entity that holds any direct or indirect interest in the project in which the units are located, including but not limited to an interest as: Titleholder, lessee, stockholder, member, or general or limited partner; or member of a limited liability corporation. A PHA ownership interest also includes cases where the PBV PHA is the lessor of the ground lease for the land upon which the PBV project is located. With this proposed rule, HUD proposes to codify this HOTMA provision in the 24 CFR part 983 regulations, which was previously implemented in the FR Implementation Notice. In § 983.51(c) under the proposed rule, the PHA may select a project in their public housing inventory, or a project that may have been removed from the public housing inventory through any available legal removal tool within 5 years of the proposal selection date. In accordance with § 983.54, Prohibition of assistance for units in subsidized housing (redesignated as § 983.53 in this
HUD is also proposing to eliminate the $25,000 per unit cost requirement for rehabilitation and new construction that was part of the initial implementation requirements for this HOTMA provision in the FR Implementation Notice by not proposing it in this rule. The purpose of the cost test was to ensure that the PHA was truly engaged in an initiative to improve the public housing project or site and not simply avoiding following the competitive selection process by undertaking minor repairs at the project. However, by its very nature, a PBV new construction project is replacing the public housing project, which fulfills the HOTMA requirement that the PHA is engaged in an initiative to improve, develop, or replace the public housing project or site. Likewise, if the project will be assisted through PBV for rehabilitated housing, the rehabilitation that is undertaken in order to attach the PBV assistance to the project constitutes an initiative to improve the project.
In addition, HUD is also proposing, at § 983.51(c)(2), to allow a PHA that is engaged in an initiative to improve, develop, or replace a public housing property or site to attach PBV assistance to an existing, newly constructed, or rehabilitated structure without following a competitive process in cases where the PHA has no ownership interest or control over the site but where the PHA is administering the PBV assistance because the public housing project in question is owned by another PHA that does not administer the HCV program. The public housing project must either still be in the public housing inventory or removed from the public housing inventory through any available legal removal tool within 5 years of the proposal selection date. In addition, the PBV assistance must have been specifically identified as the replacement housing for the impacted public housing residents as part of the public housing demolition/disposition application, voluntary conversion application, or any other application process submitted to and approved by HUD to remove the public housing project from the public housing inventory. HUD believes under these limited circumstances the administering PHA should be able to attach the PBV assistance to the public housing project without following a competitive process since the conversion of the project to PBV assistance was part of the overall plan approved by HUD to reposition the project and preserve it as affordable housing for the public housing residents and the community.
HUD is proposing several non-HOTMA related clarifications to this section. HUD would add a reference to the required PHA inspections that must occur prior to the proposal selection that are covered elsewhere in the regulation since those requirements are a key component of the proposal selection process (§ 983.51(e)). HUD is also proposing to define the proposal selection date (§ 983.51(g)). For projects selected through a request for proposals or based on a previous competition, the proposal selection date would be the date on which the PHA provides written notice to the party that submitted the selected proposal. For former public housing projects selected without a competitive process, the date of proposal selection would be the date of the PHA's board resolution approving the project-basing of assistance at the specific project. This change is intended to ensure that the date of selection is consistently applied in relation to a project's eligibility for selection based on a previous competition or without regard to a competitive process. Finally, the proposed rule would add a new paragraph (k), which serves as a reminder that a PHA may not commit project-based assistance to a project if the owner or any principal or interested party is debarred, suspended, subject to a limited denial of participation, or otherwise excluded under 2 CFR part 2424 or is listed on the U.S. General Services Administration list of parties excluded from Federal procurement programs.
HUD would redesignate § 983.53, Prohibition of assistance for ineligible units, as § 983.52. HUD is proposing to delete the current § 983.52, Housing Type, cover the definition of existing housing in § 983.4, and incorporate the provisions currently found at § 983.52(a)(1) and (2) into the newly designated § 983.52(d). HUD would also revise § 983.52(d) in this proposed rule to conform with the proposed implementation of the PHA option to undertake PBV development without an Agreement under § 983.155 that is discussed later in this preamble.
HUD would redesignate § 983.54, Prohibition of assistance for units in subsidized housing, as § 983.53. There are no proposed changes to the current text.
HOTMA made significant changes to the PBV project cap (also known as the income-mixing requirement) that determines how many units in a particular project may be PBV assisted. These HOTMA changes were implemented by the FR Implementation Notice. HUD is proposing to modify the PBV regulation (most notably at §§ 983.54 and 983.262) to conform to all of these statutory changes as implemented in the FR notice.
In this proposed rule, HUD would redesignate § 983.56, Cap on number of PBV units in each project, as § 983.54 and revise § 983.54 to codify the following HOTMA requirements:
Under HOTMA, the project cap is whichever number is greater: 25 units or 25 percent of units (assisted or unassisted) in the project. This means that a project with 25 or fewer units may be fully assisted with project-based vouchers, provided all other PBV requirements are met.
HOTMA also makes changes to the exceptions to the project cap. Prior to HOTMA, dwelling units specifically made available to elderly families, disabled families, and families receiving supportive services were excepted from the project cap. HOTMA retains the exception for elderly families, modifies the exception for families receiving supportive services so that families must simply be “eligible for” supportive services, and eliminates the exception for disabled families, while grandfathering in the exception for projects that were under a PBV HAP contract prior to April 18, 2017. HOTMA also excluded certain categories of units from the project cap entirely (these are referred to in the proposed regulation as units excepted from the program cap and project cap and discussed at § 983.59 below). HOTMA also allowed a higher (40 percent) project cap in two scenarios:
Public comments in response to the January 18, 2017, notice were mostly in the context of the supportive services exception. Several commenters stated that failure to complete a Family Self-Sufficiency (FSS) contract should not result in termination and eviction of the family. HUD addressed this comment in the July 14, 2017, technical corrections notice, explaining that current FSS requirements do not allow termination from the housing assistance program for failure to complete the FSS contract of participation. Accordingly, in this rule HUD also proposes to remove the provision at § 983.257(b), which permitted lease termination by the owner where a family failed to complete its FSS contract without good cause. As is the case under the FR Implementation Notice, the proposed rule would also clarify that a PHA that administers an FSS program may use FSS as part of its supportive services package in meeting the project cap supportive services exception. However, the PHA may not rely solely on FSS in meeting the exception. A PHA could, however, make the supportive services used in connection with the FSS program available to non-FSS PBV families at the project.
Other commenters proposed that HUD should not require supportive services to be made available to all families in a project, but that the services should be made available just to those units designated as supportive housing units. HUD is unable to implement such a change through regulation because it would be in conflict with the current statutory language.
The proposed rule would also clarify, as stated in the January 18, 2017, notice, that HAP contracts in effect prior to April 18, 2017, remain obligated by the terms of those HAP contracts with respect to the requirements that apply to the number and type of excepted units in a project, unless the owner and the PHA mutually agree to change those requirements. HUD has also taken this opportunity to propose to specify that the PHA has discretion to determine whether to except units and the number of units to be excepted (see § 983.54(d)). The proposed rule would remove the reference to combining exception categories in a project. This is because while a PHA may offer both the elderly and the supportive services exception categories at a project, the supportive services exception requires that the supportive services be available to all PBV-assisted families at the project, making such combination provision irrelevant.
The proposed rule would revise § 983.262, When occupancy may exceed the project cap, to codify the HOTMA changes regarding the project cap. Because these changes are so closely related to the proposed revisions to § 983.54, they are described in detail both here and later in the preamble discussion at § 983.262. In § 983.262(b), the proposed rule would clarify that while a PHA may establish criteria for occupancy of particular units in ensuring that excepted units are occupied by a family who qualifies for the exception, families who will occupy excepted units must be selected through an admissions preference. Section 983.262(c) would set forth the requirements for the supportive services exception to apply. The unit would be excepted if any member of the family is eligible for one or more of the supportive services, even if the family chooses not to participate in the services. Also, if any member of the family successfully completes the supportive services, the unit would continue to be excepted for as long as any member of the family resides in the unit. The unit would only lose its excepted status if no member of the family successfully completed the supportive services and the entire family becomes ineligible during the tenancy for all supportive services that are made available to the residents of the project.
The proposed § 983.262(c) would provide that a family may not be terminated from the program or evicted from the unit when the unit loses its excepted status. Under this proposed rule, the § 983.262(d) (formerly (e)) requirements concerning wrong-sized units would be revised to remove the reference to disabled family members since, under HOTMA, there is no longer an exception to the income mixing requirement for disabled families. The current regulatory provisions continue to apply under the proposed rule to excepted elderly units in cases where the elderly family member no longer resides in the unit but the PHA allows the remaining family members to remain in the unit. The proposed regulation (in § 983.262(f)) also addresses the options available to the PHA when an excepted unit loses its excepted status.
HUD would redesignate § 983.57, Site selection standards, as § 983.55. There are no changes to the regulatory text.
HUD would redesignate § 983.58, Environmental review, as § 983.56. HUD is proposing to revise the environmental review requirements for existing housing in accordance with section 106(a)(8) of HOTMA. Section 106(a)(8) of HOTMA amended section 8(o)(13)(M)(ii) of the 1937 Act, which addresses environmental reviews for existing PBV projects. The provision in the 1937 Act was originally added by section 2835 of the Housing and Economic Recovery Act (HERA),
A public housing agency shall not be required to undertake any environmental review before entering into a housing assistance payments contract under this paragraph for an existing structure, except to the extent such a review is otherwise required by law or regulation.
However, as HUD explained in the November 24, 2008,
HOTMA addressed the second of these two problems, by requiring reviews when the review is required by law or regulation “relating to funding other than housing assistance payments.”
In endeavoring to give full effect to the words of section 8(o)(13)(M)(ii) of the 1937 Act, HUD is also cognizant that the statute provides only a partial exemption to environmental reviews. Specifically, the applicability of the provision would be limited to “existing projects.” Environmental reviews would continue to be applicable to PBV rehabilitation and new construction projects. The limited scope of the proposed exemption from environmental reviews reflects Congress's continuing emphasis on the importance of Federal assistance being used in an environmentally sound manner. For example, statutory provisions authorizing HUD to waive, or establish alternate, statutory requirements explicitly exclude environmental, labor, and fair housing statutory requirements.
Another generally accepted principle of statutory construction is that the words of statutory provisions should be read so as to avoid results inconsistent with expressed congressional intent.
HUD would redesignate § 983.59, PHA-owned units, as § 983.57. The redesignated § 983.57 governs the selection of PHA-owned units and the role of independent entities in operating such units in the PBV program. Most of the changes in this section are intended to improve readability. However, § 983.57(b)(1) would specify that, in addition to determining the rent to the owner, the independent entity must determine OCAF adjustments. This is a new responsibility for the independent entity, resulting from the HOTMA provision that allows for rent adjustments under the PBV program using an OCAF established by the Secretary and published in the
Additionally, in § 983.57(b)(4), HUD is proposing that, when PHAs carry out development or rehabilitation of PBV PHA-owned units, the PHA must submit evidence to the independent entity that the work has met applicable requirements. HUD believes the determination that the development or rehabilitation of the PHA-owned PBV project has met the applicable requirements should be added to the responsibilities of the independent entity. The PHA, as the owner of the PBV project, has a conflict in making that PHA determination for the HAP contract to be executed.
Under the current regulation at § 983.6(d), a PHA must submit information to HUD prior to issuing a request for proposals or otherwise selecting a project for an award of PBVs. The intent of the requirement is to assure that PHAs determine whether any new selection will push them above the statutory cap on project-basing. Taken as a whole, HOTMA significantly complicates this calculation through the number of different ways a cap may be expanded or may not apply to a unit. In this proposed rule, HUD would eliminate the requirement at § 983.6(d) and establish a new § 983.58 that states all the scenarios under which a PHA must perform calculations prior to project-basing additional units of assistance. Under the proposed § 983.58, the PHA would determine, in accordance with the program limit requirements at § 983.6, if it is able to project-base additional vouchers before it issues a request for proposals or makes a selection based on a previous competition, attaches assistance without competition in accordance with the proposed requirements of § 983.51(c) of this rule, or when it amends a current HAP contract to add units in accordance with § 983.207(b).
HOTMA excepts certain types of units from both the program cap and the project cap. These are units that were previously subject to certain federal rent restrictions or that were receiving another type of long-term housing subsidy provided by HUD. HUD implemented the exception for these units as part of the FR Implementation Notice. Because the lists for both exceptions are the same, HUD proposes to establish a new § 983.59, which would list the types of units that are covered by the exceptions in §§ 983.6 (program cap) and 983.54 (project cap). Also, in response to comments received on the January 18, 2017, notice, HUD has included two additional types of units in the list of units “previously subject to federally required rent restrictions” that were not included in the list of excepted units implemented under the FR Implementation Notice: (1) Units financed with Low-Income Housing Tax Credits (26 U.S.C. 42) and (2) units subsidized with Section 515 Rural Rental Housing Loans (42 U.S.C. 1485). In addition to listing the covered units, the proposed rule would codify the existing FR Implementation Notice requirement that the unit must have received one of the covered forms of HUD assistance or been subject to one of the covered federally required rent restrictions in the 5 years prior to the date of the request for proposals or the date of selection (without competition or a selection based on a prior competition).
As was provided under the FR Implementation Notice, HUD is also proposing to exclude HUD-VASH vouchers specifically designated by HUD for project-based assistance from the PBV program limits and project caps. The proposed rule would also clarify that PBV units under the Rental Assistance Demonstration (RAD) are not subject to the program limitation or project caps.
Finally, the proposed rule would address the issue of when newly constructed units developed under the PBV program may be excluded from the program limitation and project cap because they are replacing units that meet the criteria of excepted units because the units were formerly subject to federal rent restrictions or were receiving HUD assistance. As is the case under the FR Implementation Notice, the newly constructed unit would have to be located on the same site as the unit it is replacing; however, expansion or modification to the prior project's site boundaries is acceptable under certain conditions. In addition, the primary purpose of the newly constructed units would be required to replace the previous federally assisted or rent-restricted eligible units. The PHA would be able to demonstrate compliance with this requirement by giving former residents of the original project a selection preference that provides the residents with the right of first occupancy at the PBV new construction project, or, prior to the demolition of the original project, identifying the PBV new construction project as replacement housing as part of a documented plan for the redevelopment of the site.
While HOTMA significantly expands the potential number of vouchers that may be project-based through this broad exception policy, PHAs considering increasing their use of project-basing are cautioned that all other PBV requirements apply to these formerly federally assisted or rent-restricted excepted units, including that a family occupying the PBV unit still has the right to move with tenant-based assistance after 12 months of occupancy. Section 8(o)(13)(E) of the 1937 Act (42 U.S.C. 1437f) provides that a PHA must provide HCV tenant-based assistance or comparable tenant-based assistance to a family that seeks to exercise this right. If such assistance is not immediately available, then the PHA must provide the family with priority to receive the next voucher (or other tenant-based assistance) that becomes available. PHAs with large percentages of PBV units as a result of these exceptions may find it increasingly challenging to reach families on the tenant-based waiting list, as families moving under the statutory mobility requirements of the PBV program have priority over waiting list families for the next available voucher.
HUD is proposing to make a conforming change to § 983.101(e) as part of the changes to implement the HOTMA provision that permits the PHA to enter into a PBV HAP contract with an owner that is under construction or recently has been constructed whether or not the PHA and owner sign an Agreement (see preamble discussion below at § 983.155). This change would remove the requirement that any additional requirements for quality, architecture, or design of PBV housing establish by the PHA must be specified in the Agreement (since there is no Agreement if the PHA opts not to require the Agreement).
As discussed previously in this preamble, HOTMA made significant changes to the inspection requirements for both HCV tenant-based and project-based assistance. Please see the description of all the HOTMA section 101 changes to the unit inspection requirements in § 982.305. HUD is proposing to change § 983.103 to codify the PBV-related inspection requirements previously implemented under the FR Implementation Notice, as well as proposing new requirements to implement the HOTMA HQS enforcement and family relocation provisions that were not covered by the notice.
This proposed rule would revise § 983.103 to codify the initial inspection options (NLT and alternative inspections) that were implemented under the FR Implementation Notice. However, HUD proposes in this rule to limit the use of the NLT and alternative inspection options to existing housing. Regarding the NLT deficiencies initial inspection option, HUD's view is that the provision of PBV assistance for new construction or rehabilitation is intended to increase the supply of affordable housing that is decent, safe, and sanitary. HUD's expectation, therefore, is that newly constructed or rehabilitated units will fully meet Housing Quality Standards (
With respect to the use of an alternative inspection option for the initial HQS inspection, HUD cannot identify a scenario under which a PHA could realistically rely on an alternative inspection completed prior to the rehabilitation. The unit, by virtue of the rehabilitation, is no longer in the same condition as it was at the time of the alternative inspection. Furthermore, if the rehabilitation was done improperly, then the unit may have unsafe conditions that did not exist at the time of the alternate inspection. As for newly constructed units, the alternative inspection provision does not appear to be a viable option, because, prior to construction, the units did not exist.
Similar to the proposed change for HCV tenant-based assistance in § 982.406, HUD is proposing to change the time frame by which the PHA must conduct its own inspection of the unit for existing PBV housing under the initial HQS inspection alternative inspection. For both tenant-based and project-based units under this proposed rule, the PHA would be required to conduct HQS inspections on all the assisted units within 30 days of the project selection date, as opposed to the 15-day standard established under the FR Implementation Notice.
HUD also proposes clarifying changes to § 983.103 to expressly provide the timeframes within which the PHA must conduct an inspection when notified of a potential life-threatening or non-life-threatening deficiency in a PBV unit. If the family or a government official notifies the PHA of a potentially life-threatening deficiency, the PHA would have to inspect the unit within 24 hours and notify the owner if the life-threatening deficiency is confirmed. If the reported condition is non-life-threatening, the PHA would have to inspect the unit, and provide the owner notification if the deficiency is confirmed, within 15 days. The rule further proposes that the owner may provide photographic evidence or other reliable evidence to the PHA in order for the PHA to verify that a defect has been corrected.
In addition to codifying the HOTMA initial inspection options for PBV, § 982.103 would be revised for clarity regarding the inspection of units prior to proposal selection (§ 983.103(a)) and HAP contract execution (§ 983.103(b)). These clarifying changes would also include revising the text to incorporate the proposed new definition for PBV existing housing, which is discussed in subsection 13 of the section-by-section summary.
The current regulation requires the independent entity to provide a copy of the inspection report for a PHA-owned PBV unit to the PHA and to the HUD field office. To reduce administrative burden, HUD proposes to remove the requirement that the report be provided to the HUD field office, instead proposing to require that the independent entity or PHA must provide the report to the field office upon request.
HUD is proposing to substantially restructure Subpart D (§§ 983.151 through 983.157). HUD solicits comment on the reorganization of this subpart, which is intended to provide clarity regarding the applicability of development requirements. Section 983.151 would be revised to better express Subpart D's purpose, which is to set forth the requirements related to development activity under the PBV program, including those requirements related to development activities undertaken on units that are under HAP contract (discussed below at § 983.157).
A new § 983.152 would explain which sections and requirements of Subpart D are applicable to an owner undertaking development activity for the purpose of either placing a project under a HAP contract (newly constructed and rehabilitated housing) or, in the case of a partially assisted project (
In this rule HUD is proposing to re-designate § 983.154, Conduct of Development Work, as § 983.153, and re-title the section “Development Requirements.” HUD believes that consolidating the development requirements in one section of the regulations will provide greater clarity and ease of understanding to PHAs and owners.
The development requirements described in this section would include subsidy layering reviews (see the related discussion at § 983.12), labor standards (please see the discussion regarding Davis-Bacon requirements in this preamble at § 983.210), equal opportunity (section 3 of the Housing and Urban Development Act of 1968 (12 U.S.C. 1701u), and the implementing regulations at 24 CFR part 135), equal employment opportunity, accessibility, broadband eligibility, and eligibility to participate in federal programs and activities. These requirements are the same requirements that are currently applicable to development activities carried out for newly constructed and rehabilitated housing.
This section would cover the existing requirements for the Agreement in terms of the timing of the execution of the Agreement and the required contents, which are found in the current regulations at § 983.152, and implement a new HOTMA provision under which the PHA may choose not to execute an Agreement. HOTMA creates new discretionary authority for a PHA to enter into a PBV HAP contract with an owner for housing that is under construction or recently has been constructed whether or not the PHA and owner sign an Agreement to Enter into a HAP contract (Agreement). The law provides that, even when an Agreement is not used, an owner must be able to demonstrate “compliance with applicable requirements prior to execution of the housing assistance payments contract.” HUD interprets this language to mean that a PHA must affirm, for any work done after proposal submission and prior to proposal selection, that the owner has complied with all such requirements. Once the PHA has affirmed that any work done from the point of proposal submission complies with all such requirements, the two parties may enter into an Agreement—or not. Under either scenario, all work completed from the point of proposal submission forward would have to be developed and completed in compliance with the applicable requirements.
HUD is proposing to revise the section, Completion of Work, to conform to the change that the PHA may enter into the PBV HAP contract without first entering into an Agreement. In addition, HUD is proposing that the PHA shall determine the form and manner by which the owner must submit evidence and certify to the PHA that the development activity was completed and all such work was completed in accordance with the applicable requirements, rather than regulation specifying those requirements.
HUD is proposing to revise this section to conform to the change that the PHA may enter into the PBV HAP contract without first entering into an Agreement.
HUD is proposing to add a new section to cover development requirements should the owner undertake development activity on units under HAP contract. HUD recognizes that, given that PBV HAP contracts may be in effect for twenty years or longer, owners may need over the course of the contract to undertake work that meets the definition of development activity. In addition, standards need to be established to prevent the circumvention of development requirements where units are placed under a HAP contract as existing housing even though the owner intends to undertake significant development activity on the assisted units shortly thereafter.
HUD proposes to permit development activity on units currently under HAP contract if the owner is approved to do so by the PHA. However, except in extraordinary circumstances (such as repairs necessitated due to a fire or natural disaster), this would normally occur within the first five years from the effective date of the HAP contract. The owner's request would have to include a description of the proposed development activity and the length of time, if any, that it is anticipated that some or all the assisted units will not meet HQS as a result of the development activity. The owner's request would be required to include a description of how the families will be rehoused during the period that their unit does not comply with Housing Quality Standards because of the development activity. Housing assistance payments would not be made during the time the units are not in compliance with the Housing Quality Standards during the development activity.
The proposed rule would provide that the development requirements for equal employment opportunity, accessibility standards, and broadband infrastructure apply, as applicable. The other development requirements under § 983.153, the Development agreement requirements at § 983.154, and the PHA acceptance of unit requirements at § 983.156 would not apply.
HUD is proposing to revise § 983.203, HAP contract information, so that the current reference to units that exceed the normally applicable project cap in paragraph (h) accurately reflect the new HOTMA exceptions. Unrelated to HOTMA, the section has proposed revisions to expressly state the features described in the HAP contract provided to comply with program accessibility requirements include those related to the Fair Housing Act and the Americans
As previously discussed, the proposed rule would address how the PHA executes the HAP contract for a PHA-owned unit for both tenant-based units (§ 982.451(c)) and project-based units (§ 983.204(d)). Please see the earlier discussion at § 983.451(c).
HUD has not provided a HUD-prescribed certification option for the Agreement to Enter into a HAP Contract (Agreement) for PHA-owned units, as it has for the HAP contract. While a PHA may not enter into an Agreement with itself for a PHA-owned unit where the PHA (not a separate legal entity) is the owner, the PHA has the option to not require the Agreement for PBV new construction and rehabilitated projects. The PHA could either create a separate legal entity to execute the Agreement as well as the HAP contract as the owner, or could use its discretion to not require the Agreement. (The PHA as the owner could still decide to voluntarily meet the Davis-Bacon wage requirements if it wanted to do so, regardless of the fact the Davis-Bacon wage requirements are not applicable if the PHA does not require the use of the Agreement. See related discussion concerning the Davis-Bacon requirements at § 983.210.)
HUD is also proposing to conform § 983.204 to address proposed changes related to initial inspections discussed in detail elsewhere in this preamble. HUD is proposing to revise the existing language in § 983.204(a) and (b) to reflect that for PBV existing housing, the PHA may use the initial inspection NLT and alternative inspection options. The language would reflect that the PHA must determine that the applicable pre-HAP contract HQS requirements have been met, rather than specifying requirements that may not be applicable if the PHA implemented and applied either initial inspection option to the PBV existing project.
Likewise, HUD is proposing to revise § 983.204(c) to remove the references to the Agreement for newly constructed or rehabilitated housing in describing the determinations the PHA must make before executing the PBV HAP contract, since elsewhere in this rule HUD is proposing to implement the option under which the PHA may choose not to execute the Agreement for PBV new construction and rehabilitation.
HUD implemented section 106(a)(4) of HOTMA, which extends from 15 to 20 years the term of an initial PBV HAP contract or contract extension, in the FR Implementation Notice. In codifying this provision in the PBV regulations, HUD proposes to restructure the underlying regulation in § 983.205 to clarify the differences between the initial PBV HAP contract term, the extension of the initial contract term, and subsequent extensions, as suggested in comments on the January 18, 2017, Notice.
In addition to the HOTMA changes related to the initial term and extensions, HUD is also proposing to move the current regulatory provisions at § 983.205(c) and § 983.210(d), which discuss HAP contract terminations, to § 983.206. This proposed change would consolidate all provisions related to contract terminations under § 983.206.
Section 983.206 currently covers the statutory owner notice requirements to the families and the PHA regarding the termination of the contract. In this proposed rule, HUD is proposing to expand the section to cover two new HOTMA requirements related to the termination of contracts, both of which were previously implemented under the FR Implementation Notice. In addition, HUD is proposing to move a couple of provisions currently found in § 983.205 to § 983.206 to better align the 24 CFR part 983 regulations.
HOTMA requires that the PBV HAP contract must provide that, upon termination or expiration of a PBV HAP contract without extension, each assisted family may elect to remain in the same project with tenant-based assistance, if its unit complies with HUD's Housing Quality Standards, the PHA determines or has determined that the rent for the unit is reasonable, and the family pays its required share of the rent and the amount, if any, by which the unit rent (including the amount allowed for tenant-based utilities) exceeds the applicable payment standard. In other words, the family receives the voucher that was previously used to assist the family under the PBV contract and may choose to use the voucher to stay at the project with continued rental assistance if certain conditions are met.
In this proposed rule, at § 983.206(b), HUD would codify these requirements and further specify that this provision applies unless the termination or expiration without extension occurs as a result of a determination of insufficient funding, as described below. If the PHA is terminating the contract because of insufficient funding, the PHA would not have funding to provide the families with tenant-based vouchers for them to elect to either stay or move from the project. The proposed rule would also provide that an owner may not terminate the tenancy of the family that elects to remain at the project with the tenant-based assistance except as the result of a serious or repeated lease violations, or other good cause under § 982.310. (Under § 982.310, the owner may not terminate the tenancy for “other good cause” during the initial lease term, unless the owner is terminating the tenancy because of something the family did or failed to do.)
HOTMA also provides that, in the event of insufficient appropriated funding, payments due under HCV or PBV HAP contracts must be made if the PHA is able to implement cost-saving measures that make it possible for the PHA to avoid terminating an existing HAP contract. As of the publication date of this proposed rule, cost-saving measures are governed by Notice PIH 2011-28.
In § 983.206(c) of this proposed rule, HUD would codify that the PHA may terminate a PBV HAP contract only after it determines that it lacks sufficient funding to continue housing assistance
Section 983.206(d) would provide that the owner may terminate the contract when the amount of rent to owner for any contract unit is reduced in accordance with the rent adjustment requirements of § 983.302 below the amount of the initial rent to owner, and the assisted families residing in the assisted units will be offered tenant-based assistance. This provision is currently found in § 983.205(d). HUD is proposing to include a reference that the family may remain in the project with the tenant-based assistance in accordance with the new HOTMA provision. HUD is also proposing to add a sentence that expressly provides that the requirement that the owner provide at least one-year owner notice of the termination of the HAP contract is not applicable to this situation.
The current regulation establishes a three-year window following the execution date of a PBV HAP contract during which units may be added to the contract without a request for proposals. HOTMA eliminates this window, allowing units to be added at any time during the term of a PBV HAP contract, which HUD implemented through the FR Implementation Notice. Section 983.207 of this proposed rule would incorporate the HOTMA change, including specifying that the PHA may not add units if doing so would push the agency out of compliance with the program limitation at § 983.6 or the project cap at § 983.54, and the units must comply with the requirements of the PBV HAP contract (
HUD is also proposing related changes to two other sections of the 983 regulations, specifically that if the owner undertakes development activity in order to add previously unassisted units to the HAP contract, then certain development requirements may apply (see §§ 983.152 and 983.153). Please see previous preamble discussion related to those sections.
HUD is proposing similar changes to § 983.208 to implement these same HOTMA HQS enforcement and tenant relocation provisions for the PBV program that were discussed earlier in this preamble under § 982.404 for the tenant-based program.
The proposed rule would expand § 983.208(b) to make the change that the unit is not in compliance with HQS not only if the PHA, but also if an inspector authorized by the State or unit of local government, determines upon inspection of the unit that the unit fails to comply with HQS, the PHA or inspector notifies the owner in writing of the failure, and the defects are not corrected within the new statutorily mandated time-frames. Additionally, § 983.208(b) would include a new paragraph implementing the HOTMA standard for HQS deficiencies that are caused by any member or guest of the household, whereby the PHA may waive the owner's responsibility to remedy the violation and require the family to do so. Section 983.208(c) would be revised in similar fashion to § 982.404 to cover when the PHA may withhold payments and when the PHA must abate the payment and remove a unit from the PBV HAP contract due to HQS deficiencies.
HUD is proposing to allow the PHA to choose to abate payments for the entire PBV HAP contract rather than just the individual unit due to the unit's noncompliance with the HQS. Likewise, the PHA would be permitted to choose to terminate the entire PBV HAP contract, rather than simply removing the unit from the HAP contract, due to noncompliance with HQS, which is consistent with current program requirements. Finally, the same provisions related to the relocation of the family that were discussed in detail in the preamble section on § 982.404 would be added to § 983.208. This proposed change would apply the HOTMA protections to PBV families forced to relocate due to the owner's failure to correct the HQS deficiency, including the PHA's option to use up to 2 months of withheld or abated HAP for costs directly associated with relocating to a new unit, including security deposits or reasonable moving costs.
As explained earlier in the preamble discussion on § 982.404, these HOTMA provisions are set forth in section 8(o)(8)(G) of the United States Housing Act of 1937.
The law provides that these provisions shall apply “to any dwelling unit for which a housing assistance payments contract is entered into or renewed after the date of the effectiveness of the regulations implementing subparagraph (G).” For tenant-based HAP contracts, HUD is interpreting a contract that is “renewed” to mean a HAP contract that has continued beyond the end of the initial lease term. For PBV, HUD is interpreting a contract that is “renewed” to be a contract that has been extended beyond the initial term of the contract. For contracts that were not entered into or renewed after the effective date of the regulations, §§ 982.404 and 983.208 in effect as of the date before the effective date of the final rule will remain in effect.
Unlike tenant-based HAP contracts, the transition period between when a HAP contract executed before the effective date and the final rule and its actual renewal may be quite lengthy in the PBV program. HUD understands that this adds complexity to the administration of PBV HAP contracts, particularly for PHAs that may be administering multiple PBV HAP contracts, some of which will be covered by the newly revised § 983.208 while others remain under the regulation as it stood prior to the effective date of the final rule. The applicability of subparagraph (G) is statutory, and as a result HUD may not conform all PBV HAP contracts to the new enforcement standards and tenant protections under that subparagraph through this rulemaking.
HUD proposes to remove § 983.210(j), which provides that by execution of the HAP contract, the owner certifies that at such execution and at all times during the term of the HAP contract, that repair work on project selected as an existing project that is performed after HAP
Section 12 of the 1937 Act mandates the use of Davis-Bacon wage rates in the “development” of low-income housing projects, including projects under section 8 of the 1937 Act, with nine or more assisted units where there is an agreement for use of Section 8 program funds before the construction or rehabilitation begins.
In this proposed rule, HUD is proposing to return to its requirements prior to a final rule, published June 25, 2014, at 79 FR 36146, regarding Davis-Bacon applicability and PBV. Specifically, the proposal would apply Davis-Bacon wage rates in the PBV program to “rehabilitated” and “newly constructed” housing where an Agreement covering nine or more assisted units is entered into between the PHA and the owner. Within this context, under the proposal, PBV “existing housing” would not be covered by Davis-Bacon. This approach long pre-dates the PBV program. Predecessor Section 8 project-based assistance programs conditioned applicability of Davis-Bacon on execution of an Agreement prior to rehabilitation or construction. In contrast, HUD programs that applied to “existing housing” did not require an “Agreement,” and Davis-Bacon wage rates did not apply.
The 2014 final rule substantially redefined the meaning of “agreement” for Davis-Bacon purposes and provided for application of Davis-Bacon to PBV “existing housing” under certain conditions. In particular, HUD revised the cross-reference to labor standards in 24 CFR 983.4 to remove the reference to labor standards “applicable to an Agreement” covering nine or more assisted units and substitute a reference to labor standards “applicable to development (including rehabilitation) of a project comprising” nine or more assisted units. HUD stated that this language “clarifies that Davis-Bacon requirements may apply to existing housing (which is not subject to the agreement) when the nature of any work planned to be performed prior to HAP contract execution or after HAP contract execution, within such post-execution period as may be specified by HUD, constitutes development of the project.” Subsequent guidance from HUD specified that “work that constitutes remodeling that alters the nature or type of housing units in a PBV project, reconstruction, or a substantial improvement in the quality or kind of original equipment and materials” conducted within 18 months after the effective date of the HAP contract counted as “development” and was therefore subject to Davis-Bacon wage requirements.
The implication of this is that under the 2014 final rule, HUD may require Davis-Bacon wages both: (i) Where the rehabilitation occurs
After careful consideration of the differing views on this subject, HUD has concluded that the pre-2014 PBV requirements, rather than the requirements contained in the June 25, 2014, final rule, are more consistent with the express terms of section 12 of the 1937 Act. In the first instance, where rehabilitation occurs prior to the execution of a HAP contract or any agreement for subsequent Section 8 use, the statutory requirement that there be “an agreement for such [Section 8] use
HUD acknowledges that the broad, open-ended definition of “existing housing” in 24 CFR 983.3 has proven insufficient to ensure that PHAs properly classify PBV housing types and contributed to some of the Davis-Bacon issues that the June 25, 2014, final rule attempted to address. In order to remedy this problem, HUD has proposed a much more specific and tighter definition of “existing housing,” which is discussed in subsection 13 of this preamble.
In addition, the amendment made by section 106(a)(4) of HOTMA, discussed in subsection 34 of this preamble, may significantly impact Davis-Bacon coverage. This provision amends section 8(o)(13)(F) of the 1937 Act to allow a PHA to enter into a HAP contract for housing to be rehabilitated or newly constructed whether or not the PHA has entered into an Agreement, provided that the owner demonstrates compliance with “applicable requirements” prior to execution of the HAP contract. Thus, HOTMA allows rehabilitation or new construction to occur in the absence of an Agreement. In these cases, under HUD's proposal to construe the reference to “an agreement for such [Section 8] use” in section 12 of the 1937 Act to refer exclusively to an Agreement, Davis-Bacon would not apply. In this rule, HUD is proposing to provide the PHA with discretion to decide whether to require the Agreement (per § 983.155(e)). HUD recognizes that permitting the PHA to exclude all rehabilitation and new construction PBV projects from Davis-Bacon requirements by not requiring use of the Agreement may be viewed as an unintended consequence of HOTMA's elimination of the need for an Agreement.
HUD is also proposing a conforming change to § 983.210(c) to reflect the fact that eligible families may be selected from an owner-maintained waiting list if applicable, rather than referred to the owner by the PHA. Please see the preamble discussion on owner-maintained waiting lists at § 983.251.
HUD is proposing a conforming change to § 983.211(c) to reflect the fact that families may be selected from an owner-maintained waiting list, rather than be referred to the owner by the PHA. Please see the related preamble discussion on the proposed implementation of the HOTMA provision allowing for owner-maintained site-based waiting lists at § 983.251.
Section 106(a)(7)(B) of HOTMA provides that a PHA (or owner, if the owner maintains a site-based waiting list as discussed further below) may establish a selection preference for families who qualify for voluntary services, including disability-specific services, offered in conjunction with assisted units, provided that the preference is consistent with the PHA Plan. HUD implemented this provision of HOTMA in the FR Implementation Notice. HUD proposes to revise § 983.251(d) to cover PHA and owner preferences for families that qualify for these voluntary services. As previously implemented under the FR Implementation notice, a key component of the changes that the proposed rule provides is that the preference is for families who qualify for the voluntary services offered at a particular project. Prior to the effective date of this HOTMA provision on April 18, 2017, PHAs were required to provide the preference to any disabled family who needed the voluntary supportive services, regardless of whether the family was eligible to receive the services.
While PHAs and owners would be permitted provide the preference for families that qualify for disability-specific services, the current prohibition on granting preferences to persons with a specific disability at § 982.207(b)(3) would continue to apply. Furthermore, the HOTMA provision specifically provides that the selection preference is for families that qualify for
The current regulatory restrictions at § 983.251(d)(1) that limit the services preference only to a population of families with disabilities that (i) significantly interfere with their ability to obtain and maintain themselves in housing, (ii) who would not be able to obtain or maintain themselves in housing, and (iii) for whom such services cannot be provided in a non-segregated setting would be eliminated in this proposed rule. HOTMA does not put limits or conditions of this nature on the families that may receive the preference or the supportive services, including disability-specific services, that may be offered in conjunction with the assisted unit, other than that those services must be voluntary. However, the PHA would still have to ensure that the PBV project complies with all applicable Fair Housing and Civil Rights requirements, including but not limited to the requirement to administer services, programs, and activities in the most integrated setting appropriate to the needs of qualified individuals with disabilities under section 504 of the Rehabilitation Act and Title II of the Americans with Disabilities Act (see 24 CFR 8.4(d) and 28 CFR 35.130(d)). Additionally, the PBV project where Medicaid-funded home and community based services will be offered as part of “disability-specific services” must also fully comply with the federal home and community-based settings requirements found at 42 CFR 441.301(c)(4), (5) (“Home and Community-Based Settings”).
HOTMA also authorizes the use of owner-maintained, site-based waiting lists for PBV units. Under current requirements, while a PHA may have project specific PBV waiting lists, such waiting lists must be maintained by the PHA, and the owner can assist only eligible families referred by the PHA from the PHA's waiting list. This proposed rule would implement the HOTMA provision that would allow an owner to maintain the PBV waiting list for a project. HUD did not implement this provision under the FR Implementation Notice and instead reserved its implementation for this rulemaking process. In addition, HUD is proposing several non-HOTMA related changes to § 983.251.
The proposed rule at § 983(c)(7) would detail the roles and responsibilities for the PHA and if the PHA decides to allow the owner to maintain the site-based waiting list. Under an owner-maintained waiting list, the owner, not the PHA, is responsible for managing the waiting list, including processing changes in an applicant's information, contacting families when their name is reached on the waiting list, removing applicant names from the waiting list, and opening and closing the waiting list. HUD is proposing that PHAs may choose to use owner maintained PBV waiting lists for specific owners or projects. In other words, the PHA would not have to allow all owners to maintain the waiting list for their PBV projects. The rule proposes to allow the PHA to permit an owner to manage a single waiting list that covers multiple projects owned by the owner.
If a PHA decides to let an owner maintain the site-based waiting list, HUD is proposing that the owner must develop and submit a written tenant selection plan to the PHA for approval. The tenant selection plan would have to include the policies and procedures the owner must follow in maintaining the waiting list, including any preferences for admission. The PHA must incorporate the approved owner tenant selection plan into the PHA's Administrative Plan.
Under the proposed rule, applicants may apply directly at the project instead of at the PHA. The PHA may choose to delegate the responsibility of making a preliminary eligibility determination for purposes of placing the family on the waiting list and determining the family's eligibility for any preference for the site-based waiting list, or the PHA may continue to carry out those responsibilities for the owner-maintained waiting list. Regardless of whether the PHA delegates this responsibility to the owner, the PHA would always be responsible for conducting any informal review for the applicant.
Under the proposed rule, the owner may not determine the family's final program eligibility. This would always be a PHA administrative responsibility. Related to owner maintained waiting lists, the proposed rule would also revise § 983.254 to establish that, in cases where an owner-maintained waiting list is used, the owner must promptly notify the PHA of any vacancy or expected vacancy in a contract unit and refer the family to the PHA for final eligibility determination. The PHA must then make every reasonable effort to promptly make such final eligibility determination. Also, while owners would be required to follow all waiting list administration program requirements, including the public notice requirements of § 982.206 when opening the waiting list, the proposed rule would also require the owner to follow such public notice requirements in the limited cases where the owner-maintained waiting list is already open and additional applicants are needed to fill vacant units. Other technical changes have been proposed to other parts of the regulation (§§ 983.210(c), 983.211(c), and 983.253(a)) to conform with the proposed provision authorizing the PBV program.
The PHA would be responsible for oversight of any owner-maintained waiting lists to ensure they are administered properly and in
The proposed rule would also clarify that the income-targeting requirements apply to owner-maintained waiting lists for the PBV program.
HUD is proposing to make several non-HOTMA related changes and clarifying edits to § 983.251, How participants are selected. Specifically, HUD is proposing to reorganize and revise § 983.251(b) for greater clarity. As in current regulations, the proposed rule would continue to afford PHAs discretion to determine how to structure the PBV waiting list (whether a single waiting list for the entire PBV program, a project-specific waiting list, or as part of its HCV waiting list). The PHA would be able to choose to use a combination of these options. For example, the PHA may choose to use a central PBV waiting list for some PBV projects (either using a dedicated PBV waiting list or as part of the tenant-based waiting list) and use project-specific waiting lists for the other PBV project(s) in its portfolio. In the case of project-specific waiting lists, the PHA would have discretion to determine whether the owner will maintain such waiting lists.
HUD is also proposing to expand this subsection to specifically address situations where the in-place family is a tenant-based voucher participant. These are not new requirements but clarify how the related requirements in § 982.310(d) concerning when the owner may terminate the tenant-based tenancy come into play in terms of protections for in-place families under the PBV program. This proposed rule would provide that during the initial term of the lease, the in-place tenant-based voucher family may agree but is not required to mutually terminate the lease with the owner and enter into a PBV lease. If the family is not willing to terminate the tenant-based lease during the initial term, the owner would not be permitted to terminate the lease for other good cause, unless the owner is terminating the tenancy because of something the family did or failed to do. The owner would not be permitted to terminate the tenancy during the initial lease term because the family is unwilling to terminate the lease and accept the owner's offer of a new lease under the PBV program, and the unit may not be added to the PBV HAP contract during that time. The proposed rule would further provide that, after the initial term of the tenant-based lease, the owner may choose not to renew the lease or may terminate the tenant-based lease for other good cause, and the family would be required to move with their tenant-based voucher or could choose to stay if they were willing to give up their tenant-based voucher and enter into the PBV lease at that time.
The current regulation addresses the impact of a family's rejection of the PBV offer or the owner's rejection of the family based on a family's position on the tenant-based waiting list, but it does not address the impact on a family's position on the PBV waiting list. The proposed rule would give discretion to the PHA to determine in its Administrative Plan the number of offers a family may reject before the family is removed from a central PBV waiting list. Likewise, the PHA's Administrative Plan would be required to address whether an owner's rejection will affect the family's place on a central PBV waiting list. Where a project-specific PBV waiting list is used, the family's name would be removed from the project-specific waiting list connected to the family's rejection of the offer or the owner's rejection of the family. Likewise, the family's place on the tenant-based waiting list would not be affected regardless of which type of PBV waiting list is used.
HUD has taken this opportunity to propose clarifications to the requirements concerning the oral briefing and the information packet the PHA is required to provide to a family selected for the PBV program. These are all non-HOTMA related changes. Specifically, HUD proposes that the oral briefing must include information on the family's right to move. With respect to the information packet, the proposed regulation would require PHAs to include information on federal, state, and local equal opportunity laws. Lastly, HUD proposes that the information packet must include information about the PHA's subsidy standards, including when the PHA will consider granting exceptions. This requirement is consistent with the information packet requirements of the HCV program. HUD expects that most PHAs already provide such information to PBV families.
HUD is proposing a conforming change to § 983.253(c) to reflect the fact that under this proposed rule, families could be selected from an owner-maintained waiting list, rather than be referred to the owner by the PHA. Please see the related preamble discussion on the proposed implementation of the HOTMA provision allowing for owner-maintained site-based waiting lists at § 983.251.
In addition, HUD is proposing a non-HOTMA related change to § 983.253(a)(3), which would require that when a PBV owner rejects an applicant and notifies the applicant in writing of the grounds for the rejection, the owner must also provide the PHA with a copy of the written notice. HUD believes that this information is important for the PHA to have in cases where an owner has rejected an otherwise eligible applicant for a vacant PBV unit.
HUD is proposing conforming changes to § 983.254 to reflect the fact that families could be selected from an owner-maintained waiting list, rather than be referred to the owner by the PHA. Please see the related preamble discussion on the proposed implementation of the HOTMA provision allowing for owner-maintained site-based waiting lists at § 983.251.
As discussed previously in the preamble section on § 983.251, the owner would not determine the family's final program eligibility as part of the owner's responsibilities for an owner-maintained site-based waiting list. The final eligibility determination for an applicant family would always be a PHA administrative responsibility. HUD is consequently proposing to revise § 983.254 to reflect that if an owner maintained waiting list is used, the owner must promptly notify the PHA of any vacancy or expected vacancy in a contract unit and refer the family to the PHA for final eligibility determination, and the PHA must then make every reasonable effort to promptly make such final eligibility determination.
Finally, HUD is proposing to revise § 983.254(a) to expressly provide that both the PHA and the owner must make reasonable, good-faith efforts to minimize the likelihood and length of any vacancy. This general requirement would cover any circumstance where there is a vacant PBV unit, regardless of whether the PHA is administering the waiting list directly or has implemented an owner-maintained site-based waiting list for the vacancy in question.
As previously discussed in this preamble at § 983.54, Cap on number of PBV units in each project, current FSS requirements do not allow termination from the HCV program for failure to complete the FSS contract of participation. Accordingly, HUD proposes to remove the outdated provision at § 983.257(b), which permitted lease termination by the owner where a family failed to complete its FSS contract without good cause. This proposed change would conform the regulation to the current FSS program requirements, the HOTMA-related provision that the exception from the cap on the number of PBV units in each project for supportive services is dependent on the services being voluntary, and that tenants may not have their tenancies terminated because they decline to accept (or choose to no longer accept) the voluntary supportive service offered in conjunction with the assisted unit.
The regulation governing security deposits currently gives PHAs discretion to prohibit an owner from charging PBV-assisted tenants a higher security deposit than the private market practice or higher than what the owner would charge unassisted tenants. Unrelated to HOTMA, HUD is proposing to revise the regulation by removing the PHA discretion to prohibit this practice of charging HCV families a higher security deposit and instead prohibit it in all cases. This would provide consistency with rent reasonableness requirements, where assisted families cannot be charged a higher rent than unassisted families.
HUD is proposing several non-HOTMA related changes to § 983.260. To provide certainty regarding the amount of time a family may remain in a wrong-sized unit or an accessible unit with features that the family does not need, the proposed rule would establish a timeframe of 30 days for the PHA to notify the family and owner that the family is in such a unit. (See 24 CFR 8.27 of the current regulations for further explanation of occupancy of accessible units.) Also, while the PHA would continue to set the time within which a family must move out of the unit when the PHA offers a form of continued assistance other than an HCV, the proposed rule would establish a maximum of 90 days within which a family must move. HUD also proposes restructuring the section to make the requirements clearer.
The proposed rule would revise § 983.262, When occupancy may exceed the project cap, to codify the HOTMA changes to project cap limits. In § 983.262(b), the proposed rule would clarify that, while a PHA may establish criteria for occupancy of particular units in ensuring that units excepted from the project cap are occupied by a family who qualifies for the exception, families who will occupy excepted units must be selected through an admissions preference. Please see the related discussion at § 983.54 above in this preamble.
As discussed previously in the preamble discussion on the project cap at § 983.54, § 983.262(c) would set forth the requirements for the HOTMA supportive services exception to be applicable to a unit. The unit would be excepted if any member of the family is eligible for one or more of the supportive services, even if the family chooses not to participate in the services. Also, if any member of the family successfully completes the supportive services, the unit would continue to be excepted for as long as any member of the family resides in the unit. The unit would only lose its excepted status if no member of the family successfully completed the supportive services and the entire family becomes ineligible during the tenancy for all supportive services that are made available to the residents of the project. The proposed § 983.262(c) would also provide that a family may not be terminated from the program or evicted from the unit when the unit loses its excepted status.
Under this proposed rule, the § 983.262(d) (formerly (e)) provisions concerning wrong-sized units would be revised to remove the reference to disabled family members since, under HOTMA, there is no longer an exception to the PBV unit project cap for disabled families. The current regulatory provisions would continue to apply under the proposed rule to excepted elderly units in cases where the elderly family member no longer resides in the unit but the PHA allows the remaining family members to remain in the unit. Finally, the proposed regulation (in § 983.262(f)) would cover in detail the options available to the PHA when an excepted unit loses its excepted status.
HUD is proposing to make several non-HOTMA related changes to § 983.301(f), Use of FMRs and utility allowance schedule in determining the amount of rent to owner.
First, the current regulation states that a PHA must use the same utility allowance schedule for both its tenant-based and project-based programs. HUD is proposing to allow a PHA to request HUD field office approval to establish a project-specific utility allowance (for example, based on a flat fee charged by an owner or a third-party determination of actual or projected utility costs) for a project assisted under the PBV program. HUD will direct PHAs to use the process used for PBRA described in Notice H 2015-04 unlesPIH promulgates guidance specific to the PBV program. The use of a project-specific utility allowance is intended to assure that payments to tenants for utilities more closely reflect actual utility costs.
HUD is aware that a project-specific utility allowance that under-estimates the actual costs of utilities will have a negative impact on families. Therefore, the proposed change would further provide that the PHA request must demonstrate that the utility allowances used in its voucher program would either create an undue cost on families (because the utility allowance provided under the voucher program is too low), or that use of the utility allowances will discourage conservation and efficient use of HAP funds (because the utility
Second, HUD is proposing several clarifying changes that to better reflect how the current requirements, in § 888.113(c)(5) and § 888.113(h) for Small Area FMRs and project-based vouchers and the requirements at § 982.503 for exception payment standards, determine the amount of rent to owner under the PBV program. Specifically, the proposed change would clarify that for any area in which SAFMRs are in effect, a HUD-approved exception payment standard amount will apply to the PHA's project-based voucher program only if the PHA has adopted a policy applying SAFMRs to its PBV program (see § 888.113(h)).
HOTMA authorizes a PHA and owner to agree that a PBV HAP contract will be adjusted by an annual operating cost adjustment factor (OCAF), subject to the applicable PBV cap on the rent to owner and the rent reasonableness requirement. HUD is proposing to implement this change by revising § 983.302(b) under this rule. Under HOTMA, this OCAF option applies only to PBV HAP contracts that were entered into after the date of enactment of HOTMA (July 29, 2016).
The proposed rule would provide that a rent increase may occur as the result of an owner request or, if both parties agree and provided for in the HAP contract, through an automatic adjustment by an operating cost adjustment factor. However, regardless of the method of the adjustment, the rent increase could not result in a rent that exceeds the maximum rent for the PBV project, as determined by the PHA pursuant to § 983.301. Except for certain tax credit units, the rent to owner must not exceed an amount determined by the PHA, which in accordance with the statutory provision in section 8(o)(13)(H) of the 1937 Act may not exceed the lowest of 110 percent of the FMR (or any exception payment standard approved by HUD under paragraph (1)(D))) for the unit bedroom size minus any utility allowance, the reasonable rent, or the rent requested by the owner. For example, if the rent to owner is capped by the PHA at 105 percent of the FMR, the owner would be unable to receive an OCAF adjustment that results in rents above this level.
In the event an annual OCAF adjustment fails to increase a property's rent up to the maximum level established by the PHA, HOTMA states that an owner may request an additional adjustment up to that level. Lastly, HOTMA states that, in the case of a PBV HAP contract that is adjusted by an OCAF, the contract must require an adjustment, if requested, up to the maximum level established by the PHA, at the point of contract extension. These HOTMA provisions are included in the proposed changes to § 983.302(b) to implement the OCAF adjustment option.
In addition to the HOTMA changes discussed above, HUD is also proposing to make the following non-HOTMA-related change to § 983.302(c), regarding the PHA option not to reduce PBV rents below the initial rent to owner. The regulation currently allows PHAs to elect within the HAP contract not to reduce PBV rents below the initial rent to owner but does not specifically address the timing of such election. The proposed rule would allow a PHA to make such an election at any time during the term of the HAP contract. The proposed rule would also clarify that if rents have already been reduced below the initial rent to owner, then the PHA may not make such an election as a way to increase the rents. If rents increase (pursuant to a rent increase under § 983.302(b)) above the initial rent to owner, then the election would once again become available to the PHA. Additionally, the proposed rule would make a technical change to this provision by removing the following phrase: “for dwelling units under the initial HAP contract.” HUD believes this phrase may be misconstrued to limit a PHA's ability to make the “rent floor” choice only during the initial term of a HAP contract, or only for units covered under an initial HAP contract. To avoid such confusion, the phrase would be removed.
To reduce administrative cost and burden, HUD proposes to eliminate the requirement that the independent entity furnish a copy of its determination of reasonable rent for PHA-owned units to the HUD field office. HUD would retain the requirement that the independent entity furnish this information to the PHA.
HUD is also proposing a conforming change in § 983.303(f) to revise the existing reference to 983.59 to 983.57, as that section would be redesignated as § 983.57 under this proposed rule.
The proposed rule includes a revision to 24 CFR 985.1(b) to make clear that SEMAP applies to the PBV program in the same manner in which it applies to the former project-based certificate program. Specifically, SEMAP applies to the PBV program to the extent that PBV family and unit data are reported and measured under the stated HUD verification method.
HUD is proposing a change to § 985.3(i), to correct the current reference to § 982.503(c)(iii). The reference should read § 982.503(c)(3).
In addition to the provision-specific questions above, HUD is specifically soliciting comment on the following general questions.
Under Executive Order 12866 (Regulatory Planning and Review), a determination must be made whether a regulatory action is significant and therefore, subject to review by the Office of Management and Budget (OMB) in accordance with the requirements of the Executive Order. Executive Order 13563 (Improving Regulations and Regulatory Review) directs executive agencies to analyze regulations that are “outmoded, ineffective, insufficient, or excessively burdensome, and to modify, streamline, expand, or repeal them in accordance with what has been learned.”
This proposed rule would update HUD regulations for the HCV and PBV programs to conform to changes made by HOTMA. These changes include alternatives to HUD's housing quality standard inspection requirement, establishing a statutory definition of PHA-owned housing, and other elements of both programs, ranging from owner proposal selection procedures to how participants are selected. In addition to implementing these HOTMA provisions, HUD has included changes that are intended to reduce the burden on public housing agencies, by either modifying requirements or simplifying and clarifying existing regulatory language.
This proposed rule was determined to be a significant regulatory action under section 3(f) of Executive Order 12866 (although not an economically significant regulatory action under the Order). HUD has prepared an initial Regulatory Impact Analysis (RIA) that addresses the costs and benefits of the proposed rule. HUD's RIA is part of the docket file for this rule, which is available for public inspection at
Executive Order 13771, entitled “Reducing Regulation and Controlling Regulatory Costs,” was issued on January 30, 2017. This proposed rule is considered an E.O. 13771 deregulatory action. Details on the estimated cost savings of this proposed rule can be found in the rule's RIA.
The information collection requirements contained in this proposed rule have been submitted to the Office of Management and Budget (OMB) under the Paperwork Reduction Act of 1995 (44 U.S.C. 3501-3520) and assigned OMB control number 2577-0226. In accordance with the Paperwork Reduction Act, an agency may not conduct or sponsor, and a person is not required to respond to, a collection of information, unless the collection displays a currently valid OMB control number.
Title II of the Unfunded Mandates Reform Act of 1995 (UMRA) establishes requirements for federal agencies to assess the effects of their regulatory actions on state, local, and tribal governments and the private sector. This rule will not impose any federal mandates on any state, local, or tribal governments or the private sector within the meaning of UMRA.
A Finding of No Significant Impact (FONSI) with respect to the environment has been made in accordance with HUD regulations in 24 CFR part 50 that implement section 102(2)(C) of the National Environmental Policy Act of 1969 (42 U.S.C. 4332(2)(C)). The FONSI is available online at
The Regulatory Flexibility Act (RFA) (5 U.S.C. 601
For purposes of this rule, HUD defines a small PHA as a PHA for which the sum of the number of public housing dwelling units administered by the agency and the number of vouchers is 550 or fewer. There are approximately 2,700 such agencies; some are voucher-only, some are combined, some are public housing-only. HUD includes all of these agencies among the number that could be affected by the proposed rule. For those that operate voucher programs, the potential to be affected is evident. For public housing-only agencies, the potential effect of the proposed rule depends on whether the agency removes its public housing from the public housing program via one of the available legal removal tools, then project-bases any tenant protection vouchers awarded in connection with that removal.
This proposed rule revises HUD regulations in certain ways that will reduce the burden on or provide flexibility for all PHAs, owners, and other responsible entities, irrespective of whether they are small entities. For example, the proposed rule leverages Small Area Fair Market Rents to provide PHAs with greater autonomy in setting exception payment standard amounts. It proposes to implement HOTMA's exceptions to the program and project caps under the PBV program, such as authorizing a PHA to project-base 100 percent of the units in any project with 25 units or fewer. It extends from 15 to 20 years the permissible duration of a PBV HAP contract, resulting in less frequent need for extensions, and eliminates the three-year window during which units may be added to an existing contract without a PHA issuing a new request for proposals (RFP). The rule proposes to eliminate extraneous requirements specific to the project-basing of VASH and FUP vouchers, as long as project-basing is done consistent with PBV program rules. It proposes to provide PHAs with greater flexibility in the establishment of utility allowance schedules. It also proposes to implement new discretionary authority for a PHA to enter into a PBV HAP contract with an owner for housing that is newly constructed or recently rehabilitated, as long as PBV program rules are followed, even if construction or rehabilitation commenced prior to the PHA issuing an RFP. HUD estimates that such changes have the potential to generate a range of cost savings but is unable to estimate the number of small entities that would experience cost savings as a result of changes proposed
For the reasons presented, the undersigned certifies that this rule will not have a significant economic impact on a substantial number of small entities.
Executive Order 13132 (entitled “Federalism”) prohibits an agency from publishing any rule that has federalism implications if the rule either imposes substantial direct compliance costs on state and local governments and is not required by statute, or the rule preempts state law, unless the agency meets the consultation and funding requirements of section 6 of the Executive Order. This final rule does not have federalism implications and does not impose substantial direct compliance costs on state and local governments nor preempt state law within the meaning of the Executive Order.
The Catalog of Federal Domestic Assistance numbers applicable for the programs that would be affected by this rule are: 14.871, 14.880, and 14.896.
Grant programs-housing and community development, rent subsidies.
Grant programs-housing and community development, Grant programs-Indians, Indians, Public housing, Rent subsidies, Reporting and recordkeeping requirements.
Grant programs-housing and community development, Low and moderate income housing, Rent subsidies, Reporting and recordkeeping requirements.
Grant programs-housing and community development, Public housing, Rent subsidies, Reporting and recordkeeping requirements.
Accordingly, for the reasons stated in the preamble, HUD proposes to amend 24 CFR parts 888, 982, 983, and 985 as follows:
42 U.S.C. 1437f and 3535d.
(c) * * *
(3) * * * A PHA administering an HCV program in a metropolitan area not subject to the application of Small Area FMRs may use Small Area FMRs after requesting and receiving approval from its local HUD field office.
42 U.S.C. 1437f and 3535(d).
The revisions and additions read as follows:
(a)
(2) The terms “adjusted income,” “annual income,” “extremely low income family,” “tenant rent,” “total tenant payment,” “utility allowance,” “utility reimbursement,” and “welfare assistance” are defined in part 5, subpart F of this title. The definitions of “tenant rent” and “utility reimbursement” in part 5, subpart F of this title do not apply to the HCV program under this part.
(b) * * *
(A) Owned by the PHA (including having a controlling interest in the entity that owns the project);
(B) Owned by an entity wholly controlled by the PHA; or
(C) Owned by a limited liability company or limited partnership in which the PHA (or an entity wholly controlled by the PHA) holds a controlling interest in the managing member or general partner.
(ii) A controlling interest is:
(A) Holding more than 50 percent of the stock of any corporation;
(B) Having the power to appoint more than 50 percent of the members of the board of directors of a non-stock corporation (such as a nonprofit corporation);
(C) Where more than 50 percent of the members of the board of directors of any corporation also serve as directors, officers, or employees of the PHA;
(D) Holding more than 50 percent of all managing member interests in an LLC;
(E) Holding more than 50 percent of all general partner interests in a partnership; or
(F) Equivalent levels of control in other ownership structures.
The revisions reads as follows:
(d) The PHA Administrative Plan must cover, at a minimum, the PHA's policies on the following subjects (see § 983.10 for a list of subjects specific to the PBV program that must be included in the Administrative Plan of a PHA that operates a PBV program):
(1) Selection and admission of applicants from the PHA waiting list, including any PHA admission preferences, procedures for removing applicant names from the waiting list, and procedures for closing and reopening the PHA waiting list;
(2) Issuing or denying vouchers, including PHA policy governing the voucher term and any extensions of the voucher term. If the PHA decides to allow extensions of the voucher term, the PHA Administrative Plan must describe how the PHA determines whether to grant extensions and how the PHA determines the length of any extension.
(3) Any special rules for use of available funds when HUD provides funding to the PHA for a special purpose (
(4) Occupancy policies, including:
(i) Definition of what group of persons may qualify as a “family”;
(ii) Definition of when a family is considered to be “continuously assisted”;
(iii) Standards for denying admission or terminating assistance based on criminal activity or alcohol abuse in accordance with § 982.553, or other factors in accordance with §§ 982.552, 982.554, and 982.555;
(iv) Policies concerning residency by a foster child or live-in aide, including defining when PHA consent for occupancy by a foster child or live-in aide may be given or denied;
(5) Encouraging participation by owners of suitable units located outside areas of low-income or minority concentration;
(6) Assisting a family that claims that illegal discrimination has prevented the family from leasing a suitable unit;
(7) Providing information about a family to prospective owners;
(8) Disapproval of owners;
(9) Subsidy standards;
(10) Family absence from the dwelling unit;
(11) How to determine who remains in the program if a family breaks up;
(12) Informal review procedures for applicants;
(13) Informal hearing procedures for participants;
(14) Payment standard policies, including:
(i) The process for establishing and revising payment standards, including whether the PHA has voluntarily adopted the use of Small Area Fair Market Rents (SAFMRs);
(ii) A description of how the PHA will administer decreases in the payment standard amount for a family continuing to reside in a unit for which the family is receiving assistance (see § 982.505(d)(3)); and
(iii) If the PHA establishes different payment standard amounts for designated areas within its jurisdiction, including exception areas, the criteria used to determine the designated areas and the payment standard amounts for those designated areas (see § 982.503(a)(2)) (all such areas must be described in the PHA's Administrative Plan or payment standard schedule).
(15) The method of determining that rent to owner is a reasonable rent (initially and during the term of a HAP contract);
(16) Special policies concerning special housing types in the program (
(17) Policies concerning payment by a family to the PHA of amounts the family owes the PHA;
(18) Policies concerning interim redeterminations of family income and composition, the frequency of determinations of family income, and income-determination practices, including whether the PHA will accept a family declaration of assets;
(19) Restrictions, if any, on the number of moves by a participant family (see § 982.354(c));
(20) Approval by the Board of Commissioners or other authorized officials to charge the administrative fee reserve;
(21) Procedural guidelines and performance standards for conducting required housing quality standard inspections, including:
(i) The specific life-threatening conditions that will be identified through the PHA's inspections. This list must include the HUD required conditions found in § 982.401(o), as well as any amendments to the definition by HUD, and any life-threatening deficiency adopted by the PHA prior to January 18, 2017.
(ii) For PHAs that adopt the non-life-threatening provision:
(A) The PHA policy on whether the provision will apply to all initial inspections or a portion of initial inspections.
(B) If the provision will be applied to only some inspections, how the units will be selected.
(C) The PHA policy on using withheld HAP funds to repay an owner once the unit is in compliance with Housing Quality Standards.
(iii) For PHAs that adopt the alternative inspection provision:
(A) The PHA policy on how it will apply the provision to initial and biennial inspections.
(B) The specific alternative inspection method used by the PHA.
(C) The specific properties or types of properties where the alternative inspection method will be employed.
(D) The maximum amount of time the PHA will withhold HAP if the owner does not correct the HQS deficiencies within the cure period, and the period of time after which the PHA will terminate the HAP contract for the owner's failure to correct the deficiencies, which may not exceed 180 days from the effective date of the HAP contract.
(iv) The PHA policy on charging a reinspection fee to owners.
(22) PHA screening of applicants for family behavior or suitability for tenancy;
(23) Whether the PHA will permit a family to submit more than one Request for Tenancy Approval at a time (§ 982.302(b)); and
(24) In the event of insufficient funding, taking into account any cost-savings measures taken by the PHA, a description of the factors the PHA will consider when determining which HAP contracts to terminate first (
(a)
(2) The PHA may not discourage the family from choosing to live anywhere in the PHA jurisdiction, or outside the PHA jurisdiction under portability procedures, unless otherwise expressly authorized by statute, regulation, PIH Notice, or court order. The family must be informed of how portability may affect the family's assistance through screening, subsidy standards, payment standards, and any other elements of the portability process that may affect the family's assistance.
(4) In briefing a family that includes any persons with disabilities, the PHA must take appropriate steps to ensure effective communication in accordance with 24 CFR 8.6 and 28 CFR part 35, subpart E.
(b)
(1) The term of the voucher, voucher suspensions, and PHA policy on any extensions of the term. If the PHA allows extensions, the packet must explain how the family can request an extension.
(2) How the PHA determines the amount of the housing assistance payment for a family, including:
(i) How the PHA determines the payment standard for a family; and
(ii) How the PHA determines the total tenant payment for a family.
(3) How the PHA determines the maximum rent for an assisted unit.
(4) Where the family may lease a unit and an explanation of how portability works, including information on how portability may affect the family's assistance through screening, subsidy standards, payment standards, and any other elements of the portability process that may affect the family's assistance.
(5) The HUD-required “tenancy addendum” that must be included in the lease.
(6) The form that the family uses to request PHA approval of the assisted tenancy, and an explanation of how to request such approval.
(7) A statement of the PHA policy on providing information about a family to prospective owners.
(8) PHA subsidy standards, including when the PHA will consider granting exceptions to the standards, including when required as a reasonable accommodation for persons with disabilities under Section 504, the Fair Housing Act, or the ADA.
(9) Materials (
(10) Information on federal, State, and local equal opportunity laws, the contact information for the Section 504 coordinator, a copy of the housing discrimination complaint form, and information on how to request a reasonable accommodation or modification under Section 504, the Fair Housing Act, and the Americans with Disabilities Act.
(11) A list of landlords known to the PHA who may be willing to lease a unit to the family or other resources (
(12) Notice that if the family includes a person with disabilities, the PHA is subject to the requirement under 24 CFR 8.28(a)(3) that the family may request a current listing of accessible units known to the PHA that may be available and, if necessary, other assistance in locating an available accessible dwelling unit.
(13) Family obligations under the program, including any obligations of a welfare-to-work family.
(14) The advantages of areas that do not have a high concentration of low-income families.
(15) A description of when the PHA is required to give a participant family the opportunity for an informal hearing and how to request a hearing.
(c)
(a)
(b) * * *
(1) All of the following must be completed before the beginning of the initial term of the lease for a unit:
(2) * * *
(ii) The 15-day clock (under paragraph (b)(2)(i)(A) or (B) of this section) is suspended during any period when the unit is not available for inspection.
(iii) If the PHA has implemented, and the unit is covered by, the alternative inspection option for initial inspections under § 982.406(f), the PHA is not required to inspect the unit, determine whether the unit satisfies the HQS, and notify the family and owner of the determination within the time period described in paragraphs (b)(1)(i) and (ii) of this section. Instead, the PHA must have determined that the unit is covered by the alternative inspection and notified the family and the owner that the alternative inspection option is available in accordance with the time periods described in paragraphs (b)(1)(i)
(c) * * *
(3) If the HAP contract is executed within 60 calendar days from the beginning of the lease term, the PHA will pay housing assistance payments after execution of the HAP contract (in accordance with the terms of the HAP contract), to cover the portion of the lease term before execution of the HAP contract (a maximum of 60 days).
(4) Any HAP contract executed after the 60-day period is void, and the PHA may not pay any housing assistance payment to the owner. If there are extenuating circumstances that prevent or prevented the PHA from meeting the 60-day deadline, then the PHA may submit to HUD a request for an extension. The request must include an explanation of the extenuating circumstances and any supporting documentation.
(f)
(i) The PHA may approve the assisted tenancy and execute the HAP contract, and
(ii) The beginning of the initial lease term.
(2) If the PHA has implemented, and determines that the unit is covered by, the non life-threatening deficiencies option at § 982.405(i), the unit must be inspected by the PHA and must have no life-threatening deficiencies as defined under § 982.401(o) before:
(i) The PHA may approve the assisted tenancy and execute the HAP contract, and
(ii) The beginning of the initial lease term.
(3) If the PHA has implemented and determines that the unit is covered by the alternative inspection option at § 982.406(e), then the PHA must determine that the unit was inspected in the previous 24 months by an inspection that meets the requirements of § 982.406 before:
(i) The PHA may approve the assisted tenancy and execute the HAP contract, and
(ii) The beginning of the initial lease term.
(4) If the PHA has implemented and determines that the unit is covered by both the no life-threatening deficiencies option and the alternative inspection option, the unit is subject only to paragraph (f)(3) of this section, not paragraph (f)(2) of this section.
(a)
(1) A public housing or Indian housing unit;
(2) A unit receiving project-based assistance under section 8 of the 1937 Act (42 U.S.C. 1437f);
(3) Nursing homes, board and care homes, or facilities providing continual psychiatric, medical, or nursing services;
(4) College or other school dormitories;
(5) Units on the grounds of penal, reformatory, medical, mental, and similar public or private institutions; or
(6) A unit occupied by its owner or by a person with any interest in the unit. (For provisions on PHA disapproval of an owner,
(b)
(i) The PHA must inform the family, both orally and in writing, that the family has the right to select any eligible unit available for lease.
(ii) A PHA-owned unit is freely selected by the family, without PHA pressure or steering.
(iii) The unit selected by the family is not ineligible housing.
(iv) During assisted occupancy, the family may not benefit from any form of housing subsidy that is prohibited under paragraph (c) of this section.
(v)(A) The PHA must obtain the services of an independent entity, as defined in § 982.4, to perform the following PHA functions as required under the program rule:
(
(
(
(B) The PHA may compensate the independent entity from PHA administrative fees (including fees credited to the administrative fee reserve) for the services performed by the independent entity. The PHA may not use other program receipts to compensate the independent entity for such services. The PHA and the independent entity may not charge the family any fee or charge for the services provided by the independent entity.
(a) * * *
(3) All program housing must meet the HQS requirements both at commencement of assisted occupancy (§ 982.305(f)), and throughout the assisted tenancy (§ 982.404).
(5) All defects that are not life-threatening conditions defined in paragraph (o) of this section must be remedied within 30 days of the owner's receipt of written notice of the defects or a reasonable longer period that the PHA establishes.
(o)
(2) Life-threatening conditions are defined as:
(i) Gas (natural or liquid petroleum) leak or fumes. A life-threatening condition under this standard is one of the following:
(A) A fuel storage vessel, fluid line, valve, or connection that supplies fuel to a HVAC unit is leaking; or
(B) A strong gas odor detected with potential for explosion or fire, or that results in health risk if inhaled.
(ii) Electrical hazards that could result in shock or fire. A life-threatening condition under this standard is one of the following:
(A) A light fixture is readily accessible, is not securely mounted to the ceiling or wall, and electrical connections or wires are exposed;
(B) A light fixture is hanging by its wires;
(C) A light fixture has a missing or broken bulb, and the open socket is readily accessible to the tenant during the day to day use of the unit;
(D) A receptacle (outlet) or switch is missing or broken and electrical connections or wires are exposed;
(E) A receptacle (outlet) or switch has a missing or damaged cover plate and electrical connections or wires are exposed;
(F) An open circuit breaker position is not appropriately blanked off in a panel board, main panel board, or other electrical box that contains circuit breakers or fuses;
(G) A cover is missing from any electrical device box, panel box, switch gear box, control panel, etc., and there are exposed electrical connections;
(H) Any nicks, abrasions, or fraying of the insulation that expose conducting wire;
(I) Exposed bare wires or electrical connections;
(J) Any condition that results in openings in electrical panels or electrical control device enclosures;
(K) Water leaking or ponding near any electrical device; or
(L) Any condition that poses a serious risk of electrocution or fire and poses an immediate life-threatening condition.
(iii) Inoperable or missing smoke detector. A life-threatening condition under this standard is one of the following:
(A) The smoke detector is missing; or
(B) The smoke detector does not function as it should.
(iv) Interior air quality. A life-threatening condition under this standard is one of the following:
(A) The carbon monoxide detector is missing; or
(B) The carbon monoxide detector does not function as it should.
(v) Gas/oil fired water heater or heating, ventilation, or cooling system with missing, damaged, improper, or misaligned chimney or venting. A life-threatening condition under this standard is one of the following:
(A) The chimney or venting system on a fuel fired water heater is misaligned, negatively pitched, or damaged, which may cause improper or dangerous venting of gases;
(B) A gas dryer vent is missing, damaged, or is visually determined to be inoperable, or the dryer exhaust is not vented to the outside;
(C) A fuel fired space heater is not properly vented or lacks available combustion air;
(D) A non-vented space heater is present;
(E) Safety devices on a fuel fired space heater are missing or damaged; or
(F) The chimney or venting system on a fuel fired heating, ventilation, or cooling system is misaligned, negatively pitched, or damaged which may cause improper or dangerous venting of gases.
(vi) Lack of alternative means of exit in case of fire or blocked egress. A life-threatening condition under this standard is one of the following:
(A) Any of the components that affect the function of the fire escape are missing or damaged;
(B) Stored items or other barriers restrict or prevent the use of the fire escape in the event of an emergency; or
(C) The building's emergency exit is blocked or impeded, thus limiting the ability of occupants to exit in a fire or other emergency.
(vii) Other interior hazards. A life-threatening condition under this standard is a fire extinguisher (where required) that is missing, damaged, discharged, overcharged, or expired.
(viii) Deteriorated paint, as defined by 24 CFR 35.110, in a unit built before 1978 that is to be occupied by a family with a child under 6 years of age. This is a life-threatening condition only for the purpose of a condition that would prevent a family from moving into the unit. All lead hazard reduction requirements in 24 CFR part 35, including the timeline for lead hazard reduction procedures, still apply.
(ix) Any other condition identified by the administering PHA as life-threatening in the PHA's administrative plan.
(3) Any other condition subsequently identified by HUD as life-threatening. These additional items will be added through a document published in the
(a)
(2) If the owner fails to maintain the dwelling unit in accordance with HQS, the PHA must withhold or must abate housing assistance payments and terminate HAP contracts in accordance with this section.
(3) If a defect is life-threatening, the owner must correct the defect within no more than 24 hours after notification. For other defects, the owner must correct the defect within no more than 30 calendar days after notification (or any PHA-approved extension).
(4) In the case of an HQS deficiency that is caused by any member, or guest of the assisted family, the PHA may waive the owner's responsibility to remedy the violation. If the PHA waives the owner's responsibility, then the family must make the repairs in accordance with paragraph (b)(2) of this section. However, the PHA may terminate assistance to a family because of an HQS breach caused by any member or guest of the assisted family.
(b) * * *
(1) The family may be held responsible for a breach of the HQS that is caused by any of the following:
(2) If an HQS breach caused by the family is life threatening, the family must correct the defect within no more than 24 hours after receiving notification. For other family-caused defects, the family must correct the defect within 30 calendar days after notification (or any PHA-approved extension).
(c)
(1) The PHA or authorized inspector determines the unit fails to comply based upon an inspection;
(2) The PHA notified the owner in writing of the unit failure; and
(3) The unit failures are not corrected in accordance with the timeframes established in § 982.401(a)(5) and (o).
(d)
(1) A PHA may withhold assistance payments for units that do not meet HQS once the PHA has notified the owner in writing of the deficiencies. If the unit is brought into compliance during the applicable cure period (24 hours for life-threatening deficiencies and 30 days (or other reasonable period established by the PHA) for non-life-threatening deficiencies, the PHA must:
(i) Resume assistance payments; and
(ii) Provide assistance payments to cover the time period for which the assistance payments were withheld.
(2)(i) The PHA must abate the HAP if the owner fails to make the repairs within the applicable cure period (24 hours for life-threatening deficiencies and 30 days (or other reasonable period established by the PHA) for non-life-threatening deficiencies).
(ii) If a PHA abates the assistance payments under this paragraph, the PHA must notify the family and the owner that it is abating payments and that if the unit does not meet HQS within 60 days (or a reasonable longer period established by the PHA) after the determination of noncompliance in accordance with paragraph (c) of this section, the PHA will terminate the HAP contract for the unit, and the family will have to move if the family wishes to receive continued assistance. The PHA must issue the family its voucher and provide the family with any other forms necessary to move to another unit with continued HCV assistance.
(3) An owner may not terminate the tenancy of any family due to the withholding or abatement of assistance under paragraph (a) of this section. During the period that assistance is abated, the family may terminate the tenancy by notifying the owner and the PHA. If the family chooses to terminate the tenancy, the HAP contract will automatically terminate on the effective date of the tenancy termination or the date the family vacates the unit.
(4) If the family did not terminate the tenancy and the owner makes the repairs and the unit complies with HQS within 60 days (or a reasonable longer period established by the PHA) of the notice of abatement, the PHA must recommence payments to the owner. The PHA does not make any payments to the owner for the period of time that the payments were abated.
(5) If the owner fails to make the repairs within 60 days (or a reasonable longer period established by the PHA) of the notice of abatement, the PHA must terminate the HAP contract.
(e)
(2) If the family is unable to lease a new unit within the period provided by the PHA under paragraph (e)(1) of this section and the PHA owns or operates public housing, the PHA must offer, and, if accepted, provide the family a preference for the first appropriately sized public housing unit that becomes available for occupancy after the time period expires.
(3) PHAs may assist families relocating under this paragraph (e) in finding a new unit, including using up to 2 months of the withheld and abated assistance payments for costs directly associated with relocating to a new unit, including security deposits or reasonable moving costs as determined by the PHA based on their locality. If the family receives security deposit assistance from the PHA for the new unit, the PHA may require the family to remit the security deposit returned by the owner of the new unit at such time that the lease is terminated, up to the amount of the security deposit assistance provided by the PHA for that unit. The PHA must include in its Administrative Plan the policies it will implement for this provision.
(f)
(a)
(b)
(c)
(d)
(e)
(f)
(g)
(h)
(i)
(2) The PHA must notify the owner and the family if the NLT option is available for the unit selected by the family. After completing the inspection and determining there are no life-threatening deficiencies, the PHA provides both the owner and the family with a list of all the non-life threatening deficiencies identified by the initial HQS inspection and, should the owner not complete the repairs within 30 days, the maximum amount of time the PHA will withhold HAP before abating assistance. The PHA must also inform the family that if the family accepts the unit and the owner fails to make the repairs within the cure period, which may not exceed 180 days from the effective date of the HAP contract, the PHA will terminate the HAP contract, and the family will have to move to another unit in order to receive voucher assistance. The family may choose to decline the unit based on the deficiencies and continue its housing search.
(3) If the family decides to lease the unit, the PHA and the owner execute the HAP contract, and the family enters into the assisted lease with the owner. The PHA commences making assistance payments to the owner.
(4) The owner must correct the deficiencies within 30 days from the effective date of the HAP contract. If the owner fails to correct the deficiencies within the 30-day cure period, the PHA must withhold the housing assistance payments until the owner makes the repairs and the PHA verifies the correction. Once the deficiencies are corrected, the PHA may use the withheld housing assistance payments to make payments for the period that payments were withheld.
(5) A PHA relying on the non life-threatening inspection provision must identify in the PHA Administrative Plan all the optional policies identified in § 982.54(d)(21).
The revisions and additions read as follows:
(a)
(2) If an alternative inspection method employs sampling, then a PHA may rely on such alternative inspection method to comply with the requirements in § 982.405(a) only if HCV units are included in the population of units forming the basis of the sample.
(3) Units in properties that are mixed-finance properties assisted with project-based vouchers may be inspected at least triennially pursuant to 24 CFR 983.103(h).
(b)
(c) * * *
(1) A PHA may rely upon inspections of housing assisted under the HOME Investment Partnerships (HOME) program or housing financed using Low-Income Housing Tax Credits (LIHTCs), or inspections performed by HUD.
(2) If a PHA wishes to rely on an inspection method other than a method listed in paragraph (c)(1) of this section, then, prior to amending its Administrative Plan, the PHA must submit to the Real Estate Assessment Center (REAC) a copy of the inspection method it wishes to use, along with its analysis of the inspection method that shows that the method “provides the same or greater protection to occupants of dwelling units” as would HQS.
(e)
(2) The PHA notifies the owner and the family that the alternative inspection option is available for the unit selected by the family. The PHA must provide the family with the PHA list of HQS deficiencies that are considered life-threatening under § 982.401(o) as part of this notification. If the owner and family agree to the use of this option, the PHA approves the assisted tenancy, allows the family to enter into the lease agreement with the owner, and executes the HAP contract on the basis of the alternative inspection.
(3) The PHA must conduct an HQS inspection within 30 days of receiving the Request for Tenancy Approval. If the family reports a deficiency to the PHA prior to the PHA's HQS inspection, the PHA must inspect the unit within the time period required under § 982.404(g) or within 30 days of the effective date of the HAP contract, whichever time period ends first.
(4) The PHA must enter into the HAP contract with the owner before conducting the HQS inspection. The PHA may not make housing assistance payments to the owner until the PHA has inspected the unit.
(5) The PHA may commence housing assistance payments to the owner and make housing assistance payments retroactive to the effective date of the HAP contract only after the unit passes the PHA's HQS inspection. If the unit does not pass the HQS inspection, the PHA may not make housing assistance payments to the owner until all the deficiencies have been corrected. If a defect is life threatening, the owner must correct the defect within 24 hours of notification from the PHA. For other defects, the owner must correct the defect within no more than 30 calendar days (or any PHA-approved extension) of notification from the PHA. If the owner corrects the deficiencies within the required cure period, the PHA makes the housing assistance payments retroactive to the effective date of the HAP contract.
(6) The PHA establishes in the Administrative Plan:
(i) The maximum amount of time it will withhold payments if the owner does not correct the deficiencies within the required cure period before abating payments; and
(ii) The date by which the PHA will terminate the HAP contract for the owner's failure to correct the deficiencies, which may not exceed 180 days from the effective date of the HAP contract.
(f)
(2) The PHA must conduct an HQS inspection within 30 days after the family and owner submit a complete Request for Tenancy Approval. If the family reports a deficiency to the PHA prior to the PHA's HQS inspection, the PHA must inspect the unit within the time period required under § 982.404(g) or within 30 days of the effective date of the HAP contract, whichever time period ends first.
(3) The PHA must enter into the HAP contract with the owner before conducting the HQS inspection. The PHA may not make housing assistance payments to the owner until the PHA has inspected the unit. If the unit passes the HQS inspection, the PHA commences making housing assistance payments to the owner and makes payments retroactive to the effective date of the HAP contract.
(4) If the unit fails the PHA's HQS inspection but has no life-threatening deficiencies, the PHA commences making housing assistance payments, which are made retroactive to the effective date of the HAP contract. The owner must correct the deficiencies within 30 days from the effective date of the HAP contract. If the owner fails to correct the deficiencies within the 30-day cure period, the PHA must withhold the housing assistance payments until the owner makes the repairs and the PHA verifies the correction. Once the unit is in compliance with HQS, the PHA may use the withheld housing assistance payments to make payments for the period that payments were withheld.
(5) If the unit does not pass the HQS inspection and has life-threatening deficiencies, the PHA may not commence making housing assistance payments to the owner until all the deficiencies have been corrected. The owner must correct all life-threatening deficiencies within 24 hours of notification from the PHA. For other defects, the owner must correct the defect within 30 days (or any PHA-approved extension) of notification from the PHA. If the owner corrects the deficiencies within the required cure period, the PHA makes the housing assistance payments retroactive to the effective date of the HAP contract.
(6) The PHA establishes in the Administrative Plan:
(i) The maximum amount of time it will withhold payments if the owner fails to correct the deficiencies within the required cure period before abating payments; and
(ii) The date by which the PHA will terminate the HAP contract for the owner's failure to correct the deficiencies, which may not exceed 180 days from the effective date of the HAP contract.
(a
(b)
(4)(i) The part of the rent to owner that is paid by the tenant may not be more than:
(5) * * *
(iii) The PHA may use only the following sources to pay a late payment penalty from program receipts under the consolidated ACC: Administrative fee income for the program or the administrative fee reserve for the program. The PHA may not use other program receipts for this purpose.
(c)
(1)
(A) A non-profit affiliate or instrumentality of the PHA;
(B) A limited liability corporation;
(C) A limited partnership;
(D) A corporation; or
(E) Any other legally acceptable entity recognized under State law.
(ii) In cases where the independent entity, as defined in § 982.4, is required to notify the PHA of a determination, the independent entity may notify the PHA or the separate legal entity, or both.
(2)
(ii) The PHA executed certification serves as the equivalent of the HAP contract for the PHA-owned unit.
(iii) The PHA must obtain the services of an independent entity to perform the required PHA functions in accordance with § 982.352(b)(1)(v) before signing the certification.
(iv) The PHA may not use the PHA-owned certification if the PHA-owned unit is owned by a separate legal entity from the PHA (
(a)
(i) The HUD-published Small Area FMR for:
(A) Any metropolitan area designated as a Small Area FMR area by HUD in accordance with 24 CFR 888.113(c)(1).
(B) Any area where a PHA has notified HUD that the PHA will voluntarily use SAFMRs in accordance with 24 CFR 888.113(c)(3).
(ii) The HUD-published metropolitan FMR for any other metropolitan area.
(iii) The HUD-published FMR for any non-metropolitan county.
(2) The PHA must adopt a payment standard schedule that establishes voucher payment standard amounts for each FMR area in the PHA jurisdiction. These payment standard amounts are used to calculate the monthly housing assistance payment for a family (§ 982.505).
(3) The PHA may designate payment standard areas within each FMR area and establish payment standard amounts for such designated areas. If the PHA designates payment standard areas, then it must include in its Administrative Plan the criteria used to determine the designated areas and the payment standard amounts for those areas.
(i) The PHA may designate payment standard areas within which payment standards will be established according to paragraph (c) (basic range) or paragraph (d) (exception payment standard), of this section.
(ii) A PHA-designated payment standard area may be no smaller than a census tract block group.
(b)
(c)
(1) The PHA may establish a basic payment standard amount without HUD approval.
(2) The PHA's basic range payment standard amount for each unit size may be based on the same percentage of the published FMR (
(3) The PHA must revise its payment standard amounts and schedule no later than 3 months following the effective date of the published FMR if revisions are necessary to stay within the basic range.
(d)
(1) The PHA may establish exception payment standard amounts for all units, or for units of a particular size, in a designated part of the FMR area (called an “exception area”). The exception area must meet the minimum area requirement at § 982.503(a)(3)(ii).
(2) A PHA that is not in a designated Small Area FMR area or has not opted voluntarily to implement Small Area FMRs under 24 CFR 888.113(c)(3) may establish exception payment standards for a ZIP code area that exceed the basic range for the metropolitan area FMR as long as the amounts established by the PHA do not exceed 110 percent of the HUD published SAFMR for the applicable ZIP code. The exception payment standard must apply to the entire ZIP code area. If an exception area crosses one or more FMR boundaries, then the maximum exception payment standard amount that a PHA may adopt for the exception area without HUD approval is 110 percent of the ZIP code area with the lowest SAFMR amount.
(3) In all other cases, the PHA must request approval from HUD to establish an exception payment standard amount for an exception area that exceeds 110 percent of the applicable FMR. In its request to HUD, the PHA must provide rental market data demonstrating that the requested exception payment standard amount is needed in order for families to access rental units in the exception area. Once HUD has approved the exception payment standard for the requesting PHA, any other PHA with jurisdiction in the HUD approved exception payment standard area may also use the exception payment standard amount.
(4) If required as a reasonable accommodation in accordance with 24 CFR part 8 for a person with a disability, the PHA may establish, without HUD approval, an exception payment standard amount that does not exceed 120 percent of the applicable FMR. A PHA may establish a payment standard greater than 120 percent of the applicable FMR as a reasonable accommodation for a person with a disability in accordance with 24 CFR part 8, after requesting and receiving HUD approval.
(e)
(2) In cases other than the circumstance described in paragraph (e)(1) of this section, a PHA that wishes to establish a payment standard amount that is below the basic range must obtain HUD approval. In determining whether to approve the PHA request, HUD will consider such factors as whether approval of the request is necessary to prevent the termination of program participants or increase the number of families the PHA may assist.
(f)
(1) A PHA may obtain HUD Field Office approval of success rate payment standard amounts provided the PHA demonstrates to HUD that it meets the following criteria:
(i) Fewer than 75 percent of the families to whom the PHA issued rental vouchers during the most recent 6-month period for which there is success rate data available have become participants in the voucher program;
(ii) The PHA has established payment standard amounts for all unit sizes in the entire PHA jurisdiction within the FMR area at 110 percent of the published FMR for at least the 6-month period referenced in paragraph (f)(1)(i) of this section and up to the time the request is made to HUD; and
(iii) The PHA has a policy of granting automatic extensions of voucher terms to at least 90 days to provide a family who has made sustained efforts to locate suitable housing with additional search time.
(2) In determining whether to approve the PHA request to establish success rate payment standard amounts, HUD will consider whether the PHA has a SEMAP overall performance rating of “troubled.” If a PHA does not yet have a SEMAP rating, HUD will consider the PHA's SEMAP certification.
(3) HUD approval of success rate payment standard amounts shall be for all unit sizes in the FMR area. A PHA may opt to establish a success rate payment standard amount for one or more unit sizes in all or a designated part of the PHA jurisdiction within the FMR area.
(g)
(1) Such a PHA may obtain HUD Field Office approval of a payment standard amount based on the 50th percentile
(2) HUD approval of payment standard amounts based on the 50th percentile rent shall be for all unit sizes in the FMR area that had previously been set at the 50th percentile rent pursuant to 24 CFR 888.113(i)(3). A PHA may opt to establish a payment standard amount based on the 50th percentile rent for one or more unit sizes in all or a designated part of the PHA jurisdiction within the FMR area.
(h)
(2) After such review, HUD may, at its discretion, require the PHA to modify payment standard amounts for any unit size on the PHA payment standard schedule. HUD may require the PHA to establish an increased payment standard amount within the basic range.
The revisions read as follows:
(c) * * *
(3) Decrease in the payment standard amount while the family remains assisted in the same unit. The PHA may choose not to reduce the payment standard amount used to calculate the subsidy for a family for as long as the family continues to reside in the unit for which the family is receiving assistance.
(i) If the PHA chooses to reduce the payment standard amount used to calculate such a family's subsidy in accordance with its Administrative Plan, then the initial reduction to the family's payment standard amount may not be applied any earlier than two years following the effective date of the decrease in the payment standard, and then only if the family has received the notice required under paragraph (c)(3)(iii) of this section.
(ii) The PHA may choose to reduce the payment standard amount for the family to the current payment standard amount in effect on the PHA voucher payment standard schedule, or it may reduce the payment standard amount to an amount that is higher than the normally applicable payment standard amount on the PHA voucher payment standard schedule. After an initial reduction, the PHA may further reduce the payment standard amount for the family during the time the family resides in the unit, provided any subsequent reductions continue to result in a payment standard amount that meets or exceeds the normally applicable payment standard amount on the PHA voucher payment standard schedule.
(iii) The PHA must provide the family with at least 12 months' written notice of any reduction in the payment standard amount that will affect the family if the family remains in place. In the written notice, the PHA must state the new payment standard amount, explain that the family's new payment standard amount will be the greater of the amount listed in the current written notice or the new amount (if any) on the PHA's payment standard schedule at the end of the 12-month period, and make clear where the family will find the PHA's payment standard schedule (
(iv) The PHA must administer decreases in the payment standard amount for the family in accordance with the PHA policy as described in the PHA Administrative Plan. The PHA may establish different policies for different designated areas within its jurisdiction (
(4) If the payment standard amount is increased during the term of the HAP contract, the PHA must use the increased payment standard amount to calculate the monthly housing assistance payment for the family beginning no later than the earliest of:
(i) The effective date of an increase in the gross rent that would result in an increase in the family share;
(ii) The family's first regular reexamination; or
(iii) One year following the effective date of the increase in the payment standard amount.
(5) Irrespective of any increase or decrease in the payment standard amount, if the family unit size increases or decreases during the HAP contract term, the new family unit size must be used to determine the payment standard amount for the family beginning at the family's first regular reexamination following the change in family unit size.
(a) * * *
(2) At HUD's request, the PHA must provide the utility allowance schedule and any information or procedures used in preparation of the schedule.
(b)
(ii) In the utility allowance schedule, the PHA must classify utilities and other housing services according to the following general categories: Space heating; air conditioning; cooking; water heating; water; sewer; trash collection (disposal of waste and refuse); other electric; refrigerator (cost of tenant-supplied refrigerator); range (cost of tenant-supplied range); and other specified housing services.
(iii) The PHA must provide a utility allowance for tenant-paid air-conditioning costs if the majority of housing units in the market provide centrally air-conditioned units or there is appropriate wiring for tenant-installed air conditioners.
(iv) The PHA may not provide any allowance for non-essential utility costs, such as costs of cable, satellite television, or wireless internet.
(2)(i) The PHA must maintain an area-wide utility allowance schedule. The area-wide utility allowance schedule must be determined based on the typical cost of utilities and services paid by energy-conservative households that occupy housing of similar size and type in the same locality. In developing the schedule, the PHA must use normal patterns of consumption for the community as a whole and current utility rates.
(ii) The PHA may maintain an area-wide, energy-efficient utility allowance schedule to be used for units that are in a building that meets LEED or Energy Star or other Energy Savings Design standards included in HUD's Utility Schedule Model. HUD may subsequently identify additional Energy Savings Design standards, which will be modified or added through a document published in the
(iii) The PHA may base its utility allowance payments on actual flat fees charged by an owner for utilities that are billed directly by the owner, but only if the flat fee charged by the owner is less than the PHA's applicable utility allowance for the utilities covered by the fee. If an owner charges a flat fee for only some of the utilities, then the PHA must pay a separate allowance for any tenant-paid utilities that are not covered in the flat fee.
(iv) The PHA must state its policy for utility allowance payments in its Administrative Plan and apply it consistently to all similarly situated households.
(e)
(a)
(1) The PHA payment standard, determined in accordance with § 982.503 minus the total tenant payment; or
(2) The family's eligible housing expenses minus the total tenant payment.
(b)
(1) The rent charged by the owner for the manufactured home space.
(2) Charges for the maintenance and management the space owner must provide under the lease.
(3) The monthly payments made by the family to amortize the cost of purchasing the manufactured home established at the time of application to a lender for financing the purchase of the manufactured home if monthly payments are still being made, including any required insurance and property taxes included in the loan payment to the lender.
(i) Any increase in debt service or term due to refinancing after purchase of the home may not be included in the amortization cost.
(ii) Debt service for installation charges incurred by a family may be included in the monthly amortization payments. Installation charges incurred before the family became an assisted family may be included in the amortization cost if monthly payments are still being made to amortize the charges.
(4) The applicable allowances for tenant-paid utilities, as determined under §§ 982.517 and 982.624.
(c)
(1) The PHA pays the owner of the space the lesser of the housing assistance payment or the portion of the monthly rent due to the owner. The portion of the monthly rent due to the owner is the total of:
(i) The actual rent charged by the owner for the manufactured home space; and
(ii) Charges for the maintenance and management the space owner must provide under the lease.
(2) If the housing assistance payment exceeds the portion of the monthly rent due to the owner, the PHA may pay the balance of the housing assistance payment to the family. Alternatively, the PHA may pay the balance to the lender or utility company, in an amount no greater than the amount due for the month to each, respectively, subject to the lender's or utility company's willingness to accept the PHA's payment on behalf of the family. If the PHA elects to pay the lender or the utility company directly, the PHA must notify the family of the amount paid to the lender or the utility company and must pay any remaining balance directly to the family.
(d)
(2) The PHA and owner of the manufactured home space must still execute the HAP contract, and the owner is still responsible for fulfilling all of the owner obligations under the HAP contract, including but not limited to complying with Housing Quality Standards and rent reasonableness requirements. The owner's acceptance of the family's monthly rent payment during the term of the HAP contract serves as the owner's certification to the reasonableness of the rent charged for the space in accordance with § 982.622(b)(4).
(3) If the family and owner agree to the single housing assistance payment, the owner is responsible for collecting the full amount of the rent and other charges under the lease directly from the family. The PHA is not responsible for any amounts owed by the family to the owner and may not pay any claim by the owner against the family.
(a)
(b)
(f)
(g)
(d)
* * *
(3) The PHA must obtain the services of an independent entity, as defined in § 982.4 and in accordance with
(a)
(b)
(c)
(d)
(e)
(b) * * *
(3) The payment standard amount may not be lower than what the payment standard amount was at commencement of homeownership assistance.
(c) * * *
(2) * * *
(vii) Principal and interest on mortgage debt incurred to finance costs for major repairs, replacements or improvements for the home. If a member of the family is a person with disabilities, such debt may include debt incurred by the family to finance costs needed to make the home accessible for such person, if the PHA determines that allowance of such costs as homeownership expenses is needed as a reasonable accommodation so that the homeownership option is readily accessible to and usable by such person, in accordance with parts 8 and 100 of this title; and
(3) * * *
(vii) Principal and interest on debt incurred to finance major repairs, replacements or improvements for the home. If a member of the family is a person with disabilities, such debt may include debt incurred by the family to finance costs needed to make the home accessible for such person, if the PHA determines that allowance of such costs as homeownership expenses is needed as a reasonable accommodation so that the homeownership option is readily accessible to and usable by such person, in accordance with 24 CFR parts 8 and 100.
(f) * * *
(3) Section 982.517 (Utility allowance schedule), except that § 982.517(d) does not apply because the utility allowance is always based on the size of the home bought by the family with homeownership assistance.
42 U.S.C. 1437f and 3535(d).
(c) * * *
(1) In subpart E of part 982: §§ 982.201(e), 982.202(b)(2), and 982.204(d);
(2) * * *
(iii) Section 982.316 (live-in aide) applies to the PBV program;
(6) * * *
(iii) Section 982.517 (utility allowance schedule), except that § 982.517(d) does not apply.
(a)
(b)
(i) A ZIP code area where the rental vacancy rate is less than 4 percent; or
(ii) A ZIP code area where 90 percent of the Small Area FMR is more than 110 percent of the metropolitan area FMR.
(i) The facility is licensed and regulated as an assisted living facility by
(ii) The facility makes available supportive services to assist residents in carrying out activities of daily living; and
(iii) The facility provides separate dwelling units for residents and includes common rooms and other facilities appropriate and available to provide supportive services for the residents.
(i) New construction or rehabilitation work done after the proposal selection date in order for the PHA and owner to execute a PBV HAP contract for newly constructed or rehabilitated housing, or
(ii) One of the following activities undertaken during the term of the PBV HAP contract:
(A) Remodeling that alters the nature or type of housing units in a project,
(B) Reconstruction, or
(C) A substantial improvement in the quality or kind of equipment and materials.
(i) A payment to the owner for rent to owner under the family's lease minus the tenant rent; and
(ii) An additional payment to or on behalf of the family, if the utility allowance exceeds the total tenant payment, in the amount of such excess.
(a)
(2) The PHA enters into a HAP contract with an owner for units in existing housing or in newly constructed or rehabilitated housing.
(3) In the case of new construction or rehabilitation, the housing may be developed pursuant to an Agreement (§ 983.155) between the owner and the PHA. In the Agreement, the PHA agrees to execute a HAP contract after the owner completes the construction or rehabilitation of the units. Alternatively, the housing may be developed without such an Agreement (§ 983.155(e)).
(4) During the term of the HAP contract, the PHA makes housing assistance payments to the owner for units leased and occupied by eligible families.
(b)
(c)
(a)
(1) A PHA is not required to reduce the number of units to which it has committed PBV assistance under an AHAP or HAP if the number of authorized voucher units is subsequently reduced and the number of PBV units consequently exceeds the program limitation.
(2) A PHA that was within the program limit prior to January 18, 2017, and exceeded the program limit on that date due solely to the change in how the program cap is calculated is not required to reduce the number of PBV units under an Agreement or HAP contract.
(3) In the circumstances described in paragraphs (a)(1) and (2) of this section, the PHA may not add units to PBV HAP contracts, or enter into new Agreements or HAP contracts (except for HAP contracts resulting from Agreements entered into before the reduction of authorized units or January 18, 2017, as applicable), unless such units meet the conditions described in paragraph (d) of this section.
(b)
(c)
(d)
(1) The units are part of a HAP contract executed on or after April 18, 2017, or are added on or after that date to any current HAP contract, including a contract entered into prior to April 18, 2017; and
(2) The units fall into at least one of the following categories:
(i) The units are specifically made available to house individuals and families that meet the definition of homeless under section 103 of the McKinney-Vento Homeless Assistance Act (42 U.S.C. 11302), included in 24 CFR 578.3.
(ii) The units are specifically made available to house families that are
(iii) The units provide supportive housing to persons with disabilities or to elderly persons, as defined in 24 CFR 5.403. Supportive housing means that the project makes supportive services available for all of the assisted families in the project and provides a range of services tailored to the needs of the residents occupying such housing. Such supportive services need not be provided by the owner or on site but must be reasonably available to the families receiving PBV assistance in the project.
(iv) The units are located in a census tract with a poverty rate of 20 percent or less, as determined by HUD.
(v) The units are located in an area where vouchers are difficult to use as defined in § 983.3.
(e)
(a) In addition to complying with the requirements of § 982.54, a PHA that has implemented or plans to implement a PBV program must state the PHA policy on all PBV-related matters over which the PHA has policymaking discretion.
(b) With respect to the PHA's PBV program, the PHA Administrative Plan must cover, at a minimum, the following PHA policies:
(1) Regarding the selection of PBV proposals:
(i) A description of the procedures for owner submission of PBV proposals and for PHA selection of PBV proposals (§ 983.51(a));
(ii) Whether the PHA will select, without competition, a proposal for housing assisted under another program that required competitive selection of proposals (§ 983.51(b)(2));
(iii) If the PHA will project-base assistance as part of an initiative to improve, develop, or replace a public housing property or site without following a competitive process, its scope of work for the project or site, and how many units of PBV it plans to add (§ 983.51(c));
(2) A description of the types of services that will be offered to families for a project to qualify for the exception from the project cap and the extent to which such voluntary services will be available (
(3) Regarding site selection standards:
(i) The PHA's standard for deconcentrating poverty and expanding housing and economic opportunities, which must be consistent with the PHA Plan under 24 CFR part 903 (§ 983.55(b)(1));
(ii) The PHA's site selection policy, which must explain how the PHA's site selection procedures promote the PBV goals (§ 983.55(c)(1));
(4) PHA inspection policies, including:
(i) How frequently a PHA will conduct inspections during the term of a HAP contract in order to ensure that the premises are maintained in accordance with HUD's Housing Quality Standards (§ 983.103(d) and (g));
(ii) If the PHA has adopted either the non-life threatening deficiencies option or the alternative inspection option, or both, in accordance with § 982.405(i) and/or § 982.305(f), for initial inspections of existing housing, the PHA policies that will apply to such inspections;
(iii) If the PHA will attach PBV assistance to existing housing, the amount of time that may elapse between the initial inspection of a unit and execution of a HAP contract for that unit;
(5) Whether and under what circumstances the PHA will enter into a PBV HAP contract for new construction or rehabilitation without first entering into an Agreement (§ 983.204(c));
(6) A description of the circumstances under which a PHA will consider amending PBV HAP contracts to substitute or add contract units, and how those circumstances support the goals of the PBV program (§ 983.207(a) and (b));
(7) A description of the PHA's waiting list policies for admission to PBV units. Specifically:
(i) Whether the PHA will establish a separate waiting list for admission to PBV units (§ 983.251(c)(2)(i));
(ii) Whether the PHA will establish separate waiting lists for admission to individual projects or buildings (or for sets of such units), including the names of the project(s) (§ 983.251(c)(2)(iii));
(iii) Any criteria or preferences that the PHA has decided to establish for admission to any PBV units, including the name of the project(s) and the specific criteria or preferences that are to be used by project (§ 983.251(c)(3));
(iv) Whether the PHA will allow for owner-maintained, site-based waiting lists (§ 983.251(c)(7)), including the name of the project(s), the oversight procedures the PHA will use to ensure owner-maintained waiting lists are administered properly and in accordance with program requirements, and the approval process of an owner's tenant selection plan (including any preferences). The owner's tenant-selection plan must be incorporated in the PHA's Administrative Plan;
(v) Whether a family's position on a central PBV waiting list will be affected by the family's rejection of the PBV offer, without good cause, or the owner's rejection of the family (§ 983.251(e)(2));
(8) Regarding tenant screening:
(i) Whether the PHA will screen applicants for family behavior or suitability for tenancy (§ 983.255(a)(1));
(ii) whether the PHA will offer information to an owner about a family that wishes to lease a dwelling unit from the owner, including information about the tenancy history of family members or about drug trafficking and criminal activity by family members (§ 983.255(c)(2));
(9) The PHA's policy on continued housing assistance for a family that occupies a wrong-sized unit or a unit with accessibility features that the family does not require (§ 983.260(b)(2));
(10) Whether the PHA will allow a family that initially qualified for occupancy of a unit excepted based on elderly family status to continue to reside in the unit where, through circumstances beyond the control of the family, the elderly family member no longer resides in the unit (§ 983.262(d));
(11) Whether the PHA will establish site-specific utility allowances at any of its PBV-assisted properties (§ 983.301);
(12) For an owner that wishes to request a rent increase, the length of the required notice period and the form in which such request must be submitted (§ 983.302(b)(2));
(13) Whether the PHA will employ a PBV HAP contract that provides for vacancy payments to an owner, for what duration of time such payments will be made, and the form and manner in which requests for such vacancy payments must be made (§ 983.352(b)(1) and (4));
(14) Whether utility reimbursements will be paid to the family or to the utility supplier (§ 983.353(d)(2);
(15) Which option the PHA will select if a unit loses its excepted status (§ 983.262(f)); and
(16) If the PHA is employing SAFMRs in the operation of its Housing Choice Voucher program, whether it will apply
(a)
(1) The regulations for the PBC program at 24 CFR part 983, codified as of May 1, 2001, and contained in 24 CFR part 983 revised as of April 1, 2002; and
(2) Section 8(d)(2) of the 1937 Act, as in effect before October 21, 1998 (the date of enactment of Title V of Public Law 105-276, the Quality Housing and Work Responsibility Act of 1998, codified at 42 U.S.C. 1437
(b)
(1)
(ii)
(A) The term of the HAP contract for PBC contracts renewed as PBV contracts shall be consistent with § 983.205.
(B) A PHA must make the determination, within one year before expiration of a PBC HAP contract, that renewal of the contract under the PBV program is appropriate to continue providing affordable housing for low-income families.
(C) The renewal of PBC assistance as PBV assistance is effectuated by the execution of a PBV HAP contract addendum as prescribed by HUD and a PBV HAP contract for existing housing.
(2)
(i)
(ii)
(B) The Lead-based Paint Poisoning Prevention Act (42 U.S.C. 4821-4846), the Residential Lead-based Paint Hazard Reduction Act of 1992 (42 U.S.C. 4851-4856), and implementing regulations at 24 CFR part 35, subparts A, B, H, and R, apply to the PBV program.
(iii)
(c)
(a) The PHA may provide PBV assistance for newly constructed and rehabilitation housing only in accordance with HUD subsidy layering regulations (24 CFR 4.13) and other requirements.
(b) The subsidy layering requirements are not applicable to existing housing.
(c) For the subsidy layering requirements related to development activity to place newly constructed or rehabilitated housing under a HAP contract, see § 983.153(b).
(d)(1) For newly constructed or rehabilitated housing under a HAP contract, the owner must disclose to the PHA, in accordance with HUD requirements, information regarding any additional related assistance from the Federal Government, a State, or a unit of general local government, or any agency or instrumentality thereof, that is made available with respect to the contract units during the term of the HAP contract. Such related assistance includes but is not limited to any loan, grant, guarantee, insurance, payment, rebate, subsidy, credit, tax benefit, or any other form of direct or indirect assistance.
(2) A subsidy layering review is required to determine if the additional related assistance in paragraph (d)(1) of this section would result in excess public assistance to the project.
(3) Housing assistance payments must not be more than is necessary, as determined in accordance with HUD requirements, to provide affordable housing after taking account of such related assistance. The PHA must adjust in accordance with HUD requirements, the amount of the housing assistance payments to the owner to compensate in whole or in part for such related assistance.
(a)
(b)
(1) The PHA may issue a Request for Proposals (RFP), selecting a PBV proposal through a competition. The PHA's RFP may not limit proposals to a single site or impose restrictions that explicitly or practically preclude owner submission of proposals for PBV housing on different sites.
(2) The PHA may select, without a PBV competition, a proposal for housing assisted under a Federal, State, or local
(c)
(2) A PHA may select a project formerly assisted under the public housing program in which a PHA has no ownership interest or control over without regard to a competitive process, or a project that is replacing the public housing project, provided:
(i) The public housing project is either still in the public housing inventory or had been removed from the public housing inventory through any available legal removal tool within 5 years of the proposal selection date;
(ii) The PHA that owned or owns the public housing project does not administer the HCV program; and
(iii) The PBV assistance was specifically identified as replacement housing for the impacted public housing residents as part of the public housing demolition/disposition application, voluntary conversion application, or any other application process submitted to and approved by HUD to remove the public housing project from the public housing inventory.
(d)
(e)
(2) The PHA may enter into a HAP contract for existing housing if:
(i) The project fully or substantially complies with the HQS on the proposal selection date, which the PHA must determine via inspection,
(ii) If applicable, the project meets the environmental review requirements at § 983.153(a), and
(iii) The project meets the initial inspection requirements in accordance with § 983.103(b).
(f)
(g)
(2) For properties selected in accordance with § 983.51(c), the date of proposal selection is the date of the PHA's board resolution approving the project-basing of assistance at the specific project.
(h)
(i)
(j)
(k)
(a)
(1) Shared housing;
(2) Units on the grounds of a penal, reformatory, medical, mental, or similar public or private institution;
(3) Nursing homes or facilities providing continuous psychiatric, medical, nursing services, board and care, or intermediate care. However, the PHA may attach PBV assistance for a dwelling unit in an assisted living facility that provides home health care services such as nursing and therapy for residents of the housing;
(4) Units that are owned or controlled by an educational institution or its affiliate and are designated for occupancy by students of the institution;
(5) Manufactured homes; and
(6) Transitional Housing.
(b)
(c)
(d)
(1) Units for which rehabilitation or new construction began after proposal submission but prior to execution of an Agreement (if applicable) do not subsequently qualify as existing housing.
(2) Units that were newly constructed or rehabilitated in violation of program requirements also do not qualify as existing housing.
A PHA may not attach or pay PBV assistance to units in any of the following types of subsidized housing:
(a) A public housing dwelling unit;
(b) A unit subsidized with any other form of Section 8 assistance (tenant-based or project-based);
(c) A unit subsidized with any governmental rent subsidy (a subsidy that pays all or any part of the rent);
(d) A unit subsidized with any governmental subsidy that covers all or any part of the operating costs of the housing;
(e) A unit subsidized with Section 236 rental assistance payments (12 U.S.C. 1715z-1). However, the PHA may attach assistance to a unit subsidized with Section 236 interest reduction payments;
(f) A unit subsidized with rental assistance payments under Section 521 of the Housing Act of 1949, 42 U.S.C. 1490a (a Rural Housing Service Program). However, the PHA may attach assistance for a unit subsidized with Section 515 interest reduction payments (42 U.S.C. 1485);
(g) A Section 202 project for non-elderly persons with disabilities (assistance under Section 162 of the Housing and Community Development Act of 1987, 12 U.S.C. 1701q note);
(h) Section 811 project-based supportive housing for persons with disabilities (42 U.S.C. 8013);
(i) Section 202 supportive housing for the elderly (12 U.S.C. 1701q);
(j) A Section 101 rent supplement project (12 U.S.C. 1701s);
(k) A unit subsidized with any form of tenant-based rental assistance (as defined at 24 CFR 982.1(b)(2)) (
(l) A unit with any other duplicative federal, state, or local housing subsidy, as determined by HUD or by the PHA in accordance with HUD requirements. For this purpose, “housing subsidy” does not include the housing component of a welfare payment; a social security payment; or a federal, state, or local tax concession (such as relief from local real property taxes).
(a)
(b)
(1) The project is located in a census tract with a poverty rate of 20 percent or less, as determined by HUD, or
(2) The project is located in an area where vouchers are difficult to use as defined in § 983.3.
(c)
(i) Units exclusively serving elderly families, as such term is defined in 24 CFR 5.403.
(ii) Units exclusively made available to households eligible for supportive services available to the residents of the project assisted with project-based voucher assistance. The project must make supportive services available to all PBV assisted families in the project, but the family may not be required to participate in the services as a condition of living in the excepted unit. Such supportive services need not be provided by the owner or on-site, but must be reasonably available to the families receiving PBV assistance in the project and designed to help the families in the project achieve self-sufficiency or live in the community as independently as possible. The PHA must include in its Administrative Plan the types of services offered to families that will enable the units to qualify under the exception and the extent to which such services will be provided (
(2) Units covered by a PBV HAP contract will not count toward the project cap if the units meet the requirements of § 983.59.
(3)(i) The PBV HAP contract must specify, and the owner must set aside, the number of excepted units made available for occupancy by families who qualify for the exception.
(ii) For a unit to be considered excepted it must be occupied by a family who qualifies for the exception.
(d)
(2) The owner and the PHA may mutually agree to change the requirements for excepted units under the HAP contract to comply with the excepted unit requirements in subsection (c) of this section. However, any change to the HAP contract may only be made if the change does not jeopardize an assisted family's eligibility for continued assistance at the project.
(e)
(f)
(a)
(b)
(1) Project-based assistance for housing at the selected site is consistent with the goal of deconcentrating poverty and expanding housing and economic opportunities. The standard for deconcentrating poverty and expanding housing and economic opportunities must be consistent with the PHA Plan under 24 CFR part 903 and the PHA Administrative Plan. In developing the standards to apply in determining whether a proposed PBV development will be selected, a PHA must consider the following:
(i) Whether the census tract in which the proposed PBV development will be located is in a HUD-designated Enterprise Zone, Economic Community, or Renewal Community;
(ii) Whether a PBV development will be located in a census tract where the concentration of assisted units will be or has decreased as a result of public housing demolition;
(iii) Whether the census tract in which the proposed PBV development will be located is undergoing significant revitalization;
(iv) Whether state, local, or federal dollars have been invested in the area that has assisted in the achievement of the statutory requirement;
(v) Whether new market rate units are being developed in the same census tract where the proposed PBV development will be located and the likelihood that such market rate units will positively impact the poverty rate in the area;
(vi) If the poverty rate in the area where the proposed PBV development will be located is greater than 20 percent, the PHA should consider whether in the past five years there has been an overall decline in the poverty rate;
(vii) Whether there are meaningful opportunities for educational and economic advancement in the census tract where the proposed PBV development will be located.
(2) The site is suitable from the standpoint of facilitating and furthering full compliance with the applicable provisions of Title VI of the Civil Rights Act of 1964 (42 U.S.C. 2000d-2000d(4)) and HUD's implementing regulations at 24 CFR part 1; Title VIII of the Civil Rights Act of 1968 (42 U.S.C. 3601-3629); and HUD's implementing regulations at 24 CFR parts 100 through 199; Executive Order 11063 (27 FR 11527; 3 CFR, 1959-1963 Comp., p. 652) and HUD's implementing regulations at 24 CFR part 107. The site must also be suitable from the standpoint of facilitating and furthering full compliance with the applicable provisions of the Americans with Disabilities Act and implementing regulations, and Section 504 of the Rehabilitation Act of 1973 (29 U.S.C. 794) and HUD's implementing regulations at 24 CFR part 8, including meeting the Section 504 site selection requirements described in 24 CFR 8.4(b)(5).
(3) The site meets the HQS site standards at 24 CFR 982.401(l).
(c)
(2) The site selection policy must explain how the PHA's site selection procedures promote the PBV goals.
(3) The PHA must select PBV sites in accordance with the PHA's site selection policy in the PHA administrative plan.
(d)
(1) Be adequate in size, exposure, and contour to accommodate the number and type of units proposed, and adequate utilities and streets must be available to service the site. (The existence of a private disposal system and private sanitary water supply for the site, approved in accordance with law, may be considered adequate utilities.)
(2) Promote greater choice of housing opportunities and avoid undue concentration of assisted persons in areas containing a high proportion of low-income persons.
(3) Be accessible to social, recreational, educational, commercial, and health facilities and services and other municipal facilities and services that are at least equivalent to those typically found in neighborhoods consisting largely of unassisted, standard housing of similar market rents.
(4) Be so located that travel time and cost via public transportation or private automobile from the neighborhood to places of employment providing a range of jobs for lower-income workers is not excessive. While it is important that housing for the elderly not be totally isolated from employment opportunities, this requirement need not be adhered to rigidly for such projects.
(e)
(1) The site must be adequate in size, exposure, and contour to accommodate the number and type of units proposed, and adequate utilities (water, sewer, gas, and electricity) and streets must be available to service the site.
(2) The site must not be located in an area of minority concentration, except as permitted under paragraph (e)(3) of this section, and must not be located in a racially mixed area if the project will cause a significant increase in the proportion of minority to non-minority residents in the area.
(3) A project may be located in an area of minority concentration only if:
(i) Sufficient, comparable opportunities exist for housing for minority families in the income range to be served by the proposed project outside areas of minority concentration (see paragraphs (e)(3)(iii) through (v) of this section for further guidance on this criterion); or
(ii) The project is necessary to meet overriding housing needs that cannot be met in that housing market area (see paragraph (e)(3)(vi) of this section for further guidance on this criterion).
(iii) As used in paragraph (e)(3)(i) of this section, “sufficient” does not require that in every locality there be an equal number of assisted units within and outside of areas of minority concentration. Rather, application of this standard should produce a reasonable distribution of assisted units each year, that, over a period of several years, will approach an appropriate balance of housing choices within and outside areas of minority concentration. An appropriate balance in any jurisdiction must be determined in light of local conditions affecting the range of housing choices available for low-income minority families and in relation to the racial mix of the locality's population.
(iv) Units may be considered “comparable opportunities,” as used in paragraph (e)(3)(i) of this section, if they have the same household type (elderly, disabled, family, large family) and tenure type (owner/renter); require approximately the same tenant contribution towards rent; serve the same income group; are located in the same housing market; and are in standard condition.
(v) Application of this sufficient, comparable opportunities standard involves assessing the overall impact of HUD-assisted housing on the availability of housing choices for low-income minority families in and outside areas of minority concentration, and must take into account the extent to which the following factors are present, along with other factors relevant to housing choice:
(A) A significant number of assisted housing units are available outside areas of minority concentration.
(B) There is significant integration of assisted housing projects constructed or rehabilitated in the past 10 years, relative to the racial mix of the eligible population.
(C) There are racially integrated neighborhoods in the locality.
(D) Programs are operated by the locality to assist minority families that wish to find housing outside areas of minority concentration.
(E) Minority families have benefited from local activities (
(F) A significant proportion of minority households has been successful in finding units in non-minority areas under the tenant-based assistance programs.
(G) Comparable housing opportunities have been made available outside areas of minority concentration through other programs.
(vi) Application of the “overriding housing needs” criterion, for example, permits approval of sites that are an integral part of an overall local strategy for the preservation or restoration of the immediate neighborhood and of sites in a neighborhood experiencing significant private investment that is demonstrably improving the economic character of the area (a “revitalizing area”). An “overriding housing need,” however, may not serve as the basis for determining that a site is acceptable, if the only reason the need cannot otherwise be feasibly met is that discrimination on the basis of race, color, religion, sex, national origin, age, familial status, or disability renders sites outside areas of minority concentration unavailable or if the use of this standard in recent years has had the effect of circumventing the obligation to provide housing choice.
(4) The site must promote greater choice of housing opportunities and avoid undue concentration of assisted persons in areas containing a high proportion of low-income persons.
(5) The neighborhood must not be one that is seriously detrimental to family life or in which substandard dwellings or other undesirable conditions predominate, unless there is actively in progress a concerted program to remedy the undesirable conditions.
(6) The housing must be accessible to social, recreational, educational, commercial, and health facilities and services and other municipal facilities and services that are at least equivalent to those typically found in neighborhoods consisting largely of unassisted, standard housing of similar market rents.
(7) Except for new construction, housing designed for elderly persons, travel time, and cost via public transportation or private automobile from the neighborhood to places of employment providing a range of jobs for lower-income workers, must not be excessive.
(a)(1) HUD environmental regulations at 24 CFR parts 50 and 58 apply to activities under the PBV program, except as provided in paragraph (a)(2) of this section.
(2) Existing housing is exempt from environmental review only if the project in which the units are located has previously received federal assistance and has undergone a federal environmental review under the applicable federal program. This exemption does not apply if a federal environmental review is required by law or regulation relating to funding other than PBV housing assistance payments.
(b) Under 24 CFR part 58, a unit of general local government, a county or a state (the “responsible entity” or “RE”) is responsible for the federal environmental review under the National Environmental Policy Act of 1969 (42 U.S.C. 4321
(c) For any project that is not exempt from an environmental review, if such a review has not been conducted prior to the proposal selection date, then the PHA's written notice of proposal selection must state that the selection is subject to completion of a favorable environmental review and that the project site may be rejected based on the results of the environmental review.
(d) When an environmental review is required, a PHA may not enter into an Agreement or HAP contract with an owner, amend a HAP contract to add units pursuant to the authority at § 983.207(b)(3), or execute a PHA certification under § 983.204(d)(2), and the PHA, the owner, and its contractors may not acquire, rehabilitate, convert, lease, repair, dispose of, demolish, or construct real property or commit or expend program or local funds for these activities, until one of the following occurs:
(1) The responsible entity has determined that the project to be assisted is exempt under 24 CFR 58.34 or is categorically excluded and not subject to compliance with environmental laws under 24 CFR 58.35(b);
(2) The responsible entity has completed the environmental review procedures required by 24 CFR part 58, and HUD has approved the PHA's Request for Release of Funds and Certification (form HUD-7015.15), as defined in § 983.3(b); or
(3) HUD has performed an environmental review under 24 CFR part 50 and has notified the PHA in writing of environmental approval of the site.
(e) HUD will not issue a Letter to Proceed or form HUD-7015.16 to the PHA if any of the activities described in paragraph (d) of this section have already occurred.
(f) Any mitigating measures required by HUD pursuant to a HUD review under 24 CFR part 50 must be included in HUD's written environmental approval of the site.
(g) The PHA must supply all available, relevant information necessary for the RE (or HUD, if applicable) to perform any required environmental review for any site.
(a)
(b)
(1) The independent entity must determine rent to owner, including the reasonable rent and the OCAF adjustment, in accordance with §§ 983.301 through 983.305.
(2) The term of the HAP contract and any HAP contract renewal for PHA-owned units must comply with the requirements of § 983.205 and must be agreed upon by the PHA and the independent entity.
(3) The independent entity must perform unit inspections in accordance with § 983.103(f).
(4) The PHA must carry out development activity under § 983.152 or rehabilitation of units subject to a HAP contract under § 983.153 in accordance with the applicable requirements and must submit evidence to the independent entity that work has been completed in accordance with such requirements.
(c)
(2) The PHA, and the independent entity, may not charge the family any fee for the services provided by the independent entity.
Before a PHA issues a request for proposals in accordance with § 983.51(b)(1), makes a selection based on a previous competition in accordance with § 983.51(b)(2), amends an existing HAP contract to add units in accordance with § 983.207(b), or attaches assistance without competition in accordance with § 983.51(c), it must calculate the number of authorized voucher units that it is permitted to project-base and determine the amount of budget authority that it has available for project-basing in accordance with HUD requirements.
(a)
(b)
(1) The units have received one of the following forms of HUD assistance:
(i) Public Housing Capital or Operating Funds (section 9 of the 1937 Act).
(ii) Project-Based Rental Assistance (section 8 of the 1937 Act). Project-based rental assistance under section 8 includes the section 8 moderate rehabilitation program, including the single-room occupancy (SRO) program.
(iii) Housing For the Elderly (section 202 of the Housing Act of 1959).
(iv) Housing for Persons With Disabilities (section 811 of the Cranston-Gonzalez National Affordable Housing Act).
(v) The Rent Supplement (Rent Supp) program (section 101 of the Housing and Urban Development Act of 1965).
(vi) Rental Assistance Program (RAP) (section 236(f)(2) of the National Housing Act).
(vii) Flexible Subsidy Program (section 201 of the Housing and Community Development Amendments Act of 1978).
(2) The units have been subject to a federally required rent restriction under one of the following programs:
(i) The Low Income Housing Tax Credit program (26 U.S.C. 42).
(ii) Section 515 Rural Rental Housing Loans (42 U.S.C. 1485).
(iii) The following HUD programs:
(A) Section 236.
(B) Section 221(d)(3) or (d)(4) Below Market Interest Rate.
(iii) Housing For the Elderly (section 202 of the Housing Act of 1959).
(iv) Housing for Persons With Disabilities (section 811 of the Cranston-Gonzalez National Affordable Housing Act).
(v) Flexible Subsidy Program (section 201 of the Housing and Community Development Amendments Act of 1978).
(c)
(d)
(1) Former residents of the original project must be provided with a selection preference that provides the residents with the right of first occupancy at the PBV new construction project when it is ready for occupancy.
(2) Prior to the demolition of the original project, the PBV new construction project must have been identified as replacement housing for that original project as part of a documented plan for the redevelopment of the site.
(e)
(e) * * * However, the PHA may elect to establish additional requirements for quality, architecture, or design of PBV housing.
(a)
(b)
(c)
(2)
(ii) After completing the inspections and determining there are no life-threatening deficiencies, for any unit with non-life threatening deficiencies, the PHA provides both the owner and the family (any eligible in-place family (§ 983.251(d)) or any family referred from the PBV waiting list being offered that unit) with a list of the non-life-threatening deficiencies identified by the initial HQS inspection and, should the owner not complete the repairs within 30 days, the maximum amount of time the PHA will withhold HAP before abating assistance. The PHA must also inform the family that if the family accepts the unit and the owner fails to make the repairs within the cure period, which may not exceed 180 days from the effective date of the HAP contract, the PHA will remove the unit from the HAP contract, and the family will be issued a voucher to move to another unit in order to receive voucher assistance. The family referred from the waiting list may choose to decline the unit and remain on the waiting list. An eligible in-place family may decline the unit, and the PHA must issue the family a tenant-based voucher to move from the unit in that circumstance.
(iii) If the family decides to lease the unit, the family enters into the assisted lease with the owner. The PHA commences making assistance payments to the owner.
(iv) The owner must correct the deficiencies within 30 days from the effective date of the HAP contract. If the owner fails to correct the deficiencies within the 30-day cure period, the PHA must withhold the housing assistance payments for the unit until the owner makes the repairs and the PHA verifies the correction. Once the deficiencies are corrected, the PHA may use the withheld housing assistance payments to make payments for the period that payments were withheld.
(iv) The PHA must state in its Administrative Plan the maximum amount of time it will withhold payments before abating payments, and the number of days after which the PHA will either terminate the PBV HAP contract or remove the unit from HAP contract as a result of the owner's failure to correct the deficiencies, which may not exceed 180 days from the effective date of the HAP contract; and
(vi) The owner may not terminate the tenancy of a family because of the withholding or abatement of assistance payments. During any period the assistance is abated under the NLT option, the family may terminate the tenancy by notifying the owner and the PHA, and the PHA must provide the family with tenant-based assistance. In the case of an in-place family, the family may also choose to terminate the tenancy during the withholding period following the 30-day cure period, and the PHA must offer the family either another assisted unit in the PBV project that fully complies with HQS or tenant-based assistance.
(3)
(i) After the PHA determines the project meets the definition of existing housing in accordance with paragraph (a) of this section, the PHA execute the HAP contract for the project if the project has been inspected in the previous 24 months where the alternative inspection meets the requirements of § 982.406, as opposed to re-inspecting the project to make such all units fully comply with the Housing Quality Standards before executing the HAP contract, if the owner agrees to the use of the alternative inspection option. If the PHA has established and the unit is covered by both the NLT option under paragraph (c)(2) of this section and the alternative inspections option for the initial HQS inspection, see paragraph (c)(4) of this section.
(ii) The PHA notifies all families (any eligible in-place family (§ 983.251(d)) or any family referred from the PBV waiting list being offered that unit) that will occupy the unit before the PHA conducts the HQS inspection that the alternative inspection option is in effect for the project. The PHA must provide each family with the PHA list of HQS deficiencies that are considered life-threatening under § 982.401(o) as part of this notification. A family on the waiting list may decline to accept the unit due to unit conditions and retain its place on the PBV waiting list.
(iii) The PHA must conduct an HQS inspection within 30 days of the project selection date. If the family reports a deficiency to the PHA prior to the PHA's inspection, the PHA must inspect the unit within the time period required under § 983.103(f) or within 30 days of the effective date of the HAP contract, whichever time period ends first.
(iv) The PHA may not make housing assistance payments to the owner until the PHA has inspected all the units under the HAP contract and determined they meet Housing Quality Standards.
(v) The PHA may commence housing assistance payments to the owner and make housing assistance payments retroactive to the effective date of the HAP contract only after the assisted units pass the PHA's HQS inspection. If any unit does not pass the HQS inspection, the PHA may not make housing assistance payments to the owner until all the deficiencies have been corrected. If a defect is life threatening, the owner must correct the defect within 24 hours of notification from the PHA. For other defects, the owner must correct the defect within no more than 30 calendar days (or any PHA-approved extension) of notification from the PHA. If the owner corrects the deficiencies within the required cure period, the PHA makes the housing assistance payments retroactive to the effective date of the HAP contract.
(vi) The PHA establishes in the Administrative Plan the maximum amount of time it will withhold payments if the owner does not correct the deficiencies within the required cure period before abating payments, and the date by which the PHA will either remove the unit from the HAP contract or terminate the HAP contract for the owner's failure to correct the deficiencies, which may not exceed 180 days from the effective date of the HAP contract.
(vii) If the owner fails to make the repairs within the applicable time
(viii) The owner may not terminate the tenancy of a family because of the withholding or abatement of assistance payments. During the abatement period, a family may terminate the tenancy by notifying the owner, and the PHA must provide the family with tenant-based assistance. The PHA must state in its Administrative Plan the number of days after which the PHA will terminate the HAP contract for the owner's failure to correct the deficiencies, which may not exceed 180 days from the effective date of the HAP contract.
(4)
(i) If the owner agrees to both the NLT option and the alternative inspection option, then the PHA notifies all families (any eligible in-place family (§ 983.251(d)) or any family referred from the PBV waiting list that will occupy the unit before the PHA conducts the HQS inspection) that both the NLT option and the alternative inspection option will be used for the family's unit. As part of this notification, the PHA must provide the family with the PHA's list of HQS deficiencies that are considered life-threatening under 24 CFR 982.401(o). A family on the waiting list may decline to move into a unit due to unit conditions and retain its place on the PBV waiting list.
(ii) The PHA executes the HAP contract with the owner on the basis of the alternative inspection. The PHA must conduct an HQS inspection within 30 days after the date of project selection. If the family reports a deficiency to the PHA during this interim period, the PHA must inspect the unit within the time period required under 24 CFR 983.103(f) or within 30 days of the project selection date, whichever time period ends first.
(iii) The PHA may not make housing assistance payments to the owner until the PHA has inspected all the assisted units.
(iv) If none of the units have any life-threatening deficiencies, the PHA commences payments and makes retroactive payments to the effective date of the HAP contract for all the assisted units. For any unit that failed the PHA's HQS inspection but has no life-threatening deficiencies, the owner must correct the deficiencies within no more than 30 days from the effective date of the HAP contract. If the owner fails to correct the deficiencies within the 30-day cure period, the PHA must withhold the housing assistance payments for that unit until the owner makes the repairs and the PHA verifies the correction. Once the unit is in compliance with HQS, the PHA may use the withheld housing assistance payments to make payments for the period that payments were withheld.
(v) If any units have life-threatening deficiencies, the PHA may not commence making housing assistance payments to the owner until all the HQS deficiencies (life-threatening and non-life threatening) have been corrected. The owner must correct all life-threatening deficiencies within no more than 24 hours. For other defects, the owner must correct the defect within no more than 30 calendar days (or any PHA-approved extension). If the owner corrects the all the deficiencies within the required cure period, the PHA makes the housing assistance payments retroactive to the effective date of the HAP contract.
(vi) The owner may not terminate the tenancy of the family because of the withholding or abatement of assistance payments. During the period the assistance is abated, a family may terminate the tenancy by notifying the owner, and the PHA must provide the family with tenant-based assistance. The PHA must establish in its Administrative Plan:
(A) The maximum amount of time it will withhold payments if the owner fails to correct the deficiencies within the required cure period before abating payments; and
(B) The number of days after which the PHA will terminate the HAP contract for the owner's failure to correct the deficiencies, which may not exceed 180 days from the effective date of the HAP contract.
(d)
(e)
(2) If more than 20 percent of the sample of inspected contract units in a building fail the initial inspection, then the PHA must reinspect 100 percent of the contract units in the building.
(3) A PHA may also use the procedures applicable to HCV units in 24 CFR 982.406.
(f)
(2) The PHA must conduct follow-up inspections needed to determine if the owner (or, if applicable, the family) has corrected an HQS violation, and must conduct inspections to determine the basis for exercise of contractual and other remedies for owner or family violation of the HQS. (Family HQS obligations are specified in 24 CFR 982.404(b).)
(3) In conducting PHA supervisory quality control HQS inspections, the PHA should include a representative sample of both tenant-based and project-based units.
(g)
(2) The independent entity must furnish a copy of each inspection report to the PHA.
(3) The PHA must take all necessary actions in response to inspection reports from the independent entity, including exercise of contractual remedies for violation of the HAP contract by the PHA owner.
(h)
(i)
This subpart applies to development activity, as defined in § 983.3, under the PBV program.
(a)
(1) Placing a project under a HAP contract (new construction or rehabilitation), or
(2) Adding previously unassisted units in the project to the HAP contract in accordance with § 983.207(b)(3).
(b)
(2) Development activity undertaken in order to add previously unassisted units in the project to the HAP contract must comply with the requirements of §§ 983.153(e), (f), and (g); 983.155; and 983 156. Section 983.154, Development agreement, is not applicable if the development activity is undertaken to add previously unassisted units in the project to the HAP contract.
(a)
(b)
(2) When a subsidy layering review is required, it must occur before a PHA commits to provide assistance to a project. Specifically, the PHA may not enter into an Agreement or HAP contract with an owner until HUD or a housing credit agency approved by HUD has conducted any required subsidy layering review and determined that the PBV assistance is in accordance with HUD subsidy layering requirements.
(3) If a PHA is undertaking development activity to place a project under a HAP contract (new construction or rehabilitation) at § 983.152(a)(1), a further subsidy layering review is not required if HUD's designee has conducted a review in accordance with HUD's PBV subsidy layering review guidelines and that review included a review of PBV assistance.
(4) The HAP contract must contain the owner's certification that the project has not received and will not receive (before or during the term of the HAP contract) any public assistance for acquisition, development, or operation of the housing other than assistance disclosed in the subsidy layering review in accordance with HUD requirements. A subsidy layering review is required for newly constructed or rehabilitated housing under a HAP contract that receives additional assistance, as described in § 983.12(d).
(5) Existing housing is exempt from subsidy layering requirements.
(c)
(2) In the case of development involving nine or more contract units (whether or not completed in stages), the owner and the owner's contractors and subcontractors must pay Davis-Bacon wages to laborers and mechanics employed in development of the housing.
(3) The owner and the owner's contractors and subcontractors must comply with the Contract Work Hours and Safety Standards Act, Department of Labor regulations in 29 CFR part 5, and other applicable federal labor relations laws and regulations. The PHA must monitor compliance with labor standards.
(4) For any project to which labor standards apply, the PHA's written notice of proposal selection must state that any construction contracts must incorporate a Davis-Bacon contract clause and the current applicable prevailing wage determination.
(d)
(e)
(f)
(g)
(i) The location of the new construction or substantial rehabilitation makes installation of broadband infrastructure infeasible;
(ii) The cost of installing broadband infrastructure would result in a fundamental alteration in the nature of its program or activity or in an undue financial burden; or
(iii) The structure of the housing to be substantially rehabilitated makes installation of broadband infrastructure infeasible.
(2) A description of any required work item resulting from this requirement must be included in the Agreement (if applicable), as specified in § 983.55(d)(9).
(h)
(2) An owner must disclose any possible conflict of interest that would be a violation of the Agreement (if applicable), the HAP contract, or HUD regulations.
(a)
(b)
(c)
(1) In the case of new construction, development activity begins with excavation or site preparation (including clearing of the land);
(2) In the case of rehabilitation, development activity begins with the physical commencement of rehabilitation activity on the housing.
(d)
(1) Site;
(2) Location of contract units on site;
(3) Number of contract units by area (square footage) and number of bedrooms and bathrooms;
(4) Services, maintenance, or equipment to be supplied by the owner without charges in addition to the rent to owner;
(5) Utilities available to the contract units, including a specification of utility services to be paid by the owner (without charges in addition to rent) and utility services to be paid by the tenant;
(6) The Agreement must include a description of any required work item necessary to comply with the accessibility requirements of § 983.153(f).
(7) If the requirement at § 983.153(g) to install broadband infrastructure applies, then the Agreement must include a description of any required work item resulting from this requirement.
(8) Estimated initial rents to owner for the contract units;
(9) Description of the work to be performed under the Agreement.
(i) If the Agreement is for new construction, then the work description must include the working drawings and specifications.
(ii) If the Agreement is for rehabilitation, then the work description must include the rehabilitation work write-up and, where determined necessary by the PHA, specifications and plans.
(e)
(1) A PHA that will not require the use of an Agreement must state this in its Administrative Plan.
(2) The following conditions apply:
(i) The owner of the project must be able to document its compliance with the requirements of § 983.153 from the date of proposal submission (for housing subject to competitive selection) or from the date of the PHA's board resolution approving the project-basing of assistance at the project (for housing excepted from competitive selection);
(ii) Prior to selecting the project, the PHA must confirm that, from the point of proposal submission (for housing subject to competitive selection) or from the date of the PHA's board resolution approving the project-basing of assistance at the project (for housing excepted from competitive selection), the owner has complied with the requirements of § 983.153.
(3) Following the date of proposal selection, the PHA and owner may enter into an Agreement but are not required to do so.
The owner must submit evidence and certify to the PHA, in the form and manner required by the PHA, that development activity under § 983.152 or development activity undertaken on units under a HAP contract under § 983.157 has been completed, and that all such work was completed in accordance with the applicable requirements.
(a)
(b)
(a)
(b)
(1) The equal opportunity employment opportunity requirements at § 982.153(e) shall apply, as applicable.
(2) The accessibility standards at § 983.153(f) shall apply, as applicable.
(3) The broadband infrastructure requirements at § 983.153(g) shall apply, as applicable.
(c)
(2) Section § 983.154, Development agreement, does not apply to development activity undertaken for units that are currently under a HAP contract.
(3) Section § 983.156, PHA acceptance of completed units, does not apply to development activity undertaken for units that are currently under a HAP contract.
(f) Features provided to comply with program accessibility requirements of Section 504 of the Rehabilitation Act of 1973 (29 U.S.C. 794) and implementing regulations at 24 CFR part 8, the Fair Housing Act, and the Americans with Disabilities Act, as applicable;
(g) The HAP contract term;
(h) The number of units in any project that will exceed the 25 percent per-project project cap (as described in § 983.54), which will be set-aside for occupancy by families who qualify for an exception (as described in § 983.54);
(i) The initial rent to owner (for the first 12 months of the HAP contract term); and
(j) Whether the PHA has elected not to reduce rents below the initial rent to owner in accordance with 24 CFR 983.302(c)(2).
(a)
(b)
(c)
(d)
(1)
(A) A non-profit affiliate or instrumentality of the PHA;
(B) A limited liability corporation;
(C) A limited partnership;
(D) A corporation; or
(E) Any other legally acceptable entity recognized under State law.
(ii) In cases where the independent entity, as defined in § 982.4, is required to notify the PHA of a determination, the independent entity may notify the PHA or the separate legal entity, or both.
(2)
(ii) The PHA executed certification serves as the equivalent of the PBV HAP contract for the PHA-owned PBV project.
(iii) The PHA must obtain the services of an independent entity to perform the required PHA functions in accordance with § 983.57(b) before signing the certification.
(iv) The PHA may not use the PHA-owned certification if the PHA-owned PBV project is owned by a separate legal entity from the PHA (
(a)
(b)
(2) The PHA and owner may agree to extend the contract term multiple times during the term of the HAP contract,
(3) The PHA and owner may subsequently agree to extend the term of the contract beyond 20 years from the end of the initial term, but only if the following conditions are met:
(i) No earlier than 24 months prior to the expiration of the HAP contract, the PHA determines that the extension is appropriate to continue providing affordable housing for low-income families or to expand housing opportunities; and
(ii) The term of the new extension may not exceed 20 years.
(4) Any extension of the term must be on the form and subject to the conditions prescribed by HUD at the time of the extension.
(c)
(a)
(2) Not less than one year before termination of a PBV or PBC HAP contract, the owner must notify the PHA and assisted tenants of the termination.
(3) The term “termination” for applicability of this notice requirement means the expiration of the HAP contract or an owner's refusal to renew the HAP contract.
(4) If an owner fails to provide the required notice, the owner must permit the tenants in assisted units to remain in their units for the required notice period with no increase in the tenant portion of their rent, and with no eviction as a result of an owner's inability to collect an increased tenant portion of rent.
(5) An owner and PHA may agree to extend the terminating contract for a period of time sufficient to provide tenants with the required notice, under such terms as HUD may require.
(b)
(1) The unit must comply with HUD's Housing Quality Standards;
(2) The PHA must determine or have determined that the rent for the unit is reasonable;
(3) The family must pay its required share of the rent and the amount, if any, by which the unit rent (including the amount allowed for tenant-based utilities) exceeds the applicable payment standard (the limitation at § 982.508 regarding maximum family share at initial occupancy shall not apply);
(4) The family shall not be considered a new admission to the tenant-based program
(5) The family shall not count toward the PHA's income-targeting requirements at § 982.201(b)(2)(i); and
(6) An owner may not terminate the tenancy of a family that elects to use their tenant-based assistance to remain in the same project, except for in response to serious or repeated lease violations, or for other good cause (
(c)
(i) The PHA determines that it lacks sufficient funding to continue housing assistance payments for all voucher units under a HAP contract;
(ii) The PHA has taken cost-saving measures specified by HUD; and
(iii) HUD determines that the PHA lacks sufficient funding.
(2) If the PHA determines that a breach has occurred, the PHA may exercise any of its rights or remedies under the HAP contract, including but not limited to contract termination. In the case of contract termination, families shall be provided tenant-based assistance, as described in paragraph (b) of this section.
(d)
(a)
(b)
(1) Added units that qualify for an exception to the program cap (as described in § 983.6 and § 983.59) or the project cap (as described in § 983.54 and § 983.59) will not count against such cap(s).
(2) The anniversary and expiration dates of the HAP contract for the additional units must be the same as the anniversary and expiration dates of the HAP contract term for the PBV units originally placed under HAP contract.
(3) A unit that is not under a HAP contract but is in a project with other units that are under a HAP contract may undergo repairs or renovation prior to amending the PBV HAP contract to add the unit. If such repairs or renovation constitutes development activity as defined in § 983.3, then the requirements at § 983.152(b) must be met.
(4) Units may only be added to the HAP contract if the units existed at the time of HAP contract execution.
(c)
(a)
(2) The owner must provide all the services, maintenance, equipment, and utilities specified in the HAP contract with the PHA and in the lease with each assisted family.
(3) At the discretion of the PHA, the HAP contract may also require continuing owner compliance during the HAP term with additional housing quality requirements specified by the PHA (in addition to, but not in place of, compliance with HUD's Housing Quality Standards). Such additional requirements may be designed to assure continued compliance with any design, architecture, or quality requirement specified by the PHA (§ 983.204(c)).
(b)
(2) The unit is considered to be in noncompliance with Housing Quality Standards if:
(i) The PHA or authorized inspector determines the unit fails to comply based upon an inspection;
(ii) The PHA notified the owner in writing of the unit failure; and
(iii) The unit failures are not corrected in accordance with the timeframes established in § 982.401(a)(5) and/or § 982.401(o).
(3) In the case of an HQS deficiency that is caused byany member or guest of the assisted family, the PHA may waive the owner's responsibility to remedy the violation. If the PHA waives the owner's responsibility, then the family must make the repairs in accordance with the applicable timeframes. However, the PHA may terminate assistance to a family because of HQS breach caused by the family, which may result in removing the unit from the HAP contract.
(c)
(1) A PHA may withhold assistance payments for individual units that do not meet HQS once the PHA has notified the owner in writing of the deficiencies. If the unit is brought into compliance during the applicable cure period (24 hours for life-threatening deficiencies and 30 days (or other reasonable period established by the PHA), the PHA must:
(i) Resume assistance payments; and
(ii) Provide assistance payments to cover the time period for which the assistance payments were withheld.
(2)(i) The PHA must abate the HAP for the PBV unit if the owner fails to make the repairs within the applicable cure period (24 hours for life-threatening deficiencies and 30 days (or other reasonable period established by the PHA)). Once the repairs are made and the unit complies with HQS, the PHA must recommence HAP.
(ii) If the PHA abates HAP under this paragraph, the PHA must notify the tenant and the owner that it is abating payments and that if the unit does not meet HQS within 60 days after the determination of noncompliance or a reasonable longer period established by the PHA, the PHA will remove the unit from the HAP contract, and the family will have to move if the family wishes to receive continued assistance. The PHA must provide the family with any forms necessary to move to another unit and transfer the rental assistance accordingly.
(iii) The PHA may choose to abate payments for the entire PBV HAP due to unit's noncompliance with the HQS, even if some of the units continue to meet HQS. The PHA may terminate the entire HAP contract, rather than simply removing the unit from the HAP contract, due to noncompliance with HQS.
(iv) If a PHA abates the HAP for the unit, the PHA must notify the family and the owner that it is abating payments and that if the unit does not meet HQS within 60 days after the determination of noncompliance (or a reasonable longer period established by the PHA), the PHA will either terminate the HAP contract or remove the unit from the HAP contract, and the family will have to move if the family wishes to receive continued assistance. The PHA must issue the family its voucher and provide the family with any other forms necessary to move to another unit with continued HQS assistance.
(3) An owner may not terminate the tenancy of any family due to the withholding or abatement of assistance. During the period that assistance is abated, the family may terminate the tenancy by notifying the owner.
(4) If the owner makes the repairs and the unit complies with HQS within 60 days (or a reasonable longer period established by the PHA) of the notice of abatement, the PHA must recommence payments to the owner. The PHA does not make any payments for the unit to the owner for the period of time that the payments were abated.
(5) If the owner fails to make the repairs within 60 days (or a reasonable longer period established by the PHA) of the notice of abatement, the PHA must either remove the unit from the HAP contract or terminate the HAP contract in its entirety.
(6)(i) The PHA must give any family residing in a unit that is either removed from the HAP contract or for which the HAP contract is terminated under this paragraph (c) due to a failure to correct HQS deficiencies at least 90 days or a longer period as the PHA determines is reasonably necessary following the termination of the HAP contract to lease a unit with tenant-based assistance.
(ii) If the family is unable to lease a unit within the period under paragraph (c)(6) of this section and the PHA owns or operates public housing, the PHA must offer, and if accepted, provide the family a preference for the first appropriately sized public housing unit that becomes available for occupancy after the time period expires.
(iii) PHAs may assist families relocating under this paragraph (c) in finding a new unit, including using up to 2 months of the withheld and abated assistance payments for costs directly associated with relocating to a new unit, including security deposits or reasonable moving costs as determined
(d)
(e)
The revisions read as follows:
(a) The owner is maintaining the premises and all contract units in accordance with HUD's Housing Quality Standards.
(c) Each contract unit for which the owner is receiving housing assistance payments is leased to an eligible family referred by the PHA, or selected from the owner-maintained waiting list in accordance with § 983.251, and the lease is in accordance with the HAP contract and HUD requirements.
(e) The owner (including a principal or other interested party) is not the spouse, parent, child, grandparent, grandchild, sister, or brother of any member of a family residing in a contract unit unless needed as a reasonable accommodation under Section 504, the Fair Housing Act, or the ADA, for a household member who is a person with disabilities.
(a) Units occupied by families whose income has increased during their tenancy resulting in the tenant rent equaling the rent to the owner, shall be removed from the HAP contract 180 days following the last housing assistance payment on behalf of the family.
(c) * * * Families must be selected in accordance with program requirements under § 983.251 of this part.
(a)
(2) Except for tenant-based voucher participants (determined eligible at original admission to the voucher program), the PHA may only select families determined eligible for admission within 60 days prior to commencement of PBV assistance.
(3) The protections for victims of domestic violence, dating violence, sexual assault, or stalking in 24 CFR part 5, subpart L, apply to admission to the project-based voucher program.
(4) A PHA may not approve a tenancy if the owner (including a principal or other interested party) of a unit is the parent, child, grandparent, grandchild, sister, or brother of any member of the family, unless the PHA determines that approving the unit would provide reasonable accommodation under Section 504, the Fair Housing Act, or the ADA, for a family member who is a person with disabilities.
(b)
(2) The in-place family protection applies only to families that are eligible to participate in the PBV program on the proposal selection date. If the in-place family is a tenant-based voucher participant, program eligibility is not re-determined. However, the PHA may deny or terminate assistance for the grounds specified in 24 CFR 982.552 and 982.553.
(3)(i) During the initial term of the tenant-based lease, an in-place tenant-based voucher family may agree, but is not required, to mutually terminate the tenant-based lease with the owner and enter into a PBV lease. If the family chooses to continue under the tenant-based lease, the unit may not be added to the PBV HAP contract. The owner may not terminate the lease for other good cause during the initial term of the tenant-based lease unless the owner is terminating the tenancy because of something the family did or failed to do in accordance with 24 CFR 982.310(d)(2). The owner is expressly prohibited from terminating the tenancy during the initial term of the lease based on the family's failure to accept the offer of a new lease or revision, or for a business or economic reason.
(ii) After the initial term of the tenant-based lease, an owner may choose not to renew the tenant-based lease or may terminate the tenant-based lease for other good cause (as defined in § 982.310(d)). In this case, the family would be required to move with continued tenant-based assistance or relinquish the tenant-based voucher and enter into a PBV lease.
(4) Admission of in-place families is not subject to income-targeting under 24 CFR 982.201(b)(2)(i).
(c)
(2) The PHA has the following options in determining how to structure the waiting list for the PBV program:
(i) The PHA may use a separate, central, waiting list comprised of more than one, or all, PBV projects;
(ii) The PHA may use the same waiting list for both tenant-based assistance and some or all PBV projects; or
(iii) The PHA may use separate waiting lists for PBV units in individual projects or buildings (or for sets of such units). This option may be used in combination with option in paragraph (c)(2)(i) or (ii) of this section. The PHA may permit the owner to maintain such waiting lists (
(3) For any of the options under paragraph (c)(2) of this section, the waiting list may establish preferences for occupancy of particular units. Criteria for occupancy of units (
(4) The PHA may merge the waiting list for PBV assistance with the PHA waiting list for admission to another assisted housing program.
(5) Where applicable, the PHA may place families referred by the PBV owner on its PBV waiting list.
(6) If the PHA chooses to use a separate waiting list for admission to PBV units, under paragraphs (c)(2)(i) and (iii) of this section, the PHA must offer to place applicants who are listed on the waiting list for tenant-based assistance on the waiting list for PBV assistance (including owner-maintained PBV waiting lists).
(7) PHAs using separate waiting lists for individual projects or buildings, as described in paragraph (c)(2)(iii) of this section, may permit owners to maintain such waiting lists. PHAs may choose to use owner-maintained PBV waiting lists for specific owners or projects. And, PHAs may permit an owner to maintain a single waiting list across multiple projects owned by the owner. Under an owner-maintained waiting list, the owner is responsible for carrying out responsibilities including, but not limited to, processing changes in applicant information, removing an applicant's name from the waiting list, opening and closing the waiting list. Where a PHA allows for owner-maintained waiting lists, all the following apply:
(i) The owner must develop and submit a written tenant selection plan to the PHA for approval. The tenant selection plan must include policies and procedures concerning waiting list management and selection of applicants from the project's waiting list, including any admission preferences, procedures for removing applicant names from the waiting list, and procedures for closing and reopening the waiting list. The owner must receive approval from the PHA of its tenant selection plan in accordance with the process established in the PHA's Administrative Plan. The owner's tenant-selection plan must be incorporated in the PHA's Administrative Plan.
(ii) The owner must receive approval from the PHA for any preferences that will be applicable to the project. The PHA will approve such preferences as part of its approval of the owner's tenant selection plan. Each project may have a different set of preferences. Preferences must be consistent with the PHA plan and listed in the owner's tenant-selection plan.
(iii) The owner is responsible for opening and closing the waiting list, including providing public notice when the owner opens the waiting list in accordance with § 982.206. If the owner-maintained waiting list is open and additional applicants are needed to fill vacant units, the owner must give public notice in accordance with the requirements of § 982.206 and the tenant selection plan.
(iv) The applicant may apply directly at the project, or the applicant may request that the PHA refer the applicant to the owner for placement on the project's waiting list. The PHA must disclose to the applicant all the PBV projects available to the applicant, including the projects' contact information and other basic information about the project.
(v) Applicants already on the PHA's waiting list must be permitted to place their names on the project's waiting lists.
(vi) At the discretion of the PHA, the owner may make preliminary eligibility determinations for purposes of placing the family on the waiting list, and preference eligibility determinations. The PHA may choose to make this determination rather than delegating it to the owner.
(vii) If the PHA delegated the preliminary eligibility and preference determinations to the owner, the owner is responsible for notifying the family of the owner's determination not to place the applicant on the waiting list and a determination that the family is not eligible for a preference. The PHA is then responsible for conducting the informal review.
(viii) Once an owner selects the family from the waiting list, the owner refers the family to the PHA who then determines the family's final program eligibility. The owner may not offer a unit to the family until the PHA determines that the family is eligible for the program.
(ix) All HCV waiting list administration requirements that apply to the PBV program (24 CFR part 982, subpart E, other than §§ 982.202(b)(2) and 982.204(d)) apply to owner-maintained waiting lists.
(x) The PHA is responsible for oversight of owner-maintained waiting lists to ensure that they are administered properly and in accordance with program requirements, including fair housing requirements under the authorities cited at 24 CFR 5.105(a). The owner is responsible for maintaining complete and accurate records as described in § 982.158. The owner must give the PHA, HUD, and the Comptroller General full and free access to its offices and records concerning waiting list management, as described in § 982.158(c). HUD may take enforcement action against either the owner or the PHA, or both.
(8) Not less than 75 percent of the families admitted to a PHA's tenant-based and project-based voucher programs during the PHA fiscal year from the PHA waiting list shall be extremely low-income families. The income-targeting requirements at 24 CFR 982.201(b)(2) apply to the total of admissions to the PHA's project-based voucher program and tenant-based voucher program during the PHA fiscal year from the PHA waiting list (including owner maintained PBV waiting lists) for such programs.
(9) Families who require particular accessibility features for persons with disabilities must be selected first to occupy PBV units with such accessibility features (see 24 CFR 8.26 and 100.202). Also see § 983.260.
(d)
(1) The prohibition on granting preferences to persons with a specific disability at § 982.207(b)(3) continues to apply.
(2) Families shall not be required to accept the particular services offered at the project.
(3) In advertising the project, the owner may advertise the project as offering services for a particular type of disability; however, the preference must be provided to all applicants who qualify for the voluntary services offered in conjunction with the assisted units.
(e)
(2) The impact (of a family's rejection of the offer or the owner's rejection of the family) on a family's position on the PBV waiting list will be determined as follows:
(i) If a central PBV waiting list is used, the PHA's Administrative Plan must address the number of offers a family may reject before the family is removed from the PBV waiting list and whether the owner's rejection will impact the family's place on the PBV waiting list.
(ii) If a project-specific PBV waiting list is used, the family's name is removed from the project's waiting list connected to the family's rejection of the offer or the owner's rejection of the
(3) None of the following actions may be taken against an applicant who has applied for, received, or refused an offer of PBV assistance:
(i) Refuse to list the applicant on the PHA waiting list for tenant-based assistance or any other available PBV waiting list. However, the PHA (or owner in the case of owner-maintained waiting lists) is not required to open a closed waiting list to place the family on that waiting list;
(ii) Deny any admission preference for which the applicant is currently qualified;
(iii) Change the applicant's place on the waiting list based on preference, date, and time of application, or other factors affecting selection from the waiting list;
(iv) Remove the applicant from the waiting list for tenant-based voucher assistance.
(a)
(1) A description of how the program works;
(2) Family and owner responsibilities; and
(3) Family right to move.
(b)
(1) How the PHA determines the total tenant payment for a family;
(2) Family obligations under the program;
(3) Information on federal, State, and local equal opportunity laws, the contact information for the Section 504 coordinator, a copy of the housing discrimination complaint form, and information on how to request reasonable accommodations and modifications under Section 504, the Fair Housing Act, or the ADA; and
(4) PHA subsidy standards, including when the PHA will consider granting exceptions to the standards, including when required as a reasonable accommodation for a person with disabilities under Section 504, the Fair Housing Act, or the ADA.
(c)
(2) The PHA shall have some mechanism for referring to accessible PBV units a family that includes a person with a mobility or sensory impairment.
(d)
(a) * * *
(1) During the term of the HAP contract, the owner must lease contract units only to eligible families selected from the waiting list for the PBV program in accordance with § 983.251 of this part.
(3) An owner must promptly notify in writing any rejected applicant of the grounds for any rejection. The owner must provide a copy of such rejection notice to the PHA.
(a)
(i) If an owner-maintained waiting list is used, in accordance with § 983.251, the owner must promptly notify the PHA of any vacancy or expected vacancy in a contract unit and refer the family to the PHA for final eligibility determination. The PHA must make every reasonable effort to promptly make such final eligibility determination.
(ii) If a PHA-maintained waiting list is used, in accordance with § 983.251, the owner must promptly notify the PHA of any vacancy or expected vacancy in a contract unit, and the PHA must, after receiving the owner notice, make every reasonable effort to refer promptly a sufficient number of families for the owner to fill such vacancies.
(2) The owner must lease vacant contract units only to families determined eligible by the PHA.
(b)
24 CFR 982.310 applies with the exception that § 982.310(d)(1)(iii) and (iv) do not apply to the PBV program. (In the PBV program, “good cause” does not include a business or economic reason or desire to use the unit for an individual, family, or non-residential rental purpose.) 24 CFR 5.858 through 5.861 on eviction for drug and alcohol abuse apply to this part. 24 CFR part 5, subpart L (Protection for Victims of Domestic Violence, Dating Violence, Sexual Assault, or Stalking) applies to this part.
(a)
(b)
(c)
(d)
(e)
(a)
(2) If the PHA determines that a family is occupying a wrong-size unit, or a unit with accessibility features that the family does not require, and the unit is needed by a family that requires the accessibility features (see 24 CFR 8.27), the PHA must, within 30 days from the PHA's determination:
(i) Notify the family and the owner of this determination, and
(ii) Offer the family continued housing assistance in another unit, pursuant to paragraph (b) of this section.
(b)
(1) Project-based voucher assistance in an appropriate-size unit (in the same project or in another project);
(2) Other project-based housing assistance (
(3) Tenant-based rental assistance under the voucher program; or
(4) Other comparable public or private tenant-based assistance (
(c)
(i) The PHA must terminate the housing assistance payments for a wrong-sized or accessible unit at the earlier of the expiration of the term of the family's voucher (including any extension granted by the PHA) or the date upon which the family vacates the unit.
(ii) If the family does not move out of the wrong-sized unit or accessible unit by the expiration date of the term of the family's voucher, the PHA must remove the unit from the HAP contract.
(2) If the PHA offers the family another form of continued housing assistance (other than a tenant-based voucher), in accordance with paragraph (b)(3) of this section, the PHA must terminate the housing assistance payments for the wrong-sized or accessible unit and remove the unit from the HAP contract when:
(i) The family does not accept the offer and does not move out of the PBV unit within a reasonable time as determined by the PHA, not to exceed 90 days.
(ii) The family accepts the offer but does not move out of the PBV unit within a reasonable time as determined by the PHA, not to exceed 90 days.
(a)
(b)
(1) Families who will occupy excepted units must be selected from the waiting list for the PBV program through an admissions preference (
(2) Once the family vacates the unit, in order to continue as an excepted unit under the HAP contract, the unit must be made available to and occupied by a family that qualifies for the exception.
(c)
(d)
(e)
(f)
(1) Substitute the excepted unit for a non-excepted unit if it is possible to do so in accordance with § 983.207(a), so that the overall number of excepted units in the project is not reduced.
(2) Temporarily remove the unit from the PBV HAP contract and provide the family with tenant-based assistance. The family and the owner may agree to use the tenant-based voucher on the unit; otherwise, the family must move from the unit with the tenant-based voucher.
(3) Change the unit's designation to a non-excepted unit, provided that the change in designation does not place non-excepted units above the project cap.
(f)
(2) When redetermining the rent to owner, the PHA shall use the most recently published FMR and the PHA utility allowance schedule in effect at the time of redetermination. At its discretion, the PHA may use the amounts in effect at any time during the 30-day period immediately before the redetermination date.
(3)(i) For any area in which Small Area FMRs are not in effect, any HUD-approved exception payment standard amount under 24 CFR 982.503(c) applies to both the tenant-based and project-based voucher programs. HUD will not approve a different payment
(ii) For any area in which SAFMRs are in effect, a HUD-approved exception payment standard amount under 24 CFR 982.503(c) will apply to a PHA's project-based voucher programs only if the PHA has adopted a policy applying SAFMRs to its PBV program in accordance with 24 CFR 888.113(h).
(4) At the request of the PHA, the HUD field office may approve a PHA's request to establish a project-specific utility allowance for a PBV-assisted project. Absent the establishment of such a project-specific utility allowance, the PHA's utility allowance schedule applies to both the tenant-based and PBV programs.
(i) The PHA request to establish a project-specific utility allowance must demonstrate that the utility allowances used in its voucher program would either create an undue cost on families (because the utility allowance provided under the voucher program is too low), or that use of the utility allowances will discourage conservation and efficient use of HAP funds (because the utility allowances provided under the voucher program would be excessive if applied to the project). The PHA must submit an analysis of utility rates for the community and consumption data of project residents in comparison to community consumption rates; and a proposed alternative methodology for calculating utility allowances on an ongoing basis.
(ii) A PHA that has established a HUD-approved project-specific utility allowance must use the same utility allowance for residents of the project who have tenant-based assistance.
(iii) HUD may establish additional standards or requirements for PHA requests to establish project specific utility allowances, including but not limited to circumstances where there is another form of rental assistance at the project, through a
(g)
(a)
(1) Upon the owner's request; or
(2) When there is a 10 percent decrease in the published FMR.
(b)
(2)(i) A rent increase may occur through automatic adjustment by an operating cost adjustment factor (OCAF) or as the result of an owner request for such an increase. Regardless of the method of adjustment, the rent increase must not result in a rent that exceeds the maximum rent, as determined pursuant to § 983.301.
(ii) By agreement of the parties, the HAP contract may provide for rent adjustments using an operating cost adjustment factor (OCAF) established by the Secretary pursuant to section 524(c) of the Multifamily Assisted Housing Reform and Affordability Act of 1997 (which shall not result in a negative adjustment) at each annual anniversary of the HAP contract. OCAFs are established by the Secretary and published annually in the
(A) A rent adjustment using an OCAF may not exceed the maximum rent determined by the PHA pursuant to § 983.301.
(B) The contract may require an additional increase up to the maximum rent determined by the PHA pursuant to § 983.301, if requested by the owner in writing, periodically during the term of the contract.
(C) The contract shall require an additional increase up to the maximum rent determined by the PHA pursuant to § 983.301 at the point of contract extension, if requested by the owner in writing.
(D) A PHA may not provide a rent adjustment that will result in rents that exceed the maximum rent determined by the PHA pursuant to § 983.301.
(iii) If the HAP contract does not provide for automatic adjustment by an OCAF, then an owner who wishes to receive an increase in the rent to owner must request such an increase at the annual anniversary of the HAP contract by written notice to the PHA.
(iv) The PHA must establish the length of the required notice period for any rent increase that requires a written request from the owner. The written request must be submitted as required by the PHA (
(3) The PHA may not approve and the owner may not receive any increase of rent to owner until and unless the owner has complied with all requirements of the HAP contract, including compliance with the HQS. The owner may not receive any retroactive increase of rent for any period of noncompliance.
(c)
(2) At any time during the term of the HAP contract, the PHA may elect within the HAP contract to not reduce rents below the initial rent to owner. If the rents have already been reduced below the initial rent to owner, the PHA may not make such an election as a way to increase the rents. If rents increase (pursuant to paragraph (b) of this section) above the initial rent to owner, then the PHA may once again make that choice. Where a PHA makes such an election, the rent to owner shall not be reduced below the initial rent to owner, except:
(i) To correct errors in calculations in accordance with HUD requirements;
(ii) If additional housing assistance has been combined with PBV assistance after the execution of the initial HAP contract and a rent decrease is required pursuant to § 983.153(b); or
(iii) If a decrease in rent to owner is required based on changes in the allocation of responsibility for utilities between the owner and the tenant.
(d)
(e)
(2) The annual anniversary of the HAP contract is the first day of the first calendar month after the end of the preceding contract year. The adjusted rent to owner amount applies for the period of 12 calendar months from the annual anniversary of the HAP contract.
(3) See § 983.207(c) for information on the annual anniversary of the HAP contract for contract units completed in stages.
(f)
(2) The independent entity must furnish a copy of the independent entity determination of reasonable rent for PHA-owned units to the PHA where the project is located.
42 U.S.C. 1437f and 3535(d).
(b)
(i) * * *
(1) * * * For purposes of this paragraph (i)(1), payment standards include exception payment standards established by the PHA in accordance with 24 CFR 982.503(d)(2).
Securities and Exchange Commission.
Final rule.
The Securities and Exchange Commission (“Commission”) is adopting amendments to modernize the description of business, legal proceedings, and risk factor disclosures that registrants are required to make pursuant to Regulation S-K. These disclosure items have not undergone significant revisions in over 30 years. The amendments update these rules to account for developments since their adoption or last revision, to improve disclosure for investors, and to simplify compliance for registrants. Specifically, the amendments are intended to improve the readability of disclosure documents, as well as discourage repetition and the disclosure of information that is not material.
The final rules are effective on November 9, 2020.
Sean Harrison, Office of Rulemaking, at (202) 551-3430, in the Division of Corporation Finance, U.S. Securities and Exchange Commission, 100 F Street NE, Washington, DC 20549.
The Commission is amending
On August 8, 2019, the Commission proposed amendments to modernize the description of business (Item 101), legal proceedings (Item 103), and risk factor (Item 105) disclosure requirements in Regulation S-K.
Pursuant to Section 108 of the Jumpstart Our Business Startups Act (“JOBS Act”),
In connection with the S-K Study and the launch of the Disclosure Effectiveness Initiative, the Commission staff invited public input on how to improve registrant disclosures.
In developing the proposed amendments to Items 101, 103, and 105 of Regulation S-K, we considered input from comment letters we received in response to these disclosure modernization efforts. We also took into account the staff's experience with Regulation S-K arising from the Division of Corporation Finance's disclosure review program and changes in the regulatory and business landscape since the adoption of Regulation S-K. As a recent example, in response to the COVID-19 pandemic, the Division of Corporation Finance closely monitored registrants' disclosure about how COVID-19 affected their financial condition and results of operations. Division staff observed that our principles-based disclosure requirements generally elicited detailed discussions of the impact of COVID-19 on registrants' liquidity position, operational constraints, funding sources, supply chain and distribution challenges, the health and safety of workers and customers, and other registrant- and sector-specific matters.
We also considered the many changes that have occurred in our capital markets and the domestic and global economy in the more than 30 years since the adoption of these disclosure requirements, including changes in the mix of businesses that participate in our public markets, changes in the way businesses operate, changes in technology (in particular technology that facilitates the provision of, and access to, information), and other changes that have occurred simply with the passage of time. Many of the amendments reflect our long-standing commitment to a principles-based, registrant-specific approach to disclosure. Our disclosure requirements, while prescriptive in some respects, are rooted in materiality and facilitate an understanding of a registrant's business, financial condition and prospects through the lens through which management and the board of directors manage and assess the performance of the registrant. We believe that modernizing Items 101, 103, and 105 will result in improved disclosure, tailored to reflect registrants' particular circumstances, and reduce disclosure costs and burdens.
In response to the proposed amendments, we received numerous comment letters, which we discuss in context below.
We discuss our revisions with respect to the proposed amendments in more detail below.
Item 101(a) of Regulation S-K currently requires a description of the general development of the business of the registrant during the past five years, or such shorter period as the registrant may have been engaged in business. In describing the general development of the business, Item 101(a)(1) requires disclosure of the following:
• The year in which the registrant was organized and its form of organization;
• The nature and results of any bankruptcy, receivership or similar proceedings with respect to the registrant or any of its significant subsidiaries;
• The nature and results of any other material reclassification, merger or consolidation of the registrant or any of its significant subsidiaries;
• The acquisition or disposition of any material amount of assets otherwise than in the ordinary course of business; and
• Any material changes in the mode of conducting the business.
The Concept Release solicited input on whether the disclosure provided under this Item continues to be useful
In light of this feedback, we proposed to amend Item 101(a)(1) to make it more principles-based and to provide registrants more flexibility to tailor disclosures to their unique circumstances. We discuss the proposals and our revisions with respect to the final amendments below.
Item 101(a) requires a description of the general development of the registrant's business during the past five years, or such shorter period as the registrant may have engaged in business. Item 101(a) also requires information to be disclosed for earlier periods if material to an understanding of the general development of the business. A requirement to provide a brief outline of the general development of the business for the preceding five years was included in the earliest form requirements for registration statements and annual reports.
Item 101(h) sets forth alternative disclosure standards for smaller reporting companies that allow these registrants to, among other things, provide a less detailed description of the registrant's business than is required under Item 101(a).
We proposed to amend Item 101(a) to eliminate the five-year disclosure timeframe and to apply a materiality standard to all of a registrant's disclosure of the general development of its business. In addition, we proposed a corresponding amendment to Item 101(h) to eliminate the three-year disclosure timeframe applicable to smaller reporting companies.
A number of commenters expressed general support for eliminating the five-year disclosure timeframe.
Several commenters opposed eliminating the five-year disclosure timeframe.
We received a few comments on the proposed elimination of the three-year timeframe in Item 101(h).
After considering the comments, we are adopting the amendments to Item 101(a) and Item 101(h) as proposed, but with a minor change to the rule text of Item 101(h) for clarity. The amendment to Item 101(a) will focus registrants on information material to an understanding of the development of their business, irrespective of a specific timeframe. Similarly, the amendment to Item 101(h) will eliminate the provision that requires smaller reporting companies to describe the development of their business during the last three years, and will direct smaller reporting companies, in describing the development of their business, to provide information for the period of
While we have considered commenter concerns about eliminating a fixed timeframe for the description of a registrant's business, we continue to believe that the current timeframes of five years and three years, respectively, may not always elicit the most relevant disclosure. With respect to one commenter's belief that the five-year time period should be retained because it corresponds to other disclosure requirements, we do not think that elimination of the specified period will result in the loss of an important correlation with other disclosure requirements.
Currently, registrants are required to provide disclosure regarding the general development of the business in certain registration statements and annual reports. For filings made after a registrant's initial filing, we proposed to amend Item 101(a)(2) and Item 101(h) to permit a registrant to provide only an update of its business development disclosure with a focus on material developments, if any, in the reporting period. In addition, the proposed amendments would require a registrant that is using this provision to incorporate by reference a discussion of the general development of the registrant's business that, together with the update, would contain the full discussion. The registrant would be required to incorporate the prior discussion by reference using one active hyperlink to the registrant's most recent filing containing that discussion.
A number of commenters generally supported permitting the use of incorporation by reference, and hyperlinking to the most recently filed full discussion of the general development of the registrant's business.
A number of commenters opposed the proposal to allow registrants to provide an update of material developments during the reporting period and require a hyperlink to the full discussion of the general development of the registrant's business disclosure, because they stated that this approach could lead to a disjointed narrative that would not be user-friendly.
We also received comments recommending that the proposal should not mandate the use of a single hyperlink reference.
After considering the comments, we are adopting the amendments to Item 101(a)(2) and Item 101(h) substantially as proposed, but with clarifications.
In response to the concerns expressed by some commenters that the proposal should not be mandatory,
As we noted in the Proposing Release, the repetition of Item 101(a) disclosure in successive filings may obscure important developments in a registrant's business. To the extent that registrants present and update their Item 101(a) disclosure under this method, we believe that the final amendments will help focus investor attention on material developments in a registrant's business.
We proposed amending the existing prescribed disclosure topics in Item 101(a)(1) to make them more principles-based. The proposed amendments would replace the list of prescribed disclosure topics with a non-exclusive list of the types of information that a registrant may need to disclose. The proposed amendments would also clarify that disclosure of a topic would be required only to the extent such information is material to an understanding of the general development of a registrant's business. As proposed, amended Item 101(a)(1) no longer would include disclosure of the year that the registrant was organized and its form of organization, or disclosure of any material changes in the mode of conducting the registrant's business in its list of disclosure topics. Nevertheless, such disclosure would continue to be required if material to an understanding of the general development of the registrant's business. In addition, we also proposed to include a new disclosure topic that would require, if material to an understanding of the general development of the business, disclosure of transactions and events that affect or may affect the company's operations, including material changes to a registrant's previously disclosed business strategy. We noted that such disclosure may be material to investors and many registrants currently include it in their initial registration statements.
Many commenters expressed general support for moving to a more principles-based approach to disclosure about the development of a registrant's business.
A number of commenters expressed support for including “material changes to a registrant's previously disclosed business strategy” as a non-exclusive disclosure example.
Several commenters opposed including transactions and events that affect or may affect the company's operations and material changes to a registrant's previously disclosed business strategy as non-exclusive disclosure topics.
Another commenter noted that, absent a definition of the term “business strategy,” it would be difficult for registrants to determine whether disclosure is warranted.
Several commenters expressed concern that the proposal would require registrants to disclose sensitive proprietary or business information regarding a registrant's business strategy.
Several commenters stated that the proposal could result in disparate treatment between registrants that provide disclosure of their business strategy and therefore would be required to disclose any material changes to their strategy, and registrants that have not previously provided disclosure of their business strategy.
We are adopting the amendments to Item 101(a)(1) largely as proposed, but with several modifications in response to comments received. As proposed, the final amendments retain the existing disclosure topics addressing the results of any bankruptcy, receivership, or similar proceedings; the nature and results of any other material reclassification, merger, or consolidation of the registrant or any of its significant subsidiaries; and the acquisition or disposition of any material amount of assets otherwise than in the ordinary course of business.
We are revising the disclosure topic regarding transactions and events that affect or may affect the company's operations, including material changes to a registrant's previously disclosed business strategy, to eliminate the requirement to disclose transactions and events that affect or may affect the company's operations. We were persuaded by the commenter who stated that this disclosure would be required under Item 303 of Regulation S-K.
We are not adding a requirement to disclose a company's business strategy annually, contrary to the suggestion of a commenter.
In addition, we are not adopting a safe harbor to address the concern of disclosing competitive or sensitive forward-looking information, as recommended by one commenter. We believe the principles-based nature of the final amendments to Item 101(a)(1) will provide registrants with considerable flexibility to tailor their disclosures to avoid disclosing competitively harmful information while still providing material information to investors. In addition, the amendments do not alter the application of existing statutory safe harbor provisions of the Private Securities Litigation Reform Act (“PSLRA”) that would be available for forward-looking statements made by registrants.
Item 101(c) requires a narrative description of the business done and intended to be done by the registrant and its subsidiaries, focusing upon the registrant's dominant segment or each reportable segment about which financial information is presented in the financial statements. To the extent material to an understanding of the registrant's business taken as a whole, the description of each such segment must include ten specific items listed in Item 101(c) (
(1) Principal products produced and services rendered;
(2) New products or segments;
(3) Sources and availability of raw materials;
(4) Intellectual property;
(5) Seasonality of the business;
(6) Working capital practices;
(7) Dependence on certain customers;
(8) Dollar amount of backlog orders believed to be firm;
(9) Business subject to renegotiation or termination of government contracts;
(10) Competitive conditions;
(11) The material effects of compliance with environmental laws; and
(12) Number of persons employed.
Many of the enumerated disclosure requirements in Item 101(c) were adopted in 1973.
To facilitate application of our principles-based revisions to Item 101, we proposed to amend Item 101(c) to be more clearly principles-based by replacing the current list of specific items with a non-exclusive list of disclosure topic examples.
We proposed to retain as a listed disclosure topic information regarding revenue-generating activities, products and/or services, and any dependence on key products, services, product families or customers, including governmental customers, to the extent this information is material to an understanding of the registrant's business. We did not receive any comments that addressed this proposal.
We are adopting the amendment as proposed.
We proposed to retain as a listed disclosure topic information regarding development efforts for new or enhanced products, trends in market demand, and competitive conditions. We had proposed this disclosure topic, which elicits more granular information of the type currently specified in Item 101(c), in response to comments received on the Concept Release. Commenters had recommended more disclosure of a registrant's competitive position, especially the market share of its products and industry trends shaping the nature of competition.
We are adopting the amendments as proposed. We are not adding a clarification that the disclosure of proprietary or other sensitive information is not required, as suggested by one commenter. We believe the principles-based nature of Item 101(c) disclosure, which the final amendments are intended to improve, should provide registrants with sufficient flexibility in how they disclose this information, to the extent material, without causing undue harm to their business operations. Indeed, based on our experience with the current rules, we are not aware that registrants have faced significant difficulties providing this disclosure. We are also not adopting revisions to the final amendments to include disclosure of substantial trends known to the company that may ultimately affect market demand, as suggested by one commenter. The principles-based disclosure topic should provide registrants with flexibility to disclose information about competition that is material to an understanding of their business. We also note that Item 303(a)(3)(ii) of Regulation S-K requires a registrant to describe any known trends or uncertainties that have had or that the registrant reasonably expects will have a material impact (favorable or unfavorable) on net sales or revenues or income from continuing operations. In addition, if the registrant knows of events that will cause a material change in the relationship between costs and revenues, the change in the relationship must be disclosed under Item 303(a)(3)(ii).
Currently, two of the twelve disclosure requirements in Item 101(c) relate to registrants' resources: Item 101(c)(1)(iii) requires disclosure of the sources and availability of raw materials, and Item 101(c)(1)(iv) requires disclosure of the importance to the segment and the duration and effect of all patents, trademarks, licenses, franchises, and concessions held, each to the extent material to an understanding of the registrant's business taken as a whole. We proposed amending these requirements to refocus registrants' disclosure on all resources material to their business. Specifically, we proposed to retain these disclosure topics with minor modifications and combine them into one principles-based, non-exclusive set of examples of information that should be disclosed to extent material to an understanding of a registrant's business as a whole.
Item 101(c)(1)(iii) currently requires disclosure of the sources and availability of raw materials. We received several comment letters in response to the Concept Release that specifically addressed this requirement.
We received limited comment on this aspect of the proposed amendments. One commenter supported the proposal, but suggested that it should specifically direct registrants to discuss how climate change will affect access to raw materials.
After considering the comments received, we are adopting the amendments as proposed. In accordance with our overall approach to Item 101(c), the final amendments emphasize a principles-based approach and clarify that disclosure regarding sources and availability of raw materials is required only when material to a registrant's business. Although the disclosure topic of raw materials might not be applicable to all registrants, we continue to believe that, for businesses whose products or services depend on raw materials, disclosures regarding such raw materials should be provided to the extent material. The one commenter's suggestion that the final amendments should require all registrants to specifically discuss how climate change will affect access to raw materials is not consistent with the principles-based nature of Item 101(c), so we are not adopting it.
Item 101(c)(1)(iv) requires disclosure of the duration and effect of all patents, trademarks, licenses, franchises, and concessions held to the extent material to an understanding of the registrant's business taken as a whole. Since the promulgation of this disclosure requirement, intellectual property has become increasingly important to the business of a broad range of registrants. Correspondingly, many registrants provide detailed disclosure in response to Item 101(c)(1)(iv), although disclosure varies among registrants and across industries. The Concept Release solicited feedback on whether to maintain, expand or revise the current scope of this Item and requested comment on the competitive costs of this disclosure. Numerous commenters supported maintaining the current scope of Item 101(c)(1)(iv),
In light of this feedback we proposed to retain as a listed disclosure topic the duration and effect of patents, trademarks, licenses, franchises, and concessions held as non-exclusive types of property that may be material to a registrant's business.
In response to the Commission's request for comment on whether the proposed amendments should include as a disclosure topic the duration and effect of copyright and trade secret protection, one commenter stated that the duration and effect of copyright protection is extrinsic information that is derived from applicable U.S. and foreign copyright laws.
After consideration of the comments, we are adopting the amendment as proposed. We are retaining, as a non-exclusive example, disclosure about the duration and effect of all patents, trademarks, licenses, franchises, and concessions held to the extent material to an understanding of the registrant's business taken as a whole. We are not expanding the requirement to include the duration and effect of copyright and trade secret protections because of the cost and other concerns highlighted by commenters.
Item 101(c)(1)(ix) requires, to the extent material to an understanding of the registrant's business taken as a whole, disclosure of any material portion of a business that may be subject to renegotiation of profits or termination of contracts or subcontracts at the election of the Government.
Business contracts with agencies of the U.S. government and the various laws and regulations relating to procurement and performance of U.S. government contracts impose terms and rights that are different from those typically found in commercial contracts. In a 1972 Notice to Registrants, the Commission noted that government contracts are subject to renegotiation of profit and to termination for the convenience of the Government.
Registrants with U.S. Government contracts tend to disclose that the funding of these contracts is subject to the availability of Congressional appropriations and that, as a result, long-term government contracts are partially funded initially with additional funds committed only as Congress makes further appropriations. These registrants disclose that they may be required to maintain security clearances for facilities and personnel in order to protect classified information. Additionally, these registrants state that they may be subject to routine government audits and investigations, and any deficiencies or illegal activities identified during the audits or investigations may result in the forfeiture or suspension of payments and civil or criminal penalties.
We proposed to retain renegotiation or termination of government contracts as a disclosure topic, citing our continued belief that, when material to a business, disclosure of this information is important for investors. We did not receive any comments that addressed this proposal.
We are adopting the amendment as proposed for the reasons discussed above.
Item 101(c)(1)(v) requires, to the extent material to an understanding of the registrant's business taken as a whole, disclosure of the extent to which the business of the segment is or may be seasonal. Although we recently considered eliminating this disclosure requirement, noting that other Regulation S-K disclosure requirements and U.S. GAAP require disclosures about seasonality in interim periods,
We received one comment on this aspect of the proposed amendments. The commenter recommended that the Commission require registrants with seasonal businesses to discuss the impact of climate change on their businesses.
We are adopting the amendment as proposed. Consistent with our previous evaluation of this Item, we continue to believe that the seasonality of the business or a segment should be disclosed to the extent it is material to an understanding of the registrant's business. Although a commenter suggested that this non-exclusive example should require disclosure about the impact of climate change on seasonal businesses, consistent with our response to a similar suggestion regarding the raw materials disclosure topic, we are not adding this additional specificity to avoid undermining the principles-based nature of Item 101(c). Our principles-based approach to this disclosure affords registrants sufficient flexibility to address relevant factors that may affect seasonality to the extent material to an understanding of the registrant's business.
Item 101(c)(1)(xii) requires disclosure of the material effects of compliance with environmental laws on the capital expenditures, earnings, and competitive position of the registrant and its subsidiaries, as well as any material estimated capital expenditures for the remainder of the fiscal year, the succeeding fiscal year, and such future periods that the registrant deems material.
Pursuant to the National Environmental Policy Act of 1969 (“NEPA”),
Although there is no separate line item requiring disclosure of government regulations that may be material to a registrant's business, it is common practice for many registrants to include disclosure regarding such information in response to Item 101(c)(1)(xii). In response to the Concept Release, a few commenters supported requiring registrants to disclose all government regulations material to their business given that many registrants already voluntarily provide such information.
In recognition of this common practice and because we believed this disclosure would provide important information to investors, we proposed including the material effects of compliance with material government regulations, not just environmental laws, as a listed disclosure topic in Item 101(c).
A number of commenters supported the proposal to include the material effects of compliance with material governmental regulations, not just environmental laws, as a listed disclosure topic in Item 101(c).
One commenter stated that the proposed amendment was confusing because the text of the amendment repeatedly used the term “material” and urged the Commission to clarify the rule text.
Several commenters opposed the proposal to include the material effects of compliance with material governmental regulations, not just environmental laws, as a listed disclosure topic in Item 101(c).
After considering the comments received, we are adopting the amendments largely as proposed with certain modifications. Some commenters opposed the proposal, asserting that disclosure of the material impact of compliance with material governmental regulations is required under MD&A or financial statement requirements. Item 101(c)(1), however, seeks to elicit broader disclosure that may be material to an understanding of the registrant's business as a whole, whereas disclosure in a registrant's MD&A or financial statements may focus more narrowly on the specific impact on a registrant's financial results, liquidity and capital resources or balance sheet. As such, we agree with the commenters that supported the proposal and stated that it would provide material information to investors.
The final rule will require, to the extent material to an understanding of the business taken as a whole, disclosure of the material effects that compliance with government regulations, including environmental regulations, may have upon the capital expenditures, earnings, and competitive position of the registrant and its subsidiaries. The final rule also will continue to require registrants to include the estimated capital expenditures for environmental control facilities for the current fiscal year and any other subsequent period that is material.
In response to the concerns of a commenter,
With respect to one commenter's suggestion that the final amendment define the term “environmental regulations” to include animal-welfare and wildlife regulations, and regulations relating to climate change,
Item 101(c)(1)(xiii) currently requires disclosure of the number of persons employed by the registrant. Some registrants distinguish between the number of full-time and part-time employees, and others specify the number of employees in each department or division. Some registrants with large numbers of employees disclose the approximate number of employees and some registrants discuss their employees' membership in a union or similar organization.
The Concept Release solicited input on this disclosure requirement, requesting feedback on, among other things, whether this numeric disclosure is still important to investors, and what, if any, improvements could be made.
Subsequent to the issuance of the Concept Release, we received a rulemaking petition requesting that the Commission adopt new rules, or amend existing rules, to require registrants to disclose information about their human capital management policies, practices and performance.
In light of the feedback that we received on the Concept Release and the Human Capital Rulemaking Petition, and as part of our efforts to modernize disclosure, we proposed to amend Item 101(c) to replace the current requirement to disclose the number of persons employed by the registrant with a requirement to provide a description of the registrant's human capital resources, including in such description any human capital measures or objectives that management focuses on in managing the business, to the extent such disclosures would be material to an understanding of the registrant's business taken as a whole.
Many commenters expressed general support for the inclusion of human capital as a disclosure topic.
Many other commenters expressed opposition to the proposed principles-based approach to human capital disclosure.
In the Proposing Release, we requested comment on whether the proposed amendment should include other non-exclusive examples of human capital measures or objectives, such as the number and types of employees, including the number of full-time, part-time, seasonal, and temporary workers. A number of commenters supported the inclusion of specific human capital management disclosure metric requirements or examples.
A number of commenters, also highlighting the limitations of mandating or suggesting certain metrics for the purpose of increasing comparability in this area, opposed the inclusion of either non-exclusive examples or prescriptive human capital management disclosure metrics.
In the Proposing Release, we also requested comment on whether we should define human capital. Several commenters stated that human capital should be defined,
We also requested comment on whether we should retain the requirement in Item 101(c) for registrants to disclose the number of persons employed by the registrant. Several commenters urged the Commission to retain the requirement.
After considering public comments, we are adopting this amendment substantially as proposed with certain modifications. Under the final amendments, Item 101(c) will require, to the extent such disclosure is material to an understanding of the registrant's business taken as a whole, a description of a registrant's human capital resources, including any human capital measures or objectives that the registrant focuses on in managing the business. We believe that, in many cases, human capital disclosure is important information for investors. Human capital is a material resource for many companies and often is a focus of management, in varying ways, and an important driver of performance.
The final amendments identify various human capital measures and objectives that address the attraction, development, and retention of personnel as non-exclusive examples of subjects that may be material, depending on the nature of the registrant's business and workforce. We emphasize that these are examples of potentially relevant subjects, not mandates. Each registrant's disclosure must be tailored to its unique business, workforce, and facts and circumstances. Consistent with the views expressed by some commenters, we did not include more prescriptive requirements because we recognize that the exact measures and objectives included in human capital management disclosure may evolve over time and may depend, and vary significantly, based on factors such as the industry, the various regions or jurisdictions in which the registrant operates, the general strategic posture of the registrant, including whether and the extent to which the registrant is vertically integrated, as well as the then-current macro-economic and other conditions that affect human capital resources, such as national or global health matters.
We also are not adopting a definition of the term “human capital” as recommended by some commenters because this term may evolve over time and may be defined by different companies in ways that are industry specific. This approach is consistent with the view expressed by a number of commenters that noted that there are many definitions of human capital and that the concept, while generally well understood, is often tailored to the circumstances and objectives of individual companies.
In a change from the proposal, a registrant will need to disclose, to the extent material to an understanding of the registrant's business, the number of persons employed by the registrant. We agree with commenters that this disclosure topic should be retained and that it can provide investors with important and useful information that is material to an understanding of the
Item 103 requires disclosure of any material pending legal proceedings, other than ordinary routine litigation incidental to the business, to which the registrant or any of its subsidiaries is a party or of which any of their property is the subject. Item 103 also requires disclosure of the name of the court or agency in which the proceedings are pending, the date instituted, and the principal parties thereto and a description of the factual basis alleged to underlie the proceeding and the relief sought. Similar information is to be included for such proceedings known to be contemplated by governmental authorities.
The Commission first adopted a requirement to disclose all pending litigation that may materially affect the value of the security to be offered, describing the origin, nature and name of parties to the litigation, as part of Form A-1 in 1933.
In the Proposing Release, we noted that Item 103 and U.S. GAAP have overlapping disclosure requirements, but that these requirements nonetheless differ in certain respects.
In response to these concerns, the Commission decided to retain the disclosure requirements in Item 103, stating that further consideration was warranted with respect to the implications of potential changes to these requirements.
In an effort to encourage registrants to avoid duplicative disclosure, we proposed to amend Item 103 to expressly state that this disclosure may be provided by hyperlink or cross-reference to legal proceedings disclosure located elsewhere in the document, such as in Management's Discussion & Analysis (MD&A), Risk Factors, or notes to the financial statements.
Many commenters supported the use of hyperlinks or cross-references to provide legal proceedings disclosure and to avoid repetitive disclosure.
Another commenter, although supportive of this proposal, expressed concern that the use of multiple hyperlinks or cross-references could increase search costs for investors who would have to spend additional time retrieving and piecing together disclosures located in different sections of a filing.
One commenter expressed opposition to the use of hyperlinks to provide legal proceedings disclosure because it would result in “search expeditions” to find the disclosure.
We are adopting the amendment as proposed. The final rules will clarify that registrants are permitted to provide disclosure responsive to Item 103 by hyperlink or cross-reference to legal proceedings disclosure elsewhere in the document, such as in MD&A, Risk Factors, or a note to the financial statements.
We do not believe it is necessary to place a restriction on the ability of registrants to use multiple hyperlinks to
Instruction 5.C. to Item 103 specifically requires registrants to disclose any proceeding under environmental laws to which a governmental authority is a party unless the registrant reasonably believes it will not result in sanctions of $100,000 or more; provided, however, that such proceedings which are similar in nature may be grouped and described generally. The Commission added this requirement to Item 103 in 1982.
Comments on the proposed amendment were mixed. Several commenters supported the proposal to revise the $100,000 threshold for environmental proceedings to which the government is a party to $300,000 to adjust for inflation, or supported the retention of a quantitative threshold without recommending a specific amount.
Many commenters opposed the proposal to revise the $100,000 threshold to $300,000 to adjust for inflation.
Other commenters, however, opposed the use of a materiality standard for environmental proceedings and stated that larger registrants likely would not provide any disclosure of environmental proceedings under Item 103.
We also received comments that supported increasing the disclosure threshold above $300,000.
After considering the public comments, we are adopting the
The Commission has in the past considered and received feedback on a materiality standard for environmental disclosures.
We further observe that environmental proceedings often can be complex from a factual and legal standpoint. A bright-line test can help registrants assess whether a particular proceeding is subject to disclosure and provide certainty about when disclosure is required. However, we also recognize that a single numerical threshold may result in some disclosures that are not material.
After weighing these various considerations, we are persuaded by commenters who suggested a hybrid approach that includes a quantitative threshold while also providing registrants with the flexibility to apply a more tailored disclosure threshold that would best accomplish the Commission's objectives.
Accordingly, under the final rule, disclosure will be required for any proceeding that involves potential monetary sanctions of $300,000 or more, or at the election of the registrant, such other amount that the registrant determines is reasonably designed to result in disclosure of any such proceeding that is material to its business or financial condition. However, irrespective of any alternative threshold adopted by the registrant, disclosure will be required in all cases for any proceeding when the potential monetary sanctions exceed the lesser of $1 million or one percent of the current assets of the registrant and its subsidiaries on a consolidated basis. Furthermore, if a registrant chooses to use a threshold other than the $300,000 threshold, it must disclose this threshold (including any change thereto) in each annual and quarterly report. We believe this approach avoids a mandatory one-size-fits-all disclosure threshold that may potentially result in the disclosure of information that is not material by allowing registrants to determine a company-specific disclosure threshold that is more relevant to their particular circumstances.
We acknowledge commenters' concerns that use of a materiality standard for environmental proceedings could result in larger registrants providing less disclosure under Item 103. For that reason, the final rule stipulates that the alternative disclosure threshold may not exceed certain parameters. The sliding-scale standard of the lesser of $1 million or one percent of the current assets builds on commenter suggestions to use a higher dollar threshold, such as $1 million, or a company-specific benchmark that scales with the size of the company. These parameters, together with the bright-line $300,000 threshold, are intended to ensure that investors continue to receive relevant information about environmental sanctions while also realizing the benefits of a more principles-based approach.
Item 105 requires disclosure of the most significant factors that make an investment in the registrant or offering speculative or risky and specifies that the discussion should be concise and organized logically.
In proposing amendments to Item 105, we aimed to address the lengthy and generic nature of the risk factor disclosure presented by many registrants. Although the length and number of risk factors disclosed by registrants vary, some recent studies have indicated that risk factor disclosures have increased over time.
The inclusion of generic, boilerplate risks that could apply to any offering or registrant appears to contribute to the increased length of risk factor disclosure. Although Item 105 instructs registrants not to present risks that could apply generically to any registrant, and despite longstanding Commission and staff guidance stating that risk factors should be focused on the “most significant” risks and should
To address these concerns, we proposed the following amendments to the Item 105 risk factor disclosure requirement.
As a way of addressing the length of risk factor disclosure, the Commission has previously considered requiring a page limit for risk factor disclosure.
Given the increasing length of risk factor disclosure and after considering the feedback on the Concept Release, we proposed to amend Item 105 to require summary risk factor disclosure in the forepart of the document if the risk factor section exceeds 15 pages.
Several commenters supported the proposal to require summary risk factor disclosure.
A number of commenters opposed the proposal.
Several commenters emphasized that many registrants decide to provide lengthy risk factor disclosure because they believe this will help limit their legal exposure.
Another commenter expressed concern that the proposal to require registrants to summarize the “principal” risk factors would effectively require registrants to rank their risk factors, which some registrants may find difficult.
We are adopting the amendments substantially as proposed with a modification in response to comments received. Under the final amendments, if a registrant's risk factor disclosure exceeds 15 pages, Item 105(b) will require in the forepart of the document a series of concise, bulleted or numbered statements summarizing the principal factors that make an investment in the registrant or offering speculative or risky.
With respect to commenters' concerns that the risk factor summary would require registrants to rank their risk factors or would not include the appropriate level of detail necessary to fully understand a registrant's risks and could subject companies to potential litigation,
Finally, although some commenters suggested a lower threshold for triggering the summary risk factor disclosure or requiring the summary in all instances,
Since the Commission first published guidance on risk factor disclosure in 1964,
We proposed to amend Item 105 to change the standard for disclosure from the “most significant” risks to “material” risks
Comments on this proposal were generally supportive. Many commenters expressed support for replacing the requirement to discuss the “most significant” risks with “material” risks.
A few commenters opposed the proposed amendment.
Other commenters stated that changing the disclosure standard from “most significant” to “material” would likely not meaningfully reduce the amount of risk factor disclosures in filings.
After considering the comments, we are adopting the amendment as proposed. Under the final amendment, registrants will be required to disclose the material factors that make an investment in the registrant or offering speculative or risky. We believe that the final amendment will result in risk factor disclosure that is more tailored to the particular facts and circumstances of each registrant, which should reduce the disclosure of generic risk factors and potentially shorten the length of the risk factor discussion, to the benefit of both investors and registrants.
Since 1964, the Commission has periodically emphasized the importance of organized and concise risk factor disclosure.
After considering the comments received on the Concept Release, we proposed to amend Item 105 to require registrants to organize their risk factor disclosure under relevant headings in addition to the subcaptions that are currently required. In addition, the proposed amendments would require registrants to present risks that could apply to any registrant or any offering at the end of the risk factor section under a separate caption entitled “General Risk Factors.” The proposed amendments were intended to improve the organization of risk factor disclosure in an effort to help readers comprehend lengthy risk factor disclosures.
Many commenters supported organizing risk factors under relevant headings.
Some commenters opposed organizing risk factors under relevant headings.
Comments were mixed on the proposed amendment to require registrants to disclose generic risk factors at the end of the risk factor section under a separate “General Risk Factors” caption. A number of commenters agreed with the proposed amendment.
Another commenter stated that registrants use risk factor disclosure to satisfy the “meaningful cautionary language” required by the safe harbor provision of the PSLRA,
A few commenters expressed concern that it could be difficult for registrants to differentiate risks as “specific” or “general.”
In the Proposing Release, we also requested comment on whether Item 105 should be amended to require registrants to prioritize the order in which they discuss their risk factors so that the more significant risks to the registrant are discussed first. Several commenters supported requiring registrants to prioritize the risk factors to discuss more significant risks first.
In addition, we requested comment on whether we should require registrants to explain how generic, boilerplate risk factors are material to their investors, and what, if anything, management does to address these risks. One commenter, suggesting that this would lead to more useful disclosure for investors, supported such a requirement.
After considering the public comments, we are adopting the amendment as proposed. Amended Item 105 will require registrants to organize their risk factor disclosure under relevant headings, in addition to the subcaptions that are currently required. The final amendments, except as described below, do not specify risk factor headings that registrants should use. As noted above, many registrants already organize their risk factor disclosure through groupings of related risk factors and the use of headings. We believe that requiring this type of organization for all registrants will improve the readability and usefulness of this disclosure. In addition, the final amendments will require registrants to present risks that could apply generally to any company or offering of securities at the end of the risk factor section under the caption “General Risk Factors.” We are not adopting a requirement for registrants to explain how generic, boilerplate risk factors are material and how management addresses these risks, as suggested by one commenter.
We continue to believe that the final amendment will help to address the lengthy and generic nature of the risk factor disclosure presented by many registrants. We agree with commenters that stated that the amendments would make risk factor disclosure more user-friendly and improve the readability of this information.
The final amendments will not require registrants to prioritize the order in which they discuss their risk factors. Although we recognize that such prioritization could be useful to users of the disclosure in certain circumstances, consistent with our goal to make the item more principles based, we believe the amendments should afford registrants flexibility to determine the order to most effectively present the material risks that make an investment in the registrant or offering speculative or risky. Accordingly, if a registrant believes it is useful or important to emphasize the relative importance of certain risks, it is free to write those risk factors and other disclosures in such a way that their relative importance is apparent. Retaining this flexibility should also help address concerns expressed by some commenters that it could be difficult to evaluate and rank often equally significant and evolving risk factors.
If any of the provisions of these rules, or the application thereof to any person or circumstance, is held to be invalid, such invalidity shall not affect other provisions or application of such provisions to other persons or circumstances that can be given effect without the invalid provision or application.
Pursuant to the Congressional Review Act,
This section analyzes the expected economic effects of the final amendments relative to the current baseline, which consists of both the regulatory framework of disclosure requirements in existence today and the current use of such disclosure by investors. As discussed above, we are adopting amendments to modernize and simplify the description of business (Item 101), legal proceedings (Item 103), and risk factor (Item 105) disclosure requirements in Regulation S-K.
We are sensitive to the costs and benefits of these amendments. The discussion below addresses the potential economic effects of the final amendments, including the likely benefits and costs, as well as the likely effects on efficiency, competition, and capital formation.
Our baseline includes the current disclosure requirements under Items 101, 103, and 105 of Regulation S-K, which apply to registration statements, periodic reports, and certain proxy statements filed with the Commission. Thus, the parties that are likely to be affected by the final amendments include investors and other users of registration statements, periodic reports and proxy statements, such as financial analysts, as well as registrants subject to Regulation S-K.
The final amendments affect both domestic registrants and foreign private issuers
In this section, we discuss the anticipated economic benefits and costs of the final amendments. We first analyze the overall economic effects of shifting toward a more principles-based approach to disclosure, which is one of the main objectives of the final amendments. We then discuss the potential costs and benefits of specific amendments.
Prescriptive requirements employ bright-line, quantitative or other thresholds to identify when disclosure is required, or require registrants to disclose the same types of information. Principles-based requirements, on the other hand, provide registrants with the flexibility to determine (i) whether certain information is material, and (ii) how to disclose such information.
In this release, we are amending Items 101(a), 101(c), and 105 to be more clearly principles-based.
For certain existing disclosure requirements, shifting to a more principles-based approach could benefit registrants with no loss of investor protection because the current requirements may result in some disclosure that is not material to an investment decision and costly for registrants to provide. Elimination of disclosure that is not material could reduce compliance burdens and potentially benefit investors, to the extent it improves the readability and conciseness of the information provided and allows investors to focus on information that is material to an understanding of the registrant's business.
On the other hand, shifting to a more principles-based approach may result in the elimination of previously prescriptive disclosure that is material to an investment decision if registrants misjudge what information is material to investors.
In addition, some of the potential costs of shifting to a more principles-based approach could be mitigated by external disciplines, such as the Commission staff's filing review program and the registrant's engagement with investors.
Differences between the principles-based and prescriptive approaches are likely to vary across registrants, investors, and disclosure topics. Despite potential costs associated with replacing prescriptive requirements with principles-based requirements, the shift is likely to reduce overall compliance costs because registrants will have the flexibility to determine whether certain information is material under the principles-based approach. To the extent the principles-based approach reduces compliance costs, the cost reduction should be more beneficial to smaller registrants that are financially constrained. In addition, as noted above, prescriptive requirements may create information asymmetries if investors are left to rely on disclosure of measures that are not relevant to the way a registrant's management and board of directors are operating and assessing the business. Although eliminating information that is not material should benefit all investors, it could benefit retail investors more to the extent they are less likely to have the time and resources to devote to reviewing and evaluating disclosure. At the same time, smaller registrants with less established reporting histories may be the most at risk of persistent information asymmetries if the principles-based approach results in reduction or loss of information that is material to investors. In the event of reduction or loss of information that is material (the risk of which, as noted above, is offset by mitigants including corporate internal controls and the antifraud provisions of the securities laws), retail investors in these registrants may be more negatively affected than institutional investors
Across different disclosure topics, the principles-based approach may be more appropriate for topics where the relevant information tends to vary greatly across companies, because, in these situations, the more standardized prescriptive requirements are less likely to elicit information that is tailored to a specific company. A principles-based approach may also be more appropriate for disclosures that are episodic in nature, because investors may derive relatively less value from comparisons of such disclosure for a given registrant over time. In addition, registrants may derive relatively less benefit from applying a standardized prescriptive approach to episodic disclosures, which may be less amenable to routinized reporting than periodic disclosures of information that arise on a regular basis.
We expect the final amendments will result in costs and benefits to registrants and investors, and we discuss those costs and benefits qualitatively, item by item, in this section. The changes to each item will affect the compliance burden for registrants in filing particular forms. Overall, we expect the net effect of the final amendments on a registrant's compliance burden to be limited. The quantitative estimates of changes in those burdens for purposes of the Paperwork Reduction Act are further discussed in Section V. As explained in the item-by-item discussion of the final amendments in this section, we expect certain aspects of the final amendments to increase compliance burdens and others to decrease the burdens. Taken together, we estimate that the final amendments are likely to result in a net decrease of between three and five burden hours per form for purposes of the Paperwork Reduction Act.
Item 101(a) requires a description of the general development of the registrant's business, such as the year in which the registrant was organized and the nature and results of any merger of the registrant or its significant subsidiaries. Some academic research has found that information required under Item 101(a) is relevant to firm value. For example, the registrant's age can, to some extent, predict its future growth rates
The final amendments will revise the requirements in Item 101(a) to be more clearly principles-based, requiring disclosure of information material to an understanding of the general development of the registrant's business. The shift to a more clearly principles-based approach for these requirements will give rise to the potential economic effects discussed in Section IV.B.1 above.
Currently, Item 101(a) requires registrants to describe their business development during the past five years, or such shorter period as the registrant may have engaged in business. The final amendments will eliminate the prescribed five-year timeframe for this disclosure. Eliminating this specific requirement will provide registrants with flexibility to choose a different timeframe that is more relevant in describing their business development to investors. For example, a long timeframe might be less appropriate for registrants operating in rapidly changing environments where historical information becomes irrelevant in a short period of time. Given that registrants will have the flexibility to determine the appropriate timeframe, this amendment is expected to reduce compliance costs. Investors may also benefit if the timeframe chosen by a registrant is more consistent with their preferences than the prescribed five-year timeframe, but may be burdened if the timeframe chosen by the registrant is less consistent with their preferences than the prescribed five-year timeframe.
Currently, Item 101(a) requires registrants to describe their business development in registration statements and annual reports. For filings subsequent to the initial registration statement, the final amendments to Item 101(a)(1) will allow registrants to provide only an update of this disclosure and incorporate by reference the previous discussion of the general development of its business included in the registrant's most recently filed registration statement or report containing that discussion. Together, the update and the incorporated disclosure will present a complete discussion of the general development of its business.
Some commenters stated that the use of hyperlinks to update material developments would lead to a disjointed narrative and hamper readability.
While limiting registrants to only one hyperlink as opposed to multiple hyperlinks may make compliance efforts somewhat more burdensome, we do not believe this restriction will significantly change existing disclosure practices as the Commission's current rules prohibit incorporation by reference when it would render the disclosure unclear or confusing.
The final amendments to Item 101(a) provide a non-exclusive list of topics that should be disclosed if material. Providing potential disclosure topics should help clarify the disclosure requirements and avoid potential confusion among registrants. Besides the topics currently included under Item 101(a), the disclosure topics in the final amendments also add material changes to a registrant's previously disclosed business strategy. Several studies have found that business strategy is a critical determinant of corporate success
Some commenters expressed concerns that this amendment could impose costs on filers if the disclosure of “material changes” in business strategy reveals sensitive or proprietary corporate information.
Overall, investors and registrants may benefit from the final amendments to Item 101(a) if the existing requirements elicit disclosure that is not material to an investment decision and/or is more costly to provide. However, providing registrants with additional flexibility to determine (i) whether certain information is material, and (ii) how to disclose such information may result in the reduction or loss of information in cases in which registrants no longer disclose information material to an investment decision.
Item 101(c) requires a narrative description of the registrant's business. The current requirement identifies twelve specific items that must be disclosed to the extent material to an understanding of the registrant's business taken as a whole. We are revising the requirements in Item 101(c) to be more clearly principles based. The final amendments require a description of the business and set forth seven non-exclusive examples of information to disclose if material to an understanding of the business. These examples include some, but not all, of the current disclosure topics required under Item 101(c) as well as some additional topics. Emphasizing a principles-based approach to Item 101(c) will give rise to the potential economic effects discussed in Section I.B.1 above. In addition, eliminating more prescriptive disclosure topics (
The disclosure topics that are retained, with some changes, as examples under the final amendments are: (1) Principal products produced and services rendered, and dependence on certain customers; (2) new products and competitive conditions; (3) sources and availability of raw materials and intellectual property; (4) business subject to renegotiation or termination of government contracts; (5) seasonality of the business; and (6) the number of persons employed. As the information required under Item 101(c) can be relevant to firm value,
The final amendments will expand the existing disclosure topic regarding the number of persons employed to encompass a description of the registrant's human capital resources. This disclosure topic will require, in addition to the number of persons employed, a description of any human capital measures or objectives that the registrant focuses on in managing the business, to the extent such disclosures are material to an understanding of the registrant's business. The rule also will provide non-exclusive examples of human capital measures and objectives, such as measures or objectives that address the attraction, development, and retention of personnel.
In one meta-analysis, which reviewed 66 studies, the authors found that besides the number of employees, other human capital characteristics, including education, experience, and training, have positive effects on firm performance.
The final amendments also replace the requirement to disclose the material effects on the registrant of compliance with environmental laws with a disclosure topic that covers the material effects of compliance with material government regulations, including environmental laws. To the extent that information about compliance with government regulations affects firm value, investors may benefit from additional information about the effects of material government regulations. Registrants, however, will incur incremental compliance costs to provide this information. To the extent that many registrants already disclose such information, the incremental benefits and costs could be limited.
Some of the disclosure requirements currently contained in Item 101(c) are not included as potential topics in the revised rule.
Additionally, in an effort to consolidate working capital disclosure in one location and to avoid duplicative disclosure, the final amendments eliminate working capital practices as a disclosure topic in Item 101(c), given that this information, when material, often is elicited by MD&A disclosure requirements.
Overall, investors and registrants may benefit from the final amendments to Item 101(c) if the revised rules result in disclosure that is more likely to be material to an investment decision and avoid disclosure that is not material and/or is costly to provide.
Item 103 requires disclosure of material pending legal proceedings and other relevant information about the proceedings, such as the name of the court, the date instituted, and the principal parties involved. Given that involvement in legal proceedings can affect a firm's cash flows through multiple channels, including legal fees, the cost of executives being distracted from their main operational tasks, reputational costs, and settlement costs, information required under Item 103 is relevant to firm value.
Currently, Item 103 and U.S. GAAP, which requires disclosure of certain loss contingencies, overlap in the requirement to disclose certain information associated with legal proceedings. As a result, in order to comply with Item 103, registrants commonly repeat disclosures that are already provided elsewhere in registration statements and periodic reports. The final amendments to Item 103 encourage the use of hyperlinks or cross-references to avoid repetitive disclosure. If duplicative disclosure distracts investors from other important information, the final amendments may benefit investors by reducing repetition and facilitating more efficient information processing. However, to the extent that some information on legal proceedings will no longer be readily available under Item 103, investors may have to spend more time synthesizing this information from other locations. Nevertheless, we believe the increase in information processing cost for investors would be minimal. While registrants may incur minimal compliance costs if they choose to include hyperlinks, those costs generally would be less than the costs of disclosing duplicative information in a document.
Currently, Item 103 specifically requires disclosure of any proceedings under environmental laws to which a governmental authority is a party unless the registrant reasonably believes that the proceeding will result in monetary sanctions, exclusive of interest and costs, of less than $100,000. This bright-line threshold for environmental proceedings was adopted in 1982. The final amendment includes a modified disclosure threshold that increases the existing $100,000 threshold to $300,000 (to account for inflation), but also affords a registrant some flexibility. Specifically, the amendment will allow a registrant to select a different threshold, with an upper bound of the lesser of $1 million or one percent of its
Since the two-pronged approach we are adopting includes quantitative thresholds that are higher than the current threshold, registrants of all sizes should benefit from reduced compliance costs. For example, Table 1 below summarizes the number of registrants that have cases in the EPA's Enforcement and Compliance History Online Database over the period 2009-2019 and provides summary statistics on the size of the monetary sanctions, in dollar terms and as a percentage of registrants' current assets. For each year, the table shows the estimated number of registrants that incurred environmental proceedings with monetary sanctions exceeding (i) $100,000, (ii) $300,000 and (iii) the lesser of $1 million or one percent of the current assets of the registrant and its subsidiaries on a consolidated basis.
The increase in the disclosure threshold from $100,000 to $300,000 would have resulted on average in an upper bound decrease of 30% in the number of registrants that have to report such sanctions during the period under consideration, with the median ratio of sanctions to current assets of approximately 0.12%. The use of an alternative threshold that requires disclosure when sanctions exceed the lesser of $1 million or one percent of the current assets of the registrant results in an additional average upper bound decrease of 30% in the number of registrants that have to report such sanctions during the period under consideration, with the median ratio of sanctions to current assets of approximately 0.30%.
Based only on a financial assessment of the mean (and median) total sanctions as a percentage of current assets, we would not expect these changes to result in the non-disclosure of information that would be material to an investment or voting decision. The data in Table 1 also suggests that the $100,000 threshold likely resulted in the disclosure of a substantial amount of non-material information. In addition, it further suggests that the new two-pronged approach is likely to continue to result in the disclosure of a substantial amount of non-material information, albeit less than is currently required.
Item 105 requires disclosure of the most significant factors that make an investment in the registrant or offering speculative or risky. Some academic research supports the notion that information currently required under Item 105 is important to investors. For example, there is evidence that risk factor disclosure by publicly traded firms is material in content.
The amendments to Item 105 will require a bullet point summary of the principal risk factors that is no more than two pages in the forepart of the document when the risk factor section exceeds 15 pages. If lengthy risk factor disclosure contains information that is less meaningful to investors, such as generic risks that could apply to any investment in securities, a brief summary of the risk factors should benefit investors, especially those who have less time to review and analyze registrants' disclosure, by enabling them to make more efficient investment decisions. The potential benefit of a brief summary may be limited for some registrants if they cannot disclose all material risks in a two-page summary, although all material risk factors will still be required to appear in the risk factor section. The requirement to
While we are cognizant of potential compliance costs associated with the preparation of a risk factor summary, such an increase should be limited due to the requirement that the summary cannot exceed two pages. The use of a risk factor summary, when the full risk factor discussion exceeds 15 pages, should make the disclosure more user friendly and improve its readability.
The final amendments to Item 105 also replace the requirement to discuss the “most significant” risks with “material” risks. The economic effects of the final amendment depend on the preferences of investors. If the existing “most significant” standard elicits too much or too little information, investors may benefit from the materiality standard emphasized in the final rules. Focusing on the risks to which investors would attach the most importance should enable them to make more efficient investment decisions. Registrants may experience increased (decreased) compliance costs if the materiality standard results in more (less) expansive disclosure than the existing “most significant” standard.
In addition, the final amendments revise Item 105 to require registrants to organize their risk factor disclosure under relevant headings, with generic risk factors, if disclosed, appearing at the end of the risk factor section under the caption “General Risk Factors.” Some academic research has found that different types of registrants disclose different types of risk factors and certain types of risk factors are more correlated with stock return volatilities and systematic risks.
As discussed above, the final amendments may improve capital allocation efficiency by enabling investors to make more efficient investment decisions. For example, the final amendments may reduce search costs for certain investors by eliminating information that is not material to those investors. Given that certain investors may have less time to review and analyze registrants' disclosure,
However, in cases in which registrants misjudge what information is material, a principles-based disclosure framework relying on registrants' determinations of the importance of information to investors could result in increased information asymmetries between registrants and investors. Such asymmetries may increase the cost of capital, reduce capital formation, and hamper efficient allocation of capital across companies. Overall, to the extent that the final amendments will eliminate disclosure that is not considered to be material, we believe these effects will be limited. Moreover, we expect this risk to be offset by mitigants, including corporate internal controls and the antifraud provisions of the securities laws.
We are amending Items 101(a), 101(c), and 105 to be more clearly principles-based. As an alternative, we considered modifying these requirements using prescriptive standards. Several commenters expressed support for more prescriptive standards.
The final amendments to Item 101(a) will include a non-exclusive list of the types of information that a registrant may need to disclose. We could have included a new disclosure topic that would require, if material to an understanding of the general development of the business, disclosure of transactions and events that affect or may affect the company's operations. Given that existing MD&A disclosure requirements likely elicit similar information, including this disclosure topic could result in duplicative disclosures that would increase compliance costs for registrants without significantly improving the overall mix of information available to investors.
The final amendments to Item 101(c) will require disclosure of human capital measures or objectives, including disclosure of the number of persons employed, to the extent material to an understanding of the registrant's business. One alternative to this disclosure topic would be to remove any reference to disclosure of the number of persons employed. This alternative would be consistent with the general principles-based approach of the final amendments that eschews specificity in favor of encouraging registrants to consider the particular types of information that would be material to an understanding of their business.
The final amendments also adjust for inflation the bright-line threshold for environmental proceedings in Item 103 from $100,000 to $300,000 and allow registrants to elect to use a different threshold, with an upper bound of the lesser of $1,000,000 or one percent of its current assets. As an alternative to this amendment, we considered applying only a materiality standard. On the one hand, a materiality standard might elicit disclosure that is more relevant to a registrant's operations. For example, the same dollar amount of environmental fines might have a significant impact on the cash flows of a small registrant but a marginal impact on the cash flows of a large registrant. On the other hand, some environmental proceedings can be factually and legally complex, so a bright-line threshold may provide an easy-to-apply benchmark for registrants that use it when determining whether a particular environmental proceeding should be disclosed.
As another alternative, we considered making similar amendments to the corresponding disclosure requirements applicable to foreign private issuers
Certain provisions of our rules, schedules, and forms that would be affected by the rule amendments contain “collection of information” requirements within the meaning of the Paperwork Reduction Act of 1995 (“PRA”).
• “Form S-1” (OMB Control No. 3235-0065);
• “Form S-3” (OMB Control No. 3235-0073;
• “Form S-4” (OMB Control No. 3235-0324);
• “Form S-11” (OMB Control No. 3235-0067);
• “Form F-1” (OMB Control No. 3235-0258);
• “Form F-3” (OMB Control No. 3235-0256);
• “Form F-4” (OMB Control No. 3235-0325);
• “Form SF-1” (OMB Control No. 3235-0707);
• “Form SF-3” (OMB Control No. 3235-0690);
• “Form 10” (OMB Control No. 3235-0064);
• “Form 10-K” (OMB Control No. 3235-0063);
• “Form 10-Q” (OMB Control No. 3235-0070);
• “Schedule 14A” (OMB Control No. 3235-0059); and
• “Schedule 14C” (OMB Control No. 3235-0057).
The regulations, schedules, and forms listed above were adopted under the Securities Act and/or the Exchange Act. These regulations, schedules, and forms set forth the disclosure requirements for registration statements, periodic and current reports, distribution reports, and proxy and information statements filed by registrants to help investors make informed investment and voting decisions.
A description of the amendments, including the need for the information and its use, as well as a description of the likely respondents, can be found in Section II above, and a discussion of the economic effects of the proposed amendments can be found in Section IV above.
In the Proposing Release, the Commission requested comment on the PRA burden hour and cost estimates and the analysis used to derive such estimates. We did not receive any comments that directly addressed the PRA analysis of the proposed amendments. Several commenters, however, did provide responses to certain requests for comment that have informed some of our PRA estimates. In this regard, several commenters stated that the proposals would eliminate or reduce disclosure of redundant and unnecessary information and give registrants the flexibility to focus on information that is material.
As discussed in more detail in the Proposing Release,
Considered together, we do not expect these changes to impact our assessment of the compliance burdens of the final rule amendments for purposes of the PRA. Accordingly, we have not revised the estimates of the impact on the per hour burden for the affected forms discussed in the Proposing Release. We have, however, added Schedule 14C as an affected form, which increases the totals in PRA Tables 3 and 4.
PRA Table 1 summarizes the estimated impact of the final amendments on the paperwork burdens associated with the affected forms listed above.
Below we estimate the incremental change in paperwork burdens as a result of the final amendments. These estimates represent the average burden for all registrants, both large and small. In deriving our estimates, we recognize that the burdens will likely vary among individual registrants based on a number of factors, including the size and nature of their business. We do not believe that the amendments will change the number of responses to the existing collections of information; rather, we estimate that the amendments will reduce the burdens per response.
The burden reduction estimates were calculated by multiplying the number of responses by the estimated average reduction in the amount of time it would take a registrant to prepare and review the disclosures required under the amendments. For purposes of the PRA, the burden is to be allocated between internal burden hours and outside professional costs. The table below sets forth the percentage estimates we typically use for the burden allocation for each form. We also estimate that the average cost of retaining outside professionals is $400 per hour.
The table below illustrates the incremental change to the total annual compliance burden of affected forms, in hours and in costs, as a result of the final amendments.
The
The Regulatory Flexibility Act (“RFA”)
The final amendments to Items 101, 103, and 105 will affect all small entities that file documents that must include disclosure required by these Items. However, we believe that the impact on small entities will not be significant. The primary effects of the final amendments will be to: (1) Increase a registrant's flexibility to provide disclosure regarding its business, including its general business development, so that it can tailor its disclosure to its particular circumstances; (2) eliminate or reduce disclosure about matters that are not material to an understanding of the business or to a registrant's legal proceedings; and (3) encourage risk factor disclosure that is shorter and concerns only material risks. We expect the final amendments will reduce the paperwork burden for all registrants, including small entities.
The amendments contained in this release are being adopted under the authority set forth in Sections 7, 10, and 19(a) of the Securities Act, as amended, and Sections 3, 12, 13, 15, and 23(a) of the Exchange Act, as amended.
Reporting and recordkeeping requirements, Securities.
In accordance with the foregoing, the Commission amends title 17, chapter II of the Code of Federal Regulations as follows:
15 U.S.C. 77e, 77f, 77g, 77h, 77j, 77k, 77s, 77z-2, 77z-3, 77aa(25), 77aa(26), 77ddd, 77eee, 77ggg, 77hhh, 77iii, 77jjj, 77nnn, 77sss, 78c, 78i, 78j, 78j-3, 78
The revisions and addition read as follows:
(a)
(1) In describing developments, only information material to an understanding of the general development of the business is required. Disclosure may include, but should not be limited to, the following topics:
(i) Any material changes to a previously disclosed business strategy;
(ii) The nature and effects of any material bankruptcy, receivership, or any similar proceeding with respect to the registrant or any of its significant subsidiaries;
(iii) The nature and effects of any material reclassification, merger or consolidation of the registrant or any of its significant subsidiaries; and
(iv) The acquisition or disposition of any material amount of assets otherwise than in the ordinary course of business.
(2) Notwithstanding the provisions of § 230.411(b) or § 240.12b-23(a) of this chapter, as applicable, a registrant may only forgo providing a full discussion of the general development of its business for a filing other than an initial registration statement if it provides an update to the general development of its business, disclosing all of the material developments that have occurred since the most recent registration statement or report that includes a full discussion of the general development of its business. In addition, the registrant must incorporate by reference, and include one active hyperlink to one registration statement or report that includes, the full discussion of the general
(c)
(i) Revenue-generating activities, products and/or services, and any dependence on revenue-generating activities, key products, services, product families or customers, including governmental customers;
(ii) Status of development efforts for new or enhanced products, trends in market demand and competitive conditions;
(iii) Resources material to a registrant's business, such as:
(A) Sources and availability of raw materials; and
(B) The duration and effect of all patents, trademarks, licenses, franchises, and concessions held;
(iv) A description of any material portion of the business that may be subject to renegotiation of profits or termination of contracts or subcontracts at the election of the Government; and
(v) The extent to which the business is or may be seasonal.
(2) Discuss the information specified in paragraphs (c)(2)(i) and (ii) of this section with respect to, and to the extent material to an understanding of, the registrant's business taken as a whole, except that, if the information is material to a particular segment, you should additionally identify that segment.
(i) The material effects that compliance with government regulations, including environmental regulations, may have upon the capital expenditures, earnings and competitive position of the registrant and its subsidiaries, including the estimated capital expenditures for environmental control facilities for the current fiscal year and any other material subsequent period; and
(ii) A description of the registrant's human capital resources, including the number of persons employed by the registrant, and any human capital measures or objectives that the registrant focuses on in managing the business (such as, depending on the nature of the registrant's business and workforce, measures or objectives that address the development, attraction and retention of personnel).
(h)
(a) Describe briefly any material pending legal proceedings, other than ordinary routine litigation incidental to the business, to which the registrant or any of its subsidiaries is a party or of which any of their property is the subject. Include the name of the court or agency in which the proceedings are pending, the date instituted, the principal parties thereto, a description of the factual basis alleged to underlie the proceedings and the relief sought. Include similar information as to any such proceedings known to be contemplated by governmental authorities. Information may be provided by hyperlink or cross-reference to legal proceedings disclosure elsewhere in the document, such as in Management's Discussion & Analysis (MD&A), Risk Factors and notes to the financial statements.
(b) No information need be given under this section for proceedings:
(1) That involve negligence or other claims or actions if the business ordinarily results in such claims or actions, unless the claim or action departs from the normal kind of such claims or actions; or
(2) That involve primarily a claim for damages if the amount involved, exclusive of interest and costs, does not exceed 10 percent of the current assets of the registrant and its subsidiaries on a consolidated basis. However, if any proceeding presents in large degree the same legal or factual issues as other proceedings pending or known to be contemplated, the amount involved in such other proceedings shall be included in computing such percentage.
(c) Notwithstanding paragraph (b) of this section, disclosure under this section shall include, but shall not be limited to:
(1) Any material bankruptcy, receivership, or similar proceeding with respect to the registrant or any of its significant subsidiaries;
(2) Any material proceedings to which any director, officer or affiliate of the registrant, any owner of record or beneficially of more than five percent of any class of voting securities of the registrant, or any associate of any such director, officer, affiliate of the registrant, or security holder is a party adverse to the registrant or any of its subsidiaries or has a material interest adverse to the registrant or any of its subsidiaries;
(3) Administrative or judicial proceedings (including proceedings which present in large degree the same issues) arising under any Federal, State, or local provisions that have been enacted or adopted regulating the discharge of materials into the environment or primarily for the purpose of protecting the environment. Such proceedings shall not be deemed “ordinary routine litigation incidental to the business” and shall be described if:
(i) Such proceeding is material to the business or financial condition of the registrant;
(ii) Such proceeding involves primarily a claim for damages, or involves potential monetary sanctions, capital expenditures, deferred charges or charges to income and the amount involved, exclusive of interest and costs, exceeds 10 percent of the current assets of the registrant and its subsidiaries on a consolidated basis; or
(iii) A governmental authority is a party to such proceeding and such
(a) Where appropriate, provide under the caption “Risk Factors” a discussion of the material factors that make an investment in the registrant or offering speculative or risky. This discussion must be organized logically with relevant headings and each risk factor should be set forth under a subcaption that adequately describes the risk. The presentation of risks that could apply generically to any registrant or any offering is discouraged, but to the extent generic risk factors are presented, disclose them at the end of the risk factor section under the caption “General Risk Factors.”
(b) Concisely explain how each risk affects the registrant or the securities being offered. If the discussion is longer than 15 pages, include in the forepart of the prospectus or annual report, as applicable, a series of concise, bulleted or numbered statements that is no more than two pages summarizing the principal factors that make an investment in the registrant or offering speculative or risky. If the risk factor discussion is included in a registration statement, it must immediately follow the summary section required by § 229.503 (Item 503 of Regulation S-K). If you do not include a summary section, the risk factor section must immediately follow the cover page of the prospectus or the pricing information section that immediately follows the cover page. Pricing information means price and price-related information that you may omit from the prospectus in an effective registration statement based on Rule 430A (§ 230.430A of this chapter). The registrant must furnish this information in plain English. See § 230.421(d) of Regulation C of this chapter.
15 U.S.C. 77c, 77f, 77g, 77h, 77j, 77s, 77z-2, 77z-3, 77sss, 78c, 78
The text of Form S-4 does not, and this amendment will not, appear in the Code of Federal Regulations.
Item 12. Information with Respect to S-3 Registrants.
(b) * * *
(3) Furnish the information required by the following:
(i) Item 101(c)(1)(i) of Regulation S-K (§ 229.101(c)(1)(i) of this chapter), industry segments, key products or services;
15 U.S.C. 77c, 77d, 77g, 77j, 77s, 77z-2, 77z-3, 77eee, 77ggg, 77nnn, 77sss, 77ttt, 78c, 78c-3, 78c-5, 78d, 78e, 78f, 78g, 78i, 78j, 78j-1, 78k, 78k-1, 78
(a) The information required by Item 103(c)(2) of Regulation S-K (§ 229.103(c)(2) of this chapter) with respect to directors and executive officers.
By the Commission.
Fish and Wildlife Service, Interior.
Final rule.
We, the U.S. Fish and Wildlife Service (Service), determine threatened species status for the eastern black rail (
This rule is effective November 9, 2020.
This final rule is available on the internet at
Tom McCoy, Field Supervisor, South Carolina Ecological Services Field Office, 176 Croghan Spur Road, Suite 200, Charleston, SC 29407; telephone 843-727-4707. Persons who use a telecommunications device for the deaf (TDD) may call the Federal Relay Service at 800-877-8339.
Please refer to the proposed listing rule for the eastern black rail (83 FR 50610) for a detailed description of previous Federal actions concerning this species.
A thorough review of the taxonomy, life history, and ecology of the eastern black rail is presented in the SSA report (Service 2019, entire). Please refer to the proposed listing rule for the eastern black rail (83 FR 50610, October 9, 2018) for a summary of species information.
We completed a comprehensive assessment of the biological status of the eastern black rail, and prepared a report of the assessment (SSA report; Service 2019, entire), which provides a thorough account of the subspecies' overall viability. Below, we summarize the key results and conclusions of the SSA report, which can be viewed under Docket No. FWS-R4-ES-2018-0057 at
To assess eastern black rail viability, we used the three conservation biology principles of resiliency, representation, and redundancy (together, “the three Rs,” (3Rs)) (Shaffer and Stein 2000, pp. 306-310). Briefly, resiliency refers to the ability of a species to withstand environmental and demographic stochasticity (for example, wet or dry years); representation refers to the ability of the species to adapt over time to long-term changes in the environment (for example, climate change); and redundancy refers to the ability of the species to withstand catastrophic events (for example, hurricanes). In general, the more redundant and resilient a species is and the more representation it has, the more likely it is to sustain populations over time, even under changing environmental conditions. Using these principles, we identified the eastern black rail's ecological requirements for survival and reproduction at the individual, population, and subspecies levels, and described the beneficial and risk factors influencing the subspecies' viability.
We delineated analysis units for the eastern black rail based on environmental variables (aquifer permeability, slope, mean precipitation, mean potential evapotranspiration, and percent sand in soil). We used 8,281 point localities from combined datasets (
To assess resiliency, we analyzed occupancy within the analysis units through the creation of a dynamic occupancy model. We used data from repeated presence/absence surveys across the range of the eastern black rail to estimate the probability of presence at a site and related the occupancy probability to environmental covariates of interest (wettest month precipitation, temperature range, annual mean temperature, coldest month mean temperature, presence/absence of fire ants, and State identification). The lower the occupancy probability in an analysis unit, the less resiliency that analysis unit exhibits. We found the four extant analysis units (Southeast Coastal Plain, Mid-Atlantic Coastal Plain, Great Plains, and Southwest Coastal Plain) to have very low occupancy probabilities ranging from 0.099 to 0.25. The results also indicated fairly high site extinction probabilities with accompanying low site persistence.
To assess representation, we used two metrics to estimate and predict representative units that reflect the subspecies' adaptive capacity: Habitat variability and latitudinal variability. The eastern black rail exhibits adaptive potential by using similar habitat elements within different wetland types (habitat variability) within analysis units,
To assess redundancy, we evaluated the current distribution of eastern black rail analysis units through their present-day spatial locations. To have high redundancy, the eastern black rail would need to have multiple resilient analysis units spread throughout its range.
Historically, the eastern black rail ranged across the eastern, central, and southern United States; historical records also exist from the Caribbean, Central America, Brazil, and Ontario, Canada. It occupied multiple areas of wetlands (including salt marshes, coastal prairies, and hay fields) throughout the range; approximately 90 percent of documented breeding-season occurrence records occurred at coastal locations and less than 10 percent were inland records, with more than 60 percent of the inland records occurring before 1950 (Watts 2016, entire). The eastern black rail also occupied multiple areas of wetlands within each analysis unit.
Within the northeastern United States, historical (1836-2010) records document the eastern black rail as present during breeding months from Virginia to Massachusetts, with 70 percent of historical observations (773 records) in Maryland, Delaware, and New Jersey (Watts 2016, p. 22). Maryland, Delaware, and New Jersey are considered historical strongholds for eastern black rail in this region of the United States (the Northeast) as well as across the subspecies' entire breeding range (Watts 2016, p. 22), due to the total number and frequency of observations reported over time. Virginia, New York, and Connecticut account for an additional 21 percent of the historical records (235 records) from the Northeast (Watts 2016, p. 22). Recent (2011-2016) records from the Northeast are low in number (64 records), with almost all records restricted to outer coastal habitats (Watts 2016, pp. 22, 24). The distribution of the recent records points toward a substantial southward contraction in the subspecies' range of approximately 450 kilometers (280 miles), with vacated historical sites from 33 counties extending from the Newbury marshes in Massachusetts to Ocean County, New Jersey (Watts 2016, pp. 24, 119). Further, the distribution of the recent records has become patchy along the Atlantic coast, and an evaluation of the records within the 15 counties still currently occupied suggests an almost full collapse of the eastern black rail population in the Northeast (Watts 2016, p. 24).
While the Appalachians and Central Lowlands analysis units supported less habitat for eastern black rails compared to the more coastal analysis units, interior occurrences were more common historically. Current population estimates for states with a large area occurring within the boundaries of the Appalachians analysis unit are effectively zero (Watts 2016, p. 19). Within that unit, an estimated 0 to 5 breeding pairs currently occur in Pennsylvania, and no breeding pairs are thought to occur in New York or West Virginia (Watts 2016, p. 19). Birds previously detected in the Appalachians analysis unit were found in small depressional wetlands within active pastures; other freshwater wetlands dominated by cattails, rushes, or sedges; and drainage ditches (Watts 2016, pp. 48, 74). While these wetland types still exist within the analysis unit and may support single individuals or a very low-density, scattered population (Watts 2016, pp. 48, 74), a substantial amount of this kind of habitat has been lost primarily due to the draining of freshwater wetlands for agricultural purposes. These estimates likely hold true for the interior portions of the other States within the Appalachians analysis unit (
In the Chesapeake Bay region, the distribution of eastern black rail has contracted, and the counts of birds have declined. A series of systematic surveys for eastern black rails has been conducted around the Chesapeake Bay since the early 1990s (Watts 2016, pp. 59, 67). Surveys estimated 140 individuals in the 1990-1992 survey period, decreasing to 24 individuals in 2007, and only 8 individuals in 2014, a decline of over 90 percent in less than
Historically, the eastern black rail was also present during breeding months at inland and coastal locations throughout southeastern coastal States (the Southeast), a region that included North Carolina, South Carolina, Georgia, Florida, Tennessee, Mississippi, Alabama, Louisiana, and Texas (Watts 2016, pp. 75-76). Of these States, Texas, Florida, South Carolina, and North Carolina contained 89 percent of all historical observations (734 records) (Watts 2016, p. 77). The other States (Georgia, Tennessee, Mississippi, Alabama, and Louisiana) either do not have a history of supporting eastern black rails consistently or are considered to be on the peripheries of known breeding areas (Watts 2016, p. 77).
Recently, there have been 180 records of eastern black rails during the breeding season, and at a coarse view, the same 4 southeastern States that substantially supported the subspecies historically still support the subspecies (Watts 2016, pp. 77, 79). However, North Carolina shows a severe decline in the number of occupied sites, with only four properties occupied in 2014-2015, down from nine in 1992-1993 (Watts 2016, p. 80). Additional surveys in 2017 yielded no new occupied coastal sites, and no birds were detected at inland/freshwater sites from two surveys in 2018 (Watts
The history of the subspecies' distribution in the interior continental United States is poorly known. Historical literature indicates that a wide range of interior States were occupied by the eastern black rail, either regularly or as vagrants (Smith-Patten and Patten 2012, entire). Eastern black rails are currently vagrants (casual or accidental) in Arkansas, Illinois, Indiana, Iowa, Michigan, Minnesota, Missouri, Nebraska, New Mexico, Ohio, and Wisconsin (Smith-Patten and Patten 2012, entire). Presently, eastern black rails are reliably located within the Arkansas River Valley of Colorado (presumed breeder in the State) and in southcentral Kansas (confirmed breeder in the State) (Smith-Patten and Patten 2012, pp. 9, 17; Butler
Eastern black rail analysis units currently have low to no resiliency in the contiguous United States (Service 2019, pp. 79-82). The Great Plains, Southwest Coastal Plain, and Southeast Coastal Plain analysis units have low resiliency based on the dynamic occupancy model results, which indicate very low occupancy probabilities in each modeled analysis unit: 0.25 in the Southwest Coastal Plain, 0.13 in the Great Plains, and 0.099 in the Southeast Coastal Plain. The Mid-Atlantic Coastal Plain analysis unit currently exhibits very low resiliency for the eastern black rail. It supports fewer birds and has fewer occupied habitat patches than the Southeast Coastal Plain analysis unit. The remaining three analysis units, New England, Appalachians, and Central Lowlands, currently demonstrate no resiliency. These three units historically did not support abundances of the eastern black rail as high as the other four analysis units. There are currently insufficient detections to model these units; recent detections (2011 to present) are fewer than 20 birds for each analysis unit. An evaluation of current status information yields that eastern black rails are effectively extirpated from portions of the New England, Appalachians, and Central Lowlands analysis units that were once occupied. Lastly, resiliency is unknown for the Central America and Caribbean portion of the eastern black rail's range. However, the sparsity of historical and current records, including nest records, indicates that resiliency outside of the contiguous United States is likely low. All recent sightings in Central America and the Caribbean have been of adult eastern black rails; there are no reports of nests, chicks, or juveniles.
To assess current representation, we evaluated both habitat variability and latitudinal variability. When considering habitat variability, we determined the eastern black rail has a level of adaptive potential by using similar habitats elements (
Despite having a wide distribution, the eastern black rail currently has low redundancy across its range. With the loss of three analysis units in upper latitudes of the range, the subspecies has reduced ability to withstand catastrophic events, such as hurricanes and tropical storms, which could impact the lower latitudinal analysis units. Given the lack of habitat connectivity, and patchy and localized distribution, it would be difficult for the subspecies to recover from a catastrophic event in one or more analysis units.
The Act directs us to determine whether any species is an endangered species or a threatened species because of any factors affecting its continued existence. Under section 4(a)(1) of the Act, we may list a species based on (A) The present or threatened destruction, modification, or curtailment of its habitat or range; (B) overutilization for commercial, recreational, scientific, or educational purposes; (C) disease or predation; (D) the inadequacy of existing regulatory mechanisms; or (E) other natural or manmade factors affecting its continued existence. These factors represent broad categories of natural or human-caused actions or conditions that could have an effect on a species' continued existence. In evaluating these actions and conditions, we look for those that may have a negative effect on individuals of the species, as well as other actions or conditions that may ameliorate any negative effects or may have positive effects.
We use the term “threat” to refer in general to actions or conditions that are known to or are reasonably likely to negatively affect individuals of a species. The term “threat” includes actions or conditions that have a direct impact on individuals (direct impacts), as well as those that affect individuals through alteration of their habitat or required resources (stressors). The term “threat” may encompass—either together or separately—the source of the action or condition or the action or condition itself.
The mere identification of any threat(s) does not necessarily mean that the species meets the statutory definition of an “endangered species” or a “threatened species.” In determining whether a species meets either definition, we must evaluate all identified threats by considering the expected response by the species, and the effects of the threats—in light of those actions and conditions that will ameliorate the threats—on an individual, population, and species level. We evaluate each threat and its expected effects on the species, then analyze the cumulative effect of all of the threats on the species as a whole. We also consider the cumulative effect of the threats in light of those actions and conditions that will have positive effects on the species—such as any existing regulatory mechanisms or conservation efforts. The Secretary determines whether the species meets the definition of an “endangered species” or a “threatened species” only after conducting this cumulative analysis and describing the expected effect on the species now and in the foreseeable future. We reviewed the potential risk factors (
The eastern black rail is a wetland-dependent bird requiring dense emergent cover (
The eastern black rail also uses the transition zone (ecotone) between emergent wetlands and upland grasslands. These transitional areas are critical to eastern black rails, as they provide refugia during high-water events caused by precipitation or tidal flooding. These habitat types have also experienced significant declines over time (Sampson and Knopf 1994, pp. 418-421), with many areas within the eastern black rail's historical range losing over 90 percent of their prairie habitat. Most of this loss can be attributed to agricultural conversion (Sampson and Knopf 1994, pp. 419-420). Many of the freshwater wetlands associated with these grasslands were emergent and ephemeral in nature, and would have supported eastern black rails. For example, in Texas, between the 1950s and 1990s, 235,000 acres, or 29 percent, of freshwater wetlands within Gulf coastal prairie were converted primarily to upland agriculture and other upland land uses (Moulton
Despite regulatory efforts to minimize the loss of wetland habitats, losses and alterations continue to occur to habitats occupied by the eastern black rail. Marshes continue to face substantial impacts from dikes, impoundments, canals, altered freshwater inflows,
Within the range of the eastern black rail, land use in the United States has affected and continues to affect groundwater and surface water resources (Johnston 1997, entire; McGuire 2014, pp. 1-2, 7, 9; Barfield 2016, pp. 2-4; Juracek and Eng 2017, pp. 1, 11-16). The conversion of wetland habitat, largely for agricultural use, was mentioned above. However, habitat conversion and land use directly and indirectly affect water resources, largely tied to the interaction of groundwater and surface water resources (Sophocleous 2002, entire; Tiner 2003, p. 495; Glazer and Likens 2012, entire; Konikow 2015, entire; U.S. Geological Survey (USGS) 2016, unpaginated).
Where groundwater resources are hydraulically connected to surface water resources, these connections can either be unconfined (water table) or confined (springs) aquifers. In unconfined aquifers, locations can support surface features such as wetlands or riparian habitats where groundwater is located near the land surface (Haag and Lee 2010, pp. 16-19, 21-24). Lowering of groundwater through withdrawals via wells or ditches can cause wetlands to shrink or become dry. Withdrawals of confined aquifers can lead to the drying of springs and associated wetland habitats (Weber and Perry 2006, p. 1255; Metz 2011, p. 2). In the central and southcentral United States, high groundwater use, largely attributed to cropland irrigation and other human activities, may affect the long-term sustainability of water resources, including causing wetland loss (McGuire 2014, entire; Juracek 2015, entire; Juracek and Eng 2017, entire; Juracek
Human modifications to the environment have led to significant changes in vegetation. Some of these modifications include water withdrawals and the construction of levees, drainage canals, and dams. Changes to native vegetation can result in changes to the structure of the habitat (
Subsidence (lowering of the earth's surface) is caused by the withdrawal of liquids from below the ground's surface, which relieves supporting hydraulic pressure of liquids by the long-term compression of unconsolidated, geologically deposited sediments, or by other geologic processes (White and Tremblay 1995, entire; Day
Subsidence can affect the eastern black rail and its habitat in both fresh and tidal wetlands. Vegetated wetland habitats used by the eastern black rail can be converted to unvegetated open water or mudflats through drowning of vegetation or erosion from increased wave energy. Locations with higher subsidence rates can experience increased tidal flooding sooner than areas with lower subsidence rates (Sweet
Extensive drainage features have been created or modified in the United States, primarily to reduce flooding to protect agricultural land or infrastructure. These include excavation of drainage ditches, channelization of rivers and streams, construction of levees and berms, tidal restrictions, and diversions of waterways. Extensive areas of Florida were channelized in an effort to drain wetlands in the early 1900s (Renken
Levees have been constructed in flood-prone areas to minimize damage to crops and local communities. Levees can modify the duration, intensity, and frequencies of hydroperiods associated with riparian and tidal wetlands and thus change the nature and quality of wetland habitat, including that used by marsh-dependent species (Walker
All of these alterations to drainage affect the hydrology, sediment and nutrient transport, and salinities of wetland habitats used by the eastern black rail, which in turn affect the habitat's composition and structure. These changes can lead to instability in the duration and intensity of hydroperiods, affect associated vegetation communities, and impact the ability of marsh habitats to adapt to changing conditions. This situation affects the ability of the habitat to support populations of the eastern black rail, by exposing eastern black rails to unsuitable water regimes or converted habitats.
Representative concentration pathways (RCPs) are the current set of scenarios used for generating projections of climate change; for further discussion, please see the SSA report (Service 2019, entire). Recent studies project global mean sea level rise to occur within the range of 0.35 to 0.95 meters (m) (1.14 to 3.11 feet (ft)) for RCP 4.5, and within the range of 0.5 to 1.3 m (1.64 to 4.27 ft) for RCP 8.5, by 2100 (Sweet
Sea level rise will amplify coastal flooding associated with both high tide floods and storm surge (Buchanan
Along the Texas Gulf Coast, relative sea level rise is twice as large as the global average (Reidmiller
Even with sea level rise, some tidal wetlands may persist at slightly higher elevations (
Sea level rise will reduce the availability of suitable habitat for the eastern black rail and overwhelm habitat persistence. Sea level rise and its effects (
Fire suppression has been detrimental to habitats used by the eastern black rail by allowing encroachment of woody plants. Without fire or alternate methods of disturbing grassland and emergent wetland vegetation such as mowing or rotational grazing, the amount of preferred habitat for eastern black rails is expected to continue to decrease in some regions due to encroachment by woody vegetation, such as coastal Texas (Grace
While fire is needed for the maintenance of seral stages for multiple rail species, the timing and frequency of the burns, as well as the specific vegetation types targeted, can lead to undesirable effects on rail habitats in some cases (Eddleman
Prescribed fire at any time of the year may result in mortality to adult and juvenile birds, as well as eggs and chicks during the breeding season. Fall and winter burns are more likely to avoid reproductive season impacts (Nyman and Chabreck 1995, p. 138). When burning is needed during the nesting season (for example, brush control), loss of eggs and chicks can be reduced by limiting the proportion of eastern black rail habitat to be burned within a management boundary. Incorporating additional best management practices (BMPs) such as leaving unburned refugia within a controlled burn and planning burn rotations so that adjacent suitable habitat is present to accommodate these rails post-burn, are important at all times of the year to reduce mortality of birds.
Fire pattern can have profound effects on birds. Controlled burns can result in indirect rail mortality, as avian predators attracted to smoke are able to capture rails escaping these fires (Grace
Haying, mowing, and other mechanical treatment activities are used throughout the range of the eastern black rail. Mechanical treatment activities maintain grasslands by reducing woody vegetation encroachment, which may provide suitable habitat for eastern black rails. However, these practices can have detrimental impacts to wildlife when used too frequently or at the wrong time of year (Beintema and Muskens 1987, p. 755; Bollinger
Grazing, predominately by cattle, occurs on public and private lands throughout the range of the eastern black rail. Because eastern black rails occupy drier areas in wetlands and require dense cover, these birds are believed to be more susceptible to grazing impacts than other rallids (Eddleman
In addition to the loss of vegetation cover and height (Chabreck 1968, p. 56; Whyte and Cain 1981, p. 66; Kirby
Extreme weather effects, such as storms associated with frontal boundaries or tropical disturbances, can also directly affect eastern black rail survival and reproduction, and can result in direct mortality. Tropical storms and hurricanes are projected to increase in intensity and precipitation rates along the North Atlantic coast and Gulf Coast (Bender
Weather extremes associated with climate change can have direct effects on the eastern black rail, leading to reduced survival of eggs, chicks, and adults. Indirect effects on the eastern black rail are likely to occur through a variety of means, including long-term degradation of both inland and coastal wetland habitats. Other indirect effects may include loss of forage base of wetland-dependent organisms. Warmer and drier conditions will most likely reduce overall habitat quality for the eastern black rail. Because eastern black rails tolerate a narrow range of water levels and variation within those water levels, drying as a result of extended droughts may result in habitat becoming unsuitable, either on a permanent or temporary basis (Watts 2016, p. 120). Extreme drought or flooding conditions may also decrease bird fitness or reproductive success by reducing the availability of the invertebrate prey base (Hands
Human disturbance can stress wildlife, resulting in changes in distribution, behavior, demography, and population size (Gill 2007, p. 10). Activities such as birding and hiking, have been shown to disturb breeding and nesting birds. Disturbance may result in nest abandonment, increased predation, and decreased reproductive success, and in behavioral changes in non-breeding birds. Singing activity of breeding male birds declined in sites that experienced human intrusion, although the response varied among species and level of intrusion (Gutzwiller
Many birders strive to add rare birds to their “life list,” a list of every bird species identified within a birder's lifetime. Locations of rare birds are often posted online on local birding forums or eBird, leading to an increased number of people visiting the location in an attempt to see or hear the bird. Due to its rarity, the eastern black rail is highly sought after by birders (Beans and Niles 2003, p. 96). Devoted birders may go out of their way to add an eastern black rail to their life list (McClain 2016, unpaginated). The efforts of birders to locate and identify rare birds, such as the eastern black rail, can have both positive and negative impacts on the bird and its habitat. Birders play an especially important role in contributing to citizen science efforts, such as the eBird online database, and have helped further our understanding of species' distributions and avian migration ecology in crucial ways (Sullivan
While amateur and professional birding have made important contributions to our understanding of rare species like the eastern black rail, some birders may be more likely to pursue a sighting of a rare bird, as they may perceive the benefits of observing the bird to outweigh the impacts to the bird (Bireline 2005, pp. 55-57). As a result, methods may be employed to increase the likelihood of observing a rare bird, including the use of vocalized calls or audio recordings, as is the case for eastern black rails, or approaching birds in order to get a sighting (Beans and Niles 2003, p. 96; Bireline 2005, p. 55). These methods have the potential to disturb nesting birds or trample nests or eggs, and may lead to increased predation (Beans and Niles 2003, p. 96).
With the prevalence of smartphones, the use of playback calls has increased as recordings of birds are readily available on the internet, and birding websites and geographic site managers (State, Federal, or nongovernmental organizations) often provide guidance on the use of playback calls (Sibley 2001, unpaginated). The American Birding Association's Code of Birding Ethics encourages limited use of recordings and other methods of attracting birds, and recommends that birders never use such methods in heavily birded areas or for attracting any species that is endangered, threatened, of special concern, or rare in the local area (American Birding Association 2018, unpaginated). While most birders likely follow these ethical guidelines, using playback calls of eastern black rail vocalizations in attempts to elicit responses from the birds and potentially lure them into view is commonly done outside of formal eastern black rail surveys (eBird 2017, unpaginated). Due to the rarity of the eastern black rail, a few cases of trespassing are known from people looking for the bird (
It is likely that several stressors are acting synergistically or additively on the subspecies. The combination of multiple stressors may be more harmful than a single stressor acting alone. For the eastern black rail, a combination of stressors result in habitat loss, reduced survival, reduced productivity, and other negative impacts on the subspecies. Sea level rise, coupled with increased tidal flooding, results in the loss of the high marsh habitat required by the subspecies. Land management activities, such as prescribed burning, that are conducted without maintaining dense overhead cover or providing refugia in eastern black rail habitat will further exacerbate impacts. If these combined stressors occur too often within and across generations, they will limit the ability of the subspecies to maintain occupancy at habitat sites, which may become lost or unsuitable for the subspecies and limit its ability to
The Migratory Bird Treaty Act of 1918 (MBTA; 16 U.S.C. 703
Section 404 of the Clean Water Act (33 U.S.C. 1251
The black rail is listed as endangered under State law by seven States within the subspecies' range: Delaware, Illinois, Indiana, Maryland, New Jersey, New York, and Virginia. The species was formerly listed as endangered in Connecticut, but was considered extirpated during the last listing review based on extant data and was subsequently delisted. Protections are afforded to wildlife listed as either endangered or threatened by a State, but those protections vary by State. Although we have no information as to the effectiveness of these State regulations as they pertain to the conservation of the eastern black rail, one benefit of being State-listed is to bring heightened public awareness of the bird's existence.
In Delaware, the importation, transportation, possession, or sale of any endangered species or parts of endangered species is prohibited, except under license or permit (title 7 of the Delaware Code, sections 601-605). Illinois also prohibits the possession, take, transport, selling, and purchasing, or giving, of a listed species, and allows incidental taking only upon approval of a conservation plan (Illinois Compiled Statutes, chapter 520, sections 10/1-10/11). Indiana prohibits any form of possession of listed species, including taking, transporting, purchasing, or selling, except by permit (title 14 of the Indiana Code, article 22, chapter 34, sections 1-16 (I.C. 14-22-34-1 through 16)). Listed species may be removed, captured, or destroyed only if the species is causing property damage or is a danger to human health (I.C. 14-22-34-16).
Similar prohibitions on the possession of a listed species in any form, except by permit or license, are in effect in Maryland (Code of Maryland, Natural Resources, section 10-2A-01-09), New Jersey (title 23 of the New Jersey Statutes, sections 2A-1 to 2A-15), New York (New York's Environmental Conservation Law, article 11, title 5, section 11-0535; title 6 of the New York Codes, Rules and Regulations, chapter I, part 182, sections 182.1-182.16), and Virginia (Code of Virginia, title 29.1, section 29.1, sections 563-570 (29.1-563-570)). Violations of these statutes typically are considered misdemeanors, generally resulting in fines or forfeiture of the species or parts of the species and the equipment used to take the species. Some States also have provisions for nongame wildlife and habitat preservation programs (
Black rail is listed as a “species in need of conservation” in Kansas, which requires conservation measures to attempt to keep the species from becoming a State-listed endangered or threatened species (Kansas Department of Wildlife, Parks and Tourism 2018, unpaginated). Black rail also is listed as a species of “special concern” in North Carolina and requires monitoring (North Carolina Wildlife Resources Commission 2014, p. 6). The species is identified as a “species of greatest conservation need” in 19 State wildlife action plans as of 2015 (USGS 2017, unpaginated). However, no specific conservation measures for black rail are associated with these listings, and most are unlikely to address habitat alteration or sea level rise.
The Atlantic Coast Joint Venture (ACJV) recently decided to focus efforts on coastal marsh habitat and adopted three flagship species, one being the
The Gulf Coast Joint Venture (GCJV) has had the eastern black rail listed as a priority species since 2007 (GCJV 2005, unpaginated). As a priority species, the black rail is provided consideration during the review of North American Wetland Conservation grant applications (Vermillion 2018, pers. comm.). Although detailed planning for the eastern black rail is not yet complete, the subspecies is considered in coastal marsh habitat delivery efforts discussed by GCJV Initiative Teams. Eastern black rails are believed to benefit from a plethora of coastal marsh habitat delivery efforts of GCJV partners, including projects authorized under the North American Wetland Conservation Act (16 U.S.C. 4401
In November 2016, the Texas Parks and Wildlife Department (TPWD), in partnership with the Texas Comptroller's Office, initiated the Texas Black Rail Working Group (Shackelford 2018, pers. comm.). The main purpose of the group is to provide a forum for collaboration between researchers and stakeholders to share information about what is known about the species, identify information needs, and support conservation actions. The group has held two in-person meetings thus far: January 10, 2017, and August 9-10, 2018, and produced two newsletters and a conservation planning report (Horndeski and Shackelford 2017, entire; Horndeski 2018a, 2018b, entire).
As discussed above, we define viability as the ability of a species to sustain populations in the wild over time. To help address uncertainty associated with the degree and extent of potential future stressors and their impacts on the eastern black rail's needs, we applied the 3Rs using five plausible future scenarios. We devised these five scenarios by identifying information on the primary stressors anticipated to affect the subspecies into the future: Habitat loss, sea level rise, groundwater loss, and incompatible land management practices. These scenarios represent a realistic range of plausible future scenarios for the eastern black rail.
We used the results of our occupancy model to create a dynamic site-occupancy, projection model that allowed us to explore future conditions under these scenarios for the Mid-Atlantic, Great Plains, Southeast Coastal Plain, and Southwest Coastal Plain analysis units. We did not project future scenarios for the New England, Appalachian, or Central Lowlands analysis units because, as discussed earlier in this document, we consider these analysis units to be currently effectively extirpated and do not anticipate that this situation will change in the future. Our projection model incorporated functions to account for changes in habitat condition (positive and negative) and habitat loss over time. The habitat loss function was a simple reduction in the total number of possible eastern black rail sites at each time step in the simulation by a randomly drawn percentage that was specified under different scenarios to represent habitat loss due to development or sea level rise. We used the change in “developed” land cover from the National Land Cover Database (Homer
Our five scenarios reflected differing levels of sea level rise and land management, and the combined effects of both. These future scenarios forecast site occupancy for the eastern black rail out to 2100, with time steps at 2043 and 2068 (25 and 50 years from present, respectively). Each scenario evaluates the response of the eastern black rail to changes in three primary risks we identified for the subspecies: Habitat loss, sea level rise, and land management (grazing, fire, and haying). The trends of urban development and agricultural development remain the same,
The model predicted declines in all analysis units across all five plausible future scenarios. Specifically, they predicted a high probability of complete extinction for all four analysis units under all five scenarios by 2068. The model predicted that, depending on the scenario, the Southeast Coastal Plain and Mid-Atlantic Coastal Plain analysis units would reach complete extinction between 35 and 50 years from the present; the Great Plains analysis unit would reach complete extinction between 15 to 25 years from the present; and the Southwest Coastal Plain analysis unit would reach complete extinction between 45 to 50 years from the present. Most predicted occupancy declines were driven by habitat loss rates that were input into each scenario. The model results exhibited little sensitivity to changes in the habitat quality components in the simulations for the range of values that we explored. For a detailed discussion of the model results for the five scenarios, please refer to the SSA report (Service 2019, entire).
Under our future scenarios, the Mid-Atlantic Coastal Plain, Great Plains, Southwest Coastal Plain, and Southeast Coastal Plain analysis units generally exhibited a consistent downward trend in the proportion of sites remaining
We evaluated representation by analyzing the latitudinal variability and habitat variability of the eastern black rail. Under our future scenarios, the Great Plains analysis unit is projected to be extinct within the next 15 to 25 years, which will result in the loss of that higher latitudinal representative unit for the subspecies. In addition, the three remaining analysis units (Mid-Atlantic Coastal Plain, Southwest Coastal Plain, and Southeast Coastal Plain) are predicted to decline and reach extinction within the next 50 years. Thus, the subspecies' representation will continue to decline.
The eastern black rail will have very limited redundancy in the future. The Great Plains analysis unit will likely be extirpated in 15 to 25 years, leading to further reduction in redundancy and resulting in only coastal populations of the eastern black rail remaining. Having only coastal analysis units remaining (and with even lower resiliency than at present) will further limit the ability of the eastern black rail to withstand catastrophic events, such as flooding from hurricanes and tropical storms.
Please refer to the SSA report (Service 2019, entire) for a more detailed discussion of our evaluation of the biological status of the eastern black rail, the influences that may affect its continued existence, and the modeling efforts undertaken to further inform our analysis.
This final rule incorporates changes to our proposed rule based on the comments we received, as discussed below in the Summary of Comments and Recommendations. Based on these comments, we also incorporated as appropriate new information into our SSA report, including updated survey information from Colorado, North Carolina, and Georgia. Small, nonsubstantive changes and corrections were made throughout the document in response to comments. However, the information we received during the public comment period on the proposed rule did not change our determination that the eastern black rail is a threatened species. The information also did not cause us to revise our determination that designation of critical habitat for the eastern black rail is not prudent.
We received substantive comments on the proposed 4(d) rule and have made changes to this rule as a result of the public comments received. Below is a summary of substantive changes made to the final listing rule and 4(d) rule:
• Based on information received on South Dakota, we removed it from the list of States where eastern black rail is considered a vagrant.
• In the preamble to the 4(d) rule, we provided a description of “dense overhead cover” for the eastern black rail and identified three methods of assessing this cover.
• In the preamble to the 4(d) rule, we defined a “management boundary” to include individual landholdings, such as a National Wildlife Refuge boundary, or as being formed through landscape-level agreements across landholdings of different or contiguous ownerships.
• In the 4(d) rule and its preamble, we removed the seasonal restrictions and provided clarification on the BMPs identified under the fire management activities. Based on the comments received, we removed the prohibition of prescribed burn activities when these activities take place during the nesting, brooding, and post-breeding flightless molt period. We recognize the importance of using prescribed fire as a management tool for restoring and maintaining habitats on public and private lands and realize that, in order to meet specific management goals, flexibility is needed with regard to the timing of prescribed fire application. For example, a prescribed burn during the growing season may be necessary to target invasive vegetation. We also acknowledge that prescribed burns conducted at any time of the year that do not provide for escape routes and refugia may result in negative impacts to eastern black rails. Under the final 4(d) rule, incidental take of eastern black rails resulting from prescribed fires is prohibited unless BMPs that minimize negative effects of the prescribed burn on the eastern black rail are employed and a portion of occupied dense cover for the rail is maintained within management boundaries.
We received comments requesting that we provide more information or clarification on the BMPs to use when conducting prescribed burns in eastern black rail habitat. We received feedback on the BMPs from fire practitioners within the Service who have experience managing for prescribed fire within eastern black rail habitat. We determined that at least 50 percent of the eastern black rail habitat within the management boundary should provide dense overhead cover required by the species within one calendar year, and we revised the 4(d) preamble and rule accordingly.
In order to accommodate smaller landholdings, we are excepting landholdings smaller than 640 acres from maintaining 50 percent of eastern black rail habitat in any given calendar year, as we realize it could be challenging to manage for this percentage on small parcels of land. We clarified examples of tactics that can be used to provide unburned refugia and escape routes for the eastern black rail and identified that unburned refugia patches should be no smaller than 100 square feet.
• In the 4(d) preamble and rule, we clarified the exception for the haying, mowing, and other mechanical treatment activities as to existing infrastructure that may be included in the exception. We clarified that existing infrastructure includes existing firebreaks, roads, rights-of-way, levees, dikes, fence lines, airfields, and surface water irrigation infrastructure (
• In the 4(d) preamble and rule, we added an exception for incidental take that results from mechanical treatment activities that are done during the nesting or brooding periods with the purpose of controlling woody encroachment or other invasive plant species to restore degraded habitat.
• In the 4(d) rule and preamble, we removed the reference to “intensive or heavy grazing” in the prohibition. Based on a review of public comments, the terms “light,” “moderate,” and “heavy” grazing caused confusion. Eastern black rails may be found in grazed areas as long as dense overhead cover remains to provide them with suitable habitat. Therefore, grazing densities should maintain the dense overhead cover required by the eastern black rail and allow for the long-term maintenance of habitat conditions required by the subspecies. Because eastern black rails
• We added a prohibition to the 4(d) rule that prohibits incidental take of the eastern black rail that results from long-term or permanent conversion, fragmentation, and damage of persistent emergent wetland habitat and the contiguous wetland-upland transition zone to other habitat types or land uses. We received public comments requesting that we consider prohibiting activities, such as road construction, residential, commercial, and industrial development, commercial development, and oil and natural gas exploration and extraction, including seismic lines, as these may have negative impacts on the eastern black rail and its habitat. In our SSA report and proposed and final rule for the eastern black rail, we identified habitat loss and fragmentation as an ongoing and future threat to the subspecies. We agree that protecting the persistent emergent wetland habitat and contiguous wetland-upland transition zone is necessary and advisable for the conservation of the eastern black rail.
• We added an exception to the 4(d) rule for incidental take of eastern black rails that may result from prescribed burns, grazing activities, and mechanical treatment activities that take place in existing moist soil management units or prior converted croplands, such as impoundments for rice or other cereal grains. We received public comments requesting that we consider an exception for these types of units. Some individual managed wetland units have an established history of intensive vegetation and soil management, which may include burning during the growing season on an annual or nearly annual basis (
• We added an exception to the 4(d) rule for incidental take that may result from efforts to control wildfires and an exception for incidental take resulting from the establishment of new firebreaks (for example, to protect wildlands or manmade infrastructure) and new fence lines. Both of these activities allow for management that will benefit the conservation of the eastern black rail and its habitat, as well as provide for public safety.
In the proposed rule published on October 9, 2018 (83 FR 50610), we requested that all interested parties submit written comments on the proposal by December 10, 2018. We also contacted appropriate Federal and State agencies, scientific experts and organizations, and other interested parties and invited them to comment on the proposal. A newspaper notice inviting general public comments was published in the USA Today on October 15, 2018. We did not receive any requests for a public hearing. All substantive information provided during the comment period has either been incorporated directly into the SSA report or this final determination or addressed below.
In accordance with our peer review policy published on July 1, 1994 (59 FR 34270), we solicited expert opinion from knowledgeable individuals with scientific expertise that included familiarity with the eastern black rail and its habitat, biological needs, and threats. During development of the SSA report, we reached out to 10 peer reviewers and received responses from 5. We reviewed all comments received from the peer reviewers for substantive issues and new information regarding the eastern black rail. All comments were incorporated into the SSA report prior to the proposed rule. The reviewers were generally supportive of our approach and made suggestions and comments that strengthened our analysis. Peer reviewer comments are addressed in the following summary and incorporated into the SSA report and this final rule as appropriate.
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It would not be appropriate to assume that the public lands evaluated by Tolliver 2017 and private lands are managed the same and that the population estimates for Texas are actually higher than what is suggested in the SSA report. While habitat can be assessed through remote sensing methods, its quality is extremely difficult to assess using this method. The quality of the habitat (dense overhead herbaceous cover) is necessary to support eastern black rail occupancy.
Decisions under the Act cannot be made on a State-by-State basis, but at the species, subspecies, or distinct population segment (DPS) level. For the eastern black rail, we have determined that the subspecies warrants listing as a threatened species throughout its range based on current threats and how those threats are likely to impact the subspecies into the future.
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We defined the eastern black rail's range based on the data from reliable published scientific literature, submitted manuscripts, species' experts, and occurrence data. Range descriptions do not imply any limitations on the application of the prohibitions in the Act or implementing rules. Such prohibitions apply to all individuals of the species,
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Mottled ducks and other species of migratory birds may benefit from less burning activity during their peak nesting months. Either absence of grazing or the presence of light-intensity grazing is beneficial to mottled duck nesting habitat, while heavy grazing is not beneficial (Stutzenbaker 1988, pp. 72-81; Durham and Afton 2003, p. 440). As the 4(d) rule for eastern black rail does not restrict grazing at any period during the year as long as the grazing activity supports the maintenance of appropriate dense overhead cover, we anticipate no conflicts between grazing activities designed to manage mottled duck nesting habitat and eastern black rail habitat. Mechanical treatment activities are prohibited during the nesting and brooding season for the eastern black rail, and this prohibition will avoid incidental take of eastern black rails (via nest destruction and chick mortality) and will likely benefit nesting mottled ducks, as well. The 4(d) rule does not prohibit prescribed burns within (or outside) the sensitive period. The 4(d) rule enables the use of land management tools, such as prescribed burns and mechanical treatment activities, for waterfowl management and may also have positive impacts on the mottled duck.
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The conditions described in the rule allow site managers to maintain a mosaic of seral stages on their managed landscape that support many different species that may have slightly different needs including the eastern black rail. The 4(d) rule does not assign burn return intervals; rather, this is left to the discretion of the site manager. Ignition tactics, rates of spread, and flame lengths should allow for wildlife escape routes and avoid trapping birds in a fire. The 4(d) rule provides guidelines for burning using techniques that do not trap and kill eastern black rails. The 4(d) rule also includes guidelines for providing refugia during prescribed fires for this subspecies.
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When an action agency determines its proposed action “may affect” a listed species, all standard consultation procedures apply unless a programmatic consultation approach is developed. For example, if an action is anticipated to result in adverse effects (regardless of whether the effects will result in prohibited or excepted take) to the species, formal consultation is required. While the basic consultation procedures apply, any resulting biological opinions are different in that there are no incidental take statements or associated reasonable and prudent measures and terms and conditions for forms of take that are not prohibited by the 4(d) rule.
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Primary or original information sources are those that are closest to the subject being studied, as opposed to those that cite, comment on, or build upon primary sources. However, the Act and our regulations do not require us to use only peer-reviewed literature, but instead they require us to use the “best scientific and commercial data available” in a listing determination. We use information from many different sources, including articles in peer-reviewed journals, scientific status surveys and studies completed by qualified individuals, Master's thesis research that has been reviewed but not published in a journal, other unpublished governmental and nongovernmental reports, reports prepared by industry, personal communication about management or other relevant topics, conservation plans developed by States and counties, biological assessments, other unpublished materials, experts' opinions or personal knowledge, and other sources. We have relied on published articles, unpublished research, digital data publicly available on the internet, and the expert opinion of subject biologists to make a final listing determination for the eastern black rail.
We collected and used data from eBird (these records included historical records, observations from birders, and survey-collected data through 2017). The Center for Conservation Biology dataset provided an integrated dataset for U.S. coastal states, including surveys, literature, and museum records; these data are through 2016. The University of Oklahoma—Oklahoma Biological Survey dataset provided a similar integrated dataset of the interior United States through 2012. Sixteen research groups and States provide monitoring and inventory datasets with records through 2017. We also received updated survey information from some sources, including several States between the proposed and final rules.
Also, in accordance with our peer review policy published on July 1, 1994 (59 FR 34270), we solicited peer review from knowledgeable individuals with scientific expertise that included familiarity with the species, the geographic region in which the species occurs, and conservation biology principles. Additionally, we requested comments or information from other concerned governmental agencies, Native American Tribes, the scientific community, industry, and any other interested parties concerning the proposed rule. Comments and information we received helped inform this final rule.
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We recognize the salt marsh elevation in some locations may be able to keep pace with sea level rise (
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Section 4 of the Act (16 U.S.C. 1533) and its implementing regulations (50 CFR part 424) set forth the procedures for determining whether a species meets the definition of “endangered species” or “threatened species.” The Act defines an “endangered species” as a species that is “in danger of extinction throughout all or a significant portion of its range,” and a “threatened species” as a species that is “likely to become an endangered species within the foreseeable future throughout all or a significant portion of its range.” The Act requires that we determine whether a species meets the definition of “endangered species” or “threatened species” because of any of the following factors: (A) The present or threatened destruction, modification, or curtailment of its habitat or range; (B) Overutilization for commercial, recreational, scientific, or educational purposes; (C) Disease or predation; (D) The inadequacy of existing regulatory mechanisms; or (E) Other natural or manmade factors affecting its continued existence.
After evaluating threats to the subspecies and assessing the cumulative effect of the threats under the section 4(a)(1) factors, we summarize our findings below. We have carefully assessed the best scientific and commercial information available regarding the past, present, and future threats to the eastern black rail. When viewing historical occurrences on the State level compared to what is known of present distribution, the range contraction (from Massachusetts to New Jersey) and site abandonment (patchy coastal distribution) noted by Watts (2016, entire) appear to be occurring throughout the eastern United States. Over the past 10 to 20 years, reports indicate that populations have declined by 75 percent or greater. North of South Carolina, occupancy has declined by 64 percent and the number of birds detected has declined by 89 percent, equating to a 9.2 percent annual rate of decline (Watts 2016, p. 1).
In relative terms, regional strongholds still exist for this subspecies; however, the best available scientific data suggest that the remaining strongholds support a relatively small total population size,
Based on our review of the available science, we identified the current threats to eastern black rail. Habitat loss and degradation (Factor A) as a result of sea level rise along the coast and ground and surface water withdrawals are having a negative impact on the eastern black rail now and will continue to impact this subspecies into the future. Incompatible land management techniques (Factor E), such as the application of prescribed fire, haying, mowing, and grazing, have negative impacts on the bird and its habitat, especially when conducted at sensitive times, such as the breeding season or the flightless molt period. Stochastic events (Factor E), such as flood events and hurricanes, can have significant impacts on populations and the subspecies' habitat. For example, the impacts of Hurricane Harvey on the Texas coastal populations of eastern black rail likely caused direct mortality
As we consider the future risk factors to the eastern black rail, we recognize that a complex interaction of factors have synergistic effects on the subspecies as a whole. In coastal areas, sea level rise, as well as increasing storm frequency and intensity and increased flood events (which are both associated with high tides and storms), will have both direct and indirect effects on the subspecies. Extensive patches of high marsh required for breeding are projected to be lost or converted to low marsh or open water as a result of sea level rise. Demand for groundwater is increasing, which will reduce soil moisture and surface water, and thus negatively impact wetland habitat. We expect to see localized subsidence, which can occur when groundwater withdrawal rates are greater than the aquifer recharge rates. Also, warmer and drier conditions (associated with projected drought increases) will reduce overall habitat quality for the eastern black rail. Further, incompatible land management (such as fire application and grazing) will continue to negatively impact the subspecies throughout its range, especially if done during the breeding season or flightless molt period.
These stressors contribute to the subspecies' occupancy at sites and thus its population numbers. Some stressors have already resulted in permanent or long-term habitat loss, such as the historical conversion of habitat to agriculture, while other factors may only affect sites temporarily, such as a fire or annually reduced precipitation. Even local but too frequent intermittent stressors, such as unusual high tides or prescribed fire, can cause reproductive failure or adult mortality, respectively, and thus reduce eastern black rail occupancy at a site and the ability of a site to allow for successful reproduction of individuals to recolonize available sites elsewhere. While these intermittent stressors allow for recolonization at sites, recolonization is based on productivity at other sites within a generational timescale for the subspecies. If these stressors, combined, occur too often within and across generations, they limit the ability of the subspecies to maintain occupancy at habitat sites and also limit its ability to colonize other previously occupied sites or new sites.
It is likely that several of these stressors are acting synergistically on the subspecies. Sea level changes, together with increasing peak tide events and higher peak flood events, wetland subsidence, past wetland filling and wetland draining, and incompatible land management (
Although the eastern black rail has experienced reductions in its numbers and seen a range contraction, this subspecies is still relatively widespread in terms of its geographic extent. It continues to maintain a level of representation in four analysis units, which demonstrates continued latitudinal variability across its range. These four analysis units are spread throughout most of the subspecies' range, providing for some level of redundancy. Though the resiliency in the four currently occupied analysis units is low, Florida and Texas remain strongholds for the subspecies in the Southeast and Southwest. The current condition of the subspecies still provides for resiliency, redundancy, and representation such that it is not at risk of extinction now throughout its range.
However, our estimates of future resiliency, redundancy, and representation for the eastern black rail are further reduced from the current condition, consistent with this analysis of future threats. Currently, three analysis units are effectively extirpated, and four analysis units that continue to support populations of the eastern black rail all have low levels of resiliency. Given the projected future decreases in resiliency for these four analysis units, the eastern black rail will become more vulnerable to extirpation from ongoing threats, consequently resulting in concurrent losses in representation and redundancy. The range of plausible future scenarios of the eastern black rail all predict extirpation for all four analysis units by mid-century (2068) with the Great Plains analysis units potentially becoming extirpated within 15 to 25 years (depending on the scenario). In short, our analysis of the subspecies' current and future conditions show that the population and habitat factors used to determine the resiliency, representation, and redundancy for the subspecies will continue to decline so that it is likely to become in danger of extinction throughout its range within the foreseeable future.
Our implementing regulations at 50 CFR 424.11(d) set forth a framework within which we evaluate the foreseeable future on a case-by-case basis. The term foreseeable future extends only so far into the future as the Services can reasonably determine that both the future threats and the species' responses to those threats are likely. The foreseeable future extends only so far as the predictions about the future are reliable. “Reliable” does not mean “certain”; it means sufficient to provide a reasonable degree of confidence in the prediction. In the same way, a “reliable prediction” is also meant in a non-technical, ordinary sense and not necessarily in a statistical sense. Analysis of the foreseeable future uses the best scientific and commercial data available and should consider the timeframes applicable to the relevant threats and to the species' likely responses to those threats in view of its life-history characteristics.
In cases where the available data allow for quantitative modeling or projections, the time horizon for such analyses does not necessarily dictate what constitutes the “foreseeable future” or set the specific threshold for determining when a species may be in danger of extinction. Rather, the foreseeable future can extend only as far as the Service can reasonably explain reliance on the available data to formulate a reliable prediction and avoid reliance on assumption, speculation, or preconception. Regardless of the type of data available underlying the Service's analysis, the key to any analysis is a clear articulation of the facts, the rationale, and conclusions regarding foreseeability.
We identify the foreseeable future for the eastern black rail to be 25 to 50 years from the present. We consider 25 to 50 years “foreseeable” in this case because this timeframe includes projections from our modeling efforts and takes into account the threats acting upon the eastern black rail and its habitat and how we consider the eastern black rail will respond to these threats in the future. For all five plausible scenarios, all analysis units exhibited a consistent downward trend in the proportion of sites remaining occupied after the first 25 years (by 2043), with extirpation for all analysis units by 2068. The Great Plains analysis unit is predicted to be extirpated by 2043. Given that future projections of habitat loss are expected to continue and be exacerbated by sea level rise and tidal flooding, resiliency
We find that the eastern black rail is likely to become endangered throughout all of its range within the foreseeable future. It is facing threats across its range that have led to reduced resiliency, redundancy, and representation, and we expect the subspecies to continue to decline into the future. Thus, after assessing the best available information, we conclude that the eastern black rail is not currently in danger of extinction, but is likely to become in danger of extinction within the foreseeable future throughout all of its range.
Under the Act and our implementing regulations, a species may warrant listing if it is endangered or threatened throughout all or a significant portion of its range. The court in
Following the court's holding in
We then considered the current status of the remaining analysis units—the Great Plains, Mid-Atlantic Coastal Plain, Southeast Coastal Plain, and Southwest Coastal Plain—to determine if any portion may be in danger of extinction now. We evaluated the Mid-Atlantic Coastal Plain and Southeast Coastal Plain as one portion, because we used the results from the Southeast Coastal Plain to help infer the current resiliency of the Mid-Atlantic Coastal Plain, these analysis units are adjacent to one another along the Atlantic coast, and we suspect that the birds within the Mid-Atlantic Coastal Plain overwinter in the Southeast Coastal Plain.
As discussed in our SSA report and above, the eastern black rail's current distribution is patchy across the range of the species. Our occupancy model results indicated that eastern black rail analysis units currently have low to very low resiliency across these portions based on the occupancy model results (Service 2019, pp. 94-95). The Mid-Atlantic Coastal Plain currently exhibits very low resiliency for eastern black rail as it supports fewer birds and occupied habitat patches than the Southeast Coastal Plain. Current estimates for the Mid-Atlantic and Southeast Coastal Plain (
The Southwest Coastal Plain also has a stronghold of birds, with an estimated 1,299 individuals on the upper Texas coast within specific protected areas prior to Hurricane Harvey (Tolliver et al. 2017, p. 18). The remaining Gulf Coast states support few to no birds during the breeding season. Alabama and Mississippi had a population estimate of zero breeding pairs and Louisiana supported an estimated zero to ten breeding pairs in 2016 (Watts, 2016, p. 19). However, recent first-time surveys conducted in Louisiana during the breeding and non-breeding seasons in 2017 and 2018 detected eastern black rails at 21 of 152 survey points (Johnson and Lehman, 2019b, p. 6), confirming a small year-round population in the state.
In the Great Plains analysis unit there are no current population estimates from the interior States still known to support the species (
When determining whether a species is endangered in any portion, there is often a temporal aspect of the analysis. We consider whether the species is presently on the brink of extinction, as opposed to likely to become so in the foreseeable future. This species faces significant habitat loss and conversion from different drivers, including development pressure, groundwater extraction, incompatible land management practices, and impacts from climate change (
The Great Plains analysis unit had the shortest time to potential extirpation, forecasting between 15 to 25 years from the present depending on the scenario. However, we determined the one scenario resulting in extirpation within 15 years is a worst-case scenario and is unlikely to be an accurate representation of the species viability in that portion. As noted above, there are no current population estimates from Great Plains analysis unit, but there are consistently detected populations of eastern black rails at a site in Kansas and along the Arkansas River Basin in southeastern Colorado. At the time of the SSA projection analysis, replicated survey data for Colorado were unavailable and data from Kansas (Hands 2009, entire) were used to represent the Great Plains analysis unit. While the Kansas dataset was from a survey for all secretive marshbirds and not a black rail-specific survey, the dataset included eastern black rail detections and represented the best available scientific information at the time of the SSA analysis. However, more recent surveys indicate a higher occupancy rate for portions of the Great Plains (Rossi and Runge 2018, entire).
Given our review of the current condition of the eastern black rail, the additional information from the 2018 surveys in the Great Plains, and our future projection models, we conclude that, while the species is likely to become in danger of extinction within each of these portions within the foreseeable future, we do not find that these portions are in danger of extinction now. Thus, there are no portions of the species' range where the species has a different status from its range-wide status. Therefore, no portion of the species' range provides a basis for determining that the species is in danger of extinction in a significant portion of its range, and we determine that the species is likely to become in danger of extinction within the foreseeable future throughout all of its range. This is consistent with the courts' holdings in
Our review of the best available scientific and commercial information indicates that the eastern black rail meets the definition of a threatened species. Therefore, we are listing the eastern black rail as a threatened species in accordance with sections 3(20) and 4(a)(1) of the Act.
Conservation measures provided to species listed as endangered or threatened species under the Act include recognition, recovery actions, requirements for Federal protection, and prohibitions against certain practices. Recognition through listing results in public awareness, and conservation by Federal, State, Tribal, and local agencies; private organizations; and individuals. The Act encourages cooperation with the States and other countries and calls for recovery actions to be carried out for listed species. The protection required by Federal agencies and the prohibitions against certain activities are discussed, in part, below.
The primary purpose of the Act is the conservation of endangered and threatened species and the ecosystems upon which they depend. The ultimate goal of such conservation efforts is the recovery of these listed species, so that they no longer need the protective measures of the Act. Subsection 4(f) of the Act calls for the Service to develop and implement recovery plans for the conservation of endangered and threatened species. The recovery planning process involves the identification of actions that are necessary to halt or reverse the species' decline by addressing the threats to its survival and recovery. The goal of this process is to restore listed species to a point where they are secure, self-sustaining, and functioning components of their ecosystems.
Recovery planning includes the development of a recovery outline shortly after a species is listed and preparation of a draft and final recovery plan. The recovery outline guides the immediate implementation of urgent recovery actions and describes the process to be used to develop a recovery plan. Revisions of the plan may be done to address continuing or new threats to the species, as new substantive information becomes available. The recovery plan also identifies recovery criteria for review of when a species may be ready for reclassification from endangered to threatened (“downlisting”) or removal from the Lists of Endangered and Threatened Wildlife and Plants (“delisting”), and methods for monitoring recovery progress. Recovery plans also establish a framework for agencies to coordinate their recovery efforts and provide estimates of the cost of implementing recovery tasks. Recovery teams (composed of species experts, Federal and State agencies, nongovernmental organizations, and stakeholders) are often established to develop recovery plans. When completed, the recovery outline, draft recovery plan, and the final recovery plan will be available on our website (
Implementation of recovery actions generally requires the participation of a broad range of partners, including other Federal agencies, States, Tribes, nongovernmental organizations, businesses, and private landowners. Examples of recovery actions include habitat restoration (
Following publication of this final listing rule, funding for recovery actions will be available from a variety of sources, including Federal budgets, State programs, and cost share grants for non-Federal landowners, the academic community, and nongovernmental organizations. In addition, pursuant to section 6 of the Act, the U.S. States and territories of Alabama, Arkansas, Colorado, Connecticut, Delaware, Florida, Georgia, Illinois, Indiana, Iowa, Kansas, Louisiana, Maryland, Massachusetts, Mississippi, Missouri, Nebraska, New Hampshire, New Jersey, New York, North Carolina, Ohio, Oklahoma, Pennsylvania, Puerto Rico, Rhode Island, South Carolina, Tennessee, Texas, Virginia, U.S. Virgin Islands, and West Virginia would be eligible for Federal funds to implement management actions that promote the protection or recovery of the eastern black rail. Information on our grant programs that are available to aid species recovery can be found at:
Please let us know if you are interested in participating in recovery efforts for this subspecies. Additionally, we invite you to submit any new information on this subspecies whenever it becomes available and any information you may have for recovery planning purposes (see
Section 7(a) of the Act requires Federal agencies to evaluate their actions with respect to any species that is proposed or listed as an endangered or threatened species and with respect to its critical habitat, if any is designated. Regulations implementing this interagency cooperation provision of the Act are codified at 50 CFR part 402. Section 7(a)(4) of the Act requires Federal agencies to confer with the Service on any action that is likely to jeopardize the continued existence of a species proposed for listing or result in destruction or adverse modification of proposed critical habitat. If a species is listed subsequently, section 7(a)(2) of the Act requires Federal agencies to ensure that activities they authorize, fund, or carry out are not likely to jeopardize the continued existence of the species or destroy or adversely modify its critical habitat. If a Federal action may affect a listed species or its critical habitat, the responsible Federal agency must enter into consultation with the Service.
Federal agency actions within the eastern black rail's habitat that may require conference or consultation or both as described in the preceding paragraph include management and any other landscape-altering activities on Federal lands administered by the U.S. Fish and Wildlife Service and National Park Service; issuance of section 404 Clean Water Act (33 U.S.C. 1251
Section 4(d) of the Act states that the “Secretary shall issue such regulations as he deems necessary and advisable to provide for the conservation” of species listed as threatened. The U.S. Supreme Court has noted that very similar statutory language demonstrates a large degree of deference' to the agency (see
The courts have recognized the extent of the Secretary's discretion under this standard to develop rules that are appropriate for the conservation of a species. For example, courts have approved rules developed under section 4(d) that include a taking prohibition for threatened wildlife, or include a limited taking prohibition (see
The Service has developed a species-specific 4(d) rule that is designed to address the eastern black rail's specific threats and conservation needs. Although the statute does not require the Service to make a “necessary and advisable” finding with respect to the adoption of specific prohibitions under section 9, we find that this rule as a whole satisfies the requirement in section 4(d) of the Act to issue regulations deemed necessary and advisable to provide for the conservation of the eastern black rail. As discussed under the Determination section, the Service has concluded that the eastern black rail is at risk of extinction within the foreseeable future due to continued wetland habitat loss, sea level changes, increasing storm frequency and intensity and increased flood events (which are both associated with high tides and storms), wetland subsidence, and land management practices (
Under the Act, “take” means to harass, harm, pursue, hunt, shoot, wound, kill, trap, capture, or collect, or to attempt to engage in any such conduct. Some of these provisions have been further defined in regulation at 50 CFR 17.3. Take can result knowingly or otherwise, by direct and indirect impacts, intentionally or incidentally. As discussed under the Summary of Biological Status and Threats (above), multiple factors are affecting the status of the eastern black rail. A range of activities have the potential to impact the eastern black rail, including fire management, grazing, mechanical treatment activities, and long-term or permanent conversion, fragmentation, and damage of persistent emergent wetland habitat and the contiguous wetland-upland transition zone to other habitat types or land uses. Regulating incidental take from these activities would help preserve the species' remaining populations and decrease
A major goal of the 4(d) rule is to minimize incidental take and to maintain the dense overhead cover that the subspecies needs. For the purposes of this rule, we define dense overhead cover as cover that exists in excess of the height of an eastern black rail, and is assessed from above in terms of herbaceous persistent emergent wetland plant cover (as defined by Cowardin et al. 1979, p. 20) versus non-vegetative cover of the ground, including bare ground itself. Eastern black rails typically occupy areas with overhead cover that permits little or no view of bare ground. This type of cover has been assessed by three different means for eastern black rails: (1) The visual estimate of overhead cover in a 50-m radius centered upon the point of interest (
Under this 4(d) rule, incidental take resulting from fire management activities, grazing activities, and haying, mowing, and other mechanical treatment activities would be prohibited unless otherwise noted. Regardless of management tool, be it mowing, haying, other mechanical treatment activities, fire, or grazing, within a management boundary, a minimum of 50 percent of habitat (
Prescribed fire is an essential management tool for re-initialization of vegetative succession and seral sequencing for restoring and maintaining habitats on public and private lands, which is important to ensure suitable habitat for maintaining populations of the eastern black rail. Wildland fire occurrence from both natural and human ignition sources can occur any time of the year across much of the eastern black rail's distribution. Eastern black rails can survive fires that slowly progress in a way where individuals can move ahead of the flames and when areas of unburned refugia are available. Refugia can include wetter areas with emergent vegetation, areas with natural or created firebreaks, or areas not conducive to burning (
While the application of prescribed fire may temporarily affect breeding success of individual eastern black rails, periodic burning supports appropriate seral stages and other beneficial features of the habitat conditions necessary for this species. Fire return frequencies in areas known to support eastern black rails should be infrequent to a degree that suitable habitat is available for several years to breeding individuals and yet frequent enough to maintain suitable eastern black rail habitat. These fire return frequencies may vary across the species' range and, therefore, should be determined by site managers. Fire regimes should provide a broad range of habitat conditions, such as adequate breeding habitat and overhead cover, to support completion of the life cycle of individuals and that, overall, provide for population maintenance and growth. Strategies to accomplish this objective should minimize incidental take of eggs and chicks, where possible. If the prescribed fire occurs during the breeding and nesting season, adults that lose eggs and chicks would have the opportunity to re-nest in unaffected areas. Certain prescribed fire practices can result in unnecessary mortality of eastern black rail during both the breeding and non-breeding season.
The 4(d) rule prohibits incidental take of eastern black rails resulting from prescribed fires throughout the year, unless the practices described below, which would minimize incidental take of eastern black rails and provide for long-term habitat needs for the eastern black rail and other cover-dependent species, are followed. Practices include:
• Regardless of the size of the area under management with prescribed fire, a broad range of habitat conditions should be maintained by burning on a rotational basis, which supports black rail population maintenance and growth. In any given calendar year, at least 50 percent of eastern black rail habitat within a management boundary should be maintained in order to provide the dense overhead cover required by the subspecies. This percentage does not apply to landholdings smaller than 640 acres.
• Where eastern black rail are present, the application of prescribed fire uses tactics that provide unburned refugia allowing birds to survive a fire (
• Ignition tactics, rates of spread, and flame lengths should allow for wildlife escape routes and avoid trapping birds in a fire. The application of prescribed fire should avoid fires, such as ring and strip head fires, that have long, unbroken boundaries and/or that come together in a short period of time and which consume essentially all vegetation and prevent black rails from escaping a fire. If aerial ignition is the chosen tool, ignitions should be conducted in such a way that large, fast-moving fires are avoided. Special precautions should be taken when using aerial ignition, and using short flanking fires into prevailing wind to slow the rate of spread is recommended.
For landholdings smaller than 640 acres, we are excepting these areas from
This provision of the 4(d) rule for fire management activities would promote conservation of the eastern black rail by encouraging continued management of the landscape in ways that meet management needs while simultaneously ensuring the continued survival and propagation of the eastern black rail and by providing suitable habitat.
Haying and mowing can maintain eastern black rail habitat by reducing woody vegetation encroachment. Mechanical treatment activities include disking (using a disk, harrow, or other tractor-drawn implement) and brush clearing (using a variety of tools that may be attached to a tractor or a stand-alone device). While these practices can be used to enhance eastern black rail habitat, the timing and manner of implementation can impact recruitment and survival.
Haying, mowing, and mechanical treatment activities in persistent emergent wetlands should be avoided during the nesting and brood-rearing periods where eastern black rails are present. We define persistent, emergent wetlands as areas where persistent emergent plants (
Haying, mowing, and mechanical treatment activities in persistent emergent wetlands that take place during critical time periods for eastern black rail (
We recognize haying, mowing, or other mechanical treatment activities may need to be used for maintenance requirements to ensure safety and operational needs for existing infrastructure, and we understand that these maintenance activities may need to take place during the nesting or brooding periods. These include maintenance of existing firebreaks, roads, rights-of-way, levees, dikes, fence lines, airfields, and surface water irrigation infrastructure (
We also except incidental take that results from mechanical treatment activities that are done during the nesting or brooding periods with the purpose of controlling woody encroachment or other invasive plant species to restore degraded habitat. It is unlikely that eastern black rails will be occupying areas of unsuitable habitat, and mechanical treatment activities to remove woody vegetation or other invasive plant species may help restore habitat and allow for eastern black rail use in the future. Invasive species (both native [
We do not prohibit incidental take from mowing, haying, or other mechanical treatment activities outside of the nesting or brood-rearing periods. However, we encourage land managers to employ voluntary BMPs outside of these time periods in emergent wetlands with eastern black rails present. BMPs for haying, mowing, and mechanical treatment activities include avoiding treatment of more than 50 percent of a contiguous block of habitat resources in emergent wetlands where eastern black rails are present; providing untreated (
This provision of the 4(d) rule for haying, mowing, and other mechanical treatment activities in persistent emergent wetlands would promote conservation of the eastern black rail by prohibiting incidental take of eastern black rail during the nesting and brood-rearing period.
Based on current knowledge of grazing and eastern black rail occupancy, the specific timing, duration, and intensity of grazing will result in varying impacts to the eastern black rail and its habitat. Either no grazing or light-to-moderate grazing may be compatible with eastern black rail occupancy under certain conditions, while intensive or heavy grazing is likely to have negative effects on eastern black rails and the quality of their habitat. Intensive or heavy grazing may lead to the removal of required dense overhead cover, as well as disturbance of nesting birds and possible destruction of nests and mortality of eggs and chicks due to trampling. Grazing densities should maintain the dense overhead cover required by the eastern black rail and allow for the long-term maintenance of habitat conditions required by the eastern black rail.
Grazing practices support other land use purposes and management goals, including resetting of grassland and marsh seral stages necessary to support habitat needs of various species. Grazing (such as short duration grazing) is sometimes used to delay seral stage succession as a surrogate for prescribed fire.
We are limiting this prohibition to public lands whose intended purpose is wildlife and/or habitat conservation,
The rule prohibits incidental take resulting from grazing activities on public lands that, individually or cumulatively with other land management practices, do not maintain at least 50 percent of eastern black rail habitat,
The eastern black rail is a wetland-dependent bird requiring dense overhead cover and soils that are moist to saturated (occasionally dry) and interspersed with or adjacent to very shallow water (typically ≤3 cm) to support its resource needs. Eastern black rails occur across an elevational gradient that lies between low marsh and uplands. Their location across this gradient may vary depending on hydrologic conditions. The wetland-upland transition zone is a narrow band of habitat where wetlands and uplands intersect and contains vegetation types from both ecotones and are important to provide refugia during flooding events and minimize the risk of predation (Evens and Page 1986). For activities planned within the wetland-upland transition zone, we encourage you to contact the local Ecological Services Field Office (
Although conservation measures to protect wetlands have resulted in meaningful decreases in the rate of wetland habitat loss, loss of emergent wetlands continues (Service 2019, entire). The most recent wetlands status and trends report indicates that estuarine emergent wetland losses are mostly attributable to conversion to open water through erosion (Dahl and Stedman 2013, p. 37), while freshwater emergent wetland losses appear to be the result of development (Dahl and Stedman 2013, p. 35). While we cannot prohibit incidental take that may result from the effects of climate change, such as sea level rise or erosion, we can ensure that incidental take of eastern black rails that results from conversion or fragmentation of wetlands and the contiguous wetland-upland transition zone outside of natural community shifts (
This prohibition addresses public comments received requesting that the Service include measures to address impacts from infrastructure development and construction activities in eastern black rail habitat.
This 4(d) rule provides for the conservation of the eastern black rail by prohibiting the following activities, except as otherwise authorized or permitted: Importing or exporting; purposeful take; possession and other acts with unlawfully taken specimens; delivering, receiving, transporting, or shipping in interstate or foreign commerce in the course of commercial activity; or selling or offering for sale in interstate or foreign commerce. We extend the Act's section 9(a)(1)(A) and 9(a)(1)(D)-(F) prohibitions to the eastern black rail throughout its range.
We may issue permits to carry out otherwise prohibited activities involving threatened wildlife under certain circumstances. Regulations governing permits are codified at 50 CFR 17.32. With regard to threatened wildlife, a permit may be issued for the following purposes: For scientific purposes, to enhance propagation or survival, for economic hardship, for zoological exhibition, for educational purposes, for incidental taking, or for special purposes consistent with the purposes of the Act. There are also certain statutory exemptions from the prohibitions, which are found in sections 9 and 10 of the Act.
The Service recognizes the special and unique relationship with our state natural resource agency partners in contributing to conservation of listed species. State agencies often possess scientific data and valuable expertise on the status and distribution of endangered, threatened, and candidate species of wildlife and plants. State agencies, because of their authorities and their close working relationships with local governments and landowners, are in a unique position to assist the Services in implementing all aspects of the Act. In this regard, section 6 of the Act provides that the Services shall cooperate to the maximum extent practicable with the States in carrying out programs authorized by the Act. Therefore, any qualified employee or agent of a State conservation agency that is a party to a cooperative agreement with the Service in accordance with section 6(c) of the Act, who is designated by his or her agency for such purposes, would be able to conduct activities designed to conserve the eastern black rail that may result in otherwise prohibited take without additional authorization.
We recognize that some individual managed wetland units have an established history of intensive vegetation and soil management, which may include burning, during the growing season on an annual or nearly annual basis (
We are excepting incidental take resulting from actions taken to control wildfires. There are also incidental take exceptions for construction of new firebreaks (for example, to protect wildlands or manmade infrastructure) and fence lines, as these are needed when management units are subdivided or new property is acquired. Both of these activities allow for improved targeted management that benefits the habitat needs of eastern black rails and provide for public safety.
Nothing in this 4(d) rule changes in any way the recovery planning provisions of section 4(f) of the Act, the consultation requirements under section 7 of the Act, or the ability of the Service to enter into partnerships for the management and protection of the eastern black rail. However, interagency cooperation may be further streamlined through planned programmatic consultations for the species between Federal agencies and the Service. We ask the public, particularly State agencies and other interested stakeholders that may be affected by the 4(d) rule, to contact us regarding additional guidance and methods that the Service could provide or use, respectively, to streamline the implementation of this 4(d) rule (see
Critical habitat is defined in section 3 of the Act as:
(1) The specific areas within the geographical area occupied by the species, at the time it is listed in accordance with the Act, on which are found those physical or biological features:
(a) Essential to the conservation of the species, and
(b) Which may require special management considerations or protection; and
(2) Specific areas outside the geographical area occupied by the species at the time it is listed, upon a determination that such areas are essential for the conservation of the species.
Conservation, as defined at section 3 of the Act, means to use and the use of all methods and procedures that are necessary to bring an endangered or threatened species to the point at which the measures provided pursuant to the Act are no longer necessary. Such methods and procedures include, but are not limited to, all activities associated with scientific resources management such as research, census, law enforcement, habitat acquisition and maintenance, propagation, live trapping, and transplantation, and, in the extraordinary case where population pressures within a given ecosystem cannot be otherwise relieved, may include regulated taking.
Critical habitat receives protection under section 7 of the Act through the requirement that Federal agencies ensure, in consultation with the Service, that any action they authorize, fund, or carry out is not likely to result in the destruction or adverse modification of critical habitat. The designation of critical habitat does not affect land ownership or establish a refuge, wilderness, reserve, preserve, or other conservation area. Such designation does not allow the government or public to access private lands. Such designation does not require implementation of restoration, recovery, or enhancement measures by non-Federal landowners. Where a landowner requests Federal agency funding or authorization for an action that may affect a listed species or critical habitat, the consultation requirements of section 7(a)(2) of the Act would apply, but even in the event of a destruction or adverse modification finding, the obligation of the Federal action agency and the landowner is not to restore or recover the species, but to implement reasonable and prudent alternatives to avoid destruction or adverse modification of critical habitat.
Section 4 of the Act requires that we designate critical habitat on the basis of the best scientific data available. Further, our Policy on Information Standards Under the Endangered Species Act (published in the
Section 4(a)(3) of the Act, as amended, and implementing regulations (50 CFR 424.12), require that, to the maximum extent prudent and determinable, the Secretary designate critical habitat at the time the species is determined to be endangered or threatened. Our regulations (50 CFR 424.12(a)(1)) state that the Secretary may, but is not required to, determine that a designation would not be prudent in the following circumstances:
(i) The species is threatened by taking or other human activity and identification of critical habitat can be expected to increase the degree of such threat to the species;
(ii) The present or threatened destruction, modification, or curtailment of a species' habitat or range is not a threat to the species, or threats to the species' habitat stem solely from causes that cannot be addressed through management actions resulting from consultations under section 7(a)(2) of the Act;
(iii) Areas within the jurisdiction of the United States provide no more than negligible conservation value, if any, for a species occurring primarily outside the jurisdiction of the United States;
(iv) No areas meet the definition of critical habitat; or
(v) The Secretary otherwise determines that designation of critical habitat would not be prudent based on the best scientific data available.
In the proposed listing rule (83 FR 50610, October 9, 2018), we determined that designation of critical habitat for the eastern black rail would not be prudent. However, we invited public comment and requested information on the threats of taking or other human activity, particularly by birders, on the eastern black rail and its habitat, and the extent to which designation might
During the comment period, we did not receive any substantive comments, or any comments that would require us to change the not prudent determination or our rationale for it (see 83 FR 50627-50628). Therefore, we restate our conclusion that the designation of critical habitat is not prudent, in accordance with 50 CFR 424.12(a)(1), because the eastern black rail and its habitat face a threat by overzealous birders, and designation can reasonably be expected to increase the degree of these threats to the subspecies and its habitat by making location information more readily available.
We have determined that environmental assessments and environmental impact statements, as defined under the authority of the National Environmental Policy Act, need not be prepared in connection with listing a species as an endangered or threatened species under the Endangered Species Act. We published a notice outlining our reasons for this determination in the
In accordance with the President's memorandum of April 29, 1994 (Government-to-Government Relations with Native American Tribal Governments; 59 FR 22951), Executive Order 13175 (Consultation and Coordination With Indian Tribal Governments), and the Department of the Interior's manual at 512 DM 2, we readily acknowledge our responsibility to communicate meaningfully with recognized Federal Tribes on a government-to-government basis. In accordance with Secretarial Order 3206 of June 5, 1997 (American Indian Tribal Rights, Federal-Tribal Trust Responsibilities, and the Endangered Species Act), we readily acknowledge our responsibilities to work directly with tribes in developing programs for healthy ecosystems, to acknowledge that tribal lands are not subject to the same controls as Federal public lands, to remain sensitive to Indian culture, and to make information available to tribes. Although we have no records of the eastern black rail occurring on tribal lands, the range of the eastern black rail overlaps with tribal lands. At the time of the proposed rule, we contacted Tribal leaders and Natural Resource Coordinators for those Tribes residing within the subspecies' range. We did not receive any comments on the proposed rule from these Tribes.
A complete list of references cited in this rule is available on the internet at
The primary authors of this proposed rule are the staff members of the Species Assessment Team, U.S. Fish and Wildlife Service.
Endangered and threatened species, Exports, Imports, Reporting and recordkeeping requirements, Transportation.
Accordingly, we amend part 17, subchapter B of chapter I, title 50 of the Code of Federal Regulations, as set forth below:
16 U.S.C. 1361-1407; 1531-1544; and 4201-4245, unless otherwise noted.
(h) * * *
(f) Eastern black rail (
(1)
(i) Purposeful take, including capture, handling, or other activities.
(ii) Incidental take resulting from the following activities:
(A) Prescribed burn activities, unless best management practices that minimize negative effects of the prescribed burn on the eastern black rail are employed. Best management practices include:
(
(
(
(B) Mowing, haying, and other mechanical treatment activities in persistent emergent wetlands when the activity occurs during the nesting or brooding periods, except in accordance with paragraph (f)(2)(iii) of this section.
(C) Grazing activities on public lands that occur on eastern black rail habitat and, that individually or cumulatively with other land management practices, do not maintain at least 50 percent of eastern black rail habitat,
(D) Long-term or permanent damage, fragmentation, or conversion of persistent emergent wetlands and the contiguous wetland-upland transition zone to other habitat types (such as open water) or land uses that do not support eastern black rail.
(iii) Possession and other acts with unlawfully taken eastern black rails. It is unlawful to possess, sell, deliver, carry, transport, or ship, by any means whatsoever, any eastern black rail that was taken in violation of section 9(a)(1)(B) and (C) of the Act or State laws.
(iv) Import or export, as set forth at § 17.21(b) for endangered wildlife.
(v) Possess and conduct other acts with unlawfully taken specimens, as set forth at § 17.21(d)(1) for endangered wildlife.
(vi) Engage in interstate or foreign commerce in the course of commercial activity, as set forth at § 17.21(e) for endangered wildlife.
(vii) Sell or offer for sale, as set forth at § 17.21(f) for endangered wildlife.
(2)
(i) All of the provisions of § 17.32 apply to the eastern black rail.
(ii) Any employee or agent of the Service, of the National Marine Fisheries Service, or of a State conservation agency that is operating a conservation program for the eastern black rail pursuant to the terms of a cooperative agreement with the Service in accordance with section 6(c) of the Act, who is designated by his agency for such purposes, may, when acting in the course of his official duties, take eastern black rails.
(iii) Incidental take resulting from haying, mowing, or other mechanical treatment activities in persistent emergent wetlands that occur during the nesting and brooding periods is allowed if those activities:
(A) Are maintenance requirements to ensure safety and operational needs, including maintaining existing infrastructure such as firebreaks, roads, rights-of-way, levees, dikes, fence lines, airfields, and surface water irrigation infrastructure (
(B) Occur during the control of woody encroachment and other invasive plant species to restore degraded habitat.
(iv) Incidental take resulting from actions taken to control wildfires is allowed.
(v) Incidental take resulting from the establishment of new firebreaks (for example, to protect wildlands or manmade infrastructure) and new fence lines is allowed.
(vi) Incidental take resulting from prescribed burns, grazing, and mowing or other mechanical treatment activities in existing moist soil management units or prior converted croplands (
Fish and Wildlife Service, Interior.
Final rule.
We, the U.S. Fish and Wildlife Service (Service), determine threatened species status under the Endangered Species Act of 1973 (Act), as amended, for the coastal distinct population segment (DPS) of Pacific marten (
This rule is effective November 9, 2020.
This final rule is available on the internet at
Dan Everson, Field Supervisor, U.S. Fish and Wildlife Service, Arcata Fish and Wildlife Office (see
Section 4(a)(3) of the Act requires the Secretary of the Interior (Secretary) to designate critical habitat concurrent with listing to the maximum extent prudent and determinable. In this case, we have found that the designation of critical habitat for the coastal DPS of Pacific marten is not determinable at this time.
On October 9, 2018, we published a proposed rule in the
In preparing this final rule, we reviewed and fully considered comments from the public on the proposed rule. We did not make any substantive changes to this final rule after consideration of the comments we received. We did update the Species Status Assessment (SSA) report (to version 2.1) based on comments and some additional information provided, as follows: (1) We made many small, nonsubstantive clarifications and corrections throughout the SSA report, including ensuring consistency, providing details about data sources used, and updating references; and (2) we included additional information we received regarding observations of the coastal marten, hypothesized historical range of the coastal marten, and more detailed life-history data for the species. We also updated our discussion of predators and the influence of vegetation management on their use of areas occupied by the coastal marten. However, the information we received during the comment period for the proposed rule did not change our previous analysis of the magnitude or severity of threats facing the species.
In addition, as a result of Federal, State, and public comment, we have added clarifying language, improved our rationale, revised our preamble discussion of the 4(d) rule, incorporated more specifics into the 4(d) rule itself, and added information on management or cleanup activities in response to public comments (see Final Rule Issued Under Section 4(d) of the Act). The commenters stated that additional detail or examples would help them better understand the forest management activities excepted by the 4(d) rule. Other comments requested that we add additional 4(d) exceptions regarding State employees or agents and activities for cleanup of disturbed habitat. In response, we added clarifying language as follows: (1) Added an exception for activities conducted in accordance with a permit issued under 50 CFR 17.32; (2) revised the exception and gave examples of forestry management activities to potentially reduce the risk or severity of wildfire (see § 17.40(s)(2)(ii) below); (3) clarified the use of State Natural Communities Conservation Plan or State Safe Harbor Agreements ((see § 17.40(s)(2)(iii) below); (4) added examples of forestry management activities which promote the conservation needs of the coastal marten (see § 17.40(s)(2)(iv) below); (5)
We also considered the recent Oregon Fish and Wildlife Commission decision and associated rule by the Oregon Department of Fish and Wildlife (ODFW) banning trapping of marten west of I-5 in Oregon, which includes the coastal DPS. Although this new ODFW regulation is expected to reduce marten mortality in the Oregon portion of the DPS, trapping was considered as one of several threats coastal marten faced, and it occurred at a low level (on average, less than 1 marten harvested per year over the past 28 years). We considered banning of trapping in one of our future scenarios (scenario 2) generated in the coastal marten SSA, and it did not result in any projected improvement in population resiliency for any of the Oregon populations (Service 2019, pp. 104-105). Hence, while banning trapping of martens in the coastal DPS will reduce marten mortality, there are still substantial threats to the DPS. We do not expect this change in management to improve the status of the coastal marten to the point that it does not meet the definition of a threatened species under the Act.
A species status assessment (SSA) team prepared an SSA report for the species. The SSA team was composed of Service biologists, in consultation with other species experts. The SSA report represents a compilation of the best scientific and commercial data available concerning the status of the species, including the impacts of past, present, and future factors (both negative and beneficial) affecting the species. The SSA report underwent independent peer review by scientists with expertise in carnivore biology, habitat management, and stressors (factors negatively affecting the species) to the species.
In accordance with our joint policy on peer review published in the
On June 23, 2014, we published a notice in the
The coastal marten is a medium-sized carnivore that historically occurred throughout the coastal forests of northwestern California and Oregon. The coastal marten has a long and narrow body type typical of the mustelid family (
Please refer to the October 9, 2018, proposed rule (83 FR 50574) and the species status assessment (SSA) report (Service 2019, entire) for a full summary of species information. Both documents are available at
Section 4 of the Act (16 U.S.C. 1533) and its implementing regulations (50 CFR part 424) set forth the procedures for determining whether a species is an “endangered species” or a “threatened species.” The Act defines an endangered species as a species that is “in danger of extinction throughout all or a significant portion of its range,” and a threatened species as a species that is “likely to become an endangered species within the foreseeable future throughout all or a significant portion of its range.” The Act requires that we determine whether any species is an “endangered species” or a “threatened species” because of any of the following factors:
(A) The present or threatened destruction, modification, or curtailment of its habitat or range;
(B) Overutilization for commercial, recreational, scientific, or educational purposes;
(C) Disease or predation;
(D) The inadequacy of existing regulatory mechanisms; or
(E) Other natural or manmade factors affecting its continued existence.
These factors represent broad categories of natural or human-caused actions or conditions that could have an effect on a species' continued existence. In evaluating these actions and conditions, we look for those that may have a negative effect on individuals of the species, as well as other actions or conditions that may ameliorate any negative effects or may have positive effects.
We use the term “threat” to refer in general to actions or conditions that are known to or are reasonably likely to negatively affect individuals of a species. The term “threat” includes actions or conditions that have a direct impact on individuals (direct impacts), as well as those that affect individuals through alteration of their habitat or required resources (stressors). The term “threat” may encompass—either together or separately—the source of the
However, the mere identification of any threat(s) does not necessarily mean that the species meets the statutory definition of an “endangered species” or a “threatened species.” In determining whether a species meets either definition, we must evaluate all identified threats by considering the expected response by the species, and the effects of the threats—in light of those actions and conditions that will ameliorate the threats—on an individual, population, and species level. We evaluate each threat and its expected effects on the species, then analyze the cumulative effect of all of the threats on the species as a whole. We also consider the cumulative effect of the threats in light of those actions and conditions that will have positive effects on the species, such as any existing regulatory mechanisms or conservation efforts. The Secretary determines whether the species meets the definition of an “endangered species” or a “threatened species” only after conducting this cumulative analysis and describing the expected effect on the species now and in the foreseeable future.
The Act does not define the term “foreseeable future,” which appears in the statutory definition of “threatened species.” Our implementing regulations at 50 CFR 424.11(d) set forth a framework for evaluating the foreseeable future on a case-by-case basis. The term “foreseeable future” extends only so far into the future as the Services can reasonably determine that both the future threats and the species' responses to those threats are likely. In other words, the foreseeable future is the period of time in which we can make reliable predictions. “Reliable” does not mean “certain”; it means sufficient to provide a reasonable degree of confidence in the prediction. Thus, a prediction is reliable if it is reasonable to depend on it when making decisions.
It is not always possible or necessary to define foreseeable future as a particular number of years. Analysis of the foreseeable future uses the best scientific and commercial data available and should consider the timeframes applicable to the relevant threats and to the species' likely responses to those threats in view of its life-history characteristics. Data that are typically relevant to assessing the species' biological response include species-specific factors such as lifespan, reproductive rates or productivity, certain behaviors, and other demographic factors.
Our proposed rule described “foreseeable future” as the extent to which we can reasonably rely on predictions about the future in making determinations about the future conservation status of the species. The Service since codified its understanding of foreseeable future in 50 CFR 424.11(d) (84 FR 45020). In those regulations, we explain the term “foreseeable future” extends only so far into the future as the Service can reasonably determine that both the future threats and the species' responses to those threats are likely. The Service will describe the foreseeable future on a case-by-case basis, using the best available data and taking into account considerations such as the species' life-history characteristics, threat-projection timeframes, and environmental variability. The Service need not identify the foreseeable future in terms of a specific period of time. These regulations did not significantly modify the Service's interpretation; rather they codified a framework that sets forth how the Service will determine what constitutes the foreseeable future based on our long-standing practice. Accordingly, though the regulations do not apply to the final rule for the coastal DPS of the Pacific marten because it was proposed prior to their effective date, they do not change the Service's assessment of foreseeable future for the coastal DPS of the Pacific marten as contained in our proposed rule and in this final rule.
The SSA report documents the results of our comprehensive biological status review for the species, including an assessment of the potential threats to the species. The SSA report does not represent a decision by the Service on whether the species should be listed as an endangered or threatened species under the Act. It does, however, provide the scientific basis that informs our regulatory decisions, which involve the further application of standards within the Act and its implementing regulations and policies. The following is a summary of the key results and conclusions from the SSA report; the full SSA report can be found at Docket No. FWS-R8-ES-2018-0076, and on the Arcata Fish and Wildlife Office's website at
To assess the species' viability, we used the three conservation biology principles of resiliency, redundancy, and representation (Shaffer and Stein 2000, pp. 306-310). Briefly, resiliency supports the ability of the species to withstand environmental and demographic stochasticity (for example, wet or dry, warm or cold years), redundancy supports the ability of the species to withstand catastrophic events (for example, droughts, large pollution events), and representation supports the ability of the species to adapt over time to long-term changes in the environment (for example, climate changes). In general, the more resilient and redundant a species is and the more representation it has, the more likely it is to sustain populations over time, even under changing environmental conditions. Using these principles, we identified the species' ecological requirements for survival and reproduction at the individual, population, and species levels, and described the beneficial and risk factors influencing the species' viability.
The SSA process can be categorized into three sequential stages. During the first stage, we evaluated the individual species' life-history needs. The next stage involved an assessment of the historical and current condition of the species' demographics and habitat characteristics, including an explanation of how the species arrived at its current condition. The final stage of the SSA involved making predictions about the species' responses to positive and negative environmental and anthropogenic influences. This process used the best available information to characterize viability as the ability of a species to sustain populations in the wild over time. We use this information to inform our regulatory decision.
Our assessment evaluated the biological condition of the species and its resources, and the threats that influence the species' current and future condition, in order to assess the species' overall viability and the risks to that viability. It was based upon the best available scientific and commercial data, including the SSA report (Service 2019, entire), and the expert opinion of the SSA team members. Please refer to chapter 3 of the SSA report (Service 2019, pp. 36-71) for a more detailed discussion of the factors affecting the coastal marten. The following is a summary of the key results and conclusions from the SSA report.
The coastal marten historically ranged throughout coastal Oregon and coastal northern California, but the species has not recently been detected throughout much of the historical range, despite extensive surveys. The coastal marten currently exists in four small populations (fewer than 100 individuals each) in Oregon and California, and is absent from the northern and southern
We have assessed the coastal marten's levels of resiliency, redundancy, and representation currently and into the future by first ranking the condition of each population. We ranked the four populations into three categories (high, moderate, and low) based on key population factors and habitat elements. We used three between-population factors (least-cost path distance, filters, and number of populations in proximity) and four within-population factors (population size, available male home ranges, available female home ranges, and proportion of habitat subject to high predation risk). Least-cost path distance describes the distance a coastal marten must travel for dispersal needs in order to reach the next closest population. Filters are barriers to this movement and can be either natural or manmade, such as large rivers or highways. This analysis provided condition categories to describe the resiliency of each population. A summary of this analysis is provided in table 4.3 of the SSA report (Service 2019, p. 96).
Maintaining representation in the form of genetic or ecological diversity is important to maintain the coastal marten's capacity to adapt to future environmental changes. We consider the coastal marten to have representation in the form of two different ecological settings. Some animals are adapted to the shore pine (
The coastal marten needs to have multiple resilient populations distributed throughout its range to provide for redundancy. The more populations, and the wider the distribution of those populations, the more redundancy the species exhibits. Based on the distributions of current verifiable coastal marten detections and adjacent suitable habitat, we identified four extant population areas (EPAs) within coastal Oregon and northern coastal California:
(1) Central Coastal Oregon EPA;
(2) Southern Coastal Oregon EPA;
(3) Oregon-California Border EPA; and
(4) Northern Coastal California EPA.
Additional detections of coastal martens have occurred outside of the current EPAs, but they did not meet the criteria of a population (most likely, they represent transient individuals in search of new territories) according to methods used in the Humboldt Marten Conservation Strategy and Assessment (Slauson
Our analysis of the past, current, and future influences on what the coastal marten needs for long-term viability revealed that two factors pose the largest risk to future viability of the species. These risks are primarily related to habitat loss and associated changes in habitat quality and distribution (including habitat fragmentation) (Factor A) and include: (1) A decrease in connectivity between populations; and (2) habitat conversion from that suitable for coastal martens to that suitable for generalist predators and competitors, thereby potentially increasing interactions and subsequent coastal marten injury, mortality, or predation. These factors are all influenced by vegetation management, wildfire, and changing climate.
Predation of coastal martens (Factor B) may be affected by changes in forest composition, potentially increasing predator habitat and increasing coastal marten vulnerability to predation. Bobcats are the coastal marten's predominant predator, with predation accounting for 41 percent of mortalities documented in one study. Bobcats prefer regenerating harvested stands less than 30 years old, and are nearly absent from older forests, the preferred habitat used by coastal marten. Coastal martens are vulnerable to predation and increased competition in habitats that have been subject to either high- or moderate-severity fires or intensive logging in the last 40 years where these events remove the structural characteristics of the landscape that provide escape cover and are important to coastal marten viability (canopy cover, shrub cover, etc.). These older forests have declined substantially from historical amounts: Older forests historically encompassed greater than 75 percent of the coastal California area, 50 percent of the Klamath and Siskiyou region in northern California and southwest Oregon, and 25 to 85 percent of the Oregon Coast Range. Estimates of the remaining older forests in the redwood region, Oregon Coast Range, and Klamath-Siskiyou region are around 5, 20, and 38 percent, respectively, of what occurred historically.
In addition to timber harvest activities, wildfires also destroy or remove forested habitat and occur regularly throughout the range of the coastal marten outside the coastal dunes population. Between 2000 and 2014, approximately 17 percent of the suitable coastal marten habitat in the north coastal California population burned. In 1987, in the California-Oregon border population area, roughly 12 percent of suitable habitat burned in the Longwood Fire. Substantial amounts of habitat occupied by the coastal marten have the potential to burn at varying severities in single wildfire events or over a few years. The effects from climate change are projected to result in longer wildfire seasons, producing more frequent and larger wildfires. Wildfires large enough to totally encompass all or most of all four individual population areas are already occurring throughout the range of the coastal marten and are expected to increase in frequency, raising concern over the resiliency of at least the three southern coastal marten population areas, which have been most affected by recent fires and are in a fire regime particularly vulnerable to future fires.
Dispersal is the means by which coastal marten populations maintain and expand their distribution. Successful dispersal is assisted by having suitable habitat between patches occupied by the species. Connectivity of habitat between populations allows for the coastal marten to maintain or expand population size and distribution. A resilient coastal marten population would have suitable habitat maintained between populations that provides important habitat for key prey, abundant daily resting sites, and a distance between populations that is within the range of an average coastal marten dispersal distance. Neither of the Oregon populations has functional connectivity to any other population and if a stochastic or catastrophic event eliminated either of these two populations, natural recolonization from the California populations would not be
In addition to being mostly isolated, all four populations are relatively small and face other threats in addition to habitat loss. Since 1980, 19 mortalities of coastal martens caused by vehicles (Factor E) have been documented, all in Oregon and mostly along U.S. Highway 101. We expect that some unknown amount of coastal marten roadkill goes undetected, so this is likely an underestimate of the number of coastal martens killed by cars. Exposure to rodenticides (Factor E), through direct ingestion or the consumption of exposed prey, has been documented in coastal martens. This exposure has lethal and sub-lethal effects on other mammal species, and similar effects are expected for coastal martens. Illegal cannabis cultivation sites on public, tribal, and private forest lands are implicated as the likely source of these rodenticides in the California and Southern Oregon populations. In a similar carnivore species (fisher (
Certain diseases (Factor C) are also a concern to coastal martens including canine distemper viruses (CDV), rabies viruses, parvoviruses, and the protozoan (single-celled organism)
The coastal marten faces a variety of threats including loss of habitat, threats from wildfire, and increased predation risk. These risks play a large role in the resiliency and future viability of the coastal marten. Given the lack of connectivity between populations, availability of suitable habitat, and increases in predation within the populations, we forecasted in the SSA report what the coastal marten may have in terms of resiliency, redundancy, and representation under three plausible future scenarios. All three scenarios were forecast out over the next 15, 30, and 60 years. A range of timeframes with a multitude of possible scenarios allows us to create a “risk profile” for the coastal marten and its viability into the future. Scenario 1 evaluates the future condition of the coastal marten if there is no change in trends in threats to the populations from what exists today, while the other two scenarios evaluate the response of the species to increases or decreases in the major factors that are influencing coastal marten viability. While we do not expect every condition for each scenario to be realized, we are using these scenarios to bound the range of possibilities. Scenarios 2 and 3 are considered the “outside bounds” for the range of potential plausible future conditions. For each scenario, we describe the stressors that would occur in each population. We use the best available science to predict trends in future stressors (timber harvest, wildfire, effects of climate change, etc.). Data availability varies across States and populations. Where data on future trends are not available, we look to past trends and evaluate if it is reasonable to assume these trends will continue. The results of the analysis of resiliency in our plausible future scenarios are described in further detail in the SSA report and summarized in table 5.1 of the SSA report (Service 2019, p. 104).
We note that, by using the SSA framework to guide our analysis of the scientific information documented in the SSA report, we have not only analyzed individual effects on the species, but we have also analyzed their potential cumulative effects. We incorporate the cumulative effects into our SSA analysis when we characterize the current and future condition of the species. Our assessment of the current and future conditions encompasses and incorporates the threats individually and cumulatively. Our current and future condition assessment is iterative because it accumulates and evaluates the effects of all the factors that may be influencing the species, including threats and conservation efforts. Because the SSA framework considers not just the presence of the factors, but to what degree they collectively influence risk to the entire species, our assessment integrates the cumulative effects of the factors and replaces a standalone cumulative effects analysis.
On October 9, 2018, we published in the
We reviewed all the comments we received from the peer and technical reviewers for substantive issues and new information regarding the coastal marten and its habitat contained in the SSA report. We addressed peer reviewer comments in the final SSA and this rule as appropriate. We include a summary of the peer review comments below.
As discussed in Supporting Documents above, we received comments from two peer reviewers and two technical experts. We reviewed all comments we received from the reviewers for substantive issues and new information regarding the information contained in the SSA report. The peer and technical reviewers generally concurred with our methods used to determine, and conclusions drawn from the available information regarding, the status of coastal marten populations and their biology in California and Oregon. In some cases, they provided additional information, clarifications, and suggestions to improve the final SSA report. The reviewers also provided or corrected references we cited in our SSA report. The additional details and information provided, which have been incorporated into the current SSA report and this final listing rule, did not substantially alter any of our conclusions, including those concerning population resiliency, and current and future conditions.
In addition, we also received comments on the proposed listing and 4(d) rule during the open comment period. Below, we categorize the comments and our responses by Federal, State, Tribal, and public comments.
We solicited information from and met with members of the Yurok Tribe regarding the proposed listing of the coastal marten. We also sent the draft SSA report to the Yurok Tribe; the Confederated Tribes of Coos, Lower Umpqua and Siuslaw Indians; the Coquille Indian Tribe; the Cow Creek Band of Umpqua Tribe of Indians; the Confederated Tribes of Grand Ronde; and the Confederated Tribes of Siletz Indians for comment. We did not receive comments on the proposed rule from any tribal entities.
Regarding third-party forest sustainability certifications, the commenter did not provide specific application and subsequent conservation benefits these certifications would provide to coastal martens. As a result, we could not evaluate the commenter's request. However, the exception under 50 CFR 17.40(s)(2)(iv) (see Regulation Promulgation, below) allows for forest management activities consistent with the conservation needs of the coastal marten developed in finalized conservation plans and strategies that are determined by the Service to be consistent with conservation strategies for the coastal marten.
Applicants conducting activities that may cause incidental take of coastal
We strongly encourage landowners working with the Service to cooperatively develop conservation measures for the coastal marten. In both Oregon and California, the Service has already begun working with Federal, State, and nongovernmental forest managers to develop a conservation strategy that would meet the requirements of the final 4(d) rule (50 CFR 17.40(s)(2)(iii and iv)) (see Regulation Promulgation, below).
The Act provides a broad and flexible framework to facilitate conservation with a variety of stakeholders through various means. Working with our State resource agency partners in implementing conservation is one of many ways we work with, leverage, and expand our existing network of conservation partnerships to produce effective conservation practices and conservation strategies on the ground for all endangered or threatened species and their habitats. Working and collaborating with our State wildlife agency partners, tribes, private landowners, non-governmental organizations, and Federal partners to achieve on-the-ground conservation for endangered or threatened species and habitats will lead to greater conservation than if done independently. It is only through our inclusive efforts with the conservation community that we can collectively protect our shared resources.
As for the remaining comments on the proposed 4(d) rule, we have excepted certain activities from take that would reduce habitat loss through fire, or that would occur subject to a plan or agreement covered by a NCCP or State Safe Harbor Agreement approved by CDFW under the authority of CESA, or forestry management activities consistent with marten conservation that are also consistent with finalized conservation plans or strategies for which the Service has determined that meeting such plans or strategies would be consistent with marten conservation strategies. We conclude that these activities meet the standards set out in the 4(d) rule and in addressing the stressors of fire and timber harvest that could could result in habitat loss for the coastal marten.
We have no information to indicate that legalization of cannabis cultivation will reduce “black market” activities and associated grow sites, or how local regulations and zoning ordinances for cannabis cultivation on private lands will alter the number of illegal grows on public land (Owley 2018, pp. 1713-1714). There is no indication illegal growing has decreased with legalization of cannabis; continued lack of enforcement, as well as financial advantages over legally registered businesses, allow illegal underground operations to thrive (Bureau of Cannabis Control California 2018, pp. 28, 30). In fact, legalization may increase “black market” sales in other States, thereby increasing illegal grows to meet demand (Hughes 2017, entire).
Although cannabis growers are required to apply pesticides in accordance with U.S. EPA-approved labeling requirements, no pesticides are currently registered by the U.S. EPA for application on cannabis, because the U.S. EPA cannot recognize cannabis as a legal crop due to its status as a federally controlled substance. Unless
Moreover, legalization of cannabis cultivation may have increased the number of grow sites in some areas. Within the DPS counties in Oregon, over 2,000 legal operations have been permitted (Oregon Liquor Control Commission (OLCC) 2019, unpaginated); this number is in addition to existing illegal grow sites, which may not diminish as a result of legalized cultivation. Associated rodenticide use on the permitted grow sites is difficult to determine, and, as far as we know, has not been assessed.
Hence, we stand by our conclusion that the threat of coastal marten exposure to rodenticides remains, and it is uncertain as to whether cannabis legalization will decrease the threat to coastal martens by toxicant exposure.
We do not feel that a more robust survey effort in coastal Oregon would result in discovering additional populations of coastal martens. Central and southern coastal Oregon was surveyed systematically in 2014 and 2015 with 348 sample units (908 survey
The commenter believes that the Service must determine the current population (we assume they mean population size) and quantify what represents a population that needs protection under the Act. To determine population size requires a census, which is rarely done for wild animal populations, and then usually only when the population is extremely small and survey methodology can reliably detect all individuals. Instead, we rely on population estimates, which have inherent variability. As noted above, we have three empirical estimates for coastal martens, and alone they tell us little about current population trends of coastal martens. The commenter seems to believe that without quantitative data, we must refrain from making a decision on the listing status of a species. However, upon receiving a petition to list a species, the Act and our regulations require us to make our determination solely on the basis of the best scientific and commercial data available. Hence, we have used the population estimate and distribution data combined with other available data on coastal martens to inform our analysis in the SSA report to assess the viability of the coastal marten. This assessment of the biological information, along with the threats facing the species or its habitat, was used to inform the Service in making a listing determination for the coastal marten.
We did not automatically correlate forest management with habitat loss. In the referenced page of the October 9, 2018, proposed rule (83 FR 50577), we note that habitat loss has and continues to be influenced by wildfire, vegetation management, and a changing climate, but we do not maintain that all forest management results in habitat loss, or similarly, that all wildfire or climate change effects will result in habitat loss.
We took into consideration the factors identified by the commenter (
Regarding the commenter's reference to Slauson
The commenter stated that the CDFW's determination of endangered status under the CESA was reason to conclude federally endangered status under the Act. Comparing the analysis conducted by the CDFW determining that the coastal marten should be considered endangered under the CESA to that of the Service's threatened determination is not appropriate. The CDFW determination does not take into consideration Oregon populations. In our analysis of the best available commercial and scientific information, we determined that the coastal marten is not in danger of extinction (
The commenter went on to recognize the work of the Oregon Dunes Restoration Collaborative (ODRC), which was formed to increase engagement of local communities and coordinate efforts to significantly expand protection and restoration of the dunes. The commenter stated that there are limited resources for the ODRC to complete restoration work, and the commenter believes additional administrative procedures associated with listing the coastal marten, or slowing the process, will be burdensome and likely result in loss of public interest and support for restoration. In addition, the commenter stated that the coastal marten and its habitat are already adequately protected under the National Forest Management Act, and because it is a candidate species under the Act and is on the Regional Forester's (USFS) sensitive species list.
Regarding statements relating to predators and increased predation, some of the commenters provided technical information regarding the other uncertainties around the influence of vegetation management on predators, and their subsequent effect on coastal martens. Although the commenters raised concerns with the local, unpublished works that indicated bobcats are the primary coastal marten predator and are associated with younger forests, our suggestion that increased forest fragmentation or reduced canopy cover increases predation risk by coastal martens is consistent with marten research elsewhere in North America (as cited in Service 2019, pp. 43-44, or as provided by the commenter [
Section 4 of the Act (16 U.S.C. 1533) and its implementing regulations (50 CFR part 424) set forth the procedures for determining whether a species meets the definition of “endangered species” or “threatened species.” The Act defines an “endangered species” as a species that is “in danger of extinction throughout all or a significant portion of its range,” and a “threatened species” as a species that is “likely to become an endangered species within the foreseeable future throughout all or a significant portion of its range.” The Act requires that we determine whether a species meets the definition of “endangered species” or “threatened species” because of any of the following factors: (A) The present or threatened destruction, modification, or curtailment of its habitat or range; (B) overutilization for commercial, recreational, scientific, or educational purposes; (C) disease or predation; (D) the inadequacy of existing regulatory mechanisms; or (E) other natural or manmade factors affecting its continued existence.
In determining whether a species meets the definition of an endangered or threatened species, we must evaluate all identified threats by considering the expected response by the species, and the effects of the threats—in light of those actions and conditions that will ameliorate the threats—on an individual, population, and species level. We evaluate each threat and its expected effects on the species, then analyze the cumulative effect of all of the threats on the species as a whole. We also consider the cumulative effect of the threats in light of those actions and conditions that will have positive effects on the species, such as any existing regulatory mechanisms or conservation efforts.
In conducting our status assessment of the coastal marten, we evaluated all identified threats under the section 4(a)(1) factors and assessed how the cumulative impact of all threats combined are acting on the viability of the coastal marten as a whole. We used the best available information as summarized in our Draft SSA and Final SSA reports, information received from peer review and comments on the 2018 proposed listing rule (83 FR 50574), as well as our most recent analysis summarized herein to gauge the magnitude of each individual threat on the coastal marten. We then assessed how those effects combined and may be ameliorated by any existing regulatory
The loss of habitat and habitat patch size in the future across the range of the coastal marten is exposing coastal martens to increased threats from direct mortality and decreased habitat availability and increased fragmentation, resulting in low resiliency and reduced viability for the coastal marten as a whole. Based on our analysis, we find the cumulative impact of all identified threats on the coastal marten, especially habitat loss and fragmentation due to high-severity wildfire (Factor A) and vegetation management (Factor A) (noting that the threats are exacerbated by changing climate conditions and thus also play a role under Factor E), will act upon the coastal marten to such a degree that the DPS is likely to become endangered in the foreseeable future. The existing regulatory mechanisms (Factor D) and current conservation efforts are not addressing these threats to the level that will likely preclude the coastal marten from becoming an endangered species in the foreseeable future.
We have carefully assessed the best scientific and commercial information available regarding the past, present, and future threats to the coastal marten. A thorough analysis and discussion of the threats that are affecting the coastal marten are included in the final SSA report (Service 2019, entire) associated with this document.
A large proportion of the area where coastal marten occurs is on Federal or State land that has various regulatory mechanisms in place to manage forested habitat (Factor D). However, coastal marten populations continue to be small and isolated, and habitat connecting populations is often degraded or fragmented despite regulatory mechanisms in place for forestry management practices in both California and Oregon. The current status of coastal marten habitat is, in part, an artifact of silvicultural practices and wildfires that reset the successional forest stage and structure favoring early successional habitat components which may lack the appropriate cover or structure preferred by the coastal marten for foraging, resting, or denning. The late-successional associated structures or habitat preferred by coastal martens will most likely require several decades of appropriate forest and species management to reduce habitat fragmentation, increase population numbers and distribution, and achieve the forest structure that will assist in restoring the natural ecology of this ecosystem for this species and connect the existing fragmented habitats. Although the coastal marten can use and cross areas of lesser habitat value (containing less cover and structure) within these fragmented habitats, the management prescriptions provided through the various regulatory mechanisms are, in some instances, not likely alleviating or addressing the future threat of continued habitat loss, habitat fragmentation, or disturbance from wildfire to coastal marten. Remedies to address such impacts are multi-decadal, are not logistically easy to implement, may be expensive to address, and may meet social resistance. Therefore, we have determined that, while existing regulatory mechanisms enable land managers within the DPS to ameliorate to some extent the identified threats to the coastal marten, the existing regulatory mechanisms, although being implemented as designed, do not completely address the identified threats to adversely impact habitat for the coastal marten. As a result, we do not consider that the regulatory mechanisms in place, in and of themselves, alleviate the need for listing the coastal marten as a threatened species.
During the public comment period for the proposed rule (83 FR 50574; October 9, 2018), we received comments from the public stating that the coastal marten should receive an endangered status determination, based on the timing and magnitude of threats facing the coastal marten. The DPS does not meet the Act's definition of an endangered species. The current conditions of the coastal marten, as assessed in the SSA report, show extant coastal marten populations in four areas (EPAs) across its range, including large areas of occupied habitat in Oregon and California. The best available data do not indicate a declining trend in abundance, and it is likely that the low abundance (and, therefore, low resiliency) indicated in our analysis is partly due to the species being difficult to detect. While threats are currently acting on the species and many of those threats are expected to continue into the future, with four populations occurring across the range of the species, the current condition of the coastal marten still provides for enough resiliency, redundancy, and representation such that it is not currently in danger of extinction. Therefore, we do not find that the species meets the definition of an endangered species under the Act. Our analysis and determination on whether the coastal marten meets the definition of a threatened species is outlined below. A threatened species is any species which is likely to become an endangered species within the foreseeable future throughout all or a significant portion of its range.
In order to determine if the coastal marten is a threatened species under the Act, we must first determine what the foreseeable future timeframe is for the species. The term foreseeable future extends only so far into the future as we can reasonably determine that both the future threats and the marten's responses to those threats are likely according to 50 CFR 424.11(d). As stated above, the coastal marten faces a variety of threats including loss of habitat, wildfire, and increased predation risk (see Summary of Biological Status and Threats). These threats play a large role in the coastal marten's resiliency and future viability. Future conditions and future threat analysis is particularly challenging for the coastal marten, because one of the major threats facing the species and its habitat (wildfire) is unpredictable as to exactly when it may occur and to what extent it may impact the species. In addition, the timeframe of regeneration of habitat of the appropriate age class and structure needed for the coastal marten after a wildfire or habitat removal can be decadal in nature. In our SSA, we identified several timeframes based on the information available on threats and future habitat and environmental conditions for the species. Our future scenario analysis forecast the likely coastal marten viability over the next 15, 30, and 60 years, depending on the threat and information available about its future condition and impacts (see Future Condition, Service 2019, pp. 97-109). In cases where future trends in threats were not available, we looked to past frequency and severity of the threat and projected that into the future. As a result, based on the information available on potential future conditions, we selected the extent of the foreseeable future for the coastal marten to be approximately 60 years. This timeframe allows for multiple generations of coastal marten to occur and accounts for some development and reestablishment
Estimates of future resiliency, redundancy, and representation for the coastal marten are low. As discussed in detail in the SSA report, the species faces a variety of threats including loss and fragmentation of habitat (Factor A) due to wildfire, timber harvest, and vegetation management. In addition, collisions with vehicles (Factor E) and rodenticides (Factor E) are all impacting coastal marten individuals, and the threat of disease (Factor C) carries the risk of further reducing populations. Changes in vegetation composition and distribution from large-scale wildfire and timber harvest activities may also make coastal martens more susceptible to predation (Factor C) from larger carnivores. These threats, which are expected to be exacerbated by the species' small and isolated populations (Factor E) and the effects of climate change (Factor E), were central to our assessment of the future viability of the coastal marten. In our analysis of the factors affecting this species, we found no evidence that the existing regulatory mechanisms (Factor D) are contributing to declines in the species' status, nor do they alleviate the need for listing.
Given current and future decreases in resiliency, populations will become more vulnerable to extirpation from stochastic events, in turn, resulting in concurrent losses in representation and redundancy. All three scenarios presented in the SSA report as representative of plausible future scenarios create conditions where the coastal marten would not have enough resiliency, redundancy, or representation to sustain populations over time. While determining the probability of each scenario was not possible with the available data, the entire range of future risk revealed by the three plausible scenarios showed that the species would likely continue to lose resiliency, redundancy, and representation throughout its range in all scenarios.
After evaluating threats to the species and assessing the cumulative effect of the threats under the section 4(a)(1) factors, we have found that the loss of habitat, threats to individuals, and lack of connectivity between populations will continue to impact the coastal marten despite conservation efforts. Further, the population and habitat factors used to determine the resiliency, representation, and redundancy for coastal marten will continue to decline into the future. Thus, after assessing the best available information, we conclude that the coastal marten is not currently in danger of extinction, but is likely to become in danger of extinction within the foreseeable future throughout all of its range.
Under the Act and our implementing regulations, a species may warrant listing if it is in danger of extinction or likely to become so in the foreseeable future throughout all or a significant portion of its range. The court in
Following the court's holding in
For the coastal marten, we considered whether the threats are geographically concentrated in any portion of the species' range at a biologically meaningful scale. The threats, which are discussed further in the SSA report, include: Loss of habitat and modification due to wildfire, timber harvest, and vegetation management (Factor A); trapping (Factor B); disease and predation (Factor C); collisions with vehicles (Factor E); rodenticides (Factor E); and the effects of climate change (Factor E). These threats are expected to be exacerbated by the species' small and isolated populations (Factor E). These threats, including their cumulative effects, were central to our assessment of the future viability of the coastal marten. From the threats facing the coastal marten, we have determined that habitat loss and modification, predation, and the effects of climate change in the context of having small and isolated populations are the driving threats leading to the species' threatened status. These threats can have large impacts on habitat availability and condition and lead to direct or indirect impacts on the species. Distribution of these threats is, for the most part, uniform across the known populations. We found no concentration of threats in any portion of the coastal marten's range at a biologically meaningful scale. Thus, there are no portions of the species' range where the species has a different status from its rangewide status. Therefore, no portion of the species' range provides a basis for determining that the species is in danger of extinction in a significant portion of its range, and we determine that the species is likely to become in danger of extinction within the foreseeable future throughout all of its range. This is consistent with the courts' holdings in
Our review of the best scientific and commercial information available indicates that the coastal DPS of the Pacific marten meets the Act's definition of a threatened species. Therefore, we are listing the coastal DPS of the Pacific marten as a threatened species in accordance with sections 3(20) and 4(a)(1) of the Act.
Conservation measures provided to species listed as endangered or threatened species under the Act include recognition, recovery actions, requirements for Federal protection, and prohibitions against certain practices. Recognition through listing results in public awareness, and conservation by Federal, State, Tribal, and local agencies, private organizations, and individuals. The Act encourages cooperation with the States and other countries and calls for recovery actions to be carried out for listed species. The
The primary purpose of the Act is the conservation of endangered and threatened species and the ecosystems upon which they depend. The ultimate goal of such conservation efforts is the recovery of these listed species, so that they no longer need the protective measures of the Act. Subsection 4(f) of the Act calls for the Service to develop and implement recovery plans for the conservation of endangered and threatened species. The recovery planning process involves the identification of actions that are necessary to halt or reverse the species' decline by addressing the threats to its survival and recovery. The goal of this process is to restore listed species to a point where they are secure, self-sustaining, and functioning components of their ecosystems.
Recovery planning consists of preparing draft and final recovery plans, beginning with the development of a recovery outline and making it available to the public within 30 days of a final listing determination. The recovery outline guides the immediate implementation of urgent recovery actions and describes the process to be used to develop a recovery plan. Revisions of the plan may be done to address continuing or new threats to the species, as new substantive information becomes available. The recovery plan also identifies recovery criteria for review of when a species may be ready for reclassification from endangered to threatened (“downlisting”) or removal from protected status (“delisting”), and methods for monitoring recovery progress. Recovery plans also establish a framework for agencies to coordinate their recovery efforts and provide estimates of the cost of implementing recovery tasks. Recovery teams (composed of species experts, Federal and State agencies, nongovernmental organizations, and stakeholders) are often established to develop recovery plans. When completed, the recovery outline, draft recovery plan, and the final recovery plan will be available on our website (
Implementation of recovery actions generally requires the participation of a broad range of partners, including other Federal agencies, States, Tribes, nongovernmental organizations, businesses, and private landowners. Examples of recovery actions include habitat restoration (
Following publication of this final rule, funding for recovery actions will be available from a variety of sources, including Federal budgets, State programs, and cost share grants for non-Federal landowners, the academic community, and nongovernmental organizations. In addition, pursuant to section 6 of the Act, the States of California and Oregon will be eligible for Federal funds to implement management actions that promote the protection or recovery of the coastal marten. Information on our grant programs that are available to aid species recovery can be found at:
Please let us know if you are interested in participating in recovery efforts for this species. Additionally, we invite you to submit any new information on this species whenever it becomes available and any information you may have for recovery planning purposes (see
Section 7(a) of the Act requires Federal agencies to evaluate their actions with respect to any species that is listed as an endangered or threatened species and with respect to its critical habitat, if any is designated. Regulations implementing this interagency cooperation provision of the Act are codified at 50 CFR part 402. Section 7(a)(2) of the Act requires Federal agencies to ensure that activities they authorize, fund, or carry out are not likely to jeopardize the continued existence of any endangered or threatened species or destroy or adversely modify its critical habitat. If a Federal action may affect a listed species or its critical habitat, the responsible Federal agency must enter into consultation with the Service.
Several Federal agency actions that occur within the species' habitat may require consultation as described in the preceding paragraph. These actions include management and any other landscape-altering activities on lands administered by the Service and the Department of the Interior's Bureau of Indian Affairs, Bureau of Land Management, and National Park Service and the Department of Agriculture's U.S. Forest Service; issuance of section 404 Clean Water Act (33 U.S.C. 1251
It is our policy, as published in the
Section 4(d) of the Act contains two sentences. The first sentence states that the “Secretary shall issue such regulations as he deems necessary and advisable to provide for the conservation” of species listed as threatened. The U.S. Supreme Court has noted that statutory language like “necessary and advisable” demonstrates a large degree of deference to the agency (see
The courts have recognized the extent of the Secretary's discretion under this standard to develop rules that are appropriate for the conservation of a species. For example, courts have upheld rules developed under section 4(d) as a valid exercise of agency authority where they prohibited take of threatened wildlife, or include a limited taking prohibition (see
Exercising its authority under section 4(d), the Service has developed a rule that is designed to address the coastal marten's specific threats and conservation needs. Although the statute does not require the Service to make a “necessary and advisable” finding with respect to the adoption of specific prohibitions under section 9, we find that this rule as a whole satisfies the requirement in section 4(d) of the Act to issue regulations deemed necessary and advisable to provide for the conservation of the coastal marten. As discussed above under Summary of Biological Status and Threats, the Service has concluded that the coastal marten is likely to become in danger of extinction within the foreseeable future primarily due to habitat loss (including fragmentation) and associated changes in habitat quality and distribution. Under this 4(d) rule for the coastal marten, except as described and explained below, all prohibitions and provisions that apply to endangered wildlife under section 9(a)(1) of the Act will apply to the coastal marten. Applying these section 9(a)(1) prohibitions will help minimize threats that could cause further declines in the status of the species. The provisions of this 4(d) rule will promote conservation of the coastal marten by encouraging management of the landscape in ways that meet both land management considerations and the conservation needs of the DPS. The provisions of this rule are one of many tools that the Service will use to promote the conservation of the coastal marten.
This 4(d) rule will provide for the conservation of the coastal marten by prohibiting the following activities, except as otherwise authorized or permitted: Import or export; take; possession and other acts with unlawfully taken specimens; delivery, receipt, transportation, or shipment in interstate or foreign commerce in the course of commercial activity; or sale or offer for sale in interstate or foreign commerce. These prohibitions mimic those prohibitions afforded to endangered species under section 9(a)(1) of the Act.
In addition to the prohibited activities identified above, we also provide for exceptions to those prohibitions for certain activities as described below.
We note that the long-term viability of the coastal marten, as with many wildlife species, is intimately tied to the condition of its habitat. As described in our analysis of the species' status, one of the primary driving threats to the coastal marten's continued viability is the destruction of its habitat from catastrophic wildfires. The potential for an increase in frequency and severity of these catastrophic wildfires from the effects of climate change subsequently increases the risk to the species posed by this threat. We have determined that actions taken by forest management entities in the range of the coastal marten for the purpose of reducing the risk or severity of catastrophic wildfires, even if these actions may result in some short-term or small level of localized negative effect to coastal martens, will further the goal of reducing the likelihood of the species from becoming an endangered species, and will also likely contribute to its conservation and long-term viability. Therefore, these actions are excepted from the section 9(a)(1) prohibitions.
We also recognize that there are other actions undertaken by forest management entities, such as the CDFW under the authority of the CESA, where the intended purpose of the action is not the reduction of catastrophic wildfire risk, but to improve overall habitat conditions for coastal marten. We realize that these actions may also result in some short-term or small level of localized negative effects to coastal martens or their habitat. However, we acknowledge that these types of actions are often undertaken through inclusion in NCCPs or State SHAs, which are approved by the CDFW under the authority of the CESA, and that these plans and agreements address identified effects to the coastal marten (a CESA-listed species). We have determined that actions under such State approved plans or agreements will adequately reduce or offset any negative effects to the coastal marten so that they will not result in a further decline of the species; therefore, we are excepting them from the section 9(a)(1) prohibitions in the 4(d) rule.
In addition, we note that there are activities undertaken by forest management entities that are consistent with the conservation needs of coastal marten and include activities consistent with finalized conservation plans, or strategies for the coastal marten and for which the Service has explicitly determined that meeting such plans or strategies, or portions thereof, would be consistent with the conservation needs of the coastal marten. While we recognize the potential that these types of actions may result in some small level of localized disturbance or temporary negative effects to coastal martens or their habitat, these conservation efforts will improve overall habitat conditions or contribute to the species' overall long-term viability and we have excepted them from section 9(a)(1) prohibitions in the 4(d) rule.
Toxicants, especially anticoagulant rodenticides, are recognized as a threat to the closely related fisher, and have been detected in coastal martens and other non-target predators within the historical range of the coastal marten. Illegal cannabis cultivation sites are considered a likely source. When these sites are found, they often require reclamation (waste cleanup and removal of fertilizers, pesticides, and other chemicals that were left behind). Cleanup of these sites may involve activities that may cause localized, short-term disturbance to coastal martens (
We recognize the special and unique relationship with our State natural resource agency partners in contributing to conservation of listed species. State agencies often possess scientific data and valuable expertise on the status and distribution of endangered, threatened, and candidate species of wildlife and plants. State agencies, because of their authorities and their close working relationships with local governments and landowners, are in a unique position to assist the Services in
Under the Act, “take” means to harass, harm, pursue, hunt, shoot, wound, kill, trap, capture, or collect, or to attempt to engage in any such conduct. Some of these provisions have been further defined in regulation at 50 CFR 17.3. Take can result knowingly or otherwise, by direct and indirect impacts, intentionally or incidentally.
We may issue permits to carry out otherwise prohibited activities, including those described above, involving threatened wildlife under certain circumstances. Regulations governing permits are codified at 50 CFR 17.32. With regard to threatened wildlife, a permit may be issued for the following purposes: For scientific purposes, to enhance propagation or survival, for economic hardship, for zoological exhibition, for educational purposes, for incidental taking, or for special purposes consistent with the purposes of the Act. There are also certain statutory exemptions from the prohibitions, which are found in sections 9 and 10 of the Act.
Therefore, as explained above, we are issuing protective regulations under section 4(d) of the Act, in which all the prohibitions and provisions that apply to endangered wildlife under section 9(a)(1) of the Act, with the exceptions outlined below, apply to the coastal marten:
(1) Activities which are conducted in accordance with a permit issued by the Service under 50 CFR 17.32. These include actions for one of the following purposes: Scientific purposes, or the enhancement of propagation or survival, or economic hardship, or zoological exhibition, or educational purposes, or incidental taking, or special purposes consistent with the purposes of the Act. Such permits may authorize a single transaction, a series of transactions, or a number of activities over a specific period of time.
(2) Forest management activities for the purposes of reducing the risk or severity of wildfire. These activities may include fuels reduction projects, firebreaks, and wildfire firefighting activities. Fuels reduction projects include forest management practices such as those that treat vertical and horizontal (ladder) fuels in an effort to reduce continuity between understory and the overstory vegetation and the potential for crown fires, removal of fuels within 150 feet of legally permitted structures and within 300 feet of habitable structures, or implementation of Fuelbreak/Defensible Space Prescriptions which allow for removal of trees or other vegetation to create a shaded fuelbreak along roads or other natural features, or create defensible space.
(3) Forestry management activities included in a plan or agreement for lands covered by a Natural Communities Conservation Plan or State Safe Harbor Agreement that addresses and authorizes State take of coastal marten as a covered species and is approved by the California Department of Fish and Wildlife under the authority of the California Endangered Species Act.
(4) Forestry management activities, approved by the Service, under finalized conservation plans or strategies, that are consistent with the conservation needs of the coastal marten (includes activities that promote, retain, or restore suitable coastal marten habitat, increase percent canopy cover, increase percent ericaceous shrub cover, and denning and resting structures). These activities must be consistent with conservation plans or strategies which identify coastal marten conservation prescriptions or compliance and for which the Service has determined that meeting such plans or strategies, or portions thereof, would be consistent with conservation of the coastal marten.
(5) Activities to remove toxicants and other chemicals consistent with conservation strategies for coastal marten. Such activities include management or cleanup activities that remove toxicants and other chemicals from forested areas, for which the Service has determined that such activities to remove toxicants and other chemicals would be consistent with conservation strategies for coastal marten. Cleanup of these sites may involve activities that may cause localized, short-term disturbance to coastal martens, as well as require limited removal of some habitat structures valuable to coastal martens (
(6) Activities conducted by any qualified employee or agent of a State conservation agency which is a party to a cooperative agreement with the Service in accordance with section 6(c) of the Act, who is designated by his or her agency for such purposes, and who will be able to conduct activities designed to conserve the coastal marten that may result in otherwise prohibited take for wildlife without additional authorization.
While we are providing these exceptions to the prohibitions and provisions of section 9(a)(1), we clarify that all Federal agencies (including the Service) that fund, permit, or carry out the activities described above will still need to ensure, in consultation with the Service (including intra-Service consultation when appropriate), that the activities are not likely to jeopardize the continued existence of the species. Private entities who undertake any actions other than those described in the exceptions above that may result in adverse effects to the coastal marten, when there is no associated Federal nexus to the action, may wish to seek an incidental take permit from the Service before proceeding with the activity.
Nothing in this 4(d) rule will change in any way the recovery planning provisions of section 4(f) of the Act, the consultation requirements under section 7 of the Act, or the ability of the Service to enter into partnerships for the management and protection of the coastal marten. However, interagency cooperation may be further streamlined through planned programmatic consultations for the species between Federal agencies and the Service.
Section 4(a)(3) of the Act, as amended, and implementing regulations (50 CFR 424.12), require that, to the maximum extent prudent and determinable, the Secretary shall designate critical habitat at the time the species is determined to be an endangered or threatened species. In this final rule, we affirm the determinations we made in our October 9, 2018, proposed rule (83 FR 50574) concerning the prudency and determinability of critical habitat for the coastal marten. In our proposed rule, we found that designating critical habitat for the coastal marten may be prudent, but that a designation was not determinable at that time because information sufficient to perform a required analysis of the impacts of the designation was lacking. We continue to develop a careful assessment of the economic impacts that may occur due to a critical habitat designation and to work with the States and other partners in acquiring the complex information
We have determined that environmental assessments and environmental impact statements, as defined under the authority of the National Environmental Policy Act (NEPA; 42 U.S.C. 4321
In accordance with the President's memorandum of April 29, 1994 (Government-to-Government Relations with Native American Tribal Governments; 59 FR 22951), Executive Order 13175 (Consultation and Coordination With Indian Tribal Governments), and the Department of the Interior's manual at 512 DM 2, we readily acknowledge our responsibility to communicate meaningfully with recognized Federal Tribes on a government-to-government basis. In accordance with Secretarial Order 3206 of June 5, 1997 (American Indian Tribal Rights, Federal-Tribal Trust Responsibilities, and the Endangered Species Act), we readily acknowledge our responsibilities to work directly with tribes in developing programs for healthy ecosystems, to acknowledge that tribal lands are not subject to the same controls as Federal public lands, to remain sensitive to Indian culture, and to make information available to tribes. In development of the SSA report, we sent letters noting our intent to conduct a status review and requested information from all tribal entities within the historical range of the coastal marten, as well as providing a draft SSA report to the tribes for review. The tribes within the range of the coastal marten include the Yurok Tribe; the Confederated Tribes of Coos, Lower Umpqua and Siuslaw Indians; the Coquille Indian Tribe; the Cow Creek Band of Umpqua Tribe of Indians; the Confederated Tribes of Grand Ronde; and the Confederated Tribes of Siletz Indians. As discussed earlier in this rule, we did not receive comments on the October 9, 2018, proposed rule (83 FR 50574) from any tribal entities. As such, we believe we have fulfilled our relevant responsibilities.
A complete list of references cited in this rulemaking is available on the internet at
The primary authors of this final rule are the staff members of the Fish and Wildlife Service's Species Assessment Team, the Arcata Fish and Wildlife Office, and the Oregon Fish and Wildlife Office.
Endangered and threatened species, Exports, Imports, Reporting and recordkeeping requirements, Transportation.
Accordingly, we amend part 17, subchapter B of chapter I, title 50 of the Code of Federal Regulations, as set forth below:
16 U.S.C. 1361-1407; 1531-1544; 4201-4245, unless otherwise noted.
(h) * * *
(s) Pacific marten (
(1)
(2)
(i) Conduct activities as authorized by a permit under § 17.32.
(ii) Take as set forth at § 17.21(c)(2) through (c)(4) for endangered wildlife.
(iii) Take as set forth at § 17.31(b).
(iv) Conduct forest management activities for the purposes of reducing the risk or severity of wildfire, which include fuels reduction projects, firebreaks, and wildfire firefighting activities. More specifically, forest management practices such as those that treat vertical and horizontal (ladder) fuels in an effort to reduce continuity between understory and the overstory vegetation and the potential for crown fires, remove fuels within 150 feet of legally permitted structures and within 300 feet of habitable structures, or implement Fuelbreak/Defensible Space Prescriptions that allow for removal of trees or other vegetation to create a shaded fuelbreak along roads or other natural features, or create defensible space.
(v) Conduct forestry management activities included in a plan or agreement for lands covered by a Natural Communities Conservation Plan or State Safe Harbor Agreement that addresses and authorizes State take of coastal marten as a covered species and is approved by the California Department of Fish and Wildlife under the authority of the California Endangered Species Act.
(vi) Conduct forestry management activities consistent with the conservation needs of the coastal marten (
(vii) Conduct activities to remove toxicants and other chemicals consistent with conservation strategies for coastal marten. Such activities include management or cleanup activities that remove toxicants and other chemicals from forested areas, for which the Service has determined that such activities to remove toxicants and other chemicals would be consistent with conservation strategies for coastal marten. Cleanup of these sites may involve activities that may cause localized, short-term disturbance to coastal martens, as well as require limited removal of some habitat structures valuable to coastal martens (
Bonneville Power Administration (BPA), Department of Energy (DOE).
Record of decision (ROD).
The Columbia River System Operations Environmental Impact Statement (CRSO EIS) dated July 2020 addresses the ongoing operations, maintenance, and configuration of the 14 federal Columbia River System (CRS) projects on the Columbia and Snake rivers. The 14 projects are Libby, Hungry Horse, Albeni Falls, Grand Coulee, Chief Joseph, Dworshak, Lower Granite, Little Goose, Lower Monumental, Ice Harbor, McNary, John Day, The Dalles, and Bonneville. The co-lead agencies (the U.S. Army Corps of Engineers [Corps], Bureau of Reclamation [Reclamation], and Bonneville Power Administration [Bonneville]) share responsibility and legal authority for managing the Federal elements of the CRS. These three co-lead agencies coordinate the operation of the CRS and have worked together to develop this EIS.
This Record of Decision will be available to all interested parties and affected persons and agencies and is being sent to all stakeholders who requested a copy. Copies of the Draft and Final CRSO EISs, and additional copies of this document can be obtained from Bonneville's Public Information Center, P.O. Box 3621, Portland, Oregon 97208-3621. Copies of these documents may also be obtained by calling Bonneville's nationwide toll-free request line at 1-800-622-4520, or by accessing the CRSO EIS project website at
Dave Kennedy, Environmental Planning and Analysis, Bonneville Power Administration—EC-4, P.O. Box 3621, Portland, Oregon, 97208-3621; or toll-free telephone number 1-800-622-4519; or email
The Corps and Reclamation develop operating requirements for their projects. These are the limits within which a reservoir or dam must be operated. Some requirements are established by Congress when a project is authorized, while others are established by the agencies based on operating experience. Within these operating limits, Bonneville schedules and dispatches power. This process requires continuous communication and coordination among the three agencies. The co-lead agencies have identified the Preferred Alternative, as described in detail in Chapter 7 of the Final EIS, as the Selected Alternative in this Record of Decision (ROD).
This CRSO EIS and ROD represent the detailed work, evaluation, and decision-making of the three co-lead agencies. The CRSO EIS was completed considering the input and assistance of the multiple cooperating agencies with special expertise and authority over the resources evaluated. The co-lead agencies provided for robust public and stakeholder review beginning with scoping and continuing throughout the National Environmental Policy Act (NEPA) process.
As part of the CRSO EIS, the agencies considered six alternatives to Columbia River System operations, maintenance, and configuration. The agencies analyzed the effects of these alternatives on the human environment, including environmental, economic, and social impacts. On February 28, 2020, the co-lead agencies released for public comment the Draft CRSO EIS describing the effects of these alternatives and identifying the agencies' Preferred Alternative. The 45-day public comment period ended on April 13, 2020, and the agencies reviewed and responded to these comments in the Final CRSO EIS. The co-lead agencies released the Final EIS on July 28, 2020, and the agencies issued this joint Record of Decision on September 28, 2020.
All three co-lead agencies recognize selecting an alternative is a complex decision, and have identified the Preferred Alternative as the Selected Alternative to implement. The agencies' expertise, developed over decades of experience operating the projects, allowed for careful, comprehensive consideration of current, high quality technical and scientific information, as well as expert analysis for thorough evaluation of each alternative. The agencies conferred with tribes, public interest groups, the Northwest's Congressional delegation and governors, as well as stakeholder groups, and Federal, state and local public service agencies. The co-lead agencies also closely read, considered, and responded to the public comments which represented diverse voices with numerous perspectives. The agencies considered the effects of making this decision, and sought to provide a balanced approach and the flexibility needed to continue operations and maintenance of the CRS in this dynamic environment.
On March 20, 2018, Office of Management and Budget (OMB) and Council on Environmental Quality (CEQ) issued an OMB/CEQ Memorandum to Heads of Federal Departments and Agencies titled “One Federal Decision Framework for the Environmental Review and Authorization Process for Major Infrastructure Projects under Executive Order 13807” (OFD Framework), in accordance with Executive Order 13807 (82 FR 40,463 (Aug. 24, 2017)). This “One Federal Decision” policy has increased federal coordination on environmental processes and review, shortened previous timelines, and resulted in the utilization of a joint ROD for federal agencies. This CRSO EIS ROD is consistent with the One Federal Decision policy.
The information presented in this joint ROD is the Corps' determination of the Selected Alternative for implementation, the agencies' compliance with the NEPA policy and procedures, environmental regulations, and public and agency review. The NEPA process has produced sufficient and accurate assessments of the resources, needs, concerns, and other issues that relate to the evaluated alternatives and has undergone public and agency review as required by 33 CFR part 230 and 40 CFR parts 1500 through 1508. The conclusions additionally have been reviewed and evaluated by an independent review panel and found to be appropriate. Consultation on the Selected Alternative has been completed per Section 7(a)(2) of the Endangered Species Act (ESA) and incorporated into the Selected Alternative. The Corps has determined, and the National Marine Fisheries Service (NMFS) and U.S. Fish and Wildlife Service (USFWS) CRS Biological Opinions demonstrate, based on the best available commercial and scientific information, that the Corps' implementation of the Selected Alternative will not jeopardize listed
Based on the analysis contained in the Draft and Final EIS (including review of a reasonable range of alternatives), the reviews by other Federal, State, and local agencies, Tribes, input of the public, and the review by my staff, I, D. Peter Helmlinger, P.E., Brigadier General, U.S. Army, Division Commander, select the alternative identified as the Preferred Alternative in the Final EIS as the Selected Alternative in this ROD. I find the Selected Alternative, along with the incorporation of the identified mitigation, and consistent with the requirements outlined in the Incidental Take Statements contained in the 2020 USFWS and NMFS CRS Biological Opinions, which were also incorporated in this decision, to be technically feasible, meets the Purpose and Need Statement and many of the objectives developed for the EIS, is in accordance with environmental statutes and in the public interest. Additionally, it best balances the human and natural environment in a manner calculated to foster and promote the general welfare, to create and maintain conditions under which man and nature can exist in productive harmony, and to fulfill the social, economic, and other requirements of present and future generations of Americans. I have also considered tribal treaty rights and the United States' trust responsibilities to the tribes in selecting this alternative. Actions that will be implemented by the co-lead agencies will improve salmonid survival, which will benefit tribal fisheries. Therefore, the Corps is deciding to operate its 12 CRS projects, and implement associated mitigation and conservation actions, according to the description of the Preferred Alternative in the Final EIS and the proposed action analyzed in the 2020 USFWS and NMFS CRS Biological Opinions.
Reclamation is deciding in this ROD to operate its two CRS projects, Grand Coulee and Hungry Horse, and implement associated mitigation and conservation actions, according to the description of the Preferred Alternative in the Final EIS and the proposed action analyzed in the 2020 USFWS and NMFS CRS Biological Opinions. The Final EIS provides Reclamation a reasonable range of alternatives to implement, identifies key issues and significant effects of alternative actions, and complies with the procedural requirements of NEPA and its implementing regulations. The Final EIS shows that the Selected Alternative is feasible and satisfies Reclamation's statutory obligations. The NMFS and USFWS CRS Biological Opinions demonstrate, based on the best available commercial and scientific information, that Reclamation's implementation of the Selected Alternative will not jeopardize listed species or adversely modify or destroy critical habitat.
This decision improves upon multiple existing measures related to project operations, such as by limiting winter drafting of Reclamation reservoirs to conserve water for spring flow augmentation for migrating salmon and steelhead. Reclamation will also coordinate with the sovereign inter-agency Technical Management Team to solicit, review, comment, and make recommendations for consideration during preparation of the Water Management Plan and during in-season operational adjustments. Additionally, Reclamation's tributary habitat restoration program has improved salmonid and lamprey habitat across the basin since its inception in the early 2000s. It has matured significantly over that period, and this decision implements several advancements resulting from program maturation. In particular, this decision implements improvements in project prioritization, focused research and monitoring efforts to directly support implementation knowledge, and efficiency gains in the design process.
Reclamation's decision implements new measures, including several operations at Grand Coulee. One allows additional maintenance flexibility on generating units and spillways, which the Final EIS shows could result in small increases in spill and thus downstream total dissolved gas (TDG) concentrations. It also updates flood risk management calculations, which Corps and Reclamation will apply in a coordinated and adaptive manner consistent with the Final EIS. Reclamation is also deciding to utilize local water supply forecasts in its operation of Hungry Horse, which will better balance downstream flow augmentation with local resident fish needs.
Before reaching this decision, Reclamation reviewed a reasonable range of alternatives in the EIS; the results of the physical, environmental, economic, and human resources impact analyses; comments submitted by federal, state, and local agencies, tribes, interested parties, and the public; and applicable laws and regulations. The Selected Alternative meets the Purpose and Need of the action, balancing Reclamation's ability to meet its statutory project obligations while also complying with the requirements of the ESA, Clean Water Act (CWA), and other applicable laws.
Bonneville is deciding to implement its part of the Preferred Alternative identified in the CRSO EIS (DOE/EIS-0529, July 2020), which also constitutes the proposed action reviewed in the 2020 NMFS and USFWS CRS Biological Opinions. Under the Selected Alternative, Bonneville will market and transmit the power generated by the CRS projects as part of coordinated system operations. More specifically, Bonneville will use the CRSO EIS for any operational changes associated with power marketing. These operations will be coordinated with other operational, maintenance or configuration actions for flood risk management, irrigation, fish and wildlife conservation, water quality, navigation and other congressionally authorized purposes. Bonneville's implementation of the Selected Alternative will also comply with all applicable laws and regulations, including the NEPA, the ESA, the Pacific Northwest Electric Power Planning and Conservation Act and the CWA.
As part of the Selected Alternative, Bonneville will continue to mitigate for the effects of its power operational actions. Bonneville will fund non-operational conservation measures as part of implementation of the proposed action consulted upon in the NMFS and USFWS CRS Biological Opinions and mitigation actions associated with the CRSO EIS (see Section 7.6 of the CRSO EIS; Attachment 1, Mitigation Action Plan). These actions will be included in its existing Fish and Wildlife Program and are consistent with the Northwest Power and Conservation Council's Columbia River Basin Fish and Wildlife Program (see Chapters 2, 5, 7 of the CRSO EIS; Attachment 1, Mitigation Action Plan).
In addition to Bonneville's fish and wildlife mitigation commitments described above, there are fish and wildlife mitigation costs associated with fulfilling Bonneville's power share responsibilities that are direct funded by Bonneville to the Corps and Reclamation for mitigation activities, such as hatchery operations, fish stocking, elk habitat maintenance, and others. In addition to the hatchery operations that are funded through the Fish and Wildlife Program, Bonneville will continue to provide USFWS with annual operations and maintenance
The CRSO EIS evaluated the long-term coordinated operation and management of the CRS projects for the multiple authorized project purposes. An underlying need is to review and update the management of the CRS, including evaluating measures to avoid, offset, or minimize impacts to resources affected by managing the CRS in the context of new information and changed conditions in the Columbia River Basin subsequent to the 1995 System Operation Review EIS, with the RODs in 1997. In addition, the co-lead agencies responded to the Opinion and Order issued by the U.S. District Court for the District of Oregon (District Court), described in more detail in Section 2.3. This included evaluating mitigation and non-operational conservation measures to address impacts to ESA-listed species from CRS operations. The CRSO EIS evaluated actions within the current authorities of the co-lead agencies, as well as certain actions that are not within their authorities, based on the District Court's observations about alternatives that should be considered and comments received during the scoping process. The CRSO EIS also provided information and analyses that allowed the co-lead agencies and the region to evaluate the costs, benefits, and tradeoffs of various alternatives as part of reviewing and updating management of the CRS. The co-lead agencies will use the information garnered through this process to guide future decisions, and allow for a flexible approach to meeting multiple responsibilities including resource and legal and institutional purposes of the action. A full discussion of the Purpose and Need for the CRSO EIS is discussed in Section 1.2 of the Final CRSO EIS.
The eight objectives presented below, along with the CRSO EIS Purpose and Need Statement (Section 1.2 of the Final CRSO EIS), guided the development of a reasonable range of alternatives. The co-lead agencies evaluated the alternatives to determine how effectively they met the objectives as described in Chapter 2. The specific objectives are as follows:
(1) Improve ESA-listed anadromous salmonid juvenile fish rearing, passage, and survival within the CRSO project area through actions including but not limited to project configuration, flow management, spill operations, and water quality management.
(2) Improve ESA-listed anadromous salmonid adult fish migration within the CRSO project area through actions including but not limited to project configuration, flow management, spill operations, and water quality management.
(3) Improve ESA-listed resident fish survival and spawning success at CRSO projects through actions including but not limited to project configuration, flow management, improving connectivity, project operations, and water quality management.
(4) Provide an adequate, efficient, economical, and reliable power supply that supports the integrated Columbia River Power System.
(5) Minimize greenhouse gas emissions from power production in the Northwest by generating carbon-free power through a combination of hydropower and integration of other renewable energy sources.
(6) Maximize operating flexibility by implementing updated, adaptable water management strategies to be responsive to changing conditions, including hydrology, climate, and the environment.
(7) Meet existing contractual water supply obligations and provide for authorized additional regional water supply.
(8) Improve conditions for lamprey within the CRSO project areas through actions potentially including but not limited to project configurations, flow management, spill operations, and water quality management.
On May 4, 2016, the District Court issued an opinion invalidating NMFS' biological opinion evaluating the operation of the Columbia River System. The Court held that the 2014 biological opinion violated the ESA and remanded the biological opinion to NMFS and ordered it to complete a new biological opinion. In addition to its findings under the ESA, the District Court found the Corps and Reclamation did not comply with NEPA when they adopted the biological opinion. The District Court ordered that a new environmental impact statement under NEPA be prepared by March 26, 2021 and that the agencies' respective related Records of Decision be issued on or before September 24, 2021. The District Court further ordered the Corps and Reclamation to continue to implement the biological opinion until a new biological opinion is prepared and filed. On October 18, 2018, the
On January 9, 2017, plaintiffs filed motions for injunction with the District Court requesting (1) increased spring spill at eight lower Snake and Columbia River Federal projects beginning with the spring 2017 fish migration season, (2) initiation of bypass operations on March 1, 2017, for smolt monitoring, and (3) a halt to spending by the Corps on certain ongoing and future capital projects at the four lower Snake River projects. On March 27, 2017, the District Court issued an Opinion and Order granting in part and denying in part the motions for injunction with respect to spill, smolt monitoring, and capital project funding.
In its spill ruling, the District Court indicated that it intended to order “increased spill” for the spring 2018 migration season. It ordered the Federal defendants
In its capital project ruling, the Court concluded that capital spending at the four lower Snake River dams is “likely to cause irreparable harm” under NEPA by creating a significant risk of bias in the CRSO EIS process. The Court declined, however, to enjoin two specific projects at Ice Harbor because their primary benefit is increasing fish survival. On May 16, 2017, the Federal defendants filed a joint proposed notification process to disclose sufficient information to the plaintiffs on future capital spending projects at each dam during the NEPA remand period at appropriate and regular intervals, as directed by the District Court, which it adopted in an order dated May 25, 2017. On June 8, 2017, the Corps and Bonneville provided information to National Wildlife Federation as part of the notification process on 13 capital hydropower improvement projects. Since June 2017, the Corps and Bonneville have continued to provide information on certain capital hydropower improvement projects, Columbia River Fish Mitigation (CRFM) and Other Non-Power capital projects (primarily navigation) at the lower Snake River
On October 30, 2017, the Federal defendants filed a status report with the Court addressing: (1) The appropriateness of the remaining NEPA schedule; and (2) how the agencies intend to integrate and coordinate the NEPA process and the ESA Section 7(a)(2) consultation. The Federal defendants reported they are on target to complete the NEPA process and will integrate the NEPA/ESA processes so the agencies can make informed decisions on the future management of the Federal Columbia River Power System (FCRPS).
On December 8, 2017, the Federal defendants and the plaintiffs filed a joint proposed order and spill implementation plan with the Court. On January 8, 2018, the District Court entered a final spill injunction order governing 2018 spring fish passage spill operations, in which the Court adopted the joint proposed order without modification.
In December 2018 the Federal defendants, the State of Washington (defendant-intervenor), the State of Oregon (plaintiff-intervenor), and the Nez Perce Tribe (amicus curiae) executed an agreement on spring operations (the
The statutes defining how the agencies operate, maintain, and configure the CRS play a critical role in this decision. Those laws fall primarily into two categories: (1) Specific authorizations to construct and operate projects for particular purposes; and (2) general operation and maintenance authorities and responsibilities. Collectively, these statutes define the full extent of the agencies' abilities to operate, maintain, and configure the CRS.
Congress enacted numerous specific statutes authorizing the construction and operation of each CRS project. Congress authorized the first two projects, Bonneville and Grand Coulee, in the Rivers and Harbors Act of 1935, Public Law 74-409.
Each project's authorizing statute differs, identifying, among other things, the specific purposes for which Reclamation or the Corps must operate a project. Likewise, each project's authorization may vary in defining how that purpose is implemented at each specific project. Every CRS project's authorizing statute includes hydroelectric power generation, and most also include navigation. All of the Corps projects are authorized to support recreation and fish and wildlife conservation.
Overlaying these specific project laws is the Pacific Northwest Electric Power Planning and Conservation Act, Public Law 96-501. Passed in 1980, the Act seeks to fulfill many objectives, including to provide “an adequate, efficient, economic, and reliable power supply” and “to protect, mitigate and enhance the fish and wildlife . . . of the Columbia River and its tributaries.” In support of these goals, the Act requires federal agencies, including the co-lead agencies, to exercise their responsibilities for operating and maintaining CRS projects “to adequately protect, mitigate, and enhance fish and wildlife . . . affected by such projects or facilities in a manner that provides equitable treatment for such and fish and wildlife with the other purposes” of the projects. It also obligates the co-lead agencies to take into account, at the relevant stages of their decision-making and to the fullest extent practicable, the Columbia River Basin Fish and Wildlife Program adopted by the Northwest Power and Conservation Council.
As a backdrop to the foregoing legislation specific to the CRS, general agency statutes also guide the agencies' operation, maintenance, and configuration of the CRS. These include foundational laws, like the Bonneville Project Act of 1937, Public Law 75-329, which governs aspects of Bonneville's power marketing activities; the Reclamation Project Act of 1939, Public Law 76-260, which guides Reclamation's operation of its two CRS projects; and the Flood Control Act of 1944, Public Law 78-534, which authorizes the sale of power from Corps dams, defines the Corps' role in flood risk management at non-Corps dams, and establishes recreation as a purpose of Corps projects.
In addition to these statutes, requirements of the ESA heavily influence CRS operations. Still other laws, including the CWA and National Historic Preservation Act, are important considerations in how the agencies operate and maintain the CRS projects.
Fulfilling these many statutory responsibilities, some of which must be balanced with each other and often pose conflicts, is extremely complex, requiring consideration of multiple factors across an expansive geographic scale. Many additional factors impacting these responsibilities involve matters beyond the reach of the agencies' authorities, including incoming water
The agencies used an iterative process to develop a range of alternatives for the future physical configuration, operation, and maintenance of the 14 projects of the CRS to achieve a reasonable balance of competing resource demands for the available water and for the multiple authorized purposes, including evaluating measures to avoid, offset, or minimize impacts to resources affected by managing the CRS in the context of new information and changed conditions in the Columbia River Basin since the System Operation Review EIS in 1997. This process began by identifying the EIS Purpose and Need Statement and objectives for future management of the CRS. A suite of eight preliminary draft alternatives were developed to focus on individual resources. These Single Objective Alternatives provided information regarding how well measures might perform when combined, and helped identify any conflicts between resources, actions, or locations. These alternatives informed the next iteration of alternatives development, resulting in a reasonable range of Multiple Objective Action Alternatives (MOs) suitable for analysis. Following analysis and identification of effects for the four MO alternatives, the co-lead agencies used these findings to develop a fifth action alternative, which was described as the agencies' Preferred Alternative.
The No Action Alternative includes all operations, maintenance, fish and wildlife programs, and mitigation in effect when the CRSO EIS was initiated in September 2016. Juvenile fish passage spill operations at the eight lower Columbia River and Snake River dams would follow the 2016 Fish Operations Plan developed by the Corps, which used performance standard spill provided under previous NMFS biological opinions. The co-lead agencies would also implement structural measures that were already budgeted and scheduled as of September 2016 that affected CRS operations. The majority of these structural measures are dam modifications to improve conditions for ESA-listed salmon and steelhead. For example, installation of Improved Fish Passage (IFP) turbines planned for Ice Harbor and McNary Dams would occur. Other ongoing habitat and mitigation programs would continue, as was planned at the time the CRSO EIS process started. A detailed description of measures included in the No Action Alternative is included in Section 2.4.2 of the CRSO EIS.
Multiple Objective Alternative 1 (MO1) was developed with the goal to avoid unreasonable effects—and if possible, achieve—congressionally authorized project purposes while also benefiting ESA-listed fish species relative to the No Action Alternative. MO1 differs from the other alternatives by carrying out a juvenile fish passage spill operation referred to as a block spill design. The block spill design alternates between two operations: A base operation that releases surface flow, where juvenile fish are most present, over the spillways using different flows at each project based on historical survival tests; and a fixed higher spill target at all projects. For the block that uses the same target at all projects, the operators would release flow through the spillways up to a target of 120 percent TDG in the tailrace of projects and 115 percent TDG in the forebay of those projects. The intent of these two spill operations is to demonstrate the benefit of different spill levels to fish passage. In addition, MO1 sets the duration of juvenile fish passage spill to end based on a fish count trigger, rather than a predetermined date. MO1 proposes to initiate transport operations for juvenile fish approximately two weeks earlier than under the No Action Alternative.
MO1 also incorporates measures to increase hydropower generation flexibility in the lower basin projects and alters the use of stored water at Dworshak for downstream water temperature control in the summer. MO1 includes measures similar to the other action alternatives, which include increased water management flexibility and water supply, and using local forecasts in whole-basin planning. MO1 also includes measures to disrupt predators of ESA-listed fish. A detailed description of the measures in MO1 is in Section 2.4.3 of the CRSO EIS.
Multiple Objective Alternative 2 (MO2) was developed with the goal to increase hydropower generation and reduce regional greenhouse gas emissions while avoiding or minimizing adverse effects to other congressionally authorized project purposes. MO2 would slightly relax the No Action Alternative's restrictions on operating ranges and ramping rates to evaluate the potential to increase hydropower generation efficiency and increase operators' flexibility to respond to changes in power demand and changes in generation of other renewable resources. The measures within MO2 would increase the ability to meet power demand with hydropower generation during the periods when it is most valuable (
This alternative proposed to transport all collected ESA-listed juvenile fish for release downstream of the Bonneville project, by barge or truck, and to reduce juvenile fish passage spill operations to a target of up to 110 percent TDG. Inclusion of the target up to 110 percent TDG spill operation provided the lowest end of the range of juvenile fish passage spill operations evaluated in the CRSO EIS.
Structural measures of MO2 are aimed at benefits for ESA-listed fish and lamprey. These measures are similar to other alternatives and include making improvements to adult fish ladders, upgrading spillway weirs, adding powerhouse surface passage, and IFP turbine upgrades at John Day Dam. A detailed description of measures included in MO2 is in Section 2.4.4 of the CRSO EIS.
Multiple Objective Alternative 3 (MO3) was developed to integrate actions for water management flexibility, hydropower generation at the remaining CRS projects, and water supply with measures that would breach the four lower Snake River dams (Lower Granite, Little Goose, Lower Monumental, and Ice Harbor). In addition to breaching these four projects, MO3 differs from the other alternatives by carrying out a juvenile fish passage spill operation that sets flow through the spillways up to a target of 120 percent TDG in the tailrace of the four lower Columbia River projects (McNary, John Day, The Dalles, and Bonneville). This alternative also proposes an earlier end to summer juvenile fish passage spill operations than the No Action Alternative. Instead, flows would transition to increased hydropower generation when low numbers of juvenile fish are anticipated.
Structural measures in this alternative include breaching the four lower Snake River dams by removing the earthen embankments at each dam location, resulting in a controlled drawdown. A
Multiple Objective Alternative 4 (MO4) was developed to examine a combination of measures to benefit ESA-listed fish, integrated with measures for water management flexibility, hydropower production in certain areas of the basin, and additional water supply. This alternative included the highest fish passage spill level considered in this CRSO EIS, dry-year augmentation of spring flow with water stored in upper basin reservoirs, and annually drawing down the lower Snake River and lower Columbia River reservoirs to their minimum operating pools (MOP). This alternative also included spillway weir notch inserts, changes to the juvenile fish transportation operations, and spill through surface passage structures for kelts, overwintering steelhead and steelhead overshoots. In MO4, the juvenile fish transport program would operate only in the spring and fall, while juvenile fish passage spill is set up to 125 percent TDG during the spring and summer spill season. The alternative contains a measure for restricting winter flows from the Libby project to protect newly established downstream riparian vegetation to improve conditions for ESA-listed resident fish, bull trout, and Kootenai River white sturgeon (KRWS) in the upper Columbia River Basin.
The structural measures in this alternative are primarily focused on improving passage conditions for ESA-listed salmonids and Pacific lamprey. The inclusion of spillway weir notch inserts is the only structural measure unique from the other MO alternatives. A detailed description of measures that are included in MO4 is in Section 2.4.6 of the CRSO EIS.
This alternative was developed using a combination of measures already described in one or more of the four MO alternatives, with some measures slightly refined based upon previous analysis during the EIS process. The Preferred Alternative also drew upon new information obtained from spill operations implemented in 2019 and 2020. The spill regime in this alternative includes a high rate of spill at six of the eight lower Columbia and lower Snake River projects (up to 125% TDG, consistent with the relevant state water quality standards) for up to 16 hours a day, then reduces spill for up to 8 hours, producing benefits for both out-migrating juvenile salmonids and hydropower. The Preferred Alternative also includes measures for lamprey and resident fish, and other measures intended to provide flexibility for water management and water supply operations over the foreseeable future. The Preferred Alternative also improves upon the actions committed to in the past to benefit ESA-listed fish species described in the No Action Alternative, ongoing routine maintenance of the 14 CRS projects, including maintenance of hydropower assets, navigation infrastructure, and fish facilities, continued management of invasive species, and management of avian and pinniped predators of ESA-listed salmonids.
Structural measures in the Preferred Alternative are focused on improving and maintaining hydropower assets, and making changes at the dams to improve passage and conditions for ESA-listed salmonids, resident fish, and lamprey. These include power plant modernization projects at the Hungry Horse, Grand Coulee, and Ice Harbor projects. Fish passage improvement projects are planned at Lower Granite, Little Goose, John Day, and Bonneville. One new structural measure was added to this alternative—closeable floating gate orifices at Bonneville to benefit lamprey.
Operational measures would provide flexible water management across the basin to adjust to local conditions and ensure water availability to benefit resident fish in the upper basin and improve flow conditions for ESA-listed fish in the middle and lower basin. The
The Preferred Alternative endeavors to provide the most balanced way to fulfill all of the CRS projects' congressionally authorized purposes, meets a majority of the CRSO EIS objectives, minimizes and avoids adverse impacts to the environment, benefits tribal interests and treaty resources, and provides additional improvements for ESA-listed species. The Preferred Alternative is described in detail in Chapter 7 of the CRSO EIS. The Preferred Alternative is selected in this ROD.
Federal agencies are required to identify the “environmentally preferable alternative” in their Record of Decision consistent with 40 CFR 1505.2. If the environmentally preferable alternative is not selected as the alternative for implementation, the agencies are to discuss the reasons for not selecting the environmentally preferable alternative. CEQ provided guidance on the “environmentally preferable alternative” in its
To identify the environmentally preferable alternative, the co-lead agencies used the policies identified in 42 U.S.C. 4331(b) (Section 101 of NEPA), to compare the alternatives and determine which meets the environmental intent of the law.
(a) The Congress, recognizing the profound impact of man's activity on the interrelations of all components of the natural environment, particularly the profound influences of population growth, high-density urbanization, industrial expansion, resource exploitation, and new and expanding technological advances and recognizing further the critical importance of restoring and maintaining environmental quality to the overall welfare and development of man, declares that it is the continuing policy of the Federal Government, in cooperation with State and local governments, and other concerned public and private organizations, to use all practicable means and measures, including financial and technical assistance, in a manner calculated to foster and promote the general welfare, to create and maintain conditions under which man and nature can exist in productive harmony, and fulfill the social, economic, and other requirements of present and future generations of Americans.
(b) In order to carry out the policy set forth in this chapter, it is the continuing responsibility of the Federal Government to use all practicable means, consistent with other essential considerations of national policy, to improve and coordinate Federal plans, functions, programs, and resources to the end that the Nation may—
(1) Fulfill the responsibilities of each generation as trustee of the environment for succeeding generations;
(2) Assure for all Americans safe, healthful, productive, and esthetically and culturally pleasing surroundings;
(3) Attain the widest range of beneficial uses of the environment without degradation, risk to health or safety, or other undesirable and unintended consequences;
(4) Preserve important historic, cultural, and natural aspects of our national heritage, and maintain, wherever possible, an environment which supports diversity and variety of individual choice;
(5) Achieve a balance between population and resource use which will permit high standards of living and a wide sharing of life's amenities; and
(6) Enhance the quality of renewable resources and approach the maximum attainable recycling of depletable resources.
The Preferred Alternative assures safe, healthful, productive, and esthetically and culturally pleasing surroundings by maintaining current riparian habitat, for example, while providing safe and reliable power generation. The Preferred Alternative supports the widest range of beneficial uses of the environment, without appreciable degradation, risk to health or safety, or other undesirable or unintended consequences by providing flood risk management, power generation and reliability, navigation, and fish and wildlife conservation, including improvements to fish survival, water supply, and irrigation. Commercial and tribal fishing in the lower Columbia and lower Snake rivers would improve over the No Action Alternatives. There would be fewer effects to cultural resources and improvements to tribal fisheries. The Preferred Alternative includes fish passage improvements, creating some job loss and potential higher power rates, as compared to the No Action Alternative. The agencies would monitor for potential shoaling at projects for unintended effects to navigation, resident fish, and anadromous adult fish passage at certain fish passage projects; this is included as mitigation. Effects to cultural resources will continue, but would be mitigated through the FCRPS Cultural Resource Program. Viewed with respect to “the interrelations of all components of the natural environment,”
For all alternatives, the potential effects were evaluated, as appropriate, and discussed in Chapters 3, 4, 6, and 7 of the CRSO EIS. A summary of the potential adverse effects of the Selected Alternative is listed in Table 1.
There are some localized moderate hydrological changes at Libby and Dworshak projects, affecting storage reservoir elevations and flows immediately downstream. Mitigation was proposed for habitat and riparian stabilization, as wetlands and aquatic habitat are primarily affected. Lower Snake River and lower Columbia River projects have increases in spill, potentially adversely affecting tailrace conditions, increasing energy dynamics that could cause sediment movement and damage to federal infrastructure. Shoaling and navigation channel effects would be monitored and any adverse effects would be mitigated, including dredging and potential coffer cells. This increased spill operation also creates a moderate impact to water quality because it could increase TDG, especially on the lower Snake River projects, which could adversely affect aquatic life and fish. Additionally, the spill could create eddies and delay migrating juvenile and adult salmon. These adverse effects have associated mitigation components including monitoring, maintenance actions, and fish transport, as well as adaptively managing operations as needed. These actions are described in the Mitigation Measures, Section 2.7, below, Chapter 5 of the CRSO EIS and Appendix R of the CRSO EIS, which includes the description of monitoring and adaptive management.
Modifications of reservoir operations could result in earlier and longer duration drafts of Lake Roosevelt in wet years, resulting in the Inchelium-Gifford Ferry being out of operation for on average four days per year more than under the No Action Alternative. This limits communities, primarily on the Confederated Tribes of the Colville Reservation, from accessing basic services such as medical and education services. Mitigation is proposed to extend the ramp for the Ferry to improve access and allow operation of the ferry under a wider range of reservoir elevations.
The Selected Alternative will negligibly affect cultural resources. The ongoing FCRPS Cultural Resource Program manages and treats cultural resources affected by operations and maintenance in the region, under a Programmatic Agreement between the agencies and consulting parties, and will continue with implementation of the Selected Alternative. There is the additional potential for impacts to built resources, such as modifications of the federal projects themselves, which could affect their historic value.
Under the Selected Alternative, hydropower generation will decrease and the CRS will lose 330 average megawatts (aMW) of firm power during critical water conditions (roughly the
The potential effects to commercial and tribal fisheries relative to the No Action Alternative vary from moderately adverse to majorly beneficial. Migrating juvenile anadromous fish could be affected by the
The EIS included a discussion of practicable mitigation measures to avoid or minimize adverse environmental effects that were analyzed and incorporated into the Selected Alternative. Best management practices will be implemented to minimize impacts during operations of the projects.
To mitigate for the unavoidable adverse impacts discussed in the previous section, the co-lead agencies will implement the mitigation actions described below. The descriptions also identify which agency is proposing to adopt each action. Each such measure is discussed in detail in Section 7.6 of the CRSO EIS, as well as the
The flow regime at Libby makes natural establishment of riparian vegetation downstream of the dam challenging. Higher winter flows make it difficult to sustain young stands of cottonwoods to maturity. The co-lead agencies would plant up to 100 acres of riparian forest along the Braided and Meander reaches of the Kootenai River near Bonners Ferry, using 1- to 2-gallon cottonwood trees, with the expectation that the larger size trees would be better suited to withstand the higher winter flows. This would improve habitat and floodplain connectivity to benefit ESA-listed KRWS, and complement other actions already being taken in the region to benefit their habitat. To the extent possible, this work will be completed through ongoing projects under Bonneville's Fish and Wildlife Program, such as the Kootenai Tribe of Idaho's Kootenai River White Sturgeon Habitat Restoration Program.
The co-lead agencies would plant up to 100 acres of native forested and scrub-shrub wetland vegetation at a lower river elevation in Region A (see CRSO EIS, Section 3.2.2.1, for descriptions of the regions). This would offset effects to existing wetlands and riparian forests downstream of Libby, which would be caused by the
It is expected that higher spill levels and the resultant TDG associated with the
Deeper drafts at Libby would result in lower lake elevations in spring, exposing previously submerged lands during the growing season and potentially allowing establishment of invasive weeds. The Corps would update and implement an invasive species management plan to combat the establishment and proliferation of invasive species, as required by Executive Order 13751.
In Lake Roosevelt, changes in elevation would result in higher rates of kokanee and burbot egg dewatering in winter, and lower reservoir levels in spring would decrease access to tributary spawning habitat for redband rainbow trout. Increased flexibility of refilling Lake Roosevelt through the month of October, depending on the annual water conditions, may affect the spawning success of kokanee, burbot and redband rainbow trout. In 2019, Bonneville funded year one of a three-year study to determine potential effects of modifications in Lake Roosevelt refill to resident fish spawning habitat access. Other evaluations will be conducted to determine potentially affected areas. If study evaluations and other available data indicate resident fish spawning habitat areas are affected by changes in reservoir elevations, the co-lead agencies will work with regional partners to determine where to augment spawning habitat at locations along the reservoir and in the tributaries (up to 100 acres). This mitigation action, when combined with the existing study funded by Bonneville, would evaluate existing effects to reservoir elevation changes from fall operations in Lake Roosevelt and would mitigate for additional effects of the new action. Exact sites and acreage would be determined post-alternative implementation. The Bureau of Reclamation commits to provide staff time and to seek technical assistance and funding to support collaboration with the Confederated Tribes of the Colville Reservation, the Spokane Tribe of Indians, and other interested parties to better understand the effects of Grand Coulee operations on the life history requirements of fish and wildlife resources in the Lake Roosevelt area.
Earlier and longer drafts at Grand Coulee would affect water levels,
It is expected that higher spill and variable timing of the spill over the course of a day could result in changes to the tailraces at Lower Granite, Lower Monumental and McNary. The Corps would monitor the tailrace at each project to track changes that could affect safe navigation or conditions for ESA-listed fish. If changes to the tailrace warrant action, the Corps would construct coffer cells to dissipate energy.
In Regions C and D, the increased spill operations and lower tailwater would increase shoaling in the navigation channel due to increased spill operations in the lower Snake and Columbia rivers, adversely affecting navigation. In order to maintain the navigation channel and reduce effects to negligible, effects would be mitigated by increasing the frequency and total volume of dredging at McNary, Ice Harbor, Lower Monumental, and Lower Granite at a four- to seven-year interval. As discussed above, shoaling would be monitored to determine if additional installation of coffer cells at Lower Monumental, Little Goose, and McNary could reduce dredging needs and further maintain the channel. Coffer cells would dissipate energy during high spill operations, which would support movement of sediment in the navigation channel, thereby maintaining navigational capacity and river transportation. This would increase overall maintenance costs for the projects, but would reduce the adverse effects to negligible. This work would be carried out by the Corps.
For new effects to archaeological resources, traditional cultural properties, and the built environment at storage projects caused by implementation of the Preferred Alternative relative to the No Action Alternative, the co-lead agencies would use the existing FCRPS Cultural Resource Program and the Systemwide Programmatic Agreement to implement mitigation actions, as warranted and appropriate.
The agencies considered several factors when making their decisions in this ROD. These considerations are described in detail below, and are in addition to considering the overall Purpose and Need Statement. The agencies also considered the authorized purposes for which the co-lead agencies operate the Federal projects, including how the purposes complement or conflict with each other, as briefly summarized in Section 2.4.
The co-lead agencies considered whether an alternative met the Purpose and Need Statement in making their decisions. Initially, eight single objective alternatives were developed to maximize certain project purposes and emphasize specific resources, utilizing the analytical assumption that other purposes did not constrain the actions that could possibly be taken. These single objective alternatives provided the framework for comparing the tradeoffs associated with different objectives throughout the Columbia River Basin. None of the single-objective alternatives were found to fully meet the Purpose and Need, and they were screened from further consideration; however, many of the measures in these alternatives were integrated into the MOs. In comparing the multiple objective alternatives, MO3 and MO4 did not meet, or did not fully meet, the Purpose and Need (see Table 7-1 in the Final EIS).
As outlined in the Purpose and Need Statement, the co-lead agencies responded to the Opinion and Order issued by the District Court
Based on input received during development of the EIS, and in response to the Order and Opinion issued by the District Court, the agencies focused on developing a Preferred Alternative that maintained and improved on their existing commitments for fish improvements in the region. As reflected in both the Purpose and Need Statement and EIS objectives, a key consideration for the co-lead agencies in their decision-making is how the alternatives could affect ESA-listed and
In addition to routine operations and maintenance of the CRS, the co-lead agencies implement a number of actions and programs to benefit ESA-listed species in the Columbia River Basin. Examples of these actions include habitat measures (
The Selected Alternative provides a balanced approach between spring and summer flow and spill operations to benefit ESA-listed juvenile and adult salmonids, while also providing benefits to ESA-listed resident fish in the upper Columbia River Basin. It includes measures that benefit adult and juvenile salmonids and continues commitments for ongoing actions to improve conditions for ESA-listed species through habitat improvements. The Selected Alternative is predicted to benefit survival of ESA-listed juvenile salmonids by improving fish passage conditions through reductions in juvenile travel times and instances of powerhouse and juvenile bypass system passage, as detailed in Section 7.7.4 of the CRSO EIS.
The Selected Alternative is also designed to evaluate return rates to the Columbia River Basin of ESA-listed salmonid will increase due to the improvements in the juvenile migration as detailed in Section 7.7.4 of the CRSO EIS. Improved adult abundance is predicted to increase as a result of improved juvenile survival and decreases in latent mortality, (
The co-lead agencies will monitor fish passage at the projects and utilize adaptive management principles in implementing the Selected Alternative based on results of biological studies and monitoring information.
The Selected Alternative is predicted to benefit ESA-listed bull trout and KRWS, as well as other resident fish through both operational and mitigation measures as detailed in Section 7.7.5 of the CRSO EIS. The Selected Alternative benefits resident fish by improving productivity and food resources in storage reservoirs and by including additional mitigation measures to improve habitat. Structural and operational measures developed for anadromous fish that regulate reservoir levels and remove predators may also provide beneficial effects to resident fish, especially in the lower Columbia River. The co-lead agencies would continue to utilize the Kootenai River Regional Coordination workgroups to guide adaptive management of operations and address technical issues related to KRWS.
In their analysis of the Selected Alternative under Section 7 of the ESA and its implementing regulations, the co-lead agencies conclude that the benefits to ESA-listed species' survival and recovery and to the conservation function of designated critical habitat are sufficient to outweigh and offset the Selective Alternative's adverse effects on ESA-listed species and designated critical habitat. As such, the Selected Alternative as a whole is not likely to contribute to any reductions in reproduction, numbers, or distribution of ESA-listed species that could appreciably reduce their survival and recovery, nor is the action as a whole likely to diminish the conservation function of designated critical habitat. For these reasons, the Selected Alternative is not an action that is likely to jeopardize the continued existence of ESA-listed species or destroy or adversely modify their designated critical habitat. Because of this, the co-lead agencies agree with the determinations of the USFWS and NMFS (together referred to as the Services) in the 2020 USFWS and NMFS CRS BiOps (together referred to as the 2020 CRS BiOps) that implementation of the Selected Alternative and the actions described in the Incidental Take Statements are not likely to jeopardize the continued existence of ESA-listed species or destroy or adversely modify their designated critical habitat. The jeopardy and destruction or adverse modification analyses in the 2020 CRS BiOps that facilitated the Services' determinations are based on the regulatory definitions for both “jeopardize the continued existence of” and “destruction or adverse modification” of designated critical habitat. The ESA regulations define “to jeopardize the continued existence of” a listed species, which is “to engage in an action that would be expected, directly or indirectly, to reduce appreciably the likelihood of both the survival and recovery of a listed species in the wild by reducing the reproduction, numbers, or distribution of that species.”
The analysis under these regulatory definitions must always consider whether the effects of the Selected Alternative's effects
By maintaining or improving actions that arose through past consultations, along with significant additional actions through the CRSO EIS process, the co-lead agencies developed the Selected Alternative to, on the whole, benefit ESA-listed species' likelihood of survival and recovery and the conservation function of designated critical habitat. The co-lead agencies worked closely with the Services throughout this development process, as well as cooperating agencies contributing to the CRSO EIS, to ensure that continued operation and maintenance of the CRS and implementation of the non-operational conservation measures, is not likely to jeopardize the continued existence of listed species and is not likely to destroy or adversely modify designated critical habitat.
The co-lead agencies have ensured compliance with the ESA through improvements to system operations and fish passage, with resulting higher dam passage survival rates and faster fish travel times.
The CSS model predicts substantial juvenile survival increases for Snake River spring-summer Chinook salmon and steelhead, and further predicts that fewer powerhouse passage events (as a result of higher spill levels and higher proportions of juveniles passing the projects via spillbays) will increase adult returns. NMFS LCMs did not predict increases to the levels that the CSS model did, but did qualitatively predict improvements in adult abundance if reductions in latent mortality occurred. The differences resulting from these two models are due to a number of factors, including how latent mortality is addressed in each model. The
In addition, the co-lead agencies have included other operational measures that are intended to offset the adverse effects of the operation and maintenance of the CRS. These measures include
The Selected Alternative also includes structural improvements for both juvenile and adult fish, as well as maintaining or improving implementation of non-operational conservation measures to help address uncertainty related to residual adverse effects of system operations and maintenance and the uncertainty related to effects of climate change, including habitat improvement and restoration actions in the tributaries and estuary, nutrient enhancement, continued support for conservation and safety net hatcheries, and predation management. In addition, the Selected Alternative and the Incidental Take Statements in the Services' 2020 CRS BiOps call for the co-lead agencies to submit regular reports to the Services on implementation progress, to conduct ongoing research, monitoring and evaluation (RM&E) of the biological effectiveness of conservation measures, and to manage implementation of the conservation measures adaptively as new information about mitigation action effectiveness emerges. Regular reporting facilitates transparency and co-lead agency accountability for implementing the Selected Alternative and Terms and Conditions. Taken together, the effects of the measures in the Selected Alternative will not appreciably reduce the likelihood of survival and recovery for ESA-listed species.
The overall health and condition of the Southern Resident Killer Whale (SRKW) depends on the availability of a variety of fish populations throughout their range. SRKW are Chinook specialists, but also consume other available prey populations while they move through various areas of their range in search of prey. There is no evidence that SRKW feed or benefit differentially between wild and hatchery Chinook salmon.
2016. Estimation of a killer whale (Orcinus orca) population's diet using sequencing analysis of DNA from feces. PLoS ONE 11(1):e0144956.
The co-lead agencies would continue to fund the operations and maintenance of safety-net and conservation hatchery
The Selected Alternative addresses adult and juvenile lamprey passage through specific structural modifications to the projects. These measures provide benefits to lamprey through reducing impingements and incidences of lamprey falling out of the Washington Shore Fish Ladder. The Selected Alternative also includes other measures that are expected to further benefit lamprey passage conditions. These measures are described in Chapter 7 of the CRSO EIS.
Input from the tribes was a key consideration in the co-lead agencies' decision to select the Preferred Alternative. The tribes of the Columbia River Basin represent distinct cultures, each unique. Most of the 19 tribes identified as being affected by the operations of the CRS provided extensive input into the CRSO EIS either as cooperating agencies or through their comments, or both.
Many upper basin tribes were concerned there was an inequity in the analysis resulting from a historical continuation of focusing on lower river issues at the expense of others in the region. They expressed their perception that the co-lead agencies prioritize resources on the lower rivers over upper basin needs and problems. This group was very interested in the construction of fish passage facilities and reintroduction above Grand Coulee and Chief Joseph dams, which had been eliminated from further detailed analysis in the CRSO EIS. Many upper basin tribes commented that the co-lead agencies failed to adequately engage or consider their concerns as a cooperating agency in the process. In response, the co-lead agencies worked closely to keep a balance in the Selected Alternative to benefit the entire Columbia Basin, and not disproportionately affect upper basin cultural or tribal resources. They also committed to ongoing regional collaboration to discuss future studies and initiatives for fish management in blocked areas above Chief Joseph and Grand Coulee dams.
Lower basin tribes engaged in CRSO EIS cooperating agency teams; however, these tribes expressed that the EIS failed to analyze a broad range of alternatives and inadequately considered climate change. Most tribes also were concerned whether the co-lead agencies complied with several laws, including the ESA, NEPA, and the Pacific Northwest Electric Power Planning and Conservation Act (Northwest Power Act). Generally, their comments expressed that consideration of breaching the four lower Snake River dams was completed without a thorough analysis and with biased methods. They expressed that the co-lead agencies fell short of regional salmon and steelhead recovery goals, and did not prioritize or place ESA-listed species recovery on equal footing with other resource improvements. They expressed their belief that there was bias in the methods and analysis conducted by the co-lead agencies against fish and for power and other project purposes. Throughout the process, the co-lead agencies discussed with the Tribes their concerns and preferences in alternatives, and many Tribes, as cooperators, participated in the analysis of alternatives. This was important in having a shared understanding of the resource effects and ultimately in determining the effects of implementing the Selected Alternative.
A few tribes around Libby and Hungry Horse shared that they found the CRSO EIS to be thorough and balanced, and supported both the analysis and the Preferred Alternative. Their focus was primarily around the resident fish, wildlife, and cultural resources in this region, and provided the CRSO EIS cooperating agency teams with measures and assisted in effects analysis for this region.
As discussed in Chapters 3, 4, 5, 6 and 7 of the CRSO EIS, the co-lead agencies considered the effects the alternatives had on cultural resources. Ongoing major effects to cultural resources under the Preferred Alternative would be similar to the No Action Alternative. The co-lead agencies determined that cultural resources affected by the implementation of the Preferred Alternative would be addressed under the ongoing FCRPS Cultural Resource Program.
The FCRPS Cultural Resource Program implements the terms of the existing Systemwide Programmatic Agreement for the Management of Historic Properties Affected by the Multipurpose Operations of Fourteen Projects of the Federal Columbia River Power System for Compliance with Section 106 of the National Historic Preservation Act (Systemwide Programmatic Agreement).
The Systemwide Programmatic Agreement commits the co-lead agencies to work collaboratively with the cooperating group participating organizations including states, tribes, and other federal agencies. The agencies will continue to support the FCRPS Cultural Resource Program over the course of implementing the CRSO EIS ROD. The agencies will continue to collaborate with participants in prioritization of actions and implementing treatments for cultural resources that are eligible for inclusion in the National Register of Historic Places that are adversely affected by implementation of the CRSO EIS ROD. Treatments may include a variety of both on-site and off-site options including less conventional treatments sometimes referred to as creative or alternative treatments. All treatments will be consistent with the respective implementing agency's authorities.
The co-lead agencies also took into account Native American treaty and reserved right as well as their trust
The co-lead agencies' commitment to implement actions that benefit ESA-listed fish, their designated critical habitat, and other wildlife helps fulfill Federal tribal treaty and trust responsibilities. As part of the implementation of the Selected Alternative, the agencies committed to ongoing coordination and open dialogue through the established Regional Forum. The Regional Forum workgroups have consistent participation by regional tribal sovereigns and this participation is critical to informing management actions and policy decisions. The co-lead agencies will continue to fund actions that benefit tribal partners, including the implementation of hatchery programs, habitat improvement actions, and other projects. This funding provides jobs for tribal members and promotes broad opportunities for exercising natural resource management expertise. These opportunities help protect trust resources while supporting tribal sovereignty and the exercise of treaty and resource management rights both on reservations and in ceded areas throughout the Columbia River Basin.
The co-lead agencies also engaged tribes during the development of the CRSO EIS and made extensive fish and wildlife mitigation commitments to tribes through the Columbia Basin Fish Accords and the 2018 Accord Extensions. These commitments further tribal sovereignty by supporting the tribes' exercise of their rights as comanagers of the fisheries in coordination with other resource managers in the region.
Reclamation, consistent with its requirements for decision-making under this ROD, has complied with its policy to evaluate potential impacts to Indian Trust Assets (ITAs) in the development of the EIS. ITAs are “trust lands, natural resources, trust funds, or other assets held by the federal government in trust for Indian tribes or individual Indians.”
In Region A, the Preferred Alternative is expected to have negligible to minor effects to water temperatures and TDG conditions at the projects when compared to what would occur under the No Action Alternative. In Regions B and D, the Preferred Alternative is expected to have negligible effects on water temperatures and TDG when compared to the No Action Alternative. In Region C, the Preferred Alternative is expected to have negligible effects to water temperature at Dworshak and all four lower Snake River projects. For TDG, moderate increases in Regions C and D are anticipated due to the
Under the Selected Alternative, the co-lead agencies will continue to implement certain measures to improve water temperature, where practicable, to address potential effects from the dams and reservoirs. For example, the effects of the Dworshak Dam summer cool water releases are expected to continue to influence water temperatures in the lower Snake River. At the Lower Granite and Little Goose Projects, the forebay tends to stratify, with warm water near the surface and cool water from the Dworshak Project deeper in the water column. When temperatures in the fish ladders are equal to or greater than 68 degrees Fahrenheit, the Corps operates pumps to supply the fish ladders with cool water pumped from deep in the reservoir. The pumps are typically operated from mid- to late summer, depending on climatic conditions. From June 1 to September 30, water temperature data is collected at adult ladder entrances and exits at each Corps project in the lower Snake and lower Columbia Rivers. This serves to monitor for temperature differentials in the ladder that could act to block adult fish from ascending the fish ladders to migrate upstream of each dam.
Moreover, the Corps would continue several actions related to adult fish ladder water temperature differentials: (1) Continue monitoring all mainstem fish ladder temperatures and identifying ladders with substantial temperature differentials (>1.0 degree Celsius); (2) where beneficial and practicable, develop and implement operational and structural solutions to address high temperatures and temperature differentials in adult fish ladders at mainstem dams with identified temperature issues; (3) complete a study that evaluates alternatives to assess the potential to trap-and-haul adult sockeye salmon at lower Snake River dams after development of a contingency plan by NMFS and state and tribal fish managers; and (4) maintain or improve the adult trap at Ice Harbor Dam to allow for emergency trapping of adult salmonids as necessary. The Corps may refurbish the trap in the future to prepare for the implementation of emergency trap-and-haul activities (
In terms of impacts from TDG, measures under the Preferred Alternative would be implemented consistent with state water quality standards to manage TDG exposure to fish in the Clearwater River below Dworshak Dam as well as manage TDG at Ice Harbor, John Day and McNary dams. Juvenile fish passage spill operations would be implemented at the lower Snake River projects and the lower Columbia River projects. The spill would benefit salmon and steelhead through increased spring juvenile spill, while providing a degree of protection against unexpected or unintended consequences that may occur due to spilling up to the 125 percent TDG cap, such as adult migration delay, gas bubble trauma, or damage to infrastructure. These spill levels are slightly variable, depending on the project, and may be higher or lower, depending on river conditions and the opportunity to spill in the spring. Spring and summer juvenile spill operations would be managed adaptively, through the established Regional Forum processes and as described in the CRSO EIS, Appendix R, Part 2, to address anticipated and unexpected challenges, such as
Bonneville, along with the Corps and Reclamation, evaluated whether the Preferred Alternative would continue to provide an adequate, efficient, economical and reliable power supply that supports the integrated Columbia River Power system. This purpose and objective holistically looks at maintaining the federal power system's ability to reliably produce power at a reasonable cost, while also balancing Bonneville's other statutory objectives and responsibilities. To assess whether the alternatives met this objective, the Final CRSO EIS measures the effects of the Alternatives on not only the federal system but also on broader regional reliability using the loss-of-load probability or LOLP metric.
LOLP is an electric industry reliability planning standard that measures the likelihood of an energy shortage in a given year.
Using the effects analysis for CRS operations from the Alternatives, the Final CRSO EIS calculates an LOLP for each alternative and then compares this value to the LOLP of the No Action Alternative, (
After reviewing the Final CRSO EIS, public comments, and analysis, the co-lead agencies concur with the findings in the Final CRSO EIS that the Preferred Alternative meets this objective and, therefore, is the agencies' choice for the Selected Alternative for CRS operations, maintenance and configuration. The Selected Alternative would decrease CRS hydropower generation relative to the No Action Alternative by 330 aMW of firm power assuming critical water conditions (roughly the amount of power consumed by about 250,000 Northwest homes in a year).
The LOLP does not increase even with the loss of generation because of the shape of the remaining generation in the Selected Alternative. The largest reductions in annual average hydropower generation occur in periods when the system generally has surplus (spring) and loads are easier to meet. The reduction in generation in the Selected Alternative during this period does lead to some risk of power shortages in June when there was none in the No Action Alternative, and increases the risk of power shortages in July and the first half of August compared to the No Action Alternative. Conversely, the Selected Alternative increases generation in late August and in the winter, periods when demand is often high and it is more difficult to meet load, reducing the risk of power shortages compared to the No Action Alternative. The net effect of the spring and early summer generation decreases combined with the late-summer and winter increases returns the LOLP to essentially the same level of the No Action Alternative.
While the Selected Alternative maintains reliability at the No Action Alternative levels in the near term, the analysis shows that over the long term this alternative meaningfully reduces the region's risk of blackouts when taking into account likely retirement of regional coal-fired resources in the future. As described in Section 3.7 of the Final CRSO EIS, the LOLP estimates used in the EIS analysis rely on the assumption that 4,246 megawatts (MW) existing coal generating capacity would continue to serve loads in the region over the study period.
Because the Selected Alternative essentially maintains regional reliability at the No Action Alternative levels, the Final CRSO EIS concludes that no replacement resources are needed to replenish lost firm power from the CRS projects.
Under the Selected Alternative, Bonneville's average wholesale Priority Firm (PF) power rate would experience upward rate pressure of $0.94 per megawatt-hour (MWh) or a 2.7 percent increase relative to the No Action Alternative, which results in a PF power rate of $35.50/MWh.
Regional average residential retail rates would experience slight upward rate pressure of +0.44 percent, though the effect would be larger for power customers of Bonneville and would range up to +1.2 percent in some counties.
The co-lead agencies considered, but ultimately chose not to select, the No Action Alternative, MO1, MO2, MO3, or MO4. CRS operations under MO1, MO3, and MO4, reduce federal power generation, which results in a corresponding reduction in power system reliability relative to the No Action Alternative,
The No Action Alternative met the Purpose and Need Statement of the CRSO EIS, but it did not meet all of the objectives developed for the CRSO EIS.
The Final CRSO EIS concludes that MO1 would not meet the Power Objective.
The Final CRSO EIS concluded that additional resources would need to be built to maintain regional reliability at the same level as the No Action Alternative. It considered two resource portfolios that regional utilities could likely select from to replace the decrease in generation capability under MO1. Those portfolios include: (1) A conventional least-cost portfolio (natural gas); and (2) a zero-carbon portfolio (solar and demand response). Under the conventional least-cost portfolio, approximately 560 MW of natural gas fired generation would be needed at a cost of around $43 million per year to return regional reliability to the level of the No Action Alternative.
As noted above, the Final CRSO EIS included a rate analysis to estimate the impact of each MO on Bonneville's wholesale power and transmission rates. This analysis showed that MO1 placed upward pressure on Bonneville's PF power rate. Depending upon the type of resources acquired and the source of funding for those resources, MO1 placed upward pressure on Bonneville's PF rate of between 4.5 percent and 8.6 percent over the No Action Alternative.
The regional average residential retail electric rates would also see increases under MO1. Regional retail rates could see upward rate pressure from between +0.65 percent and +0.79 percent annually depending on the applicable scenario.
MO2 best met the Power Objective.
MO2 also has the smallest wholesale power and transmission rate pressure of the alternatives, with a base power rate impact of −0.8 percent and a range of between −3.2 percent to a high of 1.3 percent under the sensitivity analysis.
The Final CRSO EIS concludes that MO3 would not meet the Purpose and Need Statement for the integrated FCRPS
Additional generation resources would be needed to maintain regional reliability at the No Action Alternative level. As with other MOs, the Final CRSO EIS considered two replacement resource portfolios: (1) Conventional least-cost; and (2) zero-carbon.
The “base case” evaluation in the Final EIS described the resources needed to return regional reliability to the level of the No Action Alternative (
The Final CRSO EIS rates analysis showed that MO3 would place substantial upward rate pressure on Bonneville's PF power rates. Under the least-cost conventional portfolio, Bonneville's power rates could see rate pressure in a range between 8.2 percent and 9.6 percent.
MO3 results in upward pressure on Bonneville's transmission rates as well. Upward transmission rate pressures would be 1.3 percent annually for the conventional least-cost portfolio and 1.6 percent annually under the zero-carbon portfolio, relative to the No Action Alternative.
The regional average residential retail rates for power would see substantial increases under MO3. Regional retail rates across all utilities (both Bonneville customers and non-Bonneville customers) could see upward rate pressure from between +1.7 percent and +2.8 percent depending on the applicable scenario.
While the high cost of MO3 is an important factor in the co-lead agencies' decision to not include breaching the four lower Snake River dams in the Preferred Alternative, other factors under MO3 also weigh against its selection. For example, the time involved to select, permit, and build the replacement resources and any associated transmission facilities is unknown. The Final CRSO EIS assumes breaching the four lower Snake River dams would occur starting in 2021. The Final CRSO EIS also assumes all replacement resources would be available to serve load beginning in 2023.
The CRSO EIS acknowledges the timing issues with these large resource builds, noting that it would likely take years—perhaps decades—to complete the planning, environmental analysis, permitting, land acquisition, and physical construction of the transmission and generation resources needed in this alternative.
Another important consideration weighing against selection of this alternative is the long-term regional reliability impacts of reducing existing carbon-free, flexible resources. As discussed in the Preferred Alternative, the Final CRSO EIS analysis assumes that coal plants generating 4,246 MW would continue to serve loads in the region over the study period.
The Final CRSO EIS analyzed the effects of coal plant retirements plus reductions in hydropower generation in the “Other Regional Cost” pressure sensitivity.
The Final CRSO EIS concludes that MO4 would not meet the Power Objective.
Returning regional reliability to the level of the No Action Alternative would require substantial investments in new resources. Using conventional least-cost resources, the Final CRSO EIS estimates that 3,240 MW of power produced by new natural gas plants would be needed to return regional reliability to the level of the No Action Alternative at an annual cost of approximately $242 million.
MO4 would place substantial upward rate pressure on Bonneville's PF power rates. Under the least-cost conventional (natural gas) portfolio, Bonneville's PF power rates could see base case rate pressure in the range between 15.3 percent (if regional utilities acquire the resources) and 23.5 percent (if Bonneville acquires the resources).
MO4 resulted in the most substantial upward pressure on Bonneville's transmission rates as well. Upward transmission rate pressures would be 1.6 percent annually for the conventional least-cost portfolio, and 1.9 percent under the zero-carbon portfolio, relative to the No Action Alternative.
Regional retail rates would also see significant upward rate pressure. On average, counties would experience a 2.9 to 3.3 percent upward rate pressure on their residential retail rate, depending on the replacement portfolio, relative to the No Action Alternative.
As with MO3, the co-lead agencies considered the long-term impacts on regional reliability and the feasibility of implementing this alternative. If the region selects a zero-carbon portfolio to replace the lost generation in MO4, then upwards of 30,000 acres of land or roughly 47 square miles would be needed to site a solar project capable of producing 5,000 MW.
Similar to MO1, MO3, and MO4, the Selected Alternative does not meet the CRSO EIS objective of minimizing greenhouse gases (GHG) emissions from power production in the Northwest. Hydropower generation will decrease, resulting in increased generation from existing gas and coal plants. The air quality analysis for the Selected Alternative concludes that power sector GHG emissions in the Northwest will increase by approximately 0.54 million metric tons per year, which is about 1.5 percent of total power sector emissions in the region. This increase is not as substantial as the increases for MO3 or MO4, but similar to the increase under MO1. For states that have established policies for reducing GHG emissions, such as Oregon and Washington, this could adversely impact the timeframe and costs associated with meeting these targets. Similarly, this could also increase the cost for utilities that need to comply with state policies that place a price on carbon or require use of a high percentage of renewables to meet retail load. For example, Washington's Clean Energy Transformation Act (2019) directs Washington retail utilities to serve loads with 100 percent carbon-neutral power by 2030 and 100 percent carbon-free power by 2045 (Revised Code of Washington 19.405). The CRSO EIS analysis indicates that in 2030 the approximately 0.54 million metric ton increase in GHG emissions could cost utilities—and ultimately ratepayers—across the region $15 to $77 million a year in compliance costs under these types of state programs (prices are stated in 2019 dollars).
Given the Selected Alternative's changes in hydropower generation largely occur in April through June,—a time of year when hydropower generation is typically surplus to Bonneville's preference customers' loads—it is more likely that increased
Future climate projections indicate warming temperatures and changes in precipitation trends, which generally are likely to result in declining snowpack, higher average fall and winter flows, earlier peak spring runoff, and longer periods of low summer flows. These changes could lead to higher and more variable winter flows and lower flows during summer months across all regions in the basin. Water temperatures throughout the basin are likely to increase. Climate change is expected to affect nearly all purposes and uses of the CRS. These effects are not caused by the CRS (though changes in operations of the system evaluated in the CRSO EIS impact hydropower generation and in turn regional GHG emissions) and are expected to occur regardless of the alternative selected. However, certain measures could exacerbate or ameliorate the impacts of climate change, thus affecting the overall resiliency of a resource in response to these expected changes in climate.
The analysis concluded that climate change is expected to have negligible to moderate effects (beneficial or adverse) on resources and the effectiveness of the Preferred Alternative. The EIS analysis showed minor to moderate effects from climate change to these resources: Hydrology and Hydraulics; River Mechanics; Water Quality; Anadromous Fish; Resident Fish; Vegetation, Wildlife, Wetlands, and Floodplains; Power Generation and Transmission; Flood Risk Management; and Fisheries.
In the final biological opinion, NMFS states that climate change poses a substantial threat to anadromous fish species over the next twenty years. While climate change will affect anadromous fish in all stages of life, the impacts are largely driven by changes in ocean conditions that are projected to reduce survival during the marine life history stage. NMFS concluded that “these conditions are not caused by, nor will they be exacerbated by, the continued operation and maintenance of the CRS as proposed in the biological assessment.” The USFWS concluded in its final biological opinion that the Preferred Alternative, in combination with other Federal and non-Federal actions, is likely to exacerbate the effects of climate change on resident fish by further diminishing habitat quality, decreasing forage availability, causing migration delays, and increasing the risk of injury and mortality. The USFWS recommended measures be taken where possible to increase instream flow to improve water quality, decrease stream temperatures, and otherwise reduce the impacts to resident fish from climate change. The Selected Alternative contains measures that are adaptive to emerging changes in climate and ensure there is flexibility to respond to future changes.
Operational measures for the Selected Alternative as well as non-operational conservation measures are expected to improve the existing survival levels of fish species and contribute to overall resiliency in light of climate change. For example, the co-lead agencies committed to continuing the tributary and estuary habitat improvement program for salmon and steelhead (with considerations for benefits to bull trout, where appropriate), habitat restoration actions for KRWS, and to evaluate and improve tributary habitat access for species such as bull trout which will give spawning fish access to additional habitat. These actions improve resilience to climate change by increasing access to more diverse spawning habitat. Another example of this is the tributary habitat restoration program that counters increased stream temperature with deeper pools and more shaded areas. These types of habitat improvement projects are examples of many actions that will be implemented throughout the Columbia Basin. The Selected Alternative also contains operational measures that are expected to contribute to species resiliency, such as the continued use of cool water stored behind Dworshak Dam and structures to address ladder temperature differentials to help to reduce water temperatures in the lower Snake River as fish approach and pass Lower Granite and Little Goose dams.
The Preferred Alternative also contains measures that provide additional flexibility for operations of the CRS, which may contribute to the resiliency of other resources to climate change. For example:
• The reduction in fish passage spill in the second half of August, which increases generation during a time when climate change is expected to increase demand for power while at the same time reducing the volume of water.
• The updated flood risk management drawdown operation at Dworshak, which will provide more planning certainty counteracting the increased uncertainty from climate change.
• Sliding scale operations for summer flow augmentation are staged to better respond to local water supply conditions by using local forecasts and to better balance anadromous and resident fish needs.
A full discussion of climate and evaluation of resources are included in Chapters 4 and 7 of the CRSO EIS.
Based on the nature of the CRSO EIS, the standards in the applicable statutes, and comments during scoping from the public, the co-lead agencies concurred that scientific integrity and independent review of both the analysis in the CRSO EIS and the methodologies used to conduct the evaluation were important parts of the process. Following the Corps and OMB guidance described in Corps (2018) and OMB (2004), the agencies had independent technical review conducted in addition to agency and cooperator agency technical review. This helped assure the evaluations were sound and identified where materials need clarity or where the information had considerable risk and uncertainty. These findings were used by the decisionmakers in considering alternatives and making a final selection. Several of the tools used were not owned or operated by the co-lead agencies. The results of these peer reviews are discussed in the body of the CRSO EIS. The owners of these tools were provided the results from the peer review panel to help improve the tools in the future, should those entities choose to do so.
In addition to the benefits that could be achieved by implementing each of the alternatives, the agencies closely reviewed the analysis of both benefits of implementing an alternative, and potential adverse impacts to the human and natural environment, including risk to human health or safety, changes to community culture and wellbeing, impacts to local and regional economies, and ability to access and enjoy the natural environment. The Northwest region has diverse tribal
The No Action Alternative would continue with the planned operations and mitigation components in place in September 2016. The No Action Alternative also would not include the additional water supply commitments from Lake Roosevelt, or the operations of Grand Coulee during planned maintenance activities over the next 25 years. The No Action Alternative also would not meet the Power, GHG, or water supply objectives of the EIS for balancing considerations of future operations.
All of the alternatives included measures to benefit ESA-listed anadromous and resident fish and lamprey. MO1 included several measures, which were carried forward or modified in the Preferred Alternative. MO1 included all lamprey structural measures included in the Preferred Alternative, except the
MO2 included measures with less spill and spring flow compared to the No Action Alternative and generally had lower expected performance related to anadromous adult and juvenile fish. For some species, such as Snake River Chinook salmon, the analysis produced mixed results with the NMFS Lifecycle models predicting minor improvements and the CSS Lifecycle models predicting major declines. The MO2 resident fish results showed the measures to increase power generation and water supply would have moderate to localized major adverse effects to resident fish throughout the basin, especially at Hungry Horse Dam where increased winter flows and lower summer reservoir elevations would affect food productivity, tributary access, habitat suitability, and entrainment. Regions B and C would also experience adverse effects to resident fish from power generation and water management measures that were eliminated or modified for the Preferred Alternative. Finally, MO2 included the same lamprey structural measures as MO1. Relative to the Preferred Alternative, the overall shift to more powerhouse flow and passage makes this alternative less effective at improving conditions for lamprey. Greater numbers of lamprey would likely pass near fish bypass screens and would be at a higher risk of injury or impingement compared to the No Action Alternative. Thus, although MO2 met the power and GHG objectives, it did not meet the objectives for ESA-listed juvenile fish or resident fish and may not meet the ESA-listed adult anadromous fish objective. These adverse effects could impact tribal and commercial fishing. It also did not meet the water supply objective.
MO3 included improvements to fish passage by structural modification with the
Significant human health and safety concerns were identified for MO3. This alternative has the potential to temporarily contaminate water, used for both municipal and agricultural purposes. Indirect impacts included potential to contaminate fish and communities that may consume these fish. The uncertainty around remediation actions that would be required to clean hot spots and underground storage leaks elevates the risk. Much of the safety improvements needed to public and private infrastructure (roads, rails, water intakes, pipes) in the reach of the lower Snake River would be conducted by other entities. The method of dam breaching would be staged and water levels lowered to prevent shoreline slumping, but changes in river velocities on infrastructure could contribute to degradation that would need to be addressed. Water intakes for municipal water access would need to be extended in some areas, a concern for communities to have access to adequate water supply. Several communities currently use the lower Snake and McNary reservoirs for fire prevention and emergency services via boats and sea planes, and would need to adjust their emergency plans. Carbon emissions and traffic congestion would be elevated in some communities as commodities shift from shipping by navigation to truck or rail. As sediment is moved through the system, areas of the navigation channel and shorelines could capture sediment and create temporary shoaling areas, which could pose hazards to boaters.
MO3 additionally would have adverse effects to the communities along the lower Snake River and confluence with the Columbia River. This area would have to adjust to changes in agricultural and shipping practices, and jobs. While economically these shifts will pass from one type of service to another, the people involved are likely to change, and the composition of these communities with it. There would be
There was significant short term risk to the natural environment with MO3 implementation. While mitigation and time could help offset those impacts to wetlands, floodplains and wildlife usage adversely affected by the breaching measure, there is significant uncertainty around responses to extended years of low dissolved oxygen. Significant die-off of aquatic organisms could occur. Long term risks include increases in ambient air temperature, which could exacerbate water temperatures in a post breach lower Snake River, which would be much shallower and narrower. It is anticipated it would be more sensitive to air temperatures, including getting hotter in the spring, and cooling earlier in the fall. The potential of unintended consequences is higher as there is greater uncertainty in multiple breaching scenarios, which could also implicate funding and associated production at mitigation hatcheries.
MO4, which had the highest juvenile fish passage spill levels and the most flow augmentation, also produced mixed results based on the two primary modeling approaches. NMFS Lifecycle models predicted that survival and abundance would decrease under MO4 while the CSS models predicted increases. MO4 incorporates a flow augmentation measure to benefit juvenile anadromous fish that would have major adverse effects to resident fish in the upper basin (Region A), and also in Lake Roosevelt (Region B), especially in dry years. Notably, this alternative is the only one that showed adverse effects to resident fish in the Pend Oreille River and Lake Pend Oreille. Additionally, MO4 included the same lamprey structural measures as MO1. Relative to the Preferred Alternative, the increased spill and flow augmentation under MO4 may result in minor beneficial effects for out-migrating juvenile lamprey. Adults migrating upstream in July would experience higher water temperatures in the Columbia River from Chief Joseph Dam to McNary Dam that would likely lower their survival and migration success relative to the Preferred Alternative. In MO4, drawdowns in late March could dewater sediment used for larval lamprey rearing, and this alternative could reduce the amount of habitat available for larval lamprey. MO4 has the potential to affect communities adversely along the upper storage reservoirs and rivers. The increase in water flows in the lower Columbia River would pull water from the upper basin projects, adversely affecting riparian and resident fish habitat. Many of these areas have tribal and commercial fishing, directly affecting the fish resources, economics, and community wellbeing. Additionally, these areas would have adverse visual effects. Several cultural sites would also be at risk of damage.
MO4 would remove flexibility for water discharge outlets at projects, and increase TDG in the water column. This has a known adverse impact to aquatic organisms, but uncertainty around the scale of adverse impacts at the project level. Additionally, the energy associated with the discharged spill could confuse and prevent migrating ESA-listed adult fish from passing the projects. There would be additional infrastructure maintenance and dredging of the navigation channel to sustain the higher spill, impacting the sediments and aquatic organisms more frequently. Finally, MO4 did not meet the ESA-listed resident fish, power or GHG objectives.
With these results, in concert with results relating to the other objectives in mind, the co-lead agencies developed the Preferred Alternative. A major difference from past operations is the Preferred Alternative includes a new spill operation to test balancing fish benefits and flexibility for hydropower production by spilling more water in the spring for juvenile fish passage. The Preferred Alternative did not carry forward some measures that were initially expected to provide a benefit to anadromous fish, including construction of additional powerhouse surface collectors because neither NMFS nor CSS Lifecycle modeling efforts predicted a measurable benefit to fish.
Relative to resident fish, the Preferred Alternative includes measures that provide benefits for resident fish, such as ramping rate restrictions, minimum downstream flow requirements, and temperature control, as well as ongoing non-operational conservation measures such as Kootenai River white sturgeon habitat restoration projects and leveraging benefits for bull trout where feasible when developing tributary habitat projects for salmon. Other measures allow for the summer draft from Libby and Hungry Horse Reservoirs for downstream flow augmentation to be determined based on local water supply forecast and to be sensitive to water supply conditions. As a result, water reservoir elevations would be a little higher in the summer, especially in dry years. This action is expected to affect resident fish by improving food production, tributary access, entrainment, and downstream habitat suitability. Finally, measures included in the Preferred Alternative should decrease susceptibility to physical stress and mortality for lamprey relative to the No Action Alternative. The Preferred Alternative is expected to contribute to improvements in spatial distribution and recruitment of Pacific lamprey in the Columbia Basin, though it remains difficult to quantify effects and benefits of some actions. Finally, the Preferred Alternative meets all EIS objectives except the GHG objective.
Public review of the Draft CRSO EIS was conducted February 28, 2020 through April 13, 2020 (85 FR 11986). All comments submitted during the public comment period were responded to in the Final CRSO EIS and can be found in Appendix T. A 30-day waiting period and state and agency review of the Final EIS was completed on August 31, 2020 (85 FR 46095).
The co-lead agencies received two comment(s) after issuance of the Final EIS. Commenters, included the U.S. Environmental Protection Agency (EPA) and the Columbia-Snake River Irrigators Association.
EPA provided comments pursuant to the National Environmental Policy Act, (40 CFR parts 1500-1508), and Section 309 of the Clean Air Act. The comments focused on appreciation for adding information requested during a meeting of the co-lead agencies with EPA; support for refining monitoring and adaptive management proposed in the EIS; and acknowledgement of modifications that were made in collaboration with Federal and non-Federal agencies, cooperating agencies, and tribes. EPA also expressed its willingness to continue support on wide-ranging water quality issues, where appropriate.
The Columbia-Snake River Irrigators Association submitted comments related to irrigation and navigation
The four states—Oregon, Washington, Idaho, and Montana—all provided expertise and contributions to the CRSO EIS as cooperating agencies. The states were unified in calling for a continued commitment to improving conditions for the region's fish and wildlife. In support of requests for continued regional collaboration, the co-lead agencies support efforts to hold forums focused on improving salmonid populations. The co-lead agencies expect that this EIS will provide a useful foundation of information as the region works together on a shared vision for abundant fish runs and a clean, reliable, and affordable energy future for the Northwest.
The agencies engaged with regional tribes after the release of the Final CRSO EIS and had additional discussions with five tribes.
There was uniform interest in next steps following the CRSO EIS and how the tribes would be included in regional forums, implementation of the CRSO EIS, and notably mitigation actions. All tribes inquired about how regional forums would be conducted, who the lead entities would be, goals of the forums, and what the agency roles would be. Frustration was expressed about the decision to not include fish reintroduction into blocked areas as part of the CRSO EIS alternatives. A strong interest was expressed for having fish reintroduction into blocked areas be the primary focus of upcoming forums. Many expressed a desire to collaborate on mitigation planning efforts (
The pre-ROD tribal consultations were informative and provided helpful suggestions, some of which were included in this joint ROD. Tribal perspectives have and will always continue to improve our agency understanding of the CRS. Discussions about the future of managing the CRS does not end with this EIS and associated Tribal consultations. This EIS is part of the ongoing effort to manage the CRS.
Many members of the public through public comments, cooperating agencies throughout their participation in developing the EIS and in comments on the EIS, and tribes expressed a preference for the agencies to select an alternative that included the dam breaching measures in MO3, sometimes in combination with juvenile spill operations in MO4. Although MO3 potentially had the greatest benefits for some species of ESA-listed fish, it would achieve those benefits at the expense of not meeting the other components of the agencies' Purpose and Need Statement or certain EIS objectives. The agencies also received numerous comments expressing opposition to MO3.
The measure to breach the four lower Snake River dams in MO3 (a main component of this alternative) has been the topic of a large amount of public discourse for decades. Many environmental organizations and some tribes have been strong proponents of breaching the dams. They assert breaching the dams will result in large improvements to certain salmonid populations, and this in turn would have beneficial effects to the overall function of the Northwest ecosystem and for tribal ways of life. At the same time, many stakeholders within the navigation industry, and agricultural producers within the region that depend on the navigation industry to export grains to overseas markets, have expressed high concern with the potential regional socioeconomic effects from breaching the dams. This alternative would eliminate approximately 48,000 irrigated acres, hydropower generation flexibility and navigation on the lower Snake River which affects the ability of this alternative to meet the Purpose and Need Statement.
Pursuant to Section 7 of the Endangered Species Act of 1973, as amended, NMFS and USFWS issued biological opinions, both dated July 24, 2020, that determined that the Selected Alternative will not jeopardize the continued existence of the following federally listed species or adversely modify designated critical habitat: Snake River (SR) spring/summer Chinook salmon, SR Basin steelhead, SR sockeye salmon, SR fall Chinook salmon, Upper Columbia River (UCR) spring-run Chinook salmon, UCR steelhead, Middle Columbia River steelhead, Columbia River chum salmon, Lower Columbia River (LCR) Chinook salmon, LCR steelhead, LCR coho salmon, Upper Willamette River (UWR) Chinook Salmon, UWR steelhead, the southern Distinct Population Segment of eulachon, bull trout, and KRWS. The agencies will implement the Selected Alternative reviewed in the consultations, as well as the Services' terms and conditions to both minimize take of ESA-listed species and avoid jeopardizing the continued existence of ESA-listed species or destroying or adversely modifying designated critical habitat.
Pursuant to Section 7 of the Endangered Species Act of 1973, as amended, the co-lead agencies determined that the recommended plan may affect but is not likely to adversely affect the following federally listed species or their designated critical habitat: Southern Resident killer whales, southern Distinct Population Segment of green sturgeon, streaked
In order to inform ongoing implementation of the Selected Alternative (with adaptive management principles), the co-lead agencies would continue to rely upon annual species status monitoring results to ascertain the need for contingency actions. The co-lead agencies do not propose to use specific abundance or trend triggers as previously set forth in the 2009 Adaptive Management Implementation Plan
The co-lead agencies complete appropriate environmental analysis prior to implementing fish and wildlife protection, mitigation and enhancement actions, whether that analysis is programmatic or site-specific. These analyses include review under all applicable laws and regulations. During the course of the implementation of future actions associated with operations from the CRS projects and the other actions addressed in the 2020 CRS BiOps, actions would continue to undergo site-specific environmental analysis prior to implementation.
The current consultation in the 2020 CRS BiOps encompasses operations and maintenance of the CRS for a fifteen-year period. This decision to implement the 2020 CRS BiOps is therefore a decision to implement the action as described therein until the end of that fifteen-year period, subject to adaptive management. If the next consultation commences before the 2020 CRS BiOps are fully implemented, the co-lead agencies and the Services will consider adjustments in the timing and content of remaining implementation plans and reporting called for in the 2020 CRS BiOps.
Under Section 305 of the Magnuson-Stevens Fishery Conservation and Management Act (MSA), the agencies consulted with NMFS as part of the consultation that resulted in the 2020 NMFS CRS BiOp. NMFS considered essential fish habitat (EFH) designated by the Pacific Fisheries Management Council for Pacific Coast groundfish and salmon and coastal pelagic species. NMFS concluded that further consultation under the MSA was not required for these habitats because the operation and maintenance of the CRS as described in the 2020 NMFS CRS BiOp would not adversely affect EFH for these species. NMFS made four conservation recommendations to mitigate adverse effects on EFH of species. In accordance with MSA Section 305(b)(4)(B), the agencies confirmed to NMFS that the agencies will adopt and follow these conservation recommendations, which were consistent with the measures in the proposed action and Terms and Conditions in the 2020 NMFS CRS BiOp.
Cultural resources affected by the implementation of the Selected Alternative will be addressed under the ongoing FCRPS Cultural Resource Program. The FCRPS Cultural Resource Program implements the terms of the existing
After reviewing the changes in operations, maintenance, and configuration proposed as a part of the Selected Alternative, the co-lead agencies have determined that the existing Systemwide Programmatic Agreement would address the co-lead agencies' responsibilities under Section 106 of the National Historic Preservation Act for all proposed operations. If it is determined at a later date that any proposed structural measures are not covered by the Systemwide Programmatic Agreement, then separate Section 106 compliance would be completed prior to construction, when sufficient site-specific information on the undertaking becomes available.
Unlike the National Historic Preservation Act, consultation under the Archaeological Resources Protection Act (ARPA) is only applicable to issuance of a permit to conduct archaeological investigations. Therefore, there is nothing specifically that the co-lead agencies would need to do as a part of considering these changes in operations, maintenance, or configuration. Under the Selected Alternative, the land managing co-lead agencies (Reclamation and Corps) will continue to issue ARPA-related permits to external project proponents for archaeological investigations occurring on their respectively managed Federal land. The co-lead agencies will also continue efforts related to documenting destruction or alteration of archaeological resources in violation of ARPA.
There is not a general consultation requirement triggered under this act by changes in operations, maintenance, or configuration under the Selected Alternative. The existing FCRPS Cultural Resource Program maintained by the co-lead agencies addresses inadvertent discoveries of human remains that could result from system operations (43 CFR 10.4).
The co-lead agencies do not anticipate taking any actions under the Selected Alternative that would infringe upon the rights afforded under the American Indian Religious Freedom Act to Native American tribes. The co-lead agencies will continue to consult and work with area tribes to protect and provide access to sacred sites on CRS Federal lands, when possible and practicable to do so.
Under the Selected Alternative, the co-lead agencies will continue to implement the existing FCRPS Cultural Resource Program which ensures the ongoing responsibility of managing Federal archaeological collections generated from Federal lands as a result of construction, operations, and maintenance.
Pursuant to the Federal Water Pollution Control Act of 1972 (33 U.S.C. 1251
For Section 404, the Corps prepared a Section 404(b)(1) evaluation to determine whether a project has unacceptable adverse impacts either individually or in combination with known or probable impacts of other activities that affect the aquatic resources in the project area. This evaluation can be found in Appendix W of the Final CRSO EIS.
Under the CWA, each state must develop a Total Maximum Daily Load (TMDL) for the waters identified on their Section 303(d) list of impaired waters, according to their priority ranking on that list. In May of 2020, EPA issued for public review and comment the TMDL for temperature on the Columbia and lower Snake Rivers to address portions of the rivers that Washington and Oregon have identified as impaired from temperatures that exceed the states' water quality standards.
The co-lead agencies will continue to operate certain measures to improve water temperature, where practicable, to minimize or offset potential effects from the dams and reservoirs, as described in the Key Considerations for the Decision, Water Quality, Section 3.9.
In terms of impacts from TDG, measures under the Selected Alternative will be implemented consistently with state water quality standards to manage TDG exposure to fish in the Clearwater River below Dworshak Dam as well as manage TDG at Ice Harbor, John Day and McNary dams. Juvenile fish passage spill operations will be implemented at the lower Snake River projects and the lower Columbia River projects. These measures are described above in Key Considerations for the Decision, Water Quality, Section 3.9.
The Spill Prevention Control and Countermeasures Rule (40 CFR part 112) includes requirements to prevent discharges of oil and oil-related materials from reaching the navigable waters of the United States and adjoining shorelines, among others. It applies to facilities with total aboveground oil storage capacity (not actual gallons onsite) of greater than 1,320 gallons and facilities with belowground storage capacity of 42,000 gallons. Construction activities associated with the structural measures would comply with this rule in implementing the Selected Alternative, if needed.
Under the Pacific Northwest Electric Power Planning and Conservation Act (Northwest Power Act), 16 U.S.C. 839
In addition, Bonneville has separate duties under the Northwest Power Act that the Corps and Reclamation do not share, as explained in Section 7.3 below. Specifically, Bonneville must use its authorities under the Northwest Power Act and other laws to “protect, mitigate, and enhance fish and wildlife to the extent affected by the development and operation” of the FCRPS, including the CRS.
The co-lead agencies must exercise their responsibilities for CRS projects, consistent with the purposes of the Northwest Power Act and other applicable laws, to adequately protect, mitigate, and enhance affected fish and wildlife in a manner that provides such fish and wildlife equitable treatment with the other purposes for which the CRS is managed and operated.
The equitable treatment provision of the Act specifically applies to the co-lead agencies' responsibilities for (1) “managing [and] operating” (2) the federal dam and reservoir projects themselves, including the CRS.
Further, the purposes of the Northwest Power Act also factor into the agencies' consideration of equitable treatment. In addition to protection, mitigation, and enhancement of fish and wildlife affected by the FCRPS, such statutory purposes include encouraging development of renewable generation resources and assuring the Pacific Northwest an adequate, efficient, economical, and reliable power supply.
The CRSO EIS process and the Preferred Alternative identified in the Final CRSO EIS demonstrate the co-lead agencies' continued equitable treatment of fish and wildlife in their operation and management of the CRS. Under the No Action Alternative, the co-lead agencies had provided equitable treatment for fish in part through annual
Ultimately, the operational and structural measures of the Selected Alternative strike a new equitable balance by expanding on the actions of the No Action Alternative that benefit fish while also accommodating continuation of all authorized system purposes.
With respect to wildlife, the existing effects associated with the majority of the CRS projects relate to the reservoirs' inundation of wildlife habitat; that is, the effects are the result of the dams' construction, not their operation, maintenance, or configuration. Bonneville's historic wildlife mitigation for construction and inundation effects have focused on offsetting effects up to the full-pool inundation level, which covers operational impacts that might occur between full-pool and minimum operations.
However, for the most part, the Northwest Power Act's equitable treatment provision tends to be more relevant in its application to fish rather than wildlife, particularly in light of the Act's stated emphasis on anadromous fish “which are dependent on suitable environmental conditions substantially obtainable from the management and operation of [the FCRPS].”
The CRS operations, maintenance, and configuration actions reflected in the Preferred Alternative and selected in this ROD, demonstrate the extent to which equitable treatment of fish and wildlife will continue in the co-lead agencies' management and operation of the CRS.
Under the Northwest Power Act, in their management and operation of the CRS, the co-lead agencies are to take into account, at the relevant stages of their decision-making and to the fullest extent practicable, the Columbia River Basin Fish and Wildlife Program (“Program”) adopted by the Council.
According to the Act, the content of the Council's Program is to consist of “measures”—
In practice, the Council's Program has grown to include a substantial aggregate of content addressing general policy, a regional vision for the Columbia River Basin, fisheries management goals, perspectives and advice on federal agency implementation practices, and other additional components to those prescribed by the statute—that is, the mitigation measures themselves. To the extent that these supplemental Program components are extraneous to content mandated by the Northwest Power Act, such components still prove useful context for the co-lead agencies to consider, but they do not carry the same weight as, for instance, the Program
The Council's Program is, in large part, an off-site mitigation (or “enhancement”) program that primarily recommends continued implementation of fish and wildlife projects such as habitat protection and improvements, artificial production (
In the various Program iterations since 2003—when it last provided comprehensive guidance on system operations in its “Mainstem Amendments”—the Council has for the most part amended its Program to follow or endorse the system management actions included in the current NMFS and USFWS biological opinions, Fish Accord agreements, and more recently the
In addition, another operational matter included in both the CRSO EIS and past Council Program guidance relates to the timing of Lake Roosevelt's refill to a particular elevation level in the fall. Under the Preferred Alternative, the date for the elevation refill target may be shifted to later in the fall than the date initially proposed as guidance in the Council's 2003 Mainstem Amendments. However, in considering this operational measure in the CRSO EIS, the co-lead agencies took into account the fish protection purpose associated with the Council's 2003 guidance (protecting access to kokanee spawning habitat) as well as subsequent mitigation work that was implemented to address the underlying concern.
Another topic raised in both the CRSO EIS process and the Council's Program is passage and reintroduction of anadromous fish above Chief Joseph and Grand Coulee dams. The Council's 2020 Program amendments recommended “Bonneville and others are to continue to make progress on the program's phased approach to evaluating the possibility of reintroducing anadromous fish above Grand Coulee and Chief Joseph dams.” It further said, “many others have a role to play—making progress on this effort is not the sole province of the program,” and therefore not the sole effort of the co-lead agencies, the primary implementers of the program. The co-lead agencies took reintroduction into account during the preparation of the CRSO EIS, but decided not to analyze it in detail for the reasons discussed in Section 2.5.10 of the Final CRSO EIS.
Finally, certain other Council Program provisions relating to general policy, regional vision, or fisheries management goals, rather than actionable statutory measures per se, have nonetheless been taken into account. For example, the Council's Program has continually included a 5 million fish goal and 2-6% SAR objective. This goal and objective apply to the entire Columbia River Basin and all federal and non-federal hydroelectric dams, not simply the FCRPS or the CRS. This goal and objective is also influenced greatly by fisheries management, climate, and ocean conditions, as well as farming, logging, mining, and development practices—all of which are beyond the co-lead agencies' control or sole responsibility to manage. The CRSO EIS nonetheless, examined the alternatives in terms of the likely effect each would have on SARs, and CSS analysis of the Preferred Alternative selected in this ROD estimates the potential for SARs greater than 2% for both Snake River spring Chinook and Snake River steelhead,
As described previously, relevant provisions of Council's Program were taken into account by the co-lead agencies in their consideration of the CRSO EIS alternatives and adoption of the Preferred Alternative. And as discussed in greater detail in Attachment 1, the Mitigation Action Plan included with this ROD likewise reflects Bonneville's consideration of the Council's Program with respect to relevant off-site mitigation aspects of the Program.
In accordance with the National Environmental Policy Act (NEPA) of 1969, the co-lead agencies published a Notice of Intent to prepare an EIS in the
The Selected Alternative provides flexibility to adjust to changing conditions by relying on adaptive management. However, the agencies may, if in the future they propose a new or altered measure, determine that it is appropriate to prepare a supplemental NEPA analysis or, if a site-specific analysis is needed, a tiered NEPA document. This situation may arise if there are substantial changes in the Selected Alternative that are relevant to environmental concerns or if there are significant new circumstances or information relevant to environmental concerns and bearing on the proposed action or its impacts,
Pursuant to the Fish and Wildlife Coordination Act of 1934, as amended, the co-lead agencies received the final Coordination Act Report (CAR) on May 28, 2020. The co-lead agencies considered the findings and recommendations while finalizing the EIS. Eighty-four recommendations are included in the final CAR and, of those, the majority are either part of the Selected Alternative or existing programs. A few recommendations are outside the scope of the action and were not adopted. Two recommendations are being considered as part of monitoring and adaptive management plans. The co-lead agencies' response to the USFWS' recommendations can be found in Appendix U of the CRSO EIS.
In accordance with provisions of Executive Order 12898 Environmental Justice, dated February 11, 1994, the Selected Alternative will not cause disproportionately high and adverse effects on any environmental justice populations.
In compliance with this order, the co-lead agencies contacted 19 tribes to request their assistance in identifying sacred sites within the study area. Kettle Falls and Bear Paw Rock have been identified as sacred sites. The effects to these sacred sites under the Selected Alternative are negligible, as described in Section 7.7.18 of the CRSO EIS.
In compliance with Secretarial Order 3175, this EIS has analyzed potential effects to Indian Trust Assets in Sections 3.17 and 7.7.19 of the CRSO EIS.
As summarized in Section 1.1.1, after reviewing the benefits, environmental effects, and unavoidable adverse impacts of the alternatives, as detailed in the Final EIS and this ROD, and thorough considerations of the views of Tribes, federal, state, and local agencies, and public comments, the Preferred Alternative described in the Final EIS is the Selected Alternative to be implemented for the ongoing operations, maintenance, and configuration of the Columbia River System. All applicable laws, regulations, executive orders, and local government plans were considered in evaluation of alternatives. Further, the Corps has determined, and the NMFS and USFWS Biological Opinions demonstrate, based on the best available commercial and scientific information that the Corps' implementation of the Selected Alternative will not jeopardize listed species or adversely modify or destroy critical habitat. This Record of Decision completes the National Environmental Policy Act process.
Date: September 28, 2020.
After reviewing the Purpose and Need Statement, EIS objectives and effects analysis for the alternatives, as detailed in the Final EIS, biological assessment, 2020 biological opinions, and this ROD, as well as input from the Tribes, federal, state, and local agencies, and public comments, Reclamation selects the Preferred Alternative described in the Final EIS as the Selected Alternative for the ongoing operations, maintenance, and configuration of the Columbia River System. All applicable laws, regulations, executive orders, and local government plans were considered in evaluation of alternatives. This Record of Decision completes the National Environmental Policy Act process.
Date: September 28, 2020.
Bonneville decided to implement its part of the Preferred Alternative identified in the Columbia River System Operations Final Environmental Impact Statement (DOE/EIS-0529, July 2020) and analyzed in the 2020 CRS BiOps, including the applicable terms and conditions set forth in these BiOps. This decision, as well as the evaluation of the alternatives is consistent with the authorities granted to it under existing statutes and complies with all applicable environmental laws and regulations and other applicable federal statutory and regulatory requirements. This Record of Decision completes the National Environmental Policy Act process. The Selected Alternative would have negligible to minor effects to floodplains and minor effects to wetlands. This decision continues to support an adequate, efficient, economical and reliable power supply that supports the integrated Columbia River Power system while providing for the conservation of fish and wildlife and protection and preservation of cultural resources affected by System operation. This decision helps protect and preserve Native American treaty and executive order rights and meet trust obligations. This decision also considers and plans for climate change effects on affected
All mitigation measures described in the Draft CRSO EIS and updated in the Final CRSO EIS have been adopted with the signing of this Record of Decision. A complete list of the mitigation measures Bonneville is adopting from the Draft and Final EISs can be found in the Mitigation Action Plan in Attachment 1. Additional mitigation measures are being adopted by the Corps and Reclamation as discussed previously and noted in their decision sections of this Record of Decision. The mitigation measures include additional commitments Bonneville agreed to as part of implementation of the proposed action analyzed in the 2020 CRS BiOps and Incidental Take Statements and the Final CRSO EIS (see Section 7.6 of the Final CRSO EIS; Attachment 1, Mitigation Action Plan).
Consistent with the factors considered in Section 3, Bonneville considered the Purpose and Need Statement, CRSO EIS Objectives, as well as the effects analysis, including direct, indirect and cumulative effects as well as the effects from climate and mitigation. As described below, Bonneville considered the ESA, NEPA and Northwest Power Act in making its decision.
Pursuant to Section 7 of the Endangered Species Act of 1973, as amended, Bonneville consulted with the Services on the operation and maintenance of the CRS for a fifteen-year period. The proposed action
USFWS issued a biological opinion (2020 USFWS CRS BiOp), dated July 24, 2020, and determined that the proposed action is not likely to jeopardize the continued existence of the following federally listed species or destroy adversely modify designated critical habitat: Kootenai River white sturgeon and bull trout. In addition, USFWS concurred with the agencies' determination that the recommended plan may affect but is not likely to adversely affect the federally listed species as listed in Section 6.1of this ROD or their designated critical habitat.
As described in further detail above and in Sections 3 and 5 of this ROD, and informed by the analysis in the 2020 Biological Assessment and the determinations in the Services' 2020 CRS BiOps, Bonneville has concluded that implementation of the proposed action and the actions described in the Incidental Take Statements are not likely to jeopardize the continued existence of ESA-listed species or destroy or adversely modify their designated critical habitat. Bonneville's analysis of the proposed action has led to the conclusion that the benefits to ESA-listed species' survival and recovery offset the adverse effects resulting from the proposed action in a manner that will not reduce appreciably the likelihood of survival and recovery or appreciably diminish the value of critical habitat as a whole. Bonneville also concludes that it has the authority and discretion to implement the proposed action and the actions described in the Incidental Take Statements in cooperation with the other co-lead agencies. Given these findings regarding the action proposed by Bonneville, this document records Bonneville's determination to operate and maintain the Columbia River System, in collaboration with the Corps and Reclamation, consistent with the action as described in the 2020 Biological Assessment, the 2020 Clarification Letter, and the Incidental Take Statements, including all terms and conditions and reasonable. This fulfills the regulatory requirements for ESA consultations, which provide that “[f]ollowing issuance of a biological opinion, the Federal agency shall determine whether and in what manner to proceed with the action in light of its [ESA] Section 7 obligations and [NMFS'] biological opinion.”
The following actions were proposed by Bonneville and analyzed by NMFS in its 2020 CRS BiOp. Bonneville believes that these actions are key to its finding under Section 7 of the ESA, either because of the associated benefits for ESA-listed salmonids or the lack of adverse effects from actions that benefit hydropower generation.
As described in more detail in Chapter 7 of the Final CRSO EIS and the 2020 Biological Assessment, the proposed action includes Flexible Spill that incorporates juvenile fish passage spill to levels that are much higher than the operations that have been implemented as part of a discretionary action
The implementation of Flexible Spill is intended to increase overall survival of fish passing through the system and returning as adults by providing additional spill during periods of time when spill is expected to be most important. The increased spill is expected to decrease the number of juvenile fish that bypass the dams through non-spillway routes, improve fish travel through the forebays, gain scientific information on latent (delayed) mortality, and provide
As described in Section 3.3.3, the CSS and NMFS Lifecycle modeling produced different results. In addition to differences in how latent mortality is addressed, the differences are also a result of a reduction in transportation rates as higher levels of spill resulting in fewer fish accessing the juvenile bypass systems where fish are collected for transportation. NMFS also qualitatively assessed potential improvements in adult abundance if reductions in latent mortality similar to those predicted by the CSS model were realized. Bonneville has included a robust monitoring plan for salmon and steelhead to help narrow the uncertainty between the biological models and help determine how effective increased spill can be in increasing salmon and steelhead returns to the Columbia Basin.
Adult steelhead can sometimes overshoot their natal streams, swimming above additional dams and then volitionally migrating back downstream past the dams to reach their natal streams in the fall, late winter, and early spring. In the CRS, substantial percentages of steelhead from some populations in the Middle Columbia River and Snake River Distinct Population Segments can exhibit this behavior. In order to reduce the adverse effects to overshooting adult Middle Columbia River and Snake River steelhead, in the fall of 2020, the Action Agencies will implement offseason surface spill as a means of providing safe and effective downstream passage for adult steelhead that overshoot and then migrate back downstream through McNary Dam and the lower Snake River dams during months when there is no scheduled spill for juvenile passage. The Action Agencies will implement this measure within the October 1 to November 15 and March 1 to March 30 timeframes, for a minimum of four hours per day, 3 times per week. The Action Agencies will utilize the information associated with these operations to investigate whether to refine the time period of spill based on benefits to steelhead through adaptive management.
From April 10 to June 1 (or as feasible based on river flows), the John Day reservoir elevation will be held between 264.5 feet and 266.5 feet to deter Caspian terns from nesting in the Blalock Islands Complex. The Action Agencies intend to begin increasing the forebay elevation prior to initiation of nesting by Caspian terns to avoid take of tern eggs; operations may begin earlier than April 10 (when the reservoir is typically operated between 262.0 to 266.5 feet). The operation may be adaptively managed due to changing run timing; however, the intent of the operation is to begin returning to reservoir elevations of 262.5-264.5 feet on June 1, but no later than June 15, which generally captures 95% of the annual juvenile steelhead migration. The results of this action will be monitored and communicated with the Services. During the operation, safety-related restrictions will continue, including but not limited to maintaining ramp rates for minimizing project erosion and maintaining power grid reliability.
Operations of turbines within the ±1% peak efficiency of the turbine range is generally considered to be beneficial for juvenile fish passage. Based on an analysis of historic system operations, conditions that necessitate or call for consideration of operations above 1% from peak efficiency are relatively rare and are typically short in duration
(a) Contingency Reserves—Bonneville deploys contingency reserves to meet energy demands caused by unexpected events such as transmission interruption or failure of a generator. These events are unpredictable in timing, magnitude, and location of the necessary deployment of contingency reserves, but occur approximately once per month and average 35 minutes. Bonneville will strive to cover contingencies without temporarily operating above 1% from peak efficiency and the use of contingency reserves is limited to no more than 90 minutes under reliability regulations;
(b) Balancing reserves—Bonneville is responsible for transmission system reliability, which requires the use of balancing reserves to respond to power demand and supply fluctuations (including the integration of renewable power sources). Operations will be set within ±1% of peak efficiency, but may exceed the upper end of this range for short durations of time; and,
(c) TDG management—during periods of high spring run-off, TDG levels can exceed 125% saturation. The Action Agencies may operate above 1% from peak efficiency to mitigate TDG production when flexible spill targets are met, all available turbines are operating, and additional power demand and market exists.
Operations above 1% from peak efficiency are likely to improve attraction to the adult fish ladders and have beneficial impacts on water quality by reducing TDG exposure for juveniles and adults migrating through the tailrace. NMFS did find that increasing
Generating hydropower to meet demand in the winter in the Pacific Northwest can be a challenge when demand can increase dramatically and there is little additional electricity available due to adjustments in power generation in order to integrate variable renewable resources. Therefore, Bonneville has and will continue to use the capacity of the CRS to support the flexibility necessary for this integration and has proposed an expansion of that capacity under limited circumstances. Between October 15 and February 28, power generation may cease at the four lower Snake River projects and water may be stored during nighttime hours (2300 to 0500) when adult fish are typically not passing. This operation will end no later than 2 hours before dawn to facilitate adult upstream passage, which generally resumes as the sun rises. Between December 15 and February 28, a period of time when water temperatures are low and very few adult fish are still migrating in the river, daytime hours will no longer be excluded from this operation, and up to 3 hours of daytime cessation may occur. NMFS found that Passive Integrated Transponder (PIT)-tag data indicated that some adult Middle Columbia River steelhead will migrate through and overwinter in the lower Snake River during this operation (as will bull trout), but past zero generation operations have not produced observably negative impacts for Middle Columbia River steelhead.
The conclusion that the proposed action is not likely to jeopardize the continued existence of ESA-listed species or destroy or adversely modify designated critical habitat is further supported by the inclusion of non-operational conservation measures to assist in addressing any residual adverse effects of operation and maintenance of the CRS and uncertainties related to the impacts of climate change. These measures are further discussed.
The Action Agencies have constructed and operated many structural modifications to the dams and to fish passage facilities associated with the dams over the past couple of decades that have had marked improvements in fish survival including juvenile bypass systems, improved turbine technology, spillway weirs, and modifications to ice and trash sluiceways and other surface routes. The Action Agencies are continuing to construct structural modifications that will benefit ESA-listed fish.
The first of these structural modifications is an ongoing effort to improve fish passage through the turbines by designing and constructing turbines (Improved Fish Passage or IFP Turbines) that will then be installed and tested for optimal configuration and to assess impacts to fish passage. The proposed action includes the completion of the efforts to design and install IFP turbines at Ice Harbor, McNary and John Day dams. Installation of the IFP turbines has the potential to improve fish passage conditions, improve hydropower efficiency and capacity, minimize greenhouse gas emissions, and indirectly improve water quality by reducing TDG. The proposed action also includes biological testing of the IFP turbines to determine whether the operation of the IFP turbines without fish screens would show a neutral or beneficial effect on ESA-listed fish survival metrics at each dam. The agencies will collaborate with the Services to develop a Turbine Intake Bypass Screen Management and Future Strategy process to monitor success of the IFP turbines and determine if and when it would be best to remove fish screens at these projects.
At Lower Granite and Little Goose dams, warm river surface temperatures in the forebay during late summer can create a temperature difference between the adult ladder exit and the entrance that can contribute to delays in adult passage. The Action Agencies have modified the juvenile bypass system to route excess water to the adult trap for cooling and installed intake chimneys that draw cooler water from deep in the forebay that is then released or sprayed in the fish ladder. These improvements were completed and installed during the winter of 2015-2016 and successfully tested to show that they effectively reduced near-surface water temperatures near the ladder exit.
The proposed action includes several other measures that will provide additional improvements to fish migration and survival. The Action Agencies will complete follow-on modifications to a new adult separator integrated into the Lower Granite Dam Juvenile Bypass System to reduce delay, injury, and stress to salmon and steelhead, bull trout, and non-target species. The Action Agencies will also design and implement structural modifications to the Lower Granite Dam adult fish trap gate to reduce delay and stress for adult salmonids and non-target species such as Pacific Lamprey. The Action Agencies will also design and implement cost-effective solutions designed to minimize and reduce ESA-listed salmonid injury and mortality associated with debris accumulation at lower Snake River dams and McNary Dam.
For over a decade, the agencies have implemented hundreds of projects to improve the quantity and quality of salmon habitat in the estuary
Bonneville proposes to implement targeted tributary and estuary improvements during the term of this BiOp to provide meaningful biological benefits for ESA-listed species. Bonneville and Reclamation will implement tributary habitat actions in collaboration with local experts utilizing the best scientific and commercial data available to develop strategies, priorities, and specific actions. Bonneville, the Corps and NMFS will also continue to coordinate and implement the Columbia Estuary Ecosystem Restoration Program (CEERP). With an institutionalized adaptive management framework, CEERP will continue to provide forums to revisit the habitat improvement actions and pair them with action-effectiveness monitoring results. The agencies will continue to implement habitat actions that were identified by NMFS as priority actions
To support ESA-listed salmon and steelhead species affected by CRS operations and maintenance, the Action Agencies will continue to fund the operations and maintenance of safety-net and conservation hatchery programs that preserve and rebuild the genetic resources of ESA-listed salmon and steelhead in the Columbia and Snake River Basins. These programs are helping to rebuild and enhance the naturally reproducing ESA-listed fish in their native habitats using locally adapted broodstocks, while maintaining genetic and ecologic integrity, and supporting harvest where and when consistent with conservation objectives. Safety-net programs are focused on preventing extinction and preserving the unique genetics of a population using captive broodstocks to increase the abundance of the species at risk. These programs have undergone separate, program-specific ESA consultations with NMFS, which have identified operations, best practices and associated monitoring to meet both production goals as well as reduce detrimental genetic and ecological effects on ESA-listed species. The programs will be operated in accordance with those BiOps. RM&E relevant to each hatchery program has been incorporated into the relevant hatchery program BiOp(s).
The proposed action includes a suite of predation measures to reduce the impacts from avian, pinniped, and piscivorous predators. Maintaining avian wires in the tailrace of lower Columbia and Snake River dams, active hazing of gulls at the dams, and the pattern of operating the spillway gates all mitigate for predation at the dams by birds and fish. The
The Action Agencies propose to continue monitoring and evaluation activities in coordination with other regional monitoring efforts that collectively track survival of ESA-listed species affected by the continued operation and maintenance of the CRS, including select PIT-tag marking, natural abundance monitoring, and selected fish status and trend monitoring in the Columbia and Snake River basins. The monitoring and evaluation efforts of the Action Agencies' tributary and estuary habitat programs have standardized and hierarchically organized the intensity of monitoring across sites. Collectively, these actions ensure a statistically sound sampling plan to inform adaptive management at the site and landscape levels.
These non-operational conservation measures, along with the continued operation and maintenance of the CRS, provide the basis for Bonneville to conclude that the action as described in the 2020 Biological Assessment and the Incidental Take Statement in the 2020 NMFS CRS BiOp is not likely to jeopardize the continued existence of ESA-listed species and is not likely to destroy or adversely modify designated critical habitat.
The following actions were proposed by Bonneville and analyzed by USFWS in its 2020 CRS BiOp. Bonneville believes that these actions are key to its finding under Section 7 of the ESA. These actions offset the adverse effects
The Action Agencies have proposed a suite of actions that have been designed to benefit KRWS and its designated critical habitat. As described in the proposed action, the Action Agencies will manage river flow and water temperature from Libby Dam in a manner that is likely to create improved river depth and water velocities in areas important for sturgeon migration, spawning and rearing, as well as to provide stable water temperatures during sturgeon migration and spawning periods. The sturgeon flow operation is a combination of three approaches: (1) Releases from Libby Dam during the Kootenai sturgeon spawning season and in coordination with the Flow Plan Implementation Protocol (FPIP) process; (2) use of the selective withdrawal facilities to achieve appropriate downstream river temperatures; and (3) a tiered volume approach that varies the volume of water available for sturgeon conservation each year depending on the May 1 forecast of total volume into Koocanusa Reservoir expected during the April through August period. Based on this approach, there is no flow augmentation during low water years. These measures are specifically designed to improve the co-occurrence of the Primary Constituent Elements of designated critical habitat for KRWS during critical periods of sturgeon breeding (appropriate water depths, water temperature, flow velocities, rocky substrate, and inter-gravel spaces).
In addition, Libby Dam will be operated consistent with variable discharge (VARQ) and flood risk management (FRM) procedures, which provide greater assurance that Koocanusa Reservoir will refill in medium runoff years. The proposed action modifies the VARQ FRM procedure to incorporate local conditions in the draft rate and account for planned releases during refill, such as the Sturgeon Volume, in order to respond to local FRM conditions and increase the chances of refill.
The proposed action includes continued implementation of the conservation aquaculture program for KRWS. Over 300,000 hatchery-origin KRWS have been released into the Kootenai basin since 1990. Monitoring data indicate that these hatchery-origin sturgeon are surviving at high rates. The program has successfully captured between 70 and 80 percent of the genetic diversity in the wild population, which has and will continue to help reduce effects to KRWS from CRS operations.
The proposed action includes implementation of a habitat restoration program, which is likely to increase spawning sturgeon access to river reaches that have sufficient amounts of rocky substrate, and is likely to address other habitat-related threats to Kootenai sturgeon. From 2011 to 2019, 12 habitat restoration projects have been successfully implemented in the Braided, Straight, and Meander reaches of the Kootenai River. Under the proposed action, the Action Agencies have committed to funding and implementing a minimum of one major habitat restoration project per year through at least 2025 (after 2025 additional projects may continue to be implemented, pending the results of an assessment of implemented restoration projects). Together, these projects have produced, and are expected to continue to produce, increased river depth and complexity, reduced bank erosion, increased available sturgeon spawning and rearing habitat, and enhanced fundamental ecosystem processes, which have and will continue to reduce effects to KRWS from CRS operations.
The proposed action includes nutrient additions in the Kootenai River and Kootenay Lake. Monitoring of these projects has shown increased beneficial algal production, increased abundance, biomass and diversity of invertebrate food items for fish, and improved overall biological productivity in the Kootenai River, which has and will continue to reduce effects to Kootenai sturgeon from CRS operations.
The Action Agencies have proposed a suite of actions that have been designed to benefit bull trout and its designated critical habitat. As described in the proposed action, Hungry Horse Dam is operated to meet minimum flows all year both below the dam on the South Fork Flathead River and at Columbia Falls, Montana on the mainstem Flathead River to benefit bull trout when not operating for FRM or releasing water for flow augmentation to benefit anadromous fish. Ramping rate limits were established below Hungry Horse Dam to reduce the likelihood of fish becoming stranded. Libby Dam is operated to provide minimum flows for bull trout and KRWS, including in September for bull trout habitat inundation. This action provides benefits that maintain water levels suitable for foraging and migrating throughout the Kootenai River. Libby's reservoir summer elevation is kept above 2,450 feet to improve primary production and zooplankton production. Providing surface spill to reduce adverse effects to overshooting adult steelhead at McNary and the lower Snake River dams is also expected to benefit bull trout during migration past the dams.
The Action Agencies' proposed action includes three non-operational conservation measures: tributary restoration actions, particularly on the Kootenai River, funding of the operations and maintenance of conservation and safety-net hatcheries, and monitoring of impacts to bull trout that are expected to minimize the long-term impact to survival and recovery of all affected Core Areas of bull trout during the timeframe of this consultation. In addition, the nutrient additions proposed for the Kootenai River will benefit bull trout at this location. Further, once construction of upstream passage occurs at Albeni Falls Dam, substantial benefits to bull trout in this Core Area are anticipated to occur, and have been included in this analysis as part of the environmental baseline as it is subject to a separate planning and environmental compliance process. Many of the proposed structural improvements discussed above in the discussion of the 2020 NMFS CRS BiOp for salmon and steelhead are expected to benefit bull trout, including the new IFP turbines at Ice Harbor, McNary, and John Day dams.
Proposed habitat restoration projects will benefit bull trout both in tributaries and in mainstem river habitats. The proposed action includes an evaluation
Additionally, habitat enhancement actions on and adjacent to the Kootenai River may improve juvenile to adult survival of kokanee salmon that are an important prey species for both KRWS and bull trout. Further, the Action Agencies will work with USFWS to leverage benefits for bull trout where feasible when developing tributary habitat projects for ESA-listed salmon and steelhead.
The Action Agencies will continue to monitor for bull trout at the lower Columbia and lower Snake River dams. The primary means of monitoring bull trout will be through the Corps' adult fish counts program, PIT detection arrays in fish ladders and juvenile bypass systems, and through the Smolt Monitoring Program (SMP). Monitoring objectives will be refined as priorities evolve and the state of knowledge advances. The Action Agencies will continue to emphasize monitoring that informs management needs.
In consideration of this suite of proposed actions for KRWS and bull trout, Bonneville concludes that the action as described in the 2020 Biological Assessment and the Incidental Take Statement in the 2020 USFWS CRS BiOp is not likely to jeopardize the continued existence of ESA-listed species and is not likely to destroy or adversely modify designated critical habitat.
In the 2020 NMFS CRS BiOp, NMFS found that climate change poses a substantial threat to anadromous fish species over the next twenty years. While climate change will affect anadromous fish in all stages of life, the impacts are largely driven by changes in ocean conditions that are projected to reduce survival during the marine life history stage. NMFS concluded that “these conditions are not caused by, nor will they be exacerbated by, the continued operation and maintenance of the CRS as proposed in the biological assessment.” USFWS concluded in the 2020 USFWS CRS BiOp that the proposed action, in combination with other Federal and non-Federal actions, is likely to exacerbate the effects of climate change on resident fish, but recognized the contributions that adaptive management and habitat improvement actions will have in supporting habitat and flexibility to respond to climate change.
The agencies will continue to utilize adaptive management principles in implementing the proposed action based on results of biological studies and monitoring information.
Biological performance for system operations will be tracked through ongoing juvenile and adult fish monitoring at the lower Columbia and lower Snake River dams. Annual and in-season monitoring results are used to inform in-season operations decisions and through the Regional Forum, identify potential research or evaluation needs, and inform longer-term management decisions regarding system operations. Bonneville will assess a number of the proposed operations and structural modifications through action-effectiveness evaluations, including the deployment of IFP turbines, spill for steelhead overshoots, and Flexible Spill. The agencies will implement planning and progress reporting to the Services to inform and signal appropriate adaptations to changing circumstances.
Bonneville will use the CRSO EIS for operational changes associated with CRS power marketing activities. These operations will be coordinated with other operational, maintenance or configuration actions for flood risk management, irrigation, fish and wildlife conservation, water quality, navigation and other congressionally authorized purposes. For mitigation actions, Bonneville will use a combination of existing programmatic NEPA documents as well as site-specific NEPA documents to implement certain mitigation measures described in Section 7.6 of the Final CRSO EIS and the Mitigation Action Plan. Since these actions mitigate for impacts from the CRS projects, these actions will be
Generally, if new or existing projects change the status quo or directly impact the human environment in a manner not considered in an existing NEPA document, commensurate NEPA analysis will be conducted. More specifically, Bonneville could either supplement or develop new NEPA documents consistent with 40 CFR 1502.9 and 10 CFR 1021.314. Moreover, consistent with its existing practice for new projects, Bonneville will determine the appropriate level of NEPA compliance once projects are proposed for implementation and integrate compliance with other applicable environmental laws, including but not limited to the Northwest Power Act, ESA and the National Historic Preservation Act.
For habitat restoration actions in tributaries in the Columbia River Basin, Bonneville will continue to conduct site-specific NEPA compliance for these actions (
For habitat restoration actions in the estuary, Bonneville will continue to determine whether the project fits under the Columbia Estuary Ecosystem Restoration Program Environmental Assessment (DOE/EA-2006) or if site-specific NEPA compliance is needed.
For hatchery projects, Bonneville will continue to rely on existing hatchery NEPA documents, where appropriate (
Finally, for research, monitoring and evaluation actions, Bonneville will either integrate these actions into applicable NEPA documents for other actions (
Thus, by completing the CRSO EIS, the agencies are ensuring the Preferred Alternative analysis and associated ESA consultations take into account updated information and analysis on operational, structural and mitigation measures. Additionally, using the flexibility afforded by NEPA, Bonneville will use existing NEPA documents, where appropriate or complete new or supplemental environmental evaluation, if necessary.
Apart from the co-lead agencies' shared Northwest Power Act duties discussed above, Bonneville's Administrator has a separate responsibility to use the Bonneville fund to “protect, mitigate, and enhance fish and wildlife to the extent affected by the development and operation” of the Federal Columbia River Power System, including the CRS.
In the context of the CRSO EIS, this responsibility applies to Bonneville's ongoing programs described in Chapters 2, 5 and 7 as well as the additional mitigation measures Bonneville is adopting in the Mitigation Action Plan. One of the ongoing programs described in Chapters 2, 5, and 7 is Bonneville's existing Fish and Wildlife Program. Mitigation actions and projects funded through Bonneville's Fish and Wildlife Program are the means by which Bonneville addresses its responsibility to “protect, mitigate, and enhance” fish and wildlife under 16 U.S.C. 839b(h)(10)(A).
To the extent that the Mitigation Action Plan includes any new or expanded actions, those will likely be incorporated into existing fish and wildlife mitigation projects that are already funded consistent with the Council's Program, and can be designed for implementation in such a way that is consistent with appropriate Program measures or guidance. In addition, Bonneville's funding of these mitigation actions through its Fish and Wildlife Program projects will follow other applicable provisions of the Northwest Power Act, such as the in-lieu funding prohibition
The Selected Alternative and associated ESA consultations take into account updated information and analysis on operational and non-operational conservation and mitigation measures. This alternative also provides for the conservation of fish and wildlife resources, including threatened, endangered, and sensitive species throughout the environment affected by CRS operations consistent with the NEPA, ESA and Northwest Power Act analysis. Thus, Bonneville is acting within its existing authorities and complying with applicable environmental laws and regulations and all other applicable federal statutory and regulatory requirements in making this decision.
This document of the Department of Energy was signed on September 28, 2020, by John L. Hairston, Acting Administrator and Chief Executive Officer, Bonneville Power Administration, pursuant to delegated authority from the Secretary of Energy. That document with the original signature and date is maintained by DOE. For administrative purposes only, and in compliance with requirements of the Office of the Federal Register, the undersigned DOE Federal Register Liaison Officer has been authorized to sign and submit the document in electronic format for publication, as an official document of the Department of Energy. This administrative process in no way alters the legal effect of this document upon publication in the
Interim final rule; request for comments.
The Department of Labor (DOL or the Department) is amending Employment and Training Administration (ETA) regulations governing the prevailing wages for employment opportunities that United States (U.S.) employers seek to fill with foreign workers on a permanent or temporary basis through certain employment-based immigrant visas or through H-1B, H-1B1, or E-3 nonimmigrant visas. Specifically, DOL is amending its regulations governing permanent labor certifications and Labor Condition Applications (LCAs) to incorporate changes to the computation of wage levels under the Department's four-tiered wage structure based on the Occupational Employment Statistics (OES) wage survey administered by the Bureau of Labor Statistics (BLS). The primary purpose of these changes is to update the computation of prevailing wage levels under the existing four-tier wage structure to better reflect the actual wages earned by U.S. workers similarly employed to foreign workers. This update will allow DOL to more effectively ensure that the employment of immigrant and nonimmigrant workers admitted or otherwise provided status through the above-referenced programs does not adversely affect the wages and job opportunities of U.S. workers.
This interim final rule is effective on October 8, 2020. Written comments and related material must be received on or before November 9, 2020.
You must submit comments, identified as DOL Docket No. ETA-2020-0006, via
For further information regarding 20 CFR parts 655 and 656, contact Brian D. Pasternak, Administrator, Office of Foreign Labor Certification, Employment and Training Administration, Department of Labor, Box #12-200, 200 Constitution Avenue NW, Washington, DC 20210, telephone: (202) 513-7350 (this is not a toll-free number). Individuals with hearing or speech impairments may access the telephone numbers above via TTY/TDD by calling the toll-free Federal Information Relay Service at 1 (877) 889-5627.
The Immigration and Nationality Act (INA or Act), as amended, assigns responsibilities to the Secretary of Labor (Secretary) relating to the entry and employment of certain categories of immigrants and nonimmigrants.
The INA prohibits the admission of certain employment-based immigrants unless the Secretary of Labor has determined and certified to the Secretary of State and the Attorney General that (I) there are not sufficient workers who are able, willing, qualified and available at the time of application for a visa and admission to the United States and at the place where the alien is to perform such skilled or unskilled labor, and (II) the employment of such alien will not adversely affect the wages and working conditions of workers in the United States similarly employed.
This “labor certification” requirement does not apply to all employment-based immigrants. The INA provides for five “preference” categories or immigrant visa classes, only two of which—the second and third preference employment categories (commonly called the EB-2 and EB-3 immigrant visa classifications)—require a labor certification.
The H-1B nonimmigrant visa program allows U.S. employers to temporarily employ foreign workers in specialty occupations. “Specialty occupation” is defined by statute as an occupation that requires the theoretical and practical application of a body of “highly specialized knowledge,” and a bachelor's or higher degree in the specific specialty, or its equivalent, as a minimum for entry into the occupation in the U.S.
The Department's regulations at 20 CFR part 656 govern the labor certification process and set forth the responsibilities of employers who desire to employ, on a permanent basis, foreign nationals covered by the INA's labor certification requirement.
Prior to filing a labor certification application, the employer must obtain a Prevailing Wage Determination (PWD) for its job opportunity from OFLC's National Prevailing Wage Center (NPWC).
Once the U.S. employer has received a PWD, the process for obtaining a permanent labor certification generally begins with the U.S. employer filing an
Through the requisite test of the labor market, the employer also attests, at the time of filing the Form ETA-9089, that the job opportunity has been and is clearly open to any U.S. worker and that all U.S. workers who applied for the job opportunity were rejected for lawful, job-related reasons. OFLC performs a review of the Form ETA-9089 and may either grant or deny a permanent labor certification. Where OFLC grants a permanent labor certification, the employer must submit the certified Form ETA-9089 along with an
The Department's regulations at 20 CFR part 655, subpart H, govern the process for obtaining a certified LCA and set forth the responsibilities of employers who desire to temporarily employ foreign nationals in H-1B, H-1B1, and E-3 nonimmigrant classifications.
A prospective employer must attest on the LCA that (1) it is offering to and will pay the nonimmigrant, during the period of authorized employment, wages that are at least the actual wage level paid by the employer to all other employees with similar experience and qualifications for the specific employment in question, or the prevailing wage level for the occupational classification in the area of intended employment, whichever is
As relevant here, the prevailing wage must be determined as of the time of the filing of the LCA.
An employer may not file an LCA more than six months prior to the beginning date of the period of intended employment.
Historically, the Department relied on State Workforce Agencies (SWAs) to determine prevailing wages for purposes of its nonagricultural labor certification programs.
Beginning at least as early as the 1990s, users of the H-1B program and permanent program users urged the Department to “create a multi-tiered wage structure to reflect the largely self-evident proposition that workers in occupations that require sophisticated skills and training receive higher wages based on those skills.”
The Department first adopted a multi-tiered system to determine prevailing wages for the nonagricultural labor certification programs in 1995, when it issued General Administration Letter No. 4-95 (GAL 4-95).
In October 1997, the Department amended its prevailing wage guidance to incorporate the wage component of the recently-expanded OES survey.
GAL 2-98 was accompanied by a Memorandum of Understanding (MOU) between ETA and BLS, wherein BLS agreed to provide, through its cooperative agreements with the SWAs, two wage levels for each occupational classification in areas of intended employment, where available.
In 2002, the Department issued additional guidance to SWAs regarding the assignment of prevailing wage levels.
That same year, in response to a proposed rule amending the permanent labor certification process, the Department received comments criticizing it “for arbitrarily dividing salary data into two wage levels” and “suggest[ing] existing OES wage data would be more useful if the number of wage levels were expanded to appropriately differentiate among various occupational groupings.”
The Department adopted the four-tier prevailing wage level structure that is currently in effect in response to the H-1B Visa Reform Act of 2004.
To implement this provision, the Department published comprehensive Prevailing Wage Determination Policy Guidance for Nonagricultural Immigration Programs (“2005 Guidance”), which expanded the two-tier OES wage level system to provide four “skill levels”: Level I “entry level,” Level II “qualified,” Level III “experienced,” and Level IV “fully competent.”
In 2010, the Department centralized the prevailing wage determination process for nonagricultural labor certification programs within OFLC's NPWC, eliminating SWAs' involvement in the process.
When assigning a prevailing wage using BLS OES data, the NPWC examines the nature of the job offer, the area of intended employment, and job duties for workers that are similarly employed.
A primary purpose of the restrictions on immigration created by the INA, both numerical and otherwise, is “to preserve jobs for American workers.”
The modern H-1B program was created by the enactment of the Immigration Act of 1990 (IMMACT 90). Among other reforms, IMMACT 90 established “various labor protections for domestic workers” in the program.
Wage requirements are central to the H-1B program's protections for U.S. workers.
The OES prevailing wage levels that the Department uses in the H-1B program—as well as the related H-1B1 and E-3 “specialty occupation” programs for foreign workers from Chile, Singapore, and Australia—are the same as those it uses in its PERM programs. Through the PERM programs, the Department processes labor certification applications for employers seeking to sponsor foreign workers for permanent employment under the EB-2 and EB-3 immigrant visa preference categories. Aliens seeking admission or adjustment of status under the EB-2 or EB-3 preference categories are inadmissible “unless the Secretary of Labor has determined and certified . . . that—(I) there are not sufficient workers who are able, willing, qualified . . . and available at the time of application for a visa and admission to the United States and at the place where the alien is to perform such skilled or unskilled labor, and (II) the employment of such alien will not adversely affect the wages and working conditions of workers in the United States similarly employed.”
The Secretary makes this determination in the PERM programs by, among other things, requiring the foreign worker's sponsoring employer to recruit U.S. workers by offering a wage that equals or exceeds the prevailing wage, and to assure that the employer will pay the foreign worker a wage equal to or exceeding the prevailing wage.
While the prevailing wage levels the Department sets in the H-1B, H-1B1, E-3, and PERM programs are meant to protect against the adverse effects the entry of immigrant and nonimmigrant workers can have on U.S. workers, they do not accomplish that goal—and have not for some time. For starters, the Department has never offered a full explanation or economic justification for the way it currently calculates the prevailing wage levels it uses in these foreign labor programs.
As noted, the INA requires employers to pay H-1B workers the greater of “the actual wage level paid by the employer to all other individuals with similar experience and qualifications for the specific employment in question,” or “the prevailing wage level for the occupational classification in the area of employment.”
To set an appropriate prevailing wage for an H-1B worker in a given occupation, it is therefore appropriate to identify what types of U.S. workers in the occupation have comparable levels of education, experience, and responsibility to H-1B workers. To answer this question, the place to start is the INA itself, which sets the minimum qualifications an alien must have to obtain an H-1B visa. While the INA makes clear that the prevailing wage levels must be set commensurate with education, experience, and level of supervision, it leaves assessment of those factors to the Department's discretion. How the Department exercises that discretion is informed by the legislative context in which the four-tier wage structure was enacted, which indicates that the wage levels are primarily designed for use in the Department's high-skilled and PERM foreign labor programs.
A review of this statutory framework and its interplay with the BLS OES survey data that the Department uses to calculate prevailing wages demonstrates that, while the OES survey is the best source of wage data available for use in the Department's foreign labor certification programs, it is not specifically designed for such programs, and therefore does not account for the requirement that workers in the H-1B program possess highly specialized knowledge in how it gathers data about U.S. workers' wages. This fact necessarily shapes how the Department integrates the OES survey into its foreign labor programs and also demonstrates the existing wage levels' inconsistency with the INA.
At the outset, the Department notes that much of its assessment of how best to adjust the prevailing wage levels gives special attention to the H-1B program. The H-1B program accounts, by order of magnitude, for the largest share of foreign workers covered by the Department's four-tier wage structure. Upwards of 80 percent of all workers admitted or otherwise authorized to work under the programs covered by the wage structure are H-1B workers.
Relatedly, the Department notes that the H-1B program is closely linked to the PERM programs that are also covered by the Department's wage structure. A very substantial majority of workers covered by PERM labor certification applications are already working in the U.S. as H-1B nonimmigrants, and there is significant overlap in the types of occupations in which H-1B and PERM workers are employed.
Under the INA, H-1B visas can, in most cases, only be granted to aliens entering the U.S. to perform services “in a specialty occupation.”
A few features of the definition bear emphasizing. First, the statute sets the attainment of a bachelor's degree in a specific specialty, or experience that would give an individual expertise equivalent to that associated with a bachelor's degree in the specific specialty, as the baseline, minimum requirement for an alien to qualify for the classification. Of even greater importance, having any bachelor's degree as a job requirement is not sufficient to qualify a job as a specialty occupation position—the bachelor's degree or equivalent experience required to perform the job must be “in the specific specialty.” In other words, the bachelor's degree required, or equivalent experience, must be specialized to the particular needs of the job, and impart a level of expertise greater than that associated with a general bachelor's degree, meaning a bachelor's degree not in some way tailored to a given field.
The Department has long relied on OES data to establish prevailing wage levels. That is because it is a comprehensive, statistically valid survey that, in many respects, is the best source of wage data available for satisfying the Department's purposes in setting wages in most immigrant and nonimmigrant programs. As the Department has previously noted the OES wage survey is among the largest continuous statistical survey programs of the Federal Government. BLS produces the survey materials and selects the nonfarm establishments to be surveyed using the list of establishments maintained by State Workforce Agencies (SWAs) for unemployment insurance purposes. The OES collects data from over 1 million establishments. Salary levels based on geographic areas are available at the national and State levels and for certain territories in which statistical validity can be ascertained, including the District of Columbia, Guam, Puerto Rico, and the U.S. Virgin Islands. Salary information is also made available at the metropolitan and nonmetropolitan area levels within a State. Wages for the OES survey are straight-time, gross pay, exclusive of premium pay. Base rate, cost-of-living allowances, guaranteed pay, hazardous duty pay, incentive pay including commissions and production bonuses, tips, and on-call pay are included. The features described above are unique to the OES survey, which is a comprehensive, statistically valid, and useable wage reference.
Put simply, the OES survey's quality and characteristics have made it, and continue to make it, a useful tool for setting prevailing wage levels in the Department's foreign labor programs. There are no alternative surveys or sources of wage data that would provide DOL with wage information at the same level of granularity needed to properly administer the H-1B and PERM programs.
That said, the OES survey is not specifically designed to serve these programs. For one thing, “the OES survey captures no information about differences within the [occupational] groupings based on skills, training, experience or responsibility levels of the workers whose wages are being reported”
Similarly, the INA's definition of “specialty occupation” should be accounted for in how the Department fits the OES survey into its foreign labor programs. The survey categorizes workers into occupational groups defined by the SOC system, a federal statistical standard used by federal agencies to classify workers into occupational categories for the purpose of collecting, calculating, or disseminating data.
For example, a common occupational classification in which H-1B nonimmigrants work is Computer Programmers.
The same is true for other occupational classifications in which H-1B workers are often employed. For example, the Medical and Health Services Manager occupation, as described by the OOH, does not in all cases require a bachelor's degree as a minimum requirement for entry.
A review of the OOH entries for the occupations in which H-1B nonimmigrants most commonly work demonstrates that most H-1B workers fall within SOC classifications that include some number of workers who would not qualify for employment in a specialty occupation. For instance, the OOH entries for Software Developers—an occupation accounting for over 40 percent of all certified LCAs
Simply put, the universe of workers surveyed by the OES for some of the most common occupational classifications in which H-1B workers are employed is larger than the pool of workers who can be said to have levels of education and experience comparable to those of even the least skilled H-1B
This consideration also demonstrates the inconsistency of the existing wage levels with the statutory and regulatory framework. As noted above, the Department's first wage level is currently set by calculating the mean of the bottom third of the OES wage distribution. That means the wages for many H-1B workers are set based on a calculation that takes into account wages paid to workers who almost certainly would not qualify to work in a “specialty occupation,” as defined by the INA. The Department has noted previously that “workers in occupations that require sophisticated skills and training receive higher wages based on those skills.”
Similarly, the current Level IV wage is set by calculating the mean of the upper two-thirds of the wage distribution. That means that the wage level provided for the most experienced and highly educated H-1B workers is determined, in part, by taking into account a sizeable number of workers who do not even make more than the median wage of the occupation. Given the correlation between wages and skills, this calculation also would appear inconsistent with the statutory and regulatory framework. Common sense dictates that workers making less than the median wage of the occupation cannot be regarded as being similarly qualified to the most competent and experienced members of that occupation.
The same reasons for discounting a portion of the workers at the bottom of the OES wage distribution in order to compute appropriate entry-level wages—because such workers are not similarly employed to even the least skilled H-1B workers—also apply to the wages for the EB-2 immigrant visa preference classification and the E-3 and H-1B1 nonimmigrant programs, for which the Department also uses the four-tier prevailing wage structure.
The E-3 and H-1B1 visa classifications, like the H-1B classification, have as a prerequisite for obtaining a visa that the alien work in a specialty occupation.
As for the EB-2 classification, the reasons for discounting the lower end of the OES wage distribution for setting the baseline to establish an entry-level wage for the classification are even more apparent than they are for the specialty occupation programs. Under the INA, the EB-2 classification applies to individuals who are “members of the professions holding advanced degrees or their equivalent or who because of their exceptional ability in the sciences, arts, or business, will substantially benefit prospectively the national economy, cultural or educational interests, or welfare of the United States.”
The regulation goes on to define “exceptional ability” to mean “a degree of expertise significantly above that ordinarily encountered in the sciences, arts, or business.”
As is the case for H-1B nonimmigrants, the baseline, minimum qualifications that an EB-2 immigrant must possess exceed the educational and experiential requirements the OOH describes as generally necessary to enter some of the most common SOC occupational classifications in which EB-2 immigrants work. For example, the most common occupation in which PERM labor certifications—of which applications for EB-2 immigrants represent a substantial share—are sought is Software Developers, which accounts for nearly 40 percent of all approved PERM applications. As already noted, according to the OOH, Software Developers “
In sum, the eligibility criteria established by the INA for most of the immigrant and nonimmigrant programs
Beyond their inconsistency with the statutory scheme, the Department has also evaluated evidence on how the existing prevailing wage levels affect U.S. workers, and has concluded that the current levels are harming the wages and job opportunities of U.S. workers, and thus failing to serve the purposes of the INA's wage protections. This is a separate and independent reason justifying the Department's decision to adjust the existing levels. It also demonstrates that whatever assumptions or analyses, left unarticulated, that may have underlay the manner in which the current levels are set were seriously flawed.
First, a number of studies indicate that many H-1B workers are likely paid less than similarly employed U.S. workers in fields with high H-1B utilization. Where the wages of foreign workers are lower than those of U.S. workers, at least two harmful consequences to U.S. workers are likely to follow. In particular, employers will, in some instances, use H-1B workers to displace U.S. workers, and U.S. workers will experience wage suppression. Anecdotal evidence and academic research suggests that both consequences are being experienced by U.S. workers because of the H-1B program, which further substantiates the conclusion that wages for H-1B workers are, in some cases, materially lower than they would be if the prevailing wage levels actually resulted in H-1B wages commensurate with the wages paid to similarly employed U.S. workers with comparable levels of education, experience, and responsibility. Further demonstrating that the current prevailing wage levels do not in many cases reflect market wage rates, data on the actual wages paid by H-1B employers show that some firms do in fact pay H-1B workers wages well above the prevailing wage rates generated through application of the Department's four-tier wage structure. If the prevailing wage levels were correctly approximating the wages commanded by workers in the relevant labor markets, such significant disparities between actual wages and the prevailing wage levels would likely be less common. Such disparities also suggest that firms to which the statute's actual wage clause does not apply can pay wages well below what U.S. workers in the same labor market are paid. The Department also considered various studies that suggest the employment of H-1B workers has positive effects on the wages and job opportunities of U.S. workers. While the Department agrees that this is true in some instances, it is also clear that the current prevailing wage levels often result in adverse effects, and that adjustments to the wage levels are needed to ensure that the positive effects of the program will be enjoyed more widely. Finally, the Department notes that the evidence of the adverse effects of the existing prevailing wage levels in the H-1B program also likely applies to the PERM programs.
To begin, a variety of studies and analyses demonstrate that the current wage levels allow employers to pay H-1B workers wages far below what their U.S. counterparts are paid.
Studies on the subject often focus on the wages paid to H-1B workers in computer-related occupations, in which nearly two-thirds of all H-1B workers are employed.
One negative consequence that would be expected to occur if H-1B workers could be paid less than their U.S. counterparts is that some employers would use H-1B workers as a low-cost labor alternative to displace U.S. workers—a result at odds with the purpose of the statutory scheme. A significant body of research on how H-1B workers are used by some firms suggests that is exactly what is occurring.
Another likely harmful consequence for U.S. workers in cases where H-1B workers can be paid below what comparable workers in the same labor market are paid is wage suppression. Academic research indicates that the influx of low-cost foreign labor into a labor market suppresses wages, and this effect increases significantly as the number of foreign workers increases.
For starters, H-1B workers make up about 10 percent of the IT labor force in the U.S.
One study compared winning and losing firms in the FY2006 and FY2007 lotteries for H-1B visas by matching administrative data on these lotteries to
Similarly, other studies have found that an influx of foreign computer science workers suppresses wages for computer science workers across the board.
Other sources dispute the conclusion that existing prevailing wage levels disadvantage U.S. workers.
Relatedly, some sources suggest that attracting foreign workers with specific, in-demand skills helps firms innovate and expand, driving growth and higher overall job creation, which in turn leads to more work opportunities for U.S. workers.
Furthermore, given the annual numerical cap on some H-1B workers, a level that is frequently exceeded by the number of petitions each year, raising the prevailing wage levels to more accurately reflect what U.S. workers with levels of education, experience, and responsibility comparable to H-1B workers are paid should lead to more highly skilled H-1B nonimmigrants entering the U.S. labor market, and thus enhance the benefits of the program for U.S. workers identified by some studies. This is because, if firms are required to pay H-1B workers wages that accurately reflect what their U.S. counterparts earn, the firms would be more likely to sponsor foreign workers whose value exceeds this increased compensation. Given that workers' compensation tends to reflect the value provided from skills demanded by a firm, higher compensation should lead to workers with more specialized knowledge and expertise receiving the limited number of H-1B visas. Because this change in H-1B worker composition would limit applications to those with the skills necessary to command higher compensation, it would likely increase innovation and economic growth.
Some also argue that the presence of H-1B workers, even those with wages lower than similarly employed U.S. workers, raises income for U.S. workers because in some fields there is an apparent shortage of U.S. Science, Technology, Engineering, and Math (STEM) workers.
While there are usually fewer U.S. graduates in STEM fields than there are open positions in the fields, this simple observation tends to ignore key characteristics of STEM workers, especially those in IT. As some researchers have noted, in recent years, for every two students who graduate from a U.S. university with a STEM degree, only one is hired into a STEM job.
As noted above, there are high concentrations of H-1B workers in many STEM-related fields. The high number of H-1B workers in fields for which U.S. workers study but in which they either choose not to work or cannot find jobs suggests that H-1B workers are not being used where no domestic workers can be found for the market rate, but rather are being used to fill jobs with workers paid below the market rate.
In short, contrary to the H-1B program's goals, prevailing wage levels that in many instances do not accurately reflect earning levels of comparable U.S. workers have permitted some firms to displace rather than supplement U.S. workers with H-1B workers. While allowing firms to access high-skilled workers to fill specialized positions can help U.S. workers' job opportunities in some instances, the benefits of this policy diminish significantly when the prevailing wage levels do not accurately reflect the wages of similarly employed workers in the U.S. labor market. The resulting distortions from a poor calculation of the prevailing wage allow some firms to replace qualified U.S. workers with lower-cost foreign workers, which is counter to the purpose of the INA's wage protections, and also lead to wage suppression for those U.S. workers who remain employed.
That the existing prevailing wage levels likely do not reflect actual market wage rates in many cases is further demonstrated by the fact that some firms already pay wages to their H-1B workers that are well above the applicable prevailing wage level. For example, Microsoft's General Counsel testified before the Senate Judiciary Committee in 2013 that at the company's headquarters, software development engineers had a starting salary that was typically more than 36 percent above the Level I wage, meaning they were being paid wages slightly above the Department's Level III wage at that time.
If the Department's current prevailing wage levels accurately reflected earnings for similarly employed U.S. workers, then these major differences between actual wages paid to some H-1B workers and the otherwise applicable prevailing wage levels would not be as common. As noted previously, the INA takes a belt-and-suspenders approach to protecting U.S. workers' wages. Employers must pay the higher of the actual wage they pay to similarly employed workers or the prevailing wage rate set by the Department. Both possible wage rates generally should approximate the going wage for workers with similar qualifications and performing the same types of job duties in a given labor market as H-1B workers. It is therefore a reasonable assumption that, if both of the INA's wage safeguards were working properly, the wage rates they produce would, at least in many cases, be similar. Where the Department's otherwise applicable wage rate is significantly below the rates actually being paid by employers in a given labor market, it gives rise to an inference that the Department's current wage rates, based on statistical data and assumptions about the skill levels of U.S. workers, are not reflective of the types of wages that workers similarly employed to H-1B workers can and likely do command in a given labor market. There is a mismatch between what the Department's prevailing wage structure says the relevant cohort of U.S. workers are or should be making and what employers are likely actually paying such workers, as demonstrated by the actual wage they are paying H-1B workers. Put another way, when many of the heaviest users of the H-1B program pay wages well above the prevailing wage, it suggests that the prevailing wages are too low, and thus can be abused by other firms to replace U.S. workers with lower-wage foreign workers in cases where those firms do not have similarly employed workers on their jobsites whose actual wages would be used to set the wage for H-1B workers.
In the PERM programs, recent Employment and Training Administration data shows that the heaviest users of the programs also typically pay wages well above the prevailing wage levels. Whereas the simple average of the top 20 employers' wage offers over the prevailing wage is 27.02 percent for H-1B, it is 16.77 percent for PERM. And while the simple average of cases with wages more than 20 percent above the prevailing wage is 25.67 percent for H-1B, it is 30.59 percent for PERM, as shown in Table 3.
Beyond the similarities between wages offered above the prevailing wage levels in the H-1B and PERM programs, the Department notes that the volume of research and literature on the wage effects of the PERM programs is scant compared to that on the wage effects of the H-1B program. That said, there are reasonable grounds to conclude that adverse wage effects similar to those found in the H-1B program are also caused in some instances by the employment of EB-2 and EB-3 immigrants.
Critically, the PERM programs and the H-1B program are closely linked in both how they are regulated and used by employers. Unlike most nonimmigrant visas, H-1B visas are unusual in that they are “dual intent” visas, meaning under the INA H-1B workers can enter the U.S. on a temporary status while also seeking to adjust status to that of lawful permanent residents.
Because of how many H-1B visa holders apply for EB-2 and EB-3 classifications, Congress has repeatedly adapted the INA to account for the close connection between the programs. For example, while H-1B nonimmigrants are generally required to depart the U.S. after a maximum of six years of temporary employment, Congress has created an exception that allows H-1B nonimmigrants who are beneficiaries of PERM labor certification applications with the Department, or who are beneficiaries of petitions for an employment-based immigrant visa with DHS that have been pending for longer than a year, be exempt from the 6-year period of authorized admission limitation if certain requirements are
The various features of the statutory framework governing the programs, working in combination, have further tightened the relationship between them. In particular, because H-1B workers can have dual intent and, if they have a pending petition for an employment-based green card, can remain in the U.S. beyond the 6-year period of authorized stay limitation, many workers for whom an employer has filed a PERM labor certification application are already working for that same employer on in H-1B status.
This system results in an immense demographic overlap between the H-1B and PERM programs. For instance, 71.7 percent of all H-1B petitions approved in FY2019 were for individuals born in India.
The upshot is that the H-1B and PERM programs are, in a variety of ways, inextricably conjoined. The rules governing them and how employers use them mean that, in many instances, workers in the PERM programs and workers in the H-1B program are often the exact same workers doing the same jobs in the same occupations for the same employers. And their wages are set based on the same methodology. It is therefore a reasonable inference that evidence that the Department's current wage levels under the four-tier structure result in inappropriately low wage rates in some instances for H-1B workers also holds true for the PERM programs.
Having determined that the existing wage levels are not set based on the wages paid to U.S. workers with the education, experience, and levels of supervision comparable to those of similarly employed foreign workers and are likely harming the wages and job opportunities of U.S. workers, the Department must assess how the wage levels should be adjusted. While the INA provides the relevant factors and general framework by which the wage levels are to be set, it leaves the precise manner in which this is accomplished, including the types of data and evidence to be used and how such data and evidence is weighed, to the Department's discretion and expert judgment. In exercising that discretion, the Department's decision on how to adjust the wage levels is informed by the statute's purpose of protecting the wages and job opportunities of U.S. workers. This means the Department has focused its analysis on those areas where the risk to U.S workers is most acute, taken into account how the foreign labor programs are actually used by employers, and, where appropriate, resolved doubts in favor of refining the wage calculations so as to eliminate to the greatest extent reasonably possible adverse effects on U.S. workers caused by the employment of foreign workers.
For the reasons explained above, the Department has determined BLS's OES survey remains the best source of wage data to determine prevailing wages in the H-1B, H-1B1, E-3, and PERM programs. However, because the OES survey does not capture the actual skills or responsibilities of the workers whose wages are being reported, it is appropriate for the Department to rely on data outside the OES survey to establish the wage levels applicable to these immigrant and nonimmigrant visa programs, which encompass varying populations working in hundreds of different occupational classifications. The Department has therefore undertaken a comprehensive analysis concerning the types of U.S. workers in the most common occupations in the programs that have comparable levels of education, experience, and responsibility to the foreign workers in these programs, and estimated how much those U.S. workers earn. To identify the proper comparators, the Department looked not only to the INA itself, which sets the minimum qualifications foreign workers in the H-1B, H-1B1, and E-3 programs must have to qualify for these visas, but, in order to draw a more accurate comparison, demographic data about the types of workers who actually work in the programs as well.
The Department has concluded, in its discretion, that the Level I wage should be established based on the wages paid to workers in those occupations that make up a substantial majority of the applications filed in the H-1B, H-1B1, E-3, and PERM programs. This ensures that the Department appropriately takes into account the size and breadth of the programs covered by the four-tier wage structure by giving special attention to those areas where the risk to U.S. workers' wages and job opportunities is most acute. To make this determination, the Department has identified what it considers to be an analytically appropriate proxy for approved entry-level workers for the specialty occupation and EB-2 programs; consulted various, authoritative sources to determine what similarly qualified workers in the U.S. who fit this profile are paid; and identified where within the OES wage distribution these U.S. workers' wages fall. That point in the distribution, which the Department has estimated to be at approximately the 45th percentile, serves as the appropriate entry-level wage for purposes of the Department's four-tier wage structure.
In order to reach this estimate, the Department first identified an analytically usable definition of the prototypical entry-level H-1B and EB-2 workers. More specifically, the Department identified the education and experience typically possessed by such workers, which, in turn, was used to identify the wages paid to U.S. workers with similar levels of
After consulting the statutory criteria for who qualifies for the relevant visa classifications, as well as the demographic characteristics of actual H-1B nonimmigrants, the Department has determined that an individual with a master's degree and little-to-no work experience is the appropriate comparator for entry-level workers in the Department's PERM and specialty occupation programs for purposes of estimating the percentile at which such workers' wages fall within the OES wage distribution.
To begin with, the statutory criteria for who can qualify as an EB-2 worker provides a clear, analytically useable definition of the minimum qualifications workers within that classification must possess. Even the least experienced individuals within the EB-2 classification are likely to have at least a master's degree or its equivalent.
As noted above, the baseline qualifications needed to obtain entry as an H-1B worker are different. An individual with a bachelor's degree in a specific specialty, or its equivalent, may qualify for an H-1B visa; a master's degree is not a prerequisite.
As with aliens in the EB-2 classification, looking to the earnings of individuals with a master's degree provides an appropriate and analytically useable proxy for purposes of analyzing the wages of typical, entry-level workers within the H-1B program. For one thing, master's degree programs are, generally speaking, more specialized courses of study than bachelor's degree programs. Thus, while the fact that an individual possesses a bachelor's degree does not necessarily suggest one way or another whether the individual possesses the kind of specialized knowledge required of H-1B workers, the possession of a master's degree is significantly more likely to indicate some form of specialization. Although a master's degree alone does not automatically mean an individual will qualify for an H-1B visa, possession of a master's degree—something that is surveyed for in a variety of wage surveys—is thus a better proxy for specialized knowledge than is possession of a bachelor's degree for purposes of the Department's analysis. This is because, while possession of a bachelor's degree is also commonly surveyed for, mere possession of a bachelor's degree is not nearly as reliable an indicator that the degree holder possesses specialized knowledge.
Further, the demographic characteristics of H-1B workers suggests that many entry-level workers in the program are master's degree holders with limited work experience. A review of data from USCIS about the characteristics of individuals granted H-1B visas in fiscal years 2017, 2018, and 2019 indicates that H-1B workers with master's degrees tend to be younger and less highly compensated than H-1B workers with bachelor's degrees. On average, individuals with master's degrees in the program are approximately 30 years old, whereas bachelor's degree holders are, on average, 32 years old. This suggests that, while possessing a more advanced degree, master's degree holders in the program are likely to have less relevant work experience than their bachelor's degree counterparts.
This conclusion is further bolstered by the fact that master's degree holders have, in recent years, been the largest educational cohort within the program. In FY2019, for instance, 54 percent of the beneficiaries of approved H-1B petitions had a master's degree—whereas only 36 percent of beneficiaries had only a bachelor's degree.
The Department notes that its description of individuals with master's degrees and little-to-no work experience as appropriate comparators for entry-level workers in the Department's foreign labor programs for purposes of setting the proper Level I wage is not inconsistent with how the Department makes prevailing wage determinations under its 2009 Guidance. Many job opportunities that result in a Level I wage determination of course do not require a master's degree as the minimum qualification for the position. The Department is not changing that aspect of its guidance. Rather, the Department has decided, for the reasons given above, to rely on master's degree holders as an analytically useable proxy for the types of workers who actually fill many entry-level positions in the H-1B and PERM programs and who likely satisfy the key, baseline statutory qualification requirements for entry into the programs—namely the possession of specialized knowledge or an advanced degree—in order to identify where the first of four levels should fall along the OES wage distribution. This reflects how employers actually fill jobs for which workers are sought, not necessarily how job descriptions are used to assign wage levels for each individual job opportunity to provide a prevailing wage determination at the
Further, practice in the H-1B program shows that a significant number of H-1B workers are placed at the first wage level, which demonstrates that the Department's focus on specialty occupation requirements in setting an entry-level wage is also consistent with how workers are presently classified for prevailing wage purposes under the 2009 Guidance. In FY2019, 14.4 percent of all worker positions on LCAs were for entry-level positions. This cohort includes LCAs filed for some of the most common H-1B occupations, including Software Developers, 19.4 percent of which were placed at the first wage level; Computers Systems Analysts, 4.8 percent of which were placed at the first wage level; and Computer Occupations, 7 percent of which were placed at the first wage level. As discussed previously, these occupations, as described in the OOH, likely include some workers at the lower end of the OES distribution who are not performing work that would fall within the INA's definition of “specialty occupation.” Thus, many workers in the H-1B program that have master's degrees or some other qualification that satisfies the INA's baseline, specialized knowledge requirement—a level of expertise that makes them more highly skilled than a portion of workers at the bottom end of the OES distribution for many occupations—also work in positions that fit within the entry-level classification as currently administered by the Department under its 2009 Guidance.
To determine the wages typically made by individuals having comparable levels of education, experience, and responsibility to the prototypical entry-level H-1B and EB-2 workers and working in the most common H-1B and PERM occupations, the Department consulted a variety of data sources, most importantly wage data on individuals with master's degrees or higher and limited years of work experience from the 2016, 2017, and 2018 Current Population Surveys (CPS)
In the case of the CPS survey, the Department used a wage prediction model to identify the wages an individual with a master's degree or higher and little-to-no work experience (based on age) would be expected to make and matched the predicted wage with the corresponding point on the OES wage distribution. Using the NSF surveys, the Department calculated the average wage of individuals who recently graduated from STEM master's degree programs and matched the average wage against the corresponding point on the OES distribution.
These analyses located three points within the OES wage distribution at which the wages of U.S. workers with similar levels of education and experience to the prototypical entry-level workers in specialty occupations and the EB-2 program are likely to fall. In particular, the 2015 NSF survey data indicate that workers in some of the most common H-1B and PERM occupations with a master's degree and little-to-no relevant work experience are likely to make wages at or near the 49th percentile of the OES distribution.
The Department thus identified a range within the OES data wherein fall the wages of workers who, while being relatively junior within their occupations, clearly possess the kinds of specialized education and/or experience that the vast majority of foreign workers covered by the Department's wage structure are, at a minimum, required to have.
Translating the identified range into an entry-level wage for the Department's use in the H-1B and PERM programs could be accomplished in a number of ways. One option would be to simply calculate the average wage of all workers that fall within the range, meaning those workers whose reported wage falls between the 32nd and 49th percentiles, which would place the entry-level wage at just above the 40th percentile. An alternative would be to identify a subset of wages within the range—either on the lower end or the higher end of the range—and calculate the average wage paid to workers within such subset. Because of the greater suitability of the NSF data for the Department's purposes, likely distortions in the wage data of both surveys caused by the presence of lower-paid foreign workers in the relevant labor markets, and the purposes of the INA's wage protections, the Department has decided that the most appropriate course is to set the entry-level wage by calculating the average of a subset of the data located at the higher end of the identified wage range. This
As between the two data sources and the manner in which they were analyzed, the NSF data are better tailored to the Department's purposes in identifying an entry-level wage for the H-1B program. The NSF surveys provide data on the wages of individuals with degrees directly relevant to the specialized occupations in which they are working, namely degrees in STEM fields. By contrast, the CPS data only show whether a person does or does not have a master's degree, and does not identify what field the master's degree or the individual's undergraduate course of study was in. It is therefore likely that some of the wage data relied on in generating the CPS estimate were based on the earnings of individuals who possess degrees not directly related to the occupation in which they work. Given that the CPS data used only accounted for persons with little-to-no experience, such individuals would therefore be unlikely to have the qualifications needed to work in a “specialty occupation,” as that term is defined in the INA. Having neither a specialized degree nor experience, and therefore lacking in specialized skills or expertise, at least with respect to the occupations in which they work, such individuals would not qualify as similarly employed to even the least skilled H-1B workers and are thus not appropriate comparators for identifying an entry-level wage in the H-1B program. Because of these workers' relative lack of skill and expertise, they are likely to command lower wages, and thus decrease the predicted wage below what would be an appropriate entry-level wage for the Department's foreign labor programs.
Relatedly, the Department's method for approximating experience in the CPS data is also not as closely tailored to the goal of determining what U.S. workers similarly employed to the prototypical entry-level H-1B and EB-2 workers are paid as is the NSF data. The CPS analysis relied on potential experience as a proxy for actual experience, which was calculated using a standard formula of subtracting from individuals' ages their years of education and six, based on the common assumption that most individuals start their education at the age of six.
For one thing, the approximation does not take into account the possibility of a worker temporarily exiting the workforce, and would count the time spent outside the workforce as work experience. It also does not account for gaps between when a person received his or her bachelor's degree and when he or she enrolled in a master's degree program. In such cases, the work experience captured by the proxy of potential experience may thus not be directly relevant to the work a person performs after he or she graduates from a master's degree program since in some cases the work experience in question was likely acquired before the individual enrolled in a master's degree program. In consequence, the sample used in the CPS analysis almost certainly includes some individuals who have no relevant experience in the specialized occupations in which they are working, which likely decreases the wage estimate calculated using the CPS data and makes it a less precise and reliable estimation of the wages of U.S. workers with similar levels of education and experience to the prototypical, entry-level H-1B and EB-2 workers. In other words, the CPS data allows for only a rough approximation of experience—a key factor the Department must take into account in adjusting the prevailing wage levels. This, in combination with the fact that some workers contained within the CPS dataset likely also lack specialized education relevant to the occupations in which they work, means that CPS data is, in some degree, distorted by wage earners who should be discounted in identifying the appropriate entry-level wage because they likely possess neither the type of specialized experience nor the education in their field that is comparable to that possessed by entry-level H-1B and EB-2 workers.
The NSF survey data, by contrast, are uniquely suited to the Department's purposes. The NSF surveys in 2015 and 2017 capture wage data about exactly the sort of workers the Department has determined serve as the appropriate comparators for entry-level H-1B and EB-2 workers. They surveyed individuals with master's degrees in STEM fields who are working in STEM occupations, including some of the most common H-1B and PERM occupations, and who are approximately three years or less out of their master's degree programs. In other words, the NSF surveys report wage data for individuals with specialized knowledge and expertise working in the occupations in which H-1B and PERM workers are most often employed and who are relatively junior within their respective occupations. The NSF data therefore provide a more accurate wage profile of workers similarly employed to entry-level H-1B and EB-2 workers. While both data sources are useful in helping determine a wage range for entry-level H-1B and PERM workers, of the two, the NSF surveys provide information more relevant to the Department's assessment of what is the appropriate entry-level wage. Therefore, the Department's analysis relies more on the NSF surveys. This suggests that the entry-level wage should be placed higher up in the identified wage range given that is where the NSF survey results fall.
Beyond the relative weight of each data source, the Department also takes into account in identifying the appropriate entry-level wage the fact that both sources are likely distorted to some degree by the presence, in both the surveyed population and the labor market as a whole, of the very foreign workers the Department has determined are, in some instances, paid wages below the market rate. As noted above, various studies and data demonstrate that some H-1B workers are paid wages substantially below the wages paid to their U.S. counterparts, and that this has a suppressive effect on the wages of U.S. workers. Further, these adverse effects are most likely to occur and be severe in occupations with higher concentrations of foreign workers. It is therefore relevant to how the Department weighs the data that many of the occupations examined in the analyses of the NSF and CPS datasets have very high concentrations of H-1B workers. As noted previously, H-1B nonimmigrants make up about 10 percent of the total IT labor force in the U.S.
From this, the Department draws two conclusions. First, the respondents reporting wages in the CPS and NSF surveys are likely in some cases H-1B or PERM workers, given that both surveys contain responses from both U.S. citizens and noncitizens and the surveyed occupations have high concentrations of such foreign workers. The reported wages are thus in some instances likely not the market wage paid to U.S. workers similarly employed to H-1B and PERM workers, but rather the wages of the foreign workers themselves, which, as discussed previously, will be likely lower than the wages of U.S. workers in some cases. Second, even the reported wages of respondents who are not H-1B and PERM workers are likely not perfectly accurate reflections of what the market rate would be absent wage suppression given that high concentrations of lower-paid foreign workers likely decrease the overall average wage paid in the relevant labor market, as detailed above.
The need to account for these distortions weighs in favor of the Department's decision to set the entry-level wage at the higher end of the identified wage range. To do otherwise would mean that, far from ensuring that the adjusted wage levels guard against adverse effects on U.S. workers caused by the presence and availability of lower-cost foreign labor, the Department would, to some degree, be basing its regulations on a preexisting distortion caused by the current, flawed wage rates.
Finally, the purpose of the relevant INA authorities, particularly the prevailing wage requirement, also weighs in favor of adjusting the entry-level wage higher up within the identified wage range. As emphasized throughout, the guiding purpose of the INA's prevailing wage requirements is to “protect U.S. workers' wages and eliminate any economic incentive or advantage in hiring temporary foreign workers.”
The Department therefore concludes that, within the portion of the OES wage distribution identified as likely consisting of U.S. workers with levels of education and experience similar to prototypical entry-level H-1B and EB-2 workers, the first wage level should be placed at the higher end. Each of the considerations described above—the relative strength of the NSF surveys as compared to the CPS data in serving the purpose of the Department's analysis; the likely distortion of both survey datasets caused by the presence of lower-paid foreign workers in the relevant labor markets; and the purposes of the INA's wage protections—alone would strongly countenance in favor of using the higher end of the identified wage range. In combination, they make the option of focusing on the upper portion of the range particularly compelling.
The wage range spans from the 32nd percentile to the 49th percentile. What accounts for the upper half of this range is approximately the fifth decile of the OES distribution. The arithmetic mean of the wages of workers similarly employed to entry-level H-1B and EB-2 workers, taking into account the experience and education of the types of workers who actually fill entry-level positions in these programs, is thus the mean of the fifth decile, or approximately the 45th percentile. This point within the distribution will govern the wages of workers placed at the first wage level and allows for a statistically meaningful calculation.
Having concluded that the entry-level wage should be adjusted to the 45th percentile, the Department turns to explaining the manner in which the remaining three prevailing wage levels will be modified. The Department has determined that the upper-most level will be adjusted to the mean of the upper decile of the OES wage distribution, or approximately the 95th percentile, to reflect the wages of the most competent, experienced, and skilled workers in any given occupation. The intermediate wage levels will continue to be calculated in accordance with 8 U.S.C. 1182(p)(4), which yields second and third wage levels at the 62nd and 78th percentiles, respectively.
The highest wage level should be commensurate with the wages paid to the most highly compensated workers in any given occupation because such workers are also generally the workers with the most advanced skills and competence in the occupation, and therefore the type of workers who are similarly employed to the most highly qualified H-1B and PERM workers.
H-1B workers can be, and at least in some cases already are among the most highly paid, and therefore likely among the most highly skilled workers within their respective occupations.
Further demonstrating that H-1B workers can be and sometimes are among the most skilled and competent workers in their occupations, an examination of the top end of the wage distribution within the H-1B program shows that, for H-1B nonimmigrants with graduate and bachelor's degrees, the association between education and income level begins to break down to some extent. Among the most highly compensated H-1B workers, the higher the income level, the more likely the foreign worker beneficiary only has a bachelor's degree.
The high levels of pay that the most skilled H-1B workers can command is also shown by the fact that, due to their advanced skills, diversified knowledge, and competence, workers placed at the fourth wage level are likely to be far more productive than their less experienced and educated peers. Whereas experience itself generally increases on a linear basis, as a function of age and time spent in an occupation, productivity and an individual's supervisory responsibilities, as a function of experience and skills, do not. For example, the nature of senior management or supervisory roles, in particular, means workers who serve as productivity multipliers are more likely to fill such positions, which in turn translates to higher wages. Perhaps even more relevant to the Department's assessment of the wages paid to H-1B workers is the nature of the work these individuals do, which is highly specialized and typically in computer or engineering-related fields. In such occupations, experience and abilities can result in exponentially divergent levels of productivity, which in turn means that workers with the most advanced skills and competence can command wages far above what other workers in those occupations do.
All of these considerations strongly indicate that U.S. workers similarly employed to the H-1B and PERM workers with the most advanced skills and competence are themselves among the most highly skilled workers in any given occupation, and therefore the most highly compensated. The uppermost wage level should, in accordance with the INA, therefore be calculated by taking the arithmetic mean of the wages paid to the most highly paid workers in the OES distribution. In consequence, the Department has determined that the fourth wage level should be calculated as the mean of the upper decile of the OES distribution, or approximately the 95th percentile. This calculation ensures that the fourth wage level is based on the wages paid to workers with the most advanced skills and competence in an occupation, while using a sample of workers to identify an average wage sufficiently large to allow for a statistically meaningful calculation.
The Department will continue to calculate the two intermediate wage levels in accordance with 8 U.S.C. 1182(p)(4), which provides that, in establishing a four-tier wage structure, “[w]here an existing government survey has only 2 levels, 2 intermediate levels may be created by dividing by 3, the difference between the 2 levels offered, adding the quotient thus obtained to the first level and subtracting that quotient from the second level.”
The statutory formula was designed by Congress specifically for use in the Department's high-skilled immigrant and nonimmigrant programs, and provides for an efficient way of calculating evenly-spaced, intermediate wage rates between the lower bound and upper bound of the Department's wage structure.
The Department applies the statutory formula as follows: The difference between the two levels provided by the OES survey data is 50 percentiles. Dividing this by three yields a quotient of 16.67. This quotient, added to the value of the Level I wage at the 45th percentile, yields a Level II wage at approximately the 62nd percentile. When subtracted from the value of the Level IV wage at the 95th percentile, the quotient yields a Level III wage at approximately the 78th percentile of the OES distribution.
The Department acknowledges that the existing wage levels—set at approximately the 17th, 34th, 50th, and 67th percentiles—have been in place for over 20 years, and that many employers likely have longstanding practices of paying their foreign workers at the rates produced by the current levels.
As noted previously, the Department's four-tier wage structure is used to set the prevailing wage in five different immigrant and nonimmigrant programs. Having explained the Department's reasoning for how the adjusted wage levels are appropriate for the programs that consist of more highly skilled workers with advanced degrees and/or specialized knowledge—namely the EB-2 immigrant classification and the H-1B, E-3, and H-1B1 nonimmigrant programs—the Department now turns to explaining the appropriateness of using those same wage levels for the EB-3 classification, which consists of lower-skilled workers, professionals with bachelor's degrees, and individuals capable of performing unskilled labor. The Department concludes that the adjusted wage levels under the four-tiered structure also satisfy the statutory requirement that the wage levels be set based on experience, education, and level of supervision with respect to the EB-3 classification, taking into account the statutory and regulatory purposes of protecting U.S. workers from displacement and adverse wage effects.
At the outset, the Department notes that the close connections between the EB-3 classification and the other programs covered by the Department's wage structure make it inadvisable and impractical to treat the EB-3 classification differently. As detailed above, many H-1B workers adjust status to that of lawful permanent residents through EB-3 classification, and the manner in which the programs operate means that, in many cases, foreign workers can, in some sense, have one foot in each program simultaneously for extended periods of time. Using different wage methodologies in the programs would therefore result in the incongruous possibility of a worker doing the same job for the same employer suddenly receiving a different wage upon adjusting status. Similarly, while having somewhat different eligibility criteria, the EB-2 and EB-3 classifications are not mutually exclusive—many workers that satisfy the eligibility criteria for one would also do so for the other.
The Department acknowledges that applying the four-tier wage structure in five different immigrant and nonimmigrant programs with varying populations, and across hundreds of different occupational classifications presents inherent challenges. The breadth of occupations to which the wage levels apply means that the prevailing wages established by the wage structure will not be perfectly tailored to the circumstances of each individual job opportunity.
Thus, as previously explained, in ascertaining the wages paid to U.S. workers similarly employed to H-1B workers, the Department's analysis focused, to the greatest extent possible, on those occupations that account for 1 percent or more of the total H-1B population, and which also account for a significant share of the PERM population.
After assessing the nature of the EB-3 immigrant population, the Department has determined that the adjusted wage levels under the four-tiered structure adequately take into account the experience, education, and level of supervision of EB-3 workers, in light of the purpose of the INA's wage safeguards. The EB-3 program consists of three discrete classifications: “skilled workers,” defined as aliens who are “capable . . . of performing skilled labor (requiring at least two years training or experience), not of a temporary or seasonal nature, for which qualified workers are not available in the United States;” “professionals,” defined as aliens “who hold baccalaureate degrees and who are members of the professions;” and “other workers,” defined as aliens who are “capable . . . of performing unskilled labor, not of a temporary or seasonal nature, for which qualified workers are not available in the United States.”
As to the lower-skill classifications, the Department has previously recognized that lower-skilled workers are less likely to vary in the wages they are paid based on differences in skill levels.
That reasoning holds true for the lower-skilled classifications in the EB-3 immigrant visa preference category, which include workers whose jobs are unskilled or require two years of training. These workers are far more likely to fall within the lower two wage levels given their relative lack of education and experience. Under the new wage levels, they will thus likely be placed at either the 45th or the 62nd percentiles of the OES wage distributions. Both levels, while not perfectly tailored to the lower-skilled component of the EB-3 classification, fall near the middle part of the wage distribution, and are therefore generally appropriate for lower-skilled workers.
For separate reasons, the Department concludes that the newly adjusted wage levels also adequately satisfy the Department's obligations in setting the wage levels under the INA with respect to EB-3 professionals. Unlike lower-skilled EB-3 workers, professionals with bachelor's degrees in the EB-3 classification do possess a level of skill that allows for greater differentiation within the occupation. It is also the case that such workers will likely generally have lower levels of education and experience than EB-2 workers, who are required to possess a master's degree or higher. An entry-level wage at the 45th percentile, while more closely tailored to the education and experience of an EB-2 or H-1B worker, may be on the higher end for an EB-3 professional in some cases.
The Department emphasizes that the labor certification process in the PERM programs is designed to ensure that there are not available and willing U.S. workers and that the wages and the wages and working conditions of U.S. workers will not be adversely affected by the employment of the immigrant worker(s). From when the INA was first enacted, its labor certification provisions were designed “to provide strong safeguards for American labor and to provide American labor protection against an influx of aliens entering the United States for the purpose of performing skilled or unskilled labor where the economy of individual localities is not capable of absorbing them at the time they desire to enter this country.”
Within the U.S. workforce, the credentials associated with the EB-3 professional classification are significantly more common than the credentials associated with the EB-2 classification. As of 2019, 36 percent of people age 25 and older in the United States possessed a bachelor's degree or higher.
As noted above, the Department is required to determine and certify that “there are not sufficient workers who are able, willing, qualified” and available to fill the position for which an EB-3 worker is sought.
Finally, the Department notes that continuing to employ the same wage structure in this manner across both the H-1B and PERM programs advances the Department's interest in administrative consistency and efficiency. As noted already, there is significant overlap between the H-1B and PERM programs. In FY2019, 68.2 percent of all PERM applications were for aliens that at the time the applications were filed were already working in the U.S. on H-1B visas.
For these reasons, the Department has concluded that using the adjusted wage levels for the EB-3 preference category is in keeping with the relevant statutory considerations that govern how the Department sets prevailing wage levels.
In light of the foregoing, the Department is amending its regulations at part 20, sections 656.40 and 655.731 to reflect the new wage level computations the Department will use to determine prevailing wages in the H-1B, H-1B1, E-3, EB-2, and EB-3 classifications. These amendments are in accordance with the President's Executive Order (E.O.) 13788, “Buy American and Hire American,” which instructed the Department to “propose new rules and issue new guidance, to supersede or revise previous rules and guidance if appropriate, to protect the interests of United States workers in the administration of our immigration system.”
Although the amendments discussed below will extend beyond the duration of the Proclamation, the threats described in the Proclamation highlight the urgent need for strengthening wage protections in these programs to support the economic recovery. A core part of the Department's mission is to promote opportunities for profitable employment and ensure fair wages and working conditions for U.S. workers. This responsibility includes ensuring that U.S. workers similarly employed to foreign workers are not adversely affected by the employment of foreign workers on a permanent or temporary basis in the U.S., as required by the INA.
This rule will only apply to applications for prevailing wage determination pending with the NPWC as of the effective date of the regulation; applications for prevailing wage determinations filed with the NPWC on or after the effective date of the regulation; and LCAs filed with the Department on or after the effective date of the regulation where the OES survey data is the prevailing wage source, and where the employer did not obtain the PWD from the NPWC prior to the effective date of the regulation. The Department will not apply the new regulations to any previously-approved prevailing wage determinations, permanent labor certification applications, or LCAs, either through reopening or through issuing supplemental prevailing wage determinations or through notices of suspension, invalidation, or revocation.
The Department is revising paragraphs (a), (b)(2), and (3) of 20 CFR 656.40. The most substantial changes are those made to paragraphs (b)(2). First, the Department has amended § 656.40(b)(2) by adding new paragraphs (b)(2)(i) and (ii) to codify the practice of using four wage levels and to specify the manner in which the wage levels are calculated. Specifically, new paragraph (b)(2)(i) stipulates that “The BLS shall provide the OFLC Administrator with the OES wage data by occupational classification and geographic area,” and goes on to specify the four new levels (Levels I through IV) to be applied.
New paragraph (b)(2)(i)(A) describes the Level I Wage. This first wage level—currently calculated as the mean of the bottom third of the OES wage
Next, new paragraph (b)(2)(i)(D) provides that the Level IV Wage—currently calculated as the mean of the upper two thirds of the OES wage distribution—will now be calculated as the mean of the upper decile of the distribution for the most specific occupation and geographic area available. This means the fourth wage level will increase approximately from the 67th percentile to the 95th percentile of the relevant OES wage distribution.
For the two intermediate levels, II and III, the Department will continue to rely on the mathematical formula Congress provided in the INA.
The newly created paragraph (b)(2)(ii) states that the OFLC Administrator will publish, at least once in each calendar year, on a date to be determined by the OFLC Administrator, the prevailing wage rates produced under the new paragraph (b)(2)(i) of section 656.40 as a notice posted on the OFLC website. This continues the Department's practice of having the OFLC Administrator to announce, via a notice of implementation, updates to OES wage data. Currently, OFLC publishes a routine announcement each year implementing updated OES prevailing wages for the new wage year and discussing any other significant related updates, including changes to OES survey areas and relevant updates to the SOC system. These announcements also serve as notice to employers of changes they need to make to the wage information on applications to reflect the changes to the OES. This IFR codifies the current publication practice in the regulations at section 656.40(b)(2)(ii).
The new regulation aligns with OFLC's current practice for notifying employers directly, rather than through the
Further revisions to paragraph (b)(2) provide greater precision in the language used by changing the term “DOL” to “BLS” when describing which entity administers the OES survey and eliminate redundancy by deleting the language “except as provided in (b)(3) of this section.” Because the Department is now specifying within the regulation exactly how the prevailing wage levels are calculated, the revised text also removes the existing reference to how the levels are calculated—namely the reference to the “arithmetic mean”—and will instead provide that the job opportunity is not covered by a CBA, the prevailing wage for labor certification purposes shall be based on the wages of workers similarly employed using the wage component of the OES survey, in accordance with paragraph (b)(2)(i), unless the employer provides an acceptable survey under paragraphs (b)(3) and (g) of this section or elects to utilize a wage permitted under paragraph (b)(4).
Revisions to paragraph (a) remove an out-of-date reference, explained further below, to SWAs' role in the prevailing wage determination process. The changes to paragraph (b)(3) account for the elimination of the reference to the “arithmetic mean” in (b)(2).
The Department amends section 655.731 by making technical revisions to paragraph (a)(2)(ii)(A) to remove another out-of-date reference to SWAs' role in the prevailing wage determination process. Non-agricultural PWD requests are no longer processed by SWAs; since 2010 they have solely been processed by the Department at a National Processing Center (NPC). PWD requests are primarily adjudicated by the NPWC, located in Washington, DC, but through interoperability, they may be processed by any regional NPC. The regulatory text is amended to reflect the current practice and to provide for operational flexibilities in the future with respect to where PWD requests are processed.
The Department also revises the language in section 655.731 to more clearly explain that it will use BLS's OES survey to determine the prevailing wages under this paragraph and has added a sentence to specify that these determinations will be made in a manner consistent with the amended section 656.40(b)(2).
The revised language in paragraphs (a)(2)(ii) introductory text, (a)(2)(ii)(A) introductory text, and (a)(2)(ii)(A)(
The new language also removes the reference to “arithmetic mean” in paragraph (a)(2)(ii) and now states “. . . the prevailing wage shall be based on the wages of workers similarly employed as determined by the OES survey in accordance with 20 CFR 656.40(b)(2)(i) . . .” The revised language also corrects an error referencing “H-2B nonimmigrant(s)” by changing the reference to “H-1B nonimmigrant(s)” in paragraph (a)(2)(ii)(A)(
The Administrative Procedure Act (APA) authorizes an agency to issue a rule without prior notice and opportunity to comment when the agency for good cause finds that those procedures are “impracticable, unnecessary, or contrary to the public interest.”
Here, two different circumstances are present that satisfy the APA's good cause criteria. First, the shock to the labor market caused by the widespread unemployment resulting from the coronavirus public health emergency has created exigent circumstances that threaten immediate harm to the wages and job prospects of U.S. workers. The INA's wage protections are meant to ensure that the employment of foreign workers does not have an adverse impact on similarly employed U.S. workers. But the flaws in the existing wage levels—which were promulgated through guidance and without meaningful economic justification, are inconsistent with the statute, and serve as the source of adverse labor effects on U.S. workers even under normal economic conditions—can only exacerbate, and severely so, the dangers posed to U.S. workers by recent mass lay-offs unless immediate action is taken. Keeping in place the current levels is untenable, and any delay in issuing this rule is contrary to the public interest. Notice and comment procedures in these circumstances would make it impracticable for the Department to fulfill its statutory mandate and carry out the “due and required execution of [its] agency functions” to protect U.S. workers.
Separately, even absent the emergency labor market conditions caused by the coronavirus pandemic, providing the public an opportunity to comment before the adjustments to the wage levels take effect is contrary to the public interest insofar as it would impede the Department's ability to solve the problems this interim final rule is meant to address. Advance notice of the intended changes would create an opportunity, and the incentives to use it, for employers to attempt to evade the adjusted wage requirements. This constitutes a situation where the public's interest is “defeated by any requirement of advance notice” and also justifies the Department's decision to forgo notice and comment before issuing the rule.
To begin, an agency may invoke the good cause exception where the serious harm to be prevented is fiscal or economic in nature, particularly in cases where the agency is acting to prevent fiscal harm to third parties.
On January 31, 2020, the Secretary of the Department of Health and Human Services declared a public health emergency under section 319 of the Public Health Service Act (42 U.S.C. 247d) in response to the Coronavirus Disease 2019 (COVID-19) outbreak.
On April 22, 2020, the President issued Proclamation 10014,
On June 22, 2020, the President issued a
The Proclamation only suspends and limits new entries into the United States by aliens who did not have valid visas and required travel documents on the effective date of the Proclamation. It does not address potential harms to U.S. workers caused by the employment of foreign workers already in the country. Section 5(b) of the Proclamation, however, directs the Department of Labor as soon as practicable consider promulgating regulations or take other appropriate action to ensure that the presence in the United States of aliens who have been admitted or otherwise provided a benefit, or who are seeking admission or a benefit, pursuant to an EB-2 or EB-3 immigrant visa or an H-1B nonimmigrant visa does not disadvantage United States workers in violation of section 212(a)(5)(A) or (n)(1) of the INA (8 U.S.C. 1182(a)(5)(A) or (n)(1)).
Accordingly, the issuance of this interim final rule, designed to ensure that U.S workers are not disadvantaged by the employment of aliens already present in the United States as the nation continues its economic recovery, is consistent with the aims of the Proclamation, and mitigates aspects of the danger to U.S. workers caused by recent shocks to the labor market and the employment of foreign workers not fully addressed by the Proclamation.
Notwithstanding the ongoing COVID-19 emergency, hiring in the U.S. has increased, with continued hiring across all sectors of the economy anticipated. Despite these gains, unemployment remains significantly above the historically low levels seen prior to the emergence of COVID-19 and the resultant economic emergency. As states continue to reopen their economies and the pace of hiring accelerates, U.S. workers will still face risks to their wages and job opportunities. It is therefore imperative that the Department take immediate action to ensure that U.S. workers' current and future wages and job prospects are protected.
As noted above, a substantial body of evidence shows that the Department's current prevailing wage rates, which govern, in many cases, the wages that employers offer when recruiting for U.S. workers and pay when employing foreign workers, have long been set below the rates at which similarly employed U.S. workers are paid, and that these rates are inconsistent with the statutory scheme. Even during normal economic circumstances this is likely to result in adverse effects on the wages and job opportunities of U.S. workers. Under the high unemployment rates experienced in the U.S. labor market this year, which reached 14.7 percent in April, a rate not seen since the Great Depression, and remain elevated, the existing flawed and arbitrary wage levels pose an immediate threat to the livelihoods of U.S. workers.
More particularly, if, as the economy recovers, the existing wage levels remain in place, at least two negative consequences for U.S. workers are likely to occur. First, employers seeking to employ EB-2 and EB-3 workers, as well as, in some cases, H-1B nonimmigrants, are required to use prevailing wage rates to recruit U.S. workers before they are permitted to employ foreign workers. The provision of improperly low prevailing wage determinations under the existing wage level computations therefore means that U.S. workers reentering the workforce will not, in some cases, be offered wages commensurate with their education and experience. In such cases where an employer's job advertisement includes a wage rate for a position that does not accurately reflect the wage rate that should be paid, U.S. workers may be less likely to apply for the position.
Relatedly, the current wage level computations may adversely affect the wages and job opportunities of U.S. workers by allowing employers to pay wages to foreign workers at a rate below the market rate for similarly employed U.S. workers. This can result in either employers preferring to hire foreign workers over U.S. workers, or result in wage suppression for U.S. workers. These problems, in turn, can also impede U.S. workers' return to the workforce at income levels comparable to what they were making before the downturn.
Both delays in workers returning to the workforce and their doing so at wages below what they were making before being laid off can have severe immediate and long term adverse effects on workers' wellbeing. Extensive academic research shows that mass lay-offs that occur during times of elevated unemployment have dramatic and persistent consequences for individuals' earnings for years following the lay-off event.
Further, now is a critical moment for mitigating against the threat of these wage scarring effects. Without interventions to help U.S. workers, as many as 8 million individuals laid off earlier this year may reach 27 weeks or more of unemployment starting in October 2020. Unemployment of this duration, known as long term unemployment, is the point at which the risk of wage scarring and other adverse employment effects of unemployment becomes especially acute.
The reforms to the prevailing wage levels that the Department is undertaking in this rulemaking—changes that the Department acknowledges should have been undertaken years ago—have therefore become urgently needed. U.S. workers, in the millions, have already experienced one of the most significant, mass lay-off events in U.S. history.
It is of course true that, even with appropriately set wage levels, some degree of wage scarring would occur for U.S. workers in any mass lay-off event. The regulatory changes produced by this rule will not alleviate all the adverse effects associated with the current downturn, and some level of wage scarring is likely to be associated with any recessionary period. The recent shocks to the labor market, however, bring the Department's invocation of good cause well within the admittedly narrow bounds of section 553(b)(B).
It is also clear that the change worked by this rule going immediately into effect directly and substantially addresses the harm the Department has determined poses an ongoing and grave danger to U.S. workers. As noted above, the Proclamation temporarily suspends entry of new H-1B and PERM workers, but does not affect those workers currently in the United States pursuant to an earlier admission into the U.S. Yet the presence of such workers in the labor market is substantial and should not be overlooked. For example, in recent years, over 80 percent of all foreign workers granted EB-2 and EB-3 status in a given year are adjustment of status cases, meaning they were already present in the U.S. before being granted an employment-based green card. In other words, one of the biggest risks U.S. workers face from having to compete with EB-2 and EB-3 immigrants recruited and paid at inappropriately low wage levels comes from workers who are already present in the U.S. The adjustments the Department is making to the prevailing wage levels will therefore have an immediate and substantial impact as U.S. employers recruit for and employ EB-2 and EB-3 workers even with the Proclamation in place and help mitigate the short and long term adverse wage effects caused by the existing wage levels as the economy recovers.
Similarly, in FY2019, 249,476 of H-1B petitions for continuing employment,
Simply put, millions of U.S. workers, many of whom work in industries that employ large numbers of H-1B and employment-based immigrants, lost their jobs over the past six months. This
Beyond the immediate and long term harm to U.S. workers' wages and job opportunities that would result from delay in changes to the wage levels, the Department is also justified in bypassing notice and comment to prevent the evasion by employers of the new wage requirements that would likely result from announcing a change to the levels in advance of the change taking effect. Forgoing notice and comment is permitted under circumstances where advance notice of a rule and its delayed effectiveness would result in significant, changed behavior by private parties to evade the rule, or that would otherwise result in harmful market distortions.
The same holds true for the Department's adjustments to the prevailing wage levels. Under the INA, the Department is required to approve an LCA within seven days of when the application is filed.
The limited discretion the Department has with respect to how quickly it reviews LCAs, in combination with the leeway employers have on when they file, as well as historical filing patterns, show that advance notice of the wage level changes effected by this rule could result in the kind of “massive rush” to evade price changes—in this case changes to the price employers must pay for foreign labor—that have repeatedly been found to justify bypassing notice and comment.
For the foregoing reasons, each of which is independently sufficient to justify bypassing notice and comment, the regulatory change made by this interim final rule is urgently needed. Although the Department acknowledges that the good cause exception is “narrowly construed and only reluctantly countenanced,” the Department has appropriately invoked the exception in this case.
The APA also authorizes agencies to make a rule effective immediately, upon a showing of good cause, instead of imposing a 30-day delay.
In accordance with the above authorities, the Department is bypassing notice and comment requirements of 5 U.S.C. 553(b) and (c) to urgently respond to the economic crisis resulting from COVID-19. This rule is being issued as an interim final rule, and the Department requests public input on all aspects of the rule. Instead of issuing a notice of proposed rulemaking, the Department is taking post-promulgation comments and will review and consider the public comments before issuing a final rule.
Under E.O. 12866, the OMB's Office of Information and Regulatory Affairs (OIRA) determines whether a regulatory action is significant and, therefore, subject to the requirements of the E.O. and review by OMB. 58 FR 51735. Section 3(f) of E.O. 12866 defines a “significant regulatory action” as an action that is likely to result in a rule that: (1) Has an annual effect on the economy of $100 million or more, or adversely affects in a material way a sector of the economy, productivity, competition, jobs, the environment, public health or safety, or State, local, or tribal governments or communities (also referred to as economically significant); (2) creates serious inconsistency or otherwise interferes with an action taken or planned by another agency; (3) materially alters the budgetary impacts of entitlement grants, user fees, or loan programs, or the rights and obligations of recipients thereof; or (4) raises novel legal or policy issues arising out of legal mandates, the President's priorities, or the principles set forth in the E.O.
E.O. 13563 directs agencies to propose or adopt a regulation only upon a reasoned determination that its benefits justify its costs; the regulation is tailored to impose the least burden on society, consistent with achieving the regulatory objectives; and in choosing among alternative regulatory approaches, the agency has selected those approaches that maximize net benefits. E.O. 13563 recognizes that some benefits are difficult to quantify and provides that, where appropriate and permitted by law, agencies may consider and qualitatively discuss values that are difficult or impossible to quantify, including equity, human dignity, fairness, and distributive impacts.
Section III.B.1 describes the need for the IFR, and section III.B.2 describes the process used to estimate the costs of the rule and the general inputs used to reach these estimates, such as wages and number of affected entities. Section III.B.3 explains how the provisions of the IFR will result in costs and transfer payments, and presents the calculations the Department used to reach the cost and transfer payment estimates. In addition, this section describes the qualitative transfer payments and benefits of the changes contained in this IFR. Section III.B.4 summarizes the estimated first-year and 10-year total and annualized costs, perpetuated costs, and transfer payments of the IFR. Finally, section III.B.5 describes the regulatory alternatives that were considered during the development of the IFR.
The Department expects that the IFR will result in costs and transfer payments. As shown in Exhibit 1, the IFR will have an annualized cost of $3.06 million and a total 10-year cost of $21.51 million at a discount rate of 7 percent in 2019 dollars.
The total cost associated with the IFR includes only rule familiarization. The rule is not expected to result in any cost savings. Transfer payments are the result of changes to the computation of prevailing wage rates for employment opportunities that U.S. employers seek to fill with foreign workers on a temporary basis through H-1B, H-1B1, and E-3 nonimmigrant visas.
The Department was unable to quantify some transfer payments and benefits of the IFR. The Department describes them qualitatively in section III.B.3 (Subject-by-Subject Analysis). The Department invites comments regarding the assumptions, data sources, and methodologies used to estimate the costs and transfer payments from this IFR. The Department invites public comment on any additional benefits or costs that could result from this IFR.
The Department has determined that new rulemaking is urgently needed to more effectively protect the recruitment and wages of U.S. workers, eliminate any economic incentive or advantage in hiring foreign workers on a permanent or temporary basis in the United States, and further the goals of E.O. 13788, Buy American and Hire American.
In addition, this IFR is consistent with the aims of the Presidential “Proclamation Suspending Entry of Aliens Who Present a Risk to the U.S. Labor Market Following the Coronavirus Outbreak,”
The Department is therefore amending its regulations at Sections 656.40 and 655.731 to reflect the methodology it will use to determine prevailing wages using wage data from the BLS OES survey for job opportunities in the H-1B, H-1B1, E-3, and permanent labor certification programs. The reports discussed and analyses provided in the preamble above expose how the application of the current wage levels for the four-tier OES prevailing wage structure fail to produce prevailing wages at a level consistent with the wages of U.S. workers similarly employed, and has a suppressive effect on the wages of similarly employed U.S. workers. The Department has a statutory mandate to protect the wages and working conditions of similarly employed U.S. workers from adverse effect caused by the employment of foreign workers in the United States on a permanent or temporary basis. The regulatory changes contained in this IFR are urgently needed as the country continues to recover from the economic crisis caused by the COVID-19 public health emergency in order to more effectively protect the recruitment and wages of U.S. workers and eliminate any economic incentive or advantage in hiring foreign workers on a permanent or temporary basis in the United States through these visa programs.
The Department estimated the costs and transfer payments of the IFR relative to the existing baseline (
In accordance with the regulatory analysis guidance articulated in OMB's Circular A-4 and consistent with the Department's practices in previous rulemakings, this regulatory analysis focuses on the likely consequences of the IFR (
Exhibit 2 presents the number of entities affected by the IFR. The number of affected entities is calculated using OFLC performance data from fiscal years (FYs) 2018 and 2019. The Department uses them throughout this analysis to estimate the costs and transfer payments of the IFR.
The Department presents the estimated average number of applicants and the change in burden hours required for rule familiarization in section III.B.3 (Subject-by-Subject Analysis).
In section III.B.3 (Subject-by-Subject Analysis), the Department presents the costs, including labor, associated with implementation of the provisions contained in this IFR. Exhibit 3 presents the hourly compensation rates for the occupational categories expected to experience a change in the number of hours necessary to comply with the IFR. The Department used the BLS mean hourly wage rate for private sector human resources specialists.
The Department used the hourly compensation rates presented in Exhibit 3 throughout this analysis to estimate the labor costs for each provision.
The Department's analysis below covers the estimated costs and transfer payments of the IFR. In accordance with Circular A-4, the Department considers transfer payments as payments from one group to another that do not affect total resources available to society. The regulatory impact analysis focuses on the costs and transfer payments that can be attributed exclusively to the new requirements in the IFR.
The following section describes the costs of the IFR.
When the IFR takes effect, existing employers of foreign workers with H-1B, H-1B1, E-3 visas, and those employers sponsoring foreign workers for permanent employment, will need to familiarize themselves with the new regulations. Consequently, this will impose a one-time cost for existing employers in the temporary and permanent visa programs in the first year. Each year, there are new employers that participate in the temporary and permanent visa programs. Therefore, in each year subsequent to the first year, new employers will need to familiarize themselves with the new regulations.
To estimate the first-year cost of rule familiarization, the Department calculated the average (90,688) number of unique employers requesting H-1B certifications and PERM certifications in FY18 (64,875 + 28,856 = 93,731) and FY19 (64,049 + 23,596 = 87,645). The average number of unique H-1B and PERM employers (90,688) was multiplied by the estimated amount of time required to review the rule (1 hour).
This section discusses the quantifiable transfer payments related to changes to the computation of the prevailing wage levels.
As discussed in the preamble, the Department determined that current wage levels result in prevailing wage rates for H-1B workers that are far below what their U.S. counterparts are likely paid, which has a suppressive effect on the wages of similarly employed U.S. workers. While allowing employers to access high-skilled workers to fill specialized positions can help U.S. workers' job opportunities in some instances, the benefits of this policy diminish or disappear when the prevailing wage levels do not accurately reflect the wages paid to similarly situated workers in the U.S. labor market. The resulting distortions from a poor calculation of the prevailing wage allow some firms to replace qualified U.S. workers with lower-cost foreign workers.
Therefore, the Department is amending § 656.40(b) by codifying the practice of using four prevailing wage levels and the computations of those wage levels. Specifically, new paragraph (b)(2)(i) stipulates that the “prevailing wage shall be provided by the OFLC
Consistent with the formula provided in the INA, Level II will be calculated by dividing by three, the difference between Levels I and IV, and adding the quotient to the computed value for Level I. Level III will be calculated by dividing by three the difference between Levels I and IV, and subtracting the quotient from the computed value for Level IV. This yields a Level II prevailing wage at approximately the 62nd percentile and a Level III prevailing wage at approximately the 78th percentile, as compared to the current computation, which places Level II at approximately the 34th percentile and Level III at approximately the 50th percentile.
Finally, the Department is revising § 655.731 to explain that it will use the BLS's OES survey wage data to establish the prevailing wages in the H-1B, H-1B1, and E-3 visa classifications and added a sentence to explain that these determinations will be made by the OFLC NPC in a manner consistent with § 656.40(b)(2).
The Department calculated the impact on wages that would occur from implementation of the prevailing wage computation changes contained in the IFR. It is expected that the increase in prevailing wages under the IFR will induce some employers to employ U.S. workers instead of foreign workers from the H-1B program, but nonetheless the Department still expects that the same number of H-1B visas will be granted under the annual caps. For many years, the Department has observed that the number of petitions exceeds the numerical cap, as the annual H-1B cap was reached within the first five business days each year from FY2014 through FY2020, and higher prevailing wage levels do not necessarily mean that demand for temporary foreign labor will fall below the available supply of visas. Under existing prevailing wage levels, which the Department has shown are too low and do not accurately reflect the wages paid to similarly situated U.S. workers, demand for temporary foreign labor far exceeds the statutory limits on supply. Usually prices rise in a market when demand exceeds supply. However, given the statutory design of the H-1B system, along with the lower wages for comparable work in many other countries and the non-pecuniary benefits of participating the H-1B program, prices for temporary foreign labor under the H-1B program have stayed too low to depress overall employer demand.
The IFR is still inducing a wage transfer under these cases where U.S. workers are employed instead of H-1B workers and therefore no adjustments to the wage estimates are necessary due to this effect. However, it is possible that prevailing wage increases will induce some employers to train and provide more working hours to incumbent workers, resulting in no increase in employment but an increase in earnings. It is also possible that prevailing wage increases will induce some employers to not hire a worker at all (either U.S. worker or worker from the H-1B program that is subject to the annual cap or not subject to the annual cap), resulting in a decrease in employment of guest workers. However, given that participation in temporary labor certification programs is voluntary and there exists an alternative labor market of U.S. workers who are not being prevented from accepting work offered at potentially lower market-based wages, there is some reason to doubt whether an increase in prevailing wages will lead to an efficiency loss from decreased labor demand. Due to data limitations on the expected change in labor demand and supply of U.S. workers, the Department cannot measure accurately the efficiency gains or losses to the U.S. labor market created by the new prevailing wage system. While the Department discusses this potential impact qualitatively, it welcomes comments on how to estimate changes to efficiency from the new prevailing wage levels.
For each H-1B certification in FY 2018, FY 2019, and FY 2020, the Department used the difference between the estimated prevailing wage level under the IFR and the wage offered under the current baseline to establish the wage impact of the prevailing wage computation changes in each calendar year of the certification's employment period. Under the H-1B visa classification, employment periods for certifications can last for up to three years in length and generally begin up to six months after a certification is issued by the Department. Therefore, a given fiscal year can have wage impacts that start in that calendar year and last up to three years, or could start in the following calendar year and have an end-date up to four calendar years past the fiscal year. For example, an employment start date in March of 2019 may be associated with an H-1B application certified by the Department during FY 2018 and, if that certified application contains a three-year employment period, the wage impacts on the employer will extend through March of 2022. The IFR does not retroactively impact certified wages, so there will be new H-1B applications certified by the Department during FY 2020 that may extend well into the analysis period. Therefore, the first year of the rule will only impact new certifications, the second year new and continuing certifications from year 1 will be impacted, and the third year and beyond both new and continuing certifications from years 1 and 2 will be impacted.
To account for this pattern of wage impacts we classify certifications into three length cohorts and calculate annual wage impacts for each cohort based on FY 2018-FY 2020 data. Those cohorts are: Certifications lasting less than 1 year, certifications lasting 1-2 years, and certifications lasting 2-3 years.
H-1B, H-1B1, or E-3 applications certified by the Department do not necessarily result in employment and employer wage obligations. After obtaining a certification, employers must then submit a Form I-129, Petition for a Nonimmigrant Worker, for approval by U.S. Citizenship and Immigration Services (USCIS). USCIS may approve or deny the H-1B visa petition. USCIS approval data represents approvals of petitions based on both certifications issued by the Department that used OES data for the prevailing wage or that were based on other approved sources to determine the prevailing wage (
To estimate the wage impacts of new percentiles contained in this IFR, the Department used publicly available BLS OES data that reports the 10th, 25th, 50th, 75th, and 90th percentile wages by SOC code and metropolitan or non-metropolitan area.
For an illustrative example in Exhibit 5, to calculate projected wage impacts under the IFR, the Department first multiplied the number of certified workers by the number of hours worked in each calendar year (2,080 hours) and the new prevailing wage for the level the workers were certified at for the particular SOC and the geographic area combination. The examples in Exhibit 5 set forth how the Department calculated the IFR wage impact for an individual case of each length cohort.
After the total wages for the IFR was determined, the wage calculation under the current offered wage levels was calculated. The currently offered wage is always equal to or greater than the current prevailing wage because some certifications offer a wage higher than the prevailing wage. The methodology is the same as that used to estimate the projected wages under the IFR: Number of certified workers is multiplied by the number of hours worked in each calendar year (based on 2,080 hours in a full year) of certified employment and the actual offered wage for the certified workers (Exhibit 6 provides an example of the calculation of the baseline wages for the same case as in Exhibit 5).
Once the baseline offered wage was obtained, the Department estimated the wage impact of the IFR prevailing wage levels by subtracting the baseline offered wage for each calendar year from the IFR prevailing wage. The total wage impact was then multiplied by the average USCIS petition beneficiary approval rate for the state of intended employment. Estimating wage impacts is calculated here for the examples in Exhibits 5 and 6, above. For the length cohort less than 1 year, the impact in 2018 was $28,565 (($2,563,488−$2,413,146) * 0.19) and
To base the estimated wage impacts on three years of data, and to include the most recent data (
Existing prevailing wage data from the Foreign Labor Certification (FLC) Data Center, accessible at
The Department determined the total impact of the IFR prevailing wage levels for each length cohort in each calendar year by summing the wage impacts for all certifications in each year and averaging the totals. The wage impacts for each cohort and calendar year are presented in Exhibit 7. Some calendar years do not have values because the cohort, based on FY 2018-FY 2020 data, does not have a full year of data for those years. For example, calendar year 2021 does have new entries from FY 2020 data but it is not a complete year of data as FY 2021 would also have new entries, and therefore it is not included.
The annual average for each length cohort is used to produce the total transfers over the 10-year horizon. Each cohort enters in each year and has continuing wage impacts based on its cohort length. Therefore, in years 3-10 (2023-2030), the annual wage impact is equal to the sum of each cohort's annual average. This series is presented below in Exhibit 8.
The changes in prevailing wage rates constitute a transfer payment from employers to employees. The Department estimates the total transfer over the 10-year period is $198.29 billion and $165.09 billion at discount rates of 3 and 7 percent, respectively. The annualized transfer over the 10-year period is $23.25 billion and $23.5 billion at discount rates of 3 and 7 percent, respectively.
With the increases in prevailing wage levels under this IFR, some employers may decide not to hire a U.S. worker or a foreign worker on a temporary or permanent basis. The prevailing wage increase may mitigate labor arbitrage and induce some employers to train and provide more working hours to incumbent workers, resulting in no increase in employment. The Department is unable to quantify the extent to which these two factors will occur and therefore discusses them qualitatively.
The labor economics literature has a significant volume of research on the impact of wages on demand for labor. Of interest in the context of the H-1B program is the long-run own-wage elasticity of labor demand that describes how firms demand labor in response to marginal changes in wages. There is significant heterogeneity in estimates of labor demand elasticities that can depend on industry, skill-level, region, and more.
This section discusses the non-quantifiable transfer payments related to changes to the computation of the prevailing wage levels. Specifically, the Department did not quantify transfer payments associated with certifications under the Permanent Labor Certification Program because they are expected to be
The PERM programs have a large proportion of certifications issued annually to foreign beneficiaries that are working in the U.S. at the time of certification and would have changes to wages under the IFR prevailing wage. Prior to the PERM certification, these beneficiaries are typically working under H-1B, H-1B1, and E-3 temporary visas and wage transfers for these PERM certifications are therefore already factored into our wage transfer calculations for H-1B, H-1B1, and E-3 temporary visas. Below, Exhibit 9 illustrates the percentage of PERM certifications that are on H-1B, H-1B1, or E-3 temporary visas, the percent that are not on a temporary visa and/or are not currently in the U.S. and would therefore enter on an EB-2 or EB-3 visa, and all other visa classes.
About 10 percent of PERM certifications are issued annually by OFLC to foreign beneficiaries who do not currently reside in the U.S. and would enter on immigrant visas in the EB-2 or EB-3 preference category. Employment-based immigrant visa availability and corresponding wait times change regularly for different preference categories and countries. Foreign workers from countries with significant visa demand consistently experience delays, at times over a decade. Therefore, employers would not have wage obligations until at the earliest, the very end of the 10-year analysis period and the number of relevant certifications is a relatively small percent of all PERM certifications; the Department therefore has not included associated wage transfers in the analysis.
This section discusses the non-quantifiable benefits related to changes to the computation of the prevailing wage levels.
The Department's increase in the prevailing wages for the four wage levels is expected to result in multiple benefits that the Department is unable to quantify but discusses qualitatively. One benefit of the IFR's increase in prevailing wages is the economic incentive to increase employee retention, training, and productivity which will increase benefits to both employers and U.S. workers. The increase in prevailing wages is expected to induce employers—particularly those using the permanent and temporary visa programs—to fill critical skill shortages, to minimize labor costs by implementing retention initiatives to reduce employee turnover, and/or to increase the number of work hours offered to similarly employed U.S. workers. Furthermore, for employers in the technology and health care sectors, this could mean using higher wages to attract and hire the industry's most productive U.S. workers and to provide them with the most advanced equipment and technologies to perform their work in the most efficient manner.
This high-wage, high-skill approach to minimizing labor costs is commonly referred to as the “efficiency wage” theory in labor economics; a well-established strategy that allows companies employing high-wage workers to minimize labor costs and effectively compete with companies employing low-wage workers. The efficiency wage theory supports the idea that increasing wages can lead to increased labor productivity because workers feel more motivated to work at higher wage levels. Where these jobs offer wages that are significantly higher than the wages and working conditions of alternative jobs, workers will have a greater incentive to be loyal to the company, impress their supervisors with the quality of their work, and exert an effort that involves no shirking. Thus, if employers increase wages, some, or all, of the higher wage costs can be recouped through increased staff retention, lower costs of supervision, and higher labor productivity.
Strengthening prevailing wages will also help promote and protect jobs for American workers. By ensuring that the employment of any foreign worker is commensurate with the wages paid to similarly employed U.S. workers, the Department will be protecting the types of white-collar, middle-class jobs that are critical to ensuring the economic viability of communities throughout the country.
There is some evidence that the existing prevailing wage levels offer opportunities to use lower-cost alternatives to U.S. workers doing similar jobs by offering two wage levels below the median wage. For example, in FY 2019, 60 percent of H-1B workers were placed at either the first or second wage level, meaning a substantial majority of workers in the program could be paid wages well below the median wage for their occupational classification.
In addition, because workers with greater skills tend to be more productive, and as a result can command higher wages, raising the prevailing wage levels will lead to the limited number of H-1B visas going to higher-skilled foreign workers, which will likely increase the spillover economic benefits associated with high-skilled immigration.
Finally, ensuring that skilled occupations are not performed at below-market wage rates by foreign workers will provide greater incentives for firms to expand education and job training programs. These programs can attract and develop the skills of a younger generation of U.S. workers to enter occupations that currently rely on elevated levels of foreign workers.
Exhibit 10 below summarizes the costs and transfer payments of the IFR. The Department estimates the annualized cost of the IFR at $3.06 million and the annualized transfer payments (from H-1B, H-1B1, and E-3 employers to workers) at $23.5 billion, at a discount rate of 7 percent. The Department did not estimate any cost savings. For the purpose of E.O. 13771, the annualized cost, when perpetuated, is $1.95 million at a discount rate of 7 percent in 2016 dollars.
The Department considered two alternatives to the chosen approach of establishing the prevailing wage for Levels I through IV, respectively, at approximately the 45th percentile, the 62nd percentile, the 78th percentile, and the 95th percentile.
First, the Department considered an alternative that would modify the number of wage tiers from four levels to three levels. Under this alternative, prevailing wages would be set for Levels I through III at the 45th, 75th, and 95th percentile, respectively. Modifying the number of wage tiers to three levels would allow for more manageable wage assignments that would be easier for employers and employees to understand due to decreased complexity to matching wage tiers with position experience. A three-tiered prevailing wage structure would maintain the minimum entry-level and fully competent experience levels and simplify the intermediate level of experience by combining the current qualified and experienced distinctions. The Department prefers the chosen methodology over this alternative because the chosen four-tiered prevailing wage structure is likely to produce more accurate prevailing wages than a three-tiered structure due to the ability to have two intermediate wage levels. In addition, creating a three-tiered prevailing wage structure would require a statutory change.
The Department considered a second alternative that would modify the geographic levels for assigning prevailing wages for the SOC code within the current four-tiered prevailing wage structure, which ranges from local MSA or BOS areas to national, to a two-tiered geographic area structure containing only statewide or national area estimates. By assigning prevailing wages at a statewide or, where statewide averages cannot be reported by the BLS, national geographic area, this second alternative would again simplify the prevailing wage determination process by reducing the number of distinct wage computations reported by the BLS and provide employers with greater certainty regarding their wage obligations, especially where the job opportunity requires work to be performed in a number of different worksite locations within a state or regional area. This process would also reduce variability in prevailing wages within a state for the same occupations across time, making prevailing wages more consistent and uniform. However, this method would not account for wage variability that may occur within states and that can account for within-state differences in labor market dynamics, industry competitiveness, or cost of living.
The Department prefers the chosen methodology because it preserves important differences in county and regional level prevailing wages and better aligns with the statutory requirement that the prevailing wage be the wage paid in the area of employment. The Department also seeks public comments to help us to identify any other regulatory alternatives that should be considered.
The Regulatory Flexibility Act of 1980 (RFA), 5 U.S.C. 601
However, if an agency determines that a proposed or final rule is unlikely to have a significant economic impact on a substantial number of small entities, the RFA provides that the head of the agency may so certify and a regulatory flexibility analysis is not required.
The Department expects that this IFR will likely have a significant economic impact on a substantial number of small entities and is therefore publishing this Initial Regulatory Flexibility Analysis (IRFA), as required by the RFA. The Department invites public comment on all aspects of this IRFA, including the estimates related to the number of small entities affected by the IFR and expected
The Department has determined that new rulemaking needed to will better protect the wages and job opportunities of U.S. workers, minimize incentives to hire foreign workers over U.S. workers on a permanent or temporary basis in the United States under the H-1B, H-1B1, and E-3 visa programs and the PERM program, and further the goals of Executive Order 13788, Buy American and Hire American. In addition, this IFR is consistent with the aims of the Presidential “Proclamation Suspending Entry of Aliens Who Present a Risk to the U.S. Labor Market Following the Coronavirus Outbreak,” which found that the entry of additional foreign workers in certain immigrant and nonimmigrant classifications “presents a significant threat to employment opportunities for Americans affected by the extraordinary economic disruptions caused by the COVID-19 outbreak.” Accordingly, this IFR revises the computation of wage levels under the Department's four-tiered wage structure based on the OES wage survey administered by the BLS to ensure that wages paid to immigrant and nonimmigrant workers are commensurate with the wages of U.S. workers with comparable levels of education, experience, and levels of supervision in the occupation and area of employment.
The Department is amending its regulations at Sections 656.40 and 655.731 to reflect the methodology the Department will use to determine prevailing wages based on the BLS's OES survey for job opportunities in the H-1B and PERM programs. The revised methodology will establish the prevailing wage for Levels I through IV, respectively, at approximately the 45th percentile, the 62nd percentile, the 78th percentile, and the 95th percentile.
The INA assigns responsibilities to the Secretary relating to the entry and employment of certain categories of employment-based immigrants and nonimmigrants. This rule relates to the labor certifications that the Secretary issues for certain employment-based immigrants and to the LCAs that the Secretary certifies in connection with the temporary employment of foreign workers under the H-1B, H-1B1, and E-3 visa classifications.
The Department collected employment and annual revenue data from the business information provider Data Axle and merged those data into the H-1B, H-1B1, and E-3 visa program disclosure data (H-1B disclosure data) for FY 2019.
To provide clarity on the types of industries impacted by this regulation, Exhibit 11 shows the number of unique H-1B small entity employers with certifications in FY 2019 within the top 10 most prevalent industries at the 6-digit and 4-digit NAICS code level. Depending on when their employment period starts and the length of the employment period (up to 3 years), small entities with certifications in FY 2019 can have wage obligations in calendar years 2018 through 2023,three.
The Department has considered the incremental costs for small entities from the baseline (
The Department estimates that small entities using the H-1B program, 22,430 unique employers would incur a one-time cost of $51.93 to familiarize themselves with the rule.
In addition to the total first-year cost above, each small entity using the H-1B program may have an increase in the annual wage costs due to the revisions to the wage structure if they currently offer a wage lower than the IFR prevailing wage levels. For each small entity, we calculated the likely annual wage cost as the sum of the total IFR wage minus the total baseline wage for each small entity identified from the H-1B disclosure data in FY 2019. We added this change in the wage costs to the total first-year costs to measure the total impact of the IFR on the small entity. Small entities with certifications in FY 2019 can have wage obligations in calendar years 2018 through 2023, depending on when their employment period starts and the length of the employment period (up to 3 years). Because USCIS does not approve all certifications, the estimated wage obligations for some small entities may be overestimated. The Department is unable to determine which small entities had certifications approved or not approved by USCIS and therefore estimates the total wage obligation with no adjustment for USCIS approval rates. As a result estimates of the total cost to small entities are likely to be inflated. The Department seeks public comments on how to best estimate which small entities had certifications approved by USCIS. Exhibit 12 presents the number of small entities with a wage impact in each year, as well as the average wage impact per small entity in each year.
The Department determined the proportion of each small entity's total revenue affected by the costs of the IFR to determine if the IFR would have a significant and substantial impact on small entities. The cost impacts included estimated first-year costs and the wage costs introduced by the IFR. The Department used a total cost estimate of 3 percent of revenue as the threshold for a significant individual impact, and assumed that 15 percent of small entities incurring a significant impact as the threshold for a substantial impact on small entities generally.
The Department has used a threshold of three percent of revenues in prior rulemakings for the definition of significant economic impact.
Of the 22,430 unique small employers with revenue data, up to 16 percent of employers would have more than 3 percent of their total revenue affected in 2019, 28 percent in 2020 and 2021, and up to 21 percent in 2022. Exhibit 13 provides a breakdown of small employers by the proportion of revenue affected by the costs of the IFR.
The Department is not aware of any relevant Federal rules that conflict with this IFR.
The RFA directs agencies to assess the effects that various regulatory alternatives would have on small entities and to consider ways to minimize those effects. Accordingly, the Department considered two regulatory alternatives to the chosen approach of establishing the prevailing wage for Levels I through IV, respectively, at approximately the 45th percentile, the 62nd percentile, the 78th percentile, and the 95th percentile.
First, the Department considered an alternative that would modify the number of wage tiers from four levels to three levels. Under this alternative, the Department attempted to set the prevailing wages for Levels I through III, respectively, at the 45th, 75th, and 95th percentile. Modifying the number of wage tiers to three levels would allow for more manageable wage assignments that would be easier for small entities and their employees to understand due to decreased complexity to matching wage tiers with position experience. The Department decided not to pursue this alternative because the chosen four-tiered wage methodology is likely to be more accurate than the three-tiered wage level because it has two intermediate wage levels. In addition, creating a three-tiered wage level would require a statutory change. Although the Department recognizes that legal limitations prevent this alternative from being actionable, the Department nonetheless presents it as a regulatory alternative in accord with OMB guidance.
The Department considered a second alternative that attempted to modify the geographic levels for assigning prevailing wages for the occupation from the current four-tiered structure, which ranges from local MSA or BOS areas to national, to a two-tiered structure containing statewide or national levels. By assigning prevailing wages at a statewide or national level (depending on whether statewide averages can be reported by BLS), this second alternative attempted to simplify the prevailing wage determination process by reducing the number of distinct wage computations reported by the BLS. It would also provide small entities with greater certainty regarding their wage obligations, especially where the job opportunity requires work to be performed in a number of different worksite locations within a state or regional area. The Department decided not to pursue this alternative because the chosen methodology preserves important differences in county and regional level prevailing wages, and it would require a statutory change.
The Department invites public comments on these alternatives and other alternatives to reduce the burden on small entities while remaining consistent with the objectives of the proposed rule.
The Unfunded Mandates Reform Act of 1995 (UMRA) is intended, among other things, to curb the practice of imposing unfunded Federal mandates on State, local, and tribal governments. Title II of UMRA requires each Federal agency to prepare a written statement assessing the effects of any Federal mandate in a proposed or final agency rule that may result in a $100 million or more expenditure (adjusted annually for inflation) in any one year by State, local, and tribal governments, in the aggregate, or by the private sector. The inflation-adjusted value equivalent of $100 million in 1995 adjusted for inflation to 2019 levels by the Consumer Price Index for All Urban Consumers (CPI-U) is approximately $168 million based on the Consumer Price Index for All Urban Consumers.
Calculation of inflation: (1) Calculate the average monthly CPI-U for the reference year (1995) and the current year (2019); (2) Subtract reference year CPI-U from current year CPI-U; (3) Divide the difference of the reference year CPI-U and current year CPI-U by the reference year CPI-U; (4) Multiply by 100 = [(Average monthly CPI-U for 2019 − Average monthly CPI-U for 1995)/(Average monthly CPI-U for 1995)] * 100 = [(255.657−152.383)/152.383] * 100 = (103.274/152.383) *100 = 0.6777 * 100 = 67.77 percent = 68 percent (rounded).
Calculation of inflation-adjusted value: $100 million in 1995 dollars * 1.68 = $168 million in 2019 dollars.
While this IFR rule may result in the expenditure of more than $100 million by the private sector annually, the rulemaking is not a “Federal mandate” as defined for UMRA purposes.
The Office of Information and Regulatory Affairs, of the Office of Management and Budget, has determined that this IFR is a major rule as defined by 5 U.S.C. 804, also known as the “Congressional Review Act,” as enacted in section 251 of the Small Business Regulatory Enforcement Fairness Act of 1996, Public Law 104- 121, 110 Stat. 847, 868
This IFR would not have substantial direct effects on the states, on the relationship between the national government and the states, or on the distribution of power and responsibilities among the various levels of government. Therefore, in accordance with section 6 of Executive Order 13132, it is determined that this IFR does not have sufficient federalism implications to warrant the preparation of a federalism summary impact statement.
This IFR meets the applicable standards set forth in sections 3(a) and 3(b)(2) of Executive Order 12988.
This IFR does not have “tribal implications” because it does not have substantial direct effects on one or more Indian tribes, on the relationship between the Federal Government and Indian tribes, or on the distribution of power and responsibilities between the Federal Government and Indian tribes. Accordingly, E.O. 13175, Consultation and Coordination with Indian Tribal Governments, requires no further agency action or analysis.
The Paperwork Reduction Act of 1995 (PRA), 44 U.S.C. 3501
Administrative practice and procedure, Australia, Chile, Employment, Employment and training, Immigration, Labor, Migrant labor, Wages.
Administrative practice and procedure, Employment, Foreign workers, Labor, Wages.
Accordingly, for the reasons stated in the preamble, the Department of Labor amends parts 655 and 656 of chapter V, title 20, Code of Federal Regulations, as follows:
Section 655.0 issued under 8 U.S.C. 1101(a)(15)(E)(iii), 1101(a)(15)(H)(i) and (ii), 8 U.S.C. 1103(a)(6), 1182(m), (n), (p), and (t), 1184(c), (g), and (j), 1188, and 1288(c) and (d); sec. 3(c)(1), Pub. L. 101-238, 103 Stat. 2099, 2102 (8 U.S.C. 1182 note); sec. 221(a), Pub. L. 101-649, 104 Stat. 4978, 5027 (8 U.S.C. 1184 note); sec. 303(a)(8), Pub. L. 102-232, 105 Stat. 1733, 1748 (8 U.S.C. 1101 note); sec. 323(c), Pub. L. 103-206, 107 Stat. 2428; sec. 412(e), Pub. L. 105-277, 112 Stat. 2681 (8 U.S.C. 1182 note); sec. 2(d), Pub. L. 106-95, 113 Stat. 1312, 1316 (8 U.S.C. 1182 note); 29 U.S.C. 49k; Pub. L. 107-296, 116 Stat. 2135, as amended; Pub. L. 109-423, 120 Stat. 2900; 8 CFR 214.2(h)(4)(i); 8 CFR 214.2(h)(6)(iii); and sec. 6, Pub. L. 115-218, 132 Stat. 1547 (48 U.S.C. 1806).
Subpart A issued under 8 CFR 214.2(h).
Subpart B issued under 8 U.S.C. 1101(a)(15)(H)(ii)(a), 1184(c), and 1188; and 8 CFR 214.2(h).
Subpart E issued under 48 U.S.C. 1806.
Subparts F and G issued under 8 U.S.C. 1288(c) and (d); sec. 323(c), Pub. L. 103-206, 107 Stat. 2428; and 28 U.S.C. 2461 note, Pub. L. 114-74 at section 701.
Subparts H and I issued under 8 U.S.C. 1101(a)(15)(H)(i)(b) and (b)(1), 1182(n), (p), and (t), and 1184(g) and (j); sec. 303(a)(8), Pub. L. 102-232, 105 Stat. 1733, 1748 (8 U.S.C. 1101 note); sec. 412(e), Pub. L. 105-277, 112 Stat. 2681; 8 CFR 214.2(h); and 28 U.S.C. 2461 note, Pub. L. 114-74 at section 701.
Subparts L and M issued under 8 U.S.C. 1101(a)(15)(H)(i)(c) and 1182(m); sec. 2(d), Pub. L. 106-95, 113 Stat. 1312, 1316 (8 U.S.C. 1182 note); Pub. L. 109-423, 120 Stat. 2900; and 8 CFR 214.2(h).
(a) * * *
(2) * * *
(ii) If the job opportunity is not covered by paragraph (a)(2)(i) of this section, the prevailing wage shall be based on the wages of workers similarly employed as determined by the wage component of the Bureau of Labor Statistics (BLS) Occupational Employment Statistics Survey (OES) in accordance with 20 CFR 656.40(b)(2)(i); a current wage as determined in the area under the Davis-Bacon Act, 40 U.S.C. 276a
(A)
(
8 U.S.C. 1182(a)(5)(A), 1182(p); sec.122, Pub. L. 101-649, 109 Stat. 4978; and Title IV, Pub. L. 105-277, 112 Stat. 2681.
(a)
(b) * * *
(2) If the job opportunity is not covered by a CBA, the prevailing wage for labor certification purposes shall be based on the wages of workers similarly employed using the wage component of the Bureau of Labor Statistics (BLS) Occupational Employment Statistics Survey (OES) in accordance with paragraph (b)(2)(i) of this section, unless the employer provides an acceptable survey under paragraphs (b)(3) and (g) of this section or elects to utilize a wage permitted under paragraph (b)(4) of this section.
(i) The BLS shall provide the OFLC Administrator with the OES wage data by occupational classification and geographic area, which is computed and assigned at four levels set commensurate with the education, experience, and level of supervision of similarly employed workers, as determined by the Department. Based on this determination, the prevailing wage shall be provided by the OFLC Administrator at four levels:
(A) The Level I Wage shall be computed as the arithmetic mean of the fifth decile of the OES wage distribution and assigned for the most specific occupation and geographic area available.
(B) The Level II Wage shall be determined by first dividing the difference between Level I and IV by three and then adding the quotient to the computed value for Level I and assigned for the most specific occupation and geographic area available.
(C) The Level III Wage shall be determined by first dividing the difference between Level I and IV by three and then subtracting the quotient from the computed value for Level IV and assigned for the most specific occupation and geographic area available.
(D) The Level IV Wage shall be computed as the arithmetic mean of the upper decile of the OES wage distribution and assigned for the most specific occupation and geographic area available.
(ii) The OFLC Administrator will publish, at least once in each calendar year, on a date to be determined by the OFLC Administrator, the prevailing wage levels under paragraph (b)(2)(i) of this section as a notice posted on the OFLC website.
(3) If the employer provides a survey acceptable under paragraph (g) of this section, the prevailing wage for labor certification purposes shall be the arithmetic mean of the wages of workers similarly employed in the area of intended employment. If an otherwise acceptable survey provides a median and does not provide an arithmetic mean, the prevailing wage applicable to the employer's job opportunity shall be the median of the wages of workers similarly employed in the area of intended employment.
U.S. Citizenship and Immigration Services, Department of Homeland Security.
Interim final rule (IFR) with request for comments.
The Department of Homeland Security (DHS or the Department), is amending certain DHS regulations governing the H-1B nonimmigrant visa program. Specifically, DHS is: Revising the regulatory definition of and standards for a “specialty occupation” to better align with the statutory definition of the term; adding definitions for “worksite” and “third-party worksite”; revising the definition of “United States employer”; clarifying how U.S. Citizenship and Immigration Services (USCIS) will determine whether there is an “employer-employee relationship” between the petitioner and the beneficiary; requiring corroborating evidence of work in a specialty occupation; limiting the validity period for third-party placement petitions to a maximum of 1 year; providing a written explanation when the petition is approved with an earlier validity period end date than requested; amending the general itinerary provision to clarify it does not apply to H-1B petitions; and codifying USCIS' H-1B site visit authority, including the potential consequences of refusing a site visit. The primary purpose of these changes is to better ensure that each H-1B nonimmigrant worker (H-1B worker) will be working for a qualified employer in a job that meets the statutory definition of a “specialty occupation.” These changes are urgently necessary to strengthen the integrity of the H-1B program during the economic crisis caused by the COVID-19 public health emergency to more effectively ensure that the employment of H-1B workers will not have an adverse impact on the wages and working conditions of similarly employed U.S. workers. In addition, in strengthening the integrity of the H-1B program, these changes will aid the program in functioning more effectively and efficiently.
This interim final rule is effective on December 7, 2020. Written comments must be submitted on this interim final rule on or before December 7, 2020. Comments on the collection of information (see Paperwork Reduction Act section) must be received on or before November 9, 2020. Comments on both the interim final rule and the collection of information received on or before November 9, 2020 will be considered by DHS and USCIS. Only comments on the interim final rule received between November 9, 2020 and December 7, 2020 will be considered by DHS and USCIS. Note: Comments received after November 9, 2020 only on the information collection will not be considered by DHS and USCIS.
You may submit comments on the entirety of this interim final rule package, identified by DHS Docket No. USCIS-2020-0018, through the Federal eRulemaking Portal:
Charles L. Nimick, Chief, Business and Foreign Workers Division, Office of Policy and Strategy, U.S. Citizenship and Immigration Services, Department of Homeland Security, 20 Massachusetts Ave. NW, Suite 1100, Washington, DC 20529-2120. Telephone Number (202) 272-8377 (not a toll-free call). Individuals with hearing or speech impairments may access the telephone numbers above via TTY by calling the toll-free Federal Information Relay Service at 1-877-889-5627 (TTY/TDD).
DHS invites all interested parties to participate in this rulemaking by submitting written data, views, comments, and arguments on all aspects of this interim final rule. DHS also invites comments that relate to the economic, environmental, or federalism effects that might result from this interim final rule. Comments must be submitted in English, or an English translation must be provided. Comments that will provide the most assistance to DHS in implementing these changes will: Reference a specific portion of the interim final rule; explain the reason for any recommended change; and include data, information, or authority that supports such a recommended change. Comments submitted in a manner other than those listed in the
Congressional intent behind creating the H-1B program was, in part, to help U.S. employers fill labor shortages in positions requiring highly skilled or educated workers using temporary workers.
In response to the directives of E.O. 13788, DHS undertook a comprehensive review of all rules and policies regarding nonimmigrant visa classifications for temporary foreign workers, including the H-1B visa program. Although the H-1B program was intended to allow employers to fill gaps in their workforce and remain competitive in the global economy, it has expanded far beyond that, often to the detriment of U.S. workers. Data shows that the H-1B program has been used to displace U.S. workers and has led to reduced wages in a number of industries in the U.S. labor market.
The President of the United States addressed those harms in
Consistent with Congressional intent of the H-1B program, the
By reforming key aspects of the H-1B nonimmigrant visa program, this rule will improve program integrity and better ensure that only petitioners who meet the statutory criteria for the H-1B classification are able to employ H-1B workers who are qualified for the classification. This, in turn, will protect jobs of U.S. workers as a part of responding to the national emergency, and facilitate the Nation's economic recovery.
The Secretary of Homeland Security's authority for these regulatory amendments is found in various sections of the INA, 8 U.S.C. 1101
• Section 101(a)(15)(H)(i)(b) of the INA, 8 U.S.C. 1101(a)(15)(H)(i)(b), which classifies as nonimmigrants aliens coming temporarily to the United States to perform services in a specialty occupation or as a fashion model with distinguished merit and ability;
• Section 214(a)(1) of the INA, 8 U.S.C. 1184(a)(1), which authorizes the Secretary to prescribe by regulation the terms and conditions of the admission of nonimmigrants;
• Section 214(c) of the INA, 8 U.S.C. 1184(c), which,
• Section 214(i) of the INA, 8 U.S.C. 1184(i), which defines the term “specialty occupation;” and
• Section 287(b) of the INA, 8 U.S.C. 1357(b), which authorizes USCIS to administer oaths and to take and consider evidence concerning any matter which is material and relevant to the administration and enforcement of the INA.
Finally, under section 101 of HSA, 6 U.S.C. 111(b)(1)(F), a primary mission of the Department is to “ensure that the overall economic security of the United States is not diminished by efforts, activities, and programs aimed at securing the homeland.”
This interim final rule will impose new annual costs of $24,949,861 for petitioners completing and filing H-1B petitions
DHS estimates $17,963,871 in annual costs to petitioners to submit contractual documents, work orders, or similar evidence required by this rule to establish an employer-employee relationship and qualifying employment. The petitioner must establish, at the time of filing, that it has actual work in a specialty occupation available for the beneficiary as of the start date of the validity period as requested on the petition. In addition, all H-1B petitions for beneficiaries who will be placed at a third-party worksite must submit evidence showing that the beneficiary will be employed in a specialty occupation, and that the petitioner will have an employer-employee relationship with the beneficiary.
DHS estimates $1,042,702 for the total annual opportunity cost of time for worksite inspections of H-1B petitions. This interim final rule is codifying DHS' existing authority to conduct site visits and other compliance reviews and clarifying consequences for failure to allow a site visit. Conducting on-site inspections and other compliance reviews is critical to detecting and deterring fraud and noncompliance. Failure or refusal of the petitioner or third-party worksite parties to cooperate in a site visit or verify facts may be grounds for denial or revocation of any H-1B petition for workers performing services at locations which are a subject of inspection, including any third-party worksites.
DHS estimates cost savings of $4,490,968 annually in eliminating the general itinerary requirement for H-1B petitions. Relative to the current regulation, this provision reduces the cost for petitioners who file on behalf of beneficiaries performing services in more than one location and submit itineraries.
While the maximum validity period for a specialty occupation worker is
DHS estimates a one-time total regulation familiarization cost of $11,941,471 in FY2021. For the 10-year implementation period of the rule (FY 2021 through FY 2030), DHS estimates the annual net societal costs to be $51,406,937 (undiscounted) in FY 2021, $416,212,496 (undiscounted) in FY 2022, $541,795,976 (undiscounted) from FY 2023 through FY 2027 each year, $388,592,536 (undiscounted) from FY 2028 through FY 2030 each year. DHS estimates the annualized net societal costs of the rule to be $430,797,915, annualized at 3-percent and $425,277,621, annualized at 7-percent discount rates.
The H-1B nonimmigrant visa program allows U.S. employers to temporarily employ foreign workers in specialty occupations, defined by statute as occupations that require the theoretical and practical application of a body of highly specialized knowledge, and a bachelor's or higher degree in the specific specialty, or its equivalent.
The number of aliens who may be issued initial H-1B visas or otherwise provided initial H-1B nonimmigrant status during any fiscal year has been capped at various levels by Congress over time, with the current numerical limit generally being 65,000 per fiscal year.
Despite Congress' efforts to protect the interest of U.S. workers to ensure that H-1B workers will not adversely affect them,
DHS believes that the same concerns have persisted in recent years, as highlighted by certain petitions filed by entities within the information technology (IT) industry. In recent years, there has been a 75 percent increase in the proportion of IT workers in the population of H-1B approved petitions—from 32 percent in FY 2003 to 56 percent in FY 2019.
Moreover, many H-1B petitions for IT workers are filed by companies, including staffing companies,
Some staffing companies may also be described as outsourcing companies,
U.S.-based companies that are not traditionally in the staffing or outsourcing business also have exploited the H-1B program in ways not contemplated by Congress.
Employers that pay below-median wages to their H-1B workers (in other words, any employer not paying at least Level III wages) are not necessarily in violation of the law. Section 212(n)(1)(A) of the Act requires employers to pay at least the actual wage level paid to other similarly situated employees or the prevailing wage, whichever is higher. Since the
Moreover, H-1B employers that displace U.S. workers are not necessarily violating the law, either. While section 212(n)(1)(E) through (G) of the Act, 8 U.S.C. 1182(n)(1)(E)-(G), requires H-1B-dependent employers
Overall, these reports and studies expose significant gaps in the ability of the H-1B program, as currently structured, to serve its original intent to supplement the U.S. workforce with a limited number of highly skilled workers while protecting the economic interests of U.S. workers. The President's recent “Proclamation Suspending Entry of Aliens Who Present a Risk to the U.S. Labor Market Following the Coronavirus Outbreak” notes that the entry of additional workers through the H-1B program “presents a significant threat to employment opportunities for Americans affected by the extraordinary economic disruptions caused by the COVID-19 outbreak.”
This rule only will apply to petitions filed on or after the effective date of the regulation, including amended petitions or petition extensions. DHS will not apply the new regulations to any pending petitions nor to previously approved petitions, either through reopening or through a notice of intent to revoke.
DHS is revising the regulatory definition and standards for a “specialty occupation” to align with the statutory definition of “specialty occupation.”
Section 101(a)(15)(H)(i)(b) of the INA, 8 U.S.C. 1101(a)(15)(H)(i)(b), describes, among others, nonimmigrants coming temporarily to the United States to perform services in a specialty occupation. Section 214(i)(1) of the INA, 8 U.S.C. 1184(i)(1) states, in relevant part, “the term `specialty occupation' means an occupation that requires—(A) theoretical and practical application of a body of highly specialized knowledge, and (B) attainment of a bachelor's or higher degree in the specific specialty (or its equivalent) as a minimum for entry into the occupation in the United States.” Currently, 8 CFR 214.2(h)(4)(ii) defines “specialty occupation” as an occupation which requires theoretical and practical application of a body of highly specialized knowledge in fields of human endeavor including, but not limited to, architecture, engineering, mathematics, physical sciences, social sciences, medicine and health, education, business specialties, accounting, law, theology, and the arts, and which requires the attainment of a bachelor's degree or higher in a specific specialty, or its equivalent, as a minimum for entry into the occupation in the United States.
First, this rule amends the definition of a “specialty occupation” at 8 CFR 214.2(h)(4)(ii) to clarify that there must be a direct relationship between the required degree field(s) and the duties of the position. Consistent with existing USCIS policy and practice, a position
Under this new rule, the petitioner will have the burden of demonstrating that there is a direct relationship between the required degree in a specific specialty (in other words, the degree field(s) that would qualify someone for the position) and the duties of the position. In many cases, the relationship will be clear and relatively easy to establish. For example, it should not be difficult to establish that a required medical degree is directly correlated to the duties of a physician. Similarly, a direct relationship may be established between the duties of a lawyer and a required law degree, and the duties of an architect and a required architecture degree. In other cases, the direct relationship may be less readily apparent, and the petitioner may have to explain and provide documentation to meet its burden of demonstrating the relationship. To establish a direct relationship, the petitioner would need to provide information regarding the course(s) of study associated with the required degree, or its equivalent, and the duties of the proffered position, and demonstrate the connection between the course of study and the duties and responsibilities of the position.
The requirement of a direct relationship between a degree in a specific specialty, or its equivalent, and the position should not be misconstrued as necessarily requiring a singular field of study. Section 214(i)(1) of the INA allows the “attainment of a bachelor's or higher degree in the specific specialty
In cases where the petitioner lists degrees in multiple disparate fields of study as the minimum entry requirement for a position, the petitioner would have to establish how each field of study is in a specific specialty providing “a body of highly specialized knowledge” directly related to the duties and responsibilities of the particular position to meet the requirements of sections 214(i)(1)(A) and (B) of the INA, 8 U.S.C. 1184(i)(1)(A) and (B), the regulatory definition, and one of the four criteria at new 8 CFR 214.2(h)(4)(iii)(A).
As such, a minimum entry requirement of a bachelor's or higher degree, or its equivalent, in multiple disparate fields of study would not automatically disqualify a position from being a specialty occupation. For example, a petitioner may be able to establish that a bachelor's degree in the specific specialties of either education or chemistry, each of which provide a body of highly specialized knowledge, is directly related to the duties and responsibilities of a chemistry teacher. In such a scenario, the “body of highly specialized knowledge” requirement of section 214(i)(1)(A) of the INA, 8 U.S.C. 1184(i)(1)(A), and the “degree in the specific specialty” requirement of section 214(i)(1)(B) of the INA, 8 U.S.C. 1184(i)(1)(B), would both be met and the chemistry teacher position listing multiple disparate fields of study would be in a specialty occupation.
In determining specialty occupation, USCIS interprets the “specific specialty” requirement in section 214(i)(1)(B) of the INA, 8 U.S.C. 1184(i)(1)(B), to relate back to the body of highly specialized knowledge requirement referenced in section 214(i)(1)(A) of the INA, 8 U.S.C. 1184(i)(1)(A), required by the specialty occupation in question, such that section 214(i)(1)(B) of the INA, 8 U.S.C. 1184(i)(1)(B), is only met if the purported degree in a specific specialty or specialties, or its equivalent, provides a body of specialized knowledge directly related to the duties and responsibilities of the particular position as required by section 214(i)(1)(A) of the INA, 8 U.S.C. 1184(i)(1)(A).
If the minimum entry requirement for a position is a general degree without further specialization or an explanation as to what type of degree is required, the “degree in the specific specialty (or its equivalent)” requirement of section 214(i)(1)(B) of the INA, 8 U.S.C. 1184(i)(1)(B), would not be satisfied. For example, a requirement of a
Similarly, a petition with a requirement of an engineering degree in any or all fields of engineering for a position of software developer would not suffice unless the record establishes how each or every field of study within an engineering degree provides a body of highly specialized knowledge directly relating to the duties and responsibilities of the software
Similarly, a requirement of a bachelor's degree in an unspecified “quantitative field” (which could include mathematics, statistics, economics, accounting, or physics) for a software developer position would be insufficient to meet the requirements of a specialty occupation unless the record identifies specific specialties within the wide variety of “quantitative fields” and establishes how each identified degree in a specific specialty provides a body of highly specialized knowledge, consistent with section 214(i)(1)(A) of the INA, 8 U.S.C. 1184(i)(1)(A), that is directly related to the duties and responsibilities of the software developer position. While a position may allow a range of degrees, and apply multiple bodies of highly specialized knowledge, each of those qualifying degree fields must be directly related to the proffered position.
As quoted above, under section 214(i)(1) of the INA, 8 U.S.C. 1184(i)(1), a “specialty occupation” requires attainment of a bachelor's or higher degree in the specific specialty (or its equivalent) as a minimum for entry into the occupation in the United States. However, the current regulatory criteria at 8 CFR 214.2(h)(4)(iii)(A) states that a bachelor's degree be “normally” required, or “common to the industry,” or that the knowledge required for the position is “usually associated” with at least a bachelor's degree or equivalent. The words “normally,” “common,” and “usually” are not found in the statute, and therefore, should not appear in the regulation. To conform to the statutory definition of a “specialty occupation” and promote consistent adjudications, DHS is eliminating the terms “normally,” “common,” and “usually” from the regulatory criteria.
The wording of the current regulatory criteria creates ambiguity. For example, the dictionary definition of “normally” is “usually, or in most cases,” and “usually” is defined as “in the way that most often happens.”
In addition, DHS is replacing the phrase, “To qualify as a specialty occupation,” with the phrase “A proffered position does not meet the definition of specialty occupation unless it also satisfies” prior to setting forth the regulatory criteria.
DHS also is amending 8 CFR 214.2(h)(4)(iii)(A)(
DHS further is amending 8 CFR 214.2(h)(4)(iii)(A)(
The third criterion at 8 CFR 214.2(h)(4)(iii)(A)(
As discussed above, the criterion at the new 8 CFR 214.2(h)(4)(iii)(A)(
DHS acknowledges that some petitioners may believe they have a reliance interest in retaining the existing regulatory framework for specialty occupation. For example, by eliminating the word “normally” from the regulatory criterion at 8 CFR 214.2(h)(4)(iii)(A)(
Further, DHS recognizes the possibility that some petitions for H-1B nonimmigrant classification might have been approved in error under the current regulation even though the petitions indicated that an alien could qualify to perform the relevant position based on a general degree. USCIS has generally denied such petitions on the basis that such petitions do not meet the statutory and regulatory definition of specialty occupation under the current regulation, but recognizes that a small number might have been approved in error and that similar petitions will be denied as a result of this Rule's clarification of the definition of “specialty occupation.” For example, by adding the phrase “A position is not a specialty occupation if attainment of a general degree, such as business administration or liberal arts, without further specialization, is sufficient to qualify for the position” at new 8 CFR 214.2(h)(4)(ii), positions where a general degree may qualify someone to perform the job, and that may have been erroneously approved as specialty occupations because of confusion created by the ambiguous wording in the current regulations, may now be denied. But again, to the extent that the revised regulations would result in the denial of some petitions that were erroneously approved under the current regulatory scheme, the government's interests in better adhering to the statute and better ensuring consistent adjudication far outweigh any interests petitioners may have in receiving continued petition approvals in a small number of cases based on error resulting from imprecise regulatory text. DHS notes that each case is decided on its own merits, and simply because a petition was approved previously does not guarantee that a similar petition would be approved in the future as prior approvals are not binding on USCIS.
DHS will add definitions for “worksite” and “third-party worksite” to the existing list of definitions at 8 CFR 214.2(h)(4)(ii).
The newly added definitions are helpful because the terms “worksite” and “third-party worksite” are used elsewhere in the amended regulations. As explained below, the new employer-employee relationship definition specifically refers to the beneficiary's worksite as a relevant factor in determining whether such relationship exists (
Currently, the term “United States employer” is defined at 8 CFR 214.2(h)(4)(ii) as “a person, firm, corporation, contractor, or other association, or organization in the United States” which, among other things, “[e]ngages a person to work within the United States” and “[h]as an employer-employee relationship with respect to employees under this part, as indicated by the fact that it may hire, pay, fire, supervise, or otherwise control the work of any such employee.” Through this rule, DHS is changing this definition by: (1) Striking the word “contractor” from the general definition of “United States employer”; (2) inserting the word “company” in that general definition; (2) expanding upon the existing requirement to engage the beneficiary to work within the United
DHS believes these revisions are necessary to clarify the requirements to qualify as an employer for purpose of the H-1B classification. As previously discussed, the current regulation at 8 CFR 214.2(h)(4)(ii) defines “United States employer” as an entity that has an “employer-employee relationship” with an “employee.” But these terms are not adequately defined. Section 101(a)(15)(H)(i)(
First, striking “contractor” will avoid potential confusion as the term “contractor” in the definition is misleading. The inclusion of “contractors” in the regulatory language could be read to suggest that contractors should generally qualify under the definition of a “United States employer.” While a contractor is certainly not excluded from qualifying as a “United States employer” for purposes of an H-1B petition, the contractor, like any petitioner, must establish the requisite “employer-employee relationship” with the H-1B beneficiary. This revision will also update the definition to include reference to “company,” as that term is commonly used to describe various types of business entities, such as limited liability companies.
DHS acknowledges that third-party arrangements involving one or more contractors may be a legitimate business model.
By removing the word “contractor”, DHS seeks to avoid any confusion or mistaken belief that contractors should generally qualify as “United States employers.” Petitioners that are contractors are reminded of their burden, similar to all other H-1B petitioners, whether they are a person, corporation, or company, to establish the employer-employee relationship for each H-1B petition they file.
Nevertheless, it is important to note that the deletion of the term “contractor” from the regulatory definition does not mean that a contractor never would qualify as a “United States employer” for the purpose of filing an H-1B petition. A contractor may be a person, firm, company, corporation, or other association or organization, and the contractor (whatever the form) still may qualify as a U.S. employer of the H-1B beneficiary if the contractor demonstrates the requisite employer-employee relationship with the beneficiary.
As currently written in 8 CFR 214.2(h)(4)(ii), the requirement for a petitioner to “[engage] a person to work within the United States” has limited practical value. It does not specify that the petitioner should engage the beneficiary (rather than “a person”). And it does not qualify the work to be performed within the United States. By stating in new 8 CFR 214.2(h)(4)(ii) that an employer must “[engage] the beneficiary to work within the United States, and ha[ve] a bona fide, non-speculative job offer for the beneficiary,” DHS seeks to provide more meaningful requirements for the definition of “United States employer,” consistent with statutory references to the intending or importing employer petitioning for an alien to perform services in a specialty occupation.
New 8 CFR 214.2(h)(4)(ii) will make it clear that a petitioner must have non-speculative employment for the beneficiary at the time of filing.
The agency long held and communicated the view that speculative employment is not permitted in the H-1B program. For example, a 1998 proposed rule documented this position, stating that historically, USCIS (or the Service, as it was called at the time) has not granted H-1B classification on the basis of speculative, or undetermined, prospective employment.
Note, however, that establishing non-speculative employment does not amount to demonstrating non-speculative daily work assignments through the duration of the requested validity period. DHS is not by this rule requiring employers to establish non-speculative and specific assignments for each and every day of the proposed period of employment.
Third, DHS will remove the phrase “as indicated by the fact that it may hire, pay, fire, supervise, or otherwise control the work of any such employee” from the current definition of “United States employer,” and replace that phrase with a separate, more extensive definition of “employer-employee relationship” based on USCIS' interpretation of existing common law.
The term “employer-employee relationship” at 8 CFR 214.2(h)(4)(ii) is not adequately defined. The phrase in that provision which reads, “as indicated by the fact that it may hire, pay, fire, supervise, or otherwise control the work of any such employee,” does not give sufficient guidance. For example, it is unclear whether the five factors are entirely disjunctive, such that the test is met if any one factor is met, or whether the last factor (“or otherwise control”) is merely disjunctive of the fourth factor (“supervision”), such that the first three factors (“hire, pay, fire”) must always be met.
In the absence of specific, clear, and relevant statutory or regulatory definitions, USCIS has interpreted these terms consistent with its understanding of current common law. In 2010, USCIS provided clarifying policy guidance regarding the employer-employee regulation and factors based on the common law that USCIS officers should consider when adjudicating H-1B
USCIS interprets the term “employer-employee relationship” to be the “conventional master-servant relationship as understood by common-law agency doctrine.”
Foremost, in addition to restoring through this rule the longstanding policy that USCIS has applied until recently but had rescinded in order to reduce the potential for additional APA-based litigation, the revised regulation will make clear that USCIS will assess and weigh all relevant aspects of the relationship.
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While the new regulation will clarify the employer-employee relationship test, it is largely consistent with past USCIS policy and practice and the standard familiar to USCIS officers and H-1B petitioners.
The 2010 memorandum contained another potentially confusing or inaccurate statement in footnote 6 that the employer-employee relationship “hinges upon the right to control.” USCIS now believes that this statement places an undue emphasis on the right to control and that the best interpretation of existing case law is that
In determining whether a hired party is an employee under the general common law of agency, we consider the hiring party's right to control the manner and means by which the product is accomplished.
While the first sentence suggests that the test is right to control, the second sentence suggests that right to control is one of many factors, rather than the test. Further, in
DHS believes that this clarification of “right to control” as one factor rather than a determinative factor is not a clear departure from the way USCIS has generally applied the common law test over many years. While the rescinded 2010 memorandum indicated that the determination hinges on the right to control, the analysis has always required an evaluation of the totality of the facts involved, including, in part, the degree to which the petitioner exercises actual control over the beneficiary's work. Some officers have placed more weight on the relevance of the actual control exercised, or to be exercised, when making the determination. For example, various Administrative Appeals Office (AAO) non-precedent decisions, citing the rule established in
Although the 2010 memorandum states that the “employer-employee relationship hinges on the
Accordingly, as reflected on the USCIS website in the 2018 clarification, whether the petitioner actually controls the beneficiary's employment has been an important factor in the overall analysis.
Therefore, DHS believes that this provision will not represent a clear change in longstanding past practice.
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DHS recognizes that, as a general principle of law, a corporation is a separate legal entity from its shareholders.
USCIS considered alternatives for defining the term “employer[,]” including revising the current regulatory definition to delete and replace the disjunctive “or” with “and[,]” or listing the common law factors verbatim from existing case law. USCIS declined to simply delete and replace the disjunctive “or[,]” and otherwise retain the current regulation, as it fails to provide the same level of clarification and guidance as the new definition listing factors relevant to employer-employee relationship determinations, including those where the beneficiary has an ownership interest in the petitioner. USCIS also declined simply to cite to the existing case law or list the factors verbatim from the existing case law. USCIS believes that its officers and H-1B petitioners are most familiar with the general factors as articulated in the rescinded 2010 policy memorandum. USCIS seeks to restore the policy that has guided H-1B adjudications of this issue for more than a decade, with certain changes for added clarity, and believes that the definition in this interim final rule best accomplishes that goal with the least amount of potential disruption for USCIS officers and H-1B petitioners. USCIS rescinded the 2010 policy memorandum because of a recent court decision finding the memorandum, as applied, imposed a substantive rule that departs from the existing regulation, thereby failing to comply with the APA's rulemaking requirements. This interim final rule will restore the policy as articulated in the 2010 memorandum, with additional clarifications, in compliance with the APA.
DHS recognizes that some petitioners may have developed a reliance interest based on H-1B adjudications subsequent to the June 2020 rescission of the 2010 policy memorandum. DHS believes, however, that the reliance interest some petitioners may have based on recent adjudications does not outweigh the importance of restoring guidance, with additional clarification, that has existed since 2010 and on which USCIS officers and H-1B petitioners have relied to assess eligibility for H-1B classification. The disjunctive wording of the current regulation is confusing for USCIS officers and H-1B petitioners alike, and DHS believes that any reliance interest that may have developed in the short time since June 2020 should yield to restoring guidance that is more detailed and less ambiguous for all involved in the H-1B program.
Pursuant to section 101(a)(15)(H)(i)(b) of the INA, 8 U.S.C. 1101(a)(15)(H)(i)(b), an H-1B nonimmigrant must be coming temporarily to the United States to perform services in a specialty occupation. USCIS interprets this statutory provision to require that the petitioner must actually have work in the specialty occupation listed in the H-1B petition available for the beneficiary as of the start date of intended employment. Therefore, DHS is making it clear at new 8 CFR 214.2(h)(4)(iv)(C) that the petitioner must establish, at the time of filing, that it has actual work in a specialty occupation available for the beneficiary as of the start date of the validity period as requested on the petition. New 8 CFR 214.2(h)(4)(iv)(C) complements the revised definition of “United States employer” at new 8 CFR 214.2(h)(4)(ii) requiring evidence of a bona fide, non-speculative job offer. Read together, both new provisions reinforce that speculative employment is not permitted in the H-1B program. As stated earlier, USCIS cannot reasonably ascertain whether the beneficiary will be employed in a specialty occupation if the employment is speculative.
Importantly, new 8 CFR 214.2(h)(4)(iv)(C) clarifies the types of corroborating evidence petitioners must submit in third-party placement cases. Based on USCIS' program experience, petitioners who regularly place their workers at third-party worksites often submit uncorroborated statements describing the role the H-1B beneficiary will perform at the third-party worksite. Such statements, without additional evidence, are generally insufficient to establish by a preponderance of the evidence that the H-1B beneficiary will actually perform work in a specialty occupation. Moreover, such uncorroborated statements are generally insufficient to establish that the petitioner will have and maintain an employer-employee relationship while the beneficiary works at the third-party worksite.
If submitting contracts, the petitioner should include both the master services agreement and the accompanying work order(s), statement(s) of work, or other similar legally-binding agreements under different titles. These contracts should be signed by an authorized official of the third-party entity that will use the beneficiary's services. In general, the master services agreement (also commonly called a supplier agreement) sets out the essential contract terms and provides the basic framework for the overall relationship between the parties.
Further, in cases where the beneficiary is staffed to a third-party, the submitted corroborating documents should generally demonstrate the requirements of the position as imposed by the third-party entity (commonly referred to as the “end-client”) that will use the beneficiary's services. As noted in
Finally, new 8 CFR 214.2(h)(4)(iv)(C) will also state that, in accordance with 8 CFR 103.2(b) and 214.2(h)(9), USCIS may request copies of contracts, work orders, or other similar corroborating evidence on a case-by-case basis in all cases, regardless of where the beneficiary will be placed. While USCIS already has general authority to request any document it deems necessary, this additional provision will make it clear that USCIS has authority to specifically request contracts and other similar evidence. This provision will apply to any H-1B petition, including a petition where the petitioner indicates that the beneficiary will exclusively work in-house. For example, if a petitioner indicates that the beneficiary will develop system software for a client but will perform such work exclusively at the petitioner's premises, USCIS may request a copy of the client contract or other corroborating evidence to confirm that the relevant work exists to ensure that the beneficiary will be employed in a specialty occupation.
While DHS recognizes that third-party arrangements may generally be part of a legitimate business model, this business model presents more challenges in the context of the H-1B program and USCIS' ability to better ensure eligibility and compliance. Accordingly, DHS will
Although the maximum period of authorized admission for an H-1B nonimmigrant has been established by Congress in section 214(g)(4) of the INA, 8 U.S.C. 1184(g)(4), Congress did not specify the validity period for an approved H-1B visa petition. Congress authorized DHS to promulgate regulations setting the validity period, including a range of validity periods not to exceed the maximum period of authorized admission.
DHS believes that the 1-year limit is reasonable given the nature of third-party placements. In general, the nature of contracting work leads to beneficiaries being more transient, as well as greater potential for changes to the terms and conditions of employment. Specifically, these are situations where the petitioner is not the end-user of the H-1B worker's services, and the beneficiary performs work for another entity at that other entity's worksite. DHS believes that enhanced monitoring of compliance is valuable and needed to ensure that the beneficiary is being employed consistent with the terms and conditions of the petition approval.
DHS considered an alternative of limiting validity periods only when the beneficiary would “primarily” work at a third-party worksite. DHS believes that this alternative would allow petitioners to easily avoid the limited validity period provision. For example, if “primarily” were defined to mean more than half of the time, the petitioner could claim that a beneficiary would not work 51% of the time (and thus not “primarily”) at a third-party worksite to circumvent this limitation. This would undermine the effectiveness of the rule. It would also create additional burdens on DHS in that it would require adjudicators to review and evaluate evidence regarding where a beneficiary would “primarily” be placed. Further, DHS believes that excluding any location that would not require an LCA from the definition of “worksite” provides sufficient flexibility in the application of this rule.
DHS believes that limiting approvals for third-party placement petitions to a maximum of 1 year will allow the agency to more consistently and thoroughly monitor a petitioner's and beneficiary's continuing eligibility, including whether the beneficiary has maintained H-1B status, whether the beneficiary's position remains a specialty occupation (
DHS believes that fraud and abuse is more likely to occur in cases involving third-party placements, as evidenced by the higher rate of noncompliance in those cases. Noncompliance is determined when an immigration officer conducts a compliance review to ensure that the petitioner (employer) and beneficiary (job applicant or other potential employee) follow the terms and conditions of their petition.
When approving an H-1B petition involving third-party placement, USCIS will generally consider granting the maximum validity period of 1 year, barring a separate consideration consistent with the controlling statutes and DHS regulations (such as the beneficiary reaching the 6-year maximum period of authorized admission pursuant to section 214(g)(4) of the INA, and not being eligible for an exemption from that 6-year limit) compelling a shorter approval period. This general practice will have the added benefit of providing petitioners who provide sufficient evidence a degree of certainty with respect to what validity period to request and to expect, if approved. If a petitioner indicates in the H-1B petition or LCA that the beneficiary will be working at a third-party worksite, then the maximum validity period the petitioner should request is 1 year. And if USCIS approves such petition for the maximum period of 1 year after making a determination that the petitioner has met its burden of proof, then there should be no reason to dispute the length of the validity period since it is set by regulation.
As with any petition requesting an extension of stay, a petition requesting a 1-year extension of stay for a beneficiary who will work at a third-party worksite may be accompanied by either a new, or a photocopy of the prior, LCA from DOL that the petitioner continues to have on file, provided that the LCA is still valid for the period of time requested and properly corresponds to the petition.
DHS recognizes that new 8 CFR 214.2(h)(9)(iii)(A)(
DHS is amending its regulations to require its issuance of a brief explanation when an H-1B nonimmigrant petition is approved but USCIS grants an earlier end validity date than requested by the petitioner.
DHS is revising the itinerary requirement at 8 CFR 214.2(h)(2)(i)(B) (for service or training in more than one location) to specify that this particular provision will not apply to H-1B petitions.
Pursuant to its general authority under sections 103(a) and 287(b) of the INA, 8 U.S.C. 1103(a) and 1357(b), and 8 CFR 2.1, USCIS conducts inspections, evaluations,-verifications, and compliance reviews to ensure that an alien is eligible for the benefit sought and that all laws have been complied with before and after approval of such benefits. These inspections and other compliance reviews may be conducted telephonically or electronically, as well as through physical on-site inspections (site visits). The existing authority to conduct inspections is vital to the integrity of the immigration system as a whole, including the H-1B program specifically, and protecting American workers. In this rule, DHS is adding regulations specific to the H-1B program to codify its existing authority and clarify the scope of inspections—particularly on-site inspections—and the consequences of a petitioner's or third party's refusal or failure to fully cooperate with these inspections.
In 2008, USCIS conducted a review of 246 randomly selected H-1B petitions filed between October 1, 2005, and March 31, 2006, and found violations ranging from “document fraud to deliberate misstatements regarding job locations, wages paid, and duties performed” in 20.7 percent of the cases reviewed.
In addition, beginning in 2017, USCIS began taking a more targeted approach in conducting site visits related to the H-1B program. USCIS started focusing on H-1B-dependent employers (those who have a high ratio of H-1B workers as compared to U.S. workers, as defined in section 212(n) of the INA), cases in which USCIS cannot validate the employer's basic business information through commercially available data, and employers petitioning for H-1B workers who work off-site at another company or organization's location.
The site visits conducted by USCIS through the Administrative Site Visit and Verification Program have uncovered a significant amount of noncompliance in the H-1B program. From Fiscal Year (FY) 2013 through FY 2016, USCIS conducted 30,786 H-1B compliance reviews. Of those, 3,811 (12 percent) were found to be noncompliant.
Site visits are important to maintaining the integrity of the H-1B program and in detecting and deterring fraud and noncompliance with H-1B program requirements.
The new regulation also states that, if USCIS is unable to verify facts related to an H-1B petition or to compliance with H-1B petition requirements due to the failure or refusal of the petitioner or third-party to cooperate with a site visit,
In addition, with respect to a failure or refusal to cooperate by a third-party, DHS believes this provision is reasonable because the third-party is benefiting from the services performed by the H-1B worker at its location. The third-party should not be permitted to benefit from the services performed by the H-1B worker if it simultaneously refuses to allow DHS access to verify that those services are being performed in accordance with the law. Additionally, if this provision did not apply to third-party worksites, such that a third-party's failure to cooperate with a site visit could not be grounds for denial or revocation, then this would create an unfair loophole with respect to third-party worksites, which could be exploited by unscrupulous petitioners and undermine the integrity of the H-1B program.
As with all other new provisions in this interim final rule, new 8 CFR 214.2(h)(4)(i)(B)(
Finally, DHS has added a clause to clarify its intent with respect to the provisions being amended or added by this rule; DHS intends that all the provisions covered by this rule function separately from one another and be implemented as such. Therefore, in the event of litigation or other legal action preventing the implementation of some aspect of this rule, DHS intends to implement all others to the greatest extent possible.
The COVID-19 pandemic is an unprecedented “economic cataclysm.”
Accordingly, this rule is being issued without prior notice and opportunity to comment pursuant to 5 U.S.C. 553(b)(B). The Administrative Procedure Act (APA), 5 U.S.C. 551
The pandemic emergency's economic impact is an “obvious and compelling fact” that justifies good cause to forgo regular notice and comment. Such good cause is “justified by obvious and compelling facts that can be judicially noticed.”
The reality of the COVID-19 national emergency is omnipresent and
On January 31, 2020, the Secretary of Health and Human Services declared a public health emergency under section 319 of the Public Health Service Act in response to COVID-19.
H-1B workers comprise a much larger share of the U.S. labor market than the 65,000 annual numerical limitations and therefore have the potential to impact the availability of job opportunities for similarly situated U.S. workers who may be competing for jobs with H-1B workers as well as their wages and working conditions, particularly in industries where H-1B workers are predominantly employed. In recent years, the overwhelming majority of H-1B petitions have been filed for positions in the one industry, the IT industry—the share of H-1B workers in computer-related occupations grew from 32 percent in FY 2003 to 56 percent in FY2019.
The changes being made through this rule clarify statutory requirements and limit the potential for fraud and abuse in the H-1B program, thereby protecting the wages, working conditions, and job opportunities of U.S. workers, while continuing to provide U.S. employers with access to qualified workers consistent with congressional intent. Namely, this rule clarifies the requirements for petitioners to prove that H-1B workers will be employed in a specialty occupation, as required by 8 U.S.C. 1182(i). This requirement is
Courts have found “good cause” under the APA when an agency is moving expeditiously to avoid significant economic harm to a program, program users, or an industry. For example, an agency may rely upon the good-cause exception to address “a serious threat to the financial stability of [a government] benefit program,”
Here, delay in responding to the COVID-19 economic emergency and its cataclysmic unemployment crisis threatens a “weighty, systemic interest” that this rule protects: Ensuring the employment of H-1B workers is consistent with the statutory requirements for the program and thus is not disadvantaging U.S. workers.
Furthermore, the relatively limited scope of this rule also conforms it to the proper application of the “good cause” exception. First, this rule operates as an interim rule, not yet a final rule, and thus may be subject to change in the future. “[T]he interim status of the challenged rule is a significant factor” favoring the good cause “determination.”
Therefore, consistent with the above authorities, the Department is bypassing notice and comment requirements of 5 U.S.C. 553(b) and (c) to urgently respond to the COVID-19 resulting economic crises, including high unemployment. Instead of amending its regulations through notice and comment rulemaking which is generally a lengthy process, DHS is taking post-promulgation comments and providing a 60-day delayed effective date to ensure that the regulated public has advanced notice to adjust to these regulatory changes.
Executive Orders (E.O.) 12866 and 13563 direct agencies to assess the costs, benefits, and transfers of available 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. Pursuant to E.O. 12866 (Regulatory Planning and Review), the Office of Information and Regulatory Affairs (OIRA), of the Office of Management and Budget has determined that this is an economically significant regulatory action. However, OIRA has waived review of this regulation under E.O. 12866, section 6(a)(3)(A).
DHS is amending its regulations governing H-1B specialty occupation nonimmigrant workers in this interim final rule. DHS is implementing a number of revisions and clarifications to better ensure that each H-1B nonimmigrant worker will be working for a qualified petitioner and in a job which meets the statutory definition of specialty occupation, and to help protect the wages and working conditions of U.S. workers while improving the integrity of the H-1B program. This interim final rule amends the relevant sections of DHS regulations to reflect these changes.
For this analysis, DHS uses the term “H-1B petition” or “Form I-129 H-1B” to generally refer to the historical
For the 10-year implementation period of the rule (FY2021 to FY2030), DHS estimates the annual net societal costs to be $51,406,937 (undiscounted) in FY2021, $416,212,496 (undiscounted) in FY2022, $541,795,976 (undiscounted) from FY2023 to FY2027 each year, $388,592,536 (undiscounted) from FY2028 to FY2030 each year. DHS estimates the annualized net societal costs of the rule to be $430,797,915, annualized at 3-percent and $425,277,621, annualized at 7-percent discount rates.
Table 1 provides a detailed summary of the regulatory changes and their impacts.
In addition to the impacts summarized above, Table 2 presents the accounting statement and as required by Circular A-4.
The H-1B nonimmigrant visa program helps U.S. employers meet their business needs by temporarily employing foreign workers in specialty occupations. A specialty occupation is defined as an occupation that requires (1) theoretical and practical application of a body of highly specialized knowledge, and (2) the attainment of a bachelor's degree (or higher) in the specific specialty (or its equivalent) as a minimum qualification for entry into the occupation in the United States.
As discussed in detail in the preamble, the purpose of the changes in the rule is to better ensure that each H-1B nonimmigrant worker will be working for a qualified petitioner and in a job that meets the statutory definition of specialty occupation. Additionally, the changes help strengthen the integrity of the H-1B program and better ensure that visas are only awarded to qualified beneficiaries and petitioners.
DHS is amending its regulations governing H-1B specialty occupation workers by providing revisions and clarifications that will better align the regulations with Congressional intent and will strengthen the integrity of the H-1B program. DHS is making the following amendments to the H-1B regulations through this interim final rule:
(a) Revising the regulatory definition and criteria for determining whether the job the H-1B beneficiary will be employed in is in a specialty occupation, so they align more closely with the statutory definition of the term;
(b) Requiring corroborating evidence of work in a specialty occupation;
(c) Codifying in regulations existing authority to conduct site visits and other compliance reviews, and consequences for failure to allow a site visit; and
(d) Eliminating the general itinerary requirement for H-1B petitions.
(e) Limiting maximum validity period for third-party placements;
(f) Providing a written explanation for certain H-1B approvals.
In the sections that follow, DHS discusses the quantified economic impacts of each provision listed above except for provision f) which has no quantifiable economic impact. Provision f) is qualitatively discussed in benefits section vi.
In order to estimate the economic effects of this interim final rule, DHS forecasts the affected population for the ten-year period from the beginning of fiscal year (FY) 2021. The affected population is defined as the annual population of Form I-129H1
The historical number of H-1B petitions is summarized in Table 3 below. In each year between FY2015 and FY2019, DHS received between 123,203 and 141,190 initial H-1B petitions, with an annual average of 133,451 initial petitions received. In addition, DHS received between 235,566 and 279,946 H-1B extension petitions, with an annual average of 268,405 extension petitions received. Ignoring macroeconomic effects and any effects of this interim final rule, DHS does not expect the number of initial petitions approved to trend upwards or downwards. This is borne out in the data: Neither the annual number of initial petitions nor the annual number of extension petitions exhibit a trend; both series rise and fall over the five-year historical period. Absent changes in macroeconomic conditions and changes due to this interim final rule, DHS would expect similar numbers in FY2021 to FY2030.
The number of H-1B petition submissions is partially dependent on macroeconomic conditions. For example, a drastic improvement in U.S. economic conditions may result in higher demand from U.S. employers for H-1B specialty occupation workers. DHS acknowledges future uncertainty surrounding the impacts of the COVID pandemic on the U.S. economy but does not expect this to significantly alter the affected population described. Consequently, the impacts of this interim final rule are evaluated based on an assumed continuation of the conditions observed in the historical data period (FY2015-2019) over the projected period (FY2021-2030). Thus, DHS does not incorporate any macroeconomic changes in its population forecast.
Finally, the number of H-1B petitions may also change due to behavioral responses to provisions in the interim final rule. For example, provisions that increase filing costs may discourage potential petitioners from filing, and provisions that decrease the term of the H-1B validity period may result in increased filings by the same petitioners. DHS examined each of the provisions and determined that one provision would materially change the filing behavior of potential petitioners: This interim final rule will reduce the maximum validity period for third-party placement to one year compared to the three-year current maximum validity period. This provision will result in more petitions from petitioners with beneficiaries who work at third-party worksites. DHS incorporates this increase in its FY2021-2030 forecasts of the affected population. A detailed discussion of this provision's effect on the forecasted population of petition is provided in the corresponding cost analysis subsection.
DHS acknowledges that changes to the H-1B program may impact dependent H-4 nonimmigrants. DHS is unable to quantify the number of H-1B workers that will be ineligible or no longer apply for a visa due to this interim final rule and is therefore unable to quantify the costs to the dependent H-4 nonimmigrants. H-1B nonimmigrant workers who are the beneficiaries of petitions that are denied as a result of the petitioner's failure to establish eligibility or noncompliance with the changes made by this rule would be required to seek eligible employment to avoid additional impacts to their dependents.
DHS acknowledges that some industries may be affected more than others. According to FY2019 Annual Report to Congress,
Table 4 shows the number of receipts, approvals, and denials for all Form I-129 H-1B petitions including initials and extensions from FY2015 to FY2019.
To determine the cost of preparing and filing a petition, DHS assumes that petitioners may use human resources (HR) specialists (or others that provide equivalent services) (hereafter HR specialist) or use lawyers or accredited representatives
Petitioners who use lawyers or accredited representatives to complete and file Form I-129 H-1B petitions may either use an in-house lawyer or hire an outsourced lawyer.
Among those working in private law firms and private businesses (55 and 26.2 percent, respectively), DHS estimates that while 67.7 percent of lawyers practice law in private law firms, the remaining 32.3 percent practice in private businesses (55 percent + 26.2 percent = 81.2 percent, 67.7 percent = 55/81.2 *100, 32.2 percent = 26.2/81.2*100). Because 74 percent of the H-1B petitions are filed by lawyers or accredited representatives, DHS multiplies 74 percent by 32.3 and 67.7 percent to estimate the proportion of petitions filed by in-house lawyers (working in private businesses) and outsourced lawyer (working in private law firms), respectively.
24 (rounded) percent of petitions filed by in-house lawyers = 74 percent of petitions filed by lawyers or accredited representatives × 32.3 percent of lawyers work in private businesses.
50 (rounded) percent of petitions filed by in-house lawyers = 74 percent of petitions filed by lawyers or accredited representatives × 67.7 percent of lawyers work in private law firms.
DHS uses the estimates derived from the historical data shown in tables 4 and 5 to estimate the baseline population. Accordingly, the baseline population consists of 401,856 Form I-129 H-1B petitions received annually, which is disaggregated into the percent of Form I-129 H-1B petitions filed by HR specialists (26 percent), in-house lawyers (24 percent), or outsourced lawyer (50 percent). Additionally, DHS uses these percentage shares to disaggregate the 306,898 H-1B petitions approved annually. For each provision, DHS further estimates the subpopulation that is affected by that particular provision using the same proportion of HR specialist, in-house lawyer, and outsourced lawyer. These estimates are detailed in the separate provision discussed in the cost analysis of this interim final rule.
As discussed above, DHS forecasts an increase in the affected population due to the new interim final rule. Table 7 below summarizes this increase for FY2021-FY2030. The forecasted increase is discussed in detail in section “Limiting maximum validity period for third-party placements.”
As previously discussed, DHS assumes that a petitioner will use an HR specialist, in-house lawyer, or outsourced lawyer to complete and file Form I-129H1 petitions.
For petitioners filing Form I-129 H1, DHS calculates the average total rate of compensation as $47.57 per hour for an HR specialist, where the average hourly wage is $32.58 per hour worked and average benefits are $14.99 per hour.
In the current filing process, an employer petitioning on behalf of an H-1B specialty occupation worker must complete and file Form I-129H1. The filing fee for Form I-129H1 is $555 per petition and the time burden to review instructions and complete and submit Form I-129H1 is 4.0 hours per petition.
Public Law 114-113 requires payment of $4,000 for certain H-1B petitions filed by employers that meet the statute's 50 employee/50 percent test. The Fee Schedule Final Rule, if it takes effect, would extend applicability of the Public Law 114-113 fee, such that it would be required for all H-1B petitions filed by those employers, unless the petition is an amended petition without an extension of stay request.
DHS applies a fraud prevention and detection fee of $500 to certain H-1B petitions.
DHS also applies the American Competitiveness and Workforce Improvement Act (ACWIA) fee.
Table 10 shows the total annual cost of filing Form I-129 H-1B using the historical data on petitions received for FY2015 to FY2019. The baseline population is estimated using the 5-year average of the annual number of H-1B petitions received from FY2015 to FY2019 (401,856) in Table 4. Various fees are applied to the proportion of the baseline population as described in Table 9. DHS estimates the total annual cost under current regulation is $1,331,915,275, or an average of $3,314 per petition received. This baseline cost per petition received is applied to the baseline population for FY2021 to FY2027.
DHS estimates the total annual additional costs of the regulatory changes or cost savings from the regulatory changes. DHS presents each of these costs/cost savings separately in sections that follow.
The interim final rule changes the requirements governing the petitioning process for H-1B specialty occupation workers, which will result in additional costs for petitioners. The additional costs include increase in time burden of completing and filing an H-1B petition, submitting contractual documents, work orders, or similar documentary evidence if the beneficiary will work at a third-party worksite, requesting authorization to continue H-1B employment beyond 1 year for a subset of petitioners, codifying existing authority for conducting worksite inspections, and clarifying petition denials or revocations for failure to cooperate with a site inspection. In addition, the interim final rule will eliminate the general itinerary requirement for H-1B petitions which will result in cost savings for petitioners.
The additional cost and cost savings discussed above reflect changes to per petition costs. In addition, the interim final rule will also increase the affected population. To better illustrate the effects of each provision, DHS disentangles the effects of changes in per-petition costs from the effects of changes in the affected population. This is illustrated in the Diagram 1 below.
DHS is amending its regulations governing H-1B specialty occupation workers by making a number of revisions and clarifications to strengthen the integrity of the H-1B program, thereby better protecting the wages and working conditions of U.S. workers. DHS is amending Form I-129H1, which must be filed by petitioners on behalf of H-1B beneficiaries, in order to align them with the regulatory changes DHS is making in the interim final rule. The changes to Form I-129H1 will result in an increased time burden to complete and submit the form.
As discussed, the current estimated time burden to complete and file Form I-129H1 takes a total of 4.0 hours per petition.
To estimate the additional cost of filing due to changes in Form I-129H1 petitions, DHS applies the additional estimated time burden to complete and file Form I-129H1 (0.583 hours) to the respective total population and compensation rate of who may file, including an HR specialist, in-house lawyer, or outsourced lawyer.
The total affected population for this provision is the number of petitions, including both initial and continuing petitions, for FY2021-2030. The total affected population for FY2021-2030 is estimated using the 5-year average of the annual number of H-1B petitions received for FY2015-FY2019, as listed in Table 4. Although the provision's increase in time burden may affect the total affected population, DHS believes that any effect would be de minimis: The estimated cost of the additional 30 minutes of time burden per petition is $62,
As shown in Table 11, DHS estimates the total additional annual cost to petitioners of completing and filing Form I-129H1 petitions will be approximately $24,949,861, or an average of $62 per petition received.
Petitioners who regularly place their workers at third-party worksites often submit uncorroborated statements describing the role the H-1B beneficiary will perform at the third-party worksite. Such statements by the petitioner, without additional corroborating evidence, are generally insufficient to establish by a preponderance of the evidence that the H-1B beneficiary will actually perform specialty occupation work, and that the petitioner will have an employer-employee relationship with the beneficiary. Therefore, where a beneficiary will be placed at one or more third-party worksites, DHS will require the petitioner to submit evidence such as contracts, work orders, or other similar evidence to establish that the beneficiary will perform services in a specialty occupation at the third-party worksite(s), and that the petitioner will have an employer-employee relationship with the beneficiary.
DHS estimates the time burden required to gather and submit corroborating evidence (such as contracts, work orders, or similar evidence) for petitioners with third-party worksite beneficiaries. DHS notes that corroborating evidence will have to be detailed enough to provide a sufficiently comprehensive view of the work available, and the terms and conditions under which the work will be performed at the third-party worksite. Since these petitioners will generally need to provide more documentation than petitioners who do not seek to employ H-1B workers at third-party worksite locations, DHS estimates the time burden for petitioners will be approximately 1 hour to gather and submit these documents as required under this interim final rule.
Since the terms “worksite” and “third-party worksite” are referenced in the new regulations, this interim final rule defines these terms. For example, the new regulation defining an employer-employee relationship refers to the “worksite” where the beneficiary will be employed as a relevant factor. The term “off-site” used on the Form I-129 H-1B has the same meaning as “third-party worksite.”
Based on DHS' previous estimate of the average annual total number of receipts of Form I-129 H-1B petitions (401,856), we estimate that approximately 144,668 petitions would be filed requesting workers to be placed at third-party worksites.
To estimate the effect of this provision in conjunction with other provisions that change the forecasted population, DHS calculates the cost of this provision on a per-petition-received basis. The annual cost of this provision, divided amongst the entire population of received petitions, would average out to approximately $45 per received petition.
Although the provision's increase in time burden may affect the total affected population, DHS believes that any effect would be de minimis: The estimated cost of the additional one hour of time burden per petition involving third-party worksites is $124,
Using its general authority, USCIS may conduct audits, on-site inspections, compliance reviews, or investigations to help verify a petitioner's and beneficiary's H-1B eligibility and better ensure that all laws have been complied with before and after approval of such benefits.
To be clear, USCIS has historically conducted site visits and has had the authority to deny or revoke petitions for reasons including noncompliance with a site visit request. However, the authority to conduct a site visit is not currently codified in CFR for the H-1B program. Since this interim final rule newly codifies this authority, DHS quantitatively estimates the costs associated with conducting site visits. Also, the provision delineates that failure or refusal to cooperate with a site visit request and allow USCIS to verify facts may result in denial or revocation. DHS considers this part of the provision as a clarification to existing regulations
In July 2009, USCIS started the Administrative Site Visit and Verification Program (ASVVP)
Site visits conducted by USCIS have uncovered noncompliance in the H-1B program. From FY 2013 to 2016, USCIS conducted 30,786 H-1B compliance reviews, of which 3,811 (12.4 percent) were found to be noncompliant.
DHS seeks to ensure that the H-1B program is used appropriately and the interests of U.S. workers are protected. Hence, the interim final rule codifies in regulation USCIS' existing authority to conduct site visits and other compliance reviews and will make clear that inspections and other compliance reviews may include, but are not limited to, worksite visits including petitioners' headquarters, satellite locations, or third-party worksites, and interviews or review of records, as applicable.
The interim final rule will also clarify the consequences of a petitioner's or third party's refusal or failure to cooperate with these inspections. This interim final rule will make clear that inspections may include, but are not limited to, a visit of the petitioning organization's facilities, interviews with its officials, review of its records related to compliance with immigration laws and regulations, and interviews with any other individuals or review of any other records that USCIS considers pertinent to the petitioner's H-1B eligibility and compliance.
In order to estimate the population impacted by site visits, DHS uses historical site inspection data. The site inspections were conducted at Form I-129 H-1B petitioners' on-site locations and third-party worksites from FY2015 to FY2019. Table 14 shows the number of worksite inspections conducted each year and the average duration of time for conducting each worksite inspection. During this period, the annual number of worksite inspections has increased each year and ranged from a low of 4,413 in FY2015 to a high of 10,384 in FY2019.
The number of worksite inspections does not depend on the number of H-1B petitions received. It depends on DHS resources to conduct the site visits. DHS uses the highest annual number of worksite inspections in past five years (10,384 in FY2019) as the estimated annual population of worksite visits for the next 10 years. DHS also uses 1.23 hours from FY2019 historical data for the estimated duration for worksite inspection, which includes interviewing the beneficiary, the on-site supervisor or manager and other workers, as applicable, and reviewing all records pertinent to the H-1B petitions available to USCIS when requested during inspection.
DHS assumes that a supervisor or manager would be present on behalf of a petitioner while a USCIS immigration officer conducts the worksite inspection in addition to the beneficiary. The beneficiary would be interviewed to verify the date employment started, work location, hours, salary, or other terms of employment, to corroborate the information provided in an approved petition. The supervisor or manager would be the most qualified employee at the location who could answer all questions pertinent to the petitioning organization and its H-1B nonimmigrant workers. They would also be able to gather and provide the proper records considered pertinent to USCIS immigration officers. Consequently, for the purposes of this economic analysis, DHS assumes that on average two individuals will be interviewed during each worksite inspection: The beneficiary and the supervisor or manager. DHS uses their respective compensation rates in the estimation of the worksite inspection costs.
DHS uses hourly compensation rates to estimate the opportunity cost of time a beneficiary and supervisor or manager would incur during worksite inspections. Based on data obtained from a USCIS report for Fiscal Year 2019, DHS estimates that an H-1B worker earned an average of $107,000 per year, or $51.44 hourly wage in FY 2019.
In Table 15, DHS estimates the total annual opportunity cost of time for worksite inspections of H-1B petitions by multiplying the average annual number of worksite inspections (10,384) by the average duration the interview would take for a beneficiary (0.49) or supervisor or manager (0.74) and their respective compensation rates. DHS obtains the total annual cost of the H-1B worksite inspections to be $1,042,702 for this provision.
If USCIS decides to conduct a pre-approval inspection, satisfactory completion of such inspection will be a condition for approval of any petition. In this interim final rule, it may be grounds for denial or revocation of any H-1B petition for H-1B workers performing services at the location or locations which are subject of inspection, including any third-party worksites, if USCIS is unable to verify relevant facts due to failure or refusal of the petitioner or third-party worksite parties to cooperate in a site visit.
DHS notes that the site visit provision could create an incentive for employers to cooperate, and to provide further evidence to support the Form I-129 H-1B petition, for an adjudicative decision. The new provision will notify petitioners of the specific consequences for noncompliance, whether by them or by officials at the third-party worksite. If USCIS conducts a site visit in order to verify facts related to the H-1B petition, including whether the beneficiary is being employed consistent with the terms of the petition approval, then DHS believes that it would be reasonable to conclude that the petitioner will not have met its burden of proof and the petition may be properly denied or revoked if USCIS is unable to verify relevant facts to determine compliance or because of failure or refusal to comply with the site inspection. This would be true whether the unverified facts relate to a petitioner worksite or a third-party worksite at which a beneficiary has been or will be placed by the petitioner. It would also be true whether the failure or refusal to cooperate is by the petitioner or a third-party.
Current regulations require an itinerary with the dates and locations of the services to be provided if a Form I-129 H-1B petition indicates that the beneficiary will be performing services in more than one location.
DHS calculates economic impacts of this provision relative to the current regulation. Relative to the current regulation this provision reduces the cost for the petitioners who file on behalf of beneficiaries performing services in more than one location and submitting itineraries. However, due to the absence of detailed data on the number of petitioners who file on behalf of beneficiaries performing services in more than one location, DHS uses the number of petitions filed annually for workers placed at off-site locations as a proxy for petitioners with beneficiaries performing services in multiple locations. DHS assumes the petitions filed for workers placed at off-site locations are likely to indicate that beneficiaries will be performing services at multiple locations and, therefore, petitioners are likely to submit itineraries. DHS estimates that the number of petitions filed annually for workers placed at off-site locations who may submit itineraries using average number of petitions received annually from FY2015 to FY2019 and the proportion of off-site workers approved petitions. The estimated number of petitions filed annually for workers placed at off-site location is 144,668.
To estimate the effect of this provision in conjunction with other provisions that change the forecasted population, DHS calculates the cost savings of this provision on a per-petition-received basis. The annual cost savings of this provision, divided amongst the entire population of received petitions, would average out to approximately $11 per received petition.
DHS is amending the maximum validity period for a petition approved for workers placed at third-party worksites. Under current regulations at 8 CFR 214.2(h)(9)(iii), the maximum validity period an H-1B petition may be approved is “up to three years”. This interim final rule will limit the maximum validity period to 1 year for workers placed at third-party worksites.
DHS estimates the increase in petitions for FY2021 to FY2030 due to the reduction in maximum validity period. Although the maximum validity period for a specialty occupation worker is 3 years, the average validity period for approved H-1B beneficiaries is 28 months.
To determine the number of petitions under the current regulations, DHS uses the historical 5-year average number of petitions approved for FY2015 to FY2019 (306,898)
For FY2021 DHS estimates no additional increase in petitions due to this provision because any associated costs would occur at the end of the petition validity period when the petitioner seeks to file an extension petition. Any petition filed in FY2021 under the provision's maximum validity period of 12 months for workers placed at third party worksites would have otherwise been filed under the current regulations, which is up to 3 years. The baseline population already accounts for these petitions. The reduction in maximum validity period from 3 years to 12 months would increase the number of filed petitions starting 12 months after the effective date of this interim final rule, which would be in FY2022. Those petitions pending or approved prior to the effective date of this interim final rule would still be subject to the current regulation maximum validity period of 3 years, unless an amended petition is filed.
For FY2022, DHS estimates an additional 110,483 extension petitions due to this provision. These additional extension petitions would be filed by petitioners who had third-party worksite petitions filed in FY2021 that require an extension under the interim final rule's 12 month maximum validity period but would not have required an extension under the current 28 month average validity period.
For each year between FY2023 and FY2030, DHS estimates an additional 147,311 extension petitions due to this provision. These additional extension petitions represent the sum of 110,483 petitions filed in the previous fiscal year plus 36,828
DHS estimates the additional costs resulting from the population changes due to the limiting maximum validity period for third-party worksites using the forecasted increase in the number of petitions received as discussed above. The cost per additional petition is the sum of the baseline cost per petition received, additional annual cost per petition received for completing and
This provision's estimated annual increase in costs to petitioners is the product of the estimated additional population and estimated cost per petition received, both described above. Table 17 delineates these costs for each fiscal year between FY2021 and FY2030.
Familiarization costs comprise the opportunity cost of the time spent reading and understanding the details of a rule in order to fully comply with the new regulation(s). To the extent that an individual or entity directly regulated by the rule incurs familiarization costs, those familiarization costs are a direct cost of the rule. The entities directly regulated by this rule are the employers who file H-1B petitions. There were 48,084 unique employers who filed H-1B petitions in FY2019.
DHS presents the total annual estimated costs and cost savings annualized over a 10-year implementation period resulting from regulatory changes in this interim final rule. Table 19 shows the total annual cost of the rule to be $55,897,905 in FY2021, $420,703,464 in FY2022, $546,286,944 in each of FY2023 to FY2027, and $393,083,504 in each of FY2028 to FY2030 to the petitioners. DHS also estimates the total annual savings of the rule to petitioners to be $4,490,968. Therefore, the estimated total annual net costs to petitioners to be $51,406,937 in FY2021, $416,212,496 in FY2022, $541,795,976 in each of FY2023 to FY2027, and $388,592,536 in each of FY2028 to FY2030.
To compare costs over time, DHS applies a 3 percent and a 7 percent discount rate to the total estimated costs associated with this interim final rule. Table 20 shows the summary undiscounted and discounted total net costs to Form I-129H1 petitioners over a 10-year period. DHS estimates the 10-year total net cost of the rule to petitioners to be approximately $4,342,376,923 undiscounted, $3,674,793,598 discounted at 3-percent, and $2,986,972,052 discounted at 7-percent. Over the 10-year implementation period of the rule, DHS estimates the annualized costs of the rule to be $430,797,915 annualized at 3-percent, $425,277,621 annualized at 7-percent.
E.O. 13771 directs agencies to reduce regulation and control regulatory costs. This interim final rule is considered an E.O. 13771 regulatory action. DHS estimates the total cost of this rule is $292,051,988 annualized using a 7
DHS is revising the regulations to require issuance of a brief explanation when an H-1B nonimmigrant petition is approved, but the validity period end date is earlier than the end date requested by the petitioner at the time of filing. The cost for providing a written explanation of the rationale for limiting the approval validity end date in such cases will be borne by USCIS.
The INA provides for the collection of fees at a level that will ensure recovery of the full costs of providing adjudication and naturalization services by DHS, including administrative costs and services provided without charge to certain applicants and petitioners.
This rule specifies the conditions under which DHS intends to implement the changes in the current rule regarding petitions for H-1B specialty occupation workers filed using Form I-129H1. Although the H-1B program was intended to allow employers to fill gaps in their workforce and remain competitive in the global economy, it has in fact expanded far beyond that, often to the detriment of U.S. workers. As discussed above, the H-1B program has been used to displace U.S. workers, and has led to reduced wages in a number of industries in the U.S. labor market. In this interim final rule, DHS is implementing revisions and clarifications to ensure that each H-1B nonimmigrant beneficiary is working for a qualified petitioner and in a job meeting the statutory requirements of a specialty occupation. The benefits of each provision in the interim final rule is discussed in detail below.
DHS is updating Form I-129H1 for H-1B petitions to incorporate the regulatory changes in this interim final rule. Although this will result in petitioners incurring additional costs while filing H-1B petitions, USCIS can use the additional credible evidence requested in the H-1B petitions to potentially reduce the number of Requests for Evidence (RFEs) sent to petitioners, which ultimately would allow for more efficient and timely adjudication decisions.
Where a beneficiary will be placed at one or more third-party worksites, DHS will require the petitioner to submit evidence such as contracts, work orders, or other similar evidence to establish that the petitioner will have an employer-employee relationship with the beneficiary, and that the beneficiary will perform services in a specialty occupation at the third-party worksite(s). While USCIS already has general authority to request any document it deems necessary, this interim final rule states that USCIS may request copies of contracts, work orders, or other similar corroborating evidence on a case-by-case basis in all cases, regardless of where the beneficiary will be placed. This supporting evidence will allow USCIS to confirm that beneficiaries working at third-party worksites will have a valid employment relationship with the petitioner and will be performing qualifying specialty occupation services while working at the third-party worksite.
Based on the noncompliance uncovered by USCIS site visits,
DHS believes that limiting approvals for third-party placement petitions to a maximum of 1-year would allow the agency to more consistently and thoroughly monitor a petitioner's and beneficiary's continuing eligibility. DHS believes that limiting the validity period for petitions where beneficiaries are placed at third-party worksites, where fraud and abuse is more likely to occur, would also increase compliance with the regulations and improve the program's overall integrity. This general practice will have the added benefit of providing a degree of certainty to petitioners with respect to what validity period to request and to expect, if approved.
DHS will revise the regulations to require issuance of a brief explanation when an H-1B nonimmigrant petition is approved but USCIS grants an earlier validity period end date than requested by the petitioner. Providing a written explanation for limited validity period will help ensure that the petitioner is aware of the reason for shorter validity periods.
The Regulatory Flexibility Act of 1980 (RFA), 5 U.S.C. 605(b), as amended by the Small Business Regulatory Enforcement Fairness Act of 1996, Public Law 104-121 (March 29, 1996), requires Federal agencies to consider the potential impact of regulations on small entities during the development of their rules. “Small entities” are small businesses, not-for-profit organizations that are not dominant in their fields, and governmental jurisdictions with populations of less than 50,000. A regulatory flexibility analysis is not required when a rule is exempt from notice and comment rulemaking. This IFR is exempt from the notice and comment rulemaking, as stated in the Administrative Procedure Act (APA), 5 U.S.C. 551
The Unfunded Mandates Reform Act of 1995 (UMRA) is intended, among other things, to curb the practice of imposing unfunded Federal mandates on State, local, and tribal governments. Title II of UMRA requires each Federal agency to prepare a written statement assessing the effects of any Federal mandate in a proposed or final agency rule that may result in a $100 million or more expenditure (adjusted annually for inflation) in any one year by State, local, and tribal governments, in the aggregate, or by the private sector. The inflation-adjusted value equivalent of $100 million in 1995 adjusted for inflation to 2019 levels by the Consumer Price Index for All Urban Consumers (CPI-U) is approximately $168 million based on the Consumer Price Index for All Urban Consumers.
Calculation of inflation: (1) Calculate the average monthly CPI-U for the reference year (1995) and the current year (2019); (2) Subtract reference year CPI-U from current year CPI-U; (3) Divide the difference of the reference year CPI-U and current year CPI-U by the reference year CPI-U; (4) Multiply by 100 = [(Average monthly CPI-U for 2019 − Average monthly CPI-U for 1995)/(Average monthly CPI-U for 1995)] * 100 = [(255.657 − 152.383)/152.383] * 100 = (103.274/152.383) *100 = 0.6777 * 100 = 67.77 percent = 68 percent (rounded).
Calculation of inflation-adjusted value: $100 million in 1995 dollars * 1.68 = $168 million in 2019 dollars.
While this interim final rule may result in the expenditure of more than $100 million by the private sector annually, the rulemaking is not a “Federal mandate” as defined for UMRA purposes.
The Office of Information and Regulatory Affairs has determined that this interim final rule is a major rule as defined by 5 U.S.C. 804, also known as the “Congressional Review Act,” as enacted in section 251 of the Small Business Regulatory Enforcement Fairness Act of 1996, Public Law 104-121, 110 Stat. 847, 868
This interim final rule would not have substantial direct effects on the states, on the relationship between the National Government and the states, or on the distribution of power and responsibilities among the various levels of government. Therefore, in accordance with section 6 of Executive Order 13132, it is determined that this interim final rule does not have sufficient federalism implications to warrant the preparation of a federalism summary impact statement.
This interim final rule meets the applicable standards set forth in sections 3(a) and 3(b)(2) of Executive Order 12988.
This interim final rule does not have “tribal implications” because it does not have substantial direct effects on one or more Indian tribes, on the relationship between the Federal Government and Indian tribes, or on the distribution of power and responsibilities between the Federal Government and Indian tribes. Accordingly, E.O. 13175, Consultation and Coordination with Indian Tribal Governments, requires no further agency action or analysis.
DHS analyzes actions to determine whether the National Environmental Policy Act, Public Law 91-190, 42 U.S.C. 4321 through 4347 (NEPA), applies to them and, if so, what degree of analysis is required. DHS Directive 023-01 Rev. 01 (Directive) and Instruction Manual 023-01-001-01 Rev. 01,
The CEQ regulations allow federal agencies to establish, with CEQ review and concurrence, categories of actions (“categorical exclusions”) which experience has shown do not individually or cumulatively have a significant effect on the human environment and, therefore, do not require an Environmental Assessment (EA) or Environmental Impact Statement (EIS). 40 CFR 1507.3(b)(2)(ii), 1508.4. Categorical exclusions established by DHS are set forth in Appendix A of the Instruction Manual. Under DHS NEPA implementing procedures, for an action to be categorically excluded, it must satisfy each of the following three conditions: (1) The entire action clearly fits within one or more of the categorical exclusions; (2) the action is not a piece of a larger action; and (3) no extraordinary circumstances exist that create the potential for a significant environmental effect. Instruction Manual section V.B(2)(a)-(c).
This rule amends regulations governing the H-1B temporary nonimmigrant specialty occupation program to improve the integrity of the program, and more closely conform the regulatory framework to that of the Act. Specifically, DHS is revising the regulatory definition and standards for determining whether an alien will be employed in a “specialty occupation” to align with the statutory definition of the term. The rule is also revising the definition of “United States employer,” and “employer-employee relationship,” to clarify how USCIS will determine whether there is an employer-employee relationship between the petitioner and the beneficiary. In addition, the rule is limiting the validity period for third-party placement petitions to a maximum of 1 year; providing for a written explanation for certain approved petitions where the validity period is limited to 1 year or less; amending the itinerary provision applicable to petitioners of temporary nonimmigrant workers to clarify it does not apply to H-1B petitioners; and codifying USCIS' H-1B site visit authority, including addressing the potential consequences of refusing a site visit. The primary purpose of these changes is to better ensure that each H-1B nonimmigrant worker will be working for a qualified employer and in a position that meets the statutory definition of a “specialty occupation.” While this rule tightens regulatory eligibility criteria and may result in denials of some H-1B
Generally, DHS believes NEPA does not apply to a rule intended to strengthen an immigration program because any attempt to analyze its potential impacts would be largely speculative, if not completely so. DHS cannot reasonably estimate how many petitions will be filed for workers to be employed in specialty occupations following the changes made by this rule or whether the regulatory amendments herein will result in an overall change in the number of H-1B petitions that are ultimately approved, and the number of H-1B workers who are employed in the United States in any fiscal year. DHS has no reason to believe that the amendments to H-1B regulations would change the environmental effect, if any, of the existing regulations. Therefore, DHS has determined that even if NEPA were to apply to this action, this rule clearly fits within categorical exclusion A3(d) in the Instruction Manual, which provides an exclusion for “promulgation of rules . . . that amend an existing regulation without changing its environmental effect.” This rule maintains the current human environment by making improvements to the H-1B program during the economic crisis caused by COVID-19 in a way that will more effectively prevent the employment of H-1B workers from negatively impacting the working conditions of U.S. workers who are similarly employed. This rule is not a part of a larger action and presents no extraordinary circumstances creating the potential for significant environmental effects. Therefore, this action is categorically excluded and no further NEPA analysis is required.
Under the Paperwork Reduction Act of 1995, Public Law 104-13, all agencies are required to submit to OMB, for review and approval, any reporting requirements inherent in a rule. The revised information collection has been submitted to OMB for review and approval as required by the PRA.
DHS invites comment on the impact of this rule to the collection of information. In accordance with the PRA, the information collection notice is published in the
(1) Evaluate whether the collection of information is necessary for the proper performance of the functions of the agency, including whether the information will have practical utility;
(2) Evaluate the accuracy of the agency's estimate of the burden of the collection of information, including the validity of the methodology and assumptions used;
(3) Enhance the quality, utility, and clarity of the information to be collected; and
(4) Minimize the burden of the collection of information on those who are to respond, including through the use of appropriate automated, electronic, mechanical, or other technological collection techniques or other forms of information technology, for example, permitting electronic submission of responses.
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(5) An estimate of the total number of respondents and the amount of time estimated for an average respondent to respond: The estimated total number of respondents for the information collection I-129 is 294,751 and the estimated hour burden per response is 2.84 hours; the estimated total number of respondents for the information collection E-1/E-2 Classification Supplement to Form I-129 is 4,760 and the estimated hour burden per response is 0.67 hours; the estimated total number of respondents for the information collection Trade Agreement Supplement to Form I-129 is 3,057 and the estimated hour burden per response is 0.67 hours; the estimated total number of respondents for the information collection H Classification Supplement to Form I-129 is 96,291 and the estimated hour burden per response is 2.5 hours; the estimated total number of respondents for the information collection H-1B and H-1B1 Data Collection and Filing Fee Exemption Supplement is 96,291 and the estimated hour burden per response is 1 hour; the estimated total number of respondents for the information collection L Classification Supplement to Form I-129 is 37,831 and the estimated hour burden per response is 1.34 hours; the estimated total number of respondents for the information collection O and P Classifications Supplement to Form I-129 is 22,710 and the estimated hour burden per
(6) An estimate of the total public burden (in hours) associated with the collection: The total estimated annual hour burden associated with this collection of information is 1,268,331 hours.
(7) An estimate of the total public burden (in cost) associated with the collection: The estimated total annual cost burden associated with this collection of information is $70,681,290.
Under the Paperwork Reduction Act of 1995, Public Law 104-13, all agencies are required to submit to OMB, for review and approval, any reporting requirements inherent in a rule. The revised information collection has been submitted to OMB for review and approval as required by the PRA.
DHS invites comment on the impact to the collection of information. In accordance with the PRA, the information collection notice is published in the
(1) Evaluate whether the collection of information is necessary for the proper performance of the functions of the agency, including whether the information will have practical utility;
(2) Evaluate the accuracy of the agency's estimate of the burden of the collection of information, including the validity of the methodology and assumptions used;
(3) Enhance the quality, utility, and clarity of the information to be collected; and
(4) Minimize the burden of the collection of information on those who are to respond, including through the use of appropriate automated, electronic, mechanical, or other technological collection techniques or other forms of information technology,
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(2)
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The Acting Secretary of Homeland Security, Chad F. Wolf, having reviewed and approved this document, is delegating the authority to electronically sign this document to Chad R. Mizelle, who is the Senior Official Performing the Duties of the General Counsel for DHS, for purposes of publication in the
Administrative practice and procedure, Aliens, Cultural exchange program, Employment, Foreign officials, Health professions, Reporting and recordkeeping requirements, Students.
Accordingly, DHS amends chapter I of title 8 of the Code of Federal Regulations as follows:
6 U.S.C. 202, 236; 8 U.S.C. 1101, 1102, 1103, 1182, 1184, 1186a, 1187, 1221, 1281, 1282, 1301-1305 and 1372; sec. 643, Pub. L. 104-208, 110 Stat. 3009-708; Pub. L. 106-386, 114 Stat. 1477-1480; section 141 of the Compacts of Free Association with the Federated States of Micronesia and the Republic of the Marshall Islands, and with the Government of Palau, 48 U.S.C. 1901 note and 1931 note, respectively; 48 U.S.C. 1806; 8 CFR part 2; Pub. L. 115-218.
The revisions and additions read as follows:
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(C) The petitioner must establish, at the time of filing, that it has actual work in a specialty occupation available for the beneficiary as of the start date of the validity period as requested on the petition. When a beneficiary will be placed at one or more third-party worksites, the petitioner must submit evidence such as contracts, work orders, or other similar corroborating evidence showing that the beneficiary will perform services in a specialty occupation at the third-party worksite(s), and that the petitioner will have an employer-employee relationship with the beneficiary. In accordance with 8 CFR 103.2(b) and paragraph (h)(9) of this section, USCIS may request copies of contracts, work orders, or other similar corroborating evidence on a case-by-case basis in all cases, regardless of where the beneficiary will be placed.
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(B) Where the petition is approved with an earlier validity period end date than requested by the petitioner, the approval notice will provide or be accompanied by a brief explanation for the validity period granted.
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(A)(
(24)
(ii) The following provisions added or revised by the changes made to the H-1B nonimmigrant visa classification program, as of December 7, 2020, are intended to be implemented as separate and severable from one another: paragraphs (h)(2)(i), (h)(4)(i)(B)(
(a) Engage the resources of the Federal Government to address the mental- and behavioral-health needs of vulnerable Americans, including by:
(b) Permit and encourage safe in-person mentorship programs; support-group participation; and attendance at communal facilities, including schools, civic centers, and houses of worship;
(c) Increase the availability of telehealth and online mental-health and substance-use tools and services; and
(d) Marshal public and private resources to address deteriorating mental health, such as factors that contribute to prolonged unemployment and social isolation.
(b) Within 45 days of the date of this order, the Working Group shall develop and submit to the President a report that outlines a plan for improved service coordination between all relevant public and private stakeholders and executive departments and agencies (agencies) to assist individuals in crisis so that they receive effective treatment and recovery services.
(a) Examine their existing grant programs that fund mental-health, medical, or related services and, consistent with applicable law, take steps to encourage grantees to consider adopting policies, where appropriate, that have been shown to improve mental health and reduce suicide risk, including the following:
(b) Maximize use of existing agency authorities to award contracts or grants to community organizations or other local entities to enhance mental-health and suicide-prevention services, such as outreach, education, and case management, to vulnerable Americans.
(b) This order shall be implemented consistent with applicable law and subject to the availability of appropriations.
(c) This order is not intended to, and does not, create any right or benefit, substantive or procedural, enforceable at law or in equity by any party against the United States, its departments, agencies, or entities, its officers, employees, or agents, or any other person.
(2) The permittee shall hold harmless and indemnify the United States from any claimed or adjudged liability arising out of construction, connection, operation, or maintenance of the Border facilities, including environmental contamination from the release, threatened release, or discharge of hazardous substances or hazardous waste.
(3) To ensure the safe operation of the Border facilities, the permittee shall maintain them and every part of them in a condition of good repair and in compliance with applicable law.
(2) The permittee shall hold harmless and indemnify the United States from any claimed or adjudged liability arising out of construction, connection, operation, or maintenance of the Border facilities, including environmental contamination from the release, threatened release, or discharge of hazardous substances or hazardous waste.
(3) To ensure the safe operation of the Border facilities, the permittee shall maintain them and every part of them in a condition of good repair and in compliance with applicable law.
(2) The permittee shall hold harmless and indemnify the United States from any claimed or adjudged liability arising out of construction, connection, operation, or maintenance of the Border facilities, including environmental contamination from the release, threatened release, or discharge of hazardous substances or hazardous waste.
(3) To ensure the safe operation of the Border facilities, the permittee shall maintain them and every part of them in a condition of good repair and in compliance with applicable law.