Agricultural Marketing Service
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Census Bureau
Foreign-Trade Zones Board
Industry and Security Bureau
International Trade Administration
National Oceanic and Atmospheric Administration
Federal Energy Regulatory Commission
Agency for Healthcare Research and Quality
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Federal Register Office
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Financial Crimes Enforcement Network
Internal Revenue Service
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National Credit Union Administration (NCUA).
Final rule and temporary final rule; extension.
The NCUA Board (Board) is extending the effective date of its temporary final rule, which modified certain regulatory requirements to help ensure that federally insured credit unions (FICUs) remain operational and can properly conduct appropriate liquidity management to address economic conditions caused by the COVID-19 pandemic. Specifically, the temporary final rule issued by the Board in April 2020 temporarily raised the maximum aggregate amount of loan participations that a FICU may purchase from a single originating lender to the greater of $5,000,000 or 200 percent of the FICU's net worth. The rule also temporarily suspended limitations on the eligible obligations that a Federal credit union (FCU) may purchase and hold. In addition, given physical distancing practices necessitated by COVID-19, the rule also tolled the required timeframes for the occupancy or disposition of properties not being used for FCU business or that have been abandoned. Unless extended, each of these temporary modifications will expire on December 31, 2020. Due to the continued impact of COVID-19, the Board has decided it is necessary to extend the effective period of these temporary modifications until December 31, 2021.
This rule is effective December 22, 2020. The expiration date of the temporary final rule published on April 21, 2020 (85 FR 22010), is extended through the close of December 31, 2021.
The COVID-19 pandemic has created uncertainty for FICUs and their members. The Board continues to work with Federal and state regulatory agencies, in addition to FICUs, to assist FICUs in managing their operations and to facilitate continued assistance to credit union members and communities impacted by the novel coronavirus. In April 2020, as part of these ongoing efforts, the Board temporarily modified certain regulatory requirements to help ensure that FICUs remain operational and liquid during the COVID-19 pandemic.
The economic environment is a key determinant of credit union performance. After several years of solid growth, the economy entered a recession at the start of 2020.
Due to the continuing impact of the COVID-19 pandemic on FICUs and their members, the Board has determined that it is necessary to extend the effectiveness of these temporary provisions. The economic impact of the COVID-19 pandemic remains uncertain and is forecasted to extend through 2021. As such, the temporary amendments will remain in place through the end of calendar year 2021 unless the Board finds conditions warrant additional action to further extend their effectiveness.
In general, two of the temporary amendments expanded the authority of FICUs to purchase loans and participations in loans, thereby enhancing FICUs' ability to meet liquidity needs. Specifically, the Board temporarily raised the maximum aggregate amount of loan participations that a FICU may purchase from a single originating lender to the greater of $5,000,000 or 200 percent of the credit
Section III of this preamble discusses the temporary regulatory amendments in greater detail and the rationale for the extension of their temporary effect.
The Board is issuing this temporary final rule pursuant to its authority under the Act.
Section 107(5)(E) of the FCU Act authorizes an FCU to engage in participation lending with other credit unions, credit union organizations, or financial organizations in accordance with written policies of the FCU's board of directors.
The regulation limits the aggregate amount of loan participations that a FICU may purchase from any one originating lender to the greater of $5,000,000 or 100 percent of the FICU's net worth.
Under the temporary final rule issued in April 2020, the aggregate limit below which a waiver from the appropriate NCUA Regional Director is not required was temporarily raised to the greater of $5,000,000 or 200 percent of a FICU's net worth. The increase was intended to help safeguard the stability of FICUs during the COVID-19 pandemic, without undue additional risk to the safety and soundness of the credit union system. The temporary increase was set to expire at the close of December 31, 2020.
Due to the ongoing COVID-19 pandemic and its continued impact on FICUs, the Board believes it necessary to extend the effective period of this temporary amendment until the close of December 31, 2021. As noted in the April 2020 temporary final rule, the Board continues to believe that a cap is an important protection against FICU insolvency. However, the Board also continues to believe that, as currently formulated in § 701.22(b)(5)(ii), the limitation may be overly prescriptive during this time. Additional regulatory flexibility continues to be especially warranted to deal with the economic impact of the COVID-19 pandemic, which may result in additional stress on credit union balance sheets, potentially requiring robust liquidity management.
When the Board issued the temporary increase in April, it emphasized its belief that this amendment would help safeguard the stability of FICUs during the COVID-19 pandemic, without undue additional risk to the safety and soundness of the credit union system. The Board maintains this belief and expects that the impact of the COVID-19 pandemic will warrant an increased cap until the close of December 31, 2021. The Board also continues to believe that the temporary increase is needed to strike the balance the Board sought in originally promulgating the rule in 2013; the Board encourages FICUs to engage in appropriate due diligence in this context. As such, the Board feels it necessary to extend this relief until the close of December 31, 2021 to continue to allow FICUs the flexibility to conduct robust liquidity management to cope with the atypical economic conditions caused by the COVID-19 pandemic. The Board believes that a one-year extension appropriately balances the unpredictable length of the economic impact of the COVID-19 pandemic with safety and soundness considerations.
In the April 2020 temporary final rule, the Board noted that, subsequent to the temporary rule's expiration at the close of December 31, 2020, a FICU must return into compliance with the current limitation (that is, the greater of $5,000,000 or 100 percent of its net worth) by either ceasing to purchase loan participations from the originating lender or requesting a waiver as provided in the regulation. With this extension of the expiration, a FICU now must return into compliance with the current limitation or obtain a waiver at the close of December 31, 2021.
Section 107(13) of the FCU Act authorizes an FCU, “in accordance with rules and regulations prescribed by the Board,” to purchase, sell, or pledge all or part of an eligible obligation to one of its own members.
The purpose of the refinancing requirement is to help ensure that loans
As noted, the FCU Act and § 701.23 generally do not authorize an FCU to purchase a loan unless the person liable on the loan is a member of that credit union. The Board's publicly articulated interpretation since the 1979 rulemaking that implemented section 107(13) is that Congress did not intend section 107(13) to be an express prohibition on purchases of obligations made to non-members provided they are authorized by other sections of the FCU Act.
The Board's regulations in § 701.23 generally require that purchased eligible obligations be obligations of a purchasing FCU's members. However, § 701.23(b)(2) provides certain limited exceptions to the general requirements for well-capitalized FCUs that have composite CAMEL ratings of “1” or “2.”
In the April 2020 temporary final rule, the Board explained that—while it continues to believe that this exception should generally be limited to FCUs with CAMEL 1 or 2 composite ratings—it also recognizes the urgent need to support the extension of credit and facilitate downstream loan purchases as a tool to manage liquidity. The Board, therefore, temporarily amended its regulations to authorize FCUs with CAMEL composite ratings of 1, 2, or 3 to purchase eligible obligations of FICUs and liquidating credit unions irrespective of whether the obligation belongs to the purchasing FCU's members. This change did not alter the requirement for a purchasing FCU to be well-capitalized under § 701.22(b)(2).
This temporary amendment was set to expire at the close of December 31, 2020. Due to the ongoing and unforeseeable impact of the COVID-19 pandemic, the Board believes it appropriate to extend these temporary provisions until the close of December 31, 2021. The Board recognizes that the need to support the extension of credit and facilitate the downstream loan purchases as a tool to manage liquidity remains, and likely will remain for the foreseeable future. The Board believes that a one-year extension appropriately balances the unpredictable length of the economic impact of the COVID-19 pandemic with safety and soundness considerations.
As noted in the April 2020 temporary final rule, the Board reiterates that this change allows FCUs to continue to hold obligations purchased pursuant to this temporary final rule subsequent to the rule's expiration. The standard requirements applicable to the purchase of obligations under § 701.23 will resume after the expiration of the temporary provisions at the close of December 31, 2021, unless extended, and will apply to all future purchases, including to purchases of obligations previously acquired under the provisions of this temporary final rule. The Board also reiterates that the restrictions temporarily relieved in § 701.23 do not apply to state-chartered, federally insured credit unions. Any such restrictions applicable to state-chartered credit unions would be based on state laws or regulations. This temporary final rule does not modify the current authority of FCUs under § 701.23 to purchase the obligations of a liquidating credit union without regard to whether the obligations belong to the purchasing FCU's members.
Section 107(4) of the FCU Act authorizes an FCU to purchase, hold, and dispose of property necessary or incidental to its operations.
The regulation provides that if an FCU acquires premises, including unimproved land or unimproved real property, it must partially occupy them “no later than six years after the date of acquisition,” subject to the NCUA granting a waiver.
In the April temporary final rule, the Board—noting the impact of the physical distancing measures adopted by many states and localities related to COVID-19
The temporary final rule provided that any days that fall within the period commencing on April 21, 2020 and concluding at the close of December 31, 2020 shall not be counted for purposes of determining an FCU's compliance with the regulatory time periods. This temporary deferral has provided FCUs additional flexibility to comply with the prescribed time periods, while still complying with the statutory and regulatory goals of ensuring that
Due to the ongoing nature of the COVID-19 pandemic and its continued impact on FICUs, the Board has decided it is necessary to extend the effectiveness of this temporary amendment until the close of December 31, 2021. Physical distancing practices continue to be a key component of preventing the spread of COVID-19 and many states, localities, and businesses have adopted related requirements or policies
The Board continues to believe this temporary change appropriately reflects the unique circumstances necessitated by the COVID-19 pandemic while maintaining consistency with the statutory provision as interpreted and implemented by the Board. The Board feels that a one-year extension appropriately balances the unpredictable length of the impact of the COVID-19 pandemic with safety and soundness considerations.
The Board is issuing the extension of the temporary final rule without prior notice and the opportunity for public comment and the delayed effective date ordinarily prescribed by the Administrative Procedure Act (APA).
The Board believes that the public interest is best served by implementing the extension of the previously issued temporary final rule immediately upon publication in the
The Board values public input in its rulemakings and believes that providing the opportunity for comment enhances its regulations. Accordingly, the Board often solicits comments on its rules even when not required under the APA, such as for the rules it issues on an interim-final basis. The Board, however, notes that the provisions extended in this rule are temporary in nature, and designed specifically to help credit unions affected by the COVID-19 pandemic. The extension of the amendments made by the initial temporary final rule will automatically expire at the close of December 31, 2021, and are limited in number and scope. For these reasons, the Board finds that there is good cause consistent with the public interest to issue the rule without advance notice and comment.
The APA also requires a 30-day delayed effective date, except for: (1) Substantive rules which grant or recognize an exemption or relieve a restriction; (2) interpretative rules and statements of policy; or (3) as otherwise provided by the agency for good cause.
For purposes of the Congressional Review Act,
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.
For the same reasons set forth above, the Board is adopting the extension of the temporary final rule without the delayed effective date generally prescribed under the Congressional Review Act. The delayed effective date required by the Congressional Review Act does not apply to any rule for which an agency for good cause finds (and incorporates the finding and a brief statement of reasons therefor in the rule issued) that notice and public procedure thereon are impracticable, unnecessary, or contrary to the public interest.
As required by the Congressional Review Act, the Board will submit the final rule and other appropriate reports to Congress and the Government Accountability Office for review.
The Paperwork Reduction Act of 1995 (PRA) (44 U.S.C. 3501
In accordance with the PRA, the information collection requirements included in this temporary final rule extension have been submitted to OMB for approval under control numbers 3133-0141, 3133-0127 and 3133-0040.
Executive Order 13132
The NCUA has determined that the extension of the temporary final rule will not affect family well-being within the meaning of Section 654 of the Treasury and General Government Appropriations Act, 1999.
The Regulatory Flexibility Act (RFA) generally requires that when an agency issues a proposed rule or a final rule pursuant to the APA or another law, the agency must prepare a regulatory flexibility analysis that meets the requirements of the RFA and publish such analysis in the
As discussed previously, consistent with the APA, the Board has determined for good cause that general notice and opportunity for public comment is unnecessary, and therefore the Board is not issuing a notice of proposed rulemaking. Rules that are exempt from notice and comment procedures are also exempt from the RFA requirements, including conducting a regulatory flexibility analysis, when among other things the agency for good cause finds that notice and public procedure are impracticable, unnecessary, or contrary to the public interest. Accordingly, the Board has concluded that the RFA's requirements relating to initial and final regulatory flexibility analysis do not apply.
Aged, Civil rights, Credit, Credit unions, Fair housing, Individuals with disabilities, Insurance, Mortgages, Reporting and recordkeeping requirements.
For the reasons discussed in the preamble, the Board amends 12 CFR part 701 as follows:
12 U.S.C. 1752(5), 1755, 1756, 1757, 1758, 1759, 1761a, 1761b, 1766, 1767, 1782, 1784, 1785, 1786, 1787, 1788, 1789. Section 701.6 is also authorized by 15 U.S.C. 3717. Section 701.31 is also authorized by 15 U.S.C. 1601
Bureau of Consumer Financial Protection.
Final rule; official interpretation.
The Bureau of Consumer Financial Protection (Bureau) is amending the official commentary that interprets the requirements of the Bureau's Regulation C (Home Mortgage Disclosure) to reflect the asset-size exemption threshold for banks, savings associations, and credit unions based on the annual percentage change in the average of the Consumer Price Index for Urban Wage Earners and Clerical Workers (CPI-W). Based on the 1.3 percent increase in the average of the CPI-W for the 12-month period ending in November 2020, the exemption threshold is adjusted to $48 million from $47 million. Therefore, banks, savings associations, and credit unions with assets of $48 million or less as of December 31, 2020, are exempt from collecting data in 2021.
This rule is effective on January 1, 2021.
Willie Williams, Paralegal Specialist; Rachel Ross, Attorney-Advisor; Office of Regulations, at (202) 435-7700. If you require this document in an alternative electronic format, please contact
The Bureau is amending Regulation C, which implements the HMDA asset thresholds, to establish the asset-sized exemption threshold for depository financial institution for 2021. The asset threshold will be $48 million for 2021.
The Home Mortgage Disclosure Act of 1975 (HMDA)
Prior to 1997, HMDA exempted certain depository institutions as defined in HMDA (
The definition of “financial institution” in § 1003.2(g) provides that the Bureau will adjust the asset threshold based on the year-to-year change in the average of the CPI-W, not seasonally adjusted, for each 12-month period ending in November, rounded to the nearest $1 million. For 2020, the threshold was $47 million. During the 12-month period ending in November 2020, the average of the CPI-W increased by 1.3 percent. As a result, the exemption threshold is increased to $48 million for 2021. Thus, banks, savings associations, and credit unions with assets of $48 million or less as of December 31, 2020, are exempt from collecting data in 2021. An institution's exemption from collecting data in 2021 does not affect its responsibility to report data it was required to collect in 2020.
Under the Administrative Procedure Act (APA), notice and opportunity for public comment are not required if the Bureau finds that notice and public comment are impracticable, unnecessary, or contrary to the public interest.
Section 553(d) of the APA generally requires publication of a final rule not less than 30 days before its effective date, except (1) a substantive rule which grants or recognizes an exemption or relieves a restriction; (2) interpretive rules and statements of policy; or (3) as otherwise provided by the agency for good cause found and published with the rule.
Because no notice of proposed rulemaking is required, the Regulatory Flexibility Act does not require an initial or final regulatory flexibility analysis.
The Bureau has determined that this final rule does not impose any new or revise any existing recordkeeping, reporting, or disclosure requirements on covered entities or members of the public that would be collections of information requiring approval by the Office of Management and Budget under the Paperwork Reduction Act.
Pursuant to the Congressional Review Act (5 U.S.C. 801
The Acting Associate Director for Research, Markets and Regulations, Dan S. Sokolov, having reviewed and approved this document, is delegating the authority to electronically sign this document to Grace Feola, a Bureau Federal Register Liaison, for purposes of publication in the
Banks, banking, Credit unions, Mortgages, National banks, Reporting and recordkeeping requirements, Savings associations.
For the reasons set forth above, the Bureau amends Regulation C, 12 CFR part 1003, as set forth below:
12 U.S.C. 2803, 2804, 2805, 5512, 5581.
1.
2.
3.
i. Two institutions that are not covered merge. The surviving or newly formed institution meets all of the requirements necessary to be a covered institution. No data collection is required for the calendar year of the merger (even though the merger creates an institution that meets all of the requirements necessary to be a covered institution). When a branch office of an institution that is not covered is acquired by another institution that is not covered, and the acquisition results in a covered institution, no data collection is required for the calendar year of the acquisition.
ii. A covered institution and an institution that is not covered merge. The covered institution is the surviving institution, or a new covered institution is formed. For the calendar year of the merger, data collection is required for covered loans and applications handled in the offices of the merged institution that was previously covered and is optional for covered loans and applications handled in offices of the merged institution that was previously not covered. When a covered institution acquires a branch office of an institution that is not covered, data collection is optional for covered loans and applications handled by the acquired branch office for the calendar year of the acquisition.
iii. A covered institution and an institution that is not covered merge. The institution that is not covered is the surviving institution, or a new institution that is not covered is formed. For the calendar year of the merger, data collection is required for covered loans and applications handled in offices of the previously covered institution that took place prior to the merger. After the merger date, data collection is optional for covered loans and applications handled in the offices of the institution that was previously covered. When an institution remains not covered after acquiring a branch office of a covered institution, data collection is required for transactions of the acquired branch office that take place prior to the acquisition. Data collection by the acquired branch office is optional for transactions taking place in the remainder of the calendar year after the acquisition.
iv. Two covered institutions merge. The surviving or newly formed institution is a covered institution. Data collection is required for the entire calendar year of the merger. The surviving or newly formed institution files either a consolidated submission or separate submissions for that calendar year. When a covered institution acquires a branch office of a covered institution, data collection is required for the entire calendar year of the merger. Data for the acquired branch office may be submitted by either institution.
Bureau of Consumer Financial Protection.
Final rule; official interpretation.
The Bureau of Consumer Financial Protection (Bureau) is amending the official commentary that interprets the requirements of the Bureau's Regulation Z (Truth in Lending) to reflect a change in the asset-size threshold for certain creditors to qualify for an exemption to the requirement to establish an escrow account for a higher-priced mortgage loan. This amendment is based on the annual percentage change in the average of the Consumer Price Index for Urban Wage Earners and Clerical Workers (CPI-W). Based on the 1.3 percent increase in the average of the CPI-W for the 12-month period ending in November 2020, the exemption threshold is adjusted to $2.230 billion from $2.202 billion. Therefore, creditors with assets of less than $2.230 billion (including assets of certain affiliates) as of December 31, 2020, are exempt, if other requirements of Regulation Z also are met, from establishing escrow accounts for higher-priced mortgage loans in 2021.
This rule is effective on January 1, 2021.
Willie Williams, Paralegal Specialist; Rachel Ross, Attorney-Advisor, Office of Regulations, at (202) 435-7700. If you require this document in an alternative electronic format, please contact
Section 129D of the Truth in Lending Act (TILA) contains a general requirement that an escrow account be established by a creditor to pay for property taxes and insurance premiums for certain first-lien higher-priced mortgage loan transactions. TILA section 129D also generally permits an exemption from the higher-priced mortgage loan escrow requirement for a creditor that meets certain requirements, including any asset-size threshold the Bureau may establish.
In the 2013 Escrows Final Rule,
During the 12-month period ending in November 2020, the average of the CPI-W increased by 1.3 percent. As a result, the exemption threshold is increased to $2.230 billion for 2021. Thus, if the creditor's assets together with the assets of its affiliates that regularly extended first-lien covered transactions during calendar year 2020 are less than $2.230 billion on December 31, 2020, and it meets the other requirements of § 1026.35(b)(2)(iii), it will be exempt from the escrow-accounts requirement for higher-priced mortgage loans in 2021 and will also be exempt from the escrow-accounts requirement for higher-priced mortgage loans for purposes of any loan consummated in 2022 with applications received before April 1, 2022. The adjustment to the escrows asset-size exemption threshold will also increase the threshold for small-creditor portfolio and balloon-payment qualified mortgages under Regulation Z. The requirements for small-creditor portfolio qualified mortgages at § 1026.43(e)(5)(i)(D) reference the asset threshold in § 1026.35(b)(2)(iii)(C). Likewise, the requirements for balloon-payment qualified mortgages at § 1026.43(f)(1)(vi) reference the asset threshold in § 1026.35(b)(2)(iii)(C). Under § 1026.32(d)(1)(ii)(C), balloon-payment qualified mortgages that satisfy all applicable criteria in § 1026.43(f)(1)(i) through (vi) and (f)(2), including being made by creditors that have (together with certain affiliates) total assets below the threshold in § 1026.35(b)(2)(iii)(C), are also excepted from the prohibition on balloon payments for high-cost mortgages.
Under the Administrative Procedure Act (APA), notice and opportunity for public comment are not required if the Bureau finds that notice and public comment are impracticable, unnecessary, or contrary to the public interest. 5 U.S.C. 553(b)(B). Pursuant to this final rule, comment 35(b)(2)(iii)-1 in Regulation Z is amended to update the exemption threshold. The amendment in this final rule is technical and merely applies the formula previously established in Regulation Z for determining any adjustments to the exemption threshold. For these reasons, the Bureau has determined that publishing a notice of proposed rulemaking and providing opportunity for public comment are unnecessary. Therefore, the amendment is adopted in final form.
Section 553(d) of the APA generally requires publication of a final rule not less than 30 days before its effective date, except (1) a substantive rule which grants or recognizes an exemption or relieves a restriction; (2) interpretive rules and statements of policy; or (3) as otherwise provided by the agency for good cause found and published with the rule. 5 U.S.C. 553(d). At a minimum, the Bureau believes the amendments fall under the third exception to section 553(d). The Bureau finds that there is good cause to make the amendments effective on January 1, 2020. The amendment in this final rule is technical and non-discretionary, and it applies the method previously established in the agency's regulations for automatic adjustments to the threshold.
Because no notice of proposed rulemaking is required, the Regulatory Flexibility Act does not require an initial or final regulatory flexibility analysis.
The Bureau has determined that this final rule does not impose any new or revise any existing recordkeeping, reporting, or disclosure requirements on covered entities or members of the public that would be collections of information requiring approval by the Office of Management and Budget under the Paperwork Reduction Act.
Pursuant to the Congressional Review Act (5 U.S.C. 801
The Acting Associate Director for Research, Markets and Regulations, Dan S. Sokolov, having reviewed and approved this document, is delegating the authority to electronically sign this document to Grace Feola, a Bureau Federal Register Liaison, for purposes of publication in the
Advertising, Banks, banking, Consumer protection, Credit, Credit unions, Mortgages, National banks, Reporting and recordkeeping requirements, Savings associations, Truth in lending.
For the reasons set forth above, the Bureau amends Regulation Z, 12 CFR part 1026, as set forth below:
12 U.S.C. 2601, 2603-2605, 2607, 2609, 2617, 3353, 5511, 5512, 5532, 5581; 15 U.S.C. 1601
1.
i. During the preceding calendar year, or during either of the two preceding calendar years if the application for the loan was received before April 1 of the current calendar year, a creditor extended a first-lien covered transaction, as defined in § 1026.43(b)(1), secured by a property located in an area that is either “rural” or “underserved,” as set forth in § 1026.35(b)(2)(iv).
A. In general, whether the rural-or-underserved test is satisfied depends on the creditor's activity during the preceding calendar year. However, if the application for the loan in question was received before April 1 of the current calendar year, the creditor may instead meet the rural-or-underserved test based on its activity during the next-to-last calendar year. This provides creditors with a grace period if their activity meets the rural-or-underserved test (in § 1026.35(b)(2)(iii)(A)) in one calendar year but fails to meet it in the next calendar year.
B. A creditor meets the rural-or-underserved test for any higher-priced mortgage loan consummated during a calendar year if it extended a first-lien covered transaction in the preceding calendar year secured by a property located in a rural-or-underserved area. If the creditor does not meet the rural-or-underserved test in the preceding calendar year, the creditor meets this condition for a higher-priced mortgage loan consummated during the current calendar year only if the application for the loan was received before April 1 of the current calendar year and the creditor extended a first-lien covered transaction during the next-to-last calendar year that is secured by a property located in a rural or underserved area. The following examples are illustrative:
ii. The creditor and its affiliates together extended no more than 2,000 covered transactions, as defined in § 1026.43(b)(1), secured by first liens, that were sold, assigned, or otherwise transferred by the creditor or its affiliates to another person, or that were subject at the time of consummation to a commitment to be acquired by another person, during the preceding calendar year or during either of the two preceding calendar years if the application for the loan was received before April 1 of the current calendar year. For purposes of § 1026.35(b)(2)(iii)(B), a transfer of a first-lien covered transaction to “another person” includes a transfer by a creditor to its affiliate.
A. In general, whether this condition is satisfied depends on the creditor's activity during the preceding calendar year. However, if the application for the loan in question is received before April 1 of the current calendar year, the creditor may instead meet this condition based on activity during the next-to-last calendar year. This provides creditors with a grace period if their activity falls at or below the threshold in one calendar year but exceeds it in the next calendar year.
B. For example, assume that in 2015 a creditor and its affiliates together extended 1,500 loans that were sold, assigned, or otherwise transferred by the creditor or its affiliates to another person, or that were subject at the time of consummation to a commitment to be acquired by another person, and 2,500 such loans in 2016. Because the 2016 transaction activity exceeds the threshold but the 2015 transaction activity does not, the creditor satisfies this condition for exemption for a higher-priced mortgage loan consummated during 2017 if the creditor received the application for the loan before April 1, 2017, but does not satisfy this condition for a higher-priced mortgage loan consummated during 2017 if the application for the loan was received on or after April 1, 2017.
C. For purposes of § 1026.35(b)(2)(iii)(B), extensions of first-lien covered transactions, during the applicable time period, by all of a creditor's affiliates, as “affiliate” is defined in § 1026.32(b)(5), are counted toward the threshold in this section. Under the Bank Holding Company Act, a company has control over a bank or another company if it directly or indirectly or acting through one or more persons owns, controls, or has power to vote 25 per centum or more of any class of voting securities of the bank or company; it controls in any manner the election of a majority of the directors or trustees of the bank or company; or the Federal Reserve Board determines, after notice and opportunity for hearing, that the company directly or indirectly exercises a controlling influence over the management or policies of the bank or company. 12 U.S.C. 1841(a)(2).
iii. As of the end of the preceding calendar year, or as of the end of either of the two preceding calendar years if the application for the loan was
A. For purposes of § 1026.35(b)(2)(iii)(C), in addition to the creditor's assets, only the assets of a creditor's “affiliate” (as defined by § 1026.32(b)(5)) that regularly extended covered transactions (as defined by § 1026.43(b)(1)) secured by first liens, are counted toward the applicable annual asset threshold.
B. Only the assets of a creditor's affiliate that regularly extended first-lien covered transactions during the applicable period are included in calculating the creditor's assets. The meaning of “regularly extended” is based on the number of times a person extends consumer credit for purposes of the definition of “creditor” in § 1026.2(a)(17). Because covered transactions are “transactions secured by a dwelling,” consistent with § 1026.2(a)(17)(v), an affiliate regularly extended covered transactions if it extended more than five covered transactions in a calendar year. Also consistent with § 1026.2(a)(17)(v), because a covered transaction may be a high-cost mortgage subject to § 1026.32, an affiliate regularly extends covered transactions if, in any 12-month period, it extends more than one covered transaction that is subject to the requirements of § 1026.32 or one or more such transactions through a mortgage broker. Thus, if a creditor's affiliate regularly extended first-lien covered transactions during the preceding calendar year, the creditor's assets as of the end of the preceding calendar year, for purposes of the asset limit, take into account the assets of that affiliate. If the creditor, together with its affiliates that regularly extended first-lien covered transactions, exceeded the asset limit in the preceding calendar year—to be eligible to operate as a small creditor for transactions with applications received before April 1 of the current calendar year—the assets of the creditor's affiliates that regularly extended covered transactions in the year before the preceding calendar year are included in calculating the creditor's assets.
C. If multiple creditors share ownership of a company that regularly extended first-lien covered transactions, the assets of the company count toward the asset limit for a co-owner creditor if the company is an “affiliate,” as defined in § 1026.32(b)(5), of the co-owner creditor. Assuming the company is not an affiliate of the co-owner creditor by virtue of any other aspect of the definition (such as by the company and co-owner creditor being under common control), the company's assets are included toward the asset limit of the co-owner creditor only if the company is controlled by the co-owner creditor, “as set forth in the Bank Holding Company Act.” If the co-owner creditor and the company are affiliates (by virtue of any aspect of the definition), the co-owner creditor counts all of the company's assets toward the asset limit, regardless of the co-owner creditor's ownership share. Further, because the co-owner and the company are mutual affiliates the company also would count all of the co-owner's assets towards its own asset limit.
D. A creditor satisfies the criterion in § 1026.35(b)(2)(iii)(C) for purposes of any higher-priced mortgage loan consummated during 2016, for example, if the creditor (together with its affiliates that regularly extended first-lien covered transactions) had total assets of less than the applicable asset threshold on December 31, 2015. A creditor that (together with its affiliates that regularly extended first-lien covered transactions) did not meet the applicable asset threshold on December 31, 2015 satisfies this criterion for a higher-priced mortgage loan consummated during 2016 if the application for the loan was received before April 1, 2016 and the creditor (together with its affiliates that regularly extended first-lien covered transactions) had total assets of less than the applicable asset threshold on December 31, 2014.
E. Under § 1026.35(b)(2)(iii)(C), the $2,000,000,000 asset threshold adjusts automatically each year based on the year-to-year change in the average of the Consumer Price Index for Urban Wage Earners and Clerical Workers, not seasonally adjusted, for each 12-month period ending in November, with rounding to the nearest million dollars. The Bureau will publish notice of the asset threshold each year by amending this comment. For calendar year 2021, the asset threshold is $2,230,000,000. A creditor that together with the assets of its affiliates that regularly extended first-lien covered transactions during calendar year 2019 has total assets of less than $2,230,000,000 on December 31, 2020, satisfies this criterion for purposes of any loan consummated in 2021 and for purposes of any loan consummated in 2022 for which the application was received before April 1, 2022. For historical purposes:
iv. The creditor and its affiliates do not maintain an escrow account for any mortgage transaction being serviced by the creditor or its affiliate at the time the transaction is consummated, except as provided in § 1026.35(b)(2)(iii)(D)(
Federal Aviation Administration (FAA), DOT.
Final special conditions; request for comments; correction.
The FAA is correcting special conditions, which published in the
The effective date for the special conditions published December 11, 2020, at 85 FR 79826, is December 22, 2020. Comments will continue to be received until January 11, 2021.
Send comments identified by Docket No. FAA-2020-1102 using any of the following methods:
•
•
•
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Andy Shaw, Continued Operational Safety Section, AIR-682, Rotorcraft Standards Branch, Policy and Innovation Division, Aircraft Certification Service, Federal Aviation Administration, 10101 Hillwood Pkwy., Fort Worth, TX 76177; telephone (817) 222-5384; email
On December 11, 2020, the FAA issued Special Conditions No. 27-052-SC,
Issued in Fort Worth, Texas.
Bureau of Industry and Security, Commerce.
Final rule.
In this rule, the Bureau of Industry and Security (BIS) amends the Export Administration Regulations (EAR) by adding seventy-seven entities, under a total of seventy-eight entries, to the Entity List. These seventy-seven entities have been determined by the U.S. Government to be acting contrary to the national security or foreign policy interests of the United States. These entities will be listed on the Entity List under the destinations of the People's Republic of China (China), Bulgaria, France, Germany, Hong Kong, Italy, Malta, Pakistan, Russia, and the United Arab Emirates (U.A.E.). This rule also revises one existing entry on the Entity list under the destination of China and one under the destination of Pakistan. Finally, this rule removes a total of four entities under the destinations of Israel and the U.A.E. The removals are made in connection with requests for removal that BIS received pursuant to the EAR and a review of information provided in those requests.
This rule is effective December 18, 2020.
Chair, End-User Review Committee, Office of the Assistant Secretary, Export Administration, Bureau of Industry and Security, Department of Commerce, Phone: (202) 482-5991, Fax: (202) 482-3911, Email:
The Entity List (supplement No. 4 to part 744 of the Export Administration Regulations (EAR)) identifies entities for which there is reasonable cause to believe, based on specific and articulable facts, that the entities have been involved, are involved, or pose a significant risk of being or becoming involved in activities contrary to the national security or foreign policy interests of the United States. The EAR (15 CFR parts 730-774) impose additional license requirements on, and limit the availability of most license exceptions for, exports, reexports, and transfers (in-country) to listed entities. The license review policy for each listed entity is identified in the “License review policy” column on the Entity List, and the impact on the availability of license exceptions is described in the relevant
The End-User Review Committee (ERC), composed of representatives of the Departments of Commerce (Chair), State, Defense, Energy and, where appropriate, the Treasury, makes all decisions regarding additions to, removals from, or other modifications to the Entity List. The ERC makes all decisions to add an entry to the Entity List by majority vote and all decisions to remove or modify an entry by unanimous vote.
Under § 744.11(b) (Criteria for revising the Entity List) of the EAR, entities for which there is reasonable cause to believe, based on specific and articulable facts, that the entities have been involved, are involved, or pose a significant risk of being or becoming involved in activities that are contrary to the national security or foreign policy interests of the United States, and those acting on behalf of such entities, may be added to the Entity List. Paragraphs (b)(1) through (5) of § 744.11 provide an illustrative list of activities that could be considered contrary to the national security or foreign policy interests of the United States.
This rule implements the decision of the ERC to add seventy-seven entities, under a total of seventy-eight entries, to the Entity List; one of these entities is being added under two entries. These seventy-seven entities will be listed on the Entity List under the following destinations, as applicable, China, Bulgaria, France, Germany, Hong Kong, Italy, Malta, Pakistan, Russia, and the U.A.E. The ERC made the decision to add each of the seventy-seven entities described below under the standard set forth in § 744.11(b) of the EAR.
The ERC determined that the seventy-seven subject entities are engaging in or enabling activities contrary to U.S. national security and foreign policy interests, as follows:
Semiconductor Manufacturing International Corporation Incorporated (SMIC) is added to the Entity List as a result of China's military-civil fusion (MCF) doctrine and evidence of activities between SMIC and entities of concern in the Chinese military industrial complex. The Entity List designation limits SMIC's ability to acquire certain U.S. technology by requiring exporters, reexporters, and in-country transferors of such technology to apply for a license to sell to the company. Items uniquely required to produce semiconductors at advanced technology nodes 10 nanometers or below will be subject to a presumption of denial to prevent such key enabling technology from supporting China's military modernization efforts. This rule adds SMIC and the following ten entities related to SMIC: Semiconductor Manufacturing International (Beijing) Corporation; Semiconductor Manufacturing International (Tianjin) Corporation; Semiconductor Manufacturing International (Shenzhen) Corporation; SMIC Semiconductor Manufacturing (Shanghai) Co., Ltd.; SMIC Holdings Limited; Semiconductor Manufacturing South China Corporation; SMIC Northern Integrated Circuit Manufacturing (Beijing) Co., Ltd.; SMIC Hong Kong International Company Limited; SJ Semiconductor; and Ningbo Semiconductor International Corporation (NSI).
The ERC determined to add the entities AGCU Scientech; China National Scientific Instruments and Materials (CNSIM); DJI; and Kuang-Chi Group for activities contrary to U.S. foreign policy interests. Specifically, these four entities have enabled wide-scale human rights abuses within China through abusive genetic collection and
The ERC determined that China Communications Construction Company Ltd. has enabled China to reclaim and militarize disputed outposts in the South China Sea, which has been detrimental to U.S. national security. In particular, this entity has engaged in reclaiming land at Mischief Reef, which pursuant to a July 12, 2016, ruling by the Hague-based Permanent Court of Arbitration, was determined to be part of the Philippine exclusive economic zone and continental shelf. In addition, the ERC determined that Chongqing Chuandong Shipbuilding Industry Co., Ltd.; CSSC Huangpu Wenchong Shipbuilding Co., Ltd.; Guangxin Shipbuilding and Heavy Industry Co., Ltd.; and Guangzhou Taicheng Shipbuilding Industry Co., Ltd. are involved in China's efforts to assert its unlawful maritime claims in the South China Sea, as well as efforts to intimidate and coerce other coastal states from accessing and developing offshore marine resources. As a result, those entities are added to the Entity List as well.
The ERC determined to add China State Shipbuilding Corporation, Ltd. (CSSC) 7th Research Academy, CSSC 12th Research Institute, CSSC 701st Research Institute, CSSC 702nd Research Institute, CSSC 703rd Research Institute, CSSC 704th Research Institute, CSSC 705th Research Institute, CSSC 707th Research Institute, CSSC 709th Research Institute, CSSC 710th Research Institute, CSSC 711th Research Institute, CSSC 712th Research Institute, CSSC 713th Research Institute, CSSC 714th Research Institute, CSSC 715th Research Institute, CSSC 716th Research Institute, CSSC 717th Research Institute, CSSC 718th Research Institute, CSSC 719th Research Institute, CSSC 723rd Research Institute, CSSC 724th Research Institute, CSSC 725th Research Institute, CSSC 726th Research Institute, CSSC 750th Test Center, and CSSC 760th Research Institute to the Entity List for acquiring and attempting to acquire U.S.-origin items in support of programs for the People's Liberation Army. These activities are contrary to national security and foreign policy interests under Section 744.11(b) of the EAR.
The ERC determined to add Beijing Institute of Technology; Nanjing University of Science and Technology; Nanjing University of Aeronautics and Astronautics; Nanjing Asset Management Co., Ltd.; and Jiangsu Hengxiang Science and Education Equipment Co., Ltd. to the Entity List for acquiring and attempting to acquire U.S.-origin items in support of programs for the People's Liberation Army. This activity is contrary to national security and foreign policy interests under section 744.11(b) of the EAR.
The ERC determined to add the entity Tongfang Technology Ltd. (NucTech) to the Entity List for its involvement in activities that are contrary to the national security interests of the United States. Specifically, the ERC determined NucTech's lower performing equipment impair U.S. efforts to counter illicit international trafficking in nuclear and other radioactive materials. Lower performing equipment means less stringent cargo screening, raising the risk of proliferation.
The ERC determined that Beijing University of Posts and Telecommunications directly participates in the research and development, and production, of advanced weapons and advanced weapons systems in support of People's Liberation Army modernization, which poses a direct threat to U.S. national security. These entities enabled the People's Republic of China to advance military modernization goals, in part, through the import of technology and equipment that is used in developing advanced weapons programs in China.
The ERC determined to add ROFS Microsystems; Tianjin Micro Nano Manufacturing; Tianjin University; and the individuals Chong Zhou; Huisui Zhang; Jinping Chen; Wei Pang; and Zhao Gang because there is reasonable cause to believe that these individuals, in coordination with Tianjin University through its College of Precision Instruments and Optoelectronic Engineering Tianjin Micro Nano Manufacturing, and ROFS Microsystems, systematically coordinated and committed more than a dozen instances of theft of trade secrets from U.S. corporations. On April 1, 2015, those five individuals were indicted on thirty counts including conspiracy to commit economic espionage, conspiracy to commit theft of trade secrets, economic espionage, aiding and abetting and theft of trade secrets. The indictment stated that individuals associated with ROFS and others developed a scheme by which the sources and origins of the trade secrets stolen from Avago and Skyworks would be disguised and the technology contained within those trade secrets be used by entities in the PRC to develop products for civilian and military use. Pursuant to § 744.11(b) of the EAR, the ERC determined that the conduct of these entities raise sufficient concern that necessitates prior review of exports, re-exports or transfers (in-country) of items subject to the EAR involving these persons and companies.
The ERC determined to add the entities Zigma Aviation Services; MRS GmbH; France Tech Services; Maintenance Services International GmbH; and Satori Corporation to the Entity List on the basis of actions and activities they have engaged in that are contrary to the national security and foreign policy interests of the United States. Specifically, these companies provided aircraft parts, without the necessary licenses, to one entity—Mahan Air—that is listed as a Specially Designated National per the U.S. Department of Treasury's Office of Foreign Assets Control.
The ERC determined to add OOO Sovtest Comp; Cosmos Complect; Multi Technology Integration Group EOOD (MTIG) and four associated individuals Dimitar Milanov Dimitrov; Ilias Kharesovich Sabirov; Mariana Marinova Gargova; and Milan Dimitrov; to the Entity List on the basis of their attempts to procure and re-export U.S.-origin items, for activities contrary to the national security and foreign policy interests of the United States. The ERC determined that there is reasonable cause to believe, based on specific and articulable facts, that OOO Sovtest Comp and Cosmos Complect used MTIG as a front company to acquire both radiation-hardened parts and other sensitive electronic components and re-export those U.S.-origin components to Russia without required licenses. The ERC determined these entities are engaging in conduct that poses a risk of violating the EAR such that, pursuant to § 744.11(b)(5) of the EAR prior review of exports and re-exports involving these parties, and the possible imposition of license conditions or license denial, enhances BIS's ability to prevent violations of the EAR.
The ERC determined to add the entities Link Lines (Pvt.) Limited and Geo Research to the Entity List on the basis of their participation in the procurement and attempted procurement of items, to include U.S.-origin items, for entities on the Entity List without obtaining the necessary licenses.
The ERC determined to add Sparx Air Ltd., Sky Float Aviation FZE, and Feroz Ahmed Akbar to the Entity List for engaging in conduct contrary to the national security and foreign policy interests of the United States. Specifically, the ERC determined that there is reasonable cause to believe, based on specific and articulable facts, that these entities were involved in a
Pursuant to § 744.11(b), the ERC determined that the conduct of the above-described seventy-seven entities raises sufficient concerns that prior review, via the imposition of a license requirement, of exports, reexports, or transfers (in-country) of all items subject to the EAR involving these entities, and the possible issuance of license denials or the possible imposition of license conditions on shipments to these entities, will enhance BIS's ability to prevent violations of the EAR or otherwise protect U.S. national security or foreign policy interests.
For the seventy-seven entities added to the Entity List in this final rule, BIS imposes a license requirement that applies to all items subject to the EAR. In addition, no license exceptions are available for exports, reexports, or transfers (in-country) to the persons being added to the Entity List in this rule.
For two of the seventy-seven entities—Geo Research and Link Lines (Pvt) Limited—BIS imposes the license review policy set forth in § 744.2(d) (restrictions on certain nuclear end-uses) of the EAR. For four of the seventy-seven entities—AGCU Scientech, China National Scientific Instruments and Materials (CNSIM), DJI and Kuang-Chi Group—BIS imposes a license review policy of case by case review for items necessary to detect, identify and treat infectious disease and a presumption of denial for all other items subject to the EAR. For eleven of the seventy-seven entities—SMIC and ten related entities—BIS imposes a license review policy of Presumption of Denial for items uniquely required for production of semiconductors at advanced technology nodes (10 nanometers and below, including extreme ultraviolet technology) and case by case for all other items. For the other sixty entities added to the Entity List by this rule, BIS imposes a license review policy of a presumption of denial.
The acronym “a.k.a.” (also known as) is used in entries on the Entity List to identify aliases, thereby assisting exporters, reexporters, and transferors in identifying entities on the Entity List.
For the reasons described above, this final rule adds the following seventy-seven entities, under a total of seventy-eight entries, to the Entity List:
• Dimitar Milanov Dimitrov;
• Mariana Marinova Gargova;
• Milan Dimitrov;
• Multi Technology Integration Group EOOD (MTIG).
• AGCU Scientech;
• Beijing Institute of Technology;
• Beijing University of Posts and Telecommunications (BUPT);
• China Communications Construction Company Ltd.;
• China National Scientific Instruments and Materials (CNSIM);
• China State Shipbuilding Corporation, Limited (CSSC) 7th Research Academy;
• China State Shipbuilding Corporation, Limited (CSSC) 12th Research Institute;
• China State Shipbuilding Corporation, Limited (CSSC) 701st Research Institute;
• China State Shipbuilding Corporation, Limited (CSSC) 702nd Research Institute;
• China State Shipbuilding Corporation, Limited (CSSC) 703rd Research Institute;
• China State Shipbuilding Corporation, Limited (CSSC) 704th Research Institute;
• China State Shipbuilding Corporation, Limited (CSSC) 705th Research Institute;
• China State Shipbuilding Corporation, Limited (CSSC) 707th Research Institute;
• China State Shipbuilding Corporation, Limited (CSSC) 709th Research Institute;
• China State Shipbuilding Corporation, Limited (CSSC) 710th Research Institute;
• China State Shipbuilding Corporation, Limited (CSSC) 711th Research Institute;
• China State Shipbuilding Corporation, Limited (CSSC) 712th Research Institute;
• China State Shipbuilding Corporation, Limited (CSSC) 713th Research Institute;
• China State Shipbuilding Corporation, Limited (CSSC) 714th Research Institute;
• China State Shipbuilding Corporation, Limited (CSSC) 715th Research Institute;
• China State Shipbuilding Corporation, Limited (CSSC) 716th Research Institute;
• China State Shipbuilding Corporation, Limited (CSSC) 717th Research Institute;
• China State Shipbuilding Corporation, Limited (CSSC) 718th Research Institute;
• China State Shipbuilding Corporation, Limited (CSSC) 719th Research Institute;
• China State Shipbuilding Corporation, Limited (CSSC) 723rd Research Institute;
• China State Shipbuilding Corporation, Limited (CSSC) 724th Research Institute;
• China State Shipbuilding Corporation, Limited (CSSC) 725th Research Institute;
• China State Shipbuilding Corporation, Limited (CSSC) 726th Research Institute;
• China State Shipbuilding Corporation, Limited (CSSC) 750th Test Center;
• China State Shipbuilding Corporation, Limited (CSSC) 760th Research Institute;
• Chongqing Chuandong Shipbuilding Industry Co., Ltd.;
• Chong Zhou;
• CSSC Huangpu Wenchong Shipbuilding Co., Ltd.;
• DJI;
• Guangxin Shipbuilding and Heavy Industry Co., Ltd.;
• Guangzhou Taicheng Shipbuilding Industry Co., Ltd.;
• Huisui Zhang;
• Jiangsu Hengxiang Science and Education Equipment Co., Ltd.;
• Jinping Chen;
• Kuang-Chi Group;
• Nanjing Asset Management Co., Ltd.;
• Nanjing University of Aeronautics and Astronautics;
• Nanjing University of Science and Technology;
• Ningbo Semiconductor International Corporation (NSI);
• ROFS Microsystems;
• Semiconductor Manufacturing International (Beijing) Corporation;
• Semiconductor Manufacturing International Corporation (SMIC);
• Semiconductor Manufacturing International (Shenzhen) Corporation;
• Semiconductor Manufacturing International (Tianjin) Corporation;
• Semiconductor Manufacturing South China Corporation;
• SJ Semiconductor;
• SMIC Holdings Limited;
• SMIC Northern Integrated Circuit Manufacturing (Beijing) Co., Ltd.;
• SMIC Semiconductor Manufacturing (Shanghai) Co., Ltd.
• Tianjin Micro Nano Manufacturing (MNMT);
• Tianjin University;
• Tongfang NucTech Technology Ltd.
• Wei Pang;
• Zhao Gang.
• France Tech Services;
• Satori Corporation.
• Maintenance Services International (MSI) GmbH;
• MRS GmbH.
• SMIC Hong Kong International Company Limited.
• Zigma Aviation.
• Feroz Ahmed Akbar;
• Sparx Air Ltd.
• Geo Research,
• Link Lines (Pvt.) Limited.
• Cosmos Complect;
• Ilias Kharesovich Sabirov;
• OOO Sovtest Comp.
• Satori Corporation;
• Sky Float Aviation FZE.
This final rule revises two existing entries, one under the destination China and one under the destination of Pakistan, as follows:
This rule implements a revision to one existing entry for “China Shipbuilding Group 722nd Research Institute,” first added to the Entity List under the destination of China on August 27, 2020 (85 FR 52901). BIS is revising the existing entry under China by revising the name and one alias. The ERC decided to modify the existing entry for China Shipbuilding Group 722nd Research Institute under China to reflect its correct organizational structure. The modification incorporates nomenclature into the existing Entity List entry that standardizes this entry with the 25 CSSC research institutes described above being added in this final rule.
This rule implements a revision to one existing entry for “Oriental Engineers,” first added to the Entity List under the destination of Pakistan on May 26, 2017 (82 FR 24245). BIS is revising the existing entry under Pakistan by adding four aliases and six addresses. The ERC determined to modify the existing entry for Oriental Engineers under Pakistan to account for additional aliases and addresses.
This rule implements a decision of the ERC to remove “Ben Gurion University,” one entity located in Israel, from the Entity List on the basis of a removal request. The entry for Ben Gurion University was added to the Entity List on February 3, 1997 (62 FR 4910). This rule also implements a decision of the ERC to remove “Dow Technology” “Hassan Dow” and “Modest Marketing LLC”, three entities located in the U.A.E., from the Entity List on the basis of removal requests. The entries for “Dow Technology” and “Hassan Dow” were added to the Entity List on February 23, 2016 (81 FR 8829). The entry for Modest Marketing LLC was added to the Entity List on January 26, 2018 (83 FR 3580). The ERC decided to remove these four entries based on information BIS received pursuant to § 744.16 of the EAR and the review the ERC conducted in accordance with procedures described in supplement No. 5 to part 744.
This final rule implements the decision to remove the following four entities, consisting of one entity located in Israel and three in the U.A.E., from the Entity List:
• Ben Gurion University.
• Dow Technology;
• Hassan Dow;
• Modest Marketing LLC.
Shipments of items removed from eligibility for a License Exception or export or reexport without a license (NLR) as a result of this regulatory action that were en route aboard a carrier to a port of export or reexport, on December 22, 2020, pursuant to actual orders for export or reexport to a foreign destination, may proceed to that destination under the previous eligibility for a License Exception or export or reexport without a license (NLR).
On August 13, 2018, the President signed into law the John S. McCain National Defense Authorization Act for Fiscal Year 2019, which included the Export Control Reform Act of 2018 (ECRA) (50 U.S.C. 4801-4852). ECRA provides the legal basis for BIS's principal authorities and serves as the authority under which BIS issues this rule.
1. Executive Orders 13563 and 12866 direct agencies to assess all costs and benefits of available regulatory alternatives and, if regulation is necessary, to select regulatory approaches that maximize net benefits (including potential economic, environmental, public health and safety effects, distributive impacts, and equity). Executive Order 13563 emphasizes the importance of quantifying both costs and benefits, of reducing costs, of harmonizing rules, and of promoting flexibility. This rule has been determined to be not significant for purposes of Executive Order 12866. This rule is not an Executive Order 13771 regulatory action because this rule is not significant under Executive Order 12866.
2. Notwithstanding any other provision of law, no person is required to respond to or be subject to a penalty for failure to comply with a collection of information, subject to the requirements of the Paperwork Reduction Act of 1995 (44 U.S.C. 3501
3. This rule does not contain policies with Federalism implications as that term is defined in Executive Order 13132.
4. Pursuant to § 1762 of the Export Control Reform Act of 2018, this action is exempt from the Administrative Procedure Act (5 U.S.C. 553) requirements for notice of proposed rulemaking, opportunity for public participation, and delay in effective date.
5. Because a notice of proposed rulemaking and an opportunity for public comment are not required to be given for this rule by 5 U.S.C. 553, or by any other law, the analytical requirements of the Regulatory Flexibility Act, 5 U.S.C. 601,
Exports, Reporting and recordkeeping requirements, Terrorism.
Accordingly, part 744 of the Export Administration Regulations (15 CFR parts 730-774) is amended as follows:
50 U.S.C. 4801-4852; 50 U.S.C. 4601
The additions and revisions read as follows:
Office of the Secretary, U.S. Department of Homeland Security; U.S. Customs and Border Protection, U.S. Department of Homeland Security.
Notification of continuation of temporary travel restrictions.
This document announces the decision of the Secretary of Homeland Security (Secretary) to continue to temporarily limit the travel of individuals from Canada into the United States at land ports of entry along the United States-Canada border. Such travel will be limited to “essential travel,” as further defined in this document.
These restrictions go into effect at 12 a.m. Eastern Standard Time (EST) on December 22, 2020 and will remain in effect until 11:59 p.m. EST on January 21, 2020.
Stephanie Watson, Office of Field Operations Coronavirus Coordination Cell, U.S. Customs and Border Protection (CBP) at 202-325-0840.
On March 24, 2020, DHS published notice of the Secretary's decision to temporarily limit the travel of individuals from Canada into the United States at land ports of entry along the United States-Canada border to “essential travel,” as further defined in that document.
The Secretary has continued to monitor and respond to the COVID-19 pandemic. As of the week of December 8, there have been over 65 million confirmed cases globally, with over 1.5 million confirmed deaths.
Given the outbreak and continued transmission and spread of COVID-19 within the United States and globally, the Secretary has determined that the risk of continued transmission and spread of the virus associated with COVID-19 between the United States and Canada poses an ongoing “specific threat to human life or national interests.”
U.S. and Canadian officials have mutually determined that non-essential travel between the United States and Canada poses additional risk of transmission and spread of the virus associated with COVID-19 and places the populace of both nations at increased risk of contracting the virus associated with COVID-19. Moreover, given the sustained human-to-human transmission of the virus, returning to previous levels of travel between the two nations places the personnel staffing land ports of entry between the United States and Canada, as well as the individuals traveling through these ports of entry, at increased risk of exposure to the virus associated with COVID-19. Accordingly, and consistent with the authority granted in 19 U.S.C. 1318(b)(1)(C) and (b)(2),
For purposes of the temporary alteration in certain designated ports of entry operations authorized under 19 U.S.C. 1318(b)(1)(C) and (b)(2), travel through the land ports of entry and ferry terminals along the United States-Canada border shall be limited to “essential travel,” which includes, but is not limited to—
• U.S. citizens and lawful permanent residents returning to the United States;
• Individuals traveling for medical purposes (
• Individuals traveling to attend educational institutions;
• Individuals traveling to work in the United States (
• Individuals traveling for emergency response and public health purposes (
• Individuals engaged in lawful cross-border trade (
• Individuals engaged in official government travel or diplomatic travel;
• Members of the U.S. Armed Forces, and the spouses and children of members of the U.S. Armed Forces, returning to the United States; and
• Individuals engaged in military-related travel or operations.
The following travel does not fall within the definition of “essential travel” for purposes of this Notification—
• Individuals traveling for tourism purposes (
At this time, this Notification does not apply to air, freight rail, or sea travel between the United States and Canada, but does apply to passenger rail, passenger ferry travel, and pleasure boat travel between the United States and Canada. These restrictions are temporary in nature and shall remain in effect until 11:59 p.m. EST on January 21, 2020. This Notification may be amended or rescinded prior to that time, based on circumstances associated with the specific threat.
The Commissioner of U.S. Customs and Border Protection (CBP) is hereby directed to prepare and distribute appropriate guidance to CBP personnel on the continued implementation of the temporary measures set forth in this Notification. The CBP Commissioner may determine that other forms of travel, such as travel in furtherance of economic stability or social order, constitute “essential travel” under this Notification. Further, the CBP Commissioner may, on an individualized basis and for humanitarian reasons or for other purposes in the national interest, permit the processing of travelers to the United States not engaged in “essential travel.”
The Acting Secretary of Homeland Security, Chad F. Wolf, having reviewed and approved this document, has delegated 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
Office of the Secretary, U.S. Department of Homeland Security; U.S. Customs and Border Protection, U.S. Department of Homeland Security.
Notification of continuation of temporary travel restrictions.
This document announces the decision of the Secretary of Homeland Security (Secretary) to continue to temporarily limit the travel of individuals from Mexico into the United States at land ports of entry along the United States-Mexico border. Such travel will be limited to “essential travel,” as further defined in this document.
These restrictions go into effect at 12 a.m. Eastern Standard Time (EST) on December 22, 2020 and will remain in effect until 11:59 p.m. EST on January 21, 2020.
Stephanie Watson, Office of Field Operations Coronavirus Coordination Cell, U.S. Customs and Border Protection (CBP) at 202-325-0840.
On March 24, 2020, DHS published notice of the Secretary's decision to temporarily limit the travel of individuals from Mexico into the United States at land ports of entry along the United States-Mexico border to “essential travel,” as further defined in that document.
The Secretary has continued to monitor and respond to the COVID-19
Given the outbreak and continued transmission and spread of COVID-19 within the United States and globally, the Secretary has determined that the risk of continued transmission and spread of the virus associated with COVID-19 between the United States and Mexico poses an ongoing “specific threat to human life or national interests.”
U.S. and Mexican officials have mutually determined that non-essential travel between the United States and Mexico poses additional risk of transmission and spread of the virus associated with COVID-19 and places the populace of both nations at increased risk of contracting the virus associated with COVID-19. Moreover, given the sustained human-to-human transmission of the virus, returning to previous levels of travel between the two nations places the personnel staffing land ports of entry between the United States and Mexico, as well as the individuals traveling through these ports of entry, at increased risk of exposure to the virus associated with COVID-19. Accordingly, and consistent with the authority granted in 19 U.S.C. 1318(b)(1)(C) and (b)(2),
For purposes of the temporary alteration in certain designated ports of entry operations authorized under 19 U.S.C. 1318(b)(1)(C) and (b)(2), travel through the land ports of entry and ferry terminals along the United States-Mexico border shall be limited to “essential travel,” which includes, but is not limited to—
• U.S. citizens and lawful permanent residents returning to the United States;
• Individuals traveling for medical purposes (
• Individuals traveling to attend educational institutions;
• Individuals traveling to work in the United States (
• Individuals traveling for emergency response and public health purposes (
• Individuals engaged in lawful cross-border trade (
• Individuals engaged in official government travel or diplomatic travel;
• Members of the U.S. Armed Forces, and the spouses and children of members of the U.S. Armed Forces, returning to the United States; and
• Individuals engaged in military-related travel or operations.
The following travel does not fall within the definition of “essential travel” for purposes of this Notification—
• Individuals traveling for tourism purposes (
At this time, this Notification does not apply to air, freight rail, or sea travel between the United States and Mexico, but does apply to passenger rail, passenger ferry travel, and pleasure boat travel between the United States and Mexico. These restrictions are temporary in nature and shall remain in effect until 11:59 p.m. EST on January 21, 2020. This Notification may be amended or rescinded prior to that time, based on circumstances associated with the specific threat.
The Commissioner of U.S. Customs and Border Protection (CBP) is hereby directed to prepare and distribute appropriate guidance to CBP personnel on the continued implementation of the temporary measures set forth in this Notification. The CBP Commissioner may determine that other forms of travel, such as travel in furtherance of economic stability or social order, constitute “essential travel” under this Notification. Further, the CBP Commissioner may, on an individualized basis and for humanitarian reasons or for other purposes in the national interest, permit the processing of travelers to the United States not engaged in “essential travel.”
The Acting Secretary of Homeland Security, Chad F. Wolf, having reviewed and approved this document, has delegated 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
Office of the Assistant Secretary for Housing-Federal Housing Commissioner, HUD.
Final rule.
Through the Section 542(c) Housing Finance Agency (HFA) Risk Sharing program, HUD enters into risk-sharing agreements with qualified state and local HFAs so they can provide FHA (Federal Housing Administration) mortgage insurance and credit enhancement for new loans on multifamily affordable housing properties. This final rule amends the program's existing regulations, to better align with the policies of other HUD programs, reflect current industry and HUD practices, and conform to statutory amendments. Additionally, this rule provides HUD with greater flexibility to operate the Section 542(c) HFA Risk Sharing program more efficiently and provides HFAs which accept a greater share of the risk of loss on mortgages insured under the program with expanded program delegation. This rule also updates outdated references and terminology and clarifies other provisions.
Effective January 21, 2021.
Carmelita A. James, Office of Multifamily Production, Office of Housing, Department of Housing and Urban Development, 451 7th Street SW, Room 6146, Washington, DC 20410; telephone number (202)-402-2579 (this is not a toll-free number). Persons with hearing or speech impairments may access this number through TTY by calling the toll-free Federal Relay Service at 800-877-8339.
Section 542 of the Housing and Community Development Act of 1992 (12 U.S.C. 1715z-22) (Section 542) directs HUD to carry out programs through FHA to demonstrate the effectiveness of providing new forms of Federal credit enhancement for loans on multifamily affordable housing properties which are underwritten, processed, serviced, and disposed of by HFAs. HUD and the HFAs share in the risk of loss, which enables the HFAs to provide more mortgage insurance and credit for new multifamily loans. Under the program, qualified state and local HFAs are delegated to originate and underwrite loans for new construction, substantial rehabilitation, acquisition, refinancing, and housing for the elderly. HFAs may elect to share from 10 to 90 percent of the loss on a mortgage with HUD. In the event of a claim, HFAs will reimburse HUD for their portion of the loss pursuant to their risk-sharing agreement's terms.
On March 8, 2016, HUD proposed a new rule to update the Section 542(c) HFA Risk Sharing regulations set out in 24 CFR part 266, which were last updated over fifteen years ago. Additional details about the proposed rule may be found at 81 FR 12051 (March 8, 2016).
This final rule follows publication of the March 8, 2016 proposed rule and considers the public comments received. HUD is adopting the proposed rule as final with no substantive changes.
HUD received eight public comments on the proposed rule from housing and finance agencies, a law firm, and other interested parties. One commenter did not discuss the proposed rule and therefore the comment will not be addressed here as it is outside the rulemaking's scope. In general, the comments received supported the rule, with no expressed opposition.
The comments largely contained requests for clarification, suggested technical changes, and provided additional recommendations. Several commenters stated the proposed rule's revisions were necessary updates that would help streamline the regulation, add flexibility, and make the program more effective. In addition, commenters stated they appreciated HUD's extensive outreach and exchanges with HFAs prior to issuing the proposed rule.
HUD appreciates the time that commenters took to provide helpful information and valuable suggestions.
The commenter stated further that Section 42(g) contains several LIHTC-specific concepts that may need to be disregarded when they are applied to non-LIHTC, Risk-Sharing projects. Further, Section 42(g) should not be interpreted as implying that cooperatives are not eligible for Risk Sharing. The commenter suggested clarifying the definition of affordable housing so that, for purposes of the Risk-Sharing regulations, any reference to a residential rental project in Section 42(g) includes cooperative projects.
In addition, the commenter stated that the proposed rule continues existing cooperative-related language from the current rule that is unnecessarily confusing because charges for a cooperative unit occupancy are said to be a form of utility allowance. Lastly, the commenter said it is awkward to refer to cooperative occupancy charges in such terms, which are otherwise known as “maintenance fees,” and the final rule should specify that gross rent,
The commenter also said it assumes that references to “general obligation bonds” in the rule mean bonds whose rating depends on the issuer's general ability to pay, and area proxy for an issuer rating, and are not intended to include general obligation bonds that also have pledged collateral that serves as the basis for the rating. The commenter said that the mere fact that loans are pledged does not necessarily mean they will be the basis for the bond rating, although they often are.
Commenters also asked HUD to clarify whether the requirement for a 20-year renewal of a HAP contract is deemed satisfied for projects with an existing HAP contract if the owner commits to a future extension upon the existing HAP contract's expiration, or if it requires that the owner enter into a new 20-year HAP contract at the closing on the loan. Commenters said the former should achieve HUD's policy goals and will avoid any potential detrimental impact on a project's appraised value that could result from extending HUD's use agreement now, as would be required upon certain types of HAP contract extensions.
Another commenter asked that HUD extend the flexibility provided for Section 202 projects to situations in which Risk-Sharing is used to finance loans for projects under other programs, such as M2M, Option 4 and some Option 5 LIHPRHA deals.
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 order's requirements. 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 final rule updates HUD's regulations pertaining to Housing Finance Agency Risk Sharing Program for Insured Affordable Multifamily Project Loans, codified in 24 CFR part 266. The program regulations were initially promulgated in 1994, with the last updates undertaken in 2000, but only to a few regulatory sections. This update is undertaken to reflect statutory changes and revise outdated references and older terminology. The rule also better aligns HUD's regulations with current industry and current HUD practices and policies. These changes would not create additional significant burdens for the public. As a result, this rule was determined not to be a significant regulatory action under section 3(f) of Executive Order 12866, Regulatory Planning and Review, and therefore was not reviewed by the Office of Management and Budget.
The Regulatory Flexibility Act (RFA) (5 U.S.C. 601
The regulatory amendments would update the regulations governing HUD's HFA Risk-Sharing program to conform to current industry practices and FHA policies with which HFAs and other program participants are already familiar. Other regulatory changes will provide greater flexibility for HFAs, alleviating administrative burdens and related program operating costs. While there may be some costs for HFAs to update their practices and procedures to reflect some of the regulatory changes, these costs are minimal in comparison to the streamlining benefits provided by the revised program regulations.
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 rule would not have Federalism implications and would not impose substantial direct compliance costs on state and local governments or preempt state law within the meaning of the Executive Order.
A Finding of No Significant Impact with respect to the environment was made prior to publication of the proposed rule in accordance with HUD regulations at 24 CFR part 50, which implement section 102(2)(C) of the National Environmental Policy Act of 1969 (42 U.S.C. 4332(2)(C)). The Finding of No Significant Impact remains applicable and is available for public inspection during regular business hours in the Regulations Division, Office of General Counsel, Department of Housing and Urban Development, 451 Seventh Street SW, Room 10276, Washington, DC 20410-0500. Due to security measures at the HUD Headquarters building, please schedule an appointment to review the Finding by calling the Regulations Division at (202) 402-3055 (this is not a toll-free number). Individuals with speech or hearing impairments may access this number via TTY by calling the Federal Relay Service at (800) 877-8339.
Title II of the Unfunded Mandates Reform Act of 1995 (Pub. L. 104-4; approved March 22, 1995) (UMRA) establishes requirements for Federal agencies to assess the effects of their regulatory actions on state, local, and tribal governments, and on the private sector. This proposed rule does not impose any Federal mandates on any state, local, or tribal government, or on the private sector, within UMRA's meaning.
The information collection requirements contained in this rule have been approved by 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 2502-0500. In accordance with the Paperwork Reduction Act of 1995, 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.
The Catalog of Federal Domestic Assistance (CFDA) Program number for the Housing Finance Agencies Section 542(c) Risk Sharing Program is 14.188.
Intergovernmental relations, Low and moderate income housing, Mortgage insurance, Reporting and recordkeeping requirements.
Accordingly, for the reasons stated above, HUD amends 24 CFR part 266 as follows:
12 U.S.C. 1715z-22.; 42 U.S.C. 3535(d).
(a)
(2) Section 542(c) of the Housing and Community Development Act of 1992 specifically directs HUD to carry out a program of risk-sharing with qualified State and local housing finance agencies (HFAs). The qualified HFAs are authorized to underwrite and process loans. HUD provides full mortgage insurance on affordable multifamily housing projects processed by such HFAs under this program. Through risk-sharing agreements with HUD, HFAs contract to reimburse HUD for a portion of the loss from any defaults that occur while HUD insurance is in force.
(3) The extent to which HUD directs qualified HFAs regarding their underwriting standards, loan terms and conditions, and asset management and servicing procedures is related to the proportion of the risk taken by an HFA.
(b)
The revisions read as follows:
The regulations at 24 CFR part 246, pertaining to local rent control, do not apply to projects that are security for mortgages insured under this part.
The revisions and addition read as follows:
(a)
(1) Carry an issuer credit rating of “A” or better, or an equivalent as evaluated by Standard and Poor's or any other nationally recognized rating agency; or
(6) * * *
(i) The Department of Justice has not brought a civil rights suit against the HFA, and no suit is pending;
(b) * * *
(1) Level I approval to originate, service, and dispose of multifamily mortgages where the HFA uses its own underwriting standards, loan terms and conditions, and asset management and servicing procedures, and assumes 50 to 90 percent of the risk of loss (in 10 percent increments).
(2) Level II approval to originate, service, and dispose of multifamily mortgages where the HFA uses underwriting standards, loan terms and conditions, and asset management and servicing procedures approved by HUD, and:
(3) For HFAs who plan to use Level I and Level II processing, the underwriting standards, loan terms and conditions, and asset management and servicing procedures to be used on Level II loans must be approved by HUD.
(4) Every five years, HUD will review the underwriting standards, loan terms and conditions, and asset management and servicing procedures for HFAs with Level II approval. HUD may require changes to these procedures as a condition for continued Level II approval.
(b)
(a)
(b) * * *
(1) * * * The account must be established prior to the execution of any risk-sharing agreement under this part in an initial amount of not less than $500,000. * * *
(d) Actions or conduct for which sanctions may be imposed against the HFA by HUD's Mortgagee Review Board under 24 CFR 25.9, which pertains to “notice of administrative action”.
(e) * * *
(5) Maintain an issuer credit rating of “A” or better, or an equivalent designation, or overall rating of “A” on general obligation bonds (or if such rating is lost, comply with paragraph (e)(6) of this section);
(a) * * *
(6) Recommend to the Commissioner that the HFA's mortgagee approval be withdrawn pursuant to 24 CFR part 25 (regulations of the Mortgagee Review Board) and/or that penalties be imposed pursuant to 24 CFR part 30 (regulations pertaining to Civil Money Penalties; Certain Prohibited Contact);
(8) Require the HFA to revise any or all of its underwriting, processing, asset management, or servicing policies and procedures as directed by the Commissioner.
(d) * * *
(1) Any sanction imposed by a designated office in writing will be immediately effective, will state the grounds for the action, and provide for the HFA's right to an informal hearing before the designated office representative or designee in the designated office. * * *
The revisions and addition read as follows:
(b) * * *
(2)
(c)
(1) If the financing will result in the preservation of affordable housing,
(2) Project occupancy is not less than 93 percent (to include consideration of rent in arrears), based on the average occupancy in the project over the most recent 12 months; and
(3) The loan to be refinanced has not been in default within the 12 months prior to the date of the application for refinancing; and
(4) A capital needs assessment is performed, and funds escrowed for all necessary repairs and replacement reserves funded for future capital repairs; and
(5) If the project is subject to a Housing Assistance Payment (HAP) contract, and is not a project financed under section 202 of the Housing Act of 1959 (12 U.S.C. 1701q) by a Level I participant, then:
(i) The owner of the property agrees to renew the HAP contract for a 20-year term;
(ii) Existing and post-refinance HAP residual receipts are set aside to be used to reduce future HAP payments; and
(iii) The HUD-insured mortgage does not exceed an amount supportable by the lower of the unit rents being collected under the rental assistance agreement or the unit rents being collected at unassisted projects in the market area that are similar in amenities and location to the project for which insurance is being requested; and
(6) For Level II participants only, the HUD-insured mortgage may not exceed the sum of the existing indebtedness, cost of refinancing, or acquisition, the cost of repairs and reasonable transaction costs as determined by the Commissioner. (This paragraph does not apply to Level I participants.)
(d)
(e)
(g)
(h)
The revisions read as follows:
(c)
(d)
(e)
The responsible entity, as defined in 24 CFR part 58 (Environmental Review Procedures for Entities Assuming HUD Environmental Responsibilities), assumes legal responsibility for compliance with the requirements of the National Environmental Policy Act of 1969 and related laws and authorities. The responsible entity will visit each project site proposed for insurance under this part and prepare the applicable environmental reviews as set forth in 24 CFR part 58. HUD may make a finding in accordance with 24 CFR 58.11, Legal Capacity and Performance, and may perform the environmental review itself under 24 CFR part 50 (Protection and Enhancement of Environmental Quality). In all cases the environmental review must be completed before HUD may issue the firm approval letter.
The mortgagor must certify to the HFA that, so long as the mortgage is insured under this part, the mortgagor will:
(a) Not use tenant selection procedures that discriminate against families with children, except in the case of a project qualifying for and complying with the requirements of the “housing for older persons” exemption, as defined in section 807(b)(2) of the Fair Housing Act (42 U.S.C. 3607(b)) and further described in 24 CFR part 100, subpart E. Projects receiving Federal financial assistance in which elderly families include minor children may not avail themselves of the housing for older persons exemption;
(b) Determine eligibility for admission and continued occupancy without regard to actual or perceived sexual orientation, gender identity, or marital status and refrain from inquiries about sexual orientation and gender identity in accordance with 24 CFR 5.105(a)(2);
(c)(1) Comply with:
(i) The Fair Housing Act (42 U.S.C. 3601 through 3619), as implemented by 24 CFR part 100;
(ii) Titles II and III of the Americans with Disabilities Act of 1990 (42 U.S.C. 12101 through 12213), as implemented by 28 CFR part 35;
(iii) Section 3 of the Housing and Urban Development Act of 1968 (12 U.S.C. 1701u), as implemented by 24 CFR part 135;
(iv) The Equal Credit Opportunity Act (15 U.S.C. 1691-1691f), as implemented by 12 CFR part 202;
(v) Executive Order 11063, as amended by Executive Order 12259 (3 CFR 1958-1963 Comp., p. 652 and 3 CFR 1980 Comp., p. 307), and implemented by 24 CFR part 107;
(vi) Executive Order 11246 (3 CFR 1964-1965 Comp., p. 339), as implemented by 41 CFR part 60; and
(vii) Other applicable Federal laws and regulations issued pursuant to these authorities; and applicable State and local fair housing and equal opportunity laws.
(2) In addition to the authorities listed in paragraph (c)(1) of this section, a mortgagor that receives Federal financial assistance must also certify to the HFA that, so long as the mortgage is insured under this part, it will comply with:
(i) Title VI of the Civil Rights Act of 1964 (42 U.S.C. 2000d), as implemented by 24 CFR part 1;
(ii) The Age Discrimination Act of 1975 (42 U.S.C. 6101 through 6107), as implemented by 24 CFR part 146; and
(iii) Section 504 of the Rehabilitation Act of 1973 (29 U.S.C. 794), as implemented by 24 CFR part 8.
(a) * * *
(1) All laborers and mechanics employed by contractors or subcontractors on a project insured under this part shall be paid not less than the wages prevailing in the locality in which the work was performed for the corresponding classes of laborers and mechanics employed in construction of a similar character, as determined by the Secretary of the U.S. Department of Labor (Secretary of Labor) in accordance with the Davis-Bacon Act, as amended (40 U.S.C. 3141
(i) Advances for construction of the project are insured under this part;
(b)
(c)
(d) * * *
(1) No advance under a mortgage on a project subject to Davis-Bacon wage rates under paragraph (a) of this section shall be eligible for insurance under this part unless the HFA determines (in accordance with the Commissioner's administrative procedures) that the general contractor or any subcontractor or any firm, corporation, partnership or association in which the contractor or subcontractor has a substantial interest was not, on the date the contract or subcontract was executed, on the ineligible list established by the Comptroller General of the United States, pursuant to 29 CFR 5.12, issued by the Secretary of Labor.
(e) * * * Where routine administration and enforcement functions are delegated to the HFA, the HFA shall bear financial responsibility for any deficiency in payment of prevailing wages or, where applicable under 29 CFR part 1 (Procedures for Predetermination of Wage Rates), any increase in compensation to a contractor, that is attributable to any failure properly to carry out its delegated functions. * * *
The revisions and addition read as follows:
(b) * * *
(1) Determine that a market for the project exists, taking into consideration any comments from the local HUD office relative to the potential adverse impact the project will have on existing or proposed Federally insured and assisted projects in the area.
(3) Arrange for the performance of an environmental review in accordance with § 266.217;
(5) Approve the Affirmative Fair Housing Marketing Plan, required by § 266.215(a); and
(c)
The revisions and additions read as follows:
(a)
(b) * * *
(1) Determine that a market for the project exists, taking into consideration any comments from the local HUD office relative to the potential adverse impact the project will have on existing or proposed Federally insured and assisted projects in the area;
(3) Arrange for the performance of an environmental review in accordance with § 266.217;
(5) Approve the Affirmative Fair Housing Marketing Plan, required by § 266.215(a); and
(c)
(e)
(1) Construction loans, or
(2) Level I participants where the loan has a minimum term of 17 years that would amortize over a maximum period of 40 years and the HFA's underwriting standards, loan terms and conditions, and asset management and servicing procedures have been approved by HUD.
(a) * * * The note must provide that the mortgage is insured under section 542(c) of the Housing and Community Development Act of 1992 and the regulations set forth in this part that are in effect on the date of endorsement. * * *
(b) * * *
(3) Certification that the loan has been processed, prudently underwritten (including a determination that a market exists for the project), cost certified (if the project is being submitted for final endorsement) and closed in full compliance with the HFA's standards and requirements (or where the mortgage is insured under Level II, in full compliance with the underwriting standards, loan terms and conditions, and asset management and servicing procedures, as approved by HUD).
(4) At the time of final endorsement, for periodic advances cases, a certification that the advances were made in accordance with the mortgage pursuant to § 266.310.
(7) A certification that the HFA has reviewed and approved the Affirmative Fair Housing Marketing Plan, required by § 266.215(a), and found it acceptable.
(13) Certification that housing claiming the housing for older persons exemption is eligible for and complies with 42 U.S.C. 3607(b) and 24 CFR part 100, subpart E.
(a)
(b)
The mortgagor must maintain the project in accordance with the physical condition standards in 24 CFR part 5, subpart G (Physical Condition Standards and Inspection Requirements).
(a)
(a)
(b)
(c)
(a)
(b)
(c)
(d)
(a)
(b)
(c)
(d)
The revision and addition read as follows:
(b) In lieu of termination of the mortgage insurance contract pursuant to paragraph (a)(5) of this section, the Commissioner may, in his or her full discretion, permit a Level I participant rated “A” or higher to indemnify HUD, or otherwise reimburse HUD in a manner acceptable to the Commissioner, for the full amount of the mortgage claim.
(c)
(d)
(a) * * *
(3) The HFA must use the proceeds of the initial claim payment to retire any bonds or any other financing mechanisms securing the mortgage within 30 calendar days of the initial claim payment. Any excess funds resulting from such retirement or repayment shall be returned to HUD within 30 calendar days of the retirement.
(c) * * *
(2) * * * The HFA is granted an extension of 30 calendar days from the date of any notification for further action.
(d)
(2)
(4)
(5) * * * The HFA must submit a final certified statement within 30 calendar days after the second mortgage is paid in full, foreclosed, or otherwise terminated.
(a) All amounts received by the HFA on account of the mortgage after the date of default, including any partial payment of claim paid by HUD in the event a full claim follows a partial payment of claim;
Internal Revenue Service (IRS), Treasury.
Final regulations.
These final regulations provide the procedures under section 6402(n) of the Internal Revenue Code (Code) for identification and recovery of a misdirected direct deposit refund. The final regulations reflect changes to the law made by the Taxpayer First Act. The final regulations affect taxpayers who have made a claim for refund, requested the refund be issued as a direct deposit, but did not receive a refund in the account designated on the claim for refund.
Mary C. King at (202) 317-5433 (not a toll-free number).
This document contains amendments to 26 CFR part 301 under section 6402(n) of the Code and provides guidance on the procedures used to identify and recover tax refunds issued by electronic funds transfer (direct deposit) that were not delivered to the account designated to receive the direct deposit refund on the federal tax return or other claim for refund. Section 6402(n) was added to the Code by section 1407 of the Taxpayer First Act, Public Law 116-25, 133 Stat. 981 (2019) (TFA) on July 1, 2019. On December 23, 2019, the Department of the Treasury (Treasury Department) and the IRS published in the
After consideration of the written comment, this Treasury Decision adopts the proposed regulations as final regulations with minor modifications, as described in the Summary of Comments and Explanation of Provisions. A detailed explanation of these regulations can be found in the preamble to the proposed regulations.
The Treasury Department and the IRS received one comment regarding the proposed regulations. After consideration of the comment, the proposed regulations are adopted as final regulations without any substantive changes.
A commenter expressed a concern that the procedures in these regulations would not apply to claims for refund from taxable years before the applicability date of the final regulations. The commenter requested that the procedures should be applied to refund claims for prior years. Consistent with the comment, the final regulations clarify that these procedures apply to any report of a misdirected direct deposit refund for a current or prior year submitted after the publication of the final regulations in the
Section 301.6402-2(g)(1) of the proposed regulations defines “misdirected direct deposit refund” as any refund of an overpayment of tax that is disbursed as a direct deposit but is not deposited into the account designated on the claim for refund to receive the direct deposit refund. The proposed regulations include in the definition of a misdirected direct deposit refund only those refunds which are actually issued as a direct deposit. A misdirected direct deposit refund does not include an overpayment that is credited against another outstanding tax liability of the taxpayer pursuant to section 6402(a) or that is offset pursuant to the law. An overpayment that is offset or applied as mandated by law is not a misdirected direct deposit refund because these actions are mandated by law. Section 301.6402-2(g)(1) of the final regulations clarifies this by striking the last sentence from the proposed regulations, as it is not needed to define a “misdirected direct deposit refund.” Instead, the final regulations clarify in section 301.6402-2(g)(3)(i) that the offset or setoff of an overpayment occurs prior to the issuance of a direct deposit. The IRS will determine if a reported missing refund is setoff or offset as part of the procedure for the identification of the account that received the misdirected direct deposit refund. This reorganization simplifies the definition of a misdirected direct deposit refund and more accurately describes the process of identification of a misdirected direct deposit refund.
The final regulations reflect this clarification to the definition of a misdirected direct deposit refund and the identification procedure, but the proposed regulations are otherwise adopted without change.
This regulation is not subject to review under section 6(b) of Executive Order 12866 pursuant to the Memorandum of Agreement (April 11, 2018) between the Treasury Department and the Office of Management and Budget regarding review of tax regulations.
These regulations do not impose any additional information collection requirements in the form of reporting, recordkeeping requirements, or third-party disclosure requirements related to tax compliance. However, because a taxpayer or a taxpayer's representative may elect to report a missing refund using the procedures described in § 301.6402-2(g)(2)(ii)(B), some taxpayers may use a form to report a missing refund. The collection of information in § 301.6402-2(g)(2)(ii)(B) is through use of a Form 3911, “Taxpayer Statement Regarding Refund,” and is the sole collection of information requirement established by the final regulations.
For the purposes of the Paperwork Reduction Act, 44 U.S.C. 3501-3520, the reporting burden associated with the
It is hereby certified that these regulations will not have a significant economic impact on a substantial number of small entities within the meaning of section 601(6) of the Regulatory Flexibility Act (5 U.S.C. chapter 6). The certification is based on the information that follows. There is no significant impact from these regulations on any small entity utilizing the procedures prescribed by these regulations to report a missing refund because there is no significant cost associated with reporting a missing refund. There is no fee charged in connection with reporting a missing refund, and the estimated time to complete a Form 3911, “Taxpayer Statement Regarding Refund,” is five minutes. There are no tax consequences associated with the final rule, as it merely sets forth the procedures for reporting a missing refund and describes the process the IRS uses in locating a missing refund and, in some instances, issuing a replacement refund. The process in these regulations mirrors the existing process and does not change the reporting burden. Accordingly, the Treasury Department and the IRS have determined that this Treasury Decision will not have a significant economic impact on a substantial number of small entities. Pursuant to section 7805(f) of the Code, the notice of proposed rulemaking preceding this regulation was submitted to the Chief Counsel for Advocacy of the Small Business Administration for comment on its impact on small business entities, and no comments were received.
Section 202 of the Unfunded Mandates Reform Act of 1995 requires that agencies assess anticipated costs and benefits and take certain other actions before issuing a final rule that includes any Federal mandate that may result in expenditures in any one year by a state, local, or tribal government, in the aggregate, or by the private sector, of $100 million in 1995 dollars, updated annually for inflation. This regulation does not include any Federal mandate that may result in expenditures by state, local, or tribal governments, or by the private sector in excess of that threshold.
Executive Order 13132 (titled 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 preempts state law, unless the agency meets the consultation and funding requirements of section 6 of the Executive Order. This rule does not have federalism implications and does not impose substantial direct compliance costs on state and local governments or preempt state law, within the meaning of the Executive Order.
The principal author of these regulations is Mary C. King of the Office of the Associate Chief Counsel (Procedure and Administration). Other personnel from the Treasury Department and the IRS participated in the development of the regulations.
Employment taxes, Estate taxes, Excise taxes, Gift taxes, Income taxes, Penalties, Reporting and recordkeeping requirements.
Accordingly, 26 CFR part 301 is amended as follows:
26 U.S.C. 7805 * * *
Section 301.6402-2(g) also issued under 26 U.S.C. 6402(n).
The additions and revision read as follows:
(g)
(2)
(ii)
(A) By calling the IRS;
(B) On the form prescribed by the IRS and in accordance with the applicable publications, instructions, or other appropriate guidance;
(C) By contacting the Office of the Taxpayer Advocate by telephone, by mail, facsimile, or in person; or
(D) By submitting the appropriate form in person at a Taxpayer Assistance Center.
(3)
(ii)
(4)
(5)
(h)
Coast Guard, DHS.
Temporary final rule.
The Coast Guard is establishing a temporary safety zone for certain waters in the navigable waters of Tampa Bay, Gibsonton, FL. The safety zone is needed to protect personnel, vessels, and the marine environment from potential hazards created by pipeline pressure testing in the area. Entry of vessels or persons into this zone is prohibited unless specifically authorized by the Captain of the Port St. Petersburg.
This rule is effective from 12:01 a.m. on January 1, 2021, through 7:00 a.m. on January 4, 2021.
To view documents mentioned in this preamble as being available in the docket, go to
If you have questions on this rule, call or email Marine Science Technician First Class Michael D. Shackleford, Sector St. Petersburg Prevention Department, Coast Guard; telephone (813) 228-2191, email
The Coast Guard is issuing this temporary rule without prior notice and opportunity to comment pursuant to authority under section 4(a) of the Administrative Procedure Act (APA) (5 U.S.C. 553(b)). This provision authorizes an agency to issue a rule without prior notice and opportunity to comment when the agency for good cause finds that those procedures are “impracticable, unnecessary, or contrary to the public interest.” Under 5 U.S.C. 553(b)(B), the Coast Guard finds that good cause exists for not publishing a notice of proposed rulemaking (NPRM) with respect to this rule because it would be impracticable. The Coast Guard was unable to publish an NPRM and hold a comment period for this rulemaking due to the short time period the Captain of the Port St. Petersburg (COTP) was notified of the need for the safety zone. It is necessary for the Coast Guard to establish this safety zone by January 1, 2021, in order to ensure the appropriate level of protection exists in order to mitigate the potential safety hazards associated with pipeline pressure testing in the event of an explosion.
Under 5 U.S.C. 553(d)(3), the Coast Guard finds that good cause exists for making this rule effective less than 30 days after publication in the
The Coast Guard is issuing this rule under authority in 46 U.S.C. 70034. The COTP has determined that potential hazards associated with pipeline pressure testing starting January 1, 2021 will be a safety concern for anyone within this safety zone in the event of an explosion. This rule is needed to protect personnel, vessels, and the marine environment in the navigable waters within the safety zone while the testing is occuring.
This rule establishes a safety zone from 12:00 a.m. on January 1, 2021, until 7:00 a.m. on January 4, 2021. The safety zone will cover all navigable waters of Tampa Bay, east of a line formed by connecting the points of 27°48′9″ N, 082°24′56″ W and 27°48′0″ N, 082°24′56″ W. The duration of the zone is intended to protect personnel, vessels, and the marine environment in these navigable waters while pipeline pressure testing is occuring. No vessel or person will be permitted to enter the safety zone without obtaining permission from the COTP or a designated representative.
We developed this rule after considering numerous statutes and Executive orders related to rulemaking. Below we summarize our analyses based on a number of these statutes and Executive orders, and we discuss First Amendment rights of protestors.
Executive Orders 12866 and 13563 direct agencies to assess the costs and benefits of available regulatory alternatives and, if regulation is necessary, to select regulatory approaches that maximize net benefits. Executive Order 13771 directs agencies to control regulatory costs through a budgeting process. This rule has not been designated a “significant regulatory action,” under Executive Order 12866. Accordingly, this rule has not been reviewed by the Office of Management and Budget (OMB), and pursuant to OMB guidance it is exempt from the requirements of Executive Order 13771.
This regulatory action determination is based on the size, location, duration, and time-of-day of the safety zone. This area of Tampa Bay is not in a critical navigation area.
The Regulatory Flexibility Act of 1980, 5 U.S.C. 601-612, as amended, requires Federal agencies to consider the potential impact of regulations on small entities during rulemaking. The term “small entities” comprises small businesses, not-for-profit organizations that are independently owned and operated and are not dominant in their fields, and governmental jurisdictions with populations of less than 50,000. The Coast Guard certifies under 5 U.S.C. 605(b) that this rule will not have a significant economic impact on a substantial number of small entities.
While some owners or operators of vessels intending to transit the safety zone may be small entities, for the reasons stated in section V.A above, this rule will not have a significant economic impact on any vessel owner or operator.
Under section 213(a) of the Small Business Regulatory Enforcement Fairness Act of 1996 (Pub. L. 104-121), we want to assist small entities in understanding this rule. If the rule would affect your small business, organization, or governmental jurisdiction and you have questions concerning its provisions or options for compliance, please call or email the person listed in the
Small businesses may send comments on the actions of Federal employees who enforce, or otherwise determine compliance with, Federal regulations to the Small Business and Agriculture Regulatory Enforcement Ombudsman and the Regional Small Business Regulatory Fairness Boards. The Ombudsman evaluates these actions annually and rates each agency's responsiveness to small business. If you wish to comment on actions by employees of the Coast Guard, call 1-888-REG-FAIR (1-888-734-3247). The Coast Guard will not retaliate against small entities that question or complain about this rule or any policy or action of the Coast Guard.
This rule will not call for a new collection of information under the Paperwork Reduction Act of 1995 (44 U.S.C. 3501-3520).
A rule has implications for federalism under Executive Order 13132, Federalism, if it has a substantial direct effect on the States, on the relationship between the National Government and the States, or on the distribution of power and responsibilities among the various levels of government. We have analyzed this rule under that Order and have determined that it is consistent with the fundamental federalism principles and preemption requirements described in Executive Order 13132.
Also, this rule does not have tribal implications under Executive Order 13175, Consultation and Coordination with Indian Tribal Governments, because it does not have a substantial direct effect on one or more Indian tribes, on the relationship between the Federal Government and Indian tribes, or on the distribution of power and responsibilities between the Federal Government and Indian tribes.
The Unfunded Mandates Reform Act of 1995 (2 U.S.C. 1531-1538) requires Federal agencies to assess the effects of their discretionary regulatory actions. In particular, the Act addresses actions that may result in the expenditure by a State, local, or tribal government, in the aggregate, or by the private sector of $100,000,000 (adjusted for inflation) or more in any one year. Though this rule will not result in such an expenditure, we do discuss the effects of this rule elsewhere in this preamble.
We have analyzed this rule under Department of Homeland Security Directive 023-01, Rev. 1, associated implementing instructions, and Environmental Planning COMDTINST 5090.1 (series), which guide the Coast Guard in complying with the National Environmental Policy Act of 1969 (42 U.S.C. 4321-4370f), and have determined that this action is one of a category of actions that do not individually or cumulatively have a significant effect on the human environment. This rule involves a safety zone lasting approximately 4 days that will prohibit entry to all navigable waters of Tampa Bay, east of a line formed by connecting the points of 27°48′9″ N, 082°24′56″ W and 27°48′0″ N, 082°24′56″ W. It is categorically excluded from further review under paragraph L60 of Appendix A, Table 1 of DHS Instruction Manual 023-01-001-01, Rev. 1. A Memorandum for Record supporting this determination is available in the docket. For instructions on locating the docket, see the
The Coast Guard respects the First Amendment rights of protesters. Protesters are asked to call or email the person listed in the
Harbors, Marine safety, Navigation (water), Reporting and recordkeeping requirements, Security measures, Waterways.
For the reasons discussed in the preamble, the Coast Guard amends 33 CFR part 165 as follows:
46 U.S.C. 70034; 46 U.S.C. 70051; 33 CFR 1.05-1, 6.04-1, 6.04-6, and 160.5; Department of Homeland Security Delegation No. 0170.1.
(a)
(b)
(c)
(2) Designated representatives may control vessel traffic throughout the enforcement area as determined by the prevailing conditions.
(3) Persons and vessels may request authorization to enter, transit through, anchor in, or remain within the regulated areas by contacting the Captain of the Port St. Petersburg by telephone at (727) 824-7506, or a designated representative via VHF radio on channel 16. If authorization is granted by the Captain of the Port St. Petersburg or a designated representative, all persons and vessels receiving such authorization must comply with the instructions of the Captain of the Port St. Petersburg or a designated representative.
(d)
Postal Service
Final action.
On October 15, 2020, the Postal Service published proposed product and price changes to reflect a notice of price adjustments filed with the Postal Regulatory Commission (PRC). The PRC found that price adjustments contained in the Postal Service's notification may go into effect on January 24, 2021. The Postal Service will revise Notice 123,
The revisions to Notice 123,
Kathy Frigo at 202-268-4178.
On October 9, 2020, the Postal Service filed a notice with the PRC in Docket Number R2021-1 of mailing services price adjustments to be effective on January 24, 2021. On October 15, 2020, USPS® published a notification of proposed product and price changes in the
As stated in the PRC's Order No. 5757, issued on November 18, 2020, in PRC Docket No. R2021-1, the PRC found that the prices in the Postal Service's notification may go into effect on January 24, 2021. The new prices will accordingly be posted in Notice 123,
Postal Service
Final rule.
On October 9, 2020, the Postal Service (USPS®) filed a notice of mailing services price adjustments with the Postal Regulatory Commission (PRC), effective January 24, 2021. This final rule contains the revisions to
Jacqueline Erwin at (202) 268-2158 or Dale Kennedy at (202) 268-6592.
On November 18, 2020, the PRC favorably reviewed the price adjustments proposed by the Postal Service. The price adjustments and DMM revisions are scheduled to become effective on January 24, 2021. Final prices are available under Docket No. R2021-1 (Order No. 5757) on the Postal Regulatory Commission's website at
USPS is providing a $.001 per mailpiece incentive. The incentive is available for First-Class Mail, USPS Marketing Mail, Periodicals and Bound Printed Matter mail flats that use the Full-Service Intelligent Mail barcode (IMb) option. The change provides an incentive to the Electronic Documentation (eDoc) submitters (with a Seamless CRID and an Enterprise Payment System Account) for adoption of the program. The incentive would be based on the eDoc submitter's Customer Registration ID (CRID).
A Seamless Mailer is defined by their CRID's status in PostalOne! as “Seamless Acceptance.” Note: Seamless Parallel does not qualify for the discount. The proposal is to allow Electronic Documentation (eDoc) submitters to receive a Seamless Acceptance incentive for the pieces that claim Full-Service prices in the mailing, provided the eDoc submitter has an Enterprise Payment account that is used for the incentive.
• The incentive is available to all eDoc submitters with a Seamless Acceptance CRID and an Enterprise Payment account who enroll in PostalOne!
• The incentive is applied to the Enterprise Payment account that corresponds with the permit selected during registration to receive the discount.
• A permit that corresponds with an Enterprise Payment trust or ACH debit account must be selected, in
•
•
•
• Intelligent Mail for Small Business—Mailing Agent CRID (same as Permit Holder CRID) is used as the eDoc Submitter CRID.
• Business Mail Entry Unit—Hard-copy Postage Statement entry (only for contingency)—Mailing Agent CRID must be populated on the Postage Statement.
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The Postal Service did not receive any formal comments on the October 15, 2020 proposed rule (85 FR 65311).
Administrative practice and procedure, Postal Service.
The Postal Service adopts the following changes to
Accordingly, 39 CFR part 111 is amended as follows:
5 U.S.C. 552(a); 13 U.S.C. 301-307; 18 U.S.C. 1692-1737; 39 U.S.C. 101, 401, 403, 404, 414, 416, 3001-3011, 3201-3219, 3403-3406, 3621, 3622, 3626, 3632, 3633, and 5001.
We will publish an appropriate amendment to 39 CFR part 111 to reflect these changes.
National Marine Fisheries Service (NMFS), National Oceanic and Atmospheric Administration (NOAA), Commerce.
Final rule; notification of issuance of Letters of Authorization.
Upon application from Hilcorp Alaska, LLC (Hilcorp) and Eni US Operating Co. Inc. (Eni), NMFS is issuing regulations under the Marine Mammal Protection Act (MMPA) for the taking of small numbers of marine mammals incidental to ice road and ice trail construction, maintenance, and operation in Alaska's North Slope, over the course of 5 years (2020-2025). These regulations allow NMFS to issue Letters of Authorization (LOA) for the incidental take of marine mammals during the specified construction and maintenance activities carried out during the rule's period of effectiveness, set forth the permissible methods of taking, set forth other means of effecting the least practicable adverse impact on marine mammal species or stocks and their habitat, and set forth requirements pertaining to the monitoring and reporting of the incidental take.
Effective December 22, 2020 through November 30, 2025.
To obtain an electronic copy of the Hilcorp-Eni's LOA application or other referenced documents, visit the internet at:
Shane Guan, Office of Protected Resources, NMFS, (301) 427-8401.
This final rule establishes a framework under the authority of the MMPA (16 U.S.C. 1361
We received an application from Hilcorp and Eni requesting 5-year regulations and authorization to take marine mammals. Take would occur by Level B harassment, Level A harassment and serious injury and/or mortality incidental to ice roads and ice trails construction and maintenance. Please see Background below for definitions of harassment.
Section 101(a)(5)(A) of the MMPA (16 U.S.C. 1371(a)(5)(A)) directs the Secretary of Commerce to allow, upon request, the incidental, but not intentional taking of small numbers of marine mammals by U.S. citizens who engage in a specified activity (other than commercial fishing) within a specified geographical region for up to 5 years if, after notice and public comment, the agency makes certain findings and issues regulations that set forth permissible methods of taking pursuant to that activity and other means of effecting the “least practicable adverse impact” on the affected species or stocks and their habitat (see the discussion below in the Mitigation section), as well as monitoring and reporting requirements. Section 101(a)(5)(A) of the MMPA and the implementing regulations at 50 CFR part 216, subpart I provide the legal basis for issuing this rule containing 5-year regulations and for any subsequent LOAs. As directed by this legal authority, this rule contains mitigation, monitoring, and reporting requirements.
Following is a summary of the major provisions of this rule regarding Hilcorp and Eni's construction activities. These measures include:
• No initiation of ice road or trail construction if a ringed seal is observed within approximately 46 meters (m) (150 feet (ft)) of the action area after March 1 through May 30 of each year.
• Requiring monitoring of the construction areas to detect the presence of marine mammals before beginning construction activities.
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.
The definitions of all applicable MMPA statutory terms cited above are included in the relevant sections below.
NMFS received a joint application from Hilcorp and Eni requesting authorization for take of marine mammals incidental to construction activities related to ice roads and ice trails in the North Slope, Alaska. The application was determined to be adequate and complete on May 31, 2019. The requested regulations would be valid for 5 years, from December 22, 2020 through November 30, 2025. Hilcorp and Eni plan to conduct necessary work, including use of heavy machinery on ice, to facilitate access to North Slope offshore oil and gas facilities. The action may incidentally expose marine mammals occurring in the vicinity to elevated levels of sound, human presence on ice habitat, and interactions with heavy machinery, thereby resulting in incidental take, by Level A and Level B harassment and serious injury or mortality. Since Hilcorp and Eni's ice roads and trails construction and maintenance activities have the potential to cause serious injury or mortality to a few ringed seals, an LOA is appropriate. On January 17, 2020, NMFS published a proposed rule (85 FR 2988) and proposed regulations to govern takes of marine mammals incidental to Hilcorp and Eni's ice roads and trails construction and maintenance activities, and requested comments on the proposed regulations.
Hilcorp and Eni conduct oil and gas operations at Northstar Production Facility (Northstar) and Spy Island Drillsite (SID), respectively, in coastal Beaufort Sea, Alaska. During the ice-covered season, Hilcorp constructs annual ice roads and trails to connect and allow access between West Dock and Northstar. Similarly, Eni builds and utilizes an ice road connecting the Oliktok Production Pad (OPP) and SID. Eni also builds an annual ice road from shore to the Oooguruk Drill Site (ODS) (Figures 1-4). This regulation and the implementing LOAs authorize takes of marine mammals incidental to Hilcorp and Eni's ice roads and ice trails construction during the ice-covered season on Alaska's North Slope.
Both Hilcorp and Eni generally begin constructing sea ice roads and ice trails as early as possible, usually by late December depending on weather. Maintenance and use of the ice roads and trails continue generally through mid-May when the ice becomes too unstable to access. Depending on the weather, from the initial surveying until the ice is thick enough to allow travel by wheeled vehicles, ice road construction takes about six weeks.
Northstar, an artificial gravel island, is located in State of Alaska coastal waters about 9.7 kilometers (km) (6 miles (mi)) offshore from Point Storkersen in the Beaufort Sea (Figure 1). Water depth at the island is about 12 m (39 ft). This region is covered by landfast ice in winter and with water depths greater than 3 m (10 ft).
The 0.05 square kilometer (km
The ODS consists of a 0.024 km
Each year during the ice-covered season an approximately 11.7 km (7.3 mi) long ice road is constructed between Northstar and the Prudhoe Bay facilities at West Dock to transport personnel, equipment, materials, and supplies (Figure 1). Ice roads allow standard vehicles such as pick-up trucks, SUVs, buses and other trucks to be used to transport personnel and equipment to and from the island during the ice-covered period.
In some years depending on operational needs and weather conditions, Hilcorp may elect to not build the main improved ice road. In this case, a primary ice trail that can support only tracked, lighter-weight vehicles would be built in the location of the improved ice road shown on Figure 1. However, to cover all scenarios, Hilcorp assumes that an ice road would be built in each year for the next 5 years.
In water deeper than 3 m (10 ft), the ice must be approximately 2.4 m (8 ft) thick to support construction equipment. Ice road construction activities occurs 24 hours a day, 7 days a week during the construction phase and are only halted in unsafe conditions such as high winds or extremely low temperatures. The ice roads are typically constructed by specially-designed pumps with ice augers. Seawater for creating the offshore ice road is obtained by drilling holes through the existing sea ice using augers and pumping salt water to flood the ice surface. The rolligons (vehicles with large low-pressure tires) move along the road alignment while flooding the surface. Water trucks are used to spray a freshwater cap over the thickened sea ice to provide durability.
Following construction, ice road surfaces are maintained using graders with snow wings and blowers, or front-end loaders with snow blower attachments. Snow can also be cleared by personnel with snow blowers. When snow blowing, wind direction is used to assist in dispersing the blown snow over a large area so that large berms or piles are not created. Delineators may be used to mark the roadway in 15 m (50 ft) increments down the centerline of the road, and at no more than 0.4 km (
The following steps are used to build the Northstar ice road:
• Clear snow using lighter-weight tracked vehicles;
• Grade or drag the ice to smooth the surface, incorporating rubble ice into the road or moving it outside of the expected road surface;
• Drill holes through floating ice along the planned ice road route using rolligons equipped with ice augers and pumps;
• Pump seawater from drilled holes over floating ice; and
• Flood the ice road. Flooding techniques are dependent on the conditions of the sea ice (
Grounded ice requires minimal freshwater flooding to either cap or repair cracks. Floating ice requires flooding with seawater until a desired thickness is achieved. Thickness of floating ice would be determined by the required strength and integrity of the ice. After achieving desired thickness, floating ice areas may then be flooded with fresh water to either cap or repair cracks. This technique minimizes the amount of freshwater used to obtain the desired thickness of the ice road. Hilcorp would use permitted freshwater sources if fresh water is needed to construct the Northstar ice roads. Water would be transported by truck from permitted freshwater sources via existing roads.
Ice trails are unimproved access corridors used by Tuckers (a type of tracked vehicle that moves on snow), PistenBullys® (a type of tracked vehicle that moves on snow), snow machines, or similar tracked equipment. Seawater flooding of the entire trail and freshwater caps are not used. However, small rough areas of a trail may require minimal seawater flooding to allow tracked vehicles, rolligons, and the hovercraft (if needed) to travel along the corridor.
To construct the trail, snow machines and light-weight tracked vehicles are used to initially mark the corridor as soon as it is determined to be safe for access. Sea ice in the unimproved roads would be allowed to thicken through natural freeze up as the ice, and snow is packed down by larger tracked vehicles. Generally, snow removal or large surface modifications are not required for ice trails.
Hilcorp usually builds the following unimproved ice trails to Northstar:
• Along the pipeline corridor from the valve pad near the Dew Line site to Northstar (9.5 km, 5.93 mi),
• From West Dock to the pipeline shore crossing (grounded ice along the coastline (7.8 km, 4.82 mi), and
• Two unimproved ice road paths from the hovercraft tent at Dockhead 2.
In addition to these trails, Hilcorp may need to construct several shorter length trails into undisturbed areas to work around unstable and unsafe areas of ice as the season progresses. Due to safety considerations these work-around or detour trails may need to be constructed after March 1st. They are constructed similarly to the planned ice trails and are not flooded or capped with seawater or freshwater. Typically, these detours deviate approximately 23 to 46 m (75 to 150 ft) from the original road or trail to allow crews to safely go around soft spots or cracks.
Each year Eni builds a single ice road and three ice pads. The ice road extends 6.8 km (4.2 mi) offshore from OPP to SID (Figure 2). This ice road has both supported on water (floating) and grounded ice sections; the first 244 m (800 ft) of the road from shore is grounded ice (
Initial construction of the sea ice road begins with surveying and staking the route as soon as the ice is thick enough to support snow machines. The floating sections of the road are constructed using the free flood method; low pressure pumps flood the ice surface with seawater. A 7.6 centimeters (cm) (3 inches (in.)) layer of water is applied, some of which may move to lower parts of the roadway. After the water has frozen, the next flood can be applied.
Small rolligon vehicles with augers and pumps are used for augering and flooding. Hand augers can be used to check the ice thickness. Ice needs to be 41 to 51 cm (16 to 20 in.) thick to
Rig mats are used to bridge small leads (fractures within large expanse of ice) and wet cracks during construction and maintenance. During maintenance activities, fresh water is used for road surfacing and repair. Once fully flooded and open to traffic, snow loads on the ice road must be managed. Snow on the ice road is cleared frequently and the width of the ice road (including the shoulder areas) is maintained at 49 m (160 ft). At the end of the ice road season, as temperatures and sun exposure increase, snow may be spread over the road surface to insulate and shade the ice surface, helping to preserve ice road integrity.
Following the same general construction methods used at Northstar, Eni plans to build an unimproved ice trail just west of and parallel to the sea ice road corridor near SID. The ice trail is typically approximately 15-30 m (50-100 ft) west of the western edge of the ice road shoulder and is used when the ice road is being constructed. Once the ice road is open to regular traffic, the ice trail is not used. After March 1st, due to safety considerations, Eni may also need to use several shorter length trails in undisturbed areas to work around unstable and unsafe areas of ice as the season progresses. As described above, these work-around or detour trails allow PistenBullys® and other tracked vehicles to safely go around soft spots or cracks.
A single ice road and staging area ice pad are required each year to operate the ODS. As shown in Figure 3, the typical or proposed ice road extends 8.9 km (5.5 mi) offshore to the ODS. An alternative ice road as shown on Figure 4 would be located in shallower water and, therefore, can be grounded and used earlier in the season. The alternative route extends 11.2 km (7 mi) offshore and is used in years when an early road completion is required or when extra heavy loads, such as a drilling rig is expected. Either ice road is up to approximately 10.7 m (50 ft) wide with a similar width shoulder area on each side. The shoulders of the road are used when traffic must periodically detour around equipment or in areas where ice road maintenance is occurring. In addition, a grounded ice pad staging area is constructed on the southwest edge of the ODS (see Figures 3 and 4). The dimensions of the staging area are approximately 180 by 140 m (600 by 450 ft).
The ODS is located in 1.2 to 1.8 m (4 to 6 ft) of water, and the area from the site to the shore generally becomes grounded landfast ice in winter. The typical and alternate ice road routes shown in Figures 3 and 4 would be located in grounded rather than floating ice. There is one small area near the Colville River that has an open lead for a short duration in December but freezes solid within a few weeks. The road is clearly marked with delineators and monitored routinely by Alaska Clean Seas and industry environmental coordinators. Ice bridges or rig mats are not required for construction or maintenance of the ice road or ice pad staging area.
Initial construction of the sea ice road begins with surveying and staking the route as soon as the ice is thick enough to support snow machines. Low pressure pumps are used to flood the ice surface with seawater. Small tractor vehicles with augers and pumps are used for augering and flooding. An initial layer of water is applied, some of which may move to lower parts of the roadway. After the water has frozen, the next flood can be applied. Flooding operations occur 24 hours a day, 7 days a week during this phase. Depending on weather and sea ice conditions, construction of the ice road typically begins in early December and is complete by February 1st.
The ODS operations do not require offshore ice trails. However, a coastal trail in very shallow water right off of the beach is occasionally needed between Oliktok and the ODS ice road to demobilize equipment after tundra travel has been closed.
Mitigation, monitoring, and reporting measures are described in detail later in this document (please see Mitigation and Monitoring and Reporting).
NMFS published a proposed rule in the
Likewise, spotted seals are not known to remain in the Beaufort Sea during the late fall and winter (BOEM, 2018). Given their seasonal occurrence and distribution (they are absent from the Beaufort Sea in winter) and low numbers in the nearshore waters of the central Alaskan Beaufort Sea during other seasons, no spotted seals are expected in the Action Areas in late winter and spring during ice road/trail activities.
Therefore, considering the fact that bearded and spotted seals are extremely unlikely to occur in the nearshore environment during winter months, and the small zone of disturbance that is only related to ice road construction and maintenance, including takes of bearded and spotted seals is not appropriate.
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).
There is no change in the Hilcorp and Eni's proposed ice roads and ice trails construction activities from the proposed rule (85 FR 2988; January 17, 2020). NMFS revised the buffers in section 217.154(c)(3), (5), (7), and (7)(i), and section 217.155(b)(1) and (1)(ii) and (c)(1) and (2) to reference avoidance of seals within 50 m and avoidance of seal structures within 150 m. One additional monitoring and reporting measure was added to the final rule based on comments received during the public comment period. This measure requires that Hilcorp and Eni (1) engage local hunters through the Ice Seal Committee point of contact to gather recommendations on methods for ringed seal detection along sea ice roads/trails within the exposure areas, (2) incorporate these recommendations into Hilcorp and Eni's training materials provided to personnel responsible for monitoring for ringed seals along sea ice roads/trails, and (3) include the methods used for detection of seals and seal structures with an assessment of their effectiveness in the final reports.
Sections 3 and 4 of the application summarize available information regarding status and trends, distribution and habitat preferences, and behavior and life history, of the potentially affected species. Additional information regarding population trends and threats may be found in NMFS' Stock Assessment Reports (SARs;
Table 1 lists all species with expected potential for occurrence in the Beaufort Sea and 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 (OPS) (as described in NMFS's SARs). While no mortality is anticipated, PBR and annual serious injury and mortality from anthropogenic sources are included here as gross indicators of the status of the species and other threats.
Marine mammal abundance estimates presented in this document represent the total number of individuals that make up a given stock or the total number estimated within a particular study or survey area. NMFS' 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' U.S. 2019 SARs (Carretta
All species that could potentially occur in the proposed survey areas are included in Table 1. As described below, only the ringed seal temporally and spatially co-occurs with the activity to the degree that take is reasonably likely to occur. The temporal and/or spatial occurrence of the rest of the species listed in Table 1 is such that take is not expected to occur, and they are not discussed further beyond the explanation provided here.
While ringed, spotted, and bearded seals are present in the Beaufort Sea during the open-water season, only ringed seals are likely to be in the nearshore environment during the ice-covered months. The other two species of ice seals only occur in the project area during the open-water season. Ribbon seal mostly occurs in the Chukchi Sea and western Beaufort Sea, and is considered as extra-limital in the project area. Therefore, the potential for encounters with bearded, spotted, and ribbon seals during ice road/trail construction and maintenance is extremely unlikely. As a result, these ice seal species will not be discussed further in this document.
None of the cetacean species listed above is expected to enter the ice-covered action areas during the winter months when ice road activities would be occurring. Therefore, the potential for encounters with cetaceans during ice road/trail construction and maintenance is extremely unlikely. As a result, cetacean species will not be discussed further in this document.
Ringed seal is the only species that would be reasonably likely to be affected by the ice road and ice trail construction and maintenance activity. A detailed description of this species in the action area is provided in the proposed rule (85 FR 2988; January 17, 2020).
This section includes a summary and discussion of the ways that components of the specified activity may impact
The Hilcorp and Eni's sea ice roads and ice trails construction and maintenance activities on the North Slope could adversely affect ringed seals by exposing them to construction noise and presence of human activities, and potential serious injury or mortality in the project area.
A detailed description of the impacts on marine mammals and their habitat is provided in the
This section provides an estimate of the number of incidental takes that may be authorized through this rulemaking, which will inform both NMFS' consideration of “small numbers” and the negligible impact determination.
Harassment is one of the types 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 primarily be by Level B harassment, as exposure of ringed seals by construction activities and noise has the potential to result in disruption of behavioral patterns for individual animals. There could also be potential for serious injury/mortality if an animal is crushed by a construction machinery or vehicle while in its subnivean lair. Auditory injury is unlikely to occur because the overall noise levels generated from the construction activities are low. The mitigation and monitoring measures are expected to minimize the severity of such taking to the extent practicable.
Below we describe how the take is estimated.
Generally speaking, we estimate take by considering: (1) Marine mammals (ringed seals) likely to be exposed to visual and acoustic disturbances from ice roads and ice trails construction; (2) the density or occurrence of marine mammals within the areas likely to be disturbed; and, (3) the number of days of activities. We note that while these basic factors can contribute to a basic calculation to provide an initial prediction of takes, additional information that can qualitatively inform take estimates is also sometimes available (
Ringed seals are present in the nearshore Beaufort Sea waters and sea ice year round, maintaining breathing holes and excavating subnivean lairs in the landfast ice during the ice-covered season. During this ice-covered season, ringed seals' home ranges are generally less than 5 km
Ringed seals overwinter in the landfast ice in and around the project area. Relatively few data are available for ringed seal density in the southern Beaufort Sea during the winter months, but several studies on ringed seal winter ecology were undertaken during the 1980s (Kelly
Both male and female ringed seals maintain a number of breathing holes and haul out in more than one subnivean lair during the ice-covered season. Kelly
In 1982, aerial surveys were conducted near Reindeer Island, just east of the project area (Northstar and SID), where seismic exploration activities were occurring. Seal structures were located by searching with a dog along 267 km (166 mi) of seismic and control lines as well as 28 km (17 mi) of non-systematic search lines (295 linear km (183 linear mi) total). A total of 157 structures were found resulting in an average estimate of 0.53/km seal structures (Kelly
In 1983, the vicinity of Reindeer Island was surveyed again and the average number of seal structures recorded was 0.70/km over approximately 81 km (50 mi) of linear survey lines resulting in an average number of total structures of 0.81/km
In 1999, a total of 26 seal structures were located within a 36.5 km
To estimate ringed seal density during the winter, an average structure density was divided by the average number of structures used by seals (Kelly
Average ice structure density/Average number of structures per seal = Estimated Average Winter Seal Density: 1.58/2.85 = 0.55 seals/km
In 1997, prior to Northstar construction, British Petroleum Exploration Alaska (BPXA) conducted aerial surveys for seals as part of the industry monitoring programs for the Northstar facility. These datasets provide the best available information on spring ringed seal density for the project area. Information is based on aerial surveys were flown around Northstar and west of Prudhoe Bay during late May and early June (Frost
Because densities were consistently very low where water depth was <3m (and these areas are generally frozen solid during the ice-covered season) densities were calculated where water depth was >3m deep (Moulton
For the period 2000, 2001, and 2002, (Moulton
As reported in Frost
In summary, for the purposes of estimating take associated with ice road/trail activities, winter and spring densities are assumed to be 0.55 and 0.61 seals/km
To estimate exposures of ringed seals to disturbance that may result in a take, the total area of potential disturbance (
Again, the total width of the exposure area is 340 m (558 ft). This width is then multiplied by the total length of roads/trails likely to be constructed each year to calculate the exposure area in km
The total width of the ice road and trail at SID accounts for the ice trail being constructed approximately 15 to 30 m west of the western edge of the ice road shoulder. Therefore, a total width of 420 m has been used to calculate potential seal exposures at SID as a more conservative approach whereas, the ice road/trail total width at Northstar and ODS is 340 m, as shown in Table 5.
Based on the exposure estimates, Eni and Hilcorp request takes for Level B harassment for the 5-year period as shown in Table 5. Takes are presented annually for each company and are requested for ice road and ice trail construction, operation and maintenance expected to occur between December and May of each year, depending on local conditions. Potential Level B harassment takes could occur in all 5 years.
NMFS does not expect Level A harassment of ringed seal to occur, as noise and visual exposure to construction activities will not become injurious as defined for purposes of a Level A harassment take under the MMPA. However, it is possible that a seal may be in its lair during ice roads/trails construction and thus, it is possible for a seal to become crushed by construction machinery or vehicle while the road/trail is being erected, resulting in injury, serious injury, or mortality. A detailed discussion of such events is provided below.
Based on a review of literature and monitoring reports from Northstar and other North Slope projects, there is documentation of one seal mortality associated with a vibroseis program outside the barrier islands east of Bullen Point in the eastern Beaufort Sea (MacLean 1998). During a 1999 NMFS workshop to review on-ice monitoring and research, Dr. Brendan Kelly (then of the University of Alaska), also indicated that a dead ringed seal pup was found during his research using trained dogs to locate seal structures in the ice. The dead ringed seal pup was located approximately 1.5 km (0.9 mi) from the Northstar ice road. No data on the age of the pup, date of death, necropsy results, or cause of death are available. Therefore, whether ice road construction at Northstar could have contributed to the death of this pup, or if its death was coincidental to Northstar activities cannot be determined (Richardson and Williams 2000).
While the only recorded mortality of a seal occurred in 1998, Eni and Hilcorp also requested 10 takes for each development over the 5-year period for potential ringed seal serious injury or mortality during construction, operation and maintenance of ice roads and trails.
However, NMFS does not consider this request to be adequately justified, and is concerned that the requested mortality in this action is much higher than other similar actions.
For instance, in the 2019 Hilcorp Liberty rule for ice road and ice trail construction on the North Slope, there were two lethal takes authorized over the first 5 years (and 8 over the following 20 years, for 10 total mortalities over 25 years). In that action,
In terms of the distribution of construction activities between the two companies, Hilcorp is constructing 1.9 times as many ice road/trail kilometers as Eni is at either SID or ODS. However, Eni's construction activities encompass two separate sites and each have the potential to encounter inhabited seal lairs given an assumed equal distribution of species. Based on these factors, NMFS is authorizing three serious injury/mortalities for ice road/trail activities at each of Eni's sites (Spy Island and Oooguruk), and six serious injury/mortalities at Hilcorp's Northstar site, all over 5 years. A summary of serious injury/mortality for Hilcorp and Eni over the 5-year period is provided in Table 6.
Subsistence hunting continues to be an essential aspect of Inupiat Native life, especially in rural coastal villages. The Inupiat participate in subsistence hunting activities in and around the Beaufort Sea. The animals taken for subsistence provide a significant portion of the food that will last the community through the year. Marine mammals represent on the order of 60-80 percent of the total subsistence harvest. Along with the nourishment necessary for survival, the subsistence activities strengthen bonds within the culture, provide a means for educating the younger generation, provide supplies for artistic expression, and allow for important celebratory events.
The ice roads/trails construction projects are generally remote from subsistence use areas. Nuiqsut is the closest Native Alaskan community to the Northstar, ODS and SID facilities; located approximately 91 km (about 57 mi) southwest from Northstar, 40 km (about 25 mi) from ODS, and 56 km (about 35 mi) from SID. Primary subsistence users in the area between Oliktok Point and West Dock are residents from the village of Nuiqsut. People from Utqiagvik (about 309 and 264 km [192 and 164 mi] west of Northstar and SID, respectively) and Kaktovik harvest marine mammals that pass through the area but generally do not hunt there. Kaktovik is 196 km (122 mi) east of Northstar and 241 km (150 mi) east of SID.
Nuiqsut hunters harvest ringed seals primarily during open water periods in July through August. In summer, boat crews hunt ringed, spotted and bearded seals. The most important seal hunting area for Nuiqsut hunters is off the Colville Delta, as far east as Pingok Island. The closest edge of the main sealing area at Pingok Island, is about 27 km (17 mi) west of Northstar (SRBA 2010, Galginaitis 2014). While less frequent than open water hunting, seals are taken by hunters on snow machines before break-up.
In summary, Hilcorp and Eni's ice roads and ice trails construction projects would occur far away from subsistence activities, and would be conducted during the time few subsistence activities occur. In winter and spring, small numbers of ringed seals may be disturbed and possibly displaced from the immediate locations of the ice roads and trails shown on Figures 1 through 4. Seal hunters would likely avoid the areas near SID, Northstar and ODS in favor of less developed more productive areas closer to the main sealing areas near the Colville River delta. Therefore, construction and maintenance of the ice roads and trails is unlikely to impact subsistence hunting of ringed seals.
In order to issue an LOA under Section 101(a)(5)(A) 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. NMFS regulations require applicants for ITAs 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 stocks, and their habitat, as well as subsistence uses. This considers the nature of the potential adverse impact being mitigated (likelihood, scope, range). It further considers the likelihood that the measure will be effective if implemented (probability of accomplishing the mitigating result if implemented as planned), the likelihood of effective implementation (probability implemented as planned), and;
(2) The practicability of the measures for applicant implementation, which may consider such things as cost, 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.
For Hilcorp and Eni's ice roads and trails construction project, Hilcorp and Eni worked with NMFS and proposed the following mitigation measures to minimize the potential impacts to marine mammals in the project vicinity. The primary purposes of these mitigation measures are to minimize human-seal interactions and to avoid takes by serious injury/mortality from the activities, to monitor marine mammals within designated zones of influence in the project vicinity and, if seals are within the designated shutdown zone after March 1 during the pupping season, to initiate immediate pause of all construction activities, making it very unlikely potential injury or serious injury/mortality to seals would occur and ensuring that Level B behavioral harassment of seals would be reduced to the lowest level practicable. Construction activities may result after the seals leave the shutdown zone on their own.
The prescribed mitigation and monitoring measures are described below.
Prior to initiation of sea ice road- and ice trail-related activities, project personnel associated with ice road construction, maintenance, use or decommissioning (
• Ringed Seal Identification and Brief Life History;
• Physical Environment (habitat characteristics and how to potentially identify habitat);
• Ringed Seal Use in the Ice Road Region (timing, location, habitat use, birthing lairs, breathing holes, basking, etc.);
• Potential Effects of Disturbance; and
• Importance of Lairs, Breathing Holes and Basking to Ringed Seals.
General mitigation measures will be implemented through the entire ice road/trail season (December through May) including during construction, maintenance, use and decommissioning.
• Ice road/trail speed limits will be no greater than approximately 74.5 km (45 miles) per hour (mph) under typical circumstances but may be exceeded in emergency situations. Travel on ice roads and trails is restricted to industry staff;
• Following existing safety measures, delineators will mark the roadway in a minimum of 0.4 km (
• Corners of rig mats, steel plates, and other materials used to bridge sections of hazardous ice, will be clearly marked or mapped using GPS coordinates of the locations, so vehicles travel on ice roads/trails will not deviate to undisturbed areas; and
• Personnel will be instructed to remain in the vehicle and safely continue, if they encounter a ringed seal while driving on the road.
After March 1st, and continuing until decommissioning of ice roads/trails in late May or early June, the on-ice activities mentioned above can occur anywhere on sea ice where water depth is less than 3 m (10 ft) (
In addition to the general Mitigation Measures, the following measures will also be implemented after March 1st:
• Ice road/trail construction, maintenance and decommissioning will be performed within the boundaries of the road/trail and shoulders, with most work occurring within the driving lane. To the extent practicable and when safety of personnel is ensured, equipment will travel within the driving lane and shoulder areas;
• Blading and snow blowing of ice roads will be limited to the previously disturbed ice road/shoulder areas to the extent safe and practicable. Snow will be plowed or blown from the ice road surface;
• In the event snow is accumulating on a road within a 50 m (164 ft) radius of an identified downwind seal or seal lair (as identified by seal ice structure), operational measures will be used to avoid seal impacts, such as pushing snow further down the road before blowing it off the roadway. Vehicles will not stop within 50 m (164 ft) of identified seals or within 150 m (500 ft) of known seal lairs;
• When safety of personnel is ensured, tracked vehicle operation will be limited to the previously disturbed ice trail areas. When safety requires a new ice trail to be constructed after March 1st, construction activities such as drilling holes in the ice to determine ice quality and thickness, will be conducted only during daylight hours with good visibility. Ringed seal structures will be avoided by a minimum of 50 m (164 ft) during ice testing and new trail construction. Once the new ice trail is established, tracked vehicle operation will be limited to the disturbed area and when safety of personnel is ensured;
• If a seal is observed on ice within 50 m (164 ft) of the centerline of the ice road/trail, the following mitigation measure will be implemented; and
• Construction, maintenance or decommissioning activities associated with ice roads and trails will not occur within 50 m (164 ft) of the observed ringed seal, but may proceed as soon as the ringed seal, of its own accord, moves farther than 50 m (164 ft) distance away from the activities or has not been observed within that area for at least 24 hours. Transport vehicles (
In order to issue an LOA for an activity, Section 101(a)(5)(A) of the MMPA states that NMFS must set forth requirements pertaining to the monitoring and reporting of such taking. The MMPA implementing regulations at 50 CFR 216.104 (a)(13) indicate that requests for authorizations must include the suggested means of accomplishing the necessary monitoring and reporting that will result in increased knowledge of the species and of the level of taking or impacts on populations of marine mammals that are expected to be present in the 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.
General monitoring measures will be implemented through the entire ice road/trail season including during construction, maintenance, use and decommissioning.
Hilcorp and Eni are required to implement the following monitoring measures.
If a ringed seal is observed within 50 m (164 ft) of the center of an ice road or trail, the operator's Environmental Specialist will be immediately notified with the information provided in the
• The Environmental Specialist will relay the seal sighting location information to all ice road personnel and the company's office personnel responsible for wildlife interaction, following notification protocols described in the company-specific Wildlife Management Plan. All other data will be recorded and logged.
• The Environmental Specialist or designated person will monitor the ringed seal to document the animal's location relative to the road/trail. All work that is occurring when the ringed seal is observed and the behavior of the seal during those activities will be documented until the animal is at least 50 m (164 ft) away from the center of the road/trail or is no longer observed.
• The Environmental Specialist or designated person will contact appropriate state and Federal agencies as required.
In addition to the general Monitoring Measures, the following measures will also be implemented after March 1st:
If an ice road or trail is being actively used, under daylight conditions with good visibility, a dedicated observer (not the vehicle operator) will conduct a survey along the sea ice road/trail to observe if any ringed seals are within 150 m (500 ft) of the roadway corridor. The following survey protocol will be implemented:
• Surveys will be conducted every other day during daylight hours;
• Observers for ice road activities need not be trained Protected Species Observers (PSOs), but they must have received the training described above and understand the applicable sections of the Wildlife Interaction Plan. In addition, they must be capable of detecting, observing and monitoring ringed seal presence and behaviors, and accurately and completely recording data; and
• Observers will have no other primary duty than to watch for and report observations related to ringed seals during this survey. If weather conditions become unsafe, the observer may be removed from the monitoring activity.
If a ringed seal structure (
• An observer will monitor the structure every 6 hours on the day of the initial sighting to determine whether a ringed seal is present. Monitoring for the seal will occur every other day the ice road is being used unless it is determined the structure is not actively being used (
In addition, Hilcorp and Eni are required to (1) engage local hunters through the Ice Seal Committee point of contact to gather recommendations on methods for ringed seal detection along sea ice roads/trails within the exposure areas, and (2) incorporate these recommendations into Hilcorp and Eni's training materials provided to personnel responsible for monitoring for ringed seals along sea ice roads/trails.
Hilcorp and Eni are required to submit a draft report on all ringed seals observed annually under the LOA within 90 calendar days of decommissioning the ice road/trail. A final report shall be prepared and submitted within 30 days following resolution of comments on the draft report from NMFS. If 30 days have passed and Hilcorp or Eni does not receive comments from NMFS, the draft report is considered to be final. The report must include:
• Date, time, location of observation;
• Ringed seal characteristics (
• Activities occurring during observation including equipment being used and its purpose, and approximate distance to ringed seal(s);
• Actions taken to mitigate effects of interaction emphasizing: (1) Which mitigation and/or monitoring measures were successful; (2) which mitigation and/or monitoring measures may need to be improved to reduce interactions with ringed seals; (3) the effectiveness and practicality of implementing mitigation and monitoring measures; (4) any issues or concerns regarding implementation of mitigation and/or monitoring measures; and (5) potential effects of interactions based on observation data;
• Proposed updates (if any) to Wildlife Management Plan(s) or Mitigation and Monitoring Measures; and
• The methods used for detection of seals and seal structures with an assessment of their effectiveness.
In the event that personnel involved in the construction activities discover an injured or dead marine mammal, Hilcorp or Eni shall report the incident to the Office of Protected Resources (OPR) (301-427-8401), NMFS and to the Alaska Region (AKR) regional stranding coordinator (1-877-925-7773).
If in the rare event a seal is killed or seriously injured by ice road/trail activities, NMFS must be notified immediately. If an ice road/trail personnel discover a dead or injured seal but the cause of injury or death is unknown or believed not to be related to ice road/trail activities, NMFS must be notified within 48 hours of discovery.
Regulations at 50 CFR 216.104(a)(12) further require ITA applicants conducting activities that take place in Arctic waters to provide a POC or information that identifies what measures have been taken and/or will be taken to minimize adverse effects on the availability of marine mammals for subsistence purposes. A plan must include the following:
• A statement that the applicant has notified and provided the affected subsistence community with a draft plan of cooperation;
• A schedule for meeting with the affected subsistence communities to discuss proposed activities and to resolve potential conflicts regarding any aspects of either the operation or the plan of cooperation;
• A description of what measures the applicant has taken and/or will take to ensure that proposed activities will not interfere with subsistence whaling or sealing; and
• What plans the applicant has to continue to meet with the affected communities, both prior to and while conducting the activity, to resolve conflicts and to notify the communities of any changes in the operation.
As discussed earlier, Hilcorp and Eni's ice roads and trails construction is expected to have no unmitigable adverse impacts on subsistence use of marine mammals in the project area, and the construction projects would occur in areas away from subsistence activities during the time when there is no subsistence activities. Nevertheless, both Hilcorp and Eni have developed POCs to ensure that no impact would occur. Both companies have been engaging the communities of Utqiagvik and Nuiqsut to share information about planned exploration/development activities and to maintain dialogue about measures to minimize potential impacts on the subsistence harvest of seals or whales. For the ice roads and ice trails construction and maintenance activities, Hilcorp and Eni developed further mitigation and monitoring measures to minimize the potential impacts to subsistence use of marine mammals in the area. These measures are described below.
To help minimize disturbances to marine mammal subsistence resources, Hilcorp has signed a CAA with the Alaska Eskimo Whaling Commission (AEWC) and Whaling Captains' Associations of nearby North Slope communities. The CAA describes measures to minimize any adverse effects on the availability of bowhead whales for subsistence use. Hilcorp also conducts the Cross Island whaling survey every year to document any conflicts and ensure that operations continue to be compatible with the hunt.
The CAA and much of the coordination focus on whales and whaling activities. To date, the Native community has not expressed concerns over interactions with seals, particularly during the ice-covered seasons. Hilcorp states that it will continue to address questions and concerns from community members, and continue to provide them with contact information of project management to which they can direct concerns related to Northstar operations.
In addition, Hilcorp has adopted the “Good Neighbor Policy” originally put in place for Northstar by BPXA. The policy is a commitment to the eleven whaling villages, the Inupiat Community and the Siberian Yupik Community to establish financial assurance in the event of an oil spill. While the focus is on bowhead whales, the policy does include other Arctic marine resources including ringed seals. The Good Neighbor Policy also outlines how Hilcorp would provide transportation for the subsistence community to alternate hunting areas in the event that a spill prevents the use of Cross Island or other hunting areas. It also has provisions for providing interim alternative food supplies to community members, along with counselling and cultural assistance. Hilcorp is committed to adhering to the CAA and Good Neighbor Policy for the duration of North Slope operations as necessary.
To help minimize disturbances to marine mammal subsistence resources, Eni also signs a CAA each year with the AEWC and Whaling Captains' Associations of nearby North Slope communities. The CAA describes measures to minimize any adverse effects on the availability of bowhead whales for subsistence use. Eni also conducted multiple community meetings and meetings with subsistence organizations such as the AEWC and NWCA to establish and maintain positive relationships with locals that rely on subsistence resources in the area.
Based on our evaluation of the applicant's proposed measures, NMFS has determined that the mitigation measures provide the means effecting the least practicable impact on the affected species or stocks and their habitat, paying particular attention to rookeries, mating grounds, and areas of similar significance, and on the availability of such species or stock for subsistence uses.
NMFS has defined negligible impact as an impact resulting from the specified activity that cannot be reasonably expected to, and is not reasonably likely to, adversely affect the species or stock through effects on annual rates of recruitment or survival (50 CFR 216.103). A negligible impact finding is based on the lack of likely adverse effects on annual rates of recruitment or survival (
NMFS is authorizing a very small number of serious injuries or mortalities that could occur incidental to ice roads and ice trails construction and maintenance.
NMFS considers many factors, when available, in making a negligible impact determination, including, but not limited to, the status of the species or stock relative to the OSP level (if known), whether the recruitment rate for the species or stock is increasing, decreasing, stable, or unknown, the size and distribution of the population, and existing impacts and environmental conditions. The PBR metric can help inform the potential effects of serious injury and mortality caused by activities authorized under Section 101(a)(5)(A) of the MMPA on marine mammal stocks.
PBR is defined in the MMPA (16 U.S.C. 1362(20)) 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 OSP, and is a measure to be considered when evaluating the effects of serious injury and mortality on a marine mammal species or stock. OSP is defined by the MMPA (16 U.S.C. 1362(9)) as the number of animals which will result in the maximum productivity of the population or the species, keeping in mind the carrying capacity of the habitat and the health of the ecosystem of which they form a constituent element. PBR values are calculated by NMFS as the level of
To specifically use PBR, along with other factors, to evaluate the effects of serious injury and mortality, we first calculate a metric that incorporates information regarding ongoing anthropogenic serious injury and mortality into the PBR value (
Regarding the impacts of the specified activities analyzed here, a stock-wide PBR for ringed seals is unknown; however, Muto
Hilcorp and Eni requested, and NMFS is authorizing, take, by Level B harassment, of ringed seals. The amount of taking to be authorized is low compared to marine mammal abundance. Potential impacts of Hilcorp-Eni's ice roads and ice trails construction activities are mostly from behavioral disturbances due to exposure to machinery and human activity. The potential effect of the Level B harassment is expected to be localized and brief. The construction crew would be required to closely monitor ringed seals in the vicinity of the project activity and to make sure that potential impacts are within the levels that are analyzed.
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:
• Only 12 ringed seals are authorized to be taken by serious injury/mortality over 5 years;
• No injury by permanent hearing threshold shift is expected;
• The only harassment is Level B harassment in the form of brief and localized behavioral disturbance and avoidance;
• The amount of takes, by harassment, is low compared to population sizes;
• Critical behaviors such as lairing and pupping by ringed seals would be avoided and minimized through implementation of ice road Best Management Plans;
• No long lasting modification in marine mammal habitat; and
• Ice roads/trails construction and maintenance would only occur between December and May each year.
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 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 Section 101(a)(5)(A) of the MMPA for specified activities. The MMPA does not define small numbers and so, in practice, where estimated numbers are available, NMFS compares the number of individuals taken to the most appropriate estimation of abundance of the relevant species or stock in our determination of whether an authorization is limited to small numbers of marine mammals. Additionally, other qualitative factors may be considered in the analysis, such as the temporal or spatial scale of the activities.
The amount of total taking (
Based on the analysis contained herein of the activity (including the prescribed 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 sizes of the affected species or stocks.
In order to issue an ITA, NMFS must find that the specified activity will not have an “unmitigable adverse impact” on the subsistence uses of the affected marine mammal species or stocks by Alaskan Natives. NMFS has defined “unmitigable adverse impact” in 50 CFR 216.103 as an impact resulting from the specified activity: (1) That is likely to
As described in the Effects of Specified Activities on Subsistence Uses of Marine Mammals section of the document, ringed seal is one of the key subsistence species that is being harvested by native subsistence users. However, the ice roads/trails construction and maintenance would occur far from any subsistence activities and would be separated temporarily from subsistence activities. In addition, Hilcorp and Eni have proposed and NMFS has included several mitigation measures to address potential impacts on the availability of marine mammals for subsistence use. In addition, both Hilcorp and Eni have developed POCs and worked with subsistence use communities in the vicinity of the project areas. Hilcorp and Eni further indicate that they will sign a CAA to ensure that there will be no unmitigable impact on subsistence uses of marine mammals during the ice roads and ice trails construction and maintenance.
Based on the description of the specified activity, the measures described to minimize adverse effects on the availability of marine mammals for subsistence purposes, and the mitigation and monitoring measures, NMFS has determined that there will not be an unmitigable adverse impact on subsistence uses from Hilcorp and Eni's activities.
The regulations governing the take of marine mammals incidental to Hilcorp and Eni's ice roads/trails construction and maintenance activities contain an adaptive management component.
The reporting requirements associated with this final rule are designed to provide NMFS with monitoring data from the previous year to allow consideration of whether any changes are appropriate. The use of adaptive management allows NMFS to consider new information from different sources to determine (with input from Hilcorp and Eni regarding practicability) on an annual or biennial basis if mitigation or monitoring measures should be modified (including additions or deletions). Mitigation measures could be modified if new data suggests that such modifications would have a reasonable likelihood of reducing adverse effects to marine mammals and if the measures are practicable.
The following are some of the possible sources of applicable data to be considered through the adaptive management process: (1) Results from monitoring reports, as required by MMPA authorizations; (2) results from general marine mammal and sound research; and (3) any information which reveals that marine mammals may have been taken in a manner, extent, or number not authorized by these regulations or subsequent LOAs.
To comply with the National Environmental Policy Act of 1969 (NEPA; 42 U.S.C. 4321
Accordingly, NMFS prepared an Environmental Assessment (EA) and issued a Finding of No Significant Impact (November 2020) to consider the environmental impacts associated with the final rule.
NMFS' final EA is available online at
Section 7(a)(2) of the ESA of 1973 (16 U.S.C. 1531
Pursuant to the MMPA and through these regulations and the associated LOA, NMFS is authorizing take of Alaska stock of ringed seal, which is listed under the ESA.
The Permit and Conservation Division requested initiation of section 7 consultation with the Alaska Region Protected Resources Division for the promulgation of 5-year regulations and the subsequent issuance of LOAs. The Alaska Region Protected Resources Division issued a Biological Opinion (March 2020) concluding that NMFS' action is not likely to result in jeopardy to the species named above or adversely modify their critical habitat.
Pursuant to the procedures established to implement Executive Order 12866, the Office of Management and Budget has determined that this final rule is not significant.
Pursuant to section 605(b) of the Regulatory Flexibility Act (RFA), the Chief Counsel for Regulation of the Department of Commerce certified to the Chief Counsel for Advocacy of the Small Business Administration at the proposed rule stage that this action will not have a significant economic impact on a substantial number of small entities. Hilcorp and Eni are the only entities that would be subject to the requirements in these final regulations. During construction, Hilcorp and Eni would employ or contract hundreds of people and the ice roads and trails construction would generate a large sum of revenues. Therefore, Hilcorp and Eni are not small governmental jurisdictions, small organizations, or small businesses, as defined by the RFA. No comments were received regarding this certification or on the economic impacts of the rule more generally. As a result, a regulatory flexibility analysis is not required and none has been prepared. Notwithstanding any other provision of law, no person is required to respond to nor must 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 (PRA) unless that collection of information displays a currently valid OMB control number. This final rule contains collection-of-information requirements subject to the provisions of the PRA. These requirements have been approved by OMB under control number 0648-0151 and include applications for regulations, subsequent LOAs, and reports.
The Assistant Administrator for NMFS has determined that there is good cause under the Administrative Procedure Act (5 U.S.C. 553(d)(3)) to waive the 30-day delay in the effective date of this final rule. No individual or entity other than Hilcorp and Eni is affected by the provisions of these regulations. Hilcorp and Eni have informed NMFS that they request that this final rule take effect as soon as is possible so as to avoid the potential for disruption in Hilcorp and Eni's planned activities. The delay in the issuance of the final rule would cause serious impacts on operations by Hilcorp and
Administrative practice and procedure, Alaska, Endangered and threatened species, Indians, Marine mammals, Oil and gas exploration, Reporting and recordkeeping requirements, Wildlife.
For reasons set forth in the preamble, 50 CFR part 217 is amended as follows:
16 U.S.C. 1361
(a) Regulations in this subpart apply only to Hilcorp Alaska, LLC (Hilcorp) and Eni US Operating Co. Inc. (Eni) and those persons they authorize or fund to conduct activities on their behalf for the taking of marine mammals that occurs in the areas outlined in paragraph (b) of this section and that occurs incidental to construction and maintenance of ice roads and ice trails.
(b) The taking of marine mammals by Hilcorp and Eni may be authorized in two Letters of Authorization (LOAs) only if it occurs on Alaska's North Slope.
Regulations in this subpart are effective from December 22, 2020 through November 30, 2025.
Under LOAs issued pursuant to §§ 216.106 of this chapter and 217.156, the Holders of the LOAs (hereinafter “Hilcorp” and “Eni”) may incidentally, but not intentionally, take marine mammals within the area described in § 217.150(b) by mortality, serious injury, Level A harassment, or Level B harassment associated with ice road and ice trail construction and maintenance activities, provided the activities are in compliance with all terms, conditions, and requirements of the regulations in this subpart and the appropriate LOAs.
Notwithstanding takings contemplated in § 217.152 and authorized by the LOAs issued under §§ 216.106 of this chapter and 217.156, no person in connection with the activities described in § 217.150 may:
(a) Violate, or fail to comply with, the terms, conditions, and requirements of this subpart or an LOA issued under §§ 216.106 of this chapter and 217.156;
(b) Take any marine mammal not specified in such LOAs;
(c) Take any marine mammal specified in such LOAs in any manner other than as specified;
(d) Take a marine mammal specified in such LOAs if NMFS determines such taking results in more than a negligible impact on the species or stocks of such marine mammal; or
(e) Take a marine mammal specified in such LOAs if NMFS determines such taking results in an unmitigable adverse impact on the species or stock of such marine mammal for taking for subsistence uses.
When conducting the activities identified in § 217.150(a), the mitigation measures contained in any LOA issued under §§ 216.106 of this chapter and 217.156 must be implemented. These mitigation measures shall include but are not limited to:
(a)
(2) Copies of any issued LOAs must be in the possession of Hilcorp and Eni, their designees, and work crew personnel operating under the authority of the issued LOAs; and
(3) Prior to initiation of sea ice road- and ice trail-related activities, project personnel associated with ice road construction, maintenance, use or decommissioning must receive annual training on implementing mitigation and monitoring measures:
(i) Personnel must be advised that interactions with, or approaching, any wildlife is prohibited;
(ii) Annual training must also include reviewing Hilcorp and Eni's Wildlife Management Plan; and
(iii) In addition to the mitigation and monitoring plans, other topics in the training must include:
(A) Ringed seal identification and brief life history;
(B) Physical environment (habitat characteristics and how to potentially identify habitat);
(C) Ringed seal use in the ice road region (timing, location, habitat use, birthing lairs, breathing holes, basking, etc.);
(D) Potential effects of disturbance; and
(E) Importance of lairs, breathing holes and basking to ringed seals.
(b)
(2) Following existing safety measures, delineators must mark the roadway in a minimum of 0.4 km (
(3) Corners of rig mats, steel plates, and other materials used to bridge sections of hazardous ice, must be clearly marked or mapped using GPS coordinates of the locations; and
(4) Personnel must be instructed to remain in the vehicle and safely continue, if they encounter a ringed seal while driving on the road.
(c)
(1) Ice road/trail construction, maintenance and decommissioning must be performed within the boundaries of the road/trail and shoulders, with most work occurring within the driving lane. To the extent practicable and when safety of personnel is ensured, equipment must travel within the driving lane and shoulder areas.
(2) Blading and snow blowing of ice roads must be limited to the previously disturbed ice road/shoulder areas to the extent safe and practicable. Snow must be plowed or blown from the ice road surface.
(3) In the event snow is accumulating on a road within a 50 m (164 ft) radius of an identified downwind seal or seal lair, operational measures must be used to avoid seal impacts, such as pushing snow further down the road before blowing it off the roadway. Vehicles must not stop within 50 m (164 ft) of identified seals or within 150 m (500 ft) of known seal lairs.
(4) To the extent practicable and when safety of personnel is ensured, tracked vehicle operation must be limited to the previously disturbed ice trail areas. When safety requires a new ice trail to be constructed after March 1st, construction activities such as drilling holes in the ice to determine ice quality and thickness, must be conducted only during daylight hours with good visibility.
(5) Ringed seal structures must be avoided by a minimum of 50 m (164 ft) during ice testing and new trail construction.
(6) Once the new ice trail is established, tracked vehicle operation must be limited to the disturbed area to the extent practicable and when safety of personnel is ensured.
(7) If a seal is observed on ice within 50 m (164 ft) of the centerline of the ice road/trail, the following mitigation measures must be implemented:
(i) Construction, maintenance or decommissioning activities associated with ice roads and trails must not occur within 50 m (164 ft) of the observed ringed seal, but may proceed as soon as the ringed seal, of its own accord, moves farther than 50 m (164 ft) distance away from the activities or has not been observed within that area for at least 24 hours; and
(ii) Transport vehicles (
(a) All marine mammal monitoring must be conducted in accordance with Hilcorp and Eni's Marine Mammal Mitigation and Monitoring Plan (4MP). This plan may be modified throughout the life of the regulations upon NMFS review and approval.
(b) General monitoring measures will be implemented through the entire ice road/trail season including during construction, maintenance, use and decommissioning.
(1) If a ringed seal is observed within 50 m (164 ft) of the center of an ice road or trail, the operator's Environmental Specialist must be immediately notified with the information provided in paragraph (e) of this section.
(i) The Environmental Specialist must relay the seal sighting location information to all ice road personnel and the company's office personnel responsible for wildlife interaction, following notification protocols described in the company-specific Wildlife Management Plan. All other data will be recorded and logged.
(ii) The Environmental Specialist or designated person must monitor the ringed seal to document the animal's location relative to the road/trail. All work that is occurring when the ringed seal is observed and the behavior of the seal during those activities must be documented until the animal is at least 50 m (150 ft) away from the center of the road/trail or is no longer observed.
(2) [Reserved]
(c) Additional monitoring measures after March 1st. In addition to the general monitoring measures listed in § 217.155(b), the following measures must also be implemented after March 1st:
(1) If an ice road or trail is being actively used, under daylight conditions with good visibility, a dedicated observer (not the vehicle operator) must conduct a survey along the sea ice road/trail to observe if any ringed seals are within 150 m (500 ft) of the roadway corridor. The following survey protocol must be implemented:
(i) Surveys must be conducted every other day during daylight hours;
(ii) Observers for ice road activities must have received the training described in § 217.154(a) and understand the applicable sections of the Wildlife Interaction Plan;
(iii) Observers for ice road activities must be capable of detecting, observing and monitoring ringed seal presence and behaviors, and accurately and completely recording data;
(iv) Observers must have no other primary duty than to watch for and report observations related to ringed seals during this survey; and
(v) If weather conditions become unsafe, the observer may be removed from the monitoring activity.
(2) If a ringed seal structure (
(i) An observer must monitor the structure every 6 hours on the day of the initial sighting to determine whether a ringed seal is present.
(ii) Monitoring for the seal must occur every other day the ice road is being used unless it is determined the structure is not actively being used (
(d) Engaging with subsistence hunters for monitoring recommendations.
(1) Hilcorp and Eni must engage local hunters through the Ice Seal Committee point of contact to gather recommendations on methods for ringed seal detection along sea ice roads/trails within the exposure areas.
(2) Hilcorp and Eni must incorporate these recommendations into Hilcorp and Eni's training materials provided to personnel responsible for monitoring for ringed seals along sea ice roads/trails.
(e) Reporting requirement at the end-of-season.
(1) A final end-of-season report compiling all ringed seal observations must be submitted to NMFS Office of Protected Resources within 90 days of decommissioning the ice roads/trails annually. The report must include:
(i) Date, time, location of observation;
(ii) Ringed seal characteristics (
(iii) Activities occurring during observation including equipment being used and its purpose, and approximate distance to ringed seal(s);
(iv) Actions taken to mitigate effects of interaction emphasizing:
(A) Which mitigation and/or monitoring measures were successful;
(B) Which mitigation and/or monitoring measures may need to be improved to reduce interactions with ringed seals;
(C) The effectiveness and practicality of implementing mitigation and monitoring measures;
(D) Any issues or concerns regarding implementation of mitigation and/or monitoring measures; and
(E) Potential effects of interactions based on observation data;
(v) Proposed updates (if any) to Wildlife Interaction Plan(s) or Mitigation and Monitoring Measures; and
(vi) The methods used for detection of seals and seal structures with an assessment of their effectiveness.
(2) In the event a seal is killed or seriously injured by ice road/trail activities, Hilcorp or Eni must immediately cease the specified activities and report the incident to the NMFS Office of Protected Resources (301-427-8401) and Alaska Region Stranding Coordinator (877-925-7773). The report must include the following information:
(i) Time and date of the incident;
(ii) Description of the incident;
(iii) Environmental conditions (
(iv) Description of all marine mammal observations in the 24 hours preceding the incident;
(v) Species identification or description of the animal(s) involved;
(vi) Fate of the animal(s); and
(vii) Photographs or video footage of the animal(s).
(3) In the event ice road/trail personnel discover a dead or injured seal but the cause of injury or death is unknown or believed not to be related to ice road/trail activities, Hilcorp or Eni must report the incident to the NMFS Office of Protected Resources (301-427-8401) and Alaska Region Stranding Coordinator (877-925-7773) within 48 hours of discovery.
(a) To incidentally take marine mammals pursuant to these regulations, Hilcorp and Eni must apply for and obtain an LOA.
(b) An LOA, unless suspended or revoked, may be effective for a period of time not to exceed the expiration date of these regulations.
(c) If an LOA expires prior to the expiration date of these regulations, Hilcorp or Eni may apply for and obtain a renewal of the LOA.
(d) In the event of projected changes to the activity or to mitigation and monitoring measures required by an LOA, Hilcorp and Eni must apply for and obtain a modification of the LOA as described in § 217.57.
(e) The LOAs shall set forth:
(1) Permissible methods of incidental taking;
(2) Means of effecting the least practicable adverse impact (
(3) Requirements for monitoring and reporting.
(f) Issuance of the LOAs shall be based on a determination that the level of taking will be consistent with the findings made for the total taking allowable under these regulations.
(g) Notice of issuance or denial of an LOA shall be published in the
(a) An LOA issued under §§ 216.106 of this chapter and 217.156 for the activity identified in § 217.150(a) shall be renewed or modified upon request by the applicant, provided that:
(1) The proposed specified activity and mitigation, monitoring, and reporting measures, as well as the anticipated impacts, are the same as those described and analyzed for these regulations (excluding changes made pursuant to the adaptive management provision in paragraph (c)(1) of this section); and
(2) NMFS determines that the mitigation, monitoring, and reporting measures required by the previous LOAs under these regulations were implemented.
(b) For LOAs modification or renewal requests by the applicants that include changes to the activity or the mitigation, monitoring, or reporting (excluding changes made pursuant to the adaptive management provision in paragraph (c)(1) of this section) that do not change the findings made for the regulations or result in no more than a minor change in the total estimated number of takes (or distribution by species or years), NMFS may publish a notice of proposed LOAs in the
(c) The LOAs issued under §§ 216.106 of this chapter and 217.156 for the activity identified in § 217.150(a) may be modified by NMFS under the following circumstances:
(1)
(i) Possible sources of data that could contribute to the decision to modify the mitigation, monitoring, or reporting measures in an LOA:
(A) Results from Hilcorp or Eni's monitoring from the previous year(s).
(B) Results from other marine mammal and/or sound research or studies.
(C) Any information that reveals marine mammals may have been taken in a manner, extent or number not authorized by these regulations or subsequent LOAs.
(ii) If, through adaptive management, the modifications to the mitigation, monitoring, or reporting measures are substantial, NMFS will publish a notice of proposed LOA in the
(2)
National Marine Fisheries Service (NMFS), National Oceanic and Atmospheric Administration (NOAA), Commerce.
Temporary rule; inseason adjustment; request for comments.
NMFS is adjusting the 2021 total allowable catch (TAC) amounts for the Bering Sea and Aleutian Islands
Effective 0001 hours, Alaska local time (A.l.t.), January 1, 2021, until the effective date of the final 2021 and 2022 harvest specifications for BSAI groundfish, unless otherwise modified or superseded through publication of a notification in the
Comments must be received at the following address no later than 4:30 p.m., A.l.t., January 6, 2021.
Submit your comments, identified by NOAA-NMFS-2019-0074, by either of the following methods:
•
•
Mary Furuness, 907-586-7228.
NMFS manages the groundfish fishery in the BSAI exclusive economic zone according to the Fishery Management Plan for Groundfish of the Bering Sea and Aleutian Islands Management Area (FMP) prepared by the North Pacific Fishery Management Council (Council) under authority of the Magnuson-Stevens Fishery Conservation and Management Act. Regulations governing fishing by U.S. vessels in accordance with the FMP appear at subpart H of 50 CFR part 600 and 50 CFR part 679.
The final 2020 and 2021 harvest specifications for groundfish in the BSAI (85 FR 13553, March 9, 2020) set the 2021 Aleutian Islands (AI) pollock TAC at 19,000 metric tons (mt), the 2021 Bering Sea (BS) pollock TAC at 1,450,000 mt, the 2021 BSAI Atka mackerel TAC at 54,482 mt, the 2021 BS Pacific cod TAC at 92,633 mt, and the 2021 AI Pacific cod TAC at 13,796 mt. In December 2020, the Council recommended a 2021 BS pollock TAC of 1,375,000 mt, which is less than the 1,450,000 mt TAC established by the final 2020 and 2021 harvest specifications for groundfish in the BSAI. The Council also recommended a 2021 BSAI Atka mackerel TAC of 62,257 mt, which is more than the 54,482 mt TAC established by the final 2020 and 2021 harvest specifications for groundfish in the BSAI. Furthermore, the Council recommended a 2021 BS Pacific cod TAC of 111,380 mt, and an AI Pacific cod TAC of 13,796 mt, which is more than the BS Pacific cod TAC of 92,633 mt, and the same as the AI Pacific cod TAC of 13,796 mt established by the final 2020 and 2021 harvest specifications for groundfish in the BSAI. The Council's recommended 2021 TACs, and the area and seasonal apportionments, are based on the Stock Assessment and Fishery Evaluation report (SAFE), dated November 2020, which NMFS has determined is the best available scientific information for these fisheries.
Steller sea lions occur in the same location as the pollock, Atka mackerel, and Pacific cod fisheries and are listed as endangered under the Endangered Species Act (ESA). Pollock, Atka mackerel, and Pacific cod are a principal prey species for Steller sea lions in the BSAI. The seasonal apportionment of pollock, Atka mackerel, and Pacific cod harvest is necessary to ensure the groundfish fisheries are not likely to cause jeopardy of extinction or adverse modification of critical habitat for Steller sea lions. NMFS published regulations and the revised harvest limit amounts for pollock, Atka mackerel, and Pacific cod fisheries to implement Steller sea lion protection measures to insure that groundfish fisheries of the BSAI are not likely to jeopardize the continued existence of the western distinct population segment of Steller sea lions or destroy or adversely modify their designated critical habitat (79 FR 70286, November 25, 2014).
In accordance with § 679.25(a)(1)(iii), (a)(2)(i)(B), and (a)(2)(iv), the Administrator, Alaska Region, NMFS (Regional Administrator), has determined that, based on the November 2020 SAFE report for this fishery, the current BSAI pollock, Atka mackerel, and Pacific cod TACs are incorrectly specified. Pursuant to § 679.25(a)(1)(iii), the Regional Administrator is adjusting the 2021 BS pollock TAC to 1,375,000 mt, the 2021 BSAI Atka mackerel TAC to 62,257 mt, and the 2021 BS Pacific cod TAC to 111,380 mt. Therefore, Table 2 of the final 2020 and 2021 harvest specifications for groundfish in the BSAI (85 FR 13553, March 9, 2020) is revised consistent with this adjustment.
Pursuant to § 679.20(a)(5)(i) and (iii), Table 5 of the final 2020 and 2021 harvest specifications for groundfish in the BSAI (85 FR 13553, March 9, 2020) is revised for the 2021 BS and AI allocations of pollock TAC to the directed pollock fisheries and to the Community Development Quota (CDQ) directed fishing allowances consistent with this adjustment.
Pursuant to § 679.20(a)(8), Table 7 of the final 2020 and 2021 harvest specifications for groundfish in the BSAI (85 FR 13553, March 9, 2020) is revised for the 2021 seasonal and spatial allowances, gear shares, CDQ reserve, incidental catch allowance, jig, BSAI trawl limited access, and Amendment 80 allocations of the BSAI Atka mackerel TAC consistent with this adjustment.
Pursuant to § 679.20(a)(7), Table 9 of the final 2020 and 2021 harvest specifications for groundfish in the BSAI (85 FR 13553, March 9, 2020) is revised for the 2021 gear shares and seasonal allowances of the BSAI Pacific cod TAC consistent with this adjustment.
NMFS issues this action pursuant to section 305(d) of the Magnuson-Stevens Act. This action is required by 50 CFR part 679, which was issued pursuant to section 304(b), and is exempt from review under Executive Order 12866.
Pursuant to 5 U.S.C. 553(b)(B), there is good cause to waive prior notice and an opportunity for public comment on this action, as notice and comment would be impracticable and contrary to the public interest, as it would prevent NMFS from responding to the most recent fisheries data in a timely fashion and would allow for harvests that exceed the appropriate allocations for pollock, Atka mackerel, and Pacific cod in the BSAI based on the best scientific information available. NMFS was unable to publish a notice providing time for public comment because the most recent, relevant data only became available as of December 12, 2020.
Without this inseason adjustment, NMFS could not allow the fishery for pollock, Atka mackerel, and Pacific cod in the BSAI to be harvested in an expedient manner and in accordance with the regulatory schedule. Under § 679.25(c)(2), interested persons are invited to submit written comments on this action to the above address until January 6, 2021.
16 U.S.C. 1801
Environmental Protection Agency.
Proposed rule; notice of data availability; request for comment.
The Environmental Protection Agency (EPA) is announcing the availability of new information and data pertaining to the agency's August 14, 2019 proposed rule
Comments must be received on or before February 22, 2021.
Submit your comments, identified by Docket ID No. EPA-HQ-OLEM-2020-0463, at
For questions concerning this document, contact Rita Chow, Office of Resource Conservation and Recovery, Resource Conservation and Sustainability Division, Environmental Protection Agency, 1200 Pennsylvania Avenue NW, Mail Code 5306-P, Washington DC 20460; telephone number: (703) 308-6158; email address:
EPA has established a docket for this action under Docket ID No. EPA-HQ-OLEM-2020-0463. EPA has previously established dockets for the April 17, 2015, CCR final rule (80 FR 21302) under Docket ID No. EPA-HQ-RCRA-2009-0640; and for the August 14, 2019, CCR proposed rule (84 FR 40353) under Docket ID No. EPA-HQ-OLEM-2018-0524. All documents in the docket are listed in an index at
The EPA is suspending its Docket Center and Reading Room for public visitors, with limited exceptions, to reduce the risk of transmitting COVID-19. Our Docket Center staff will continue to provide remote customer service via email, phone, and webform. We encourage the public to submit comments via
The EPA continues to carefully and continuously monitor information from the Centers for Disease Control and Prevention (CDC), local area health departments, and our Federal partners so that we can respond rapidly as conditions change regarding COVID-19.
Submit your comments, identified by Docket ID No. EPA-HQ-OLEM-2020-0463 at
Do not submit information that you consider to be CBI electronically through
Clearly mark the part or all of the information that you claim to be CBI. For CBI information in a disk or a CD-ROM that you mail to EPA, mark the outside of the disk or CD-ROM as CBI and then identify electronically within the disk or CD-ROM the specific information that is claimed as CBI. In addition to one complete version of the comment that includes information claimed as CBI, a copy of the comment that does not contain the information claimed as CBI must be submitted for inclusion in the public docket. If you submit a CD-ROM or disk that does not contain CBI, mark the outside of the disk or CD-ROM clearly that it does not contain CBI. Information marked as CBI will not be disclosed except in accordance with procedures set forth in 40 Code of Federal Regulations (CFR) part 2.
This document applies to the electric utilities and independent power producers that fall within the North American Industry Classification System (NAICS) code 221112 that generate CCR for disposal and beneficial use, and it may affect the following entities: Electric utility facilities and independent power producers that fall under the NAICS code 221112; Concrete batch plant manufacturing facilities under NAICS codes 327320, 32733, and 327390; Cement kiln manufacturing facilities under NAICS code 327310; Highway construction projects under NAICS code 237310; and Wallboard manufacturing plants under NAICS code 327420. It also may be of interest to CCR beneficial use stakeholders such as coal ash marketers and the agricultural industry; public interest groups, and citizens potentially impacted by CCR disposal and beneficial use. This list is not intended to be exhaustive, but rather provides a guide for readers regarding entities likely to be interested in this document. This list includes the types of entities that EPA is now aware could potentially be interested in this document. Other types of entities could also be interested. To determine whether your entity is potentially impacted by this document, you should carefully examine this document, as well as the applicability criteria found in § 257.50 of title 40 of the Code of Federal Regulations. If you have questions regarding the applicability of this action to a particular entity, consult the person listed in the
With this document, EPA is accepting comment on data and information EPA received during the comment period on the “Hazardous and Solid Waste Management System: Disposal of Coal Combustion Residuals From Electric Utilities; Enhancing Public Access to Information; Reconsideration of Beneficial Use Criteria and Piles” (84 FR 40353, Aug., 14, 2019) (hereinafter referred to as “August 2019 proposed rule”) and in follow-up meetings held with stakeholders between the end of May 2020 and August 2020, which may inform the Agency's reconsideration of the beneficial use definition in 40 CFR.257.53 and the provisions for CCR accumulations. In this document, EPA uses the phrase “CCR accumulations” to capture any and all such accumulations, including those with CCR destined for beneficial use or disposal, and those that constitute disposal (such as a “CCR pile or pile” as defined in 40 CFR 257.53).
Some of the information included in this document was received during the comment period for the August 2019 proposed rule, such as information about the CCR compliance websites mandated by the rule titled, “Hazardous and Solid Waste Management System; Disposal of Coal Combustion Residuals from Electric Utilities,” (80 FR 21302) (“2015 CCR rule” or “CCR rule”) being a potential data source. Other information included in this document was obtained after the close of the comment period, such as information from stakeholder meetings EPA held between the end of May 2020 and August 2020. Therefore, the information about the compliance websites mandated by the 2015 CCR rule as a data source and information from stakeholder meetings was not available for public comment during the initial comment period on the August 2019 proposed rule.
EPA is still in the process of evaluating information contained in the docket for this document as potentially relevant to the two issues that the Agency is reconsidering—the beneficial use definition and provisions for CCR accumulations destined for beneficial use or disposal. Therefore, EPA cannot definitively state whether this information will provide support in the reconsideration of the beneficial use definition or the provisions for CCR accumulations or that the Agency has determined that it is appropriate to rely on this information to inform the Agency's decision-making process on these issues. In addition, the specific
In sum, by this action, EPA is providing public notice of information the Agency received in response to the initial comment period for the August 2019 proposed rule, providing notice of information that EPA obtained after the close of the initial comment period from stakeholder meetings, and accepting additional data and information that the public has that may help inform the reconsideration of the beneficial use definition and provisions for CCR accumulations destined for beneficial use or disposal. EPA is not reopening any existing regulations through this document.
EPA is publishing this document under the authority of sections 1008(a), 2002(a), 4004, and 4005(a) and (d) of the Solid Waste Disposal Act of 1970, as amended by the Resource Conservation and Recovery Act of 1976 (RCRA), as amended by the Hazardous and Solid Waste Amendments of 1984 (HSWA) and the Water Infrastructure Improvements for the Nation (WIIN) Act of 2016, 42 U.S.C. 6907(a), 6912(a), 6944, and 6945(a) and (d).
On April 17, 2015, in the CCR rule EPA finalized national regulations to regulate the disposal of CCR as solid waste under subtitle D of the Resource Conservation and Recovery Act (RCRA). The CCR rule established national minimum criteria for existing and new CCR landfills, existing and new CCR surface impoundments, and all lateral expansions of these types of CCR units that are codified in Subpart D of Part 257 of Title 40 of the Code of Federal Regulations (CFR). The 2015 CCR rule also established a beneficial use definition to distinguish legitimate beneficial use from disposal. The beneficial use definition is comprised of four criteria, with criterion 4 establishing a requirement to perform an environmental demonstration to address any potential risks associated with unencapsulated uses of CCR that are in excess of 12,400 tons. See 80 FR 21351-52 (April 15, 2015). The 2015 CCR rule also provided provisions for piles and CCR that is currently being used beneficially off-site. For example, the CCR rule provided a definition of “CCR pile or pile,” as well as provided that CCR that is beneficially used off-site is not a CCR pile. However, the CCR being used off-site must be stored temporarily and comply with all of the criteria in the beneficial use definition. See 80 FR 21356. The rule also provided that a CCR landfill as defined in 40 CFR 257.53, includes CCR piles.
On August 14, 2019, EPA proposed a rule to address two provisions of the 2015 CCR rule remanded back to EPA on August 21, 2018, by the U.S. Court of Appeals for the District of Columbia Circuit: The 12,400-ton threshold in the beneficial use definition for unencapsulated uses; and the requirements for piles located on-site of a utility and off-site but destined for beneficial use. With respect to the mass-based numerical threshold, EPA proposed to eliminate the 12,400-ton numerical threshold and replace it with specific location-based criteria for CCR disposal units. In addition, EPA accepted comment on whether to retain a mass-based numerical threshold, and if so, what the appropriate threshold should be; whether a combination of the mass-based threshold and location-based criteria would be an appropriate trigger to require an environmental demonstration for unencapsulated uses; and whether the environmental demonstration required under the beneficial use definition's criterion 4 should be conducted for all unencapsulated CCR uses. For piles, EPA proposed a single approach to consistently address the potential environmental and human health issues associated with piles, regardless of the location of the pile and whether the CCR is destined for disposal or beneficial use. For more information on the history of EPA's CCR beneficial use definition and requirements for piles on-site and off-site, please refer to the August 2019 proposed rule and 2015 CCR rule.
Responding to concerns raised about the proposed rule during the public comment period by industry, environmental groups, private citizens and states, EPA is continuing to reconsider these issues by evaluating existing data and accepting additional information.
EPA is considering whether to use the following additional information sources in support of the reconsideration of the beneficial use definition and provisions for CCR accumulations destined for beneficial use or disposal: Select 2019 proposed rule data and comments and information obtained in stakeholder meetings. The information that EPA is noticing for comment can be found in EPA's annotated bibliography titled, “U.S. Environmental Protection Agency Beneficial Use and Accumulations of Coal Combustion Residuals Rulemaking, Notice of Data Availability: Annotated Bibliography of Information Being Noticed,” which is in the docket supporting this document, EPA-HQ-OLEM-2020-0463. Some documents listed or referenced in the annotated bibliography are also in the docket, while others can be accessed from websites at internet addresses provided in the bibliography.
Several of the public comments EPA received on the August 2019 proposed rule referred to data on the utility CCR compliance websites. Other comments referred to a court case related to a CCR accumulation at the Midwest Generation Utility, LLC (Powerton Station in Tazewell County, Illinois) as well as a case study about CCR accumulations on-site at Duke Energy in Noblesville, Indiana.
The Agency has been and continues to be interested in obtaining information about the management of CCR accumulations and data about environmental releases from CCR accumulations. The management of CCR accumulations includes any practices which provide for the staging and storage of CCR destined for beneficial use or disposal, onsite or offsite, including the accumulation size, duration and recurrence; designs related
EPA has reviewed the documents posted on utility CCR compliance websites linked from the Agency's CCR compliance web page (
• Fugitive dust control plans;
• Annual CCR landfill inspection reports;
• CCR landfill run-on/run-off control system reports; and
• Annual groundwater monitoring and corrective action reports (sometimes power plant-wide, sometimes specific to individual CCR units at the facility).
Based on that review, EPA identified the presence of CCR accumulations at several power plants.
EPA intends to confirm the presence of CCR accumulations for staging or storing CCR on power plant sites identified on the CCR utility websites, by contacting the state environmental agencies that correspond to facility locations. Furthermore, EPA expects to review the utility website documents for information on the characteristics of identified CCR accumulations, the protective measures taken to prevent or mitigate releases, and the data about environmental releases attributable to these CCR accumulations. More specifically, the Agency intends to review available information on the characteristics of these accumulations, such as size, duration, recurrence and design; protective measures, such as dust suppression, compaction, use of liners and berms; and incidences of environmental releases. The Agency intends to use such information to analyze the incidences of environmental releases from the CCR accumulations as a function of the accumulation characteristics and protective measures used, to inform the Agency's next steps on the remanded issues. EPA expects this analysis may indicate the conditions likely to cause environmental releases and may aid the Agency in identifying the measures/controls/practices sufficient to protect human health and the environment.
EPA is taking comment on whether the utility compliance websites should be used as a data source for information and data pertaining to the management of CCR accumulations. EPA is also seeking comment on whether environmental release data attributable to CCR accumulations at utility sites can be used to estimate environmental releases from CCR accumulations at intermediary (
A few comments on the August 2019 proposed rule referenced several fill projects and cases of environmental releases caused by unencapsulated CCR.
In response to the August 2019 proposal to change the beneficial use definition, the Hoosier Environmental Council (Hoosier) referenced several fill projects that did not incorporate protections for groundwater and surface water. Hoosier provided these examples to illustrate that lack of oversight and regulation of CCR beneficial use can result in CCR disposal being incorrectly characterized as beneficial use, leading to environmental contamination. Among those examples, Hoosier included a possible project that, while not executed, could have resulted in environmental issues had it gone unchallenged by county officials and nearby residents, because of its proposed location. Another example that Hoosier referenced relates to the extensive use of CCR for landscaping and road embankments throughout the town of Pines, Indiana.
Furthermore, to argue that requirements are needed to prevent environmental releases from CCR accumulations, Hoosier provided an example case study of unencapsulated CCR at a Duke Energy site in Noblesville, Indiana. According to Hoosier, the presence of unencapsulated CCR in the same location results in groundwater contamination and impacts on private water wells regardless of the distance to the groundwater table. Specifically, the presence of unencapsulated CCR from the start of the facility's operation in the 1950s resulted in impacts despite the groundwater table being more than 15 feet below the surface.
Similarly, Earthjustice provided information to illustrate that even when present for a short period of time, unencapsulated CCR has the potential to result in environmental releases. Earthjustice referenced a court case involving coal ash cinders deposited directly upon the land
From the end of May 2020 to August 2020, EPA held ten stakeholder meetings with the trade associations and their members, encompassing utilities, agricultural, wallboard, cement and concrete beneficial uses; CCR marketers; state environmental and transportation agencies; environmental organizations and private citizens. EPA and stakeholders discussed technical information and data on beneficial use applications and the specific practices facilities use to manage their CCR accumulations (
• Various CCR beneficial use applications,
• CCR generation specifically for beneficial use (
• CCR accumulation management throughout the CCR distribution system,
• Applicable state beneficial use and storage provisions and regulations of CCR, and
• Environmental and risk data, including documented environmental and public health impacts.
As explained, EPA is today noticing the data and information received from the 2019 proposed rule and the stakeholder discussions held from the end of May 2020 to August 2020. The Agency will accept additional data and information that may help inform the reconsideration of the beneficial use definition and provisions for CCR accumulations destined for beneficial use or disposal.
Specifically, EPA is today seeking information about how CCR is beneficially used, including any use of particular measures to control environmental releases that can help the Agency distinguish among the different types of beneficial use applications (
As part of this request, EPA is specifically interested in site-specific information that pertains to the practices used for the handling of wallboard-grade FGD gypsum. As explained in the 2015 rule preamble, some FGD gypsum has never been discarded and is treated as a valuable product throughout its entire lifecycle; when managed in this way, it is not a waste that would be regulated under part 257. See 80 FR 21348. EPA is interested in obtaining information on: The investment in special additional systems to generate wallboard-grade FGD gypsum; the investment in co-location of wallboard manufacturing plants with utilities; the inventorying and tracking procedures for the transfer and use of wallboard-grade FGD gypsum in the intended manufacturing process; the handling of CCR accumulations to prevent the loss of valuable material; other ways of handling the wallboard-grade FGD gypsum as a product rather than something that is intended to be discarded.
Lastly, EPA is seeking specific information on federal, state and local program provisions and regulations related to CCR beneficial use applications and provisions for CCR accumulations, such as example state permits or other beneficial use approvals. EPA is particularly interested in hearing from regulated entities that comply with the different regulations and can therefore, provide the full picture of requirements with which they comply.
EPA is reevaluating CCR beneficial uses that may be considered encapsulated beneficial use. In the 2015 rule preamble, the Agency defined encapsulated beneficial use as applications that bind the CCR into a solid matrix that minimizes mobilization into the surrounding environment. Examples of encapsulated uses include replacement for, or raw material used in production of, cementitious components in concrete; and raw material in wallboard production. See 80 FR at 21328. In addition, the Agency provided examples of unencapsulated uses to include: Flowable fill; structural fill; waste stabilization/solidification; and use in agriculture as a soil amendment. See 80 FR at 21353. The Agency is considering revising the designation of flowable fill and waste stabilization from unencapsulated to encapsulated uses and therefore, redefining the scope of beneficial uses that are subject to compliance with criterion 4 of the beneficial use definition which applies to unencapsulated uses. EPA is further considering whether criterion 4 should apply only to a subset of remaining unencapsulated uses. For example, as appropriate, certain uses could potentially be excluded if there are sufficient regulations at the federal, state, and local level that provide for engineering controls of the beneficial use application. Such beneficial uses may include agricultural applications. Other options the Agency is considering include developing guidance such as a best practice guide for using CCR in fill, structural fill, or other unencapsulated uses. To help inform EPA's next steps, the Agency is seeking comments, data and information on the following:
• What are the different types of CCR?
• What are the environmental and economic tradeoffs among the CCR beneficial use and its alternatives,
• What are the typical beneficial use applications for each type of CCR?
• How much CCR is used per typical beneficial use application?
• What are the chemical and physical characteristics of the CCR that make it suitable for beneficial use application?
• What is the virgin material the CCR is replacing?
• What are the product specifications and design standards the CCR must meet?
• What are examples of measures used to control releases for CCR destined for beneficial use?
• For structural fill projects, what are the site and location characteristics and the design and construction requirements for CCR used in such projects?
• What state and local policies/regulations pertain to specific unencapsulated uses of CCR for beneficial use?
• How do state and local policies/regulations distinguish beneficial use from disposal?
• What data, documented damage cases, or other information pertaining to beneficial use applications have become available since 2010?
• What are the environmental and economic tradeoffs among CCR beneficial use applications,
EPA is seeking information on the generation and management of CCR at each point in its distribution system, from the utility, to any intermediaries or final destinations, such as CCR retailers, distributors/marketers, beneficial use facilities, sites, or landfills. EPA is considering developing a best practice guide on the appropriate environmental controls that should be utilized for various storage and staging situations. EPA is also specifically interested in site-specific information and data demonstrating how utilities and beneficial use facilities manage wallboard-grade FGD gypsum as a valuable product. The Agency is considering whether to incorporate into the regulations a specific exemption for wallboard-grade FGD gypsum that has not been discarded and is continually managed as a valuable product from the point of generation at the utility to the manufacturing of the wallboard. EPA is also considering whether to develop
To help inform the Agency's reconsideration of the beneficial use definition and provisions for CCR accumulations, EPA is seeking the following information pertaining to the generation and
• How is the CCR generated and processed if it is destined for beneficial use?
• What are the specifications to which the CCR is processed?
• What type of testing is performed on the CCR (
• What material safety data sheets are available for CCR destined for beneficial use?
• What are the design and engineering standards for CCR accumulations,
• What controls are utilized to manage environmental releases from on-site CCR accumulations?
• How is CCR destined for beneficial use staged compared to CCR destined for disposal?
• How is CCR destined for beneficial use accumulated,
• How long does a CCR accumulation stay on the utility property before it is disposed of or transferred for beneficial use?
• What is the average size of a CCR accumulation before it is disposed of or transferred for beneficial use?
• Which entity is responsible for the transfer of CCR, either for beneficial use or disposal?
• What additional environmental monitoring data are available for on-site CCR accumulations?
• If in the past there have been on-site environmental releases that exceeded state limits, what corrective actions were implemented?
The Agency is also interested in information pertaining to the
• What additional testing is performed by intermediaries or beneficial users on the CCR to ensure it meets the required specifications?
• What happens to deliveries rejected by beneficial users and what entity is responsible for them?
• What are the types of units used for the staging of CCR by intermediaries and beneficial users?
• What are the design and engineering standards for CCR accumulations at intermediaries and beneficial users,
• What controls are utilized by intermediaries and beneficial users to manage environmental releases from CCR accumulations? How long does the CCR accumulation stay at the intermediaries before it is transferred for beneficial use?
• How is CCR accumulated at beneficial use sites,
• How long does the CCR accumulation stay at the beneficial use site before it gets beneficially used?
• What state and local policies/regulations pertain to one-time short-term storage at intermediaries and beneficial use sites?
• What state and local policies/regulations pertain to indefinite recurring storage at intermediaries and beneficial use sites?
• What environmental monitoring data are available for CCR accumulations at intermediaries and beneficial use sites?
• If in the past there have been environmental releases that exceeded state limits at intermediaries and beneficial use sites, what corrective actions were implemented?
• What material safety data sheets are available for CCR being used in the manufacturing process and the products incorporating it?
• What are the inventorying and tracking procedures for the transfer and use of CCR in the intended manufacturing process or for beneficial use?
• What additional business or financial information is available to show that the CCR is a valuable commodity for the intended manufacturing process or beneficial use?
The Agency is reviewing federal, state and local requirements and provisions for CCR beneficial use applications and CCR accumulations to consider whether those standards could inform the Agency's reconsideration of the beneficial use definition and provisions for CCR accumulations. The Agency is also considering whether, and which, particular beneficial use applications are sufficiently regulated at the federal, state or local levels (
EPA intends to carefully review all the comments and information received in response to this document specific to the beneficial use definition and provisions for CCR accumulations destined for beneficial use or disposal. EPA may also consider any previously collected and assembled information pertaining to the two specific issues addressed in this NODA. In determining how to proceed with reconsidering the beneficial use definition and provisions for CCR accumulations destined for beneficial use or disposal, EPA may consider any relevant information and data available to the Agency. Future action with respect to the Agency's reconsideration of the 2019 proposed rule on the beneficial use definition and provisions for CCR accumulations destined for beneficial use or disposal will be made through notice-and-comment rulemaking.
Environmental protection, Coal combustion products, Coal combustion residuals, Coal combustion waste,
Federal Railroad Administration (FRA), Department of Transportation (DOT).
Notice of proposed rulemaking (NPRM).
Pursuant to the Rail Safety Improvement Act of 2008, FRA proposes to issue regulations requiring certain railroads to develop and implement a Fatigue Risk Management Program, as one component of the railroads' larger railroad safety risk reduction programs.
Written comments must be received by February 22, 2021. Comments received after that date will be considered to the extent practicable without incurring additional expense or delay.
Comments related to Docket No. FRA-2015-0122 may be submitted by going to
Miriam Kloeppel, Staff Director, Audit Management Division, at 202-493-6224 or
This proposed rule is part of FRA's efforts to improve rail safety continually and to satisfy the statutory mandate of Section 103 of the Rail Safety Improvement Act of 2008 (RSIA).
This proposed rule, if finalized, would fulfill RSIA's mandate for railroads to include fatigue management plans in their safety risk reduction programs by requiring railroads to develop and implement Fatigue Risk Management Programs (FRMPs).
Under this proposed rule, consistent with the mandate of Section 20156, an FRMP is a comprehensive, system-oriented approach to safety in which a railroad determines its fatigue risk by identifying and analyzing applicable hazards and takes action to mitigate, if not eliminate, that fatigue risk.
FRA estimated the costs and benefits of this proposed rule using discount rates of 3 and 7 percent over a ten-year time horizon. FRA presents monetized costs and benefits where possible and discusses those non-quantifiable elements qualitatively where data is
In preparing the economic analysis, FRA estimated that the total costs and benefits over 10 years for the implementation of an FRMP and the fatigue training mitigation for Class I railroads and the 50 ISP railroads subject to this proposed regulation. FRA was unable to quantify costs or benefits for passenger railroads and discusses the implementation of the proposed regulation qualitatively within the Regulatory Impact Analysis which has been placed into the docket.
FRA also estimated the total costs over 10 years to develop and monitor FRMP plans for Class I railroads, passenger and commuter railroads, and the 50 ISP railroads subject to this proposed regulation. The proposed regulation will also impose a new economic cost on the agency over the 10-year period, to review and audit the FRMPs.
Please see Table I.B for the total costs and benefits associated with the proposed rule.
The RSIA requires the Secretary of Transportation (Secretary) to issue regulations requiring certain railroads to develop and implement a “railroad safety risk reduction program.”
The Secretary delegated responsibility for carrying out the mandate of Section 20156 to the FRA Administrator.
Section 20156(a)(1) mandates that each of the following types of railroads would have to comply with this proposed regulation: (1) Class I railroads; (2) railroad carriers with ISP; and (3) railroad carriers that provide intercity rail passenger or commuter rail passenger transportation. This preamble refers to the railroads that would be subject to this proposed rule as “covered railroads.”
To implement the requirements of Section 20156, FRA published the System Safety Program (SSP) final rule implementing the railroad safety risk reduction program mandate for passenger railroads on August 12, 2016.
Both the SSP and RRP rules allow a railroad to tailor its program to its unique operating characteristics.
Both RRPs and SSPs reflect comprehensive, system-oriented approaches to improving safety, by which an organization formally identifies and analyzes applicable hazards and takes action to mitigate, if not eliminate, the risks associated with those hazards. RRPs and SSPs provide a railroad with a framework for processes and procedures that can help it plan, organize, direct, and control its business activities in a way that enhances safety and promotes compliance with regulatory standards. As such, risk reduction and system safety programs are a form of “safety management system,” which is a term that generally refers to a comprehensive, systematic approach to managing safety throughout an organization.
Safety management systems were developed to ensure high safety performance in various industries, including aviation, passenger railroad, nuclear, and other industries with the potential for catastrophic accidents. For ease of understanding, the elements of a safety management system are typically grouped into larger descriptive categories. These descriptive categories include: (1) An organization-wide safety policy; (2) formal methods for identifying hazards, and for prioritizing and mitigating risks associated with those hazards; (3) data collection, data analysis, and evaluation processes to determine the effectiveness of mitigation strategies and to identify emerging hazards; and (4) outreach, education, and promotion of an improved safety culture within the organization.
Effective implementation of all the elements of an RRP or SSP, including the FRMP this proposed rule would
Sections 20156(d)(2) and (f) of the RSIA mandate that as part of a railroad's safety risk reduction program, a railroad must develop and implement a fatigue management plan “designed to reduce the fatigue experienced by safety-related railroad employees and to reduce the likelihood of accidents, incidents, injuries, and fatalities caused by fatigue.”
Finally, Section 20156(f)(3) requires a covered railroad to consider the need to include in its fatigue management plan elements addressing each of the following items, as applicable: (1) Employee education and training on the physiological and human factors that affect fatigue, as well as strategies to reduce or mitigate the effects of fatigue, based on the most current scientific and medical research and literature; (2) opportunities for identification, diagnosis, and treatment of any medical condition that may affect alertness or fatigue, including sleep disorders; (3) effects on employee fatigue of an employee's short-term or sustained response to emergency situations, such as derailments and natural disasters, or engagement in other intensive working conditions; (4) scheduling practices for employees, including innovative scheduling practices, on-duty call practices, work and rest cycles, increased consecutive days off for employees, changes in shift patterns, appropriate scheduling practices for varying types of work, and other aspects of employee scheduling that would reduce employee fatigue and cumulative sleep loss; (5) Methods to minimize accidents and incidents that occur as a result of working at times when scientific and medical research have shown increased fatigue disrupts employees' circadian rhythm; (6) alertness strategies, such as policies on napping, to address acute drowsiness and fatigue while an employee is on duty; (7) opportunities to obtain restful sleep at lodging facilities, including employee sleeping quarters provided by the railroad carrier; (8) the increase of the number of consecutive hours of off-duty rest, during which an employee receives no communication from the employing railroad carrier or its managers, supervisors, officers, or agents; (9) avoidance of abrupt changes in rest cycles for employees, and (10) additional elements that the Secretary considers appropriate.
Section 109 of the RSIA specifies that subject to specific exceptions, certain railroad safety risk reduction records obtained by the Secretary are exempt from the public disclosure requirements of the Freedom of Information Act (FOIA).
Humans have an approximately 24-hour sleep-wake cycle known as a “circadian rhythm.” Rapid changes in the circadian pattern of sleep and wakefulness disrupt many physiological functions such as hormone releases, digestion, and temperature regulation. Such disruptions may also impair human performance, and may cause a general feeling of debility until realignment is achieved. For instance, the experience of jet lag is comparable to the experience of working schedules that vary among different duty shifts, and similar disruptions in human performance occur. Research has shown that fatigue is a multivariate condition, being either directly or secondarily affected by physiological and environmental variables such as sleep loss, workload, stress, monotony, workplace ergonomics, age, health, medications, noise, and circadian disruption. Symptoms of fatigue include, but are not limited to, falling asleep, increased reaction time, loss of attentional capacity, and decline of short-term and working memory function which may impair performance, increase error, and increase accident risk.
The Federal Government requires railroads to manage their employees' fatigue associated with railroad operations through prescriptive hours of service (HOS) limitations and rest requirements.
An FRMP is a form of a safety management system. Like the other elements of an RRP and an SSP, an FRMP implements organizational policies, processes, and procedures to reduce safety risk in a railroad's operations. An FRMP is a data-driven and scientifically-based process that allows for periodic review and management of safety risks associated with fatigue-related error(s). Like other safety management systems, an FRMP applies the risk management process to identify fatigue risks through the use of data-established, scientific principles. An FRMP includes collecting and analyzing fatigue-related safety data and implementing corrective actions—always encouraging continuous improvement. This proposed rule would require railroads to develop FRMPs that are consistent with these general principles.
An effective FRMP implements processes and procedures for measuring, modeling, managing, mitigating, and reassessing fatigue risk in a specific operational setting. The primary stakeholders—the main persons with the authority and/or interest to improve conditions to reduce fatigue—would implement FRMP processes. In the case of this specific rulemaking, that stakeholder group would include representation from management and labor (union representation, if applicable) and may also include scientific consultants.
By combining schedule assessment, operational data collection, continuous and systematic analysis, and both proactive and reactive fatigue mitigation techniques, guided by information provided by scientific studies of fatigue, an FRMP offers a way to conduct railroad operations more safely by offering a global, comprehensive, and specific approach that complements statutory or regulatory HOS limitations. An FRMP would provide an interactive and collaborative approach to improving operational performance and safety levels on a case-by-case basis. Therefore, an FRMP would permit a railroad to adapt policies, procedures, and practices to the specific conditions that create fatigue in a particular railroad setting. A railroad could tailor its FRMP to unique operational demands and focus on techniques for mitigating risk caused by fatigue that are practical within the specific operational environment. This flexibility would also allow a railroad to alter its FRMP based on changing needs, new research, data from an existing FRMP, comments from labor and management, and established best practices.
In December 2011, FRA asked the Railroad Safety Advisory Committee (RSAC) to accept a task to address the fatigue management plan mandate of the RSIA.
Review the mandates and objectives of the [RSIA] related to the development of Fatigue Management Plans, determine how medical conditions that affect alertness and fatigue will be incorporated into Fatigue Management Plans, review available data on existing alertness strategies, consider the role of innovative scheduling practices in the reduction of employee fatigue, and review the existing data on fatigue countermeasures.
The Working Group formed three Task Forces to address particular aspects of the RSIA mandate in more detail: (1) The Education and Training Task Force; (2) the Scheduling Task Force; and (3) the Infrastructure and Environment Task Force. The Task Forces met multiple times throughout 2012 and 2013 and the Working Group itself met eight times during the same period.
After initially reaching consensus on draft rule text in June 2013, the Working Group did not reach consensus as to how its recommendations should be implemented. The Task Forces had developed a multitude of documents, which Labor representatives on the Working Group wanted published as appendices to the regulation. Railroad management members of the Working Group, on the other hand, asserted that the documents should not be published as appendices to the regulation, but instead recommended that the documents be made available on the FRA website and in the rulemaking docket for all parties to use in the required consultation process as part of developing railroads' FRMPs. As a result, in late 2013, FRA withdrew the task from the RSAC, and as the agency worked to implement other aspects of the safety risk reduction program mandate of the RSIA (
Although the RSAC did not make a consensus recommendation to FRA related to fatigue, FRA believes that information developed and documented during the RSAC process is informative and will be very useful to railroads required to develop FRMP plans. FRA made minor amendments to the June 2013 draft rule text to clarify it and make it more consistent with similar rule text in the SSP and RRP rules. However, the substance of this proposed rule text is the same as the draft rule text the Working Group voted to approve.
Accordingly, the proposals in this NPRM reflect FRA's consideration of the Working Group's recommended rule text and the documents developed by each of the three Task Forces. Those RSAC-developed documents are included in the rulemaking docket.
The RSIA does not mandate, and this NPRM does not propose to include, language specifically addressing the predictability of work schedules. However, the RSIA does require railroads to consider scheduling practices, of which predictability is one factor. There is significant discussion of predictability throughout this document, particularly when describing the Task Force discussions and the complex issues addressed in the Task Force documents that will inform railroads' analysis of fatigue risks and their efforts to mitigate the identified fatigue risks in consultation with employees and labor organizations. However, the proposed rule requires railroads to consider several factors, including work schedule predictability, but does not require any particular factor to be analyzed.
The NPRM also does not propose to include the Task Force documents as appendices to this proposed rule. As FRA previously explained to the members of the Working Group, many of these documents are written informally, for the use of railroads and labor in developing FRMP plans. The documents are best practices generated by the Working Group, but are not specifically FRA guidance and, therefore, should not be in an appendix to an FRA regulation. In addition, the content of the Task Force documents is subject to change based on advances in fatigue science, changes in railroad operations, and experience with FRA's SSP and RRP rules and the development and implementation of FRMPs and FRMP plans. The Task Force documents should be easy to update as necessary so that they are most beneficial to those using them. If they were published as appendices to the regulation, changing them would require the cumbersome process of publishing them in the
As noted above, paragraph (f)(3) of Section 20156 requires railroads to consider including 10 different elements in their fatigue management plans.
The Working Group assigned the Education and Training Task Force to address section 20156(f)(3) subparagraphs (A), (B), (E), and (F), specifically:
• Employee education and training on the physiological and human factors that affect fatigue;
• Medical and scientific research-based fatigue mitigation strategies;
• Opportunities for identification, diagnosis, and treatment of any medical condition that may affect alertness or fatigue, including sleep disorders;
• Methods to minimize accidents and incidents during circadian low periods; and
• Alertness strategies.
The Task Force produced a document outlining existing railroad fatigue educational resources; a document outlining potential fatigue training topics; fatigue education dissemination and evaluation strategies; and a document outlining fatigue countermeasures.
The Working Group assigned the Scheduling Task Force to address subparagraphs (D), (H), and (I) of the required elements outlined in section 20156(f)(3).
The task statement specifically included:
• Innovative scheduling practices;
• On duty call practices;
• Work and rest cycles;
• Increased consecutive days off;
• Other aspects of employee scheduling that would reduce employee fatigue and cumulative sleep loss;
• The increase of the number of consecutive hours of off-duty rest; and
• Avoidance of abrupt changes in rest cycles for employees.
The Working Group assigned the Infrastructure and Environment Task Force to address subparagraphs (C) and (G) of section 20156(f)(3) including:
• Effects on employee fatigue of an employee's short term or sustained response to emergency situations;
• Opportunities to obtain restful sleep at lodging facilities; and
• Effects of environmental conditions (
The Task Force created documents on emergency work, lodging facilities, and dispute resolution.
This proposed rule, if finalized, will fulfill the requirement of paragraph (d) of Section 20156 that a covered railroad's railroad safety risk reduction program include a fatigue management plan. This rule would amend both Parts 270 and 271, adding a subpart to both parts requiring railroads to develop and implement FRMPs. This section provides a summary of potential methods and considerations for developing and maintaining a FRMP. FRA welcomes comments on the discussion in this section, including thoughts on how to develop and maintain an effective FRMP. Unless specifically identified as a statutory or regulatory requirement, the information and suggestions contained in this section are not meant to bind the public in any way, and is intended only to provide clarity to the public regarding this proposal and information to aid in compliance if the proposal is finalized.
This proposed rule would require each covered railroad to establish and periodically update an FRMP plan, which explains the railroad's method of analysis of fatigue risks and the processes for implementing the FRMP. FRA would review and approve the FRMP plan. FRA proposes that requirements for the filing, approval, and amendment of the FRMP plan be made the same as for other components of RRP or SSP plans so those requirements are not set forth in this proposed rule. Instead, the proposed rule text cites to the sections of the SSP and RRP rules that contain those procedures.
As part of their FRMP, covered railroads would be required to identify fatigue-related safety hazards, to assess the risks associated with those hazards, and to prioritize those risks for mitigation. These railroads would be required to consider certain categories of risk as part of the FRMP, and to consider the development and implementation of policies and practices to reduce risks, related specifically to the items identified in the RSIA as items railroads are required to consider.
FRA proposes that railroads be required to adopt and implement their FRMP through an FRMP plan describing the railroads' processes for conducting their fatigue-risk analysis, including the processes for the identification of fatigue-related railroad safety hazards and resulting risks, processes for the development and implementation of mitigation measures, processes for the evaluation of the FRMP and its effectiveness, and procedures for the review and update of the FRMP plan. The FRMP plan would also describe processes, milestones, and timelines for the implementation of the FRMP.
Finally, the proposed rule contains no express requirements on information protection or consultation, because the information protection and consultation requirements in the RRP and SSP rules would apply to the FRMP, the FRMP plan, and their related documents, just as those requirements would apply to similar documents on other aspects of the RRP or SSP. As required by the RSIA, fatigue management plans are required elements of a railroad's statutorily-mandated railroad safety risk reduction program. Therefore, the statutory requirements on information protection and consultation, implemented in the SSP and RRP final rules, would also apply to the documents required by this proposed rule to implement the required fatigue component of each railroad's RRP or SSP. Regarding information protection, as with RRP and SSP, only information compiled or collected solely for developing, implementing, or evaluating a railroad's FRMP would be protected.
Consistent with the program requirements of an RRP or SSP,
SSPs and RRPs require outreach to employees so that they can understand why certain actions are taken, or why certain safety procedures are introduced
As provided in the RSIA, the three main stakeholders in the FRMP are railroad management, railroad employees (including nonprofit employee labor organizations), and FRA. Each of these stakeholders plays an important role in implementing an FRMP successfully. Railroad management must develop, document, and implement an FRMP, tailored to the size of the railroad, in a collaborative environment with relevant stakeholders; it must also then allocate the resources required to implement any fatigue countermeasures in a timely fashion. FRA notes that the RSIA, in multiple places, specifically requires railroads to develop and implement elements of their programs based on the latest scientific principles.
These general roles and functions are not an exhaustive description of the various actions each group could take during the development and execution of the FRMP.
As proposed, a railroad's FRMP must consist of actions taken by the railroad pursuant to formally documented policies, processes, and procedures intended to mitigate fatigue risk. It incorporates specific components that enable the following: (1) Identifying safety hazards associated with fatigue; (2) assessing the risks associated with identified hazards; (3) prioritizing risks for mitigation and implementing mitigation strategies for those risks; and (4) tracking the performance and effectiveness of each mitigation strategy and reviewing and revising an FRMP based on results.
A risk-based hazard analysis
In general, data-driven methods identify and record hazards through a systematic process that allows for tracking and further analysis. These methods could use various types of recorded observations, such as records of actual schedules, efficiency testing, accident/incident investigations, company audits, employee surveys, close-call or hazardous condition reports, and others. Simulations may also be used to identify potential hazards and to estimate the potential severity of outcomes.
Understanding the current conditions within a railroad is critical for a railroad's ability to identify fatigue hazards accurately. Important sources of information include current schedules, train lineups, throughput, and operating practices. Employee reports of fatigue or fatigue-related errors and incidents, and information on the work schedules that led up to them, would also be valuable. Likewise, employees may be able to provide information regarding travel assignments and random duty reports.
Comprehensive and objective accident, incident, and error analyses can also be conducted to determine when fatigue has been a potential contributing factor. The identified fatigue-sensitive situations can then be addressed to mitigate or to avoid them in the future. For example, if analyses identify a high probability of a specific error occurring during the hours when employees are highly susceptible to fatigue, engineering or procedural safeguards could potentially be put in place to minimize or eliminate the possibility of that error recurring.
In addition to data-driven methods, qualitative methods that are often founded on expert judgment can be very effective at identifying fatigue hazards. Examples of qualitative hazard identification methods include, but are not limited to, the following:
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These are just some of the methods available for identifying hazards. Each has advantages and disadvantages, and a combination of two or more methods may minimize any shortcomings.
A number of individual, organizational, or environmental factors can contribute to the likelihood of fatigue. As provided in the RSIA, these factors should be among the many items considered during a hazard analysis.
• On-duty call practices;
• Work and rest cycles;
• Frequency and duration of days off;
• Changes in start times;
• Policies regarding napping; and
• Policies and practices regarding marking-off.
The level of predictability of work assignments, particularly those assignments that occur at night, can influence the ability of employees to anticipate work assignments and obtain necessary off-duty sleep. Note that work shift or duty tour predictability alone will not necessarily eliminate fatigue risk, and it is possible for highly predictable schedules to also have high exposure to fatigue. Other factors such as time of shift, work-to-rest ratio, and the speed and direction of shift rotation may also play a role in the employee's ability to plan for and obtain sufficient sleep.
An FRA report
Job characteristics can also be a factor, including, but not limited to, whether the work is physically demanding, whether the work requires extended travel to a reporting point, and whether the employees are called upon to respond to emergencies. In general, a railroad that effectively manages the combined effects of crew scheduling, employee rostering, additional tasks assigned to employees, schedule changes, and other factors should succeed at minimizing fatigue-inducing conditions.
As mandated by the RSIA, a FRMP must systematically identify fatigue hazards and evaluate fatigue safety risks on the railroad system. The goal of this hazard analysis is to identify work schedules and other conditions that put employees at risk for a level of fatigue that compromises safety.
Different jobs may have different fatigue related risks. As such, it is important to examine the hazards associated with each job. A systematic assessment of risk involves: (1) Determining the severity and likelihood of potential incidents associated with the hazards identified; (2) assessing risk by evaluating the relative risk of each identified hazard and how it impacts established safety performance targets and/or by ranking hazards based on risk; and (3) systematically determining the order in which risks should be addressed. Selecting the criteria and methods for establishing priorities in advance will promote consistent decision making over time. However, flexibility is needed as risk tolerance levels or prioritizations can change over time as circumstances dictate.
One tool that railroads may want to consider using to assess their fatigue-related risk is a biomathematical model. A biomathematical model of performance and fatigue that has been properly validated and calibrated predicts accident risk based on analyzing identified periods of wakefulness and periods available for sleep. Validation of a biomathematical model of human performance and fatigue means determining that the output of the model actually measures human performance and fatigue levels. There are two dimensions to this validation. The first is that the model must be demonstrated to be consistent with currently established science in the areas of human performance, sleep, and fatigue level. The second part of the validation process involves determining that the model output has a statistically reliable relationship with the risk of a human-factors accident caused by fatigue, and that the model output does not have such a relationship with accident risks not associated with human factors.
Calibration of the biomathematical model involves the assignment of numerical values to represent aspects of empirical observations, similar to marking degrees on a thermometer. In the case of human fatigue level and performance, the calibration of a fatigue scale would start with the assignment of values ranging from “not fatigued” to “severely fatigued.” The calibration process starts during the validation process with the assignment of model output values to data bins for “not fatigued” and “severely fatigued.” The next step consists of determining the fatigue threshold. Given a scale for human fatigue level and performance, and a relationship between that scale and human factors accident risk, a final calibration point would determine the value at which fatigue becomes unacceptable because the increase in accident risk at that level compromises safety; this is the fatigue threshold. Railroads choosing to use biomathematical fatigue modeling in their schedule analysis will need to establish a fatigue threshold.
Currently, FRA has validated and calibrated two commercially available biomathematical fatigue models. These are the Fatigue Avoidance Scheduling Tool (FAST) and the Fatigue Audit InterDyne (FAID). However, any validated and calibrated biomathematical fatigue model may be used in schedule analysis. An FRA-sponsored report details how any biomathematical fatigue model may be validated and calibrated.
FRA expects that new methods for measuring and assessing fatigue risk will continue to be developed. If the system provides a scientifically valid measure of fatigue risk, whether using a biomathematical modeling tool or another system, its use is acceptable for purposes of developing and implementing an FRMP.
As discussed below, there are many ways to measure fatigue risk. The system or metric a railroad ultimately chooses to measure its fatigue risk will depend on a variety of factors and will be unique to each railroad. For example, regardless of whether scheduled service
When looking at job tasks, some form of a Haddon matrix can be helpful in determining the risk associated with a particular hazard. Figure 2 shows a basic Haddon risk matrix, which can be customized to represent categories of probability and severity that are meaningful and useful to the railroad. Such a matrix provides a visual representation of risks. As shown in the matrix, when the probability of an incident is low and severity is low, the risk is also low. Conversely, when the probability of an incident is high and severity is high, the risk is also high.
For example, overnight schedules will inevitably include the period identified as the Window of Circadian Low.
Using a fatigue model can be helpful for determining both frequency and severity of fatigue risk associated with specific schedules. Modeling is extremely useful because it applies scientific principles about fatigue to find the specific operational and employee factors that could contribute to significant performance changes due to fatigue. In general, modeling cannot consider non-duty-related causes of fatigue, individual differences related to sleep loss tolerance, and individual differences in circadian phase and amplitude. Because of these limitations, modeling should never be used to contradict an individual's reported fatigue level. However, these models can take into account the complex interactions among human physiology, work, and rest times. In the absence of such a model, the interaction of these factors would be very difficult to specify.
For example, if a fatigue model identified a particular type of work schedule that would benefit from fatigue mitigation, the railroad may discover underlying systems issues and factors (
Risk assessment processes must include a method for determining which risks most urgently require mitigation, which could be addressed at a later time, and which are minor enough that simply monitoring the hazard would be
Based on an analysis of the factors that lead to fatigue and practical mitigation alternatives, one or more mitigation options may be applied to reduce fatigue associated with specific schedules or situations. Risk mitigations are changes to the way things are done, or to the conditions under which things are done, that can reduce either the likelihood or the severity of a hazard. Examples of mitigations range from small actions, such as replacing a faded sign to improve visibility, to very large interventions, such as a system-wide rule change or technology implementation and associated training. The mitigations selected must be tailored to address at least one of the risks assessed. Railroads should, however, be alert to potential unintended consequences of mitigations, and be careful to select mitigations that minimize the possibility of inadvertently increasing other risks.
There are many ways railroads can mitigate the specific risk types that are required under the RSIA as part of an FRMP to be considered for mitigation. Below are some examples of how a railroad may mitigate these fatigue risks.
If the risk assessment shows that fatigue risks to the population of safety-related railroad employees associated with general health and medical conditions meet the railroad's established criteria for requiring mitigation, there are several approaches that can be taken. The railroad can establish new policies, such as those requiring periodic screening for specific medical conditions. The railroad can establish practices (
Information relevant to determining when to seek treatment can include the time of onset, duration of symptoms, related health factors, comorbid conditions, and observations from the employee or family. Observation of these factors can be helpful in distinguishing a condition such as transient insomnia, which often resolves on its own, from chronic insomnia, which frequently requires medical treatment. Railroads could consider informing their safety-related employees that information from family members may provide insight into a sleep disorder of which an employee may otherwise be unaware.
Railroads can collect information regarding the medical professionals involved in diagnosis. For some disorders, this may only involve an individual's primary care physician. Other disorders may require consultation from a neurologist, sleep specialist, cognitive behavioral therapist, or other medical professionals. In addition, it may be helpful to list or describe the diagnostic tests involved and the typical time required to obtain diagnosis. For example, a diagnosis of obstructive sleep apnea may require a sleep study such as a polysomnography, which generally requires an individual to spend the night in a sleep center.
Lastly, treatment options could be discussed. For some sleep disorders, behavioral modifications or lifestyle changes, such as weight loss, may be sufficient to address the medical condition. Other medical conditions may require breathing assistance via continuous positive airway pressure, medical devices (such as night guards or mandibular advancing devices), or medication.
Sometimes scheduling issues affect the opportunities of safety-related railroad employees to obtain sufficient quality and quantity of sleep. When the risk assessment determines that the risks associated with those schedules meets the railroad's established criteria for requiring mitigation, methods for mitigating those risks could include: (1) Identifying methods to minimize accidents and incidents that occur as a result of working at times when scientific and medical research has shown that increased fatigue levels disrupt employees' circadian rhythm; and (2) developing and implementing alertness strategies, such as policies on napping, to address acute drowsiness and fatigue while an employee is on duty.
Alertness strategies are generally classified into two broad categories: Preventative and operational. Preventative countermeasures are designed to minimize sleep loss and reduce the disruption to circadian cycles. The benefits of preventative countermeasures can be long-lasting.
Work schedule systems are typically designed to organize the timing and structure of work to maximize efficiency and productivity, and seldom are these schedules designed to minimize the safety risks associated with work schedules that are incompatible with human biological limitations, such as circadian rhythm.
The FRMP Working Group's Task Forces extensively discussed mitigation of identified fatigue risks in the areas set forth in the RSIA.
The Education and Training Task Force focused on the content and dissemination of training on the fatigue issues specific to the railroad industry. The Education and Training Task Force began by preparing a document summarizing existing fatigue training and education materials and highlighting the diversity of the materials and some of the major topics they covered. The document also includes information on other fatigue educational resources, including The Railroaders' Guide to Healthy Sleep website, existing FRA fatigue-related publications, other rail-related fatigue training and educational resources, and general fatigue resources.
The Education and Training Task Force also created the “Training Topics” document, which identifies appropriate fatigue-related training topics. The “Training Topics” document covers four major categories: Introductory fatigue training, off-duty fatigue issues, preventative strategies, and operational strategies. The Task Force members agreed on the content of most of the sections and subsections. A few topics represented major areas of concern for both railroad labor and railroad management.
Both labor and management members of the Task Force asked that a section on the role of individual differences in fatigue related to vulnerability, countermeasure efficacy, and performance be included in the “Training Topics” document as a topic for introductory fatigue training.
The Education and Training Task Force thoroughly discussed the “Training Topics” section on shiftwork as a cause of fatigue. Much of this discussion centered on predictability issues inherent in this type of work schedule and differing perspectives on how to address predictability.
Members of the Education and Training Task Force representing labor organizations also expressed major concerns with the “Training Topics” section on commuting. Specifically, labor did not feel the commuting section adequately captured the extended commuting requirements of some employees (
In 2019, FRA released a report examining the relationship between accidents and incidents involving maintenance-of-way employees and their work schedules to determine the role of fatigue in such accidents and incidents.
The section of the Training Topics document on scheduling had the most areas of concern and protracted discussion, particularly on the issue of schedule predictability.
The Task Force discussed that a fatigue education and training program must have the following characteristics to be effective: (1) The program must be technically correct, reflecting current scientific understanding of the issue being addressed; (2) information must be meaningful and useful to the intended audience; (3) the materials must be disseminated appropriately; and (4) the program's impact must be evaluated. Furthermore, the Task Force discussed the following basic elements of any fatigue training and education program.
(1) Fatigue definitions: Fatigue is a complex state that is characterized by a lack of alertness and reduced mental and physical performance, often accompanied by drowsiness.
(2) Signs and symptoms of fatigue: Although signs and symptoms of fatigue can vary among individuals in both their presence and magnitude, it is useful to review common signs and symptoms of fatigue. These should not be limited to physiological symptoms such as excessive blinking, yawning, or physiological discomfort, but also should include fatigue-related performance decrements such as increased reaction time.
(3) Causes of fatigue: Although individual differences play a significant role in how an individual will react to different causes of or risk factors for fatigue, some of the main causes of fatigue should be highlighted. These include: Amount of sleep, quality of sleep, amount of time since last sleep (
(4) Circadian rhythm: An individual's circadian rhythm dictates when he or she will be most alert and at what times he or she will feel the most fatigued. Employees should have a general understanding of the circadian rhythm, how it affects fatigue levels, how it is impacted by the light-dark cycle, and its role in such processes as body temperature, brain wave activity, and other biological functions.
(5) Individual differences: As part of a fatigue training and education program, the role individual differences play in fatigue should be understood. For example, there is a great deal of variability of sleep requirements among individuals. Some individuals may feel rested and alert after as few as 5 hours of sleep, while others may require 10 or more hours of sleep to feel rested and alert. These sleep requirements vary due to such factors as the exact phase and amplitude of an individual's circadian rhythm, activity level, age, fatigue sensitivity, and health. Furthermore, some individuals may be more sensitive to the effects of fatigue, and efficacy of countermeasures may vary depending on the individual.
(6) Fatigue misconceptions: There are some misconceptions associated with fatigue. Individuals are often poor judges of both their own fatigue level and the efficacy of fatigue countermeasures. This is an opportunity to debunk certain ineffective countermeasure myths and also to discuss the limitations associated with effective countermeasures. Certain stereotypes regarding fatigue can be
(7) Shiftwork: Many railroads operate 24 hours a day, 7 days a week, 365 days a year. This operational schedule requires employees to work different shifts. Passenger and freight operations, different railroad classes, and different jobs will all have different shiftwork needs. Some jobs will work a dedicated shift, while other jobs can be unpredictable and be based on a variety of factors including train schedules, employee availability, and other needs. When discussing shiftwork, training content will be influenced by a particular railroad's operations and collective bargaining agreements. However, discussions of shiftwork should provide information on the fatigue risks associated with night work, split shifts, consecutive shifts worked, and working different shifts throughout the week. This information should include strategies to cope with those shifts occurring during circadian lows.
(8) Illnesses and stress: Although it would be impractical to discuss the impact of every possible illness and stressor on fatigue, it nevertheless is worthwhile to discuss how illnesses and stress in general can impact sleep quality. Furthermore, some stressors and illnesses can lead to sensitization to fatigue-inducing factors.
(9) Consequences of fatigue: The potential consequences of fatigue are numerous and varied. However, from a training perspective, the key information to convey is the relationship between fatigue and performance. Although individual differences will influence how fatigue affects performance, in general, as fatigue levels increase, task performance decreases, and this decrease in performance increases accident risk.
(10) Introduction to FRA FRMP regulations: A railroad may choose to provide an overview of FRA regulations regarding the requirements for FRMPs. This overview can highlight any changes to operations as a result of the promulgation of the FRMP regulation as well as highlight the key requirements that all FRMPs must contain.
(11) Railroad FRMP: Following information on FRA FRMP regulations, a railroad may wish to take time to familiarize its employees with its own FRMP. Railroads should highlight any new policies or procedures associated with the creation of the FRMP as well as detail any changes or benefits that have resulted from its implementation. A railroad may also wish to provide employees with a mechanism to provide feedback about the FRMP as part of the railroad's own periodic review process. In addition, a railroad should familiarize its employees with its procedures and processes for reporting fatigue levels and fatigue mark-off policies.
As provided in the RSIA, any training and education program should be based on a foundation of the most current medical and scientific research;
Calabrese, C., Mejia, B., McInnis, C.A., France, M., Nadler, E., & Raslear, T.G., Time of day effects on railroad roadway worker injury risk,
Dorrian, J., Baulk, S.D., & Dawson, D., Work hours, workload, sleep and fatigue in Australian Rail Industry employees,
Dorrian, J., Hussey, F., & Dawson, D., Train driving efficiency and safety: Examining the cost of fatigue,
Gertler, J., Difiore, A., & Raslear, T.,
Gertler, J., & Viale, A.,
Kumagai, J. & Harnett, M. Data Analysis for Maintenance-of-Way Worker Fatigue (2019), available at:
Sussman, D., & Coplen, M., Fatigue and Alertness in the United States Railroad Industry Part 1: The Nature of the Problem,
Raslear, T.G., Gertler, J., & DiFiore, A., Work schedules, sleep, fatigue, and accidents in the US railroad industry,
The Education and Training Task Force also identified training topics addressing off-duty fatigue issues and preventative strategies. These included common sleep disorders, physiological versus subjective assessments of fatigue, lifestyle factors, nutrition and hydration, exercise, substance use, the home environment, and commuting.
The Task Force also created a “Dissemination Strategies” document outlining steps railroads should consider when choosing delivery approaches for fatigue education and training, and suggesting methods railroads could use for successful evaluation of a fatigue education and training program. The “Dissemination Strategies” document identifies and discusses the following ten elements of an effective dissemination and evaluation plan listed below.
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Finally, the Education and Training Task Force created a document that highlights and explains two general categories of fatigue countermeasures (preventative and operational), and provides examples of each. Preventative countermeasures, as the name suggests, are countermeasures designed to minimize sleep loss and reduce the disruption of circadian cycles and the benefits of preventative countermeasures can be long-lasting. Operational countermeasures are designed to enhance alertness and task performance while on duty and are generally only effective for a short time.
The FRMP Working Group's Scheduling Task Force discussed the scheduling issues that affect fatigue. However, several issues prevented agreement on scheduling including: (1) The need to differentiate between employees covered by HOS limitations (covered service employees) and employees not covered by such requirements; (2) the need for waivers and/or pilot projects to implement scheduling practices that might conflict with existing HOS limitations; (3) disagreement on whether using biomathematical fatigue models is appropriate for freight operations; (4) potential conflict with existing collective bargaining agreements; and (5) how much emphasis should be placed on an employee's work schedule predictability. The Scheduling Task Force did not produce a document.
The Infrastructure and Environment Task Force provided guidelines it suggested railroads should consider to mitigate fatigue when employees are involved in emergency work. The Task Force interpreted an emergency based on the nonapplication language in the HOS laws at 49 U.S.C. 21102(a). Specifically, the “Emergency Work” document provides that an emergency for purposes of the guidelines is defined in 49 U.S.C. 21102(a)(1)-(4), which states that the HOS requirements do not apply to situations involving a casualty, an unavoidable accident, an act of God, or a delay resulting from a cause unknown and unforeseeable to a railroad carrier or its officer or agent in charge of the employee when the employee left a terminal.
This definition incorporates a wide variety of emergency situations, including those referred to in section 20156(f)(3)(C), “derailments and natural disasters, or engagement in other intensive working conditions.” The employees responsible for responding to these emergency situations may include employees performing functions not covered by HOS requirements, and the “Emergency Work” document makes clear that the Infrastructure and Environment Task Force intended it to apply to these employees as well. For example, the “Emergency Work” document includes provisions such as relief assignments when an emergency is anticipated to extend more than 16 hours, and provisions to offer relief lodging for employees both between shifts of extended work at an emergency location, and, if necessary, for an employee to rest before commuting home after an extended period of emergency service. Such provisions would provide some protection against fatigue for those employees not subject to HOS requirements and, if the emergency situation resulted in the nonapplication of the HOS laws, for employees performing service normally covered by the HOS limitations.
The Task Force also created two documents; “Accommodations” and “Dispute Resolutions,” focused on mitigating fatigue related to issues at lodging facilities. The first document, “Accommodations,” includes guidelines for accommodations where employees rest during off-duty periods, and the second document, “Dispute Resolutions,” provides dispute resolution procedures for issues arising with lodging facilities that interfere with an employee's ability to rest.
The Task Force indicated that the accommodations guidelines are intended to provide elements for discussion during the required consultation between management and labor about a railroad's FRMP, rather than to provide minimum standards for lodging facilities. The Task Force did not expect every lodging facility would meet all of the listed criteria. The Task Force agreed that while the listed elements were desirable, they may not be possible at all locations, and, in some cases, collective bargaining agreements might provide for other arrangements. For example, while the guidelines recommend a single occupancy room, some existing labor agreements may provide for four employees to a room. Similarly, while a full or double bed
The “Dispute Resolution” document recognizes that employees will first seek to resolve issues at lodging facilities with on-site staff, such as the front desk at a hotel. The “Dispute Resolution” document recommends that FRMP plans include a railroad contact with authority over lodging decisions and require that contact to make a good faith effort to resolve lodging issues in a timely manner so the employee can obtain adequate rest before returning to duty. For example, if the heat is not working in a given room, the lodging facility will likely move the employee to a different room. However, if there were no other rooms available, or if the issue were something like electric power being out at an entire facility, the railroad contact should become involved to assist the employee in finding alternate lodging.
The “Dispute Resolution” document provides that FRMP plans should contain a dispute resolution process covering sleeping accommodations provided by or through the railroad. It should be noted that this process is not intended to supplant or modify the requirements established by 49 CFR 228.333,
The Task Force identified parameters it recommended employer-provided lodging should meet to the extent practicable. FRA notes that interim rest facilities provided by passenger train operators under 49 CFR 228.409,
The Task Force “Dispute Resolution” document does not define “adequate rest,” nor does it specify the conditions at a lodging facility that would prevent an employee from obtaining adequate rest. Employees covered by HOS laws or regulations would be required to receive the amount of off-duty time provided under the relevant laws or regulations. For other employees, rest requirements may depend on the situation, or may be provided by a collective bargaining agreement or other mechanism. However, the Task Force “Dispute Resolution” document suggests that if an issue arises at a lodging facility that interferes with an employee's ability to obtain rest, the employee should receive the amount of rest he or she would have had if the lodging issue had not occurred. For example, if there are no towels in the room when an employee arrives, but the front desk promptly brings towels upon request, this should not hinder the employee's ability to get adequate rest. On the other hand, if an employee is provided a room with a broken bed, and it takes five hours to locate another room or bed, the railroad may need to adjust the time an employee is required to return to duty so the employee can obtain adequate rest.
Lastly, as part of its discussions, the Task Force identified circumstances when employees may have to work under excessive fatigue conditions. In these instances, when, despite best efforts, employees must work under conditions identified as having an excessive risk for fatigue, the Task Force discussed that the specific risks and hazards associated with operations under excessive fatigue should be identified. Once identified, an excessive fatigue protocol can be implemented for employees at risk. The Task Force suggested that railroads may wish to consider formalizing these protocols into a Workplace Fatigue Policy. They also suggested that a fatigue policy may be an effective way to communicate how operations will be handled when employees are working under fatigued conditions. This policy could be system-wide or site or craft specific. A fatigue policy may include information about: (1) Roles and responsibilities of employees and supervisors when working under excessive fatigue conditions; (2) maximum shift length; (3) control measures for specific jobs, tasks, or operations; (4) fatigue self-assessment checklists; (5) identification of errors that are more likely to happen when fatigued and procedures to reduce the likelihood of these errors; (6) procedures for managing employees working under excessive fatigue conditions; (7) procedures for reporting potential hazards and risks; and (8) procedures for when an employee is too fatigued to continue work (
As required in 49 CFR 270.103(p)(1)(viii) and 49 CFR 271.105(c)(3), FRA proposes that each railroad must develop a system to track identified risks and mitigation strategies within the FRMP. Railroads must continually monitor all identified risks, not just risks that are currently being targeted for mitigation. As a railroad's FRMP matures, mitigation strategies are implemented, and operations change, risks will also change. A railroad may find that certain risks have been essentially eliminated, while others may have been significantly reduced, and previously undetected risks may emerge. As risks develop, the system must be able to incorporate these newly identified risks into their processes.
Evaluation of fatigue-related information might show that some mitigation strategies do not meet expectations for effectively reducing fatigue. It could also show that changes in schedules, the addition of new technologies, turnover in the workforce, added demands for service, and other operational changes could present new fatigue hazards or change the risks associated with hazards already known. When either of these circumstances arises, the fatigue risk landscape is altered, and the railroad should again use the risk factor analysis processes to address those changes.
For risks being mitigated, the railroad should note the date the mitigation strategy was implemented and track the progress and success of the mitigation strategy over time. Risks that are not mitigated or have not been mitigated to the extent desired should be evaluated for changes in mitigation strategies, as appropriate. Risks that have been successfully eliminated should be noted, and new risks that have emerged should be assessed for probability and severity and incorporated into the railroad's risk assessment catalog. Existing risks should also be reviewed for changes in probability and severity. As a railroad reviews its fatigue-related risks and risk tolerance, the risks to be mitigated and the types of mitigation strategy to be used may change over time. Evaluation might also show that some portion of the FRMP is not being implemented as designed. It could also identify aspects of the program that, even though they are working as
Finally, consistent with 49 CFR 271.107, an effective FRMP includes feedback mechanisms and regular information updates about the system to all affected employees to encourage cooperative participation in the FRMP.
FRA proposes to amend 49 CFR part 270 (SSP) by adding a new subpart E, and to amend 49 CFR part 271 (RRP) by adding new subpart G. As proposed, each of these new subparts would be titled “Fatigue Risk Management Programs;” substantively identical; and set forth the requirements for railroads to develop and implement FRMPs as part of their SSPs or RRPs. FRA also proposes to amend: § 270.103(a)(1) to ensure a railroad's SSP plan includes subpart E, by replacing the word “section” with the word “part”; § 271.101(a) by adding an FRMP to the list of required elements of an RRP; and § 271.201, to include an FRMP plan as a required component of an RRP plan.
The new subparts would require each railroad subject to part 270 or part 271 (covered railroads) to establish and implement an FRMP that is supported by an FRA-approved written FRMP plan, as a component of a railroad's SSP or RRP. This proposed rule would also require covered railroads to review their FRMP annually, and if necessary, make FRA-approved updates to their plans. FRA is proposing this rule in its effort to improve rail safety continually and to satisfy the statutory mandate in 49 U.S.C. 20156. FRA seeks comments on all aspects of the proposed rule.
Proposed §§ 270.401 and 271.601 contain definitions for terms used in this NPRM. The sections include proposed definitions for the terms: Contributing factor, fatigue, fatigue-risk analysis, FRMP, FRMP plan, and safety-related railroad employee. The proposed definitions are intended to clarify the meaning of important terms used in this proposed rule and to minimize potential misinterpretation of the regulations. FRA is proposing to define “contributing factor” as a circumstance or condition that helps cause a result
While the RSIA did not define “fatigue,” FRA is proposing to define “fatigue” consistent with the DOT operational definition
FRA proposes to define “fatigue risk analysis” as a risk-based analysis that is focused on the hazards and risks associated with fatigue. In 49 CFR 271.103(b), a covered railroad is required to conduct a risk-based hazard analysis of its operations that includes: (1) Identification of hazards; and (2) a calculation of risk by determining and analyzing the likelihood and severity of potential events associated with those hazards.
Section 20156(f)(1) requires a railroad to have a fatigue management plan designed to reduce the fatigue experienced by “safety-related employees.” FRA proposes to define “safety-related railroad employee” consistent with the definition of the term in 49 U.S.C. 20102. As proposed, “safety-related railroad employee” would mean a person: (1) Subject to 49 U.S.C. 21103, 21104, or 21105 or 49 CFR part 228 subpart F (the hours of service laws and regulations); (2) involved in railroad operations, but not subject to the hours of service laws and regulations; (3) who inspects, installs, repairs or maintains track, roadbed, signal and communication systems, and electric traction systems including a roadway or railroad bridge worker; (4) who is a hazmat employee as defined in 49 U.S.C. 5102(3); (5) who inspects, repairs, or maintains locomotives, passenger cars, or freight cars; or (6) who is the employee of any person who enters into a contractual relationship with the railroad either to perform significant safety-related services on the railroad's behalf or to utilize significant safety-related services provided by the railroad for railroad operations purposes, if the person performs one of the functions identified in paragraphs (1) through (5).
The SSP and RRP rules do not use the term “safety-related employee” because the RSIA does not limit the railroad safety risk reduction requirement to these employees.
FRA requests public comment on these proposed definitions and whether other terms used in this proposal should be defined.
Proposed §§ 270.403 and 271.603 explain the purpose and scope of the proposed rule. As proposed, paragraph (a) of each section states that the purpose of the subparts is to require railroads to develop and implement FRMPs to improve railroad safety through structured, proactive processes and procedures to identify and mitigate the risks associated with fatigue on their employees.
Proposed paragraph (b) of these sections address the scope of the proposed rule and would require railroads to develop their FRMPs to reduce the fatigue of their safety-related railroad employees and to reduce the risk of railroad accidents, incidents, injuries, and fatalities where the fatigue of any of these employees is a contributing factor.
These proposed sections set forth the rule's general requirements. Paragraph (a) in each of these sections would require each railroad subject to either RRP or SSP to establish and implement an FRMP fully as part of its SSP or RRP. As proposed, these paragraphs would also require each railroad to develop and implement an FRMP plan to support its FRMP. A railroad's FRMP plan would be required to meet the requirements of proposed § 270.409 or 271.609, and be approved by FRA under the processes in subpart C of part 270 or subpart D of part 271. Consistent with Section 20156's mandate for railroads to update their fatigue mitigation plans periodically, proposed paragraph (a) would also require railroads to update their FRMP plans as necessary as part of the annual, internal assessment of the railroad's SSP or RRP already required by existing §§ 270.303 and 271.401. FRA believes the annual internal assessment should be sufficient for a railroad to determine whether any aspect of its FRMP plan requires updating. FRA requests comments on whether the annual internal assessment provides an appropriate mechanism and timing for evaluating and updating railroads' FRMP plans.
Proposed paragraph (b) of these sections would require a railroad to explain in its FRMP plan its method for analyzing fatigue risks and its process(es) for implementing its FRMP.
Proposed paragraphs (c) of these sections would require railroads to submit their FRMP plans to FRA for approval either within six months of publication of a final rule in this proceeding or within the applicable existing timelines in parts 270 and 271 for filing SSP or RRP plans. These paragraphs would also require railroads to follow the existing processes in parts 270 and 271 for submitting updates of their FRMP plans to FRA for approval.
Proposed paragraph (d) would require FRA to approve or disapprove railroads' FRMP plans (and any updates) under the existing approval processes in parts 270 and 271 applicable to FRA approval of railroad SSP plans and RRP plans.
Proposed §§ 270.407 and 271.607 set forth the proposed requirements for railroads' FRMPs. As proposed, paragraph (a) of these sections sets forth the general requirement that a railroad subject to part 270 or 271 would have to establish and implement an FRMP that meets certain requirements.
Proposed paragraph (b) of these sections contains the minimum requirements for the fatigue-risk analysis part of a railroad's FRMP. These paragraphs specify that a railroad's fatigue-risk analysis must include identification of fatigue-related railroad safety hazards, assessment of the risks associated with those hazards, and prioritization of those risks for mitigation. The proposed paragraph also requires that the fatigue risk analysis consider, at a minimum, three categories of risk factors:
(1) General health and medical conditions that can affect the fatigue levels of safety-related railroad employees;
(2) scheduling issues that can affect the opportunities of safety-related railroad employees to obtain sufficient quality and quantity of sleep; and
(3) characteristics of each job category worked by safety-related railroad employees that can affect the fatigue levels and risk for fatigue of safety-related railroad employees.
Railroads are not limited to consideration of these three types of risk factors in their FRMPs and FRA encourages railroads to consider other relevant factors based on developments in fatigue science. The types of principles and processes that inform a fatigue-risk analysis are well-established and, as discussed in detail above and in the preamble of the SSP and RRP proposed rules, have been adopted into industry standards and described in detail in other written resources.
Paragraph (c) of these sections would require a railroad as part of its FRMP to develop and implement mitigation strategies that improve safety by reducing the risk of railroad accidents, incidents, injuries, and fatalities where fatigue of any of its safety-related railroad employees is a contributing factor. These paragraphs state that as a railroad develops and implements mitigation strategies, it would be required to consider, at a minimum, the railroad's policies, practices, and communication. Paragraphs (c)(1)-(3) describe each of these three areas of consideration in more detail.
Paragraph (c)(1) would require railroads to consider developing and implementing policies to reduce the risk of the exposure of its safety-related railroad employees to fatigue-related railroad safety hazards on its system.
Paragraph (c)(2) would require railroads to consider developing and implementing operational practices to reduce the risk of the exposure of its safety-related railroad employees to fatigue-related railroad safety hazards on its system.
Paragraph (c)(3) would require railroads to consider developing and implementing training, education, and outreach methods to deliver fatigue-related information effectively to its safety-related railroad employees. At a minimum, a railroad must consider the need to include employee education and training on the physiological and human factors that affect fatigue and strategies to reduce or mitigate the effects of fatigue based on the most current scientific and medical research and literature. If a railroad chooses to include these subjects in its training, this training would supplement the requirement in 49 CFR part 243 to develop minimum training standards for each occupational category that includes a list of the Federal railroad safety laws, regulations, and orders that an employee is required to comply with by adding employee fatigue education and training topics that relate to employee safety independent of any regulatory or statutory requirements.
Paragraph (d) proposes requirements for a railroad to develop and implement procedures and processes for monitoring and evaluating its FRMP. Monitoring and evaluation are necessary parts of a railroad's FRMP; they enable a railroad to determine whether the FRMP is effectively reducing the numbers and rates of railroad accidents,
Proposed §§ 270.409 and 271.609 would require a railroad to adopt and implement its FRMP through an FRMP plan that meets certain requirements. As proposed, paragraph (a) of these sections would require railroads to develop their FRMP plans in consultation with directly-affected employees and FRA would have to approve a railroad's FRMP. The existing consultation and approval processes of parts 270 and 271 would apply.
Proposed paragraph (b) would require the FRMP plan to describe specific, fatigue-related goals of the FRMP and clear strategies for attaining those goals.
Proposed paragraph (c) addresses the methods a railroad uses to develop its FRMP plan. Proposed paragraph (c)(1) would require an FRMP plan to describe the railroad's method(s) for conducting the fatigue-risk analysis as part of its FRMP.
Proposed paragraph (c)(2) would require an FRMP plan to describe the railroad's processes for identifying and selecting mitigation strategies, and for monitoring identified hazards while the risk associated with the hazard is being mitigated.
Proposed paragraph (c)(3) would require an FRMP plan to describe a railroad's processes for monitoring and evaluating the overall effectiveness of the FRMP and the mitigation strategies, along with procedures for reviewing and updating the FRMP. As noted above, FRA anticipates this review will be the same as for the overall SSP or RRP.
Proposed paragraph (d) of this section would require an FRMP plan to describe how the railroad will implement its FRMP. As proposed, a railroad may implement its FRMP in stages, provided the FRMP is fully implemented and operational within 36 months of FRA's approval of the plan. This implementation plan would cover the entire implementation period and contain a timeline (beginning with the date FRA approves the railroad's FRMP plan) describing when the railroad will achieve specific and measurable implementation milestones.
Consistent with 49 CFR 270.103(p)(2)(i) and 49 CFR 271.203(b)(3), as part of the implementation description, proposed paragraph (d)(1) would require a railroad to include a description of the roles and responsibilities of each position or job function with significant responsibility for implementing the railroad's FRMP (including any positions or job functions held by an entity or contractor that provides significant FRMP services for the railroad).
Consistent with 49 CFR 271.225(b)(2), proposed paragraph (d)(2) would require a railroad to include a description of the planned timeline for meeting the milestones required for the FRMP plan to be fully implemented. Proposed paragraphs (d)(3) and (d)(4) would require a railroad to describe how it will make significant changes to the FRMP, and procedures for consultation with directly affected employees on substantive amendments to the FRMP plan.
Proposed paragraph (e) would require that a railroad submit its FRMP plan to FRA by amending its SSP plan or RRP plan. Since this proposed rule would be published as a final rule after the SSP and RRP final rules are in effect and railroads have submitted their SSP plans or RRP plans to FRA under part 270, subpart C, or part 271, subpart D, railroads would need to amend their SSP plans or RRP plans to include an FRMP plan. Thus, as proposed, a railroad would follow the procedures in § 270.201(c) or 271.303 to amend its SSP plan or RRP plan. FRA proposes that an FRMP plan is not considered a safety-critical amendment of an SSP plan for the purposes of § 270.201(c)(1)(ii), so a railroad should be able to submit the FRMP plan to FRA as an amendment to its SSP plan or RRP plan 60 days before the proposed effective date of the FRMP plan. If a railroad is initially not required to submit an SSP plan or RRP plan, but is later required to, the railroad must include an FRMP plan as part of its SSP plan or RRP plan submission to FRA, or submit the FRMP plan by August 19, 2021, whichever is later. FRA will review the railroads' FRMP plans under the amendment process in § 270.201(c)(2) or 271.303(c).
This proposed rule is a non-significant regulatory action within the meaning of Executive Order 12866 (E.O. 12866) and DOT's Administrative Rulemaking, Guidance, and Enforcement Procedures in 49 CFR part 5.
FRA has prepared and placed a Regulatory Evaluation addressing the economic impact of this proposed rule in the docket (Docket No. FRA-2015-0122). The Regulatory Evaluation contains estimates of the costs and benefits of this proposed rule that are likely to be incurred over a ten-year period. FRA estimated the costs and benefits of this proposed rule using discount rates of 3 and 7 percent. FRA was unable to quantify the costs and benefits for all the elements within the proposed regulation for both passenger and freight railroads. FRA presents monetized costs and benefits where possible and discusses those non-quantified elements qualitatively where data was lacking.
Section 103 of the RSIA mandates that FRA (as delegated by the Secretary) require certain railroads to establish a railroad safety risk reduction program, of which an FRMP is a required component. This proposed rule is part of FRA's efforts to improve rail safety continually and to satisfy the statutory mandate in the RSIA.
FRA anticipates railroads will develop and implement mitigation strategies that are either cost-beneficial or cost-neutral to the railroad. FRA requests public comment on this assumption. FRA is particularly interested in the experience of railroads that have already utilized mitigation strategies to reduce the risk of the exposure of safety-related railroad employees to fatigue-related railroad safety hazards on their systems; specifically, whether the railroads have realized costs and benefits from the development and implementation of such mitigation strategies, and how much those strategies cost the railroads to implement.
The Regulatory Evaluation analyzes two mitigation strategies to quantify potential costs and benefits that railroads may achieve through the proposed regulation: Training and screening for sleep conditions. However, since the proposed regulation gives railroads the flexibility to select
The costs and benefits
FRA is interested in comments addressing the Regulatory Evaluation's methodology for establishing the accident pool used to calculate benefits as well as establish the effectiveness rates of mitigations. Specifically, FRA seeks public input on the studies used to establish the effectiveness rates and the use of all human factor accidents within the benefit pool. As the proposed regulation does not specifically require railroads to implement specific mitigations, but rather allows railroads to implement the mitigation that best addresses their specific fatigue risks, FRA requests comments on any costs and benefits that might be associated with the elements that FRA was unable to quantify.
FRA's analysis shows there are many factors that are difficult to quantify both for passenger and freight railroads. Where possible, FRA's Regulatory Evaluation estimates costs and benefits for each element within the proposed regulation. FRA also requests comments on the elements that are qualitatively discussed. Given current railroad business and operational practices, this analysis demonstrates the fatigue training element, an element that all railroads will most likely implement, may be cost effective. FRA also believes the napping mitigation presented within the Regulatory Evaluation's alternative analysis could be cost beneficial. However, given the uncertainty surrounding the use of alertness as a measure of reduced fatigue, in an effort to not overestimate the benefits associated with the proposed regulation, FRA does not present the findings regarding napping in the main analysis of the Regulatory Evaluation. Despite the uncertainty, FRA believes that there could be significant reduction in fatigue with the implementation of a napping mitigation. Not only do various studies support the idea that napping reduces fatigue, but a large number of Class I railroads already have policies supporting napping, which suggests that the benefits outweigh the costs for those railroads.
The Regulatory Flexibility Act of 1980 (5 U.S.C. 601
FRA is initiating this NPRM pursuant to 49 U.S.C. 20156, which provides that FRA, by delegation from the Secretary, shall require certain railroads to develop and implement an FRMP as part of either their SSP or RRP.
This NPRM proposes to implement the FRMP element of the statutory mandate by requiring each Class I freight railroad, each railroad that provides intercity rail passenger transportation or commuter rail passenger transportation, and each ISP railroad to develop and implement an FRMP as one component of a larger railroad safety RRP or SSP. A detailed discussion of the objectives and legal basis for the proposed rule is provided in Section III of the preamble.
The Regulatory Flexibility Act of 1980 (5 U.S.C. 601,
Federal agencies may adopt their own size standards for small entities in consultation with SBA and in conjunction with public comment. Thus, in consultation with SBA, FRA has published a final statement of agency policy that formally establishes “small entities” or “small businesses” as railroads, contractors, and shippers that meet the revenue requirements of a Class III railroad
The universe of entities this NPRM would affect includes only those small entities that can reasonably be expected to be directly affected by the provisions of this rule. In this case, the universe consists of railroads that would be subject to the requirements under 49 CFR part 270 and under the RRP rule. For the purposes of this analysis, 736 railroads would be considered “small entities,” since they are Class III freight railroads. Of the 736 small entities, 695 are on the general system and could be potentially impacted by the proposed regulation.
For purposes of this analysis, this proposed rule will apply to 35 commuter or other short-haul passenger railroads and two intercity passenger railroads, the National Railroad Passenger Corporation (Amtrak) and the Alaska Railroad Corporation (ARC).
Based on the definition of “small entity,” only one commuter or other short-haul passenger railroad is considered a small entity: The Hawkeye Express (operated by the Iowa Northern Railway Company).
The impact of the proposed regulation on these small entities is unknown, since FRA is allowing the railroads to decide their fatigue mitigations based on their specific needs instead of mandating that railroads adopt specific mitigation programs. Furthermore, FRA estimates that only 50 ISP railroads would be impacted by the proposed regulation, which is approximately 7 percent of small entities, assuming all the 50 ISP railroads are considered small entities. FRA estimates that the 50 ISP railroads would be impacted over the course of 10 years, at a rate of approximately 5 ISPs per year. This estimate is consistent with the RRP final rule that FRA has published. Therefore, because of the uncertainty surrounding both the number of ISP railroads that would be considered small entities as well as the impact that the proposed regulation would have on those small entities, the impact that the NPRM would have on small entities is unclear. FRA requests comments about the impact that the proposed regulation would have on both freight and passenger rail small entities.
The rule will require an ISP railroad to develop and implement an FRMP under an RRP or SSP plan that FRA has reviewed and approved. There are several reporting and recordkeeping costs associated with the proposed regulation. Since the railroads have the flexibility to adjust their FRMPs to their specific risks, these costs will vary based on the respective risks as well as the size of the ISP railroad. While FRA is unable to estimate the burden that the proposed regulation would have on small entities, FRA expects that the impact will be proportional to the number of employees as well as the mitigation strategy that is implemented. Other mitigation strategies such as screening for sleep disorders could include costs that are higher.
While FRA is unable to identify the specific railroads that would be considered ISPs, to estimate the potential impact that developing an FRMP would have on an ISP railroad, FRA used the average Class III revenue to estimate the impact.
FRA has identified several possible reporting and recordkeeping costs associated with the proposed regulation such as:
(1) Development, submission to FRA, and recordkeeping of the FRMP plan;
(2) identification of the specific fatigue risks that impact the specific ISP; and
(3) recordkeeping associated with fatigue training.
More information about the burden and associated costs for each of the projected reporting, recordkeeping, and other requirements can be found in the information collection request FRA will be submitting to the Office of Management and Budget (OMB) under the Paperwork Reduction Act of 1995, 44 U.S.C. 3501,
While the proposed FRMP rule would be a component of the RRP and SSP rules, the proposed FRMP would specifically address fatigue-related risks and is aimed at mitigating those risks specifically. As such, there will be some coordination needed to ensure that a railroad's FRMP is developed and worked into the railroad's RRP or SSP. Regardless, considering that the proposed FRMP is a subpart within both RRP and SSP, neither RRP nor SSP provide any elements, outside of the proposed regulation, that are designed to mitigate fatigue related risk specifically. As such, FRA does not expect there to be any relevant Federal rules that would duplicate, overlap with, or conflict with the proposed regulations in this NPRM.
Within the preamble above, FRA outlines the various fatigue risks that railroads need to address. FRA does not specifically state, however, in what manner the railroads must address those risks. One alternative is for railroads to not create an FRMP and to continue to address their fatigue risks as they have currently been doing. This would result in the railroads violating the RSIA mandate. In addition, if railroads continue to address their fatigue risks as they have in the past, FRA expects that safety would continue to be negatively impacted because the fatigue risks are not adequately addressed currently. Since railroads have some flexibility in how they design their FRMPs, it is expected that the impact of each FRMP on a railroad will be minimal as the flexibility in implementing mitigations will most likely be done in a cost effective manner. FRA expects that railroads will consider the cost of the mitigation as well as the fatigue risks when creating their FRMPs.
FRA invites all interested parties to submit data and information regarding the potential economic impact that would result from adoption of the proposals in this NPRM. FRA will consider all comments received in the public comment process when making a determination.
Executive Order 13132, “Federalism” (64 FR 43255, Aug. 10, 1999), requires FRA to develop an accountable process to ensure “meaningful and timely input by State and local officials in the development of regulatory policies that have federalism implications.” The Executive Order defines “policies that have federalism implications” to include regulations that 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.” Under Executive Order 13132, the agency may not issue a regulation with federalism implications that imposes substantial direct compliance costs and that is not required by statute, unless the Federal Government provides the funds necessary to pay the direct compliance costs incurred by State and local governments or the agency consults with State and local government officials early in the process of developing the regulation. Where a regulation has federalism implications and preempts State law, the agency seeks to consult with State and local officials in the process of developing the regulation.
FRA analyzed this NPRM consistent with the principles and criteria contained in Executive Order 13132. FRA has determined the proposed rule would not have substantial direct effects on States, on the relationship between the national government and States, or on the distribution of power and responsibilities among the various levels of government. In addition, FRA has determined this proposed rule would not impose substantial direct compliance costs on State and local governments. Therefore, the consultation and funding requirements of Executive Order 13132 do not apply.
This NPRM proposes to add subpart E, Fatigue Management Plans, to 49 CFR part 270 and subpart G, Fatigue Management Plans, to 49 CFR part 271. FRA is not aware of any State with regulations similar to this proposed rule. However, FRA notes that this part could have preemptive effect by the operation of law under 49 U.S.C. 20106. Section 20106 provides that States may not adopt or continue in effect any law, regulation, or order related to railroad safety or security that covers the subject matter of a regulation prescribed or order issued by the Secretary of Transportation (with respect to railroad safety matters), unless the State law, regulation, or order (1) qualifies under the “essentially local safety or security hazard” exception to sec. 20106; (2) is not incompatible with a law, regulation, or order of the U.S. Government; and (3) does not unreasonably burden interstate commerce.
In sum, FRA analyzed this proposed rule consistent with the principles and criteria in Executive Order 13132. FRA has determined this proposed rule has no federalism implications and has determined it is not required to prepare a federalism summary impact statement for this proposed rule.
The Trade Agreement Act of 1979 prohibits Federal agencies from engaging in any standards or related activities that create unnecessary obstacles to the foreign commerce of the United States. Legitimate domestic objectives, such as safety, are not considered unnecessary obstacles. The Act also requires consideration of international standards, and, where appropriate, that they be the basis for U.S. standards. This rulemaking is purely domestic in nature and will not affect trade opportunities for U.S. firms doing business overseas or for foreign firms doing business in the United States.
The information collection requirements in this proposed rule are being submitted for approval to the Office of Management and Budget (OMB) under the Paperwork Reduction Act of 1995, 44 U.S.C. 3501,
All
Organizations and individuals desiring to submit comments on the collection of information requirements should direct them to Ms. Hodan Wells via email at
OMB is required to make a decision concerning the collection of information requirements contained in this proposed rule between 30 and 60 days after publication of this document in the
FRA is not authorized to impose a penalty on persons for violating information collection requirements which do not display a current OMB control number, if required. FRA intends to obtain current OMB control numbers for any new information collection requirements resulting from this rulemaking action prior to the effective date of the final rule. The OMB control number, when assigned, will be announced by separate notice in the
FRA has evaluated this proposed rule consistent with the National Environmental Policy Act (NEPA; 42 U.S.C. 4321,
The purpose of this rulemaking is to propose requirements for certain railroads to develop and implement an FRMP, as one component of the railroads' larger railroad safety risk reduction programs. This rule does not directly or indirectly impact any environmental resources and will not result in significantly increased emissions of air or water pollutants or noise. Instead, the proposed rule is likely to result in safety benefits. In analyzing the applicability of a CE, FRA must also consider whether unusual circumstances are present that would warrant a more detailed environmental review.
Pursuant to Section 106 of the National Historic Preservation Act and its implementing regulations, FRA has determined this undertaking has no potential to affect historic properties.
Executive Order 12898, Federal Actions to Address Environmental Justice in Minority Populations and Low-Income Populations, and DOT Order 5610.2B
Under Section 201 of the Unfunded Mandates Reform Act of 1995 (2 U.S.C. 1531), each Federal agency “shall, unless otherwise prohibited by law, assess the effects of Federal regulatory actions on State, local, and tribal governments, and the private sector (other than to the extent that such regulations incorporate requirements specifically set forth in law).” Section 202 of the Act (2 U.S.C. 1532) further requires that “before promulgating any general notice of proposed rulemaking that is likely to result in the promulgation of any rule that includes any Federal mandate that may result in expenditure by State, local, and tribal governments, in the aggregate, or by the private sector, of $100,000,000 or more (adjusted annually for inflation) in any 1 year, and before promulgating any final rule for which a general notice of proposed rulemaking was published, the agency shall prepare a written statement” detailing the effect on State, local, and tribal governments and the private sector. This proposed rule will not result in the expenditure, in the aggregate, of $100,000,000 or more (as adjusted annually for inflation), in any one year, and thus preparation of such a statement is not required.
Executive Order 13211 requires Federal agencies to prepare a Statement of Energy Effects for any “significant energy action.” 66 FR 28355, May 22, 2001. FRA evaluated this NPRM under Executive Order 13211, and determined this NPRM is not a “significant energy action” under the Executive Order 13211.
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, to
Fatigue, Penalties, Railroad safety, Reporting and recordkeeping requirements, System safety.
Fatigue, Penalties, Railroad safety, Reporting and recordkeeping requirements, Risk reduction.
For the reasons discussed in the preamble, FRA proposes to amend chapter II, subtitle B of title 49, Code of Federal Regulations as follows:
49 U.S.C. 20103, 20106-20107, 20118-20119, 20156, 21301, 21304, 21311; 28 U.S.C. 2461, note; and 49 CFR 1.89.
(a)
As used in this subpart—
(1) Identifies and evaluates the fatigue-related railroad safety hazards on its system(s); and
(2) Determines the degree of risk associated with each of those hazards.
(1) A person subject to 49 U.S.C. 21103, 21104, or 21105;
(2) Another person involved in railroad operations not subject to 49 U.S.C. 21103, 21104, or 21105;
(3) A person who inspects, installs, repairs or maintains track, roadbed, signal and communication systems, and electric traction systems including a roadway worker or railroad bridge worker;
(4) A hazmat employee defined under 49 U.S.C. 5102(3);
(5) A person who inspects, repairs, or maintains locomotives, passenger cars, or freight cars; or
(6) An employee of any person who utilizes or performs significant railroad safety-related services, as described in § 270.103(d)(2), if that employee performs a function identified in paragraphs (1) through (5) of this definition.
(a)
(b)
(1) Design its FRMP to reduce the fatigue its safety-related railroad employees experience and to reduce the risk of railroad accidents, incidents, injuries, and fatalities where the fatigue of any of these employees is a contributing factor;
(2) Develop its FRMP by systematically identifying and evaluating the fatigue-related railroad safety hazards on its system, determining the degree of risk associated with each hazard, and managing those risks to reduce the fatigue that its safety-related railroad employees experience. This system-wide fatigue risk identification and evaluation process must account for the varying circumstances of a railroad's operations on different parts of its system; and
(3) Employ in its FRMP the fatigue risk mitigation strategies a railroad identifies as appropriate to address those varying circumstances.
(a) Each railroad subject to this part shall:
(1) Establish and implement an FRMP as part of its SSP; and
(2) Establish an FRA-approved FRMP plan as a component of a railroad's FRA-approved SSP plan and then update its FRMP plan as necessary as part of the annual internal assessment of its SSP under § 270.303.
(b) A railroad's FRMP plan must explain the railroad's method of analysis of fatigue risks and the railroad's process(es) for implementing its FRMP.
(c)(1) A railroad shall submit an FRMP plan to FRA for approval no later than either the applicable timeline in § 270.201(a) for filing its SSP plan or [date six months after publication of the final rule in the
(2) A railroad shall submit updates to its FRMP plan under the process for amending its SSP plan in § 270.201(c).
(d) FRA shall review and approve or disapprove a railroad's FRMP plan and amendments to that plan under the process for reviewing SSP plans and amendments in § 270.201(b) and (c), respectively.
(a)
(b)
(1) General health and medical conditions that can affect the fatigue levels among the population of safety-related railroad employees;
(2) Scheduling issues that can affect the opportunities of safety-related railroad employees to obtain sufficient quality and quantity of sleep; and
(3) Characteristics of each job category of safety-related railroad employees work that can affect fatigue levels and risk for fatigue of those employees.
(c)
(1)
(i) Providing opportunities for identification, diagnosis, and treatment of any medical condition that may affect alertness or fatigue, including sleep disorders;
(ii) Identifying methods to minimize accidents and incidents that occur as a result of working at times when scientific and medical research have shown increased fatigue disrupts employees' circadian rhythms;
(iii) Developing and implementing alertness strategies, such as policies on napping, to address acute drowsiness and fatigue while an employee is on duty;
(iv) Increasing the number of consecutive hours of off-duty rest, during which an employee receives no communication from the employing railroad or its managers, supervisors, officers, or agents; and
(v) Avoiding abrupt changes in rest cycles for employees.
(2)
(i) Minimizing the effects on employee fatigue of an employee's short-term or sustained response to emergency situations, such as
(ii) Developing and implementing scheduling practices for employees, including innovative scheduling practices, on-duty call practices, work and rest cycles, increased consecutive days off for employees, changes in shift patterns, appropriate scheduling practices for varying types of work, and other aspects of employee scheduling to reduce employee fatigue and cumulative sleep loss; and
(iii) Providing opportunities to obtain restful sleep at lodging facilities, including employee sleeping quarters provided by the railroad carrier.
(3)
(d)
(1) The evaluation shall include, at a minimum:
(i) Periodic monitoring of the railroad's operational environment to detect changes that may generate new hazards;
(ii) Analysis of the risks associated with any identified hazards; and
(iii) Periodic safety assessments to determine the need for changes to its mitigation strategies.
(2) A railroad shall evaluate newly-identified hazards, and hazards associated with ineffective mitigation strategies, through processes for analyzing fatigue risks described in the railroad's FRMP plan.
(3) Any necessary changes not addressed prior to a railroad's annual internal assessment must be included in the internal assessment improvement plans required under § 270.303.
(a)
(b)
(c)
(i) The scope of the analysis, which is the covered population of safety-related railroad employees;
(ii) The processes a railroad will use to identify fatigue-related railroad safety hazards on its system and determine the degree of risk associated with each fatigue-related hazard identified;
(iii) The processes a railroad will use to compare and prioritize identified fatigue-related risks for mitigation purposes; and
(iv) The information sources a railroad will use to support ongoing identification of fatigue-related railroad safety hazards and determine the degree of risk associated with those hazards.
(2)
(i) Identifying and selecting fatigue risk mitigation strategies; and
(ii) Monitoring identified fatigue-related railroad safety hazards.
(3)
(i) A railroad's processes for monitoring and evaluating the overall effectiveness of its FRMP and the effectiveness of fatigue-related mitigation strategies the railroad uses under § 270.407; and
(ii) A railroad's procedures for reviewing the FRMP as part of the annual internal assessment of its SSP under § 270.303 and for updating the FRMP plan under the process for amending its SSP plan under § 270.201(c).
(d)
(1) A description of the roles and responsibilities of each position or job function with significant responsibility for implementing the FRMP, including those held by employees, contractors who provide significant FRMP-related services, and other entities or persons that provide significant FRMP services;
(2) A timeline describing when certain milestones that must be met to implement the FRMP fully will be achieved. Implementation milestones shall be specific and measurable;
(3) A description of how a railroad may make significant changes to the FRMP plan under the process for amending its SSP plan in § 270.201(c); and
(4) The procedures for consultation with directly affected employees on any subsequent substantive amendments to the railroad's FRMP plan. The requirements of this section do not apply to non-substantive amendments (
(e)
(1) A railroad shall follow the procedures in § 270.201(c) to amend its SSP plan.
(2) An FRMP plan is not considered a safety critical amendment for the purposes of § 270.201(c)(ii).
(3) If a railroad was not required to submit an SSP plan initially, but is required to do so at a later date, the railroad shall either include an FRMP plan as part of its SSP plan submission under § 270.201(a), or submit its FRMP plan in accordance with the procedures for amending its SSP plan under § 270.201(c) no later than August 19, 2021, whichever is later.
49 U.S.C. 20103, 20106-20107, 20118-20119, 20156, 21301, 21304, 21311; 28 U.S.C. 2461, note; and 49 CFR 1.89.
(a)
(1) A risk-based hazard management program, as described in § 271.103;
(2) A safety performance evaluation component, as described in § 271.105;
(3) A safety outreach component, as described in § 271.107;
(4) A technology analysis and technology implementation plan, as described in § 271.109;
(5) RRP implementation and support training, as described in § 271.111;
(6) Involvement of railroad employees in the establishment and implementation of an RRP, as described in § 271.113; and
(7) An FRMP as described in § 271.607.
A railroad shall adopt and implement its RRP through a written RRP plan containing the elements described in this subpart and in § 271.609. A railroad's RRP plan shall be approved by FRA according to the requirements contained in subpart D of this part.
As used in this subpart—
(1) Identifies and evaluates the fatigue-related railroad safety hazards on its system(s) and;
(2) Determines the degree of risk associated with each of those hazards.
(1) A person subject to 49 U.S.C. 21103, 21104, or 21105;
(2) Another person involved in railroad operations not subject to 49 U.S.C. 21103, 21104, or 21105;
(3) A person who inspects, installs, repairs or maintains track, roadbed, signal and communication systems, and electric traction systems including a roadway worker or railroad bridge worker;
(4) A hazmat employee defined under 49 U.S.C. 5102(3);
(5) A person who inspects, repairs, or maintains locomotives, passenger cars, or freight cars; or
(6) An employee of any person who utilizes or performs significant railroad safety-related services, as described in § 271.205(a)(3), if that employee performs a function identified in paragraphs (1) through (5) of this definition.
(a)
(b)
(1) Design its FRMP to reduce the fatigue its safety-related railroad employees experience and to reduce the risk of railroad accidents, incidents, injuries, and fatalities where the fatigue of any of these employees is a contributing factor;
(2) Develop its FRMP by conducting a system-wide fatigue-risk analysis that accounts for the varying circumstances of its operations on different parts of its system; and
(3) Employ in its FRMP the fatigue risk mitigation strategies the railroad identifies as appropriate to address those varying circumstances.
(a) Each railroad subject to this part shall:
(1) Establish and implement an FRMP as part of its RRP; and
(2) Establish an FRA-approved FRMP plan as a component of a railroad's FRA-approved RRP plan and then update the FRMP plan as necessary as part of the annual internal assessment of its RRP under § 271.401.
(b) A railroad's FRMP plan must explain the railroad's method of analysis of fatigue risks and the railroad's process(es) for implementing its FRMP.
(c)(1) A railroad shall submit an FRMP plan to FRA for approval no later than either the applicable timeline in § 271.301(b) for filing its RRP plan or [date six months after publication of the final rule in the
(2) A railroad shall submit updates to its FRMP plan under the process for amending its RRP plan in § 271.303.
(d) FRA shall review and approve or disapprove a railroad's FRMP plan under the process for reviewing RRP plans in § 271.301(d) and updates to the railroad's FRMP plan under the process for reviewing amendments to an RRP plan in § 271.303(c).
(a)
(b)
(1) General health and medical conditions that can affect the fatigue levels among the population of safety-related railroad employees;
(2) Scheduling issues that can affect the opportunities of safety-related railroad employees to obtain sufficient quality and quantity of sleep; and
(3) Characteristics of each job category safety-related railroad employees work that can affect fatigue levels and risk for fatigue of those employees.
(c)
(1)
(i) Providing opportunities for identification, diagnosis, and treatment of any medical condition that may affect alertness or fatigue, including sleep disorders;
(ii) Identifying methods to minimize accidents and incidents that occur as a result of working at times when scientific and medical research have shown increased fatigue disrupts employees' circadian rhythms;
(iii) Developing and implementing alertness strategies, such as policies on napping, to address acute drowsiness and fatigue while an employee is on duty;
(iv) Increasing the number of consecutive hours of off-duty rest, during which an employee receives no communication from the employing railroad or its managers, supervisors, officers, or agents; and
(v) Avoiding abrupt changes in rest cycles for employees.
(2)
(i) Minimizing the effects on employee fatigue of an employee's short-term or sustained response to emergency situations, such as derailments and natural disasters, or engagement in other intensive working conditions;
(ii) Developing and implementing scheduling practices for employees, including innovative scheduling practices, on-duty call practices, work and rest cycles, increased consecutive days off for employees, changes in shift patterns, appropriate scheduling practices for varying types of work, and other aspects of employee scheduling to reduce employee fatigue and cumulative sleep loss; and
(iii) Providing opportunities to obtain restful sleep at lodging facilities, including employee sleeping quarters provided by the railroad carrier.
(3)
(d)
(1) The evaluation shall include, at a minimum:
(i) Periodic monitoring of the railroad's operational environment to detect changes that may generate new hazards;
(ii) Analysis of the risks associated with any identified hazards; and
(iii) Periodic safety assessments to determine the need for changes to its mitigation strategies.
(2) A railroad shall evaluate newly-identified hazards, and hazards associated with ineffective mitigation strategies, through processes for analyzing fatigue risks described in the railroad's FRMP plan.
(3) Any necessary changes not addressed prior to a railroad's annual internal assessment must be included in the internal assessment improvement plans required under § 271.403.
(a)
(b)
(c)
(i) The scope of the analysis, which is the covered population of safety-related railroad employees;
(ii) The processes a railroad will use to identify fatigue-related railroad safety hazards on its system and determine the degree of risk associated with each fatigue-related hazard identified;
(iii) The processes a railroad will use to compare and prioritize identified fatigue-related risks for mitigation purposes; and
(iv) The information sources a railroad will use to support ongoing identification of fatigue-related railroad safety hazards and determine the degree of risk associated with those hazards.
(2)
(i) Identifying and selecting fatigue risk mitigation strategies; and
(ii) Monitoring identified fatigue-related railroad safety hazards.
(3)
(i) A railroad's processes for monitoring and evaluating the overall effectiveness of its FRMP and the effectiveness of fatigue-related mitigation strategies the railroad uses under § 271.607; and
(ii) A railroad's procedures for reviewing the FRMP as part of the annual assessment of its RRP under § 271.401 and for updating the FRMP plan under the process for amending its RRP plan under § 271.303.
(d)
(1) A description of the roles and responsibilities of each position or job function with significant responsibility for implementing the FRMP, including those held by employees, contractors who provide significant FRMP-related services, and other entities or persons that provide significant FRMP services;
(2) A timeline describing when certain milestones that must be met to implement the FRMP fully will be achieved. Implementation milestones shall be specific and measurable;
(3) A description of how the railroad may make significant changes to the FRMP plan under the process for amending its RRP plan in § 271.303; and
(4) The procedures for consultation with directly affected employees on any subsequent substantive amendments to the railroad's FRMP plan. The requirements of this section do not apply to non-substantive amendments (
(e)
(1) A railroad shall follow the procedures in § 271.303 to amend its RRP plan.
(2) If a railroad was not required to submit an RRP plan initially, but is required to do so at a later date, the railroad shall either include an FRMP plan as part of its RRP plan submission under § 271.301 or submit its FRMP plan in accordance with the procedures for amending its RRP plan under § 271.303 no later than August 19, 2021, whichever is later.
Agricultural Marketing Service, USDA.
Notice of meeting.
Pursuant to the Federal Advisory Committee Act (FACA), the Agricultural Marketing Service (AMS) is announcing a meeting of the Plant Variety Protection Board (Board). The meeting is being held to discuss a variety of topics including, but not limited to, regulation updates, subcommittee activities, and program activities. The meeting is open to the public. This notice sets forth the schedule and location for the meeting.
Wednesday, March 31, 2021; 2 p.m. to 4 p.m.
The meeting will be conducted through teleconference.
Jeffery Haynes, Commissioner, Plant Variety Protection Office, USDA, AMS, Science and Technology Programs; Telephone: (202) 720-1066; or Email:
Pursuant to the provisions of section 10(a) of the FACA (5 U.S.C., Appendix 2), this notice informs the public that the Plant Variety Protection Office (PVPO) is sponsoring a meeting of the Board on March 31, 2021. The Plant Variety Protection Act (PVPA) (7 U.S.C. 2321
Determinations for reasonable accommodation will be made on a case-by-case basis. Minutes of the meeting will be available for public review 30 days following the meeting on the internet at
Rural Housing Service.
Proposed collection; comments requested.
In accordance with the Paperwork Reduction Act of 1995, this notice announces the Rural Housing Service's intention to request an extension for a currently approved information collection in support of the program of the Agency's use of Supervised Bank Accounts (SBA).
Comments on this Notice must be received by February 22, 2021 to be assured of consideration.
Barbara Chism, Finance and Loan Analyst, Multi-Family Housing Asset Management Division, Policy and Budget Branch, STOP 0782-Room 1263S, U.S. Department of Agriculture, 1400 Independence Avenue SW, Washington, DC 20250-0782. Telephone: (202) 690-1436.
The OMB regulation (5 CFR 1320) implementing provisions of the Paperwork Reduction Act of 1995 (Pub. L. 104-13) requires that interested members of the public and affected agencies have an opportunity to comment on information collection and recordkeeping activities (see 5 CFR 1320.8(d)). This notice identifies an existing information collection that the Agency is submitting to OMB for extension. Comments are invited on: (a) 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; (b) 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; (c) ways to enhance the quality, utility and clarity of the information to be collected; and (d) ways to minimize the burden of the collection of information on those who are to respond, including the use of appropriate automated, electronic, mechanical, or other
Copies of this information collection can be obtained from Lynn Gilbert, Rural Development Innovation Center—Regulations Management Division, at (202) 690-2682.
All responses to this notice will be summarized and included in the request for OMB approval. All comments will also become a matter of public record.
U.S. Census Bureau, Commerce.
Notice of information collection, request for comment.
The Department of Commerce, in accordance with the Paperwork Reduction Act (PRA) of 1995, invites the general public and other Federal agencies to comment on proposed, and continuing information collections, which helps us assess the impact of our information collection requirements and minimize the public's reporting burden. The purpose of this notice is to allow for 60 days of public comment on the proposed extension of the School District Review Program prior to the submission of the information collection request (ICR) to OMB for approval.
To ensure consideration, comments regarding this proposed information collection must be received on or before February 22, 2021.
Interested persons are invited to submit written comments by email to
Requests for additional information or specific questions related to collection activities should be directed to Robin A. Pennington, Decennial Census Management Division, Program Management Office, by phone 301-763-8132 or by email
The School District Review Program (SDRP) is one of many voluntary geographic partnership programs. The SDRP collects school district information and boundaries to update the U.S. Census Bureau's geographic database of addresses, streets, and boundaries. The Census Bureau uses its geographic database to tie demographic data from surveys and the decennial census to locations and areas, such as cities, school districts, and counties. To tabulate statistics by localities, the Census Bureau must have accurate addresses and boundaries.
While the geographic programs differ in requirements, timeframe, and participants, SDRP and the other geographic programs all follow the same basic process:
• The Census Bureau invites eligible participants to the program. For SDRP, the sponsor, the National Center for Education Statistics invites the state departments of education/state Title I
• If they elect to participate in the program, participants receive a copy of the boundaries the Census Bureau has on file. SDRP participants receive free customized mapping software.
• Participants review the boundaries in the Census Bureau provided digital maps and update them if needed. For SDRP, participants reach out to contacts in their state to collect updates.
• Participants return their updates to the Census Bureau.
• The Census Bureau updates its geographic database with boundary updates from participants.
• The Census Bureau uses the newly updated boundaries to tabulate statistics.
The Census Bureau requests state officials to review and update the school district information the Census Bureau has on file, through the SDRP. The school district information obtained through this program will assist in forming the Census Bureau's estimates of the number of children age five through seventeen, in families and living in poverty, for each school district.
State officials will provide the Census Bureau with updates and corrections to the federal School District Local Education Agency (SDLEA) identification numbers, school district boundaries, school names, grade ranges, and levels for which each school district is financially responsible.
These Census Bureau estimates are the basis of the Title I allocation for each school district. The SDRP is of vital importance for each state's allocation under Title I of the Elementary and Secondary Education Act (ESEA) as amended by Every Student Succeeds Act of 2015, Public Law 114-95. The U.S. Department of Education uses these estimates to allocate more than $14 billion in Title I funding annually.
The National Center for Education Statistics (NCES) sponsors the SDRP. The NCES invites the state departments of education/Title I coordinators to designate a mapping coordinator for each state and the District of Columbia. The mapping coordinator collects updates from local school districts, state education officials, county planners, and state data centers, and ensures completion of submissions within the SDRP's timeframe. The respondents for the SDRP are the Title I coordinators and mapping coordinators from the fifty states and the District of Columbia.
The SDRP encompasses Type 1 and Type 2 school districts as defined by the NCES. Type 1 is a local school district that is not a component of a supervisory union. Type 2 is a local school district component of a supervisory union sharing a superintendent and administrative services with other local school districts.
The SDRP consists of two phases—the Annotation and Verification Phases. In the Annotation Phase, the Census Bureau provides mapping coordinators with materials containing the most current school district boundaries and information the Census Bureau has on file for their state. Mapping coordinators review the data and submit changes to the school district boundaries or associated information to the Census Bureau. The Census Bureau reviews and processes the information submitted by mapping coordinators, and the Census Bureau updates all verified changes into the Master Address File/Topologically Integrated Geographic Encoding and Referencing (MAF/TIGER) database. In the Verification Phase, mapping coordinators verify that the Census Bureau accurately and completely updated the MAF/TIGER database with updates submitted during the Annotation Phase.
In the Annotation Phase, mapping coordinators gather school district updates from school district superintendents and other state officials and use Census Bureau-provided materials to review and update school district boundaries, names, codes, and geographic relationships. The Census Bureau provides mapping coordinators with school district listings, spatial data in Esri shapefile format, blank submission logs, and Geographic Update Partnership Software (GUPS). The school district listings consist of school district inventories, school names, levels, grade ranges, and other data about school districts within their state. If the mapping coordinator has non-spatial updates (
• Annotation Phase begins for the SDRP—August/September of each year.
• Deadline to submit SDRP Annotation Phase to Census Bureau—last workday in December of each year.
In the Verification Phase, the Census Bureau sends mapping coordinators newly created listings and digital files, and mapping coordinators use the SDRP verification module in GUPS to review these files and verify that the Census Bureau correctly captured their submitted information. The mapping coordinator can tag the area of issue and send the information to the Census Bureau to make corrections if the Census Bureau did not incorporate their boundary changes or other updates correctly.
• Verification Phase begins and ends for the SDRP—March/April of each year.
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Comments are invited on: (a) Whether the proposed collection of information is necessary for the proper performance of the functions of the agency, including whether the information shall have practical utility; (b) the accuracy of the agency's estimate of the burden (including hours and cost) of the proposed collection of information; (c) ways to enhance the quality, utility, and clarity of the information to be collected; and (d) ways to minimize the burden of the collection of information on respondents, including through the use of automated collection techniques or other forms of information technology.
Comments that you submit in response to this notice are a matter of public record. Summarization of comments submitted in response to this notice will be included in our request to OMB to approve this ICR. 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 may 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.
The Department of Commerce will submit the following information collection request to the Office of Management and Budget (OMB) for review and clearance in accordance with the Paperwork Reduction Act of 1995, on or after the date of publication of this notice. We invite the general public and other Federal agencies to comment on proposed, and continuing information collections, which helps us assess the impact of our information collection requirements and minimize the public's reporting burden. Public comments were previously requested via the
• The New Jersey State Data Center used OnTheMap for Emergency Management to quickly learn the impact of hurricane Sandy with regards to identification of Federal Disaster Declaration Areas and its effects on communities (
• The state of Nevada has used the Job-to-Job Flows data product to understand the migration of its workforce that supports the hotel industry.
• The Philadelphia Center City District used LEHD data to understand the details of the area's workforce and economy in order to monitor the effectiveness of economic programs and policy initiatives.
Additional examples of how the LEHD data products and supporting dissemination tools have been used can be found at the LEHD website:
This information collection request may be viewed at
Written comments and recommendations for the proposed information collection should be submitted within 30 days of the publication of this notice on the following website
The Department of Commerce will submit the following information collection request to the Office of Management and Budget (OMB) for review and clearance in accordance with the Paperwork Reduction Act of 1995, on or after the date of publication of this notice. We invite the general public and other Federal agencies to comment on proposed, and continuing information collections, which helps us assess the impact of our information collection requirements and minimize the public's reporting burden. Public comments were previously requested via the
The notice requesting public comment was published in the
With respect to the CD-498 and CD-498A forms specifically, Ms. Schnall recommended that the Department of Commerce update information on Form CD-498A regarding the processing of sexual orientation discrimination complaints and ensure that Forms CD-498 and 498A include comprehensive lists of the protected bases under federal employment discrimination laws. Ms. Schnall also suggested that the Department of Commerce add the legal citation for 42 U.S.C. 2000ff and “genetic information” (or “genetic information (such as family medical history”) to the Privacy Act Statement. Ms. Schnall also suggested that the Department of Commerce (3) ensure that the disclosure provisions applicable to Forms CD-498 and CD-498A are consistent with the confidentiality requirements of the Rehabilitation Act of 1973, as amended (Rehabilitation Act) and Title II of the Genetic Information Nondiscrimination Act (GINA). Ms. Schnall further recommended that the Department of Commerce provide options for agency applicants and employees to submit employment discrimination complaint forms and related information safely and expeditiously during the pandemic.
In response to the public comment received, the Department of Commerce has updated information on Form CD-498A regarding the processing of sexual orientation discrimination complaints and has included comprehensive lists of the protected bases under federal employment discrimination laws to both forms CD-498 and CD-498A. Additionally, the Department of Commerce has added the legal citation for 42 U.S.C. 2000ff and “genetic information” (or “genetic information (such as family medical history”) to the Privacy Act Statement in form CD-498A. Further, the Department of Commerce has added language to help ensure that the disclosure provisions applicable to Forms CD-498 and CD-498A are consistent with the confidentiality requirements of the Rehabilitation Act of 1973, as amended (Rehabilitation Act) and Title II of the Genetic Information Nondiscrimination Act (GINA). Last, with respect to the recommendation regarding the Department of Commerce providing options for agency applicants and employees to submit employment discrimination complaint forms and related information safely and expeditiously during the pandemic, the Department of Commerce currently has an effective procedure in place which addresses this concern (
This information collection request may be viewed at
Written comments and recommendations for the proposed information collection should be submitted within 30 days of the publication of this notice on the following website
Pursuant to its authority under the Foreign-Trade Zones Act of June 18, 1934, as amended (19 U.S.C. 81a-81u), the Foreign-Trade Zones Board (the Board) adopts the following Order:
The application to reorganize FTZ 208 under the ASF is approved, subject to the FTZ Act and the Board's regulations, including Section 400.13, to the Board's standard 2,000-acre activation limit for the zone, and to an ASF sunset provision for magnet sites that would terminate authority for Site 1 if not activated within five years from the month of approval.
On November 2, 2020, the Executive Secretary of the Foreign-Trade Zones (FTZ) Board docketed an application submitted by the State of New Jersey Department of State, grantee of FTZ 44, requesting subzone status subject to the existing activation limit of FTZ 44, on behalf of MANE USA, in Wayne and Parsippany, New Jersey.
The application was processed in accordance with the FTZ Act and Regulations, including notice in the
Enforcement and Compliance, International Trade Administration, Department of Commerce.
The Department of Commerce (Commerce) preliminarily determines that sales of polyethylene retail carrier bags (PRCBs) were not made at less than normal value (NV) during the August 1, 2018 through July 31, 2019, period of review (POR). Interested parties are invited to comment on these preliminary results.
Applicable December 22, 2020.
Kyle Clahane, AD/CVD Operations, Office III, Enforcement and Compliance, International Trade Administration, U.S. Department of Commerce, 1401 Constitution Avenue NW, Washington, DC 20230; telephone: (202) 482-5449.
On October 7, 2019, Commerce published a notice initiating an administrative review of the antidumping duty (AD) order on PRCBs from Malaysia, covering one company: Euro SME.
On April 24, 2020, Commerce tolled all deadlines in administrative reviews by 50 days.
For a complete description of the events that followed the initiation of this administrative review,
The merchandise covered by this order is PRCBs from Malaysia, which also may be referred to as t-shirt sacks, merchandise bags, grocery bags, or checkout bags. Imports of merchandise included within the scope of this antidumping duty order are currently classifiable under statistical category 3923.21.0085 of the Harmonized Tariff Schedule of the United States (HTSUS). This subheading may also cover products that are outside the scope of this antidumping duty order. Although the HTSUS subheading is provided for convenience and customs purposes, the written description of the scope of this antidumping duty order is dispositive. For a full description of the scope of the order,
Commerce is conducting this administrative review in accordance with section 751(a) of the Tariff Act of 1930, as amended (the Act). Export price was calculated in accordance with section 772 of the Act. Normal value was calculated in accordance with section 773 of the Act.
For a full description of the methodology underlying our conclusions,
As a result of this review, we preliminarily determine the following weighted-average dumping margin for the period August 1, 2018 through July 31, 2019:
Commerce intends to disclose the calculations performed in connection with these preliminary results to interested parties within five days after the date of publication of this notice.
Pursuant to 19 CFR 351.310(c), interested parties who wish to request a hearing must submit a written request to the Assistant Secretary for Enforcement and Compliance, filed electronically via ACCESS. An electronically filed document must be received successfully in its entirety by Commerce's electronic records system, ACCESS, by 5:00 p.m. Eastern Time within 30 days after the date of publication of this notice.
Unless otherwise extended, Commerce intends to issue the final results of this administrative review, which will include the results of its analysis of issues raised in any briefs, not later than 120 days after the date of publication of these preliminary results of review, pursuant to section 751(a)(3)(A) of the Act.
Upon completion of the administrative review, Commerce shall determine, and U.S. Customs and Border Protection (CBP) shall assess, antidumping duties on all appropriate entries covered by this review.
For any individually examined respondent whose weighted-average dumping margin is above
For entries of subject merchandise during the POR for which a respondent did not know that its merchandise was destined for the United States, we intend to instruct CBP to liquidate such entries at the all-others rate if there is no rate for the intermediate company (or companies) involved in the transaction.
We intend to issue liquidation instructions to CBP 15 days after publication of the final results of this review.
The following deposit requirements will be effective for all shipments of the 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 for the companies listed above, will be the rate established in the final results of the review (except, if the rate is zero or
These deposit requirements, when imposed, shall remain in effect until further notice.
This notice also serves as a preliminary reminder to importers of their responsibility under 19 CFR 351.402(f) to file a certificate regarding the reimbursement of antidumping duties prior to liquidation of the relevant entries during this review period. Failure to comply with this requirement could result in Commerce's presumption that reimbursement of antidumping duties occurred and the subsequent assessment of double antidumping duties.
We are issuing and publishing these results in accordance with sections 751(a)(1) and 777(i)(1) of the Act, and 19 CFR 351.213(h)(1).
National Oceanic & Atmospheric Administration (NOAA), Commerce.
Notice of information collection, request for comment.
The Department of Commerce, in accordance with the Paperwork Reduction Act of 1995 (PRA), invites the general public and other Federal agencies to comment on proposed, and continuing information collections, which helps us assess the impact of our information collection requirements and minimize the public's reporting burden. The purpose of this notice is to allow for 60 days of public comment preceding submission of the collection to OMB.
To ensure consideration, comments regarding this proposed information collection must be received on or before February 22, 2021.
Interested persons are invited to submit written comments to Adrienne Thomas, NOAA PRA Officer, at
Requests for additional information or specific questions related to collection activities should be directed to Matt Dunlap, Fishery Policy Analyst, West Coast Regional Office, 7600 Sand Point Way NE, Seattle, WA 98115, (206) 526-6119, or
This submission is a renewal of an existing collection. In January 2011, the National Oceanic and Atmospheric Administration's (NOAA) National Marine Fisheries Service (NMFS) implemented a trawl rationalization program, a catch share program, for the Pacific coast groundfish fishery's trawl fleet. The program was developed through Amendment 20 to the Groundfish Fishery Management Plan (FMP), under the authority of the Magnuson-Stevens Fishery Conservation and Management Act (16 U.S.C. 1801
This collection utilizes both electronic and paper forms, depending on the specific item. Methods of submittal include email of electronic forms, and mail and facsimile transmission of paper forms. Additionally, this collection utilizes interviews for some information collection and phone calls for transmission of other information.
We are soliciting public comments to permit the Department/Bureau to: (a) Evaluate whether the proposed information collection is necessary for the proper functions of the Department, including whether the information will have practical utility; (b) Evaluate the accuracy of our estimate of the time and cost burden for this proposed collection, including the validity of the methodology and assumptions used; (c) Evaluate ways to enhance the quality, utility, and clarity of the information to be collected; and (d) Minimize the reporting burden on those who are to respond, including the use of automated collection techniques or other forms of information technology.
Comments that you submit in response to this notice are a matter of public record. We will include or summarize each comment in our request
The Department of Commerce will submit the following information collection request to the Office of Management and Budget (OMB) for review and clearance in accordance with the Paperwork Reduction Act of 1995, on or after the date of publication of this notice. We invite the general public and other Federal agencies to comment on proposed, and continuing information collections, which helps us assess the impact of our information collection requirements and minimize the public's reporting burden. Public comments were previously requested via the
The License Limitation Program (LLP) restricts access to the commercial groundfish, crab, and scallop fisheries in the exclusive economic zone off Alaska, except for certain areas where alternative programs exist. The intended effect of the LLP is to limit the number of participants and reduce fishing capacity in fisheries off Alaska. More information on the LLP can be found on the NMFS Alaska Region website and at 50 CFR 692, 679.4(g) and (k), and 679.7(i).
An LLP license is required for vessels participating in directed fishing for LLP groundfish species in the Bering Sea and Aleutian Islands (BSAI) or Gulf of Alaska (GOA), or fishing in any BSAI LLP crab fisheries. An LLP license is also required for any vessel deployed in scallop fisheries in Federal waters off Alaska (except for some diving operations).
Vessels participating in directed fishing for LLP groundfish species in the GOA or BSAI, or fishing in any BSAI LLP crab fisheries, must be named on a valid copy of the LLP license that is on board the vessel, with some exceptions. An LLP groundfish or crab license authorizes the license holder to deploy the vessel in fisheries in accordance with the specific area and species endorsements, the vessel and gear designations, the maximum length overall (MLOA) specified on the license, and any exemption from the MLOA specified on the license.
An LLP scallop license authorizes the person named on the license to catch and retain scallops in compliance with State of Alaska regulations using a vessel that does not exceed the MLOA specified on the license and the gear designation specified on the license. Unlike the LLP groundfish license, the scallop license is not vessel specific. A valid copy of the LLP scallop license must be on board the vessel.
The LLP originally collected basic information so that NMFS could determine which owners of vessels were issued LLP licenses. To receive an LLP license, an eligible applicant needed to apply during the application periods established when the program was implemented. As the application periods and selection process for the LLP licenses have ended, an LLP license may now only be obtained through transfer.
This information collection collects information necessary for transfer of LLP licenses for groundfish, crabs, and scallops. This collection contains the two applications used for those transfers and the transfer appeals process.
An LLP license holder uses a transfer application to transfer an LLP license to a person who meets the eligibility requirements. The transfer applications collect information on the transferor, the transferee, and the LLP license to be transferred. The groundfish and crab transfer application also collects information on the rockfish quota share to be transferred, the vessel currently named on the LLP license, the vessel to be named on the LLP license, and ownership interest and transaction data.
This information collection request may be viewed at
Written comments and recommendations for the proposed information collection should be submitted within 30 days of the publication of this notice on the following website
National Oceanic & Atmospheric Administration (NOAA), Commerce.
Notice of Information Collection, request for comment.
The Department of Commerce, in accordance with the Paperwork Reduction Act of 1995 (PRA), invites the general public and other Federal agencies to comment on proposed, and continuing information collections, which helps us assess the impact of our information collection requirements and minimize the public's reporting burden. The purpose of this notice is to allow for 60 days of public comment preceding submission of the collection to OMB.
To ensure consideration, comments regarding this proposed information collection must be received on or before February 22, 2021.
Interested persons are invited to submit written comments to Adrienne Thomas, NOAA PRA Officer, at
Requests for additional information or copies of the information collection instrument and instructions should be directed to James StCyr, Greater Atlantic Regional Office, Analysis & Program Support Division, Data Processing & Quality Branch, 55 Great Republic Dr, Gloucester, MA 01930, (978) 281-9369 or
This request is for the revision of a current information collection. Under the provisions of the Magnuson-Stevens Fishery Conservation and Management Act (16 U.S.C. 1801
Information is collected through an Interactive Voice Response (IVR) system.
We are soliciting public comments to permit the Department/Bureau to: (a) Evaluate whether the proposed information collection is necessary for the proper functions of the Department, including whether the information will have practical utility; (b) Evaluate the accuracy of our estimate of the time and cost burden for this proposed collection, including the validity of the methodology and assumptions used; (c) Evaluate ways to enhance the quality, utility, and clarity of the information to be collected; and (d) Minimize the reporting burden on those who are to respond, including the use of automated collection techniques or other forms of information technology.
Comments that you submit in response to this notice are a matter of public record. We will include or summarize each comment in our request to OMB to approve this ICR. 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 may 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.
National Marine Fisheries Service (NMFS), National Oceanic and Atmospheric Administration (NOAA), Department of Commerce.
Notice; availability of a proposed evaluation and pending determination and permit application for public comment.
Notice is hereby given that a proposed evaluation and pending determination (PEPD) is available for public comment on a hatchery and genetic management plan (HGMP) for Skykomish River steelhead submitted under limit 6 of the Endangered Species Act (ESA) 4(d) Rule. NMFS is also making an ESA section 10(a)(1)(A) permit application available for public comment. The permit application is for a trap and haul operation at Sunset Falls, also on the Skykomish River in Washington State.
Comments must be received at the appropriate address (see
Written comments on the PEPD and/or permit application should be addressed to Emi Melton; NMFS, West Coast Regional Office; 1201 NE Lloyd Blvd., Suite 1100, Portland, OR 97232. Comments may be submitted by email. The mailbox address for providing email comments is:
The documents are available on the internet at:
Emi Melton at (503) 736-4739 or by email at
The Tulalip Tribes and Washington Department of Fish and Wildlife (collectively the co-managers) have submitted an HGMP to NMFS pursuant to limit 6 of the ESA 4(d) Rule for a summer steelhead hatchery program in the Skykomish River basin. The hatchery program is intended to contribute to fulfilling Federal tribal trust responsibilities and treaty rights guaranteed through treaties and affirmed in
Washington Department of Fish and Wildlife has also submitted an ESA section 10(a)(1)(A) permit application for a trap and haul program in the Skykomish River basin. The trap and haul program traps various species of salmon, steelhead, and trout, and hauls them above Sunset Falls to provide better habitat for these species.
16 U.S.C. 1531
National Marine Fisheries Service (NMFS), National Oceanic and Atmospheric Administration (NOAA), Commerce.
Notice; issuance of Incidental Harassment Authorization (IHA).
NMFS has received a request from Jim Erickson for the re-issuance of a previously issued incidental harassment authorization with the only change being effective dates. The initial IHA authorized take of seven species of marine mammals, by Level A and Level B harassment, incidental to construction associated with the Erickson Residence Marine Access Project in Juneau, Alaska. The project has been delayed and none of the work covered in the initial IHA has been conducted. The initial IHA was effective from January 1, 2020 through December 31, 2020. Mr. Erickson has requested re-issuance with new effective dates of January 1, 2021 through December 31, 2021. The scope of the activities and anticipated effects remain the same, authorized take numbers are not changed, and the required mitigation, monitoring, and reporting remains the same as included in the initial IHA. NMFS is, therefore, issuing a second identical IHA to cover the incidental take analyzed and authorized in the initial IHA.
This authorization is effective from January 1, 2021 through December 31, 2021.
An electronic copy of the final 2020 IHA previously issued to Mr. Erickson, Mr. Erickson's application, and the
Amy Fowler, Office of Protected Resources, NMFS, (301) 427-8401.
Sections 101(a)(5)(A) and (D) of the Marine Mammal Protection Act (MMPA; 16 U.S.C. 1361
An authorization for incidental takings shall be granted if NMFS finds that the taking will have a negligible impact on the species or stock(s), will not have an unmitigable adverse impact on the availability of the species or stock(s) for subsistence uses (where relevant), and if the permissible methods of taking and requirements pertaining to the mitigation, monitoring and reporting of such takings are set forth.
NMFS has defined “negligible impact” in 50 CFR 216.103 as an impact resulting from the specified activity that cannot be reasonably expected to, and is not reasonably likely to, adversely affect the species or stock through effects on annual rates of recruitment or survival.
The MMPA states that the term “take” means to harass, hunt, capture, kill or attempt to harass, hunt, capture, or kill any marine mammal.
Except with respect to certain activities not pertinent here, 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).
On November 27, 2019, NMFS published final notice of our issuance of an IHA authorizing take of marine mammals incidental to the Erickson Residence Marine Access Project (84 FR 65360). The effective dates of that IHA
The planned activities (including mitigation, monitoring, and reporting), authorized incidental take, and anticipated impacts on the affected stocks are the same as those analyzed and authorized through the previously issued IHA.
Mr. Erickson plans to replace his private moorage facility in Auke Bay in Juneau, Alaska to provide a safer, more accessible and secure dock. Six 12- to 16-inch (in) timber piles will be removed using a vibratory hammer, and six steel pipe piles (four 12.75-in steel pipe piles and two 20-in steel pipe piles) will be installed using vibratory and impact hammers over the course of up to eight days. Of those eight days, impact pile driving may occur on up to four days and vibratory pile removal and installation may occur on up to six days. Drilling may be required to install the larger diameter steel piles. If required, drilling may occur on up to two days. Vibratory pile removal and installation, impact pile installation, and drilling would introduce underwater sounds at levels that may result in take, by Level A and Level B harassment, of marine mammals in Auke Bay. The location, timing, and nature of the activities, including the types of equipment planned for use, are identical to those described in the initial IHA. The mitigation and monitoring are also as prescribed in the initial IHA.
Species that are expected to be taken by the planned activity include harbor porpoise (
We refer to the documents related to the previously issued IHA, which include the
Mr. Erickson will conduct activities as analyzed in the initial 2020 IHA. As described above, the number of authorized takes of the same species and stocks of marine mammals are identical to the numbers that were found to meet the negligible impact and small numbers standards and authorized under the initial IHA and no new information has emerged that would change those findings. The re-issued 2021 IHA includes identical required mitigation, monitoring, and reporting measures as the initial IHA, and there is no new information suggesting that our analysis or findings should change.
Based on the information contained here and in the referenced documents, NMFS has determined the following: (1) The required mitigation measures will effect the least practicable impact on marine mammal species or stocks and their habitat; (2) the authorized takes will have a negligible impact on the affected marine mammal species or stocks; (3) the authorized takes represent small numbers of marine mammals relative to the affected stock abundances; and (4) Mr. Erickson's activities will not have an unmitigable adverse impact on taking for subsistence purposes as no relevant subsistence uses of marine mammals are implicated by this action.
To comply with the National Environmental Policy Act of 1969 (NEPA; 42 U.S.C. 4321
Accordingly, NMFS has determined that the issuance of the IHA qualifies to be categorically excluded from further NEPA review. This action is consistent with categories of activities identified in CE B4 of the Companion Manual for NOAA Administrative Order 216-6A, which do not individually or cumulatively have the potential for significant impacts on the quality of the human environment and for which we have not identified any extraordinary circumstances that would preclude this categorical exclusion.
Section 7(a)(2) of the Endangered Species Act of 1973 (ESA: 16 U.S.C. 1531
The effects of this proposed Federal action were adequately analyzed in NMFS' Biological Opinion for the Erickson Residence Marine Access Project, dated November 15, 2019, which concluded that the take NMFS proposed to authorize through this IHA would not jeopardize the continued existence of any endangered or threatened species or destroy or adversely modify any designated critical habitat.
NMFS has issued an IHA to Jim Erickson for in-water construction activities associated with the specified activity from January 1, 2021 through December 31, 2021. All previously described mitigation, monitoring, and reporting requirements from the initial 2020 IHA are incorporated.
The Department of Commerce will submit the following information collection request to the Office of Management and Budget (OMB) for review and clearance in accordance with the Paperwork Reduction Act of 1995, on or after the date of publication of this notice. We invite the general public and other Federal agencies to comment on proposed, and continuing information collections, which helps us assess the impact of our information collection requirements and minimize the public's reporting burden. Public comments were previously requested via the
This information collection request may be viewed at
Written comments and recommendations for the proposed information collection should be submitted within 30 days of the publication of this notice on the following website
National Marine Fisheries Service (NMFS), National Oceanic and Atmospheric Administration (NOAA), Commerce.
Notice; issuance of permit.
Notice is hereby given that NMFS has issued an Incidental Take Permit (ITP) (No. 23861) to Midwest Biodiversity Institute (MBI), pursuant to the Endangered Species Act (ESA) of 1973, as amended, for the incidental take of shortnose sturgeon (
The incidental take permit, final environmental assessment, and other related documents are available on the NMFS Office of Protected Resources website at
Celeste Stout, phone: (301) 427-8436 or email:
Section 9 of the ESA and Federal regulations prohibit the `taking' of a species listed as endangered or threatened. The ESA defines “take” to mean harass, harm, pursue, hunt, shoot, wound, kill, trap, capture, or collect, or to attempt to engage in any such conduct. NMFS may issue permits, under limited circumstances to take listed species incidental to, and not the purpose of, otherwise lawful activities. Section 10(a)(1)(B) of the ESA provides for authorizing incidental take of listed species. NMFS regulations governing permits for threatened and endangered species are promulgated at 50 CFR 222.307.
NMFS received a permit application from MBI on January 31, 2020. Based on our initial review of the application and conservation plan, we requested further information and clarification. On March 30, 2020, MBI submitted a revised and complete application for the take of ESA-listed shortnose sturgeon, Atlantic sturgeon and Atlantic salmon due to the sampling of non-ESA listed fish in the Lower Kennebec River. MBI proposes to continue an 18 yearlong (2002-19) systematic assessment of the fish assemblages at seven sites in an approximate 17.5 mile (28.2 km) reach of the Lower Kennebec River and three sites in a 6 mile (9.7 km) reach of the Sebasticook River. MBI will conduct boat electrofishing where electric current is generated by a Smith-Root Generator Powered Pulsator and transmitted into the water by an electrode array suspended from the bow of 16-18 foot long (25-29 km) jon boats or a 16 foot long inflatable Wing raft. NMFS determined that the application contained sufficient information for review and consideration under section 10(a)(1)(B) of the ESA. NMFS then provided an opportunity for public review of MBI's application and Conservation Plan. On April 17, 2020, NMFS published a notice of receipt (NOR) of the MBI application in the
Section 10 of the ESA specifies that no permit may be issued unless an applicant submits an adequate conservation plan. The conservation plan prepared by MBI describes measures designed to minimize and mitigate the impacts of any incidental take of ESA-listed shortnose sturgeon, Atlantic sturgeon and Atlantic salmon. To avoid and minimize take of ESA listed species MBI is required to implement the following minimization measures: (a) Conduct sampling between mid-September and mid-October to minimize any encounters with early life stage or juvenile fish. (b) MBI will request any recent acoustic detections of ESA listed species in the study area and take steps to avoid any congregations of listed species. (c) Only trained and qualified MBI crew leaders and either MBI or Maine Department of Marine Resources (DMR) agency technicians will be allowed to carry out the sampling activities. The MBI crew leader will review the ESA listed species minimization and avoidance procedures with the sampling crew at the beginning of each sampling day. In addition Maine DMR procedures (Bruchs et al. 2016) for electrofishing will be included in the training and instructions. (d) Sampling and the operation of the electrofishing gear will be done in a manner that minimizes the potential for injury to the listed species. The pulse frequency will be reduced to 30-60Hz when sampling in areas of prior interaction with ESA listed species to minimize the risk of injury. (e) Electric current and sampling activity will cease upon an encounter where a listed species is observed to be affected by the electric field. Affected sturgeon, if immobilized and/or in apparent distress, may be netted or otherwise handled in order to ascertain any injury and to revive if necessary, but the individual will not be removed from the water. Otherwise, affected fish that leave the electric field under their own power and appear to be uninjured will not be pursued and netted. In such cases, the species identification and estimation of length will be made visually. (f) Sampling will not be conducted when ambient water temperature is >22 °C per Maine DMR specifications (Bruchs et al. 2016). Temperature will be routinely measured at the start of each electrofishing site, but will be more frequently monitored (every 2 hours) when temperatures are between 20-22 °C. (g) When there is any interaction with a listed species all sampling activities will cease and the electric current will be shut off for a period of 5 minutes and/or until the individual fish are released and determined to have departed the area. Notation will be made about the physical condition of the individual in terms of the reaction to the electric field and if it was able to leave the area under its own power. Photographs will be taken of each interaction to document occurrence and any evidence of injury.
At present, the project is funded by MBI research and development funds, but MBI continues to seek external funding. This project has been ongoing for 18 years and is one of the longest running biological monitoring projects in New England and the only sustained effort that focuses on large river fish assemblages.
NMFS authorizes the following non-lethal incidental takes:
• Four (adult/subadult) Gulf of Maine & New York Bight DPS Atlantic sturgeon;
• Four (adult/subadult) Shortnose sturgeon; and
• Five (adult/subadult) Gulf of Maine DPS Atlantic salmon.
Issuing an ESA section 10(a)(1)(B) permit constitutes a Federal action requiring NMFS to comply with the National Environmental Policy Act (NEPA; 42 U.S.C. 4321
National Oceanic & Atmospheric Administration (NOAA), Commerce.
Notice; request for comment.
The Department of Commerce, in accordance with the Paperwork Reduction Act of 1995 (PRA), invites the general public and other Federal agencies to comment on proposed, and continuing information collections, which helps us assess the impact of our information collection requirements and minimize the public's reporting burden. The purpose of this notice is to allow for 60 days of public comment preceding submission of the collection to OMB.
To ensure consideration, comments regarding this proposed information collection must be received on or before February 22, 2021.
Interested persons are invited to submit written comments to Adrienne Thomas, NOAA PRA Officer, at
Requests for additional information or specific questions related to collection activities should be directed to OAR Weather Program Office at
This is a request for extension of a currently approved information collection. The National Oceanic & Atmospheric Administration's Office of Atmospheric Research (OAR)/Weather Program Office is conducting this information collection pursuant to Section 6(b) of Public Law 92-205. This law requires that all non-federal weather modification activities (
Respondents have a choice of either electronic or paper forms. Methods of submittal include email of electronic forms, mail and facsimile transmission of paper forms.
We are soliciting public comments to permit the Department/Bureau to: (a) Evaluate whether the proposed information collection is necessary for the proper functions of the Department, including whether the information will have practical utility; (b) Evaluate the accuracy of our estimate of the time and cost burden for this proposed collection, including the validity of the methodology and assumptions used; (c) Evaluate ways to enhance the quality, utility, and clarity of the information to be collected; and (d) Minimize the reporting burden on those who are to respond, including the use of automated collection techniques or other forms of information technology.
Comments that you submit in response to this notice are a matter of public record. We will include or summarize each comment in our request to OMB to approve this ICR. 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 may 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.
Defense Security Cooperation Agency, Department of Defense (DoD).
Arms sales notice.
The Department of Defense is publishing the unclassified text of an arms sales notification.
Karma Job at
This 36(b)(1) arms sales notification is published to fulfill the requirements of section 155 of Public Law 104-164 dated July 21, 1996. The following is a copy of a letter to the Speaker of the House of Representatives, Transmittal 20-86 with attached Policy Justification and Sensitivity of Technology.
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*As defined in Section 47(6) of the Arms Export Control Act.
The Republic of Korea has requested to buy two (2) MK 15 MOD 25 Phalanx Close-In Weapons System (CIWS) Block 1B Baseline 2 (IB2) systems; and four thousand (4,000) rounds, 20MM cartridge API linked. Also included are spare parts; other support equipment; ammunition; books and other publications; software; training; engineering technical assistance and other technical assistance; and other related elements of program and logistical support. The estimated total cost is $39 million.
This proposed sale will support the foreign policy goals and national security objectives of the United States by improving the security of a Major Non-NATO Ally that is a force for political stability and economic progress in the Pacific region.
The proposed sale will improve the Republic of Korea's capability to meet current and future threats. Korea will use the systems aboard its first KDX III Batch II Class ship to provide it with effective means of detecting and defending itself against incoming airborne threats. The Republic of Korea will have no difficulty absorbing this equipment into its armed forces.
The proposed sale of this equipment and support will not alter the basic military balance in the region.
The principal contractor will be Raytheon Missile and Defense, Louisville, KY. There are no known offset agreements proposed in connection with this potential sale.
Implementation of this proposed sale will not require the assignment of any additional U.S. Government or contractor representatives to the Republic of Korea. However, U.S. Government or contractor personnel in-country visits will be required on a temporary basis in conjunction with program technical oversight and support requirements, including multiple trips by U.S. Government and contractor representatives to participate in program and technical reviews, as well as to provide training and maintenance support in country, as required.
There will be no adverse impact on U.S. defense readiness as a result of this proposed sale.
(vii)
1. The MK 15 MOD 25 Phalanx Close-In Weapon System (CIWS) consists of a rapid-fire computer-controlled radar and gun system mounted on a turret designed to defeat anti-ship missiles; small surface craft; low, slow aircraft; rockets and mortars. The weapons system carries out search, detection, target threat evaluation, tracking, firing and kill loop fire control that uses advanced radar and computer technology to locate, identify and direct a system of armor piercing projectiles to the target. The Phalanx Block IB Baseline 2 (1B2) Radar Upgrade Kits converted the system's radar from an analog to digital suite, and in doing so addressed significant hardware obsolescence.
2. The highest level of classification of defense articles, components, and services included in this potential sale is CONFIDENTIAL.
3. If a technologically advanced adversary were to obtain knowledge of the specific hardware and software elements, the information could be used to develop countermeasures that might reduce weapon system effectiveness or be used in the development of a system with similar or advanced capabilities.
4. A determination has been made that the Republic of Korea can provide substantially the same degree of protection for the sensitive technology being released as the U.S. Government. This sale is necessary in furtherance of the U.S. foreign policy and national security objectives outlined in the Policy Justification.
5. All defense articles and services listed in this transmittal have been authorized for release and export to the Republic of Korea.
Defense Security Cooperation Agency, Department of Defense (DoD).
Arms sales notice.
The Department of Defense is publishing the unclassified text of an arms sales notification.
Karma Job at
This 36(b)(1) arms sales notification is published to fulfill the requirements of section 155 of Public Law 104-164 dated July 21, 1996. The following is a copy of a letter to the Speaker of the House of Representatives, Transmittal 20-87 with attached Policy Justification and Sensitivity of Technology.
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*As defined in Section 47(6) of the Arms Export Control Act.
TECRO has requested to buy a Field Information Communications System (FICS), consisting of one hundred fifty-four (154) Communications Nodes (CN) with S-788 Type III shelter; twenty-four (24) Communication Relays with S-788 Type III shelter; eight (8) Network Management Systems (NMS) with S-788 Type III shelter; Basic Issue Items (BII); program management support; verification testing; system technical support; transportation; spare and repair parts; communication support equipment; communication equipment integration; tools and test equipment; personnel training and training equipment; initial repair and return program; Additional Authorized List (AAL); technical manuals; Quality Assurance Team (QAT); U.S. Government and contractor engineering; technical and logistics support services; contractor provided training; Field Service Representatives (FSR); and other related elements of logistics and program support. The total estimated program cost is $280 million.
This proposed sale is consistent with U.S. law and policy as expressed in Public Law 96-8.
This proposed sale serves U.S. national, economic, and security interests by supporting the recipient's continuing efforts to modernize its armed forces and to maintain a credible defensive capability. The proposed sale will help improve the security of the recipient and assist in maintaining political stability, military balance, economic and progress in the region.
This proposed sale is designed to provide mobile and secure communications. It will contribute to the recipient's goal to modernize its military communication's capability in support of their mission and operational needs. The recipient will have no difficulty absorbing these systems into its armed forces.
The proposed sale of this equipment and support will not alter the basic military balance in the region.
The principal contractor is currently unknown due to a pending open competition for selection. The purchaser typically requests offsets. Any offset agreement will be defined in negotiations between the purchaser and the contractor(s).
Implementation of this proposed sale will not require the permanent assignment of any additional U.S. Government or contractor representatives to the recipient. Contractor representative and U.S. Government support teams may be required to travel to the country on a temporary basis.
There will be no adverse impact on U.S. defense readiness as a result of this proposed sale.
(vii)
1. The Field Information Communications System (FICS) is made up of commercially available, non-program of record components. The FICS system (also referred to as “Syun Lien”) is an area-switched communications system which is designed to provide mobile and secure communications in a wide range of battle situations. The FICS system provides mobile and secure voice and data communications on an automatic, discrete addressed, fixed-directory basis to the military Tactical Operations Center (TOC)-level command posts (CPs), and remote (mobile) users employing technological improvements in radio transmissions, data networking and packetized voice, while minimizing system footprint (power, size, personnel and logistics train). The system supports both mobile and wire subscribers with a means to exchange command, control, communications, and intelligence information in a dynamic tactical environment.
2. The highest level of classification of defense articles, components, and services included in this potential sale is UNCLASSIFIED.
3. If a technologically advanced adversary were to obtain knowledge of the hardware and software elements, the information could be used to develop countermeasures or equivalent systems, which might reduce system effectiveness or be used in the development of a system with similar or advanced capabilities.
4. A determination has been made that the recipient can provide substantially the same degree of protection for the sensitive technology being released as the U.S. Government. This sale is necessary in furtherance of the U.S. foreign policy and national security objectives outlined in the Policy Justification.
5. All defense articles and services listed in this transmittal have been authorized for release and export to the recipient.
Defense Security Cooperation Agency, Department of Defense (DoD).
Arms sales notice.
The Department of Defense is publishing the unclassified text of an arms sales notification.
Karma Job at
This 36(b)(1) arms sales notification is published to fulfill the requirements of section 155 of Public Law 104-164 dated July 21, 1996. The following is a copy of a letter to the Speaker of the House of Representatives, Transmittal 20-83 with attached Policy Justification and Sensitivity of Technology.
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*As defined in Section 47(6) of the Arms Export Control Act.
The Government of Romania has requested to buy upgrades to the avionics, software, communication equipment, navigational aids, and cockpit of its Mid-Life Update (MLU) Block 15 F-16 aircraft fleet along with additional logistics support. Included in the aircraft modernization are eight (8) LN-260 Global Positioning System (GPS) and nineteen (19) Multifunctional Information Distribution System Joint Tactical Radio Systems (MIDS JTRS). Also included is AN/APX-126 Advanced Identification Friend or Foe (IFF); ARC-210 Radios; KIV-78 Cryptographic Appliques; other secure communications, navigation, and encryption devices; Joint Mission Planning System (JMPS) software; aircraft minor modification, integration and test support, support equipment, software and software support; personnel training; spare and repair parts; publications and technical documentation; U.S. Government and contractor engineering, technical and logistical support services; and other related elements of logistical and program support. The estimated total cost is $175.4 million.
This proposed sale will support the foreign policy goals and national security of the United States by helping to improve the security of a NATO ally in developing and maintaining a strong and ready self-defense capability. This proposed sale will enhance U.S. national security objectives in the region.
The proposed sale will improve Romania's capability to meet current and future threats by upgrading its avionics to meet interoperability requirements for encrypted communications systems used by NATO forces. This increased secure communications capability will assist Romania in the defense of its homeland and U.S. personnel stationed there. Romania has demonstrated a significant financial commitment to modernizing its military, which will further enhance its interoperability with NATO. Romania will have no difficulty absorbing these capabilities into its armed forces.
The proposed sale of this equipment and support will not alter the basic military balance in the region.
The principal contractor will be Lockheed Martin Aeronautics Company of Fort Worth, TX. There are no known offset agreements proposed in connection with this potential sale.
Implementation of this proposed sale will not require the assignment of U.S. Government or contractor representatives in Romania.
There will be no adverse impact on U.S. defense readiness as a result of this proposed sale.
(vii)
1. The embedded GPS-INS (EGI) LN-260 is a sensor that combines GPS and inertial sensor inputs to provide accurate location information for navigating and targeting.
2. The Multifunctional Information Distribution System with Joint Tactical Radio System (MIDS JTRS) is an advanced Link-16 command, control, communications, and intelligence (C3I) system incorporating high-capacity, jam-resistant, digital communications links for exchange of near real-time tactical information, including both data and voice, among air, ground and sea elements.
3. The AN/APX-126 Advanced Identification Friend or Foe (IFF) Combined Interrogator Transponder (CIT) is a system capable of transmitting and interrogating Mode 5.
4. The ARC-210 UHF/VHF secure radio with HAVE QUICK II is a voice communications radio system that can operate in either normal, secure, and/or jam-resistant modes.
5. The KIV-78 is a crypto applique for IFF. It can be loaded with Mode 5 classified elements.
6. The Joint Mission Planning System (JMPS) is a multi-platform PC based mission planning system.
7. The highest level of classification of information included in this potential sale is SECRET.
8. If a technologically advanced adversary were to obtain knowledge of the specific hardware and software elements, the information could be used to develop countermeasures that might reduce weapon system effectiveness or be used in the development of a system with similar or advanced capabilities.
9. A determination has been made that Romania can provide substantially the same degree of protection for the sensitive technology being released as the U.S. Government. This sale is necessary in furtherance of the U.S. foreign policy and national security objectives outlined in the Policy Justification.
10. All defense articles and services listed in this transmittal have been authorized for release and export to the Government of Romania.
Office of Communications and Outreach (OCO), Department of Education (ED).
Notice.
In accordance with the Paperwork Reduction Act of 1995, ED is proposing an extension to a currently approved information collection.
Interested persons are invited to submit comments on or before February 22, 2021.
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 Aba Kumi, 202-401-1767.
The Department of Education (ED), in accordance with the Paperwork Reduction Act of 1995 (PRA) (44 U.S.C. 3506(c)(2)(A)), provides the general public and Federal agencies with an opportunity to comment on proposed, revised, and continuing collections of information. This helps the Department assess the impact of its information collection requirements and minimize the public's reporting burden. It also helps the public understand the Department's information collection requirements and provide the requested data in the desired format. ED is soliciting comments on the proposed information collection request (ICR) that is described below. The Department of Education is especially interested in public comment addressing the following issues: (1) Is this collection necessary to the proper functions of the Department; (2) will this information be processed and used in a timely manner; (3) is the estimate of burden accurate; (4) how might the Department enhance the quality, utility, and clarity of the information to be collected; and (5) how might the Department minimize the burden of this collection on the respondents, including through the use of information technology. Please note that written comments received in response to this notice will be considered public records.
Office of Special Education and Rehabilitative Services, Department of Education.
Notice.
The Department of Education (Department) is issuing a notice inviting applications for new awards for fiscal year (FY) 2021 for Educational Technology, Media, and Materials for Individuals with Disabilities—Stepping-up Technology Implementation, Assistance Listing Number 84.327S. This notice relates to the approved information collection under OMB control number 1820-0028.
For the addresses for obtaining and submitting an application, please refer to our Common Instructions for Applicants to Department of Education Discretionary Grant Programs, published in the
Terry Jackson, U.S. Department of Education, 400 Maryland Avenue SW, room 5128, Potomac Center Plaza, Washington, DC 20202-5076. Telephone: (202) 245-6039. Email:
If you use a telecommunications device for the deaf (TDD) or a text telephone (TTY), call the Federal Relay Service (FRS), toll free, at 1-800-877-8339.
This priority is:
Providing Technology-Based Professional Development to Trainers of Special Education Teachers to Support Children with Disabilities.
Technology has enhanced professional development learning opportunities for teachers by expanding access to information and resources that support their content expertise and pedagogy and promote their professional growth. As an alternative to face-to-face professional development that can be expensive or impracticable (
McAleavy et al. (2018) noted that using technology to support teachers' professional learning can promote collaboration through professional learning communities and communities of practice. In addition, technology that can be used to build the skills of teachers and related services personnel in rural or remote areas may be more cost-effective than face-to-face trainings and will offer flexibility that allows teachers to train at a time and place that suits them.
However, regardless of the delivery, effective professional development must go beyond learning new materials and skills; it must also support teachers and related services personnel in improving classroom instruction and student learning (Gess-Newsome et al., 2003). Darling-Hammond et al. (2017) indicated that effective professional development should have the following features: (1) Be content focused, (2) incorporate active learning utilizing adult learning principles, (3) support collaboration, (4) use models and modeling of effective practices, (5) provide coaching and expert support, (6) offer opportunities for feedback and reflection, and (7) be of sustained duration.
The Department therefore intends to fund three cooperative agreements to (a) identify strategies needed to implement and integrate an existing technology-based tool or approach, based on at least promising evidence,
To be considered for funding under this priority, applicants, at a minimum, must—
(a) Build partnerships with LEAs, at least one of which is in a rural site
(b) Increase the capacity of teacher in-service trainers to effectively use and deliver a technology-based tool or approach
(c) Develop an implementation package of products and resources that will help teacher in-service trainers to use a technology-based tool or approach; and
(d) Evaluate whether the in-service training conducted using the technology-based tool or approach meets the project goals and target outcomes.
In addition to these programmatic requirements, to be considered for funding under this priority, applicants must meet the following application and administrative requirements in this priority:
(a) Demonstrate, in the narrative section of the application under “Significance,” how the proposed project will—
(1) Address the need for a technology-based tool or approach and identify specific gaps and weaknesses, infrastructure, or opportunities to support teacher in-service training. To meet this requirement the applicant must—
(i) Identify a fully developed technology-based tool or approach that is based on at least promising evidence;
(ii) Identify how the technology-based tool or approach will improve teacher in-service training and the capacity of teachers to deliver instruction or services for PK-12 children with disabilities;
(iii) Present applicable national, State, regional, or local data demonstrating the need for the identified technology-based tool or approach in teacher in-service training to support children with disabilities;
(iv) Identify current policies, procedures, and practices used by teacher in-service trainers that incorporate technology-based tools or approaches to meet their training needs;
(v) Identify systemic barriers, gaps, or challenges, including challenges using the identified technology-based tools or approaches in providing teacher in-service training; and
(vi) Describe the potential impact of the identified technology-based tool or approach on teacher in-service trainers, teachers, families and children with disabilities.
(b) Demonstrate, in the narrative section of the application under “Quality of project services,” how the proposed project will—
(1) Ensure equal access and treatment for members of groups that have traditionally been underrepresented based on race, color, national origin, gender, age, or disability. To meet this
(i) Identify the needs of the intended recipients for ongoing coaching and supports;
(ii) Identify potential strategies to provide recipients of the in-service training with the flexibility to personalize their own learning and coaching supports; and
(iii) Ensure that products and resources meet the needs of the intended recipients of the grant;
(2) Achieve its goals, objectives, and intended outcomes. To meet this requirement, the applicant must provide—
(i) Measurable intended project outcomes; and
(ii) In Appendix A, the logic model
(3) Use a logic model or conceptual framework (and provide a copy in Appendix A) to develop project plans and activities describing any underlying concepts, assumptions, expectations, beliefs, or theories, as well as the presumed relationships or linkages among these variables, and any empirical support for this framework;
(4) Be based on current research. To meet this requirement, the applicant must—
(i) Describe how the proposed project will align to current research, policies, and practices related to the benefits, services, or opportunities that are available using the technology-based tool or approach;
(ii) Describe how the proposed project will incorporate current research and practices to guide the development and delivery of its products and resources, including accessibility and usability; and
(iii) Document that the technology tool used by the project is fully developed, has been tested and shown to have promising evidence, and addresses, at a minimum, the following principles of universal design for learning (UDL):
(A) Multiple means of presentation so that information can be delivered in more than one way (
(B) Multiple means of expression that allow knowledge to be exhibited through options such as writing, online concept mapping, or speech-to-text programs, where appropriate.
(C) Multiple means of engagement to stimulate interest in and motivation for learning (
(5) Develop new products and resources that are of high quality and sufficient intensity and duration to achieve the intended outcomes of the proposed project. To address this requirement, the applicant must—
(i) Provide a plan for recruiting and selecting a wide range of settings where children with disabilities are served, which must include the following:
(A) Three development sites. Development sites are the sites in which iterative development of the products and resources intended to support the implementation of technology tools will occur. The project must start implementing the technology tool with one development site in year one of the project period and two additional development sites in year two.
(B) Four pilot sites. Pilot sites are the sites in which try-out, formative evaluation, and refinement of the products and resources will occur. The project must work with the four pilot sites during years three and four of the project period.
(C) Ten dissemination sites. Dissemination/scale-up sites will be selected if the project is extended for a fifth year. Dissemination/scale-up sites will be used to (1) refine the products for use by educators, and (2) evaluate the performance of the technology tool. Dissemination/scale-up sites will receive less technical assistance (TA) from the project than development and pilot sites. Also, dissemination/scale-up sites will extend the benefits of the technology tool to additional students. To be selected as a dissemination/scale-up site, eligible sites must commit to working with the project to implement the technology tool.
(D) A site may not serve in more than one category (
(E) A minimum of three of the seven development and pilot sites must be in settings other than traditional public elementary and secondary schools and include at least one rural site. A minimum of four of the 10 dissemination/scale-up sites must be in settings other than traditional public elementary and secondary schools and include at least one rural site. These non-traditional and rural sites must otherwise meet the requirements of each category listed above.
(ii) Provide information on the development and pilot sites, including student demographics and other pertinent data (
(iii) Provide its plan for dissemination, which must address how the project will systematically distribute information, products, and services to varied intended audiences, using a variety of dissemination strategies, to promote awareness and use of the project's products and resources that goes beyond conference presentations and research articles;
(iv) Provide its plan for how the project will sustain project activities after funding ends; and
(v) Provide assurances that the final products disseminated to help sites effectively implement technology tools will be both open educational resources (OER) and licensed through an open access licensing authority.
(c) In the narrative section of the application under “Quality of the project evaluation,” include an evaluation plan for the project as described in the following paragraphs. The evaluation plan must describe measures of progress in implementation, including the criteria for determining the extent to which the project's products and resources have met the goals for reaching the project's target population; measures of intended outcomes or results of the project's activities in order to evaluate those activities; and how well the goals or objectives of the proposed project, as described in its logic model, have been met. The applicant must provide an assurance that, in designing the evaluation plan, it will—
(1) Provide a logic model or conceptual framework that depicts, at a minimum, the goals, activities, project evaluation, methods, performance
(2) Provide a plan to implement the activities described in this priority;
(3) Provide a plan, linked to the proposed project's logic model or conceptual framework, for a formative evaluation of the proposed project's activities. The plan must describe how the formative evaluation will use clear performance objectives to ensure continuous improvement in the operation of the proposed project, including objective measures of progress in implementing the project and ensuring the quality of products and resources;
(4) Describe a plan or method for assessing—
(i) The development and pilot sites' current teacher in-service training uses and needs, any current in-service technology investments, and the knowledge and availability of dedicated on-site in-service training personnel;
(ii) The readiness of development and pilot sites to pilot or try-out the technology-based teacher in-service training, including at a minimum, their current infrastructure, available resources, and ability to build capacity;
(iii) Whether the technology-based tool or approach has achieved its intended outcomes for teacher in-service trainers and PK-12 teachers; and
(iv) Ongoing training needs of in-service trainers to implement with fidelity;
(5) Collect formative and summative data from the in-service training to refine and evaluate the products;
(6) If the project is extended to a fifth year—
(i) Provide the implementation package of products and resources developed for the technology-based tool or approach to no fewer than 10 additional school sites, one of which must be rural, in year five; and
(ii) Collect summative data about the success of the project's products and resources in supporting implementation of the technology-based tool or approach in teacher in-service training sites; and
(7) By the end of the project period, provide—
(i) Information on the products and resources, as supported by the project evaluation, including accessibility features, that will enable other sites to implement and sustain implementation of the technology-based tool or approach;
(ii) Information in the Technology Implementation Report, including data on how in-service trainers used the technology-based tool or approach, and how the technology-based tool or approach was implemented with fidelity;
(iii) Data on how the technology-based tool or approach changed in-service trainers' practices; and
(iv) A plan for disseminating or scaling up the technology-based tool or approach and accompanying products beyond the sites directly involved in the project.
(d) Demonstrate, in the narrative section of the application under “Adequacy of resources and quality of project personnel,” how—
(1) The proposed project will encourage applications for employment from persons who are members of groups that have traditionally been underrepresented based on race, color, national origin, gender, age, or disability, as appropriate;
(2) The proposed key project personnel, consultants, and subcontractors have the qualifications and experience to carry out the proposed activities and achieve the project's intended outcomes;
(3) The applicant and any key partners have adequate resources to carry out the proposed activities; and
(4) The proposed costs are reasonable in relation to the anticipated results and benefits.
(e) Demonstrate, in the narrative section of the application under “Quality of the management plan,” how—
(1) The proposed management plan will ensure that the project's intended outcomes will be achieved on time and within budget. To address this requirement, the applicant must describe—
(i) Clearly defined responsibilities for key project personnel, consultants, and subcontractors, as applicable; and
(ii) Timelines and milestones for accomplishing the project tasks;
(2) Key project personnel and any consultants and subcontractors will be allocated and how these allocations are appropriate and adequate to achieve the project's intended outcomes;
(3) The proposed management plan will ensure that the products and resources provided are of high quality, relevant, and useful to recipients; and
(4) The proposed project will benefit from a diversity of perspectives, including those of families, educators, researchers, and policy makers, among others, in its development and operation.
(f) Address the following application requirements. The applicant must include—
(1) In Appendix A, personnel-loading charts and timelines, as applicable, to illustrate the management plan described in the narrative; and
(2) In the budget, attendance at the following:
(i) A one and one-half day kick-off meeting in Washington, DC, or virtually after receipt of the award, and an annual planning meeting in Washington, DC, or virtually, with the Office of Special Education Programs (OSEP) project officer and other relevant staff during each subsequent year of the project period.
Within 30 days of receipt of the award, a post-award teleconference must be held between the OSEP project officer and the grantee's project director or other authorized representative.
(ii) A two and one-half-day project directors' conference in Washington, DC, or a virtual conference during each year of the project period.
(iii) Two annual two-day trips to attend Department briefings, Department-sponsored conferences, and other meetings, as requested by OSEP.
(iv) A one-day intensive OSEP review meeting during the last half of the second year of the project period.
OSEP project officer(s) will provide coordination support among the projects. Each project funded under this priority must—
(a) Participate in monthly conference-call discussions to share and collaborate on implementation and project issues; and
(b) Provide information annually using a template that captures descriptive data on project site selection and the processes for installation and use of the technology-based tool or approach (
The following website provides more information about implementation research:
The Secretary may extend a project one year beyond the initial 48 months to work with dissemination/scale-up sites if the grantee is achieving the intended outcomes of the project (as demonstrated by data gathered as part of the project evaluation) and making a positive contribution to the implementation of a technology-based tool or approach based on at least promising evidence with fidelity in the development and pilot sites. Each applicant must include in its application a plan for the full 60-month period. In deciding whether to continue funding the project for the fifth year, the Secretary will consider the requirements of 34 CFR 75.253(a), and will consider—
(a) The recommendation of a review team consisting of the OSEP project officer and other experts selected by the Secretary. This review will be held during the last half of the second year of the project period;
(b) The success and timeliness with which the requirements of the negotiated cooperative agreement have been or are being met by the project; and
(c) The degree to which the project's activities have changed practices and improved outcomes for PK-12 children with disabilities.
Projects must be awarded and operated in a manner consistent with the nondiscrimination requirements contained in the U.S. Constitution and the Federal civil rights laws.
The regulations in 34 CFR part 79 apply to all applicants except federally recognized Indian Tribes.
The regulations in 34 CFR part 86 apply to institutions of higher education (IHEs) only.
Contingent upon the availability of funds and the quality of applications, we may make additional awards in FY 2022 from the list of unfunded applications from this competition.
The Department is not bound by any estimates in this notice.
1.
If you are a nonprofit organization, under 34 CFR 75.51, you may demonstrate your nonprofit status by providing: (1) Proof that the Internal Revenue Service currently recognizes the applicant as an organization to which contributions are tax deductible under section 501(c)(3) of the Internal Revenue Code; (2) a statement from a State taxing body or the State attorney general certifying that the organization is a nonprofit organization operating within the State and that no part of its net earnings may lawfully benefit any private shareholder or individual; (3) a certified copy of the applicant's certificate of incorporation or similar document if it clearly establishes the nonprofit status of the applicant; or (4) any item described above if that item applies to a State or national parent organization, together with a statement by the State or parent organization that the applicant is a local nonprofit affiliate.
2. a.
b.
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(b) Each applicant for, and recipient of, funding must, with respect to the aspects of their proposed project relating to the absolute priority, involve individuals with disabilities, or parents of individuals with disabilities ages birth through 26, in planning, implementing, and evaluating the project (see section 682(a)(1)(A) of IDEA).
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• A “page” is 8.5″ x 11″, on one side only, with 1″ margins at the top, bottom, and both sides.
• Double-space (no more than three lines per vertical inch) all text in the application narrative, including titles, headings, footnotes, quotations, reference citations, and captions, as well as all text in charts, tables, figures, graphs, and screen shots.
• Use a font that is 12 point or larger.
• Use one of the following fonts: Times New Roman, Courier, Courier New, or Arial.
The recommended page limit does not apply to the cover sheet; the budget section, including the narrative budget justification; the assurances and certifications; or the abstract (follow the guidance provided in the application package for completing the abstract), the table of contents, the list of priority requirements, the resumes, the reference list, the letters of support, or the appendices. However, the recommended page limit does apply to all of the application narrative, including all text in charts, tables, figures, graphs, and screen shots.
1.
(a)
(1) The Secretary considers the significance of the proposed project.
(2) In determining the significance of the proposed project, the Secretary considers the following factors:
(i) The significance of the problem or issue to be addressed by the proposed project;
(ii) The extent to which specific gaps or weaknesses in services, infrastructure, or opportunities have been identified and will be addressed by the proposed project, including the nature and magnitude of those gaps or weaknesses;
(iii) The potential contribution of the proposed project to increased knowledge or understanding of educational problems, issues, or effective strategies; and
(iv) The potential replicability of the proposed project or strategies, including, as appropriate, the potential for implementation in a variety of settings.
(b)
(1) The Secretary considers the quality of the services to be provided by the proposed project.
(2) In determining the quality of the services to be provided by the proposed project, the Secretary considers the quality and sufficiency of strategies for ensuring equal access and treatment for eligible project participants who are members of groups that have traditionally been underrepresented based on race, color, national origin, gender, age, or disability.
(3) In addition, the Secretary considers the following factors:
(i) The extent to which the services to be provided by the proposed project reflect up-to-date knowledge from research and effective practice;
(ii) The extent to which the training or professional development services to be provided by the proposed project are of sufficient quality, intensity, and duration to lead to improvements in practice among the recipients of those services;
(iii) The extent to which the services to be provided by the proposed project involve the collaboration of appropriate partners for maximizing the effectiveness of project services;
(iv) The extent to which the services to be provided by the proposed project are appropriate to the needs of the intended recipients or beneficiaries of those services; and
(v) The likely impact of the services to be provided by the proposed project on the intended recipients of those services.
(c)
(1) The Secretary considers the quality of the evaluation to be conducted of the proposed project.
(2) In determining the quality of the evaluation, the Secretary considers the following factors:
(i) The extent to which the methods of evaluation are thorough, feasible, and appropriate to the goals, objectives, and outcomes of the proposed project;
(ii) The extent to which the methods of evaluation include the use of objective performance measures that are clearly related to the intended outcomes of the project and will produce quantitative and qualitative data to the extent possible;
(iii) The extent to which the methods of evaluation provide for examining the effectiveness of project implementation strategies;
(iv) The extent to which the methods of evaluation will provide performance feedback and permit periodic assessment of progress toward achieving intended outcomes; and
(v) The extent to which the evaluation plan clearly articulates the key project components, mediators, and outcomes, as well as a measurable threshold for acceptable implementation.
(d)
(1) The Secretary considers the adequacy of resources for the proposed project and the quality of the personnel who will carry out the proposed project.
(2) In determining the quality of project personnel, the Secretary considers the extent to which the applicant encourages applications for employment from persons who are members of groups that have traditionally been underrepresented based on race, color, national origin, gender, age, or disability.
(3) In addition, the Secretary considers the following factors:
(i) The qualifications, including relevant training and experience, of the project director or principal investigator;
(ii) The qualifications, including relevant training and experience, of key project personnel;
(iii) The qualifications, including relevant training and experience, of project consultants or subcontractors;
(iv) The adequacy of support, including facilities, equipment, supplies, and other resources, from the applicant organization or the lead applicant organization;
(v) The relevance and demonstrated commitment of each partner in the proposed project to the implementation and success of the project; and
(vi) The extent to which the costs are reasonable in relation to the objectives, design, and potential significance of the proposed project.
(e)
(1) The Secretary considers the quality of the management plan for the proposed project.
(2) In determining the quality of the management plan for the proposed project, the Secretary considers the following factors:
(i) The adequacy of the management plan to achieve the objectives of the proposed project on time and within budget, including clearly defined responsibilities, timelines, and milestones for accomplishing project tasks;
(ii) The extent to which the time commitments of the project director and principal investigator and other key project personnel are appropriate and adequate to meet the objectives of the proposed project;
(iii) The adequacy of mechanisms for ensuring high-quality products and services from the proposed project;
(iv) How the applicant will ensure that a diversity of perspectives are brought to bear in the operation of the proposed project, including those of parents, teachers, the business community, a variety of disciplinary and professional fields, recipients or beneficiaries of services, or others, as appropriate; and
(v) The adequacy of procedures for ensuring feedback and continuous improvement in the operation of the proposed project.
2.
In addition, in making a competitive grant award, the Secretary requires various assurances, including those applicable to Federal civil rights laws that prohibit discrimination in programs or activities receiving Federal financial assistance from the Department (34 CFR 100.4, 104.5, 106.4, 108.8, and 110.23).
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4.
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Please note that, if the total value of your currently active grants, cooperative agreements, and procurement contracts from the Federal Government exceeds $10,000,000, the reporting requirements in 2 CFR part 200, Appendix XII, require you to report certain integrity information to FAPIIS semiannually. Please review the requirements in 2 CFR part 200, Appendix XII, if this grant plus all the other Federal funds you receive exceed $10,000,000.
1.
If your application is not evaluated or not selected for funding, we notify you.
2.
We reference the regulations outlining the terms and conditions of an award in the
3.
4.
(b) At the end of your project period, you must submit a final performance report, including financial information, as directed by the Secretary. If you receive a multiyear award, you must submit an annual performance report that provides the most current performance and financial expenditure information as directed by the Secretary under 34 CFR 75.118. The Secretary may also require more frequent performance reports under 34 CFR 75.720(c). For specific requirements on reporting, please go to
(c) Under 34 CFR 75.250(b), the Secretary may provide a grantee with additional funding for data collection analysis and reporting. In this case the Secretary establishes a data collection period.
5.
• Program Performance Measure 1: The percentage of ETechM2 Program products and services judged to be of high quality by an independent review panel of experts qualified to review the substantial content of the products and services.
• Program Performance Measure 2: The percentage of ETechM2 Program products and services judged to be of high relevance to improving outcomes for infants, toddlers, children, and youth with disabilities.
• Program Performance Measure 3: The percentage of ETechM2 Program products and services judged to be useful in improving results for infants, toddlers, children, and youth with disabilities.
• Program Performance Measure 4.1: The Federal cost per unit of accessible educational materials funded by the ETechM2 Program.
• Program Performance Measure 4.2: The Federal cost per unit of accessible educational materials from the National Instructional Materials Accessibility Center funded by the ETechM2 Program.
• Program Performance Measure 4.3: The Federal cost per unit of video description funded by the ETechM2 Program.
These measures apply to projects funded under this competition, and grantees are required to submit data on these measures as directed by OSEP.
Grantees will be required to report information on their project's performance in annual performance reports and additional performance data to the Department (34 CFR 75.590 and 75.591).
6.
In making a continuation award, the Secretary also considers whether the grantee is operating in compliance with the assurances in its approved application, including those applicable to Federal civil rights laws that prohibit discrimination in programs or activities receiving Federal financial assistance from the Department (34 CFR 100.4, 104.5, 106.4, 108.8, and 110.23).
You may also access documents of the Department published in the
National Center for Education Statistics (NCES), Institute of Education Sciences (IES), Department of Education (ED).
Notice.
In accordance with the Paperwork Reduction Act of 1995, ED is seeking public comment on proposed changes to a currently existing information collection.
Interested persons are invited to submit comments on or before January 21, 2021.
Written comments and recommendations for proposed information collection requests should be sent within 30 days of publication of this notice to
For specific questions related to collection activities, please contact Carrie Clarady, 202-245-6347.
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) changes that are 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.
NPEFS provides detailed finance data at the state level, including average daily attendance; school district revenues by source (local, state, and federal); and expenditures by function (instruction, support services, and non-instruction), sub function (
In 2019, NCES requested an extension of approval for the NPEFS data collection, OMB Control Number 1850-0067. NPEFS is an annual collection of state-level finance data that have been a component of NCES's Common Core of Data (CCD) since FY 1982 (covering school year 1981/82). On August 22, 2019, the Office of Management and Budget (OMB) approved the collection of state-level finance data for the data collections of FY 19-FY 21 data. The expiration date is August 31, 2022. The statistical uses of NPEFS were previously set forth in National Public Education Financial Survey (NPEFS) 2019-2021: Common Core of Data (CCD), Supporting Statement Part A, OMB# 1850-0067 v.17.
This submission for 30-day public review requests changes to the National Public Education Financial Survey (NPEFS) data collection. As a direct result of the COVID-19 circumstances, the National Center for Education Statistics (NCES) is requesting to:
1. Amend the instructions for Average Daily Attendance (ADA) on NPEFS;
2. Obtain approval to send a letter to Chief State School Officers (CSSOs) and State Fiscal Coordinators pertaining to ADA;
3. Amend the data plan for NPEFS;
4. Add certain data items to NPEFS;
5. Make other small changes to FY 20 NPEFS, based on regular communication with state fiscal coordinators; and
6. Change the estimated respondent burden and the costs to the federal government incurred by the above changes.
Office of Environmental Management, Department of Energy.
Notice of open virtual meeting.
This notice announces an online virtual meeting of the Environmental Management Site-Specific Advisory Board (EM SSAB), Northern New Mexico. The Federal Advisory Committee Act requires that public notice of this conference call be announced in the
Wednesday, January 13, 2021; 1:00 p.m.-4:45 p.m.
This meeting will be held virtually via Webex. To attend, please contact Menice Santistevan by email,
Menice Santistevan, Northern New Mexico Citizens' Advisory Board (NNMCAB), 94 Cities of Gold Road, Santa Fe, NM 87506. Phone (505) 995-0393 or Email:
Signed in Washington, DC, on December 17, 2020.
Take notice that the following amended hydroelectric application has been filed with the Commission and is available for public inspection.
a.
b.
c.
d.
e.
f.
g.
h.
i.
j. This application is not ready for environmental analysis at this time.
k. Great River Hydro filed an application for a new license for the Bellows Falls Hydroelectric Project No. 1855 on May 1, 2017. In the license application, Great River Hydro stated that it could not develop a complete licensing proposal for the project since many of the required environmental studies were not complete as of May 1, 2017. Great River Hydro indicated that it would amend the license application after completing additional field work, consultation, and analyses on the required studies. Great River Hydro filed material amendments to the final license application on December 7, 2020.
l.
Great River Hydro operates the project in coordination with its upstream Wilder Project No. 1892 and downstream Vernon Project No. 1904 and in a peaking mode. Average annual generation is approximately 239,070 MW-hours. Great River Hydro is proposing changes to project operation that would reduce impoundment fluctuations and increase the stability of downstream flow releases relative to current project operation, including targeted water surface elevation levels and flow ramping rates. Great River Hydro proposes several protection, mitigation, and enhancement measures for aquatic, terrestrial, cultural, and recreation resources, and threatened and endangered species. The specific proposed changes are described in the amended application.
m. In addition to publishing the full text of this notice in the
n. You may also register online at
o.
p. Final amendments to the application must be filed with the Commission no later than 30 days from the issuance date of the notice of ready for environmental analysis.
This is a supplemental notice in the above-referenced proceeding of PGR Lessee O, LLC's application for market-based rate authority, with an accompanying rate tariff, noting that such application includes a request for blanket authorization, under 18 CFR part 34, of future issuances of securities and assumptions of liability.
Any person desiring to intervene or to protest should file with the Federal Energy Regulatory Commission, 888 First Street NE, Washington, DC 20426, in accordance with Rules 211 and 214 of the Commission's Rules of Practice and Procedure (18 CFR 385.211 and 385.214). Anyone filing a motion to intervene or protest must serve a copy of that document on the Applicant.
Notice is hereby given that the deadline for filing protests with regard to the applicant's request for blanket authorization, under 18 CFR part 34, of future issuances of securities and assumptions of liability, is January 5, 2021.
The Commission encourages electronic submission of protests and interventions in lieu of paper, using the FERC Online links at
Persons unable to file electronically may mail similar pleadings to the Federal Energy Regulatory Commission, 888 First Street NE, Washington, DC 20426. Hand delivered submissions in docketed proceedings should be delivered to Health and Human Services, 12225 Wilkins Avenue, Rockville, Maryland 20852.
In addition to publishing the full text of this document in the
Take notice that on December 7, 2020, Adelphia Gateway, LLC (Adelphia), 1415 Wyckoff Road, Wall, New Jersey, 07719, filed in the above referenced docket a prior notice pursuant to Section 157.210 and 157.216 of the Federal Energy Regulatory Commission's regulations under the Natural Gas Act, seeking authorization to install and operate one new electric motor-driven 3,000 hp reciprocating compressor unit at its Marcus Hook Compressor Station in Delaware County, Pennsylvania including related equipment such as one horizontal process gas cooler, two variable frequency drives, one motor control center assembly and instrumentation and communication equipment, all within the existing certificated foot print of the station. Installation of unit will increase the overall hp at the facility from 5,625 hp to 8,625 hp and increase the certificated capacity of its system by 16,500 Dth/d, from 250,000 to 266,500 Dth/d.
In addition to publishing the full text of this document in the
Any questions concerning this application should be directed to Ginger P. Richman, President, Adelphia Gateway, LLC, (732) 938-1268,
There are three ways to become involved in the Commission's review of this project: You can file a protest to the project, you can file a motion to intervene in the proceeding, and you can file comments on the project. There is no fee or cost for filing protests, motions to intervene, or comments. The deadline for filing protests, motions to intervene, and comments is 5:00 p.m. Eastern Time on February 16, 2021. How to file protests, motions to intervene, and comments is explained below.
Pursuant to section 157.205 of the Commission's regulations under the
Protests must comply with the requirements specified in section 157.205(e) of the Commission's regulations,
Any person has the option to file a motion to intervene in this proceeding. Only intervenors have the right to request rehearing of Commission orders issued in this proceeding and to subsequently challenge the Commission's orders in the U.S. Circuit Courts of Appeal.
To intervene, you must submit a motion to intervene to the Commission in accordance with Rule 214 of the Commission's Rules of Practice and Procedure
All timely, unopposed motions to intervene are automatically granted by operation of Rule 214(c)(1). Motions to intervene that are filed after the intervention deadline are untimely and may be denied. Any late-filed motion to intervene must show good cause for being late and must explain why the time limitation should be waived and provide justification by reference to factors set forth in Rule 214(d) of the Commission's Rules and Regulations. A person obtaining party status will be placed on the service list maintained by the Secretary of the Commission and will receive copies (paper or electronic) of all documents filed by the applicant and by all other parties.
Any person wishing to comment on the project may do so. The Commission considers all comments received about the project in determining the appropriate action to be taken. To ensure that your comments are timely and properly recorded, please submit your comments on or before February 16, 2021. The filing of a comment alone will not serve to make the filer a party to the proceeding. To become a party, you must intervene in the proceeding.
There are two ways to submit protests, motions to intervene, and comments. In both instances, please reference the Project docket number CP21-14-000 in your submission.
(1) You may file your protest, motion to intervene, and comments by using the Commission's eFiling feature, which is located on the Commission's website (
(2) You can file a paper copy of your submission by mailing it to the address below.
The Commission encourages electronic filing of submissions (option 1 above) and has eFiling staff available to assist you at (202) 502-8258 or
Protests and motions to intervene must be served on the applicant either by mail or email (with a link to the document) at:
Throughout the proceeding, additional information about the project will be available from the Commission's Office of External Affairs, at (866) 208-FERC, or on the FERC website at
In addition, the Commission offers a free service called eSubscription which allows you to keep track of all formal issuances and submittals in specific dockets. This can reduce the amount of time you spend researching proceedings by automatically providing you with notification of these filings, document summaries, and direct links to the documents. For more information and to register, go to
Take notice that the following amended hydroelectric application has been filed with the Commission and is available for public inspection.
a.
b.
c.
d.
e.
f.
g.
h.
i.
j. This application is not ready for environmental analysis at this time.
k. FirstLight Hydro Generating Company filed an application for a new license for the Turners Falls Hydroelectric Project No. 1889 (project) on April 29, 2016. In the license application, FirstLight Hydro Generating Company stated that it could not develop a complete licensing proposal for the project since many of the required environmental studies were not complete as of April 29, 2016. FirstLight Hydro Generating Company indicated that it would amend the license application after completing additional field work, consultation, and analyses on the required studies. On July 11, 2019, Commission staff approved the transfer of the license for the project from FirstLight Hydro Generating Company to FirstLight MA Hydro LLC. FirstLight MA Hydro LLC filed material amendments to the final license application on December 4, 2020.
l.
The Turners Falls Project operates in peaking and run-of-river modes, depending on inflows. Average annual generation from 2011-2019 was approximately 332,351 MW-hours.
FirstLight proposes three changes to the current project boundary: (1) Remove 0.2 acre of land associated with residential property; (2) add 0.8 acre of land for recreation purposes; and (3) remove 20.1 acres of land associated with the U.S. Geological Survey's Silvio Conte Anadromous Fish Laboratory.
FirstLight proposes to construct new fish passage facilities and recreational access trails. FirstLight also proposes changes to project operation that would generally reduce impoundment fluctuations and increase flow releases to the portion of the Connecticut River that is bypassed by the project. The specific proposed changes are described in the amended application.
m. In addition to publishing the full text of this notice in the
n. You may also register online at
o.
p. Final amendments to the application must be filed with the Commission no later than 30 days from the issuance date of the notice of ready for environmental analysis.
Take notice that the following amended hydroelectric application has been filed with the Commission and is available for public inspection.
a.
b.
c.
d.
e.
f.
g.
h.
i.
j. This application is not ready for environmental analysis at this time.
k. FirstLight Hydro Generating Company (FirstLight) filed an application for a new license for the Northfield Mountain Pumped Storage Project No. 2485 (project) on April 29, 2016. In the license application, FirstLight stated that it could not develop a complete licensing proposal for the project since many of the required environmental studies were not complete as of April 29, 2016. FirstLight indicated that it would amend the license application after completing additional field work, consultation, and analyses on the required studies. On July 11, 2019, Commission staff approved the transfer of the license for the project from FirstLight to Northfield Mountain LLC. Northfield Mountain LLC filed material amendments to the final license application on December 4, 2020.
l.
The existing Northfield Mountain Pumped Storage Project generally operates in pumping mode when electricity demand is low and generating mode when electricity demand is high. In the summer and winter, the project generally operates in a peaking mode in the morning and late afternoon. In the spring and fall, the project may operate in a peaking mode one or two times a day depending on electricity demand. The existing license requires maintaining the upper reservoir between elevations 938.0 feet and 1,000.5 feet NGVD 29 (
Northfield proposes three changes to the current project boundary: (1) Remove 0.2 acre of land associated with residential property; (2) remove 8.1 acre of land referred to as “Fuller Farm” that includes residential and agricultural structures; and (3) add 135.5 acres of land that includes recreation trails.
Northfield proposes to increase the maximum water surface elevation of the upper reservoir to 1,004.5 feet NGVD 29 and decrease the minimum water surface elevation of the upper reservoir to 920.0 feet NGVD 29 (
m. In addition to publishing the full text of this notice in the
n. You may also register online at
o.
p. Final amendments to the application must be filed with the Commission no later than 30 days from the issuance date of the notice of ready for environmental analysis.
This is a supplemental notice in the above-referenced proceeding of Centerfield Cooper Solar, LLC's application for market-based rate authority, with an accompanying rate tariff, noting that such application includes a request for blanket authorization, under 18 CFR part 34, of future issuances of securities and assumptions of liability.
Any person desiring to intervene or to protest should file with the Federal Energy Regulatory Commission, 888 First Street NE, Washington, DC 20426, in accordance with Rules 211 and 214 of the Commission's Rules of Practice and Procedure (18 CFR 385.211 and 385.214). Anyone filing a motion to intervene or protest must serve a copy of that document on the Applicant.
Notice is hereby given that the deadline for filing protests with regard to the applicant's request for blanket authorization, under 18 CFR part 34, of future issuances of securities and assumptions of liability, is January 5, 2021.
The Commission encourages electronic submission of protests and interventions in lieu of paper, using the FERC Online links at
Persons unable to file electronically may mail similar pleadings to the Federal Energy Regulatory Commission, 888 First Street NE, Washington, DC 20426. Hand delivered submissions in docketed proceedings should be delivered to Health and Human Services, 12225 Wilkins Avenue, Rockville, Maryland 20852.
In addition to publishing the full text of this document in the
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 the following amended hydroelectric application has been filed with the Commission and is available for public inspection.
a.
b.
c.
d.
e.
f.
g.
h.
i.
j. This application is not ready for environmental analysis at this time.
k. Great River Hydro filed an application for a new license for the Vernon Hydroelectric Project No. 1904 on May 1, 2017. In the license application, Great River Hydro stated that it could not develop a complete licensing proposal for the project since many of the required environmental studies were not complete as of May 1, 2017. Great River Hydro indicated that it would amend the license application after completing additional field work, consultation, and analyses on the required studies. Great River Hydro filed material amendments to the final license application on December 7, 2020.
l.
Great River Hydro operates the project in coordination with its upstream Wilder Project No. 1892 and Bellows Falls Project No. 1855 and in a peaking mode. Average annual generation is approximately 158,028 MW-hours. Great River Hydro is proposing changes to project operation that would reduce impoundment fluctuations and increase the stability of downstream flow releases relative to current project operation, including targeted water surface elevation levels and flow ramping rates. Great River Hydro proposes several protection, mitigation, and enhancement measures for aquatic, terrestrial, cultural, and recreation resources, and threatened and endangered species. The specific proposed changes are described in the amended application.
m. In addition to publishing the full text of this notice in the
n. You may also register online at
o.
p. Final amendments to the application must be filed with the Commission no later than 30 days from the issuance date of the notice of ready for environmental analysis.
Take notice that the Commission received the following exempt wholesale generator filings:
Take notice that the Commission received the following electric rate filings:
Take notice that the Commission received the following electric securities filings:
The filings are accessible in the Commission's eLibrary system (
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 December 15, 2020, Kelly Lankford submitted for filing, application for authority to hold interlocking positions, pursuant to section 305(b) of the Federal Power Act, 16 U.S.C. 825d (b) (2020) and Part 45 of the Federal Energy Regulatory Commission's (Commission) Rules of Practice and Procedure, 18 CFR part 45.8 (2020).
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. On or before the comment date, it is not necessary to serve motions to intervene or protests on persons other than the Applicant.
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
Take notice that on December 11, 2020, Stingray Pipeline Company, L.L.C. (Stingray), 1300 Main Street, Houston, Texas 77002, filed an application under section 7(b) of the Natural Gas Act (NGA) and Part 157 of the Commission's regulations seeking authorization to amend its application in Docket No. CP20-528-000 to abandon certain facilities in the WC 509 System by removal or in place, rather than by sale to Triton Gathering LLC (Triton) that were damaged and/or destroyed by Hurricane Delta. Specifically, Stingray seeks authorization to: (1) Abandon in place approximately 14.98 miles of 24-inch-diameter pipeline and (2) abandon by removal its 50 percent ownership interest in the A330 Platform and related equipment, all located in federal waters, offshore Louisiana, all as more fully set forth in the application which is on file with the Commission and open for public inspection.
In addition to publishing the full text of this document in the
Any questions regarding the proposed project should be directed to Blair Lichtenwalter, Senior Director of Certificates, Stingray Pipeline Company, L.L.C., 1300 Main Street, Houston, Texas 77002; by phone at (713) 989-2605 or by email at
Pursuant to Section 157.9 of the Commission's Rules of Practice and
There are two ways to become involved in the Commission's review of this project: You can file comments on the project, and you can file a motion to intervene in the proceeding. There is no fee or cost for filing comments or intervening. The deadline for filing a motion to intervene is 5:00 p.m. Eastern Time on January 6, 2021.
Any person wishing to comment on the project may do so. Comments may include statements of support or objections to the project as a whole or specific aspects of the project. The more specific your comments, the more useful they will be. To ensure that your comments are timely and properly recorded, please submit your comments on or before January 6, 2021.
There are three methods you can use to submit your comments to the Commission. In all instances, please reference the Project docket number CP20-528-001 in your submission.
(1) You may file your comments electronically by using the eComment feature, which is located on the Commission's website at
(2) You may file your comments electronically by using the eFiling feature, which is located on the Commission's website (
(3) You can file a paper copy of your comments by mailing them to the following address below.
The Commission encourages electronic filing of comments (options 1 and 2 above) and has eFiling staff available to assist you at (202) 502-8258 or
Persons who comment on the environmental review of this project will be placed on the Commission's environmental mailing list and will receive notification when the environmental documents (EA or EIS) are issued for this project and will be notified of meetings associated with the Commission's environmental review process.
The Commission considers all comments received about the project in determining the appropriate action to be taken. However, the filing of a comment alone will not serve to make the filer a party to the proceeding. To become a party, you must intervene in the proceeding. For instructions on how to intervene, see below.
Any person, which includes individuals, organizations, businesses, municipalities, and other entities,
To intervene, you must submit a motion to intervene to the Commission in accordance with Rule 214 of the Commission's Rules of Practice and Procedure
There are two ways to submit your motion to intervene. In both instances, please reference the Project docket number CP20-528-001 in your submission.
(1) You may file your motion to intervene by using the Commission's eFiling feature, which is located on the Commission's website (
(2) You can file a paper copy of your motion to intervene, along with three copies, by mailing the documents to the address below.
The Commission encourages electronic filing of motions to intervene (option 1 above) and has eFiling staff available to assist you at (202) 502-8258 or
Motions to intervene must be served on the applicant either by mail or email at: 1300 Main Street, Houston, Texas 77002 or at
All timely, unopposed
Throughout the proceeding, additional information about the project will be available from the Commission's Office of External Affairs, at (866) 208-FERC, or on the FERC website at www.f
In addition, the Commission offers a free service called eSubscription which allows you to keep track of all formal issuances and submittals in specific dockets. This can reduce the amount of time you spend researching proceedings by automatically providing you with notification of these filings, document summaries, and direct links to the documents. For more information and to register, go to
Take notice that a virtual technical conference will be held on January 28, 2021, at 10:00 a.m. (EST) to discuss comments and protests filed in the proceeding captioned above.
At the technical conference, the parties to the proceeding should be prepared to discuss all issues set for technical conference as established in the November 30, 2020 Order (
Commission conferences are accessible under section 508 of the Rehabilitation Act of 1973. For accessibility accommodations, please email
All interested parties are invited to participate remotely. Staff will use the WebEx platform to view and present supporting documents related to this docket. For more information, please contact Brandon Henke at
Take notice that the following amended hydroelectric application has been filed with the Commission and is available for public inspection.
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j. This application is not ready for environmental analysis at this time.
k. Great River Hydro filed an application for a new license for the Wilder Hydroelectric Project No. 1892 on May 1, 2017. In the license application, Great River Hydro stated that it could not develop a complete licensing proposal for the project since many of the required environmental studies were not complete as of May 1, 2017. Great River Hydro indicated that it would amend the license application after completing additional field work, consultation, and analyses on the required studies. Great River Hydro filed material amendments to the final license application on December 7, 2020.
l.
Great River Hydro operates the project in coordination with its downstream Bellows Falls Project No. 1855 and Vernon Project No. 1904 and in a peaking mode. Average annual generation is approximately 156,303 MW-hours. Great River Hydro is proposing changes to project operation
m. In addition to publishing the full text of this notice in the
n. You may also register online at
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p. Final amendments to the application must be filed with the Commission no later than 30 days from the issuance date of the notice of ready for environmental analysis.
Take notice that the following hydroelectric application has been filed with the Commission and is available for public inspection:
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The Commission strongly encourages electronic filing. Please file comments, motions to intervene, and protests using the Commission's eFiling system at
The Commission's Rules of Practice and Procedure require all intervenors filing documents with the Commission to serve a copy of that document on each person whose name appears on the official service list for the project. Further, if an intervenor files comments or documents with the Commission relating to the merits of an issue that may affect the responsibilities of a particular resource agency, they must also serve a copy of the document on that resource agency.
k.
On July 16, 2020, the Commission issued an order approving a partial transfer of the license for the project from PacifiCorp to PacifiCorp and the
Also included in the November 17 filing was a Memorandum of Agreement entered into by PacifiCorp, the Renewal Corporation, the Karuk Tribe, the Yurok Tribe, and the states of California and Oregon indicating the parties' support for the new transfer proposal to be filed by January 16, 2021.
With PacifiCorp's consent and technical support, the Renewal Corporation will act as the proponent of the surrender application and is authorized to act as the Commission's non-federal representative in ongoing consultations.
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m. Individuals desiring to be included on the Commission's mailing list should so indicate by writing to the Secretary of the Commission.
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Take notice that on December 11, 2020, Columbia Gas Transmission, LLC, 700 Louisiana Street, Houston, Texas 77002-2700, filed in Docket No. CP21-17-000 a prior notice request pursuant to section 157.205 and 157.216 of the Commission's regulations under the Natural Gas Act, for authorization to abandon 9 injection/withdrawal wells and associated pipelines and appurtenances, located in its Wellington Storage Field in Lorain and Medina Counties, Ohio (2021 Wellington Well Abandonments Project).
Specifically, Columbia proposes to plug and abandon wells 7779, 8907, 8908, 8909, 8968, 9060, 9031, 9121, and 9309, and their associated pipelines. Columbia asserts that plugging and abandoning these wells will reduce integrity risk in alignment with the PHMSA Storage Final Rule. Columbia states that there will be no change to the existing boundary, total inventory, reservoir pressure, reservoir and buffer boundaries, or the certificated capacity of the Wellington Storage Field as a result of these abandonments, therefore will have no impact on Columbia's existing customers or affect Columbia's existing storage operations, all as more fully set forth in the application which is on file with the Commission and open to public inspection.
The filing is available for review on the Commission's website web at
Any questions concerning this application should be directed to Sorana Linder, Director, Modernization & Certificates, Columbia Gas Transmission, LLC, 700 Louisiana Street, Suite 700, Houston, Texas 77002-2700, at (832) 320-5209 or
Any person or the Commission's staff may, within 60 days after issuance of the instant notice by the Commission, file pursuant to Rule 214 of the Commission's Procedural Rules (18 CFR 385.214) a motion to intervene or notice of intervention and pursuant to section 157.205 of the regulations under the NGA (18 CFR 157.205), a protest to the request. If no protest is filed within the time allowed therefore, the proposed activity shall be deemed to be authorized effective the day after the time allowed for filing a protest. If a protest is filed and not withdrawn within 30 days after the allowed time for filing a protest, the instant request shall be treated as an application for authorization pursuant to section 7 of the NGA.
Pursuant to section 157.9 of the Commission's rules, 18 CFR 157.9, within 90 days of this Notice the Commission staff will either: Complete its environmental assessment (EA) and place it into the Commission's public record (eLibrary) for this proceeding; or issue a Notice of Schedule for Environmental Review. If a Notice of Schedule for Environmental Review is issued, it will indicate, among other milestones, the anticipated date for the Commission staff's issuance of the EA for this proposal. The filing of the EA in the Commission's public record for this proceeding or the issuance of a Notice of Schedule for Environmental Review will serve to notify federal and state agencies of the timing for the completion of all necessary reviews, and
Persons who wish to comment only on the environmental review of this project should submit an original and two copies of their comments to the Secretary of the Commission. Environmental commenter's will be placed on the Commission's environmental mailing list and will be notified of any meetings associated with the Commission's environmental review process. Environmental commenter's will not be required to serve copies of filed documents on all other parties. However, the non-party commenters, will not receive copies of all documents filed by other parties or issued by the Commission and will not have the right to seek court review of the Commission's final order.
The Commission strongly encourages electronic filings of comments, protests and interventions in lieu of paper using the eFile link at
Environmental Protection Agency.
Notice.
On August 20, 2020, the Environmental Protection Agency (EPA) received from the Governor of the State of Florida a complete program submission to assume regulating discharges of dredged or fill material into waters within the jurisdiction of the State in accordance with Clean Water Act (CWA) section 404(g-l). Receipt of the package initiated a 120-day statutory review period. After careful review of the package submitted, as well as consideration of comments submitted on the package by the U.S. Fish and Wildlife Service (USFWS), the National Marine Fisheries Service (NMFS), and the U.S. Army Corps of Engineers (Corps), comments received during consultation with tribes, and over 3,000 comments received from the public, EPA has determined that the State of Florida has the necessary authority to operate a CWA Section 404 program in accordance with the requirements found in CWA section 404(g-l) and EPA's implementing regulations. Therefore, EPA has taken final action to approve Florida's assumption of the program.
Florida's program assumption will be applicable December 22, 2020.
Mr. Kelly Laycock, Oceans, Wetlands and Streams Protection Branch, USEPA Region 4, 61 Forsyth St. SW, Atlanta, GA 30303; telephone number: (404) 562-9262; email address:
The CWA established the Section 404 program, under which the Secretary of the Army, acting through the Chief of Engineers of the Corps, may issue permits for the discharge of dredged or fill material into waters of the United States as identified in the CWA. Section 404(g)(1) of the CWA provides states and tribes the option of submitting to EPA a request to assume administration of a CWA Section 404 program in certain waters within state or tribal jurisdiction.
The regulations establishing the requirements for the approval of state or tribal programs under section 404 of the CWA were published in the
The Corps generally retains CWA Section 404 permitting authority over waters of the United States within “Indian country” as that term is defined at 18 U.S.C. 1151, unless a tribe has assumed administration of a CWA Section 404 program within Indian country.
A state application to administer a Section 404 program must include the following: (a) A letter from the Governor of the state requesting program approval; (b) a complete program description as set forth in 40 CFR 233.11; (c) an Attorney General's statement or a statement from the attorney for those state or interstate agencies which have independent legal counsel, as set forth in 40 CFR 233.12; (d) a Memorandum of Agreement with the EPA Regional Administrator, as set forth in 40 CFR 233.13; (e) a Memorandum of Agreement with the Secretary of the Army, as set forth in 40 CFR 233.14; and (f) copies of all applicable state statutes and regulations, including those governing applicable state administrative procedures. 40 CFR 233.10.
On September 16, 2020, EPA published a
All documents in the docket are listed on the
Environmental Protection Agency (EPA).
Notice of availability for public comment.
The National Defense Authorization Act for Fiscal Year 2020 (FY 2020 NDAA) was signed into law on December 19, 2019. Section 7361 of the FY 2020 NDAA directs the U.S. Environmental Protection Agency (EPA) to publish interim guidance on the destruction and disposal of perfluoroalkyl and polyfluoroalkyl substances (PFAS) and materials containing PFAS. The EPA is releasing the interim guidance for public comment. The guidance provides information on technologies that may be feasible and appropriate for the destruction or disposal of PFAS and PFAS-containing materials. It also identifies needed and ongoing research and development activities related to destruction and disposal technologies, which may inform future guidance.
Comments must be received on or February 22, 2021.
You may send comments, identified by Docket ID No EPA-HQ-OLEM-2020-0527, by any of the following methods:
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Out of an abundance of caution for members of the public and our staff, the EPA Docket Center and Reading Room are closed to the public, with limited exceptions, to reduce the risk of transmitting COVID-19. Our Docket Center staff will continue to provide remote customer service via email, phone, and webform. We encourage the public to submit comments via
Carlos Pachon, TIFSD, OSRTI, OLEM, 5023P, Environmental Protection Agency, 1200 Pennsylvania Ave. NW; email address,
This interim guidance provides a summary of EPA's current knowledge of technologies for destruction or disposal of PFAS and PFAS-containing materials. This information may be useful to EPA staff, other federal agencies, states, tribes, and local governments, the public, including environmental and public interest groups, as well as commercial and industry groups.
The liquidation of the assets for each receivership has been completed. To the extent permitted by available funds and in accordance with law, the Receiver will be making a final dividend payment to proven creditors.
Based upon the foregoing, the Receiver has determined that the continued existence of the receiverships will serve no useful purpose. Consequently, notice is given that the receiverships shall be terminated, to be effective no sooner than thirty days after the date of this notice. If any person wishes to comment concerning the termination of any of the receiverships, such comment must be made in writing, identify the receivership to which the comment pertains, and be sent within thirty days of the date of this notice to: Federal Deposit Insurance Corporation, Division of Resolutions and Receiverships, Attention: Receivership Oversight Department 34.6, 1601 Bryan Street, Dallas, TX 75201.
No comments concerning the termination of the above-mentioned receiverships will be considered which are not sent within this time frame.
12 U.S.C. 1819.
Board of Governors of the Federal Reserve System.
The Board of Governors of the Federal Reserve System (Board) is adopting a proposal to extend for three years, with revision, the Reports of Deposits (FR 2900, FR 2915; OMB No. 7100-0087). The revisions to the weekly collection of the FR 2900 are effective for the report as-of-date April 12, 2021. The revisions to the FR 2915 are applicable for the report as-of-date June 21, 2021. The quarterly collection of the FR 2900 and the FR 2910a are discontinued as of January 1, 2021. The final quarterly submission of the FR 2900 is for the as-of-date December 21, 2020, while the last FR 2910a was submitted on June 30, 2020. The FR 2930 is also being discontinued, effective January 31, 2021; the last filing of this report is for January 14, 2021.
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.
Office of Management and Budget (OMB) Desk Officer—Shagufta Ahmed—Office of Information and Regulatory Affairs, Office of Management and Budget, New Executive Office Building, Room 10235, 725 17th Street NW, Washington, DC 20503, or by fax to (202) 395-6974.
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. Board-approved collections of information are incorporated into the official OMB inventory of currently approved collections of information. The OMB inventory, as well as copies of the PRA Submission, supporting statements, and approved collection of information instrument(s) are available at
The data collected under the FR 2900 and FR 2915 reports are considered
Of the five comments, three were from depository institutions, one was from a trade association, and one was from a federal agency. The public comments sought clarification of the proposed changes, which the Board has addressed below and, in some cases, through amendments to the FR 2900 instructions described below.
One depository institution asked for more information on the reporting requirements for U.S. branches and agencies of foreign banks. As noted in the proposal, the Board plans to maintain its current practice of requiring banking Edge and agreement corporations and U.S. branches and agencies of foreign banks to report weekly on the FR 2900, regardless of size, because the deposit flows of these institutions are large enough and different enough from those of other depository institutions that weekly reporting of data is needed to support the construction of monetary aggregates.
Another depository institution requested clarification on the proposal's treatment of the reporting of demand deposit items: A.1.a, demand deposits due to depository institutions; A.1.b, demand deposits due to the U.S. government; and A.1.c, demand deposits due to other. The Board will discontinue collecting items A.1.a and A.1.b, and will renumber and rename A.1.c to “A.1, Demand deposits due to the public (excluding demand deposits due to depository institutions and demand deposits due to the U.S. government).”
The third depository institution requested clarification of the effective date of the proposed changes. The effective dates of the proposed changes vary by report form and are detailed above and in the Proposed Revisions section of the Supporting Statement for the Reports of Deposits that accompanied the Board's request for public comment.
The fourth comment letter was from a trade association. The commenter provided one suggestion and made four requests for clarification on the proposal. The commenter suggested the Board do more to align items reported on the FR 2900, FR Y-9C, and FR 2886b reports, as well as on the Call Reports, to reduce burden on reporters. In the development of the proposal, the Board evaluated the interaction of the proposed changes to the FR 2900 with other report forms. The Board did not find it appropriate, however, to continue to collect items on the FR 2900 that are no longer needed for the Board's purposes, even if discontinuing those items led to some lack of alignment with other report forms, such as the Call Report. The same commenter also asked the Board to amend the FR 2900 instructions to include guidance on how to report retail sweep arrangements. The final version of the FR 2900 instructions includes such guidance. The commenter also requested that the Board specify whether personal or nonpersonal ineligible acceptances and obligations issued by affiliates and maturing in more than seven days should be included on the proposed annual item E.1 Reservable Liabilities. The instructions have been amended to specify that only the nonpersonal portion of ineligible acceptances and obligations issued by affiliates and maturing in more than seven days should be included. The commenter also sought confirmation on the treatment of savings deposits in Regulation CC (Availability of Funds and Collection of Checks, 12 CFR part 229) as a result of the recent amendments to Regulation D. Because Regulation CC continues to exclude accounts described in 12 CFR 204.2(d)(2) from the Regulation CC “account” definition, the recent amendments to Regulation D did not result in savings deposits (accounts described in 12 CFR 204.2(d)(2)) being covered by Regulation CC. Lastly, the commenter requested that the Board clarify its expectations of reporters for explaining movements in data, which the commenter noted can be very burdensome. The Board continues to expect Federal Reserve System staff to work with reporters to explain movements in data and submit revisions if necessary to ensure data quality while remaining sensitive to minimizing such requests where feasible.
The fifth and final comment was from a U.S. government agency. The agency raised concerns that the elimination of total transaction accounts, deductions from transaction accounts, and ineligible acceptances and obligations issued by affiliates and maturing in seven days from the FR 2900 would affect their data production. These concerns have been addressed.
The Board has also considered the continued collection of FR 2900 reports from bankers' banks and corporate credit unions (CCUs).
The notificants listed below have applied under the Change in Bank Control Act (Act) (12 U.S.C. 1817(j)) and § 225.41 of the Board's Regulation Y (12 CFR 225.41) to acquire shares of a bank or bank holding company. The factors that are considered in acting on the applications are set forth in paragraph 7 of the Act (12 U.S.C. 1817(j)(7)).
The 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 January 6, 2021.
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Board of Governors of the Federal Reserve System (Board) and Federal Deposit Insurance Corporation (FDIC).
Final guidance.
The Board and the FDIC (together, the agencies) are adopting this final guidance for the 2021 and subsequent resolution plan submissions by certain foreign banking organizations (FBOs). The final guidance is meant to assist these firms in developing their resolution plans, which are required to be submitted pursuant to Section 165(d) of the Dodd-Frank Wall Street Reform and Consumer Protection Act (Dodd-Frank Act). The final guidance reflects a number of changes to the proposal in response to comments received by the agencies and further analysis by the agencies. The scope of application of the final guidance is FBOs that are Category II firms according to their combined U.S. operations under the Board's tailoring ruleand are required to have a U.S. intermediate holding company (IHC) under the Board's Regulation YY (the Specified FBOs) as published in 84 FR 59032 (November 1, 2019). In addition to the three firms(Barclays PLC, Credit Suisse Group AG, and Deutsche Bank AG (the Proposed FBOs) that would have been within the scope of application under the methodology utilized in the proposal, one additional firm, Mitsubishi UFJ Financial Group, Inc. (MUFG), is within the scope for application of the final guidance at the time of its issuance. Consequently, MUFG will have a transition period to consider the application of the final guidance to its resolution plan submission, as further described below. The final guidance describes the agencies' expectations regarding a number of key vulnerabilities in plans for an orderly resolution under the U.S. Bankruptcy Code (
The final guidance is available on December 22, 2020.
Section 165(d) of the Dodd-Frank Act
The goal of the Dodd-Frank Act resolution planning process is to help ensure that a covered company's failure would not have serious adverse effects on financial stability in the United States. Specifically, the resolution planning process requires covered companies to demonstrate that they have adequately assessed the challenges that their structures and business activities pose to an orderly resolution and that they have taken action to address those issues. For FBOs, the resolution planning process focuses on their U.S. subsidiaries and operations.
The agencies recognize that the preferred resolution outcome for many FBOs is a successful home country resolution using a single point of entry (SPOE) resolution strategy where U.S. material entities are provided with sufficient capital and liquidity resources to allow them to stay out of resolution proceedings and maintain continuity of operations throughout the parent's resolution. However, because support from the foreign parent in stress cannot be ensured, the Rule provides that the U.S. resolution plan for foreign-based covered companies should specifically address a scenario where the U.S. operations experience material financial distress, and the plan should not assume that the covered company takes resolution actions outside the United States that would eliminate the need for any U.S. subsidiaries to enter resolution proceedings.
Implementation of the Rule has been an iterative process aimed at strengthening the resolution planning capabilities of financial institutions subject to the Rule. The final guidance is based on the
Several developments inform the final guidance:
• The agencies' consideration of comments to the proposed guidance (as defined below);
• The agencies' review of certain FBOs' 2018 resolution plans and the issuance of individual letters communicating the agencies' views on and shortcomings contained in the 2018 resolution plans filed by the firms subject to the 2018 FBO guidance (2018 feedback letters);
• Revisions to the content related to payment, clearing, and settlement (PCS) activities and derivatives and trading activities in the updated guidance for the resolution plan submissions by the eight largest, most complex U.S. banking organizations in February 2019 (2019 domestic guidance);
• The 2019 amendments to the Rule (2019 Rule revisions), which included the clarification that FBOs should not assume that its foreign parent company takes resolution actions outside of the United States that would eliminate the need for any U.S. subsidiaries to enter into resolution proceedings;
• An analysis of the current risk profiles of the large, complex FBOs subject to resolution planning requirements.
The preamble to the 2019 Rule revisions indicated that the agencies would make any future resolution guidance available for comment,
Under the 2019 Rule revisions, each Specified FBO will be a triennial full filer and will be required to submit a resolution plan every three years, alternating between a full resolution plan and a targeted resolution plan. The 2019 Rule revisions require all triennial full filers to submit a targeted resolution plan on or before July 1, 2021, followed by a full resolution plan in 2024. In addition, the agencies indicated in the 2019 Rule revisions that they would strive to provide final general guidance at least a year before the next resolution
On May 6, 2020, the agencies extended the 2021 resolution plan submission date for Category II and III firms, including those firms who are currently Specified FBOs, from July 1 to September 29.
The 2018 feedback letters also noted the importance of the agencies' engagement with non-U.S. regulators. The Specified FBOs are subject to their home country resolvability frameworks, in addition to section 165(d) of the Dodd-Frank Act and the Rule. Resolution of the U.S. operations of a firm domiciled outside the United States with significant global activities (
In March 2020, the agencies invited public comment on the proposed guidance, which was proposed to apply beginning with the subject firms' 2021 resolution plan submissions. The proposed guidance began with a description of the proposed scoping methodology and was then organized into eight substantive areas, consistent with the 2018 FBO guidance. These areas were: Capital, liquidity, governance mechanisms, operational, branches, group resolution plan, legal entity rationalization and separability, and derivatives and trading activities. The proposed guidance described the agencies' proposed expectations for each of these areas.
The proposal was largely consistent with the 2018 FBO guidance and the 2019 domestic guidance. Accordingly, the agencies expected that the Proposed FBOs had already incorporated significant aspects of the proposed guidance into their resolution planning. With respect to the 2019 domestic guidance, the proposed guidance differed in certain respects, given the circumstances under which a foreign-based covered company's U.S. resolution plan is most likely to be relevant. The proposal was tailored for large, complex FBOs as compared to the U.S. global systemically important banks (G-SIBs) to account for differences between U.S. G-SIBs' and FBOs' U.S. footprints and operations. The proposal updated the PCS and derivatives and trading activities areas of the 2018 FBO guidance to reflect the agencies' review of certain FBOs' 2018 resolution plans and revisions contained in the 2019 domestic guidance. It also made minor clarifications to certain areas of the 2018 FBO guidance in light of the 2019 Rule revisions. In general, the proposed revisions to the guidance were intended to streamline the firms' submissions and to provide additional clarity. In addition, the proposed guidance would have consolidated all guidance applicable to the Proposed FBOs into a single document, which would provide the industry and public with one source of applicable guidance to which to refer.
The agencies invited comments on all aspects of the proposed guidance. The agencies also specifically requested comments on a number of issues, including whether the topics in the proposed guidance represented the key vulnerabilities of the covered companies in resolution, whether the proposed scope of applicability was appropriate, and whether the proposed guidance was sufficiently clear.
The agencies received and reviewed seven comment letters on the proposed guidance. Commenters included various financial services trade associations, a financial market utility, and two FBOs. In addition, the agencies met with industry representatives and FBOs at their request to discuss issues relating to the proposed guidance.
Most commenters suggested that the proposed guidance should be further tailored for the Proposed FBOs. They asserted that these firms have reduced the size and systemic risk profiles of their U.S. operations since resolution guidance was originally issued, and the guidance should be commensurately streamlined. Therefore, commenters questioned the appropriateness of issuing guidance to the Proposed FBOs—which they noted were Category III firms, as calculated using the assets and activities of each firm's top tier U.S. intermediate holding company—that would be similar to the guidance provided to the U.S. G-SIBs, which are Category I covered companies. Commenters argued that, in some cases, the proposed guidance was even more expansive than the guidance issued to the U.S. G-SIBs. Certain commenters also stated that the proposal failed to articulate a clear distinction in the expectations applicable to Category I firms and to Category II/III firms. In addition, commenters asserted that the proposal, if finalized, would have resulted in disparate treatment among firms in Category II and Category III.
Some commenters disagreed with the proposal's view on resolution planning for the Proposed FBOs, which these commenters described as narrowly focused on the resolution of U.S. operations independent of home country measures or foreign parent support. The commenters noted that these firms have been subject to extensive home country frameworks,
Some commenters cited prior comments by the Vice Chair for Supervision of the Board in which he encouraged host regulators to recognize their interests in the success of the foreign parent company's SPOE strategy and to provide further flexibility for the parent to move resources as necessary within the organization. The commenters offered resource pre-placement requirements for FBOs, which exceed those required by similarly sized U.S. firms, as an example of how the proposed guidance would be inconsistent with these principles.
The commenters generally opposed the proposed use of the second methodology (method 2) of the G-SIB surcharge framework as the scoping methodology for the proposal. The commenters made a number of assertions about the proposed scoping methodology, including:
• Method 2 does not accurately reflect the reduced systemic risk of the Proposed FBOs due to shortcomings in the metric as applied to firms other than the U.S. G-SIBs. As a result, the method 2 scores for the Proposed FBOs are inappropriately inflated.
• Method 2 was not intended to be applied to FBOs as a scoping methodology, but rather was designed to calculate the G-SIB capital surcharge.
• Using method 2 as the scoping methodology for the guidance would be inconsistent with the approach taken by the agencies to use the tailoring framework to determine resolution plan submission requirements, especially since the agencies previously rejected using the G-SIB surcharge framework for that purpose.
Some commenters suggested a number of alternatives to method 2 as the scoping methodology. One suggestion was to use the tailoring categories established for enhanced prudential standards, specifically having the proposal only apply to Category II firms, as calculated using the assets and activities of each firm's top tier U.S. intermediate holding company. Two commenters suggested, as an alternative, that the agencies use a modified version of method 2 or method 1 G-SIBs' surcharge scores.
Several commenters asserted that the proposed guidance for PCS services raised issues of extraterritoriality. They argued that the PCS guidance regarding non-U.S. affiliates should be addressed as part of the group resolution planning process or supervision and any related information request would be outside the scope of the Title I resolution plan requirements. They also proposed that the agencies obtain this information through home-host supervisor cooperation. Commenters also argued that the proposed PCS expectations were even more extensive than the guidance provided to the U.S. G-SIBs on this topic.
One commenter supported certain portions of the PCS services section, but also suggested changes, including aligning the guidance with certain expectations of the European Banking Union's resolution authority, enhancing communication strategies, and clarifying terms used in the proposed guidance.
A number of comments concerning the proposed derivatives guidance were similar to those made for the PCS section in asserting that the proposed information requests presented concerns of extraterritoriality and were outside the scope of the Title I resolution plan requirements. Commenters argued that the proposal called for strategies regarding and data on the activities of non-U.S. affiliates and non-U.S. transactions. They noted that these items are generally addressed in home country resolution plans or supervision and suggested that the related information could be requested from home country regulators. Some commenters maintained that the proposed guidance on derivatives was broader than the guidance issued to the U.S. G-SIBs and should be tailored for the Proposed FBOs. For example, the proposal would have established expectations for non-derivatives trading activities, such as securities financing transactions.
A few commenters provided views concerning contractually binding mechanisms (CBMs), which are intended to ensure that sufficient capital and liquidity are provided to material entity subsidiaries in a timely manner. These commenters generally agreed that the agencies should continue to allow firms flexibility to create support arrangements that work best for their structures and global and U.S. resolution plans. They asserted that, accordingly, the guidance should continue to focus on the need to mitigate the risks of creditor challenges and on how well the strategy selected by the firm satisfies the policy objectives of the agencies, rather than specifying a particular mechanism.
The agencies received a number of comments on the capital and liquidity sections of the proposed guidance. With regard to the capital section of the proposed guidance, commenters argued that the proposal included expectations that are duplicative of existing capital requirements and suggested removing the guidance on resolution capital adequacy and positioning (RCAP) from the final guidance. Most of these commenters asserted that streamlining the multiple capital measures would reduce burden on the firms. Further, two commenters asserted that the proposal would have reduced the flexibility for firms to position their capital most effectively in stress. With regard to the liquidity section of the proposed guidance, commenters suggested there is redundancy between the proposal and existing regulatory requirements and also recommended removing the guidance on resolution liquidity adequacy and positioning (RLAP) from the final guidance.
After considering the comments, conducting additional analysis, and further assessing the business and risk profiles of the U.S. operations of large and complex FBOs, the agencies are issuing final guidance that includes certain modifications and clarifications. In particular, the scope, capital, liquidity, governance mechanisms, PCS, and derivatives and trading activities sections of the final guidance reflect changes from the proposed guidance. Other sections, such as group resolution plan, and sub-sections such as management information systems, qualified financial contracts (QFCs), and mapping of branch activities, were determined to be duplicative of existing regulatory requirements and accordingly, have been eliminated from the guidance. The intent of these changes is to clarify expectations, more closely align expectations with the current business and risk profiles of the Specified FBOs' U.S. operations, and recognize that the preferred resolution strategy for the Specified FBOs is a successful home country resolution. The agencies are also eliminating expectations that relate to information
The final guidance is not meant to limit firms' consideration of additional vulnerabilities or obstacles that might arise based on a firm's particular structure, operations, or resolution strategy and that should be factored into the firm's submission. Moreover, the final guidance does not contain certain expectations in the proposed guidance and in the 2018 FBO guidance, including certain expectations relating to capital, liquidity, governance mechanisms, PCS, and derivatives and trading activities. The agencies do not expect that the Specified FBOs' resolution plans will continue to address the elements that have been removed from the guidance. However, the agencies note that the Specified FBOs' resolution plans, like the plans for all covered companies, are still required to meet all of the informational requirements of the Rule notwithstanding these changes to the guidance.
The agencies note that commenters described certain expectations that are set forth in the guidance as “requirements.” The agencies are clarifying that the final guidance does not have the force and effect of law. Rather, the final guidance outlines the agencies' supervisory expectations regarding each subject area covered by the final guidance.
The agencies received numerous comments objecting to the scope of application of the proposed guidance, which proposed using the method 2 G-SIB surcharge framework
Commenters suggested that the agencies consider alternative scoping methodologies, including those that were discussed in the proposal's preamble. Some commenters suggested that the agencies adopt a scope based on the Board's tailoring categories, with some commenters recommending that the guidance apply only to firms subject to Category II standards while others recommended that the final guidance should be similar to expectations for domestic firms subject to Category II and III standards. Other commenters suggested different potential options to modify or replace the proposed method 2 G-SIB surcharge framework, such as using method 1 G-SIB surcharge scores, that the commenters asserted would more appropriately balance the agencies' guidance expectations with the actual risk profile of the Proposed FBOs. Even if an alternative scoping methodology were adopted, some commenters asked the agencies to consider tailoring the guidance to what they viewed as the Proposed FBOs' reduced risk and stronger capital and liquidity positions, and recommended that the final guidance not introduce new expectations beyond those already in effect.
In their consideration of the commenters' feedback, the agencies have sought to align resolution plan supervisory expectations with the current business and risk profiles of the Specified FBOs' U.S. operations through the simple, transparent, and predictable mechanism of the Board's tailoring framework. The agencies also acknowledge that relevant resolution plan information can be obtained via other means, such as through engagement with home country regulators and supervisory information sharing. The agencies appreciate the analyses provided by the commenters that compared the operations of U.S. G-SIBs to the reduced U.S. footprint of Proposed FBOs with large U.S. operations. The agencies continue to believe that the scope of heightened resolution planning expectations applicable to FBOs should align with the Specified FBOs' systemic risk profile and relevant resolution challenges, and the final guidance should be consistent with the principles of national treatment and equality of competitive opportunity.
The agencies acknowledge commenters' meaningful input on certain methodological traits in the method 2 G-SIB surcharge framework, in particular the STWF factor weight, which could distort the liquidity risk and systemic relevance of FBOs relative to U.S. G-SIBs. Liquidity risk is just one of several important factors in a resolution scenario, and the measure of liquidity risk should not solely determine scoping of the guidance; rather, scoping should be determined holistically. Therefore, the final guidance applies to FBOs that are subject to Category II standards according to their combined U.S. operations pursuant to the Board's tailoring rule
Using the tailoring categories in this context also will promote uniform scoping between resolution expectations and regulatory requirements. As stated in the preamble to the Rule, the agencies believe that the risk-based indicators identified in the Board's tailoring rule are an effective means of dividing firms into groups for the purposes of determining the frequency and informational content of resolution plans. The indicators-based approach for application of Category II, III, and IV standards provides a simple framework
Size and operational complexity are also factors in the decision to apply the guidance to FBOs subject to Category II standards. As indicated in the preamble to the Board's tailoring rule, the failure or distress of the U.S. operations of a FBO that is subject to Category II standards could impose significant costs on the U.S. financial system and economy. In addition, increased levels of cross-jurisdictional activity, an indicator for Category II firms, could increase the operational complexity of a resolution, as it may be more difficult to resolve or unwind a firm's positions due to the involvement of multiple jurisdictions and regulatory authorities. As such, FBOs subject to Category II standards merit the application of more detailed expectations than those FBOs that are smaller or that do not share the same indicators of operational risk. The agencies also believe this modification to the scope appropriately focuses on the largest and most complex FBOs with U.S. IHCs without losing the focus on cross-jurisdictional activities.
While the proposal relied only to a limited extent on the Board's tailoring rule for scoping the proposed guidance—noting that the tailoring categories were developed to determine application of a broad range of enhanced prudential standards and were not explicitly focused on determining which covered companies should be subject to more detailed resolution planning guidance—the agencies have concluded that the benefits of employing the tailoring categories—clear, predictable scoping based on publicly reported quantitative data—outweigh any concerns related to using them for this purpose.
Consistent with the Rule, the final guidance takes into account a Specified FBO's entire U.S operations, including branches and agencies (
Finally, while the method 1 G-SIB surcharge score methodology could potentially address the concerns raised on STWF, the agencies believe the risk-based indicator approach in the Board's tailoring rule further simplifies application of the guidance.
The proposed guidance did not describe how the guidance would be applied to FBOs that become covered by its scope, but it did request comment on the methodology and process for determining the FBOs to which the guidance should apply, including whether the agencies should specify an implementation period for any FBOs that are designated as Specified FBOs under the final guidance. Some commenters requested that the agencies provide clarity on a transition period for firms that may newly fall under the scope of the guidance, and, conversely, on an exit process for firms that may no longer be covered.
To provide certainty to FBOs, the final guidance includes transition periods for Specified FBOs that were not previously within the scope of the 2018 FBO guidance and for firms that become Specified FBOs after December 22, 2020. A firm that is currently a Specified FBO, but was not previously the subject of guidance for its most recent resolution plan, will not be expected to have taken the final guidance into consideration in developing its targeted plan submission due in 2021. Rather, such a firm will be expected to consider the final guidance in developing its next full resolution plan submission, so long as the firm is a Specified FBO as of the submission date for that plan.
The final guidance also states that when an FBO becomes a Specified FBO, the final guidance will apply to the firm's next resolution plan submission with a submission date that is at least 12 months after the time the firm becomes a Specified FBO.
One commenter supported, and no commenters opposed, the agencies' proposal to consolidate prior guidance. Accordingly, the final guidance includes, as proposed, a section regarding the format, assumptions, and structure of resolution plans, which includes the aspects of previous guidance that remain applicable to resolution planning. In light of the changes in the final guidance to the areas of capital, liquidity, governance mechanisms, and separability, the agencies have reviewed the Frequently Asked Questions (FAQs) contained in the proposed guidance. The FAQs appended to the final guidance contain those FAQs that continue to be applicable to resolution planning, with appropriate modifications to reflect the changes to the final guidance. Consistent with the proposal, to the extent not incorporated in or appended to the final guidance, prior guidance
While the proposed guidance would have maintained substantially all of the expectations in the capital and liquidity sections that were included in the 2018 FBO guidance,
The final guidance does not include expectations for RCAP but retains proposed expectations for resolution capital execution need (RCEN). Several commenters requested that the agencies remove RCAP expectations from the guidance because of the reduced U.S. systemic risk of the Proposed FBOs and the potential redundancy with other regulatory provisions, such as the Board's rule on total loss absorbing capacity (TLAC). Commenters also suggested that RCAP expectations are redundant with TLAC requirements for local, bail-in-able resources to recapitalize an FBO's U.S. operations, and one commenter further asserted that RCAP constrains a firm's ability to position capital within the U.S. IHC entities in a manner that allows for the most flexibility and efficiency in a stress scenario. One commenter expressed support for maintaining expectations for RCEN. Some commenters also suggested that the guidance should take into account the positioning of financial resources in the United States in light of the positioning of resources in the firm's non-U.S. operations and that the agencies should reconsider expectations for resource preplacement within the United States to encourage more flexibility at the international level.
The final guidance does not include RCAP expectations concerning the appropriate positioning of capital and other loss-absorbing instruments among the U.S. IHC and its subsidiaries because existing TLAC requirements applicable to the U.S. IHC provide a backstop of resources that is appropriate to the size and complexity of the Specified FBOs. The final guidance, consistent with one commenter's recommendation, maintains the RCEN expectations regarding a methodology for periodically estimating the amount of capital that may be needed to support each U.S. IHC subsidiary after the U.S. IHC's bankruptcy filing. RCEN helps the firm and the agencies determine when the U.S. IHC is approaching a situation where it will not have sufficient resources to conduct a successful resolution.
Several commenters requested that the agencies reconsider requirements and expectations for resource preplacement within the United States, such as internal TLAC requirements applicable to the U.S. IHC, that are not set by the guidance. As these requirements and expectations are outside the scope of the guidance, the final guidance does not address these requests.
The final guidance retains the proposed expectations for resolution liquidity execution need (RLEN) but does not include expectations for liquidity capabilities and RLAP. Several commenters requested that the agencies remove RLAP expectations from the guidance, in consideration of factors including the reduced U.S. systemic risk of the Proposed FBOs and potential redundancy with other regulatory provisions, such as the Net Stable Funding Ratio (NSFR) and internal liquidity stress testing. One commenter suggested that the agencies conduct an assessment of the cumulative effect of liquidity and capital expectations and requirements, specifically between RLEN and NSFR and between RLAP and TLAC. Another commenter suggested integrating the RLAP liquidity expectations in the proposal into regulatory liquidity requirements via the rulemaking process. This commenter also expressed concern about the potential additive requirements and expectations of RLAP relative to the NSFR. Finally, one commenter expressed support for maintaining RLEN expectations.
Like the rationale for eliminating RCAP from the final guidance, because of the Specified FBOs' relatively simple U.S. legal entity structures and reduced risk profiles, the final guidance does not include RLAP expectations concerning the appropriate positioning of liquidity among the U.S. IHC and its subsidiaries. However, a firm's ability to reliably estimate and meet the liquidity needs of the U.S. IHC and its subsidiaries prior to, and in, resolution remains important to the execution of a Specified FBO's U.S. resolution strategy, as reflected in the Rule.
The agencies do not believe there will be significant overlap between RLEN expectations and the NSFR rule because the regulation implicates long-term liquidity risks and stability of funding sources, while the guidance focuses on liquidity needs during a resolution scenario, which are shorter-term in nature. Further, liquidity needs in a resolution scenario may be driven by highly idiosyncratic factors. These factors can be incorporated into a firm's RLEN framework, but would not necessarily be addressed in a standardized measure like the NSFR. The agencies' decision not to include expectations for RLAP in the final guidance obviates the need to analyze interaction between RLAP and TLAC. Separately, the suggestion to incorporate liquidity expectations into existing regulatory requirements is outside the scope of the current guidance-making.
The proposed guidance outlined an expectation for Proposed FBOs to develop governance playbooks that detail specific actions that the board of directors and senior management of U.S. non-branch material entities would take under the firm's U.S. resolution strategy. The expectations related to communication and escalation protocols were contingent on triggers, which are firm-defined financial metrics reflecting the U.S. IHC's financial condition. In addition, the proposed guidance called for playbooks to address, among other things, the fiduciary responsibilities of boards of directors, potential conflicts of interest, and employee retention policies. One commenter suggested that the agencies streamline playbook expectations to focus only on governance and escalation procedures as well as capabilities to produce key information and data that support timely and informed decision-making. The commenter argued that outlining details about specific decisions management would have to make would be of limited value given that resolution-related actions would be driven by the circumstances and market conditions present at the time of financial stress. The agencies are finalizing this aspect of the guidance as proposed as the agencies believe that the suggested additional information would have important value in a resolution scenario.
The agencies received no comments about the expectations in the proposed guidance regarding triggers. That said, recognizing that the preferred resolution outcome for the Specified FBOs is a successful home country resolution, the final guidance does not include expectations regarding triggers or escalation protocols based on the U.S. IHC's financial condition. The final guidance, however, retains the broader expectation that firms have in place mechanisms to ensure that timely communication and coordination occurs between and among the boards of the U.S. IHC, U.S. IHC subsidiaries, and the
Having a structure in place that facilitates the transmission of resources to an FBO's U.S. material entity subsidiaries and mitigates against potential legal challenges is an important component for resolution plans that contemplate the provision of such support. Neither the proposed guidance nor the Rule endorses a specific strategy for the provision of such support. Rather, under the proposal, firms would have been expected to (i) develop a mechanism for planned foreign parent support of U.S. non-branch material entities to meet those entities' liquidity needs and (ii) include in their resolution plan submissions analysis of potential challenges to planned foreign parent support and associated mitigants. Further, the proposal provided that if a plan anticipates the provision of capital and liquidity by a U.S. material entity (
Commenters urged against imposing specific requirements or expectations regarding CBMs and supported maintaining flexibility for firms to determine the particular form and structure of CBMs based on a firm's structure, resolution strategy, and global capital and liquidity planning needs. Commenters further recommended that the agencies evaluate CBMs based on their effectiveness in mitigating creditor challenges. One commenter suggested that the agencies' assessment of the effectiveness of various CBMs should take into consideration the nature of the Proposed FBOs, specifically that: (i) All of the Proposed FBOs in the proposed guidance have global SPOE strategies that do not contemplate the insolvency of the U.S. IHC or any other U.S. entity; (ii) internal TLAC requirements have been complied with and incentivize the firms to recapitalize their U.S. operations to avoid the costs, operational burdens, and other consequences associated with bankruptcy proceedings; and (iii) the Board has the authority to trigger the conversion of internal TLAC in the form of long-term debt into equity to recapitalize an IHC without the need for a U.S. bankruptcy proceeding. This commenter also argued that the agencies should provide a threshold for determining whether a CBM sufficiently mitigates the risk of creditor challenges that is materially lower than for U.S. BHCs for which a bankruptcy proceeding is a primary resolution strategy. This commenter also stated that the agencies had already been provided with substantial legal analyses supporting the workability of existing CBMs and urged the agencies to engage with the Proposed FBOs prior to providing specific requirements regarding CBMs.
One commenter cautioned that the proposed CBM guidance may impede capital and liquidity placed in the U.S. IHC from being returned to the parent for efficient deployment globally, and that a CBM developed only to support a U.S. resolution may trap financial resources in the IHC. Separately, another commenter requested that the agencies engage with the Proposed FBOs and consider alternative approaches to ensure the timely availability of capital and liquidity support. Suggestions included reducing or amending internal TLAC requirements, allowing use of internal TLAC to satisfy the demands of Comprehensive Capital Analysis and Review, and eliminating the requirement in the Rule that firms must assume the bankruptcy of a U.S. entity.
Consistent with the comments received, and to maintain flexibility for firms, the agencies are finalizing the guidance without including additional expectations regarding the use and structure of CBMs. This lack of specific, additional expectations related to CBMs should not be interpreted as an expression of the agencies' view on the feasibility of current support mechanisms. Additionally, no revisions have been made in response to a comment that urged the agencies to describe,
In addition, the final guidance removes the expectation for the resolution plan to include an analysis of the potential challenges to the planned foreign parent support to U.S. non-branch material entities, and the planned provision of capital and liquidity by a U.S. material entity to its U.S. affiliates prior to the U.S. IHC's bankruptcy filing. This approach gives due consideration to the arguments put forth by commenters that the Specified FBOs should have flexibility to determine the particular form and structure of the framework developed to support its particular resolution strategy and needs, that the preferred resolution outcome for the Specified FBOs is a successful home country resolution, and that internal TLAC resources are available for conversion to support IHC recapitalization outside of bankruptcy.
As a preliminary matter, the agencies note that the Rule requires full resolution plan submissions by foreign-based covered companies to include information on “the interconnections and interdependencies among the U.S. subsidiaries, branches, and agencies, and between those entities and . . . [a]ny foreign-based affiliate.”
The agencies acknowledge, however, that commenters' feedback that a non-U.S. affiliate's ability to maintain access to key FMUs and key agent banks to support indirect PCS relationships through non-U.S. affiliates may be addressed in the firm's group resolution plan or in other information provided to home country regulators. As such, expectations that Specified FBOs submit detailed information related to non-U.S. affiliates' support of their U.S. operations may be duplicative. In recognition of this feedback and in an effort to more closely align expectations with the business and risk profiles of the Specified FBOs' U.S. operations, the final guidance does not include expectations that firms provide information regarding indirect access to key FMUs and agent banks provided by non-U.S. branches and affiliates. As further suggested by commenters and consistent with prior statements by the agencies, the agencies expect to engage with the Specified FBOs and their home country authorities.
One commenter also recommended that the proposal recognize that many FMUs and agent banks do not implement bilateral SLAs for core clearing and custody services. The agencies have clarified the final guidance by adding `as applicable' to the relevant capability in the guidance text.
The agencies are finalizing these elements of the guidance as proposed. The expectations in the final guidance call for playbooks that address specifically how firms would maintain access to PCS services but that do not necessarily include a discussion of FMU rules around a member firm's default. The final guidance aims to provide firms flexibility in determining how they would best maintain access to PCS services in a stress scenario and to clarify that playbooks are not expected to include a scenario in which the firm loses access to an agent bank or FMU. The proposed guidance contained expectations for firms to engage with key external stakeholders and reflect any feedback received during such ongoing outreach, and the agencies are retaining those expectations in the final guidance. To the extent that certain playbook information may be addressed in other sections of the firm's submission, the firm may include a specific cross-reference to that content in the appropriate playbook. While the agencies are not expecting firms to model expected FMU behaviors, firms are expected to consider operational and financial resources that would be needed to respond to adverse actions and execute any contingency arrangement. In addition, given the joint nature of the resolution plan process, the final guidance, like the Rule, provides for incorporation of previously submitted resolution plan information by reference.
The comment suggesting that the agencies develop their own communication strategies for key stakeholders is not applicable to the
While expressing general support for the expectations in the proposed guidance related to PCS-related Liquidity Sources and Uses, a commenter suggested that the sentence related to “PCS Liquidity Sources” be revised from “various currencies” to “all currencies relevant to banks' participation” in FMUs, to be consistent with international expectations. The agencies are adopting this suggestion in the final guidance. The commenter also suggested that the final guidance clarify that firms should assess their key FMU and key agent bank liquidity needs in the aggregate so that firms account for the availability of funds across more than one key FMU or agent bank. Regarding intraday liquidity, this commenter suggested that the final guidance be amended to include additional specific expectations for playbooks beyond describing capabilities to control intraday liquidity inflows and outflows, and to identify and prioritize time-specific payments. The agencies are not adopting these suggestions in the final guidance to allow the Specified FBOs flexibility to tailor and streamline playbook content based on the actual profile of their PCS activities relevant to their U.S. operations.
The agencies received no comments regarding the management information systems (MIS) section of the proposed guidance. The expectations contained in the proposed guidance articulate general expectations for firms to have the requisite MIS capabilities to produce timely, accurate financial and risk data on a U.S. legal entity basis. The agencies determined that the expectations and capabilities are addressed in the Rule
The agencies received no comments regarding the managing, identifying, and valuing collateral section of the proposed guidance and are finalizing the section as proposed.
The agencies received no comments regarding the shared and outsourced services section of the proposed guidance and are finalizing the section as proposed.
The agencies received no comments regarding the QFC section of the proposed guidance, which sets forth expectations for firms to articulate their progress in implementing requirements regarding contractual stays in qualified financial contracts. However, the agencies are not including this sub-section in the final guidance due to the progress made by the Specified FBOs in complying with the QFC stay rules of the Board, the Office of the Comptroller of the Currency, and the FDIC.
The agencies received no comments regarding the branches section of the proposed guidance. However, the agencies are removing expectations from the final guidance that are viewed as duplicative to existing rules or repeat, without elaboration, components of the Rule. Specifically, mapping expectations for U.S. branches that are material entities are specified in the Rule.
The agencies received no comments regarding the group resolution section of the proposed guidance, which set forth expectations for firms to address how
The agencies received no comments regarding the legal entity rationalization and separability section of the proposed guidance. However, consistent with agencies' efforts to more closely align guidance expectations with the current business and risk profiles of the Specified FBOs' U.S. operations, the final guidance does not include the separability expectations, which would have suggested that firms identify discrete U.S. operations that would be sold or transferred in a resolution scenario. Given that the U.S. operations of the Specified FBOs are a subcomponent of a larger FBO, for which the preferred resolution approach is a home-country SPOE resolution, the agencies have found that the separability options within the United States are few and that their inclusion in resolution plans has yielded limited new insights. Moreover, the agencies expect that such information is obtainable through international collaboration with home country regulators. As such, the agencies have eliminated these expectations from the final guidance.
The agencies received a number of comments on the Derivatives and Trading Activities section of the proposed guidance. Overall, commenters supported the proposed elimination of the active and passive wind-down scenario analyses and rating agency playbooks, and recommended certain additional modifications and clarifications to streamline the resolution plan submissions and provide further clarity.
After reviewing the comments, the agencies have adopted final guidance that includes several adjustments to address matters raised by the commenters. Specifically, the final guidance does not include elements from the proposal related to derivatives and trading activities originated in the U.S. and booked directly to non-U.S. affiliates. Commenters argued that the derivatives guidance should not include U.S. derivatives and trading activities or prime brokerage customer account balances booked directly to non-U.S. affiliates because they are beyond the scope of the Rule and the information is better gathered through collaboration with home country regulators. Commenters suggested that the derivatives guidance focus solely on derivatives and trading activities and prime brokerage customer account balances that are booked to U.S. material entities and related to core business lines and critical operations.
As a preliminary matter, similar to the discussion in the PCS section of this preamble, the agencies note that the Rule requires full resolution plan submissions by foreign-based covered companies to include information “with respect to the subsidiaries, branches and agencies, and identified critical operations and core business lines, as applicable, that are domiciled in the United States or conducted in whole or material part in the United States.”
However, after considering commenters' views, and in an effort to more closely align expectations with the current business and risk profiles of the Specified FBOs, the final guidance does not include expectations concerning derivatives and trading activities that originate from U.S. entities but are booked into non-U.S. affiliates. Because the booking of U.S. derivatives and trading activities regularly occurs across jurisdictions and creates interconnections and interdependencies among and between a firm's U.S. entities and its non-U.S. affiliates, the agencies expect to coordinate with home country authorities to collect information about derivatives booking activities that occur across jurisdictions in order to understand any related risks to the execution of the firm's U.S. resolution strategy. This approach is consistent with the 2018 Title I feedback letters to some Specified FBOs, in which the agencies indicated their intent to engage with the FBO and home authorities regarding derivatives booking practices.
The agencies also have made several adjustments and clarifications in the final guidance to address other matters raised by the commenters. Commenters argued that the proposal inappropriately applied the derivatives guidance to non-derivatives trading activities (
Commenters also suggested that a Proposed FBO should be allowed to define linked non-derivatives trading positions based on its overall business and resolution strategy trading positions. The agencies agree with this comment, and the final guidance allows for linked non-derivatives trading positions to be defined based on the Specified FBO's overall business and resolution strategy. Finally, some commenters suggested that the scope for
Some commenters recommended the agencies adjust certain expectations that are not specified in the proposed guidance. The agencies have determined not to modify the guidance in these instances. For example, commenters stated that development of a plan for resolution of positions of non-U.S. affiliates is beyond the scope of the Rule. The agencies note, as described above, that the proposed guidance did not set out expectations that the Proposed FBOs develop a plan for the resolution of derivatives and trading activities booked to non-U.S. entities. The scope of the stabilization and de-risking strategy subsection applies only to U.S. derivatives portfolios booked to U.S. entities.
The agencies received comments related to tailoring derivatives expectations. For example, commenters suggested the segmentation analysis and analysis of de-risking strategy provisions of the proposal were neither warranted nor sufficiently clear for Proposed FBOs because their derivatives exposures are significantly smaller than those of U.S. G-SIBs. After considering multiple relevant factors, the agencies have not modified the guidance in response to these comments. The ability to identify, quickly and reliably, problematic derivatives positions and portfolios is foundational to minimizing uncertainty and estimating resource needs for an orderly resolution of a firm's U.S. entities. Further, in the event of material financial distress or failure, the resolvability risks related to a firm's U.S. derivatives and trading activities could be a key obstacle to the firm's orderly resolution of any U.S. IHC subsidiary with a derivatives portfolio. As a result, the final guidance confirms that a firm's plan should provide a detailed analysis of its strategy to stabilize and de-risk any derivatives portfolio of any U.S. IHC subsidiary that continues to operate after the U.S. IHC enters into a U.S. bankruptcy proceeding. The agencies also note that the portfolio segmentation subsection applies only to U.S. derivatives positions that are booked to U.S. entities.
Finally, commenters suggested tailoring the scope of applicability of the derivatives section using a threshold, such as the Volcker Rule's proprietary trading categories. The agencies do not believe that the compliance thresholds and the associated calculation methodology (total trading assets and liabilities) established under the Volcker Rule accurately capture the size and complexity of a firm's derivatives activities for resolution purposes and thus are an inappropriate scoping mechanism for the guidance. Therefore, the final guidance does not incorporate compliance thresholds, such as those established by the Volcker Rule.
The agencies received several general comments about the development of the proposed guidance. The agencies have considered these commenters' input but have made no modifications to the final guidance.
One commenter claimed that the agencies' proposed guidance did not reflect internationally agreed upon approaches to home and host authority responsibility with regard to resolution planning, with the proposal's continued emphasis on a separate U.S. strategy, which the commenter argued is largely duplicative of home country requirements. Other commenters criticized the proposed guidance for not reflecting any reliance on supervisory colleges and crisis management groups, or on the capital markets and resolution rules and requirements of the Securities and Exchange Commission, Financial Industry Regulatory Authority, or the Commodity Futures Trading Commission.
The agencies do not agree with these comments. Since the enactment of section 165(d) of the Dodd-Frank Act, the agencies have worked bilaterally and multilaterally with relevant domestic and foreign authorities and in various international fora to understand risks to the firms' orderly resolution under the U.S. Bankruptcy Code, as well as to share resolution planning expertise. In addition, the agencies have established resolution-related information-sharing arrangements with both domestic and foreign authorities in an effort to enhance the prospects for a successful cross-border resolution of the Specified FBOs. Moreover, the agencies note that both section 165(d) of the Dodd-Frank Act and the Rule require all large bank holding companies, including FBOs, to file resolution plans.
Another commenter encouraged the agencies to consider aligning their guidance with the resolution-related guidance issued by the European Single Resolution Board. The agencies recognize that international coordination in resolution-related matters is important to ensuring that home and host country regulators have sufficient understanding of the resolvability of internationally active financial companies. The purpose and general subject matter of the final guidance are generally consistent with those of the Single Resolution Board's Expectations for Banks. Both the final guidance and the Single Resolution Board document describe the respective authorities' expectations regarding a number of key vulnerabilities in resolution (
Other commenters suggested that the proposed guidance did not adequately recognize foreign parents as sources of strength to the U.S. operations of Proposed FBOs, but instead appeared to treat the non-U.S. parent and affiliates only as sources of risk for U.S. material entities. The agencies understand that the preferred resolution outcome for many Specified FBOs is a successful home country resolution using a SPOE resolution strategy where U.S. material entities are provided with sufficient capital and liquidity resources to allow them to stay out of resolution proceedings and maintain continuity of operations throughout the parent's resolution. The Rule balances this recognition with the concern that support from a foreign parent in stress cannot be ensured. The final guidance, in turn, lays out expectations that reflect a number of key vulnerabilities associated with an orderly resolution under the U.S. Bankruptcy Code.
Certain commenters suggested that the agencies streamline plan submissions to make the documents more actionable and reduce the time the agencies may need to review and challenge the submissions. These commenters also encouraged the agencies to leverage information provided by firms through existing bank supervision and exam processes to collect information relevant to the
Some commenters asserted that the proposed guidance exceeded the scope of the Rule or Title I of the Dodd-Frank Act, introduced definitions and expectations that were inconsistent with the Rule, and created issues of extraterritoriality and duplication of information that may already be covered under home country regulations. Some commenters also objected to expectations pertaining to the identification, assessment, or reporting of indirect relationships through non-U.S. affiliates, or risk transfer arrangements with non-U.S. affiliates. These comments are addressed in the individual sections of this preamble to which they relate.
Another commenter recommended modifying resolution guidance and requirements to emphasize firms maintaining resolution capabilities that remain available during business as usual. This comment generally aligns with the agencies' approach to resolution planning expectations, and the final guidance emphasizes that the Specified FBOs should have effective capabilities and well-developed plans. That said, the agencies do not believe that any specific revisions are necessary to respond to this comment; rather, the agencies will continue to deliberate how to ensure that resolution planning can be facilitated by and integrated into the firm's business-as-usual practices.
The agencies received several comments about the broader supervisory landscape related to resolution planning. Certain commenters recommended that the agencies, in addition to deepening home and host country regulatory relationships, engage bilaterally with the Proposed FBOs to clarify outstanding concerns about the resolvability of the firms' U.S. operations, as well as any concerns about the firms' reliance on home country resolution strategies.
These comments do not directly relate to the guidance and, as a result, the agencies are not making any changes to the final guidance. Relatedly, one commenter asked the agencies to clearly identify residual concerns with respect to each Proposed FBO and then tie resolution planning guidance to those concerns. The agencies expect that overall engagement and ongoing dialog and feedback with each of the Specified FBOs will continue to provide clarity on any outstanding concerns with respect to resolution capabilities. The agencies also note that the final guidance takes into consideration the agencies' experience in reviewing prior resolution plan submissions. No specific changes have been made to the final guidance in response to this comment.
One commenter requested that the agencies also incorporate that commenter's thoughts into future changes to guidance for U.S. G-SIBs, while another commenter argued for the removal of the Proposed FBOs from the Board's Large Institution Supervision Coordinating Committee (LISCC) portfolio. The final guidance does not apply to U.S. G-SIBs, who remain subject to heightened resolution plan supervisory expectations given their size and risk profile, and the composition of the LISCC portfolio of firms is similarly outside the scope of this final guidance. Accordingly, the agencies have not made any changes to the guidance to address these comments.
Certain provisions of the guidance contain “collection of information” provisions within the meaning of the Paperwork Reduction Act of 1995 (44 U.S.C. 3501-3521) (PRA). In accordance with the requirements of the PRA, the agencies may not conduct or sponsor, and a respondent is not required to respond to, an information collection unless it displays a currently valid Office of Management and Budget (OMB) control number. The agencies reviewed the final guidance and determined that it would revise the reporting provisions that have been previously approved by OMB under the Board's OMB control number 7100-0346 (Reporting Requirements Associated with Regulation QQ; FR QQ) and the FDIC's control number 3064-0210 (Reporting Requirements Associated with Resolution Planning). The Board has reviewed the final guidance under the authority delegated to the Board by OMB. The agencies' information collections will be extended for three years, with revision.
The proposed guidance stated that the proposed changes to the 2018 FBO guidance would not revise the reporting provisions that have been previously cleared by the OMB under the Board's control number 7100-0346 and the FDIC's control number 3064-0210. The agencies did not receive any comments on the PRA determination in the proposed guidance.
However, as indicated above, the final guidance includes certain modifications and clarifications to the proposed guidance. In particular, the scope, capital, liquidity, governance mechanisms, PCS, and derivatives and trading activities sections of the final guidance reflect changes from the proposal. Other sections or sub-sections, such as group resolution plan, management information systems, QFCs, separability, and mapping of branch activities, were determined not to be necessary as they are duplicative of existing regulatory requirements or not reflective of the Specified FBOs' current business models and accordingly have been eliminated from the guidance. The intent of these changes is to clarify expectations, more closely align expectations with the current business and risk profiles of the Specified FBOs' U.S. operations, and recognize that the preferred resolution strategy for the Specified FBOs is a successful home country resolution. The final guidance also eliminates expectations for information that, in the agencies' experience, may be obtained through other existing and effective mechanisms.
As a result of these changes, the final guidance reduces the existing estimated burden for a triennial full complex filer from 13,135 hours to 9,916 hours per year. This reduction is driven mainly by significant reductions in the burdens related to capital, liquidity, separability, and governance mechanisms. These burden savings are borne by the Proposed FBOs.
One FBO is no longer classified as a triennial full complex filer and thus
Historically, the Board and the FDIC have split the respondents for purposes of PRA clearances. As such, the agencies will split the change in burden as well. The FDIC has agreed to take the burden of the new triennial full complex filer and one Proposed FBO whereas the Board will take the burden for the remaining two Proposed FBOs. Specially, as a result of this split and these revisions, there will be a net decrease in the overall estimated burden of 6,438 hours for the Board and 6,587 hours for the FDIC. Therefore, the total Board estimated burden for its entire information collection (7100-0346) is 209,168 hours and the total FDIC estimated burden for its entire information collection (3064-0210) is 203,332 hours.
The following table presents only the change in the estimated burden hours, as amended by this final guidance, broken out by agency. The table does not include a discussion of the remaining estimated burden hours, which remain unchanged.
Section 165(d) of the Dodd-Frank Wall Street Reform and Consumer Protection Act (12 U.S.C. 5365(d)) requires certain financial companies to report periodically to the Board of Governors of the Federal Reserve System (the Federal Reserve or Board) and the Federal Deposit Insurance Corporation (the FDIC) (together the Agencies) their plans for rapid and orderly resolution in the event of material financial distress or failure. On November 1, 2011, the Agencies promulgated a joint rule implementing
This document is intended to provide guidance to certain foreign banking organizations (FBOs) that are required to submit Plans regarding development of their respective U.S. resolution strategies (Specified FBOs or firms). Specifically, the guidance applies to any FBO that is subject to Category II standards according to its combined U.S. operations in accordance with the Board's tailoring rule
When an FBO first becomes a Specified FBO,
The document is intended to assist these firms in further developing their U.S. resolution strategies. The document does not have the force and effect of law. Rather, it describes the Agencies' expectations and priorities regarding these firms' Plans and the Agencies' general views regarding specific areas where additional detail should be provided and where certain capabilities or optionality should be developed and maintained to demonstrate that each firm has considered fully, and is able to mitigate, obstacles to the successful implementation of their U.S. resolution strategy.
The Agencies are providing guidance to the Specified FBOs to assist their further development of a resolution plan for their U.S. operations for their 2021 and subsequent resolution plan submissions. This guidance for Specified FBOs builds upon the guidance issued in December 2018 for certain U.S.-based covered companies, taking into account the circumstances under which a U.S. resolution plan is most likely to be relevant for an FBO. The U.S. resolution plan for a Specified FBO would address a scenario where the U.S. operations experience material financial distress and the foreign parent is unable or unwilling to provide sufficient financial support for the continuation of U.S. operations, and at least the top tier U.S. Intermediate Holding Company (U.S. IHC) files for bankruptcy under Title 11, United States Code. Under such a scenario, the Plan should provide for the orderly resolution of the Specified FBO's U.S. material entities
In general, this document is organized around a number of key vulnerabilities in resolution (
Under the Rule, the Agencies will review the Plan to determine if it satisfactorily addresses key potential vulnerabilities, including those specified below. If the Agencies jointly decide that these matters are not satisfactorily addressed in the Plan, the Agencies may determine jointly that the Plan is not credible or would not facilitate an orderly resolution under the U.S. Bankruptcy Code.
The firm should have the capital capabilities necessary to execute its U.S. resolution strategy, including the model and estimation process described below.
To the extent required by the firm's U.S. resolution strategy, U.S. non-branch material entities need to be recapitalized to a level that allows for an orderly resolution. The firm should have a methodology for periodically estimating the amount of capital that may be needed to support each U.S. IHC subsidiary after the U.S. IHC bankruptcy filing (Resolution Capital Execution Need or RCEN). The firm's positioning of IHC total loss absorbing capacity (TLAC)
The firm's RCEN methodology should use conservative forecasts for losses and risk-weighted assets and incorporate estimates of potential additional capital needs through the resolution period,
The firm should have the liquidity capabilities necessary to execute its U.S. resolution strategy. In particular, the firm should have a methodology for estimating the liquidity needed after the U.S. IHC's bankruptcy filing to stabilize any surviving U.S. IHC subsidiaries and to allow those entities to operate post-filing, in accordance with the U.S. strategy (Resolution Liquidity Execution Need or RLEN).
The firm's RLEN methodology should:
(A) Estimate the minimum operating liquidity (MOL) needed at each U.S. IHC subsidiary to ensure those entities could continue to operate, to the extent relied upon in the U.S. resolution strategy, after implementation of the U.S. resolution strategy and/or to support a wind-down strategy;
(B) Provide daily cash flow forecasts by U.S. IHC subsidiary to support estimation of peak funding needs to stabilize each entity under resolution;
(C) Provide a comprehensive breakout of all inter-affiliate transactions and arrangements that could impact the MOL or peak funding needs estimates for the U.S. IHC subsidiaries; and
(D) Estimate the minimum amount of liquidity required at each U.S. IHC subsidiary to meet the MOL and peak needs noted above, which would inform the provision of financial resources from the foreign parent to the U.S. IHC, or if the foreign parent is unable or unwilling to provide such financial support, any preparatory resolution-related actions.
The MOL estimates should capture U.S. IHC subsidiaries' intraday liquidity requirements, operating expenses, working capital needs, and inter-affiliate funding frictions to ensure that U.S. IHC subsidiaries could operate without disruption during the resolution.
The peak funding needs estimates should be projected for each U.S. IHC subsidiary and cover the length of time the firm expects it would take to stabilize that U.S. IHC subsidiary. Inter-affiliate funding frictions should be taken into account in the estimation process.
The firm's forecasts of MOL and peak funding needs should ensure that U.S. IHC subsidiaries could operate through resolution consistent with regulatory requirements, market expectations, and the firm's post-failure strategy. These forecasts should inform the RLEN estimate,
For non-surviving U.S. IHC subsidiaries, the firm should provide analysis and an explanation of how the material entity's resolution could be accomplished within a reasonable period of time and in a manner that substantially mitigates the risk of serious adverse effects on U.S. financial stability. For example, if a U.S. IHC subsidiary that is a broker-dealer is assumed to fail and enter resolution under the Securities Investor Protection Act, the firm should provide an analysis of the potential impacts on funding and asset markets and on prime brokerage clients, bearing in mind the objective of an orderly resolution.
A firm should identify the governance mechanisms that would ensure that communication and coordination occurs between the boards of the U.S. IHC or a U.S. IHC subsidiary and the foreign parent to facilitate the provision of financial support, or if not forthcoming, any preparatory resolution-related actions to facilitate an orderly resolution.
In order to meet liquidity needs at the U.S. non-branch material entities, the firm may either fully pre-position liquidity in the U.S. non-branch material entities or develop a mechanism for planned foreign parent support, of any amount not pre-positioned, for the successful execution of the U.S. strategy. Mechanisms to support readily available liquidity may include a term liquidity facility between the U.S. IHC and the foreign parent that can be drawn as needed and as informed by the firm's RLEN estimates and liquidity positioning. The plan should include analysis of how the U.S. IHC/foreign parent facility is funded or buffered for by the foreign parent. The sufficiency of the liquidity should be informed by the firm's RLEN estimate for the U.S. non-branch material entities.
• Identifying clients,
• Mapping U.S. material entities, identified critical operations, core business lines, and key clients of the firm's U.S. operations to both key FMUs and key agent banks; and
• Developing a playbook for each key FMU and key agent bank essential to an orderly resolution under its U.S. resolution strategy that reflects the firm's role(s) as a user and/or provider of PCS services.
The framework should address direct relationships (
• Descriptions of the firm's relationship as a user, including through indirect access, with the key FMU or key agent bank and the identification and mapping of PCS services to the firm's U.S. material entities, identified critical operations, and core business lines that use those PCS services;
• Discussion of the potential range of adverse actions that may be taken by that key FMU or key agent bank when the firm is in resolution under its U.S. resolution strategy,
• Discussion of PCS-related liquidity sources and uses in business-as-usual (BAU), in stress, and in the resolution period, presented by currency type (with U.S. dollar equivalent) and by U.S. material entity.
○ PCS Liquidity Sources: These may include the amounts of intraday extensions of credit, liquidity buffer, inflows from FMU participants, and prefunded amounts of key clients of the firm's U.S. operations in BAU, in stress, and in the resolution period. The playbook also should describe intraday credit arrangements (
○ PCS Liquidity Uses: These may include margin and prefunding by the firm and key clients of the firm's U.S. operations, and intraday extensions of credit, including incremental amounts required during resolution.
○ Intraday Liquidity Inflows and Outflows: The playbook should describe the firm's ability to control intraday liquidity inflows and outflows and to identify and prioritize time-specific payments. The playbook also should describe any account features that might restrict the firm's ready access to its liquidity sources.
• Identification and mapping of PCS services to the firm's U.S. material entities, identified critical operations, and core business lines that provide those PCS services, and a description of the scale and the way in which each provides PCS services;
• Identification and mapping of PCS services to key clients of the firm's U.S. operations to whom the firm's U.S. material entities, identified critical operations, and core business lines provide such PCS services and any related credit or liquidity offered in connection with such services;
• Discussion of the potential range of firm contingency arrangements available to minimize disruption to the provision of PCS services to key clients of the firm's U.S. operations, including the viability of transferring activity and any related assets of key clients of the firm's U.S. operations, as well as any alternative arrangements that would allow the key clients of the firm's U.S. operations continued access to PCS services if the firm could no longer provide such access (
• Descriptions of the range of contingency actions that the firm may take concerning its provision of intraday credit to key clients of the firm's U.S. operations, including analysis quantifying the potential liquidity the firm could generate by taking such actions in stress and in the resolution period, such as (i) requiring key clients of the firm's U.S. operations to designate or appropriately pre-position liquidity, including through prefunding of settlement activity, for PCS-related key FMU and key agent bank obligations at specific material entities of the firm (
• Descriptions of how the firm will communicate to key clients of the firm's U.S. operations the potential impacts of implementation of any identified contingency arrangements or alternatives, including a description of the firm's methodology for determining whether any additional communication should be provided to some or all key clients of the firm's U.S. operations (
• Track the following items by U.S. material entity and, with respect to customers, counterparties, and agents and service providers, by location/jurisdiction:
○ PCS activities, with each activity mapped to the relevant material entities and core business lines;
○ Customers and counterparties for PCS activities, including values and volumes of various transaction types, as well as used and unused capacity for all lines of credit;
○ Exposures to and volumes transacted with FMUs, nostro agents, and custodians; and
○ Services provided and service level agreements, as applicable, for other current agents and service providers (internal and external).
• Assess the potential effects of adverse actions by FMUs, nostro agents, custodians, and other agents and service providers, including suspension or termination of membership or services, on the firm's U.S. operations and customers and counterparties of those U.S. operations;
• Develop contingency arrangements in the event of such adverse actions;
• Quantify the liquidity needs and operational capacity required to meet all PCS obligations, including any change in demand for and sources of liquidity needed to meet such obligations.
• Be able to query and provide aggregate statistics for all qualified financial contracts concerning cross-default clauses, downgrade triggers, and other key collateral-related contract terms—not just those terms that may be impacted in an adverse economic environment—across contract types, business lines, legal entities, and jurisdictions;
• Be able to track both firm collateral sources (
• Have robust risk measurements for cross-entity and cross-contract netting, including consideration of where collateral is held and pledged;
• Be able to identify CUSIP and asset class level information on collateral pledged to specific central counterparties by legal entity on at least a t+1 basis;
• Be able to track and report on inter-branch collateral pledged and received on at least a t+1 basis and have clear policies explaining the rationale for such inter-branch pledges, including any regulatory considerations; and
• Have a comprehensive collateral management policy that outlines how the firm as a whole approaches collateral and serves as a single source for governance.
In addition, as of the conclusion of any business day, the firm should be able to:
• Identify the legal entity and geographic jurisdiction where counterparty collateral is held;
• Document all netting and re-hypothecation arrangements with affiliates and external parties, by legal entity; and
• Track and manage collateral requirements associated with counterparty credit risk exposures between affiliates, including foreign branches.
At least on a quarterly basis, the firm should be able to:
• Review the material terms and provisions of International Swaps and Derivatives Association Master Agreements and the Credit Support Annexes, such as termination events, for triggers that may be breached as a result of changes in market conditions;
• Identify legal and operational differences and potential challenges in managing collateral within specific jurisdictions, agreement types, counterparty types, collateral forms, or other distinguishing characteristics; and
• Forecast changes in collateral requirements and cash and non-cash collateral flows under a variety of stress scenarios.
The firm should (A) maintain an identification of all shared services that support identified critical operations; (B) maintain a mapping of how/where these services support U.S. core business lines and identified critical operations; (C) incorporate such mapping into legal entity rationalization criteria and implementation efforts; and (D) mitigate identified continuity risks through establishment of service-level agreements (SLAs) for all critical shared services.
SLAs should fully describe the services provided, reflect pricing considerations on an arm's-length basis where appropriate, and incorporate
The firm should identify all service providers and critical outsourced services that support identified critical operations and identify any that could not be promptly substituted. The firm should (A) evaluate the agreements governing these services to determine whether there are any that could be terminated upon commencement of any resolution despite continued performance; and (B) update contracts to incorporate appropriate terms and conditions to prevent automatic termination upon commencement of any resolution proceeding and facilitate continued provision of such services. Relying on entities projected to survive during resolution to avoid contract termination is insufficient to ensure continuity. In the Plan, the firm should document the amendment of any such agreements governing these services. The Plan must also discuss arrangements to ensure the operational continuity of shared services that support identified critical operations in resolution in the event of the disruption of those shared services.
A firm is expected to have robust arrangements in place for the continued provision of shared or outsourced services needed to maintain identified critical operations. For example, firms should:
• Evaluate internal and external dependencies and develop documented strategies and contingency arrangements for the continuity or replacement of the shared and outsourced services that are necessary to maintain identified critical operations.
• Maintain current cost estimates for implementing such strategies and contingency arrangements.
For any U.S. branch that is significant to the activities of an identified critical operation, the Plan should describe and demonstrate how the branch would continue to facilitate FMU access for identified critical operations and meet funding needs. Such a U.S. branch would also be required to describe how it would meet supervisory requirements imposed by state regulators or the appropriate Federal banking agency, as appropriate, including maintaining a net due to position and complying with heightened asset maintenance requirements.
Specifically, application of the criteria should:
(A) Ensure that the allocation of activities across the firm's U.S. branches and U.S. non-branch material entities support the firm's U.S. resolution strategy and minimize risk to U.S. financial stability in the event of resolution;
(B) Facilitate the recapitalization and liquidity support of U.S. IHC subsidiaries, as required by the firm's U.S. resolution strategy. Such criteria should include clean lines of ownership and clean funding pathways between the foreign parent, the U.S. IHC, and U.S. IHC subsidiaries;
(C) Facilitate the sale, transfer, or wind-down of certain discrete operations within a timeframe that would meaningfully increase the likelihood of an orderly resolution in the United States, including provisions for the continuity of associated services and mitigation of financial, operational, and legal challenges to separation and disposition;
(D) Adequately protect U.S. subsidiary insured depository institutions from risks arising from the activities of any nonbank U.S. subsidiaries (other than those that are subsidiaries of an insured depository institution); and
(E) Minimize complexity that could impede an orderly resolution in the United States and minimize redundant and dormant entities.
These criteria should be built into the firm's ongoing process for creating, maintaining, and optimizing the firm's U.S. structure and operations on a continuous basis.
A Specified FBO's plan should address the following areas.
A firm should have booking practices commensurate with the size, scope, and complexity of its U.S. derivatives and trading activities.
The firm's resolution plan should include detailed descriptions of the framework and each of its material components. In particular, a firm's resolution plan should include descriptions of documented booking models covering its U.S. derivatives and trading activities.
A firm should be able to assess how the management of U.S. derivatives and trading activities could be affected in the period leading up to and during the execution of its U.S. resolution strategy, including disruptions that could affect materially the funding or operations of the U.S. entities that conduct the U.S. derivatives and trading activities or their clients and counterparties. Therefore, a firm should have capabilities to provide timely transparency into the management of its U.S. derivatives and trading activities, in the period leading up to and during the execution of its U.S. resolution strategy by maintaining a monitoring framework for U.S. derivatives and trading activities, which consists of at least the following two components:
1. A method for identifying U.S. derivatives and trading activities, and measuring, monitoring, and reporting on those activities on a business line and legal entity basis; and
2. A method for identifying, assessing, and reporting the potential impact on (i) clients and counterparties of U.S. entities that conduct the U.S. derivatives and trading activities and (ii) any related risk transfer arrangements
A firm should have the operational capacity to facilitate the orderly transfer of U.S. prime brokerage accounts,
In addition, a firm should describe and demonstrate its ability to segment and analyze the quality and composition of U.S. prime brokerage account balances based on a set of well-defined and consistently applied segmentation criteria (
A firm should have the capabilities to produce analysis that reflects derivatives portfolio
To the extent the U.S. resolution strategy assumes the continuation of a U.S. IHC subsidiary with a derivatives portfolio after the entry of the U.S. IHC into a U.S. bankruptcy proceeding (surviving derivatives subsidiary), the firm's plan should provide a detailed analysis of the strategy to stabilize and de-risk any derivatives portfolio of the surviving derivatives subsidiary (U.S. derivatives strategy) that has been incorporated into its U.S. resolution strategy.
•
•
•
A firm's analysis of its U.S. derivatives strategy should take into account (i) the starting profile of any derivatives portfolio of each surviving derivatives subsidiary (
1. The Plan should be based on the current state of the applicable legal and policy frameworks. Pending legislation or regulatory actions may be discussed as additional considerations.
2. The firm must submit a plan that does not rely on the provision of extraordinary support by the United States or any other government to the firm or its subsidiaries to prevent the failure of the firm.
3. The firm should not assume that it will be able to sell identified critical operations or core business lines, or that unsecured funding will be available immediately prior to filing for bankruptcy.
4. The Plan should assume the Dodd-Frank Act Stress Test (DFAST) severely adverse scenario for the first quarter of the calendar year in which the Plan is submitted is the domestic and international economic environment at the time of the firm's failure and throughout the resolution process.
5. The resolution strategy may be based on an idiosyncratic event or action. The firm should justify use of that assumption, consistent with the conditions of the economic scenario.
6. Within the context of the applicable idiosyncratic scenario, markets are functioning and competitors are in a position to take on business. If a firm's Plan assumes the sale of assets, the firm should take into account all issues surrounding its ability to sell in market conditions present in the applicable economic condition at the time of sale (
7. The firm should not assume any waivers of section 23A or 23B of the Federal Reserve Act in connection with the actions proposed to be taken prior to or in resolution.
8. The firm may assume that its depository institutions will have access to the Discount Window only for a few days after the point of failure to facilitate orderly resolution. However, the firm should not assume its subsidiary depository institutions will have access to the Discount Window while critically undercapitalized, in FDIC receivership, or operating as a bridge bank, nor should it assume any lending from a Federal Reserve credit facility to a non-bank affiliate.
The Plan should include the actual balance sheet for each material entity and the consolidating balance sheet adjustments between material entities as well as pro forma balance sheets for each material entity at the point of failure and at key junctures in the execution of the resolution strategy. It should also include projected statements of sources and uses of funds for the interim periods. The pro forma financial statements and accompanying notes in the Plan must clearly evidence the failure trigger event; the Plan's
Material entities should encompass those entities, including subsidiaries, branches and agencies (collectively, Offices), which are significant to the activities of an identified critical operation or core business line. If the abrupt disruption or cessation of a core business line might have systemic consequences to U.S. financial stability, the entities essential to the continuation of such core business line should be considered for material entity designation. Material entities should include the following types of entities:
a. Any Office, wherever located, that is significant to the activities of an identified critical operation.
b. Any Office, wherever located, whose provision or support of global treasury operations, funding, or liquidity activities (inclusive of intercompany transactions) is significant to the activities of an identified critical operation.
c. Any Office, wherever located, that would provide material operational support in resolution (key personnel, information technology, data centers, real estate or other shared services) to the activities of an identified critical operation.
d. Any Office, wherever located, that is engaged in derivatives booking activity that is significant to the activities of an identified critical operation, including those that conduct either the internal hedge side or the client-facing side of a transaction.
e. Any Office, wherever located, engaged in asset custody or asset management that are significant to the activities of an identified critical operation.
f. Any Office, wherever located, holding licenses or memberships in clearinghouses, exchanges, or other FMUs that are significant to the activities of an identified critical operation.
For each material entity (including a branch), the Plan should enumerate, on a jurisdiction-by-jurisdiction basis, the specific mandatory and discretionary actions or forbearances that regulatory and resolution authorities would take during resolution, including any regulatory filings and notifications that would be required as part of the U.S. resolution strategy, and explain how the Plan addresses the actions and forbearances. The Plan should describe the consequences for the firm's U.S. resolution strategy if specific actions in each jurisdiction were not taken, delayed, or forgone, as relevant.
The purpose of the public section is to inform the public's understanding of the firm's resolution strategy and how it works.
The public section should discuss the steps that the firm is taking to improve resolvability under the U.S. Bankruptcy Code. The public section should provide background information on each material entity and should be enhanced by including the firm's rationale for designating material entities. The public section should also discuss, at a high level, the firm's intra-group financial and operational interconnectedness (including the types of guarantees or support obligations in place that could impact the execution of the firm's strategy). There should also be a high-level discussion of the liquidity resources and loss-absorbing capacity of the U.S. IHC.
The discussion of strategy in the public section should broadly explain how the firm has addressed any deficiencies, shortcomings, and other key vulnerabilities that the Agencies have identified in prior Plan submissions. For each material entity, it should be clear how the strategy provides for continuity, transfer, or orderly wind-down of the entity and its operations. There should also be a description of the resulting organization upon completion of the resolution process.
The public section may note that the resolution plan is not binding on a bankruptcy court or other resolution authority and that the proposed failure scenario and associated assumptions are hypothetical and do not necessarily reflect an event or events to which the firm is or may become subject.
In March 2017, the Agencies issued guidance for use in developing the 2018 resolution plan submissions by certain foreign banking organizations.
In response to frequently asked questions regarding that guidance from the recipients of that guidance, Board and FDIC staff jointly developed answers and provided those answers to the guidance recipients in 2017 so that they could take this information into account in developing their next resolution plan submissions.
The questions in this Appendix:
• Comprise common questions asked by different covered companies. Not every question is applicable to every firm; not every aspect of the guidance applies to each firm's preferred strategy/structure; and
• Reflect updated references to correspond to this final guidance for the Specified FBOs (Final Guidance).
As indicated below, those questions and answers that are deemed to be no longer meaningful or relevant have not been consolidated in this Appendix and are superseded.
Q. How should firms apply the term “well-capitalized”?
A. U.S. non-branch material entities must comply with the capital requirements and expectations of their primary regulator. U.S. non-branch material entities should be recapitalized to meet jurisdictional requirements and to maintain market confidence as required under the U.S. resolution strategy.
A. For resolution plan submission purposes, the estimation of RLEN and RCEN should assume macroeconomic conditions consistent with the DFAST Severely Adverse scenario. However, the RLEN and RCEN methodologies should have the flexibility to incorporate macroeconomic conditions that may deviate from the DFAST Severely Adverse scenario in order to facilitate execution of the U.S. resolution strategy.
A. Frictions are
A1. The stabilization period begins immediately after the U.S. IHC bankruptcy filing and extends until each material entity reestablishes market confidence. The stabilization period may not be less than 30 days. The reestablishment of market confidence may be reflected by the maintaining, reestablishing, or establishing of investment grade ratings or the equivalent financial condition for each entity. The stabilization period may vary by material entity, given differences in regulatory, counterparty, and other stakeholder interests in each entity.
A3. The resolution period begins immediately after the U.S. IHC's bankruptcy filing and extends through the completion of the U.S. strategy. After the stabilization period (see “LIQ 2. Distinction between Liquidity Forecasting Periods,” Question 1, regarding “stabilization period”), financial statements and projections may be provided at quarterly intervals through the remainder of the resolution period.
A. Yes.
A1. The peak funding needs represent the peak cumulative net out-flows during the stabilization period. The components of peak funding needs, including the monetization of assets and other management actions, should be transparent in the RLEN projections. The peak funding needs should be supported by projections of daily sources and uses of cash for each U.S. IHC subsidiary, incorporating inter-affiliate and third-party exposures. In mathematical terms, RLEN = MOL + peak funding needs during the stabilization period. RLEN should also incorporate liquidity execution needs of the U.S. resolution strategy for derivatives (
A2. Yes, the components of the MOL estimates for each surviving U.S. IHC subsidiary should be transparent and supported.
A3. MOL estimates can decline as long as they are sufficiently supported by the firm's methodology and assumptions.
A. For the purpose of calculating a firm's net liquidity position at a material entity, the RLEN model should assume that these transactions mature at the earliest possible exercise date; this adjusted maturity should be applied symmetrically to both material entities involved in the transaction.
A. Firms should consider the applicable regulatory expectations for each U.S. IHC subsidiary to achieve the stabilization needed to execute the U.S. resolution strategy. Firms' assumptions in the RLEN model regarding the actions necessary to reestablish market confidence during the stabilization period may vary by U.S. IHC subsidiary, for example, based on differences in regulatory, counterparty, other stakeholder interests, and based on the U.S. resolution strategy for each U.S. IHC subsidiary. See also “LIQ 2. Distinction between Liquidity Forecasting Periods.”
A. For a firm's RLEN model, firms may incorporate conservative estimates of potential liquidity that may be generated through the monetization of non-HQLA. The estimated liquidity value of non-HQLA should be supported by thorough analysis of the potential market constraints and asset value haircuts that may be required. Assumptions for the monetization of non-HQLA should be consistent with the U.S. resolution strategy for each U.S. IHC subsidiary.
A. No. A firm may use its internal definitions of the components of MOL estimates. The components of MOL estimates should be well-supported by a firm's internal methodologies and calibrated to the specifics of each U.S. IHC subsidiary.
A. Yes. Firms may incorporate cash revenue generated by U.S. IHC subsidiaries in the RLEN model. Cash revenue projections should be conservatively estimated and consistent with the operating environment and the U.S. strategy for each U.S. IHC subsidiary.
A. Once a U.S. IHC subsidiary has achieved market confidence necessary for stabilization consistent with the U.S. resolution strategy, a firm may modify one or more inter-affiliate frictions, provided the firm provides sufficient analysis to support this assumption.
(See “CAP 3. RCEN Relationship to DFAST Severely Adverse Scenario” in the Capital section.)
A1. To meet the liquidity needs informed by the RLEN methodology, firms may either fully pre-position liquidity in the U.S. non-branch material entities or develop a mechanism for planned foreign parent support of any amount not pre-
A1. Where a firm maintains shared service companies to provide services to affiliates, working capital should be maintained in those entities sufficient to permit those entities to continue to provide services for six months or through the period of stabilization as required in the firm's U.S. resolution strategy.
Costs related to third-party vendors and inter-affiliate services should be captured through the working capital element of the MOL estimate (RLEN).
A2. The measurement of the six month working capital expectation begins upon the bankruptcy filing of the U.S. IHC. The expectation for maintaining the working capital is effective upon the July 2018 submission.
To the extent relevant, the PCS FAQs have been consolidated into the updated section of the Final Guidance.
A. Yes, LER criteria may incorporate both business and resolution considerations. In determining the best alignment of legal entities and business lines to improve the firm's resolvability under different market conditions, business considerations should not be prioritized over resolution needs.
A. Yes.
A1. The funding pathways between the foreign parent, U.S. IHC, and U.S. IHC subsidiaries should minimize uncertainty in the provision of funds and facilitate recapitalization. Also, the complexity of ownership should not impede the flow of funding to a U.S. non-branch material entity under the firm's U.S. resolution strategy. Potential sources of additional complexity could include, for example, multiple intermediate holding companies, tenor mismatches, or complicated ownership structures (including those involving multiple jurisdictions or fractional ownerships). Ownership should be as clean and simple as practicable, supporting the U.S. strategy and actionable sales, transfers, or wind-downs under varying market conditions. The clean funding pathways expectation applies to all funding provided to a U.S. non-branch material entity regardless of type and should not be viewed solely to apply to internal TLAC.
A2. No. However, the firm should identify and address or mitigate any legal, regulatory, financial, operational, and other factors that could complicate the recapitalization and/or liquidity support of U.S. non-branch material entities.
A1. The scope of a firm's LER criteria should apply to the entire U.S. operations.
A2. Yes.
A. The LER criteria serve to govern the corporate structure and arrangements between U.S. subsidiaries and U.S. branches in a manner that facilitates the resolvability of U.S. operations. The Final Guidance is not intended to govern the corporate structure in jurisdictions outside the U.S. The application of the LER criteria should, among other things, ensure that the allocation of activities across the firm's U.S. branches and U.S. non-branch material entities support the firm's US resolution strategy and minimize risk to US financial stability in the event of resolution.
Moreover, LER works with other components to improve resolvability. For example, with regard to shared services the firm should identify all shared services that support identified critical operations, maintain a mapping of how/where these services support core business lines and identified critical operations, and include this mapping into the legal rationalization criteria and implementation efforts.
To the extent relevant, the derivatives and trading FAQs have been consolidated into the updated section of the Final Guidance.
The Final Guidance does not specifically reference consideration of a contractually binding mechanism. However, the following questions and answers may be useful to a firm that chooses to consider a contractually binding mechanism as a mitigant to the potential challenges to the planned Support.
A1. No. The Agencies do not have a preference as to the form of capital contribution or liquidity support.
A2. Contractually binding mechanism is a generic term and includes the down-streaming of capital and/or liquidity as contemplated by the U.S. resolution strategy. Furthermore, it is up to the firm, as informed by any relevant guidance of the Agencies, to identify what assets would satisfy a U.S. affiliate's need for capital and/or liquidity.
A3. To the extent a firm utilizes a contractually binding mechanism, such mechanism, including its duration, should be appropriate for the firm's U.S. resolution strategy, including adequately addressing relevant financial, operational, and legal requirements and challenges.
A6. Yes, however the Agencies should be informed of the proposed duration of the agreement, as well as any terms and conditions on renewal and/or amendment. Any amendments should be identified and discussed as part of the firm's next U.S. resolution plan submission.
A8. No
None of the general FAQs were consolidated.
By order of the Board of Governors of the Federal Reserve System.
The notificants listed below have applied under the Change in Bank Control Act (Act) (12 U.S.C. 1817(j)) and § 225.41 of the Board's Regulation Y (12 CFR 225.41) to acquire shares of a bank or bank holding company. The factors that are considered in acting on the applications are set forth in paragraph 7 of the Act (12 U.S.C. 1817(j)(7)).
The 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 January 6, 2021.
1.
National Capital Region, General Services Administration (GSA).
Notice of Intent to prepare an Environmental Impact Statement (EIS).
Pursuant to the requirements of the National Environmental Policy Act of 1969 (NEPA), the Council on Environmental Quality Regulations, GSA Order, ADM 1095.1F, Environmental Considerations in Decision Making, dated October 19, 1999, and the GSA Public Buildings Service NEPA Desk Guide, GSA plans to prepare an EIS for a proposed Master Plan for the U.S. Food and Drug Administration's (FDA) Muirkirk Road Campus (MRC), in Laurel, Maryland, located in Prince George's County. The Master Plan will provide FDA with a structured framework for developing the MRC over the next 20 years.
Marshall Popkin, Office of Planning and Design Quality, Public Buildings Service, GSA, National Capital Region, at 202-919-0026.
The GSA intends to prepare an EIS to analyze the potential impacts resulting from the proposed Master Plan to support the FDA MRC, in Laurel, Maryland, located in Prince George's County. GSA will analyze four alternatives for the proposed MRC Master Plan: (1) No Action Alternative; (2) Development at the Mod 1/Mod 2 site; (3) Hybrid of Alternatives 2 and 4; and (4) Development at the Beltsville Research Facility site. The proposed action is anticipated to impact soils and topography; traffic and transit; water resources; vegetation; wildlife; air quality; greenhouse gases and climate; utilities; and waste management. No permits are required to adopt the Master Plan. Implementation of the Master Plan in the future could require the following permits and authorizations:
In 1981, GSA completed an EIS that analyzed the impacts from the construction of new laboratory space at the MRC and the consolidation of four facilities in the Washington, DC, metro area and other sites in St. Louis, MO, and Cincinnati, OH. In 1990, Congress enacted the Food and Drug Revitalization Act that gave GSA the authority to grant contracts to consolidate FDA facilities. To accommodate future growth and further consolidate FDA operations, GSA is preparing an EIS to assess the impacts of development on the MRC and an increase in the employee population of up to approximately 1,800 employees, over a period of 20 years.
The purpose of the proposed action is to provide a Master Plan for the MRC to guide future site development. The proposed action is needed to accommodate projected growth at the MRC and provide the necessary office and laboratory space for FDA to conduct complex and comprehensive research and reviews.
A Draft EIS is expected to be released for public review in June 2021. The GSA will hold a public hearing on the impacts of the proposed action in July 2021, and will seek preliminary approval of the MRC Master Plan from the National Capital Planning Commission (NCPC) at NCPC's September 2021 hearing. A Final EIS will be prepared that will take into consideration all comments received on the Draft EIS, and a Record of Decision is anticipated in spring 2022. Pending completion of NEPA compliance and review by NCPC, GSA anticipates adopting the MRC Master Plan in spring 2022.
In accordance with NEPA, a scoping process will be conducted to aid in determining the alternatives to be considered and the scope of issues to be addressed, as well as for identifying the significant issues related to the proposed MRC Master Plan. Scoping will be accomplished through a virtual public scoping meeting; direct mail correspondence to potentially interested persons, agencies, and organizations; and meetings with agencies having an interest in the Master Plan. It is important that Federal, regional, State, and local agencies, and interested individuals take this opportunity to identify environmental concerns that should be addressed during the preparation of the EIS.
Due to the ongoing COVID-19 pandemic and state/local requirements for social distancing, a pre-recorded presentation will be available at
Agencies and the public are encouraged to provide comments on identification of potential alternatives, information, and analyses relevant to the proposed action. Comments may be provided in writing via mail or email. Verbal comments may also be provided via the project phone line. Written comments regarding the environmental analysis for the proposed MRC Master Plan must be postmarked by February 11, 2021, and sent to the following: Mr. Marshall Popkin, NEPA Compliance Specialist, Office of Planning and Design Quality, Public Buildings Service, U.S. General Services Administration, 1800 F Street NW, Room 4400, Washington, DC 20405.
Office of Acquisition Policy, General Services Administration (GSA).
Notice of request for public comments regarding an extension to an existing OMB information collection.
Under the provisions of the Paperwork Reduction Act, the Regulatory Secretariat Division will be submitting to the Office of Management and Budget (OMB) a request to review and approve an extension of a previously approved information collection requirement regarding information specific to a contract or contracting action that is not required by regulation.
Submit comments on or before: January 21, 2021.
Written comments and recommendations for this information collection should be sent within 30 days of publication of this notice to
Mr. Clarence Harrison, Procurement Analyst, GSA Acquisition Policy Division, at telephone 202-227-7051 or email
GSA has various mission responsibilities related to the acquisition and provision of supplies, transportation, information technology, telecommunications, real property management, and disposal of real and personal property. These mission responsibilities generate requirements that are realized through the solicitation and award of public contracts.
Most GSA procurement-related information collections are required by the Federal Acquisition Regulation (FAR) or General Services Administration Acquisition Regulation (GSAR); each clause requiring such a collection must be individually approved by OMB. However, some solicitations require contractors to submit information specific to that contracting action, such as information needed to evaluate offers (
This information collection is currently associated with GSA's information collection requirements contained in solicitations issued in accordance with the Uniform Contract Format under FAR Part 14, Sealed Bidding (see GSAR 514.201-1); FAR
A notice was published in the
Agency for Healthcare Research and Quality (AHRQ), HHS.
Solicits nominations for new members of the USPSTF.
The Agency for Healthcare Research and Quality (AHRQ) invites nominations of individuals qualified to serve as members of the U.S. Preventive Services Task Force (USPSTF).
Nominations must be received electronically by March 15th of a given year to be considered for appointment to begin in January of the following year.
Submit your responses electronically via:
Lydia Hill at
Nominations and applications are kept on file at the Center for Evidence and Practice Improvement, AHRQ, and are available for review during business hours. AHRQ does not reply to individual nominations, but considers all nominations in selecting members. Information regarded as private and personal, such as a nominee's social security number, home and email addresses, home telephone and fax numbers, or names of family members will not be disclosed to the public in accord with the Freedom of Information Act. 5 U.S.C. 552(b)(6); 45 CFR 5.31(f).
Nominations must be submitted electronically, and should include:
1. The applicant's current curriculum vitae and contact information, including mailing address, and email address; and
2. A letter explaining how this individual meets the qualification requirements and how he or she would contribute to the USPSTF. The letter should also attest to the nominee's willingness to serve as a member of the USPSTF.
AHRQ will later ask people under serious consideration for USPSTF membership to provide detailed information that will permit evaluation of possible significant conflicts of interest. Such information will concern matters such as financial holdings, consultancies, non-financial scientific interests, and research grants or contracts.
To obtain a diversity of perspectives, AHRQ particularly encourages nominations of women, members of underrepresented populations, and persons with disabilities. Interested individuals can nominate themselves. Organizations and individuals may nominate one or more people qualified for membership on the USPSTF at any time. Individuals nominated prior to March 15, 2020, who continue to have interest in serving on the USPSTF should be re-nominated.
To qualify for the USPSTF and support its mission, an applicant or nominee should, at a minimum, demonstrate knowledge, expertise and national leadership in the following areas:
1. The critical evaluation of research published in peer-reviewed literature and in the methods of evidence review;
2. Clinical prevention, health promotion and primary health care; and
3. Implementation of evidence-based recommendations in clinical practice including at the clinician-patient level, practice level, and health-system level.
Additionally, the Task Force benefits from members with expertise in the following areas:
Public Health.
Health Equity and The Reduction Of Health Disparities.
Application of Science to Health Policy.
Dissemination and Implementation.
Behavioral Medicine/Clinical Health Psychology.
Communication of Scientific Findings to Multiple Audiences Including Health Care Professionals, Policy Makers and the General Public.
Candidates with experience and skills in any of these areas should highlight them in their nomination materials.
Applicants must have no substantial conflicts of interest, whether financial, professional, or intellectual, that would impair the scientific integrity of the work of the USPSTF and must be willing to complete regular conflict of interest disclosures.
Applicants must have the ability to work collaboratively with a team of diverse professionals who support the mission of the USPSTF. Applicants must have adequate time to contribute substantively to the work products of the USPSTF.
Nominated individuals will be selected for the USPSTF on the basis of how well they meet the required qualifications and the current expertise needs of the USPSTF. It is anticipated that new members will be invited to serve on the USPSTF beginning in January, 2022. All nominated individuals will be considered; however, strongest consideration will be given to individuals with demonstrated training and expertise in the areas of Family Medicine, Internal Medicine, Pediatrics, Obstetrics and Gynecology, and Advanced Practice Nursing. AHRQ will retain and may consider for future vacancies nominations received this year and not selected during this cycle.
Some USPSTF members without primary health care clinical experience may be selected based on their expertise in methodological issues such as meta-analysis, analytic modeling, or clinical epidemiology. For individuals with clinical expertise in primary health care, additional qualifications in methodology would enhance their candidacy.
Under Title IX of the Public Health Service Act, AHRQ is charged with enhancing the quality, appropriateness, and effectiveness of health care services and access to such services. 42 U.S.C. 299(b). AHRQ accomplishes these goals through scientific research and promotion of improvements in clinical practice, including clinical prevention of diseases and other health conditions. See 42 U.S.C. 299(b).
The USPSTF, an independent body of experts in prevention and evidence-based medicine, works to improve the health of all Americans by making evidence-based recommendations about the effectiveness of clinical preventive services and health promotion. The recommendations made by the USPSTF address clinical preventive services for adults and children, and include screening tests, counseling services, and preventive medications.
The USPSTF was first established in 1984 under the auspices of the U.S. Public Health Service. Currently, the USPSTF is convened by the Director of AHRQ, and AHRQ provides ongoing scientific, administrative, and dissemination support for the USPSTF's operation. USPSTF members serve four year terms. New members are selected each year to replace those members who are completing their appointments.
The USPSTF is charged with rigorously evaluating the effectiveness, appropriateness and cost-effectiveness of clinical preventive services and formulating or updating recommendations regarding the appropriate provision of preventive services. See 42 U.S.C. 299b-4(a)(1). Current USPSTF recommendations and associated evidence reviews are available on the internet (
Office of Family Assistance, Administration for Children and Families, HHS.
Request for public comment.
The Office of Family Assistance (OFA), Administration for Children and Families, is requesting a 3-year extension of the form ACF-4125: Annual Statistical Report on Children in Foster Homes and Children in Families Receiving Payment in Excess of the Poverty Income Level from a State Program Funded Under Part A of Title IV of the Social Security Act (OMB #0970-0004, expiration 3/21/2021). There are no changes requested to the form.
Copies of the proposed collection of information can be obtained and comments may be forwarded by emailing
Public Law 107-110 Sec: 1124(c)(4) and Pub. L. 104-193 Sec: 110(j).
Office of Planning, Research, and Evaluation, Administration for Children and Families, HHS.
Request for public comment.
The Health Profession Opportunity Grants (HPOG) Program provides healthcare occupational training for Temporary Assistance for Needy Families recipients and other low-income people. The Office of Management and Budget (OMB) has approved various data collection activities for the National and Tribal Evaluation of the 2nd Generation of HPOG (HPOG 2.0 National and Tribal Evaluation) under OMB #0970-0462. Due to the profound effects the COVID-19 pandemic has had on the U.S. economy, on families nationwide and on HPOG 2.0 programs, the Office of Planning, Research, and Evaluation (OPRE) is considering surveying study participants who applied to the HPOG Program after the onset of the pandemic. This notice provides a summary for public review and comment of the use and burden associated with a new information collection for this “COVID Cohort” Survey.
Copies of the proposed collection of information can be obtained and comments may be forwarded by emailing
This request is specific to the COVID Cohort Survey. Currently approved materials and associated burden can be found at:
Administration for Community Living, HHS.
Notice.
The Administration for Community Living is announcing that the proposed collection of information listed above has been submitted to the Office of Management and Budget (OMB) for review and clearance as required under section 506(c)(2)(A) of the Paperwork Reduction Act of 1995. This 30-day notice collects comments on the information collection requirements related to the proposed information collection, Title III Supplemental Form to Financial Status Report (SF-425) OMB 0985-0004.
Submit written comments on the collection of information by 11:59 p.m. (EST) or postmarked by January 21, 2021.
Submit written comments on the collection of information by:
(a) Email to:
(b) Fax to 202.395.5806, Attn: OMB Desk Officer for ACL; or
(c) By mail to the Office of Information and Regulatory Affairs, OMB, New Executive Office Bldg., 725 17th St. NW, Rm. 10235, Washington, DC 20503, Attn: OMB Desk Officer for ACL.
Alice Kelsey, Administration for Community Living, Washington, DC 20201, (202) 795-7342
In compliance with 44 U.S.C. 3507, ACL has submitted the following proposed collection of information to OMB for review and clearance. The Title III Supplemental Form to the Financial Status Report (SF-425) is used by ACL/AoA for all grantees to obtain a more detailed understanding of how projects funded under Title III of the Older Americans Act (OAA) of 1965, as amended, are being administered, and to ensure compliance with legislative requirements, pertinent Federal regulations and other applicable instructions and guidelines issued by the ACL. The level of data detail necessary is not available through the SF-425 form. The Supplemental Form provides necessary details on non-federal required match, administration expenditures, and Long Term Care Ombudsman expenditures.
ACL published a 60-day
Health Resources and Services Administration (HRSA), Department of Health and Human Services (HHS).
Notice.
In accordance with the Federal Advisory Committee Act, this notice announces that the Advisory Committee on Infant Mortality (ACIM) has scheduled a public meeting. Information about ACIM and the agenda for this meeting can be found on the ACIM website at
January 25, 2021, 11:00 a.m.-6:00 p.m. Eastern Time (ET) and January 26, 2021, 11:00 a.m.-3:30 p.m. ET.
This meeting will be held via webinar.
David S. de la Cruz, Ph.D., MPH, Designated Federal Official, Maternal and Child Health Bureau (MCHB), HRSA, 5600 Fishers Lane, Room 18N25, Rockville, Maryland 20857; 301-443-0543; or
The ACIM is authorized by section 222 of the Public Health Service Act (42 U.S.C. 217a), as amended. The Committee is governed by provisions of Public Law 92-463, as amended, (5 U.S.C. App. 2), which sets forth standards for the formation and use of Advisory Committees.
The ACIM advises the Secretary of HHS on department activities and programs directed at reducing infant mortality and improving the health status of pregnant women and infants. The ACIM represents a public-private partnership at the highest level to provide guidance and focus attention on the policies and resources required to address the reduction of infant mortality and the improvement of the health status of pregnant women and infants. With a focus on life course, the ACIM addresses disparities in maternal health to improve maternal health outcomes, including preventing and reducing maternal mortality and severe maternal morbidity. The ACIM provides advice on how best to coordinate myriad federal, state, local, and private programs and efforts that are designed to deal with the health and social problems impacting infant mortality and maternal health, including implementation of the Healthy Start
The agenda for the January 25 and 26, 2021, meeting is being finalized and may include the following: Updates from HRSA, MCHB, and other federal agencies; continued discussion of the impact of COVID-19 on infant and maternal health; immigrant maternal and child health issues; environmental contributions to infant mortality and maternal mortality; and updates on priority topic areas for ACIM to address (equity, data, access, and quality of care). Agenda items are subject to change as priorities dictate. Refer to the ACIM website for any updated information concerning the meeting.
Members of the public will have the opportunity to provide written or oral comments. Requests to submit a written statement or make oral comments to the ACIM should be sent to David S. de la Cruz, using the email address above at least 3 business days prior to the meeting. Public participants may submit written statements in advance of the scheduled meeting by emailing
Individuals who plan to attend and need special assistance or another reasonable accommodation should notify David S. de la Cruz at the contact information listed above at least 10 business days prior to the meeting.
Pursuant to section 10(d) of the Federal Advisory Committee Act, as amended, notice is hereby given of a meeting of the Fogarty International Center Advisory Board.
The meeting will be open to the public via online meeting. Individuals who plan to attend and need special assistance, such as sign language interpretation or other reasonable accommodations should notify the Contact Person listed below in advance of the virtual 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.
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.
Information is also available on the Institute's/Center's home page:
Coast Guard, DHS.
Notice.
The Coast Guard announces that it is removing the conditions of entry on vessels arriving from the country of the Republic of Liberia.
The policy announced in this notice is effective on December 22, 2020.
For information about this document call or email D.R. McBryde, International Port Security Evaluation Division, United States Coast Guard, telephone 202-372-1213,
On May 2, 2005 the the Coast Guard published a Notice in the
Federal Emergency Management Agency, DHS.
Notice.
New or modified Base (1-percent annual chance) Flood Elevations (BFEs), base flood depths, Special Flood Hazard Area (SFHA) boundaries or zone designations, and/or regulatory floodways (hereinafter referred to as flood hazard determinations) as shown on the indicated Letter of Map Revision (LOMR) for each of the communities listed in the table below are finalized. Each LOMR revises the Flood Insurance Rate Maps (FIRMs), and in some cases the Flood Insurance Study (FIS) reports, currently in effect for the listed communities. The flood hazard determinations modified by each LOMR will be used to calculate flood insurance premium rates for new buildings and their contents.
Each LOMR was finalized as in the table below.
Each LOMR is available for inspection at both the respective Community Map Repository address listed in the table below and online through the FEMA Map Service Center at
Rick Sacbibit, Chief, Engineering Services Branch, Federal Insurance and Mitigation Administration, FEMA, 400 C Street SW, Washington, DC 20472, (202) 646-7659, or (email)
The Federal Emergency Management Agency (FEMA) makes the final flood hazard determinations as shown in the LOMRs for each community listed in the table below. Notice of these modified flood hazard determinations has been published in newspapers of local circulation and 90 days have elapsed since that publication. The Deputy Associate Administrator for Insurance and Mitigation has resolved any appeals resulting from this notification.
The modified flood hazard determinations are made pursuant to section 206 of the Flood Disaster Protection Act of 1973, 42 U.S.C. 4105, and are in accordance with the National Flood Insurance Act of 1968, 42 U.S.C. 4001
For rating purposes, the currently effective community number is shown and must be used for all new policies and renewals.
The new or modified flood hazard information is the basis for the floodplain management measures that the community is required either to adopt or to show evidence of being already in effect in order to remain qualified for participation in the National Flood Insurance Program (NFIP).
This new or modified flood hazard information, together with the floodplain management criteria required by 44 CFR 60.3, are the minimum that are required. They should not be construed to mean that the community must change any existing ordinances that are more stringent in their floodplain management requirements. The community may at any time enact stricter requirements of its own or pursuant to policies established by other Federal, State, or regional entities.
This new or modified flood hazard determinations are used to meet the floodplain management requirements of the NFIP and are used to calculate the appropriate flood insurance premium rates for new buildings, and for the contents in those buildings. The changes in flood hazard determinations are in accordance with 44 CFR 65.4.
Interested lessees and owners of real property are encouraged to review the final flood hazard information available at the address cited below for each community or online through the FEMA Map Service Center at
Federal Emergency Management Agency, DHS.
Notice.
Comments are requested on proposed flood hazard determinations, which may include additions or modifications of any Base Flood Elevation (BFE), base flood depth, Special Flood Hazard Area (SFHA) boundary or zone designation, or regulatory floodway on the Flood Insurance Rate Maps (FIRMs), and where applicable, in the supporting Flood Insurance Study (FIS) reports for the communities listed in the table below. The purpose of this notice is to seek general information and comment regarding the preliminary FIRM, and where applicable, the FIS report that the Federal Emergency Management Agency (FEMA) has provided to the affected communities. The FIRM and FIS report are the basis of the floodplain management measures that the community is required either to adopt or to show evidence of having in effect in order to qualify or remain qualified for participation in the National Flood Insurance Program (NFIP). In addition, the FIRM and FIS report, once effective, will be used by insurance agents and others to calculate appropriate flood insurance premium rates for new buildings and the contents of those buildings.
Comments are to be submitted on or before March 22, 2021.
The Preliminary FIRM, and where applicable, the FIS report for each community are available for inspection at both the online location
You may submit comments, identified by Docket No. FEMA-B-2077, to Rick Sacbibit, Chief, Engineering Services Branch, Federal Insurance and Mitigation Administration, FEMA, 400 C Street SW, Washington, DC 20472, (202) 646-7659, or (email)
Rick Sacbibit, Chief, Engineering Services Branch, Federal Insurance and Mitigation Administration, FEMA, 400 C Street SW, Washington, DC 20472, (202) 646-7659, or (email)
FEMA proposes to make flood hazard determinations for each community listed below, in accordance with section 110 of the Flood Disaster Protection Act of 1973, 42 U.S.C. 4104, and 44 CFR 67.4(a).
These proposed flood hazard determinations, together with the floodplain management criteria required by 44 CFR 60.3, are the minimum that are required. They should not be construed to mean that the community must change any existing ordinances that are more stringent in their floodplain management requirements. The community may at any time enact stricter requirements of its own or pursuant to policies established by other Federal, State, or regional entities. These flood hazard determinations are used to meet the floodplain management requirements of the NFIP and are used to calculate the appropriate flood insurance premium rates for new buildings built after the FIRM and FIS report become effective.
The communities affected by the flood hazard determinations are provided in the tables below. Any request for reconsideration of the revised flood hazard information shown on the Preliminary FIRM and FIS report that satisfies the data requirements outlined in 44 CFR 67.6(b) is considered an appeal. Comments unrelated to the flood hazard determinations also will be
Use of a Scientific Resolution Panel (SRP) is available to communities in support of the appeal resolution process. SRPs are independent panels of experts in hydrology, hydraulics, and other pertinent sciences established to review conflicting scientific and technical data and provide recommendations for resolution. Use of the SRP only may be exercised after FEMA and local communities have been engaged in a collaborative consultation process for at least 60 days without a mutually acceptable resolution of an appeal. Additional information regarding the SRP process can be found online at
The watersheds and/or communities affected are listed in the tables below. The Preliminary FIRM, and where applicable, FIS report for each community are available for inspection at both the online location
Federal Emergency Management Agency, DHS.
Notice.
New or modified Base (1-percent annual chance) Flood Elevations (BFEs), base flood depths, Special Flood Hazard Area (SFHA) boundaries or zone designations, and/or regulatory floodways (hereinafter referred to as flood hazard determinations) as shown on the indicated Letter of Map Revision (LOMR) for each of the communities listed in the table below are finalized. Each LOMR revises the Flood Insurance Rate Maps (FIRMs), and in some cases the Flood Insurance Study (FIS) reports, currently in effect for the listed communities. The flood hazard determinations modified by each LOMR will be used to calculate flood insurance premium rates for new buildings and their contents.
Each LOMR was finalized as in the table below.
Each LOMR is available for inspection at both the respective Community Map Repository address listed in the table below and online through the FEMA Map Service Center at
Rick Sacbibit, Chief, Engineering Services Branch, Federal Insurance and Mitigation Administration, FEMA, 400 C Street SW, Washington, DC 20472, (202) 646-7659, or (email)
The Federal Emergency Management Agency (FEMA) makes the final flood hazard determinations as shown in the LOMRs for each community listed in the table below. Notice of these modified flood hazard determinations has been published in newspapers of local circulation and 90 days have elapsed since that publication. The Deputy Associate Administrator for Insurance and Mitigation has resolved any appeals resulting from this notification.
The modified flood hazard determinations are made pursuant to section 206 of the Flood Disaster Protection Act of 1973, 42 U.S.C. 4105, and are in accordance with the National
For rating purposes, the currently effective community number is shown and must be used for all new policies and renewals.
The new or modified flood hazard information is the basis for the floodplain management measures that the community is required either to adopt or to show evidence of being already in effect in order to remain qualified for participation in the National Flood Insurance Program (NFIP).
This new or modified flood hazard information, together with the floodplain management criteria required by 44 CFR 60.3, are the minimum that are required. They should not be construed to mean that the community must change any existing ordinances that are more stringent in their floodplain management requirements. The community may at any time enact stricter requirements of its own or pursuant to policies established by other Federal, State, or regional entities.
This new or modified flood hazard determinations are used to meet the floodplain management requirements of the NFIP and are used to calculate the appropriate flood insurance premium rates for new buildings, and for the contents in those buildings. The changes in flood hazard determinations are in accordance with 44 CFR 65.4.
Interested lessees and owners of real property are encouraged to review the final flood hazard information available at the address cited below for each community or online through the FEMA Map Service Center at
Department of Homeland Security, Office of Strategy, Policy, and Plans.
Notice of Agreement.
The Department of Homeland Security is publishing the Agreement Between the Government of the United States of America and the Government of the Republic of El Salvador for Cooperation in the Examination of Protection Claims. The text of the Agreement is set out below.
Office of the Chief Information Officer, HUD.
Notice; correction.
On December 17, 2020, HUD published a 30-day information collection notice for OMB Control No. 2502-0600. This notice is to correct the Average Hours per Response.
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 is not a toll-free number. Copies of available documents submitted to OMB may be obtained from Ms. Pollard.
In the
Fish and Wildlife Service, Interior.
Notice of availability; request for public comments.
We, the U.S. Fish and Wildlife Service (Service), have received an application from Manzana Wind LLC for an incidental take permit under the Endangered Species Act of 1973, as amended. The permit would authorize take of the federally endangered California condor (
We are extending the standard 30-day comment period by 15 days to allow additional time for public comment. Written comments should be received on or before February 5, 2021.
We request that you send written comments by only the methods described above.
Peter Sanzenbacher, Fish and Wildlife Biologist, by mail at Palm Springs Fish and Wildlife Office (address above), by phone at 760-322-2070, extension 425, or via email at
We have received an application from Manzana Wind LLC (applicant) for an incidental take permit under the Endangered Species Act of 1973, as amended (ESA; 16 U.S.C. 1531
Section 9 of the ESA (16 U.S.C. 1538) and Federal regulations promulgated pursuant to section 4(d) of the ESA (16 U.S.C. 1533) prohibit the take of endangered species without special exemption. Under section 10(a)(1)(B) of the ESA (16 U.S.C. 1539), we may issue permits to authorize take of listed fish and wildlife species that is incidental to, and not the purpose of, carrying out an otherwise lawful activity. Regulations governing permits for endangered and threatened species are set forth in title 50 of the Code of Federal Regulations at part 17, sections 17.22 and 17.32.
The National Environmental Policy Act (NEPA; 42 U.S.C. 4321
The applicant has submitted a draft conservation plan that describes the activities covered by the permit, such as the operation of wind turbines and other specified activities associated with project components. To minimize the risk of incidental take, the applicant will maintain a program to detect condors approaching the project and temporarily curtail operating wind turbines when appropriate; the conservation plan also includes adaptive management to allow for maintaining the protection of condors as technologies, condor behavior, and other factors change over time. To mitigate the impact of the potential incidental take, the applicant proposes to work with an existing captive breeding facility to fund the production of additional condors for release into the wild. The Service and applicant used a population viability analysis to inform the mitigation strategy and ensure that the level of potential injury or mortality of condors permitted at the project would not impede recovery of the species. The population viability analysis report is appended to the draft conservation plan and the draft environmental assessment. A “Frequently Asked Questions” document for the population viability analysis is also attached to the draft environmental assessment. The draft conservation plan and the draft environmental assessment consider alternatives to the proposed action, including a no action alternative.
If you wish to comment on the draft conservation plan and draft environmental assessment, you may submit comments by one of the methods in
You may submit comments by one of the methods shown under
We issue this notice pursuant to section 10(c) of the ESA (16 U.S.C. 1539) and its implementing regulations (50 CFR 17.22), and NEPA (42 U.S.C. 4321
Fish and Wildlife Service, Interior.
Notice of information collection; request for comment.
In accordance with the Paperwork Reduction Act of 1995, we, the U.S. Fish and Wildlife Service (Service), are proposing to renew an information collection.
Interested persons are invited to submit comments on or before January 21, 2021.
Written comments and recommendations for the proposed information collection should be sent within 30 days of publication of this notice to
Madonna L. Baucum, Service Information Collection Clearance Officer, by email at
In accordance with the Paperwork Reduction Act of 1995 (PRA, 44 U.S.C. 3501
On August 26, 2020, we published in the
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 information collection request (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, 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.
• Monitor the quality of services provided by commercial guides.
• Gauge client satisfaction with the services.
• Assess the impacts of the activity on refuge resources.
The client is the best source of information on the quality of commercial guiding services. We collect:
• Client name.
• Guide name(s).
• Type of guided activity.
• Dates and location of guided activity.
• Information on the services received, such as the client's expectations, safety, environmental impacts, and client's overall satisfaction.
We encourage respondents to provide any additional comments that they wish regarding the guide service or refuge experience, and ask whether or not they wish to be contacted for additional information.
The above information, in combination with State-required guide activity reports and contacts with guides and clients in the field, provides a comprehensive method for monitoring permitted commercial guide activities. A regular program of client evaluation helps refuge managers detect potential problems with guide services so that we can take corrective actions promptly. In addition, we use this information during the competitive selection process for big game and sport fishing guide permits to evaluate an applicant's ability to provide a quality guiding service.
The Service is actively reviewing the current evaluation form to identify ways to improve the information collected to:
• Provide more quantifiable and defensible data;
• Provide statistical data for each completed and submitted form;
• Provide more quantifiable rather than qualitative information; and
• Translate the client responses into useful information, in order for refuge management to make informed decisions.
The Service initially planned to submit the new form (tentatively assigned FWS Form 3-2538, “Alaska Guide Service Evaluation”) to OMB for approval to conduct usability testing under OMB Control No. 1090-0011, “DOI Generic Clearance for the Collection of Qualitative Feedback on Agency Service Delivery,” in time to pretest it during the 2020 Alaska guide season. However, the pandemic significantly limited the number of guide trips during the 2020 guide season, necessitating the usability testing be conducted during the 2021 Alaska guide season (and possibly the 2022 season). At the conclusion of the usability testing, the Service will evaluate all feedback of the new evaluation form to determine whether additional updates need to be made to it. At that time, we will begin the process to initiate a revision to this information collection by publishing the required notices in the
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
Fish and Wildlife Service, Interior.
Notice of receipt of permit applications; request for comments.
We, the U.S. Fish and Wildlife Service, have received applications for permits to conduct activities intended to enhance the propagation or survival of endangered or threatened species under the Endangered Species Act. We invite the public and local, State, Tribal, and Federal agencies to comment on these applications. Before issuing any of the requested permits, we will take into consideration any information that we receive during the public comment period.
We must receive your written comments on or before January 21, 2021.
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Susie Tharratt, via phone at 916-414-6561, via email at
We, the U.S. Fish and Wildlife Service, invite the public to comment on applications for permits under section 10(a)(1)(A) of the Endangered Species Act, as amended (ESA; 16 U.S.C. 1531
With some exceptions, the ESA prohibits activities that constitute take of listed species unless a Federal permit is issued that allows such activity. The ESA's definition of “take” includes such activities as pursuing, harassing, trapping, capturing, or collecting, in addition to hunting, shooting, harming, wounding, or killing.
A recovery permit issued by us under section 10(a)(1)(A) of the ESA authorizes the permittee to conduct activities with endangered or threatened species for scientific purposes that promote recovery or for enhancement of propagation or survival of the species. These activities often include such prohibited actions as capture and collection. Our regulations implementing section 10(a)(1)(A) for these permits are found in the Code of Federal Regulations at 50 CFR 17.22 for endangered wildlife species, 50 CFR 17.32 for threatened wildlife species, 50 CFR 17.62 for endangered plant species, and 50 CFR 17.72 for threatened plant species.
Proposed activities in the following permit requests are for the recovery and enhancement of propagation or survival of the species in the wild. The ESA requires that we invite public comment before issuing these permits. Accordingly, we invite local, State, Tribal, and Federal agencies and the public to submit written data, views, or arguments with respect to these applications. The comments and recommendations that will be most useful and likely to influence agency decisions are those supported by quantitative information or studies.
Written comments we receive become part of the administrative record associated with this action. 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 request in your comment that we withhold your personal identifying information from public review, we cannot guarantee that we will be able to do so. All submissions from organizations or businesses, and from individuals identifying themselves as representatives or officials of organizations or businesses, will be made available for public disclosure in their entirety.
If we decide to issue permits to any of the applicants listed in this notice, we will publish a notice in the
We publish this notice under section 10(c) of the Endangered Species Act of 1973, as amended (16 U.S.C. 1531
Fish and Wildlife Service, Interior.
Notice of information collection; request for comment.
In accordance with the Paperwork Reduction Act of 1995, we, the U.S. Fish and Wildlife Service (Service), are proposing to renew an information collection.
Interested persons are invited to submit comments on or before February 22, 2021.
Send your comments on the information collection request (ICR) by mail to the Service Information Collection Clearance Officer, U.S. Fish and Wildlife Service, MS: PRB (JAO/3W), 5275 Leesburg Pike, Falls Church, VA 22041-3803 (mail); or by email to
To request additional information about this ICR, contact Madonna L. Baucum, Service Information Collection Clearance Officer, by email at
In accordance with the Paperwork Reduction Act (PRA, 44 U.S.C. 3501
As part of our continuing effort to reduce paperwork and respondent burdens, we invite the public and other Federal agencies 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.
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, 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. We will include or summarize each comment in our request to OMB to approve this ICR. 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.
The Guidelines discuss various risks to species of concern from wind energy projects, including collisions with wind turbines and associated infrastructure; loss and degradation of habitat from turbines and infrastructure; fragmentation of large habitat blocks into smaller segments that may not support sensitive species; displacement and behavioral changes; and indirect effects such as increased predator populations or introduction of invasive plants. The Guidelines assist developers in identifying species of concern that may potentially be affected by proposed projects, including but not limited to:
• Migratory birds;
• Bats;
• Bald and golden eagles, and other birds of prey;
• Prairie chickens and sage grouse; and
• Species that have been identified as candidates, or proposed or listed under the Endangered Species Act of 1973, as amended (16 U.S.C. 1531
The Guidelines follow a tiered approach. The wind energy developer begins at Tier 1 or Tier 2, which entails gathering of existing data to help identify any potential risks to wildlife and their habitats at proposed wind energy project sites. The developer then proceeds through subsequent tiers, as appropriate, to collect information in increasing detail until the level of risk is adequately ascertained to inform the developer's decision on whether or not to develop the site. Many projects may not proceed beyond Tier 1 or 2, when developers become aware of potential barriers, including high risks to wildlife. Developers would only have an interest in adhering to the Guidelines for those projects that proceed beyond Tier 1 or 2.
At each tier, wind energy developers and operators should retain documentation to provide to the Service. Such documentation may include copies of correspondence with the Service, results of pre- and post-construction studies conducted at project sites, bird and bat conservation strategies, or any other record that supports a developer's adherence to the Guidelines. The extent of the documentation will depend on the conditions of the site being developed. Sites with greater risk of impacts to wildlife and habitats will likely involve more extensive communication with the Service and longer durations of pre- and post-construction studies than sites with little risk.
Distributed or community-scale wind energy projects are unlikely to have significant adverse impacts to wildlife and their habitats. The Guidelines recommend that developers of these small-scale projects conduct the desktop analysis described in Tier 1 or Tier 2 using publicly available information to determine whether they should communicate with the Service. Since such project designs usually include a single turbine associated with existing development, conducting a Tier 1 or Tier 2 analysis for distributed or community-scale wind energy projects should incur limited non-hour burden costs. For such projects, if there is no potential risk identified, a developer will have no need to communicate with the Service regarding the project or to conduct studies described in Tiers 3, 4, and 5.
Adherence to the Guidelines is voluntary. Following the Guidelines does not relieve any individual, company, or agency of the responsibility to comply with applicable laws and regulations (
This information collection was first approved by OMB in 2012 and subsequently renewed twice, in 2015 and 2018.
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
Fish and Wildlife Service, Interior.
Notice of availability and request for public comment.
We, the U.S. Fish and Wildlife Service, announce the availability of the draft recovery plan for the Ozark hellbender, a salamander species. We request review and comment on this draft recovery plan from local, State, and Federal agencies, and the public.
We must receive comments by January 21, 2021.
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•
For more information, see Availability of Public Comments under
Karen Herrington, by phone at 573-234-2132, via email at
We, the U.S. Fish and Wildlife Service (Service), announce the availability of the draft recovery plan for the endangered Ozark hellbender (
Section 4(f) of the Endangered Species Act of 1973, as amended (Act; 16 U.S.C. 1531
The Ozark hellbender is endemic to the White River drainage in northern Arkansas and southern Missouri (Johnson 2000), historically occurring in portions of the Spring, White, Black, Eleven Point, and Current Rivers and some of their tributaries (Bryant Creek, the North Fork White River, and Jacks Fork) (LaClaire 1993). Currently, populations of Ozark hellbenders are known to occur in Bryant Creek, the North Fork White River, the Eleven Point River, and the Current River, with
The primary reason for Ozark hellbender population declines remains unclear. However, several potential factors have been identified and include degraded water quality, habitat loss resulting from impoundments and sedimentation, disease, illegal and/or scientific collection, and potential increased predation from some native and non-native species of stocked fish (Service 2011). Population declines have necessitated the use of captive propagation efforts to ensure the long-term survival of the species until threats are better understood and abated.
Under the Act, the Service added the Ozark hellbender to the Federal List of Endangered and Threatened Wildlife as an endangered species on October 6, 2011 (76 FR 61956). This final rule took effect on November 7, 2011.
The draft recovery criteria are summarized below. For the recovery strategy, management actions, and estimated time and costs associated with recovery, refer to the Draft Recovery Plan for the Ozark hellbender (see
The ultimate recovery goal is to remove the Ozark hellbender from the Federal List of Endangered and Threatened Wildlife (“delist”) by ensuring the long-term viability of the species in the wild. In the recovery plan, we define the following criteria for reclassification (“downlisting” from endangered to threatened) and delisting based on the best available information on the species.
Because each of the three extant Ozark hellbender populations is genetically unique, all three populations are necessary to maintain the evolutionary potential of the species. Given the small range of each population, the persistence of all three populations is also necessary to guard against extinction from catastrophic events such as extreme flooding, drought, and chemical spills. Therefore, to downlist the Ozark hellbender, the following criteria should be achieved for each of three Ozark hellbender populations (the North Fork White River, Eleven Point River, and Current River):
1. There is a positive population trend for a 15 year period.
2. There is evidence of successful recruitment to maintain a sustaining population, with recruitment defined as attainment of sexual maturity by young.
3. Habitat quantity and quality are sufficient to support all life stages.
4. Within each watershed the number and distribution of occupied habitat patches and abundance of individuals within these patches is such that (1) the population is resilient to stochastic and catastrophic events and (2) connectivity and gene flow is sufficient to maintain genetic diversity and provide for natural re-establishment if a patch is extirpated.
5. Causes of population declines have been identified, and it is clear what actions are needed to address these threats.
To delist the Ozark hellbender, the following criteria should be achieved for each of three Ozark hellbender populations (the North Fork White River, Eleven Point River, and Current River):
1. Downlisting criteria have been met.
2. Threats and causes of decline have been reduced or eliminated such that delisting criterion 1 will continue to be met into the foreseeable future.
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.
The authority for this action is section 4(f) of the Endangered Species Act, 16 U.S.C. 1533(f).
U.S. International Trade Commission.
Notice.
Notice is hereby given that the U.S. International Trade Commission has found a violation of section 337 in the above-captioned investigation. The Commission has determined to issue a limited exclusion order (“LEO”) prohibiting the importation by respondents Daewoong Pharmaceuticals Co., Ltd. (“Daewoong”) of Seoul, South Korea and Evolus, Inc. (“Evolus”) of Irvine, California (collectively, “Respondents”) of certain botulinum toxin products, processes for manufacturing or relating to same and certain products containing same. The Commission has also issued a cease and desist order (“CDO”) directed to respondent Evolus. The investigation is terminated.
Houda Morad, Office of the General Counsel, U.S. International Trade Commission, 500 E Street SW, Washington, DC 20436, telephone (202) 708-4716. Copies of non-confidential documents filed in connection with this investigation may be viewed on the Commission's electronic docket (EDIS) at
On March 6, 2019, the Commission instituted this investigation under section 337 of the Tariff Act of 1930, as amended, 19 U.S.C. 1337 (“section 337”), based on a complaint filed by Medytox Inc. of Seoul, South Korea; Allergan Limited of Dublin, Ireland; and Allergan, Inc. of
On July 6, 2020, the Administrative Law Judge (“ALJ”) issued a final initial determination (“FID”) finding a violation of section 337 based on the importation and sale in the United States of Respondents' botulinum neurotoxin products by reason of the misappropriation of trade secrets, the threat or effect of which is to destroy or substantially injure an industry in the United States.
On July 28, 2020, the Commission issued a notice requesting statements on the public interest.
On September 21, 2020, the Commission issued a notice determining to review the FID in part.
On October 9, 2020, the parties, including the IA, filed written submissions in response to the WTR/Remedy Notice, and on October 16, 2020, the parties filed responses to each other's submissions. In addition, on October 5-9, 2020, several non-parties filed submissions on the proposed remedy and/or the public interest in response to the WTR/Remedy Notice.
Having examined the record of this investigation, including the FID, the RD, and the parties' and non-parties' submissions, the Commission has determined to affirm the FID in part and reverse in part. Specifically, as explained in the Commission Opinion filed concurrently herewith, the Commission has determined to affirm with modification the FID's findings with respect to subject matter jurisdiction, standing, domestic industry as to BOTOX®, and trade secret existence and misappropriation as it relates to Medytox's manufacturing processes. The Commission has also determined to reverse the FID's finding that a trade secret exists with respect to Medytox's bacterial strain. All findings in the FID that are not inconsistent with the Commission's determination are affirmed.
Accordingly, the Commission finds that there is a violation of section 337. The Commission has determined that the appropriate remedy is an LEO against Respondents' botulinum toxin products, and a CDO against Evolus, barring Respondents' unfair acts for a duration of 21 months. The Commission has also determined that the public interest factors enumerated in subsections 337(d)(1) and (f)(1) (19 U.S.C. 1337(d)(1), (f)(1)) do not preclude the issuance of the LEO and CDO. The Commission has further determined to set a bond during the period of Presidential review in an amount of $441 per 100U vial of Respondents' accused products.
The Commission's orders and opinion were delivered to the President and to the United States Trade Representative on the day of their issuance.
The investigation is terminated.
The Commission's vote on this determination took place on December 16, 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.
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-649 and 731-TA-1523 (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 twist ties from China, provided for in subheadings 8309.90.0000 and 5609.00.3000 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.
December 3, 2020.
Christopher W. Robinson ((202) 205-2542), 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 covering material of a twist tie may be paper (metallic or plain), or plastic, and can be dyed in a variety of colors with or without printing. A twist tie may have the same covering material on both sides or one side of paper and one side of plastic. When comprised of two sides of paper, the paper material is bound together with an adhesive or plastic. A twist tie may also have a tag or label attached to it or a pre-applied adhesive attached to it.
Excluded from the scope of the order are twist ties packaged with bags for sale together where the quantity of twist ties does not exceed twice the number of bags in each package. Also excluded are twists ties that constitute part of the packaging of the imported product, for example, merchandise anchored/secured to a backing with twist ties in the retail package or a bag of bread that is closed with a twist tie.
Twist ties are imported into the United States under Harmonized Tariff Schedule of the United States (HTSUS) subheadings 8309.90.00 and 5609.00.30. Subject merchandise may also be imported under HTSUS subheadings 3920.51.5000, 3923.90.0080, 3926.90.9990, 4811.59.6000, 4821.10.2000, 4821.10.4000, 4821.90.2000, 4821.90.4000, and 4823.90.8600. These HTSUS subheadings are provided for reference only. The written description of the scope of the investigation is dispositive.
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.
Notice is hereby given that, on December 15, 2020, pursuant to Section 6(a) of the National Cooperative Research and Production Act of 1993, 15 U.S.C. 4301
No other changes have been made in either the membership or planned activity of the group research project. Membership in this group research project remains open, and CHEDE-8 intends to file additional written notifications disclosing all changes in membership.
On December 4, 2019, CHEDE-8 filed its original notification pursuant to Section 6(a) of the Act. The Department of Justice published a notice in the
The last notification was filed with the Department on October 20, 2020. A notice was published in the
Notice is hereby given that, on December 3, 2020, pursuant to Section 6(a) of the National Cooperative Research and Production Act of 1993, 15 U.S.C. 4301
Also, IBM, Cambridge, MA; Paradigm, Inc., Virginia Beach, VA; Badgewell, Giza, EGYPT; VidGrid, St. Paul, MN; and Unox Portal (Pragnya Technologies Pty), Sydney, AUSTRALIA, have withdrawn as parties to this venture.
No other changes have been made in either the membership or planned activity of the group research project. Membership in this group research project remains open, and IMS Global intends to file additional written notifications disclosing all changes in membership.
On April 7, 2000, IMS Global filed its original notification pursuant to Section 6(a) of the Act. The Department of Justice published a notice in the
The last notification was filed with the Department on September 16, 2020. A notice was published in the
Drug Enforcement Administration, Justice.
Notice of application.
Fresenius Kabi USA, LLC has applied to be registered as an importer of basic class(es) of controlled substance(s). Refer to
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 January 21, 2021. Such persons may also file a written request for a hearing on the application on or before January 21, 2021.
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: Hearing Clerk/OALJ, 8701 Morrissette Drive, Springfield, Virginia 22152; and (2) Drug Enforcement Administration, Attn: DEA Federal Register Representative/DPW, 8701 Morrissette Drive, Springfield, Virginia 22152.
In accordance with 21 CFR 1301.34(a), this is notice that on August 7, 2020, Fresenius Kabi USA, LLC, 3159 Stanley Road, Grand Island, New York 14072-2028, applied to be registered as an importer of the following basic class(es) of controlled substance(s):
The company plans to import the listed controlled substances for bulk manufacture. No other activity for this drug code is authorized for this registration.
Approval of permit applications will occur only when the registrant's business activity is consistent with what is authorized under 21 U.S.C. 952(a)(2). Authorization will not extend to the import of Food and Drug Administration-approved or non-approved finished dosage forms for commercial sale.
Drug Enforcement Administration, Justice.
Notice of application.
Yourway Transport has applied to be registered as an importer of basic class(es) of controlled substance(s). Refer to
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 January 21, 2021. Such persons may also file a written request for a hearing on the application on or before January 21, 2021.
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: Hearing Clerk/OALJ, 8701 Morrissette Drive, Springfield, Virginia 22152; and (2) Drug Enforcement Administration, Attn: DEA Federal Register Representative/DPW, 8701 Morrissette Drive, Springfield, Virginia 22152.
In accordance with 21 CFR 1301.34(a), this is notice that on July 24, 2020, Yourway Transport, 6681 Snowdrift Road, Allentown, Pennsylvania 18106, applied to be registered as an importer of the following basic class(es) of controlled substance(s):
The company plans to import finished dosage unit products containing Marihuana for clinical trial studies. The Marihuana compound is listed under drug code 7360. No other activity for this drug code is authorized for this registration.
Approval of permit applications will occur only when the registrant's business activity is consistent with what is authorized under 21 U.S.C. 952(a)(2). Authorization will not extend to the import of Food and Drug Administration-approved or non-approved finished dosage forms for commercial sale.
Drug Enforcement Administration, Justice.
Notice of application.
Organic Standards Solutions International, LLC has applied to be registered as an importer of basic class(es) of controlled substance(s). Refer to
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 January 21, 2021. Such persons may also file a written request for a hearing on the application on or before January 21, 2021.
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: Hearing Clerk/OALJ, 8701 Morrissette Drive, Springfield, Virginia 22152; and (2) Drug Enforcement Administration, Attn: DEA Federal Register Representative/DPW, 8701 Morrissette Drive, Springfield, Virginia 22152.
In accordance with 21 CFR 1301.34(a), this is notice that on October 30, 2020, Organic Standards Solutions International, LLC, 7290 Investment Drive, Unit B, North Charleston, South Carolina 29418-8305, applied to be registered as an importer of the
The company plans to import the above-listed controlled substances to produce analytical reference standards for distribution to its customers. Drug codes 7350 (Marihuana Extract) and 7360 (Marihuana) will be used for the manufacture of cannabidiol only. In reference to drug code 7370 (Tetrahydrocannabinols), the company plans to import the synthetic version of this controlled substance to produce analytical reference standards for distribution to its customers. No other activity for these drug codes is authorized for this registration.
Approval of permit applications will occur only when the registrant's business activity is consistent with what is authorized under 21 U.S.C. 952(a)(2). Authorization will not extend to the import of Food and Drug Administration-approved or non-approved finished dosage forms for commercial sale.
U.S. Marshals Service, Department of Justice.
60-day notice.
The Department of Justice (DOJ), U.S. Marshals Service (USMS), will submit the following information collection request to the Office of Management and Budget (OMB) for review and approval in accordance with the Paperwork Reduction Act of 1995.
Comments are encouraged and will be accepted for 60 days until February 22, 2021.
If you have additional comments, particularly with respect to the estimated public burden or associated response time, have suggestions, need a copy of the proposed information collection instrument with instructions, or desire any additional information, please contact Nicole Timmons either by mail at CG-3, 10th Floor, Washington, DC 20530-0001, by email at
Written comments and suggestions from the public and affected agencies concerning the proposed collection of information are encouraged. Your comments should address one or more of the following four points:
1.
2.
3.
Form number (if applicable): Form USM-649.
Component: U.S. Marshals Service, U.S. Department of Justice.
4.
Primary: State, local, and tribal organizations.
Other (if applicable): [None].
Abstract: This form should be completed by state, local and tribal government agencies to request a vulnerability assessment of a government facility by the United States Marshals Service.
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.
In accordance with the Section 223 (19 U.S.C.2273) of the Trade Act of 1974 (19 U.S.C.2271,
In order for an affirmative determination to be made for workers of a primary firm and a certification issued regarding eligibility to apply for TAA, the group eligibility requirements under Section 222(a) of the Act (19 U.S.C. 2272(a)) must be met, as follows:
(1) The first criterion (set forth in Section 222(a)(1) of the Act, 19 U.S.C. 2272(a)(1)) is that a significant number or proportion of the workers in such
AND (2(A) or 2(B) below)
(2) The second criterion (set forth in Section 222(a)(2) of the Act, 19 U.S.C. 2272(a)(2)) may be satisfied by either (A) the Increased Imports Path, or (B) the Shift in Production or Services to a Foreign Country Path/Acquisition of Articles or Services from a Foreign Country Path, as follows:
(i) the sales or production, or both, of such firm, have decreased absolutely;
AND (ii and iii below)
(ii) (I) imports of articles or services like or directly competitive with articles produced or services supplied by such firm have increased; OR
(II)(aa) imports of articles like or directly competitive with articles into which one or more component parts produced by such firm are directly incorporated, have increased; OR
(II)(bb) imports of articles like or directly competitive with articles which are produced directly using the services supplied by such firm, have increased; OR
(III) imports of articles directly incorporating one or more component parts produced outside the United States that are like or directly competitive with imports of articles incorporating one or more component parts produced by such firm have increased;
AND
(iii) the increase in imports described in clause (ii) contributed importantly to such workers' separation or threat of separation and to the decline in the sales or production of such firm; OR
(i) (I) there has been a shift by such workers' firm to a foreign country in the production of articles or the supply of services like or directly competitive with articles which are produced or services which are supplied by such firm; OR
(II) such workers' firm has acquired from a foreign country articles or services that are like or directly competitive with articles which are produced or services which are supplied by such firm;
AND
(ii) the shift described in clause (i)(I) or the acquisition of articles or services described in clause (i)(II) contributed importantly to such workers' separation or threat of separation.
In order for an affirmative determination to be made for adversely affected secondary workers of a firm and a certification issued regarding eligibility to apply for TAA, the group eligibility requirements of Section 222(b) of the Act (19 U.S.C. 2272(b)) must be met, as follows:
(1) A significant number or proportion of the workers in the workers' firm or an appropriate subdivision of the firm have become totally or partially separated, or are threatened to become totally or partially separated;
AND
(2) the workers' firm is a supplier or downstream producer to a firm that employed a group of workers who received a certification of eligibility under Section 222(a) of the Act (19 U.S.C. 2272(a)), and such supply or production is related to the article or service that was the basis for such certification (as defined in subsection 222(c)(3) and (4) of the Act (19 U.S.C. 2272(c)(3) and (4));
AND
(3) either—
(A) the workers' firm is a supplier and the component parts it supplied to the firm described in paragraph (2) accounted for at least 20 percent of the production or sales of the workers' firm; OR
(B) a loss of business by the workers' firm with the firm described in paragraph (2) contributed importantly to the workers' separation or threat of separation determined under paragraph (1).
In order for an affirmative determination to be made for adversely affected workers in firms identified by the International Trade Commission and a certification issued regarding eligibility to apply for TAA, the group eligibility requirements of Section 222(e) of the Act (19 U.S.C. 2272(e))must be met, by following criteria (1), (2), and (3) as follows:
(1) The workers' firm is publicly identified by name by the International Trade Commission as a member of a domestic industry in an investigation resulting in—
(A) an affirmative determination of serious injury or threat thereof under section 202(b)(1) of the Act (19 U.S.C. 2252(b)(1)); OR
(B) an affirmative determination of market disruption or threat thereof under section 421(b)(1) of the Act (19 U.S.C. 2436(b)(1)); OR
(C) an affirmative final determination of material injury or threat thereof under section 705(b)(1)(A) or 735(b)(1)(A) of the Tariff Act of 1930 (19 U.S.C. 1671d(b)(1)(A) and 1673d(b)(1)(A));
AND
(2) the petition is filed during the 1-year period beginning on the date on which—
(A) a summary of the report submitted to the President by the International Trade Commission under section 202(f)(1) of the Trade Act (19 U.S.C. 2252(f)(1)) with respect to the affirmative determination described in paragraph (1)(A) is published in the
(B) notice of an affirmative determination described in subparagraph (B) or (C) of paragraph (1) is published in the
AND
(3) the workers have become totally or partially separated from the workers' firm within—
(A) the 1-year period described in paragraph (2); OR
(B) notwithstanding section 223(b) of the Act (19 U.S.C. 2273(b)), the 1-year period preceding the 1-year period described in paragraph (2).
The following certifications have been issued. The date following the company name and location of each determination references the impact date for all workers of such determination.
The following certifications have been issued. The requirements of Section 222(a)(2)(A) (Increased Imports Path) of the Trade Act have been met.
The following certifications have been issued. The requirements of Section 222(a)(2)(B) (Shift in Production or Services to a Foreign Country Path or Acquisition of Articles or Services from a Foreign Country Path) of the Trade Act have been met.
The following certifications have been issued. The requirements of Section 222(b) (supplier to a firm whose workers are certified eligible to apply for TAA) of the Trade Act have been met.
The following certifications have been issued. The requirements of Section 222(b) (downstream producer to a firm whose workers are certified eligible to apply for TAA) of the Trade Act have been met.
The following certifications have been issued. The requirements of Section 222(e) (firms identified by the International Trade Commission) of the Trade Act have been met.
In the following cases, the investigation revealed that the eligibility criteria for TAA have not been met for the reasons specified.
The investigation revealed that the requirements of Trade Act section 222(a)(1) and (b)(1) (significant worker total/partial separation or threat of total/partial separation), or (e) (firms identified by the International Trade Commission), have not been met.
The investigation revealed that the criteria under paragraphs (a)(2)(A)(i) (decline in sales or production, or both), or (a)(2)(B) (shift in production or services to a foreign country or acquisition of articles or services from a foreign country), (b)(2) (supplier to a firm whose workers are certified eligible to apply for TAA or downstream producer to a firm whose workers are certified eligible to apply for TAA), and (e) (International Trade Commission) of section 222 have not been met.
The investigation revealed that the criteria under paragraphs (a)(2)(A) (increased imports), (a)(2)(B) (shift in production or services to a foreign country or acquisition of articles or services from a foreign country), (b)(2) (supplier to a firm whose workers are certified eligible to apply for TAA or downstream producer to a firm whose workers are certified eligible to apply for TAA), and (e) (International Trade Commission) of section 222 have not been met.
After notice of the petitions was published in the
The following determinations terminating investigations were issued because the petitioner has requested that the petition be withdrawn.
The following determinations terminating investigations were issued in cases where the petition regarding the investigation has been deemed invalid.
The following determinations terminating investigations were issued because the worker group on whose behalf the petition was filed is covered under an existing certification.
I hereby certify that the aforementioned determinations were issued during the period of
In accordance with Sections 223 and 284 (19 U.S.C. 2273 and 2395) of the Trade Act of 1974 (19 U.S.C. 2271,
Revised certifications of eligibility have been issued with respect to cases where affirmative determinations and certificates of eligibility were issued initially, but a minor error was discovered after the certification was issued. The revised certifications are issued pursuant to the Secretary's authority under section 223 of the Act and 29 CFR 90.16. Revised Certifications of Eligibility are final determinations for purposes of judicial review pursuant to section 284 of the Act (19 U.S.C. 2395) and 29 CFR 90.19(a).
The following revised certifications of eligibility to apply for TAA have been issued. The date following the company name and location of each determination references the impact date for all workers of such determination, and the reason(s) for the determination.
The following revisions have been issued.
I hereby certify that the aforementioned determinations were issued during the period of
Petitions have been filed with the Secretary of Labor under Section 221(a) of the Trade Act of 1974 (“the Act”) and are identified in the Appendix to this notice. Upon receipt of these petitions, the Administrator of the Office of Trade Adjustment Assistance, Employment and Training Administration, has instituted investigations pursuant to Section 221(a) of the Act.
The purpose of each of the investigations is to determine whether the workers are eligible to apply for adjustment assistance under Title II, Chapter 2, of the Act. The investigations will further relate, as appropriate, to the determination of the date on which total or partial separations began or threatened to begin and the subdivision of the firm involved.
The petitioners or any other persons showing a substantial interest in the subject matter of the investigations may request a public hearing provided such request is filed in writing with the Administrator, Office of Trade Adjustment Assistance, at the address shown below, no later than January 4, 2021.
Interested persons are invited to submit written comments regarding the subject matter of the investigations to the Administrator, Office of Trade Adjustment Assistance, at the address shown below, not later than January 4, 2021.
The petitions filed in this case are available for inspection at the Office of the Administrator, Office of Trade Adjustment Assistance, Employment and Training Administration, U.S. Department of Labor, Room N-5428,
Notice of availability; request for comments.
The Department of Labor (DOL) is submitting this Employment and Training Administration (ETA)-sponsored information collection request (ICR) to the Office of Management and Budget (OMB) for review and approval in accordance with the Paperwork Reduction Act of 1995 (PRA). Public comments on the ICR are invited.
The OMB will consider all written comments that agency receives on or before January 21, 2021.
Written comments and recommendations for the proposed information collection should be sent within 30 days of publication of this notice to
Comments are invited on: (1) Whether the collection of information is necessary for the proper performance of the functions of the Department, including whether the information will have practical utility; (2) if the information will be processed and used in a timely manner; (3) the accuracy of the agency's estimates of the burden and cost of the collection of information, including the validity of the methodology and assumptions used; (4) ways to enhance the quality, utility and clarity of the information collection; and (5) ways to minimize the burden of the collection of information on those who are to respond, including the use of automated collection techniques or other forms of information technology.
Mara Blumenthal by telephone at 202-693-8538, or by email at
Sections 410 and 423 of the Robert T. Stafford Disaster Relief and Emergency Assistance Act provide for Disaster Unemployment Assistance (DUA) to eligible applicants who are unemployed as a direct result of a major disaster. State Workforce Agencies, through individual agreements with the Secretary of Labor, act as agents of the Federal government in providing DUA. Form ETA 902 is a monthly report that a State submits on DUA program activities once the President declares a disaster. The Social Security Act section 303(a)(6) authorizes this information collection. For additional substantive information about this ICR, see the related notice published in the
This information collection is subject to the PRA. A Federal agency generally cannot conduct or sponsor a collection of information, and the public is generally not required to respond to an information collection, unless the OMB approves it and displays a currently valid OMB Control Number. In addition, notwithstanding any other provisions of law, no person shall generally be subject to penalty for failing to comply with a collection of information that does not display a valid OMB Control Number.
DOL seeks PRA authorization for this information collection for three (3) years. OMB authorization for an ICR cannot be for more than three (3) years without renewal. The DOL notes that information collection requirements submitted to the OMB for existing ICRs receive a month-to-month extension while they undergo review.
44 U.S.C. 3507(a)(1)(D).
Office of the Federal Register.
Notice of special procedures.
In the event of an appropriations lapse, the Office of the Federal Register (OFR) would be required to publish documents directly related to the performance of governmental functions necessary to address imminent threats to the safety of human life or protection of property and documents related to funded programs if delaying publication until the end of the appropriations lapse would prevent or significantly damage the execution of funded functions at the agency. Since it would be impracticable for the OFR to make case-by-case determinations as to whether certain documents are directly related to activities that qualify for an exemption under the Antideficiency Act, the OFR will place responsibility on agencies submitting documents to certify that their documents are authorized under the Act.
Katerina Horska, Director of Legal Affairs and Policy, or Miriam Vincent, Staff Attorney, Office of the Federal Register, National Archives and Records Administration, (202) 741-6030 or
Due to the possibility of a lapse in appropriations
In the event of an appropriations lapse, the OFR would be required to publish documents directly related to the performance of governmental functions necessary to address imminent threats to the safety of human life or protection of property and documents related to funded programs if delaying publication until the end of the appropriations lapse would prevent or significantly damage the execution of funded functions at the agency. Since it would be impracticable for the OFR to make case-by-case determinations as to whether certain documents are directly related to activities that qualify for an exemption under the Antideficiency Act, the OFR will place responsibility on agencies submitting documents to certify that their documents are authorized under the Act.
During a funding hiatus affecting one or more Federal agencies, the OFR will remain open to accept and process documents authorized to be published in the daily
• To safeguard human life, protect property, or
• Provide other emergency services consistent with the performance of functions and services exempted under the Antideficiency Act.
• Because delaying publication until the end of the appropriations lapse would prevent or significantly damage the execution of funded functions at the agency.
Under the August 16, 1995 opinion of the Office of Legal Counsel of the Department of Justice (OLC),
In another opinion issued on December 13, 1995,
At the onset of a funding hiatus, the OFR may suspend the regular three-day publication schedule to permit a limited number of exempt personnel to process emergency documents. Agency officials will be informed as to the schedule for filing and publishing individual documents.
OFR has posted frequently asked questions and transmittal letter templates on the following website, which will be updated as possible:
The authority for this action is 44 U.S.C. 1502 and 1 CFR 2.4 and 5.1.
National Archives and Records Administration (NARA).
Notice of proposed extension request.
We propose to request an extension from the Office of Management and Budget (OMB) of a currently approved information collection used by individuals applying for a research card. Research cards are necessary for access to original archival records in a National Archives and Records Administration facility. We invite you to comment on this proposed information collection pursuant to the Paperwork Reduction Act of 1995.
We must receive written comments on or before February 22, 2021.
Send comments by email to
Tamee Fechhelm, Paperwork Reduction Act Officer, by email at
Pursuant to the Paperwork Reduction Act of 1995 (Pub. L. 104-13), NARA invites the public and other Federal agencies to comment on proposed information collections. The comments and suggestions should address one or more of the following points: (a) Whether the proposed information collection is necessary for NARA to properly perform its functions; (b) our estimate of the burden of the proposed information collection and its accuracy; (c) ways we could enhance the quality, utility, and clarity of the information we collect; (d) ways we could minimize the burden on respondents of collecting the information, including through information technology; and (e) whether this collection affects small businesses. We will summarize any comments you submit and include the summary in our request for OMB approval. All comments will become a matter of public record.
In this notice, we solicit comments concerning the following information collection:
National Credit Union Administration (NCUA).
Notice.
The National Credit Union Administration (NCUA) will be submitting the following information collection requests to the Office of Management and Budget (OMB) for review and clearance in accordance with the Paperwork Reduction Act of 1995 on or after the date of publication of this notice.
Comments should be received on or before January 21, 2021 to be assured of consideration.
Written comments and recommendations for the proposed information collection should be sent within 30 days of publication of this notice to
Copies of the submission may be obtained by contacting Dawn Wolfgang at (703) 548-2279, emailing
NCUA utilizes the information to monitor financial conditions in corporate credit unions and to allocate supervision and examination resources.
The recordkeeping and disclosure requirements prescribed under § 1026.35 are necessary to protect consumers, and promote the safety and soundness of creditors making higher-risk mortgage loans.
By Melane Conyers-Ausbrooks, Secretary of the Board, the National Credit Union Administration, on December 16, 2020.
National Credit Union Administration (NCUA).
Notice and request for comment.
The National Credit Union Administration (NCUA), as part of a continuing effort to reduce paperwork and respondent burden, invites the general public and other Federal agencies to comment on the following extension of a currently approved collection, as required by the Paperwork Reduction Act of 1995.
Written comments should be received on or before February 22, 2021 to be assured consideration.
Interested persons are invited to submit written comments on the information collection to Dawn Wolfgang, National Credit Union Administration, 1775 Duke Street, Suite 6032, Alexandria, Virginia 22314; Fax No. 703-548-2279; or email at
Address requests for additional information to Dawn Wolfgang at the address above or telephone 703-548-2279.
The Dodd-Frank Wall Street Reform and Consumer Protection Act (DFA) amended a number of consumer financial protection laws, including most provisions of FCRA. In addition to substantive amendments, the DFA transferred rulemaking authority for
The DFA did not transfer certain rulemaking authority under FCRA. Specifically, the DFA did not transfer to CFPB the authority to promulgate the requirement to properly dispose of consumer information; rules on identity theft red flags and corresponding interagency guidelines on identity theft detection, prevention, and mitigation, and rules on the duties of card issuers regarding changes of address. These provisions are promulgated in NCUA's Fair Credit Reporting regulation, 12 CFR 717, which applies to federal credit unions.
The collection of information pursuant to Parts 1022 and 717 is triggered by specific events and disclosures and must be provided to consumers within the time periods established under the regulation.
By Melane Conyers-Ausbrooks, Secretary of the Board, the National Credit Union Administration, on December 16, 2020.
National Science Foundation.
Submission for OMB Review; comment request.
The National Science Foundation (NSF) has submitted the following information collection requirement to OMB for review and clearance under the Paperwork Reduction Act of 1995. This is the second notice for public comment; the first was published in the
Written comments and recommendations for the proposed information collection should be sent within 30 days of publication of this notice to
Suzanne H. Plimpton, Reports Clearance Officer, National Science Foundation, 2415 Eisenhower Avenue, Alexandria, VA 22314, or send email to
Copies of the submission may be obtained by calling 703-292-7556.
NSF 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.
“To promote the progress of science; to advance the national
health, prosperity, and welfare; to secure the national defense.* * *”
The Act authorized and directed NSF to initiate and support:
☐ Basic scientific research and research fundamental to the engineering process;
☐ Programs to strengthen scientific and engineering research potential;
☐ Science and engineering education programs at all levels and in all the various fields of science and engineering;
☐ Programs that provide a source of information for policy formulation; and
☐ Other activities to promote these ends.
Among Federal agencies, NSF is a leader in providing the academic community with advanced instrumentation needed to conduct state-of-the-art research and to educate the next generation of scientists, engineers and technical workers. The knowledge generated by these tools sustains U.S. leadership in science and engineering (S&E) to drive the U.S. economy and secure the future. NSF's responsibility is to ensure that the research and education communities have access to these resources, and to provide the support needed to utilize them optimally, and implement timely upgrades.
The scale of advanced instrumentation ranges from small research instruments to shared resources or facilities that can be used by entire communities. The demand for such instrumentation is very high, and is growing rapidly, along with the pace of discovery. For major facilities and shared infrastructure, the need is particularly high. This trend is expected to accelerate in the future as increasing numbers of researchers and educators rely on such large facilities, instruments, and databases to provide the reach to make the next intellectual leaps. NSF currently provides support for facility construction from two accounts: The Major Research Equipment and Facility Construction (MREFC) account, and the Research and Related Activities (R&RA) account. The
The growth and diversification of large facility projects require that NSF remain attentive to the ever-changing issues and challenges inherent in their planning, construction, operation, management and oversight. Most importantly, dedicated, competent NSF and awardee staff are needed to manage and oversee these projects; giving the attention and oversight that good practice dictates and that proper accountability to taxpayers and Congress demands. To this end, there is also a need for consistent, documented requirements and procedures to be understood and used by NSF program managers and awardees for all such major projects.
These reviews are not considered audits but are intended to be assistive in nature; aiding the Recipient in following good practices where appropriate and bringing them into compliance, if needed. A team of BSR Participants is assembled to assess the Recipient's policies, procedures, and practices to determine whether, taken collectively, these administrative business systems used in managing the Facility meet NSF award expectations and comply with Federal regulations.
The BSR Guide is designed for use by both our customer community and NSF staff for guidance in leading these reviews. The BSR Guide defines the overall framework and structure and summarizes the details outlined in the internal operating guidelines and procedures used by BSR Participants to execute the review process. Management principles and practices are specified for seven core functional areas (CFA) and are used by BSR Participants in performing these evaluations. Roles and responsibilities of the NSF stakeholders involved in the process are outlined in the BSR Guide as well as the expectations of the Recipient.
This version of the Business Systems Guide aligns with the Uniform Guidance and the
This Guide will be updated periodically to reflect changes in requirements, policies and/or procedures. Award Recipients are expected to monitor and adopt the requirements and best practices included in the Guide.
The submission of Award Recipient and Project administrative business process and procedural documentation used in support of operations of the Major Facilities is part of the collection of information. This information is used to help NSF fulfill this responsibility in supporting merit-based research and education projects in all the scientific and engineering disciplines. The Foundation also has a continuing commitment to provide oversight on facilities design and construction which must be balanced against monitoring its information collection so as to identify and address any excessive review and reporting burdens.
NSF has approximately twenty-four (24) Major Facilities in various stages of design, construction, operations and divestment. The need for a BSR and review scope is based on NSF's internal annual Major Facility Portfolio Risk Assessment and the assessment of various risks factors.
Office of Science and Technology Policy (OSTP), Networking and Information Technology Research and Development (NITRD) National Coordination Office (NCO), National Science Foundation.
Request for information.
OSTP and the National Science and Technology Council's (NSTC) Subcommittees on the Future Advanced Computing Ecosystem (FACE) and Networking and Information Technology Research and Development (NITRD) request input from interested parties on the goals, value, and necessary approaches for establishing a National Strategic Computing Reserve (NSCR). The NSCR may be envisioned as a coalition of experts and resource providers that could be mobilized quickly to provide critical computational resources (including compute, software, data, and technical expertise) in times of urgent need. This Request for Information will help inform potential attributes of a NSCR.
Interested persons are invited to submit comments on or before 11:59 p.m. (ET) on January 16, 2021.
Comments submitted in response to this notice may be sent by any of the following methods:
•
•
•
In accordance with FAR 15.202(3), responses to this notice are not offers and cannot be accepted by the Government to form a binding contract. Responders are solely responsible for all expenses associated with responding to this RFI.
Ji Lee at
The prompt, successful, and nimble deployment of computational resources (including expertise) via the COVID-19 High-Performance Computing (HPC) Consortium has demonstrated its essential role in the Nation's response to emergencies. This backdrop has led to the conceptualization of a National Strategic Computing Reserve (NSCR), comprising a coalition of experts and resource providers that could be mobilized quickly to provide critical computational resources (including compute, software, data, and technical expertise) in times of urgent need.
• Worked together across institutional and organizational boundaries within government, industry, and academia to create a common portal to access computational resources and to coalesce ad hoc efforts in smaller “consortia” around the country;
• Ramped up quickly to meet urgent computational resource requirements not easily available through other means; this ramp-up included the development and adaptation of review, matching and on-boarding processes for accessing these resources;
• Set up a communications and user engagement framework for a worldwide community; and
• Accelerated explorations in basic understanding of the SARS-CoV2 virus, its host interactions, strategies to mitigate its spread, and early-stage drug development.
With this RFI, we seek to aggregate the lessons learned from the COVID-19 HPC Consortium with other broader community input towards the potential design of a NSCR effort.
1.
2.
3.
4.
5.
6.
7.
Submitted by the National Science Foundation in support of the Office of Science and Technology Policy and the Networking and Information Technology Research and Development National Coordination Office on December 16, 2020.
9:30 a.m., Tuesday, January 12, 2021.
Virtual.
The one item may be viewed by the public through webcast only.
Candi Bing at (202) 590-8384 or by email at
Media Information Contact: Keith Holloway by email at
This meeting will take place virtually. The public may view it through a live
There may be changes to this event due to the evolving situation concerning the novel coronavirus (COVID-19). Schedule updates, including weather-related cancellations, are also available at
The National Transportation Safety Board is holding this meeting under the Government in the Sunshine Act, 5 U.S.C. 552(b).
Nuclear Regulatory Commission.
Order; issuance.
The U.S. Nuclear Regulatory Commission (NRC) is issuing an order to ConverDyn suspending its authority to export certain source material to the United Kingdom (U.K.). This suspension is required due to the U.K.'s exit from the European Atomic Energy Community (EURATOM). Exports of EURATOM-obligated and Canadian-obligated source material to the U.K. are currently not authorized.
This Order is effective on January 1, 2021.
Please refer to Docket ID NRC-2020-0271 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:
•
•
•
Lauren Mayros, Office of International Programs, U.S. Nuclear Regulatory Commission, Washington, DC 20555-0001; telephone: 301-287-9088, email:
The United States engages in significant nuclear cooperation with other nations, including the authorized distribution of source material, pursuant to the terms of an Agreement for Cooperation in Peaceful Uses of Nuclear Energy (123 Agreement). ConverDyn currently holds two specific licenses, XSOU8846/01 and XSOU8789/07, authorizing the export of source material to several countries including the U.K. ConverDyn's export licenses were issued under the legal framework of the 123 Agreement between the U.S. and EURATOM.
On December 31, 2020, the U.K. will exit from EURATOM, and on January 1, 2021, a 123 Agreement between the U.S. and the U.K. will enter into force. The U.S. Government has already made arrangements with the Government of the U.K. for this transition to occur on January 1, 2021 for all NRC-licensed exports to the U.K. However, beginning on January 1, 2021, the NRC is currently unable to authorize the export of EURATOM-obligated and Canadian-obligated material from the U.S. to the U.K., until pre-approval to retransfer such material to the U.K. is received from EURATOM or the Canadian government, respectively.
This suspension is required as an operation of law and only applies to exports of EURATOM-obligated or Canadian-obligated source material to the U.K. The NRC is reproducing the text of the order as an attachment to this
For the Nuclear Regulatory Commission.
ConverDyn (or “the licensee”) holds specific licenses XSOU8846/01 and XSOU8789/07 issued by the U.S. Nuclear Regulatory Commission (NRC) pursuant to Sections 62 and 127 of the Atomic Energy Act of 1954, as amended (AEA) and 10 CFR part 110. These specific licenses authorize the export of source material to France, Germany, the Netherlands, and the United Kingdom (U.K.) under the terms of an Agreement for Cooperation in Peaceful Uses of Nuclear Energy (123 Agreement) between the United States (U.S.) and the European Atomic Energy Community (EURATOM).
On December 31, 2020, the formal transition period marking the United Kingdom's (U.K.) exit from the European Union (EU) will end. On this date, the U.K. will also exit from EURATOM. On January 1, 2021, the U.S./U.K.123 Agreement will enter into force. At that time, ConverDyn's export licenses, XSOU8846/01 and XSOU8789/07 will authorize exports to France, Germany, and the Netherlands under the legal framework of the U.S./EURATOM 123 agreement and will authorize exports to the U.K. under the legal framework of the U.S./U.K. 123 Agreement. After the U.K. exits EURATOM, the NRC is prohibited from authorizing any exports of EURATOM-obligated material from the U.S. to the U.K. until EURATOM, pursuant to the U.S./EURATOM 123 agreement, provides its pre-approval to retransfer EURATOM-obligated material from the U.S. to the U.K. The NRC is likewise prohibited from authorizing any exports of Canadian-obligated material from the U.S. to the U.K. until the Government of Canada, pursuant to the U.S./Canada 123 Agreement, provides its pre-approval to retransfer Canadian-obligated material to the U.K.
The U.S. Government has already made arrangements with the Government of the U.K. for the transition from the U.S./EURATOM 123 Agreement to the U.S./U.K. 123 Agreement to automatically occur on January 1, 2021, for all NRC-approved export licenses to the U.K. However, the
Accordingly, pursuant to Sections 62, 64, 123, 127, 161b, 161i, 183, and 186 of the AEA, and 10 CFR 110.50(a)(1) and (2) and 110.52, IT IS HEREBY ORDERED, EFFECTIVE January 1, 2021, THAT LICENSES XSOU8846/01 AND XSOU8789/07 ARE MODIFIED AS FOLLOWS:
A. The licensee's authorization to export EURATOM-obligated material to the U.K. is suspended, and such exports are prohibited, until the licensee receives notice from the NRC that the United States Government has obtained EURATOM's pre-approval, pursuant to the U.S./EURATOM 123 Agreement, to retransfer EURATOM-obligated material to the U.K. When the licensee receives such notice from the NRC, this provision of the Order will expire without any further action by the NRC.
B. The licensee's authorization to export Canadian-obligated material to the U.K. is suspended, and such exports are prohibited, until the licensee receives notice from the NRC that the United States Government has obtained Canada's approval, pursuant to the U.S./Canada 123 Agreement, to retransfer Canadian-obligated material to the U.K. When the licensee receives such notice from the NRC, this provision of the Order will expire without any further action by the NRC.
The NRC finds that this action is required by operation of law and the common defense and security of the United States. Therefore, in accordance with 10 CFR 110.52(c), the licensee need not be afforded an opportunity to reply and be heard prior to issuance of this Order.
Dated at Rockville, Maryland this 16th day of December 2020.
Pension Benefit Guaranty Corporation.
Notice of request for OMB approval of revised collection of information.
The Pension Benefit Guaranty Corporation (PBGC) is modifying the collection of information under its regulation on Payment of Premiums (OMB control number 1212-0009; expiring December 31, 2022) and requests that the Office of Management and Budget (OMB) approve the revised collection of information under the Paperwork Reduction Act for three years. This notice informs the public of PBGC's request and solicits public comment on the collection of information
Comments must be submitted on or before January 21, 2021.
Written comments and recommendations for the proposed information collection should be sent within 30 days of publication of this notice to
A copy of the request will be posted on PBGC's website at
Melissa Rifkin (
Section 4007 of title IV of the Employee Retirement Income Security Act of 1974 (ERISA) requires pension plans covered under title IV pension insurance programs to pay premiums to PBGC. All plans covered by title IV pay a flat-rate per-participant premium. An underfunded single-employer plan also pays a variable-rate premium based on the value of the plan's unfunded vested benefits.
Pursuant to section 4007, PBGC has issued its regulation on Payment of Premiums (29 CFR part 4007). Under § 4007.3 of the premium payment regulation, the plan administrator of each pension plan covered by title IV of ERISA is required to file a premium payment and information prescribed by PBGC for each premium payment year. Premium information is filed electronically using “My Plan Administration Account” (“My PAA”) through PBGC's website. Under § 4007.10 of the premium payment regulation, plan administrators are required to retain records about premiums and information submitted in premium filings.
Premium filings report (i) the flat-rate premium and related data (all plans), (ii) the variable-rate premium and related data (single-employer plans), and (iii) additional data such as identifying information and miscellaneous plan-related or filing-related data (all plans). PBGC needs this information to identify the plans for which premiums are paid, to verify whether the amounts paid are correct, to help PBGC determine the magnitude of its exposure in the event of plan termination, to help track the creation of new plans and transfer of participants and plan assets and liabilities among plans, and to keep PBGC's insured-plan inventory up to date. That information and the retained records are also needed for audit purposes.
PBGC intends to modify the 2021 premium filing to require certain plans that transferred assets to another plan (or received assets from another plan) at the beginning of the plan year to report additional information about the transfer. More specifically, such plans will be required to report whether the transfer was de minimis and, in the case of a de minimis merger, whether the transferee plan had fewer assets than the transferor plan. This information is necessary to verify that the date reported as the “participant count date” (
PBGC also intends to update the premium rates and make conforming, clarifying, and editorial changes. One such change, to conform with the Setting Every Community Up for Retirement Enhancement (SECURE) Act of 2019, is adding the option of “CSEC
The collection of information under the regulation has been approved through December 21, 2022, by OMB under control number 1212-0009. On August 21, 2020, PBGC published in the
PBGC estimates that it will receive 31,245 premium filings per year from 31,245 plan administrators under this collection of information. PBGC further estimates that the annual burden of this collection of information is 13,540 hours and $21,621,540.
Issued in Washington, DC, by.
President's Commission on White House Fellowships, Office of Personnel Management.
Notice of meeting.
The President's Commission on White House Fellowships (PCWHF) was established by an Executive Order in 1964. The PCWHF is an advisory committee composed of Special Government Employees appointed by the President.
Elizabeth D. Pinkerton, 712 Jackson Place NW, Washington, DC 20503, Phone: 202-395-4522.
The meeting is closed.
President's Commission on White House Fellowships.
Postal Regulatory Commission.
Notice.
The Commission is noticing a recent Postal Service filing for the Commission's consideration concerning a negotiated service agreement. 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 December 28, 2020 comment due date applies to Docket Nos. CP2019-198; CP2019-199; CP2020-141; CP2020-184; CP2020-189.
The December 29, 2020 comment due date applies to Docket Nos. CP2020-192; CP2020-193; MC2021-48 and CP2021-50.
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
Railroad Retirement Board (RRB).
Notice of a modified matching program.
As required by the Privacy Act of 1974, as amended, the RRB is issuing public notice of its renewal of an ongoing computer-matching program with the Social Security Administration (SSA). The purpose of this notice is to advise individuals applying for or receiving benefits under the Railroad Retirement Act of the use made by RRB of this information obtained from SSA by means of a computer match. The RRB is also issuing public notice, on behalf of the SSA, of their intent to conduct a computer-matching program based on information provided to them by the RRB.
This matching program becomes effective as proposed without further notice on January 21, 2021. We will file a report of this computer-matching program with the Committee on Homeland Security and Governmental Affairs of the Senate; the Committee on Oversight and Government Reform of the House of Representatives; and the Office of Information and Regulatory Affairs, Office of Management and Budget (OMB).
Interested parties may comment on this publication by writing to Ms. Stephanie Hillyard, Secretary to the Board, Railroad Retirement Board, 844 North Rush Street, Chicago, Illinois 60611-2092.
Mr. Timothy Grant, Associate Chief Information Officer, Railroad Retirement Board, 844 North Rush Street, Chicago, Illinois 60611-2092, telephone 312-751-4869 or email at
The Computer Matching and Privacy Protection Act of 1988, (Pub. L. 100-503), amended by the Privacy Act of 1974, (5 U.S.C. 552a) as amended, requires a Federal agency participating in a computer matching program to publish a notice in the
The Privacy Act, as amended, regulates the use of computer matching by Federal agencies when records contained in a Privacy Act System of Records are matched with other Federal, State, or local government records. It requires Federal agencies involved in computer matching programs to:
(1) Negotiate written agreements with the other agency or agencies participating in the matching programs;
(2) Obtain the approval of the matching agreement by the Data Integrity Boards (DIB) of the participating Federal agencies;
(3) Publish notice of the computer matching program in the
(4) Furnish detailed reports about matching programs to Congress and OMB;
(5) Notify applicants and beneficiaries that their records are subject to matching; and
(6) Verify match findings before reducing, suspending, terminating, or denying a person's benefits or payments. The last notice for this matching program was published at 73 FR 31516-31517 (June 2, 2008).
B. RRB Computer Matches Subject to the Privacy Act
We have taken appropriate action to ensure that all of our computer matching programs comply with the requirements of the Privacy Act, as amended.
Railroad Retirement Board (RRB) and the Social Security Administration (SSA), Match #1007.
Section 7(b)(7) of the Railroad Retirement Act (45 U.S.C. 231f(b)(7)) provides that the Social Security Administration shall supply information necessary to administer the Railroad Retirement Act. Sections 202, 205(o) and 215(f) of the Social Security Act (42 U.S.C. 402, 405(o) and 415(f)) relate to benefit provisions, inclusion of railroad compensation together with wages for payment of benefits under certain circumstances, and the re-computation of benefits.
The RRB will, on a daily basis, obtain from SSA a record of the wages reported to SSA for persons who have applied for
Second, the RRB will receive from SSA the amount of certain social security benefits which the RRB pays on behalf of SSA. Section 7(b)(2) of the Railroad Retirement Act (45 U.S.C. 231f(b)(2)) provides that the RRB shall make the payment of certain social security benefits. The RRB also requires this information in order to adjust the amount of any annuity due to the receipt of a social security benefit. Section 10(a) of the Railroad Retirement Act (45 U.S.C. 231i(a)) permits the RRB to recover any overpayment from the accrual of social security benefits. This information is not available from any other source.
Third, once a year the RRB will receive from SSA a copy of SSA's Master Benefit Record for earmarked RRB annuitants. Section 7(b)(7)) of the Railroad Retirement Act (45 U.S.C. 231f(b)(7)) requires that SSA provide the requested information. The RRB needs this information to make the necessary cost-of-living computation adjustments quickly and accurately for those RRB annuitants who are also SSA beneficiaries.
SSA will receive weekly from RRB earnings information for all railroad employees. SSA will match the identifying information of the records furnished by the RRB against the identifying information contained in its Master Benefit Record and its Master Earnings File. If there is a match, SSA will use the RRB earnings to adjust the amount of Social Security benefits in its Annual Earnings Reappraisal Operation. This information is available from no other source.
The SSA will also receive daily from RRB earnings information on selected individuals. The transfer of information may be initiated either by RRB or by SSA. SSA needs this information to determine eligibility to Social Security benefits and, if eligibility is met, to determine the benefit amount payable. Section 18 of the Railroad Retirement Act (45 U.S.C. 231q(2)) requires that earnings considered as compensation under the Railroad Retirement Act be considered as wages under the Social Security Act for the purposes of determining entitlement under the Social Security Act if the person has less than 10 years of railroad service or has 10 or more years of service but does not have a current connection with the railroad industry at the time of his/her death.
All applicants for benefits under the Railroad Retirement Act and current beneficiaries will have a record of any social security wages and the amount of any social security benefits furnished to the RRB by SSA. In addition, all persons who ever worked in the railroad industry after 1936 will have a record of their service and compensation furnished to SSA by RRB.
1. Name, social security number, RRB claim number, annuity beginning date, date of birth, sex, last employer identification number, amount of daily pay rate, separation allowance or severance payment, creditable service and compensation after 1937, home address, date of death, and electronic mail address.
2. Information pertaining to the payment or denial of an individual's claim for benefits under the Railroad Retirement Act: Name, address, social security number, claim number, proofs of age, marriage, relationship, death, military service, creditable earnings and service months (including military service), entitlement to benefits under the Social Security Act, programs administered by the Veterans Administration, or other benefit systems, rates, effective dates, medical reports, correspondence and telephone inquiries to and about the beneficiary, suspension and termination dates, health insurance effective date, option, premium rate and deduction, direct deposit data, employer pension information, citizenship status and legal residency status (for annuitants living outside the United States), and tax withholding information (instructions of annuitants regarding number of exemptions claimed and additional amounts to be withheld, as well as actual amounts withheld for tax purposes).
The applicable RRB Privacy Act Systems of Records and their
The applicable SSA Privacy Act Systems of Records used and their
This matching program will become effective January 19, 2021 or 40 days after a copy of the agreement, as approved by the Data Integrity Board of each agency, is sent to Congress and the Office of Management and Budget, or 30 days after publication of this notice in the
By authority of the Board.
BOX Exchange LLC, Cboe BYX Exchange, Inc., Cboe BZX Exchange, Inc., Cboe EDGA Exchange, Inc., Cboe EDGX Exchange, Inc., Cboe C2 Exchange, Inc., Cboe Exchange, Inc., Financial Industry Regulatory Authority, Inc., Investors Exchange LLC, MEMX LLC, Miami International Securities Exchange LLC, MIAX Emerald, LLC, MIAX PEARL, LLC, NASDAQ BX, LLC, Nasdaq GEMX, LLC, Nasdaq ISE, LLC, Nasdaq MRX, LLC, NASDAQ PHLX LLC, The NASDAQ Stock Market LLC, New York Stock Exchange LLC, NYSE American LLC, NYSE Arca, Inc., NYSE Chicago, Inc., NYSE National, Inc., and Long Term Stock Exchange, Inc. (collectively, the “Participants” or “SROs”) are responsible for implementing the National Market System Plan Governing the Consolidated Audit Trail (“CAT NMS Plan”).
Section 36 of the Exchange Act grants the Commission the authority, with certain limitations, to “conditionally or unconditionally exempt any person, security, or transaction . . . from any provision or provisions of [the Exchange Act] or of any rule or regulation thereunder, to the extent that such exemption is necessary or appropriate in the public interest, and is consistent with the protection of investors.”
For the reasons set forth below, this Order grants the Participants temporary conditional exemptive relief from certain requirements of the CAT NMS Plan, until the dates specified below. The Commission is granting temporary conditional exemptive relief from certain CAT NMS Plan requirements in order to allow Participants more time to meet such requirements and to allow Participants to prioritize and focus resources on implementation of other outstanding CAT NMS Plan requirements.
Participants and Industry Members have devoted and continue to expend substantial resources and efforts in the ongoing development of the CAT. The Commission believes that granting the temporary exemptive relief until July 31, 2023,
In addition to the conditions specific to the exemptive relief described below, the Commission is granting the exemptive relief described herein conditioned on the Participants providing information in Quarterly Progress Reports
The CAT NMS Plan requires specific timeframes for the identification, communication and correction of errors from the time an order event is received by the processor, including, by Noon Eastern Time T+1 (transaction date + one day), “[i]nitial data validation, lifecycle linkages and communication of errors to CAT Reporters.”
Section 3 of Appendix D of the CAT NMS Plan requires that all CAT Data reported to the Central Repository must be processed and assembled to create the complete lifecycle of each Reportable Event.
Section 6.5(b)(i) of the CAT NMS Plan requires, among other things, that the CAT Data and data from the Securities Information Processor (the “SIP”) that is collected by the Central Repository (“SIP Data”) when available to the Participant regulatory staff and the SEC “shall be linked,” such that the Participant and Industry Member Data (“Transaction Data”) collected by CAT and the SIP Data collected by CAT are part of the lifecycle of a single Order.
In order to provide Participants more time to develop the changes necessary to meet the requirements of Section 6.5(b)(i), the Commission believes it is appropriate to, until July 31, 2023, grant a temporary exemption to the Participants from the requirement in Section 6.5(b)(i) of the CAT NMS Plan that requires the information collected by the Central Repository pursuant to paragraphs (c)(7) and (e)(7) of SEC Rule 613 to be provided to regulators in a linked manner, insofar as this provision applies to linking Participant Data and Industry Member Data with SIP Data as required by Section 6.5(b)(i). As a condition of this relief, and for purposes of the Quarterly Progress Reports, factual indicators that demonstrate the current level of completion with respect to this CAT NMS Plan requirement must include the release of updated specifications and/or scenarios documents relating to the linkage of Participant Data and Industry Member Data with SIP Data, such that SIP Data is incorporated in the lifecycle of an order. The Commission believes that this condition would allow the Commission to monitor the progress made towards meeting this CAT NMS Plan requirement prior to the expiration of the exemptive relief.
Port-level settings are special handling instructions associated with a port connection to another Industry Member or Participant and are used by Industry Members and Participants to instruct how to handle an Order (
The Commission understands, however, that Participants and/or Industry Members would have to make technological changes to ensure the accurate and reliable reporting of port-level settings, and therefore, the Commission believes it is appropriate to, until July 31, 2023, exempt the Participants from requiring that both the CAT Reporter sending an Order and the CAT Reporter receiving an Order report port-level settings as part of the Material Terms of an Order. In order to monitor the Participants' progress on compliance with the CAT NMS Plan's reporting requirements, this exemptive relief is conditioned on the Participants engaging both the Commission and Industry Members on a plan to address the reporting of port-level settings on an exchange-by-exchange basis. Furthermore, as a condition of this relief, and for purposes of the Quarterly Progress Reports, factual indicators must include the release of updated specifications and/or scenarios documents relating to the reporting of port-level settings by both the sender and receiver of an Order as a special handling instruction to demonstrate the current level of completion with respect to the CAT NMS Plan requirement that special handling instructions, including port-level settings, be reported as Material Terms of an Order. The Commission believes that these conditions would allow the Commission to monitor the progress made towards meeting this CAT NMS Plan requirement prior to the expiration of the exemptive relief.
The CAT NMS Plan requires that the Plan Processor must be able to link all related order events from all CAT Reporters involved in the lifecycle of an order, and this requirement applies to, among other things, “representative” orders. Specifically, the CAT NMS Plan states that the Central Repository must be able to create the lifecycle between customer orders to “representative” orders created in firm accounts for the purpose of facilitating a customer order (
In order to allow time for Participants and Industry Members to develop the capability of meeting CAT NMS Plan requirements relating to representative orders, the Commission believes it is appropriate to grant temporary exemptive relief, until July 31, 2023, from the CAT NMS Plan requirement that the Plan Processor create the lifecycle between customer orders to “representative” orders created in firm accounts for the purpose of facilitating a customer order, conditioned on the Participants continuing to require Industry Member reporting of representative orders as described in the Phased Industry Member Reporting Order. The Commission believes that granting relief until July 31, 2023 is appropriate because this would provide Participants the time necessary to determine how all representative orders are to be reported to CAT and time for Industry Members to make any changes necessary to report all representative orders. As a condition of this relief, and for purposes of the Quarterly Progress Reports, factual indicators that demonstrate the current level of completion with respect to this CAT NMS Plan requirement must include a description of progress made regarding the release of updated specifications and/or scenarios documents relating to the reporting of all representative orders. The Commission believes that this condition would allow the Commission to monitor the progress made towards meeting this CAT NMS Plan requirement prior to the expiration of the exemptive relief.
The CAT NMS Plan requires Participants to record and report to the Central Repository the receipt of an order and the time at which the order is received pursuant to Section 6.3(d) of the CAT NMS Plan. This requirement applies to when an order is
In order to provide Participants more time to develop the changes necessary to meet the requirements of Section 6.3(d) of the CAT NMS Plan as they relate to rejected orders, the Commission believes it is appropriate to, until December 13, 2021, grant a temporary exemption to the Participants from the requirement in Section 6.3(d) of the CAT NMS Plan that requires the Participants to report rejected orders.
For the reasons discussed above, the Commission believes that granting temporary exemptive relief, pursuant to Section 36 of the Exchange Act, is appropriate in the public interest and consistent with the protection of investors, and that pursuant to Rule 608(e), granting temporary exemptive relief is consistent with the public interest, the protection of investors, the maintenance of fair and orderly markets and the removal of impediments to, and the perfection of a national market system.
Accordingly,
By the Commission.
Pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934 (the “Act”),
The Exchange proposes to list and trade shares of the Invesco Focused Discovery Growth ETF and the Invesco Select Growth ETF pursuant to Rule 14.11(m), Tracking Fund Shares,
The text of the proposed rule change is also available on the Exchange's website (
In its filing with the Commission, the Exchange included statements concerning the purpose of and basis for the proposed rule change and discussed any comments it received on the proposed rule change. The text of these statements may be examined at the places specified in Item IV below. The Exchange has prepared summaries, set forth in sections A, B, and C below, of the most significant aspects of such statements.
The Exchange proposes to list and trade shares of the Invesco Focused Discovery Growth ETF and the Invesco Select Growth ETF pursuant to Rule 14.11(m), Tracking Fund Shares,
The Shares will be offered by the Trust, which was organized as a Delaware statutory trust on November 6, 2007. The Trust is registered with the Commission as an open-end investment company and has filed a registration statement on behalf of the Funds on Form N-1A with the Commission.
The Shares will conform to the initial and continued listing criteria under Rule 14.11(m) as well as all terms in the Exemptive Relief. The Exchange represents that, for initial and/or continued listing, each Fund will be in compliance with Rule 10A-3 under the Act.
The Fund's holdings will conform to the permissible investments as set forth in the Exemptive Relief and the holdings will be consistent with all requirements in the Exemptive Relief.
The Fund seeks capital appreciation as its investment objective. The Fund seeks to achieve its investment objective by investing primarily in exchange-traded common stocks of U.S. companies that the Sub-Adviser expects to have above average growth rates. The Fund seeks to invest in newer companies or in more established companies that are in the early growth phase of their business cycle, which is typically marked by above average growth rates. The Fund may invest in securities of issuers of all capitalization sizes; however, it will primarily hold securities of mid-capitalization issuers. In selecting investments for the Fund,
The Fund's holdings will conform to the permissible investments as set forth in the Exemptive Relief and the holdings will be consistent with all requirements in the Exemptive Relief.
The Fund seeks capital appreciation as its investment objective. The Fund seeks to achieve its investment objective by investing primarily in exchange-traded common stocks of U.S. companies that the Sub-Adviser believes have potential for earnings or revenue growth driven by long-term secular trends and themes. The Fund may invest in securities of issuers of all capitalization sizes; however, it will primarily hold securities of large and mid-capitalization issuers. The Fund usually will hold a relatively small number of stocks (approximately 20-30) and may invest more than 25% of its assets in a given sector.
Rule 14.11(m)(4)(B)(iv) provides that (a) the Exchange may consider all relevant factors in exercising its discretion to halt trading in a series of Tracking Fund Shares. Trading may be halted because of market conditions or for reasons that, in the view of the Exchange, make trading in the Shares inadvisable. These may include: (i) The extent to which trading is not occurring in the securities and/or the financial instruments composing the Tracking Basket or Fund Portfolio; or (ii) whether other unusual conditions or circumstances detrimental to the maintenance of a fair and orderly market are present; and (b) if the Exchange becomes aware that one of the following is not being made available to all market participants at the same time: the net asset value, the Tracking Basket, or the Fund Portfolio with respect to a series of Tracking Fund Shares, then the Exchange will halt trading in such series until such time as the net asset value, the Tracking Basket, or the Fund Portfolio is available to all market participants, as applicable.
The Exchange deems Tracking Fund Shares to be equity securities, thus rendering trading in the Shares subject to the Exchange's existing rules governing the trading of equity securities.
For the Funds, the Tracking Basket will include a significant percentage of the securities held in the Fund Portfolio, but will exclude certain securities held in the Fund Portfolio (or modify their weightings), such as those the Fund's portfolio managers are actively looking to purchase or sell, or securities which, if disclosed, could increase the risk of front-running or free-riding. By design, the behavior of the Tracking Basket will be highly correlated with the behavior of a Fund Portfolio. A process developed by the Adviser will be used to optimize the Tracking Basket, which the Adviser expects will cause the performance of the Tracking Basket to closely track the performance of the Fund Portfolio. The Exchange notes that although the Tracking Basket methodology used by the Fund is not identical to the Tracking Basket methodology in a proposal to list and trade shares of Tracking Fund Shares that was previously approved by the Commission,
The Tracking Basket will be constructed utilizing a risk model, which includes a covariance matrix, based on an optimization process to minimize deviations in the return of the Tracking Basket relative to the Fund. The proprietary optimization process mathematically seeks to minimize key parameters that the Adviser believes are important to the effectiveness of the Tracking Basket as a hedge, including tracking error (standard deviation of return differentials between the Tracking Basket and the Fund) and creation/redemption transaction costs.
As noted above, each Fund will also disclose the entirety of its portfolio holdings, including the name, identifier, market value and weight of each security and instrument in the portfolio, at a minimum within at least 60 days following the end of every fiscal quarter. The Exchange notes that the concept of the Tracking Basket employed under this structure is designed to provide investors with the traditional benefits of ETFs while protecting the Funds from the potential for front running or free riding of portfolio transactions, which could adversely impact the performance of a Fund.
The Exchange believes that the particular instruments that may be included in each of the Fund's respective Fund Portfolio and Tracking Basket do not raise any concerns related to the Tracking Baskets being able to closely track the NAV of the Funds because such instruments include only instruments that trade on an exchange contemporaneously with the Shares.
The Adviser anticipates that the returns between a Fund and its respective Tracking Basket will have a consistent relationship and that the deviation in the returns between a Fund and its Tracking Basket will be sufficiently small such that the Tracking Basket will provide Authorized Participants, arbitrageurs, and certain other market participants (collectively, “Market Makers”) with a reliable hedging vehicle that they can use to effectuate low-risk arbitrage trades in Fund Shares. The Exchange believes that the disclosures provided by the Funds will allow Market Makers to understand the relationship between the performance of a Fund and its Tracking Basket. Market Makers will be able to estimate the value of and hedge positions in a Fund's Shares, which the Exchange believes will facilitate the arbitrage process and help ensure that the Fund's Shares normally will trade at market prices close to their NAV. The Exchange also believes that competitive market making, where traders are looking to take advantage of differences in bid-ask spread, will aid in keeping spreads tight.
The Exchange believes that the proposal is consistent with Section 6(b) of the Act
The Exchange notes that a significant amount of information about each Fund and its Fund Portfolio will be publicly available at all times. Each Fund will disclose the Tracking Basket, which is designed to closely track the daily performance of the Fund Portfolio, on a daily basis. Each Fund will at a minimum publicly disclose the entirety of its portfolio holdings, including the name, identifier, market value and weight of each security and instrument in the portfolio within at least 60 days following the end of every fiscal quarter in a manner consistent with normal disclosure requirements otherwise applicable to open-end investment companies registered under the 1940 Act. The website will include additional quantitative information updated on a daily basis, including, on a per Share basis for each Fund, the prior business day's NAV and the closing price or bid/ask price at the time of calculation of such NAV, and a calculation of the premium or discount of the closing price or bid/ask price against such NAV. The website will also disclose the percentage weight overlap between the holdings of the Tracking Basket compared to the Fund holdings for the prior business day and any information regarding the bid/ask spread for each Fund as may be required for other ETFs under Rule 6c-11 under the 1940 Act, as amended. Price information for the exchange-listed instruments held by the Funds, including both U.S. and non-U.S. listed equity securities and U.S. exchange-listed futures will be available through major market data vendors or securities exchanges listing and trading such securities.
The Exchange represents that the Shares of the Funds will continue to comply with all other requirements applicable to Tracking Fund Shares, including the dissemination of key information such as the Tracking Basket, the Fund Portfolio, and NAV, suspension of trading or removal, trading halts, surveillance, minimum price variation for quoting and order entry, an information circular informing members of the special characteristics and risks associated with trading in the Shares, and firewalls as set forth in the Rules applicable to Tracking Fund Shares and the order approving such rules. Moreover, U.S.-listed equity securities held by the Funds will trade on markets that are a member of ISG or with which the Exchange has in place a comprehensive surveillance sharing agreement. All statements and representations made in this filing regarding the description of the portfolio or reference assets, limitations on portfolio holdings or reference assets, dissemination and availability of reference asset (as applicable), or the applicability of Exchange listing rules specified in this filing shall constitute continued listing requirements for the Shares. The issuer has represented to the Exchange that it will advise the Exchange of any failure by a Fund or Shares to comply with the continued listing requirements, and, pursuant to its obligations under Section 19(g)(1) of the Act, the Exchange will surveil for compliance with the continued listing requirements. FINRA conducts certain cross-market surveillances on behalf of the Exchange pursuant to a regulatory services agreement. The Exchange is responsible for FINRA's performance under this regulatory services agreement. If a Fund is not in compliance with the applicable listing requirements, the Exchange will commence delisting procedures with
The Exchange believes that the proposal is designed to prevent fraudulent and manipulative acts and practices in that the Rules relating to listing and trading of Tracking Fund Shares provide specific initial and continued listing criteria required to be met by such securities.
Rules 14.11(m)(4)(B)(iii) and (iv) provide that the Exchange will consider the suspension of trading in and will commence delisting proceedings for a Fund pursuant to Rule 14.12 under any of the circumstances described above and that the Exchange may consider all relevant factors in exercising its discretion to halt trading in a series of Tracking Fund Shares. Trading may be halted because of market conditions or for reasons that, in the view of the Exchange, make trading in the Shares inadvisable.
Additionally, the Exchange believes that the requirements related to information protection enumerated under Rule 14.11(m)(2)(F) will act as a strong safeguard against any misuse and improper dissemination of information related to a Fund Portfolio, the Tracking Basket, or changes thereto. The requirement that any person or entity, including a custodian, Reporting Authority, distributor, or administrator, who has access to nonpublic information regarding the Fund Portfolio or the Tracking Basket or changes thereto, must be subject to procedures designed to prevent the use and dissemination of material nonpublic information regarding the applicable Fund Portfolio or the Tracking Basket or changes thereto will act to prevent any individual or entity from sharing such information externally.
The Exchange believes that its surveillance procedures are adequate to properly monitor the trading of the Shares on the Exchange during all trading sessions and to deter and detect violations of Exchange rules and the applicable federal securities laws. Trading of the Shares through the Exchange will be subject to the Exchange's surveillance procedures for derivative products, including Tracking Fund Shares. If a Fund is not in compliance with the applicable listing requirements, the Exchange will commence delisting procedures under Exchange Rule 14.12. In addition, the Exchange also has a general policy prohibiting the distribution of material, non-public information by its employees. Any foreign common stocks held by the Fund will be traded on an exchange that is a member of ISG or with which the Exchange has in place a comprehensive surveillance sharing agreement. All futures contracts that the Funds may invest in will be traded on a U.S. futures exchange. The Exchange or FINRA, on behalf of the Exchange, or both, will communicate as needed regarding trading in the Shares, underlying U.S. exchange-listed equity securities, and U.S. exchange-listed futures with other markets and other entities that are members of ISG, and the Exchange or FINRA, on behalf of the Exchange, or both, may obtain trading information regarding trading such instruments from such markets and other entities. In addition, the Exchange may obtain information regarding trading in the Shares, underlying equity securities, and U.S. exchange-listed futures from markets and other entities that are members of ISG or with which the Exchange has in place a comprehensive surveillance sharing agreement.
As provided in Rule 14.11(m)(2)(D), the Adviser will upon request make available to the Exchange and/or FINRA, on behalf of the Exchange, the daily Fund Portfolio of each Fund. The Exchange believes that the ability to access the information on an as needed basis will provide it with sufficient information to perform the necessary regulatory functions associated with listing and trading the Shares on the Exchange, including the ability to monitor compliance with the initial and continued listing requirements as well as the ability to surveil for manipulation of the Shares.
In addition, Form N-PORT requires reporting of a fund's complete portfolio holdings on a position-by-position basis on a quarterly basis within 60 days after fiscal quarter end. Investors can obtain a fund's Statement of Additional Information, its Shareholder Reports, its Form N-CSR, filed twice a year, and its Form N-CEN, filed annually. A fund's SAI and Shareholder Reports are available free upon request from the Investment Company, and those documents and the Form N-PORT, Form N-CSR, and Form N-CEN may be viewed on-screen or downloaded from the Commission's website at
Information regarding market price and trading volume of the Shares will be continually available on a real-time basis throughout the day on brokers' computer screens and other electronic services. Information regarding the previous day's closing price and trading volume information for the Shares will be published daily in the financial section of newspapers. Quotation and last sale information for the Shares will be available via the CTA high-speed line. The Exchange deems Tracking Fund Shares to be equity securities, thus rendering trading in the Shares subject to the Exchange's existing rules governing the trading of equity securities. As provided in Rule 14.11(m)(2)(C), the minimum price variation for quoting and entry of orders in securities traded on the Exchange is $0.01.
For the above reasons, the Exchange believes that the proposed rule change is consistent with the requirements of Section 6(b)(5) 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 purpose of the Act. Rather, the Exchange notes that the proposed rule change will facilitate the listing of several new series of actively-managed exchange-traded product, thus enhancing competition among both market participants and listing venues, to the benefit of investors and the marketplace.
The Exchange has neither solicited nor received written comments on the proposed rule change.
Because the foregoing proposed rule change does not: (i) Significantly affect the protection of investors or the public interest; (ii) impose any significant burden on competition; and (iii) become operative for 30 days from the date on which it was filed, or such shorter time as the Commission may designate, it has become effective pursuant to Section 19(b)(3)(A) of the Act
A proposed rule change filed under Rule 19b-4(f)(6)
At any time within 60 days of the filing of the proposed rule change, the Commission summarily may temporarily suspend such rule change if it appears to the Commission that such action is necessary or appropriate in the public interest, for the protection of investors, or otherwise in furtherance of the purposes of the Act. If the Commission takes such action, the Commission will institute proceedings to determine whether the proposed rule change should be approved or disapproved.
Interested persons are invited to submit written data, views, and arguments concerning the foregoing, including whether the proposed rule change is consistent with the Act. Comments may be submitted by any of the following methods:
• Use the Commission's internet comment form (
• Send an email to
• Send paper comments in triplicate to Secretary, Securities and Exchange Commission, 100 F Street NE, Washington, DC 20549-1090.
For the Commission, by the Division of Trading and Markets, pursuant to delegated authority.
The Sarbanes-Oxley Act of 2002, as amended (the “Sarbanes-Oxley Act”),
Section 109 of the Sarbanes-Oxley Act provides that the PCAOB shall establish a reasonable annual accounting support fee, as may be necessary or appropriate to establish and maintain the PCAOB. Under Section 109(f) of the Sarbanes-Oxley Act, the aggregate annual accounting support fee shall not exceed the PCAOB's aggregate “recoverable budget expenses,” which may include operating, capital, and accrued items. The PCAOB's annual budget and accounting support fee are subject to approval by the Commission. In addition, the PCAOB must allocate the annual accounting support fee among issuers and among brokers and dealers.
Section 109(b) of the Sarbanes-Oxley Act directs the PCAOB to establish a budget for each fiscal year in accordance with the PCAOB's internal procedures, subject to approval by the Commission. Rule 190 of Regulation P (the “budget rule”) governs the Commission's review and approval of PCAOB budgets and annual accounting support fees.
In accordance with the budget rule, in March 2020 the PCAOB provided the Commission with a narrative description of its program issues and outlook for the 2021 budget year. In response, the Commission provided the PCAOB with economic assumptions and general budgetary guidance for the 2021 budget year. The PCAOB subsequently delivered a preliminary budget and budget justification to the Commission. Staff from the Commission's Office of the Chief Accountant and Office of Financial Management dedicated a substantial amount of time to the review and analysis of the PCAOB's programs, projects, and budget estimates and attended several meetings with staff of the PCAOB to further develop the understanding of the PCAOB's budget and operations. During the course of this review, Commission staff relied upon representations and supporting documentation from the PCAOB. Based on this review, the Commission issued a “passback” letter to the PCAOB on October 28, 2020. On November 19, 2020, the PCAOB adopted its 2021 budget and accounting support fee during an open meeting, and subsequently submitted that budget to the Commission for approval.
After considering the above, the Commission did not identify any proposed disbursements in the 2021 budget adopted by the PCAOB that are not properly recoverable through the annual accounting support fee, and the Commission believes that the aggregate proposed 2021 annual accounting support fee does not exceed the PCAOB's aggregate recoverable budget expenses for 2021.
Significant uncertainty surrounding the impact of COVID-19 on the PCAOB's operations reinforces the importance of continued coordination between the SEC and PCAOB. The Commission directs the PCAOB during 2021 to continue to schedule monthly meetings, as necessary, with the Commission's staff to discuss important policy initiatives, changes related to program areas, and significant impacts to the PCAOB's 2021 budget, including significant differences between actual and budgeted amounts and anticipated cost-savings. Separately, the Commission directs the PCAOB to continue its written quarterly updates on recent activities, including strategic initiatives, for the PCAOB's Office of Economic and Risk Analysis, Office of Data, Security, and Technology, and Division of Registration and Inspections. The PCAOB Board will make itself available to meet with the Commissioners on these and other topics. The PCAOB should also submit its 2020 annual report to the Commission by March 31, 2021.
The Commission understands that the Office of Management and Budget (“OMB”) has determined that the 2021 budget of the PCAOB is subject to sequestration under the Budget Control Act of 2011.
The Commission has determined that the PCAOB's 2021 budget and annual accounting support fee are consistent with Section 109 of the Sarbanes-Oxley Act. Accordingly,
By the Commission.
Pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934 (“Act”),
The Exchange proposes to list and trade Shares of the ProShares Short VIX Short-Term Futures ETF (the “Short Fund”) and the ProShares Ultra VIX Short-Term Futures ETF (the “Ultra Fund”, and collectively the “Funds”) under Rule 14.11(f)(4), which governs the listing and trading of Trust Issued Receipts
The text of the proposed rule change is also available on the Exchange's website (
In its filing with the Commission, the Exchange included statements concerning the purpose of and basis for the proposed rule change and discussed any comments it received on the proposed rule change. The text of these statements may be examined at the places specified in Item IV below. The Exchange has prepared summaries, set forth in sections A, B, and C below, of the most significant aspects of such statements.
The Exchange proposes to list and trade Shares of the ProShares Short VIX Short-Term Futures ETF (the “Short Fund”) and the ProShares Ultra VIX Short-Term Futures ETF (the “Ultra Fund”, and collectively the “Funds”) under Rule 14.11(f)(4), which governs the listing and trading of Trust Issued Receipts
The Sponsor, a Maryland limited liability company, serves as the Sponsor of Trust. The Sponsor is a commodity pool operator.
The Short Fund seeks, on a daily basis, to provide investment results (before fees and expenses) that correspond to one-half the inverse (−0.5x) of the daily performance, at the time of the net asset value (“NAV”) calculation, of a benchmark that seeks to offer exposure to market volatility through publicly traded futures markets. The Ultra Fund seeks, on a daily basis, to provide investment results (before fees and expenses) that correspond to one and one-half times (1.5x) the daily performance, at the time of NAV calculation, of a benchmark that seeks to offer exposure to market volatility through publicly traded futures markets. The benchmark for the Funds is the S&P 500 VIX Short-Term Futures Index (ticker symbol SPVIXSTR, the “Index”).
The Index is comprised of, and the value of the Funds will be based on, VIX futures contracts traded on the Cboe Futures Exchange, Inc. (“CFE”) (hereinafter referred to as “VIX Futures Contracts”). VIX Futures Contracts are measures of the market's expectation of the level of VIX at certain points in the future, and as such will behave differently than current or spot VIX values.
While the VIX represents a measure of the current expected volatility of the S&P 500 over the next 30 days, the prices of VIX Futures Contracts are based on the current expectation of what the expected 30-day volatility will be at a particular time in the future (on the expiration date). For example, a VIX Futures Contract purchased in March that expires in May, in effect, is a forward contract on what the level of the VIX, as a measure of 30-day implied volatility of the S&P 500, will be on the May expiration date. The forward volatility reading of the VIX may not correlate directly to the current volatility reading of the VIX because the implied volatility of the S&P 500 at a future expiration date may be different from the current implied volatility of the S&P 500. As a result, the Index and the Funds should be expected to perform very differently from one-half the inverse of the daily performance or a multiple of the daily performance of the Index over all periods of time. To illustrate, on December 4, 2019, the VIX closed at a price of 14.8 and the price of the February 2020 VIX Futures Contracts expiring on February 19, 2020 was 18.125. In this example, the price of the VIX represented the 30-day implied, or “spot,” volatility (the volatility expected for the period from December 5, 2019 to January 5, 2020) of the S&P 500 and the February 2020 VIX Futures Contracts represented forward implied volatility (the volatility expected for the period from February 19 to March 19, 2020) of the S&P 500.
If the Short Fund is successful in meeting its objective, its value (before fees and expenses) should gain approximately half as much on a percentage basis as its Index when the Index declines on a given day. Conversely, its value (before fees and expenses) should lose approximately half as much on a percentage basis as the Index when the Index rises on a given day.
If the Ultra Fund is successful in meeting its objective, its value (before fees and expenses) should gain approximately 1.5 times as much on a percentage basis as its Index when the Index rises on a given day. Conversely, its value (before fees and expenses) should lose approximately 1.5 times as much on a percentage basis as its Index when the Index declines on a given day.
Each Fund will under Normal Market Conditions
If the Sponsor to the Trust issuing the Trust Issued Receipts is affiliated with a broker-dealer, such Sponsor to the Trust shall erect and maintain a “fire wall” between the Sponsor and the broker-dealer with respect to access to information concerning the composition and/or changes to such Trust portfolio. The Sponsor is not a broker-dealer, but is affiliated with a broker-dealer and has implemented and will maintain a “fire wall” with respect to such broker-dealer regarding access to information concerning the composition and/or changes to the portfolio. In the event that (a) the Sponsor becomes a broker-dealer or newly affiliated with a broker-dealer, or (b) any new sponsor is a broker-dealer or becomes affiliated with a broker-dealer, it will implement and maintain a fire wall with respect to its relevant personnel or such broker-dealer affiliate, as applicable, regarding access to information concerning the composition and/or changes to the portfolio, and will be subject to procedures designed to prevent the use and dissemination of material non-public information regarding such portfolio.
Each of the Funds uses investment techniques that include the use of any one or a combination of VIX Futures Contracts and may, if applicable, include swaps. The Funds' investment techniques may involve a small investment relative to the amount of investment exposure assumed and may result in losses exceeding the amounts invested. Such techniques, particularly when used to create leverage, may expose the Funds to potentially dramatic changes (losses or gains) in the value of their investments and imperfect correlation between the value of the investments and the security or Index.
The Funds do not seek to achieve their stated investment objective over a period greater than one day because mathematical compounding prevents the Funds from perfectly achieving such results. Accordingly, results over periods of time greater than one day typically will not be a simple one-half of the inverse correlation (−50%) or multiple correlation (+150%) of the period return of the Index and may differ significantly.
According to the Registration Statement, each Fund is not actively managed by traditional methods, which typically involve effecting changes in the composition of a portfolio on the basis of judgments relating to economic, financial and market considerations with a view toward obtaining positive results under all market conditions. Rather, each Fund seeks to remain fully invested at all times in investment positions that, in combination, provide exposure to its Index consistent with its investment objective even during periods in which that benchmark is flat or moving in a manner which causes the value of a Fund to decline.
In seeking to achieve each Fund's investment objective, the Sponsor uses a mathematical approach to investing. Using this approach, the Sponsor
The S&P 500 VIX Short-Term Futures Index
According to the Registration Statement, the Index is intended to reflect the returns that are potentially available through an unleveraged investment in the VIX Futures Contracts comprising the Index (the “Index Components”).
Unlike the Index, the VIX, which is not a benchmark for any Fund, is calculated based on the prices of put and call options on the S&P 500, which are traded on Cboe Exchange, Inc.
The S&P 500 VIX Short-Term Futures Index employs rules for selecting the Index Components and a formula to calculate a level for the Index from the prices of these components. Currently, the Index Components represent the prices of the two near-term VIX futures months, replicating a position that rolls the nearest month VIX Futures Contract to the next month VIX Futures Contract on a daily basis in equal fractional amounts. This results in a constant weighted average maturity of one month. The roll period begins on the Tuesday prior to the monthly CFE VIX Futures Contracts settlement date and runs through the Tuesday prior to the subsequent month's CFE VIX Futures Contract settlement date.
The level of the Index is calculated in accordance with the method described in the Registration Statement. The level of the Index will be published at least every 15 seconds both in real time from 9:30 a.m. to 4:00 p.m., E.T. and at the close of trading on each Business Day
The Index Components comprising the Index represent the prices of certain VIX Futures Contracts. The Index takes a daily rolling long position in contracts of specified maturities and is intended to reflect the returns that are potentially available through an unleveraged investment in those contracts. The Index measures the return from a rolling long position in the first and second month VIX Futures Contracts. The Index rolls continuously throughout each month from the first month VIX Futures Contract into the second month VIX Futures Contract.
The Index rolls on a daily basis. According to the Registration Statement, one of the effects of daily rolling is to maintain a constant weighted average maturity for the underlying futures contracts. Unlike equities, which typically entitle the holder to a continuing stake in a corporation, futures contracts normally specify a certain date for the delivery of the underlying asset or financial instrument or, in the case of futures contracts relating to indices such as the VIX, a certain date for payment in cash of an amount determined by the level of the underlying index. The Index operates by selling, on a daily basis, Index Components with a nearby settlement date and purchasing Index Components with a longer-dated settlement date. The roll for each contract occurs on each Business Day according to a pre-determined schedule that has the effect of keeping constant the weighted average maturity of the relevant Index Components. This process is known as “rolling” a futures position, and the Index is a “rolling index”. The constant weighted average maturity for the futures underlying the Index is one month.
Because the Index incorporates this process of rolling futures positions on a daily basis, and the Funds, in general, also roll their positions on a daily basis, the daily roll is not anticipated to be a significant source of tracking error between the Funds and the Index. The Index is based on VIX Futures Contracts and not the VIX, and as such neither the Funds nor the Index are expected to track the VIX.
The Funds will create and redeem Shares from time to time in one or more Creation Units. A Creation Unit is a block of 50,000 Shares. Except when aggregated in Creation Units, the Shares are not redeemable securities.
On any Business Day, an authorized participant may place an order with the Distributor to create one or more Creation Units.
The procedures by which an authorized participant can redeem one or more Creation Units mirror the procedures for the purchase of Creation Units. On any Business Day, an authorized participant may place an order with the Distributor to redeem one or more Creation Units. The redemption proceeds from a Fund consist of the cash redemption amount. The cash redemption amount is equal to the NAV of the number of Creation Unit(s) of a Fund requested in the authorized participant's redemption order as of the time of the calculation of a Fund's NAV on the redemption order date, less applicable transaction fees.
The NAV for the Funds' Shares will be calculated by the Administrator once a day and will be disseminated daily to all market participants at the same time.
The intraday, closing, and settlement prices of the Index Components are also readily available from the websites of CFE (
Quotation and last-sale information regarding the Shares will be disseminated through the facilities of the Consolidated Tape Association (“CTA”). Quotation and last-sale information regarding VIX Futures Contracts will be available from the exchanges on which such instruments are traded. Quotation and last-sale information for swaps will be available from nationally recognized data services providers, such as Reuters and Bloomberg, through subscription agreements or from a broker-dealer who makes markets in such instruments. Quotation and last-sale information for swaps are available through third-party pricing services or broker-dealers who make markets in such instruments. Pricing information regarding Cash and Cash Equivalents in which the Funds may invest is generally available through nationally recognized data services providers, such as Reuters and Bloomberg, through subscription agreements.
In addition, the Funds' website at
In addition, in order to provide updated information relating to the Funds for use by investors and market professionals, an updated Intraday Indicative Value (“IIV”) will be calculated. The IIV is an indicator of the value of the VIX Futures Contracts, swaps, and Cash and/or Cash Equivalents less liabilities of a Fund at the time the IIV is disseminated. The IIV will be calculated and widely disseminated by one or more major market data vendors every 15 seconds throughout Regular Trading Hours.
In addition, the IIV is available through on-line information services such as Bloomberg and Reuters.
The IIV disseminated during Regular Trading Hours should not be viewed as an actual real time update of the NAV, which is calculated only once a day. The IIV also should not be viewed as a precise value of the Shares.
The Exchange believes that dissemination of the IIV provides additional information regarding the Funds that is not otherwise available to the public and is useful to professionals and investors in connection with the related Shares trading on the Exchange or the creation or redemption of such Shares.
Additional information regarding the Funds and the Shares, including investment strategies, risks, creation and redemption procedures, fees, portfolio holdings disclosure policies, distributions and taxes is included in the Registration Statement.
The Shares of each Fund will conform to the initial and continued listing criteria under BZX Rule 14.11(f)(4). The Exchange represents that, for initial and continued listing, the Funds and the Trust must be in compliance with Rule 10A-3 under the Act. A minimum of 100,000 Shares of each Fund will be outstanding at the commencement of trading on the Exchange. The Exchange will obtain a representation from the issuer of the Shares that the NAV per Share for each Fund will be calculated daily and will be made available to all market participants at the same time.
With respect to trading halts, the Exchange may consider all relevant factors in exercising its discretion to halt or suspend trading in the Shares of the Funds. The Exchange will halt trading in the Shares under the conditions specified in BZX Rule 11.18. Trading may be halted because of market conditions or for reasons that, in the view of the Exchange, make trading in the Shares inadvisable. These may include: (1) The extent to which trading is not occurring in the securities and/or the financial instruments composing the daily disclosed portfolio of the Funds; or (2) whether other unusual conditions or circumstances detrimental to the maintenance of a fair and orderly market are present. Trading in the Shares also will be subject to Rule 14.11(f)(4)(C)(ii), which sets forth circumstances under which Shares of a Fund may be halted.
The Exchange represents that the Exchange may halt trading during the day in which an interruption to the dissemination of the IIV, the value of the Index, the VIX or the value of the underlying VIX Futures Contracts occurs. If an interruption to the dissemination of the IIV, the value of an Index, the VIX or the value of the underlying VIX Futures Contracts persists past the trading day in which it occurred, the Exchange will halt trading no later than the beginning of the trading day following the interruption. In addition, if the Exchange becomes aware that the NAV with respect to the Shares is not disseminated to all market participants at the same time, it will halt trading in the Shares until such time as the NAV is available to all market participants.
Currently, Interpretation and Policy .01 of Exchange Rule 3.7 (Recommendations to Customers) provides that a member, in recommending a transaction in connection with products listed pursuant to Chapter XIV, must have reasonable grounds to believe that the recommendation is suitable for the customer based on any facts disclosed by the customer as to its other security holdings and as to its financial situation and needs. Further, the rule provides, that no member shall recommend to a customer a transaction in any such product unless the member has a reasonable basis for believing at the time of making the recommendation that the customer has such knowledge and experience in financial matters that he may reasonably be expected to be capable of evaluating the risks of the recommended transaction and is financially able to bear the risks of the recommended position.
Prior to the commencement of trading, the Exchange will inform its members of the suitability requirements of, Interpretation and Policy .01 of Exchange Rule 3.7 in an Information Circular. Specifically, members will be reminded in the Information Circular that, in recommending transactions in the Shares, they must have a reasonable basis to believe that (1) the recommendation is suitable for a customer given reasonable inquiry concerning the customer's investment objectives, financial situation, needs, and any other information known by such member, and (2) the customer can evaluate the special characteristics, and is able to bear the financial risks, of an investment in the Shares. In connection with the suitability obligation, the Information Circular will also provide that members must make reasonable efforts to obtain the following
In addition, FINRA has implemented increased sales practice and customer margin requirements for FINRA members applicable to inverse and leveraged ETFs (which include the Shares) and options on leveraged ETFs, as described in FINRA Regulatory Notices 09-31 (June 2009), 09-53 (August 2009) and 09-65 (November 2009) (the “FINRA Regulatory Notices”). Members that carry customer accounts will be required to follow the FINRA guidance set forth in these notices. As noted above, each Fund will seek daily investment results, before fees and expenses, that correspond to the Index. The Funds do not seek to achieve their respective primary investment objective over a period of time greater than a single day. The return of the Funds for a period longer than a single day will not be a simple multiple (one-half of the inverse correlation (−50%) with respect to the ProShares Short VIX Short-Term Futures ETF or multiple correlation (+150%) with respect to the ProShares Ultra VIX Short-Term Futures ETF) of the period return of the Index because the return of each Fund is the result of its return for each day compounded over the period and usually will differ in amount and possibly even direction for the same period. These differences can be significant.
The Exchange deems the Shares to be equity securities, thus rendering trading in the Shares subject to the Exchange's existing rules governing the trading of equity securities. The Exchange will allow trading in the Shares during all trading sessions and has the appropriate rules to facilitate transactions in the Shares during all trading sessions. As provided in BZX Rule 11.11(a), the minimum price variation for quoting and entry of orders in securities traded on the Exchange is $0.01, with the exception of securities that are priced less than $1.00, for which the minimum price variation for order entry is $0.0001.
Trading of the Shares through the Exchange will be subject to the Exchange's surveillance procedures for derivative products, including Trust Issued Receipts. The Exchange will allow trading in the Shares during all trading sessions on the Exchange and has the appropriate rules to facilitate transactions in the Shares during all trading sessions. The Exchange believes that its surveillance procedures are adequate to properly monitor the trading of the Shares on the Exchange during all trading sessions and to deter and detect violations of Exchange rules and the applicable federal securities laws. All of the VIX Futures Contracts held by the Funds will trade on markets that are a member of ISG or affiliated with a member of ISG or with which the Exchange has in place a comprehensive surveillance sharing agreement.
Prior to the commencement of trading, the Exchange will inform its members in an Information Circular of the special characteristics and risks associated with trading the Shares. Specifically, the Information Circular will discuss the following: (1) The procedures for purchases and redemptions of Shares in Creation Units (and that Shares are not individually redeemable); (2) BZX Rule 3.7, which imposes suitability obligations on Exchange members with respect to recommending transactions in the Shares to customers; (3) how information regarding the IIV and the Disclosed Portfolio is disseminated; (4) the risks involved in trading the Shares outside of Regular Trading Hours
The Information Circular will advise ETP Holders, prior to the commencement of trading, of the prospectus delivery requirements applicable to the Funds. The Exchange notes that investors purchasing Shares directly from the Funds will receive a prospectus. Members purchasing Shares from the Funds for resale to investors will deliver a prospectus to such investors. The Information Circular will reference the FINRA Regulatory Notices regarding sales practice and customer margin requirements for FINRA members applicable to leveraged ETFs and options on leveraged ETFs. The Information Circular will also discuss any exemptive, no-action and interpretive relief granted by the Commission from any rules under the Act.
In addition, the Information Circular will reference that the Funds are subject to various fees and expenses described in the Registration Statement. The Information Circular will also reference that the Commodity Futures Trading Commission has regulatory jurisdiction over futures contracts traded on U.S. markets.
The Information Circular will also disclose the trading hours of the Shares of the Funds and that the NAV for the Shares is calculated after 4:00 p.m. E.T. each trading day. The Information Circular will disclose that information about the Shares of the Funds is publicly available on the Funds' website.
The Exchange believes that the proposal is consistent with Section 6(b) of the Act
The Exchange believes that the proposed rule change is designed to prevent fraudulent and manipulative acts and practices in that the Shares will be listed and traded on the Exchange pursuant to the initial and continued listing criteria under Rule 14.11(f)(4). If the Sponsor to the Trust issuing the Trust Issued Receipts is affiliated with a broker-dealer, such Sponsor to the Trust shall erect and maintain a “fire wall” between the Sponsor and the broker-dealer with respect to access to information concerning the composition and/or changes to the Funds' portfolio. The Sponsor is not a broker-dealer, but is affiliated with a broker-dealer dealer and has implemented and will maintain a “fire wall” with respect to such broker-dealer regarding access to information concerning the composition and/or changes to the portfolio. In the event that (a) the Sponsor becomes a broker-dealer or newly affiliated with a broker-dealer, or (b) any new sponsor is a broker-dealer or becomes affiliated with a broker-dealer, it will implement and maintain a fire wall with respect to its relevant personnel or such broker-dealer affiliate, as applicable, regarding access to information concerning the composition and/or changes to the portfolio, and will be subject to procedures designed to prevent the use and dissemination of material non-public information regarding the portfolio. The Exchange, FINRA, on behalf of the Exchange, or both may obtain information regarding trading in the Shares and the underlying listed instruments, including listed derivatives, held by the Funds from markets and other entities that are members of ISG or with which the Exchange has in place a comprehensive surveillance sharing agreement. In addition, the Exchange also has a general policy prohibiting the distribution of material, non-public information by its employees.
The proposed rule change is designed to promote just and equitable principles of trade and to protect investors and the public interest in that the Exchange will obtain a representation from the issuer of the Shares that the NAV will be calculated daily and that the NAV and the Funds' holdings will be made available to all market participants at the same time. In addition, a large amount of information is publicly available regarding the Funds and the Shares, thereby promoting market transparency. Moreover, the IIV will be disseminated by one or more major market data vendors at least every 15 seconds during Regular Trading Hours. On each Business Day, before commencement of trading in Shares during Regular Trading Hours, the Funds will disclose on their website the holdings that will form the basis for the Fund's calculation of NAV at the end of the Business Day. Pricing information will be available on the Funds' website including: (1) The prior Business Day's reported NAV, the closing market price or the bid/ask price, daily trading volume, and a calculation of the premium and discount of the closing market price or bid/ask price against the NAV; and (2) data in chart format displaying the frequency distribution of discounts and premiums of the daily closing price against the NAV, within appropriate ranges, for each of the four previous calendar quarters. Additionally, information regarding market price and trading of the Shares will be continually available on a real-time basis throughout the day on brokers' computer screens and other electronic services, and quotation and last sale information for the Shares will be available on the facilities of the CTA. The website for the Funds will include a form of the prospectus for each Fund and additional data relating to NAV and other applicable quantitative information. Trading in Shares of the Funds will be halted under the conditions specified in Exchange Rule 11.18. Trading may also be halted because of market conditions or for reasons that, in the view of the Exchange, make trading in the Shares inadvisable. Finally, trading in the Shares will be subject to 14.11(f)(4)(C)(ii), which sets forth circumstances under which Shares of the Funds may be halted. In addition, as noted above, investors will have ready access to information regarding the Funds' holdings, the IIV, the Index value, and quotation and last sale information for the Shares.
Quotation and last-sale information regarding the Shares will be disseminated through the facilities of the CTA. Quotation and last-sale information regarding VIX Futures Contracts will be available from the exchanges on which such instruments are traded. Quotation and last-sale information for swaps will be available from nationally recognized data services providers, such as Reuters and Bloomberg, through subscription agreements or from a broker-dealer who makes markets in such instruments. Quotation and last-sale information for swaps will be valued on the basis of quotations or equivalent indication of value supplied by a third- party pricing service or broker-dealer who makes markets in such instruments. Pricing information regarding Cash Equivalents in which the Fund may invest is generally available through nationally recognized data services providers, such as Reuters and Bloomberg, through subscription agreements.
The proposed rule change is designed to perfect the mechanism of a free and open market and, in general, to protect investors and the public interest in that it will facilitate the listing and trading of an exchange-traded product that will enhance competition among market participants, to the benefit of investors and the marketplace. As noted above, the Exchange has in place surveillance procedures relating to trading in the Shares and may obtain information via ISG from other exchanges that are members of ISG or with which the Exchange has entered into a comprehensive surveillance sharing agreement. In addition, as noted above, investors will have ready access to information regarding the Funds' holdings, the IIV, and quotation and last sale information for the Shares. The Information Circular will also reference the FINRA Regulatory Notices regarding sales practice and customer margin requirements for FINRA members applicable to leveraged ETFs and options on leveraged ETFs.
For the above reasons, the Exchange believes that the proposed rule change is consistent with the requirements of Section 6(b)(5) 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 purpose of the Act. The Exchange notes that the proposed rule change, rather will facilitate the transfer from Arca and listing of additional exchange-traded products on the Exchange, which will enhance competition among listing venues, to the benefit of issuers, investors, and the marketplace more broadly.
The Exchange has neither solicited nor received written comments on the proposed rule change.
Because the foregoing proposed rule change does not: (i) Significantly affect the protection of investors or the public interest; (ii) impose any significant burden on competition; and (iii) become operative for 30 days from the date on which it was filed, or such shorter time as the Commission may designate, it has become effective pursuant to Section 19(b)(3)(A) of the Act
A proposed rule change filed under Rule 19b-4(f)(6)
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.
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 (“Act”),
The Exchange proposes to list and trade Shares of the ProShares VIX Short-Term Futures ETF and the ProShares VIX Mid-Term Futures ETF (each a “Fund” and, collectively, the “Funds”) under Rule 14.11(f)(4), which governs the listing and trading of Trust Issued Receipts
The text of the proposed rule change is also available on the Exchange's website (
In its filing with the Commission, the Exchange included statements concerning the purpose of and basis for the proposed rule change and discussed any comments it received on the proposed rule change. The text of these statements may be examined at the places specified in Item IV below. The Exchange has prepared summaries, set forth in sections A, B, and C below, of the most significant aspects of such statements.
The Exchange proposes to list and trade Shares of the ProShares VIX Short-Term Futures ETF and the ProShares VIX Mid-Term Futures ETF (each a “Fund” and, collectively, the “Funds”) under Rule 14.11(f)(4), which governs the listing and trading of Trust Issued Receipts
The Funds seek to provide investment results (before fees and expenses) that match the performance of a benchmark that seeks to offer exposure to market volatility through publicly traded futures markets. The benchmark for ProShares VIX Short-Term Futures ETF is the S&P 500 VIX Short-Term Futures Index (ticker symbol SPVIXSTR) and the benchmark for ProShares VIX Mid-Term Futures ETF is the S&P 500 VIX Mid-Term Futures Index (ticker symbol SPVIXMTR, each an “Index”, and, collectively, the “Indexes”).
ProShare Capital Management LLC (the “Sponsor”), a Maryland limited liability company, serves as the Sponsor of ProShares Trust II (the “Trust”). The Sponsor is a commodity pool operator.
If the Sponsor to the Trust issuing the Trust Issued Receipts is affiliated with a broker-dealer, such Sponsor to the Trust shall erect a “fire wall” between the Sponsor and the broker-dealer with respect to access to information concerning the composition and/or changes to such Trust portfolio. The Sponsor is not a broker-dealer, but is affiliated with a broker-dealer and has implemented and will maintain a “fire wall” with respect to such broker-dealer regarding access to information concerning the composition and/or
According to the Registration Statement, if a Fund is successful in meeting its objective, its value (before fees and expenses) should gain approximately as much on a percentage basis as the level of its corresponding Index when the Index rises. Conversely, its value (before fees and expenses) should lose approximately as much on a percentage basis as the level of its corresponding Index when the Index declines. Each Fund acquires exposure through VIX futures contracts traded on the Cboe Futures Exchange (“VIX Futures Contracts”) (“CFE”), such that each Fund typically has exposure intended to approximate the benchmark at the time of its net asset value (“NAV”) calculation.
According to the Registration Statement, each Fund is not actively managed by traditional methods, which typically involve effecting changes in the composition of a portfolio on the basis of judgments relating to economic, financial and market considerations with a view toward obtaining positive results under all market conditions. Rather, each Fund seeks to remain fully invested at all times in investment positions that, in combination, provide exposure to its Index consistent with its investment objective, even during periods in which that benchmark is flat or moving in a manner which causes the value of a Fund to decline.
In seeking to achieve each Fund's investment objective, the Sponsor uses a mathematical approach to investing. Using this approach, the Sponsor determines the type, quantity and mix of investment positions that the Sponsor believes in combination should produce daily returns consistent with such Fund's objective. The Sponsor relies upon a pre-determined model to generate orders that result in repositioning the Funds' investments in accordance with their respective investment objectives.
The Indexes are comprised of, and the value of the Funds will be based on, VIX Futures Contracts. VIX Futures Contracts are measures of the market's expectation of the level of VIX at certain points in the future, and as such will behave differently than current, or spot, VIX.
While the VIX represents a measure of the current expected volatility of the S&P 500 over the next 30 days, the prices of VIX Futures Contracts are based on the current expectation of what the expected 30-day volatility will be at a particular time in the future (on the expiration date). For example, a VIX Futures Contract purchased in March that expires in May, in effect, is a forward contract on what the level of the VIX, as a measure of 30-day implied volatility of the S&P 500, will be on the May expiration date. The forward volatility reading of the VIX may not correlate directly to the current volatility reading of the VIX because the implied volatility of the S&P 500 at a future expiration date may be different from the current implied volatility of the S&P 500. To illustrate, on December 4, 2019, the VIX closed at a price of 14.8 and the price of the February 2020 VIX Futures Contracts expiring on February 19, 2020 was 18.125. In this example, the price of the VIX represented the 30-day implied, or “spot,” volatility (the volatility expected for the period from December 5, 2019 to January 5, 2020) of the S&P 500 and the February 2020 VIX Futures Contracts represented forward implied volatility (the volatility expected for the period from February 19 to March 19, 2020) of the S&P 500.
According to the Registration Statement, the Indexes act as a measure of the implied volatility of the S&P 500 as reflected by the price of certain VIX Futures Contracts (the “Index Components”), with the price of each VIX Futures Contract reflecting the market's measure of the expected volatility (
Unlike the Indexes, the VIX, which is not a benchmark for either Fund, is calculated based on the prices of put and call options on the S&P 500, which are traded on Cboe Exchange, Inc.
The S&P 500 VIX Short-Term Futures Index employs rules for selecting the Index Components and a formula to calculate a level for the Index from the prices of these components. Specifically, the Index Components represent the prices of the two near-term VIX futures months, replicating a position that rolls the nearest month VIX Futures Contract to the next month VIX Futures Contract on a daily basis in equal fractional amounts. This results in a constant weighted average maturity of one month. The roll period begins on the Tuesday prior to the monthly CFE VIX Futures Contracts settlement date and runs through the Tuesday prior to the subsequent month's CFE VIX Futures Contract settlement date.
The S&P 500 VIX Mid Term Futures Index also employs rules for selecting the Index Components and a formula to calculate the level of the Index from the prices of these components. Currently, the Index Components represent the prices for four contract months of VIX Futures Contracts, representing a market-based estimation of constant maturity, five month forward implied VIX values. The S&P 500 VIX Mid-Term Futures Index measures the return from a rolling long position in the fourth, fifth, sixth and seventh month VIX Futures Contracts, and rolls continuously throughout each month while maintaining positions in the fifth and sixth month contracts. This results in a constant weighted average maturity of five months.
The level of each Index is calculated in accordance with the method described in the Registration Statement. The level of each Index will be published at least every 15 seconds both in real time from 9:30 a.m. to 4:00 p.m., E.T. and at the close of trading on each Business Day
The Index Components comprising each Index represent the prices of certain futures contracts on the VIX. Each Index takes a daily rolling long position in contracts of specified maturities and is intended to reflect the returns that are potentially available through an unleveraged investment in those contracts. The S&P 500 VIX Short-Term Futures Index measures the return from a rolling long position in the first and second month VIX Futures Contracts. The Index rolls continuously throughout each month from the first month VIX Futures Contracts into the second month VIX Futures Contracts. The S&P 500 VIX Mid-Term Futures Index measures the return from a rolling long position in the fourth, fifth, sixth and seventh month VIX Futures Contracts. The Index rolls continuously throughout each month from the fourth month contract into the seventh month contract while maintaining positions in the fifth month and sixth month contracts.
The Indexes roll on a daily basis. One of the effects of daily rolling is to maintain a constant weighted average maturity for the underlying futures contracts. Unlike equities, which typically entitle the holder to a continuing stake in a corporation, futures contracts normally specify a certain date for the delivery of the underlying asset or financial instrument or, in the case of futures contracts relating to indices such as the VIX, a certain date for payment in cash of an amount determined by the level of the underlying index. The Indexes operate by selling, on a daily basis, Index Components with a nearby settlement date and purchasing Index Components with a longer-dated settlement date. The roll for each contract occurs on each Business Day according to a pre-determined schedule that has the effect of keeping constant the weighted average maturity of the relevant futures contracts. This process is known as “rolling” a futures position, and each Index is a “rolling index”. The constant weighted average maturity for the futures underlying the S&P 500 VIX Short-Term Futures Index is one month and for the futures underlying the S&P 500 VIX Mid-Term Futures Index is five months.
Because the Indexes incorporate this process of rolling futures positions on a daily basis, and the Funds, in general, also roll their positions on a daily basis, the daily roll is not anticipated to be a significant source of tracking error between either Fund and its respective Index. The Indexes are based on VIX Futures Contracts and not the VIX, and, as such, neither the Funds nor the Indexes are expected to track the VIX.
The Funds will create and redeem Shares from time to time in one or more Creation Units. A Creation Unit is a block of 25,000 Shares. Except when aggregated in Creation Units, the Shares are not redeemable securities.
On any Business Day, an authorized participant may place an order with the Distributor to create one or more Creation Units.
The procedures by which an authorized participant can redeem one or more Creation Units mirror the procedures for the purchase of Creation Units. On any Business Day, an authorized participant may place an order with the Distributor to redeem one or more Creation Units. The redemption proceeds from a Fund consist of the cash redemption amount. The cash redemption amount is equal to the NAV of the number of Creation Unit(s) of a Fund requested in the authorized participant's redemption order as of the time of the calculation of a Fund's NAV on the redemption order date, less applicable transaction fees.
The NAV for the Funds' Shares will be calculated by the Administrator once a day and will be disseminated daily to all market participants at the same time.
Quotation and last-sale information regarding the Shares will be disseminated through the facilities of the Consolidated Tape Association (“CTA”). Information relating to VIX Futures Contracts will be available from the exchange on which such instruments are traded. Pricing information regarding VIX Futures Contracts is generally available through nationally recognized data services providers through subscription agreements. Pricing information regarding Cash and Cash Equivalents in which the Funds may invest is generally available through nationally recognized data services providers, such as Reuters and Bloomberg, through subscription agreements.
In addition, the Funds' website at
In addition, in order to provide updated information relating to the Funds for use by investors and market professionals, an updated Intraday Indicative Value (“IIV”) will be calculated. The IIV is an indicator of the value of the VIX Futures Contracts and Cash and/or Cash Equivalents less liabilities of a Fund at the time the IIV is disseminated. The IIV will be calculated and widely disseminated by one or more major market data vendors every 15 seconds throughout Regular Trading Hours.
In addition, the IIV is published on the Exchange's website and is available through on-line information services such as Bloomberg and Reuters.
The IIV disseminated during Regular Trading Hours should not be viewed as an actual real time update of the NAV, which is calculated only once a day. The IIV also should not be viewed as a precise value of the Shares.
The Exchange believes that dissemination of the IIV provides additional information regarding the Funds that is not otherwise available to the public and is useful to professionals and investors in connection with the related Shares trading on the Exchange or the creation or redemption of such Shares.
Additional information regarding the Funds and the Shares, including investment strategies, risks, creation and redemption procedures, fees, portfolio holdings disclosure policies, distributions and taxes is included in the Registration Statement.
The Shares of each Fund will conform to the initial and continued listing criteria under BZX Rule 14.11(f)(4). The Exchange represents that, for initial and continued listing, the Funds and the Trust must be in compliance with Rule 10A-3 under the Act. A minimum of 100,000 Shares of each Fund will be outstanding at the commencement of trading on the Exchange. The Exchange will obtain a representation from the issuer of the Shares that the NAV per Share for each Fund will be calculated daily and will be made available to all market participants at the same time.
With respect to trading halts, the Exchange may consider all relevant factors in exercising its discretion to halt or suspend trading in the Shares of the Funds. The Exchange will halt trading in the Shares under the conditions specified in BZX Rule 11.18. Trading may be halted because of market conditions or for reasons that, in the view of the Exchange, make trading in the Shares inadvisable. These may include: (1) The extent to which trading is not occurring in the securities and/or the financial instruments composing the daily disclosed portfolio of the Funds; or (2) whether other unusual conditions or circumstances detrimental to the maintenance of a fair and orderly market are present. Trading in the Shares also will be subject to Rule 14.11(f)(4)(C)(ii), which sets forth circumstances under which Shares of a Fund may be halted.
The Exchange represents that the Exchange may halt trading in the Shares of a Fund during the day in which an interruption to the dissemination of the IIV, the value of an Index, the VIX or the value of the underlying VIX Futures Contracts occurs. If an interruption to the dissemination of the IIV, the value of an Index, the VIX or the value of the underlying VIX Futures Contracts persists past the trading day in which it occurred, the Exchange will halt trading no later than the beginning of the trading day following the interruption. In addition, if the Exchange becomes aware that the NAV with respect to the Shares is not disseminated to all market participants at the same time, it will halt trading in the Shares until such time as the NAV is available to all market participants.
The Exchange deems the Shares to be equity securities, thus rendering trading in the Shares subject to the Exchange's existing rules governing the trading of equity securities. The Exchange will allow trading in the Shares during all trading sessions on the Exchange and has the appropriate rules to facilitate transactions in the Shares during all trading sessions. As provided in BZX Rule 11.11(a), the minimum price variation for quoting and entry of orders in securities traded on the Exchange is $0.01, with the exception of securities that are priced less than $1.00, for which the minimum price variation for order entry is $0.0001.
Trading of the Shares through the Exchange will be subject to the Exchange's surveillance procedures for derivative products, including Trust Issued Receipts. The Exchange believes that its surveillance procedures are adequate to properly monitor the trading of the Shares on the Exchange during all trading sessions and to deter and detect violations of Exchange rules and the applicable federal securities laws. All of the VIX Futures Contracts held by the Funds will trade on markets that are a member of ISG or affiliated with a member of ISG or with which the Exchange has in place a comprehensive surveillance sharing agreement.
Prior to the commencement of trading, the Exchange will inform its members in an Information Circular of the special characteristics and risks
In addition, the Information Circular will advise members, prior to the commencement of trading, of the prospectus delivery requirements applicable to the Funds. Members purchasing Shares from the Funds for resale to investors will deliver a prospectus to such investors. The Information Circular will also discuss any exemptive, no-action and interpretive relief granted by the Commission from any rules under the Act.
In addition, the Information Circular will reference that the Funds are subject to various fees and expenses described in the Registration Statement. The Information Circular will also disclose the trading hours of the Shares of the Funds and the applicable NAV calculation time for the Shares. The Information Circular will disclose that information about the Shares of the Funds will be publicly available on the Funds' website.
The Exchange believes that the proposal is consistent with Section 6(b) of the Act
The Exchange believes that the proposed rule change is designed to prevent fraudulent and manipulative acts and practices in that the Shares will be listed and traded on the Exchange pursuant to the initial and continued listing criteria in Exchange Rule 14.11(f). The Exchange believes that its surveillance procedures are adequate to properly monitor the trading of the Shares on the Exchange during all trading sessions and to deter and detect violations of Exchange rules and the applicable federal securities laws. If the Sponsor to the Trust issuing the Trust Issued Receipts is affiliated with a broker-dealer, such Sponsor to the Trust shall erect and maintain a “fire wall” between the Sponsor and the broker-dealer with respect to access to information concerning the composition and/or changes to the Funds' portfolios. The Sponsor is not a broker-dealer, but is affiliated with a broker-dealer dealer and has implemented and will maintain a “fire wall” with respect to such broker-dealer regarding access to information concerning the composition and/or changes to the portfolio. In the event that (a) the Sponsor becomes a broker-dealer or newly affiliated with a broker-dealer, or (b) any new sponsor is a broker-dealer or becomes affiliated with a broker-dealer, it will implement and maintain a fire wall with respect to its relevant personnel or such broker-dealer affiliate, as applicable, regarding access to information concerning the composition and/or changes to the portfolio, and will be subject to procedures designed to prevent the use and dissemination of material non-public information regarding the portfolio. The Exchange, FINRA, on behalf of the Exchange, or both may obtain information regarding trading in the Shares and the underlying VIX Futures Contracts via the ISG from other exchanges who are members or affiliates of the ISG or with which the Exchange has entered into a comprehensive surveillance sharing agreement. In addition, the Exchange also has a general policy prohibiting the distribution of material, non-public information by its employees.
The proposed rule change is designed to promote just and equitable principles of trade and to protect investors and the public interest in that the Exchange will obtain a representation from the issuer of the Shares that the NAV will be calculated daily and that the NAV and the Funds' holdings will be made available to all market participants at the same time. In addition, a large amount of information is publicly available regarding the Funds and the Shares, thereby promoting market transparency. Moreover, the IIV will be disseminated by one or more major market data vendors at least every 15 seconds during Regular Trading Hours. On each Business Day, before commencement of trading in Shares during Regular Trading Hours, the Funds will disclose on their website the holdings that will form the basis for each Fund's calculation of NAV at the end of the Business Day. Pricing information will be available on the Funds' website including: (1) The prior Business Day's reported NAV, the closing market price or the bid/ask price, daily trading volume, and a calculation of the premium and discount of the closing market price or bid/ask price against the NAV; and (2) data in chart format displaying the frequency distribution of discounts and premiums of the daily closing price against the NAV, within appropriate ranges, for each of the four previous calendar quarters. Additionally, information regarding market price and trading of the Shares will be continually available on a real-time basis throughout the day on brokers' computer screens and other electronic services, and quotation and last sale information for the Shares will be available on the facilities of the CTA. The website for the Funds will include a form of the prospectus for each Fund and additional data relating to NAV and other applicable quantitative information. Trading in Shares of the Funds will be halted under the conditions specified in Exchange Rule 11.18. Trading may also be halted because of market conditions or for reasons that, in the view of the Exchange, make trading in the Shares inadvisable. Finally, trading in the Shares will be subject to 14.11(f)(4)(C)(ii), which sets forth circumstances under which Shares of the Funds may be halted. In addition, as noted above, investors will have ready access to information regarding the Funds' holdings, the Indexes, the IIV, and quotation and last sale information for the Shares.
Quotation and last-sale information regarding the Shares will be disseminated through the facilities of the CTA. Quotation and last-sale information regarding VIX Futures Contracts will be available from the exchanges on which such instruments are traded. Pricing information regarding Cash and Cash Equivalents in which the Funds will invest is generally available through nationally recognized data services providers, such as Reuters and Bloomberg, through subscription agreements.
The proposed rule change is designed to perfect the mechanism of a free and open market and, in general, to protect
For the above reasons, the Exchange believes that the proposed rule change is consistent with the requirements of Section 6(b)(5) 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 purpose of the Act. The Exchange notes that the proposed rule change, rather will facilitate the transfer from Arca and listing of additional exchange-traded products on the Exchange, which will enhance competition among listing venues, to the benefit of issuers, investors, and the marketplace more broadly.
The Exchange has neither solicited nor received written comments on the proposed rule change.
Because the foregoing proposed rule change does not: (i) Significantly affect the protection of investors or the public interest; (ii) impose any significant burden on competition; and (iii) become operative for 30 days from the date on which it was filed, or such shorter time as the Commission may designate, it has become effective pursuant to Section 19(b)(3)(A) of the Act
A proposed rule change filed under Rule 19b-4(f)(6)
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.
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 proposes to list and trade shares of the Invesco Real Assets ESG ETF and the Invesco US Large Cap Core ESG ETF pursuant to Rule 14.11(m), Tracking Fund Shares,
The text of the proposed rule change is also available on the Exchange's website (
In its filing with the Commission, the Exchange included statements concerning the purpose of and basis for the proposed rule change and discussed any comments it received on the proposed rule change. The text of these statements may be examined at the places specified in Item IV below. The Exchange has prepared summaries, set forth in sections A, B, and C below, of the most significant aspects of such statements.
The Exchange proposes to list and trade shares of the Invesco Real Assets ESG ETF and the Invesco US Large Cap Core ESG ETF pursuant to Rule 14.11(m), Tracking Fund Shares,
The Shares will be offered by the Trust, which was organized as a Delaware statutory trust on November 6, 2007. The Trust is registered with the Commission as an open-end investment company and has filed a registration statement on behalf of the Funds on Form N-1A with the Commission.
The Shares will conform to the initial and continued listing criteria under Rule 14.11(m) as well as all terms in the Exemptive Order. The Exchange represents that, for initial and/or continued listing, each Fund will be in compliance with Rule 10A-3 under the Act.
The Fund's holdings will conform to the permissible investments as set forth in the Exemptive Relief and the holdings will be consistent with all requirements in the Exemptive Relief.
The Fund seeks capital appreciation as its investment objective with a secondary objective of current income. The Fund seeks to achieve its investment objective by investing primarily in exchange-traded equity securities of “real assets” companies (as identified below) located in North America that meet high environmental, social and governance (“ESG”) standards, as determined by the Sub-Adviser. Real assets are characterized by having physical attributes, including real estate, infrastructure, natural resources and timber. The Sub-Adviser considers “real assets” companies to be those that own, operate, or derive a significant portion of their value from real assets or the production thereof. In selecting equity securities for the Fund, the investment team uses fundamental analysis to identify securities that adhere to ESG principals described herein and are viewed to have relatively favorable long-term prospects. Some of the factors that the investment team considers include, but are not limited to: Assessment of long term fundamental growth, sustainable dividends, attractive physical and locational attributes and capital structure viability. As a result of the analysis, the investment team generally favors companies with a balanced mix of the factors above. The investment team will consider selling a security when it no longer meets the investment criteria, or a more attractive alternative is identified. The Fund may invest in companies of any market capitalization.
The Fund's holdings will conform to the permissible investments as set forth in the Exemptive Relief and the holdings will be consistent with all requirements in the Exemptive Relief.
The Fund seeks capital appreciation as its investment objective. The Fund seeks to achieve its investment objective by investing, under Normal Market Conditions,
Rule 14.11(m)(4)(B)(iv) provides that (a) the Exchange may consider all relevant factors in exercising its discretion to halt trading in a series of Tracking Fund Shares. Trading may be halted because of market conditions or for reasons that, in the view of the Exchange, make trading in the Shares inadvisable. These may include: (i) The extent to which trading is not occurring in the securities and/or the financial instruments composing the Tracking Basket or Fund Portfolio; or (ii) whether other unusual conditions or circumstances detrimental to the
The Exchange deems Tracking Fund Shares to be equity securities, thus rendering trading in the Shares subject to the Exchange's existing rules governing the trading of equity securities.
For the Funds, the Tracking Basket will consist of a combination of the Fund's recently disclosed portfolio holdings and representative ETFs. The Exchange notes that the Tracking Basket methodology used by the Fund is substantively identical to a proposal previously approved by the Commission.
The Tracking Basket will be constructed utilizing a covariance matrix based on an optimization process to minimize deviations in the return of the Tracking Basket relative to the Fund. The proprietary optimization process mathematically seeks to minimize three key parameters that the Adviser believes are important to the effectiveness of the Tracking Basket as a hedge: Tracking error (standard deviation of return differentials between the Tracking Basket and the Fund), turnover cost, and basket creation cost.
As noted above, each Fund will also disclose the entirety of its portfolio holdings, including the name, identifier, market value and weight of each security and instrument in the portfolio, at a minimum within at least 60 days following the end of every fiscal quarter. The Exchange notes that the concept of the Tracking Basket employed under this structure is designed to provide investors with the traditional benefits of ETFs while protecting the Funds from the potential for front running or free riding of portfolio transactions, which could adversely impact the performance of a Fund.
The Exchange believes that the particular instruments that may be included in each of the Fund's respective Fund Portfolio and Tracking Basket do not raise any concerns related to the Tracking Baskets being able to closely track the NAV of the Funds because such instruments include only instruments that trade on an exchange contemporaneously with the Shares.
The Adviser anticipates that the returns between a Fund and its respective Tracking Basket will have a consistent relationship and that the deviation in the returns between a Fund and its Tracking Basket will be sufficiently small such that the Tracking Basket will provide authorized participants, arbitrageurs, and certain other market participants (collectively, “Market Makers”) with a reliable hedging vehicle that they can use to effectuate low-risk arbitrage trades in Fund Shares. The Exchange believes
The Exchange believes that the proposal is consistent with Section 6(b) of the Act
The Exchange notes that a significant amount of information about each Fund and its Fund Portfolio will be publicly available at all times. Each Fund will disclose the Tracking Basket, which is designed to closely track the daily performance of the Fund Portfolio, on a daily basis. Each Fund will at a minimum publicly disclose the entirety of its portfolio holdings, including the name, identifier, market value and weight of each security and instrument in the portfolio within at least 60 days following the end of every fiscal quarter in a manner consistent with normal disclosure requirements otherwise applicable to open-end investment companies registered under the 1940 Act. The website will include additional quantitative information updated on a daily basis, including, on a per Share basis for each Fund, the prior business day's NAV and the closing price or bid/ask price at the time of calculation of such NAV, and a calculation of the premium or discount of the closing price or bid/ask price against such NAV. The website will also disclose the percentage weight overlap between the holdings of the Tracking Basket compared to the Fund Holdings for the prior business day and any information regarding the bid/ask spread for each Fund as may be required for other ETFs under Rule 6c-11 under the 1940 Act, as amended. Price information for the exchange-listed instruments held by the Funds, including both U.S. and non-U.S. listed equity securities and U.S. exchange-listed futures will be available through major market data vendors or securities exchanges listing and trading such securities.
The Exchange represents that the Shares of the Funds will continue to comply with all other requirements applicable to Tracking Fund Shares, including the dissemination of key information such as the Tracking Basket, the Fund Portfolio, and NAV, suspension of trading or removal, trading halts, surveillance, minimum price variation for quoting and order entry, an information circular informing members of the special characteristics and risks associated with trading in the Shares, and firewalls as set forth in the Rules applicable to Tracking Fund Shares and the order approving such rules. Moreover, U.S.-listed equity securities held by the Funds will trade on markets that are a member of ISG or with which the Exchange has in place a comprehensive surveillance sharing agreement.
The Exchange believes that the proposal is designed to prevent fraudulent and manipulative acts and practices in that the Rules relating to listing and trading of Tracking Fund Shares provide specific initial and continued listing criteria required to be met by such securities.
Rules 14.11(m)(4)(B)(iii) and (iv) provide that the Exchange will consider the suspension of trading in and will commence delisting proceedings for a Fund pursuant to Rule 14.12 under any of the circumstances described above and that the Exchange may consider all relevant factors in exercising its discretion to halt trading in a series of Tracking Fund Shares. Trading may be halted because of market conditions or for reasons that, in the view of the Exchange, make trading in the Shares inadvisable.
Additionally, the Exchange believes that the requirements related to information protection enumerated under Rule 14.11(m)(2)(F) will act as a strong safeguard against any misuse and improper dissemination of information related to a Fund Portfolio, the Tracking Basket, or changes thereto. The requirement that any person or entity, including a custodian, Reporting Authority, distributor, or administrator, who has access to nonpublic information regarding the Fund Portfolio or the Tracking Basket or changes thereto, must be subject to procedures designed to prevent the use and dissemination of material nonpublic information regarding the applicable Fund Portfolio or the Tracking Basket or changes thereto will act to prevent any individual or entity from sharing such information externally.
The Exchange believes that its surveillance procedures are adequate to properly monitor the trading of the Shares on the Exchange during all trading sessions and to deter and detect violations of Exchange rules and the applicable federal securities laws. Trading of the Shares through the Exchange will be subject to the Exchange's surveillance procedures for derivative products, including Tracking Fund Shares. If a Fund is not in compliance with the applicable listing requirements, the Exchange will commence delisting procedures under Exchange Rule 14.12. In addition, the Exchange also has a general policy prohibiting the distribution of material, non-public information by its employees. Any foreign common stocks held by the Fund will be traded on an exchange that is a member of ISG or with which the Exchange has in place a comprehensive surveillance sharing agreement. All futures contracts that the Funds may invest in will be traded on a U.S. futures exchange. The Exchange or FINRA, on behalf of the Exchange, or both, will communicate as needed regarding trading in the Shares,
As provided in Rule 14.11(m)(2)(D), the Adviser will upon request make available to the Exchange and/or FINRA, on behalf of the Exchange, the daily Fund Portfolio of each Fund. The Exchange believes that the ability to access the information on an as needed basis will provide it with sufficient information to perform the necessary regulatory functions associated with listing and trading the Shares on the Exchange, including the ability to monitor compliance with the initial and continued listing requirements as well as the ability to surveil for manipulation of the Shares.
In addition, Form N-PORT requires reporting of a fund's complete portfolio holdings on a position-by-position basis on a quarterly basis within 60 days after fiscal quarter end. Investors can obtain a fund's Statement of Additional Information, its Shareholder Reports, its Form N-CSR, filed twice a year, and its Form N-CEN, filed annually. A fund's SAI and Shareholder Reports are available free upon request from the Investment Company, and those documents and the Form N-PORT, Form N-CSR, and Form N-CEN may be viewed on-screen or downloaded from the Commission's website at
Information regarding market price and trading volume of the Shares will be continually available on a real-time basis throughout the day on brokers' computer screens and other electronic services. Information regarding the previous day's closing price and trading volume information for the Shares will be published daily in the financial section of newspapers. Quotation and last sale information for the Shares will be available via the CTA high-speed line. The Exchange deems Tracking Fund Shares to be equity securities, thus rendering trading in the Shares subject to the Exchange's existing rules governing the trading of equity securities. As provided in Rule 14.11(m)(2)(C), the minimum price variation for quoting and entry of orders in securities traded on the Exchange is $0.01.
For the above reasons, the Exchange believes that the proposed rule change is consistent with the requirements of Section 6(b)(5) 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 purpose of the Act. Rather, the Exchange notes that the proposed rule change will facilitate the listing of several new series of actively-managed exchange-traded products, thus enhancing competition among both market participants and listing venues, to the benefit of investors and the marketplace.
The Exchange has neither solicited nor received written comments on the proposed rule change.
Because the foregoing proposed rule change does not: (i) Significantly affect the protection of investors or the public interest; (ii) impose any significant burden on competition; and (iii) become operative for 30 days from the date on which it was filed, or such shorter time as the Commission may designate, it has become effective pursuant to Section 19(b)(3)(A) of the Act
A proposed rule change filed under Rule 19b-4(f)(6)
At any time within 60 days of the filing of the proposed rule change, the Commission summarily may temporarily suspend such rule change if it appears to the Commission that such action is necessary or appropriate in the public interest, for the protection of investors, or otherwise in furtherance of the purposes of the Act. If the Commission takes such action, the Commission will institute proceedings to determine whether the proposed rule change should be approved or disapproved.
Interested persons are invited to submit written data, views, and arguments concerning the foregoing, including whether the proposed rule change is consistent with the Act. Comments may be submitted by any of the following methods:
• Use the Commission's internet comment form (
• Send an email to
• Send paper comments in triplicate to Secretary, Securities and Exchange Commission, 100 F Street NE, Washington, DC 20549-1090.
For the Commission, by the Division of Trading and Markets, pursuant to delegated authority.
On October 20, 2020, the Options Clearing Corporation (“OCC”) filed with the Securities and Exchange Commission (“Commission”) advance notice SR-OCC-2020-806 (“Advance Notice”)pursuant to Section 806(e)(1) of Title VIII of the Dodd-Frank Wall Street Reform and Consumer Protection Act, entitled Payment, Clearing and Settlement Supervision Act of 2010 (“Clearing Supervision Act”)
The Advance Notice concerns changes to OCC's RWD Plan. As described in greater detail below, OCC proposes to (1) update the RWD Plan to reflect changes to OCC's capital structure resulting from the disapproval of OCC's previously approved “Capital Plan”
In Chapter 6, OCC is proposing to (i) update references to OCC's internal support functions; and (ii) certain references to headcount. In Chapter 7, OCC is proposing to update staff titles to reflect changes in related office titles. In Chapter 8, OCC is proposing to update lists of (i) Clearing Members; (ii) Board participation; (iii) settlement bank and letter of credit bank; (iv) OCC's vendors and service providers; (v) updates to the extreme hypothetical scenarios designed by OCC that, if such scenarios occurred, could cause OCC to activate the RWD Plan; and (vi) key agreements.
Although the Clearing Supervision Act does not specify a standard of review for an advance notice, the stated purpose of the Clearing Supervision Act is instructive: To mitigate systemic risk in the financial system and promote financial stability by, among other things, promoting uniform risk management standards for SIFMUs and strengthening the liquidity of SIFMUs.
Section 805(a)(2) of the Clearing Supervision Act authorizes the Commission to prescribe regulations containing risk management standards for the payment, clearing, and settlement activities of designated clearing entities engaged in designated activities for which the Commission is the supervisory agency.
• To promote robust risk management;
• to promote safety and soundness;
• to reduce systemic risks; and
• to support the stability of the broader financial system.
Section 805(c) provides, in addition, that the Commission's risk management standards may address such areas as risk management and default policies and procedures, among other areas.
The Commission has adopted risk management standards under Section 805(a)(2) of the Clearing Supervision Act and Section 17A of the Exchange Act (the “Clearing Agency Rules”).
The Commission believes that the proposal contained in OCC's Advance Notice is consistent with the stated objectives and principles of Section 805(b) of the Clearing Supervision Act. Specifically, as discussed below, the Commission believes that the changes proposed in the Advance Notice are consistent with promoting robust risk management, promoting safety and soundness, reducing systemic risks, and supporting the stability of the broader financial system.
The Commission believes that the proposed changes to OCC's RWD Plan are consistent with promoting robust risk management, in particular risks arising out of severe financial or operational stress that could be presented to OCC as well as promoting safety and soundness, reducing systemic risk, and supporting the broader financial system. As a central counterparty and SIFMU,
As described above, OCC proposes to (1) update the RWD Plan to reflect changes to OCC's capital structure resulting from the disapproval of OCC's previously approved “Capital Plan”
Accordingly, and for the reasons stated above, the Commission believes the changes proposed in the Advance Notice are consistent with Section 805(b) of the Clearing Supervision Act.
Rule 17Ad-22(e)(3)(ii) under the Exchange Act requires that a covered clearing agency establish, implement, maintain, and enforce written policies and procedures reasonably designed to maintain a sound risk management framework for comprehensively managing legal, credit, liquidity, operational, general business, investment, custody, and other risks that arise in or are borne by the covered clearing agency, which includes plans for the recovery and orderly wind-down of the covered clearing agency necessitated by credit losses, liquidity shortfalls, losses from general business risk, or any other losses.
The Commission continues to believe that the RWD Plan (i) clearly describes OCC's recovery tools, which enhance OCC's ability to recover from credit losses, liquidity shortfalls, general business risk losses, or other losses, consistent with Rule 17Ad-22(e)(3)(ii); and (ii) supports OCC's ability to use risk management and recovery tools effectively to bring about a recovery by identifying in advance which tools may be most effective for different situations or needs, consistent with Rule 17Ad-22(e)(3)(ii).
By the Commission.
On October 20, 2020, NYSE Arca, Inc. (“Exchange” or “NYSE Arca”) filed with the Securities and Exchange Commission (“Commission”), pursuant to Section 19(b)(1)
NYSE Arca Rule 8.900-E(b)(1) requires the Exchange to file separate proposals under Section 19(b) of the Act before listing and trading any series of Managed Portfolio Shares on the Exchange; thus, the Exchange submitted this proposal to list and trade the Shares. The Shares will be issued by the AdvisorShares Trust (“Trust”), a statutory trust organized under the laws of the State of Delaware and registered with the Commission as an open-end management investment company.
Each Fund's holdings will conform to the permissible investments as set forth in the Exemptive Application and Exemptive Order. Pursuant to the Exemptive Order, the only permissible investments for the Funds are the following, all of which trade on a U.S. exchange contemporaneously with the Shares: Exchange-traded funds (“ETFs”), exchange-traded notes, exchange-listed common stocks, exchange-traded American Depositary Receipts, exchange-traded real estate investment trusts, exchange-traded commodity pools, exchange-traded metals trusts, exchange-traded currency trusts and exchange-traded futures, as well as cash and cash equivalents (short-term U.S. Treasury securities, government money market funds, and repurchase agreements).
The AdvisorShares Q Portfolio Blended Allocation ETF is an actively managed ETF that is primarily a “fund of funds.” Its investment objective is to seek to maximize total return over the long-term. The Fund will invest in ETFs representing all asset classes, including, but not limited to, treasury bonds, municipal bonds, investment grade corporate bonds, high-yield U.S. corporate bonds, U.S. and foreign equities, and commodities.
The AdvisorShares Q Dynamic Growth ETF is an actively managed ETF that is primarily a “fund of funds.” It will seek to achieve long-term growth by investing in ETFs representing all asset classes, including, but not limited to, treasury bonds, municipal bonds, investment grade corporate bonds, high-yield U.S. corporate bonds, U.S. and foreign equities, commodities, and volatility products.
Each Fund's investments, including derivatives, will be consistent with its investment objective and will not be used to enhance leverage (although certain derivatives and other investments may result in leverage). Each Fund's investments will not be used to seek performance that is the multiple or inverse multiple (
After careful review, the Commission finds that the proposed rule change, as modified by Amendments No. 1 and No. 2, to list and trade the Shares is consistent with the Act and the rules and regulations thereunder applicable to a national securities exchange.
The Adviser is not registered as a broker-dealer but is affiliated with a broker-dealer.
The Exchange states that trading in the Shares will be subject to the Exchange's surveillance procedures for derivative products, and that its surveillance procedures are adequate to properly monitor the trading of the Shares on the Exchange during all trading sessions and to deter and detect violations of Exchange rules and the applicable federal securities laws.
The Commission also finds that the proposal is consistent with Section 11A(a)(1)(C)(iii) of the Act,
Additionally, the Exchange's rules regarding trading halts should help ensure the maintenance of fair and orderly markets for the Shares. Trading in the Shares will be subject to NYSE Arca Rule 8.900-E(d)(2)(C), which sets forth circumstances under which trading in the Shares will be halted. NYSE Arca Rule 8.900-E(d)(2)(C)(i) provides that the Exchange may consider all relevant factors in exercising its discretion to halt trading in a series of Managed Portfolio Shares. Trading may be halted because of market conditions or for reasons that, in the view of the Exchange, make trading in the series of Managed Portfolio Shares inadvisable. These may include: (a) The extent to which trading is not occurring in the securities and/or the financial instruments composing the portfolio; or (b) whether other unusual conditions or circumstances detrimental to the maintenance of a fair and orderly market are present.
In support of this proposal, the Exchange has also made the following representations:
(1) The Shares will conform to the initial and continued listing criteria under NYSE Arca Rule 8.900-E, as well as all terms in the Exemptive Order.
(2) The Exchange states that a minimum of 100,000 Shares of each Fund will be outstanding at the commencement of trading on the Exchange.
(3) The Exchange deems the Shares to be equity securities, thus rendering trading in the Shares subject to the Exchange's existing rules governing the trading of equity securities.
(4) Prior to the commencement of trading, the Exchange will inform its Equity Trading Permit Holders (“ETP Holders”) in an Information Bulletin (“Bulletin”) of the special characteristics and risks associated with trading the Shares.
(5) FINRA, on behalf of the Exchange, or the regulatory staff of the Exchange, or both, will communicate as needed regarding trading in the Shares and certain exchange-traded instruments with other markets and other entities that are members of the Intermarket Surveillance Group (“ISG”), and FINRA, on behalf of the Exchange, or the regulatory staff of the Exchange, or both, may obtain trading information regarding trading such securities from such markets and other entities. In addition, the Exchange may obtain information regarding trading in the Shares and certain exchange-traded instruments from markets and other entities that are members of ISG or with which the Exchange has in place a comprehensive surveillance sharing agreement.
(6) The Exchange represents that, for initial and/or continued listing, each Fund will be in compliance with Rule 10A-3 under the Act.
This approval order is based on all of the Exchange's statements and representations set forth above and in Amendments No. 1 and No. 2. Additionally, the Exchange states that all statements and representations made in its proposal regarding (a) the description of the portfolio or reference assets, (b) limitations on portfolio holdings or reference assets, or (c) the applicability of Exchange rules shall constitute continued listing requirements for listing the Shares on the Exchange, as provided under NYSE Arca Rule 8.900-E(b)(1). The issuer of the Shares will be required to represent to the Exchange that it will advise the Exchange of any failure by a Fund to comply with the continued listing requirements, and, pursuant to its obligations under Section 19(g)(1) of the Act, the Exchange will surveil for compliance with the continued listing requirements. If a Fund is not in compliance with the applicable listing requirements, the Exchange will commence delisting procedures under NYSE Arca Rule 5.5-E(m).
For the foregoing reasons, the Commission finds that the proposed rule change, as modified by Amendments No. 1 and No. 2, is consistent with Section 6(b)(5) of the Act
For the Commission, by the Division of Trading and Markets, pursuant to delegated authority.
By letter dated December 1, 2020 (“Participant Letter”), BOX Exchange LLC, Cboe BYX Exchange, Inc., Cboe BZX Exchange, Inc., Cboe C2 Exchange, Inc., Cboe EDGA Exchange, Inc., Cboe EDGX Exchange, Inc., Cboe Exchange, Inc., Financial Industry Regulatory Authority, Inc. (“FINRA”), Investors Exchange LLC, Long-Term Stock Exchange, Inc., MEMX LLC, Miami International Securities Exchange LLC, MIAX Emerald, LLC, MIAX PEARL, LLC, NASDAQ BX, Inc., Nasdaq GEMX, LLC, Nasdaq ISE, LLC, Nasdaq MRX, LLC, NASDAQ PHLX LLC, The NASDAQ Stock Market LLC, New York Stock Exchange LLC, NYSE American LLC, NYSE Arca, Inc., NYSE Chicago, Inc., and NYSE National, Inc. (collectively, the “Participants”) request that the Securities and Exchange Commission (the “Commission”), pursuant to the Commission's authority under Section 36 of the Exchange Act
For the reasons set forth below, this Order grants the Participants' request for temporary exemptive relief from the above-described provisions of the CAT NMS Plan, subject to certain conditions.
In their letter, the Participants explain that Section 6.10(c)(i) of the CAT NMS Plan requires the Plan Processor
The Participants state that the OTQT must “provide authorized users with the ability to retrieve CAT Data via an online query screen that includes the ability to choose from a variety of pre-defined selection criteria,”
To support their request, the Participants state that the Participants and the Commission currently have access to “a variety of fields of processed CAT Data and/or validated (unlinked) data” via existing Plan Processor tools called DIVER and MIRS.
The Participants state that Section 8.1.2 of Appendix D of the CAT NMS Plan sets forth various performance requirements for OTQT searches. One of these requirements sets forth timeframes in which results must be returned for various types of queries (“Search Return Functionality”).
According to the Participant Letter, the OTQT provided by the Plan Processor is based on a data mart model that “supports multi-day/month/year queries on any field in the CAT and can return all records to the regulatory user for further filtering and analytics.”
The Participants therefore request temporary exemptive relief from compliance with the Search Return Functionality and the Simultaneous Query Functionality requirements of Section 8.1.2 of Appendix D of the CAT NMS Plan until July 31, 2023.
As the Participants note, Sections 6.10(c) and Appendix D, Section 8.1.1 of the CAT NMS Plan require the OTQT to “provide authorized users with the ability to retrieve CAT Data via an online query screen that includes the ability to choose from a variety of pre-defined selection criteria,”
The timeframe for “returning results” in Section 8.1.2 of Appendix D (
Appendix D, Section 8.1.2 of the CAT NMS Plan sets forth requirements for “related lifecycle events” and “complex queries.” “Related lifecycle events” are covered by the 1 minute, 30 minute, and 6 hour requirements in the CAT NMS Plan set forth above,
Appendix D, Section 8.1.2 also requires that “[t]he online targeted query tool must be able to process up to 300 simultaneous query requests with no performance degradation” (or, the “Simultaneous Query Functionality”).
Section 36 of the Exchange Act grants the Commission the authority, with certain limitations, to “conditionally or unconditionally exempt any person, security, or transaction . . . from any provision or provisions of [the Exchange Act] or of any rule or regulation thereunder, to the extent that such exemption is necessary or appropriate in the public interest, and is consistent with the protection of investors.”
The Commission believes that, pursuant to Section 36 of the Exchange Act, the temporary exemptive relief requested by the Participants is appropriate in the public interest and consistent with the protection of investors, and that, pursuant to Rule 608(e) under the Exchange Act, the temporary exemptive relief requested by the Participants is consistent with the public interest, the protection of investors, the maintenance of fair and orderly markets and the removal of impediments to, and the perfection of the mechanisms of, a national market system. The OTQT is an important regulatory tool required by the CAT NMS Plan; it is one of only three access methods that regulators have to query CAT Data, and it is the only method that can be used by regulatory staff without programming experience to directly access the CAT using tools provided by the Plan Processor. Thus, it is consistent with the public interest, the protection of investors, and the maintenance of fair and orderly markets that all facets of the OTQT are implemented consistent with the CAT NMS Plan. The Commission understands that implementing the above-described functionality will require software development and architectural changes to the existing OTQT. Providing the requested temporary exemptive relief will give the Participants additional time to properly implement the above-described functionality. The Commission believes that the long-term benefits of allowing the Participants sufficient time to correctly implement these facets of the OTQT outweigh any concerns regarding the impact of delayed implementation.
The Commission also believes that providing the requested exemptive relief on the schedule proposed by the Participants is appropriate. With respect to the Error Correction Rate Functionality requirements, the Participants request that temporary exemptive relief be granted until April 30, 2021. This schedule will align the release of the Error Correction Rate Functionality with another planned functionality release,
With respect to the Search Return Functionality and the Simultaneous Query Functionality requirements, the Participants request that temporary exemptive relief be granted until July 31, 2023. The Commission believes this deadline will give the Participants and the Plan Processor sufficient time to develop the necessary systems and technology.
The Commission is also conditioning this temporary exemptive relief on the following:
First, as a condition to this exemptive relief, the Participants would be required to satisfy all other requirements of the Full Implementation of Core Equity Reporting Requirements milestone by December 31, 2020.
Second, to better enable the Commission to monitor progress towards the reduction of query response times, the Participants would be required, as a condition to this exemptive relief, to perform the following benchmark queries to measure, on a monthly basis, the timeframes in which the OTQT returns results for the following types of queries: (1) All trades and related lifecycle linkages and/or events for a specific Customer or CAT Reporter with the ability to filter by security and time range for a specified time window up to and including an entire day; (2) all trades and related lifecycle linkages and/or events for a specific Customer or CAT Reporter in a specified date range
Third, to better enable the Commission to monitor their progress towards meeting the parallel processing requirements of the CAT NMS Plan, the Participants would also be required, as a condition to this exemptive relief, to measure on a monthly basis, using benchmark queries, the time it takes to provide results to users from OTQT searches that are run concurrently with either 50-100, 100-200, or 200-300 queries, and to evaluate whether such results otherwise meet current CAT NMS Plan and SLA performance requirements for targeted and complex queries. These measurements should be provided to the Operating Committee on a monthly basis and should be clearly set forth as factual indicators in the Quarterly Progress Reports required by Section 6.6(c) of the CAT NMS Plan.
Accordingly,
By the Commission.
Notice is hereby given of the following determinations: I hereby determine that certain objects being imported from abroad pursuant to agreements with their foreign owners or custodians for temporary display in the exhibition “Fotoclubismo: Brazilian Modernist Photography, 1946-1964” at The Museum of Modern Art, New York, New York, and at possible additional exhibitions or venues yet to be determined, are of cultural significance, and, further, that their temporary exhibition or display within the United States as aforementioned is in the national interest. I have ordered that Public Notice of these determinations be published in the
Chi D. Tran, Program Administrator, Office of the Legal Adviser, U.S. Department of State (telephone: 202-632-6471; email:
The foregoing determinations were made pursuant to the authority vested in me by the Act of October 19, 1965 (79 Stat. 985; 22 U.S.C. 2459), Executive Order 12047 of March 27, 1978, the Foreign Affairs Reform and Restructuring Act of 1998 (112 Stat. 2681,
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 to renew an information collection. The
Written comments should be submitted by January 21, 2021.
Interested persons are invited to submit written comments on the proposed information collection to the Office of Information and Regulatory Affairs, Office of Management and Budget. Comments should be addressed to the attention of the Desk Officer, Department of Transportation/FAA, and sent via electronic mail to
Sandy Liu by email at:
The collection involves the noise certification regulations of 14 CFR part 36 for aircraft. This includes information collection requirements for the noise certification of subsonic aircraft—jet airplanes and subsonic transport category large airplanes, small propeller driven airplanes and rotorcraft. The information collected are the results of noise certification tests that demonstrate compliance with 14 CFR part 36. The original information collection was implemented to show compliance in accordance with the Aircraft Noise Abatement Act of 1968; that statute is now part of the overall codification of the FAA's regulatory authority over aircraft noise in 49 U.S.C. 44715. The noise compliance report is used by the FAA in making a finding that the airplane is in noise compliance with the regulations. These compliance reports are required only once when an applicant wants to certificate an aircraft type. Without this data collection, the FAA would be unable to make the required noise certification compliance finding.
Federal Aviation Administration (FAA), Department of Transportation (DOT).
Notice of proposed extension of a limited, conditional waiver of the minimum slot usage requirement.
Due to ongoing coronavirus disease 2019 (COVID-19)-related impacts on demand for air travel, the FAA seeks comment on providing additional relief at slot-controlled and designated International Air Transport Association (IATA) Level 2 airports in the United States with regard to the Summer 2021 scheduling season ending on October 30, 2021. Two options are presented for comment: Continuation of the existing relief that the FAA has provided at these airports through March 27, 2021, on the same terms currently in effect; and a proposal by the Worldwide Airport Slot Board (WASB), which includes representatives of IATA, the Airports Council International-World (ACI World), and the Worldwide Airport Coordinators Group (WWACG). The FAA invites comment on these two different approaches for the Summer 2021 scheduling season and anticipates subsequently providing notice of its final decision. Commenters may also propose different or additional options for relief. The FAA further invites comment on whether the proposal adopted by the FAA should make relief available for the full duration of the Summer 2021 scheduling season, which ends on October 30, 2021.
Submit comments on or before December 29, 2020.
Send comments on this proposal to the U.S. Department of Transportation, Docket Operations, 1200 New Jersey Avenue SE, West Building Ground Floor, Room W12-140, Washington, DC 20590-0001; telephone: (800) 647-5527, or (202) 366-9826. You must identify FAA Docket Number FAA-2020-0862 at the beginning of your comments. You may also submit comments through the internet at
Bonnie Dragotto, Office of the Chief Counsel, Regulations Division, Federal Aviation Administration, 800 Independence Avenue SW, Washington, DC 20591; telephone: (202) 267-3808; email:
In a notice published in the
(1) All slots not intended to be operated must be returned at least four weeks prior to the date of the FAA-approved operation to allow other carriers an opportunity to operate these slots on an
(2) The waiver does not apply to slots newly allocated for initial use during the Winter 2020/2021 season. New allocations meeting minimum usage requirements remain eligible for historic precedence. The waiver does not apply to historic in-kind slots within any 30-minute or 60-minute time period, as applicable, in which a carrier seeks and obtains a similar new allocation (
(3) The waiver does not apply to slots newly transferred on an uneven basis (
Additionally, an exception may be granted and the waiver therefore applied, if a government's official action (
In addition, at designated IATA Level 2 U.S. airports—Chicago O'Hare International Airport (ORD), Newark Liberty International Airport (EWR), Los Angeles International Airport (LAX), and San Francisco International Airport (SFO)—the FAA determined to extend through March 27, 2021 its policy for prioritizing flights canceled due to COVID-19 for purposes of establishing a carrier's operational baseline in the next corresponding season, subject to the following conditions:
(1) All schedules as initially submitted by carriers and approved by the FAA and not intended to be operated must be returned at least four weeks prior to the date of the FAA-approved operation to allow other carriers an opportunity to operate these times on an
(2) The priority for FAA schedules approved for Winter 2020/2021 does not apply to net-newly approved operations for initial use during the Winter 2020/2021 season. New approved times would remain eligible for priority consideration in Winter 2021/2022 if actually operated in Winter 2020/2021 according to established processes.
Consistent with the policy for slot-controlled airports, limited exceptions may be granted from either or both of these conditions at Level 2 airports under extraordinary circumstances if a government's official action (
Since the FAA's October 7, 2020 notice was published, COVID-19 has continued to cause disruption globally and within the United States. The World Health Organization (WHO) reports COVID-19 cases in more than 200 countries, areas, and territories worldwide. For the week ending December 13, 2020, the WHO reported approximately 4.3 million new COVID-19 cases and over 75,000 new deaths, bringing the cumulative total to 70.5 million reported COVID-19 cases and 1.6 million deaths globally since the start of the public health emergency.
International travel advisories issued by the U.S. Department of State's Global Health Advisory remain in effect worldwide, including designations of either Level 3—Reconsider Travel or Level 4—Do Not Travel for more than 175 destinations.
Moreover, international travel recommendations from the Centers for Disease Control and Prevention (CDC) categorize nearly 175 countries, areas, and territories worldwide under Level 4—COVID-19 Risk Is Very High.
On May 15, 2020, the President announced the establishment of Operation Warp Speed (OWS), a national program to accelerate the development, manufacturing, and distribution of COVID-19 vaccines, therapeutics, and diagnostics.
The FAA reiterates the standards applicable to petitions for waivers of the minimum slot usage requirements in effect at DCA, JFK, and LGA, as discussed in the FAA's initial decision extending relief due to COVID-19 impacts.
At JFK and LGA, each slot must be used at least 80 percent of the time.
At DCA, any slot not used at least 80 percent of the time over a two-month period also will be recalled by the FAA.
When making decisions concerning historical rights to allocated slots, including whether to grant a waiver of the usage requirement, the FAA seeks to ensure the efficient use of valuable aviation infrastructure and maximize the benefits to airport users and the traveling public. This minimum usage requirement is expected to accommodate routine cancelations under all but the most unusual circumstances. Carriers proceed at risk if, at any time prior to a final decision, they make decisions in anticipation of the FAA granting a slot usage waiver.
At the present time, COVID-19 continues to present a highly unusual and unpredictable condition that is beyond the control of carriers. According to data submitted by Airlines for America (A4A), passenger demand has weakened dramatically as a result of the recent COVID-19 resurgence and a return to 2019 passenger volumes is not expected until calendar year 2023 or 2024.
Since the FAA's determination in October 2020 to extend relief on a conditional basis through March 27, 2021, the FAA has received submissions from stakeholders regarding whether the FAA should extend additional relief beyond March 27, 2021.
As one option for consideration, the FAA is proposing to extend through October 30, 2021, the COVID-19-related limited waiver of the minimum slot usage requirement at JFK, LGA, and DCA that the FAA has already made available on a conditional basis through March 27, 2021. As part of this option, the FAA would also extend through October 30, 2021 its COVID-19-related policy for prioritizing flights canceled or otherwise not operated as originally intended at designated IATA Level 2 airports in the United States on a conditional basis, for purposes of establishing a carrier's operational baseline in the next corresponding season (
As explained in the FAA's October 7, 2020 decision, the FAA believes the relief provided on a conditional basis through the end of the Winter 2020/2021 season at slot-controlled and designated IATA Level 2 airports in the United States addresses ongoing COVID-19-related impacts. The FAA continues to believe this approach provides carriers with flexibility during this unprecedented situation, supports the long-term viability of carrier operations at slot-controlled airports while also supporting economic recovery, and reduces the potential to suppress flight operations for which demand exists. The FAA believes an extension of the current waiver would also be generally consistent with the approach taken by other jurisdictions to date.
Another option for consideration is the WASB proposal. WASB is a forum for bringing together representatives from the airport, airline, and slot coordinator communities to develop positions on slot management rules and standards to be applied globally in the Worldwide Airport Slot Guidelines (WASG).
• Slot holders that ensure the return of any slot as allocated by the FAA for the duration of the Summer 2021 season (identified by Slot ID and/or flight number, as appropriate) on or before February 8, 2021 (approximately 7 weeks before the start of the season) would retain historic precedence for that slot in the Summer 2022 scheduling season; newly allocated slots are not eligible for this provision; eligible slots
• For slots not returned by February 8, 2021, the usual minimum slot usage threshold of 80 percent would be reduced to 50 percent during the Summer 2021 scheduling season; and,
• For slots not returned by February 8, 2021, an exception from the reduced slot usage threshold of 50 percent would be available under circumstances that may prevent airlines from operating scheduled flights for reasons other than commercial cancellations for the duration of the circumstance plus up to a 6-week recovery period; as proposed, the FAA would accept as valid justification for the non-utilization of slots, any government restrictions that prevent or severely restrict travel to specific airports, destinations (including intermediate points) or countries for which the slot was held, such as the following examples—
○ Government travel restrictions based on nationality, closed borders, government advisories related to COVID-19 that warn against all but essential travel, or complete bans on flights from/to certain countries or geographic areas;
○ Severe government restrictions related to COVID-19 on the maximum number of arriving or departing passengers on a specific flight or through a specific airport;
○ Government restrictions on movement or quarantine/isolation measures within the country or region where the airport or destination (including intermediate points) is located;
○ Government-imposed closure of businesses essential to support aviation activities (
○ Unforeseeable restrictions on airline crew, including sudden bans on entry or crew stranded in unexpected locations due to quarantine measures.
• The following conditions would apply:
○ Relief would not apply to slots held by an airline that permanently ceases operations at the airport; and,
○ New uneven transfers would not be eligible for the pre-season return provision, but would be eligible for other slot relief measures during the Summer 2021 season.
The FAA notes that the WASB proposal is silent concerning a position on further relief for prioritizing flights canceled due to COVID-19 at designated IATA Level 2 airports. The FAA further notes that certain provisions and concepts of the detailed WASB proposal would not necessarily apply in the United States to the extent that there are established differences in effect under established rules and orders governing slot management in the United States. For example, traditional concepts of “series of slots” and provision 8.7.2.2 of the WASG have not been adopted in the United States.
In addition, the FAA has received an alternative proposal concerning relief beyond March 27, 2021 from Southwest Airlines Co., which takes no position on the WASB proposal relative to JFK, opposes the WASB proposal relative to DCA and LGA, and suggests extending the FAA's current relief at DCA and LGA for an additional half season at most, through June 27, 2021. This submission has been placed in the docket associated with this notice.
The FAA seeks views and information regarding these or other proposals. The FAA further invites comment on whether the proposal adopted by the FAA should make relief available for the full duration of the Summer 2021 scheduling season, which ends on October 30, 2021. Written views and supporting data may be submitted no later than December 29, 2020 to the docket associated with this notice as explained previously in this notice. Information submitted to the FAA may be subject to disclosure under the Freedom of Information Act.
The FAA recognizes that commenters may seek to submit business information that is both customarily and actually treated as confidential. 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 notice 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 notice, it is important that you clearly designate the submitted comments, or any relevant portions thereof, as CBI. Please mark each page of your submission containing CBI as “PROPIN.” Comments containing PROPIN may be submitted by email to the Air Traffic Organization Slot Administration Office at
After receiving and reviewing comments, the FAA anticipates subsequently providing notice of its final decision.
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 to renew an information
Written comments should be submitted by January 21, 2021.
Interested persons are invited to submit written comments on the proposed information collection to the Office of Information and Regulatory Affairs, Office of Management and Budget. Comments should be addressed to the attention of the Desk Officer, Department of Transportation/FAA, and sent via electronic mail to
Sandy R. Liu by email at:
Financial Crimes Enforcement Network (FinCEN), Treasury.
Notice and request for comments.
As part of its continuing effort to reduce paperwork and respondent burden, FinCEN invites comments on the proposed renewal, without change, of a currently approved information collection found in existing Bank Secrecy Act regulations. Specifically, the regulations require casinos to develop and implement written anti-money laundering programs reasonably designed to ensure and monitor compliance with the requirements set forth in the Bank Secrecy Act regulations. Although no changes are proposed to the information collection itself, this request for comments covers a future expansion of the scope of the annual hourly burden and cost estimate associated with these regulations. This request for comments is made pursuant to the Paperwork Reduction Act of 1995.
Written comments are welcome, and must be received on or before February 22, 2021.
Comments may be submitted by any of the following methods:
•
•
Please submit comments by one method only. Comments will also be incorporated into FinCEN's review of existing regulations, as provided by Treasury's 2011 Plan for Retrospective Analysis of Existing Rules. All comments submitted in response to this notice will become a matter of public record. Therefore, you should submit only information that you wish to make publicly available.
The FinCEN Regulatory Support Section at 1-800-767-2825 or electronically at
The legislative framework generally referred to as the Bank Secrecy Act (BSA) consists of the Currency and Financial Transactions Reporting Act of 1970, as amended by the Uniting and Strengthening America by Providing Appropriate Tools Required to Intercept and Obstruct Terrorism Act of 2001 (USA PATRIOT Act) (Pub. L. 107-56) and other legislation. The BSA is codified at 12 U.S.C. 1829b, 12 U.S.C. 1951-1959, 31 U.S.C. 5311-5314 and 5316-5332, and notes thereto, with implementing regulations at 31 CFR Chapter X.
The BSA authorizes the Secretary of the Treasury,
Section 352 of the USA PATRIOT Act added subsection (h) to 31 U.S.C. 5318 of the BSA. Section 352 mandates that financial institutions establish AML programs in order to guard against money laundering. Such AML programs must include, at a minimum, the following: (a) The development of internal policies, procedures, and controls, (b) the designation of a compliance officer, (c) an ongoing employee training program, and (d) an independent audit function to test programs. Pursuant to section 352, FinCEN issued a regulation requiring casinos to develop and implement written AML programs.
• Renewal without change of a currently approved information collection.
• Propose for review and comment a renewal of the portion of the PRA burden that has been subject to notice and comment in the past (the “traditional annual PRA burden”).
• Propose for review and comment a future expansion of the scope of the PRA burden (the “future annual PRA burden”).
Part 1 of this notice describes the breakdown of the estimated number of casinos, by type. Part 2 proposes for review and comment a renewal of the estimate of the traditional annual PRA hourly burden, which includes an annual hourly burden estimate per casino similar to the estimate used in the past, with the incorporation of a more robust cost estimate. The scope and methodology used in the past assigned a total annual hourly burden estimate, per casino, to multiple recordkeeping requirements within the regulations, rather than assigning an annual hourly burden estimate, per casino, to each unique AML recordkeeping requirement.
The breakdown of casinos, by type, covered by this notice is reflected in Table 1 below:
The scope of the traditional annual PRA burden and cost estimates in this renewal encompasses all of the recordkeeping requirements included in the AML program requirements for casinos, notably: Maintaining and updating the written AML program (Action A); storing the written AML program (Action B); producing a copy of the written AML program if requested by regulatory examiners or law enforcement (Action C); and complying with the requirements in 31 CFR 1021.210(b)(2)(v) and (vi) (Action D). The prior renewal did not break the requirements down into a burden estimate for each recordkeeping requirement, but instead estimated that all of the requirements combined would require 100 hours.
For purposes of the estimate of the AML program traditional annual PRA burden, FinCEN has made the following assumptions:
(a) The written AML program is stored as an electronic file. The estimated annual burden (5 minutes per
(b) Producing the written AML program electronically to regulatory or law enforcement agencies, upon their request. FinCEN estimates the annual burden of producing the written program at 5 minutes per financial institution. The estimated annual burden represents the administrative burden involved in producing the program upon request, and not just the time required to make the program available to the requestor for inspection (for example, the actual electronic transmission), which would be nearly instantaneous.
The estimated burden associated with each portion of the traditional annual PRA estimate is as follows:
To calculate the hourly costs of the burden estimate, FinCEN identified three roles and corresponding staff positions involved in maintaining an AML program: (i) General supervision (providing process oversight); (ii) direct supervision (reviewing operational-level work and cross-checking all or a sample of the work product against supporting documentation); and (iii) clerical work (engaging in research and administrative review and filing and producing the AML program on request).
FinCEN calculated the fully-loaded hourly wage for each of these three roles by using the median wage estimated by the U.S. Bureau of Labor Statistics (BLS),
FinCEN estimates that,
For Action A set out in Table 2 above, annually maintaining and updating the AML program documentation, the cost of each hour of burden is estimated to be $48.00, as shown in Table 4 below.
For Actions B, C, and D set out in Table 2 above, the cost of each hour of burden is estimated to be $33.00, as shown in Table 5 below:
• Action B—storing the AML program.
• Action C—producing of the AML program upon request.
• Action D—complying with requirements in 31 CFR 1021.210(b)(2)(v) and (vi).
The total cost of the traditional annual PRA burden would be $3,297,273 as reflected in Table 6 below:
In the future, FinCEN intends to be more granular in estimating the annual PRA burden, by calculating the burden and cost attributed to certain, but not all, activities necessary to implement the four key elements of an AML program.
The burden hours and cost of two of the key elements of an AML program (internal controls, and designation of a BSA compliance officer) are accounted for individually across all of the 42 OMB control numbers FinCEN maintains for the various BSA regulatory requirements because those requirements necessitate that internal controls be put in place and that a BSA compliance officer be designated. For that reason, for the OMB control numbers and related regulations renewed in this notice, FinCEN generally does not intend to estimate burden hours and cost applicable to these two key elements in the future annual PRA burden.
The future annual PRA burden calculation will include the estimated burden and cost to implement the other two key elements of an AML program ((c) BSA training, and (d) independent audit) relating to the regulations and corresponding OMB control number being renewed in this notice. The future annual PRA burden calculation also will include the estimated burden and cost for a casino to (a) provide procedures to determine customer identification information, and the occurrence of suspicious activity transactions, and (b) use automated programs to aid in ensuring compliance, if the casino has automated data processing systems. These additional two elements are requirements of the casino AML program regulations, which are being renewed in this notice.
To further clarify, below are lists of actions FinCEN intends to (1) include in a future annual PRA burden estimate relating to the regulations and OMB control number renewed in this notice, and (2) cover in OMB control number renewals associated with other BSA regulatory requirements.
(a) FinCEN
i. Any generic BSA-related education and training provided to all levels of the organization, and any training provided to appropriate personnel on BSA issues in excess of that required by their job-specific responsibilities under their financial institution's AML program.
ii. The burden and cost of any internal or external independent review of compliance with BSA-specific obligations.
iii. The annual burden and cost of implementation of a compliance program that includes procedures to determine customer identification information and the occurrence of suspicious activity transactions.
iv. For casinos that have automated data processing systems, the annual cost and burden of implementation of a compliance program that provides for the use of automated programs to aid in ensuring compliance.
(b) FinCEN
i. The annual PRA burden and cost of the policies, procedures, and internal controls established in the AML
ii. the designation of a person to ensure day to day compliance with the financial institution's AML program and the BSA;
iii. AML education and training provided to personnel relating to their job specific responsibilities.
FinCEN does not have the necessary information to provide a tentative estimate for the PRA hourly burdens and costs it intends to address in the future. In addition, FinCEN does not have all the necessary information to more accurately estimate the traditional annual PRA burden. For that reason, FinCEN is relying on estimates used in prior renewals of this OMB control number and the applicable regulations. FinCEN further recognizes that after receiving public comments as a result of this notice, future traditional annual PRA hourly burden and cost estimates may vary significantly. FinCEN intends to conduct more granular studies of the actions included in the proposed scope of the annual PRA burden in the near future, to arrive at more accurate estimates of net BSA hourly burden and cost.
An Agency may not conduct or sponsor, and a person is not required to respond to, a collection of information unless the collection of information displays a valid OMB control number. Records required to be retained under the BSA must be retained for five years.
FinCEN invites comments on any aspect of the traditional annual PRA burden, as set out in Part 2 of this notice. In particular, FinCEN seeks comments on the adequacy of: (i) FinCEN's assumptions underlying its burden estimate; (ii) the estimated number of hours required by each portion of the burden; and (iii) the organizational roles of the casino engaged in each portion of the burden, the roles' estimated hourly remuneration, and the estimated proportion of time spent by each role on the requirements. FinCEN encourages commenters to include any publicly available sources for alternative estimates or methodologies.
FinCEN invites comments on the most appropriate and comprehensive means to question financial institutions about the annual hourly burden and cost. For example, as it relates to training, independent review, and maintaining and updating the AML program:
(1) How much time is spent on creating and implementing the AML training plan?
(2) How much time is spent on delivering instructor led training or creating web- based training?
(3) How much time does the casino's compliance department spend on creating AML related training content, or is the training function conducted by a team outside of the casino's compliance department?
(4) How much time is spent identifying the proper audience for training?
(5) How much time is spent tracking, and reporting on, AML-related training?
(1) How much of the casino's compliance department's time is spent on responding to inquiries or correcting deficiencies related to the independent review of the AML program?
(2) If the independent review is conducted by an internal audit department, how much of the internal audit department's time is spent creating and implementing the required testing plan for the independent review?
On average, how many times per year does your casino update its AML program?
The future annual PRA hourly burden and cost estimate of the recordkeeping necessary to comply with the AML program requirements for casinos must take into consideration only the effort involved in obtaining those data elements that are used exclusively for complying with requirements under 31 CFR 1021.210. Given the complexity in determining what portion of the effort to include in the estimate, FinCEN seeks comments from the public regarding any questions we should consider posing in future notices, in addition to the specific questions for comment outlined directly below. FinCEN welcomes any suggestions as to how to derive these estimates by using publicly available financial information.
• On average, how long does it take your casino to establish procedures for using all available information to determine and verify the name, address, social security number, and other information, of a person?
• Does your casino have a review and approval process involving senior management to evaluate the procedures used for determining and verifying customer identification information? On average, how long does the review
• How frequently does your casino collect and verify the name, address, social security number, and other information, of a person?
• On average how many new accounts does your casino open per year?
• How many accounts are for new customers?
• How long does it take your casino to open a new account for an existing customer?
• How long does it take your casino to conduct identity verification procedures for a new personal or business account?
• Is the collection of customer identification information exclusively to comply with customer identification requirements, or is it also to comply with other regulatory requirements or for other business reasons?
• On average, how long does it take your casino to establish procedures for using all available information, including your automated systems and your surveillance system and surveillance logs, to determine the occurrence of any transactions or patterns of transactions required to be reported as suspicious?
• Does your casino have a review and approval process involving senior management to evaluate the procedures used for determining suspicious activity? On average, how long does the review process take and how many approvals are necessary?
• Does your casino use automated data processing systems?
• How does your casino use its automated data processing systems to aid in ensuring compliance?
• Does your casino have a review and approval process involving senior management to evaluate the use of its automated data processing systems? On average, how long does the review process take and how many approvals are necessary?
Comments submitted in response to this notice will be summarized and/or included in the request for OMB approval. All comments will become a matter of public record. Comments are invited on: (i) Whether the collection of information is necessary for the proper performance of the functions of the agency, including whether the information shall have practical utility; (ii) the accuracy of the agency's estimate of the burden of the collection of information; (iii) ways to enhance the quality, utility, and clarity of the information to be collected; (iv) ways to minimize the burden of the collection of information on respondents, including through the use of automated collection techniques or other forms of information technology; and (v) estimates of capital or start-up costs and costs of operation, maintenance, and purchase of services to provide information.
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
38 CFR 3.59 defines the term parent as “. . . a natural mother or father (including the mother of an illegitimate child or the father of an illegitimate child if the usual family relationship existed), mother or father through adoption, or a person who for a period of not less than 1 year stood in the relationship of a parent to a Veteran at any time before his or her entry into active service.”
The information collected will be used by VBA to evaluate a claimant's parental relationship to a deceased Veteran when the claimant is not the Veteran's natural mother or father or adopted mother or father.
By direction of the Secretary.
Veterans Benefits Administration, Department of Veterans Affairs.
Notice.
Veterans Benefits Administration, Department of Veterans Affairs, Department of Veterans Affairs (VA), is announcing an opportunity for public comment on the proposed new 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 February 22, 2021.
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.
By direction of the Secretary.
Notice.
The Department of Veterans Affairs (VA), Veterans Benefits Administration (VBA), is seeking nominations of qualified candidates to be considered for appointment as members of the Veterans' Advisory Committee on Rehabilitation (hereinafter referred to as “the Committee”).
Nominations for membership on the Committee must be received by January 14, 2021, no later than 4:00 p.m., eastern standard time. Packages received after this time will not be considered for the current membership cycle.
All nomination packages should be emailed to the Designated Federal Officer, Latrese Arnold at
In carrying out the duties set forth, the Committee responsibilities include, but are not limited to, submitting to the Secretary an annual report on the rehabilitation programs and activities of the VA.
(1) Veterans with service-connected disabilities;
(2) Persons who have distinguished themselves in the public and private sectors in the fields of rehabilitation medicine, vocational guidance, vocational rehabilitation, and employment and training programs
(3) Ex officio members of the Committee shall include one representative from the Veterans Health Administration and one from the Veterans Benefits Administration; one representative each from the Rehabilitation Services Administration of the Department of Education, and the National Institute for Handicapped Research of the Department of Education; and one representative of the Assistant Secretary for Veterans' Employment and Training of the Department of Labor.
To the extent possible, the Secretary seeks members who have diverse professional and personal qualifications. We ask that nominations include information of this type so that VA can ensure a balanced Committee membership.
Individuals appointed to the Committee by the Secretary shall be invited to serve a three-year term. The Secretary may reappoint a member for an additional term of service. In accordance with Federal Travel Regulation, Committee members will receive travel expenses and a per diem allowance for any travel made in association with duties as members of the Committee and within federal travel guidelines. Self- nominations are acceptable. Any letters of nomination from organizations or other individuals should accompany the package when it is submitted. Non-Veterans are also eligible for nomination.
(1) A letter of nomination that clearly states the name and affiliation of the nominee, the basis for the nomination (
(2) the nominee's contact information, including name, mailing address, telephone numbers, and email address;
(3) the nominee's curriculum vitae;
(4) a summary of the nominee's experience and qualifications relative to the membership considerations described above; and
(5) a statement confirming that he/she is not a federally-registered lobbyist.
The Department makes every effort to ensure that the membership of VA Federal advisory committees is balanced in terms of points of view represented and the committee's function. Appointments to this Committee shall be made without discrimination based on a person's race, color, religion, sex, sexual orientation, gender identity, national origin, age, disability, or genetic information. Nominations must state that the nominee appears to have no conflict of interest that would preclude membership. An ethics review is conducted for each selected nominee.
Office of the Comptroller of the Currency, Treasury.
Final rule.
The Office of the Comptroller of the Currency is issuing a final rule to revise and reorganize its regulations relating to the activities and operations of national banks and Federal savings associations and to amend its rules relating Federal savings association corporate governance. This rule clarifies and codifies recent OCC interpretations, integrates certain regulations for national banks and Federal savings associations, and updates or eliminates outdated regulatory requirements that no longer reflect the modern financial system. Additionally, this rule includes related technical changes throughout these and other OCC regulations.
The rule is effective April 1, 2021.
Beth Kirby, Assistant Director, Valerie Song, Assistant Director, Heidi M. Thomas, Special Counsel, or Chris Rafferty, Attorney, Chief Counsel's Office, (202) 649-5490, Office of the Comptroller of the Currency, 400 7th Street SW, Washington, DC 20219.
The Office of the Comptroller of the Currency (OCC) periodically reviews its regulations to eliminate outdated or otherwise unnecessary regulatory provisions and, where possible, to clarify or revise requirements imposed on national banks and Federal savings associations.
These reviews are in addition to the OCC's decennial review of its regulations as required by the Economic Growth and Regulatory Paperwork Reduction Act (EGRPRA).
As part of this process, the Office of the Comptroller of the Currency (OCC) published a notice of proposed rulemaking (proposal or proposed rule) on July 7, 2020 to revise and reorganize subparts A through D of 12 CFR part 7, Activities and Operations.
The OCC also proposed more general changes throughout part 7 including removing outdated or superfluous regulations; consolidating related regulations into one section; and making various technical changes throughout part 7. In addition, the OCC proposed to integrate a number of rules in part 7 to include Federal savings associations.
The OCC notes that pursuant to section 4(b) of the International Banking Act,
The OCC received 16 comment letters on the proposal from banking organizations and other interested parties. These comments and the OCC's response are discussed in the next section of this
Section 7.5001 identifies the criteria the OCC uses to determine whether an electronic activity is authorized for national banks as part of, or incidental to, the business of banking under 12 U.S.C. 24(Seventh) or other statutory authority. While this section details those criteria in the context of electronic activities, the OCC uses these same criteria to determine whether any activity is part of, or incidental to, the business of banking. To confirm the broader applicability of the criteria listed in § 7.5001, the OCC proposed to remove the word “electronic” from this section and move § 7.5001 to subpart A of part 7 as new § 7.1000. As part of this move, the proposal redesignated current § 7.1000 as § 7.1024. These changes better organize OCC rules and clarify that the criteria of this new § 7.1000 apply to any potential national bank activity and not just those that are electronic in nature. Further, the OCC believes that new § 7.1000 belongs at the beginning of part 7 because it provides the framework for all national bank powers that follow in subpart A.
The OCC also proposed a technical change to redesignated § 7.1000(c)(1). The current rule provides a four factor test to determine whether an activity is part of the business of banking. However, this four-factor test is not necessary for activities that are specifically included in 12 U.S.C. 24(Seventh) or other statutory authority because they are by express statutory language within the business of banking. Therefore, the proposed rule added language to clarify that this four-factor test applies to activities not specifically included in 12 U.S.C. 24(Seventh) or other statutory authority. This clarification reflects the OCC's long-standing use of the four-factor test to determine whether an activity not expressly included in a statute is within the business of banking.
The OCC received one comment that supported new § 7.1000. Therefore, the OCC is adopting § 7.1000 as proposed.
The final rule also corrects a technical error in the proposed rule. Current § 7.5001(d)(3) contains an illustrative list of electronic activities that are incidental to the business of banking. The proposed rule inadvertently removed this list and the final rule restores it as § 7.5001, with conforming changes to the cross-reference to new § 7.1000. The OCC notes that it is reviewing this list in the broader context of potential changes to all of subpart E pursuant to the ANPR on National Bank and Federal Savings Association Digital Activities and may make further changes in the future.
The OCC proposed a technical change to its regulation at § 7.1002 relating to when a national bank acts as a finder and invited comment on the inclusion of Federal savings association finder activities in part 7. For the reasons discussed below, the OCC is adopting this technical change and also is amending § 7.1002 to include Federal savings association finder activities.
The OCC has long permitted a national bank to act as a finder to bring together buyers and sellers of financial and nonfinancial products and services.
The OCC proposed amending its regulations by adding a new § 7.1002(b)(8) that would cross-reference the permissible electronic finder activities listed in § 7.5002(a)(1). This change would reference all examples of permissible finder activities for national banks in one rule.
The OCC received one comment letter on § 7.1002. The commenter recommended revising the list of examples to reflect how finder authority is exercised in the modern financial system. The commenter specifically suggested that the OCC consider consolidating the finder authority in §§ 7.1002 and 7.5002. The OCC disagrees with this recommendation. The cross-reference sufficiently clarifies that additional finder activities are listed in that section. Further, the OCC's ANPR on National Bank and Federal Savings Association Digital Activities requested comment on the electronic finder activities list in 12 CFR 7.5002(a)(1).
The commenter further suggested that the final rule add to the list in § 7.1002(b) the making or receiving of a referral to or from a third party for a fee, and more generally suggested that the rule permit banks to accept reasonable finder fees. The OCC notes that § 7.1002 contemplates making referrals for a fee, and the list of examples in § 7.1002 includes “[a]rranging for third-party providers to offer reduced rates to those customers referred by the bank.”
The commenter's recommendation to add receiving a referral for a fee also involves adding a bank receiving and paying for finder services from a third party. Longstanding OCC interpretations confirm that banks may pay for finder services, subject to fact-specific considerations.
The same commenter recommended the OCC confirm that payment or collection of finder fees as a share of revenue is permitted. Section 7.1002(d) permits finder fees that do not violate Federal law and does not expressly prohibit specific fee arrangements. The OCC has permitted collection and payment of finder fees as a share of revenue in certain contexts.
The commenter further recommended that the final rule codify prior OCC interpretations finding that the sharing of revenue or profit alone in a referral relationship would not constitute a joint venture under State law if the parties express an intent not to create a joint venture. The proposal did not address joint ventures, and we are not inclined to address it in this rulemaking.
The commenter also recommended that the OCC confirm that a bank is not required to disclose finder fees paid or collected. The proposal did not address fee disclosure, and the OCC is not inclined to adopt this recommendation. We also note that OCC precedent requires disclosure of finder fees in certain contexts and inadequate disclosure may raise supervisory and legal concerns.
While finder activities are part of the business of banking for a national bank, a Federal savings association may engage in finder activities only to the extent that the activities are incidental to Federal savings association powers authorized under the Home Owners' Loan Act (HOLA) (12 U.S.C. 1461
As noted above, the OCC did not propose amendments to § 7.1002 related to Federal savings associations but invited comment on whether it should add a separate provision to § 7.1002 to set forth Federal savings association finder authority. In the preamble to the proposed rule, the OCC offered options to integrate Federal savings associations into § 7.1002. It described a provision for a Federal savings association to engage in finder activities to the extent that those activities are incidental to Federal savings association powers expressly authorized under the HOLA. The OCC also suggested a list of Federal savings association finder activities that the former OTS or the OCC have determined are permissible, such as collecting fees for referring customers to third parties and providing services and products indirectly to customers through a third-party discount program. The OCC specifically requested comment on what other Federal savings association finder activities the OCC could add to this list.
No commenters directly responded to the request for input on Federal savings association finder activities. However, one commenter recommended that the rule include new examples of how national banks and Federal savings associations have exercised finder authority. Because the current rule is limited to national banks, the OCC interprets this comment as a recommendation to incorporate Federal savings associations in § 7.1002.
The OCC agrees that the authority of Federal savings associations to act as finders should be codified in the OCC's regulations. Therefore, the final rule clarifies that Federal savings associations may act as finders to the extent those activities are incidental to their expressly authorized powers under HOLA. In determining whether an activity is incidental, the OCC considers whether (1) the activity facilitates or is similar to the conduct of an activity that Congress expressly authorized, (2) the activity relates to Federal savings associations' intended role as financial intermediaries, (3) the activity is necessary to enable the Federal savings association to remain competitive and relevant in the modern economy, and (4) the activity is consistent with the purpose and function Congress envisioned for Federal savings associations.
The source of finder authority for Federal savings associations is more limited and fact-specific than for national banks. The former OTS' approval of referral fees dealt with referrals to registered investment advisors and considered how those services related to a Federal savings association's expressly authorized powers.
Consistent with the current rule's treatment of national banks, the final rule permits Federal savings associations to advertise the availability of and accept a fee for finder services, unless otherwise prohibited by Federal law, and does not enable a Federal savings association to engage in brokerage activities that have not been found to be permissible for Federal savings associations.
As a result of adding Federal savings associations to § 7.1002, the final rule revises paragraph (a) to include the general description of finder activity currently included in paragraph (b) and the statement of authority for both national bank and Federal savings association finder activity. Paragraph (b)(1) includes the nonexclusive list of permissible finder activities for national banks. Paragraph (b)(2) includes the nonexclusive list of permissible finder activities for Federal savings associations. Paragraphs (c) and (d) remain unchanged except for the addition of Federal savings associations.
Twelve U.S.C. 81 provides that a national bank must transact business in the place specified in its organization certificate and in any branches established or maintained in accordance with 12 U.S.C. 36. The OCC interprets 12 U.S.C. 81 to mean that money is deemed to be lent at a bank's main office unless there is a sufficient nexus tying the transaction to another location, in which case that location must be licensed as a branch office.
Twelve U.S.C. 36 and 12 CFR 5.30 define “branch” as a place of business established by the national bank where “deposits are received, or checks paid, or money lent.” Section 7.1003 provides that for purposes of what constitutes a branch within the meaning of 12 U.S.C. 36 and 12 CFR 5.30, “money” is deemed to be “lent” only at the place, if any, where the borrower in-person receives loan proceeds directly from bank funds either (1) from the lending bank or its operating subsidiary or (2) at a facility that is established by the lending bank or its operating subsidiary. Section 7.1003(b) further provides that a borrower may receive loan proceeds directly from bank funds in person at a place that is not the bank's main office and is not licensed as a branch without violating 12 U.S.C. 36, 12 U.S.C. 81, and 12 CFR 5.30, provided that a third party is used to deliver the funds and the place is not established by the lending bank or its operating subsidiary. This paragraph defines a third party to include a person who satisfies the requirements of § 7.1012(c)(2) or one who customarily delivers loan proceeds directly from bank funds under accepted industry practice, such as an attorney or escrow agent at a real estate closing.
The OCC proposed amending § 7.1003 to incorporate an OCC interpretation that further clarifies when the OCC considers money to be lent at a location other than the main office. Specifically, proposed paragraph (c) provided that a national bank operating subsidiary may distribute loan proceeds from its own funds or bank funds directly to the borrower in person at offices the operating subsidiary established without violating 12 U.S.C. 36, 12 U.S.C. 81, and 12 CFR 5.30 if the operating subsidiary provides similar services on substantially similar terms and conditions to customers of unaffiliated entities, including unaffiliated banks.
The OCC received two comments on this proposed change. One commenter stated that if the distribution of loan proceeds by national bank operating subsidiaries does not constitute lending money then, consistent with OCC precedent, the rule should also require that the operating subsidiary actively solicit and service noncustomers and that providing services to noncustomers comprise the predominate share of the subsidiary's business. Otherwise, the commenter stated, the proposed rule will result in competitive inequality and thus be detrimental to the dual banking system. The OCC disagrees with this commenter and does not believe it needs to alter proposed paragraph (c) to be consistent with OCC precedent. The provision in the proposed regulation that the operating subsidiary “provides similar services on substantially similar terms and conditions to customers of unaffiliated entities including unaffiliated banks” should be understood to include the requirement that the bank act substantially similarly in soliciting business from customers and noncustomers. Therefore, the proposed change adequately reflects OCC precedent.
The second commenter supported the proposed changes but suggested that § 7.1003 be broadened to apply equally to facilities of either the national bank or its operating subsidiary. The OCC believes that even if a facility of the national bank itself attempted to provide services to both customers and noncustomers on substantially similar terms and conditions, the public would still perceive it as favoring bank customers and would associate it with the bank, thus giving it a competitive advantage in attracting bank customers. Thus, the OCC declines to extend this provision to include national bank facilities.
For the reasons discussed above, the OCC is adopting § 7.1003 as proposed, with a clarifying change to the section heading, clarifying changes throughout to reference “national banks” instead of “banks,” and the removal of an unnecessary comma in paragraph (c).
Section 7.1004 provides that a national bank may use the services of persons not employed by the bank for originating loans. It also provides that an employee or agent of a national bank or its subsidiary may originate a loan at a site other than the main office or a branch office of the bank without violating the branching and place of business requirements of 12 U.S.C. 36 and 12 U.S.C. 81 if the loan is approved and made at the main office or a branch office of the bank or at an office of an operating subsidiary located on the premises of, or contiguous to, the main office or branch office of the bank. Section 7.1005 provides that a national bank and its operating subsidiary may make a credit decision regarding a loan
Section 7.1004 is not intended to prescribe where a bank must perform certain activities but rather to help avoid violations of the branching laws by defining a “safe harbor” for loan origination activities that will not constitute branching.
The OCC proposed amending § 7.1004 to describe the permitted activities as “loan production activities,” and to remove § 7.1005 to simplify and streamline its rules. As proposed, paragraph (a) of § 7.1004 provided that a national bank or its operating subsidiary may engage in loan production activities at a site other than the main office or a branch office of the bank. Proposed paragraph (a) permitted a national bank or its operating subsidiary to solicit loan customers, market loan products, assist persons in completing application forms and related documents to obtain a loan, originate and approve loans, make credit decisions regarding a loan application, and offer other lending-related services such as loan information and applications at a loan production office without violating 12 U.S.C. 36 and 12 U.S.C. 81, provided that “money” is not deemed to be “lent” at that site within the meaning of § 7.1003 and the site does not accept deposits or pay withdrawals. This description of activities is not intended to alter the description of “money lent” in § 7.1003 nor affect the scope of activities that are permissible for a national bank to perform at a non-branch location. Rather, the OCC proposed this description to clarify the activities a national bank may conduct at a loan production office. The OCC proposed to redesignate former paragraph (a) as paragraph (b) and amend it to reference loan production activities instead of originating loans.
One commenter opposed combining §§ 7.1004 and 7.1005, stating this would allow national bank LPOs to conduct both loan origination and loan approval at an office accessible to the public without causing that LPO to be a branch because under the rule it would not be engaged in lending money. This commenter contends that OCC interpretive rulings and regulations have consistently maintained that money is lent at an office that conducts both loan origination and loan approval because the combination or aggregation of these activities constitutes the substantial equivalent of lending money for purposes of the definition of branch (“aggregation theory”). The commenter therefore claims that although the OCC stated that proposed § 7.1004 was not intended to “affect the scope of activities that are permissible for a national bank to perform at a non-branch location,” this revision does expand the scope of permissible LPO activities and thereby narrows the scope of activities subject to branching restrictions.
The OCC disagrees with this commenter. The proposed revisions to §§ 7.1004 and 7.1005 are consistent with the OCC's precedent and practice for the last two decades.
The OCC abandoned in the 1990s the aggregation theory relied upon by the commenter.
Because proposed § 7.1004 is consistent with the OCC precedent discussed, no changes are needed in response to this comment.
This commenter also stated that the proposed “non-branch” rules conflict with the limits on National Bank Act preemption prescribed by Congress that provide that National Bank Act preemption does not apply to agents, affiliates or subsidiaries of national banks. The OCC disagrees with this comment. The Dodd-Frank Act's limits on preemption for agents, affiliates, or subsidiaries of national banks are not implicated by this rulemaking. The proposal incorporated OCC interpretations of what constitutes a branch and a non-branch office and does not raise new preemption issues.
Lastly, this commenter stated that the proposed rule enables banks to avoid Community Reinvestment Act (CRA) obligations associated with licensed branches by expanding what can occur at non-branch national bank offices. However, the new CRA regulation provides that “[a] bank must delineate an assessment area encompassing each location where the bank maintains a main office, a branch, or a non-branch deposit-taking facility that is not an ATM . . . .”
For the reasons discussed above, the OCC adopts § 7.1004 as proposed.
Section 7.1006 permits a national bank to take as consideration for a loan: (1) A share in the profit, income, or earnings from a business enterprise of a borrower or (2) a stock warrant issued by the business enterprise of a borrower provided the bank does not exercise the warrant. This arrangement is known as an “equity kicker.” Section 7.1006 further provides that the national bank may take the share or stock warrant in addition to, or in lieu of, interest. However, the national bank may not condition the borrower's ability to repay principal on the value of the profit, income, earnings of the business enterprise or upon the value of the warrant received.
The former OTS and its predecessor, the Federal Home Loan Bank Board, permitted a Federal savings association to take a share of profit, income, or earnings as consideration for a loan. OTS found this to be not inconsistent with Federal savings association lending authority under HOLA
The OCC proposed to amend § 7.1006 to include Federal savings associations and to codify these interpretations to clarify this authority and to better provide parity with national banks. The OCC received no comments on the proposed change and adopts it in the final rule as proposed.
Section 7.1009 states that a national bank may transfer stock it has received as collateral for a loan into the bank's name as nominee.
The OCC permits a bank to perfect its security interests in collateral under applicable State laws consistent with the Uniform Commercial Code.
The OCC received one comment on this provision. The commenter argued that removing the provision may cause national banks to believe the OCC is now requiring the use of the least burdensome method for perfecting stock collateral and it is now impermissible to hold collateral stock as nominee. The commenter requested that the OCC retain the provision in the rule.
The OCC disagrees with the commenter's suggestion. Nothing in the former provision or in removing the provision requires a national bank to use the least burdensome method for perfecting its interest in stock collateral or prohibits other methods of perfection. As explained above, the OCC permits a bank to use any legally acceptable method to perfect its security interests in stock collateral under applicable State laws,
Section 7.1010 provides that a national bank may operate and receive income from a postal substation on banking premises. It describes permissible services and states that a national bank may advertise to attract customers to the bank. It also requires the bank to operate the substation in accordance with the rules and regulations of the United States Postal Service (USPS) and to keep books and records on the substation, which are subject to inspection by the USPS, separate from those of other banking operations.
The OCC proposed to amend § 7.1010 to also apply to Federal savings associations. This would be consistent with the position taken in agency guidance.
The OCC received no comments on these proposed amendments and adopts § 7.1010 as proposed.
Fifteen U.S.C. 682(b)(1) permits a national bank to invest in one or more small business investment companies (SBICs) or in any entity established solely to invest in SBICs, provided that the total amount of all SBIC investments does not exceed five percent of the bank's capital and surplus.
The OCC proposed to amend § 7.1015 to provide that a national bank may invest in a SBIC or in any entity established solely to invest in SBICs, and that purchasing stock in a SBIC is one example of this type of investment. This amendment more closely aligns § 7.1015 to 15 U.S.C. 682(b). In addition, the OCC proposed to amend § 7.1015 to provide that a national bank's SBIC investments are subject to appropriate capital limitations.
Fifteen U.S.C. 682(b)(2) provides a Federal savings association with similar authority to invest in SBICs.
The OCC also proposed to amend § 7.1015 to clarify that a national bank or Federal savings association may invest in a SBIC that is either (1) already organized and has obtained a license from the Small Business Administration or (2) in the process of being organized. The OCC has previously interpreted this authority to permit a national bank to invest in a SBIC that is in the process of being organized.
The OCC did not receive any comments on the proposed amendments to this section. Therefore, the OCC adopts these changes as proposed.
However, the OCC received one comment requesting that the OCC clarify that a national bank may retain an investment in a SBIC that has surrendered its license to operate as a SBIC during its wind-down period so long as it does not make new investments (other than investments in cash equivalents). The commenter further noted that this change would align with the Volcker Rule implementing regulations, which exclude SBICs from the definition of “covered fund,” and which were recently revised to make clear that this exclusion would continue to apply where a SBIC issuer has voluntarily
The OCC agrees with the commenter that it would be helpful to clarify that a bank may retain an interest in a SBIC during its wind-down period. This change would align with the Volcker Rule implementing regulations, and it would provide certainty to banks planning to invest in SBICs. Therefore, the OCC is revising its final rule to clarify that a national bank may retain an investment in a SBIC that has surrendered its license to operate as a SBIC during its wind-down period so long as it does not make new investments in a SBIC that is winding down (other than investments in cash equivalents).
Pursuant to 12 CFR 7.1016, a national bank may issue letters of credit and other independent undertakings within the scope of the applicable laws or rules of practice. Section 7.1016(b) provides that a national bank entering into an independent undertaking should not expose itself to undue risk and also outlines certain safety and soundness considerations for these activities. Section 7.1016 also describes specific required or recommended protections for certain undertakings, provides that a national bank should possess operational expertise that is commensurate with the sophistication of its independent undertaking activities, and requires a bank to accurately reflect its undertakings in its records.
Pursuant to § 160.50, a Federal savings association may issue letters of credit and may issue other independent undertakings as are approved by the OCC, subject to the restrictions in § 160.120. Section 160.120 contains provisions that are largely similar to the provisions applicable to national banks in § 7.1016.
The OCC proposed to apply § 7.1016 to Federal savings associations and to remove §§ 160.50 and 160.120 because of the similarities between the national bank and Federal savings association independent undertaking regulations. The OCC also proposed technical changes to the footnote to § 7.1016 to reflect updates to the laws and rules of practice cited. The OCC did not receive any comments on these amendments and adopts them as proposed.
The OCC also proposed to clarify that Federal branches and agencies of foreign banks may issue letters of credit and other independent undertakings, consistent with the conditions outlined in § 7.1016.
One commenter recommended that the OCC reinforce that the risk management considerations outlined for letters of credit and independent undertakings in § 7.1016 are not mandatory safety and soundness conditions by removing them from the text of the rule. The OCC disagrees. Section 7.1016(b) provides safety and soundness considerations for banks that issue independent undertakings. Section 7.1016(b)(1) states that, as a matter of safety and soundness, banks that issue independent undertakings should not be exposed to undue risk and should, at a minimum, consider the following before issuing independent undertakings: (1) Whether the terms make clear the independence of the undertaking; (2) whether the amount of the undertaking is limited; (3) whether the undertaking is limited in duration or, if not, whether the bank has an ability to end the undertaking or demand cash collateral from the applicant; and (4) whether the undertaking will be collateralized or include a reimbursement right. Section 7.1016(b) provides additional considerations in special circumstances to protect against credit, operational, and market risk. Section 7.1016(b)(3) states that the national bank or Federal savings association should possess operational expertise that is commensurate with the sophistication of its independent undertaking activities. By using the word “should,” these provisions clearly indicate that the listed safety and soundness considerations are not mandatory. Furthermore, the OCC finds that it is helpful to include these recommended considerations in the rule text so that national banks and Federal savings associations understand what the OCC may consider to be undue risk.
Twelve CFR 7.1021 provides that a national bank may participate in a financial literacy program on the
Facilities or premises are only considered to be branches of a national bank if they are established and operated by the national bank. The proposal provided that the OCC would consider establishment and operation in this context on a case by case basis, considering the facts and circumstances. However, the proposal stated that the premises or facility would not be a branch of the national bank if the bank met the safe harbor test in 12 CFR 7.1012(c)(2) applicable to messenger services established by third parties. The proposal also stated that the factor discussed in § 7.1012(c)(2)(i) could be met if bank employee participation in the financial literacy program consisted of managing the program or conducting or engaging in financial education activities provided the school or other organization retained control over the program and over the premises or facilities at which the program is held.
Further, the OCC proposed expanding the scope of financial literacy programs beyond schools to encompass other community-based organizations, such as non-profit organizations, that provide financial literacy programs. Finally, the proposal moved the definition of financial literacy program to the beginning of the section to clarify that, while a financial literacy program is a program for which the primary purpose is educational, this is not a factor in determining whether the premises or facility is a branch for purposes of section 36.
One commenter provided recommendations for simplifying the requirements for operating financial literacy programs. This commenter suggested incorporating the relevant standards for operating a financial literacy program within the messenger service safe harbor directly into the rule, without cross-referencing the messenger service rule. This commenter also suggested that § 7.1021 directly state, as a stand-alone provision, that a bank employee may manage the financial literacy program or engage in other financial education activities, provided the organization retains control over the program and premises at which the program is held. Along the same lines, this commenter recommended expressly permitting a bank employee to accept checks at a financial literacy program event, subject to certain safeguards to prevent operation of the program as a branch—such as having a school official accept the checks and deposit them in a portable lockbox which the branch employee could then be responsible for bringing to the branch. Further, this commenter recommended removing language from the proposal indicating that the OCC would consider the facts and circumstances on a case-by-case basis in determining whether other financial literacy programs outside of the safe harbor constitute a branch. Additionally, this commenter suggested not referring to the messenger service safe harbor as a “test” in order to avoid the implication of additional compliance and audit requirements for the operation of financial literacy programs.
The OCC disagrees with this commenter's recommendations for the reasons set forth below and thus adopts § 7.1021 as proposed. First, the OCC believes that cross referencing the messenger service regulation at § 7.1012 is the best approach for § 7.1021 because the safe harbor for a messenger service may evolve through regulatory changes, statutory changes, new judicial decisions, or new OCC interpretations. By using a cross reference, the OCC automatically incorporates into the financial literacy regulation all evolutions of the messenger service precedent.
Second, the OCC disagrees with the commenter's suggestion that a bank employee may manage the financial literacy program or engage in other financial education activities without the facility being considered a branch so long as the school or organization retains control over the program and over the premises or facilities at which the program is held. Whether a third party other than a national bank owns or rents the facility involved is only one factor in the safe harbor described in § 7.1012(c)(2) for a messenger service to be clearly “established” by a third-party. The OCC does not believe it is appropriate to disregard all the other factors necessary to qualify for the safe harbor when considering school literacy programs as analysis of other factors in § 7.1012 may be determinative under some circumstances. However, it will continue to evaluate programs that do not fulfill all the factors of the safe harbor on an individual basis.
Third, the OCC disagrees with the commenter's recommendation of setting forth a provision that expressly permits a bank employee to accept checks at a financial literacy program event, subject to certain safeguards to prevent operation of the program as a branch. A person transporting items related to branching functions to the bank would be a messenger service, and messenger services are considered branches unless they are established by a third-party.
Fourth, the OCC is retaining the language regarding the agency's commitment on a case-by-case basis to evaluate situations outside of the safe harbor. This language is meant to clarify that premises and facilities in such situations will not automatically be found to be branches. This language is not meant to impose an obligation on banks to always submit a request to the OCC for a determination before implementing a financial literacy program outside of the scope of the safe harbor. Banks may forgo asking for an OCC interpretation if they are comfortable with how their program would fit into the OCC's expectations and precedent.
Finally, the OCC clarifies that, by use of the term “test,” it does not mean to impose any extra audit or other compliance requirements on these programs or to suggest that these programs must be subjected to measurement, ratings, or other performance measures. The OCC has routinely referred to safe harbors as “tests” in interpretive letters, guidance, and regulations without the implication of additional obligations.
For the reasons explained above, the OCC is adopting § 7.1021 as proposed.
The OCC proposed a technical change to §§ 7.1022 and 7.1023. Section 7.1022 prohibits a national bank from acquiring or selling industrial or commercial metal for purposes of dealing or investing. Section 7.1022 excludes industrial and commercial metals from the national bank authority to “buy and sell exchange, coin, and bullion.” Section 7.1023 similarly prohibits a Federal savings association from dealing or investing in industrial or commercial metal. Both sections require a national bank and a Federal savings association to dispose of any industrial or commercial metal held as a result of dealing or investing in that metal as soon as practicable, but not later than one year from the effective date of the
The OCC proposed a new § 7.1025 that codifies the authority of national banks and Federal savings associations to engage in tax equity finance (TEF) transactions under 12 U.S.C. 24(Seventh) and 1464 lending authority, respectively.
The OCC received eight comments on this section. One commenter stated that the proposed rule would increase administrative compliance burden and suggested the OCC should not codify a rule that addresses the underwriting process but rather should generally require the institutions it regulates to establish safety and soundness standards consistent with other extensions of credit. The OCC disagrees with this comment. Proposed § 7.1025 distills current precedent and standards. Rather than attempt to prescribe the underwriting process for national banks and Federal savings associations, the proposal required national banks and Federal savings associations to use underwriting and credit approval criteria and standards that are substantially equivalent to the underwriting and credit approval criteria and standards used for traditional loans. This is consistent with the notion that a permissible TEF transaction is the functional equivalent of a loan.
One commenter stated that there is an existing rental affordability crisis and therefore the OCC should not impose burdensome requirements and restrictions on tax equity finance transactions that might reduce low income housing tax credit investment. The OCC believes the clarity and safety and soundness benefits of § 7.1025 outweigh any potential burden. Moreover, § 7.1025 provides an additional authority for national banks and Federal savings associations to make TEF transactions. It does not limit or impede a national bank or Federal savings association from participating in transactions under other existing authorities. Therefore, if a national bank or Federal savings association wishes to engage in a low income housing tax credit investment under existing public welfare investment or community development authority, it could do so as long as it meets the requirements of those existing authorities.
Relatedly, the OCC received eight comments requesting that the OCC confirm that TEF authority is separate and apart from the public welfare investment authority and community development investment authority. As indicated above, the authority granted under § 7.1025 operates in addition to the existing public welfare investment authority and community development investment authority under 12 U.S.C. 24(Eleventh), 12 U.S.C. 1464(c)(3)(A), 12 CFR part 24, 12 CFR 160.30, and 12 CFR 160.36, and will not be a replacement authority. To the extent an investment would qualify under multiple authorities, the national bank or Federal savings association may determine which authority it is using to engage in the transaction. To eliminate any confusion on this point, the final rule adds a sentence to § 7.1025(a) indicating that the authority under § 7.1025 is pursuant to 12 U.S.C. 24(Seventh) and 1464 lending authority and is separate from, and does not limit, other investment authorities available to national banks and Federal savings associations.
One commenter supported the intent of the proposed rule but suggested the OCC needs to familiarize itself with, and contemplate the impact of, certain Internal Revenue Service (IRS) rules and standards relating to TEF transactions and structures, including sections 49 and 50 of the Internal Revenue Code, Revenue Procedure 2007-65 and Revenue Procedure 2014-12, and whether the proposed rule would make renewable energy TEF transactions non-compliant with these laws and IRS Procedures. The OCC is familiar with sections 49 and 50 of the Internal Revenue Code, Revenue Procedures 2007-65 and 2014-12, as well as other IRS rules and guidance on tax credits, and believes the TEF provision would not prevent a national bank or Federal savings association from complying with IRS rules, procedures, and standards. Therefore, OCC is finalizing § 7.1025(a) as proposed.
The OCC proposed to define a “tax equity finance transaction” in § 7.1025(b)(1) as a transaction in which a national bank or Federal savings association provides equity financing to fund a project that generates tax credits and other tax benefits and the use of an equity-based structure allows the transfer of those credits to the bank or savings association. The OCC received two comments on this provision. One commenter suggested that the OCC should review current draft legislation for impacts on the terms “generation” and “renewable” if energy storage is added to section 48 of the Internal Revenue Code. Proposed § 7.1025(b)(1) defines a tax equity finance transaction in part to mean a transaction that generates tax credits and other benefits. In response, the OCC notes that, because the definition does not limit tax equity finance transactions to only those that relate to energy generation, if section 48 were amended to add energy storage, national banks and Federal savings associations would be able to engage in transactions involving energy storage that met the requirements of § 7.1025.
Another commenter noted that a TEF structure may involve other tax benefits in addition to tax credits, such as deductions and other items that fall under the category of tax equity. The OCC acknowledges that tax benefits may take many forms and is revising proposed § 7.1025(b)(1), redesignated as § 7.1025(b)(3) in the final rule, to change “generates tax credits and other tax benefits” to “generates tax credits or other tax benefits.”
The OCC also requested comment on whether national banks and Federal savings associations are currently participating in TEF transactions through fund-based structures and, if not, whether national banks and Federal savings associations would want to participate in TEF transactions through fund-based structures. A fund-based structure is a structure in which a national bank or Federal savings
The OCC is adopting the proposed definition of “tax equity finance transaction” with these two changes discussed above.
The proposed rule included an aggregate total dollar limitation on TEF transactions that a national bank or Federal savings association could engage in based on a percentage of a national bank or Federal savings association's capital and surplus. The OCC proposed to define “capital and surplus” in § 7.1025(b)(2) by cross-referencing to its definition in the OCC's lending limit rule at 12 CFR part 32.
Under proposed § 7.1025(c), a TEF transaction would qualify as the functional equivalent of a loan if it meets seven requirements that derive from OCC interpretations. First, paragraph (c)(1) provides that the TEF transaction structure must be necessary for making the tax credits and other tax benefits available to the national bank or Federal savings association. One commenter suggested that the OCC should clarify that the tax equity finance transaction structure may be necessary for making the tax credits or other tax benefits available. The OCC acknowledges that tax benefits may take many forms and is revising proposed § 7.1025(c)(1) to change “making the tax credits and other tax benefits available” to “making the tax credits or other tax benefits available.” With this revision, the OCC is finalizing § 7.1025(c)(1).
Second, paragraph (c)(2) provides that the TEF transaction must be of limited tenure and not indefinite. Under this requirement, a national bank or Federal savings association would need to be able to achieve its targeted return in a reasonable time, and the TEF transaction would need to have a defined termination point. A national bank or Federal savings association could satisfy this requirement if the TEF transaction will terminate within a reasonable time of the transaction's initiation or if a project sponsor has an option to purchase a national bank's or Federal savings association's interest at or near fair market value. The national bank or Federal savings association cannot control whether it retains the interest indefinitely. The proposed rule permitted a national bank or Federal savings association to retain a limited investment interest if that interest is required by law to obtain continuing tax benefits from the TEF transaction. The OCC received five comments on this requirement.
Three commenters requested clarification that the 15-year holding period for LIHTC investments would not violate the limited tenure requirement. The OCC confirms that under § 7.1025(c)(2), a national bank or Federal savings association may hold an investment in order to obtain and retain tax benefits as required by law, including holding the investment to comply with the 15-year recapture period for LIHTC investments.
Three commenters suggested that a requirement that the sponsor have a call option would have adverse tax consequences in certain TEF transactions and suggested removing that requirement. However, proposed § 7.1025(c)(2) does not require that a sponsor must have a call option in order to comply with § 7.1025; it requires only that the transaction is of limited tenure and is not indefinite, such as a limited investment interest requirement by law to obtain continuing tax benefits. The OCC used a call option as an example in the preamble to the proposed rule as one way a national bank or Federal savings association could comply with the limited tenure requirement. The OCC did not intend this to be an exhaustive list.
One commenter suggested the OCC clarify in the final rule that TEF investments may be retained for the duration needed to obtain the expected rate of return consistent with market practices for such an investment. The OCC agrees with the commenter and is revising § 7.1025(c)(2) to require that the transaction is of limited time and is not indefinite, including retaining a limited investment interest that is (1) required by law to obtain continuing tax benefits or (2) needed to obtain the expected rate of return.
One commenter suggested proposed § 7.1025 could result in the sale of an investment at a price lower than the bank could otherwise obtain. Although a national bank or Federal savings association may exit a TEF transaction through a sale to a third party, the OCC does not expect that sale to be immediate if it would result in fire sale pricing. One commenter suggested the OCC should clarify that it is permissible to have a purchase option price that includes an amount necessary for a national bank or Federal savings association to achieve its expected rate of return. The OCC notes that an option to purchase may include an amount necessary for a national bank or Federal savings association to achieve its expected rate of return, and the OCC believes this would be consistent with the requirements and conditions of § 7.1025.
One commenter requested the OCC explicitly permit other structures that are required by law to obtain tax benefits. This commenter cited to Internal Revenue Service Revenue Procedure 2014-12, which the commenter stated provides a safe harbor for an exit structure in which the investor “puts” its interest back to the
Third, paragraph (c)(3) provides that the tax benefits and other payments received by the national bank or Federal savings association from the TEF transaction must repay the investment and provide an implied rate of return. As a result of this proposed requirement, the national bank's or Federal savings association's underwriting could not place undue reliance on the value of any residual stake in the project and the proceeds of disposition following the expiration of the tax credits' compliance period. The OCC received two comments on proposed § 7.1025(c)(3). One commenter suggested that the OCC should clarify in the final rule that the calculation of the rate of return is the expected rate of return at the time the investment is initially made and revise § 7.1025(c)(3) to refer to the expected rate of return at original underwriting. The OCC agrees with the commenter and is revising § 7.1025(c)(3) to refer to the expected rate of return at the time of underwriting.
One commenter suggested that the OCC consider
One commenter suggested that in matters concerning any residual stake in the project, the IRS true lease authority must be understood, and the OCC should not force or cause a renewable energy project sponsor to violate IRS requirements. Proposed § 7.1025(c)(3) does not contain residual stake language. Rather, as the preamble to the proposed rule explained, a national bank's or Federal savings association's underwriting should not place undue reliance on the value of any residual stake in the project. The OCC does not believe that this language in any way would cause or force a project sponsor to violate IRS requirements. With the revision discussed above, the OCC is finalizing § 7.1025(c)(3).
Fourth, paragraph (c)(4) provides that the national bank or Federal savings association must not rely on appreciation of value in the project or property rights underlying the project for repayment. As discussed in OCC Interpretive Letter No. 1139 (November 13, 2013), wind turbines, solar panels, and other ancillary equipment are not considered real property under 12 U.S.C. 29, and acquisition of interests in real estate incidental to the provision of financing is not inconsistent with 12 U.S.C. 29. The OCC received no comments on this requirement and is finalizing § 7.1025(c)(4) as proposed.
Fifth, paragraph (c)(5) provides that the national bank or Federal savings association must use underwriting and credit approval criteria and standards that are substantially equivalent to the underwriting and credit approval criteria and standards used for a traditional commercial loan. To comply with this requirement, the documents governing the TEF transaction should contain terms and conditions equivalent to those found in documents governing typical lending relationships and transactions. The OCC received no comments on this requirement and is finalizing § 7.1025(c)(5) as proposed.
Sixth, paragraph (c)(6) provides that the national bank or Federal savings association must be a passive investor in the transaction and must not be able to direct the affairs of the project company. This means that the national bank or Federal savings association is not able to direct day-to-day operations of the project. However, the OCC does not consider temporary management activities in the context of foreclosure or similar proceedings as violating this requirement. One commenter suggested that the OCC should clarify in the final rule that customary protective rights and covenants are permitted and do not violate the “passive investor” requirement of § 7.1025(c)(6). The OCC agrees that customary protective rights and covenants are permitted and do not violate § 7.1025(c)(6). However, the OCC does not believe changing the proposed rule text is necessary. TEF transactions are the functional equivalent of loans and many of the same terms, conditions, and covenants found in lending and lease financing transactions are permissible for TEF transactions. In some cases, these terms, conditions, and covenants may be necessary to comply with the requirement in § 7.1025(c)(5) that underwriting and credit approval criteria and standards must be substantially the same as those used for traditional commercial loans. The OCC is finalizing § 7.1025(c)(6) as proposed.
Seventh, paragraph (c)(7) provides that the national bank or Federal savings association must appropriately account for the transaction initially and on an ongoing basis and document contemporaneously its accounting assessment and conclusion. Although TEF transactions can be the functional equivalent of loans pursuant to a national bank's or Federal savings association's lending authority, the accounting treatment of tax equity investments may differ from the treatment of a loan. Two commenters noted that investments in housing credit transactions are structured as equity investments and requested that those investments be treated as equity investments and not loans for Federal income purposes. The OCC acknowledges that although a transaction may be the functional equivalent of a loan for permissibility purposes, it may be treated as an equity investment for accounting or tax purposes. Section 7.1025(c) provides that a national bank or Federal savings association must appropriately account for the transaction initially and on an ongoing basis and document its accounting assessment and conclusion. The OCC is finalizing § 7.1025(c)(7) as proposed.
Proposed paragraph (d) provides that a national bank or Federal savings
One commenter suggested the OCC should confirm that contracts for the sale of energy can be entered into with affiliates of the national bank or Federal savings association participating in the TEF transaction, so long as such contracts are consistent with the TEF requirements and do not create negative tax consequences. The OCC confirms that a national bank or Federal savings association may enter into energy sale contracts with affiliates as long as the requirements of § 7.1025 are met and any transaction with an affiliate complies with 12 U.S.C. 371c, 12 U.S.C. 371c-1, 12 CFR part 223, and any other applicable laws and regulations regarding affiliate transactions. Similarly, one commenter requested that the OCC explicitly confirm that the project company's hedging counterparty does not need to be an unaffiliated third party and may be the national bank or Federal savings association itself or an affiliate of the national bank or Federal savings association. The OCC confirms that a project company's hedging counterparty need not be an unaffiliated third party and may be an affiliate of the national bank or Federal savings association so long as the sale meets the requirements of § 7.1025 and any applicable affiliate transactions laws and regulations, including 12 U.S.C. 371c and 371c-1, and 12 CFR part 223, and is conducted in a safe and sound manner (
One commenter requested the OCC clarify that the right of a national bank or Federal savings association to prohibit certain sales does not constitute inappropriate control of the right to sell power. The OCC confirms a national bank or Federal savings association may prohibit certain sales or institute certain credit or other requirements for third party purchasers of the energy if done pursuant to prudent underwriting to ensure the project's success and not in an attempt to control, influence, or manipulate the energy market. One commenter requested the OCC recognize that a TEF project may sell a portion of the electricity that it generates into the merchant market, and not pursuant to a power purchase agreement or a hedge contract, and permit a national bank or Federal savings association to invest in such projects as long as it has reasonably determined that any merchant sales by the project company contribute favorably to the overall financial health of the project company. The OCC confirms a TEF project may sell energy into a merchant market as long as the national bank or Federal savings association is not controlling the sale of the energy and the TEF transaction otherwise complies with the requirements and conditions of § 7.1025.
One commenter suggested that certain terms, such as “long term,” “creditworthy,” and “sell” make the provision unworkable given market realities. The OCC recognizes that there may be changes in market practice and standards in the evolving space of TEF transactions, and renewable energy transactions in particular. For that reason, § 7.1025(d)(1) does not prescribe how a national bank or Federal savings association must comply with the requirement not to control energy from the sale of the project. Rather, § 7.1025(d)(1) simply requires that a national bank or Federal savings association must not control the sale of energy from the project. In the preamble to the proposed rule, the OCC provided a couple of examples of how a national bank or Federal savings association may satisfy the requirement, but these examples are illustrative only. The terms “creditworthy” and “sell” do not appear in the proposed rule text and instead are used in the proposed rule's preamble to describe examples of how a national bank or Federal savings association may satisfy the requirement in § 7.1025(d)(1). The OCC is finalizing § 7.1025(d)(1) as proposed.
Second, proposed paragraph (d)(2) provides that the national bank or Federal savings association must limit the total dollar amount of TEF transactions to no more than five percent of its capital and surplus unless the OCC determines, by written approval of a written request by the national bank or Federal savings association to exceed the five percent limit, that a higher aggregate limit will not pose an unreasonable risk to the national bank or Federal savings association and that the TEF transactions in the national bank's or Federal savings association's portfolio will not be conducted in an unsafe or unsound manner. In no case may a bank's or Federal savings association's total dollar amount of TEF transactions exceed fifteen percent of its capital and surplus. As provided for public welfare investments under 12 U.S.C. 24(Eleventh) and 12 CFR part 24, a national bank is generally subject to a five percent aggregate investment limit and this limit encourages a national bank to maintain appropriate risk diversification.
Third, proposed paragraph (d)(3) provides that the national bank or Federal savings association must have provided written notification to the OCC prior to engaging in each TEF transaction that includes its evaluation of the risks posed by the transaction. The OCC received four comments on this requirement. The commenters suggested that the OCC should not require national banks and Federal savings associations to provide prior written notification and instead should be allowed to provide after-the-fact notification or follow the post-notification procedures available under the public welfare investment authority.
Fourth, proposed paragraph (d)(4) provides that the national bank or Federal savings association must be able to identify, measure, monitor, and control the associated risks of its tax equity finance transaction activities individually and as a whole on an ongoing basis to ensure that it conducts such activities in a safe and sound manner. The OCC received one comment related to this provision regarding the use of the word “control.” The commenter suggested that the final rule should eliminate the word “control” or otherwise acknowledge that it is not meant to suggest that national banks and Federal savings associations should have more than the limited control over TEF transaction activities that is consistent with the passive nature of these investments. The OCC clarifies that use of the word “control” in relation to risk management of TEF activities is consistent with the passive nature of these transactions and a national bank or Federal savings association satisfying this condition would not be in conflict with the passivity requirement of § 7.1025(c)(6). Similar to how a national bank or Federal savings association identifies, measures, monitors, and controls risks related to loans and other extensions of credit but does not exercise control over the business of the borrower, a national bank or Federal savings association would identify, measure, monitor and control risks related to the transaction but would not be exercising control over the operations of the project or projects underlying the TEF transaction. The OCC is finalizing § 7.1025(d)(4) as proposed.
The OCC requested comment on whether national banks or Federal savings associations routinely obtain legal opinions regarding the availability of tax credits in connection with these types of finance transactions. One commenter suggested that a national bank or Federal savings association should not be required to obtain a legal opinion on the tax benefits of a TEF transaction, but rather the OCC should require a good faith, reasoned basis for making that determination. The commenter suggested that it is not market practice to obtain a legal opinion that says a TEF structure is “necessary” in order for the tax benefits to be available. Instead, the commenter suggested the OCC should recognize that national banks and Federal savings associations employ a range of approaches to evaluating the tax benefits of TEF transactions.
The OCC agrees with the commenter that there should be flexibility related to the legal analysis underlying the tax availability determination. However, the OCC believes that the final rule should require the national bank or Federal savings association to have a reasonable basis for determining the availability of tax credits in connection with TEF transactions. Therefore, the OCC is including in the final rule a more flexible provision. Specifically, new § 7.1025(d)(5) requires a national bank or Federal savings association to obtain a legal opinion, or to have other good faith, reasoned bases for making the determination that tax credits or other tax benefits are available before engaging in a TEF transaction. A legal opinion includes either an outside counsel opinion or an opinion provided by a national bank or Federal savings association's internal or in-house counsel. Although a legal opinion is not the only means to fulfill this requirement, a good faith, reasoned basis requires more than simply accepting a statement from a person or entity promoting an investment. A national bank or Federal savings association may not rely solely on the assurances of a person or entity promoting a TEF transaction that tax credits will be available.
Proposed paragraph (e) provides that the TEF transaction must be subject to the substantive legal requirements of a loan, including the lending limits prescribed by 12 U.S.C. 84, as implemented by 12 CFR part 32, and, if the active investor or project sponsor of the transaction is an affiliate of the national bank or Federal savings association, the restrictions on
The OCC specifically requested comment on whether the final rule should prohibit a national bank or Federal savings association from entering into TEF transactions for projects involving residential installation TEF transactions not involving utility-scale standalone power-generation facilities. One commenter suggested that the final rule should not prohibit these transactions so as not to arbitrarily reserve it for only one segment of the market. The OCC concurs with this comment and will not limit TEF transactions to only those involving standalone utility-scale power generation facilities in the final rule. A national bank or Federal savings association may participate in a TEF transaction if it meets the requirements and conditions of § 7.1025 and the OCC has not raised safety and soundness concerns related to the particular transaction.
The OCC also requested comment on whether the final rule should permit national banks or Federal savings associations to invest in TEF transactions involving detached single-family residences, multi-family residences, or non-utility commercial buildings. Five commenters suggested that the OCC should permit national banks and Federal savings associations from entering into these transactions, with one commenter suggesting the OCC should affirm longstanding OCC precedent that the legal permissibility of a TEF transaction is agnostic as to end-user segment and underlying asset. The OCC confirms that it will not prohibit a national bank or Federal savings association from entering into TEF projects involving detached single-family residences, multi-family residences, or non-utility-scale commercial buildings. As is the case with loans and leases, the legal permissibility of a TEF transaction is not dependent on the end-user segment and underlying asset. Therefore, the OCC is finalizing § 7.1025 without a prohibition on residential TEF transactions.
One commenter also requested that the OCC confirm there is no prohibition on, and that tax credit availability would not be affected by, national banks funding a portion of their TEF investment during late stage construction if required to qualify for the tax benefits and adequate protections are in place. The OCC confirms that there is no prohibition on national banks or Federal savings associations funding a portion of their TEF investment during late stage construction if required to qualify for the tax benefits and adequate protections are in place. However, the OCC cannot opine on whether late stage investment would affect the availability of the tax credit and such inquiries should be directed to the IRS.
Further, the OCC requested comment on whether national banks and Federal savings associations should have other contractual remedies available before entering into a TEF transaction. Two commenters suggested that the final rule should not prescribe any particular contractual remedies for TEF transactions, including guarantees or indemnities, but rather, should allow national banks and Federal savings associations the flexibility to choose the most appropriate remedies for a given transaction. Another commenter suggested that requiring certain contractual provisions is not necessary, noting that it is common for national banks and Federal savings association to require such remedies as a business practice when making other investments even though the OCC does not require them and that such remedies are best left up to national banks and Federal savings associations. The OCC agrees with these commenters that national banks and Federal savings associations should be afforded the flexibility to choose contractual remedies as appropriate. Therefore, the OCC is finalizing § 7.1025 without requiring specific contractual remedies.
Second, because different payment systems may use different terminology, the OCC defined “member” to include a national bank or Federal savings association designated as a “member,” a “participant,” or other similar role by a payment system, including by a payment system that requires the
Third, the OCC defined “open-ended liability” as liability for operational losses that is not capped under the rules of the payment system and includes indemnifications provided to third parties as a condition of membership in the payment system. For example, as a condition of membership in particular payment systems, national banks and Federal savings associations may provide open-ended indemnifications to Federal Reserve Banks that act as service providers for the payment systems.
The OCC received one comment on this definition expressing concern that it did not clearly include a situation in which the indemnification giving rise to an open-ended liability is imposed directly upon the participant by the Federal Reserve Bank, which is acting as a service provider to payment system participants. The OCC agrees with this commenter that the participant would be exposed to open-ended liability in that case and is modifying the definition of “open-ended liability” to reflect the situation described by the commenter. As a result, open-ended liability in the final rule means liability for operational losses that is not capped under the rules of the payment system, and includes indemnifications of third parties provided as a condition of membership in the payment system.
Fourth, although memberships in payment systems expose national banks and Federal savings associations to a variety of risks, OCC legal precedent only has addressed whether a national bank may assume open-ended liability for operational losses at the payment system. The OCC defined “operational loss” as a charge resulting from sources other than defaults by other members of the payment system. The OCC pointed to examples listed in OCC Interpretive Letter 1140
Finally, the OCC defined “payment system” in § 7.1026 to mean a “financial market utility” as defined in 12 U.S.C. 5462(6), wherever operating, and that includes both retail and wholesale payment systems. Section 5462(6) provides that “a financial market utility” means “any person that manages or operates a multilateral system for the purpose of transferring, clearing, or settling payments, securities, or other financial transactions among financial institutions or between financial institutions and the person” with certain exclusions.
One comment letter supported this process. A second commenter, however, argued that the proposal may make it more difficult for a national bank or Federal savings association to join a new payment system because it would impose an additional regulatory burden not required for non-OCC regulated institutions. The OCC does not agree with this commenter. As explained above and in the preamble to the proposed rule, the notice requirement for payment system memberships codifies existing requirements from a series of interpretive letters governing national bank payment system memberships. Since the publication of these interpretive letters, OCC-regulated institutions have continued to join new payment systems. The OCC believes that this clarity facilitates payment systems memberships by OCC-regulated institutions rather than hindering them and therefore the OCC adopts paragraph (c) as proposed.
First, several commenters responded favorably to the OCC's question about whether the characteristics from Interpretive Letter 1140 should be included in the final rule. In Interpretive Letter 1140, the OCC identified key components of a payment system that appropriately mitigates risk and indicated it would expect a national bank to consider these characteristics when analyzing the payment system. The OCC also explained in Interpretive Letter 1140 the characteristics of an effective risk management program at a national bank. These commenters thought doing so would provide greater certainty about the OCC's expectations. Although not an exhaustive list, the OCC agrees that listing the risk management program criteria from Interpretive Letter 1140 in the regulatory text would assist banks and savings associations as they conduct reviews of payment system memberships. The OCC is including in the final rule a new paragraph (f) that recites the criteria it previously outlined in Interpretive Letter 1140.
One commenter also asked the OCC to provide additional guidance about which of these criteria are most important and the circumstances under which each component should be considered in the analysis of a bank or savings association. The OCC does not believe it would be appropriate to identify further individual scenarios in which specific factors would apply because national banks and Federal savings associations are best positioned to evaluate the applicability and
Finally, a commenter asked that where the open-ended liability derives from a Federal Reserve Bank acting as a service provider to the payment system participant, the OCC clarify that due diligence and risk management activities should be related to the entity providing the service for which the indemnity or open-ended liability is imposed. The OCC agrees that national banks and Federal savings associations should evaluate the risks that derive from all aspects of the payment system membership, including the risks from service providers to whom the payment system member must indemnify or provide open-ended liability as a condition of membership. However, the OCC expects the due diligence and risk management analysis to apply whether the payment system membership introduces open-ended liability or not. The OCC believes that the language in paragraph (e) of the proposal is sufficiently clear and is adopting this section as proposed.
The OCC noted in the preamble to the proposed rule that a national bank's or Federal savings association's liability will vary from payment system to payment system. The rules of some payment systems may expose members to open-ended liability for operational losses but, in reality, the national bank's or Federal savings association's liability may be capped in some other way. For example, a jurisdiction could have a law that prohibits open-ended liability or restricts the amount of liability to the assets of the entity located in that jurisdiction. If that law applies to the payment system, it could effectively cap a member's operational liability. In other situations, a member may negotiate a separate agreement with a payment system that allows the member to limit its potential liability and, as a result, the risks of membership in that payment system. In recognition of these situations, the proposed rule permitted a national bank or Federal savings association to consider its open-ended liability to a particular payment system to be limited for purposes of the review required by proposed § 7.1026(e)(1) and (2) if the bank or savings association obtains an independent legal opinion prior to joining the payment system. That legal opinion must describe how the payment system allocates liability for operational losses and conclude the potential liability for the national bank or Federal savings association is limited to specific and appropriate limits that do not exceed the legal lending limit specified by 12 CFR part 32 or a lower limit established for the national bank or Federal savings association by the OCC. This legal opinion would enable the OCC to verify that the liability of the national bank or Federal savings association is limited even though the rules of the payment system do not provide any limits.
Two commenters objected to the independent legal opinion requirement. These commenters argued that the OCC should instead require national banks and Federal savings associations to follow a lower standard and provide just a reasonable basis for concluding that its liability is limited. These commenters also suggested that an opinion from in-house counsel should suffice. The OCC does not agree that lowering the standard would be appropriate. However, the OCC believes it is important to make clear that the legal opinion is
One commenter asked for clarification that, once a bank or savings association has joined a payment system and obtained a legal opinion, it does not need to undertake that process again unless there is a material change to the liability or indemnification provisions applicable to the bank or savings association. The OCC intended this result and, thus, is modifying the final rule to clarify that, so long as there are no material changes to the liability or indemnification requirements applicable to the bank or savings association since the issuance of the written legal opinion, the bank or savings association may consider its open-ended liability to be limited.
Section 7.4003 provides that a national bank can establish and operate a remote service unit (RSU) pursuant to 12 U.S.C. 24(Seventh). This section also states that an RSU does not constitute a branch under 12 U.S.C. 36(j) and is not subject to State geographic or operational restrictions or licensing laws. Section 7.4003 defines an RSU as an automated facility, operated by a customer of a bank, that conducts banking functions, such as receiving deposits, paying withdrawals, or lending money. This section provides examples of an RSU, specifically listing an automated teller machine (ATM), automated loan machine, automated device for receiving deposits, personal computer, telephone, and other similar electronic devices. Finally, this section provides that an RSU may be equipped with a telephone or tele-video device that allows contact with bank personnel.
The OCC proposed to amend § 7.4003 to expand the definition of an RSU to include either an automated or unstaffed facility and to add drop boxes to the list of RSU examples. Although the OCC has historically treated drop boxes as branches, the OCC believes that interpreting both the terms ATM and RSU to require automation leads to incongruous results where a non-automated facility such as a drop box is considered a branch but an automated facility such as an ATM is not, despite a drop box functioning less like a full branch than an ATM. The OCC also proposed to move § 7.4003 to subpart A of part 7 as new § 7.1027 so that it would be in the same subpart as other branching provisions of part 7.
The OCC received one comment on the proposed amendments to § 7.4003. The commenter opposes the changes to § 7.4003 and states that excluding drop boxes from the definition of branch by including them in the definition of RSU is inconsistent with Supreme Court precedent. The commenter states that the change is inconsistent with OCC precedent and the OCC does not have the authority to include drop boxes and other unstaffed facilities within the RSU/ATM exclusion. The commenter also states that when Congress amended 12 U.S.C. 36(j) to exclude ATMs and RSUs from the definition of branch, it chose to only exclude automated facilities and purposefully chose not to exclude drop boxes or other unstaffed facilities that lack automation. Finally, the commenter states that regardless of where the RSU regulations are placed, to the extent that the OCC maintains that State operational and licensing restrictions are preempted with respect to non-branch offices, then, in expanding the scope of permissible non-branch office activities, the OCC is making a “preemption determination” under the National Bank Act that must comply with the procedural and substantive requirements applicable to such determinations.
These comments misunderstand the interaction between judicial precedent and the insertion of the term “remote service unit” into 12 U.S.C. 36(j) and ignore the plain language of 12 U.S.C. 36(j). The Supreme Court decision in
Interpreting 12 U.S.C. 36(j) in a way that defines ATMs and RSUs in a distinct manner is a better reading of the plain language of 12 U.S.C. 36(j) and leads to the logical conclusion that non-automated, unstaffed facilities such as drop boxes should be included in the definition of RSU. Specifically, interpreting “automated teller machine” and “remote service unit” to be synonymous (
The OCC also disagrees with the commenter's statement that the proposed amendments to § 7.4003 constitute a “preemption determination” under the National Bank Act. Case law is clear that it is Federal law, not State law, that determines what is considered a “branch” of a national bank for the purposes of 12 U.S.C. 36(j).
Section 7.4004 provides that a national bank or its operating subsidiary may engage in deposit production activities at a site other than the main office or a branch of the bank, and further provides that a deposit production office (DPO) may solicit deposits, provide information about deposit products, and assist persons in completing application forms and related documents to open a deposit account. Section 7.4004 specifically states that a DPO is not a branch so long as the site does not receive deposits, pay withdrawals, or make loans. It further states that all deposit and withdrawal transactions of a bank customer using a DPO must be performed by the customer, either in person at the main office or a branch office of the bank or by mail, electronic transfer, or a similar method of transfer. Finally, this section states that a national bank may use the services of, and compensate, persons not employed by the bank in its deposit production activities. As with § 7.4003, the OCC proposed to move § 7.4004 to subpart A of part 7 as new § 7.1028 to place it in the same subpart as other interpretations regarding branching and non-branching functions. This change improves the organization of part 7. The OCC proposed no other changes to this section except for a non-substantive change to its wording. The OCC received no comments on new § 7.1028 and adopts it as proposed.
Section 7.4005 provides that a location at which a national bank operates a loan production office (LPO), a DPO, and an RSU is not a “branch” within the meaning of 12 U.S.C. 36(j) by virtue of that combination of operations because none of these locations individually constitutes a branch. The OCC proposed to add language regarding the extent of the permissible interaction between bank personnel and the RSU at a facility that combines an LPO or a deposit production office with an RSU. Specifically, the OCC proposed to add language that provides that an RSU at a combined location must be primarily operated by the customer with at most delimited assistance from bank
The proposal included a new § 7.1030 addressing derivatives activities permissible for national banks.
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The OCC received one comment on this proposed definition. The commenter said that the final rule should clarify that “customer-driven” derivatives activities continue to include the types of permissible derivatives transactions described in Interpretive Letter 1018. The commenter also said the final rule should make clear that, while speculation cannot be the purpose for which the national bank enters into the transaction, no such limitation is imposed as to the purpose for which the customer enters into the transaction and that the OCC should confirm that an otherwise bank-permissible derivative transaction entered into by a national bank as a financial intermediary would be viewed as “customer-driven,” so long as the national bank and its customer have bilaterally negotiated and agreed to the terms of the transaction, regardless of the execution mechanism selected by the bank and its customer. Finally, the commenter said that the limitation in the proposed definition specifying that a customer-driven transaction does not include “a transaction the principal purpose of which is to deliver to a national bank assets that the national bank could not invest in directly” does not prohibit physically settled derivatives.
The OCC intended the proposed definition to reflect the term “customer-driven” as it has been used in prior OCC interpretations, and the OCC does not believe any changes to the definition are necessary in response to the commenter. First, the definition does not prohibit customer-driven mirror trades through affiliates as described in Interpretive Letter 1018.
Second, the OCC does not believe any changes to the definition of “customer-driven” are necessary to confirm that a national bank, rather than its customer, may not have a speculative purpose. The proposed definition applies to a transaction entered into for a customer's “valid and independent business purpose.” The OCC recognizes that bank customers' valid and independent business purposes may include the customer obtaining directional exposure to an underlying, for example, as part of the customer's investment strategy.
Third, the OCC declines to adopt the commenter's proposed interpretation that a derivative transaction entered into by a national bank as a financial intermediary would be viewed as “customer-driven,” so long as the national bank and its customer have bilaterally negotiated and agreed to the terms of the transaction, regardless of the execution mechanism selected by the bank and its customer. A national bank may use both over-the-counter trades or trading platforms to execute
Finally, the OCC confirms that the language in the definition of “customer-driven” stating that the principal purpose of the transaction cannot be to deliver to a national bank assets that the national bank could not invest in directly does not preclude a bank from engaging in permissible physically-settled derivatives activities. Paragraphs (c)(4) and (5) of the final rule explicitly permit national banks to engage in customer-driven physically-settled derivatives financial intermediation transactions. For the foregoing reasons, the OCC is adopting the definition of “customer-driven” as proposed.
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The OCC received one comment on this proposed definition. First, this commenter said the OCC should adopt a broader concept of “appropriately hedged” rather than distinguishing between the definitions of “perfectly-matched” and “portfolio-hedged,” which the commenter viewed as unnecessary. This commenter argued that a bifurcated definitional approach could potentially create ambiguity as to whether there may be certain types of derivative transactions that, while appropriately hedged in some manner so as to offset the market risk of such transactions, may not fall within either technical definition, and thus would not be bank-permissible. This commenter further argued that, if the final rule maintains the distinction between “perfectly-matched” and “portfolio-hedged,” it should expressly confirm that any derivative transaction the risks of which are appropriately offset, whatever the technique, will fall under one of these two definitions. The commenter argued that, if a permissible hedging technique does not fall within the definition of “perfectly-matched,” then it should be assumed to fall within the definition of “portfolio-hedged.”
The OCC disagrees with the commenter's view that these definitions are unnecessary and that they create ambiguity. OCC interpretations have long used the terms “portfolio-hedged” and “perfectly-matched” in analyzing the permissibility of national bank derivatives activities, and the distinction between these two activities is well-established and useful to the OCC's supervisory activities. The commenter describes certain types of transactions that they believe may not fall into the definition of either perfectly-matched or portfolio-hedged, such as using two or more derivatives to hedge a single customer transaction.
The commenter also proposed that the OCC adopt a unified term such as “appropriately hedged” in lieu of “perfectly-matched” and “portfolio-hedged.” The commenter suggested that such a definition should permit “appropriate and effective” hedging but does not specifically propose how this term should be defined. The definitions “perfectly-matched” and “portfolio-hedged” encompass the methods of hedging a national bank's market risk arising from permissible derivatives financial intermediation activities—whether at the individual transaction level through back-to-back transactions or at the level of net risks within a derivatives portfolio. The OCC believes that incorporating and defining these longstanding hedging approaches reflecting the OCC's interpretive letters will not cast doubt on the permissibility of currently-recognized national bank derivatives activities; furthermore, it reflects the OCC's established expectation that, for derivatives activities relying on portfolio hedging for their permissibility, the national bank should have the appropriate hedging skills and sophistication to manage the net risks of its derivatives portfolio. Accordingly, the final rule retains the definitions for “perfectly-matched” and “portfolio-hedged” as proposed.
The commenter further said that, if the distinction between perfectly-matched and portfolio hedged is retained, the definition of “perfectly-matched” should be revised to treat corresponding transactions as perfectly-matched hedges so long as they substantially offset risk with respect to all material terms, so as to make clear that differences between the transaction with little or no effect on market risk (
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The OCC requested comment on whether the final rule should include a definition of the term “derivative” and whether a definition of this term would be necessary to appropriately scope the proposed provision and whether any definition would be workable in practice. The OCC received one comment that did not support defining “derivative” in the final rule. This commenter said that there is no need for the rule to define “derivative,” as there is generally a common understanding of the term, as reflected in existing precedent. The OCC agrees that there is a common understanding of the term “derivative” and notes that prior OCC interpretations generally have not defined the term. Accordingly, the final rule does not include a specific definition of the term “derivative.” The OCC intends to implement the rule based on the common industry and supervisory understanding regarding the type of transactions that constitute derivatives.
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The OCC received one comment addressing these sections. This commenter recommended revising § 7.1030(c) to allow national banks to physically hedge cash-settled derivatives, in addition to physically-settled derivatives. This commenter also said, to the extent the final rule continues to differentiate between cash- and physically-settled trades, the final rule should also confirm that, where a national bank has a physically-settled trade, the settlement of which it directs to an affiliate, the trade would be deemed to be cash-settled. The final rule incorporates one change in response to this comment to clarify the rule's application to physical hedging involving transactions other than commodity derivatives. OCC interpretive letters and guidance addressing physical hedges of commodity derivatives are typically limited to hedges of physically-settled transactions.
Additionally, this commenter recommended that the OCC clarify the application of the definitions “perfectly-matched” and “portfolio-hedged” to physically-hedged derivatives transactions. The commenter described that a derivative transaction that is physically hedged on an individual basis, such as a total return swap that is hedged via holding the underlying equity position would not necessarily be covered by the definition of “perfectly-matched” which is limited to two back-to-back derivatives transactions. As discussed above, the OCC believes it is preferable to retain the definition of “perfectly-matched” as used in prior OCC interpretations. However, to address the commenter's concern that the activities described in § 7.1030(c)(5) will not be perfectly matched under this definition, the final rule replaces the term “perfectly-matched” with “hedged on a transaction-by-transaction basis.” This change is consistent with prior interpretations that describe physical hedging on a transaction-by-transaction basis rather than on a “perfectly-matched” basis.
Relative to prior OCC interpretations, the final rule makes fewer distinctions based on the particular underlying or how the national bank hedges its derivatives financial intermediation activity. While prior interpretations typically analyzed both the underlying and the bank's method for hedging the customer-driven derivative (
The proposal requested comment on whether the rule should reflect any additional safety and soundness standards regarding the underlyings that are permissible for financial intermediation in derivatives and how national banks may hedge these activities. The proposal specifically requested comment on whether the regulation should include additional language relating to the liquidity of the market for permissible customer-driven derivatives activities. The OCC did not receive any comments on this request and is not adopting any additional safety and soundness standards or language related to the underlyings that are permissible for derivatives financial intermediation activities. As with any national bank permissible activity, general safety and soundness standards apply to these activities.
First, the OCC believes the rule appropriately identifies safety and soundness and legal permissibility considerations. For example, paragraph (c) identifies the legally permissible categories of derivatives activities, while paragraphs (d) and (e) establish the supervisory notice requirement and
The final rule does not require supervisory staff to consult with OCC leadership before raising “categorical safety and soundness concerns” about a derivatives activity as the commenter suggested. Nor does the final rule prescribe uniform regulatory standards specific to evaluating the safety and soundness of certain types of derivatives activities. Making assessments with respect to the safety and soundness of an activity is the key function of OCC supervisors. The OCC has established generally applicable safety and soundness standards by regulation
The OCC expects the notice requirement in the final rule to enhance prudential supervision of national bank derivatives activities by ensuring that banks evaluate the risks of the activities both at inception and on an ongoing basis. In addition, the OCC expects that incorporating notice as a regulatory requirement will ensure consistency in notice practices across OCC-supervised institutions. Like the proposal, the final rule requires the written notice to include information that is substantially similar to the information that is discussed in Interpretive Letter 1160. Specifically, the written notice must include a detailed description of the proposed activity, including the relevant underlying(s); the anticipated start date of activity; and a detailed description of the national bank's risk management system (policies, processes, personnel, and control systems) for identifying, measuring, monitoring, and controlling the risks of the activity.
The notice requirement does not impose a prior approval requirement. Rather, the notice is designed to make OCC supervisors aware of a national bank's derivatives activities so that such activities can be appropriately scoped into OCC's ongoing supervision and oversight of the bank's safety and soundness. In addition, having awareness of a bank's derivatives activities will enable the OCC to raise questions as to whether the derivatives activity can be conducted in a safe and sound manner, or whether the derivatives activity is within the scope of those legally authorized for a national bank, before the bank activities commence or at any time, as is the case with any other permissible bank activities.
Like the proposal, § 7.1030(d)(1) of the final rule requires a national bank to provide its EIC notice prior to engaging in any of the derivatives hedging or financial intermediation activities described in § 7.1030(c)(2) through (5) for the first time. This notice requirement applies, for example, if a bank has previously engaged in cash-settled derivatives with respect to a particular underlying as described in § 7.1030(c)(3) but seeks to begin physically settling transactions as described in § 7.1030(c)(4) or (5). Likewise, a national bank must provide notice prior to first engaging in derivatives hedging activities pursuant to § 7.1030(c)(2) or expanding the bank's derivatives hedging activities to include a new category of underlying. Also like the proposal, under § 7.1030(d)(2) of the final rule, the bank must submit written notice at least 30 days before the national bank commences the derivatives activity.
The OCC requested comment on whether it was sufficiently clear when a notice would be required and what would constitute a “new category of underlying.” The OCC specifically requested comments on whether the regulation text should list these categories and, if so, whether the regulation should specify that any new derivatives activities not falling within one of the specified categories also requires notice. The OCC received one comment in response to this request. This commenter said that the final rule should not define categories of “underlying” by regulation, but rather should take a substantially more principles-based approach to determining when prior notice is required that looks primarily to the risk management implications and challenges of any potential new derivatives activity. Specifically, this commenter said the final rule should make clear that prior notice is required only when a national bank commences a new activity or modifies an existing activity that would expose the bank to, and require the bank to manage and control, a material and substantially new type of market risk. The commenter also said that no notice should be required under the final rule where a national bank engages in permissible derivatives activity that is hedged either (1) using mirrored transactions that involve no market risk or (2) on a nearly perfectly-matched basis that involve only de minimis residual market risk. In contrast, this commenter argued, where a national bank is engaged in derivatives activities that are hedged on a portfolio basis pursuant to which the bank is actively managing an inventory of market risks, imposing a notice requirement is appropriate as it would facilitate supervisory review of a bank's risk management and internal controls in implementing that hedging strategy.
The OCC disagrees and finds that, even when a national bank believes it is not exposed to a materially new type of market risk, there is supervisory value in receiving notice of the new activities. The considerations identified by the commenter—facilitating supervisory review of a bank's risk management and internal controls in implementing its hedging strategy—are relevant whether the activity is hedged on a perfectly-matched or portfolio-hedged basis.
One commenter said that the final rule should make clear that national banks may continue to rely on guidance that they have previously received regarding the permissibility of derivatives activities and need not provide notice under proposed new § 7.1030 to continue to engage in activities that were commenced under the prior interpretive and supervisory framework before the final rule became effective. As described in the proposal, national banks that have provided notice to or received statements of no-objection from their EICs for particular derivatives activities consistent with the process in prior OCC interpretive letters would not be required to submit new notices for those activities.
Consistent with OCC interpretive letters and guidance concerning physical hedging with commodities in which a national bank could not invest directly,
The OCC received one comment addressing these requirements. First, this commenter said the final rule should require that any physical hedge be “at least as effective as,” not more effective than, a cash-settled hedge. Second, this commenter said, to better align the five percent limit with financial risk management practices, this limit should be calculated based on the type of market risk (
The OCC disagrees with the first two comments. The purpose of § 7.1030(e) of the proposal was to incorporate the OCC's existing interpretations and supervisory guidance into regulation. Under existing interpretations, a physical hedge should be more effective than a cash-settled hedge involving the same commodity in light of the additional risks associated with physical hedging.
Under existing OCC guidance, the five percent limit on physical hedging activities applies to a particular
In response to the commenter's third comment on the five percent limit, the OCC confirms that the limit is meant to align with OCC Bulletin 2015-35. In particular, a national bank's physical position in a particular physical commodity (including, as applicable, delivery point, purity, grade, chemical composition, weight, and size) must not be more than five percent of the gross notional value of the bank's derivatives that are in that particular physical commodity and allow for physical settlement within 30 days. Like OCC Bulletin 2015-35, this limit applies to transactions that contemplate physical delivery within 30 days,
As noted, the OCC continually seeks to update its regulations to stay current with industry changes and technological advances, subject to Federal law and consistent with the safe and sound operation of the banking system. As part of this process, the OCC proposed updating and modernizing § 7.2000, which provides a regulatory framework for national bank corporate governance. As described by the OCC in various conditional approvals,
Section 7.2000 currently provides that a national bank proposing to engage in a corporate governance procedure must comply with applicable Federal banking statutes and regulations and safe and sound banking practices. In addition, § 7.2000 provides that to the extent not inconsistent with applicable Federal banking statutes or regulations, or bank safety and soundness, a national bank may elect to follow the corporate governance procedures of the law of the State in which the main office of the bank is located, the law of the State in which the holding company of the bank is incorporated, Delaware General Corporation Law, or the Model Business Corporation Act. Further, § 7.2000 requires that a national bank designate in its bylaws the body of law selected for its corporate governance procedures. Finally, § 7.2000 describes the process for obtaining OCC staff positions on the ability of a national bank to engage in a particular corporate governance procedure.
The OCC proposed to amend § 7.2000 to reduce burden, provide greater clarity, and modernize the national bank charter with respect to corporate governance provisions. The proposed amendments also would address anomalous results that may arise when a national bank eliminates its holding company. As a general matter, the OCC proposed changing the term “corporate governance procedure” used in § 7.2000 to “corporate governance provisions” and to revise paragraph (a) of § 7.2000 accordingly. As discussed in the proposal, the OCC believes that “corporate governance procedure” may be construed more narrowly than intended and omit corporate governance practices that are not procedural in nature. The OCC proposed revising paragraph (a) to provide the corporate governance provisions in a national bank's articles of association and bylaws and the bank's conduct of its corporate governance affairs must comply with applicable Federal banking statutes and regulations and safe and sound banking practices. The OCC received no comments on proposed paragraph (a) and adopts it as proposed. As discussed in the proposal, the OCC does not intend this change to affect the application of prior OCC interpretations of corporate governance procedures to § 7.2000.
The OCC also proposed increasing a national bank's flexibility in choice of corporate governance provisions in three ways. First, the OCC proposed revising paragraph (b) of § 7.2000 to authorize a national bank to elect the corporate governance provisions of the law of any State in which any branch of the bank is located in addition to the law of the State in which the bank's main office is located, to the extent not inconsistent with applicable Federal banking statutes or regulations or safety and soundness. The OCC received no comments on this change and adopts it as proposed. Accordingly, a national bank is no longer limited to using the corporate governance provisions of the State where its main office is located. For example, a national bank with its main office in State A and branches in State B and State C may elect to use the corporate governance provisions of the law of one of State A, State B, or State C.
Second, the OCC proposed revising paragraph (b) to authorize the national bank to use the law of the State where one holding company of the bank is incorporated. The current rule indicates that a national bank may use the law of the State where the holding company of the bank is incorporated. This amendment expressly recognizes the
Third, the OCC proposed adding a new paragraph (c) that would allow a national bank to continue to use the corporate governance provisions of the law of the State where its holding company is incorporated even if the holding company is later eliminated or no longer controls the bank, and the national bank is not located in that State. This amendment removes an impediment to a national bank that may choose to eliminate its holding company or is no longer controlled by that holding company but wishes to retain longstanding and familiar corporate governance provisions. The OCC received one comment supporting proposed paragraph (c) and adopts it as proposed.
The OCC also proposed revising current paragraph (c) of § 7.2000 (proposed to be redesignated as § 7.2000(d)). Current paragraph (c) provides that the OCC considers requests for the OCC staff's position on the ability of a national bank to engage in a particular State corporate governance procedure in accordance with the no-objection procedures set forth in OCC Banking Circular 205 or any subsequently published agency procedures, and that requests should demonstrate how the proposed practice is not inconsistent with applicable Federal statutes or regulations and is consistent with bank safety and soundness. The OCC issued Banking Circular 205 on July 26, 1985 and has not modified it since. However, a national bank also may request the views of the OCC on an interpretation of national banking statutes and regulations independent of the process in Banking Circular 205, which has been the more common approach since 1985.
In order to update paragraph (c), the OCC proposed removing the requirement that banks requesting the OCC's views on State corporate governance law use the no-objection procedure. The proposal also listed the information that a request must contain. Similar to what is set forth in OCC Banking Circular 205, this information, includes: (1) The name of the bank; (2) citations to the State statutes or regulations involved; (3) a discussion as to whether a similarly situated State bank is subject to or may adopt the corporate governance provision; (4) identification of all Federal banking statutes or regulations that are on the same subject as, or otherwise have a bearing on, the subject of the proposed State corporate governance provision; and (5) an analysis of how the proposed corporate governance provision is not inconsistent with applicable Federal statutes or regulations nor with bank safety and soundness. The OCC received no comments on proposed paragraph (d) and adopts it as proposed. The OCC notes that this provision does not preclude a national bank from seeking informal consultation with OCC staff. However, if the bank wants to receive a written response from OCC staff, it must follow the procedure in this proposed paragraph (d).
The final rule revises the heading of § 7.2000 to reflect the change in terminology from corporate governance procedures to corporate governance provisions. The final rule also makes a technical change to the heading not previously proposed to clarify that this provision applies to national banks. As a result, the heading now reads “National bank corporate governance.”
The OCC requested comment on whether a national bank also should be able to adopt a combination of corporate governance provisions from the laws of several different States where the national bank and any holding companies are located, thus potentially resulting in a national bank following corporate governance provisions that derive from a combination of States' laws, or whether a national bank should be limited to electing and using the corporate governance provisions of a single State. The OCC received one comment on this request. The commenter raised potential litigation issues with adopting a combination of corporate governance provisions, questioning whether courts will respect combined elections of law where there are minimal contacts with a State whose law has been elected, and citing a trend in court decisions on the validity of choice of law as part of contractual agreements. Given this concern and the lack of positive comments regarding this change, as well as the possible confusion for the bank, shareholders, the OCC, and others that may arise with the use of multiple States' corporate governance laws, the OCC is not amending the final rule at this time to permit the adoption of corporate governance provisions from the laws of several different States.
Further, the OCC requested comment on whether it should make, to the extent appropriate, similar revisions to the regulations pertaining to corporate governance provisions for Federal savings associations in 12 CFR 5.21 and 5.22. Under current law, all Federal savings associations may elect to use the corporate governance provisions of the laws of the State where the home office of the association is located. Federal stock savings associations also may elect the laws of the State where any holding company of the association is incorporated or chartered; Delaware General Corporation law; or the Model Business Corporation Act, provided that such procedures may be elected to the extent not inconsistent with applicable Federal statutes and regulations and safety and soundness, and such procedures are not prohibited by part 5. One commenter stated that Federal mutual savings associations should have the same leeway in making a choice of law as national banks. Accordingly, the OCC is revising §§ 5.21 and 5.22 to permit additional flexibility for Federal savings associations to allow parity with national banks, as applicable and pursuant to permissible law. As a result of this final rule, Federal savings associations also may elect to use the corporate governance provisions of any State in which a branch of the association is located and, in the case of Federal stock savings associations, the law of any State in which any current or former holding company of the association is incorporated or chartered. The final rule also changes “institution” to “association” in § 5.21 for consistency.
In addition, the OCC requested comment on whether the final rule should change the term “corporate governance procedures” to “corporate governance provisions” in §§ 5.21 and 5.22 to be consistent with the change in terminology proposed for § 7.2000. The OCC did not receive any comments on this request. For clarity and conformity, the OCC is making this technical change to §§ 5.21 and 5.22.
The OCC received two additional comments regarding § 7.2000. One commenter requested that the OCC review the form articles of association and bylaws to confirm that they are consistent with applicable Federal banking statutes and regulations. The commenter asserted that these forms contain requirements that are not mandated by Federal banking statutes and regulations. As the commenter's request does not specifically request any specific revisions to § 7.2000, the OCC is adopting the amendments as proposed. However, the OCC notes that it periodically reviews its model articles of association and bylaws in the ordinary course of business.
Another commenter recommended that the OCC add a provision to part 7 recognizing the authority of a national bank to adopt exculpatory clauses in their articles and/or bylaws under applicable State law or the Model Code. The commenter's request for a provision on national bank authority to adopt exculpatory clauses raises an issue that the OCC did not specifically address in the proposal. The proposed revisions were not intended to address or sanction specific substantive provisions of State corporate law. As the OCC did not contemplate the commenter's requested provision in the proposed rule, the OCC declines to further revise § 7.200 at this time. However, the agency may consider this and similar issues in future rulemakings.
The OCC proposed to add a new § 7.2001 to address the extent to which a national bank may include anti-takeover provisions in its articles of association or bylaws.
The OCC received one comment related to proposed § 7.2001. The commenter raised several concerns about how the provision would apply to mutual institutions. The OCC notes that proposed § 7.2001 applies only to national banks, not Federal mutual savings associations. Further, national banks may only be organized as corporations and not as banks in the mutual form of organization. The proposal noted it did not apply to Federal savings associations and that existing provisions on this subject applicable to stock Federal savings associations were not affected by the proposal.
As noted in the proposed rule, the purpose of § 7.2001 is to provide the OCC's views about the permissibility of several types of anti-takeover provisions. Specifically, paragraph (a) of § 7.2001 provides that a national bank may, pursuant to 12 CFR 7.2000(b), adopt anti-takeover provisions included in State corporate governance law if the provisions are not inconsistent with Federal banking statutes or regulations and not inconsistent with bank safety and soundness.
Paragraph (b) of § 7.2001 sets forth the type of anti-takeover provisions in State corporate governance provisions that the OCC specifically has determined are not inconsistent with Federal banking statutes or regulations.
Paragraph (c) of § 7.2001 sets forth the type of anti-takeover provisions in State corporate governance provisions that the OCC has determined are inconsistent with Federal banking statutes or regulations. A national bank may not elect to follow these provisions. These provisions are set forth below.
As indicated above, § 7.2000(b) permits a national bank to elect to follow a State corporate governance provision only if it is not inconsistent with Federal law and bank safety and soundness. Paragraph (d) of § 7.2001 addresses the impact of bank safety and soundness on adoption of anti-takeover provisions.
Anti-takeover provisions may make it harder for a bank to be acquired by another bank or by investors or to raise capital by discouraging share purchases by a potential acquiror. Thus, when a bank is in a weak condition, anti-takeover provisions the OCC has determined are not inconsistent with Federal law nevertheless would be inconsistent with bank safety and soundness if they would impair the possibility of restoring the bank to sound condition. These provisions would then be impermissible.
Accordingly, paragraph (d) provides that any State corporate governance provision, including anti-takeover provisions, that would render more difficult or discourage an injection of capital by purchase of bank stock, a merger, the acquisition of the bank, a tender offer, a proxy contest, the assumption of control by a holder of a large block of the bank's stock, or the removal of the incumbent board of directors or management is inconsistent with bank safety and soundness if: (1) The bank is less than adequately capitalized (as defined in 12 CFR part 6); (2) the bank is in troubled condition (as defined in 12 CFR 5.51(c)(7)); (3) grounds for the appointment of a receiver under 12 U.S.C. 191 are present, as determined by the OCC; or (4) the bank is otherwise in less than satisfactory condition, as determined by the OCC. The OCC notes that the final rule adds “as determined by the OCC” to paragraph (d)(3) to clarify for a bank when this condition would be present.
However, paragraph (d) also provides that an anti-takeover provision is not inconsistent with bank safety and soundness if, at the time it adopts the provision, the national bank: (1) Is not subject to any of the foregoing conditions and (2) includes along with the provision a limitation that the provision is not effective if one or more of the foregoing conditions occur or if the OCC otherwise directs the bank not to follow the provision for supervisory reasons.
Paragraph (e) provides for OCC case-by-case review of anti-takeover provisions. The OCC reviewed each type of State anti-takeover provision described in paragraph (b) for consistency with Federal banking statutes and regulations only at a general level, without reviewing the specific terms of a proposed provision to be adopted by a particular bank. While the OCC has concluded that the types of provisions set out in paragraph (b) are not inconsistent with Federal banking statutes and regulations in general, the specific provision a particular bank adopts may contain features that could change the result of the OCC's review. Similarly, some anti-takeover provisions may be inconsistent with bank safety and soundness for a particular national bank because of its individual circumstances, even if it is not subject to the conditions listed in paragraph (d).
In order to address the need for individual determinations when appropriate, paragraph (e) provides that the OCC may determine that a State anti-takeover provision, as proposed or adopted by an individual national bank, is (1) inconsistent with Federal banking statutes or regulations, even if it is of a type included in paragraph (b) or (2) inconsistent with bank safety and soundness other than as provided in paragraph (d). The OCC may begin a case-by-case review on its own initiative. In addition, a bank that wishes the OCC to review the permissibility of the specific State anti-takeover provisions it has adopted or proposes to adopt may request the OCC's review, under the procedures set forth at 12 CFR 7.2000(d).
Finally, paragraph (f) addresses the method a national bank, its shareholders, and its directors must use to adopt each anti-takeover provision. In general, the bank must follow the requirements for board of director and shareholder approval set out in the State corporate governance statute it is electing to follow. However, if the provision is included in the bank's articles of association, the bank's shareholders must approve the amendment of the articles pursuant to 12 U.S.C. 21a, even if the State law does not require approval by the shareholders. Further, if the State corporate governance law requires the provision to be in the company's articles of incorporation, certificate of incorporation, or similar document, the national bank must include the provision in its articles of association. If the State corporate governance law does not require the provision to be in the company's articles of incorporation,
Twelve U.S.C. 61 prohibits an officer, clerk, teller, or bookkeeper of the national bank from acting as proxy for shareholder voting. Section 7.2002 codifies this prohibition in OCC regulations and provides that any person or group of persons, except the bank's officers, clerks, tellers, or bookkeepers, may be designated to act as proxy. The OCC proposed to amend this section to clarify that the proxy referenced in the section is for shareholder voting, as provided in the statute. The OCC received no comments on this clarification and adopts it as proposed with technical changes. The final rule revises the section heading and rule text to clarify that this provision applies to national banks. The OCC intends no substantive changes to § 7.2002.
The OCC is finalizing changes it made to part 7 in an interim final rule entitled Director, Shareholder, and Member Meetings, published in the
The OCC received one substantive comment letter that supported these amendments. In response to a request for comment included in the preamble to this interim final rule, this commenter opposed any new risk management standards to mitigate any security risks arising from telephonic or electronic meetings, noting that new standards would be unnecessary given current safeguards and regulatory requirements. The OCC is finalizing the amendments made by the interim final rule to §§ 7.2001 and 7.2003 with conforming and technical changes. The final rule replaces references in § 7.2003 to “corporate governance procedures” to “corporate governance provisions,” to conform to the change in this terminology made by § 7.2000 of this final rule. The final rule also makes a technical change to the heading to add national banks. The OCC notes that it is not imposing any new risk management standards for telephonic or electronic meetings though this final rule.
Specifically, § 7.2003(c) permits a national bank to provide for telephonic or electronic participation at shareholder meetings. Further, paragraph (c) requires a national bank to have procedures for telephonic or electronic participation in shareholder meetings. A national bank may choose these procedures from several sources: (1) The corporate governance provisions it has elected to follow pursuant to § 7.2000(b), if those elected procedures include telephonic or electronic participation procedures; (2) the Delaware General Corporation Law; or (3) the Model Business Corporation Act. However, these procedures must not be inconsistent with applicable Federal statutes and regulations and safety and soundness. This provision ensures that a national bank has procedures in place for remote participation at shareholder meetings even if the corporate governance law it has elected to follow does not contain procedures for remote participation at shareholder meetings or if it has not elected to follow any particular corporate governance law pursuant to § 7.2000(b). To inform shareholders of its choice of procedures, this paragraph requires the national bank to indicate the use of these procedures in its bylaws.
Paragraph (d) of § 7.2003 provides that a national bank may provide for telephonic or electronic participation at a meeting of its board of directors. This provision codifies OCC Interpretive Letter No. 860
The OCC is making technical changes to § 7.2008 in this final rule not included in the proposed rule. Currently, § 7.2008 provides that a notary public, including one who is a director but not an officer of the national bank, may administer the oath of directors, and that any person, other than an officer of the bank, having an official seal and authorized by the State to administer oaths, also may administer the oath. However, the statute governing the oath of bank directors, 12 U.S.C. 73, requires that the oath be taken before a notary public or any other State authorized officer other than an officer of the director's bank. Further, OCC instructions conform to the statute by requiring the director to take the oath before a notary public or other authorized State official.
Section 7.2009 requires a national bank to provide in its articles of association or bylaws that a quorum of the board of directors is at least a majority of the entire board then in office. Section 7.2009 also prohibits bank officers from voting by proxy. The OCC did not propose any substantive changes to this section. However, the OCC received one comment on § 7.2009 requesting that the OCC revise it to allow national banks to adopt the quorum requirements of the law of the relevant State, the Delaware General Corporate Law, or the Model Business Corporation Act. Both the Model Business Corporation Act and Delaware General Corporate Law permit corporate boards to deem one third of all members sufficient to establish a quorum.
The OCC disagrees with this comment. The current requirement in
Twelve CFR 7.2010 provides that the business and affairs of a bank shall be managed by or under the direction of the board of directors and that boards of directors should refer to published OCC guidance for additional information regarding responsibilities of directors. The OCC did not propose substantive changes to § 7.2010.
Two commenters discussed the second sentence of § 7.2010, which states that the board of directors should refer to OCC published guidance for additional information regarding responsibilities of directors. One commenter stated that the sentence might be read as codifying guidance and suggested that the referenced guidance may be incorrect, inconsistent, or omit information that is germane to the duties and responsibilities of bank directors. Another commenter stated that the reference to guidance in § 7.2010 should be revised to avoid suggesting that guidance has the force of law. This commenter recommended that the OCC revise § 7.2010 to delete the second sentence and establish any specific legal standards regarding director responsibilities through the rulemaking process. The OCC notes that § 7.2010 only refers boards of directors to OCC guidance for additional information and does not suggest that guidance has the force of law nor that the guidance contains all pertinent information. This guidance may be helpful to boards of directors by discussing existing legal requirements applicable to directors and, consistent with the Interagency Statement Clarifying the Role of Supervisory Guidance,
One commenter also suggested that the OCC repeal § 7.2010 in its entirety or revise it to replace the current text with a statement that the standards of conduct applicable to directors are governed by the law of the State elected by the bank or the Model Business Corporation Act. The OCC is not including this suggested revision in the final rule. The OCC has not previously interpreted directors to be subject only to the standards of conduct established by the law of the State elected by the bank or the Model Business Corporation Act and doing so may conflict with other statutory or regulatory standards applicable to bank directors.
Twelve U.S.C. 76 provides that the president of the bank must be a member of the board and be chairman thereof, but that the board may designate a director in lieu of the president to be chairman, who must perform duties as assigned by the board. Section 7.2012 codifies this statutory requirement in the OCC's rules by providing that pursuant to 12 U.S.C. 76, the president of a national bank must be a member of the board of directors, but a director other than the president may be elected chairman of the board. This section further provides that a person other than the president may serve as the chief executive officer, and that this person is not required to be a director of the bank. When first proposing this rule, the OCC acknowledged that it was adding this second sentence to provide that a person other than the president or a director may serve as chief executive officer of a bank.
The OCC proposed two changes to this section and did not receive any comments. As a result, the OCC is adopting these changes to § 7.2012 as proposed. First, the final rule provides that the person serving as, or in the function of, president of a national bank, regardless of title, must be a member of the board of directors. This change aligns the regulation with the OCC's view that the bank officer positions in 12 U.S.C. 76 and other provisions of the National Bank Act refer to functions rather than required titles. If a national bank does not have an individual serving in the position of president but does have another officer serving the function of president, the individual serving in the function of president must be a member of the board of directors. The person serving the function of president is generally the individual appointed to oversee the national bank's day-to-day activities.
Second, the final rule removes the provision in § 7.2012 that states that a person other than the president may serve as chief executive officer, and this person is not required to be a director of the bank. This provision is unnecessary. The position of chief executive officer is not referenced in statute and, as indicated above, national banks have discretion to set the duties of their officers. Further, this provision would conflict with the first revision to this section. Because function rather than title govern under this amendment, the final rule requires a chief executive officer that serves the function of president to be a member of the board.
The OCC also is making a technical change to the section heading not included in the proposed rule to reflect that fact that § 7.2012 applies only to national banks.
The OCC proposed amending and reorganizing § 7.2014, Indemnification of institution-affiliate parties (by national banks), applying revised § 7.2014 to Federal savings associations, and removing § 145.121, Indemnification of directors, officers and employees (by Federal savings associations). As discussed below, the OCC is adopting § 7.2014 as proposed, with a technical change to the section heading.
Section 7.2014 addresses indemnification of institution-affiliated parties (IAPs) by national banks in cases involving an administrative proceeding or civil action initiated by a Federal banking agency, as well as cases that do not involve a Federal banking agency. Under § 7.2014(a), a national bank only may make or agree to make indemnification payments to an IAP with respect to an administrative proceeding or civil action initiated by a Federal banking agency if those payments are reasonable and consistent with the requirements of 12 U.S.C.
Section 7.2014(b)(1) permits a national bank to indemnify IAPs for damages and expenses, including the advancement of legal fees and expenses, in cases involving an administrative proceeding or civil action that is not initiated by a Federal banking agency in accordance with the law of the State in which the main office of the bank is located, the law of the State in which the bank's holding company is incorporated, or the relevant provisions of the Model Business Corporation Act or Delaware General Corporation Law, provided such payments are consistent with safe and sound banking practices.
Additionally, pursuant to § 7.2014(b)(2), a national bank may provide for the payment of reasonable premiums for insurance covering the expenses, legal fees, and liability of IAPs to the extent that these costs could be indemnified under administrative proceedings or civil actions not initiated by a Federal banking agency, as provided in § 7.2014(b)(1).
Twelve CFR 145.121 addresses indemnification of directors, officers and employees by Federal savings associations. Section 145.121(b) requires a Federal savings association to indemnify any person against whom an action is brought or threatened because that person is or was a director, officer, or employee of the association. This indemnification is subject to the requirements of § 145.121(c) and (g). Section 145.121(c) provides that indemnification only may be made available to the IAP if (1) there is a final judgment on the merits in the IAP's favor; or (2) in the case of settlement, final judgment against the IAP, or final judgment in the IAP's favor other than on the merits, if a majority of the disinterested directors of the Federal savings association determine that the IAP was acting in good faith. It also provides that the association give the OCC at least 60 days' notice of its intention to indemnify an IAP and provides that the association may not indemnify the IAP if the OCC advises the savings association in writing that the OCC objects. Section 145.121(g) makes the indemnification subject to 12 U.S.C. 1821(k).
Pursuant to § 145.121(d), a Federal savings association may obtain insurance to protect it and its directors, officers, and employees from potential losses arising from claims for acts committed in their capacity as directors, officers, or employees. However, a Federal savings association may not obtain insurance that provides for payment of losses incurred as a consequence of willful or criminal misconduct.
Pursuant to § 145.121(e), if a majority of the directors of a Federal savings association conclude that, in connection with an action, a person may become entitled to indemnification, the directors may authorize payment of reasonable costs and expenses arising from the defense or settlement of the action. Before making advance payment of expenses, the savings association is required to obtain an agreement that the savings association will be repaid if the person on whose behalf payment is made is later determined not to be entitled to the indemnification.
Pursuant to § 145.121(f), an association that has a bylaw in effect relating to indemnification of its personnel must be governed solely by that bylaw, except that its authority to obtain insurance must be governed by § 145.121(d), which, as described above, authorizes the purchase of indemnification insurance unless the insurance pays for losses created by willful or criminal misconduct. Section 145.121(g) states that the indemnification provided for in § 145.121 for Federal savings associations is subject to and qualified by 12 U.S.C. 1821(k), which addresses personal liability for directors and officers in certain civil actions.
The OCC proposed adding Federal savings associations to § 7.2014 so that both charters would be required to comply with § 7.2014 and removing § 145.121. Because § 7.2014 applies to IAPs as well as officers, directors, and employees, and § 145.121 applies only to officers, directors and employees, this amendment enlarges the scope of indemnification rules for Federal savings associations. As a result, the OCC's indemnification rules also would apply to certain Federal savings association controlling shareholders, independent contractors, consultants, and other persons identified in 12 U.S.C. 1813(u). The OCC received no comments on this integration of Federal savings associations into § 7.2014 and therefore adopts this integration as proposed.
The OCC also proposed other amendments to § 7.2014. First, the OCC proposed amending current § 7.2014(b)(1), redesignated as § 7.2014(a) and retitled, to provide that State law on indemnification may apply to all administrative proceedings or civil actions for which an IAP can be indemnified, not just actions that are initiated by a person or entity not a Federal banking agency as under the current rule. This revision clarifies the application of State law on indemnification to actions initiated by Federal banking agencies. However, current § 7.2014(a), redesignated as § 7.2014(b), would still apply. Specifically, under redesignated § 7.2014(b), with respect to proceedings or civil actions initiated by a Federal banking agency, a national bank or Federal savings association only may make or agree to make indemnification payments to an IAP that are reasonable and consistent with the requirements of
The OCC also proposed a technical change to redesignated § 7.2014(a). As indicated above, the current rule states that in cases involving an administrative proceeding or civil action not initiated by a Federal banking agency, a national bank may indemnify an IAP in accordance with the law of the State in which the main office of the bank is located, the law of the State in which the bank's holding company is incorporated, or the relevant provisions of the Model Business Corporation Act or Delaware General Corporation Law, provided such payments are consistent with safe and sound banking practices. Because these sources of law are identical to the law a national bank may elect to follow pursuant to current § 7.2000(b) or the law a Federal savings association may elect to follow pursuant to current § 5.21 or § 5.22, the OCC proposed to replace the language on sources of State law in this provision with a statement that the bank or savings association may indemnify an IAP for damages and expenses in accordance with the law of the State the bank or savings association has designated for its corporate governance under the provisions of § 7.2000, § 5.21, or § 5.22, as applicable. Because the OCC is enlarging the choice of law for both national banks and Federal savings associations in this final rule, this cross-reference incorporates these new State law options.
One commenter suggested that the OCC clarify in the final rule under redesignated § 7.2014(a) how the OCC would evaluate whether indemnification payments to IAPs are “consistent with safety and soundness.” For example, the commenter suggested that the OCC confirm that the types of indemnification permissible under Delaware General Corporation Law generally would be permissible for national banks and Federal savings associations, except where such payment would introduce safety and soundness risk by measurably reducing bank capital and/or liquidity levels. The OCC disagrees with this comment. OCC determinations of whether indemnification payments to IAPs are “consistent with safety and soundness” are made on a case-by-case basis based on the specific facts and circumstances of a particular case, and do not depend on State law. In the absence of specific facts and circumstances, the OCC declines to expound in the final rule upon how the OCC would evaluate the safety and soundness of indemnification payments to IAPs.
The commenter also suggested that the OCC include in the final rule under redesignated § 7.2014(a) a process for appealing the OCC's invalidation of indemnification payments or an indemnification agreement on safety and soundness grounds. The OCC did not propose an appeals process, and therefore is not including one in the final rule. If a national bank or Federal savings association disputes an OCC invalidation of an indemnification payment or agreement, it may file an appeal with the OCC pursuant to the OCC's Bank Appeals Process.
For the reasons discussed above, the OCC adopts redesignated § 7.2014(a) as proposed.
Second, the OCC proposed amending § 7.2014(b)(2), redesignated as § 7.2014(d), to allow a national bank or Federal savings association to provide for the payment of reasonable insurance premiums in connection with all actions involving an IAP that could be indemnified under § 7.2014, whether or not initiated by a Federal banking agency. The OCC received no comments on this change and adopts it as proposed. The OCC believes this change will resolve confusion regarding how current § 7.2014(b)(2) is applied. This change also will better align OCC regulations on the payment of insurance premiums with the FDIC's regulations and 12 U.S.C. 1828(k).
Third, the OCC proposed adding a new paragraph (c) to require a national bank or Federal savings association, before advancing funds to an IAP under § 7.2014, to obtain a written agreement that the IAP will reimburse the bank or savings association for any portion of indemnification that the IAP is ultimately found not to be entitled to under 12 U.S.C. 1828(k) and implementing regulations, except to the extent the bank's or savings association's expenses have been reimbursed by an insurance policy or fidelity bond.
One commenter suggested that the OCC confirm in the final rule that the written agreement required under § 7.2014(c) may provide for the reimbursement of expenses, in addition to damages and other costs. The commenter noted that proposed § 7.2014(c) implies that expenses may be covered by a written agreement, because it notes that the written agreement may cover any portion of the indemnification payment “except to the extent that the bank's or savings association's expenses have been reimbursed by an insurance policy or fidelity bond.” The OCC does not believe that the final rule creates any uncertainty regarding whether the written agreement may provide for the reimbursement of expenses, in addition to damages and other costs. As the commenter notes, and the OCC agrees, the written agreement may cover any portion of the indemnification payment “except to the extent that the bank's or savings association's expenses have been reimbursed by an insurance policy
One commenter suggested that rather than amending § 7.2014, the OCC should repeal the entire regulation and the comparable regulation for Federal savings associations, § 145.121. The commenter noted that 12 CFR part 359 and 12 U.S.C. 1828(k) already govern indemnification to IAPs in administrative and court proceedings brought by a Federal banking agency; and the proposed language in 12 CFR 7.2000 makes the separate indemnification provisions relating to non-part 359 proceedings unnecessary. The OCC disagrees with the commenter's suggestion. The OCC believes that having OCC-specific regulations provides clarity for OCC-supervised banks and savings associations. The OCC therefore has not made any changes to the final rule in response to this comment.
The commenter also suggested that, if the OCC does not repeal § 7.2014, the OCC should delete language in § 7.2014 that reserves the power of the OCC to overturn any bank board decision on indemnification and advancement of expenses. The OCC disagrees with this comment. The OCC must retain supervisory authority to object to indemnification payments if they threaten the safety and soundness of the institution. The OCC notes that it would only exercise this authority under those circumstances. The OCC therefore has not made any changes to the final rule in response to this comment.
This commenter also suggested that, if the OCC does not repeal § 7.2014, the OCC should include the right to advance expenses in both matters subject to 12 CFR part 359 and those that are not. The commenter further suggested that the OCC should expand coverage for indemnification unrelated to part 359-type matters to those who may not fall under the definition of IAPs, noting that State statutes typically cover potentially other individuals. The OCC also disagrees with these comments. Section 7.2014 already includes the right to advance expenses in both matters subject to 12 CFR part 359, which implements 12 U.S.C. 1828(k), and those that are not. As noted above, § 7.2014 addresses indemnification of IAPs by national banks in cases involving an administrative proceeding or civil action initiated by a Federal banking agency, as well as cases that do not involve a Federal banking agency. Further, the OCC believes the scope of the coverage for indemnification to IAPs is appropriate and sufficiently broad. “IAP” has the same meaning as set forth at 12 U.S.C. 1813(u), and thus § 7.2014 applies not only to officers, directors, and employees of the bank, but also to controlling shareholders, independent contractors, consultants, and other persons identified in 12 U.S.C. 1813(u). The OCC therefore has not made any changes to the final rule in response to these comments.
The OCC believes that revised § 7.2014 incorporates the provisions of current § 145.121 that should be applicable to both national banks and Federal savings associations, while maintaining appropriate flexibility for both types of institutions. As noted above, revised § 7.2014 will apply to actions brought by a Federal banking agency and actions not brought by a Federal banking agency, as in § 145.121, while retaining the statutory limits of section 1828(k).
The OCC also did not propose to include in § 7.2014 the provision in § 145.121 that requires a 60-day prior notice to the OCC before making an indemnification because it believes this provision is burdensome and unnecessary.
Sections 12 CFR 7.2016, 7.2017, and 7.2018 contain specific requirements related to national bank stock transfers and stock certificates. Many of these requirements are mandated by 12 U.S.C. 52. However, some of these
Section 7.2016(a) states that, pursuant section 52, a national bank may impose conditions on the transfer of its stock reasonably calculated to simplify the work of the bank with respect to stock transfers, voting at shareholders' meetings, and related matters and to protect the bank against fraudulent transfers. Consistent with the statute, § 7.2016(b) allows a national bank to close its stock records for a reasonable period to ascertain shareholders for voting purposes. The board also may fix record dates, which should be reasonable in proximity to the date notice is given to shareholders of the meeting. Section 7.2017 states that the president and cashier of the bank, or other officers authorized by the bank's bylaws, shall sign each stock certificate. These signatures may be manual or facsimile and may be electronic. Each certificate also must be sealed with the seal of the bank.
To streamline OCC rules, the OCC proposed combining §§ 7.2016 and 7.2017 into one section, § 7.2016, that would apply to both stock transfers and stock certificate requirements. The OCC also proposed making OCC rules on stock certificates more flexible. As noted above, section 12 U.S.C. 52 requires certain officers of the association to sign every bank stock certificate and for it to be sealed with the seal of the association. However, banks now generally hold stock in “book-entry” form, which is not a format that supports signatures or stamps. Although section 52 places requirements on physical stock certificates, the OCC does not believe that the language of that section requires banks to actually issue stock in certificated form. Notably, section 52 also states that “[t]he capital stock of each association shall be . . . transferable on the books of the association in such manner as may be prescribed in the by-laws or articles of association.”
Finally, the OCC proposed to remove § 7.2018 as unnecessary. Section 7.2018 states that if the bank's articles of association or bylaws do not provide for replacing lost, stolen, or destroyed stock certificates, the bank may adopt procedures under 12 CFR 7.2000. Section 7.2000 generally permits national banks to adopt corporate governance procedures
The OCC received no comments on these changes to §§ 7.2016 and the removal of §§ 7.2017 and 7.2018. Therefore, the OCC adopts these changes to § 7.2016 and removes §§ 7.2017 and 7.2018 as proposed. The OCC also is making a technical change to the section heading not included in the proposed rule to reflect that fact that § 7.2016 applies only to national banks.
The OCC proposed to remove 12 CFR 7.2020. Section 7.2020 provides that a national bank may repurchase its outstanding shares and hold them as treasury stock as a capital reduction under 12 U.S.C. 59 if the repurchase and retention is for a “legitimate corporate purpose” and not for speculative purposes. The OCC issued § 7.2020 in 1996 as an exception to the provision in 12 U.S.C. 83 that prohibited a national bank from being the “purchaser or holder” of its own shares. However, in 2000, Congress amended section 83 to remove this prohibition.
The OCC proposed new § 7.2025 to codify various OCC interpretations of the National Bank Act involving capital stock issuances and repurchases. The OCC received no comment on this new section and adopts it as proposed.
Section 7.2025 explains the shareholder approval requirements for the issuance of authorized common stock; the issuance, repurchase, and redemption of preferred stock pursuant to blank check procedures; and share repurchase programs. Generally, an increase or decrease in the amount of a national bank's common or preferred stock is a change in permanent capital subject to the notice and approval requirements of 12 CFR 5.46 and applicable law.
The OCC also determined that shareholders' adoption or approval of a blank check preferred stock article constitutes the shareholder action required by 12 U.S.C. 51a and 51b to issue and establish the terms of preferred stock. The subsequent issuance of the preferred stock within the authorized limits would not require additional shareholder approval. Interpretive Letter 921 did not specifically address blank check preferred procedures that include the authority, and the shareholder action required, to repurchase and redeem blank check preferred stock.
The redemption or repurchase of preferred stock is a reduction in capital. Twelve U.S.C. 59 requires the approval of two-thirds of shareholders for a national bank to reduce capital, but it does not specify when in the process the bank must obtain shareholder approval. In Interpretive Letter 1162, the OCC determined that the holders of two-thirds of a national bank's shares may approve in advance redemptions of blank check preferred stock by voting to amend the articles of association to authorize the issuance and redemption of blank check preferred shares.
Section 7.2025(c) codifies these interpretations and permits blank check procedures, if approved in advance by the bank's shareholders, that authorize the issuance, repurchase, and redemption of preferred stock without additional shareholder approval at the time of issuance, repurchase, or redemption, if certain conditions are met. Paragraph (c) provides that, subject to the requirements of 12 U.S.C. 51a, 51b, and 59, a national bank may adopt procedures to authorize the board of directors to issue, determine the terms of, repurchase, or redeem one or more series of preferred stock, if permitted by the corporate governance provisions adopted by the bank under 12 CFR 7.2000. This provision further provides that, to satisfy the shareholder approval requirements of 12 U.S.C. 51a and 59, shareholders must approve the adoption of these procedures in advance through an amendment to the national bank's articles of association, and that any amendment that authorizes both the issuance and the repurchase and redemption of shares must be approved by holders of two-thirds of the national bank's shares.
The OCC proposed to amend § 7.3000, National bank hours and closings, to include Federal savings associations, to update it, and to make technical and clarifying changes. The OCC received one comment on § 7.3000, in support of the proposed updates to the types of emergency conditions that may result in the declaration of a legal holiday. Therefore, the OCC adopts the amendments to § 7.3000 as proposed, with technical changes to the section and paragraph (a) headings.
Twelve U.S.C. 95(b)(1) specifically authorizes the Comptroller to designate a legal holiday because of emergency conditions occurring in any State or part of a State for national banks located in
There is no equivalent statute or corresponding regulation for Federal savings associations. However, a former OTS regulation at 12 CFR 510.2(b) permitted the OTS to waive or relax any limitations pertaining to the operations of a Federal savings associations in any area affected by a determination by the President of the United States that a major disaster or emergency had occurred. Amending § 7.300 to include Federal savings associations clarifies for these institutions how a legal holiday is declared and the implications of a legal holiday declaration, as well as provide consistency between national bank and Federal savings association operations on legal holidays.
As proposed, in addition to adding Federal savings associations, the final rule clarifies and updates the emergency closing provisions of § 7.3000. First, the final rule clarifies that § 7.3000 also applies to Federal branches and agencies of foreign banks. Although current § 7.3000 applies to Federal branches and agencies pursuant to section 4(b) of the International Banking Act, 12 U.S.C. 3102(b), the OCC believes it is appropriate to specify this application in the rule.
Second, the final rule clarifies that the Comptroller may declare “any day” a legal holiday, instead of “a day,” to more accurately reflect the statutory language and to clarify that the Comptroller may declare more than one day due to the emergency condition as a legal holiday.
Third, the final rule amends § 7.3000(b) to state that emergency conditions may be “caused by acts of nature or of man.” This amendment mirrors the language in 12 U.S.C. 95(b)(1) and clarifies the broad scope of possible emergency conditions that could justify a legal holiday.
Fourth, the final rule updates the types of emergency conditions listed in the rule to include disasters other than natural disasters, public health or safety emergencies, and cyber threats or other unauthorized intrusions, and updates the list of examples to include pandemics, terrorist attacks, and cyber-attacks on bank systems.
Fifth, the final rule provides that the Comptroller may issue a declaration of a legal holiday in anticipation of the emergency condition, in addition to at the time of the emergency or soon thereafter. This codifies the current practice of the Comptroller in most cases, which permits national banks, Federal savings associations, and Federal branches and agencies to better plan for the possible closing.
Sixth, the final rule provides that in the absence of a Comptroller declaration of a bank holiday, a national bank, Federal savings associations, or Federal branch or agency may choose to temporarily close offices in response to an emergency condition. If a bank, savings association, or branch or agency temporarily closes pursuant to this provision, it should notify the OCC of such temporary closure as soon as feasible. This provision provides additional flexibility to OCC-regulated institutions during emergency conditions and codifies similar language currently included in the OCC's Licensing Manual.
Seventh, the final rule clarifies in § 7.3000(c) that a State legal holiday may be for the entire State or part of the State, as indicated in 12 U.S.C. 95(b)(1).
Eighth, as provided in the statute, the final rule provides in § 7.3000(c) that the Comptroller may by written order direct the affected institution to close or remain open during a State legal holiday declared for ceremonial reasons, as with a State legal holiday declared due to an emergency.
Finally, the final rule adds a new paragraph, § 7.3000(e), to provide a definition of “State” that is consistent with the definition in 12 U.S.C. 95(b)(2).
Also as proposed, the final rule also makes a number of technical changes to § 7.3000. The final rule replaces the word “country” with “United States” in the phrase describing affected geographic area to make this phrase more precise; deletes the superfluous citation to 12 U.S.C. 95 in § 7.3000(b); and deletes the superfluous first sentence of current § 7.3000(c), which states that a State or a legally authorized State official may declare a day a legal holiday for ceremonial reasons.
In making these changes, the OCC is reorganizing § 7.3000(b) and (c) so that all provisions relating to Comptroller declared legal holidays for emergency conditions are in § 7.3000(b) and all provisions related to State declared legal holidays for emergency and ceremonial reasons are in § 7.3000(c). This reorganization more clearly sets forth the standards for Comptroller and State declared legal holidays and corresponds better with the statutory text.
Section 7.3000 also provides, in paragraph (a), that a national bank's board of directors should review its banking hours and, independently of any other bank, take appropriate actions to establishing a schedule of its banking hours. As proposed, the final rule updates this provision by replacing “banking hours” with “hours of operations for customers.” The final rule also makes technical corrections to the section and paragraph heading to reflect this change in terminology. Furthermore, the final rule includes Federal savings associations and Federal branches and agencies in this provision.
Section 7.3001 permits national banks and Federal savings associations to lease excess space on bank or savings association premises to other businesses, share space jointly held with other businesses, offer its services in space owned by or leased to other businesses, and share employees when sharing space. The OCC proposed to add a cross-reference to redesignated § 7.1024, National bank or Federal savings association ownership of property, in § 7.3001(a)(1) to clarify that the requirements of § 7.1024 apply to the sharing of office space and employees pursuant to § 7.3001. The OCC did not receive any comments on this change and adopts it as proposed.
The same commenter noted that mutual associations are a distinct and very different entity from a governance perspective and requested that mutual savings associations have the same leeway in making a choice of law as national banks. This commenter also stated that mutual savings associations should not be denied the benefit of State law simply because national banks are denied those provisions by their enabling act. The OCC notes that the proposal as well as the final rule do not deny Federal mutual savings associations the benefit of State law. In fact, as noted above in the preamble discussion of § 7.2000, the final rule permits additional flexibility for Federal savings associations with respect to a choice of corporate governance law to allow parity with national banks. In suggesting and adopting these changes, the OCC recognized the distinction between Federal savings associations and national banks by considering choice of law issues for these different charters separately.
Another commenter suggested the OCC should explore further ways to harmonize national bank and Federal savings association regulations, including potential Federal savings association use of 12 U.S.C. 24 and 12 CFR part 24, to invest directly in public welfare investments. The OCC regularly reviews its regulations to determine opportunities to harmonize Federal savings associations and national bank regulations, where appropriate. The OCC staff notes that 12 CFR 160.36 already permits Federal savings associations to make
A commenter suggested that any attempt to revise the corporate governance documents of a subsidiary Federal stock savings association of a mutual holding company (MHC) should be harmonized with the Federal Reserve Board's regulation on mutual holding companies, Regulation MM.
The same commenter indicated that, while the right to vote shares above a certain percentage limit and supermajority voting provisions may be prohibited for national banks, these provisions normally are permitted for Federal savings associations. The commenter suggested that the OCC explicitly state these provisions are permissible for Federal savings associations. In response, the OCC notes that it has permitted certain anti-takeover and supermajority vote provisions for Federal savings associations, either specifically provided by regulation or authorized by the applicable State law, provided that any supermajority vote provisions are adopted by a percentage of the shareholder vote at least equal to the highest percentage that would be required to take any action under such provision.
In addition to the technical changes discussed above, the OCC proposed numerous technical changes throughout 12 CFR part 7. The OCC received no comments on these changes and adopts them as proposed. Specifically, the final rule:
• Replaces the word “shall” with “must,” “will,” or other appropriate
• Uniformly capitalizes the words “State” and “Federal” in conformance with
• Replaces the term “bank” and “savings association” with “national bank” or “Federal savings association,” respectively, where appropriate;
• Clarifies punctuation and update or conform spelling of various terms; and
• Conforms paragraph heading style.
The OCC also is making technical changes to 12 CFR 5.30 to reflect changes made by the final rule. Specifically, the final rule removes drop boxes from the definition of branch in § 5.30(d)(1)(i), pursuant to the change made by § 7.1027, and replaces the cross-reference to § 7.4003 in § 5.30(d)(i)(iii) with § 7.1027, as redesignated by this final rule.
In addition, the OCC is making a conforming change to the heading of subpart B and technical changes to various section headings in subpart B to better identify their application only to national banks.
Finally, the OCC is making technical changes to 12 CFR 4.5 to replace outdated information on office locations and responsibilities. The OCC cross-references 12 CFR part 4, subpart A, when using the term “appropriate OCC supervisory office” in 12 CFR 7.1025 and 7.1026. Twelve CFR part 4, subpart A, sets forth the physical addresses of OCC offices, including supervisory offices. The OCC is updating one address in 12 CFR 4.5,
Certain provisions of the final rule contain “collection of information” requirements within the meaning of the Paperwork Reduction Act (PRA) of 1995 (44 U.S.C. 3501-3521). In accordance with the requirements of the PRA, the OCC may not conduct or sponsor, and a respondent is not required to respond to, an information collection unless it displays a currently valid Office of Management and Budget (OMB) control number.
The OCC reviewed the final rule and determined that it revises certain information collection requirements previously cleared by OMB under OMB Control No. 1557-0204. The OCC has submitted the revised information collection to OMB for review under section 3507(d) of the PRA (44 U.S.C. 3507(d)) and section 1320.11 of the OMB's implementing regulations (5 CFR part 1320).
The information collection requirements are as follows:
•
•
•
•
•
•
In general, the Regulatory Flexibility Act (RFA) (5 U.S.C. 601
The OCC currently supervises approximately 1,156 institutions (commercial banks, trust companies, Federal savings associations, and branches or agencies of foreign banks, collectively banks), of which 745 are small entities.
The OCC has analyzed the final rule under the factors in the Unfunded Mandates Reform Act of 1995 (UMRA), 2 U.S.C. 1501
As discussed above, the final rule would not impose new mandates on more than a limited number of banks. Therefore, the OCC concludes that the final rule would not result in an expenditure of $157 million or more annually by State, local, and tribal governments, or by the private sector. As a result, the OCC finds that the final rule does not trigger the UMRA cost threshold. Accordingly, the OCC has not prepared the written statement described in section 202 of the UMRA.
Pursuant to section 302(a) of the Riegle Community Development and Regulatory Improvement Act of 1994 (RCDRIA), 12 U.S.C. 4802(a), in determining the effective date and administrative compliance requirements for new regulations that impose additional reporting, disclosure, or other requirements on insured depository institutions, the OCC must consider, consistent with principles of safety and soundness and the public interest (1) any administrative burdens that the final rule would place on depository institutions, including small depository institutions and customers of depository institutions and (2) the benefits of the final rule. The has considered the changes made by this final rule and believes that the overall effective date of April 1, 2021 will provide OCC-regulated institutions with adequate time to comply with the rule. With respect to administrative compliance requirements, the OCC has considered the administrative burdens and the benefits of this final rule and believes that any burdens are necessary for safety and soundness and proper OCC supervision. As examples, the final rule, requires a person serving as, or in the function of, a bank president, regardless of title to be a member of the bank's board of directors (§ 7.2012) and contains notice requirements with respect to payment system membership and derivatives activities. The final rule's benefits include clarifying existing requirements, codifying existing OCC interpretations and guidance, removing unnecessary provisions, and updating and modernizing certain provisions. Further discussion of the consideration by the OCC of these administrative compliance requirements is found in other sections of the final rule's
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.
OMB has determined that this final rule is not a major rule. As required by the Congressional Review Act, the OCC will submit the final rule and other appropriate reports to Congress and the Government Accountability Office for review.
The APA
Pursuant to section 553(b)(B) of the APA, general notice and the opportunity for public comment are not required with respect to a rulemaking when an “agency for good cause finds (and incorporates the finding and a brief statement of reasons therefor in the rules issued) that notice and public procedure thereon are impracticable, unnecessary, or contrary to the public interest.”
Administrative practice and procedure, Freedom of Information, Individuals with disabilities, Minority businesses, Organization and functions (Government agencies), Reporting and recordkeeping requirements, Women.
Administrative practice and procedure, Federal savings associations, National banks, Reporting and recordkeeping requirements, Securities.
Computer technology, Credit, Derivatives, Federal savings associations, Insurance, Investments, Metals, National banks, Reporting and recordkeeping requirements, Securities, Security bonds.
Electronic funds transfers, Public deposits, Federal savings associations.
Consumer protection, Investments, Manufactured homes, Mortgages, Reporting and recordkeeping requirements, Savings associations, Securities.
For the reasons set out in the preamble, the OCC amends 12 CFR chapter I as follows:
5 U.S.C. 301, 552; 12 U.S.C. 1, 93a, 161, 481, 482, 484(a), 1442, 1462a, 1463, 1464 1817(a), 1818, 1820, 1821, 1831m, 1831p-1, 1831o, 1833e, 1867, 1951
12 U.S.C. 1
The revision reads as follows:
(j) * * *
(2) * * *
(ii)
12 U.S.C. 1
(a)
(b)
(c)
(i) Whether the activity is the functional equivalent to, or a logical outgrowth of, a recognized banking activity;
(ii) Whether the activity strengthens the bank by benefiting its customers or its business;
(iii) Whether the activity involves risks similar in nature to those already assumed by banks; and
(iv) Whether the activity is authorized for State-chartered banks.
(2) The weight accorded each factor set out in paragraph (c)(1) of this section depends on the facts and circumstances of each case.
(d)
(i) Whether the activity facilitates the production or delivery of a bank's products or services, enhances the bank's ability to sell or market its products or services, or improves the effectiveness or efficiency of the bank's operations, in light of risks presented, innovations, strategies, techniques and new technologies for producing and delivering financial products and services; and
(ii) Whether the activity enables the bank to use capacity acquired for its banking operations or otherwise avoid economic loss or waste.
(2) The weight accorded each factor set out in paragraph (d)(1) of this section depends on the facts and circumstances of each case.
(a)
(b)
(i) Communicating information about providers of products and services, and proposed offering prices and terms to potential markets for these products and services;
(ii) Communicating to the seller an offer to purchase or a request for information, including forwarding completed applications, application fees, and requests for information to third-party providers;
(iii) Arranging for third-party providers to offer reduced rates to those customers referred by the national bank;
(iv) Providing administrative, clerical, and record keeping functions related to the national bank's finder activity, including retaining copies of documents, instructing and assisting individuals in the completion of documents, scheduling sales calls on behalf of sellers, and conducting market research to identify potential new customers for retailers;
(v) Conveying between interested parties expressions of interest, bids, offers, orders, and confirmations relating to a transaction;
(vi) Conveying other types of information between potential buyers, sellers, and other interested parties;
(vii) Establishing rules of general applicability governing the use and operation of the finder service, including rules that:
(A) Govern the submission of bids and offers by buyers, sellers, and other interested parties that use the finder service and the circumstances under which the finder service will pair bids and offers submitted by buyers, sellers, and other interested parties; and
(B) Govern the manner in which buyers, sellers, and other interested parties may bind themselves to the terms of a specific transaction; and
(viii) Acting as an electronic finder pursuant to § 7.5002(a)(1).
(2)
(i) Referring customers to a third party; and
(ii) Providing services and products to customers indirectly through a third-party discount program.
(c)
(d)
The revisions and addition read as follows:
(a)
(c)
(a)
(b)
(a)
(b)
(a)
(b)
(c)
(1) Already organized and has obtained a license from the Small Business Administration; or
(2) In the process of being organized.
(d)
The revisions read as follows:
(a)
(b) * * * (1)
(iv) The national bank or Federal savings association either should be fully collateralized or have a post-honor right of reimbursement from the applicant or from another issuer of an independent undertaking. Alternatively, if the national bank's or Federal savings association's undertaking is to purchase documents of title, securities, or other valuable documents, the bank or savings association should obtain a first priority right to realize on the documents if the
(2) * * *
(i) In the event that the undertaking is to honor by delivery of an item of value other than money, the national bank or Federal savings association should ensure that market fluctuations that affect the value of the item will not cause the bank or savings association to assume undue market risk;
A financial literacy program is a program the principal purpose of which is to be educational for members of the community. The premises of, or a facility used by, a school or other organization at which a national bank participates in a financial literacy program is not a branch for purposes of 12 U.S.C. 36 provided the bank does not establish and operate the premises or facility. The OCC considers establishment and operation in this context on a case by case basis, considering the facts and circumstances. However, the premises or facility is not a branch of the national bank if the safe harbor test in § 7.1012(c)(2) applicable to messenger services established by third parties is satisfied. The factor discussed in § 7.1012(c)(2)(i) can be met if bank employee participation in the financial literacy program consists of managing the program or conducting or engaging in financial education activities provided the school or other organization retains control over the program and over the premises or facilities at which the program is held.
(a)
(b)
(1)
(2)
(3)
(c)
(1) The structure of the transaction is necessary for making the tax credits or other tax benefits available to the national bank or Federal savings association;
(2) The transaction is of limited tenure and is not indefinite, including retaining a limited investment interest that is required by law to obtain continuing tax benefits or needed to obtain the expected rate of return;
(3) The tax benefits and other payments received by the national bank or Federal savings association from the transaction repay the investment and provide the expected rate of return at the time of underwriting;
(4) Consistent with paragraph (c)(3) of this section, the national bank or Federal savings association does not rely on appreciation of value in the project or property rights underlying the project for repayment;
(5) The national bank or Federal savings association uses underwriting and credit approval criteria and standards that are substantially equivalent to the underwriting and credit approval criteria and standards used for a traditional commercial loan;
(6) The national bank or Federal savings association is a passive investor in the transaction and is unable to direct the affairs of the project company; and
(7) The national bank or Federal savings association appropriately accounts for the transaction initially and on an ongoing basis and has documented contemporaneously its accounting assessment and conclusion.
(d)
(1) The national bank or Federal savings association cannot control the sale of energy, if any, from the project;
(2) The national bank or Federal savings association limits the total dollar amount of tax equity finance transactions undertaken pursuant to this section to no more than five percent of its capital and surplus, unless the OCC determines, by written approval of a written request by the national bank or Federal savings association to exceed the five percent limit, that a higher aggregate limit will not pose an unreasonable risk to the national bank or Federal savings association and that the tax equity finance transactions in the national bank's or Federal savings association's portfolio will not be conducted in an unsafe or unsound manner; provided, however, that in no case may a national bank or Federal savings association's total dollar amount of tax equity finance transactions undertaken pursuant to this section exceed 15 percent of its capital and surplus;
(3) The national bank or Federal savings association has provided written notification to the appropriate OCC supervisory office, prior to engaging in each tax equity finance transaction that includes its evaluation of the risks posed by the transaction;
(4) The national bank or Federal savings association can identify, measure, monitor, and control the associated risks of its tax equity finance transaction activities individually and as a whole on an ongoing basis to ensure that such activities are conducted in a safe and sound manner; and
(5) The national bank or Federal savings association obtains a legal opinion or has other good faith, reasoned bases for making a determination that tax credits or other tax benefits are available before engaging in a tax equity finance transaction.
(e)
(a)
(b)
(1)
(2)
(3)
(4)
(5)
(c)
(2)
(d)
(i) Has complied with the safety and soundness review requirements in paragraph (e)(1) of this section; and
(ii) Will comply with the safety and soundness review and notification requirements in paragraphs (e)(2) and (3) of this section.
(2)
(i) The rules of the payment system do not impose liability for operational losses on members; or
(ii) The national bank's or Federal savings association's liability for operational losses is limited by the rules of the payment system to specific and appropriate limits that do not exceed the lower of:
(A) The legal lending limit under 12 CFR part 32; or
(B) The limit set for the bank or savings association by the OCC.
(e)
(i) Identify and evaluate the risks posed by membership in the payment system, taking into account whether the liability of the bank or savings association is limited; and
(ii) Ensure that it can measure, monitor, and control the risks identified pursuant to paragraph (e)(1)(i) of this section.
(2) After joining a payment system, a national bank or Federal savings association must manage the risks of the payment system on an ongoing basis. This ongoing risk management must:
(i) Identify and evaluate the risks posed by membership in the payment system, taking into account whether the liability of the bank or savings association is limited; and
(ii) Measure, monitor, and control the risks identified pursuant to paragraph (e)(2)(i) of this section.
(3) If the national bank or Federal savings association identifies risks during the ongoing risk management required by paragraph (e)(2) of this section that raise safety and soundness concerns, such as a material change to the bank's or savings association's liability or indemnification responsibilities, the national bank or Federal savings association must:
(i) Notify the appropriate OCC supervisory office as soon as the safety and soundness concern is identified; and
(ii) Take appropriate actions to remediate the risk.
(4) A national bank or Federal savings association that believes its open-ended liability is otherwise limited (
(i) Prior to joining the payment system, the bank or savings association obtains a written legal opinion that:
(A) Describes how the payment system allocates liability for operational losses; and
(B) Concludes the potential liability for operational losses for the national bank or Federal savings association is in fact limited to specific and appropriate limits that do not exceed the lower of:
(
(
(ii) There are no material changes to the liability or indemnification requirements applicable to the bank or savings association since the issuance of the written legal opinion.
(f)
(i) Does the processing occur on a real-time gross settlement basis or provide reasonable assurance (
(ii) How does the payment system's rules limit its liability to members?
(iii) Does the payment system have insurance coverage and/or self-insurance arrangements to cover operational losses?
(iv) Do the payment system's rules provide an unambiguous pro-rata loss allocation methodology under its indemnity provisions and does the methodology provide members the opportunity to reduce or eliminate liability exposure by decreasing or ceasing use of the payment system?
(v) Do the payment system's rules provide for unambiguous membership withdrawal procedures that do not require the prior approval of the system?
(vi) Does the payment system have appropriate admission and continuing participation requirements for system participants? Such requirements should address, among other things:
(A) The participants' access to sufficient financial resources to meet obligations arising from participation;
(B) The adequacy of participants' operational capacities to meet obligations arising from participation; and
(C) The adequacy of the participants' own risk management processes.
(vii) Does the payment system have processes and controls in place to verify and monitor on an ongoing basis the compliance of each participant with admission and participation requirements?
(viii) Does the payment system have written policies and procedures for addressing participant failures to meet ongoing participation requirements?
(ix) Are the payment system's rules relating to the system's emergency authorities unambiguous and may they be amended or otherwise altered without prior notification to all members and an opportunity to withdraw?
(x) Is the payment system governed by uniform, comprehensive and clear legal standards in its operating jurisdiction that address payment and/or settlement activities?
(xi) Is the payment system subject to and in compliance (or observance) with the Committee on Payment and Settlement Systems and the Technical Committee of the International Organization of Securities Commissions (CPSS—IOSCO) Principles for Financial Market Infrastructures?
(xii) Is the payment system designated as a systemically important financial market utility (SIFMU) by the Financial Stability Oversight Counsel (FSOC) or is it the international or foreign equivalent?
(xiii) Does the payment system provide members with information relevant to governance, risk management practices, and operations in a timely manner and with sufficient transparency and particularity for the bank to ascertain with reasonable certainty the bank's level of risk exposure to the system?
(xiv) Is the payment system operated by or subject to oversight of a central bank or regulatory authority?
(xv) Is the payment system legally organized as a not-for-profit enterprise or is it owned and operated by a government entity?
(xvi) Does the payment system have appropriate systems and controls for communicating to members in a timely manner about material events that relate to or could result in potential operational losses,
(xvii) Has the payment system ever exercised its authority under indemnification provisions?
(2) A national bank or Federal savings association should consider, at a minimum, the following characteristics of its risk management program when conducting an analysis required by paragraph (e) of this section:
(i) Does the bank or savings association have appropriate board supervision and managerial and staff expertise?
(ii) Does the bank or savings association have comprehensive policies and operating procedures with respect to its risk identification, measurement and management information systems that are routinely reviewed?
(iii) Does the bank or savings association have effective risk controls and processes to oversee and ensure the continuing effectiveness of the risk management process? The program should include a formal process for approval of payment system memberships as well as ongoing monitoring and measurement of activity against predetermined risk limits.
(iv) Does the bank or savings association's membership evaluation process include assessments and analyses of:
(A) The credit quality of the entity;
(B) The entity's risk management practices;
(C) Settlement and default procedures of the entity;
(D) Any default or loss-sharing precedents and any other applicable limits or restrictions of the entity;
(E) Key risks associated with joining the entity; and
(F) The incremental effect of additional memberships in aggregate exposure to payment system risk?
(v) Does the bank or savings association's risk management program include policies and procedures that identify and estimate the level of potential operational risks, at both inception of membership and on an on-going basis?
(vi) Does the bank or savings association have auditing procedures to ensure the integrity of risk measurement, control and reporting systems?
(vii) Does the program include mechanisms to monitor, estimate, and maintain control over the bank or savings association's potential liabilities for operational losses on an ongoing basis. This should include:
(A) Limits and other controls with respect to each identified risk factor;
(B) Reports generated throughout the processes that accurately present the nature and level(s) of risk taken and demonstrate compliance with approved polices and limits; and
(C) Identification of the business unit and/or individuals responsible for measuring and monitoring risk exposures, as well as those individuals responsible for monitoring compliance with policies and risk exposure limits.
(viii) Does a bank or savings association with memberships in multiple payment systems have the ability to monitor and report aggregate risk exposures and measurement against risk limits both at the sponsoring business line level and the total exposure organizationally?
A remote service unit (RSU) is an automated or unstaffed facility, operated
(a)
(b)
A location at which a national bank operates a loan production office (LPO), a deposit production office (DPO), and a remote service unit (RSU) is not a “branch” within the meaning of 12 U.S.C. 36(j) by virtue of that combination. Since an LPO, DPO, or RSU is not, individually, a branch under 12 U.S.C. 36(j), any combination of these facilities at one location does not create a branch. The RSU at such a combined location must be primarily operated by the customer with at most delimited assistance from bank personnel.
(a)
(b)
(1)
(2)
(3)
(4)
(5)
(6)
(7)
(c)
(1) Derivatives transactions with payments based on underlyings a national bank is permitted to purchase directly as an investment;
(2) Derivatives transactions with any underlying to hedge the risks arising from bank-permissible activities;
(3) Derivatives transactions as a financial intermediary with any underlying that are customer-driven, cash-settled, and either perfectly-matched or portfolio-hedged;
(4) Derivatives transactions as a financial intermediary with any underlying that are customer-driven, physically-settled by transitory title transfer, and either perfectly-matched or portfolio-hedged; and
(5) Derivatives transactions as a financial intermediary with any underlying that are customer-driven, physically-hedged, and either portfolio-hedged or hedged on a transaction-by-transaction basis, and provided that:
(i) The national bank does not take physical delivery of any commodity by receipt of physical quantities of the commodity on bank premises; and
(ii) Physical hedging activities meet the requirements of paragraph (e) of this section.
(d)
(i) Engaging in derivatives hedging activities pursuant to paragraph (c)(2) of this section;
(ii) Expanding the bank's derivatives hedging activities pursuant to paragraph (c)(2) of this section to include a new category of underlying for derivatives transactions;
(iii) Engaging in customer-driven financial intermediation derivatives activities pursuant to paragraph (c)(3), (4), or (5) of this section; and
(iv) Expanding the bank's customer-driven financial intermediation derivatives activities pursuant to paragraph (c)(3), (4), or (5) of this section to include any new category of underlyings.
(2) The notice pursuant to paragraph (d)(1) of this section must be submitted in writing at least 30 days before the national bank commences the activity and include the following information:
(i) A detailed description of the proposed activity, including the relevant underlyings;
(ii) The anticipated start date of the activity; and
(iii) A detailed description of the bank's risk management system (policies, processes, personnel, and control systems) for identifying, measuring, monitoring, and controlling the risks of the activity.
(e)
(2) The physical hedging activities must offer a cost-effective means to hedge risks arising from permissible banking activities.
(3) The national bank must not take anticipatory or maintain residual positions in the underlying except as necessary for the orderly establishment or unwinding of a hedging position.
(4) The national bank must not acquire equity securities for hedging purposes that constitute more than 5 percent of a class of voting securities of any issuer.
(5) With respect to physical hedging involving commodities:
(i) A national bank's physical position in a particular physical commodity (including, as applicable, delivery point, purity, grade, chemical composition, weight, and size) must not be more than 5 percent of the gross notional value of the bank's derivatives that are in that particular physical commodity and allow for physical settlement within 30 days. Title to commodities acquired and immediately sold by a transitory title transfer does not count against the 5 percent limit;
(ii) The physical position must more effectively reduce risk than a cash-settled hedge referencing the same commodity; and
(iii) The physical position hedges a physically-settled customer-driven commodity derivative transaction(s).
(f)
The addition and revisions are as follows:
(a)
(c)
(d)
(1) The name of the national bank;
(2) Citation to the State statutes or regulations involved;
(3) A discussion as to whether a similarly situated State bank is subject to or may adopt the corporate governance provision;
(4) Identification of all Federal banking statutes or regulations that are on the same subject as, or otherwise have a bearing on, the subject of the proposed State corporate governance provision; and
(5) An analysis of how the proposed practice is not inconsistent with applicable Federal statutes or regulations and is not inconsistent with bank safety and soundness.
(a)
(b)
(1)
(2)
(3)
(4)
(i) Only the board of directors, and not the shareholders, have the right to call special meetings of the shareholders; or
(ii) If shareholders have the right to call special meetings, a high percentage of shareholders is needed to call the meeting.
(5)
(c)
(1)
(2)
(d)
(i) The bank is less than adequately capitalized (as defined in 12 CFR part 6);
(ii) The bank is in troubled condition (as defined in 12 CFR 5.51(c)(7));
(iii) Grounds for the appointment of a receiver under 12 U.S.C. 191, as determined by the OCC, are present; or
(iv) The bank is otherwise in less than satisfactory condition, as determined by the OCC.
(2)
(i) The bank is not subject to any of the conditions in paragraph (d)(1) of this section; and
(ii) The bank includes, in its articles of association or its bylaws, as applicable pursuant to paragraph (f) of this section, a limitation that would make the provisions ineffective if:
(A) The conditions in paragraph (d)(1) of this section exist; or
(B) The OCC otherwise directs the bank not to follow the provision for supervisory reasons.
(e)
(i) Inconsistent with Federal banking statutes or regulations, notwithstanding paragraph (b) of this section; or
(ii) Inconsistent with bank safety and soundness other than as provided in paragraph (d) of this section.
(2)
(f)
(2)
The revision reads as follows:
(a)
(b)
(c)
(2)
(d)
The revision reads as follows:
(a)
The revision reads as follows:
The revision reads as follows:
The revision reads as follows:
(a)
(1) A notary public, including one who is a director but not an officer of the national bank; or
(2) Any person, including one who is a director but not an officer of the national bank, having an official seal and authorized by the State to administer oaths.
The revision reads as follows:
The revision reads as follows:
Pursuant to 12 U.S.C. 76, the person serving as, or in the function of, president of a national bank, regardless of title, must be a member of the board of directors. A director other than the person serving as, or in the function of, president may be elected chairman of the board.
(a)
(b)
(c)
(d)
The revision and additions read as follows:
(a)
(b)
(i) The name and location of the bank;
(ii) The name of the holder of record of the stock represented thereby;
(iii) The number and class of shares which the certificate represents;
(iv) If the bank issues more than one class of stock, the respective rights, preferences, privileges, voting rights, powers, restrictions, limitations, and qualifications of each class of stock issued (unless incorporated by reference to the articles of association);
(v) Signatures of the president and cashier of the bank, or such other officers as the bylaws of the bank provide; and
(vi) The seal of the bank.
(2) The requirements of paragraph (b)(1)(v) of this section may be met through the use of electronic means or by facsimile.
The revision reads as follows:
(a)
(b)
(c)
(d)
(e)
(a)
(b)
(c)
(d)
(e)
In addition to the electronic activities specifically permitted in § 7.5004 (sale of excess electronic capacity and by-products) and § 7.5006 (incidental non-financial data processing), the OCC has determined that the following electronic activities are incidental to the business of banking, pursuant to § 7.1000. This list of activities is illustrative and not exclusive; the OCC may determine that other activities are permissible pursuant to this authority.
(a) Website development where incidental to other banking services;
(b) Internet access and email provided on a non-profit basis as a promotional activity;
(c) Advisory and consulting services on electronic activities where the services are incidental to customer use of electronic banking services; and
(d) Sale of equipment that is convenient or useful to customer's use of related electronic banking services, such as specialized terminals for scanning checks that will be deposited electronically by wholesale customers of banks under the Check Clearing for the 21st Century Act, Public Law 108-100 (12 U.S.C. 5001-5018) (the Check 21 Act).
12 U.S.C. 1462a, 1463, 1464, 1828, 5412(b)(2)(B).
12 U.S.C. 1462a, 1463, 1464, 1467a, 1701j-3, 1828, 3803, 3806, 5412(b)(2)(B); 42 U.S.C. 4106.